Cambria budget woes linger

EBENSBURG – Controller Ed Cernic Jr. said Cambria County’s budget shortfall is worse than expected, saying Thursday he has less than half of the money needed to make next week’s payroll.

He also said he believes the county’s shortfall so far this year is $1.8 million and $2.2 million worse than it was last year, when the county experienced a $6 million shortfall.

Cernic blamed commissioners for a bad budget, saying commissioners used poor planning, had unrealistic expectations and passed a budget they knew would fail.

“The budget didn’t work. The numbers were not good. It will not get us through,” he said he told commissioners last year.

Cernic said he’s still $700,000 short for next week’s $1.2 million payroll. He added that as of Thursday morning, the county had borrowed an additional $2.6 million from county agency funds and had withheld an additional $300,000 in vendor payments.

Some agencies have gone 30 to 45 days without payments, and all are dealing with less-than-full funding “across the board,” he said.

When asked about the budget, President Commissioner Douglas Lengenfelder was quick to pin some blame back on Cernic.

He acknowledged the county’s cash-flow problem – not receiving revenues as quickly as it has to make payments to agencies and for payroll – but said Cernic defied commissioners by making a $1 million payment for this month after they asked him to withhold it.

That $1 million is paid monthly into a self-insured county health care fund used to cover employees’ benefits and pay claims.

Lengenfelder said health care committee members agreed to forego October’s payment.

“Although there is an understanding” that payments will be made, Lengenfelder said, “There is no contract to pay that amount” and committee members knew payroll was the priority.

Human Resources Director Bryan Beppler said the fund balance now is $2.5 million.

Assuming yearlong trends continue, there should be enough for the committee to go without payment even until next year, he said, and not hurt employees’ coverage. But it’s hard to make such an assumption.

If an unexpected payment needs to be made or costs meet or exceed the $1 million monthly average, the fund could dip to $500,000 or lower by January, he said, and leave the committee without enough money.

This isn’t the first time the county has delayed a payment to the fund. Beppler said the January 2013 payment “wasn’t made until March.”

Cernic said no one knows what health care costs will be, and rather than building on that reserve, which he said would translate to savings next year, commissioners are using the money to “subsidize misspending,” a jab at the 4.75-percent across-the-board budget cuts for all county agencies set into the 2013 budget, an impossible mark to hit for many, Cernic said.

He also said he was unaware the committee was willing to wait for the money because no one ever told him and further blamed commissioners for keeping him out of the loop on budget talks.

He added that commissioners agreed to the $1 million monthly payment when they budgeted for it and could have withheld money from other areas, like the recently formed economic development authority or payments for consultants. Withholding payments to this fund hurts employees, he said.

He also said if commissioners see fit to withhold fund money, employees should no longer have 15 percent of their paychecks withheld to pay for health care costs, a claim Lengenfelder called disingenuous.

Employees are under a contract to contribute to the health care costs, Lengenfelder said, but the county is not under contract to make the monthly fund payments.

Commissioner Mark Wissinger said money problems have come early, but official budget talks aren’t set to formally begin until next month and that they weren’t excluding Cernic.

Chief Clerk Steve Ettien is the only one working on the budget right now, Wissinger said. County solicitor Tom Leiden added that commissioners weren’t even in those meetings.

Cernic said he’s been working with Ettien, but then said commissioners have been holding meetings with banks and trying to obtain more money without consulting him.

Lengenfelder said commissioners had asked bank representatives to contact Cernic separately after their talks.

“It’s a timing issue,” he said.

Lengenfelder also noted that the November health care fund payment would not be made, something Cernic agreed to.

“It is what it is,” Lengenfelder said.

Mirror Staff Writer Kelly Cernetich is at 946-7520.