FY2021 Adopted Budget

FY2021 Adopted Budget Budget and Finance Policy Debt Policy

The debt policy sets forth comprehensive guidelines for the financing of capital expenditures. The policy provides parameters for issuing debt and managing outstanding debt. The policy provides guidance to decision makers regarding the timing and purpose for which debt may be issued, what types and amounts of debt are permissible, the method of sale that may be used and the debt structuring practices that may be used. The County recognizes that adherence to a debt policy helps ensure that it maintains a sound debt position and that credit quality is protected. Debt Affordability Policy In order to establish a safe level of debt the County commissioned a study which facilitated the establishment of a Debt Affordability limit and was recently reviewed and updated in 2017 by an outside financial consultant. This limit assists in the establishment of sound fiscal management policies for the County, and helps to ensure the PDLQWHQDQFH RU SRVVLEOH LPSURYHPHQW RI WKH &RXQW\¶V FUHGLW UDWLQJ 7KH &RXQW\¶V ERQG rating has been reviewed by 6WDQGDUG DQG 3RRU¶V )LWFK DQG 0RRG\¶V ,QYHVWRUV 6HUYLFH ,QF ZKLFK UHVXOWHG LQ VXVWDLQLQJ $$$ $$$ $DD UDWLQJV respectively. The Debt Affordability Limits Study recommended the use of Debt Affordability standards, and the following standards are being used: - General Fund G.O. debt service, as a percentage of General Fund revenue, should be limited to 9.0% Capital Improvement Program Policy The Capital Improvement Program (CIP) is a schedule of public improvement projects planned by County Government to occur over a six-year period and includes project descriptions, estimated costs, and sources of funding. The Capital Budget is the first year of the CIP and includes those projects for which funds have been appropriated. A capital project in the CIP shall establish certain characteristics including value, useful life and overall contribution to the County infrastructure. The project will have an estimated individual cost totaling $100,000 or more. Eligible capital costs will include Land Acquisition, Site Improvements, Planning, Design, Construction, Inspection/Overhead, Technology Equipment/Infrastructure, Capital and Non-Capital Equipment/Vehicles (related to start-up costs or comprehensive replacement plan), and Project Management. These costs will be listed in current dollars and updated annually. A Capital Improvements Program Committee shall be established and managed by the Budget Office. They will evaluate the merits of each requested project and recommend to the County Executive what should be included in the County Executive Proposed Budget. The County will attempt to budget pay-go funding for capital improvements at an amount equal to 7% of General Fund operating revenues. All pay-go sources will be considered in total in reaching this goal except for direct third party donations or grants. Other capital funding will be obtained by general obligation bonds/leases, state and federal JUDQWV HQWHUSULVH IXQG UHVRXUFHV DQG RWKHU VRXUFHV 7KH %XGJHW 2IILFH ZLOO DQQXDOO\ UHYLHZ WKH &RXQW\¶V GHEW DIIRUGDELOLW\ VWDQGDUGV XSGDWH WKH VWXG\ DQG FRPSDUH WR WKH &RXQW\¶V SHHU JURXS $OO FDSLWDO SURMHFWV will be reviewed and approved in accordance with Annotated Code of Maryland Land Use Article § 3-205 regarding consistency with the County Comprehensive Plan. 7KH 3ODQQLQJ &RPPLVVLRQ ZLOO YRWH RQ WKH FRQVLVWHQF\ EDVHG RQ WKH &RXQW\ ([HFXWLYH¶V proposed budget. - General Fund debt, as a percent of assessed valuation, should be limited to 2.0% - General Fund debt, as a percent of General Fund Revenue, should be limited to 80.0% - Total G.O. debt service, as a percent of General Fund Revenue, should be limited to 17.2%

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