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Intermediate Unit says $7 million in borrowing covers operations only through January; warns of possible layoffs

Southmoreland School District Board of School Directors · November 18, 2025
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Summary

A WIU representative told the Southmoreland board the Intermediate Unit borrowed $5 million and later an additional $2 million to bridge budget delays and could sustain operations only into January 2026; the IU outlined potential layoffs and suspended programs if funds are not released.

A representative delivering the Intermediate Unit (WIU) report told the Southmoreland School District board on Nov. 18 that the IU borrowed $5,000,000 in an anticipation loan and later secured an additional $2,000,000 to cover cash-flow problems tied to delayed state and federal budgets. The speaker said those borrowed funds will sustain operations only into January 2026 unless subsidy payments arrive sooner.

The WIU representative described a range of contingency measures and staffing impacts under consideration: a potential plan to lay off 17 professional staff, 4 support staff, 5 classroom assistants, and several at‑will and Act 93 employees, plus temporary suspension of some programs. The report said the IU must also repay about $7,000,000 in borrowing and pay associated fees regardless of whether all funds are ultimately used.

Business Manager Pam Mondock told the board that the district had begun receiving state funding in piecemeal deposits after the state budget passed and that the IU could take up to six weeks to be fully made whole once funds are released. "We have started to receive some state funding as of today," Pam Mondock said.

Board members discussed the district's designation of a new WIU representative and whether to seek legal action if the IU does not seat the appointee. One board member said the board may file an injunction to compel recognition if necessary. The IU report also noted leadership planned special meetings to monitor finances closer and to notify potentially affected programs and staff.

The IU report put the immediate risk window through winter months; the board did not take formal action on the WIU borrowing at this meeting but recorded the financial risk and follow-up plans.