Harford County, Maryland FY 24 Proposed Operating Budget

The Committee believes the proposed level of debt for Fiscal Year 2024 is reasonable. Care should be taken to revisit the guidelines periodically to make sure they are still relevant, prudent, and allow the most reasonable use of debt for proper public purposes. Since most of the County debt is publicly issued, additional consideration needs to be given to the requirements of the public debt rating agencies and bond investors. The Committee finds additional comfort in the recent reaffirmation of the County’s strong public debt ratings as a testament to the sound fiscal policies employed by the County. Harford County is in a select group of government issuers with the highest ratings from the three major rating organizations. The Committee recognizes this as a significant achievement and believes it stands as a testament to the strong fiscal policies employed by the County. While the Committee recognizes the County’s obvious strength in the management of the debt service levels with regard to the General Fund, the Committee would be remiss in ignoring potential impacts to the General Fund from other sources such as Enterprise Funds. The Water and Sewer Fund was established as a self-sustaining utility to provide water and sewer services for Harford County. Revenue from users covers the costs of providing these services. The County has taken steps to set rates at appropriate levels to ensure the General Fund will not have to bridge any shortfall in the Water and Sewer Operating Fund. The Committee reviewed the County's practice of maintaining an assigned fund balance of approximately five percent of the annual General Operating Fund Budget. This reserve holds funds that could be used by the County to fund revenue shortfalls or other emergencies. This fund balance is considered critical in maintaining an acceptable level of financial strength. Fiscally strong municipalities/counties are expected to maintain reserves in excess of the five percent reserve in order to maintain strong investment grade public debt ratings. These additional D. Fund Balance

46