Somerset County treasurer, commissioners agree to 'stopgap' investment while dispute shifts to court

David Hurst, The Tribune-Democrat, Johnstown, Pa.
·4 min read

Oct. 17—SOMERSET, Pa. — Somerset County's treasurer and the county commissioners have agreed to transfer $10 million in funds to a money market account while a bank investment dispute is settled.

With the matter likely headed to court, the sides agreed on a "stopgap" measure to take advantage of current interest rates that are better than 3%, solicitors for both parties confirmed.

Disagreement between the sides led Treasurer Anthony DeLuca to refuse to release the funds earlier this week, even after Commissioners Gerald Walker, Colleen Dawson and Pamela Tokar-Ickes voted on a resolution to deposit $10 million into a 60-day CD with Somerset Trust and another $10 million with First National Bank.

CD and some other savings rates have soared in recent months, creating opportunities for counties with adequate fund balances — and unspent American Rescue Plan dollars — to invest the money in the short term and generate revenue.

DeLuca has objected to the fact that the commissioners approved a resolution to transfer money based on their own bank rate requests after he'd sought quotes days earlier.

He also objected to the commissioners' choice of Somerset-based Somerset Trust Co. for a portion of their investments, even though the bank's rate was approximately three-tenths of a percentage point lower than Pittsburgh-based First National Bank's rate.

Somerset County's three commissioners, Republicans Walker and Dawson and Democrat Tokar-Ickes, said it's their authority to make such decisions. All three supported the move to invest in the Somerset-based bank, which they called a longtime community partner. The difference would be approximately $657 in interest revenue, they have said.

DeLuca responded that First National Bank also has local ties because it has a Somerset branch that employs area residents. He maintains that he should have a vote on the matter, but Somerset County Solicitor Michael Barbera said that's not correct because he's not a county commissioner.

"The County Code expressly identifies the county commissioners as the responsible managers and administrators of the fiscal affairs of their respective counties," Barbera wrote in a letter to the treasurer's solicitor, David Leake.

Both sides claim the county code is on their side — but that will likely be a matter that the court system could consider at a later date.

By agreeing to temporarily place the funds in a money market account, "neither the treasurer nor the commissioners have waived their rights to pursue legal action," Leake said.

Somerset County is one of 24 sixth-class counties in Pennsylvania, and elected treasurers from several other sixth-class counties indicated this week that it's the county commissioners' role — not theirs — to make a final vote on transactions such as investments.

Still, treasurers in Indiana and Bedford counties both indicated that they worked closely with their county's commissioners to research rates and "the best option" before those votes were made.

"Once it went to a public (commissioners') meeting, I presented options to them for a vote and they voted," said Indiana County Treasurer Kimberly McCullough, adding that she made a recommendation. "It just worked out that we were all kind of on the same page with the best option."

Bedford County Treasurer Melissa Cottle said that Bedford County relies on New York-based investment firm Three+One to narrow down a list of recommended routes the county could take. While the commissioners take action on the final investment decision, she said that she, as treasurer, meets with the commissioners and has the opportunity to give her input beforehand.

To Leake, there's too much "gray area" to ensure that process is proper, even if it might be the popular route statewide. He views DeLuca's challenge as likely precedent-setting.

Citing the state's County Code, he noted the law doesn't get into much detail when it comes to depositing county funds, other than noting that it should occur with "county commissioners along with the treasurer" of the county.

"It's their position the law is clear and supports the commissioners, and our position is that it isn't clear," Leake said. "This may be the first time the court has been asked to give guidance on this subject."

As of Friday, neither party had filed legal challenges in court on the matter.