FY 26 Proposed Operating Budget Book

Debt Authorization The Committee spent time discussing the County debt authorization with the Treasurer, reviewing the Debt Management Policy 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 2024 through FY 2030 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 fromother funds. The Committee will continue to study this process each year. Fund Balance The Committee recommends that the Fiscal Stabilization Fund be maintained at a minimum of five percent of the General Fund Operating Budget with an additional $20.0 million in unassigned reserves to deal with any unexpected expenditure or revenue shortfalls. Total reserves in the General Fund should be maintained at a level of $150.0 million to maintain the County’s AAA bond rating. Additional Recommendations The Committee believes that its recommendations and forecasts should be reviewed and tested at fiscal year-end 2025 and throughout FY 2026 as it prepares its recommendations for FY 2027. Revisions in revenue estimates prepared by State or County agenciesor supplemental budget authorizations occurring after the date of our report may require adjustment to these recommendations. Typically, the Committee’s focus has been on income tax revenues and property tax revenues. We have typically assumed static balances in the other budget areas but have tried to make the County aware of any significant areas of note. The Committee recognizes the County’s need to utilize our forecasts in long range budget planning. Given the uncertainties cited inthis report, the County should continually monitor conditions in its current budget year and not rely upon this report beyond the fiscal yearfor which it is intended. Acknowledgments The Committee cannot complete its task without expressing its sincere appreciation to all County employees who assisted the Committee in this endeavor. Particularly, the Committee wishes to thank Robert F. Sandlass, Jr., Treasurer, Rick Pernas CPA, Deputy Treasurer and their staff, Benjamin Lloyd, Chief, Budget and Management Research and his staff, for their efforts in providing estimates and historical revenue data and for their careful and detailed explanations of the County's budgeting structure. The Committee received valuable insight from Richard Truitt, Director of Department of Inspections, Licensing, and Permits, Shane Grimm, Director of Planning and Zoning, and Karen Holt, Director of Economic Development, and Andy Bauer, vice president and regional executive for the Baltimore branch of the Federal Reserve Bank of Richmond. The Committee also wishes to thank Isaiah Smith for his assistance in developing instrumental forecasting models and Gail DiPietro for her efforts in coordinating the Committee's meetings and providingstaff support.

March 31, 2025

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