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Intermediate Unit says loaned funds will run short; district hears potential layoffs
Summary
The Intermediate Unit told the Southmoreland board it borrowed $7 million during the state budget impasse and expects the funds to sustain operations only into January 2026, raising the prospect of temporary program suspensions and staff layoffs unless cash is released sooner.
The Southmoreland School District heard on Nov. 18 that the Intermediate Unit (IU) has taken on short-term borrowing that may exhaust available cash in early 2026.
A board member reporting on the IU said the unit borrowed $5 million in anticipation funding and later obtained an additional $2 million, but those funds would sustain operations only into January 2026 without additional releases. The report said the IU’s borrowing includes fees that must be paid even if the money is not used and that delayed state and federal budgets produced “elevated financial risk” for the IU.
The board heard that administrators had prepared contingency plans that included temporary suspension of some programs and potential staff reductions: "There was a plan to lay off 17 professional staff, 4 support staff, 5 classroom assistants…" a speaker said, listing categories of positions that could be affected. Board members asked for clarification on cash-flow timing; business manager Pam Mondock said the district had begun to receive piecemeal state funding but warned it could take weeks after the budget’s passage for the IU to be made whole.
The practical effect, according to the report, would be program uncertainty for services tied to the IU such as Greensburg Partial Hospitalization, Prison Youth Detention and Shelter Program, Work Discovery, English as a Second Language and nonpublic services. Board members discussed communicating with participating districts about recognition of the board’s new WIU representative and whether to pursue legal options if the IU refuses to seat the designee.
The discussion ended without a district-level decision to change services; the board asked administration to continue monitoring IU cash flow and to communicate with districts and stakeholders as needed.
