The Tribune Democrat, Johnstown, PA

Local News

October 24, 2013

Cambria County may end year $8M in hole

EBENSBURG — As county officials continue to look for money to cover payroll and other expenses through year’s end, preliminary figures show  there could be an $8 million deficit at the end of December.

Red ink is not new to Cambria County, but the projected deficit is $2 million higher than last year’s $6 million deficit, Controller Edward Cernic Jr. said.

Cernic and some of his staff were meeting Thursday afternoon to look for yet untapped funds to carry the county through November and December.

The commissioners continue to meet with bankers as they look for funding, which President Commissioner Douglas Lengenfelder said will help pay the bills for the next two months.

“We would be the first to admit that there is an issue with cash flow and we’re working with banks with an answer (expected) by the end of October or mid-November,” he said Thursday during the commissioners biweekly meeting.

Looming is a $5 million payment on the $10 million tax anticipation loan. Still unpaid is more than $300,000 in past due bills to vendors for services and products, Cernic said.

Payments of nearly $1 million are being withheld from county agencies such as Aging, Children & Youth and Drug and Alcohol. This is on top of $2.6 million transferred and already spent from the reserves of a number of county agencies, Cernic said.

The county has to meet five more payrolls of $1.2 million each through the end of 2013 and will owe $2 million to the health insurance fund.

“We’ve done this in the past, but not to this extent,” Cernic said of the fund shifting and payment delays. “We’re on a collision course here.”

Meanwhile, work is underway on the 2014 budget planned to be unveiled in late November.

Chief clerk Steve Ettien said he began soliciting input from county elected officials and department heads in mid-September and is meeting this week with many of them.

Everyone is aware of the problems the county is facing as it closes out the current $56.7 million budget, and no one is looking for anything much, he said.

“Everyone is genuinely trying to cut back,” he said. “The budgets are very thin. It’s mostly just people (employees).”

Payroll is a significant category with 856 county employees counting those working full time, part time and per diem and tax collectors.

Next week Ettien plans to go through each departmental budget line by line looking for any additional areas for cuts. He also will check math and make sure no figures were entered improperly.

“I’m shutting my door. I want to be left alone,” he said Thursday. “There are 186 pages in the budget, with 50 lines per page.”

In early November he plans to sit down with Cernic and his first deputy, Christine Segear, along with county finance/budget director William Stasko to fine-tune the plan.

Everything is being looked at, Ettien said, from the best place to purchase gas for county- owned vehicles to whether to continue to lease or purchase printers for the offices.

Money was on the minds of Cernic and Lengenfelder at the close of Thursday’s meeting.

In a verbal fisticuffs, they challenged one another regarding the $1 million payment into the county-held health care fund made earlier this month.

The commissioners, through Ettien, had asked Cernic to hold the payment into the self-insured health system and use the money for other expenses.

A portion of the money is deducted from the employees, making it wrong if it is not put into the fund, Cernic argued.

Instead, Lengenfelder said, the controller has opted to withhold expense reimbursements from county employees.

“He wants to withhold money from the people. We wanted to hold money that would not have an impact on the insurance plan” Lengenfelder said.

The health insurance plan currently has a balance in excess of $2 million, he said.

To withhold the payment into the plan means the county should not be able to make the employee deductions.

Showing that every penny counts, a memo went out from the controller’s office earlier this week as notice that expense reimbursements will be withheld because of the cash flow problem.

The payments total about $7,500, and Cernic said he hopes to be able to transfer the funds in two to three weeks.

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

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