PFM presents strategic financial plan to Lackawanna County to address cash crisis and structural deficits

Gordon Mann, a consultant with Public Financial Management (PFM), told Lackawanna County commissioners that the firm’s first‑phase report finds an immediate cash‑flow crisis and longer‑running structural budget gaps that will take several years to fix. "This is the end of the beginning," Mann said, summarizing PFM’s work with the county and the state Department of Community and Economic Development.

PFM’s presentation said the county’s general fund had about $6.1 million on hand during the cash crisis and that the county carried roughly $18.5 million in bills from 2023 into 2024. Mann described three tiers of fiscal stability the plan addresses: cash stability (enough money on hand to pay bills), budgetary stability (year‑to‑year balance of revenues and expenditures), and structural stability (recurring revenues that match recurring expenditures).

The consultants urged immediate and ongoing cash‑management practices, including monthly cash projections and a multiyear baseline financial projection. They also recommended strengthening internal controls such as regular bank‑statement reconciliations and consistent operating transfer procedures, and adding a senior revenue/finance position to spread workload in the finance office.

On workforce costs, PFM identified employee salaries, health insurance and pensions as the primary cost drivers and recommended a two‑pronged approach: negotiate compensation and benefit changes through collective bargaining where necessary, and improve position control and transparency in the budget (for example, listing positions and salaries in departmental budgets rather than a single line item). Mann noted the county has already used a wage freeze for non‑represented employees and that bargaining unit contracts open in stages through 2027, which provides a multiyear pathway to restrain compensation growth.

PFM emphasized pension funding as an area where the county will need to increase contributions over time. The consultants explained that while Pennsylvania cities can face Act 47 oversight for failing to meet actuarial pension contributions, counties do not trigger the same statutory enforcement, so the county must take a multiyear approach to stop pension liabilities from growing.

The criminal‑justice system was highlighted as a major cost center. PFM reported the Lackawanna County Prison’s gross cost was about $32.5 million (analysis through mid‑2023), with a net cost to the county of roughly $25 million. The firm estimated the average net cost per person incarcerated at about $34,000 a year, versus about $1,300 a year for someone on adult probation and about $2,500 for intermediate community‑based programs. Mann told commissioners that reducing the in‑custody population enough to close a housing wing would create significant savings but acknowledged the policy and public‑safety tradeoffs involved.

Specific operational suggestions in the criminal‑justice chapter included exploring schedule changes and expanded use of part‑time staff to reduce overtime in the sheriff’s office and corrections; examining hiring and pay parity in the district attorney’s office to retain assistant district attorneys; and improving coordination among courts and diversion programs to better use alternatives to incarceration.

PFM presented a short list of priority actions for the coming months—focused first on cash management, then on bargaining and position control, and on criminal‑justice coordination—and described this session as the end of the first phase of the consultant engagement. Jonas Kras, a representative from the state Department of Community and Economic Development, attended and was acknowledged for departmental support.

Commissioner Chermack and other commissioners expressed appreciation for the report and said the county has already begun implementing some recommendations. An unnamed commissioner who spoke near the close of the meeting said the county had completed or started about 20 of the report’s 47 recommendations and reiterated a commitment to provide periodic updates to the public. The meeting concluded with the presentation team noting that the next phase will move from analysis to implementation and that some actions will require time, negotiation and potential grant support.