Published: October 10, 2008 11:44 pm            

Fiscal crisis hits county

EBENSBURG — The financial crisis in U.S. and global markets now is impacting Cambria County fiscally, and as a result, taxpayers can expect a tax increase in 2009, the commissioners said Friday.

Driving the fiscal woes is the dive in interest earnings in the county’s retirement fund, so Cambria likely will have to fully fund next year’s contribution. It is expected to be $2 million to $3 million.

Compounding the financial problems are continuing deficits at Laurel Crest, the county nursing home. The county’s general fund, with a slow cash flow, can no longer continue to pay bills there.

At the same time, the cost of health care for both employees and retirees – which comes from the county’s general fund – is expected to cost an additional $700,000 to $1 million in 2009, even with employees paying some costs.

As a result, Cambria will ask the county court to authorize the borrowing of $6 million to pay the county’s bills/payroll through the end of the year while keeping Laurel Crest operating.

Immediate measures are being taken to curb spending and cut costs, including:

• A hiring freeze except for essential workers.

• A wage freeze for one year for nonunion employees, with a request to union workers to accept the same. The potential savings if all cooperate is estimated at $500,000 to $600,000 next year.

• A cutback in Laurel Crest’s work force. A total of 39 positions will be affected, with a potential of 35 layoffs.

However, of the 35 workers, 13 have necessary certifications to be absorbed into nurse aide positions, leaving 22 to be furloughed. Four other positions will be cut through retirements and resignations.

• Suspending use of per diem employees except in essential services, with a projected savings to year’s end of $140,000 to $150,000.

“We have to take some proactive steps to minimize the impact on the taxpayers,” President Commissioner P.J. Stevens said.

Commissioner Milan Gjurich said, “As elected officials we must make tough decisions, and today is a classic example of that.”

Gjurich said that Commissioner Bill Harris, who was out of town Friday, also supports the austerity measures.

The county was able to meet Friday’s payrolls only with the help of a $1.4 million reimbursement that came in from the state for Laurel Crest, county Controller Ed Cernic Jr. said.

Cernic predicted that “a significant tax increase” will be necessary, but did not give a specific number.

One mill of the county’s current levy of 23.24 mills brings in about $1.1 million annually.

Every mill costs the average homeowner $15 or $16 a year, Stevens said.

Stevens said Cambria’s 2008 budget “is on track, but the difficulty came in Laurel Crest’s shortfall. The county general fund has been

paying the bills (at Laurel Crest) to the point it’s jeopardizing our ability to pay our own bills.”

He said the $6 million loan – if approved by the court – “will make the county whole.”

He does not anticipate a problem in getting a loan.

The first of the Laurel Crest layoffs was approved, with Frank Kusher, the worker compensation director, being furloughed Oct. 4. His salary was $47,507 a year.

        

• Click to discuss this story with other readers on our forums.