Fiscal Year 2024 ACFR (PDF)

THE COUNTY COMMISSIONERS OF

QUEEN ANNE’S COUNTY, MARYLAND

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

JUNE 30, 2024

QUEEN ANNE'S COUNTY, MARYLAND

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2024

TABLE OF CONTENTS

Page(s)

INTRODUCTORY SECTION 4

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 - 122

REQUIRED SUPPLEMENTARY INFORMATION 123

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund 124 - 126 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Grants Fund 127 Maryland State Retirement and Pensions Systems Schedule of the Proportionate Share of the Net Pension Liability and Schedule of Contributions 128 Actuarial Assumptions - Pension Plan 129 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 130 - 131 Actuarial Assumptions - OPEB Plan 132 Length of Service Awards Program (LOSAP) Schedule of Changes in the Net LOSAP Liability 133 Notes to the Required Supplemental Information (LOSAP) 134 2

QUEEN ANNE'S COUNTY, MARYLAND

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2024

TABLE OF CONTENTS

(CONTINUED)

Page(s)

FINANCIAL SECTION (CONTINUED)

OTHER SUPPLEMENTARY INFORMATION 135

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 136

Non-Major Governmental Funds 137 - 139 Combining Balance Sheet 140 - 143 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 144 - 147 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budgetary Basis 148 - 154 Non-Major Enterprise Funds 155 - 156 Combining Statement of Net Position 157 Combining Statement of Revenues, Expenses, and Changes in Net Position 158

Combining Statement of Cash Flows 159 Fiduciary Funds 160 Custodial Funds 161 Statement of Fiduciary Net Position 162 Statement of Changes in Fiduciary Net Position 163 Community Partnerships for Children 164 Community Partnerships for Children Special Revenue Fund Combining Balance Sheets - By Grantor 165 Schedule of Revenues, Expenditures, and Changes in Fund Balances - By Community Partnership Agreements (CPA) and

Non-Community Partnership Agreements (Non-CPA) 166 - 169 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budgetary Basis 170 - 171

STATISTICAL SECTION (UNAUDITED) 172 - 173

Table 1 Net Position by Component - Government-Wide 174 - 175 2a Changes in Net Position - Government-Wide 176 - 179 2b General Tax Revenues - Governmental Activities 180 3 Fund Balances - Governmental Funds 181 4 Changes in Fund Balances - Governmental Funds 182 - 183 5 Assessed Value of Taxable and Exempt Property 184 - 185 6a Real Property Tax Rates - County Direct Rate 186 6b Real Property Tax Rates - County Special Taxing Districts 187

6c Real Property Tax Rates - Overlapping Governments - Towns 188 - 189 7 Ten Highest Commercial Property Taxpayers 190 8 Property Tax Levies and Collections 191 9 Ratios of Outstanding Debt by Type 192 10 Ratios of General Bonded Debt Outstanding 193 11 Computation of Net Direct and Overlapping Debt 194 - 195 12a Computation of Legal Debt Margin 196 - 197 12b Computation of Local Debt Limit 198 - 199

13 Principal Employers 200 14 Demographic Statistics 201 15 County Government Employees - Full-Time Equivalents 202 16 County Government Employees - Full-Time Only by Function 203 17 Operating Indicators by Function 204 18 Capital Asset Statistics by Function 205 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 December 23, 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, 2024.

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, 2024, 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, 2024, 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 52,508 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 $100,000 with the approval of the County Administrator. Transfers of appropriations or appropriation of new revenues in excess of $100,000 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 2024 rate for the County was 2.8%, compared to the state’s rate of 3.2% and the U.S.’s rate of 4.1%. The fiscal year 2024 average rate for the County was 2.1%. The increase in unemployment rate for fiscal year 2024 was the result of a combination of labor force growth and demographic shifts.

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 2024 by 5.2% to $82.1 million due to an increase in assessable base. Local income tax is the County’s other main revenue source. Income tax collections increased by 8.2% in fiscal year 2024, from $79.5 million in fiscal year 2023 to $86.0 million in fiscal year 2024 as a result of increased wages and capital gains.

Recordation tax declined in fiscal year 2024 with a decrease of 14.0% over fiscal year 2023, from $8.9 million in fiscal year 2023 to $7.7 million in fiscal year 2024. The transfer tax revenue also decreased in fiscal year 2024 by 5.3%, from $3.0 million in fiscal year 2023 to $2.9 million in fiscal year 2024. In fiscal year 2024 Queen Anne's County received $83 thousand of cannabis sales tax revenue for the first time due to Maryland legalizing the sale of recreational-use cannabis.

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 $15,120,497 in fiscal year 2024.

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 $380,329 in fiscal year 2024. The current balance of the Revenue Stabilization Fund is $9,450,311.

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 2025, prioritizes capital expenditures over these years to meet the County’s needs. The six-year program totals $331.1 million and includes: $64.3 million for various school related projects (includes $20.4 million for Centreville Middle School and $9.0 million for the Board of Administration building); $59.6 million for Roads Board capital projects (includes $22.9 million for a pedestrian bridge crossing

on US 50/301 and $15.6 million for asphalt overlays); $36.1 million for various Administration and General Services projects (includes $16.0 million for Sheriff facilities and $10.0 million for the Historic Courthouse); $34.9 million for various Sanitary District projects (the Southern Kent Island Sewer service at $14.7 million); $24.8 million for the Detention Center regional jail;

$20.5 million for Parks (includes $5.6 million for playgrounds and $3.8 million for trail maintenance/amenities); $20.3 million to Outside Agencies (includes $5.7 million for the Chesapeake College Technical Building and $5.0 million for allocations to Volunteer Fire Departments); and $20.2 million for a new 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 2024, Queen Anne’s County general obligation debt was 1.27% of the total taxable assessable base, and the per capita debt measurement was $2,374. The debt service was 7.7% 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, 2023. 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-five consecutive years (fiscal years 1999-2023). 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 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Queen Anne's County Maryland For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2023 Executive Director/CEO 10 11

QUEEN ANNE’S COUNTY, MARYLAND

GOVERNMENTAL ORGANIZATION

CERTAIN ELECTED AND OTHER OFFICIALS

AS OF JUNE 30, 2024

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 Jeffrey Rank Director of IT Brian Riley Chief Treasury Officer Nancy Boone 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 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, 2024, 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, 2024, 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, 2024, 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.

An independent member of UHY International 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

basic 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 December 23, 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 December 23, 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, 2024. 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 Summary of Net Position 2024 2023 2024 2023 2024 2023 Current and Other Assets $ 227,640,414 $ 223,507,249 $ 66,024,027 $ 65,914,665 $ 293,664,441 $ 289,421,914 Capital Assets 197,753,402 195,514,937 149,868,762 136,788,646 347,622,164 332,303,583 Total Assets 425,393,816 419,022,186 215,892,789 202,703,311 641,286,605 621,725,497 Total Deferred Outflows of Resources 22,636,795 16,533,659 1,957,649 1,445,535 24,594,444 17,979,194

Noncurrent liabilities 206,383,252 205,417,418 46,743,434 46,777,229 253,126,686 252,194,647 Other liabilities 18,807,651 21,139,189 1,586,995 2,226,209 20,394,646 23,365,398 Total Liabilities 225,190,903 226,556,607 48,330,429 49,003,438 273,521,332 275,560,045 Total Deferred Inflows of Resources 20,016,476 23,915,715 23,106,130 20,368,980 43,122,606 44,284,695 Net investment in capital assets 126,092,854 122,128,900 111,940,928 99,118,189 238,033,782 221,247,089

Restricted amounts 27,933,020 26,495,556 4,147,493 5,350,538 32,080,513 31,846,094 Unrestricted amounts (deficit) 48,797,358 36,459,067 30,325,458 30,307,701 79,122,816 66,766,768 Total Net Position $ 202,823,232 $ 185,083,523 $ 146,413,879 $ 134,776,428 $ 349,237,111 $ 319,859,951 The County’s total current and other assets increased by $4.2 million, or 1.5 percent, to $293.7 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 2024 by $349.2 million.

Net position is divided into three categories: net investment in capital assets; restricted amounts; and unrestricted amounts. By far the largest portion, $238.0 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 $43.9 million on June 30, 2024. Absent the effect of this relationship, the County would have reported a positive unrestricted amount of $123.0 million on its government-wide financial

statements, rather than the positive unrestricted net assets of $79.1 million reported herein. For a multi-year view of this calculation, see the Footnote presented in Table 1 of the Statistical Section.

An additional $32.1 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: $15.6 million related to general government services; $3.1 million for economic/community development; $6.5 million for public safety; and $2.8 million for conservation of natural resources. For business-type activities, this amount

includes $2.9 million restricted to meet Sanitary District debt covenants and $1.2 million for the Bay Bridge Airport debt service.

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 Summary of Changes in Net Position 2024 2023 2024 2023 2024 2023 Program revenues:

Charges for services $ 8,791,716 $ 9 ,065,778 $ 15,353,749 $ 13,436,000 $ 24,145,465 $ 22,501,778 Operating grants and contributions 8,049,065 8 ,232,618 2,580,846 2,955,567 10,629,911 11,188,185 Capital grants and contributions 9,533,202 6 ,657,301 7,635,932 4,027,234 17,169,134 10,684,535 General revenues:

Property taxes 82,047,674 78,022,772 - - 82,047,674 78,022,772 Local income tax 86,567,013 83,439,604 - - 86,567,013 83,439,604 Other local taxes Admission and amusement taxes 261,842 2 48,987 - - 261,842 2 48,987 Recordation taxes 7,668,565 8 ,921,379 - - 7,668,565 8 ,921,379 Hotel taxes 1,127,036 9 91,022 - - 1,127,036 9 91,022 County transfer taxes 2,885,299 3 ,046,615 - - 2,885,299 3 ,046,615 Cannabis Sales Tax 83,040 - - - 83,040 -

State Shared Taxes 1,560,187 1 ,352,592 - - 1,560,187 1 ,352,592 Investment income 9,192,673 6 ,448,944 1,732,675 1,047,564 10,925,348 7 ,496,508 Gain (loss) on sale of capital assets - - (21,552) 2,561 (21,552) 2 ,561 Miscellaneous 2,059,293 1 ,628,246 1,167,917 1,224,908 3,227,210 2 ,853,154 Total Revenues 219,826,605 208,055,858 28,449,567 22,693,834 248,276,172 230,749,692 Governmental Activities:

General government 22,378,707 21,070,854 - - 22,378,707 21,070,854 Public safety 49,458,541 42,482,230 - - 49,458,541 42,482,230 Public works 20,222,362 19,422,823 - - 20,222,362 19,422,823 Parks & recreation 7,458,494 6 ,338,014 - - 7,458,494 6 ,338,014 Health & Social Services 7,944,933 7 ,219,183 - - 7,944,933 7 ,219,183 Education & Library 83,355,583 69,770,287 - - 83,355,583 69,770,287 Conservation of natural resources 3,702,670 3 ,386,538 - - 3,702,670 3 ,386,538

Economic and Community development 2,826,682 2 ,798,777 - - 2,826,682 2 ,798,777 Interest and fiscal charges 4,254,673 4 ,525,460 - - 4,254,673 4 ,525,460 Business-type Activities:

Water and sewer - - 14,932,981 13,822,527 14,932,981 13,822,527 Airport - - 966,183 1,058,318 966,183 1 ,058,318 Golf course - - 730,908 697,824 730,908 6 97,824 Public landings and marinas - - 666,295 684,685 666,295 6 84,685 Total Expenses 201,602,645 177,014,166 17,296,367 16,263,354 218,899,012 193,277,520 Increase in Net Position before Transfers 18,223,960 31,041,692 11,153,200 6,430,480 29,377,160 37,472,172

Transfers in (out) ( 484,251) (516,330) 484,251 516,330 - - Increase in Net Position 17,739,709 30,525,362 11,637,451 6,946,810 29,377,160 37,472,172 Net Position, prior year restated 185,083,523 154,558,161 134,776,428 127,829,618 319,859,951 282,387,779 Net Position - current year $ 202,823,232 $ 185,083,523 $ 146,413,879 $ 134,776,428 $ 349,237,111 $ 319,859,951 21 Governmental activities:

Revenues for governmental activities were $219.8 million for fiscal year 2024. The following chart depicts revenues by source for governmental activities:

 Taxes comprise the largest source of County revenue, totaling $182.2 million (82.9 percent) of total revenue for fiscal year 2024. Of that amount, property and local income tax together yielded $168.6 million (76.7 percent) of all revenue. Each County sets its own property and income tax rates, within parameters established by the State. For fiscal year 2024, the County’s property tax rate remained at

$.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 $8.0 million, reflect grants from Federal and State agencies that support specific County programs. Programs that benefitted the most were: public safety ($2.6 million or 32.6 percent), health and social services ($2.6 million or 32.2 percent), general government ($1.7 million or 21.6 percent), and economic/community development ($1.1 million or 13.3 percent).

 Charges for services, totaling $8.8 million, reflect fees charged to County citizens. These primarily support public safety ($2.6 million or 29.8 percent), education and library ($2.3 million or 26.1 percent), general government ($1.7 million or 19.5 percent), parks and recreation ($1.1 million or 13.1 percent), and public works ($884 thousand or 10.1 percent).

 Capital grants and contributions, totaling $9.5 million, reflect contributions from Federal and State agencies, as well as developers. Programs that benefitted the most were: public works ($2.8 million or 29.8 percent), general government ($2.5 million or 26.5 percent), conservation of natural resources ($2.5 million or 26.0 percent), and parks and recreation ($924 thousand or 9.7 percent).

22 Expenses for all governmental activities were $201.6 million for fiscal year 2024. The following chart depicts expenses by function for governmental activities:

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 $83.4 million (41.4 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 2024 2023 2024 2023 2024 2023 Education and Library $ 83,355,583 $ 69,770,287 $ 2,291,783 $ 3,217,120 $ (81,063,800) $ (66,553,167) Public Safety 49,458,541 42,482,230 5,425,416 5,673,779 (44,033,125) (36,808,451) Public Works 20,222,362 19,422,823 3,726,195 2,090,244 (16,496,167) (17,332,579) General Government 22,378,707 21,070,854 5,989,969 3,836,276 (16,388,738) (17,234,578)

Parks & Recreation 7,458,494 6 ,338,014 2,089,772 1,768,302 (5,368,722) (4,569,712) Health & Social Services 7,944,933 7 ,219,183 3,242,021 3,333,514 (4,702,912) (3,885,669) Conservation of Natural Resources 3,702,670 3 ,386,538 2,493,968 2,083,924 (1,208,702) (1,302,614) Economic and Community Development 2,826,682 2 ,798,777 1,066,447 1,906,414 (1,760,235) ( 892,363) Interest and fiscal charges 4,254,673 4 ,525,460 48,412 46,124 (4,206,261) (4,479,336)

Total $ 201,602,645 $ 177,014,166 $ 26,373,983 $ 23,955,697 $ (175,228,662) $ (153,058,469) Of the total cost of $201.6 million for governmental activities, $26.4 million (13.1 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 $8.8 million,

while governments and other organizations that benefited indirectly from these programs contributed operating grants of $8.0 million and capital grants of $9.5 million.

County taxpayers paid for most of the remaining $175.2 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: $81.1 million for education and library; $44.0 million for public safety; $16.5 million for public works; $16.4 million for general government; $5.4 million for parks and recreation; $4.7 million for health and social services; $1.2

million for conservation of natural resources; $1.8 million for economic and community development; and $4.2 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 2024, governmental activities increased the County’s net position overall by $17.7 million, compared to an increase of $30.5 million in fiscal year 2023. The following discussion explains changes in net position relative to the prior fiscal year.

Revenues for governmental activities increased by $11.8 million (5.7 percent). The following key revenues changed, when compared to the prior fiscal year:

 Property taxes increased by $4.0 million (5.2 percent), from $78.0 million in fiscal year 2023 to $82.0 million in fiscal year 2024 due to an increase in property assessments.

 Income taxes increased by $3.1 million (3.7 percent), from $83.4 million in fiscal year 2023 to $86.6 million in fiscal year 2024. 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.

 Capital grants and contributions increased by $2.9 million (43.2 percent), from $6.7 million in fiscal year 2023 to $9.5 million in fiscal year 2024. This is mainly due to the use of Federal ARPA funding in fiscal year 2024.

 Investment Income increased by $2.7 million (42.5 percent), from $6.4 million in fiscal year 2023 to $9.2 million in fiscal year 2024. This increase was the result of increased interest rates.

 County recordation taxes decreased $1.3 million (14.0 percent), from $8.9 million in fiscal year 2023 to $7.7 million in fiscal year 2024. This decrease is a result of increased interest rates, continued low housing inventory, and overall decrease in home sales.

Expenses for governmental activities increased by $24.6 million (13.9 percent). Key positive and negative expense changes, in order of relative importance, are:

 Education & Library increased by $13.6 million (19.5 percent). There was an increase of $7.8 million for various school capital projects, such as the Board of Education new administration building and three school roofing projects. In addition, the County’s allocation to the Board of Education increased by $4.8 million in fiscal year 2024.

 Public Safety increased by $7.0 million (16.4 percent). There was a $3.4 million increase for the LOSAP liability due to changes in benefit terms. Emergency Services increased by $1.7 million and the Sheriff’s Office increased by $1.6 million. The remaining increase was in various departments throughout the county.

 General Government increased by $1.3 million (6.2 percent). $897 thousand of the increase is related to funding the local Housing Authority.

 Parks & Recreation increased by $1.1 million (17.7 percent). Increases occurred throughout the various Parks and Recreation departments.

24 Business-type activities:

Revenues, transfers in, and expenses for business-type activities were $28.4 million, $484 thousand, and $17.3 million, respectively, for fiscal year 2024. 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 to $11.6 million in fiscal year 2024, which is $4.7 million more than the prior year’s increase of $6.9 million. The fiscal year 2024 change in net position resulted primarily from:

 Operating Revenues before transfers increased by $5.8 million (25.4 percent), from $22.7 million in fiscal year 2023 to $28.4 million in fiscal year 2024, for all business-type activities. Charges for services increased by $1.9 million mainly due to an increase in sanitary restricted fund PWA sales.

Operating grants and contributions decreased by $375 thousand, mainly due to decreased state grant funding in the Sanitary district. Capital grants and contributions increased by $3.6 million, mainly due to an increase in federal grant funding for the Airport Runway project and the use of federal ARPA funding.

 Operating Expenses increased by $1.0 million (6.4 percent), from $16.3 million in fiscal year 2023 to $17.3 million in fiscal year 2024, for all business-type activities. The entire increase resulted from water and sewer activities due to Sanitary District SKI development phase 3.

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 $172.1 million, compared to $166.0 million for the prior year.

Approximately 27.0 percent of this total ($46.5 million) constitutes unassigned fund balance, which is available for spending. The total unassigned fund balance of $46.5 million is comprised of $46.5 million of positive unassigned fund balance for the general fund.

The nonspendable fund balance of $1.4 million which is not available for spending and includes amounts related to inventory, prepaid items and the excess of lease receivable balance over deferred inflow balance.

Restricted fund balance of $33.9 million (19.7 percent) includes amounts that can be spent only for specific purposes stipulated by external sources or legal restrictions.

Committed fund balance of $41.1 million (23.9 percent) represents those amounts that can be used only for the specific purposes of the government’s highest level of decision-making authority.

The remaining $49.2 million of fund balance (28.6 percent) constitutes assigned fund balances. These amounts are intended to be used by the government for the specific purposes of each fund.

More detailed information on each classification of governmental fund balance can be found in Note 12 of this report.

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 $77.5 million, which is an increase of $8.7 million (12.7 percent) from the fiscal year 2023 balance of $68.8 million. Of the $8.7 million increase, local property tax increased by $4.0 million (5.2 percent) as a result due to an increase in assessments for tax district 4 by an

average of 22%. Local income tax also increased $6.5 million (8.3 percent) due to increases in wage rates and capital gains.

Of the total $77.5 million in fund balance, $46.5 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,

$15.1 million of rainy day funds are included in the General Fund’s restricted fund balance of $21.4 million for fiscal year 2024. The remaining fund balance is comprised of $148 thousand in nonspendable, and $9.5 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.

26 As of June 30, 2024, the General Capital Projects Fund has a total fund balance of $56.1 million, compared to $61.3 million at the end of the prior fiscal year. The $56.1 million in total fund balance is comprised of $6.3 million in restricted fund balance, mainly for unspent bond proceeds, $7.1 million of fund balance committed for specific projects, and $42.6 million of assigned fund balance. The decrease in General Capital Projects

fund balance resulted from the assignment of restricted bond proceeds.

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, 2024, the Roads Capital Projects Fund has a total fund balance of $6.5 million, compared to $5.4 million at the end of the prior fiscal year. Of this total $6.5 million fund balance, $5.7 million has been assigned to fund ongoing projects, while $857 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, 2024, 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 2024 amounted to $30.7 million, which is a decrease of $520 thousand compared to the prior year. Net investment in capital assets increased by $6.8 million.

Total net position of the Sanitary District amounted to $117.4 million at the end of fiscal year 2024, which increased by $6.6 million when compared to the prior year.

The unrestricted net position of the Bay Bridge Airport Enterprise Fund at year end amounted to a deficit balance of $585 thousand, reflecting an improvement of $358 thousand. The investment in capital assets for the Bay Bridge Airport increased by $5.9 million in the current fiscal year.

Total net position of the Bay Bridge Airport amounted to $20.8 million at the end of fiscal year 2024, which is an increase of $4.7 million from the prior year amount of $16.1 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 $196.7 million. Amendments increased spending authority by $13.1 million during fiscal year 2024, when compared to the original budget of $183.6 million.

27 Major components of these expenditure budget increases are as follows:

 Budgeted Public Safety increased by $2.3 million, mainly due to miscellaneous increases in the Sheriff’s Office and Emergency Services.

 Budgeted Transfers Out to General Capital Projects increased by $8.0 million from the original budget during the year. These funds will be used in subsequent years as funding for the larger capital projects.

 Budgeted Transfers Out to Roads Capital Projects increased by $1.0 million from the original budget.

Similarly to General Capital Projects, these additional funds will be used for Roads Capital projects in subsequent years.

 Budgeted Transfers Out to the Agricultural Transfer Tax Fund increased by $1.3 million 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 $4.5 million.

Actual expenditures, and other financing uses, were less than final budgetary appropriations by $5.7 million.

The net effect of these two disparities was a positive variance of actual to final budget of $10.2 million.

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

Revenues:

 Local Property Tax revenue was $2.1 million more than the final budget (2.7 percent) due to a higher than anticipated increase in assessments.

 Miscellaneous Income was $719 thousand higher than the final budget (122.6 percent) due to the Workmen’s Compensation audit that resulted in the County receiving a credit and other miscellaneous income categories resulting in higher than expected revenue.

 Local Income Tax revenue was $671 thousand higher than the final budget (0.8 percent) due to strong economic growth and increased taxable income.

Expenditures:

 Final Budgeted Salaries and Benefits were $51.8 million for the year, while actual costs were $52.1 million. They were overspent at year-end by $298 thousand (less than 1 percent). Budgeted salaries and benefits include reversions of $1.9 million.

 Final Budgeted Other Operating Charges were $144.9 million for the year, while actual costs were $138.9 million. These costs were lower than budget at year end by $6.0 million (4.1 percent).

Operating Charges include contracted services, supplies, other charges, debt service, and transfers out.

o Other Operating Expenses were underspent by $3.5 million. Savings were realized in the Health Department ($1.5 million), OPEB and other benefit charges ($634 thousand), General Services ($246 Thousand), and Insurance ($245 thousand). The remaining savings for Other Operating Expenses were spread throughout the General Fund.

o Transfers Out was underspent by $1.3 million, due to savings realized by Roads Operating ($740 thousand) the Department of Aging ($186 thousand), and the Golf Course Enterprise Fund ($186 thousand) which allowed these departments to forgo this portion of their appropriation.

28 o Contracted Services were underspent by $787 thousand, with the largest savings realized by General Services ($190 thousand), Detention Center ($147 thousand), Information Technology ($140 thousand), and Solid Waste ($140 thousand).

o Capital Outlay was underspent by $257 thousand, with the largest savings realized by Non- Departmental ($125 thousand) and Detention Center ($77 thousand).

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, 2024 amounted to $347.6 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 $15.3 million or 4.6%.

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

Governmental Activities Business Type Activities Total 2024 2023 2024 2023 2024 2023 Land and Land Improvements $ 87,169,068 $ 86,490,462 $ 13,406,924 $ 13,406,924 $ 100,575,992 $ 99,897,386 Intangible Rights - Easements 821,819 821,819 6,140 6,140 827,959 827,959 Construction in Progress 2,878,827 11,539,664 6,599,907 8,202,979 9,478,734 19,742,643 Buildings 56,328,492 50,303,760 4,969,083 5,244,516 61,297,575 55,548,276

Improvements other than Buildings 17,839,824 15,432,697 9,847,789 9,187,831 27,687,613 24,620,528 Infrastructure 7,953,550 8,252,526 106,826,876 92,068,461 114,780,426 1 00,320,987 Auto, Machinery, and Equipment 23,352,834 20,911,398 8,102,603 8,527,421 31,455,437 29,438,819 Right-to-use Asset 503,191 570,845 109,440 144,374 612,631 715,219 Subscription Asset 905,797 1,191,766 - - 905,797 1,191,766

Total $ 197,753,402 $ 195,514,937 $ 149,868,762 $ 136,788,646 $ 347,622,164 $ 3 32,303,583 Noteworthy capital asset events during the current fiscal year for governmental activities included the following (majority of which was reclassified from Construction in Progress):

o Completion of the Kent Island Library Renovation totaling $7.2 million.

o Equipment replacement totaling $1.8 million.

o Replacement of departmental vehicles totaling $1.7 million.

o Completion of Emergency Services Computer Aided Dispatch System totaling $1.5 million.

o Completion of Chesapeake Heritage Visitor Center improvements totaling $1.2 million.

Noteworthy capital asset events during the current fiscal year for business-type activities included the following (majority of which was reclassified from Construction in Progress):

o Completion of Sanitary district infrastructure projects totaling $9.9 million, of which $2.6 million was contributed by commercial developers to be maintained by the County.

o Completion of Bay Bridge Airport Runway Reconstruction totaling $6.4 million.

o Completion of Chester West Water Main totaling $1.4 million.

o Taxiway Lighting at Bay Bridge Airport totaling $640 thousand and Runway Lighting at Bay Bridge Airport totaling $359 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 $253.1 million for its governmental and business-type activities.

29 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 $253.1 million in debt, $46.7 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 $2.9 million, which are restricted to payment of the Sanitary District’s subsequent year’s debt. See Note 11 for restricted assets and

subsequent year debt service obligations.

Debt activities are summarized as follows:

Governmental Activities Business Type Activities Total Outstanding Debt 2024 2023 2024 2023 2024 2023 Bonds, Notes, and Premiums $ 123,221,457 $ 1 32,859,793 $ 37,009,458 $ 3 7,528,938 $ 160,230,915 $ 170,388,731

OPEB 24,652,577 26,810,247 5,590,368 5,854,976 30,242,945 32,665,223

Net Pension Liability 41,722,251 32,570,299 3,436,786 2,690,703 45,159,037 35,261,002 LOSAP Liability 11,180,243 7,757,868 - - 11,180,243 7,757,868 Compensated Absences 4,148,535 3,625,663 596,108 5 58,231 4,744,643 4,183,894 Lease Liability 552,354 614,668 110,714 1 44,381 6 63,068 759,049 Subscription Liability 905,835 1,178,880 - - 9 05,835 1,178,880 Total Noncurrent Liabilities $ 206,383,252 $ 2 05,417,418 $ 46,743,434 $ 4 6,777,229 $ 253,126,686 $ 252,194,647

During the 2024 fiscal year, the County’s total net debt increased by $932 thousand (0.4 percent). Of this amount, governmental debt increased by $966 thousand (0.5 percent), while business-type debt decreased by $34 thousand (0.1 percent). In fiscal year 2024, 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 2024 was $1.8 million. In addition, the net pension liability increased by $9.9 million, total other post-employment benefit obligations decreased by $2.4 million, the LOSAP liability increased by $3.4 million, and compensated absences increased by $560 thousand. Decreases also occurred in both lease ($96 thousand) and subscription liabilities ($273 thousand) due to 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 2025 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 $83.0 million for the 2025 budget.

The following are a few of the highlights from the fiscal year 2025 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 2025;

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 2024 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, 2024

PRIMARY GOVERNMENT

GOVERNMENTAL BUSINESS-TYPE

ACTIVITIES ACTIVITIES TOTAL

ASSETS

Equity in Pooled Cash and Investments $ 156,233,393 $ 12,632,811 $ 168,866,204 Cash and Cash Equivalents - - - Taxes Receivable (Net) 1,107,564 - 1,107,564 Accounts and Loans Receivable (Net) 7,737,150 650,223 8,387,373 Special Assessments (Net) 582,455 - 582,455 Lease receivable 957,290 1,849,710 2,807,000 Internal Balances 1,061,265 (1,061,265) - Due from Primary Government - - - Due from Other Governments 49,634,724 17,652 49,652,376

Inventories 1,218,486 818,087 2,036,573 Prepaid Items 112,309 2,520 114,829 Endowment Fund - - - Restricted Assets:

LOSAP Plan Assets 6,120,385 - 6,120,385 Equity in Pooled Cash and Investments 2,875,393 28,355,590 31,230,983 Accounts Receivable (Net) - 3,499,369 3,499,369 Special Assessments Receivable (Net) - 19,259,330 19,259,330 Capital Assets:

Nondepreciable Assets 90,869,714 20,012,971 110,882,685 Depreciable and Amortized Assets, Net 106,883,688 129,855,791 236,739,479 Total Assets 425,393,816 215,892,789 641,286,605

DEFERRED OUTFLOWS OF RESOURCES

OPEB 672,067 126,911 798,978

Pension Benefits 20,367,949 1,827,201 22,195,150 LOSAP Benefits 1,351,258 - 1,351,258 Deferred Charge on Refunding 245,521 3,537 249,058 Total Deferred Outflows of Resources 22,636,795 1,957,649 24,594,444

LIABILITIES

Accounts Payable and Other Current Liabilities 9,931,710 1,304,783 11,236,493 Accrued Interest Payable 1,798,218 143,264 1,941,482 Due to Component Units 2,966,615 - 2,966,615 Due to Other Governmental Agencies 316,871 - 316,871 Unearned Revenue 3,794,237 113,416 3,907,653 Escrow Deposits - 25,532 25,532 Noncurrent Liabilities:

Due within One Year 13,235,535 2,718,107 15,953,642 Due in More than One Year 193,147,717 44,025,327 237,173,044 Total Liabilities 225,190,903 48,330,429 273,521,332

DEFERRED INFLOWS OF RESOURCES

OPEB 12,158,206 1,624,171 13,782,377

Pension Benefits 3,266,641 402,838 3,669,479 LOSAP Benefits 2,857,473 - 2,857,473 Lease receivable 921,365 1,818,199 2,739,564 Deferred Inflows related to Refundings 135,866 1,590 137,456 Deferred Assessments 582,455 19,259,332 19,841,787 Deferred Fees 94,470 - 94,470 Total Deferred Inflows of Resources 20,016,476 23,106,130 43,122,606

NET POSITION

Net Investment in Capital Assets 126,092,854 111,940,928 238,033,782 Amounts Restricted for:

General Government 15,581,891 - 15,581,891 Economic/Community Development 3,100,606 - 3,100,606 Public Safety 6,452,153 - 6,452,153 Conservation of Natural Resources 2,797,415 - 2,797,415 Social Services 955 - 955 Debt Service - 4,147,493 4,147,493 Capital Projects - - - Other Purposes - - - Unrestricted Amounts (Deficit) 48,797,358 30,325,458 79,122,816 Total Net Position $ 202,823,232 $ 146,413,879 $ 349,237,111

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, 2024

(CONTINUED)

COMPONENT UNITS

BOARD OF FREE

EDUCATION LIBRARY

$ - $ - 13,039,845 1,460,276

- -

464,949 31,240

- -

- -

- -

3,190,824 - 3,500,976 - 73,393 - 1,147,064 33,300

- 124,103

- -

- -

- -

- -

16,487,117 29,850 145,488,597 1,689,661 183,392,765 3,368,430 38,362,001 95,399 2,569,978 -

- -

- -

40,931,979 95,399 16,701,038 118,383

- -

- -

- -

1,097,387 -

- -

738,009 2,602 150,950,846 520,386 169,487,280 641,371 122,148,389 228,471 318,967 -

- -

- -

- -

- -

- 86,143

122,467,356 314,614 160,804,839 1,716,909

- -

- -

- -

- -

- -

- -

77,515 - 1,945,003 101,707 (230,457,249) 689,228 $ (67,629,892) $ 2,507,844 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, 2024

PRIMARY GOVERNMENT

OPERATING CAPITAL

CHARGES FOR GRANTS AND GRANTS AND TOTAL

EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS REVENUE

PRIMARY GOVERNMENT

Governmental Activities General Government $ 22,378,707 $ 1 ,717,926 $ 1,742,174 $ 2,529,869 $ 5,989,969 Public Safety 49,458,541 2 ,617,398 2,628,668 179,350 5,425,416 Public Works 20,222,362 8 83,739 6,270 2,836,186 3,726,195 Parks & Recreation 7,458,494 1 ,151,020 14,453 924,299 2,089,772 Health and social services 7,944,933 6 2,176 2,591,053 588,792 3,242,021 Education and Library 83,355,583 2 ,291,783 - - 2,291,783

Conservation of Natural Resources 3,702,670 1 9,262 - 2,474,706 2,493,968 Economic/Community Development 2,826,682 - 1,066,447 - 1,066,447 Interest and Fiscal Charges 4,254,673 4 8,412 - - 48,412 Total Governmental Activities 201,602,645 8 ,791,716 8,049,065 9,533,202 26,373,983 Business-type Activities Water and Sewer 14,932,981 1 4,162,090 2,565,847 2,607,219 19,335,156 Airport 966,183 6 ,049 - 5,028,713 5,034,762

Golf Course 730,908 7 20,153 - - 720,153 Public Landings and Marinas 666,295 4 65,457 14,999 - 480,456 Total Business-type Activities 17,296,367 1 5,353,749 2,580,846 7,635,932 25,570,527 Total Primary Government $ 218,899,012 $ 2 4,145,465 $ 10,629,911 $ 17,169,134 $ 51,944,510

COMPONENT UNITS

Board of Education $ 131,200,461 $ 1 ,494,109 $ 33,081,584 $ 19,544,076 $ 54,119,769 Free Library 3,429,761 2 1,139 367,152 - 388,291 Total Component Units $ 134,630,222 $ 1 ,515,248 $ 33,448,736 $ 19,544,076 $ 54,508,060 General Revenues Local Property Tax Local Income Tax Other Local Taxes Admission and Amusement Taxes Recordation Taxes Hotel Taxes County Transfer Taxes Cannabis Sales Tax 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 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, 2024

(CONTINUED)

NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION

PRIMARY GOVERNMENT COMPONENT UNITS

GOVERNMENTAL BUSINESS-TYPE BOARD OF FREE

ACTIVITIES ACTIVITIES TOTAL EDUCATION LIBRARY

$ ( 16,388,738) $ - $ (16,388,738) $ - $ - ( 44,033,125) - (44,033,125) - - ( 16,496,167) - (16,496,167) - - ( 5,368,722) - (5,368,722) - - ( 4,702,912) - (4,702,912) - - ( 81,063,800) - (81,063,800) - - ( 1,208,702) - (1,208,702) - - ( 1,760,235) - (1,760,235) - - ( 4,206,261) - (4,206,261) - - ( 175,228,662) - (175,228,662) - -

- 4,402,175 4,402,175 - -

- 4,068,579 4,068,579 - -

- (10,755) (10,755) - -

- (185,839) (185,839) - -

- 8,274,160 8,274,160 - -

$ ( 175,228,662) $ 8,274,160 $ (166,954,502) $ - $ - $ - $ - $ - $ (77,080,692) $ -

- - - - (3,041,470)

- - - (77,080,692) (3,041,470)

82,047,674 - 82,047,674 - - 86,567,013 - 86,567,013 - - 261,842 - 261,842 - - 7,668,565 - 7,668,565 - - 1,127,036 - 1,127,036 - - 2,885,299 - 2,885,299 - - 83,040 - 83,040 - - 1,560,187 - 1,560,187 - -

- - - 1 00,774,039 2,808,155

9,192,673 1,732,675 10,925,348 4 80,147 94,857

- (21,552) (21,552) - -

2,059,293 1,167,917 3,227,210 2 8,085 4,235 ( 484,251) 484,251 - - - 192,968,371 3,363,291 196,331,662 1 01,282,271 2,907,247 17,739,709 11,637,451 29,377,160 2 4,201,579 (134,223) 185,083,523 134,776,428 319,859,951 (91,831,471) 2,642,067 $ 202,823,232 $ 146,413,879 $ 349,237,111 $ (67,629,892) $ 2,507,844 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, 2024

MAJOR FUNDS NON-MAJOR TOTAL

GENERAL GENERAL ROADS GRANTS GOVERNMENTAL GOVERNMENTAL

FUND CAPITAL CAPITAL FUND FUNDS FUNDS

ASSETS

Cash and Cash Equivalents $ 67,317,886 $ 54,701,783 $ 6,516,310 $ 2,664,619 $ 25,032,795 $ 156,233,393 Prepaid Items 112,309 - - - - 112,309 Receivables:

Taxes Receivable (Net) 1,107,564 - - - - 1,107,564 Accounts Receivable (Net) 481,785 792,636 - 13,927 109,993 1,398,341 Lease Receivable 957,290 - - - - 957,290 Loans Receivable (Net) - - - - 6,338,809 6,338,809 Special Assessments (Net) - - 22,901 - 559,554 582,455 Due from Other Governments 43,974,270 630,918 - 666,228 1,504,532 46,775,948 Due from Other Funds 392,417 875,336 - - - 1,267,753 Inventory - - - - 1,218,486 1,218,486

Restricted:

Restricted LOSAP Plan Assets 6,120,385 - - - - 6,120,385 Restricted Equity in Pooled Cash - 2,875,393 - - - 2,875,393 Total Assets $ 120,463,906 $ 59,876,066 $ 6,539,211 $ 3,344,774 $ 34,764,169 $ 224,988,126

LIABILITIES

Accrued Liabilities $ 7,590,071 $ 1,053,192 $ 6,740 $ 252,278 $ 672,773 $ 9,575,054 Due to Other Funds - - - - 206,488 206,488 Due to Component Units - 2,768,173 - 128,404 70,038 2,966,615 Due to Other Governmental Agencies - - - - 316,871 316,871 Unearned Revenue 14,008 - - 2,964,092 816,137 3,794,237 Total Liabilities 7,604,079 3,821,365 6 ,740 3,344,774 2,082,307 16,859,265

DEFERRED INFLOWS OF RESOURCES

Unavailable Income Taxes 34,337,360 - - - - 34,337,360 Unavailable Property Taxes 86,924 - - - - 86,924 Unavailable Benefit Assessments - - 22,901 - 559,554 582,455 Unavailable Fees - - - - 94,470 94,470 Unavailable Lease Revenue 921,365 - - - - 921,365 Total Deferred Inflows 35,345,649 - 22,901 - 654,024 36,022,574

FUND BALANCES

Nonspendable 148,234 - - - 1,218,486 1,366,720 Restricted 21,377,816 6,320,750 - - 6,230,744 33,929,310 Committed 9,450,311 7,096,362 857,300 - 23,714,705 41,118,678 Assigned - 42,637,589 5,652,270 - 863,903 49,153,762 Unassigned 46,537,817 - - - - 46,537,817 Total Fund Balances 77,514,178 56,054,701 6,509,570 - 32,027,838 172,106,287 Total Liabilities, Deferred Inflows and Fund Balances $ 120,463,906 $ 59,876,066 $ 6,539,211 $ 3,344,774 $ 34,764,169 $ 224,988,126

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, 2024 Total Fund Balance - Governmental Funds $ 1 72,106,287 Capital assets used in governmental fund activities are not current financial resources and therefore are not reported in the funds. 197,753,402 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. 2,858,777 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 86,924 Income Taxes deferred in governmental funds 34,337,360 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 (356,657) Bonds and Notes Payable (123,221,457) Accrued Interest Payable - long term debt (1,760,831) Accrued Interest Payable - leases (16,023) Accrued Interest Payable - Subscription (21,364) Lease Liability (552,354) Subscription Liability (905,835)

OPEB (24,652,577)

Net Pension Liability (41,722,251) Net LOSAP Liability (11,180,243) Accrued Compensated Absences (4,148,535) Deferred outflow of resources - OPEB 672,067 Deferred outflow of resources - Maryland State Pension 20,367,949 Deferred outflow of resources - LOSAP 1,351,258 Deferred outflow of resources - Refundings 245,521 Deferred inflow of resources - OPEB (12,158,206) Deferred inflow of resources - Maryland State Pension (3,266,641)

Deferred inflow of resources - LOSAP (2,857,473) Deferred inflow of resources - Refundings (135,866) Total Net Position - Governmental Activities $ 202,823,232 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, 2024

MAJOR FUNDS NON-MAJOR TOTAL

GENERAL GENERAL ROADS GRANTS GOVERNMENTAL GOVERNMENTAL

FUND CAPITAL CAPITAL FUND FUNDS FUNDS

REVENUES

Taxes Local Property Tax $ 82,049,357 $ - $ - $ - $ 60,101 $ 82,109,458 Local Income Tax 86,007,950 - - - - 86,007,950 Admission and Amusement Taxes 261,842 - - - - 261,842 Recordation Taxes 7,436,184 - - - 232,381 7,668,565 Hotel Taxes 1,127,036 - - - - 1,127,036 County Transfer Taxes 2,885,299 - - - - 2,885,299 Cannabis Sales Tax 83,040 - - - - 83,040 State Shared Taxes - - - - 1,560,187 1,560,187

Franchise Fee 364,677 - - - - 364,677 Licenses and Permits 802,612 40,520 - - - 843,132 Intergovernmental 3,265,896 6,728,766 1,257,288 2,012,200 4,117,604 17,381,754 Charges for Current Services 4,131,708 53,102 4 ,361 6 ,556 3,255,748 7,451,475 Fines and Forfeitures 51,929 - - - 80,498 132,427 Investment Income 7,418,478 647,542 193,482 - 933,171 9,192,673 Donations 177,540 - - - 22,978 200,518 Miscellaneous 1,305,909 410,591 - 291,856 50,937 2,059,293

Total Revenues 197,369,457 7,880,521 1,455,131 2,310,612 10,313,605 219,329,326

EXPENDITURES

Current General Government 14,735,938 1,398,119 - 37,150 17,675 16,188,882 Public Safety 39,555,442 1,182,528 - 1,310,762 776,860 42,825,592 Public Works 8,058,493 2,806,512 3,087,605 16,145 5,825,692 19,794,447 Parks & Recreation 6,042,174 689,046 - - - 6,731,220 Health and Social Services 1,498,892 1,049,838 - 238,237 5,480,017 8,266,984 Education and Library 73,609,899 9,106,407 - - - 82,716,306

Conservation of Natural Resources 846,386 124,943 - - 2,759,115 3,730,444 Economic/Community Development 1,165,297 17,633 - 756,107 1,115,909 3,054,946 Intergovernmental 689,608 - - - - 689,608 Miscellaneous 7,232,373 - - - - 7,232,373 Capital Outlay - 7,710,870 1,308,398 - - 9,019,268 Debt Service Principal 8,488,388 - - - 47,816 8,536,204 Interest and Fiscal Charges 4,254,673 - - - - 4,254,673 Total Expenditures 166,177,563 24,085,896 4,396,003 2,358,401 16,023,084 213,040,947

Excess of Revenues Over (Under) Expenditures 31,191,894 ( 16,205,375) ( 2,940,872) ( 47,789) ( 5,709,479) 6,288,379

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals 28,597 - - - 60,477 89,074 Insurance Proceeds 139,131 - - - 11,053 150,184 Subscription-Based IT Arrangements 38,000 - - - - 38,000 Transfers In 2,165,911 10,925,521 4,015,480 47,789 9,380,073 26,534,774 Transfers Out ( 24,853,114) - - - ( 2,165,911) ( 27,019,025) Other Financing Sources (Uses) ( 22,481,475) 10,925,521 4,015,480 47,789 7,285,692 ( 206,993) Change in Fund Balances 8,710,419 ( 5,279,854) 1,074,608 - 1,576,213 6,081,386

Fund Balances, July 1 68,803,759 61,334,555 5,434,962 - 30,451,625 166,024,901 Fund Balances, June 30 $ 77,514,178 $ 56,054,701 $ 6,509,570 $ - $ 32,027,838 $ 172,106,287 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, 2024

Net change in fund balance - Governmental Funds $ 6 ,081,386 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 10,863,504 Current year disposals of capital assets (684,764) Depreciation expenses recorded in the Statement of Activities (7,940,275) 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 (229,388) 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 (61,784) Change in Income Tax Deferred Inflows 559,063 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 (10,292) 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 8,765,592 Bond Premium amortization 872,744 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 344,199 Accrued Interest Payable - leases (8,137) Accrued Interest Payable - Subscription 6,885 Lease Liability 62,314 Subscription Liability 273,045

OPEB 2,157,670

Net pension liability - Maryland State Pension (9,151,952) Net LOSAP Liability (3,422,375) Accrued Compensated Absences (522,872) Deferred outflow of resources - OPEB (711,463) Deferred outflow of resources - Maryland State Pension 7,290,563 Deferred outflow of resources - LOSAP (394,123) Deferred outflow of resources - Refunding (81,841) Deferred inflow of resources - OPEB 2,117,206 Deferred inflow of resources - Maryland State Pension 1,178,081

Deferred inflow of resources - LOSAP 366,358 Deferred inflow of resources - Refunding 20,365 Change in Net Position - governmental activities $ 17,739,709 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, 2024

SANITARY DISTRICT

SEWER WATER RESTRICTED DEBT SERVICE

ASSETS OPERATIONS OPERATIONS FUND FUND TOTAL

Current Assets Unrestricted Equity in Pooled Cash $ 2,535,638 $ 7,369,108 $ - $ - $ 9,904,746 Prepaid Items - - - - - Accounts Receivable (Net) 410,174 85,589 - - 495,763 Due from Other Governments - - - - - Lease receivable - 1,419,931 - - 1,419,931 Inventories 752,307 - - - 752,307 Restricted Restricted Equity in Pooled Cash - - 26,185,033 2,170,557 28,355,590 Restricted Accounts Receivable (Net) - - 2,745,269 754,100 3,499,369

Total Current Assets 3,698,119 8,874,628 28,930,302 2,924,657 44,427,706 Noncurrent Assets Restricted Special Assessments Receivable (Net) - - 706,812 18,552,518 19,259,330 Total Noncurrent Restricted Assets - - 706,812 18,552,518 19,259,330 Capital and Intangible Assets 152,659,989 43,326,321 - - 195,986,310 Less Accumulated Depreciation and Amortization ( 62,035,890) ( 14,684,693) - - ( 76,720,583)

Total Capital Assets, Net 90,624,099 28,641,628 - - 119,265,727 Total Assets 94,322,218 37,516,256 29,637,114 21,477,175 182,952,763

DEFERRED OUTFLOWS OF RESOURCES

OPEB 85,717 35,229 - - 120,946

Pension Benefits 1,266,973 367,231 - - 1,634,204 Deferred Charge on Refunding - - - - - Total Deferred Outflows of Resources 1,352,690 402,460 - - 1,755,150

LIABILITIES

Current Liabilities Payable from Unrestricted Assets Accounts Payable 725,490 111,437 75 - 837,002 Accrued Interest Payable 118,431 - - - 118,431 Escrow Deposits - - - - - Due to Other Funds - - - - - Unearned Revenue 86,934 - - - 86,934 Current Portion of Compensated Absences 226,847 57,660 - - 284,507 Current Portion of Lease Payable - - - - - Current Portion of Bonds/Notes Payable 2,137,805 - - - 2,137,805

Total Current Liabilities 3,295,507 169,097 75 - 3,464,679 Noncurrent Liabilities Payable from Unrestricted Assets Compensated Absences 157,944 40,147 - - 198,091

OPEB 3,824,440 1,282,222 - - 5,106,662

Net Pension Liability 2,421,117 669,406 - - 3,090,523 Lease Payable - - - - - Bonds/Notes Payable 32,860,126 - - - 32,860,126 Total Noncurrent Liabilities 39,263,627 1,991,775 - - 41,255,402 Total Liabilities 42,559,134 2,160,872 75 - 44,720,081

DEFERRED INFLOWS OF RESOURCES

OPEB 1,246,745 305,570 - - 1,552,315

Pension Benefits 265,824 89,479 - - 355,303 Bond Refundings - - - - - Water and Sewer Assessments - - 706,812 18,552,520 19,259,332 Lease receivable - 1,388,119 - - 1,388,119 Total Deferred Inflows of Resources 1,512,569 1,783,168 706,812 18,552,520 22,555,069

NET POSITION

Net Investment in Capital Assets 55,147,600 28,641,628 - - 83,789,228 Amounts Restricted for:

Debt Service - - - 2,924,655 2,924,655 Unrestricted Amounts (Deficit) ( 3,544,395) 5,333,048 28,930,227 - 30,718,880 Total Net Position $ 51,603,205 $ 33,974,676 $ 28,930,227 $ 2,924,655 $ 117,432,763 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, 2024

(CONTINUED)

TOTAL

PRIMARY

NON-MAJOR GOVERNMENT

BAY BRIDGE ENTERPRISE ENTERPRISE

AIRPORT FUNDS FUNDS

$ 1,868,339 $ 859,726 $ 12,632,811

- 2,520 2,520

63,470 90,990 650,223 2,653 14,999 17,652 429,779 - 1,849,710 57,676 8,104 818,087

- - 28,355,590

- - 3,499,369

2,421,917 976,339 47,825,962

- - 19,259,330

- - 19,259,330

29,187,036 11,551,003 236,724,349 ( 7,340,920) ( 2,794,084) ( 86,855,587) 21,846,116 8,756,919 149,868,762 24,268,033 9,733,258 216,954,054 1,082 4,883 126,911 51,039 141,958 1,827,201 3,096 441 3,537 55,217 147,282 1,957,649 380,027 87,754 1,304,783 15,818 9,015 143,264 25,532 - 25,532 875,336 185,929 1,061,265 16,681 9,801 113,416 26,543 40,375 351,425

- 27,922 27,922

120,079 80,876 2,338,760 1,460,016 441,672 5,366,367 18,481 28,111 244,683 255,356 228,350 5,590,368 98,931 247,332 3,436,786

- 82,792 82,792

1,187,651 622,921 34,670,698 1,560,419 1,209,506 44,025,327 3,020,435 1,651,178 49,391,694 14,898 56,958 1,624,171 9,856 37,679 402,838 252 1,338 1,590

- - 19,259,332

430,080 - 1,818,199 455,086 95,975 23,106,130 20,210,189 7,941,511 111,940,928 1,222,838 - 4,147,493 ( 585,298) 191,876 30,325,458 $ 20,847,729 $ 8,133,387 $ 146,413,879 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, 2024

SANITARY DISTRICT

SEWER WATER RESTRICTED DEBT SERVICE

OPERATIONS OPERATIONS FUND FUND TOTAL

OPERATING REVENUES

Charges for Services $ 7,522,670 $ 3,206,391 $ 2 ,221,123 $ 1 ,211,906 $ 14,162,090 Intergovernmental 201,105 1,357,242 658,750 3 48,750 2,565,847 Material Sales - 23,650 - - 23,650 Miscellaneous Revenues 224,056 203,632 - - 427,688 Total Operating Revenues 7,947,831 4,790,915 2 ,879,873 1 ,560,656 17,179,275

OPERATING EXPENSES

Cost of Sales and Services Collection 3,993,916 - - - 3,993,916 Distribution - 393,570 - - 393,570 Treatment 1,937,597 1,465,595 - - 3,403,192 Shop 279,633 117,231 - - 396,864 Airport - - - - - Recreation - - - - - Total Cost of Sales and Services 6,211,146 1,976,396 - - 8,187,542 Administration and Inspection 2,183,951 768,482 - - 2,952,433

OPEB ( 360,048) (59,448) - - ( 419,496)

Pension Liability Adjustment 58,113 (3,165) - - 54,948 Depreciation and amortization 2,884,264 873,127 - - 3,757,391 Total Operating Expenses 10,977,426 3,555,392 - - 14,532,818 Operating Income (Loss) ( 3,029,595) 1,235,523 2 ,879,873 1 ,560,656 2,646,457

NON-OPERATING REVENUES (EXPENSES)

Investment Income 289,129 161,252 1 ,032,233 2 47,854 1,730,468 Interest Expense ( 400,163) - - - ( 400,163) Loss on Disposal of Capital Assets (8,366) (7,910) - - (16,276) Total Non-Operating Revenues (Expenses) ( 119,400) 153,342 1 ,032,233 2 47,854 1,314,029 Income (Loss) Before Contributions and Transfers ( 3,148,995) 1,388,865 3 ,912,106 1 ,808,510 3,960,486 Capital Contributions, Fees and Grants 1,133,649 1,473,570 - - 2,607,219

Transfer of Capital Asset (to) from Governmental Fund - - - - -

TRANSFERS

Transfers In 2,520,507 1,782,287 - 1 ,039,588 5,342,382 Transfers Out - - (2,821,875) (2,520,507) ( 5,342,382) Net Transfers In (Out) 2,520,507 1,782,287 (2,821,875) (1,480,919) - Change in Net Position 505,161 4,644,722 1 ,090,231 3 27,591 6,567,705 Total Net Position - Beginning of Year 51,098,044 29,329,954 2 7,839,996 2 ,597,064 110,865,058 Total Net Position - End of Year $ 51,603,205 $ 33,974,676 $ 2 8,930,227 $ 2 ,924,655 $ 117,432,763

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, 2024

(CONTINUED)

TOTAL

PRIMARY

NON-MAJOR GOVERNMENT

BAY BRIDGE ENTERPRISE ENTERPRISE

AIRPORT FUNDS FUNDS

$ 6,049 $ 1,185,610 $ 15,353,749

- 14,999 2,580,846

175,686 59,280 258,616 442,447 39,166 909,301 624,182 1,299,055 19,102,512

- - 3,993,916

- - 393,570

- - 3,403,192

- - 396,864

419,523 - 419,523

- 1,169,821 1,169,821

419,523 1,169,821 9,776,886

- - 2,952,433

(4,086) (13,421) ( 437,003) 3,153 (9,602) 48,499 479,821 231,263 4,468,475 898,411 1,378,061 16,809,290 ( 274,229) (79,006) 2,293,222 2,207 - 1,732,675 (67,772) (19,142) ( 487,077) (5,276) - (21,552) (70,841) (19,142) 1,224,046 ( 345,070) (98,148) 3,517,268 5,028,713 - 7,635,932

- - -

59,251 425,000 5,826,633

- - ( 5,342,382)

59,251 425,000 484,251 4,742,894 326,852 11,637,451 16,104,835 7,806,535 134,776,428 $ 20,847,729 $ 8,133,387 $ 146,413,879 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, 2024

SANITARY DISTRICT

SEWER WATER RESTRICTED DEBT SERVICE

OPERATIONS OPERATIONS FUND FUND TOTAL

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers and users $ 7 ,599,640 $ 3 ,256,689 $ 2 ,552,604 $ 1 ,351,057 $ 1 4,759,990 Receipts from other operating sources 332,048 1 ,422,287 658,825 348,750 2 ,761,910 Payments to suppliers (3,384,047) (1,571,157) - - (4,955,204) Payments to employees and on behalf of employees (5,381,868) (1,245,071) - - (6,626,939) Net Cash Provided (Used) by Operating Activities ( 834,227) 1 ,862,748 3 ,211,429 1 ,699,807 5 ,939,757

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers in from other funds 2 ,520,507 1 ,782,287 - 1 ,039,588 5 ,342,382 Transfers to other funds - - (2,821,875) (2,520,507) (5,342,382) Principal paid on interfund loans - - - - - Net Cash Provided (Used) by Noncapital Financing Activities 2 ,520,507 1 ,782,287 (2,821,875) (1,480,919) -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Proceeds from capital grants - - - - - Proceeds from capital debt 1 ,794,266 - - - 1 ,794,266 Proceeds from the disposition of capital assets 93 - - - 93 Proceeds from lease receivable - 129,385 - - 129,385 Principal paid on capital debt (2,118,911) - - - (2,118,911) Repayment of lease payable ( 6,397) - - - ( 6,397) Issuance of long-term debt 101,834 - - - 101,834 Interest paid on capital debt ( 401,606) - - - ( 401,606)

Acquisition and construction of capital assets (4,893,213) (3,180,851) - - (8,074,064) Net Cash Used by Capital and Related Financing Activities (5,523,934) (3,051,466) - - (8,575,400)

CASH FLOWS FROM INVESTING ACTIVITIES

Investment Income 289,129 161,252 1 ,032,233 247,854 1 ,730,468 Net Cash Provided by Investing Activities - Investment Income 289,129 161,252 1 ,032,233 247,854 1 ,730,468 Net Increase (Decrease) in Cash and Cash Equivalents (3,548,525) 754,821 1 ,421,787 466,742 ( 905,175) Balances - Beginning of the year 6 ,084,163 6 ,614,287 2 4,763,246 1 ,703,815 3 9,165,511 Balances - End of the year $ 2 ,535,638 $ 7 ,369,108 $ 2 6,185,033 $ 2 ,170,557 $ 3 8,260,336

Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ (3,029,595) $ 1 ,235,523 $ 2 ,879,873 $ 1 ,560,656 $ 2 ,646,457 Adjustments to reconcile operating income (loss) to net cash provided by operating activities:

Depreciation and amortization 2 ,884,264 873,127 - - 3 ,757,391 Lease revenue - deferred inflow - ( 138,587) - - ( 138,587) (Increase) decrease in assets:

Accounts receivable, net 76,970 26,648 331,481 139,150 574,249 Special assessments receivable, net - - 244,630 (3,070,562) (2,825,932) Due from Other Governments - - - - - Inventories 23,954 - - - 23,954 Increase (decrease) in liabilities:

Accounts payable ( 423,387) ( 74,543) 75 - ( 497,855) Escrow deposits - - - - - Unearned revenue ( 93,113) - ( 244,630) 3 ,070,563 2 ,732,820 Compensated absences 28,615 3,194 - - 31,809

OPEB ( 360,048) ( 59,448) - - ( 419,496)

Pension Obligation 58,113 ( 3,166) - - 54,947 Net Cash Provided (Used) by Operating Activities $ (834,227) $ 1 ,862,748 $ 3 ,211,429 $ 1 ,699,807 $ 5 ,939,757 Noncash investing, capital and financing activities:

Contributed Capital Assets $ 1 ,133,649 $ 1 ,473,570 $ - $ - $ 2 ,607,219 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, 2024

(CONTINUED)

TOTAL

PRIMARY

NON-MAJOR GOVERNMENT

BAY BRIDGE ENTERPRISE ENTERPRISE

AIRPORT FUNDS FUNDS

$ 147,232 $ 1 ,219,991 $ 1 6,127,213 121,585 120,578 3 ,004,073

- ( 697,849) (5,653,053)

( 162,669) ( 522,157) (7,311,765) 106,148 120,563 6 ,166,468 59,251 425,000 5 ,826,633

- - (5,342,382)

( 59,881) ( 108,118) ( 167,999) (630) 316,882 316,252 468,970 - 468,970

- - 1 ,794,266

- - 93

57,676 - 187,061 ( 117,102) ( 105,003) (2,341,016)

- - ( 6,397)

- - 101,834

( 68,318) ( 20,067) ( 489,991) (6,615,426) ( 273,527) (14,963,017) (6,274,200) ( 398,597) (15,248,197) 2,207 - 1 ,732,675 2,207 - 1 ,732,675 (6,166,475) 38,848 (7,032,802) 3,006,101 820,878 4 2,992,490 $ (3,160,374) $ 8 59,726 $ 3 5,959,688 $ (274,229) $ ( 79,006) $ 2 ,293,222 479,821 231,263 4 ,468,475 ( 54,690) - ( 193,277) ( 40,535) ( 24,899) 508,815

- - (2,825,932)

- 63,391 63,391

( 9,514) ( 2,586) 11,854 259,693 ( 46,992) ( 285,154) 6,032 - 6,032 ( 266,172) 3,022 2 ,469,670 6,675 (607) 37,877 ( 4,086) ( 13,421) ( 437,003) 3,153 ( 9,602) 48,498 $ 106,148 $ 120,563 $ 6 ,166,468 $ - $ - $ 2 ,607,219 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, 2024

PRIVATE OTHER

PURPOSE POST-

TRUST FUND EMPLOYMENT

TAX SALE BENEFIT CUSTODIAL

DEPOSITS TRUST FUND FUNDS

ASSETS

Cash and Cash Equivalents $ 322,651 $ 1,368,583 $ 1,283,437 Investments, at Fair Value Debt Securities - 6,267,262 - Fixed Income Fund - 1,060,272 - Mutual and Global Funds - 10,003,319 - International - 3,337,871 - Total Investments - 20,668,724 - Total Assets 322,651 22,037,307 1,283,437

LIABILITIES

Accounts Payable and Other Liabilities - 45,851 12,680 Due to Other Governments - - 185,182 Total Liabilities - 45,851 197,862

NET POSITION

Restricted for:

Held in Trust 322,651 - - Other Post-Employment Benefits - 21,991,456 - Individuals, Organizations, and other Governments - - 1,085,575 Total Net Position $ 322,651 $ 21,991,456 $ 1,085,575 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, 2024

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 $ 173,842 $ - $ - Employers - 4,453,230 - Members - 479,979 - Total Contributions 173,842 4,933,209 - Investment Earnings:

Net Change in the Fair Value of Investments - 1,483,303 - Interest - 533,081 - Total Investment Earnings - 2,016,384 - Less Investment Administrative Expenses - 10,094 - Net Investment Earnings - 2,006,290 - Tax Ditch - - 37,360 Zoning Deposits - - 199,777 Tax Collections for Other Governments - - 16,652,672 Motor Vehicle Administration - - 206,879 Escheat - Abandoned Property - - 76,003 Inmate Welfare - - 139,416

Total Additions 173,842 6,939,499 17,312,107

DEDUCTIONS

Distributions to Property Holders 89,355 - - Claims Paid for Other Post-Employment Benefits - 2,326,420 - Administrative Expenses - 91,175 - Distribution of Tax Ditch Funds - - 40,006 Refund of Zoning Deposits - - 104,037 Payments of Tax to Other Governments - - 16,652,672 Payments to Motor Vehicle Administration - - 206,879 Payments of Escheat to Others - - 76,003 Distribution of Inmate Welfare Funds - - 140,532

Total Deductions 89,355 2,417,595 17,220,129 Net Increase in Fiduciary Net Position 84,487 4,521,904 91,978 Net Position-Beginning of Year 238,164 17,469,552 993,597 Net Position-End of Year $ 322,651 $ 21,991,456 $ 1,085,575 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 - 84 10 Leases 84 - 87 11 Subscription-Based Information Technology Arrangements 88

12 Restricted Assets and Liabilities and Fund Balances 89 - 92 13 Risk Management 92 14 Retirement Plans 93 - 101 15 Deferred Compensation Plan 102 16 Other Post-Employment Benefits 102 - 116 17 Volunteer Fireman Pension Plan Length of Service Award Program 117 - 119 18 Deficit Equity Balances 120 19 Commitments, Contingencies, and Subsequent Events 120 - 121 20 Joint Venture 121 21 Pollution Remediation Obligations 122

50

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024

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, 2024

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, 2024

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, 2024

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 9,600 customers.

Water Operations - This fund is used to account for the operation of the water supply system serving approximately 5,400 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, 2024

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, 2024

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, 2024

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.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 amount 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, 2024

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 $79,122,816. 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, 2024, the County has reported outstanding general obligation debt related to assets held by the Board of Education amounting to $43,910,684 (of which $42,317,895 has been spent and the remaining $1,592,789

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, 2024, 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 $ 15,581,891 $ - Economic/community development 3 ,100,606 - Public safety 6 ,452,153 - Conservation of natural resources 2 ,797,415 - Social services 955 - Debt service - 4 ,147,493 Other Purposes - - Total amounts restricted $ 27,933,020 $ 4,147,493 Note that unspent bond proceeds of $5,996,290 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.

60

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024

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, 2024 was

$0.8300 per $100 of assessed value.

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.

62

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 2 - BUDGETS AND BUDGETARY ACCOUNTING (CONTINUED)

During the fiscal year, the Commissioners may adopt supplemental appropriations. For the year ended June 30, 2024, supplemental appropriations were as follows:

Original Final Supplemental Appropriations Budget Budget Increase General Fund - expenditures and transfers $ 183,565,554 $ 196,697,953 $ 13,132,399 Special Revenue Funds that adopt annual budgets Grants Fund - expenditures and transfers $ 2,972,631 $ 3,457,520 $ 484,889 Non-Major Funds that adopt annual budgets - Department of Aging - expenditures and transfers $ 4,046,200 $ 4,673,526 $ 627,326 Housing & Community Services - expenditures and transfers 1,522,032 1,872,051 350,019

Roads Operating - expenditures and transfers 6,213,151 6,407,294 194,143 Community Partnerships for Children - expenditures and transfers 1,371,131 1,335,572 (35,559) Agricultural Transfer - expenditures and transfers 1,425,000 2,699,050 1,274,050 Rural Legacy - expenditures and transfers 1,307,452 1,398,769 91,317 Fire Company Impact Fees - expenditures and transfers 382,700 602,031 219,331 Dredging Special Assessments - expenditures and transfers 47,816 55,766 7,950

Total Special Revenue Funds that adopt annual budgets $ 19,288,113 $ 22,501,579 $ 3,213,466 All final budgets are presented as amended. The County Administrator may approve budget amendments of $100,000 or less throughout the year. Amendments greater than $100,000 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.

63

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $109,246,739 with local banks (carrying value $105,862,836), 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, 2024, the County had investments in MLGIP of $94,234,351, which are recorded at cost, which

approximates fair value.

As of June 30, 2024, 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, 2024, the weighted average maturity (WAM) for the Trust’s money market mutual fund investment was 36 days. At June 30, 2024, 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.

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QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024, of which Queen Anne’s County’s portion was 24.4% of the total:

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

Debt Securities U.S. Treasury Obligations $ - $ 8,115,276 $ - $ 8,115,276 U.S. Governmental Agencies - 5,223,664 - 5,223,664 Corporate & Foreign Bonds - 10,317,988 - 10,317,988 Municipal Obligations - 2,043,971 - 2,043,971 Equity and Mutual Fund Investments Taxable Fixed Income Funds - 4,347,982 - 4,347,982 Mutual Funds 33,686,687 - - 33,686,687 Global Funds 7,335,100 - - 7,335,100 International 13,688,002 - - 13,688,002

Total $ 54,709,789 $ 30,048,881 $ - $ 84,758,670 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.

65

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024:

Investment Maturities (in Years) Less than 1 1 - 5 6 - 10 More than 10 Total Investments with Maturities U.S. Treasury Obligations $ 89,715 $ 1,142,971 $ 2,083,854 $ 4,798,736 $ 8,115,276 U.S. Governmental Agencies - 177,453 439,296 4,606,915 5,223,664 Corporate & Foreign Bonds 184,684 1,191,971 1,620,783 7,320,550 10,317,988 Municipal Obligations - - - 2,043,971 2,043,971 Total $ 274,399 $ 2,512,395 $ 4,143,933 $ 18,770,172 $ 25,700,899

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, 2024, the ratings of the underlying investments of the Trust’s

investments were as follows:

Rating Baa1/Baa2/ Type Aaa Aa1/Aa2/ Aa3 A1/A2/A3 Baa3 Not Rated Total U.S. Treasury Obligations $ 7,540,277 $ - $ - $ - $ 574,999 $ 8,115,276 U.S. Governmental Agencies - - - - 5,223,664 5,223,664 Corporate & Foreign Bonds 165,928 1,860,253 5,240,382 2,779,504 271,921 10,317,988 Municipal Obligations 393,863 1,428,144 86,424 - 135,540 2,043,971 Total $ 8,100,068 $ 3,288,397 $ 5,326,806 $ 2,779,504 $ 6,206,124 $ 25,700,899

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, 2024, 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, 2024:

Interest Fair Value Rate Range U.S. Treasury Obligations $ 8,115,276 2.25 to 4.88% U.S. Governmental Agencies 5,223,664 1.3 to 5.0% Corporate & Foreign bonds 10,317,988 1.7 to 6.2% Municipal Obligations 2,043,971 2.44 to 6.72% Taxable Fixed Income Funds 4,347,982 N/A Mutual Funds 33,686,687 N/A Global Funds 7,335,100 N/A International 13,688,002 N/A Total $ 84,758,670 66

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024 that exceeded 5% of the total investment balance as of June 30, 2024:

Name Amount

VANGUARD 500 INDEX CL ADML $ 8,607,060

NEW WORLD FUND-R6 7,335,100

FULLERTHALER BEHAVIORAL SC EQ R6 6,889,333

TRANSAMERICA TS&W INTERNATIONAL EQ-IS 6,864,353

LAZARD INTERNATIONAL STRATEGIC EQUITY FD CL-I 6,823,648

ISHARES MSCI USA QUALITY FACTOR ETF 5,655,059

VANGUARD MID-CAP INDEX FUND ADMIRAL SHARES 4,506,264

BLACKROCK HIGH YIELD INSTL 4,347,982

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, 2024, as the Trust did not have any investments denominated in foreign currencies.

For the year ended June 30, 2024, the annual money-weighted rate of return on investments, net of expense, was 6.5%. 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, 2024

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, 2024 is $6,120,385 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 $12,739,845, including $300,000 in certificates of deposit and excluding the carrying amount of fiduciary funds. At June 30, 2024, the Board had deposits of approximately $14.2 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 $1,460,275 and the balance per bank records totaled $1,477,050. Of the bank balances, $1,210,257 was secured by the FDIC and up to $940,827 was available to be 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 $ 7,418,478 $ - General Capital Projects 6 47,542 - Roads Capital Projects 1 93,482 - Grants Fund - - Non-Major Governmental Funds 9 33,171 - Major Enterprise Funds Sanitary District - 1 ,730,468 Bay Bridge Airport - 2,207 Non-Major Enterprise Funds - - Total Investment Income $ 9,192,673 $ 1,732,675

68

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 4 - ACCOUNTS RECEIVABLE

Receivables as of June 30, 2024 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 $ 314,838 $ - $ - $ - $ - $ 314,838 $ - $ 314,838 Taxes - Other 792,726 - - - - 792,726 - 792,726 Subtotal Taxes Receivable (Net) 1,107,564 - - - - 1,107,564 - 1,107,564

Other Accounts Receivable:

QAC - PHA - 7 33,121 - - - 733,121 - 733,121

Sanitary District - User and Septage Fees - - - - - - 495,763 495,763 Airport - Fuel Sales, User and Rental Fees - - - - - - 63,470 63,470 Miscellaneous Receivables 481,785 5 9,515 - 13,927 109,993 665,220 90,990 756,210 Subtotal Accounts Receivable (Net) 481,785 7 92,636 - 13,927 109,993 1,398,341 650,223 2,048,564 Loans Receivable - - - - 6,338,809 6,338,809 - 6,338,809 Special Assessments - - 2 2,901 - 559,554 582,455 - 582,455

Intergovernmental Income Taxes Held by State 42,169,653 - - - - 42,169,653 - 42,169,653 Grants Receivable 198,307 6 30,918 - 666,228 1,078,353 2,573,806 17,652 2,591,458 Recordation Tax 1,606,310 - - - - 1,606,310 - 1,606,310 State-Highway User Tax - - - - 426,179 426,179 - 426,179 Subtotal Due from Other Governments 43,974,270 6 30,918 - 666,228 1,504,532 46,775,948 17,652 46,793,600 Restricted Receivables

Accounts Receivable (Net) - - - - - - 3,499,369 3,499,369 Special Assessments Receivable (Net) - - - - - - 19,259,330 19,259,330 Subtotal Restricted Receivables - - - - - - 22,758,699 22,758,699 Total Receivables $ 4 5,563,619 $ 1,423,554 $ 22,901 $ 680,155 $ 8,512,888 $ 56,203,117 $ 23,426,574 $ 7 9,629,691 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 $2.9 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, 2024

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 $6,338,809 relate to the Housing and Community Services, Impact Fees, and Revolving Loan Special Revenue Funds. Loans receivable in the amount of $6,194,339 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 $50,000 are also repaid over a number of years. The remaining loan receivable balance of $94,470 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 $42,169,653 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 $582,455 represent receivables for governmental activities. Part of this amount consists of $22,901 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 $559,554 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 $19,259,330 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 $ 9 ,215 $ - $ - $ - $ - $ 9 ,215 $ - Inspection Fees Collected in Advance - - - - - - 8 6,934 Grant Drawdowns in excess of Expenditures - - - 2,964,092 816,137 3,780,229 - Miscellaneous 4,793 - - - - 4,793 2 6,482

Total Unearned Revenue $ 14,008 $ - $ - $ 2 ,964,092 $ 816,137 $ 3,794,237 $ 113,416 70

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 6 – CAPITAL ASSETS

PRIMARY GOVERNMENT

Changes in the County’s capital assets for governmental activities for the year ended June 30, 2024 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, 2023 Increases Transfers Decreases June 30, 2024 Capital Assets, not being depreciated:

Land $ 38,885,316 $ 64,148 $ - $ - $ 38,949,464 Intangible Rights - Easements 821,819 - - - 821,819 Land Improvements 3,714,283 614,458 - - 4,328,741 Construction in Progress 11,539,664 2,654,397 (10,849,974) (465,260) 2,878,827 Land - Inexhaustible Infrastructure Improvements 43,890,863 - - - 43,890,863 Total Capital Assets, not being depreciated 98,851,945 3,333,003 (10,849,974) (465,260) 90,869,714

Capital Assets, being depreciated:

Buildings and Building Improvements 72,469,070 507,377 7,218,050 - 80,194,497 Improvements other than Buildings 21,706,233 2,992,557 609,297 (72,237) 25,235,850 Vehicles 17,628,097 1,662,639 - (765,616) 18,525,120 Equipment 17,153,389 1,784,052 1,183,399 (580,834) 19,540,006 Furniture and Fixtures 13,355,926 545,876 1,839,228 (244,410) 15,496,620 Infrastructure Improvements - Depreciable 18,711,533 - - - 18,711,533

Right-to-use asset 638,500 - - - 638,500 Subscription asset 1,503,069 38,000 - - 1,541,069 Total Capital Assets, being depreciated 163,165,817 7,530,501 10,849,974 (1,663,097) 179,883,195 Less Accumulated Depreciation for:

Buildings and Building Improvements 22,165,310 1,700,695 - - 23,866,005 Improvements other than Buildings 6,273,536 1,194,727 - (72,237) 7,396,026 Vehicles 10,422,813 1,655,269 - (730,038) 11,348,044 Equipment 9,829,281 1,200,378 - (475,384) 10,554,275 Furniture and Fixtures 6,973,920 1,498,607 - (165,934) 8,306,593 Infrastructure Improvements - Depreciable 10,459,007 298,976 - - 10,757,983 Right-to-use asset 67,655 67,654 - - 135,309

Subscription asset 311,303 323,969 - - 635,272 Total Accumulated Depreciation 66,502,825 7,940,275 - (1,443,593) 72,999,507 Total Capital Assets, being depreciated, net 96,662,992 (409,774) 10,849,974 (219,504) 106,883,688 Governmental activities Capital Assets, net $ 195,514,937 $ 2,923,229 $ - $ (684,764) $ 197,753,402 71

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024 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, 2023 Increases Transfers Decreases June 30, 2024 Capital Assets, not being depreciated:

Land $ 10,916,330 $ - $ - $ - $ 10,916,330 Land Improvements 9 ,500 - - - 9 ,500 Intangible Rights 6 ,140 - - - 6 ,140 Construction in Progress 8,202,979 5,906,155 (7,503,402) (5,825) 6,599,907 Land - Inexhaustible Infrastructure Improvements 2,481,094 - - - 2,481,094 Total Capital Assets, not being depreciated 21,616,043 5,906,155 (7,503,402) (5,825) 20,012,971 Capital Assets, being depreciated:

Buildings and Improvements to Buildings 16,205,773 - - - 16,205,773 Improvements other than Buildings 17,534,435 1,272,934 - - 18,807,369 Vehicles 2,019,358 - - - 2,019,358 Equipment 24,831,713 151,466 108,290 (33,900) 25,057,569 Furniture and Fixtures 72,375 - - - 72,375 Infrastructure Improvements - Depreciable 136,771,395 10,239,681 7,395,112 - 154,406,188 Right-to-use asset 181,055 - - (38,309) 142,746

Total Capital Assets, being depreciated 197,616,104 11,664,081 7,503,402 (72,209) 216,711,378 Less Accumulated Depreciation for:

Buildings and Improvements to Buildings 10,961,257 275,433 - - 11,236,690 Improvements other than Buildings 8,346,604 612,976 - - 8,959,580 Vehicles 1,489,754 120,263 - - 1,610,017 Equipment 16,877,055 541,705 - (18,080) 17,400,680 Furniture and Fixtures 29,216 6 ,786 - - 36,002 Infrastructure Improvements - Depreciable 44,702,934 2,876,378 - - 47,579,312 Right-to-use asset 36,681 34,934 - (38,309) 33,306

Total Accumulated Depreciation 82,443,501 4,468,475 - (56,389) 86,855,587 Total Capital Assets, being depreciated, net 115,172,603 7,195,606 7,503,402 (15,820) 129,855,791 Business-Type activities Capital Assets, net $ 136,788,646 $ 13,101,761 $ - $ (21,645) $ 149,868,762 72

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $ 1,452,829 $ - Public Safety 2,819,970 - Public Works 1,599,077 - Parks & Recreation 1,400,288 - Health and Social Services 354,367 - Education and Library 190,735 - Conservation of Natural Resources 76,226 - Economic/Community Development 46,783 - Major Enterprise Funds:

Sanitary District - 3 ,757,391 Bay Bridge Airport - 4 79,821 Non-Major Enterprise Funds - 2 31,263 Total amounts restricted $ 7,940,275 $ 4,468,475 73

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 6 – CAPITAL ASSETS (CONTINUED)

COMPONENT UNITS

Board of Education: Capital asset activity for the year ended June 30, 2024 is as follows:

Balance Balance Board of Education June 30, 2023 Increases Transfers Decreases June 30, 2024 Capital Assets, not being depreciated:

Land $ 6,363,040 $ - $ - $ - $ 6,363,040 Construction in Progress 2,400,763 9,579,148 (1,855,834) - 10,124,077 Total Capital Assets, not being depreciated 8,763,803 9,579,148 (1,855,834) - 16,487,117 Capital Assets, being depreciated:

Land Improvements 5,410,966 - - (12,045) 5,398,921 Buildings 212,430,850 9,127,028 1,285,693 (10,160) 222,833,411 Furniture, Fixtures, and Equipment 19,478,370 2,370,918 570,141 (285,771) 22,133,658 Leased Equipment 379,187 1,663,732 - - 2,042,919 Total Capital Assets, being depreciated 237,699,373 13,161,678 1,855,834 (307,976) 252,408,909 Less Accumulated Depreciation for:

Land Improvements 5,026,712 90,868 - (7,519) 5,110,061 Buildings 81,971,537 3,402,049 - (10,160) 85,363,426 Furniture, Fixtures, and Equipment 14,676,153 1,477,084 - (285,771) 15,867,466 Leased Equipment 87,546 491,813 - - 579,359 Total Accumulated Depreciation 101,761,948 5,461,814 - (303,450) 106,920,312 Total Capital Assets, being depreciated, net 135,937,425 7,699,864 1,855,834 (4,526) 145,488,597

Capital Assets, net $ 144,701,228 $ 17,279,012 $ - $ (4,526) $ 161,975,714 74

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 6 – CAPITAL ASSETS (CONTINUED)

COMPONENT UNITS (CONTINUED)

Queen Anne’s County Free Library: Capital asset activity for the year ended June 30, 2024 is as follows:

Balance Balance Library June 30, 2023 Increases Transfers Decreases June 30, 2024 Capital Assets, not being depreciated:

Artwork $ 29,850 $ - $ - $ - $ 29,850 Total Capital Assets, not being depreciated 29,850 - - - 29,850 Capital Assets, being depreciated:

Books and Media 1,857,643 186,750 - (143,250) 1,901,143 Building Improvements 402,207 - - - 402,207 Equipment 543,455 120,294 - (29,391) 634,358 Right-to-use 27,018 - - - 27,018 Total Capital Assets, being depreciated 2,830,323 307,044 - (172,641) 2,964,726 Less Accumulated Depreciation 1,187,303 258,856 - (171,094) 1,275,065 Total Capital Assets, being depreciated, net 1,643,020 48,188 - (1,547) 1,689,661

Capital Assets, net $ 1,672,870 $ 48,188 $ - $ (1,547) $ 1,719,511

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, 2024:

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 $ 392,417 $ - $ - $ - $ - $ 206,488 $ - $ - $ 185,929 $ 392,417 General Capital Projects 875,336 - - - - - - 875,336 - 875,336 Roads Capital - - - - - - - - - - Grants Fund - - - - - - - - - - Non-Major Governmental - - - - - - - - - -

Sanitary District - - - - - - - - - - Bay Bridge Airport - - - - - - - - - - Non-Major Enterprise - - - - - - - - - - Total Due To Fund $ 1,267,753 $ - $ - $ - $ - $ 206,488 $ - $ 875,336 $ 185,929 $ 1,267,753 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, 2024

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 enterprise funds are to pay for a portion of debt service related to an Airport project and also to provide funding to the Golf Course and Public Landings Funds for capital projects. The transfers from non-major governmental funds provide funding from the Impact Fee Funds to the General Fund. The transfers from

Restricted and Debt Service Sanitary funds are to cover Sanitary related debt service.

The following interfund transfers were made during the fiscal year ended June 30, 2024:

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 $ 2 4,853,114 $ - $ 10,925,521 $ 4 ,015,480 $ 47,789 $ 9,380,073 $ - $ 59,251 $ 425,000 $ 24,853,114 General Capital Projects - - - - - - - - - - Roads Capital - - - - - - - - - - Grants Fund - - - - - - - - - -

Non-Major Governmental 2,165,911 2,165,911 - - - - - - - 2,165,911 Sanitary District 5,342,382 - - - - - 5,342,382 - - 5,342,382 Bay Bridge Airport - - - - - - - - - - Non-Major Enterprise - - - - - - - - - - Total Transfers Out $ 3 2,361,407 $ 2,165,911 $ 10,925,521 $ 4 ,015,480 $ 47,789 $ 9,380,073 $ 5,342,382 $ 59,251 $ 425,000 $ 32,361,407 Reconciliation of interfund transfers to the Statement of Activities

Governmental Funds Transfers In $ 26,534,774 Enterprise Funds Transfers In $ 5,826,633 Governmental Funds Transfers Out (27,019,025) Enterprise Funds Transfers Out (5,342,382) Total Governmental Activities $ (484,251) Total Business-Type Activities $ 484,251 76

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 9 - NONCURRENT LIABILITIES

A. CHANGES IN NONCURRENT LIABILITIES

During the year ended June 30, 2024, 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, 2023 of debt Repayments June 30, 2024 One Year One Year General Bonds Payable $ 118,286,425 $ - $ 8,421,894 $ 109,864,531 $ 8,773,919 $ 101,090,612 General Bonds Payable - Related to PHA 4 43,007 - 66,494 376,513 69,776 306,737 General Bonds Payable - Related to Ches College 3,088,165 - 2 29,388 2,858,777 237,963 2,620,814

Notes Payable 6 08,141 - 47,816 560,325 47,816 512,509 Bond Premiums 10,434,055 - 8 72,744 9,561,311 896,178 8,665,133 Subtotal Governmental Activities Debt 132,859,793 - 9 ,638,336 1 23,221,457 10,025,652 1 13,195,805 Lease Liability 6 14,668 - 62,314 552,354 55,401 496,953 Subscription Liability 1,178,880 - 2 73,045 905,835 317,607 588,228

OPEB 26,810,247 - 2 ,157,670 2 4,652,577 - 2 4,652,577

Net Pension Liability 32,570,299 9,151,952 - 4 1,722,251 - 4 1,722,251 LOSAP Liability 7,757,868 3,422,375 - 1 1,180,243 391,181 1 0,789,062 Compensated Absences 3,625,663 2,667,813 2,144,941 4,148,535 2,445,694 1,702,841 Total Governmental Activities Debt $ 205,417,418 $ 15,242,140 $ 14,276,306 $ 206,383,252 $ 1 3,235,535 $ 193,147,717 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 $ 8,421,894 General Bonds Payable - PHA 6 6,494 Payments made by PHA - Notes Payable 4 7,816 Total Principal Payments $ 8,536,204 77

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 9 – NONCURRENT LIABILITIES (CONTINUED)

A. CHANGES IN NONCURRENT LIABILITIES (CONTINUED)

During the year ended June 30, 2024, 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, 2023 of debt Repayments June 30, 2024 One Year One Year Golf Course $ 7 9,904 $ - $ 4,419 $ 75,485 $ 4,674 $ 70,811 Bay Bridge Airport 1 ,356,694 - 109,618 1,247,076 112,594 1,134,482 Public Landings and Marinas 6 20,806 - 63,186 557,620 66,074 491,546 Sanitary District 3 5,322,576 1 ,794,266 2,118,911 34,997,931 2,137,805 32,860,126

Subtotal Debt 3 7,379,980 1 ,794,266 2,296,134 36,878,112 2,321,147 34,556,965 Bond Premiums Golf Course 5 ,076 - 362 4,714 362 4,352 Bay Bridge Airport 6 8,138 - 7,484 60,654 7,485 53,169 Public Landings and Marinas 7 5,744 - 9,766 65,978 9,766 56,212 Subtotal Bond Premiums 1 48,958 - 17,612 131,346 17,613 113,733 Subtotal Business-Type Activities Debt 3 7,528,938 1 ,794,266 2,313,746 37,009,458 2,338,760 34,670,698

Lease Liability 1 44,381 - 33,667 110,714 27,922 82,792

OPEB 5 ,854,976 - 264,608 5,590,368 - 5,590,368

Net Pension Liability 2 ,690,703 7 46,083 - 3,436,786 - 3,436,786 Compensated Absences 5 58,231 3 30,249 292,372 596,108 351,425 244,683 Total Business-Type Activities Debt $ 4 6,777,229 $ 2 ,870,598 $ 2,904,393 $ 46,743,434 $ 2,718,107 $ 44,025,327 During the year ended June 30, 2024, 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, 2023 of debt Repayments June 30, 2024 One Year One Year Board of Education Compensated Absences $ 1 ,117,223 $ 1 88,860 $ - $ 1,306,083 $ - $ 1,306,083 Financed Purchases 1 ,170,001 2 31,076 230,202 1,170,875 253,758 917,117 Intangible Right-to-Use Leases 2 96,921 1 ,663,732 466,748 1,493,905 484,251 1,009,654

OPEB 1 38,003,570 2 ,816,290 - 140,819,860 - 140,819,860

Net Pension Liability 5 ,892,271 1 ,005,861 - 6,898,132 - 6,898,132 Subtotal 1 46,479,986 5 ,905,819 696,950 151,688,855 738,009 150,950,846 Free Library Lease Payable 8 ,337 - 5,735 2,602 2,602 -

OPEB 5 30,861 - 10,475 520,386 - 520,386

Subtotal 5 39,198 - 16,210 522,988 2,602 520,386 Total Component Units Debt $ 1 47,019,184 $ 5 ,905,819 $ 713,160 $ 152,211,843 $ 740,611 $ 151,471,232 Long-term liabilities are normally paid from the General fund.

78

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 17.

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 16, 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 14, 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.

79

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024, 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 2024 One Year One Year General Obligation Bonds Payable 2014 Public Facilities General 2.00%-4.00% 2034 $ 17,590,000 $ 9,880,645 $ 822,461 $ 9,058,184 2015 Public Facilities General 3.00%-5.00% 2036 11,622,756 7 ,963,446 528,380 7 ,435,066 2015 Refunding Bonds General 2.00%-5.00% 2027 13,521,625 4 ,625,055 1,496,484 3 ,128,571

2016 Public Facilities General 2.00%-4.00% 2036 13,934,364 10,259,515 635,326 9 ,624,189 2017 Public Facilities General 3.00%-5.00% 2037 12,600,000 9 ,935,000 530,000 9 ,405,000 2018 Public Facilities General 3.00%-5.00% 2038 16,000,000 13,260,000 635,000 12,625,000 2019 Public Facilities General 3.00%-5.00% 2039 11,000,000 9 ,515,000 415,000 9 ,100,000 2019 Refunding Bonds General 4.00%-5.00% 2029 14,236,594 9 ,405,572 1,380,292 8 ,025,280

2020 Public Facilities General 2.00%-5.00% 2040 9,000,000 8 ,077,500 334,069 7 ,743,431 2021 Public Facilities General 1.50%-5.00% 2041 13,000,000 11,501,355 638,964 10,862,391 2021 Refunding Bonds General 1.50%-5.00% 2030 10,835,995 8 ,031,443 967,943 7 ,063,500 2022 Public Facilities General 3.375%-5.00% 2043 7,800,000 7 ,410,000 390,000 7 ,020,000 2015 Refunding Facilities (2006 Bonds) Due from PHA 2.00%-3.00% 2027 240,112 82,129 26,574 55,555

2019 Refunding Facilities (2009 Bonds) Due from PHA 4.00%-5.00% 2029 445,590 2 94,384 43,202 2 51,182 2014 Public Facilities Due from other Counties 2.00%-4.00% 2034 4,800,000 2 ,858,777 237,963 2 ,620,814 Subtotal Bonds Payable 113,099,821 9,081,658 104,018,163 Notes Payable State of Maryland - Grove Ck. Spec. Rev. 0.00% 2034 510,617 2 04,242 20,425 1 83,817 State of Maryland - Narrows Pointe Spec. Rev. 0.00% 2037 525,318 3 56,083 27,391 3 28,692

Subtotal Notes Payable 5 60,325 4 7,816 5 12,509 Subtotal Bonds and Notes Payable 113,660,146 9,129,474 104,530,672 Bond Premiums 9 ,561,311 896,178 8 ,665,133 Subtotal Governmental Activities Debt 123,221,457 10,025,652 113,195,805 Lease Liability 5 52,354 55,401 4 96,953 Subscription Liability 9 05,835 317,607 5 88,228

OPEB 24,652,577 - 24,652,577

Net Pension Liability 41,722,251 - 41,722,251 LOSAP Liability 11,180,243 391,181 10,789,062 Compensated Absences 4 ,148,535 2,445,694 1 ,702,841 Total Governmental Activities $ 206,383,252 $ 1 3,235,535 $ 193,147,717 80

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024 for governmental activities are as follows:

Governmental Activities Year Ending Governmental Bonds Payable Governmental Notes Payable June 30, Principal Interest Total Principal Interest Total 2025 $ 9 ,081,658 $ 4,019,196 $ 13,100,854 $ 47,816 $ - $ 47,816 2026 9,449,130 3,627,820 1 3,076,950 47,816 - 47,816 2027 9,836,235 3,229,929 1 3,066,164 47,816 - 47,816 2028 8,547,051 2,815,797 1 1,362,848 47,816 - 47,816 2029 8,884,716 2,448,449 1 1,333,165 47,816 - 47,816

2030 - 2034 3 7,311,918 7,548,330 4 4,860,248 239,072 - 239,072 2035 - 2039 2 4,535,580 2,372,642 2 6,908,222 82,173 - 82,173 2040 - 2044 5,453,533 214,766 5 ,668,299 - - - $ 113,099,821 $ 26,276,929 $ 139,376,750 $ 560,325 $ - $ 560,325 81

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024 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 2024 One Year One Year Golf Course 2016 Public Facilities Bonds 2.00%-4.00% 2036 $ 85,636 $ 75,485 $ 4,674 $ 70,811 Bond Premiums 4,714 362 4,352 Subtotal Golf Course 80,199 5,036 75,163 Bay Bridge Airport 2014 Public Facilities Bonds 2.00%-4.00% 2034 964,940 595,578 49,576 546,002

2015 Public Facilities Bonds 3.00%-5.00% 2036 577,244 476,554 31,620 444,934 2015 Refunding Bonds 2.00%-5.00% 2027 173,556 59,365 19,208 40,157 2019 Refunding Bonds 4.00%-5.00% 2029 92,167 60,891 8,935 51,956 2020 Public Facilities Bonds 2.00%-5.00% 2040 22,686 22,500 931 21,569 2021 Public Facilities Bonds 1.50%-5.00% 2041 26,594 23,935 1,330 22,605 2021 Refunding Bonds 1.50%-5.00% 2030 11,134 8,253 994 7,259

Bond Premiums 60,654 7,485 53,169 Subtotal Airport 1,307,730 120,079 1,187,651 Public Landings and Marinas 2015 Refunding Bonds 2.00%-5.00% 2027 24,707 8,451 2,735 5,716 2019 Refunding Bonds 4.00%-5.00% 2029 490,649 324,153 47,570 276,583 2021 Refunding Bonds 1.50%-5.00% 2030 67,871 50,304 9,706 40,598 2021 Public Facilities Bonds 1.50%-5.00% 2043 194,123 174,712 6,063 168,649 Bond Premiums 65,978 9,766 56,212

Subtotal Public Landings and Marinas 623,598 75,840 547,758 Sanitary District Maryland Water Quality-2005 Enhancement 1.00% 2027 18,252,291 2,959,912 981,710 1,978,202 Maryland Water Quality-SKI Phase One 0.80% 2049 29,342,242 26,483,733 968,122 25,515,611 Maryland Water Quality-SKI Phase Two 0.80% 2053 5,740,767 5,554,286 187,973 5,366,313 Subtotal Sanitary District 34,997,931 2,137,805 32,860,126

Total Business-Type Activities Debt 37,009,458 2,338,760 34,670,698 Lease Liability 110,714 27,922 82,792

OPEB 5,590,368 - 5,590,368

Net Pension Liability 3,436,786 - 3,436,786 Compensated Absences 596,108 351,425 244,683 Total Business-Type Activities $ 46,743,434 $ 2,718,107 $ 44,025,327 82

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024, are as follows:

Business-Type Activities Year Ending Business-Type Bonds Payable Business-Type Notes Payable June 30, Principal Interest Total Principal Interest Total 2025 $ 183,342 $ 67,799 $ 2 51,141 $ 2,137,805 $ 2 90,223 $ 2,428,028 2026 190,870 60,325 2 51,195 2,156,871 2 66,837 2,423,708 2027 198,765 52,916 2 51,681 2,161,344 2 47,599 2,408,943 2028 182,949 44,698 2 27,647 1,184,064 2 28,335 1,412,399 2029 190,284 37,196 2 27,480 1,193,537 2 18,863 1,412,400

2030 - 2034 718,082 95,917 8 13,999 6,112,445 9 49,553 7,061,998 2035 - 2039 179,420 11,097 1 90,517 6,360,887 7 01,111 7,061,998 2040 - 2044 36,469 1,068 3 7,537 6,619,426 4 42,572 7,061,998 2045 - 2049 - - - 6,696,663 1 73,525 6,870,188 2050 - 2054 - - - 374,889 4 ,163 379,052 $ 1,880,181 $ 371,016 $ 2 ,251,197 $ 34,997,931 $ 3 ,522,781 $ 38,520,712

C. ISSUANCE OF NEW DEBT

PRIMARY GOVERNMENT

In fiscal year 2024, the County received $1,794,266 through the Maryland Water Quality Financing Administration for phase two of the Southern Kent Island (SKI) Sanitary Project. Total issue amount of $5,740,767 will be repaid over 30 years at an interest rate of 0.80%. Amount outstanding as of June 30, 2024, was $5,554,286.

83

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $5,895 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:

Retirements Balance and Balance Governmental Activities June 30, 2023 Additions Repayments June 30, 2024 Lease Receivable $ 1,103,690 $ - $ 146,400 $ 9 57,290 Lease Receivable deferred inflows $ (1,068,273) $ - $ (146,908) $ (921,365) For the year ended June 30, 2024, rental and interest income associated with the governmental activities lease receivable was approximately $147,000 and $2,100, respectively.

84

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $3,324 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 $489 to $5,732 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:

Retirements Balance and Balance Business-Type Activities June 30, 2023 Additions Repayments June 30, 2024 Sanitary District - Lease Receivable $ 1,430,255 $ 119,061 $ 129,385 $ 1,419,931 Bay Bridge Airport - Lease Receivable 145,071 342,384 57,676 4 29,779 Total lease receivable $ 1,575,326 $ 461,445 $ 187,061 $ 1,849,710 Sanitary District - Deferred inflows $ (1,407,645) $ (119,061) $ (138,587) $ (1,388,119)

Bay Bridge Airport - Deferred inflows (142,386) (342,384) ( 54,690) (430,080) Total lease receivable deferred inflows $ (1,550,031) $ (461,445) $ (193,277) $ (1,818,199) For the year ended June 30, 2024, rental and interest income associated with the business-type activities lease receivable was approximately $193,000 and $5,400, respectively.

County as Lessee The County has entered into various agreements to lease land and facilities for their public works department. There were no new lease liabilities recognized within these funds that fell under the purview of GASB 87 during fiscal year 2024. The County is required to make both fixed and variable payments that range from $9,000 to $61,200 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. There were no new lease liabilities recognized within these funds that fell under the purview of GASB 87 during fiscal year 2024. The County is required to make annual fixed payments ranging from $1,600 to $2,520 for leases in the scope of GASB 87. The County has no extension or termination options present in these agreements.

85

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 10 – LEASES (CONTINUED)

The future minimum lease payments are approximately as follows:

Governmental Activities Business-Type Activities Principal Interest Total Principal Interest Total 2025 $ 55,401 $ 15,824 $ 7 1,225 $ 27,922 $ 2,318 $ 30,240 2026 58,224 14,245 72,469 28,590 1,650 30,240 2027 61,154 12,584 73,738 29,274 966 30,240 2028 55,193 11,052 66,245 24,928 271 25,199 2029 58,134 9,436 67,570 - - - Thereafter 264,248 19,818 2 84,066 - - - Total $ 552,354 $ 82,959 $ 6 35,313 $ 1 10,714 $ 5,205 $ 115,919

For the year ended June 30, 2024, interest expense for governmental and business-type activities lease liability was $8,137 and $2,974, 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. The amount due on the contract at June 30, 2024 is $948,946. During 2024, the Board entered into an agreement to finance the purchase of two school buses. The agreement requires payments through September 2033. The amount due on the agreement at June 30, 2024 is $221,929. As such, 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 $ 2,845,938 Less: accumulated depreciation (1,936,821) Total $ 909,117 Interest expense related to the above capital leases was approximately $36,000 for the year ended June 30, 2024. The future minimum lease obligations and net present value of these minimum lease payments as of June 30, 2024 were as follows:

Year ended June 30:

2025 $ 287,857 2026 295,613 2027 303,602 2028 232,892 2029 29,339 Thereafter 132,023 Total minimum lease payments 1,281,326 Less: amount representing interest (110,451) Present value of minimum financed purchase payments $ 1,170,875 86

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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%.

During fiscal year 2024, the Board entered into additional lease agreements for office equipment and vehicles. Payments under these leases total approximately $390,000 per year for leases that expire in fiscal year 2027 and $52,000 per year for leases expiring in fiscal year 2028. 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 equipment and vehicles over the next five years are as follows:

Lease Payments to Maturity Equipment and Vehicles Principal Interest Total 2025 $ 484,251 $ 56,021 $ 5 40,272 2026 470,917 37,862 508,779 2027 488,575 20,203 508,778 2028 50,162 1,881 52,043 2029 - - - $ 1,493,905 $ 1 15,967 $ 1 ,609,872

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, 2024, total lease liabilities were $2,602, which represents the present value of the remaining lease payments of $2,764, discounted using the Library’s incremental borrowing rate of 4%.

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

Year ended June 30: Principal Interest 2025 $ 2,602 $ 162 87

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 11 – SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS

The County implemented guidance of GASB 96, Subscription-Based Information Technology Arrangements (SBITAs) for accounting and reporting of subscription arrangements. The County uses its incremental borrowing rate to determine the initial value of their right-to-use subscription assets and liabilities.

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 $38,000 for all new subscription arrangements entered into in the current year. As of June 30, 2024, the value of the subscription liability is $908,835. The County is required to make annual fixed payments ranging from $10,250 to $298,043 for subscriptions in the scope of GASB 96. 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 2025 $ 317,607 $ 21,686 $ 339,293 2026 297,088 13,955 311,043 2027 291,140 6,889 298,029 2028 - - - 2029 - - - Thereafter - - - Total $ 905,835 $ 42,530 $ 948,365 For the year ended June 30, 2024, interest expense related to the subscription liability was $21,686.

88

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024 are as follows:

SANITARY DISTRICT

RESTRICTED DEBT SERVICE

ASSETS FUND FUND TOTAL

Current Restricted Assets Restricted Equity in Pooled Cash $ 26,185,033 $ 2,170,557 $ 28,355,590 Restricted Accounts Receivable (Net) 2,745,269 754,100 3,499,369 Total Current Restricted Assets 28,930,302 2,924,657 31,854,959 Noncurrent Restricted Assets Special Assessments Receivable (Net) 706,812 18,552,518 19,259,330 Total Noncurrent Restricted Assets 706,812 18,552,518 19,259,330

LIABILITIES

Current Restricted Liabilities Accounts Payable 75 - 75 Total Current Restricted Liabilities 75 - 75

DEFERRED INFLOWS OF RESOURCES

Unavailable Water and Sewer Assessments 706,812 18,552,520 19,259,332 Total Deferred Inflows of Resources 706,812 18,552,520 19,259,332

NET POSITION

Amounts Restricted for:

Debt Service - 2,924,655 2,924,655 Unrestricted Amounts 28,930,227 - 28,930,227 Total Net Position $ 28,930,227 $ 2,924,655 $ 31,854,882 89

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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

ASSETS ACTIVITIES

Capital Assets $ 270,752,909 Less Accumulated Depreciation (72,999,507) Total Capital Assets, Net of Depreciation 197,753,402

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding 2 45,521 Total Deferred Outflows of Resources 2 45,521

LIABILITIES

Lease Payable 5 52,354 Subscription Payable 9 05,835 Capital Retainage Payable 42,218 Capital Accounts Payable 6 75,865 Bonds/Notes Payable 123,221,457 Less:

Debt relating to Board of Education Assets (42,317,895) Unspent portion of Bond Proceeds for Board of Education debt (1,592,789) Unspent portion of Bond Proceeds for Governmental debt (4,403,501) Debt relating to Chesapeake College (4,376,502) Debt relating to PHA (376,514) Debt relating to non-capital assets (Dredging) (560,325) Total Liabilities 71,770,203

DEFERRED INFLOWS OF RESOURCES

Bond Refundings 1 35,866 Total Deferred Inflows of Resources 1 35,866

NET POSITION

Net Investment in Capital Assets $ 126,092,854

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 $ 152,659,989 $ 4 3,326,321 $ 195,986,310 $ 2 9,187,036 $ 1 1,551,003 $ 236,724,349 Less Accumulated Depreciation (62,035,890) (14,684,693) (76,720,583) ( 7,340,920) ( 2,794,084) (86,855,587) Total Capital Assets, Net of Depreciation 90,624,099 28,641,628 119,265,727 21,846,116 8,756,919 1 49,868,762

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding - - - 3,096 441 3,537 Total Deferred Outflows of Resources - - - 3,096 441 3,537

LIABILITIES

Lease Payable - - - - 110,714 110,714 Capital Retainage Payable 1 83,625 - 1 83,625 331,041 - 514,666 Capital Accounts Payable 2 94,943 - 2 94,943 - - 294,943 Bonds/Notes Payable 34,997,931 - 34,997,931 1,307,730 703,797 3 7,009,458 Total Liabilities 35,476,499 - 35,476,499 1,638,771 814,511 3 7,929,781

DEFERRED INFLOWS OF RESOURCES

Bond Refundings - - - 252 1,338 1,590 Total Deferred Inflows of Resources - - - 252 1,338 1,590

NET POSITION

Net Investment in Capital Assets $ 55,147,600 $ 2 8,641,628 $ 83,789,228 $ 2 0,210,189 $ 7,941,511 $ 111,940,928 90

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $ - $ - $ - $ - $ 1,218,486 $ 1,218,486 Prepaid Items 112,309 - - - - 112,309 Other 35,925 - - - - 35,925 Subtotal Nonspendable 148,234 - - - 1,218,486 1,366,720 Restricted Rainy Day Fund 15,120,497 - - - - 15,120,497 Employee Benefits - LOSAP 6,120,385 - - - - 6,120,385

Donor-Specified Purposes 59,884 33,148 - - - 93,032 Mosquito Control 77,050 - - - - 77,050 Unspent Bond Proceeds - 5,996,290 - - - 5,996,290 Impact Fees - 245,185 - - - 245,185 Vehicle Acquisition - 46,127 - - - 46,127 Department of Aging - - - - 9 55 9 55 House and Community Services - - - - 2,843,180 2,843,180 Critical Areas - - - - 383,627 383,627 Sheriff's Drug Task Force - - - - 167,428 167,428

Inmate Welfare - - - - 164,340 164,340 Agricultural Transfer - - - - 1,972,394 1,972,394 Rural Legacy - - - - 426,595 426,595 Dredging Special Assessments - - - - 14,799 14,799 Kent Narrows - - - - 257,426 257,426 Subtotal Restricted 21,377,816 6,320,750 - - 6,230,744 33,929,310 Committed House and Community Services - - - - 8,685,634 8,685,634 Revolving Loan Fund - - - - 90,000 90,000 Economic Development Incentive - - - - 1,175,041 1,175,041

School Impact Fees - - - - 12,499,304 12,499,304 Fire Company Impact Fees - - - - 404,876 404,876 Parks and Recreation Impact Fees - - - - 859,850 859,850 Revenue Stabilization Fund 9,450,311 - - - - 9,450,311 Economic Development - 1,076,841 - - - 1,076,841 Rubble Surcharge - 757,204 - - - 757,204 Developer Exactions - 5,262,317 857,300 - - 6,119,617 Subtotal Committed 9,450,311 7,096,362 857,300 - 23,714,705 41,118,678

Assigned Encumbrances - 15,985,598 3,802,393 - - 19,787,991 Subsequent Years' Expenditures - 13,662,179 1,690,607 - - 15,352,786 Department of Aging - - - - 128,177 128,177 Roads Operating - - - - 108,889 108,889 Community Partnerships for Children - - - - 66,424 66,424 Law Library - - - - 560,413 560,413 Capital Projects - 11,381,356 159,270 - - 11,540,626 Loans Receivable - 1,608,456 - - - 1,608,456

Subtotal Assigned - 42,637,589 5,652,270 - 863,903 49,153,762 Unassigned General Fund 46,537,817 - - - - 46,537,817 Subtotal Unassigned 46,537,817 - - - - 46,537,817 Total Governmental Funds Balances $ 77,514,178 $ 56,054,701 $ 6,509,570 $ - $ 32,027,838 $ 172,106,287 91

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $ 6,091,218 $ - Public Safety 2 ,171,870 - Public Works 3 ,896,221 - Parks & Recreation 3 ,051,987 - Health and Social Services 5 24,334 - Education and Library 2 34,300 - Economic/Community Development 15,668 - Resurfacing Contracts and Materials - 2 ,598,090 Roads Construction Equipment - 1 ,204,303 Total encumbrances $ 15,985,598 $ 3,802,393

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 2024 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 2022, 2023 and 2024, settlements have not exceeded insurance coverage for any type of policy in effect.

92

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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.

93

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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’, or Correctional Officers’ 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 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.

94

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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.

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 2023, 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.

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, fullservice pension allowances equal 2.0% of AFC up to a maximum of 60% (30 years of credit).

95

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 14 - RETIREMENT PLANS (CONTINUED)

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 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.

96

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 formulae. 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.

Members of the Law Enforcement Officers’ Pension System (LEOPS) are eligible to participate in a Deferred Retirement Option Program (DROP). For members who enter the DROP on or after July 1, 2011, the member is deemed retired and the retirement allowance is placed in an account earning 4% interest per year, compounded annual. At the end of the DROP period, the lump sum held in the DROP account is paid to the retiree. The LEOPS members must end employment and fully

retire at the end of the DROP period. The maximum period of participation is 5 years for LEOPS.

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, 2023 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement.

Inflation In the 2023 actuarial valuation, 2.25% general, 2.75% wage.

In the 2022 actuarial valuation, 2.25% general, 2.75% wage.

Salary Increases In the 2023 actuarial valuation, 2.75% to 11.25%.

In the 2022 actuarial valuation, 2.75% to 11.25%.

Investment Rate of Return In the 2023 actuarial valuation 6.80%.

In the 2022 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 2018 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.

97

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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% 6.9% Private Equity 16% 8.6% Rate Sensitive 20% 2.6% Credit Opportunity 9% 5.6% Real Assets 15% 5.4% Absolute Return 6% 4.4% 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, 2023.

For the year ended June 30, 2023, the annual money-weighted rate of return on pension plan investments, net of the pension plan investment expense, was 3.11%. 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.

98

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $ 66,961,714 $ 45,159,037 $ 27,066,595 Board of Education 10,228,534 6,898,132 4,134,476 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 2024 was $2,975,900. In addition, the State of Maryland contributed $5,806,196 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, 2024, 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) $ 6,898,132 State's proportionate share of the net pension liability (Teachers' System) 51,628,693 Total $ 58,526,825 99

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 14 - RETIREMENT PLANS (CONTINUED)

The net pension liability was measured as of June 30, 2023, 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, 2024, the County reported the following related to pensions:

Board County Employer's proportionate (percentage) of the collective net pension liability 0.029% 0.196% Employer's proportionate share of the collective net pension liability $ 6,898,132 $ 45,159,037 Pension expense recognized by the employer for the year ended $ 3,930,061 $ 6,643,235 Deferred Deferred Outflows of Inflows of Resources Resources County Changes in assumptions $ 3,103,634 $ ( 160,331)

Net difference between projected and actual investment earnings 4,039,436 - on pension plan investments Differences between expected and actual experience 1,587,206 ( 1,927,811) Change in proportion 7,553,446 ( 1,581,337) Contributions subsequent to measurment date 5,911,428 - Total $ 22,195,150 $ ( 3,669,479) Board Changes in assumptions $ 474,086 $ ( 24,490) Net difference between projected and actual investment earnings

on pension plan investments 617,032 - Differences between expected and actual experience 242,448 ( 294,477) Change in proportion 492,437 - Contributions subsequent to measurment date 743,975 - Total $ 2,569,978 $ ( 318,967) 100

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 14 - RETIREMENT PLANS (CONTINUED)

The $5,911,428 and $743,975 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, 2025. Other amounts reported as deferred outflows and deferred inflows of resources for the County will be amortized over a five-year period, as follows:

Year ended June 30: Board County 2025 $ 321,720 $ 2,528,636 2026 231,815 1,940,067 2027 719,965 5,534,704 2028 201,461 1,804,419 2029 32,075 806,417 $ 1,507,036 $ 12,614,243 Covered payroll refers to all compensation paid to active employees covered by the Systems.

Covered On-Behalf Payroll By State County $ 36,434,467 $ - Board of Education 70,796,191 5,806,196 Library 1,392,639 186,576 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 $ 6,643,235 Length of Service Award Program ("LOSAP") 4,079,112 Aggregate amount of pension expense $ 10,722,347 101

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024. 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 one-and-one-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, 2024  Reporting Date: June 30, 2024 Plan Membership The following is a summary of the plan membership as of January 1, 2023.

Active 439 Retired 290 Total 729 102

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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)

103

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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.

104

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 footnote 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 as of the valuation date).

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, 2024, and the final investment return assumption, are summarized in the following table:

Long-Term Expected Real Asset Class Rate of Return Weight US Equity 6.20% 36.0% International Equity 6.55% 24.0% Fixed Income 2.30% 35.0% Real Estate 4.55% 5.0% Total Weighted Average Real Return 4.84% 100.0% Plus Inflation 2.50% Total Return w/o Adjustment 7.34% Risk Adjustment -1.34% 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 2024, 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 Aa bond rate* of 4.00%. The blended rate is 5.90%.

The prior rate was 5.90% on this basis.

*Source: Fidelity general obligation municipal bond index.

105

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 plans, 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 $ 44,094,718 $ 30,242,945 $ 27,548,808 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 from 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 $ 26,866,873 $ 30,242,945 $ 45,127,752 106

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $ 983,763 Interest 2,962,304 Changes in benefit terms - Difference between expected and actual experience - Changes in assumptions - Benefit payments (1,846,441) Net change in total OPEB liability 2,099,626 Total OPEB liability - beginning of year 50,134,776 Total OPEB liability - end of year $ 52,234,402 Plan Fiduciary Net Position ("PFNP") Contributions - employer $ 4,453,230

Contributions - member - Net investment income 1,923,140 Benefit payments (1,846,441) Admin expenses (8,025) Other - Net change in plan fiduciary net position 4,521,904 Plan fiduciary net position - beginning of year 17,469,553 Plan fiduciary net position - end of year $ 21,991,457 Net OPEB liability ("NOL") - beginning of year $ 32,665,223 Net OPEB liability - end of year $ 30,242,945 PFNP as a % of TOL 42.1%

Covered employee payroll $ 36,215,104 NOL as a % of covered payroll 83.5% 107

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 $ 983,763 Interest on total OPEB liability 2,962,304 Difference between expected and actual experience* (2,107,529) Changes in actuarial assumptions* (313,589) Employee contributions - Changes in benefit terms - Projected earnings on plan investments (1,051,111) Difference between projected and actual earnings* (30,049) Administrative expense 8,025 Other changes in fiduciary net position -

Total OPEB expense $ 451,814

* - portions recognized for expense

Deferred Outflow/Inflow Summary The deferred outflows / inflows are as follows:

Deferred Deferred Outflows of Inflows of Resources Resources Net difference between projected and actual earnings on plan investments $ - $ (303,646) Differences between expected and actual experience 245,181 (10,946,289) Changes in actuarial assumptions 553,797 (2,532,442) Total $ 798,978 $ (13,782,377) Net deferred outflows / (inflows) will be amortized as follows:

Year ended June 30:

2025 $ (2,508,927) 2026 (2,164,593) 2027 (2,745,635) 2028 (2,807,505) 2029 (2,680,508) Thereafter (76,231) $ (12,983,399) 108

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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.

109

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024, the Board recognized an OPEB expense of $2,974,621.

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, 2023. Therefore, plan information for the year ended June 30, 2023 is utilized. The following table shows the components of the Board’s total and net OPEB liability at June 30, 2023.

Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability

(a) (b) (a) - (b)

Balance - beginning of year $ 138,508,054 $ 504,484 $ 138,003,570 Changes for the Year Service Cost 5,168,402 - 5,168,402 Interest 5,050,477 - 5,050,477 Experience Losses/Gains 155,825 - 155,825 Trust Contributions - Employer - 3,433,351 (3,433,351) Net Investment Income - 52,792 (52,792) Changes in Assumptions (4,072,271) - (4,072,271) Benefit Payments (net of retiree contributions) (3,433,351) (3,433,351) -

Net Changes 2,869,082 52,792 2,816,290 Balance - end of year $ 141,377,136 $ 557,276 $ 140,819,860 Plan Fiduciary Net Position as a % of Total OPEB Liability 0.39% Covered employee payroll $ 66,931,801 Net OPEB Liability as a % of covered payroll 210.39% Payments have typically been liquated from the General Fund in prior years.

110

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2023 measurement date for fiscal year-end 2024. 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 3.86% as of June 30, 2023.

 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.

111

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2023 using the discount rate of 3.86%, 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 2.86% 3.86% 4.86% Net OPEB liability $ 1 67,273,079 $ 1 40,819,860 $ 1 19,810,836 The following table presents the Board’s net OPEB liability at June 30, 2023 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 $ 1 16,969,874 $ 1 40,819,860 $ 1 72,284,453 Deferred Inflows/Outflows of Resources related to OPEB At June 30, 2024, the Board reported deferred outflows of resources and deferred inflows of resources related to the OPEB plan from the following sources:

Deferred Deferred Outflows of Inflows of Resources Resources Changes of assumptions $ 33,869,874 $ (59,053,497) Net difference between projected and actual earnings 4,409 - Differences between expected and actual experience 1,513,097 (63,094,892) Contributions subsequent to measurement date 2,974,621 - Total $ 38,362,001 $ (122,148,389) 112

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 outflows and inflows of resources over the next five years is expected to be as follows:

Year ended June 30:

2025 $ (15,737,432) 2026 (15,736,236) 2027 (15,723,008) 2028 (14,420,259) 2029 (16,420,023) Thereafter (8,724,051) $ (86,761,009) 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).

113

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2023.

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, 2024, the Library contributed $31,846.

Net OPEB liability The Library's net OPEB liability was measured as of June 30, 2024, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation January 1, 2023.

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 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 (15 years remaining).

Discount rate The discount rate used to measure the total OPEB liability is 4.3%. 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, 2024 of 4% blended with the

assumed return of 6.00%.

Benefits would be paid from the trust from 2051 to 2061, and from general fund assets before and after this time period, resulting in a blended rate of 4.3%. The prior rate was 4.2%.

114

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 16 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

COMPONENT UNITS (CONTINUED)

LIBRARY (CONTINUED)

Changes in the net OPEB liability Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability

(a) (b) (a) - (b)

Balance - beginning of year $ 563,920 $ 33,059 $ 530,861 Changes for the Year Contributions - employer - 3 1,846 (31,846) Service Cost 6 ,819 - 6 ,819 Net Investment Income 2 3,309 3 ,266 2 0,043 Changes in Assumptions (5,491) - (5,491) Benefit Payments, including refunds (31,846) (31,846) - Net Changes (7,209) 3 ,266 (10,475) Balance - end of year $ 556,711 $ 36,325 $ 520,386 Plan Fiduciary Net Position as a % of Total OPEB Liability 6.52%

Covered employee payroll $ 1,392,639 Net OPEB Liability as a % of covered payroll 37.37% 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 3.30% 4.30% 5.30% Net OPEB liability $ 577,801 $ 520,386 $ 472,072 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.

115

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024, and the final investment return assumption, are summarized in the following table:

Long-Term Expected Real Asset Class Rate of Return Weight US Equity 6.20% 36.0% International Equity 6.55% 24.0% Fixed Income 2.30% 35.0% Real Estate 4.55% 5.0% Total Weighted Average Real Return 4.84% 100.0% Plus Inflation 2.50% Total Return w/o Adjustment 7.34% Risk Adjustment -1.34% Total Expected Return 6.00% OPEB expense and deferred outflows of resources related to OPEB For the year ended June 30, 2024, the Library recognized an OPEB expense of $32,376. At June 30, 2024, 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 $ 15,676 $ (118,045) Changes of assumptions 79,137 (110,426) Net difference between projected and actual earnings 586 - Total $ 95,399 $ (228,471) 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:

2025 $ 4,039 2026 4,284 2027 (29,727) 2028 (38,503) 2029 (38,248) Thereafter (34,917) $ (133,072) 116

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2023  Measurement date: December 31, 2023  Reporting date: June 30, 2024 An active member, upon reaching 55 years of age, is eligible to receive $6 or $10 per month for each year of eligible service determined by two separate benefit formulas which determine the monthly rate, with a $400 maximum monthly benefit that may be earned. An inactive member that reaches 55 years of age and is vested with 10 years of service is also entitled to the

same benefits ($6 or $10/month for each year of service, maximum $400 per month). Payments are made over a 10-year annuity and the sponsor reserves the right to distribute a one-time lump sum actuarial equivalent benefit to terminated participants in lieu of the annuity. At the time of death, the participants’ designated beneficiary will receive the lump sum of the present value of the participants’ accrued benefit.

The participant summary as of the January 1, 2023 actuarial valuation is as follows:

Active members 321 Vested-terminted 61 Retired and beneficiaries 175 Total 557 Actuarial Assumptions The total LOSAP liability was determined by an actuarial valuation as of January 1, 2023 rolled forward to December 31, 2023 using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 0.00% Salary increases Not Applicable Investment rate of return 3.79%, 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 3.79% discount rate is based on a 20-year AA general obligation bond rate as of December 31, 2023.

The above is a summary of key actuarial assumptions. Full descriptions of the actuarial assumptions are available in the January 1, 2023 actuarial valuation report.

117

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 3.79%, 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 2.79% 3.79% 4.79% Net LOSAP Liability $ 13,231,775 $ 11,180,243 $ 9,572,528 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, 2023 $ 7,757,868 $ - $ 7,757,868 Changes for the year:

Service cost 430,072 - 430,072 Interest 282,361 - 282,361 Changes of benefit terms 3,404,969 - 3,404,969 Differences between expected and actual experience (526,887) - (526,887) Changes of assumptions 460,832 - 460,832 Benefits payments and expenses (628,972) - (628,972) Net changes 3,422,375 - 3,422,375 Balances as of December 31, 2023 $ 11,180,243 $ - $ 11,180,243 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 $ 430,072 Interest 282,361 Changes in benefit terms 3,404,969 Differences between expected and actual earnings - Differences between expected and actual experience 100,399 Changes of assumptions (138,689) Total LOSAP expense $ 4,079,112 118

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 17 – VOLUNTEER FIREMAN PENSION PLAN LENGTH OF SERVICE AWARD PROGRAM (LOSAP)

(CONTINUED)

Maryland State Retirement and Pension System $ 6,643,235 Length of Service Award Program ("LOSAP") 4,079,112 Aggregate amount of pension expense $ 10,722,347 LOSAP Deferred Outflows and Deferred Inflows of Resources The components of LOSAP deferred outflows and deferred inflows are as follows:

Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 586,034 $ (439,072) Changes of assumptions 765,224 (2,418,401) Net difference between projected and actual earnings - - Total $ 1,351,258 $ (2,857,473) Amounts reported as deferred outflows and deferred inflows will be amortized as follows:

Year ended June 30:

2025 $ (278,665) 2026 (547,005) 2027 (623,126) 2028 (46,414) 2029 (11,005) Thereafter - $ (1,506,215) 119

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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, 2024.

The following Enterprise Funds ended the year with deficit equity balances:

The Sewer Operations Fund has a deficit balance in unrestricted net position of $3,544,395 as of June 30, 2024.

The Bay Bridge Airport Fund has a deficit balance in unrestricted net position of $585,298 as of June 30, 2024.

The Golf Course Enterprise Fund has a deficit balance in unrestricted net position of $310,760 as of June 30, 2024.

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, 2024

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 2024.

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 2024.

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 $7,096,362 has been committed, including $1,076,841 for Economic Development, $5,262,317 for site improvements pursuant to agreements with local developers, and $757,204 for rubble surcharge. In the Roads Capital

Projects Fund, $857,300 has been contributed by developers and is committed to fund infrastructure improvements.

120

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

NOTE 19 – COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS (CONTINUED)

PRIMARY GOVERNMENT (CONTINUED)

On November 22, 2024, the Circuit Court entered a judgment on a jury verdict against the County in which the Court found that the County violated the procedural due process rights of Queen Anne’s Research and Development Corporation (“QARD”). The Court entered a monetary judgment in favor of QARD in the amount of $1,841,739.46 which included prejudgment interest and attorney’s fees. The County has appealed this matter, expects to vigorously prosecute the appeal and

is confident that the judgments will be either stricken or reduced significantly.

In addition to the litigation above, 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.

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 35.85% 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 $24.6 million, with approximately $8.8 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 $12.2 million as of June 30, 2024, 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 with a remaining outstanding balance of $17.3 million. As of June 30, 2024, $6.2 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, 2024. MES expects to satisfy these requirements as of June 30, 2024 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.

121

QUEEN ANNE’S COUNTY, MARYLAND

NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2024

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 generate a monthly report showing the data found during the monitoring processes. As applied, the following schedule is as follows: monitoring wells MW-2A, MW-11, and MW-9 are 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.

122

R S I

EQUIRED UPPLEMENTARY NFORMATION

123

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, 2024

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

REVENUES

Taxes Local Property Tax $ 79,900,000 $ 79,900,000 $ 82,049,357 $ 2,149,357 Local Income Tax 80,337,128 85,337,128 86,007,950 670,822 Admission and Amusement Taxes 252,000 252,000 261,842 9 ,842 Recordation Taxes 7,549,263 7,549,263 7,436,184 (113,079) Hotel Taxes 885,000 885,000 1,127,036 242,036 County Transfer Taxes 2,724,615 2,724,615 2,885,299 160,684 Cannabis Sales Tax - - 83,040 83,040 Franchise Fee 485,000 485,000 364,677 (120,323)

Licenses and Permits 845,875 845,875 802,612 (43,263) Intergovernmental 2,421,686 3,446,318 3,265,896 (180,422) Charges for Current Services 3,623,987 3,620,159 4,131,708 511,549 Fines and Forfeitures 70,500 70,500 51,929 (18,571) Investment Income 1,700,000 7,231,108 7,418,478 187,370 Donations - - 177,540 177,540 Miscellaneous 586,589 586,589 1,305,909 719,320 Total Revenues 181,381,643 192,933,555 197,369,457 4,435,902

EXPENDITURES

GENERAL GOVERNMENT

Legislative 684,770 757,537 754,444 3 ,093 Judicial Circuit Court 940,009 966,763 891,112 75,651 Orphan's Court 102,786 102,786 100,361 2 ,425 State's Attorney 1,624,288 1,767,280 1,765,690 1 ,590 County Administrator 272,133 299,164 299,027 1 37 Board of Elections 1,184,692 1,184,692 970,450 214,242 Finance Office 1,671,905 1,735,369 1,621,396 113,973 Human Resources 756,020 862,611 858,786 3 ,825

Planning and Zoning 2,630,657 2,715,185 2,500,542 214,643 Information Technology 3,720,799 3,805,207 3,603,958 201,249

QAC-TV 517,706 537,395 495,154 42,241

Legal Services 505,021 876,188 875,018 1 ,170 Total General Government 14,610,786 15,610,177 14,735,938 874,239

PUBLIC SAFETY

Sheriff's Office 11,839,057 13,123,521 13,096,947 26,574 Volunteer Fire and Rescue Services 5,228,788 5,345,175 5,273,116 72,059 Detention Center 6,534,927 6,743,068 6,385,869 357,199 Emergency Services 14,258,038 14,922,769 14,799,510 123,259 Total Public Safety 37,860,810 40,134,533 39,555,442 579,091

PUBLIC WORKS

Administration 606,212 657,828 655,358 2 ,470 Solid Waste Disposal 1,890,526 1,932,046 1,700,479 231,567 Engineering Division 1,209,387 1,258,181 1,125,493 132,688 General Services 3,370,683 3,422,420 2,769,322 653,098 Animal Services 1,421,529 1,463,202 1,435,976 27,226 Property Management 360,107 372,014 371,865 1 49 Total Public Works 8,858,444 9,105,691 8,058,493 1,047,198

CONTINUED

124

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, 2024

(CONTINUED)

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

PARKS & RECREATION

Parks $ 4,895,624 $ 5,062,614 $ 4,925,239 $ 137,375 Recreation 1,178,603 1,211,769 1,116,935 94,834 Total Parks & Recreation 6,074,227 6,274,383 6,042,174 232,209

HEALTH AND SOCIAL SERVICES

Health Department 2,775,750 2,780,587 1,305,306 1,475,281 Social Services 183,758 194,160 193,586 5 74 Total Health and Social Services 2,959,508 2,974,747 1,498,892 1,475,855

EDUCATION AND LIBRARY

Board of Education 68,885,219 68,885,219 68,885,219 - Chesapeake College 2,126,529 2,126,529 2,126,528 1 Queen Anne's County Free Library 2,598,152 2,598,152 2,598,152 - Total Education and Library 7 3,609,900 7 3,609,900 7 3,609,899 1

CONSERVATION OF NATURAL RESOURCES

Cooperative Extension Service 410,633 415,305 415,051 2 54 Soil Conservation Service 323,217 337,035 285,121 51,914 4-H Park 129,800 149,800 146,214 3 ,586 Total Conservation of Natural Resources 863,650 902,140 846,386 55,754

ECONOMIC AND COMMUNITY DEVELOPMENT

Economic Development 1,022,699 1,049,607 1,036,415 13,192 Community Affairs 130,132 134,172 128,882 5 ,290 Total Economic and Community Development 1,152,831 1,183,779 1,165,297 18,482

INTERGOVERNMENTAL

Aid to Municipalities 359,501 359,501 350,815 8 ,686 SDAT Costs from State 430,000 430,000 338,793 91,207 Total Intergovernmental 789,501 789,501 689,608 99,893

MISCELLANEOUS

Aid to Other Agencies 811,148 1,803,388 1,802,478 9 10 Insurance & Benefits 3,355,300 3,355,300 1,781,475 1,573,825 Transfer to OPEB Fund 2,606,789 2,606,789 2,606,789 - Contingencies 2,865,763 632,776 502,396 130,380 Salary Lapse (1,878,310) (1,878,310) - (1,878,310) Leases and Subscription-Based IT Arrangements - 38,000 38,000 - Miscellaneous Non-Departmental 680,400 680,400 501,235 179,165 Total Miscellaneous 8,441,090 7,238,343 7,232,373 5 ,970

CONTINUED

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, 2024

(CONTINUED)

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

DEBT SERVICE

School Debt Service - Principal $ 3,957,720 $ 3,957,720 $ 3,957,719 $ 1 School Debt Service - Interest 1,600,198 1,600,250 1,600,250 - County Debt Service - Principal 4,510,113 4,530,669 4,530,669 - County Debt Service - Interest 2,655,432 2,655,432 2,654,423 1 ,009 Total Debt Service 12,723,463 12,744,071 12,743,061 1 ,010 Total Expenditures 167,944,210 170,567,265 166,177,563 4,389,702 Excess of Revenues Over Expenditures 13,437,433 22,366,290 31,191,894 8,825,604

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals 18,000 18,000 28,597 10,597 Insurance Proceeds - 46,170 139,131 92,961 Subscription-Based IT Arrangements - 38,000 38,000 - Transfers In From:

Impact Fees - School 2,165,911 2,165,911 2,165,911 - Total Transfers In 2,165,911 2,165,911 2,165,911 - Transfers Out To:

General Capital Projects Fund 2,925,521 10,925,521 10,925,521 - Roads Capital Projects Fund 3,015,480 4,015,480 4,015,480 - Roads Operating Fund 4,598,650 4,792,793 4,053,145 739,648 Department of Aging 2,686,685 2,667,458 2,481,280 186,178 Department of Housing and Community Services 642,700 752,416 721,418 30,998 Community Partnerships 650,204 574,645 491,311 83,334 Agricultural Transfer Tax - 1,274,050 1,274,050 -

Grants Fund 44,000 62,271 47,789 14,482 Impact Fees - Fire Companies/Contingencies 90,000 90,000 53,300 36,700 Economic Development Incentive Fund 297,619 297,619 297,619 - Dredging Special Assessments - 7 ,950 7 ,950 - Airport Enterprise Fund 59,251 59,251 59,251 - Public Landings Enterprise Fund 150,000 150,000 150,000 - Golf Course Enterprise Fund 461,234 461,234 275,000 186,234 Total Transfers Out 15,621,344 26,130,688 24,853,114 1,277,574

Total Other Financing (Uses) (13,437,433) (23,862,607) (22,481,475) (1,174,016) Net Increase (Decrease) in Fund Balance $ - $ (1,496,317) $ 8,710,419 $ 10,206,736 126

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, 2024

VARIANCE

ORIGINAL FINAL WITH FINAL

BUDGET BUDGET ACTUAL BUDGET

REVENUES

Taxes Local Property Tax $ - $ - $ - $ - Recordation Taxes - - - - State Shared Taxes - - - - Licenses and Permits - - - - Intergovernmental 2,856,866 3,098,899 2,012,200 (1,086,699) Charges for Current Services - - 6 ,556 6 ,556 Fines and Forfeitures - - - - Investment Income - - - - Donations - - - - Miscellaneous 71,765 296,350 291,856 (4,494) Total Revenues 2,928,631 3,395,249 2,310,612 (1,084,637)

EXPENDITURES

Current General Government 99,823 305,804 37,150 268,654 Public Safety 1,458,612 1,674,289 1,310,762 363,527 Public Works 55,347 55,347 16,145 39,202 Parks & Recreation - - - - Health and Social Services 217,349 236,742 238,237 (1,495) Education and Library - - - - Conservation of Natural Resources - - - - Economic/Community Development 1,141,500 1,185,338 756,107 429,231 Intergovernmental - - - -

Miscellaneous - - - - Capital Outlay - - - - Debt Service Principal - - - - Interest - - - - Total Expenditures 2,972,631 3,457,520 2,358,401 1,099,119 Excess of Revenues Over (Under) Expenditures (44,000) (62,271) (47,789) 14,482

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - Insurance Proceeds - - - - Transfers In 44,000 62,271 47,789 (14,482) Transfers Out - - - - Total Other Financing Sources (Uses) 44,000 62,271 47,789 (14,482) Net Increase (Decrease) in Fund Balance $ - $ - $ - $ - 127

QUEEN ANNE'S COUNTY, MARYLAND

MARYLAND STATE RETIREMENT AND PENSION SYSTEMS

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2024

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% $ 4 5,339,988,000 $ 6 3,086,719,000 72% June 30, 2015 0.1189567% 24,721,248 21,231,535 116% 4 5,789,840,000 6 6,571,552,000 69% June 30, 2016 0.1271511% 30,000,070 23,160,758 130% 4 5,365,927,000 6 8,959,954,000 66% June 30, 2017 0.1232988% 26,661,766 24,681,589 108% 4 8,987,184,000 7 0,610,885,000 69% June 30, 2018 0.1383948% 29,037,440 26,088,826 111% 5 1,827,233,000 7 2,808,833,000 71%

June 30, 2019 0.1429452% 29,483,317 26,185,838 113% 5 3,943,420,000 7 4,569,030,000 72% June 30, 2020 0.1514518% 34,230,163 27,669,757 124% 5 4,586,037,000 7 7,187,397,000 71% June 30, 2021 0.1745337% 26,184,085 26,110,792 100% 6 7,604,500,000 8 2,606,805,000 82% June 30, 2022 0.1762298% 35,261,002 27,222,595 130% 6 4,310,991,000 8 4,319,523,000 76% June 30, 2023 0.1960852% 45,159,037 33,312,053 136% 6 4,892,973,000 8 7,923,284,000 74%

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% 2024 5 ,911,428 5,911,428 - 36,434,467 16%

Both schedules are presented to illustrate the requirements to show information for 10 years.

128

QUEEN ANNE'S COUNTY, MARYLAND

MARYLAND STATE RETIREMENT AND PENSION SYSTEMS

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2024

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; 15 years remaining.

Asset Valuation Model Five-year smoothed market (max. 120% and min 80% of the market value) Inflation In the 2023 actuarial valuation, 2.25% general, 2.75% wage.

In the 2022 actuarial valuation, 2.25% general, 2.75% wage.

Salary Increases In the 2023 actuarial valuation, 2.75% to 11.25%.

In the 2022 actuarial valuation, 2.75% to 11.25%.

Investment Rate of Return In the 2023 actuarial valuation 6.80%.

In the 2022 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 2018 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.

129

QUEEN ANNE'S COUNTY, MARYLAND

OTHER POST-EMPLOYMENT BENEFITS (OPEB)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2024

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY

2017 2018 2019 2020 Total OPEB liability ("TOL") Service cost $ 1,097,813 $ 1,130,747 $ 1,164,669 $ 1,331,424 Interest 2,764,491 2,985,530 3,136,157 3,344,770 Changes of benefit terms - - - - Differences between expected and actual experience - - 735,549 - Changes of assumptions - 265,899 915,266 426,582 Benefit payments (1,291,027) (1,498,005) (1,568,468) (1,561,872) Net change in TOL 2,571,277 2,884,171 4,383,173 3,540,904

TOL - beginning of year 48,695,013 51,266,290 54,150,461 58,533,634 TOL - end of year $ 51,266,290 $ 54,150,461 $ 58,533,634 $ 62,074,538 Plan fiduciary net position ("PFNP") Contributions - employer $ 2,223,474 $ 2,731,447 $ 3,037,243 $ 3,378,771 Contributions - member - - - - Net investment income 75,175 207,932 342,827 129,710 Benefits payments (1,291,027) (1,498,005) (1,568,468) (1,561,872) Administrative expense - (2,452) (39,142) (3,553)

Other - - - - Net change in PFNP 1,007,622 1,438,922 1,772,460 1,943,056 Total PFNP - beginning of year 2,804,433 3,812,055 5,250,977 7,023,437 Total PFNP - end of year $ 3,812,055 $ 5,250,977 $ 7,023,437 $ 8,966,493 Net OPEB liability ("NOL") - beginning of year $ 45,890,580 $ 47,454,235 $ 48,899,484 $ 51,510,197 Net OPEB liability ("NOL") - end of year $ 47,454,235 $ 48,899,484 $ 51,510,197 $ 53,108,045

PFNP as a % of TOL 7.4% 9.7% 12.0% 14.4% Covered employee payroll $ 2 1,604,888 $ 22,282,543 $ 23,843,440 $ 25,806,124 NOL as a % of covered employee payroll 219.6% 219.5% 216.0% 205.8% SCHEDULE OF ACTUAL EMPLOYER CONTRIBUTION AS A PERCENTAGE OF COVERED-EMPLOYEE PAYROLL

FISCAL YEAR 2017 2018 2019 2020

Actuarially Determined Employer Contribution $ 3,853,839 $ 3,969,454 $ 4,377,119 $ 4,508,433 Actual Employer Contribution 2,223,474 2,731,447 3,037,243 3,378,771 Contribution Deficiency / (Excess) 1,630,365 1,238,007 1,339,876 1,129,662 Covered Employee Payroll 21,604,888 22,282,543 23,843,440 25,806,124 Contribution as a Percent of Payroll 10.3% 12.3% 12.7% 13.1% 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.

130

QUEEN ANNE'S COUNTY, MARYLAND

OTHER POST-EMPLOYMENT BENEFITS (OPEB)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2024

(CONTINUED)

2021 2022 2023 2024 $ 1,371,367 $ 1,226,384 $ 1,263,176 $ 983,763 3,519,372 3,220,060 3,386,945 2,962,304

- - 394,544 -

(8,720,849) - (8,541,920) - (1,619,833) (686,055) (1,645,226) - (1,670,095) (1,731,265) (1,706,367) (1,846,441) (7,120,038) 2,029,124 (6,848,848) 2,099,626 62,074,538 54,954,500 56,983,624 50,134,776 $ 54,954,500 $ 56,983,624 $ 50,134,776 $ 52,234,402 $ 3,612,555 $ 4,195,201 $ 4,098,432 $ 4,453,230

- - - -

2,261,978 (1,964,463) 1,430,230 1,923,140 (1,670,095) (1,731,265) (1,706,367) (1,846,441) (2,236) (5,253) (7,722) (8,025)

- - (7,935) -

4,202,202 494,220 3,806,638 4,521,904 8,966,493 13,168,695 13,662,915 17,469,553 $ 13,168,695 $ 13,662,915 $ 17,469,553 $ 21,991,457 $ 53,108,045 $ 41,785,805 $ 43,320,709 $ 32,665,223 $ 41,785,805 $ 43,320,709 $ 32,665,223 $ 30,242,945 24.0% 24.0% 34.8% 42.1% $ 26,326,472 $ 29,071,019 $ 32,307,222 $ 36,215,104 158.7% 149.0% 101.1% 83.5% 2021 2022 2023 2024 $ 4,419,451 $ 4,552,035 $ 3,864,103 $ 3,980,026

3,612,555 4,195,201 4,098,432 4,453,230 806,896 356,834 (234,329) (473,204) 26,326,472 29,071,019 32,307,222 36,215,104 13.7% 14.4% 12.7% 12.3% 131

QUEEN ANNE'S COUNTY, MARYLAND

OTHER POST-EMPLOYMENT BENEFITS (OPEB)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2024

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).

132

QUEEN ANNE'S COUNTY, MARYLAND

LENGTH OF SERVICE AWARD PROGRAM (LOSAP)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2024

SCHEDULE OF CHANGES IN THE NET LOSAP LIABILITY (as of measurement date)

AS OF MEASUREMENT DATE 2017 2018 2019 2020 2021 2022 2023

Total LOSAP liability ("TLL") Service cost $ 206,276 $ 164,371 $ 215,978 $ 285,808 $ 3 50,104 $ 2 68,262 $ 430,072 Interest cost 196,904 249,496 180,529 158,757 174,594 409,940 282,361 Changes of benefit terms - - - - - - 3,404,969 Differences between expected and actual experience - 137,821 ( 78,468) 65,911 65,498 819,208 ( 526,887) Changes of assumptions 578,039 ( 491,888) 1,280,343 1,275,769 315,113 (3,702,745) 460,832

Benefits payments and admin expenses ( 190,420) ( 220,060) ( 220,084) (231,815) (240,012) (304,558) ( 628,972) Net change in TLL 790,799 ( 160,260) 1,378,298 1,554,430 665,297 (2,509,893) 3,422,375 TLL - beginning of year 6,039,197 6,829,996 6,669,736 8,048,034 9 ,602,464 1 0,267,761 7,757,868 TLL - end of year $ 6,829,996 $ 6,669,736 $ 8,048,034 $ 9 ,602,464 $ 1 0,267,761 $ 7 ,757,868 $ 11,180,243

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 $ 1 0,267,761 $ 7 ,757,868 $ 11,180,243

PFNP as a % of TLL 0% 0% 0% 0% 0% 0% 0% Covered employee payroll - * N/A 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 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 1 0 5 5 5 5 6 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.

133

QUEEN ANNE'S COUNTY, MARYLAND

LENGTH OF SERVICE AWARD PROGRAM (LOSAP)

REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2024

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 2024 Monthly benefit increased from $6 to $10, vesting requirment increased from 5-years to 10-years, terminatedvested members <= 10 years of service paid PVAB via lump sum 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 2024 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% December 31, 2023 3.79% 134

O S I

THER UPPLEMENTARY NFORMATION

135 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.

136 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.

137

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 businesses and 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.

Community Partnerships 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.

Dredging Special Assessments – This fund accounts for activities funded by special assessment funds collected to repay loans for specific dredging and erosion projects that benefited Price’s Creek, Grove Creek, and Narrows Pointe and is included in the conservation of natural resources function.

138 Kent Narrows – This fund accounts for activities funded by tax revenues to improve the Kent Narrows area and is included in the economic and community development function.

Capital Projects – School Impact 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.

139

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING BALANCE SHEET

NON-MAJOR GOVERNMENTAL FUNDS

June 30, 2024

COMMUNITY

HOUSING AND ECONOMIC PARTNERSHIPS

DEPARTMENT COMMUNITY REVOLVING DEVELOPMENT ROADS FOR

OF AGING SERVICES LOAN FUND INCENTIVE OPERATING CHILDREN

ASSETS

Cash and Cash Equivalents $ - $ 5,313,340 $ 40,000 $ 1,175,041 $ 532,773 $ 195,076 Prepaid Items - - - - - - Receivables Taxes Receivable (Net) - - - - - - Accounts Receivable (Net) - - - - 82,664 19,155 Loans Receivable (Net) - 6,194,339 50,000 - - - Special Assessments (Net) - - - - - - Due from Other Governments 530,563 91,451 - - 519,501 363,017 Inventory - - - - 1,218,486 - Total Assets $ 530,563 $ 11,599,130 $ 90,000 $ 1,175,041 $ 2,353,424 $ 577,248

LIABILITIES

Accrued Liabilities $ 194,943 $ 66,809 $ - $ - $ 209,912 $ 127,422 Due to Other Funds 206,488 - - - - - Due to Component Units - - - - - 70,038 Due to Other Governmental Agencies - 3,507 - - - 313,364 Unearned Revenue - - - - 816,137 - Total Liabilities 401,431 70,316 - - 1,026,049 510,824

DEFERRED INFLOWS OF RESOURCES

Unavailable Benefit Assessments - - - - - - Unavailable Fees - - - - - - Total Deferred Inflows - - - - - - Total Liabilities and Deferred Inflows 401,431 70,316 - - 1,026,049 510,824

FUND BALANCES

Nonspendable - - - - 1,218,486 - Restricted 955 2,843,180 - - - - Committed - 8,685,634 90,000 1,175,041 - - Assigned 128,177 - - - 108,889 66,424 Unassigned - - - - - - Total Fund Balances 129,132 11,528,814 90,000 1,175,041 1,327,375 66,424 Total Liabilities, Deferred Inflows and Fund Balances $ 530,563 $ 11,599,130 $ 90,000 $ 1,175,041 $ 2,353,424 $ 577,248 140

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING BALANCE SHEET

NON-MAJOR GOVERNMENTAL FUNDS

June 30, 2024

(CONTINUED)

SHERIFF'S

DRUG DREDGING

CRITICAL LAW TASK INMATE AGRICULTURAL RURAL SPECIAL

AREAS LIBRARY FORCE WELFARE TRANSFER LEGACY ASSESSMENTS

$ 383,627 $ 552,620 $ 222,625 $ 167,495 $ 1,986,162 $ 426,595 $ 14,797

- - - - - - -

- - - - - - -

- 8,172 - - - - 2

- - - - - - -

- - - - - - 559,554

- - - - - - -

- - - - - - -

$ 383,627 $ 560,792 $ 222,625 $ 167,495 $ 1,986,162 $ 426,595 $ 574,353 $ - $ 379 $ 55,197 $ 3,155 $ 13,768 $ - $ -

- - - - - - -

- - - - - - -

- - - - - - -

- - - - - - -

- 379 55,197 3,155 13,768 - -

- - - - - - 559,554

- - - - - - -

- - - - - - 559,554

- 379 55,197 3,155 13,768 - 559,554

- - - - - - -

383,627 - 167,428 164,340 1,972,394 426,595 14,799

- - - - - - -

- 560,413 - - - - -

- - - - - - -

383,627 560,413 167,428 164,340 1,972,394 426,595 14,799 $ 383,627 $ 560,792 $ 222,625 $ 167,495 $ 1,986,162 $ 426,595 $ 574,353

CONTINUED

141

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING BALANCE SHEET

NON-MAJOR GOVERNMENTAL FUNDS

June 30, 2024

(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 $ 257,426 $ 12,500,272 $ 404,988 $ 859,958 $ 2 5,032,795 Prepaid Items - - - - - Receivables Taxes Receivable (Net) - - - - - Accounts Receivable (Net) - - - - 1 09,993 Loans Receivable (Net) - 64,166 9,076 21,228 6 ,338,809 Special Assessments (Net) - - - - 5 59,554 Due from Other Governments - - - - 1 ,504,532 Inventory - - - - 1 ,218,486 Total Assets $ 257,426 $ 12,564,438 $ 414,064 $ 881,186 $ 3 4,764,169

LIABILITIES

Accrued Liabilities $ - $ 968 $ 112 $ 108 $ 6 72,773 Due to Other Funds - - - - 2 06,488 Due to Component Units - - - - 7 0,038 Due to Other Governmental Agencies - - - - 3 16,871 Unearned Revenue - - - - 8 16,137 Total Liabilities - 968 112 108 2 ,082,307

DEFERRED INFLOWS OF RESOURCES

Unavailable Benefit Assessments - - - - 5 59,554 Unavailable Fees - 64,166 9,076 21,228 9 4,470 Total Deferred Inflows - 64,166 9,076 21,228 6 54,024 Total Liabilities and Deferred Inflows - 65,134 9,188 21,336 2 ,736,331

FUND BALANCES

Nonspendable - - - - 1 ,218,486 Restricted 257,426 - - - 6 ,230,744 Committed - 12,499,304 404,876 859,850 2 3,714,705 Assigned - - - - 8 63,903 Unassigned - - - - - Total Fund Balances 257,426 12,499,304 404,876 859,850 3 2,027,838 Total Liabilities, Deferred Inflows and Fund Balances $ 257,426 $ 12,564,438 $ 414,064 $ 881,186 $ 3 4,764,169 142 143

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, 2024

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 32,381 - - - - State Shared Taxes - - - - 1 ,528,714 - Licenses and Permits - - - - - - Intergovernmental 1 ,660,145 3 49,906 - - - 7 27,489 Charges for Current Services 6 2,176 - - - 1 73,947 - Fines and Forfeitures - - - - - - Investment Income 2 4,171 5 4,339 - - - 2 06 Donations 2 2,978 - - - - - Miscellaneous - 4 36 - 1 4,049 9 ,409 1 5,919

Total Revenues 1 ,769,470 6 37,062 - 1 4,049 1 ,712,070 7 43,614

EXPENDITURES

Current General Government - - - - - - Public Safety - - - - - - Public Works - - - - 5 ,825,692 - Parks & Recreation - - - - - - Health & Social Services 4 ,245,298 - - - - 1 ,234,719 Conservation of Natural Resources - - - - - - Economic/Community Development - 1 ,044,310 - 7 1,599 - - Capital Outlay - - - - - - Debt Service Principal - - - - - - Interest and Fiscal Charges - - - - - - Total Expenditures 4 ,245,298 1 ,044,310 - 7 1,599 5 ,825,692 1 ,234,719

Excess of Revenues Over (Under) Expenditures (2,475,828) (407,248) - (57,550) (4,113,622) (491,105)

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - 60,477 - Insurance Proceeds 1 1,053 - - - - - Transfers In 2 ,481,280 7 21,418 - 2 97,619 4 ,053,145 4 91,311 Transfers Out - - - - - - Other Financing Sources (Uses) 2 ,492,333 7 21,418 - 2 97,619 4 ,113,622 4 91,311 Net Increase (Decrease) in Fund Balances 1 6,505 3 14,170 - 2 40,069 - 2 06 Fund Balances, July 1 1 12,627 1 1,214,644 9 0,000 9 34,972 1 ,327,375 6 6,218

Fund Balances, June 30 $ 1 29,132 $ 1 1,528,814 $ 9 0,000 $ 1 ,175,041 $ 1 ,327,375 $ 6 6,424 144

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, 2024

(CONTINUED)

SHERIFF'S

DRUG DREDGING

CRITICAL LAW TASK INMATE AGRICULTURAL RURAL SPECIAL

AREAS LIBRARY FORCE WELFARE TRANSFER LEGACY ASSESSMENTS

$ - $ - $ - $ - $ - $ - $ -

- - - - - - -

- - - - 3 1,473 - -

- - - - - - -

- - - - - 1 ,380,064 -

1 0,938 1 2,530 - 8 4,488 - - 4 8,412

- 3 2,375 4 8,123 - - - -

- 2 8,040 1 1,546 9 ,400 - 2 5,495 4 38

- - - - - - -

- - - 1 1,124 - - -

1 0,938 7 2,945 5 9,669 1 05,012 3 1,473 1 ,405,559 4 8,850

- 1 7,675 - - - - -

- - 4 7,396 1 27,433 - - -

- - - - - - -

- - - - - - -

- - - - - - -

- - - - 1 ,360,346 1 ,398,769 -

- - - - - - -

- - - - - - -

- - - - - - 4 7,816

- - - - - - -

- 1 7,675 4 7,396 1 27,433 1 ,360,346 1 ,398,769 4 7,816

1 0,938 5 5,270 1 2,273 (22,421) (1,328,873) 6 ,790 1 ,034

- - - - - - -

- - - - - - -

- - - - 1 ,274,050 - 7 ,950

- - - - - - -

- - - - 1 ,274,050 - 7 ,950

1 0,938 5 5,270 1 2,273 (22,421) (54,823) 6 ,790 8 ,984 3 72,689 5 05,143 1 55,155 1 86,761 2 ,027,217 4 19,805 5 ,815 $ 3 83,627 $ 5 60,413 $ 1 67,428 $ 1 64,340 $ 1 ,972,394 $ 4 26,595 $ 1 4,799

CONTINUED

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, 2024

(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 $ 6 0,101 $ - $ - $ - $ 6 0,101 Recordation Taxes - - - - 2 32,381 State Shared Taxes - - - - 1 ,560,187 Licenses and Permits - - - - - Intergovernmental - - - - 4 ,117,604 Charges for Current Services - 2 ,291,783 3 19,113 2 52,361 3 ,255,748 Fines and Forfeitures - - - - 8 0,498 Investment Income 1 2,625 6 96,862 3 2,463 3 7,586 9 33,171 Donations - - - - 2 2,978 Miscellaneous - - - - 5 0,937

Total Revenues 7 2,726 2 ,988,645 3 51,576 2 89,947 1 0,313,605

EXPENDITURES

Current General Government - - - - 1 7,675 Public Safety - - 6 02,031 - 7 76,860 Public Works - - - - 5 ,825,692 Parks & Recreation - - - - - Health & Social Services - - - - 5 ,480,017 Conservation of Natural Resources - - - - 2 ,759,115 Economic/Community Development - - - - 1 ,115,909 Capital Outlay - - - - - Debt Service Principal - - - - 4 7,816 Interest and Fiscal Charges - - - - - Total Expenditures - - 6 02,031 - 1 6,023,084

Excess of Revenues Over (Under) Expenditures 7 2,726 2 ,988,645 (250,455) 2 89,947 (5,709,479)

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - 6 0,477 Insurance Proceeds - - - - 1 1,053 Transfers In - - 5 3,300 - 9 ,380,073 Transfers Out - (2,165,911) - - (2,165,911) Other Financing Sources (Uses) - (2,165,911) 5 3,300 - 7 ,285,692 Net Increase (Decrease) in Fund Balances 7 2,726 8 22,734 (197,155) 2 89,947 1 ,576,213 Fund Balances, July 1 1 84,700 1 1,676,570 6 02,031 5 69,903 3 0,451,625 Fund Balances, June 30 $ 2 57,426 $ 1 2,499,304 $ 4 04,876 $ 8 59,850 $ 3 2,027,838

146 147

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, 2024

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 - - - - 200,000 200,000 232,381 32,381 State Shared Taxes - - - - - - - - Licenses and Permits - - - - - - - - Intergovernmental 1,204,915 1,851,468 1,660,145 ( 191,323) 279,332 459,635 349,906 ( 109,729) Charges for Current Services 83,000 83,000 62,176 ( 20,824) 400,000 400,000 - ( 400,000) Fines and Forfeitures - - - - - - - -

Investment Income - - 24,171 24,171 - - 54,339 54,339 Donations 35,000 35,000 22,978 ( 12,022) - - - - Miscellaneous 36,600 36,600 - ( 36,600) - - 436 436 Total Revenues 1,359,515 2,006,068 1,769,470 ( 236,598) 879,332 1,059,635 637,062 ( 422,573)

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services 4,046,200 4,673,526 4,245,298 428,228 - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development - - - - 1,522,032 1,842,051 1,044,310 797,741 Intergovernmental - - - - - - - -

Miscellaneous - - - - - - - - Capital Outlay - - - - - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 4,046,200 4,673,526 4,245,298 428,228 1,522,032 1,842,051 1,044,310 797,741 Excess of Revenues Over (Under) Expenditures ( 2,686,685) ( 2,667,458) ( 2,475,828) 191,630 ( 642,700) ( 782,416) ( 407,248) 375,168

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - 11,053 11,053 - - - - Transfers In 2,686,685 2,667,458 2,481,280 ( 186,178) 642,700 782,416 751,418 ( 30,998) Transfers Out - - - - - ( 30,000) ( 30,000) - Total Other Financing Sources (Uses) 2,686,685 2,667,458 2,492,333 ( 175,125) 642,700 752,416 721,418 ( 30,998) Net Increase (Decrease) in Fund Balances $ - $ - $ 16,505 $ 16,505 $ - $ ( 30,000) $ 314,170 $ 344,170

148

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, 2024

(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 - - - - 1,519,500 1,519,500 1,528,714 9,214 Licenses and Permits - - - - - - - - Intergovernmental - - - - - - - - Charges for Current Services - - - - 95,000 95,000 173,947 78,947 Fines and Forfeitures - - - - - - - - Investment Income - - - - - - - - Donations - - - - - - - - Miscellaneous 27,100 27,100 14,049 ( 13,051) - - 9,409 9,409

Total Revenues 27,100 27,100 14,049 ( 13,051) 1,614,500 1,614,500 1,712,070 97,570

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - 6,213,151 6,407,294 5,825,692 581,602 Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development 350,000 350,000 71,599 278,401 - - - - Intergovernmental - - - - - - - -

Miscellaneous - - - - - - - - Capital Outlay - - - - - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 350,000 350,000 71,599 278,401 6,213,151 6,407,294 5,825,692 581,602 Excess of Revenues Over (Under) Expenditures ( 322,900) ( 322,900) ( 57,550) 265,350 ( 4,598,651) ( 4,792,794) ( 4,113,622) 679,172

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - 60,477 60,477 Insurance Proceeds - - - - - - - - Transfers In 297,619 297,619 297,619 - 4,598,651 4,792,794 4,053,145 ( 739,649) Transfers Out - - - - - - - - Total Other Financing Sources (Uses) 297,619 297,619 297,619 - 4,598,651 4,792,794 4,113,622 ( 679,172) Net Increase (Decrease) in Fund Balances $ ( 25,281) $ ( 25,281) $ 240,069 $ 265,350 $ - $ - $ - $ -

CONTINUED

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, 2024

(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 708,427 748,427 727,489 ( 20,938) - - - - Charges for Current Services - - - - 10,000 10,000 12,530 2,530 Fines and Forfeitures - - - - 15,500 15,500 32,375 16,875 Investment Income - - 206 206 - - 28,040 28,040 Donations - - - - - - - -

Miscellaneous 12,500 12,500 15,919 3,419 - - - - Total Revenues 720,927 760,927 743,614 ( 17,313) 25,500 25,500 72,945 47,445

EXPENDITURES

Current General Government - - - - 25,500 25,500 17,675 7,825 Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services 1,371,131 1,335,572 1,234,719 100,853 - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development - - - - - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - -

Capital Outlay - - - - - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 1,371,131 1,335,572 1,234,719 100,853 25,500 25,500 17,675 7,825 Excess of Revenues Over (Under) Expenditures ( 650,204) ( 574,645) ( 491,105) 83,540 - - 55,270 55,270

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In 650,204 574,645 491,311 ( 83,334) - - - - Transfers Out - - - - - - - - Total Other Financing Sources (Uses) 650,204 574,645 491,311 ( 83,334) - - - - Net Increase (Decrease) in Fund Balances $ - $ - $ 206 $ 206 $ - $ - $ 55,270 $ 55,270 150

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, 2024

(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 31,473 ( 93,527) Licenses and Permits - - - - - - - - Intergovernmental 10,890 10,890 - ( 10,890) - - - - Charges for Current Services 125,000 125,000 84,488 ( 40,512) - - - - Fines and Forfeitures - - - - - - - - Investment Income - - 9,400 9,400 - - - - Donations - - - - - - - -

Miscellaneous 16,310 16,310 11,124 ( 5,186) - - - - Total Revenues 152,200 152,200 105,012 ( 47,188) 125,000 125,000 31,473 ( 93,527)

EXPENDITURES

Current General Government - - - - - - - - Public Safety 148,150 148,150 127,433 20,717 - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - 1,425,000 2,699,050 1,360,346 1,338,704 Economic/Community Development - - - - - - - - Intergovernmental - - - - - - - -

Miscellaneous - - - - - - - - Capital Outlay 15,000 15,000 - 15,000 - - - - Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 163,150 163,150 127,433 35,717 1,425,000 2,699,050 1,360,346 1,338,704 Excess of Revenues Over (Under) Expenditures ( 10,950) ( 10,950) ( 22,421) ( 11,471) ( 1,300,000) ( 2,574,050) ( 1,328,873) 1,245,177

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In - - - - - 1,274,050 1,274,050 - Transfers Out - - - - - - - - Total Other Financing Sources (Uses) - - - - - 1,274,050 1,274,050 - Net Increase (Decrease) in Fund Balances $ ( 10,950) $ ( 10,950) $ ( 22,421) $ ( 11,471) $ ( 1,300,000) $ ( 1,300,000) $ ( 54,823) $ 1,245,177

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, 2024

(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 1,307,452 1,380,064 1,380,064 - - - - - Charges for Current Services - - - - 47,816 47,816 48,412 596 Fines and Forfeitures - - - - - - - - Investment Income - 18,705 25,495 6,790 - - 438 438 Donations - - - - - - - - Miscellaneous - - - - - - - -

Total Revenues 1,307,452 1,398,769 1,405,559 6,790 47,816 47,816 48,850 1,034

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources 1,307,452 1,398,769 1,398,769 - - 7,950 - 7,950 Economic/Community Development - - - - - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - -

Capital Outlay - - - - - - - - Debt Service Principal - - - - 47,816 47,816 47,816 - Interest - - - - - - - - Total Expenditures 1,307,452 1,398,769 1,398,769 - 47,816 55,766 47,816 7,950 Excess of Revenues Over (Under) Expenditures - - 6,790 6,790 - ( 7,950) 1,034 8,984

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In - - - - - 7,950 7,950 - Transfers Out - - - - - - - - Total Other Financing Sources (Uses) - - - - - 7,950 7,950 - Net Increase (Decrease) in Fund Balances $ - $ - $ 6,790 $ 6,790 $ - $ - $ 8,984 $ 8,984 152

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, 2024

(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 $ 50,000 $ 50,000 $ 60,101 $ 10,101 $ - $ - $ - $ - Recordation Taxes - - - - - - - - State Shared Taxes - - - - - - - - Licenses and Permits - - - - - - - - Intergovernmental - - - - - - - - Charges for Current Services - - - - 2,095,911 2,095,911 2,291,783 195,872 Fines and Forfeitures - - - - - - - - Investment Income - - 12,625 12,625 70,000 70,000 696,862 626,862 Donations - - - - - - - -

Miscellaneous - - - - - - - - Total Revenues 50,000 50,000 72,726 22,726 2,165,911 2,165,911 2,988,645 822,734

EXPENDITURES

Current General Government - - - - - - - - Public Safety - - - - - - - - Public Works - - - - - - - - Parks & Recreation - - - - - - - - Health and Social Services - - - - - - - - Education and Library - - - - - - - - Conservation of Natural Resources - - - - - - - - Economic/Community Development 50,000 50,000 - 50,000 - - - - Intergovernmental - - - - - - - - Miscellaneous - - - - - - - - Capital Outlay - - - - - - - -

Debt Service Principal - - - - - - - - Interest - - - - - - - - Total Expenditures 50,000 50,000 - 50,000 - - - - Excess of Revenues Over (Under) Expenditures - - 72,726 72,726 2,165,911 2,165,911 2,988,645 822,734

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In - - - - - - - - Transfers Out - - - - ( 2,165,911) ( 2,165,911) ( 2,165,911) - Total Other Financing Sources (Uses) - - - - ( 2,165,911) ( 2,165,911) ( 2,165,911) - Net Increase (Decrease) in Fund Balances $ - $ - $ 72,726 $ 72,726 $ - $ - $ 822,734 $ 822,734

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, 2024

(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 291,500 253,235 319,113 65,878 299,600 299,600 252,361 ( 47,239) Fines and Forfeitures - - - - - - - - Investment Income 1,200 1,200 32,463 31,263 400 400 37,586 37,186 Donations - - - - - - - -

Miscellaneous - - - - - - - - Total Revenues 292,700 254,435 351,576 97,141 300,000 300,000 289,947 ( 10,053)

EXPENDITURES

Current General Government - - - - - - - - Public Safety 382,700 602,031 602,031 - - - - - 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 382,700 602,031 602,031 - - - - - Excess of Revenues Over (Under) Expenditures ( 90,000) ( 347,596) ( 250,455) 97,141 300,000 300,000 289,947 ( 10,053)

OTHER FINANCING SOURCES (USES)

Proceeds of Capital Asset Disposals - - - - - - - - Insurance Proceeds - - - - - - - - Transfers In 90,000 90,000 53,300 ( 36,700) - - - - Transfers Out - - - - ( 300,000) ( 300,000) - 300,000 Total Other Financing Sources (Uses) 90,000 90,000 53,300 ( 36,700) ( 300,000) ( 300,000) - 300,000 Net Increase (Decrease) in Fund Balances $ - $ ( 257,596) $ ( 197,155) $ 60,441 $ - $ - $ 289,947 $ 289,947

154

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 obsolescence of capital

assets; and (3) to the extent that funds are not borrowed, finance the cost of expansion of physical facilities.

155

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 County and can also access the marinas for temporary mooring.

156

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF NET POSITION

NON-MAJOR ENTERPRISE FUNDS

June 30, 2024

PUBLIC TOTAL

GOLF LANDINGS NON-MAJOR

COURSE AND MARINAS ENTERPRISE

ASSETS

Current Assets Equity in Pooled Cash $ - $ 859,726 $ 859,726 Prepaid Items 2,520 - 2,520 Accounts Receivable (Net) - 90,990 90,990 Due from Other Governments - 14,999 14,999 Inventories 8,104 - 8,104 Total Current Assets 10,624 965,715 976,339 Capital Assets 3,979,223 7,571,780 11,551,003 Less Accumulated Depreciation (896,618) (1,897,466) (2,794,084) Total Capital Assets, Net of Depreciation 3,082,605 5,674,314 8,756,919

Total Assets 3,093,229 6,640,029 9,733,258

DEFERRED OUTFLOWS OF RESOURCES

OPEB - 4,883 4,883

Pension Benefits 46,896 95,062 141,958 Deferred Charge on Refunding - 441 441 Total Deferred Outflows of Resources 46,896 100,386 147,282

LIABILITIES

Current Liabilities Accounts Payable 57,307 30,447 87,754 Accrued Interest Payable 1,358 7,657 9,015 Due to Other Funds 185,929 - 185,929 Unearned Revenue 9,801 - 9,801 Current Portion of Compensated Absences 11,686 28,689 40,375 Current Portion of Lease Payable 27,922 - 27,922 Current Portion of Bonds/Notes Payable 5,036 75,840 80,876 Total Current Liabilities 299,039 142,633 441,672 Noncurrent Liabilities

Compensated Absences 8,136 19,975 28,111

OPEB - 228,350 228,350

Net Pension Liability 81,325 166,007 247,332 Lease Payable 82,792 - 82,792 Bonds/Notes Payable 75,163 547,758 622,921 Total Noncurrent Liabilities 247,416 962,090 1,209,506 Total Liabilities 546,455 1,104,723 1,651,178

DEFERRED INFLOWS OF RESOURCES

OPEB - 56,958 56,958

Pension Benefits 12,738 24,941 37,679 Bond Refundings - 1,338 1,338 Total Deferred Inflows of Resources 12,738 83,237 95,975

NET POSITION

Net Investment in Capital Assets 2,891,692 5,049,819 7,941,511 Unrestricted Amounts (Deficit) (310,760) 502,636 191,876 Total Net Position $ 2,580,932 $ 5,552,455 $ 8,133,387 157

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, 2024

PUBLIC TOTAL

GOLF LANDINGS NON-MAJOR

COURSE AND MARINAS ENTERPRISE

OPERATING REVENUES

Charges for Services $ 720,153 $ 465,457 $ 1,185,610 Intergovernmental - 14,999 14,999 Material Sales 59,280 - 59,280 Miscellaneous Revenues 1,401 37,765 39,166 Total Operating Revenues 780,834 518,221 1,299,055

OPERATING EXPENSES

Recreation 657,995 511,826 1,169,821

OPEB - (13,421) (13,421)

Pension Liability Adjustment (3,099) (6,503) (9,602) Depreciation and amortization 71,170 160,093 231,263 Total Operating Expenses 726,066 651,995 1,378,061 Operating Income (Loss) 54,768 (133,774) (79,006)

NON-OPERATING REVENUES (EXPENSES)

Interest Expense (4,842) (14,300) (19,142) Total Non-Operating (Expenses) (4,842) (14,300) (19,142) Transfers In (Out) 275,000 150,000 425,000 Change in Net Position 324,926 1,926 326,852 Total Net Position - Beginning of Year 2,256,006 5,550,529 7,806,535 Total Net Position - End of Year $ 2,580,932 $ 5,552,455 $ 8,133,387 158

QUEEN ANNE'S COUNTY, MARYLAND

COMBINING STATEMENT OF CASH FLOWS

NON-MAJOR ENTERPRISE FUNDS

FOR THE YEAR ENDED JUNE 30, 2024

PUBLIC TOTAL

GOLF LANDINGS NON-MAJOR

COURSE AND MARINAS ENTERPRISE

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers and users $ 779,433 $ 440,558 $ 1,219,991 Receipts from other operating revenues 4,423 116,155 120,578 Payments to suppliers (421,621) (276,228) (697,849) Payments to employees and on behalf of employees (218,547) (303,610) (522,157) Net Cash Provided (Used) by Operating Activities 143,688 (23,125) 120,563

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers from (to) other funds 275,000 150,000 425,000 (Payments) Receipts of interfund loans (108,118) - (108,118) Net Cash Provided by Noncapital Financing Activities 166,882 150,000 316,882

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Principal paid on lease and bond payables (32,051) (72,952) (105,003) Interest paid on capital debt (4,992) (15,075) (20,067) Acquisition and Construction of Capital Assets (273,527) - (273,527) Net Cash Used by Capital and Related Financing Activities (310,570) (88,027) (398,597)

CASH FLOWS FROM INVESTING ACTIVITIES

Investment income - - - Net Cash Provided (Used) by Investing Activities - - - Net increase (decrease) in cash and cash equivalents - 38,848 38,848 Balances - Beginning of year - 820,878 820,878 Balances - End of year $ - $ 859,726 $ 859,726 Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ 54,768 $ (133,774) $ (79,006) Adjustments to reconcile operating income (loss)

to net cash provided by operating activities:

Amortization and Depreciation 71,170 160,093 231,263 Changes in assets and liabilities:

Accounts receivable, net - (24,899) (24,899) Operating grants receivable - 63,391 63,391 Inventories and Prepaid Expenses (2,586) - (2,586) Vendor accounts payable 19,867 (66,859) (46,992) Uneared revenue collected in advance 3,022 - 3,022 Compensated absences 545 (1,152) (607)

OPEB - (13,421) (13,421)

Net Pension Liability (3,098) (6,504) (9,602) Net Cash Provided (Used) by Operating Activities $ 143,688 $ (23,125) $ 120,563 159

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.

Custodial Funds 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 Custodial Funds are included in this section.

160 .

CUSTODIAL FUNDS

Custodial funds 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 deposited into an account established for the inmates. Inmates can use these funds to make purchases at the commissary. Any remaining funds belonging to an inmate is paid to them upon release.

161

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS

JUNE 30, 2024

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 97,165 $ 8 63,410 $ 1 63,530 $ - $ 2 1,652 $ 3 7,680 $ 1 ,283,437 Total Assets $ 1 97,165 $ 8 63,410 $ 1 63,530 $ - $ 2 1,652 $ 3 7,680 $ 1 ,283,437

LIABILITIES

Accounts Payable and Other Liabilities $ 1 1,421 $ - $ - $ - $ - $ 1 ,259 $ 1 2,680 Due to Other Governments - - 1 63,530 - 2 1,652 - 1 85,182 Total Liabilities $ 1 1,421 $ - $ 1 63,530 $ - $ 2 1,652 $ 1 ,259 $ 1 97,862

NET POSITION

Restricted for:

Individuals, Organizations, and other Governments $ 1 85,744 $ 8 63,410 $ - $ - $ - $ 3 6,421 $ 1 ,085,575 162

QUEEN ANNE'S COUNTY, MARYLAND

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2024

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 7,360 $ - $ - $ - $ - $ - $ 3 7,360 Zoning Deposits - 1 99,777 - - - - 1 99,777 Tax Collections for Other Governments - - 1 6,652,672 - - - 1 6,652,672 Motor Vehicle Administration - - - 2 06,879 - - 2 06,879 Escheat - Abandoned Property - - - - 76,003 - 7 6,003 Inmate Welfare - - - - - 1 39,416 1 39,416 Total Additions 3 7,360 1 99,777 1 6,652,672 2 06,879 7 6,003 1 39,416 1 7,312,107

DEDUCTIONS

Distribution of Tax Ditch Funds 4 0,006 - - - - - 4 0,006 Refund of Zoning Deposits - 1 04,037 - - - - 1 04,037 Payments of Tax to Other Governments - - 1 6,652,672 - - - 1 6,652,672 Payments to Motor Vehicle Administration - - - 2 06,879 - - 2 06,879 Payments of Escheat to Others - - - - 7 6,003 - 7 6,003 Distribution of Inmate Welfare Funds - - - - - 1 40,532 1 40,532 Total Deductions 4 0,006 1 04,037 1 6,652,672 2 06,879 7 6,003 1 40,532 1 7,220,129

Net increase (decrease) in Fiduciary Net Position ( 2,646) 9 5,740 - - - ( 1,116) 9 1,978 Net Position-Beginning of Year 1 88,390 7 67,670 - - - 3 7,537 9 93,597 Net Position-End of Year $ 1 85,744 $ 8 63,410 $ - $ - $ - $ 3 6,421 $ 1 ,085,575 163 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.

164

QUEEN ANNE'S COUNTY

COMMUNITY PARTNERSHIPS FOR CHILDREN SPECIAL REVENUE FUND

COMBINING BALANCE SHEETS

BY GRANTOR

JUNE 30, 2024 (with Summarized Totals as of June 30, 2023) Fed/State Total Returned 2023 GOCCP Community Reinvestment 2024 Summarized Admin GOC Partnerships Fund Total Total

ASSETS

Cash and cash equivalents $ 1 13,328 $ 7 1,260 $ 1 84,588 $ 1 0,488 $ 1 95,076 $ 3 38,523 Accounts receivable 1 ,846 1 7,309 1 9,155 - 1 9,155 2 0,936 Due from State governmental agencies - 3 63,017 3 63,017 - 3 63,017 2 57,525 Due from Federal governmental agencies - - - - - - Total Assets $ 1 15,174 $ 4 51,586 $ 5 66,760 $ 1 0,488 $ 5 77,248 $ 6 16,984

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts payable and accrued expenditures $ 1 6,979 $ 1 10,443 $ 1 27,422 $ - $ 1 27,422 $ 2 38,141 Due to Component Units 1 98 6 9,840 7 0,038 - 7 0,038 - Due to State governmental agencies 4 3,887 2 69,477 3 13,364 - 3 13,364 3 12,625 Total Liabilities 6 1,064 4 49,760 5 10,824 - 5 10,824 5 50,766

FUND BALANCES

Assigned 5 4,110 1 ,826 5 5,936 1 0,488 6 6,424 6 6,218 Total Fund Balances 5 4,110 1 ,826 5 5,936 1 0,488 6 6,424 6 6,218 Total Liabilities and Fund Balances $ 1 15,174 $ 4 51,586 $ 5 66,760 $ 1 0,488 $ 5 77,248 $ 6 16,984 165

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, 2024 (with Summarized Totals for Year Ended June 30, 2023) 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 $ 5 2,033 $ 5 ,615 $ 6 0,319 $ 3 6,606 $ 4 5,469 $ 8 2,172 $ 4 2,804 $ - $ 8 1,099 Subtotal CPA 5 2,033 5 ,615 6 0,319 3 6,606 4 5,469 8 2,172 4 2,804 - 8 1,099 Non-CPA Intergovernmental Federal GOCCP Youth Strategies - - - - - - - - - State GOCCP - non-CPA - - - - - - - 2 5,000 - Other State Grant Funding - - - - - 2 96,372 - - - Investment Income - - - - - - - - - Earned Reinvestment Donations - - - - - - - - -

Miscellaneous - - - - - - - - - Subtotal Non-CPA - - - - - 2 96,372 - 2 5,000 - Total Revenues 5 2,033 5 ,615 6 0,319 3 6,606 4 5,469 3 78,544 4 2,804 2 5,000 8 1,099

EXPENDITURES

CPA

Program Contracted Services - - - - - - - - - Other Expenditures Salaries 4 5,737 - - 2 9,354 1 4,258 - - - - Fringe Benefit Costs 3 ,794 - - 5 ,379 1 ,211 - - - - Auditing - - 8 17 - - - - - 3 ,000 Consultants - 5 ,615 - - - - - - - Equipment Rental 7 47 - - - - - - - - Other Contracted Services - - - - - - 3 7,263 - 1 0,511 Postage - - - - - 1 1 04 - - Office Supplies - - - - - 6 87 1 94 - 3 23 Program Supplies - - 1 ,371 - 3 0,000 1 ,450 1 ,202 - 2 ,831

Food - - - - - - - - 5 ,024 Printing and Publishing - - - - - - - - 1 83 Data Processing Supplies - - - - - 1 0,791 - - - Repairs and Equipment - - - - - - 1 ,894 - - Business Travel - - 2 ,485 - - 3 00 7 46 - 2 ,036 Subscriptions and Dues 1 ,754 - - - - - - - - Meetings & Conferences - - - 1 ,873 - - - - - Training - - - - - 8 8 5 46 - 9 00 Advertising - - - - - - 3 40 - - Communications - - 4 00 - - 1 ,032 5 15 - -

Rent - - - - - - - - 2 ,000 Equipment under $1000/$500 - - - - - - - - 2 ,114 Other Charges - - 5 5,246 - - 6 7,823 - - 5 2,177 Subtotal CPA Expenditures 5 2,032 5 ,615 6 0,319 3 6,606 4 5,469 8 2,172 4 2,804 - 8 1,099 Non-CPA Program Contracted Services - - - - - - - 2 5,000 - Other Expenditures Salaries 1 28,125 - - 2 ,173 6 ,443 - - - - Fringe Benefit Costs 6 0,414 - - 5 ,714 6 ,097 - - - - Consultants 1 2,735 - - - - - - - -

Equipment Rental 2 ,555 - - - - - - - - Other Contracted Services - - - - - 2 96,372 - - - Postage 1 72 - - - - - - - - Office Supplies 1 ,517 - - - - - - - - Program Supplies 1 1,592 - - - 8 01 - - - - Food 3 ,119 - - - - - - - - Equipment Operation - - - - - - - - - Business Travel 5 0 - - - - - - - - Subscriptions and Dues - - - - - - - - - Meetings & Conferences 2 ,000 - - 6 5 - - - - - Training 1 ,171 - - - - - - - -

Board's Expenditures 6 ,784 - - - - - - - - Advertising - - - - - - - - - Marketing/Promotions - - - - - - - - - Communications 1 ,998 - - 1 00 - - - - - Equipment under $1,000/$500 - - - 4 00 - - - - - Other Charges 1 1,140 - - - - - - 1 65,255 - Subtotal Non-CPA Expenditures 2 43,372 - - 8 ,452 1 3,341 2 96,372 - 1 90,255 - Total Expenditures 2 95,404 5 ,615 6 0,319 4 5,058 5 8,810 3 78,544 4 2,804 1 90,255 8 1,099

Excess of Revenues Over (Under) Expenditures (243,371) - - (8,452) (13,341) - - (165,255) -

OTHER FINANCING SOURCES

Transfers In for:

Program Contracted Services 2 43,371 - - 8 ,452 1 3,341 - - 1 65,255 - Other Financing Sources 2 43,371 - - 8 ,452 1 3,341 - - 1 65,255 - Net Increase in Fund Balances $ - $ - $ - $ - $ - $ - $ - $ - $ - Fund Balances, July 1 Fund Balances, June 30 166

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, 2024 (with Summarized Totals for Year Ended June 30, 2023)

(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 $ - $ 3 54,084 $ 4 06,117 $ 4 06,117 $ - $ - $ -

- 3 54,084 4 06,117 4 06,117 - - -

- - - - - - -

- 2 5,000 2 5,000 - - 2 5,000 -

- 2 96,372 2 96,372 - - - -

- - - - - - -

- - - - - - -

1 5,919 1 5,919 1 5,919 - - - - 1 5,919 3 37,291 3 37,291 - - 2 5,000 - 1 5,919 6 91,375 7 43,408 4 06,117 - 2 5,000 -

- - - - - - -

- 4 3,612 8 9,349 8 9,349 - - -

- 6 ,590 1 0,384 1 0,384 - - -

- 3 ,817 3 ,817 3 ,817 - - -

- 5 ,615 5 ,615 5 ,615 - - -

- - 7 47 7 47 - - -

- 4 7,774 4 7,774 4 7,774 - - -

- 1 05 1 05 1 05 - - -

- 1 ,204 1 ,204 1 ,204 - - -

- 3 6,854 3 6,854 3 6,854 - - -

- 5 ,024 5 ,024 5 ,024 - - -

- 1 83 1 83 1 83 - - -

- 1 0,791 1 0,791 1 0,791 - - -

- 1 ,894 1 ,894 1 ,894 - - -

- 5 ,567 5 ,567 5 ,567 - - -

- - 1 ,754 1 ,754 - - -

- 1 ,873 1 ,873 1 ,873 - - -

- 1 ,534 1 ,534 1 ,534 - - -

- 3 40 3 40 3 40 - - -

- 1 ,947 1 ,947 1 ,947 - - -

- 2 ,000 2 ,000 2 ,000 - - -

- 2 ,114 2 ,114 2 ,114 - - -

- 1 75,246 1 75,246 1 75,246 - - -

- 3 54,084 4 06,116 4 06,116 - - -

- 2 5,000 2 5,000 - - 2 5,000 -

4 8,933 5 7,549 1 85,674 - - - - 9 ,369 2 1,180 8 1,594 - - - -

- - 1 2,735 - - - -

- - 2 ,555 - - - -

- 2 96,372 2 96,372 - - - -

- - 1 72 - - - -

1 ,281 1 ,281 2 ,798 - - - - 4 ,064 4 ,865 1 6,457 - - - -

- - 3 ,119 - - - -

- - - - - - -

- - 5 0 - - - -

3 72 3 72 3 72 - - - - 8 ,167 8 ,232 1 0,232 - - - -

- - 1 ,171 - - - -

- - 6 ,784 - - - -

2 45 2 45 2 45 - - - - 4 ,380 4 ,380 4 ,380 - - - -

- 1 00 2 ,098 - - - -

- 4 00 4 00 -

- 1 65,255 1 76,395 - - - -

7 6,811 5 85,231 8 28,603 - - 2 5,000 - 7 6,811 9 39,315 1 ,234,719 4 06,116 - 2 5,000 - (60,892) (247,940) (491,311) 1 - - - - 6 0,892 2 47,940 4 91,311 - - - - 6 0,892 2 47,940 4 91,311 - - - - $ - $ - - 1 - - - 5 5,936 6 05,780 (1,679,233) 3 ,491 (25,474) $ 5 5,936 $ 6 05,781 $ (1,679,233) $ 3 ,491 $ (25,474)

CONTINUED

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, 2024 (with Summarized Totals for Year Ended June 30, 2023)

(CONTINUED)

Total Other Community Returned 2023 Non-CPA Partnerships Reinvestment 2024 Summarized State Grants Other Operating Funds Fund Total Total

REVENUES

CPA

Intergovernmental

GOC $ - $ - $ 4 06,117 $ - $ 4 06,117 $ 4 32,980

Subtotal CPA - - 4 06,117 - 4 06,117 4 32,980 Non-CPA Intergovernmental Federal GOCCP Youth Strategies - - - - - - State GOCCP - non-CPA - - 2 5,000 - 2 5,000 - Other State Grant Funding 2 96,372 - 2 96,372 - 2 96,372 2 96,170 Investment Income - - - 2 06 2 06 6 04 Earned Reinvestment Donations - - - - - - Miscellaneous - 1 5,919 1 5,919 - 1 5,919 2 8,897 Subtotal Non-CPA 2 96,372 1 5,919 3 37,291 2 06 3 37,497 3 25,671

Total Revenues 2 96,372 1 5,919 7 43,408 2 06 7 43,614 7 58,651

EXPENDITURES

CPA

Program Contracted Services - - - - - - Other Expenditures Salaries - - 8 9,349 - 8 9,349 8 5,869 Fringe Benefit Costs - - 1 0,384 - 1 0,384 9 ,815 Auditing - - 3 ,817 - 3 ,817 - Consultants - - 5 ,615 - 5 ,615 6 ,633 Equipment Rental - - 7 47 - 7 47 7 47 Other Contracted Services - - 4 7,774 - 4 7,774 8 2,247 Postage - - 1 05 - 1 05 2 Office Supplies - - 1 ,204 - 1 ,204 1 ,072 Program Supplies - - 3 6,854 - 3 6,854 4 5,983

Food - - 5 ,024 - 5 ,024 4 ,146 Printing and Publishing - - 1 83 - 1 83 2 80 Data Processing Supplies - - 1 0,791 - 1 0,791 3 ,240 Repairs and Equipment - - 1 ,894 - 1 ,894 2 ,023 Business Travel - - 5 ,567 - 5 ,567 4 ,638 Subscriptions and Dues - - 1 ,754 - 1 ,754 2 ,955 Meetings & Conferences - - 1 ,873 - 1 ,873 - Training - - 1 ,534 - 1 ,534 3 5,675 Advertising - - 3 40 - 3 40 1 ,349 Communications - - 1 ,947 - 1 ,947 1 ,845

Rent - - 2 ,000 - 2 ,000 8 ,033 Equipment under $1000/$500 - - 2 ,114 - 2 ,114 2 ,298 Other Charges - - 1 75,246 - 1 75,246 1 35,012 Subtotal CPA Expenditures - - 4 06,116 - 4 06,116 4 33,862 Non-CPA Program Contracted Services - - 2 5,000 - 2 5,000 4 16,170 Other Expenditures Salaries - 1 85,674 1 85,674 - 1 85,674 1 24,511 Fringe Benefit Costs - 8 1,594 8 1,594 - 8 1,594 5 5,209 Consultants - 1 2,735 1 2,735 - 1 2,735 4 ,013

Equipment Rental - 2 ,555 2 ,555 - 2 ,555 2 ,819 Other Contracted Services - 2 96,372 2 96,372 - 2 96,372 9 ,188 Postage - 1 72 1 72 - 1 72 1 50 Office Supplies - 2 ,798 2 ,798 - 2 ,798 2 ,773 Program Supplies - 1 6,457 1 6,457 - 1 6,457 1 2,106 Food - 3 ,119 3 ,119 - 3 ,119 2 ,359 Equipment Operation - - - - - 2 80 Business Travel - 5 0 5 0 - 5 0 - Subscriptions and Dues - 3 72 3 72 - 3 72 5 ,000

Meetings & Conferences - 1 0,232 1 0,232 - 1 0,232 2 ,000 Training - 1 ,171 1 ,171 - 1 ,171 2 ,624 Board's Expenditures - 6 ,784 6 ,784 - 6 ,784 4 ,661 Advertising - 2 45 2 45 - 2 45 - Marketing/Promotions - 4 ,380 4 ,380 - 4 ,380 2 ,973 Communications - 2 ,098 2 ,098 - 2 ,098 1 ,326 Equipment under $1,000/$500 - 4 00 4 00 - 4 00 - Other Charges - 1 76,395 1 76,395 - 1 76,395 2 55,085 Subtotal Non-CPA Expenditures - 8 03,603 8 28,603 - 8 28,603 9 03,247

Total Expenditures - 8 03,603 1 ,234,719 - 1 ,234,719 1 ,337,109 Excess of Revenues Over (Under) Expenditures 2 96,372 (787,684) (491,311) 2 06 (491,105) (578,458)

OTHER FINANCING SOURCES

Transfers In for:

Program Contracted Services - 4 91,311 4 91,311 - 4 91,311 5 79,062 Other Financing Sources - 4 91,311 4 91,311 - 4 91,311 5 79,062 Net Increase in Fund Balances 2 96,372 (296,373) - 2 06 2 06 6 04 Fund Balances, July 1 - 1 ,151,371 5 5,936 1 0,282 6 6,218 6 5,614 Fund Balances, June 30 $ 2 96,372 $ 8 54,998 $ 5 5,936 $ 1 0,488 $ 6 6,424 $ 6 6,218 168 169

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, 2024

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 $ 412,055 $ 452,055 $ 431,117 $ (20,938) $ - $ - $ - $ - Other 296,372 296,372 296,372 - - - - - Investment Income - - - - - - 206 206 Donations - - - - - - - - Miscellaneous 12,500 12,500 15,919 3,419 - - - - Total Revenues 720,927 760,927 743,408 (17,519) - - 206 206

EXPENDITURES

Program Contracted Services - - 25,000 (25,000) - - - - Other Expenditures Salaries 237,931 270,210 275,023 (4,813) - - - - Fringe Benefit Costs 93,799 105,961 91,978 13,983 - - - - Auditing 817 3,817 3,817 - - - - - Consultants 18,993 18,993 18,350 643 - - - - Equipment Rental 3,252 3,252 3,302 ( 50) - - - - Other Contracted Services 503,402 393,402 344,146 49,256 - - - - Postage 510 510 277 233 - - - -

Office Supplies 5,465 5,715 4,002 1,713 - - - - Program Supplies 50,378 50,568 53,311 (2,743) - - - - Food 5,444 6,750 8,143 (1,393) - - - - Printing and Publishing 600 750 183 567 - - - - Data Processing Supplies 2,856 2,856 10,791 (7,935) - - - - Repairs and Equipment 1,600 1,600 1,894 ( 294) - - - - Equipment Operation - - - - - - - - Business Travel 3,614 4,318 5,617 (1,299) - - - - Subscriptions and Dues 3,000 3,000 2,126 874 - - - -

Meetings & Conferences 3,200 3,200 12,105 (8,905) - - - - Training 2,900 3,650 2,705 945 - - - - Board's Expenditures 7,038 7,038 6,784 254 - - - - Advertising 420 670 585 85 - - - - Marketing/Promotions 3,300 3,300 4,380 (1,080) - - - - Communications 3,834 3,834 4,045 ( 211) - - - - Rent 10,800 10,800 2,000 8,800 - - - - Equipment 3,654 5,590 2,514 3,076 - - - - Other Charges 404,324 425,788 351,641 74,147 - - - -

Total Expenditures 1,371,131 1,335,572 1,234,719 100,853 - - - - Excess of Revenues Over (Under) Expenditures (650,204) (574,645) (491,311) 83,334 - - 206 206

OTHER FINANCING SOURCES

Transfers In for:

Program Contracted Services 650,204 574,645 491,311 (83,334) - - - - Other Financing Sources 650,204 574,645 491,311 (83,334) - - - - Net Increase in Fund Balances $ - $ - - $ - $ - $ - 206 $ 206 Fund Balances, July 1 55,936 10,282 Fund Balances, June 30 $ 55,936 $ 10,488 170

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, 2024

(CONTINUED)

TOTAL

Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) $ 412,055 $ 452,055 $ 431,117 $ (20,938) 296,372 296,372 296,372 -

- - 206 206

- - - -

12,500 12,500 15,919 3,419 720,927 760,927 743,614 (17,313)

- - 25,000 (25,000)

237,931 270,210 275,023 (4,813) 93,799 105,961 91,978 13,983 817 3,817 3,817 - 18,993 18,993 18,350 643 3,252 3,252 3,302 ( 50) 503,402 393,402 344,146 49,256 510 510 277 233 5,465 5,715 4,002 1,713 50,378 50,568 53,311 (2,743) 5,444 6,750 8,143 (1,393) 600 750 183 567 2,856 2,856 10,791 (7,935) 1,600 1,600 1,894 ( 294)

- - - -

3,614 4,318 5,617 (1,299) 3,000 3,000 2,126 874 3,200 3,200 12,105 (8,905) 2,900 3,650 2,705 945 7,038 7,038 6,784 254 420 670 585 85 3,300 3,300 4,380 (1,080) 3,834 3,834 4,045 ( 211) 10,800 10,800 2,000 8,800 3,654 5,590 2,514 3,076 404,324 425,788 351,641 74,147 1,371,131 1,335,572 1,234,719 100,853 (650,204) (574,645) (491,105) 83,540 650,204 574,645 491,311 (83,334) 650,204 574,645 491,311 (83,334)

$ - $ - 206 $ 206 66,218 $ 66,424 171

S S

TATISTICAL ECTION

172

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 – Information to 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.

173

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

NET POSITION BY COMPONENT - GOVERNMENT-WIDE

(GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES)

LAST TEN FISCAL YEARS

Table 1 2015 2016 2017 2018 2019 Governmental Activities:

Net Investment in Capital Assets $ 125,434,538 $ 123,466,319 $ 120,249,244 $ 114,794,226 $ 115,143,089 Restricted 20,464,486 2 1,063,295 1 3,094,534 1 3,275,244 1 8,962,289 Unrestricted (deficit) (1) ( 73,475,567) (78,567,505) (67,189,342) (58,025,753) (61,637,321) Total Governmental Activities Net Position (1) 72,423,457 6 5,962,109 (2) 6 6,154,436 (3) 7 0,043,717 7 2,468,057 Business-type Activities:

Net Investment in Capital Assets 80,787,152 8 0,909,015 8 6,163,078 8 4,386,291 8 5,916,730 Restricted 3,061,534 1 ,699,914 1 ,700,836 1 ,060,134 2 ,234,440 Unrestricted 8,486,063 1 0,240,161 4 ,116,300 7 ,458,996 1 0,087,649 Total Business-type Activities Net Position (1) 92,334,749 9 2,849,090 (2) 9 1,980,214 (3) 9 2,905,421 9 8,238,819 Primary Government:

Net Investment in Capital Assets 206,221,690 2 04,375,334 2 06,412,322 1 99,180,517 2 01,059,819 Restricted 23,526,020 2 2,763,209 1 4,795,370 1 4,335,378 2 1,196,729 Unrestricted (deficit) (1) ( 64,989,504) (68,327,344) (63,073,042) (50,566,757) (51,549,672) Total Primary Government Net Position (1) $ 164,758,206 $ 158,811,199 (2) $ 158,134,650 (3) $ 162,949,138 $ 170,706,876

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 $ ( 64,989,504) $ (68,327,344) $ (63,073,042) $ (50,566,757) $ (51,549,672) Debt issued for capital on behalf of others 66,219,608 6 3,271,304 5 9,207,136 5 8,625,356 5 8,007,072 County (deficit) net position absent the effect of this relationship $ 1,230,104 $ (5,056,040) $ (3,865,906) $ 8 ,058,599 $ 6 ,457,400

(1) FY2014 Net Position of Governmental and Business-Type Activities was restated in fiscal year 2015.

(2) FY2017 Net Position of Governmental and Business-Type Activities was restated in fiscal year 2018.

(3) FY2018 Net Position of Governmental and Business-Type Activities was restated in fiscal year 2019.

(4) FY2022 Net Position of Business-Type Activities was restated in fiscal year 2023.

174

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)

2020 2021 2022 2023 2024 $ 114,252,313 $ 116,220,059 $ 118,666,142 $ 122,128,900 $ 126,092,854 1 9,844,181 2 0,883,128 2 4,012,709 2 6,495,555 2 7,933,020 (48,809,467) (20,071,163) 1 1,879,310 3 6,459,068 4 8,797,358 8 5,287,027 1 17,032,024 1 54,558,161 1 85,083,523 2 02,823,232 8 6,939,502 8 8,635,207 9 3,562,741 9 9,118,189 1 11,940,928 2 ,037,318 6 ,322,353 5 ,310,698 5 ,350,538 4 ,147,493 1 6,587,060 1 9,018,596 2 8,956,179 3 0,307,701 3 0,325,458

1 05,563,880 1 13,976,156 (4) 1 27,829,618 1 34,776,428 1 46,413,879 2 01,191,815 2 04,855,266 2 12,228,883 2 21,247,089 2 38,033,782 2 1,881,499 2 7,205,481 2 9,323,407 3 1,846,093 3 2,080,513 (32,222,407) (1,052,567) 4 0,835,489 6 6,766,769 7 9,122,816 $ 190,850,907 $ 231,008,180 (4) $ 282,387,779 $ 319,859,951 $ 349,237,111 $ (32,222,407) $ (1,052,567) $ 4 0,835,489 $ 6 6,766,769 $ 7 9,122,816 5 5,846,036 5 6,855,185 5 3,155,458 4 8,229,215 4 3,910,684

$ 2 3,623,629 $ 5 5,802,618 $ 9 3,990,947 $ 114,995,984 $ 123,033,500 175

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 2015 2016 2017 2018 2019 Expenses Governmental Activities:

General Government $ 10,849,277 $ 13,936,312 $ 13,177,254 $ 17,511,975 $ 16,493,064 Public Safety 25,297,450 27,525,712 27,997,262 28,373,219 35,668,385 Public Works 14,363,603 19,522,534 20,753,117 18,101,635 19,118,090 Parks & Recreation (3) - - - - - Health & Social Services 6,631,598 7,333,528 7,424,371 7,149,348 7,669,431 Education & Library 67,091,679 62,374,873 60,922,185 64,082,500 64,438,616

Conservation of Natural Resources 587,147 1,799,234 616,237 2,567,600 2,696,971 Economic/Community Development 1,763,024 3,391,547 1,860,222 2,477,129 1,808,000 Interest and Fiscal Charges 4,039,622 4,345,527 4,150,101 4,294,929 4,712,864 Total Governmental Activities Expenses 130,623,400 140,229,267 136,900,749 144,558,335 152,605,421 Business-type Activities:

Water and Sewer 10,412,432 10,615,466 11,818,087 12,880,483 11,232,955 Golf Course 496,065 505,085 540,504 509,150 584,718 Public Landings and Marinas 537,823 529,943 572,360 559,597 1,342,308 Airport 1,014,491 966,896 1,053,899 1,100,136 1,434,031 Total Business-type Activities Expenses 12,460,811 12,617,390 13,984,850 15,049,366 14,594,012 Total Primary Government Expenses 143,084,211 152,846,657 150,885,599 159,607,701 167,199,433

Program Revenues Governmental Activities:

General Government Charges for Services 1,505,857 1,565,170 1,552,164 1,669,311 1,769,520 Operating Grants and Contributions 644,297 582,571 563,016 660,790 716,683 Capital Grants and Contributions 96,684 (30,000) - 1,080,084 480,500 Total Revenue 2,246,838 2,117,741 2,115,180 3,410,185 2,966,703 Public Safety Charges for Services 1,244,752 1,354,350 1,350,626 1,505,267 1,415,187 Operating Grants and Contributions 1,052,666 1,088,597 1,037,879 1,294,733 1,161,505

Capital Grants and Contributions 119,118 175,653 5,406 166,001 176,970 Total Revenue 2,416,536 2,618,600 2,393,911 2,966,001 2,753,662 Public Works Charges for Services 1,275,538 1,337,358 1,472,664 1,779,206 1,784,040 Operating Grants and Contributions 527,538 1,029,019 980,075 822,659 1,155,251 Capital Grants and Contributions 80,000 108,880 161,084 282,028 1,353,948 Total Revenue 1,883,076 2,475,257 2,613,823 2,883,893 4,293,239

Parks & Recreation (3) Charges for Services - - - - - Operating Grants and Contributions - - - - - Capital Grants and Contributions - - - - - Total Revenue - - - - - Health & Social Services Charges for Services 68,187 76,404 73,066 71,131 91,183 Operating Grants and Contributions 2,056,111 1,834,000 1,893,648 2,018,289 2,120,065 Capital Grants and Contributions 40,527 140,400 58,500 58,500 175,960

Total Revenue 2,164,825 2,050,804 2,025,214 2,147,920 2,387,208 Education & Library Charges for Services 1,249,332 1,230,994 1,319,433 1,272,301 1,318,609 Operating Grants and Contributions - - - - - Capital Grants and Contributions - - - - 43,059 Total Revenue 1,249,332 1,230,994 1,319,433 1,272,301 1,361,668 Conservation of Natural Resources Charges for Services 72,688 70,708 60,826 110,655 126,940

Operating Grants and Contributions 96,195 68,152 186,333 131,321 94,814 Capital Grants and Contributions 3,637 573,003 - 1,439,284 2,118,200 Total Revenue 172,520 711,863 247,159 1,681,260 2,339,954 Economic/Community Development Charges for Services 80,558 311,000 620,000 316,500 - Operating Grants and Contributions 285,344 156,804 231,360 810,319 205,300 Capital Grants and Contributions - - - - -

Total Revenue 365,902 467,804 851,360 1,126,819 205,300 Interest and Fiscal Charges Charges for Services - - - - - Operating Grants and Contributions - - - - - Capital Grants and Contributions - - - - - Total Revenue - - - - - Total Governmental Activities Program Revenues 10,499,029 11,673,063 11,566,080 15,488,379 16,307,734 176

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)

2020 2021 2022 2023 2024 $ 17,299,695 $ 21,447,303 $ 20,975,854 $ 21,070,854 $ 22,378,707 31,445,313 33,376,832 32,937,936 42,482,230 49,458,541 15,045,105 13,898,271 15,486,633 19,422,823 20,222,362 7,780,241 6,051,585 6,445,776 6,338,014 7,458,494 7,116,694 6,969,134 6,631,472 7,219,183 7,944,933 68,764,861 68,632,733 68,957,650 69,770,287 83,355,583 1,423,080 3,621,749 2,402,429 3,386,538 3,702,670

2,281,480 5,262,207 3,012,720 2,798,777 2,826,682 4,391,332 4,330,706 4,415,584 4,525,460 4,254,673 155,547,801 163,590,520 161,266,054 177,014,166 201,602,645 11,602,537 12,157,175 12,384,820 13,822,527 14,932,981 541,335 523,435 609,737 697,824 730,908 683,738 1,104,170 548,928 684,685 666,295 968,205 940,188 1,017,606 1,058,318 966,183 13,795,815 14,724,968 14,561,091 16,263,354 17,296,367 169,343,616 178,315,488 175,827,145 193,277,520 218,899,012

1,509,985 2,027,823 2,400,962 2,037,088 1,717,926 428,812 2,686,609 2,920,183 249,863 1,742,174 520,277 1,056,963 1,219,155 1,549,325 2,529,869 2,459,074 5,771,395 6,540,300 3,836,276 5,989,969 1,379,621 1,772,824 2,782,299 1,908,036 2,617,398 1,697,018 3,603,339 2,300,947 3,601,321 2,628,668 112,845 1,379,718 908,036 164,422 179,350 3,189,484 6,755,881 5,991,282 5,673,779 5,425,416 817,088 1,083,030 1,134,409 961,563 883,739

1,233,626 1,494,842 8,500 9,070 6,270 45,640 - - 1,119,611 2,836,186 2,096,354 2,577,872 1,142,909 2,090,244 3,726,195 822,605 1,058,579 1,149,578 1,101,729 1,151,020 37,060 216,861 32,494 25,681 14,453 2,237,549 343,301 1,964,345 640,892 924,299 3,097,214 1,618,741 3,146,417 1,768,302 2,089,772 72,840 37,025 91,756 77,736 62,176 2,273,959 2,381,707 2,595,327 3,060,269 2,591,053 362,900 157,905 207,862 195,509 588,792

2,709,699 2,576,637 2,894,945 3,333,514 3,242,021 1,593,200 3,383,580 2,438,720 2,237,364 2,291,783

- - - - -

105,575 973,747 1,850,863 979,756 - 1,698,775 4,357,327 4,289,583 3,217,120 2,291,783 136,458 163,971 46,491 76,138 19,262 117,820 111,443 - - - 831,901 1,612,662 1,095,760 2,007,786 2,474,706 1,086,179 1,888,076 1,142,251 2,083,924 2,493,968 205,000 864,667 397,823 620,000 - 757,258 3,978,848 1,523,758 1,286,414 1,066,447

- - - - -

962,258 4,843,515 1,921,581 1,906,414 1,066,447

- - 48,506 46,124 48,412

- - - - -

- - - - -

- - 48,506 46,124 48,412

17,299,037 30,389,444 27,117,774 23,955,697 26,373,983 177

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

(CONTINUED)

2015 2016 2017 2018 2019 Business-type Activities:

Water and Sewer Charges for Services $ 8,840,213 $ 8,956,360 $ 8,222,317 $ 9,214,383 $ 10,524,474 Operating Grants and Contributions 90,000 85,099 90,000 90,000 520,000 Capital Grants and Contributions 1,862,257 1,958,051 2,222,796 4,198,378 3,626,906 Total Revenue 10,792,470 10,999,510 10,535,113 13,502,761 14,671,380 Golf Course Charges for Services 295,955 305,528 318,599 340,123 373,014 Operating Grants and Contributions - - - - -

Capital Grants and Contributions - - - - - Total Revenue 295,955 305,528 318,599 340,123 373,014 Public Landings and Marinas Charges for Services 423,723 423,427 443,176 451,524 454,071 Operating Grants and Contributions 43,304 36,781 33,542 104,829 888,592 Capital Grants and Contributions - - - - - Total Revenue 467,027 460,208 476,718 556,353 1,342,663 Airport Charges for Services 53,200 45,916 33,256 25,857 24,710

Operating Grants and Contributions 73,311 52,837 245,738 60,858 725,109 Capital Grants and Contributions - - - - - Total Revenue 126,511 98,753 278,994 86,715 749,819 Total Business-type Activities Program Revenues 11,681,963 11,863,999 11,609,424 14,485,952 17,136,876 Total Primary Government Program Revenues 22,180,992 23,537,062 23,175,504 29,974,331 33,444,610 Net (Expense) Revenue (1) Governmental activities ( 120,124,371) ( 128,556,204) ( 125,334,669) ( 129,069,956) ( 136,297,687)

Business-type activities (778,848) (753,391) (2,375,426) (563,414) 2,542,864 Total Primary Government Net Expense $ ( 120,903,219) $ ( 129,309,595) $ ( 127,710,095) $ ( 129,633,370) $ ( 133,754,823) General Revenues and Other Changes in Net Position Governmental Activities:

Taxes (2) $ 116,821,607 $ 121,011,135 $ 123,299,031 $ 131,444,679 $ 137,285,550 Investment income 94,092 174,691 444,063 978,955 1,772,464 Gain/(Loss) on Sale of Capital Assets 1,098,632 161,106 53,936 87,734 25,823 Miscellaneous 1,076,893 949,046 2,065,465 630,895 979,201 Transfers In (Out) (360,177) (201,122) (335,499) (183,026) (1,341,011) Total Governmental Activities 118,731,047 122,094,856 125,526,996 132,959,237 138,722,027

Business-type Activities:

Investment income 323,585 320,443 361,840 439,716 550,691 Gain (Loss) on Sale of Capital Assets - - - - 33,100 Miscellaneous 815,430 746,167 809,211 865,879 865,732 Transfers In (Out) 360,177 201,122 335,499 183,026 1,341,011 Total Business-type Activities 1,499,192 1,267,732 1,506,550 1,488,621 2,790,534 Total Primary Government 120,230,239 123,362,588 127,033,546 134,447,858 141,512,561 Change in Net Position

Governmental activities (1,393,324) (6,461,348) 192,327 3,889,281 2,424,340 Business-type activities 720,344 514,341 (868,876) 925,207 5,333,398 Total Primary Government $ (672,980) $ ( 5,947,007) $ ( 676,549) $ 4,814,488 $ 7,757,738

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 FY15 through FY19, Parks & Recreation governmental activities are included in public works (parks) and social services (recreation).

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)

2020 2021 2022 2023 2024 $ 13,873,082 $ 12,174,150 $ 18,143,049 $ 12,330,275 $ 14,162,090 2,541,550 4,600,000 865,761 1,467,662 2,565,847 1,974,341 2,668,488 3,034,541 4,027,234 2,607,219 18,388,973 19,442,638 22,043,351 17,825,171 19,335,156 399,603 593,022 594,180 617,340 720,153

- - - - -

- - - - -

399,603 593,022 594,180 617,340 720,153 538,760 540,240 475,309 465,730 465,457 10,447 178,208 640,752 745,966 14,999

- - - - -

549,207 718,448 1,116,061 1,211,696 480,456 24,130 24,920 23,774 22,655 6,049 95,052 20,180 516,774 741,939 -

- - - - 5,028,713

119,182 45,100 540,548 764,594 5,034,762 19,456,965 20,799,208 24,294,140 20,418,801 25,570,527 36,756,002 51,188,652 51,411,914 44,374,498 51,944,510 ( 138,246,764) ( 133,201,076) ( 134,148,280) ( 153,058,469) ( 175,228,662) 5,661,150 6,074,240 9,733,049 4,155,447 8,274,160 $ ( 132,585,614) $ ( 127,126,836) $ ( 124,415,231) $ ( 148,903,022) $ ( 166,954,502) $ 148,876,477 $ 163,687,534 $ 171,755,675 $ 176,022,971 $ 182,200,656

1,393,017 239,908 462,588 6,448,944 9,192,673 44,343 95,687 (1,157,005) - - 900,976 1,073,180 1,801,868 1,628,246 2,059,293 (149,079) (150,236) (1,188,709) (516,330) (484,251) 151,065,734 164,946,073 171,674,417 183,583,831 192,968,371 589,126 424,983 414,822 1,047,564 1,732,675 17,876 573,500 5,265 2,561 (21,552) 907,830 1,189,317 2,511,617 1,224,908 1,167,917 149,079 150,236 1,188,709 516,330 484,251

1,663,911 2,338,036 4,120,413 2,791,363 3,363,291 152,729,645 167,284,109 175,794,830 186,375,194 196,331,662 12,818,970 31,744,997 37,526,137 30,525,362 17,739,709 7,325,061 8,412,276 13,853,462 6,946,810 11,637,451 $ 20,144,031 $ 40,157,273 $ 51,379,599 $ 37,472,172 $ 29,377,160 179

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

GENERAL TAX REVENUES - GOVERNMENTAL ACTIVITIES

LAST TEN FISCAL YEARS

Table 2-b 2015 2016 2017 2018 2019 Local Property Taxes $ 64,672,721 $ 65,185,546 $ 6 6,487,004 $ 6 7,736,404 $ 7 0,670,569 Local Income Tax 44,643,870 47,928,725 4 8,624,679 5 5,211,695 5 7,728,293 Other Local Taxes 7,505,016 7,896,864 8 ,187,348 8 ,496,580 8 ,886,688 Total Taxes - Governmental Activities $ 116,821,607 $ 121,011,135 $ 1 23,299,031 $ 1 31,444,679 $ 1 37,285,550 2020 2021 2022 2023 2024

Local Property Taxes $ 71,874,566 $ 74,474,109 $ 7 6,017,204 $ 7 8,022,772 $ 8 2,047,674 Local Income Tax 67,698,447 73,458,519 7 8,881,170 8 3,439,604 8 6,567,013 Other Local Taxes 9,303,464 15,754,906 1 5,164,554 1 3,208,003 1 2,025,782 Total Taxes - Governmental Activities $ 148,876,477 $ 163,687,534 $ 1 70,062,928 $ 1 74,670,379 $ 1 80,640,469

NOTES:

* Government-wide general tax revenue information is reported on the accrual basis of accounting.

* Source: Statement of Activities.

180

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

Table 3 2015 2016 2017 2018 2019 General Fund:

Nonspendable $ 6 87,777 $ 586,481 $ 7 54,921 $ 1,001,610 $ 1 ,616,447 Restricted 8 ,681,112 9,002,389 1 0,626,394 10,999,800 1 4,361,899 Committed 2 ,000,000 3,000,000 4 ,000,000 5,027,897 6 ,000,000 Assigned 2 ,034,875 1,926,782 1 ,998,415 1,483,827 1 ,224,503 Unassigned 7 ,793,085 8,468,591 8 ,830,530 11,142,331 1 1,856,474 Total General Fund 2 1,196,849 22,984,243 2 6,210,260 29,655,465 3 5,059,323

All Other Governmental Funds:

Nonspendable 5 ,919,048 6,146,072 7 ,552,462 7,583,553 - Restricted 1 7,794,372 21,316,088 8 ,900,465 6,815,341 1 2,598,139 Committed 4 ,209,177 3,425,701 1 3,447,283 15,202,215 1 8,514,079 Assigned 2 3,093,224 18,029,073 1 6,045,167 19,618,643 2 3,573,581 Unassigned (108,185) ( 115,129) (53,665) (48,758) (28,164) Total All Other Governmental Funds 5 0,907,636 48,801,805 4 5,891,712 49,170,994 5 4,657,635

Total All Governmental Funds $ 7 2,104,485 $ 71,786,048 $ 7 2,101,972 $ 78,826,459 $ 8 9,716,958 2020 2021 2022 2023 2024 General Fund:

Nonspendable $ 2 ,400,664 $ 5,751,694 $ 92,744 $ 242,876 $ 1 48,234 Restricted 1 4,711,547 16,182,014 1 7,838,136 19,996,347 2 1,377,816 Committed 6 ,998,256 7,621,618 8 ,399,587 9,069,982 9 ,450,311 Assigned 1 ,099,170 1,525,829 1 ,500,000 - - Unassigned 1 5,874,992 19,340,107 3 2,142,920 39,494,554 4 6,537,817 Total General Fund 4 1,084,629 50,421,262 5 9,973,387 68,803,759 7 7,514,178 All Other Governmental Funds:

Nonspendable - - 1 ,327,375 1,274,659 1 ,218,486 Restricted 1 5,121,784 17,919,423 2 2,270,920 17,607,427 1 2,551,494 Committed 2 1,296,829 25,457,920 2 7,010,544 28,987,607 3 1,668,367 Assigned 2 3,721,935 36,026,980 4 4,073,399 49,351,449 4 9,153,762 Unassigned (24,133) ( 19,649) - - - Total All Other Governmental Funds 6 0,116,415 79,384,674 9 4,682,238 97,221,142 9 4,592,109 Total All Governmental Funds $ 1 01,201,044 $ 129,805,936 $ 1 54,655,625 $ 166,024,901 $ 1 72,106,287

NOTES:

* Fund balance information for governmental funds is reported on the modified accrual basis of accounting.

* Source: Balance Sheet, Governmental Funds.

181

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

Table 4 2015 2016 2017 2018 2019 Revenues Taxes Local Property Taxes $ 64,672,292 $ 64,946,443 $ 66,501,901 $ 67,944,730 $ 70,615,293 Local Income Taxes 42,889,715 46,424,552 48,578,044 51,834,189 55,282,162 Other Local Taxes 7,505,016 7,896,865 8,187,348 8,496,580 8,886,688 State Shared Taxes 557,834 623,256 708,566 836,677 1,171,668 Licenses and Permits 1,062,917 1,078,144 1,123,072 1,167,444 1,224,381

Intergovernmental 4,030,576 4,696,561 3,987,308 7,539,052 8,284,699 Bond Interest Reimbursement - Build America Bond 375,323 364,799 350,254 334,858 319,362 Charges for Current Services 4,251,835 4,617,730 5,114,605 5,298,701 5,088,123 Fines and Forfeitures 182,160 250,110 211,102 258,226 192,975 Investment Income 94,092 174,691 444,063 978,955 1,772,464 Donations 4 1,391 4 5,773 6 0,217 5 7,635 3 1,084

Miscellaneous 1,076,893 949,045 2,065,465 630,895 979,201 Total Revenues 126,740,044 132,067,969 137,331,945 145,377,942 153,848,100 Expenditures Current General Government (1) 8,833,255 9,817,062 10,382,078 10,640,065 10,542,151 Public Safety 23,133,608 23,523,103 23,866,030 25,049,431 24,411,320 Public Works 12,041,969 15,080,454 15,506,684 15,235,104 16,163,026 Parks and Recreation - - - - - Health & Social Services 5,425,002 5,827,938 5,981,620 6,100,594 6,209,377

Education & Library 67,116,408 62,405,143 60,950,845 64,117,236 64,473,922 Conservation of Natural Resources 565,289 1,744,260 565,938 2,577,735 2,717,738 Economic/Community Development 1,616,784 3,188,928 1,710,899 2,433,171 1,638,265 Miscellaneous 3,535,585 4,766,722 4,185,652 5,348,568 5,729,955 Capital Outlay 8,733,509 11,050,384 14,591,632 12,311,551 9,323,882 Debt Service Principal 7,444,611 7,667,316 8,074,013 7,149,537 7,855,820

Debt Issuance Costs 403,572 218,799 196,150 229,894 211,447 Interest and Fiscal Charges 3,846,823 3,696,719 4,104,254 4,280,553 4,586,387 Total Expenditures 142,696,415 148,986,828 150,115,795 155,473,439 153,863,290 Excess (Deficiency) of Revenues over (under) Expenditures ( 15,956,371) ( 16,918,859) ( 12,783,850) ( 10,095,497) (15,190) Other Financing Sources (Uses) Issuance of Debt 25,384,493 15,484,639 12,775,926 16,000,000 11,000,000

Other Financing Use - Proceeds of Refunding Bonds - 8,042,773 - - - Bond Premiums 1,901,240 1,650,448 618,681 908,973 1,011,998 Payments to Bond Refunding Agent ( 14,881,834) - - - - Other Financing Use - Debt Service - Principal - ( 8,446,336) - - - Proceeds of Capital Asset Disposals 1,331,608 1 8,100 5 5,189 5 4,097 231,588 Insurance Proceeds 5 7,916 153,534 1 2,241 3 9,940 3 ,114 Leases - - - - -

Subscription-Based IT Arrangements - - - - - Transfers In 5,079,641 9,941,051 6,331,482 8,220,201 12,588,897 Transfers Out ( 6,449,845) ( 10,243,787) ( 6,693,745) ( 8,403,227) ( 13,929,908) Total Other Financing Sources (Uses) 12,423,219 16,600,422 13,099,774 16,819,984 10,905,689 Net Increase (Decrease) in Fund Balances $ ( 3,533,152) $ ( 318,437) $ 315,924 $ 6,724,487 $ 10,890,499 Debt service as a percentage of non-capital expenditures (2, 3) 8.43% 8.16% 8.99% 8.00% 8.61%

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.

182

QUEEN ANNE'S COUNTY, MARYLAND

FINANCIAL TRENDS

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

Table 4

(CONTINUED)

2020 2021 2022 2023 2024 $ 71,682,389 $ 74,769,217 $ 75,943,263 $ 78,062,336 $ 82,109,458 61,547,651 67,985,531 71,002,615 79,467,361 86,007,950 9,303,464 15,754,906 15,164,554 13,208,003 12,025,782 1,192,293 1,286,374 1,692,747 1,352,592 1,560,187 1,083,317 1,461,286 1,656,112 1,417,096 1,207,809 9,506,419 18,705,791 16,927,224 14,889,923 17,381,754

- - - - -

5,320,465 8,789,033 8,258,386 7,454,195 7,451,475 133,015 141,180 255,955 174,002 132,427 1,393,017 239,908 462,588 6,448,944 9,192,673 143,375 5 ,780 6 5,052 2 0,481 200,518 900,976 1,073,180 1,801,868 1,628,246 2,059,293 162,206,381 190,212,186 193,230,364 204,123,179 219,329,326 10,610,554 13,487,519 13,368,832 15,890,722 16,878,490 27,648,023 29,314,405 32,933,956 38,135,440 42,825,592 12,749,864 12,223,767 14,291,677 19,545,607 19,794,447

6,995,840 5,257,527 5,578,791 6,049,686 6,731,220 6,660,677 6,731,938 6,389,428 7,909,483 8,266,984 68,796,024 68,621,741 68,947,327 69,757,478 82,716,306 1,475,572 3,672,847 2,411,769 3,457,656 3,730,444 2,107,676 5,233,618 2,997,250 3,017,040 3,054,946 5,308,680 6,834,217 6,981,356 8,921,419 7,232,373 4,963,004 12,790,600 9,877,764 8,603,952 9,019,268 8,624,604 7,343,425 7,775,190 8,696,773 8,536,204

316,027 249,479 439,157 2 9,851 - 4,676,955 4,492,461 4,415,584 4,525,460 4,254,673 160,933,500 176,253,544 176,408,081 194,540,567 213,040,947 1,272,881 13,958,642 16,822,283 9,582,612 6,288,379 9,000,000 13,000,000 7,800,000 - - 14,682,184 10,835,995 - - - 3,654,843 3,814,696 492,106 - -

- - - - -

( 17,043,453) ( 12,970,537) - - - 30,949 4 1,099 6 3,850 6 1,520 8 9,074 35,761 102,429 3 5,208 103,030 150,184

- - - 638,500 -

- - - 1,503,069 3 8,000

9,690,474 20,469,607 23,952,703 27,982,455 26,534,774 ( 9,839,553) ( 20,647,039) ( 24,316,461) ( 28,501,910) ( 27,019,025) 10,211,205 14,646,250 8,027,406 1,786,664 ( 206,993) $ 11,484,086 $ 28,604,892 $ 24,849,689 $ 11,369,276 $ 6,081,386 8.53% 7.26% 7.38% 7.26% 6.33% 183

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 2015 $ 1,526,533,795 $ 5,971,094,589 $ 7 ,497,628,384 $ 0 .8471 $ 71,076,850 $ 7,568,705,234 $ 7 08,231,797 $ 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 7 13,843,531 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 7 71,576,578 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 7 84,345,727 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 8 10,049,666 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 8 39,013,301 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 8 60,398,332 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 8 79,391,068 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 8 87,420,959 1 0,222,972,246

2024 1,946,403,718 7,735,421,703 9 ,681,825,421 0 .8300 159,917,460 9,841,742,881 9 20,628,412 1 0,762,371,293

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.

184 185

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) 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 2024 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.

186

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 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 .0600 2024 0 .0600

NOTES:

* Tax rates are per $100 of assessed value.

* The personal property tax rate for Queen Anne's County is zero.

187

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 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 2024 0.5350 0.2000 0 .3400 0.3000 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.

188

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 $ 0.1895 $ 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 0.2312 0.1670 0 .3600 189

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, 2024 Ratio:

Taxpayer Base to Total Assessable Base Assessable Base Second Horizon Group Limited Partnership $ 35,819,200 0.36 % KRM - Chesapeake LLC 22,596,900 0.23 Schuls Development LLC 17,909,300 0.18 Kent Towne Market LLC 16,303,800 0.17 Maryland General Land Co LLC 16,150,300 0.16 Great American Life Insurance Co 15,082,100 0.15 Beach Harbor Campers Cooperative Inc 14,498,667 0.15 Anne Arundel Real Estate Holding Co 13,562,700 0.14

Knight Farms LLC 12,229,233 0.12 Mears Point Association 11,000,233 0.11 Total $ 175,152,433 1.78 % Total Assessable Base $ 9,841,742,881 100.00 % For the Fiscal Year Ended June 30, 2015 Ratio:

Taxpayer Base to Total Assessable Base Assessable Base Second Horizon Group Limited Partnership $ 61,326,866 0.81 % KRM Development Corporation 35,787,167 0.47 Maryland General Land Co LLC 20,569,800 0.27 Great American Life Insurance Company 15,721,000 0.21 Aspen Institute for Humanistic Studies 15,253,267 0.20 Beach Harbor Campers Cooperative Inc 12,582,700 0.17 K Hovnanian at Kent Island LLC 11,500,000 0.15

Anne Arundel Real Estate Holding Co 10,166,300 0.13 Mears Point Association 9,992,833 0.13 Shore Health System Inc 9,975,900 0.13 Total $ 202,875,833 2.67 % Total Assessable Base $ 7,568,705,234 1 00.00 % Source: State of Maryland Department of Assessments and Taxation 190

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 2015 $ 63,338,629 $ 6 3,231,601 99.83% $ 107,028 $ 63,338,629 100.00% 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% 109,107 6 8,887,496 100.00% 2020 70,825,936 7 0,375,695 99.36% 446,467 7 0,822,162 99.99% 2021 72,635,124 7 2,627,467 99.99% 3,793 7 2,631,260 99.99% 2022 74,882,965 7 4,789,167 99.87% 80,491 7 4,869,658 99.98% 2023 77,663,358 7 7,608,873 99.93% 38,457 7 7,647,330 99.98% 2024 80,137,298 8 0,060,018 99.90% - 8 0,060,018 99.90%

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.

191

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 2015 $ 112,060,053 $ 784,785 $ - $ - $ 112,844,838 2016 118,977,909 1,913,199 - - 120,891,108 2017 123,519,157 1,698,425 - - 125,217,582 2018 132,567,304 1,417,461 - - 133,984,765 2019 135,985,079 1,098,323 - - 137,083,402 2020 136,513,411 775,589 - - 137,289,000

2021 142,970,963 703,773 - - 143,674,736 2022 142,140,969 655,957 - - 142,796,926 2023 132,251,652 608,141 6 14,668 1,178,880 134,653,341 2024 122,661,132 560,325 5 52,354 905,835 124,679,646 Business-type Activities General Subscription-Based Total Total Fiscal Obligation Notes Information Technology Business-type Primary Year Bonds Payable Leases Arrangements Activities Government 2015 $ 3,540,295 $ 11,388,918 $ - $ - $ 14,929,213 $ 127,774,051

2016 3,520,859 10,471,639 - - 13,992,498 134,883,606 2017 3,217,479 16,296,744 - - 19,514,223 144,731,805 2018 2,976,195 25,484,821 - - 28,461,016 162,445,781 2019 2,725,011 29,419,756 - - 32,144,767 169,228,169 2020 2,475,881 31,932,369 - - 34,408,250 171,697,250 2021 2,337,041 34,432,935 - - 36,769,976 180,444,712 2022 2,362,308 33,291,256 3 9,225 - 35,692,789 178,489,715 2023 2,206,362 35,322,576 1 44,381 - 37,673,319 172,326,660

2024 2,011,526 34,997,932 1 10,714 - 37,120,172 161,799,818 Ratios Debt to Total Outstanding Fiscal Personal Debt per Year Income (1) Capita (1) 2015 6.89% $ 2,618 2016 7.24% 2,780 2017 7.64% 2,960 2018 8.39% 3,322 2019 8.22% 3,335 2020 7.29% 3,264 2021 7.73% 3,458 2022 6.96% 3,421 2023 6.33% 3,332 2024 5.85% 3,081

NOTES:

(1) See Table 14 for personal income and population data, which are used in calculating these ratios.

192

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) 2015 $ 1 15,600,348 1.53% $ 2,369 2016 1 22,498,768 1.61% 2,525 2017 1 26,736,636 1.63% 2,592 2018 1 35,543,499 1.70% 2,772 2019 1 38,710,090 1.68% 2,733 2020 1 38,989,292 1.64% 2,643 2021 1 45,308,004 1.67% 2,785 2022 1 44,503,277 1.62% 2,769 2023 1 34,458,014 1.44% 2,600 2024 1 24,672,658 1.27% 2,374

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.

193

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF NET DIRECT AND OVERLAPPING DEBT

AS OF JUNE 30, 2024

Table 11 Name of Jurisdiction Gross Debt Queen Anne's County:

County Government Total Net Direct Debt (1) $ 1 24,679,646 Towns: (2) Centreville (100%) 10,531,000 Queenstown (100%) 4 ,776,415 Sudlersville (100%) 4 ,491,262 Millington (100%) 1 ,000,000 Total Net Overlapping Debt 2 0,798,677 Total Net Direct and Overlapping Debt $ 1 45,478,323

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.

194 195

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LEGAL DEBT MARGIN

LAST TEN FISCAL YEARS

Table 12-a 2015 2016 2017 2018 2019 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) 3 ,540,295 3 ,520,859 3 ,217,479 2 ,976,195 2 ,725,011 General Obligation Debt (4) 112,060,053 118,977,909 123,519,157 132,567,304 135,985,079 Subtotal 115,600,348 122,498,768 126,736,636 135,543,499 138,710,090

Total authorized debt under Title 5 and specific public laws 123,600,348 130,498,768 134,736,636 143,543,499 146,710,090 LESS Outstanding bonds, notes payable, and capital leases (5) 14,929,213 134,883,606 144,731,805 162,445,781 169,228,169 Less: Sanitary District debt (4) 11,388,918 10,471,639 16,296,744 25,484,821 29,419,756 Subtotal 3 ,540,295 124,411,967 128,435,061 136,960,960 139,808,413 Legal Debt Margin - Other than the Sanitary District $ 120,060,053 $ 6,086,801 $ 6,301,575 $ 6,582,539 $ 6,901,677

Debt related to the Sanitary District Proprietary Fund:

Total taxable assessed value (3) $ 7,568,705,234 $ 7,626,510,532 $ 7,792,264,218 $ 7,974,395,138 $ 8,264,514,461 Plus exempt property (3) 708,231,797 713,843,531 771,576,578 784,345,727 810,049,666 Total assessed value $ 8,276,937,031 $ 8,340,354,063 $ 8,563,840,796 $ 8,758,740,865 $ 9,074,564,127 Debt Limit - 6% of total assessed value (2) $ 496,616,222 $ 500,421,244 $ 513,830,448 $ 525,524,452 $ 544,473,848

LESS Sanitary District 11,388,918 10,471,639 16,296,744 25,484,821 29,419,756 Less: Restricted Cash and Investments in the Debt Service Fund available for payment of principal 2 ,695,383 1 ,120,775 9 47,445 1 ,060,045 1 ,259,440 8 ,693,535 9 ,350,864 15,349,299 24,424,776 28,160,316 Legal Debt Margin - Sanitary District $ 487,922,687 $ 491,070,380 $ 498,481,149 $ 501,099,676 $ 516,313,532

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.

196

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LEGAL DEBT MARGIN

LAST TEN FISCAL YEARS

Table 12-a

(CONTINUED)

2020 2021 2022 2023 2024 $ 8,000,000 $ 8,000,000 $ 8,000,000 $ 8,000,000 $ 8,000,000 2 ,475,881 2,337,041 2,362,308 2,206,362 2,011,526 136,513,411 142,970,963 142,140,969 132,251,652 122,661,132 138,989,292 145,308,004 144,503,277 134,458,014 124,672,658 146,989,292 153,308,004 152,503,277 142,458,014 132,672,658 171,697,250 180,444,712 35,692,789 38,852,199 38,026,007 31,932,369 34,432,935 33,291,256 35,322,576 34,997,932

139,764,881 146,011,777 2,401,533 3,529,623 3,028,075 $ 7,224,411 $ 7,296,227 $ 150,101,744 $ 138,928,391 $ 129,644,583 $ 8,486,858,638 $ 8,714,892,522 $ 8,921,620,470 $ 9,335,551,287 $ 9,841,742,881 839,013,301 860,398,332 879,391,068 887,420,959 920,628,412 $ 9,325,871,939 $ 9,575,290,854 $ 9,801,011,538 $ 1 0,222,972,246 $ 1 0,762,371,293 $ 559,552,316 $ 574,517,451 $ 588,060,692 $ 613,378,335 $ 645,742,278

31,932,369 34,432,935 33,291,256 35,322,576 34,997,932 2 ,031,867 2,684,988 1,913,102 1,703,815 2,170,557 29,900,502 31,747,947 31,378,154 33,618,761 32,827,375 $ 529,651,814 $ 542,769,504 $ 556,682,538 $ 579,759,574 $ 612,914,903 197

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LOCAL DEBT LIMIT

LAST TEN FISCAL YEARS

Table 12-b 2015 2016 2017 2018 2019 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) $ 7,568,705,234 $ 7,626,510,532 $ 7,792,264,218 $ 7 ,974,395,138 $ 8 ,264,514,461 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% of Total Taxable Assessed Base $ 189,217,631 $ 190,662,763 $ 194,806,605 $ 1 99,359,878 $ 2 06,612,862 LESS Outstanding and New General Obligation Debt applicable to limit (2) (3) Enterprise Funds' Debt - Bonds $ 3 ,540,295 $ 3,520,859 $ 3,217,479 $ 2 ,976,195 $ 2 ,725,011

General Obligation Debt - Bonds and Notes 1 12,844,838 120,891,108 125,217,582 1 33,984,765 1 37,083,402 Total Outstanding and New General Obligation Debt $ 116,385,133 $ 124,411,967 $ 128,435,061 $ 1 36,960,960 $ 1 39,808,413 2.5% of Total Taxable Assessed Base in Excess of Total Outstanding and New General Obligation Debt $ 7 2,832,498 $ 66,250,796 $ 66,371,544 $ 6 2,398,918 $ 6 6,804,449

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) 48,804 48,517 48,904 48,904 50,750 $3,000 Per Capita $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 146,412,000 $ 145,551,000 $ 146,712,000 $ 1 46,712,000 $ 1 52,250,000 LESS Outstanding and New General Obligation Debt (1) $ 116,385,133 $ 124,411,967 $ 128,435,061 $ 1 36,960,960 $ 1 39,808,413 $3,000 Per Capita in Excess of Total Outstanding and New General Obligation Debt $ 3 0,026,867 $ 21,139,033 $ 18,276,939 $ 9 ,751,040 $ 1 2,441,587

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.

198

QUEEN ANNE'S COUNTY, MARYLAND

DEBT CAPACITY

COMPUTATION OF LOCAL DEBT LIMIT

LAST TEN FISCAL YEARS

Table 12-b

(CONTINUED)

2020 2021 2022 2023 2024 $ 8 ,486,858,638 $ 8 ,714,892,522 $ 8 ,921,620,470 $ 9 ,335,551,287 $ 9 ,841,742,881 2.5% 2.5% 2.5% 2.5% 2.5% $ 2 12,171,466 $ 2 17,872,313 $ 2 23,040,512 $ 2 33,388,782 $ 2 46,043,572 $ 2,475,881 $ 2,337,041 $ 2,362,308 $ 2,206,362 $ 2,011,526 1 37,289,000 1 43,674,736 1 42,796,926 1 32,859,793 1 23,221,457 $ 1 39,764,881 $ 1 46,011,777 $ 1 45,159,234 $ 1 35,066,155 $ 1 25,232,983

$ 7 2,406,585 $ 7 1,860,536 $ 77,881,278 $ 98,322,627 $ 1 20,810,589 52,597 52,177 52,177 51,711 52,508 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 1 57,791,000 $ 1 56,531,000 $ 1 56,531,000 $ 1 55,133,000 $ 1 57,524,000 $ 1 39,764,881 $ 1 46,011,777 $ 1 45,159,234 $ 1 35,066,155 $ 1 25,232,983 $ 1 8,026,119 $ 1 0,519,223 $ 11,371,766 $ 20,066,845 $ 32,291,017 199

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, 2024 Percentage of Total County Employer Employees Rank Employment Queen Anne's County Board of Education 1,096 1 6.96% Queen Anne's County Government 675 2 4.29% Paul Reed Smith Guitars 468 3 2.97% Chesapeake College 385 4 2.45% REEB Millwork 303 5 1.92% S.E.W. Friel 260 6 1.65% Food Lion 203 7 1.29% The Chesapeake Bay Beach Club 150 8 0.95% Harris Seafood Company 125 9 0.79%

Federal Resources Supply 120 10 0.76% Total 3,785 24.03% For the Fiscal Year Ended June 30, 2015 Percentage of Total County Employer Employees Rank Employment Queen Anne's County Board of Education 944 1 8.81% Chesapeake College 510 2 4.76% Queen Anne's County Government 449 3 4.19% S.E.W. Friel 275 4 2.57% Paul Reed Smith Guitars 249 5 2.32% Reeb Millwork 180 6 1.68% Cracker Barrel Old Country Store 170 7 1.59%

Power Electronics 162 8 1.51% Fisherman's Inn 135 9 1.26% Genesis HealthCare/Corsica Hall Center 134 10 1.25% Total 3,208 29.94% Source: Queen Anne's County Economic Development Office; Table 15.

200

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) 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 2024 52,508 2,764,651,216 5 2,652 2.80% 7 ,492

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.

201

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

COUNTY GOVERNMENT EMPLOYEES - FULL-TIME EQUIVALENTS

LAST TEN FISCAL YEARS

Table 15 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Number of Exempt Employees 30 32 35 34 32 33 37 40 40 46 Number of Full Time Employees 416 431 439 450 479 484 496 462 533 627 Number of Part Time Employees (FTE) 3 3 4 3 3 2 2 2 2 2 Total County Government Employees 449 466 478 487 514 519 535 504 575 675

NOTES:

Source: Queen Anne's County Office of Budget and Finance 202

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

COUNTY GOVERNMENT EMPLOYEES - FULL-TIME ONLY BY FUNCTION

LAST TEN FISCAL YEARS

Table 16 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Governmental Activities:

General Government 81 83 87 76 75 78 79 83 92 97 Public Safety:

Police 58 59 61 62 69 71 70 65 72 93 Fire - Emergency Management Services 71 72 73 75 82 83 83 84 101 118 Detention Center 41 41 45 41 42 43 45 42 46 54 Animal Services 3 2 2 2 2 2 13 7 13 16 Public Works 58 61 59 75 80 77 75 68 77 93 Health 1 1 1 1 1 1 1 1 1 1 Social Services 38 42 41 39 39 39 41 41 40 45 Parks 39 42 44 43 46 52 51 43 53 60 Conservation of Natural Resources 3 4 4 4 4 4 4 3 3 4 Economic/Community Development 3 6 5 10 11 9 10 10 12 17

Total Governmental Activities 396 413 422 428 451 459 472 447 510 598 Business-Type Activities:

Sanitary District 46 46 48 51 55 53 56 50 60 72 Bay Bridge Airport 1 1 1 2 2 2 2 2 2 2 Golf 1 1 1 1 1 1 1 1 1 1 Public Landings 2 2 2 2 2 2 2 2 2 2 Total Business-Type Activities 50 50 52 56 60 58 61 55 65 77 Total Full-Time County Employees 446 463 474 484 511 517 533 502 575 675

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 203

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

OPERATING INDICATORS BY FUNCTION

LAST TEN FISCAL YEARS

Table 17 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Governmental Activities:

General Government:

Planning & Zoning:

Number of commercial permits issued 52 50 47 55 30 49 91 63 83 48 Number of residential permits issued:

Single Family Permits 123 84 124 145 155 173 275 136 271 284 Multi Family Permits - 1 29 - 37 41 62 32 2 56 Renovations and Additions Permits 270 303 323 339 359 317 343 203 357 303 Total residential permits issued 393 388 476 484 551 531 680 371 630 643 Public Safety:

Fire and Rescue:

Number of volunteer members 683 500 400 500 450 542 558 550 703 757 Police:

Uniformed Police Officers 64 64 64 68 69 71 71 73 77 84 Number of law violations:

Physical arrests 1,055 903 914 1,097 930 854 1,080 812 859 1,240 Traffic violations 6,030 8,002 7,183 12,384 10,474 9,705 11,142 7,447 9,859 13,111 Detention Center:

Detention Center Officers 41 39 38 42 41 41 42 41 43 43 Average yearly prison population 123 115 133 115 105 106 158 154 108 99 Public Works:

Wastewater Treated - Daily (mgd) 2.1 2.0 2.0 2.2 2.2 2.1 2.3 2.7 2.6 2.6 Education:

Number of Personnel Teachers 575 575 572 569 572 584 603 609 615 615 Administrators 40 40 38 37 37 37 36 38 43 49 Support 295 296 304 300 301 281 336 364 348 349 Other 34 34 34 34 32 7 7 7 5 83 Number of Students 7,752 7,738 7,799 7,768 7,767 7,705 7,351 7,418 7,539 7,492 Number of High School Graduates 589 532 550 552 521 590 561 535 534 568

NOTES:

Source: Various County departments.

204

QUEEN ANNE'S COUNTY, MARYLAND

OPERATING INFORMATION

CAPITAL ASSET STATISTICS BY FUNCTION

LAST TEN FISCAL YEARS

Table 18 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Governmental Activities:

Public Safety:

Fire and Rescue:

Number of volunteer stations 9 9 9 9 9 9 9 9 9 9 Equipment:

Engines 16 16 16 16 15 15 15 15 14 15 Tankers 8 8 8 8 7 9 9 9 9 9 Aerial Units 4 5 5 4 5 5 5 5 5 5 Rescue Units 7 6 6 5 5 7 7 7 7 7 Brush Units 7 7 7 7 7 8 8 8 8 8 Boats 6 6 6 3 4 4 4 4 4 4 Ambulance/Medic Units 14 12 13 13 11 13 12 13 11 11 Cars/Other 25 25 16 14 28 33 33 33 30 34 Police:

Number of Stations 1 1 1 1 1 1 1 1 1 1 Number of Vehicles Patrol 68 71 70 70 71 81 66 43 60 74 Other 15 10 9 14 14 12 29 67 30 33 Detention Center Capacity 148 148 148 148 148 148 148 148 148 148 Public Works:

County Maintained Roads and Streets Paved (miles) 543 540 549 549 549 550 550 549 549 549 Unpaved (miles) 12 12 12 12 12 12 12 12 12 12 County Owned Water and Wastewater Facilities Water Miles of Mains 62 64 65 67 68 69 70 71 71 72 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 122 128 136 151 153 154 160 162 162 162 Wastewater Treatment Plants 1 1 1 1 1 1 1 1 1 1

Wastewater Collection, Lift, and Pumping Stations 31 31 32 32 32 32 32 32 32 33 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 32 32 32 32 32 32 32 32 32 Park Acreage 2,915 2,915 2,915 3,085 3,085 3,085 3,085 3,085 3,085 3,089 Public Landings 20 19 20 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.

205