CLARION, Pa. (EYT) — Clarion County Commissioner Ted Tharan opened Tuesday’s work session with a history lesson on purchases over the years that raised the debt level. He also offered a look into the near future that promises a tax decrease and a good chance the county could reduce or eliminate the current debt service in 2022.
“We haven’t borrowed any money,” said Tharan, “We’ve paid down the inherited debt and have our capital projects moving forward, finishing the other capital projects.
“We need to figure out how much we can reasonably pay on the principal.”
Tharan noted that all the expenditures were authorized by earlier sets of commissioners. Wayne Brosius arrived in 2012 and Tharan and Ed Heasley four years later.
“As you can see, everything happened before anybody in this room. So, let’s go from when Wayne arrived in 2012, and next year they had to add to the allocation for debt service because what they were collecting in debt service was not making the debt payment.”
History of Debt
Tharan thanked fellow commissioners, Budget Director Rose Logue, County Administrator Jillian Stephens, and Deputy Chief Clerk Mindy Frampton for reconstructing the history of county debt.
• In 1993, they purchased a property and built a new prison. The cost of the property was $155,000.00 and the cost to build the new jail was $3,044,823.00. They borrowed $2,510,000.00 and had a grant of $818,000.00.
• From 2001 to 2003, they purchased the old hospital for $880,000.00 on July 1, 2002. They then had a contract with Fred Burns to build the piece on the front of the Human Services building (on Seventh Avenue) at a cost of approximately $1,356,879.00. There was an additional loan of $2.5 million taken by the county which made the debt service now, $7,318,000.00.
• In 2011, they purchased this building on Main Street for $1,000,090.00. They then borrowed $7.3 million, which they probably did as a combination of smaller loans.
“Back in the day when they bought this building (330 Main Street), they had $7 million in debt, which also would have been from the jail and from the Human Services building. That was the last money borrowed,” explained Tharan.
According to Tharan, in 2016, the current commissioners refinanced the debt and dropped the interest rate to 2.65 percent.
As of now, the current balance on that loan is $3,629,544.60.
• We made our standard payments when we refinanced in 2016, the monthly payment is $38,800.92 and annual payments of $465,611.04. That goes from April 15, 2016, to December 31, 2030.
• The interest that we will pay from September 1, 2021, to the end of the agreement, if we stayed on the present course of monthly payments, would be $1,203,701.00. You can see that it is prudent to try to get rid of that debt.
• In 1980, there were 11 mills of tax. Every two or three years, commissioners raised the taxes, going from 11 mills to 15 mills to 17.5 to 21, 25 up to 29, down to 27, and up to 32 over a period of 17 years, In January of 1998, commissioners changed the predetermined ratio on assessment up to 75% from 33%, which would drop the millage.
• Then they started their climb again — 18.5 23, 25 — and then in 2009, we went from 75 percent of a millage ratio of 100 percent.
“In 2008, they were at 25 mills, and when they readjusted it up to a hundred percent, the millage was dropped down to 20 mills in January 2012.
“When we refinanced in 2016, we thought it was in the county’s best interest to set any extra money aside in a separate account. Anything above our annual payment, we would put aside into a separate account that could be only used to pay on the principal.
“So, that’s why we decided to set it aside, so we can make the lump sum payments on principal and no new debt.”
Pay-As-You-Go
In 2016, Commissioners started a pay-as-you-go policy: not borrowing money and only do what you can afford to do.
Clarion County was able to complete many projects under the pay-as-you-go policy. A list of the projects and the years follow below:
• Year 2016: Human Services building Internet fiber, Probation Building purchase, and renovation, safety improvements in the district justice offices. Total cost $416,598.00.
• Year 2017: probation building improvements: $158,545.00.
• Year 2018: backup system and server, ADA construction at Clarion County Park, county jail fire alarm, Saint Petersburg Tower power, probation building improvement, and courthouse windows and renovations: $559,268.00.
• Year 2019: Memorial Park, courthouse windows, maintenance building, purchase of district attorney’s office, jail AC units, and new Human Services building boilers: $443,040.00.
• Year 2020: County Jail, Human Services building HVAC units, flooring, etc. Clarion County Park. $204,704.00.
Where did the money come from?
Asked how Clarion County could pay for projects on the pay-as-you-go list, Logue was quick with an answer.
“Management,” said Logue. “There’s no other answer. We are financially responsible and just watching the dollars and cents.”
Tharan agreed and said even employees are coming up with ways to save money.
“We’re not wasting money,” said Tharan. “I can’t name one big change, but everything adds up. Employees come to us with ways of saving money and ask if we really need something. Even $500.00 a month means something when you add it all up.
“We have department heads coming and saying: ‘We don’t need this. We don’t need that.’ The people are watching what they’re spending.”
Another plus is the aggressive pursuit of grants.
“The FEMA grant came out for the first COVID. We got 75 percent back from the federal government and a lot of people said it was too much work. It may have been, we just — we just go for it. And then vaccination. Anytime we can tap into grants, we go for them,” added Logue.
Heavy use of the COSTARS program also helped the county save money.
“We went through COSTARS for electric and saved a boatload of money,” said Tharan. “We got involved heavily in 2016 and started purchasing.
“All kinds of stuff, but it’s not one thing. It’s just a boatload of things that you save 50 cents here, save $5.00 there, and save a thousand here. The most important thing is: You’ve got employees coming now and saying, we don’t need this. Let’s cut this. I can save you this much money.
“It’s real money. Once everybody gets into that, then they start looking for it. And, we just needed to bring to light the fact that you need to look at these expenses to see if we need them.
“You need to look at the county government the same way you look at your home budget. Do I need that? Can I afford debts? Can I find one for less money? You spend this money like you spend your own money.”
