Queen Anne’s County Commissioners FY2018 Proposed Budget April 24, 25, 26, 2017 Gregg A. Todd, County Administrator Jonathan R. Seeman, Director, Budget, Finance & IT

FY2018 Budget Highlights Budgeted Growth - $4.1 million or 3.2%, increase from $129.7 million in FY2017 to $133.8 million in FY2018 Revenue - Income tax & property tax make up 86% of total County revenue sources Income Tax Revenue - Projected to grow by 6.4% Property Tax Revenue - Relatively stagnant, projected to grow by 1.8% Property Tax Assessable Base - Increase of 3.2% for area reassessed (north County) Tax Rates - Remain the same, property tax rate is $0.8471/$100 of assessed value; income tax rate is 3.2%

FY2018 Budget Highlights Constant Yield Rate is $0.8388 per $100 of assessed value, slightly lower than the current rate of $0.8471 per $100 of assessed value which will result in $670,000 in revenue above what would be collected at the Constant Yield rate Employee Compensation Increase - 2% for county employees Board of Education - Funded at Maintenance of Effort, increase of $1.3 million Enhancements – 7 new full time positions Southern Kent Island Sewer Project - $225,000 financial aid funding

FY2018 Budget Highlights AAA Bond Rating “The county's 'AAA' reflects its stable economic base, supporting historically strong operating performance and a solid revenue framework, coupled with spending flexibility.” “Fitch expects growth prospects for revenues to be above inflation given strong growth in income taxes and modest appreciation in residential property values.” “Conservative budget management practices have contributed to consistent reserve levels maintained at amounts above what Fitch deems adequate for an 'aaa' reserve safety margin.” Fitch Ratings – RAC 2017 Release Queen Anne’s County

FY2018 – Proposed Revenue by Source

FY2018 – Proposed Expenses by Function

Real Property Assessed Value FY2006 - FY2018

Real Property Tax Rates by County *Above rates are all for FY2017

Budget Revenue Changes FY2017 - FY2018

Enhancements

County Commissioners Proposed Budget FY2018 Revenue County Commissioners Proposed Budget

County Commissioners Proposed Budget FY2018 Expenditures County Commissioners Proposed Budget

FY2018 Expenditures, continued County Commissioners Proposed Budget

FY2018 Expenditures, continued County Commissioners Proposed Budget

FY2018 Expenditures, continued County Commissioners Proposed Budget

Maintenance of Effort

Board of Education Capital Projects

FY2018 Capital Budget Highlights Capital Budget - $37 million Includes $6.4 million for Board of Education projects Includes $12.6 million for Southern Kent Island sewer project (SKI) Bond Sale - $15.8 million, which includes: New Courthouse - $8 million Total of $4.6 million for Board of Education *BOE includes Grasonville Elementary School Addition - $3.1 million Asphalt Overlays - $2.5 million Other Miscellaneous Projects - $ 0.7million Funding Sources Pay Go - $1.4 million Grants - $1.1 million Bonds - $15.8 million Operating Funds - $ 0.7 million Capital Fund Balance - $4.8 million Other - $13.2 (primarily for SKI)

TOTAL GENERAL OBLIGATION DEBT As of June 30, 2016: Governmental Activities General Obligation Bonds Outstanding Before Issuance of Current Issue- $113,797,430 Governmental Activities Notes Outstanding - $1,913,199 Assumptions for Debt Issuance in FY17 – FY22: Date of Issue: March 1 First Interest Payment: July 1 First Principal Payment: July 1 of following year Interest Rate: Graduated rate adjustment 4% to 5 %

DEBT POLICY RATIOS Current Debt Policy states outstanding general bonded debt and any new general obligation debt proposed is 2.5% or less of the total taxable assessable base. 20

Per Capita Debt to Per Capita Income DEBT POLICY RATIOS The Spending Affordability Committee recommended the County tie the debt per capita threshold (currently at $3,000 per capita) to currently defined per capita income. This measure shall be a ratio of debt per capita debt to per capita debt. Maximum threshold = 8%. Per Capita Debt to Per Capita Income 21

DEBT POLICY RATIOS Current Debt Policy also states that although there is some flexibility in the measurement of debt service compared to general fund expenditures and no absolute limit established by Government Finance Officers Association, anything above 12% of total general fund expenditures would be a cause to carefully monitor debt service. The Spending Affordability Committee recommended lowering this to 10%. 22

6 Year Capital Budget FY2018 – FY2023

6 Year Capital Budget, continued FY2018 – FY2023

6 Year Capital Budget, CONTINUED FY2018 – FY2023

6 Year Capital Budget, continued FY2018 – FY2023

6 Year Capital Budget, continued FY2018 – FY2023

6 Year Capital Budget, continued FY2018 – FY2023

Potential Allocations FY2018 Proposed Bond Sale Potential Allocations $15.8 Million

FY2018 Capital Budget by Funding Source

FY2018 Capital Budget by Funding Source, continued

FY2018 Capital Budget by Funding Source, continued

FY2018 Capital Budget by Funding Source, continued

Upcoming Dates & Considerations Public Hearings - April 24, 25, 26 Work Session - May 9 Budget Adoption - May 23