Luzerne County spent $7.4 million more than it brought in during 2012 — the first year of the new home rule government, a newly released draft audit says.
A deficit had been predicted by many but could not be verified until auditor ParenteBeard LLC tallied all expenses and receipts tied to 2012.
The audit was supposed to be completed June 30, 2013, according to the home rule charter. The county administration said the delay stemmed largely from the audit’s expanded scope and the auditor’s continued requests for additional information.
Council Chairman Rick Morelli said the dollar amount is “obviously eye opening” but should be evaluated in context.
The initial County Council seated in January 2012 immediately was under the gun to implement a myriad of new home rule government requirements while amending the 2012 budget inherited from prior commissioners before the Feb. 15 deadline, he said.
County Manager Robert Lawton started work the end of February and had to get acclimated, Morelli said.
“There was a lot of transitioning in 2012. It was the first year when we were still putting everything together and finding our way,” Morelli said.
Continued staff cuts and other spending reductions since 2012 should leave the county on more solid financial footing, he said.
“I’d be more curious to see where we are the following year. I’d be very surprised if we see the same thing happening in 2013 and 2014,” Morelli said.
Lawton, who could not be reached for comment Monday, had publicly pointed to some “land mines” in the 2012 budget.
For example, around 60 layoffs incorporated in the 2012 budget took longer to implement than expected, and the spending plan allocated $170,000 for a day reporting center for offenders that costs around $1 million annually.
In May 2012, Lawton told council spending cuts would be necessary to end the year without a deficit. Eighteen prison correctional officer positions were eliminated that October to help close a year-end budget gap, estimated at $875,000 at that time.
But Lawton’s critics, including former county Controller Walter Griffith, have asserted the manager did not do enough in 2012 to forestall the acknowledged deficit.
Morelli said that’s not a complaint anymore because many are criticizing layoff-related service cuts and the recent departure of several workers who haven’t received raises in years.
“A lot of people in the county are saying it’s not as good as it used to be. I equate the situation to telling your kids they can’t be putting things on the credit card anymore. We have to live within our means,” Morelli said.
He said he has heard cries for more supplies, raises and workers.
“The whole purpose of the new government was to reel ourselves in and spend only what we bring in, and there’s no question Bob is looking to do that without hurting services,” Morelli said. “It’s painful, but nobody said it was going to be easy.”
Councilman Tim McGinley said his main concern is whether all budgeted revenue will materialize this year due to staff and service cuts.
“To me, that’s a critical element of the budget,” McGinley said.
Councilman Jim Bobeck said the audit contained sobering news but is appreciated as a starting point. The 70-page report is more detailed than past county audits, he said.
“At the very least, we have a comprehensive audit from which to build. It took a while, but proper building requires a stable foundation, which is worth doing tediously and right. From our last form of government, the consequences of unstable foundations are still all too obvious,” Bobeck said in an email about the draft audit release.
The overspending means the county’s 2012 books closed with a $3.7 million deficit because the prior year ended with a $3.7 million fund balance, the audit said. Bobeck questions the accuracy of the 2011 surplus figure.
Representatives of ParenteBeard are scheduled to present an overview of the audit at tonight’s council budget/finance committee meeting, which is among several committee sessions starting at 5:30 p.m. today in the council meeting room at the courthouse.