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State Auditor General Applauds Scranton’s Pension Recovery

December 6, 2018

SCRANTON — Over the past four years, the city’s pension system has gone from teetering on the brink of insolvency – worst condition in the state — to greatly stabilized and recovering, state Auditor General Eugene DePasquale said Thursday. In an announcement at City Hall, DePasquale said his new audit of Scranton’s municipal fire, police and nonuniform pensions “showed noticeable, across-the-board improvements, including stronger funding and reduced debt levels.” While the city’s financial situation has had marked improvement, the Scranton School District’s finances have worsened, DePasquale said. The Wolf administration is considering giving the school district an unspecified amount of money to help cover a budget gap, DePasquale said. He warned the school district that his office stands ready to conduct another audit of the school’s finances to ensure that state funding goes toward educational purposes. Scranton School Director Paige Gebhardt Cognetti, who attended DePasquale’s announcement at City Hall, said afterward that she welcomes the auditor general’s continued scrutiny of district finances. Regarding Scranton’s municipal financial condition, DePasquale warned in 2014 that if nothing was done to improve the severely distresed municipal pension system, it would go broke within three to five years, and possibly push the city into bankruptcy. At that time, Mayor Bill Courtright was seven months into the first year of his first term, and vowed to attack the mismanagement and poor financial decisions that put pension funds on life support. Since then, the pension system has made a remarkable recovery, DePasquale said. The pension system has improved from severely distressed, the worst in the state, to now heading toward moderately distressed, an achievement that seemed unattainable a few years ago. “We were the worst” pension distress in the state, Courtright said in remarks from the podium. Courtright also credited the pension boards and municipal unions for the turnaround. Still, there remains much room for improvement, DePasquale said. The city pension system should improve even more from impacts of the city’s recently approved deposit of $22.9 million from sewer sale proceeds into the pension system, he said. The new audit did not take into account that infusion of funding, he said. Contact the writer: jlockwood@timesshamrock.com; 570-348-9100 x5185; @jlockwoodTT on Twitter

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