CAFR Report 1

Baltimore County Maryland

Comprehensive Annual Financial Report For The

Fiscal Year Ended June 30, 2020

Baltimore County, Maryland

Comprehensive Annual Financial Report

For The Fiscal Year Ended June 30, 2020

Prepared By The Office Of Budget and Finance

INTRODUCTORY

SECTION

COMPREHENSIVE ANNUAL FINANCIAL REPORT

BALTIMORE COUNTY, MARYLAND FOR THE YEAR ENDED JUNE 30, 2020

TABLE OF CONTENTS

I. INTRODUCTORY SECTION Letter of Transmittal III Organizational Chart XVI List of Principal Officials XVII GFOA Certificate of Achievement XVIII II. FINANCIAL SECTION Independent Auditors’ Report 1 A. MANAGEMENT’S DISCUSSION AND ANALYSIS 4 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 18 Statement of Activities 19 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet 20 Statement of Revenues, Expenditures and Changes in Fund Balances 21 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Budgetary Comparison Statement – General Fund 23 Proprietary Fund Financial Statements Statement of Net Position 24 Statement of Revenues, Expenses, and Changes in Net Position 25 Statement of Cash Flows 26 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position 27 Statement of Changes in Fiduciary Net Position 28 Component Units Financial Statements Statement of Net Position 29 Statement of Activities 30 Notes to Basic Financial Statements 31

C. REQUIRED SUPPLEMENTARY INFORMATION Schedule of the County’s Proportionate Share of the Net Pension Liability and

Related Ratios – Employees’ Retirement System 84 Schedule of County Contributions – Employees’ Retirement System 85

Schedule of Changes in County’s Net Pension Liability and Related Ratios – Police Fire and Widow’s Pension Plan (PFW) 86 Schedule of County Contributions – PFW Pension Plan 87 Schedule of Investment Returns – PFW Pension Plan 87 Schedule of Changes in Total Liability and Related Ratios – OPEB Trust 88 Schedule of the County’s Proportionate Share of the Net Pension Liability and 89 Related Ratios – OPEB Trust

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COMPREHENSIVE ANNUAL FINANCIAL REPORT

BALTIMORE COUNTY, MARYLAND FOR THE YEAR ENDED JUNE 30, 2020

TABLE OF CONTENTS (continued)

D. COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES – SUPPLEMENTARY INFORMATION

Governmental Funds Schedule of Appropriations and Expenditures – Budget and Actual – General Fund 92 Combining Balance Sheet – Nonmajor Governmental Funds 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Nonmajor Governmental Funds 99 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Liquor License Fund 100 Internal Service Funds Combining Statement of Net Position 101 Combining Statement of Revenues, Expenses and Changes in Net Position 102 Combining Statement of Cash Flows 103 Fiduciary Funds Combining Statement of Fiduciary Net Position – Benefits Trust Funds 104 Combining Statement of Changes in Fiduciary Net Position – Benefits Trust Funds 105 III. STATISTICAL SECTION Financial Trends Net Position by Component 107 Changes in Net Position 108 Fund Balances of Governmental Funds 110 Changes in Fund Balances of Governmental Funds 111 Unreserved Fund Balance and Revenue Stabilization Reserve Account Expressed as a Percentage of General Fund Revenues and Transfers In 113 General Fund Revenues 114 General Fund Tax Revenues by Source 115 General Fund Expenditures and Transfers by Function 116 Revenue Capacity Taxable Assessed Value and Estimated Actual Value of Taxable Property 117 Property Tax Rates – Direct and Overlapping Governments 118 Principal Property Taxpayers 119 Property Tax Levies and Collections 120 Debt Capacity Ratios of Outstanding Debt by Type 121 Ratios of Net General Obligation (GO) Debt to Estimated Actual Value of Property And Net GO Debt per Capita 122 Legal Debt Margin Information 123 Demographic and Economic Information Demographic and Economic Statistics 124 Principal Employers 125 Operating Information Full-time Equivalent County Government Employees by Function 126 Operating Indicators by Function 128 Capital Asset Statistics by Function 130

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PROFILE OF THE COUNTY The Reporting Entity and Its Services The County is a corporate polity which performs all local governmental functions within its jurisdiction, as there are no incorporated towns, villages, municipalities or other political subdivisions with separate taxing authority. Under home rule charter since 1957, the County is governed by an elected County Executive and a seven-member County Council with each serving separate executive and legislative functions, respectively. The Community College of Baltimore County, the Board of Education of Baltimore County, and the Board of Library Trustees for Baltimore County are reported as discretely presented component units because they are deemed to be fiscally dependent on the County. The component units are reported separately within the County’s financial statements to emphasize that they are legally separate from the County. The County and its component units provide the full range of municipal services contemplated by statute or charter. This includes education, police and fire protection, sanitation, health and social services, public improvements, planning and zoning, recreational and cultural activities, and general administrative services. Adopted Budget The annual budget serves as the foundation for the County’s financial planning and control. Pursuant to County Charter, the County Executive presents the capital and operating budgets to the County Council during April of each year. The County Council may decrease or delete any items in the budget except those required by the public laws of the State of Maryland and except any provision for debt service on outstanding obligations or for estimated cash deficits. In its deliberations, the Council considers the recommendations of the Spending Affordability Committee (Committee) consisting of three members of the County Council and two other members from an area of specialty, such as finance, organized labor, etc. On or before February 15 in each year, the Committee submits to the County Council and County Executive a report with recommendations on fiscal goals or growth in the County budget to a level that does not exceed the rate of growth of the County’s economy. The budget must be adopted by the affirmative vote of no less than four members of the County Council on or before June 1 each year. The adopted budget becomes effective July 1 and provides the spending authority at the program level for the County’s operations. As demonstrated by the statements and schedules included in the financial section of this report, the County continues to meet its responsibility for sound financial management. A budget-to-actual comparison is provided for the General Fund on page 23 as part of the basic financial statements for the governmental funds. Additional information regarding the County’s budget can be found in Note 1 of the notes to the basic financial statements and in schedules provided in the other supplementary information section.

As part of the annual operating budget process, the County develops a six-year Capital Improvement Program (CIP) consisting of the upcoming fiscal year’s appropriations (the “Budget Year”) and the succeeding five-year program. The CIP is divided into two areas: the Metropolitan District, for all water and sewer projects, and the Consolidated Public Improvements for all other capital projects. A major source of funding for the CIP is borrowed funds. CIP bond appropriations appearing in the Budget Year represent an authorization to borrow money. The cost to service this debt impacts the General Fund and the Metropolitan District Fund and increases with the amount of outstanding debt.

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INFORMATION USEFUL IN ASSESSING THE GOVERNMENT’S ECONOMIC CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the County operates. Economic Condition The County is situated in the geographic center of Maryland, surrounding the City of Baltimore almost entirely. The County is the largest jurisdiction by population in a metropolitan area with more than 2.8 million people. The City of Baltimore and the County are entirely separate political units. The County has the third largest land area of any political subdivision in the State of Maryland. Within its 612 square miles (plus an additional 28 square miles of water with over 200 miles of shoreline) are situated at least 29 identifiable, unincorporated communities which, as of 2010, ranged in population from approximately 4,300 to 63,000. The County’s overall population grew 10% from 754,292 in 2000 to 827,370 in 2019. The 2020 population estimate for Baltimore County is 847,000. Today, the County has the third highest population in the State of Maryland. Healthcare and education, the sectors that generally report job stability and growth despite economic downturns, are well represented in the County by five regional medical centers and five major colleges and universities. BD Diagnostic Systems shares a zip code with one of the largest concentrations of computer game developers on the East Coast. Headquarters for the Social Security Administration and Centers for Medicare and Medicaid Services and a core of IT contractors form the Woodlawn Federal Center, the epicenter of national health care reform implementation are located in the County. Major operations of T. Rowe Price, Toyota Financial Services, Euler Hermes, Zurich America, Baltimore Life, and Bank of America form a powerful finance-insurance community. Manufacturing holds its place with BD Diagnostics, McCormick, Stanley Black & Decker, Lockheed Martin, AAI Textron, Middle River Aircraft and Coty (formerly Procter & Gamble Beauty).

New Business and Real Estate Activity The following section highlights a sampling of business and real estate activity in the County from July 2019 to June 2020: CENTRAL BALTIMORE COUNTY Towson Square – Towson Square includes a 75,000 square foot, 3,400 seat, 15 screen multiplex cinema atop a three story, 850 space garage. In addition, seven restaurants are open. Towson Square has brought 870 jobs related to the completed project. The project owner, Retail Properties of America, is now redeveloping the former Towson Circle building and the site across the street into Towson Circle East. The two projects will be integrated in design and street level amenities.

Towson Circle East – Retail Properties of America, the owner of Towson Square is now redeveloping the former Towson Circle building and the site across the street into Towson Circle East. The two projects will be integrated in design and street level amenities. This project is a $125 million mixed-use development located at the traffic circle at York and Joppa Roads. The project includes 371 mid and high-rise apartments, developed by Avalon Bay Communities, which accepted their first occupants in February 2020. The project also includes over 24,000 square feet of new and refurbished retail space with some underground parking. Shake Shack has been announced as the first tenant for the retail space and should occupy in late 2020 or early 2021. Towson Residential - Since 2008, three major projects consisting of over 1,200 new luxury apartments have been completed with around 400 currently under construction. A $60 million, 611 bed, 248 unit student housing project with first floor retail is under construction at 101 York Road. Federal Realty Investment Trust’s project, The Flats at 703, a 105 unit apartment project located at 703 Washington Avenue, is completed and fully leased. Towson Mews, 34 luxury townhomes developed by Evergreene Homes is near completion.

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Towson Row - This 1.2 million square foot mixed-use development situated at downtown Towson’s southern gateway is bounded by York Road, Towsontown Boulevard, Chesapeake Avenue, and Susquehanna Avenue. When fully developed, this $350 million project will offer roughly 145,000 square feet of Class A office space, 250 market rate apartments and condominiums, 220 limited service and extended stay hotel rooms, 985 beds for student housing, and roughly 140,000 square feet of commercial space, including shops, restaurants, and a Whole Foods grocery store. The first phase of the student housing portion of the development, which includes the Whole Foods garage, is expected to be completed in 2020. Construction has begun on the Whole Foods market. Towson University/Downtown Towson – Towson University has leased the former Towson Armory and is renovating the space to accommodate a number of programs and offices focused on community engagement and outreach, entrepreneurship, continuing education and workforce development. The Armory will provide a place for students to engage with the business community as young entrepreneurs, interns and future workers. The University has also purchased 401 Washington Avenue, across the street from the Armory. The 130,000 square foot office building will be used for university administrative functions, bringing Towson University employees into the heart of Towson. Stanley Black & Decker Global Tools & Storage – The company signed a lease for an additional 92,000 square feet in the Greenleigh development in Middle River. 600 total employees will be located at Greenleigh, 400 of which will be new employees hired by December 31, 2020 and the remaining 200 of those employees are moving there from Towson. $8.5 million will be invested in the new space, including real property improvements, furniture, fixtures, and equipment. The new space was necessary to accommodate projected employment growth resulting from the two major purchases in the past few years of the Newell Brands’ tool business and the Craftsman line of tools from Sears. These purchases helped SB&D push deeper into the consumer and industrial equipment business sectors and extend its reach into household brand name retail markets. Towson will continue to be the headquarters for Stanley Black & Decker’s Global Tools and Storage business. The company currently occupies a total of 525,000 square feet in the Towson area, split between the 31 acre campus they own at 701 E. Joppa Road and several nearby leased properties. They currently employ 1,600 full-time employees and 350 private contractors. The Shops at Kenilworth – Greenberg Gibbons is completing work on a $20 million renovation to The Shops at Kenilworth, a landmark shopping destination in Towson, originally built in 1979. A brand new Trader Joe’s opened on the upper level in 2017. A 3,600 square foot free-standing Felipe’s Mexican Taqueria is under construction near the western lower level entrance. New shops in the center include: Amaryllis, Kenilworth Wine & Spirits, Liza Byrd Boutique, Quiet Storm Surf Shop, TAC @ Kenilworth (Summer Gallery), Wilkes & Riley, ZenLife Yoga Boutique & Juice Bar, longtime local boutique Ruth Shaw, J Jill and Radcliffe Jewelers. Towson Commons Retail - Affiliates of MFI and Woodmont Properties II are redeveloping 115,000 square feet of retail space along York Road and Pennsylvania Avenue. Existing businesses, including CVS Pharmacy, Chipotle, Hair Cuttery, Blaze Pizza, Brown Rice, New Generation Hot Pot, Insomnia Cookies, First National Bank, C&R Pub, and Rosen, Sapperstein & Friedlander have opened and renovations are underway for others. U.S. Census Office – Towson was selected as the location for the 2020 U.S. Census. The office is creating 50 new jobs in an 8,000 square foot office building. This will be an 18 month term assignment for this operation. Mill Station – The former Owings Mills Mall site has been redeveloped as an outdoor shopping center called Mill Station. This is a 575,000 square foot, $108 million project anchored by a new 148,000 square foot Costco warehouse store. Other new tenants include an 111,000 square foot Lowe’s Home Improvement store, Marshalls, Burlington, Homesense, Five Below and Giant Food. Other announced tenants include: Mod Pizza, America’s Best Contacts & Eyeglasses, Mattress Warehouse, Sally Beauty, Vineyard Elite and Village Nail Bar. The existing AMC Theatres has also been updated with new seating, menus and technology.

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Metro Centre at Owings Mills – Metro Centre at Owings Mills is a $1 billion mixed-use, transit oriented special taxing district that is being developed by Owings Mills Transit, LLC. At completion, the project will support more than 1.2 million square feet of commercial office space, 300,000 square feet of complementary retail space and 700 residential units and a full service 225 room hotel amenity. The project adjoins the Owings Mills Metro stop and two commuter parking garages with a total of 5,277 spaces. The project includes a County library, community college branch, and two five story upscale buildings with 232 apartments that are over 90% leased and ground floor retail and restaurant space. Salontra Select Suites, Suya Spot, Club Pilates, and Hook and Reel, are the newest tenants. Construction is almost complete on a new seven story apartment building, which will bring the total number of apartments at Metro Centre to 350. The 114 Class A unit building called The Met at Metro Centre is complete and has begun leasing. A fourth apartment building, “The Willard,” with 237 Class A units, is in the design phase. A new ten story, 225 room full service Marriott International hotel with conference facilities and a 1,000 seat ballroom is under construction and expected to open in 2021. The project represents a $70 million investment. Foundry Row – This $140 million mixed-use development in Owings Mills, anchored by a Wegmans grocery store, includes 356,000 square feet of retail space and 48,000 square feet of office space. Businesses including LifeBridge Health, LA Fitness, DSW, Ulta Beauty, Poke Bowl, Panera Bread, Zoe's Kitchen, Smashburger, Nalley Fresh, Mission BBQ, Chipotle, La-Z-Boy Furniture, Old Navy, Floyd's 99 Barbershop, Hair Cuttery, Sleep Number, Muse Paint Bar, Amazing Lash and Home Goods have all joined Wegmans as tenants. Avalon Foundry Row - In October 2019, the Northern Virginia-based AvalonBay Communities broke ground on the four-star, 437 unit, Avalon Foundry Row which is adjacent to the shopping center. Upon completion in early 2021, the property will feature studio to three bedroom apartments with modern amenities. Hunt Valley Towne Centre - Avalon Hunt Valley, a $70 million upscale apartment complex on the eastern end of Hunt Valley Towne Centre, is fully occupied. The Class A apartment building offers a variety of amenities, including a dog park, a gym, and a game room. The new apartment community sits above 30,000 square feet of retail. Towne Centre owner Greenberg Gibbons has announced a $150 million plan for the expansion of the Towne Centre. The plan would include apartments, office space and a hotel in the northwest corner of the property, behind the former Sears building. Bank of America – Bank of America (BofA) plans to add 600 jobs at its call center in Hunt Valley by the end of 2020. These jobs will join the 300 jobs that the bank added at the two-building complex in 2017. The new positions will be primarily call center and staff support positions and will bring the bank’s employee count at the site up to 1,500 over the next two years. BofA has taken over new space, upgraded interiors, and increased parking at the 377,000 square foot complex they own at 11333 McCormick Road. Merrill Lynch, Bank of America’s wealth management division, also has offices at the site.

226 Schilling Circle – Merritt Properties has acquired 226 Schilling Circle, a 98,000 square foot former McCormick office building. Merritt will redevelop the building into Schilling Green III, a three story Class A office that is intended for LEED Silver certification. First Financial Federal Credit Union of Maryland – This bank purchased and occupied the 47,600 square foot former JMT office building at 72 Loveton Circle. Kaiser Foundation Health Plan of the Mid-Atlantic States – This company is investing over $200 million in a new regional medical hub project in Timonium. The 227,000 square foot facility on five acres will include

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25 medical specialties and employ 350 people upon opening with another 150 expected to be added within ten years. Construction is underway and the project is expected to open in 2022. Point Breeze Credit Union (PBCU) – PBCU is constructing a new two story, 20,000 square foot addition to their current corporate offices at 11104 McCormick Road. The addition will increase its headquarters to 40,000 square feet while consolidating all of the credit union’s administrative functions under one roof. Tradepoint Atlantic – In 2014, Tradepoint Atlantic acquired the former steel production facility at Sparrows Point. The 3,250-acre property is being redeveloped for industrial and distribution use. In summer 2018, Tradepoint Atlantic purchased Sparrows Point Shipyard for $33.5 million to expand its maritime operations. For more information about current tenants at Tradepoint Atlantic, see Industrial Redevelopment section. Aviation Station – In September 2019, local real estate developer Blue Ocean acquired the former Middle River Depot, a two story, 1.92 million square foot facility on over 50 acres in Middle River. Located only hundreds of yards from the Middle River MARC train station, the developer hopes to acquire Transit Oriented Development (TOD) status from MDOT. In addition, Aviation Station was awarded the highest allocation of state historic tax credits available. The proposed mixed-use development includes a family- friendly focus with athletic playing fields, retail, office and light manufacturing spaces, and parking for hundreds of vehicles. The development is expected to create hundreds of new jobs. Lockheed Martin – Lockheed Martin’s contract with the U.S. Navy was renewed for $235 million to manufacture missile firing systems used on warships at Lockheed’s facility in Middle River. The deal extends through 2022 and could be worth as much as $356 million if the Navy adds optional orders. The flexible missile system can launch a variety of missiles. Greenleigh at Crossroads – Greenleigh at Crossroads broke ground in May 2016 on a $750 million mixed- use community of offices, shops, apartments, single-family homes, and a hotel. The project will occupy 250 acres of the 1,000 acre Baltimore Crossroads and is expected to build out over 10 to 15 years. Greenleigh plans currently include 1,800 detached homes and townhomes, three mid-rise office buildings totaling 300,000 square feet, another 350,000 square feet in single-story office buildings, 116,000 square feet of retail, and a 120-room Springhill Suites by Marriott hotel. Eisai Inc. – The U.S. pharmaceutical subsidiary of Tokyo-based Eisai Co. Ltd., signed a 40,000 square foot building lease within Greenleigh at Crossroads. The company expects to relocate approximately 55 employees from its existing location in Baltimore City in 2020 after construction is completed. Mistral Group – This company, which provides practical system solutions through adaptation and integration of Israeli defense technologies and U.S. engineering and manufacturing, relocated to White Marsh to combine and establish a new manufacturing facility, resulting in 50 new jobs company-wide. MedStar Franklin Square Hospital – In July 2017, MedStar Franklin Square Medical Center was approved by the Maryland Health Care Commission to move forward with a $70 million project to replace old surgical facilities with a new two story 75,000 square foot building and 14 operating rooms to be constructed on the hospital's Rosedale campus. The work began in October 2017 with the demolition of an old building that sat on the site. About $40 million for the project will come from tax exempt debt financing, $10 million will come from hospital operations, and the other $20 million will come from several private and public investments. The project is intended to replace Franklin Square's current surgical facilities and will be constructed over the next two years. In January 2018 MedStar Orthopedic Institute opened the Orthopedic and Sports Medicine Center at MedStar Franklin Square Medical Center. Located in 10,043 square feet of space, the practice is dedicated to bone, joint, and soft tissue injuries, and includes seven orthopedic and sports medicine experts, along with rehabilitation therapy in one centralized location. The new center is located in the Medical Arts building across from the main hospital on Franklin Square Drive. It will include 18 exam rooms, two imaging suites, and an expansive waiting room with an area for children to play. The location is convenient to communities of Harford County and Eastern Baltimore County--including Perry Hall, Nottingham, Dundalk, Middle River, and Parkville.

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Social Security Administration (SSA) – Social Security headquarters in Woodlawn announced that they will receive a $150 million Congressional Appropriation for major renovations of their main administrative building. SSA employs approximately 11,000 at this site and this significant investment ensures that Baltimore County remains home to the Social Security Administration for decades to come. iCyberCenter@bwtech – Located at UMBC’s business incubator, the iCyberCenter is the first global cyber incubator that will attract international companies to the Maryland market, and offer connections with existing organizations. Currently, there are eight national and international companies participating in the program. Guinness Open Gate Brewery and Barrel House – In 2017, Diageo announced that the first Guinness brewery in the United States in over 50 years would be located in Relay, Maryland, in a former Diageo spirits bottling facility. The $80 million brewery project, which opened fully in 2018, created over 200 production and hospitality jobs. The brewery produces Guinness Blonde Lager as well as experimental brews. In 2019, the brewery announced national distribution of the first beer developed at Open Gate, Over the Moon Milk Stout. The Open Gate Brewery attracted over 300,000 visitors in its first year of operation. Beltway Business Park – Merritt Properties constructed two new buildings on Twin Springs Road in fall 2017 and spring of 2018. Both buildings are about 40,000 square feet each, and the total investment including land was $6.2 million. The first building opened for new tenants in 2019. Junior Achievement – In June 2020, Junior Achievement plans to relocate to a new facility in Beltway Business Park, which will more than double their existing space from 12,600 square feet to 28,800 square feet. They expect to increase the number of employees from 15 to 25. The new facility will require over $3 million in buildout and renovations. Good Wrappers – Good Wrappers recently purchased 3901 Washington Blvd for expansion of their operation. The $2.6 million expansion will provide 160,000 square feet of additional space. As a result of the expansion, they more than doubled their employment base to 55 employees. Heavy Seas – The brewery is in the process of expanding and renovating their taproom in Halethorpe. The expansion will increase the size of the taproom seven-fold and double the size of the outside patio. The brewery also is constructing a new, 15-barrel innovation brew house that will allow the team to create limited releases exclusively for the taproom. They expect to add four more positions to their existing workforce of 55 employees. Completion is expected sometime in 2020. Vanns Spices – In Spring 2019, Vanns Spices relocated to a new facility in Baltimore County which doubled their existing space from 30,000 square feet to 60,000 square feet. They doubled their workforce and greatly expanded their production capacity as a result of the relocation. Over $1 million was invested in buildout and renovations in the new facility. Industrial Redevelopment

Sparrows Point/Dundalk

The Sparrows Point peninsula was the location of a major integrated steel mill for more than 100 years. In May 2012, the final steel mill operator, RG Steel, declared bankruptcy and announced plans to close the facility and lay off all 2,000 workers. For two years, Baltimore County worked aggressively both to define and pursue a new vision for this valuable 3,250 acres of land with deep water, freight rail and interstate access, and to help the dislocated steelworkers acquire the training and support services they need to enable them to move into new careers.

The Sparrows Point Partnership, an advisory group of private sector port, logistics and real estate professionals, was established by the County Executive in 2012 to recommend how best to position Sparrows Point and the surrounding area for long-term job growth. In May 2013, the Partnership released its first year report, which highlighted the area’s exceptional assets including a massive land product: 5.3 square miles, with more than 3,300 acres zoned for industrial use; deepwater access near the growing Port of Baltimore; interconnected transportation, including direct connection to two Class One railroads and

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interstate highways; exceptional natural gas and electricity supplies; a large supply of treated water flowing directly to the site; and a highly capable, motivated workforce.

The report also outlined the County’s vision for growth at Sparrows Point, driven by several key principles which include expanding maritime use on the peninsula in partnership with the Maryland Port Administration, retaining the current zoning for industrial use, encouraging private ownership to rebuild the aging infrastructure on the site, and managing a long-term strategy that includes active participation and guidance from the County, the State of Maryland and the Port of Baltimore

Tradepoint Atlantic (TPA) acquired the 3,250 acre former steel production facility at Sparrows Point. The new owners agreed to $48 million in assurances to pay for the environmental cleanup. The property will be redeveloped for industrial use. In May 2017, Maryland's Public Service Commission (PSC) approved two development companies, U.S. Wind Inc. and Skipjack Offshore Wind LLC, to build offshore wind projects off the coast of Ocean City, Maryland. As part of its project approval order, the PSC set certain conditions for the developers, including the use of port facilities in Greater Baltimore and Ocean City, and collectively invest at least $39.6 million to support port upgrades at Tradepoint Atlantic and $76 million in a steel fabrication plant in Maryland. In July 2019, Tradepoint Atlantic announced a landmark agreement with Orsted U.S Offshore Wind to develop Maryland’s first state-of-the-art offshore wind energy staging area and facility. This was a major milestone in the development of Orsted’s Skipjack offshore wind farm 19.5 miles off Maryland’s coast, and in the expansion of the offshore wind energy workforce in Baltimore County and Maryland. The agreement is part of Orsted’s $13.2 million commitment to invest at Tradepoint Atlantic. Tradepoint Atlantic purchased Sparrows Point Shipyard in the summer of 2018 for $33.5 million to expand maritime operations. The property will be redeveloped for industrial use; recent activities include:

Perdue AgriBusiness – This division of Purdue Farms invested $30 million to open an organic grain receiving and storage facility at Tradepoint Atlantic. This facility includes grain and oilseed processing and milling and will support more than 25 new jobs. The facility completed occupation of the entire 150,000 square foot facility in 2020, with possibility of expansion.

Gotham Greens LLC – This agriculture startup is building a 100,000 square foot hydroponic greenhouse at Tradepoint Atlantic in early 2019 and plans to open in early 2020, bringing in 50 new jobs.

U.S. Department of Transportation TIGER Grant – In March 2018, Tradepoint Atlantic was awarded a $20 million grant from the U.S. Department of Transportation to upgrade its east-west port berth and deepen channels to improve efficient transport and movement of bulk cargo goods transfer. The grant is being administered by the Baltimore County Department of Economic & Workforce Development.

Floor & Décor –This specialty retailer of tile, wood, laminate, natural stone flooring and accessories opened a 1.5 million square foot distribution center in late 2019, bringing in 150 new jobs.

Host Terminals – In April 2017, Tradepoint Atlantic announced a 10 year agreement with Host Terminals to oversee marine cargo operations at the Baltimore County site, which includes $30 million in combined investment toward infrastructure improvements to the site. It is expected to bring 9,500 jobs to the region. The International Union of Operating Engineers' Local 37 will provide union labor for the facility.

FedEx Ground – FedEx Ground secured a long term lease and in July 2017, opened a new 300,000 square foot distribution center at Tradepoint Atlantic that employs 150 with plans to hire up to another 150 long- term package handlers, drivers, and office workers.

BAE Systems – Tradepoint Atlantic’s dry dock returned to service in June 2020, after last being used in 2017. The first client BAE Systems’ Titan dry dock is scheduled to arrive in Baltimore and dock at Tradepoint Atlantic’s onsite dry dock to undergo a five month long repair and maintenance program. The project ushers in a new era of ship maintenance and repair, and represents a year of work and planning to reopen this legacy industry in Baltimore.

Under Armour Omni Distribution House – Under Armour signed a deal with Tradepoint Atlantic to build a one million square foot distribution warehouse that will employ 1,000 people and be part of an overall $175 million capital investment. The facility opened in 2019 and will serve as the company's national hub to fulfill consumers' online orders.

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Amazon at Tradepoint Atlantic - Amazon will open its fourth fulfillment center in Maryland, and second at Tradepoint Atlantic, creating more than 500 new full-time jobs and hundreds of local construction jobs. The more than one million square foot facility adds to Amazon’s presence at Tradepoint where the company currently operates an 855,000 square foot robotics fulfillment center with more than 2,000 full-time employees. When completed, the center will allow Amazon employees to pick, pack and ship larger consumer items, such as bulk paper goods, sports equipment, patio furniture and larger home goods and electronics. The facility, which will house innovative Amazon technologies and energy efficient zero emission power industrialized truck (PIT) equipment, is expected to launch in time for the 2020 holiday shopping season.

The Shoppes at Tradepoint Atlantic -- In November, 2017, Tradepoint Atlantic announced Royal Farms as the first tenant to occupy this 70 acre retail development. The Baltimore based convenience store chain has signed a long-term lease. The Shoppes at Tradepoint Atlantic is a planned retail development comprising more than 70 acres of Tradepoint Atlantic. The Royal Farms development includes retail gas and diesel fueling, a convenience store, and car wash.

Technology Locations

bwtech@UMBC

The bwtech@UMBC Research & Technology Park (the “Park”) is a 71-acre community engaged in research, entrepreneurship, and economic development. The Park contains eight buildings, including multi- and single-tenant buildings and three incubators. Over 40 cyber security companies currently reside and do business in the Park. The Park is adjacent to the main UMBC campus with direct access to the innovative research and amenities of a major university.

The Park includes 133 tenants and 1,500 employees, including mature, emerging and incubator

companies. This past year 10 new companies joined their incubator. bwtech@UMBC operates these distinct business incubators with specific industry orientation and has offered 10 workshops for over 100 businesses participating, and conducts direct advisory services to over 60 tenant companies. bwtech@UMBC companies have access to UMBC campus amenities and enjoy the strategic location only minutes away from BWI Thurgood Marshall Airport, downtown Baltimore, and the federal agencies located in the Washington, D.C. corridor. The location, coupled with the opportunity to collaborate with the talented students and faculty of UMBC's nationally recognized science and engineering programs, makes bwtech@UMBC an ideal location for technology, bioscience and research organizations at all stages of development.

Bwtech@UMBC recently announced the establishment of a new internal cybersecurity center

called iCyberCenter. The iCyberCenter will provide an executive training session, a 12-month incubator program, and other support to companies from the United Kingdom and other nations to help them establish a foothold in the U.S. market. The new iCyberCenter connects to mentors, thought-leaders, potential customers, investors and partners while being part of an unparalleled cybersecurity ecosystem. Companies in the iCyberCenter’s incubation program benefit from expert mentoring by highly experienced international cyber business experts and a continuous program of training, events, networking, and new business opportunities designed to help them accelerate entry into the U.S. market.

UMBC was designated as a RISE Zone institution by the State of Maryland. This designation

provides income tax credits to incubator companies for each new job created. UMBC has significant resources and expertise in the areas of economic development and community relations that it expects to apply to these goals. Senior officials in charge of bwtech@UMBC, corporate relations, and community relations will lead planning for the RISE Zone. Virtually all the Park’s 525,000 square feet are leased and the Park generated nearly $500 million in income and business sales. These figures speak to UMBC’s economic development ability. The following list highlights tenants at bwtech@UMBC Research & Technology Park as of FY 2020:

FZata – This biotech company focuses on developing antibody based therapeutic and preventative medicines, as well as diagnostic products.

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Syncopated Engineering – This is a creative solution provider of software applications and embedded systems for wireless communications, signal processing, and data analytics.

ACTIVECharge – This company creates novel technologies to harvest wasted vibrational and kinematic energy and convert it to electrical energy for battery-free sensor operations for wind and other energy related equipment. Ardent Privac – This company maximizes the privacy and security of data within an enterprise by minimizing data to reduce liability and business risk. 4S – This NHO-owned 8(a) company provides leading edge software, optics, and technical management practices to federal clients. iProove – This company creates unique biometric authentication solutions for a variety of clients including the U.K. and U.S. governments. Potomac Laser – This UMBC alum-founded business is a micro-manufacturer for medical device micro- machining, biotech manufacturing and electronics. Blue Wave Semiconductors – This technology company develops a variety of thin film deposition systems including pulsed laser deposition (PLD) systems, electron beam evaporators, thermal evaporators, reactive sputtering tools, hot filament chemical vapor deposition (HFCVD) systems, and thermal chemical vapor deposition (TCVD) systems. Enterprise Zones An enterprise zone is a tool the State of Maryland offers to local jurisdictions for promoting economic development in certain qualifying areas. The County has three Enterprise Zones - the Chesapeake Zone (formerly known as the North Point Zone), located along the industrial North Point corridor in eastern Baltimore County; the Southwest Zone, located in the Washington Boulevard/Hollins Ferry Road industrial corridor; and the Federal Center at Woodlawn Zone. These three areas contain over 10,000 acres of industrial and office-zoned land, and over 700 businesses. Since the approval of the first zone in December 1995, more than 130 businesses in the North Point and Southwest enterprise zones have committed to investing over $315 million in real property improvements and $270 million in machinery and equipment. In addition, approximately 3,700 new jobs have been created. The Halethorpe-Arbutus area in the Southwest Enterprise Zone has seen dramatic growth, with almost 600 new jobs in a four year period. The Southwest Enterprise Zone was amended and redesignated in June 2013. The North Point Zone expired and was replaced in 2015 by the Chesapeake Zone, a larger area that now includes the entire Sparrows Point peninsula, now known as Tradepoint Atlantic.

The program offers two primary benefits to businesses in the designated zone that make new investments or hire new employees:

1. Property Tax Credits. The local jurisdiction provides an annual property tax credit that is phased out over a ten year period. For the first five years, the credit is equal to 80% of the increase in property tax resulting from the new investment in real property. In the subsequent five years, the credit decreases 10% annually until it is phased out entirely in the eleventh year.

2. Income Tax Credits. For each new, fulltime job created in an enterprise zone, the State grants a

$1,000, onetime State income tax credit to the employer. If a worker who is certified as economically disadvantaged fills the new job, the credit can total as much as $6,000 over three years.

The local property tax credit is applied only to the increased tax liability resulting from the new investment. Therefore, the County experiences no loss in property tax revenue as a result of the program; it simply foregoes a portion of the increase in property tax revenue that results from the new investment. Additionally, the State of Maryland reimburses the County for 50% of the property tax credits to businesses.

XII

Opportunity Zones

The 2017 Tax Cuts and Jobs Act permits the designation of distressed communities as Opportunity Zones, a federal incentive which allows private investors to defer paying taxes on capital gains invested in an Opportunity Zone fund. If the investment is held for certain periods of time, investors may avoid taxes on a portion of such capital gains investments and on the amount of the capital gains derived from the investment in the Opportunity Zone fund. There are 149 census tracts in Maryland designated as Opportunity Zones, 10 of which are in Baltimore County. Baltimore County Opportunity Zones are: UMBC/Spring Grove, Woodlawn, Owings Mills, Middle River, Essex, and Southern Dundalk. The Woodlawn and Essex designated areas each contain two Opportunity Zones. Economic Development Financing Assistance

In FY 2020 the County approved financial assistance to four businesses from the County’s Revolving Financing Fund totaling $295,000. Additionally, during FY 2020 the County approved four loans totaling $645,000 from the County’s Boost loan program. The Boost Fund provides flexible financing to assist in the acquisition of business assets, working capital, equipment, owner-occupied commercial real estate, construction of new facilities, and leasehold improvements.

Relevant Financial Policies

The County’s debt and financial management policies as set forth by the County Executive were

recognized by all major rating agencies with the continuation of the County’s triple-A credit rating. The policies included target ratios to be met and ceiling or floor ratios. The County will take appropriate corrective action to ensure that ratios do not go above or drop below their respective desired ceiling or floor.

To protect the County from unforeseen emergencies and future economic downturns, the County

took the fiscally prudent step of raising its target level for unreserved General Fund balances. Rather than the long-term policy level of 5% of the revenue budget, effective FY18 the County Council approved an amount equal to 10% of the revenue budget be transferred to the Revenue Stabilization Reserve Account (RSRA) with limited access for withdrawals. The County plans to maintain unreserved General Fund balances in excess of 10% of General Fund’s revenues each year. Effective FY18, there is established a minimum level of reserves in the RSRA equal to 7% of the budgeted general fund revenue for the current fiscal year. Funds in the RSRA may not remain 7% for more than two consecutive years.

The County will ensure that any unreserved fund balance in excess of the target level of revenues

will be retained to provide only short-term tax stabilization. Excess reserves well above the target level will be eliminated through dedicated one-time items such as PAYGO contributions in order to reduce the level of programmed borrowing in support of the capital budget.

Major Initiatives The following are some selected highlights and budget priorities for FY 2020 that are expected to

affect future financial position:

Education – The FY 2020 budget for the Baltimore County Public Schools (BCPS) is an increase of $81.8 million or 5.3% over the FY 2019 budget. The budget exceeds Maintenance of Effort by 4.4% or $35.5 million.

The FY20 capital budget and capital improvement program continues the Schools for Our Future program. The program was initiated to eliminate elementary school overcrowding, modernize schools and install air conditioning in all County schools. The Adopted FY 2020 Capital Budget shows an allocation of $260.3 million to school projects and a six-year plan totaling over $675 million. All County funding for the Schools for Our Future Initiative is in place with the FY20 Capital Budget. The FY 2020 budget includes $15 million in capital funds for the planning and design of the replacement Landsdowne High School.

XIII

The Community College of Baltimore’s County’s (CCBC) FY 2020 Operating Budget reflects an increase of $2.9 million from prior years funding. The FY 2020 Operating Budget also continues to reflect CCBC’s Economic Stabilization and Enrollment Stabilization initiatives. Both of these initiatives were implemented in previous years to address the inter‐dependent concerns of a continuous greater State Community College Aid for FY 2019 enrollment decline indicative of an improving local economy and the resultant destabilization of revenue streams that strongly correlate with credit enrollment and constitute the financial foundation of CCBC’s operations. CCBC intends for the strategic results from these two initiatives to propel the college into the next decade via its Strategic Plan FY 2017‐FY 2019 entitled “CCBC 2020 – A College on the Cutting Edge.” Especially noteworthy in this regard is the implementation of CCBC’s “Strategic Alignment Target,” a plan to re‐deploy dozens of vacant positions reclassified to complement new programs, such as additional online curricula offerings. Thus, CCBC will have adjusted its staff size and composition, consistent with mission‐centric programs, and will have also taken the necessary steps to diversify its revenues and contain cost inefficiencies.

Public Safety – The Baltimore County Police Department continues to enhance its transparency and communication with citizens. The FY 2020 budget reflects the third full year of the County’s new emergency medical transport billing initiated with the cooperation of the Baltimore County Volunteer Firemen Association. With projected FY 2020 revenue of $25 million, a broader, deeper commitment has been made to Baltimore County’s volunteer fire and EMS companies including a 1% percent increase in funding over the current operating budget. Community Conservation and Preservation - The Department of Health and Human Services is the largest provider of social safety net activities for the County. Its mission is to promote the well‐being of individuals and families through the provision of quality health and social services. The FY 2020 Adopted Budget includes more than $100 million in its Health and Human Services Agencies’ budgets. Although this amount includes a significant amount of federal and state funding, the County’s overall commitment across all agencies includes more than $36 million in County funds towards these worthy endeavors. Health related services are wide ranging and address a myriad of issues including public health, care of pregnant women and children, care of disabled individuals, substance abuse, and mental health. Social Service functions are equally wide ranging and include services to vulnerable adults, care for abused and neglected children, provision of emergency resources to needy families and other services aiding families transitioning to self‐sufficiency. More than $20 million, of the previously mentioned $36 million in County funds, has been budgeted in FY 2020 to address these issues. Coronavirus Aid, Relief, and Economic Security (CARES) Act - The CARES Act was passed by Congress and signed into law on March 27, 2020. The purpose of the CARES Act was to create $150 billion in Coronavirus relief funds for states and U.S. territories that can be used for necessary and justifiable expenditures incurred due to COVID-19 that were not accounted for in the most recently approved budget as of March 27, 2020. Necessary costs in the budget include costs that are now substantially dedicated to a different use than originally intended. These costs must be incurred during the period that begins on March 1, 2020, and ends on December 30, 2020. The allocation of these dollars is based on population and Baltimore County received $144,369,685 directly from the U.S. Treasury. AWARDS AND ACKNOWLEDGEMENTS

The GFOA has awarded a Certificate of Achievement for Excellence in Financial Reporting to the

County for its CAFR for the fiscal year ended June 30, 2019. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. This CAFR must satisfy both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year. The County has received a Certificate

of Achievement for the last 41 consecutive years (fiscal years ended June 30, 1979 – 2019). We believe that our current report continues to conform to the Certificate of Achievement Program’s requirements and we are submitting it to GFOA to determine its eligibility for another certificate.

XIV

XV

I CITIZENS II I

LEGISLATIVE BRANCH

COUNTY COUNCIL

BOARD OF COUNTY APPEALS AUDITOR

OPERATING AGENCIES

DEPARTMENT OF DEPARTMENT OF OFFICE OF BUDGET

ENVIRONMENTAL ECONOMIC AND

PROTECTION AND DEVELOPMENT FINANCE

SUSTAINABILITY

POLICE FIRE OFFICE OF HUMAN DEPARTMENT DEPARTMENT RESOURCES

DEPARTMENT HEALTH

OF DEPARTMENT

AGING

DEPARTMENT OF DEPARTMENT RECREATION OF AND PARKS CORRECTIONS

DEPARTMENT OF DEPARTMENT

PERMITS, OF PUBLIC

APPROVALS, AND WORKS

INSPECTIONS

COUNTY

EXECUTIVE BRANCH

COUNTY EXECUTIVE

COUNTY ADMINISTRATIVE

OFFICER

STAFF AGENCIES

OFFICE OF INFORMATION TECHNOWGY

OFFICE OF LAW

OFFICE OF PLANNING

BALTIMORE COUNTY, MARYLAND

COUNTY GOVERNMENT ORGANIZATION

AGENCIES SUBJECT TO CONTROL BY CHARTER

&/OR COUNTY FUNDING

DEPARTMENT OF

CIRCUIT

EDUCATION COURT

DEPARTMENT STATE'S

OF ATTORNEY

LIBRARIES

DEPARTMENT OF SOCIAL COUNTY

SERVICES SHERIFF

COMMUNITY ORPHAN'S COLLEGE COURT

SUPERVISOR LIQUOR LICENSE OF ELECTIONS COMMISSIONERS

UNIVERSITY OF OFFICE OF ETHICS

MARYLAND AND

EXTENSION ACCOUNTABILITY

XVI

LIST OF PRINCIPAL OFFICIALS June 30, 2020

Elective County Executive John A. Olszewski, Jr County Council Tom Quirk

Izzy Patoka Wade Kach Julian E. Jones, Jr. David Marks Cathy Bevins Todd K. Crandell

Administrative

Administrative Officer Stacy L. Rodgers Director of Budget and Finance Edward P. Blades County Attorney James R. Benjamin County Auditor Lauren Smelkinson Director of Public Works D’Andrea Walker Chief of Police Melissa Hyatt Fire Chief Joanne Rund Director of Aging Laura Riley Director of Economic and Workforce Development Leonard Howie Director of Environmental Protection and Sustainability David Lykens Director of Information Technology Rob O’Connor Director of Permits, Approvals and Inspections Michael Mallinoff Director of Human Resources Rhoda Benjamin Director of Planning Pete Gutwald Director of Recreation and Parks Roslyn Johnson Superintendent of Schools Darryl Williams Director of Health and Human Services Dr. Gregory Wm. Branch Director of Libraries Sonia Alcántara-Antoine President of Community College Sandra L. Kurtinitis, Ph.D

Director of Corrections Gail Watts Administrative Law Judges Lawrence M. Stahl Paul M. Mayhew

XVII

Government Finance Officers Association

Certificate of Achievement for Excellence

in Financial Reporting

Presented to

Baltimore County Maryland

For its Comprehensive Annual Financial Report

For the Fiscal Year Ended

June 30, 2019

Executive Director/CEO

XVIII

FINANCIAL

SECTION

INDEPENDENT AUDITORS' REPORT

The Honorable County Executive and Members of the County Council Baltimore County, Maryland Towson, Maryland

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Baltimore County, Maryland (the County), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

1

The Honorable County Executive and Members of the County Council Baltimore County, Maryland

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 - 15 and required supplementary information, as listed in the table of contents on pages 83 - 89 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The accompanying introductory section, combining and individual fund statements and schedules-supplementary information, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements and schedules - supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules - supplementary information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

2

The Honorable County Executive and Members of the County Council Baltimore County, Maryland

The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2020, on our consideration of the County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County’s internal control over financial reporting and compliance.

a CliftonLarsonAllen LLP Baltimore, Maryland December 30, 2020

3

BALTIMORE COUNTY, MARYLAND MANAGEMENT’S DISCUSSION AND ANALYSIS

Baltimore County, Maryland management is providing this narrative overview and analysis of the financial activities of the primary government (the County) as of and for the fiscal year ended June 30, 2020. Readers are to consider the data presented here in conjunction with the information presented in the transmittal letter at the front of this report and with all the County’s financial statements and accompanying notes to those financial statements, which follow this section.

UFinancial Highlights Government-wide:

 The County’s assets and deferred outflows of resources were $6.733 billion and its liabilities and deferred inflows were $8.734 billion, resulting in negative net position of $2.001 billion.

 The County’s total net position decreased by $305.762 million. Fund Level:

 The County’s governmental funds have combined fund balances of $474.780 million.  The General Fund’s fund balance is $518.103 million of which $337.068 million is unassigned fund

balance inclusive of $215.634 million in a Revenue Stabilization account. Long-term Debt:

 The County’s total bond and note debt increased by $134.550 million during the current year. The key factors in this increase were the issuance of $350.000 million in bond anticipation notes, the issuance of $288.000 million in general obligation bonds and $87.264 draw on the Maryland Water Quality Revolving Loan Fund. These issuances and draws were offset by debt service payments of $335.078 million.

UOverview of the Financial Statements

This discussion and analysis is an introduction to the County’s basic financial statements, which comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide Statements (Reporting the County as a Whole) The Statement of Net Position and the Statement of Activities are two financial statements that report information about the County’s activities that should serve as a useful indicator of whether the County, as a whole, is better or worse off as a result of this year’s activities. These statements include all non-fiduciary assets and liabilities using the accrual basis of accounting. The current year’s revenues and expenses are taken into account regardless of when cash is received or paid. The Statement of Net Position on page 18 presents all of the County’s non-fiduciary assets, liabilities and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases and decreases in net position measure whether the County’s financial position is improving or deteriorating.

The Statement of Activities on page 19 presents information showing how the County’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the change occur, regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave).

4

The focus of the statements is clearly on the primary government and the presentation allows the user to address the relative relationship with the component units. Both statements report three activities, which include the governmental activities and business-type activities of the primary government and separate reporting for the County’s component units.

 Governmental Activities – Most of the County’s basic services are reported under this category.

Taxes and intergovernmental revenues generally fund these services. The general government, public safety, public works, health and human services, culture and leisure services, economic and community development, and education functions fall within the governmental activities.

 Business-type Activities – The County charges fees to customers to help it cover all or most of the costs of certain services it provides. The Metropolitan District water and sewer services are the only business-type activity reported.

 Discretely Presented Component Units – Component units are legally separate organizations for which the primary government is financially accountable or for which the nature and significance of their relationship with the primary government is such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The County reports three component units that are described in the notes to the basic financial statements.

This report includes two summary reconciliations (pages 20 and 22) between the governmental fund financial statements (modified accrual accounting) and the governmental activities (full accrual accounting) reflected on the government-wide financial statements. Note 2 of the notes to the basic financial statements also provides more detail as to the transactions that impact the conversion from the modified accrual basis of accounting to the full accrual basis of accounting. Fund Financial Statements (Reporting the County’s Major Funds) Traditional users of governmental financial statements will find the fund financial statements presentation more familiar. The focus is on major funds. A fund is a fiscal and accounting entity with a self-balancing set of accounts that the County uses to keep track of specific sources of funding and spending for a particular purpose. The County’s funds are divided into three categories – governmental, proprietary, and fiduciary – and use different accounting approaches.

 Governmental funds – Most of the County’s basic services are reported in the governmental funds,

which focus on how money flows into and out of those funds and the balances left at year-end that are available for future spending. The governmental fund financial statements provide a detailed short-term view of the County’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the County’s programs. These funds are reported using modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The County reports the General Fund, Gifts and Grants Fund, and the Consolidated Public Improvement Construction Fund as major funds.

 Proprietary funds – When the County charges customers for the services it provides, whether to outside customers or to other agencies within the County, these services are generally reported in proprietary funds. Proprietary funds (enterprise and internal service) utilize accrual accounting; the same method used by private sector businesses. Enterprise funds report activities that provide supplies and services to the general public. The County reports the Metropolitan District Fund as a major fund. Internal service funds report activities that provide supplies and services to the County’s other programs and activities. Internal service funds are primarily reported as governmental activities on the government-wide statements.

 Fiduciary funds – The County is the trustee for its employee pension plans and the post employment healthcare benefits plan. These funds are reported using accrual accounting. The government-wide statements exclude fiduciary fund activities and balances because these assets are restricted in purpose and do not represent discretionary assets of the County to finance its operations.

5

Notes to Basic Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found starting on page 31. Other Information Required supplementary information includes schedules concerning the County’s pension plans and its post-employment healthcare benefits provided to its employees. These schedules can be found starting on page 84. Other supplementary information includes combining and individual fund financial statements and schedules for the General Fund, Liquor License Fund, Stormwater Management Fund, internal service funds and fiduciary funds. These statements and schedules can be found starting on page 92.

UFinancial Analysis of the County as a Whole

The County’s combined net position decreased $305.762 million in FY 2020. The net position of the governmental activities decreased $191.958 million and business-type activities decreased $113.804 million. The schedule on page 7 presents the net position of the County’s governmental and business-type activities as of June 30, 2020. The largest component of the County’s net position reflects its investment in capital assets (e.g., land, buildings, equipment, and infrastructure), less any related outstanding debt used to acquire the assets. The County uses these capital assets to provide services to citizens. Consequently, these assets are not liquid or available for future spending or liquidation of any liabilities. The liabilities associated with the County’s net pension and net OPEB liabilities along debt used to finance capital projects, are the main cause of the County’s negative unrestricted net position balance for both Governmental and Business-type Activities. It is important to note that counties in the State of Maryland issue debt for the construction of schools, yet the school buildings are owned by each public school system. The County also funds projects for the Community College of Baltimore County. Therefore, the County’s financial statements include this outstanding debt, without the addition of the corresponding assets, which is a major reason for the governmental activities negative unrestricted net position. The County has a similar situation where it issues debt to finance capital contributions for Baltimore City owned assets. This is what causes the negative unrestricted net position in the business-type activities. These situations are described in more detail in Note 8.

6

Assets: 2020 2019 2020 2019 2020 2019

1,147,884$ 921,744$ 308,935$ 247,137$ 1,456,819$ 1,168,881$

2,650,291 2,621,945 1,590,543 1,518,075 4,240,834 4,140,020

3,798,175 3,543,689 1,899,478 1,765,212 5,697,653 5,308,901

973,351 627,851 62,033 44,363 1,035,384 672,214

720,380 686,511 416,656 220,300 1,137,036 906,811

5,666,062 4,904,631 1,837,882 1,768,668 7,503,944 6,673,299

6,386,442 5,591,142 2,254,538 1,988,968 8,640,980 7,580,110

89,169 92,725 4,137 3,967 93,306 96,692

1,723,439 1,498,138 455,042 552,407 2,178,481 2,050,545

46,272 110,636 - - 46,272 110,636

(3,473,796) (3,120,901) (752,206) (735,767) (4,226,002) (3,856,668)

(1,704,085)$ (1,512,127)$ (297,164)$ (183,360)$ (2,001,249)$ (1,695,487)$

Unrestricted (deficit)

Total net position

Liabilities:

Current liabilities

Long-term liabilities

Total liabilities

Net position:

Net investment in capital

Total deferred inflow

of resources

of resources

Net Position as of June 30 (in thousands)

Governmental Business-type Total Primary

Activities Activities Government

Current and other non-

current assets

Capital assets

Total assets

Total deferred outflow

assets

Restricted

7

The following condensed financial information was derived from the government-wide Statement of Activities and reflects how the County’s net position changed during the fiscal year.

Revenues 2020 2019 2020 2019 2020 2019

357,632$ 335,754$ 309,305$ 311,638$ 666,937$ 647,392$ 239,493 185,783 1,836 2,774 241,329 188,557 45,829 28,381 70,098 27,148 115,927 55,529

1,017,005 979,118 - - 1,017,005 979,118 925,511 776,555 - - 925,511 776,555 180,376 174,522 - - 180,376 174,522

8,363 9,907 - - 8,363 9,907 10,140 11,283 2,209 3,906 12,349 15,189

2,784,349 2,501,303 383,448 345,466 3,167,797 2,846,769

964,187 847,073 - - 964,187 847,073 408,982 390,366 - - 408,982 390,366 170,854 176,429 - - 170,854 176,429

211,564 173,462 - - 211,564 173,462

64,319 64,575 - - 64,319 64,575 Economic and

41,941 20,543 - - 41,941 20,543 1,083,287 991,165 - - 1,083,287 991,165

31,173 33,433 - - 31,173 33,433 - - 497,252 409,220 497,252 409,220

2,976,307 2,697,046 497,252 409,220 3,473,559 3,106,266 Increase(decrease) in net position before transfers (191,958) (195,743) (113,804) (63,754) (305,762) (259,497)

component units - 400 - - - 400

(191,958) (195,343) (113,804) (63,754) (305,762) (259,097) (1,512,127) (1,316,784) (183,360) (119,606) (1,695,487) (1,436,390) (1,704,085)$ (1,512,127)$ (297,164)$ (183,360)$ (2,001,249)$ (1,695,487)$

leisure services

Public works

General government

Reversion of fund balance from

Health and human services Culture and

Net position - beginning

Education

net position

Changes in Net Position

Governmental Business-type Total Primary

(in thousands)

Public safety

contributions Investment earnings

Increase (decrease) in

Water and sewer services Total expenses

Interest on long-term debt

community development

Government

Program revenues

Operating grants

Property taxes

Activities

Income taxes

Activities

Unrestricted grants and

Total revenues

Expenses

Charges for services

Public service taxes

General revenues Capital grants

Net position - ending

8

The following graphs and charts depict the expenses and revenues of the governmental activities and business-type activities for the fiscal year which are derived from the government-wide Statement of Activities.

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

General government

Public safety Public works Health & human

services

Culture & leisure

services

Economic & community

development

Education Interest on long-term debt

Expenses & Program Revenues-Governmental Activities

Expenses (thousands)

Program revenues (thousands)

Charges for services 12.84%

Operating grants & contributions 8.60%

Capital grants & contributions 1.65%

Property taxes 36.53%

Income taxes 33.24%

Public service taxes 6.48%

Unrestricted grants/contributions 0.30%

Investment earnings 0.36%

Revenues by Source-Governmental Activities

9

$210,000 $220,000 $230,000 $240,000 $250,000 $260,000 $270,000 $280,000 $290,000 $300,000 $310,000 $320,000 $330,000 $340,000 $350,000 $360,000 $370,000 $380,000 $390,000 $400,000 $410,000 $420,000 $430,000 $440,000 $450,000 $460,000 $470,000 $480,000 $490,000 $500,000 $510,000 $520,000

Water & sewer services

Expenses and Program Revenues-Business-type Activities

Expenses (thousands)

Program revenues (thousands)

Charges for services 80.66%

Operating grants & contributions

0.48%

Capital contributions 18.28%

Investment earnings 0.58%

Revenues by Source-Business-type Activities

10

Governmental Activities The net position of governmental activities decreased $191.958 million during FY20. Key elements affecting the net position include:

 General revenues increased $190.010 million over the prior fiscal year. Income tax revenue increased $148.956 million after adjusting for the County’s portion of income tax reserves held by the State that was recognized under full accrual accounting. Property taxes provided 36.53% of total revenue with an increase of $37.887 million primarily due to new construction county-wide and from higher reassessed values on real property in the Eastern third of the County.

 Expenses increased by $279.261 million, primarily due to the increase in general government expenses by $117.114 million. The primary reason for this increase was due to an increase in pension and OPEB plan related expenses.

 Education expenses increased $92.122 million over the prior fiscal year due to an increase in funding of capital costs for the Board of Education.

Business-type Activities The net position of business-type activities decreased $113,804 million during FY20. The key elements of the Metropolitan District operations that affect net position are as follows:

 Metropolitan District expenditures related to capital infrastructure increased by $28.099 million during FY 20. This was attributable to increased costs totaling $15 million for the Tradepoint Atlantic initiative as well as $13 million for Sewer Rehab and Relief initiatives.

 The Metropolitan District operating expenditures increased by $53.229 million during FY20 as a result of contributions to capital initiatives.

 The County’s fringe costs increased $5.350 million due to the effects of accounting for the County’s Pension and OPEB plans as related to GASB 68 and 75.

UFinancial Analysis of the County’s Funds

The County uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds The governmental funds provide data on near-term inflows, outflows and balances of spendable resources. This data is useful in assessing the County’s financing requirements. The unassigned fund balance serves as a useful measure of the County’s financial resources available for appropriation at the end of the fiscal year. The County’s governmental funds reported combined ending fund balances of $474.780 million as of June 30, 2020, an increase of $12.847 million. Unassigned fund balance of the General Fund, as stated below, is available at the County’s discretion. The remaining positive fund balance of $233.593 million is not available for new spending because of varying constraints set on them. The General Fund is the County’s chief operating fund. At the end of FY20, unassigned fund balance of the General Fund was $337.068 million, while total fund balance was $518.103 million. Unassigned fund balance represents 16.35% of total budgetary expenditures, while total fund balance represents 25.14% of total budgetary expenditures. These ratios are typically useful as a measure of the General Fund’s liquidity. The County has $215.634 million in a Revenue Stabilization account. The General Fund fund balance increased by $41.928 million during the current fiscal year. Board of Education expenditures, increased by $47.771 attributable to increased operating funding levels in FY20. The General Fund also had a $13.125 million increase in public safety expenditures as a result of the County’s continued focus on safe communities. Employer contributions to OPEB increased by $29.708 million.

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The Gifts and Grants Fund fund balance of $34.64 million consists primarily of $15.172 million of earned revenue in excess of grant expenditures restricted for various grant activities administered by the County. Specifically, the Asset Forfeiture, Speed Camera, Substance Abuse grants and Environmental Protection grants amounted to a combined $10.405 million in excess revenue. In addition, $11.995 million of earned revenue was assigned for the Affordable Housing Program. In response to the Coronavirus Pandemic, the County received $144 million in federal Coronavirus Relief Funding (CRF) for the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This funding has enabled the County to leverage its response to the rapid growing necessities and challenges that pandemic presented. As of June 30, 2020, the County utilized $32 million in CRF funding to provide access to free testing sites, deployed a robust contact tracing program, implemented major business and economic supports, as well as provided millions of dollars in grants directly to small businesses, restaurants and artists. The County has also strengthened the social safety net for families, providing meals to residents in collaboration with the Baltimore County Public School system and other partners. The County continues to distribute millions of dollars for rental assistance and childcare stipends for working families. With cross-sector collaboration, the County has secured personal protective equipment (PPE) directly for nursing homes and for schools to support some of the community’s most impacted. The County has utilized the remaining balance of CRF funding during the first half of FY 21 to continue to fund these key initiatives and to meet the needs of the demographic given the dynamic operational landscape the pandemic has created. The funds are anticipated to be fully utilized on allowable expenses by December 30, 2020, however, any monies unspent at the time will revert back to the U.S. Treasury. The Consolidated Public Improvement Construction Fund fund balance decreased by $15.554 million. Major fluctuations in fund balance are primarily the result of the timing of cash inflows from bond sale proceeds and capital expenditure outflows. The County issued $145 million in new debt to fund capital projects in FY20. Capital expenditures for various County projects decreased $12.782 million to $92.201 million. Proprietary Funds The County’s proprietary funds provide more detailed data of the information reported in the government- wide financial statements. The Metropolitan District Fund net position decreased $114.041 million during FY20. The main factors concerning this decrease have already been addressed in the discussion of the County’s business-type activities. General Fund Budgetary Highlights The County had supplemental appropriations of $11.825 million primarily due to the following: $6.5 million to the Police department for back pay settlement, lateral class, and unanticipated COVID-19 related needs, $3.3 million to the Fire department to cover excess salary costs, and $1.5 million to the Health department to cover excess salary and contractual service costs. Significant differences between the final budget and actual amounts are summarized as follows:

 A favorable revenue variance of $48.646 million in County income tax revenue resulted because

of the growth of personal income, mainly from capital gains. Also, the Tax Cuts and Jobs Act (TCJA) incentivized taxpayers to shift personal income from 2017 to 2018, for which the County budgeted conservatively.

 Healthcare contributions were $24.501 million less than budget primarily because of a reversion due to the Council and administration reductions.

 The County incurred $9.304 million worth of salary costs that were originally budgeted in the General Fund that was attributable to costs associated with administering CARES grant operations, and therefore allocated to the associated grants.

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Capital Asset and Debt Administration Capital Assets The County’s investment in capital assets for its governmental and business-type activities totaled $4.24 billion net of accumulated depreciation. The investment in capital assets includes land, buildings, machinery, vehicles and infrastructure assets.

2020 2019 2020 2019 2020 2019

Land 300,659$ 299,686$ 1,317$ 1,317$ 301,976$ 301,003$

Buildings and improvements 360,198 364,662 93,387 99,309 453,585 463,971

Vehicles and equipment 108,000 108,814 3,966 2,676 111,966 111,490

Infrastructure 1,108,246 1,145,258 1,093,915 1,085,756 2,202,161 2,231,014

Construction in progress 773,188 703,525 397,958 329,017 1,171,146 1,032,542

Total 2,650,291$ 2,621,945$ 1,590,543$ 1,518,075$ 4,240,834$ 4,140,020$

Total Primary

Government

Capital Assets as of June 30, net of accumulated depreciation (in thousands)

Governmental

Activities

Business-type

Activities

The County added $5.7 million for new or improved roads, $6.1 million for coastal shoreline improvements, and $23.7 million for water and sewer lines as a major part of its infrastructure assets for FY20. Selected capital asset events during the current year were as follows:

 The County completed new and existing updates to County owned buildings at a cost of $11.9 million

 The County purchased $3.6 million of capital equipment.  The County completed repairs and renovations to the Waldman, Old Battle Grove, Rettman’s

Lane and Peninsula pumping stations totaling $7.5 million.

Additional capital asset information can be found in Note 7. Long-term Debt At the end of the current fiscal year, the County had general obligation debt outstanding of $3.979 billion. This includes Consolidated Public Improvement bonds and notes of $1.778 billion, Pension Funding bonds of $.364 billion and Metropolitan District bonds and notes of $1.837 billion. The bonds and notes are backed by the full faith and credit of the County.

2020 2019 2020 2019 2020 2019 General obligation bonds 1,982,419$ 1,916,590$ 1,646,637$ 1,615,201$ 3,629,056$ 3,531,791$ General obligation BANs 145,000 246,000 205,000 42,000 350,000 288,000 Total 2,127,419$ 2,162,590$ 1,851,637$ 1,657,201$ 3,979,056$ 3,819,791$

Outstanding General Obligation Debt as of June 30 (in thousands)

Activities Activities Government Governmental Business-type Total Primary

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The County’s general obligation debt increased in 2020 by $159.265 million (considering new borrowing and debt retirement). The County maintains an “AAA” rating from both Standard & Poor’s and Fitch Investor’s Service, and a “Aaa” rating from Moody’s Investor’s Service for general obligation bonds.

The County Charter limits the amount of general obligation debt that the County may issue for Consolidated Public Improvements to 4% of the County’s assessable property base. Metropolitan District debt may be issued up to debt limit of 3.2% of the District’s assessable property base. The County’s debt is significantly below the respective limits of $3.628 billion and $2.587 billion. Additional information on the County’s long- term debt can be found in Note 8.

Economic Factors and Next Years Budgets and Rates

 The Spending Affordability Committee’s consultant, Sage Policy Group Sage Policy Group, Inc. predicts decelerated growth in both County and State personal income (3.90%) and (4.00%) respectively, in FY21.

 The Committee further reported that employment had increased by 2.5% among Baltimore County residents, by 2.0% among Maryland residents, and by 1.6% nationally on an annual average basis from CY 2018 to CY 2019 – the tenth consecutive increase for the State and the ninth consecutive increase for the county and the nation. Employment growth in the State and County accelerated notably during CY 2019, exceeding the pace of growth in the labor market, and was the primary contributor to modest unemployment rate decreases. Baltimore County’s and Maryland’s unemployment rates reached their lowest levels since prior to the most recent recession, hitting 3.0% in December 2019 and averaged 3.7% and 3.6%, respectively, for all of CY 2019.Employment increased by 0.7% among Baltimore County residents, by 0.3% among Maryland

 During FY20, it became clear that the short and long range economic forecasts utilized for the FY 2021 budget formulation and spending affordability would no longer be relevant in a COVID-19 environment. By mid-March 2020, all Baltimore County Public Schools were closed and the County Executive had issued a series of orders and declarations regarding the COVID-19 pandemic precluding gatherings or events with ten or more people and restricting the operations of certain businesses in the County. Many businesses and retail establishments in Maryland, including the County, closed or reduced business activity. At the State Board of Revenue Estimates vote on FY 2020 and 2021 revenue, Comptroller Franchot stated “Without question, this is an unprecedented and highly volatile situation and each and every day entities within the public and private sectors make adjustments that impact our financial markets, consumer behavior and our way of life. Obviously we don’t know how long this pandemic will last or how much worse it will get, so at this point it is not possible to assess the full impact of this pandemic on our state.” In April the State’s Bureau of Revenue Estimates outlined a potential shortfall of approximately $2.8 billion during the final quarter of Fiscal Year 2020 that included a 22% decline in withholdings and a 59% loss in sales tax. Unemployment claims of 240,000 that had taken a period of 26 weeks to reach in the early 90s and 38 weeks during the Great Recession took only a period of 3 weeks to reach during the pandemic.

 Unlike the great recession, the economic crisis being created by the COVID-19 pandemic is caused by a shock in supply versus a shock in demand. Therefore, the initial stage of the economic recovery is expected to be sharp as businesses open and people return to work. The FY 2021 Budget assumes strict stay at home orders through the end of June 2020, with reopening and recovery beginning in July. However, the future of the County’s economy remains uncertain and will be highly dependent on factors such as the length of the pandemic, the availability and success of Federal Stimulus programs, and future vaccine development.

These and other economic indicators were considered when preparing the FY21 General Fund budget, which estimates revenues at $2.189 billion. General Fund appropriations for FY21 of $2.161 billion reflects a 0.372% increase from the FY20 adjusted budget. The FY21 budget for Baltimore County Public

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Schools (BCPS) includes an increase of $40.2 million or 2.21% over FY20 funding levels. Although the county has exceeded maintenance of effort (MOE) levels by an average of 2% for the past six fiscal years, anticipated fiscal constraints resulting from the COVID-19 pandemic necessitated a maintenance of effort level budget for FY 2021. The FY 2021 budget reflects the forth full year of the County’s new emergency medical transport billing initiated with the cooperation of the Baltimore County Volunteer Firemen Association. With projected FY 2021 revenue of $26.5 million, a broader, deeper commitment has been made to Baltimore County’s volunteer fire and EMS companies including a 4% percent increase in funding over the current operating budget. The FY21 reflects the second year of the County increase of the income tax rate from 2.83% to 3.2% since FY20. The respective real property and personal property tax rates remain at $1.10 and $2.75 per $100 of assessed value. The Homestead Assessment Growth Cap remains at 4%, excluding home sales, new construction, and non-principle residences.

Information Requests

This financial report is designed to provide a general overview of Baltimore County’s finances for all those with an interest in good government. The report seeks to demonstrate the County’s accountability for the monies it receives and for the services it provides. Requests for information regarding this report or additional financial information can be sent to the Baltimore County Office of Budget and Finance, 400 Washington Avenue, Room 149 Towson, Maryland 21204-4665. The County’s component units issue their own separately audited financial statements. These statements may be obtained by directly contacting the component unit (see Note 1).

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Basic Financial Statements

Government-wide financial statements combine all of Baltimore County’s governmental and business-type activities, as well as its discretely presented components. Fund financial statements show the financial position and the operating results by fund. Notes to the Basic Financial Statements are an integral part of the financial statements.

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Governmental Business-type Component Activities Activities Total Units

ASSETS Cash and investments (Note 3) 607,103$ 197,274$ 804,377$ 189,117$ Receivables, net (Note 5) 453,303 103,116 556,419 54,494 Due from primary government (Note 6) - - - 30,801 Inventories 11,283 871 12,154 2,486 Prepaid costs 1,135 - 1,135 549 Restricted assets:

Cash and investments (Note 3) 75,060 7,674 82,734 8,586 Capital assets (Note 7)

Not being depreciated 1,073,847 399,275 1,473,122 358,541 Depreciable (net of accumulated depreciation) 1,576,444 1,191,268 2,767,712 1,877,719

Total assets 3,798,175 1,899,478 5,697,653 2,522,293

DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 12,009 15,598 27,607 - Retirement and OPEB plans 961,342 46,435 1,007,777 1,049,974

Total deferred outflows of resources 973,351 62,033 1,035,384 1,049,974

LIABILITIES Accounts payable 57,740 121,173 178,913 70,086 Accrued payroll 17,700 972 18,672 38,385 Accrued interest payable 32,821 23,513 56,334 - Internal balances 3,361 (3,361) - - Due to component units (Note 6) 25,494 - 25,494 - Other liabilities 49,801 6,203 56,004 4,728 Unearned revenue (Note 5) 126,306 - 126,306 8,156 Liabilities payable from restricted assets - - - 8,586 Noncurrent liabilities (Note 8)

Due within one year 407,157 268,156 675,313 33,285 Due in more than one year 5,666,062 1,837,882 7,503,944 2,515,351

Total liabilities 6,386,442 2,254,538 8,640,980 2,678,577

DEFERRED INFLOWS OF RESOURCES Retirement and OPEB plans 89,169 4,137 93,306 23,100

NET POSITION Net investment in capital assets 1,723,439 455,042 2,178,481 2,123,658 Restricted for: Public works 17,674 - 17,674 -

Economic development 7,475 - 7,475 - Education - - - 26,836 Grant projects 15,172 - 15,172 - Debt service 5,951 - 5,951 -

Unrestricted (deficit) (3,473,796) (752,206) (4,226,002) (1,279,904) Total net position (deficit) (1,704,085)$ (297,164)$ (2,001,249)$ 870,590$

The accompanying notes are an integral part of these financial statements.

Primary Government

Baltimore County, Maryland Statement of Net Position

June 30, 2020 (In Thousands)

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Baltimore County, Maryland

Statement of Activities

For the Year Ended June 30, 2020

(In Thousands)

Operating Capital

Charges for Grants and Grants and Governmental Business-type Component

Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Units

PRIMARY GOVERNMENT

Governmental activities:

General government 964,187$ 319,478$ 3,835$ -$ (640,874)$ -$ (640,874)$ -$

Public safety 408,982 11,461 23,365 - (374,156) - (374,156) -

Public works 170,854 18,612 8,336 45,829 (98,077) - (98,077) -

Health and human services 211,564 4,103 167,551 - (39,910) - (39,910) -

Culture and leisure services 64,319 3,239 5,019 - (56,061) - (56,061) -

Economic and community development 41,941 739 27,356 - (13,846) - (13,846) -

Education 1,083,287 - - - (1,083,287) - (1,083,287) -

Interest on long-term debt 31,173 - 4,031 - (27,142) - (27,142) -

Total governmental activities 2,976,307 357,632 239,493 45,829 (2,333,353) - (2,333,353) -

Business-type activities:

Water and sewer services 497,252 309,305 1,836 70,098 - (116,013) (116,013) -

Total business-type activities 497,252 309,305 1,836 70,098 - (116,013) (116,013) - Total primary government 3,473,559$ 666,937$ 241,329$ 115,927$ (2,333,353) (116,013) (2,449,366) -

COMPONENT UNITS

Board of Education 2,125,318$ 9,035$ 225,920$ 129,228$ - - - (1,761,135)

Community College 236,066 63,557 89,863 33,454 - - - (49,192)

Board of Library Trustees 48,138 8,276 3,288 - - - - (36,574) Total component units 2,409,522$ 80,868$ 319,071$ 162,682$ - - - (1,846,901)

General revenues:

Taxes:

Property taxes 1,017,005 - 1,017,005 -

Income taxes 925,511 - 925,511 -

Public service taxes 180,376 - 180,376 -

Grants and contributions not restricted to specific programs:

Baltimore County - - - 941,323

State of Maryland 8,363 - 8,363 732,089

Unrestricted investment earnings 10,140 2,209 12,349 398

Other - - - 7,922

Total general revenues and transfers 2,141,395 2,209 2,143,604 1,681,732

Change in net position (191,958) (113,804) (305,762) (165,169)

Net position (deficit) at beginning of the year (1,512,127) (183,360) (1,695,487) 1,035,759 Net position (deficit) at end of the year (1,704,085)$ (297,164)$ (2,001,249)$ 870,590$

The accompanying notes are an integral part of these financial statements.

Primary Government

Program Revenues Net (Expense) Revenue and Changes in Net Position

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Consolidated Gifts Public Nonmajor Total and Improvement Governmental Governmental

General Grants Construction Funds Funds ASSETS Cash and investments 360,954$ 141,833$ -$ 221$ 503,008$ Cash and investments - restricted 75,060 - - - 75,060 Receivables, net 355,696 93,306 1,749 40 450,791 Due from other funds 17,478 - - - 17,478 Inventories 10,748 - - - 10,748 Total assets 819,936$ 235,139$ 1,749$ 261$ 1,057,085$

LIABILITIES Accounts payable 22,791$ 18,037$ 14,881$ 2$ 55,711$ Accrued expenditures 16,435 1,123 - 17 17,575 Due to other funds - - 17,478 - 17,478 Due to component units 826 - 24,668 - 25,494 Other liabilities 27,547 850 21,404 - 49,801 Unearned revenue - other (Note 5) 104 126,202 - - 126,306 Total liabilities 67,703 146,212 78,431 19 292,365

DEFERRED INFLOWS OF RESOURCES Unavailable revenue (Note 5) 234,130 54,285 1,525 - 289,940

Total deferred inflows of resources 234,130 54,285 1,525 - 289,940

FUND BALANCES (DEFICITS) (NOTE 14) Nonspendable 10,748 - - - 10,748 Restricted 74,540 22,647 17,674 - 114,861 Assigned 95,747 11,995 - 242 107,984 Unassigned 337,068 - (95,881) - 241,187

Total fund balances (deficit) 518,103 34,642 (78,207) 242 474,780 Total liabilities,deferred inflows of

resources, and fund balances 819,936$ 235,139$ 1,749$ 261$

Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. 2,631,763 Other long-term assets are not available to pay for current-period

expenditures and, therefore, are deferred inflows in the funds. 289,940 Internal service funds are used by management to charge the costs of self insurance, fleet management

and reproduction to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 44,127

Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds (Note 2). (6,016,868)

The net effect of the deferred outflows and deferred inflows of resources recorded in conjunction with the recognition of the County pension liability and OPEB liability is shown in the governmental activites but not included in the governmental statements. 872,173

Net deficit of governmental actitivies (1,704,085)$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Balance Sheet

Governmental Funds June 30, 2020

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Consolidated Gifts Public Nonmajor Total and Improvement Governmental Governmental

General Grants Construction Funds Funds REVENUES Taxes 2,040,687$ -$ -$ 1,500$ 2,042,187$ Licenses and permits 5,548 - - 811 6,359 Intergovernmental 49,705 194,757 13,964 - 258,426 Repayment of loans - 1,181 - - 1,181 Charges for services 54,242 13,229 - 60 67,531 Assessments - - 1,329 - 1,329 Fines and forfeitures 5,101 - - - 5,101 Investment income 7,497 1,235 - - 8,732 Miscellaneous 32,215 1,525 22,339 - 56,079 Total revenues 2,194,995 211,927 37,632 2,371 2,446,925

EXPENDITURES Current: General government 120,218 3,903 - 2,210 126,331 Public safety 392,013 13,594 - - 405,607 Public works 124,003 37 - - 124,040 Health and human services 40,203 169,543 - - 209,746 Culture and leisure services 16,567 2,732 - - 19,299 Economic and community development 1,043 47,377 - - 48,420 Pension plan contributions 131,740 - - - 131,740

Healthcare contributions 86,225 - - - 86,225 Miscellaneous 19,711 229 - - 19,940 Capital projects - 92,201 - 92,201 Payments to component units 1,019,685 - 141,232 - 1,160,917 Debt service: Principal retirement 97,752 - - - 97,752

Interest 60,256 - - - 60,256 Fiscal charges 738 - - - 738

Total expenditures 2,110,154 237,415 233,433 2,210 2,583,212 Excess (deficiency) of revenues over expenditures 84,841 (25,488) (195,801) 161 (136,287)

OTHER FINANCING SOURCES (USES) Bonds issued - - 246,000 - 246,000 Bond anticipation notes issued - - 145,000 - 145,000 Payment to refunding escrow agents (63,000) - - - (63,000) Premiums on debt 64,919 - - - 64,919 Bond anticipation notes - retired - - (246,000) - (246,000) Transfers in 23,065 13,370 58,487 - 94,922 Transfers out (67,897) (1,120) (23,240) (450) (92,707)

Total other financing sources (uses) (42,913) 12,250 180,247 (450) 149,134

Net change in fund balances 41,928 (13,238) (15,554) (289) 12,847

Fund balances (deficit) at beginning of the year 476,175 47,880 (62,653) 531 461,933

Fund balances (deficit) at end of the year 518,103$ 34,642$ (78,207)$ 242$ 474,780$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds For the Year Ended June 30, 2020

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Net change in fund balances-total governmental funds 12,847$

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period (Note 2). 16,499

The net effect of various transactions involving capital assets (I.e., sales, trade-ins, and donations) is to increase net position (Note 2). 8,239

Some revenues will not be collected for several months after the fiscal year ends. As such these revenues are not considered "available" revenues and are deferred in the governmental funds. Deferred inflows increased this year. 72,858

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items (Note 2). (6,607)

Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds (Note 2). (144,048)

The net effect of the expenses for recording the County's pension liability from employee retirement plans. (168,469)

Internal service funds are used by management to charge the costs of self insurance, fleet management, and reproduction services to individual funds. The net income of these internal service funds is reported with governmental activities. 9,390

The payment of a long-term liability for police salaries that was not reported in the governmental funds increases net position. 7,333

Change in net position of governmental activities (191,958)$

The accompanying notes are an integral part of these financial statements.

(In Thousands) For the Year Ended June 30, 2020

Baltimore County, Maryland Reconciliation of the Statement of Revenues,

Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

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Variance with Actual Amounts Final Budget-

Original Final (Budgetary Basis) Positive (Negative) REVENUES Taxes 1,984,780$ 1,984,780$ 2,040,687 55,907$ Licenses and permits 5,482 5,482 5,548 66 Intergovernmental 53,081 53,081 49,705 (3,376) Charges for services 50,523 50,523 54,242 3,719 Fines and forfeitures 6,055 6,055 5,101 (954) Reimbursement from other funds 12,647 12,647 16,266 3,619 Interest on investments 10,461 10,461 8,156 (2,305) Miscellaneous 33,140 33,140 28,684 (4,456)

Total revenues 2,156,169 2,156,169 2,208,389 52,220

EXPENDITURES Current:

General government 137,052 138,452 129,075 9,377 Public safety 393,579 403,689 392,551 11,138 Public works 108,005 106,855 101,345 5,510 Health and human services 41,863 43,363 40,397 2,966 Culture and leisure services 17,482 18,322 16,810 1,512 Economic and community development 1,489 1,489 980 509 Pension plan contributions 131,747 131,747 131,740 7

Healthcare contributions 110,819 110,819 86,318 24,501 Miscellaneous 21,264 20,340 19,711 629

Payments to component units 1,002,081 1,002,907 1,002,861 46 Debt service:

Principal retirement 97,752 97,752 97,752 - Interest 42,005 42,005 42,001 4 Fiscal charges 105 105 55 50

Total expenditures 2,105,243 2,117,845 2,061,596 56,249 Excess (deficiency) of revenues over

expenditures (budgetary basis) 50,926 38,324 146,793 108,469

OTHER FINANCING SOURCES (USES) Transfers in 167 167 11,071 10,904 Transfers out (48,438) (47,661) (39,661) 8,000

Total other financing sources (uses) (48,271) (47,494) (28,590) 18,904 Excess (deficiency) of revenues and other

financing sources over expenditures and other financing uses (budgetary basis) 2,655$ (9,170)$ 118,203$ 127,373$

Adjustments required under generally accepted accounting principles: Net change during year in reserve for encumbrances 566 Unbudgeted equipment financing activity (35,702) Unbudgeted bond escrow payment (61,421) Net change in reserve for inventories, imprest funds

and other programs 19,524 Prior year encumbrances liquidations 758 Net change in fund balance-GAAP 41,928

Fund balance at beginning of the year 476,175 Fund balance at end of the year 518,103$

The accompanying notes are an integral part of these financial statements.

Budgeted Amounts

Baltimore County, Maryland Budgetary Comparison Statement - General Fund (Non GAAP Budgetary Basis)

For the Year Ended June 30, 2020 (In Thousands)

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Metropolitan District Internal

Enterprise Service Fund Funds

ASSETS Current assets: Cash and investments 197,274$ 104,095$ Cash and investments - restricted 7,674 - Receivables, net (Note 5) 16,708 2,512 Inventories 871 535

Prepaid costs - 1,135 Total current assets 222,527 108,277

Noncurrent assets: Assessments receivable (Note 5) 86,408 -

Capital assets: (Note 7) Non-depreciable 399,275 705 Depreciable (net of accumulated depreciation) 1,191,268 17,823 Total noncurrent assets 1,676,951 18,528 Total assets 1,899,478 126,805

DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 15,598 - Retirement and OPEB plans 46,435 -

Total deferred outflows of resources 62,033 -

LIABILITIES Current liabilities: Accounts payable 121,173 2,029

Accrued payroll 972 125 Accrued interest payable 23,513 - Compensated absences (Note 8) 2,282 262

Claims and judgments (Note 8) - 39,280 General obligation debt (Note 8) 263,846 - Pension funding bonds (Note 8) 419 - Certificates of participation (Note 8) 1,609 -

Other liabilities 6,203 - Total current liabilities 420,017 41,696

Noncurrent liabilities (Note 8): Compensated absences 126 -

Claims and judgments - 37,621 General obligation debt 1,669,089 -

Pension funding bonds 14,122 - Net pension and OPEB liability 142,014 -

Certificates of participation 12,531 - Total noncurrent liabilities 1,837,882 37,621 Total liabilities 2,257,899 79,317

DEFERRED INFLOWS OF RESOURCES Retirement and OPEB plans 4,137 -

Total deferred inflows of resources 4,137 -

NET POSITION Net investment in capital assets 461,286 18,528 Unrestricted (deficit) (761,811) 28,960 Total net position (deficit) (300,525) 47,488$

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 3,361

Net position (deficit) of business-type activities (297,164)$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Statement of Net Position

Proprietary Funds June 30, 2020

24

Metropolitan District Internal

Enterprise Service Fund Total Funds

OPERATING REVENUES Licenses and permits 796$ 796$ -$ Charges for services 298,283 298,283 348,072 Assessments 9,991 9,991 - Intergovernmental 1,836 1,836 - Miscellaneous 242 242 224 Total operating revenues 311,148 311,148 348,296

OPERATING EXPENSES Personal services 23,739 23,739 3,117 Business and travel 106 106 - Contractual services 80,912 80,912 660 Rents and utilities 4,954 4,954 195 Supplies and maintenance 67,865 67,865 9,888 Insurance claims and expenses - - 321,684 Equipment 57,018 57,018 - Fringe benefits and overhead 34,185 34,185 - Depreciation expense 34,283 34,283 3,155 Other 492 492 621 Total operating expenses 303,554 303,554 339,320 Operating income (loss) 7,594 7,594 8,976

NONOPERATING REVENUES (EXPENSES) Interest on investments 2,209 2,209 2,866 Interest expense (50,936) (50,936) - Capital contributions to other subdivisions (142,999) (142,999) - Total nonoperating revenues (expenses) (191,726) (191,726) 2,866 Income/(loss) before transfers and capital contributions (184,132) (184,132) 11,842 Capital contributions from external parties 70,091 70,091 - Transfers out - - (2,215) Change in net position (114,041) (114,041) 9,627 Net position at beginning of the year (186,484) 37,861 Net position at end of the year (300,525)$ 47,488$

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 237

Change in net position of business-type activities (113,804)$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Statement of Revenues, Expenses, and Changes in Net Position

Proprietary Funds For the Year Ended June 30, 2020

25

Metropolitan District Internal

Enterprise Service Fund Funds

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from external customers 313,812$ 259,867$ Receipts for interfund services - 88,046 Payments to suppliers (204,403) (10,710) Payments to employees (42,028) (3,105) Payment for interfund services used - (621) Claims paid - (315,576) Other receipts - 224 Net cash provided by (used in) operating activities 67,381 18,125

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers out (2,215) Capital contributions paid to other subdivisions (121,977) - Net cash used in noncapital financing activities (121,977) (2,215)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from capital debt 315,273 - Retirement of bond anticipation notes (42,000) - Capital contributions from external parties 63,837 - Acquisition and construction of capital assets (97,400) (6,957) Principal paid on capital debt (61,165) - Interest paid on capital debt (62,495) - Sales of capital assets - 194 Net cash provided by (used in) capital and related financing activities 116,050 (6,763)

CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 2,209 2,866 Net cash provided by investing activities 2,209 2,866 Net increase (decrease) in cash and cash equivalents 63,663 12,013 Cash and cash equivalents at beginning of the year 141,285 92,082 Cash and cash equivalents at end of the year 204,948$ 104,095$

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Operating income (loss) 7,594$ 8,976$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 34,283 3,155 Effect of changes in operating accounts

Receivables, net 3,534 (159) Inventories (47) 52 Deferred outflows (18,285) - Accounts and other payables 6,015 (332) Accrued expenses 34,287 12 Claims and judgements - 6,421

Net cash provided by (used in) operating activities 67,381$ 18,125$

NONCASH CAPITAL AND NONCAPITAL FINANCING ACTIVITIES Capital assets acquired through contributions from developers. 4,637$ -$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Statement of Cash Flows

Proprietary Funds For the Year Ended June 30, 2020

26

Benefits Trust Funds

ASSETS Cash and cash equivalents (Note 3) 63,776$ Collateral for loaned securities (Note 3) 15,119 Receivables:

Accrued interest & dividend income 3,617 Receivable for investments sold 18,831 Receivables other 2,655

Total receivables 25,103 Investments, at fair value (Note 3):

U.S. Government and Agency securities 66,584 Municipal bonds 4,409 Foreign bonds 42,384 Corporate bonds 212,159 Stocks 525,906 Bond mutual funds 459,101 Stock mutual funds 954,215 Real estate equity funds 161,592 Hedge funds 9 Private equity funds 204,434 Global asset allocation 284,221

Total investments 2,915,014 Total assets 3,019,012

LIABILITIES Securities lending payable 15,119 Investments purchased 35,218 Investment expenses payable 4,681 Refunds payable 4,824 Other 5,239 Total liabilities 65,081

NET POSITION Net position restricted for pensions and OPEB 2,953,931$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Statement of Fiduciary Net Position

Fiduciary Funds June 30, 2020

27

Benefits Trust Funds

ADDITIONS Contributions:

Employer 180,040$ Employees 89,114 Other 26,700

Total contributions 295,854

Investment earnings: Net increase in the fair value of plan assets (9,952) Interest and dividends 39,838 Investment expenses (22,684)

Net investment gain 7,202 Net income from securities lending:

Securities lending income 179 Borrower rebates 38 Agent fees (53)

Net income from securities lending 164 Total net investment gain 7,366

Total additions 303,220

DEDUCTIONS Benefits 449,044 Refunds 7,490 Administrative expense 1,382

Total deductions 457,916 Change in net position (154,696) Net position at beginning of the year 3,108,627 Net position at end of the year 2,953,931$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Statement of Changes in Fiduciary Net Position

Fiduciary Funds For the Year Ended June 30, 2020

28

Board of Board of Community Library

Education College Trustees Total ASSETS Cash and investments (Note 3) 143,959$ 33,602$ 11,556$ 189,117$ Receivables 42,474 11,810 210 54,494 Due from primary government 27,467 3,213 121 30,801 Inventories 2,404 - 82 2,486 Prepaid costs and other assets 353 191 5 549 Cash restricted for lease purchase 8,586 - - 8,586 Capital assets (Note 7)

Non-depreciable 292,073 66,468 - 358,541 Depreciable (net of accumulated depreciation) 1,725,799 145,226 6,694 1,877,719

Total assets 2,243,115 260,510 18,668 2,522,293

DEFERRED OUTFLOWS OF RESOURCES Retirement and OPEB plans 958,130 74,224 17,620 1,049,974

LIABILITIES Accounts payable 50,456 18,383 1,247 70,086 Accrued payroll 32,893 3,537 1,955 38,385 Other liabilities 2,596 2,132 - 4,728 Unearned revenue 4,292 3,850 14 8,156 Liabilities payable from restricted assets 8,586 - - 8,586 Noncurrent liabilities (Note 8)

Due within one year 24,389 7,578 1,318 33,285 Due in more than one year 2,304,798 171,560 38,993 2,515,351

Total liabilities 2,428,010 207,040 43,527 2,678,577

DEFERRED INFLOWS OF RESOURCES Retirement and OPEB plans 15,168 5,994 1,938 23,100

NET POSITION Net investment in capital assets 1,907,406 209,559 6,693 2,123,658 Restricted for: Education 10,565 15,700 571 26,836 Unrestricted (1,159,904) (103,559) (16,441) (1,279,904)

Total net position 758,067$ 121,700$ (9,177)$ 870,590$

The accompanying notes are an integral part of these financial statements.

(In Thousands)

Baltimore County, Maryland Statement of Net Position

Component Units June 30, 2020

29

Operating Capital Board of Charges for Grants and Grants and Board of Community Library

Expenses Services Contributions Contributions Education College Trustees Total BOARD OF EDUCATION Public education 1,879,909$ 228$ 191,907$ 129,228$ (1,558,546)$ -$ -$ (1,558,546)$ Facilities operations 200,137 1,369 - (198,768) - - (198,768) Food service 45,272 8,807 32,644 - (3,821) - - (3,821)

Total Board of Education 2,125,318 9,035 225,920 129,228 (1,761,135) - - (1,761,135) COMMUNITY COLLEGE Educational and general expenses 205,857 62,601 89,863 - - (53,393) - (53,393) Facilities operations 29,594 - - 33,454 - 3,860 - 3,860 Auxiliary enterprises 615 956 - - - 341 - 341

Total Community College 236,066 63,557 89,863 33,454 - (49,192) - (49,192) BOARD OF LIBRARY TRUSTEES Culture and leisure services 48,138 8,276 3,288 - - - (36,574) (36,574)

Total component units 2,409,522$ 80,868$ 319,071$ 162,682$ (1,761,135) (49,192) (36,574) (1,846,901)

General Revenues: Baltimore County 851,563 54,734 35,026 941,323 State of Maryland 732,089 - - 732,089 Unrestricted investment earnings - 398 - 398 Other 7,922 - - 7,922 Reversion of fund balance to Baltimore County - - -

Total general revenues 1,591,574 55,132 35,026 1,681,732 Change in net position (169,561) 5,940 (1,548) (165,169)

Net position at beginning of the year 927,628 115,760 (7,629) 1,035,759 Net position at end of the year 758,067$ 121,700$ (9,177)$ 870,590$

The accompanying notes are an integral part of these financial statements.

Program Revenues Net (Expense) Revenue

and Changes in Net Position

Baltimore County, Maryland Statement of Activities

Component Units For the Year Ended June 30, 2020

(In Thousands)

30

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The accounting and reporting policies of the County conform in all material respects to generally accepted accounting principles as applicable to governmental entities in the United States (GAAP). The following is a summary of significant policies. Financial Reporting Entity Baltimore County, Maryland (the "County") is a corporate polity, performing all local governmental functions within its jurisdiction. Under home rule charter since 1957, the County is governed by an elected County Executive and a seven-member County Council, with each serving executive and legislative functions, respectively.

In accordance with GAAP, the accompanying financial statements include the various departments and agencies governed by the County Executive and County Council (the primary government) and the County's component units. Discretely presented component units are reported separately from the primary government to emphasize that they are legally separate from the County. The component units are included as part of the County's reporting entity because of the significance of their operational or financial relationships with the County. The component units are fiscally dependent on the County because the County approves budget requests providing a significant amount of funding for each of these units, levies taxes to provide the majority of their fiscal support, and issues debt for construction of their capital facilities. Discretely Presented Component Units The discretely presented component units are all governed by individual boards. The Board of Education of Baltimore County and the Board of Trustees of the Community College of Baltimore County are appointed by the Governor of Maryland. The Board of Library Trustees is appointed by the County Executive. A brief description of the component units follows.

1. The Board of Education of Baltimore County operates all public schools (grades K through 12) within the County.

2. The Board of Library Trustees operates all public libraries within the County. 3. The Board of Trustees of the Community College of Baltimore County operates a two-year college program

at three campuses: Catonsville, Dundalk and Essex. Annual financial reports can be obtained from the respective administrative offices listed below:

Baltimore County Public Schools Community College of Baltimore County Department of Fiscal Services Office of Finance 6901 N. Charles St. 7200 Sollers Point Road Towson, Maryland 21204 Baltimore, Maryland 21222

Board of Library Trustees 320 York Road Towson, Maryland 21204

Related Organizations

The County Executive is also responsible for appointing the members of numerous boards, but the County's accountability for these organizations does not extend beyond making appointments. These boards include:

Adult Public Guardianship Review Board Advisory Commission on Environmental Quality Advisory Arbitration Panel Agricultural Land Preservation Advisory Board

Animal Hearing Board Board of Appeals Board of Architectural Review Board of Health Board of Liquor License Commissioners Board of Recreation and Parks

31

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Board of Social Services Child Protection Panel Commission for Women Commission on Aging Commission on Arts and Sciences Commission on Disabilities Commission on Veterans’ Affairs Conference and Tourism Advisory Council Criminal Justice Coordinating Council Design Review Panel Drug and Alcohol Abuse Advisory Council Electrical Administrative Board

Ethics Commission Ethnic Diversity Advisory Council Human Relations Commission Landmarks Preservation Commission

Library Board of Trustees Local Management Board Mental Health Advisory Council Minority and Women Business

Pedestrian and Bicycle Advisory Committee Enterprise Commission Personnel and Salary Advisory Board Planning Board

Plumbing Board Professional Services Selection Committee Revenue Authority Soil Conservation District Board Workforce Development Council

The amounts that the County appropriated to these organizations during the fiscal year ended June 30, 2020 were immaterial to the basic financial statements taken as a whole. Government-Wide and Fund Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and deferrals and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Government-Wide Financial Statements The statement of net position and statement of activities report information on all non-fiduciary activities of the primary government and its component units. Primary government activities are distinguished between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Interfund activity within the governmental activities and within the business-type activities have been eliminated/and or reclassified from these statements. The Statement of Net Position presents the reporting entity’s non-fiduciary assets, liabilities and deferred inflows/outflows of resources, with the difference reported as net position. Net position is reported in three categories: Net investment in capital assets, consists of capital assets, net of accumulated depreciation and reduced by outstanding balances for bonds, notes, and other debt that are attributed to the acquisition, construction, or improvement of those assets.

Restricted net position results when constraints placed on net position use are either externally imposed by law through constitutional provisions or enabling legislation.

Unrestricted net position consists of net position which does not meet the definition of the two preceding categories. Unrestricted net position often is assigned to indicate that management does not consider it to be available for general operations. Unrestricted net position often has constraints on resources which are imposed by management, but can be removed or modified.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function.

32

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not meeting the definition of program revenues are reported as general revenue. Fund Financial Statements Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental funds, major individual proprietary funds and three combined nonmajor governmental (Liquor License, Owings Mills Tax District and Stormwater Management) funds are reported as separate columns in the fund financial statements. The County reports the following major governmental funds: The General Fund is the County’s general operating fund. It is used to account for all financial resources except those required to be accounted for in another fund. The Gifts and Grants Fund accounts for a number of gifts and grants awarded to the County that are not accounted for in another fund. The Consolidated Public Improvement Construction Fund accounts for the acquisition or construction and related financing sources for capital facilities of the primary government and for capital contributions made to the County’s component units for their capital facilities. The County reports the following major enterprise fund:

The Metropolitan District Fund accounts for the operation of the Metropolitan District, which provides water supply and sewerage systems to County residents within the District. The County also reports the following fund types: Internal Service Funds account for the operation of a motor pool of passenger vehicles and light duty trucks, a printing facility and a self-insurance program for workers’ compensation; general and auto liability insurance; and employee health insurance. Benefits Trust Funds, which include the following: Pension Trust Funds account for the accumulation of assets to be used for pension benefit payments to qualified employees. Other Post-Employment Benefits Trust Fund accounts for the accumulation of assets to be used for healthcare and life insurance benefit payments to qualified employees. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds and fiduciary funds financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. The governmental funds financial statements are reported using the modified accrual basis of accounting. The measurement focus of these funds is the determination of financial position and changes in financial position ("current financial resources" focus). Under the modified accrual basis of accounting, revenues are recorded when

33

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

they are both measurable and available. "Measurable" means the amount of the transaction can be determined and “available” means collectable within the current period or soon thereafter to pay liabilities of the current period. The County considers sales and income taxes, interest income and various intergovernmental revenues available if they are collected within 60 days after year-end. Property tax revenue is recognized on receipts within 30 days of year-end. Revenue related to expenditure driven grants is recognized when the applicable eligibility requirements have been met and to the extent that cash is expected to be received within one year of year-end. Licenses and permits, charges for services, fines and forfeitures, and miscellaneous revenues are recorded when received in cash because they are generally not measurable until actually received. Expenditures, other than principal and interest on long-term debt and compensated absences as described below, are recorded when the liability is incurred. Principal and interest on general long-term debt are recorded in the governmental funds as liabilities when due. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of Enterprise and Internal Service Funds are charges to customers for sales and services. Operating expenses for Enterprise and Internal Service Funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. Revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses The pension trust funds and the other postemployment benefit trust fund use the accrual basis of accounting. Member contributions are recognized in the period when due. Employer contributions are recognized when due and a formal contribution commitment has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investment purchases and sales are recorded on a trade-date basis. These transactions are not finalized until settlement date, which occurs approximately three business days after the trade date. The County reports unearned revenue in the government-wide, governmental funds and proprietary fund financial statements when cash is received prior to being earned. Deferred inflows are recognized in the governmental fund statements when revenue is unavailable.

Budgetary Data As required by Article VII of the Baltimore County Charter, the annual operating budget and the capital budget are prepared by the County Executive and submitted to the County Council for adoption. Such budgets are generally prepared on the modified accrual basis of accounting described above and reflect encumbrance accounting. Prior to adoption of the budgets, the County Council may decrease or delete any item with the exception of those required by the general laws of the State of Maryland, provisions for debt service on outstanding obligations and provisions to eliminate any estimated cash deficits. Requests for supplementary and emergency appropriations may be prepared during the year by the County Executive and adopted by the County Council. There were $11.825 million in supplementary and emergency appropriations adopted for the General Fund operating budget during fiscal year 2020. Annual budgets are adopted for the General Fund and the nonmajor Special Revenue Funds - Liquor License Fund. The nonmajor Special Revenue Funds – Owings Mills Tax District Fund and the Stormwater Management Fund had no adopted budget. All other governmental funds have an adopted project-length budget. The operating budget reflects appropriations for the General Fund and the Special Revenue Funds on a function/agency/program basis. Expenditures and encumbrances of such funds may not legally exceed appropriations at the program level. Inter- program transfers of no more than ten percent of appropriations may be authorized by the County Administrative Officer. Inter-program transfers in excess of ten percent of appropriations require the approval of the County Executive and the County Council. Inter-agency transfers between County offices, departments or agencies may be made during the last quarter of the fiscal year only on the recommendation of the County Executive with the approval of the County Council. All unencumbered appropriations of annual budgets lapse at the end of the fiscal year.

34

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

The County presents its General Fund budgetary comparison statement as part of the basic financial statements. Unbudgeted equipment financing activity in the General Fund comparison consists $1.474 million of interest income, and decreased by $37.176 million of equipment purchases. The unspent equipment financing proceeds of $68.589 million are reported as a restriction of fund balance at fiscal year-end. The capital budget reflects appropriations for the Consolidated Public Improvement Construction Fund at the individual project level. Expenditures and encumbrances may not legally exceed appropriations at that level and unencumbered appropriations lapse at the completion or abandonment of individual projects. Transfers of appropriations between projects must be approved by the County Executive and the County Council. Pooled Cash, Cash Equivalents and Investment Income The County maintains a cash and investment income pool for all funds except for the fiduciary funds. Based on the availability of cash in various funds, marketable securities are purchased and income on investments is credited to the General, Metropolitan District, and Self-Insurance Program Funds. For purposes of the statements of cash flows, the County defines cash equivalents to include the following: all highly liquid, unrestricted investments with a maturity of three months or less when purchased; all cash and investment pools that are used essentially as demand accounts; all cash with fiscal agents; and all restricted cash and investments that have been determined to be cash equivalents. Debt Retirement Debt retirements for general obligation long-term debt, net pension liability and the net liability for Other Post Employee Benefits (OPEB) are paid from the General and Metropolitan District Funds. Other long-term obligations of the County include compensated absences, general and workers compensation claims and landfill closing costs, the liquidation procedures for these liabilities are described below. The Metropolitan District Fund includes $71.3 million of receivables for future billings of assessments for water and sewer lateral pipe abutting properties within the District. These assessments, which are levied on individual properties for a period of forty years from the date of installation, represent a significant cash stream that is designated to retire the Metropolitan District long-term debt.

Investments Money market investments and participating interest-earning investment contracts are carried at amortized cost, which approximates fair value. Other investment securities are carried at fair value. Securities traded on national or international exchanges are valued at the last reported sales price at the prevailing exchange rates as of June 30, 2020. The fair value of mutual funds is based on the fair values of the underlying securities. The fair value of real estate equity funds is based on independent appraisals. Private equity funds and hedge funds are valued based on information provided by the respective fund managers. Inventories Inventories are valued at cost. They are accounted for using the purchases method in the General Fund. Under the purchases method, inventories are recorded as expenditures when purchased; however, material amounts of inventories are reported as assets. Non-spendable fund balance for the amount of General Fund inventories has been reported in the governmental fund statements to reflect the non-availability of those amounts for appropriation or expenditure. Capital Assets Capital assets of governmental funds are recorded in the statement of net position at historical cost or at estimated historical cost if actual historical cost is not available. Donated capital assets are recorded at the acquisition value at the date of donation. The County’s capitalization levels are $5,000 for individual vehicles, machinery and

35

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

equipment, and $25,000 for buildings and infrastructure. The costs of normal maintenance and repairs that do not add value to the asset or materially extend the asset’s life are not capitalized. An allowance for depreciation has been provided using the straight-line method over the estimated useful life. The estimated useful lives range from two to fifteen years for vehicles, machinery and equipment, twenty to fifty years for buildings, and twenty to seventy- five years for infrastructure. Major outlays for the construction of buildings and infrastructure are capitalized as constructed. Deferred Outflows/Inflows of Resources A deferred outflow of resources represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense) until the future period. At June 30, 2020, the County had deferred outflows of resources for deferred charges on bond refundings and for changes in activity, experience, assumptions and contributions related to the County Employees Retirement System and for the differences between projected and actual experience and assumptions in addition to differences in projected and actual earnings on investments related to the County’s Other Post-Employment Benefits (OPEB) plan. A deferred inflow of resources represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. At June 30, 2020, the County had deferred inflows of resources related to the difference between actual and expected experience, changes in proportion and the difference between projected and actual earnings on investments of the County pensions and OPEB plans. Outstanding Claims The outstanding claims liability includes estimates for all known workers' compensation, personal injury, property damage and health claims and an estimate for claims incurred but not reported at June 30, 2020. Compensated Absences County employees are granted vacation, personal, and sick leave in varying amounts. In the event of termination, an employee is reimbursed for accumulated vacation and personal leave days up to a certain maximum depending on employment classification. Employees are not reimbursed for accumulated sick leave. Payments made to terminated employees for accumulated leave are charged as expenditures/expenses, primarily in the General Fund, Special Revenue Funds, and Proprietary Funds, when paid. Accumulated vacation, personal leave and compensatory time benefits at year-end are recorded as obligations in the statement of net position and proprietary fund statements. Restricted Net Position The government-wide statement of net position reports $46,272 million of restricted net position, of which $17,674 million is restricted by enabling legislation. Governmental Funds’ Fund Balance Fund balance classifications comprise a hierarchy based primarily on the extent to which the County is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Fund balance amounts are properly reported within one of the fund balance categories listed below:

Non-spendable – Includes fund balance amounts that cannot be spent because they are either (1) not in spendable form or (2) legally or contractually required to be maintained intact, such as a permanent fund. Not in spendable form includes items that are not expected to be converted to cash, such as inventories and prepaid items. Restricted – Includes amounts that are restricted to a specific purpose when constraints are placed on the use of resources by constitution, external resource providers, or through enabling legislation.

36

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Committed – Includes fund balance amounts that can be used only for the specific purposes determined by formal action of the County’s highest level of decision-making authority. The County Council is the highest level of decision-making authority for the County that can commit fund balance by adoption of a Council bill prior to fiscal year end. Similar action of the County Council is required to modify or rescind such commitments. Assigned – Includes fund balance amounts that are intended to be used by the County for specific purposes as determined by the County Executive or County Administrative Officer in accordance with County Charter. Additionally, in accordance with Section 715 of the County Charter on certification of funds availability, the Director of Budget & Finance may assign fund balance for contractual commitments encumbered prior to year-end. Constraints imposed on the use of assigned amounts do not rise to the level required to be classified as either restricted or committed. Unassigned – Represents the residual classification for the County’s funds and includes all spendable amounts not contained in the four classifications described above. Unassigned fund balance can only be used in the General fund or, if negative, in other governmental funds.

Order of Fund Balance Spending Policy The County has established a fund balance spending policy for those instances where an expenditure is incurred for a purpose for which amounts in any of the restricted or unrestricted fund balance classifications (committed, assigned, or unassigned) could be used. The County will apply expenditures against restricted amounts first, followed by the committed, assigned and unassigned amounts. Amounts reported as encumbrances may be classified as either restricted, committed or assigned depending on the constraints and approval in place at year end. Encumbrances outstanding at year-end are reported as assignments of fund balance in the General Fund and Special Revenue Funds and do not constitute expenditures or liabilities because the obligation will be honored during the subsequent year. Revenue Stabilization Account Section 10-8-101 of the County Code gives the County the authority to establish and maintain a Revenue Stabilization Reserve Account (RSRA) to provide financial resources for unanticipated decreases in revenues, primarily intergovernmental revenues. The County plans to maintain unreserved General Fund balances in excess of 10% of General Fund’s revenues each year. Effective FY18, the County established a minimum level of reserves in the RSRA equal to 7% of the budgeted general fund revenue for the current fiscal year. Funds in the RSRA may not remain 7% for more than two consecutive years. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions and pension expense, information about the fiduciary net position of the County’s pension plans (Employees’ Retirement System Plan and Police, Fire and Widows’ Pension Plan) and additions to/deductions from their respective fiduciary net position have been determined on the same basis as they are reported by each pension plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Postemployment Benefits Other than Pensions (OPEB) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the County’s OPEB Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are

37

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

reported by the County’s OPEB Plan. For this purpose, the County’s OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost. 2. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (expressed in thousands): Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net position. The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. One element of the reconciliation explains that “Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.” The details of this $6,016,868 difference are as follows:

2,127,419$ 149,997 178,819

(920) (12,009) 32,821 80,281

1,611,211 Net pension liability 1,774,994 Disputed taxes 52,285

21,970

6,016,868$

General obligation debt Certificates of participation and loan payable Add: Issuance premium (to be amortized as a reduction to interest) Less: Issuance discount (to be amortized as interest expense) Less: Deferred charge on refunding (to be amortized as interest expense) Accrued interest payable Compensated absences Net other post employment benefits liability

Estimated landfill closing costs Net adjustment to reduce fund balance - total funds to arrive at net position of governmental activities

Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities. The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of the reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $16,499 difference are as follows:

Capital outlay 103,080$ Depreciation expense (86,581)

Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities 16,499$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Another element of the reconciliation states that “The net effect of various transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net position.” The details of this $8,239 difference are as follows:

of the capital assets sold. (341)$

8,580

8,239$

Donations and transfers in of capital assets increase net position in the statement of activities, but do not appear in the governmental funds because

In the statement of activities, only the gain/(loss) on the sale or disposal of capital assets is reported. However, in the governmental funds, the

net position differs from the change in fund balance by the net book value proceeds from the sale increases financial resources. Thus, the change in

they are not financial resources.

Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities.

Another element of the reconciliation states that “The issuance of long-term debt (e.g., bonds, certificates of participation) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.” The details of this $6,607 difference are as follows:

Debt issued or incurred:

General obligation debt (391,000)$

Add: premium (64,919) Principal repayments:

General obligation debt 363,171

Payment to bond escrow agent for refundings 63,000

Certificates of participation and loans 23,141 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities (6,607)$

39

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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Another element of the reconciliation states that “Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.” The details of this $144,048 difference are as follows:

(7,238)$ (308)

(165,446) (447)

Amortization of deferred charge on refunding (1,894) 31,425

(140)

(144,048)$

Increase in compensated absences

Amortization of premiums

governmental funds to arrive at changes in net position of governmental activities

Amortization of discounts

Net adjustment to decrease net changes in fund balances - total

Increase in accrued interest Increase in net other post employment benefits liability Increase in landfill closure and post-closure costs

3. CASH, INVESTMENTS AND SECURITIES LENDING: The County maintains a cash and investment pool that is available for use by all funds, except for the fiduciary funds. Each fund’s portion of this pool is reported on the statement of net position as “Cash and investments.” The fiduciary funds investments are held and managed separately from those of other County funds. Deposits The County maintains cash balances, which are covered by FDIC insurance and collateral held at the Federal Reserve in the County’s name. The component units’ cash in banks are covered either by FDIC insurance or the County’s blanket collateral coverage. At June 30, 2020, the carrying amounts of cash for the primary government and its component units were $(5,234) million and $136.920 million respectively. Investments Internal Investment Pool (the “Pool”) - The County has adopted an investment policy to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the cash flow demands of the County and conforming to all state and local statutes governing the investment of public funds. Permissible investments include U.S. Government obligations, U.S. Government agency obligations, money market mutual funds, repurchase agreements, banker’s acceptances, commercial paper (no more than 10% of the portfolio) and the Maryland Local Government Investment Pool (MLGIP) that is administered by the State Treasurer. Repurchase agreements are collateralized according to Maryland State Investment Code and marked to market daily. The MLGIP was established under the Annotated Code of Maryland and is rated AAAm by Standard and Poors, their highest rating for money market funds. MLGIP is a 2a7 like pool, which is not registered with the Securities and Exchange Commission (SEC), but generally operates in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940 (Rule 2a7). Unit value is computed using the amortized cost method and maintains a $1 per share value. Pension Trust Funds and Other Post Employment Benefits (“OPEB Plan”) – As provided in Article 5, Title 1 and § 10-14-106 of the Baltimore County Code, the Board of Trustees of the Employees’ Retirement System (the “System”) is empowered to invest the System’s and the OPEB Plan’s assets jointly and to take appropriate action regarding the investment, management and custodianship of the System’s and the OPEB Plan’s assets. The System’s and the OPEB Plan’s investment policy targets 28% in U.S. equities, 21% in international equities, 27% in core-plus fixed income investments, 5% in real estate equity, 9% in private equities and 10% in Global Asset

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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Allocation Funds. Certain System and the OPEB Plan’s investment managers have invested in the following types of instruments: asset backed securities, warrants, variable rate securities and interest rate swaps, U.S. Treasury interest and principal strips, U.S. Treasury futures and options, and collateralized mortgage obligations. The System’s and the OPEB Plan’s fixed income managers primarily acquire these types of instruments to increase investment yield and/or decrease investment risk. The Police, Fire and Widows’ Pension Plan (the "Pension Plan") invests 73.5% in fixed income securities and 26.5% in equities. Investments for the primary government as of June 30, 2020 are as follows (in thousands):

Component units’ investments of $60.782 million include $39.264 million of MLGIP and $21.518 million of money market funds. Securities Lending Transactions - The System’s, the OPEB Plan’s and the Pension Plan’s policies authorize the lending of their securities to broker-dealers and other entities with a simultaneous agreement to return the collateral for the same securities in the future. The System’s, the OPEB Plan’s and the Pension Plan’s custodian may lend U.S. government and agency securities, corporate bonds and stocks for collateral in the form of cash, other securities and irrevocable bank letters of credit. Collateral securities, letters of credit and cash are initially pledged at 102% of the fair value of the securities lent. Additional collateral is to be provided by the next business day if the collateral value falls to less than 100% of the fair value of the securities lent. The System, the OPEB Plan and the Pension Plan did not impose any restrictions during the fiscal year on security loans the custodian made on its behalf. The System, the OPEB Plan and the Pension Plan at year-end had no credit risk exposure to borrowers because the amounts owed to borrowers exceed the amounts the borrowers owe. The System, the OPEB Plan,

The Pool Plan A Plan B OPEB Plan Pension

Plan Total Primary Government

U.S. securities and agencies

Not on securities loan 5,951$ 57,154$ 2,990$ 5,248$ -$ 71,343$

On securities loan for

securities or cash collateral - 1,042 54 96 - 1,192

MLGIP 816,316 - - - - 816,316

Municipal bonds - 30 1 3 4,375 4,409

Foreign bonds - 32,075 1,678 2,945 5,686 42,384

Corporate bonds

Not on securities loan - 180,000 9,416 16,529 - 205,945

On securities loan for

securities or cash collateral - 5,431 284 499 - 6,214

Bond mututal funds - 401,264 20,990 36,847 - 459,101

Money market funds 76,793 49,869 2,609 4,579 5 133,855

Real estate equity funds - 141,235 7,388 12,969 - 161,592

Stocks

Not on securities loan - 409,488 21,420 37,602 - 468,510

On securities loan for

securities or cash collateral - 50,165 2,624 4,607 - 57,396

Stock mutual funds - domestic - 451,705 23,629 41,479 2,077 518,890

Stock mutual funds - international - 379,119 19,831 34,814 1,561 435,325

Hedge funds - 7 1 1 - 9

Private equity funds - 178,680 9,346 16,408 - 204,434

Global Asset Allocation fund - 248,415 12,995 22,811 - 284,221

Securities lending short-term

collateral investment pool - 13,215 691 1,213 - 15,119

Total 899,060$ 2,598,894$ 135,947$ 238,650$ 13,704$ 3,886,255$

The System

Primary Government Investments

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

the Pension Plan or the borrower can terminate securities loans on demand. Cash collateral is invested in the lending agent’s short-term investment pool, which at year-end had a weighted average maturity of 1.34 days. The System, the OPEB Plan and the Pension Plan cannot pledge or sell collateral securities received unless the borrower defaults. The collateral held and the fair value of securities on loan as of June 30, 2020 totaled $66.6 million and $64.8 million, respectively. The following is a listing of the Pool’s, the OPEB Plan’s and the Pension Trust Funds’ fixed income investments of bonds, short-term investments and related maturity schedule (in thousands):

Investment Maturities (in years)

Investment Type Fair Value Less than 1 1 - 4.9 5 - 9.9 10 - 19.9 20 - 30 More than 30

The Pool

U.S. Government Obligations 899,060$ 893,109$ -$ 5,951$ -$ -$ -$

The System - Plan A

U.S. Government Obligations 8,601 564 311 1,126 1,011 5,589 -

U.S. Agency Securities 49,595 31,686 2,688 4,852 1,993 7,844 532

Municipals 30 - - - - 30 -

Corporate Debt 185,431 18,416 81,733 51,935 13,326 14,829 5,192

Bond Mutual Funds 401,264 - 83,080 318,184 - - -

Foreign Debt 32,075 12,800 12,331 4,452 1,618 778 96

Total 676,996 63,466 180,143 380,549 17,948 29,070 5,820

The System - Plan B

U.S. Government Obligations 450 30 16 59 53 292 -

U.S. Agency Securities 2,594 1,657 141 254 104 410 28

Municipals 1 - - - - 1 -

Corporate Debt 9,700 963 4,275 2,717 697 776 272

Bond Mutual Funds 20,990 - 4,346 16,644 - - -

Foreign Debt 1,678 670 645 232 85 41 5

Total 35,413 3,320 9,423 19,906 939 1,520 305

OPEB Plan

U.S. Government Obligations 790 52 29 103 93 513 -

U.S. Agency Securities 4,554 2,910 247 446 183 720 48

Municipals 3 - - - - 3 -

Corporate Debt 17,028 1,691 7,505 4,769 1,224 1,362 477

Bond Mutual Funds 36,847 - 7,629 29,218 - - -

Foreign Debt 2,945 1,175 1,132 409 149 71 9

Total 62,167 5,828 16,542 34,945 1,649 2,669 534

Pension Plan

Municipal bonds 4,375 4,375 - - - - -

Foreign Debt 5,686 1,000 1,500 - - 3,186 -

Total 10,061 5,375 1,500 - - 3,186 -

Total Primary Government 1,683,697$ 971,098$ 207,608$ 441,351$ 20,536$ 36,445$ 6,659$

Interest Rate Risk – To the extent possible, the Pool attempts to match investments with anticipated cash flow requirements. Unless matched to specific cash flow, the Pool will not directly invest in securities maturing more than one year from the date of purchase. The Pension Trust Funds’ and the OPEB Plan’s policy guidelines do not address limits on investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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Credit Risk – The Pool’s, the Pension Trust Funds’ and the OPEB Plan’s investment policies are to apply the prudent-person rule; investments are made as a prudent person would be expected to act with discretion and intelligence, to seek reasonable income, preserve capital and in general, avoid speculative investments. As of June 30, 2020, the Pension Trust Funds’ and the OPEB Plan’s fixed income investments had the following risk characteristics:

The System - Plan A The System - Plan B OPEB Plan Pension Plan

Moody's Rating or

Comparible

Percent of Total

Investments

Fair Value (in

thousands)

Percent of Total

Investments Fair Value (in thousands)

Percent of Total

Investments Fair Value (in thousands)

Percent of Total

Investments

Fair Value (in

thousands)

AAA 11.1% 74,809$ 11.1% 3,913$ 11.1% 6,869$ 0.0% -$

AA 2.7% 18,532 2.7% 969 2.7% 1,702 0.0% -

A 14.1% 95,702 14.1% 5,006 14.1% 8,788 0.0% -

BBB 8.8% 59,716 8.8% 3,124 8.8% 5,484 0.0% -

BB 1.2% 7,846 1.2% 410 1.2% 720 0.0% -

B 0.2% 1,101 0.2% 58 0.2% 101 0.0% -

CCC 0.0% 240 0.0% 13 0.0% 22 0.0% -

CC 0.0% 204 0.0% 10 0.0% 19 0.0% -

Not Rated 61.9% 418,846 61.9% 21,910 61.9% 38,462 100.0% 10,061

Total 100.0% 676,996$ 100.0% 35,413$ 100.0% 62,167$ 100.0% 10,061$

The Pool’s fixed income investments of $899,060 were invested 100% in AAA rated investments. Foreign Currency Risk – The System’s and the OPEB Plan’s exposure to foreign currency risk is derived from its positions in foreign currency-denominated common stock and fixed asset investments. Managers are allowed to use derivatives to hedge out foreign currency, however, there is no formal policy regarding foreign currency risk. The System’s and the OPEB Plan’s exposure to foreign currency risk is as follows:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Currency Plan A Plan B OPEB Plan Total Australian Dollar 5,122$ 268$ 470$ 5,860$ Brazil Real 482 25 44 551 Canadian Dollar 1,891 99 174 2,164 Chinese Yuan Renminbi 13 1 1 15 Danish Krone 1,228 64 113 1,405 Euro Currency Unit 67,056 3,508 6,158 76,722 Hong Kong Dollar 14,715 770 1,772 17,257 Israeli Shekel 456 23 50 529 Japanese Yen 40,337 2,110 3,704 46,151 Mexican Peso 162 8 15 185 New Taiwan Dollar 510 27 47 584 New Zealand Dollar 314 16 29 359 Norwegian Krone 1,246 65 114 1,425 Polish Zloty 443 23 41 507 Pound Sterling 21,101 1,104 1,938 24,143 Singapore Dollar 3,585 187 329 4,101 South African Rand 431 23 40 494 South Korean Won 5,508 288 506 6,302 Swedish Krona 9,465 495 869 10,829 Swiss Franc 12,365 647 1,135 14,147

186,430$ 9,751$ 17,549$ 213,730$

Fair Value (in thousands) The System

Derivative Policy: As permitted by guidelines established by the Board of Trustees the System may invest in Derivatives.

A derivative is a security or contractual agreement, which derives its value from some underlying security, commodity, currency, or index.

1. Types of derivative contracts

a. Forward-based derivatives, including forward contracts, futures contracts, swaps, and similar instruments, and

b. Option-based derivatives, including put options, call options, interest rate caps and floors, and similar instruments.

2. Types of Derivative Securities

a. Collateralized Mortgage Obligations (CMOs)

b. Structured Notes

3. Domestic Debt Securities are permitted and may include U.S. Government and Agency

obligations, corporate bonds, asset backed securities, agency guaranteed mortgage pass- through securities and low risk collateralized mortgage obligations of comparable or lower risk, such as Planned Amortizations Class Level 1 and Sequentials, commercial paper, and certificates of deposit. Managers may also invest in U.S. dollar denominated issues of international agencies, foreign governments and foreign corporations (i.e., Eurodollar and Yankee bonds.

4. Futures and Options strategies may be employed, upon specific authorization of the Board, on equity and fixed income investments to provide volatility protection or enhance

44

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

the rate of return over time. 5. Where appropriate, managers may use derivative contracts for the following reasons:

a. Hedging. To the extent that the portfolio is exposed to clearly defined risks and there are derivative contracts that can be used to reduce those risks, the investment managers are permitted to use such derivatives for hedging purposes, including cross hedging of currency exposures.

b. Creation of Market Exposures. Managers are permitted to use derivatives to replicate the risk/return profile of an asset or asset class provided that the guidelines for the Manager allow for such exposures to be created with the underlying assets themselves.

6. The following two uses of derivative contracts and securities are strictly prohibited:

a. Leverage. Derivatives shall not be used to magnify overall portfolio exposure to an asset, asset class, interest rate, or any other financial variable beyond that which would be allowed by a portfolio's investment guidelines if derivatives were not used.

b. Unrelated speculation. Derivatives shall not be used to create exposures to securities, currencies, indices, or any other financial variable unless such exposures would be allowed by a portfolio's investment guidelines if created with non-derivative securities.

The System and the OPEB Plan utilizes certain derivative instruments for the purpose of obtaining income or profit. The derivatives are subject to credit risks, interest rate risk, and foreign currency risk. The fair value balances and notional amounts of derivative instruments outstanding at June 30, 2020, classified by type and the changes in fair value of such derivative instruments for the year then ended are as follows:

Changes in Fair Value (expressed in thousands)

Fair Value as of June 30, 2020 (expressed in thousands)

Investment Derivatives Classification Amount Amount Notional Value The System - Plan A

Futures Investment revenue -$ 39$ 554$ Options Investment revenue 12 (11) (226) Swaps Investment revenue (476) (632) (632) TBA Transactions Investment revenue 52 13,594 13,594

The System - Plan B Futures Investment revenue -$ 2$ 29$ Options Investment revenue 1 (1) (12) Swaps Investment revenue (25) (33) (33) TBA Transactions Investment revenue 3 711 711

OPEB Plan Futures Investment revenue -$ 4$ 51$ Options Investment revenue 1 (1) 21 Swaps Investment revenue (44) (58) (58) TBA Transactions Investment revenue 5 1,248 1,248

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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Fair Value Measurement - Investments measured and reported at fair value are classified according to the following hierarchy: Level 1 – Investments reflect prices quoted in active markets for identical assets or liabilities. Level 2 – Investments reflect prices that are observable for the asset or liability, whether directly or indirectly, which may include inputs in markets that are not considered to be active. Level 3 – Investments reflect prices based upon unobservable sources, where there is little, if any market activity. The following table presents the primary government’s recurring fair value measurements as of June 30, 2020

INVESTMENT VALUATION (in Thous ands)

6/30/2020

Quoted Prices in Active Markets for

Identical Assets Significant Other

Obs ervable Inputs

Significant Unobs ervable

Inputs Investments by Fair Value Level Fair Value Level 1 Level 2 Level 3 Fixed Income: U.S. Government Obligations 15,584$ 11,235$ 4,349$ -$ U.S. Securities and Agencies 41,296 - 41,296 - Municipal debt 4,409 - 4,409 - Corporate debt 212,159 - 207,870 4,289 Foreign debt 43,177 - 32,389 10,788 Total Debt Securities 316,625 11,235 290,313 15,077

Equity Securities: Domestic 307,689 307,689 - - International 218,217 218,217 - - Total Equity Securities : 525,906 525,906 - -

Securities Lending Cash Collateral 15,119 - 15,119 -

Investments Derivative Instruments: Futures 45 45 - - Options (13) (13) - - Swaps (723) - (723) - TBAs 15,553 - 15,553 - Total Investments Derivative Instruments 14,862 32 14,830 -

Total Investments by Fair Value Level 872,512$ 537,173$ 320,262$ 15,077$

Investments Measured at the Net Asset Value (NAV): Commingled Fixed Income Funds 459,101 Commingled Domestic Equity 518,890 Commingled International Equity 435,325 Real Estate Funds 161,592 Hedge Fund of Funds 9 Private Equity Funds 204,434 Global Ass et Allocation 284,221 Total Investments Measured at the NAV 2,063,572

Total Investments and Collateral for Loaned Securities 2,936,084$

Fair Value Meas urement Using

The categorization of investments within the hierarchy is based upon the pricing transparency of the instrument and should not be perceived as the particular investment’s risk. Debt, equities, and investment derivatives classified in Level 1 of the fair value hierarchy are valued based on prices quoted in active markets for those securities, such as the New York Stock Exchange or the Nasdaq stock market. Investments classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique, which is based on the securities’ relationship to benchmark quoted prices. Derivative instruments classified in Level 2 of the

46

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

fair value hierarchy are valued using a market approach that considers benchmark interest rates and foreign exchange rates. Securities classified in Level 3 of the fair value hierarchy are valued using unobservable inputs for the asset or liability. Investments in Entities That Calculate Net Asset Value Per Share - The fair values of investments in certain equity, fixed income, and marketable alternatives funds are based on the investments’ net asset value (NAV) per share (or its equivalent) of the Pool’s, the System’s and the OPEB Plan’s ownership interest in the partners’ capital provided by the investee. The fair values of investments in certain private equity funds have been determined using recent observable transaction information for similar investments and nonbinding bids received from potential buyers of the investments. The following table presents the primary government’s unfunded commitments, redemption terms and investments measured at the NAV as of June 30, 2020. Investments Meas ured at the NAV (expres sed in thousands) Fair Value Strategy Type

Unfunded Commitments

Redemption Frequency

Redemption Notice Period

Pimco Divers ified Income 242,599 Global, High Yield , Emg. Mkt. - Daily 1 day Stone Harbor Local Market 121,447 Emerging Market Debt - Daily 1 day Guggenheim Investments 56,732 Bank Loans - Monthly 21 days Pacific Asset Management 38,323 Bank Loans - Monthly 30 days (a) Commingled Fixed Income Funds 459,101

Benchmark 28,403 Portable Alpha - Annually 90 days Blackrock US Equity 490,487 Wils hire 5000 Index - Daily 3 days (b) Commingled Domestic Equity 518,890

Blackrock ACWI Ex-US 149,434 International Equity Index - Daily 4 days Mondrian Emerging Markets 140,668 Emerging Market Equity - Monthly 15 days Strategic Global Advis ors 32,640 International Equity - Small Cap - Daily 5 days LMCG Investments 35,196 Emerging Mkt Equity - Small Cap - Monthly 5 days Metis Intl. Small Cap 23,775 International Equity - Small Cap - Monthly 30 Days Inves co Emerging Mkts Innovators 53,612 Emerging Mkt Equity - Small Cap - Daily 5 days (c) Commingled International Equity 435,325

JP Morgan 56,995 Value Added Real Estate - Monthly 15 days Clarion Lion 55,285 Core Real Estate - Quarterly 90 days UBS Real Es tate 49,312 Core Real Estate - Quarterly 60 days (d) Real Estate Funds 161,592

EIM Management Alternative 9 Hedge Fund-of-Funds - N/A N/A (e) Hedge Fund of Funds 9

(f) Private Equity 204,434 Private Equity 165,721 N/A N/A

Bridgewater All Weather 141,442 Risk Parity - Monthly 5 days BNYM Mellon DB SL Dyn Growth 142,779 Global Asset Allocation - Daily 3 days (g) Global Ass et Allocation 284,221

Total Inves tments Measured at NAV 2,063,572$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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Investments measured at the NAV above comprise of the following:

(a) Commingled Fixed Income Funds – This type includes investments in four funds, utilizing a variety of strategies which include High Yield Debt and Emerging Market Debt, and Bank Loans. Two of the funds may be redeemed daily and the other two funds may be redeemed monthly. The fair value of the investments in this type has been determined using the NAV per share (or its equivalent) of the investments.

(b) Commingled Domestic Equity Funds – This type includes two funds with investments in U.S. common stocks. The strategy type employed are Portable Alpha and the Wilshire 5000 index. The fund utilizing the Portable Alpha strategy may only be redeemed annually with a redemption notice period of ninety days. The fund utilizing the Wilshire 5000 index strategy may be redeemed daily with a redemption notice period of three days. The fair value of the investments in this type has been determined using the NAV per share (or its equivalent) of the investments.

(c) Commingled International Equity Funds – This type includes six funds. One of the funds utilizes the International Equity Index, with a daily redemption frequency and a redemption notice period of four days. One fund utilizes an Emerging Market Equity strategy with a monthly redemption frequency and a redemption notice period of fifteen days. Two funds utilize the International Equity Small Cap index strategy with a daily redemption frequency and a redemption notice period of five days, and a monthly redemption frequency and a redemption notice period of 30 days, respectively. The other two funds utilize an Emerging Market Equity- Small Cap strategy with a daily redemption frequency and a redemption notice period of five days, and a monthly redemption frequency and a redemption notice period of five days, respectively. The fair value of the investments in this type has been determined using the NAV per share (or its equivalent) of the investments.

(d) Real Estate Funds – This type includes three funds that invest primarily in U.S. commercial real estate. The strategy type for two of these funds is Core Real Estate and the third fund employs a Value Added Real Estate strategy. The fair value of the investments in this type has been determined using the NAV per share (or its equivalent) of the investments.

(e) Hedge Fund of Funds – This type includes one fund which is in liquidation. The fair value of the investments in this type has been determined using the NAV per share (or its equivalent) of the investments.

(f) Private Equity Funds – This type includes forty-two funds whose investments are not publicly traded on a stock exchange. These investments cannot be redeemed with the funds. Instead, the nature of the investments in this type is that distributions are received through the liquidation of the underlying assets of the fund. If these investments were held, it is expected that the underlying assets of the fund would be generally liquidated over ten years. The fair values of the investments in this type have been determined using the NAV per share (or its equivalent) of the Plan’s ownership interest in partners’ capital.

(g) Global Asset Allocation – This type includes two funds. One fund utilizes the Risk Parity strategy and the other fund employs Global Tactical Asset Allocation (GTAA). GTAA is designed to balance risk by investing in a variety of asset classes through active management. Funds may be invested in global equities, bonds and commodities. One fund allows daily redemptions with a redemption notice period of three days. The other fund allows only monthly redemptions. The redemption notice period is five days. The fair value of the investments in this type has been determined using the NAV per share (or its equivalent) of the investments.

4. PROPERTY TAX:

The major portion of the County's property tax is levied each July 1 on the assessed value listed as of that date for all real and personal property located in the County.

48

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Assessed values are established by the Maryland Department of Assessments and Taxation at one hundred percent of estimated market value. The assessed value of taxable real and personal property in the County for fiscal year 2020 was $90.7 billion. The property tax rate for the year ended June 30, 2020 was $1.10 for real property and $2.75 for personal property per $100 of assessed valuation. The current tax collections for the year were 99.0% of the tax levied. Property taxes are recorded as receivables in the General Fund at the levy date with appropriate allowances for estimated uncollectible amounts as described in Note 5. The full year property tax calendar is as follows: July 1 - Full year levy assessed for current fiscal year. July 31 - Bills paid during July are granted a 1% discount. August 31 - Bills paid during August are granted a ½% discount.

September 30 - First semiannual installment is due if eligible property owners elect the semiannual payment option for real property taxes. Gross amount of levy is due on all other real and personal property taxes.

October-April - Delinquent taxes accrue interest at the rate of 1% a month from October 1 to date of payment December 1 - Second installment due on real property taxes if paying on a semiannual basis. June - Delinquent real properties are sold at the annual tax sale. 5. RECEIVABLES (in thousands): Receivables as of June 30, 2020 for the County’s major funds and Internal Service Funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:

Governmental Activities

Gifts Consolidated Nonmajor

and Public Improvement and Internal Metropolitan Total

General Grants Construction Service District Receivables Property taxes 16,567$ -$ -$ -$ -$ 16,567$ Accounts 34,061 - - 2,512 1,025 37,598

Intergovernmental 306,992 38,997 208 - 3,573 349,770

Assessments - - 1,541 - 98,518 100,059 Loans 8 83,228 - 40 - 83,276 Interest 110 - - - - 110 Total receivables 357,738 122,225 1,749 2,552 103,116 587,380 Allowance for uncollectible accounts (2,042) (28,919) - - - (30,961) Net total receivables 355,696$ 93,306$ 1,749$ 2,552$ 103,116$ 556,419$

Amounts not scheduled

for collection during the subsequent year -$ 52,743$ 1,154$ -$ 86,408$ 140,305$

At June 30, 2020, the County has recorded $83,228 million of outstanding loans receivable in the Gifts and Grants Fund. Of these receivables, $57,652 million are for loans made to residents and developers to acquire, rehab, or repair low-income housing units or to provide funds for settlement costs to qualified first-time home buyers under various federally funded financial assistance programs. Approximately $28,919 million of these loans are offset by an allowance for uncollectible accounts because collections are highly uncertain. In many cases, the loan repayment is forgiven if the resident/developer complies with certain federal requirements, which may include residing in the property for a stated number of years. Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not earned. The various components of

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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deferred inflows and unearned revenue reported in the governmental funds as of June 30, 2020 were as follows:

Unavailable Unearned Total Property taxes 12,197$ 104$ 12,301$ Income taxes 221,365 - 221,365 Interest subsidy 560 - 560 Economic and community development loans 54,293 - 54,293 Special assessments not yet due 1,525 - 1,525 Grant funds received prior to meeting all eligibility requirements - 126,202 126,202 Total 289,940$ 126,306$ 416,246$

6. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (in thousands): The composition of interfund balances as of June 30, 2020 is as follows:

Receivable fund Payable fund Purpose Amount General Consolidated Public Improvement Construction Deficit cash balance 17,478$

Total 17,478$

Interfund transfers for the fiscal year ended June 30, 2020 were as follows:

Transferred to

Consolidated Gifts Public and Improvement

Transferred from General Grants Construction Total General -$ 9,410$ 58,487$ 67,897$ Gifts and Grants 1,120 - - 1,120 Consolidated Public

Improvement Construction 19,730 3,510 - 23,240 Nonmajor Governmental Funds - 450 - 450 Internal Service Funds 2,215 - - 2,215 Total transfers 23,065$ 13,370$ 58,487$ 94,922$

The transfers of $58,487 million from the General Fund to the Consolidated Public Improvement Construction Fund (CPI) are pay-as-you-go funding for capital projects. Net transfers of $8,290 million between the General Fund and the Gifts and Grants Fund are County matching funds for grant funded programs. Transfers totaling $3,510 million from CPI to the Gifts and Grants Fund are contributions for loans and grants and transfers totaling $19,730 million are for transfers from CPI appropriations to the General Fund in FY20. The remaining transfers are various funding contributions for designated grant programs. As of June 30, 2020, receivable and payable balances remained between the primary government and its discretely presented component units. These balances and transactions are a result of the primary government’s ongoing funding of the component units’ capital and operating costs. Receivables and payables between the primary

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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government and the component units do not equal due to timing differences. 7. CAPITAL ASSETS (in thousands): A summary of the primary government’s changes in capital assets for the year ended June 30, 2020 is reported below:

Beginning Ending

Balance Increases Decreases Balance

Governmental activities

Capital assets not being depreciated:

Land 299,686$ 973$ -$ 300,659$

Construction in progress 703,525 102,057 (32,394) 773,188

Total capital assets not being depreciated 1,003,211 103,030 (32,394) 1,073,847

Capital assets being depreciated:

Buildings and improvements 608,021 11,952 - 619,973

Machinery and equipment 131,744 3,991 (1,072) 134,663

Vehicles 150,396 16,488 (8,106) 158,778

Infrastructure 2,639,860 15,550 - 2,655,410

Total capital assets being depreciated 3,530,021 47,981 (9,178) 3,568,824

Less accumulated depreciation for:

Buildings and improvements (243,359) (16,416) - (259,775)

Machinery and equipment (81,663) (9,099) 873 (89,889)

Vehicles (91,663) (11,659) 7,770 (95,552)

Infrastructure (1,494,602) (52,562) - (1,547,164)

Total accumulated depreciation (1,911,287) (89,736) 8,643 (1,992,380)

Total capital assets being depreciated, net 1,618,734 (41,755) (535) 1,576,444

Governmental activities capital assets, net 2,621,945$ 61,275$ (32,929)$ 2,650,291$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Beginning Ending

Balance Increases Decreases Balance

Business-type activites

Capital assets not being depreciated:

Land 1,317$ -$ -$ 1,317$

Construction in progress 329,017 107,594 (38,653) 397,958

Total capital assets not being depreciated 330,334 107,594 (38,653) 399,275

Capital assets being depreciated:

Buildings and improvements 205,404 - - 205,404

Machinery and equipment 1,309 262 - 1,571

Vehicles 10,271 1,730 (1,590) 10,411

Infrastructure 1,543,462 35,818 - 1,579,280

Total capital assets being depreciated 1,760,446 37,810 (1,590) 1,796,666

Less accumulated depreciation for:

Buildings and improvements (106,095) (5,922) - (112,017)

Machinery and equipment (857) (83) - (940)

Vehicles (8,047) (619) 1,590 (7,076)

Infrastructure (457,706) (27,659) - (485,365)

Total accumulated depreciation (572,705) (34,283) 1,590 (605,398)

Total capital assets being depreciated, net 1,187,741 3,527 - 1,191,268

Business-type activities capital assets, net 1,518,075$ 111,121$ (38,653)$ 1,590,543$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Depreciation expense was charged to primary government functions as follows:

Governmental activities:

General government 14,441$

Public safety 7,540

Public works, which includes the depreciation

of infrastructure assets 53,529

Health and human services 1,279

Culture and leisure services 9,792

Capital assets held by the County's internal service

funds is charged to the various activites based on

their usage of the assets. 3,155

Total depreciation expense - governmental activities 89,736$

Business-type activities:

Water and sewer services, which include the

depreciation of infrastructure assets 34,283$

Total depreciation expense - business-type activities 34,283$

A summary of the component units’ changes in capital assets is reported below:

Beginning Ending Balance Increases Decreases Balance

Board of Education of Baltimore County Capital assets not being depreciated: Land 32,051$ -$ -$ 32,051$ Construction in progress 267,871 121,740 (129,589) 260,022 Total capital assets not being depreciated 299,922 121,740 (129,589) 292,073

Capital assets being depreciated: Buildings 2,395,429 129,638 (19,850) 2,505,217 Improvements other than buildings 102,242 567 (3,296) 99,513 Equipment and vehicles 176,212 12,486 (9,072) 179,626 Total capital assets being depreciated 2,673,883 142,691 (32,218) 2,784,356

Less accumulated depreciation (990,261) (91,901) 23,605 (1,058,557)

Total capital assets being depreciated, net 1,683,622 50,790 (8,613) 1,725,799

Board of Education capital assets, net 1,983,544$ 172,530$ (138,202)$ 2,017,872$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Beginning Ending Balance Increases Decreases Balance

The Community College of Baltimore County Capital assets not being depreciated: Land 4,798$ -$ -$ 4,798$ Construction in progress 23,733 38,881 (944) 61,670 Total capital assets not being depreciated 28,531 38,881 (944) 66,468

Capital assets being depreciated: Buildings and improvements 259,157 944 - 260,101 Infrastructure 29,587 - - 29,587 Equipment and vehicles 32,462 2,819 (3,406) 31,875 Library materials 3,131 51 (2,756) 426 Total capital assets being depreciated 324,337 3,814 (6,162) 321,989

Less accumulated depreciation (169,472) (13,374) 6,083 (176,763)

Total capital assets being depreciated, net 154,865 (9,560) (79) 145,226

The Community College of Baltimore County capital assets, net 183,396$ 29,321$ (1,023)$ 211,694$

Beginning Ending Balance Increases Decreases Balance

Board of Library Trustees for Baltimore County Capital assets being depreciated: Equipment and vehicles 8,813$ 108$ -$ 8,921$ Circulation materials 14,671 3,653 (5,089) 13,235 Total capital assets being depreciated 23,484 3,761 (5,089) 22,156

Less accumulated depreciation (15,676) (4,875) 5,089 (15,462)

Board of Library Trustees for Baltimore County capital assets, net 7,808$ (1,114)$ -$ 6,694$

8. LONG-TERM OBLIGATIONS:

The County’s principal long-term obligations are general obligation bonds and commercial paper bond anticipation notes (BANs) issued to finance the construction of county-wide public capital projects, water and sewer facilities within the County's Metropolitan District, and to finance pension obligations of the System and the Pension Plan. The County’s full faith, credit and unlimited taxing power are irrevocably pledged to the payment of the principal and interest of these bonds and notes. Other long-term obligations include the accrued liability for vested compensated absences, estimated landfill closing costs, certificates of participation and loans payable. The County considers all non-proprietary funds vested compensated absences to be long-term debt. Of the primary government's general long-term debt, only the redemption of the BANs and the liability for landfill closing costs are expected to be paid with bond proceeds. The County Charter authorizes the County Council by appropriate resolution to issue bonds, other than Metropolitan District bonds, up to a debt limit of 4% of the County’s assessable property base, and Metropolitan District bonds up to a debt limit of 3.2% of the District’s assessable property base. Information related to these limitations are as follows:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

(in thousands) General Bonds

Metropolitan District

Legal limitation for the borrowing of

funds and issuance of bonds 3,628,006$ 2,586,774$

General obligation debt outstanding

applicable to debt limit 2,127,419 1,851,637

General obligation debt issuances require approval by voter referendum. Approved and unissued general obligation bonded debt totaled $652,805,347 as of June 30, 2020, comprised of $370,262,881 for public schools, $263,602,896 for public facilities and $18,939,570 for the Community College. Appropriated and unissued Metropolitan District bonded debt totaled $943,785,124 as of June 30, 2020. General Obligation Bonds On August 6, 2019, the County settled the issuance of $32,365,000 Metropolitan District Bonds – 2019 Refunding Series. The Bonds were issued for the redemption of the Baltimore County Metropolitan District Bonds (72nd Issue – Series B) (Federally Taxable – Issuer Subsidy Build America Bonds), the proceeds of which were used to finance and refinance the design and construction, purchase or acquisition of the water supply, sewerage and drainage systems provided for by the Baltimore County Code. The bonds are due November 1, in each of the years 2020 to 2039, inclusive. The interest rate ranges from 3.000% to 5.000%. The net proceeds of the refunding were invested in State and Local Government Securities (SLGS) and deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments. As a result of the refunding, the aggregate difference between the refunding debt and the refunded debt was $6,844,773 or an economic gain of $5,251,428. The refunded bonds will be considered defeased and the liability for those bonds will be removed from the government-wide statement of net position. On March 19, 2020, the County sold $288,000,000 General Obligation Bonds, consisting of $42,000,000 Metropolitan District Bonds – 82nd Issue, for the payment of Baltimore County Metropolitan District Bond Anticipation Notes and $246,000,000 Consolidated Public Improvement Bonds 2020 Series, for the payment of Baltimore County Consolidated Public Improvement Bond Anticipation Notes. The Metropolitan District Bonds are due March 1, in each of the years 2021 to 2050, inclusive, and bear a true interest cost of 2.58% The Consolidated Public Improvement Bonds are due March 1, in each of the years 2022 to 2040, inclusive, and bear a true interest cost of 1.97%.

General Obligation Bond Anticipation Notes (BANs) On March 19, 2020, the County issued $350 million Fixed Rate (FR) BANs for the purpose of providing funds for capital improvement projects. Of the $350 million FR BANs, $145 million were issued as Consolidated Public Improvement (CPI) FR BANs, and $205 million were issued as Metropolitan District (MD) FR BANs, maturing on March 22, 2021. The true interest cost was 0.83% for the CPI FR BANs and 0.84% for the MD FR BANs.

Maryland Water Quality Financing Agreement During fiscal year 2020, the County issued $87,263,573 in Metropolitan District Bonds through the Maryland Water Quality Revolving Loan Fund. The Fund subsidizes the interest rate on sewer and water projects. As of June 30, 2020, the balance outstanding was $317,996,101.

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Single Stream Recycling Loan The County has a conditional purchase agreement with the Baltimore County Police, Fire and Widows Pension Plan that was used to finance a waste transfer station upgrade and to procure and install a single stream recyclables processing system at the County’s Resource Recovery Facility in Cockeysville, Maryland. On September 15, 2017, the County and the Baltimore County Police, Fire and Widows’ Pension Plan amended the Single Stream Recycling Loan Agreement so that the remaining principal of the Loan will be repaid June 30, 2021 in the amount of $4,374,709. The interest component of the loan will continue to be repaid monthly through June 30, 2021 at an annual rate of 7.875%. Other The County issues debt to finance the construction of certain capital facilities of its component units and for major water and sewer projects done in conjunction with the City of Baltimore (the “City”), which decreases the “Unrestricted” net position component in the statement of net position. The following summarizes these situations where the County is reporting the debt in its financial statements, while the corresponding assets are reported by the other reporting entity.

 The Board of Education and the Community College have no authority to issue bonded debt. That authority rests with the County subject to voter approval. The County had $1,074.012 million of its net Consolidated Public Improvement general obligation debt outstanding (net of unamortized premiums and deferred charges) that is related to capital facilities of the component units as of June 30, 2020.

 The Metropolitan District Act requires the City to provide water to the County’s Metropolitan District. The City also treats sewage from the Metropolitan District at cost. The County has agreed to pay the City on a pro-rata basis for construction of certain City owned sewer and water capital projects that serve the Metropolitan District. The County’s contributions towards these City owned facilities are funded primarily with bond proceeds. The County estimates 41.44% of its net Metropolitan District general obligation bonds outstanding or $767.318 million is related to these facilities as of June 30, 2020.

At June 30, 2020, the County has accrued $21.97 million of estimated closure and postclosure care costs for its one active landfill. State and federal laws require the County to place a final cover on its open landfill when it stops accepting waste in approximately 2028 and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure costs generally will be paid only near or after the date that the landfill stops accepting waste, the County reports a portion of these costs as a liability in the Governmental Activities of the Statement of Net Position based on the landfill capacity used as of the end of the fiscal year. The amount included in the landfill closure and postclosure care costs liability at June 30, 2020 represents the cumulative unspent amount reported to date based on the use of 69% of the estimated landfill capacity. The County will recognize the remaining estimated cost of closure and postclosure care of $9.87 million as the remaining estimated capacity is filled. The actual cost may differ due to inflation, changes in technology, or changes in regulations. The County intends to finance these costs primarily with bond proceeds in its Consolidated Public Improvement Construction Fund. Financial assurance provisions of federal regulations require owners and operators of municipal solid waste landfills to demonstrate that adequate funds will be readily available for the costs of closure, post closure care, and corrective action associated with their facilities. The County had demonstrated that it met the local government financial test assurance mechanism as of December 31, 2019 and has placed appropriate documents in the operating record of its active landfill. The County has participated in the issuance of economic development revenue bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities. The County is not obligated in any manner for repayment of the bonds, and therefore they are not reported as liabilities in the financial statements. The aggregate outstanding principal amount as of June 30, 2020 for bonds issued prior to July 1, 1996 was $368.96 million. The aggregate principal amount payable for bonds issued after July 1, 1996

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

was $110.15 million at June 30, 2020. The State of Maryland allows Maryland residents who earn personal income in jurisdictions outside Maryland to take a credit against their Maryland State income taxes for the income taxes paid to other jurisdictions. In prior years, Maryland had not allowed this credit against Maryland County or Municipal income taxes. A suit was brought against the State, the Wynne Case, asserting that this unequal treatment violated the Federal Commerce Clause. The State lost the case before the Maryland Court of Appeals and the U.S. Supreme Court has upheld that ruling. As a result, the State must allow credits against county income taxes. The impact to the County will be a loss of current revenues, as well as refunds of overpayments for the prior tax years which the state will recoup from income tax revenue distributions to the County over 20 quarters starting May 2021. The County has recognized an estimated $52.285 million liability in its government-wide statements and has assigned $25.427 million of its General Fund fund balance for these refunds.

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Long-term liability activity for the year ended June 30, 2020 is as follows (in thousands):

Balance Balance Due Within July 1, 2019 Increases Decreases June 30, 2020 One Year

Primary Government: Governmental activities: General obligation debt Consolidated public improvement bonds 1,557,695$ 246,000$ (170,255)$ 1,633,440$ 105,775$ Pension funding bonds 358,895 - (9,916) 348,979 10,071 Bond anticipation notes 246,000 145,000 (246,000) 145,000 145,000

2,162,590 391,000 (426,171) 2,127,419 260,846 Add remaining original issue premium 125,169 64,919 (26,920) 163,168 - Less remaining original issue discount (1,060) - 140 (920) - Total general obligation debt 2,286,699 455,919 (452,951) 2,289,667 260,846

Certificates of participation 168,763 - (23,141) 145,622 23,491 Add remaining original issue premium 20,156 - (4,505) 15,651 - Total certificates of participation 188,919 - (27,646) 161,273 23,491

Other long-term liabilities Loan payable 4,375 - - 4,375 - Compensated absences 73,280 64,487 (57,224) 80,543 78,312 Claims payable 70,480 321,684 (315,263) 76,901 39,280 Net other post employment benefits liability 1,080,739 530,472 - * 1,611,211 - Net pension liability 1,620,601 154,393 - * 1,774,994 - Disputed taxes 52,285 - - 52,285 5,228 Estimated landfill closing costs 21,523 447 - 21,970 - Total other long-term liabilities 2,923,283 1,071,483 (372,487) 3,622,279 122,820

Total governmental activities long-term liabilities 5,398,901$ 1,527,402$ (853,084)$ 6,073,219$ 407,157$

Business-type activities: General obligation debt Metropolitan District bonds 1,600,246$ 161,628$ (129,778)$ 1,632,096$ 58,846$ Pension funding bonds 14,955 - (414) 14,541 419 Bond anticipation notes 42,000 205,000 (42,000) 205,000 205,000

1,657,201 366,628 (172,192) 1,851,637 264,265 Add remaining original issue premium 90,469 19,245 (13,875) 95,839 - Total general obligation debt 1,747,670 385,873 (186,067) 1,947,476 264,265

Certificates of participation 14,197 - (1,574) 12,623 1,609 Add remaining original issue premium 1,907 - (390) 1,517 - Total certificates of participation 16,104 - (1,964) 14,140 1,609

Compensated absences 2,172 1,184 (948) 2,408 2,282 Net pension liability 50,669 5,945 - * 56,614 - Net other post employment benefits liability 57,283 28,117 - * 85,400 - Total business-type activities long-term liabilities 1,873,898$ 421,119$ (188,979)$ 2,106,038$ 268,156$

* Net increase is shown

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

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Balance Balance Due Within July 1, 2019 Increases Decreases June 30, 2020 One Year

Component Units: Board of Education:

Compensated absences 26,171$ 16,978$ (12,897)$ 30,252$ 12,897$ Capital leases 103,507 8,398 (9,338) 102,567 7,324 Claims payable 14,211 4,735 (6,496) 12,450 4,168 Net OPEB obligation 1,250,360 795,589 - 2,045,949 - Net Pension Liability 126,242 11,727 - 137,969 -

Total Board of Education 1,520,491 837,427 (28,731) 2,329,187 24,389 Community College:

Compensated absences 6,776 6,295 (3,987) 9,084 6,627 Capital leases 1,499 1,900 (1,249) 2,150 951 Net OPEB obligation 110,066 51,985 - 162,051 - Net Pension Liability 5,954 - (101) 5,853 -

Total Community College 124,295 60,180 (5,337) 179,138 7,578 Board of Library Trustees:

Compensated absences 1,070 248 - 1,318 1,318 Net OPEB obligation 26,002 12,244 - 38,246 - Net pension liability 835 347 (435) 747 -

Total Board of Library Trustees 27,907 12,839 (435) 40,311 1,318

Total component unit long-term liabilities 1,672,693$ 910,446$ (34,503)$ 2,548,636$ 33,285$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

General long-term debt currently outstanding as of June 30, 2020 is as follows:

Governmental Activities: ( in thousands)

General Obligation Debt: Bonds

Original Unamortized Carrying Maturity Interest Rate Issue Balance Premium/ Value

Dated Range Range Amount 6/30/2020 (Discount) 6/30/2020 11/05/09 2010-2025 6.150 - 6.150 19,400 19,400 (920) 18,480 11/10/09 2010-2029 0.650 - 5.650 155,570 17,000 33 17,033 08/10/10 2011-2022 2.500 - 4.000 13,565 * 13,520 209 13,729 11/09/10 2012-2029 3.110 - 4.900 19,950 19,950 - 19,950 11/09/10 2018-2030 4.970 - 4.970 177,000 149,000 - 149,000 11/30/11 2013-2032 3.000 - 5.000 170,000 108,000 5,838 113,838 12/12/12 2013-2024 2.000 - 5.000 94,080 * 38,190 1,039 39,229 12/12/12 2013-2032 3.000 - 5.000 193,000 136,000 7,838 143,838 12/13/12 2014-2042 0.416 - 3.739 246,077 ** 213,801 - 213,801 02/20/14 2016-2034 3.000 - 5.000 140,000 107,000 3,230 110,230 06/26/14 2015-2020 4.000 - 5.000 39,530 * 6,760 14 6,774 07/15/14 2015-2025 3.000 - 4.500 48,235 * 30,585 1,278 31,863 12/23/14 2015-2038 2.000 - 5.000 116,000 87,000 10,405 97,405 06/30/15 2016-2027 2.000 - 5.000 69,130 * 56,115 4,968 61,083 03/08/16 2018-2036 5.000 - 5.000 112,000 94,000 14,077 108,077 08/03/16 2017-2036 0.600 3.303 144,000 ** 135,178 - 135,178 03/15/17 2019-2037 4.000 - 5.000 99,800 89,200 7,091 96,291 11/16/17 2020-2030 3.000 - 4.000 60,130 * 60,125 3,091 63,216 03/16/18 2020-2038 4.000 - 5.000 121,000 117,035 11,502 128,537 03/18/19 2020-2039 4.000 - 5.000 246,000 238,560 30,538 269,098 03/19/20 2022-2040 4.000 5.000 246,000 246,000 58,685 304,685

2,530,467 1,982,419 158,916 2,141,335 Bond Anticipation Notes

03/19/20 2020-2021 4.000 - 4.000 145,000 145,000 3,332 148,332 145,000 145,000 3,332 148,332

Total General Obligation Debt 2,675,467$ 2,127,419$ 162,248$ 2,289,667$

Certificates of Participation 06/19/12 2013-2022 3.000 - 5.000 78,430 25,000 795 25,795 02/06/13 2013-2021 1.500 - 3.000 11,830 * 2,865 32 2,897 09/27/16 2017-2026 5.000 - 5.000 59,810 45,997 4,894 50,891 03/26/19 2020-2029 5.000 - 5.000 77,960 71,760 9,930 81,690

Total Certificates of Participation 228,030$ 145,622$ 15,651$ 161,273$

Loan Payable 08/15/13 2014-2021 7.875 - 7.875 18,617$ 4,375$ -$ 4,375$

Total Loan Payable 18,617$ 4,375$ -$ 4,375$

* Refunding issue ** Taxable Issue

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Business-type Activities: (in thousands)

General Obligation Debt: Bonds

Original Carrying Maturity Interest Issue Balance Unamortized Value

Dated Range Rate Range Amount 6/30/2020 Premium 6/30/2020 06/22/01 2003-2022 2.300 - 2.300 14,105 1,787 - 1,787 06/26/02 2004-2023 2.000 - 2.000 7,006 745 - 745 03/11/03 2004-2023 1.100 - 1.100 8,638 1,246 - 1,246 07/16/04 2005-2025 1.200 - 1.200 8,501 153 - 153 09/12/05 2006-2024 1.000 - 1.000 21,146 4,087 - 4,087 07/31/07 2008-2027 1.000 - 1.000 16,794 6,437 - 6,437 12/18/09 2011-2032 1.000 1.000 15,625 9,874 - 9,874 08/10/10 2011-2030 2.000 - 4.500 61,720 * 56,565 1,095 57,660 11/09/10 2019-2040 2.000 - 5.050 93,900 89,600 - 89,600 11/30/11 2013-2042 3.000 - 5.000 85,000 61,800 2,047 63,847 05/31/12 2014-2032 1.800 - 1.800 44,326 29,684 - 29,684 12/12/12 2013-2042 2.000 - 5.000 60,000 46,000 731 46,731 12/12/12 2013-2032 2.250 - 5.000 18,005 8,230 42 8,272 12/13/12 2015-2042 0.416 - 3.739 10,213 ** 8,909 - 8,909 09/10/13 2013-2034 2.200 - 2.200 9,198 6,204 - 6,204 02/20/14 2016-2034 3.000 - 5.000 60,000 49,500 806 50,306 02/20/14 2015-2020 4.000 - 5.000 30,325 * 22,425 596 23,021 07/15/14 2015-2025 3.000 - 4.500 26,370 * 17,515 609 18,124 12/23/14 2015-2038 2.000 - 5.000 84,000 70,000 9,323 79,323 06/30/15 2016-2027 2.000 - 5.000 101,765 * 88,275 5,085 93,360 09/25/15 2016-2035 1.600 - 1.600 86,311 62,410 - 62,410 03/08/16 2017-2046 5.000 - 5.000 88,000 76,000 11,745 87,745 03/08/16 2017-2038 2.000 - 4.000 65,705 * 65,105 1,054 66,159 07/29/16 2017-2046 1.300 - 1.300 13,475 12,888 - 12,888 08/03/16 2017-2036 0.600 - 3.303 6,000 ** 5,632 - 5,632 03/15/17 2019-2047 4.000 - 5.000 99,300 92,300 6,291 98,591 11/16/17 2019-2029 5.000 - 5.000 31,035 * 31,030 4,232 35,262 11/17/17 2018-2047 0.700 - 0.700 37,066 36,782 - 36,782 03/16/18 2020-2049 4.000 - 5.000 225,000 221,390 16,545 237,935 10/25/18 2019-2048 0.800 - 0.800 145,700 145,699 - 145,699 03/18/19 2020-2049 2.000 - 5.000 245,000 244,000 18,612 262,612 08/06/19 2020-2039 3.000 - 5.000 32,365 * 32,365 3,507 35,872 03/19/20 2021-2050 4.000 - 5.000 42,000 42,000 8,825 50,825

1,893,594 1,646,637 91,145 1,737,782 Bond Anticipation Notes

03/19/20 2020-2021 4.000 - 4.000 205,000 205,000 4,694 209,694 205,000 205,000 4,694 209,694

Total General Obligation Debt 2,098,594$ 1,851,637$ 95,839$ 1,947,476$

Certificates of Participation 06/19/12 2013-2022 3.000 - 5.000 4,250$ 1,275$ 43$ 1,318$ 09/27/16 2017-2026 5.000 - 5.000 3,905 3,003 319 3,322 03/26/19 2020-2029 5.000 - 5.000 9,065 8,345 1,155 9,500

Total Certificates of Participation 17,220$ 12,623$ 1,517$ 14,140$

* Refunding issue ** Taxable issue

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

The following is a schedule of the primary government’s debt service payments for certain long-term debt as of June 30, 2020:

Fiscal Year Governmental Activities Ended General Obligation Debt COPs & Other Long-term Debt Total Debt Service

June 30 Principal Interest Principal Interest Principal Interest 2021 260,846$ 70,436$ 23,491$ 1,434$ 284,337$ 71,870$ 2022 124,328 65,393 27,236 2,458 151,564 67,851 2023 124,479 70,757 21,746 4,599 146,225 75,356 2024 119,040 65,456 14,106 3,712 133,146 69,168 2025 120,185 60,319 14,481 3,007 134,666 63,326 2026-2030 578,590 227,089 48,937 5,241 627,527 232,330 2031-2035 430,310 117,270 - - 430,310 117,270 2036-2040 284,623 40,713 - - 284,623 40,713 2041-2045 70,719 7,278 - - 70,719 7,278 2046-2050 14,299 476 - - 14,299 476 Total 2,127,419$ 725,187$ 149,997$ 20,451$ 2,277,416$ 745,638$

Fiscal Year Business-type Activities Ended General Obligation Debt COPs Total Debt Service

June 30 Principal Interest Principal Interest Principal Interest 2021 264,265$ 48,113$ 1,609$ 53$ 265,874$ 48,166$ 2022 69,195 55,518 1,649 150 70,844 55,668 2023 68,192 54,726 1,689 447 69,881 55,173 2024 67,224 52,190 1,304 373 68,528 52,563 2025 67,869 49,775 1,349 308 69,218 50,083 2026-2030 345,691 210,824 5,023 576 350,714 211,400 2031-2035 325,151 149,549 - - 325,151 149,549 2036-2040 278,719 95,515 - - 278,719 95,515 2041-2045 226,780 49,114 - - 226,780 49,114 2046-2050 138,551 11,593 - - 138,551 11,593 Total 1,851,637$ 776,917$ 12,623$ 1,907$ 1,864,260$ 778,824$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

9. COMMITMENTS AND CONTINGENCIES: Leases The following is a schedule by years of future minimum rental payments for facilities and equipment under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2020 (in thousands):

Year ending Primary Component June 30 Government Unit

2021 1,286 32,520 2022 1,700 19,443 2023 1,724 6,160 2024 1,739 4,821 2025 1,740 4,604

2026-2030 9,086 11,766 2031-2035 1,090 - 2036-2040 280 - 2041-2045 183 -

18,828$ 79,314$

The total rental expenditures for the year ended June 30, 2020, for all leases except those with terms of a month or less that were not renewed were approximately $5.6 million for the primary government and $52.4 million for the component units. Contracts and Commitments Contract commitments in the Consolidated Public Improvement Construction Fund, the Metropolitan District Enterprise Fund, and the Gifts and Grants Fund amounted to approximately $88 million, $236.2 million, and $36.1 million, respectively, at June 30, 2020. Such amounts will be funded by future bond proceeds, approved federal and state grants, and future assessments. Federal Grants The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act provided $144,369,685 from the Coronavirus Relief Fund (CRF) to the County, with $111,599,617 remaining to be spent at June 30, 2020. The funds are anticipated to be fully utilized on allowable expenses by December 30, 2020, however, any monies unspent at that time will revert back to the U.S. Treasury. Other Contingencies The County receives significant financial assistance from the U. S. Government and the State of Maryland in the form of grants. Entitlement to grant resources is generally conditioned upon compliance with terms and conditions of the grant agreements and applicable federal and state regulations, including the expenditure of the resources for eligible purposes. Substantially all grants are subject to financial and compliance audits in accordance with grantor requirements. Any disallowances as a result of these audits become a liability of the County. The County estimates that no material liabilities will result from such audits. The County is contingently liable for loans guaranteed in the Gifts & Grants Fund that aggregate approximately $0.849 million as of June 30, 2020. A restriction of fund balance has been made for this amount.

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

10. LITIGATION: The County is a defendant in various suits claiming damages for personal injury and property damage in automobile and general liability cases, and various personnel actions. In addition, there are various other tort suits alleging violations of individual civil rights pending against the County as well as miscellaneous other litigation, mostly contract claims. Amounts claimed in some of these matters are substantial. In the opinion of the County Attorney, the County should prevail in most of said various tort suits, suits alleging violations of individual civil rights and in miscellaneous other litigation (although the outcome of litigation cannot be predicted with certainty). It is the further opinion of the County Attorney that the likelihood of the County incurring aggregate liability arising from such litigation in an amount that would be material in relation to its financial position is remote. Litigation against the Employees’ Retirement System of Baltimore County is addressed in its separate Comprehensive Annual Financial Report (CAFR). See note 12 for CAFR availability. 11. RISK MANAGEMENT: The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; employee health and accident; and natural disasters. The County manages its risks internally and sets aside assets for claims settlement in an Internal Service Fund, the Self-Insurance Program Fund (SIPF). The County services all claims for risk of loss to which the County is exposed except as noted below. The SIPF allocates County claims payments by charging a “premium” to each fund, or component unit, based on the actuarially determined liability and SIPF net assets. The County purchases commercial insurance for claims that exceed 120% of projected health care claims and associated administrative expenses, and for real and personal property losses subject to policy deductibles. Settled claims have not exceeded this commercial health care excess coverage for the past three fiscal years. SIPF liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Since actual claim liabilities depend on complex factors such as inflation, changes in legal doctrines, and damage awards, the process used in computing claim liability results in an estimate. Certain liabilities are reevaluated periodically to take into consideration recently settled claims, the frequency of claims, and other economic and social factors. Liabilities for incurred losses to be settled by fixed or reasonably determinable payments over a long period of time are reported at their actual value and are not discounted. Changes in the balances of claim liabilities during fiscal years 2019 and 2020 were as follows (in thousands):

Balance at Claims and Balance at

Fiscal Beginning Changes in Claim Fiscal Year of Year Estimates Payments Year End

2019 63,810 337,831 (331,161) 70,480 2020 70,480 321,684 (315,263) 76,901

12. BENEFIT PLANS (in thousands): Employees’ Retirement System Plan Description: The Employees’ Retirement System of Baltimore County (the “System”) is a cost-sharing multiple- employer defined benefit public employee retirement system that acts as a common investment and administrative

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

agent serving five entities including the County and certain employees of the Baltimore County Board of Education, Baltimore County Board of Library Trustees, the Community College of Baltimore County and the Baltimore County Revenue Authority. The System is not an employer. The System provides retirement and disability benefits, cost- of-living adjustments and death benefits to plan members and beneficiaries. The authority to establish and maintain the System is specified in Section 5-1-101 of the Baltimore County Code (the “Code”). On October 15, 2012, the County Council passed Bill No. 65-12 that formally closed the System for members hired prior to July 1, 2007, now known as members of “Plan A”. Members hired on or after July 1, 2007 are considered members of “Plan B”. Plan A and Plan B are unitized plans of the System. The System is considered part of the County’s reporting entity and its financial statements are included in the County’s basic financial statements as a benefit trust fund. Separate Plan A and Plan B financial statements are included in the combining fiduciary fund statements in the supplementary information section of this report. The County is obligated for the payment of all pensions, annuities, retirement allowances, refunds, reserves and other benefits. The System is fiscally dependent on the County by virtue of the legislative and executive controls exercised with respect to its operations, policies and administrative budget. In accordance with Section 5-1-238 of the Code, responsibility for the proper operation of the System is vested in an eight-member Board of Trustees (the “Board”), the majority of which are appointed by the County Executive. The general administration of the System is vested in the Director of Budget and Finance. The System issues a separately prepared Comprehensive Annual Financial Report that includes financial statements, note disclosures and required supplementary information. The report may be obtained by writing to the Office of Budget and Finance, Mezzanine, Historic Court House, 400 Washington Avenue, Towson, Maryland 21204, or online at http://www.baltimorecountymd.gov. Funding Policy: Per Section 5-1-203 of the County Code, contribution requirements of the plan members and the participating employers are established and may be amended by the Board. System members contribute a percentage of their salary to the System. The contribution rates for members are based on employee classification. Participating employers are required to make contributions on an actuarially determined basis. Level percentages of payroll employer contribution rates are determined using the projected unit credit actuarial funding method. The employer contributions to the System for the fiscal years ended June 30, 2020, 2019 and 2018, were $144,606, $138,200 and $128,896, respectively, which were equal to or greater than the required contributions for each year. The primary government’s contributions for the three aforementioned fiscal years were $136,000, $127,976 and $119,253, respectively. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Net Pension Liability: At June 30, 2020, the County reported a liability of $1,818,497 for its proportionate share of the net pension liability of the System. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on a projection of the County’s long-term share of contributions to the pension plan relative to the projected contributions of all the participating agencies, actuarially determined. At June 30, 2019, the County’s proportion was 92.47 percent, which is a decrease of .07 percent from its proportion as of June 30, 2018. There have been no changes in the benefit terms that would affect the measurement of the total pension liability since the last measurement date. Pension Expense: For the year ended June 30, 2020, the County recognized pension expense of $315,185. At June 30, 2020 the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Deferred Deferred Outflows Inflows

of Resources of Resources

Net difference between projected and actual experience 84,891$ 8,615$ Changes in assumptions 63,675 8,034 Net difference between projected and actual earnings on

pension plan investments - 10,942 Changes in proportion and differences between County

contributions and proportionate share of contributions 7,054 10,496 County contributions subsequent to the measurement date 136,000 - Total 291,620$ 38,087$

Deferred outflows of $136,000 are reported as resources related to pensions resulting from County contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30: 2021 116,113$ 2022 (1,447) 2023 1,660 2024 9,921 2025 (1,597) Thereafter (7,117)

Actuarial Assumptions: The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 3 percent Salary increases Rates vary by participant service Investment rate of return 6.375 percent, net of pension plan investment expense, including inflation Actuarial cost method Entry Age Normal Asset valuation method Ten-year smoothed market

Mortality rates were based on RP-2000 Combined Mortality Table for males and females, as appropriate, with adjustments for mortality improvements based on Scale AA. The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2011 through June 30, 2016. As a result of this experience study the following actuarial assumptions and method changes were made:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

 Salary increase assumptions were updated to reflect recent experience.  The mortality tables for health and disabled pensioners were updated to reflect future expected increases

in life expectancy.  The rates of withdrawal from active service due to termination of employment, death and accidental death,

ordinary disability, and accidental disability were updated to reflect recent plan experience.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long- term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric rates of return for each major asset class included in the System’s target asset allocation as of June 30, 2019 are summarized in the table below:

Schedule of Long-term expected rate of return

Asset Class Long-Term Expected

Rate of Return Target asset

Allocation Large Cap Equities 4.75% 19.00%

Small/Mid Cap Equities 5.00% 7.00%

International Equities (Unhedged) 5.00% 16.00%

Emerging International Equities 6.50% 8.00%

Core Bonds 1.62% 5.00%

Core Bonds (Short) 0.25% 5.00%

Bank Loans 2.75% 3.00%

EMD (Local Currency) 4.00% 4.00%

Diversified Fixed Income 1.70% 9.00%

Private Equity 8.40% 7.00%

Real Estate (Core) 3.50% 5.00%

Global Asset Allocation 3.47% 6.00%

Risk Parity 2.27% 6.00% Discount Rate: The discount rate used to measure the total pension liability was the funding valuation interest rate of 6.375 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will continue to follow the current funding policy. Based on those assumptions, the System’s fiduciary net position was projected to make all future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the County’s proportionate share of the net pension liability to changes in the discount rate: The following presents the County’s proportionate share of the net pension liability calculated using the discount rate of 6.375 percent, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.375 percent) or 1-percentage-point higher (7.375 percent) than the current rate:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

1.00% Decrease (5.375%)

Current Discount Rate

(6.375%) 1.00% Increase

(7.375%)

County's proportionate share

of the net pension liability 2,342,024$ 1,818,497$ 1,379,193$

Pension Plan Fiduciary Net Position: Detail information about the System’s fiduciary net position is available in its separately issued financial report. Police, Fire and Widows’ Pension Plan Plan Description: The County administers the Police, Fire, and Widow’s Pension Plan (Pension Plan) which is a single-employer defined benefit pension plan that provides pensions for policemen and firemen hired prior to October 1, 1959 and for their widows. The Pension Plan has been closed and frozen. The Pension Plan valuation was based on the plan provisions as described in the Baltimore County Code for Pensions and Retirements, Article III for Fire and Police Departments, Section 23-141 through Section 23-204. The pension allowance for retired firefighters and police officers is one-half of the salary of a current employee with the same rank the pensioner held at the time of his retirement. The pension allowance to a widow of a deceased pensioner is one-fourth of the base salary of an active member of the County Police and Fire departments. Funding Policy: The County intends to fund the Pension Plan on a pay-as-you-go basis if Pension Plan assets are depleted. Management of the Pension Plan is vested in an eight-member Board of Trustees, comprised of ex- officio and elected representatives. The general administration of the Pension Plan is vested in the Director of Budget and Finance. At June 30, 2019, pension plan membership consisted of 144 inactive plan members or beneficiaries currently receiving benefits with no other inactive members or beneficiaries entitled to receive benefits. Investments: For the year ended June 30, 2019, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 6.78%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Net Pension Liability: At June 30, 2020, the County reported a liability of $13,111 for the Pension Plan. The net pension liability was measured as of June 30, 2019 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date.

The components of the net pension liability of the County at June 30, 2020, were as follows:

Total pension liability 31,731$ Plan fiduciary net position (18,620) County's net pension liability 13,111$

Plan fiduciary net position as a percentage of the total pension liability 58.68%

Actuarial Assumptions: The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Inflation 3.0%

Salary increases Not applicable

Investment rate of return 3.60% blended rate

Health Mortality RP-2000 projected by Scale AA.

Cost of living adjustments 3.0%

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2019 are summarized in the table below.

Schedule of Long-term expected rate of return

Asset Class Long-Term Expected

Rate of Return Target asset

Allocation Large Cap Equities 4.75% 19.00%

Small/Mid Cap Equities 5.00% 7.00%

International Equities (Unhedged) 5.00% 16.00%

Emerging International Equities 6.50% 8.00%

Core Bonds 1.62% 5.00%

Core Bonds (Short) 0.25% 5.00%

Bank Loans 2.75% 3.00%

EMD (Local Currency) 4.00% 4.00%

Diversified Fixed Income 1.70% 9.00%

Private Equity 8.40% 7.00%

Real Estate (Core) 3.50% 5.00%

Global Asset Allocation 3.47% 6.00%

Risk Parity 2.27% 6.00% Discount Rate: The discount rate used to measure the total pension liability was 3.60%. The projection of cash flows used to determine the discount rate assumed that County contributions will continue to follow the current funding policy. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members until the year 2021. A municipal bond rate of 2.79% was used in the development of the blended GASB discount rate after that point. The 2.79% rate is based on the S&P Municipal Bond 20 Year High Grade Rate Index as of June 30, 2019. Based on the long-term rate of return of 5.00% and the municipal bond rate of 2.79%, the blended GASB discount rate would be 3.60%. The assumed discount rate has been determined in accordance with the method prescribed by GASB Statement No. 67.

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Changes in the Net Pension Liability

Increase (Decrease) Total Pension Plan Fiduciary Net Pension

Liability Net Position Liability (a) (b) (a) - (b)

Balances at 6/30/18 39,504$ 23,269$ 16,235$ Changes for the year:

Interest 1,447 - 1,447 Differences between expected and actual experience (1,016) - (1,016) Changes of assumptions (2,296) - (2,296) Net investment income - 1,247 (1,247) Benefit payments, including refunds of member contributions (5,908) (5,908) - Other - 12 (12) Net Changes (7,773) (4,649) (3,124)

Balances at 6/30/19 31,731$ 18,620$ 13,111$

Sensitivity of the net pension liability to changes in the discount rate: The following presents the net pension liability, calculated using the discount rate of 3.60%, as well as what the County’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.60%) or 1-percentage-point higher (4.60%) than the current rate:

1.00% Decrease (2.60%)

Current Discount Rate

(3.60%) 1.00% Increase

(4.60%) County's net pension liability 14,658$ 13,111$ 11,699$

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Expense: For the year ended June 30, 2020, the County recognized pension expense of ($3,537). At June 30, 2020, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Deferred Outflows Inflows

of Resources of Resources

Net difference between projected and actual earnings on pension plan investments -$ 1,256$

Total -$ 1,256$

Deferred outflows and deferred inflows of resources resulting from the difference between projected and actual earnings on pension plan investments will be recognized in pension expense as follows:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Year ended June 30: 2021 (477)$ 2022 (560) 2023 (174) 2024 (45)

The condensed financial statements as of and for the year ended June 30, 2020 are as follows:

Statement of Changes in Fiduciary Net Position Police, Fire and Widows' Pension Plan

For the year ended June 30, 2020

Additions Contributions:

Other 12$ Total contributions 12

Investment earnings: Net increase in the fair value of plan assets (27) Interest and dividends 553 Investment expenses (9)

Net investment gain 517 Total additions 529

Deductions Benefits 5,434

Total deductions 5,434 Net decrease in net position (4,905)

Net position restricted for pensions Beginning of the year 18,620 End of the year 13,715$

Statement of Fiduciary Net Position Police, Fire, and Widows' Pension Plan

As of June 30, 2020

Assets Cash and cash equivalents 7$ Investment securities 13,699 Interest and dividends receivable 10

Total assets 13,716

Liabilities Accounts payable 1

Total liabilities 1

Net position restricted for pensions 13,715$

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Other Pension Plans The County provides supplemental pension benefits through General Fund appropriations to certain judges, judges’ widows and families of members of volunteer fire and ambulance companies killed in the line of duty. The respective costs and related net pension liability of these plans are not significant. Substantially all employees of the component units who do not participate in the System participate in the State of Maryland Teachers’ Retirement and Pension Systems. Employer contributions to these systems for the years ended June 30, 2020, 2019, 2018, of approximately $101,758, $97,386 and $95,089, respectively, were made directly by the State of Maryland on behalf of the component units according to State statute. The contributions have been recognized as a revenue and an expense in the component unit statement of activities. Additionally, some professional employees of the Community College participate in an optional private retirement system. 13. OTHER POST EMPLOYMENT BENEFIT PLAN: Plan Description and Contribution Information Plan Description: The County’s Other Post Employment Benefit Plan (OPEB Plan) is an agent multiple-employer defined benefit postemployment healthcare plan that covers retired employees of the primary government, the Baltimore County Board of Education, the Community College of Baltimore County, the Board of Library Trustees for Baltimore County and the Baltimore County Revenue Authority. The OPEB Plan was established and is maintained by the County as a trust fund as specified in Article 10, Title 14 of the County Code. The trust fund is included in these financial statements as an Other Post-Employment Benefits Trust Fund. Separate financial statements are not issued for the OPEB Plan. The OPEB Plan provides healthcare and life insurance benefits to eligible retirees and their beneficiaries who receive retirement benefits either from the Employees’ Retirement System of Baltimore County under Article 5, Title 1 of the County Code or the State Retirement and Pension System of Maryland. Retiree benefits are in accordance with bargaining unit agreements negotiated between each employer’s governing body/board and each employee’s representative labor organization. At June 30, 2020, the date of the latest available valuation, the OPEB Plan covered a projected 32,692 members; 20,041 active plan members and 12,651 retirees receiving benefits. County employees covered at June 30, 2020 included a projected 13,581 members; 6,164 active plan members, 5,144 inactive plan members receiving benefits and 2,273 inactive plan members entitled to but not receiving benefits. Contributions: Retired plan members and beneficiaries currently receiving benefits are required to contribute specified amounts monthly toward healthcare based on their hire date, years of active service, the medical plan chosen and whether they are Medicare eligible (age 65). The County receives Prescription Drug Plan reimbursements on Medicare eligible retirees. The OPEB Plan does not have any required contributions from active employees. Funding Policy: There are no statutory or contractual requirements for County contributions to the plan. The funding of the plan is determined by the Director of Budget and Finance after reviewing the actuarial GASB 74 and 75 reports. GASB 74 – Financial Reporting for Postemployment Benefits Other Than Pensions Investments: Per Section 10-14-106 of the County Code, Other Post-Employment Benefits Trust Fund money identified by the Director of Budget and Finance as available for investment shall be jointly invested with retirement funds as per Section 5-1-247. Pursuant to Section 5-1-247 of the Baltimore County Code, the Board of Trustees utilizes the “prudent person” standard for managing the assets of the System. The Board has established the following policies:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

1) Assure that the System’s investment policy has been designed to provide broad diversification among asset classes in order to maximize return at an appropriate level of risk and minimize the risk of large losses to the System.

2) Employ a diversity of investment managers with different investment styles on how to obtain their investment objective.

3) Closely monitor the performance of all investment managers not only in relation to specific objectives, but also in relation to other fund managers following the same investment objectives.

The System is currently invested in stocks (domestic and foreign), fixed income securities, private equity funds, real estate funds, and global asset allocation funds. The Code provides for full power to hold, purchase, sell, assign, transfer and dispose of any of the securities and investments in any of the System’s funds. For the year ended June 30, 2020, the System has operated in all material respects in accordance with the System’s investment policy.

The System’s investment policy as of June 30, 2020, is shown below for the broad investment categories:

Asset Class Allocation Target Allocation Range

U. S. Equities 28% 22 - 34%

International Equities 21% 15 - 27%

Private Equities 9% 0 - 12%

Fixed Income 27% 21 - 33%

Real Estate 5% 0 - 7%

Global Asset Allocation 10% 7 - 13%

Cash and Cash equivalents 0% 0 - 5%

Total 100%

Rate of Return: For the year ended June 30, 2020, the annual money-weighted rate of return on OPEB plan investments, net of OPEB investment expense, was 0.27%.The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Net OPEB Liability (including component units): At June 30, 2020, the County has a net OPEB liability of $4,594,358. The net OPEB liability was measured as of June 30, 2020 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of that date.

The components of the net OPEB liability at June 30, 2020, were as follows:

Total OPEB liability 4,836,399$ Fiduciary net position (242,041) County's net OPEB liability 4,594,358$

Plan fiduciary net position as a percentage of the total OPEB liability 5.00%

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Actuarial Assumptions: The total OPEB liability in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.2%

Salary increases 0%-6.55%

Investment rate of return 6.375%

Health Mortality RP 2000 projected by scale AA Cost of living adjustments N/A

Healthcare cost trend rates 3.9%-5.4%

The long-term expected rate of return on OPEB investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of OPEB investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2020 are summarized in the table below.

Asset Class Long-Term Expected

Rate of Return Target asset Allocation

Cash -0.36% 0.00% Large Cap Equities 3.85% 21.00% Small/Mid Cap Equities 4.29% 7.00% International Equities (Unhedged) 4.10%

14.00%

Emerging International Equities

6.35% 50

7.00% 50 Core Bonds 0.66% 5.00%

Core Bonds - Short 0.37% 5.00% Bank Loans 2.40% 3.00% EMD (Local Currency) 2.38% 5.00% Diversified Fixed Income 1.86% 9.00% Private Equity 7.75% 9.00% Real Estate (Core) 3.11% 5.00% Risk Parity 3.13% 5.00% Global Asset Allocation 3.46% 5.00%

Discount Rate: The discount rate used to measure the total OPEB liability was the funding valuation interest rate of 2.46% as of June 30, 2020. The projection of cash flow used to determine the discount rate assumed that employer contributions will continue to follow the current funding policy. Based on those assumptions, the Plan’s fiduciary net position was projected to make all future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB investments was applied to all periods of projected benefit payments to determine the total OPEB liability, in accordance with the method prescribed by GASB Statement No. 74. In the event of benefit payments not covered by the Plan’s fiduciary net position, a municipal bond rate of 2.45% for FY20 would be used to discount the benefit payments not covered by the Plan’s fiduciary net position. The 2.45% rate equals the S&P Municipal Bond 20-Year High Grade Rate index at June 30, 2020. In determining the discount rate, the actuary estimated future contributions based on the average of the County contributions over the 5 year period between fiscal years

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

2016-2020. Sensitivity of the net OPEB liability to changes in the discount rate: The following presents the net OPEB liability, calculated using the discount rate of 2.46%, as well as what the County’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (1.46%) or 1-percentage-point higher (3.46%) than the current rate:

1.00% Decrease (1.46%)

Current Discount Rate (2.46%)

1.00% Increase (3.46%)

Net OPEB Liability 5,539,719$ 4,594,358$ 3,851,873$

Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the net OPEB liability, calculated using the healthcare trend rate of 3.90% and a trend rate that is 1-percentage-point lower (2.90%) and 1-percentage-point higher (4.90%) than the current rate:

1.00% Decrease (2.90%)

Healthcare Cost Trend Rate

(3.90%) 1.00% Increase

(4.90%) Net OPEB Liability 3,788,014$ 4,594,358$ 5,669,825$

GASB 75 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions Net OPEB Liability: At June 30, 2020, the County reported a net OPEB liability of $1,696,611 which was measured as of June 30, 2019 and total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of that date.

The components of the net OPEB liability at June 30, 2019, were as follows:

Total OPEB liability 1,822,918$ Fiduciary net position (126,307) County's net OPEB liability 1,696,611$

Plan fiduciary net position as a percentage of the total OPEB liability 6.93%

Actuarial Assumptions: The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Inflation 3.0%

Salary increases 0%-5.70%

Investment rate of return 6.375% blended rate

Health Mortality RP-2000 projected by Scale AA.

Cost of living adjustments N/A The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long- term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric rates of return for each major asset class included in the System’s target asset allocation as of June 30, 2019 are summarized in the table below:

Schedule of Long-term expected rate of return

Asset Class Long-Term Expected

Rate of Return Target asset

Allocation Large Cap Equities 4.75% 19.00%

Small/Mid Cap Equities 5.00% 7.00%

International Equities (Unhedged) 5.00% 16.00%

Emerging International Equities 6.50% 8.00%

Core Bonds 1.62% 5.00%

Core Bonds (Short) 0.25% 5.00%

Bank Loans 2.75% 3.00%

EMD (Local Currency) 4.00% 4.00%

Diversified Fixed Income 1.70% 9.00%

Private Equity 8.40% 7.00%

Real Estate (Core) 3.50% 5.00%

Global Asset Allocation 3.47% 6.00%

Risk Parity 2.27% 6.00%

Discount Rate: The discount rate used to measure the total OPEB liability was the funding valuation interest rate of 3.15 % as of June 30, 2019. The projection of cash flow used to determine the discount rate assumed that employer contributions will continue to follow the current funding policy. Based on those assumptions, the System’s fiduciary net position was projected to make all future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB investments was applied to all periods of projected benefit payments to determine the total OPEB liability, in accordance with the method prescribed by GASB Statement No. 74. In the event of benefit payments not covered by the System’s fiduciary net position, a municipal bond rate of 2.79% for FY19, would be used to discount the benefit payments not covered by the System’s fiduciary net position. The 2.79% rate equals the S&P Municipal Bond 20-Year High Grade Rate index at June 30 2019.

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB

Liability Net Position Liability (a) (b) (a) - (b)

Balances at 6/30/18 1,308,041$ 170,019$ 1,138,022$ Changes for the year:

Service Cost 30,677 - 30,677 Interest 49,217 - 49,217 Changes of Benefit Terms (183) - (183) Experience Losses 184,129 - 184,129 ER Trust Contribution - 2,392 (2,392) Net Investment Income - 4,012 (4,012) Changes in Assumptions 352,905 - 352,905 Changes in Proportion (59,483) (7,731) (51,752) Benefit Payments (42,385) (42,385) - Administrative Expense - Net Changes 514,877 (43,712) 558,589

Balances at 6/30/19 1,822,918$ 126,307$ 1,696,611$

Sensitivity of the County’s proportionate share of the OPEB liability to changes in the discount rate: The following presents the County’s proportionate share of the OPEB liability calculated using the discount rate of 3.15 percent, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.15 percent) or 1-percentage-point higher (4.15 percent) than the current rate:

1.00% Decrease (2.15%)

Current Discount Rate

(3.15%)

1.00% Increase (4.15%)

County's proportionate share

of the OPEB liability 2,037,650$ 1,696,611$ 1,426,906$

Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the net OPEB liability, calculated using the healthcare trend rate of 3.90% and a trend rate that is 1-percentage-point lower (2.90%) and 1-percentage-point higher (4.90%) than the current rate:

1.00% Decrease (2.90%)

Healthcare Cost Trend Rate

(3.90%)

1.00% Increase (4.90%)

Net OPEB Liability 1,416,676$ 1,696,611$ 2,064,634$

OPEB Expense: For the year ended June 30, 2020 the County recognized OPEB expense of $176,608. At June 30, 2020 the County reported deferred outflows of resources and deferred inflows of resources related to the OPEB plan from the following sources:

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

Deferred Deferred Outflows Inflows

of Resources of Resources

Net difference between projected and actual experience 165,295$ -$ Changes in assumptions 546,815 - Net difference between projected and actual earnings on

OPEB plan investments 4,047 6,893 Change in proportion - 47,070 Total 716,157$ 53,963$

Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows:

Year ended June 30: 2021 105,968$ 2022 105,968 2023 108,460 2024 109,096 2025 108,037 Thereafter 124,665

78

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

The condensed financial statements as of and for the year ended June 30, 2020 are as follows (in thousands):

Statement of Fiduciary Net Position OPEB Plan

As of June 30, 2020

Assets Cash and cash equivalents 9,903$ Investments, at fair value 232,858 Collateral for loaned securities (net of unrealized loss) 1,213 Receivables:

Accrued interest & dividend income 295 Receivable for investments sold 1,511 Receivables other 1,450

Total assets 247,230

Liabilities Payable for collateral for loaned securities 1,213 Investments purchased 2,827 Investment expenses payable 443 Other 706

Total liabilities 5,189

Net position Net position restricted for benefits 242,041$

Statement of Changes in Fiduciary Net Position OPEB Plan

For the year ended June 30, 2020

Additions Contributions:

Employer 35,435$ Employee 37,921 On-behalf 26,688

Total contributions 100,044 Investment earnings:

Net decrease in the fair value of plan assets (2,064) Interest and dividends 3,597 Securities lending net income 14 Investment expenses (2,074)

Net investment gain (527) Total additions 99,517

Deductions Benefits 153,575

Total deductions 153,575 Change in net position (54,058) Net position at beginning of the year 296,099 Net position at end of the year 242,041$

79

BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

14. INDIVIDUAL FUND DISCLOSURES:

Details of Fund Balances The details of the Governmental Funds balances at June 30, 2020 are shown as follows (in thousands):

Consolidated Gifts Public Nonmajor Total and Improvement Governmental Governmental

General Grants Construction Fund Funds Fund balances Nonspendable: Inventories 10,748$ -$ -$ -$ 10,748$

Total Nonspendable 10,748 - - - 10,748 Restricted for:

Equipment financing 68,589 - - - 68,589 Bond escrow 5,951 - - - 5,951 Loans, guarantees and grants - 22,647 - - 22,647 In lieu of fee arrangements - - 17,674 - 17,674

Total Restricted 74,540 22,647 17,674 - 114,861 Assigned to:

Encumbrances for: Contractual services 3,316 - - - 3,316 Supplies & materials 964 - - - 964 Equipment & other 1,730 - - - 1,730 Imprest funds 74 - - - 74 Loans & grants - 11,995 - - 11,995 Retirement of long-term debt 64,236 - - - 64,236 Disputed taxes 25,427 - - - 25,427 Stormwater remediation - - - 100 100 Liquor license regulation - - - 142 142

Total Assigned 95,747 11,995 - 242 107,984 Unassigned:

Revenue stabilization 215,634 - - - 215,634 Other 121,434 - (95,881) - 25,553

Total Unassigned 337,068 - (95,881) - 241,187 Total fund balances(deficit) 518,103$ 34,642$ (78,207)$ 242$ 474,780$

Deficit Fund Balance At June 30, 2020, the Consolidated Public Improvement Construction Fund had an unassigned fund deficit of $95.881 million. This deficit will be eliminated by pay-as-you-go contributions from the General Fund and from bond proceeds. 15. TAX ABATEMENTS: As of June 30, 2020, the County provides tax abatements through four programs – Payment in Lieu of Taxes (PILOT), Historical Property County Tax Credit, Enterprise Zone Tax Credit, and Conservation Land Tax Credit. The Payment in Lieu of Taxes Program provides property tax abatements to encourage an increase in the number of senior and low income housing and is authorized under Maryland State Law, Tax – Property Article Section 7- 502. Abatements are obtained through contract between property owner and the County; under the agreement, the owner pays the County a negotiated amount in lieu of property tax. The amount of abatement is deducted from the recipient’s tax bill. Historical Property Tax Credit provides property tax abatements to encourage the renovation or rehabilitation of properties listed in a historical register or in a historic district and is authorized under County Code Section 11-2- 201. Abatements are obtained through application by the property owner, including proof that the improvements

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

have been made. Commercial property tax abatements are based on the increase of the assessed value as a result of the improvements made. Residential property tax abatements are 20% of actual approved renovation or rehabilitation expenses. Both commercial and residential properties must not be altered so that it no longer complies with the rehabilitation standards by which the property obtained eligibility. The amount of abatement is deducted from the recipient’s tax bill. Enterprise Zone Tax Credit provides property tax abatements to encourage economic growth in distressed areas of the County and is authorized under Maryland State Law, Tax – Property Article Section 9-103. Abatements are obtained through an application process. Taxpayer submits application to the Baltimore County Department of Economic and Workforce Development which is forwarded to the Maryland State Department of Commerce for review and approval. Approved applications are returned to the County; award letters are sent to the taxpayer and the State Department of Assessments and Taxation (SDAT). SDAT then certifies the credit base to Baltimore County Office of Budget and Finance. Eligible companies that make improvements to real property in one of the Enterprise Zones can benefit from property tax credits over a 10 year period. For the first 5 years, the tax credit is equal to 80% of the increase in property tax owed resulting from the new investment. The tax credit declines in the remaining five years by 10% annually. The amount of abatement is deducted from the recipient’s tax bill. (See page XII for more information.) Conservation Land Tax Credit provides property tax abatements to encourage preservation of natural areas and agricultural land under County Code Section 11-2-110. Abatements are obtained through application by the property owner, accompanied by proof that the property meets the definition of “conservation land”. Conservation land is defined as real property that is subject to a perpetual conservation easement that was donated to a land trust on or after July 1, 1991. Conservation land also includes real property that is owned in fee by a qualified land trust and was acquired by the trust on or after July 1, 1991. The credit is for 100% of the property tax obligation and has a duration of five years. If the property is transferred to an entity other than a government agency or another qualified trust, the credit will lapse and the property owner will become liable for all the property taxes had the credit not been granted, as well as interest on those taxes. The amount of abatement is deducted from the recipient’s tax bill.

Property Taxes Abated

Fiscal Year 2020

(in thousands)

Payment in Lieu of Taxes 3,898$

Historical Property Tax Credit 136

Enterprise Zone Tax Credit 2,730

Conservation Land Tax Credit 8

Total 6,772$

16. NEW ACCOUNTING PRONOUNCEMENTS: The County has adopted the provisions of Governmental Accounting Standard Board (GASB) issued Statement No. 95, entitled Postponement of the Effective Dates of Certain Authoritative Guidance. The adoption of this standard did not have a material effect on these statements. 17. SUBSEQUENT EVENTS: On July 29, 2020, the County sold $41,460,000 Metropolitan District Bonds – 2020 Refunding Series and $12,735,000 Consolidated Public Improvement Bonds 2020 Refunding Series. The Baltimore County Metropolitan

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BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS

JUNE 30, 2020

District Bonds – 2020 Refunding Series were issued for the purpose of refunding $50,730,000 principal amount of Baltimore County Metropolitan District Refunding Bonds – 2010 Refunding Series. The Baltimore County Consolidated Public Improvement Bonds – 2020 Refunding Series were issued for the purpose of refunding $13,315,000 principal amount of Baltimore County Consolidated Public Improvement Bonds – 2010 Refunding Series.

The Metropolitan District Bonds – 2020 Refunding Series are due August 1, in each of the years 2022 to 2030, inclusive. The Consolidated Public Improvement Bonds – 2020 Refunding Series are due August 1, in each of the years 2021 to 2022, inclusive. The interest rate is 5.000%. The net proceeds of the refunding were invested in State and Local Government Securities (SLGS) and deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments. As a result of the refunding, the aggregate difference between the refunding debt and the refunded debt was $9,485,821 or an economic gain of $9,442,622. The refunded bonds will be considered defeased and the liability for those bonds will be removed from the government-wide statement of net position.

On November 25, 2020, Baltimore County Public Schools (BCPS), a component unit of the County, was the victim of a ransomware attack. The County has been closely working with BCPS in offering technical assistance and guidance. This event has no impact on the financial statements presented June 30, 2020. At this time, the long- term impact on the operations of BCPS cannot be determined.

82

Required Supplementary Information

83

BALTIMORE COUNTY, MARYLAND REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2020

Employees’ Retirement System (dollars in thousands):

Schedule of the County's Proportionate Share of the Net Pension Liability and Related Ratios (Measurement date June 30 of the stated year)

2019 2018 2017 2016 2015 County's proportionate share of the net pension liability 92.47% 92.40% 91.81% 92.23% 90.45%

County's proportionate share of the net pension liability 1,818,497$ 1,655,035$ 1,546,969$ 1,610,549$ 1,315,135$

County's covered payroll 470,920$ 458,692$ 457,327$ 435,266$ 418,026$

County's proportionate share of the net pension liability as a percentage of its covered payroll 386.16% 360.82% 338.26% 370.02% 314.61%

Plan fiduciary net position as a percentage of the total pension liability 58.7% 60.9% 61.5% 57.1% 62.8%

Schedule of the County's Proportionate Share of the Net Pension Liability and Related Ratios (Continued) (Measurement date June 30 of the stated year)

2014 County's proportionate share of the net pension liability 91.96%

County's proportionate share of the net pension liability 1,088,771$

County's covered payroll 411,453$

County's proportionate share of the net pension liability as a percentage of its covered payroll 264.62%

Plan fiduciary net position as a percentage of the total pension liability 68.2%

Notes to the Schedule: The County implemented GASB 68 in fiscal year 2015. As such, only six years of information is available.

84

BALTIMORE COUNTY, MARYLAND REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2020

Schedule of County Contributions The last 7 fiscal years are presented only

2020 2019 2018 2017 2016 2015

Actuarially determined contribution 136,000$ 127,976$ 119,253$ 108,549$ 101,927$ 93,495$

Contributions in relation to the

actuarially determined contribution 136,000 127,976 119,253 108,549 97,108 93,495

Prefunding of the FY2016

contribution in FY2015 - - - - - 4,819 Contribution deficiency (excess) -$ -$ -$ -$ 4,819$ (4,819)$

Covered payroll 488,565$ 470,920$ 458,692$ 457,327$ 435,266$ 418,026$

27.84% 27.18% 26.00% 23.74% 22.31% 23.52% Contributions as a percentage of covered payroll

Schedule of County Contributions (Continued) The last 7 fiscal years are presented only

2014

Actuarially determined contribution 73,586$

Contributions in relation to the

actuarially determined contribution 73,586

Prefunding of the FY2016

contribution in FY2015 - Contribution deficiency (excess) -$

Covered payroll 411,453$

17.88% Contributions as a percentage of covered payroll

Notes to the Schedule: Valuation date: Actuarially determined contribution amounts are calculated as of the beginning of the fiscal year (July 1) for the year immediately following the fiscal year. Actuarial valuations are performed every year. Methods and assumptions used to determine contribution: Actuarial cost method Projected Unit Credit Amortization method Level Percentage of Payroll Amortization period 27 year layered amortization Asset valuation method 10-year smoothed market Inflation 3.0% Salary increases Rates vary by participant age and service

85

BALTIMORE COUNTY, MARYLAND REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2020

Investment rate of return 6.375%, net of investment expense and gain sharing, and including inflation

Retirement age Rates vary by participant age and service Mortality For healthy participants and beneficiaries: For males 108% of the RP-2000

Combined Healthy male table projected to 2032 by Scale AA and for females 100% of the RP-2000 Combined Healthy female table projected to 2032 by Scale AA. For disabled members, RP-2000 Disabled Annuitant Tables projected to 2032 with Scale AA.

Police, Fire and Widow’s Pension Plan (dollars in thousands): The following schedules are presented for six years. Additional years will be presented as the information becomes available. Schedule of Changes in County's Net Pension Liability and Related Ratios (Measurement date June 30 of the stated year)

2019 2018 2017 2016 2015 2014 Total pension liability

Interest 1,447 1,681 1,735 2,255 2,597 3,341

Differences between expected and actual

experience (1,016) (1,796) (2,929) 620 (3,272) -

Changes of assumptions (2,296) (99) (1,502) 2,356 (186) 3,425

Benefit payments (5,908) (6,463) (7,353) (8,210) (8,657) (9,622)

Net change in total pension liability (7,773) (6,677) (10,049) (2,978) (9,518) (2,856)

Beginning total pension liability 39,504 46,181 56,230 59,208 68,726 71,582

Ending total pension liability: (a) 31,731$ 39,504$ 46,181$ 56,230$ 59,208$ 68,726$

Plan fiduciary net position Net investment income 1,247 1,872 3,340 1,017 2,486 4,671 Benefit payments (5,908) (6,463) (7,353) (8,210) (8,657) (9,622) Other income 12 11 13 14 15 14 Net change in plan fiduciary net position (4,649)$ (4,580)$ (4,000)$ (7,179)$ (6,156)$ (4,937)$

Beginning Plan fiduciary net position 23,269 27,849 31,849 39,028 45,184 50,121 Ending Plan fiduciary net position: (b) 18,620$ 23,269$ 27,849$ 31,849$ 39,028$ 45,184$

Ending County's net pension liability: (a) - (b) 13,111$ 16,235$ 18,332$ 24,380$ 20,180$ 23,542$

Plan fiduciary net position as a percentage

of the total pension liability 58.68% 58.90% 60.30% 56.64% 65.92% 65.74%

Covered payroll Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Net pension liability as a percentage of covered payroll Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable

County's net pension liability as a percentage of covered payroll Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable

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BALTIMORE COUNTY, MARYLAND REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2020

2019 2018 2017 2016 2015 2014 Actuarially determined contribution Not calculated Not calculated Not calculated Not calculated Not calculated Not calculated

-$ -$ -$ -$ -$ -$ Contribution deficiency (excess) Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable

Contributions related to the actuarially determined contribution

Schedule of County Contributions

Note to Schedule: County contributions were not calculated because the Pension Plan has been closed since October 1, 1959 and the County intends to fund the Pension Plan on a pay-as-you-go basis if the Pension Plan assets are depleted. Also, the number of pension recipients was considered insignificant and the recipients’ ages are at the higher end of the mortality tables. Schedule of Investment Returns

2019 2018 2017 2016 2015 2014 Annual money-weighted rate of return, 3.60% 7.13% 12.04% 3.36% 5.70% 10.31% net of investment expenses

87

BALTIMORE COUNTY, MARYLAND REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2020

Schedule of Changes in Total Liability and Related Ratios

Total OPEB Liability

2020 2019 2018 2017

Service Cost 110,599$ 71,426$ 37,165$ 34,938$

Interest Cost 131,864 114,929 128,366 124,086

Difference of Expected and Actual Experience (25,687) 425,827 13,026 766

Change in Benefit Terms - (425) - -

Changes in Assumptions 465,123 820,137 777,119 -

Benefit Payments (88,966) (98,501) (105,352) (92,979)

Net Change in Total OPEB Liability 592,933 1,333,393 850,324 66,811

Total OPEB Liability - Beginning of Year 4,243,466 2,910,073 2,059,749 1,992,938

Total OPEB Liability - End of Year 4,836,399$ 4,243,466$ 2,910,073$ 2,059,749$

Plan Fiduciary Net Position

2020 2019 2018 2017

Contributions Employer 35,435$ 5,727$ 30,672$ 65,729$

Net Investment Income (527) 9,473 32,023 53,408

Benefit Payments (88,966) (98,501) (105,352) (92,979)

Net Change in Fiduciary net Position (54,058) (83,301) (42,657) 26,158

Fiduciary Net Position - Beginning of Year 296,099 379,400 422,057 395,899

Fiduciary Net Position - End of Year 242,041$ 296,099$ 379,400$ 422,057$

Net OPEB Liability 4,594,358 3,947,367 2,530,673 1,637,692

5.00% 6.98% 13.04% 20.49%

Covered Payroll Not Applicable Not Applicable Not Applicable Not Applicable

Net OPEB Liability as a percentage of Covered

Payroll Not Applicable Not Applicable Not Applicable Not Applicable

8 8 7 7

Money-Weighted Rate of Return 0.27% 3.90% 7.60% 13.60%

Notes to Schedule

Fiduciary Net Position as a percentage of Total OPEB Liability

Amounts in the schedule represent totals for the County, BCPS, CCBC and BCPL. Individual amounts are not available and therefore not reported. The County implemented GASB 74 during Fiscal Year 2017. Therefore, only four years information is available.

(OPEB benefits do not depend on salary; therefore, salary information is not applicable)

Expected Average Remaining Service Years of All Participants

88

BALTIMORE COUNTY, MARYLAND REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2020

Schedule of the County's Proportionate Share of the OPEB Liability and Related Ratios (Measurement date June 30 of the stated fiscal year)

2019 2018 2017

County's proportionate share of the OPEB liability 43.03% 45.08% 46.13%

County's proportionate share of the OPEB liability 1,696,611$ 1,138,022$ 755,274$

County's covered payroll 488,565$ 458,692$ 457,327$

County's proportionate share of

the net OPEB as a

percentage of its covered

payroll 347.26% 248.10% 165.15%

Plan fiduciary net position

as a percentage of the total

OPEB liability 6.93% 13.00% 20.46%

Notes to Schedule

The County implemented GASB 75 during fiscal year 2018 using a measurement date of 6/30/2017. As such, only three years of information is available.

89

90

Supplementary Information Schedules & Combining Financial Statements

The schedules provide selected budgetary information concerning the General Fund, the Stormwater Management Fund and the Liquor License Fund. The combining financial statements provide detailed information concerning financial position and results of operations for the Internal Service funds and Fiduciary funds.

91

Baltimore County Schedule of Appropriations and Expenditures - Budgetary Basis

For the Year Ended June 30, 2020 (In Thousands)

Actual Variance with Amounts - Final Budget -

Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

General Government: Legislative:

County Council 2,660 2,660 2,320 340 Judicial:

Circuit Court: Criminal and civil adjudication 5,065 5,065 4,881 184

Orphans Court: Adjudication of estates 267 267 267 -

States Attorney: Criminal prosecution 10,059 10,059 9,665 394

County Sheriff: Conveying prisoners and serving summonses 5,466 5,541 4,868 673

Total 20,857 20,932 19,681 1,251 Executive:

Office of the County Executive 1,065 1,065 856 209 County Administrative Officer:

General administration 1,860 1,860 1,576 284 Baltimore metropolitan council 146 146 146 - Government reform and strategic initiatives 1,196 1,196 877 319

Total 4,267 4,267 3,455 812 Elections:

Board of Supervisors of Elections 5,573 5,898 4,198 1,700 Financial Administration:

Office of Budget and Finance: Budget formulation and administration 1,423 1,518 1,431 87 Financial operations 4,133 4,133 4,034 99 Pay systems 228 233 231 2 Investment and debt management 429 429 422 7 Insurance administration 1,019 1,120 1,113 7 Purchasing and disbursements 1,386 1,456 1,451 5

Total 8,618 8,889 8,682 207 County Auditor 1,688 1,688 1,515 173 Office of Law:

General legal services 2,818 2,818 2,734 84 Legislative relations 345 345 336 9 Workers compensation 1,137 1,137 1,120 17

Total 4,300 4,300 4,190 110 Other:

Vehicle Operations and Maintenance 459 459 412 47 Office of Planning and Community Conservation

General administration 2,295 2,495 2,269 226 Zoning commissioner 473 473 460 13 People's counsel 203 204 204 - Community conservation 4,882 4,882 4,677 205

Office of Human Resources: Personnel administration 3,174 3,174 2,762 412

(continued)

92

Baltimore County Schedule of Appropriations and Expenditures - Budgetary Basis

For the Year Ended June 30, 2020 (In Thousands)

Actual Variance with Amounts - Final Budget -

Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

Department of Permits and Development Management: General administration 1,650 1,650 1,613 37 Electrical licensing and regulation 19 19 12 7 Plumbing licensing and regulation 31 31 31 - Real estate compliance (1713) 970 924 857 67 Development processing 986 994 992 2 Code inspections and enforcement 5,552 5,552 5,372 180 Permits and licenses 861 898 880 18

Board of Appeals 246 246 241 5 Cooperative Extension Service 266 266 227 39 Office of Information Technology:

General administration 3,337 3,397 3,337 60 Applications development 9,557 9,497 9,384 113 Computer and technical services 14,229 14,229 13,934 295 Telecommunications Services 3,240 3,240 3,189 51

Office of Ethics and Accountability 164 164 82 82 Property Management

Adminsitration 1,557 1,557 1,488 69 Building maintenance 8,929 8,929 8,529 400 Building operation and management 17,886 18,415 16,608 1,807 Maintenance of grounds and recreation sites 8,123 8,123 7,474 649

Total 89,089 89,818 85,034 4,784 General Government Total 137,052 138,452 129,075 9,377

Public Safety: Police Department:

General administration 4,165 4,688 4,335 353 Administrative & technical services 28,578 29,086 26,722 2,364 Criminal/forensic investigations 31,882 32,581 32,443 138 Vice/intelligence/narcotics 10,417 10,615 10,286 329 Patrol/precincts 133,352 136,822 133,022 3,800 Support operations 15,448 16,217 15,996 221 Human resources 5,906 6,204 5,978 226 School safety 1,365 1,400 1,296 104

Total 231,113 237,613 230,078 7,535 Bureau of Corrections:

Custodial care of prisoners 43,467 43,467 43,025 442 Fire Department:

General administration 1,422 1,422 1,181 241 Investigative services 1,747 1,747 1,656 91 Alarm and communication system 541 592 550 42 Field operations 86,875 90,175 88,486 1,689 Office of emergency preparedness 238 238 156 82 Field operation administration 2,024 2,024 1,888 136 Fire/rescue academy 1,326 1,275 1,099 176 Contributions - volunteer fire companies 9,820 9,820 9,560 260

Total 103,993 107,293 104,576 2,717

(continued)

93

Baltimore County Schedule of Appropriations and Expenditures - Budgetary Basis

For the Year Ended June 30, 2020 (In Thousands)

Actual Variance with Amounts - Final Budget -

Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

Communications: Central communications center 15,006 15,316 14,872 444

Public Safety Total 393,579 403,689 392,551 11,138

Public Works: Office of Director of Public Works:

General administration 656 590 546 44 Metro Financing/Petition Proc 54 55 54 1

710 645 600 45 Bureau of Engineering and Construction:

General administration 387 387 341 46 Structural design 1,812 1,732 1,721 11 General surveying 382 402 400 2 Contracts and construction inspection 1,717 1,812 1,805 7

Total 4,298 4,333 4,267 66 Bureau of Highways & Equipment Management:

General administration 648 638 591 47 General operations and maintenance 13,469 13,554 11,661 1,893 Storm emergencies 8,422 4,292 3,626 666

Total 22,539 18,484 15,878 2,606 Bureau of Solid Waste Management:

General administration 524 509 506 3 Refuse collection 33,829 33,884 33,747 137 Refuse disposal 20,714 22,439 22,269 170 Recycling 1,996 1,946 1,837 109 MRF operations 4,021 4,621 4,137 484

Total 61,084 63,399 62,496 903 Bureau of Traffic Engineering and Transportation Planning:

Traffic planning 8,391 8,141 7,473 668 Traffic sign installation and maintenance 1,874 1,874 1,818 56 Traffic signal operation and maintenance 982 972 942 30

Total 11,247 10,987 10,233 754 Bureau of Utilities:

Sewer and water maintenance 574 574 4 570 Bureau of Building and Equipment Services:

Equipment maintenance 7,553 8,433 7,867 566 Public Works Total 108,005 106,855 101,345 5,510

(continued)

94

Baltimore County Schedule of Appropriations and Expenditures - Budgetary Basis

For the Year Ended June 30, 2020 (In Thousands)

Actual Variance with Amounts - Final Budget -

Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

Health and Human Services: Health:

Department of Health: General administration 3,279 3,684 3,586 98 Nursing services 3,131 3,329 3,119 210 Acute communicable disease control 1,400 1,857 1,353 504 Medical environmental health 2,842 2,894 2,701 193 Medical social work service 1,300 1,300 1,143 157 Animal services 3,235 3,382 3,336 46 School Health Services 1,014 1,014 839 175 Developmental disabilities 2,141 2,161 2,032 129 Long-term care services 2,377 2,461 2,302 159 Medical assistance and hospital support 1,401 1,498 1,425 73 Dental health services 917 957 935 22

Total 23,037 24,537 22,771 1,766 Department of Environmental Protection and Resource Management 5,694 5,694 5,483 211

Human Services: Department of Social Services:

Adult foster care assistance 145 145 145 - Welfare to work program 400 400 400 - Human relations 112 112 103 9 Emergency funds/housing for the homeless 685 685 405 280 Battered spouse program 127 127 127 - Day Resource Center 164 164 67 97 In-home care program 323 323 297 26 Adult services 1,422 1,416 1,335 81 General administration 1,892 1,892 1,879 13 Children's services 529 534 533 1 Income maintenance 992 992 859 133 Family services 1,716 1,716 1,525 191

Total 8,507 8,506 7,675 831 Aging Programs & Services:

Department of Aging: General administration 810 810 802 8 Adult medical day care 50 50 35 15 Senior centers network 2,194 2,213 2,203 10 Special geriatric services 210 210 199 11 Facilities 253 253 235 18 Transportation 872 872 817 55 Program and volunteer services 236 218 177 41

Total 4,625 4,626 4,468 158 Health and Human Services Total 41,863 43,363 40,397 2,966

(continued)

95

Baltimore County Schedule of Appropriations and Expenditures - Budgetary Basis

For the Year Ended June 30, 2020 (In Thousands)

Actual Variance with Amounts - Final Budget -

Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

Culture and Leisure Services: Department of Recreation and Parks:

General administration 1,079 1,079 936 143 Community & neighborhood recreation, organization, direction and development 10,453 11,293 10,015 1,278

Organization Contributions: Organization contributions 2,623 2,623 2,618 5 General grant program 3,327 3,327 3,241 86

Culture and Leisure Services Total 17,482 18,322 16,810 1,512

Economic and Community Development: Economic Development Commission 1,489 1,489 980 509 Economic and Community Development Total 1,489 1,489 980 509

Pension Plan Contributions: Employees' retirement contributions 131,419 131,419 131,419 - Non-system retirement 328 328 321 7 Pension Total 131,747 131,747 131,740 7

Insurance Contributions Employee health & life insurance 110,819 110,819 86,318 24,501 Insurance Total 110,819 110,819 86,318 24,501

Miscellaneous: Social Security 20,264 20,189 19,636 553 Reserve for Contingencies 1,000 1 - 1 Local share - State & Federal - 150 75 75 Miscellaneous Total 21,264 20,340 19,711 629

Payments to Component Units: Community College 53,908 54,734 54,734 - Board of Education 913,149 913,149 913,149 - Library 35,024 35,024 34,978 46 Total Payments to Component Units 1,002,081 1,002,907 1,002,861 46

(continued)

96

Baltimore County Schedule of Appropriations and Expenditures - Budgetary Basis

For the Year Ended June 30, 2020 (In Thousands)

Actual Variance with Amounts - Final Budget -

Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

Debt Service: Principal retirement:

General obligation bonds: Community College 7,615 7,615 7,615 - General public facilities 57,080 57,080 57,080 - Pension funding bonds 9,916 9,916 9,916 -

Non-general obligation debt 23,141 23,141 23,141 - Total 97,752 97,752 97,752 -

Interest: General obligation bonds:

Community College 4,168 4,168 4,168 - General public facilities 24,714 24,714 24,714 - Pension funding bonds 11,197 11,197 11,197 -

Non-general obligation debt 1,926 1,926 1,922 4 Total 42,005 42,005 42,001 4

Fiscal charges: General obligation bonds:

General public facilities 100 100 52 48 Non-general obligation debt 5 5 3 2

Total 105 105 55 50 Debt Service Total 139,862 139,862 139,808 54

Operating Transfers Out: Contribution to capital budget 39,077 38,251 30,251 8,000 Gifts and Grants 9,361 9,410 9,410 - Operating Transfers Out Total 48,438 47,661 39,661 8,000

General Fund Total 2,153,681$ 2,165,506$ 2,101,257$ 64,249$

General Fund

97

Total ASSETS Cash and investments 161$ -$ 60$ 221$ Receivables, net - - 40 40 Total assets 161$ -$ 100$ 261$

LIABILITIES AND FUND BALANCES Liabilities Accounts payable 2$ -$ -$ 2$ Accrued expenditures 17 - - 17 Total liabilities 19 - - 19

Fund Balance Assigned 142 - 100 242

Total fund balances 142 - 100 242 Total liabilities and fund balances 161$ -$ 100$ 261$

Owings Mills Tax District

Liquor License

Stormwater Management

Special Revenue Funds

Baltimore County, Maryland Combining Balance Sheet

Nonmajor Governmental Funds June 30, 2020

(In Thousands)

98

Liquor License

Owings Mills Tax District

Stormwater Management Total

REVENUES Taxes -$ 1,500$ -$ 1,500$ Licenses and fees 811 - - 811 Charges for services 60 - - 60 Interest revenue - - - -

Total revenues 871 1,500 - 2,371

EXPENDITURES General government 710 1,500 - 2,210

Total expenditures 710 1,500 - 2,210 Excess of revenues over expenditures 161 - - 161

OTHER FINANCING USES Transfers out (450) - - (450)

Total other financing uses (450) - - (450) Net change in fund balances (289) - - (289)

Fund balances at beginning of the year 431 100 531 Fund balances at end of the year 142$ -$ 100$ 242$

Special Revenue Funds

Baltimore County, Maryland Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Governmental Funds For the Year Ended June 30, 2020

(In Thousands)

99

Variance Positive

Budget Actual (Negative) Revenues: Licenses and permits 1,140$ 811$ (329)$ Charges for services 110 60 (50)

Total revenues 1,250 871 (379) Expenditures: General government:

License sale and control 731 710 21 Total expenditures 731 710 21 Excess of revenues over expenditures 519 161 (358)

Other financing uses: Operating transfers out (450) (450) -

Excess of revenues over expenditures, and other uses 69$ (289) (358)$ Fund balance at beginning of year 431 Fund balance at end of year 142$

Baltimore County, Maryland Schedule of Revenues, Expenditures,

For the Year Ended June 30, 2020 (In Thousands)

and Changes in Fund Balance - Budget and Actual Liquor License Fund

100

Vehicle Operations Central

and Printing Self-Insurance Maintenance Service Program Total

ASSETS Current assets:

Cash and investments 4,058$ 280$ 99,757$ 104,095$ Receivables, net 41 - 2,471 2,512 Inventories 535 - - 535 Prepaid costs - - 1,135 1,135

Total current assets 4,634 280 103,363 108,277 Capital assets:

Non-depreciable 705 - - 705 Depreciable (net of accumulated depreciation) 17,815 8 - 17,823

Total assets 23,154 288 103,363 126,805

LIABILITIES Current liabilities:

Accounts payable 773 23 1,233 2,029 Accrued payroll 119 6 - 125 Compensated absences 249 13 - 262 Claims and judgments - - 39,280 39,280

Total current liabilities 1,141 42 40,513 41,696 Noncurrent liabilities: Claims and judgments - - 37,621 37,621

Total liabilities 1,141 42 78,134 79,317

NET POSITION Net investment in capital assets 18,520 8 - 18,528 Unrestricted 3,493 238 25,229 28,960

Total net position 22,013$ 246$ 25,229$ 47,488$

(In Thousands)

Baltimore County, Maryland Combining Statement of Net Position

Internal Service Funds June 30, 2020

101

Vehicle Operations Central

and Printing Self-Insurance Maintenance Service Program Total

OPERATING REVENUES Charges for services-internal 15,768$ 586$ 71,692$ 88,046$ Charges for services-component units 2,364 3 257,659 260,026 Miscellaneous 224 - - 224

Total operating revenues 18,356 589 329,351 348,296

OPERATING EXPENSES Personal services 2,949 168 - 3,117 Contractual services 589 71 - 660 Rents and utilities 25 170 - 195 Supplies and maintenance 9,724 164 - 9,888 Insurance claims and expenses - - 321,684 321,684 Depreciation 3,154 1 - 3,155 Other expenses 601 20 - 621

Total operating expenses 17,042 594 321,684 339,320 Operating income (loss) 1,314 (5) 7,667 8,976

NONOPERATING REVENUES Interest on investments - - 2,866 2,866

Total nonoperating revenues - - 2,866 2,866 Income (loss) before transfers 1,314 (5) 10,533 11,842

Transfers out - - (2,215) (2,215) Changes in net position 1,314 (5) 8,318 9,627

Net position at beginning of the year 20,699 251 16,911 37,861 Net position at end of the year 22,013$ 246$ 25,229$ 47,488$

(In Thousands)

Baltimore County, Maryland Combining Statement of Revenues, Expenses,

Internal Service Funds For the Year Ended June 30, 2020

and Changes in Net Position

102

Vehicle Operations Central

and Printing Self-Insurance Maintenance Service Program Total

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from external customers 2,336$ 3$ 257,528$ 259,867$ Receipts for interfund services 15,768 586 71,692 88,046 Payments to suppliers (10,281) (429) - (10,710) Payments to employees (2,933) (172) - (3,105) Payment for interfund services used (601) (20) - (621) Claims paid - - (315,576) (315,576) Other receipts 224 - - 224

Net cash provided by (used in) operating activities 4,513 (32) 13,644 18,125

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfer out - - (2,215) (2,215) Net cash provided by (used in) noncapital activities - - (2,215) (2,215)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Purchases of capital assets (6,957) - - (6,957) Sales of capital assets 194 - - 194

Net cash used for capital and related financing activities (6,763) - - (6,763)

CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments - - 2,866 2,866

Net cash provided by investing activities - - 2,866 2,866 Net increase (decrease) in cash and cash equivalents (2,250) (32) 14,295 12,013

Cash and cash equivalents at beginning of the year 6,308 312 85,462 92,082 Cash and cash equivalents at end of the year 4,058$ 280$ 99,757$ 104,095$

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES

Operating income (loss) 1,314$ (5)$ 7,667$ 8,976$ Adjustments to reconcile operating income to net

cash provided by operating activities: Depreciation expense 3,154 1 - 3,155

Effect of changes in operating assets and liabilities: Receivables, net (28) - (131) (159) Inventories 52 - - 52 Accounts and other payables 5 (24) (313) (332) Accrued expenses 16 (4) - 12 Claims and judgements - - 6,421 6,421

Net cash provided by (used in) operating activities 4,513$ (32)$ 13,644$ 18,125$

(In Thousands) For the Year Ended June 30, 2020

Baltimore County, Maryland Combining Statement of Cash Flows

Internal Service Funds

103

Employees' Retirement

System Plan A

Employees' Retirement

System Plan B

Police, Fire, and Widows' Pension Plan OPEB Plan Total

ASSETS Cash and cash equivalents 50,957$ 2,909$ 7$ 9,903$ 63,776$ Collateral for loaned securities 13,215 691 - 1,213 15,119 Receivables:

Accrued interest & dividend income 3,150 162 10 295 3,617 Due from other funds - 21,000 - - 21,000 Receivable for investments sold 16,459 861 - 1,511 18,831 Receivables other 682 523 - 1,450 2,655

Total receivables 20,291 22,546 10 3,256 46,103 Investments, at fair value:

U.S. Government and Agency securities 58,196 3,044 - 5,344 66,584 Municipal bonds 30 1 4,375 3 4,409 Foreign bonds 32,075 1,678 5,686 2,945 42,384 Corporate bonds 185,431 9,700 - 17,028 212,159 Stocks 459,653 24,044 - 42,209 525,906 Bond mutual funds 401,264 20,990 - 36,847 459,101 Stock mutual funds 830,824 43,460 3,638 76,293 954,215 Real estate equity funds 141,235 7,388 - 12,969 161,592 Hedge funds 7 1 - 1 9 Private equity funds 178,680 9,346 - 16,408 204,434 Global asset allocation 248,415 12,995 - 22,811 284,221

Total investments 2,535,810 132,647 13,699 232,858 2,915,014 Total assets 2,620,273 158,793 13,716 247,230 3,040,012

LIABILITIES Securities lending payable 13,215 691 - 1,213 15,119 Investments purchased 30,781 1,610 - 2,827 35,218 Investment expenses payable 4,035 202 1 443 4,681 Refunds payable 56 4,768 - - 4,824 Due to other funds 21,000 - - - 21,000 Other 4,533 - - 706 5,239

Total liabilities 73,620 7,271 1 5,189 86,081

NET POSITION Net position restricted for pensions and OPEB 2,546,653$ 151,522$ 13,715$ 242,041$ 2,953,931$

(In Thousands)

Baltimore County, Maryland Combining Statement of Fiduciary Net Position

Benefits Trust Funds June 30, 2020

104

Employees' Retirement

System Plan A

Employees' Retirement

System Plan B

Police, Fire, and Widows' Pension Plan OPEB Plan Total

ADDITIONS Contributions:

Employer 140,583$ 4,022$ -$ 35,435$ 180,040$ Employees 29,377 21,816 - 37,921 89,114 Other - - 12 26,688 26,700

Total contributions 169,960 25,838 12 100,044 295,854

Investment earnings: Net increase (decrease) in the fair value of plan assets (7,756) (105) (27) (2,064) (9,952) Interest and dividends 33,971 1,717 553 3,597 39,838 Investment expenses (19,615) (986) (9) (2,074) (22,684)

Net investment gain 6,600 626 517 (541) 7,202 Net income from securities lending:

Securities lending income 155 8 - 16 179 Borrower rebates 33 2 - 3 38 Agent fees (46) (2) - (5) (53)

Net income from securities lending 142 8 - 14 164 Total net investment gain 6,742 634 517 (527) 7,366

Total additions 176,702 26,472 529 99,517 303,220

DEDUCTIONS Benefits 289,646 389 5,434 153,575 449,044 Refunds 1,761 5,729 - - 7,490 Administrative expense 1,313 69 - - 1,382

Total deductions 292,720 6,187 5,434 153,575 457,916 Change in net position (116,018) 20,285 (4,905) (54,058) (154,696) Net position at beginning of the year 2,662,671 131,237 18,620 296,099 3,108,627 Net position at end of the year 2,546,653$ 151,522$ 13,715$ 242,041$ 2,953,931$

(In Thousands)

Baltimore County, Maryland Combining Statement of Changes in Fiduciary Net Position

Benefits Trust Funds For the Year Ended June 30, 2020

105

106

STATISTICAL

SECTION

The Statistical Section presents data to assist users of this report to assess the economic condition of the County. They are intended to provide a broader and more complete understanding of the County and its financial affairs than is possible from the basic financial statements and supporting schedules included in the “Financial Section.” Many of these schedules cover more than two fiscal years and present data from sources other than the accounting records. Therefore, the data contained in the Statistical Section has not been subjected to independent audit. The five categories of information are as follows: Financial Trends

These schedules contain trend information to help the reader understand how the County’s financial performance and well-being have changed over time.

Revenue Capacity These schedules contain information to help the reader assess the County’s most significant local revenue source, the property tax.

Debt Capacity These schedules present information to help the reader assess the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future.

Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the County’s activities take place.

Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs.

Baltimore County, Maryland Net Position by Component

Last Ten Fiscal Years (accrual basis of accounting)

(dollars expressed in thousands)

2011* 2012** 2013 2014 2015*** 2016 2017 2018**** 2019 2020

Governmental activities Net investment in capital assets 1,550,280$ 1,386,096$ 1,313,131$ 1,277,986$ 1,346,549$ 1,529,027$ 1,602,876$ 1,482,372$ 1,498,138$ 1,723,439$ Restricted 26,653 27,251 26,972 29,053 31,871 42,647 49,922 106,103 110,636 46,272 Unrestricted (deficit) (335,775) (349,899) (352,908) (363,126) (1,747,908) (2,067,561) (2,425,266) (2,905,259) (3,120,901) (3,473,796)

Total governmental activities net position 1,241,158$ 1,063,448$ 987,195$ 943,913$ (369,488)$ (495,887)$ (772,468)$ (1,316,784)$ (1,512,127)$ (1,704,085)$

Business-type activities Net investment in capital assets 588,201$ 566,002$ 553,132$ 526,907$ 540,690$ 614,609$ 538,172$ 533,456$ 552,407$ 455,042$ Unrestricted (deficit) (155,226) (178,355) (200,295) (214,318) (351,497) (526,541) (540,754) (652,992) (735,767) (752,206)

Total business-type activities net position 432,975$ 387,647$ 352,837$ 312,589$ 189,193$ 88,068$ (2,582)$ (119,536)$ (183,360)$ (297,164)$

Primary government Net investment in capital assets 2,138,481$ 1,952,098$ 1,866,263$ 1,804,893$ 1,887,239$ 2,143,636$ 2,141,048$ 2,015,828$ 2,050,545$ 2,178,481$ Restricted 26,653 27,251 26,972 29,053 31,871 42,647 49,922 106,103 110,636 46,272 Unrestricted (deficit) (491,001)$ (528,254)$ (553,203)$ (577,444)$ (2,099,405)$ (2,594,102)$ (2,966,020)$ (3,558,251)$ (3,856,668)$ (4,226,002)$

Total primary government net position 1,674,133$ 1,451,095$ 1,340,032$ 1,256,502$ (180,295)$ (407,819)$ (775,050)$ (1,436,320)$ (1,695,487)$ (2,001,249)$

* The amounts for FY 2011 net position components have been restated to affect the change in amortization of bond/COPs premium and discount from the straight-line method to the effective interest method. ** The amounts for FY 2012 net position components have been restated to affect the change in no longer amortizing the issuance costs related to debt

*** The amounts for FY15 unrestricted (deficit) net position have been restated to affect the change in the County reporting its net pension liability required by GASB No. 68. **** The amounts for FY18 unrestricted (deficit) net position have been restated to affect the change in the County reporting its OPEB liability required by GASB No. 75.

107

Baltimore County, Maryland Changes in Net Position

Last Ten Fiscal Years (accrual basis of accounting)

(dollars expressed in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Expenses Governmental activities:

General government 449,008$ 510,219$ 499,598$ 507,968$ 511,254$ 615,205$ 864,527$ 600,687$ 847,073$ 964,187$ Public safety 346,253 340,263 336,402 345,801 346,834 368,337 372,623 373,651 390,366 408,982 Public works 150,606 187,816 153,997 192,092 177,495 178,728 185,743 188,893 176,429 170,854 Health and human services 144,972 152,490 149,078 147,998 158,431 164,430 167,861 173,638 173,462 211,564 Culture and leisure services 69,368 70,803 64,554 65,487 63,742 64,165 64,520 62,790 64,575 64,319 Economic and community development 16,232 13,379 21,126 19,637 13,838 12,449 12,598 9,581 20,543 41,941 Education 803,828 841,494 807,336 852,799 888,832 943,217 956,006 1,046,755 991,165 1,083,287 Interest on long-term debt 22,844 25,568 26,885 26,081 25,257 26,648 33,651 33,044 33,433 31,173

Total governmental activities expenses 2,003,111 2,142,032 2,058,976 2,157,863 2,185,683 2,373,179 2,657,529 2,489,039 2,697,046 2,976,307 Business-type activities:

Water and sewer services 223,858 278,104 270,090 272,177 302,014 356,593 361,069 386,405 409,220 497,252 Total business-type activities expenses 223,858 278,104 270,090 272,177 302,014 356,593 361,069 386,405 409,220 497,252 Total primary government expenses 2,226,969$ 2,420,136$ 2,329,066$ 2,430,040$ 2,487,697$ 2,729,772$ 3,018,598$ 2,875,444$ 3,106,266$ 3,473,559$ Program Revenues Governmental activities:

Charges for services: General government 190,247$ 212,958$ 201,032$ 202,899$ 206,918$ 253,728$ 309,123$ 290,376$ 299,711$ 319,478$ Public safety 5,077 5,958 6,950 9,205 10,979 11,210 11,802 10,536 9,163 11,461 Public works 3,195 2,942 3,379 3,681 4,702 7,257 13,920 15,771 16,936 18,612 Health and human services 3,652 3,622 4,031 28,872 28,590 20,251 15,231 3,841 4,401 4,103 Culture and leisure services 3,382 3,653 3,769 4,018 4,303 3,971 4,260 3,934 4,510 3,239 Economic and community development 851 487 876 585 429 983 457 592 1,033 739

Operating grants and contributions: General government 5,778 2,457 3,016 3,849 3,210 2,781 2,996 3,148 2,396 3,835 Public safety 14,093 12,879 12,930 16,175 19,602 18,316 18,163 19,453 18,408 23,365 Public works 2,865 2,260 3,772 5,614 4,300 5,033 4,826 6,081 8,733 8,336 Health and human services 100,326 114,528 113,800 114,841 126,609 125,413 129,450 132,523 135,533 167,551 Culture and leisure services 1,124 1,145 4,350 4,124 4,251 4,303 4,294 4,419 4,878 5,019 Economic and community development 24,115 16,386 12,148 9,524 8,679 11,899 11,220 10,230 11,014 27,356 Interest on long-term debt 4,064 6,853 5,671 5,422 5,255 5,186 5,079 4,992 4,821 4,031

Capital grants and contributions 37,614 41,519 32,015 25,843 48,492 35,781 36,021 40,068 28,381 45,829 Total governmental activities program revenues 396,383 427,647 407,739 434,652 476,319 506,112 566,842 545,964 549,918 642,954 Business-type activities:

Charges for services: Water and sewer services 224,510 220,188 215,703 214,154 202,674 237,071 246,175 270,963 311,638 309,305

Operating grants and contributions: 2,462 3,777 3,184 2,942 2,918 2,893 2,850 2,810 2,774 1,836 Capital grants and contributions 14,126 11,282 16,071 14,641 14,196 16,186 21,602 34,503 27,148 70,098

Total business-type activities program revenues 241,098 235,247 234,958 231,737 219,788 256,150 270,627 308,276 341,560 381,239 Total primary government program revenues 637,481$ 662,894$ 642,697$ 666,389$ 696,107$ 762,262$ 837,469$ 854,240$ 891,478$ 1,024,193$

(continued)

108

Baltimore County, Maryland Changes in Net Position

Last Ten Fiscal Years (accrual basis of accounting)

(dollars expressed in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net (Expense)/Revenue Governmental activities (1,606,728)$ (1,714,385)$ (1,651,237)$ (1,723,211)$ (1,709,364)$ (1,867,067)$ (2,090,687)$ (1,943,075)$ (2,147,128)$ (2,333,353)$ Business-type activities 17,240 (42,857) (35,132) (40,440) (82,226) (100,443) (90,442) (78,129) (67,660) (116,013) Total primary government net expense (1,589,488)$ (1,757,242)$ (1,686,369)$ (1,763,651)$ (1,791,590)$ (1,967,510)$ (2,181,129)$ (2,021,204)$ (2,214,788)$ (2,449,366)$

General Revenues and Other Changes in Net Position Governmental activities:

Taxes: Property taxes 837,092$ 844,069$ 847,439$ 850,367$ 866,698$ 891,823$ 916,768$ 944,733$ 979,118$ 1,017,005$ Income taxes 534,553 565,571 573,376 679,371 736,760 663,510 689,515 718,980 776,555 925,511 Public service taxes 110,405 121,099 143,067 140,032 153,522 174,239 176,124 171,967 174,522 180,376

Grants and contributions not restricted to specific programs: State of Maryland 8,823 9,423 9,686 9,063 9,210 8,966 8,926 9,635 9,907 8,363

Unrestricted investment earnings 966 1,077 1,416 1,096 749 1,392 2,068 5,537 11,283 10,140 Reversion of fund balance from component units - - - - - - 20,463 600 400 - Transfers - - - - 10,213 738 242 3,551 - -

Total governmental activities 1,491,839 1,541,239 1,574,984 1,679,929 1,777,152 1,740,668 1,814,106 1,855,003 1,951,785 2,141,395 Business-type activities

Unrestricted investment earnings 256 360 322 192 98 56 34 924 3,906 2,209 Transfers - - - - (10,213) (738) (242) (3,551) - -

Total business-type activities 256 360 322 192 (10,115) (682) (208) (2,627) 3,906 2,209 Total primary government 1,492,095$ 1,541,599$ 1,575,306$ 1,680,121$ 1,767,037$ 1,739,986$ 1,813,898$ 1,852,376$ 1,955,691$ 2,143,604$

Change in Net Position Governmental activities (114,889)$ (173,146)$ (76,253)$ (43,282)$ 67,788$ (126,399)$ (276,581)$ (88,072)$ (195,343)$ (191,958)$ Business-type activities 17,496 (42,497) (34,810) (40,248) (92,341) (101,125) (90,650) (80,756) (63,754) (113,804) Total primary government (97,393)$ (215,643)$ (111,063)$ (83,530)$ (24,553)$ (227,524)$ (367,231)$ (168,828)$ (259,097)$ (305,762)$

109

Baltimore County, Maryland Fund Balances of Governmental Funds

Last Ten Fiscal Years (modified accrual basis of accounting)

(dollars expressed in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 General Fund

Nonspendable 6,942$ 7,109$ 6,772$ 5,574$ 6,998$ 7,489$ 9,251$ 9,420$ 8,724$ 10,748$ Restricted 12,689 99,492 69,140 34,889 17,490 5,194 61,062 93,015 171,664 74,540 Assigned 65,223 65,659 91,286 108,855 151,283 83,161 53,984 56,575 78,286 95,747 Unassigned 165,200 229,972 294,935 284,664 229,819 239,528 205,391 204,444 217,501 337,068

Total General Fund 250,054 402,232 462,133 433,982 405,590 335,372 329,688 363,454 476,175 518,103

All other governmental funds Nonspendable - - - - - - - - - - Restricted 21,365 22,161 21,770 18,667 31,285 41,444 48,276 39,160 43,260 40,321 Assigned 7,184 4,699 14,365 16,058 20,789 16,089 15,644 12,134 22,975 12,237 Unassigned (157,090) (112,730) (48,347) (23,256) (29,387) (164,685) (134,959) (135,619) (80,477) (95,881)

Total all other governmental funds (128,541) (85,870) (12,212) 11,469 22,687 (107,152) (71,039) (84,325) (14,242) (43,323) Total governmental funds 121,513$ 316,362$ 449,921$ 445,451$ 428,277$ 228,220$ 258,649$ 279,129$ 461,933$ 474,780$

110

Baltimore County, Maryland Changes in Fund Balances of Governmental Funds

Last Ten Fiscal Years (modified accrual basis of accounting)

(dollars expressed in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenues

Taxes 1,448,849$ 1,545,610$ 1,605,959$ 1,645,650$ 1,703,481$ 1,761,006$ 1,776,875$ 1,784,245$ 1,875,069$ 2,042,187$ Licenses and permits 4,480 5,867 5,933 30,585 30,747 22,477 17,749 6,530 7,478 6,359 Intergovernmental 186,868 187,089 182,690 177,093 194,620 193,332 202,695 209,376 201,226 258,198 Repayment of loans 3,990 1,695 2,954 2,978 3,042 1,759 1,270 2,099 1,212 1,181 Charges for services 17,923 18,365 19,775 23,670 26,035 35,050 56,962 59,554 63,726 67,531 Assessments 2,475 2,183 2,017 2,745 2,243 1,645 2,177 2,034 1,761 1,329 Fines and forfeitures 3,876 5,149 4,844 5,066 6,033 7,099 7,056 7,336 5,955 5,101 Interest revenue 852 1,015 1,847 1,428 952 1,714 1,525 4,232 8,852 8,732 Miscellaneous 32,468 27,042 30,316 33,704 43,265 42,564 62,149 46,485 37,434 56,307 Total revenues 1,701,781 1,794,015 1,856,335 1,922,919 2,010,418 2,066,646 2,128,458 2,121,891 2,202,713 2,446,925

Expenditures General government 76,667 74,636 112,682 113,669 112,732 111,204 116,215 128,209 126,216 126,331 Public safety 341,131 339,984 334,669 342,776 350,395 359,811 367,595 374,722 389,615 405,607 Public works 127,513 115,497 100,688 116,419 112,565 117,785 117,670 138,218 112,961 124,040 Health and human services 143,731 151,924 147,854 146,612 156,519 163,418 166,968 172,544 172,028 209,746 Culture and leisure services 26,771 27,050 19,777 20,507 20,983 22,128 22,951 20,284 20,571 19,299 Economic and community development 18,244 22,387 21,245 20,921 15,133 19,973 16,405 20,315 25,404 48,420 Pension plan contributions 53,795 58,985 320,818 71,791 95,585 92,550 247,707 114,983 123,512 131,740 Healthcare contributions 56,367 66,676 92,311 99,447 99,924 126,386 102,742 71,568 91,045 86,225 Miscellaneous 17,384 16,942 16,067 16,532 17,571 17,963 18,599 19,026 19,593 19,940 Capital projects 108,827 102,145 97,928 95,334 118,430 131,710 139,167 121,788 104,983 92,201 Payments to component units 857,010 895,901 864,835 911,309 947,156 1,001,289 1,020,500 1,114,973 1,060,560 1,160,917 Debt service:

Principal retirement 48,149 50,765 54,543 59,631 68,647 77,829 83,421 83,574 94,375 97,752 Interest 28,454 32,133 36,774 49,256 45,664 49,458 49,925 58,318 58,568 60,256 Fiscal charges 2,413 2,051 3,517 1,250 3,150 1,082 2,355 946 1,345 738

Total expenditures 1,906,456 1,957,076 2,223,708 2,065,454 2,164,454 2,292,586 2,472,220 2,439,468 2,400,776 2,583,212

Deficiency of revenues over expenditures (204,675) (163,061) (367,373) (142,535) (154,036) (225,940) (343,762) (317,577) (198,063) (136,287)

(continued)

111

Baltimore County, Maryland Changes in Fund Balances of Governmental Funds

Last Ten Fiscal Years (modified accrual basis of accounting)

(dollars expressed in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Other financing sources (uses) Bonds issued 267,000 170,000 449,290 140,000 116,000 112,000 243,800 181,130 246,000 246,000 Bond premium 12,041 26,285 36,013 20,659 44,998 25,010 12,340 19,976 35,393 60,290 Bond anticipation notes issued 70,050 235,100 193,000 116,000 112,000 - 121,000 246,000 246,000 145,000 Bond anticipation notes premium - 3,307 1,967 - - - 2,592 6,239 5,601 4,629 Refunding bonds issued 13,565 - 94,080 39,530 - - - - - - Bond premium - refunding 1,387 - 16,228 - 117,365 - - - - - Certificates of participation issued - 78,430 - - - - 59,810 - 77,960 - Refunding certificates of participation issued - - 11,830 - - - - - - - Certificates of participation premium - 14,259 786 - - - 11,950 - 12,606 - Installment purchase agreement - 320 - - - - - - - - Loans - - 12,946 6,088 - - 1,091 - - - Bond anticipation notes retired (70,050) (170,000) (193,000) (140,000) (116,000) (112,000) (99,800) (121,000) (246,000) (246,000) Payment to refunding escrow agent (14,879) - (122,342) (44,190) (137,501) - - - - (63,000) Reversion of fund balance from component units - - - - - - 20,463 600 400 - Transfers in 61,265 10,866 36,366 71,776 87,684 139,543 179,757 54,643 102,376 94,922 Transfers out (61,087) (10,657) (36,232) (71,798) (87,684) (138,670) (178,812) (49,531) (99,469) (92,707) Total other financing sources 279,292 357,910 500,932 138,065 136,862 25,883 374,191 338,057 380,867 149,134

Net change in fund balances 74,617$ 194,849$ 133,559$ (4,470)$ (17,174)$ (200,057)$ 30,429$ 20,480$ 182,804$ 12,847$

Debt service as a percentage of noncapital expenditures 4.33% 4.42% 4.30% 5.49% 5.58% 5.88% 5.68% 6.14% 6.72% 6.37%

112

Baltimore County, Maryland Unreserved Fund Balance and Revenue Stabilization Reserve Account Expressed as a Percentage of General Fund Revenues and

Transfers In Last Ten Fiscal Years

(budgetary basis) (dollars expressed in thousands)

Unreserved Revenue Undesignated Fund Balance Stabilization Fund Balance

Total Unreserved as a % of Reserve Undesignated PLUS RSRA Fiscal General Fund Fund General Fund Account Fund as % of G.F. Year Revenues Balance Revenues ("RSRA") Balance Revenues 2011 1,547,926$ 225,768$ 14.6 84,610$ 80,590$ 10.7 2012 1,722,890 291,870 16.9 84,822 145,150 13.3 2013 1,701,812 380,942 22.4 85,034 209,901 17.3 2014 1,750,110 387,795 22.2 85,187 199,477 16.3 2015 1,820,656 349,367 19.2 89,341 140,478 12.6 2016 1,887,247 293,192 15.5 93,107 146,421 12.7 2017 1,972,182 227,650 11.5 99,360 106,031 10.4 2018 1,952,908 231,418 11.8 198,995 5,449 10.5 2019 2,042,735 217,501 10.6 207,223 10,278 10.6 2020 2,208,389 337,068 15.3 215,634 121,434 15.3

The General Fund Unassigned Fund Balance includes the Revenue Stabilization Reserve Account (the Account) which is a designation of General Fund fund balance to provide a financial cushion for unanticipated decreases in revenues; primarily intergovernmental revenues. Section 10-8-101 of the County Code gives the County the authority to establish and maintain the Account. Revenues in excess of estimates and any unexpended appropriations at the close of the fiscal year shall be transferred to the Account if the Account balance does not exceed five percent of the current fiscal year General Fund budgeted revenue after interest is credited to the Account. If a deficit exists in the General Fund at the end of any fiscal year, the Director of Budget and Finance shall notify the County Executive and County Council; and request that sufficient monies to the extent available be transferred from the Account to eliminate the deficit. Funds in the Account are not to be used for any other purpose except upon the recommendation of the County Executive and approval of a majority plus one of the County Council.

113

Baltimore County, Maryland General Fund Revenues

Last Ten Fiscal Years (budgetary basis)

(dollars expressed in thousands)

Interest on Reimbursements Licenses Charges Investments and Other

Fiscal and Inter- for Fines and and Financing Year Taxes (1) Permits Governmental Services Forfeitures Miscellaneous Sources Total 2011 1,448,849$ 3,858$ 34,186$ 9,963$ 3,876$ 26,214$ 20,980$ 1,547,926$ 2012 1,545,610 4,916 31,517 10,068 5,149 25,089 100,541 1,722,890 2013 1,605,959 4,970 37,717 10,378 4,844 29,419 8,525 1,701,812 2014 1,645,650 4,925 43,473 11,118 5,066 30,966 8,912 1,750,110 2015 1,703,481 5,306 43,739 12,544 6,033 39,173 10,380 1,820,656 2016 1,759,834 5,194 46,609 22,404 7,099 33,686 12,421 1,887,247 2017 1,775,935 5,767 47,764 43,822 7,056 78,736 13,102 1,972,182 2018 1,783,112 5,453 49,190 47,998 7,336 47,433 12,386 1,952,908 2019 1,873,642 6,180 52,519 52,591 5,955 39,143 37,940 2,067,970 2020 2,040,687 5,548 49,705 54,242 5,101 36,840 27,337 2,219,460

Note: Table does not include major interfund transfers that occurred in FY 2011.

(1) See the General Fund Tax Revenues by Source table for detail

114

Baltimore County, Maryland General Fund Tax Revenues by Source

Last Ten Fiscal Years (budgetary basis)

(dollars expressed in thousands)

Fiscal Year Total Taxes

General Property

Taxes Income Taxes Other Local

Taxes (1) 2011 1,448,849$ 837,056$ 514,715$ 97,078$ 2012 1,545,610 845,238 593,204 107,168 2013 1,605,959 853,860 624,060 128,039 2014 1,645,650 853,317 667,924 124,409 2015 1,703,481 870,115 696,335 137,031 2016 1,759,834 892,906 709,377 157,551 2017 1,775,935 919,193 697,694 159,048 2018 1,783,112 947,350 680,282 155,480 2019 1,873,642 980,124 734,948 158,570 2020 2,040,687 1,013,000 862,704 164,983

(1) Fiscal year 2020 other local taxes include: title transfer tax - $78.571 million, recordation tax - $35.803 million, electricity - $13.515 million, telephone tax - $7.576 million, admissions and amusement tax - $5.047 million, motel and hotel occupancy tax - $10.295 million, 911 fee - $9.221 million and cell phone tax - $4.955 million.

115

Baltimore County, Maryland General Fund Expenditures and Transfers by Function

Last Ten Fiscal Years (budgetary basis)

(dollars expressed in thousands)

Health Culture Economic Payments and and and to

Fiscal General Public Public Human Leisure Community Debt Non- Component Interfund Year Government Safety Works Services Services Development Service Departmental (1) Units Transfers Total 2011 $ 76,761 $ 330,042 $ 126,883 $ 37,537 $ 23,622 $ 1,889 $ 77,221 $ 127,467 $ 766,829 $ 9,938 $ 1,578,189 2012 73,710 330,137 116,079 37,595 23,812 1,419 78,370 142,789 775,282 7,390 1,586,583 2013 102,135 323,636 89,235 34,311 16,684 1,295 81,835 174,216 795,428 20,590 1,639,365 2014 103,973 324,374 104,495 34,837 17,289 1,170 95,922 187,839 821,274 32,233 1,723,406 2015 109,697 334,171 110,129 36,448 17,940 1,015 109,664 213,177 849,915 57,297 1,839,453 2016 113,437 340,701 113,532 37,936 18,307 1,192 118,692 236,896 862,811 107,568 1,951,072 2017 119,786 352,432 113,328 40,076 19,514 1,285 125,568 225,811 882,629 142,990 2,023,419 2018 127,054 361,101 115,958 41,074 16,765 1,295 129,162 205,504 923,401 38,941 1,960,255 2019 130,212 370,994 108,080 41,880 17,132 1,357 139,403 233,991 956,168 49,195 2,048,412 2020 129,075 392,551 101,345 40,397 16,810 980 139,808 237,769 1,002,861 39,661 2,101,257

(1) Non-Departmental expenditures include costs incurred for pension plan contributions, social security, workers compensation, general and auto liability insurance, employees health and life insurance and miscellaneous programs.

116

Baltimore County, Maryland Taxable Assessed Value and Estimated Actual Value of Taxable Property

Last Ten Fiscal Years (dollars expressed in thousands)

Real Property (1) Personal Property

Fiscal Year Ended June

30 Residential

Property Commercial

Property Total Real Property

Railroad/Utility Property

Other Business Property

Total Personal Property

Total Taxable Assessed Value (1)

Estimated Actual Value

Total Direct Rate (2)

2011 66,400,696$ 19,833,974$ 86,234,670$ 1,241,027$ 1,703,753$ 2,944,780$ 89,179,450$ 89,179,450$ 1.155$ 2012 61,900,847 19,547,635 81,448,482 1,229,659 1,794,683 3,024,342 84,472,824 84,472,824 1.159 2013 58,402,524 19,467,508 77,870,032 1,271,351 1,753,389 3,024,740 80,894,772 80,894,772 1.161 2014 56,661,374 18,887,124 75,548,498 1,245,132 1,741,590 2,986,722 78,535,220 78,535,220 1.162 2015 55,714,387 19,575,325 75,289,712 1,306,763 1,716,549 3,023,312 78,313,024 78,313,024 1.164 2016 56,669,097 19,910,764 76,579,861 1,347,311 1,897,128 3,244,439 79,824,300 79,824,300 1.167 2017 58,287,682 20,479,456 78,767,138 1,424,762 1,909,921 3,334,683 82,101,821 82,101,821 1.167 2018 61,084,509 20,361,503 81,446,012 1,544,456 1,897,163 3,441,619 84,887,631 84,887,631 1.167 2019 56,384,341 27,771,392 84,155,733 1,656,565 1,931,896 3,588,461 87,744,194 87,744,194 1.167 2020 65,216,577 21,738,859 86,955,436 1,684,088 2,060,628 3,744,716 90,700,152 90,700,152 1.168

Note: (1) Tax exempt properties are not included (2) Expressed in dollars per $100 of assessed value

117

Baltimore County, Maryland Property Tax Rates

Direct and Overlapping Governments Last Ten Fiscal Years

Fiscal Year Real Personal Total (a) 2011 1.100 2.7500 1.155 2012 1.100 2.7500 1.159 2013 1.100 2.7500 1.161 2014 1.100 2.7500 1.162 2015 1.100 2.7500 1.164 2016 1.100 2.7500 1.167 2017 1.100 2.7500 1.167 2018 1.100 2.7500 1.167 2019 1.100 2.7500 1.167 2020 1.100 2.7500 1.168

Notes: (1) Rates are per $100 of assessed value. (2)

(3) There are no tax limits. (a) Weighted average of the individual Real & Personal direct rates.

Except for the State of Maryland, there is no separate taxing authority that overlaps the County geographically.

County Direct Rates

118

Baltimore County, Maryland Principal Property Taxpayers

Current Year and Nine Years Ago (dollars expressed in thousands)

2020 2011

Taxpayer Taxable

Assessed Value

Percentage of Total Taxable

Assessed Value Taxpayer

Taxable Assessed Value

Percentage of Total Taxable

Assessed Value

BGE 1,305,652,610$ 1.44% BGE 979,411,208$ 1.10% Trade Point Atlantic LLC 2,101,554,115 2.32% Verizon 336,238,560 0.38% Verizon 254,040,180 0.28% Merritt Mgt Corp 414,496,406 0.46% Amazon 160,826,750 0.18% Towson Town Center 238,679,800 0.27% TRP Suburban 226,652,703 0.25% TRP Suburban 182,581,650 0.20% Comcast 113,461,980 0.13% ISG 204,043,740 0.23% Home Properties 268,742,863 0.30% Wal Mart 185,402,834 0.21% Merritt Mgt Corp 215,660,629 0.24% Oak Campus Partners LLC 167,259,660 0.19% Towson Town Center 268,947,400 0.30% Maryland Health and Higher Education 140,164,666 0.16% Wal Mart 168,095,639 0.19% Comcast 89,196,300 0.10%

5,083,634,869$ 5.63% 2,937,474,824$ 3.30%

Source: State of Maryland Assessment Files and Baltimore County Office of Budget and Finance Tax Files

119

Baltimore County, Maryland Property Tax Levies and Collections

Last Ten Fiscal Years (dollars expressed in thousands)

Collected within the Fiscal Year of the Levy Total Collections to Date

Fiscal Year

Ended Total Tax

Levy Amount

Percentage of Original

Levy

Collections in Subsequent

Years Amount Percentage of Original Levy

2011 839,080$ 834,831$ 99.49 3,501$ 838,332$ 99.91 2012 846,418 841,983 99.48 3,536 845,519 99.89 2013 853,307 851,115 99.74 1,365 852,480 99.90 2014 856,946 854,254 99.69 1,824 856,078 99.90 2015 872,676 869,303 99.61 2,452 871,755 99.89 2016 888,230 886,008 99.75 973 886,981 99.86 2017 921,713 918,421 99.64 - 918,421 99.64 2018 953,533 947,231 99.70 - 950,641 99.70 2019 987,128 982,261 99.60 - 982,774 99.60 2020 1,022,700 1,012,379 98.99 - 1,012,379 98.99

120

Baltimore County, Maryland Ratios of Outstanding Debt by Type

Last Ten Fiscal Years (dollars expressed in thousands)

Governmental Activities Business-Type Activities

Fiscal Year

General Obligation

Debt (1) Certificates of

Participation (1) Loan

Payable

General Obligation

Debt (1) Certificates of

Participation (1) Total Primary Government

Percentage of Personal

Income (2) Per Capita

(2) (3) 2011 1,168,253$ 62,586$ 3,321$ 882,556$ 2,930$ 2,119,646$ 5.34 2,629.95$ 2012 1,348,019 146,016 - 1,003,942 7,264 2,505,241 5.76 3,093.12 2013 1,759,768 134,490 12,946 1,032,220 6,522 2,945,946 6.83 3,621.07 2014 1,805,692 118,209 18,993 1,085,389 5,361 3,033,644 6.90 3,670.27 2015 1,846,087 104,500 14,496 1,168,797 4,610 3,138,490 6.93 3,784.14 2016 1,762,843 88,566 10,038 1,164,150 3,875 3,029,472 6.48 3,643.68 2017 1,927,873 142,205 5,216 1,399,888 7,743 3,482,925 7.12 4,169.55 2018 2,133,900 123,264 4,375 1,663,290 6,869 3,931,698 7.70 4,684.97 2019 2,286,699 188,919 4,375 1,747,670 16,104 4,243,767 8.07 5,060.53 2020 2,289,667 161,273 4,375 1,947,476 14,140 4,416,931 8.50 5,279.66

(1) Presented net of original issuance discounts and premiums (2) See the Demographic and Economic Statistics schedule for personal income and population data. (3) Expressed in dollars

121

Baltimore County. Maryland Ratios of Net General Obligation (GO) Debt to

Estimated Actual Value of Property and Net GO Debt Per Capita Last Ten Fiscal Years

(dollars expressed in thousands)

Fiscal Year

Estimated Population (1)

Estimated Actual Value of Real &

Personal Property GO Debt (2)

Less: Amounts Available in

Escrow for Debt Service (3) Net GO Debt

Percent of Net GO Debt to

Estimated Actual Value of Property

GO Debt per Capita (4)

2011 809,941 89,179,450$ 2,050,809$ -$ 2,050,809$ 2.30 2,532.05$ 2012 813,556 84,472,824 2,351,961 232 2,351,729 2.78 2,890.68 2013 817,993 80,894,772 2,791,988 319 2,791,669 3.45 3,412.83 2014 826,784 78,535,220 2,891,081 448 2,890,633 3.68 3,496.24 2015 829,379 78,313,024 3,014,884 586 3,014,298 3.85 3,634.40 2016 828,616 79,824,300 2,926,993 1,203 2,925,790 3.67 3,530.94 2017 828,603 82,101,821 3,327,761 1,647 3,326,114 4.05 4,014.12 2018 828,431 84,887,632 3,797,190 103,996 3,693,194 4.47 4,458.06 2019 832,512 87,744,194 4,034,369 103,461 3,930,908 4.60 4,687.46 2020 836,594 90,700,152 4,237,143 5,951 4,231,192 4.67 5,057.64

Notes: (1) U.S. Bureau of the Census, Population Estimates Branch. Last year based on budgetary estimates (2) This is the general obligation debt of both governmental and business-type activities, net of original issuance discounts and premiums (3) The County has resources restricted to repaying the principal of outstanding debt. (4) Expressed in dollars

122

Baltimore County, Maryland Legal Debt Margin Information

Last Ten Fiscal Years (dollars expressed in thousands)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Consolidated Public Improvement (CPI)

General Obligation Debt Assessed value

Real property 86,234,670$ 81,448,482$ 77,870,032$ 75,548,498$ 75,289,712$ 76,579,861$ 78,767,139$ 81,446,013$ 84,155,733$ 86,955,435$ Personal property 2,944,780 3,024,342 3,024,740 2,986,722 3,023,312 3,244,439 3,334,682 3,441,619 3,588,461 3,744,717 Total assessed value 89,179,450 84,472,824 80,894,772 78,535,220 78,313,024 79,824,300 82,101,821 84,887,632 87,744,194 90,700,152

Debt limit (4% of total assessed value) 3,567,178 3,378,913 3,235,791 3,141,409 3,132,521 3,192,972 3,284,073 3,395,505 3,509,768 3,628,006

Debt applicable to limit: Consolidated public improvement bonds 918,085 1,036,500 1,161,100 1,235,730 1,274,405 1,311,740 1,323,355 1,410,445 1,557,695 1,633,440 Pension liability funding 31,805 24,735 274,010 267,085 249,082 238,928 376,741 368,682 358,895 348,979 CPI commercial paper notes 174,900 240,000 240,000 216,000 211,900 99,800 121,000 246,000 246,000 145,000 Total debt applicable to debt limit 1,124,790 1,301,235 1,675,110 1,718,815 1,735,387 1,650,468 1,821,096 2,025,127 2,162,590 2,127,419 Legal debt margin 2,442,388$ 2,077,678$ 1,560,681$ 1,422,594$ 1,397,134$ 1,542,504$ 1,462,977$ 1,370,378$ 1,347,178$ 1,500,587$

Metropolitan District General Obligation Debt Assessed value (1)

Real property 76,836,626$ 72,056,007$ 68,888,892$ 67,005,625$ 64,936,021$ 67,958,118$ 69,971,527$ 72,576,110$ 75,003,966$ 77,499,206$ Personal property 2,623,851 2,675,581 2,675,882 2,648,990 2,607,552 2,879,164 2,962,312 3,066,809 3,198,222 3,337,486 Total assessed value 79,460,477 74,731,588 71,564,774 69,654,615 67,543,573 70,837,282 72,933,839 75,642,919 78,202,188 80,836,692

Debt limit (3.2% of total assessed value) 2,542,735 2,391,411 2,290,073 2,228,948 2,161,394 2,266,793 2,333,883 2,420,573 2,502,470 2,586,774

Debt applicable to limit: Metropolitan District (MD) bonds 750,917 822,490 850,645 875,708 928,611 1,003,368 1,107,298 1,334,052 1,615,201 1,646,637 MD commercial paper notes 106,500 160,000 160,000 183,800 187,500 99,300 225,000 245,000 42,000 205,000 Total debt applicable to debt limit 857,417 982,490 1,010,645 1,059,508 1,116,111 1,102,668 1,332,298 1,579,052 1,657,201 1,851,637 Legal debt margin 1,685,318$ 1,408,921$ 1,279,428$ 1,169,440$ 1,045,283$ 1,164,125$ 1,001,585$ 841,521$ 845,269$ 735,137$

Notes: (1) Assessed value of property in the Metropolitan District. * The County has $103.461 million restricted to repaying the principal of outstanding debt as of June 30, 2019.

123

Baltimore County, Maryland Demographic and Economic Statistics

Fiscal Years 2010 - 2019

Fiscal Year

Estimated Population

(1)

Total Personal Income

(expressed in thousands)

Per Capita Personal

Income (2) Median Age (3)

Education Level in Years

of Formal Schooling (3)

School Enrollment

(4) Unemployment

Rate (5) 2010 805,964 39,717,586$ 49,280$ 38.4 15.0 103,832 7.8% 2011 809,941 41,510,448 51,251 39.1 15.0 104,331 7.9 2012 813,556 43,379,449 53,321 39.1 15.4 105,315 7.7 2013 817,993 43,128,806 52,348 39.2 15.4 107,033 7.3 2014 826,784 44,611,807 53,949 39.2 15.4 108,376 6.5 2015 829,379 46,234,945 55,568 39.2 15.3 109,984 5.9 2016 828,616 47,396,114 57,199 39.1 15.3 111,126 5.4 2017 828,603 48,587,420 58,638 39.1 15.3 112,351 4.4 2018 828,431 50,994,500 61,556 39.4 15.4 113,282 4.2 2019 832,512 52,783,511 63,403 39.5 15.6 113,814 3.7

Notes: (1) U.S. Bureau of the Census, Population Estimates Branch (2) Data extracts prepared by the U.S. Bureau of the Census and Maryland Office of Planning (3) Baltimore County Office of Planning (4) Baltimore County Board of Education (5) Maryland Department of Labor and Licensing Regulation

124

Baltimore County, Maryland Principal Employers

Current Year and Nine Years Ago

2020 2011

Employer Employees

Percentage of Total County Employment Employer Employees

Percentage of Total County Employment

Baltimore County Public Schools 15,770 3.55 Social Security Administration/CMS 14,948 3.82 Social Security Administration/CMS 15,415 3.47 Baltimore County Public Schools 14,608 3.73 Baltimore County Government 8,237 1.85 Baltimore County Government 8,429 2.15 T. Rowe Price Associates, Inc. 4,200 0.95 Franklin Square Hospital 3,500 0.89 Community College of Baltimore Co. 4,184 0.94 Towson University 3,344 0.86 Greater Baltimore Medical Center 3,900 0.88 Greater Baltimore Medical Center 3,331 0.85 Franklin Square Hospital 3,900 0.88 St. Joseph Medical Center 3,330 0.85 UMBC 3,612 0.81 UMBC 3,258 0.83 Towson University 3,476 0.78 Erickson Retirement Communities 3,070 0.78 McCormick & Company, Inc. 2,300 0.52 Erickson Retirement Communities 3,070 0.78 Saint Joseph Medical Center 2,250 0.51 Sheppard Pratt Health System 2,380 0.61 Total 67,244 16.13 Total 63,268 16.15

Source: Baltimore County Department of Economic Development

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Baltimore County, Maryland Full-time Equivalent County Government Employees by Function

Last Ten Fiscal Years

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GENERAL GOVERNMENT County Executive 14 14 14 14 14 14 14 14 12 10 Administrative Office 23 13 13 13 13 13 13 11 10 27 Office of Budget and Finance 184 132 122 123 124 122 121 121 121 121 Office of Law 30 39 37 33 33 29 29 29 30 43 Planning & Community Conservation 49 49 42 41 44 44 44 44 44 44 Office of Human Resources 32 34 31 33 44 49 49 48 48 40 Permits, Approvals and Inspections 188 202 182 184 186 188 188 188 188 190 Property Management - - 315 * 291 288 279 270 245 243 243 County Council 37 37 36 36 36 36 36 36 36 36 County Auditor 19 19 19 18 18 18 18 18 17 17 Board of Appeals 10 9 9 9 9 9 9 9 9 9 Information Technology 186 186 173 173 204 209 216 223 225 231 Internal Service Funds 59 59 55 53 50 50 50 49 49 49 Ethics & Accountability - - - - - - - - - 2 HEALTH & HUMAN SERVICES Department of Health 531 526 524 521 541 546 581 599 599 625 Social Services 214 237 190 185 185 197 197 206 209 197 Social Services - State 12 12 12 12 10 10 10 10 10 10 Department of Aging 331 322 285 285 283 283 282 238 238 241 Environmental Protection and Sustainability 119 89 79 97 95 91 83 79 79 80 Local Management Board 7 5 5 5 3 3 3 3 4 4 Housing Office 59 64 49 49 48 59 60 60 60 63 RECREATION & COMM. SERV. Recreation & Parks 315 329 191 190 189 174 176 176 176 183 Economic Development 21 16 11 11 11 11 11 14 15 17 Community Development Block Grants 30 27 29 28 27 27 27 27 27 27

Workforce Development 45 48 44 44 46 50 47 46 46 44 Organization Contributions - - - - - - - - - PUBLIC WORKS 1,181 1,128 867 867 865 865 871 956 957 957 SUBTOTAL 3,696 3,596 3,334 3,315 3,366 3,376 3,405 3,449 3,452 3,510

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Baltimore County, Maryland Full-time Equivalent County Government Employees by Function

Last Ten Fiscal Years

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 PUBLIC SAFETY Department of Corrections 473 470 462 463 463 463 472 470 485 482 Communications Center 187 186 186 186 190 190 193 193 205 205 Police Department 2,575 2,534 2,524 2,531 2,519 2,527 2,529 2,543 2,557 2,559 Fire Department 1,090 1,082 1,062 1,062 1,062 1,064 1,076 1,076 1,091 1,087 SUBTOTAL 4,325 4,272 4,234 4,242 4,234 4,244 4,270 4,282 4,338 4,333 STATE MANDATED AGENCIES Circuit Court 100 89 89 89 91 91 93 92 92 91 Orphan’s Court 5 5 5 5 5 5 5 5 5 5 Board Of Elections 14 14 12 12 12 12 12 12 12 12 Board Of Elections - State 26 26 26 26 26 26 26 26 26 26 State’s Attorney 124 122 120 120 120 120 123 133 133 136 County Sheriff 104 104 99 95 95 90 90 90 90 90 Liquor License Commission 25 24 24 24 24 24 24 24 24 24 Cooperative Extension 2 2 2 2 2 2 2 2 2 2 Cooperative Extension - State 8 8 8 8 8 8 8 8 8 8 SUBTOTAL 408 394 385 381 383 378 383 392 392 394 EDUCATION, COMMUNITY COLLEGE & LIBRARY Community College 1,974 2,060 2,040 1,976 1,936 1,929 1,779 1,752 1,701 1,632 Education 14,606 14,327 14,342 14,472 14,626 14,753 15,015 15,228 15,531 15,770 Library 495 492 521 522 478 485 489 489 493 492 SUBTOTAL 17,075 16,879 16,903 16,970 17,040 17,167 17,283 17,469 17,725 17,894 TOTAL 25,504 25,141 24,856 24,908 25,023 25,165 25,341 25,592 25,907 26,131

Source: Baltimore County Office of Budget and Finance Budget Documents * Organizational shift in personnel with the majority of employees coming from the Department of Public Works and Recreation and Parks.

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Baltimore County, Maryland Operating Indicators by Function

Fiscal Years 2010 - 2019

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function CIRCUIT COURT

Cases and Appeals Filed Civil 19,885 15,924 16,443 17,116 18,008 17,855 18,190 16,489 16,812 16,700 Criminal 10,211 10,648 10,751 10,536 10,159 10,158 11,235 15,140 8,577 8,600 Juvenile 3,852 3,495 3,362 3,452 2,980 2,777 2,773 2,773 2,617 2,550

Custody Mediation & Investigations 783 827 815 816 859 806 838 838 783 650 OFFICE OF STATE’S ATTORNEY

Defendants Disposed New and Reopened Crime Cases 64,097 63,653 63,540 64,520 65,927 63,970 63,500 75,000 22,315 79,000

POLICE DEPT. (calendar year) Calls for Service 604,706 579,614 564,898 609,026 571,436 582,894 580,000 600,071 618,072 668,736 Patrol Car Posts 118 118 118 118 118 118 118 118 118 118

FIRE DEPT. (calendar year) Fire Calls 30,175 31,197 29,939 30,084 53,211 51,689 54,970 55,761 57,819 62,424 Medical Calls 86,844 87,454 91,083 95,724 103,557 108,643 113,382 119,227 120,465 125,611

DEPT. OF PERMITS & DEV. MGT. Applications, Permits and Licenses

Building Permit Applications 21,174 21,835 22,480 23,286 28,155 33,857 35,000 11,418 32,583 17,635 Electrical Licenses 3,934 4,134 4,201 4,329 4,204 150 4,500 4,869 4,925 4,900 Plumbing Licenses 2,758 2,850 2,949 3,002 108 2,843 25 3,130 3,150 3,149 Animal Licenses 18,672 18,000 18,000 18,000 13,000 14,054 17,062 19,207 18,000 18,000 Miscellaneous Permits 7,003 7,000 8,806 8,900 8,391 8,104 7,753 7,132 6,839 5,508

BUREAU OF CORRECTIONS Prisoner Days (daily population

x 365 days) 502,014 508,473 530,122 518,300 472,373 457,358 441,102 444,091 438,000 456,615 COUNTY SHERIFF

Summons, Writs Served 43,855 40,687 42,362 45,000 44,213 42,043 33,000 23,500 33,000 23,022 DEPT. OF SOCIAL SERVICES

Average Caseload Temporary Cash Assistance 2,304 2,919 3,163 3,149 2,962 2,969 2,720 2,720 2,309 3,500 Transitional Emergency Assist. 1,225 1,408 1,333 1,293 1,798 1,645 1,682 1,982 1,257 1,200

Housing Choice Vocher Unit 66,186 71,688 72,288 73,188 73,488 75,918 76,068 76,068 76,068 76,088

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Baltimore County, Maryland Operating Indicators by Function

Fiscal Years 2010 - 2019

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 COMMUNITY COLLEGE

Equivalent Full Time Students 20,137 20,966 20,894 19,883 19,628 18,234 18,400 16,704 16,517 29,115 DEPARTMENT OF AGING

Senior Centers Registered Membership 14,991 16,477 17,600 18,000 19,038 19,081 19,870 17,398 21,142 21,988 County Ride Trips 65,720 66,686 68,225 70,229 40,963 44,800 54,068 39,836 38,301 40,217

DEPARTMENT OF HEALTH Center Based Services Visits 13,231 13,019 12,894 12,680 11,829 13,453 12,737 12,737 14,242 13,927 W.I.C. Nutrition Program Visits 75,584 79,359 80,089 75,000 78,636 79,570 79,000 76,055 75,997 72,000 Home Health Visits 11,477 10,466 10,290 10,444 10,270 7,484 10,449 10,449 9,123 10,750

DEPT. OF EDUCATION Student Enrollment 103,832 104,331 105,315 106,885 108,376 109,984 111,126 111,126 113,282 113,814

BOARD OF LIBRARY TRUSTEES Books in Library 1,718,261 1,678,782 1,805,836 1,800,000 1,917,385 1,764,617 1,750,000 1,798,810 1,800,238 1,800,238 Circulation of Materials 10,130,476 10,507,820 10,577,067 10,437,437 11,287,133 11,212,886 11,200,000 11,188,247 10,701,227 10,917,965 Requests for Information 1,951,241 2,115,860 1,984,668 1,984,668 1,513,434 1,473,342 1,500,000 1,473,307 1,573,520 1,624,449

DEPT. OF PUBLIC WORKS Highways

Miles of Road Paved 2,666 2,678 2,680 2,684 2,689 2,692 2,692 2,700 2,712 2,712 Miles of Streets Swept 3,777 3,397 3,800 3,800 3,861 1,598 1,917 1,837 1,837 2,087

Solid Waste Refuse Collection Units Served 328,325 328,918 329,688 330,213 331,287 332,463 333,824 331,795 332,673 333,781 Tons of Refuse Collected 347,010 342,557 340,835 341,000 348,730 321,426 322,500 319,807 415,083 417,000

Traffic Engineering Signs Installed and Repaired 8,500 13,500 14,464 15,500 10,960 11,913 12,000 5,850 5,909 5,131 Signals and Flashers Maintained 403 403 404 406 406 406 350 350 379 395 Number of Street Lights 41,279 41,448 41,546 41,650 41,788 41,900 42,392 41,179 42,640 42,817

Utilities Miles of Sanitary Sewer Lines 3,137 3,142 3,149 3,145 3,160 3,164 3,168 3,170 3,175 3,170 Miles of Water Main 2,105 2,109 2,107 2,108 2,139 2,143 2,146 2,260 1,437 2,266 Miles of Storm Drain Lines 844 902 899 900 1,393 1,357 1,364 1,442 1,437 1,462

RECREATION AND PARKS Community Center Participants 319,400 299,089 275,462 280,000 208,159 200,876 229,703 231,033 206,366 239,074 Attendance:

Beaches 58,454 57,900 41,392 42,000 46,120 38,752 32,030 40,773 40,799 40,851 Lodge 171,533 176,366 186,696 188,000 167,204 188,355 184,345 169,059 170,809 171,709 Fishing Center 26,647 23,561 27,888 28,000 23,704 22,890 38,103 26,003 26,514 26,514

Source: Baltimore County Office of Budget and Finance Budget Documents

129

Baltimore County, Maryland Capital Asset Statistics by Function

Last Ten Fiscal Years

2011 2012 2013* 2014 2015 2016** 2017*** 2018 2019 2020 Function Public safety

Police stations 10 10 10 10 10 10 10 10 10 10 Fire stations 25 25 25 25 25 25 25 25 25 25

Public works Highways and streets

Streets (miles) 2,676 2,679 2,684 2,684 2,691 2,692 2,705 2,705 2,706 2,706 Streetlights 42,000 42,000 42,020 42,100 42,240 42,255 42,392 42,817 42,817 42,817 Traffic signals 401 401 401 401 401 401 401 401 401 401

Utilities Water mains (miles) 2,109 2,107 2,109 2,110 2,112 2,112 2,146 2,260 2,266 2,270 Fire hydrants 13,260 13,295 13,347 13,357 13,370 14,288 13,873 14,444 14,444 14,452 Sanitary sewers (miles) 3,142 3,148 3,151 3,153 3,160 3,164 3,170 3,170 3,170 3,176 Storm drains (miles) 902 899 1,416 1,423 1,423 1,462 1,458 1,462 1,462 1,452

Solid waste Citizen drop-off centers 3 3 3 3 3 3 3 3 3 3

Culture and leisure Parks acreage 16,435 16,641 16,743 16,797 16,873 13,202 13,648 13,862 14,067 17,768 Recreation centers 202 205 205 205 206 206 206 205 205 206

Health and human services Senior centers 19 20 20 20 20 20 20 20 20 20 Health centers 7 7 7 7 7 7 7 7 7 7

Source: Baltimore County Office of Budget and Finance Budget Documents and Accounting Records * The large increase in storm drain pipe miles is due to this being the first year using the GIS as a data source. **

***The large decrease in fire hydrants reflects the count less private hydrants and those owned by other jurisdictions. Decrease in sanitary sewers reflects no longer including mileage for laterals extending from

The large decrease in park acreage has occurred because prior to FY 2016 park acreage was estimated based on the Maryland State standard calculation of providing 30 acres of parkland per thousand citizens. The number presented above for FY 2016 is the total acres of County owned and leased parks, undeveloped park sites, greenway reservations, and open spaces.

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