The York County Library System owes more than $130,000 in unpaid unemployment compensation contributions, interest and penalties.
That's according to a lien filed Aug. 18 with the county prothonotary's office by the state Department of Labor & Industry's Office of Unemployment Compensation Tax Services.
The lien states that, as an employer, the library system's unpaid contributions date from the first quarter of 2011 to the fourth quarter of 2013.
Counting $26,363.81 in interest as of Aug. 8 and a $250 penalty, the system owes a total of $131,458.59, according to the lien. The system has made two payments of $27,861.82 and $5,909.45, the lien says.
Rate change: The Department of Labor & Industry annually sends the library system an unemployment contribution rate notice, said Susan Davidson-Linton, director of finance and advancement for the system.
"So each year, we pay on that notice," she said.
But at the start of the year, the department sent several amended notices for prior years, Davidson-Linton said.
"We didn't become aware of anything until this year that they needed to change our rate," she said.
'Perfect storm': In 2005, the library system and Martin Library created the now-dormant Library Company of York as an employer-based payroll company, Davidson-Linton said.
The company paid employees and filed payroll taxes, but in 2009 had to let go of 20 to 25 employees as grant funding ran out, she said.
"There's always some degree of either turnover or some loss of employees, and they'll file for unemployment compensation," Davidson-Linton said.
Since they were Library Company employees, though, the department couldn't adjust any rates because the company was no longer active, she said.
It was the "wrong timing of ingredients," Davidson-Linton said.
"It's kind of like the perfect storm," she said.
What's next?: But now the state is catching up, and "we're catching up for that adjustment, as well," Davidson-Linton said, adding that the system is on a monthly payment plan to pay the full amount owed by May 2015.
The lien will not be removed by the state until the system pays the full amount, she said, but the system has received clearance to do business with the state and receive funding for special grant projects.
The Department of Labor & Industry maintains it sent the library system automated revised rate notices when it went through the merger with Martin Library, said press secretary Sara Goulet.
She couldn't comment much further because of confidentiality reasons but said that the department is open to working with the library, given the situation.
"We have reached out again to talk with them in more detail," Goulet said.