County Finance Director Joe Zimmerman reviewed the county's Comprehensive Annual Financial Report (CAFR) during the Oct. 29 county commissioners meeting. The 120-page report was prepared by the accounting division of the county finance office to give taxpayers and county officials information to evaluate the county's financial performance during fiscal year 2002.

Pages 16-17 of the CAFR contains an opinion from independent auditor J. Michael Connolly, a certified public accountant who audited the county's general purpose financial statements for fiscal 2002. The statements "present fairly, in all material respects, the financial position" of the county as of June 30, 2002, wrote Connolly. 

"That means, in Mike's opinion as an auditor, we got the numbers right," said Zimmerman.

General fund revenues for the county in fiscal 2002 totaled $72.4 million, an increase of $11.6 million from fiscal 2001. General fund expenditures in fiscal 2002 were $71.7 million, an increase of $10.6 million from fiscal 2001. 

Spending on public education and debt service accounted for roughly three-fifths of the total general fund budget in fiscal 2002, according to page 7 of the CAFR. Spending on education ($32.2 million) accounted for 44.9 percent of general fund expenditures in fiscal 2002. Spending on debt service ($11.6 million) accounted for 16.2 percent of general fund expenditures.

General property taxes generated $33.7 million for the county, or almost 46 percent of the revenue for its general fund in fiscal 2002. Local income taxes brought in $23.2 million, or about 32 percent of of the revenues for the general fund.

All in all, the county is in good financial shape, said Zimmerman. But he said the state government has a huge deficit projected for fiscal year 2004 and Maryland's fiscal troubles will affect Queen Anne's County.

"Don't know how. Don't know when," said Zimmerman.

Commissioner George O'Donnell asked about the county's debt service capacity. 

"Debt is higher than I'd like it to be, but not as high as it can be theoretically," said Zimmerman. He said the county does not want to have more than 10 percent of its general fund revenues paying for debt service at any one time. 

Zimmerman said county debt is projected to increase over the next five to seven years. He said the county's current debt is about $1,350 for each person in Queen Anne's County, which has a population of about 41,500. 

According to pages 111-112 of the CAFR, the county's gross bonded debt at the end of fiscal 2002 was $70,508,807. This included $56,083,840 in net bonded debt and $14,424,967 in debt payable from enterprise fund revenues. 

The county's enterprise funds include the sanitary district, which operates the public water and sewer systems. Sanitary district debt at the end of fiscal 2002 was $12,731,829.

The county has issued bonds to finance major projects in recent years, including installing the 800 MHz radio system and building the department of emergency services building; and building Kent Island High School and renovating or expanding other schools. O'Donnell said the county had a "severe deficit" as far as county infrastructure because no capital projects were done in the 1980s.

Connolly said he agreed with Zimmerman that the county has to be careful about debt service in the future.

Connolly commended the finance office for compiling the report. For fiscal years 1999 through 2001, Queen Anne's County was recognized for its CAFR with a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. 

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