The Frederick County government is moving in the right direction to secure a line of credit in order to be prepared in case tax revenues are delayed later this year because of the pandemic.

The Gardner administration is trying to quickly lock up a commitment from banking firm J.P. Morgan to have up to $100 million available to the county in case of a financial emergency during fiscal year 2021, which begins July 1.

The plan was presented to the County Council Tuesday and lawmakers plan now to vote next week. This is faster than the council is usually able to act, but the state of emergency declared by Gov. Larry Hogan in response to the coronavirus pandemic enables the speedier approval.

Finance Director Lori Depies told News-Post reporter Steve Bohnel that she hopes the county never has to access that money. The plan is to have the funds available in case state income tax and property tax payments are delayed. The county was also able to lock in to a good interest rate, Depies said.

The county’s agreement with J.P. Morgan will be good for one year, but it could be renewed and renegotiated for future years, Depies said.

“My biggest concern ... was that the credit facilities are drying up,” Depies told our reporter. “Banks do not have the capital to lend. They’re lending it out to private businesses. Our financial adviser has let us know that we’re one of the only counties in Maryland that have sought out a line of credit, and it’s probably great that we’ve done that. Because when you need cash, sometimes, you can’t go out and get it.”

We were critical of the County Council last week for considering a bill that would change council rules to allow for instant voting on a proposal, permitting bills to be introduced and voted on in the same meeting. We said then that we were leery because the county had not offered an example of any bill that would need to be approved so precipitously, without public comment and consideration.

After that, administration officials indicated that this line of credit authorization was a proposal that would need swift approval when it was ready. But even this is not being voted on the same day in which it was introduced.

Vivian Laxton, a spokeswoman for County Executive Jan Gardner, said the public will be able to comment on the bill via email or by calling in live on-air during normal commenting periods, starting Tuesday. That will give the council time to consider comments and discuss the proposal.

Depies said she needed to bypass the normal process for County Council bills — introducing, holding a public hearing and voting over a span of several weeks — in order to lock in the agreement with J.P. Morgan.

Council Vice President Michael Blue told our reporter that Depies’ concerns about access to credit and the availability of credit during the pandemic were valid. Council President M.C. Keegan-Ayer said she agreed with the argument as well. Both said they were waiting to hear more details before committing to vote for it.

This seems to us a reasonable explanation for speeding up the normal process. We are also reassured that the council will retain a period of time for comment and criticism. It may be just one week, but that should be sufficient in this case.

We therefore support the county’s plan to take on a line of credit, with the hope that it might never be used. If the funds are needed, it would mean that the county and the state will be in a severe fiscal crisis, which we hope will not come to pass.

(1) comment


While having a line of credit seems to make sense, there are a number of questions the County needs to address: How much is the line going to cost even if not used? What is the cost to the county with the Fiscal Advisor? They do not work free. When anyone tells you have to make a snap decision, red flags should immediately go up. This is not a used car deal. I think it is time for the County Finance folks to come clean on the actual reserves the County has. Sometimes they say 50 million and other times they say 75 million. What is it? How has the reserve changed over the last 5 years? As politicians say, never waste a crisis. Looks like Wall street believes that also.

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