Award: Jeannette liable for $300,000
The City of Jeannette, which will need a $500,000 loan to pay its bills and meet payroll through the end of the year, will have to pay nearly $300,000 in damages to a local businessman.
A board of view set the award for Frank Trigona after a court last year ruled the city exceeded its legal authority by denying Trigona occupancy permits for two buildings he owns because he owed Jeannette back taxes.
The award covers lost rent and revenue on a building that Trigona had rented to Seton Hill Day Care and a tavern he had operated on Clay Avenue.
The award grants Trigona $200,000 in damages, more than $81,000 in legal fees, more than $10,000 in mortgage interest, and $4,000 in appraisal fees.
The city's insurance carrier, Summit Risk Services Inc. of Hatboro, Montgomery County, determined in 2006 that it had no legal obligation to defend the city and would not cover the award.
Trigona declined to comment.
Councilman Ron Dinsmore, who heads the budget and finance committee, said council has not been notified of the award.
"I don't have any idea," he said. "It can be appealed."
Dinsmore and other officials said the city will have to borrow $500,000 to get through the end of the year, although no decision has been made. He said council will work on the budget next Monday prior to next Wednesday's council meeting.
"We're following our consultant's advice," Dinsmore said. Delta Development Group, a Mechanicsburg-based consulting firm, was hired in July as officials wrestled with the developing budget crisis.
The city is trying to stave off being declared a financially distressed city, which would mean the state would supervise an economic recovery plan.
Councilman Jeff DePalma said the city will run out of money by the middle of this month and bank officials have told council they will not even consider a loan until a balanced budget is ready for adoption.
"We haven't even talked about the budget," DePalma said. "There will be no money for payroll or to pay our bills."
Councilman John Busato said City Clerk Mike Minyon has yet to notify council of the Trigona award.
"I heard rumors. Officially, I have not been notified," Busato said.
Busato said some councilmen want to borrow money again from a 1998 bond issue floated for $2.9 million to pay for a flood control project and then repay the money later with a bank loan.
"What if nobody gives us a loan?" Busato said.
Without a balanced budget, Busato said, banks have warned the city will not get any money.
"You don't put a $5 million budget together in a week and call it a budget," he said. "We need to go line by line."
Councilman Mark Clark said council will present an "outline budget" to banks showing where the city will save money and increase revenue. He said the city will seek a wage freeze from unions representing the police, fire and public works departments.
He said that should be sufficient to land a loan.
"That loan is a big part of us carrying us through the rest of the year," Clark said.
As for the Trigona award, Clark said, "We'll deal with that when we have to."
Mayor Robert Carter said getting through the rest of the year hinges on the loan.
"I'm optimistic we can get it. We can turn this around with a little assistance," Carter said.
He said he anticipates officials will discuss the Trigona award when they meet at 6 p.m. Monday in City Hall.
City Clerk Mike Minyon did not respond to a request for comment.