OFFICIAL STATEMENT DATED MARCH 11, 2014
NEW ISSUE – BOOK ENTRY ONLY
Fitch: ‘AAA’
Moody’s Investors Service: ‘Aaa’
Standard & Poor’s: ‘AAA’
(See “Ratings”)
$40,000,000
HARFORD COUNTY, MARYLAND
GENERAL OBLIGATION BONDS
Consisting of
$40,000,000
CONSOLIDATED PUBLIC IMPROVEMENT BONDS, SERIES 2014
Dated:
Due:
Interest Payable:
Denomination:
Form:
First Interest Payment Due:
Optional Redemption:
Registrar/Paying Agent:
Date of delivery
March 15, as shown on the inside front cover
September 15 and March 15
Integral multiples of $5,000
Registered, book entry only through the facility of Depository Trust Company
September 15, 2014 (Interest from date of delivery)
The Series 2014 Bonds which mature before March 15, 2025 are not subject to
redemption prior to maturity. The Series 2014 Bonds which mature on or after
March 15, 2025 are subject to redemption at any time, at par, beginning March
15, 2024. See “THE BONDS – Redemption Provisions”, herein.
The Bonds are general obligations of Harford County, Maryland (the “County”)
for the payment of which the full faith and credit and unlimited taxing power are
pledged (see “THE BONDS-Security for the Bonds” herein).
See the information contained herein under the caption “THE BONDS – Tax
Matters”.
Manufacturers and Traders Trust Company, Baltimore, MD/Buffalo, NY
Book Entry Only Form:
The Depository Trust Company, New York, NY
Security:
Tax Matters:
Notice: This Official Statement has been prepared by Harford County, Maryland (the “County”) to provide information
on the Bonds and the County. Selected information is presented on this cover page in summary form for the convenience
of the user. To make an informed decision regarding the Bonds and the County, a prospective investor should read this
Official Statement in its entirety.
Conditions Affecting Issuance: The Bonds are offered when and if issued subject to, among other conditions, the delivery
of the Bonds and the opinions of Royston, Mueller, McLean & Reid, LLP, Bond Counsel and Miles & Stockbridge P.C.,
Special Tax Counsel. It is expected that the Bonds will be available for delivery in New York, New York through the
facilities of the Depository Trust Company, and certain closing documents will be available for delivery in Baltimore,
Maryland on or about March 27, 2014 or at such time or place as shall be mutually agreed upon by the County and the
successful bidder for the Bonds.
$40,000,000.00
Consolidated Public Improvement Bonds, Series 2014
MATURIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES OR YIELDS AND CUSIPS*
Maturing
March 15
Principal
Amount*
Interest
Rate*
Price or
Yield*
CUSIP
Maturing
March 15
Principal
Amount*
Interest
Rate*
Price or
Yield*
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
$ 1,895,000
1,900,000
1,910,000
1,915,000
1,930,000
1,940,000
1,950,000
1,960,000
1,975,000
1,985,000
5.0000
5.0000
5.0000
5.0000
5.0000
2.0000
5.0000
5.0000
5.0000
3.0000
0.1600
0.2900
0.5100
0.8200
1.1400
1.5400
1.9500
2.2500
2.4500
2.5900
412487BM1
412487BN9
412487BP4
412487BQ2
412487BR0
412487BS8
412487BT6
412487BU3
412487BV1
412487BW9
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
$ 2,000,000
2,010,000
2,025,000
2,040,000
2,055,000
2,070,000
2,090,000
2,105,000
2,125,000
2,120,000
3.0000
3.0000
3.0000
3.0000
4.0000
4.0000
4.0000
4.0000
4.0000
4.0000
2.7700**
3.0000
3.1200
3.2300
3.3900**
3.4900**
3.5800**
3.6600**
3.7300**
3.7800**
CUSIP
412487BX7
412487BY5
412487BZ2
412487CA6
412487CB4
412487CC2
412487CD0
412487CE8
412487CF5
412487CG3
____________________________
* The interest rates and prices or yields shown above are those resulting from the successful bid for the Bonds on March 11, 2014, and were
furnished by the successful bidder. Other information concerning the terms of the reoffering of the Bonds, if any, should be obtained from the
successful bidder and not from the County. (See “MISCELLANEOUS – Sale at Competitive Bidding” herein.)
** Priced to par call.
HARFORD COUNTY, MARYLAND
CERTAIN ELECTED OFFICIALS
COUNTY EXECUTIVE
David R. Craig
COUNTY COUNCIL
William K. “Billy” Boniface, President
Dion F. Guthrie
Joseph M. Woods
James V. McMahan, Jr.
Chad R. Shrodes
Richard C. Slutzky
Mary Ann Lisanti
_____________________________________
CERTAIN APPOINTED OFFICIALS
Director of Administration – Mary F. Chance
Treasurer – Kathryn L. Hewitt
County Attorney – Robert S. McCord
_____________________________________
FINANCIAL ADVISOR
BOND COUNSEL
PUBLIC ADVISORY CONSULTANTS, INC.
Owings Mills, Maryland
ROYSTON, MUELLER, MCLEAN &
REID, LLP
Baltimore, Maryland
AUDITOR
SPECIAL TAX COUNSEL
S B & COMPANY, LLC
Certified Public Accountants
Baltimore, Maryland
MILES & STOCKBRIDGE P.C.
Baltimore, Maryland
BOND REGISTRAR / PAYING AGENT
MANUFACTURERS AND TRADERS TRUST COMPANY
Baltimore, Maryland
Buffalo, New York
THIS PAGE INTENTIONALLY LEFT BLANK
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds
by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. No dealer, broker, salesman
or other person has been authorized by Harford County, Maryland (the “County” or Harford County”) to give any information or to make any
representation, other than those contained in this Official Statement, with respect to the County or the Bonds. If given or made, such other
information or representation must not be relied upon as having been authorized by the County.
THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A CONTRACT OR AGREEMENT BETWEEN THE COUNTY AND THE
PURCHASERS OR HOLDERS OF ANY OF THE BONDS.
Table of Contents
Debt Burden Analysis ........................................................... 35
I. The Bonds
General ............................................................................................. 1
Book Entry Only System .................................................................. 1
Ownership of Bonds ......................................................................... 2
Notices and Consents ....................................................................... 2
Payments on and Redemption of Bonds ........................................... 3
Discontinuance of Book-Entry Only System .................................... 4
Authorization.................................................................................... 4
Application of Proceeds ................................................................... 5
Sources and Uses of Funds ............................................................... 6
Bid Parameters ................................................................................. 6
Security for the Bonds ...................................................................... 7
Redemption Provisions..................................................................... 7
Ratings ............................................................................................. 8
Tax Matters ...................................................................................... 8
Tax Enforcement ............................................................................ 11
State and Local Taxes..................................................................... 11
IV.Government and Infrastructure
Location ................................................................................ 36
Form of Government ............................................................. 36
Executive, Legislative and Administrative Officials ............. 36
County Executive ........................................................... 36
County Council .............................................................. 37
President .................................................................... 37
Council Members ...................................................... 38
Administrative............................................................... 41
Organization.......................................................................... 45
Responsibilities, Services and Infrastructure ......................... 45
County Employees ......................................................... 45
Education .............................................................................. 46
Higher Education .................................................................. 48
Public Safety ......................................................................... 49
Emergency Services .............................................................. 49
Planning and Zoning ............................................................. 50
Office of Economic Development ......................................... 51
Inspections, Licenses and Permits ......................................... 53
Public Works......................................................................... 53
Highways and Water Resources Division ..................... 53
Water and Sewer Division ............................................. 54
Division of Environmental Services ............................. 56
Division of Construction Management ......................... 57
Parks and Recreation ............................................................. 57
Community Services ............................................................. 58
Procurement .......................................................................... 58
Housing ................................................................................. 59
Library .................................................................................. 59
Other Infrastructure ............................................................... 59
Cultural, Historical and Tourist Attractions.................... 59
Hospital and Medical Care ............................................. 60
Utilities........................................................................... 61
Electric and Gas ....................................................... 61
Telephone ................................................................. 61
Transportation ................................................................ 61
Railroad .................................................................... 61
Highways ................................................................. 61
Truck Service ........................................................... 61
Bus Service .............................................................. 62
Water Transportation................................................ 62
Air Service ............................................................... 62
II. Financial Information
Basis of Accounting and Reporting Methods ................................. 12
Annual Budget Process................................................................... 13
General Fund .................................................................................. 14
Tax Administration......................................................................... 17
Sources of Tax Revenues .......................................................... 17
Local Property Taxes ................................................................. 17
Property Tax Assessments ..................................................... 17
Assessed Value, Tax Rates and Tax Levies ........................... 17
Tax Collection ....................................................................... 19
Principal Taxpayers ............................................................... 20
Income Tax Data ................................................................... 21
Realty Transfers .................................................................... 21
Other Local Taxes ................................................................. 21
State Shared Taxes ......................................................................... 21
State and Federal Grant Assistance ................................................ 22
Operating Grants ....................................................................... 22
Capital Construction Grants ...................................................... 22
Employee Benefits ......................................................................... 22
Retirement and Pension Programs .................................................. 22
Employees’ Retirement and Pension System ............................. 22
Sheriff’s Office Pension System ................................................ 23
Volunteer Firemen’s Pension System ........................................ 24
Other Post Employment Benefits .............................................. 24
Liquidity and Cash Management .................................................... 25
Investment Management ................................................................ 25
Risk Management ........................................................................... 26
V. Demography and Economy
Population ............................................................................. 63
Migration .............................................................................. 63
Age Distribution.................................................................... 64
Employment .......................................................................... 64
Income .................................................................................. 66
Personal Income ............................................................. 66
Per Capita Income .......................................................... 66
Median Income .............................................................. 67
Sales and Use Taxes .............................................................. 67
Housing ................................................................................. 68
Construction Activity ............................................................ 69
Residential Construction Activity .................................. 71
Non-residential Construction Activity............................ 71
Economic Development ............................................................. 71
Development Projects ........................................................... 75
III.Capital Requirements and Debt Matters
Debt Capacity ................................................................................ 27
Debt Statement............................................................................... 28
Current Outstanding Obligations ................................................... 29
General Obligation Debt ......................................................... 29
Schedule of Long-Term General Funded General
Obligation Debt .................................................................. 29
Notes Payable ................................................................................. 30
Lease Purchase Agreements........................................................... 30
Self-Liquidating Debt .................................................................... 30
Agricultural Land Preservation Debt ................................. 31
Schedule of Self-Liquidating Debt.................................... 32
Capital Requirements ...................................................................... 32
Business Model ................................................................. 32
Capital Projects Model ..................................................... 33
i
New Retail ............................................................................. 76
Regional and National Marketing Efforts .............................. 76
Expanding Economic Development Programs....................... 77
Enterprise Zones ............................................................. 77
Financing Programs ........................................................ 78
Industrial Revenue Bonds ............................................... 79
Future of Aberdeen Proving Ground .......................................... 80
Federal Contracting in Harford County ...................................... 82
Chesapeake Science and Security Corridor/Office of
Economic Development......................................................... 83
Army Alliance, Inc. ............................................................... 84
Harford’s Entrepreneurs Edge……………………………… 84
Technology Development........................................................... 85
Harford Business Innovation Center (HBIC) ......................... 85
The GROUNDFLOOR at Harford......................................... 85
University Center................................................................... 85
Higher Education Programming ............................................ 86
University Research Park Committee .................................... 86
Medical Expansion ..................................................................... 87
Upper Chesapeake Hospital Medical Campus ....................... 87
Lorien Health Systems........................................................... 87
MedStar Health...................................................................... 87
Route 40 Corridor Redevelopment/Chesapeake Science
And Security Corridor (CSSC) .............................................. 88
Government and Technology Enterprise (GATE) ................. 88
Corporate Office Properties Trust (COPT) ............................ 88
Water’s Edge Corporate Campus........................................... 88
Aberdeen Corporate Park ...................................................... 89
Fieldside Commons ............................................................... 89
Waterfront Development for Havre de Grace ............................. 89
International Activities .......................................................... 89
Multi-Modal .......................................................................... 90
Roads/Traffic Intersections .................................................... 90
Harford Metro Area Network (HMAN)...................................... 90
Tourism ...................................................................................... 91
Largest Employers ...................................................................... 92
Agricultural Economic Development ......................................... 93
Agricultural Initiative ............................................................ 93
VI. Miscellaneous
Approval of Legal Proceedings .................................................. 94
Litigation .................................................................................... 94
Independent Auditors ................................................................. 94
Financial Advisor ....................................................................... 94
Sale at Competitive Bidding ....................................................... 94
Continuing Disclosure ................................................................ 95
Certificate of County Officials ................................................... 95
Miscellaneous ............................................................................. 96
Authorization of Official Statement............................................ 96
Appendix A – Audited Financial Statements, Harford County,
Maryland for the Fiscal Year ended June 30, 2013 ...................A-1
Appendix B – Form of Approving Opinion of Bond Counsel,
Consolidated Public Improvement Bonds, Series 2014 ............. B-1
Appendix C – Form of Approving Opinion of Special Tax Counsel,
Consolidated Public Improvement Bonds, Series 2014 ............. C-1
Appendix D – Form of Notice of Sale, Consolidated
Public Improvement Bonds, Series 20114 ................................D-1
Appendix E – Form of Continuing Disclosure Certificate ............ E-1
ii
THE BONDS
I.
The Bonds
General
The Bonds offered by this Official Statement consist of $40,000,000 Harford County, Maryland
Consolidated Public Improvement Bonds, Series 2014 (the “Bonds”). Interest on the Bonds will accrue
from the date of delivery, and will be payable September 15, 2014, and every six months thereafter on
March 15 and September 15 until maturity or redemption. Interest on the Bonds is paid to the owners in
whose name the Bonds are registered on the registration books maintained by the Bond Registrar and
Paying Agent (hereinafter defined) as of the close of business on the Record Date. The Record Date shall
be the tenth day of the month immediately preceding the month in which the interest payment occurs.
Payment of the principal of and interest on the Bonds shall be in such currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts. Principal on
the Bonds will be payable March 15, 2015, and thereafter on March 15, until early redemption or
maturity. The Bonds will be issued in fully registered form in denominations of $5,000 each or any
integral multiple thereof. The Bonds initially will be maintained under a book-entry only system;
individual purchasers (“Beneficial Owners”) shall have no right to receive physical possession of the
Bonds, and any payment of the principal or redemption price of and interest on the Bonds will be made as
described under “THE BONDS – Book-Entry Only System”. Manufacturers and Traders Trust Company
has been appointed paying agent and registrar (the “Paying Agent” and the “Bond Registrar”) for the
Bonds.
Book Entry Only System
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the
Bonds. The Bonds will be issued as fully-registered securities in the name of Cede & Co. (DTC’s
partnership nominee) or such other name as may be requested by an authorized representative of DTC.
One fully-registered Bond will be issued for each maturity of the Bonds in the aggregate principal amount
of such maturity and will be deposited with DTC, or with the Bond Registrar and Paying Agent, as
custodian for DTC under the “fast” delivery program.
DTC is a limited-purpose trust company organized under the New York Banking Law, a
“banking organization” within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial
Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5 million issues
of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments
(from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also
facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in
deposited securities through electronic computerized book-entry transfers and pledges between Direct
Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct
Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations.
DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”).
DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and nonU.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or
maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect
Participants”). DTC has Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants
HARFORD COUNTY, MARYLAND
1
THE BONDS
are on file with the Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com and www.dtc.org.
Ownership of Bonds
Purchases of Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual
purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect
Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on
behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is
discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are
registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration
in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the
identity of the Direct Participants to whose accounts the Bonds are credited, which may or may not be the
Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of
their holdings on behalf of their customers.
Bonds may be transferrable only upon the bond register kept at the designated corporate trust
office of the Bond Registrar and Paying Agent, by the registered owner, in person, or by his or her
attorney duly authorized in writing upon surrender of the Bond, together with a written instrument of
transfer satisfactory to the Bond Registrar and Paying Agent duly executed by the registered owner or
duly authorized attorney. Thereupon, within a reasonable time, the County shall issue in the name of the
transferee a new registered Bond or Bonds, of any of the authorized denominations, in the aggregate
principal amount equal to the principal amount of the Bond surrendered or the unredeemed portion
thereof, and maturing on the same date and earning interest at the same rate. The Bond Registrar and
Paying Agent may require payment by the owner of the Bond requesting the change or transfer, of any
tax, fee or other governmental charge, shipping charges and insurance that may be required to be paid
with respect to such exchange or transfer but otherwise no charge shall be made to such owner for such
exchange or transfer. The new Bond or Bonds shall be delivered to the transferee only after due
authentication thereof by an authorized office of the Bond Registrar and Paying Agent. The County and
the Bond Registrar and Paying Agent shall not be required to issue, transfer or exchange any Bond after
the mailing or giving of notice calling such Bond or any portion thereof for redemption.
Notices and Consents
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain
steps to augment the transmission to them of notices of significant events with respect to the bonds, such
as defaults and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds
may wish to ascertain that the nominee holding the bonds for their benefit has agreed to obtain and
2
HARFORD COUNTY, MARYLAND
THE BONDS
transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their
names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all the Bonds are being redeemed, unless
otherwise elected, DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in the Bonds to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under
its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to
whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Payments on and Redemption of Bonds
Principal of, premium (if any), interest payments and redemption proceeds on the Bonds will be
made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC.
DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding
detail information from the County or the Bond Registrar and Paying Agent, on payable date in
accordance with their respective holdings shown on DTC’s records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in “street name”, and will be the
responsibility of such Participant and not of DTC, the Bond Registrar and Paying Agent, or the County,
subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of
principal, of any premium (if any), interest and redemption proceeds, will be made to Cede & Co. (or
such other nominee as may be requested by an authorized representative of DTC) is the responsibility of
the County or the Bond Registrar and Paying Agent. The credit or disbursement of such payments to
Direct Participants will be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect Participants.
So long as a nominee of DTC is the registered owner of the Bonds, references herein to the
owners of Bonds or Bond owners shall mean DTC and shall not mean the Beneficial Owners of the
Bonds. The County will recognize DTC or its nominee as the owner of all of the Bonds for all purposes,
including the payment of the principal and interest on the Bonds, as well as the giving of notices and any
consent or direction required or permitted to be given to or on behalf of the owners of the Bonds.
THE COUNTY WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE
DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OF THE
BONDS WITH RESPECT TO (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC
OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT, (2) THE PAYMENT OF ANY
AMOUNT DUE TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL
OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON ANY
BONDS, OR (3) THE DELIVERY BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT
OF ANY NOTICE TO ANY BENEFICIAL OWNER AS IS REQUIRED OR PERMITTED UNDER
THE TERMS OF THE BONDS TO BE GIVEN TO BOND OWNERS, OR (4) ANY OTHER ACTION
TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO., AS BOND HOLDER, INCLUDING THE
EFFECTIVENESS OF ANY ACTION TAKEN PURSUANT TO AN OMNIBUS PROXY.
THE COUNTY CANNOT AND WILL NOT GIVE ANY ASSURANCES THAT DIRECT
PARTICIPANTS, INDIRECT PARTICIPANTS OR OTHER NOMINEES OF THE BENEFICIAL
HARFORD COUNTY, MARYLAND
3
THE BONDS
OWNERS OF THE BONDS WILL GIVE NOTICES RECEIVED BY THEM, OR HAVING
RECEIVED PAYMENTS, WILL MAKE PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
PAYMENTS ON THE BONDS TO THE BENEFICIAL OWNERS OF THE BONDS, THAT THEY
WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER DESCRIBED
IN THIS OFFICIAL STATEMENT. AS DTC IS TREATED AS THE OWNER OF THE BONDS FOR
SUBSTANTIALLY ALL PURPOSES, AND AS THE IDENTITY OF BENEFICIAL OWNERS IS
UNKNOWN TO THE COUNTY, BENEFICIAL OWNERS SHOULD MAKE APPROPRIATE
ARRANGEMENTS WITH THEIR BROKER OR DEALER REGARDING DISTRIBUTION OF
INFORMATION REGARDING THE BONDS THAT MAY BE TRANSMITTED BY OR THROUGH
DTC.
Discontinuance of Book-Entry Only System
DTC may discontinue providing its services as securities depository with respect to the Bonds at
any time by giving reasonable notice to the County or the Bond Registrar and Paying Agent. Under such
circumstances, in the event that a successor depository is not obtained, the Bonds are required to be
printed and delivered.
The County may decide to discontinue use of the system of book-entry transfers through DTC (or
a successor securities depository). In that event, the Bonds will be printed and delivered by DTC to the
Bond Registrar and Paying Agent and such Bonds will be exchanged for Bonds registered in the names of
the Participants or the Beneficial Owners, identified to the Bond Registrar and Paying Agent. In such
event, the Bonds shall be subject to transfer and exchange as described in “Ownership of Bonds”, above.
The information in this section concerning DTC and DTC’s book-entry system has been obtained
from sources that the County believes to be reliable, but the County takes no responsibility for the
accuracy thereof.
Authorization
The Bonds will be issued by the County pursuant to Bill No. 07-16, As Amended, enacted by the
County Council of the County on July 10, 2007, effective September 17, 2007; Bill No. 08-35, As
Amended, enacted by the County Council on June 17, 2008, effective August 25, 2008, as revised by Bill
No. 11-25 enacted by the County Council on July 12, 2011, effective September 19, 2011, as revised by
Bill No. 12-39 enacted by the County Council on November 20, 2012, effective January 28, 2013; Bill
No. 09-26 enacted by the County Council on November 10, 2009, effective January 12, 2010; Bill No.
10-18 enacted by the County Council on June 15, 2010, effective August 16, 2010 and as revised by Bill
11-25 enacted by the County Council on July 12, 2011, effective September 19, 2011; Bill No. 11-28,
enacted by the County Council on July 12, 2011, effective September 19, 2011; Bill No. 12-37, As
Amended, enacted by the County Council on November 20, 2012, effective January 28, 2013; and Bill
No. 13-20, As Amended, enacted by the County Council on June 11, 2013, effective August 12, 2013 and
its Water and Sewer Bonds of 2014 (the “Water and Sewer Bonds of 2014”) authorized by Bill No. 07-17,
enacted by the County Council on July 10, 2007, effective September 17, 2007; Bill No. 08-36, enacted
by the County Council on June 10, 2008, effective August 18, 2008; Bill No. 11-27, enacted by the
County Council on July 12, 2011, effective September 19, 2011; and Bill No. 12-36, As Amended,
enacted by the County Council on November 20, 2012, effective January 28, 2013 (the “General
Obligation Bond authorization bills and the Water and Sewer Bond authorization bills collectively
referred to as the “Authorization Legislation”) for the purpose of financing certain capital projects
identified therein and certain transfers of expenditures for school building construction between major
categories or of unexpended project balances approved by the County Council pursuant to Section 5-
4
HARFORD COUNTY, MARYLAND
THE BONDS
107(b)(2) of the Education Article of the Annotated Code of Maryland (2006 Rep. Vol. 2013
supplement).
Application of Proceeds
The proceeds of the Bonds will be used to fund certain capital improvements for General County
Projects and Water and Sewer Projects described in the Authorization Legislation. The County has
authorized the payment of costs of issuing the Bonds from proceeds of the Bonds; however, the County
has reserved the right to pay such issuance costs, in whole or in part, from other available County funds.
The projects being financed, in part, with a portion of the proceeds from the sale of the Bonds
consist of:
Project
Number
Project
General County Projects
A124131
HMAN
B004114
Joppatowne Elementary Modernization
B064125
Red Pump Elementary School
B084131
Campus Hills Elementary School
B124128
William Paca Elementary School A/C
B124129
Youth Benefit Elementary School Primary Bldg. A/C
B124130
Jarrettsville Elementary School A/C
B124132
Magnolia Middle School HVAC
B144110
Fallston High School HVAC
B144115
Norrisville Elementary School HVAC
B144116
North Harford Elementary School HVAC
C124113
New Allied Health and Nursing Building
E074110
New Emergency Operations Complex
E094110
700 MHz Wireless Radio System Equipment
H044509
Robinhood Road/US 40 Titan Terrace
H074501
Macton Road Bridge #145
H984519
Moores Mill Road
H994505
Wheel Road/Laurel Bush Fairway
P054115
Churchville Complex Development
P064137
Schucks Road Regional Complex
P084117
Athletic Field Improvements
Total General County Projects
HARFORD COUNTY, MARYLAND
Amount
$
$
5,000,000
2,051
249,780
625
451,526
143,734
1,547,478
363,483
488,265
62,020
551,272
1,445,789
11,342,503
5,500,000
633,322
28,124
1,550,000
1,320,285
500,000
1,000,000
1,000,000
33,180,257
5
THE BONDS
Project
Project
Number
Water and Sewer Projects
Church Creek Pumping Station Replacement
S016613
Lower Bynum Run
S036634
Bynum Run Parallel Phase 6 & 7
S096703
Green Ridge Pumping Station Replacement
S106713
Sod Run WWTP-Sludge Pad Cover
S126725
Oaklyn Manor/Joppa Area Sewer Relief
S137016
W066671
Abingdon Water Treatment Plant Expansion
Chlorine Replacement Program Water Treatment Plant
W066672
City of Baltimore - Deer Creek Pumping Station
W126718
City of Baltimore Raw Water Supply
W126719
Total Water and Sewer Projects
Amount
$
$
300,000
405,000
105,000
835,000
155,878
200,000
3,216,382
47,483
840,000
715,000
6,819,743
Sources and Uses of Funds
The following table outlines the funds the County will utilize with respect to the Bonds:
Sources of Funds*
Par Amount of Bonds
Reoffering Premium
Total Sources
Uses of Funds
Total Underwriter's Discount (0.192%)
Deposit to Project Construction Fund
Deposit to Project Construction Fund and/
or Debt Service
Total Uses
$
$
$
$
40,000,000.00
2,861,288.75
42,861,288.75
76,678.24
40,000,000.00
2,784,610.51
42,861,288.75
*Issuance costs, including legal, financial advisory and printing costs and miscellaneous expenses will be
paid separately by the County.
Bid Parameters
No bid of less than 100% of par, no oral bid and no bid for less than all of the Bonds described in
the Notice of Sale, will be considered. The Bonds are expected to be awarded at approximately 3:00 p.m.
prevailing Eastern Time on March 11, 2014. All proposals shall remain firm until the time of award. For
the Bonds maturing in the year 2025 and thereafter, no proposal shall specify an interest rate that is lower
than the interest rate for the immediately preceding maturity of such issue (i.e., interest rates must ascend
from a base year of 2024).
6
HARFORD COUNTY, MARYLAND
THE BONDS
Security for the Bonds
The full faith and credit and unlimited taxing power of the County are irrevocably pledged to the
levy and collection of such tax or taxes as and when the imposition of such taxes may become necessary
in order to provide funds for the payment of principal and interest due on the Bonds.
Section 524(b) of the Charter provides that:
“If at any time the Council shall have failed to appropriate and to make available
sufficient funds to provide for the timely payment of the interest and principal then due
upon all County indebtedness, it shall be the duty of the Treasurer to pay, or to make
available for payment to the holders of such indebtedness from the first revenues
thereafter received applicable to the general funds of the County, a sum equal to such
interest and principal.”
Pursuant to Section 12-113(a) of the Tax-Property Article of the Annotated Code of Maryland
(2007 Replacement Volume, 2012 Supplement), a portion of the proceeds from recordation tax at a rate of
$4.40 per $1,000 of consideration or amount secured collected on written instruments conveying real
property or creating a security interest in real or personal property is to be used to pay debt service each
fiscal year on school bonds issued on the full faith and credit of the County. After payment of such debt
service in the then current fiscal year, proceeds from recordation tax at a rate of $4.40 per $1,000 of
consideration or amount secured shall be credited for the purpose of financing new school construction,
capital and major improvements to existing school facilities and portable classrooms. Bill No. 93-3,
enacted by the County Council of Harford County, established a County transfer tax effective July 1,
1993 and provides that one-half of the transfer tax collected on written instruments conveying title to, or a
leasehold interest in real property is to be used to pay school construction costs. The amount of
$3,860,234 from the Bond proceeds will be used for school projects and debt service thereon will be paid
from such recordation tax and transfer tax; however, to the extent the recordation tax and transfer tax are
insufficient to pay the principal of, premium (if any) and interest on Bonds allocated to school projects,
the full faith and credit and unlimited taxing power of the County are pledged to the levy and collection of
taxes to provide funds for the payment of the principal of, premium (if any) and interest on the portion of
the Bonds allocated to school projects.
Redemption Provisions
The Bonds that mature before March 15, 2025, are not subject to redemption prior to maturity.
The Bonds that mature on or after March 15, 2025, are subject to redemption beginning March 15, 2024,
at the option of the County, either as a whole, or in part, at any time, in any order of maturity selected by
the County, at par (100% of the principal amount to be redeemed) plus accrued interest thereon to the date
fixed for redemption.
If fewer than all the Bonds of any one maturity are called for redemption, the particular Bonds or
portion of the Bonds to be redeemed from such maturity shall be selected by DTC in accordance with its
normal and customary procedures (so long as the Bonds are in book-entry form) or if the book-entry
system has been discontinued, by lot by the Bond Registrar and Paying Agent or in such manner as the
Bond Registrar and Paying Agent in its sole discretion may determine.
Whenever the Bonds are not held in book-entry form and less than all of a Bond in a
denomination in excess of $5,000 is so redeemed, then, upon the surrender thereof, there shall be issued
without charge to the registered owner thereof the Bonds in any of the authorized denominations as
specified by the registered owner. The amount of the Bonds issued shall be equal to the unredeemed
HARFORD COUNTY, MARYLAND
7
THE BONDS
balance of the principal amount of the Bond surrendered, and the Bonds issued shall bear the same
interest rate and shall mature on the same date as the Bond surrendered.
A notice calling for redemption of any Bonds will be delivered to DTC not earlier than 45 days
nor later than the business day that precedes the thirtieth day prior to the date fixed for redemption (the
“Redemption Date”) and otherwise as provided in the Authorization Legislation. If the book-entry
system has been discontinued for the Bonds, the County shall give a redemption notice to the registered
owners of the Bonds to be redeemed by first class, postage prepaid, at least 30 days prior to the date fixed
for redemption to the addresses of such registered owners appearing on the registration books kept by the
Bond Registrar and Paying Agent; provided however, that the failure to mail the redemption notice to any
registered owner of the Bonds or any defect in the notice so mailed shall not affect the validity of the
redemption proceedings with respect to any other Bond.
From and after the date fixed for redemption, if notice has been duly and properly given and if
funds sufficient for the payment of the redemption price and accrued interest are available on such date,
the Bonds designated for redemption shall cease to bear interest. Upon presentation for redemption and
compliance with the redemption notice, the Bonds to be redeemed shall be paid by the Bond Registrar and
Paying Agent at the redemption price. If they are not paid upon presentation, the Bonds designated for
redemption shall continue to bear interest at the rates stated therein until paid.
Ratings
Fitch, Moody’s Investors Service, Inc. and Standard & Poor’s Rating Services have given the
Bonds the ratings indicated on the cover page of this Official Statement. An explanation of the
significance of any of such ratings may be obtained only from the agency furnishing the rating. The
County furnished to such rating agencies the information contained in a preliminary form of this Official
Statement and other materials and information pertaining to the Bonds and the County. Generally, ratings
agencies base their rating on such materials and information, as well as their own investigations, studies
and assumptions. The ratings given the Bonds may be changed at any time and no assurance can be given
that they will not be revised downward or withdrawn by any such rating agencies if, in the judgment of
any such rating agencies, circumstances should warrant such action. Any such downward revision or
withdrawal of any of such ratings may have an adverse effect on market prices for the Bonds.
Tax Matters
Treasury Circular 230 Disclosures
To ensure compliance with Treasury Circular 230, taxpayers are hereby notified that: (a) any
discussion of U.S. federal tax issues in this Official Statement is not intended or written to be relied upon,
and cannot be relied upon, by taxpayers for the purpose of avoiding penalties that may be imposed on
taxpayers under the Code; (b) such discussion is written in connection with the promotion or marketing of
the transactions of matters addressed herein; and (c) taxpayers should seek advice based on their
particular circumstances from an independent tax advisor. Prospective investors should note that no
rulings have been or will be sought from the Internal Revenue Service (the “Service”) with respect to any
of the federal income tax consequences discussed below, and no assurance can be given that the Service
will not take contrary positions.
In the opinion of Miles & Stockbridge P.C., Special Tax Counsel, assuming continuous
compliance with certain covenants in the Tax Certificate and Compliance Agreement to be executed and
delivered by the County on the date of delivery of the Bonds (the “Tax Certificate”), under existing laws,
regulations, rulings and decisions, interest on the Bonds is excludable from the gross income of the
8
HARFORD COUNTY, MARYLAND
THE BONDS
holders of the Bonds for federal income tax purposes, except as described below. The Tax Certificate
contains covenants and procedures that are designed to meet requirements of the Internal Revenue Code
of 1986, as amended (the “Code”), that are applicable to the Bonds.
Special Tax Counsel is also of the opinion that interest on the Bonds is not a tax preference item
directly subject to the alternative minimum tax on individuals and corporations under the Code and is
included in the “adjusted current earnings” when calculating corporate alternative minimum taxable
income.
Under the Code, the Bonds are subject to certain requirements which must be met subsequent to
the issuance and delivery of the Bonds for interest thereon to be and remain excludable from gross
income for federal income tax purposes. Noncompliance with such requirements would cause interest on
the Bonds to become subject to federal income taxes retroactively to their date of issuance and adversely
affect the price of the Bonds in the secondary market. In order to comply with the requirements of
Section 103 and Section 141 through 150 of the Code as applicable to the Bonds, the County has entered
into the Tax Certificate providing, among other things, that the County will not (a) take any action, (b)
fail to take any action, or (c) make any use of the proceeds of the Bonds, which would cause the interest
on the Bonds to be or become includable in the gross income of the owners of the Bonds for federal
income tax purposes. In particular, the Tax Certificate provides that the County will not make any use of
the proceeds of the Bonds or any moneys, securities or other obligations on deposit to the credit of the
County or otherwise that may be deemed by the Internal Revenue Service to be proceeds of the Bonds
that would cause any of the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code.
In addition, Section 148 of the Code sets forth, as a condition to exclusion of interest from gross
income for federal income tax purposes on governmental obligations, such as the Bonds, certain
restrictions regarding the investment of the “gross proceeds” of such obligations. These “arbitrage”
provisions set forth limitations on the yield of investments acquired with “gross proceeds” on the Bonds,
and also provide for periodic rebate of specified portions of the arbitrage profit derived from such
investments. Failure to comply with such requirements at any time could retroactively affect the
exclusion from gross income for federal income tax purposes of interest on the Bonds.
In the event of noncompliance with the covenants and agreements contained in the Tax
Certificate, available remedies may be limited by applicable provisions of law and, therefore, may not be
adequate to prevent the interest on the Bonds from becoming includible in the gross income of the owners
of such Tax-Exempt Bonds for federal income tax purposes.
Special Tax Counsel and Bond Counsel will assume no responsibility for, and will not monitor,
compliance with the covenants and agreements set forth in the Tax Certificate.
As to questions of fact material to Special Tax Counsel’s opinion, without undertaking to verify
the same by independent investigation, Special Tax Counsel will rely upon the certified proceedings and
other certifications of public officials furnished to Special Tax Counsel and certifications by the officers
and other representatives of the County (including certifications as to the use of the proceeds of the TaxExempt Bonds).
For certain taxpayers, the exclusion from gross income for federal income tax purposes of interest
on the Bonds may be affected by the following:
1) Property and casualty insurance companies are required to reduce the amount of their
deductible underwriting losses by fifteen percent of the amount of interest received or
accrued during the taxable year on certain obligations, including the Bonds, acquired after
HARFORD COUNTY, MARYLAND
9
THE BONDS
August 7, 1986. If the amount of its reduction exceeds the amount otherwise deductible as
losses incurred, such excess may be included in income.
2) Banks and thrift institutions are unable to deduct any portion of the interest cost of purchasing
and carrying certain tax-exempt obligations, including the Bonds, acquired after August 7,
1986.
3) Section 86 of the Code provides that certain recipients of social security benefits may have to
include in gross income a portion of such benefits equal to the lesser of one-half of (a) the
social security benefits received during the taxable year, of (b) the excess of (i) a certain base
amount. For purposes of the calculation under the Code, the modified adjusted income of a
taxpayer includes interest received or accrued by the taxpayer during the taxable year which
is exempt from federal income tax and would include interest on the Bonds.
4) For foreign corporations operating branches in the United States, Section 884 of the Code
imposes a branch-level tax on certain earnings and profits. Interest on tax-exempt
obligations, such as the Bonds, may be included in the determination of such domestic branch
taxable base on which this tax is imposed.
5) If during a taxable year an S corporation has subchapter C earnings and profits at the close of
its taxable year and more than twenty-five percent of the gross receipts of the S corporation
are passive investment income, which includes interest on tax-exempt obligations such as the
Bonds, a certain portion of such passive investment income may be subject to federal income
taxation under Section 1375 of the Code. Holders of the Bonds which are S corporations
should consult their tax advisor as to whether the interest on the Bonds will be taxable under
Section 1375 of the Code.
The above summary of possible indirect federal tax consequences of holding the Bonds may
not be exhaustive. All purchasers of Bonds (or of beneficial interests in any of the Bonds) should
consult their own tax advisors regarding the possible federal income tax consequences of ownership
of the Bonds. Special Tax Counsel has not undertaken to advise in the future whether any events after
the date of issuance of the Bonds may affect the tax exempt status of interest on the Bonds or the tax
consequences of ownership of the Bonds. No assurances can be given that future legislation, or
amendments to the Code, if enacted into law, will not contact provisions which could directly or
indirectly reduce the benefit of exclusion of the interest on the Bonds from gross income for federal
income tax purposes.
Certain of the Bonds may be offered and sold at a discount (“original issue discount”) equal
generally to the difference between their public offering price and principal amount. For federal income
tax purposes, original issue discount on a Bond accrues periodically over the term of the Bond as interest
with the same tax exemption and alternative minimum tax status as regular interest. The accrual of
original issue discount increases the purchaser’s tax basis in the Bond for determining taxable gain or loss
upon disposition (including sale, redemption or payment at maturity). Even though the purchaser’s basis
is reduced, no federal income tax deduction is allowed. Purchasers of Bonds at a discount should consult
their tax advisors regarding the determination and treatment of original issue discount for federal income
tax purposes, and with respect to state and local tax consequences of owning such Bonds.
Certain of the Bonds may be offered and sold at a purchase price over the stated redemption price
of such Bonds at maturity. This excess constitutes premium on such Bonds. For federal income tax
purposes, original issue premium is amortizable periodically over such a Bond’s term through reductions
in the owner’s tax basis for the Bond for determining taxable gain or loss upon disposition (including
10
HARFORD COUNTY, MARYLAND
THE BONDS
sale, redemption or payment at maturity). Purchasers of any Bonds at a premium, whether at the time of
initial issuance or subsequent thereto, should consult their tax advisors with respect to the determination
and treatment of premium for federal income tax purposes, and with respect to state and local tax
consequences of owning such Bonds.
The foregoing is only a general summary of certain provisions of the federal tax laws and does
not purport to be complete or to identify all aspects of federal income taxation that may be relevant to a
particular holder of the Bonds in light of his or her particular circumstances and income tax situation.
Each holder of the Bonds should consult such holder’s tax advisor as to the specific federal income tax
consequences to such holder of the purchase, ownership and disposition of the Bonds. Special Tax
Counsel and Bond Counsel will express no opinion regarding other federal tax consequences arising with
respect to the Bonds.
In accordance with Circular 230, the County and its tax advisors are (or may be) required to
inform you that (i) any advice contained in this Official Statement, including in any proposed form of
opinion of Bond Counsel and Special Tax Counsel, is not intended or written to be used, and may not be
used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer, (ii) any
such advice is written to support the promotion of marketing of the Taxable Bonds and the transactions
described in this Official Statement (or in such opinion or other advice) and (iii) each taxpayer should
seek advice based on the taxpayer’s particular circumstances from its independent tax advisor.
Tax Enforcement
The Internal Revenue Service (the “IRS”) has an on-going program of auditing tax-exempt
obligations to determine whether, in the view of the IRS, interest on such tax-exempt obligations is
includable in the gross income of the owners thereof for federal income tax purposes and. No assurance
can be given as to whether or not the IRS will commence an audit of the Bonds. If an audit is
commenced, under current procedures, the IRS will treat the Issuer as the taxpayer and the Bondholders
may have no right to participate in any such proceeding. The opinion of Special Tax Counsel as to the
excludability from gross income of the interest on the Bonds for federal income tax purposes is not
binding on the IRS or the courts. Neither the Issuer, Bond Counsel, nor Special Tax Counsel is
responsible for paying or reimbursing the costs of any Bondholder with respect to any audit or litigation
relating to the Bonds, including the payment to the IRS of any settlement amount.
State and Local Taxes
In the opinion of Miles & Stockbridge P.C., Special Tax Counsel, the Bonds, their transfer, the
interest payable on them, and any income derived from them, including any profit realized in their sale or
exchange shall be exempt at all times from every kind and nature of taxation by the State of Maryland, by
any of its political subdivisions county, municipal corporations or public agencies of any kind, but no
opinion is expressed as to such exemption from estate or inheritance taxes, or to any other taxes not levied
or assessed directly on the Bonds, the interest thereon, their transfer, or the income therefrom.
Interest on the Bonds may be subject to state or local income taxes in jurisdictions other than the
State of Maryland under applicable state or local tax laws. All purchasers of the Bonds should consult
their own tax advisors with respect to the taxable status of the Bonds in a particular state or local
jurisdiction other than the State of Maryland.
HARFORD COUNTY, MARYLAND
11
FINANCIAL INFORMATION
II.
Financial Information
Basis of Accounting and Reporting Methods
Harford County employs a fund accounting system to provide budgetary control and to record
actual transactions. Accounting records for government-wide and fiduciary funds are maintained on an
accrual basis as required by Generally Accepted Accounting Principles (“GAAP”). Revenues are
recorded when earned and expenses are recorded when a liability is incurred.
Accounting records for governmental fund financial statements are maintained using the modified
accrual basis of accounting. Revenues are recognized when they become susceptible to accrual, that is,
when they become both measurable and available. Expenditures are recorded when a liability is incurred,
as under accrual accounting. The County maintains seven individual governmental funds, the General,
Highways, Grant, Agricultural Land Preservation, Capital Project, Parks and Recreation, StormWater
Management and Beechtree Tax Incremental Financing (TIF) funds.
The General Fund is the chief operating fund of County government. Special Revenue Funds are
used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for
specified purposes. Capital Projects Funds are used to account for financial resources to be used for the
acquisition or construction of major capital facilities (other than those financed by proprietary funds).
Debt Service fund is used to account for the accumulation of resources for, and the payment of, special
obligation debt principal and interest associated with the Beechtree TIF. The County property tax on
property within the incorporated municipalities is lower than the County rate on property not within the
incorporated municipalities, as the incorporated municipalities are each responsible for road maintenance
within their respective jurisdiction.
The Water and Sewer Fund is reported on the full accrual basis of accounting: revenues are
recognized when earned and expenses are recorded when liabilities are incurred.
The Government Finance Officers Association of the United States and Canada (“GFOA”) has
awarded a Certificate of Achievement for Excellence in Financial Reporting to Harford County for its
comprehensive annual financial report (“CAFR”) for fiscal year 2012. The Certificate of Achievement is
the highest form of recognition for excellence in state and local government financial reporting. The
County has applied for the Certificate of Achievement for Excellence in Financial Reporting for fiscal
year 2013.
In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily
readable and efficiently organized CAFR whose contents conform to program standards. The CAFR
must satisfy both GAAP and applicable legal requirements. Harford County has received Certificates of
Achievement continuously since 1985.
In addition, the County received the GFOA award for Distinguished Budget Presentation for its
annual appropriated budget for fiscal year 2012. In order to qualify for a Distinguished Budget Award,
the County must publish a budget document that meets program criteria as a policy document, as an
operating guide, as a financial plan, and as a communication medium. The County has received this
award continuously since 1986. In addition, the County applied for the Distinguished Budget Award for
fiscal year 2013.
12
HARFORD COUNTY, MARYLAND
FINANCIAL INFORMATION
Annual Budget Process
The County is required by the County Charter to prepare a budget consisting of the current
expense budget, the capital budget and a capital program for the ensuing five-year period. The budget
must represent a complete plan for the County reflecting all receipts and disbursements. Harford County
Government prepares a comprehensive annual budget for approval by the County Council. The following
schedule is followed in the preparation of the budget:

All department heads are required by law to submit to the County Executive, at least four
months before the end of each fiscal year, reports concerning the work performed by each
department and the estimates of revenues and expenses for operations for the succeeding
fiscal year. Budget requests are prepared and compiled in March of each fiscal year.

The proposed budget is submitted by the County Executive to the County Council in
April.

The County Council is required to hold at least two public hearings on the budget. The
County Council does not have the power to change the form of the budget, to alter
revenue estimates or to increase expenditures.

The County Council is required by law to adopt a budget on or before June 15. The
budget legislation becomes effective July 1.
Budgets are adopted by the County for the following funds: General, Special Revenue (except
for the Grants Fund), Capital Projects, Debt Service Fund, Water and Sewer Enterprise, Internal Service,
the Volunteer Firemen’s Pension Trust Fund, the Sheriff’s Office Pension Trust Fund and Other Post
Employment Benefits Fund. Budgets are not adopted for the remaining trust funds due to their fiduciary
nature. Changes in capital projects after adoption of the budget may only be made upon recommendation
of the County Executive and approval of the County Council by at least five of its members.
The budget is a comprehensive current expense budget and a capital budget. The policy
established by the County with respect to the budget is not in accordance with GAAP. Portions of prior
years fund balances are included as revenues and encumbrances are included as expenditures. Total
expenditures may not exceed unencumbered appropriations for the current expense budget as provided in
Section 123-20 of the County Code and any contract requiring the payment of funds from the
appropriations of a later fiscal year must be authorized by a legislative act. Capital projects must be
included in the capital budget, unless the County Council, upon written recommendation of the County
Executive, and after public hearing and the affirmative vote of at least five members, amends the capital
budget, as provided in Section 123-22 of the County Code.
Section 123-6 of the County Code requires the proposed current expense budget to contain not
less than the following information: (1) a statement of all revenues estimated to be received by the
County during the ensuing fiscal year, classified to show the receipt by funds and sources of income; (2) a
statement of the debt service requirements for the ensuing fiscal year; (3) a statement of the estimated
cash surplus, if any, available for expenditure during the fiscal year and any estimated deficit in any fund
required to be made up in the ensuing fiscal year; (4) a statement of the bonded and other indebtedness of
the County and its agencies, including self-liquidating and special taxing district debt and contingent
liabilities; (5) a comparative statement of the receipts, amounts budgeted and actual expenditures for the
last completed fiscal year, the current ending fiscal year and the expenditures recommended by the
County Executive for the ensuing fiscal year for each program or project, which shall be classified by
HARFORD COUNTY, MARYLAND
13
FINANCIAL INFORMATION
agency, character and object; (6) an estimate of the amounts which the County Executive deems
necessary to conduct the business of the County, not to exceed estimated revenues for the ensuing fiscal
year; (7) proposed contingency reserves, which shall not exceed 3% of the General Fund and of any other
fund; and (8) any other material which the County Executive may deem advisable or the County Council
may require.
Throughout the year, the County Executive may authorize transfers of appropriations between
general classifications of expenditures within the same agency. Transfers between agencies and within
the same fund of the current expense budget may be made during the last quarter of the fiscal year upon
recommendation of the County Executive and the approval of the County Council (Section 123-17 of the
County Code).
All unencumbered and unexpended appropriations in the current expense budget remaining at the
end of the fiscal year revert to the fund balance of the appropriate fund except that capital projects are
abandoned if three years elapse without any expenditures or encumbrances of the appropriation. The
balances of appropriations remaining after completion or abandonment of the capital projects become
available for appropriation in subsequent capital budgets (Section 123-19 of the County Code).
General Fund
The largest fund in the County’s basic financial statements, the General Fund, records payments
of all general costs of County government and receipts of taxes and other revenues not specifically
directed by law to be recorded in other funds. The chart below presents the composition of budgeted
services to be funded from the General Fund in fiscal year 2013 and 2014.
14
HARFORD COUNTY, MARYLAND
FINANCIAL INFORMATION
Comparison of Original Budgets for Fiscal Years 2013 and 2014
(in thousands of dollars)
Revenues:
Taxes
Property……………………………….……$
Income…………………………….…….
Other Local Taxes…………………….….
Intergovernmental……………………….….
Licenses & Permits……………………….
Charges for Services……..……………..…..
Fines & Forfeitures…………………………
Investment Income…………………………
Miscellaneous………………………………
Fund Balance Appropriation………….....…
Operating Transfers In………………………
Total………………………………………… $
Expenses:
County Council……………………………... $
Education…………………………………
General Government……………………...
Harford Center……………………………
Judicial…………………………………….
Libraries…………………………………
Parks, Recreation & Natural Resources……
Public Safety…………………………..…
Public Works…………………………..…
Social Services………………………...…
Debt Service………………………………
Operating Transfers Out…………...……..
Total………………………………………… $
Fiscal Year
2013
Percent of
Total
Fiscal Year
2014
251,910
175,069
4,255
2,942
3,303
14,652
105
331
9,647
20,357
19,512
502,083
50.2%
34.9%
0.8%
0.6%
0.7%
2.9%
0.0%
0.1%
1.9%
4.1%
3.9%
100%
$
2,763
234,783
43,215
553
8,285
15,635
10,360
90,185
14,901
13,223
50,378
17,802
502,083
0.6%
46.8%
8.6%
0.1%
1.7%
3.1%
2.1%
18.0%
3.0%
2.6%
10.0%
3.5%
100%
$
$
$
Percent of
Total
Percent
Change
248,595
190,600
4,810
2,909
3,475
14,389
102
306
10,225
21,976
14,337
511,724
48.6%
37.2%
0.9%
0.6%
0.7%
2.8%
0.0%
0.1%
2.0%
4.3%
2.8%
100%
-1.3%
8.9%
13.0%
-1.1%
5.2%
-1.8%
-2.9%
-7.6%
6.0%
8.0%
-26.5%
1.9%
2,746
236,262
46,442
553
8,680
16,158
10,550
92,727
15,696
14,175
50,990
16,745
511,724
0.5%
46.2%
9.1%
0.1%
1.7%
3.2%
2.1%
18.1%
3.1%
2.8%
10.0%
3.3%
100%
-0.6%
0.6%
7.5%
0.0%
4.8%
3.3%
1.8%
2.8%
5.3%
7.2%
1.2%
-5.9%
1.9%
_____________________
Source: Harford County, Maryland Comprehensive Annual Financial Report and Annual Budget and
Appropriation Bills for the fiscal year ended June 30, 2013 and for the fiscal year ending June 30, 2014.
The following table i summarizes the actual revenues and expenditures of the General Fund on the
basis of GAAP for the last five fiscal years:
HARFORD COUNTY, MARYLAND
15
FINANCIAL INFORMATION
Combined Statement of Revenues, Expenditures and Changes in Fund Balance for the General Fund – GAAP
(in thousands of dollars)
Audited 2009
Revenues
Taxes:
Property
Income
Other
Revenues from Other Agencies
Investment Income
Charges for Current Services
Miscellaneous
Licenses and Permits
Fines and Forfeitures
Total Revenues
Expenditures
Current:
County Council
General Government
Education – Primary through
Harford Center
Judicial
Libraries
Parks and Recreation
Public Safety
Public Works
Social Services
Total Current Expenditures
Debt Service
Principal
Interest
Administrative Costs
Total Expenditures
Revenues Over/(Under)
Expenditures & Debt Service
Other Financing Sources/(Uses)
Operating Transfers In
Operating Transfers Out
Premium on Issuance of Bonds
Issuance of Refunding Bonds
Payment-Escrow Agent Refunding
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance July 1
Fund Balance June 30
Fund Balance as % of Revenues
Audited 2010
Audited 2011
Audited 2012
Audited 2013
232,801 $
161,365
4,912
2,421
3,184
16,316
1,092
2,747
98
424,936 $
250,378 $
154,181
5,981
1,567
502
14,131
939
3,152
108
430,939 $
255,054 $
166,483
4,483
1,604
427
13,151
724
3,302
113
445,341 $
258,733 $
179,178
5,431
4,047
320
15,066
773
3,603
117
467,268 $
252,283
183,317
4,354
3,434
314
14,656
829
3,637
128
462,952
2,093 $
40,723
219,789
582
7,623
16,136
10,101
82,533
15,028
12,401
407,009 $
1,994 $
34,061
223,810
553
7,397
15,312
9,394
83,029
14,594
11,321
401,465 $
2,091 $
31,977
223,580
553
7,777
15,112
9,853
84,421
14,349
10,938
400,651 $
2,409 $
36,898
230,934
553
8,011
15,692
9,672
85,324
14,500
11,265
415,258 $
2,660
35,495
232,783
553
8,287
16,055
10,549
92,255
14,322
11,467
424,426
$
20,146 $
11,075
555
438,785 $
21,747 $
12,592
1,187
436,991 $
24,557 $
16,798
36
442,043 $
32,830 $
19,540
532
468,160 $
30,294
18,259
505
473,484
$
(13,849) $
(6,052) $
3,298 $
(892) $
(10,532)
$
14,425
(16,574)
8,106
21,738
(22,812)
4,883
(8,966)
78,909
69,943 $
14,203
(8,911)
14,355
25,162
(28,886)
15,923
9,871
69,943
79,814 $
20,434
(6,747)
13,687
16,986
79,814
96,800 $
13,509
(12,629)
2,304
6,931
(7,314)
2,801
1,909
96,800
98,709 $
19,172
(21,029)
13,311
59,750
(70,066)
1,138
(9,394)
98,709
89,315
$
$
$
$
$
16.46%
18.52%
21.74%
21.12%
19.29%
Source: Department of the Treasury, Harford County, Maryland
(1)
16
The information in this table should be read in conjunction with the audited financial statements appearing in
Appendix A of this Official Statement.
HARFORD COUNTY, MARYLAND
FINANCIAL INFORMATION
Tax Administration
Sources of Tax Revenues
Local property taxes are the County’s most important source of revenues, amounting to 54.5
percent of total revenues and 57.3 percent of total tax revenues for the fiscal year ended June 30, 2013.
The following table presents the County’s principal tax revenue by source for each of the last five fiscal
years:
Breakdown of Local Tax Collected
Fiscal Year Ended
(1)
June 30
2009
2010
2011
2012
2013
General Property
(2)
Taxes
Total Taxes
$
399,077,845 $
410,540,125
426,020,587
443,342,055
439,953,898
Local Other
(3)
Taxes
Income Taxes
232,800,768 $
250,377,609
255,054,612
258,732,769
252,282,858
161,364,855
154,181,039
166,483,042
179,177,637
183,317,187
$
4,912,222
5,981,477
4,482,933
5,431,649
4,353,853
Source: Department of the Treasury, Harford County, Maryland
(1)
The information in this table should be read in conjunction with the audited financial statements appearing in
Appendix A of this Official Statement.
(2)
Includes payments in lieu of taxes, additions and abatements, interest and charges on taxes, discounts on
taxes, and various credits.
(3)
Consists of admission taxes, impact fees and other miscellaneous collections.
Local Property Taxes
Property Tax Assessments
The assessment of all real and tangible personal property for purposes of property taxation by the
County is the sole responsibility of the Maryland Department of Assessment and Taxation, an
independent state agency. Assessment records and tax rolls are maintained in each county seat and in
Baltimore City. Real Property is assessed and valued at market value (full cash value) every three years.
Assessed Value, Tax Rates and Tax Levies
The following is a table of assessed and taxable assessed value of taxable property in the County
for the last five fiscal years.
Assessed and Taxable Assessed Value of Real Property
(in thousands of dollars)
Fiscal Year Ended June 30
2009
$
2010
2011
2012
2013
Assessed Value
27,438,977
29,765,438
30,248,925
28,999,153
28,565,046
Exempt Property
2,225,140
2,346,618
2,506,869
2,535,433
2,644,366
Taxable Assessed Value
25,213,838
27,418,819
27,742,056
26,463,720
25,920,680
Source: Harford County, Maryland Comprehensive Annual Financial Report for the fiscal year ended June 30,
2013.
HARFORD COUNTY, MARYLAND
17
FINANCIAL INFORMATION
Assessed Value of Personal Property
(in thousands of dollars)
Fiscal Year Ended June 30
Personal Property
Corporations
2009
$
13,983
$
978,058
2010
11,403
987,548
2011
10,731
853,134
2012
9,829
967,855
2013
13,922
1,046,509
_______________
Source: Harford County, Maryland Comprehensive Annual Financial Report for the fiscal year ended June 30,
2013.
Assessed and Taxable Assessed Value of All Property
(in thousands of dollars)
Fiscal Year
Taxable
Ended June 30
Assessed Value % Change Assessable Value % Change
2009
$
28,431,018
13.3
$
26,205,879
13.9
2010
30,764,389
8.2
28,282,684
7.9
2011
1.1
31,112,790
28,605,921
0.7
2012
29,976,837
(3.7)
27,441,404
(4.1)
2013
29,625,477
(1.2)
26,981,111
(1.7)
Total Taxable Assessed
Value to Assessed
92.2
92.4
91.9
91.5
91.1
______________
Source: Harford County, Maryland Comprehensive Annual Financial Report for the fiscal year ended June 30,
2013.
The County has a two-tier tax rate system to provide relief to the three incorporated
municipalities for highway maintenance provided by the municipalities. As the municipalities provide
their own police force, the County also reimburses the municipalities for the cost of police protection.
The tax rate imposed by the County for property located in the municipalities for fiscal year 2013 was
$0.146 lower than the rate imposed outside the municipalities. The three municipalities have legal
authority to impose a separate property tax rate on property within their geographical boundaries. The
State of Maryland also imposes a property tax on all real property within the County (including the three
municipalities).
18
HARFORD COUNTY, MARYLAND
FINANCIAL INFORMATION
The following schedule shows the real property tax rates for the five most recent fiscal years:
Tax Rates Per $100 of Assessed Value
2009
Full County Rate (outside the three
incorporated municipalities)
County Rate Charged (inside the
three incorporated municipalities)
2010
2011
2012
2013
1.082 $
1.064 $
1.042 $
1.042 $
1.042
0.926
0.908
0.896
0.896
0.896
Municipal Rates:
Aberdeen
Bel Air
Havre de Grace
0.7
0.500
0.630
0.6875
0.500
0.610
0.68
0.500
0.590
0.68
0.500
0.590
0.68
0.500
0.580
State of Maryland
0.112
0.112
0.112
0.112
0.112
$
Source: Harford County, Maryland Comprehensive Annual Financial Report for the fiscal year ended
June 30, 2013 and the Maryland Department of Assessments and Taxation.
Tax Collection
County taxes are due and payable as of July 1 of each fiscal year or as of July 1 and the following
December 1 as described below. The County records property tax revenues as the taxes are billed. Taxes
receivable are charged off as uncollectible with the approval of the State Assessor after all collection
means are exhausted. A discount of 1 percent is allowed if payment is made in the month of July and a
discount of 0.5 percent if payment is made in the month of August. Beginning October 1, a combined
penalty of 6 percent and interest at a rate of 1.5 percent per month is charged for each month or fraction
thereof that taxes remain unpaid for the current year and such taxes become delinquent on October 1 in
the fiscal year of billing. Any taxes not paid by the third Monday in June of the following year may
subject the property to tax sale.
Currently, real property taxes for taxpayers of owner-occupied residential property are payable
either annually on July 1 or in two installments, at the election of the taxpayer. The first installment is
payable as described above. The second installment is due December 1 and delinquent January 1.
Over the last five years, the County has collected virtually all of the property taxes levied. The
following table presents information with respect to the County’s tax levies and tax collections for the last
five fiscal years:
HARFORD COUNTY, MARYLAND
19
FINANCIAL INFORMATION
Property Tax Levies and Collections
General and Highway Funds
Collected within the Fiscal
Year of the Levy
Fiscal Year
Total Collections
To Date
Outstanding
Delinquent Taxes
Total Tax
Ended June 30
2009
$
2010
2011
2012
2013
Levy (1)
293,131,911 $
312,016,347
308,637,482
295,797,824
290,142,026
Amount
290,917,209
309,581,012
303,254,570
293,408,627
289,161,782
Percent
99.2
$
99.2
98.3
99.2
99.7
Amount
292,890,545
311,685,382
308,230,641
293,408,627
289,161,782
Percent
99.9 $
99.9
99.7
99.2
99.7
Amount
241,366
330,965
406,841
2,389,197
980,244
Percent
0.1
0.1
0.3
0.8
0.3
Source: Harford County, Maryland Comprehensive Annual Financial Report for the fiscal year ended
June 30, 2013.
(1)
Actual Levy less Credits
Principal Taxpayers
The following table presents the 10 largest property taxpayers as of June 30, 2013, and the
assessed value of the real and personal property owned by each taxpayer during fiscal year 2013:
Fiscal Year 2013
Percentage of
Taxpayer
Type of Business
$
Assessed
County
Total Assessed
Valuations
Taxes
Valuation
Baltimore Gas & Electric Company
Public Utility
8,474,983
1.22%
Exelon Generation Company
Non-Utility Generator
329,296,920 $
81,179,955
2,114,738
0.30%
Verizon - Maryland
Public Utility
65,915,670
1,639,368
0.24%
PEPCO Energy Power Company
Non-Utility Generator
49,865,000
1,298,983
0.18%
Constellation Power Source Generation Inc.
Non-Utility Generator
48,735,580
1,269,561
0.18%
MCI Communication Services
Public Utility
42,183,220
1,098,741
0.16%
Harford Mall Business Trust
Shopping Center
29,738,125
666,134
0.11%
Comcast of Harford County LLC
Cable Provider
23,692,143
594,097
0.09%
Festival at Bel Air LLC
Shopping Center
23,675,714
616,752
0.09%
Wells Fargo Northwest
Office/Industrial Ctr.
16,960,625
441,824
0.06%
711,242,952 $ 18,215,181
2.64%
Total Assessed Valuation
$
26,981,111,096
Source: Harford County, Maryland Comprehensive Annual Financial Report for the fiscal year ended
June 30, 2013.
20
HARFORD COUNTY, MARYLAND
FINANCIAL INFORMATION
Income Tax Data
The State of Maryland imposes an income tax on the adjusted income of individuals as
determined for federal income tax purposes, subject to certain adjustments. The 2013 Maryland income
tax rate currently is 2.0 percent on the first $1,000 of taxable income; 3.0 percent on the second $1,000;
4.0 percent on the third $1,000; 4.75 percent on taxable income of $3,000 through $100,000; 5.0 percent
on taxable income of $100,001 through $125,000; 5.25 percent on taxable income of $125,001 through
$150,000; 5.5 percent on taxable income of $150,000 through $250,000 and 5.75 percent on taxable
income in excess of $250,000. Pursuant to state law, each county and Baltimore City shall levy a local
income tax at the rate of at least one percent, but not more than 3.20 percent. During the adoption of the
fiscal year 2001 budget, the County Council adopted an increased tax rate of 3.06 percent for calendar
year 2001 and thereafter. For the fiscal year ended June 30, 2013, income tax revenue was $183,317,187
as compared with $179,177,637 in fiscal year 2012. The County does not levy a local income tax on
corporations.
Realty Transfers
Pursuant to Chapter 423 of the Laws of Maryland of 1992, the County also levies and collects a
transfer tax at the rate of 1.0 percent of the actual consideration paid for the conveyance of title to or a
leasehold interest in real property, which tax is imposed upon all transfers of real property within the
County. In fiscal year 2013, the amount of transfer tax collected was $10,854,827 as compared with
$9,786,317 in fiscal year 2012. The County Code, as authorized by Maryland law, specifies that the
proceeds of the County transfer tax shall be distributed 50.0 percent to fund school site acquisition or to
pay indebtedness incurred for school site acquisition or school construction costs and 50.0 percent to
funding the County’s purchase of land development rights in the agricultural land preservation program.
(See Schedules of Self-Liquidating Debt Principal and Interest on pages 32 - 35).
Other Local Taxes
In addition to the local property, income, and transfer taxes, the County is authorized to levy and
collect other miscellaneous taxes, the largest of which is the recordation tax. The recordation tax is levied
at the rate of $6.60 per $1,000 of consideration or amount secured of recorded instruments filed with the
Clerk of the Circuit Court for Harford County. Of this assessed amount, $4.40 per $1,000 is dedicated
first to school debt service and then to new school construction, major and capital improvements to
existing school facilities and portable classrooms; $1.10 per $1,000 is dedicated to an open space land and
recreational fund for the purchase of park lands and development of parks and recreation facilities; and
$1.10 per $1,000 is dedicated to water and sewer debt service. Revenues from this tax in fiscal year 2013
were $10,699,395 compared to $9,088,762 in fiscal year 2012.
Other miscellaneous taxes include taxes on admission charges, impact fees and mobile homes. In
addition, the County imposes a 911 Program fee on telephone service. The total of these taxes and fees in
fiscal year 2013 was $4,353,853.
State Shared Taxes
The County also received $1,236,250 from the State as the County’s share of State collected
highway user revenues for fiscal year 2013.
HARFORD COUNTY, MARYLAND
21
FINANCIAL INFORMATION
State and Federal Grant Assistance
Operating Grants
During fiscal year 2013, the County received $25,390,194 grant funds from Federal and State
governments for non-capital programs. These grants are restricted to the expenditures allowed by the
granting agency. The larger grants are as follows:
Urban Area Security Initiative
Cooperative Reimbursement
Section 8 Housing Vouchers
Community Development Block Grant
ARRA-Transit Capital Assistance
$
2,798,006
1,867,617
8,077,973
1,175,604
4,025,213
The above schedule does not include State and Federal grants made directly to the Board of Education,
Harford Community College or the Board of Library Trustees.
Capital Construction Grants
During fiscal year 2013, the County received $21,141,303 in Federal and State funds for capital
construction projects. This amount does not include State and Federal grants made directly to the Board
of Education, Harford Community College or the Board of Library Trustees.
Employee Benefits
Employees are eligible to enroll in the County’s flexible benefits plan. Included in the flexible
benefits plan are medical insurance (both traditional and health maintenance organizations), vision
insurance, dental insurance, optional life insurance, dependent care spending account and health care
spending account. Prescription drug plans are included in the various health plans.
Retirement and Pension Programs
Employees’ Retirement and Pension System
The Harford County Government joined the Employees’ Retirement System of the State of
Maryland (the “State Retirement System”) in 1948. During the 1979 legislative session, the Maryland
General Assembly created, effective January 1, 1980, the Pension System for Employees of the State of
Maryland (the “State Pension System”). All employees who were members of the State Retirement
System could remain in that system or elect to join the State Pension System. All classified employees
hired within the State after December 31, 1979 must join the State Pension System.
The State Retirement System and State Pension System (collectively, the “System”) are
administered by the State of Maryland. The System provides pension benefits and death and disability
benefits to plan members and their beneficiaries. The State Personnel and Pensions Article of the
Annotated Code of Maryland specify all benefits to plan members of the System. The System issues a
publicly available financial report that includes financial statements and required supplementary
information for the above plans. That report may be obtained by writing to the Office of Legislative
Audits, State Office Building, 301 West Preston Street, Baltimore, Maryland 21201 or by calling (410)
946-5900.
22
HARFORD COUNTY, MARYLAND
FINANCIAL INFORMATION
Plan members of the Employees’ Retirement System contribute up to 7 percent of their covered
salary. Members of the Law Enforcement Officers’ Pension System (“LEOPS”) contribute 7% of their
covered salary. Harford County Government and its component units are required to contribute at an
actuarially determined rate. In 2013 the contribution rate was 8.99%.
The contribution requirements of plan members of Harford County Government are established
and may be amended by the System Board of Trustees. The contributions for the last five fiscal years for
the State Retirement System and State Pension System, exclusive of contributions made directly by the
State of Maryland, were equal to the actuarially determined amount, as follows:
Fiscal Year
Ended June 30
2009
2010
2011
2012
2013
State
State
Pension System
Retirement System
$
264,755 $
5,538,577 $
247,311
5,673,826
7,551,126
222,247
7,522,382
82,931
6,411,508
62,014
LEOPS
4,566,615 $
4,687,290
5,037,284
5,022,351
4,152,528
(1)
Total
10,369,947
10,608,427
12,810,657
12,627,664
10,626,050
Source: Department of the Treasury, Harford County, Maryland and County Retirement and
Pension Systems.
(1)
The Maryland Retirement and Pension Systems have not provided the County with information
with respect to unfunded liability, if any.
Sheriff’s Office Pension System
The County instituted and began administering a single employer defined benefit pension plan,
the Sheriff’s Office Pension system (the SOPS) effective July 1, 1997, for certain law enforcement and
correctional employees of the Office of the Sheriff of Harford County. The SOPS issues a publicly
available financial report that includes financial statements and required supplementary information. The
report may be obtained by writing to Harford County Government, Treasurer’s Office, 220 South Main
Street, Bel Air, Maryland 21014, or by calling 410-638-3316.
The Internal Revenue Service issued a determination letter on September 20, 2002, which stated
that the Plan and its underlying trust qualify under the applicable provision of the Internal Revenue Code,
and therefore, are exempt from Federal income taxes. In the opinion of the Plan Administrator, the Plan
and its underlying trust have operated within the terms of the Plan and remain qualified under the
applicable provisions of the Internal Revenue Code.
Plan Description: Harford County Bill No. 97-20 assigns the authority to establish and amend
the benefit provisions of the plan to the government by County ordinance. The SOPS provides
retirement, disability and death benefits to plan members and their beneficiaries. Effective July 1, 2005,
per Bill 05-22, the annual cost of living increase of the CPI-U is limited to 3 percent applied each July 1
for all participants in the required 12-month pay status.
HARFORD COUNTY, MARYLAND
23
FINANCIAL INFORMATION
The membership data related to the SOPS at June 30, 2012 was as follows:
Plan Participants
Retirees and beneficiaries currently receiving benefits
Terminated plan members entitled to, but not yet
receiving benefits
Terminated non-vested participants who had not yet
received their employee contributions
Active plan members
71
8
0
124
203
The following table reflects County and employee contributions for the last five fiscal years:
Fiscal Year ended June 30
County Contributions
Employee Contributions
2009
$
2,745,971 $
472,619
2010
2,019,123
453,629
2011
2,140,299
461,209
2012
2,258,322
478,499
2013
2,287,714
450,816
_____________
Source: Department of the Treasury, Harford County, Maryland
Volunteer Firemen’s Pension System
Harford County instituted and began administering a single employer defined benefit Length of
Service Award Program, or LOSAP, for the volunteer firemen and ambulance personnel on January 31,
1975. Based on County statutes, firemen and ambulance personnel are eligible to participate upon the
accumulation of “50 points”, which are determined in accordance with a specific point system. Benefits
vest upon 25 years of service credit. The plan generally provides $5,000 of burial benefits and certain
benefits for disability. Regular benefits range between $120 and $450 a month, with a surviving spouse
receiving 50 percent of the decedent’s benefits.
Under provisions of County statutes, the County must provide annual contributions sufficient to
satisfy the actuarially determined contribution requirements. Periodic County contributions to the
pension plan are determined by an actuarially determined rate. Since there are no “salaries”, the rate
cannot be expressed as a percentage of covered payroll. There are no participant financed benefits in this
plan. Administrative costs are financed through investment earnings.
The Volunteer Firemen’s Pension System covers 1,789 firemen as of June 30, 2013. The most
recent unfunded accrued liability of the Volunteer Pension System as of September 30, 2012, was
$9,832,931.
Other Post Employment Benefits
In June 2004, the Governmental Accounting Standard Board (GASB) issued Statement No. 45,
Accounting and Financial Reporting for Employees for Post employment Benefits Other Than Pensions.
This Statement established requirements that standardize the methods used to account for non-pension
post-employment benefits (“OPEB”), as well as their annual OPEB costs. Governments are required to
24
HARFORD COUNTY, MARYLAND
FINANCIAL INFORMATION
quantify and recognize the cost of OPEB contributions to former and current employees. The new
standards require an actuarial method of accounting, which takes into account unfunded liabilities. The
County implemented this standard for fiscal year 2008. The County established a trust to act as a funding
mechanism for the employer’s cost of OPEB benefits.
Bolton Partners, Inc. has been engaged to perform the actuarial valuation of the County’s costs
and liabilities. Their valuation estimated that the County’s total unfunded actuarial accrued liability for
OPEB at June 30, 2013 was $124,102,000. The annual required contribution (ARC) of $13,757,000 for
fiscal year 2013 was fully funded by the County. The estimated contribution to fully fund the ARC for
fiscal year 2014 is $13,381,000. The approved budget contribution for fiscal year 2014 is $4,681,000. In
addition, the FY2013 Comprehensive Annual Financial Report (CAFR) shows an assigned fund balance
of $7,643,503 to fully fund the fiscal year 2014 ARC contribution.
Liquidity and Cash Management
The County Treasurer has the responsibility for managing funds of the County Government. The
County operates a pooled cash and investment fund and allocates to each fund its respective share of
equity in pooled cash and investments.
The County maintains an account at one bank. Collection of payments for County taxes, water
and sewer billings, and benefit assessments are done through the County Revenue Office. The County
uses a lock box service for collections of property taxes and water and sewer usage billings throughout
the year. The County maintains two disbursements accounts.
Cash held temporarily idle by the County is invested in obligations of the United States
Government, Federal Agency obligations, the Maryland Local Government Investment Pool (“MLGIP”),
money market mutual funds, and repurchase agreements secured by direct government or agency
obligations. As a means of limiting its exposure to losses arising from rising interest rates, the County’s
investment policy prohibits investment of operating funds in securities maturing more than one year from
the date of purchase, unless matched to a specific cash flow. Agricultural Land Preservation Funds are
invested in U.S. Stripped Treasuries to coincide with the maturity dates on installment purchase
agreements; up to twenty years in length. The County has a delivery versus payment policy, which
requires acceptable securities and/or collateral for investments to be delivered to a custodial bank prior to
cash delivery to the investment broker or bank. Collateral for overnight repurchase agreements is held by
the Federal Reserve Bank. Investments are valued at fair market value.
Investment Management
In accordance with the County investment policy, with the exception of U.S. Treasury securities,
repurchase agreements, U.S. government agencies and Maryland Local Government Investment Pool
(MLGIP), no more than 50% of the County’s total investment portfolio is to be invested in a single
security type. With the exception of overnight repurchase agreements with the County’s lead bank, and
the MLGIP, no more than 50% of the County’s portfolio may be invested with a single institution. The
County’s investments in Federal agency obligations, including repurchase agreements backed by Federal
agency obligations, were rated Aaa by Moody’s Investor Service; investments in the MLGIP and the
money market mutual funds were rated AAAm by Standard and Poor’s. County policies require that a
third party custodian hold investment securities and the collateral underlying all investments, in the
government’s name.
HARFORD COUNTY, MARYLAND
25
FINANCIAL INFORMATION
As of September 30, 2013, the County’s investments excluding pension trust funds were:
Investment Type
Maryland Local Government Investment Pool
Mutual Funds
Repurchase Agreements
U.S. Stripped Treasuries
U.S. Government Agencies
Total
$
$
Fair Value
185,773,843
4,985,000
60,000,000
48,960,341
93,992,220
393,711,404
The County Council adopted an Investment Policy in accordance with State law enacted in 1995.
The Investment Policy was prepared in accordance with the Investment Policy Model of the Municipal
Treasurers Association of the United States and Canada. The County submitted its Investment Policy to
the Municipal Treasurers Association of the United States and Canada for review and received approval
from that organization in December 1996. The investment policy was revised by the County Council in
1999. The revised policy was awarded Certification of the Investment Policy by the Municipal Treasurers
Association of the United States and Canada in July, 1999.
Risk Management
The County insurance program is administered by its Risk Management Division, established in
1987. Risk Management’s responsibilities include the administration of all claims imposed against the
self-insurance fund and maintenance of the property and liability insurance program.
The County’s assets are protected by utilizing loss control, risk transfer and risk financing
methods. Risk financing is conducted by assuming self-insured retentions or deductibles and purchasing
appropriate layers of commercial property, and excess liability insurance.
The property insurance covers damage to County buildings, contents, vehicles and equipment,
and also includes crime coverages such as employee theft, faithful performance robbery and funds
transfer fraud.
Excess general, auto, law enforcement and public officials liability insurance is maintained with
$10,000,000 per occurrence, $20,000,000 annual aggregate limits subject to a $350,000 retention. Excess
workers compensation and employers’ liability insurance contains a $2,500,000 per accident retention.
The approximately 1,700 volunteer firefighters and emergency medical personnel are insured through the
Injured Workers’ Insurance Fund. Risk Management acts as the liaison for the Volunteer Fire Companies
and Emergency Medical Technicians when questions concerning workers’ compensation issues arise.
The County retains an actuarial firm to perform the analysis used as the basis for establishing the
appropriate self-insurance reserves and fund balance. The self-insurance fund as of June 30, 2013, had
$5.7 million in estimated liability for claims in process and net assets of $7.0 million.
26
HARFORD COUNTY, MARYLAND
CAPITAL REQUIREMENTS AND DEBT MATTERS
III.
Capital Requirements and Debt Matters
Debt Capacity
Pursuant to Article 25A, §5(P) of the Annotated Code of Maryland (2005 Replacement Volume
and 2012 Supplement), the County, as a charter County, is limited in the amount of indebtedness incurred
on the faith and credit of the County to a total indebtedness at any one time not to exceed a total of 6
percent of the County’s assessable basis of real property and 15 percent of the County’s assessable basis
of personal property and operating real property described in §8-109(c) of the Tax-Property Article of the
Annotated Code of Maryland. Indebtedness having a maturity not in excess of 12 months, indebtedness
payable primarily from taxes on special taxing areas or districts, and indebtedness issued for self
liquidating and other projects payable primarily from assessments or charges for special benefits or
services are not included as indebtedness in applying the foregoing limitations. As of June 30, 2013, the
estimated total value of the property assessed for County taxation purposes within the County consisted of
$25,920,680,124 of real property and $1,060,430,972 of personal property. The debt limit of the County
is $1,714,305,453. The County’s outstanding general obligation supported debt as of June 30, 2013,
exclusive of self-liquidating debt and other indebtedness not applicable to the debt limit, was
$452,595,162 or 26.4 percent of total debt allowable. This allows for an excess of allowable debt over
outstanding non self liquidating debt of $1,261,710,291 calculated in the following chart:
Legal Debt Margin Calculation as of 6/30/13
(1)
Net Assessed Value-Real Property
(2)
Debt Limit=6% of Net Assessed Value
(1)
Assessed Value--Personal Property
(2)
Debt Limit=15% of Net Assessed Value
Total Debt Limit
(3)
Amount of Debt Applicable to Debt Limit
Less Other deductions allowed by law:
(3)
Debt Payable from Special Revenue Fund
(3)
Debt Payable from Debt Service Fund
(3)
Debt Payable from Enterprise Revenues
Total debt applicable to Debt Limitation
$ 25,920,680,124
$
1,555,240,807
1,060,430,972
159,064,646
1,714,305,453
660,169,543
(61,104,712)
(14,000,000)
(132,469,669)
Legal Debt Margin
452,595,162
$
1,261,710,291
(1)
Based on information provided by State Department of Assessments and Taxation at June 30, 2013.
Debt as of June 30, 2013 – Bonds; Capital Leases; Notes payable and Agricultural Preservation
Installment Payment Obligation.
(3)
The self-supporting Special Revenue Fund is Agriculture Preservation Installment Purchase
Agreements which are payable primarily from a transfer tax of one-half of one percent on all transfers of
real property in the County. The Debt Service Fund is a special obligation paid from the incremental
property tax revenues related to the Beechtree Estates Project and any special assessment tax imposed on
the Beechtree Estates Project. Debt issued for the Enterprise fund (i.e. Water and Sewer) are payable
primarily from hook-up fees, area connection charges, and a portion of the County recordation tax and
other charges.
(2)
HARFORD COUNTY, MARYLAND
27
CAPITAL REQUIREMENTS AND DEBT MATTERS
Debt Statement
The schedule below presents the County’s gross and net debt as of June 30, 2013 and the ratio of
such gross and net debt to the County’s assessed value.
Statement of Direct and Overlapping Debt as of June 30, 2013
General Obligation Bonds Outstanding
General Notes Payable
General Capital Lease
Self-Liquidating Debt Outstanding
Water and Sewer Bonds
Water and Sewer Capital Lease
Agricultural Land Preservation
Total Direct Debt Outstanding
Less:Self-Supporting Debt:
Water and Sewer Bonds
Water and Sewer Capital Lease
Agricultural Land Preservation
Total Self-Supporting Debt
$
448,229,857
3,070,721
1,294,584
132,276,225
193,444
61,104,712
$
132,276,225
193,444
61,104,712
193,574,381
Net Direct
452,595,162
Ratio of Debt to Assessed Valuation for Fiscal Year 2013:
Assessed Valuation
Direct Debt
Net Direct
Ratio of Debt to Population for Fiscal Year 2013:
Population
Direct Debt
Net Direct
28
646,169,543
HARFORD COUNTY, MARYLAND
28,565,045,698
2.3%
1.6%
$
$
247,570
2,610
1,828
CAPITAL REQUIREMENTS AND DEBT MATTERS
Current Outstanding Obligations
General Obligation Debt
As of June 30, 2013, the County had outstanding the bonds presented below, the debt service on
which is payable primarily from tax revenues.
Outstanding Long-Term General Obligation Debt
Paid from General Fund
Type of Bond
Water Quality Loan of 1999
Consolidated Public Improv. Bonds of 2004
Consolidated Public Improv. Bonds of 2005
Consolidated Public Improv. Bonds of 2007
Refunding Bonds of 2009
Consolidated Public Improv. Bonds of 2009
Refunding Bonds of 2010
Cons.Public Improv.Bonds of 2010-Series A
Cons.Public Improv.Bonds of 2010-Series B
Consolidated Public Improv. Bonds of 2012
Refunding Bonds of 2012
Cons. Public Improv. Bonds of 2013
Refunding Bonds of 2013
Date of Issue
September, 1999 $
January, 2004
May, 2005
November, 2007
June, 2009
June, 2009
June, 2010
June, 2010
June, 2010
January, 2012
January, 2012
February, 2013
February, 2013
Total Bonds Outstanding
$
Issued
Outstanding
Amount
June 30, 2013
4,585,000 $
876,169
23,870,000
1,750,000
35,905,000
5,587,012
95,900,000
33,500,000
21,738,036
9,376,044
96,100,000
88,091,667
25,161,828
20,841,258
67,486,509
55,620,000
76,069,620
76,069,620
40,000,000
38,181,750
6,931,393
6,881,190
30,000,000
30,000,000
59,750,398
59,750,398
583,497,784 $
Interest
Rate
2.52%
2.0%-4.375%
3.0%-5.0%
4.0%-5.0%
3.0%-4.0%
2.25%-5.0%
2.5%-5.0%
2.5%-5.0%
4.7%-5.50%
2.00%-5.0%
2.0%-4.0%
3.0%-5.0%
2.9%-5.0%
Fiscal Year of
Final Maturity
2018
2024
2024
2027
2020
2029
2021
2020
2030
2032
2024
2033
2028
426,525,108
Schedule of Long-Term General Funded General Obligation Debt
The following table presents the principal and interest payments for the County’s long-term
general obligation debt paid from the general fund as of June 30, 2013, with the addition of the new
general obligation debt paid from the general fund:
General Obligation Debt Paid From General Fund
Fiscal Year
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
2034
$
$
General Obligation Debt
Principal
Interest
18,195,160 $
28,762,156 $
28,461,141
17,228,154
29,294,825
15,918,341
28,573,026
14,653,860
27,298,235
13,413,556
129,386,863
49,000,476
103,487,910
23,305,782
51,260,952
3,996,144
-
Net Results of this Issue
Principal
Interest
- $
- $
1,660,000
1,299,017
1,660,000
1,260,811
1,660,000
1,177,810
1,660,000
1,094,810
8,300,000
4,378,451
8,300,000
2,735,051
8,300,000
1,324,051
1,640,257
65,610
Total General Obligations
Principal
Interest
28,762,156 $
18,195,160
30,121,141
18,527,171
30,954,825
17,179,152
30,233,026
15,831,670
28,958,235
14,508,366
137,686,863
53,378,927
111,787,910
26,040,833
59,560,952
5,320,195
1,640,257
65,610
426,525,108 $
33,180,257 $
459,705,365 $
155,711,473 $
13,335,611 $
HARFORD COUNTY, MARYLAND
169,047,084
29
CAPITAL REQUIREMENTS AND DEBT MATTERS
Notes Payable
The County has incurred other debt in the form of two Notes Payable to which its full faith and
credit is pledged, of $1,314,721. The Notes Payable represent funds for an upgrade to the Harford Wasteto-Energy Facility, the acquisition of real estate from Paca Limited LLC, and to Stuart Terrace for the
shore erosion control loans made to the County by the Maryland Department of the Environment and, in
turn, loaned by the County to the private land owner, pursuant to Maryland law, to be used to prevent
erosion. As of January 1, 2014, $1,314,721 is currently outstanding.
Installment Purchase Agreements
Paca Ltd., Inc.
Stuart Terrace
WTE Retrofit
Principal Balance
June 30, 2013
$
1,300,000
14,721
1,470,000
$
1,314,721
Annual Rate/
Payment Frequency
5.75%/Annually
0.00%/Annually
4.79%/Semi
Payment
Began
09/2008
07/2009
03/2005
Date
Matures
09/2018
07/2033
03/2014
___________
Source: Department of the Treasury, Harford County, Maryland
Lease Purchase Agreement
As of June 30, 2013, the County was party to a single capital lease which it entered into in April
2009 with PNC Equipment Finance for the purchase of vehicles. The final lease payment will occur in
April 2014.
Self-Liquidating Debt
As of June 30, 2013, the County had the outstanding obligations shown below, the debt service
on which is payable from water and sewer revenues and other revenues. The full faith and credit of the
County is also pledged to the payment of all such debt, however, water and sewer revenues and other
dedicated revenue have paid this debt for over 40 years.
30
HARFORD COUNTY, MARYLAND
CAPITAL REQUIREMENTS AND DEBT MATTERS
Outstanding Long-Term Self-Liquidating Debt
Type of Bond
Issued
Amount
Date of Issue
State of MD Water Quality Loan
State of MD Water Quality Loan
USDA Rural Development Bonds of 2001
Public Improvement Bonds of 2004
USDA Rural Development Bonds of 2004
Public Improvement Bonds of 2005
Public Improvement Bonds of 2007
USDA Rural Development Bonds of 2008
Refunding Bonds of 2009
Public Improvement Bonds of 2009
Refunding Bonds of 2010
Public Improvement Bonds of 2010-Series A
Public Improvement Bonds of 2010-Series B
Public Improvement Bonds of 2012
Refunding Bonds of 2012
Public Improvement Bonds of 2013
Refunding Bonds of 2013
Total Bonds Outstanding
Outstanding
06/30/2013
$
February, 1999
September, 1999
May, 2001
January, 2004
May, 2004
May, 2005
November, 2007
October, 2008
June, 2009
June, 2009
June, 2010
June, 2010
June, 2010
January, 2012
January, 2012
February, 2013
February, 2013
1,200,000 $
11,585,000
1,080,000
4,060,000
210,000
6,510,000
24,695,000
345,500
4,251,964
23,900,000
608,172
23,513,491
26,505,380
15,000,000
2,043,607
10,000,000
14,909,602
438,143
2,213,831
808,951
200,000
172,548
1,012,988
8,500,000
318,257
1,833,956
21,908,333
503,742
19,380,000
26,505,380
14,318,250
2,028,810
10,000,000
14,909,602
$
170,417,716 $
125,052,791
Interest
Rate
Fiscal Year of
Final Maturity
2.39%
2.52%
4.5%
2.0%-4.375%
4.38%
3.0%-5.0%
4.0%-5.0%
4.5%
3.0%-4.0%
2.25%-5.0%
2.5%-5.0%
2.5%-5.0%
4.7%-5.5%
2.0%-5.0%
2.0%-4.0%
3.0%-5.0%
2.0%-5.0%
2019
2018
2031
2024
2034
2024
2027
2038
2020
2029
2021
2020
2030
2032
2024
2033
2028
Agricultural Land Preservation Debt
Legislation authorizing the purchase of development rights from owners of farmland was first
enacted by the County Council in 1993 and was amended in 2007. Under this voluntary program, for
those farms that qualify, the County may purchase development rights from owners of farmland. An
easement is placed upon the land, prohibiting development (except for agricultural purposes) in
perpetuity. Development rights may be purchased through installment purchase agreements (“IPA’s”)
with a maximum maturity of 20 years. The primary source of revenue for payment of the development
rights is one-half of the County’s one percent tax on all transfers of real property within the County.
Under the terms of an installment purchase agreement, the County pays the property owner
annual interest and increments of the principal due pursuant to the installment purchase price for the term
of the agreement. The final balloon principal payment is made with the proceeds of a stripped - coupon
U.S. Treasury obligation, purchased at a discount at settlement and held to maturity. The interest rate of
the stripped-coupon U.S. Treasury is the interest rate used for the installment purchase agreement.
Interest rates in effect at June 30, 2013 ranged from 2.68 percent to 8.45 percent. Stripped-coupon U.S.
Treasuries purchased through December 31, 2013, at a cost of $25,256,626 will mature in the amount of
$56,929,999. The matured stripped-coupon U.S. Treasuries will retire $55,938,769 of the County’s
installment purchase obligations.
As of June 30, 2013, approximately 3,856 development rights covering 28,573 acres have been
purchased pursuant to the County program.
HARFORD COUNTY, MARYLAND
31
CAPITAL REQUIREMENTS AND DEBT MATTERS
Schedule of Self-Liquidating Debt
The following table presents the principal and interest payments for the County’s long-term
Water and Sewer debt, and the total self-liquidating debt as of June 30, 2013.
Self-Liquidating Debt
Fiscal Year
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
2034-2038
2039-2040
$
$
Fiscal Year
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
2034-2038
2039-2040
$
$
Agricultural Land
Preservation Installment
Purchase Agreements
Principal
Interest
2,075,443 $
3,149,941 $
2,767,557
3,037,241
7,044,823
2,852,384
2,402,529
7,439,417
18,250,162
1,930,011
3,809,008
8,772,654
3,646,630
2,367,060
11,108,026
1,080,376
61,104,712 $
20,628,550 $
Water and Sewer Bonds
Net Results of this Issue
Principal
Interest
- $
- $
262,104
235,000
240,000
259,392
250,000
247,390
234,892
255,000
1,455,000
995,896
1,760,000
687,390
2,145,000
360,350
479,743
19,192
6,819,743 $
3,066,606 $
Water and Sewer Bonds
Principal
Interest
7,288,490 $
5,298,178 $
8,078,058
5,053,141
7,992,945
4,684,008
7,768,658
4,360,298
7,842,396
4,032,489
36,027,005
15,201,026
7,681,586
32,000,115
1,486,802
17,940,952
13,880
103,823
10,349
175
125,052,791 $
47,811,583 $
Total
Self-Liquidating Debt
Principal
Interest
9,363,933 $
8,448,119
11,080,615
8,352,486
15,277,768
7,795,784
15,458,075
7,010,217
26,347,558
6,197,392
46,254,659
20,005,930
37,406,745
10,736,036
31,193,978
2,927,528
583,566
33,072
10,349
175
192,977,246 $
71,506,739
Capital Requirements
Business Model
The County has developed a business model for capital project funding for the current and the
succeeding five fiscal years. The model sets the following goals: (1) view each expenditure critically
with decisions based on real versus perceived need; (2) address each new and existing function, service,
project and expenditure as to its affordability, both now and in the future; (3) identify, foster and maintain
new revenues and fund sources; (4) prepare and maintain a conservative annual budget and multi-year
spending plan for both the operating and capital budgets; (5) maintain a prescribed year-end fund balance
to preserve the County's credit rating; and (6) develop and implement a capital program based on
affordability and sound debt management practices.
32
HARFORD COUNTY, MARYLAND
CAPITAL REQUIREMENTS AND DEBT MATTERS
Capital Projects Model
The County will fund necessary capital projects in the General County Capital Program in an
amount averaging $159.5 million per year over the next six years. These projects will be funded with a
combination of bond financing, pay-as-you-go, state/federal grants and other miscellaneous sources. It is
projected that total financing will average $58.1 million and pay-as-you-go will range from $31.3 to $72.2
million per year in the General County Capital Improvement Program. For the fiscal year ending June 30,
2014, the County budget provides for general obligation bond debt to be incurred in the amount of
$66,619,036.
Capital Projects Model
Classification
General Capital
$
Education
Community College
Solid Waste
Water Resources
TIF
Parks & Recreation
Libraries
Public Safety
Water
Sewer
Highways
Total
Approved
2014
2015
19,587,350 $
19,980,560 $
64,019,846
100,802,975
11,004,000
15,448,450
4,470,000
6,800,000
175,000
14,614,036
6,281,000
11,060,000
8,776,380
(4,912,500)
21,070,000
26,990,000
2,385,000
4,452,000
7,180,000
10,420,000
20,323,750
13,031,509
2016
5,655,090 $
68,797,988
28,800,000
11,570,000
29,665,000
6,137,410
17,625,000
4,645,000
1,950,000
25,535,500
Projected
2017
4,564,380 $
20,349,548
34,285,000
8,920,000
6,820,000
14,307,418
20,775,000
1,945,000
8,600,000
20,653,000
2018
4,343,611 $
20,940,250
27,613,000
970,000
15,425,000
847,900
850,000
1,290,000
13,600,000
20,420,500
2019
4,037,500
21,625,063
2,000,000
620,000
67,315,000
692,500
850,000
3,645,000
950,000
23,478,000
$ 174,059,901 $ 209,899,455 $ 200,380,988 $ 141,219,346 $ 106,300,261 $ 125,213,063
HARFORD COUNTY, MARYLAND
33
CAPITAL REQUIREMENTS AND DEBT MATTERS
Capital Projects Model
Source of Funds
Bonds
General Obligation $
Parks & Rec
Highways
Water & Sewer
Sub-total
Approved
2014
2015
2016
Financing Plan
2017
2018
2019
59,119,036
1,500,000
6,000,000
66,619,036
81,722,325
1,400,000
8,970,000
92,092,325
57,536,630
20,500,000
3,400,000
81,436,630
46,526,638
975,000
5,500,000
53,001,638
12,966,000
10,125,000
9,650,000
32,741,000
860,000
19,825,000
2,400,000
23,085,000
Pay-as-you-go
General
Parks & Rec
Highways
Water & Sewer
Sub-total
16,259,062
242,000
9,480,762
5,373,450
31,355,274
46,140,578
4,175,000
18,023,750
3,835,000
72,174,328
41,721,986
1,350,000
21,465,500
3,195,000
67,732,486
38,171,699
1,325,000
19,953,000
4,595,000
64,044,699
26,311,411
1,150,000
19,930,500
3,240,000
50,631,911
25,453,125
800,000
22,578,000
2,195,000
51,026,125
Federal/State Grant
General
Parks & Rec
Highways
Water & Sewer
Sub-total
44,815,090
1,649,000
2,800,000
49,264,090
37,047,802
1,090,000
2,200,000
40,337,802
38,826,872
2,425,000
1,295,000
42,546,872
18,003,009
1,800,000
600,000
450,000
20,853,009
16,287,350
900,000
390,000
2,000,000
19,577,350
3,511,938
4,700,000
650,000
8,861,938
Other
General
Parks & Rec
Highways
Water & Sewer
Sub-total
22,922,204
2,890,000
750,747
258,550
26,821,501
800,000
4,395,000
100,000
5,295,000
500,000
5,390,000
2,775,000
8,665,000
500,000
2,720,000
100,000
3,320,000
3,250,000
100,000
3,350,000
41,990,000
250,000
42,240,000
Total
$ 174,059,901 $ 209,899,455 $ 200,380,988 $ 141,219,346 $ 106,300,261 $ 125,213,063
__________
Source: Department of the Treasury, Harford County, Maryland
34
HARFORD COUNTY, MARYLAND
CAPITAL REQUIREMENTS AND DEBT MATTERS
BUSINESS PLAN
DEBT BURDEN ANALYSIS
Fiscal Years 2012-2019
Actual
2012
Expenditures
Approved
Budget
2014
Actual
2013
Projection
2015
Projection
2016
Projection
2017
Projection
2018
Projection
2019
(1) (2)
County Council
$
General Government
$ 40,913,262
$ 41,694,546
$ 46,419,412
$ 47,811,994
$ 49,246,354
$ 50,723,745
$ 52,245,457
$ 53,812,821
Education
$ 234,933,767
$ 236,782,980
$ 238,262,341
$ 245,410,211
$ 252,772,518
$ 260,355,693
$ 268,166,364
$ 276,211,355
Harford Center
$
553,036
$
553,036
$
553,036
$
569,627
$
586,716
$
604,317
$
622,447
$
641,120
Judicial
$
8,221,528
$
8,290,946
$
8,208,999
$
8,455,269
$
8,708,927
$
8,970,195
$
9,239,301
$
9,516,480
Libraries
$ 15,692,144
$ 16,054,666
$ 16,158,310
$ 16,643,059
$ 17,142,351
$ 17,656,622
$ 18,186,320
$ 18,731,910
Parks and Recreation
$ 10,103,393
$ 10,527,591
$ 10,506,180
$ 10,821,365
$ 11,146,006
$ 11,480,387
$ 11,824,798
$ 12,179,542
Public Safety
$ 91,949,421
$ 93,847,815
$ 93,581,642
$ 96,389,091
$ 99,280,764
$ 102,259,187
$ 105,326,963
$ 108,486,771
Public Works
$ 47,763,802
$ 48,498,116
$ 51,347,410
$ 52,887,832
$ 54,474,467
$ 56,108,701
$ 57,791,962
$ 59,525,721
Social Services
$ 11,348,799
$ 11,464,135
$ 12,158,851
$ 12,523,617
$ 12,899,325
$ 13,286,305
$ 13,684,894
$ 14,095,441
Other Financing Uses
Debt Service (3)
$ 30,187,840
$ 106,375,417
$ 29,218,628
$ 30,095,187
$ 30,998,042
$ 31,927,984
$ 32,885,823
$ 33,872,398
$ 51,470,203
2,672,766
49,230,835
519,838
48,273,409
3,694,260
49,005,898
774,750
53,022,019
774,750
55,824,836
774,750
56,689,741
2,074,750
62,145,338
774,750
$ 548,316,585
$ 626,519,778
$ 561,126,379
$ 574,214,119
$ 593,963,244
$ 612,971,056
$ 631,827,105
$ 653,174,580
$ 24,370,000
$ 36,345,000
$ 60,619,036
$ 83,122,325
$ 78,036,630
$ 47,501,638
$ 23,091,000
$ 20,685,000
General Obligation Debt
Other Debt Expenses
Total Expenditures
2,506,624
$
2,679,857
$
2,743,901
$
2,826,218
$
2,911,005
$
2,998,335
$
3,088,285
$
3,180,933
Capital Plan
General Obligation Bonds
Highway Bonds
Water and Sewer Bonds
4,300,000
-
19,045,000
2,550,000
6,000,000
8,970,000
3,400,000
5,500,000
9,650,000
2,400,000
General Fund
9,688,918
17,752,225
16,501,062
50,315,578
43,071,986
39,496,699
27,461,411
26,253,125
Highway Fund
10,245,000
15,280,135
9,480,762
18,023,750
21,465,500
19,953,000
19,930,500
22,578,000
Water and Sewer Fund
1,690,823
6,278,000
5,373,450
3,835,000
3,195,000
4,595,000
3,240,000
2,195,000
Other Sources (All Funds)
63,238,276
45,991,922
76,085,591
45,632,802
51,211,872
24,173,009
22,927,350
51,101,938
$ 132,578,017
$ 124,197,282
$ 174,059,901
$ 209,899,455
$ 200,380,988
$ 141,219,346
$ 106,300,261
$ 125,213,063
Actual
2012
Actual
2013
Projection
2014
Projection
2015
Projection
2016
Projection
2017
Projection
2018
Projection
2019
Pay-as-you-go
Total Capital Plan
General Obligation Outstanding July 1
$ 433,558,610
$ 448,132,841
$ 448,229,857
$ 454,379,857
$ 470,948,784
$ 489,438,029
$ 506,011,382
$ 521,343,520
Additions
49,279,319
103,388,402
33,000,000
45,000,000
50,000,000
50,000,000
50,000,000
40,000,000
Less Principal Repayments & Reductions
34,705,088
103,291,386
26,850,000
28,431,073
31,510,755
33,426,647
34,667,862
37,167,862
$ 448,132,841
$ 448,229,857
$ 454,379,857
$ 470,948,784
$ 489,438,029
$ 506,011,382
$ 521,343,520
$ 524,175,658
246,700
247,570
250,046
252,546
255,072
257,622
260,199
262,801
$ 27,441,404
$ 26,981,111
$ 26,934,104
$ 27,472,787
$ 28,022,242
$ 28,582,687
$ 29,154,341
$ 29,737,428
General Obligation Outstanding June 30
Population (4)
Taxable Property Value (5)
Taxable Assessed Valuation (000 omitted)
Debt Ratios
g
Expenditures
General Obligation
Debt Per Capita
g
Valuation
9.4%
$1,817
1.6%
7.9%
$1,811
1.7%
8.6%
$1,817
1.7%
8.5%
$1,865
1.7%
8.9%
$1,919
1.7%
9.1%
$1,964
1.8%
9.0%
9.5%
$2,004
$1,995
1.8%
1.8%
Approved Debt Policy
Ratios
g
Expenditures
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
General Obligation Debt Per Capita
2,500
2,500
2,500
2,500
2,500
2,500
2,500
2,500
2.3%
2.3%
2.3%
2.3%
2.3%
2.3%
2.3%
2.3%
Business Plan Debt Service as % of Expenditures
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
10.0%
Moody's Service Median Overall Net Debt Per Capita
Moody's Investor Service Median Net Debt to
Estimated Full Value
$936
$936
$936
$936
$936
$938
$938
$938
2.2%
2.2%
2.2%
2.2%
2.2%
202.2%
202.2%
202.2%
General Obligation Debt as % of Assessed Valuation
(1)
Growth for departments is 3% for all years beyond that.
These expenditures include General and Highway Funds only.
Includes principal and interest
(4)
Estimated at the compound annual growth rate of 1% for future periods
(5)
Estimated at the compound annual growth rate of 2% for all years beyond that.
(2)
(3)
HARFORD COUNTY, MARYLAND
35
GOVERNMENT AND INFRASTRUCTURE
IV.
Government and Infrastructure
Location
The demography of Harford County has changed over the last two decades from a predominantly
rural area to a suburban rural mix. The County, containing 448 square miles, is the 11th largest County in
land area in the State of Maryland. The incorporated municipalities of the County are Bel Air, Havre de
Grace and Aberdeen. Bel Air is the County seat.
The County is located 20 miles north of the City of Baltimore and abuts the Chesapeake Bay to
the east, is bordered to the south and west by Baltimore County, to the northeast by Cecil County,
Maryland, and to the north by the Commonwealth of Pennsylvania. The County’s executive offices are
located in the County Administrative Office Building, 220 South Main Street, Bel Air, Maryland 21014.
The County’s central telephone number is 410-879-2000.
Form of Government
Harford County was established in 1773, and since 1972 has operated with a charter form of
government with home rule. The County is governed by a full time County Executive; however,
legislative power is vested in an elected seven-member County Council, one member of which is
President of the County Council. Six election districts are represented by County Council members who
must reside in their respective districts. The President of the County Council is elected at large from the
entire County.
The County Executive is responsible for preparing and submitting to the County Council the
annual County budget, for preparing an annual report and financial statement of the County and
recommending measures for legislative action to the County Council. The County Executive appoints a
Director of Administration subject to confirmation by the County Council. The Director of
Administration serves at the pleasure of the County Executive. The Director of Administration is the
budget officer and also performs general administrative duties and supervises the agencies of the
Executive Branch of the County.
The Treasurer is appointed by the County Executive subject to County Council confirmation and
is the custodian of all County funds, securities and risk management policies. The Treasurer is
responsible for the management of the accounting and financial administration of the County. The
Treasurer administers the Department of the Treasury, has authority to conduct internal audits of all
County offices and prepares an annual financial report detailing funds reserved and paid out by the
County.
Executive, Legislative and Administrative Officials
County Executive
David R. Craig was born in Havre de Grace in June of 1949 and graduated from Havre de Grace
High School in 1967. He has been married for 42 years to his high school sweetheart and has 3 children
and 8 grandchildren.
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HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
Mr. Craig received his Bachelor’s Degree in history from Towson State College in 1971 and a
Master’s Degree in History from Morgan State University in 1983. Additionally, he is a graduate of the
Maryland Leadership Academy and the National Leadership Academy.
Mr. Craig served a 34-year career with the Harford County Public Schools. He began as a history
teacher at Edgewood Middle School and went on to hold positions at Aberdeen and Havre de Grace
Middle Schools. In 2005, he retired as Assistant Principal at Southampton Middle School in Bel air when
he became County Executive.
In public service, Mr. Craig has been elected by the citizens of Harford County to serve at several
levels of government. In his hometown of Havre de Grace he was first elected to the City Council in
1979 and went on to become Mayor of Havre de Grace in 1985. He began service on a statewide level in
the Maryland House of Delegates in 1991 and was elected as one of Harford County’s two Senators in the
Maryland General Assembly in 1995. Mr. Craig served as the vice-chair of the Harford County
Delegation in 1993 and as chair of the delegation in 1998 and 1999. Upon completing his term in the
State Senate, he was once again elected to serve Havre de Grace as Mayor, a position he continued to fill
until taking the office of Harford County Executive in July 2005. The voters of Harford County then
elected him to a full term as County Executive in 2006, and he was reelected in 2010.
In addition to his duties as County Executive, Mr. Craig has served as the chair of the Board of
Directors for the Baltimore Metropolitan Council; as a member of the Economic Alliance of Greater
Baltimore Board of Directors; member of the R. Adams Cowley Shock Trauma Center Board of Visitors
and served as President of the Maryland Association of Counties. Additionally, he actively participates as
a board member for a number of philanthropic and charitable organizations.
Mr. Craig is a staunch supporter of scouts and scouting programs. In 2007, he received the
Harford County Good Scout Award from the Harford District, Boy Scouts of America and the Silver
Beaver Award in 2009 from the Baltimore Area Council. He currently serves on the Baltimore Area
Council Board of Directors. He also recently received the Daily Record’s Innovator of the Year award
for introducing innovative programs to county governments that improve efficiency and transparency.
County Council
President:
William K. "Billy" Boniface is the President of the Harford County Council. He was elected in
2006 and re-elected to a second term in 2010. President Boniface was born on May 7, 1964, in Havre De
Grace, MD. He graduated in 1982 from John Carroll High School. He is a Partner/Division Manager of
Bonita Farm, a family owned and operated horse business located in Darlington, MD.
As the President of the Harford County Council he serves on the Board of Estimates, Council
Personnel Committee, and the Economic Development Agriculture Advisory Board. President Boniface
is a past President of the Maryland Horse Breeders Association and Chairman of the Maryland Young
Farmers Advisory Board. He also is a former member of the Maryland Agricultural Land Preservation
Foundations Board of Trustees. In addition to the Maryland Horse Breeders Association, President
Boniface is currently a member of the Harford Land Trust, Deer Creek Watershed Association, Harford
County Farm Bureau, and the Harford County Chamber of Commerce. He has served as a Fire Line
Officer with the Level Volunteer Fire Company and a soccer coach with the Dublin/Darlington
Recreational Council. His family is very active in the Harford County 4H Livestock Club.
37
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
Council Members:
Dion F. Guthrie is the Council Member serving District A which includes Abingdon, Edgewood,
Joppatowne, Magnolia and part of Winter’s Run. Initially elected in 2002, he was re-elected in 2006 and
again in 2010. Councilman Guthrie received an A.A. degree from Dundalk Community College in 1991,
an A.A. degree from McKendree School of Religion in 1992, a B.A. degree from McKendree School of
Religion in 1996, and a B.A. degree from Antioch University in 1998. He graduated from the Harford
Leadership Academy in 2000 and the Sheriff’s Police Academy in 2007. He graduated from the
Academy for Excellence in Local Governance from the University of Maryland in 2009 and also received
a Certificate of Completion from the Maryland Department of Planning, Planning Commission/Planning
Board of Education Course. In April 2010 he received a Certificate of Completion from the U.S. Coast
Guard Sector Baltimore Search and Rescue 2010.
Councilman Guthrie has been a resident of Harford County in the Joppatowne area for over fortyfour years. As a member of the Harford County Council, Councilman Guthrie serves on the Commission
on Disabilities, Community Mediation Commission, Audit Committee and Harford Cable Network
(HCN) Advisory Board. He has been appointed to the Base Realignment and Closure (BRAC)
Commission by the County Executive and also serves on the BRAC Committee of the Susquehanna
Region of the Workforce Investment Board of Harford and Cecil Counties where he also serves on the
Executive and Business Service Committees. In addition, he serves on the BRAC Committee for the
NASA Goddard Space Flight Center, Goddard Alliance, in Greenbelt, MD. Additionally, Councilman
Guthrie serves on the Board of the Greater Edgewood Education Foundation (GEEF), as Legislative
Liaison to the Route 40 Business Association, and is a lifetime member of the ESGR, the National
Committee for the Employer Support of the Guard and Reserve. He is also an active member of the
Joppatowne Lions Club, and was also instrumental in bringing the Guardian Angels to Harford County to
aid in fighting crime. In 2008, he was elected as a delegate to the Democratic Convention held in Denver,
Colorado. In 2010 he was recognized for his outstanding leadership by the Harford Leadership Academy
Alumni Association as one of the Top 20 graduates for the last 20 years.
In 1997, Councilman Guthrie was appointed and commissioned, Admiral of the Chesapeake Bay,
by the Governor of the State of Maryland for his maritime interest, support of protection and clean-up of
the Chesapeake Bay, and because of his work with special needs children. Personal honors for
Councilman Guthrie include being selected to carry the Olympic Torch for the 2002 Winter Games in Salt
Lake City, Utah and driving Cal Ripken around Camden Yards after Ripken’s final major league game.
Mr. Ripken graciously autographed Councilman Guthrie’s 1983 World Series Baseball, the last ball
signed by Cal, in the field of play, as an Oriole. Councilman Guthrie is married to Dianna and they have
six children and four grandchildren.
Joseph M. Woods, is the Council Member for District B which includes Abingdon, Benson,
Fallston, and parts of Joppa. Councilman Woods was first appointed to the Harford County Council on
May 21, 2009 and was elected to a second term in 2010.
Councilman Woods was born on July 13, 1978 in Maryland and has lived in Harford County all
his life. He currently lives in Fallston with his wife, Laura and his retired Search and Rescue K9
"Katie". Councilman Woods has always been an active member of the Fallston Community where he has
served as a Firefighter and then the Chief of the Fallston Volunteer Fire and Ambulance Company.
Councilman Woods is also an active member of the Harford County Volunteer Fire and Emergency
Medical Services Association and he is a Command Staff Member of the Harford County Technical
38
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
Rescue Team. He also serves on the Central Maryland Urban Search and Rescue Team and a number of
public safety committees around the state of Maryland.
Councilman Woods is a small business owner of a Safety Training/Consulting firm named The
JMW Group, LLC. He is also the Executive Director of the United Rescue Team Foundation. Councilman
Woods’s wife, Laura, is the owner operator of Maryland Quartermaster of Military, Police, and Public
Safety Supply store located on Main Street in Bel Air, Maryland. Councilman Woods was recently
appointed by the County Council to serve as the Council’s representative to the Maryland’s Association
of Counties and he is a member of the Harford County Local Management Board.
James V. McMahan, Jr., was elected as the Council Member from District C, which includes the
County Seat of Bel Air; in 2006 after serving three years on the Bel Air Town Board of Commissioners.
“Capt’n Jim” as he is known locally, received a B.A. degree from Western Maryland College (now
McDaniel College) and was commissioned a Second Lieutenant in the US Army Signal Corps upon
graduation. He attended the University of Baltimore Law School and in 2011 graduated as a Fellow from
the University of Maryland’s Academy of Excellence for Local Governance. Councilman McMahan
retired as a Colonel (MD) after serving more than thirty years on Active Duty, in the Army Reserves and
in the MDDF (State Guard). On January 27, 1967 Jim was selected as one of “Maryland’s Five
Outstanding Young Men” by the Maryland Jaycees. His civic contributions include establishing the Bel
Air Community Band, a 100-piece concert band that has received various awards in regional
competition. In 2004 Mr. McMahan founded the Bel Air Community Chorus and is Director Emeritus.
He is a life member of the Bel Air Volunteer Fire Company and also served as a Bel Air Police Officer.
As a member of the Harford County Council, Councilman McMahan serves as Sheriff’s Office Liaison,
the Criminal Justice Coordinating Council, the Local Emergency Planning Commission and serves as
liaison to the Liriodendron Foundation which maintains the former summer home of Dr. Howard Kelly,
one of the founding surgeons of the Johns Hopkins Hospital. He was affiliated with WBAL Radio and
Television for many years and became General Manager of WVOB in Bel Air in 1968. In 1978, Mr.
McMahan and a group of investors purchased Radio Station WAMD in Aberdeen. He became the
majority stockholder and hosted the morning show until his retirement in 2003.
COL(R) (MD) McMahan was awarded an Army Commendation, the National Defense Ribbon,
The Reserve Component Ribbon, The Maryland Army National Guard Meritorious Service Award and
the French National Defense Medal, Gold Echelon.
Chad R. Shrodes is the Council Member for District D, which encompasses northern Harford
County, including the communities of Jarrettsville, Norrisville, Whiteford, Street, Dublin, Darlington,
Level and Forest Hill. The Shrodes family has lived in Norrisville since the 1800’s and Councilman
Shrodes is proud of his long Harford County Heritage. He is a graduate of North Harford High School,
attended Harford Community College and earned a Bachelor of Science degree in Environmental and
Land Use Planning from Towson University in 1997. He also graduated from the Harford Leadership
Academy in 1999, the Harford County Sheriff's Office Citizens' Police Academy in 2009 and the
Academy for Excellence in Local Governance in 2011. As a member of the Harford County Council,
Councilman Shrodes serves on the Economic Development Advisory Board, the Core Services Agency
and the Cultural Arts Board. He also serves as the Council's alternate to the Harford Cable Network
Board.
Prior to taking office, Councilman Shrodes worked for both the Harford County Department of
Planning and Zoning and the Maryland Department of Planning in the fields of land preservation, forest
conservation and development proposal review. He is currently employed as a real estate agent with Long
39
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
and Foster Real Estate, Inc. Councilman Shrodes participates in numerous community groups. He is an
advocate for Harford’s rural heritage and agricultural industry through his support of the Land
Preservation program, Farmers’ Markets, the Farm Bureau and 4-H programs and capital projects. An
avid conservationist, Councilman Shrodes has participated in several Earth Day and Arbor Day projects,
including the historic villages of Whiteford and Cardiff, Deer Creek, Big Branch, Eden Mill, the Broad
Creek Boy Scout Camp, Izaak Walton League and Harford Glen. Councilman Shrodes is also an active
member of the Jarrettsville Lions Club, serving three terms as the program director from 2005 to 2007
and again in 2012. In addition, Councilman Shrodes supports local Harford County schools and PTAs,
Parks and Recreation programs, Fire and EMS services and the Boy and Girl Scout troops in his district.
Councilman Shrodes resides in Norrisville with his wife Amber and daughter Madelyn Grace.
Richard C. Slutzky, District E, was elected as the Council Member for District E, which includes
Aberdeen, Churchville, and Fountain Green, in 2002 and re-elected in 2006 and 2010. Mr. Slutzky has
served nine consecutive terms as Council Vice-President. He received his B.S. and M.S. degrees from
Syracuse University and served as a Private First Class in the US Marine Corps Reserves. As a member
of the Harford County Council, Councilman Slutzky serves as Liaison to the Board of Education,
Chairman of the Adequate Public Facilities Board, Member of the Audit Advisory Board, and Member of
the Tobacco Task Force. He spent several years teaching and coaching at the university level before
beginning his thirty-one year career as a teacher and coach at Aberdeen High School. His contributions to
the sport of wrestling resulted in his induction into both the Maryland and U.S. Wrestling Halls of Fame
and appointment to the State Board of Directors of the Maryland Chapter of the National Wrestling Hall
of Fame.
Mary Ann Lisanti, District F, was elected as the Council Member for District F which includes
Havre de Grace, Abingdon, Aberdeen Proving Ground, Perryman and Belcamp, in 2006, and re-elected in
2010. As a member of the Harford County Council, Councilwoman Lisanti serves on the Council’s
Personnel Committee, Citizens Nursing Home Board, Mental Health & Addictions Advisory Board, she
Chaired the Bi-partisan Commission on School Construction, and Vice-Chair of the Obesity Task Force.
Mary Ann was born in October of 1967 and is a fourth-generation Harford Countian. She resides
in her childhood home outside of Havre de Grace. Mary Ann graduated from Havre de Grace High
School in 1985 and earned a Bachelor of Arts degree in Political Science from the College of Notre Dame
of Maryland in 1989. In 1996 she earned a Master’s degree from Central Michigan University in Public
Administration. Her professional career began by working for several high profile state and local
campaigns and later for the Maryland General Assembly. She was a staff assistant to Harford County
Executive Eileen Rehrmann and later to the Director of Planning and Zoning. In 1997 Mary Ann was
appointed by the Mayor and confirmed by the City Council to the position of Havre de Grace City
Manager and served in that position until 2002. Mary Ann was elected Vice President in 2000 and
President in 2001 of the Maryland Association of City and County Managers. In 2002, Ms. Lisanti
became the Executive Director of the Lower Susquehanna Heritage Greenway where she remains
committed to enhancing public recreational opportunities and the preservation of our region’s history,
culture and natural environment.
In 2007 Councilwoman Lisanti was elected to service on the Maryland Association of Counties
(MACO) Legislative Committee and in 2009 the Education Sub-committee. These committees serve to
ensure that local issues are address by the Maryland General Assembly. She continues to serve on these
committees and is an active member of MACO. In 2010, Councilwoman Lisanti was appointed to serve
on Maryland’s Sustainable Growth Commission, a State-wide task force established by the Maryland
40
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
General Assembly to advise the Governor and State Legislature on economic growth, resource protection,
planning and funding policy.
In 2009, Councilwoman Lisanti was appointed by Governor Martin O’Malley to serve on the
Local Government Advisory Committee (LGAC) to the Chesapeake Executive Council. In 2010,
Councilwoman Lisanti was elected Chair. The Advisory Committee is made up of local government
representatives from Pennsylvania, Maryland, the District of Columbia and Virginia. The Committee
represents over 1,800 units of local government in the Chesapeake Bay Watershed.
As Chair of LGAC, Councilwoman Lisanti advises the Chesapeake Bay Executive Council about
the best ways to engage local governments and their citizens in the restoration of the Chesapeake Bay and
land use issues. The Executive Council is now headed by the Administrator of Environmental Protection
Agency (EPA) and includes the Governors of each state and the Mayor of Washington DC. LGAC
currently is advising EPA and the States on how to involve local governments in developing the current
Bay clean- up plan including the Bay Total Daily Maximum Load (TMDL), Treasured Landscapes and
American’s Great Outdoors Initiative. In May of 2010, Councilwoman Lisanti was nominated to serve as
a Member of the Advisory Council for the Chesapeake National Historic Trail, the first National water
based trail in the United States. Her appointment was made by the Secretary of the Interior and the White
House in 2011. Councilwoman Lisanti is a strong advocate for economic development, education, public
health, Aberdeen Proving Ground, and the environment.
Administrative
Mary F. Chance, Director of Administration, began her career with Harford County Government
in March, 1987 as the Volunteer Coordinator at the Harford County Office on Aging, later became the
Community Resources Coordinator for the Department of Community Services. Ms. Chance worked
closely with many volunteers, non-profit agencies, schools, faith based organizations, and other
government agencies and businesses, matching skills and resources with need.
In 1995, Ms. Chance was appointed Director of the Department of Community Services,
responsible for the Grant in Aid Program, Disabilities Commission, Commission for Women, Youth
Commission and the Kid’s C.A.N Mentoring Program. She was also responsible for the supervision, as
well as administration of federal, state and local funding, regarding Harford Transit, Office on Aging,
Office of Drug Control Policy, the Office of Human Relations, Volunteer Harford, the Harford County
Mediation Commission, Grant in Aid Program, and Community Development Program, Community
Development Block Grant, HOME Program and Criminal Justice Coordinating Council. On February 1,
2011, Ms. Chance was appointed Director of Administration, overseeing all departments and agencies
within Harford County Government.
In her personal life, Ms. Chance moved from Kentucky to Harford County in 1966 and now lives
in Bel Air. Ms. Chance has extensive experience in working with community groups. She has and
continues to serve with many volunteer organizations throughout Harford County.
Kathryn L. Hewitt, CPA, County Treasurer, appointed in January 2011, manages all aspects of the
finance office including accounting, accounts payable, accounts receivable, payroll, water and sewer
billing and collections, investments, debt management, real and personal property tax billing and
collection and tax sale. Prior to becoming Treasurer of Harford County, she was in senior finance
positions for Anne Arundel County and Prince George’s County, Maryland. She is a former director of
Government Finance Officers Association and is President of Maryland GFOA. She is also on the
41
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
Advisory Board for the Maryland Local Government Investment Pool and the Certification Council for
the Certified Public Finance Officers professional designation. She is a member of the GFOA Committee
on Retirement and Benefits Administration. Mrs. Hewitt holds a BS from the University of Maryland in
Business Education and a MBA with concentration in Finance from Loyola University Maryland. She is
also a Certified Public Accountant licensed in Maryland, a Certified Cash Manager and a Certified Public
Finance Officer. She also sits on the Harford County Economic Development Advisory Board, the
Spending Affordability Advisory Committee, the Route 40 Business Association and the Adequate Public
Facilities Advisory Board. She is a Trustee of the Sheriff’s Pension Plan, the Volunteer Firefighters
Length of Service Awards Program and is Chairman of the Other Post-Employment Benefit Trust.
Robert S. McCord, County Attorney, appointed in April 2004, received a Bachelor’s degree in
Business Administration and Philosophy from Loyola College in Maryland in 1983 and a Master of
Business Administration from Loyola in 1985. He received a Juris Doctor, cum laude, from the
University of Baltimore School of Law in 1989 where he has served on the Adjunct Faculty since 1995.
Mr. McCord has been a member of the Maryland Bar since his admission in 1989. He has also been
admitted to the U.S. District Court for the District of Maryland, the U.S. Court of Appeals for the Fourth
Circuit and the U.S. Supreme Court. He has served as a judicial law clerk in the Circuit Court for Harford
County (1989-1990); was an associate in the Bel Air law firm of Leaf and Mahoney, P.A. (1990-1998);
and has served as the Deputy County Attorney for Harford County (1998-2004). He also has served as a
member of the Board of Trustees and Chairman of the Claims Committee for the Local Government
Insurance Trust (2002-2009), as President of the Harford County Bar Association (2009-2010) and as
Chair of the State and Local Government section of the Maryland State Bar Association (2011-2012). He
currently serves as President of the Maryland Association of County Civil Attorneys, an affiliate of the
Maryland Association of Counties.
Janet Schaub, Director of Human Resources was appointed Director of Human Resources for
Harford County Government by County Executive David R. Craig in November 2013 and was confirmed
by the Harford County Council on November 12, 2013. As Director of Human Resources, Ms. Schaub
serves in the County Executive’s Cabinet, administers and interprets the County personnel code, union
contracts and policy, oversees the Employment, Classification and Compensation and Training functions,
the management and distribution of benefits, and serves on the Other Post-Employment Benefits Trust
Fund Board as well as the Sheriff’s Office Pension Plan Board of Trustees. Ms. Schaub has worked for
Harford County Government for 37 years, all of which have been in the Department of Human Resources,
formerly the Office of Personnel. Prior to becoming Director, Ms. Schaub served as Deputy Director of
Human Resources for 10 years and at some time in her career has performed the functions of every
position within the department.
Richard D. Lynch, Director of Inspections, Licenses and Permits, was appointed to this position
in December 1993. Prior to his current appointment, Mr. Lynch served as Chief of the Housing Services
Division within the Department since 1986. He holds a Bachelor of Science Degree in Management
Studies from the University of Maryland and is a member of the Maryland Building Officials Association
and the International Building Officials Code Association. He is also a State of Maryland Certified
Inspector pursuant to Article 41, Annotated Code of Maryland. Mr. Lynch served as a member of the
Board of Directors for the Humane Society of Harford County from 2002-2005.
Arden Case McClune, Director of Parks and Recreation, appointed February 2010, has served
Harford County for more than 29 years, fourteen of those in the Department of Parks and Recreation. Ms.
McClune is a graduate of the University of Illinois with a bachelor’s degree in Planning. Following
professional planning work in North and South Carolina from 1973 to 1984, she began work as a planner
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HARFORD COUNTY, MARYLAND
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in Harford County Department of Planning and Zoning. She rose to the position of Chief of Current
Planning in 1988 and was appointed Director in 1995. In 1999, she transferred to the Department of
Parks and Recreation as a planner/project manager, utilizing her extensive knowledge of Harford County
and its regulatory processes in development and implementation of capital projects. She was promoted to
the position of Chief of Capital Planning and Development for the Department of Parks and Recreation in
2002. She has combined her planning and management knowledge with her experience in parks and
recreation, including budgeting, operations and leisure programming. She has represented the County
regarding statewide parks and recreation issues and is active in the Maryland Association of Counties’
Parks and Recreation Affiliate. Ms. McClune is a member of the Maryland Recreation and Parks
Association and the American Institute of Certified Planners. She is also a board member of the Greater
Bel Air Community Foundation.
Pete Gutwald, Director of Planning and Zoning, graduated from the University of Maryland with
a Bachelor’s degree in Planning and received a Master of Public Administration from the University of
Baltimore. He has worked for Harford County Government for the past 23 years in the Department of
Planning and Zoning. Mr. Gutwald is a member of the American Institute of Certified Planners and a
2001 Harford Leadership Academy Graduate. He was appointed to the Critical Area Commission for the
Chesapeake and Atlantic Coastal Bays and is currently serving as Program Subcommittee Chairman for
the Commission. His work has focused on growth management (APF, Capital Budget Review, Master
Plans, Comprehensive Zoning Review), community planning, transportation planning and traffic
engineering, regional planning (including 2 years as Chairman of the Baltimore Regional, Transportation
Board), redevelopment and revitalization, agriculture and historic preservation, environmental planning,
GIS/data management and demographics. The Department successfully completed a comprehensive
rewrite of the Zoning Code, Subdivision regulations and Sign Code under the direction of Mr. Gutwald.
This was the first comprehensive rewrite of these regulations in over 25 years. The Department recently
updated its Master Plan utilizing state of the art web based technology for public outreach and input
throughout the process.
Timothy F. Whittie, P.E., Director of Public Works for Harford County Government, was
appointed to this position in 2012. Prior to his current appointment, Mr. Whittie was Chief of
Development Services Division for Cecil County Department of Public Works. Prior to his current
government experience, Mr. Whittie worked for 23 years in private industry for three consulting
engineering companies. Mr. Whittie serves on the Board of Directors of the Northeast Maryland Waste
Disposal Authority and is a member of the County Engineers Association of Maryland. Mr. Whittie
received a Bachelor of Science degree in Engineering from the University of Maryland in 1983 and is a
licensed Professional Engineer in the State of Maryland and in the District of Columbia.
James C. Richardson, Director of Economic Development, was appointed by County Executive
David Craig in May of 2006 where he worked with the BRAC transition programs, established the BRAC
Action Plan and developed the BRAC transition office which is now the Chesapeake Science and
Security Office. Prior to joining the Economic Development office, Mr. Richardson served as Director of
Human Resources for the County for seven years.
He currently serves on several boards and commissions including the Susquehanna Workforce
Investment Board, the Northeast Maryland University Research Park, Harford United Charities and the
Highland Community Association. He has affiliations with the Maryland Economic Development
Association, Army Alliance, American Defense Communities, Harford County Chamber of Commerce
and the National Development Advisory Board which advises the Office of Economic Development and
the County Executive and County Council on policy issues regarding business growth and expansion.
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Mr. Richardson holds a Master’s Degree in Economics from Virginia Tech, and a B.A in Political
Science from Lynchburg College.
Shawn A. Kingston, CPA, CGMA, Director of Housing, was appointed in 2004. Prior to
appointment, he served as Acting Director and Agency accountant. Mr. Kingston has a Bachelor’s degree
in economics from the University of Maryland and an Associate’s degree in management and a Financial
Accounting Certificate from Anne Arundel Community College. He is a member of the American
Institute of Certified Public Accountants, Maryland Association of Certified Public Accountants, and the
National Association of Housing and Redevelopment Officials.
Elizabeth S. Hendrix, Director of Community Services, began her career with Harford County
Government in 1998. Prior to becoming Director, Mrs. Hendrix served as the Deputy Director since 2003
and Community Development Manager/Community Development Coordinator from 1998 – 2003.
During her career with the Department of Community Services, Hendrix has served as a liaison with
agencies within and outside of government on community related issues. Hendrix had led the
implementation of the county–wide grant administration process tracking all grant requests and funding
from all departments and agencies.
In addition to her work with county government, Mrs. Hendrix is active on various boards and
associations and is intimately involved in the community. Mrs. Hendrix’s education includes a Masters
of Arts in Business and a Bachelor of Science in Business Administration. She is also a Class of 2000
graduate from the Harford Leadership Academy.
Deborah L. Henderson, Director of Procurement has worked in the Department of Procurement
for 28 years; 20 years as a Purchasing Agent and 8 years as the Director. In 2007 she was the chair for
the Baltimore Regional Cooperative Purchasing Committee which is part of the Baltimore Metropolitan
Council and she continues to serve as a member the committee and will Chair again in 2014.
William T. (Ted) Pibil, Jr., Director of Information and Communications Technology was
appointed to this position in 2012. Prior to his appointment, Mr. Pibil had twenty years of experience in
the private sector including executive level positions in both software development and network
infrastructure capacities. Mr. Pibil earned a Bachelor’s degree in economics from Towson University.
Russell Strickland, as Director of Department of Emergency Services is responsible for the
911/PSAP/Communications Center, Emergency Management, Technical Services(Radio, Special
Operations – Hazardous Materials and Technical Rescue support, and Training, as well as coordination
with the fire/rescue/EMS providers of the County. Prior to his appointment, he worked for The Johns
Hopkins University Applied Physics Laboratory, serving as Senior Professional Staff in the Protection
Operations and Analysis Section for the Homeland Security Business Area. Mr. Strickland has an
extensive career within public safety, to include fire/rescue services, emergency management, emergency
medical services, fire investigation / inspection, hazardous materials, law enforcement and public safety
communications experience. This background includes not only the operational aspects within each of
these domains, but also management and leadership positions as well. For over 20 years he served as an
assistant director for the University of Maryland’s Fire and Rescue Institute, he lead a cadre of faculty
who expanded the extension based training and education program from less than two dozen courses and
offerings to the current catalog of over a hundred field based courses. He led the preparation and
evaluation of those courses for college credit recommendations through the American Council on
Education. These courses serve as the basis for several higher education programs today. Additionally,
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HARFORD COUNTY, MARYLAND
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he is one of the leaders who created the fire service certification program in Maryland, a system
recognized nationally as a model. For the last five years of his over 35 year career, he was on executive
loan from the University to state government, serving as the deputy director for the Maryland Emergency
Management Agency.
Organization
Responsibilities, Services and Infrastructure
County Employees
The Harford County Government budgeted 1,595 full-time positions and 14.35 part-time
positions in fiscal year 2014. This number does not include contractual positions within Harford County
Government, Harford County Board of Education, Harford Community College or the Library System.
The following labor organizations represent the County’s employees:
45
1.
American Federation of State, County, and Municipal Employees, Local 1802, represents
approximately 176 hourly-classified employees primarily of the Department of Public
Works, Division of Highways, Parks & Recreation and Solid Waste.
2.
Maryland Classified Employees Association, Chapter 610, represents approximately 451
of the salaried employees of all County Departments.
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
The County Charter prohibits confidential employees, including certain members of the
Department of the Treasury, Department of Human Resources, and Department of Law from union
representation.
As a result of a Court of Appeals of Maryland decision in February, 1990, the County Executive
may, but is not required, to execute labor agreements with these organizations. The unions have ratified
the contracts for the period July 1, 2013 through June 30, 2015.
Education
Per Senate Bill 629, effective July 1, 2009, the Board of Education was changed from a fully
appointed Board to an elected-appointed Board consisting of six elected members and three members
appointed by the Governor of the State of Maryland for four-year terms to be phased in over a period of
time. There is also a student representative to the Board who serves a one-year term while a high school
senior. This student is elected by the Harford County Regional Association of Student Councils.
The Board of Education appoints the Superintendent of Schools for a four year term. The
Superintendent acts as the Executive Officer of the Board as well as Secretary and Treasurer. The
Superintendent is responsible for the Administration of the Harford County Public School System which
consists of fifty-four schools, thirty-three elementary, nine middle, nine comprehensive high, one
technical high, a special education school serving students with disabilities, and an Alternative Education
Program.
For each of the most recent fiscal years, total school enrollment was:
School Year
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
Total Enrollment
39,568
39,172
38,611
38,637
38,394
38,224
37,868
Harford County Public Schools (HCPS) achieved a graduation rate of 88.4 percent for the class of
2012. This rate represents a slight increase from the 87.4 percent rate for the class of 2011 and exceeds
the statewide rate of 83.5 percent.
Scholastic Assessment Test (SAT)
The participation rate in the Scholastic Aptitude Test (SAT) for 2012 remained relatively the
same from the previous year. Compared to 2011, Harford County 2011 test-takers’ overall performance
in mathematics improved four points (516), held steady in writing (481) and dipped slightly in critical
reading (503).
Harford County mean scale scores for 2012 exceed the state and the nation in critical reading
(503 versus 497 and 496, respectively) and in mathematics (516 versus 502 and 514, respectively) and
remain slightly behind in writing (481 versus 488).
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Because the SAT is taken by well over half of all college-bound seniors throughout the nation,
score reports and demographic information collected through the test-taking process represent one
significant source of information about the nation’s college-bound youth over a period of time. It is
important to note that the SAT is not a required test. Students decide on their own, or with the support of
their parents and teachers/counselors, to participate based on their post-high school plans.
Harford County Public Schools
Scholastic Assessment Test (SAT) - Math
Harford
Maryland
Nation
FY2008
521
502
515
FY2009
521
502
515
FY2010
523
506
506
FY2011
512
502
514
FY2012
516
502
514
Scholastic Assessment Test (SAT) - Critical Reading
Harford
Maryland
Nation
FY2008
505
499
502
FY2009
507
500
501
FY2010
507
501
501
FY2011
507
499
497
FY2012
503
497
496
Scholastic Assessment Test (SAT) - Writing
Harford
Maryland
Nation
FY2008
505
497
494
FY2009
488
495
493
FY2010
483
495
492
FY2011
481
491
489
Source: Harford County Public Schools, Office of Accountability
Note: Represents most current data available
The next chart reflects all test scores for fiscal year 2012.
47
HARFORD COUNTY, MARYLAND
FY2012
481
488
488
GOVERNMENT AND INFRASTRUCTURE
Student Academic Performance
2012 Test Results
2012 Scholastic Assessment Test (SAT)
Harford
State
Nation
Average Score
Math
Critical Reading
Writing
516
503
481
502
497
488
2012 High School Assessments (HAS)
Grade 10
Harford
514
496
488
State
Percent Passing
Algebra
Biology
English
Government
92.8%
91.0%
84.6%
88.4%
83.9%
84.7%
79.2%
81.8%
2012 Maryland School Assessments (MSA) - Reading
Harford
State
Advanced & Proficient
Percent Passing
Grade 3
88.6%
85.0%
Grade 4
93.9%
89.8%
Grade 5
93.1%
89.9%
Grade 6
87.7%
84.5%
Grade 7
86.8%
81.2%
Grade 8
85.5%
80.8%
Grade 11
Harford
State
Percent Passing
92.4%
89.6%
87.4%
91.7%
87.9%
85.7%
85.3%
86.2%
Grade 12
Harford
State
Percent Passing
93.2%
87.2%
87.3%
92.5%
87.9%
84.9%
86.4%
87.9%
2012 Maryland School Assessments (MSA) - Math
Harford
State
Advanced & Proficient
Percent Passing
Grade 3
89.9%
87.8%
Grade 4
92.7%
89.9%
Grade 5
89.5%
85.3%
Grade 6
87.1%
83.0%
Grade 7
85.2%
76.3%
Grade 8
73.0%
69.3%
Higher Education
Harford Community College (“HCC” or the “College”), founded in 1957, is a comprehensive
two-year institution of higher education addressing the diverse educational needs of Harford County. The
College provides transfer and career programs and continuing education courses. HCC is a medium-size
Associate's College pursuant to the Carnegie Commission Classification and the County's only institution
of higher education.
The College offers 60 unique program options leading to several degrees including an Associate
of Arts, Associate of Sciences, or Associate of Art in Teaching, which are intended to transfer to fouryear degree programs, and the Associate of Applied Sciences degree that leads to immediate
employment. In addition, the Associate of Applied Sciences in Technical/Professional Studies is an
Approved Statewide Program that enables students to combine courses from various disciplines to meet
employment training and retraining requirements. The College offers 23 certificate programs that can
generally be completed within 12-18 months. A selective Honors Program is offered to students, who
meet admissions requirements. The College also offers non-credit certification programs.
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HARFORD COUNTY, MARYLAND
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To assure effectiveness, the College strives to maintain a campus atmosphere conducive to
excellence in learning and teaching. As the only comprehensive public college located in the County,
Harford Community College serves as the coordinator of post-secondary education in Harford County.
A nine-member Board of Trustees governs Harford Community College. Each member of the
Board is appointed by the Governor to a term of five years. A trustee may serve a maximum of two
terms. The Board of Trustees plays an integral role in the College Community including establishing
policy and developing an annual budget.
The College is not only the educational center of the County; it is a cultural and recreational
center as well. A cultural events program and a community theater produce a full series of offerings each
year. The Sports Complex located on the College campus serves adult athletic needs for tournaments,
evening recreational activities, and special events.
More than 7039 full and part-time credit students were enrolled for Fall 2013. Approximately 58
percent of HCC students are female and 42 percent are male. On average, more than 55% of Harford
County residents attending Maryland institutions of higher education at the undergraduate/lower division
level attend Harford Community College. About 25 percent of the students are members of minority
groups. Approximately 37 percent of HCC students attend full-time.
Based on the most recent data, 86% of students are in associate-degree seeking programs; 3% are
in certificate seeking programs, and 11% are non-degree students. Approximately 93 percent of HCC
students are in-county students. Last year, around 25% of students enroll in developmental courses in
English, and/or reading, and/or math.
Public Safety
Sheriff’s Office
Law enforcement responsibilities are shared by the Harford County Sheriff's Office and the
Maryland State Police, with the Sheriff's Office assuming the primary role. In addition, the Sheriff's
Office is the correctional authority for the County. The Sheriff's Office is a full service public safety
agency with 568 employees, and expenditures of $66.9 million for the fiscal year ended June 30, 2013.
The incorporated municipalities of Aberdeen, Bel Air and Havre de Grace maintain separate police
departments within their jurisdictions and a portion of the cost of police protection is reimbursed to the
municipalities by the County.
Department of Emergency Services
The Harford County Department of Emergency Services was created to serve as the home and
focal point for all emergency services within Harford County government. The Department serves as the
liaison to the volunteer fire/rescue and emergency medical services community. This community, led by
the Harford County Volunteer Fire and Emergency Medical Services Association (HCVFEMSA) is
comprised of 1400 volunteer firefighters and EMS personnel serving within 12 independent companies,
operating out of 26 facilities, approximately 26 advanced life support medic units and 123 pieces of
fire/rescue apparatus. All companies operate under the standards, procedures, and guidelines of the
Association. The County provides financial support for some of the operating expenses of the
Association and the companies.
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HARFORD COUNTY, MARYLAND
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The Department serves several other major functions within the emergency services. The
Communications Center serves as the County’s 911 / Public Safety Access Point providing dispatching
services for the fire/rescue and EMS and the county law enforcement agencies. The county wide radio
system is managed by the Department serving the needs of the public safety and public service
communities. The Hazardous Materials Response Team is part of the Department serving with full time
and part-time / on-call personnel. Included in these responsibilities is the Local Emergency Planning
Committee and the SARA Title III and Right to Know programs. The HCVFEMSA Technical Rescue
Team is supported by the Department. Emergency Preparedness management, coordination, and
facilitation is a function of the Department, planning for all natural and man-made disasters as well as
operations of the Emergency Operations Center.
Planning and Zoning
The Department of Planning and Zoning is responsible for the preparation, recommendation and
enforcement of plans and regulations affecting the physical development and growth of Harford County.
Management of the department is provided through a professional administrator/planner supervising a 44member planning and zoning staff.
The County recently updated and adopted its Master Plan and Land Use Element Plan which
follows a slightly different format than previous plans. The Master Plan begins by presenting a profile of
Harford County, ranging from the history of planning in the County to current demographic data. It then
details the relationship between the Land Use Element Plan and the other element plans, and explains the
relationship and influence that various State and regional planning initiatives have on local planning
efforts. Building on these State and regional initiatives, the Plan identifies an overall plan, goal and series
of Guiding Principles. These Guiding Principles form the foundation for the Land Use Element Plan, and
in effect provide Harford County’ s vision for sustainability through growth management and resource
conservation.
This Master Plan guides residential, commercial and industrial growth towards a designated
growth area of the County, known as the Development Envelope. The Development Envelope is an area
defined as the Route 24/924 corridors north to Route 23, and the Interstate 95/Route 40 corridors. The
balance of the County is designated as Agricultural, Rural Residential or Rural Village. The Land Use
Element Plan may be viewed as the core of the Master Plan since it provides the basic strategy that will
allow the County to accommodate residential, commercial, and employment/industrial growth.
The majority of the Element Plans (Natural Resources, Transportation, Historic Preservation and
Priority Preservation Elements) were updated in 2009 and 2010. The Department completed and the
County Council adopted Harford County’s first Bicycle and Pedestrian Master Plan, which analysis
projects and identifies strategies to further improve the transportation network by enhancing the network
for bicyclists and walkers.
The designated growth area allows efficient investment in public facilities, particularly water and
sewer lines, highways, schools and parks. The Development regulations, Capital Improvement Program
and Annual Growth Report implement the Master Plan concept through enhanced monitoring of growth
trends and facility capacity as well as setting the standards for development activity where facilities are
deemed adequate and in the most appropriate locations.
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HARFORD COUNTY, MARYLAND
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Part of the implementation of the Master Plan and Land Use Element occurs through the Zoning
Code and subdivision regulations. These regulations established flexible design standards and
implements standards for landscaping, signs, setbacks, water quality and transfer of development rights.
In addition, the Code provides for a revitalization effort along the U.S. Route 40 corridor in order to
strengthen its economic base, attract new employers, and improve the physical appearance of the
corridor. Changes are already occurring in the corridor with the redevelopment of the former Bata Shoe
Factory site into a mixed-use development of Class A office, residences and retail entitled Waters Edge,
Swan Harbor Village a completely remodeled lifestyle retail/office center near Havre de Grace and a
rebuilt Grocery Store in the Joppatowne Plaza. The U.S. 40 Corridor, in conjunction with neighboring
jurisdictions has been renamed the Chesapeake Science and Security Corridor.
Outside the designated growth area, the County’s goals are to preserve agriculture as a viable
economic activity and to maintain the rural character of the area. The County participates in a number of
State and County preservation programs which have preserved over 45,000 acres to date. These
preservation programs are designed to extinguish development rights and place conservation easements
on properties in perpetuity.
Office of Economic Development
The Office of Economic Development (OED) has programmatic responsibilities for business
retention and expansion; new business attraction and outreach. The office also maintains close
communication with the Department of Defense’s (DOD) premier installation at Aberdeen Proving
Ground (APG) and the three incorporated municipalities. OED offers services for the business
community including: site selection assistance; marketing; film and TV series location support;
workforce development; financing programs and banking relationships; County Fast Track permit process
initiation; and tourism services. The Office’s work plan is directed by the goals and objectives of the
County Executive with advice and counsel from the Economic Development Advisory Board (EDAB).
The EDAB is comprised of persons with complementary experience in business and industry.
Private sector development in Harford County by new and/or expanding companies leased or
purchased over 9.5 million square feet of space from 2009 through 2013. Over 750,000 square feet of
new class A office space has been constructed in the County and Aberdeen Proving Ground (APG) has
added over 2.5 million square feet of office, laboratory, and fabrication shops and warehousing. APG is
considered a DoD megabase with 22,000 employees and is the third largest employer in the State of
Maryland. Over 8,300 government positions have moved to APG and the contractor community that
supports the Federal efforts has also relocated over 8,000 positions to the County. Almost $20 billion in
contracting efforts is anticipated over the next five years through APG. The influx of these jobs has
supported housing sales and expanded retail opportunities in the County.
The Office of Economic Development has developed a robust “Economic Gardening” program to
encourage entrepreneurism and to build and strengthen the entrepreneurial ecosystem. The County is
home to numerous patent holders and seeks to leverage the research and development that is done at both
APG and Ft. Meade. Our goal is to attract those researchers/entrepreneurs to develop products for the
commercial market and to build that industry in our community. A new technology transfer program has
been initiated at the Harford Business Innovation Center (HBIC) to provide opportunities for companies
to engage in R & D work at Aberdeen Proving Ground. There are 7 companies doing business at HBIC
with support services provided by the Tech Transfer Office, the Small Business Technology Development
Center and the Procurement Technical Assistance Program. The GROUNDFLOOR at Harford, a
collaborative work space environment opened in the summer 2013 and provides application development
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HARFORD COUNTY, MARYLAND
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entrepreneurs a co-working opportunity. There are 14 members of The GROUNDFLOOR at Harford.
Business support programming is being offered both at the HBIC and the GROUNDFLOOR at Harford.
The County is home to over 20,000,000 square feet of industrial space with a current vacancy of
2.6%. Two large warehouse buildings are currently under construction in the Perryman area of the
County. In September, Clorox signed a lease and will occupy a 945,720 square foot building for
warehousing and distribution of product. Sephora signed their lease in October for 655,000 square feet
and will be relocating from a 316,000 square foot building in the County, more than doubling in size.
In addition to the new construction activity, Pier One leased an additional 346,820 square foot
existing building, bringing their total leased space in the County to 976,718 square feet. Acer Exhibits
purchased an existing 167,270 square foot vacant industrial building and will relocate from leased space
to accommodate their expansion needs.
Over 1.6 million people visited Harford County in 2012*. Of those visits 768,200 were
overnights with the remainder being day trips. Visitors spent $320 million in local businesses in 2012
showing a 4.5% growth rate over 2011. (*official visitor economic impact data for 2013 is not yet
available). The average daily rate (ADR) in local hotels for 2013 was $84.19 a 2.4% increase over 2012.
Government per diem increased from $83.00 to $93.00 this year. There were over 80,000 page visits to
the County’s tourism website in 2013. Six new hotels have been constructed in the County during the
past five years and two additional hotels are under construction in 2013. Water’s Edge Events Center, a
30,000 square foot event/meeting and conference center, opened in September 2013. The Center is open
for corporate and social events; overlooks the Chesapeake Bay and boasts a world class audio-visual
presentation for use by patrons. Ripken Stadium, Cedar Lane Regional Park and the newly constructed
APGFCU Arena at Harford Community College along with other demand generators offer new and
expanded sporting and entertainment venues to the county. OED and the Office of Tourism are working
with these groups to improve the participant experience, expand tourism offerings to families who are
attending sporting events and to encourage those patrons to spend more dollars while they are in the
county.
The Netflix production of House of Cards is based in Harford County. The Production Company
has leased a 30,000 square foot office building and 125,000 square feet of warehouse space for production
sets and storage. In 2013 House of Cards will have spent over $100 million on production related
expenses with the bulk of that money going to local suppliers and service providers. The Production
employs a crew of over 800 employees; most of the crew is located in Maryland and Harford County.
House of Cards is scheduled to film a third year in Harford County in 2014.
OED along with the Chesapeake Science and Security Corridor (CSSC) continues to address
regional transportation, workforce and educational issues. In 2014, Towson University will open a four
year facility on the Harford Community College campus to prepare students for proper articulation of
programs to complete their four year degree within Harford County. The University Research Park Board
has been formalized to attract advanced degree programs from across the nation in support of the
emergence of technology sectors in this community.
Harford County has transformed into a national research and development center and has
experienced growth in all of its major industry sectors. We have realized growth of defense,
manufacturing, and distribution companies. The growth of APG has added over 99 defense contractor
firms to the business base, manufacturing production has increased and has added over 250 positions and
distribution will add over 1.5 million square feet of commercial building this year. Health care continues
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HARFORD COUNTY, MARYLAND
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to grow with the expansion of the Upper Chesapeake Health System and a new 130,000 square feet
MedStar facility.
Inspections, Licenses and Permits
The Department of Inspections, Licenses and Permits is responsible for the administration and
enforcement of laws and regulations pertaining to licenses, including those relating to building and
construction, plumbing, electrical, HVAC installations, mobile homes, abandoned buildings and animal
control within the County. The Department is also responsible for administering and issuing all County
licenses and plumbing, electrical and HVAC permits, except those specifically required by law to be
issued by another County agency. The Department is composed of five Divisions: Building Services,
Plumbing Services, Electrical Services, Housing Services and Animal Control Services. Additionally, the
Department provides permit, inspection and animal control services through cooperative agreements with
the three County municipalities. This is accomplished through a department staff of 39 personnel.
Additionally, the Director of the Department is charged with the management of the County’s
Fast Track Program. The Fast Track Program is a nationally recognized program which provides
interagency coordination and streamlines the time frame of the building permit process for a business that
locates in the County and has had and will continue to have a positive impact upon the County’s
economy.
Public Works
Harford County Department of Public Works, guided by common sense, accountability and
compassion strives to plan, construct and maintain the infrastructure to deliver a transportation network,
water, wastewater, solid waste management services and public facilities to enhance the quality of life for
all.
The Department of Public Works is responsible for the construction, maintenance and acceptance
of the County roads, bridges and associated structures, traffic safety, water resources management,
stormwater management and sediment control, management and construction of capital projects and
buildings, management of solid waste including landfills and recycling, and water and sewer utilities
which includes water and wastewater treatment plants, pumping stations and water storage tanks.
The Department of Public Works, under the management of the Director of Public Works, is
divided into four major divisions: Water and Sewer, Highways and StormWater Management,
Construction Management, and Environmental Services.
Highways and Water Resources Division
The Highways and Water Resources Division of the Department of Public Works consists of three
bureaus: Bureau of Highways, Bureau of Engineering, and the Bureau of Stormwater Management.
The Bureau of Highways consists of 137 employees and is responsible for the repair, maintenance,
and traffic control of 1,058 miles of County roads, 223 County bridges, over 25,000 signs and 5,510 street
lights. The County is divided into four highway maintenance districts supported by special operations
and traffic groups.
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HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
The Bureau of Engineering consists of 21 employees and is responsible for the design and review
of roads, bridges and drainage structures for both capital projects and developer subdivision projects. The
division routinely performs the engineering management/design of 2-3 major bridge projects per year,
approximately 40 miles of road resurfacing and multiple minor reconstruction, maintenance and
improvement projects. The administration of bonding and permitting development projects, as well as the
County’s Traffic Engineering Section also fall under the responsibilities of this Bureau.
The Bureau of Stormwater Management consists of 11 employees and is responsible for the
requirements of the National Pollution Discharge Elimination System Permit, watershed surveys and
assessments, design and construction of stormwater management retrofits, stream restorations, inspection
for illicit discharges, and public information outreach. They are also responsible for the review and
approval of stormwater management and sediment control construction.
Water and Sewer Division
The Water and Sewer Division is responsible for the operation, maintenance, administration,
planning, and engineering of public water and sewer facilities to service over 43,603 customers in the
County that reside outside the three incorporated municipalities. The Water and Sewer Division has 171
employees.
The Water and Sewer Fund is legally and financially a self-sustaining entity. All costs to provide
water and sewer services to customers are incurred and paid by the users. A usage charge, in an amount
to recoup operating costs for providing services within the County, is billed to users quarterly. Hook-up
charges, assessments, and surcharges are the principal sources of funding for debt service costs.
The water system consists of: a) 12 booster stations; b) 13 water storage tanks, ranging in capacity
from 300,000 to 2,500,000 gallons; c) 683 miles of transmission and distribution lines; and d) three water
treatment plants. The water treatment plants include: a) Perryman well field, containing seven wells
having peak flow of 5.5 MGD and an average flow of 4.5 MGD; b) Havre de Grace water treatment plant
with a capacity of 5.5 MGD; c) Abingdon Water Treatment Plant with a capacity of 20.0 MGD and the
capability of drawing water from either the Susquehanna River or Baltimore City’s Loch Raven
Reservoir.
The County sewage system consists of: a) 54 pumping stations; b) 776 miles of force mains and
laterals; and c) three wastewater treatment plants. Sod Run Wastewater Treatment Plant is the County’s
primary sewage treatment plant. Sod Run has a rated capacity of 20.0 million gallons per day (“MGD”)
with a current average flow of 12.2 MGD with peaks of 28.0 MGD. Other treatment plants include the
Joppatowne Wastewater Treatment Plant, with a rated capacity of 0.95 MGD and the Spring Meadows
Treatment Plant with a rated capacity of 10,000 gallons per day and average flow of 10,000 gallons per
day.
Initial charges for fiscal year 2014 for public water and sewer accessibility are:
Item
Area Connection Charge................
Surcharge.......................................
Water
$ 650
450
Sewer
$ 450
100
The system development fees increase at the rate of 6 percent per year. In addition, all new
customers pay an annual 25-year benefit assessment of $70.00 for water and $70.00 for sewer.
54
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
The County imposes a Biological Nutrient Removal (“BNR”) fee based upon water usage. The
rate for fiscal year 2014 is $0.22 per 1,000 gallons. The rate is re-calculated each year based on total
billable flow. As the billable flow increases due to increased usage, the rate will decrease. By law, the
fee cannot exceed $0.25 per 1,000 gallons. The BNR fee also applies to all liquid waste which is received
from septic haulers. The BNR fee is dedicated to pay the portion of the debt incurred for the construction
of the BNR process at the Sod Run Wastewater Treatment Plant in the amount of approximately $18.7
million.
The County believes these charges will provide sufficient funds to amortize existing and
anticipated new debt for water and sewer projects through the year 2014. Historically, this debt has been
self-liquidating; however, in the event the charges are not sufficient to meet the water and sewer debt
service requirements, the full faith and credit and unlimited taxing power of the County are pledged to the
levy and collection of taxes to provide funds for the payment of principal, premium (if any) and interest
on debt for water and sewer projects.
With respect to operations, all operating rates for water and sewer usage charges will increase
based on any increase in the Consumer Price Index.
The following table shows new customers added to the County water and sewer system in the five
most recent fiscal years:
Fiscal Year
2009
2010
2011
2012
2013
Water Only
0
0
4
10
3
Sewer Only
48
47
18
9
3
Water and Sewer
429
335
189
271
491
Total
477
382
211
290
497
The following chart shows the growth in customer accounts of the water and sewer system and
gallons of water sold for the five most recent fiscal years.
Fiscal Year
2009
2010
2011
2012
2013
55
Customers
42,357
42,605
42,976
43,266
43,603
Gallons of Water Sold
3.35 billion
3.50 billion
3.49 billion
3.37 billion
3.14 billion
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
Division of Environmental Services
The Harford County Department of Public Works, Division of Environmental Services is
responsible for the management and disposal of the solid waste and recyclable material generated within
Harford County, as well as the investigation, remediation and post-closure care of former landfills.
Additionally, in FY2012, the Division was responsible for partnering with the Maryland Department of
Agriculture for the Noxious Weed program and Gypsy Moth spray program. The Division employs 60
County employees.
Of the 230,921 tons of municipal solid waste the County disposed in FY2013, 89,775 tons were
disposed at the Harford Waste to Energy Facility (HWTEF) located within the Edgewood area of
Aberdeen Proving Ground. This facility, which is owned by the Northeast Maryland Waste Disposal
Authority, on behalf of Harford County, burns the waste to create steam which is sold to the Aberdeen
Proving Ground. The facility was constructed with proceeds of bonds issued by the Authority in 1985
and refunded in 1994, along with bonds issued to finance an upgrade of the facility’s air pollution control
system in 2004, and has a maximum continuous 24-hour rating of 360 tons per day. The cost to the
County for refuse disposal is reduced due to the revenue proceeds resulting from steam sales. In the fiscal
year ended June 30, 2012, approximately 50,751 tons of waste was deposited within the landfill cells at
the Harford Waste Disposal Center (HWDC) located in Street, Maryland. Between 2008 and 2010, the
permitting, design and construction of the landfill expansion took longer than anticipated and landfill
space was quickly diminishing. In order to conserve landfill space during this time an agreement with
Baltimore County was developed whereby Harford County delivered trash to Baltimore County in return
for Baltimore County to deliver an amount of trash equal to that which Harford County delivered plus 30
percent after the landfill expansion was constructed. In FY2013, approximately 33,200 tons of Baltimore
County waste was deposited in the HWTEF. Approximately 33,600 tons of ash residue from the HWTEF
was deposited within the existing cells of the HWDC, and approximately 18,600 tons of ash residue was
delivered to Baltimore City’s landfill. In FY2013, a $68 per ton tipping fee applied to all commercial
accounts delivering waste to the HWDC or HWTEF. This rate increased to $70 per ton in FY2014.
Approximately 55 percent of the municipal solid waste stream generated within Harford County
during Calendar Year 2011 was recycled. In FY2013, Harford County currently contracts with Recycle
America to dispose of its single stream recyclables. Harford County loads the material onto contractor
trucks and Recycle America transports and disposes the material at no cost to the County. All other
recyclable products (i.e. computers and monitors, scrap metal, used clothing, etc.) are trucked to recycling
vendors at no cost to the County. The County does receive revenue for scrap metal based on market
index pricing.
Harford County also receives and processes yard waste at the HWDC. Grass clippings and leaves
are turned into compost and brush/limbs are turned into mulch. Bulk quantities of mulch and compost are
sold at $10 per cubic yard. In FY2013, the County processed over 42,300 tons of yard waste.
The costs of solid waste management are partially offset by the revenues generated from the
tipping fee, sale of recyclables, steam sales, and mulch/compost sales, as these fees are deposited within
the Solid Waste Fund. The balance of the solid waste management costs are subsidized by the General
Fund.
Additionally, the County budgets funds annually for the closure and post-closure activities of the
HWDC. The County has completed remedial activities at the closed Tollgate Landfill. A landfill gas
system was installed in fiscal year 1993, a final cap was constructed over the landfill in fiscal year 1996,
56
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
and a remediation systems upgrade for the groundwater treatment system was completed in 1999.
Harford County, along with other federal, state and municipal governmental agencies and private sector
businesses entered into an Administrative Consent Order with the United States Environmental Protection
Agency in 1998 which provided remediation for the privately owned Bush Valley Landfill. Construction
of a final landfill cap and a landfill gas control system has been completed in accordance with the
Administrative Consent Order. The County also has undertaken remedial activity at other closed
County-owned landfills within its jurisdiction. The County, in its five year Capital Program (see “Capital
Requirements and Debt Matters, Capital Requirements, Capital Projects Model” herein), has budgeted
during the five fiscal years ending June 30, 2014 approximately $14.3 million to cover closure and postclosure care involving solid waste landfills.
The Noxious Weed Control program is a jointly funded program supported by both Harford
County and the Maryland Department of Agriculture (whenever State funding is available) which was
created to eradicate and control noxious weeds including Johnsongrass, Shattercane and Canada Thistle.
Services are provided to State agencies with property within the County as well as to the private farming
industry.
The Gypsy Moth spray program includes annual egg surveys to delineate areas with high gypsy
moth infestation, with subsequent select spray applications.
Division of Construction Management
The Division of Construction Management is made up of two major organizations – the Bureau of
Capital Projects Management (CP) with 8 employees and the Bureau of Construction Inspection (BCI)
with 23 employees. The Division is responsible to:
1. (CP) As required by Sections 16-25 and 41-26 of the County Code, manage the planning,
design, and construction of County Capital facility and building projects for various County
Departments, to include Administration, Community Services, Parks & Recreation, the Harford
County Sheriff’s Office, and the Harford County Public Library.
2. (CP) Provide construction inspection for County Capital facility and building projects.
3. (BCI) Provide construction management and inspection for projects to construct or repair
County roads and bridges, as well as some storm drains, water lines, sewer lines, and pumping
station facilities.
4. (BCI) Provide construction and acceptance inspection for facilities constructed by developers
to become County-owned infrastructure, to include roads, bridges, water lines, sewer lines and
storm drain facilities for residential subdivisions and for commercial developments.
5. (BCI) As required by Chapter 214 of the County Code, provide inspection and enforcement of
erosion and sediment control measures, under delegated authority from the Maryland Department
of the Environment.
Parks and Recreation
The Department of Parks and Recreation provides many quality of life enhancements for all
segments of Harford County’s population. It develops, operates and maintains a wide variety of active
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HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
and passive facilities while working with 23 separate Recreation Councils at a grass roots level to identify
and address the expressed leisure needs of the citizenry.
During the recent years, the Department has increased its inventory of parkland, while at the
same time, balancing the need for active recreation with land preservation and environmental
stewardship. Harford County has a blend of state-of-the-art, active recreation facilities including
multigenerational centers such as the William N. McFaul Activities Center, Havre de Grace Activity
Center and Veronica “Roni” Chenowith Activity Center; a joint center in Norrisville with Harford County
Public Library, the Edgewood Recreation and Community Center as well as outdoor facilities including
the Cedar Land Regional Sports Complex and synthetic turf fields at parks in Bel Air and Fallston.
Passive parks include Swan Harbor and Oakington Farms (800 acres) overlooking the Chesapeake Bay,
Heavenly Waters Park (700 acres) Edgeley Grove Farm (282 acres), and the Ma and Pa Heritage Corridor
which interconnects five County parks in and around Town of Bel Air.
The Department actively utilizes and maintains over 4,320 acres of parkland, encompassing 74
County Parks and 24 municipal facilities. An arrangement with the Harford County School System
makes available another 1,700 acres of school property and buildings for public recreation usage on a
priority basis.
The Department of Parks and Recreation is administered by a full time director with a full time
staff of 100 and hundreds of part time activity leaders and independent contractors. Additionally, the
local volunteer Recreation Councils raise in excess of $8 million annually in support of sports and
recreation programs and community activities.
Community Services
The Department of Community Services develops implements and coordinates programs, which
meet the wide and varying human services needs of the County’s citizens. The Department works toward
preserving County families by providing services, by referring citizens to appropriate helping agencies,
and by supporting programs and legislation which stabilize the family unit. The Department also
develops and maintains close working relationships with other county, state, and private agencies and
supports a wide variety of non-profit organizations by providing grant funding.
The Office of Aging, Harford Transit, Community Development Division, Grant-In-Aid Program,
the Office of Drug Control Policy, Mediation Program, Commission on Disabilities, Volunteer
Connection, Commission for Women, the Rideshare Program, Kids C.A.N. Mentoring Program, the
Office of Human Relations, Local Management Board and the Cultural Arts Board are services within the
Department.
Procurement
The Department of Procurement is responsible for contracting for the purchase of all supplies and
services (including capital projects and consultant services) required by County agencies, and for
providing for the purchase, sale or lease of real property (including easements and rights-of-way to
support capital project construction and maintenance), as well as management and oversight of an
outsourced fleet maintenance facility. The 16 employees are supervised by a full-time Director, who also
serves as secretary to the seven-member Board of Estimates that reviews and approves all contracts
exceeding $50,000 in value for construction, $25,000 for consultant contracts and all purchases, sales or
leases of real property.
58
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
Housing
The Housing Agency offers economic opportunities to families of all income ranges. Programs
include rental assistance, renter protection through Livability Code enforcement, first-time homebuyer,
housing preservation, foreclosure prevention, economic mobility, family self-sufficiency, and financial
literacy.
The Housing Agency injects more than 7 million dollars annually into the economy through their
HUD program of subsidizing low income residents’ rent. The Housing Agency recognizes that
neighborhoods are mini economies and works diligently with the Federal government, State government,
business community, and nonprofits to support our neighborhood.
Library
Harford County Public Library has eleven branches located throughout the county and two
outreach vehicles: Rolling Reader, providing services to pre-K through school-aged children, and Silver
Reader, serving the senior community of Harford County. The Library also provides services to the
Harford County Detention Center.
The Library owns nearly 1 million items and customers borrowed more than 4.1 million items in
fiscal year 2013. Virtual visits to the Library website totaled 10.5 million for the same time period and
Library classes, workshops and programs were enjoyed by over 197,000 customers.
Customers have access to the Library 24/7 through its website, HCPLonline.org. The website
offers customers the ability to search the Library catalog and reserve items online; review their accounts;
download eBooks, eMusic, eAudiobooks, and eFilms; access over 50 databases; and receive tutoring and
homework help services. Award winning Little Leapers was launched this year and is an innovative and
first of its kind STEM (science, technology, engineering and math) resource for children ages birth to 5.
Little Leapers kits use age appropriate books, toys and games to foster and develop pre- and early literacy
skills and an interest in science. Customers have access to over 350 public computers throughout the
Library system and every branch offers free wireless Internet access. The Abingdon, Bel Air, Edgewood
and Jarrettsville branches offer drive-thru window service.
The Library Board of Trustees consists of nine members and two ex-officio members (one from
the County Council and one Student Liaison). The Board is appointed by the County Executive and
confirmed by the County Council to overlapping five-year terms. The Board of Trustees represents all
areas of the county. Its duties are established by State and County law and include: establishing and
operating a free library; setting library policy; advising in the preparation of and approval of the library
budget; and accounting for, control, and supervise the spending of all public funds received by the
library.
Other Infrastructure
Cultural, Historical and Tourist Attractions
The County’s location between Washington, Baltimore, and Philadelphia, places the cultural
attractions of three cities within 1½ hours drive. These cities offer a wide variety of theaters, museums,
entertainments, and historical and natural places of interest. During various times of the year, a number
59
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
of seasonal fairs and festivals are held around the County. The famed Ladew Topiary Gardens offer a
wealth of flowers in bloom and life-sized foxhunt, birds of paradise and many other unique topiary forms.
Hospital and Medical Care
University of Maryland Upper Chesapeake Health (UM UCH) is a community based, not for
profit system located in Harford County, Maryland and dedicated to maintaining and improving the health
of the people in its communities through an integrated health delivery system that provides the highest
quality of care to all. In late 2013, Upper Chesapeake Health formally merged into the University of
Maryland Medical System in order to continue its commitment to the growing northeast Maryland area
with expanded clinical services, programs and facilities, and physician recruitment.
UM UCH owns and operates the following health care entities:
• University of Maryland Harford Memorial Hospital
• University of Maryland Upper Chesapeake Medical Center
• The Upper Chesapeake Health Foundation
• The Patricia D. and M. Scot Kaufman Cancer Center
• The Senator Bob Hooper House
University of Maryland Upper Chesapeake Medical Center (UM UCMC), located in Bel Air, is a
50-acre campus that continues to grow to meet the needs of the community by providing state-of-the-art
services for both inpatients and outpatients. UM UCMC is recognized nationally for its quality and safety
especially in the areas of cardiology, pulmonary and stroke, general surgery and pediatric emergency
medicine. In October 2013, UM UCMC opened the Patricia D. and M. Scot Kaufman Cancer Center
which offers multidisciplinary care where specialists in medical, surgical, and radiation oncology meet
with patients in a single visit. The Cancer Center’s affiliation with the University of Maryland Marlene
and Stewart Greenebaum Cancer Center means local access to clinical trials, the highest quality radiation
oncology program, genetic counseling, and a joint Tumor Board, which meets to discuss individual cases.
UM UCMC has received accreditations for excellence in the areas of stroke and cancer care,
being designated by MIEMMS as a Primary Acute Stroke Center and from the American College of
Surgeons as a Comprehensive Cancer Center, respectively. In 2013, the Intensive Care Unit was awarded
the silver-level Beacon Award for Excellence by the American Association of Critical Care Nurses and
the hospital itself received the D.C. and Maryland Breastfeeding Coalitions’ Regional BreastfeedingFriendly Workplace Gold Level Award.
University of Maryland Harford Memorial Hospital (UM HMH) is located in Havre de Grace and
has a 100-plus year history as a full-service community hospital serving eastern Harford County and
Western Cecil County. In addition to providing general medical and surgical services, UM HMH offers
an inpatient behavioral health center, Sleep Disorder Center, Center for Wound Care, and a Bariatric
Surgery Center. In early 2014, the hospital won the Distinguished Achievement Award in Patient Safety
Innovation for its methodology to decrease door-to-needle time in stroke patients.
Some of the accolades and recognition that both of the UM UCH hospitals shared during the past
year include the Joint Commission’s 2013 Top Performers on Key Quality Measures, Delmarva
Foundation Excellence Award for Quality Improvement, and the American Heart Association/American
Stroke Association’s Get With the Guidelines-Stroke Gold Plus Quality Achievement Award.
60
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
University of Maryland Upper Chesapeake Health employs over 3,500 team members, making it
the largest non-governmental employer in Harford County.
Utilities
Electric and Gas
Baltimore Gas and Electric Company (“BGE”) supplies electricity to much of the County’s
geographic area, which includes approximately 101,000 electrical customers. Susquehanna Electric
Company (hydro-electric generation system at Conowingo dam located on the Susquehanna River)
provides electric power service to the Pennsylvania, New Jersey, and Maryland Power Grid. Delmarva
Power provides residential and business electric service to 21 percent of the County’s geographic area.
BGE supplies natural gas to approximately 40,000 gas customers and its pipeline supplies are
supplemented by its own liquefied natural gas plant and by underground storage of liquid propane.
Telephone
Several companies provide local telephone service to the County. Verizon is the largest provider
in the area, with almost 4 million access lines statewide. Verizon has invested more than $608 million in
its wireline communications networks and information technology infrastructure in MD in 2011. Verizon
provides County residents and businesses with fiber-optic facilities, ISDN telephone lines and DSL
(Digital Subscriber Line) Service, and long-distance service.
Transportation
Railroad
The County is transected by three main line railroads. CSX Corporation provides daily freight
and mainline service in the County. Passenger service is available on the Amtrak trains. The stations at
Aberdeen and Edgewood provide for commuter service. The Maryland Rail Commuter service provides
daily service at two stations in the County connecting with Baltimore and Washington, D.C.
Highways
The County is served by an extensive system of highways. Interstate 95, which passes directly
through the southern portion of the County, is the main artery along the eastern seaboard, connecting
Boston, New York, Philadelphia, Baltimore, Washington, D.C., Richmond and Miami. U.S. Route 1, a
four-lane highway that passes through the County, also links Baltimore, Washington, D. C. and
Philadelphia. U.S. Route 40, a four-lane highway also runs through the County connecting Philadelphia,
Wilmington, Baltimore and the cities of Columbus, Indianapolis, St. Louis, Kansas City, Denver, and
other cities of the western United States.
Truck Service
The County is within overnight truck access of over one-third of the nation’s population and
manufacturing establishments. The following table presents truck service line haul times to major market
centers in the Nation, in days, from the County.
61
HARFORD COUNTY, MARYLAND
GOVERNMENT AND INFRASTRUCTURE
To
Atlanta .....................
Boston .....................
Buffalo ....................
Charlotte ..................
Chicago ...................
Cincinnati ................
Cleveland ................
Detroit .....................
Days from
County
2
1
1
2
2
2
1
2
To
Los Angeles .............
New York ................
Philadelphia .............
Pittsburgh.................
Richmond ................
St. Louis...................
Washington, D.C. ....
Wilmington ..............
Days from
County
6
1
1
1
1
2
1
1
Bus Service
The County is served by commercial bus routes to Baltimore, Philadelphia and Washington, D.C.
Regularly scheduled round trips are made daily by Greyhound. Daily commuter bus service is available
to Baltimore by the Maryland Department of Transportation, Mass Transit Administration – two routes
from Bel Air to Baltimore and three routes from Havre de Grace to Baltimore.
Harford County Transit Services provides public and specialized transportation services in the
County. Services include eight public bus routes operating Monday through Friday in the central and
southern areas of the County, as well as door-to-door service for the elderly and disabled persons
throughout the entire County.
Water Transportation
The Port of Baltimore is approximately 25 highway miles from the County. The Port is open
throughout the year and is served by a channel 50 feet deep and 800 feet wide. The Port offers modern
and efficient facilities for cargo handling of both exporters and importers. During 2012, 36.7 million tons
in foreign commerce (imports and exports), valued at f$59.3 billion were handled by the Port. The Port
of Baltimore ranked 11th of 36 USA ports in handling of foreign tonnage and 9th in dollar value of the caro
handled.
Air Service
Baltimore Washington Thurgood Marshall International Airport, situated on 3,596 acres, is about
35 highway miles southwest of Harford County, 10 miles south of Baltimore, and 32 miles north of
Washington, D.C. The facility is owned by the Maryland Department of Transportation and managed by
its Maryland Aviation Administration. According to the Maryland Aviation Administration, 22.68
million passengers and more than 237.6 million pounds of freight flowed through Baltimore Washington
International Airport in fiscal year 2012. Baltimore Washington International’s modern freight facilities
include jet all-cargo flights serving Baltimore/Washington area. The airport ranks 22nd in passenger
traffic in the nation.
Philadelphia International Airport (PHL) is situated on 2,370 acres, the Airport consists of seven
terminals (A-West, A-East, B, C, D, E and F) and four runways (9R/27L – 10,500 ft; 9L-27R – 9,500 ft;
17/35 – 6,500 ft; 8/26 – 5,000 ft.). In 2012, PHL accommodated 30.3 million passengers, including 4.3
million international passengers, and handled 443,236 aircraft takeoffs and landings. Thirty airlines offer
nearly 600 daily departures to 124 cities, including 38 international destinations. Nearly 399,822 tons of
cargo and mail are moved annually by commercial airlines and a half-dozen cargo carriers.
62
HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
V.
Demography and Economy
Population
Population levels within the County, according to census records and the County, have been
growing at a rate greater than that of the State of Maryland (“the State”) according to the last census. The
County expects this trend to continue as more APG related jobs arrive. A considerable amount of land
formerly used for agriculture is as yet undeveloped. The County, through its Department of Planning and
Zoning, is overseeing the development of this land. The County’s population density has increased from
497 persons per square mile in 2000 to 556 persons per square mile in 2010.
The following is a table indicating historical population levels and rates of growth for the County,
the Baltimore Region (Anne Arundel, Baltimore, Carroll, Harford and Howard Counties and Baltimore
City) and the State:
Population
Fiscal
Harford
Baltimore
% Change
Year
County
Region
% Change Maryland % Change
26.5%
4,216,933
7.5%
1980
145,930
2,173,989
5.0%
1990
182,132
24.8%
2,348,219
8.0%
4,781,468 13.4%
2000
218,914
20.2%
2,512,557
7.0%
5,296,647 10.8%
2010
244,826
11.8%
2,662,691
6.0%
5,773,552
9.0%
2011
246,651
0.7%
2,685,278
0.8%
5,839,572
1.1%
2012
248,622
0.8%
2,704,554
0.7%
5,884,563
0.8%
Source: US Census Bureau
Migration
Harford County experienced a positive net migration in 2010 according to migration data from
the Maryland Department in Planning.(1) Playing a prominent role in the increase of net migration is
people moving in from the North Central region of the United States. As in past years, the majority of
the in migration comes from the Baltimore region, particularly Baltimore County and Baltimore City.
The Federal Citizen Movement category shows a net gain for the 26th consecutive year. According to the
Maryland Department of Planning this component of migration primarily tracks the movement of
Department of Defense personal and their dependents to and from overseas assignments but can include
migration to and from Puerto Rico, the U.S. Virgin Islands and other U.S. possessions.
Period
2006
2007
2008
2009
2010
Interstate
(1,567)
(2,700)
(1,739)
595
653
Net Migration
Federal Citizen
Intrastate
Movement
136
2,603
73
1,983
217
1,602
46
(737)
20
(211)
Total
1,172
(644)
80
(96)
462
Source: Prepared by the Maryland Department of Planning, based on summary data prepared by the
Internal Revenue Service using the IRS Individual Master File (IMF) of all Form 1040, 1040EA, 1040NP,
1040PR, 1040VI & 1040SS tax returns, December 2011.
(1)
Source data is the Internal Revenue Service migration data from geocoded tax returns matched on social
security numbers of the mail filer, and ZIP code address in consecutive years. If there is a change in address
from year one to year two, then there is a move, with the number of people associated with the move equal to
the number of claimed exemptions.
HARFORD COUNTY, MARYLAND
63
DEMOGRAPHY AND ECONOMY
Age Distribution
Significant increases in the 45 to 64 and 65 and over age groups occurred during the 2000’s.
Increases in these age groups have been a major factor in the growth in the number of households. The
elderly population in the County has almost quadrupled since 1970. The 65 and over age group grew
from 6,100 in 1970 to 30,564 in 2010.
Age
Under 5
5-17
18-44
45-64
Over 65
Median Age
Percent of Population
Under 18 Years
65 Years or older
1970
11,126
32,396
46,491
19,233
6,132
24.6
37.7%
5.3%
Population
1980
1990
10,150
14,761
35,472
34,021
64,168
83,068
26,769
35,248
9,371
15,034
28.9
32.1
31.3%
6.4%
2000
15,776
45,189
83,755
51,710
22,160
36.2
26.8%
8.3%
27.9%
10.1%
2010
14,982
45,428
82,428
71,424
30,564
39.4
24.7%
12.5%
Percent Change
1990 2000 2010
45.4% 6.9% -5.0%
-4.1% 32.8% 0.5%
29.5% 0.8% -1.6%
31.7% 46.7% 38.1%
60.4% 47.4% 37.9%
11.1% 12.8% 8.8%
6.9% 25.0% -0.9%
60.4% 47.4% 37.9%
Source: U.S. Department of Commerce, Bureau of the Census
Employment
The County’s top 5 employers in 2013 were the US. Army Aberdeen Proving Ground, Harford
County Public Schools, Upper Chesapeake Health, Harford County Government and Rite Aid MidAtlantic Customer Support Center. Employment for Harford County for 2012 is presented below
indicating that the total employment for Harford County increased by 4.2 percent between 2011 and 2012.
64
HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
County Employment by Categories
Calendar Year
2011
2010
2009
2008
17,262
7,757
461
9,044
Government Sector-Total
Federal Government
State Government
Local Government
18,167
8,657
454
9,056
19,622
10,097
480
9,045
2012
21,481
11,978
467
9,036
22,170
12,614
574
8,982
Private Sector Total - All Industries
65,382
62,030
60,967
61,728
64,528
Goods Producing
Natural Resources & Mining
Construction
Manufacturing
222
6,294
4,753
202
5,262
4,372
194
5,252
4,422
262
5,121
4,396
274
5,134
4,504
18,590
524
3,440
10,279
9,780
8,775
2,725
18,044
571
3,166
9,524
9,651
8,616
2,622
17,567
530
3,061
9,145
9,731
8,458
2,607
18,264
396
2,953
9,237
9,811
8,658
2,628
19,158
343
2,855
10,027
10,515
8,972
2,745
-
-
-
2
1
82,644
80,197
80,589
83,209
86,698
Service Providing
Trade, Transporation, & Utilities
Information
Financial Activates
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services
Unclassified
Total Employment
_____________
Source: Maryland Department of Labor Licensing and Regulation, Annual Reports on Employment and
Payrolls.
The following table presents statistics, by employee’s place of residence, for the County,
Baltimore Region, and State.
Calendar
Year
2008
2009
2010
2011
2012
Civilian Labor Force and Unemployment Rate by Place of Residence
Harford County
Baltimore Region
Maryland
Labor
Unemployment
Labor
Unemployment
Labor
Unemployment
Force
Rate
Force
Rate
Force
Rate
134,147
4.1%
1,417,341
4.5%
3,021,716
4.3%
134,814
7.5%
1,424,085
7.8%
3,038,182
7.4%
136,154
8.0%
1,438,797
8.3%
3,071,745
7.8%
137,384
7.4%
1,451,837
7.7%
3,092,754
7.3%
139,513
7.0%
1,473,691
7.2%
3,122,629
6.8%
_____________
Source: Maryland Department of Labor, Licensing and Regulation, Civilian Labor Force, Employment
and Unemployment by Place of Residence Report.
HARFORD COUNTY, MARYLAND
65
DEMOGRAPHY AND ECONOMY
Income
Personal Income
Total personal income of County residents exceeded $12.2 billion during 2011. Comparative
income statistics for the County, Baltimore Region, State, and United States are provided below:
Total Personal Income (current dollars)
Calendar
Year
2007
$
2008
2009
2010
2011
Harford County
Personal
%
Change
Income
10,628
5.9%
11,191
5.3%
11,075
-1.0%
11,516
4.0%
12,159
5.6%
(in millions of dollars)
Baltimore
Maryland
Metropolitan Region
Personal
%
Personal
%
Change
Income
Change
Income
$
122,784
5.1%
$
264,798
4.9%
128,345
4.5%
277,793
4.9%
125,667
-2.1%
271,729
-2.2%
130,028
3.5%
281,305
3.5%
137,129
5.5%
295,236
5.0%
United States
Personal
%
Change
Income
$ 11,900,562
5.7%
12,451,660
4.6%
11,852,715
-4.8%
12,308,496
3.8%
12,949,905
5.2%
___________________
Source: Data extracts prepared by the Maryland Department of Planning, Planning Data Services, from
U.S. Bureau of Economic Analysis (BEA), May 2012.
Per Capita Income
The population growth of the County has been accompanied by an increase in the income level of
its residents, as indicated in the following table:
Per Capita Income (current dollars)
Calendar
Year
2007
2008
2009
2010
2011
$
Harford County
Personal
%
Income
Change
43,982
5.6%
46,093
4.8%
45,446 -1.4%
46,968
3.3%
49,329
5.0%
Baltimore
Metropolitan Region
Personal
%
Income
Change
$
46,844
4.7%
48,749
4.1%
47,448 -2.7%
48,760
2.8%
51,153
4.9%
$
Maryland
Personal
%
Income
Change
46,839
4.4% $
48,864
4.3%
47,419 -3.0%
48,621
2.5%
50,656
4.2%
United States
Personal
%
Income
Change
39,506
4.7%
40,947
3.6%
38,637 -5.6%
39,791
3.0%
41,560
4.4%
____________
Source: Data extracts prepared by the Maryland Department of Planning, Planning Data Services, from
U.S. Bureau of Economic Analysis (BEA), May 2012.
66
HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
Median Income
Household median income means that half of all families are below this point and half are above.
The median income for Harford County has increased since 1990 following the same trend as that of the
Baltimore Region and State as a whole. According to the 2011 census, the median income for the County
was $77,095.
Median Income
Calendar
Year
2007 $
2008
2009
2010
2011
Harford
County
72,092
76,620
75,364
71,848
77,095
%
Baltimore
%
Personal
%
Change
Region Change
Maryland Change
4.1% $ 71,753
4.9% $ 67,989
4.5%
6.3%
73,769
2.8%
70,482
3.7%
-1.6%
73,022
-1.0%
69,193
-1.8%
-4.7%
72,421
-0.8%
68,933
-0.4%
1.7%
7.3%
73,743
1.8%
70,075
________________
Source: U.S. Census Bureau, 1989 & 1999, and the Maryland Department of Planning, Planning
Data Services, May 2012.
Sales and Use Taxes
Retail sales, as measured by retail sales tax collection, registered an increase in three out of the
last five fiscal years. The following table presents a comparison for the County, Baltimore Region and
State:
Sales and Use Taxes
(in thousands of dollars)
Fiscal
Year
2008
2009
2010
2011
2012
$
Harford
County
111,357
114,790
119,409
116,582
124,624
%
Baltimore
Change
Region
5.3% $ 1,547,891
3.1%
1,587,916
4.0%
1,553,641
-2.4%
1,591,231
6.9%
1,709,619
%
Change
8.4%
2.6%
-2.2%
2.4%
7.4%
State of
Maryland
$ 3,769,013
3,874,079
3,776,140
3,908,824
4,095,706
%
Change
8.6%
2.8%
-2.5%
3.5%
4.8%
________________
Source: Comptroller of the Treasury, State of Maryland
The Comptroller’s Office for the State collected approximately $124.6 million in gross sales and
use tax receipts from Harford County establishments in 2012. The food and beverage group produced the
largest amount of revenue ($39.4 million, 31.6%) followed by the taxable general merchandise group
($28.2 million, 22.6%). The building and industrial supplies category produced the third largest amount
($20.8 million, 16.7%).
HARFORD COUNTY, MARYLAND
67
DEMOGRAPHY AND ECONOMY
Housing
Total Housing Units by Units in Structure
1990
1-unit, detached
1-unit, attached
2 units
3 or 4 units
5 to 9 units
10 to 19 units
20 or more units
Mobile home or trailer (1)
Other (2)
Total Housing Units
41,685
10,030
1,094
1,725
2,947
4,097
929
3,534
405
66,446
% of
Total
62.7%
15.1%
1.6%
2.6%
4.4%
6.2%
1.4%
5.3%
0.6%
100.0%
2000
51,187
15,107
804
1,796
3,498
5,592
1,926
3,218
18
83,146
% of
Total
61.6%
18.2%
1.0%
2.2%
4.2%
6.7%
2.3%
3.9%
0.0%
100.0%
2010
56,556
20,096
1,436
1,244
3,637
7,177
2,105
3,445
95,696
% of
Total
59.1%
21.0%
1.5%
1.3%
3.8%
7.5%
2.2%
3.6%
0.0%
100.0%
2012
58,826
19,092
1,066
1,648
3,586
6,978
2,035
3,683
96,914
% of
Total
61.5%
20.0%
1.1%
1.7%
3.7%
7.3%
2.1%
3.8%
0.0%
101.3%
____________
Source: U.S. Department of Commerce, Bureau of the Census, 2011 American Community Survey.
(1)
Data for this category are not fully comparable for 1990 and 2000 due to change in question wording
for “Mobile home or trailer” in 1990 to “Mobile home” in 2000.
(2)
Data for this category are not fully comparable for 1990 and 2000 due to change in question wording
from “Other” in 1990 to “Boat, RV, van, etc.” in 2000.
Estimated Market Value of Owner-Occupied
Housing Units as of December 2009
Under $50,000
$50,000-99,999
$100,000-149,999
$150,000-199,999
$200,000-299,999
$300,000-499,999
$500,000-999,999
$1,000,000 and over
Total
# of Units
2,402
1,625
3,886
8,479
23,530
24,378
5,865
565
70,730
% of Total
3.4%
2.3%
5.5%
12.0%
33.3%
34.5%
8.3%
0.8%
100.0%
__________
Source: U.S. Census Bureau, 2011 American Community Survey.
According to the Maryland Department of Assessments and Taxation, the average sale price of an
improved owner occupied house in the County increased from $262,000 in fiscal year 2011 to $270,000
in fiscal year 2012, an increase of 3.1 percent. This average sale price ranks the County’s housing as the
fourth most expensive in the Baltimore Region and 12th in the State. The following table compares the
average sale value of improved, owner-occupied housing in the County over the last five fiscal years to
that of the Baltimore Region and the State.
68
HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
Median Sale Price of Owner-Occupied Properties
Fiscal year
Maryland
Anne Arundel
Baltimore
Carroll
Harford
Howard
Baltimore City
2008
$ 293,000
329,000
249,900
300,000
260,000
391,262
151,000
2009
$ 275,000
300,000
227,243
289,877
255,000
361,000
151,860
2010
$ 287,250
310,000
230,000
280,000
274,925
391,445
165,000
2011
$ 262,000
300,000
214,900
285,000
256,195
397,500
95,000
2012
$ 270,000
309,000
215,000
280,000
257,170
400,000
138,280
% Change
2012 to 2008 to
2011
2012
4.5%
8.5%
3.3%
6.5%
1.2%
16.2%
-3.4%
7.1%
7.8%
1.1%
8.4%
-2.2%
8.7%
9.2%
________
Source: U.S. Census Bureau.
Construction Activity
Construction activity from calendar year 2008 through 2012 as illustrated by the number of
building permits issued and their estimated cost, is set forth in the following table, which reflects building
activity throughout the County.
HARFORD COUNTY, MARYLAND
69
DEMOGRAPHY AND ECONOMY
Building Permits
Calendar Years 2008-2012
(Value in Millions)
Permit Type
Residential
One Family-Detached
One Family-Attached
Two Family
Three or Four Family
Five or More Family
Multi-Family
Mobile Homes
Other Shelter
Sub-Total
Non-Residential
Industrial Buildings
Commercial Buildings
Warehouse/Storage
Store, Mercantile
Office, Bank
Service Station
Amusement, Recreation
Hotel/Motel
Parking Garage
Public Utility
Religious Buildings
Hospitals, Institutions
Educational Buildings
Utility Buildings
Group Home
Other
Sub-Total
Additions, Alterations,
and Repairs
Residential
Non-residential
Sub-Total
Grand Total
Issued
2008
Value
Issued
2009
Value
Issued
2010
Value
Issued
2011
Value
2012
Value
182 $
276
0
0
0
86
15
0
559 $
48,232
38,783
10,900
1,017
377
99,309
224 $ 52,329
226
26,008
0
0
0
207
22,198
4
133
2,427
0
661 $ 103,095
228 $
300
3
0
0
34
5
0
570 $
51,425
31,768
395
4,345
349
2,103
90,385
235 $
198
0
0
0
238
6
0
677 $
58,005
23,645
25,752
482
2,337
110,221
310 $ 74,120
232
28,920
2
300
0
0
4,840
45
221
3
0
3,069
592 $ 111,470
6 $
9
8
0
12
2
8
4
0
8
0
2
12
0
0
2
73 $
325
10,408
14,251
9,550
1,000
8,752
28,755
20,731
4,500
78,700
3,020
179,991
1 $
1,300
8
12,083
0
0
9
40,889
1
223
2
338
0
0
2
31,305
0
4
7,750
4
26,650
0
0
1
1,500
32 $ 122,039
1 $
6
1
0
7
0
2
0
0
1
1
0
0
0
0
2
21 $
1,700
17,400
2,225
36,394
1,162
6,000
120
10,530
75,531
1
6
1
0
4
0
1
0
1
10
2
0
1
0
0
3
30 $
246
4,740
200
15,784
400
5,200
226,860
2,300
250
2,716
258,696
0 $
10
13,942
2,100
1
0
6
12,585
2
1,250
1
146
1
9,500
1
500
1
1,000
1
700
4
45,675
2
21,600
0
0
1
500
31 $ 109,498
203 $
193
396 $
5,489
23,814
29,303
5,054
15,438
20,492
217 $
125
342 $
5,776
15,264
21,041
192
161
353 $
4,899
12,061
16,960
1,028 $
308,603
988 $ 245,626
933 $
186,956
1,060 $
385,877
149 $
146
295 $
________________
Source: Baltimore Metropolitan Council, Department of the Treasury, Harford County, Maryland
70
Issued
HARFORD COUNTY, MARYLAND
183 $
166
349 $
5,026
12,266
17,292
972 $ 238,260
DEMOGRAPHY AND ECONOMY
Residential Construction Activity
Residential construction activity has slowed from the pace of the 2000’s when the County was
averaging 1,390 permits per year. The County had 677 permits in 2011 and 592 permits in 2012. New
residential construction activity peaked in calendar year 2005 with a total of 2,137 permits with a value of
$343,368,941. In 2012, the on going weakness in the housing market pushed the residential permits back
to 592 permits. That is down by 68% compared to a high of 2,137 residential permits issued in 2005.
Residential housing should increase in fiscal year 2013 in Harford County due to the economy getting
stronger.
Non-residential Construction Activity
Non-residential construction activity decreased in the 2010’s from its pace of the 2000’s. The
average issuance during the 2010’s was 26 permits per year compared to 66 permits per year in the 2000’s
and the value of the construction activity increased from an average of $78.4 million in the 2000’s from
an average of $167.5 million in the 2010’s. This increase was due to several large manufacturing
facilities being constructed and a public utility building being built.
In 2012, a total of 31 non-residential building permits were issued. The number of permits
increased 48% from 2010 and the value of the activity increased by 45%.
Economic Development
Harford County has transformed into a national research and development center and has
experienced growth in all of its major industry sectors. The County has realized growth of defense,
manufacturing, and distribution companies. The growth of APG has added over 99 defense contractor
firms to the business base, manufacturing production has increased and has added over 250 positions and
distribution will add over 1.5 million square feet of commercial building this year. Health care continues
to grow with the expansion of the Upper Chesapeake Health System and a new 130,000 square feet
MedStar facility. This growth is due to the County’s strategic location in the Mid-Atlantic region on the
I-95 corridor and its close proximity to Baltimore (Port of Baltimore), Washington, D.C. and
Philadelphia/Wilmington and home to Aberdeen Proving Ground. Harford County has the infrastructure,
land availability and the workforce to service all industry sectors and the County offers a competitive
business environment, fast track permitting, an excellent workforce, and an outstanding quality of life.
The Office of Economic Development has developed a robust “Economic Gardening” program to
encourage entrepreneurism and to build and strengthen the entrepreneurial ecosystem. The County is
home to numerous patent holders and seeks to leverage the research and development that is done at both
APG and Ft. Meade. Our goal is to attract those researchers/entrepreneurs to develop products for the
commercial market and to build that industry in our community. APG continues to show strong funding
with over $13.6 billion committed to future research and development projects. This collaborative effort
is pushing the innovation process for individuals to work on their ideas and develop them into a business
through Harford’s Entrepreneurs Edge program. The Office of Economic Development (OED)
recognizes that the greatest job creation growth will come from these entrepreneurs as they are supported
by teaming with community business resources.
The successful implementation of the largest BRAC transformation in the country was at
Aberdeen Proving Ground. The installation is now one of the largest research and development
installations in the U.S. Army resulting in the addition of nearly 99 new defense companies and 8,000
contractor employees to the County. The work at APG in communication and electronics research and
HARFORD COUNTY, MARYLAND
71
DEMOGRAPHY AND ECONOMY
development, cyber security, public health and chemical and biological threat detection and mitigation is
providing the resources to create a major hub of innovation in these disciplines.
The County and the Office of Economic Development have begun a strategic planning process
for the next potential BRAC and are carefully monitoring impacts of sequestration. The team is also
reviewing the potential impacts and alignments of mission activity that could occur for the Department of
Defense prior to the next BRAC round. Parallel to this effort, the County has established a University
Research Park Committee, in an effort to provide the highest levels of research programs that align with
APG and the surrounding technology industries. Additionally, the Harford Metro Area Network (HMAN)
is a proactive approach to provide the County superior Internet connectivity to accommodate the
technology sector and residential growth. Finally, the push for transportation improvements and transit
initiatives addresses mobility of a regional workforce. All of these approaches align the County for more
“BRAC-like” growth.
The Office of Economic Development established a robust program of business retention and
outreach for resident companies. In addition to ongoing communication with business and industry, the
office holds an annual Business Appreciation Week and each spring visits 100 businesses in 90 days.
This allows the staff to remain engaged in the issues facing the companies and also promotes the
“Everyday Hero Program”, Harford’s business leaders. The Office of Economic Development combines
its efforts with the Harford County Chamber of Commerce to produce the annual Harford Awards
program which recognizes industry leaders in the County. Harford County is business friendly and the
staff will help any business, large or small, to navigate permits, loan programs or any other projects that
are a benefit to businesses.
The County’s manufacturing and distribution sector remains strong and continues to grow. The
County is home to over 20,000,000 square feet of industrial space with a current vacancy of 2.6%. Two
large warehouse buildings are currently under construction in the Perryman area of the County. In
September, Clorox signed a lease and will occupy a 945,720 square foot building for warehousing and
distribution of product. Sephora signed their lease in October for 655,000 square feet and will be
relocating from a 316,000 square foot building in the County, more than doubling in size. This move also
secures Sephora’s dot-com fulfillment center will remain in the county for the next 13 years.
In addition to the new construction activity, Pier One leased an additional 346,820 square foot
existing building, bringing their total leased space in the County to 976,718 square feet. Acer Exhibits
purchased an existing 167,270 square foot vacant industrial building and will relocate from leased space
to accommodate their expansion needs.
Additionally, Harford County’s Office of Economic Development worked with the Maryland
Film Office to secure locations for the filming of the new Netflix series, House of Cards. Approximately
125,000 square feet of soundstages and warehouse space was leased to the production company, plus an
additional 30,000 square feet of office space. The economic impact to Maryland is $140 million, much of
it in Harford County, and more than 2,000 Maryland businesses provided products and support to the
group. Netflix has committed to a third season of House of Cards, so Harford County and Maryland will
continue to benefit in 2014. This makes the sixth film/television project that Harford County has secured.
Others include: Tuck Everlasting, Red Dragon, August Rush, Young Americans and From Within.
During the period between 2009 and 2013, OED was involved in over 207 new or expanding
business projects resulting in over 9.5 million square feet of leased space, over $610 million in new
investment and the creation of over 4,872 new jobs in the County. In addition, employment on APG has
increased by 8,300 positions and the job growth in the defense contractor community is estimated to be
about 10,000 additional positions by 2015. The majority of projects represent significant investments and
72
HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
job growth potential in the research and development, manufacturing, engineering, services and
transportation sectors. Major projects during this period include the following:
2009-2013 New and Expanding Companies (Select List)
Company
2009
A3 Technologies
Laser based technologies
Candlewood Inn & Suites
Lodging Services
L-3 Technologies
Defense
LaQuinta Edgewood
Lodging Services
MITRE Corporation
Engineering Services
Motile Robotics
Robotics Engineering
National Gypsum
Wallboard Manufacturing
PPM, Inc.
Technical Trade School
Raytheon (GATE)
Defense
Saubel’s Market
Grocer
Wegmans
Gourmet Grocer
Activity
Expansion
2010
Bob’s Discount Furniture
Distribution, Furniture
Chesapeake Testing Services, Inc.
Defense, Soldier Support
Kroff Materials Reprocessing
Recycling & Merchant Wholesaler
ManTech International
IT Services
Northrop Grumman
Electronic Surveillance Products
Saks 5th Avenue
Retail Distribution
SciTech Services
Engineering Environmental Technical Services
Sephora
Cosmetics Retail Sales Distribution Center
Smiths Detection
Defense Instrument Manufacturer
Tilley Chemical
Investment
New Jobs Created
$100,000
22
New
$4,311,500
--
New
$9,375,000*
400
New
$2,600,000
20
Expansion
$6,791,875*
150
New
$1,462,500*
27
New
$16,000,000
25
New
--
25
New
$32,100,000
194
New
$4,130,000
70
New
$24,600,000
600
New
$63,450,000
198
New
$3,300,000
20
$600,000
8
$4,500,000
50
Expansion
$3,434,000*
135
Expansion
$20,500,000
--
Expansion
$5,000,000
--
Expansion
$1,000,000
46
Expansion
Expansion
$500,000
$2,600,000
215
--
Expansion
New
HARFORD COUNTY, MARYLAND
73
DEMOGRAPHY AND ECONOMY
Chemical & Allied Products Wholesaler
Vision Technologies
Computer System Design Services
2011
Alcore
Honeycomb Composite Manufacturer
Automated Coatings
Powder Coating Manufacturer
Bizerba Label Solutions
Label Manufacturer
Boeing Company
Aerospace Technology
Fallston Wal-Mart
Retail
Klein’s ShopRite
Grocer
Kohl’s
Distribution Center
Mars Grocery
Grocer
Northeastern Supply
Plumbing & HVAC Products
SAIC
IT Services
WAVE
Ceiling Tile Grid Manufacturer
Yerman Witman Gaines & Conklin Realty
Real Estate
2012
Cytec
Epoxy Laminated Materials Mfg
JC Penney
Retail Department Store
Lorien Health
Skilled Nursing & Rehabilitation Center
The Mill of Black Horse
Agricultural Retail
Nisbets
Catering Equipment Distribution
Paramount Die
Wire drawing & extrusion Die Mfg
Scientific Research Corporation
Advanced Engineering Services
Smiths Detection
Screening Technologies, Defense
Thymly Products
Specialized Food & Bakery Blend Mfg
74
New
--
60
Expansion
--
40
Expansion
$660,000
5
Expansion
$3,000,000
5
Expansion
--
100
Expansion
$7,373,000
450
Expansion
$5,000,000
5
New
$90,000,000
1,200
New
$1,250,000
--
Expansion
$2,100,000
--
Expansion
--
200
Expansion
$4,062,500*
80
Expansion
--
60
Expansion
$8,000,000
6
New
$9,000,000
101
New
$9,500,000
--
Expansion
$1,200,000
5
New
$1,800,000
25
Expansion
$2,200,000
5
Expansion
Expansion
New
HARFORD COUNTY, MARYLAND
-$1,500,000
$500,000
33
100
7
DEMOGRAPHY AND ECONOMY
TIC Gums
Food Ingredients Manufacturing
Expansion
$6,900,000
2013
Acer Exhibits & Events
Exhibit Manufacturer
Expansion
$3,000,000
ACET
Defense Related
New
-BSC America
Auto Auction Services
Expansion
$20,000,000
Clorox
Distribution Facility
New
$71,000,000*
Frank J. Goettner Construction, Inc.
Construction Services
New
-Harford Community College
Higher Education
Expansion
$17,000,000
Harford Community College
Higher Education
Expansion
$22,000,000
H.P. White Laboratory
Professional Services
Expansion
$4,000,000
Kenco
Transportation & Warehousing
Expansion
$10,800,000
Lifoam
Styrofoam & Cold Pack Manufacturing
Expansion
-Pier One Imports
Distribution Home Furnishings
Expansion
$4,500,000
Sephora
Cosmetics Retail Sales Distribution Center
Expansion
$50,000,000*
Sigmatech
Management, Technical, Training & E-Learning New
-U.S. Lumber
Building Materials Distribution
New
$7,400,000
Zenith Global Logistics
Specialized Furniture Distribution
New
-_________________
Source: Office of Economic Development, Harford County, Maryland 2013
*estimated
23
-27
150
-25
--50
-30
--
25
-20
Development Projects
New Corporate Office/Business Parks are currently under construction or proposed in Harford
County. Existing Office Parks are positioned and ready to complete build-out of their remaining proposed
office space. Leasing activity is underway at these properties; and to date, the total new, proposed and
under construction Class A office space is 5.4 million square feet.
HARFORD COUNTY, MARYLAND
75
DEMOGRAPHY AND ECONOMY
Proposed/Existing &
Total square feet buildout
Status
266,000
95,200 sf.
(1st building complete)
1,330
Box Hill Corporate Park
Tenants: Leidos (formerly SAIC) ,
Social Security Administration,
Morris & Ritchie Associates,
Katzen Medical Association and
more
315,605+ sf. additional
office proposed &
450,000 sf. retail
Total Park – 970,000
Existing Park with 4
additional proposed
buildings w/approvals
& permits
1,250
Fieldside Commons Corporate Park
500,000
120,000 sf.
(1 building complete)
2,500
Total Proposed Build-Out
2 - 3,000,000
610,088 sf. complete
10,000
540,000 sf.
Proposed
5,400
899,000
3 buildings complete
totaling 266,500 sf.
4,495
180,000
1st 67,000 sf.
building complete
Total Park - 500,000 sf. +
and one remaining lot for
future development
4 Midrise Buildings &
2 Single Story
Buildings
Office Park
Aberdeen Corporate Park
G.A.T.E.
Tenants: CACI, Engility,
Raytheon, Boeing, SAIC
expansion, General Dynamics and
14 other tenants
James Run Corporate Campus
North Gate Business Park
Tenants: MITRE, Northrop
Grumman, DSA
Hickory Ridge Technology Campus
STG Inc., MSA Inc.
Water’s Edge Corporate Campus
Major Tenants: ManTech,
Bowhead, Booz Allen Hamilton,
SURVICE Engineering, SafeNet
and more
st
Potential
New Jobs
900
2,500
New Retail
Harford County made a significant investment into expanding and diversifying the County retail
base. The expanded alignment reflects changing consumer tastes and an increase in household income.
Carrabba’s Italian Grill, Home2 Suites by Hilton, Charlotte Russe, Shoe Department Encore, Verizon
Wireless, Saxon’s XO, Aldi Supermarket, Royal Farms, Menchies Frozen Yogurt, Gino’s Chicken and
Burgers, Starbucks, and other locally owned restaurants and small retail operations have opened or
expanded in the County. New retail opportunities also exist at many of the office parks in the above
table.
Regional and National Marketing Efforts
OED, along with the Maryland Department of Business and Economic Development and the
Economic Alliance of Greater Baltimore participated in recent corporate calling missions to New York,
New Jersey, Nevada, Texas, and California. The goal of these mission trips was to solicit new industry
and to understand the business ecosystem in the areas visited. Similarities were found and new best
practices were brought to the region that will enhance efforts to build a diverse economy.
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The Office of Economic Development continues to see an increase in its marketing efforts.
Regional and national advertising efforts have included Site Selection, NAIOP, I-95 Magazine, Baltimore
Business Journal, Maryland Daily Record and Business Xpansion. Additional marketing emphasis has
been placed on electronic media utilizing radio and social media to promote local business. OED
enhanced its annual “Shop Local” advertising campaign through print, social media and radio advertising.
In addition, press releases regarding new, expanding and award-winning businesses were released, giving
record coverage in local and national media.
Harford County’s Growth Report 2013 was published in The Daily Record on June 21, 2013. The
annual publication summarizes Economic Development activities and programs for the 2012/2013 fiscal
year.
A highlight of the Office of Economic Development’s 2013 marketing strategy included adding
social media tools and continued outreach to resident businesses through “Biz-Bytes” (a digital newsletter
distributed to over 1,400 subscribers) along with updates of Economic Development’s website –
www.harfordbusiness.org. More importantly the site includes enhanced information on commercial,
office and industrial sites, interactive maps, rental rates, demographic data, employment and population
forecasts, marketing and financial tools and provides a comprehensive business resource guide.
OED’s staff and marketing efforts continue to be recognized by organizations such as the
Maryland Daily Record and the Maryland Tourism Council (MTC). In October of 2013 the Director of
Economic Development, James C. Richardson, was awarded the Innovator of the Year Award by the
Maryland Daily Record; Deputy Director, Denise Carnaggio, was awarded as one of Maryland’s Top 100
Women by the Maryland Daily Record in the spring of 2013; and Harford County Tourism Manager,
Wini Roche, was presented the top MTC award for Tourism Person of the Year at their annual tourism
conference in November 2013.
In the Fall of 2013, Economic Development launched a new marketing and economic
development initiative titled “Harford FIRST”. The program is still in development, but the goal of the
program is to inform young people of the opportunities to work in manufacturing and distribution
industries in Harford County. Promotional materials were distributed to over 2,000 students at a Career
Fair sponsored by Harford County Public Schools in October 2013.
Expanding Economic Development Programs
Enterprise Zones
Harford County has two State-designated Enterprise Zones encompassing over 12,800 acres of
land. The purpose of the Enterprise Zone program is to promote business retention and expansion,
encourage job growth and develop under-utilized land and buildings by offering economic incentives.
Businesses may apply for local real property tax credits and/or state income tax credits based on capital
investment and job creation.
1. The Edgewood/Joppa Enterprise Zone is comprised of 3,900 acres. Since 2006 an estimated
$30 million has been invested in land, new building starts, renovations and equipment. In
addition, an estimated 530 new jobs were created. OED is currently in the process of reapplying and expanding this zone in 2014.
2. The Greater Aberdeen/Havre de Grace Enterprise Zone, comprised of 8,900 acres. Since
2006 an estimated $118 million has been invested in building starts, renovations and
equipment and an estimated 887 new jobs were created.
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DEMOGRAPHY AND ECONOMY
The Edgewood/Joppa and Greater Aberdeen/Havre de Grace Enterprise Zones are vital to
economic development in Harford County and in particular the ongoing revitalization in the Chesapeake
Science and Security Corridor. Both new construction and expanding facilities result in significant capital
expenditure and job creation.
Financing Programs
The Harford County Office of Economic Development offers financial support and business
development services to businesses of all sizes, working with the business community to identify sources
of funds and obtain traditional financing, venture capital and local, state and federal loans. Loan funds
provide financing options for leasehold improvements, acquisition of real property, construction,
renovation and rehabilitation, machinery and equipment and working capital.
The Economic
Development Opportunity Fund (EDOF) is capitalized with $ 2.2 million in county and state funds to
provide direct low, fixed interest rate financing to Harford County businesses. The Harford County
Council provides support of the program with resolutions approving the loan transactions in each district.
Since 1997, the County has made twenty-seven loans for a total loan amount of $ 2.203 million. This
program supported the creation of over 303 new full-time jobs and leveraged over $36.5 million in private
capital investment into the County. EDOF loans continue to be in demand supported by strong cash flow
and collateral. The following companies are active loans in the EDOF portfolio:
103 E. Jarrettsville Road, LLC
Brite Star Business Products
Creative Journeys Learning Centers
Chesapeake Defense Services, Inc.
Bizerba Label Solutions, Inc.
B.A.F.S., Inc. DBA The Mill of Bel Air
Independent Can Company
The Financing Program includes one-on-one counseling and company visitations to assist with
business plan development, packaging loan requests, marketing plans, support in obtaining feasibility and
demographic studies, and certifications at the state and federal levels. M&T Bank offers a discount loan
rate to qualifying businesses to refurbish or develop commercial property and this private loan can be
leveraged with the Economic Development Opportunity Fund.
Harford County is working cooperatively with the state and Anne Arundel County Economic
Development Corporation to offer video lottery terminal (VOLT) loans to Harford County companies.
These are funds realized from the various casinos that are new to the state.
The Office of Economic Development provides financial and in-kind support to various
organizations focused on assisting companies to grow and prosper. These organizations include the
Harford County and Maryland Small Business Technology Development Center, the Maryland
Procurement and Technology Assistance Program, the U. S. Small Business Administration, and Harford
Community College. Since 2004, thirteen Harford County businesses and individuals have been
recognized by the U. S. Small Business Administration as outstanding champions and successful
entrepreneurs.
The increase in the Department of Defense’s research and development programs has resulted in
the need for Harford County businesses to gain access to additional tools and information related to
government contracting and procurement opportunities. To meet that need, the Financing Programs now
provide funding to the Maryland Procurement and Technology Assistance Program (PTAP) for a
dedicated procurement counselor. The counselor is available to meet with businesses by appointment in
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HARFORD COUNTY, MARYLAND
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the Harford Business Innovation Center (HBIC) three miles from APG. Counseling is available for
government contracting inquiries at the county, state and federal levels.
Industrial Revenue Bonds
Industrial Revenue Bonds (“IRB”) offer tax-exempt financing for manufacturers and 501(c) (3)
organizations for acquisition of land, buildings, machinery and equipment. Bonds are sold to lending
institutions, institutional investors and/or the public. The IRB purchaser determines whether the interest
rate is fixed or floating, while Federal law limits the terms, amount and uses of the financing. Taxexempt IRBs are issued at rates lower than conventional sources because the interest rate paid on the
bonds is exempt from both federal and Maryland income tax. Nominal issuance and processing fees are
charged and then reinvested into the OED Economic Development Opportunities Fund.
In 2009, Harford County, Aberdeen Proving Ground and Picerne Military Housing, LLC dba
Corvias Military Living cooperated on the sale of a $53.6 million conduit taxable IRB to finance the onbase redevelopment of family housing. This issuance represents a non-recurring obligation. This nonrecurring debt issue requires no County payment support for this bond. The direct benefit to Harford
County is that the $68 million (80%) in development costs will be spent on local, small and
disadvantaged businesses. Bond fees paid to Harford County are placed into the Economic Development
Opportunities Fund. In 2012 that amounted to $86,980.74. Since the establishment of the IRB program,
additional conduit fees totaling $122,765.00 have been collected.
In 2010, Harford County received a $15,096,000 allocation from the U. S. Treasury for Recovery
Zone Facility Bonds under the American Recovery and Reinvestment Act. The County approved up to a
$7.8 million RZFB for The Boulevard at Box Hill, to develop eighteen acres of a total 85-acre parcel for a
144,000 sf. Wegmans Food Store. Wegmans became the first anchor business to open in the project
planned to be Harford County’s premier retail and entertainment destination. The Wegmans store
represents approximately $12.345 million in total investment, with 550 total jobs and a $12 million
annual payroll.
Leveraging the initial $7.8 million RZFB from the County, in September of 2012 the Boulevard
celebrated the opening of an 85,000 sf. JC Penney store in the developing Abingdon shopping center.
Other stores include Wegmans, Joe’s Crab Shack, Panera Bread, Old Navy, Wild Birds Unlimited, Spa
On The Boulevard, Lemon N Ginger Asian Restaurant and PNC Bank in the developing shopping center.
Workforce Development
Access to a skilled work force is a key factor to a company’s decision to relocate or expand.
Workforce development is a partnership among government, higher education, K-12 schools and industry
seeking to foster a productive, skilled and competitive workforce, including high tech research and
development personnel and employees with science, technology, engineering and mathematical training.
OED works in cooperation with the Harford County Public Schools in local high schools, middle schools
and technical/professional schools throughout the county. The Office of Economic Development,
Harford Community College, Harford County Public Schools and the Harford Chamber of Commerce
created the Futures11 program. Futures11 is a program designed to prepare 11th grade students for their
post–secondary and future career options. These partnerships will help facilitate current curriculums as
well as charting course for training programs needed in the future due to BRAC growth and economic
demands.
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DEMOGRAPHY AND ECONOMY
In order to assist resident businesses, OED offers the Workforce Technical Training Grant
(WFTTG). Awarded on a competitive basis, these grants provide incentives to local companies to
accelerate the delivery of technical training for employees. In OED’s fiscal year 2013-2014 budget,
$100,000 was included for matching technical training grants. Awarded on a competitive basis, these
grants provide incentives to local companies to accelerate the delivery of technical training for
employees. Since the inception of the training grants in 1998, more than $ $1,397,408 has been approved
for more than 242 businesses. Proceeds from this fund are also used in securing State assistance in
business location, retention, or expansion projects. In addition, OED continues to inform businesses of
other state and federal training grants that are available.
These matching grants are capped at $1,000 per employee per fiscal year and are not to exceed
$20,000 per year for each employer. The matching funds are used to offset the cost of training for
intermediate and advanced technical skills that will result in higher pay grade or job retention. Since
2009 the WFTTG allocated $540,478 which provided technical training to 2,093 individuals spread
across more than 118 Harford County companies.
Future of Aberdeen Proving Ground
Aberdeen Proving Ground (APG), located in Harford County, is home to 11 major commands
and 90 diverse tenants. APG is one of the most diversified military installations in the U.S. and the work
that is conducted on this complex touches every aspect of U.S. military operations. Home to the world’s
leaders in research, development, testing and evaluation of materiel, APG will continue to have a
profound impact on overseas military operations and Homeland Security; even in austere budget times.
There are three key areas of technical expertise and are described by APG leadership as “communities of
excellence” that continue to expand at Aberdeen Proving Ground:
•
•
•
Public Health and Medical Research, Test and Evaluation, Research and Development
Chemical, Biological, Radiological, Nuclear and Explosives (TEAM CBRNE)
Command, Control, Communication, Computer, Intelligence, Surveillance and
Reconnaissance (Team C4ISR)
During the implementation of BRAC 2005 almost 30% of incoming jobs arrived as vacancies,
providing the opportunity for the regional workforce which has historically commuted out of northeastern
Maryland, to compete for these positions at APG. The arrival of these technical and professional jobs,
85% of which require a security clearance, all require U.S. citizenship, and most require a minimum of a
bachelor’s degree, provide opportunity for the local workforce to live and work within their own
communities. As the existing workforce reaches a retirement spike in the next three to five years, a ready
and able workforce will be critical to mission continuity even though the uncertainty of the Defense
Department budgets looms. The critical research and development will continue and some DOD cuts
may cause loss of some of the early R&D money. The diverse tenants on APG serve the missions for
joint DOD activities. The diversity of the Center for Disease Control, Federal Drug Administration, FBI,
and Homeland Security insures more stability for the overall mission at APG. Harford County along with
work at APG is growing and competing in the knowledge economy. The major factors to compete in this
new economy are specialized skill sets, lifelong learning and an eye toward the global economy.
Completion of the BRAC 2005 implementation process was officially recognized on September
15, 2011. The result was more than $1.3 billion dollars in on-installation construction, completed under
budget and on schedule. The transition of DoD personnel from Ft. Monmouth, NJ to Aberdeen Proving
Ground, MD realized a transfer rate of 69%, unprecedented in any previous round of BRAC. The MRICD
Complex at more than $400 million dollars and 526,000 square feet and will open in 2014.
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HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
Maryland’s three-year running as the nation’s leader in public education has been instrumental in
sustaining the mission’s workforce. A comprehensive STEM initiative is underway in northeastern
Maryland with full engagement of government, industry and academia. The Northeastern Maryland
Higher Education Advisory Board was established by the State to advocate, coordinate and expand
regional higher education in northeastern Maryland. In an effort to attract additional students and
programs the Higher Education Conference Center at HEAT was renamed to the University Center this
past fall.
Aberdeen Proving Ground serves as the region’s key workforce center and the State of
Maryland’s third largest economic powerhouse, growing from $3 billion to more than $20 billion in
revenue post-BRAC. OED has worked with the DoD contractor community to assist them in their
relocation or start-up operations. Prior to BRAC, Harford County was already the home of offices for
Battelle, Booz Allen Hamilton, SAIC, CSC, SafeNet, SURVICE Engineering, RTR Technologies, A-3
and other defense related companies.
In early December 2013, over 1,000 business representatives attended the second installationwide Advanced Planning Brief for Industry focused on working with small business to support the
warfighter.
Over the five year period more than 99 NEW defense contractors have secured office space in
Harford County.
AASKI
Elbit
MITRE Corporation
ACE Electronics
ACET
Engineering Solutions
Products, ESP
Modus Operandi
Motile Robotics
Alion Science
Environics USA, Inc.
ARINC
Envision
EOIR Technologies
Man Machine Sys
Assess.
Shonborn-Becker
Systems
Sigmatech
SmartFix Corporation
SOTERA Defense Sol
SRC
EPS
Manufacturers Svcs
Assoc
Avon Protection
Fastenal
MTEQ
STG
Blue Canopy
Future Skies
Galaxy Global
Netcentric
Strategic Alliance
SURVICE Metrology
GDIT
Nexagen
NextGen Federal
Systems
Symbolic
Noblis
Systek
Northrop Grumman
Systems Technology
OPTEC Inc.
TAPE
ORISE
TASC
OSI Guidance Sys
Potomac Fusion
Telcordia Technologies,
Inc
QED Systems
Telford Aviation
QinetQ
Telos
Quantum Research
Tiburon
ARTI
Avenge, Inc.
Boeing Co.
Bowhead Technical
BRTRC
General Dynamics C4 Sys
Burrow Management
Harris Corporation
CACI
Hotfoot Management
CGI Federal
Chesapeake Testing Srvs.
CTS – Coherent
Technical Systems
Inmarsat
Data Intelligence
Lear Siegler/URS
Data Matrix Solutions
LinQuest
Data Tactics
Lockhead Martin Global
Defense Contract Mgmt
Lockwood Group
Janus Research Group, Inc.
JRAD, Inc.
Kalman
Netorian
HARFORD COUNTY, MARYLAND
SRI International
Syracuse Research
Center
81
DEMOGRAPHY AND ECONOMY
DRC-Dynamics Research
Corporation
MacB Enterprise
R4 Technologies
TRAX
ManTech
Melvin May Assoc.
Rockwell Collins
Roundtable Defense
U.S. Falcon
DRS
DSA
Mission 1st Group
RSC2
ViaSat
Sabre Systems
WYLE
DSCI
VetTCorp
Federal Contracting in Harford County
In an effort to attain a more comprehensive view of the federal monies and contracts that are
coming out of APG, Harford County Government has procured the software system- FEDMINE.US.
This is a real time database that pulls from many Department of Defense newsfeeds to make a one stop
shop for Defense contract information in addition to other federal, state, and local contracts. The Office of
Economic Development has established a protocol to track contract activity, review results, and develop
action plans to expand contract awards for Harford County companies.
During 2013, more than $13.6 billion dollars in contract obligations were awarded by APG, with
more than 36,000 individual contract actions; of which nearly 20% were awarded to small business. This
December, APG held their Advance Planning Briefing for Industry (APBI) which offered insight into
future contracting opportunities. During the course of this three-day event, APG commands and
directorates presented more than 180 potential contracts in the research and development area worth an
estimated $19.5 billion over the next five years. Pentagon acquisition leaders were in attendance and
outlined the work and goals that needed to be met by business. There remains additional construction
opportunities on Post which include the Public Health Command Hedquarters Building, Joint Land
Attack Cruise Missile Detection Elevated Netted Sensor System (JLENS) as well as additional MILCON
projects to be released in Q1 and Q2 of 2014.
APG Procurement Power
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HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
According to FEDMINE.US, in FY13 (October 1, 2012 – September 30, 2013) there were more
than 115 Harford County based companies awarded Army contracts where the work was also performed
in Harford County that amounted in a total of over $340 million. In 2013 a total of 1,043 contractors
were awarded contracts through Aberdeen Proving Ground amounting to over one billion dollars. In
2012, over $660 million was awarded to Harford County companies by the Army. In 2011, over $440
million was awarded to Harford County companies by the Army.
The EAGLE II Functional Category 1 Service Delivery contract was awarded out of Aberdeen
Proving Ground to thirty different companies. This contract is not to exceed $22 billion over the seven
year period of performance. Companies that were awarded are in: Virginia, Florida, Maryland, DC,
Michigan, and California. This contract will provide a full range of services and solution in support of
developing, implementing, and maintaining technology to support the Department of Homeland Security
mission and business functions across the entire lifecycle of a program. There are two contracts: one is
for small businesses exclusively and the other is an unrestricted contract.
Chesapeake Science and Security Corridor/Office of Economic Development
The Chesapeake Science and Security Corridor (CSSC) was initiated in December 2005 and
formalized as a Consortium in April 2007 as a coordinated, multi-jurisdictional planning and marketing
approach to address BRAC growth. With federal support via the Office of Economic Adjustment, the
Consortium has fostered unparalleled regional coordination as a BRAC growth community in support of
Aberdeen Proving Ground (APG). Post-BRAC implementation, the Consortium is comprised of 50
strategic partners in government, industry, non-profit and education collectively focused on sustaining the
mission at Aberdeen Proving Ground and supporting the economic vitality of the region. With APG now
the third largest work center in the State by personnel, the region's focus remains consistent with the three
original priorities: transportation, land use and infrastructure, workforce development and education.
Issues in these areas are coordinated via communication, information, and planning strategies throughout
the northeast corridor in support of workforce mobility from Baltimore to Wilmington. A regional rail
work group consists of 25 transportation agencies, municipalities and government officials from
Maryland and Delaware to address the gap in commuter service here in the region, enhance service
schedules and look at strategies to further promote mass transit for a growing workforce.
More recently, CSSC has supported initiatives to look at accelerating talent development across
APG's tenant organizations, identifying higher education partnerships in R & D, and exploring feasibility
of a university research park (URP) in support of further university collaborations and the opportunity for
localized commercialization of technology. The significant mission growth and continued contractor tail
expansion in Harford County as a result of BRAC keeps a significant mission in front of the CSSC to
continue its work as an important regional entity. The regional BRAC Office located in Aberdeen
coordinates defense-related events and disseminates both the CSSC Defense Daily, capturing contracting
and defense news, and the quarterly CSSC Asset, which spotlights partnerships among government,
industry and education inside and outside the gate. CSSC's sustainability efforts ensure continuity and
collaboration following a successful BRAC 2005 implementation affording a strong quality of life for
those who live, work, and recreate in the growing defense community.
Harford County must advocate at all levels of government for transportation improvements that
are critical for workforce mobility. More importantly a continued commitment to transportation initiatives
positions APG and Maryland for the next “BRAC-like” round and the ability to accommodate further
consolidations complementing the Army's RDT&E epicenter just 90 minutes from the Nation's capitol.
HARFORD COUNTY, MARYLAND
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DEMOGRAPHY AND ECONOMY
The Office of Economic Development and the Chesapeake Science and Security Corridor Office
are working on the following joint initiatives:
•
Exploring feasibility of a university research park to support APG and higher education
collaboration and to promote discovery and development
•
Participation on the newly established Northeastern Maryland Higher Education Advisory Board
per legislative action
•
Sustain the Science, Technology, Engineering & Math (STEM) Forum initiative K-20
(Kindergarten through four-year college)
•
Established a community transportation office on the installation promoting alternatives to single
occupancy vehicles (SOV)
•
Expand the entrepreneurial environment and develop Angel and Venture Capital networks
•
Support business development and tech transfer opportunities to grow local and state business
base
•
Maintain quality of life through continued support to health and welfare, public safety and the
non-profit community
•
Continue regional collaboration for mission sustainability
Army Alliance, Inc.
The Army Alliance, Inc. is a 501(c) (4) chartered organization created to work with county, state
and federal officials to develop and promote continued economic viability of Aberdeen Proving Ground.
This group is charged with working with senior Army and Department of Defense officials and the
County and State officials and the congressional delegation in making sure that Aberdeen Proving Ground
remains a major element in the Army’s long-term strategy. The success of the public outreach of the
Army Alliance was realized with the decisions made by the BRAC Commission in adding 8,300 positions
in the community.
OED continues to provide grant funding to support educational efforts spearheaded by the Army
Alliance on Capitol Hill and in Annapolis.
A strategic plan continues to be updated by the Alliance that outlines a number of proactive
initiatives that look at attracting additional related Army activities as well as other federal research, test
and evaluation activities from across the Nation unrelated to BRAC. The Alliance is already working on
the next “BRAC-like” round anticipated in 2015 or 2017.
Harford’s Entrepreneurs Edge
Harford’s Entrepreneurs Edge program was launched by the Office of Economic Development in
September 2012. The program is designed to promote economic gardening by connecting potential and
active entrepreneurs with the resources needed to take an idea from concept to reality. The effort is led by
OED in partnership with the Harford County Public Library, Harford County Chamber of Commerce,
Harford Community College, Harford Business Innovation Center and the Maryland Small Business
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HARFORD COUNTY, MARYLAND
DEMOGRAPHY AND ECONOMY
Technology Development Center. The partnership is a comprehensive business network which provides
local entrepreneurs access to the information, training, counseling and peer-to-peer relationships needed
to establish and grow a successful business.
Technology Development
The recent CSSC study on APG’s Accelerating University Talent and Research and Development
Partnerships at APG completed by Battelle continues to validate OED has been on the right course. Some
of the original target technology sectors are being further defined and include:
•
•
•
•
•
System of Systems Network development that goes to the promise of C4ISR full life cycle
development
Cyber-security talent connections and applied research collaborations
Systems Biology tying together ongoing efforts in genomics and proteomics
High Performance Computing for modeling
Incubating material science solutions
Specific recommendations are being implemented to help foster defense diversification, identify
target technology sectors, expand higher education resources, and guide infrastructure planning and
development.
Harford Business Innovation Center (HBIC)
The Harford Business Innovation Center (HBIC) was created through the Office of Economic
Development in 2010. The goal of this new entity is to manage an expanded business incubation program
and to operate new business incubator space for companies involved in technology. The facility boasts
9,000 sq. ft. of leased space in the Riverside Business Park. This new and expanded role has enhanced
the County’s ability to grow local companies and graduate them from incubation status to stand alone
companies. It is also serving an immediate need with accommodating landing parties who need short
term space to do business with their government customers as part of the BRAC transition. Ten
companies have been incubated in the HBIC with seven currently occupying the facility. The HBIC
works in partnership with the newly opened GROUNDFLOOR at Harford.
The GROUNDFLOOR at Harford
This is a co-working center for cyber security and application development. Styled as an open
and co-working space, programming is geared to the cyber development specialist and the tech start up
entrepreneur. The GROUNDFLOOR also entered into a memorandum of understanding with two other
regional centers, Betamore in Baltimore City and BWTECH at UMBC.
University Center
The 152-acre HEAT Center property is central to Harford County’s efforts to cultivate
technology industry growth and higher education programming that supports both industry and APG.
The former Higher Education and Conference Center at HEAT was renamed this fall in a new campaign
and is referred to as the University Center. This new branding effort was kicked off to capture the
essence of the facility as an academic facility meeting the needs of advance degree work in the region.
The University Center provides facilities and support services in a campus-like setting, from wetlaboratory space to high-speed Internet service and video conference capabilities. Harford County has an
on-site economic development office at the Center to further service the needs of the technology
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DEMOGRAPHY AND ECONOMY
businesses, which is currently used by the Northeastern Maryland Technology Council. Battelle’s
Eastern Science and Technology (BEST) Center remains the largest tenant after purchasing 90 acres from
the State of Maryland.
In 2010 a Facilities Plan that has looked at the expansion of the 35,000 sq. ft. building on site has
been completed. There is currently a Northeastern Region Higher Education Advisory Board that has
been established by the Maryland State Legislature that will include looking at the higher education needs
at this facility as part of the overall needs of higher education in the region.
Higher Education Programming
Johns Hopkins University and the University of Maryland continue to offer on-site postgraduate
engineering, computer science, chemical engineering, telecommunications and biotech programs at the
University Center. This commitment assures the caliber of post-graduate programming to support APG
mission initiatives, R&D requirements, as well as technology transfer opportunities with industry. Other
advanced degree programs are supported by the College of Notre Dame of Maryland, the University of
Maryland and Towson University.
Towson University and Harford Community College (HCC) have signed a memorandum of
understanding to allow for easier matriculation between the Community College and Towson University
and to harmonize academic components. HCC has leased approximately 40 acres to Towson University.
The construction of the Towson University is underway and will be completed in the fall of 2014;
however, students may take advantage of the matriculation agreements now. This offers the opportunity
for Harford County students to have a seamless four year degree through the two institutions. Morgan
State has also signed a Memorandum of Understanding to offer engineering courses on the campus of
HCC.
University Research Park Committee
OED has established this committee to ascertain the need and type of resources required to meet
the research needs of the various missions at APG and to promote the technology transfer of products and
inventions from the research centers into the broader market. The President of the corporation is a former
employee of the MITRE Corporation and guided MITRE’s work as a Federally Funded Research and
Development Contractor (FFRDC).
Following creation of the URP committee, a study was secured with OEA funding in
collaboration with Chesapeake Science and Security Corridor (CSSC) and Economic Alliance of Greater
Baltimore (EAGB) to assess the acceleration of talent development at APG and look at R&D partnerships
with higher education. This study, conducted by Battelle, found that five core areas cut across the myriad
of tenant commands and activities (systems of systems network development, cyber-security talent
connections and applied research collaborations, systems biology tying together efforts in genomics and
proteomics, high performance computing for modeling, and incubating material sciences solutions) and
highlighted the cooperative R&D partnership opportunities among the universities in the region. The
study made the business case to pursue the feasibility for a URP in northeastern Maryland. In February
2013, Harford County/CSSC launched a follow up study with additional funding through OEA that will
explore URP feasibility and look at operational planning and real estate conditions looking at the strength
of the RDT&E implications inside and outside the gates of Aberdeen Proving Ground.
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Medical Expansion
Another area of significant and sustained growth for Harford County is in the medical sector.
Upper Chesapeake Hospital Medical Campus
The proposed Upper Chesapeake Hospital Medical Campus, which encompasses 97 acres along
the I-95 interchange and Bulle Rock Parkway, will be the single largest commercial development project
ever in the City of Havre de Grace.
The new medical campus will be developed in four phases, the first of which is the north
complex. With construction on phase one projected to begin in 2016, engineers on the project estimate
that full build out of all four phases will be completed in 2025. Phase two, three and four will include
office and retail space as well as a hotel.
For many decades Harford Memorial Hospital served Harford County and provided employment
for hundreds of people living in the community.
The Upper Chesapeake Medical Center in Bel Air is developing a new $60 million, 75,000 square
foot cancer treatment center projected to open in the fall of 2013. Upper Chesapeake’s new cancer center
opened up in October 2013 and has already exceeded its target in treatment of patients within the first two
weeks of the facility opening. The Center provides access to the most advanced cancer therapies, stateof-the-art technology, enhanced supportive care services, and clinical research trials in one centralized
location.
The growth of Upper Chesapeake Hospital will provide a large infusion of health care
employment opportunities. Creating jobs here in Harford County has a domino effect of positive
economic factors, including more money spent in local business establishments, increased demand for
housing, higher home values and an increase in the tax base.
Lorien Health Systems
Lorien Health Systems has broken ground on a new 78-bed nursing and rehabilitation center near
the Bulle Rock Golf Course. The $9.5 million facility is expected to open in the spring of 2013. The new
facility will provide a focus on short-term, rehabilitative care.
The 39,000-square-foot nursing home will be built in phase one with an assisted living facility
with 40 to 60 units to be built in phase two of the project.
MedStar Health
MedStar Health plans to expand healthcare services in Harford County by developing a
comprehensive care plaza in Bel Air. The new plaza will be a one-stop-shop healthcare facility for
residents to see a physician, visit an urgent care center or take advantage of an array of specialized
healthcare services.
The new $30 million, 100,000 square foot facility will complement the growing healthcare
industry in Harford County.
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DEMOGRAPHY AND ECONOMY
Route 40 Corridor Redevelopment/Chesapeake Science and Security Corridor (CSSC)
Over the past few years, the Harford County Planning & Zoning Office, the City of Aberdeen
Planning & Zoning Office and the City of Havre de Grace Planning & Zoning office have updated their
Comprehensive Zoning and Land Use plans. The Rt. 40 Corridor is located within the development
envelope and remains one of the fastest growing areas within the County. The redevelopment
opportunities along the corridor are expansive and viable due to tax incentives, annexations and rezoning.
The United States Department of Commerce’s Foreign Trade Zone Board recently approved the
expansion of Foreign Trade Zone #74 to include 91 acres on the Perryman Peninsula. The Zone offers
significant tax and tariff savings to import and export businesses.
The Maryland Department of Transportation has allocated $2.6 million to the Edgewood MARC
Train Station for ADA upgrades as well as a new building that includes restrooms, waiting area and a
ticket counter and opened in fall 2013.
Government and Technology Enterprise (GATE)
St. John’s Properties in conjunction with Aberdeen Proving Ground, is developing the state-ofthe-art research, development and technology business park for both government and non-government
users. The site is located just east of the primary entrance to APG. Benefits of the GATE include up to 3
million square feet planned for office, laboratory and R&D facilities, and a secure work environment
which offers the additional security of being within APG in a planned campus setting. CACI has leased
61,000 square feet and Raytheon has relocated their offices from Baltimore County to GATE occupying
70,000 square feet. Engility, (formerly L-3 Communications) leased another 70,000 square feet of office
space. SAIC will expand at GATE with a second location. Boeing, General Dynamics, Harris
Corporation and Rockwell Collins have also located in this park along with fourteen other tenants. During
2012, an additional 100,000 sq. ft. was leased.
Corporate Office Properties Trust (COPT)
North Gate Business Park is located in the City of Aberdeen directly adjacent to Aberdeen
Proving Ground’s north gate. The 56-acre development is expected to total approximately 800,000 square
feet including eight office buildings and approximately 20,000 square feet of supporting retail. All
buildings will be constructed to meet a minimum LEED Silver certification. MITRE, DSA and Northrop
Grumman are some of their tenants.
Water’s Edge Corporate Campus
The former location of the Bata Shoe manufacturing plant in Belcamp, Harford County,
Maryland became Water’s Edge Corporate Campus. Considered the centerpiece of Harford County’s
Route 40 redevelopment effort, the Water’s Edge Corporate Campus is situated on 2.5 miles of waterfront
property on the Bush River, a major tributary of the Chesapeake Bay. The 41-acre park is part of a $200
million mixed-use development project that includes executive waterfront housing, Class A office space
and a private nature reserve.
The upscale Belcamp Office Park has four state-of-the-art five-story Class A office buildings and
two single story office buildings. The park offers access to light-strand fiber optic lines and dual power
grids with the majority of the acreage within the Enterprise Zone. The park features striking architecture
and extensive landscaping. SURVICE Engineering Company, SafeNet, and STEM International, Inc.
have moved their corporate headquarters to Water’s Edge and Booz Allen Hamilton continues to expand
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DEMOGRAPHY AND ECONOMY
at Water’s Edge. Applied Research Associates, Logistics Management Institute (LMI), have also
expanded into Water’s Edge. Systek, JRAD, Janus Research Corporation, MacB, EPS and Sabre Systems
are all new defense contractor tenants at Waters Edge who previously had operations in New Jersey or
Virginia. ManTech opened up their 50,000 sq. ft. facility in the summer of 2011. One of the hallmarks of
Water’s Edge is the new Water’s Edge Events Center, a 30,000 sq. ft. conference center which has
already served over 500 people since its September 2013 opening, bringing back many functions that
were forced to go to other counties or outside the state because of a lack of local facilities with larger
capacities.
Aberdeen Corporate Park
This Class A corporate campus is located on MD 22 in the City of Aberdeen and will consist of
five buildings totaling 270,000 square feet. The park will include two 3-story Class A office buildings,
one 2-story Class A office building, and two retail pad sites. The first 95,200 square foot office building is
scheduled to deliver February, 2012.
Fieldside Commons
Located less that 5 miles from Aberdeen Proving Ground in the City of Aberdeen at the
intersection of I-95 and MD 22, and is adjacent to Ripken Stadium. The park will consist of four Class A
LEED Silver 4-story office buildings.
Waterfront Development for Havre de Grace
The Historic Waterfront properties in Havre de Grace are poised to transform the landscape in the
downtown business district. Currently, six waterfront properties are for sale and primed for
redevelopment. The properties for sale include a marina and a sea plan dock base. The City of Havre de
Grace is working on creating a zoning overlay district to guide the future development projects. The
zoning will include language for mixed-use development projects. The City would like to attract new
retail, office and residential projects.
International Activities
The Harford County Office of Economic Development continues its international activities by
developing international relations and business opportunities. In 2012, OED hosted six international
delegation visits to the County through the U.S. Department of State International Leadership Program,
World Trade Center Institute and independently. They include:
•
•
•
•
•
•
Albania - Growing Information and Communication Technology (ICT) Business
Japan- Regional Economic Revitalization and Innovation
Italy- Governance and Engagement in the Broader World
Gansu, China- Economic and Technological Development
Inner Mongolia- International Relations and Business Opportunities
Estonia - Information Technology and Business Development
Harford County has formed “twinning partnerships” with the cities of Shkodra, Albania and
Narva, Estonia. Exchanging several mutual interests including economic development activities by
building a foundation making it possible for companies to develop, expand, trade and invest. OED hosted
the U.S. Export Assistance Center on Export Control Seminar and Export 101 Seminar.
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DEMOGRAPHY AND ECONOMY
Multi-Modal
The State of Maryland, the City of Aberdeen, Harford County Government, Chesapeake Science
and Security Corridor and Aberdeen Proving Ground worked collaboratively with Kittleson & Associates
to define, understand and create a Transit-Oriented-Development (TOD) plan for the Aberdeen area. The
Concept Illustrative Plan was completed in March 2012 and focuses on the Aberdeen Train Station which
is part of the Multi-Modal project. The plan includes development of a 5 mile radius with the focal point
being the Aberdeen Train Station. The TOD plan was a continuation of the 2009 transit needs and market
analysis of the Aberdeen Train Station area.
In November 2012, Jacobs completed an Aberdeen Station Square Feasibility Study to refine the
Concept Illustrative Plan. The next step in the planning process is to secure funding for the
implementation of the transportation projects.
Construction of a new train was completed in the fall of 2013. The new train station includes
bathrooms, ticket vending machines, an expanded parking lot and improvements to the roads surrounding
the station. The new station is consistent with the emphasis that Harford County and the State of
Maryland are putting on mass transit and Transit Oriented Development.
Roads/Traffic Intersections
Intersection and road projects are critical to the success future BRAC opportunities at Aberdeen
Proving Ground (APG). As a result of recent legislation raising the states gasoline tax (Transportation
Infrastructure Investment Act) Harford County received $44 million for the construction of priority
intersections listed in the State’s Consolidated Transportation Plan. This investment will allow for
increased vehicle capacity accessing Aberdeen Proving Ground and avoid the serious traffic delays in
anticipated in the surrounding communities. These improvements are critical to better position our region
for the next “BRAC-like” activity impacting our nation’s military bases.
The MD 715/US 40 project is now complete and open to traffic as of September 2013. The MD
159/US 40 project has been split into a two phase project. Phase one (currently underway) includes design
and construction funding to include right of way, utility relocation and the addition of a second left turn
lane off of MD 7 onto US 40. The second phase of the project includes complete intersection
improvements and is currently funded for design and construction.
MD 22/Paradise Road, MD 22/Old Post Road and MD 22/Beards Hill Road are fully funded for
design and construction. Work on these “BRAC intersections” is slated to be completed in 2017.
The Baltimore Metropolitan Council recently completed the MD 22 Corridor Analysis Study
focusing on areas of concern and potential improvements along the corridor. The projects have been
divided into short, medium and long term plans for improvement. Many of the short term safely and
functionality improvements have been addressed by State Highways in response to the study.
Harford Metro Area Network (HMAN)
Harford County is installing a high speed fiber system to serve government, business and
residents. The project consists of three rings of 212 pair optic fiber cable and will connect public entities
as well as have space dedicated for private use. This project gives the County superior Internet
connectivity. The first ring in the Greater Bel Air region is complete, the second and third rings are under
construction and the County will be networked to the Maryland Inter County Broadband Network (ICBN)
through Baltimore County and the Baltimore Technology Park. This project will offer Harford County
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DEMOGRAPHY AND ECONOMY
companies access to a more robust system, offer Internet redundancy, and will increase data transmission
speeds that are needed for high speed computing scenarios.
Tourism
OED and tourism have combined efforts to market and promote the quality of life, recreation and
entertainment to new residents, travelers and citizens. This effort was critical to the BRAC relocation
effort. In addition, the destination marketing campaign continues to grow its branding of “Harford
County Love It!” The cornerstone of the campaign is a continually updated interactive website, e-mail
marketing distribution system (reaching 20,000) and a video blog – “Where’s Wini?”. Since the
campaign, the website www.harfordmd.com has seen an average of 6,000 to 8,000 visitors a month.
Tourism also actively promotes local businesses and events through social networking utilizing Facebook
and Twitter.
Tourism development efforts have focused on attracting the regional traveler to local destinations
and special events, particularly in the towns of Havre de Grace, Bel Air, and Aberdeen; as well as the
Lower Susquehanna Heritage Area and its trail system. Visitors spend an average of over $300 million
dollars in Harford County annually. With growth on the horizon, Harford County plans to seize this
opportunity to expand the tax base and local economy through the tourism industry, an industry that does
not require costly infrastructure. OED continued a public-private partnership this year and brought in over
100 tourism partners who pay a fee for various marketing services. The structure of the cooperative
enables the tourism program to engage private sector participation in the County’s marketing efforts,
thereby leveraging more funds for tourism marketing overall. Expanding destination marketing has, in the
past, expanded visitor expenditures in the local economy.
Over 1.6 million people visited Harford County in 2012*. Of those visits, 768,200 were
overnights with the remainder being day trips. A growing sector of Harford’s tourism industry is sporting
events with a reported 813,000 visitors attending events at the County’s largest sporting venues - Ripken
Stadium and Cedar Lane Sports Complex. Visitors spend $320 million in local businesses in 2012
showing a 4.5% growth rate over 2011. (*official visitor economic impact data for 2013 is not yet
available). The average daily rate (ADR in local hotels for 2013 was $84.19, a 2.4% increase over 2012.
Government per diem increased from $83.00 to $93.00 this year. Over 80,000 people visited the County’s
tourism website in 2013. In addition, six new hotels have been constructed in the County during the past
five years and two additional hotels are now under construction.
New meeting and event venues have recently opened or are under construction. The Aberdeen
Proving Ground Federal Credit Union Arena at Harford Community College opened in December 2012
and has been home to several successful concerts and sporting events. The arena seats 2,500 in stadium
seating and 3,200 with floor seating. It will host community and regional events, commencements,
concerts, conferences, and trade shows.
The Water’s Edge Events Center opened in September 2013. This state-of-the-art conference
center offers a sophisticated event experience with technologically advanced meeting and event spaces. It
is a multi-use event facility for government meetings, corporate events, weddings, galas and more.
Tourism launched a new marketing promotion/strategy with its “Bring it Home” campaign in the
Fall of 2013. The marketing effort encourages local workers to “bring home” their organizations events –
encouraging utilization of conference facilities within the county.
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2013 brought the 200 year anniversary of the War of 1812 to the region and most especially to the
City of Havre de Grace. The first weekend in May brought more than 20,000 visitors to our area to
commemorate the historic events. The Maryland Tourism Council (MTC) awarded the City of Havre de
Grace at their annual tourism conference in November 2013 with the following awards: Marketing
Award for The Best Large Event in Maryland; the Cooperative Partnership Award for the Chesapeake
Campaign; and the Visionary Impact Award was presented to Brigitte Peters, Tourism Manager for the
City of Havre de Grace. In addition, Harford County Tourism Manager, Wini Roche, was presented the
top Maryland Tourism Council (MTC) award for Tourism Person of the Year at the conference.
Largest Employers
The following is a list of the some of the largest employers in the County.
Private Sector
Name and Type of Product or Service
Upper Chesapeake Health Systems, Inc.
Hospital and HMO’s ...............................................................................
Rite Aid Distribution Center
Pharmaceuticals/Household Products ....................................................
Harford Community College
Higher Education ....................................................................................
Kohl’s E-Fulfillment Center
Distribution .............................................................................................
Jacobs Technology
Technology ..............................................................................................
Klein’s ShopRites of Maryland
Retail Grocer...........................................................................................
Wegmans
Retail Grocer...........................................................................................
American Infrastructure
Construction, paving ...............................................................................
Sephora USA, LLC
Cosmetics Distribution ............................................................................
Booz Allen Hamilton
R&D/Technology.....................................................................................
CSC
Technology ..............................................................................................
Frito-Lay, Inc.
Snack Products ........................................................................................
Leidos
Information Technology ..........................................................................
SURVICE Engineering
Technology ..............................................................................................
CACI
Defense Technology ................................................................................
The Arc Northern Chesapeake Region
Service .....................................................................................................
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HARFORD COUNTY, MARYLAND
Total Number of
Employees
3,129
1,167
999
905
865
800
499
460
454
430
410
379
370
350
313
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DEMOGRAPHY AND ECONOMY
APG Federal Credit Union
Banking Services .....................................................................................
Saks Fifth Avenue
Apparel Distribution ...............................................................................
Government Sector
Name and Type of Product or Service
261
230
Total Number of Employees
Aberdeen Proving Ground
Federal Research & Development…… ....................................
Harford County Public Schools
Public Education .....................................................................................
Harford County Government
Local Government ...................................................................................
*Does not include embedded contractors
16,221*
5,369
1,540
Source: Office of Economic Development, Harford County, Maryland, 2013
Agricultural Economic Development
Agricultural Initiative
The County’s Agricultural Economic Development Initiative has commenced and projects are
underway to improve the economic viability of this essential Harford County industry. Agriculture
remains an important industry sector in the County, with an estimated annual economic impact of $390
million. Harford County has approximately 650 farms, providing stable employment for approximately
3,000 people.
On-going efforts are being conducted to promote the agriculture industry, provide support for
research, education, and marketing, as well as the exploration and development of high value agricultural
enterprises and e-commerce opportunities. Such ongoing activities include an up to date electronic
directory of farms via the County’s web site, agricultural education farm tours for students, teachers and
general public audiences, as well as field day experiences for agricultural professionals.
Every year the County Executive’s Division of Agriculture provides a grant to the Harford County
Agricultural Marketing Cooperative (Co-op), a non-profit, to support their initiative to improve the
economic viability of production agriculture in the County. The Co-op currently provides grants and
marketing assistance to members of the agricultural community.
As noted above, in 1993, the County implemented an extensive program to preserve land for
agricultural use (see “Agricultural Land Preservation Debt”, page 31), pursuant to which the County
purchases development rights from owners of farmland. The agreement with the land owners require that
the land be used only for agricultural purposes.
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MISCELLANEOUS
VI.
Miscellaneous
Approval of Legal Proceedings
Royston, Mueller, McLean & Reid, LLP, Baltimore, Maryland, is acting as Bond Counsel and
Miles & Stockbridge, P.C. is acting as Special Tax Counsel in connection with the issuance of the Bonds.
Delivery of the Bonds is conditioned upon delivery by Bond Counsel of an opinion substantially in the
form set forth in Appendix B and Appendix C to this Official Statement and delivery by Special Tax
Counsel of an Opinion substantially in the form set forth in Appendix C. The text of the approving legal
opinions will be delivered to the purchasers of the Bonds.
Litigation
The County is a party to numerous legal proceedings of the type, which normally occur in
government operations. The County reasonably estimates its aggregate exposure to be not more than
$2,875,175. In the opinion of the County Attorney, these proceedings are not likely to have an adverse
impact on the County’s financial condition, nor are any individual action likely to have a reasonably
estimated exposure in excess of $200,000.
The County self-insures a portion of its risk of loss related to torts, damage to and destruction of
property, employee injury and natural disasters. The County is insured for general liability in excess of
$500,000.
Independent Auditors
The general purpose financial statements of Harford County as of and for fiscal year 2013
included in Appendix A of this Official Statement were audited by S B & Company, LLC, independent
certified public accountants.
Financial Advisor
Public Advisory Consultants, Incorporated, Owings Mills, Maryland, (the “Financial Advisor”) is
a Registered Municipal Advisor and serves as financial advisor in connection with the issuance of the
Bonds and other matters related to the County’s finances. The Financial Advisor has not been engaged,
nor has it undertaken, to audit, authenticate or otherwise verify the information set forth in this Official
Statement, or any other related information available to the County, with respect to accuracy and
completeness of disclosure of such information. The Financial Advisor makes no guaranty, warranty or
other representation respecting accuracy and completeness of this Official Statement or any other matter
related to this Official Statement. The Financial Advisor does not engage in the underwriting, selling, or
trading of securities.
Sale at Competitive Bidding
The Bonds were offered for sale by the County at competitive bidding on March 11, 2014, in
accordance with the official Notice of Sale (the form of which is attached as Appendix D). The initial
public offering prices of the maturities of the Bonds set forth on the inside cover page are based on
information furnished to the County by the successful bidder. The successful bidder may reoffer and sell
the Bonds to certain dealers and others at prices other than the reoffering prices set forth on the cover
page.
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MISCELLANEOUS
Continuing Disclosure
The County issues a Comprehensive Annual Financial Report for each fiscal year for the twelve
months ending June 30, which are furnished pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5) to the Electronic Municipal Market Access System (EMMA) and the rating agencies identified
under “Rating Agencies.”
The County, through resolution of the County Council, has committed to provide continuing,
current financial information to the National Federation of Municipal Analysts (“NFMA”). The County
was awarded the NFMA Certificate of Recognition in August 1992 for its commitment to secondary
market disclosure.
In order to enable the bidders for the Bonds to comply with the requirements of paragraph (b)(5)
of the Securities and Exchange Commission Rule 15c2-12, the County will execute and deliver, on or
before the date of issuance and delivery of the Bonds, a Continuing Disclosure Certificate, the form of
which is attached as Appendix E. Potential purchasers should note that certain of the eleven events listed
in Section 4(a) of the Continuing Disclosure Certificate have been included for purposes of compliance
with Rule 15c2-12 but are not relevant for the Bonds, specifically those events relating to debt service
reserves, credit enhancements and liquidity providers, and property or other collateral.
With respect to its prior continuing disclosure undertakings, the County inadvertently failed to
make the continuing disclosure filing described in this paragraph. The annual financial information
required to be filed by the County for its outstanding general obligation bonds with respect to the fiscal
years ended June 30, 2009 and June 30, 2010 under previous continuing disclosure undertaking entered
into by the County was uploaded to the MSRB’s EMMA website on March 10, 2014. The continuing
disclosure undertaking entered into by the County specified that fiscal year 2009 would have been April
1, 2010 and for fiscal year 2010 would have been April 1, 2011. In addition, the County did not timely
file notice of such failure. The County has timely complied with its other continuing disclosure
obligations.
Certificate of County Officials
Simultaneously with or before delivery and payment for the Bonds, the County will furnish to the
purchaser a certification of the County Executive, the Treasurer, and the Director of Administration of the
County, which shall state that, to the best of their knowledge and belief, the Official Statement (and any
amendment or supplement thereto), as of the date of sale and as of the date of delivery of the Bonds, does
not contain any untrue statement of a material fact and does not omit any material fact necessary to make
the statements therein and, in the light of the circumstances under which they were made, not misleading;
and that between the date of sale and the date of delivery of the Bonds there has been no material adverse
change in the financial position or revenues of the County, except as reflected or contemplated in the
Official Statement.
HARFORD COUNTY, MARYLAND
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MISCELLANEOUS
Miscellaneous
The successful bidder will also be furnished, without cost, 100 copies of this Official Statement
and of any amendment or supplemental hereto that may be appropriate.
The Preliminary Official Statement of the County concerning the Bonds was in a form deemed
final by the County for purposes of SEC Rule 15c2-12(b)(1), but was subject to revision, amendment and
completion in this Official Statement.
Authorization of Official Statement
The execution of this Official Statement and its delivery has been duly authorized by the County.
Harford County, Maryland
By:
/s/ David R. Craig
David R. Craig
County Executive
By:
/s/ Mary F. Chance
Mary F. Chance
Director of Administration
By:
/s/ Kathryn L. Hewitt
Kathryn L. Hewitt
Treasurer
HARFORD COUNTY, MARYLAND
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APPENDIX A
Audited Financial Statements
For the Fiscal Year ended June 30, 2013
THIS PAGE INTENTIONALLY LEFT BLANK
Management’s Discussion and Analysis
This section of the Comprehensive Annual Financial Report of Harford County, Maryland (the County)
presents a narrative overview and analysis of the financial activities of the County for the fiscal year
ended June 30, 2013. We encourage readers to use the information presented here in conjunction with the
accompanying letter of transmittal, the basic financial statements and the accompanying notes to those
financial statements.
Financial Highlights
Government-wide:
• The County’s assets exceeded its liabilities at the close of the fiscal year by $739.3 million. The
unrestricted portion of this is a negative $111.1 million and is composed of an unrestricted deficit
in the governmental activities of $214.9 million and a balance of $103.8 million unrestricted in
the Water and Sewer Fund. The unrestricted deficit occurred in the governmental funds due to
the issuance of debt for public school construction, although the assets are held by Harford
County Public Schools.
•
Total net position of the County has increased by $6.6 million over the prior fiscal year. In the
governmental activities, total revenues decreased 3.3 percent while expenses increased 0.3
percent from the prior fiscal year, resulting in a $7.2 million decrease in net position, which is
$20.5 million less than the fiscal year 2012 increase. In the business-type activities, total
revenues exceeded total expenditures by $13.7 million, which is a $10.2 million more than the
fiscal year 2012 increase.
Fund Level:
• The County’s governmental funds reported combined fund balances of $235.2 million, a decrease
of $7.8 million from the prior year. The greatest net change in fund balance, $10.6 million
increase from the prior year, occurred in the Capital Projects Fund, due to the issuance of $30.0
million in general obligation bonds. For fiscal year 2013, the General Fund and Highways Fund,
where total expenditures exceeded revenues, had decreases in fund balance of $9.4 million and
$7.7 million, respectively.
•
Approximately 82.8 percent of the total governmental fund balance, $194.7 million, is available
to meet the County’s current and future needs as mandated by the appropriate level of authority
within the County and are properly designated as committed, assigned and unassigned.
•
Available fund balance for the General Fund was $84.9 million or 17.9 percent of total General
Fund expenditures. Restricted fund balance of the General Fund was $3.6 million or 4.0 percent
of total fund balance, leaving $0.8 million, 0.9 percent, of nonspendable fund balance in the
General Fund.
•
The business-type activities operating revenue increased slightly, $0.5 million, and operating
expenditures increased by $7.6 million, 20.0 percent, to increase the operating loss $7.1 million
or 57.8 percent from the prior fiscal year. Fiscal year 2013 capital grants and contributions were
$32.7 million, an increase of $16.5 million, 102.1 percent, over fiscal year 2012.
1
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the County’s basic financial
statements which comprise three components: 1) government-wide financial statements, 2) fund financial
statements, and 3) notes to the financial statements. This report also contains other required and nonrequired supplementary information in addition to the basic financial statements themselves.
Government-wide financial statement The government-wide financial statements are designed to
provide readers with a broad overview of the County’s finances, in a manner similar to a private-sector
business.
The statement of net position presents information on all of the County’s assets and deferred outflows of
resources and liabilities and deferred inflows of resources with the difference between the two reported as
net position. Over time, increases or decreases in net position may serve as a useful indicator of whether
the financial position and condition of the County is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed
during this fiscal year. All changes in net position are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.,
uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the County that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the County include: sheriff’s office, volunteer fire and rescue,
corrections, public works, planning and zoning, landfill, economic development, agricultural preservation,
parks and recreation and general administrative services. The business-type activities of the County
include water and sewer operations.
The government-wide financial statements include not only the County, known as the primary
government, but also legally separate component units. The County has the following component units;
Harford County Public Schools, Harford Community College, Harford County Public Library, and
Harford Center, Inc. Financial information for these component units is reported separately from the
financial information presented for the primary government itself. The government-wide financial
statements can be found on Exhibits 1 and 2 of this report.
Fund financial statements A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The County, like other state and
local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the County can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental funds Governmental funds are used to account for essentially the same functions reported
as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so, readers may better understand the long-term impact of the government’s near-term financing
2
decisions. The governmental fund Balance Sheet including the Reconciliation to the Statement of Net
Position and the Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of the Governmental Funds to the Statement of Activities, provide a reconciliation to facilitate
this comparison between governmental funds and governmental activities.
The County maintains seven individual governmental funds, the General, Highways, Grant, Agricultural
Land Preservation, Capital Project, Beechtree Tax Increment Financing and Parks & Recreation Funds.
Information is presented separately in the governmental fund balance sheet and in the governmental fund
statement of Revenues, Expenditures, and Changes in Fund Balances for all seven governmental funds.
The County adopts an annual appropriated budget for its General Fund, Highways Fund, Parks &
Recreation Fund, Agricultural Land Preservation Fund and Beechtree Tax Increment Financing Fund. A
budgetary comparison statement has been provided for the General Fund, Highways Fund and
Agricultural Land Preservation Fund to demonstrate compliance with this budget. The report can be
found on Exhibit 6 of the Basic Financial Statement. A budgetary comparison statement for the Parks &
Recreation Fund can be found on Exhibit B-1 and a budgetary comparison statement for the Beechtree
Tax Increment Fund can be found on Exhibit C-1.
Proprietary funds The County maintains two types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements; the County’s Water and Sewer activities. Internal service funds are an accounting device used
to accumulate and allocate costs internally among the County’s various functions. Because these services
predominantly benefit governmental rather than business-type functions, they have been included within
governmental activities in the government-wide financial statements. The County uses internal service
funds to account for risk management. The basic proprietary fund financial statements can be found on
Exhibits 7 and 8 of this report.
Fiduciary funds Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the County’s own programs. The accounting
used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial
statements can be found on Exhibits 10 and 11 of this report.
Notes to the financial statements The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to
the financial statements are part of the basic financial statements and can be found on pages 30 to 84 of
this report.
Financial Analysis of the County as a Whole
The County’s net position is divided into three categories; invested in capital assets, net of related debt;
restricted net position and unrestricted net position. The largest portion of the County’s net position,
$771.5 million, reflects its investment in capital assets net of depreciation (e.g. land, development rights,
construction in progress, buildings, machinery, equipment, intangibles, infrastructure and improvements),
less any unmatured debt used to acquire those assets. The County uses these capital assets to provide
services to citizens. Consequently, these assets are not available for future spending.
Restricted net position, at $78.9 million, is resources subject to external restrictions on how they may be
used. Accounting principles generally accepted in the United States of America direct that the difference
between total net position and the two categories of net position just discussed be recorded as unrestricted
net position regardless of any negative balances that may result. Unrestricted net position of the total
primary government is a negative $111.1 million; business-type activities have a balance of $103.8
million unrestricted net position while the unrestricted net position for governmental activities is a
negative $214.9 million. The major reason for negative unrestricted net position in the governmental
3
funds relates to the building of schools. Counties in the State of Maryland issue debt for public school
construction; however school buildings are recorded as assets of each public school system. Although net
position, as noted earlier, is an indicator of a government’s overall financial condition, the issuance of
debt for Harford County Public Schools and Harford Community College construction, which increases
the government’s liabilities without the addition of corresponding assets, causes an imbalance on the
Statement of Net Position. The County’s net position increased $6.6 million during the current fiscal year.
The net position of governmental activities decreased, $7.2 million, during fiscal year 2013. Program
expenses of the governmental activities increased slightly, $1.6 million, from fiscal year 2012 while
program revenues increased $6.6 million and general revenues decreased $25.5 million over fiscal year
2012. Governmental activities general revenues for 2013 decreases in property taxes $9.0 million,
income taxes $12.9 million, investment earnings $6.1 million, and impact fees $1.0 million were off set
with increases in recordation tax $1.3 million, transfer tax $1.1 million and miscellaneous $1.1 million to
account for the overall net decrease in general revenues.
The net position of business-type activities of the County increased $13.7 million during fiscal year 2013.
This increase is $10.2 million greater than the increase received in fiscal year 2012. Capital grants and
contributions revenue, primarily from developers and the State of Maryland, increased $16.5 million or
102.1 percent from fiscal year 2012. The slight increase in charges for services, operating grants and
contributions, recordation taxes, and investment income totaled $0.8 million, 2.7 percent, from fiscal year
2012 to 2013. Expenses for the business-type activities increased $7.1 million or 16.6 percent from the
prior fiscal year.
The following tables summarize net position and the changes in net position for governmental and
business-type activities:
Harford County Government - New Position
Business-type
Activities
2013
2012
Governmental
Activities
2012
2013
Current & Other Assets
Capital Assets
Total Assets
Long-term Liabilities
Other Liabilities
Total Liabilities
Net Position:
Investment in Capital
Assets net related debt
Restricted
Unrestricted
Total Net Position
$
$
Total
2013
281,356,036 $
662,544,918
943,900,954
601,593,617
28,945,062
630,538,679
308,726,906 $
648,365,566
957,092,472
602,711,042
33,831,758
636,542,800
141,075,467 $
433,276,721
574,352,188
135,695,378
12,701,950
148,397,328
155,754,359 $
409,206,030
564,960,389
134,642,444
18,106,576
152,749,020
422,431,503 $
1,095,821,639
1,518,253,142
737,288,995
41,647,012
778,936,007
449,378,060
78,915,495
(214,931,280)
313,362,275 $
434,233,561
93,748,598
(207,432,487)
320,549,672 $
322,126,658
103,828,202
425,954,860 $
303,842,266
108,369,103
412,211,369 $
771,504,718
78,915,495
(111,103,078)
739,317,135 $
4
2012
464,481,265
1,057,571,596
1,522,052,861
737,353,486
51,938,334
789,291,820
738,075,827
93,748,598
(99,063,384)
732,761,041
Harford County Government-Changes in Net Position
Governmental
Activities
2013
2012
Revenues:
Program revenues:
Charges for Services
Operating Grants &
Contributions
Capital Grants &
Contributions
$
General revenues:
Property taxes
Income taxes
Impact fees
911 Program taxes
Recordation taxes
Transfer taxes
Other taxes
Investment earnings
Unrestricted Grants &
Contributions
Miscellaneous
21,603,336 $
22,303,863
30,926,766
Business-type
Activities
2013
2012
26,179,225 $
25,658,671 $
25,216,324
648,672
11,878,363
10,270,108
286,926,355
169,703,257
2,027,400
1,582,307
8,916,236
10,854,827
744,146
(520,840)
239,369
1,888,635
$
Total
2013
2012
47,782,561 $
47,962,534
704,699
31,575,438
25,921,023
32,698,896
16,181,330
44,577,259
26,451,438
295,910,417
182,590,526
3,123,373
1,586,002
7,573,926
9,786,317
722,273
5,607,895
1,783,159
2,534,663
1,514,835
2,452,379
286,926,355
169,703,257
2,027,400
1,582,307
10,699,395
10,854,827
744,146
2,013,823
295,910,417
182,590,526
3,123,373
1,586,002
9,088,761
9,786,317
722,273
8,060,274
189,543
810,088
-
-
239,369
1,888,635
189,543
810,088
63,844,615
46,511,914
610,614,772
612,202,569
565,690,655
Total Revenues
546,770,157
Program Expenses:
Agricultural Land
Preservation
County Council
General Government
Education
Harford Center
Judicial
Libraries
Parks and Recreation
Public Safety
Public Works
Social Services
Unallocated Debt
Interest and Other
Water and Sewer
3,601,838
2,763,150
46,041,421
248,045,564
553,036
9,950,169
17,314,092
15,697,516
106,668,221
60,279,965
28,769,204
3,432,517
2,597,248
43,655,212
256,361,884
553,036
9,666,237
17,359,356
14,416,981
95,202,878
61,916,296
28,365,201
-
-
3,601,838
2,763,150
46,041,421
248,045,564
553,036
9,950,169
17,314,092
15,697,516
106,668,221
60,279,965
28,769,204
3,432,517
2,597,248
43,655,212
256,361,884
553,036
9,666,237
17,359,356
14,416,981
95,202,878
61,916,296
28,365,201
14,273,378
-
18,871,700
-
50,101,124
42,953,467
14,273,378
50,101,124
18,871,700
42,953,467
553,957,554
552,398,546
50,101,124
42,953,467
604,058,678
595,352,013
(7,187,397)
13,292,109
13,743,491
3,558,447
6,556,094
16,850,556
412,211,369
408,652,922
732,761,041
715,910,485
425,954,860 $
412,211,369 $
739,317,135 $
732,761,041
Total Expenses
Change in Net Position
Net Position-Beginning
Net Position-Ending
$
320,549,672
313,362,275 $
307,257,563
320,549,672 $
5
Governmental activities The net position of governmental activities decreased $7.2 million during fiscal
year 2013. Key elements are as follows:
•
The County recorded $169.7 million in income tax revenue from the State of Maryland for fiscal
year 2013. This is a $12.9 million, 7.1 percent, decrease from fiscal year 2012 using full accrual
accounting.
•
Decrease in investment earnings, $6.1 million or 109.3 percent, over the prior fiscal year
attributed to a decrease in the fair market value adjustment of US Treasury Strips purchased for
settlements in the Agricultural Land Preservation Fund as of June 30, 2013.
•
Public Safety program expenses increased $11.5 million or 12.0 percent from fiscal year 2012
primarily due to monies spent on improving communications technology and interoperability
among public safety agencies.
Revenues by Source-Governmental Activities
911 Program Tax
0.3%
Impact Taxes
0.4%
Recordation Tax
1.6%
Miscellaneous
0.3%
Other Taxes
0.1%
Charges for Service
3.9%
Transfer Tax
2.0%
Operating Grants &
Contributions
5.7%
Capital Grants &
Contributions
2.2%
Income Taxes
31.0%
Property Taxes
52.5%
Expenses and Program Revenues-Governmental Activities
$300,000
$250,000
Expenses (thousands)
Program revenues (thousands)
$200,000
$150,000
$100,000
$50,000
$0
Agricultural County Education General
Council
Gov't
Land
Harford
Center
Judicial
Libraries
6
Parks & Public
Recreation Safety
Public
Works
Social
Debt
Services Interest &
Other
Costs
Business-type activities Business-type activities recorded an increase in net position of $13.7 million
during fiscal year 2013. Key elements are as follows:
•
Capital grants and contributions totaled $32.7 million. Of the total capital grants and
contributions 21.7 percent was attributed to completed developer projects, 54.5 percent was from
the State of Maryland for the Enhanced Nutrient Removal projects at County wastewater
treatment plants, 0.9 percent from the Federal Government and 22.9 percent was attributed to
County water and sewer hook-up charges as outlined in current Department of Public Works
Rules and Regulations.
•
Operating grants and contributions revenue, 1.0 percent of total business-type activity revenue,
was comprised of Build America Bond interest credit revenue and reimbursement from the
Federal Emergency Management Agency for natural disasters occurring during the fiscal year.
•
Program revenues, including capital grants and contributions, exceeded total expenses by $9.4
million.
Revenues by Source-Business-type Activities
Operating Grants &
Contributions
1.0%
Charges for Service
41.0%
Capital Grants &
Contributions
51.2%
Recordation Tax
2.8%
Investment Earnings
4.0%
Expenses and Program Revenues-Business-type Activities
$60,000
$50,000
$40,000
Expenses (thousands)
$30,000
Program revenues (thousands)
$20,000
$10,000
$Water and Sewer
7
Financial Analysis of the County’s Funds
As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements.
Governmental funds The focus of the County’s governmental funds is to provide information on nearterm inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
government’s financing requirements. In particular, committed, assigned and unassigned fund balance
may serve as a useful measure of a government’s net resources available for spending at the end of the
fiscal year.
As of the end of the current fiscal year, the governmental funds reported combined ending fund balances
of $235.2 million, a decrease of $7.8 million in comparison with the prior year. Approximately 82.8
percent of this total amount, or $194.7 million, constitutes committed, assigned and unassigned fund
balance, which is available for spending at the government’s discretion. The remainder of fund balance,
$40.5 million, is nonspendable and restricted to indicate that it is not available for new spending because
it has been dedicated: 1) to unexpended bonded capital projects, $23.8 million; 2) for dedicated revenues,
$11.8 million; 3) for special taxing district, $2.0 million, 4) for inventories, $1.9 million; 5) for a loan
receivable of $0.4 million, 6) for waste-to-energy insurance, $0.5 million, or 7) a deposit with a vendor,
$0.1 million. The nonspendable and restricted fund balance, at 17.2 percent of total fund balance, does
not significantly affect the availability of fund resources for future use.
The General Fund is the chief operating fund of the County. At the end of the current fiscal year,
assigned and unassigned fund balance of the General Fund was $84.9 million. As a measure of the
General Fund’s liquidity, it may be useful to compare both assigned and unassigned fund balance and
total fund balance to total fund expenditures. Assigned and unassigned fund balance represents 17.9
percent of total General Fund expenditures, while total fund balance represents 18.9 percent of that same
amount.
The County’s General Fund total fund balance has decreased by $9.4 million during the current fiscal
year. The decrease is primarily due to a decrease in real property tax revenues of $5.4 million, corporate
property tax revenues of $2.6 million, Build America Bond interest credit of $0.7 million and solid waste
tipping fees of $0.3 million, combined with a $2.2 million decrease in the County’s homestead tax credit
over fiscal year 2012. General fund expenditures increased $5.3 million from the prior fiscal year
primarily to the growing needs of the Department of Public Safety and Education.
The Highways Fund has a total fund balance of $14.2 million, representing a decrease of $7.7 million
from the prior fiscal year. The Highways Fund has 83.0 percent, $11.8 million, of its total fund balance
assigned to the purpose of the fund. Of this amount, 21.0 percent is designated for fiscal stabilization
purposes and 7.6 percent is designated for other post-employment benefits. The Highway’s Fund balance
of $2.1 million classified as nonspendable represents inventory and a prepaid deposit with a vendor.
The Grant Fund has a total fund balance of $7.7 million. The $0.9 million increase in fund balance over
the prior fiscal year is due primarily to a increase in grant revenues.
The Agricultural Land Preservation Fund has a total fund balance of $51.6 million, a decrease of $2.2
million over the prior year. Of the total fund balance, $48.9 million or 94.7 percent is committed for
future payments of principal on development rights. The County purchased 40 development rights during
fiscal year 2013. The Agricultural Land Preservation Fund has $2.7 million, of its total fund balance
assigned to the purpose of the fund.
The Capital Project Fund has a total fund balance of $69.8 million; a $10.6 million increase over the prior
fiscal year. General obligation bonds of $30.0 million were issued during fiscal year 2013 to help offset
the cost of County capital projects. Of the total fund balance, $23.5 million is restricted for Harford
8
County Public Schools and other bonded capital projects, $0.5 million is restricted for Parks and
Recreation projects, $43.3 million is assigned to liquidate contracts and purchase orders of the prior
period and $2.5 million is assigned to future general projects.
The Beechtree Tax Increment Financing Fund has a restricted fund balance of $2.0 million at year end.
Expenditures slightly exceed revenues for the year by $0.1 million.
Proprietary funds The County’s proprietary fund statements provide the same type of information found
in the government-wide financial statements, but in more detail. Unrestricted net position of the Water
and Sewer Fund at the end of the year amounted to $104.1 million and unrestricted net position of the
Internal Service Fund totaled $7.1 million. Net position of the Water and Sewer Fund has increased by
$13.7 million over 2013. Factors concerning the finances of the Water and Sewer Fund have been
addressed in the discussion of the County’s business-type activities. The Internal Service Fund net
position has increased by $0.2 million.
General Fund Budgetary Highlights
The final budget of the General Fund for fiscal year 2013 was increased by $83.5 million over the original
budget. Appropriated fund balance was increased $8.8 million to account for estimated expenses
attributable to other post-employment benefits and post-employment health plan benefits for County
employees, $3.5 million to account for merit increases for qualified employees of Harford County
Government and Harford County Public Libraries, $0.8 million for natural disasters and $0.3 million in
funding for Havre de Grace High School field facilities project. Issuance of bonds appropriation was
increased $70.1 million to account for the 2013 bond refunding. Ending variances from the final fiscal
year 2013 budget include an $8.2 million positive variance in income tax revenue, a positive variance of
$2.0 million in corporate and business personal property tax revenue, a positive variance of $1.1 million
in enterprise zone tax credits and a $2.1 million decrease in projected revenue from real property taxes. A
conservative spending policy led to the 2.1 percent decrease in actual General Fund expenditures
compared to the final General Fund budget.
Capital Asset and Debt Administration
Capital assets The County’s investment in capital assets for its governmental and business-type
activities as of June 30, 2013, amounts to $1.1 billion (net of accumulated depreciation). This investment
in capital assets includes land, development rights, construction in process, buildings, improvements,
machinery and equipment, vehicles, intangibles and infrastructure. The total increase in the County’s
investment in capital assets for the current fiscal year was 3.6 percent.
The County's Capital Assets
Land
$
Development Rights
Construction in Process
Buildings
Improvements
Machinery and
Equipment
Vehicles
Intangibles
Infrastructure
Total
$
(Net of depreciation)
Governmental
Business-type
Activities
Activities
2013
2012
2013
2012
247,679,364 $ 242,329,051 $
2,027,385 $
1,991,400 $
120,094,050
117,834,362
27,218,973
22,605,294
65,317,927
45,615,727
113,286,068
116,460,950
146,880,894
146,853,739
21,813,516
26,014,550
214,977,938
210,721,085
Total
2013
249,706,749 $
120,094,050
92,536,900
260,166,962
236,791,454
2012
244,320,451
117,834,362
68,221,021
263,314,689
236,735,635
4,640,131
15,729,127
445,840
111,637,849
5,117,234
11,450,261
237,698
106,316,166
7,971,196
12,519,807
338,269
106,316,166
662,544,918 $
648,365,566 $
2,672,145
1,221,935
178,497
-
2,853,962
1,069,546
100,571
-
7,312,276
16,951,062
624,337
111,637,849
433,276,721 $
409,206,030 $
1,095,821,639 $
9
1,057,571,596
Major capital asset events during the current fiscal year included the following:
•
The Shucks Road Regional Complex will develop a seventy-one acre site centrally located in
Harford County. The initial phase of park development will include baseball/softball diamonds,
lacrosse fields, soccer fields and an entrance road with parking. During fiscal year 2013, $4.1
million was spent for total expenditures to date of $4.7 million.
•
The New Emergency Operations Center is currently under development. Phase 1 includes
construction of the new Emergency Operations/Dispatch center. At June 30, 2013, $2.4 million
was spent on construction to date and $23.1 million was encumbered, of the $26.3 million
appropriated for this project.
•
The Wheel Road (Laurel Bush to Fairway) project has completed phase 1 and 2A. This project,
when complete, will improve the capacity and safety of Wheel Road as it serves as a linking road
for MD543 and MD24. To date, $6.6 million has been spent on this project.
•
Enhanced Nutrient Removal Refinement projects are currently under construction at the County’s
Sod Run and Joppatowne Wastewater Treatment Plants. The upgrade of the wastewater
treatment plants is necessary to meet State and Federal TMDL requirements for nutrient
reductions in the Chesapeake Bay. During fiscal year 2013, $20.0 million was spent for total
expenditures to date of $28.7 million at the Sod Run Wastewater Treatment Plant and $2.4
million was spent for total expenditures to date of $3.3 million at the Joppatowne Wastewater
Treatment Plant.
Additional information on Harford County’s capital assets can be found in Note 4C of this report.
Education Capital Expenditures:
Harford County Public Schools and Harford Community College projects made up 22.5 percent of the
fiscal year 2013 Capital Budget. Some of the major expenditures were:
•
The William Paca Elementary School air conditioning project will install a minimum cost air
conditioning system in the two school buildings which currently do not have an air conditioning
system. Expenditures to date for this project total $3.9 million of the $5.8 million appropriated.
•
Jarrettsville Elementary School is undergoing a comprehensive HVAC systemic replacement
project, which is upgrading and/or replacing all components of the school’s current heating and
air conditioning system. Expenditures to date for this project total $2.7 million of the $2.9
million appropriated.
•
The Youth’s Benefit Elementary School Primary Building Air Conditioning Project has a total
projected cost of $4.8 million. The project will provide a minimum cost air conditioning system
to the building which currently does not have one. During fiscal year 2013, $1.2 million was
spent on this project.
•
Harford Community College’s water and wastewater project will enable the College to pretreat
wastewater on-site in accordance with MDE regulations. During fiscal year 2013, $1.0 million
was spent for total expenditures to date of $1.7 million.
Long-term debt At the end of the current fiscal year, the County had Bonds, Notes and Capital Leases
debt outstanding of $660.2 million. Of this amount, $132.5 million is considered self-supporting debt,
funded through various surcharges and assessments related to the operation of the water and sewer
systems of the County. Also considered self-supporting are $61.1 million in installment contracts to
purchase easements for agricultural land preservation, payable from special revenue funds supported
10
through one-half of one percent of the transfer tax levy, and $14.0 million associated with the incremental
property tax revenues related to a special taxing district.
The County’s Outstanding Debt
Bonds, Notes and Capital Leases
Governmental
Activities
2013
2012
Ag Land
Preservation
Bonds Payable
Capital Leases
Notes Payable
Business-type
Activities
2013
2012
Total
2013
$
61,104,712 $ 62,058,577 $
- $
- $ 61,104,712
462,229,857
462,132,841
132,276,225
131,235,775
594,506,082
1,294,584
2,941,940
193,444
380,989
1,488,028
3,070,721
4,871,422
3,070,721
$ 527,699,874 $ 532,004,780 $ 132,469,669 $ 131,616,764 $ 660,169,543
2012
$
62,058,577
593,368,616
3,322,929
4,871,422
$ 663,621,544
Bonds, Notes and Capital Leases debt of the County has decreased by $3.5 million, 0.5 percent, during
the current fiscal year. For the governmental activities, debt decreased $4.3 million due to principal
payments and reductions of $33.2 million and $70.1 million debt refunded offset by a general obligation
bond sale of $30.0 million, a refunding bond of $59.8 million and a premium of $13.6 million. In
business-type activities, debt increased slightly, $0.9 million, due to a bond sale of $10.0 million, a
refunding bond of $14.8 million and a premium/deferred loss of $1.8 million, offset by bond principal
payments and reductions of $10.9 million and $14.8 million refunded debt.
During fiscal year 2013, the County’s bond ratings remained unchanged. Fitch has assigned the County a
“AAA” rating and Moody’s Investor Service assigned a “Aaa”, the highest ratings for both agencies.
Standard and Poors Corp. has rated the County “AA+.”
State statutes limit the amount of general obligation debt a government entity may issue; up to 15.0
percent of its net assessed valuation of personal and corporate property plus 6.0 percent of the net
assessed valuation of real property. The current debt limitation for the County is $1.7 billion, which is
significantly in excess of the County’s outstanding general obligation debt.
Additional information on the County’s long-term debt can be found in note 4F of this report.
Economic Factors and Next Year’s Budgets and Rates
•
The County Real Property Tax Rate for fiscal year 2014 remains unchanged at $1.042 per $100
of the assessed valuation. This is the third consecutive year that the County real property tax rate
falls below the constant yield rate. Net property tax receipts recorded in the General Fund for
fiscal year 2014 are expected to decline 1.3 percent over those projected for fiscal year 2013. The
decline is primarily due to a 6.5 percent decrease in reassessment value of one-third of County
property owners in the northern part of the County, Havre de Grace and Joppatowne. Statewide,
the assessment notices mailed to property owners reflect another decrease in real estate values for
residential properties. In Harford County 92.0 percent of the properties being reassessed
experienced a decline in value.
•
The County Council has set the fiscal year 2014 County income tax rate at 3.06 percent which is
unchanged from the prior fiscal year. Fiscal year 2014 income tax revenue is projected to
increase over the approved fiscal year 2013 income tax revenue by 8.9 percent. The increase in
income tax revenue is largely due, in part, to an improving economy and lower unemployment in
Maryland. Income tax is budgeted at $190.6 million for fiscal year 2014.
11
•
The County levies and collects a transfer tax at a rate of 1.0 percent of the actual consideration
paid for conveyance of title to real property. This tax is imposed upon all transfers of real
property within the County. Transfer tax collected is split 50.0 percent to fund school
construction debt and 50.0 percent to purchase agricultural land for preservation. For fiscal year
2014, the County anticipates recording $9.6 million in transfer tax.
•
A new State mandate for 2013 requires the County collect a stormwater fee from taxpayers to
fund the implementation of a local watershed protection and restoration program. As of July 1,
2013, 10.0 percent of the stormwater fees outlined in Bill No. 13-12 shall be collected and
maintained in a dedicated fund, the Stormwater Management Fund. A Watershed Protection and
Restoration Task Force shall be established to report on recommendations for fees. For fiscal
year 2014, the Stormwater Management Fund has an approved budget of $1.3 million.
•
For fiscal year 2014, Harford County Public Schools are being funded at $221.3 million, which is
almost $2.0 million above the required Maintenance of Effort for fiscal year 2014. While the
County’s Maintenance of Effort has actually decreased due to continued reductions in student
enrollment, in May 2012, special State legislation shifted 100.0 percent of the teachers’ normal
pension costs from the State to the County. The transfer of these pension costs will be phased in
over a four-year period. $7.0 million has been included in the FY14 budget to cover the cost of
this pension shift. Harford County Public Schools fiscal year 2014 capital budget contains
twenty-two planned projects totaling $64.0 million. Of the total General Fund debt service
budget, 62.1 percent is allocated for school debt.
•
The County’s support of Harford Community College fiscal year 2014 budget remains at the
same funding level as fiscal year 2013, $15.0 million. The County has appropriated $4.1 million
for two of Harford Community College’s fiscal year 2014 capital projects, which will be financed
by issuing general obligation bonds.
These and other economic factors were considered when preparing the fiscal year 2014 General Fund
budget, which estimates total revenues at $511.7 million; an increase of $9.6 million or 1.9 percent over
fiscal year 2013 original budgeted amounts. Mindful of the economic struggles the County has faced for
the past several years as a result of national economic uncertainties, cuts in revenue funding streams and
the status of the State of Maryland’s budget, the County will continue to carefully monitor expenditures
and apply cost containment efforts. Expenditures for fiscal year 2014 will continue to be tightened and
trimmed where possible. The County also anticipates issuing bonds during fiscal year 2014.
There are no new taxes to fund the fiscal year 2014 budget. The income tax rate of 3.06 percent is
unchanged. The real property tax rate is also unchanged at $1.042 per $100 of assessed value. The
Homestead Tax Credit rate is 5.0 percent for Harford County for fiscal year 2014 and remains unchanged
from the past fiscal year.
The Water and Sewer Fund rates will increase by 2.1 percent for fiscal year 2014. The Water and Sewer
rates affect both residential and industrial consumers by adjusting rates to the change in the Consumer
Price Index each fiscal year. The net change in the fiscal year 2014 approved budget from the 2013 fiscal
year original approved budget for the Water and Sewer Operating Fund is nominal, $1.7 million, 3.7
percent.
12
Requests for Information
This financial report is designed to provide a general overview of the County’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the Office of the Treasurer,
Harford County Government, 220 S. Main Street, Bel Air, Maryland, 21014.
The County’s component units issue their own separately audited financial statements. These statements
may be obtained by directly contacting the component unit, contact information can be found on Note 1A
of this report.
13
HARFORD COUNTY, MARYLAND
Statement of Net Position
June 30, 2013
Exhibit 1
Primary Government
ASSETS
Equity in Pooled Cash and Investments
Cash and Investments
Taxes and Accounts Receivable (Net)
Federal and State Receivable
Internal Balances
Due From Primary Government
Inventories
Loans Receivable
Other Assets
Deposit with Trustee
Benefit Assessments
Restricted Assets--Cash & Investments
Unamortized Bond Costs
Capital Assets:
Land, Land Improvements, Development Rights & CIP
Other Capital Assets, Net of Depreciation
Total Assets
$
LIABILITIES
Accounts Payable
Due to Component Units
Retainages Payable
Payable to State of Maryland
Accrued Expenses
Unearned Revenue
Performance Deposits
Escrow Accounts
Other Liabilities
Noncurrent Liabilities:
Due within one year
Due in more than one year
Total Liabilities
NET POSITION
Net Investment in Capital Assets
Restricted for:
Highways Projects
Agricultural Land Preservation
Public Schools
Grant Programs
Other Purposes
Unrestricted
Total Net Position
$
Component Units
Governmental
Business-Type
Total Primary
Harford County
Harford
Harford Community
Harford County
Activities
Activities
Government
Public Schools
Center, Inc.
College
Public Library
163,082,884
42,750
3,411,183
30,794,468
227,251
1,922,189
3,593,598
576,287
3,128,613
683,825
71,491,109
2,401,879
$
75,838,475
650
7,137,783
6,748,977
(227,251)
1,452,823
37,127,881
12,191,946
804,183
$
238,921,359
43,400
10,548,966
37,543,445
3,375,012
3,593,598
576,287
3,128,613
37,811,706
83,683,055
3,206,062
$
25,000,650
9,165,621
6,699,961
1,923,020
828,460
-
$
1,338,364
125,272
-
$
27,354,896
874,290
1,763,707
625,022
1,196,725
6,433
7,023,887
-
$
5,650,028
56,186
11,478
2,855,928
-
394,992,387
267,552,531
943,900,954
67,345,312
365,931,409
574,352,188
462,337,699
633,483,940
1,518,253,142
26,199,449
561,565,812
631,382,973
525,536
1,989,172
4,720,554
90,739,604
134,305,118
4,976,762
13,550,382
7,125,688
1,923,020
785,041
200,639
12,409,284
3,832,835
950,038
1,333,220
385,297
3,188,577
2,982,358
1,123,393
2,549,702
27,218
191,298
2,620,308
19,096
10,314,265
1,923,020
3,767,399
1,324,032
14,958,986
3,860,053
1,141,336
3,953,528
404,393
7,745,719
1,009,146
441,272
-
68,935
57,519
29,665
-
1,633,600
61,201
1,063,420
3,062,952
373,538
110,321
612,559
-
48,258,466
553,335,151
630,538,679
8,661,380
127,033,998
148,397,328
56,919,846
680,369,149
778,936,007
4,421,320
196,004,312
209,621,769
156,119
84,988
1,209,975
7,489,674
33,712
8,779,841
9,536,433
449,378,060
322,126,658
771,504,718
577,748,614
525,536
95,460,158
4,903,841
14,411,020
51,613,603
2,660,492
7,718,401
2,511,979
(214,931,280)
313,362,275
103,828,202
425,954,860
14,411,020
51,613,603
2,660,492
7,718,401
2,511,979
(111,103,078)
739,317,135
10,298,709
(166,286,119)
421,761,204
31,975
1,275,542
1,833,053
7,451,838
23,903,448
126,815,444
51,591
(941,483)
4,013,949
$
$
The accompanying notes to the basic financial statements are an integral part of this statement.
15
$
$
$
$
HARFORD COUNTY, MARYLAND
Statement of Activities
For The Year Ended June 30, 2013
Exhibit 2
Program Revenues
Net (Expense) Revenue and Changes in Net Position
Primary Government
Functions/Programs
Primary Government:
Government Activities
Agricultural Preservation
County Council
General Government
Education-Primary thru Comm. College
Harford Center
Judicial
Libraries
Parks, Recreation and Natural Resources
Public Safety
Public Works
Social Services
Unallocated Debt Interest / Other Costs
Total Government Activities
Business-type Activities
Water and Sewer
Total Business-type Activities
Total Primary Government
Charges for
Services
Expenses
$
$
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Governmental
Activities
Component Units
Business-Type
Activities
3,601,838 $
2,763,150
46,041,421
248,045,564
553,036
9,950,169
17,314,092
15,697,516
106,668,221
60,279,965
28,769,204
14,273,378
553,957,554
- $
2,778,718
986,866
3,701,079
13,570,360
566,313
21,603,336
46,081 $
91,155
1,296,827
1,291,785
236,574
5,537,793
1,907,145
19,145,814
1,373,592
30,926,766
147,103 $
1,108,214
618,084
224,998
9,779,964
11,878,363
(3,408,654) $
(2,671,995)
(40,857,662)
(248,045,564)
(553,036)
(8,658,384)
(17,314,092)
(13,855,992)
(97,204,351)
(35,022,496)
(9,057,077)
(12,899,786)
(489,549,089)
50,101,124
50,101,124
604,058,678 $
26,179,225
26,179,225
47,782,561 $
648,672
648,672
31,575,438 $
32,698,896
32,698,896
44,577,259
(489,549,089)
566,475,184 $
2,158,014
60,630,418
19,999,840
649,263,456 $
8,811,091 $
22,150
18,672,270
749,256
28,254,767 $
124,751,029 $
1,703,069
22,334,535
2,697,794
151,486,427 $
35,158,834
13,563,416
48,722,250
Harford County
Public Schools
Total
- $
-
9,425,669
9,425,669
9,425,669
Harford
Community
College
Harford
Center, Inc.
Harford County
Public Library
(3,408,654) $
(2,671,995)
(40,857,662)
(248,045,564)
(553,036)
(8,658,384)
(17,314,092)
(13,855,992)
(97,204,351)
(35,022,496)
(9,057,077)
(12,899,786)
(489,549,089)
- $
-
- $
-
- $
-
-
9,425,669
9,425,669
(480,123,420)
-
-
-
-
Component Units:
Harford County Public Schools
Harford Center, Inc.
Harford Community College
Harford County Public Library
Total Component Units
$
$
General Revenues:
Taxes:
Property Taxes
Income Taxes
Impact Taxes
911 Program Taxes
Recordation Taxes
Transfer Taxes
Other Taxes
Investment Earnings
Grants and Contributions not Restricted to Specific Purposes
Miscellaneous
Total General Revenues
Change in net position
Net Position--Beginning
Net Position--Ending
-
$
286,926,355
169,703,257
2,027,400
1,582,307
8,916,236
10,854,827
744,146
(520,840)
239,369
1,888,635
482,361,692
(7,187,397)
320,549,672
313,362,275 $
The accompanying notes to the basic financial statements are an integral part of this statement.
16
-
1,783,159
2,534,663
4,317,822
13,743,491
412,211,369
425,954,860 $
-
286,926,355
169,703,257
2,027,400
1,582,307
10,699,395
10,854,827
744,146
2,013,823
239,369
1,888,635
486,679,514
6,556,094
732,761,041
739,317,135 $
(397,754,230)
(397,754,230)
30,950
361,148,916
5,717,630
366,897,496
(30,856,734)
452,617,938
421,761,204 $
(432,795)
(432,795)
40,215
553,036
593,251
160,456
1,672,597
1,833,053 $
(6,060,197)
(6,060,197)
(16,552,790)
(16,552,790)
625,072
15,712,002
16,337,074
10,276,877
116,538,567
126,815,444 $
5,935
16,054,666
16,060,601
(492,189)
4,506,138
4,013,949
HARFORD COUNTY, MARYLAND
Balance Sheet
Governmental Funds
June 30, 2013
General
ASSETS
Equity in Pooled Cash and Investments
Cash and Investments
Taxes and Accounts Receivable (Net)
Federal and State Receivable
Inventories
Loans Receivable
Other Assets
Deposit with Trustee
Benefit Assessment
Restricted Assets - Investments
Total Assets
LIABILITIES
Accounts Payable
Due to Component Units
Retainages Payable
Payable to State of Maryland
Accrued Expenditures
Unearned Revenue
Deferred Revenue
Performance Deposits
Escrow Accounts
Other Liabilities
Total Liabilities
FUND BALANCES
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total Fund Balances
Total Liabilities and Fund Balances
$
$
$
$
Highways
73,935,440
42,700
2,856,290
24,587,268
398,743
445,005
2,687,977
104,953,423
$
2,938,187
200,350
2,095,862
1,717,742
7,493,553
475,107
347,088
370,238
15,638,127
$
843,748
3,587,146
77,951,284
6,933,118
89,315,296
104,953,423
$
$
13,298,701
50
357,768
386,682
1,922,189
131,282
320,055
16,416,727
$
720,814
309,375
208,742
474,931
500,353
234
2,214,449
$
2,053,471
359,573
11,789,234
14,202,278
16,416,727
Agricultural Land
Preservation
Grant
$
$
5,506,092
185,894
4,174,067
3,194,855
13,060,908
$
369,272
120,815
1,528,415
3,324,005
5,342,507
$
7,718,401
7,718,401
13,060,908
$
$
Capital
Project
3,007,843
48,873,277
51,881,120
$
266,404
1,113
267,517
$
48,873,277
2,740,326
51,613,603
51,881,120
$
$
Beechtree
TIF
53,908,753
1,646,451
1,191,984
683,825
19,609,800
77,040,813
$
2,769,969
1,923,020
785,041
586,678
683,825
477,334
14,825
7,240,692
$
23,919,410
45,880,711
69,800,121
77,040,813
$
$
Exhibit 3
Total
Governmental
Funds
Non Major
Parks &
Recreation
57,521
1,936,629
1,994,150
$
-
$
1,994,150
1,994,150
1,994,150
$
$
558,584
2,573
561,157
$
28,028
289
6,566
8,445
43,328
$
$
517,829
517,829
561,157
The accompanying notes to the basic financial statements are an integral part of this statement.
17
7,092,674
1,923,020
785,041
200,639
2,533,731
3,832,835
11,710,125
950,038
1,333,220
385,297
30,746,620
2,897,219
37,578,680
48,873,277
138,879,384
6,933,118
235,161,678
Internal balances are reported as a result of the entity wide statements thus
are not reported in the fund statements.
Capital assets used in governmental activities are not financial resources
and therefore are not reported in the funds.
Unamortized bond costs are not financial resources and therefore are not
reported in the funds.
Some of the County's revenues will be collected after year-end, but not
available soon enough to pay for the current period expenditures, and
therefore are reported as deferred revenues in the funds.
Internal service funds are used by management to charge the costs of
certain activities, such as insurance and telecommunications, to individual funds. These assets and liabilities of the internal service funds are
included in the statement of net position.
Long-term liabilities, including bonds payable, compensated absences, notes
payable, capital leases, landfill closure and accrued bond interest are not due
and payable in the current period and therefore are not reported in the funds.
Net Position of Governmental Activities
150,272,934
42,750
3,402,525
30,794,468
1,922,189
3,593,598
576,287
3,128,613
683,825
71,491,109
265,908,298
227,251
662,544,918
2,401,879
11,710,125
7,084,274
(605,767,850)
$
313,362,275
HARFORD COUNTY, MARYLAND
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For The Year Ended June 30, 2013
Exhibit 4
General
REVENUES
Taxes
Revenues from Other Agencies
Investment Income
Charges for Current Services
Miscellaneous
Licenses and Permits
Fines and Forfeitures
Total Revenues
EXPENDITURES
Current:
Agricultural Preservation
County Council
General Government
Education-Primary thru Comm. College
Harford Center
Judicial
Libraries
Parks, Recreation and Natural Resources
Public Safety
Public Works
Social Services
Capital Outlay
Debt Service:
Principal
Interest
Administrative Costs
Total Expenditures
(Deficiency) Excess of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers (Out)
Issuance of Bonds
Issuance of Refunding Bonds
Premium on Issuance of Bonds
Issuance of Installment Purchase Agreements
Payment to Escrow Agent for Refunding
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances--Beginning
Increase (Decrease) in Inventory
Fund Balances--Ending
$
$
439,953,898
3,433,628
314,237
14,656,269
829,332
3,637,218
127,271
462,951,853
Highways
$
34,627,770
1,775,301
30,876
766,064
37,685
14,780
37,252,476
Agricultural Land
Preservation
Grant
$
25,390,194
78
1,023,452
688,877
241,462
27,344,063
$
5,427,413
46,081
(981,074)
26,236
4,518,656
Capital
Project
$
14,343,650
3,041,073
91,016
1,951,765
19,427,504
Non Major
Parks &
Recreation
Beechtree
TIF
$
978,167
1,912
980,079
$
733
928,278
556
929,567
Governmental
Funds
$
495,330,898
33,686,277
(542,222)
17,374,063
3,534,451
3,637,218
383,513
553,404,198
2,659,600
35,494,785
232,782,980
553,036
8,286,627
16,054,666
10,549,363
92,255,164
14,321,690
11,467,883
-
2,000,000
1,196,012
26,134,418
-
91,155
1,755,379
1,569,453
296,207
4,967,586
12,254
20,272,976
-
2,486,811
-
53,425,443
-
780,870
-
2,486,811
2,750,755
37,250,164
234,782,980
553,036
9,856,080
16,054,666
11,626,440
98,418,762
40,468,362
31,740,859
53,425,443
30,294,241
18,259,079
505,181
473,484,295
618,060
59,455
14,657
30,022,602
28,965,010
2,966,960
3,221,629
41,219
8,716,619
53,425,443
1,050,000
25,361
1,075,361
780,870
33,879,261
22,590,163
586,418
596,470,200
(10,532,442)
7,229,874
(1,620,947)
(4,197,963)
(33,997,939)
(95,282)
148,697
(43,066,002)
19,172,940
(21,029,438)
59,750,398
13,310,613
(70,065,844)
1,138,669
(9,393,773)
98,709,069
89,315,296
37,065
(15,280,135)
327,391
(14,915,679)
(7,685,805)
21,990,987
(102,904)
14,202,278
2,963,443
(449,507)
2,513,936
892,989
6,825,412
7,718,401
2,013,095
2,013,095
(2,184,868)
53,798,471
51,613,603
33,346,130
(18,760,498)
30,000,000
44,585,632
10,587,693
59,212,428
69,800,121
(95,282)
2,089,432
1,994,150
148,697
369,132
517,829
55,519,578
(55,519,578)
30,000,000
59,750,398
13,638,004
2,013,095
(70,065,844)
35,335,653
(7,730,349)
242,994,931
(102,904)
235,161,678
$
$
$
The accompanying notes to the basic financial statements are an integral part of this statement.
18
$
$
$
$
HARFORD COUNTY, MARYLAND
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of the Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2013
Exhibit 5
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances--total governmental funds
$
(7,730,349)
Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is
allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays
exceeded depreciation in the current period.
6,764,108
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.
(6,655,423)
The issuance of long-term debt (i.e. bonds, leases, installment purchase agreements) proceeds provide current financial resources
to governmental funds, while the repayment of the principal of the long-term debt consumes the current financial resources of
government funds. Neither transaction has any effect of net position. Also, governmental funds report the effect of issuance
costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the
statement of activities.
4,222,142
Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not
reported as expenditures in governmental funds.
(3,927,228)
Eliminating the effect of the internal service fund using the "look-back" method resulted in a decrease in expenses in the
governmental activities in the statement of activities.
(15,435)
Internal service funds are used by management to charge the costs of certain activities, such as insurance and telecommunications,
to individual funds. The net revenue (expense) of the internal individual funds. The net revenue (expense) of the internal service
funds is reported with governmental activities.
154,788
Change in net position of governmental activities
$
The accompanying notes to the basic financial statements are an integral part of this statement.
19
(7,187,397)
HARFORD COUNTY, MARYLAND
Statement of Revenues, Expenditures, Encumbrances
And Changes In Fund Balances
Budgetary Basis (Non-GAAP) vs. Actual
Governmental Funds
For The Year Ended June 30, 2013
Exhibit 6
General
Budgeted Amounts
Original
Final
REVENUES
Taxes
Revenues from Other Agencies
Investment Income
Charges for Current Services
Miscellaneous
Licenses and Permits
Fines and Forfeitures
Total Revenues
$
EXPENDITURES
Current:
Agricultural Preservation
County Council
General Government
Education-Primary thru Comm. College
Harford Center
Judicial
Libraries
Parks, Recreation and Natural Resources
Public Safety
Public Works
Social Services
431,233,874
2,941,800
331,416
14,651,720
9,647,404
3,302,600
105,100
462,213,914
$
Highways
Variance With
Final Budget
Positive (Negative)
Actual Amounts
431,233,874
2,941,800
331,416
14,651,720
9,647,404
3,302,600
105,100
462,213,914
$
439,953,898
3,433,628
314,237
14,656,269
9,925,420
3,637,218
127,271
472,047,941
$
8,720,024
491,828
(17,179)
4,549
278,016
334,618
22,171
9,834,027
Budgeted Amounts
Original
Final
$
34,373,443
1,254,847
46,920
903,600
8,329,537
9,000
44,917,347
$
Variance With
Final Budget
Positive (Negative)
Actual Amounts
34,373,443
1,254,847
46,920
903,600
8,329,537
9,000
44,917,347
$
34,627,770
1,775,301
30,876
766,064
8,028,571
14,780
45,243,362
$
254,327
520,454
(16,044)
(137,536)
(300,966)
5,780
326,015
Debt Service
Total Expenditures
2,763,743
42,966,883
234,782,980
553,036
7,824,588
15,634,624
10,289,877
89,739,032
14,900,965
11,483,301
430,939,029
50,378,196
481,317,225
2,933,532
45,866,008
234,782,980
553,036
8,645,798
16,054,666
11,177,728
96,635,210
15,374,901
12,015,591
444,039,450
50,378,196
494,417,646
2,679,857
41,694,546
234,782,980
553,036
8,290,946
16,054,666
10,527,591
92,651,803
14,327,846
11,464,135
433,027,406
49,058,501
482,085,907
253,675
4,171,462
354,852
650,137
3,983,407
1,047,055
551,456
11,012,044
1,319,695
12,331,739
37,800,768
37,800,768
679,515
38,480,283
2,000,000
1,196,012
36,722,536
39,918,548
692,175
40,610,723
2,000,000
1,196,012
34,170,270
37,366,282
692,172
38,058,454
2,552,266
2,552,266
3
2,552,269
(Deficiency)/Excess of Revenues
Over Expenditures
(19,103,311)
(32,203,732)
(10,037,966)
22,165,766
6,437,064
4,306,624
7,184,908
2,878,284
20,357,278
19,511,701
(20,765,668)
-
33,771,469
19,511,701
(21,079,438)
70,065,844
(70,065,844)
8,899,297
19,172,940
(21,029,438)
59,750,398
13,310,613
(70,065,844)
(24,872,172)
(338,761)
50,000
(10,315,446)
13,310,613
-
8,798,071
45,000
(15,280,135)
-
10,928,511
45,000
(15,280,135)
-
7,730,771
37,065
(15,280,135)
327,391
-
(3,197,740)
(7,935)
327,391
-
19,103,311
32,203,732
10,037,966
(22,165,766)
(6,437,064)
(4,306,624)
(7,184,908)
(2,878,284)
-
-
OTHER FINANCING SOURCES (USES)
Appropriated Fund Balance
Transfers In
Transfers (Out)
Issuance of Refunding Bonds
Premium on Issuance of Bonds
Issuance of Installment Purchase Agreements
Payment to Escrow Agent for Refunding
Total Other Financing
Sources (Uses)
Net Change in Fund Balances
$
-
$
$
-
$
-
$
-
-
Less: Appropriated Fund Balance
(8,899,297)
(7,730,771)
Fund Balance - Beginning
Prior Year Encumbrances Cancelled
Decrease in Inventory
97,048,543
201,317
-
21,391,561
49,085
(102,904)
Fund Balance - Ending
$
88,350,563
$
$
-
13,606,971
(continued)
20
The accompanying notes to the basic financial statements are an integral part of this statement.
HARFORD COUNTY, MARYLAND
Statement of Revenues, Expenditures, Encumbrances
And Changes in Fund Balances
Budgetary Basis (Non-GAAP) vs. Actual
Governmental Funds
For the Year Ended June 30, 2013
(continued)
Agricultural Land Preservation
Exhibit 6
Variance With
Final Budget
Positive(Negative)
Budgeted Amounts
Original
REVENUES
Taxes
Revenues from Other Agencies
Investment Income
Charges for Current Services
Miscellaneous
Licenses and Permits
Fines and Forfeitures
Total Revenues
$
EXPENDITURES
Current:
Agricultural Preservation
County Council
General Government
Education-Primary thru Comm. College
Harford Center
Judicial
Libraries
Parks, Recreation and Natural Resources
Public Safety
Public Works
Social Services
Debt Service
Total Expenditures
(Deficiency)/Excess of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Appropriated Fund Balance
Transfers In
Transfers (Out)
Issuance of Refunding Bonds
Premium on Issuance of Bonds
Issuance of Installment Purchase Agreements
Payment to Escrow Agent for Refunding
Total Other Financing
Sources (Uses)
Net Change in Fund Balances
$
Final
4,800,000
98,000
769,552
17,220
5,684,772
$
Actual Amounts
4,800,000
98,000
769,552
17,220
5,684,772
$
5,427,413
46,081
(981,074)
26,236
4,518,656
627,413
(51,919)
(1,750,626)
9,016
(1,166,116)
579,090
579,090
6,324,868
6,903,958
3,585,834
3,585,834
6,324,868
9,910,702
2,486,783
2,486,783
6,229,808
8,716,591
(1,219,186)
(4,225,930)
(4,197,935)
27,995
1,219,186
-
1,225,930
3,000,000
-
2,184,840
2,013,095
-
958,910
(986,905)
-
1,219,186
4,225,930
4,197,935
(27,995)
-
-
-
$
Less: Appropriated Fund Balance
(2,184,840)
Fund Balance - Beginning
Prior Year Encumbrances Cancelled
Decrease in Inventory
53,799,556
-
Fund Balance - Ending
$
21
The accompanying notes to the basic financial statements are an integral part of this statement.
$
51,614,716
1,099,051
1,099,051
95,060
1,194,111
$
-
HARFORD COUNTY, MARYLAND
Statement of Net Position
Proprietary Funds
June 30, 2013
ASSETS
Current Assets:
Equity in Pooled Cash and Investments
Cash and Investments
Restricted Assets - Investments
Taxes and Accounts Receivable (Net)
Federal and State Receivable
Inventories
Benefit Assessments
Total Current Assets
Noncurrent Assets:
Benefit Assessments
Unamortized Bond/Lease Costs
Capital Assets, Net of Depreciation
Land
Construction in Process
Property, Plant & Equipment
Total Capital Assets
Total Noncurrent Assets
Total Assets
Exhibit 7
Governmental Activities
Internal Service Fund
Business-Type Activities
Enterprise Fund, Water and Sewer
$
75,838,475
650
12,191,946
7,137,783
6,748,977
1,452,823
3,041,282
106,411,936
$
12,809,950
8,658
12,818,608
34,086,599
804,183
-
2,027,385
65,317,927
365,931,409
433,276,721
468,167,503
574,579,439
12,818,608
755,496
2,433,081
2,982,358
1,123,393
2,549,702
27,218
191,298
2,620,308
19,096
1,179,446
7,288,490
193,444
21,363,330
33,014
870,667
903,681
2,046,263
124,987,735
127,033,998
148,397,328
4,830,653
4,830,653
5,734,334
322,126,658
104,055,453
426,182,111
7,084,274
7,084,274
LIABILITIES
Current Liabilities:
Accounts Payable
Accounts Payable from Restricted Assets
Retainage Payable from Restricted Assets
Payable to the State of Maryland
Accrued Expenses
Unearned Revenue
Performance Deposits
Escrow Accounts
Other Liabilities
Compensated Absences-Current
Bonds Payable-Current
Leases Payable-Current
Estimated Current Liability for Claims in Process
Total Current Liabilities
Noncurrent
Compensated Absences
Bonds Payable
Estimated Liability for Claims in Process
Total Noncurrent Liabilities
Total Liabilities
NET POSITION
Net Investment in Capital Assets
Unrestricted
Total Net Position
The net result of the look-back approach for consolidating the
Internal Service fund is an interfund payable for the business-type
activities in the Statement of Net Position
Net Position of Business-Type Activities
(227,251)
$
The accompanying notes to the basic financial statements are an integral part of this statement.
22
425,954,860
$
HARFORD COUNTY, MARYLAND
Statement of Revenues, Expenses, and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30, 2013
Exhibit 8
Governmental Activities
Internal Service Fund, Self Insurance
Business-Type Activities
Enterprise Fund, Water and Sewer
Operating Revenues:
Charges for Services
Income from Water Operations
Income from Sewer Operations
Miscellaneous
Total Operating Revenues
$
11,892,796
12,555,587
1,730,842
26,179,225
Operating Expenses:
General and Administrative Expenses
Operations and Maintenance-Water
Operations and Maintenance-Sewer
Insurance Claims and Expenses
Depreciation
Total Operating Expenses
Operating (Loss) Income
$
4,566,407
4,566,407
4,972,536
15,323,700
14,338,838
10,824,244
45,459,318
(19,280,093)
4,433,001
4,433,001
133,406
1,783,159
648,672
2,534,663
(4,417,177)
(240,064)
309,253
21,382
21,382
Income Before Contributions
(18,970,840)
154,788
Capital Contributions
Change in Net Position
Total Net Position--Beginning
Total Net Position--Ending
$
32,698,896
13,728,056
412,454,055
426,182,111
$
13,728,056
Non-operating Revenues (Expenses):
Recordation Tax Revenue
Federal Grant Revenue
Interest Income
Interest Expense
Other Income (Expense)
Total Non-operating Revenue (Expenses)
Reconciliation of the Statement of Revenues, Expenses and Changes in Fund
Net Position of the Enterprise Fund to the Statement of Activities:
Net change in Net Position -- total business type activities
Eliminating the effect of the internal service fund, using the "look-back" method
resulted in increased expenses in the enterprise fund
Change in Net Position of Business Type Activities
15,435
$
13,743,491
The accompanying notes to the basic financial statements are an integral part of this statement.
23
$
154,788
6,929,486
7,084,274
HARFORD COUNTY, MARYLAND
Statement of Cash Flows
Proprietary Funds
For The Year Ended June 30, 2013
Exhibit 9
Business Type Activities
Enterprise Fund, Water and Sewer
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers
Receipts from Interfund Services Provided
Receipts from Others for Claims
Receipts from Customer Deposits
Payment of Deposits to Customer
Payments to Employees for Services
Payments to Suppliers for Goods and Services
Payments for Claims
Net Cash Provided By (Used In) Operating Activities
$
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets
Principal Payments on Long Term Debt
Bond/Lease Service Costs
Interest Paid on Bonds/Leases
Proceeds from Federal and State Grants
Recordation Tax Revenue
Tap Fees in Excess of Connection Costs
Proceeds from Bond Sale
Premium and Accrued Interest, net of Underwriters Fees
Proceeds from Rental Income
Proceeds from Sale of Capital Assets
Net Cash (Used in) Capital and Related Financing Activities
25,801,934
426,951
(1,533,462)
(15,326,095)
(18,736,798)
(9,367,470)
(15,124,042)
Cash and Cash Equivalents, July 1
103,155,113
NON-CASH INVESTING, CAPITAL AND FINANCING ACTIVITIES
Developer Contributions of Capital Assets to the Water and Sewer Fund
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO EXHIBIT 7
Equity in Pooled Cash and Investments
Cash and Investments
Investments - Current Restricted Assets
Cash and Cash Equivalents, June 30
4,400,312
157,537
(428,743)
(3,613,865)
515,241
-
2,536,224
2,536,224
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, June 30
$
(47,096,062)
(25,993,852)
(464,599)
(5,185,242)
17,009,597
1,744,969
23,798,120
24,909,602
2,804,960
141,573
38,138
(8,292,796)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income
Net Cash Provided by Investing Activities
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating (Loss) Income
Adjustments to Reconcile Operating (Loss) Income to Net Cash Provided By (Used In) Operating Activities:
Depreciation
(Increase) Decrease in Accounts Receivable
(Increase) Decrease in Inventory
Increase (Decrease) in Accounts Payable
Increase (Decrease) in Accrued Expenses
Increase (Decrease) Estimated Payables for Future Claims
Increase (Decrease) in Performance Deposits
Increase (Decrease) in Escrow Accounts
Increase (Decrease) in Deferred Revenue
Increase (Decrease) in Other Liabilities
Increase (Decrease) in Compensated Absences
Net Cash Provided By (Used In) Operating Activities
Governmental Activities
Internal Service Fund, Self Insurance
21,382
21,382
536,623
12,273,327
$
88,031,071
$
12,809,950
$
(19,280,093)
$
133,406
$
10,824,244
(208,288)
(45,751)
425,272
(8,370)
104,901
(1,217,031)
(163,384)
1,002
200,028
(9,367,470)
$
(8,558)
(3,228)
393,621
515,241
$
7,546,607
$
-
$
75,838,475
650
12,191,946
88,031,071
$
12,809,950
12,809,950
$
The accompanying notes to the basic financial statements are an integral part of this statement.
24
$
HARFORD COUNTY, MARYLAND
Statement of Fiduciary Net Position
June 30, 2013
Exhibit 10
Pension Trust
Funds
ASSETS
Equity in Pooled Cash and Investments
Accounts Receivable
Investments, at Fair Value
Cash Equivalents
Fixed Income Fund
Equities & Equivalents
Total Investments
Total Assets
$
LIABILITIES
Accounts Payable
Deferred Revenue
Due to Beneficiaries
Total Liabilities
NET POSITION
Held in Trust for pension benefits and other purposes $
Other Post Employment
Trust Fund
673,161 $
-
4,120,919 $
-
Private Purpose
Trust Funds
1,460,599 $
20,258
Agency
Fund
-
1,624,497
18,255,641
40,578,649
60,458,787
61,131,948
1,412,511
14,873,449
41,115,745
57,401,705
61,522,624
1,038,208
1,038,208
2,519,065
11,362,160
11,362,160
11,362,160
38,059
38,059
16,127
16,127
25,592
1,038,208
1,063,800
11,362,160
11,362,160
61,093,889 $
61,506,497 $
The accompanying notes to the basic financial statements are an integral part of this statement.
25
1,455,265 $
-
HARFORD COUNTY, MARYLAND
Statement of Changes in Fiduciary Net Position
For Fiscal Year Ending June 30, 2013
Exhibit 11
Pension Trust
Funds
ADDITIONS
Contributions and Donations
Employee Contributions
Employer Contributions
Plan Sponsor Contributions
Retiree Contributions
Total Contributions
Investment Earnings
Net Appreciation in Fair Value of Investments
Interest and Dividends
Total Investment Earnings
Less Investment Expense
Net Investment Income
Total Additions
$
DEDUCTIONS
Administrative Expenses
Benefits
Contractual Service
Total Deductions
Change in Net Position
Net Position--Beginning of the Year
Net Position--End of the Year
$
- $
450,816
2,287,714
1,970,503
4,709,033
Other Post Employment
Benefit Trust Fund
Private Purpose
Trust Funds
- $
13,757,000
677,409
14,434,409
294,419
294,419
5,272,447
1,202,512
6,474,959
248,205
6,226,754
10,935,787
4,931,651
1,016,189
5,947,840
241,733
5,706,107
20,140,516
6,646
6,646
6,646
301,065
103,342
3,818,366
3,921,708
7,014,079
13,000
5,780,853
5,793,853
14,346,663
225,862
225,862
75,203
54,079,810
61,093,889 $
The accompanying notes to the basic financial statements are an integral part of this statement.
26
47,159,834
61,506,497 $
1,380,062
1,455,265
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
INDEX
NOTE 1
NOTE 2
NOTE 3
NOTE 4
Summary of Significant Accounting Policies
A.
Financial Reporting Entity
B.
Government-Wide and Fund Financial Statements
C.
Measurement Focus, Basis of Accounting, and
Financial Statement Presentation
D.
Assets, Liabilities and Net Position or Equity
a.
Pooled Cash and Investments
b.
Property Taxes Receivable and Other Receivables
c.
Inventories
d.
Restricted Assets
e.
Capital Assets
f.
Compensated Absences
g.
Long-term Obligations
h.
Net Position/Fund Balances
i.
Estimated Liability for Claims in Process
j.
Estimates
E.
Implementation of New Accounting Principles
Reconciliation of Government-Wide and Fund Financial Statements
A.
Explanation of Certain Differences Between the
Governmental Funds Balance Sheet and the GovernmentWide Statement of Net Position
B.
Explanation of Certain Differences Between the
Governmental Funds Statement of Revenues, Expenditures,
And Changes in Fund Balances and the Government-Wide
Statement of Activities
Stewardship, Compliance and Accountability
A.
Budgetary Data
B.
Reconciliation of GAAP to Basis of Budgeting
Detailed Notes on all Funds
A.
Equity in Pooled Cash and Investments, Cash and
Investments
a.
Deposits
b.
Investments
B.
Receivables
a.
Taxes and Others
b.
Deferred Revenue
c.
Lease Receivables
C.
Capital Assets
D.
Operating Leases
E.
Interfund Receivables, Payables and Transfers
a.
Due from Primary Government and Due to
Component Units
b.
Interfund Transfers
28
30
31
31
34
34
35
36
36
36
37
37
38
39
39
39
40
40
42
43
44
44
46
49
49
50
51
52
56
56
56
57
F.
G.
NOTE 5
Non-current Liabilities
a.
Changes in Non-current Liabilities
b.
Agricultural Land Preservation Installments
c.
Bonds Payables
d.
Capital Lease Obligations
e.
Notes Payable
f.
Landfill Closure Liability
g.
Advanced Refunding of Debt
h.
Prior Period Defeasance of Debt
Fund Balance – Governmental Activities
Other Information
A.
Self-Insurance
B.
Commitment and Contingencies
C.
Arbitrage Rebate Requirements
D.
Conduit Debt
E.
Retirement Plans
a.
Pension Plans – Teachers and Classified Employees
b.
Length of Service Award Program – Volunteer Firemen
c.
Pension Plan – Sheriff’s Office Pension System
d.
Pension Plans – Component Units
F.
Other Post Employment Benefit Plans
29
58
58
60
61
64
66
67
68
69
69
70
71
72
72
73
73
74
76
78
78
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. FINANCIAL REPORTING ENTITY
Harford County Government (the County) was formed in 1773. Under home rule, as approved during 1972, the
County is governed by an elected County Executive and a seven-member County Council, with each serving
separate executive and legislative functions. The accompanying financial statements include various agencies,
departments, organizations and offices which are legally part of Harford County (the Primary Government) and
the County’s Component Units. The Primary Government’s major operations include health and social services,
public safety, public works, parks and recreation, road and highway administration, agricultural preservation and
general administrative services. Harford Community College, Harford County Public Schools, Harford County
Public Library and Harford Center, Inc. are legally separate organizations included as component units.
Component units have been included within the financial reporting entity using a discrete presentation. Discrete
presentations in the combined financial statements are created with separate columns for the individual
component unit in the government-wide financial statements (see note below for description and for the specific
factors that led to the inclusion in our financial statements) to emphasize that it is legally separate from the
government. The component units do not provide services entirely, or almost entirely, to the County nor are any
of the governing boards substantially the same, but the component units have a financial benefit/burden
relationship with the County, as outlined below.
Harford Community College – Operates the community college in Harford County. The College receives
the major portion of its funding from Harford County Government and cannot issue debt or levy taxes.
Harford County Public Schools – Operates all public schools (grades K through 12) within Harford County.
The Harford County Public Schools receives the major portion of its funding from Harford County
Government and cannot issue debt or levy taxes.
Harford County Public Library – Operates all public libraries within Harford County. The Library receives
the major portion of its funding from Harford County Government and cannot issue debt or levy taxes.
Harford Center, Inc. – Operates a rehabilitation center for disabled individuals in Harford County. The
Harford Center is partially funded by Harford County Government appropriations under Maryland State
law. The Harford Center’s 15 members of the Board of Directors are appointed by the County Executive.
Complete financial statements of individual component units can be obtained from their respective
administrative offices listed below:
Harford Community College
401 Thomas Run Road
Bel Air, Maryland 21015
Harford County Public Schools
102 South Hickory Avenue
Bel Air, Maryland 21014
Harford Center, Inc.
4 North Earlton Road
Havre de Grace, Maryland 21078
Harford County Public Library
1221-A Brass Mill Road
Belcamp, Maryland 21017
30
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Government-wide Financial Statements: The statement of net position and the statement of changes in
net assets, report information on all activities of the primary government and its component units, excluding
fiduciary funds. The effect of interfund activity, such as transfers between funds, has been removed from these
statements to minimize the double counting of internal activities. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support. Likewise, the primary government is reported
separately from certain legally separate component units for which the primary government is financially
accountable or for which their relationship with the County is of such significance that exclusion would cause
the County’s financial statements to be misleading.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or
segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported as general revenues.
Fund Financial Statements: Separate financial statements are provided for governmental funds, proprietary
funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements.
Major governmental funds and enterprise funds are reported as separate columns in the fund financial
statements.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting, with the exception of agency funds, which
have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for
which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized when they become susceptible to
accrual—that is, when they become both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities of the current
period. For this purpose, the government considers revenues to be available if they are collected within 60 days
of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under
accrual accounting. However, debt service expenditures, as well as expenditures related to compensated
absences and claims and judgments, are recorded only when payment is due. General capital asset acquisitions
are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are
reported as other financing sources.
31
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Property taxes, income taxes, state shared tax revenues, and interest associated with the current fiscal period are
all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
Only the portion of special assessments receivable due within the current fiscal period is considered to be
susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable
and available only when cash is received by the government.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources of
the general government, except those required to be accounted for in another fund. For the
County, the General Fund includes such activities as public safety, education, and recreation
services.
The Highways Operating Fund accounts for dedicated property tax revenues that are legally restricted to
the maintenance, care, and repair of roads and bridges located outside the boundaries of the
three incorporated municipalities in Harford County, all expenses of the County Department of
Public Works concerning county highways, all expenses of the County and/or Sheriff’s Office
regarding traffic patrol and highway safety and County-related transportation expenses.
The Grants Fund accounts for the receipt, appropriation and expenditure of federal, state, local and
private monies designated for a particular purpose or have specific requirement associated with
eligible program cost.
The Agricultural Land Preservation Fund accounts for dedicated transfer tax revenue that is legally
restricted to the purchases of County agricultural land easements.
The Capital Project Fund accounts for financial resources to be used for the acquisition or construction
of major capital facilities of all major and non-major governmental funds as well as the Public
Schools, Community College and the Public Library.
The Beechtree Tax Increment Financing (TIF) accumulates the incremental property tax revenues
related to the Beechtree Estates Project (Project) created in 2011 and also any special tax
imposed on the Project. The funds are used to pay the principal and interest on the special
obligation bonds, the proceeds of which fund capital improvements within the Project. Any
unused funds over contractual reserves revert to the General Fund at the end of the fiscal year.
The government reports the following major proprietary fund:
The Water and Sewer Fund accounts for the operation, construction or acquisition of capital assets and
related debt service cost of the public water and sewer facilities.
32
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Additionally, Harford County Government reports the following additional fund types:
Internal Service Funds:
Self-Insurance Fund: This fund was established to account for the County’s self-insurance
program, which covers all County government agencies.
Pension, Other Employee Benefit Trust Funds, and Length of Service Award Program:
Sheriff’s Office Pension System: This trust fund was established to account for the pension
system of certain law enforcement and correctional employees of the Office of the Sheriff of
Harford County.
Firemen’s Length of Service Award Program (LOSAP): This fund was established to account
for the LOSAP for the volunteer fire personnel serving the various independent volunteer fire
companies in the County.
OPEB (Other Post Employment Benefits): This trust fund was established to account for the
County’s other post-employment benefits; the trust fund will act as a funding mechanism for the
employers cost of retiree benefits.
Private Purpose Trust Funds are used to account for resources legally held in a trustee capacity and
are comprised of:
BVL Cooperating Parties Group: This private purpose trust fund was established in September
1996 to account for revenues collected from potentially responsible parties for the purpose of
undertaking the design and construction of the remedial systems deemed necessary at the Bush
Valley Landfill Site.
Bar Library Trust Fund: The Bar Library private purpose trust fund was established in 1999 to
account for all expenditures associated with the operations of the Bar Library of the Circuit
Court of Harford County. Fines and appearance fees provide the source of revenues.
Agency Funds are resources held in a purely custodial capacity and are comprised of:
Pass-Through Grants: This fund accounts for financial assistance received from other
governments and transferred to another government, individual, not-for-profit or other
organization. Harford County Government serves as an agent with little or no discretion in
determining how the assistance will be used.
Harford County Public Entities Healthcare Consortium: This fund was established to account
for a rate stabilization reserve fund created for the Harford County Public Entities Healthcare
Consortium. The consortium was formed for the purpose of pooling resources to purchase
health insurance thereby reducing administrative expenses. Harford County Government serves
as an agent with little or no discretion in determining how the funding will be directed.
33
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are
followed in the government-wide, the proprietary and the fiduciary fund financial statements to the extent that
those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board.
Governments must follow subsequent private-sector guidance for their business-type activities and enterprise
funds, subject to this same limitation.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the water
and sewer function and various other functions of the government. Elimination of these charges would distort
the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or
privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including
special assessments. Internally dedicated resources are reported as general revenues rather than as program
revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues of the Water and Sewer Fund
are charges to customers for sales and services. The principal operating revenues of the Self-Insurance Fund are
budget allocations from contributing County programs. Operating expenses for the Water and Sewer Fund
include the cost of sales and services, administrative expenses, and depreciation on capital assets. Operating
expenses for the Self Insurance Fund include insurance claims and expenses. All revenues and expenses not
meeting this definition are reported as non-operating revenues and expenses. When both restricted and
unrestricted resources are available for use, it is the government’s policy to use restricted first, and then
unrestricted resources as they are needed.
D. ASSETS, LIABILITIES AND NET POSITION OR EQUITY
a. POOLED CASH AND INVESTMENTS
The County operates a cash and investment pool for all funds of the Primary Government. Each fund has been
allocated its respective share of pooled cash and investments as reflected in the fund financial statements as
“equity in pooled cash and investments.” In addition to participating in the County’s cash and investment pool,
each fund may maintain their own separate cash and investments that are specific to the individual fund. Based
on an average daily balance of each fund’s equity in pooled cash and investments, investment income earned on
the cash and investment pool is distributed monthly to the General, Highways, Grant, Agricultural Land
Preservation, Capital Projects, Beechtree TIF, Parks & Recreation, Water and Sewer Enterprise, Self-Insurance,
two Private Purpose Trust Funds, Sheriff’s Office Pension Fund, Length of Service Award Program (LOSAP),
Other Post Employment Benefits Trust (OPEB), and Agency Fund. Investment income earned on individual
funds’ separate cash and investments is recorded monthly in the corresponding fund. Per management policy,
investment income earned monthly by general county capital projects is transferred to the General Fund and
investment income earned monthly on highways capital projects is transferred to the Highways Fund.
34
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
For purposes of the statement of cash flows, the County considers cash, equity in pooled cash and investments,
and investments with maturities of three months or less, when acquired, to be cash equivalents.
State statutes authorize the County to invest in obligations of the United States Government, federal government
agency obligations, secured time deposits in Maryland banks, bankers’ acceptances, the Maryland Local
Government Investment Pool, money market mutual funds, commercial paper and repurchase agreements
secured by direct government or agency obligations.
The Maryland Local Government Investment Pool, (the “MLGIP”) was created under Maryland State Law and
is regulated by the Maryland State Treasurer’s Office. It is maintained exclusively to assist eligible participants,
as defined by Article 95, Section 22 of the Annotated Code of Maryland. The MLGIP may invest in any
instrument in which the State Treasurer may invest. Permissible instruments are established by Sections 6-222
and 6-223 of the State Finance and Procurement Article. No direct investment may have a maturity date of more
than 13 months after its acquisition. Securities of the MLGIP are valued daily on an amortized cost basis, which
approximates market value, and are held to maturity under normal circumstances.
The fair value of the position in the MLGIP is the same as the value of the MLGIP net assets (shares). The
MLGIP is like a 2a-7 external investment pool, which issues a publicly available financial report that includes
financial statements and required supplementary information for the MLGIP. This report can be obtained by
writing: Maryland Local Government Investment Pool; c/o PNC Institutional Investments Group; One East Pratt
Street; Baltimore, Maryland, 21202; by calling 1-800-492-5160 or the website, www.mlgip.com.
The County has an independent third party as custodian for securities collateralizing most repurchase
agreements, certificates of deposit and all other investments. Collateralization is required on repurchase
agreements and certificate of deposits at a level of 102 percent of market value of principal plus accrued interest.
In order to mitigate risk, the County continually monitors the financial condition of this third party custodian.
Investments of the County are recorded at fair value, which is the quoted market price provided by Harford
County’s Custodian, except for the investments in the MLGIP and Money Market funds. MLGIP investments
are recorded at cost, which approximates fair value. Investments in Money Market funds are valued at the
closing net asset value per share on the day of valuation. Changes in fair value are reported as increases or
decreases in investment income in the operating statements of the appropriate fund.
b. PROPERTY TAXES RECEIVABLE AND OTHER RECEIVABLES
The County’s real property tax is levied and recorded each July 1 on the assessed values certified as of that date
for all taxable real property located in the County on that date. On January 1, a tax on real property constructed
during the period of July 1 through December 31 is levied on the assessed value as of that date. Assessed values
are established by the Maryland Department of Assessments and Taxation at assessed market value. A
reassessment of all property is required to be completed every three years. All unpaid taxes on real property
shall be, until paid, liens on the real property. The lien is imposed on the date the taxes are levied.
Currently, home-owner occupied real property taxes are billed in two installments. The first installment is due
by September 30 and the second installment is due by December 31.
35
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Discounts of 1 percent and 1/2 percent are allowed on the amount paid in July or August respectively for both
annual and semi-annual real property tax payments. Beginning October 1, interest of 1½ percent per month is
charged for each month or fraction thereof that taxes remain unpaid on annual bills. Interest of 1½ percent per
month is not charged on the second semi-annual installment until January 1. In addition to interest, a 6 percent
penalty is assessed on all unpaid delinquent property taxes on October 1. A penalty of 6 percent is imposed on
the semi-annual installment overdue and in arrears on January 1. Any taxes not paid by the third Monday in
June may subject the property to tax sale.
The County’s real property tax rate for the year ended June 30, 2013, was $1.042 per $100 of assessed value for
properties within the County, but not in an incorporated town and $0.896 for properties within an incorporated
town.
All receivables are reported at gross value and, where appropriate, reduced by the estimate considered to be
uncollectible.
Inter-fund receivables and payables arise from inter-fund transactions and are recorded by all funds affected in
the period in which transactions are executed. Any residual balances outstanding between the governmental
activities and business-type activities are reported in the government-wide financial statements as “internal
balances.”
c. INVENTORIES
All inventories are valued at the lower of cost or market using the First-In/First-Out (FIFO) method. Nonspendable fund balance for the Highway Fund inventories has been reported in the governmental fund
statements to reflect the non-availability of those amounts for appropriation or expenditure. Inventories in the
Highways special revenue fund are accounted for by the purchase method.
d. RESTRICTED ASSETS
Certain assets of the Governmental Activities and Business-type Activities are classified as restricted assets on
the Statement of Net Position. These assets include unspent bond proceeds limited by applicable bond
covenants to specific capital projects and investments in strip treasuries held to maturity for the final payment on
the purchase of County agricultural easements.
e. CAPITAL ASSETS
Capital assets, including property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar
items), are recorded at historical cost or at estimated historical cost if actual historical cost is not available.
Donated capital assets are recorded at estimated fair market value at the date of donation. Interest expense is not
capitalized in the current or amortized year due to immateriality. The government defines capital assets as assets
that have an estimated useful life in excess of one year, and have an individual cost that meets or exceeds the
minimal capitalization thresholds it has established for that asset class. There is no minimum dollar requirement
established for Land, Easements and Development Rights. Capital assets used in operations are depreciated or
amortized using the straight-line method over their estimated useful lives. Interest expense is not capitalized in
the current year due to immateriality.
36
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Capital Assets, being depreciated or amortized:
Initial Cost in Excess of
$50,000
$50,000
$15,000
$15,000
$15,000
$100,000
Buildings
Improvements other than Buildings
Machinery and Equipment
Vehicles
Intangibles
Infrastructure
The estimated useful lives are as follows:
Assets
Buildings
Improvements other than Buildings
Machinery and Equipment
Vehicles
Intangibles:
Software
Infrastructure:
Bridges
Roads
Water and Sewer Lines and Improvements
Years
40-50
5-15
5-10
7
5-10
35-45
15
10-75
The cost of normal maintenance and repair that do not add to the value of the asset or materially extend the
asset’s life is not capitalized. Upon sale or retirement of capital assets, the cost and related accumulated
depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of
operations.
f. COMPENSATED ABSENCES
Vacation and personal leave benefits are earned by employees of the County based upon time in service. The
rights to such benefits are vested. Employees, based on time in service, also accumulate sick leave.
Accumulated sick leave benefits do not vest and are not paid unless sickness causes absence or upon retirement.
At retirement, up to one-half of an employee’s sick leave may be paid and the remaining balance is credited to
their retirement. Vested sick leave is calculated at year-end using the terminated payments method. In the
government-wide financial statements, proprietary fund and fiduciary funds financial statements, all vacation,
personal, and vested sick pay are accrued when incurred. A liability for these amounts is only reported in
governmental funds for the portion estimated to be due and payable at year-end.
g. LONG-TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund financial statements, non-current obligations
are reported as liabilities in either governmental activities, or business-type activities, in the statement of net
position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of
the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or
discount and deferred gains and losses.
37
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as
bond issuance costs, during the current period. The face amount of debt issued is reported as other financing
sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt
issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt service expenditures.
h. NET POSITION/FUND BALANCES
The government-wide financial statements utilize a net position presentation. The statement of net position
should report assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position.
Net position represents the difference between all other elements in a statement of financial position and should
be displayed in three components: net investment in capital assets, restricted and unrestricted. The net
investment in capital component of net position consists of capital assets, net of accumulated depreciation,
reduced by the outstanding debt directly attributable to the acquisition, construction, or improvement of those
assets. The restricted component of net position consist of restricted assets reduced by liabilities and deferred
inflows of resources related to those assets. The unrestricted component of net position is the net amount of the
assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the
determination of net investment in capital assets or the restricted component of net position.
In the fund financial statements, fund balance for governmental funds is reported in classifications that comprise
a hierarchy based primarily on the extent to which the County is bound to honor constraints on the specific
purpose for which amounts in the funds can be spent. Fund balance is reported in five components –
nonspendable, restricted, committed, assigned and unassigned.
Nonspendable – This component includes amounts that cannot be spent because they are either (a) not in
spendable form or (b) legally or contractually required to be maintained intact.
Restricted – This component consists of amounts that have constraints placed on them either externally
by third-parties (creditors, grantors, contributors, or laws or regulations of other governments) or by law
through constitutional provisions or enabling legislation. Enabling legislation authorizes the County to
assess, levy, charge or otherwise mandate payment of resources (from external resource providers) and
includes a legally enforceable requirement (compelled by external parties) that those resources be used
only for the specific purposes stipulated in the legislation.
Committed – This component consists of amounts that can only be used for specific purposes pursuant
to constraints imposed by formal action of the County’s highest level of decision making authority. The
highest level of decision-making action is legislation which is enacted by the Harford County Council
(the highest level of decision-making authority). Those committed amounts cannot be used for any
other purpose unless the County removes or changes the specified use by taking the same type of action
it employed previously to commit those amounts.
Assigned – This component consists of amounts that are constrained by the County’s intent to be used
for specific purposes, but are neither restricted nor committed. The authority for assigning fund balance
is expressed by the County Executive or their designee.
Unassigned – This classification represents amounts that have not been restricted, committed or
assigned to specific purposes within the general fund.
38
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted
resources first, then unrestricted resources (committed, assigned and unassigned) as they are needed. When
unrestricted resources (committed, assigned and unassigned) are available for use it is the County’s policy to use
committed resources first, then assigned, and then unassigned as they are needed.
i. ESTIMATED LIABILITY FOR CLAIMS IN PROCESS
The liability for claims in process in the Internal Service Fund includes estimates for personal injury, worker’s
compensation, property damage and medical claims as of June 30, 2013. The liability is based on estimates
made on an individual claim basis plus an actuarial estimate of the liability for claims incurred but not reported.
j. ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenditures during the reporting period. Actual results
could differ from those estimates.
E. IMPLEMENTATION OF NEW ACCOUNTING PRINCIPLES
The County has adopted the provision of Governmental Accounting Standard Board (GASB) issued Statement
No. 60, entitled Accounting and Financial Reporting for Service Concession Arrangements; Statement No. 61,
entitled The Financial Reporting Entity: Omnibus-an amendment of GASB No. 14 and No. 34; Statement No.
62, entitled Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989
FASB and AICPA Pronouncements; and Statement No. 63, entitled Financial Reporting for Deferred Outflows
of Resources, Deferred Inflows of Resources, and Net Position.
As of the year ended June 30, 2013, GASB issued Statement No. 65, entitled Items Previously Reported as
Assets and Liabilities; Statement No. 66, entitled Technical Corrections - 2012 – an amendment of GASB
Statements No. 10 and No. 62; Statement No. 69, entitled Government Combinations and Disposals of
Government Operations and Statement No. 70, entitled Accounting and Financial Reporting for Nonexchange
Financial Guarantees. These Statements will not have a material effect on the County’s financial statements
upon implementation.
GASB also issued Statement No. 67, entitled Financial Reporting for Pension Plans and Statement No. 68,
entitled Accounting and Financial Reporting for Pensions, an amendment of GASB Statement No. 27. These
Statements will have a material effect on the County’s financial statements once implemented.
The County is analyzing the effects of these pronouncements and plans to adopt them as applicable by their
effective date.
39
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUNDS
BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET POSITION
The governmental funds balance sheet includes a reconciliation between fund balance – total governmental
funds and net position – governmental activities as reported in the government-wide statement of net position.
One element of that reconciliation explains that “long-term liabilities, including bonds payable, compensated
absences, bond premium, and accrued bond interest are not due and payable in the current period and therefore
are not reported in the funds.” The details of this difference are as follows:
Accrued Bond Interest
Agricultural Preservation Installments
Bonds Payable
Capital Lease Obligations
Notes Payable
Landfill Closure Liability
Compensated Absences
$
9,875,553
61,104,712
462,229,857
1,294,584
3,070,721
40,334,763
27,857,660
$
605,767,850
B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
The governmental funds statement of revenues, expenditures, and changes in fund balances includes a
reconciliation between the net change in fund balances – total governmental funds and changes in net position
of governmental activities as reported in the government-wide statement of activities. One element of that
reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated useful lives and reported as
depreciation expense.” The details of this difference are as follows:
$
Purchase of Capital Assets
Depreciation
$
40
30,214,888
(23,450,780)
6,764,108
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS –
CONTINUED
Another element of that reconciliation states that “Revenues in the statement of activities that do not provide
current financial resources are not reported as revenues in the funds.” The details of this difference are as
follows:
Contributed Assets
$
7,356,866
Trade in Value of Assets
278,075
Loss on Disposal of Assets
(102,387)
Increase in Property Tax Deferred Revenue
69,428
Decrease in Income Tax Deferred Revenue
(13,613,929)
Increase in Deferred Loans Receivable
47,166
Increase in Deferred Special Assessments
8,656
(2,085)
Decrease in Restitution Deferred Revenue
Increase in Deferred Revenues from First Vehicle Service
334,656
Decrease in Deferred Enterprise Zone Credit
(1,031,869)
$
(6,655,423)
Another element of that reconciliation states that “The issuance of long-term debt (e.g., bonds, leases,
installment purchase agreements) provides current financial resources to governmental funds, while the
repayment of the principal of long-term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has an effect on net position. Also, governmental funds report the effect of
issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are
deferred and amortized in the statements of activities.” The details of this difference are as follows:
Accrued Interest Expense
$
(173,084)
Amortization of Bond Premium
6,345,976
Increase and Amortization of Costs of Issuance
90,320
Amortization of Deferred Loss
(584,678)
Issuance of Bonds Payable
(30,000,000)
Issuance of Installment Purchase Loans
(2,013,095)
Issuance of Refunding Bonds Payable
(59,750,398)
Bond Premium
(13,638,004)
Principal Payments on Refunded Bonds
70,065,844
Principal Payments on General Obligation Debt
33,879,261
$
4,222,142
Another element of that reconciliation states that “Some expenses reported in the statement of activities do not
require the use of current financial resources and therefore are not reported as expenditures in governmental
funds.” The details of this difference are as follows:
Increase in Compensated Absences Liability
$
(2,450,541)
Fixed Assets Donated
(117,309)
Consumption Method of Inventory Used in Entitywide Statements
vs. the Purchase Method used in the Fund Statements
(102,904)
Increase in Deferred Health Care Consortium Receivable
(913,155)
Increase in Landfill Closure Expenses
(343,319)
$
(3,927,228)
41
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 3 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. BUDGETARY DATA
Pursuant to the County Charter, the capital and operating budgets are presented by the County Executive to the
County Council during April. The County Council holds public hearings regarding the budget and prior to June
15, passes an annual appropriation ordinance. The legislation becomes effective July 1 and provides the
spending authority at the department level for the operations of the County Government with unexpended or
unencumbered appropriation authority expiring the following June 30, except in the case of Capital Projects
Funds, where appropriations lapse after three years if no expenditures occur. Under Maryland State Law,
Harford County Public Schools capital projects are exempt from this provision. The appropriated budgets are
prepared by fund, function, and department. Expenditures and encumbrances of the funds may not legally
exceed appropriations at the department level. During the fiscal year, the County Council may adopt
supplemental appropriations. For the year-ended June 30, 2013, supplemental appropriations adopted in the
General Fund were $83,480,035; $2,130,440 in the Highways Fund; $3,006,744 in the Agricultural Land
Preservation Fund; $37,179 in the Parks and Recreation Fund; and $1,829,778 in the Water and Sewer Fund.
Throughout the year, the County Executive has the authority to approve various intradepartmental transfers.
Transfers between departments require the County Council’s approval and are only completed after April 1.
Annual budgets are adopted for the General Fund, Highways Fund, Agricultural Land Preservation Fund, Parks
& Recreation Fund, Beechtree TIF Debt Service Fund, Enterprise Fund, Internal Service Fund, Other Post
Employment Benefit Trust Fund, Firemen’s LOSAP Trust Fund and Sheriff’s Office Pension Trust Fund.
Budgets are not adopted for the remaining private purpose trust funds due to their nature. Enterprise Fund,
Internal Service Fund, Other Post Employment Benefit Trust Fund and Pension Trust Funds budgets are for
management control only. Budgets are adopted using the same basis of accounting as that used for reporting
purposes, except for the following:
•
•
•
Encumbrances are treated as expenditures for budgetary accounting purposes.
Payroll is accrued for financial statement purposes only.
Interfund reimbursements are eliminated for financial statement purposes.
The capital budget reflects appropriations for the Capital Projects Fund at the individual project level.
Expenditures and encumbrances may not legally exceed appropriations at that level and unencumbered
appropriations lapse at the completion or abandonment of individual projects. The County Council and the
County Executive must approve all transfers of appropriations between projects. For the year-ended June 30,
2013, supplemental appropriations adopted in the Capital Project Fund were $363,770.
A Statement of Revenues, Expenditures, Encumbrances and Changes in Fund Balances; Budgetary Basis (NonGAAP) vs. Actual is prepared for the General Fund and each major Special Revenue Fund with an annual
budget. These are the General, Highways and Agricultural Land Preservation.
42
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 3 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY-CONTINUED
B. RECONCILIATION OF GAAP TO BASIS OF BUDGETING
The Governmental Funds, except for Grants and Capital Project Funds, have legally adopted annual budgets.
The “Statement of Revenues, Expenditures, Encumbrances and Changes in Fund Balances; Budgetary Basis
(Non-GAAP) vs. Actual” are prepared on a basis consistent with those budgets. The budgets are prepared using
encumbrance accounting where encumbrances are treated as expenditures of the current period. The “Statement
of Revenues, Expenditures and Changes in Fund Balances” for all major governmental funds is prepared on a
basis consistent with GAAP where encumbrances are treated as an assigned fund balance. The other fund
statements are reconciled below.
As of June 30, 2013, the changes in fund balances are reconciled as follows:
General
Fund
Agricultural
Land
Preservation
Highway
Fund
- $
- $
- $
Basis of Budgeting - Net Change in Fund Balances
$
Basis Adjustments:
Revenue for Budgetary, not GAAP Purposes
Encumbrances Adjustment
Expenditures for Budgetary, not GAAP Purposes
Expenditures for GAAP, not for Budgetary Purposes
Fund Balance Appropriated for Budget not GAAP
(9,096,088)
(471,243)
9,096,088
(23,233)
(8,899,297)
(7,990,886)
70,940
7,990,886
(25,974)
(7,730,771)
(28)
(2,184,840)
GAAP Basis - Net Changes in Fund Balances
(9,393,773) $
(7,685,805) $
(2,184,868) $
$
Parks &
Recreation
86,434
54,038
8,225
148,697
As of June 30, 2013, the ending fund balances are reconciled as follows:
General
Fund
Basis of Budgeting - Fund Balances
$
Basis Adjustments:
Encumbrances
Expenditures for GAAP, not for Budgetary Purposes
88,350,563 $
GAAP Basis - Fund Balances
89,315,296 $
$
3,060,595
(2,095,862)
43
Highway
Fund
13,606,971 $
904,682
(309,375)
14,202,278 $
Agricultural
Land
Preservation
51,614,716 $
(1,113)
51,613,603 $
Parks &
Recreation
468,296
56,099
(6,566)
517,829
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS
A. EQUITY IN POOLED CASH AND INVESTMENTS, CASH AND INVESTMENTS
a. DEPOSITS
PRIMARY GOVERNMENT
Custodial Credit Risk: In the case of deposits, this is the risk that in the event of a bank failure, the County’s
deposits may not be returned to it. At year-end, the carrying amount of combined deposits was ($1,563,702) and
the collected bank balance was $1,179,365. The uninsured balances were fully collateralized by securities
placed with the respective bank escrow agents and held in the County’s name at the Federal Reserve. At June
30, 2013, the County’s deposits were not exposed to custodial credit risk.
The following table reconciles the County’s deposits and investments to the government-wide statement of net
position and the statement of fiduciary net position.
Reconciliation:
Total Primary Government - Exhibit 1
Equity in Pooled Cash and Investments
Cash and Investments
Restricted Assets - Cash and Investments
Pension Trust Funds - Exhibit 10
Equity in Pooled Cash and Investments
Total Investments
Other Post Employment Benefit Trust Fund - Exhibit 10
Equity in Pooled Cash and Investments
Total Investments
Private Purpose Trust Funds - Exhibit 10
Equity in Pooled Cash and Investments
Total Investments
Agency Funds - Exhibit 10
Total Investments
Total All Equity in Pooled Cash
$
238,921,359
43,400
83,683,055
673,161
60,458,787
4,120,919
57,401,705
1,460,599
1,038,208
11,362,160
459,163,353
Less: Investments - Primary Government, page 46
(460,727,055)
The Carrying Amount of Combined Deposits
$
44
(1,563,702)
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
COMPONENT UNITS
At year-end, the carrying amount of combined deposits was $14,601,249. All of the collected bank balance was
insured by the FDIC and/or by securities held by the component unit or its’ agent, in the component unit’s name.
The following table reconciles the Component Unit’s deposits and investments to the government-wide
statement of net position.
Reconciliation:
Cash & Investments for Component Units--Exhibit 1:
Harford County Public Schools
Harford Center, Inc.
Harford Community College
Harford Community College--Restricted
Harford County Public Library
Total Component Unit Cash & Investments
Less: Investments--Component Units; page 48
Cash in the Bank
45
$
$
25,000,650
1,338,364
27,354,896
7,023,887
5,650,028
66,367,825
(51,766,576)
14,601,249
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
b. INVESTMENTS
PRIMARY GOVERNMENT
As of June 30, 2013, the County had the following investments and maturities.
1
2
3
3
3
3
2
Investment Type
Pooled Investments
Federal Agencies
MLGIP
Repurchase Agreements
Mutual Funds
Subtotal
Non-Pooled Investments
MLGIP
U.S. Stripped Treasuries
Trust Fund Annuity Contract
MLGIP - Fiduciary Funds
Benefits and Pension Funds:
Short-Term Investments
Equities
Fixed Income Funds
US Government Agencies
Corporate Bonds
US Treasury Obligations
Subtotal
Total
$
Fair Value
88,971,641 $
92,814,109
60,012,350
4,985,041
246,783,141
34,809,778
48,873,277
1,038,208
11,362,160
$
Investment Maturities (Years)
Less than 1
1-5
20,063,741 $
68,907,900 $
92,814,109
60,012,350
4,985,041
177,875,241
68,907,900
34,809,778
1,347,575
34,639
11,362,160
3,037,009
81,694,393
5,950,111
644,571
12,792,658
13,741,749
213,943,914
460,727,055 $
3,037,009
81,694,393
5,950,111
99,061
2,025,598
468,358
140,828,682
318,703,923 $
32,817,081
211,157
543,153
9,007,690
8,397,034
50,976,115
119,884,015 $
5+
-
14,708,621
792,412
2,357
1,759,370
4,876,357
22,139,117
22,139,117
1
These Agencies mature in Fiscal Years 2014 and 2015, but are callable monthly, quarterly, and semi-annually
until maturity; it is not anticipated that these Agencies will be called.
2
These investments are backed by the full faith and credit of the US Government.
3
These investments are unrated.
Investments Other than Pension, Length of Service Award Program and Other Post-Employment Benefits:
Interest Rate Risk: As a means of limiting its exposure to fair value losses arising from rising interest rates, the
County’s investment policy prohibits investment of operating funds in securities maturing more than one year
from the date of purchase, unless matched to a specific cash flow. Only Agricultural Land Preservation Funds
will be invested in U.S. Stripped Treasuries to coincide with the maturity dates on installment purchase
agreements; up to thirty years in length. Because the mutual bond funds and the MLGIP funds as of June 30,
2013, have a weighted average maturity of less than 2 months, they are presented as investments maturing in
less than one year.
46
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS - CONTINUED
Credit Risk: In order to control credit risk, State statutes, which have been incorporated into the County's
investment policy, authorize the County to invest only in obligations of the United States Government, Federal
government agency obligations, secured time deposits in Maryland banks, bankers' acceptances, the MLGIP,
money market mutual funds, commercial paper and repurchase agreements secured by direct government or
agency obligations. As of June 30, 2013, the County’s investments in Federal agency obligations, including
repurchase agreements, backed by Federal agency obligations, were rated Aaa by Moody's Investor Service; the
MLGIP and the money market mutual funds were rated AAAm by Standard and Poor's.
Concentration of Credit Risk: In accordance with its investment policy, with the exception of US Treasury
securities, repurchase agreements, US government agencies and MLGIP, no more than 50 percent of the
County’s total investment portfolio is to be invested in a single security type. With the exception of overnight
repurchase agreements with the County’s lead bank, and the MLGIP, no more than 50 percent of the County’s
portfolio may be invested with a single institution.
Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the
counterparty, the County will not be able to recover the value of its investments or collateral securities that are in
the possession of an outside party. Investment securities are exposed to custodial credit risk if the securities are
uninsured, or not registered in the name of the government, and are held by either the counterparty or the
counterparty’s trust department or agent, but not in the government’s name. County and State statutes require
that securities underlying all certificates of deposit, repurchase agreements and reverse repurchase agreements
have a market value of at least 102 percent of the cost plus accrued interest of the investment. County policies
require that a third party custodian hold investment securities and the collateral underlying all investments, in
the government’s name. As of June 30, 2013, the County’s investments were not exposed to custodial credit
risk.
Other Post-Employment Benefits (OPEB), Length of Service Award Program (LOSAP) and Pension
Investments:
Interest Rate Risk: The investment policies of the pension, LOSAP and OPEB plans do not limit investment
maturities as a means of managing exposure to fair value losses arising from increasing interest rates.
Fluctuating rates of return are characteristic of the securities markets; the Fund's greatest concern is long-term
appreciation of assets and consistency of portfolio returns. However cash and cash equivalent investments, such
as commercial paper, repurchase agreements, etc. are limited to maturities of one year or less.
Credit Risk: The investment manager is allowed substantial discretion within a broad framework of approved
investment choices. Equity holdings may be selected from those listed on the major securities markets. The
Manager(s) may invest in commercial paper, repurchase agreements, Treasury Bills, certificates of deposit,
deposit accounts (with the custodian’s bank) which is fully insured and/or fully collateralized, and money
market funds to provide income, liquidity for expense payments, and preservation of the fund’s principal value.
All such assets must represent maturities of one year or less at time of purchase. Standard & Poor’s and
Moody’s must rate commercial paper assets A-2 or P-2 respectively. The fixed income portion of the portfolio
will consist primarily of fixed income securities denominated in U.S. dollars issued by the U.S. Government or
U.S. corporations rated investment grade or better and having a weighted average maturity of no longer than 10
years. The Manager(s) should maintain the fixed income portion of the portfolio at a risk level roughly
equivalent to the Barclays Government/Credit Intermediate-Term Bond Index. The portfolio’s maximum
exposure to non-benchmark sectors including foreign issues, emerging market debt and high yield securities
may not exceed 20% (10% for Firemen LOSAP) of its market value.
47
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS - CONTINUED
Concentration of Credit Risk: As a means of minimizing risk and providing a consistent return, the investment
policies require diversification. U.S. corporate bonds shall be diversified by issuer type with no more than 5
percent of the portfolio invested in obligations of any one issuer and no more than 10 percent in any one
outstanding debt issue. Investments by security type are to be diversified as follows:
Large Cap Equities
Mid Cap Equities
Small Cap Equities
International Equities
Fixed Income
Firemen's LOSAP
Minimum Maximum
20
36
5
9
1
5
12
22
31
59
Sheriff's Pension
Minimum Maximum
25
47
3
13
3
10
14
27
21
39
OPEB Pension
Minimum Maximum
25
47
3
13
3
10
14
27
21
39
COMPONENT UNITS
As of June 30, 2013, total investments of the component units, in the amount of $51,766,576, was distributed by
type as follows:
Other
Investments
MLGIP
Harford County Public Schools
Harford Center, Inc.
Harford Community College
Harford County Public Library
Total
$
16,149,959 $
23,765,447
4,992,947
- $
466,556
6,391,667
-
16,149,959
466,556
30,157,114
4,992,947
$
44,908,353 $
6,858,223 $
51,766,576
Interest Rate Risk: The component units of the County generally limit the term of investment maturities, except
for the fiduciary funds of the Harford County Public Schools, which are allowed longer term maturities to match
the cash flow of liabilities.
Credit Risk: The investment policies of the component units require that all investments be insured, or
registered, or have underlying securities held by a custodian in the name of the component unit to protect against
credit risk. The credit ratings related to the repurchase agreements are unknown but the MLGIP, a State
sponsored investment pool, is rated AAAm by Standard and Poor's.
48
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS - CONTINUED
B. RECEIVABLES
a.
TAXES AND OTHERS
Receivables as of year-end for the government’s individual major and non-major funds, including the applicable
allowances for uncollectible accounts, are as follows:
Property Taxes
$
Interest Accrual
Service Billings
Restitution Receivable
First Vehicle Services
Miscellaneous
Gross Receivables
Less: Allowance for Uncollectible
$
General
2,777,712 $
1,406
1,942,169
231,035
4,952,322
(2,096,032)
2,856,290 $
Non-Major
Parks & Rec
Property Taxes
$
- $
Interest Accrual
Service Billings
2,573
Restitution Receivable
First Vehicle Services
Miscellaneous
Gross Receivables
2,573
Less: Allowance for Uncollectible
$
2,573 $
49
Highway
351,661 $
159,101
103,621
614,383
(256,615)
357,768 $
Water and
Sewer
Grants
56,559
129,335
185,894
185,894
Self-Insurance
Fund
- $
- $
2,101,942
5,084,964
26,133
4,382
8,658
7,217,421
8,658
(79,638)
7,137,783 $
8,658 $
Total
3,129,373
2,103,348
7,245,366
129,335
360,789
13,040
12,981,251
(2,432,285)
10,548,966
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS –CONTINUED
b. DEFERRED REVENUE
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered
to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition
in connection with resources that have been received, but not yet earned. At the end of the current fiscal year,
the various components of deferred revenue reported in the governmental funds were as follows:
Deferred Revenue:
Income Taxes
Prepaid Property Taxes
Walk-in Assessment Escrow
Property Taxes Receivable
Solid Waste Prepaid Fees
Build America Bonds Subsidy
First Vehicle Services
Sub-total: General Fund
Unavailable
$
Property Taxes Receivable
First Vehicle Services
Sub-total: Highways Fund
Grant Drawdown in Excess of Expenditures
Grant Loans Receivable
Grant Restitution Receivable
Sub-total: Grant Fund
Special Assessments Escrowed
Special Assessments Receivable
Sub-total: Capital Project Fund
Total Deferred Revenue for Governmental Funds
$
50
6,439,469 $
823,049
231,035
7,493,553
Total
Unearned
- $
165,128
7,162
918,407
627,045
1,717,742
6,439,469
165,128
7,162
823,049
918,407
627,045
231,035
9,211,295
105,121
103,621
208,742
-
105,121
103,621
208,742
3,194,855
129,150
3,324,005
1,528,415
1,528,415
1,528,415
3,194,855
129,150
4,852,420
683,825
683,825
586,678
586,678
586,678
683,825
1,270,503
11,710,125 $
3,832,835 $
15,542,960
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS –CONTINUED
c. LEASE RECEIVABLES
PRIMARY GOVERNMENT
The County is obligated as the lessor under a number of lease agreements. The lease agreements are primarily
related to general fund activities. Many of the leases are for $1 per year to various government and nonprofit
organizations. There are a few leases with end dates but most of the leases are for one year, with automatic
renewals, indefinitely.
Governmental activities: In fiscal year 2013 rental income from all governmental activity leases was $311,926.
The following is a five year schedule, by year, of future rental income, assuming all leases with automatic
renewal clauses continue at their current lease amount.
Year ending June 30
2014
2015
2016
2017
2018
Rental Income
$
$
Amount
346,188
343,908
339,848
339,848
339,821
1,709,613
Business-type activities: In fiscal year 2013 rental income from all business-type leases was $141,573. The
following is a five year schedule, by year, of future rental income, assuming all leases with automatic renewal
clauses continue at their current lease amount.
Year ending June 30
2014
2015
2016
2017
2018
Rental Income
$
$
51
Amount
131,098
131,098
116,398
72,298
72,298
523,190
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS –CONTINUED
C. CAPITAL ASSETS
PRIMARY GOVERNMENT
Capital Asset Activity for the year ended June 30, 2013, is as follows:
Beginning
Governmental Activities:
Balance
Capital Assets, not being depreciated or amortized:
Land
242,329,051 $
$
Development Rights
117,834,362
Construction in Process
22,605,294
Total Capital Assets, not being
depreciated or amortized
382,768,707
Capital Assets, being depreciated or amortized:
Buildings
Improvements other than buildings
Machinery and Equipment
Vehicles
Intangibles
Infrastructure
Total Capital Assets, being depreciated
or amortized
Governmental Activities Capital Assets, net
Ending
Balance
(117,309) $
(8,675,272)
247,679,364
120,094,050
27,218,973
21,016,261
(8,792,581)
394,992,387
162,861,302
84,438,500
49,088,690
36,967,489
273,516
180,253,673
794,379
284,745
1,265,481
8,754,928
253,245
14,156,062
(125,448)
(1,119,989)
(2,582,433)
(250,450)
163,655,681
84,597,797
49,234,182
43,139,984
526,761
194,159,285
513,883,170
25,508,840
(4,078,320)
535,313,690
(3,969,261)
(4,485,779)
(1,735,155)
(4,381,103)
(45,103)
(8,834,379)
125,448
1,112,560
2,487,474
250,450
(50,369,613)
(62,784,281)
(44,594,051)
(27,410,857)
(80,921)
(82,521,436)
(23,450,780)
3,975,932
(267,761,159)
265,596,859
$
Decreases
5,467,622 $
2,259,688
13,288,951
Less Accumulated Depreciation or Amortization for:
Buildings
(46,400,352)
Improvements other than buildings
(58,423,950)
Machinery and Equipment
(43,971,456)
Vehicles
(25,517,228)
Intangibles
(35,818)
Infrastructure
(73,937,507)
Total Accumulated Depreciation or
Amortization
(248,286,311)
Total Capital Assets, being depreciated
or amortized, net
Increases
648,365,566 $
52
2,058,060
23,074,321 $
(102,388)
267,552,531
(8,894,969) $
662,544,918
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS –CONTINUED
Beginning
Balance
Business-type Activities:
Capital Assets, not being depreciated or amortized:
$
Land
Construction in Process
Total Capital Assets, not being depreciated
or amortized
Capital Assets, being depreciated or amortized:
Buildings
Improvements other than buildings
Machinery and Equipment
Vehicles
Intangibles
Total Capital Assets, being depreciated or
amortized
Increases
Decreases
Ending
Balance
1,991,400 $
45,615,727
35,985 $
33,073,733
- $
(13,371,533)
2,027,385
65,317,927
47,607,127
33,109,718
(13,371,533)
67,345,312
227,560,493
284,680,823
7,399,021
3,997,141
115,726
5,435,814
9,067,258
47,636
517,045
96,762
(40,774)
(84,726)
(147,070)
-
232,996,307
293,707,307
7,361,931
4,367,116
212,488
523,753,204
15,164,515
(272,570)
538,645,149
(5,408,659)
(4,810,405)
(222,856)
(363,488)
(18,836)
40,774
78,129
145,902
-
(86,115,413)
(78,729,369)
(4,689,786)
(3,145,181)
(33,991)
(10,824,244)
264,805
(172,713,740)
Less Accumulated Depreciation or Amortization for:
Buildings
(80,706,754)
Improvements other than buildings
(73,959,738)
Machinery and Equipment
(4,545,059)
Vehicles
(2,927,595)
Intangibles
(15,155)
Total Accumulated Depreciation or
Amortization
(162,154,301)
Total Capital Assets, being depreciated
or amortized, net
Business-type Activities Capital Assets, net
361,598,903
$
409,206,030 $
4,340,271
37,449,989 $
(7,765)
(13,379,298) $
365,931,409
433,276,721
Depreciation or Amortization Expense was charged to functions/programs of the primary government as follows:
Governmental Activities:
County Council
General Government
Judicial
Libraries
Parks & Recreation
Public Safety
Public Works
Social Services & Health
Total Depreciation or Amortization Expense Governmental Activities
Business-type Activities
Water and Sewer
$
11,598
1,401,808
4,915
911,273
2,544,317
3,003,908
14,635,706
937,255
$
23,450,780
$
10,824,244
53
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS –CONTINUED
COMPONENT UNITS
Harford County Public Schools: Capital Asset Activity for the year ended June 30, 2013, is as follows:
Capital Assets, not being depreciated
Land
Construction in Process
Total Capital Assets, not being depreciated
$
Capital Assets, being depreciated
Land Improvements
Buildings and Improvements
Furniture and Equipment
Total Capital Assets, being depreciated
Accumulated Depreciation
Land Improvements
Buildings and Improvements
Furniture and Equipment
Total Accumulated Depreciation
Total Capital Assets, being depreciated, net
Total Capital Assets, net
$
Beginning
Balance
Increases
9,672,942 $
119,955,865
129,628,807
- $
18,354,623
18,354,623
Decreases /
Reclassifications
- $
(121,783,981)
(121,783,981)
Ending
Balance
9,672,942
16,526,507
26,199,449
14,486,634
548,865,727
35,080,258
598,432,619
556,170
989,284
2,897,502
4,442,956
139,121
121,644,860
(213,568)
121,570,413
15,181,925
671,499,871
37,764,192
724,445,988
(4,161,066)
(124,341,812)
(20,671,447)
(149,174,325)
449,258,294
(672,958)
(10,310,841)
(2,935,620)
(13,919,419)
(9,476,463)
213,568
213,568
121,783,981
(4,834,024)
(134,652,653)
(23,393,499)
(162,880,176)
561,565,812
578,887,101 $
8,878,160 $
- $
587,765,261
The Harford Center, Inc.: Capital Asset Activity for the year ended June 30, 2013, is as follows:
Beginning
Balance
Capital Assets, being depreciated
Equipment - Other
Equipment - Transportation
Leasehold Improvements
Total Capital Assets, being depreciated
$
Accumulated Depreciation:
Capital Assets
Total Accumulated Depreciation
Total Capital Assets, net
270,533 $
736,092
461,375
1,468,000
(948,820)
(948,820)
$
519,180 $
54
Increases
7,761 $
109,060
4,461
121,282
(111,907)
(111,907)
9,375 $
Decreases
- $
(7,876)
(7,876)
4,857
4,857
(3,019) $
Ending
Balance
278,294
845,152
457,960
1,581,406
(1,055,870)
(1,055,870)
525,536
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS –CONTINUED
Harford Community College: Capital Asset Activity for the year ended June 30, 2013 is as follows:
Beginning
Balance
Capital Assets, not being depreciated
Land
Construction in Process
Total Capital Assets, not being depreciated
$
Capital Assets, being depreciated
Buildings and Improvements
Furniture and Equipment
Vehicles
Library Books
Total Capital Assets, being depreciated
Accumulated Depreciation:
Buildings and Improvements
Furniture and Equipment
Vehicles
Library Books
Total Accumulated Depreciation
Total Capital Assets, being depreciated, net
Total Capital Assets, net
$
3,564,162 $
22,404,420
25,968,582
Increases
- $
978,339
978,339
Decreases
- $
(22,226,367)
(22,226,367)
Ending
Balance
3,564,162
1,156,392
4,720,554
77,971,825
9,635,396
595,380
1,640,994
89,843,595
36,207,238
1,291,301
126,935
120,470
37,745,944
(520,682)
(1,346,341)
(51,100)
(264,283)
(2,182,406)
113,658,381
9,580,356
671,215
1,497,181
125,407,133
(23,774,766)
(7,354,988)
(367,820)
(1,334,412)
(32,831,986)
57,011,609
(2,914,635)
(630,436)
(62,307)
(44,936)
(3,652,314)
34,093,630
241,147
1,260,241
51,100
264,283
1,816,771
(365,635)
(26,448,254)
(6,725,183)
(379,027)
(1,115,065)
(34,667,529)
90,739,604
(22,592,002) $
95,460,158
82,980,191 $
35,071,969 $
Harford County Public Library: Capital Asset Activity for the year ended June 30, 2013 is as follows:
Beginning
Balance
Capital Assets, being depreciated
Improvements to Buildings
Circulating Materials
Furniture and Equipment
Computer Equipment
Vehicles
Copier Equipment
Total Capital Assets, being depreciated
$
Accumulated Depreciation:
Improvements to Buildings
Circulating Materials
Furniture and Equipment
Computer Equipment
Vehicles
Copier Equipment
Total Accumulated Depreciation
Total Capital Assets, net
1,109,547 $
6,829,015
2,206,358
1,716,440
313,022
147,483
12,321,865
(476,771)
(3,404,667)
(1,759,179)
(1,107,095)
(250,135)
(49,478)
(7,047,325)
$
5,274,540 $
55
Increases
168,481 $
2,080,966
64,510
124,472
46,553
2,484,982
(77,897)
(2,259,530)
(125,398)
(262,573)
(24,663)
(32,071)
(2,782,132)
(297,150) $
Decreases
- $
(2,181,817)
(11,594)
(3,004)
(2,196,415)
2,181,817
11,594
2,376
2,195,787
(628) $
Ending
Balance
1,278,028
6,728,164
2,259,274
1,837,908
359,575
147,483
12,610,432
(554,668)
(3,482,380)
(1,872,983)
(1,367,292)
(274,798)
(81,549)
(7,633,670)
4,976,762
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS –CONTINUED
D. OPERATING LEASES
The County is obligated under certain leases accounted for as operating leases. All leases are subject to annual
appropriations. During fiscal year 2013, rental expenditures approximated $3,003,923. These expenditures were
primarily from the General Fund. The following is a schedule, by years, of the future minimum rental payments
required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as
of June 30, 2013:
Year ending June 30
2014
2015
2016
2017
2018
2019-2021
Total Minimum
Payments Required
$
Amount
3,155,602
2,831,750
2,143,154
1,547,391
940,864
237,423
$
10,856,184
E. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
a. DUE FROM PRIMARY GOVERNMENT AND DUE TO COMPONENT UNITS
Interfund receivables and payables result from the time lag between the time reimbursable expenditures occur in
the component units and when the payments are made. At June 30, 2013, these interfund balances are:
Due From
Primary Government:
Capital Projects Fund
Component Units:
Harford County Public Schools
$
$
Due To
-
$
1,923,020
1,923,020
1,923,020 $
1,923,020
56
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
b.
INTERFUND TRANSFERS
Transfers are used to, (1) move general fund revenues to provide matching funds for various grant programs, (2)
move operating fund revenues into the capital project fund as paygo monies, (3) move revenues from capital
project funds to the general fund to pay debt service, and (4) move interest revenue earned in the capital project
fund to the operating funds per management policy. The interfund transfers for the current fiscal year are:
Transfers Out
General Fund
$
Highways Fund
Grant Fund
Capital Projects Fund
- $
449,507
18,723,433
Highways
Fund
- $
37,065
Total Transfers In
19,172,940 $
37,065 $
$
General
Fund
57
Transfers In
Grant
Capital Project
Fund
Fund
2,963,443 $
18,065,995 $
15,280,135
2,963,443 $
33,346,130 $
Total
21,029,438
15,280,135
449,507
18,760,498
55,519,578
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
F. NON-CURRENT LIABILITIES
a. CHANGES IN NON-CURRENT LIABILITIES
PRIMARY GOVERNMENT
Balance
July 1,
2012
Principal
Repayments
& Reductions
Additions
Balance
June 30,
2013
Due Within
One Year
Governmental activities:
Agricultural Land Preservation $
Bonds Payable
General Obligation Bonds
Special Obligation Bonds
Capital Lease Obligations
Notes Payable
Landfill Closure Liability
Compensated Absences
Est. Liab. For Claims in Process
62,058,577 $
2,013,095
448,132,841
14,000,000
2,941,940
4,871,422
39,991,444
25,407,119
5,307,699
Governmental activities Long-term Liabilities
$
602,711,042 $ 112,909,835
$
380,989 $
131,235,774
3,025,681
26,705,287
262,972
134,642,444 $
26,968,259
103,388,402
2,321,449
3,710,670
1,476,219
$
(2,966,960)
(103,291,386)
(1,647,356)
(1,800,701)
(1,978,130)
(1,260,129)
(1,082,598)
3
$
2
$ (114,027,260)
61,104,712 $
2,075,443
448,229,857
14,000,000
1,294,584
3,070,721
40,334,763
27,857,660
5,701,320
28,762,156
1,294,584
1,756,701
4,305,419
9,193,496
870,667
$
601,593,617 $
48,258,466
$
193,444 $
132,276,225
3,225,709
193,444
7,288,490
1,179,446
$
135,695,378 $
8,661,380
Business-type activities:
Capital Lease Obligations
Bonds Payable
Compensated Absences
Business-type activities Long-term Liabilities
$
$
1
$
(187,545)
(25,664,836)
(62,944)
(25,915,325)
2
1
Business-type activities include deferred loss on 2013 refunding of $1,865,283 and 2013 premium of $3,660,968
resulting in a net amount of $1,795,685.
2
Includes amortization of deferred loss on refunding of $584,678 and amortization of premium of $6,345,976
resulting in a net amount of $5,761,298 for Governmental activities. Business-type activities include amortization of
deferred loss of $223,673, deferred gain of $5,461 and premium of $1,723,813 resulting in a net amount of
$1,505,601.
3
See Note 4f. Landfill Closure Liability for more detail.
Agricultural Land Preservation long-term debt has typically been liquidated in the Agricultural Land
Preservation special revenue fund. Governmental compensated absences typically have been liquidated
in the General and other governmental funds. Special Obligation Bonds will be liquidated in the Beechtree TIF
Debt Service Fund. Claims liabilities typically have been liquidated in the Self Insurance fund. The debt limit
for the primary government at June 30, 2013, was $1,714,305,453 and the legal debt margin was
$1,261,710,291.
58
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
COMPONENT UNITS
Non-current liabilities in the component units consist of liabilities for compensated absences, other post
employment benefits (OPEB), capital lease and installment note. The changes and the portion due within one
year are as follows:
Due
Beginning
Ending
Within
Changes
Balance
Balance
One Year
Harford County Public Schools
Capital Leases
$
10,016,647 $
- $
10,016,647 $
Compensated Absences
28,095,723
(469,667)
27,626,056
4,421,320
OPEB
127,410,929
35,372,000
162,782,929
$ 165,523,299 $ 34,902,333 $ 200,425,632 $
4,421,320
Harford Community College
Compensated Absences
OPEB
$
$
1,169,386 $
120,221
1,289,607 $
(7,644) $
13,000
5,356 $
1,161,742 $
133,221
1,294,963 $
84,988
84,988
Harford County Public Library
Capital Lease
$
Installment Note
Compensated Absences
OPEB
$
100,714 $
66,198
377,799
6,864,762
7,409,473 $
(27,793) $
(66,198)
19,375
1,478,696
1,404,080 $
72,921 $
397,174
8,343,458
8,813,553 $
30,745
2,967
33,712
59
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
b. AGRICULTURAL LAND PRESERVATION INSTALLMENTS
PRIMARY GOVERNMENT
The County has entered into installment contracts to purchase easements for agricultural land preservation
purposes. The primary source of revenue for repayment of the indebtedness is a transfer tax of one-half of one
percent on all transfers of real property in the County. Under the terms of the installment contracts, which range
in length from ten to twenty years, the County pays the property owner annual interest and minimal portions of
the installment purchase price for the term of the agreement. The final principal payment is made with a
stripped-coupon U.S. Treasury obligation purchased at settlement and held to maturity. The interest rate of the
stripped-coupon U.S. Treasury obligation is the interest rate used for the installment purchase agreement.
Interest rates on securities owned at June 30, 2013, range from 2.68 percent to 8.45 percent. The annual
requirements to amortize agricultural land preservation installments outstanding as of June 30, 2013, are as
follows:
AGRICULTURAL LAND PRESERVATION INSTALLMENTS
Year Ending
June 30
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Principal
Total
Requirement
Interest
$
2,075,443
2,767,557
7,044,823
7,439,417
18,250,162
4,709,028
1,164,272
660,227
213,237
2,025,890
1,290,054
446,033
761,526
476,318
672,699
3,641,701
91,896
91,896
5,655,803
1,626,730
$
3,149,941
3,037,241
2,852,384
2,402,529
1,930,011
1,011,555
770,321
701,566
667,076
658,490
559,418
489,486
469,799
435,009
413,348
382,635
218,667
215,975
213,278
49,821
$
5,225,384
5,804,798
9,897,207
9,841,946
20,180,173
5,720,583
1,934,593
1,361,793
880,313
2,684,380
1,849,472
935,519
1,231,325
911,327
1,086,047
4,024,336
310,563
307,871
5,869,081
1,676,551
$
61,104,712
$
20,628,550
$
81,733,262
For the year ended June 30, 2013, total principal and interest incurred related to agricultural land preservation
installment was $2,966,960 and $3,221,629.
60
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTE ON ALL FUND TYPES – CONTINUED
c. BONDS PAYABLES
1.
General Obligation Bonds
PRIMARY GOVERNMENT
All general obligation bonds are valid and legally binding general obligations of the County, and constitute an
irrevocable pledge of its full faith and credit and unlimited taxing power. Governmental bonds and Water
Quality Loan are payable from ad valorem taxes, unlimited as to rate or amount on all real tangible, personal,
and certain intangible property subject to taxation at full rates for local purposes in the County. Those portions
of the Public Improvement Bonds of 2004, 2005, 2007, 2009, 2010, 2012, and 2013 allocated to school projects
are payable in the first instance from recordation and transfer tax revenues and impact fees. Business-type
(Water and Sewer) bonds are payable from investment income of the Water and Sewer Funds, area connection
charges, benefit and surcharge assessments, and recordation taxes. As of June 30, 2013, general obligation
bonds payable are comprised of the following individual issues:
Originally
Issued
Governmental activities:
Water Quality Loan of 1999 - 2.52% - due serially to 2018
Public Improvement Bond of 2004 - 2.0% - 4.375% - due serially to 2024
Public Improvement Bond of 2005 - 3.0% - 5.0% - due serially to 2024
Public Improvement Bond of 2007 - 4.0% - 5.0% - due serially to 2027
Refunding Bond of 2009 - 3.0% - 4.0% - due serially to 2020
Public Improvement Bond of 2009 - 4.0% - 5.0% - 2.25% due serially to 2029
Refunding Bond of 2010 - 2.5% - 5.0% - due serially to 2021
Public Improvement Bond of 2010-Series A - 2.5% - 5.0% - due serially to 2020
Public Improvement Bond of 2010-Series B - 4.7% - 5.5% - due serially to 2030
Public Improvement Bond of 2012 - 2.0% - 5.0% due serially to 2032
Refunding Bond of 2012 - 2.0% - 4.0% - due serially to 2024
Public Improvement Bond of 2013 - 3.0% - 5.0% due serially to 2033
Refunding Bond of 2013 - 2.0% - 5.0% - due serially to 2028
Total Bonds Outstanding
Premium
Deferred Loss on Refunding
Total
61
$
$
4,585,000 $
23,870,000
35,905,000
95,900,000
21,738,036
96,100,000
25,161,828
67,486,509
76,069,620
40,000,000
6,931,393
30,000,000
59,750,398
583,497,784
48,919,243
(13,914,740)
618,502,287 $
Outstanding at
June 30, 2013
876,169
1,750,000
5,587,012
33,500,000
9,376,044
88,091,667
20,841,258
55,620,000
76,069,620
38,181,750
6,881,190
30,000,000
59,750,398
426,525,108
34,540,751
(12,836,002)
448,229,857
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTE ON ALL FUND TYPES – CONTINUED
The annual requirements to amortize general obligation bond debt outstanding as of June 30, 2013, are as
follows:
Year Ending June 30
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
Premium
Deferred Loss
Principal
$
$
Interest
28,762,156 $
28,461,141
29,294,825
28,573,026
27,298,235
129,386,863
103,487,910
51,260,952
34,540,751
(12,836,002)
448,229,857 $
Total Requirement
18,195,160
17,228,154
15,918,341
14,653,860
13,413,556
49,000,476
23,305,782
3,996,144
155,711,473
$
$
46,957,316
45,689,295
45,213,166
43,226,886
40,711,791
178,387,339
126,793,692
55,257,096
34,540,751
(12,836,002)
603,941,330
For the year ended June 30, 2013, total principal and interest incurred related to general obligation bonds was
$97,530,088 and $17,946,320.
Business-Type Activities:
State of MD Water Quality Loan dated February 1999 - 2.39% - due serially to 2019
State of MD Water Quality Loan dated September 1999 - 2.52% - due serially to 2018
USDA Rural Development Bond of 2001 - 4.5% - due serially to 2031
Public Improvement Bond of 2004 -2.0% - 4.375% - due serially to 2024
USDA Rural Development Bond of 2004 - 4.375% - due serially to 2034
Public Improvement Bond of 2005 - 3% - 5.0% - due serially to 2024
Public Improvement Bond of 2007 - 4.0% - 5.0% - due serially to 2027
USDA Rural Development Bond of 2008 - 4.5% - due serially to 2038
Refunding Bond of 2009 - 3.0% - 4.0% - due serially to 2020
Public Improvement Bond of 2009 - 2.25% - 5.0% - due serially to 2029
Refunding Bond of 2010 - 2.5% - 5.0% - due serially to 2021
Public Improvement bond of 2010-Series A - 2.5% - 5.0% - due serially to 2020
Public Improvement bond of 2010-Series B - 4.7% - 5.5% - due serially to 2030
Public Improvement Bond of 2012 - 2.0% - 5.0% - due serially to 2032
Refunding Bond of 2012 - 2.0% - 4.0% - due serially to 2024
Public Improvement Bond of 2013 - 3.0% - 5.0% - due serially to 2033
Refunding Bond of 2013 - 2.0% - 5.0% - due serially to 2028
$
Total Bonds Outstanding
Premium
Deferred Gain on Refunding
Deferred Loss on Refunding
Total
$
62
Originally
Issued
1,200,000 $
11,585,000
1,080,000
4,060,000
210,000
6,510,000
24,695,000
345,500
4,251,964
23,900,000
608,172
23,513,491
26,505,380
15,000,000
2,043,607
10,000,000
14,909,602
Outstanding at
June 30, 2013
438,143
2,213,831
808,951
200,000
172,548
1,012,988
8,500,000
318,257
1,833,956
21,908,333
503,742
19,380,000
26,505,380
14,318,250
2,028,810
10,000,000
14,909,602
170,417,716
11,460,188
60,652
(3,700,750)
125,052,791
9,127,658
41,373
(1,945,597)
178,237,806 $
132,276,225
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTE ON ALL FUND TYPES – CONTINUED
The annual requirements to amortize business-type activities bonded debt outstanding as of June 30, 2013, are
as follows:
Year Ending June 30
2014
$
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
2034-2038
2039-2040
Premium
Deferred (Loss)/Gain on Refunding
$
Principal
7,288,490 $
8,078,058
7,992,945
7,768,658
7,842,396
36,027,005
32,000,115
17,940,952
103,823
10,349
9,127,658
(1,904,224)
Interest
5,298,178
5,053,141
4,684,008
4,360,298
4,032,489
15,201,026
7,681,586
1,486,802
13,880
175
-
132,276,225
47,811,583
$
$
$
Total
Requirement
12,586,668
13,131,199
12,676,953
12,128,956
11,874,885
51,228,031
39,681,701
19,427,754
117,703
10,524
9,127,658
(1,904,224)
180,087,808
For the year ended June 30, 2013, total principal and interest incurred related to business-type activities was
$24,159,235 and $4,407,906.
2.
Special Obligations Bonds
PRIMARY GOVERNMENT
As of June 30, 2013, there was $14,000,000 of Special Obligation Tax Increment Bonds payable from property
tax revenue generated from assessment increases occurring since the formation of the tax increment district.
This debt is included in the primary government’s long term debt on the Statement of Net Position. In the
future, these bonds will be paid from incremental property tax revenue and/or special district tax on the district.
No special assessment receivables are due as of June 30, 2013. These bonds do not have Harford County,
Maryland’s full faith and credit pledged.
Governmental activities:
Special Obligation Bond of 2011
7.5% - due serially to 2041
Originally
Issued
$
14,000,000 $
63
Outstanding as of
June 30, 2013
14,000,000
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTE ON ALL FUND TYPES– CONTINUED
The annual requirements to amortize special obligation bond debt outstanding as of June 30, 2013 are as
follows:
Year Ending June 30
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
2034-2038
2039-2041
Principal
$
$
30,000
520,000
1,430,000
2,820,000
4,885,000
4,315,000
14,000,000
$
$
Interest
1,050,000
1,050,000
1,050,000
1,050,000
1,048,875
5,162,625
4,809,375
4,029,000
2,608,688
505,687
22,364,250
Total Requirement
1,050,000
1,050,000
1,050,000
1,050,000
1,078,875
5,682,625
6,239,375
6,849,000
7,493,688
4,820,687
$
36,364,250
$
For the year ended June 30, 2013, no principal was incurred related to Special Obligation Bonds. Total interest
incurred related to Special Obligation Bonds was $1,050,000.
d.
CAPITAL LEASE OBLIGATIONS
PRIMARY GOVERNMENT
Governmental activities: The balance as of June 30, 2013 of $1,294,584 consists of a lease purchase agreement
entered into with PNC Bank in April 2009 for vehicles.
The annual debt service requirements to maturity for the capital lease obligations are as follows:
Year Ending June 30
2014
Less: deferred interest
Present value minimum lease payments
$
$
1,324,965
(30,381)
1,294,584
For the year ended June 30, 2013, total principal and interest incurred related to capital leases was $1,647,356
and $122,779. The interest rate applicable to the 2009 capital lease is 3.12 percent.
64
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
Business-Type Activities: The balance at June 30, 2013 of $193,444 consists of a lease purchase agreement
entered into with PNC Bank in April 2009 for vehicles.
The annual debt service requirements to maturity for the capital lease obligations are as follows:
Year Ending June 30
2014
$
Less: deferred interest
Present value minimum lease payments $
197,984
(4,540)
193,444
For the year ended June 30, 2013, total principal and interest incurred related to capital leases was $187,545 and
$9,271. The interest rate applicable to the lease payment is 3.12 percent.
COMPONENT UNITS
Harford County Public Schools: The Public Schools has entered into lease agreements as lessee to construct
the administration building in the amount of $11,400,233, which was completed in January 2007. The lease
agreement is for a period of twenty-five years. The debt was refinanced in June of 2012 at a rate of 3.25%. The
term of the debt was not extended. The assets acquired and capitalized under the capital lease are as follows:
Building Cost
Less accumulated depreciation
Net Book Value
$
$
10,852,395
(1,627,859)
9,224,536
The future minimum lease obligations and the net present value of these minimum lease payments as of June 30,
2013, were as follows:
Year Ending June 30
2014
2015
2016
2017
2018
2019-2030
Total minimum lease payments
Less: Amount representing interest
Present value minimum lease payments
65
$
$
327,544
698,803
823,822
823,822
823,822
9,885,864
13,383,677
(3,367,030)
10,016,647
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
Harford County Public Library: The Library is the lessee of copiers and related equipment under capital
leases expiring through 2017. The assets and liabilities under these leases are recorded at the lower of the
minimum lease payments or the fair value of the assets and amortized over the life of the lease term. Included in
property and equipment are assets under these leases with a cost of $147,483 as of June 30, 2013. Depreciation
of assets under capital leases is included in depreciation expense. The depreciation relating to the leases was
$32,071 for the year ended June 30, 2013. Future minimum lease payments under capital leases are as follows:
Year Ending June 30
2014
2015
2016
2017
Total minimum lease payments
Less: Amount representing interest
Present value minimum lease payments
$
36,831
34,051
10,932
576
82,390
(9,469)
72,921
$
e. NOTES PAYABLE
PRIMARY GOVERNMENT
Government activities:
Paca Ltd., Inc.
Preston
Stuart Terrace
WTE Retrofit
Principal Balance
June 30, 2013
1,300,000
$
286,000
14,721
1,470,000
$
3,070,721
Annual Rate/
Payment Frequency
5.75%/Annually
3.50%/Annually
0.00%/Annually
4.79%/Semi
Payment
Began
09/2008
10/2009
07/2009
03/2005
Date
Matures
09/2018
10/2013
07/2033
03/2014
The annual debt service requirements to maturity for the notes payable are as follows:
Total
Year Ending June 30
Principal
Interest
Requirement
2014
$
1,756,701 $
161,935 $
1,918,636
2015
701
74,750
75,451
2016
701
74,750
75,451
2017
701
74,750
75,451
2018
701
74,750
75,451
2019-2022
1,303,505
74,750
1,378,255
2023-2027
3,505
3,505
2028-2032
3,505
3,505
2033-2034
701
701
$
3,070,721 $
535,685 $
3,606,406
66
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
For the year ended June 30, 2013, total principal and interest incurred related to notes payable was
$1,800,701 and $249,435.
f. LANDFILL CLOSURE LIABILITY
PRIMARY GOVERNMENT
Subtitle D of the Resource Conservation and Recovery Act of 1976, as amended, provides Federal regulations
for municipal solid waste landfill closure and post-closure care. The State of Maryland’s laws for solid waste
management parallel Federal law. The permit for the Harford Waste Disposal Center (HWDC) is issued by the
State and is subject to renewal every five years. Federal and State laws and regulations require the County to
place a final cover on the Harford Waste Disposal Center when it stops accepting waste and to perform certain
maintenance and monitoring functions at the site for a thirty-year period after closure. Although closure and
post-closure care costs will be paid only near or after the date that the landfill stops accepting waste, GASB
Statement No. 18 requires the County to measure and recognize a portion of these closure and post-closure care
costs each period based on landfill capacity used as of each balance sheet date.
As of June 30, 2013, the following changes occurred in Landfill Closure Liability recorded in Non-current
Liabilities in the Statement of Net Position:
Current Year
Additions
(Deductions)
Beginning
Balance
Cumulative Liability for Open Landfills
Estimated Liability for Closed Landfills
Waste Exchange Landfill Liability
$
$
16,121,522
13,767,258
10,102,664
39,991,444
$
$
2,321,449 $
(106,018)
(1,872,112)
343,319 $
Ending
Balance
18,442,971
13,661,240
8,230,552
40,334,763
The Cumulative Liability for the Open Landfill represents the cost, based on use of 89.0 percent of the estimated
capacity. The County will recognize the remaining estimated cost of the Harford Waste Disposal Center closure
and post-closure of $2,278,290 as the remaining estimated capacity is used. As of June 30, 2013, it is estimated
that the landfill has approximately 18 months before permitted space is filled.
The Cumulative Liability for Open Landfills as of June 30, 2013, is $18,442,971. Harford County has been
assigning fund balance to cover the cost of this liability. We have appropriated fund balance of $7,050,000 for
landfill closure costs in fiscal year 2013 and beyond, and have assigned fund balance of $11,392,971 to begin
the closure of cell A through J.
The total estimated future cost of landfill closure is calculated in current dollars. Annual reevaluation of the
estimated total cost of closure and post-closure care will be made to adjust for the effects of inflation or
deflation, changes in the closure or post-closure plan, and changes in federal, state and local regulatory
requirements.
67
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
The Estimated Liability for Closed Landfills represents the cost for final closure and post-closure care of
Harford County municipal solid waste landfills that are no longer accepting solid waste.
Harford County executed a consent agreement with the Maryland Department of the Environment to provide for
closure of the former Spencer Rubble Landfill East Side. We have appropriated fund balance of $6,700,000 for
closure costs. Post-closure care costs are estimated at $78,000 annually and expected to extend for 30 years.
Current year reductions in the liability are $67,507. We have assigned fund balance of $2,340,000 to cover the
post closure costs of the Spencer Rubble Landfill.
Harford County, Maryland; Baltimore County, Maryland and Northeast Maryland Waste Disposal Authority
entered into an agreement January 16, 2008, entitled “Municipal Solid Waste Disposal Agreement” and
subsequently amended January 28, 2010. Baltimore County agrees to accept municipal solid waste from
Harford County under the terms of this agreement. Once the expansion of the Harford County Waste Disposal
Center has been permitted, Baltimore County will deliver to Harford County in an amount equal to 130 percent
of the waste received from Harford County. Harford County opened its new cell in September 2011 and began
accepting waste from Baltimore County. The chart below outlines the current tonnages under the Municipal
Solid Waste Disposal Agreement:
As of June 30, 2013
Municipal Solid Waste delivered to Baltimore County
166,585
Tonnage converted to 130% of waste received by
49,976
Baltimore County (166,585 x 30%)
Tonnage to be delivered to Harford County by
Baltimore County
216,561
Actual tonnage delivered by June 30, 2013
(71,893)
Tonnage to be delivered in the future
144,668
The County was issued a Refuse Disposal Permit (2000-WMY-0570) on October 5, 2007, which provides for
construction and operation new landfill cells at the Harford Waste Disposal Center. The total remaining service
life of the permitted landfill is estimated to be 20 or more years, depending upon future waste management
practices.
g. ADVANCED REFUNDING OF DEBT
On February 19, 2013, Harford County issued $74,660,000 of Maryland Consolidated Public Improvement
Refunding Bonds, Series 2013 with an effective interest rate of 1.968 percent, to provide resources to refund
certain maturities of the 2005 and 2007 bonds. These resources were placed in an irrevocable trust to provide
for all future debt service payments of $73,960,000 of general obligation bonds. Of this amount, $59,750,398
had been recorded in the Statement of Net Position, Exhibit 1, Governmental Activities column and $14,909,602
in the Statement of Net Position, Exhibit 1, Business-Type Activities column. As of June 30, 2013, the refunded
bonds are considered defeased and have been removed from the Statement of Net Position. The reaquisition
price exceeded the net carrying amount of the old debt by a net of $12,741,584. Of this amount, a loss of
$10,876,301 has been recorded in the governmental activities and a loss of $1,865,283 in the business-type
activities. This amount is being netted against the new debt and amortized on a straight-line basis over the
remaining life of the new debt. This advanced refunding was undertaken to reduce total debt service payments
over the next 16 years by $5,652,365 and resulted in an economic gain of $11,296,160.
68
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 4 – DETAILED NOTES ON ALL FUNDS – CONTINUED
h. PRIOR PERIOD DEFEASANCE OF DEBT
In prior years, the County defeased certain general obligation and other bonds by placing the proceeds of new
bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the
trust account assets and the liability for the defeased bonds are not included in the County’s financial statements.
As of June 30, 2013, $9.13 million of bonds outstanding are considered defeased.
G. FUND BALANCE – GOVERNMENTAL ACTIVITIES
General
Nonspendable:
Inventory
Prepaid
Long Term Rec.
Sub-total
$
Restricted for:
Harf. Co. Public Schools
Bond Proceeds
Beechtree Debt Service
Gen. Fund Det. Ctr.
Highways
Parks and Rec
Grants
Sub-total
Committed to:
Development Rights
Sub-total
Assigned to:
Approp. of Fund Bal.
Fiscal Stabilization Fund
Encumbrances
Other Post Emp. Benef.
Landfill Closure Costs
WTE Plant Closure
Income Tax
Healthcare Consortium
Highways
Ag. Preservation
Non-Major P&R Fund
Sub-total
Unassigned:
Total Fund Balances
Highways
- $
445,005
398,743
843,748
Grants
1,922,189 $
131,282
2,053,471
- $
-
Capital
Projects
- $
-
Non-Major
Parks and
Recreation
Beechtree
TIF
- $
-
- $
-
- $
-
Total
1,922,189
576,287
398,743
2,897,219
2,687,977
899,169
3,587,146
320,055
39,518
359,573
7,718,401
7,718,401
-
2,660,492
20,801,783
457,135
23,919,410
1,994,150
1,994,150
-
2,660,492
23,809,815
1,994,150
899,169
39,518
457,135
7,718,401
37,578,680
-
-
-
48,873,277
48,873,277
-
-
-
48,873,277
48,873,277
20,558,008
25,586,194
3,060,595
6,727,005
13,732,971
4,000,000
2,439,735
1,846,776
77,951,284
4,722,411
2,470,125
904,682
899,675
258,970
2,533,371
11,789,234
-
2,740,326
2,740,326
2,549,726
43,330,985
45,880,711
-
33,233
56,099
16,823
6,562
405,112
517,829
27,863,378
28,056,319
47,352,361
7,643,503
13,732,971
4,000,000
2,439,735
2,112,308
2,533,371
2,740,326
405,112
138,879,384
6,933,118
$
Agricultural
Land
Preservation
89,315,296 $
14,202,278 $
-
-
7,718,401 $
69
51,613,603 $
69,800,121 $
1,994,150 $
517,829 $
6,933,118
235,161,678
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION
A. SELF-INSURANCE
PRIMARY GOVERNMENT
The County carries commercial property insurance coverage with a $25,000 deductible on both real and personal
property, and a $10,000 deductible for physical damage to County-owned vehicles.
The County is self-insured for Workers’ Compensation, General and Automobile liability losses. The selfinsurance program is administered by a risk manager as established by the Harford County Code. The County
carries excess coverage for these exposures, with a $350,000 retention for General and Automobile liability
claims and a $2,500,000 retention for Workers’ Compensation claims.
The pending claims liability of $5,701,320 reported in the fund at June 30, 2013, is comprised of estimates of
outstanding losses (including allocated loss adjustment expenses, ALAE, which are the direct expenses to settle
specific claims) and losses projected to be paid as of June 30, 2013. The estimated outstanding losses are the
cost of unpaid claims, including case reserves, the development of known claims and claims incurred but not
reported, IBNR claims. The amounts are limited to the self-insured retention. No estimate was made for unpaid
unallocated loss adjustment expenses. The losses projected to be paid are the claim disbursements, regardless of
accident or report date. Historical experience and actuarial assumptions were the basis used in estimating the
liabilities for unpaid claims.
There have been no significant reductions in insurance coverage from the prior year. Settlements have not
exceeded insurance coverage in any of the past three fiscal years. The changes in the fund’s claims liability are
as follows:
Fiscal
Year
2011
2012
2013
Beginning
of Year
$
5,097,869 $
4,489,344
5,307,699
Claims and
Changes in
Estimates
Payments
575,087 $
2,003,818
1,476,219
(1,183,612) $
(1,185,463)
(1,082,598)
End of Year
4,489,344
5,307,699
5,701,320
COMPONENT UNITS
Harford County Public Schools: The Harford County Public Schools are exposed to various risks of loss
related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. The Public Schools is a member of the Maryland Association of Boards of Education Group
Liability Insurance Pool and the Workmen’s Compensation Self-Insurance Fund. These pools are self-insurance
funds for the various member Maryland Boards of Education. The pools were organized for the purpose of
minimizing the cost of insurance and related administrative expenses. Coverage is provided up to specified
limits and the Harford County Public Schools pays an annual premium for the coverage provided by these pools.
In addition to general liability insurance, the Group Liability Insurance Pool also provides coverage for property
liability and automobile liability. Third-party carriers provide coverage above these limits. Settled claims
resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.
70
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Harford Community College: The College is exposed to various risks of loss related to torts; theft of, damage
to and destruction of assets; errors and omissions; employee health and accident; and natural disasters. The
College purchases commercial insurance to protect its interests in its property and equipment, insurance against
employee dishonesty and liability protection.
Harford County Public Library: The Library is exposed to various risks of loss related to torts; theft of,
damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. As a
component unit of Harford County, Maryland, insurance for such losses is purchased from Harford County each
year via a reduction in annual appropriations. Harford County purchases commercial insurance to cover the
Library’s buildings. Other claims are covered by Harford County’s Self Insurance fund. As a condition to this
participation, the Library must provide a physical inventory of all building contents, which the risk management
department of the County appraises for insurance purposes. In addition, Harford County performs an inspection
of all Library buildings annually. There have been no significant reductions in insurance coverage from the prior
year. In addition, the amount of settlements has not exceeded insurance coverage for each of the past three fiscal
years.
B. COMMITMENT AND CONTINGENCIES
PRIMARY GOVERNMENT
The County is involved in numerous lawsuits that normally occur in governmental operations, including claims
for personal injury and personnel practices and disputes over contractual obligations and condemnation
proceedings. The County has provided allowances for estimated probable losses on outstanding claims and
incurred but not reported claims. The County is actively defending its position in each of these cases. In the
opinion of the County officials and solicitors, resolution of these matters will not have a material adverse effect
on the financial statements.
The County and Component Units receive significant financial assistance from the U.S. Government and the
State of Maryland in the form of grants. Entitlement to grant resources is generally conditioned upon compliance
with terms and conditions of the grant agreements and applicable Federal and State regulations, including the
expenditure of the resources for eligible purposes. Substantially all grants are subject to financial and
compliance audits in accordance with grantor requirements. Any disallowance as a result of these audits
becomes a liability of the County. As of June 30, 2013, the County estimates that no material liabilities will
result from such audits.
The County had $161,930,435 authorized but unobligated capital project approriations as of June 30, 2013, in
the governmental capital fund and $90,528,904 in the water and sewer, business-type capital fund. Further
detail is provided as supplementary information, Exhibit D-1 and E-1.
71
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
COMPONENT UNITS
Harford County Public Schools: The Public Schools has been named as defendant in several lawsuits, the
outcome of which is uncertain. It is anticipated by the Public Schools that an adverse decision on any or all of
these suits would not have a material adverse effect on their financial statements.
C. ARBITRAGE REBATE REQUIREMENTS
PRIMARY GOVERNMENT
Arbitrage rebate requirements under Internal Revenue Code Section 1.148-3 apply to the County’s investment of
the proceeds of the Consolidated Public Improvement Bonds of 2005, 2007, 2009, 2010, 2012 and 2013. The
law requires the computation and payment of arbitrage profits on unspent proceeds of a bond issue if the current
investment of these funds yields a higher rate of return than the original bond issue. The filing of this
computation and payment to the Internal Revenue Service is required at the end of the fifth year of the bond
issuance date and every 5 years subsequently; however, computations and filings can be made for annual
periods. There is no rebatable arbitrage to report at June 30, 2013.
D. CONDUIT DEBT
PRIMARY GOVERNMENT
From time to time, the County has issued Maryland Industrial Development Revenue Bonds, Maryland
Economic Development Revenue Bonds, and Maryland Mortgage Revenue Bonds to provide financial
assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities
and provision of housing deemed to be in the public interest. The bonds are secured by the property financed and
are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds,
ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither
the County, the State, nor any political subdivision thereof is obligated in any manner for repayment of the
bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of June 30, 2013, there were 11 series of Industrial Development, Economic Development, or Mortgage
Revenue Bonds outstanding. The aggregate principal amount outstanding, for the 9 bonds issued after July 1,
1996, is $90.9 million as of June 30, 2013. The aggregate principal amount payable for the 2 series issued prior
to July 1, 1996, could not be determined; however, their original issue amounts totaled $8.9 million.
72
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
E. RETIREMENT PLANS
a.
PENSION PLANS – TEACHERS AND CLASSIFIED EMPLOYEES
Plan Description: The employees of the reporting entity, other than certain correctional employees, who are
covered by the Sheriff’s Office Pension System, are covered by either the Employees’/Teachers’ Retirement
System, the Employees’/Teachers’ Pension System, or the Law Enforcement Officers’ Pension System. These
plans are administered by the State Retirement and Pension System of Maryland (the System). The State of
Maryland is the primary sponsor of this cost-sharing multiple employer defined benefit system which provides
pension benefits, death and disability benefits to plan members and their beneficiaries. The State Personnel and
Pensions Article of the Annotated Code of Maryland specify all plan benefits to plan members. The System
issues a publicly available financial report that includes financial statements and required supplementary
information. That report may be obtained by writing to the Office of Legislative Audits, State Office Building,
301 West Preston Street, Baltimore, Maryland, 21201, or by calling 410-946-5900.
Funding Policies: Plan members of the Employees’ Retirement System contribute up to 7 percent of their
covered salary each fiscal year. Plan members of the Employees’ Pension System contributed 5 percent of their
covered salary each fiscal year. Members of the Law Enforcement Officers’ Pension System contribute 7
percent of their covered salary each fiscal year. The County and its component units are required to contribute at
an actuarially determined rate.
The contribution requirements of plan members of the reporting entity are established and may be amended by
the System Board of Trustees.
The contributions for the fiscal year ending June 30th to the System, exclusive of contributions made directly by
the State of Maryland, were equal to the actuarially determined amount, as follows:
2013
Primary Government
Component Units:
Harford County Public Schools
Harford Community College
Harford County Public Library
$
10,626,050 $
7,967,776
67,473
144,609
73
2012
12,627,664 $
2,946,759
82,281
186,779
2011
12,810,657
2,838,311
78,539
173,786
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
b. LENGTH OF SERVICE AWARD PROGRAM – VOLUNTEER FIREMEN
The County instituted and began administering a single employer defined benefit length of service award
program, or LOSAP, for volunteer firemen and ambulance personnel on January 31, 1975. The plan issues a
publicly available financial report that includes financial statements and required supplementary information.
The report may be obtained by writing to Harford County Government, Treasurer’s Office, 220 South Main
Street, Bel Air, Maryland 21014, or by calling 410-638-3316.
Plan Description: This LOSAP, Length of Service Award Program, is different from traditional qualified
retirement plans. There is a special section in the Internal Revenue Code covering these plans: section
457(e)(11). The County’s plan meets the requirements of this section, which means the payments to the fire
fighters are not treated as “wages”; and, because the County is an “eligible employer”, as defined by IRS, the
plan is tax exempt.
Based on County statutes, the firemen and ambulance personnel are eligible to participate upon reaching the age
of 55 and accumulating “50 (fifty) points”, which are determined in accordance with a specific point system.
Benefits vest upon 25 years of service credit. The plan generally provides $5,000 burial benefits and certain
benefits for disability. Regular benefits are calculated at $12 per month for each of the first 25 years of service
plus $6 per month for each year in excess of 25. The maximum benefit is $450 per month. Normal form of
benefit is a life annuity for the volunteer with a 50 percent survivor benefit for the spouse of the volunteer.
The membership data related to the plan at September 30, was as follows:
Retirees and beneficiaries currently receiving benefits
Terminated plan members entitled to, but not yet receiving benefits
Active plan members
Total
389
274
1,123
1,786
Basis of Accounting: The Firemen’s LOSAP plan uses the accrual basis of accounting. The County contributions
are revenues in the period in which volunteer services are performed. Benefits are recognized when due and
payable in accordance with the terms of the plan.
Method used to Value Investments: Investments are reported at market value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national or international exchange are
valued at the last reported sales price at current exchange rates. The County has hired an investment firm to
manage the investments of the volunteer firemen’s LOSAP plan.
Contributions and Funding Policy: Under provisions of County statutes, the County must provide annual
contributions sufficient to satisfy the actuarially determined contribution requirements. Periodic County
contributions to the LOSAP are determined by an actuarially determined rate. Since there are no “salaries,” the
rate cannot be expressed as a percentage of covered payrolls. There are no participant financed benefits in this
plan. Administrative costs are financed through investment earnings.
74
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Annual LOSAP Cost (APC) and Net LOSAP Obligation (NPO) to The County for this LOSAP are as follows:
Annual Required Contribution
Contributions made
Net Pension Obligation,
Beginning and end of the year
$
1,970,503
(1,970,503)
-
$
Actuarial Information: The annual required contribution for the current year was determined as part of the
September 30, 2012, actuarial valuation using the entry age level dollar funding method, with a 15 year closed
period amortization of the unfunded liability. Under this method a normal cost is calculated which would, if
contributed annually, fund each volunteer’s benefits during his or her career at a level dollar amount. The
unfunded actuarial liability is calculated at each valuation date as the present value of all plan benefits, less
current assets. The actuarial assumptions included a 6 percent investment rate of return compounded annually.
The Firemen are voluntary and therefore would not have a projected salary increase. The assumptions did not
include post retirement benefit increases since none are provided. The actuarial value of assets was determined
using market value as of June 30, 2012 plus adjustments to September 30, 2012.
Three years of trend information is as follows:
Annual Pension
Cost (APC)
Fiscal Year
Ending
06/30/11
06/30/12
06/30/13
$
% of APC
Contributed
Net Pension
Obligation
100%
100%
100%
NONE
NONE
NONE
1,670,207
2,026,627
1,970,503
Funded Status and Funding Progress: The following is the funded status information for the plan as of
September 30, 2012, the most recent actuarial valuation date and the two preceding years.
Actuarial
Valuation
Date
09/30/10
09/30/11
09/30/12
Actuarial
Value of
Assets
$
15,106,341 $
18,430,763
19,403,069
Actuarial
Accrued
Liability (AAL)
Entry Age
26,762,302
28,509,932
29,236,000
Percentage
Funded
(1)/(2)
56.4%
64.6%
66.4%
Unfunded
AAL (UAAL)
(2)-(1)
$
11,655,961
10,079,169
9,832,931
Covered
Payroll
UAAL as a
Percentage of
Covered Payroll
((2-1)/5)
N/A
N/A
N/A
N/A
N/A
N/A
The schedules of funding progress, presented as required supplementary information (RSI) following the notes
to the financial statements, present multiyear trend information about whether the actuarial values of plan assets
are increasing or decreasing over time relative to the AALs for benefits.
75
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
c. PENSION PLAN – SHERIFF’S OFFICE PENSION SYSTEM
The County instituted and began administering a single employer defined benefit pension plan, the Sheriff’s
Office Pension System (the SOPS) effective July 1, 1997, for certain law enforcement and correctional
employees of the Office of the Sheriff of Harford County. The SOPS issues a publicly available financial report
that includes financial statements and required supplementary information. The report may be obtained by
writing to Harford County Government, Office of the Treasurer, 220 South Main Street, Bel Air, Maryland
21014, or by calling 410-638-3316.
The Internal Revenue Service issued a determination letter on September 20, 2002, which stated that the Plan
and its underlying trust qualify under the applicable provision of the Internal Revenue Code, and therefore are
exempt from Federal income taxes. In the opinion of the Plan Administrator, the Plan and its underlying trust
have operated within the terms of the Plan and remain qualified under the applicable provisions of the Internal
Revenue Code.
Plan Description: Harford County Bill No. 97-20 assigns the authority to establish and amend the benefit
provisions of the plan to the government by county ordinance. The SOPS provides retirement, disability and
death benefits to plan members and their beneficiaries. Effective July 1, 2005, per Bill 05-22, the cost of living
increase of the CPI-U is limited to 3 percent applied each July 1 for all participants in pay status for the requisite
12 months.
The membership data related to the SOPS at July 1 was as follows:
Retirees and beneficiaries currently receiving benefits
Terminated plan members entitled to, but not yet receiving benefits
Active plan members
Total
65
6
129
200
Basis of Accounting: The SOPS uses the accrual basis of accounting. Plan member contributions are recognized
in the period in which the contributions are due. Employer contributions are recognized when due and the
employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized
when due and payable in accordance with the terms of the plan.
Method used to Value Investments: Investments are reported at fair market value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national exchange are valued at the last
reported sales price at current exchange rates. The County has hired an investment firm to manage the
investments of the Sheriff’s Office Pension System.
76
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Contributions and Funding Policy: Plan members are required to contribute 7.0 percent of their annual covered
salary. The County is required to contribute at an actuarially determined rate, currently 32.0 percent of covered
payroll. Per Bill 97-20, contribution requirements of the plan members and the County are established and may
be amended by County legislature. Administrative costs of the SOPS are to be paid by the trust unless the
County decides to do so.
Annual Pension Cost (APC) and Net Pension Obligation (NPO) to the County for the SOPS are as follows:
Annual Required Contribution
Contributions made
Net Pension Obligation,
Beginning and end of the year
$
$
2,287,714
(2,287,714)
-
Actuarial Information: The annual required contribution for the current year was determined as part of the July
1, 2012, actuarial valuation using the projected unit cost method. Under this method, the actuarial liability
represents the present value of projected benefits prorated for service to date for current participants. The
normal cost represents the present value of projected benefits allocated to the current year for active participants
who have not attained normal retirement age. Any actuarial gains and losses resulting from actual plan
experiences either more or less favorable than anticipated on the basis of the actuarial assumptions and asset
valuation method will result in direct adjustments of the unfunded actuarial accrued liability. These adjustments
will be amortized over a rolling 15-year period.
Generally, contributions toward the funding of the plan are derived as the sum of the normal cost and a payment
toward the amortization of the unfunded actuarial liability. The original unfunded accrued liability will be
amortized over the next 10 years, closed; various adjustments are being amortized over 10 to 29 years, closed.
Payments toward the unfunded liability increase by 3.0 percent per year. The actuarial assumptions included (a)
a 7.5 percent investment rate of return compounded annually and (b) salary increases of 9.5 percent for each of
the first four years of service, 6.5 percent for the fifth year, 5.5 percent for each of the next five years, 5.0
percent for each of the next 15 years, and 3.5 percent annually thereafter.
Three years of trend information is as follows:
Fiscal Year
Ending
06/30/11
06/30/12
06/30/13
Annual Pension
Cost (APC)
$
% of APC
Contributed
Net Pension
Obligation
100%
100%
100%
NONE
NONE
NONE
2,140,299
2,258,322
2,287,714
77
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Funded Status and Funding Progress: The following is the funded status information for the plan as of July 1,
2012 and two years preceding:
Actuarial
Valuation
Date
7/1/2010
7/1/2011
7/1/2012
Actuarial
Value of
Assets
$
32,478,788 $
34,629,058
36,602,822
Actuarial
Accrued
Liability (AAL)
Projected Unit
Cost
47,756,509
50,273,394
55,693,186
Percentage
Funded
(1)/(2)
68.0%
68.9%
65.7%
Unfunded
AAL (UAAL)
(2)-(1)
$
15,277,721 $
15,644,336
19,090,364
Covered
Payroll
6,728,974
6,942,604
6,595,866
UAAL as a
Percentage of
Covered Payroll
((2-1)/5)
227.0%
225.3%
289.4%
The schedules of funding progress, presented as required supplementary information (RSI) following the notes
to the financial statements, present multiyear trend information about whether the actuarial values of plan assets
are increasing or decreasing over time relative to the AALs for benefits.
d. PENSION PLANS – COMPONENT UNITS
Harford Center, Inc.: The Center participates in a tax-deferred annuity plan qualified under Section 401(k) of
the Internal Revenue Code. The Plan covers all full-time employees of the Center. Employees may make
contributions to the Plan up to a maximum amount allowed by the Internal Revenue Code. Plan expenses were
zero for the year ended June 30, 2013.
F. OTHER POST EMPLOYMENT BENEFIT PLANS
PRIMARY GOVERNMENT
Beginning in fiscal year 2008 the County administers a single employer defined benefit post-employment health
care plan, titled Other Post Employment Benefit (OPEB) Plan. The County established a trust to act solely as a
funding mechanism for the employers cost of benefits provided by the OPEB Plan. This trust fund is included
solely in these financial statements and does not issue a publicly available financial report, as an Other Post
Employment Benefits Trust Fund.
Plan Description: The County’s OPEB Plan is established by the Administrative Policy on Retiree Medical
Benefits (APRMB) of Harford County, Maryland, effective July 1, 1994, as amended. The APRMB defines the
terms, including eligibility and benefits, of the retiree health and welfare benefits provided by the County.
Employees of the County who retire from active County service with a pension benefit under the Maryland State
Retirement System or the Sheriff’s Office Pension System may receive a subsidy toward the purchase of group
health insurance. Any employee (except Sheriff personnel) hired after July 1, 2010 automatically go into the
new Post Employment Health Plan (PEHP) as described below.
78
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Under the current APRMB, retirees may continue the same medical, dental, vision and life insurance coverage
they are entitled to receive (including family coverage) as active employees. Employees with deferred
retirements are not eligible for a subsidy. Effective July 1, 1998, the spouses of employees also receive a
subsidy toward the purchase of group health benefits. Spouses receive the same subsidy as the retiree. The
subsidy for retirees and their spouses for post-employment medical insurance is based on the employee’s years
of service with the County. From July 1, 2008 to February 28, 2009, 10 years was required to receive a subsidy.
Effective March 1, 2009, the APRMB was changed to require a minimum of 20 years to receive a subsidy. This
change does not apply to any Sheriff’s Office personnel; and is not retroactive for any employees who retired
before March 1, 2009. Any employee that does not elect to enroll in benefits at the time of the employee’s
retirement has forfeited the right to any future retiree medical benefits. The subsidy related to years of service
for all County employees effective March 1, 2009 is:
Years of Credit
Service
0-9 years
10-14 years
15-19 years
20-24 years
25 years or more
Employer Subsidy Percentage
Employees Retiring
Prior to March 1, 2009
And Sheriff’s Office Employees
0%
75%
80%
85%
90%
Employees Retiring
On or after
March 1, 2009
0%
0%
0%
85%
90%
The Sheriff’s Office employees are also eligible for 90% subsidy for in-line-of-duty retirements with a minimum
of 5 years of service. Membership in the plan consisted of the following as of the most recent actuarial
valuation, dated December 20, 2011:
Plan Participants
Retirees (Pre-Medicare)
Retirees (Medicare Age)
Active Employees
Total
*includes spouses
259 *
317 *
1,323
1,899
On July 27, 2010, Harford County, Maryland signed a Retiree Healthcare Side Agreement with the AFSCME
Local 1802, Council 67 and MCEA Chapter 610. This agreement states that any employee hired after July 1,
2010, will be placed in a Post Employment Health Plan (PEHP) in lieu of the retiree health care subsidy offered
by the County. Employees hired prior to July 1, 2010 were offered a one-time election from the current retiree
health care subsidy to the PEHP, to the extent permitted under the Internal Revenue Code and Regulations.
These changes do not apply to any Sheriff’s Office personnel. The retirees under this plan may also continue the
same medical, dental, vision and life insurance coverage they are entitled to receive (including family coverage)
as active employees. The difference will be that the retiree will pay the entire group rate price per insurance
plan out of the funds received through the PEHP. The County has negotiated with the Union representatives that
10% of eligible employees’ average salaries will be placed in the PEHP until otherwise specified.
79
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Basis of Accounting: The plan uses the accrual basis of accounting. Employer contributions are recognized
when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds
are recognized when due and payable in accordance with the terms of the plan.
Funding Policy: The County is not required by law or contractual agreement to provide funding for retiree
benefits other than the pay-as-you-go amount necessary to provide current benefits to retirees and eligible
beneficiaries/dependents. The County may contribute to the Trust Fund those amounts that the County Council
appropriates. All contributions and all earnings and other additions, less payments, constitute the assets of the
Trust Fund; which must be held for the exclusive benefit of participants covered by the APRMB. The Trust may
be, but is not required to be, the sole source of funding for the employers share of the cost of benefits to be
provided under APRMB. The County contributed $13,757,000 ARC during fiscal year 2013; the retirees paid
$677,409 toward the cost of their benefits. The Trust reimbursed the County for the County’s share of retiree’s
premiums of $4,078,444. In addition the hidden subsidy, actuarially estimated at $1,025,000 for fiscal year
2013, transferred from the Trust to the County, leaving the Trust Net Position of $61,506,497.
Trust Net Position as of June 30 is derived as follows:
Trust Net Position as of July 1, 2012
County Contribution
Net Appreciation in Fair Value of Investments
Interest and Dividends
Retirees Contributions
Payment for County’s Share of Premiums
Payment for Retirees’ Share of Premiums
Payment for Administrative and Investment Expenses
Estimated Hidden Subsidy Transfer
Trust Net Position as of June 30, 2013
$
47,159,834
13,757,000
4,931,651
1,016,189
677,409
(4,078,444)
(677,409)
(254,733)
(1,025,000)
$
61,506,497
The funding for the PEHP will be negotiated by the County and both Unions each year. The County may
contribute to the employee’s accounts those amounts that the County Council appropriates based on the formula
designated in the agreement. The formula to be utilized will be the annual salaries of the employees enrolled in
the PEHP calculated by a percentage of those aggregate salaries that is determined by the County, AFSCME,
and MCEA, which will constitute the funds to be contributed to the PEHP by the County. The funds will be
equally distributed between the participants in the PEHP. There was a total of $1,440,190 contributed to this
plan and a total of 313 employees are currently enrolled as of June 30, 2013.
Employees may also elect to have the dollar value of their use or lose annual leave placed into a PEHP account.
The total funds contributed under this method are $276,820 for 123 employees. The Post Employee Health Plan
will be administered by a third party in individual accounts which will grow tax-free for health care expenses
after an employee leaves the County.
80
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Method Used to Value Investments: Investments are reported at fair market value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national exchange are valued at the last
reported sales price at current exchange rates. The County has hired an investment firm to manage the
investments of the Other Post Employment Benefits Trust Fund.
Annual OPEB Cost and Net OPEB Obligations: The County’s OPEB cost (expense) is calculated based on the
annual required contribution of the employer (ARC), an amount that was actuarially determined in accordance
with the paramaters of GASB 45. The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over
a period not to exceed 30 years.
The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB
obligation for fiscal year ended June 30, 2013, were as follows:
Annual Required Contribution
Contributions made
Net OPEB Obligation,
Beginning and End of the Year
$
13,757,000
(13,757,000)
$
-
The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB
obligation for the fiscal year ended June 30, 2013, and the two preceding years were as follows:
Fiscal Year
Ending
6/30/2011 $
6/30/2012
6/30/2013
Annual OPEB
Cost
12,623,000
13,132,000
13,757,000
% of Annual
OPEB Cost
Contributed
Net OPEB
Obligation
100%
100%
100%
NONE
NONE
NONE
Funding Status and Funding Progress: Actuarial valuations of an ongoing plan involve estimates of the value
of reported amounts and asssumptions about the probability of occurrence of events far into the future.
Examples include assumptions about future employment, mortality and the healthcare cost trend. Amounts
determined regarding the funded status of the Plan and the ARC of the County are subject to continual revision
as actual results are compared with past expectations and new estimates are made about the future. The schedule
of funding progress, shown as required supplementary information, presents the results of OPEB valuations as
of June 30, 2013. The schedule will eventually provide multi-year trend information about whether the actuarial
values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for
benefits.
81
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Three years of trend information is as follows:
(1)
Actuarial
Value of
Assets
As of:
7/1/2010
7/1/2011
7/1/2012
$
30,551,000
41,278,000
51,226,000
$
(2)
Actuarial
Accrued
Liability
(AAL)
(1)/(2)
Funded
Ratio
143,675,000
163,606,000
175,328,000
21.3%
25.2%
29.2%
(2) – (1)
Unfunded
AAL
(UAAL)
$ 113,124,000
122,328,000
124,102,000
(5)
Covered
Payroll
$ 92,424,818
90,197,076
89,914,394
( (2 – 1)/5)
UAAL as a
Percentage
Of Covered
Payroll
122.4%
135.6%
138.0%
Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes are based on the
substantive plan (the plan as understood by the employer and the plan members) and include the types of
benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the
employer and plan members to that point. The actuarial methods and assumptions used include techniques that
are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations. The annual required contribution for the
current year was determined as part of the December 20, 2011 actuarial evaluation using the projected unit credit
method; it is being amortized over a period of 30 years on a closed basis. The actuarial assumptions include an
7.5 percent investment rate of return compounded annually. The funding method is level percentage of projected
payroll. Payroll is assumed to increase at 3.5 percent per annum. This assumption is used to determine the level
percentage of payroll amortization factor. For fiscal year 2013, the inflation rate is 2.9 percent. The annual
healthcare costs trend rate is 8.5 percent initially, reduced by decrements to an ultimate rate of 4.6 percent.
COMPONENT UNITS
The Harford County Public Schools provide medical, dental and life insurance benefits to eligible employees
who retire from employment with the Harford County Public Schools. The employer’s contributions are
financed on a pay-as-you-go basis, and the future payment of these benefits is contingent upon the annual
approval of the operating budget. Details of the postemployment benefits provided are as follows:
Medical Benefits – Retirees are eligible for continued membership in one of the school system’s group medical
plans provided that they have at least 10 years service with the Harford County Public Schools and are under 65
years of age. The school system pays either 85% or 90% of these medical insurance premiums, based on the
plan chosen by the retiree. The school system pays 90% of the insurance premiums for Medicare supplemental
insurance for retirees age 65 and older. The medical benefits paid by the Harford County Public Schools for the
year ended June 30, 2013 was $18,843,261. As of June 30, 2013, 2,169 of approximately 2,365 eligible retirees
were receiving benefits.
Dental Benefits – The Harford County Public Schools pays 90% of dental insurance premiums for retirees with
at least 10 years service. The dental benefits paid by the Harford County Public Schools for the year ended June
30, 2013, was $925,331. As of June 30, 2013, 2,205 of approximately 2,365 eligible retirees were receiving
benefits.
82
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
Life Insurance Benefits – The Harford County Public Schools pays 90% of the life insurance premiums for
retirees with at least 10 years of service. The amount of insurance coverage is reduced to $20,000 upon
retirement to $10,000 five years after retirement. The life insurance benefits paid by the Harford County Public
Schools for the year ended June 30, 2013, was $49,601. As of June 30, 2013, 2,055 of approximately 2,365
eligible retirees were receiving benefits.
Annual OPEB Cost and Net OPEB Obligation
The Harford County Public Schools’ annual other post employment benefit (OPEB) cost (expense) is calculated
based on the annual required contribution of the employer (ARC), an amount actuarially determined in
accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on
an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years. The following table shows the components of the
Harford County Public Schools’ annual OPEB cost for the year ended June 30, 2013, the amount actually
contributed to the plan, and changes in the Harford County Public Schools’ net OPEB obligation:
Annual required contribution
Interest on net OPEB obligation
Amortization of net OPEB obligation
Annual OPEB cost (expense)
Contributions made
Increase in net OPEB obligation
Net OPEB obligation - beginning of year
Net OPEB obligation - end of year
$
$
56,481,000
5,415,000
(5,916,000)
55,980,000
(20,608,000)
35,372,000
127,410,929
162,782,929
The Harford Community College (the College) sponsors post-employment medical benefits under a single
employer defined benefit plan. Any full-time employee of Harford Community College is eligible to participate
in the plan. The College allows access to the plan if the retiree: a) retires or becomes disabled with an
immediate benefit from the State Retirement and Pension System of Maryland or b) meets the minimum age
eligibility requirement to begin distribution from the Maryland Optional Retirement Plan and c) has been
actively participating within the College sponsored health plan for at least the most recent ten (10) full
consecutive years and d) has at least 10 years of employment service. Disabled participants must reach
retirement eligibility. Dependents and surviving spouses of participants are allowed access to the plan but must
also pay the full premium. A closed group of retirees receives an annual subsidy of $4,800 as part of a
retirement widow benefit program. As of June 30, 2013, there were seven eligible and participating retirees
receiving an annual subsidy. As of June 30, 2013, there were 51 participants out of 336 total participants
receiving benefits.
The College funds its post-employment benefits on a pay-as-you-go basis.
The College’s OPEB cost is calculated based on the ARC of the employer, an amount that was actuarially
determined in accordance with the parameters of GASB 45. The ARC represents a level of funding that, if paid
on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities
(or funding excess) over a period not to exceed thirty years.
83
HARFORD COUNTY, MARYLAND
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2013
NOTE 5 – OTHER INFORMATION– CONTINUED
As of June 30, 2013, the College’s annual required contribution; contributions made and net OPEB obligation
were:
Annual required contribution
$
95,000
Interest on net OPEB obligation
5,000
Adjustment to annual required contribution
(6,000)
Annual OPEB cost (expense)
94,000
Contributions made
(81,000)
Increase in net OPEB obligation
13,000
Net OPEB obligation - beginning of year
120,221
Net OPEB obligation - end of year
$
133,221
The Harford County Public Library (the Library) provides a portion of medical insurance benefits, in
accordance with state statutes, to eligible employees who retire from employment with the Harford County
Public Library. The Library’s contributions are financed on a pay-as-you-go basis through the County.
Employees who retire from Harford County Public Library who are eligible to participate in the State Pension
Plan are eligible for medical insurance during retirement. Retirees who are eligible for this subsidy must elect
coverage at the time of retirement. Retirees may not elect to discontinue and re-enroll at a later date. Currently,
58 retirees who meet eligibility requirements for employer subsidized health insurance are enrolled in the retiree
medical and dental plans.
Annual OPEB Cost and net OPEB Obligation – The Library’s annual other postemployment benefit (OPEB)
cost (expense) is calculated based on the annual required contribution (ARC) of the employer, an amount
actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level
of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The following table shows the components of the Library’s annual OPEB cost for the year, the amount actually
contributed to the plan, and changes in the Library’s net OPEB obligation.
$
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost (expense)
Contributions made
Increase in net OPEB obligation
Net OPEB obligation - beginning of year
Net OPEB obligation - end of year
$
84
1,721,000
240,267
(290,000)
1,671,267
(192,571)
1,478,696
6,864,762
8,343,458
HARFORD COUNTY, MARYLAND
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
PENSION TRUST FUNDS
Schedule 1
SHERIFF'S OFFICE PENSION SYSTEM
(1)
(2)
(3)
Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial Accrued
Liability (AAL)
Percentage
Funded
(1)/(2)
07/01/2010
07/01/2011
07/01/2012
$ 32,478,788 $
34,629,058
36,602,822
Projected Unit Cost
47,756,509
50,273,394
55,693,186
68.0%
68.9%
65.7%
$
(4)
Unfunded
AAL
(UAAL)
(2)-(1)
(5)
Covered
Payroll
15,277,721 $
15,644,336
19,090,364
6,728,974
6,942,604
6,595,866
(6)
UAAL as a
Percentage of
Covered Payroll
((2-1)/5)
227.0%
225.3%
289.4%
VOLUNTEER FIREFIGHTERS LENGTH OF SERVICE AWARD PROGRAM (LOSAP)
(1)
(2)
(3)
Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial Accrued
Liability (AAL)
Entry Age
Percentage
Funded
(1)/(2)
09/30/2010
09/30/2011
09/30/2012
$ 15,106,341 $
18,430,763
19,403,069
26,762,302
28,509,932
29,236,000
56.4%
64.6%
66.4%
N/A Not applicable because the volunteers are not compensated.
86
$
(4)
Unfunded
AAL
(UAAL)
(2)-(1)
(5)
Covered
Payroll
(6)
UAAL as a
Percentage
of Covered Payroll
((2-1)/5)
11,655,961
10,079,169
9,832,931
N/A
N/A
N/A
N/A
N/A
N/A
HARFORD COUNTY, MARYLAND
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
OTHER POST EMPLOYMENT BENEFIT (OPEB) TRUST
Schedule 2
Actuarial
Valuation
Date
07/01/2010 $
07/01/2011
07/01/2012
(1)
(2)
(3)
Actuarial
Value of
Assets
Actuarial Accrued
Liability (AAL)
Projected Unit Credit
Percentage
Funded
(1)/(2)
30,551,000
41,278,000
51,226,000
$
143,675,000
163,606,000
175,328,000
21.3%
25.2%
29.2%
87
$
(4)
Unfunded
AAL
(UAAL)
(2)-(1)
(5)
Covered
Payroll
113,124,000 $
122,328,000
124,102,000
92,424,818
90,197,076
89,914,394
(6)
UAAL as a
Percentage of
Covered Payroll
((2-1)/5)
122.4%
135.6%
138.0%
HARFORD COUNTY, MARYLAND
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS AND OTHER CONTRIBUTING ENTITIES
OTHER POST EMPLOYMENT BENEFIT (OPEB) TRUST FUND
Schedule 3
Year
Ended
June 30
Annual
Required
Contribution
Percentage
Contributed
2011
2012
2013
12,623,000
13,132,000
13,757,000
100%
100%
100%
The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated.
Additional information as of the latest actuarial valuation is as follows:
Valuation date
12/20/11
Actuarial cost method
Projected Unit Credit Method
Amortization method
Level Percentage of Projected Payroll
Remaining amortization factor
16 (rounded)
Asset valuation method
Market Value
Actuarial assumptions:
Discount Rate
7.5%
Projected salary increases
3.5%
88
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APPENDIX B
Form of Approving Opinion of Bond Counsel
Consolidated Public Improvement Bonds,
Series 2014
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FORM OF OPINION OF BOND COUNSEL
$40,000,000
HARFORD COUNTY, MARYLAND
CONSOLIDATED PUBLIC IMPROVEMENT BONDS
SERIES 2014
March 27, 2014
(Closing Date)
Harford County, Maryland
Bel Air, Maryland
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance by Harford County,
Maryland, a body politic and corporate and a political subdivision of the State of Maryland (the
“County”), of its $40,000,000 Consolidated Public Improvement Bonds, Series 2014 (the
“Bonds”).
We have examined the law and such certified proceedings and other papers as we have
deemed necessary to render this opinion. The scope of our engagement as bond counsel extends
solely to an examination of the facts and law incident to rendering the opinion specifically
expressed herein. This opinion is dated as of the date of issuance and delivery of the Bonds.
Unless the context clearly indicates otherwise, each capitalized term used in this opinion
shall have the same meaning as set forth in the Bonds.
As to questions of fact material to our opinion, without undertaking to verify the same by
independent investigation, we have relied upon the certified proceedings of the County,
certifications by public officials and certifications by the officers, employees and representatives
of the County.
We refer you to the Bonds for a description of the purposes for which the bonds are
issued, the security for the Bonds, the manner in which and times at which the principal of and
interest on the Bonds are payable, the interest rates payable on the Bonds, the provisions under
which the Bonds may be redeemed prior to their stated maturity and all other details of the
Bonds.
We do not express any opinion herein concerning any law other than the law of the State
of Maryland and the federal law of the United States of America.
We have assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals of such latter
documents.
B-1
Based upon, and subject to, the foregoing, and on the basis of statutes, regulations and
decisions existing on the date hereof it is our opinion, as of the date hereof that:
1. The Bonds are the valid and binding general obligations of the County to the payment of
which, principal and interest, the full faith and credit and taxing power of the County are
unconditionally pledged.
2. The County is unconditionally obligated to pay the principal of the Bonds and the interest
thereon when due from unlimited ad valorem taxes on all property subject to assessment
within the corporate limits of the County.
We direct your attention to the opinion of Miles & Stockbridge P.C., Special Tax
Counsel, as to matters involving taxation for Federal income tax purposes and taxation by the
State of Maryland.
The rights of any holder of bonds and the enforceability of the Bonds are subject to: (a)
the exercise of judicial discretion in accordance with general principles of equity (whether
applied by a court of law or a court of equity), and (b) bankruptcy, insolvency, reorganization,
moratorium or other laws heretofore or hereafter in effect affecting creditors’ rights, to the extent
constitutionally applicable.
Very truly yours,
ROYSTON, MUELLER, McLEAN & REID, LLP
B-2
APPENDIX C
Form of Approving Opinion of Special Tax Counsel –
Consolidated Public Improvement Bonds,
Series 2014
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FORM OF OPINION OF SPECIAL TAX COUNSEL
$40,000,000
HARFORD COUNTY, MARYLAND
CONSOLIDATED PUBLIC IMPROVEMENT BONDS
SERIES 2014
March 27, 2014
(Closing Date)
Harford County, Maryland
Bel Air, Maryland
Ladies and Gentlemen:
We have acted as special tax counsel in connection with the issuance by Harford County,
Maryland, a body politic and corporate and a political subdivision of the State of Maryland (the
“County”), of its $40,000,000 Consolidated Public Improvement Bonds, Series 2014 (the “Bonds”).
As special tax counsel, we have examined:
1. The Authorizing Legislation consisting of Bill No. 07-16, As Amended, enacted by the County
Council on July 10, 2007, effective September 17, 2007; Bill No. 08-35, As Amended, enacted by
the County Council on June 17, 2008, effective August 25, 2008, as revised by Bill No. 11-25
enacted by the County Council on July 12, 2011, effective September 19, 2011, as revised by Bill
No. 12-39 enacted by the County Council on November 20, 2012, effective January 28, 2013;
Bill No. 09-26, enacted by the County Council on November 10, 2009, effective January 12,
2010; Bill No. 10-18, enacted by the County Council on June 15, 2010, effective August 16,
2010, as revised by Bill No. 11-25 enacted by the County Council on July 12, 2011, effective
September 19, 2011; Bill No. 11-28, enacted by the County Council on July 12, 2011, effective
September 19, 2011; Bill No. 12-37, As Amended, enacted by the County Council on November
20, 2012, effective January 28, 2013; and Bill No. 13-20, As Amended, enacted by the County
Council on June 11, 2013, effective August 12, 2013, authorized by Bill No. 07-17, enacted by
the County Council on July 10, 2007, effective September 17, 2007; Bill No. 08-36, enacted by
the County Council on June 10, 2008, effective August 18, 2008, Bill No. 11-27, enacted by the
County Council on July 12, 2011, effective September 19, 2011; and Bill No. 12-36, As
Amended, enacted by the County Council on November 20, 2012, effective January 28, 2013;
Executive Orders of the County Executive; Resolution No. 3-14 enacted by the County Council
on February 18, 2014, effective February 18, 2014; and Resolution No. ___-14 enacted by the
County Council on March 11, 2014, effective March 11, 2014.
2. The form of the Bond; and
3. County’s Tax Certificate and Compliance Agreement of even date herewith (the “Tax
Certificate”).
Unless the context clearly indicates otherwise, each capitalized term used in this opinion shall
have the same meaning as set forth in the Bonds.
The scope of our engagement as special tax counsel extends solely to an examination of the facts
and law incident to rendering the opinions specifically expressed herein. This opinion is dated as of the
date of issuance and delivery of the Bonds.
C-1
As to questions of fact material to our opinion, without undertaking to verify the same by
independent investigation, we have relied upon the certified proceedings of the County, certifications by
public officials and certifications by the officers, employees and representatives of the County (including,
without limitation, certifications as to the use of proceeds of the Bonds, and other information that is
material to the opinions below).
We refer you to the Bonds for a description of the purposes for which the Bonds are issued, the
security for the Bonds, the manner in which and times at which the principal of and interest on the Bonds
are payable, the interest rates payable on the Bonds, the provisions under which the Bonds may be
redeemed prior to their stated maturity and all other details of the Bonds.
We do not express any opinion herein concerning any law other than the law of the State of
Maryland and the federal law of the United States of America.
We have assumed the authenticity of all documents submitted to us as originals, the genuineness
of all signatures, the conformity to original documents of all documents submitted to us as certified or
photostatic copies, the authenticity of the originals of such latter documents and the due authorization,
execution, delivery and enforceability of the Bonds.
Based upon, and subject to, the foregoing, and on the basis of statutes, regulations and decisions
existing on the date hereof, it is our opinion, as of the date hereof, that:
1. Under existing laws, regulations, rulings and judicial decisions, interest on the Bonds their
transfer, the interest payable on them, and any income derived from them, including any profit
realized in their sale or exchange, is and shall remain exempt from taxation by the State of
Maryland, or by any of its political subdivisions, municipal corporations or public agencies of any
kind; but existing law does not expressly refer to estate or inheritance taxes, or any other taxes not
levied or assessed directly on the Bonds, the interest thereon, their transfer or the income
therefrom, and we express no opinion with respect thereto.
2.
Under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is
excludable from gross income for federal income tax purposes.
Interest earned on the Bonds is not a tax preference item directly subject to the alternative
minimum tax on individuals and corporations under the Internal Revenue Code of 1986, as amended (the
“Code”). However, a corporate taxpayer holding the Bonds would be required to include interest on the
Bonds, to the extent provided in Section 56 of the Code, as part of its “adjusted current earnings” in
calculating the applicability and amount of the alternative minimum tax referred to above. Interest earned
on the Bonds may be subject to the branch profits tax imposed on certain foreign corporations.
In rendering the opinions expressed hereinabove, we have assumed continuing compliance with
the covenants and agreements set forth in the Tax Certificate of even date herewith, which covenants and
agreements are designed to meet the requirements (to the extent they are applicable to the Bonds) of
Section 103 and 141 through 150 of the Code; however, we assume no responsibility for, and will not
monitor, compliance with the covenants and agreements set forth in the Tax Certificate. In the event of
noncompliance with such covenants and agreements, available enforcement remedies may be limited by
applicable provisions of law and, therefore, may not be adequate to prevent the interest on the TaxExempt Bonds from becoming includible in gross income for federal income tax purposes.
In addition, we direct your attention to the section of the Official Statement relating to the Bonds
captioned “Tax Matters”, for a discussion of certain provisions of the Code which are applicable to
C-2
particular individuals, corporations and financial institutions with respect to interest on the Bonds.
Furthermore, we specifically direct your attention to the subsection of the Tax Matters section entitled "Tax
Enforcement" with respect to a discussion of the Internal Revenue Service's on-going program of auditing
tax-exempt obligations.
Very truly yours,
MILES & STOCKBRIDGE P.C.
By:___________________________
Principal
C-3
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APPENDIX D
Form of Notice of Sale
Consolidated Public Improvement Bonds, Series 2014
THIS PAGE INTENTIONALLY LEFT BLANK
NOTICE OF SALE
$40,000,000.00*
HARFORD COUNTY (MARYLAND)
GENERAL OBLIGATION BONDS
CONSISTING OF
$40,000,000.00* CONSOLIDATED PUBLIC IMPROVEMENT BONDS,
SERIES 2014
(Book-Entry Only)
NOTICE IS HEREBY GIVEN that electronic bids for the bonds will be received by the Treasurer,
Harford County, Maryland (the “County”) until 11:15 a.m. (EST) Baltimore, Maryland time on March 11, 2014 for
the purchase of all (but not less than all) of the County’s Consolidated Public Improvement Bonds, Series 2014,
aggregating $40,000,000* (the “Consolidated Public Improvement Bonds” or the “Bonds”). The bids will be
received up to the time (unless postponed as described herein) and in the manner described below:
Bidding Procedures
Submit electronically via PARITY® in accordance with its Rules of Participation and this Notice of Sale
until 11:15 a.m. for the Bonds, but no bid will be received after the time for receiving bids specified above.
Provisions in this Notice of Sale conflicting with those PARITY® Rules of Participation shall control. In the event
of a malfunction in the electronic bidding process, the bid time and/or date may be postponed at the option of the
County. For further information about PARITY®, potential bidders may contact:
Public Advisory Consultants
25 Crossroads Drive
Suite 402
Owings Mills, Maryland 21117
Attention: Lester Guthorn/Susan Ostazeski
Telephone: 410-581-4820
Who is acting as financial advisor to the County, or
PARITY®
1359 Broadway
New York, New York 10018
Telephone: 212-849-5021
Any prospective bidder must submit its electronic bid through the facilities of PARITY®, in accordance
with the Rules of Participation and any other requirements of PARITY®. Prospective bidders must be contract
customers of PARITY® in order to submit an electronic bid.
An electronic bid made through the facilities of PARITY® shall be deemed an offer, in response to this
Notice of Sale, and shall be binding upon the bidder. The County shall not be responsible for any malfunction or
mistake made by, or as a result of the use of the facilities of, PARITY®, the use of such facilities being the sole risk
of the prospective bidder.
_____________________
*Preliminary, subject to adjustment as provided herein.
D-1
Neither the County nor PARITY® shall have any duty or obligation to provide or assure access to
PARITY® to any prospective bidder. The County is using PARITY® as a communication mechanism, and not as
the County’s agent to conduct the electronic bidding for the Bonds. The County is not bound by any advice and
determination of PARITY® to the effect that any particular bid complies with the terms of this Notice of Sale. All
costs and expenses incurred by prospective bidders in connection with their submission of bids via PARITY® are
the sole responsibility of the bidders; and the County is not responsible, directly or indirectly, for any such costs or
expenses. If a prospective bidder encounters any difficulty in submitting, modifying, or withdrawing a bid for the
Bonds, such bidder should telephone PARITY® (212-806-8304) and notify the County’s Bond Counsel, Royston,
Mueller, McLean & Reid, LLP, Attention: Stephen C. Winter, by facsimile at 410-823-1708.
Electronic bids must be submitted for the purchase of the Bonds via PARITY®. Bids will be
communicated electronically to the County not later than 11:15 a.m. for the Consolidated Public Improvement
Bonds (EST) on March 11, 2014. Prior to that time, a prospective bidder may (1) submit the proposed terms of its
bid, (2) modify the proposed terms of its bid, in which event the proposed terms as last modified will (unless the bid
is withdrawn as described herein) constitute its bid for the Bonds, or (3) withdraw its proposed bid for the Bonds.
Once the bids are communicated electronically via PARITY® to the County, each bid will constitute an irrevocable
offer to purchase the Bonds bid for on the terms therein provided. For the purposes of the electronic bid, the time
maintained by PARITY® shall constitute the official time.
The Consolidated Public Improvement Bonds, Series 2014 will be issued by the County pursuant to Bill
No. 07-16, As Amended, enacted by the County Council on July 10, 2007, effective September 17, 2007; Bill No.
08-35, As Amended, enacted by the County Council on June 17, 2008, effective August 25, 2008, as revised by Bill
No. 11-25 enacted by the County Council on July 12, 2011, effective September 19, 2011, as revised by Bill No. 1239 enacted by the County Council on November 20, 2012, effective January 28, 2013; Bill No. 09-26, enacted by
the County Council on November 10, 2009, effective January 12, 2010; Bill No. 10-18, enacted by the County
Council on June 15, 2010, effective August 16, 2010, as revised by Bill No. 11-25 enacted by the County Council on
July 12, 2011, effective September 19, 2011; Bill No. 11-28, enacted by the County Council on July 12, 2011,
effective September 19, 2011; Bill No. 12-37, As Amended, enacted by the County Council on November 20, 2012,
effective January 28, 2013; and Bill No. 13-20, As Amended, enacted by the County Council on June 11, 2013,
effective August 12, 2013, authorized by Bill No. 07-17, enacted by the County Council on July 10, 2007, effective
September 17, 2007; Bill No. 08-36, enacted by the County Council on June 10, 2008, effective August 18, 2008,
Bill No. 11-27, enacted by the County Council on July 12, 2011, effective September 19, 2011; and Bill No. 12-36,
As Amended, enacted by the County Council on November 20, 2012, effective January 28, 2013, Executive Orders
of the County Executive, a Resolution adopted on February 18, 2014 and a Resolution to be adopted by the County
Council on the date of sale (collectively, the “Authorizing Legislation”). The proceeds of the Consolidated Public
Improvement Bonds, Series 2014 will be used primarily to finance the costs of the acquisition, renovation or new
construction and equipping of certain capital projects described in the Authorizing Legislation.
List of Members of Account
The facilities of PARITY® currently do not allow the bidders to list the names of the members of the
account on whose behalf the bid is made. Bidders who are submitting an electronic bid are requested to provide by
facsimile the names of the members of the account on whose behalf the bid is made to the County, c/o Royston,
Mueller, McLean & Reid, LLP, 410-823-1708, Attention: Stephen C. Winter.
Right to Modify or Amend Notice of Sale; Right to Postpone Sale
The County reserves the right to modify or amend this Notice of Sale, including changing the
scheduled maturities or increasing or reducing the aggregate principal amount of Bonds and the principal
amount of any maturity offered for sale, prior to the bid date. If any modifications occur, supplemental
information with respect to the Bonds will be communicated via TM3 News Service (www.tm3.com) not later
than 9:30 a.m., Baltimore, Maryland time, on the day of sale, and bidders shall bid upon the Bonds based
upon the terms thereof set forth in this Notice of Sale, as so modified by such supplemental information.
In addition, the County reserves the right to postpone the date established for the receipt of bids. In the
event of a postponement, the new date and time of sale and any revised date of expected delivery will be announced
D-2
via TM3 News Service not later than 48 hours prior to such alternative sale date. On any such alternative sale date,
bidders may submit sealed bids for the purchase of the Bonds in conformity with the provisions of this Notice of
Sale, except for the changed date and time of sale and any revised date of delivery.
Bid Parameters
No bid of less than 100% of par, no oral bid and no bid for less than all of the Bonds described in this
Notice of Sale, will be considered. The Bonds are expected to be awarded no later than 3:00 p.m. Baltimore,
Maryland time on March 11, 2014. All proposals shall remain firm until the time of award. (For the Consolidated
Public Improvement Bonds, Series 2014, for the maturities March 15, 2025 through March 15, 2034, inclusive, no
interest rate may be bid that is lower than the interest rate for the immediately preceding maturity.)
The Bonds and payment of the principal and interest thereon, will be the unconditional general obligations
of the County and will constitute an irrevocable pledge of the full faith and credit and unlimited taxing power of the
County.
Price and Interest Rate Bid
Each bidder shall submit one bid, not less than 100% of par on all “all-or-none” basis for the Bonds. Each
bid must specify the rate or rates of interest to be paid on the Bonds, in multiples of one-eighth (1/8) or onetwentieth (1/20) of one percent (1%). Bidders may specify more than one rate of interest to be borne by the
Consolidated Public Improvement Bonds, Series 2014, but all Bonds maturing on the same date must bear interest at
the same rate; the difference between the maximum and minimum interest rates specified may not exceed three
percent (3%). A zero rate cannot be named for any maturity.
Procedures for Award and Principal Amount Changes
The aggregate principal amount and the principal amount of each maturity of the Bonds are subject to
adjustments by the County, both before and after the receipt of bids for their purchase. The aggregate principal
amount of the Consolidated Public Improvement Bonds may be decreased, but may not be increased, to an amount
in excess of $40,000,000.00. Changes to be made prior to the sale will be through TM3 News Service not later than
9:30 a.m. Baltimore, Maryland time on the date of sale (or as soon thereafter as is reasonably practical) and will be
used to compare bids and select a winning bidder. In addition, the final maturity schedule for the Bonds will be
communicated to the successful bidder by 5:00 p.m. local time on the date of the sale. The dollar amount bid for
principal and any amount bid for premium by the successful bidder will be adjusted proportionately to reflect any
reduction or increase in the aggregate principal amount of the Bonds, but the interest rates specified by the
successful bidder for all maturities will not change. The successful bidder may not withdraw its bid as a result of
any changes made within these limits.
ALL BIDS SHALL REMAIN FIRM UNTILTHE BONDS ARE AWARDED ON THE DATE OF SALE.
An award of the Bonds pursuant to this Notice of Sale, if made, will be made for each issue by the resolution of the
County Council of the County, at or before 3:00 p.m. Baltimore, Maryland time on the date of sale.
Good Faith Deposit.
A good faith deposit (the “Deposit”) is required in connection with the sale and bid for the Bonds. The
Deposit may be provided in the form of (i) a federal funds wire transfer in the amount of $1,000,000 for the
Consolidated Public Improvement Bonds, Series 2014 to be submitted to the County by the successful bidder not
later than 3:00 p.m. (EST) (the “Deposit Deadline”) on the date of sale or (ii) a financial surety bond (a “Surety
Bond”) from an insurance company acceptable to the County and licensed to issue such a bond in the State of
Maryland in the amount of the Deposit, each option as described in more detail below. The Deposit of the
successful bidder will be retained by the County to be applied in partial payment for the Consolidated Public
Improvement Bonds, Series 2014, and no interest will be allowed or paid upon the amount thereof, but in the event
the successful bidder shall fail to comply with the terms of the respective bid, the proceeds thereof will be retained
as and for full liquidated damages.
D-3
If a federal funds wire transfer is used, the County shall distribute wiring instructions for the Deposit to the
successful bidder(s) upon verification of the bids submitted by the bidders and prior to the Deposit Deadline. If the
Deposit is not received by the Deposit Deadline, the award of the sale of the Bonds to the successful bidder may be
cancelled by the County in its discretion without any financial liability of the County to the successful bidder or any
limitation whatsoever on the County’s right to sell the Bonds to a different purchaser upon such terms and
conditions as the County shall deem appropriate.
If a Surety Bond is used, it must be submitted to the County prior to 5:00 p.m. (EST) on the day prior to the
date for receipt of bids, and must be in form and substance acceptable to the County, including (without limitation)
identifying the bidder whose Deposit is guaranteed by such Surety Bond. If the Bonds are awarded to a bidder
utilizing a Surety Bond, then such successful bidder is required to submit its Deposit to the County not later than
12:00 p.m. (EST) on the next business day following the award in accordance with wire instructions delivered by the
County to such bidder. If such Deposit is not received by that time, the Surety Bond may be drawn by the County to
satisfy the Deposit requirement.
Award of Bonds and Public Offering
The County will not consider and will reject any bid for the purchase of less than all of the Bonds. THE
RIGHT IS RESERVED TO THE TREASURER TO REJECT ANY AND ALL BIDS FOR THE BONDS. The
award, if made, will be made as promptly as possible after the bids are opened to the bidder or bidders offering the
lowest interest rate to the County. The lowest interest rate shall be determined in accordance with the true interest
cost (TIC) method doubling the semiannual interest rate (compounded semiannually) necessary to discount the debt
service payments from the payment dates to the date of the Bonds and to the price bid, excluding interest accrued to
the date of delivery; provided, however, that if two or more bidders have made bids, each of which represents the
lowest true interest cost to the County, the Bonds shall be awarded to the bidder offering the highest premium and if
the highest premium is offered by two or more such bidders or if no premium is bid by any such bidders, then the
Bonds may be awarded, with their consent, in a ratable portion among such bidders, or the County, in its discretion,
may award all the Bonds to one bidder. The judgment of the County shall be final and binding upon all bidders with
respect to the form and adequacy of any bid received and as to its conformity to the terms of this Notice of Sale.
THE SUCCESSFUL BIDDER MUST REASONABLY EXPECT TO SELL TO THE PUBLIC 10% OR MORE IN
PAR AMOUNT OF THE BONDS FROM EACH MATURITY AT THE INITIAL REOFFERING PRICES AND
SHALL PROVIDE THE RELATED CERTIFICATION DESCRIBED UNDER “BIDDER CERTIFICATE”
BELOW.
Legal Opinion
The issuance of the Bonds will be subject to delivery of the approving opinions of Royston, Mueller,
McLean & Reid, LLP, Towson, Maryland, bond counsel, and Miles & Stockbridge P.C., Baltimore, Maryland,
special tax counsel, which opinions shall be substantially in the form set forth as an exhibit to the Preliminary
Official Statement referred to below.
Official Statement
Not later than seven (7) business days after the award of the Bonds to the successful bidder on the day of
sale, the County will deliver to the successful bidder an Official Statement, which is expected to be substantially in
the form of the Preliminary Official Statement referred to below. If so requested by the successful bidder at or
before the close of business on the date of the sale, the County will include in the Official Statement such pricing
and other information with respect to the terms of the reoffering of the Bonds by the successful bidder (“Reoffering
Information”), if any, as may be specified and furnished in writing by such bidder. If no Reoffering Information is
specified and furnished by the successful bidder, the Official Statement will include the interest rates on the Bonds
resulting from the bid of the successful bidder and the successful bidder shall be responsible to the County and its
officials for the Reoffering Information, and for all decisions made by such bidder with respect to the use or
omission of the Reoffering Information in any reoffering of the bonds, including the presentation or exclusion of any
Reoffering Information in any documents, including the official Statement. The successful bidder for the Bonds will
also be furnished, without cost, with up to 100 copies of the Official Statement and any amendments or supplements
thereto.
D-4
The Preliminary Official Statement of the County concerning the Bonds (the “Preliminary Official
Statement”) is in a form “deemed final” by the County for purposes of SEC Rule 15c2-12(b)(1) (the “Rule”) but is
subject to revision, amendment and completion in the final Official Statement.
The County will undertake to provide the successful bidder with further additional information to be
included in such Official Statement, when in the opinion of the County or of Bond Counsel, such additional
information constitutes a material change to such Official Statement. The County will take such steps as are
necessary to arrange for amending and supplementing the Official Statement in connection with the disclosure of
such additional information; provided, however, that the County shall have no obligation to provide such additional
information after the date which is twenty-five (25) days after the “end of the underwriting period”, as such term is
defined in the Rule.
The County agrees, in order to assist bidders in complying with SEC Rule 15c2-12(b)(5), pursuant to a
continuing disclosure certificate (the “Continuing Disclosure Certificate”) signed by the County Executive,
Treasurer and Director of Administration of the County, to provide annual reports and notices of certain events. The
undertakings of the County in the Continuing Disclosure Certificate shall be set forth in the Preliminary Official
Statement and Official Statement and any amendment or supplement thereto.
Bidder Certificate
THE SUCCESSFUL BIDDER FOR THE BONDS SHALL MAKE A BONA FIDE PUBLIC OFFERING
OF THE BONDS AT THEIR RESPECTIVE INITIAL REOFFERING PRICES AND SHALL PROVIDE THE
RELATED CERTIFICATION DESCRIBED BELOW. THE SUCCESSFUL BIDDER FOR THE BONDS MUST
REASONABLY EXPECT TO SELL TO THE PUBLIC 10% OR MORE IN PAR AMOUNT OF THE BONDS
FROM EACH MATURITY THEREOF AT THE INITIAL REOFFERING PRICES.
After the award of the Bonds, the County will prepare copies of the final Official Statement and will
include therein such additional information concerning the reoffering of the Bonds as the successful bidder may
reasonably request. The successful bidder will be responsible to the County in all aspects for the accuracy and
completeness of information provided by such successful bidder with respect to such offering.
SIMULTANEOUSLY WITH OR BEFORE DELIVERY OF THE BONDS, THE SUCCESSFUL BIDDER
SHALL FURNISH TO THE COUNTY A CERTIFICATE ACCEPTABLE TO BOND COUNSEL AND SPECIAL
TAX COUNSEL TO THE EFFECT THAT (I) THE SUCCESSFUL BIDDER HAS MADE A BONA FIDE
PUBLIC OFFERING OF THE BONDS AT THE INITIAL REOFFERING PRICES, (II) AS OF THE DATE OF
THE SALE OF THE BONDS, THE SUCCESSFUL BIDDER REASONABLY EXPECTED TO SELL A
SUBSTANTIAL AMOUNT OF THE BONDS TO THE PUBLIC (EXCLUDING BOND HOUSES, BROKERS
AND OTHER INTERMEDIARIES) AT THEIR RESPECTIVE INITIAL REOFFERING PRICES, AND (III) A
SUBSTANTIAL AMOUNT OF THE BONDS WAS SOLD TO THE PUBLIC (EXCLUDING BOND HOUSES,
BROKERS AND OTHER INTERMEDIARIES) AT THEIR RESPECTIVE INITIAL REOFFERING PRICES OR
SUCH OTHER FACTS REGARDING THE ACTUAL SALE OF THE BONDS AS BOND COUNSEL SHALL
REQUEST, AS DESCRIBED BELOW. Bond Counsel and Special Tax Counsel advise that (i) such certificate
must be made on the best knowledge, information and belief of the successful bidder, (ii) the sale to the public of
10% or more in par amount of the Bonds of each maturity at the initial reoffering prices would be sufficient to
certify as to the sale of a substantial amount of the Bonds, and (iii) reliance on other facts as a basis for such
certification would require evaluation by Bond Counsel and Special Tax Counsel to assure compliance with the
statutory requirement to avoid the establishment of an artificial price for the bonds.
Book-Entry Only Form
The Bonds will be issued in book-entry-only form, registered in the name of Cede & Co., as nominee of
The Depository Trust Company, New York, New York (“DTC”) and immobilized in custody. Principal and interest
on the Bonds will be payable to DTC or its nominee as registered owners of the Bonds. Information concerning
DTC and its book-entry system is included in the Preliminary Official Statement and bidders should rely solely on
that material.
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Interest Payment Dates
The Consolidated Public Improvement Bonds, Series 2014 will be dated the date of delivery and will bear
interest from the date of delivery, payable on September 15, 2014 and semiannually thereafter on each March 15 and
September 15 until maturity or redemption.
The record date for payment of principal and interest shall be the tenth day of the month immediately
preceding the date on which payment is due.
Preliminary Principal Amounts
Unless the maturity schedule below is revised as described under “Procedures for Award and Principal
Amount Changes” above, the Consolidated Public Improvement Bonds, Series 2014 will mature on March 15 in
each of the years 2015 through 2034, inclusive, as follows (the “Maturity Schedule”):
March 15
Year of Maturity
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Preliminary Principal
Amount
$1,895,000
$1,900,000
$1,910,000
$1,915,000
$1,930,000
$1,940,000
$1,950,000
$1,960,000
$1,975,000
$1,985,000
March 15
Year of Maturity
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Preliminary Principal
Amount
$2,000,000
$2,010,000
$2,025,000
$2,040,000
$2,055,000
$2,070,000
$2,090,000
$2,105,000
$2,125,000
$2,120,000
Redemption
The Consolidated Public Improvement Bonds, Series 2014 which mature before March 15, 2025 are not
subject to redemption prior to maturity. The Consolidated Public Improvement Bonds, Series 2014 that mature on
and after March 15, 2025, are subject to redemption at the option of the County in whole or in part at any time
beginning March 15, 2024, without premium or penalty at par (100% of the principal amount to be redeemed) plus
accrued interest to the date of redemption.
Delivery
Delivery of the Bonds by the Treasurer of the County is expected to occur in New York, New York through
the facilities of DTC on or about March 27, 2014. The successful bidder shall pay for the Bonds on the date of
delivery in Baltimore, Maryland in IMMEDIATELY AVAILABLE FEDERAL FUNDS by 11:15 a.m. Baltimore,
Maryland time, on the closing date. Any expenses of providing immediately available funds shall be borne by the
successful bidder. Certain closing documents will be available for delivery in Baltimore, Maryland on or about
March 27, 2014. Payment on the delivery date shall be made in an amount equal to the price bid for the Bonds less
the amount of the Good Faith Deposit.
CUSIP Numbers
It is anticipated that CUSIP numbers will be printed on the bonds, but the County will assume no obligation
for the assignment or printing of such numbers on the Bonds or for the correctness of such numbers, and neither the
failure to print such numbers on the Bonds nor any error with respect thereto shall constitute cause for a failure or
refusal by the successful bidder of the Bonds to accept delivery or make payment for the Bonds.
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Closing Documents
The Bonds will be accompanied by the customary closing documents, including a no-litigation certificate,
effective as of the date of delivery, stating that there is no litigation pending against the County affecting the validity
of the bonds and a Tax Certificate and Compliance Agreement signed by the Treasurer of the County.
It shall be a condition to the obligation of the successful bidder to accept delivery of and pay for the Bonds
that, simultaneously with or before delivery and payment for the bonds, such successful bidder shall be furnished a
certificate or certificates of the County Executive, Treasurer and Director of Administration of the County to the
effect that to the best of their knowledge and belief, the Official Statement (and any amendment or supplement
thereto) (except for the Reoffering Information, as to which no view will be expressed) as of the date of sale and as
of the date of delivery of the Bonds does not contain any untrue statement of a material fact and does not omit to
state a material fact necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading and that between the date of sale and the date of delivery of the Bonds there has been no
material adverse change in the financial position or revenues of the County, except as reflected or contemplated in
the Official Statement.
In the event that all or any part of the Bonds are initially reoffered with bond insurance secured by the
successful bidder, the successful bidder shall be required to notify immediately the Treasurer of the County at the
time of sale of such event and shall provide the Treasurer of the County with any information he (she) reasonably
requests regarding such bond insurance, including the amounts paid for such insurance and interest rates that the
bonds would have borne should the bid have occurred without bond insurance. The County will, at the request and
expense of the successful bidder, include customary language in the Official Statement and the form of bond
regarding the insurance policy upon receipt of such opinions or certificates as the County reasonably may request
regarding the accuracy of any information to be included in the Official Statement and the binding nature of the
obligations contained in the insurance policy with respect to the Bonds. The County shall have no obligation to
provide the successful bidder or the bond insurance company with any other documents or opinions relating to the
Bonds.
The Preliminary Official Statement, a full financial statement concerning the County, the required form of
proposal, and other data in reference thereto as may be desired will be supplied to prospective bidders upon request
made to Kathryn L. Hewitt, Treasurer, Harford County, 220 S. Main Street, Bel Air, Maryland 21014, Telephone:
(410) 638-3314 or from the County’s Financial Advisor, Public Advisory Consultants, 25 Crossroads Drive, Suite
402, Owings Mills, Maryland 21117, Attention: Lester Guthorn, Telephone: (410) 581-4820.
Date: February 26, 2014
HARFORD COUNY (MARYLAND)
By: ______________________________
David R. Craig
County Executive
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APPENDIX E
Form of Continuing Disclosure Certificate
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$40,000,000.00*
HARFORD COUNTY, MARYLAND
Consolidated Public Improvement Bonds, Series 2014
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and
delivered by Harford County, Maryland (the “County”) in connection with the issuance of its
$40,000,000.00 Consolidated Public Improvement Bonds, Series 2014 (the “Bonds”). The
County, intending to be legally bound hereby, and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, does hereby covenant and agree as
follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the County for the benefit of the registered owners and Beneficial
Owners of the Bonds and in order to assist the Participating Underwriters in complying with
Securities and Exchange Commission Rule 15c2-12(b)(5). [The County’s obligations hereunder
shall be limited to those required by written undertaking pursuant to the Rule. The County may,
from time to time, appoint or engage a dissemination agent (“Dissemination Agent”) to assist in
carrying out its obligations pursuant to this Disclosure Certificate, and may discharge any such
Dissemination Agent, with or without appointing a successor Dissemination Agent.]
Section 2. Definitions. In addition to the definitions set forth above, which apply to any
capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the
following capitalized terms shall have the following meanings:
“Beneficial Owner” means any person which (a) has the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series
2014 Bonds (including persons holding the Bonds through nominees, depositories or
other intermediaries), or (b) is treated as the owner of any of the Bonds for federal
income tax purposes.
“EMMA System” means the MSRB’s continuing disclosure service, known as
the Electronic Municipal Market Access System, or such other electronic system
designated by the MSRB. For more information on the EMMA System, see
www.emma.msng.org.
“Listed Events” shall mean any of the events listed in Section 4(a) of this
Disclosure Certificate.
“MSRB” shall mean the Municipal Securities Rulemaking Board established
pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934, as amended. To
the extent the Rule is amended to refer to any additional or different repositories,
references in this Disclosure Certificate to the MSRB shall be deemed to include such
additional or different repositories to the extent required by the Rule.
*Preliminary; subject to change
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“Participating Underwriter” shall mean any of the original underwriters of the
Bonds required to comply with the Rule in connection with offering of the Bonds.
“Rule” shall mean Rule 15c2-12 adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended
from time to time.
Section 3. Provision of Annual Financial Information, Operating Data and Audited
Information. (a) The County shall provide to the MSRB, through the EMMA System, annual
financial information and operating data as set forth in Schedule A to this Disclosure Certificate,
such information and data to be updated as of the end of the preceding fiscal year, except as
indicated on Schedule A, and made available within 275 days after the end of each fiscal year,
commencing with the fiscal year ending June 30, 2014.
(b) The County shall provide to the MSRB, through the EMMA System, annual
audited financial statements of the County, such information to be made available within 275
days after the end of the County’s fiscal year, commencing with the fiscal year ending June 30,
2014 unless the audited financial statements are not available on or before such date, in which
event said financial statements will be provided promptly when and if available. In the event
that audited financial statements are not available within 275 days after the end of the County’s
fiscal year (commencing with the fiscal year ending June 30, 2014), the County will provide
unaudited financial statements within said time period.
(c) The presentation of the financial information referred to in paragraph (a) and
in paragraph (b) shall be made in accordance with generally accepted accounting principles as
promulgated to apply to governmental entities from time to time by the Government Accounting
Standards Board.
(d) If any of the financial information or operating data to be provided annually
pursuant to subsections (a) or (b) above can no longer be generated because the operations to
which it related have been materially changed or discontinued, the County shall include a
statement to such effect in the financial information or operating data to be provided annually
pursuant to subsections (a) or (b) above, as applicable.
(e) The County shall provide in a timely manner to the MSRB notice specifying
any failure to provide the annual financial information or operating data it has undertaken to
provide in accordance with this Section 3.
(f) If the County changes its fiscal year, it will notify the MSRB of the change
(and of the date of the new fiscal year end) prior to the next date by which the County would
otherwise be required to provide financial information and operating data pursuant to this
Section 3.
(g) The financial information and operating data to be provided pursuant to this
Section 3 may be set forth in full in one or more documents or may be incorporated by specific
reference to documents available to the public on the MSRB’s Internet Website or filed with the
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Securities and Exchange Commission. The County shall identify clearly each other document so
included by specific reference.
(h) All information provided to the MSRB pursuant to subsections (a), (b) or (e)
of this Section 3 shall be in an electronic format as prescribed by the MSRB.
Section 4. Reporting of Significant Events.
(a) This Section 4 shall govern the giving of notices of the occurrence of any of
the following Listed Events with respect to the Bonds:
(i)
(ii)
(iii)
principal and interest payment delinquencies;
non-payment related defaults;
unscheduled draws on debt service reserves reflecting financial
difficulties;
(iv)
unscheduled draws on credit enhancements reflecting financial
difficulties;
(v)
substitution of credit or liquidity providers, or their failure to
perform;
(vi)
adverse tax opinions or events, including the issuance by the
Internal Revenue Service of proposed or final determinations of
taxability, notice of proposed issue (IRS Forms 5701-TEB), or
other material notices or determinations with respect to the tax
status of the Bonds or other material events affecting the taxexempt status of the Bonds;
(vii) modifications to rights of Bond holders;
(viii) Bond calls;
(ix)
defeasances;
(x)
release, substitution, or sale of property securing repayment of the
Bonds;
(xi)
rating changes;
(xii) bankruptcy, insolvency, receivership or similar event of the
County;
(xiii) consummation of a merger, consolidation or acquisition involving
the County or the sale of all or substantially all of the assets of the
County, other than in the ordinary course of business, the entering
into of a definitive Certificate to undertake such an action or the
termination of a definitive Certificate relating to any such actions,
other than pursuant to its terms, if material;
(xiv) appointment of a successor or additional trustee or the change of
name of a trustee; and
(xv) tender offers.
(b) Whenever the County obtains knowledge of the occurrence of a Listed Event
as to the items in Section 4(a)(ii), (vii), (viii), (x), (xiii) or (xiv), the County shall as soon as
possible determine if such event would constitute material information for owners of Bonds. If
the Listed Event as to the items in Section 4(a)(ii), (vii), (viii), (x), (xiii) or (xiv) constitutes
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material information for owners of Bonds, the County shall promptly file a timely notice of such
occurrence with the MSRB, not in excess of ten business days after the occurrence of such Listed
Event;
(c) All information provided to the MSRB pursuant to this Section 4 shall be in an
electronic format as prescribed by the MSRB through the EMMA System; and
(d) Although the County does not expect that certain of the above events will
ever apply to the Bonds, the County covenants to provide notice of all enumerated events within
ten business days of the occurrence of the event, should they occur.
Section 5. Termination of Reporting Obligations. The County’s obligations under this
Disclosure Certificate shall terminate upon legal defeasance or the payment in full of all of the
Bonds either at their maturity or by early redemption. In addition, the County may terminate its
obligations under this Disclosure Certificate in any other circumstances permitted by the Rule or
SEC interpretations of the Rule. If any such termination occurs prior to the scheduled final
maturity of the Bonds, the County shall give notice of such termination in the same manner as
for a Listed Event under Section 4(b) and (c).
Section 6. Amendment.
(a) Notwithstanding any other provision of this Disclosure Certificate, the County
may amend this Disclosure Certificate, provided that such amendment is permitted by the Rule
or SEC interpretations of the Rule.
(b) In the event this Disclosure Certificate is amended pursuant to subsection (a)
above with respect to the financial information or operating data to be provided annually in
accordance with Section 3(a) or (b), the financial information and operating data provided by the
County in accordance with Section 3(a) or (b), as applicable, that contains the amended financial
information or operating data shall explain, in narrative form, the reasons for the amendment and
the impact of the change in the type of financial information or operating data being provided.
(c) If an amendment is made to this Disclosure Certificate regarding the
accounting principles to be followed in preparing financial statements, the financial information
provided pursuant to Section 3(a) or (b), as applicable, for the year in which the change is made
shall present a comparison between the financial statements or information prepared on the basis
of the new accounting principles and those prepared on the basis of the former accounting
principles. Such comparison shall include a qualitative discussion of the differences in the
accounting principles and the impact of the change in the accounting principles on the
presentation of the financial information. To the extent reasonably feasible, the comparison also
shall be quantitative. The County shall provide to the MSRB, in an electronic format as
prescribed by the MSRB, a notice of the change in the accounting principles.
Section 7. Additional Information. Nothing in this Disclosure Certificate shall be
deemed to prevent the County from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any disclosure made pursuant to Section 3(a) or (b) hereof or
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notice of occurrence of a Listed Event in addition to that which is required by this Disclosure
Certificate. If the County chooses to include any information in any disclosure made pursuant to
Section 3(a) or (b) hereof or notice of occurrence of a Listed Event in addition to that which is
specifically required by this Disclosure Certificate, the County shall have no obligation under
this Disclosure Certificate to update such information or include it in any future disclosure made
pursuant to Section 3(a) or (b) hereof or notice of occurrence of a Listed Event.
Section 8. Law of Maryland. This Disclosure Certificate, and any claim made with
respect to the performance by the County of its obligations hereunder, shall be governed by,
subject to, and construed according to the laws of the State of Maryland or the federal law of the
United States of America.
Section 9. Limitation of Forum. Any suit or other proceeding seeking redress with
regard to any claimed failure by the County to perform its obligations under this Disclosure
Certificate must be filed in the Circuit Court for Harford County, Maryland.
Section 10. Limitation on Remedies. The County shall be given notice at the address
set forth below of any claimed failure by the County to perform its obligations under this
Disclosure Certificate, and the County shall be given 15 days to remedy any such claimed
failure. Any suit or other proceeding seeking further redress with regard to any such claimed
failure by the County shall be limited to specific performance as the adequate and exclusive
remedy available in connection with such action. Written notice to the County shall be given to
the Treasurer, 220 South Main Street, Bel Air, Maryland 21014 or at such other alternate address
as shall be specified by the County with disclosures made pursuant to Section 3(a) or (b) hereof
or a notice of occurrence of a Listed Event.
Section 11. Relationship to Bonds. This Disclosure Certificate constitutes an
undertaking by the County that is independent of the County’s obligations with respect to the
Bonds; any breach or default by the County under this Disclosure Certificate shall not constitute
or give rise to a breach or default under the Bonds.
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the owners and beneficial owners from time to time of the Bonds, and shall create no rights in
any other person or entity.
Section 13. MSRB Requirements. All documents provided to the MSRB pursuant to
this Disclosure Certificate and the Rule shall be made with the EMMA System and shall be
accompanied by identifying information as prescribed by the MSRB.
Section 14. Counterparts. This Disclosure Certificate may be executed in several
counterparts, each of which shall be an original and all of which shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, this Continuing Disclosure Certificate is being executed on
behalf of the County as of this ___ day of ___________, 2014.
(SEAL)
ATTEST/WITNESS:
HARFORD COUNTY, MARYLAND
________________________________
By: ____________________________________
David R. Craig, County Executive
_________________________________
By: ____________________________________
Mary F. Chance, Director of Administration
_________________________________
By: ____________________________________
Kathryn L. Hewitt, Treasurer
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Schedule A
(1)
General Fund Summary of Revenues, Expenditures and Encumbrances and Changes in
Fund Balance
(2)
Assessed Values, Tax Rates, Tax Levies and Collections
(3)
Bonded Debt
(4)
Schedule of Revenues and Expenditures Compared to Budget
(5)
Summary of Gross Direct Debt Service Requirements
(6)
Description of Material Litigation, if any
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