Part I: The Operating Budget for Charles County Maryland
Strayer University
PAD 505
October 29, 2015
Introduction
Charles County was created by an Order in Council in 1658. The County was named for the 3rd Lord Baltimore, Charles Calvert (1637-1715) who lived in Maryland from 1661 to 1684 before returning to England. Charles Calvert was Proprietor of the Maryland colony from 1675 to 1689, until he lost his right to govern. Maryland was governed as a royal colony, from 1692 until Calvert's death in 1715. Charles County is located in Southern Maryland, along the banks of the Potomac River, just south of Washington D.C. Charles County in bounded south & west by Potomac; east by St. Mary's County; north by Prince George's County. According to the U.S. Census Bureau, the county has a total area of 643 square miles and estimated population of 154,747 and an estimated population growth thru 2030 of 204,200. There are several divisions within Charles County such as Fiscal and Administrative Services, Public Works, Community Services, Planning and Growth Management, Health Services, Social Services, Economic Development, Conservation of Natural Resources, and Financing Uses. The mission of Charles County Government is to provide its citizens the highest quality service possible in a timely, efficient and courteous manner. To achieve this goal, its government must be operated in an open and accessible atmosphere, be based on comprehensive long- and short-term planning and have an appropriate managerial organization tempered by fiscal responsibility. They support and encourage efforts to grow a diverse workplace. (Charles County Maryland, 2015) The vision of Charles County is to be a place where all people thrive and businesses grow and prosper; where the preservation of its heritage and environment is paramount; where government services to its citizens are provided at the highest level of excellence; and where the quality of life is the best in the nation. (Charles County Maryland, 2015)
Budget Overview The Charles County budget consists of two types of funds governmental and proprietary. Governmental Funds consists of general, capital project, debt service and special revenue funds. Proprietary Funds consist of enterprise funds. The General Fund accounts for resources traditionally associated with government services which are not required legally or by special financial management to be accounted for in another fund. The Capital Project Fund accounts for financial resources to be used for the acquisition, construction, or renovation of major capital infrastructures. The Debt Service Fund accounts for the annual payment of long-term debt which has a specific or legally binding revenue source. Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures or for particular purposes. Enterprise Funds are established to segregate a program or service from the General Fund because of its self-supporting nature. (Charles County Maryland FY16 Budget Book, 2015) The FY 2016 proposed budget for Charles County is $555,726,994. This is an increase of 1.6% compared to FY 2015 budget. General funds would increase by 3.2% to total $365,682,800, Capital Project fund would increase by 2.4% to $84,203,500, but Special Revenue funds would decrease 14.8% totaling $42,597,994. Projected Revenue for FY 2016 totals $365,682,800 and consists of the following: Property Taxes $205,278,400 (56.1%), Income Taxes $111,931,000 (30.6%), Other Financing
Sources/Fund Balance $14,897,600 (4.1%), Recordation Taxes $11,300,000 (3.1%), Other Revenues $7,624,800 (2.1%), Service Charges, Licenses, & Permits $7,270,600 (2.0%), Transfer Taxes $4,683,200 (1.3%), and Other Taxes $2,697,200 (0.7%). Projected Expenditures for FY 2016 totals $365,682,800 and consists of the following:
Board of Education $166,121,100 (45.4%), Sheriff's Office $79,926,900 (21.9%), County Government $55,250,500 (15.1%), Debt Service $23,871,100 (6.5%), Miscellaneous $14,631,500 (4.0%), Other Education $13,727,500 (3.8%), Other Agencies $12,154,200 (3.3%). The FY 2016 General Fund Operating Budget by division consists of the following: Fiscal and Administrative Services $5,985,000, Public Works $19,081,400, Community Services $7,410,500, Planning and Growth Management $2,799,200, Health Services $2,947,400, Social Services $331,000, Economic Development $1,672,100, Conservation of Natural Resources $655,800 and Financing Uses $9,176,000. The focus for the Charles County capital project budget is on the Comprehensive Water and Sewer Plan and the Capital Investment in Education. The Comprehensive Water and Sewer Plan is a multi-year project is to provide ample supply of safe drinking water that may be collected, treated and delivered to points of use and to provide for the proper collection and delivery of wastewater for treatment disposal or reuse. The Capital Investment in Education supports a request from the Board of Education’s priority to renovate older schools, add full-day kindergartens, and maintain existing schools as well as other renovation projects. Charles County uses the following guidelines when issuing debt: Long-term borrowing will not be used to finance current operations or normal maintenance; All debt issued, including lease purchases, will be repaid within a period not to exceed the useful life of the asset or the improvement financed by the debt; The County will maintain its General Fund debt service payments at a level not to exceed eight percent of the General Fund operating revenues; In an effort to provide critical capital projects, while simultaneously keeping debt issuances to a minimum, the County will monitor the fund balance of the General Fund for the purpose of utilizing any excess for pay-as-you-go funding for the Capital Improvement Program (CIP); The County will seek to maintain and, if possible, improve our current bond rating in order to minimize borrowing costs and preserve access to credit; General Obligation debt issuance will be managed on an annual basis to match funds to the CIP cash flow requirements; the County will analyze market conditions prior to debt issuance to determine the most advantageous average life; and the County will attempt to repay debt using a level principal repayment structure. (Charles County Maryland FY16 Budget Book, 2015)
Cost Analysis Charles County cost consist of education, county government, sheriff’s office, other agencies, debt service, governmental and enterprise projects all of which are variable costs.
Budget Challenges The most common challenges in any budget is not knowing the unknown. Another challenges is budget balancing difficulties when expenses outweigh revenue. One of the budget challenges Charles County faces while building the 2016 budget was how to fund the 7.1% budget increase that is being requested by the school system due to state funding limitations. With building new schools and adding full day Kindergarten as part of the capital projects for Charles County it is imperative that they anticipate the future costs associated with sustaining these projects.
Budget Recommendations The recommendations that I would make is to review all the programs funded by Charles County and evaluate them to see if some need to be cut or revamped to provide cost savings. Also they can review all the programs that provide revenue to Charles County and evaluate them to see how the county can perhaps generate additional revenue, and cut programs or revamp to ensure the County is maximizing its benefits from the programs. In addition, each year they should go out and look for additional grants and financing that the county may qualify for.

References

Budget In Brief. (2015, July 31). Retrieved October 30, 2015, from http://www.charlescountymd.gov/sites/default/files/fas/budget/budgetbooks/2016/FY16_budget_book.pdf
Capital Improvement Program. (2015, June 19). Retrieved October 30, 2015, from https://www.charlescountymd.gov/sites/default/files/fas/budget/fy2016/FY16 Approved CIP Summary.pdf
Charles Budget Debate Hinging on School Funding. (2015, May 21). Retrieved October 30, 2015, from http://conduitstreet.mdcounties.org/2015/05/21/charles-budget-debate-hinging-on-school-funding/
Charles County Maryland. (n.d.). Retrieved October 30, 2015, from http://www.charlescountymd.gov/
Charles County QuickFacts from the US Census Bureau. (2015, October 14). Retrieved October 30, 2015, from http://quickfacts.census.gov/qfd/states/24/24017.html
FY 2015/2016 Capital. (2015, August 31). Retrieved October 30, 2015, from https://www.charlescountymd.gov/sites/default/files/fas/budget/fy2016/1Quarterly Monitoring Report.pdf
Maryland.gov. (n.d.). Retrieved October 30, 2015, from http://www.maryland.gov/Pages/default.aspx