City Addresses $2.3M 'Shortfall' in Funding

City Addresses $2.3M 'Shortfall' in Funding

It was discovered that the City of Frederick had a $2.3m 'shortfall' in the general fund. The City explained what happened and why they say taxpayers should not worry.

FREDERICK, Md. - It was brought to the Mayor’s attention Monday that a $2.3m shortfall was found in the City of Frederick’s general fund.

"On June 30 2023 there was a shortfall, that's the only word we can come out that there wasn't the proper amount of funding allocated for the rainy day fund," says Randy McClement, City of Frederick Mayor.

The issue was addressed at the City’s next public workshop, Wednesday evening by Office of Finance Director Gerry Kolbfleisch. Kolbfleisch says it was all just a matter of miscalculation at that time the budget was projected.

"As it was pointed out by our budget directors today, if you looked at our balance sheet today, we would have a big fund balance because of all the property taxes that have been paid up until this point," says Michael O’Connor, Board of Alderman.

The $2.3m accounts for 3 percent of the city’s general fund. The Mayor says the 'shortfall' has already been accounted for, and rarely does the City make mistakes like this.

"Very rarely [does this happen,] Gerry feels really bad that he messed up a little bit and didn't pull the numbers so I want him, and the public to know, were a group of humans," says Mayor McClement.

City officials say taxpayer money has not been misplaced or misused, and is assuring the public the City isn’t cutting back on any services or purchases due to the find.

"It's not a deficit in terms of we spent more than we took in, it was a fund balancing, a saving account, as it was a little smaller then what our policy said it would be," says Alderman O’Connor.

The City will present its final audit at the end of the month, before they present their final audit to the State in November.

The office of Finance says they projected the city’s revenues to be $22m when they went ahead with budget projections, but now found it was actually closer to $18m.

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