#1FREDERICK COUNTY, MARYLAND RATING AGENCY PRESENTATION MAY 2016 FREDERICK CO 1748 MARYLAND#2TABLE OF CONTENTS PAGE Agenda County Executive Opening Remarks Economic Development 3 5 16 Fiscal Management 59 Financial Results 74 Contact Information 102 Exhibits 104 2#3AGENDA Introductions and Overview: Sam Ketterman Opening Remarks: Jan H. Gardner Economic Development: Fiscal Management: Financial Results: Closing Remarks: Helen Propheter Lori Depies Lori Depies Jan H. Gardner 3#4COUNTY EXECUTIVE OPENING REMARKS MAY 2016 FREDERICK COUNTY 1748 MARYLAND#5VISION FREDERICK COUNTY VISION Frederick County is the best place to live, work, and raise a family Education ■ Safe Community Vibrant Economy High Quality of Life 030 SHERIFF FREDERICK COUNTY 5#6STATE OF THE COUNTY ECONOMY Strong, Diverse, and Stable Economy Added 3,200 jobs Low Unemployment ■ At or around 4% Economic Output exceeded $11 billion ■ Vibrant Downtown City of Frederick 6#7STATE OF THE COUNTY GOVERNMENT DELIVERS High Performing Public Schools ■ Safe Community Exceptional Services Transparent and Efficient Government 7#8STATE OF THE COUNTY BUDGET Fiscal Discipline and Conservative Budgeting Growing Reserves Invests in Future Prosperity Education, Public Safety, and People Funds Pensions and OPEB Advances Major Capital Projects Schools, Roads, Libraries, Parks Water/Sewer 8#9STRATEGIC INITIATIVES Vision achieved through Leadership Teams focused on 4 priorities: Education Jobs Community Needs Seniors ■ Trust in Government 9#10STRATEGIC INITIATIVES EDUCATION EDUCATION ■ Well-educated Workforce Innovation in Education ■LYNX High School - "Super School" model Center for Research and Education in Science and Technology (CREST) Frederick County's 1st Higher Education Center SCHOOL BUS 10#11STRATEGIC INITIATIVES JOBS ■ Workforce Services co-located with Community College Advanced Technology Center Business Innovation Center Economic development, Tech Transfer New IT Business Incubator Branding - Regional Focus Frederick Hotel and Conference Center ■ Tax Incentives [[#12STRATEGIC INITIATIVES COMMUNITY NEEDS Workforce Housing 520 N. Market Project Housing Study ■ Community Partnerships ■ Livable Frederick Long-term Visioning Comprehensive Plan NORTH MARKET STREET - 20 RENDERINGS-MARKET STREET 520 N. MARKET APARTMENTS Livable Frederick 520 NORTH MARKET FREDERICK MD 21701 ZA +D 12#13STRATEGIC INITIATIVES SENIORS ■ Seniors First Initiative Taking Advantage of Our Opportunities Planning for Demographic Change 13#14TAKING THE LEAD CHARTER GOVERNMENT Charter Government Delivers Legislative Accomplishments ■ Downtown Hotel and Conference Center Center for Research and Education in Science and Technology Over $2 million for School Construction Major Transportation Investments New Interchange at I-270/MD 85 ■New Interchange at US 340/MD180 US 15 Widening BENEFIT BY $26 MILLION 15 15 14 WEMD#15ECONOMIC DEVELOPMENT MAY 2016 FREDERICK COUNTY 1748 MARYLAND#16Haford County METROPOLITAN WASHINGTON REGION ECONOMIC STRENGTH AND STABILITY 6th largest metro economy in the U.S. 5.3 million people and 3.2 million jobs 6th strongest Gross Regional Product (GRP) in the U.S. Among the highest educational attainment. levels in the U.S. Almost half of the population over 25 has a bachelor's degree or higher (vs. 30% national average) Among top markets for millennials Fankin County Washington Berkday Courty County WEST VIRGINIA Jefferson County Cak VIRGINIA County Loudoun County Rappahannock County Culpeper Courty 70 Frederick County Adams County Fredenck MARYLAND Cate County PENNSYLVANIA York County Baltimore County Cityd Baltimore Howard County Montgomery County Gaithersburg Rockylle Takuma Greenbelt DO Collece Park Fairfax County Falls Church Bowie Anne Aundd 00 Fairfax City Arlington US County Fauquier Alexandria County Urbanized Area Manassas Park Manassas Prince William County Transportation System -Major Highway Stuffed Other Major Roadway County Passenger Rail Line Metro Rail Lines Major Arport Adminstrative Boundaries Sputni -State Borders County Prince George's County Charles County Givest County Potomac Rivet King George St. Mary's County County Source: 2016 State of the Region: Economic Competitiveness Report, MWCOG County&Citylines TPS Planning Area 10 Chesapeke Bay 16#17FREDERICK COUNTY NATIONAL RECOGNITION 2016 Best Cities in the World for Craft Beer (Frederick #17) - Matador Network 2015 Top 50 Best Places to Live (Urbana #35) Money Magazine 2015 Top 10 Best Places to Live for Veterans (Frederick #8) - Military Times 2015 Top 100 Best Places to Live (Frederick #32) - Livability.com 2014 Top 10 Best Downtowns (Frederick #6) - Livability.com 2014 Best Counties In America (#9) - Livability.com 17#18DEMOGRAPHICS POPULATION CHARACTERISTICS Source: Maryland Dept. of Planning Frederick County: Population is 245,322 (2015) 7th largest population among counties in the state Projected to increase by 8% by 2020 to 265,650 Average annual population growth rate from 2010-2015 was 5.1% 6th highest population growth rate among the counties in MD Foreign Born Population has increased 12.9% from 2010-2014 18#19DEMOGRAPHICS HOUSEHOLD INCOME $84,480 in 2014 13.6% greater than Maryland's Median Household Income of $73,851 Maryland had the highest Median 2014 Household Income in the U.S. according to the 2010 Census 2013 Source: Maryland Department of Planning 2012 2011 2010 Median Household Income $0 $20,000 $40,000 $60,000 $80,000 $100,000 Maryland Frederick County 19#20EMPLOYMENT CATEGORIES Other 3% Leisure & Hospitality 12% Government 16% Education & Health Services 14% Professional & Business Services 16% Financial 6% Information 1% Natural Resources & Mining 1% Construction 9% ■Government Natural Resources & Mining Construction ■Manufacturing ■Trade, Transportation & Utilities ■Information ■Financial Manufacturing 5% Professional & Business Services Education & Health Services ■Leisure & Hospitality Other Trade, Transportation & Utilities 17% *Consists of 12% Local 1% State 4% Federal 20 Source: Maryland Department of Labor, Licensing and Regulation, 2nd Quarter 2015 Data#21EMPLOYMENT MAJOR EMPLOYERS 2015 Top 10 Employers Fort Detrick Campus 9,100 Frederick County Board of Education 5,650 Frederick Memorial Healthcare System 2,232 Frederick County Government 1,937 Leidos Biomedical Research (formerly SAIC-Frederick) 1,836 Wells Fargo Home Mortgage 1,742 Frederick Community College 992 Frederick City Government 842 State Farm Insurance Regional Operations Center State Farm Insurance 832 United Health Care 635 Source: Frederick County Comprehensive Annual Financial Report FY15 21#22EMPLOYMENT JOB GROWTH 2015 Total Jobs: 99,281 Number of Jobs 2015 Private Sector Jobs: 83,210 100,000 81% of employment base is private sector, 98,000 up from 79% in 2011 From 2011-2015: 96,000 The number of jobs increased 8.4% from 94,000 93,472 2011-2015 and 3.3% from 2014-2015 91,622 92,000 Frederick National Laboratory for Cancer Research Source: Maryland Department of Labor, Licensing and Regulation, 2nd Quarter Data 90,000 88,000 95,979 96,092 99,281 86,000 2011 2012 2013 2014 2015 22#23EMPLOYMENT JOB GROWTH 2014-2015 2015 Total Number of Industry Jobs Jobs Added Bio-Tech 2,743 237 Companies with large recruitment needs in 2015 Leidos, Keaki, MedImmune, Thermo Fisher, Charles River, Lonza, Imagilin Chenega, Yakabod, Orases, Swift Systems, Computer Frontiers, Regent, Experient IT 1,957 84 Manufacturing 5,281 121 Wright Manufacturing, Trans-Tech, Stulz ATS, Flying Dog Brewery, Aeroflex/Weinschel Construction 10,064 92 Morgan Keller, Pleasants/Kline, Dorcus Education 3,569 360 FCC, Hood, Mount St. Mary's Healthcare and Social 12,563 426 Services Tourism 11,751 421 Financial Activities and 938 266 Insurance FMH, Country Meadows, Genesis Healthcare, Right Time Medical Plamondon Companies, Hilton Garden, Chili's, Bennigan's McCaskill, Moore Wealth, Morgan Stanley, Farmers Insurance, BMC, Taylor Financial, area banks Retail Trades 12,970 284 TJ Maxx, Dick's Sporting Goods, CarMax Source: Frederick County Workforce Services 23#24COMMERCIAL GROWTH NEW BUSINESS GROWTH 6,369 Number of Businesses Business Growth: Over the last 5 years, business base has grown by 4.9% 6,400 6,350 6,337 Target Industries: Bioscience, Advanced 6,300 Technology, Manufacturing, Agriculture, 6,274 6,250 Renewable/Sustainable Industries 6,200 - Other Growth Industries: 6,150 6,161 Health 6,100 6,071 6,050 • Education • Hospitality & Tourism 6,000 5,950 5,900 2011 2012 2013 2014 2015 Source: Maryland Department of Labor, Licensing and Regulation, 2nd Quarter data; internal data collection 24#25COMMERCIAL GROWTH NEW BUSINESS GROWTH 2015 Expansions and Locations Announced AstraZeneca/MedImmune – 40,000 SF, 300 jobs Flying Dog Brewery - 150,000 SF and 250 new jobs Costco E-Commerce Center - 595,000 SF, 200 jobs Regent Education - 26,000 Sf, 130 new jobs U.S. Pharmacopeial Convention - 25,000 SF, 100 new jobs Victory Van Corporation - 42,000 SF, 75 new jobs Miscellaneous Metals – 40,000 SF, 120 jobs retained - Blue Pillar - 5,000 SF, 60 jobs (HQ relocation) Canam Steel - 20,000 SF, 10 jobs Ford Motor Company Training Facility – 8,500 SF, 10 jobs Rendering of Union Mills renovation - - Regent Education expansion on Carroll Creek Canam Steel 25#26COMMERCIAL GROWTH CONSTRUCTION SPENDING 2015: Commercial & Industrial Construction Spending Commercial & Industrial spending increased by 117% since 2011 $350.0 $302.5 $300.0 $250.0 $200.0 $164.8 $139.2 $146.8 $150.0 $113.2 $100.0 $50.0 -Value of Commercial & Industrial Permits Homewood Retirement Center - $50M recent expansion $0.0 2011 2012 2013 2014 2015 Source: Frederick County Department of Planning 26#27COMMERCIAL MARKET VACANCY As of 4th Quarter 2015: Overall vacancy was 10.1%, significantly lower than year end in 2011 at 15.9% Overall vacancy for the Washington, DC market was 12.3% in 2015 Total Commercial Vacancy Rates 18.0% 16.0% 14.0% The Flex and Industrial Markets had the ■Office, Flex, Industrial and Retail Vacany Rate largest decrease in vacancy rates from 2011- 2015 12.0% 10.0% 8.0% 6.0% www www 4.0% 2.0% 0.0% 2011 2012 2013 2014 2015 Class A office space along Carroll Creek Source: CoStar 27#28COMMERCIAL MARKET OFFICE VACANCY COMPARISONS 2015: Average office market vacancy is lower than both the I-270 corridor and the Washington market averages WELLS FARGO Wells Fargo Home Mortgage Source: CoStar Office Market Vacancy 16.1% 14.3% 13.0% Frederick Market 11-270 Corridor Washington Market 28#29COMMERCIAL MARKET RENTS 2015: Average office rental rates ($21.39) are 5% lower than 2011, but 2% higher than in 2014 $25.00 Average flex rental rates ($10.61) are 7% higher than in 2011 $20.00 Average retail rates ($18.36 are 4% higher than in 2011 $15.00 STLALE Stulz Air Technology Systems $10.00 $5.00 Office, Flex and Retail Rental Rates $0.00 2011 2012 2013 2014 2015 Office/gross Flex /nnn Retail /nnn Source: CoStar 29#30RESIDENTIAL HOUSING MARKET CURRENT CONDITIONS 2015: The average home price shows an increase of 17.5% from 2011 to 2015 Frederick % County Average Sold 2015 2011 Change Price $296,638 $252,473 17.5% Total Units home price increased by 9.8% for the same time frame. Sold 3,701 2,516 47% Compared to the State of Maryland where the average Source: Maryland Association of Realtors BO 30 30#31RESIDENTIAL HOUSING MARKET HOUSING PERMITS 2015: New Housing Units 1400 ■ The number of housing permits issued increased 17% from 2011 to 2015. 1200 1000 800 600 10202 533 400 200 Brunswick Crossing Source: Frederick County Department of Planning 893 1,318 1,239 1,158 -Housing Permits Issued 2011 2012 2013 2014 2015 31#32ECONOMIC OPPORTUNITIES Location, Location, Location 1-270 Technology Corridor and Research Triangle Bioscience, High Tech and Small Business Job Growth Fort Detrick & National Cancer Institute - Frederick Expansion Historic Downtown Frederick Carroll Creek Linear Park (Phase II) Downtown Hotel & Conference Center Downtown Innovation Center RT 85 Growth Area Urbana Growth Area Tourism Frederick Municipal Airport 32#33FORT DETRICK & NATIONAL CANCER INSTITUTE Important to our Country Cancer, AIDS, Biological Research & Vaccine Development Telecommunications Medical Protection for the Armed Forces Important to the Region Largest employer - 6,400 Ft. Detrick & 2,700 Leidos Biomedical / NCI-F Economy - $2.IB in Maryland ($842 M in employee compensation)* Technology transfer - Commercialization of off-the-shelf technologies *Source: 2015 Maryland Military Installation Economic Impact Study Frederick National Laboratory for Cancer Research Fort Detrick 33 8500#34GROWTH PRIVATE SECTOR MEDIMMUNE/ASTRAZENECA 2016 - $4M state funding announced for 180/340 corridor 2015-AZ/MedImmune began construction on $200M expansion with 40,000 SF. Project will result in 300 new jobs Anticipated Phase II to current expansion to include a $300M investment and additional 350 new jobs Only biologics manufacturing facility in North America with 300 new biologics MedImmune FREDERICK MANUFACTURING CENTER 433 RESEARCH COURT MedImmune Biologics Manufacturing Center 34 4#35SMALL BUSINESS RESOURCES 2015: The Frederick office of the SBA's Small Business Development Center (SBDC) was the busiest small business development office in the region. Frederick County SBDC FYII FY12 FY 13 FY14 FY15 Business 5 7 8 12 14 Starts Jobs Created 13 21 22 47 76 Loan Dollars $100K $428K $ 429K $3.9M $ 1.2M Source: Frederick County Small Business Development Center ESTCOMED Crisafullis 35#36FREDERICK INNOVATIVE TECHNOLOGY CENTER INC (FITCI) BUSINESS INCUBATION 15,000 SF High-Technology Business Incubator 25 offices 10 wet labs 30 tenants with 70-80 employees at any one time Downtown Innovation Center Framework began in 2015 to establish a technology incubator at 118 N. Market St. The goal is to move IT business incubation downtown and to help serve millennial population needs and bring more IT downtown 118 118 N. Market St. 36#37DOWNTOWN HOTEL & CONFERENCE CENTER April 2016 $IM State funding allocated in FY17 State Budget $15M State funding allocated in FY18 & FY19 State Budgets Proposed 207 room full-service Marriott hotel with onsite parking FREDERICK RAILROAD 14,000 SF of rentable meeting space- - two ballrooms Economic Impact $64 Million Project $25.8M annual direct, indirect and induced spending 280 Jobs ($9.0M payroll) 110 hotel jobs/$2.9 M payroll Sales Tax / Hotel Tax Catalyst for Reinvestment Rendering of proposed Downtown Hotel at Carroll Creek Existing site now 37 Source: City of Frederick Department of Economic Development#38CARROLL CREEK PARK GROWTH AREA $150M private investment, $60M flood control project and $27M linear urban park 550,000 SF office & retail space, 300 new residential units, 1.3 mile pedestrian & bike path, 350 seat Amphitheatre 1,500 new jobs and $1.2 million annual local real property taxes PHASE II - Estimated completion Spring 2016 Estimated at $15.7 million public/private partnership with $125 million of private investment 0 2007 Maryland APA Project of the Year 2008 IEDC Project of the Year store mahan T POD Source: City of Frederick Department of Economic Development Completed 2006 Phase 2A 2014/15 Phase 2B (Site J/K) 38#39GROWTH PRIVATE SECTOR EAST FREDERICK 2,200 AC positioned for mixed-use neighborhoods Major planned developments include: Frederick Brickworks - 65 acres located at East Street & I-70 Renn Farm - 200 acres MXD (1,500 residential units and 105,000 SF commercial) Riverside Research Park - 177 AC world- class life sciences research park anchored by Frederick National Laboratory for Cancer Research. Riverside Technology Park - 44 acre R&D Renn Farm property proposed 39#40GROWTH PRIVATE SECTOR FREDERICK TOWNE MALL REDEVELOPMENT Wal-Mart Facade meetna intentatalon Standard 632 Bridge to Rescential EASING CEN COANY GAIBH COUNTS WN MART Che nter Parcel Connector Picnic Area ENGING Landscaped Traffic Circle Sidewalk Cates DLC MASIO Exoing New Retal Facades The New Fredericktowne Centre 9 April 2013 reco Sculpture Garden Potentia Restaurant Pod The Golden Mile is the largest retail corridor in Frederick County Planned redevelopment of the former Frederick Towne Mall Final site plan approved for 155K Super Walmart and additional out-parcel buildings Expected to create 300 new jobs and $4.2 million in local and state taxes Project broke ground April 2016 Development underway of former Maryland State Police Barracks Golden Mile Gateway to feature Wawa convenience store/fueling station and additional in-line retail opportunities 40#41GROWTH PRIVATE SECTOR RT 85 - MATAN COMPANIES 2.5 million of Matan's 5.5 SF is located in Frederick County Westview Retail 21,000 SF of brand new inline retail delivering March 2016 At lease for a 4K SF restaurant by Paladar Restaurant Group Popular high-end restaurant and community bank are interested in pad (TBA Spring) 3 additional | to 1-1/2 acre pads available Westview Residential Under construction to Mitchell & Best for 610 residential units. Westview Office Research Industrial (ORI) 110,000 SF government contractor in negotiation Additional | million SF available Source: Matan ALT 40 15 340 15 85 270 28 70 41#42GROWTH PRIVATE SECTOR RT85 - ST JOHN PROPERTIES St. John Properties is the largest private commercial landlord in MD with one million SF of product in Frederick County and over 110 acres of pending development projects The Frederick Portfolio 55% Leased in 2011 75% Leased in 2012 81% Leased in 2013 85% Leased in 2014 WESTVIEW BUSINESS PARK 90% Leased in 2015 Russell Property 104 acre flex business park with II buildings totaling 413,000 SF Groundbreaking anticipated Fall 2016 Westview Business Park 40 acre flex business park with 9 buildings totaling 460,580 SF Major tenants - Patriot Technologies, Bechtel, Nestle, Ford Motor Co, Fastenal Source: St. John Properties STJOHN Pegasus Court 42#43GROWTH PRIVATE SECTOR RT 85/RT 355 OFFICE AREAS From 2005-2010 (large office vacancies) Bechtel Campus 187,600 SF vacant 5280 Corporate Dr 210,000 SF vacant 5202 Presidents Ct 235,000 SF vacant Frederick Corporate Park 275,000 SF vacant Source: Avison Young TODAY (rebounding with multiple office tenants) JEFFERSON TECHNOLOGY PARK Offices at Westview TruGreen 9,600 Progressive 8,100 WESTVIEW CORPORATE CENTER 5280 Corporate Dr. Spirent 48,000 1st Guarantee 20,000 BioStat 10,000 FRANCIS SIT KEY MA TECHNOLOGY PARK 7485 New Horizon Way Veterans Admin 73,000 5202 Presidents Ct. Maritz 61,600 Maximus 25,900 A²LA 18,000 Leidos 17,000 270 DRS 9,000 ONOCAC Urbana Corp. Center Fannie Mae 207,000 Legal & General 115,000 Social Security 300,000 ADIO TETRIC Si el otography 43#44GROWTH PRIVATE SECTOR URBANA Corporate Center - 200 acre office and R&D campus includes: Fannie Mae (247,000 SF) Legal General America (115,000 SF) Social Security Administration (300,000 SF and $500M capital investment) with 200 employees (average salary is $60,000) Residential 3,000 of 3,500 units in Villages of Urbana and Urbana Highlands are occupied Projected to add 100-150 new units per year Town Center Employment District Development underway for up to an additional: 610 residential units 1,950,000 SF office/research space potentially available FMH Urbana Legal General America Legal & General 3275 44#45TOURISM VISITOR SPENDING Visitor spending reached $IM per day in 2014, an all-time high Source: Frederick County Tourism Council Frederick County Tourism Industry Sales (in millions) $400.0 $380.4 $380.0 $361.2 BROOKS $360.0 $352.4 $340.0 $325.0 $320.0 $300.0 $288.5 $280.0 $260.0 $240.0 $220.0 $200.0 2010 2011 2012 2013 2014 Frederick County Tourism Industry Sales (in millions) 45#46TOURISM VISITORS TO FREDERICK COUNTY The number of visitors reached an all time high in 2014 at 1,745,000 visitors ANNUAL VISITORS 2014 784,200 960,800 2013 746,800 971,400 2012 740,000 888,300 So many things to do, why not stay awhile? H 2011 693,500 850,700 Overnight HIP&HISTORIC Frederick 2010 611,200 798,000 Day Source: Frederick County Tourism Council 46#47REINSTATED SUPPORT FOR AGRICULTURE INDUSTRY Frederick County has the largest number of farmland acres and number of farms in the State Farmers produce $150 million in products annually Dairy is the largest agriculture product Among the top 10 Counties in the U.S. for land preservation Farmers lead the State in the inventory of cattle and pigs Established and solid infrastructure exists with food processors, distributors, and farm equipment dealers Homegrown Frederick 47#48EMERGING AGRICULTURE ECONOMIES Wineries, Breweries, and Distilleries Growth || Wineries - 4 pending 4 Farm Breweries - I pending I Distillery - 4 pending First meadery, first cidery and first farm brewery in Maryland Largest winery in the State Largest craft beer producer in the State Orchid Cellars Meadery & Winery 48#49INFRASTRUCTURE FREDERICK MUNICIPAL AIRPORT (FDK) Economic Impact (2013 Maryland Aviation Administration Study) 1,268 jobs (direct/indirect/induced) $110M business revenue $ 77M personal income $ 7M taxes 300+ businesses use FDK annually 2nd busiest airport in Maryland (1st - BWI) (90,000 aircraft operations in 2014) Services provided: 2 licensed runways (5,200' and 3,600') Federally-funded Air Traffic Control Tower Fixed-base operator services, aircraft maintenance, hangars Fuel sales Flight training programs FLY FREDERICK 84T 49#50INFRASTRUCTURE TOP TRANSPORTATION PROJECTS MD 85/1-270 Northbound Ramp Intersection Design and reconstruction to add lanes on MD 85 at the northbound ramp intersection $110M project to begin summer 2017 MD 180/351 lane widening and expanded bridge over US 340/15 State announced funding support March 2016 I-70 Widening from MD 144 and MD 85/East Street $45 million project Source: Frederick County Department of Planning 85 The State of Maryland has dedicated $160M+ to specific road, bridge projects in Frederick County Westview Entertainment 270 Crestwo Boulevard 270 Marriott Frederick Athletic Club Sams Club Ramp G Ramp 8 Ramp 5 Ramp Ramp 1 85 Ramp 3 Ramp 5 Ramp 2 Holiday Drive Francis Scott Key Mall Interchange reconstruction MD 85 (Phase 1): 1-270 Interchange reconstruction project Spectrum Drive 50#51INFRASTRUCTURE UNDER CONSTRUCTION TRANSPORTATION PROJECTS Carroll Creek Park (Urban Park Bike/Pedestrian) Phase II Construction to be completed Spring 2016 $15.7M project US 15/Monocacy Boulevard Interchange Complete in 2017/2018 Construction cost - $63.8 million Monocacy Boulevard Center Section $16 million share between County & City Opens up land for employment development Improves access for business to municipal airport US 1M Monacacy Boulevard PROJECT AREA FREDERICK 15 Crowing Hay Open Pla Source: Frederick County Department of Planning 51#52NO COUNTY BUSINESS PERSONAL PROPERTY TAX Jurisdiction Rate FREDERICK COUNTY $ 0 City of Frederick $ 1.55 (10 year phase-out) Montgomery County $ 1.83 City of Rockville $ 2.64 City of Gaithersburg $ 2.36 Howard County $ 2.54 Loudoun County (VA) $ 4.20 Town of Leesburg (VA) $ 5.20 Fairfax County (VA) $ 4.57 Business Personal Property Tax Tax on property that can be touched and moved, such as equipment, furniture, inventory, supplies and other possessions "The elimination of business personal property tax improves the business competitiveness of a jurisdiction and encourages reinvestment in a business." Source: Tax Foundation In 2015, the City of Frederick voted to eliminate business personal property tax over a 10-year period and voted to eliminate the tax retroactive to Jan 2015 for all manufacturers. 52#53NEW BUSINESS INCENTIVES 2016 Small Business Tax Credit - 2016 Small Business Loan Guarantee - 2015 Commercial and Industrial Business Tax Credit - Up to 10 years (offered to AstraZeneca/MedImmune expansion) 2015 Water and Sewer Capacity - Water and Sewer Capacity Leases for certain manufacturing facilities in lieu of purchasing the capacity for a term of no more than 20 years. Water and Sewer Capacity Fee Payment Plan Fund (PPF) - may be used to provide loans to certain commercial water and/or wastewater customers to purchase capacity fees for new construction or expansion. It allows the property owner to spread out the payment of the Capacity Fees over a max term of 10 years. 53#54AWARD WINNING EDUCATION FREDERICK COUNTY PUBLIC SCHOOLS 7 high schools made U.S. News & World Report's best high schools list for 2016 In January 2015, Maryland Public Schools graduation rates hit record high of 86.4% while FCPS graduation rate was even higher at 93.5% All high schools rank in the top 10% National Challenge Index rick C ernm Source: Frederick County Public Schools 54#55PILLARS OF STABILITY HIGHER EDUCATION Frederick Community College, Est. 1957 Total Enrollment: 6,159 (2-Year Institution) 1,103 employees Number of Degrees: 846 Hood College, Founded 1893 $32 million each year in local, direct economic impact Total Enrollment: 2,365 (4-Year Institution) 418 employees Named one of the top 25 best regional universities (North) by U.S. News & World Report's Best Colleges (2015) Mount Saint Mary's University, Est. 1808 Oldest independent Catholic University in US Total Enrollment: 2,240 (4-Year Institution) 511 employees Named one of the top 25 best regional universities (North) by U.S. News & World Report's Best Colleges (2015) 55#56PILLARS OF STABILITY HEALTHCARE Frederick Regional Health System March 2016- Broke ground on James M. Stockman Cancer Institute ($21M project) Operates 20 healthcare sites throughout the County Designated by The Joint Commission as a Top Performer on Key Quality MeasuresⓇ for achieving excellence on its accountability measures for heart attack, heart failure, pneumonia and surgical care. One of the busiest Emergency Departments in MD treating over 82,000 patients each year ■ Total staff of 2,700 with 583 physicians Source: Frederick Memorial Healthcare System 56#57MAIN STREET FREDERICK COUNTY Main Street America is a program of the National Trust for Historic Preservation that helps revitalize downtowns and commercial districts Four (4) Maryland Main Streets - tied for most main street designations per County in Maryland Downtown Frederick Brunswick Middletown Thurmont Five (5) Maryland Sustainable Communities (Sustainable Communities Act of 2010 resources for comprehensive revitalization including funding sources such as Neighborhood Business Works and Community Legacy Program and tax credits) Brunswick Emmitsburg Middletown Thurmont City of Frederick - Patrick St. Corridor National Main Street Center a subsidiary of the National Trust for Historic Preservation MAIN STREET AMERICA™ 57 57#58FISCAL MANAGEMENT MAY 2016 FREDERICK COUNTY 1748 MARYLAND#59SOUND FISCAL MANAGEMENT Contingency Planning Sound Fiscal Management Operating Budget Management Formal Reports to County Executive Capital Budget Management Fund Balance & Reserve Policies Debt & Debt Affordability Policies County Executive Driven Strategic Pay-Go Capital Policy Goals 59#60TAX FLEXIBILITY LOCAL AUTHORITY Real Property Tax - $1.06 per $100 of assessed valuation in FY16 and proposed FY17 $0.01 added to the property tax rate equals approximately $2.7million Income Tax - 2.96%; the statutory limit is 3.20% FY2015 income tax rate at 3.20% would equal an additional $15.8 million in revenue Fire Tax - 0.0% Fire tax districts consolidated into the General Fund in FY14 Business Personal Property Tax - 0.00% $2.34 per $100 for one class of property only (power generating facilities) Admissions and Amusement Taxes - 0.00% Reduced to 0.00% effective 2/1/2013 Hotel/Motel Tax - 3%; the statutory limit is 5% Revenue Source for Frederick County Tourism Recordation Tax - $6.00 per $500 of consideration Provides a dedicated revenue source for General Fund and several special revenue funds 60 60#61TAX FLEXIBILITY COMPARISONS OF TAX RATES Admissions Real and Hotel Property Fire Income Recordation Transfer Amusement Motel Taxes Tax Taxes Taxes Taxes Taxes Taxes County FY 16 FY 16 CY 15/16 FY 16 FY 16 FY 16 FY 16 Frederick $ 1.060 2.96% 6.00 0.0% 0.0% 3.0% Carroll $ 1.018 $ 3.03% $ 5.00 0.0% 10.0% 5.0% Charles $ 1.141 $ 0.064 3.03% 5.00 0.5% 10.0% 5.0% Harford $ 1.042 $ 3.06% 6.60 1.0% 5.0% 6.0% Howard $ 1.094 $ 0.176 3.20% 2.50 1.0% 7.5% 7.0% Washington $ 0.948 $ 2.80% $ 3.80 0.5% 5.0% 6.0% Source: Overview of Maryland Local Government Department of Legislative Services, 2016 Charles County website, Harford County website, and Howard County website 61#62PROPERTY TAX RATES – FY2016 - $1.400 $1.200 $0.064 $0.176 $1.000 $0.800 $0.600 $1.141 $1.018 $1.042 $1.014 $1.060 $0.948 $0.400 $0.200 A Carroll Charles Harford Howard Frederick Washington ■Property Tax Rates Fire Tax Rates 62 62#63IMPACT AND MITIGATION FEES $18 Budget Actual $16 FY2011 6,848,463 6,861,498 $14 FY2012 6,906,532 7,168,483 $12 FY2013 7,189,516 10,116,334 $10 $8 FY2014 8,153,760 11,588,514 $6 FY2015 10,922,932 13,864,369 $4 FY2016 11,192,000 15,340,000 * $2 TOTAL $51,213,203 $ 64,939,198 $0 FYII FY12 FY13 FY14 FY15 FY16 *FY16 Actual estimates as of March 31, 2016 Actual Budget 63#64PAY-GO FUNDING FROM GENERAL FUND AND ALL SOURCES ($ IN MILLIONS) $25.00 $20.00 $15.00 $23.97 $14.74 $15.80 $13.06 $14.08 $14.38 $13.00 $12.54 $13.06 $10.46 $10.00 $8.84 $6.64 $5.00 $0.00 FY12 FY13 FY14 FY15 General Fund Paygo *FY16 based on adopted budget **FY17 based on proposed budget FY16* FY17** Total Paygo 64 44#65CONTINGENCY PLANNING APPROPRIATIONS FY2015 FY2016 FY2017 Fuel Cost Reserve $1,449,420 $549,420 $549,420 Severe Weather Reserve General Contingency 1,000,000 1,200,000 1,200,000 300,000 300,000 300,000 Permanent Public Improvement 0 215,000 180,000 Wynne Reserve 2,883,629 2,883,627 2,883,627 Additional 1% Set Aside: Bond Enhancement Reserve 2,700,000 2,700,000 2,700,000 Revenue Stabilization 0 0 2,629,108 Total $5,329,108 65#66FY 17 BUDGET HIGHLIGHTS SOURCE OF FUNDS The General Fund Budget reflects an increase of 4.5%. The FY17 General Fund Budget is proposed based on existing tax rates for both property and income taxes. There are no tax rate increases. The property tax rate of $1.06 per $100 of assessed value will generate 54% of total operating revenue. Income tax is the next largest revenue stream representing 38% of total operating revenue. Other local taxes, fees for services and miscellaneous categories make up the remaining 8%. 66 66#67FY 17 BUDGET HIGHLIGHTS USE OF FUNDS Funding for education, including capital projects and debt service, makes up the single largest category of expenditures at 53%. The FY17 budget provides $10.5 million above the required Maintenance of Effort funding level, for the Frederick County Board of Education as well as an additional $500,000 of one time funding for school technology. Frederick Community College is allocated an additional $700,000 for staff salary improvements and improvements to campus security. The proposed FY17 budget provides for a merit step salary increase for county employees. 67 52#68PROPOSED CIP FY2017 – 2022 SOURCES OF FUNDING ($ IN MILLIONS) General Obligation Debt: Amount % GO General Fund 269.39 40.6% GO Impact Fees 5.00 0.8% GO Recordation Tax 11.62 1.8% GO Enterprise Funds 67.71 10.2% 353.72 53.4% Other Sources: General Fund 108.47 16.4% Mitigation Fee - Schools 17.50 2.6% Recordation Taxes 18.97 2.9% Impact Fees 27.93 4.2% Water & Sewer Fees 11.13 1.7% City of Frederick 8.40 1.3% Developer Contributions - W/S 17.95 2.7% Federal & State Grants 98.35 14.8% Other 0.54 0.1% Total Other Sources 309.24 46.6% 662.96 100.0% Total Sources Pay Go Funding 68 88#69SIX-YEAR CAPITAL IMPROVEMENTS PROGRAM FY2017 - FY2022 ($ in millioNS) Projects Amounts % Public Schools (K-12) 217.39 32.8% Transportation and Roads 139.68 21.1% General Government 104.57 15.8% Water & Sewer 104.15 15.7% Parks and Recreation 40.94 6.2% Watershed Restoration 26.14 3.9% Community College 23.73 3.6% Municipalities 6.36 1.0% Total 662.96 100.0% 69#70SUMMARY OF FUTURE DEBT FUNDING ($ IN MILLIONS) Self-Supporting Debt General Fund Supported Impact Recordation Water & Total Self- Fees Tax Sewer Supporting TOTAL FY2017 22.80 5.00 3.96 20.22 29.18 51.98 FY2018 42.86 0.85 0.38 1.23 44.09 FY2019 66.13 5.46 5.46 71.59 FY2020 60.70 0.45 0.45 61.15 FY2021 44.97 0.45 4.64 5.09 50.06 FY2022 31.93 0.45 42.47 42.92 74.85 $ 269.39 $ 5.00 $ 11.62 $ 67.71 $ 84.33 $ 353.72 Source: Proposed Capital Improvements Program FY2017-2022 70#71SCHOOL CAPACITY PROJECTS FY2017 – FY2022 Construction Year School New Seats Elem. Middle High Total FY2017 Frederick High School - Replacement FY2018 Sugarloaf Elementary - New FY2018 Butterfly Ridge Elementary - New 223 223 725 725 725 725 FY2020 Urbana Elementary - Replacement FY2021 Waverly Elementary - Addition TOTAL NEW SEATS FUNDED THRU FY22 214 214 284 284 1,948 223 2,171 Sept 2022 Enrollment 19,925 9,547 13,723 43,195 Sept 2022 Capacity 21,389 11,519 14,719 47,627 Capacity Goal 90% 90% 90% 90% Sept 2022 Enrollment/Capacity Ratio 93% 83% 93% 91% 71#72DEBT AFFORDABILITY STUDY The County's financial advisor has been asked to perform a study of the County's current debt policies, and if appropriate, provide recommendations for how these policies might be improved to better suit the County's current capital needs without endangering its top tier credit ratings. The objectives of this study are threefold: Compare the County's current General Fund and Total Debt Profile and Key Debt Ratios to a set of peer governments; Project the County's future General Fund and Total Debt Ratios after issuance of its 6-Year CIP; and Possible recommendations for how the County might refresh its current policies regarding debt issuance, monitoring, and projections include: Increasing fund balance/reserves beyond current level Consider increasing ratios to align with peer polices Consider use of other ratios and metrics Conform, if necessary, the County's policies to the current rating agency methodologies 72#73FINANCIAL RESULTS MAY 2016 FREDERICK COUNTY 1748 MARYLAND#74ASSESSMENT VALUES OF TAXABLE PROPERTY (BUDGETARY BASIS IN MILLIONS) $30,000 $28,227 $26,905 $27,166 $26,306 $25,771 $25,765 $26,317 $25,000 $20,000 $15,000 $10,000 $5,000 $- 2011 2012 2013 2014 2015 2016* 2017* Source: SDAT *Base Estimate Date March 31, 2016 74#75PROPERTY TAX REVENUE (BUDGETARY BASIS IN MILLIONS) $300.00 $252.57 $255.26 $246.58 $249.13 $263.84 $267.85 $267.86 $271.40 $276.69 $282.10 $250.00 $227.04 $229.41 $200.00 $150.00 $100.00 $50.00 $- FY2011 FY2012 FY2013 FY2014* FY2015 FY2016** Budget Actual *FY2014 Fire Tax Districts consolidated into General Fund **FY2016 Actual estimates as of March 31, 2016 75#76INCOME TAX REVENUE (BUDGETARY BASIS IN MILLIONS) $198.99 $195.20 $192.92 $200.00 $182.54 $169.76 $171.23 $176.07 $176.36 $174.15 $180.00 $157.83 $155.84 $160.00 $139.14 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $- FY2011 FY2012 FY2013 FY2014 FY2015 FY2016* Budget Actual *FY2016 Actual estimates as of March 31, 2016 76#77OTHER LOCAL TAXES REVENUE (BUDGETARY BASIS IN MILLIONS) $25.00 $20.25 $19.28 $20.00 $17.41 $17.63 $17.09 $17.52 $18.17 $15.56 $15.00 $12.82 $12.48 $12.82 $12.36 $10.00 $5.00 $0.00 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016* *FY2016 Actual estimates as of March 31, 2016 Budget Actual 77#78GENERAL FUND REVENUE (BUDGETARY BASIS IN MILLIONS) $600.00 $508.25 $510.52 $524.49 $500.00 $478.50 $479.41 $491.00 $439.86 $444.64 $417.59 $428.32 $430.88 $439.14 $400.00 $300.00 $200.00 $100.00 $0.00 FY2011 FY2012 FY2013 FY2014* FY2015 FY2016 ** Budget Actual *FY2014 Fire Tax Districts consolidated into General Fund **FY2016 Actual estimates as of March 31, 2016 78#79GENERAL FUND REVENUE BY SOURCE (BUDGETARY BASIS) By Source FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 * Taxes $425,560,583 $431,254,867 $423,118,989 $459,079,239 $485,884,025 $501,380,113 Licenses & Permits 517,018 532,074 2,974,589 3,360,551 4,094,070 3,847,022 Intergovernmental 6,812,578 6,043,506 3,371,201 3,893,280 4,509,121 4,042,836 Charges for Services 3,459,426 3,821,932 6,1 14,460 9,403,534 9,694,734 10,331,479 Fines and Forfeitures 159,132 153,910 308,429 52,760 87,555 67,019 Investment Income 461,454 Miscellaneous Total Revenue 2,893,628 $439,863,819 348,963 2,480,963 $444,636,215 231,262 3,021,241 $439,140,171 247,956 3,373,108 $479,410,428 263,472 3,716,969 $508,249,946 300,000 4,524,155 $524,492,624 *FY2016 Estimates as of March 31, 2016 79#80GENERAL FUND VARIANCES - BUDGET TO ACTUAL REVENUES Property Taxes Income Taxes Other Local Taxes Intergovernmental Revenue Other Revenue TOTAL REVENUES FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 * $ 2,557,669 13,917,329 (464,223) $ 2,378,656 4,842,092 221,445 $ 4,007,321 (2,217,220) 1,525,076 $ 3,537,675 12,666,856 1,757,139 $ 5,448,761 6,061,073 2,085,222 270,372 118,641 (554,369) 23,151 (118,132) 34,145 695,079 (635,173) (1,398,486) 496,260 16,315,292 8,255,913 2,125,635 16,586,335 13,973,184 EXPENDITURES & OTHER USES General Government Operating 14,488,252 Other Transfers & Misc. Non-operating 3,541,249 Debt Service TOTAL EXPENDITURES & OTHER USES 2,351,950 20,381,451 14,063,153 12,226,429 574,904 26,864,486 16,337,584 801,926 11,289 17,150,799 9,651,881 6,045,166 460,100 2,807,735 811,609 10,923,590 8,852,901 TOTAL VARIANCE *FY2016 Estimates as of March 31, 2016 $ 36,696,743 $ 35,120,399 $ 19,276,434 $27,509,925 $22,826,085 80#81GENERAL FUND FUND BALANCE General Fund Fund Balance Unrestricted Fund Balance Fiscal Total Fund as a % of Year 2011 Revenues Non-spendable Restricted $439,863,821 $ 1,647,689 $1,748,141 $21,460,449 $59,868,123 $ 500,000 $ 85,224,402 Committed Assigned Unassigned Balances Revenues** 18.60% 2012 2013 2014 2015 2016* 444,636,215 439,140,171 479,410,428 508,249,946 524,492,624 1,245,845 1,481,720 22,808,337 74,564,270 500,000 100,600,172 22.01% 1,448,707 3,075,002 25,194,232 875,623 1,789,157 28,937,617 2,106,066 2,284,366 70,701,317 2,106,066 74,846,579 64,137,601 45,598,798 5,105,750 4,755,750 500,000 94,355,542 20.46% 300,000 77,501,195 15.61% 300,000 80,497,499 14.97% 300,000 82,008,395 15.23% *FY2016 Estimates as of March 31, 2016 **Unrestricted Fund Balances include Committed, Assigned, and Unassigned. 81#82UNRESTRICTED GENERAL FUND BALANCE AS A PERCENTAGE OF REVENUE 25.00% 22.01% 20.46% 20.00% 18.60% 15.00% 10.00% 5.00% 0.00% FY2011 FY2012 FY2013 Unrestricted Fund Balance** *FY2016 Estimates as of March 31, 2016 **Unrestricted Fund Balances include Committed, Assigned, and Unassigned 15.61% 14.97% 15.23% FY2014 FY2015 5% Set Aside Note: Set aside to increase to 6% by FY17 FY2016* 82 32#83GENERAL FUND FUND BALANCE TRENDS Nonspendable FY 2011 FY 2012 FY 2013 FY 2014 $ 1,647,689 $ 1,245,845 $ 1,448,707 $ 875,623 $ 2,106,066 FY 2015 FY 2016 * $ 2,106,066 Restricted Debt Service 1,748,141 1,481,720 3,075,002 1,789,157 Other 1,914,392 369,974 Committed Enabling Legislation (5% set aside) 20,213,585 20,452,457 Bond Rating Enhancement 100,000 1,200,000 21,492,983 2,200,000 24,012,867 2,700,000 24,763,178 25,360,811 2,700,000 2,700,000 Year | Budget 19,883,347 23,054,531 Year 2 Budget 23,054,531 23,353,808 Fuel Reserve LOSAP Encumbrances Assigned Snow Removal Fuel Reserve 41,265 41,265 129,611 1,017,253 172,590 983,290 186,998 1,314,251 232,940 1,991,810 258,996 336,164 675,601 1,000,000 473,553 1,502,939 200,726 Lobbying Monitoring/Other Year | Budget 2,657 20,129,637 Year 2 Budget 38,355,177 7,636 38,355,177 34,564,993 350,000 Income Taxes (Wynne Case) 34,564,993 23,551,966 3,414,828 24,051,966 17,583,347 2,883,627 2,883,627 2,883,627 Encumbrances 705,051 Unassigned 500,000 $ 85,224,402 636,464 500,000 $ 100,600,172 629,322 500,000 879,132 300,000 1,872,123 1,872,123 300,000 300,000 $ 94,355,542 $ 77,501,195 $ 80,497,499 $ 82,008,395 83 *FY2016 Estimates as of March 31, 2016#84SPECIAL REVENUE FUND AVAILABLE FUND BALANCES FOR DEBT SERVICE AS OF JUNE 30 Recordation Taxes School Construction Fund Balance FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 * Available Fund Balance for Debt Service $ 13,246,141 7,714,666 $ 11,293,397 7,806,436 $ 11,680,050 7,929,822 $ 10,728,938 $ 8,018,534 11,654,409 8,186,734 $ 11,787,642 9,207,178 Parks Acquisition & Development Fund Balance 1,596,007 2,567,923 Available Fund Balance for Debt Service 55,132 91,058 635,530 162,492 1,533,876 162,034 1,301,306 161,048 2,104,134 247,048 Impact & Mitigation Fees Fund Balance 11,405,581 11,071,737 13,913,209 Available Fund Balance for Debt Service 10,289,786 9,237,044 10,453,746 16,745,497 13,036,563 21,914,791 12,068,841 29,486,370 10,760,588 Totals Fund Balance 26,247,729 24,933,057 26,228,789 29,008,311 34,870,506 Available Fund Balance for Debt Service 18,059,584 17,134,538 18,546,060 21,217,131 20,416,623 43,378,146 20,214,814 Debt Service Debt Service Coverage *FY2016 Estimates as of March 31, 2016 12,590,334 1.43 13,147,832 1.30 12,990,159 1.43 13,079,965 1.62 11,563,622 1.77 11,818,275 1.71 84#85SPECIAL REVENUE FUND AVAILABLE FUND BALANCES FOR DEBT SERVICE AS OF JUNE 30 $25,000,000 2 1.77 1.71 1.8 1.62 $20,000,000 1.6 1.43 1.43 1.3 1.4 $15,000,000 1.2 I $10,000,000 0.8 $5,000,000 8རྐྱ་ 0.6 0.4 0.2 0 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016* Available Fund Balances for Debt Service Debt Service Debt Service Coverage *FY2016 Estimates as of March 31, 2016 85#86WATER/SEWER FUND – FY2015 STATEMENT OF NET POSITION Assets Cash and cash equivalents $ 68,336,271 Liabilities Accounts payable $ 3,325,624 Receivables, net of allow. 11,322,971 Payroll and benefits 458,658 Inventories 139,055 Unearned revenues 1,260,039 Investments 7,003,060 Other liabilities 2,442,962 Capital assets 545,450,062 GO bonds and notes 162,408,651 Accumulated depreciation (127,076,974) Total Liabilities 169,895,934 Construction in progress 150,932,461 Total Assets 656,106,906 Net Position Deferred Outflows of Resources Deferred charge on refunding 5,577,394 Net investment in capital assets Restricted for capital projects Unrestricted Total net position 414,007,584 1,533,292 76,247,490 $ 491,788,366 86#87WATER/SEWER FUND – FY2015 STATEMENT OF REVENUE EXPENSE & CHANGES IN NET POSITION Operating Revenues Service charges Delinquent fees Other revenues Total operating revenues $ 27,838,558 Nonoperating revenues (expenses) Investment earnings 67,251 Build America Bonds subsidy 1,029,924 28,935,733 303,840 328,633 Interest expense Miscellaneous expense (3,570,328) Gain/(loss) on capital assets (419,132) Total nonoperating revenues (expenses) (3,356,987) Net income/(loss) before contributions and transfers (5,817,581) Operating Expenses Personnel services 9,160,376 Operating expenses 8,351,228 Capital contributions 24,576,946 Supplies 1,741,090 Transfers out Repairs and maintenance 2,344,768 Total contributions and transfers in 24,576,946 Depreciation expense 9,798,865 Total operating expenses 31,396,327 Change in net position 18,759,365 Operating income (loss) (2,460,594) Net position - beginning of year 473,029,001 Net position - end of year $ 491,788,366 87#88WATER & SEWER FUND RESERVES UNRESTRICTED NET POSITION ($ IN MILLIONS) $90 $80 $81 $80 $77 $76 $76 $70 $60 $50 $40 $30 $20 $10 $0 2011 2012 2013 2014 2015 88 80#89FREDERICK COUNTY FINANCIAL MODEL USE OF WATER & SEWER OPERATING RESERVES 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 14 715 716 717 FY18 FY19 FY20 FY21 (2,000,000) (4,000,000) ■Cumulative (Water) Cumulative (Sewer) Projected Cumulative Surplus (Shortfall) as a Result of Approved Five Year Gradual Increase in Water & Sewer Rates Source: Municipal & Financial Services Group - Frederick County Financial Model (11/20/2012) 89#90FREDERICK COUNTY ACTUALS USE OF WATER & SEWER OPERATING RESERVES 1,500,000 1,000,000 500,000 714* FY15* FY 16** (500,000) (1,000,000) (1,500,000) *FY14 and FY15 are actuals ■Cumulative (Water) Cumulative (Sewer) **FY 16 Estimates as of March 31, 2016 06 90#91WATER & SEWER FUND – FY2015 UNRESTRICTED NET POSITION Unrestricted Net Position Operating Reserves $ 5,399,364 3R Reserves 2,221,489 Tap Credits 2,496,219 Cash Funding of Capital Projects 5,744,781 System Development Reserves 57,645,287 Total W/S Reserves 73,507,140 Excess Reserves 2,740,350 Total Unrestricted Net Position $ 76,247,490 91#92WATER/SEWER FUND – FY2016* STATEMENT OF REVENUE EXPENSE & CHANGES IN NET POSITION Operating Revenues Service charges 30,951,060 Nonoperating revenues (expenses) Investment earnings Delinquent fees Other revenues 91,049 1,520,372 Build America Bonds subsidy Interest expense 331,441 328,633 (4,681,546) Total operating revenues 32,562,481 Miscellaneous expense Gain/(loss) on capital assets Total nonoperating revenues (expenses) (4,021,472) Net income/(loss) before contributions and transfers (4,178,713) Operating Expenses Personnel services Operating expenses 8,852, 189 8,651,814 Capital contributions 20,000,000 Supplies 2,132,635 Transfers out Repairs and maintenance 3,224,875 Total contributions and transfers 20,000,000 Depreciation expense 9,858,209 Total operating expenses 32,719,722 Change in net position 15,821,287 Operating income (loss) (157,241) Net position - beginning of year Net position - end of year 491,788,366 $ 507,609,653 *FY16 Estimates as of March 31, 2016 92#93CASH FLOW BASIS WATER & SEWER COVERAGE 2013 Net Income (Loss) Add Back: Depreciation expense Interest expense Cash Flow Available from Operations Add: $ (7,407,879) 2014 $ (7,328,186) 2015 $ (5,817,581) 2016* $ (4,178,713) 9,694,115 9,774,024 9,798,865 9,858,209 4,308,223 3,742,746 6,594,459 6,188,584 3,570,328 7,551,612 4,681,546 10,361,042 Capital Contributions 36,011,030 25,481,073 Total Available Cash Flow $ 42,605,489 $ 31,669,657 24,576,946 $ 32,128,558 20,000,000 $ 30,361,042 Total Available Cash Flow $ 42,605,489 Water and Sewer Debt Service $ 20,578,135 $ 31,669,657 $ 18,178,684 $ 32,128,558 $ 23,731,612 $ 30,361,042 $ 17,421,337 Debt Service Coverage 2.07 1.74 1.35 1.74 *FY2016 Estimates as of March 31, 2016 93#94SOLID WASTE FUND – FY2015 STATEMENT OF NET POSITION Assets Cash and cash equivalents Receivables, net of allow. Liabilities $ 35,461,515 Accounts payable $ 1,355,164 1,934,079 Payroll and benefits 300,468 Investments 10,001,140 Unearned revenue 290,565 Capital assets 65,877,260 Landfill closure liability 14,332,165 Accumulated depreciation (37,907,901) GO bonds and notes 21,056,205 Total Assets 75,366,093 Total Liabilities 37,334,567 Deferred Outflows of Resources Deferred charge on refunding 1,066,989 Net Position Net investment in capital assets Unrestricted Total net position In addition to the $14.33 million set aside for landfill closure and post-closure liabilities, the unrestricted net assets at June 30, 2015 was $28.28 million, an increase of $3.00 million from FY2014. 10,816,122 28,282,393 $ 39,098,515 94#95$ 24,896,995 54,770 SOLID WASTE FUND – FY2015 STATEMENT OF REVENUE EXPENSE & CHANGES IN NET POSITION Operating Revenues Service charges Delinquent fees Other revenues Total operating revenues 24,951,765 Nonoperating revenues (expenses) Investment earnings 61,083 Build America Bonds subsidy 8,607 Interest expense (692,892) Miscellaneous expense (437,216) Gain/(loss) on capital assets Total nonoperating revenues Operating Expenses (expenses) (1,060,418) Personnel services 2,156,309 Operating expenses 15,240,868 Change in net position 5,178,951 Supplies 59,055 Repairs and maintenance 299,445 Net position - beginning of year 33,919,564 Depreciation expense Total operating expenses 956,719 18,712,396 Net position - end of year $ 39,098,515 Operating income (loss) 6,239,369 95#96SOLID WASTE FUND – FY2016* STATEMENT OF REVENUE EXPENSE & CHANGES IN NET POSITION Operating Revenues Nonoperating revenues (expenses) Service charges $25,344,624 Investment earnings 109,805 Delinquent fees 39,128 Build America Bonds subsidy 8,607 Other revenues Interest expense (598,757) Total operating revenues 25,383,752 Miscellaneous expense 126 Gain/(loss) on capital assets Total nonoperating revenues Operating Expenses Personnel services (expenses) (480,219) 2,211,524 Operating expenses 15,881,824 Net Income/(loss) before contruibutions Supplies 38,662 and transfers 5,481,280 Repairs and maintenance 225,656 Depreciation expense 1,064,587 Total operating expenses 19,422,253 Transfers out Total transfers out (4,000,000) Operating income (loss) 5,961,499 Change in net position Net position beginning of year Net position - end of year (4,000,000) 1,481,280 39,098,515 $ 40,579,795 *FY16 Estimates as of March 31, 2016 96 96#97CASH FLOW BASIS SOLID WASTE COVERAGE 2013 2014 2015 2016* Net Income (Loss) Add Back: $ 6,766,030 $ 4,449,632 $ 5,178,951 $ 5,481,280 Depreciation expense 1,029,995 915,260 956,719 1,064,587 Interest expense 979,803 810,146 692,892 598,757 Total Available Cash Flow $ 8,775,828 $ 6,175,038 $ 6,828,562 $ 7,144,624 Total Available Cash Flow Water and Sewer Debt Service $ 8,775,828 $ 4,300,445 $ 6,175,038 $ $ 4,212,039 $ 6,828,562 $ 7,144,624 4,732,468 $ 3,482,756 Debt Service Coverage 2.04 1.47 1.44 2.05 *FY2016 Estimates as of March 31, 2016 97#98RETIREMENT PLAN FUNDING PENSION CONTRIBUTIONS Fiscal Year Actuarially Determined Contribution Contribution in Relation Percent Recognized 2014 $ 18,687,000 $ 21,260,450 113.8% 2015 $ 18,721,000 $ 20,322,636 108.6% 2016* $ 18,995,436 $ 19,072,836 100.4% 2017** $ 16,589,733 $ 19,349,200 116.6% PENSION LIABILITY*** Fiscal Year 2014 2015 2016 Plan Fiduciary Net Position (PFNP) $455,073,971 Total Pension Liability (TPL) PFNP as a % of TPL $474,630,000 95.88% $ 487,314,620 $ 508,116,000 95.91% TBD TBD TBD *Source: Actuarial Valuation as of 7-1-14 **Source: Actuarial Valuation as of 7-1-15 ***Source: GASB 68 Actuarial Information for the period ending 6-30-15 98#99OTHER POST EMPLOYMENT BENEFITS Fiscal Annual Required Contribution Recognized in Plan Year Contribution Financial Statements Percent Contributed 2011 $ 20,626,000 $ 11,729,902 57% 2012 19,252,000 19,252,000 100% 2013 13,924,000 18,389,186 132% 2014 14,423,000 14,655,250 102% 2015 10,309,000 11,468,959 111% 99#100OTHER POST EMPLOYMENT BENEFITS Actuarial Value of Actuarial Plan Assets Actuarial Accrued AVPL as a % Valuation Date (AVPL) Liability (AAL) of AAL 7/1/2011 $ 37,696,695 $ 195,525,000 19.3% 7/1/2012 $ 55,592,953 $ 175,466,000 31.7% 7/1/2013 $ 76,811,388 $ 188,928,000 40.7% 7/1/2014 $ 99,093,741 $ 176,930,000 56.0% 7/1/2015 $ 109,771,823 $ 176,930,000 62.0% 100#101FUNCTIONAL USE OF BOND PROCEEDS Public Schools (K-12) Transportation & Roads General Government Water & Sewer Community College Municpalities $ 47,302,660 22,736,000 12,697,000 9,299,340 4,000,000 600,000 Total Project Funding 96,635,000 Refunding 2014B Bonds (Taxable) 34,815,000 Cost of Issuance 1,107,250 * Total Use of Bond Proceeds $132,557,250 * Preliminary - subject to change 101#102CONTACT INFORMATION Jan H. Gardner, County Executive Frederick County, Maryland Office: 301-600-3190 Fax: 301-600-1050 [email protected] Helen Propheter, Director Office Economic Development Office: 301-600-1899 Fax: 301-600- [email protected] Sam Ketterman, Financial Advisor Davenport & Company LLC Office: 410-296-9426 Fax: 410-296-8517 [email protected] Lori L. Depies, CPA, Director * Finance Division Office: 301-600-1753 Fax: 301-600-2302 [email protected] Rick Harcum, Budget Director Budget Office Office: 301-600-1623 Fax: 301-600-2305 [email protected] Joe Mason, Financial Advisor Davenport & Company LLC Office: 571-223-5893 Fax: 410-296-8517 [email protected] *Primary contact 102#103EXHIBITS MAY 2016 FREDERICK COUNTY 1748 MARYLAND#104EXHIBITS Multi-Year Projections Exhibit A Residential Assessment Areas Exhibit B Bond Rating Enhancement Reserve Exhibit C Debt Affordability Model Exhibit D County Fund Balance Policy Exhibit E Debt Policy Exhibit F Water/Sewer Rates Ordinance/Reserves Exhibit G Strategic Plan 2014 - 2018 Exhibit H 104#105EXHIBIT A Local Property Taxes Local Income Taxes Other Local Taxes SPECIFIC ASSUMPTIONS BOARD OF EDUCATION FY2018 thru 2022 MULTI-YEAR PROJECTIONS FISCAL YEARS 2018 – 2022 ASSUMPTIONS Tax rates remain steady, property assessments are assumed to grow at a slightly moderate rate Tax rates remain steady, income growth is projected to continue at the 5-year average of 5.2% Recordation tax is forecasted to continue at a growth rate of 3.7% FY2018 FY2019 FY2020 FY2021 FY2022 $ 270,082,184 $ 281,345,659 $ 290,122,312 $ 300,306,420 $ 310,683,347 4.6% 4.2% 3.1% 3.5% 3.5% Percent Increase from Prior Year FREDERICK COMMUNITY COLLEGE FY2018 thru 2022 $ 16,575,163 $ 17,266,412 $ 17,805,042 $ 18,430,049 $ 19,066,889 Percent Increase from Prior Year 4.6% 4.2% 3.1% 3.5% 3.5% TRANSFER TO CAPITAL PROJECTS FY2018 thru 2022 $ 14,479,639 $ 15,729,257 $ 17,236,253 $ 17,545,606 $ 18,294,208 Percent Increase (decrease) from Prior Year GENERAL ASSUMPTIONS 10.9% 8.6% 9.6% 1.8% 4.3% SALARIES No Merit 1.0% COLA +3.5% Merit 1.0% COLA No Merit 1.0% COLA +3.5% Merit 1.0% COLA No Merit 1.0% COLA FRINGE BENEFITS Retirement Health Insurance All Others OPERATING EXPENSES Years 2018 thru 2022 - annual increases track with salaries, coupled with contribution rates based on actuarial analysis to achieve full funding. Years 2018-2022 annual increases of 7% All years 2018 thru 2022 - annual increases track with salaries Years 2018 thru 2022 - annual increases range from 1% to 2% 105#106EXHIBIT A (CONTINUED) MULTI-YEAR PROJECTIONS REVENUES and CONDENSED APPROPRIATIONS FISCAL YEARS 2016 THRU 2022 FY 2016 ADOPTED BUDGET FY 2016 ESTIMATED FY 2017 FY 2018 PROPOSED BUDGET PROJECTION FY 2019 PROJECTION REVENUES LOCAL PROPERTY TAXES LOCAL INCOME TAXES OTHER LOCAL TAXES $ 276,694,557 $282,143,318 $ $ 192,924,600 $ 198,985,673 $ $ 18,165,900 $ 20,251,122 $ FY 2021 PROJECTION FY 2022 PROJECTION $ 352,301,578 $263,969,069 290,568,514 $ 302,273,127 $ 314,298,086 $ 326,644,270 205,212,335 $ 215,810,901 $ 226,956,849 $ 238,678,450 $ 251,005,435 19,263,552 $ 19,114,225 $ 20,437,053 $ 20,651,921 $ 21,670,846 $ 22,095,268 FY 2020 PROJECTION $339,312,111 LICENSES AND PERMITS $ 3,436,600 $ 3,847,022 $ FEDERAL GRANTS $ 1,082,599 $ 1,075,711 $ STATE GRANTS $ 3,078,369 $ 2,967,125 $ CHARGES FOR SERVICES $ 8,788,693 $ 10,331,479 $ FINES AND FORFEITURES $ 52,400 $ INVESTMENT EARNINGS $ 300,000 $ MISCELLANEOUS $ 3,795,722 $ OPERATING REVENUES 508,319,440 OTHER FINANCING SOURCES 6,200,000 67,019 $ 300,000 $ 4,524,155 $ 524,492,624 4,000,000 3,887,800 $ 1,139,512 $ 3,078,369 $ 8,988,574 $ 52,400 $ 300,022 $ 2,767,547 $ 535,258,625 3,922,790 $ 1,150,000 $ 3,100,000 $ 9,069,471 $ 52,400 $ 300,000 $ 2,792,455 $ 3,958,095 $ 1,150,000 $ 3,100,000 $ 9,151,096 52,400 $ 300,000 $ 2,817,587 $ $ 3,993,718 $ 1,150,000 $ 3,100,000 $ 9,233,456 $ 52,400 $ 300,000 $ 2,842,945 $ 4,029,662 $ 4,065,929 1,150,000 $ 3,100,000 $ 9,316,557 $ 52,400 $ 300,000 $ 2,868,532 $ 1,150,000 3,100,000 9,400,406 557,585,369 582,221,167 606,647,161 632,805,544 52,400 300,000 2,894,349 659,328,999 BUDGETED USED OF FUND BALANCE 21,315,188 GENERAL FUND REVENUES 535,834,628 528,492,624 25,007,730 560,266,355 23,000,000 580,585,369 21,000,000 603,221,167 20,000,000 626,647,161 18,000,000 650,805,544 15,000,000 674,328,999 Operating Revenues - Percent Increase Total General Fund Revneus - Percent Increase 5.3% 4.6% 4.2% 3.6% 4.4% 3.9% 4.2% 3.9% 4.3% 3.9% 4.2% 3.6% APPROPRIATIONS COUNTY DEPARTMENTS 194,213,968 BOARD OF EDUCATION 250,1 10,403 186,805,193 250,1 10,403 206,873,329 258,282,797 FREDERICK COMMUNITY COLLEGE 15,160,897 15,160,897 15,851,025 210,251,899 217,457,816 270,082,184 281,345,659 16,575,163 221,114,778 290,122,312 230,333,314 239,990,157 300,306,420 310,683,347 17,266,412 17,805,042 18,430,049 19,066,889 FREDERICK COUNTY LIBRARY 10,197,281 10,197,281 10,541,428 11,023,002 11,482,704 11,840,910 12,256,560 12,680,078 OTHER INDEPENDENT AGENCIES 4,356,189 4,268,310 4,657,641 4,699,560 4,741,856 4,784,533 4,827,593 4,871,042 MUNICIPAL TAX REBATE 4,172,701 4,172,701 4,232,919 4,271,015 4,309,454 4,348,239 4,387,374 4,426,860 DEBT SERVICE 40,397,223 40,397,548 42,573,124 42,525,028 46,796,756 49,636,467 49,556,871 47,072,648 RESERVE FOR LITIGATION 2,000,000 2,000,000 TRANSFER TO CAPITAL PROJECTS FUND 11,739,708 12,539,708 13,055,192 14,479,639 15,729,257 17,236,253 17,545,606 18,294,208 TRANSFER TO THIRD PARTY 3,069,520 819,520 TRANSFER TO OTHER FUNDS 201,738 510,166 4,198,900 4,100,000 4,000,000 4,000,000 4,000,000 4,000,000 PERMANENT PUBLIC IMPROVEMENTS 215,000 TOTAL APPROPRIATIONS 535,834,628 526,981,727 560,266,355 578,007,491 603,129,914 620,888,533 641,643,786 661,085,230 SURPLUS/(DEFICIT) - ANNUAL $ $ 1,510,897 $ $ 2,577,878 $ 91,252 $ 5,758,628 $ 9,161,758 $ 13,243,769 106#107EXHIBIT B RESIDENTIAL REASSESSMENT AREAS City of Frederick Area 3 Area 2 Area 1 SDAT January 2006 Area 1 Area 2 Area 3 Assessment Area 1 will be reassessed for January 1, 2016 Assessment Area 2 will be reassessed for January 1, 2017 Assessment Area 3 will be reassessed for January 1, 2018 107#108EXHIBIT C BOND RATING ENHANCEMENT RESERVE 1-8-401 1-8-402 1-8-403 Establishment and purposes Reserve treatment in annual report Designation of fund balance 1-8-404 Build up of reserve 1-8-405 Expenditure and restoration of reserve 1-8-401 ESTABLISHMENT AND PURPOSES (A) There is a bond rating enhancement reserve. (B) The purposes of the bond rating enhancement reserve are: (I) To enhance, preserve and safeguard the bond rating of Frederick County. (2) To protect the financial integrity of Frederick County. (3) To designate fund balance for this bond rating enhancement reserve that is not to be expended absent extreme circumstances. (Ord. 03-14-337, 9-25-2003; Ord. 09-13-517, 5-19-2009) 1-8-403 DESIGNATION OF FUND BALANCE The Board of County Commissioners may designate fund balance to be placed into the bond rating enhancement reserve. (Ord. 03-14-337, 9-25-2003) 1-8-404 BUILD UP OF RESERVE (A) It is the intent of the Board of County Commissioners that the bond rating enhancement reserve shall be at an amount no less than 3% of the general fund expenditures and transfers to the Board of Education, the Frederick Community College, and the Frederick County public libraries for the prior fiscal year. 108#109EXHIBIT D DEBT AFFORDABILITY MODEL (USED FOR PREPARING THE FY 2017-2022 CAPITAL IMPROVEMENT PROGRAM) ASSUMPTIONS Population Growth Variable 1.00 to 1.20% General Fund Revenue Growth Rate Variable 3.20 to 4.00% Assessed Value Growth Rate Variable 2.25 to 4.00% Amortization of Debt Interest Rate on New Debt General Fund Real Property Tax Rate 20 Years 5.0% $1.060 109#110EXHIBIT D (CONTINUED) DEBT AFFORDABILITY MODEL Standards (no change from the prior year): General Fund Debt Service/General Fund Revenue General Fund Supported Debt/Assessed Value 8.60% 1.56% General Fund Supported Debt/General Fund Revenue Total Debt Service/General Fund Revenue 82.60% 17.20% 110#111EXHIBIT D (CONTINUED) DEBT AFFORDABILITY MODEL FY2017 (FY2015 DATA) Frederick Standard Actuals Peer Group Average General Fund Debt Service/ General Fund Revenue 8.6% 7.28% 8.56% General Fund Debt/ Assessed Value 1.56% 1.14% 1.52% General Fund Debt/ General Fund Revenue 82.6% 58.82% 73.51% Total Debt Service/ General Fund Revenue 17.20% 14.76% N/A Debt per Capita N/A $1,227 Note: The peer group financials have been reviewed and adjusted to reflect similar/comparable data to Frederick County $1,802 III#112EXHIBIT E COUNTY FUND BALANCE POLICY 2-7-1 Tax levy 2-7-2 Reserved 2-7-3 Taxes may be paid in installments 2-7-3.1 Reserved 2-7-4 Contingency fund 2-7-5 Revenues to be used for certain appropriations 2-7-6 Expending certain revenues received subsequent to adoption of budget 2-7-7 2-7-8 Capital budget 2-7-9 2-7-10 2-7-11 Borrowing by county prohibited; exceptions Penalties for willful breach of duties and the like by county commissioners or board of estimates Bond rating enhancement reserve established Appropriation increases 2-7-1 (a) (2)...the county commissioners shall maintain a committed general fund balance. The amount shall be 5 percent of the general fund expenditures and transfers to the Board of Education and the Frederick Community College for the prior fiscal year. Any amount that exceeds 5 percent of the general fund expenditures and transfers to the Board of Education and the Frederick Community College for the prior fiscal year shall be included as funds available for appropriation in the current fiscal year.#113EXHIBIT E DEBT POLICY FOR FREDERICK COUNTY MARYLAND I. Introduction II. A. Debt policy is the combined practices of Frederick County (also referred to as the "County") with respect to long-term debt management. Debt policies are written guidelines and restrictions that affect the amount and type of debt issued by Frederick County. B. This debt policy is to be used in conjunction with the operating and capital budgets, the Capital Improvement Program (CIP) and other fiscal policies. C. Adherence to debt policies signals to the rating agencies and the capital markets that Frederick County is well managed and will meet its obligations in a timely manner. Following this debt policy will enhance the quality of debt related decisions by imposing order and discipline and by promoting consistency and continuity in decision making. Adherence to this debt policy will help to ensure that Frederick County maintains a sound financial position and credit quality is protected. This debt policy demonstrates the County's commitment to long-term financial planning and will be positively regarded by the municipal market when reviewing Frederick County's credit quality. D. Frederick County's debt policy is intended to apply to most forms of long-term obligations including General Obligation Debt, capital leases, State revolving loan funds, conduit debt, and interfund borrowings. Vested leave and health care benefits, while they fit the definition of long term debt, are not intended to be covered by this policy. Qualifying Uses of Debt/Prohibitions on the Use of Debt Much of the CIP is expected to be funded with debt. Capital assets usually have a long useful life and will serve future, as well as current, taxpayers. It would be inequitable and an unreasonable fiscal burden to make current taxpayers pay for many projects out of current tax revenues. Accordingly, debt issues are advisable, necessary and equitable. A. Debt issued for projects should have a term equal to or less than the useful life of the asset financed. B. Prior to considering debt as a source of funding capital projects, the County shall determine if other potential revenue sources, such as pay-as-you-go (Paygo), intergovernmental aid or private contributions are available. C. The County may share funding with municipalities in their projects if it is clear that the County will receive the benefit of these projects. D. The County will consider issuing debt to improve leased property only if the County has a non-cancellable lease on the property that exceeds the economic life of the asset. E. The County will only issue debt to construct or acquire public facilities for which it expects to sustain future annual operational and maintenance costs. F. The County has no intent to issue long-term debt to reduce the unfunded liability of the Pension Trust. 1#114G. The County has no intent to issue long-term debt to reduce the unfunded liability of the Other Post Employment Benefits Trust. H. Long-term debt may not be used to finance ongoing and recurring operational expenditures and expenses. III. Types of Debt Instruments A. General Obligation Debt I. General Obligation Bonds - General Obligation ("G.O.") Bonds are the most common form of debt instrument for Frederick County. These are generally tax- exempt and are backed by the full faith and credit of Frederick County. General Obligation Bonds are issued to finance the purchase and construction of infrastructure and facilities for a wide variety of functions such as transportation, public schools, community college, public safety, roads and highways, bridges and other programs. Frederick County issues General Obligation Bonds pursuant to chapter laws adopted from time to time by the Maryland General Assembly at the request of the County ("Chapter Law Authorization"). Pursuant to Chapter 2-13- 13 et seq. of the Frederick County Code of Ordinances (the "Code"), the County is authorized to issue General Obligation Bonds for the purpose of providing funds for the design, construction, establishment, purchase or condemnation of water, sewage, drainage and solid waste systems in Frederick County ("Water and Sewer Act"). 2. Bond Anticipation Notes (BANs) - These are generally short term in nature and are issued as interim financing for a variety of financial reasons. On occasion BANS may be issued in one or more smaller amounts before a single larger size G.O. issue is executed. Proceeds of future G.O. Bond issues would be used to pay off the BANs. State law permits the issuance of BANs by Frederick County. 3. Agricultural Land Preservation Installment Purchase Agreements (IPAs) - These are general obligation debt instruments to fund purchases of property development rights and are backed by the full faith and credit of Frederick County. This is the same authority the County requests for its G. O. Bond issues. 4. State of Maryland Revolving Loan Programs – The loan programs the County regularly participates in are those offered by the Maryland Department of the Environment. Interest rates are generally lower than those for which the County qualifies on its own merit in the open market. On occasion, loans may be for no interest. On some loans, the State assesses fees to supplement the low interest rates. 5. The recently enacted American Recovery and Reinvestment Act ("ARRA") provides a number of taxable and tax-exempt financing options, some with a limited duration. Frederick County will review appropriate ARRA options and utilize them where such an issuance would benefit the County. B. Other Forms of Debt 1. The County may issue Tax Increment Financing (TIF) Bonds to fund capital assets located in certain development districts established in connection with the TIF. The taxes levied on the increase in the assessable base of the properties affected are pledged to finance the debt issued to complete the capital assets. The County is not responsible for the debt service in the event that TIF revenues are not 2#115IV. sufficient to pay debt service. TIF debt does not count against the legal debt limits and Debt Affordability guidelines. The County has a TIF policy to govern the establishment of the development districts, the application for the TIF debt proceeds and the issuance of the TIF debt. 2. The County may authorize Community Development Authorities (CDA) to fund public infrastructure in specified geographical areas. Special taxes levied on the benefitted properties fund this special obligation debt. Beyond the levy and collection of specific taxes, the County is not responsible for the debt service in the event of default. This debt does not count against the legal debt limits and Debt Affordability guidelines. 3. Revenue Bonds a. Revenue Bonds are secured by the pledge of particular revenues to their repayment. The revenues pledged may be those of a Special Revenue or Enterprise fund, or they may be derived from revenues received from or in connection with a particular project, all or part of which is financed from the proceeds of revenue bonds. b. Revenue Bonds are generally tax-exempt and structured to be self-supporting. Because they are self-supporting they are excluded from Debt Affordability calculations. C. Revenue-based debt generally carries a higher interest rate but allows a direct relationship between the cost of a project and the users who benefit from it. d. Under the Water and Sewer Act, the County may issue Revenue Bonds. The County needs separate bond authority to issue other Revenue Bonds. e. The County may issue economic development Revenue Bonds in its name for the benefit of certain private organizations that qualify for such participation. The conduit organizations assume all responsibility for repayment of the debt, for monitoring the use of the debt in accordance with Internal Revenue Service guidelines and for all post-issuance disclosures. This debt does not count against the legal debt limits and Debt Affordability guidelines and the County is not responsible for the debt service in the event of default. 4. Interfund Loans - Loans may be extended between funds of the County. In such an event, interest will accrue to the borrowing fund at least equal to the short- term interest rate the County receives on its idle proceeds. This rate shall be calculated monthly for any funds outstanding during that month. No interfund loans will be executed without a plan of repayment to the affected fund. C. Other Financing Mechanisms 1. Capital Leases - this form of financing is used regularly for the purchase of substantial equipment that may not qualify to be financed with General Obligation Bonds. The term of this form of financing is typically five to ten years. The equipment being purchased is sometimes the collateral for the leases. Capital Lease agreements are subject to annual appropriation. Debt Limits A. In accordance with Chapter 2-7-8 of the Code, the Board of County Commissioners (BOCC) cannot create any obligation or liability on the part of or on the credit of the County which shall be a floating debt, nor issue any certificate of indebtedness, nor shall 3#116V. VI. the BOCC borrow any money whatsoever for any purpose without special legislative authority to make the loan. However, special exceptions have been created in the Code for certain limited short term loans. The County periodically requests Chapter Law Authorization from the General Assembly, which specifies a not to exceed principal amount of bonds that can be issued pursuant to that Chapter Law. Additionally, local laws are enacted from time to time by the General Assembly providing debt authority to Frederick County. B. Debt issued pursuant to the Water and Sewer Act is limited to six percent of the assessed valuation of taxable real property. C. The County has a Debt Affordability model that it uses to determine the amount of new debt the County can afford to support. The model is driven by revenue and growth assumptions with established standards controlling the amount of new debt to be issued over the life of the CIP. The County uses the following guidelines in deciding how much additional General Obligation Debt may be issued in the six-year CIP period: • There are limiting standards relative to: 1. The ratio of General Fund Debt Service to General Fund Revenue; 2. The ratio of General Fund Debt to Assessed Value of Taxable Real Property. 3. The ratio of General Fund Debt to General Fund Revenue; 4. The ratio of Total Debt Service to General Fund Revenue; 5. Other standards as may be appropriate. Debt Structure: Term A. Bonds are typically issued for 20-25 years. Chapter Law Authorizations typically require that bonds mature not later than thirty (30) years from the date of issuance while the Water and Sewer Act permits a maturity not to exceed forty (40) years from the date of issuance. The IPA program typically limits terms to between ten (10) and twenty (20) years. When bond market conditions warrant, or when a specific project would have a shorter useful life, then different repayment terms may be used. B. Capital Leases generally have a term of five to ten years. C. County debt issues may be structured for repayment with near level debt service payments or level principal payments. Current County practice has been to utilize the near-level debt service payment method to facilitate the budget process. D. The size of the debt issue should be such that economies of scale are reached with regard to issuance costs, including but not limited to Bond Counsel, Financial Advisor, and rating fees. Method of Sale A. Competitive sales should generally be used for General Obligation Debt issues. Negotiated sales may be used if the BOCC, in conjunction with the Director of Finance and the County's Financial Advisor, determines that such a sale method is in the best interests of the County. B. Electronic bidding systems should be encouraged in order to enhance participation. 4#117VII. Debt Management Policies VIII. A. The County will at all times manage its debt and sustain its strong financial position, including healthy reserves, to seek and maintain the highest credit rating possible. B. Federal income tax law applicable to the issuance of tax-exempt debt generally limits the portion of the proceeds of such debt that may be loaned to or otherwise used by a private trade or business (a "private business use") to 10% of such proceeds (the "bad money allowance"). On occasion the County may have reason and justification to take advantage of the bad money allowance and include funding for a private business use within a tax- exempt debt issue. The tax certificate executed by the County in connection with each issuance of tax-exempt debt should discuss any expected uses of proceeds for private business uses. C. The County may seek credit enhancements such as letters of credit or insurance when necessary for marketing purposes or cost effectiveness. D. The County will consider utilizing debt service reserve funds for certain debt issuances if advantageous to the County for marketing or cost mitigation purposes. E. The County will monitor compliance with bond covenants as applicable. Bond covenants are generally related to Revenue Bonds or special obligation debt. F. Promptly after the passage of each Capital Budget, the Director of Finance will file a "Declaration of Official Intent to Reimburse." This provides the County with the right to reimburse itself from future General Obligation Debt issues for capital costs advanced prior to the issuance of the debt. These reimbursement rights are subject to rules promulgated by the Internal Revenue Service. Financing Mechanisms A. The County pledges its full faith and credit to repayment of all General Obligation Debt. Accordingly, paying principal and interest on General Obligation Debt is the absolute first claim on County resources. B. In addition to its general income and property tax resources the County may allocate portions of certain revenue sources to the repayment of its General Obligation Debt, to include: 1. Recordation taxes 2. Impact fees 3. Bond Premium 4. Hotel Rental taxes 5. Enterprise Fund fees C. The County will consider various financing techniques, including fixed or variable interest rate debt, to minimize the interest costs over the life of the issue. These techniques will be evaluated based on market conditions and risk. D. Use of Derivatives/Swaps I. A derivative is an instrument that receives its value from or gets its value from another instrument, asset, index or event. While not specifically excluded, derivatives must be carefully used because the volatility of interest rates can greatly affect the value of derivatives. County policy is to refrain from using derivatives. Any expanded use of derivatives would require a revision to the County's current policy. This policy is not intended to preclude the investment by the County in 5#118IX. X. U.S. Treasury STRIPS (Separate Trading in Registered Interest and Principal Securities) and, in particular, the County may invest in STRIPS in connection with its agricultural land preservation program. 2. A swap is an interest rate exchange transaction. While not specifically excluded, County policy is to refrain from entering into swap agreements. Refunding A. The County, in conjunction with its Financial Advisor, will monitor its outstanding debt in light of current debt market conditions and will refund any qualifying debt when sufficient savings can be realized. B. Article 31, Section 24 of the Annotated Code of Maryland, as amended (the "Refunding Act"), authorizes the County to issue bonds for the purpose of refunding any of its outstanding bonds. Refunding bonds may be issued for the public purpose of (a) realizing savings to the County in the aggregate cost of debt service on either a direct comparison or present value basis, or (b) a debt restructuring that (i) in the aggregate effects such a reduction in the cost of debt service or (ii) is determined by the County to be in the best interest of the County, to be consistent with the County's long-term financial plan and to realize a financial objective of the County including improving the relationship of debt service to a source of payment such as taxes, assessments or other charges. At least one of these public purposes shall be realized when a refunding occurs. Advance refundings and current refundings should typically show net cost savings of at least three percent, inclusive of all costs of issuance. C. In the event of advance refundings, policy dictates that State and Local Government Series (SLGS) securities must be used for advance refundings escrow accounts. Post-Issuance Administration/Arbitrage A. In connection with each issuance of debt the interest on which will qualify for exemption from federal income tax, the County will execute such certificate(s) and file such information returns as Bond Counsel advises are necessary and appropriate to establish qualification for such exemption. B. Subsequent to the issuance of any issue of tax-exempt debt the County will comply with such requirements for the maintenance of the tax-exempt status of the interest payable on the debt (including without limitation restrictions related to arbitrage yield restrictions, rebate of arbitrage profits, and private business use) as are contained in the certificate(s) referenced in paragraph X.A or as may otherwise become applicable to the debt subsequent to its issuance. C. The County intends that its tax-exempt debt be issued in such amounts and at such times relative to the expected expenditure of proceeds as to reasonably expect, as of the time of issuance, that the expenditure of proceeds will qualify for an exception to the arbitrage rebate and yield restriction rules of federal income tax law. D. The investment of unspent bond proceeds shall be in accordance with the County's Investment Policy, the tax certificate executed by the County in connection with the issuance of such debt, and the trust indenture or other documents, if any, entered into by the County in connection with the issuance of the debt and imposing restrictions on such investment. 6#119XI. XII. E. All trust accounts will be closed timely when no longer needed. F. The County has adopted its Statement of Procedures and Responsibilities with Respect to Post-Issuance Tax Compliance for Tax-Exempt Financing to assure compliance with the requirements of federal income as are applicable to its tax-exempt debt following issuance. Continuing Disclosure A. The County will comply with all disclosure requirements established by the Securities and Exchange Commission. B. The Continuing Disclosure Agreements can be found as an appendix to every Official Statement. Service Providers A. The BOCC is responsible for establishing a selection and contracting process for professional services relative to the issuance of debt. The criteria used in selecting service providers include quality of services, cost of services, experience in their respective expertise, and ability and willingness to comply with the County's terms and conditions. The main service providers include: I. Financial Advisor a. Relative to non-debt issuance, the Financial Advisor may be asked for advice related to investment activity and policy, rate setting processes and other financial issues. b. The Financial Advisor has a role in every form of County debt issuance except conduit debt, interfund loans and State Revolving Loans. c. The Director of Finance shall advise the BOCC relative to the solicitation for and selection of and duration of employment for the Financial Advisor. d. The Financial Advisor firm will not bid on nor underwrite any County debt issues. e. The County shall not limit itself to having a single Financial Advisor or firm under contract at any one time. 2. Bond Counsel a. As part of its responsibility to manage outside attorney contracts, the County Attorney will work closely with the Director of Finance and advise the BOCC relative to the duties and responsibilities and the solicitation and selection of and duration of employment for Bond Counsel. C. b. Bond Counsel will have a role in all debt issues except interfund loans. In addition to debt related issues, Bond Counsel may be employed to handle issues related to tax matters and Internal Revenue Service procedural issues. d. The County shall not limit itself to having a single Bond Counsel firm under contract at any one time. XIII. Credit Ratings A. The County's ability to borrow at the lowest cost of funds depends upon its credit standing as assessed by major credit rating agencies. 7#120XIV. B. In order to enhance the County's position in the debt market, the Director of Finance will be responsible for determining whether ratings will be requested. C. The Director of Finance is responsible for maintaining relationships with these agencies and keeping them informed relative to material economic events that occur in the County between debt issuances (between official rating events). The BOCC, Bond Counsel and the County's Financial Advisor may be consulted when determining whether an economic event is of significant proportion to qualify for such a notification. D. The County shall maintain adequate systems of internal control, comply with applicable laws and regulations, and conduct its financial affairs in such a way as to sustain a strong financial position in order to maintain the highest credit rating level possible. Administration/Responsibilities A. The BOCC is responsible for implementing and revising these policies as appropriate. B. The debt policies are to be reviewed formally by the BOCC at least every five (5) years. C. The Director of Finance is responsible for the administration of these policies. D. The Director of Finance, based upon advice and counsel from the Financial Advisor and Bond Counsel, may deviate from the guidelines established in this Debt Policy on a case by case basis, as may be warranted in particular circumstances, with the advance approval of the BOCC. 8#121EXHIBIT G WATER/SEWER RATES ORDINANCE/RESERVES Recent Action Regarding Water and Sewer User Rates and Fees In May 20, 2008, the County was anticipating an increase in revenue from the sale of water to the City of Frederick under Potomac River Water Supply Agreement (PRWSA), which was executed in 2006. Therefore BOCC in adopting Resolution 08-14, only established an annual escalation factor for the water and sewer capacity fees and changed the equivalent meter size basis for calculating Ready-to-Serve (RTS) charges for non- residential customers. No changes were made to the RTS charge or water and sewer user commodity rates. In May 2010, the BOCC adopted Resolution 10-12, which amended the water and sewer regulations, which among other things, increased or established miscellaneous fees for certain special services the water and sewer enterprise provided such as special meter readings, tank truck filling, septic waste disposal, and fire flow testing. No changes were made to the RTS charge or water and sewer user commodity rates at this time as the County was anticipating increased revenues from a new water supply agreement with the Army Garrison at Fort Detrick and increased revenue from the City of Frederick when the 8 MGD water capacity would be made available to the City later that year. In September 2010, the County, City of Frederick and the Army Garrison at Fort Detrick entered into a water supply agreement, which, unlike the PRWSA between the County and City, included the requirement to purchase a minimum of I MGD of water. This resulted in annual revenue from the Fort Detrick water supply agreement of $207,900. In December 2010, the County completed the Potomac River water system improvements, which made 8 MGD of capacity available to the City of Frederick. This increased the City's water availability charges from $365,000 to $1,500,000 per year. Although the enterprise's revenues increased by adding these two large water customers, the lack of actual usage by the City resulted in lower than anticipated revenue from Commodity fees. As a result the Water and Sewer enterprise continued to rely upon its operating reserves to supplement annual expenditures. Recognizing that the use of reserves could not continue indefinitely, in 2011, the current BOCC directed the DUSWM to complete a comprehensive update of the existing water and sewer rate model and recommend rate increases to address the problem. After considering the recommended rate increase options, the BOCC adopted Ordinance 12-29-624, which established specific rate increases over a five year period of time (FY 2014 - FY 2018). The new rates, which took effect July 1, 2013, are designed to eliminate the use of the enterprise reserves and to restore reserves used between 2014 and 2018, during the rate increase implementation period. Under the adopted ordinance, water commodity rates increase approximately 14.5% each year from FY 2014 to FY 2018. Sewer usage rates increased approximately 1% in 2014 and remain level thereafter. The adopted rates also included a 69% increase in the water and sewer RTS (Availability) charges, which was also spread out over the five year rate increase implementation period. Based on MFSG financial model the projected cumulative effect of the rate increase over the five year period of implementation will completely eliminate the use of reserves for sewer system expenditures by FY 2016, and water system expenditures by FY 2017. By FY 2018 reserves used during the five year rate increase implementation period are projected to be restored.#122ORDINANCE NO. 12-29-624 THE EFFECTIVE DATE OF THIS ORDINANCE IS DECEMBER 4, 2012 Re: Revisions to the Water and Sewer System User Rates Charged by the Division of Utilities and Solid Waste Management BACKGROUND In late 1999, the Frederick County Board of County Commissioners (BOCC) approved a comprehensive analysis of the County's costs to provide water and sewer services and to develop appropriate water and sewer rates to adequately recover the costs associated with the provision of these services. After several workshops and public hearings the BOCC adopted Ordinance No. 01-05-279, which became effective in May 2001. The rates were set for a five (5) year period, with small incremental increases each year through FY 2006. In 2008, the rate model was reviewed for rate adequacy. At that time, the BOCC determined that a water rate increase could be deferred, based on the notification to the City of Frederick that the 1.5 MGD (max day capacity) referenced in the Potomac River Water Supply Agreement (PRWSA), was now available. It was anticipated that the City would begin purchasing water under the PRWSA and that increased revenue may offset the need to increase user rates to the existing customers. Again in 2010, the Division of Utilities and Solid Waste Management (DUSWM) indicated that a rate increase may be necessary unless the City of Frederick started purchasing water from the County. As of 2012, the sale of water to the City has not occurred and the availability fees charged to the City for their water supply fall short of covering the County's proportionate costs to operate and maintain the much expanded water system infrastructure. Operating losses over the last four years totaled $15.6 million, which was covered by the Water and Sewer reserves. Growth in the customer base, good management of the utility and the use of reserves allowed the DUSWM to delay additional rate increases. However, utilizing the water and sewer enterprise reserves to fund these essential services is not sustainable. The County's current water and sewer rate structure, which relies on an availability fee, or Ready to Serve (RTS) charge, and water and sewer volume charges, has been in place for more than decade and have not been increased since 2006. Water and sewer volume charges provide most of the Water and Sewer Enterprise Fund's revenues. In 2012, Municipal and Financial Services Group (MFSG) was hired to review and update the County's water and sewer rate model. MFSG completed the review and determined that the sewer rates currently in place require an overall 13.6% increase to ensure adequate revenues are generated to cover the sewerage system costs. MFSG also determined that, without committed sale of water to the City, the County will need an overall increase in water volume rates of approximately 59.2% in FY 2014 to discontinue the use of operating reserves that subsidize the annual operation of the Water and Sewer Enterprise Fund. On October 25, 2012, the DUSWM presented the above-referenced information and options to the BOCC for water and sewer rate changes. The BOCC voted to move forward to public hearing with a rate change option that revises water and sewer rates gradually over a 5-year period. Therefore, pursuant to the authority contained in Chapter 2-13 of the Code of Public Local Laws of Frederick County, the Board of County Commissioners ("Board") is adopting revised water and sewer system user rates (service charges) to bring them in line with the costs of providing water and sewer services to the users.#123A public hearing was held on the proposed service charge and fee changes on Tuesday, December 4, 2012, at which time public comments were received. COUNTY NOW, THEREFORE, BE IT ENACTED AND ORDAINED BY THE BOARD OF COMMISSIONERS OF FREDERICK COUNTY, MARYLAND, that the service charges (user rates) set forth on Exhibit A for FY 2014 shall take effect on July 1, 2013, and shall remain in effect until June 30, 2014. AND BE IT FURTHER ENACTED AND ORDAINED, that the rates shown on Exhibit A for FY 2015 through and including FY 2018, shall take effect on July 1, 2014, July 1, 2015, July 1, 2016 and July 1, 2017, respectively, after the BOCC's annual reconsideration of these rates, unless otherwise modified by resolution of the BOCC. AND BE IT FURTHER ENACTED AND ORDAINED, that this Ordinance shall take effect on December 4, 2012. th The undersigned hereby certifies that this Ordinance was approved and adopted on the 4" day of December, 2012. Jari J. Depics Lori L. Depies, CPA BOARD OF COUNTY COMMISSIONERS OF FREDERICK COUNTY, MARYLAND Blaine R. Up yz Blaine R. Young, President County Manager#124EXHIBIT H FREDERICK COUNTY GOVERNMENT STRATEGIC PLAN 2014 - 2018 FREDERICK COUNTY 1748 MARY Jan H. Gardner, County Executive FREDERICK COUNTY GOVERNMENT 12 EAST CHURCH STREET, FREDERICK MD 21701#125Summary of Strategic Plan Vision: • • Frederick County is one of the best places to live, work and raise a family in the United States as a result of exceptional schools, safe communities, a vibrant economy, and a high quality of life. Frederick County government ensures a high quality of life to our residents through our parks, libraries, senior centers, transit, and community services. Frederick County can grow while preserving our historic and agricultural heritage, our cultural amenities, and our strong sense of belonging and community. Five Priority Areas: Open, Transparent, and Fiscally Responsible Government through: Ethics Reform Responsive and Quality Constituent Services Fiscally Responsible Decisions Improved Technology Education - Exceptional Schools Where All Students Achieve by: Funding Above State Mandated Maintenance of Effort Timely Building of Schools Improving Technology Accessible Community Libraries Continuum of Higher Education with local colleges and CREST Jobs Economic Development Initiatives such as: Business and Industry Cabinet Downtown Innovation Center and Incubator Rebranding Our Story Regional Collaboration Workforce Services Community Needs - Ensuring Quality of Life, Safety and Well Being through: Public Safety Infrastructure - fire, rescue, law enforcement and emergency planning Livable Frederick - Land Use Planning and Permitting Workforce and Affordable Housing Health and Wellness Initiatives Family and Children Quality Services Parks and Recreational Services and Facilities Solid Waste Initiatives Adequate Roads, Bridges, and other Infrastructure Transportation Service Enhancements Seniors - Preparing for Growing Population by: Redefining Aging and Senior Services Expanding Nutritional Programs Planning for Senior Housing Needs Increasing Aging in Place Services 1#126Vision • Frederick County is one of the best places to live, work and raise a family in the United States as a result of exceptional schools, safe communities, a vibrant economy, and a high quality of life. • Frederick County government ensures a high quality of life to our residents through our parks, libraries, senior centers, transit, and community services. • Frederick County can grow while preserving our historic and agricultural heritage, our cultural amenities, and our strong sense of belonging and community. 2#127Priority # 1 Open, Transparent, and Fiscally Responsible Government Goals: 1. Implementation of Ethics Reform utilizing citizen based Ethics Task Force Recommendations. Incorporation of task force recommendations into new Ethics Ordinance. Due Date: 2015 Ethics Task Force Review (complete) 2016 Ethics Ordinance Enacted (complete) Independent Ethics Commission - in process 2. Responsive and Quality Constituent Services will be obtained through the use of online constituent services, customer service training, timely staff responses, and thorough follow through on issues. Due Date: 2015 - Implemented Website Application Tracking Constituent services (complete) Ongoing 3. Fiscally Responsible Decisions during annual budget development. Strategic Investment in priority areas. No tax rate increases planned. Implement Six Year Operating Budget. Due Date: 2016 - Six year operating budget implemented (complete) 4. Improved Technology through the new Enterprise Resource Program for management of county resources and financial data. Enhanced business practices with new technology. Due Date: 2016-2017 - Implementation of Enterprise Resource Program (In progress) Priority # 2 Education - Exceptional Schools Where All Students Achieve Goals: 1. Commit to Fund above state mandated Maintenance of Effort to support Frederick County Public Schools strategic goals. Fifty percent of new revenue in the county budget will be used to support education efforts including Frederick Public Schools, Frederick Community College, CREST, Libraries, and early education services. 3#128Due Date: 2016 - Funded $4M above MOE to support FCPS Strategic Goal #2 to retain and attract high quality school staff (complete) 2017 - Funded $10.5 above MOE to support FCPS Strategic Goals #1 to provide high quality instruction to every student and Goal #2 to retain and recruit high quality staff (complete) 2017- Achieved 51% goal. Supported Community College to keep tuition affordable and enhance campus security; Supported early childhood intervention (complete) 2. Prioritize new school construction where the highest needs exist. Target 90% System wide capacity. Time growth with ability to provide school seats. Due Date: 2017 Adopt Capital Budget and CIP plan to build schools to match school system priorities. (complete) 2017 - Secure alternative funding solution for two elementary schools (complete) 2017 System wide school capacity at 91% approaching targeted goal - 3. Invest in implementation of school system's Technology Now Plan to provide Chromebooks in Middle Schools (Phase I), High Schools (Phase II), and Elementary Schools (Phase III). Due Date: 2016 - Phase I completed. All Middle Schools have Chromebooks (complete) 2017 - Allocated one-time funding for school technology Phase II (in progress) 2018 Complete Phase II and Begin Phase III 4. Support Innovative Concepts for School and Workforce Learning specifically the "Super School" LYNX School at Frederick High School. Due Date: 2016 - State Legislature passes LYNX legislation to allow flexibility to meet educational goals (complete) 2017 - Incorporate LYNX design in new Frederick High School (complete) 5. Ensure communities throughout the county have accessible libraries. Schedule and fund construction of new branch libraries per Frederick County Public Libraries Construction Plan Due Date: 2017 Restore regional library hours (complete) - 2017 - Funding and Construction of new Walkersville branch library (complete) 2018-2019- Allocate funding for new Myersville branch library 6. Support the Continuum of Higher Education with local colleges in Frederick County and invest in start-up and continuation of CREST - Center for Research and Education in Science and Technology. Due Date: 2015 - Pass state legislation to create Frederick County's first higher education center (complete) 2016 Obtain state funding to start-up CREST (complete) 2016-2017 - Start-up CREST with initial course offerings (in progress) 4#129Priority # 3 Jobs - Economic Development Initiatives Goals: 1. Establish a Business and Industry Cabinet to provide timely advice and direction to the CE and Economic Development Office. Advise on trends, environmental factors and other business issues to guide the development of business and economic success in Frederick County. Due Date: 2015 - Elevate Office of Economic Development to County Executive Office (complete) 2015 - Business and Industry Cabinet appointed (complete) 2016/2017 - Cabinet to provide input on three goals - Regional Branding; Workforce Needs Analysis; Business Innovation Center/Incubator (ongoing) 2. Establish a Downtown Business Innovation Center and Incubator. Utilize vacant downtown county owned building. Innovation Center will include economic development partners including the Chamber of Commerce, Ft. Detrick Tech Transfer, a new IT incubator under the FITCI umbrella, and others. Due Date: 2015 Identify plan, partners, and location for new business innovation center (complete) 2015 - Relocate Office of Economic Development to 118 location (complete) 2016 - Partner with Downtown Partnership to secure funding for design consultant (complete) 2016 - Develop agreements with local partners (in progress) Ft. Detrick Tech Transfer Office PIA (complete) 2016 Hire new incubator director/FITCI (complete) - 2016/2017 - Renovate and Remodel 118 location for the innovation center (in progress) 3. Initiative Rebranding Effort to message/promote Frederick County as a unique, vibrant jobs center Due Date: 2016 Develop RFP for rebranding; Hire consultant; Engage in rebranding process 2017 Implement branding 4. Engage in Regional Collaboration with other counties, businesses, and economic entities to broaden the economic appeal of Frederick County. Due Date: 2016 - Participate in I-270 Regional Branding (in progress) 2016 - Participate in MedImmune/AstraZeneca regional branding (in progress) 5. Incorporate the Workforce Services department into the Office of Economic Development (OED) to ensure strong collaboration of business services and to meet workforce needs. Provide quality labor force support and development for current and new businesses. Due Date: 2015 - Workforce Services Department incorporated into the Office of Economic Development (Complete) 2016/2017 - Co-locate Workforce Services at Frederick Community College Advanced Technology Center to take advantage of synergies. Funding (complete); Construction (In progress) 5#130Priority # 4 Community Needs - Ensuring Quality of Life, Safety, and Well Being Goals: 1. Develop four year plan for Public Safety Infrastructure. Increase capacity of fire and rescue, enforcement and emergency planning divisions. Ensure that first response personnel have adequate and quality resources to fulfill public safety community needs. Due Date: 2015 - Develop Fire and Rescue staffing plan; Stand-up ALS training program; Design/Plan for Back-up 9-1-1 Center (complete) 2016 - Integrate Firefighters/Medics; Additional staffing in both Fire and Rescue and Sheriff's Office; Accept grant award for new radios for communication; 9-1-1 back-up center under construction; Plans for replacement burn building; Lease/Purchase new fire equipment (Complete/In Progress) law 2017 - Fund additional positions in Fire and Rescue and Law Enforcement; Adopt and fund new pay scale for law enforcement and corrections; 9-1-1 back-up center to open (Complete) 2018 Continue to implement staffing plan - 2. Engage in innovative community development and land use planning. Implement Livable Frederick including a broad public participation process to establish a sustainable and resilient future. Due Date: 2015 - Livable Frederick Steering Committee appointed Plan Kicked- Off (Complete) 2016 - Initiate Livable Frederick Community Survey and Outreach Plan (Complete) Trends and Issues Report (In Progress) 2017 – Planning Commission and County Council to review Livable Frederick Plan 3. Initiate Community Partnership Grants program to restore human service non-profit partnership to leverage improved outcomes for people. Due Date: 2015 - Developed program and awarded first round of grants (Complete) 2016/2017 Enhance program to meet targeted goals (In Progress) 4. Create Workforce and Affordable Housing. Utilize county-owned building to provide workforce housing in partnership with local affordable housing developer. Expand and retain affordable housing in and around municipalities. Revise MPDU Ordinance. Due Date: 2015 - Identify county-owned building (520 N. Market St.) for workforce housing (Complete) 2015 - Secure sales agreement with Interfaith Housing Alliance for Workforce Housing project (Complete) 2015 - Moderately Priced Dwelling Unit Ordinance revised through legislation to make program more flexible (Complete) 2016 - Tax Credits secured for 520 Project/ Construction and renovation to begin (In Progress) 2016 - Housing Study in progress to assess needs, gaps, and best way to leverage dollars (In Progress) 6#1315. Support Health and Wellness Initiatives that address quality of life and critical health needs. Stand up local Heroin Consortium to enhance collaboration of first responders, treatment providers, businesses, non-profit providers, and community based grass roots initiatives. Develop innovative prevention and intervention endeavors such as the Recovery Coach Academy and partner with local providers such as the hospital and law enforcement. Due Date: 2015 Established Local Heroin Consortium (Complete) - 2015 - Expanded Recovery Coach Academy and placed staff in Emergency Room at Frederick Memorial Hospital. Exceeded goal to connect 40% of clients with services within six months (Complete) 2016/2017 - Transition Health Department to oversight agency for all substance abuse programs (In Progress) 6. Enhance and support Family and Children Quality Services provided by departments through restoration of critical capacity for addressing non-education needs. Due Date: 2016 - Expand Support for Infant and Toddlers Program (Complete) 7. Ensure adequate and quality Parks and Recreational Services and Facilities. Implement Park and Recreation Capital Program Due Date: 2016 Construct Phase II Utica Park (In Progress) 2017 - Construct Phase I of Othello Park; Construction Point of Rocks Community Park (Funded; Construction to begin in FY 2017) 8. Engage in new Solid Waste What's Next? Initiative. Utilize facilitated public outreach process to develop and evaluate sustainable solutions for solid waste. Due Date: 2015 - Establish Solid Waste What's Next? Initiative - Steering committee and Hired Consultant (Complete) 2015/2016 Conduct consultant-facilitated public outreach process (Complete) 2016 - Phase I Report summarizing recommendations from Public Process (Complete) 2016/2017 - Phase II Report to provide in depth analysis of feasibility, cost, and environmental impacts of recommendation from Phase I (In Progress) 9. Provide and enhance county transportation network of roads, highways and bridges. Restore capacity and capital resources including a timelier life cycle schedule for all equipment resources. Due Date: 2015 - Develop long-term Fleet Replacement Plan (Complete/Implementation in Progress) 2016/Ongoing - Implement Capital Improvement Plan utilizing Pavement Management System to upgrade roads and other infrastructure to avoid costly replacement. Phased in funding. 10. Engage in Transportation Service Enhancements for public Transit System. Replace aged vehicles and invest in new service enhancements such as taxi vouchers, vehicle locator software and sustainable resources such as electric buses. Due Date: 2015 2016 Implement Taxi Voucher Program (Complete) 2016 - Implement Vehicle Locator software application (Complete) 2016 - Acquire and Put in Service 5 New Electric Buses (Complete) 2017 - Replace aging vehicles (In Progress) 7#132Priority #5 Seniors - Preparing for Growing Population Goals: 1. Redefine the county funded aging and senior services provided by the local department of aging. Use public and private resources to reach out to seniors and their communities to determine needs. Reorganize personnel and facility resources to be better prepared for the growing senior population. 2015 Establish Seniors First Steering Committee (Complete) 2015/2016 - Develop plan for reorganizing senior services (In Progress) 2016/2017 Implementation of plan 2. Expand Nutritional Programs to seniors through enhanced support for Meals on Wheels so now senior goes hungry. Increase capacity of staff to recruit and retain volunteers to support programs. Due Date: 2015/2016 - Allocate additional funding to meet all demand for Meals on Wheels (Complete) 3. Include planning for Senior Housing Needs in Livable Frederick initiative. Due Date: 2016 - Housing Needs Study (In Progress) 4. Increase Aging in Place Services through increased support of local services such as Senior Care, Maryland Access Point, Adult Evaluation and Review Services (AERS). Due Date: 2016 Add volunteer coordinator and information and assistance positions (Complete) 2016 Add case manager to support AERS (Complete) 2017 - Allocate funding to supplement grants for direct service (Complete) 8