SCRANTON, PA – Scranton’s police and fire unions have received a judgment against the city for the overdue $21 million that the city owes the unions from a landmark arbitration ruling.
The money was due July 2, but the city has not yet paid and is still seeking borrowing or selling an asset to honor the bill, Mayor Chris Doherty said.
But the judgment means the unions now can seize city assets and sell them to collect what is owed, said city solicitor Paul Kelly and the unions’ attorney, Thomas Jennings.
“Whenever a judgment is granted, you can go to the sheriff and levy against assets,” Mr. Kelly said. “They (the unions) can sell city assets. They can sell firetrucks, garbage trucks – they can sell City Hall.”
That might sound far-fetched, but maybe not.
Mr. Jennings said, “Do I want to take firetrucks and City Hall? Of course not. But would I do it if I have to? In a New York minute.”
That the city owes the money is not in dispute. The city did not contest the judgment sought and received Monday by the unions in Lackawanna County Court, Mr. Kelly said. Judge Michael Barrasse signed orders entering judgments against the city of $10.4 million for the fire union and $10.5 million for the police unions.
The judgment is the latest event in the epic labor saga between the mayor and unions that was fought against the backdrop of the city’s longtime designation as financially distressed under state Act 47. Years of legal fights came to a head in October 2011, when the state Supreme Court issued its landmark ruling in favor of the unions. The city initially estimated the back-pay arbitration awards at $17 million, but an audit completed a few months ago pegged the figure at $20.9 million.
In the wake of the landmark ruling, both sides reached a settlement last summer that called for the unions giving the city a full year to obtain the court-awarded payment interest-free. After July, however, late damages of 6 percent – which equates to $100,000 per month, started kicking in, and the city now owes $200,000 for July and August, on top of the $20.9 million.
And the clock is ticking.
The city has been trying to raise the cash through a private placement bond to pay the unions, but so far has been unsuccessful. Asked where that initiative stands, Mr. Doherty said, “We’re moving right along.”
As an alternative plan, the city also is considering a sale of the Scranton Sewer Authority, city officials said.
Could the unions instead sell the sewer authority out from under the city?
“I haven’t given it a moment’s thought. But if that’s where I’ve got to go to get the money, that’s what I’ve got to do,” Mr. Jennings said.
“You go for the big assets first. Why would I go for ballpoint pens? Why would I not start with the most valuable assets.”
Taxes that are collected also are an asset that perhaps could be levied by the unions, he said.
“I don’t want to do this, but after 10 years (of legal battles) and giving the city a year to get the money together, I’m out of patience and so are my clients,” Mr. Jennings said. “I’m going to do whatever I reasonably have to do to get the money for my clients. I don’t have a war plan and the truth is I don’t want to do any of it.”
During City Council’s meeting Thursday, Councilman Pat Rogan addressed the judgment issue. Referencing the state Department of Community and Economic Development having helped fight the city’s labor dispute in court that the city ultimately lost, Mr. Rogan said of the judgment: “It’s money that’s due to the workers. We can’t question that. They are due that money.
“Unfortunately, Mayor Doherty gambled on the DCED and they lost. Now the city is coming up with a $21 million hole just for this one item. That’s money that was due many years ago.”