Fiscal Year 2023 ACFR (PDF)

THE COUNTY COMMISSIONERS OF

QUEEN ANNE’S COUNTY, MARYLAND

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

JUNE 30, 2023

QUEEN ANNE'S COUNTY, MARYLAND

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2023

TABLE OF CONTENTS

Page(s)

INTRODUCTORY SECTION

Letter of Transmittal 5 - 9 Certificate of Achievement for Excellence in Financial Reporting 10 Organization Chart 11 Certain Elected and Other Officials 12

FINANCIAL SECTION 13

Independent Auditor's Report 14 - 17 Management's Discussion and Analysis (required supplementary information) 18 - 32

BASIC FINANCIAL STATEMENTS 33

Government-Wide Financial Statements Statement of Net Position 34 - 35 Statement of Activities 36 - 37 Governmental Fund Financial Statements Balance Sheet 38 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 39 Statement of Revenues, Expenditures and Changes in Fund Balances 40 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 41

Enterprise Fund Financial Statements Statement of Net Position 42 - 43 Statement of Revenues, Expenses, and Changes in Net Position 44 - 45 Statement of Cash Flows 46 - 47 Fiduciary Fund Statements Statement of Fiduciary Net Position 48 Statement of Changes in Fiduciary Net Position 49 Notes to Financial Statements 50 - 124

REQUIRED SUPPLEMENTARY INFORMATION 125

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund 126 - 128 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Grants Fund 129 Maryland State Retirement and Pensions Systems Schedule of the Proportionate Share of the Net Pension Liability and Schedule of Contributions 130 Actuarial Assumptions - Pension Plan 131 Other Post-Employment Benefits (OPEB) Trust

Schedule of Changes in the Net OPEB Liability and Schedule of Actual Employer Contribution as a Percentage of Covered-Employee Payroll 132 Actuarial Assumptions - OPEB Plan 133 Length of Service Awards Program (LOSAP) Schedule of Changes in the Net LOSAP Liability 134 Notes to the Required Supplemental Information (LOSAP) 135 2

QUEEN ANNE'S COUNTY, MARYLAND

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2023

TABLE OF CONTENTS

(CONTINUED)

Page(s)

FINANCIAL SECTION (CONTINUED)

OTHER SUPPLEMENTARY INFORMATION 136

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 137

Non-Major Governmental Funds 138 - 141 Combining Balance Sheet 142 - 145 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 146 - 149 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budgetary Basis 150 - 156 Non-Major Enterprise Funds 157 - 158 Combining Statement of Net Position 159 Combining Statement of Revenues, Expenses, and Changes in Net Position 160

Combining Statement of Cash Flows 161 Fiduciary Funds 162 Custodial Funds 163 Statement of Fiduciary Net Position 164 Statement of Changes in Fiduciary Net Position 165 Community Partnerships for Children 166 Community Partnerships for Children Special Revenue Fund Combining Balance Sheets - By Grantor 167 Schedule of Revenues, Expenditures, and Changes in Fund Balances - By Community Partnership Agreements (CPA) and

Non-Community Partnership Agreements (Non-CPA) 168 - 171 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budgetary Basis 172 - 173

STATISTICAL SECTION (UNAUDITED) 174 - 175

Table 1 Net Position by Component - Government-Wide 176 - 177 2a Changes in Net Position - Government-Wide 178 - 181 2b General Tax Revenues - Governmental Activities 182 3 Fund Balances - Governmental Funds 183 4 Changes in Fund Balances - Governmental Funds 184 - 185 5 Assessed Value of Taxable and Exempt Property 186 - 187 6a Real Property Tax Rates - County Direct Rate 188 6b Real Property Tax Rates - County Special Taxing Districts 189

6c Real Property Tax Rates - Overlapping Governments - Towns 190 - 191 7 Ten Highest Commercial Property Taxpayers 192 8 Property Tax Levies and Collections 193 9 Ratios of Outstanding Debt by Type 194 10 Ratios of General Bonded Debt Outstanding 195 11 Computation of Net Direct and Overlapping Debt 196 - 197 12a Computation of Legal Debt Margin 198 - 199 12b Computation of Local Debt Limit 200 - 201

13 Principal Employers 202 14 Demographic Statistics 203 15 County Government Employees - Full-Time Equivalents 204 16 County Government Employees - Full-Time Only by Function 205 17 Operating Indicators by Function 206 18 Capital Asset Statistics by Function 207 3

I S

NTRODUCTORY ECTION

4 Queen O F F I C E O F B U D G E T A N D FINANCE The Liberty Building Anne’s 107 North Liberty Street Centreville, Maryland 21617 County Telephone: (410) 758-4064 Fax: (410) 758-3036 C ounty Commissioners:

James J. Moran, At Large County Administrator: Todd R. Mohn Jack N. Wilson, Jr., District 1 J . Patrick McLaughlin, District 2 Director, Budget & Finance: Jeffrey A. Rank P hilip L. Dumenil, District 3 Christopher M. Corchiarino, District 4 February 29, 2024 The Board of County Commissioners and The Citizens of Queen Anne’s County, Maryland

FORMAL TRANSMITTAL OF THE ANNUAL COMPREHNSIVE FINANCIAL REPORT (ACFR)

State law requires that all general-purpose governments publish a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the annual comprehensive financial report of Queen Anne’s County, Maryland for the fiscal year

ended June 30, 2023.

This report consists of management’s representations concerning the finances of Queen Anne’s County. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in the report. To provide a reasonable basis for making these representations, the management of Queen Anne’s County has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and

to compile sufficient reliable information for the preparation of Queen Anne’s County’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal controls should not outweigh their benefits, Queen Anne’s County’s comprehensive framework of internal controls has been designed to provide a reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the

best of our knowledge and belief, this financial report is complete and reliable in all material respects.

Queen Anne’s County’s financial statements have been audited by UHY LLP, a firm of licensed certified public accountants.

The goal of the independent audit is to provide reasonable assurance that the financial statements of Queen Anne’s County, for the fiscal year ended June 30, 2023, are free of material misstatement. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor

concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that Queen Anne’s County’s financial statements for the fiscal year ended June 30, 2023, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

The independent audit of the financial statements of Queen Anne’s County is part of a broader, federally mandated, “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the

administration of federal awards. These reports are available in Queen Anne’s County’s separately issued Single Audit report.

5 GAAP requires that management provide a narrative introduction, overview, and analysis, entitled Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it.

Queen Anne’s County’s MD&A can be found immediately following the report of the independent auditor.

PROFILE OF THE GOVERNMENT

Queen Anne’s County is situated on the Eastern Shore of Maryland. It is bordered to the north by Kent County, to the east by the State of Delaware, to the south by Caroline and Talbot counties, and to the west by the Chesapeake Bay. Access to the Western Shore of Maryland is provided by the Chesapeake Bay Bridge. The County is 373 square miles in area and has approximately 51,711 citizens. The County seat is located in Centreville. The County Commissioners of Queen Anne’s County are empowered

to levy a property tax on both real and personal properties located within its boundaries.

Queen Anne’s County was formed in 1706 and is governed by a five-member Board of County Commissioners. County code provides that one Commissioner be elected purely at large; the remaining four Commissioners must reside in specific districts, but are elected at large. The Commissioners operate under Maryland’s Code Home Rule form of government. Both the executive and legislative functions of the County are vested with the Board of County Commissioners.

Queen Anne’s County provides a full range of services including public safety (police, volunteer fire protection, emergency services, detention center, and animal control), highways and streets, solid waste, planning and zoning, economic development, culture and recreation, education, libraries, and general administrative services. In conjunction with the State, the County also operates services related to general community health and social services. In addition, the County operates a water and wastewater

utility, an airport, a golf course, and public landings and marinas.

BUDGETARY CONTROLS

The annual budget serves as the foundation for the County’s financial and budgetary controls to ensure compliance with legal provisions embodied in the annual appropriation resolution approved by the County Commissioners. The County budget is comprised of the budget message, current revenue and expense budgets and the capital budget and capital program. Activities of the general fund, certain special revenue funds, and the enterprise funds are included in the current budget.

The current operating budget includes appropriations for the full range of basic services. These services include county administration, public safety, education, public works, community services, parks, debt and other agencies. The capital budget includes funds to construct major governmental facilities such as the Detention Center renovation, roads, schools, and water and sewer infrastructure. Capital projects usually take more than a year to complete, unlike the operating budget which covers only a

year.

The budget process begins each Fall when the County departments receive budget preparation instructions for the capital budget which is then followed by instructions for the operating budget. The budget preparation is directed by the Director of Budget and Finance. After a thorough review of the departmental requests, a County Administrator’s proposed budget is submitted to the County Commissioners in March. The County Commissioners then conduct a series of public hearings and work sessions to

review the proposed budget. After its review, the County Commissioners finalize the budget and set tax rates, fees and charges needed to generate enough revenue to balance the budget. The budget must be adopted by the County Commissioners on or before the last day of the month of the fiscal year currently ending, although the Commissioners typically adopt the budget at the end of May.

The Office of Budget and Finance is responsible for budgetary control. The appropriated budgets are prepared at the fund, function (e.g., public safety), and department (e.g., Detention Center) level. Expenditures/expenses may not legally exceed appropriations, based on the level at which they were adopted. For the General Fund, annual expenditure budgets are legally adopted at the departmental level. For all other Governmental Funds, for which annual budgets are adopted, expenditure budgets are legally

adopted at the fund level. Budgets for the General Capital Projects Fund and the Roads Capital Projects Fund reflect multi-year appropriations at the individual project level.

Department Heads may make transfers of appropriations within a department of up to $10,000 with the approval of the County Administrator. Transfers of appropriations or appropriation of new revenues in excess of $10,000 require the approval of the County Commissioners. Budget to actual comparisons are provided in this report for individual governmental funds for which an appropriated annual budget has been adopted. The budget comparisons for the General Fund are presented as part of the

6 Required Supplementary Information portion of this report. For non-major funds with appropriated annual budgets, budget to actual comparisons are presented in the Supplementary Information subsection of this report.

ECONOMIC OUTLOOK AND CONDITION

The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which Queen Anne’s County operates.

The unemployment rate for Queen Anne’s County is typically below the state and national averages, as shown in the chart below.

The June 2023 rate for the County was 1.5%, compared to the state’s rate of 1.7% and the U.S.’s rate of 3.6%. The fiscal year 2023 average rate for the County was 3.7%. The decrease in the unemployment rate for fiscal year 2023 was the result of recovery from the COVID pandemic.

LOCAL ECONOMY

The local employment base is somewhat limited and centers on several stable manufacturers, as well as the agriculture, maritime, construction, retail, leisure, and hospitality industries. The three largest employers are governmental units, including the County, the Board of Education, and Chesapeake College. There is a small, but growing, base of specialty manufacturers. In addition, the County’s proximity to the Western Shore enables about 60% of the workforce to commute to locations outside the County,

primarily to higher paying jobs in the Baltimore and Washington areas.

Property and income tax revenue increased when comparing current year to prior year for governmental funds. Property taxes increased in fiscal year 2023 by 2.8% to $78.1 million due to an increase in assessable base. Local income tax is the County’s other main revenue source. Income tax collections increased by 11.9% in fiscal year 2023, from $71.0 million in fiscal year 2022 to $79.5 million in fiscal year 2023 as a result of increased employment, capital gains and wages.

Recordation tax declined in fiscal year 2023 with a decrease of 12.9% over fiscal year 2022, from $10.2 million in fiscal year 2022 to $8.9 million in fiscal year 2023. The transfer tax revenue also decreased in fiscal year 2023 by 20.3%, from $3.8 million in fiscal year 2022 to $3.0 million in fiscal year 2023.

7

LONG TERM FINANCIAL PLANNING

Rainy Day Fund – Ordinance No. 12-21 was adopted in January 2013 for the purpose of establishing and maintaining a Rainy Day Fund for contingencies of an emergency nature; requiring annual reports on such fund balance; providing for the appropriation of such funds to meet emergency needs; and requiring surplus revenues be used to maintain the Rainy Day Fund at a set minimum amount. Beginning in fiscal year 2017, County Ordinance No. 16-24 changed the minimum amount of the rainy

day fund to 8% (previously 7%) of the following year’s budgeted general fund operating revenues, as recommended by the Spending Affordability Committee. The County funded the Rainy Day Fund with the required amount of $14,511,971 in fiscal year 2023.

Revenue Stabilization Fund (Previously “Special Fund”) – Resolution No. 14-05 was adopted in March 2014 for the purpose of establishing and maintaining a Special Fund to set aside certain general funds of the County for certain unanticipated projects, initiatives, and other one-time expenses. Resolution No. 16-99 was adopted in December 2016 for the purpose of renaming the “Special Fund” to the Revenue Stabilization Fund and revising the maximum amount of such fund. The maximum amount of the

Revenue Stabilization Fund shall not exceed 5% of budgeted general fund operating revenues and the transfer to the General Fund shall only be made after the requirements of the Rainy Day Fund have been met. The County funded the Revenue Stabilization Fund with $717,872 in fiscal year 2023. The current balance of the Revenue Stabilization Fund is $9,069,982.

Spending Affordability Committee – Ordinance No. 15-11 was adopted in November 2015 for the purpose of establishing a committee to provide recommendations and projections for the upcoming budget year. Specifically, the Committee is charged to review in detail the status and projections of revenues and expenditures for the County for the next budget year and subsequent five years; to review future County revenue levels and consider the impact of economic factors such as changes in personal income

and assessable base growth; and to review future expenditure levels with consideration of County long-term obligations and any pressure for growth in costs.

The Committee’s recommendations help determine general expenditure guidelines based on projected revenue, and the amount of new County debt authorization for the upcoming fiscal year. The Committee recommends policy changes primarily regarding budgeting, debt, and fund balance. This Committee also assesses the County’s ability to repay bond debt, determines debt capacity using several debt measures, and provides general guidance regarding future capital budgets.

Capital Projects - The County Commissioners’ six-year capital program, starting with fiscal year 2024, prioritizes capital expenditures over these years to meet the County’s needs. The six-year program totals $319.6 million and includes: $60.0 million for various school related projects (includes $23.5 million for Centreville Middle School and $17.5 million for the board administration building); $59.0 million for Roads Board capital projects (includes $15.2 million for asphalt overlays and $15.0

million for pedestrian bridge crossing US 50/301); $42.0 million for various Sanitary District projects (includes the Southern Kent Island Sewer service at $20.0 million); $34.4 million for the Detention Center renovation; $30.0 million for Parks (includes $10.6 million for trail maintenance/amenities and $5.4 million for phase two of the Cross County Connector project); $22.3 million for Administration and General Services (includes $9.0 million for the Historic Courthouse); $11.5 million for Department of

Emergency Services; and $10.1 million for the Recreation Center.

FINANCIAL POLICIES

Bond Ratings - The financial policies and management practices of Queen Anne’s County were recognized by three major rating agencies. Fitch Rating Service issued a AAA bond rating, Moody’s issued a rating of Aa1, and Standard & Poor’s also issued a AAA rating.

Debt Management Policy – In calendar year 2013, the County adopted Resolution 13-04, which revised the County’s Local Debt Policy. In accordance with this policy, the Director of Budget and Finance, is responsible for following certain procedures to ensure that debt limits established by the Policy are not exceeded. A key element of the Policy is that prior to the issuance of any new bonded indebtedness, the Director must certify that existing and new General Obligation Debt will not exceed (1) 2.5% of

the total taxable assessable base and (2) $3,000 per capita. This policy also stipulates that although there is some flexibility as to the acceptable percentage of debt service to general fund expenditures, and no absolute limit has been established by the rating agencies or the Government Finance Officers Association, anything above 12% of total general fund expenditures would be a cause to carefully monitor debt service. In addition to the debt management policy, the Spending Affordability Committee

recommended that the limit of debt service to general fund expenditures should be limited to 10% and the County Commissioners have adopted that as a limit.

8 For fiscal year 2023, Queen Anne’s County general obligation debt was 1.44% of the total taxable assessable base, and the per capita debt measurement was $2,600. The debt service was 8.4% of the general fund expenditures for the year. All thresholds are well below the policy limits.

Fund Balance Policy – Resolution 12-21 was adopted in calendar year 2012 for the purpose of establishing criteria in which year end fund balances can be used. There are five purposes for which using fund balance is permitted: (1) paygo for items/projects in the County Capital Improvement Plan, (2) as a supplement to the Rainy Day Fund if it is underfunded, (3) to pay down existing debt, (4) reserved for future non-operating expenses related to fiscal emergencies, and (5) as one time non-recurring expenditures

of capital or non-capital items.

AWARDS AND ACKNOWLEDGMENTS

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Queen Anne’s County, Maryland for its annual comprehensive financial report (ACFR) for the fiscal year ended June 30, 2022. The Certificate of Achievement is a prestigious national award that recognizes conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a

Certificate of Achievement, the County must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. Queen Anne’s County, Maryland has received a Certificate of Achievement for the last twenty-four consecutive years (fiscal years 1999-2022). We believe our current annual comprehensive financial report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.

The preparation of the annual comprehensive financial report was made possible by the dedicated service of the entire staff of the finance office. Each member of the department has my sincere appreciation for the contributions made in preparation of this report. Special recognition is given to members of the Audit Team: Justine Franzen, who is the principal staff member responsible for preparing the report, Karen Rodgers, Lisa Taylor, and Hayley Effland. Their dedication and professionalism in the preparation

of Queen Anne’s County financial statements has resulted in consistently accurate and transparent financial reporting.

Respectfully submitted, Jeffrey Rank Director of Budget and Finance 9 10 Queen Anne’s County Government Organizational Chart Queen Anne’s County Voters County State’s Attorney Sheriff’s Office Orphan’s Court Circuit Court Commissioners Boards & County County Attorney Commissions Administrator County Administration Public Works Parks & Recreation Planning & Zoning Community Services Public Safety Budget & Finance Detention Center

Engineering Parks Liquor Board Aging Recreation Human Resources General Services Planning Housing & Emergency Services Community Enterprise Funds Services  EMS Property  Marinas & Economic Zoning / Permits  Communications Development & Management Landings  Fire Marshal  Bay Bridge Local  Support Services Tourism Airport Management  Special Roads  Blue Heron Board Operations Golf Course

- Animal

Information Control Technology & Sanitary District - Emergency Communications Management  Information Technology (IT) Solid Waste Department under State law  GIS – Geographic partially or fully funded by Information County Appropriations

 QACTV

 Public Information Departments and agencies shown to the Board of Education Chesapeake College right are not under the control or supervision of QAC Free Library Board of Elections Queen Anne’s County Government but are Housing Authority partially or fully funded by Health Department County appropriation under State law. University of MD Soil Conservation Service Extension 11

QUEEN ANNE’S COUNTY, MARYLAND

GOVERNMENTAL ORGANIZATION

CERTAIN ELECTED AND OTHER OFFICIALS

AS OF JUNE 30, 2023

CERTAIN ELECTED OFFICIALS

County Commissioners James J. Moran, At Large Jack N. Wilson, Jr., District 1 J. Patrick McLaughlin, District 2 Philip L. Dumenil, District 3 Christopher M. Corchiarino, District 4 State’s Attorney Lance G. Richardson, Esq.

Sheriff Raymond G. Hofmann

CERTAIN DEPARTMENT HEADS AND OTHER OFFICIALS

County Administrator Todd R. Mohn Director of Public Works Alan Quimby, P.E.

Director of Planning and Zoning Amy Moredock Director of Community Services Catherine R. Willis Director of Budget and Finance* Nichole Hepfer Director of IT Brian Riley Chief Treasury Officer Jeffrey Rank County Attorney Patrick E. Thompson, Esq.

Independent Auditor Bond Counsel Financial Advisor UHY LLP McKennon, Shelton Davenport & Company LLC Certified Public Accountants & Henn, LLP Towson, Maryland Salisbury, Maryland Baltimore, Maryland *Effective 7/1/23 Jeffrey Rank replaced Nichole Hepfer as Director of Budget and Finance 12

F S

INANCIAL ECTION

13

INDEPENDENT AUDITORS’ REPORT

County Commissioners of Queen Anne’s County Centreville, Maryland Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the businesstype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Queen Anne’s County, Maryland (the “County”) as of and for the year

ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County, as of June 30, 2023, and the respective changes in financial position, and, where applicable,

cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

We did not audit the financial statements of the Queen Anne’s County Free Library (the “Library”) as of June 30, 2023, and the respective changes in financial position, and where applicable, cash flows thereof for the year then ended. Those statements were audited by other auditors whose report has been furnished to us, and our opinions, insofar as it relates to the amounts included for the Library is based

solely on the report of the other auditors.

Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our

report. We are required to be independent of the County, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter As discussed in Note 1 to the financial statements, the County adopted new accounting guidance GASB No. 96, Subscription-Based Information Technology Arrangements. Additionally, as discussed in Note 22 to the financial statements, The County recorded prior period restatement entries related to lease receivables, accounts receivables, and deferred inflows; for facts that existed at the time the previous

financial statements were prepared. Our opinion is not modified with respect to these matters.

An Independent Member of Urbach Hacker Young International Limited 14 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair

presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the County’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing

standards and Government Auditing Standards will always detect a material misstatement when it exists.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on

the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.

 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control. Accordingly, no such opinion is expressed.

 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the County’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

15 Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information (RSI), as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental

Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of

preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide

any assurance.

Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The other supplementary information (OSI), as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The OSI, as listed in the table of contents is the responsibility of management

and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the

financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the OSI, as listed in the table of contents, is fairly stated, in all material respects in relation to the basic financial statements as a whole.

Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other

information exists, we are required to describe it in our report.

16 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 29, 2024, on our consideration of the County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over

financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County’s internal control over financial reporting and compliance.

Salisbury, Maryland February 29, 2024 17 Management’s Discussion and Analysis Introduction This section of the Annual Comprehensive Financial Report of Queen Anne’s County, Maryland (the County) presents a narrative overview and analysis of the financial activities of Queen Anne’s County Government for the fiscal year ended June 30, 2023. We encourage readers to consider the discussion and analysis along with

the other information in this report, including the transmittal letter, basic financial statements, and the notes to the financial statements.

Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to Queen Anne’s County Government’s basic financial statements. The County’s basic financial statements are comprised of three components:

Government-Wide Financial Statements Fund Financial Statements Notes to the Financial Statements This report also contains other required and non-required supplementary information in addition to the basic financial statements themselves.

Government-Wide financial statements: The government-wide financial statements are designed to provide readers with a broad overview of Queen Anne’s County Government’s finances, in a manner comparable to a private sector business.

The statement of net position presents information on all of Queen Anne’s County Government’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position and condition of Queen Anne’s County Government is improving or declining.

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes

and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of Queen Anne’s County Government that are principally supported by taxes and intergovernmental revenue (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities).

The governmental activities of Queen Anne’s County Government include general government, public safety, public works, health, social services, education, library, conservation of natural resources, and economic and community development. The business-type activities of Queen Anne’s County Government include water and sewer services, an airport, a golf course, and public landings and marinas.

The government-wide financial statements include not only Queen Anne’s County Government itself (known as the primary government), but also legally separate component units. Queen Anne’s County Government has the following discretely presented component units: Queen Anne’s County Board of Education and the Queen Anne’s County Free Library. Financial information for these component units is reported separately from the

financial information presented for the primary government itself. The government-wide financial statements can be found in the basic financial statements section of this report.

18 Fund Financial Statements: A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Queen Anne’s County Government, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of Queen Anne’s County Government can be divided into three categories:

governmental funds, proprietary funds, and fiduciary funds. Fund financial statements can be found throughout this report, as listed in the table of contents.

Governmental funds: Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near term inflows and outflows of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a

government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the balance sheet and

the statement of revenues, expenditures, and changes in fund balances for governmental funds provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These two reconciliations begin with governmental fund financial data; describe all transactions that are added or subtracted to yield governmental activities; and end with governmental activities financial data. These reconciliations can

be found within this report, as listed in the table of contents.

Queen Anne’s County maintains three types of governmental funds: the general fund, a variety of special revenue funds, and five capital project funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for all governmental funds. Fund type is identified for each fund.

Queen Anne’s County adopts an annual appropriated budget for its general fund; school, fire, and parks impact fee capital projects funds; and the following special revenue funds: department of aging, housing and community services, grants fund, economic development incentive, roads operating fund, community partnerships for children, law library, inmate welfare, agricultural transfer, rural legacy, dredging special assessments, and Kent

Narrows. A budgetary comparison statement has been provided for each of these funds, which can be found within this report, as listed in the table of contents.

Proprietary funds: Queen Anne’s County maintains enterprise funds to report the same functions presented as business-type activities in the government-wide financial statements. Queen Anne’s County Government uses enterprise funds to account for its water and sewer services, airport, golf course, and public landings and marinas.

The basic proprietary fund financial statements can be found within this report, as listed in the table of contents.

Fiduciary funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support Queen Anne’s County Government’s own programs. The County acts as a fiduciary for two trust and six custodial funds. The accounting used for fiduciary funds is much

like that used for proprietary funds except that the custodial funds report only assets and liabilities and do not report net assets or changes therein. The basic fiduciary fund financial statements can be found within this report, as listed in the table of contents.

Notes to the financial statements: The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found within this report, as listed in the table of contents.

19 Government-wide Financial Analysis Statement of Net Position A summary of government-wide assets, liabilities, and net position is as follows:

Governmental Activities Business-Type Activities Total 2023 2022 2023 2022 2023 2022 Current and Other Assets $ 223,507,249 $ 201,881,441 $ 65,914,665 $ 63,702,006 $ 289,421,914 $ 265,583,447 Capital Assets 195,514,937 190,874,807 136,788,646 129,251,754 332,303,583 320,126,561 Total Assets 419,022,186 392,756,248 202,703,311 192,953,760 621,725,497 585,710,008 Total deferred Outflows of resources 16,533,659 18,706,064 1,445,535 1,651,620 17,979,194 20,357,684

Noncurrent liabilities 205,417,418 216,868,181 46,777,229 45,442,547 252,194,647 262,310,728 Other Liabilities 21,139,189 14,383,748 2,226,209 1,381,610 23,365,398 15,765,358 Total Liabilities 226,556,607 231,251,929 49,003,438 46,824,157 275,560,045 278,076,086 Total deferred Inflows of resources 23,915,715 25,652,222 20,368,980 19,951,605 44,284,695 45,603,827 Net investment in capital assets 122,128,900 118,666,142 99,118,189 93,562,741 221,247,089 212,228,883

Restricted amounts 26,495,556 24,012,709 5,350,538 5,310,698 31,846,094 29,323,407 Unrestricted amounts (deficit) 36,459,067 11,879,310 30,307,701 28,956,179 66,766,768 40,835,489 Total net position $ 185,083,523 $ 154,558,161 $ 134,776,428 $ 127,829,618 $ 319,859,951 $ 282,387,779 The County’s total current and other assets increased by $23.8 million, or 9.0 percent, to $289.4 million. The County’s total assets and deferred outflows of resources exceeded its total liabilities and deferred inflows of

resources at the close of fiscal year 2023 by $319.9 million.

Net position is divided into three categories: net investment in capital assets; restricted amounts; and unrestricted amounts. By far the largest portion, $221.2 million, of the County’s total net position reflects its investment in capital assets (e.g. land, buildings, machinery and equipment, vehicles, and infrastructure), less any related and outstanding debt used to construct or acquire those assets. The County uses these capital assets to provide

services to citizens; consequently, they are not available for future spending. Although the County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities.

It is important to note that, although counties in the State of Maryland issue debt for the construction of schools, the school buildings are owned by each county’s Board of Education. Ownership reverts to the county government only if the local Board determines a building is no longer needed for educational purposes.

Therefore, while the County’s financial statements include outstanding debt related to Board of Education capital assets, those statements do not include the capital assets funded by the debt. Debt outstanding for the Board of Education amounted to $48.2 million at June 30, 2023. Absent the effect of this relationship, the County would have reported a positive unrestricted amount of $115.0 million on its government-wide financial statements,

rather than the positive unrestricted net assets of $66.8 million reported herein. For a multi-year view of this calculation, see the Footnote presented in Table 1 of the Statistical Section.

An additional $31.8 million of the County’s total net position represents resources that are subject to restrictions on how they may be used. For governmental activities, this amount includes: $15.0 million related to general government services; $3.0 million for economic/community development; $5.7 million for public safety; and $2.8 million for conservation of natural resources. For business-type activities, this amount includes $2.6 million

restricted to meet Sanitary District debt covenants; $1.2 million for the Bay Bridge Airport debt service; and $1.5 million restricted for other purposes for the Bay Bridge Airport.

At the end of the current fiscal year, Queen Anne’s County Government reports positive balances for all three categories of net position: governmental activities, business-type activities and for the government as a whole.

20 Statement of Activities The following table summarizes changes in net position for governmental and business-type activities during the year:

Governmental Activities Business-Type Activities Total 2023 2022 2023 2022 2023 2022 Program revenues:

Charges for services $ 9,065,778 $ 10,490,544 $ 13,436,000 $ 19,228,797 $ 22,501,778 $ 29,719,341 Operating grants and contributions 8,232,618 9,381,209 2,955,567 2,023,287 11,188,185 11,404,496 Capital grants and contributions 6,657,301 7,246,021 4,027,234 3,034,541 10,684,535 10,280,562 General revenues:

Property taxes 78,022,772 76,017,204 - - 78,022,772 76,017,204 Local income tax 83,439,604 78,881,170 - - 83,439,604 78,881,170 Other local taxes Admission and amusement taxes 248,987 247,533 - - 248,987 247,533 Recordation taxes 8,921,379 10,243,655 - - 8,921,379 10,243,655 Hotel taxes 991,022 849,345 - - 991,022 849,345 County transfer taxes 3,046,615 3,824,021 - - 3,046,615 3,824,021 State Shared Taxes 1,352,592 1,692,747 - - 1,352,592 1,692,747

Investment income 6,448,944 462,588 1,047,564 414,822 7,496,508 877,410 Gain (loss) on sale of capital assets - (1,157,005) 2,561 5,265 2,561 (1,151,740) Miscellaneous 1,628,246 1,801,868 1,224,908 2,519,132 2,853,154 4,321,000 Total Revenues 208,055,858 199,980,900 22,693,834 27,225,844 230,749,692 227,206,744 Governmental Activities:

General government 21,070,854 20,975,854 - - 21,070,854 20,975,854 Public safety 42,482,230 32,937,936 - - 42,482,230 32,937,936 Public works 19,422,823 15,486,633 - - 19,422,823 15,486,633 Parks & recreation 6,338,014 6,445,776 - - 6,338,014 6,445,776 Health & Social Services 7,219,183 6,631,472 - - 7,219,183 6,631,472 Education & Library 69,770,287 68,957,650 - - 69,770,287 68,957,650 Conservation of natural resources 3,386,538 2,402,429 - - 3,386,538 2,402,429

Economic and Community development 2,798,777 3,012,720 - - 2,798,777 3,012,720 Interest and fiscal charges 4,525,460 4,415,584 - - 4,525,460 4,415,584 Business-type Activities:

Water and sewer - - 13,822,527 12,384,820 13,822,527 12,384,820 Airport - - 1,058,318 1,017,606 1,058,318 1,017,606 Golf course - - 697,824 609,737 697,824 609,737 Public landings and marinas - - 684,685 548,928 684,685 548,928 Total Expenses 177,014,166 161,266,054 16,263,354 14,561,091 193,277,520 175,827,145 Increase in Net Position before Transfers 31,041,692 38,714,846 6,430,480 12,664,753 37,472,172 51,379,599

Transfers in (out) (516,330) (1,188,709) 516,330 1,188,709 - - Increase in Net Position 30,525,362 37,526,137 6,946,810 13,853,462 37,472,172 51,379,599 Net Position, prior year 154,558,161 117,032,024 127,829,618 113,976,156 282,387,779 231,008,180 Net Position - current year $ 185,083,523 $ 154,558,161 $ 134,776,428 $ 127,829,618 $ 319,859,951 $ 282,387,779 21 Governmental activities:

Revenues for governmental activities were $208.1 million for fiscal year 2023. The following chart depicts revenues by source for governmental activities:

 Taxes comprise the largest source of County revenue, totaling $176.0 million (84.6 percent) of total revenue for fiscal year 2023. Of that amount, property and local income tax together yielded $161.5 million (77.6 percent) of all revenue. Each County sets its own property and income tax rates, within parameters established by the State. For fiscal year 2023, the County’s property tax rate decreased to

$.830 per $100 of assessed value of real property, based on full cash value of that property. The County’s local income tax rate was set at 3.2 percent, effective January 1, 2012 and thereafter. There is no local sales tax in the State of Maryland.

 Operating grants and contributions, totaling $8.2 million, reflect grants from Federal and State agencies that support specific County programs. Programs that benefitted the most were: public safety ($3.6 million or 43.7 percent), health and social services ($3.1 million or 37.2 percent), and economic/community development ($1.3 million or 15.6 percent).

 Charges for services, totaling $9.1 million, reflect fees charged to County citizens. These primarily support education and library ($2.2 million or 24.7 percent), general government ($2.0 million or 22.5 percent), public safety ($1.9 million or 21.1 percent), parks and recreation ($1.1 million or 12.2 percent), and public works ($961 thousand or 10.6 percent).

 Capital grants and contributions, totaling $6.7 million, reflect contributions from Federal and State agencies, as well as developers. Programs that benefitted the most were: conservation of natural resources ($2.0 million or 30.2 percent), general government ($1.5 million or 23.3 percent), public works ($1.1 million or 16.8 percent), and education and library ($980 thousand or 14.7 percent).

22 Expenses for all governmental activities were $177.0 million for fiscal year 2023. The following chart depicts expenses by function for governmental activities:

Expenses ‐ Governmental Activities For the Year Ended June 30, 2023 Interest and fiscal Economic and charges Community 2.56% development 1.58% Conservation of General government natural resources 11.9% 1.91% Public safety 24.00% Education & Library 39.42% Public works 10.97% Health & Social Parks & recreation Services 3.58% 4.08% As noted in the chart above and the table below, by far the County’s largest program and highest priority is

education, with expenses totaling $69.8 million (39.4 percent). The following table summarizes costs and program-related revenues for the same programs in order of priority, yielding net service costs:

Expenses Program-Related Revenues Net Cost of Services Net Cost of Governmental Activities 2023 2022 2023 2022 2023 2022 Education and Library $ 69,770,287 $ 68,957,650 $ 3,217,120 $ 4,289,583 $ (66,553,167) $ (64,668,067) Public safety 42,482,230 32,937,936 5,673,779 5,991,282 (36,808,451) (26,946,654) Public works 19,422,823 15,486,633 2,090,244 1,142,909 (17,332,579) (14,343,724) General government 21,070,854 20,975,854 3,836,276 6,540,300 (17,234,578) (14,435,554)

Parks & recreation 6,338,014 6,445,776 1,768,302 3,146,417 (4,569,712) (3,299,359) Health & Social Services 7,219,183 6,631,472 3,333,514 2,894,945 (3,885,669) (3,736,527) Conservation of natural resources 3,386,538 2,402,429 2,083,924 1,142,251 (1,302,614) (1,260,178) Economic and Community development 2,798,777 3,012,720 1,906,414 1,921,581 (892,363) (1,091,139) Interest and fiscal charges 4,525,460 4,415,584 46,124 48,506 (4,479,336) (4,367,078)

Total $ 177,014,166 $ 161,266,054 $ 23,955,697 $ 27,117,774 $ (153,058,469) $ (134,148,280) Of the total cost of $177.0 million for governmental activities, $24.0 million (13.5 percent), of those costs were covered by program-related revenues paid by individuals and external governmental entities. Of these outside entities, individuals who benefited directly from County programs were charged user fees of $9.1 million, while

governments and other organizations that benefited indirectly from these programs contributed operating grants of $8.2 million and capital grants of $6.7 million.

County taxpayers paid for most of the remaining $153.1 million in net program costs, through a variety of County taxes. Net program costs of services provided to the public, in order of net cost, were: $66.6 million for education and library; $36.8 million for public safety; $17.3 million for public works; $17.2 million for general government; $4.6 million for parks and recreation; $3.9 million for health and social services; $1.3

million for conservation of natural resources; $892 thousand for economic and community development; and $4.5 million for interest and fiscal charges. See Changes in Net Position and General Fund Budgetary Highlights for further details.

23 Changes in net position: Government-wide revenues, less expenses, plus/minus transfers in/out, yield changes in net position. During fiscal year 2023, governmental activities increased the County’s net position overall by $30.5 million, compared to an increase of $37.5 million in fiscal year 2022. The following discussion explains changes in net position relative to the prior fiscal year.

Revenues for governmental activities increased by $8.1 million (4.0 percent). The following key revenues changed, when compared to the prior fiscal year:

 Income taxes increased by $4.6 million (5.8 percent), from $78.9 million in fiscal year 2022 to $83.4 million in fiscal year 2023. This increase was the result of increased receipts from the State for the County’s portion of the income tax collections, capital gains and wage increases.

 Property taxes increased by $2.0 million (2.6 percent), from $76.0 million in fiscal year 2022 to $78.0 million in fiscal year 2023 due to an increase in property assessments.

 Charges for services decreased by $1.4 million (13.6 percent), from $10.5 million in fiscal year 2022 to $9.1 million in fiscal year 2023. Public safety fees decreased by $516 thousand resulting from additional fees received in fiscal year 2022 for the EMS Supplemental Payment Program Audit which were not received in fiscal year 2023. Housing fees collected for fee in lieu decreased by $222 thousand and

school impact fees also decreased by $201 thousand which are directly related to housing development.

 County recordation taxes decreased $1.3 million (12.9 percent), from $10.2 million in fiscal year 2022 to $8.9 million in fiscal year 2023. This decrease is a result of increased interest rates, low housing inventory, and overall decrease in home sales.

 Investment income increased by $6.0 million (1294.1 percent), from $463 thousand in fiscal year 2022 to $6.4 million in fiscal year 2023. This increase was a result of substantially higher than normal interest rates.

Expenses for governmental activities increased by $15.7 million (9.8 percent). Key positive and negative expense changes, in order of relative importance, are:

 Public Safety increased by $9.5 million (29.0 percent). $5.6 million of this increase is due to the pension adjustments for GASB 68. The remaining increase was in various departments throughout the county.

 Public Works increased by $3.9 million (25.4 percent). $2.5 million of this increase was general capital projects for building of the YMCA, $1.7 million of this increase was roads capital projects in the asphalt project, which varies due to timing of the road maintenance. The remaining decreases/increases were in various department throughout the county.

 Conservation of Natural Resources increased by $984 thousand (41.0 percent), due to the increase of rural legacy easements. Generally, the timing of easements purchased is affected by the evaluation of the identified land, as well as the availability of State funds.

24 Business-type activities:

Revenues, transfers in, and expenses for business-type activities were $22.7 million, $516 thousand, and $16.3 million, respectively, for fiscal year 2023. The following two charts depict revenues by source and expenses by service for business-type activities:

Business-type activities increased the County’s net position altogether by $6.9 million in fiscal year 2023, which is $6.9 million less than the prior year’s increase of $13.9 million. The fiscal year 2023 change in net position resulted primarily from:

 Operating Revenues before transfers decreased by $4.5 million (16.6 percent), from $27.2 million in fiscal year 2022 to $22.7 million in fiscal year 2023, for all business-type activities. Charges for services decreased by $5.8 million mainly due to a decrease in sanitary restricted fund PWA sales. Operating grants and contributions increased by $932 thousand, mainly due to increased state grant funding in the

Sanitary district. Capital grants and contributions increased by $993 thousand, due to increase in developer contributions for Sanitary projects.

 Operating Expenses increased by $1.7 million (11.7 percent), from $14.6 million in fiscal year 2022 to $16.3 million in fiscal year 2023, for all business-type activities. Water and sewer services makes up the main reason for the increase due to Sanitary District SKI development phase 2.

25 Financial Analysis of the Government’s Funds As noted earlier, Queen Anne’s County Government uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Detailed financial data based on the government’s fund accounting can be found in the governmental fund statements in this report.

Governmental Funds: The focus of Queen Anne’s County Government’s governmental funds is to provide information on near term inflows, outflows, and balances of spendable resources. Such information is useful in assessing Queen Anne’s County Government’s near-term financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of a

fiscal year.

As of the end of the current fiscal year, Queen Anne’s County Government’s governmental funds reported combined ending fund balances of $166.0 million, compared to $154.6 million for the prior year. Approximately 23.8 percent of this total ($39.5 million) constitutes unassigned fund balance, which is available for spending.

The total unassigned fund balance of $39.5 million is comprised of $39.5 million of positive unassigned fund balance for the general fund.

The nonspendable fund balance of $1.5 million which is not available for spending and includes amounts related to inventory and prepaid items. Restricted fund balance of $37.6 million (22.7 percent) includes amounts that can be spent only for specific purposes stipulated by external sources or legal restrictions. Included in the restricted fund balance is $14.5 million for the rainy day fund.

Committed fund balance of $38.1 million (22.9 percent) represents those amounts that can be used only for the specific purposes of the government’s highest level of decision-making authority. Included in the committed fund balance is $9.1 million for the revenue stabilization fund.

The remaining $49.4 million of fund balance (29.7 percent) constitutes assigned fund balances. These amounts are intended to be used by the government for the specific purposes of each fund.

The General Fund is the chief operating fund of Queen Anne’s County Government. At the end of the current fiscal year, the General Fund had a total fund balance of $68.8 million, which is an increase of $8.8 million (14.7 percent) from the fiscal year 2022 balance of $59.9 million. Of the $8.8 million increase, local property tax increased by $2.1 million (2.8 percent) as a result of increased property assessment. Also local income tax

increased $8.5 million (11.9 percent) due to increases in wage rates and capital gains.

Of the total $68.8 million in fund balance, $39.5 million is unassigned, meaning that there are no constraints on how the funds can be spent. Beginning in fiscal year 2017, County Ordinance No. 16-24 changed the minimum amount of the rainy day fund to 8.0 percent (previously 7.0 percent) of budgeted general fund operating revenues as recommended by the Spending Affordability Committee. As a result of that Ordinance, $14.5 million of rainy

day funds are included in the General Fund’s restricted fund balance of $20.0 million for fiscal year 2023. The remaining fund balance is comprised of $243 thousand in nonspendable, and $9.1 million in committed.

For further explanations of General Fund revenues and expenditures, see the General Fund Budgetary Highlights section of this MD&A.

The General Capital Projects Fund accounts for all capital projects related to governmental funds, except those accounted for in the Roads Capital Projects Fund, which is discussed below.

As of June 30, 2023, the General Capital Projects Fund has a total fund balance of $61.3 million, compared to $58.7 million at the end of the prior fiscal year. The $61.3 million in total fund balance is comprised of $11.4 million in restricted fund balance, mainly for unspent bond proceeds, $5.8 million of fund balance committed for specific projects, and $44.1 million of assigned fund balance. The increase in General Capital Projects fund

balance resulted from the transfer in from the General Fund, which will be used to fund future capital projects.

26 The Roads Capital Projects Fund accounts for financial resources used for the construction of County Road infrastructure, as well as other large multi-year projects that relate to capital assets.

As of June 30, 2023, the Roads Capital Projects Fund has a total fund balance of $5.4 million, compared to $6.1 million at the end of the prior fiscal year. Of this total $5.4 million fund balance, $4.5 million has been assigned to fund ongoing projects, while $909 thousand has been contributed by local developers and is committed to fund specific infrastructure improvements.

The Grants Fund accounts for activities funded by grants and is included in various governmental functions, depending on the grant.

As of June 30, 2023, the Grants Fund has a total fund balance $0 due to the constraints of grant funding, all grant revenue must be expensed within the fiscal year.

Proprietary funds: Queen Anne’s County Government’s enterprise fund statements provide the same type of information found in the government-wide financial statements, but in more detail. Also, due to/due from other funds are combined in the government-wide statements and reported as Internal Balances between governmental and business-type activities, which net to zero.

Total unrestricted net position of the Sanitary District Enterprise Funds at the end of fiscal year 2023 amounted to $31.2 million, which is an increase of $1.1 million compared to the prior year. Net investment in capital assets also increased by $4.8 million.

Total net position of the Sanitary District amounted to $110.9 million at the end of fiscal year 2023, which increased by $5.5 million when compared to the prior year.

The unrestricted net position of the Bay Bridge Airport Enterprise Fund at year end amounted to negative $943 thousand, reflecting a decrease of $244 thousand. The investment in capital assets for the Bay Bridge Airport increased by $196 thousand in the current fiscal year.

Total net position of the Bay Bridge Airport amounted to $16.1 million at the end of fiscal year 2023, which is an increase of $433 thousand from the prior year amount of $15.7 million.

A discussion of Enterprise Fund capital assets and long-term debt can be found in those sections presented later in this MD&A.

General Fund Budgetary Comparisons The County adopts an operating budget for the General Fund as of July 1 each year and amends that budget throughout the year in response to actual expenditures. The Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual can be found as part of Required Supplemental Information, which is located after the Notes. The Schedule reports original and final budgets, as well as the variance between actual

expenditures and final budgets.

Original to Final Budget Comparisons: The final expenditure budget for the General Fund, including transfers out, totaled $186.6 million. Amendments increased spending authority by $15.2 million during fiscal year 2023, when compared to the original budget of $171.4 million.

Major components of these expenditure budget increases are as follows:

 Budgeted Transfers Out to General Capital Projects increased by $11 million from the original budget during the year. There are several capital projects in which the County plans to move aggressively on and will rely on fund balance available in the General Capital Projects fund to cover a portion of the costs.

27  Budgeted Transfers Out to Roads Operating Fund increased by $4.7 million from the original budget, as roads operating is now a separate fund and was previously accounted for in the general fund.

 Budgeted Transfers Out to the Agricultural Transfer Tax Fund increased by $978 thousand from the original budget, resulting from additional easements available and purchased during the fiscal year.

Budget to Actual Comparisons: Actual revenues for the General Fund, including other financing sources and before appropriated fund balance were more than final budgetary estimates by $6.4 million.

Actual expenditures, and other financing uses, were less than final budgetary appropriations by $5.9 million.

The net effect of these two disparities was a positive variance of actual to final budget of $12.3 million.

The most noteworthy differences between final budgeted amounts and actual amounts are summarized as follows:

Revenues:

 Investment Income revenue was $3.5 million more than the final budget (254.6 percent) due to the increase in interest rates.

 Local Property Tax revenue was $2.4 million more than the final budget (3.2 percent) due to a higher than anticipated increase in assessments.

Expenditures:

 Final Budgeted Salaries and Benefits were $47.1 million for the year, while actual costs were $46.4 million. They were underspent at year-end by $797 thousand (1.7 percent). Budgeted salaries and benefits include reversions of $1.4 million. Absent the budget for reversions, actual costs were $2.2 million less than budget. The savings were recognized in multiple departments due to vacant positions.

 Final Budgeted Other Operating Charges were $139.5 million for the year, while actual costs were $134.4 million. These costs were lower than budget at year end by $5.0 million (3.6 percent). Operating Charges include contracted services, supplies, other charges, debt service, and transfers out.

o Transfers Out was underspent by $2.3 million, due to savings realized by Roads ($1.1 million) the Department of Aging ($890 thousand), Golf Course Enterprise Fund ($175 thousand), and Housing and Community Services ($107 thousand) which allowed these departments to forgo this portion of their appropriation.

o Other Operating Expenses were underspent by $1.9 million. Savings were realized in Insurance ($540 thousand), OPEB ($539 thousand), Other Charges ($469 Thousand), and Local Allocation ($350 thousand). The remaining savings for Other Operating Expenses were spread throughout the General Fund.

o Contracted Services were underspent by $651 thousand, with the largest savings realized by Detention Center ($277 thousand), Elections ($274 thousand), and Information Technology ($78 thousand).

o Capital Outlay was underspent by $344 thousand, with the largest savings realized by Non- Departmental ($135 thousand) and Detention Center ($122 thousand).

28 Capital Assets and Debt Administration Capital assets: Queen Anne’s County Government’s investment in capital assets for its governmental and business-type activities as of June 30, 2023 amounted to $332.3 million (net of accumulated depreciation). This investment in capital assets includes land and land improvements, intangible rights, construction in progress, buildings, improvements other than buildings, infrastructure, autos, machinery, and equipment. The total

increase in the County’s investment in capital assets for the current fiscal year was $12.2 million or 3.8%.

Capital asset activities, net of depreciation, are summarized as follows:

Governmental Activities Business-Type Activities Total 2023 2022 2023 2022 2023 2022 Land and Land Improvements $ 86,490,462 $ 86,279,799 $ 13,406,924 $ 13,406,924 $ 99,897,386 $ 99,686,723 Intangible Rights - Easements 821,819 821,819 6,140 6,140 827,959 827,959 Construction in Progress 11,539,664 9,943,879 8,202,979 4,033,099 19,742,643 13,976,978 Buildings 50,303,760 51,766,249 5,244,516 5,506,926 55,548,276 57,273,175

Improvements other than Buildings 15,432,697 12,824,824 9,187,831 7,969,267 24,620,528 20,794,091 Infrastructure 8,252,526 8,462,691 92,068,461 89,512,819 100,320,987 97,975,510 Auto, machinery, and equipment 20,911,398 20,775,546 8,527,421 8,781,241 29,438,819 29,556,787 Right-to-use asset 570,845 - 144,374 35,338 715,219 35,338 Subscription asset 1,191,766 - - - 1,191,766 - Total $ 195,514,937 $ 190,874,807 $ 136,788,646 $ 129,251,754 $ 332,303,583 $ 320,126,561

Noteworthy capital asset events during the current fiscal year for governmental activities included the following:

o Installation of artificial turf at various parks totaling $3.0 million.

o Replacement of departmental vehicles totaling $2.0 million.

o Equipment replacement totaling $1.8 million.

Noteworthy capital asset events during the current fiscal year for business-type activities included the following:

o Completion of Sanitary district infrastructure projects totaling $5.2 million, of which $4.0 million was contributed by commercial developers to be maintained by the County.

o Renovation of front nine greens at Blue Heron Golf Course totaling $484 thousand.

Additional information on the County’s capital assets can be found in Note 6 of this report.

Long-term debt: At the end of the current fiscal year, Queen Anne’s County Government had total bonded debt, loans, OPEB (Other Post-Employment Benefits), net pension liability, LOSAP (Volunteer Fireman Pension Plan Length of Service Award Program), compensated absence obligations, lease obligations, and subscription obligations of $252.2 million for its governmental and business-type activities.

The full faith, credit and unlimited taxing power of the County are irrevocably pledged to the levy and collection of taxes in order to provide for the payment of principal and interest due on the bonded debt.

Of this $252.2 million in debt, $46.8 million is considered to be self-supporting, in that obligations of the County’s enterprise funds will be funded through charges and assessments related to the operations of those funds. In addition, the Sanitary District’s Debt Service Fund holds total assets of $2.6 million, which are restricted to payment of the Sanitary District’s subsequent year’s debt. See Note 12 for restricted assets and

subsequent year debt service obligations.

29 Debt activities are summarized as follows:

Governmental Activities Business-Type Activities Total 2023 2022 2023 2022 2023 2022 Bonds, Notes, and Premiums $ 132,859,793 $ 142,796,926 $ 37,528,938 $ 35,653,564 $ 170,388,731 $ 178,450,490

OPEB 26,810,247 36,268,523 5,854,976 7,052,186 32,665,223 43,320,709

Net Pension Liability 32,570,299 24,007,806 2,690,703 2,176,280 35,261,002 26,184,086 LOSAP Liability 7,757,868 10,267,761 - - 7,757,868 10,267,761 Compensated Absences 3,625,663 3,527,165 558,231 521,292 4,183,894 4,048,457 Lease Liability 614,668 - 144,381 39,225 759,049 39,225 Subscription Liability 1,178,880 - - - 1,178,880 - Total Noncurrent liabilities $ 205,417,418 $ 216,868,181 $ 46,777,229 $ 45,442,547 $ 252,194,647 $ 262,310,728

During the 2023 fiscal year, the County’s total net debt decreased by $10.1 million (3.9 percent). Of this amount, governmental debt decreased by $11.5 million (5.3 percent), while business-type debt increased by $1.3 million (2.9 percent). In fiscal year 2022, the Sanitary District continued borrowing funds through the Maryland Water Quality Administration for the Southern Kent Island (SKI) project. The total amount borrowed for this project

in fiscal year 2023 was $3.9 million. In addition, the total other post-employment benefit obligations decreased by $10.7 million, the net pension liability increased by $9.1 million, the LOSAP liability decreased by $2.5 million, and compensated absences increased by $135 thousand. Increases also occurred in both lease ($720 thousand) and subscription liabilities ($1.2 million) due to new GASB standards. Offsetting these increases

and decreases were changes in accruals, plus the County’s repayment of existing debt in accordance with established repayment schedules for bonds, notes, and capital lease agreements.

Additional information on the County’s long-term debt can be found in Note 9 of this report.

The public local laws of Queen Anne’s County limit the amount of general obligation debt to no more than $8.0 million, beyond any bonded indebtedness of the County. Currently, approximately $7.5 million of this authority is available. All other debt has been authorized under specific legislation. Additional information on the computation of the legal debt margin can be found in Table 12 of the Statistical Section of this report.

Economic Factors and Next Year’s Budget and Rates The following economic factors were considered in preparing Queen Anne’s County Government’s operating and capital budgets for the 2024 fiscal year:

 Net assessable real property base is projected to increase by 4.5 percent over the previous year, based on State Assessment Office values used to compute the Constant Yield rate.

 Income tax revenue was projected at $80.3 million for the 2024 budget.

The following are a few of the highlights from the fiscal year 2024 budget:

o OPEB shall continue to be funded in accordance with the approved ten-year plan;

o The Board of Education will be funded above Maintenance of Effort in fiscal year 2024;

o The County’s property tax rates remained the same; and o The County’s income tax rates remained the same.

30 Requests for information This financial report is designed to provide a general overview of Queen Anne’s County Government’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Queen Anne’s County Finance Office, 107 N. Liberty Street, Centreville, Maryland 21617. This report can also be found on the County’s

website, http://www.qac.org (see Government, Departments, Budget and Finance Accounting section, Link to 2023 Annual Comprehensive Financial Report (ACFR)).

31 32

B F S

ASIC INANCIAL TATEMENTS

33

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF NET POSITION

June 30, 2023

PRIMARY GOVERNMENT

GOVERNMENTAL BUSINESS-TYPE

ACTIVITIES ACTIVITIES TOTAL

ASSETS

Equity in Pooled Cash and Investments $ 140,924,891 $ 16,525,429 $ 157,450,320 Cash and Cash Equivalents - - - Taxes Receivable (Net) 820,384 - 820,384 Accounts and Loans Receivable (Net) 7,307,338 790,241 8,097,579 Special Assessments (Net) 635,230 - 635,230 Lease receivable 1,103,690 1,575,326 2,679,016 Internal Balances 1,229,264 (1,229,264) - Due from Primary Government - - - Due from Other Governments 46,200,713 550,013 46,750,726

Inventories 1,274,659 832,461 2,107,120 Prepaid Items 197,921 - 197,921 Endowment Fund - - - Restricted Assets:

LOSAP Plan Assets 5,334,870 - 5,334,870 Equity in Pooled Cash and Investments 18,478,289 26,467,061 44,945,350 Accounts Receivable (Net) - 3,970,000 3,970,000 Special Assessments Receivable (Net) - 16,433,398 16,433,398 Capital Assets:

Nondepreciable Assets 98,851,945 21,616,043 120,467,988 Depreciable and Amortized Assets, Net 96,662,992 115,172,603 211,835,595 Total Assets 419,022,186 202,703,311 621,725,497

DEFERRED OUTFLOWS OF RESOURCES

OPEB 1,383,530 214,162 1,597,692

Pension Benefits 13,077,386 1,226,656 14,304,042 LOSAP Benefits 1,745,381 - 1,745,381 Deferred Charge on Refunding 327,362 4,717 332,079 Total Deferred Outflows of Resources 16,533,659 1,445,535 17,979,194

LIABILITIES

Accounts Payable and Other Current Liabilities 8,768,008 1,589,937 10,357,945 Accrued Interest Payable 2,141,165 147,093 2,288,258 Due to Component Units 160,929 - 160,929 Due to Other Governmental Agencies 316,132 - 316,132 Unearned Revenue 9,752,955 469,679 10,222,634 Escrow Deposits - 19,500 19,500 Noncurrent Liabilities:

Due within One Year 12,143,635 2,677,662 14,821,297 Due in More than One Year 193,273,783 44,099,567 237,373,350 Total Liabilities 226,556,607 49,003,438 275,560,045

DEFERRED INFLOWS OF RESOURCES

OPEB 14,275,412 1,883,817 16,159,229

Pension Benefits 4,444,722 499,878 4,944,600 LOSAP Benefits 3,223,831 - 3,223,831 Lease receivable 1,068,273 1,550,031 2,618,304 Deferred Inflows related to Refundings 156,231 1,855 158,086 Deferred Assessments 635,230 16,433,399 17,068,629 Deferred Fees 112,016 - 112,016 Total Deferred Inflows of Resources 23,915,715 20,368,980 44,284,695

NET POSITION

Net Investment in Capital Assets 122,128,900 99,118,189 221,247,089 Amounts Restricted for:

General Government 14,985,939 - 14,985,939 Economic/Community Development 3,006,352 - 3,006,352 Public Safety 5,676,785 - 5,676,785 Conservation of Natural Resources 2,825,525 - 2,825,525 Social Services 955 - 955 Debt Service - 3,819,902 3,819,902 Capital Projects - - - Other Purposes - 1,530,636 1,530,636 Unrestricted Amounts (Deficit) 36,459,067 30,307,701 66,766,768 Total Net Position $ 185,083,523 $ 134,776,428 $ 319,859,951

The accompanying notes to the basic financial statements are an integral part of this statement.

34

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF NET POSITION

June 30, 2023

(CONTINUED)

COMPONENT UNITS

BOARD OF FREE

EDUCATION LIBRARY

$ - $ - 15,963,697 1,535,519

- -

368,830 63,854

- -

- -

- -

711,358 - 4,574,932 - 32,572 -

- 32,317

- 111,831

- -

- -

- -

- -

8,763,803 29,850 135,937,425 1,643,020 166,352,617 3,416,391 42,825,323 139,623 1,953,231 -

- -

- -

44,778,554 139,623 13,003,105 108,059

- -

- -

- -

1,595,399 -

- -

306,405 5,735 146,173,581 533,463 161,078,490 647,257 141,386,258 261,690 497,894 -

- -

- -

- -

- -

- 5,000

141,884,152 266,690 143,531,227 1,664,533

- -

- -

- -

- -

- -

- -

81,005 - 1,968,569 12,904 ( 237,412,272) 964,630 $ ( 91,831,471) $ 2,642,067 The accompanying notes to the basic financial statements are an integral part of this statement.

35

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2023

PRIMARY GOVERNMENT

OPERATING CAPITAL

CHARGES FOR GRANTS AND GRANTS AND TOTAL

EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS REVENUE

PRIMARY GOVERNMENT

Governmental Activities General Government $ 21,070,854 $ 2 ,037,088 $ 249,863 $ 1,549,325 $ 3,836,276 Public Safety 42,482,230 1 ,908,036 3,601,321 164,422 5,673,779 Public Works 19,422,823 9 61,563 9,070 1,119,611 2,090,244 Parks & Recreation 6,338,014 1 ,101,729 25,681 640,892 1,768,302 Health and social services 7,219,183 7 7,736 3,060,269 195,509 3,333,514 Education and Library 69,770,287 2 ,237,364 - 979,756 3,217,120

Conservation of Natural Resources 3,386,538 7 6,138 - 2,007,786 2,083,924 Economic/Community Development 2,798,777 6 20,000 1,286,414 - 1,906,414 Interest and Fiscal Charges 4,525,460 4 6,124 - - 46,124 Total Governmental Activities 177,014,166 9 ,065,778 8,232,618 6,657,301 23,955,697 Business-type Activities Water and Sewer 13,822,527 1 2,330,275 1,467,662 4,027,234 17,825,171 Airport 1,058,318 2 2,655 741,939 - 764,594

Golf Course 697,824 6 17,340 - - 617,340 Public Landings and Marinas 684,685 4 65,730 745,966 - 1,211,696 Total Business-type Activities 16,263,354 1 3,436,000 2,955,567 4,027,234 20,418,801 Total Primary Government $ 193,277,520 $ 2 2,501,778 $ 11,188,185 $ 10,684,535 $ 44,374,498

COMPONENT UNITS

Board of Education $ 147,053,054 $ 1 ,486,602 $ 35,519,706 $ 2,003,685 $ 39,009,993 Free Library 3,253,523 1 9,335 1,020,717 - 1,040,052 Total Component Units $ 150,306,577 $ 1 ,505,937 $ 36,540,423 $ 2,003,685 $ 40,050,045 General Revenues Local Property Tax Local Income Tax Other Local Taxes Admission and Amusement Taxes Recordation Taxes Hotel Taxes County Transfer Taxes State Shared Taxes Grants and Contributions Not Restricted to Specific Programs

Investment Income Gain (loss) on Disposal of Capital Assets Miscellaneous Transfers In (Out) Total General Revenues and Transfers Change in Net Position Net Position - Beginning of Year, as Restated Net Position - End of Year The accompanying notes to the basic financial statements are an integral part of this statement.

36

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION

PRIMARY GOVERNMENT COMPONENT UNITS

GOVERNMENTAL BUSINESS-TYPE BOARD OF FREE

ACTIVITIES ACTIVITIES TOTAL EDUCATION LIBRARY

$ ( 17,234,578) $ - $ (17,234,578) $ - $ - ( 36,808,451) - (36,808,451) - - ( 17,332,579) - (17,332,579) - - ( 4,569,712) - (4,569,712) - - ( 3,885,669) - (3,885,669) - - ( 66,553,167) - (66,553,167) - - ( 1,302,614) - (1,302,614) - - ( 892,363) - (892,363) - - ( 4,479,336) - (4,479,336) - - ( 153,058,469) - (153,058,469) - -

- 4,002,644 4,002,644 - -

- (293,724) (293,724) - -

- (80,484) (80,484) - -

- 527,011 527,011 - -

- 4,155,447 4,155,447 - -

$ ( 153,058,469) $ 4,155,447 $ (148,903,022) $ - $ - $ - $ - $ - $ (108,043,061) $ -

- - - - (2,213,471)

- - - (108,043,061) (2,213,471)

78,022,772 - 78,022,772 - - 83,439,604 - 83,439,604 - - 248,987 - 248,987 - - 8,921,379 - 8,921,379 - - 991,022 - 991,022 - - 3,046,615 - 3,046,615 - - 1,352,592 - 1,352,592 - -

- - - 9 5,195,250 2,513,415

6,448,944 1,047,564 7,496,508 3 25,742 36,159

- 2,561 2,561 - -

1,628,246 1,224,908 2,853,154 3 ,919 2,874 ( 516,330) 516,330 - - - 183,583,831 2,791,363 186,375,194 9 5,524,911 2,552,448 30,525,362 6,946,810 37,472,172 (12,518,150) 338,977 154,558,161 127,829,618 282,387,779 (79,313,321) 2,303,090 $ 185,083,523 $ 134,776,428 $ 319,859,951 $ (91,831,471) $ 2,642,067 The accompanying notes to the basic financial statements are an integral part of this statement.

37

QUEEN ANNE'S COUNTY, MARYLAND

BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2023

MAJOR FUNDS NON-MAJOR TOTAL

GENERAL GENERAL ROADS GRANTS GOVERNMENTAL GOVERNMENTAL

FUND CAPITAL CAPITAL FUND FUNDS FUNDS

ASSETS

Cash and Cash Equivalents $ 60,780,819 $ 42,150,824 $ 5,603,602 $ 8,301,067 $ 24,088,579 $ 140,924,891 Prepaid Items 197,921 - - - - 197,921 Receivables:

Taxes Receivable (Net) 820,384 - - - - 820,384 Accounts Receivable (Net) 169,745 746,178 - 1 2,371 8 9,381 1,017,675 Lease Receivable 1,103,690 - - - - 1,103,690 Loans Receivable (Net) - - - - 6,289,663 6,289,663 Special Assessments (Net) - - 2 7,265 - 607,965 635,230 Due from Other Governments 40,600,614 521,298 - 698,605 1,292,032 43,112,549 Due from Other Funds 688,090 935,217 - - - 1,623,307 Inventory - - - - 1,274,659 1,274,659

Restricted:

Restricted LOSAP Plan Assets 5,334,870 - - - - 5,334,870 Restricted Equity in Pooled Cash - 18,478,289 - - - 18,478,289 Total Assets $ 109,696,133 $ 62,831,806 $ 5,630,867 $ 9,012,043 $ 33,642,279 $ 220,813,128

LIABILITIES

Accrued Liabilities $ 5,872,537 $ 1,336,322 $ 168,640 $ 115,230 $ 928,915 $ 8,421,644 Due to Other Funds - - - - 394,043 394,043 Due to Component Units - 160,929 - - - 160,929 Due to Other Governmental Agencies - - - - 316,132 316,132 Unearned Revenue 2 4,559 - - 8,896,813 831,583 9,752,955 Total Liabilities 5,897,096 1,497,251 168,640 9,012,043 2,470,673 19,045,703

DEFERRED INFLOWS OF RESOURCES

Unavailable Income Taxes 33,778,297 - - - - 33,778,297 Unavailable Property Taxes 148,708 - - - - 148,708 Unavailable Benefit Assessments - - 2 7,265 - 607,965 635,230 Unavailable Fees - - - - 112,016 112,016 Unavailable Lease Revenue 1,068,273 - - - - 1,068,273 Total Deferred Inflows 34,995,278 - 2 7,265 - 719,981 35,742,524

FUND BALANCES

Nonspendable 242,876 - - - 1,274,659 1,517,535 Restricted 19,996,347 11,432,678 - - 6,174,749 37,603,774 Committed 9,069,982 5,811,898 909,241 - 22,266,468 38,057,589 Assigned - 44,089,979 4,525,721 - 735,749 49,351,449 Unassigned 39,494,554 - - - - 39,494,554 Total Fund Balances 68,803,759 61,334,555 5,434,962 - 30,451,625 166,024,901 Total Liabilities, Deferred Inflows and Fund Balances $ 109,696,133 $ 62,831,806 $ 5,630,867 $ 9,012,043 $ 33,642,279 $ 220,813,128

The accompanying notes to the basic financial statements are an integral part of this statement.

38

QUEEN ANNE'S COUNTY, MARYLAND

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION

June 30, 2023 Total Fund Balance - Governmental Funds $ 1 66,024,901 Capital assets used in governmental fund activities are not current financial resources and therefore are not reported in the funds. 195,514,937 Receivables not included in the governmental funds because they relate to debt.

A portion of the County's 2014 Bond offering related to debt issued on behalf of Chesapeake College.

Although Queen Anne's County will submit the payments to the lender for the bonds, there are five Counties total that will share the expense of the debt service for the Chesapeake College project.

A receivable is booked in Government-Wide in order to offset the debt recorded on the books related to the portion of the Chesapeake College project that the other Counties are responsible for. 3,088,164 Accrued interest lease receivable - Revenues that are deferred in the governmental funds because they do not provide current financial resources are recognized as revenues in the Statement of Activities.

Property Taxes deferred in governmental funds 148,708 Income Taxes deferred in governmental funds 33,778,297 Loans receivable deferred in governmental funds - Long-term liabilities related to governmental fund activities are not due and payable in the current period and therefore are not reported in the funds.

Liability for Retirement Incentive and Employee Contracts (346,364) Bonds and Notes Payable (132,859,793) Accrued Interest Payable - long term debt (2,105,030) Accrued Interest Payable - leases (7,886) Accrued Interest Payable - Subscription (28,249) Lease Liability (614,668) Subscription Liability (1,178,880)

OPEB (26,810,247)

Net Pension Liability (32,570,299) Net LOSAP Liability (7,757,868) Accrued Compensated Absences (3,625,663) Deferred outflow of resources - OPEB 1,383,530 Deferred outflow of resources - Maryland State Pension 13,077,386 Deferred outflow of resources - LOSAP 1,745,381 Deferred outflow of resources - Refundings 327,362 Deferred inflow of resources - OPEB (14,275,412) Deferred inflow of resources - Maryland State Pension (4,444,722)

Deferred inflow of resources - LOSAP (3,223,831) Deferred inflow of resources - Refundings (156,231) Total Net Position - Governmental Activities $ 185,083,523 The accompanying notes to the basic financial statements are an integral part of this statement.

39

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

MAJOR FUNDS NON-MAJOR TOTAL

GENERAL GENERAL ROADS GRANTS GOVERNMENTAL GOVERNMENTAL

FUND CAPITAL CAPITAL FUND FUNDS FUNDS

REVENUES

Taxes Local Property Tax $ 78,012,721 $ - $ - $ - $ 49,615 $ 78,062,336 Local Income Tax 79,467,361 - - - - 79,467,361 Admission and Amusement Taxes 248,987 - - - - 248,987 Recordation Taxes 8,651,034 - - - 270,345 8,921,379 Hotel Taxes 991,022 - - - - 991,022 County Transfer Taxes 3,046,615 - - - - 3,046,615 State Shared Taxes - - - - 1,352,592 1,352,592 Franchise Fee 507,847 - - - - 507,847 Licenses and Permits 838,254 7 0,995 - - - 909,249

Intergovernmental 3,102,287 3,430,796 1,100,307 1,535,667 5,720,866 14,889,923 Charges for Current Services 3,298,630 6 4,885 5 ,763 2 1,782 4,063,135 7,454,195 Fines and Forfeitures 107,379 - - - 6 6,623 174,002 Investment Income 4,808,600 765,760 193,842 - 680,742 6,448,944 Donations 805 - - - 1 9,676 2 0,481 Miscellaneous 1,397,290 5 7,485 - 8 0,029 9 3,442 1,628,246 Total Revenues 184,478,832 4,389,921 1,299,912 1,637,478 12,317,036 204,123,179

EXPENDITURES

Current General Government 13,059,140 2,061,411 - 7 9,407 3 7,740 15,237,698 Public Safety 35,123,715 1,321,413 - 975,469 714,843 38,135,440 Public Works 7,580,446 3,469,145 3,266,936 1 8,739 5,210,341 19,545,607 Parks & Recreation 5,719,945 329,741 - - - 6,049,686 Health and Social Services 2,657,692 6 9,402 - 218,301 4,964,088 7,909,483 Education and Library 68,492,102 1,265,376 - - - 69,757,478

Conservation of Natural Resources 730,037 2 2,137 - - 2,705,482 3,457,656 Economic/Community Development 992,147 1 0,606 - 382,497 1,631,790 3,017,040 Intergovernmental 653,024 - - - - 653,024 Miscellaneous 8,921,419 - - - - 8,921,419 Capital Outlay - 7,754,593 849,359 - - 8,603,952 Debt Service Principal 8,648,957 - - - 4 7,816 8,696,773 Debt Issuance Costs - 2 9,851 - - - 2 9,851 Interest and Fiscal Charges 4,525,460 - - - - 4,525,460

Total Expenditures 157,104,084 16,333,675 4,116,295 1,674,413 15,312,100 194,540,567 Excess of Revenues Over (Under) Expenditures 27,374,748 (11,943,754) (2,816,383) (36,935) (2,995,064) 9,582,612

OTHER FINANCING SOURCES (USES)

Issuance of Debt - (1,577,893) 1,577,893 - - - Proceeds of Capital Asset Disposals 5 1,405 3 71 - - 9 ,744 6 1,520 Insurance Proceeds 6 6,705 - - - 3 6,325 103,030 Leases 638,500 - - - - 638,500 Subscription-Based IT Arrangements 1,503,069 - - - - 1,503,069 Transfers In 2,857,792 16,601,988 550,000 3 6,935 7,935,740 27,982,455 Transfers Out (23,661,847) (470,000) - (240,000) (4,130,063) (28,501,910)

Other Financing Sources (Uses) (18,544,376) 14,554,466 2,127,893 (203,065) 3,851,746 1,786,664 Change in Fund Balances 8,830,372 2,610,712 (688,490) (240,000) 856,682 11,369,276 Fund Balances, July 1, as restated 59,973,387 58,723,843 6,123,452 240,000 29,594,943 154,655,625 Fund Balances, June 30 $ 68,803,759 $ 61,334,555 $ 5,434,962 $ - $ 30,451,625 $ 166,024,901 The accompanying notes to the basic financial statements are an integral part of this statement.

40

QUEEN ANNE'S COUNTY, MARYLAND

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2023

Net change in fund balance - Governmental Funds $ 1 1,369,276 Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the cost of capital assets is allocated over the estimated useful lives of those assets through an annual depreciation charge. The differences are as follows:

Current year additions of capital assets 1 2,529,448 Transfer of Capital Asset (to) from Enterprise Funds 3,125 Current year disposals of capital assets ( 777,257) Depreciation expenses recorded in the Statement of Activities (7,115,186) Receivables not included in the governmental funds because they relate to debt.

A portion of the County's 2014 Bond offering related to debt issued on behalf of Chesapeake College. Although Queen Anne's County will submit the payments to the lender for the bonds, there are five Counties that will share the expense of the debt service for the Chesapeake College project. A receivable is booked in Government-Wide in order to offset the debt recorded on the books related to the portion of the Chesapeake College project that the other Counties are responsible for.

Change in bond receivable related to 2014 bonds ( 220,813) Accrued interest related to lease receivable ( 163) Revenues that are earned but not collected within sixty days after the end of the fiscal year are not considered to be "available" to meet current cash requirements and are deferred in the Governmental Funds to the following year. However, these revenues are recognized in the Statement of Activities. The amount by which this type of deferred inflows increased or (decreased) relative to the

prior year is as follows:

Change in Property Tax Deferred Inflows ( 39,564) Change in Income Tax Deferred Inflows 3,972,242 Change in Loans receivable deferred ( 37,316) Liability for retirement incentive As part of the retirement incentives offered in fiscal year 2018, retirees were given a certain period of health insurance at no cost, rather than the normal premium. The maximum period of no cost health insurance was five years. The liability for the

benefit offered to the retirees is included in the government-wide statements and adjusted each year until the benefit period is over.

As part of an employee contract of a past employee, the County is responsible for a death benefit of $250,000 plus inflation.

This liability will remain until the payment is made.

Change in liability for the retirement incentive and employee contracts 8,856 Issuance of long-term debt (e.g., bonds, notes, and financing leases) provides current financial resources to Governmental Funds, while repayment of principal due for long-term debt consumes current resources. In the Statement of Net Position, issuing debt increases long term liabilities, while repayment reduces those liabilities.

Retirements and repayments made on long term debt 8,999,483 Proceeds of debt - Bond Premium amortization 937,650 Some accrued expenses, reported in the Statement of Activities, do not require the use of current financial resources and are not reported as expenditures in the Governmental Funds.

Change in:

Accrued Interest Payable - long term debt ( 73,904) Accrued Interest Payable - leases ( 7,886) Accrued Interest Payable - Subscription ( 28,249) Lease Liability ( 614,668) Subscription Liability (1,178,880)

OPEB 9,458,276

Net pension liability - Maryland State Pension (8,562,493) Net LOSAP Liability 2,509,893 Accrued Compensated Absences ( 98,498) Deferred outflow of resources - OPEB ( 893,926) Deferred outflow of resources - Maryland State Pension (1,110,678) Deferred outflow of resources - LOSAP ( 55,283) Deferred outflow of resources - Refunding ( 112,518) Deferred inflow of resources - OPEB (6,663,229) Deferred inflow of resources - Maryland State Pension 1 1,204,572

Deferred inflow of resources - LOSAP (2,897,313) Deferred inflow of resources - Refunding 20,365 Change in Net Position - governmental activities $ 3 0,525,362 The accompanying notes to the basic financial statements are an integral part of this statement.

41

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF NET POSITION

ENTERPRISE FUNDS

June 30, 2023

SANITARY DISTRICT

SEWER WATER RESTRICTED DEBT SERVICE

ASSETS OPERATIONS OPERATIONS FUND FUND TOTAL

Current Assets Unrestricted Equity in Pooled Cash $ 6,084,163 $ 6,614,287 $ - $ - $ 12,698,450 Accounts Receivable (Net) 487,144 112,237 - - 599,381 Loans Receivable 101,834 - - - 101,834 Due from Other Governments - - - - - Lease receivable - 1,430,255 - - 1,430,255 Inventories 776,261 - - - 776,261 Restricted Restricted Equity in Pooled Cash - - 24,763,246 1,703,815 26,467,061 Restricted Accounts Receivable (Net) - - 3,076,750 893,250 3,970,000

Total Current Assets 7,449,402 8,156,779 27,839,996 2,597,065 46,043,242 Noncurrent Assets Restricted Special Assessments Receivable (Net) - - 951,442 15,481,956 16,433,398 Total Noncurrent Restricted Assets - - 951,442 15,481,956 16,433,398 Capital and Intangible Assets 146,688,935 38,688,850 - - 185,377,785 Less Accumulated Depreciation and Amortization (59,198,975) (13,820,606) - - (73,019,581)

Total Capital Assets, Net 87,489,960 24,868,244 - - 112,358,204 Total Assets 94,939,362 33,025,023 28,791,438 18,079,021 174,834,844

DEFERRED OUTFLOWS OF RESOURCES

OPEB 157,603 47,098 - - 204,701

Pension Benefits 843,906 250,259 - - 1,094,165 Deferred Charge on Refunding - - - - - Total Deferred Outflows of Resources 1,001,509 297,357 - - 1,298,866

LIABILITIES

Current Liabilities Payable from Unrestricted Assets Accounts Payable 1,148,877 185,980 - - 1,334,857 Accrued Interest Payable 119,874 - - - 119,874 Escrow Deposits - - - - - Due to Other Funds - - - - - Unearned Revenue 180,047 - - - 180,047 Current Portion of Compensated Absences 210,714 55,973 - - 266,687 Current Portion of Lease Payable 6 ,397 - - - 6 ,397 Current Portion of Bonds/Notes Payable 2,118,910 - - - 2,118,910

Total Current Liabilities 3,784,819 241,953 - - 4,026,772 Noncurrent Liabilities Payable from Unrestricted Assets Compensated Absences 145,462 38,640 - - 184,102

OPEB 4,042,451 1,318,218 - - 5,360,669

Net Pension Liability 1,871,574 536,699 - - 2,408,273 Lease Payable - - - - - Bonds/Notes Payable 33,203,666 - - - 33,203,666 Total Noncurrent Liabilities 39,263,153 1,893,557 - - 41,156,710 Total Liabilities 43,047,972 2,135,510 - - 45,183,482

DEFERRED INFLOWS OF RESOURCES

OPEB 1,460,668 340,891 - - 1,801,559

Pension Benefits 334,187 108,380 - - 442,567 Bond Refundings - - - - - Water and Sewer Assessments - - 951,442 15,481,957 16,433,399 Lease receivable - 1,407,645 - - 1,407,645 Total Deferred Inflows of Resources 1,794,855 1,856,916 951,442 15,481,957 20,085,170

NET POSITION

Net Investment in Capital Assets 52,160,987 24,868,244 - - 77,029,231 Amounts Restricted for:

Debt Service - - - 2,597,064 2,597,064 Other Purposes - - - - - Unrestricted Amounts (Deficit) (1,062,943) 4,461,710 27,839,996 - 31,238,763 Total Net Position $ 51,098,044 $ 29,329,954 $ 27,839,996 $ 2,597,064 $ 110,865,058 The accompanying notes to the basic financial statements are an integral part of this statement.

42

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF NET POSITION

ENTERPRISE FUNDS

June 30, 2023

(CONTINUED)

TOTAL

PRIMARY

NON-MAJOR GOVERNMENT

BAY BRIDGE ENTERPRISE ENTERPRISE

AIRPORT FUNDS FUNDS

$ 3,006,101 $ 820,878 $ 16,525,429 22,935 66,091 688,407

- - 101,834

471,623 78,390 550,013 145,071 - 1,575,326 48,162 8 ,038 832,461

- - 26,467,061

- - 3,970,000

3,693,892 973,397 50,710,531

- - 16,433,398

- - 16,433,398

22,576,886 11,277,476 219,232,147 (6,861,099) (2,562,821) (82,443,501) 15,715,787 8,714,655 136,788,646 19,409,679 9,688,052 203,932,575 1 ,898 7 ,563 214,162 33,752 98,739 1,226,656 4 ,129 5 88 4 ,717 39,779 106,890 1,445,535 120,334 134,746 1,589,937 17,355 9 ,864 147,093 19,500 - 19,500 935,217 294,047 1,229,264 282,853 6 ,779 469,679 22,687 40,875 330,249

- 27,269 33,666

117,103 77,734 2,313,747 1,515,049 591,314 6,133,135 15,662 28,218 227,982 257,830 236,477 5,854,976 75,698 206,732 2,690,703

- 110,715 110,715

1,307,729 703,796 35,215,191 1,656,919 1,285,938 44,099,567 3,171,968 1,877,252 50,232,702 17,326 64,932 1,883,817 12,649 44,662 499,878 2 94 1 ,561 1 ,855

- - 16,433,399

142,386 - 1,550,031 172,655 111,155 20,368,980 14,294,790 7,794,168 99,118,189 1,222,838 - 3,819,902 1,530,636 - 1,530,636 (943,429) 12,367 30,307,701 $ 16,104,835 $ 7,806,535 $ 134,776,428 The accompanying notes to the basic financial statements are an integral part of this statement.

43

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

ENTERPRISE FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

SANITARY DISTRICT

SEWER WATER RESTRICTED DEBT SERVICE

OPERATIONS OPERATIONS FUND FUND TOTAL

OPERATING REVENUES

Charges for Services $ 7,091,613 $ 2,952,440 $ 1,424,698 $ 861,524 $ 12,330,275 Intergovernmental 138,262 - 1,032,400 297,000 1,467,662 Material Sales - 19,420 - - 19,420 Miscellaneous Revenues 208,133 254,791 - - 462,924 Total Operating Revenues 7,438,008 3,226,651 2,457,098 1,158,524 14,280,281

OPERATING EXPENSES

Cost of Sales and Services Collection 3,521,502 - - - 3,521,502 Distribution - 277,203 - - 277,203 Treatment 1,672,325 1,814,857 - - 3,487,182 Shop 231,253 95,477 - - 326,730 Airport - - - - - Recreation - - - - - Total Cost of Sales and Services 5,425,080 2,187,537 - - 7,612,617 Administration and Inspection 1,982,662 722,563 - - 2,705,225

OPEB (192,213) (37,844) - - (230,057)

Pension Liability Adjustment (201,389) (77,740) - - (279,129) Depreciation and amortization 2,782,815 825,202 - - 3,608,017 Total Operating Expenses 9,796,955 3,619,718 - - 13,416,673 Operating Income (Loss) (2,358,947) (393,067) 2,457,098 1,158,524 863,608

NON-OPERATING REVENUES (EXPENSES)

Investment Income 182,064 114,212 616,963 132,273 1,045,512 Interest Expense (405,854) - - - (405,854) Gain on Disposal of Capital Assets 852 - - - 852 Total Non-Operating Revenues (Expenses) (222,938) 114,212 616,963 132,273 640,510 Income (Loss) Before Contributions and Transfers (2,581,885) (278,855) 3,074,061 1,290,797 1,504,118 Capital Contributions, Fees and Grants 2,559,489 1,467,745 - - 4,027,234

Transfer of Capital Asset (to) from Governmental Fund (2,083) (1,042) - - (3,125)

TRANSFERS

Transfers In 2,319,549 499,065 - 1,046,714 3,865,328 Transfers Out (5,000) (5,000) ( 1,545,779) (2,319,549) (3,875,328) Net Transfers In (Out) 2,314,549 494,065 ( 1,545,779) (1,272,835) (10,000) Change in Net Position 2,290,070 1,681,913 1,528,282 17,962 5,518,227 Total Net Position - Beginning of Year, as restated 48,807,974 27,648,041 26,311,714 2,579,102 105,346,831 Total Net Position - End of Year $ 51,098,044 $ 29,329,954 $ 27,839,996 $ 2,597,064 $ 110,865,058

The accompanying notes to the basic financial statements are an integral part of this statement.

44

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

ENTERPRISE FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

TOTAL

PRIMARY

NON-MAJOR GOVERNMENT

BAY BRIDGE ENTERPRISE ENTERPRISE

AIRPORT FUNDS FUNDS

$ 22,655 $ 1,083,070 $ 13,436,000 741,939 745,966 2,955,567 299,370 50,297 369,087 363,891 29,006 855,821 1,427,855 1,908,339 17,616,475

- - 3,521,502

- - 277,203

- - 3,487,182

- - 326,730

529,571 - 529,571

- 1,205,262 1,205,262

529,571 1,205,262 9,347,450

- - 2,705,225

(2,290) (8,293) (240,640) (6,698) (33,628) (319,455) 464,183 196,683 4,268,883 984,766 1,360,024 15,761,463 443,089 548,315 1,855,012 2,052 - 1,047,564 (73,552) (22,485) (501,891) 1,709 - 2,561 (69,791) (22,485) 548,234 373,298 525,830 2,403,246

- - 4,027,234

- - (3,125)

59,455 470,000 4,394,783

- - (3,875,328)

59,455 470,000 519,455 432,753 995,830 6,946,810 15,672,082 6,810,705 127,829,618 $ 16,104,835 $ 7,806,535 $ 134,776,428 The accompanying notes to the basic financial statements are an integral part of this statement.

45

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF CASH FLOWS

ENTERPRISE FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

SANITARY DISTRICT

SEWER WATER RESTRICTED DEBT SERVICE

OPERATIONS OPERATIONS FUND FUND TOTAL

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers and users $ 7,012,562 $ 2,930,214 $ 889,948 $ 634,275 $ 11,466,999 Receipts from other operating sources 147,412 94,074 1,032,400 297,000 1,570,886 Payments to suppliers (4,704,068) (2,182,497) - - (6,886,565) Payments to employees and on behalf of employees (1,959,950) (720,137) - - (2,680,087) Net Cash Provided by Operating Activities 495,956 121,654 1,922,348 931,275 3,471,233

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers in from other funds 2,319,549 499,065 - 1,046,714 3,865,328 Transfers to other funds (5,000) (5,000) (1,545,779) (2,319,549) (3,875,328) Principal paid on interfund loans - - - - - Net Cash Provided (Used) by Noncapital Financing Activities 2,314,549 494,065 (1,545,779) (1,272,835) (10,000)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Increase in capital grants receivable - - - - - Proceeds from capital debt 3,946,501 - - - 3,946,501 Proceeds from the disposition of capital assets 8 52 - - - 8 52 Proceeds from lease receivable - 150,112 - - 150,112 Principal paid on capital debt (1,915,181) - - - (1,915,181) Repayment of lease payable (19,158) - - - (19,158) Increase in loans receivable (15,213) - - - (15,213) Deferred Refunding costs on sale of bonds - - - - -

Interest paid on capital debt (404,408) - - - (404,408) Acquisition and construction of capital assets (5,355,036) (1,029,958) - - (6,384,994) Net Cash Used by Capital and Related Financing Activities (3,761,643) (879,846) - - (4,641,489)

CASH FLOWS FROM INVESTING ACTIVITIES

Investment Income 182,064 114,212 616,963 132,273 1,045,512 Net Cash Provided by Investing Activities - Investment Income 182,064 114,212 616,963 132,273 1,045,512 Net Increase (Decrease) in Cash and Cash Equivalents (769,074) (149,915) 993,532 (209,287) (134,744) Balances - Beginning of the year 6,853,237 6,764,202 23,769,714 1,913,102 39,300,255 Balances - End of the year $ 6,084,163 $ 6,614,287 $ 24,763,246 $ 1,703,815 $ 39,165,511

Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ (2,358,947) $ (393,067) $ 2,457,098 $ 1,158,524 $ 863,608 Adjustments to reconcile operating income (loss) to net cash provided by operating activities:

Depreciation and amortization 2,782,815 825,202 - - 3,608,017 Lease revenue - deferred inflow - (160,717) - - (160,717) (Increase) decrease in assets:

Accounts receivable, net (79,051) (41,646) (534,750) (227,250) (882,697) Special assessments receivable, net - - (487,491) (202,499) (689,990) Due from Other Governments - - - - - Inventories 60,483 - - - 60,483 Increase (decrease) in liabilities:

Accounts payable 660,529 5 ,040 - - 665,569 Escrow deposits - - - - - Unearned revenue (198,983) - 487,491 202,500 491,008 Compensated absences 22,712 2 ,426 - - 25,138

OPEB (192,213) (37,844) - - (230,057)

Pension Obligation (201,389) (77,740) - - (279,129) Net Cash Provided (Used) by Operating Activities $ 495,956 $ 121,654 $ 1,922,348 $ 931,275 $ 3,471,233 Noncash investing, capital and financing activities:

Transfer of Capital Asset (to) from Governmental Fund $ (2,083) $ (1,042) $ - $ - $ (3,125) Lease Inception $ - $ - $ - $ - $ - Contributed Capital Assets $ 2,559,489 $ 1,467,745 $ - $ - $ 4,027,234 The accompanying notes to the basic financial statements are an integral part of this statement.

46

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF CASH FLOWS

ENTERPRISE FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

TOTAL

PRIMARY

NON-MAJOR GOVERNMENT

BAY BRIDGE ENTERPRISE ENTERPRISE

AIRPORT FUNDS FUNDS

$ 335,515 $ 1,134,868 $ 12,937,382 1,369,753 1,339,797 4,280,436 (491,869) (1,170,521) (8,548,955) 5 ,058 6 ,742 (2,668,287) 1,218,457 1,310,886 6,000,576 59,455 470,000 4,394,783

- - (3,875,328)

(58,138) (319,904) (378,042) 1 ,317 150,096 141,413 (441,623) - (441,623) 28,908 - 3,975,409 2 ,335 - 3 ,187 17,593 - 167,705 (109,925) (93,363) (2,118,469)

- - (19,158)

- - (15,213)

9 90 (76) 9 14 (74,884) (20,325) (499,617) (580,611) (673,939) (7,639,544) (715,594) (787,703) (6,144,786) 2 ,052 - 1,047,564 2 ,052 - 1,047,564 506,232 673,279 1,044,767 2,941,492 147,599 42,389,346 $ 3,447,724 $ 820,878 $ 43,434,113 $ 443,089 $ 548,315 $ 1,855,012 464,183 196,683 4,268,883 (18,930) - (179,647) 12,790 1 ,501 (868,406)

- - (689,990)

- 562,362 562,362

(17,162) (118) 43,203 54,864 34,859 755,292 7 00 - 7 00 282,853 2 ,463 776,324 5 ,058 6 ,743 36,939 (2,290) (8,293) (240,640) (6,698) (33,629) (319,456) $ 1,218,457 $ 1,310,886 $ 6,000,576 $ - $ - $ (3,125) $ - $ 142,748 $ 142,748 $ - $ - $ 4,027,234 The accompanying notes to the basic financial statements are an integral part of this statement.

47

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF FIDUCIARY NET POSITION

PRIVATE PURPOSE TRUST, OTHER POST-EMPLOYMENT BENEFIT TRUST, AND CUSTODIAL FUNDS June 30, 2023

PRIVATE OTHER

PURPOSE POST-

TRUST FUND EMPLOYMENT

TAX SALE BENEFIT CUSTODIAL

DEPOSITS TRUST FUND FUNDS

ASSETS

Cash and Cash Equivalents $ 238,164 $ 1,133,388 $ 1,264,570 Investments, at Fair Value Debt Securities - 4,694,932 - Fixed Income Fund - 806,002 - Mutual and Global Funds - 8,451,048 - International - 2,415,950 - Total Investments - 16,367,932 - Total Assets 238,164 17,501,320 1,264,570

LIABILITIES

Accounts Payable and Other Liabilities - 31,768 2,095 Due to Other Governments - - 268,878 Total Liabilities - 31,768 270,973

NET POSITION

Restricted for:

Held in Trust 238,164 - - Other Post-Employment Benefits - 17,469,552 - Individuals, Organizations, and other Governments - - 993,597 Total Net Position $ 238,164 $ 17,469,552 $ 993,597 The accompanying notes to the basic financial statements are an integral part of this statement.

48

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

PRIVATE PURPOSE TRUST, OTHER POST-EMPLOYMENT BENEFIT TRUST, AND CUSTODIAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

PRIVATE OTHER

PURPOSE POST-

TRUST FUND EMPLOYMENT

TAX SALE BENEFIT CUSTODIAL

DEPOSITS TRUST FUND FUNDS

ADDITIONS

Contributions:

Tax Sale Collections in Excess of Tax Due $ 188,719 $ - $ - Employers - 4,106,367 - Members - 421,155 - Total Contributions 188,719 4,527,522 - Investment Earnings:

Net Change in the Fair Value of Investments - 1,164,491 - Interest - 331,159 - Total Investment Earnings - 1,495,650 - Less Investment Administrative Expenses - 8,631 - Net Investment Earnings - 1,487,019 - Tax Ditch - - 32,139 Zoning Deposits - - 203,354 Tax Collections for Other Governments - - 15,816,966 Motor Vehicle Administration - - 227,190 Escheat - Abandoned Property - - 43,690 Inmate Welfare - - 122,965

Total Additions 188,719 6,014,541 16,446,304

DEDUCTIONS

Distributions to Property Holders 58,411 - - Claims Paid for Other Post-Employment Benefits - 2,127,522 - Administrative Expenses - 72,447 - Distribution of Tax Ditch Funds - - 16,201 Refund of Zoning Deposits - - 96,971 Payments of Tax to Other Governments - - 15,816,966 Payments to Motor Vehicle Administration - - 227,190 Payments of Escheat to Others - - 43,690 Distribution of Inmate Welfare Funds - - 122,288

Total Deductions 58,411 2,199,969 16,323,306 Net Increase in Fiduciary Net Position 130,308 3,814,572 122,998 Net Position-Beginning of Year 107,856 13,654,980 870,599 Net Position-End of Year $ 238,164 $ 17,469,552 $ 993,597 The accompanying notes to the basic financial statements are an integral part of this statement.

49

QUEEN ANNE'S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

INDEX

Note 1 Summary of Significant Accounting Policies 51 - 62 2 Budgets and Budgetary Accounting 62 - 63 3 Cash, Investments and Investment Income 64 - 68 4 Accounts Receivable 69 - 70 5 Unearned Revenue 70 6 Capital Assets 71 - 75 7 Interfund Receivables and Payables 75 8 Interfund Transfers 76 9 Noncurrent Liabilities 77 - 85 10 Leases 85 - 88 11 Subscription-Based Information Technology Arrangements 89

12 Restricted Assets and Liabilities and Fund Balances 90 - 93 13 Risk Management 93 14 Retirement Plans 94 - 102 15 Deferred Compensation Plan 103 16 Other Post-Employment Benefits 103 - 117 17 Volunteer Fireman Pension Plan Length of Service Award Program 118 - 120 18 Deficit Equity Balances 121 19 Commitments, Contingencies, and Subsequent Events 121 20 Joint Venture 122 21 Pollution Remediation Obligations 123

22 Prior Period Restatement 124 50

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the County conform to accounting principles generally accepted in the United States of America (GAAP) applicable to local government entities. The following is a summary of significant policies.

A. REPORTING ENTITY

Queen Anne’s County, Maryland (the County) was founded in 1706. The County is governed by five Commissioners who are elected to serve four-year terms. This board assumes responsibilities conferred upon them by the Maryland General Assembly under Code Home Rule and provides the following services: public safety, public facility/infrastructure maintenance and improvements, sanitation, health and social services, education, recreation and culture, library, conservation of natural resources, economic and community

development, and general administrative services.

As required by GAAP, these financial statements present the primary government and its component units, which are entities for which the primary government is considered financially accountable. The decision to include a potential component unit in the financial reporting entity was made by applying the criteria set forth in the Government Accounting Standards Board (GASB) Statements No. 14 and 39. Blended component units, although separate entities, are in substance, part of the government’s operations. However, each

discretely presented component unit is reported in a separate column in the government-wide financial statements (see note below for descriptions) to emphasize that it is legally separate from the government.

Blended Component Units The Queen Anne’s County Sanitary District serves citizens of the government and is governed by a board comprised of the government’s elected Commissioners. The rates for user charges and bond issuance authorizations are approved by the Board of Commissioners and the legal liability for the general obligation portion of the District’s debt remains with the government. The Sanitary District is reported as an enterprise fund.

The Queen Anne’s County Roads Board serves all the citizens of the government and is governed by a board comprised of the government’s elected Commissioners. All operations of the Roads Board are approved by the Board of Commissioners and the legal liability for any debt remains with the government. The Roads Operating Fund is included as a governmental fund.

Discretely Presented Component Units Component units are legally separate entities that are included in the County’s reporting entity because of the significance of their operating or financial relationships with the County. The criteria for including organizations as component units within the County’s reporting entity include whether:

 the organization is legally separate  the County Commissioners appoint a voting majority of the organization’s board  the County Commissioners have the ability to impose their will on the organization  the organization has the potential to impose a financial benefit/burden on the County  the organization is fiscally dependent on the County Based on the application of these criteria, the following organizations are considered component units of Queen Anne’s County

Government. Their financial data is discretely presented in separate columns in the government-wide financial statements. Both discretely presented component units have a June 30 year end.

The Board of Education of Queen Anne’s County is a five-member body responsible for the operation of Queen Anne’s County Schools. Beginning with the November 2008 election, the members were elected by the County voters. The Board of Education is a component unit of Queen Anne’s County, Maryland by virtue of the Board’s fiscal dependency on the County through the County’s responsibility for levying taxes, issuing debt, and its budgetary control over the Board of Education.

The Queen Anne’s County Free Library is a component unit of the Queen Anne’s County Government by virtue of the Library’s fiscal dependency on the County. The County levies taxes and approves the Library’s budget. The Library Board of Trustees governs the Library. Vacancies on the Board of Trustees are filled by vote of the remaining members of that Board.

51

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

A. REPORTING ENTITY (CONTINUED)

Discretely Presented Component Units (continued) Complete financial statements of the discretely presented component units can be obtained from their respective administrative offices listed below:

Board of Education of Queen Anne’s County Queen Anne’s County Free Library 202 Chesterfield Avenue 121 S. Commerce Street Centreville, MD 21617 Centreville, MD 21617 Joint Venture The operation of the Midshore Regional Landfill is considered a joint venture of the County. Disclosure of the County’s participation in this joint venture is presented in Note 20.

Complete financial statements can be obtained at the joint ventures’ administrative office listed below:

Maryland Environmental Service 259 Najoles Road Millersville, Maryland 21108

B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

Government-Wide Financial Statements – The government-wide financial statements report information on all of the non-fiduciary activities of the Primary Government and its component units. Since, by definition, assets of fiduciary funds are held for the benefit of a third party (other local governments, private parties, etc.) and cannot be used to address activities or obligations of the County, these

funds are not incorporated into the government-wide statements.

Interfund activity within the primary government’s governmental activities and business-type activities has been eliminated from the government-wide statements. Interfund services provided and used are not eliminated in the process of consolidation. Residual balances between the governmental and business-type categories are presented on the Statement of Net Position as “Internal balances”.

Governmental activities of the Primary Government, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

Statement of Net Position – This statement is designed to display the financial position of the reporting entity as of year-end.

Governments report all capital assets, including infrastructure, in the government-wide Statement of Net Position and report depreciation expense, the cost of “using up” capital assets, in the Statement of Activities. Net position is divided into three categories:

1) net investment in capital assets; 2) restricted amounts; and 3) unrestricted amounts. Net Investment in capital assets consists of

capital assets, net of accumulated depreciation, and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those capital assets. Restricted amounts are assets for which constraints are placed due to restrictions that are either (1) externally imposed by creditors, grantors, contributors, or laws and

regulations of the government, or (2) imposed by law through constitutional provisions or enabling legislation. Unrestricted amounts consist of net assets that do not meet the definition of restricted or invested in capital assets.

52

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED)

Statement of Activities – This statement demonstrates the degree to which the direct expenses of a given function for the fiscal year are offset by program revenues. Therefore, this statement reflects both the gross and net costs per functional category (general government; public safety; public works; parks and recreation; health; social services; education; library; conservation of natural resources; and economic/community development) that are otherwise supported by general revenues. Direct expenses (including

depreciation) are those that are clearly identifiable with a specific function. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. The operating grants and

contributions column includes operating-specific and discretionary (either operating or capital) grants, while the capital grants and contributions column reflects capital-specific grants. Taxes and other items not properly included among program revenues are reported as general revenues. The County does not allocate indirect expenses.

Fund Financial Statements – Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

In the fund financial statements, financial transactions and accounts of the County are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise assets, liabilities, fund balance/net assets, revenues, and expenditures/expenses.

Governmental Fund Budget-to-Actual Comparison Statements – Demonstrating compliance with the legally adopted budget is an important component of government’s accountability to the public. The County provides a budget-to-actual comparison of the General Fund and Grants Fund as part of the required supplementary information section located after the Notes to the basic financial statements. A budget-to-actual comparison is also included for all non-major governmental funds with legally adopted budgets in the

supplementary information section.

The County and many other governments revise their original budgets over the course of the year for a variety of reasons; the County’s amended budget is reflected in a separate column in the budget-to-actual comparison statements. Variances are calculated based on final budgets.

C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION Measurement Focus and Basis of Accounting Full Accrual Basis Financial Statements – The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are

recognized as revenue in the year in which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. Capital assets and related depreciation are recorded in these statements, as well as debt, accrued compensated absences, other post-employment benefits, and other accruals.

Modified Accrual Basis Financial Statements – Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION

(CONTINUED)

Revenues are recorded as soon as they are susceptible to accrual (i.e., when they are both measurable and available). Revenues are considered to be available when they are collectible within the current period, or soon enough thereafter to pay liabilities of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment has matured and is due. Similarly, expenditures related to claims, judgments,

compensated absences, and other post-employment benefits are recorded only to the extent that they are expected to be liquidated with expendable available financial resources. Capital assets, and related depreciation, as well as long-term liabilities are not recorded in these statements.

In applying the susceptible to accrual concept to income taxes (distributed by the State), property taxes, and inter-governmental revenues other than grants, the County defines “available” as received within 60 days after year-end.

In the State of Maryland, the State has assumed responsibility for the collection of all income taxes and for distributing those collections to the respective counties. The counties set their individual tax rates within limits provided by State law. However, collection and pursuit of delinquent taxes are the responsibility of the State. The County records estimated receivables relating to income taxes when

the underlying income is earned. Amounts not received within 60 days are reported as deferred inflows of resources. At year-end, deferred revenue relating to income taxes primarily includes the final fiscal year distribution (which is normally received in September after the fiscal year-end) and amounts related to late filers, delinquent returns and audits, and unallocated withholding, all of which are

not received within the County’s availability period. Most deferred inflows are expected to be received from the State within the next fiscal year; however, collections related to delinquent returns and audits as well as unallocated withholding may not be remitted to the County for several years.

In applying the susceptible to accrual concept to operating and capital grants, which are classified with intergovernmental revenues in the fund financial statements, the County records receivables when the applicable eligibility requirements including time requirements are met. Related revenues are recognized to the extent that cash is expected to be received within one year of year-end. Resources

received before the eligibility requirements are met are reported as unearned revenue.

Licenses and permits, charges for services, and miscellaneous revenues (except earnings on investments) are generally recorded as revenues when received in cash during the year. At year-end, receivables are recorded for significant amounts due. If such amounts are received in cash after year-end within the County’s 60-day availability period, they are recognized as revenue. Benefit assessment receivables not billed at year end are reported as deferred inflows of resources.

Fiduciary Funds – The County’s trust fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting, as is used by proprietary funds. Custodial funds report assets, liabilities, and changes in net position.

Since fiduciary funds are, by their very nature, independent of the County, they are omitted from all government-wide statements.

Financial Statement Presentation - The County reports the following major governmental and proprietary funds, as well as fiduciary funds.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION

(CONTINUED)

General Fund – This fund is the general operating fund of the County. It is used to account for all financial resources except those required or recommended, by GAAP, to be accounted for in another fund.

Capital Projects Funds – General Capital Projects - This fund accounts for financial resources to be used for the acquisition or construction of major capital facilities, as well as other large multi-year projects that relate to capital assets, that are financed from general governmental resources.

Roads Capital Projects - This fund accounts for financial resources to be used for the construction of County Road infrastructure, as well as other large multi-year projects that relate to capital assets, that are financed from grants received from State and Federal Governments, Highway User Tax funds, and general governmental resources.

Grants Fund – This special revenue fund accounts for activities funded by grants and is included in various governmental functions, depending on the grant.

Non-Major Governmental Funds – There are seventeen non-major governmental funds, which are used to account for and report the proceeds of specific revenue sources. Included in the seventeen non-major governmental funds are fourteen special revenue funds and three capital project funds.

Major Enterprise Funds - Enterprise Funds are used to account for those activities of the Primary Government that are financed and operated in a manner similar to private business enterprises in that all costs and expenses, including depreciation, are recovered primarily or partially through user charges. The Sanitary District Funds are intended to be self-supporting as a whole, while the Airport is intended to be only partially self-supporting. The County reports the following major enterprise

funds:

Sanitary District - Sewer Operations - This fund is used to account for the operation of the sewer system serving approximately 9,300 customers.

Water Operations - This fund is used to account for the operation of the water supply system serving approximately 5,200 customers.

Restricted Fund - This fund is used to account for the proceeds of sewer and water capacity charges (onetime allocation fees) and is used to fund capital and debt service expenses.

Debt Service Fund - This fund is used to account for the collection of special benefit assessments, and financial resources from other sources, to fund debt associated with construction of water and sewer facilities in accordance with debt covenants.

Bay Bridge Airport – This fund is used to account for the operation of the County’s airport that serves small, private aircraft.

55

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION

(CONTINUED)

Non-Major Enterprise Funds – Non-major Enterprise Funds account for activities which are commercial in nature and are primarily or partially intended to be self-supporting. The County has two non-major enterprise funds, neither of which is meant to be fully self-supporting. These funds include the Golf Course and Public Landings and Marinas.

Fiduciary Funds – Fiduciary Funds are used to report assets held in a trustee or agency capacity for entities other than the County. The County reports the following fiduciary fund types:

Private-Purpose Trust Fund – This fund accounts for an arrangement under which monies received at tax sale, in excess of taxes due, are legally held in trust for property owners who have not been located within a legally-defined time frame.

Other Post-Employment Benefit Trust Fund – This fund only accounts for the Queen Anne’s County portion of the MACo (Maryland Association of Counties) pooled OPEB Investment Trust Fund.

Custodial Funds - These funds are used to account for deposits that are collected and held on behalf of individuals, organizations, and other governments. These monies include escrow deposits for tax ditches, zoning deposits, state and town tax collections, motor vehicle administration deposits, abandoned property, and inmate welfare funds.

Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation.

The financial statements of the County have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to local government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial principles. The most significant of the County’s accounting policies are described below.

In the process of aggregating data for the Statement of Net Position and the Statement of Activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. The effect of interfund services provided and used between functions has

not been eliminated in the Statement of Activities, since to do so would distort the direct costs and program revenues reported for the various functions concerned.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All

revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. ASSETS, LIABILITIES, AND NET POSITION OR EQUITY

1) Cash and Investments

Cash and Cash Equivalents – For Statement of Cash Flows reporting purposes, the County has defined “cash equivalents” as short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present an insignificant risk of changes in value because of changes in interest rates.

Generally, only investments with maturities of three months or less at time of purchase meet this definition. The balance sheet classification for “cash and cash equivalents” in the Statement of Cash Flows includes the following: “Equity in pooled cash and investments,” “Cash and cash equivalents,” and “Restricted Equity in pooled cash and investments.”

2) Receivables and Payables

Due To/From Other Funds and Internal Balances – Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are current and are referred to as “due to/from other funds.” On the Statement of Net Position, these balances are referred to as “internal balances” and are reported as positive and negative “assets” that net to zero for the primary government as a whole.

Trade Accounts Receivable – Trade and other receivables are shown net of an allowance for uncollectible accounts.

The allowance for uncollectible accounts is calculated based on historical collection data and, in some cases, specific account analysis.

3) Inventories, Prepaids, and Other Assets

Inventories consisting of materials, parts and supplies are recorded at cost and determined by weighted average cost method. Inventories held for resale are reported at lower of cost or market and determined by the first-in, first-out method. For budgetary purposes, the cost is recorded as an expenditure at the time individual inventory items are purchased (purchase method). The consumption method is used for financial reporting purposes whereby expense is

recognized as the items are used (consumed). Reported inventories are equally offset by a fund balance reserve.

Inventories in the Proprietary Funds are also recorded using the consumption method.

Prepaid items are payments made to vendors for services that will benefit periods beyond the end of the fiscal year.

4) Capital Assets

Capital assets, which include property, plant, equipment, intangibles, and infrastructure assets (e.g. roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The County defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year.

Such assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are recorded at acquisition value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value or functionality of the asset, or materially extend asset lives, are not capitalized.

Land and other inexhaustible assets such as intangible property easements and other land usage rights are capitalized but not depreciated, as these assets are expected to have indefinite useful lives.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. ASSETS, LIABILITIES, AND NET POSITION OR EQUITY (CONTINUED)

4) Capital Assets (continued)

Major outlays for capital assets and improvements are capitalized as the projects are constructed. Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense, incurred from the date of the borrowing until completion of the project, with interest earned on invested proceeds over the same period. Capital projects that are under construction and not yet ready for their

intended use at year-end are classified as “construction in progress” (CIP).

Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Assets Years Buildings and structures 20 - 50 Improvements other than buildings 15 - 50 Infrastructure 20 - 50 Machinery and equipment 5 - 20 Office furniture, fixtures and equipment 5 - 15 Vehicles 5 – 10

5) Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position will report a separate section for deferred outflows of resources.

This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources.

This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources until that time.

6) Other Post-Employment Benefit Obligation (OPEB)

The Queen Anne’s County post-employment benefit plan provides medical insurance benefits to retirees and their eligible dependents. The Plan’s financial information is prepared based on full accrual accounting. Expenses are recognized on the accrual basis as retirees’ insurance costs are incurred. Typically, OPEB liabilities are liquidated in the following governmental funds: the General Fund, Department of Aging, Housing and Community Services, and

Community Partnerships for Children. OPEB liabilities are also liquidated in the following enterprise funds: Sanitary Sewer, Sanitary Water, Bay Bridge Airport, Golf Course, and Public Landings and Marinas. In both the governmentwide and enterprise funds, the liability for OPEB is adjusted at the end of the fiscal year. Additional details regarding OPEB can be found in Notes 9 and 16.

58

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. ASSETS, LIABILITIES, AND NET POSITION OR EQUITY (CONTINUED)

7) Net Pension Liability

The Queen Anne’s County government participates in the Maryland State Retirement and Pension Systems. Beginning in fiscal year 2015, the County was required to report the net pension liability associated with this system. Typically, pension liabilities are liquidated in the following governmental funds: the General Fund, Department of Aging, Housing and Community Services, and Community Partnerships for Children. Pension liabilities are also liquidated in the

following enterprise funds: Sanitary Sewer, Sanitary Water, Bay Bridge Airport, Golf Course, and Public Landings and Marinas. Additional details regarding retirement benefits can be found in Notes 9 and 14.

8) Volunteer Fireman Pension Plan Length of Service Award Program (LOSAP)

The LOSAP is a single-employer defined benefit length of service award program that covers all volunteer members of the County’s Fire and EMS Commission. The County began recording the net LOSAP liability associated with this benefit in fiscal year 2019 with the implementation of Governmental Accounting Standards Board’s Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That are Not

Within the Scope of GASB Statement 68. Additional details regarding LOSAP benefits can be found in Notes 9 and 17.

9) Compensated Absences

Primary Government – The County’s policy is to pay employees for any unused vacation time, up to a maximum of 65 days, upon termination of employment. Compensated absences are reported in governmental funds only if they have matured, such as payments upon termination of employment, vacation, and compensatory time paid as they are used during the year. Such time is paid as regular wages. Compensated absences are reported in enterprise funds as they are

accrued. In the government-wide statements, the liability for compensated absences is adjusted at the end of each fiscal year to current salary costs.

Component Unit - Board of Education –The Board accrues a liability for compensated absences (vacation pay) employees have earned but have not been paid. The Board adopted the practice of paying for any unused vacation time, up to the maximum amounts employees can carry over from one year to the next, upon the termination of employment. The full amount of this obligation has been provided for in the statement of net

position.

10) Long-Term Obligations

In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statements of net assets. Bond premiums are deferred and amortized over the life of the bonds using the bonds outstanding method. Bonds payable in the proprietary fund financial statements and

noncurrent liabilities in the government-wide financial statements are reported net of the applicable bond premium or discount. Bond issuance costs are reported in the period in which they have been incurred.

59

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. ASSETS, LIABILITIES, AND NET POSITION OR EQUITY (CONTINUED)

10) Long-Term Obligations (continued)

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.

Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures. When debt is refunded in an advance refunding, payments to the Bond Refunding Agent and associated bond issuance costs are reported as other financing uses. When debt is refunded in a current refunding, the

principal on refunded debt is reported as other financing uses.

11) Net Position/Fund Equity

In the government-wide financial statements, the County has reported an unrestricted net surplus of $66,766,767. The County issues general obligation bonded debt for purposes of capital construction on behalf of the Queen Anne’s County Board of Education. The capital assets constructed with the proceeds of this debt are reported on the financial statements of Queen Anne’s County Board of Education. This amount is also classified as net investment in capital assets in the

Board of Education column of the Component Units section of the County’s government-wide Statement of Net Position. Since the Board of Education is not authorized to borrow funds, they do not have any debt.

Since the issuance of such debt has not resulted in capital assets owned by the Primary Government, the effect of this debt is reflected in the unrestricted net assets in the Governmental Activities column of the government-wide Statement of Net Position. At June 30, 2023, the County has reported outstanding general obligation debt related to assets held by the Board of Education amounting to $48,229,215 (of which $42,257,297 has been spent and the remaining $5,971,918

relates to unspent bond proceeds).

The County reports a portion of its net position in its government-wide financial statements as restricted. In this context, restricted means that, as of June 30, 2023, this portion of net position was restricted for a particular purpose either by external parties; by provision of the County Charter; or by enabling legislation. Net position restricted by enabling legislation represents legislative restrictions that a party external to the government can compel the government to honor.

For the County, such amounts represent primarily accumulated net position attributed to revenue streams that are restricted for specified purposes in the County Code. This generally includes the Rainy Day Fund, Capital Projects Fund impact fee collections and developer exactions on hand for outside entities; restricted amount for special revenue funds;

and ending restricted net assets of the Sanitary District and other enterprise funds. Such amounts, which are restricted in the government-wide Statement of Net Position, are as follows at year-end:

Governmental Business-type Amounts Restricted for: Activities Activities General government $ 14,985,939 $ - Economic/community development 3,006,352 - Public safety 5,676,785 - Conservation of natural resources 2,825,525 - Social services 955 - Debt service - 3,819,902 Other Purposes - 1,530,636 Total amounts restricted $ 26,495,556 $ 5,350,538 Note that unspent bond proceeds of $11,108,218 are included in restricted fund balance for the General Capital

Projects Fund. At the Government-Wide level, the unspent bond proceeds are offset by the liability.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. ASSETS, LIABILITIES, AND NET POSITION OR EQUITY (CONTINUED)

11) Net Position/Fund Equity (continued)

In the fund financial statements, fund balances of governmental funds are classified as follows:

Nonspendable – amounts that cannot be spent either because they are not in a spendable form or because they are legally or contractually required to be maintained intact. Nonspendable fund balances for the County include inventory and prepaid items.

Restricted – amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments.

Committed – amounts that can be used only for specific purposes determined by a formal action of the Queen Anne’s County Commissioners. The Commissioners are the highest level of decision-making authority for the County.

Commitments may be established, modified, or rescinded only through formal actions such as a County Ordinance approved by the County Commissioners.

Assigned – amounts that do not meet the criteria to be classified as restricted or committed but that are intended to be used for specific purposes. The assignment of funds rests with the County Commissioners. In addition, GASB 54 requires all positive residual amounts in special revenue funds to be reported as assigned.

Unassigned – all other spendable amounts; however, the General Fund is the only fund permitted to have a positive unassigned fund balance. Negative unassigned fund balances may occur in other governmental funds.

The County typically uses restricted fund balances first, followed by committed resources, and then assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds.

12) Property Tax

The County's real property tax is levied each July 1 on the assessed values certified as of that date for all taxable real property located in the County. The levy functions as a lien against the property. Assessed values are established by the Maryland State Department of Assessments and Taxation at estimated market value. A revaluation of all property is required to be completed every three years. Taxes are then billed to property owners and collected by the County.

Property represented by delinquent taxes is sold at a public auction in May of the following calendar year, with title transferring after foreclosure proceedings have been completed.

For small businesses that meet certain criteria and also principal residences, an installment plan is offered whereby total tax is paid in two equal installments. The first installment is due by September 30. Beginning October 1, a 1% penalty is charged on the first day of each month that the installment remains unpaid. This 1% penalty is based on the amount of the first installment only. The second installment is due by December 31. Beginning January 1, the 1% penalty would

then include all outstanding balances. The County accepts partial payments.

For non-principal residences, payment is due in full by September 30. Beginning October 1, a penalty is charged for each month that taxes remain unpaid. For new construction, completed and assessed between July 1 and December 31, a supplementary tax is levied equal to half of the full-year levy. Payment in full is due by March 31. Beginning April 1, a penalty is charged for each month that taxes remain outstanding.

61

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. ASSETS, LIABILITIES, AND NET POSITION OR EQUITY (CONTINUED)

12) Property Tax (continued)

Real and personal property taxes are levied at rates enacted by the County Commissioners in the annual budget on the assessed value as determined by the Maryland Department of Assessments and Taxation. The rates of levy cannot exceed the constant yield rate furnished by the Maryland Department of Assessments and Taxation without public notice and only after public hearings. The County tax rate for the fiscal year ended June 30, 2023 was

$0.8300 per $100 of assessed value.

E. NEW ACCOUNTING PRONOUNCEMENTS

In fiscal year ended June 30, 2023, the County adopted the following new GASB statements:

Statement No. 96, Subscription-Based Information Technology Arrangements, see Note 11 for the effects of this standard.

NOTE 2 - BUDGETS AND BUDGETARY ACCOUNTING

Pursuant to the Code of Public Local Laws of Queen Anne's County, the County Commissioners adopt an annual operating budget and real property tax rate prior to July 1 each year. This action, taken after public hearings, provides the spending authority for the fiscal year beginning on July 1. Unexpended and unencumbered appropriation authority expires the following June 30, except in the case of Capital Projects where appropriations lapse only upon completion or cancellation of

each project by the County Commissioners. The appropriated budgets are prepared at the fund, function, and departmental level. Expenditures/expenses may not legally exceed appropriations, based on the level at which they were adopted. For the General Fund, annual expenditure budgets are legally adopted at the departmental level. For all other Governmental Funds, for which annual budgets are adopted, expenditure budgets are legally adopted at the fund level.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 2 - BUDGETS AND BUDGETARY ACCOUNTING (CONTINUED)

During the fiscal year, the Commissioners may adopt supplemental appropriations. For the year ended June 30, 2023, supplemental appropriations were as follows:

Original Final Supplemental Appropriations Budget Budget Increase General Fund - expenditures and transfers $ 171,400,000 $ 186,576,573 $ 15,176,573 Special Revenue Funds that adopt annual budgets Grants Fund - expenditures and transfers 928,629 3,450,082 2,521,453 Non-Major Funds that adopt annual budgets - Department of Aging - expenditures and transfers $ 3,484,267 $ 3,812,114 $ 327,847 Housing & Community Services - expenditures and transfers 2,042,122 2,446,235 404,113

Roads Operating - expenditures and transfers - 6,066,638 6,066,638 Community Partnerships for Children - expenditures and transfers 1,118,835 1,330,832 211,997 Agricultural Transfer - expenditures and transfers 1,197,394 2,175,827 978,433 Rural Legacy - expenditures and transfers 1,650,321 1,902,438 252,117 Kent Narrows - expenditures and transfers 38,000 40,000 2,000 Fire Company Impact Fees - expenditures and transfers 357,000 605,034 248,034

Economic Development Incentive - expenditures and transfers 125,000 917,272 792,272 Parks & Rec Impact Fees - transfers and transfers 300,000 1,000,000 700,000 Total Special Revenue Funds that adopt annual budgets $ 10,312,939 $ 20,296,390 $ 9,983,451 All final budgets are presented as amended. The County Administrator may approve budget amendments of $10,000 or less throughout the year. Amendments greater than $10,000 require the approval of the County Commissioners.

Annual operating budgets are legally adopted for the General Fund, Grants Fund, and the following non-major governmental funds: Department of Aging, Housing and Community Services, Economic Development Incentive, Roads Operating, Community Partnerships for Children, Law Library, Inmate Welfare, Agricultural Transfer, Rural Legacy, Dredging Special Assessments, Kent Narrows, School Impact Fees Capital Projects, Fire Company Impact Fees Capital Projects, and Parks and

Recreation Impact Fees Capital Projects. Proprietary Fund budgets are adopted for management control only and include all enterprise funds. Budgets are adopted using the same method of accounting as that used for Fund reporting purposes.

Budgets for the General Capital Projects Fund and the Roads Capital Projects Fund reflect multi-year appropriations at the individual project level. Expenditures may not legally exceed appropriations at that level and appropriations lapse at the completion or cancellation of individual projects. Since these capital projects funds do not adopt an annual budget per project, a Statement of Revenues, Expenditures, and Changes in Fund Balances on a budget-to-actual basis is not presented

for these funds.

No General Fund departments exceeded their legally adopted expenditure budgets for the year ended June 30, 2023.

However, salary reversions are budgeted as a lump sum negative $1,378,310, but actual amounts are realized in the individual departments and are not reported as a lump sum in the reversions activity.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 3 – CASH, INVESTMENTS AND INVESTMENT INCOME

A. DEPOSITS AND INVESTMENTS

PRIMARY GOVERNMENT AND FIDUCIARY FUNDS

Deposits are maintained in a variety of financial institutions. Statutes authorize the County to invest in obligations of the United States Government, Federal government agency obligations, secured time deposits in Maryland banks, bankers’ acceptances, the Maryland Local Government Investment Pool, money market mutual funds, commercial paper and repurchase agreements secured by direct government or agency obligations.

At year-end, the County Primary Government had deposits of $111,454,435 with local banks (carrying value $111,311,950), all of which was covered by federal depository insurance or by collateral held by the County’s agent in the County’s name.

Of these options, the County participates in the Maryland Local Government Investment Pool (MLGIP), which provides all local government units of the state with a safe investment vehicle for short-term investment of funds. The State Legislature created MLGIP with the passage of Article 95 Section 22G, of the Annotated Code of Maryland. PNC Financial manages the MLGIP, under administrative control of the State Treasurer. A MLGIP Advisory Committee of current participants reviews

the activities of the Fund on a quarterly basis and provides suggestions to enhance the pool. The MLGIP portfolio is managed in a manner consistent with the Securities and Exchange Commission’s Rule 2a-7 of the Investment Company Act of 1940. Standard and Poors rates the MLGIP as AAAm. The fair value of the pool is the same as the value of the pool shares. At June 30, 2023, the County had investments in MLGIP of $91,083,720, which are recorded at cost, which

approximates fair value.

As of June 30, 2023, the County’s investments (excluding investments held for retiree health benefits), for both custodial and credit risk purposes, consisted solely of shares in the MLGIP. This investment is not deemed to have either risk and is in conformity with the County’s policy relating to minimal credit risk of investments.

The majority of the Retiree Health Trust investments are invested in the Maryland Association of Counties Pooled OPEB Trust (MACO Trust). The MACO Trust is administered by Davenport & Company LLC, and is a wholly-owned instrumentality of its members.

The assets of the Trust are managed by a Board of Trustees and consist of U.S. Treasury obligations, U.S. government agencies, corporate and foreign bonds, municipal obligations, taxable fixed income securities, mutual funds, global funds, and international equity securities.

Cash and cash equivalents for the MACO Trust include an investment in a money market mutual fund. At June 30, 2023, the weighted average maturity (WAM) for the Trust’s money market mutual fund investment was 26 days. At June 30, 2023, the short-term rating of the money market mutual fund was AAAm by Standard & Poor’s.

The main objectives of the Trust’s investment policy are the protection of investment principal, maximizing investment income through diversification while assuring financial liquidity. The policy allows for investment in U.S. and Non-U.S.

equities, corporate, government, or government agency bonds, non-U.S. bonds, Real Estate and Limited Partnerships.

64

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 3 – CASH, INVESTMENTS AND INVESTMENT INCOME (CONTINUED)

A. DEPOSITS AND INVESTMENTS (CONTINUED)

PRIMARY GOVERNMENT AND FIDUCIARY FUNDS (CONTINUED)

The Trust categorizes its fair value measurements with the fair value hierarchy established by U.S. GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the asset and gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

 Level 1 – Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

 Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets or identical assets or liabilities in less active markets, such as dealer or broker markets; and  Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on

market, exchange, dealer or broker-traded transactions.

Transactions are recorded on the trade date. Realized gains and losses are determined using the identified cost method. Any change in net unrealized gain or loss from the preceding period is reported in the statement of changes in fiduciary net position. Dividends are recorded on the ex-dividend date. Interest is recorded on the accrual basis. Following is a description of the valuation methodologies used for assets measured at fair value.

Equity securities classified in Level 1 are valued using prices quoted in active markets for those securities. Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices.

The Trust has the following recurring fair value measurements as of June 30, 2023, of which Queen Anne’s County’s portion was 23.4% of the total:

Level 1 Level 2 Level 3 Total Investments by fair value level:

Debt Securities U.S. Treasury Obligations $ - $ 4 ,007,795 $ - $ 4 ,007,795 U.S. Governmental Agencies - 5 ,416,513 - 5 ,416,513 Corporate & Foreign Bonds - 8 ,955,988 - 8 ,955,988 Municipal Obligations - 1 ,663,794 - 1 ,663,794 Equity and Mutual Fund Investments Taxable Fixed Income Funds - 3 ,441,069 - 3 ,441,069 Mutual Funds 2 9,745,434 - - 2 9,745,434 Global Funds 6 ,334,654 - - 6 ,334,654 International 1 0,314,422 - - 1 0,314,422

Total $ 4 6,394,510 $ 2 3,485,159 $ - $ 6 9,879,669 Interest rate risk is the risk that changes in market interest rates that will adversely affect the fair value of an investment.

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Trust’s investment policy states that the duration of the portfolio should be within 6 months of the Barclays Capital Aggregate Bond Index. The Trusts’ weighted average years to maturity exposed to interest rate risk as of June 30, 2023 was 17.54 years.

65

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 3 – CASH, INVESTMENTS AND INVESTMENT INCOME (CONTINUED)

A. DEPOSITS AND INVESTMENTS (CONTINUED)

PRIMARY GOVERNMENT AND FIDUCIARY FUNDS (CONTINUED)

Information about the sensitivity of the fair values of the Trust’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Trust’s investments by maturity as of June 30, 2023:

Investment Maturities (in Years) Less than 1 1 - 5 6 - 10 More than 10 Total Investments with Maturities U.S. Treasury Obligations $ - $ 7 51,325 $ 1 ,077,758 $ 2 ,178,712 $ 4 ,007,795 U.S. Governmental Agencies 5 3,881 - 6 58,947 4 ,703,685 5 ,416,513 Corporate & Foreign Bonds 6 73,235 1 ,993,047 2 ,600,937 3 ,688,769 8 ,955,988 Municipal Obligations - 5 6,086 9 5,147 1 ,512,561 1 ,663,794 Total $ 7 27,116 $ 2 ,800,458 $ 4 ,432,789 $ 1 2,083,727 $ 2 0,044,090

Credit Risk. The Trust is exposed to both market risk, the risk arising from changes in fair value, and credit risk, the risk of failure by another party to perform according to the terms of a contract. Trust assets may only be invested in investment grade bonds with a minimum rating of Baa3 by Moody’s or BBB- by S&P. The Trust bears the risk of loss only to the extent of the fair value of its respective investments. At June 30, 2023 the ratings of the underlying investments of the Trust’s

investments were as follows:

Rating Aa1/Aa2/ Baa1/Baa2/ Type Aaa Aa3 A1/A2/A3 Baa3 Not Rated Total U.S. Treasury Obligations $ 3 ,934,696 $ - $ 7 3,099 $ - $ - $ 4,007,795 U.S. Governmental Agencies 5 3,881 - - - 5 ,362,632 5,416,513 Corporate & Foreign Bonds 1 75,857 2 ,089,107 4 ,079,813 2 ,202,399 4 08,812 8,955,988 Municipal Obligations 4 05,761 1 ,032,502 8 6,328 - 1 39,203 1,663,794 Total $ 4 ,570,195 $ 3 ,121,609 $ 4 ,239,240 $ 2 ,202,399 $ 5 ,910,647 $ 20,044,090

The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, the Trust will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The Trust’s investment policy does not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments. The Trust has all of its assets on deposit with Wilmington Trust Company in

connection with its investing and cash management activities. All of the investments held by the Trust at June 30, 2023 were exposed to custodial credit risk as the investments are uninsured and unregistered.

The following tables summarizes the composition of the Trust’s investment balances by type as well as the interest rate range as of June 30, 2023:

Interest Fair Value Rate Range U.S. Treasury Obligations $ 4 ,007,795 2.25 to 4.25% U.S. Governmental Agencies 5 ,416,513 1.3 to 5.0% Corporate & Foreign bonds 8 ,955,988 0.43 to 6.5% Municipal Obligations 1 ,663,794 2.44 to 6.26% Taxable Fixed Income Funds 3 ,441,069 N/A Mutual Funds 2 9,745,434 N/A Global Funds 6 ,334,654 N/A International 1 0,314,422 N/A Total $ 6 9,879,669 66

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 3 – CASH, INVESTMENTS AND INVESTMENT INCOME (CONTINUED)

A. DEPOSITS AND INVESTMENTS (CONTINUED)

PRIMARY GOVERNMENT AND FIDUCIARY FUNDS (CONTINUED)

Concentration of credit risk. The following general asset allocation guidelines have been established through the Trust’s investment policy.

Asset Class Minimum Maximum Target Equities 50% 70% 65% Fixed Income 30% 50% 35% Cash and Equivalents 0% 10% 0% The Trust held the following investments as of June 30, 2023 that exceeded 5% of the total investment balance as of June 30, 2023:

Name Amount

VANGUARD 500 INDEX CL ADML $ 1 0,924,126

NEW WORLD FUND-R6 6 ,334,654

VANGUARD MID CAP INDEX-ADM 5 ,359,261

VANGUARD RUSSELL 1000 GR-IS 5 ,280,933

LAZARD INTL STRATEGIC EQUITY FD CL-I 5 ,202,525

TRANSAMERICA TS&W INTL EQ-IS 5 ,111,897

FULLER & THALER BEHAVIORAL SC GR R6 4 ,653,901

COHEN & STEERS REALTY INCM-I 3 ,527,213

Foreign currency risk is the risk that changes in the exchange rate of investments will adversely affect the fair value of an investment. The Trust was not exposed to Foreign Currency risk as of June 30, 2023 as the Trust did not have any investments denominated in foreign currencies.

For the year ended June 30, 2023, the annual money-weighted rate of return on investments, net of expense, was 5.7%. The money-weighted rate of return expresses investment performance, net of investment expenses, adjusted for the changing amounts actually invested.

Capital Accounts The Trust accounts for contributions, allocations, and redemptions on a per member capital account basis. The revenues, consulting and management fees, and administrative service fee are allocated pro rata to the capital accounts of each member based on committed capital. The fair value of member capital accounts is determined monthly.

Income Taxes The Trust complies with the requirements of Section 115 of the Internal Revenue Code and is exempt from income taxes.

LOSAP Funds The LOSAP funds are invested in an Empower Retirement General Investment Account (GIA). The GIA, backed by Empower Retirement’s general assets, is designed to provide stable, guaranteed rate of return and guarantee of principal.

General investment account assets are managed with reference to their associated liabilities so product specifications and obligations to clients can be met with a high degree of certainty, even when market conditions change. Investment risk management is a high priority. Strict diversification among industries and individual issuers help mitigate credit risk.

Various quantitative tools and systems, as well as qualitative approaches, are used to manage interest rate risk and liquidity risk. Assets in the GIA were managed to range from 5 to 6 years.

67

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 3 – CASH, INVESTMENTS AND INVESTMENT INCOME (CONTINUED)

A. DEPOSITS AND INVESTMENTS (CONTINUED)

PRIMARY GOVERNMENT AND FIDUCIARY FUNDS (CONTINUED)

LOSAP Funds (Continued) If the GIA Contract is fully or partially terminated, participants will receive the liquidation value of the GIA instead of the book value (i.e., contract value), which is the value disclosed on participant statements and recorded within these financial statements. The liquidation value is determined in accordance with a formula contained in the GIA Contract and is designed

to reflect the value of the assets in the general investment account. This liquidation value may be more or less than the book value of the plan’s investment in the GIA Contract. This means that upon partial or full termination of the GIA Contract a participant’s account balance in the GIA may be either increased or decreased.

The County’s LOSAP fund GIA account balance as of June 30, 2023 is $5,334,870 and is included in restricted LOSAP plan assets on the general fund balance sheet.

The fair value GAAP hierarchy is based on the valuation of inputs used to measure the fair value of the asset. Level 1 inputs are quoted market prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 are significant unobservable inputs. GIA is measured on recurring basis and is considered to be Level 3 as liquidation value is based on actuarial formula as defined under the terms of the contract with no observable price.

COMPONENT UNITS (BOARD OF EDUCATION AND LIBRARY)

Component Unit - Board of Education - At year-end, the carrying amount of deposits was $15,662,235, including $300,000 in certificates of deposit and excluding the carrying amount of fiduciary funds. At June 30, 2023, the Board had deposits of approximately $16.6 million with local banks and the bank deposits were fully insured or collateralized.

Component Unit – Library - At year-end, the carrying amount of all bank deposits, including certificates of deposit, was $1,535,319 and the balance per bank records totaled $1,568,504. Of the bank balances, $250,000 was secured by the FDIC and $1,318,504 was secured by collateral held by the pledging bank’s trust department but not in the Library’s name.

Total investment income earned in all governmental and business-type funds was credited for use as follows:

Governmental Business-type Investment Income Activities Activities Major Governmental Funds General Fund $ 4,808,600 $ - General Capital Projects 765,760 - Roads Capital Projects 193,842 - Grants Fund - - Non-Major Governmental Funds 680,742 - Major Enterprise Funds Sanitary District - 1,045,512 Bay Bridge Airport - 2,052 Non-Major Enterprise Funds - - Total Investment Income $ 6,448,944 $ 1,047,564

68

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 4 - ACCOUNTS RECEIVABLE

Receivables as of June 30, 2023 for the governmental and business-type activities are as follows:

Total General Roads Non-Major Total Total Governmental General Capital Capital Grants Governmental Governmental Enterprise and Enterprise Accounts Receivable Fund Projects Projects Fund Funds Funds Funds Funds Receivables Taxes - Real Property $ 250,781 $ - $ - $ - $ - $ 250,781 $ - $ 250,781 Taxes - Other 569,603 - - - - 569,603 - 569,603 Subtotal Taxes Receivable (Net) 820,384 - - - - 820,384 - 820,384

Other Accounts Receivable:

QAC - PHA - 733,121 - - - 733,121 - 733,121

Sanitary District - User and Septage Fees - - - - - - 599,381 599,381 Airport - Fuel Sales, User and Rental Fees - - - - - - 22,935 22,935 Miscellaneous Receivables 169,745 13,057 - 12,371 89,381 284,554 66,091 350,645 Subtotal Accounts Receivable (Net) 169,745 746,178 - 12,371 89,381 1,017,675 688,407 1,706,082 Loans Receivable - - - - 6,289,663 6,289,663 101,834 6,391,497 Special Assessments - - 27,265 - 607,965 635,230 - 635,230

Intergovernmental Income Taxes Held by State 39,353,092 - - - - 39,353,092 - 39,353,092 Grants Receivable 379,152 521,298 - 698,605 865,853 2,464,908 550,013 3,014,921 Recordation Tax 868,370 - - - - 868,370 - 868,370 State-Highway User Tax - - - - 426,179 426,179 - 426,179 Subtotal Due from Other Governments 40,600,614 521,298 - 698,605 1,292,032 43,112,549 550,013 43,662,562 Restricted Receivables

Accounts Receivable (Net) - - - - - - 3,970,000 3,970,000 Special Assessments Receivable (Net) - - - - - - 16,433,398 16,433,398 Subtotal Restricted Receivables - - - - - - 20,403,398 20,403,398 Total Receivables $ 41,590,743 $ 1,267,476 $ 27,265 $ 710,976 $ 8,279,041 $ 51,875,501 $ 21,743,652 $ 73,619,153 The County does not have any allowance for doubtful accounts related to the above receivables.

In Fiscal Year 2014, the County issued bonds on behalf of three mid-shore counties (Dorchester, Caroline, and Talbot) in order to provide funding for the new Center for Allied Health and Athletics at Chesapeake College. Therefore, in addition to the Governmental and Enterprise Fund receivables listed above, the County also has a $3.1 million receivable on its governmentwide Statement of Net Position, which represents the collective obligation of the three aforementioned counties for funding the

facility at Chesapeake College.

69

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 4 - ACCOUNTS RECEIVABLE (CONTINUED)

The County expects to receive all receivables listed in the table within one year, excluding the following items.

Loans receivable in the amount of $6,289,663 relate to the Housing and Community Services, Impact Fees, and Revolving Loan Special Revenue Funds. Loans receivable in the amount of $6,087,647 for Housing and Community Services will be repaid when the homes are sold, in virtually all cases. These loans support housing rehabilitation and home-ownership. When the loans are repaid to the County, the funds are then loaned out again to serve the same purpose. Loans for the Revolving

Loan Fund in the amount of $90,000 are also repaid over a number of years. The remaining loan receivable balance of $112,016 relates to school, fire, and parks and recreation impact fees. In July 2007, the County began accepting promissory notes for impact fees, in certain situations, with the understanding that when certificate of occupancy was obtained, these notes would be paid in full. To ensure repayment, the notes attach to the property incurring the impact fee; therefore, payment will be

required automatically prior to legal transfer of title.

Income taxes held by the State in the amount of $39,353,092 have been estimated by the State as income tax due to the County.

Local income tax revenue is collected by the State and distributed to the local governments throughout the year. The State’s distribution of the County’s share of income taxes lags behind the County’s fiscal year. However, the State indicates that this is a reasonable estimate of their liability to the County and the County reports this amount in accordance with GAAP.

Special Assessments in the amount of $635,230 represent receivables for governmental activities. Part of this amount consists of $27,265 for assessments levied on homeowners to reimburse the County for construction or upgrade of private roads prior to their acceptance into the County Roads System. The other part of this amount consists of $607,965 for assessments levied on homeowners relating to dredging costs. Payment of these assessments is expected over a number of years.

Restricted Special Assessments in the amount of $16,433,398 represent restricted receivables for the Sanitary District. These receivables relate to assessments levied on homeowners for the construction of sewer and water lines, as well as for hook up costs. Only the current portion due is billed and the remaining balances are repaid over a number of years, as determined by the original agreement. As the funds are paid back, the County uses the money to repay debt.

NOTE 5 – UNEARNED REVENUE

Governmental funds report unearned revenue in connection with resources that have been received, but unearned. At the end of the current fiscal year, the components of unearned revenue were reported as follows:

General Roads Non-Major Total Total General Capital Capital Grants Governmental Governmental Enterprise Unearned Revenue Fund Projects Projects Fund Funds Funds Funds Property Tax Deferrals $ 15,288 $ - $ - $ - $ - $ 15,288 $ - Inspection Fees Collected in Advance - - - - - - 180,047 Grant Drawdowns in excess of Expenditures - - - 8,896,813 831,583 9,728,396 - Miscellaneous 9,271 - - - - 9,271 289,632

Total Unearned Revenue $ 24,559 $ - $ - $ 8,896,813 $ 831,583 $ 9 ,752,955 $ 469,679 70

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 6 – CAPITAL ASSETS

PRIMARY GOVERNMENT

Changes in the County’s capital assets for governmental activities for the year ended June 30, 2023 are summarized as follows, with depreciation shown separately. Assets resulting from completed capital projects are shown in the Transfers column. Asset retirements are shown in the Decreases column.

Balance Balance Governmental Activities June 30, 2022 Increases Transfers Decreases June 30, 2023 Capital Assets, not being depreciated:

Land $ 3 8,674,653 $ 4 9,100 $ 1 61,563 $ - $ 3 8,885,316 Intangible Rights - Easements 8 21,819 - - - 8 21,819 Land Improvements 3 ,714,283 - - - 3 ,714,283 Construction in Progress 9 ,943,879 2 ,714,939 (398,198) (720,956) 1 1,539,664 Land - Inexhaustible Infrastructure Improvements 4 3,890,863 - - - 4 3,890,863 Total Capital Assets, not being depreciated 9 7,045,497 2 ,764,039 (236,635) (720,956) 9 8,851,945

Capital Assets, being depreciated:

Buildings and Building Improvements 7 2,354,564 1 14,506 - - 7 2,469,070 Improvements other than Buildings 1 8,188,150 3 ,455,807 6 2,276 - 2 1,706,233 Vehicles 1 6,398,634 2 ,032,301 4 2,418 (845,256) 1 7,628,097 Equipment 1 5,653,189 1 ,765,125 1 04,013 (368,938) 1 7,153,389 Furniture and Fixtures 1 3,160,498 1 68,315 2 7,113 - 1 3,355,926 Infrastructure Improvements - Depreciable 1 8,623,747 8 7,786 - - 1 8,711,533

Right-to-use asset - 6 38,500 - - 6 38,500 Subscription asset - 1 ,503,069 - - 1 ,503,069 Total Capital Assets, being depreciated 1 54,378,782 9 ,765,409 2 35,820 (1,214,194) 1 63,165,817 Less Accumulated Depreciation for:

Buildings and Building Improvements 2 0,588,315 1 ,576,995 - - 2 2,165,310 Improvements other than Buildings 5 ,363,326 9 10,210 - - 6 ,273,536 Vehicles 9 ,763,613 1 ,478,633 (8,315) (811,118) 1 0,422,813 Equipment 9 ,153,753 1 ,017,928 4 ,375 (346,775) 9 ,829,281 Furniture and Fixtures 5 ,519,409 1 ,454,511 - - 6 ,973,920 Infrastructure Improvements - Depreciable 1 0,161,056 2 97,951 - - 1 0,459,007

Right-to-use asset - 6 7,655 - - 6 7,655 Subscription asset - 3 11,303 - - 3 11,303 Total Accumulated Depreciation 6 0,549,472 7 ,115,186 (3,940) (1,157,893) 6 6,502,825 Total Capital Assets, being depreciated, net 9 3,829,310 2 ,650,223 2 39,760 (56,301) 9 6,662,992 Governmental activities Capital Assets, net $ 1 90,874,807 $ 5 ,414,262 $ 3 ,125 $ (777,257) $ 1 95,514,937 71

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 6 – CAPITAL ASSETS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

Changes in the County’s capital assets for business-type activities for the year ended June 30, 2023 are summarized as follows, with depreciation shown separately. Assets resulting from completed capital projects are shown in the Transfers column. Asset retirements are shown in the Decreases column.

Balance Balance Business-Type Activities June 30, 2022 Increases Transfers Decreases June 30, 2023 Capital Assets, not being depreciated:

Land $ 1 0,916,330 $ - $ - $ - $ 1 0,916,330 Land Improvements 9 ,500 - - - 9 ,500 Intangible Rights 6 ,140 - - - 6 ,140 Construction in Progress 4 ,033,099 6 ,363,755 (2,193,875) - 8 ,202,979 Land - Inexhaustible Infrastructure Improvements 2 ,481,094 - - - 2 ,481,094 Total Capital Assets, not being depreciated 1 7,446,163 6 ,363,755 (2,193,875) - 2 1,616,043 Capital Assets, being depreciated:

Buildings and Improvements to Buildings 1 6,193,029 1 2,744 - - 1 6,205,773 Improvements other than Buildings 1 5,727,802 8 17,612 9 89,021 - 1 7,534,435 Vehicles 1 ,990,676 5 0,967 1 8,713 (40,998) 2 ,019,358 Equipment 2 4,515,622 3 77,052 - (60,961) 2 4,831,713 Furniture and Fixtures 6 2,873 1 0,504 - (1,002) 7 2,375 Infrastructure Improvements - Depreciable 1 31,532,397 4 ,034,144 1 ,204,854 - 1 36,771,395

Right-to-use asset 8 0,630 1 42,748 - (42,323) 1 81,055 Total Capital Assets, being depreciated 1 90,103,029 5 ,445,771 2 ,212,588 (145,284) 1 97,616,104 Less Accumulated Depreciation for:

Buildings and Improvements to Buildings 1 0,686,103 2 75,154 - - 1 0,961,257 Improvements other than Buildings 7 ,758,535 5 88,069 - - 8 ,346,604 Vehicles 1 ,387,619 1 24,420 1 8,713 (40,998) 1 ,489,754 Equipment 1 6,374,953 5 59,312 - (57,210) 1 6,877,055 Furniture and Fixtures 2 5,358 4 ,860 - (1,002) 2 9,216 Infrastructure Improvements - Depreciable 4 2,019,578 2 ,683,356 - - 4 4,702,934 Right-to-use asset 4 5,292 3 3,712 - (42,323) 3 6,681

Total Accumulated Depreciation 7 8,297,438 4 ,268,883 1 8,713 (141,533) 8 2,443,501 Total Capital Assets, being depreciated, net 1 11,805,591 1 ,176,888 2 ,193,875 (3,751) 1 15,172,603 Business-Type activities Capital Assets, net $ 1 29,251,754 $ 7 ,540,643 $ - $ (3,751) $ 1 36,788,646 72

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 6 – CAPITAL ASSETS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental Business-type Activities Activities General Government $ 1,385,286 $ - Public Safety 2,659,036 - Public Works 1,505,236 - Parks & Recreation 1,113,906 - Health and Social Services 340,892 - Education and Library 25,130 - Conservation of Natural Resources 41,623 - Economic/Community Development 44,077 - Major Enterprise Funds:

Sanitary District - 3,608,017 Bay Bridge Airport - 464,183 Non-Major Enterprise Funds - 196,683 Total amounts restricted $ 7,115,186 $ 4,268,883 73

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 6 – CAPITAL ASSETS (CONTINUED)

COMPONENT UNITS

Board of Education: Capital asset activity for the year ended June 30, 2023 is as follows:

Balance Balance Board of Education June 30, 2022 Increases Transfers Decreases June 30, 2023 Capital Assets, not being depreciated:

Land $ 6 ,363,040 $ - $ - $ - $ 6 ,363,040 Construction in Progress 1 22,528 2 ,400,763 (122,528) - 2 ,400,763 Total Capital Assets, not being depreciated 6 ,485,568 2 ,400,763 (122,528) - 8 ,763,803 Capital Assets, being depreciated:

Land Improvements 5 ,410,966 - - - 5 ,410,966 Buildings 2 12,308,322 - 1 22,528 - 2 12,430,850 Furniture, Fixtures, and Equipment 1 8,873,881 6 94,533 - (90,044) 1 9,478,370 Leased Equipment - 3 79,187 - - 3 79,187 Total Capital Assets, being depreciated 2 36,593,169 1 ,073,720 1 22,528 (90,044) 2 37,699,373 Less Accumulated Depreciation for:

Land Improvements 4 ,926,389 1 00,323 - - 5 ,026,712 Buildings 7 7,460,351 4 ,511,186 - - 8 1,971,537 Furniture, Fixtures, and Equipment 1 3,333,642 1 ,432,555 - (90,044) 1 4,676,153 Leased Equipment - 8 7,546 - - 8 7,546 Total Accumulated Depreciation 9 5,720,382 6 ,131,610 - (90,044) 1 01,761,948 Total Capital Assets, being depreciated, net 1 40,872,787 (5,057,890) 1 22,528 - 1 35,937,425 Capital Assets, net $ 1 47,358,355 $ (2,657,127) $ - $ - $ 1 44,701,228

74

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 6 – CAPITAL ASSETS (CONTINUED)

COMPONENT UNITS (CONTINUED)

Queen Anne’s County Free Library: Capital asset activity for the year ended June 30, 2023 is as follows:

Balance Balance Library June 30, 2022 Increases Transfers Decreases June 30, 2023 Capital Assets, not being depreciated:

Artwork $ 2 9,850 $ - $ - $ - $ 2 9,850 Total Capital Assets, not being depreciated 2 9,850 - - - 2 9,850 Capital Assets, being depreciated:

Books and Media 1 ,763,794 1 95,124 - (101,275) 1 ,857,643 Building Improvements 4 02,207 - - - 4 02,207 Equipment 3 24,338 2 19,117 - - 5 43,455 Right-to-use 2 7,018 - - - 2 7,018 Total Capital Assets, being depreciated 2 ,517,357 4 14,241 - (101,275) 2 ,830,323 Less Accumulated Depreciation 1 ,060,205 2 24,957 - (97,859) 1 ,187,303 Total Capital Assets, being depreciated, net 1 ,457,152 1 89,284 - (3,416) 1 ,643,020

Capital Assets, net $ 1 ,487,002 $ 1 89,284 $ - $ (3,416) $ 1 ,672,870

NOTE 7 - INTERFUND RECEIVABLES AND PAYABLES

Interfund receivables and payables are usually used by the County to cover temporary cash deficits in individual funds until grant or similar resources are received.

The interfund and intra-entity receivables and payables consist of the following at June 30, 2023:

Due from Fund Non- Bay Non- Total Due to Fund General Capital Roads Grants Major Sanitary Bridge Major Due Fund Projects Capital Fund Governmental District Airport Enterprise From General Fund $ 688,090 $ - $ - $ - $ - $ 394,043 $ - $ - $ 2 94,047 $ 688,090 General Capital Projects 935,217 - - - - - - 935,217 - 935,217 Roads Capital - - - - - - - - - - Grants Fund - - - - - - - - - - Non-Major Governmental - - - - - - - - - -

Sanitary District - - - - - - - - - - Bay Bridge Airport - - - - - - - - - - Non-Major Enterprise - - - - - - - - - - Total Due To Fund $ 1,623,307 $ - $ - $ - $ - $ 394,043 $ - $ 935,217 $ 2 94,047 $ 1,623,307 Interfund receivables and payables are reported on the Statement of Net Position as Internal Balances, net of transactions between the same types of funds.

75

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 8 - INTERFUND TRANSFERS

Interfund transfers represent a transfer of resources from one fund to another without expectation of repayment. Usually, these transfers are undertaken to enable the receiving entity to provide services that the government has determined to be in the best interest of the County.

The transfers from the General Fund provide funding for capital projects and to fund programs in the non-major special revenue funds. Transfers from the General Fund to the Airport are to pay for a portion of debt service related to an Airport project. Transfers from General Capital Projects represent a transfer to the Golf Course Enterprise Fund for a specific project.

Transfers from Water and Sewer Sanitary District funds are to provide funding for the County mapping project. The transfers from Restricted and Debt Service Sanitary funds are to cover Sanitary related debt service. Transfers from Non- Major Governmental Funds provided funding from the Impact Fee Funds to the General Fund and General Capital Projects.

There was also a transfer from the Grants Fund and also a non-major governmental fund to the Economic Development Incentive Fund for program funding.

The following interfund transfers were made during the fiscal year ended June 30, 2023:

Transfers In Non- Bay Non- Total Transfers Out General Capital Roads Grants Major Sanitary Bridge Major Transfers Fund Projects Capital Fund Governmental District Airport Enterprise In General Fund $ 23,661,847 $ - $ 15,791,988 $ 550,000 $ 36,935 $ 7,223,469 $ - $ 59,455 $ - $ 23,661,847 General Capital Projects 470,000 - - - - - - - 4 70,000 470,000 Roads Capital - - - - - - - - - - Grants Fund 240,000 - - - - 240,000 - - - 240,000

Non-Major Governmental 4,130,063 2,857,792 800,000 - - 472,271 - - - 4,130,063 Sanitary District 3,875,328 - 10,000 - - - 3,865,328 - - 3,875,328 Bay Bridge Airport - - - - - - - - - - Non-Major Enterprise - - - - - - - - - - Total Transfers Out $ 32,377,238 $ 2,857,792 $ 16,601,988 $ 550,000 $ 36,935 $ 7,935,740 $ 3,865,328 $ 59,455 $ 4 70,000 $ 32,377,238 Reconciliation of interfund transfers to the Statement of Activities

Governmental Funds Transfers In $ 27,982,455 Enterprise Funds Transfers In $ 4,394,783 Governmental Funds Transfers Out ( 28,501,910) Enterprise Funds Transfers Out (3,875,328) Government-Wide Transfer Out 3,125 Reclassification of Transfer of Capital Asset (to) from Governmental Fund (3,125) Total Governmental Activities $ ( 516,330) Total Business-Type Activities $ 516,330 The above entries for $3,125 relate to capital assets with a remaining book value transferred from Enterprise Funds to

Governmental Activities.

76

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 - NONCURRENT LIABILITIES

A. CHANGES IN NONCURRENT LIABILITIES

During the year ended June 30, 2023, the following changes occurred in the noncurrent liabilities of the primary government’s governmental activities:

PRIMARY GOVERNMENT Retirements Due in Balance Additions and Balance Due Within More than Governmental Activities June 30, 2022 of debt Repayments June 30, 2023 One Year One Year General Bonds Payable $ 1 26,929,028 $ - $ 8,642,603 $ 118,286,425 $ 8,421,894 $ 109,864,531 General Bonds Payable - Related to PHA 5 31,258 - 88,251 443,007 66,494 376,513 General Bonds Payable - Related to Ches College 3 ,308,978 - 220,813 3,088,165 229,388 2,858,777

Notes Payable 6 55,957 - 47,816 608,141 47,816 560,325 Bond Premiums 1 1,371,705 - 937,650 10,434,055 872,744 9,561,311 Subtotal Governmental Activities Debt 1 42,796,926 - 9,937,133 132,859,793 9,638,336 123,221,457 Lease Liability - 6 38,500 23,832 614,668 62,314 552,354 Subscription Liability - 1 ,503,069 324,189 1,178,880 298,044 880,836

OPEB 3 6,268,523 - 9,458,276 26,810,247 - 26,810,247

Net Pension Liability 2 4,007,806 8 ,562,493 - 32,570,299 - 32,570,299 LOSAP Liability 1 0,267,761 - 2,509,893 7,757,868 - 7,757,868 Compensated Absences 3 ,527,165 2 ,013,748 1,915,250 3,625,663 2,144,941 1,480,722 Total Governmental Activities Debt $ 2 16,868,181 $ 1 2,717,810 24,168,573 $ 205,417,418 $ 12,143,635 $ 193,273,783 Less College Reimbursements 52,989 Total Governmental Retirements and Repayments $ 24,115,584

The reconciliation from retirements and repayments in the above table to the total principal payments on the Statement of Revenues, Expenditures, and Changes in Fund Balance is as follows:

Retirements and Repayments General Bonds Payable $ 8 ,642,603 General Bonds Payable - PHA 8 8,251 Payments made by PHA - Notes Payable 4 7,816 LESS: Distributions of 2020 and 2021 Bonds (28,908) LESS: College Reimbursements (52,989) Total Principal Payments $ 8 ,696,773 The County added amounts to several bond offerings on behalf of Chesapeake College, which cannot borrow money on its own. The College reimbursed the County $52,989 for this year’s principal payments.

77

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

A. CHANGES IN NONCURRENT LIABILITIES (CONTINUED)

During the year ended June 30, 2023, the following changes occurred in the noncurrent liabilities of the primary government’s business-type activities:

PRIMARY GOVERNMENT

Retirements Due in Balance Additions and Balance Due Within More than Business-Type Activities June 30, 2022 of debt Repayments June 30, 2023 One Year One Year Golf Course $ 8 4,140 $ - $ 4,236 $ 79,904 $ 4,419 $ 75,485 Bay Bridge Airport 1 ,430,227 2 8,908 102,441 1,356,694 109,618 1,247,076 Public Landings and Marinas 6 81,370 - 60,564 620,806 63,187 557,619 Sanitary District 3 3,291,256 3 ,946,501 1,915,181 35,322,576 2,118,910 33,203,666

Subtotal Debt 3 5,486,993 3 ,975,409 2,082,422 37,379,980 2,296,134 35,083,846 Bond Premiums Golf Course 5 ,438 - 362 5,076 362 4,714 Bay Bridge Airport 7 5,622 - 7,484 68,138 7,485 60,653 Public Landings and Marinas 8 5,511 - 9,767 75,744 9,766 65,978 Subtotal Bond Premiums 1 66,571 - 17,613 148,958 17,613 131,345 Subtotal Business-Type Activities Debt 3 5,653,564 3 ,975,409 2,100,035 37,528,938 2,313,747 35,215,191

Lease Liability 3 9,225 1 42,748 37,592 144,381 33,666 110,715

OPEB 7 ,052,186 - 1,197,210 5,854,976 - 5,854,976

Net Pension Liability 2 ,176,280 5 14,423 - 2,690,703 - 2,690,703 Compensated Absences 5 21,292 3 6,939 - 558,231 330,249 227,982 Total Business-Type Activities Debt $ 4 5,442,547 $ 4 ,669,519 $ 3,334,837 $ 46,777,229 $ 2,677,662 $ 44,099,567 Additions of debt listed for the Bay Bridge Airport include $28,908 in distributions of the 2020 and 2021 Bonds from governmental activities.

78

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

A. CHANGES IN NONCURRENT LIABILITIES (CONTINUED)

During the year ended June 30, 2023, the following changes occurred in the noncurrent liabilities of the primary government’s Component Units:

COMPONENT UNITS

Retirements Due in Balance Additions and Balance Due Within More than Board of Education and Free Library June 30, 2022 of debt Repayments June 30, 2023 One Year One Year Board of Education Compensated Absences $ 8 87,805 $ 2 29,418 $ - $ 1,117,223 $ - $ 1,117,223 Financed Purchases 1 ,377,894 - 207,893 1,170,001 221,055 948,946 Intangible Right-to-Use Leases - 3 79,187 82,266 296,921 85,350 211,571

OPEB 1 95,421,376 - 57,417,806 138,003,570 - 138,003,570

Net Pension Liability 4 ,309,601 1 ,582,670 - 5,892,271 - 5,892,271 Subtotal 2 01,996,676 2 ,191,275 57,707,965 146,479,986 306,405 146,173,581 Free Library Lease Payable 1 3,852 - 5,515 8,337 5,735 2,602

OPEB 6 81,330 - 150,469 530,861 - 530,861

Subtotal 6 95,182 - 155,984 539,198 5,735 533,463 Total Component Units Debt $ 2 02,691,858 $ 2 ,191,275 $ 57,863,949 $ 147,019,184 $ 312,140 $ 146,707,044 Long-term liabilities are normally paid from the General fund.

79

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

B. GENERAL OBLIGATION BONDS, NOTES, LEASE LIABILITY, SUBSCRIPTION LIABILITY, OTHER POST-EMPLOYMENT BENEFIT OBLIGATION, NET PENSION LIABILITY, VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM LIABILITY, AND COMPENSATED ABSENCES

PRIMARY GOVERNMENT

All general obligation bonds are valid and legally binding general obligations of Queen Anne’s County and constitutes an irrevocable pledge of its full faith and credit and unlimited taxing power. Governmental bonds are payable from ad valorem taxes, unlimited as to rate or amount on all real, tangible, personal, and certain intangible property subject to taxation at full rate for local purposes in the County.

Business-type bonds, while representing general obligations of the County government, are to be paid from income earned by the related enterprise fund. Enterprise funds that have such debt are: Sewer Operations, Bay Bridge Airport, Blue Heron Golf Course, and Public Landings and Marinas.

During fiscal year 2019, the County implemented Governmental Accounting Standards Board’s Statement (GASB) Statement 73, Accounting and Financial Reporting for Pensions and Related Assets That are Not Within the Scope of GASB Statement 68. The County’ Fire and EMS Commission Pension Plan Length of Service Award Program (“LOSAP”) is included in GASB 73 reporting. For governmental funds, the LOSAP obligations are reported in the government-wide

statements in the public safety function. There are not any LOSAP obligations in the enterprise funds. LOSAP costs in governmental funds are charged to the General Fund. Additional information can be found in Note 16.

During fiscal year 2018, the County implemented the provisions of Governmental Accounting Standards Board (GASB) Statement 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions. For governmental funds, OPEB is reported in the government-wide statements in the function in which that employee usually charges their productive time. For enterprise funds, OPEB is reported in the enterprise fund in which that employee charges

the majority of their productive time. OPEB costs in governmental funds are charged to the General Fund. Additional information can be found in Note 15, Other Post-Employment Benefits.

During fiscal year 2015, the County implemented the provisions of Governmental Accounting Standards Board (GASB) Statement 68, Accounting and Financial Reporting for Pensions. For governmental funds, the net pension liability is reported in the government-wide statements in the function in which that employee usually charges their productive time. For enterprise funds, these obligations are reported in the enterprise fund in which the employee charges the majority of their

productive time. Net Pension Liability costs in governmental funds are charged to the Governmental Fund in which the employee charges their time. Additional information can be found in Note 13, Retirement Plans.

Compensated absences that mature during the fiscal year, in that they are paid when the employee takes vacation leave or upon the employee’s termination, are typically liquidated from the governmental or enterprise fund in which that employee charges the majority of their productive time. They are paid as regular wages. Compensated absences that do not mature during the fiscal year are accrued at year-end as an adjustment to liability for compensated absences. For governmental

funds, these adjustments are reported in the government-wide statements in the function in which that employee usually charges their productive time. For enterprise funds, these adjustments are reported in the enterprise fund in which that employee charges the majority of their productive time. In the case of grant-funded activities that disallow compensated absences as an eligible cost, they are paid as administrative wages in the same Fund. Compensated absences in governmental

funds are primarily charged to the General Fund or Special Revenue Funds; they are usually not charged to Capital Projects Funds.

80

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

B. GENERAL OBLIGATION BONDS, NOTES, LEASE LIABILITY, SUBSCRIPTION LIABILITY, OTHER POST-EMPLOYMENT BENEFIT OBLIGATION, NET PENSION LIABILITY, VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM LIABILITY, AND COMPENSATED ABSENCES

(CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

As of June 30, 2023, general obligation bonds and notes payable for governmental activities are comprised of the following, along with lease liability, subscription liability, other post-employment benefit obligation, net pension liability, volunteer fireman pension plan length of service award program liability and compensated absences:

Year Amount Outstanding Due in Paying Interest Series of Original June 30, Due Within More than Governmental Activities Fund Rate Matures Issue 2023 One Year One Year General Obligation Bonds Payable 2014 Public Facilities General 2.00%-4.00% 2034 $ 1 7,590,000 $ 10,673,468 $ 792,823 $ 9,880,645 2015 Public Facilities General 3.00%-5.00% 2036 1 1,622,756 8,468,238 504,792 7,963,446 2015 Refunding Bonds General 2.00%-5.00% 2027 1 3,521,625 6,068,266 1,443,211 4,625,055

2016 Public Facilities General 2.00%-4.00% 2036 1 3,934,364 10,860,096 600,581 10,259,515 2017 Public Facilities General 3.00%-5.00% 2037 1 2,600,000 10,435,000 500,000 9,935,000 2018 Public Facilities General 3.00%-5.00% 2038 1 6,000,000 13,865,000 605,000 13,260,000 2019 Public Facilities General 3.00%-5.00% 2039 1 1,000,000 9,910,000 395,000 9,515,000 2019 Refunding Bonds General 4.00%-5.00% 2029 1 4,236,594 10,711,254 1,305,682 9,405,572

2020 Public Facilities General 2.00%-5.00% 2040 9 ,000,000 8,391,475 313,975 8,077,500 2021 Public Facilities General 1.50%-5.00% 2041 1 3,000,000 12,138,989 637,634 11,501,355 2021 Refunding Bonds General 1.50%-5.00% 2030 1 0,835,995 8,964,639 933,196 8,031,443 2022 Public Facilities General 3.375%-5.00% 2043 7 ,800,000 7,800,000 390,000 7,410,000 2015 Refunding Facilities (2006 Bonds) Due from PHA 2.00%-3.00% 2027 2 40,112 107,757 25,628 82,129

2019 Refunding Facilities (2009 Bonds) Due from PHA 4.00%-5.00% 2029 4 45,590 335,250 40,866 294,384 2014 Public Facilities Due from other Counties 2.00%-4.00% 2034 4 ,800,000 3,088,165 229,388 2,858,777 Subtotal Bonds Payable 121,817,597 8,717,776 113,099,821 Notes Payable State of Maryland - Grove Ck. Spec. Rev. 0.00% 2034 5 10,617 224,667 20,425 204,242 State of Maryland - Narrows Pointe Spec. Rev. 0.00% 2037 5 25,318 383,474 27,391 356,083

Subtotal Notes Payable 6 08,141 4 7,816 5 60,325 Subtotal Bonds and Notes Payable 122,425,738 8,765,592 113,660,146 Bond Premiums 10,434,055 872,744 9,561,311 Subtotal Governmental Activities Debt 132,859,793 9,638,336 123,221,457 Lease Liability 614,668 62,314 552,354 Subscription Liability 1,178,880 298,044 880,836

OPEB 26,810,247 - 26,810,247

Net Pension Liability 32,570,299 - 32,570,299 LOSAP Liability 7,757,868 - 7,757,868 Compensated Absences 3,625,663 2,144,941 1,480,722 Total Governmental Activities $ 205,417,418 $ 12,143,635 $ 193,273,783 81

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

B. GENERAL OBLIGATION BONDS, NOTES, LEASE LIABILITY, SUBSCRIPTION LIABILITY, OTHER POST-EMPLOYMENT BENEFIT OBLIGATION, NET PENSION LIABILITY, VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM LIABILITY, AND COMPENSATED ABSENCES

(CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

The annual requirements to amortize general obligation bonds and notes payable outstanding as of June 30, 2023 for governmental activities are as follows:

Governmental Activities Year Ending Governmental Bonds Payable Governmental Notes Payable June 30, Principal Interest Total Principal Interest Total 2024 $ 8,717,776 $ 4,371,049 $ 1 3,088,825 $ 47,816 $ - $ 47,816 2025 9,081,655 4,019,195 1 3,100,850 47,816 - 47,816 2026 9,449,130 3,627,819 1 3,076,949 47,816 - 47,816 2027 9,836,236 3,229,932 1 3,066,168 47,816 - 47,816 2028 8,547,050 2,815,797 1 1,362,847 47,816 - 47,816

2029 - 2033 39,186,138 8,975,922 4 8,162,060 239,080 - 239,080 2034 - 2038 28,038,710 3,196,368 3 1,235,078 129,981 - 129,981 2039 - 2043 8,960,902 411,903 9 ,372,805 - - - $ 121,817,597 $ 30,647,985 $ 1 52,465,582 $ 608,141 $ - $ 608,141 82

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

B. GENERAL OBLIGATION BONDS, NOTES, LEASE LIABILITY, SUBSCRIPTION LIABILITY, OTHER POST-EMPLOYMENT BENEFIT OBLIGATION, NET PENSION LIABILITY, VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM LIABILITY, AND COMPENSATED ABSENCES

(CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

General obligation bonds and notes payable outstanding as of June 30, 2023 for business-type activities are comprised of the following, as well as lease liability, other post-employment benefit obligation, net pension liability, and compensated absences:

Year Amount Outstanding Due in Interest Series of Original June 30, Due Within More than Business -Type Activities Rate Matures Issue 2023 One Year One Year Golf Course 2016 Public Facilities Bonds 2.00%-4.00% 2036 $ 85,636 $ 79,904 $ 4,419 $ 75,485 Bond Premiums 5,076 362 4,714 Subtotal Golf Course 84,980 4,781 80,199 Bay Bridge Airport 2014 Public Facilities Bonds 2.00%-4.00% 2034 964,940 643,368 47,789 595,579

2015 Public Facilities Bonds 3.00%-5.00% 2036 577,244 506,762 30,208 476,554 2015 Refunding Bonds 2.00%-5.00% 2027 173,556 77,889 18,524 59,365 2019 Refunding Bonds 4.00%-5.00% 2029 92,167 69,344 8,453 60,891 2020 Public Facilities Bonds 2.00%-5.00% 2040 22,686 23,525 1,026 22,499 2021 Public Facilities Bonds 1.50%-5.00% 2041 26,594 26,594 2,659 23,935 2021 Refunding Bonds 1.50%-5.00% 2030 11,134 9,212 959 8,253

Bond Premiums 68,138 7,485 60,653 Subtotal Airport 1,424,832 117,103 1,307,729 Public Landings and Marinas 2015 Refunding Bonds 2.00%-5.00% 2027 24,707 11,088 2,637 8,451 2019 Refunding Bonds 4.00%-5.00% 2029 490,649 369,151 44,999 324,152 2021 Refunding Bonds 1.50%-5.00% 2030 67,871 56,150 5,845 50,305 2021 Public Facilities 3.375%-5.00% 2043 194,123 184,417 9,706 174,711 Bond Premiums 75,744 9,766 65,978

Subtotal Public Landings and Marinas 696,550 72,953 623,597 Sanitary District Maryland Water Quality-2005 Enhancement 1.00% 2027 18,252,291 3,931,903 971,990 2,959,913 Maryland Water Quality-SKI Phase One 0.80% 2049 29,342,242 27,444,172 960,439 26,483,733 Maryland Water Quality-SKI Phase Two 0.80% 2053 3,946,501 3,946,501 186,481 3,760,020 Subtotal Sanitary District 35,322,576 2,118,910 33,203,666

Total Business-Type Activities Debt 37,528,938 2,313,747 35,215,191 Lease Liability 144,381 33,666 110,715

OPEB 5,854,976 - 5,854,976

Net Pension Liability 2,690,703 - 2,690,703 Compensated Absences 558,231 330,249 227,982 Total Business-Type Activities $ 46,777,229 $ 2,677,662 $ 44,099,567 83

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

B. GENERAL OBLIGATION BONDS, NOTES, LEASE LIABILITY, SUBSCRIPTION LIABILITY, OTHER POST-EMPLOYMENT BENEFIT OBLIGATION, NET PENSION LIABILITY, VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM LIABILITY, AND COMPENSATED ABSENCES

(CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

The annual requirements to amortize business-type bonds and notes outstanding at June 30, 2023, are as follows:

Business-Type Activities Year Ending Business-Type Bonds Payable Business-Type Notes Payable June 30, Principal Interest Total Principal Interest Total 2024 $ 177,224 $ 74,971 $ 2 52,195 $ 2,118,910 $ 4 15,594 $ 2,534,504 2025 183,343 67,802 2 51,145 2,137,806 4 02,725 2,540,531 2026 190,871 60,326 2 51,197 2,156,871 3 83,658 2,540,529 2027 198,767 52,916 2 51,683 2,161,343 3 64,419 2,525,762 2028 182,948 44,699 2 27,647 1,184,065 2 96,755 1,480,820

2029 - 2033 773,861 123,477 8 97,338 6,063,934 1 ,340,163 7,404,097 2034 - 2038 301,289 19,864 3 21,153 6,310,404 1 ,093,694 7,404,098 2039 - 2043 49,101 1,933 5 1,034 6,486,233 8 37,206 7,323,439 2044 - 2048 - - - 5,722,674 4 38,035 6,160,709 2049 - 2053 - - - 980,336 5 9,992 1,040,328 $ 2,057,404 $ 445,988 $ 2 ,503,392 $ 35,322,576 $ 5 ,632,241 $ 40,954,817

C. ISSUANCE OF NEW DEBT

PRIMARY GOVERNMENT

In fiscal year 2023, the County began borrowing funds through the Maryland Water Quality Financing Administration for phase two of the Southern Kent Island (SKI) Sanitary Project. The total loan amount for phase two will be approximately $6.3 million and funds will be disbursed as the project costs are incurred. Principal payments will begin after the final draw and the loan will be repaid over 30 years at an interest rate of 0.80%. In fiscal year 2023, the County received $3,946,501 as

part of this loan. The total amount outstanding as of June 30, 2023 was $3,946,501.

84

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

D. LOCAL DEBT POLICY

PRIMARY GOVERNMENT

In May 2013, Queen Anne’s County adopted Resolution No. 13-04, which updated and replaced Resolution No. 09-13, to continue a local debt policy in compliance with Article 95, Section 22F of the Annotated Code of Maryland. This policy requires that the County’s Director of Budget and Finance: (1) prepare a six-year capital project plan each year; (2) propose an amount to be transferred from the General Fund operating balances to the General Capital Projects Fund to serve as payas-you-go funding in the latter Fund, in order to lessen the need for future County debt; (3) limit the County’s non-bonded

indebtedness to $8.0 million for general operating expenses or capital improvements; and (4) certify that the sum of outstanding general bonded debt and any new general obligation debt is 2.5% or less of the total taxable assessable base and is $3,000 or less per capita. This policy also stipulates that although there is some flexibility as to the acceptable percentage of debt service to general fund expenditures, and no absolute limit has been established by the rating agencies or the

Government Finance Officers Association, anything above 12% of total general fund expenditures would be a cause to carefully monitor debt service. In addition to the debt policy, the Spending Affordability Committee recommended that the limit of debt service to general fund expenditures should be limited to 10% and the County Commissioners have adopted that as a limit.

Queen Anne’s County has complied with the above policy and has not had any violations. For calculations relating to this local debt policy, see Table 12-b in the Statistical Section of this document.

NOTE 10 – LEASES

PRIMARY GOVERNMENT

The County implemented guidance of GASB 87, Leases, at July 1, 2021 for accounting and reporting of leases. The County uses its incremental borrowing rate to determine the initial value of the lease receivable and corresponding deferred inflows.

County as Lessor The County’s Governmental Activities entered into various lease agreements to lease land for cultivation and other similar purposes. The County received a combination of annual, semi-annual, and monthly payments from these leases ranging from $662 to $17,225 during the year. These leases typically have variable payments that increase each year or each successive renewable lease term by a set percentage rate included in the lease agreement. The County has options to extend which

typically are in five-year increments. The County has considered the probability of exercising the lease renewal options in the initial calculation of the lease.

The following is a summary of Governmental Activities lease receivable and the corresponding deferred inflow:

* As Restated Retirements

Balance and Balance Governmental Activities June 30, 2022 Additions Repayments June 30, 2023 Lease Receivable $ 909,715 $ 3 63,334 $ 169,359 $ 1,103,690 Lease Receivable deferred inflows $ (864,597) $ (363,334) $ (159,658) $ (1,068,273) For the year ended June 30, 2023, rental and interest income associated with the governmental activities lease receivable was approximately $160,000 and $1,800, respectively.

85

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 10 – LEASES (CONTINUED)

The County’s Sanitary District has entered into various lease agreements to lease land near County water towers for antenna sites. The County received monthly payments from these leases ranging from $273 to $3,101 during the year. These leases typically have variable payments that increase each year by a set percentage rate included in the lease agreement. The County has options to extend which typically are in five-year increments. The County has considered the probability of

exercising the lease renewal options in the initial calculation of the lease.

The County’s Bay Bridge Airport has entered into various lease agreements to lease land and/or facilities at the airport. The County received monthly payments from these leases ranging from $470 to $1,150 during the year. These leases typically have variable payments that increase each year by a set percentage rate included in the lease agreement. The County has options to extend which typically are in one-year increments. The County has considered the probability of exercising the

lease renewal options in the initial calculation of the lease.

The following is a summary of Business-Type activities lease receivable and the corresponding deferred inflow:

* As Restated Retirements

Balance and Balance Business-Type Activities June 30, 2022 Additions Repayments June 30, 2023 Sanitary District - Lease Receivable $ 1,580,292 $ - $ 150,037 $ 1,430,255 Bay Bridge Airport - Lease Receivable 173,002 - 27,931 145,071 Total lease receivable $ 1,753,294 $ - $ 177,968 $ 1,575,326 Sanitary District - Deferred inflows $ (1,568,362) $ - $ (160,717) $ (1,407,645) Bay Bridge Airport - Deferred inflows (171,805) - (29,419) (142,386)

Total lease receivable deferred inflows $ (1,740,167) $ - $ (190,136) $ (1,550,031) For the year ended June 30, 2023, rental and interest income associated with the business-type activities lease receivable was approximately $180,000 and $5,000, respectively.

County as Lessee The County has entered into various agreements to lease land and facilities for their public works department. An initial lease liability was recorded in the amount of $638,500 for all new lease agreements entered into in the current year. The County is required to make both fixed and variable payments that range from $9,000 to $25,000 for the current year. Leases for which have variable payments will increase at a rate of 2% each year until lease termination. The County has no

extension or termination options present in these agreements.

The County has entered into various agreements to lease land and equipment for their enterprise funds. An initial lease liability was recorded in the amount of $142,748 for all new leases entered into in the current year. The County is required to make annual fixed payments ranging from $1,600 to $6,000 for leases in the scope of GASB 87. The County has no extension or termination options present in these agreements.

86

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 10 – LEASES (CONTINUED)

The future minimum lease payments are approximately as follows:

Governmental Activities Business-Type Activities Principal Interest Total Principal Interest Total 2024 $ 6 2,314 $ 16,023 $ 78,337 $ 33,666 $ 2 ,973 $ 36,639 2025 5 5,401 14,448 69,849 27,922 2 ,318 30,240 2026 5 8,224 12,792 71,016 28,590 1 ,650 30,240 2027 6 1,154 11,052 72,206 29,274 9 66 30,240 2028 5 5,193 9,436 64,629 24,929 2 71 25,200 Thereafter 3 22,382 19,818 342,200 - - - Total $ 6 14,668 $ 83,569 $ 698,237 $ 144,381 $ 8 ,178 $ 152,559

For the year ended June 30, 2023, interest expense for governmental and business-type activities lease liability was $18,858 and $387, respectively.

In fiscal year 2019, Queen Anne’s County entered into an agreement with the Division of Housing and Community Services (DHCS) to lease property from DHCS for $1 per year for 25 years.

COMPONENT UNITS

BOARD OF EDUCATION

Financed Purchases The Board has entered into non-cancelable contracts to finance performance contracting equipment that transfer ownership at the end of the contract term, January 2028. Thus the Board has recorded the related obligations and the related assets in the appropriate funds.

The assets acquired and capitalized as fixed assets under financed purchases are as follows:

Equipment, at cost $ 3,246,662 Less: accumulated depreciation (2,284,983) Total $ 961,679 Interest expense related to the above finance leases was approximately $36,000 for the year ended June 30, 2023. The future minimum lease obligations and net present value of these minimum lease payments as of June 30, 2023 were as follows:

Year ended June 30:

2024 $ 250,989 2025 258,519 2026 266,275 2027 274,263 2028 203,553 Thereafter - Total minimum lease payments 1,253,599 Less: amount representing interest ( 83,598) Present value of minimum financed purchase payments $ 1,170,001 87

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 10 – LEASES (CONTINUED)

Intangible Right-to-Use Assets The Board implemented the guidance of GASB No. 87, Leases, at July 1, 2021 for accounting and reporting leases that had previously been reporting as operating leases and recognized the value of copiers leased under long-term contracts along with a related liability.

During fiscal year 2023, the Board entered into copier lease agreements. Payments under these leases total approximately $65,000 per year for leases that expire in fiscal year 2027 and $31,000 per year for leases expiring in fiscal year 2025.

For purposes of discounting future payments on these leases the Board used its incremental borrowing rate in place at the time of lease inception of 3.75%.

The leased equipment and accumulated amortization of the right-to-use assets are outlined in Note 6.

Minimum lease payments on copiers over the next five years are as follows:

Lease Payments to Maturity Copiers Principal Interest Total 2024 $ 85,350 $ 11,135 $ 96,485 2025 88,551 7,934 96,485 2026 60,379 4,613 64,992 2027 62,641 2,349 64,990 2028 - - - $ 296,921 $ 26,031 $ 322,952

LIBRARY

Leases Payable In December 2019, the Library entered into an operating lease with Affordable Business Systems, Inc. for use of a photocopier with an expiration date of December 2024. As of June 30, 2023, total lease liabilities were $8,337, which represents the present value of the remaining lease payments of $8,832, discounted using the Library’s incremental borrowing rate of 4%.

Following are the principal and interest requirements through maturity of the lease liabilities under this non-cancelable operating lease:

Year ended June 30: Principal Interest 2024 $ 5 ,735 $ 3 33 2025 2 ,602 1 62 $ 8 ,337 $ 4 95 88

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 11 – SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS

The County implemented guidance of GASB 96, Subscription-Based Information Technology Arrangements (SBITAs), July 1, 2022 for accounting and reporting of subscription arrangements using the modified retrospective method.

The County enters into various agreements in order to use web software and licensing services. An initial subscription liability was recorded in the amount of $1,503,069. As of June 30, 2023, the value of the subscription liability is $1,178,880. The County is required to make annual fixed payments ranging from $8,146 to $298,043 for subscriptions in the scope of GASB 96. The county uses its incremental borrowing rate to determine the initial value of the right-to-use

asset and corresponding subscription liability. The County has options to extend which typically are in one-year increments. The County has considered the probability of exercising the lease renewal options in the initial calculation of the subscription.

The future minimum subscription payments are as follows:

Governmental Activities Principal Interest Total 2024 $ 298,044 $ 28,249 $ 326,293 2025 305,256 21,022 326,278 2026 284,425 13,618 298,043 2027 291,155 6,889 298,044 2028 - - - Thereafter - - - Total $ 1,178,880 $ 69,778 $ 1,248,658 For the year ended June 30, 2023, interest expense related to the subscription liability was $28,249.

89

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 12 – RESTRICTED ASSETS AND LIABILITIES AND FUND BALANCES

A. RESTRICTED ASSETS AND RELATED LIABILITIES

PRIMARY GOVERNMENT

BUSINESS-TYPE ACTIVITIES

Queen Anne’s County Sanitary District Restricted Fund - The County Commissioners created a restricted fund within the Sanitary District Enterprise Fund in November of 1989 by enabling legislation. Revenue sources to the fund are sales of water and sewer allocations and interest earned on investments. Authorized uses of restricted funds are major capital expenses for repairs, construction, plant expansion, debt service, or other similar uses within the Sanitary District. To date, such funds have been used almost

exclusively for debt service.

Debt Service Fund - Principal and interest payments for water and wastewater debt used to expand the service area are payable primarily from water and sewer special benefit assessments. These assessments, made at the time the expansion is ready for use, are created by enabling legislation and amortized over the same life as underlying debt. They constitute a lien on the served property and may be prepaid at any time. The amount of assessments collectable in future years is recorded as

benefit assessments receivable. A portion of those assessments receivable is not due currently and is recorded as unearned revenue.

Water Quality Revolving Loan Fund debt covenants stipulate that sufficient financial resources must be available in the Debt Service Fund as of June 30 of each year to cover the subsequent year’s debt service payments. If such resources are not available at that time, the covenants require that the County increase service rates, impose benefit assessments, or otherwise increase financial resources so that debt service payments are covered before they are due throughout the year.

The assets and related liabilities restricted for the above purposes at June 30, 2023 are as follows:

SANITARY DISTRICT

RESTRICTED DEBT SERVICE

ASSETS FUND FUND TOTAL

Current Restricted Assets Restricted Equity in Pooled Cash $ 2 4,763,246 $ 1 ,703,815 $ 2 6,467,061 Restricted Accounts Receivable (Net) 3 ,076,750 8 93,250 3 ,970,000 Total Current Restricted Assets 2 7,839,996 2 ,597,065 3 0,437,061 Noncurrent Restricted Assets Special Assessments Receivable (Net) 9 51,442 1 5,481,956 1 6,433,398 Total Noncurrent Restricted Assets 9 51,442 1 5,481,956 1 6,433,398

DEFERRED INFLOWS OF RESOURCES

Unavailable Water and Sewer Assessments 9 51,442 1 5,481,957 1 6,433,399 Total Deferred Inflows of Resources 9 51,442 1 5,481,957 1 6,433,399

NET POSITION

Amounts Restricted for:

Debt Service - 2 ,597,064 2 ,597,064 Unrestricted Amounts 2 7,839,996 - 2 7,839,996 Total Net Position $ 2 7,839,996 $ 2 ,597,064 $ 3 0,437,060 90

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 12 – RESTRICTED ASSETS AND LIABILITIES AND FUND BALANCES (CONTINUED)

B. RESTRICTED NET POSITION

PRIMARY GOVERNMENT

GOVERNMENTAL ACTIVITIES

Net Investment in Capital Assets for governmental activities, is calculated as follows:

Governmental Activities Net Assets Invested in Capital Assets $ 195,514,937 Total Debt excluding Compensated Absences, Pension, OPEB, and LOSAP Obligations (132,859,793) Deferred Charge on Refunding 327,362 Add back: Debt relating to Board of Education Assets 42,257,297 Add back: Unspent portion of Bond Proceeds for Board of Education debt 5,971,918 Add back: Unspent portion of Bond Proceeds for Governmental debt 5,136,300

Add back: Debt relating to Chesapeake College 4,729,731 Add back: Debt relating to PHA 443,007 Add back: Debt relating to non-capital assets (Dredging) 608,141 Add back debt unrelated to Capital Assets 59,146,394 Net Investment in Capital Assets $ 122,128,900

BUSINESS-TYPE ACTIVITIES

Net Investment in Capital Assets for business-type activities, are as follows:

TOTAL

PRIMARY

SANITARY DISTRICT NON-MAJOR GOVERNMENT

SEWER WATER BAY BRIDGE ENTERPRISE ENTERPRISE

ASSETS OPERATIONS OPERATIONS TOTAL AIRPORT FUNDS FUNDS

Capital Assets $ 146,688,935 $ 38,688,850 $ 185,377,785 $ 22,576,886 $ 11,277,476 $ 219,232,147 Less Accumulated Depreciation ( 59,198,975) (13,820,606) ( 73,019,581) (6,861,099) (2,562,821) (82,443,501) Total Capital Assets, Net of Depreciation 87,489,960 24,868,244 112,358,204 15,715,787 8,714,655 136,788,646

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding - - - 4,129 588 4,717 Total Deferred Outflows of Resources - - - 4,129 588 4,717

LIABILITIES

Lease Payable 6,397 - 6,397 - 137,984 144,381 Bonds/Notes Payable 35,322,576 - 35,322,576 1,424,832 781,530 37,528,938 Total Liabilities 35,328,973 - 35,328,973 1,424,832 919,514 37,673,319

DEFERRED INFLOWS OF RESOURCES

Bond Refundings - - - 294 1,561 1,855 Total Deferred Inflows of Resources - - - 294 1,561 1,855

NET POSITION

Net Investment in Capital Assets $ 52,160,987 $ 24,868,244 $ 77,029,231 $ 14,294,790 $ 7,794,168 $ 99,118,189 91

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 12 – RESTRICTED ASSETS AND LIABILITIES AND FUND BALANCES (CONTINUED)

C. FUND BALANCES

PRIMARY GOVERNMENT

Governmental fund balances are composed of the following:

Total General General Roads Grants Non-Major Governmental Governmental Funds Fund Capital Capital Fund Governmental Funds Nonspendable Inventory $ - $ - $ - $ - $ 1,274,659 $ 1,274,659 Prepaid Items 197,921 - - - - 197,921 Other 44,955 - - - - 44,955 Subtotal Nonspendable 242,876 - - - 1,274,659 1,517,535 Restricted Rainy Day Fund 14,511,971 - - - - 14,511,971 Employee Benefits - LOSAP 5,334,870 - - - - 5,334,870

Donor-Specified Purposes 59,884 33,148 - - - 93,032 Mosquito Control 89,622 - - - - 89,622 Unspent Bond Proceeds - 11,108,218 - - - 11,108,218 Impact Fees - 245,185 - - - 245,185 Vehicle Acquisition - 46,127 - - - 46,127 Department of Aging - - - - 955 955 House and Community Services - - - - 2,821,652 2,821,652 Critical Areas - - - - 372,689 372,689 Sheriff's Drug Task Force - - - - 155,155 155,155

Inmate Welfare - - - - 186,761 186,761 Agricultural Transfer - - - - 2,027,217 2,027,217 Rural Legacy - - - - 419,805 419,805 Dredging Special Assessments - - - - 5,815 5,815 Kent Narrows - - - - 184,700 184,700 Subtotal Restricted 19,996,347 11,432,678 - - 6,174,749 37,603,774 Committed House and Community Services - - - - 8,392,992 8,392,992 Revolving Loan Fund - - - - 90,000 90,000 Economic Development Incentive - - - - 934,972 934,972

School Impact Fees - - - - 11,676,570 11,676,570 Fire Company Impact Fees - - - - 602,031 602,031 Parks and Recreation Impact Fees - - - - 569,903 569,903 Revenue Stabilization Fund 9,069,982 - - - - 9,069,982 Encumbrances - - - - - - Economic Development - 1,076,841 - - - 1,076,841 Rubble Surcharge - 782,490 - - - 782,490 Developer Exactions - 3,952,567 909,241 - - 4,861,808 Subtotal Committed 9,069,982 5,811,898 909,241 - 22,266,468 38,057,589

Assigned Encumbrances - 12,795,214 4,040,720 - - 16,835,934 Subsequent Years' Expenditures - 11,038,595 - - - 11,038,595 Department of Aging - - - - 111,672 111,672 Roads Operating - - - - 52,716 52,716 Community Partnerships for Children - - - - 66,218 66,218 Law Library - - - - 505,143 505,143 Capital Projects - 18,587,832 485,001 - - 19,072,833 Loans Receivable - 1,668,338 - - - 1,668,338 Subtotal Assigned - 44,089,979 4,525,721 - 735,749 49,351,449

Unassigned General Fund 39,494,554 - - - - 39,494,554 Subtotal Unassigned 39,494,554 - - - - 39,494,554 Total Governmental Funds Balances $ 68,803,759 $ 61,334,555 $ 5,434,962 $ - $ 30,451,625 $ 166,024,901 92

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 12 – RESTRICTED ASSETS AND LIABILITIES AND FUND BALANCES (CONTINUED)

C. FUND BALANCES (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

Encumbrances included in the General Capital and Roads Capital funds are for the following purposes:

General Roads Capital Capital General Government $ 5,143,676 $ - Public Safety 537,530 - Public Works 1,973,648 - Parks & Recreation 1,716,398 - Health and Social Services 575,953 - Education and Library 2,046,873 - Conservation of Natural Resources 325,567 - Economic/Community Development 475,569 - Resurfacing Contracts and Materials - 2,845,448 Roads Construction Equipment - 1,195,272 Total encumbrances $ 12,795,214 $ 4,040,720

NOTE 13 - RISK MANAGEMENT

The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The government carries commercial insurance to cover such risks. Certain assets of the County such as roads, bridges, and other infrastructure are not insurable due to their nature.

General Insurance Coverage - The County is a participant in the Local Government Insurance Trust (LGIT), which is a consortium of Maryland local governments created to provide insurance coverage and services to Maryland local governments. The LGIT provides general liability, public officials’ liability, fleet insurance, and building and property insurance to its members.

Workmen’s compensation and fidelity insurance are obtained from various commercial insurance companies.

Risk Sharing - Subscribers to coverage provided by LGIT share the risk among participants of the pools. As a result, the County's annual premium requirements will be affected by the loss experience of the various insurance pools in which it participates. Also, the County may be subject to additional assessments from time to time. These amounts would be recorded as expenditures when they are probable and can be reasonably estimated. Conversely, favorable performance of

certain insurance pools may result in reduced premiums.

Health Insurance - Effective with the 1996 fiscal year, the County joined together with other Eastern Shore county governments, libraries, and Boards of Education to form the Eastern Shore of Maryland Education Consortium Health Insurance Alliance (ESMEC), a public entity risk pool currently operating as a common risk management and insurance program for health insurance coverage. CareFirst BlueCross BlueShield, of Maryland, administers this program.

The agreement for formulation of the alliance provides that the pool will be self-sustaining through member premiums.

In addition to the annual premiums, the pooling agreement provides for additional assessments, if needed, but not to exceed certain limits. No additional assessments were needed for fiscal year 2023 and, as of the date of this report, it is believed that there are no outstanding claims in excess of the equity of the trust.

Settlements – In fiscal years 2021, 2022 and 2023, settlements have not exceeded insurance coverage for any type of policy in effect.

93

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS

Virtually all full and eligible part-time employees of Queen Anne’s County, Maryland, and its related agencies are covered by one of the statewide contributory pension systems of the State of Maryland.

Maryland State Retirement and Pension Systems Organization The State Retirement Agency is the administrator of the Maryland State Retirement and Pension System (the System). The System was established by the State Personnel and Pensions Article of the Annotated Code of Maryland to provide retirement allowances and other benefits to State employees, teachers, police, judges, legislators, and employees of participating

governmental units. Responsibility for the System’s administration and operation is vested in a 15-member Board of Trustees. The System is made up of two cost-sharing employer pools: the “State Pool” and the “Municipal Pool”. The State Pool consists of State agencies, boards of education, community colleges, and libraries. The Municipal Pool consists of participating governmental units that elected to join the System. Neither pool shares in each other’s actuarial liabilities, thus

participating governmental units that elect to join the System (the “Municipal Pool”) share in the liabilities of the Municipal Pool only. Currently, the System has 153 participating employers in addition to the State.

The State of Maryland is the statutory guarantor for the payment of all pensions, annuities, retirement allowances, refunds, reserves, and other benefits of the System. The State is obligated to annually pay into the accumulation fund of each State system at least an amount that, when combined with the State’s accumulation funds, is sufficient to provide benefits payable under each plan during that fiscal year. The System is accounted for as one defined benefit plan as defined in accordance

with accounting principles generally accepted in the United States of America. Additionally, the System is fiscally dependent on the State by virtue of the legislative and executive controls exercised with respect to its operations, policies, and administrative budget. Accordingly, the System is included in the State’s reporting entity and disclosed in its financial statements as a pension trust fund.

The System is comprised of the Teachers’ Retirement and Pension Systems, Employees’ Retirement and Pension Systems, State Police Retirement System, Judges’ Retirement System, and the Law Enforcement Officers’ Pension System (LEOPS).

The following groups of employees participate in:

Employees Plan Board of Education – regular employees Employees System Board of Education – teachers Teachers System Library Teachers System Queen Anne’s County:

Elected officials Employees System Sheriff’s Deputies LEOPS Regular employees Employees System The System is a cost sharing multiple-employer defined benefit pension plan.

94

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

Covered Members Teachers’ Retirement System The Teachers’ Retirement System was established on August 1, 1927, to provide retirement allowances and other benefits to teachers in the State. Effective January 1, 1980, the Teachers’ Retirement System was closed to new members and the Teachers’ Pension System was established. As a result, teachers hired after December 31, 1979, became members of the Teachers’ Pension System as a condition of employment. On or after January 1, 2005, an individual who is a member of the

Teachers’ Retirement System may not transfer membership to the Teachers’ Pension System.

Employees’ Retirement System On October 1, 1941, the Employees’ Retirement System was established to provide retirement allowances and other benefits to State employees, elected and appointed officials and the employees of participating governmental units. Effective January 1, 1980, the Employees’ Retirement System was essentially closed to new members and the Employees’ Pension system was established. As a result, State employees (other than correctional officers) and employees of participating governmental units

hired after December 31, 1979, became members of the Employees’ Pension System as a condition of employment, while all State correctional officers and members of the Maryland General Assembly continue to be enrolled as members of the Employees’ Retirement System. On or after January 1, 2005, an individual who is a member of the Employees’ Retirement System may not transfer membership to the Employees’ Pension System.

The Law Enforcement Officers’ Pension System (LEOPS) The Law Enforcement Officers’ Pension System (LEOPS) was established on July 2, 1990, to provide retirement allowances and other benefits for certain State and local law enforcement officers. This System includes both retirement plan and pension plan provisions which are applicable to separate portions of the System’s membership. The retirement plan

provisions are only applicable to those members who, on the date they elected to participate in LEOPS, were members of the Employees’ Retirement System. This System’s pension plan provisions are applicable to all other participating law enforcement officers.

Summary of Significant Plan Provisions All plan benefits are specified by the State Personnel and Pensions Article of the Annotated Code of Maryland. For all individuals who are members of the Employees’, Teachers’, Correctional Officers’ or State Police Retirement System on or before June 30, 2011, retirement allowances are computed using both the highest three years’ Average Final Compensation (AFC) and the actual number of years of accumulated creditable service. For individuals who become members of the State

Police Retirement System or the Correctional Officers’ Retirement System on or after July 1, 2011, retirement allowances are computed using both the highest five years’ AFC and the actual number of years of accumulated creditable service. For all individuals who are members of the pension systems of the State Retirement and Pension System on or before June 30, 2011, pension allowances are computed using both the highest three consecutive years’ AFC and the actual number of years of

accumulated creditable service. For any individual who becomes a member of one of the pension systems on or after July 1, 2011, pension allowances are computed using both the highest five consecutive year’s AFC and the actual number of years of accumulated creditable service. Various retirement options are available under each system which ultimately determines how a retiree’s benefit allowance will be computed. Some of these options require actuarial reductions based on the retiree’s

and/or designated beneficiary’s attained age and similar actuarial factors.

95

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

The member contribution rate for members of the Teachers’ Retirement Pension System and Employees’ Retirement Pension System is 7% and 6% respectively, and 7% for members of the Law Enforcement Officers’ Pension system. The member contribution rate for members of the Judges’ Retirement System is 8%.

In addition, the benefit attributable to service on or after July 1, 2011 in many of the pension systems now will be subject to different cost-of-living adjustments (COLA) that is based on the increase in the Consumer Price Index (CPI) and capped at 2.5% or 1.0% based on whether the fair value investment return for the preceding calendar year was higher or lower than the investment return assumption used in the valuation.

A brief summary of the retirement eligibility requirements of and the benefits available under the various systems in effect during fiscal year 2021, are as follows:

Service Retirement Allowances A member of either the Teachers’ or Employees’ Retirement System is generally eligible for full retirement benefits upon the earlier of attaining age 60 or accumulating 30 years of creditable service regardless of age. The annual retirement allowance equals 1/55 (1.81%) of the member’s AFC multiplied by the number of years of accumulated creditable service.

An individual who is a member of either the Teachers’ or Employees’ Pension System on or before June 30, 2011, is eligible for full retirement benefits upon the earlier of attaining age 62, with specified years of eligibility service, or accumulating 30 years of eligibility service regardless of age. An individual who becomes a member of either the Teachers’ or Employees’ Pension System on or after July 1, 2011, is eligible for full retirement benefits if the member’s combined age and eligibility

service equals at least 90 years or if the member is at least age 65 and has accrued at least 10 years of eligibility service.

For most individuals who retired from either the Teachers’ or Employees’ Pension System on or before June 30, 2006, the annual pension allowance equals 1.2% of the member’s AFC, multiplied by the number of years of creditable service accumulated prior to July 1, 1998, plus 1.4% of the member’s AFC, multiplied by the number of years of creditable service accumulated subsequent to June 30, 1998. With certain exceptions, for individuals who are members of the Teachers’ or

Employees’ Pension System on or after July 1, 2006, the annual pension allowance equals 1.2% of the member’s AFC, multiplied by the number of years of creditable service accumulated prior to July 1, 1998, plus 1.8% of the member’s AFC, multiplied by the number of years of creditable service accumulated subsequent to June 30, 1998. Beginning July 1, 2011, any new member of the Teachers’ or Employees’ Pension System shall earn an annual pension allowance equal to 1.5% of

the member’s AFC multiplied by the number of years of creditable service accumulated as a member of the Teachers’ or Employee’s Pension System.

Exceptions to these benefit formulas apply to members of the Employees’ Pension System, who are employed by a participating governmental unit that does not provide the 1998 or 2006 enhanced pension benefits or the 2011 reformed pension benefits. The pension allowance for those members equals 0.8% of the member’s AFC up to the social security integration level (SSIL), plus 1.5% of the member’s AFC in excess of the SSIL, multiplied by the number of years of

accumulated creditable service. For the purpose of computing pension allowances, the SSIL is the average of the social security wage bases for the past 35 calendar years ending with the year the retiree separated from service.

96

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

A member of the Law Enforcement Officers’ Pension System is eligible for full retirement benefits upon the earlier of attaining age 50 or accumulating 25 years of eligibility service regardless of age. The annual retirement allowance for a member who is covered under the retirement plan provisions equals 1/50 (2.0%) of the member’s AFC multiplied by the number of years of accumulated creditable service up to 30 years, plus 1/100 (1.0%) of the member’s AFC multiplied by the

number of years of accumulated creditable service in excess of 30 years. For members subject to the pension provisions, full service pension allowances equal 2.0% of AFC up to a maximum of 60% (30 years of credit).

Vested Allowances Any individual who is a member of the State Retirement and Pension System on or before June 30, 2011 (other than a judge or a legislator), and who terminates employment before attaining retirement age but after accumulating 5 years of eligibility service is eligible for a vested retirement allowance. Any individual who joins the State Retirement and Pension System on or after July 1, 2011 (other than a judge or a legislator), and who terminates employment before attaining retirement age but

after accumulating 10 years of eligibility service is eligible for a vested retirement allowance. A member, who terminates employment prior to attaining retirement age and before vesting, receives a refund of all member contributions and interest.

Early Service Retirement A member of either the Teachers’ or Employees’ Retirement System may retire with reduced benefits after completing 25 years of eligibility service. Benefits are reduced by 0.5% per month for each month remaining until the retiree either attains age 60 or would have accumulated 30 years of creditable service, whichever is less. The maximum reduction for a Teachers’ or Employees’ Retirement System member is 30%.

An individual who is a member of either the Teachers’ or Employees’ Pension System on or before June 30, 2011 may retire with reduced benefits upon attaining age 55 with a least 15 years of eligibility service. Benefits are reduced by 0.5% per month for each month remaining until the retiree attains age 62. The maximum reduction for these members of the Teachers’ or Employees’ Pension System is 42%. An individual who becomes a member of either the Teachers’ or Employees’ Pension

System on or after July 1, 2011, may retire with reduced benefits upon attaining age 60 with at least 15 years of eligibility service. Benefits are reduced by 0.5% per month for each month remaining until the retiree attains age 65. The maximum reduction for these members of the Teachers’ or Employees’ Pensions System is 30%.

Members of the State Police, Judges’, Law Enforcement Officers’ and Local Fire and Police Systems are not eligible for early service benefits.

Disability and Death Benefits Generally, a member covered under retirement plan provisions who is permanently disabled after 5 years of service receives a service allowance based on a minimum percentage (usually 25%) of the member’s AFC. A member covered under pension plan provisions who is permanently disabled after accumulating 5 years of eligibility service receives a service allowance computed as if service had continued with no change in salary until the retiree attained age 62. A member (other than a

member of the Maryland General Assembly or a judge, both of which are ineligible for accidental disability benefits) who is permanently and totally disabled as the result of an accident occurring in the line of duty receives 2/3 (66.7%) of the member’s AFC plus an annuity based on all member contributions and interest. Death benefits are equal to a member’s annual salary as of the date of death plus all member contributions and interest.

97

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

Adjusted Retirement Allowances Retirement and pension allowances are increased annually to provide for changes in the cost of living according to prescribed formula. Such adjustments for retirees are based on the annual change in the CPI. For the Teachers’ and Employees’ Retirement Systems (TRS/ERS) the method by which the annual COLA’s are computed depends upon elections made by members who were active on July 1, 1984 (or within 90 days of returning to service, for members who were inactive on July

1, 1984) enabling the member to receive either an unlimited COLA, a COLA limited to 5% or a two part combination COLA depending upon the COLA election made by the member.

Effective July 1, 1998, for Teachers’, Employees’, and LEOPS retirees, the adjustment is capped at a maximum 3% compounded and is applied to all benefits which have been in payment for one year. The annual increase to pension allowances for Employees’ Pension System retirees who were employed by a participating governmental unit that does not provide enhanced pension benefits are limited to 3% of the initial allowance.

However, beginning July 1, 2011, for benefits attributable to service earned on or after July 1, 2011, in all of the systems except the judges’ and legislators’ systems, the adjustment is capped in the lesser of 2.5% or the increase in CPI if the most recent calendar year fair value rate of return was greater than or equal to the assumed rate. The adjustment is capped at the lesser of 1% or the increase in CPI if the fair value return was less than the assumed rate of return. In years in which COLAs

would be less than zero due to a decline in the CPI, retirement allowances will not be adjusted. COLAs in succeeding years are adjusted until the difference between the negative COLA that would have applied and the zero COLA is fully recovered.

Actuarial Assumptions The total pension liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement.

Inflation In the 2022 actuarial valuation, 2.25% general, 2.75% wage.

In the 2021 actuarial valuation, 2.25% general, 2.75% wage.

Salary Increases In the 2022 actuarial valuation, 2.75% to 11.25%.

In the 2021 actuarial valuation, 2.75% to 9.25%.

Investment Rate of Return In the 2022 actuarial valuation 6.80%.

In the 2021 actuarial valuation 6.80%.

Retirement Age Experience-based table of rates that are specific to the type of eligibility condition. Last updated for the 2019 valuation pursuant to the 2019 experience study for the period July 1, 2014 to July 30, 2018.

Mortality Various versions of the Pub- 2010 Mortality Tables for males and females with projected generational mortality improvements based on the MP-2018 fully generational mortality improvements scale for males and females.

98

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

Investments The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected

inflation. Best estimates of geometric real rates of return were adopted by the Board of Trustees after considering input from the System’s investment consultant(s) and actuary(s). For each major asset class that is included in the System’s target asset allocation, these best estimates are summarized in the following table:

Long-Term Expected Real Asset Class Target Allocation Rate of Return Public Equity 34% 6.0% Private Equity 16% 8.4% Rate Sensitive 21% 1.2% Credit Opportunity 8% 4.9% Real Assets 14% 5.2% Absolute Return 7% 3.5% Total 100% The above was the Board of Trustees adopted asset allocation policy and best estimate of geometric real rates of return for each major asset class as of June 30, 2022.

For the years ended June 30, 2022, the annual money-weighted rate of return on pension plan investments, net of the pension plan investment expense, was (2.97%). The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Discount rate A single discount rate of 6.80% was used to measure the total pension liability. The single discount rate was based on the expected rate of return on pension plan investments of 6.80%. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member

rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

99

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

Sensitivity of the Net Pension Liability Regarding the sensitivity of the net pension liability to changes in the single discount rate, the following presents the plan’s net pension liability, calculated using a single discount rate of 6.80%, as well as what the plan’s net pension liability would be if it were calculated using a single discount rate that is 1% point lower or 1% point higher:

1% Decrease Discount Rate 1% Increase System 5.80% 6.80% 7.80% County $ 54,101,597 $ 35,261,002 $ 19,627,674 Board of Education 9,040,619 5,892,271 3,279,872 Teachers’ and Employees’ Retirement Systems and Teachers’ and Employees’ Pension Systems Teachers’ Retirement and Pension Systems:

In accordance with Maryland Senate Bill 1301, Budget Reconciliation and Financing Act of 2012, the Board is required to pay the State 100% of the normal cost portion of the total pension cost for teachers. The normal cost is the portion of the total retirement benefit cost that is allocated to the current year of the employee’s service. The related payment for fiscal year ending 2023 was $2,824,266. In addition, the State of Maryland contributed $5,467,495 on behalf of the Board. The Board

has recognized the State on-behalf payments as both a revenue and expense.

Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions Because the State of Maryland pays the unfunded liability for the Teachers’ Systems on behalf of the Board and Library, and the Board pays the normal cost for the Teachers’ Systems, the Board and Library are not required to record its’ share of the unfunded pension liability for the Teachers’ Systems, the State of Maryland is required to record that liability. The Board is

required to record a liability for the Employees’ Systems.

At June 30, 2023, the Board of Education reported a liability for its proportionate share of the net pension liability that reflected a reduction for State pension support provided to the Board. The amount recognized by the Board as its proportionate share of the net pension liability, the related State support, and the total portion of the net pension liability that was associated with the Board were as follows:

Board's proportionate share of the net pension liability (Employees' System) $ 5,892,271 State's proportionate share of the net pension liability (Teachers' System) 52,667,002 Total $ 58,559,273 100

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

The net pension liability was measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was calculated as follows by the System(s):

1. Calculate the net pension liability for the entire System in accordance with the provisions of GASB No. 67.

2. Determine the total contributions to the System by the State and PGUs, inclusive of any underfunding of

contributions.

3. Based on the number of participants at each Board of Education, calculate the difference between what each Board

would have contributed if they funded at the rate of all other participating governments and what the Board actually contributed. The difference between what the Board contributed and what they would have contributed if they funded at the rate of the other participating governments, is then added to the total contribution to the System, to calculate the System’s adjusted calculation.

4. Calculate for each participating government, their percentage of the adjusted System contribution by dividing the

total adjusted System contribution into each PGU’s contribution.

5. Provide each PGU its adjusted percentage of contribution and the System’s net pension liability and other related

amounts under the GASB No. 67 requirements.

At June 30, 2023, the County reported the following related to pensions:

Board County Employer's proportionate (percentage) of the collective net pension liability 0.029% 0.176% Employer's proportionate share of the collective net pension liability $ 5,892,271 $ 35,261,002 Pension expense recognized by the employer for the year ended $ 3,369,190 $ 2,931,500 Defferred Defferred Outflows of Inflows of Resources Resources County Changes in assumptions $ 3,931,318 $ ( 355,382)

Net difference between projected and actual investment earnings - ( 106,790) on pension plan investments Differences between expected and actual experience - ( 2,517,362) Change in proportion 5,590,368 ( 1,965,066) Contributions subsequent to measurment date 4,782,356 - Total $ 14,304,042 $ ( 4,944,600) Board Changes in assumptions $ 656,941 $ ( 59,386) Net difference between projected and actual investment earnings

on pension plan investments - ( 17,845) Differences between expected and actual experience - ( 420,663) Change in proportion 565,776 - Contributions subsequent to measurment date 730,514 - Total $ 1,953,231 $ ( 497,894) 101

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 14 - RETIREMENT PLANS (CONTINUED)

The $4,782,356 and $730,514 of deferred outflows of resources resulting from the County and the Board’s contributions to the Employees’ Systems subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources for the County will be amortized over a five-year period, as follows:

Year ended June 30: Board County 2024 $ 105,969 $ 612,267 2025 109,329 632,375 2026 20,936 103,404 2027 499,854 3,334,053 2028 ( 11,265) ( 105,013) $ 724,823 $ 4,577,086 Covered payroll refers to all compensation paid to active employees covered by the Systems.

Covered On-Behalf Payroll By State County $ 33,312,053 $ - Board of Education 66,931,801 5,467,495 Library 1,200,081 186,708 Pension contributions made by the State of Maryland, on behalf of the Board of Education and the Library are recognized as both revenue and expenditure.

The aggregate amount of pension expense is as follows:

Maryland State Retirement and Pension System $ 2,931,500 Length of Service Award Program ("LOSAP") 747,261 Aggregate amount of pension expense $ 3,678,761 102

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 15 - DEFERRED COMPENSATION PLAN

The County offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The Plan, available to all County employees, permits them to defer a portion of their salary until future years.

Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency.

All amounts of compensation deferred under the plan; all property and rights purchased with those amounts; and all income attributable to those amounts, property or rights are solely the property and rights of the participants. The County has no liability for losses under the plan.

Investments are managed by the plan’s administrator based on several different investment options, or combinations thereof.

The choice of the investment option(s) to be used is made by each participant. The County has no management control over the assets of the plan. Accordingly, per GASB Statement No. 32, the assets of the plan are not included in these financial statements.

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS

PRIMARY GOVERNMENT

Other Post-Employment Benefit Trust (OPEB Trust) In fiscal year 2015, the County Commissioners approved the County joining the MACo Pooled OPEB Investment Trust Fund. A separate Trust document for the MACo OPEB Trust can be found on the MACo website at www.mdcounties.org.

Plan Reporting The measurement date for GASB 74 is the Employer’s fiscal year end, June 30, 2023. Plan assets (Fiduciary Net Position) are measured as of this date. The Total OPEB Liability (TOL) as of this date is based on an actuarial valuation as of January 1, 2023, with adjustments made for the half year difference. Adjustments include Service Cost, Interest on Total OPEB Liability, and expected benefit payments during the year. This is also known as a roll-forward.

Under GASB 74, the Net OPEB Liability (NOL) is established as the difference between the Total OPEB Liability and the Plan Fiduciary Net Position. The NOL is very much like the unfunded actuarial accrued liability that is developed for the funding valuation, with adjustments for any time between the valuation date and the measurement date.

Relevant Dates  Valuation Date: January 1, 2023  Measurement Date: June 30, 2023  Reporting Date: June 30, 2023 Plan Membership The following is a summary of the plan membership as of January 1, 2023.

Active 439 Retired 290 Total 729 103

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Other Post-Employment Benefit Trust (OPEB Trust) (Continued)

PRIMARY GOVERNMENT

Plan Description The County’s Other Post-Employment Benefit Plan (OPEB Plan) is an agent multiple-employer defined benefit healthcare plan that covers retired employees of the primary government, the Queen Anne’s County Board of Education, and the Queen Anne’s County Free Library. The Plan was established as specified in County Ordinance No. 09-12.

Plan descriptions and actuarial assumptions for each participant are described: (1) as follows for the primary government and

(2) in financial statements issued separately for all other participants.

The County’s Retiree Health Insurance Program provides medical insurance benefits to retirees and their eligible dependents.

The retiree and their dependents will receive a subsidy as outlined in the tables below provided that (1) the retiree retired directly from County service with a County retirement/pension allowance, (2) has health insurance through the County prior to retirement, (3) retired with at least 15 years of County service, and (4) the retiree elects to participate upon retirement.

Retirees who retire directly from County service with a County retirement/pension with less than 15 years of County service, who have health insurance through the County prior to retirement and who elect to participate upon retirement are eligible for the County’s Retiree Health Insurance Program however are not eligible for a subsidy.

Medical/Drug Plan PPO (80/20), EPO (85/15), BCA (85/15), Medicare Supplement Eligibility Queen Anne’s County and Library employees are eligible to continue group insurance coverage after retirement provided that:

a. Retiring employees have coverage in effect when they stop working.

b. Retirement commences on the first of the month, following the last day they are employed.

c. An employee must have been a permanent active employee. To receive a subsidy, must have at least 15 years of service.

d. Eligibility for Retirement:

Non-LEOPS hired on or after 7/1/2011  Rule of 90 (age plus service is at least 90), or  Age 65 with 10 years of service, or  Age 60 with 15 years of service Non-LEOPS hired before 7/1/2011  Age 55 with 15 years of service, or  Age 62 with 5 years of service, or  Age 63 with 4 years of service, or  Age 64 with 3 years of service, or  Age 65 with 2 years of service, or  30 years of service (regardless of age)

104

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

Plan description (Continued)

LEOPS

 Age 50 (no service requirement), or  25 years of service (no age requirement) Retiree Payment The employer subsidy is based on service, which medical plan you are enrolled in, retirement date and location.

For current County retirees receiving a 90% subsidy, they would continue to receive this subsidy rate, for all others:

Years of County Service Prior to EPO/BCA Total PPO Total Subsidy Retirement Subsidy Percentage Percentage Less than 15 years 0.0% 0.0% At least 15 yrs but less than 18 60.0% 60.0% At least 18 yrs but less than 21 70.0% 65.0% At least 21 yrs but less than 24 80.0% 75.0% 24 years or more 85.00% 80.00% Plan Changes Since Prior Valuation There have been no changes in eligibility but there was a change in the cost sharing provisions since the prior valuation.

Actuarial Information Actuarial assumptions The total OPEB liability was determined by an actuarial valuation as of January 1, 2023, using the following actuarial assumptions, applied to all periods included in the measurement:

 Investment Return: 6.00%, net of investment expense and including inflation  Healthcare Trend: 6.00% initially for all plans, grading down to 4.25% for PPO, EPO, and BCA plans ultimate Mortality rates are based on the PUB2010G Headcount tables with Scale SSA applied on a generational basis. PUB2010G Headcount Disabled tables are used for those on disability, if applicable.

Changes in Actuarial assumptions The rates of retirement, disability, withdrawal, and mortality were changed since the prior year, as well as a change in discount rate due to an updated fund availability analysis.

105

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

Actuarial Information (Continued) Actuarial Methods for Determining Employer Contributions The same economic and demographic assumptions are used for both funding and financial reporting purposes under GASB 74/75.

The Entry Age method is used for accounting/GASB purposes, therefore all of the actuarial figures within this Report are based on it. Actuarially Determined Contributions are also based on the Entry Age method, with a closed level percentage of payroll amortization of the unfunded liability (15 years remaining).

Expected Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimates of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. This is then

modified through a Monte-Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected return.

Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2023, and the final investment return assumption, are summarized in the following table:

Long-Term Expected Real Asset Class Rate of Return Weight US Equity 6.25% 36.0% International Equity 6.50% 24.0% Fixed Income 2.05% 35.0% Real Estate 4.85% 5.0% Total Weighted Average Real Return 4.77% 100.0% Plus Inflation 2.50% Total Return w/o Adjustment 7.27% Risk Adjustment -1.27% Total Expected Return 6.00% Discount Rate The discount rate used to measure the total OPEB liability is 5.90%. The County’s funding strategy is to contribute the

Actuarially Determined Contribution in fiscal year 2023, and each year going forward. It is expected that benefits will be paid from the trust when a 50% funding level is reached. Based on this information, we project that benefits will be financed on a pay as you go basis until 2028, then from the trust there forward.

Therefore, the expected trust return of 6.00% is blended with the 20-year Aaa bond rate* of 3.87%. The blended rate is 5.90%. The prior rate was 5.90% on this basis.

*Source: Fidelity general obligation municipal bond index.

106

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

Net OPEB Liability Sensitivity of the net OPEB liability to changes in the discount rate The following presents the net OPEB liability of the plan, calculated using the current discount rate, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1% point lower or 1% point higher:

DISCOUNT RATE

1% Decrease Discount Rate 1% Increase System 4.90% 5.90% 6.90% Net OPEB liability $ 49,960,207 $ 32,665,223 $ 30,079,380 Sensitivity of the net OPEB liability to changes in the trend rate The following presents the net OPEB liability of the plans, calculated using the current health care trend rate of 6.00% to an ultimate rate of 4.25% for PPO, EPO, and BCA plans, as well as what each plans net OPEB liability would be if it were

calculated using a health care trend rate that is 1% point lower or 1% point higher:

HEALTH CARE TREND

1% Decrease to Discount Rate 1% Increase to 3.25% 4.25% 5.25% Net OPEB liability $ 29,424,856 $ 32,665,223 $ 46,951,717 107

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 – OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

Net OPEB Liability (Continued) Changes in the net OPEB liability are as follows:

Total OPEB Liability ("TOL") Service cost $ 1,263,176 Interest 3,386,945 Changes in benefit terms 394,544 Difference between expected and actual experience ( 8,541,920) Changes in assumptions ( 1,645,226) Benefit payments ( 1,706,367) Net change in total OPEB liability ( 6,848,848) Total OPEB liability - beginning of year 56,983,624 Total OPEB liability - end of year $ 50,134,776 Plan Fiduciary Net Position ("PFNP")

Contributions - employer $ 4,098,432 Contributions - member - Net investment income 1,430,230 Benefit payments ( 1,706,367) Admin expenses ( 7,722) Other ( 7,935) Net change in plan fiduciary net position 3,806,638 Plan fiduciary net position - beginning of year 13,662,915 Plan fiduciary net position - end of year $ 17,469,553 Net OPEB liability ("NOL") - beginning of year $ 43,320,709 Net OPEB liability - end of year $ 32,665,223

PFNP as a % of TOL 34.8% Covered employee payroll $ 32,307,222 NOL as a % of covered payroll 101.1% 108

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

OPEB Expense The amount of OPEB expense recognized in the reporting period are as follows:

Service cost $ 1,263,176 Interest on total OPEB liability 3,386,945 Difference between expected and actual experience* (2,107,529) Changes in actuarial assumptions* ( 312,589) Employee contributions - Changes in benefit terms 394,544 Projected earnings on plan investments ( 822,470) Difference between projected and actual earnings* 138,937 Administrative expense 7,722 Other changes in fiduciary net position 7,935

Total OPEB expense $ 1,956,671

* - portions recognized for expense

Deferred Inflow/Outflow Summary The deferred outflows / inflows are as follows:

Defferred Defferred Outflows of Inflows of Resources Resources Net difference between projected and actual earnings on plan investments $ 538,334 $ - Differences between expected and actual experience 326,909 ( 13,135,546) Changes in actuarial assumptions 732,449 ( 3,023,683) Total $ 1,597,692 $ ( 16,159,229) Net deferred outflows / (inflows) will be amortized as follows:

Year ended June 30:

2024 $ ( 2,275,761) 2025 ( 2,334,521) 2026 ( 1,990,187) 2027 ( 2,571,229) 2028 ( 2,633,100) Thereafter ( 2,756,739) $ ( 14,561,537) 109

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS

BOARD OF EDUCATION

Plan description The Board of Education of Queen Anne’s County administers a single-employer defined benefit healthcare plan (“the Plan”).

The plan provides healthcare insurance for eligible retirees and their spouses through the Board’s group health insurance plan, which covers both active and retired members. The Plan does not issue a stand-alone report. Benefit provisions are based on contractual agreements with employee groups. Employees are eligible to participate in the Plan upon retirement.

Participants must meet the eligibility requirements of the Maryland State Teachers’ pension system described below:

For members hired before July 1, 2011, the earliest retirement eligibility is the earlier of:

 Age 55 with 15 years of service,  Age 62 with 5 years of service,  Age 63 with 4 years of service,  Age 64 with 3 years of service,  Age 65 with 2 years of service, or  30 years of service, regardless of age.

For members hired after July 1, 2011, the earliest retirement eligibility is the earlier of  Rule of 90 (age plus service is at least 90),  Age 65 with 10 years of service,  Age 60 with 15 years of service As of February 1, 2022, the date of the actuarial valuation data, approximately 463 retirees were receiving benefits, and 938 active employees are potentially eligible to receive future benefits.

Funding Policy The Board pays a portion of retiree healthcare premiums based on years-of-service ranging from 5 years of service to 25+ years of service until the retiree becomes Medicare-eligible. The retiree pays the remaining premium, including the cost of eligible dependents. Pre-Medicare retirees may choose between two medical plans (a PPN plan and an EPO plan). Both plans include medical and prescription benefits. Once a participant is Medicare eligible, the participant must switch to a Medicare

supplement plan, which is also packaged with a prescription plan. Retirees have the option of electing dental and vision coverage in addition to medical coverage.

Employer Contribution Retirees receive a subsidy for their post-retirement medical insurance based on service. The subsidy requires a minimum of 5 years of service for Administration and 10 years of service for Teachers. For teachers, once ten years of service is reached, the Board covers 36% of the cost of the individual’s EPO health plan. The percentage subsidized by the Board increases 3.6% per year for every year of service in excess of ten. At 25 years of service, the maximum subsidy of 90% is reached. For

administrators, once five years of service is reached, the Board covers 35% of the cost of the individual’s EPO health plan.

The percentage subsidized by the Board increases 5.5% per year for every year of service in excess of five. At 15 years of service, the maximum subsidy of 90% is reached. Retirees with less than the minimum years of service required to receive a subsidy are allowed access to the medical coverage, but must pay 100% of the published rates. In addition, the Board is contractually obligated to pay the full cost of medical insurance for certain retired directors, superintendents, and their

spouses.

110

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

BOARD OF EDUCATION (CONTINUED)

Employer Contribution (Continued) The Board also pays the cost of providing term life insurance for its retirees in varying amounts depending upon length of service and date of retirement. The benefits payable upon death are $5,000 (fixed) for 5 to 25 years of service or $50,000 (maximum-based on annual salary at retirement) for over 25 years of service. There is a reduction of benefit of 25% at age 70

and a benefit reduction of 50% at age 75 and beyond.

Net OPEB Liability The annual OPEB expense under GASB Statement No. 75 is equal to the change in the unfunded actuarial accrued liability from the prior year’s measurement date to the current year measurement date, with some of the liability changes being deferred to future years. Changes in the actuarial accrued liability due to experience gains or losses or changes in assumptions are recognized over the expected future working lifetime of all plan participants, including retirees. For the fiscal year ended

June 30, 2023, the Board recognized an OPEB expense of $8,737,582.

The Board’s total OPEB liability is an amount actuarially determined in accordance with the parameters of GASB Statement No. 75. The total OPEB liability is calculated using a measurement date of June 30, 2022. Therefore, plan information for the year ended June 30, 2022 is utilized. The following table shows the components of the Board’s total and net OPEB liability at June 30, 2022.

Total OPEB Liability ("TOL") Service cost $ 10,111,903 Interest 3,734,228 Changes in benefit terms 10,136,487 Difference between expected and actual experience ( 14,515,342) Changes in assumptions ( 63,865,205) Benefit payments ( 3,103,324) Net change in total OPEB liability ( 57,501,253) Total OPEB liability - beginning of year 196,009,307 Total OPEB liability - end of year $ 138,508,054 Plan Fiduciary Net Position ("PFNP")

Contributions - employer $ 3,103,324 Net investment income ( 83,447) Benefit payments ( 3,103,324) Admin expenses - Net change in plan fiduciary net position ( 83,447) Plan fiduciary net position - beginning of year 587,931 Plan fiduciary net position - end of year $ 504,484 Net OPEB liability ("NOL") - beginning of year $ 195,421,376 Net OPEB liability - end of year $ 138,003,570 PFNP as a % of TOL 0.36%

Covered employee payroll $ 62,237,232 NOL as a % of covered payroll 221.74% Payments have typically been liquated from the General Fund in prior years.

111

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

BOARD OF EDUCATION (CONTINUED)

Funding Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new

estimates are made about the future. The schedule of net OPEB liability, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the net OPEB liability is increasing or decreasing over time relative to the total OPEB liability for benefits.

Additional information is as follows:

 Measurement date – The Board selected a June 30, 2022 measurement date for fiscal year-end 2023. The measurement date can be any date between the last day of the prior fiscal year and the last day of the current fiscal year.

 Cost method – This valuation uses the Entry Age Normal Funding Method calculated on an individual basis with level percentage of payroll.

 Claims data – Monthly paid claims, administrative expenses and enrollment for employees and retirees from January 2019 through December 2021 were supplied by the carrier. Claims were divided into pre and post 65 age retirees.

 Demographic data – Data included current medical coverage for current employees and retirees as of February 1, 2022.

 Discount rate assumption - Benefits are discounted based on the Bond Buyer GO 20-year Bond Municipal Bond Index, an index rate for 20-year tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher. This rate was 3.69% as of June 30, 2022.

 Health care trend – The medical trend assumption was developed using the Society of Actuaries (SOA) Long-Run Medical Cost Trend Model. The SOA model was released in December 2007 and is updated annually. The following assumptions were used as input variables into this model:

Rate of Inflation 2.5% Rate of growth in real income / GDP per year 1.4% Extra trend due to technology and other factors 1.0% Expected health share of GDP in 2031 19.0% Health Share of GDP Resistance Point 20.0% Year for limiting cost growth to GDP growth 2075  Salary Scale – State of Maryland salary scale assumption for teachers.

112

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

BOARD OF EDUCATION (CONTINUED)

Funding Status and Funding Progress (Continued)  Decrement Assumptions – Healthy Pub-2010 Mortality Table (teacher and general employees, headcount-weighted), Fully Generational, Projected using Scale MP-2021 Disability Pub-2010 Mortality Table (teacher and general disabled, headcount-weighted), Fully Generational, Projected using Scale MP-2021 Sensitivity of the Net OPEB Liability The following table presents the Board’s net OPEB liability at June 30, 2022 using the discount rate of 3.69%, as well as

what the net OPEB liability would be if it were calculated using a discount rate that is 1% point lower or 1% point higher than the current rate:

DISCOUNT RATE

1% Decrease Discount Rate 1% Increase System 2.69% 3.69% 4.69% Net OPEB liability $ 164,437,690 $ 138,003,570 $ 117,062,951 The following table presents the Board’s net OPEB liability at June 30, 2022 using the health care trend rate of 3.94%, as well as what the net OPEB liability would be if it were calculated using a trend rate that is 1% point lower or 1% point higher than the current rate:

HEALTH CARE TREND

1% Decrease to Discount Rate 1% Increase to 2.94% 3.94% 4.94% Net OPEB liability $ 115,298,558 $ 138,003,570 $ 167,899,360 Deferred Inflows/Outflows of Resources related to OPEB At June 30, 2023, the Board reported deferred outflows of resources and deferred inflows of resources related to the OPEB plan from the following sources:

Defferred Defferred Outflows of Inflows of Resources Resources Changes of assumptions $ 40,966,422 $ ( 66,003,863) Net difference between projected and actual earnings 23,234 - Differences between expected and actual experience 1,835,667 ( 75,382,395) Total $ 42,825,323 $ ( 141,386,258) 113

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

BOARD OF EDUCATION (CONTINUED)

Deferred Inflows/Outflows of Resources related to OPEB (Continued) Amounts reported as differences between projected and actual earnings on OPEB plan investments will be amortized and expensed over a closed five-year period. Amounts reported as differences between expected and actual experience will be amortized and expensed over a period equal to the average remaining service lives of all employees that are provided with

other post-employment benefits through the plan. Amounts reported as changes in assumptions will be amortized and expensed over a period equal to the average remaining service lives of all employees that are provided with other postemployment benefits through the plan. Amortization expense related to net deferred inflows and outflows of resources over the next five years is expected to be as follows:

Year ended June 30:

2024 $ ( 15,244,834) 2025 ( 15,243,371) 2026 ( 15,242,175) 2027 ( 15,228,947) 2028 ( 13,926,200) Thereafter ( 23,675,408) $ ( 98,560,935) Changes in assumptions in the most recent actuarial valuation included adjusting the discount rate to the updated index rate for 20-year tax exempt general obligation municipal bonds.

LIBRARY

Plan description The Library participates in an agent multiple-employer defined benefit healthcare plan (“the Plan”) that covers retired employees of Queen Anne’s County, the Queen Anne’s County Board of Education, and the Library.

A Trust entity was established in June, 2009 entitled Other Post-Employment Benefit Trust – County Commissioners of Queen Anne’s County, County Commissioners of Kent County, and Participating Agencies (the “Trust”). In August 2020, the Trust was closed and all members transferred their respective funds to the MACo (Maryland Association of Counties) Pooled OPEB Investment Trust Fund. A separate “Trust document for the MACo OPEB Trust can be found on the MACo website at

www.mdcounties.org.

Benefits provided The plan reimburses eligible retirees for a portion of healthcare insurance based on years-of-service ranging from $3,000 for 15 years of service to $4,400 for 25 plus years of service. The retiree pays the remaining premium, including the cost of eligible dependents. Participants must meet the eligibility requirements of the State Retirement and Pension System of Maryland, which are age 55 with 15 years of service, age 62 with 5 years of service, or 30 years of service (regardless of

age).

114

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

LIBRARY (CONTINUED)

Employees covered by benefit terms The following is a summary of plan membership as of January 1, 2022.

Active 19 Retired 9 Total 28 Contributions The Library pays retiree healthcare benefits on a pay-as-you-go basis. For the year ended June 30, 2023, the Library contributed $29,012.

Net OPEB liability The Library's net OPEB liability was measured as of June 30, 2023, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation January 1, 2022.

Actuarial assumptions The total OPEB liability was determined by an actuarial valuation as of January 1, 2022, using the following actuarial assumptions, applied to all periods in the measurement:

Expected return – 6% including inflation and net of investment expenses.

Healthcare trend – Because this is a flat dollar plan and retirees secure their own insurance, the trend is not applicable.

Mortality rates are based on PUB2010G Headcount tables with Scale SSA applied on a generational basis. PUB2010G Headcount Disabled tables are used for those on disability, if applicable.

There were no changes in actuarial assumptions since the prior year, except the change in discount rate due to an updated depletion analysis.

Actuarial methods for determining employer contributions use the same economic and demographic assumptions for both funding and financial reporting purposes under GASB 74/75. The Entry Age method is used for accounting/GASB purposes, therefore all of the actuarial figures within this report are based on it. Actuarially Determined Contributions are based on the Entry Age method, with a closed level percentage of payroll amortization of the unfunded liability (17 years remaining).

Discount rate The discount rate used to measure the total OPEB liability is 4.2%. There is essentially no prefunding of benefits in an OPEB trust for this plan (i.e., pay as you go), however, the Library has funds invested in the MACo pooled OPEB Trust. For this analysis, we assumed the trust assets would grow with earnings until a 60% funding ratio is reached. Based on this, a blended rate was developed which consists of the 20-year municipal bond Aa index as of June 30, 2023 of 3.87% blended with the

assumed return of 6.00%.

Benefits would be paid from the trust from 2050 to 2059, and from general fund assets before and after this time period, resulting in a blended rate of 4.2%. The prior rate was 2.4%.

115

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

LIBRARY (CONTINUED)

Changes in the net OPEB liability Total OPEB Liability ("TOL") Service cost $ 11,425 Interest 28,346 Changes in benefit terms - Difference between expected and actual experience ( 127,474) Changes in assumptions ( 30,962) Benefit payments ( 29,012) Net change in total OPEB liability ( 147,677) Total OPEB liability - beginning of year 711,597 Total OPEB liability - end of year $ 563,920 Plan Fiduciary Net Position ("PFNP")

Contributions - employer $ 29,012 Net investment income 2,792 Benefit payments ( 29,012) Admin expenses - Net change in fiduciary net position 2,792 Plan fiduciary net position - beginning of year 30,267 Plan fiduciary net position - end of year $ 33,059 Net OPEB liability ("NOL") - beginning of year $ 681,330 Net OPEB liability - end of year $ 530,861 PFNP as a % of TOL 5.9% Covered employee payroll $ 1,200,081

NOL as a % of covered payroll 44.2% Sensitivity of the net OPEB liability to changes in the discount rate The following presents the net OPEB liability of the Library, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate:

DISCOUNT RATE

1% Decrease Discount Rate 1% Increase System 3.20% 4.20% 5.20% Net OPEB liability $ 589,020 $ 530,861 $ 481,922 Sensitivity of the net OPEB liability to changes in the healthcare cost trend rate Because the benefits from this plan are a fixed dollar amount based on years of services and there is no implicit subsidy (retirees secure their own health insurance), a change in assumed trend rate will not have an impact on the OPEB liability.

Investments The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected

inflation. This is then modified through a Monte-Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected return.

116

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

LIBRARY (CONTINUED)

Best estimates of arithmetic real rates of return for each major asset class included in the plan’s target asset allocation as of June 30, 2023, and the final investment return assumption, are summarized in the following table:

Long-Term Expected Real Asset Class Rate of Return Weight US Equity 6.25% 36.0% International Equity 6.50% 24.0% Fixed Income 2.05% 35.0% Real Estate 4.85% 5.0% Total Weighted Average Real Return 4.77% 100.0% Plus Inflation 2.50% Total Return w/o Adjustment 7.27% Risk Adjustment -1.27% Total Expected Return 6.00% OPEB expense and deferred outflows of resources related to OPEB For the year ended June 30, 2023, the Library recognized an OPEB expense of $43,305. At June 30, 2023, the Library

reported deferred outflows and deferred inflows of resources related to the OPEB plan from the following sources:

Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 23,514 $ ( 138,466) Changes of assumptions 113,516 ( 123,224) Net difference between projected and actual earnings 2,593 - Total $ 139,623 $ ( 261,690) Amounts reported as deferred outflows and deferred inflows of resources related to the OPEB plan will be recognized in expense over a period ranging from five to nine years as follows:

Year ended June 30:

2024 $ 5,162 2025 4,985 2026 5,230 2027 ( 28,781) 2028 ( 37,559) Thereafter ( 71,104) $ ( 122,067) 117

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 17 – VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM (LOSAP) Plan Description The County established the County Fire and EMS Commission Pension Plan Length of Service Award Program (“LOSAP”) in November 2004. The LOSAP is a single-employer defined benefit length of service award program that covers all volunteer members (“members”) of the County’s Fire and EMS Commission. The LOSAP has no assets accumulated in a

trust that meet the criteria in GASB 73, paragraph 4. The LOSAP is funded entirely by the general fund.

Relevant dates  Valuation date: January 1, 2022  Measurement date: December 31, 2022  Reporting date: June 30, 2023 An active member, upon reaching 55 years of age, is eligible to receive $6 per month for each year of eligible service, with a $240 maximum monthly benefit that may be earned. An inactive member that reaches 65 years of age and is vested with 5 years of service is also entitled to the same benefits ($6/month for each year of service, maximum $240 per month). An

inactive life member with 20-plus years of service is entitled to the same benefits at 55 years old. Insured participants’ designated beneficiary shall receive the greater of $25,000 face amount of the life insurance or the present value of the participants’ accrued benefit. Non-insured participants’ designated beneficiary shall receive the lump sum of the present value of the participants’ accrued benefit.

Plan Description (Continued) The participant summary as of the January 1, 2022 actuarial valuation is as follows:

Active members 340 Vested-terminted 147 Retired and beneficiaries 173 Total 660 Actuarial Assumptions The total LOSAP liability was determined by an actuarial valuation as of January 1, 2022 rolled forward to December 31, 2022 using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 0.00% Salary increases Not Applicable Investment rate of return 4.05%, net of pension plan investment expense, including inflation Mortality No pre-retirement mortality; post retirement RP2000 projected to 2030 Retirement First eligible Turnover T5 Disability None The 4.05% discount rate is based on a 20 year AA general obligation bond rate as of December 31, 2022.

The above is a summary of key actuarial assumptions. Full descriptions of the actuarial assumptions are available in the January 1, 2022 actuarial valuation report.

118

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 17 – VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM (LOSAP)

(CONTINUED)

Sensitivity of Total LOSAP Liability The following presents the total LOSAP liability, calculated using single discount rate of 4.05%, as well as what the total LOSAP liability would be if it were calculated using a discount rate that is 1% point lower and 1% point higher.

1% Decrease Discount Rate 1% Increase System 3.05% 4.05% 5.05% Net LOSAP Liability $ 9,152,533 $ 7,757,868 $ 6,664,088 Total LOSAP Liability The components of the total LOSAP liability are as follows:

Plan Total LOSAP Fiduciary Net Net LOSAP Liability Position Liability Balances as of January 1, 2022 $ 10,267,761 $ - $ 10,267,761 Changes for the year:

Service cost 268,262 - 268,262 Interest 409,940 - 409,940 Changes of benefit terms - - - Differences between expected and actual experience 819,208 - 819,208 Changes of assumptions ( 3,702,745) - ( 3,702,745) Benefits payments and expenses ( 304,558) - ( 304,558) Net changes ( 2,509,893) - ( 2,509,893) Balances as of December 31, 2022 $ 7,757,868 $ - $ 7,757,868 Plan fiduciary net position as a percentage of the total pension liability 0%

LOSAP Expense The components of LOSAP expense are as follows:

LOSAP

Expense Service cost $ 268,262 Interest 409,940 Changes in benefit terms - Differences between expected and actual earnings - Differences between expected and actual experience 188,212 Changes of assumptions ( 119,153) Total LOSAP expense $ 747,261 119

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 17 – VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM (LOSAP)

(CONTINUED)

Maryland State Retirement and Pension System $ 2,931,500 Length of Service Award Program ("LOSAP") 747,261 Aggregate amount of pension expense $ 3,678,761 LOSAP Deferred Outflows and Deferred Inflows of Resources The components of LOSAP deferred outflows and deferred inflows are as follows:

Defferred Defferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 789,940 $ ( 15,692) Changes of assumptions 955,441 ( 3,208,139) Net difference between projected and actual earnings - - Total $ 1,745,381 $ ( 3,223,831) Amounts reported as deferred outflows and deferred inflows will be amortized as follows:

Year ended June 30:

2024 $ ( 27,280) 2025 ( 267,655) 2026 ( 535,995) 2027 ( 612,116) 2028 ( 35,404) Thereafter - $ ( 1,478,450) 120

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 18 – DEFICIT EQUITY BALANCES

There were no Non-Major Governmental Funds that ended the year with deficit balances in unassigned fund balance for the year ended June 30, 2023.

The following Enterprise Funds ended the year with deficit equity balances:

The Sewer Operations Fund has a deficit balance in unrestricted net position of $1,062,943 as of June 30, 2023.

The Bay Bridge Airport Fund has a deficit balance in unrestricted net position of $943,429 as of June 30, 2023.

The Golf Course Enterprise Fund has a deficit balance in unrestricted net position of $401,278 as of June 30, 2023.

The County Commissioners established the guideline that the Enterprise Funds should be self-supporting, to the extent possible. Therefore, a variety of measures are being evaluated in order to attempt the goal of balancing the Enterprise Funds.

NOTE 19 – COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS

PRIMARY GOVERNMENT

Grants - The County and its component units are recipients of various federal and state grant and/or loan programs, which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by these grantor agencies. If the County has not complied with the rules and regulations governing the programs, refunds of money received may be required and the collectability of any related receivable as of June 30, 2023

may be impaired. The County’s management believes that there are no significant contingent liabilities that must be recorded relating to compliance with the rules and regulations governing these programs. No funds were required to be returned in fiscal year 2023.

Further, certain grants for capital projects, such as various park projects funded by the State, must be used for the intended purpose of the grant. If, at any time during the useful lives of these projects, the facilities cease to operate in their intended capacity, the County may be required to reimburse the granting agency that portion of the grant or note that is equal to the percentage of useful life remaining. The County’s Management believes that no such grant reimbursements will be needed.

In fiscal year 2010, the County’s Department of Housing and Community Services received a grant of $350,000 from the Maryland Department of Housing and Community Development. This Maryland Neighborhood Conservation Initiative (NCI) Grant provided funding to be used for the acquisition and purchase of foreclosed properties for resale to qualifying homebuyers, as well as the issuance of zero percent deferred payment loans to eligible critical service workers. Per the terms

of the agreement, the grantee may reuse funds for these same activities until June 30, 2013. Funds returned to the County from program participants after June 30, 2013 must be returned to the state. Therefore, this grant has been recorded as a pass-through grant, with the County contingently liable for the return of these funds to the state at some point in time after June 30, 2013. During Fiscal Year 2014, the County identified $69,569 in funds that were required to be returned to the

grantor per grant provisions. No funds were required to be returned in fiscal years 2015 thru 2023.

In accordance with the provisions of GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, the County has committed certain fund balances for future construction projects. In the General Capital Projects Fund, a total of $5,811,898 has been committed, including $1,076,841 for Economic Development, $3,952,567 for site improvements pursuant to agreements with local developers, and $782,490 for rubble surcharge. In the Roads Capital

Projects Fund, $909,241 has been contributed by developers and is committed to fund infrastructure improvements.

The County is a defendant in various lawsuits. After considering all relevant facts and the opinion of legal counsel, it is management’s opinion that such litigation will not have a material adverse effect on the financial position of the County.

121

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 20 – JOINT VENTURE

In 1991, the County Commissioners, in conjunction with Talbot, Caroline, and Kent Counties, entered into a regional partnership known as the Midshore Regional Landfill Joint Venture. This venture was formed to provide a long-term, solid waste management solution for the four-county area. As part of the agreement, each of the four Counties agreed to host a solid waste facility for a twenty-year period, giving the venture a total duration of eighty years. In 1991, the Midshore

Regional Landfill opened in Talbot County and served the waste management needs of the four-County area for twenty years. This facility, owned and operated by the Maryland Environmental Service (MES), closed on December 31, 2010. The second Midshore facility, Midshore II, opened in Caroline County in January 2011 and is fully operational. After the facility in Caroline County reaches capacity, another landfill will be constructed in Queen Anne's County, with Kent County to

follow in turn. Each County is required to, and has, set aside sufficient land to construct a landfill within their borders. The agreement expires when the last of the four landfills is closed.

Queen Anne’s County has a 35.66% financial interest in the Midshore Regional Landfill. If expenditures exceed revenues, the County is obligated to cover the deficiency in proportion to its financial interest; however, to date additional funding from the County has not been required nor does management anticipate it.

Total closure and post closure costs for the landfills are $23.0 million, with approximately $8.2 million attributable to Queen Anne’s County. These costs are paid from tipping fees of acceptable waste delivered by or for the account of the counties. It is currently expected that sufficient funds will be available from landfill revenues to pay future closure and post closure costs.

MES has accrued and reported a long-term liability of $10.1 million as of June 30, 2023, determined by the estimated useful life of the landfill.

Similar to the post closure costs, each of the participating Counties is contingently liable for the debt related to the new facility, Midshore II. Midshore II was funded with project revenue bonds totaling $19.4 million. As of June 30, 2023, $6.9 million is attributable to Queen Anne’s County in the event of a default.

Each County is required to place its municipal waste in the landfill. The facility is also available to commercial waste disposal firms at the same price per ton as charged to the County governments.

MES has satisfied its financial assurance requirements based upon the local government financial ratio tests of the project participants as of June 30, 2023. MES expects to satisfy these requirements as of June 30, 2023 using the same criteria.

Due to inflation and changes in technology, laws, and regulations, estimated closure and post closure care costs may change in the future. Financial Statements of the Landfill can be obtained from MES located at 259 Najoles Road, Millersville, MD 21108.

122

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 21 – POLLUTION REMEDIATION OBLIGATIONS

During fiscal year 2009, the County implemented the provisions of Governmental Accounting Standards Board (GASB) Statement 49, Accounting and Financial Reporting for Pollution Remediation Obligations.

During a prior fiscal year, 2003, the County agreed to a voluntary Methyl Tertiary Butyl Ether (MTBE) testing program for underground fuel tanks located at the County’s Department of Public Works’ fuel depot. This testing program was and still is approved by the Maryland Department of Environment (MDE).

Costs covered remediation work and consulting fees; the latter for testing, studies, and monitoring. Remediation efforts included demolition and removal of the existing fuel depot at the Public Works Centreville Shop; remediation of the soils via excavation; offsite controlled disposal and backfill; installation of monitoring wells; in situ chemical oxidation and dual phase extraction; attorney’s fees and miscellaneous environmental consulting services.

In May 2010, MDE requested the County devise a Corrective Action Plan (CAP) to address contamination concerns at the fuel depot site. In August 2010, MDE approved the County’s CAP work which included the installation of additional monitoring wells and one year of monitoring, sampling, testing and furnishing of those reports to MDE.

In December of 2014, a leak was discovered at the 10,000 gallon fuel oil UST for the office building. MDE required the removal of the tank and mitigation of the contaminated soils and ground water. The tank has been replaced with a compliant above ground 1,500 gallon fuel oil storage tank. This work was completed, including compliant disposal of all soils by May 2015. MDE subsequently directed the County to install two additional monitoring wells and to abandon the former injection

wells on-site.

During fiscal year 2023, the County has maintained the required self-testing of all monitoring wells. As per a letter received by MDE-OCP, dated March 27, 2023, regarding Case #2004-0264-QA, the County was directed to “Conduct one or more quarterly sampling event”. This task was contracted out to Chesapeake GeoSciences, Inc. and was performed on July 26, 2023. This report was then sent to MDE-OCP in the month of September 2023. Along with this report, to accompany the

reports data, the County’s self-testing monthly data was also compiled and sent to MDE-OCP on September 12, 2023, which was inclusive of the months January 2022 through August 2023.

As per an email from MDE-OCP dated September 22, 2023, it was stated “We look forward to reviewing that report and the provided gauging data. Once we complete our review, we will reach out”. As of this point, there has been no response from MDE-OCP.

The County will continue to follow the schedule and monitor the wells as it has been doing for the past years. Also, the County will continue to provide a monthly report to MDE showing the data found during the monitoring processes. As applied, the following schedule is as follows: monitoring well MW-2A is tested every week. All monitoring wells are tested once a month.

The estimated costs over the next year are not material, and thus no liability has been recorded at this time. None of these outlays met the requirements for capitalization noted in GASB Statement 49 and they were not capitalized.

123

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2023

NOTE 22 – PRIOR PERIOD RESTATEMENT

The County implemented GASB 87, Leases, at July 1, 2021. During the current year, it was discovered that the County did not appropriately account for lessor leases correctly in the governmental funds, but were reported correctly in the statement of net position and statement of activities. Additionally, it was discovered that the County accidently omitted a lessor lease in the Sanitary Water Fund that was in effect during fiscal year 2022 and fell under the purview of GASB 87.

It was also discovered that the County did not book the correct amount of revenue to correspond with grant-related expenses incurred in fiscal year 2022 in the Sanitary Restricted and Debt Service Funds.

The following table is summary of the effects as of June 30, 2022.

As Previously Correction of As Reported an Error Restated Business Type Activities Net position 127,444,103 385,515 127,829,618 Governmental Funds Fund balance 154,610,670 44,955 154,655,625 124

R S I

EQUIRED UPPLEMENTARY NFORMATION

125

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

FOR THE YEAR ENDED JUNE 30, 2023

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

REVENUES

Taxes Local Property Tax $ 75,535,600 $ 75,608,667 $ 78,012,721 $ 2 ,404,054 Local Income Tax 6 8,845,000 7 8,853,000 7 9,467,361 6 14,361 Admission and Amusement Taxes 185,000 1 85,000 2 48,987 63,987 Recordation Taxes 9 ,715,250 9 ,715,250 8 ,651,034 (1,064,216) Hotel Taxes 650,000 6 50,000 9 91,022 3 41,022 County Transfer Taxes 3 ,757,964 3 ,757,964 3 ,046,615 (711,349) State Shared Taxes 1 ,253,000 - - -

Franchise Fee 485,000 4 85,000 5 07,847 22,847 Licenses and Permits 745,875 7 45,875 8 38,254 92,379 Intergovernmental 2 ,172,218 3 ,255,282 3 ,102,287 (152,995) Charges for Current Services 2 ,880,212 2 ,838,212 3 ,298,630 4 60,418 Fines and Forfeitures 70,500 70,500 1 07,379 36,879 Investment Income 175,000 1 ,356,000 4 ,808,600 3 ,452,600 Donations - - 805 805 Miscellaneous 553,589 5 53,589 1 ,397,290 8 43,701

Total Revenues 167,024,208 178,074,339 184,478,832 6 ,404,493

EXPENDITURES

GENERAL GOVERNMENT

Legislative 524,838 679,055 660,571 18,484 Judicial Circuit Court 885,990 901,849 896,096 5,753 Orphan's Court 99,001 99,001 92,688 6,313 State's Attorney 1 ,560,063 1 ,594,353 1 ,551,197 43,156 County Administrator 257,236 2 64,097 2 62,609 1,488 Board of Elections 1 ,228,694 1 ,228,694 1 ,020,441 2 08,253 Finance Office 1 ,593,877 1 ,630,015 1 ,447,407 1 82,608 Human Resources 668,914 7 15,476 7 13,407 2,069

Planning and Zoning 2 ,461,150 2 ,508,604 2 ,390,793 1 17,811 Information Technology 3 ,299,470 3 ,348,075 3 ,073,600 2 74,475

QAC-TV 4 79,763 4 90,961 4 80,643 10,318

Legal Services 504,307 5 04,985 4 69,688 35,297 Total General Government 1 3,563,303 1 3,965,165 1 3,059,140 9 06,025

PUBLIC SAFETY

Sheriff's Office 1 0,839,754 1 1,530,510 1 1,527,110 3,400 Volunteer Fire and Rescue Services 4 ,408,510 5 ,043,510 5 ,008,796 34,714 Detention Center 6 ,413,540 6 ,535,786 5 ,528,342 1 ,007,444 Emergency Services 1 2,415,398 1 3,532,193 1 3,059,467 472,726 Total Public Safety 3 4,077,202 3 6,641,999 3 5,123,715 1 ,518,284

PUBLIC WORKS

Administration 601,083 613,433 541,914 71,519 Solid Waste Disposal 1 ,806,438 1 ,830,611 1 ,673,039 157,572 Engineering Division 1 ,085,565 1 ,112,445 9 79,885 132,560 Roads Division 5 ,953,637 - 15 ( 15) General Services 2 ,923,651 2 ,952,065 2 ,844,500 1 07,565 Animal Services 1 ,201,552 1 ,223,602 1 ,170,108 53,494 Property Management 375,923 380,979 370,985 9,994 Total Public Works 1 3,947,849 8 ,113,135 7 ,580,446 5 32,689

CONTINUED

126

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

PARKS & RECREATION

Parks $ 4 ,653,414 $ 4 ,795,105 $ 4 ,716,874 $ 7 8,231 Recreation 1 ,113,972 1 ,132,740 1 ,003,071 1 29,669 Total Parks & Recreation 5 ,767,386 5 ,927,845 5 ,719,945 2 07,900

HEALTH AND SOCIAL SERVICES

Health Department 2 ,767,669 2 ,770,352 2 ,478,623 2 91,729 Social Services 174,408 179,987 179,069 918 Total Health and Social Services 2 ,942,077 2 ,950,339 2 ,657,692 292,647

EDUCATION AND LIBRARY

Board of Education 6 4,085,219 6 4,085,219 6 4,085,219 - Chesapeake College 2 ,094,097 2 ,094,097 2 ,094,097 - Queen Anne's County Free Library 2 ,312,786 2 ,312,786 2 ,312,786 - Total Education and Library 6 8,492,102 6 8,492,102 6 8,492,102 -

CONSERVATION OF NATURAL RESOURCES

Cooperative Extension Service 387,657 391,407 390,587 820 Soil Conservation Service 229,147 248,171 246,430 1,741 4-H Park 1 29,600 1 29,600 93,020 36,580 Total Conservation of Natural Resources 746,404 7 69,178 7 30,037 39,141

ECONOMIC AND COMMUNITY DEVELOPMENT

Economic Development 893,083 908,556 884,032 24,524 Community Affairs 215,564 220,015 108,115 111,900 Total Economic and Community Development 1 ,108,647 1 ,128,571 9 92,147 136,424

INTERGOVERNMENTAL

Aid to Municipalities 355,787 355,787 347,101 8,686 SDAT Costs from State 430,000 430,000 305,923 124,077 Total Intergovernmental 785,787 785,787 653,024 132,763

MISCELLANEOUS

Aid to Other Agencies 669,066 764,566 762,998 1,568 Insurance & Benefits 3 ,207,624 3 ,207,624 2 ,832,462 375,162 Transfer to OPEB Fund 2 ,400,000 2 ,400,000 2 ,400,000 - Contingencies 2 ,448,464 9 84,399 343,596 640,803 Salary Lapse (1,378,310) (1,378,310) - (1,378,310) Leases and Subscription-Based IT Arrangements - 2,139,075 2,141,568 (2,493) Miscellaneous Non-Departmental 540,300 540,300 440,795 99,505

Total Miscellaneous 7 ,887,144 8 ,657,654 8 ,921,419 (263,765)

CONTINUED

127

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

DEBT SERVICE

School Debt Service - Principal $ 4 ,579,956 $ 4 ,579,956 $ 4 ,579,666 $ 290 School Debt Service - Interest 1 ,820,476 1 ,820,476 1 ,789,700 30,776 County Debt Service - Principal 4 ,078,805 4 ,078,805 4 ,069,291 9,514 County Debt Service - Interest 2 ,671,219 2 ,740,219 2 ,735,760 4,459 Total Debt Service 1 3,150,456 1 3,219,456 1 3,174,417 45,039 Total Expenditures 162,468,357 160,651,231 157,104,084 3 ,547,147

Excess of Revenues Over Expenditures 4 ,555,851 1 7,423,108 2 7,374,748 9 ,951,640

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals 18,000 18,000 51,405 33,405 Insurance Proceeds - - 66,705 66,705 Leases - 569,431 638,500 69,069 Subscription-Based IT Arrangements - 1 ,569,644 1 ,503,069 (66,575) Transfers In From:

Impact Fees - School 2 ,857,792 2 ,857,792 2 ,857,792 - Total Transfers In 2 ,857,792 2 ,857,792 2 ,857,792 - Transfers Out To:

General Capital Projects Fund 4 ,791,988 1 5,791,988 1 5,791,988 - Roads Capital Projects Fund 550,000 550,000 550,000 - Roads Operating Fund - 4 ,718,638 3 ,640,916 1 ,077,722 Department of Aging 2 ,160,261 2 ,243,910 1 ,354,155 889,755 Department of Housing and Community Services 602,822 624,387 516,688 107,699 Community Partnerships 466,117 585,316 579,062 6,254 Agricultural Transfer Tax - 978,433 978,433 -

Grants Fund 36,000 44,000 36,935 7,065 Impact Fees - Fire Companies/Contingencies 90,000 154,215 154,215 - Airport Enterprise Fund 59,455 59,455 59,455 - Golf Course Enterprise Fund 175,000 175,000 - 175,000 Total Transfers Out 8 ,931,643 2 5,925,342 2 3,661,847 2 ,263,495 Total Other Financing (Uses) (6,055,851) (20,910,475) (18,544,376) (2,160,891) Net Increase (Decrease) in Fund Balance $ (1,500,000) $ (3,487,367) $ 8 ,830,372 $ 12,317,739

128

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GRANTS FUND

FOR THE YEAR ENDED JUNE 30, 2023

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - Recordation Taxes - - - - State Shared Taxes - - - - Licenses and Permits - - - - Intergovernmental 892,629 3,166,082 1,535,667 (1,630,415) Charges for Current Services - - 21,782 21,782 Fines and Forfeitures - - - - Investment Income - - - - Donations - - - - Miscellaneous - - 80,029 80,029 Total Revenues 892,629 3,166,082 1,637,478 (1,528,604)

EXPENDITURES

Current General Government 98,109 98,109 79,407 18,702 Public Safety 481,009 992,049 975,469 16,580 Public Works 55,349 55,349 18,739 36,610 Parks & Recreation - - - - Health and Social Services 206,162 206,162 218,301 (12,139) Education and Library - - - - Conservation of Natural Resources - - - - Economic/Community Development 88,000 1,858,413 382,497 1,475,916 Intergovernmental - - - - Miscellaneous - - - -

Capital Outlay - - - - Debt Service Principal - - - - Interest - - - - Total Expenditures 928,629 3,210,082 1,674,413 1,535,669 Excess of Revenues Over (Under) Expenditures (36,000) (44,000) (36,935) 7 ,065

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - Insurance Proceeds - - - - Transfers In 36,000 44,000 36,935 (7,065) Transfers Out - (240,000) (240,000) - Total Other Financing Sources (Uses) 36,000 (196,000) (203,065) (7,065) Net Increase (Decrease) in Fund Balance $ - $ (240,000) $ (240,000) $ - 129

QUEEN ANNE'S COUNTY, MARYLAND

MARYLAND STATE RETIREMENT AND PENSION SYSTEMS

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2023

SCHEDULE OF THE PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (as of measurement date) Plan's Fiduciary Employer's Employer's Proportionate Net Position Proportion Proportion Share Plan's as a (Percentage) Share as a Total Plan's Percentage of the of the Employer's Percentage Fiduciary Total of Total Measurement Collective Collective Covered of Covered Net Pension Pension Date NPL NPL Payroll Payroll Position Liability Liability

A B C (B / C) D E (D / E)

June 30, 2014 0.1038567% $ 18,431,162 $ 19,929,409 92% $ 45,339,988,000 $ 63,086,719,000 72% June 30, 2015 0.1189567% 24,721,248 21,231,535 116% 45,789,840,000 66,571,552,000 69% June 30, 2016 0.1271511% 30,000,070 23,160,758 130% 45,365,927,000 68,959,954,000 66% June 30, 2017 0.1232988% 26,661,766 24,681,589 108% 48,987,184,000 70,610,885,000 69% June 30, 2018 0.1383948% 29,037,440 26,088,826 111% 51,827,233,000 72,808,833,000 71%

June 30, 2019 0.1429452% 29,483,317 26,185,838 113% 53,943,420,000 74,569,030,000 72% June 30, 2020 0.1514518% 34,230,163 27,669,757 124% 54,586,037,000 77,187,397,000 71% June 30, 2021 0.1745337% 26,184,085 26,110,792 100% 67,604,500,000 82,606,805,000 82% June 30, 2022 0.1762298% 35,261,002 27,222,595 130% 64,310,991,000 84,319,523,000 76% SCHEDULE OF CONTRIBUTIONS (as of fiscal year end) Actual

Contribution as a Contractually Contribution Employer's Percentage Fiscal Required Actual Deficiency Covered of Covered Year Contribution Contribution (Excess) Payroll Payroll

A B (A - B) C (B / C)

2015 $ 2 ,507,287 $ 2,507,287 $ - $ 21,231,535 12% 2016 2 ,477,009 2,477,009 - 23,160,758 11% 2017 2 ,509,551 2,509,551 - 24,681,589 10% 2018 2 ,759,698 2,759,698 - 26,088,826 11% 2019 2 ,935,378 2,935,378 - 26,185,838 11% 2020 3 ,247,222 3,247,222 - 27,669,757 12% 2021 3 ,478,809 3,478,809 - 26,110,792 13% 2022 3 ,617,905 3,617,905 - 27,222,595 13% 2023 4 ,782,356 4,782,356 - 33,312,053 14% Both schedules are presented to illustrate the requirements to show information for 10 years. However, until a full 10-year trend is compiled,

pension plans should present information for those years for which the information is available.

130

QUEEN ANNE'S COUNTY, MARYLAND

MARYLAND STATE RETIREMENT AND PENSION SYSTEMS

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2023

Changes in Benefit Terms There were no changes of benefit terms during the year.

Changes in Assumptions There were no changes in assumptions during the year.

Method and Assumptions used in Calculations of Actuarially Determined Contributions Actuarial Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 25-year closed amortization period ending June 30, 2039; 17 years remaining.

Asset Valuation Model Five-year smoothed market (max. 120% and min 80% of the market value) Inflation In the 2022 actuarial valuation, 2.25% general, 2.75% wage.

In the 2021 actuarial valuation, 2.25% general, 2.75% wage.

Salary Increases In the 2022 actuarial valuation, 2.75% to 11.25%.

In the 2021 actuarial valuation, 2.75% to 9.25%.

Investment Rate of Return In the 2022 actuarial valuation 6.80%.

In the 2021 actuarial valuation 6.80%.

Retirement Age Experience-based table of rates that are specific to the type of eligibility condition. Last updated for the 2019 valuation pursuant to the 2019 experience study for the period July 1, 2014 to July 30, 2018.

Mortality Various versions of the Pub- 2010 Mortality Tables for males and females with projected generational mortality improvements based on the MP-2018 fully generational mortality improvements scale for males and females.

131

QUEEN ANNE'S COUNTY, MARYLAND

OTHER POST-EMPLOYMENT BENEFITS (OPEB)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2023

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY

2017 2018 2019 2020 2021 2022 2023 Total OPEB liability ("TOL") Service cost $ 1 ,097,813 $ 1 ,130,747 $ 1 ,164,669 $ 1 ,331,424 $ 1 ,371,367 $ 1 ,226,384 $ 1,263,176 Interest 2,764,491 2 ,985,530 3 ,136,157 3 ,344,770 3 ,519,372 3,220,060 3,386,945 Changes of benefit terms - - - - - - 394,544 Differences between expected and actual experience - - 735,549 - (8,720,849) - (8,541,920) Changes of assumptions - 265,899 915,266 426,582 (1,619,833) (686,055) (1,645,226)

Benefit payments (1,291,027) (1,498,005) (1,568,468) (1,561,872) (1,670,095) (1,731,265) (1,706,367) Net change in TOL 2,571,277 2 ,884,171 4 ,383,173 3 ,540,904 (7,120,038) 2,029,124 (6,848,848) TOL - beginning of year 4 8,695,013 5 1,266,290 5 4,150,461 5 8,533,634 6 2,074,538 5 4,954,500 56,983,624 TOL - end of year $ 5 1,266,290 $ 5 4,150,461 $ 5 8,533,634 $ 6 2,074,538 $ 5 4,954,500 $ 5 6,983,624 $ 50,134,776

Plan fiduciary net position ("PFNP") Contributions - employer $ 2 ,223,474 $ 2 ,731,447 $ 3 ,037,243 $ 3 ,378,771 $ 3 ,612,555 $ 4 ,195,201 $ 4,098,432 Contributions - member - - - - - - - Net investment income 75,175 207,932 342,827 129,710 2 ,261,978 (1,964,463) 1,430,230 Benefits payments (1,291,027) (1,498,005) (1,568,468) (1,561,872) (1,670,095) (1,731,265) (1,706,367) Administrative expense - ( 2,452) (39,142) ( 3,553) ( 2,236) ( 5,253) (7,722)

Other - - - - - - (7,935) Net change in PFNP 1,007,622 1 ,438,922 1 ,772,460 1 ,943,056 4 ,202,202 494,220 3,806,638 Total PFNP - beginning of year 2,804,433 3 ,812,055 5 ,250,977 7 ,023,437 8 ,966,493 1 3,168,695 13,662,915 Total PFNP - end of year $ 3 ,812,055 $ 5 ,250,977 $ 7 ,023,437 $ 8 ,966,493 $ 1 3,168,695 $ 1 3,662,915 $ 17,469,553 Net OPEB liability ("NOL") - beginning of year $ 4 5,890,580 $ 4 7,454,235 $ 4 8,899,484 $ 5 1,510,197 $ 5 3,108,045 $ 4 1,785,805 $ 43,320,709

Net OPEB liability ("NOL") - end of year $ 4 7,454,235 $ 4 8,899,484 $ 5 1,510,197 $ 5 3,108,045 $ 4 1,785,805 $ 4 3,320,709 $ 32,665,223 PFNP as a % of TOL 7.4% 9.7% 12.0% 14.4% 24.0% 24.0% 34.8% Covered employee payroll $ 2 1,604,888 $ 2 2,282,543 $ 2 3,843,440 $ 2 5,806,124 $ 2 6,326,472 $ 2 9,071,019 $ 3 2,307,222 NOL as a % of covered employee payroll 219.6% 219.5% 216.0% 205.8% 158.7% 149.0% 101.1%

SCHEDULE OF ACTUAL EMPLOYER CONTRIBUTION AS A PERCENTAGE OF COVERED-EMPLOYEE PAYROLL

FISCAL YEAR 2017 2018 2019 2020 2021 2022 2023

Actuarially Determined Employer Contribution $ 3 ,853,839 $ 3 ,969,454 $ 4 ,377,119 $ 4 ,508,433 $ 4 ,419,451 $ 4 ,552,035 $ 3,864,103 Actual Employer Contribution 2,223,474 2 ,731,447 3 ,037,243 3 ,378,771 3 ,612,555 4,195,201 4,098,432 Contribution Deficiency / (Excess) 1,630,365 1 ,238,007 1 ,339,876 1 ,129,662 806,896 356,834 (234,329) Covered Employee Payroll 2 1,604,888 2 2,282,543 2 3,843,440 2 5,806,124 2 6,326,472 2 9,071,019 32,307,222

Contribution as a Percent of Payroll 10.3% 12.3% 12.7% 13.1% 13.7% 14.4% 12.7% The employer contributions above represent amounts paid in OPEB to retirees, as well as contributions to the OPEB trust.

The schedules is presented to illustrate the requirements to show information for 10 years. However, until a full 10-year trend is compiled, pension plans should present information for those years for which the information is available.

132

QUEEN ANNE'S COUNTY, MARYLAND

OTHER POST-EMPLOYMENT BENEFITS (OPEB)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2023

Actuarial Information - OPEB Actuarial assumptions The total OPEB liability was determined by an actuarial valuation as of January 1, 2023, using the following actuarial assumptions, applied to all periods included in the measurement:

Investment Return: 6.00%, net of investment expense and including inflation.

Healthcare Trend: 6.00% initially for all plans, grading down to 4.25% for PPO, EPO and BCA plans ultimate.

Mortality rates are based on the PUB2010G Headcount tables with Scale SSA applied on a generational basis. PUB2010G Headcount Disabled tables are used for those on disability, if applicable.

Changes in Actuarial assumptions The rates of retirement, disability, withdrawal and mortality were changed since the prior year, as well as a change in discount rate due to an updated fund availability analysis.

Actuarial Methods for Determining Employer Contributions The same economic and demographic assumptions are used for both funding and financial reporting purposes under GASB 74/75.

The Entry Age method is used for accounting/GASB purposes, therefore all of the actuarial figures within this Report are based on it. Actuarially Determined Contributions are also based on the Entry Age method, with a closed level percentage of payroll amortization of the unfunded liability (15 years remaining).

133

QUEEN ANNE'S COUNTY, MARYLAND

LENGTH OF SERVICE AWARD PROGRAM (LOSAP)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2023

SCHEDULE OF CHANGES IN THE NET LOSAP LIABILITY (as of measurement date)

AS OF MEASUREMENT DATE 2017 2018 2019 2020 2021 2022

Total LOSAP liability ("TLL") Service cost $ 206,276 $ 164,371 $ 215,978 $ 2 85,808 $ 350,104 $ 268,262 Interest cost 196,904 249,496 180,529 1 58,757 174,594 409,940 Changes of benefit terms - - - - - - Differences between expected and actual experience - 137,821 (78,468) 6 5,911 65,498 819,208 Changes of assumptions 578,039 (491,888) 1,280,343 1 ,275,769 315,113 ( 3,702,745) Benefits payments and admin expenses (190,420) (220,060) (220,084) (231,815) ( 240,012) ( 304,558)

Net change in TLL 790,799 (160,260) 1,378,298 1 ,554,430 665,297 ( 2,509,893) TLL - beginning of year 6,039,197 6,829,996 6,669,736 8 ,048,034 9,602,464 10,267,761 TLL - end of year $ 6,829,996 $ 6,669,736 $ 8,048,034 $ 9 ,602,464 $ 10,267,761 $ 7,757,868 Plan fiduciary net position ("PFNP") Contributions - employer $ - $ - $ - $ - $ - $ - Net investment income - - - - - - Benefits payments - - - - - -

Administrative expense - - - - - - Net change in PFNP - - - - - - Total PFNP - beginning of year - - - - - - Total PFNP - end of year $ - $ - $ - $ - $ - $ - Net LOSAP liability ("NLL") $ 6,829,996 $ 6,669,736 $ 8,048,034 $ 9 ,602,464 $ 10,267,761 $ 7,757,868 PFNP as a % of TLL 0% 0% 0% 0% 0% 0% Covered employee payroll - * N/A N/A N/A N/A N/A N/A NLL as a % of covered payroll N/A N/A N/A N/A N/A N/A

* - the NLL is based on volunteer hours and as such has no payroll associated.

Expected average remaining service years of all participants 6 10 5 5 5 5 The schedules is presented to illustrate the requirements to show information for 10 years. However, until a full 10-year trend is compiled, pension plans should present information for those years for which the information is available.

134

QUEEN ANNE'S COUNTY, MARYLAND

LENGTH OF SERVICE AWARD PROGRAM (LOSAP)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2023

NOTES TO THE REQUIRED SUPPLEMENTAL INFORMATION - LOSAP

The LOSAP has no assets accumulated in a trust that meet the criteria in GASB 73, paragraph 4.

Benefit changes - fiscal year 2018 None 2019 None 2020 None 2021 None 2022 None 2023 None Changes of assumptions - fiscal year 2018 None, other than discount rate 2019 None, other than discount rate 2020 None, other than discount rate 2021 None, other than discount rate 2022 None, other than discount rate 2023 None, other than discount rate Discount rate - measurement date December 31, 2017 3.31% December 31, 2018 3.71%

December 31, 2019 2.75% December 31, 2020 2.00% December 31, 2021 1.84% December 31, 2022 4.05% 135

O S I

THER UPPLEMENTARY NFORMATION

136 Combining and Individual Fund Statements and Schedules The Combining and Individual Fund Statements and Schedules provide detailed information concerning the financial position, results of operations, and budgetary comparisons for the non-major funds, capital projects, and fiduciary funds.

137 Non-Major Governmental Funds Non-Major Governmental Funds are used to account for the proceeds of specific revenue sources (other than capital projects and debt service funds) that are legally restricted to expenditures for specific purposes.

138

NON-MAJOR GOVERNMENTAL FUNDS

Non-major governmental funds are special revenue funds, unless otherwise noted:

Department of Aging –This fund accounts for activities funded primarily by grants to provide services for the elderly and is included in the social services function.

Housing and Community Services –This fund accounts for activities funded mostly by grants and revolving loan funds that support housing rehabilitation and home-ownership and is included in the economic and community development function.

Revolving Loan Fund–This fund accounts for activities funded by community donations and grants to promote and provide economic development loans to local businesses and is included in the economic and community development function.

Economic Development Incentive Fund –This fund accounts for activities funded with a portion of recordation taxes that support economic development in the County by attracting and investing in new and existing businessesand is included in the economic and community development function.

Roads Operation Fund–This fund accounts financial resources received from the State, plus a substantial amount from the County, for the maintenance of County road infrastructure.

CommunityPartnerships for Children –This fund accounts for activities funded by grants allocated to the County that provide services for children and families and is included in the social services function.

Critical Areas–This fund accounts for activities funded by payments in lieu of performance bonds that support efforts to mitigate and preserve critical areas along the shoreline of tidal waters within the County and is included in the conservation of natural resources function.

Law Library–This fund accounts for activities funded by court fees, fines, and contributions from local attorneys to update legal reference materials housed in the courthouse and is included in the general government function.

Sheriff’s Drug Task Force–This fund accounts for activities funded by drug-related forfeitures that support drug interdiction efforts by a multi-faceted task force and is included in the public safety function.

Inmate Welfare Fund–This fund accounts for activities funded by profits earned from Detention Center inmate-related services that promote the welfare of the inmates and is included in the public safety function.

Agricultural Transfer Tax–This fund accounts for activities funded primarily by the Agricultural Transfer Tax to purchase agricultural easements that preclude development and is included in the conservation of natural resources function.

Rural Legacy –This fund accounts for activities funded primarily by Maryland’s Rural Legacy Program to purchase easements that preclude development and is included in the conservation of natural resources function.

DredgingSpecial Assessments–This fund accounts for activities funded by special assessment funds collected to repay loansfor specific dredging and erosion projectsthat benefited Price’s Creek, Grove Creek, and Narrows Pointeand isincluded in the conservation of natural resources function.

139 Kent Narrows–This fund accounts for activities funded by tax revenues to improve the Kent Narrows areaand is included in the economic and community development function.

Capital Projects –SchoolImpact Fees–This fund accounts for financial resources generated by new residential construction and used for the construction of public school facilities or payment of school debt relating to such construction.

Capital Projects –Fire Company Impact Fees–This fund accounts for activities funded by impact fees specifically earmarked to enhance local volunteer fire company preparedness resulting from new construction and is included in the public safety function.

Capital Projects –Parks and Recreation Impact Fees–This fund accounts for activities funded by impact fees specifically earmarked to enhance parks and recreation and is included in the parks and recreation function.

140 141

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING BALANCE SHEET

NON-MAJOR GOVERNMENTAL FUNDS

June 30, 2023

COMMUNITY

HOUSING AND ECONOMIC PARTNERSHIPS

DEPARTMENT COMMUNITY REVOLVING DEVELOPMENT ROADS FOR

OF AGING SERVICES LOAN FUND INCENTIVE OPERATING CHILDREN

ASSETS

Cash and Cash Equivalents $ - $ 5,000,878 $ - $ 941,785 739,289 $ 338,523 Prepaid Items - - - - - - Receivables Taxes Receivable (Net) - - - - - - Accounts Receivable (Net) - - - 1,018 55,657 20,936 Loans Receivable (Net) - 6,087,647 90,000 - - - Special Assessments (Net) - - - - - - Due from Other Governments 593,180 150,374 - - 290,953 257,525 Inventory - - - - 1,274,659 - Total Assets $ 593,180 $ 11,238,899 $ 90,000 $ 942,803 $ 2,360,558 $ 616,984

LIABILITIES

Accrued Liabilities $ 86,510 $ 20,748 $ - $ 7,831 $ 201,600 $ 238,141 Due to Other Funds 394,043 - - - - - Due to Other Governmental Agencies - 3,507 - - - 312,625 Unearned Revenue - - - - 831,583 - Total Liabilities 480,553 24,255 - 7,831 1,033,183 550,766

DEFERRED INFLOWS OF RESOURCES

Unavailable Benefit Assessments - - - - - - Unavailable Fees - - - - - - Total Deferred Inflows - - - - - - Total Liabilities and Deferred Inflows 480,553 24,255 - 7,831 1,033,183 550,766

FUND BALANCES

Nonspendable - - - - 1,274,659 - Restricted 955 2,821,652 - - - - Committed - 8,392,992 90,000 934,972 - - Assigned 111,672 - - - 52,716 66,218 Unassigned - - - - - - Total Fund Balances 112,627 11,214,644 90,000 934,972 1,327,375 66,218 Total Liabilities, Deferred Inflows and Fund Balances $ 593,180 $ 11,238,899 $ 90,000 $ 942,803 $ 2,360,558 $ 616,984 142

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING BALANCE SHEET

NON-MAJOR GOVERNMENTAL FUNDS

June 30, 2023

(CONTINUED)

SHERIFF'S

DRUG DREDGING

CRITICAL LAW TASK INMATE AGRICULTURAL RURAL SPECIAL

AREAS LIBRARY FORCE WELFARE TRANSFER LEGACY ASSESSMENTS

$ 372,689 $ 497,682 $ 213,557 $ 187,514 $ 2,337,926 $ 419,805 $ 5,727

- - - - - - -

- - - - - - -

- 7,461 - 4,221 - - 88

- - - - - - -

- - - - - - 607,965

- - - - - - -

- - - - - - -

$ 372,689 $ 505,143 $ 213,557 $ 191,735 $ 2,337,926 $ 419,805 $ 613,780 $ - $ - $ 58,402 $ 4,974 $ 310,709 $ - $ -

- - - - - - -

- - - - - - -

- - - - - - -

- - 58,402 4,974 310,709 - -

- - - - - - 607,965

- - - - - - -

- - - - - - 607,965

- - 58,402 4,974 310,709 - 607,965

- - - - - - -

372,689 - 155,155 186,761 2,027,217 419,805 5,815

- - - - - - -

- 505,143 - - - - -

- - - - - - -

372,689 505,143 155,155 186,761 2,027,217 419,805 5,815 $ 372,689 $ 505,143 $ 213,557 $ 191,735 $ 2,337,926 $ 419,805 $ 613,780

CONTINUED

143

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING BALANCE SHEET

NON-MAJOR GOVERNMENTAL FUNDS

June 30, 2023

(CONTINUED)

CAPITAL PROJECTS

PARKS AND TOTAL

KENT SCHOOL FIRE COMPANY RECREATION NON-MAJOR

NARROWS IMPACT FEES IMPACT FEES IMPACT FEES GOVERNMENTAL

ASSETS

Cash and Cash Equivalents $ 184,700 $ 11,676,570 $ 602,031 $ 569,903 $ 2 4,088,579 Prepaid Items - - - - - Receivables Taxes Receivable (Net) - - - - - Accounts Receivable (Net) - - - - 8 9,381 Loans Receivable (Net) - 78,901 10,249 22,866 6 ,289,663 Special Assessments (Net) - - - - 6 07,965 Due from Other Governments - - - - 1 ,292,032 Inventory - - - - 1 ,274,659 Total Assets $ 184,700 $ 11,755,471 $ 612,280 $ 592,769 $ 3 3,642,279

LIABILITIES

Accrued Liabilities $ - $ - $ - $ - $ 9 28,915 Due to Other Funds - - - - 3 94,043 Due to Other Governmental Agencies - - - - 3 16,132 Unearned Revenue - - - - 8 31,583 Total Liabilities - - - - 2 ,470,673

DEFERRED INFLOWS OF RESOURCES

Unavailable Benefit Assessments - - - - 6 07,965 Unavailable Fees - 78,901 10,249 22,866 1 12,016 Total Deferred Inflows - 78,901 10,249 22,866 7 19,981 Total Liabilities and Deferred Inflows - 78,901 10,249 22,866 3 ,190,654

FUND BALANCES

Nonspendable - - - - 1 ,274,659 Restricted 184,700 - - - 6 ,174,749 Committed - 11,676,570 602,031 569,903 2 2,266,468 Assigned - - - - 7 35,749 Unassigned - - - - - Total Fund Balances 184,700 11,676,570 602,031 569,903 3 0,451,625 Total Liabilities, Deferred Inflows and Fund Balances $ 184,700 $ 11,755,471 $ 612,280 $ 592,769 $ 3 3,642,279 144 145

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

COMMUNITY

HOUSING AND ECONOMIC PARTNERSHIPS

DEPARTMENT COMMUNITY REVOLVING DEVELOPMENT ROADS FOR

OF AGING SERVICES LOAN FUND INCENTIVE OPERATING CHILDREN

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - $ - $ - Recordation Taxes - 2 70,345 - - - - State Shared Taxes - - - - 1 ,293,309 - Licenses and Permits - - - - - - Intergovernmental 2 ,137,727 9 47,605 - - - 7 33,096 Charges for Current Services 5 8,061 6 20,000 - - 2 53,124 - Fines and Forfeitures - - - - - - Investment Income 2 1,928 3 6,684 - - - 6 04 Donations 1 9,676 - - - - - Miscellaneous 1 8,386 5 ,000 - 2 1,195 1 5,023 2 4,951

Total Revenues 2 ,255,778 1 ,879,634 - 2 1,195 1 ,561,456 7 58,651

EXPENDITURES

Current General Government - - 1 2,968 - - - Public Safety - - - - - - Public Works - - - - 5 ,210,341 - Parks & Recreation - - - - - - Health & Social Services 3 ,626,979 - - - - 1 ,337,109 Conservation of Natural Resources - - - - - - Economic/Community Development - 1 ,469,292 - 1 22,498 - - Capital Outlay - - - - - - Debt Service Principal - - - - - - Interest and Fiscal Charges - - - - - - Total Expenditures 3 ,626,979 1 ,469,292 1 2,968 1 22,498 5 ,210,341 1 ,337,109

Excess of Revenues Over (Under) Expenditures (1,371,201) 4 10,342 (12,968) (101,303) (3,648,885) (578,458)

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals 1 ,775 - - - 7,969 - Insurance Proceeds 3 6,325 - - - - - Transfers In 1 ,354,154 5 16,688 - 7 12,272 3 ,640,916 5 79,062 Transfers Out - - (472,271) - - - Other Financing Sources (Uses) 1 ,392,254 5 16,688 (472,271) 7 12,272 3 ,648,885 5 79,062 Net Increase (Decrease) in Fund Balances 2 1,053 9 27,030 (485,239) 6 10,969 - 6 04 Fund Balances, July 1 9 1,574 1 0,287,614 5 75,239 3 24,003 1 ,327,375 6 5,614

Fund Balances, June 30 $ 1 12,627 $ 1 1,214,644 $ 9 0,000 $ 9 34,972 $ 1 ,327,375 $ 6 6,218 146

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

SHERIFF'S

DRUG DREDGING

CRITICAL LAW TASK INMATE AGRICULTURAL RURAL SPECIAL

AREAS LIBRARY FORCE WELFARE TRANSFER LEGACY ASSESSMENTS

$ - $ - $ - $ - $ - $ - $ -

- - - - - - -

- - - - 5 9,283 - -

- - - - - - -

- - - - - 1 ,902,438 -

6 9,460 1 4,134 - 8 1,110 - - 4 6,124

- 4 6,305 2 0,318 - - - -

- 1 8,481 7 ,883 7 ,459 - 2 3,030 2 41

- - - - - - -

- - - 8 ,887 - - -

6 9,460 7 8,920 2 8,201 9 7,456 5 9,283 1 ,925,468 4 6,365

- 2 4,772 - - - - -

- - 5 3,442 1 20,580 - - -

- - - - - - -

- - - - - - -

- - - - - - -

4 8,332 - - - 7 67,362 1 ,889,788 -

- - - - - - -

- - - - - - -

- - - - - - 4 7,816

- - - - - - -

4 8,332 2 4,772 5 3,442 1 20,580 7 67,362 1 ,889,788 4 7,816 2 1,128 5 4,148 (25,241) (23,124) (708,079) 3 5,680 (1,451)

- - - - - - -

- - - - - - -

- - - - 9 78,433 - -

- - - - - - -

- - - - 9 78,433 - -

2 1,128 5 4,148 (25,241) (23,124) 2 70,354 3 5,680 (1,451) 3 51,561 4 50,995 1 80,396 2 09,885 1 ,756,863 3 84,125 7 ,266 $ 3 72,689 $ 5 05,143 $ 1 55,155 $ 1 86,761 $ 2 ,027,217 $ 4 19,805 $ 5 ,815

CONTINUED

147

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

CAPITAL PROJECTS

PARKS AND TOTAL

KENT SCHOOL FIRE COMPANY RECREATION NON-MAJOR

NARROWS IMPACT FEES IMPACT FEES IMPACT FEES GOVERNMENTAL

REVENUES

Taxes Local Property Tax $ 4 9,615 $ - $ - $ - $ 4 9,615 Recordation Taxes - - - - 2 70,345 State Shared Taxes - - - - 1 ,352,592 Licenses and Permits - - - - - Intergovernmental - - - - 5 ,720,866 Charges for Current Services - 2 ,237,364 4 19,803 2 63,955 4 ,063,135 Fines and Forfeitures - - - - 6 6,623 Investment Income 8 ,093 5 05,658 2 8,014 2 2,667 6 80,742 Donations - - - - 1 9,676 Miscellaneous - - - - 9 3,442

Total Revenues 5 7,708 2 ,743,022 4 47,817 2 86,622 1 2,317,036

EXPENDITURES

Current General Government - - - - 3 7,740 Public Safety - - 5 40,821 - 7 14,843 Public Works - - - - 5 ,210,341 Parks & Recreation - - - - - Health & Social Services - - - - 4 ,964,088 Conservation of Natural Resources - - - - 2 ,705,482 Economic/Community Development 4 0,000 - - - 1 ,631,790 Capital Outlay - - - - - Debt Service Principal - - - - 4 7,816 Interest and Fiscal Charges - - - - - Total Expenditures 4 0,000 - 5 40,821 - 1 5,312,100

Excess of Revenues Over (Under) Expenditures 1 7,708 2 ,743,022 (93,004) 2 86,622 (2,995,064)

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - 9 ,744 Insurance Proceeds - - - - 3 6,325 Transfers In - - 1 54,215 - 7 ,935,740 Transfers Out - (2,857,792) - (800,000) (4,130,063) Other Financing Sources (Uses) - (2,857,792) 1 54,215 (800,000) 3 ,851,746 Net Increase (Decrease) in Fund Balances 1 7,708 (114,770) 6 1,211 (513,378) 8 56,682 Fund Balances, July 1 1 66,992 1 1,791,340 5 40,820 1 ,083,281 2 9,594,943

Fund Balances, June 30 $ 1 84,700 $ 1 1,676,570 $ 6 02,031 $ 5 69,903 $ 3 0,451,625 148 149

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

DEPARTMENT OF AGING HOUSING AND COMMUNITY SERVICES

VARIANCE VARIANCE

ORIGINAL FINAL POSITIVE ORIGINAL FINAL POSITIVE

BUDGET BUDGET ACTUAL (NEGATIVE) BUDGET BUDGET ACTUAL (NEGATIVE)

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - $ - $ - $ - $ - Recordation Taxes - - - - 200,000 200,000 270,345 70,345 State Shared Taxes - - - - - - - - Licenses and Permits - - - - - - - - Intergovernmental 1,141,906 1,379,866 2,137,727 757,861 839,300 1,192,998 947,605 (245,393) Charges for Current Services 111,100 111,100 58,061 (53,039) 400,000 400,000 620,000 220,000 Fines and Forfeitures - - - - - - - -

Investment Income - - 21,928 21,928 - - 36,684 36,684 Donations 35,000 35,000 19,676 ( 15,324) - - - - Miscellaneous 36,000 42,238 18,386 ( 23,852) - 5,000 5,000 - Total Revenues 1,324,006 1,568,204 2,255,778 687,574 1,439,300 1,797,998 1,879,634 81,636

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services 3,484,267 3,812,114 3,626,979 185,135 - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development - - - - 2,042,122 2,446,235 1,469,292 976,943 Intergovernmental - - - - - - - -

Miscellaneous - - - - - - - - Capital Outlay - - - - - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 3,484,267 3,812,114 3,626,979 185,135 2,042,122 2,446,235 1,469,292 976,943 Excess of Revenues Over (Under) Expenditures ( 2,160,261) ( 2,243,910) (1,371,201) 872,709 (602,822) (648,237) 410,342 1,058,579

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - 1,775 1,775 - - - - Insurance Proceeds - - 36,325 36,325 - - - - Transfers In 2,160,261 2,243,910 1,354,154 ( 889,756) 602,822 624,387 516,688 (107,699) Transfers Out - - - - - - - - Total Other Financing Sources (Uses) 2,160,261 2,243,910 1,392,254 ( 851,656) 602,822 624,387 516,688 (107,699) Net Increase (Decrease) in Fund Balances $ - $ - $ 21,053 $ 21,053 $ - $ (23,850) $ 927,030 $ 950,880

150

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

ECONOMIC DEVELOPMENT INCENTIVE ROADS OPERATING

VARIANCE VARIANCE

ORIGINAL FINAL POSITIVE ORIGINAL FINAL POSITIVE

BUDGET BUDGET ACTUAL (NEGATIVE) BUDGET BUDGET ACTUAL (NEGATIVE)

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - $ - $ - $ - $ - Recordation Taxes - - - - - - - - State Shared Taxes - - - - - 1,253,000 1,293,309 40,309 Licenses and Permits - - - - - - - - Intergovernmental - - - - - - - - Charges for Current Services - - - - - 95,000 253,124 158,124 Fines and Forfeitures - - - - - - - - Investment Income - - - - - - - - Donations - - - - - - - - Miscellaneous 27,100 27,100 21,195 ( 5,905) - - 15,023 15,023

Total Revenues 27,100 27,100 21,195 ( 5,905) - 1,348,000 1,561,456 213,456

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - - 6,066,638 5,210,341 856,297 Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development 125,000 917,272 122,498 794,774 - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - -

Capital Outlay - - - - - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 125,000 917,272 122,498 794,774 - 6,066,638 5,210,341 856,297 Excess of Revenues Over (Under) Expenditures ( 97,900) (890,172) (101,303) 788,869 - (4,718,638) ( 3,648,885) 1,069,753

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - 7,969 7,969 Insurance Proceeds - - - - - - - - Transfers In - 712,272 712,272 - - 4,718,638 3,640,916 ( 1,077,722) Transfers Out - - - - - - - - Total Other Financing Sources (Uses) - 712,272 712,272 - - 4,718,638 3,648,885 ( 1,069,753) Net Increase (Decrease) in Fund Balances $ (97,900) $ (177,900) $ 610,969 $ 788,869 $ - $ - $ - $ -

CONTINUED

151

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

COMMUNITY PARTNERSHIPS FOR CHILDREN LAW LIBRARY

VARIANCE VARIANCE

ORIGINAL FINAL POSITIVE ORIGINAL FINAL POSITIVE

BUDGET BUDGET ACTUAL (NEGATIVE) BUDGET BUDGET ACTUAL (NEGATIVE)

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - $ - $ - $ - $ - Recordation Taxes - - - - - - - - State Shared Taxes - - - - - - - - Licenses and Permits - - - - - - - - Intergovernmental 641,718 734,516 733,096 ( 1,420) - - - - Charges for Current Services - - - - 10,000 10,000 14,134 4,134 Fines and Forfeitures - - - - 15,500 15,500 46,305 30,805 Investment Income - - 604 604 - - 18,481 18,481 Donations - - - - - - - -

Miscellaneous 11,000 11,000 24,951 13,951 - - - - Total Revenues 652,718 745,516 758,651 13,135 25,500 25,500 78,920 53,420

EXPENDITURES

Current General Government - - - - 25,500 25,500 24,772 728 Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services 1,118,835 1,330,832 1,337,109 ( 6,277) - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development - - - - - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - -

Capital Outlay - - - - - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 1,118,835 1,330,832 1,337,109 ( 6,277) 25,500 25,500 24,772 728 Excess of Revenues Over (Under) Expenditures ( 466,117) (585,316) (578,458) 6,858 - - 54,148 54,148

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In 466,117 585,316 579,062 ( 6,254) - - - - Transfers Out - - - - - - - - Total Other Financing Sources (Uses) 466,117 585,316 579,062 ( 6,254) - - - - Net Increase (Decrease) in Fund Balances $ - $ - $ 604 $ 604 $ - $ - $ 54,148 $ 54,148 152

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

INMATE WELFARE ARGICULTURAL TRANSFER

VARIANCE VARIANCE

ORIGINAL FINAL POSITIVE ORIGINAL FINAL POSITIVE

BUDGET BUDGET ACTUAL (NEGATIVE) BUDGET BUDGET ACTUAL (NEGATIVE)

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - $ - $ - $ - $ - Recordation Taxes - - - - - - - - State Shared Taxes - - - - 125,000 125,000 59,283 ( 65,717) Licenses and Permits - - - - - - - - Intergovernmental 10,890 10,890 - (10,890) - - - - Charges for Current Services 125,000 125,000 81,110 ( 43,890) - - - - Fines and Forfeitures - - - - - - - - Investment Income - - 7,459 7,459 - - - - Donations - - - - - - - -

Miscellaneous 16,310 16,310 8,887 ( 7,423) - - - - Total Revenues 152,200 152,200 97,456 ( 54,744) 125,000 125,000 59,283 ( 65,717)

EXPENDITURES

Current General Government - - - - - - - - Public Safety 148,150 148,150 120,580 27,570 - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - 1,197,394 2,175,827 767,362 1,408,465 Economic/Community Development - - - - - - - - Intergovernmental - - - - - - - -

Miscellaneous - - - - - - - - Capital Outlay 15,000 15,000 - 15,000 - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 163,150 163,150 120,580 42,570 1,197,394 2,175,827 767,362 1,408,465 Excess of Revenues Over (Under) Expenditures ( 10,950) ( 10,950) ( 23,124) ( 12,174) (1,072,394) ( 2,050,827) ( 708,079) 1,342,748

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In - - - - - 978,433 978,433 - Transfers Out - - - - - - - - Total Other Financing Sources (Uses) - - - - - 978,433 978,433 - Net Increase (Decrease) in Fund Balances $ (10,950) $ (10,950) $ (23,124) $ (12,174) $ (1,072,394) $ (1,072,394) $ 270,354 $ 1,342,748

CONTINUED

153

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

RURAL LEGACY DREDGING SPECIAL ASSESSMENTS

VARIANCE VARIANCE

ORIGINAL FINAL POSITIVE ORIGINAL FINAL POSITIVE

BUDGET BUDGET ACTUAL (NEGATIVE) BUDGET BUDGET ACTUAL (NEGATIVE)

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - $ - $ - $ - $ - Recordation Taxes - - - - - - - - State Shared Taxes - - - - - - - - Licenses and Permits - - - - - - - - Intergovernmental 1,650,321 1,902,438 1,902,438 - - - - - Charges for Current Services - - - - 47,816 47,816 46,124 ( 1,692) Fines and Forfeitures - - - - - - - - Investment Income - - 23,030 23,030 - - 241 241 Donations - - - - - - - - Miscellaneous - - - - - - - -

Total Revenues 1,650,321 1,902,438 1,925,468 23,030 47,816 47,816 46,365 ( 1,451)

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources 1,650,321 1,902,438 1,889,788 12,650 - - - - Economic/Community Development - - - - - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - -

Capital Outlay - - - - - - - - Debt Service Principal - - - - 47,816 47,816 47,816 - Interest - - - - - - - - Total Expenditures 1,650,321 1,902,438 1,889,788 12,650 47,816 47,816 47,816 - Excess of Revenues Over (Under) Expenditures - - 35,680 35,680 - - (1,451) ( 1,451)

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In - - - - - - - - Transfers Out - - - - - - - - Total Other Financing Sources (Uses) - - - - - - - - Net Increase (Decrease) in Fund Balances $ - $ - $ 35,680 $ 35,680 $ - $ - $ ( 1,451) $ ( 1,451) 154

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

KENT NARROWS FUND CAPITAL PROJECTS - SCHOOL IMPACT FEES

VARIANCE VARIANCE

ORIGINAL FINAL POSITIVE ORIGINAL FINAL POSITIVE

BUDGET BUDGET ACTUAL (NEGATIVE) BUDGET BUDGET ACTUAL (NEGATIVE)

REVENUES

Taxes Local Property Tax $ 38,000 $ 40,000 $ 49,615 $ 9,615 $ - $ - $ - $ - Recordation Taxes - - - - - - - - State Shared Taxes - - - - - - - - Licenses and Permits - - - - - - - - Intergovernmental - - - - - - - - Charges for Current Services - - - - 2,000,000 2,000,000 2,237,364 237,364 Fines and Forfeitures - - - - - - - - Investment Income - - 8,093 8,093 - - 505,658 505,658 Donations - - - - - - - -

Miscellaneous - - - - - - - - Total Revenues 38,000 40,000 57,708 17,708 2,000,000 2,000,000 2,743,022 743,022

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development 38,000 40,000 40,000 - - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - - Capital Outlay - - - - - - - -

Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 38,000 40,000 40,000 - - - - - Excess of Revenues Over (Under) Expenditures - - 17,708 17,708 2,000,000 2,000,000 2,743,022 743,022

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In - - - - - - - - Transfers Out - - - - (2,857,792) ( 2,857,792) ( 2,857,792) - Total Other Financing Sources (Uses) - - - - (2,857,792) ( 2,857,792) ( 2,857,792) - Net Increase (Decrease) in Fund Balances $ - $ - $ 17,708 $ 17,708 $ (857,792) $ ( 857,792) $ ( 114,770) $ 743,022

CONTINUED

155

QUEEN ANNE'S COUNTY, MARYLAND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

NON-MAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

CAPITAL PROJECTS - FIRE COMPANY IMPACT FEES CAPITAL PROJECTS - PARKS & RECREATION IMPACT FEES

VARIANCE VARIANCE

ORIGINAL FINAL POSITIVE ORIGINAL FINAL POSITIVE

BUDGET BUDGET ACTUAL (NEGATIVE) BUDGET BUDGET ACTUAL (NEGATIVE)

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - $ - $ - $ - $ - Recordation Taxes - - - - - - - - State Shared Taxes - - - - - - - - Licenses and Permits - - - - - - - - Intergovernmental - - - - - - - - Charges for Current Services 266,500 231,895 419,803 187,908 299,600 299,600 263,955 ( 35,645) Fines and Forfeitures - - - - - - - - Investment Income 500 500 28,014 27,514 400 400 22,667 22,267 Donations - - - - - - - -

Miscellaneous - - - - - - - - Total Revenues 267,000 232,395 447,817 215,422 300,000 300,000 286,622 ( 13,378)

EXPENDITURES

Current General Government - - - - - - - - Public Safety 357,000 605,034 540,821 64,213 - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development - - - - - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - -

Capital Outlay - - - - - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 357,000 605,034 540,821 64,213 - - - - Excess of Revenues Over (Under) Expenditures ( 90,000) (372,639) ( 93,004) 279,635 300,000 300,000 286,622 ( 13,378)

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In 90,000 154,215 154,215 - - - - - Transfers Out - - - - (300,000) ( 1,000,000) ( 800,000) 200,000 Total Other Financing Sources (Uses) 90,000 154,215 154,215 - (300,000) ( 1,000,000) ( 800,000) 200,000 Net Increase (Decrease) in Fund Balances $ - $ (218,424) $ 61,211 $ 279,635 $ - $ (700,000) $ ( 513,378) $ 186,622

156

NON-MAJOR ENTERPRISE FUNDS

Non-Major Enterprise funds account for activities which are commercial in nature and are primarily or partially intended to be self-supporting.Each fund sets its rates and service charges at a level sufficient to:

(1) meet all of its operating expenses; (2) provide for depreciation from wear and obsolescenceof capital

assets; and (3) to the extent that funds are not borrowed, finance the cost of expansion of physical facilities.

157

NON-MAJOR ENTERPRISE FUNDS

Non-major enterprise funds include the following funds:

Blue Heron Golf Course –This fund accounts for operation and maintenance of an 18-hole public golf course that is owned and operated by the County.

Public Landings and Marinas –This fund accounts for operation, maintenance, and major repairs of public landings,bulkheads, and public marinas. For a fee, the general public has access to these landings to launch small craft into the many waterways that surround the Countyand can also access the marinas for temporary mooring.

158

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF NET POSITION

NON-MAJOR ENTERPRISE FUNDS

June 30, 2023

PUBLIC TOTAL

GOLF LANDINGS NON-MAJOR

COURSE AND MARINAS ENTERPRISE

ASSETS

Current Assets Equity in Pooled Cash $ - $ 820,878 $ 820,878 Accounts Receivable (Net) - 66,091 66,091 Due from Other Governments - 78,390 78,390 Inventories 8,038 - 8,038 Total Current Assets 8,038 965,359 973,397 Capital Assets 3,705,696 7,571,780 11,277,476 Less Accumulated Depreciation (825,448) (1,737,373) (2,562,821) Total Capital Assets, Net of Depreciation 2,880,248 5,834,407 8,714,655 Total Assets 2,888,286 6,799,766 9,688,052

DEFERRED OUTFLOWS OF RESOURCES

OPEB - 7,563 7,563

Pension Benefits 32,685 66,054 98,739 Deferred Charge on Refunding - 588 588 Total Deferred Outflows of Resources 32,685 74,205 106,890

LIABILITIES

Current Liabilities Accounts Payable 37,440 97,306 134,746 Accrued Interest Payable 1,508 8,356 9,864 Due to Other Funds 294,047 - 294,047 Unearned Revenue 6,779 - 6,779 Current Portion of Compensated Absences 11,404 29,471 40,875 Current Portion of Lease Payable 27,269 - 27,269 Current Portion of Bonds/Notes Payable 4,781 72,953 77,734 Total Current Liabilities 383,228 208,086 591,314 Noncurrent Liabilities

Compensated Absences 7,873 20,345 28,218

OPEB - 236,477 236,477

Net Pension Liability 67,916 138,816 206,732 Lease Payable 110,715 - 110,715 Bonds/Notes Payable 80,199 623,597 703,796 Total Noncurrent Liabilities 266,703 1,019,235 1,285,938 Total Liabilities 649,931 1,227,321 1,877,252

DEFERRED INFLOWS OF RESOURCES

OPEB - 64,932 64,932

Pension Benefits 15,034 29,628 44,662 Bond Refundings - 1,561 1,561 Total Deferred Inflows of Resources 15,034 96,121 111,155

NET POSITION

Net Investment in Capital Assets 2,657,284 5,136,884 7,794,168 Unrestricted Amounts (Deficit) (401,278) 413,645 12,367 Total Net Position $ 2,256,006 $ 5,550,529 $ 7,806,535 159

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

NON-MAJOR ENTERPRISE FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

PUBLIC TOTAL

GOLF LANDINGS NON-MAJOR

COURSE AND MARINAS ENTERPRISE

OPERATING REVENUES

Charges for Services $ 617,340 $ 465,730 $ 1,083,070 Intergovernmental - 745,966 745,966 Material Sales 50,297 - 50,297 Miscellaneous Revenues 16 28,990 29,006 Total Operating Revenues 667,653 1,240,686 1,908,339

OPERATING EXPENSES

Recreation 662,658 542,604 1,205,262

OPEB - (8,293) (8,293)

Pension Liability Adjustment (11,467) (22,161) (33,628) Depreciation and amortization 43,937 152,746 196,683 Total Operating Expenses 695,128 664,896 1,360,024 Operating Income (Loss) (27,475) 575,790 548,315

NON-OPERATING REVENUES (EXPENSES)

Interest Expense (2,696) (19,789) (22,485) Total Non-Operating (Expenses) (2,696) (19,789) (22,485) Transfers In (Out) 470,000 - 470,000 Change in Net Position 439,829 556,001 995,830 Total Net Position - Beginning of Year 1,816,177 4,994,528 6,810,705 Total Net Position - End of Year $ 2,256,006 $ 5,550,529 $ 7,806,535 160

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF CASH FLOWS

NON-MAJOR ENTERPRISE FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

PUBLIC TOTAL

GOLF LANDINGS NON-MAJOR

COURSE AND MARINAS ENTERPRISE

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers and users $ 667,637 $ 467,231 $ 1,134,868 Receipts from other operating revenues 2,479 1,337,318 1,339,797 Payments to suppliers (660,382) (510,139) (1,170,521) Payments to employees and on behalf of employees 1,319 5,423 6,742 Net Cash Provided by Operating Activities 11,053 1,299,833 1,310,886

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers from (to) other funds 470,000 - 470,000 (Payments) Receipts of interfund loans (69,686) (250,218) (319,904) Net Cash Provided (Used) by Noncapital Financing Activities 400,314 (250,218) 150,096

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Principal paid on lease and bond payables (17,032) (76,331) (93,363) Deferred Refunding costs on sale of bonds - (76) (76) Interest paid on capital debt (2,508) (17,817) (20,325) Acquisition and Construction of Capital Assets (539,426) (134,513) (673,939) Net Cash Used by Capital and Related Financing Activities (558,966) (228,737) (787,703)

CASH FLOWS FROM INVESTING ACTIVITIES

Investment income - - - Net Cash Provided (Used) by Investing Activities - - - Net increase (decrease) in cash and cash equivalents (147,599) 820,878 673,279 Balances - Beginning of year 147,599 - 147,599 Balances - End of year $ - $ 820,878 $ 820,878 Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ (27,475) $ 575,790 $ 548,315 Adjustments to reconcile operating income (loss)

to net cash provided by operating activities:

Amortization and Depreciation 43,937 152,746 196,683 Changes in assets and liabilities:

Accounts receivable, net - 1,501 1,501 Operating grants receivable - 562,362 562,362 Inventories and Prepaid Expenses (118) - (118) Vendor accounts payable 2,394 32,465 34,859 Uneared revenue collected in advance 2,463 - 2,463 Compensated absences 1,320 5,423 6,743

OPEB - (8,293) (8,293)

Net Pension Liability (11,468) (22,161) (33,629) Net Cash Provided (Used) by Operating Activities $ 11,053 $ 1,299,833 $ 1,310,886 Noncash investing, capital and financing activities:

Lease Inception $ 142,748 $ - $ 142,748 161

FIDUCIARY FUNDS

Fiduciary funds account for assets held for others, in a trustee or agency capacity, which cannot be used to support other government programs.

CustodialFunds account for assets held by the County on behalf of individuals, private organizations, or other governments and/or funds. Additional combining schedules for the County’s CustodialFunds are included in this section.

162 .

CUSTODIAL FUNDS

Custodialfunds are as follows:

Tax Ditch –This fund accounts for special taxing district revenues that are used to maintain drainage ditches located in parts of the County.

Zoning Deposits –This fund accounts for performance deposits required under various sections of the Zoning Ordinance.

State and Town Tax Collections –This fund accounts for collections received by the County on behalf of the State of Maryland and incorporated towns located within the County. These taxes are collected by the County along with County taxes and are then remitted to the proper jurisdiction.

Motor Vehicle Administration Deposits–This fund accounts for funds collected by the County for State vehicle registration fees.

Escheat –Abandoned Property–This fund accounts for stale-dated County payroll and disbursements checks that are voided by the County and remitted to the State after three years as abandoned property. In accordance with State statutes, these funds are available to be claimed by the original payee or they revert to the State.

Inmate Welfare–This fund accounts for earnings or other funds depositedinto an account established for the inmates. Inmates can use these funds to make purchases at the commissary. Any remaining funds belonging to an inmate ispaid to themupon release.

163

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS

JUNE 30, 2023

STATE MOTOR

TAX & TOWN VEHICLE ESCHEAT - TOTAL

DITCH ZONING TAX ADMIN ABANDONED INMATE CUSTODIAL

FUND DEPOSITS COLLECTIONS DEPOSITS PROPERTY WELFARE FUNDS

ASSETS

Cash and Cash Equivalents $ 1 88,390 $ 7 67,670 $ 2 45,714 $ - $ 2 3,164 $ 3 9,632 $ 1 ,264,570 Total Assets $ 1 88,390 $ 7 67,670 $ 2 45,714 $ - $ 2 3,164 $ 3 9,632 $ 1 ,264,570

LIABILITIES

Accounts Payable and Other Liabilities $ - $ - $ - $ - $ - $ 2 ,095 $ 2 ,095 Due to Other Governments - - 2 45,714 - 2 3,164 - 2 68,878 Total Liabilities $ - $ - $ 2 45,714 $ - $ 2 3,164 $ 2 ,095 $ 2 70,973

NET POSITION

Restricted for:

Individuals, Organizations, and other Governments $ 1 88,390 $ 7 67,670 $ - $ - $ - $ 3 7,537 $ 9 93,597 164

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2023

STATE MOTOR

TAX & TOWN VEHICLE ESCHEAT - TOTAL

DITCH ZONING TAX ADMIN ABANDONED INMATE CUSTODIAL

FUND DEPOSITS COLLECTIONS DEPOSITS PROPERTY WELFARE FUNDS

ADDITIONS

Tax Ditch $ 3 2,139 $ - $ - $ - $ - $ - $ 3 2,139 Zoning Deposits - 2 03,354 - - - - 2 03,354 Tax Collections for Other Governments - - 1 5,816,966 - - - 1 5,816,966 Motor Vehicle Administration - - - 2 27,190 - - 2 27,190 Escheat - Abandoned Property - - - - 43,690 - 4 3,690 Inmate Welfare - - - - - 1 22,965 1 22,965 Total Additions 3 2,139 2 03,354 1 5,816,966 2 27,190 4 3,690 1 22,965 1 6,446,304

DEDUCTIONS

Distribution of Tax Ditch Funds 1 6,201 - - - - - 1 6,201 Refund of Zoning Deposits - 9 6,971 - - - - 9 6,971 Payments of Tax to Other Governments - - 1 5,816,966 - - - 1 5,816,966 Payments to Motor Vehicle Administration - - - 2 27,190 - - 2 27,190 Payments of Escheat to Others - - - - 4 3,690 - 4 3,690 Distribution of Inmate Welfare Funds - - - - - 1 22,288 1 22,288 Total Deductions 1 6,201 9 6,971 1 5,816,966 2 27,190 4 3,690 1 22,288 1 6,323,306

Net increase (decrease) in Fiduciary Net Position 1 5,938 1 06,383 - - - 6 77 1 22,998 Net Position-Beginning of Year 1 72,452 6 61,287 - - - 3 6,860 8 70,599 Net Position-End of Year $ 1 88,390 $ 7 67,670 $ - $ - $ - $ 3 7,537 $ 9 93,597 165 Community Partnerships for Children Community Partnerships for Children is reported as a Non-Major Special Revenue Fund in the County’s financial statements. In lieu of preparing separate audited financial statements for the Partnership,

additional schedules have been added to the County’s financial statements to meet requirements of the Partnership’s grantor agencies.

166

QUEEN ANNE'S COUNTY

COMMUNITY PARTNERSHIPS FOR CHILDREN SPECIAL REVENUE FUND

COMBINING BALANCE SHEETS

BY GRANTOR

JUNE 30, 2023 (with Summarized Totals as of June 30, 2022) Fed/State Total Returned 2022 GOCCP Community Reinvestment 2023 Summarized Admin GOC Partnerships Fund Total Total

ASSETS

Cash and cash equivalents $ 152,629 $ 175,612 $ 328,241 $ 10,282 $ 338,523 $ 447,451 Accounts receivable 9,230 11,706 20,936 - 20,936 12,000 Due from State governmental agencies - 257,525 257,525 - 257,525 82,690 Due from Federal governmental agencies - - - - - - Total Assets $ 161,859 $ 444,843 $ 606,702 $ 10,282 $ 616,984 $ 542,141

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts payable and accrued expenditures $ 61,771 $ 176,370 $ 238,141 $ - $ 238,141 $ 169,066 Due to State governmental agencies 45,978 266,647 312,625 - 312,625 307,461 Total Liabilities 107,749 443,017 550,766 - 550,766 476,527

FUND BALANCES

Assigned 54,110 1,826 55,936 10,282 66,218 65,614 Total Fund Balances 54,110 1,826 55,936 10,282 66,218 65,614 Total Liabilities and Fund Balances $ 161,859 $ 444,843 $ 606,702 $ 10,282 $ 616,984 $ 542,141 167

QUEEN ANNE'S COUNTY

COMMUNITY PARTNERSHIPS FOR CHILDREN SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BY COMMUNITY PARTNERSHIP AGREEMENTS (CPA) and NON-COMMUNITY PARTNERSHIP AGREEMENTS (NON-CPA) FOR THE YEAR ENDED JUNE 30, 2023 (with Summarized Totals for Year Ended June 30, 2022) Federal/State GOCCP/GOC Healthy MD Community Achievement Local Transportation Fam/Home Family After School Community Administrative Support Mentoring Care Team Voucher Visiting Navigators Opportunity Mentoring

REVENUES

CPA

Intergovernmental GOC $ 79,890 $ 53,783 $ 60,319 $ 32,351 $ 45,469 $ 72,145 $ 42,804 $ - $ 46,219 Subtotal CPA 79,890 53,783 60,319 32,351 45,469 72,145 42,804 - 46,219 Non-CPA Intergovernmental Federal GOCCP Youth Strategies - - - - - - - - - Other State Grant Funding - - - - - 296,170 - - - Investment Income - - - - - - - - - Earned Reinvestment Donations - - - - - - - - - Miscellaneous 11,075 - - - - - - 3,946 -

Subtotal Non-CPA 11,075 - - - - 296,170 - 3,946 - Total Revenues 90,965 53,783 60,319 32,351 45,469 368,315 42,804 3,946 46,219

EXPENDITURES

CPA

Program Contracted Services - - - - - - - - - Other Expenditures Salaries 45,737 - - 26,424 13,708 - - - - Fringe Benefit Costs 3,793 - - 4,860 1,162 - - - - Auditing - - - - - - - - - Consultants - 5,615 - - - 1,018 - - - Professional Groups - - - - - - - - - Equipment Rental 747 - - - - - - - - Other Contracted Services 27,812 12,990 - - - - 37,741 - 3,704 Postage - - - - - 2 - - - Office Supplies - - 199 - - 516 357 - -

Program Supplies - 417 1,416 - 30,599 11,085 887 - 1,579 Food - 2,511 - - - 200 - - 1,435 Printing and Publishing - - - - - 15 - - 265 Data Processing Supplies - - - - - 3,240 - - - Repairs and Equipment - - - - - 300 1,723 - - Business Travel - - 2,355 - - 282 1,342 - 659 Subscriptions and Dues 2,683 - - - - - 272 - - Meetings & Conferences - - - - - - - - - Training - 32,250 - - - 3,425 - - - Advertising - - - - - 1,349 - - -

Communications - - 363 - - 1,000 482 - - Rent - - - - - 33 - - 8,000 Equipment under $1000/$500 - - - 1,067 - 1,231 - - - Other Charges - - 55,986 - - 48,449 - - 30,577 Subtotal CPA Expenditures 80,772 53,783 60,319 32,351 45,469 72,145 42,804 - 46,219 Non-CPA Program Contracted Services - - - - - 296,170 - 120,000 - Other Expenditures Salaries 98,868 - - - 3,928 - - - - Fringe Benefit Costs 50,295 - - - 2,080 - - - -

Consultants 4,013 - - - - - - - - Equipment Rental 2,819 - - - - - - - - Other Contracted Services 9,188 - - - - - - - - Postage 150 - - - - - - - - Office Supplies 2,731 - - - - - - - - Program Supplies 11,900 - - - 206 - - - - Food 2,359 - - - - - - - - Equipment Operation - - - - - - - - - Business Travel - - - - - - - - - Subscriptions and Dues 5,000 - - - - - - - - Meetings & Conferences 2,000 - - - - - - - -

Training 2,624 - - - - - - - - Board's Expenditures 4,661 - - - - - - - - Advertising - - - - - - - - - Marketing/Promotions - - - - - - - - - Communications 1,326 - - - - - - - - Rent - - - - - - - - - Other Charges 11,139 - - - - - - 243,946 - Office equipment - - - - - - - - - Subtotal Non-CPA Expenditures 209,073 - - - 6,214 296,170 - 363,946 - Total Expenditures 289,845 53,783 60,319 32,351 51,683 368,315 42,804 363,946 46,219

Excess of Revenues Over (Under) Expenditure ( 198,880) - - - ( 6,214) - - ( 360,000) -

OTHER FINANCING SOURCES

Transfers In for:

Program Contracted Services 198,879 - - - 6,214 - - 360,000 - Other Financing Sources 198,879 - - - 6,214 - - 360,000 - Net Increase in Fund Balances $ ( 1) $ - $ - $ - $ - $ - $ - $ - $ - Fund Balances, July 1 Fund Balances, June 30 168

QUEEN ANNE'S COUNTY

COMMUNITY PARTNERSHIPS FOR CHILDREN SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BY COMMUNITY PARTNERSHIP AGREEMENTS (CPA) and NON-COMMUNITY PARTNERSHIP AGREEMENTS (NON-CPA) FOR THE YEAR ENDED JUNE 30, 2023 (with Summarized Totals for Year Ended June 30, 2022)

(CONTINUED)

Federal/State GOCCP/GOC State Federal GOCCP/GOC State GOC GOCCP GOCCP Character Operating Fund All Programs CPA Non-CPA Non-CPA Youth Counts Total Subtotal Subtotal Subtotal Subtotal Strategies $ - $ 353,090 $ 432,980 $ 432,980 $ - $ - $ -

- 353,090 432,980 432,980 - - -

- - - - - - -

- 296,170 296,170 - - - -

- - - - - - -

- - - - - - -

13,875 17,821 28,896 - - - - 13,875 313,991 325,066 - - - - 13,875 667,081 758,046 432,980 - - -

- - - - - - -

- 40,132 85,869 85,869 - - -

- 6,022 9,815 9,815 - - -

- - - - - - -

- 6,633 6,633 6,633 - - -

- - - - - - -

- - 747 747 - - -

- 54,435 82,247 82,247 - - -

- 2 2 2 - - -

- 1,072 1,072 1,072 - - -

- 45,983 45,983 45,983 - - -

- 4,146 4,146 4,146 - - -

- 280 280 280 - - -

- 3,240 3,240 3,240 - - -

- 2,023 2,023 2,023 - - -

- 4,638 4,638 4,638 - - -

- 272 2,955 2,955 - - -

- - - - - - -

- 35,675 35,675 35,675 - - -

- 1,349 1,349 1,349 - - -

- 1,845 1,845 1,845 - - -

- 8,033 8,033 8,033 - - -

- 2,298 2,298 2,298 - - -

- 135,012 135,012 135,012 - - -

- 353,090 433,862 433,862 - - -

- 416,170 416,170 - 416,170 - -

21,715 25,643 124,511 - 124,511 - - 2,834 4,914 55,209 - 55,209 - -

- - 4,013 - 4,013 - -

- - 2,819 - 2,819 - -

- - 9,188 - 9,188 - -

- - 150 - 150 - -

42 42 2,773 - 2,773 - -

- 206 12,106 - 12,106 - -

- - 2,359 - 2,359 - -

280 280 280 - 280 - -

- - - - - - -

- - 5,000 - 5,000 - -

- - 2,000 - 2,000 - -

- - 2,624 - 2,624 - -

- - 4,661 - 4,661 - -

- - - - - - -

2,973 2,973 2,973 - 2,973 - -

- - 1,326 - 1,326 - -

- - - - - - -

- 243,946 255,085 - 255,085 - -

- - - - - - -

27,844 694,174 903,247 - 903,247 - - 27,844 1,047,264 1,337,109 433,862 903,247 - - ( 13,969) ( 380,183) ( 579,063) ( 882) ( 903,247) - - - 13,969 380,183 579,062 - - - - 13,969 380,183 579,062 - - - - $ - $ - ( 1) ( 882) ( 903,247) - - 55,937 606,662 ( 775,986) 3,491 ( 25,474) $ 55,936 $ 605,780 $ ( 1,679,233) $ 3,491 $ ( 25,474)

CONTINUED

169

QUEEN ANNE'S COUNTY

COMMUNITY PARTNERSHIPS FOR CHILDREN SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BY COMMUNITY PARTNERSHIP AGREEMENTS (CPA) and NON-COMMUNITY PARTNERSHIP AGREEMENTS (NON-CPA) FOR THE YEAR ENDED JUNE 30, 2023 (with Summarized Totals for Year Ended June 30, 2022)

(CONTINUED)

Total Other Community Returned 2022 Non-CPA Partnerships Reinvestment 2023 Summarized State Grants Other Operating Funds Fund Total Total

REVENUES

CPA

Intergovernmental

GOC $ - $ - $ 432,980 $ - $ 432,980 $ 340,884

Subtotal CPA - - 432,980 - 432,980 340,884 Non-CPA Intergovernmental Federal GOCCP Youth Strategies - - - - - - Other State Grant Funding 296,170 - 296,170 - 296,170 296,372 Investment Income - - - 604 604 286 Earned Reinvestment Donations - - - - - 2,300 Miscellaneous - 28,896 28,896 1 28,897 14,678 Subtotal Non-CPA 296,170 28,896 325,066 605 325,671 313,636 Total Revenues 296,170 28,896 758,046 605 758,651 654,520

EXPENDITURES

CPA

Program Contracted Services - - - - - - Other Expenditures Salaries - - 85,869 - 85,869 81,385 Fringe Benefit Costs - - 9,815 - 9,815 8,618 Auditing - - - - - 1,528 Consultants - - 6,633 - 6,633 15,500 Professional Groups - - - - - 2,382 Equipment Rental - - 747 - 747 - Other Contracted Services - - 82,247 - 82,247 36,970 Postage - - 2 - 2 12 Office Supplies - - 1,072 - 1,072 2,742 Program Supplies - - 45,983 - 45,983 46,427

Food - - 4,146 - 4,146 1,536 Printing and Publishing - - 280 - 280 - Data Processing Supplies - - 3,240 - 3,240 - Repairs and Equipment - - 2,023 - 2,023 1,162 Business Travel - - 4,638 - 4,638 3,393 Subscriptions and Dues - - 2,955 - 2,955 - Meetings & Conferences - - - - - 199 Training - - 35,675 - 35,675 1,458 Advertising - - 1,349 - 1,349 - Communications - - 1,845 - 1,845 1,760 Rent - - 8,033 - 8,033 10,800

Equipment under $1000/$500 - - 2,298 - 2,298 1,399 Other Charges - - 135,012 - 135,012 123,613 Subtotal CPA Expenditures - - 433,862 - 433,862 340,884 Non-CPA Program Contracted Services 296,170 ( 296,170) 416,170 - 416,170 296,372 Other Expenditures Salaries - - 124,511 - 124,511 124,073 Fringe Benefit Costs - - 55,209 - 55,209 52,628 Consultants - - 4,013 - 4,013 10,000 Equipment Rental - - 2,819 - 2,819 2,917

Other Contracted Services - - 9,188 - 9,188 - Postage - - 150 - 150 500 Office Supplies - - 2,773 - 2,773 1,777 Program Supplies - - 12,106 - 12,106 21,878 Food - - 2,359 - 2,359 1,408 Equipment Operation - - 280 - 280 - Business Travel - - - - - 25 Subscriptions and Dues - - 5,000 - 5,000 911 Meetings & Conferences - - 2,000 - 2,000 2,000 Training - - 2,624 - 2,624 2,498 Board's Expenditures - - 4,661 - 4,661 4,952

Advertising - - - - - 300 Marketing/Promotions - - 2,973 - 2,973 1,870 Communications - - 1,326 - 1,326 1,403 Rent - - - - - - Other Charges - - 255,085 - 255,085 242,362 Office equipment - - - - - 2,500 Subtotal Non-CPA Expenditures 296,170 ( 296,170) 903,247 - 903,247 770,374 Total Expenditures 296,170 ( 296,170) 1,337,109 - 1,337,109 1,111,258 Excess of Revenues Over (Under) Expenditure - 325,066 ( 579,063) 605 ( 578,458) ( 456,738)

OTHER FINANCING SOURCES

Transfers In for:

Program Contracted Services - 579,062 579,062 - 579,062 457,024 Other Financing Sources - 579,062 579,062 - 579,062 457,024 Net Increase in Fund Balances - 904,128 ( 1) 605 604 286 Fund Balances, July 1 - 247,243 55,937 9,677 65,614 65,328 Fund Balances, June 30 $ - $ 1,151,371 $ 55,936 $ 10,282 $ 66,218 $ 65,614 170 171

QUEEN ANNE'S COUNTY

COMMUNITY PARTNERSHIPS FOR CHILDREN SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

FOR THE YEAR ENDED JUNE 30, 2023

COMMUNITY PARTNERSHIPS FOR CHILDREN RETURNED REINVESTMENT FUND

Variance with Variance with Final Budget Final Budget Original Final Positive Original Final Positive Budget Budget Actual (Negative) Budget Budget Actual (Negative)

REVENUES

Intergovernmental GOC - CPA and Non-CPA $ 345,346 $ 438,144 $ 432,980 $ (5,164) $ - $ - $ - $ - Other 296,372 296,372 296,170 (202) - - - - Investment Income - - - - - - 6 04 6 04 Donations - - - - - - - - Miscellaneous 11,000 11,000 28,896 17,896 - - 1 1 Total Revenues 652,718 745,516 758,046 12,530 - - 6 05 6 05

EXPENDITURES

Program Contracted Services 296,372 459,247 416,170 43,077 - - - - Other Expenditures Salaries 204,842 211,969 210,380 1 ,589 - - - - Fringe Benefit Costs 62,864 63,928 65,024 (1,096) - - - - Auditing - 8 17 - 8 17 - - - - Consultants 27,571 12,225 10,646 1 ,579 - - - - Professional Groups - - - - - - - - Equipment Rental 3,252 3 ,252 3 ,566 (314) - - - - Other Contracted Services 37,030 37,030 91,435 (54,405) - - - -

Postage 5 10 5 10 1 52 3 58 - - - - Office Supplies 4,364 3 ,510 3 ,845 (335) - - - - Program Supplies 33,809 56,127 58,089 (1,962) - - - - Food 2 ,100 5 ,845 6 ,505 (660) - - - - Printing and Publishing 2,100 2 65 2 80 (15) - - - - Data Processing Supplies 2,856 3 ,240 3 ,240 - - - - - Repairs and Equipment 1,320 1 ,320 2 ,023 (703) - - - - Equipment Operation - - 2 80 (280) - - - - Business Travel 4,644 4 ,314 4 ,638 (324) - - - -

Subscriptions and Dues 1,013 7 ,700 7 ,955 (255) - - - - Meetings & Conferences 5,701 2 ,000 2 ,000 - - - - - Training 5,396 38,225 38,299 (74) - - - - Board's Expenditures 7,038 6 ,770 4 ,661 2 ,109 - - - - Advertising - 8 00 1 ,349 (549) - - - - Marketing/Promotions 2,895 2 ,895 2 ,973 (78) - - - - Communications 4,202 3 ,834 3 ,171 6 63 - - - - Rent 10,800 9 ,200 8 ,033 1 ,167 - - - - Equipment - 3 ,584 2 ,298 1 ,286 - - - -

Other Charges 398,156 392,225 390,097 2 ,128 - - - - Office equipment - - - - - - - - Total Expenditures 1,118,835 1,330,832 1,337,109 (6,277) - - - - Excess of Revenues Over (Under) Expenditures ( 466,117) ( 585,316) ( 579,063) 6 ,253 - - 6 05 6 05

OTHER FINANCING SOURCES

Transfers In for:

Program Contracted Services 466,117 585,316 579,062 (6,254) - - - - Other Financing Sources 466,117 585,316 579,062 (6,254) - - - - Net Increase in Fund Balances $ - $ - (1) $ (1) $ - $ - 6 05 $ 6 05 Fund Balances, July 1 55,937 9 ,677 Fund Balances, June 30 $ 55,936 $ 10,282 172

QUEEN ANNE'S COUNTY

COMMUNITY PARTNERSHIPS FOR CHILDREN SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETARY BASIS

FOR THE YEAR ENDED JUNE 30, 2023

(CONTINUED)

TOTAL

Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) $ 345,346 $ 438,144 $ 432,980 $ (5,164) 296,372 296,372 296,170 (202)

- - 6 04 6 04

- - - -

11,000 11,000 28,897 17,897 652,718 745,516 758,651 13,135 296,372 459,247 416,170 43,077 204,842 211,969 210,380 1 ,589 62,864 63,928 65,024 (1,096)

- 8 17 - 8 17

27,571 12,225 10,646 1 ,579

- - - -

3 ,252 3 ,252 3 ,566 (314) 37,030 37,030 91,435 (54,405) 5 10 5 10 1 52 3 58 4 ,364 3 ,510 3 ,845 (335) 33,809 56,127 58,089 (1,962) 2 ,100 5 ,845 6 ,505 (660) 2 ,100 2 65 2 80 (15) 2 ,856 3 ,240 3 ,240 - 1 ,320 1 ,320 2 ,023 (703)

- - 2 80 (280)

4 ,644 4 ,314 4 ,638 (324) 1,013 7 ,700 7 ,955 (255) 5 ,701 2 ,000 2 ,000 - 5 ,396 38,225 38,299 (74) 7 ,038 6 ,770 4 ,661 2 ,109

- 8 00 1 ,349 (549)

2 ,895 2 ,895 2 ,973 (78) 4 ,202 3 ,834 3 ,171 6 63 10,800 9 ,200 8 ,033 1 ,167

- 3,584 2 ,298 1 ,286

398,156 392,225 390,097 2 ,128

- - - -

1,118,835 1,330,832 1,337,109 (6,277) ( 466,117) ( 585,316) ( 578,458) 6 ,858 466,117 585,316 579,062 (6,254) 466,117 585,316 579,062 (6,254) $ - $ - 6 04 $ 6 04 65,614 $ 66,218 173

S S

TATISTICAL ECTION

174

STATISTICAL SECTION

The Statistical Section, which fully incorporates information mandated by Governmental Accounting Standards Board (GASB) Statement No. 44, Economic Condition Reporting: The Statistical Section, presents detailed information for the primary government in the following areas, as a context for understanding what the information in the Financial Section says about the County’s overall financial health:

FINANCIAL TRENDS–Information to help the reader understand how the County’s financial performance and well-being have changed over time.

REVENUE CAPACITY–Information to help the reader assess the County’s most significant local revenue sources –the property tax and income tax.

DEBT CAPACITY–Informationto help the reader assess the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future.

DEMOGRAPHIC AND ECONOMIC INFORMATION–Indicators to help the reader understand the environment within which the County’s financial activities take place.

OPERATING INFORMATION–Service and infrastructure data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs.

Many of these tables cover more than two fiscal years and present data from outside the accounting records. Therefore, the Statistical Section is unaudited.

175

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

NET POSITION BY COMPONENT - GOVERNMENT-WIDE

(GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES)

LAST TEN FISCAL YEARS

Table 1 2014 2015 2016 2017 2018 Governmental Activities:

Net Investment in Capital Assets $ 127,369,959 $ 125,434,538 $ 123,466,319 $ 120,249,244 $ 114,794,226 Restricted 17,616,132 20,464,486 21,063,295 13,094,534 13,275,244 Unrestricted (deficit) (1) (71,169,310) (73,475,567) (78,567,505) (67,189,342) (58,025,753) Total Governmental Activities Net Position (2) 73,816,781 (3) 7 2,423,457 65,962,109 (4) 66,154,436 (5) 70,043,717 Business-type Activities:

Net Investment in Capital Assets 79,783,160 80,787,152 80,909,015 86,163,078 84,386,291 Restricted 3,110,033 3,061,534 1,699,914 1,700,836 1,060,134 Unrestricted 8,721,212 8,486,063 10,240,161 4,116,300 7,458,996 Total Business-type Activities Net Position 91,614,405 (3) 9 2,334,749 92,849,090 (4) 91,980,214 (5) 92,905,421 Primary Government:

Net Investment in Capital Assets 207,153,119 206,221,690 204,375,334 206,412,322 199,180,517 Restricted 20,726,165 23,526,020 22,763,209 14,795,370 14,335,378 Unrestricted (deficit) (1) (62,448,098) (64,989,504) (68,327,344) (63,073,042) (50,566,757) Total Primary Government Net Position (2) $ 165,431,186 (3) $ 1 64,758,206 $ 158,811,199 (4) $ 158,134,650 (5) $ 162,949,138

NOTES:

* Government-wide net position information is reported on the accrual basis of accounting.

* Accounting standards require that net position be reported in three components in the financial

statements: net investment in capital assets, restricted; and unrestricted. Net position is considered restricted when (1) an external party, such as the state or federal government, places a restriction on how the resources may be used, or (2) enabling legislation is enacted by the County.

* Source: Statement of Net Position

(1) In the government-wide financial statements, the County has reported negative unrestricted amounts for some years.

This is due to the fact that the County issues general obligation bonded debt for purposes of capital construction on behalf of the Queen Anne's County Board of Education. Absent the effect of this relationship, the County would have reported the following:

Government-wide unrestricted (deficit) net position would have been:

Unrestricted (deficit) net position reported above $ (62,448,098) $ (64,989,504) $ (68,327,344) $ (63,073,042) $ (50,566,757) Debt issued for capital on behalf of others 67,651,486 66,219,608 63,271,304 59,207,136 58,625,356 County (deficit) net position absent the effect of this relationship $ 5,203,388 $ 1,230,104 $ (5,056,040) $ (3,865,906) $ 8,058,599

(2) FY2013 Net Position of Governmental Activities was restated in fiscal year 2014.

(3) FY2014 Net Position of Governmental and Business-Type Activities was restated in fiscal year 2015.

(4) FY2017 Net Position of Governmental and Business-Type Activities was restated in fiscal year 2018.

(5) FY2018 Net Position of Governmental and Business-Type Activities was restated in fiscal year 2019.

(6) FY2022 Net Position of Business-Type Activities was restated in fiscal year 2023.

176

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

NET POSITION BY COMPONENT - GOVERNMENT-WIDE

(GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES)

LAST TEN FISCAL YEARS

Table 1

(CONTINUED)

2019 2020 2021 2022 2023 $ 115,143,089 $ 114,252,313 $ 116,220,059 $ 118,666,142 $ 122,128,900 18,962,289 19,844,181 20,883,128 24,012,709 26,495,555 (61,637,321) (48,809,467) (20,071,163) 11,879,310 36,459,068 72,468,057 85,287,027 117,032,024 154,558,161 185,083,523 85,916,730 86,939,502 88,635,207 93,562,741 99,118,189 2,234,440 2,037,318 6,322,353 5,310,698 5,350,538 10,087,649 16,587,060 19,018,596 28,956,179 30,307,701

98,238,819 105,563,880 113,976,156 (6) 127,829,618 134,776,428 201,059,819 201,191,815 204,855,266 212,228,883 221,247,089 21,196,729 21,881,499 27,205,481 29,323,407 31,846,093 (51,549,672) (32,222,407) (1,052,567) 40,835,489 66,766,769 $ 170,706,876 $ 190,850,907 $ 231,008,180 (6) $ 282,387,779 $ 319,859,951 $ (51,549,672) $ (32,222,407) $ (1,052,567) $ 40,835,489 $ 66,766,769 58,007,072 55,846,036 56,855,185 53,155,458 48,229,215

$ 6,457,400 $ 23,623,629 $ 55,802,618 $ 93,990,947 $ 114,995,984 177

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN NET POSITION - GOVERNMENT-WIDE (GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES)

LAST TEN FISCAL YEARS

Table 2-a 2014 2015 2016 2017 2018 Expenses Governmental Activities:

General Government $ 14,133,149 $ 10,849,277 $ 13,936,312 $ 13,177,254 $ 17,511,975 Public Safety 26,666,211 25,297,450 27,525,712 27,997,262 28,373,219 Public Works 12,365,647 14,363,603 19,522,534 20,753,117 18,101,635 Parks & Recreation (3) - - - - - Health & Social Services 7 ,123,340 6,631,598 7,333,528 7,424,371 7,149,348 Education & Library 56,218,528 67,091,679 62,374,873 60,922,185 64,082,500

Conservation of Natural Resources 2 ,395,762 587,147 1,799,234 616,237 2,567,600 Economic/Community Development 1 ,528,035 1,763,024 3,391,547 1,860,222 2,477,129 Interest and Fiscal Charges 3 ,987,943 4,039,622 4,345,527 4,150,101 4,294,929 Total Governmental Activities Expenses 124,418,615 130,623,400 140,229,267 136,900,749 144,558,335 Business-type Activities:

Water and Sewer 11,059,306 10,412,432 10,615,466 11,818,087 12,880,483 Golf Course (4) 5 15,325 496,065 505,085 540,504 509,150 Public Landings and Marinas (5) 5 44,945 537,823 529,943 572,360 559,597 Airport 8 07,226 1,014,491 966,896 1,053,899 1,100,136 Total Business-type Activities Expenses 12,926,802 12,460,811 12,617,390 13,984,850 15,049,366 Total Primary Government Expenses 137,345,417 143,084,211 152,846,657 150,885,599 159,607,701

Program Revenues Governmental Activities:

General Government Charges for Services 1 ,500,273 1,505,857 1,565,170 1,552,164 1,669,311 Operating Grants and Contributions 6 06,649 644,297 582,571 563,016 660,790 Capital Grants and Contributions 5 89,988 9 6,684 (30,000) - 1,080,084 Total Revenue 2 ,696,910 2,246,838 2,117,741 2,115,180 3,410,185 Public Safety Charges for Services 1 ,286,945 1,244,752 1,354,350 1,350,626 1,505,267 Operating Grants and Contributions 1 ,081,577 1,052,666 1,088,597 1,037,879 1,294,733

Capital Grants and Contributions 2 82,139 119,118 175,653 5 ,406 166,001 Total Revenue 2 ,650,661 2,416,536 2,618,600 2,393,911 2,966,001 Public Works Charges for Services 1 ,425,012 1,275,538 1,337,358 1,472,664 1,779,206 Operating Grants and Contributions 7 12,550 527,538 1,029,019 980,075 822,659 Capital Grants and Contributions 2 ,221,299 8 0,000 108,880 161,084 282,028 Total Revenue 4 ,358,861 1,883,076 2,475,257 2,613,823 2,883,893

Parks & Recreation (3) Charges for Services - - - - - Operating Grants and Contributions - - - - - Capital Grants and Contributions - - - - - Total Revenue - - - - - Health & Social Services Charges for Services 65,537 6 8,187 7 6,404 7 3,066 7 1,131 Operating Grants and Contributions 2 ,026,675 2,056,111 1,834,000 1,893,648 2,018,289 Capital Grants and Contributions 67,392 4 0,527 140,400 5 8,500 5 8,500

Total Revenue 2 ,159,604 2,164,825 2,050,804 2,025,214 2,147,920 Education & Library Charges for Services 1 ,721,379 1,249,332 1,230,994 1,319,433 1,272,301 Operating Grants and Contributions - - - - - Capital Grants and Contributions - - - - - Total Revenue 1 ,721,379 1,249,332 1,230,994 1,319,433 1,272,301 Conservation of Natural Resources Charges for Services 73,279 7 2,688 7 0,708 6 0,826 110,655

Operating Grants and Contributions 1 03,892 9 6,195 6 8,152 186,333 131,321 Capital Grants and Contributions 75,820 3 ,637 573,003 - 1,439,284 Total Revenue 2 52,991 172,520 711,863 247,159 1,681,260 Economic/Community Development Charges for Services 5 08,000 8 0,558 311,000 620,000 316,500 Operating Grants and Contributions 2 55,100 285,344 156,804 231,360 810,319 Capital Grants and Contributions (69,569) - - - -

Total Revenue 6 93,531 365,902 467,804 851,360 1,126,819 Interest and Fiscal Charges Charges for Services - - - - - Operating Grants and Contributions - - - - - Capital Grants and Contributions - - - - - Total Revenue - - - - - Total Governmental Activities Program Revenues 14,533,937 10,499,029 11,673,063 11,566,080 15,488,379 178

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN NET POSITION - GOVERNMENT-WIDE (GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES)

LAST TEN FISCAL YEARS

Table 2-a

(CONTINUED)

2019 2020 2021 2022 2023 $ 16,493,064 $ 17,299,695 $ 21,447,303 $ 20,975,854 $ 21,070,854 35,668,385 31,445,313 33,376,832 32,937,936 42,482,230 19,118,090 15,045,105 13,898,271 15,486,633 19,422,823

- 7,780,241 6,051,585 6,445,776 6,338,014

7,669,431 7,116,694 6,969,134 6,631,472 7,219,183 64,438,616 68,764,861 68,632,733 68,957,650 69,770,287 2,696,971 1,423,080 3,621,749 2,402,429 3,386,538 1,808,000 2,281,480 5,262,207 3,012,720 2,798,777 4,712,864 4,391,332 4,330,706 4,415,584 4,525,460 152,605,421 155,547,801 163,590,520 161,266,054 177,014,166 11,232,955 11,602,537 12,157,175 12,384,820 13,822,527 584,718 541,335 523,435 609,737 697,824

1,342,308 683,738 1,104,170 548,928 684,685 1,434,031 968,205 940,188 1,017,606 1,058,318 14,594,012 13,795,815 14,724,968 14,561,091 16,263,354 167,199,433 169,343,616 178,315,488 175,827,145 193,277,520 1,769,520 1,509,985 2,027,823 2,400,962 2,037,088 716,683 428,812 2,686,609 2,920,183 249,863 480,500 520,277 1,056,963 1,219,155 1,549,325 2,966,703 2,459,074 5,771,395 6,540,300 3,836,276 1,415,187 1,379,621 1,772,824 2,782,299 1,908,036

1,161,505 1,697,018 3,603,339 2,300,947 3,601,321 176,970 112,845 1,379,718 908,036 164,422 2,753,662 3,189,484 6,755,881 5,991,282 5,673,779 1,784,040 817,088 1,083,030 1,134,409 961,563 1,155,251 1,233,626 1,494,842 8 ,500 9 ,070 1,353,948 4 5,640 - - 1,119,611 4,293,239 2,096,354 2,577,872 1,142,909 2,090,244

- 822,605 1,058,579 1,149,578 1,101,729

- 3 7,060 216,861 3 2,494 2 5,681

- 2,237,549 343,301 1,964,345 640,892

- 3,097,214 1,618,741 3,146,417 1,768,302

9 1,183 7 2,840 3 7,025 9 1,756 7 7,736 2,120,065 2,273,959 2,381,707 2,595,327 3,060,269 175,960 362,900 157,905 207,862 195,509 2,387,208 2,709,699 2,576,637 2,894,945 3,333,514 1,318,609 1,593,200 3,383,580 2,438,720 2,237,364

- - - - -

4 3,059 105,575 973,747 1,850,863 979,756 1,361,668 1,698,775 4,357,327 4,289,583 3,217,120 126,940 136,458 163,971 4 6,491 7 6,138 9 4,814 117,820 111,443 - - 2,118,200 831,901 1,612,662 1,095,760 2,007,786 2,339,954 1,086,179 1,888,076 1,142,251 2,083,924

- 205,000 864,667 397,823 620,000

205,300 757,258 3,978,848 1,523,758 1,286,414

- - - - -

205,300 962,258 4,843,515 1,921,581 1,906,414

- - - 4 8,506 4 6,124

- - - - -

- - - - -

- - - 4 8,506 4 6,124

16,307,734 17,299,037 30,389,444 27,117,774 23,955,697 179

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN NET POSITION - GOVERNMENT-WIDE (GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES)

LAST TEN FISCAL YEARS

Table 2-a

(CONTINUED)

2014 2015 2016 2017 2018 Business-type Activities:

Water and Sewer Charges for Services $ 8,341,848 $ 8,840,213 $ 8,956,360 $ 8,222,317 $ 9,214,383 Operating Grants and Contributions 90,000 9 0,000 8 5,099 9 0,000 9 0,000 Capital Grants and Contributions 6 65,268 1,862,257 1,958,051 2,222,796 4,198,378 Total Revenue 9 ,097,116 10,792,470 10,999,510 10,535,113 13,502,761 Golf Course Charges for Services 2 97,293 295,955 305,528 318,599 340,123 Operating Grants and Contributions - - - - -

Capital Grants and Contributions - - - - - Total Revenue 2 97,293 295,955 305,528 318,599 340,123 Public Landings and Marinas Charges for Services 4 23,478 423,723 423,427 443,176 451,524 Operating Grants and Contributions 36,439 4 3,304 3 6,781 3 3,542 104,829 Capital Grants and Contributions - - - - - Total Revenue 4 59,917 467,027 460,208 476,718 556,353 Airport Charges for Services 49,061 5 3,200 4 5,916 3 3,256 2 5,857

Operating Grants and Contributions 2,420 7 3,311 5 2,837 245,738 6 0,858 Capital Grants and Contributions 7,457 - - - - Total Revenue 58,938 126,511 9 8,753 278,994 8 6,715 Total Business-type Activities Program Revenues 9 ,913,264 11,681,963 11,863,999 11,609,424 14,485,952 Total Primary Government Program Revenues 24,447,201 22,180,992 23,537,062 23,175,504 29,974,331 Net (Expense) Revenue (1) Governmental activities (109,884,678) (120,124,371) (128,556,204) (125,334,669) (129,069,956)

Business-type activities (3,013,538) (778,848) (753,391) (2,375,426) (563,414) Total Primary Government Net Expense $ (112,898,216) $ ( 120,903,219) $ ( 129,309,595) $ ( 127,710,095) $ ( 129,633,370) General Revenues and Other Changes in Net Position Governmental Activities:

Taxes (2) $ 112,123,625 $ 116,821,607 $ 121,011,135 $ 123,299,031 $ 131,444,679 Investment income 95,286 9 4,092 174,691 444,063 978,955 Gain/(Loss) on Sale of Capital Assets 3 46,765 1,098,632 161,106 5 3,936 8 7,734 Miscellaneous 8 77,629 1,076,893 949,046 2,065,465 630,895 Transfers In (Out) (589,737) (360,177) (201,122) (335,499) (183,026) Total Governmental Activities 112,853,568 118,731,047 122,094,856 125,526,996 132,959,237

Business-type Activities:

Investment income 3 43,568 323,585 320,443 361,840 439,716 Gain on Sale of Capital Assets - - - - - Miscellaneous 7 93,951 815,430 746,167 809,211 865,879 Transfers In (Out) 5 89,737 360,177 201,122 335,499 183,026 Total Business-type Activities 1 ,727,256 1,499,192 1,267,732 1,506,550 1,488,621 Total Primary Government 114,580,824 120,230,239 123,362,588 127,033,546 134,447,858 Change in Net Position

Governmental activities 2 ,968,890 (1,393,324) (6,461,348) 192,327 3,889,281 Business-type activities (1,286,282) 720,344 514,341 (868,876) 925,207 Total Primary Government $ 1,682,608 $ (672,980) $ (5,947,007) $ (676,549) $ 4,814,488

NOTES:

* Government-wide net position information is reported on the accrual basis of accounting.

* Source: Statement of Activities.

(1) Net (expense)/revenue is the difference between the expenses and program revenues of a function or program. It indicates

the degree to which a function or program is supported with its own fees and program-specific grants versus its reliance upon funding from taxes and general revenues. Numbers in parentheses indicate that expenses were greater than program revenues and therefore general revenues were needed to finance that function or program. Numbers without parentheses mean that program revenues were more than sufficient to cover expenses.

(2) See Table 2-b for detail of General Tax Revenues.

(3) For years FY12 through FY19, Parks & Recreation governmental activities are included in public works (parks) and social services (recreation).

180

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN NET POSITION - GOVERNMENT-WIDE (GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES)

LAST TEN FISCAL YEARS

Table 2-a

(CONTINUED)

2019 2020 2021 2022 2023 $ 10,524,474 $ 13,873,082 $ 12,174,150 $ 18,143,049 $ 12,330,275 520,000 2,541,550 4,600,000 865,761 1,467,662 3,626,906 1,974,341 2,668,488 3,034,541 4,027,234 14,671,380 18,388,973 19,442,638 22,043,351 17,825,171 373,014 399,603 593,022 594,180 617,340

- - - - -

- - - - -

373,014 399,603 593,022 594,180 617,340 454,071 538,760 540,240 475,309 465,730 888,592 1 0,447 178,208 640,752 745,966

- - - - -

1,342,663 549,207 718,448 1,116,061 1,211,696 2 4,710 2 4,130 2 4,920 2 3,774 2 2,655 725,109 9 5,052 2 0,180 516,774 741,939

- - - - -

749,819 119,182 4 5,100 540,548 764,594 17,136,876 19,456,965 20,799,208 24,294,140 20,418,801 33,444,610 36,756,002 51,188,652 51,411,914 44,374,498 (136,297,687) (138,246,764) (133,201,076) (134,148,280) (153,058,469) 2,542,864 5,661,150 6,074,240 9,733,049 4,155,447 $ ( 133,754,823) $ ( 132,585,614) $ ( 127,126,836) $ ( 124,415,231) $ ( 148,903,022) $ 137,285,550 $ 148,876,477 $ 163,687,534 $ 171,755,675 $ 176,022,971

1,772,464 1,393,017 239,908 462,588 6,448,944 2 5,823 4 4,343 9 5,687 (1,157,005) - 979,201 900,976 1,073,180 1,801,868 1,628,246 (1,341,011) (149,079) (150,236) (1,188,709) (516,330) 138,722,027 151,065,734 164,946,073 171,674,417 183,583,831 550,691 589,126 424,983 414,822 1,047,564 3 3,100 1 7,876 573,500 5 ,265 2 ,561 865,732 907,830 1,189,317 2,511,617 1,224,908 1,341,011 149,079 150,236 1,188,709 516,330

2,790,534 1,663,911 2,338,036 4,120,413 2,791,363 141,512,561 152,729,645 167,284,109 175,794,830 186,375,194 2,424,340 12,818,970 31,744,997 37,526,137 30,525,362 5,333,398 7,325,061 8,412,276 13,853,462 6,946,810 $ 7,757,738 $ 20,144,031 $ 40,157,273 $ 51,379,599 $ 37,472,172 181

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

GENERAL TAX REVENUES - GOVERNMENTAL ACTIVITIES

LAST TEN FISCAL YEARS

Table 2-b 2014 2015 2016 2017 2018 Local Property Taxes $ 6 4,712,683 $ 6 4,672,721 $ 65,185,546 $ 66,487,004 $ 67,736,404 Local Income Tax 4 0,899,804 4 4,643,870 47,928,725 48,624,679 55,211,695 Other Local Taxes 6 ,511,138 7 ,505,016 7,896,864 8,187,348 8,496,580 Total Taxes - Governmental Activities $ 1 12,123,625 $ 1 16,821,607 $ 121,011,135 $ 123,299,031 $ 131,444,679 2019 2020 2021 2022 2023

Local Property Taxes $ 7 0,670,569 $ 7 1,874,566 $ 74,474,109 $ 76,017,204 $ 78,022,772 Local Income Tax 5 7,728,293 6 7,698,447 73,458,519 78,881,170 83,439,604 Other Local Taxes 8 ,886,688 9 ,303,464 15,754,906 15,164,554 13,208,003 Total Taxes - Governmental Activities $ 1 37,285,550 $ 1 48,876,477 $ 163,687,534 $ 170,062,928 $ 174,670,379

NOTES:

* Government-wide general tax revenue information is reported on the accrual basis of accounting.

* Source: Statement of Activities.

182

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

Table 3 2014 2015 2016 2017 2018 General Fund:

Nonspendable $ 480,385 $ 687,777 $ 586,481 $ 754,921 $ 1 ,001,610 Restricted 8,375,368 8,681,112 9,002,389 10,626,394 1 0,999,800 Committed 1,157,360 2,000,000 3,000,000 4,000,000 5 ,027,897 Assigned 1,284,875 2,034,875 1,926,782 1,998,415 1 ,483,827 Unassigned 7,123,519 7,793,085 8,468,591 8,830,530 1 1,142,331 Total General Fund 18,421,507 21,196,849 22,984,243 26,210,260 2 9,655,465 All Other Governmental Funds:

Nonspendable 5,470,608 5,919,048 6,146,072 7,552,462 7 ,583,553 Restricted 21,824,970 17,794,372 21,316,088 8,900,465 6 ,815,341 Committed 4,097,033 4,209,177 3,425,701 13,447,283 1 5,202,215 Assigned 25,939,319 23,093,224 18,029,073 16,045,167 1 9,618,643 Unassigned (115,800) (108,185) (115,129) (53,665) (48,758) Total All Other Governmental Funds 57,216,130 50,907,636 48,801,805 45,891,712 4 9,170,994

Total All Governmental Funds $ 75,637,637 $ 72,104,485 $ 71,786,048 $ 72,101,972 $ 7 8,826,459 2019 2020 2021 2022 2023 General Fund:

Nonspendable $ 1,616,447 $ 2,400,664 $ 5,751,694 $ 92,744 $ 2 42,876 Restricted 14,361,899 14,711,547 16,182,014 17,838,136 1 9,996,347 Committed 6,000,000 6,998,256 7,621,618 8,399,587 9 ,069,982 Assigned 1,224,503 1,099,170 1,525,829 1,500,000 - Unassigned 11,856,474 15,874,992 19,340,107 32,142,920 3 9,494,554 Total General Fund 35,059,323 41,084,629 50,421,262 59,973,387 6 8,803,759 All Other Governmental Funds:

Nonspendable - - - 1,327,375 1 ,274,659 Restricted 12,598,139 15,121,784 17,919,423 22,270,920 1 7,607,427 Committed 18,514,079 21,296,829 25,457,920 27,010,544 2 8,987,607 Assigned 23,573,581 23,721,935 36,026,980 44,073,399 4 9,351,449 Unassigned (28,164) (24,133) (19,649) - - Total All Other Governmental Funds 54,657,635 60,116,415 79,384,674 94,682,238 9 7,221,142 Total All Governmental Funds $ 89,716,958 $ 101,201,044 $ 129,805,936 $ 154,655,625 $ 1 66,024,901

NOTES:

* Fund balance information for governmental funds is reported on the modified accrual basis of accounting.

* Source: Balance Sheet, Governmental Funds.

183

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

Table 4 2014 2015 2016 2017 2018 Revenues Taxes Local Property Taxes $ 64,701,622 $ 64,672,292 $ 64,946,443 $ 66,501,901 $ 67,944,730 Local Income Taxes 40,326,921 42,889,715 4 6,424,552 48,578,044 5 1,834,189 Other Local Taxes 6,511,137 7 ,505,016 7 ,896,865 8 ,187,348 8 ,496,580 State Shared Taxes 749,366 5 57,834 6 23,256 7 08,566 8 36,677 Licenses and Permits 1,080,891 1 ,062,917 1 ,078,144 1 ,123,072 1 ,167,444

Intergovernmental 5,588,984 4 ,030,576 4 ,696,561 3 ,987,308 7 ,539,052 Bond Interest Reimbursement - Build America Bond 383,777 3 75,323 3 64,799 3 50,254 3 34,858 Charges for Current Services 5,357,919 4 ,251,835 4 ,617,730 5 ,114,605 5 ,298,701 Fines and Forfeitures 141,615 1 82,160 2 50,110 2 11,102 2 58,226 Capital Contributions - Developer 102,316 - - - - Investment Income 95,286 94,092 1 74,691 4 44,063 9 78,955

Donations 39,055 41,391 45,773 60,217 57,635 Miscellaneous 877,629 1 ,076,893 9 49,045 2 ,065,465 6 30,895 Total Revenues 125,956,518 126,740,044 132,067,969 137,331,945 145,377,942 Expenditures Current General Government (1) 10,649,489 8 ,833,255 9 ,817,062 1 0,382,078 1 0,640,065 Public Safety 22,266,458 23,133,608 2 3,523,103 23,866,030 2 5,049,431 Public Works 9,967,363 1 2,041,969 1 5,080,454 1 5,506,684 1 5,235,104

Parks and Recreation - - - - - Health & Social Services 5,505,626 5 ,425,002 5 ,827,938 5 ,981,620 6 ,100,594 Education & Library 61,063,194 6 7,116,408 6 2,405,143 60,950,845 6 4,117,236 Conservation of Natural Resources 2,363,254 5 65,289 1 ,744,260 5 65,938 2 ,577,735 Economic/Community Development 1,306,516 1 ,616,784 3 ,188,928 1 ,710,899 2 ,433,171 Miscellaneous 3,202,417 3 ,535,585 4 ,766,722 4 ,185,652 5 ,348,568

Capital Outlay 8,669,375 8 ,733,509 1 1,050,384 1 4,591,632 1 2,311,551 Debt Service Principal 7,210,561 7 ,444,611 7 ,667,316 8 ,074,013 7 ,149,537 Debt Issuance Costs 196,870 4 03,572 2 18,799 1 96,150 2 29,894 Interest and Fiscal Charges 3,501,230 3 ,846,823 3 ,696,719 4 ,104,254 4 ,280,553 Total Expenditures 135,902,353 142,696,415 148,986,828 150,115,795 155,473,439 Excess (Deficiency) of Revenues over (under) Expenditures (9,945,835) (15,956,371) (16,918,859) (12,783,850) (10,095,497)

Other Financing Sources (Uses) Issuance of Debt 22,405,542 2 5,384,493 1 5,484,639 1 2,775,926 1 6,000,000 Other Financing Use - Proceeds of Refunding Bonds - - 8 ,042,773 - - Bond Premiums 1,118,097 1 ,901,240 1 ,650,448 6 18,681 9 08,973 Payments to Bond Refunding Agent - (14,881,834) - - - Other Financing Use - Debt Service - Principal - - (8,446,336) - - Proceeds of Capital Asset Disposals 458,759 1 ,331,608 18,100 55,189 54,097

Insurance Proceeds 61,942 57,916 1 53,534 12,241 39,940 Leases - - - - - Subscription-Based IT Arrangements - - - - - Transfers In 5,861,261 5 ,079,641 9 ,941,051 6 ,331,482 8 ,220,201 Transfers Out (6,450,998) (6,449,845) (10,243,787) (6,693,745) (8,403,227) Total Other Financing Sources (Uses) 23,454,603 1 2,423,219 1 6,600,422 1 3,099,774 1 6,819,984 Net Increase (Decrease) in Fund Balances $ 13,508,768 $ (3,533,152) $ (318,437) $ 3 15,924 $ 6 ,724,487

Debt service as a percentage of non-capital expenditures (2, 3) 8.44% 8.43% 8.16% 8.99% 8.00%

NOTES:

* Governmental fund information is reported on the modified accrual basis of accounting.

* Source: Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds

and the Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities.

(1) For all fiscal years, "General Government" includes amounts previously classified as "Intergovernmental" and/or "Contingency."

(2) Only the principal and interest components of debt service expenditures are included in the calculation of the ratio of total debt service expenditures to noncapital expenditures.

(3) Noncapital expenditures represents Total Expenditures above, less the Net Increase in Capital Assets from the Reconciliation between the Government-Wide Statement of Activities

and the Statement of Revenues, Expenditures, and Changes in Fund Balance. Only the assets acquired (not included assets transferred or donated) from the reconciliation are used in the calculation.

184

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

Table 4

(CONTINUED)

2019 2020 2021 2022 2023 $ 70,615,293 $ 71,682,389 $ 74,769,217 $ 75,943,263 $ 78,062,336 5 5,282,162 61,547,651 6 7,985,531 71,002,615 7 9,467,361 8 ,886,688 9 ,303,464 1 5,754,906 15,164,554 1 3,208,003 1 ,171,668 1 ,192,293 1 ,286,374 1 ,692,747 1 ,352,592 1 ,224,381 1 ,083,317 1 ,461,286 1 ,656,112 1 ,417,096 8 ,284,699 9 ,506,419 1 8,705,791 16,927,224 1 4,889,923 3 19,362 - - - - 5 ,088,123 5 ,320,465 8 ,789,033 8 ,258,386 7 ,454,195

1 92,975 1 33,015 1 41,180 2 55,955 1 74,002

- - - - -

1 ,772,464 1 ,393,017 2 39,908 4 62,588 6 ,448,944 31,084 1 43,375 5,780 65,052 20,481 9 79,201 9 00,976 1 ,073,180 1 ,801,868 1 ,628,246 153,848,100 162,206,381 190,212,186 193,230,364 204,123,179 1 0,542,151 1 0,610,554 1 3,487,519 1 3,368,832 1 5,890,722 2 4,411,320 2 7,648,023 2 9,314,405 3 2,933,956 3 8,135,440 1 6,163,026 1 2,749,864 1 2,223,767 1 4,291,677 1 9,545,607

- 6 ,995,840 5 ,257,527 5 ,578,791 6 ,049,686

6 ,209,377 6 ,660,677 6 ,731,938 6 ,389,428 7 ,909,483 6 4,473,922 6 8,796,024 6 8,621,741 6 8,947,327 6 9,757,478 2 ,717,738 1 ,475,572 3 ,672,847 2 ,411,769 3 ,457,656 1 ,638,265 2 ,107,676 5 ,233,618 2 ,997,250 3 ,017,040 5 ,729,955 5 ,308,680 6 ,834,217 6 ,981,356 8 ,921,419 9 ,323,882 4 ,963,004 1 2,790,600 9 ,877,764 8 ,603,952 7 ,855,820 8 ,624,604 7 ,343,425 7 ,775,190 8 ,696,773 2 11,447 3 16,027 2 49,479 4 39,157 29,851

4 ,586,387 4 ,676,955 4 ,492,461 4 ,415,584 4 ,525,460 153,863,290 160,933,500 176,253,544 176,408,081 194,540,567 (15,190) 1 ,272,881 1 3,958,642 1 6,822,283 9 ,582,612 1 1,000,000 9 ,000,000 1 3,000,000 7 ,800,000 -

- 1 4,682,184 1 0,835,995 - -

1 ,011,998 3 ,654,843 3 ,814,696 4 92,106 -

- - - - -

- (17,043,453) (12,970,537) - -

2 31,588 30,949 41,099 63,850 61,520 3,114 35,761 1 02,429 35,208 1 03,030

- - - - 6 38,500

- - - - 1 ,503,069

1 2,588,897 9 ,690,474 2 0,469,607 2 3,952,703 2 7,982,455 (13,929,908) (9,839,553) (20,647,039) (24,316,461) (28,501,910) 1 0,905,689 1 0,211,205 1 4,646,250 8 ,027,406 1 ,786,664 $ 10,890,499 $ 11,484,086 $ 28,604,892 $ 24,849,689 $ 11,369,276 8.61% 8.53% 7.26% 7.38% 7.26% 185

QUEEN ANNE'S COUNTY, MARYLAND

REVENUE CAPACITY

ASSESSED VALUE OF TAXABLE AND EXEMPT PROPERTY

LAST TEN FISCAL YEARS

Table 5 Real Property (2) Personal Property Total Total Total Public Utility Taxable Taxable and Fiscal Commercial Residential (1) Total Direct Assessed Assessed Exempt Exempt Year Assessed Value Assessed Value Assessed Value Tax Rate (3) Value (2) (4) Value Property Property 2014 $ 1,540,562,905 $ 5,935,284,963 $ 7 ,475,847,868 $ 0.8471 $ 64,411,900 $ 7,540,259,768 $ 696,880,673 $ 8 ,237,140,441 2015 1,526,533,795 5,971,094,589 7 ,497,628,384 0.8471 71,076,850 7,568,705,234 708,231,797 8 ,276,937,031

2016 1,536,236,637 6,015,729,665 7 ,551,966,302 0.8471 74,544,230 7,626,510,532 713,843,531 8 ,340,354,063 2017 1,578,390,091 6,136,189,107 7 ,714,579,198 0.8471 77,685,020 7,792,264,218 771,576,578 8 ,563,840,796 2018 1,619,626,376 6,277,865,272 7 ,897,491,648 0.8471 76,903,490 7,974,395,138 784,345,727 8 ,758,740,865 2019 1,668,339,027 6,485,471,694 8 ,153,810,721 0.8471 110,703,740 8,264,514,461 810,049,666 9 ,074,564,127

2020 1,796,512,410 6,587,063,708 8 ,383,576,118 0.8471 103,282,520 8,486,858,638 839,013,301 9 ,325,871,939 2021 1,810,616,428 6,789,270,644 8 ,599,887,072 0.8471 115,005,450 8,714,892,522 860,398,332 9 ,575,290,854 2022 1,814,529,551 6,984,923,499 8 ,799,453,050 0.8471 122,167,420 8,921,620,470 879,391,068 9 ,801,011,538 2023 1,869,310,608 7,334,750,709 9 ,204,061,317 0.8300 131,489,970 9,335,551,287 887,420,959 1 0,222,972,246

NOTES:

* Tax exempt property is included for purposes of calculating total assessed value, which is used on Table 12-a.

(1) Residential real property includes single-family homes, townhouses, condominiums, and apartment dwellings. The assessed value shown

above has been reduced for the Homestead Credit assessment.

(2) Real property and personal property assessments are done every three years and every year, respectively, by the State

Department of Assessments and Taxation at 100% of estimated fair value.

(3) See Table 6-a for real property direct tax rates. Tax Rates are applied per $100 of assessed value.

(4) The personal property tax rate for Queen Anne's County is zero.

Source: State of Maryland, Department of Assessments and Taxation.

186 187

QUEEN ANNE'S COUNTY, MARYLAND

REVENUE CAPACITY

REAL PROPERTY TAX RATES - COUNTY DIRECT RATE

LAST TEN FISCAL YEARS

Table 6-a County Fiscal Direct Year Rate (1) 2014 $ 0 .8471 2015 0 .8471 2016 0 .8471 2017 0 .8471 2018 0 .8471 2019 0 .8471 2020 0 .8471 2021 0 .8471 2022 0 .8471 2023 0 .8300

NOTES:

* No discounts are allowed.

* Taxes are levied as of July 1, are due by September 30, and become delinquent October 1.

* Owner occupied properties may elect to pay on an annual basis. If no election is made,

taxes are paid on a semi-annual basis with payment due by September 30 and December 31

* Non-owner occupied properties must pay on an annual basis.

* Interest at one percent per month is assessed on delinquent tax bills.

* Revised tax bills based upon certifications from the State received after September 1

may be paid within thirty days without interest.

* Delinquent taxes on real property are collected by sale.

* Costs of tax sale, which vary, are added to the redemption.

* Tax sale date: Third Tuesday in May.

* The personal property tax rate for Queen Anne's County is zero.

(1) Tax Rates are applied per $100 of assessed value.

188

QUEEN ANNE'S COUNTY, MARYLAND

REVENUE CAPACITY

REAL PROPERTY TAX RATES - COUNTY SPECIAL TAXING DISTRICTS

LAST TEN FISCAL YEARS

Table 6-b Kent Narrows Commercial Management Fiscal and Waterfront Year Improvement District 2014 $ 0 .0600 2015 0 .0600 2016 0 .0600 2017 0 .0600 2018 0 .0600 2019 0 .0600 2020 0 .0600 2021 0 .0600 2022 0 .0600 2023 0 .6000

NOTES:

* Tax rates are per $100 of assessed value.

* The personal property tax rate for Queen Anne's County is zero.

189

QUEEN ANNE'S COUNTY, MARYLAND

REVENUE CAPACITY

REAL PROPERTY TAX RATES - OVERLAPPING GOVERNMENTS - TOWNS

LAST TEN FISCAL YEARS

Table 6-c Fiscal Town of Town of Town of Town of Town of Year Centreville Barclay Church Hill Millington Queen Anne 2014 $ 0 .3800 $ 0 .2000 $ 0 .3400 $ 0 .2800 $ 0 .1800 2015 0 .3800 0 .2000 0 .3400 0 .2800 0 .1800 2016 0 .3800 0 .2000 0 .3400 0 .2800 0 .1800 2017 0 .4100 0 .2000 0 .3400 0 .2800 0 .1800 2018 0 .4050 0 .2000 0 .3400 0 .2800 0 .1800 2019 0 .4050 0 .2000 0 .3400 0 .2800 0 .1800 2020 0 .4050 0 .2000 0 .3400 0 .2800 0 .1800

2021 0 .4050 0 .2000 0 .3400 0 .2774 0 .1800 2022 0 .5350 0 .2000 0 .3400 0 .2909 0 .1800 2023 0 .5350 0 .2000 0 .3400 0 .2920 0 .1800

NOTES:

* Tax rates are per $100 of assessed value.

* The personal property tax rate for Queen Anne's County is zero.

* Taxes collected by the County for other fiscal units, including overlapping governments, are remitted

based on actual collections.

190

QUEEN ANNE'S COUNTY, MARYLAND

REVENUE CAPACITY

REAL PROPERTY TAX RATES - OVERLAPPING GOVERNMENTS - TOWNS

LAST TEN FISCAL YEARS

Table 6-c

(CONTINUED)

Town of Town of Town of Queenstown Sudlersville Templeville $ 0 .1890 $ 0.1670 $ 0 .3600 0 .1895 0.1670 0 .3600 0 .1850 0.1670 0 .3600 0 .1810 0.1670 0 .5788 0 .1773 0.1670 0 .3600 0 .1726 0.1670 0 .3600 0 .1744 0.1670 0 .3600 0 .1867 0.1670 0 .3600 0 .2026 0.1670 0 .3600 0 .2217 0.1670 0 .3600 191

QUEEN ANNE'S COUNTY, MARYLAND

REVENUE CAPACITY

TEN HIGHEST COMMERCIAL PROPERTY TAXPAYERS

CURRENT FISCAL YEAR AND NINE YEARS AGO

Table 7 For the Fiscal Year Ended June 30, 2023 Ratio:

Taxpayer Base to Total Assessable Base Assessable Base Second Horizon Group Limited Partnership $ 41,474,067 0.44 % KRM - Chesapeake LLC 22,596,900 0.24 Bay Bridge Holding Company LLC 17,556,103 0.19 Chesapeake Bay Beach Club LLC 16,384,900 0.18 Maryland General Land Co LLC 15,901,300 0.17 Anne Arundel Real Estate Holding Co 15,762,370 0.17 SHM Narrows Point LLC 15,214,867 0.16 Shore Health System INC 13,904,433 0.15

Kent Narrows Marine LLC 13,060,367 0.14 Kent Towne Market LLC 10,752,367 0.12 Total $ 182,607,674 1.96 % Total Assessable Base $ 9,335,551,287 100.00 % For the Fiscal Year Ended June 30, 2014 Ratio:

Taxpayer Base to Total Assessable Base Assessable Base Second Horizon Group Limited Partnership $ 57,653,434 0.76 % KRM Development Corporation 35,775,300 0.47 Great American Life Insurance Company 15,721,000 0.21 Beach Harbor Campers Cooperative Inc 12,582,700 0.17 White's Heritage LLC 11,752,939 0.16 K Hovnanian at Kent Island LLC 11,500,000 0.15 Mears Point Association 10,783,567 0.14 TC Shopping Center Limited Parnters 10,288,967 0.14

Anne Arundel Real Estate Holding Co 10,000,967 0.13 Shore Health System Inc 9,975,900 0.13 Total $ 186,034,774 2.46 % Total Assessable Base $ 7,540,259,768 1 00.00 % Source: State of Maryland Department of Assessments and Taxation 192

QUEEN ANNE'S COUNTY, MARYLAND

REVENUE CAPACITY

PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS

Table 8 Collected within the Taxes Levied Fiscal Year of the Levy Collections in Total Collections to Date Fiscal for the Percentage of Subsequent Percentage of Year Fiscal Year Amount Original Levy Years Amount Original Levy 2014 $ 63,184,321 $ 6 2,834,349 99.45% $ 349,972 $ 63,184,321 100.00% 2015 63,338,629 6 3,231,601 99.83% 107,028 6 3,338,629 100.00% 2016 63,799,184 6 3,647,404 99.76% 151,780 6 3,799,184 100.00%

2017 65,217,648 6 5,107,115 99.83% 110,533 6 5,217,648 100.00% 2018 66,768,776 6 6,721,619 99.93% 47,157 6 6,768,776 100.00% 2019 68,887,556 6 8,778,389 99.84% 73,219 6 8,851,608 99.95% 2020 70,825,936 7 0,375,695 99.36% 409,693 7 0,785,388 99.94% 2021 72,635,124 7 2,627,467 99.99% 2,734 7 2,630,201 99.99% 2022 74,882,965 7 4,789,167 99.87% 63,111 7 4,852,278 99.96% 2023 77,663,358 7 7,608,873 99.93% - 7 7,608,873 99.93%

NOTES:

* This table includes data for all property taxes billed applicable to all funds for Queen Anne's County, Maryland to include General,

Special Revenue, and Enterprise Funds. Property taxes billed for the State of Maryland and various municipalities are excluded.

193

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS

Table 9 Governmental Activities General Subscription-Based Total Fiscal Obligation Notes Information Technology Governmental Year Bonds Payable Leases Arrangements Activities 2014 $ 107,883,563 $ 958,156 $ - $ - $ 1 08,841,719 2015 112,060,053 784,785 - - 1 12,844,838 2016 118,977,909 1,913,199 - - 1 20,891,108 2017 123,519,157 1,698,425 - - 1 25,217,582 2018 132,567,304 1,417,461 - - 1 33,984,765

2019 135,985,079 1,098,323 - - 1 37,083,402 2020 136,513,411 775,589 - - 1 37,289,000 2021 142,970,963 703,773 - - 1 43,674,736 2022 142,140,969 655,957 - - 1 42,796,926 2023 132,251,652 608,141 614,668 1,178,880 1 34,653,341 Business-type Activities General Subscription-Based Total Total Fiscal Obligation Notes Information Technology Business-type Primary Year Bonds Payable Leases Arrangements Activities Government

2014 $ 2,053,736 $ 12,584,475 $ - $ - $ 1 4,638,211 $ 1 4,638,211 2015 3,540,295 11,388,918 - - 14,929,213 1 4,929,213 2016 3,520,859 10,471,639 - - 13,992,498 1 3,992,498 2017 3,217,479 16,296,744 - - 19,514,223 1 9,514,223 2018 2,976,195 25,484,821 - - 28,461,016 2 8,461,016 2019 2,725,011 29,419,756 - - 32,144,767 3 2,144,767 2020 2,475,881 31,932,369 - - 34,408,250 3 4,408,250 2021 2,337,041 34,432,935 - - 36,769,976 3 6,769,976

2022 2,362,308 33,291,256 39,225 - 35,692,789 3 5,692,789 2023 2,206,362 35,322,576 144,381 - 37,673,319 3 8,852,199 Ratios Debt to Total Outstanding Fiscal Personal Debt per Year Income (1) Capita (1) 2014 0.83% $ 3 01 2015 0.81% 3 06 2016 7.24% 2 ,780 2017 7.64% 2 ,960 2018 1.47% 5 82 2019 1.56% 6 33 2020 1.46% 6 54 2021 1.57% 7 05 2022 1.53% 6 84 2023 1.51% 7 45

NOTES:

(1) See Table 14 for personal income and population data, which are used in calculating these ratios.

194

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

RATIOS OF GENERAL BONDED DEBT OUTSTANDING

LAST TEN FISCAL YEARS

Table 10 Percentage of Fiscal General Total Taxable Per Year Bonded Debt (1) Assessable Base (2) Capita (3) 2014 $ 109,937,299 1.46% $ 2,260 2015 115,600,348 1.53% 2,369 2016 122,498,768 1.61% 2,525 2017 126,736,636 1.63% 2,592 2018 135,543,499 1.70% 2,772 2019 138,710,090 1.68% 2,733 2020 138,989,292 1.64% 2,643 2021 145,308,004 1.67% 2,785 2022 144,503,277 1.62% 2,769 2023 134,458,014 1.44% 2,600

NOTES:

* General Bonded Debt includes all general obligation debt, regardless of

purpose or repayment source, and other bonded debt financed with general government resources. Other debt is excluded because it is not in the form of bonds.

(1) General Bonded Debt is comprised of both governmental and businesstype activities from Table 9.

(2) See Table 5 for taxable assessable base.

(3) See Table 14 for population data.

195

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF NET DIRECT AND OVERLAPPING DEBT

AS OF JUNE 30, 2023

Table 11 Name of Jurisdiction Gross Debt Queen Anne's County:

County Government Total Net Direct Debt (1) $ 134,653,341 Towns: (2) Centreville (100%) 12,879,539 Queenstown (100%) 4,878,513 Millington (100%) 1,040,000 Sudlersville (100%) (3) 300,000 Total Net Overlapping Debt 19,098,052 Total Net Direct and Overlapping Debt $ 1 53,751,393

NOTES:

(1) Net direct debt of the County includes Governmental Activities general obligation bonds, notes payable, leases, and

subscription-based information technology arrangements. See Table 9.

Overlapping debt is the debt of other governmental entities located within the County that is payable in whole or in part by taxpayers of the County.

(2) Entities are located wholly within Queen Anne's County. Debt information reported by municipalities.

(3) FY23 nor FY22 gross debt could not be obtained. The amount being reported is the amount confirmed from FY21.

196 197

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LEGAL DEBT MARGIN

LAST TEN FISCAL YEARS

Table 12-a 2014 2015 2016 2017 2018 Computation of Legal Debt Margin - for Queen Anne's County Other than Debt related to the Sanitary District:

Authorized debt limit under Title 5 (Subtitle 4) (1) $ 8 ,000,000 $ 8 ,000,000 $ 8 ,000,000 $ 8 ,000,000 $ 8 ,000,000 Authorized bonded debt under specific public laws Enterprise Funds, excluding Sanitary District (4) 2 ,053,736 3 ,540,295 3 ,520,859 3 ,217,479 2 ,976,195 General Obligation Debt (4) 1 07,883,563 1 12,060,053 1 18,977,909 1 23,519,157 1 32,567,304 Subtotal 1 09,937,299 1 15,600,348 1 22,498,768 1 26,736,636 1 35,543,499

Total authorized debt under Title 5 and specific public laws 1 17,937,299 1 23,600,348 1 30,498,768 1 34,736,636 1 43,543,499 LESS Outstanding bonds, notes payable, and capital leases (5) 1 4,638,211 1 4,929,213 1 34,883,606 1 44,731,805 1 62,445,781 Less: Sanitary District debt (4) 1 2,584,475 1 1,388,918 1 0,471,639 1 6,296,744 2 5,484,821 Subtotal 2 ,053,736 3 ,540,295 1 24,411,967 1 28,435,061 1 36,960,960

Legal Debt Margin - Other than the Sanitary District $ 1 15,883,563 $ 1 20,060,053 $ 6 ,086,801 $ 6 ,301,575 $ 6 ,582,539 Debt related to the Sanitary District Proprietary Fund:

Total taxable assessed value (3) $ 7 ,540,259,768 $ 7 ,568,705,234 $ 7 ,626,510,532 $ 7 ,792,264,218 $ 7 ,974,395,138 Plus exempt property (3) 6 96,880,673 7 08,231,797 7 13,843,531 7 71,576,578 7 84,345,727 Total assessed value $ 8 ,237,140,441 $ 8 ,276,937,031 $ 8 ,340,354,063 $ 8 ,563,840,796 $ 8 ,758,740,865 Debt Limit - 6% of total assessed value (2) $ 4 94,228,426 $ 4 96,616,222 $ 5 00,421,244 $ 5 13,830,448 $ 5 25,524,452

LESS Sanitary District 1 2,584,475 1 1,388,918 1 0,471,639 1 6,296,744 2 5,484,821 Less: Restricted Cash and Investments in the Debt Service Fund available for payment of principal 2 ,763,304 2 ,695,383 1 ,120,775 9 47,445 1 ,060,045 9 ,821,171 8 ,693,535 9 ,350,864 1 5,349,299 2 4,424,776 Legal Debt Margin - Sanitary District $ 4 84,407,255 $ 4 87,922,687 $ 4 91,070,380 $ 4 98,481,149 $ 5 01,099,676

NOTES:

(1) Title 5, Subtitle 4 (1), of the Code of Public Local Laws of Queen Anne's County authorizes the County to borrow up to $8,000,000 for

general operating and capital improvement expenditures. This authority is in addition to any bonded debt authorized under specific public local laws.

(2) Title 24, Subtitle 1, Section 24-146(A) of the Code of Public Local Laws of Queen Anne's County authorizes the County to borrow an amount not to

exceed 6% of the total value of property assessed. The proceeds of such borrowings must be used for sewer and water system construction payments.

(3) See Table 5.

(4) See Note 9, Section B.

(5) See Note 9.

198

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LEGAL DEBT MARGIN

LAST TEN FISCAL YEARS

Table 12-a

(CONTINUED)

2019 2020 2021 2022 2023 $ 8 ,000,000 $ 8 ,000,000 $ 8,000,000 $ 8,000,000 $ 8,000,000 2 ,725,011 2 ,475,881 2,337,041 2,362,308 2,206,362 1 35,985,079 1 36,513,411 142,970,963 142,140,969 132,251,652 1 38,710,090 1 38,989,292 145,308,004 144,503,277 134,458,014 1 46,710,090 1 46,989,292 153,308,004 152,503,277 142,458,014 1 69,228,169 1 71,697,250 180,444,712 35,692,789 38,852,199 2 9,419,756 3 1,932,369 34,432,935 33,291,256 35,322,576

1 39,808,413 1 39,764,881 146,011,777 2,401,533 3,529,623 $ 6 ,901,677 $ 7 ,224,411 $ 7,296,227 $ 150,101,744 $ 138,928,391 $ 8 ,264,514,461 $ 8 ,486,858,638 $ 8,714,892,522 $ 8,921,620,470 $ 9,335,551,287 8 10,049,666 8 39,013,301 860,398,332 879,391,068 887,420,959 $ 9 ,074,564,127 $ 9 ,325,871,939 $ 9,575,290,854 $ 9,801,011,538 $ 10,222,972,246 $ 5 44,473,848 $ 5 59,552,316 $ 574,517,451 $ 588,060,692 $ 613,378,335

2 9,419,756 3 1,932,369 34,432,935 33,291,256 35,322,576 1 ,259,440 2 ,031,867 2,684,988 1,913,102 1,703,815 2 8,160,316 2 9,900,502 31,747,947 31,378,154 33,618,761 $ 5 16,313,532 $ 5 29,651,814 $ 542,769,504 $ 556,682,538 $ 579,759,574 199

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LOCAL DEBT LIMIT

LAST TEN FISCAL YEARS

Table 12-b 2014 2015 2016 2017 2018 Computation of Local Debt Limit, as Authorized under Article 95, Section 22F of the Annotated Code of Maryland and per criteria established by Queen Anne's County Resolution No. 13-04, as adopted May 2013.

CALCULATION PER FIRST FINANCIAL CRITERIA:

The sum of all outstanding and new general obligation and/or bonded debt is 2.5% or less of the total taxable assessed base.

Total Taxable Assessed Base (1) $ 7,540,259,768 $ 7,568,705,234 $ 7,626,510,532 $ 7,792,264,218 $ 7 ,974,395,138 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% of Total Taxable Assessed Base $ 188,506,494 $ 189,217,631 $ 190,662,763 $ 194,806,605 $ 1 99,359,878 LESS Outstanding and New General Obligation Debt applicable to limit (2) (3) Enterprise Funds' Debt - Bonds $ 2,053,736 $ 3 ,540,295 $ 3,520,859 $ 3,217,479 $ 2,976,195

General Obligation Debt - Bonds and Notes 108,841,719 112,844,838 120,891,108 125,217,582 133,984,765 Total Outstanding and New General Obligation Debt $ 110,895,455 $ 116,385,133 $ 124,411,967 $ 128,435,061 $ 1 36,960,960 2.5% of Total Taxable Assessed Base in Excess of Total Outstanding and New General Obligation Debt $ 77,611,039 $ 72,832,498 $ 66,250,796 $ 66,371,544 $ 62,398,918

CALCULATION PER SECOND FINANCIAL CRITERIA:

The sum of all outstanding and new general obligation and/or bonded debt is $3,000 or less per capita.

Total County Population (4) 48,650 48,804 48,517 48,904 48,904 $3,000 Per Capita $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 145,950,000 $ 146,412,000 $ 145,551,000 $ 146,712,000 $ 1 46,712,000 LESS Outstanding and New General Obligation Debt (1) $ 110,895,455 $ 116,385,133 $ 124,411,967 $ 128,435,061 $ 1 36,960,960 $3,000 Per Capita in Excess of Total Outstanding and New General Obligation Debt $ 35,054,545 $ 30,026,867 $ 21,139,033 $ 18,276,939 $ 9,751,040

NOTES:

(1) See Table 5 - Total Taxable Assessed Value.

(2) See Note 9 A - Changes in Noncurrent Liabilities.

(3) General Obligation Debt includes debt relating to the Sanitary District, because such debt is backed by the full faith

and credit of the County, but excludes all capital leases, which are collateralized by the equipment purchased with such leases.

(4) See Table 14 - Population.

In May, 2013, as described in Note 9 E, Queen Anne’s County adopted Resolution No. 13-04, thereby continuing a local debt policy in compliance with Article 95, Section 22F of the Annotated Code of Maryland.

This policy requires that the County’s Director of Budget and Finance to take the following steps:

(a) prepare a six-year capital project plan each year;

(b) propose an amount to be transferred from the General Fund operating balance to the General Capital Projects

Fund to serve as pay-as-you-go funding in the latter Fund, in order to lessen the need for future County debt;

(c) limit the County’s non-bonded indebtedness to $8.0 million for general operating expenses or capital

improvements;

(d) certify that the sum of outstanding general bonded debt and any new general obligation debt is 2.5% or less

of the total taxable assessed base and is $3,000 or less per capita; and This policy also stipulates that although there is some flexibility as to the acceptable percentage of debt service to general fund expenditures, and no absolute limit has been established by the rating agencies or the Government Finance Officers Association, anything above 12% of total general fund expenditures would be a cause to carefully monitor debt service.

200

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LOCAL DEBT LIMIT

LAST TEN FISCAL YEARS

Table 12-b

(CONTINUED)

2019 2020 2021 2022 2023 $ 8 ,264,514,461 $ 8 ,486,858,638 $ 8,714,892,522 $ 8,921,620,470 $ 9,335,551,287 2.5% 2.5% 2.5% 2.5% 2.5% $ 206,612,862 $ 212,171,466 $ 217,872,313 $ 223,040,512 $ 233,388,782 $ 2,725,011 $ 2,475,881 $ 2,337,041 $ 2,362,308 $ 2,206,362 137,083,402 137,289,000 143,674,736 142,796,926 132,859,793 $ 139,808,413 $ 139,764,881 $ 146,011,777 $ 145,159,234 $ 135,066,155 $ 66,804,449 $ 72,406,585 $ 71,860,536 $ 77,881,278 $ 98,322,627

50,750 52,597 52,177 52,177 51,711 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 152,250,000 $ 157,791,000 $ 156,531,000 $ 156,531,000 $ 155,133,000 $ 139,808,413 $ 139,764,881 $ 146,011,777 $ 145,159,234 $ 135,066,155 $ 12,441,587 $ 18,026,119 $ 10,519,223 $ 11,371,766 $ 20,066,845 201

QUEEN ANNE'S COUNTY, MARYLAND

DEMOGRAPHIC AND ECONOMIC INFORMATION

PRINCIPAL EMPLOYERS

CURRENT FISCAL YEAR AND NINE YEARS AGO

Table 13 For the Fiscal Year Ended June 30, 2023 Percentage of Total County Employer Employees Rank Employment Queen Anne's County Board of Education 9 78 1 6.77% Queen Anne's County Government 5 75 2 3.98% Paul Reed Smith Guitars 4 68 3 3.24% Chesapeake College 3 85 4 2.67% REEB Millwork 3 03 5 2.10% S.E.W. Friel 2 60 6 1.80% Food Lion 2 03 7 1.41% The Chesapeake Bay Beach Club 1 50 8 1.04% AZZ Enclosures 1 15 9 0.80%

Harris Seafood Company 1 25 10 0.87% Total 3 ,562 24.69% For the Fiscal Year Ended June 30, 2014 Percentage of Total County Employer Employees Rank Employment Queen Anne's County Board of Education 9 72 1 8.52% Chesapeake College 5 08 2 4.45% Queen Anne's County Government 4 29 3 3.76% S.E.W. Friel 2 75 4 2.41% Paul Reed Smith Guitars 2 49 5 2.18% Reeb Millwork 1 80 6 1.58% Cracker Barrel Old Country Store 1 70 7 1.49%

Fisherman's Inn 1 35 8 1.18% Genesis Healthcare/Corsica Hills Center 1 34 9 1.18% Federal Resources Supply 1 14 10 1.00% Total 3,166 27.76% Source: Queen Anne's County Economic Development Office; Table 15.

202

QUEEN ANNE'S COUNTY, MARYLAND

DEMOGRAPHIC AND ECONOMIC INFORMATION

DEMOGRAPHIC STATISTICS

LAST TEN FISCAL YEARS

Table 14 Average Total Registered Fiscal Personal Per Capita Unemployment Number of Year Population (1) Income (2) Income (3) Rate (3) Pupils (4) 2014 48,650 $ 1 ,771,687,050 $ 3 6,417 5.10% 7,720 2015 48,804 1 ,854,356,784 3 7,996 4.90% 7,752 2016 48,517 1 ,862,664,664 3 8,392 3.90% 7,738 2017 48,904 1 ,894,198,632 3 8,733 3.80% 7,799 2018 48,904 1 ,936,256,072 3 9,593 3.90% 7,768 2019 50,750 2 ,058,064,750 4 0,553 3.70% 7,767

2020 52,597 2 ,353,926,138 4 4,754 7.00% 7,705 2021 52,177 2 ,335,129,458 4 4,754 5.20% 7,351 2022 52,177 2 ,565,960,506 4 9,178 4.00% 7,418 2023 51,711 2 ,722,687,572 5 2,652 1.50% 7,539

NOTES:

(1) Source: Queen Anne's County Division of Land Use and Zoning

(2) Personal income derived by multiplying population by per capita income.

(3) Source: US Census Bureau and Maryland Department of Labor, Licensing, and Regulation - as of June.

(4) Source: Queen Anne's County Board of Education.

203

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

COUNTY GOVERNMENT EMPLOYEES - FULL-TIME EQUIVALENTS

LAST TEN FISCAL YEARS

Table 15 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Number of Exempt Employees 29 30 32 35 34 32 33 37 40 40 Number of Full Time Employees 393 416 431 439 450 479 484 496 462 533 Number of Part Time Employees (FTE) 7 3 3 4 3 3 2 2 2 2 Total County Government Employees 429 449 466 478 487 514 519 535 504 575

NOTES:

Source: Queen Anne's County Office of Budget and Finance 204

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

COUNTY GOVERNMENT EMPLOYEES - FULL-TIME ONLY BY FUNCTION

LAST TEN FISCAL YEARS

Table 16 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Governmental Activities:

General Government 82 77 81 83 8 7 76 75 78 79 83 92 Public Safety:

Police 56 58 58 59 6 1 62 69 71 70 65 72 Fire - Emergency Management Services 64 67 71 72 7 3 75 82 83 83 84 101 Detention Center 41 41 41 41 4 5 41 42 43 45 42 46 Animal Services 6 3 3 2 2 2 2 2 13 7 13 Public Works 51 54 58 61 5 9 75 80 77 75 68 77 Health 1 1 1 1 1 1 1 1 1 1 1 Social Services 32 36 38 42 4 1 39 39 39 41 41 40 Parks 27 29 39 42 4 4 43 46 52 51 43 53 Conservation of Natural Resources 4 4 3 4 4 4 4 4 4 3 3

Economic/Community Development 6 2 3 6 5 10 11 9 10 10 12 Total Governmental Activities 370 372 396 413 4 22 428 451 459 472 447 510 Business-Type Activities:

Sanitary District 45 46 46 46 4 8 51 55 53 56 50 60 Bay Bridge Airport 1 1 1 1 1 2 2 2 2 2 2 Golf 1 1 1 1 1 1 1 1 1 1 1 Public Landings 2 2 2 2 2 2 2 2 2 2 2 Total Business-Type Activities 49 50 50 50 5 2 56 60 58 61 55 65 Total Full-Time County Employees 419 422 446 463 4 74 484 511 517 533 502 575

NOTES:

- Only full-time County employees are represented in this table.

- Employees of the County's component units have been excluded from this table.

Source: Queen Anne's County Office of Budget and Finance 205

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

OPERATING INDICATORS BY FUNCTION

LAST TEN FISCAL YEARS

Table 17 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Governmental Activities:

General Government:

Planning & Zoning:

Number of commercial permits issued 51 52 50 47 55 30 49 91 63 83 Number of residential permits issued:

Single Family Permits 133 123 84 124 145 155 173 275 136 271 Multi Family Permits 12 - 1 29 - 37 41 62 32 2 Renovations and Additions Permits 327 270 303 323 339 359 317 343 203 357 Total residential permits issued 472 393 388 476 484 551 531 680 371 630 Public Safety:

Fire and Rescue:

Number of volunteer members 689 683 500 400 500 450 542 558 550 703 Police:

Uniformed Police Officers 61 64 64 64 68 69 71 71 73 77 Number of law violations:

Physical arrests 1,239 1,055 903 914 1,097 930 854 1,080 812 859 Traffic violations 6,514 6,030 8,002 7,183 12,384 10,474 9,705 11,142 7,447 9,859 Detention Center:

Detention Center Officers 41 41 39 38 42 41 41 42 41 43 Average yearly prison population 138 123 115 133 115 105 106 158 154 108 Public Works:

Wastewater Treated - Daily (mgd) 2.0 2.1 2.0 2.0 2.2 2.2 2.1 2.3 2.7 2.6 Education:

Number of Personnel Teachers 550 575 575 572 569 572 584 603 609 615 Administrators 41 40 40 38 37 37 37 36 38 43 Support 344 295 296 304 300 301 281 336 364 348 Other 37 34 34 34 34 32 7 7 7 5 Number of Students 7,720 7,752 7,738 7,799 7,768 7,767 7,705 7,351 7,418 7,539 Number of High School Graduates 605 589 532 550 552 521 590 561 535 534

NOTES:

Source: Various County departments.

206

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

CAPITAL ASSET STATISTICS BY FUNCTION

LAST TEN FISCAL YEARS

Table 18 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Governmental Activities:

Public Safety:

Fire and Rescue:

Number of volunteer stations 9 9 9 9 9 9 9 9 9 9 Equipment:

Engines 17 16 16 16 16 15 15 15 15 14 Tankers 8 8 8 8 8 7 9 9 9 9 Aerial Units 4 4 5 5 4 5 5 5 5 5 Rescue Units 6 7 6 6 5 5 7 7 7 7 Brush Units 7 7 7 7 7 7 8 8 8 8 Boats 6 6 6 6 3 4 4 4 4 4 Ambulance/Medic Units 13 14 12 13 13 11 13 12 13 11 Cars/Other 25 25 25 16 14 28 33 33 33 30 Police:

Number of Stations 1 1 1 1 1 1 1 1 1 1 Number of Vehicles Patrol 68 68 71 70 70 71 81 66 43 60 Other 12 15 10 9 14 14 12 29 67 30 Detention Center Capacity 148 148 148 148 148 148 148 148 148 148 Public Works:

County Maintained Roads and Streets Paved (miles) 543 543 540 549 549 549 550 550 549 549 Unpaved (miles) 12 12 12 12 12 12 12 12 12 12 County Owned Water and Wastewater Facilities Water Miles of Mains 62 62 64 65 67 68 69 70 71 71 Water Treatment Plants 11 11 11 11 11 11 11 11 11 11 Booster Stations 2 2 2 2 2 2 2 2 2 2 Wastewater Miles of Mains 121 122 128 136 151 153 154 160 162 162 Wastewater Treatment Plants 1 1 1 1 1 1 1 1 1 1

Wastewater Collection, Lift, and Pumping Stations 31 31 31 32 32 32 32 32 32 32 Education:

Number of Schools High Schools 2 2 2 2 2 2 2 2 2 2 Middle Schools 4 4 4 4 4 4 4 4 4 4 Elementary Schools 8 8 8 8 8 8 8 8 8 8 Parks and Recreation:

Parks 33 33 32 32 32 32 32 32 32 32 Park Acreage 2,915 2,915 2,915 2,915 3,085 3,085 3,085 3,085 3,085 3,085 Public Landings 20 20 19 20 20 20 20 20 20 20 Library:

Number of Libraries 3 3 3 3 3 3 3 3 3 3

NOTES:

Source: Various County departments.

207