County officials haven't dipped into a $100 million credit line approved by the County Council in June—but if Congress doesn't pass a second coronavirus relief bill, they might have to in the coming months.
Lori Depies, the county's finance director, said she and colleagues are not only monitoring what lawmakers are doing on Capitol Hill, but also property tax payments based on the mortgage market this month. They'll also pay attention to upcoming income tax payments in February and the General Assembly's activity in Annapolis next year.
Depies, who has worked in county government for about 18 years, said there's a lot of uncertainty regarding possible future property tax and income tax payments, along with any potential future relief bill in Congress.
"Dipping into the lines or reserves would be something the county would have to look at if the federal government would not be able to come to some agreement," Depies said. "I’m very concerned because I don’t have a crystal ball [and] because it depends on what they do or don’t do ... we’re still in a very uncertain period and I think the federal stimulus is key to whatever we do, and how we react."
County Executive Jan Gardner (D) said last week the credit line is "a backstop ... in case there's a catastrophic shortfall of revenue" to help pay county employees and other operating expenses.
Drawing on either the reserves—Depies said Tuesday there's about $51 million currently in the county—or the credit line would cause a strain on the county budget in future years, according to Gardner.
Depies said different situations could require Gardner and county officials to draw on either the $100 million line of credit or the mandated reserves, depending on future income tax or property tax revenue and other factors.
Both would require the approval of the County Council after review among county staff and Gardner, Depies said. The Frederick News-Post previously reported it cost the county around $115,000 in upfront legal fees and related costs -- and then roughly $22,000 per month -- to maintain the line even if no money is drawn from the line, which is set up through J.P. Morgan.
Depies still believes the county's finances are in good shape, but she wants county officials to leave every option available in the coming weeks and months.
"I think Frederick County is in a very strong financial position .. it’s almost like a belt and suspenders approach, because we have the credit line and the reserves," Depies said. "I think our fiscal house is in good order."