FREDERICK, Md. (WDVM) — The Frederick County Council introduced legislation on whether or not to approve hundreds of millions of dollars in credit if the county government needed it.
Just like many towns, cities, and states across the country, there is a concern about money.
In Frederick County, Md., income taxes and property taxes are two of the largest revenue sources to the general fund. To find the legislation, click here.
County staff went to the County Council Tuesday to approve a $100 million, one year contract with JP Morgan in a line of credit if the county were to need it.
JP Morgan approved for the county up to $75 million. The county also revied a proposal from Bank of America but said JP Morgan was the better option.
“We do not plan on using it,” said Rick Harcum, Chief Administrative Officer, Frederick County Government. “We do not think we need it. But we freely admit that it could come to pass where we do have to get access to cash.
It is a request that the Director of the Division of Finance, Lori Depies CPA, said the county has never done. Depies is hoping for the credit to be available by July 1st. The day also marks for the new Fiscal Year.
“We certainly never want to get in a place where we spent our reserves,” said Depies. “We have liquidated our investments and all of a sudden we have a payroll to meet and we can’t do it.
Depies also said there are fees with the line of credit including unused line fees and drawn down fees.
Councilmember Jerry Donald (D) said this action can prepare the county for the worst..if it were to happen.
“I think it is incumbent upon government and that is all of us to be prepared for the worst-case situation,” said Donald. “We have to be prepared.”
However councilmember Phil Dacey (R) said this is alarming.
“It is kind of alarming to see that we are seeing not only need access to $75 million and an expedited manner,” said Dacey.
The county council is working hard to get this expedited legislation to approval A public hearing is expected to held on June 9th that could follow with a final vote after the meeting.
The legislation can be expedited because of Maryland Gov. Larry Hogan’s executive order and state of emergency.
After legislation has final approval from the council, it takes 60 days for the bill to be enacted, but this executive order will allow the legislation to be enacted immediately.
Frederick county isn’t the only jurisdiction to ask for a line of credit. Officials also say Montgomery County, Md. did a similar action.