Commissioners approve plan to fund Centre County through February

As Pennsylvania heads into the Christmas holidays and day 175 without a budget, County Commissioners took steps to fund the county through a state tax and revenue anticipation note.

Commissioners approved the TRAN Tuesday for a maximum principal amount not to exceed $10 million. The amount was based on anticipated 2016 revenues and expenditures, Financial Management Director Denise Elbell said, and represents a “worst-case scenario” for the county.

The $10 million will fund the county through January and February, Elbell said, adding that a second TRAN could be taken out if there was still no state budget by that time. The county is anticipating about $18 million in revenue in April.

Three banks were considered for the TRAN, she said — Jersey Shore State Bank, M&T Bank and First National Bank. The county decided to go with Jersey Shore, she said, who offered the best rate at 0.86 percent.

County reserves are expected to run out by the end of the month, she said. With the approval of the TRAN, the finance department can ensure the funds are available to the county on Jan. 6.

“I hope this situation is resolved by then,” Vice Chairman Chris Exarchos said, “but you have to plan for the worse case. This is sort of new territory. I can’t ever remember a budget going on this late.”

Commissioner Michael Pipe said he had faith that state legislators will have a budget by the end of February. If not, the new Board of Commissioners could have a discussion on taking out a second note or possibly curtailing services.

While the issue of cutting services has remained off the table till now, Pipe said the county has been fortunate enough to have reserves that have brought it this far.

“If you look at the other 66 counties in the state, some have laid off staff and stopped paying their providers,” he said. “If we’re at the point of talking about a second TRAN, I think it’s reasonable to have that conversation.”

Chairman Steve Dershem said the TRAN must be paid off before the end of 2016. While the county can hold until April and draw off of the $18 million in revenue, which would set up the county until September, it doesn’t solve the bigger problem of having to pay back the note with money they don’t know if they’re going to have.

“There is no good scenario here to adjust how we are going to continue without state funding,” Dershem said. “I hope that we get back to some level of normalcy in our budgeting cycle, because it’s not fair to anybody.”

Dershem assured that the county budget would be approved on Dec. 29.

The new Board of Commissioners, which comes in on Jan. 4, can reopen the budget and has 45 days to make adjustments, Exarchos said. If something changes regarding the state budget before or during that time, the new board can make changes.

Hopefully, as the budget stands, he said, the county will get what it was allotted last year. If not, the county will have to do something to fill the hole in funding — possibly by cutting services, increasing taxes or diverting revenue from one area to another.

This story was originally published December 22, 2015 at 6:43 PM with the headline "Commissioners approve plan to fund Centre County through February."