(3/21) The Frederick Board of County Commissioners today reviewed the FY2014 Recommended Operating Budget and the summary of changes since the Base Budget, and accepted the recommendations of the Budget Office.

Recommendations for additional funding requests (appeals) will be presented to the board on April 11. At that time, the county will know the impacts of state legislation and have a better understanding of the potential effects of sequestration that will be incorporated in the proposed budget. The budget will be released on April 19 and then the board will take the Proposed Operating Budget to a public hearing at 6:00 p.m. on May 7 at Urbana High School, located at 3471 Campus Drive, Ijamsville, Md.

Board President Blaine Young commented, "Today the Board of County Commissioners took another step toward bringing financial stability for the citizens of our county by addressing more of the challenges that we have faced with our budget since we were sworn into office. With the help of our County Manager Lori Depies, our Budget Committee and division directors, we are moving forward with approving an operating budget that required some very difficult decisions and thorough evaluation of every county department.

"As to our dedicated Frederick County Government employees, we express our appreciation once again for their hard work in doing more with less. We promised to reward them for their sacrifices and continued excellent service to our citizens and have at this point retained a cost-of-living increase at a time when many private sector employees are still bearing with unemployment and salary reductions.

"We are doing our part and must now wait to see what the impact of federal and state actions will be on our careful budget planning and the allocation of scarce resources in these difficult economic times. The public is invited to continue to follow our deliberations and we welcome their feedback on this important budget process at the public hearing in May."

When the Base Budget was presented on December 6, 2012, it reflected the consolidation of the Fire Tax District expenses into the General Fund. The board recommended a combined general property tax rate of $1.064 which is the sum of the current $.936 property tax rate and the current $.128 Urban fire tax rate. Although the Base Budget was essentially balanced with a $20,238 deficit, it included the use of a $34.5 million fund balance. The board’s direction was to reduce the existing structural deficit through analysis of current service delivery models and programs, exploring operational efficiencies and revenue enhancements.

Operating revenues for FY2014 are estimated to be approximately $475.2 million, a decrease of approximately $800,000 from Base Budget. This is offset by a $5.6 million increase in one-time revenues for a net increase of $4.8 million in total revenues. The most significant adjustments are in the following areas:

• Sale of Board of Education (BOE) surplus properties increased one-time revenues $4 million (offset by transfer to BOE in appropriations).
• $1.6 million transfer from Impact Fee Fund to General Fund for library debt service.
• Net ambulance billing adjustment decreased operating revenues $635,000.
• Increase in tax differential estimate decreased property tax revenue $195,000.

Expenditures for FY2014 are estimated at $511.4 million, an $800,000 increase over the Base Budget. There was actually a decrease of $3.6 million in on-going operating expenses that were offset by a one-time $4 million transfer to the BOE and $500,000 restored in funding for Frederick Community College (FCC).

Highlights of expenditures in Recommended Budget include:

• One-time transfer to BOE for sales proceeds of surplus properties for $4 million.
• Restored FCC one-time funding in FY2013 of $500,000.
• A five percent departmental reductions exercise resulted in $1.7 million in savings.
• Reduction of employee cost-of-living allowance from two percent to one percent resulted in a $1.4 million savings.
• Miscellaneous expense adjustments including a reduction in Fleet charges amounted to $600,000.
• Housing Initiative Fund: $150,000 allocated for a shelter agreement with the Citizens Services Division – Frederick Community Action Agency ($75,000), Religious Coalition for Emergency Human Needs ($40,000), Advocates for Homeless ($20,000) and Hope Alive ($15,000).

The $4.7 million increase in revenues and $800,000 increase in expenses results in an unallocated surplus of $3.9 million in the Recommended Budget. In light of the current estimated structural deficit of $29.2 million, the unallocated surplus should be considered for one-time funding options.

In addition to the General Fund, the recommended budgets for the various Special Revenue and Enterprise funds are included in the FY2014 Recommended Summary Operating Budgets book. The Electric Lighting Special Taxing Districts are being reviewed and will be presented to the board in the near future with a proposed tax rate increase to take to public hearing. The Braddock and New Addition Lighting Districts have insufficient fund balances to cover current operating deficits.

For additional information, visit www.FrederickCountyMD.gov/budget or contact Budget Officer Regina Howell at 301-600-3191 or via e-mail at rhowell@FrederickCountyMD.gov.