County Takes Major Step Towards Solvency

Lackawanna County taking steps for financial plan | Watch (msn.com) 

The Lackawanna County Commissioners took a major step today towards resolving the county’s near-term financial crisis and ensuring its long-term solvency.

Commissioners Bill Gaughan, Matt McGloin and Chris Chermak voted unanimously to name PFM Group Consulting, Philadelphia, as the consultant for multi-faceted financial planning and management under the state government’s Strategic Management Plan program, known as STAMP. The contract cost is $276,800, $100,000 of which will be funded through a grant from the Pennsylvania Department of Economic and Community Development.

McGloin and Gaughan decided to apply for inclusion in the state program soon after taking office Jan. 2. They inherited $19 million in unpaid bills and a $15 million systemic deficit that continues to grow each year.

The consultant will work along multiple tracks to improve the county’s position. It will develop an emergency financial management plan for the remainder of this year, a five-year strategic budgeting plan, and a management audit of all departments to determine whether the county most efficiently uses its resources and to recommend how it might do so. That will include operational assessments of all county departments.

Gaughan noted that this is the first time in decades that the county has taken a systemic, strategic, long-term approach to financial management.

“Each year the county tried to get by robbing Peter to pay Paul, without actually addressing any of the real problems,” he said at Wednesday’s commissioners meeting, where the consultancy was approved. The consultant will analyze “the county’s existing managerial, administrative, financial, and operational capacities. This would be like opening the hood of your car and taking a really good look at how the engine is running, not just continually adding more oil but fixing the oil leak.”

Another unit of PFM already consults the county on correcting its short-term financial issues, so the consultant is intimately familiar with the county operation, and it has a substantial track record of helping other counties with financial management.

An in-house review committee, including county Chief Financial Officer David Bulzoni, unanimously recommended PFM from a group of five consultants who responded to the county’s request for proposals, and the state Department of Economic and Community Development also approved the choice.

Legislative Cover Sheet