SALISBURY – Wicomico County’s annual audit this year revealed fund balances increased and expenditures were less than predicted.
Wicomico County’s auditor, Pigg, Krahl and Stern (PKS), presented the County Council last week with the annual audit, including an analysis of the county’s financial performance for Fiscal Year (FY) 2012, ending on June 30, 2012.
The document begins by listing financial highlights, such as the county’s government-wide operations showing an increase in net assets of about $14.5 million, the total general fund balance position improved by $8.1 million, the general fund FY12 actual expenses were $3.2 million less than budgeted, and the general fund revenues for FY12 decreased by $275,000 over FY11.
According to PKS, there are two notable changes between FY12 and FY11. Real property tax revenue declined by $2.2 million as a result of the FY12 real property tax levy being set below the constant yield with a simultaneous decline in the value of the assessable base, and local income tax revenue increased by nearly $2.7 million primarily due to significant improvement in total number of county residents who were employed during tax year 2011.
Also, general fund actual expenses decreased by $3.7 million compared to FY 11. Notable causes are listed in the document, one of them being the Board of Education’s appropriation was reduced by $7 million in FY 12, as it was in FY 11, to align the County’s overall operating costs more closely with its expected future revenues.
PKS stated that the county’s total net assets, government plus business-type activities, increased by $14.7 million from FY11, and that the increase is primarily the result of reduced operating expenses.
Government activities include the county’s basic services, such as public safety, recreation and general administration that are financed by property taxes, other taxes, fees and some grants. PKS reported governmental activities showed total net assets of $51.6 million, with an unrestricted net assets amount of $28.7 million.
Business-type activities, which are when the county charges a fee to customers to help cover all or part of the cost of certain services it provides, such as solid waste disposal, showed $14.6 million in unrestricted net assets, which means, after subtracting out the debt related to acquiring or building these assets, the County’s business-type activities’ assets are worth more than the remaining debt on them.
The audit adds that with the exception of heat, ventilation and air-conditioning (HVAC) equipment replacement in the Old Court House, Government Office Building and Sheriff’s office, totaling almost $1.3 million, there were only minor capital investments made within the county during FY12.
The infrastructure of the county was reduced by approximately $6.2 million with a $5.3 million removal of accumulated depreciation, resulting in a net reduction to capital assets of $945,000. This was primarily due to the fact that roads were turned back over to the towns because maintenance of the road system ended by Wicomico County on June 30, 2011.
At year-end, the county had about $91.3 million in general obligation bonds and notes outstanding subject to the county’s debt limitation versus $102 million last year. This reflects the County Council’s intention to complete Bennett High School and fund high priority projects.
The county’s charter limits the amount of general obligation debt that the County can issue to 3.2 percent of the assessable base of real property plus 8 percent of the assessable base of personal property and certain operating real property of public utilities. The county’s outstanding general obligation debt of $91.8 million is significantly below this $251.7 million limit.