Commissioner Workshop - FY27 Strategy and Goal Setting_111825.pdf

Exactly as extracted, unformatted — for checking against the original. The readable version is easier to read.

BUDGET WORKSHOP
FY2027 Strategy & Goal Setting
November 18, 2025
Commission Members:
Chris Corchiarino, Jim Moran, Phil Dumenil, Jack Wilson & Patrick McLaughlin
County Administrator: Todd R. Mohn, P.E.
Budget & Finance Office: Jeff Rank & Karen Rodgers

1. Welcome and Workshop Purpose
2. Economic & Revenue Outlook
AGENDA
3. Strategic Priorities Discussion
4. Fiscal Health & Key Budget Considerations
5. Communications & Public Engagement
6. Closing & Next Steps
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• Align on Fiscal Outlook
Fiscal Year 2027
Welcome &
• Strategic Priorities
Workshop
Purpose
• Potential Constraints
• Outreach Planning
3

Fiscal Year 2027
Revenue & Expenditure Outlook
Revenue Chart (Income & Property Tax Revenue,
FY2025–FY2027)
•Strong Growth Forecasted: Income and property tax
revenues are projected to rise steadily, reaching a
combined ~$195.6M by FY2027.
•Core Revenue Drivers: These two sources make up
over 85% of General Fund revenues, supported by
continued employment and property valuation growth.
•Stable Tax Rates: Growth is achieved without increases
to the income tax rate (3.2%) or property tax rate
($0.83 per $100 AV).
•Broad-Based Stability: Forecast reflects a balanced
reliance on wage growth and real estate value
appreciation.
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Fiscal Year 2027
Revenue & Expenditure Outlook
Expenditure Chart (Major Categories + Total Trend,
FY2025–FY2027)
•Education-Focused Investment: Board of Education
spending continues to be the largest category,
exceeding $89M by FY2027.
•Rising Compensation Costs: Salary and fringe benefits
projected to increase by over $6M across the three-year
period.
•Capital & Debt Obligations Growing: Transfers and
debt service costs increase notably, reflecting ongoing
infrastructure investments.
•Total Spending Trend: Overall General Fund
expenditures increase from $200.7M in FY2025 to
$226.5M in FY2027—about a 12.8% growth.
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Fiscal Year 2027
Economic Outlook
• Labor market remains relatively tight, but growth is modest —meaning
wage pressures may persist even in a slow-growth environment.
• Low unemployment (~3.6%) suggests limited slack in the workforce, which
increases risk of cost escalation (benefits, salaries) for local governments.
• Housing market is moderately strong (price +6%, permitting +8%) but may be
nearing a plateau—this affects property tax revenue growth potential,
especially in commuter/exurban counties like ours.
• Eastern Shore’s slower growth and structural constraints (industry
concentration, out-migration) mean the County should adopt conservative
revenue forecasts and remain cautious about relying solely on high growth
assumptions.
• Because the region is exposed to federal/state funding shifts (contractors,
grants, defense installations), a slowdown in federal hiring or increased
tariffs/trade pressures could ripple locally.
• Given inflation and tight labor markets, the cost side remains under
pressure—even if revenue growth is moderate. Budgeting should assume
moderate growth on the revenue side but elevated cost pressures on the
expenditure side.
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GENERAL FUND REVENUE FORECAST
FY2026
$0.01 of property tax rate = $1.1 million
0.1% of income tax rate = $2.9 million
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GENERAL FUND EXPENDITURE FORECAST
FY2026
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FUNDING PRESSURE POINTS
 Board of Education
 Additional $6.5m operating over FY26
 New/Renovated Centreville Middle School
 Unfunded mandates and legislative impacts
• HUR & Roads
• Does the County supplement state road capital projects?
• Beginning in FY28, allocations revert to fiscal 2024 distribution
• SDAT
• $215k in FY26 for office support (90% of cost)
• We may be expected to pay 100%
• Health Department
• Current funding is 54% State/45% County, MACO advocating for a fair and functional funding model
that reflects local realities and supports long-term public health success
• We may be expected to pay higher share
• Court System
• Second Courthouse judge (~$250k-400k)
 RecentStateProjectionsshowa$1.5billiondeficit 9

Fiscal Year 2027
Strategic Priorities Discussion
BOE
Capital
Funding
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BUDGET HIGHLIGHTS – MAJOR CAPITAL
Projects in Current 6-Year Plan Projects NOT in Current 6-Year Plan
Detention Center $70.0-80.0 Million Jemal Property (Outlets) $6 Million -$10 Million
BOE –Career Tech Ed Facility $28.2 Million Old Grasonville Amb. Bldg TBD
BOE –CMS Replacement $20.5 Million Additional EMS Unit $1.0 Million
Pedestrian Bridge $19.9 Million Charter School TBD
Sheriff’s Office $16.0 Million Board of Elections Facilities TBD
Rec Center $15.0 Million Library Admin Office Space TBD
Historic Courthouse $10.0 Million Historic High School/Old BOE TBD
Admin Bldg
Animal Services Building $6.3 Million
Health Department Building TBD
These may be adjusted for timing, These may need to be added to
inflation, priority, etc. the plan and moved up in timeline
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BUDGET HIGHLIGHTS – MAJOR OPERATING
Items NOT in Current Operating Budget
Additional Funds for BOE (ongoing) $6.5 Million
Additional EMS Unit – operating costs ~$1.1 Million/annum
Second Courthouse Judge Expenses ~$250,000-$400,000
Additional Sheriff staffing for protection ~$70,000-$120,000/each
and enforcement
State Road Hwy Safety Improvements and TBD
Enforcement
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DEBT SERVICE PROJECTIONS
FY2026
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OUTSTANDING DEBT PROJECTIONS
FY2026
14

DEBT MEASURES PURSUANT TO POLICY
FY2026
15

DEBT MEASURES PURSUANT TO POLICY
FY2026
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Fiscal Year 2027
Communications & Public Engagement Strategy
• Budget Workshops
• November18“FY2027Goals & Strategy Setting”
• March 26 “Board of Education, Library & Sheriff”
• March31“ParksandPublicWorks”
• April 9 “Other Depts as needed and Outside Agency
Grants”
• Public Information Sessions
• May18–KentIslandLibrary
• May 19 –Liberty Building
• May20–SudlersvilleMiddleSchool
• Online Resources
• All Public Budget Documents https://qacbudget.com
• Online Budget Transparency Portal
• Schedule
• Work SessionHandouts
• Presentations
• CountyAdministrator’sSubmitted Budget
• BudgetinBriefDocument
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• CountyCommissioners’FinalBudget
• Budget Resolution

Fiscal Year 2027
Next Steps
• Operating Budget Guidance to Departments
• Although revenues are growing, expenses are growing quicker due to inflation, tariffs, etc.
• Will be recommending non-payroll operating costs be held within 3%
• Be Realistic, Not Optimistic: Use conservative revenue and cost estimates. Assume costs for wages, benefits, fuel, utilities,and contracted services
will continue rising at 3% to 6%.
• Prioritize Core Services: Focus on sustaining essential services. Avoid launching new programs unless there’s a compelling need or offsetting
reduction elsewhere.
• Scrutinize Base Budgets: Identify and eliminate outdated, underutilized, or duplicative costs. Emphasize service-based reviews over incremental
increases.
• Flag Personnel Requests Carefully: New positions or reclassifications should be tightly justified—especially with rising benefitand pension costs.
• Expect Higher Benefit Costs: Anticipate continued increases in health insurance and retirement contributions, andreflect that in their projections.
• Capital Budget Projects
• Prioritize “Ready-to-Go” Projects: Favor projects that are shovel-ready and fully scoped, especially those eligible for state orfederal matching
funds.
• Phase Multi-Year Projects Thoughtfully: Break large capital initiatives into manageable phases to maintain flexibility in funding and timing.
• Watch Construction Cost Escalation: Building material inflation has moderated but remains elevated. Include escalation contingencies in all
estimates.
• Defer Non-Essential Assets: Delay capital items (vehicles, equipment, buildings) that don’t directly affect health, safety, or mandated operations.
• Consider Operational Impact: Quantify how new capital assets will affect future operating costs (staff, maintenance, utilities, technology).
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