Repaying loan early to save Cambria $100K
JOHNSTOWN — Cambria County officials are able to quickly pay off a debt, which should save $100,000 in interest fees, they announced at a Thursday meeting inside the Cambria County Library.
That debt is in the form of a tax anticipation loan, county Controller Ed Cernic said.
A tax anticipation loan is given to government organizations to provide revenue until tax notices are sent out in March, Commissioner Mark Wissinger said.
It is common for Cambria and other counties to take out the one-year loans, which must be repaid by the end of the year, he said.
“I can remember many years when we paid it Dec. 31. … Then we would take out a tax anticipation loan Jan. 1 of the next year,” Wissinger said.
This year, that is not the case, Cernic said. By May 30, the county’s tax anticipation loan — in the amount of $10 million — will be paid off, he said.
“That is the first time in my … 14 years that Cambria County has ever been able to do that early,” he said.
The early payment will eliminate about $100,000 in interest fees, Cernic said.
The savings, Cernic said, will help with filling a $8.6 million deficit, which was created before current commissioners took office.
Cernic also noted other debt elimination methods in play at the county level, which should work to reduce that deficit in the coming months.
“We’ve made progress,” he said. “We have a little ways to go yet.”
Progress of that work will be evident when results of an upcoming county audit are revealed later this year, he said.
“At that time, the public of Cambria County will see the results of your efforts,” Cernic said to commissioners. “It’s very, very positive.”
Commissioners applauded debt reduction efforts.
“The good news story is we are being very transparent and realistic with the numbers,” President Commissioner Tom Chernisky said. “When you do that, that’s how you move forward.”
“This definitely is a step forward, a step where you’re saving money,” he said.
Mirror Staff Writer Sean Sauro is at 946-7535.