Harford County, Maryland FY 24 Proposed Operating Budget

wages are increasing but business profits and capital gains are contracting. While much of the capital budget is debt financed and not likely to affect the General Fund in FY 2024, the Committee is concerned about the long-term impact of rising material prices and higher interest rates will combine to increase debt service costs in future years. Another long-term concern to the General Fund the Committee discussed was the commercial property component of the assessable base, particularly the demand for office space space and retail that is transforming in this post-covid economy. The Committee welcomed the opportunity to discuss future development in the County with the department heads of Planning & Zoning, Inspections, Licenses & Permits and Economic Development and encourages the County to continue to adapt to the big changes underway in how people live, work, shop and play. The Committee spent time discussing the County debt authorization with the Treasurer, reviewing the Debt Management Policy (dated April 2010), and the expected debt levels in future years. The Policy appears to place reasonable parameters on the issuance of debt by the County. A review of expected levels of debt from FY 2021 through FY 2027 indicated the County remained comfortably within the debt metrics imposed by the Policy. Based on discussions with the Treasurer, the new debt needs of the County are very manageable. As the County issues new debt, the Committee strongly urges the Administration to consider potential impacts to debt service from other funds. The Committee will continue to study this process each year. B. Debt Authorization

C. Fund Balance

The Committee recommends that the Fiscal Stabilization Fund be maintained at a minimum of five percent of the General Fund Operating Budget. Additional reserves should be maintained as needed

48