PRINCESS ANNE — For the second year in a row Somerset County’s financial picture was brighter than budgeted with the year-end general fund balance growing by $1 million when the original projection was that it would need $1.8 million in reserves to cover a loss.

The county budget for fiscal year 2020 at nearly $48 million was 2.5% less than the prior year with the tax rate unchanged. It was a year restrained in its final months when the coronavirus pandemic started in mid-March, continuing even after the books closed on June 30.

The actual general fund revenue of $42.5 million was underbudget by $422,000 and expenditures were over budget by $900,000 at $45.9 million. However, according to Herb Geary, independent auditor with the TGM Group, when debt service proceeds were taken out of the analysis “overall, there was a $1 million increase.”

When all local government fund balances were totaled to include the roads board, superstorm Sandy accounts, and others, the increase was $2.5 million. With that the total fund balance grew to $17.9 million.

Of that amount $5.4 million is not committed or assigned.

Comparing the results with a “rule of thumb” that the general fund balance be a third of operating expenses, Somerset County was at 32% and “right on the target,” Mr. Geary said.

FY20 included the first $4 million permanent loan for 20 years with USDA to cover soft costs associated with construction of the new Somerset County Technical High School. Mr. Geary said that was unbudgeted but the county’s debt to fund balance ratio remained unchanged at 1.62 to 1.

Somerset County’s books received an unmodified opinion — the highest level of assurance that an independent audit firm can provide — and Mr. Geary praised the finance office and management for being prepared and having the accounts in order.

As for the use of federal funds, audit team leader Stephanie Chance reported there were no findings or questions. There was $8.9 spent which included $4.5 million for the new bridge on Bryan Hall Road and the hiker-biker trail next to Crisfield Highway along with $2.7 million in superstorm Sandy projects and $957,000 at the airport.

Prior to the end of the fiscal year the county received $2.235 million in COVID-19 relief funds of which just over $61,000 was spent by June 30 but by the time the audit was completed the remainder had been substantially spent. Likewise, nearly $114,000 was received in FY20 for restaurants and that fund was exhausted.

When it comes to post-employment benefits, if the county was to dissolve, its obligation to retired employees would be an estimated $22.9 million. Mr. Geary said that is an unfunded benefit and a liability that must be reported.

Great Hope Golf Course, the county’s only proprietary fund, reported operating revenue of $492,512 in FY20 but expenses were $1,086,615 for a net operating loss of $594,103 — a better performance than FY19 when the loss was $605,638.

When examined further, even with a temporary shutdown due to COVID-19 restrictions income was up 14.6% compared to the prior year with expenses rising less than 5%.

To cover the losses the county budgeted a transfer of nearly $500,000 but instead moved $460,000 from its general fund leaving the facility with a net loss of $137,829.

The loss in FY19 was $98,221.

Starting in FY22 Mr. Geary said how leases are accounted for will change, which will not affect the general fund, but result in a different way the information is presented.