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Frederick County Government
 Financial Picture Improves

(6/23) In preparation for meetings with bond rating agencies in New York this week, the Frederick Board of County Commissioners received a financial update for the fiscal years 2011 and 2012 for Frederick County Government. Finance Division Director John Kroll reported that the county now has a better picture for FY 2011 than originally projected due to actions taken by the current board to reduce the size of government while maintaining good financial management.

Mr. Kroll now projects an increase in revenues and substantially less in expenditures because of board decisions to reduce expenditures, primarily in the area of freezing numerous employee positions, the elimination of some positions and the reduction of programs, combined with increased income tax revenue.

He also noted that the county will not use $13 million budgeted for FY 2011 and there will be a surplus from operating revenue versus operating expenses. Therefore, the county has up to $26 million available for use in FY 2013 and the projected deficit has been reduced from $16.6 million to $3.3 million in FY 2013.

Board President Blaine Young commented, "We were pleased to hear some good news today, confirming that our boardís efforts to reduce the deficit have produced positive results. We were elected to deal with a very challenging deficit and we have shown that we have the political will to make the necessary cuts and adjustments to balance our budget.

"We must keep in mind the continuing structural deficit that Frederick County has been dealing with since the early 2000ís. This potential structural deficit actually jumps from $19 million to close to $30 million. We are working to find ways to deal with the problem of spending more money than we are taking in."

As of December 1, 2010, the county faced a projected $11.8 million deficit in FY 2012 and a $31.9 million structural deficit, where operating revenues were less than expenditures. Improved revenue/expenditure estimates and actions taken by the board eliminated the deficit and reduced the structural deficit by $13.5 million in FY 2012.

On June 2, the board approved the FY 2012 operating budget of approximately $449 million that is balanced with no increases in general property taxes or the fire tax.

Since last December, the board addressed deficits in the fire tax, put funds back in the bond enhancement reserve and the capital improvement program, and funded other post employment benefits at the five-year phase-in level to save considerable taxpayer funds. The commissioners did not change recordation taxes. Operating expenses for county departments decreased by $4.3 million or 3.5 percent, after excluding retiree benefits.

The entire county employee workforce reduction and the savings realized in the past few months includes 106 full-time employees in previously filled positions at $4.8 million and 20 full-time employees in previously vacant positions at $1.4 million. A total of 126 full-time positions were impacted for an estimated reduction in the budget deficit by $6.2 million.

In summary, including these 126 positions, 15 positions that were downgraded and 34 vacant firefighter positions that were eliminated (without an impact to the service delivery model), the total budget impact of these 175 positions is $8.4 million. The commissioners have reduced the budgeted positions/workforce by seven percent since December 1.

President Young, Commissioners Billy Shreve and David Gray and county officials will meet June 23 Ė 24 with bond rating agency representatives.

For additional information, contact Mr. Kroll at 301-600-1117 or via e-mail at jkroll@FrederickCountyMD.gov.