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Commissioners borrow more money to help pay this year's bills
By Maria Miller
CAMBRIA COUNTY, Pa. -- Cambria County President Commissioner Douglas Lengenfelder acknowledged the county's cash flow problem after a unanimous vote to tack on another $5 million to the county's growing debt during Thursday's meeting. The commissioners said they borrowed the money to help pay nearly $8 million in bills owed by the end of the year. But the county controller argued it's money that's only going to cost the taxpayers more over time.
"We probably could have squeezed through this year on what we've got," said Douglas Lengenfelder, Cambria County President Commissioner. "Would it have been tight? It would have been unbelievably tight and not the way you really want to run government."
With only about $3 million in cash left this year and about $8 million in bills, another $2.4 million needed for payroll, the commissioners voted unanimously Thursday to refinance one of it's current loans and take out an extra $5 million to get them through the year.
"Once taxes start coming in, you pay that off and then you continue to meet the rest of the year's needs with the taxes that you take in," said Lengenfelder.
It's called a tax anticipation note and it's nothing new to Cambria County. Every year the county borrows $10 million to get through until taxes start coming in in March. Lengenfelder said this $5 million will be half of next year's note, just a couple months early.
"I don't know what you're doing if you're not kicking the can down the road when you're terming out a loan that was supposed to be paid back within the fiscal year that you borrowed it in," said County Controller Ed Cernic.
The often outspoken Cernic doesn't agree with the move and said he was never included in the discussion.
"The interest rate on our tax anticipation note for this year, which was short term, is about 1.5 percent," said Cernic. "The new interest rate on the $5 million loan is over 4 percent. So I don't know where the savings is."
Lengenfelder argued borrowing less money now will not only help to pay it off earlier and with less interest, but will help pay the bills and save taxpayer money.
"This isn't an issue of just dollars. We're talking people. We're talking businesses," said Lengenfelder. "We're talking the citizens of Cambria County and how best to serve them."
The county's 2014 budget proposal is expected to be introduced at the commissioners' next scheduled meeting on Dec. 19.