The Tribune Democrat, Johnstown, PA

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October 17, 2013

Cambria short on funds

EBENSBURG — Cambria County Controller Edward Cernic Jr., has robbed Peter to pay Paul, as the old saying goes, and has enough money to meet the county’s $1.2 million payroll today, but little money is in place for the final two months of 2013.

Cernic, controller for the past eight years, says he’s concerned.

“We’ve never had to do this this early,” said Cernic on Thursday. “We’re making payroll this week, but after that I don’t know.”

During the past several weeks the county, by borrowing from the fund balances of its agencies, has generated $2.6 million in funds to cover the payroll and the $1 million tab due for health care costs at the first of each month.

But the reserve accounts from agencies such as Area Agency on Aging, drug and alcohol and other county human services branches have been tapped heavily, leaving each with a $10,000 reserve, Cernic said.

As of Thursday, the county had a general fund total of a little over $100,000, Cernic said. Unpaid bills totaled $300,000.

While some funds are anticipated over the next two months in the form of state reimbursements for services provided by county agencies, nearly all real estate tax revenue has been paid and spent, Cernic said.

Budget meetings by the commissioners to develop a spending plan for 2014 are already well underway, President Commissioner Douglas Lengenfelder said. Work is being done to guarantee money will be available for the next payroll and health insurance premium due Nov. 1.

Lengenfelder said the tight cash flow problem comes as no surprise because of the change in the budget approach taken last year.

“We’re working out something with the banks. The deal is in the works,” Lengenfelder said.

“We’re working with the banks in the hopes of putting the county in a better position at the end of the year.”

Lengenfelder said details of the plan will be revealed in an upcoming commissioners’ meeting. The board next meets at 10 a.m. Thursday.

“We knew at the beginning of this year that for October to December money would be tight,” he said.

In late November, the commissioners unveiled a 2013 budget of $56.7 million which avoided a tax increase in part by freezing wages of nonunion and management workers.

They also asked departments and agencies to reduce by 4.75 percent their proposed budgetary requests in the hopes of keeping operating costs down.

Introduced at that time was a zero-based budgeting process used in developing budget requests, a move Lengenfelder said  made people look at what they’re doing and spending.

“Last year, we got our hands around the scope of the problem and some very smart folks are coming up with a long-term remedy,” he said.

Lengenfelder questioned Cernic’s analysis that the agencies funds have been all but exhausted.

While not offering specifics, Lengenfelder said the agencies still have some money available.

“There are other dollars that can’t be touched. There is money the county can’t touch,” he said. “We’re not ready to default on anything. We’ve been working on this all year.”

Kathy Mellott covers the Cambria County courthouse for The Tribune-Democrat. Follow her on Twitter at kathymellotttd.

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