The Tribune Democrat, Johnstown, PA

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April 6, 2014

Running on empty? Cambria faces potential financial shutdown

JOHNSTOWN — It’s a shockingly frightening scenario: Cambria County, overburdened by debt and dangerously low on cash, is unable to meet its financial responsibilities.

Looking to collect on a debt that the county owes you for a service provided months ago? Too bad.

Do you depend on any one of the agencies that the county has borrowed millions of dollars from – such as the Area Agency on Aging – but that it cannot afford to repay, leaving it, and by extension you, in the lurch? Sorry, you’re out of luck.

Are you a Cambria County employee who works hard at an important job that not only makes a difference in the community but also provides an income to support your family? Unfortunately, there will not be a paycheck for you at the end of the week. There’s simply no more money to be had.

That, according to Cambria County Controller Ed Cernic Jr., is a worst-case scenario that very well could happen before the end of the year. Cernic told The Tribune-Democrat’s editorial board that he  does not expect to be able to meet payroll for the county’s more than 800 employees by mid-August unless something changes quickly.

Not surprisingly, it’s also a scenario that Douglas Lengenfelder, Cambria County’s president commissioner, wholeheartedly disputes. As we’ve noted before, Lengenfelder and Cernic can’t seem to agree on much of anything professionally.

Under normal circumstances, the two leaders’ inability to compromise is worrying – the voters elected them to work together for the good of Cambria County – but in this case it could be catastrophic.

Cernic has put together a plan for refinancing the county’s debt, which would provide short-term relief but add to the long-term debt.

Lengenfelder wants to take the opposite approach – suffer through some lean times now and hope for better times down the road.

He told reporter Kathy Mellott that there are “all sorts of options” for the county when it comes to dealing with its financial crisis.

In May, if it looks like problems could be significant in August, “maybe we start laying people off. There’s all sorts of things that can happen,” Lengenfelder said.

We believe that both Lengenfelder and Cernic are genuinely acting in what they believe are in

the best interests of the county. But only one of them can win out on this issue and how to move forward on it. Making the wrong decision could cripple the county’s ability to move forward economically for years to come, as not only would it seriously impact Cambria’s debt, but it also would lead to a downgraded bond rating, making it extremely difficult to borrow money in the future.

It’s hard to overstate the importance of Cambria County’s next move. That’s why we believe that the wait-and-see approach that Lengenfelder suggests is too risky. The county needs to be proactive, not reactive.

While we’re not fans of taking on added debt, we understand the logic behind Cernic’s plan and the absolute necessity to refinance the debt now. The alternative is just too dangerous.

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