Harford ends the year $18 million in black

November 06, 1994|By Phyllis Brill | Phyllis Brill,Sun Staff Writer

Harford County ended fiscal 1994 on June 30 with a surplus of more than $18 million, according to an independent audit released last week.

County Treasurer James Jewell said the surplus included $8.634 million in unappropriated funds, a 5 percent account that is held aside from year to year as a savings account for emergencies.

Another $8.78 million was appropriated but unspent money that was rolled into the fiscal 1995 operating budget for use after July 1.

Year-end bills not paid until fiscal '95 accounted for the remaining $666,000 in surplus.

"We're in good shape. We got a clean audit, and we came very close to our projections," Mr. Jewell said.

The audit showed that the county collected $176,757,626 in total revenue, and spent $177,988,711. The $1.231 million difference was balanced by money from the previous year's $6.3 million appropriated fund balance, which had been carried over into the budget, Mr. Jewell said.

The county regularly reviews the current year's budget to track incoming revenue and monitor interest rates and other economic indicators so it can project surpluses available for the next year's budget.

He said the $18.081 million surplus June 30 was only $254,000 more than the administration's projection of $17.827 million -- "less than 1 percent of the total budget."

Mr. Jewell said that, after covering the $1.2 million revenue shortage in fiscal '94, the county was still able to maintain an unappropriated fund balance -- or savings account -- equal to 4.9 percent of the current year's budget.

County Executive Eileen M. Rehrmann has held in reserve an amount equal to about 5 percent of the annual operating budget each year since she took office in 1990. She has said the savings account, often referred to as the "rainy day account," is essential to the county's earning a good bond rating, which lowers interest rates on borrowing.

She has been criticized for holding money aside. But Mr. Jewell ** said the Treasury's conservative budget approach paid off in fiscal '94.

Last year, the county earned a AAA rating on refunded bonds for the first time in its history, and its rating on general obligation bonds also was upgraded to AA and AA- by two of three credit rating agencies.

County Council President Jeffrey D. Wilson has frequently questioned the administration's prudence in maintaining a reserve fund to balance the budget.

Even though '94 projections came close to the year-end figures, he said, "the bottom line is, we are still using our savings account to subsidize an operating deficit. This may work for another year or so, but whenever the next slowdown comes, we could have problems."

But Mr. Jewell said the county's reserve fund is essential to balancing the budget. He also said that projection methods have improved since the 1980s, when the county's total revenues increased by 22 percent in one year and the population explosion left the treasurer underestimating revenues by millions dollars.

"We are trying to review the data more often and review theconomy more closely," he said. "The 5 percent is necessary to allow for recessions and booms and changes in the economy over the long haul. Growth isn't necessarily slow and steady. It peaks and falls and you have to be prepared for that."

The annual audit of the county's finances is required by state and local law. It was conducted by independent accountants Wooden & Benson and will be presented to the County Council in December.

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