Despite proposed state budget, York County will dip into $20M credit
York County will still have to dip into its multi-million dollar credit line, even if Republican lawmakers and Democratic Gov. Tom Wolf reach a budget deal by Thanksgiving.
Commissioners last month approved opening a $20 million line of credit through Fulton Bank that the county plans to dip into as needed to keep afloat through the end of the year.
"We're trying to determine if we can hold out long enough until that (state) money is released," said Mark Derr, the county administrator.
The county relies on about $71 million, or $6 million monthly, in Harrisburg-issued funding for state-mandated services, such as human services. When the impasse started more than four months ago, the county tapped into its general fund and reserves to cover the lack of state funding.
Delay: But it doesn't seem likely the county can stretch the cash it has on hand until state money comes to York in late December.
It typically takes about four weeks before funding from Harrisburg trickles down Interstate 83 to York. At that speed, the county would expect to see state funding coming in a few days before Christmas.
That's a little more than a week before the county projects it will run out of cash.
"I guess the good news is it ends there and we won't have to incur that extra interest," said Commissioner Chris Reilly.
As of Tuesday, the county has withdrawn $50,000 from its credit line to meet IRS regulations that say some money must be withdrawn after a credit account is opened, Derr said.
That money was used to pay loan fees, such as about $10,000 in bank and attorney fees.
Expense: It remains unclear what the final cost of the loan will be since the county will be charged interest only when it draws on the credit line. For example, if the county withdraws $100,000 Wednesday, it would start paying interest on that amount starting that day.
"We really won't know how much interest (the county will charged) until we start drawing down," Derr said.
The county won't be reimbursed by the state for the interest, leaving local taxpayers to pick up the tab. The borrowed money, under state law, would have to be paid back by the end of the year.
With a budget deal likely imminent, commissioners are considering using the credit line to pay vendors that provide services to the county and have not been paid since early July, according to Reilly and Doug Hoke, the vice president commissioner.
Payout: When the impasse started after Wolf vetoed the GOP-crafted budget on June 30, the county stopped payments to agencies that provide services to its Human Services Department. Some vendors, as well as numerous nonprofit agencies, have had to turn to creditors as a result of the impasse.
"They've been doing a lot of work to keep their lights on," Hoke said.
As a budget deal is being worked out in Harrisburg, county officials are crafting their own budget for the coming year.
Despite not knowing the state allocation for 2016, Derr said, officials have been creating the county budget based on what it has received in the past.
Commissioners are expected to vote on a preliminary budget on Nov. 25.
President Commissioner Steve Chronister couldn't be reached for comment.
— Reach Greg Gross at email@example.com.