Mayor Chris Doherty cut the pay of about 400 employees to the federal minimum wage of $7.25 per hour once already this summer, saying the city was nearly broke. But he said the tax-anticipation loan from New York-based Amalgamated Bank should close on Thursday, allowing payroll to be met on Friday.
The loan would also allow the city of more than 76,000 to repay wages owed from the July 6 pay period.
"Everything seems to be on track," Doherty told The Times-Tribune (http://bit.ly/RXWIMn).
Scranton sought the loan last week in conjunction with City Council's approval of a financial recovery plan. The plan includes a commuter tax, a sales tax and increased contributions from city nonprofits.
City Business Administrator Ryan McGowan and fire union President John Judge also both said they believed the loan closing and payday would occur on time.
The Pennsylvania Department of Community and Economic Development, meanwhile, has approved a $2.25 million aid package to the perpetually cash-strapped city, which was designated as "financially distressed" by the state 20 years ago. The state aid—expected to take a few weeks to process—will be used to pay down the Amalgamate loan. Scranton has also agreed to give 60 percent of its earned-income taxes to Amalgamated until the principal is repaid.
The loan must be repaid by Dec. 15.
Information from: The Times-Tribune, http://thetimes-tribune.com/