Debt refinancing deal could save Cambria County $3 million

Cambria County officials expect to save more than $3 million over the next 15 years through a $49 million debt refinancing deal of bonds, passed Thursday at a special commissioners meeting.

President Commissioner Douglas Lengenfelder was absent from the meeting due to a medical emergency, but said the 2.93-percent fixed-interest deal is unheard of elsewhere.

“I would really challenge anybody to try and come up with a finer rate than we got,” he said.

The deal for the lion’s share of the county’s $55 million debt is being done through M&T Securities, a part of M&T Bank.

Lengenfelder said the bond sale was possible thanks to an upgraded bond rating, to a stable BBB from BBB- through Standard & Poor’s, which had considered Cambria County at the “lowest investment grade” beforehand.

Lengenfelder said officials estimated that the county’s rating actually would have been worse than BBB- when he first took office, if the county had attempted to update its rating then.

County Controller Ed Cernic Jr., who is often at odds with the commissioners – and Lengenfelder in particular – over county finances, said the deal is a good one, but could have been better.

“It’s something that needed done. … We could have saved a little more money, I believe. But it needed done and it got done, and that’s a good thing.”

Cernic said a better plan would have encompassed all of the county’s debt and more directly addressed cash-flow problems.

There will be end-of-year relief, he said, but he expects the county to end up borrowing more next year in its tax-anticipation loan, which provides cash in hand at the beginning of the year before tax payments begin rolling in.

“It seems like everything is last minute all the time,” he said.

Lengenfelder said many deals have to happen quickly because few people have a hold on the county’s finances.

“Last year, we got surprised by a $2 million deficit. Why did we get surprised?” he asked.

Lengenfelder said antiquated accounting software costs the county tens of thousands of dollars a year to maintain when there are better options out there that could present the data in a more user-friendly way, and allow managers to easily compare previous fiscal years.

Cernic brushed off the issue, saying that if Lengenfelder, a retired Air Force colonel, was able to “fly F-15 planes, but he can’t look at a computer, maybe he should go find another job.”

“I’m tired of hearing (about the software),” Cernic said. “It works for everyone, all departments … and we have a lot of investment in it.”

Lengenfelder said the new software would be additional savings to help manage money and work on investments such as keeping the county’s retirement fund at 93 percent – one of the commissioners’ most-touted achievements – while working to reduce debt.

Cernic’s plans for refinancing, by contrast, would have provided extra cash now, but added millions in debt in the long run, he said.

“You don’t solve these problems by throwing them on the shoulders of your children,” Lengenfelder said.

Mirror Staff Writer Kelly Cernetich is at 946-7520.