Luzerne County officials are scrambling to find $1.4 million to pay this month's bills and solve a cash-flow crisis.
County council was planning to vote to transfer $1.4 million from 911 emergency funds to the general fund. But council Chairman Tim McGinley said Monday he will remove the transfer resolution from tonight's agenda because of research from Controller Walter L. Griffith Jr. shows it would be illegal.
"Well, I don't know what our options are at this point," Mr. McGinley said.
Despite the cash-flow crisis that could prevent the county from paying bills and employees with revenue from this year's budget, council tonight plans to adopt a 2013 budget that would maintain the current property tax rate and allocate $260 million in expenditures.
On Friday, county Manager Robert Lawton recommended solving the cash-flow crisis by transferring the 911 funds obtained from phone fees. According to this proposal, $1.4 million in transferred 911 funds would be returned to appropriate fund accounts by Jan. 4 with "interest accrued at a rate of 0.15 percent."
The Pennsylvania Emergency Management Agency initially approved this transfer last week because a PEMA official erroneously believed the county wanted to spend the transferred money on upcoming 911 emergency expenses, Mr. Griffith explained.
"Nobody called me to thank me for the research," Mr. Griffith said.
The county wanted to transfer the 911 funds to help pay for general-fund expenses, including paychecks for the final two pay periods of year and debt obligations. The alternative to the $1.4 million transfer of 911 funds is "to solicit proposals to borrow funds to cover the shortfall," Mr. Lawton said in a council agenda submittal.
"I believe that borrowing money should be the last resort," Councilman Rick Morelli said. "This is what the county has done in the past, which has dug us into the hole we are now in. We cannot keep borrowing money to pay the bills. ⦠I don't feel that we made enough tough decisions which are needed to dig us out of the hole."
Mr. Griffith said county officials should "stop spending money." About $5.9 million is currently in the county general fund, according to the county treasurer's office.
A source of the cash-flow crisis involves delays in getting reimbursement funds from the state to cover expenses from the county Children and Youth Services agency, officials have said. The state owes the county more than $6 million for Children and Youth expenses.
At last week's council meeting, officials discussed borrowing state funds advanced for Mental Health and Aging agency expenses. But the state would not approve that type of transfer, officials noted.
Some counties still approve that type of transfer to deal with delays in getting state reimbursements of Children and Youth expenses, said state Rep. Phyllis Mundy, D-120, Kingston, who was at last week's council meeting. It's done with a "don't ask, don't tell" approach, Ms. Mundy said.
Contact the writer: mbuffer@citizensvoice.com