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Myersville has a higher general fund deficit than any other municipality in the state, according to state officials.

Though it is not illegal to run such a deficit, the state's Office of Legislative Audits does send out letters following its annual audits of counties and municipalities, notifying them of various problems with their fiscal health.

Out of 148 cities and towns audited this year, the state office found only three with general fund deficits: Myersville, Morningside and Ridgely. As of June 30, 2007, Myersville was $420,676 in the hole, according to a Sept. 12 state report.

Myersville treasurer Ray Hinkle says the deficit is misleading. The town moved into its new town hall in March 2007, along with the Myersville Volunteer Fire Company, taking on several million dollars in debt at the time. It took out an initial $3.3 million bond for the construction in 2002, and, when that proved to be too little, authorized the purchase of another bond of up to $2.5 million in April 2007.

The town and the fire company struck a verbal-only agreement in 2002 to split the cost of the hall, according to Hinkle. In April 2007, he said that the fire company verbally agreed to be responsible for 60 percent of the $3.3 million debt, and the town for the remaining 40 percent, while the town will pay about 60 percent of the debt beyond the $3.3 million.

Once the deal with the fire company is fleshed out and put on paper, the town's budget will show a budget in the black once again, Hinkle said.

"We're working on an agreement because the town doesn't have all that debt, the fire company has [much of] the debt," he explained. "The fire company couldn't get its own loan so it appears the town signed off on that so it could be switched over to the fire company and we wouldn't be in the red anymore."

Despite this explanation, however, Office of Legislative Audits legislative auditor Bruce A. Myers says the town needs to get its budget under control, though the state will not intervene unless laws are broken.

"We just want to see that management is concerned and taking some action," he said. "I don't think we're going to be critical at all if they say they're going to reduce expenditures. It's for local government to decide – we're not going to critique the plan, we just want to see that it's some kind of reasonable approach to getting a handle on it."

Myers did suggest that the town look into certain approaches to handling the debt, such as reigning in spending or finding new revenue sources, measures which Hinkle says are unnecessary because the debt figure does not take into account the fire department's share.

"No, I can't cut spending and move forward. How are you going to do it?" Hinkle asked.

However, there is extra cause for concern in Myersville's case, as its budget deficit has risen since the June 30, 2006 audit, when the town owed $297,324.

"These are the salaries and everything it takes to run the town normally so that's why it's a concern," Myers said. "And the fact that it was there last year and is now larger, that's a concern."

But, like the problem of the deficit's existence in the first place, Hinkle says the issue of the increasing debt will be solved when the fire department officially takes on its share of the debt.

"The agreement basically is in effect, all we have to do is transfer the stuff around and sort of massage the agreement to make sure everyone's on board with it," he said. "It's a friendly agreement, there's no problem with it, it will all be done in due time, but we want to be sure we have one that will stand the test of time."