York County gets extension to repay loan

Greg Gross

York County now has until the end of March to pay off the multi-million dollar loan it took out to cover expenses during the state budget impasse.

Under state law, the county must repay the $20 million line of credit by the end of this year even if the impasse persists. Only a judge can grant an extension.

York County Court of Common Pleas JudgeStephen P. Linebaugh did just that when he ruled  that the debt is unfunded, granting the extension that gives the county until March 31 to pay off the loan.

The county is expected to fully draw down the full $20 million line of credit by the end of the year, said Mark Derr, the county administrator.

That line of credit is being used to make payroll, cover other costs and to pay some vendors for services provided from July through October.

"At this point we are unable to make any other additional payments until a state budget is passed," Derr told the judge.

The loan: Commissioners in November approved opening a $20 million line of credit through Fulton Bank at 1 percent fixed interest that the county is dipping into as needed to keep afloat through the end of the year. In addition to the interest, the county expects to be hit with $10,000 in bank and attorney fees.

A the time, Derr said he believed lawmakers would have agreed to a budget by the end of the year. That hasn't been the case.

The loan will be repaid in full when Democratic Gov. Tom Wolf signs a budget.

The county relies on about $87 million, or $7 or $8 million monthly, in state and federal funding for mandated services, such as human services, Derr said.

When the impasse started more than five months ago, the county tapped into its general fund and reserves to cover the lack of funding but those accounts nearly dry, he told the judge.

"Currently, the county has expended all financial resources," he told the judge.

Housekeeping: As a matter of housekeeping, Linebaugh addressed any perceived conflicts of interest of a York County judge taking on a York County hearing.

"The Court of Common Pleas is not part of county government," he said, adding he and all county judges, are paid by the state. "We are part of the statewide judicial system."

— Reach Greg Gross at ggross@yorkdispatch.com.