Frederick County might dip into reserve fund

April 15, 2009

FREDERICK, Md. (AP) -- The Frederick County Commissioners may dip into a reserve fund to help close a budget deficit projected at $12 million for fiscal 2010.

The commissioners have already cut the deficit by more than $40 million for the fiscal year that starts July 1.

At a meeting on Tuesday, the commissioners voted to conduct a public hearing on accessing a $5 million reserve fund. They'll also conduct a hearing at the same time on withdrawing money from the fund, as required by law.

The vote was 3-1. John L. Thompson Jr. opposed the measure, and Charles Jenkins abstained.

The fund was created in 2003 in an effort to improve the county's bond rating. Current law states that the commissioners can use the fund only to meet "unexpected expenditures" that can't be covered by the normal contingency fund.

Commissioners President Jan Gardner proposed changing the law to also allow withdrawals under "extreme circumstances as determined by the Board of Commissioners." She said with revenue falling, the county needs the funds.

Thompson objected. He said commissioners would be using one-time funds to deal with operating expenses. "You're in the position of a farmer with a drove of pigs -- you're running low on feed corn and you can't resist the temptation to dip into your seed corn," he said. "That will work in the short term, but in the springtime, what will you plant?"

Jenkins said he agreed in general with Thompson, but pointed out that the reserve fund wasn't meeting its intended function. "I will vote my conscience when we go to public hearing," he said.

The reserve fund discussion followed a vote to conduct a public hearing on keeping the property tax rate for fiscal 2010 at 93.6 cents per $100 of assessed value.

The commissioners voted 3-1 to hold the public hearing, with Thompson voting against the measure. Gardner was absent at the time.

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