Westmoreland furloughs begin as commissioners prep plan to borrow money

Westmoreland County won’t have enough cash on hand to meet payroll and other operating expenses in about a month, officials said Tuesday.

Commissioners said plans are being finalized for the county to borrow funds to keep essential public services in operation amid the ongoing state budget impasse that required Westmoreland to limit services and furlough 125 employees.

About 7% of the county’s workforce of 1,750 were furloughed this week as part of cost-saving efforts. Commissioners said the layoffs were expected to last at least a month but could be longer without an infusion of cash.

“This is a very fluid situation and we’re playing it by ear,” said Commissioner Sean Kertes.

The county spends about $12 million a month on payroll and other operational expenses and has about $14.5 million remaining in cash reserves. It will exhaust most of those funds by mid-November, said Finance Director Meghan McCandless.

Since expiration of the state budget on June 30, the county has missed out on about $35.5 million in funding. To cover those loses, commissioners authorized reallocating about $25 million in general operational funds and used investment funds to pay the bills over the last three months.

That money will be exhausted within weeks, McCandless said.

Commissioners directed the county finance office to prepare an application with the state treasurer, which approved a program to loan counties money to help keep courthouses offices and services open as the budget stalemate in Harrisburg continues.

McCandless said the county may qualify for a state bridge loan of just $6 million at an interest rate of 4.5%. State Republican lawmakers have pitched a plan to waive interest payments on money borrowed from the treasury, but its outlook remains uncertain.

Local banks have been surveyed for larger amounts of borrowing, up to about $15 to $20 million, and could come with lower interest rates but additional processing fees.

“My preference is getting the best value for our taxpayers. I don’t think anything is complete yet, but soon enough it will be. We owe it to taxpayers to make sure we get the lowest interest rate,” said Commissioner Ted Kopas.

The commissioners next regularly scheduled meeting is Oct. 30.

Officials said commissioners are expected to convene a special meeting before the end of the month to approve any borrowing plan.

The proposed loan won’t mean a quick return for furloughed employees. Money borrowed from the state is unlikely to arrive before Nov. 1, McCandless said. A private bank loan would take longer to complete, she said.

The county operates with a $452 million annual budget.

Controller Jeffrey Balzer said that since July the county has forfeited more than $494,000 in interest payments from investments because of the budget impasse. On Tuesday, Balzer sent the state budget office an invoice for those lost funds.

“This diversion of county resources has resulted in measurable financial damages in the form of lost interest earnings,” Balzer said.

Furloughs could linger

Commissioners said furloughs could linger further into the fall and beyond without resolution to the state budget impasse or an infusion of cash.

“We want to bring everyone back,” Kertes said.

The temporary job cuts were mostly behind the scenes at the courthouse.

The furlough of the county’s deputy clerk meant visitors to the commissioners’ office were required to ring a bell at the front desk to alert remaining staff. The courthouse law library will be closed until next week, when its lone remaining employee returns from vacation.

Human Services Director Rob Hamilton said child welfare, behavioral health and aging services continue to operate.

“We’re making do,” Hamilton said.

Meanwhile, the county parks remain open, but with a reduced number of employees available to maintain facilities.

Public Works Director Dante DeCario said park visitors won’t immediately see much of an impact and for now bathrooms, picnic pavilions and other park amenities are available.

He said clearing the county’s 52 miles of roads and bridges could be a challenge should the weather turn unseasonably cold this autumn. Half of the county’s eight person road crew were furloughed, a plan designed to account for the season’s forecast.

“If this was November through February this would be a different story,” DeCario said.