Ocean City Today

Worcester releases audited financial report

Revenues, expenses up over last year; retirement savings present budget challenge
By Brian Gilliland | Dec 21, 2017

(Dec. 22, 2017) Worcester County’s Finance Department presented the annual Comprehensive Annual Financial Report to the commissioners this past Tuesday, which is the total of the county’s audited financial transactions for the year.

Revenues and expenses are expressed in the form of net position, an accounting term highlighting the difference between the initial cost of an item and its final value. For example, if 100 fidget spinners were purchased for $1 each, but sell for $10 each, then the net position would be +$900 since the initial investment cost of $100 is deducted from the profits.

The total net position of Worcester County in 2017 is almost $111.98 million, up from about $108.48 million last year.

The county recorded a net position of $202 million in revenue from governmental activities, up from about $191 million last year. The bulk of the increases come from taxes, with property taxes generating almost $130.2 million in revenue.

Income tax value also jumped about $5 million based on the half-percent hike to the regressive income tax in the county from 1.25 to 1.75 percent effective last year. Income taxes generated a nearly $18 million net position in 2016, which swelled to almost $23 million in 2017.

Another $2 million was generated from other local taxes, which increased from about $28.2 million to about $30.1 million.

County investments also paid off well, as interest income changed from about $210,000 in 2017 to nearly $475,000 in 2017.

Governmental expenses were also up from about $194 million to about $198 million, with small increases spread over a number of divisions, like the Board of Education, Public Works and Public Safety.

The value of the county’s business-type activities, such as solid waste, water and wastewater and the remains of the liquor control department, increased slightly after a $2.3 million loss in 2016 and a $167,000 loss this year, but was bolstered by a $1.3 million infusion from the general government fund.

In 2016, the government’s business activities started at a value of about $55.76 million and ended at $53.45 million, losing $2.3 million of value. In 2017, with the addition of $1.3 million from the general fund offsetting the further $167,000 loss, the year ended with $54.6 million

Another issue the commissioners have grappled with over the past couple of years is funding health care for its retirees, called Other Post-Employment Benefits. As of July 1, 2016, the most recent actuarial valuation, the county has funded a little better than 60 percent of its OPEB cost at almost $46 million on a $74.5 million liability. The Board of Education, included in these figures though not every county does so, is much farther behind with almost $21 million on a $181.5 million liability.

The commissioners have voted twice during this term to limit the benefits offered to new hires upon retirement to limit these costs.

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