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COUNTY OF ADAMS, PENNSYLVANIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2025

TABLE OF CONTENTS

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INTRODUCTORY SECTION Letter of Transmittal ..... 1 County of Adams Organizational Chart ..... 7 County of Adams Listed of Elected Officials ..... 8 Map of Adams County ..... 9 Certificate of Achievement for Excellence in Financial Reporting ..... 10 FINANCIAL SECTION Independent Auditor's Report ..... 11 Management's Discussion and Analysis ..... 15 Basic Financial Statements ..... 31 Statement of Net Position/(Deficit) ..... 32 Statement of Activities ..... 33 Balance Sheet – Governmental Funds ..... 34 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ..... 36 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds ..... 37 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ..... 38 Statement of Fund Net Position/(Deficit) – Proprietary Funds ..... 39 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ..... 40 Statement of Cash Flows- Proprietary Funds ..... 41 Statement of Fiduciary Net Position – Fiduciary Funds ..... 42 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ..... 43 Notes to Financial Statements ..... 44 Required Supplementary Information ..... 80 Schedules of Changes in the County's Net Pension Liability and Related Ratios – Last 10 Years ..... 81 Schedule of County Contributions – Last 10 Years ..... 82 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – General Fund ..... 83 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Children and Youth Fund ..... 84 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – 911 Fund ..... 85 Notes to Required Supplementary Information ..... 86

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COUNTY OF ADAMS, PENNSYLVANIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2025

TABLE OF CONTENTS (CONTINUED)

Page Other Supplementary Information ..... 88 Combining and Individual Fund Financial Statements and Schedules ..... 89 Combining Balance Sheet – Nonmajor Governmental Funds ..... 91 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) – Nonmajor Governmental Funds ..... 93 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Liquid Fuels ..... 95 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Hazardous Materials ..... 96 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Act 13 Bridge Improvements ..... 97 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Hotel Tax Fund ..... 98 Combining Statement of Fiduciary Net Position – Fiduciary Funds ..... 99 Combining Statement of Changes in Fiduciary Net Position – Fiduciary Funds ..... 101 Schedule of County Functions ..... 103 STATISTICAL SECTION ..... 104 Net Position by Component – Last Ten Years ..... 105 Changes in Net Position – Last Ten Years ..... 106 Governmental Activities Tax Revenues by Source – Last Ten Years ..... 108 Fund Balances of Governmental Funds – Last Ten Years ..... 109 Changes in Fund Balances of Governmental Funds – Last Ten Years ..... 110 General Governmental Expenditures by Function – Last Ten Years ..... 111 General Governmental Revenues by Source – Last Ten Years ..... 112 Governmental Funds Tax Revenues by Source – Last Ten Years ..... 113 Property Values – Last Ten Years ..... 114 Assessed and Estimated Actual Value of Taxable Property – Last Ten Years ..... 115 Real Estate Millage Rates – Direct and Overlapping Governments – Last Ten Years ..... 116 Property Tax Rates – Direct and Overlapping Governments – Last Ten Years ..... 117 Principal Property Taxpayers ..... 118 Real Estate Taxes Levied and Collected – Last Ten Years ..... 119 Ratio of Outstanding Debt by Type ..... 120 Ratio of Outstanding Debt to Assessed Value of Real Estate and General Obligation Debt Per Capita – Last Ten Years ..... 121 Direct and Overlapping Governmental Activities Debt ..... 122 Computation of Legal Debt Margin – Last Ten Years ..... 125

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COUNTY OF ADAMS, PENNSYLVANIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2025

TABLE OF CONTENTS (CONTINUED)

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Demographic and Economic Statistics – Last Ten Years.....127 Principal Employers – Current Year and Nine Years Ago.....128 Employees by Function/Program- Last Ten Years.....129 Operating Indicators by Function – Last Ten Years.....130 Capital Asset Statistics by Function – Last Ten Years.....132

ADAMS COUNTY CONTROLLER Tammy Myers, Controller 111 Baltimore St, Suite 3 tmyers@adamscountypa.gov 717-337-9805

June 29, 2026

To the Commissioners and Citizens of the County of Adams, Pennsylvania:

I am pleased to present the Annual Comprehensive Financial Report (Annual Report) of the County of Adams, Pennsylvania for the fiscal year ending December 31, 2025.

County Code requires the elected County Controller to prepare an annual financial report and audit of the County's books. This Annual Report is designed to present financial information and the County's overall financial condition to various users including creditors, investors, government officials and, most importantly, the general public.

This Annual Report was prepared by the office of the County Controller with assistance from County and Court offices. County Management assumes full responsibility for the completeness and reliability of the information contained in this report. County Management is responsible for establishing and maintaining internal controls designed to ensure that the assets of the County are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. The internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgements by management.

To the best of my knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the County in accordance with generally accepted accounting principles. The disclosures necessary to enable the reader to gain an understanding of the County's financial activities have been included.

The County's financial statements have been audited by the certified public accounting firm of Zelenkovske Axelrod LLC. The independent certified public accounting firm has issued an unmodified opinion on the County's financial statements as of and for the year ended December 31, 2025. The auditor's report is located at the beginning of the financial section of this report.

After the auditor's report you will find Management's Discussion and Analysis (MD&A). Generally Accepted Accounting Principles (GAAP) requires management to provide a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it.

Following the MD&A are the financial statements that will allow the reader to assess the finances of the County; determine how the County's financial condition has changed over the past year; understand the scope of the services provided to the citizenry; and understand the County's revenue sources. The notes required supplementary information, other supplementary information, and the statistical section that follows the basic financial statements all contain important information that explain and supplement those financial statements.

This Annual Report includes all funds of the County. The County provides its residents with a variety of services in areas such as 911 emergency operations, prison, courts, probation, domestic relations, bridge maintenance, planning and conservation, and human services which include children services and mental health and intellectual and developmental disabilities. In addition to general County activities, the Commissioners have financial accountability for the Adams County Conservation District and the Adams County Industrial Development Authority. Therefore, those blended component units are included in the Annual Report. The County Commissioners are also responsible for appointing the members of the boards of several other authorities and advisory boards, but the County's accountability for these organizations does not extend beyond the appointments and their finances are not included here. (See Note 1 to the financial statements.)

The independent audit of the basic financial statements of the County is part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing the Single Audit require the independent auditor to report on the County's internal controls and compliance with legal requirements, with special emphasis on those involving the administration of federal awards. These reports are available in the County's separately issued Single Audit Report.

PROFILE OF THE COUNTY

Introduction

The County of Adams is a fifth-class county created on January 22, 1800, from part of York County, and named in honor of President John Adams. The County, with a total of 522 square miles, is situated in the south-central part of the Commonwealth of Pennsylvania along the Mason-Dixon Line. Harrisburg, the state capital, is located 36 miles north of Gettysburg, the County seat. The outer suburbs of Washington, D.C. and Baltimore are within an hour's drive from many communities. Surrounding counties include Cumberland, Franklin and York in Pennsylvania, and Carroll and Frederick counties in Maryland.

The County's character is primarily residential and rural in nature. Gettysburg is surrounded by countryside rich in visual beauty and encompasses some of the East Coast's most productive agricultural areas. Agriculture generally and the fruit industry in particular have been an important part of Adams County since the mid-1800's. Adams County ranks first in the State for apple production, while Pennsylvania ranks fourth in the nation, behind Washington, Michigan, and New York.

The County is governed by a Board of Commissioners consisting of three members elected to four-year terms. The Commissioners are the responsible managers and administrators of the County's fiscal affairs. County Code provides for the elected Controller to act as a "check and balance" on County management and administrators by keeping the financial books, auditing, settling, and adjusting financial accounts, and reporting the County's financial results. The Treasurer is elected to receive and receipt all monies due or accruing to the County and to invest surplus funds. The Court of Common Pleas is part of the Unified Judicial System provided for by the Pennsylvania Constitution. Court related row offices include the Clerk of Courts, District Attorney, Prothonotary, Recorder of Deeds and Register of Wills, and Sheriff.

Local Economy

The most recent estimates indicate Adams County ranked 31st in the state with a population of 107,594 people. The median age of a county resident was 44 years (Source: 2024 data from the U.S. Department of Commerce, Bureau of Economic Analysis and United States Census).

The average unemployment rate in 2025 was 3.7% compared to the state's December 2025 unemployment rate of 4.4%. (Source: US Bureau of Labor Statistics). Manufacturing, Healthcare & Social Assistance, Accommodation & Food Services, and Retail are the County's top industries. Adams County's per capita personal income is 60,234, ranking it 23rd in the state and at 85.2 percent of the state average of 70,678 and 82.3 percent of the national average, 73.204. (Source: 2024 data from the U.S. Department of Commerce, Bureau of Economic Analysis)

Tourism

Adams County hosts approximately 3-3.5 million visitors annually from all over the world. Gettysburg is famous as a Civil War destination – specifically the Gettysburg battlefield and Abraham Lincoln’s Gettysburg Address, but greater Adams County offers a wide array of cultural sites, attractions, tours, events, and essential amenities such as lodging, dining, and shopping. With over 31,000 acres of State and Federal land, which include Michaux State Forest, Gettysburg National Military Park, and State Game Lands, Adams County is also a destination for those seeking outdoor recreation. The County’s beautiful rural landscape, containing over 14,000 acres of fruit orchards, is home to a flourishing fruit industry and its corresponding agritourism components.

In 2025, overnight visitation to Adams County remained robust, with overnight hotel occupancy matching 2024, at 56.1 percent occupancy. The destination experienced some travel related challenges in 2025, with international visitation to the U.S. down overall, especially from Canada, and with a record-long federal government shutdown at the end of the year. Most recent reports indicate, county lodging revenue remained strong at $66.8 million while generating roughly $3.1 million in local lodging tax revenue.

Based on the State of Pennsylvania’s most recent economic data for 2024, annual visitor spending levels exceeded $809 million, with direct tax revenue - at the local, state and federal levels - reaching $82.2 million. Visitor spending and taxes generated by visitors set new records in both 2023 and 2024. Meanwhile, the tourism industry supported a workforce of 5,101 employees with wages paid exceeding $178 million.

Key tourism highlights from 2025 include: the launching of the new Gettysburg Railway excursion train experience, bringing a scenic train experience to Adams County for the first time in over 15 years. Two new temporary trails were curated by Destination Gettysburg in 2025; the Adams County Sweet Stroll and the Merry Markets holiday shopping trail. Several attractions in Adams County earned major TripAdvisor Travelers' Choice Awards in 2025. The Gettysburg National Military Park, the Eisenhower National Historic Site, and the Gettysburg National Visitors Center were all voted among the top 10% of attractions worldwide.

With Adams County celebrating America's 250th Anniversary throughout 2026, visitation is expected to be strong as Gettysburg takes its place as one of the top historic destinations in the United States.

FINANCIAL MANAGEMENT AND BUDGET ADMINISTRATION

Fiscal stewardship continued to be a hallmark of County operations. The County’s commitment to transparent and high-quality financial practices is reflected in its long-term financial planning and budget. Throughout the year, commissioners and staff developed the 2026 budget amid rising operational costs, particularly in health care and mandated services, ultimately adopting a balanced plan with no tax increase by strategically leveraging reserves and applying multi-year funding strategies. The County’s Aa2 bond rating remained reaffirmed, supporting favorable borrowing rates for County and municipal projects.

Long-Term Financial Planning

The County first adopted a formal Fund Balance Policy in 2010 and adopted an updated Fund Balance Policy in 2021. The County recognizes the significance of maintaining an appropriate level of fund balance as one component of sound financial management. An adequate fund balance level is an essential element in both short-term and long-term financial planning, and serves to mitigate future risks, sustain operations during economic downturns, and enhance credit worthiness. The unassigned fund balance in the general fund was

68% of total general fund revenues on December 31, 2025. Through the maintenance of an adequate level of fund balance, the County can help stabilize funding for operations, stabilize taxes and fees, and realize cost savings.

In 2021, to assist with Long-term Planning, the Board of Commissioners adopted a Capital Improvement Plan Policy. This policy provides the framework and procedures for the development, approval, and publication of the Adams County ten-year plan for Capital Improvements. The CIP is a ten-year rolling plan identifying capital projects to be funded during the plan period.

Budget

The County of Adams is required to adopt an annual budget no later than December 31 of the previous year. Public meetings are conducted on the proposed budget and made available for 20 days prior to the final adoption. The Commissioners may at any time, by resolution, make supplemental appropriations for any lawful purpose. The County maintains budgeting control at the individual fund level. Unexpended appropriations lapse at year-end.

Budgets are legally adopted for the general fund and special revenue funds which include 911 Telecommunications, Children and Youth Services, and Hazardous Materials. The Hotel Tax Fund, Bridge Funds (Act 13 Bridge Improvements and Liquid Fuels) and Capital Budget are also budgeted and legally adopted.

MAJOR INITIATIVES

In 2025, Adams County advanced a broad portfolio of initiatives reflecting its commitment to fiscal responsibility, public service, infrastructure resilience, public safety, community well-being, and economic vitality. Entering the year with stable reserves and a strong Aa2 bond rating, the County continued applying prudent financial management practices while collaborating with departments, partner organizations, and community stakeholders to strengthen essential services and improve quality of life for residents.

Public Safety and Emergency Preparedness

The County began the year with a renewed focus on emergency preparedness and public safety. Efforts included restoration of the Live Incident Status webpage, implementation of additional NextGen911 enhancements, and expanded interoperability with the Pennsylvania State Police through a new talkgroup agreement and dedicated ringdown line to improve dispatch coordination. Emergency response capacity was further supported through ongoing upgrades to the County's 911 system and participation in the South Central PA Counter Terrorism Task Force, which secured more than $1 million in federal homeland security funding benefiting Adams County.

Significant progress also occurred within emergency services infrastructure. Adams Regional EMS advanced its plan for a new headquarters facility designed to improve operational efficiency and expand service coverage across approximately three-quarters of the County. Volunteer fire service development continued through the Cadet Fire Academy, which graduated approximately two dozen trainees. Memorial events honoring fallen officers and K-9 units highlighted the County's ongoing recognition of public safety personnel and their service.

Land Use, Conservation, and Environmental Stewardship

Adams County made notable advancements in land use planning, conservation, and environmental sustainability. New agricultural conservation easements were approved throughout the County, including several hundred-acre tracts in Conewago Township and surrounding municipalities, supporting long-term preservation of farmland and agricultural heritage. The County partnered with state agencies, nonprofit organizations, and private landowners on the Conewago Creek stabilization project, a multi-partner initiative to restore streambanks, enhance habitat, and improve public access. Additional efforts included supporting

the growth of the Land Conservancy of Adams County and participating in regional planning with the South Mountain Partnership.

Community Development and Housing Initiatives

Affordable and accessible housing remained a central focus in 2025. Allocations from the Affordable Housing Trust Fund supported both new senior housing development and ongoing community housing services. The County celebrated progress on municipal development projects, including the groundbreaking of the new Butler Township complex. WellSpan Health transferred residential properties to Habitat for Humanity for future affordable housing units, while the County continued to administer and promote the At Home Grant Program to assist municipalities and nonprofit organizations with housing and neighborhood revitalization efforts.

Community Engagement and Quality of Life

Public engagement, cultural programming, and recreation initiatives continued throughout 2025. Adams County supported projects such as the Pennsylvania AG Discovery Center, expanded tourism offerings including the Gettysburg Railroad excursions, and numerous local events celebrating the arts, history, agriculture, and outdoor recreation. The County also participated in major philanthropic initiatives, including the Adams County Community Foundation Giving Spree, which continued to set new participation and fundraising records.

Organizational Capacity and Technology Modernization

The County continued investing in organizational capacity, modernization, and staff development. Information Technology expanded municipal website support, upgraded equipment and cellular services to reduce costs, and implemented internal workflow improvements. Employees participated in leadership development programs through the National Association of Counties, and departments engaged in wellness, engagement, and recognition activities. Leadership transitions, including the retirement of the longtime Human Resources Director, were supported through effective internal succession planning.

Sustainability and Energy Initiatives

Environmental sustainability efforts advanced with completion of a major solar installation on the Human Services Building, generating enough renewable energy to meet building needs and return excess power to the grid when generation exceeded demand. The County also secured tax credit consulting services to maximize federal incentives and enhance the long-term financial benefits of the project.

Intergovernmental and Regional Collaboration

The County continued active involvement in regional, statewide, and national initiatives, including participation in the Chesapeake Bay Executive Council, America250PA planning, and legislative advocacy related to mental health funding, human services stability, and long-term 911 surcharge reform. These efforts reflect the County's commitment to shaping policy and securing resources that support essential services for residents.

Conclusion

Overall, 2025 was marked by steady progress, collaboration, and strategic investment. Adams County strengthened its financial position, enhanced public safety and emergency response, preserved agricultural lands, advanced infrastructure and sustainability projects, expanded services for residents, and supported community engagement across a broad range of sectors. These achievements demonstrate the County's dedication to responsible governance, strong partnerships, and the long-term well-being of its citizens.

AWARDS AND ACKNOWLEDGEMENTS

Distinguished Budget Presentation Award

The Government Finance Officers Association of the United States and Canada (GFOA) awarded its Distinguished Budget Presentation Award to the County of Adams for its annual budget document, prepared by the County Budget & Purchasing Office, for the fiscal year beginning January 1, 2025, marking its seventh consecutive year of recognition. To qualify for the Distinguished Budget Presentation Award, a governmental unit must publish a budget document that meets program criteria as a policy document, as a financial plan, as an operations guide, and as a commutations guide.

Certificate of Achievement for Excellence in Financial Reporting

GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of Adams for its Annual Comprehensive Financial Report for the fiscal year ended December 31, 2024. This is the eighth consecutive year that Adams County has achieved this prestigious award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized financial report to the community that satisfies both generally accepted accounting principles and applicable legal requirements.

The completion of this, the County's ninth Annual Report, was made possible by the dedicated services of the staff of the Controller's Office, the Office of Budget & Purchasing, and all County and Court departments.

Sincerely,

Tammy J Myers, Controller

Judicial

President Judge

Judges (Elected)

Court Administration Domestic Relations Law Library Magisterial District Judges (Elected) Operational Services Probation Services

COUNTY OF ADAMS, PENNSYLVANIA MAP OF ADAMS COUNTY

Government Finance Officers Association

Certificate of Achievement for Excellence in Financial Reporting

Presented to

Adams County Pennsylvania

For its Annual Comprehensive Financial Report For the Fiscal Year Ended

December 31, 2024

Executive Director/CEO

Zelenkofske Axelrod LLC CERTIFIED PUBLIC ACCOUNTANTS EXPERIENCE | EXPERTISE | ACCOUNTABILITY

INDEPENDENT AUDITOR'S REPORT

County Commissioners County of Adams Gettysburg, Pennsylvania Page 11

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the COUNTY OF ADAMS, as of and for the year ended December 31, 2025, and the related notes to the financial statements, which collectively comprise the COUNTY OF ADAMS' basic financial statements as listed in the table of contents.

In our opinion, based on our audit and the report of other auditors, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the COUNTY OF ADAMS, as of December 31, 2025, and the respective changes in financial position and, where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

We did not audit the blended component unit financial statements of the Adams County Industrial Development Authority, which represents 100 percent, 100 percent and 100 percent, respectively, of the assets, net position, and revenues of the business-type activities. We also did not audit the financial statements of the Adams County Conservation District, which represents 37.47 percent, 12.48 percent, and 7.99 percent, respectively, of the assets, net position, and revenues of the aggregate remaining fund information. These financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Adams County Industrial Development Authority and the Adams County Conservation District is based solely on the reports of the other auditors.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards (GAS), issued by the Comptroller General of the United States. The financial statements of the Adams County Industrial Development Authority were not audited in accordance with Government Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the COUNTY OF ADAMS and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

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

830 Sir Thomas Court, Suite 100, Harrisburg, PA 17109 3800 McKnight East Drive, Suite 3805, Pittsburgh, PA 15237 34745 Burbage Road, Frankford, DE 19945

2370 York Road, Suite A-5, Jamison, PA 18929 420 Chinquapin Round Road, Suite 2-i, Annapolis, MD 21401 210 Tollgate Hill Road, Greensburg, PA 15601

www.zallc.org

County Commissioners County of Adams Gettysburg, Pennsylvania Page 12

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the COUNTY OF ADAMS' ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and GAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and GAS, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the COUNTY OF ADAM's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the COUNTY OF ADAMS' ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Adoption of Governmental Accounting Standards Board Pronouncements

As discussed in Note 1 to the financial statements, in 2025 the COUNTY OF ADAMS adopted the required provisions of Governmental Accounting Standards Board ("GASB") Statement No. 102, "Certain Risk Disclosures". Our opinion is not modified with respect to these matters.

Zelenkofske Axelrod LLC CERTIFIED PUBLIC ACCOUNTANTS EXPERIENCE | EXPERTISE | ACCOUNTABILITY

County Commissioners County of Adams Gettysburg, Pennsylvania Page 13

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedule of changes in the net pension liability and related ratios, schedule of employer contributions, and budgetary comparison information on pages 17 through 32, 81, 82, and 83 through 87 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the COUNTY OF ADAMS' basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the schedule of County functions are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the schedule of County functions are the responsibility of management and were derived from and related directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion the combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the schedule of County functions are fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Information Included in the Annual Comprehensive Financial Report

Management is responsible for the other information in the annual comprehensive financial report. The other information comprises the introductory and statistical sections but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

County Commissioners County of Adams Gettysburg, Pennsylvania Page 14

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2026 on our consideration of the COUNTY OF ADAMS' internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the COUNTY OF ADAMS' internal control over financial reporting and compliance.

Harrisburg, Pennsylvania June 29, 2026

Zalehnoffshe Akaedrod LLC

ZELENKOFSKE AXELROD LLC

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

Page 15

The COUNTY OF ADAMS, hereafter referred to as the “County,” is pleased to present its financial statements developed in compliance with Statement of Governmental Accounting Standard No. 34, entitled “Basic Financial Statements – Management’s Discussion and Analysis – For State and Local Governments (hereafter “GASB 34”), and related standards. GASB 34 enhances information provided to the users of its financial statements. This section of the financial reporting package presents our discussion and analysis of the County’s financial performance during the year ending December 31, 2025. Please read it in conjunction with the County’s financial statements that follow this section.

Financial Highlights:

• Adams County's property tax rate increased 0.70 mills to 5.1393 mills.
• The County's general fund balance was $50.6 million with an unassigned portion of $44.8 million or 79% of the total general fund expenditures.
• The County’s governmental activities net position (assets, plus deferred outflows of resources less liabilities, less deferred inflows of resources) increased by $2.6 million in 2025.

The County had $56,380,000 of governmental activities general obligation debt outstanding as of December 31, 2025. The County's debt decreased due to the payment of the scheduled principal payments.

The County maintained its Moody's bond rating of Aa2.

OVERVIEW OF THE FINANCIAL STATEMENTS

This report consists of the following four parts:

• Management's discussion and analysis (this section)
• Basic financial statements (including notes)
• Required supplementary information

Other supplementary information

Management’s discussion and analysis is a guide to reading the financial statements and provides related information to help the reader to better understand the County’s government. The basic financial statements include notes that provide additional information essential to a full understanding of the financial data provided in the government-wide and fund financial statements. Required supplementary information provides the County’s budget to actual figures for the general fund and other budgeted major governmental funds, as well as information for the County’s pension and other postemployment benefit plans.

The basic financial statements present two different views of the County.

Government-wide financial statements, the first two statements, provide information about the County's overall financial status as well as the financial status of the County's component units.

Fund financial statements, the remaining statements, focus on individual parts of the County's government. They provide more detail on operations than the government-wide statements. There are three types of fund financial statements:

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

Page 16

Governmental funds statements show how general government services such as public safety, human services, public works, culture and recreation, and conservation and development are financed in the short term, as well as what remains for future spending.

Proprietary fund statements offer short-term and long-term financial information about the activities of the County that operate like a business.

Fiduciary funds statements reflect activities involving resources that are held by the County as a trustee or agent for the benefit of others. Fiduciary funds are not reflected in the government-wide statements because the resources cannot be used to support the County's programs or operations.

Table A-1: Organization of the County's Annual Comprehensive Financial Report

Required Components of the Annual Comprehensive Financial Report

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

Page 17

Table A-2 summarizes the major features of the County's financial statements, including the activities they cover and the types of information they contain.

Table A-2: Major features of the government-wide and fund financial statements

Government-wide Statements Fund Financial Statements

Scope Entire entity and component units (except fiduciary funds) Day-to-day operating activities of the County, such as public safety and courts Business activities of the County, such as the Adams County Industrial Development Authority Instances in which the County administers resources on behalf of others

Required Financial Statements Statement of net position Balance Sheet Statement of net position Statement of fiduciary net position

Accounting basis and measurement focus Accrual accounting and economic resources focus Modified accrual accounting and current financial resources measurement focus Accrual accounting and economic resources focus Accrual accounting and economic resources focus

Type of asset, deferred outflow of resources, liability, and deferred inflows of resources information All assets, deferred outflows of resources, liabilities, and deferred inflows of resources both financial and capital, short-term and long-term Current assets and liabilities that come due during the year or soon thereafter; no capital assets or long-term liabilities included All assets, deferred outflows of resources, liabilities, and deferred inflows of resources both financial and capital, short-term and long-term All assets and liabilities

Governmental Proprietary Fiduciary

Statement of activities Statement of revenues, expenditures, and changes in fund balance Statement of revenues, expenses, and changes in net position Statement of changes in fiduciary net position

Type of inflow and outflow information All revenues and expenses during year, regardless of when cash is received or paid Revenues for which cash is received during the year or soon thereafter; expenditures when goods or services have been received and the related liability is due and payable All revenues and expenses during the year; regardless of when cash is received or paid All additions and deductions during the year, regardless of when cash is received or paid

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

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The remainder of this overview explains the structure and contents of the government-wide and fund financial statements.

Government-wide financial statements

Government-wide financial statements report information about the County as a whole using accounting methods similar to those used by private-sector companies.

The statement of net position includes all the County's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, except fiduciary funds, with the difference reported as net position. This statement serves a purpose like that of the balance sheet of a private-sector business.

The statement of activities focuses on how the County's net position changed during the year. Because it separates program revenue (revenue generated by specific programs through charges for services, grants, and contributions) from general revenue (revenue provided by taxes and other sources not tied to a program), it shows to what extent each program has to rely on local taxes for funding. This statement serves a purpose like that of a cash flow statement of a private-sector business.

All changes to net position are reported using the accrual method of accounting, which requires that revenues be reported when they are earned and expenses be reported when the goods and/or services are received, regardless of when cash is received or paid.

Net position is one way to measure the County's financial position. Over time, increases or decreases in the County's net position are one indicator of whether the County's financial position is improving or deteriorating. However, other non-financial factors such as changes in the County's property tax base and general economic conditions must be considered to assess the overall position of the County.

The primary government and its component units are included in the government-wide financial statements. Component units reflect the activities of legally separate government entities over which the County can exercise influence and/or be obligated to provide financial support. The County has two blended component units, the Adams County Industrial Development Authority, and the Adams County Conservation District (See Note 1, Notes to the Financial Statements).

There are two categories of activities for the primary government:

Governmental activities include the County's basic services such as general government, judicial, public safety, public works, human services, culture and recreation, and conservation and development.

Business-type activities such as the Adams County Industrial Development Authority.

Net position of the governmental activities differs from the governmental fund balances because governmental fund level statements only report transactions using or providing current financial resources. Also, capital assets in the fund level statements are reported as expenditures when financial resources (money) are expended to purchase or build assets. Likewise, the financial resources that may have been borrowed are considered revenue when they are received. The principal and interest payments are both considered expenditures when paid. Depreciation is not calculated as it does not provide or reduce current financial resources. Finally, capital assets and long-term debt do not affect fund balances.

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Government-wide financial statements (continued)

Government-wide statements are reported using an economic resources measurement focus and full accrual basis of accounting that involves the following steps to format the statement of net position:

• Capitalize current outlays for capital assets
• Report long-term debt as a liability
• Depreciate capital assets and allocate the depreciation to the proper program/activities
• Calculate revenue and expense using the economic resources measurement focus and the accrual basis of accounting
• Allocate net position balances as follows:

○ Net Investment in capital assets

Restricted net positions are those with constraints placed on the use by external sources (creditors, grantors, contributors, or laws or regulations of governments) or imposed by law through constitutional provisions or enabling legislation

○ Unrestricted net position are assets that do not have any of the above restrictions

Fund Financial Statements

Fund financial statements provide more detailed information on the County's most significant funds, not the County as a whole. Funds are groups of related accounts that the County uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by state law. Other funds are established by the County to control and manage resources designated for specific purposes. Fund financial statements are reported using current financial resources and modified accrual accounting established by the Government Accounting Standards Board (GASB) for governments.

The County has three types of funds:

Governmental funds include most of the County's basic services and focus on: (1) the flow in and out of cash and other financial assets that can readily be converted into cash, and: (2) the balances left at year-end that are available for spending. These funds are reported using the modified accrual accounting basis, and a current financial resources measurement focus. Consequently, the governmental funds statements provide a detailed short-term view for the financial resources available in the near future to finance the County's programs.

The relationship between governmental activities (reported in the statement of net position and the statement of activities) and governmental funds is described in a reconciliation that follows the governmental fund financial statements.

The County adopts an annual budget for the general fund, as required by state law. A budgetary comparison of the County's general fund and other budgeted major governmental funds is presented as required supplementary information.

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Fund Financial Statements (Continued)

• Proprietary Funds report business-type programs and activities that charge fees designed to recover the cost of providing services. The proprietary funds report using full accrual accounting. The County maintains two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are those focused on providing County services to the public. Internal service funds are used to accumulate costs and properly allocate those costs internally among the County's various functions. The County uses an internal service fund to account for its Health Insurance program which is a self-insured model.
• Fiduciary Funds are funds for which the County is the trustee or fiduciary. These include certain agency funds or clearing accounts for assets held by the County in its role as custodian until the funds are allocated to the private parties, organizations, or government agencies to which they belong. The County is responsible to ensure the assets reported in these funds are used for their intended purposes. This fiduciary activity is reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. These funds are excluded from the County's government-wide financial statements because the County cannot use these assets to finance its operations.

GOVERNMENT-WIDE FINANCIAL STATEMENTS

Net Position

GASB No. 34 requires that all capital assets, including infrastructure, be valued, and reported within the governmental activities column of the government-wide financial statements. In 2007, the County fully adopted the provisions of GASB No. 34.

As of December 31, 2025, the County's total assets were $166,764,335, of which $72,797,394 represented capital assets. Assets and deferred outflow of resources exceeded liabilities and deferred inflows of resources by $89,884,492. Total governmental activities net capital assets decreased by $2.6 million as a result of depreciation on existing capital assets. Other assets increased by $5.4 million mainly due to an increase in the net pension asset as a result of a positive net change in the plan fiduciary net position.

Changes in the assumptions of the pension plan resulted in an increase in deferred inflows of resources of $2.3 million.

The County's current liabilities increased slightly in 2025 primarily due to a higher accounts payable liability in the general fund and the liquid fuels fund, along with a reduction in unearned revenues. Long term liabilities decreased $5.5 million due to scheduled principal payments and lease and subscription payments.

Of the County's net position, 9 percent represents net investment in capital assets net of any related debt outstanding used to acquire those assets. Thirty-nine percent of the County's net position is legally restricted ($35,549,784). The remaining balance of unrestricted net position ($46,589,088) may be used to meet the government's ongoing obligations to citizens and creditors.

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

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Net Position (continued)

The County's business-type activities had a ($375,729) net deficit. In 2025, the Adams County Industrial Authority (ACIDA) had an operating loss of $93,506, however, there was a positive change in net position of $34,720.

The following table presents a comparative view of the County's government-wide financial statements.

County of Adams Net Position

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

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Changes in Net Position

The table below summarizes the changes in net position for the County for the period ended December 31, 2025, and 2024.

County of Adams Changes in Net Position

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Governmental activities

The following chart illustrates the sources of revenues for governmental activities for the fiscal year ended December 31, 2025.

REVENUES BY SOURCE-GOVERNMENTAL ACTIVITIES

Taxes accounted for 62% of the County's total revenues. In 2025 tax revenue increased to $56,295,425. The millage rate rose to 5.1393 mills, and that increase combined with strong residential growth and broader real estate development throughout the County contributed to the upward trend in real estate taxes. In addition to real estate and per capita taxes, the County levies a 5% hotel lodging tax. By statute, proceeds from this tax are used to support the promotion, advertising, and marketing of tourism and special events through Destination Gettysburg, the designated visitor's bureau. For the year ending 2025, the hotel tax receipts increased slightly by 3% despite some travel-related challenges in 2025.

Operating Grants and Contributions, the County's second-largest source of revenue increased $1.7 million in 2025. Approximately $930,000 in state funding was delayed or not received in 2025 because of the budget impasse. Even so, federal funding helped drive the overall increase. The Community Development Block Grant projects were reimbursed in the amount of $1.3 million, and the Conservation District received grant funding through the Agriculture Conservation Assistance Program.

Charges for services represented 9% of total revenues in 2025. This category includes fees, fines, licenses, permits, and commissions on certain fees collected by County row offices on behalf of the Commonwealth of Pennsylvania. In 2025, these revenues decreased by 15%, due in part to the County receiving approximately $735,000 less in opioid settlement funds. Revenue also declined because of lower out-of-county and work release fees at the Correctional Complex, as well as reduced collections of the electronic monitoring fee and the offender supervision fee in Probation Services. In June 2025, Act 44 allowed individuals to be released from supervision early if they met specific criteria. As a result, some supervision terms ended early, and overpayments of offender supervision fees were refunded to defendants.

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The following chart illustrates the expenses by function for governmental activities for the fiscal year ended December 31, 2025.

EXPENSES BY FUNCTION-GOVERNMENTAL ACTIVITIES

In 2025, total expenses for governmental activities were $87.5 million, an increase of $10.5 million from prior year.

General Government expenses which support the administration of County government totaled $13.4 million and accounted for 15% of the total Governmental Activities expenses. This represented an increase of $2.7 million over 2024, driven by higher salaries and benefits as well as back payments for prior years to York/Adams Mental Health Intellectual Disabilities.

General Government-Judicial includes all departments under the direct control of the Courts including Court Administration, Operational Services, Magisterial District Justices, Probation, Domestic Relations, and Law Library along with other offices closely tied to the judicial process such as the Prothonotary, Clerk of Courts, District Attorney, Public Defender, Victim Witness, and Sheriff. Expenses in this category totaled $18.4 million, or 21% of the total governmental activities expenses. Open positions throughout the year contributed to expenditures remaining flat in 2025 as compared to 2024.

Public Safety which includes Emergency Services (911 Center), Adams County Adult Correctional Facility, Protective Inspections, Coroner, and Courthouse Security had expenses of $27.8 million, representing 32% of total governmental activities expenses. As the County's largest expense in 2025, Public Safety increased 4% over the previous year. Salary and benefits increased slightly, while depreciation of $4.4 million and related capital assets also contributed to the increase. These capital assets include new kitchen equipment and replacement RTU's at the Prison complex, a new HVAC unit and replacement RTU's at the 911 building, and a new X-ray scanner for Security.

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

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Governmental Activities-Expenses (continued)

Public Works includes the Liquid Fuels and Bridge Improvement programs that support the maintenance and improvement of the County's 42 bridges. Expenses in this area increased by 68% from the prior year. In 2025, the County continued working with the County Engineer inspecting the 42 county owned bridges and began making the necessary repairs.

Human Services expenses increased 8% in 2025, with total costs of $13.6 million. This category represents 16% of total governmental activities expenses. In addition to Children and Youth Services and Veteran's Affairs, it also includes county grants and federal grants. In 2025, Children and Youth Services saw a $1 million increase over prior year. Salaries and benefits, professional services, minor equipment, and client assistance were all contributing factors.

Conservation and Development includes the Conservation District, Penn State Cooperative Extension and the Community Block Grant Program administered by the Planning and Development office. Expenses totaled $7.5 million or 9% of total governmental activities. This represented an increase of 186% over prior year. The CDBG program reimbursed $1.2 million to project recipients, the County awarded Affordable Housing grants totaling $1 million, and the County purchased 11 easements totaling $756,000 more than prior year.

The remaining program expenses, $3.6 million or 4% of total expenses, were for Culture and Recreation. This category includes the Hotel Tax program, which distributes funds for local county grants, tourist promotion, and specific statutory, historical preservation, and economic development programs.

Interest on long-term debt totaled $2.1 million or 2% of total expenses. This represented a 6% decrease from 2024. In 2020, the County issued the General Obligation Bonds, Series 2020 A & B. As a result of the structuring of Series B, an advanced refunding of previous issues, the County was able to reduce interest paid on its long-term debt.

Business-Type Activities

In 2025, total revenues decreased $1.9 million for the County's business-type activities. In 2024 the Adams County Industrial Development Authority received $2 million from the Commonwealth of Pennsylvania Redevelopment Assistance Capital Program (RACP) that was passed through to ERY Properties, LLC for the development and construction of the 90-acre Berlin Junction Manufacturing Center near New Oxford, PA.

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Net Program Expenses

Net program expenses indicate the amount of support required from taxes and other general revenues for a program of the government. In 2025 property, hotel, and per capita taxes brought in $56,295,425.

The County depended on property taxes and other general revenues to support 66% of its governmental and business-type activities in 2025. Property taxes are based on 100% of the assessed value of real property, so changes in assessed valuations directly affect tax revenue.

For General Government Administrative functions, 79% of expenses were funded through property taxes and other general revenues, with the remaining share supported by grants, fines, and court costs. In General Government Judicial, 71% of expenses were funded by property taxes and other general revenues with the balance also coming from grants, fines, and court costs. In Public Safety, property taxes and other general revenues covered 80% of costs while the remainder coming from grants and charges for services.

Public Works expenses were primarily funded through Commonwealth Liquid Fuels tax revenues and reimbursements from PennDOT for bridge Improvements. Property taxes and general revenues covered 100% of the County's Debt Service payments and 98% of Culture and Recreation costs.

Property tax and other general revenues funded 30% of Human Services and 29% of the County's contribution to Conservation and Development.

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Funds Financial Analysis

As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds

Governmental funds are intended to provide information on near-term inflows, outflows, and balances of spendable resources. This information is useful in assessing the County's financing needs. In particular, spendable fund balance, both restricted and unrestricted, serves as a useful measure of the County's net resources available for spending at year-end.

The County’s governmental funds include the general fund, special revenue funds, and capital project funds. At the end of 2025, Adams County’s governmental funds reported combined ending fund balances of $68,263,115; an increase of $3,132,548 compared to the prior year. Approximately 66% of the total, or $44,714,016 represented unassigned fund balance available for spending at the County’s discretion. The remainder consisted of $766,603 in nonspendable fund balance, $5,000,000 in assigned fund balance, and $17,782,496 in restricted fund balance. These amounts were unavailable for discretionary future spending because they were either nonspendable, assigned by the County, or is legally restricted to bridge maintenance, farmland preservation, parks and green space, conservation and economic development, criminal investigation, Coroner VSIA, human services, public safety, and row office automation.

The general fund is the operating fund of the County. At the end of 2025, the general fund reported an unassigned fund balance of $44,833,541 and a total fund balance of $50,600,144. As a measure of the general fund's liquidity, it may be useful to compare both unrestricted fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 79% of total general fund expenditures while total fund balance represents 66% of that same amount. In 2025, the fund balance of Adams County's general fund increased by $5,237,132. Total revenues exceeded total expenditures by $8,783,733. The increase in revenues was primarily due to higher property tax collections. In 2025, the County increased its millage rate by 0.70 mills, from 4.4393 mills to 5.1393 mills. In addition, assessed property values increased by an average of approximately 4%, further contributing to the growth in property tax revenues.

The Opioid Settlement fund had an increase in fund balance of $443,513, bringing the fund balance to $2,270,949. In 2025, the County received $495,420 from the PA Opioid Misuse and Addiction Abatement Trust and an additional $23,601 from the McKinsey Subdivision Settlement. In 2022, the County was a Litigating Subdivision to national class-action lawsuits against certain manufacturers and distributors engaged in the improper manufacture, sale, and promotion of prescription opioid products. Settlement funds are exclusively used for opioid remediation measures.

Proprietary Funds

Adams County's proprietary funds provide the same type of information found in the business-type activities of the government-wide financial statements, but in greater detail.

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Capital Asset and Debt Administration

Capital Assets

The County's investment in capital assets on December 31, 2025, net of accumulated depreciation, was $72,776,223. Capital assets consist primarily of land, infrastructure, buildings and systems, lease buildings, subscription-based IT arrangements, agricultural easements, equipment and leased equipment. The following is a summary of capital assets on December 31, 2025:

Governmental Activities

Building and Improvements increased in 2025 as a result of capital projects at several County facilities. At the Correctional Complex, two roof top units for replaced. At the 911 building, two roof top units were replaced, and an HVAC unit was installed. In addition, the solar panel project at the Human Services building was completed.

Equipment and Vehicles also increased in 2025 due to replacement of kitchen equipment at the Correctional Complex, replacement of an X-ray machine for the Security department, and the County's annual computer bulk order. Agricultural Easements increased as well. Through the County's Agricultural Land Preservation Program, the County settled on 11 easements preserving a total of 1,337 acres.

In 2023, the County adopted GASB 96. This statement required the County to record “right-of-use” subscription assets on its financial statements. Subscription-based assets decreased in 2025 because of deductions related to assets that terminated or expired. At the same time, several IT subscription-based assets were added or renewed such as Varonis, Presidio and Cloudfare.

Under Business-Type Activities, the Adams County Industrial Authority reported total net capital assets of $21,171, a decrease of $10,162 from the prior year amount of $31,333. This capital asset is a real estate lease for office space between the ACIDA and the Adams County Economic Development Corporation.

Detailed information about the County's capital assets can be found in Note 5, Notes to the Financial Statements.

ADAMS COUNTY, PENNSYLVANIA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2025

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Debt Administration

As of December 31, 2025, the County had $56,665,715 of debt outstanding, excluding other long-term liabilities. This is a decrease of 8 percent from the previous year. The following is a summary of general obligation bonds and notes payable for the 2025 year, this includes the Adams County Industrial Authority, a blended component unit:

The current debt limitation for Adams County is $197,249,394, and the County's outstanding debt represents 29% of that limit.

The County adopted GASB 87 in 2022 and GASB 96 in 2023. These standards require the County to report liabilities on the Statement of Net Position for leases and subscription-based IT arrangements. On December 31, 2025, governmental activities included a lease liability of $8,958,994 and a subscription liability of $810,218. For business-type activities the lease liability was $36,848. The Adams County Industrial Development Authority began leasing office space from the Adams County Economic Development Corporation in February 2003.

Detailed information about the County's debt can be found in Note 10, Notes to the Financial Statements.

General Fund Budgetary Highlights

The Board of Commissioners reviews statements of operations and budget reports monthly and meets regularly with the Budget and Purchasing Department to receive updates and discuss forecasts. Department directors also review budget reports monthly and monitor revenues and expenditures throughout the year for variances. In general, budget modifications made during the year consist primarily of reclassifications between line items. No budget amendments were enacted in 2025.

The County budgeted tax revenue using a 96% collection rate. During 2025, actual collections came in slightly below the budgeted amount with $51.3 million in tax revenue received.

General Fund revenues exceeded budget and totaled $65.6 million. Tax revenue met budget expectations, although intergovernmental revenues were below budget. The Prison, Emergency Services, and Court Administration did not receive all state and federal funds that had been budgeted. Charges for Services were budgeted at $5.5 million and totaled $5.2 million. Within this category, the Prison was 14% under budget including Out-of-County fees, which were 15% under budget because the Prison housed fewer U.S. Marshal inmates than expected. Charges for Services in Central Processing were 21% under budget, as booking fee collections were lower than anticipated.

Several offices exceeded budget revenue expectations in 2025. The Register & Recorder surpassed budget due to increased filings of deeds, mortgages and subdivisions. The Prothonotary also exceeded budgeted County fee collections. Court costs and fines were slightly over budget, and licenses and permits were 7% over budget.

The Treasurer's office was 34% over budget because they collected more revenue from dog licenses and small games of chance. Gun permits were 6% under budget in the Sheriff's office, although more permits were issued than in prior year.

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General Fund Budgetary Highlights (continued)

Interest and Rents also produced a positive variance in 2025. The County's interest earnings were approximately $845,000 higher than budgeted. Although interest rates were generally lower in 2025, the County Finance Governance Committee worked actively with financial institutions to secure the best available rates.

Total General Fund expenditures in 2025 were 16% below the budgeted amount. This favorable variance was driven in part by a 15% reduction in salaries and benefits expenditures due to vacancies throughout the year. A significant decrease in professional services also contributed to the variance, largely because funds budgeted for broadband through the Adams Response and Recovery Funds were not spent. Lower spending on conferences and trainings across most departments further added to the positive variance. In addition the County budgeted $3.8 million for local county grants in the Adams Response and Recovery Fund but distributed only $1.2 million in 2025.

Transfers into the general fund was slightly above the budgeted amount, as the County transferred in approximately 3% more from the Domestic Relations Fund to reimburse the general fund for DRS expenses. Transfers out were slightly below budget. Although the Children and Youth Services Fund required a somewhat higher contribution than budgeted, the 911 Fund required a 24% less than budgeted contribution because the fund collected more public safety telephone fees than anticipated.

Economic Factors and Next Year's Budgets and Rates

The key economic factors affecting the County include the following:

• The County's real estate millage rate will remain at 5.1393 mills.
• The County's 2026 budget reflects a 0.92% decrease in revenues and a 6% increase in expenditures.
• Health Insurance costs increased significantly with a $1.5 million impact over 2025.

The total budget for 2026 is $98.5 million. The General Fund budget produced a deficit of approximately $4.9 million. Of that amount, approximately $5 million is attributable to ARRF projects that were not completed in 2025 and were therefore re-budgeted in 2026 as assigned fund balance. These special projects are identified as Community Grants, Broadband Project, and Agricultural Preservation Projects.

CONTACTING THE COUNTY'S FINANCIAL MANAGEMENT

This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview and disclosure of the County's finances. Questions concerning this financial information or requests for additional information should be directed to:

County of Adams

County of Adams Tammy Myers, Controller 111 Baltimore Street, Suite 3 Gettysburg, PA 17325 Phone: 717-337-9805 E-mail: tmyers@adamscountypa.gov

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BASIC FINANCIAL STATEMENTS

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF NET POSITION/(DEFICIT) DECEMBER 31, 2025

Primary Government

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2025

Functions/Programs Expenses Indirect Expenses Allocation Program Revenues Net (Expense) Revenue and Changes in Net Position

Charges for Services Operating Grants and Contributions Capital Grants and Contributions Primary Government Government Activities Business-type Activities Total

Primary government:

Governmental activities:

General Government - Admin $ 19,142,604 $ (5,690,318) $ 1,780,300 $ 995,696 - (10,676,290) $ (10,676,290)

General Government - Judicial 15,955,944 2,487,894 3,240,186 2,085,988 - (13,117,664) (13,117,664)

Public Safety 25,512,841 2,290,790 2,509,116 2,982,434 - (22,312,081) (22,312,081)

Public Works 816,282 9,830 - 635,522 - (190,590) (190,590)

Human Services 12,821,152 781,749 95,386 9,421,920 - (4,085,595) (4,085,595)

Culture and Recreation 3,666,138 - 7,666 70,133 - (3,588,339) (3,588,339)

Conservation and Development 7,441,945 120,055 456,918 4,899,959 - (2,205,123) (2,205,123)

Interest on Debt Service 2,148,933 - - - - (2,148,933) (2,148,933)

Total governmental activities 87,505,839 - 8,089,572 21,091,652 - (58,324,615) (58,324,615)

Business-type activity:

Economic Development 234,976 - 10,384 258,770 - - $ 34,178 34,178

Total business-type activities 234,976 - 10,384 258,770 - - 34,178 34,178

Total Primary government $ 87,740,815 $ - $ 8,099,956 $ 21,350,422 $ - (58,324,615) 34,178 (58,290,437)

General revenues:

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2025

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA BALANCE SHEET (CONTINUED) GOVERNMENTAL FUNDS DECEMBER 31, 2025

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION DECEMBER 31, 2025

68,263,115

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2025

The accompanying notes are in integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2025

Change in fund balances (deficit) - total governmental funds $ 3,132,548

The change in net position reported for governmental activities in the statement of activities is different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation expense ($6,998,417) and loss on sale ($8,475) exceeded capital outlay ($4,397,391) and gain on sale of . (2,609,501)

Debt proceeds are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds but reduces the liability in the statement of net position.

Issuance of Financing Leases (204,871)

Issuance of Subscription Financing Agreements (296,653)

Payment of principal - financing leases 530,600

Payment of principal - subscription financing agreements 695,390

Payment of principal - long term debt 4,697,143

5,421,609

Under the modified accrual basis of accounting used in governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition interest on long-term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. This adjustment combines the net changes of the balances.

Compensated absences (109,987)

Accrued interest on bonds 26,745

Deferred Loss on Refunding (381,487)

Pension Expense 695,211

Bond Discount (4,223)

Bond Premium 151,996

Combined Adjustment: 378,255

Change in the net position of the Internal Service Fund is included in governmental activities since it primarily benefits the County's governmental activities (3,508,548)

Under the modified accrual basis of accounting used in governmental funds, revenues are not reported until they become available. In the statement of activities, however, revenues are recorded regardless of when financial resources are available. This is the change in unearned real estate tax revenue and opioid litigation revenue from 12/31/24 to 12/31/25. (212,185)

Change in net position of governmental activities $ 2,602,178

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF FUND NET POSITION/(DEFICIT) PROPRIETARY FUNDS DECEMBER 31, 2025

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2025

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2025

The accompanying notes are an integral part of the financial statements

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS DECEMBER 31, 2025

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

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COUNTY OF ADAMS, PENNSYLVANIA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2025

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

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The County of Adams (the "County") is a fifth Class County that was formed on January 22, 1800. The County operates under the direction of an elected Board of Commissioners and provides the following services: general administrative services, tax assessment and collections, judicial, public improvements, public safety, conservation, and human services. The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) applicable to governmental units, as prescribed by the Governmental Accounting Standards Board (GASB).

A summary of the County's significant accounting policies consistently applied in the preparation of the accompanying financial statements is as follows:

A) Reporting Entity

The County follows the criteria promulgated by the Governmental Accounting Standards Board (“GASB”) Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, for purposes of determining the scope of its reporting entity. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of the County of Adams (the Primary Government) and its Component Units.

Blended Component Units

In conformity with accounting principles generally accepted in the United States of America, the financial statements of the Component Units discussed below have been included in the financial reporting entity as Blended Component Units.

Adams County Industrial Development Authority ("the Authority"):

The Authority was incorporated on September 8, 1998 under the provisions of the Economic Development Financing Law Act of 1967 as amended in 1993. The Authority exists under the constitution and laws of the County of Adams and the Commonwealth of Pennsylvania. The Authority is organized for the purpose of acquiring, holding, constructing, improving, maintaining, owning, financing, and leasing either in the capacity of Lessor or Lessee, projects.

The Authority is included in the financial reporting entity because (1) the County appoints a voting majority of the governing board, (2) the County can impose its will on the Authority by significantly influencing program, projects, activities, and level of service performed by the Authority, and (3) the Authority’s debt is currently being repaid with the County’s resources.

The Authority’s operates on a calendar year ending December 31. A separate financial statement of the Authority can be obtained by contacting the Adams County Commissioner’s Office.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

• A)A) Reporting Entity (Continued)

Blended Component Units (Continued)

Adams County Conservation District ("the District"):

The District was formed on November 14, 1947 under Pennsylvania Act 217. The mission of the District is to promote voluntary conservation and good stewardship of Adams County's natural resources. The District's vision is to be recognized, respected, and trusted as the conservation leader of Adams County, enabling the people to sustain, use, and conserve natural resources through the 21st century, thus maintaining a balance and harmony between a profitable agricultural economy and other land uses for a quality of life that everyone can enjoy.

The District is included in the financial reporting entity because (1) the County appoints a voting majority of the governing board, (2) the County can impose its will on the District by significantly influencing program, projects, activities, and level of service performed by the District, and (3) the District provides services almost entirely for the benefit of the County. In addition, the District's employees are considered employees of the County.

The District operates on a calendar year ending December 31. A separate financial statement of the District can be obtained by contacting the Adams County Commissioner's Office.

B) Related Organizations

The Board of County Commissioners is also responsible for appointing the members of the governing boards of other organizations, but the County's accountability for these organizations does not extend beyond making appointments. The County does not designate management nor does it have the ability to significantly influence the operations of these entities. In addition, the County has no responsibility for fiscal matters for these entities (i.e., not responsible for deficits or entitled to surpluses, no guarantees of debt, etc.). These organizations include:

Adams County Office for Aging

Destination Gettysburg

Adams County Economic Development Corp.

Adams County Historical Society

Adams County Library System

Adams County Extension Association

Adams County Housing Authority

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

• C)C) Joint Ventures

The County is a participant with York County in joint ventures that provide services to the constituents of all the participants. The County has no interest in the equity of these organizations and therefore these entities are not included in its financial reporting entity (condensed financial information relative to these entities is included in the notes herein):

The above joint ventures are included in York County's Annual Comprehensive Financial Report and are available for inspection in the York County Controller's Office, Administrative Center, 28 East Market Street, York, Pennsylvania 17401.

D) Government-Wide and Fund Financial Statements

The Government-wide financial statements (i.e., statement of net position, and the statement of activities) report information on all the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements except for certain interfund services provided and used between functions. 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.

The Statement of Activities demonstrates the degree to which direct expenses of a given function or segment is affected 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

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D) Government-Wide and Fund Financial Statements (Continued)

segment. Taxes and other items, not included among program revenues, are reported instead as general revenues. 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 individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

E) Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flow. 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.

Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers revenues, to be available if they are collected within 365 days of the end of the current fiscal period with the exception of property taxes which must be received within 60 days of year end to be deemed available. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Licenses, operating grants, capital grants 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. All other revenue items are considered to be measurable only when the cash is received by the County.

Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of “available spendable resources”. Governmental funds operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during the period.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Because of their spending measurement focus, expenditure recognition for governmental fund types exclude amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

The County reports the following major governmental funds:

The General Fund is the primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Revenues of this fund are primarily derived from real estate taxes, state and federal grants, and fees for services. Many of the basic activities of the County are accounted for in this fund, including operation of general County government, boards, commissions, the court system and health and welfare services.

The Children and Youth Fund is used to account for specific revenue sources related to the provisions of Children and Youth services that are restricted to expenditures for those specified purposes. Revenues in this fund are primarily derived from state and federal grants.

• The 911 Fund is used to account for specific revenue sources related to the provisions of the 911 program that are restricted to emergency response communications expenditures of the County. Revenues in this fund are primarily derived from state funding that represent wireless and wireline surcharges.
• The Opioid Settlement Fund is used to account for specific litigation proceeds that will be remitted to the County from the Commonwealth of Pennsylvania restricted for expenditures defined in the settlement agreement.
• The County’s enterprise funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities.

Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liabilities, rather than an expense.

The County reports the following major proprietary fund:

• The Adams County Industrial Development Authority is organized for the purpose of acquiring, holding, constructing, improving, maintaining, owning, financing and leasing either in the capacity of lessor or lessee, projects.

Additionally, the County reports the following fund types:

Internal Service Fund is used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the County, or to other governments, on a cost reimbursement basis. The Internal Service Fund accounts for the cost of health benefits provided to employees of the County.

- Fiduciary funds, consisting of the County’s custodial funds, are used to account for assets held by the County in a trustee capacity or as an agent for individuals, private organizations or other governments. Custodial funds account for cash collected by elected row officers (and other County offices) which is subsequently disbursed to the County, individuals, private organizations and other governments for whom it was collected. The fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting.

When both restricted and unrestricted resources are available for use, it is the County's policy to use restricted resources first, then unrestricted resources as they are needed for their intended purposes.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F) Assets, Liabilities, and Net Position or Fund Balances

1. Cash and Cash Equivalents

For purposes of the accompanying statement of cash flows, the County considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

2. Interfund Receivables and Payables

Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances."

3. Investments

Investments for the County are reported at fair value. Investments that do not have an established fair value are reported at estimated values.

4. Restricted Assets

Restricted Assets represent revenues set-aside for the liquidation of specific obligations, as detailed in Note 3.

5. Deferred Inflows/Outflows

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net asset that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Under the accrual basis of accounting, the government will state the net position reports a deferred loss on refunding, the difference between expected and actual experience for pensions, changes in assumptions for pensions, and contributions subsequent to the measurement date related to pensions as a deferred outflow of resources.

Lease-related amounts are recognized at the inception of the lease. The deferred inflow of resources is recorded in amount equal to the corresponding lease receivable plus certain additional amounts received from the lessee at or before commencement of the lease term that relate to future periods, less any incentives paid to, or on behalf of the lessee at or before commencement of the lease term. The inflow of resources is recognized in a systematic and rational manner over the term of the lease.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F) Assets, Liabilities, and Net Position or Fund Balances (Continued)

5. Deferred Inflows/Outflows (Continued)

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Under the modified accrual basis of accounting, the governmental funds report unavailable revenue from property taxes, opioid settlement revenue, unavailable grant revenue, and leases as deferred inflows of resources. Under the accrual basis of accounting, the government will state the total amount of net position reports the difference between expected and actual experience for pensions and leases as deferred inflows of resources.

6. Capital Assets

Capital assets, which include property, plant and equipment and infrastructure assets (e.g. bridges), are reported in the applicable governmental or business-type activity columns in the government-wide financial statements and in the proprietary fund financial statements. Capital assets with initial, individual costs that equal or exceed $5,000 and have estimated useful lives of over one year are recorded as capital assets.

Capital assets are recorded at historical costs (except for intangible right-to-use lease assets, the measurement is discussed in Note F17 below) or estimated historical costs if purchased or constructed. Donated capital assets are recorded at acquisition cost.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.

Major outlay of capital assets and improvements are capitalized as projects are completed. Interest incurred during the construction phase of the capital asset of business-type activities is included as part of the capitalized value of the assets constructed.

Capital assets of the County are depreciated using the straight line method over the following intended useful lives:

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NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F) Assets, Liabilities, and Net Position or Fund Balances (Continued)

7. Allowance for Doubtful Accounts

Taxes and loan receivables have been reported net of allowance for doubtful accounts. The County recorded an allowance for uncollectible taxes of $1,307,807 and an allowance for uncollectible loan receivables of $188,365 as of December 31, 2025.

8. Compensated Absences

The County permits employees to accumulate a limited amount of earned, but unused vacation leave. These benefits are payable upon separation of services. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. The computed liability is in compliance with GASB 101, "Compensated Absences".

9. Prepaid Costs

Prepaid items are recorded as an expenditure/expense in the fund level and government-wide financial statements when consumed.

10. Long-Term Obligations

In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of applicable bond premiums or discounts. Deferred loss on refundings are reported as deferred outflows of resources and amortized over the shorter term of the new or old debt.

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.

11. Unearned Revenues

Revenues that are received but not earned are recorded as unearned revenues in the County's financial statements. In the County's governmental funds, unearned revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenues also arise when resources are received by the government before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the County has a legal claim to the resources, the liability for unearned revenue is removed from the governmental funds' balance sheet and revenue is recognized.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F) Assets, Liabilities, and Net Position or Fund Balances (Continued)

12. Interfund Transactions

Quasi and external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that are reimbursed. All other interfund transactions except quasi-external transactions and reimbursements are reported as transfers.

13. Fund Balances

The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to the County is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows:

• Nonspendable fund balance – This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact.
• Restricted fund balance – This classification includes amounts for which constraints have been placed on the use of the resources either
• (a)externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or
• (b)imposed by law through constitutional provisions or enabling legislation.
• Committed fund balance – This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Commissioners. These amounts cannot be used for any other purpose unless the Members of the Board remove or change the specified use by taking the same type of action (resolution) that was employed when the funds were initially committed.
• Assigned fund balance – This classification includes amounts that are constrained by the County’s intent to be used for a specific purpose but are neither restricted nor committed. The Board of Commissioners delegated this responsibility to the County Manager.
• Unassigned fund balance – This classification represents amounts that are available for any purpose. The General Fund is the only fund that reports a positive unassigned fund balance.

In circumstances where an expenditure is to be made for a purpose for which amounts are available in multiple fund balance classifications, the order in which resources will be expended is as follows: restricted fund balance, followed by committed fund balance, assigned fund balance and lastly unassigned fund balance.

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NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F) Assets, Liabilities, and Net Position or Fund Balances (Continued)

14. Net Position

The government-wide and business-type activities fund financial statements utilize a net position presentation. Net Position is categorized as net investment in capital assets, restricted and unrestricted.

- Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.

Unrestricted Net Position – This category represents net position of the County, not restricted for any project or other purpose.

Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted net position to have been depleted before unrestricted net position is applied.

15. Pensions

For purposes of measuring the net pension liability/(asset), deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Pennsylvania Municipal Retirement System (PMRS) and additions to/deductions from PMRS's fiduciary net position have been determined on the same basis as they are reported by PMRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

16. Accounting Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F) Assets, Liabilities, and Net Position or Fund Balances (Continued)

17. Leases/Subscription Liability

The County is a lessee for a noncancellable leases of equipment and finance of software contracts. The County recognizes a lease liability/subscription liability and an intangible right-to-use lease asset (lease asset)/subscription asset in the government-wide financial statements. The County recognizes lease/subscription liabilities with an initial, individual value of $5,000 or more.

At the commencement of a lease/subscription agreement, the County initially measures the lease/subscription liability at the present value of payments expected to be made during the lease term. Subsequently, the lease/subscription liability is reduced by the principal portion of lease/software agreement payments made. The lease/subscription asset is initially measured at the initial amount of the lease/subscription liability, adjusted for lease/software payments made at or before the commencement date, plus certain initial direct costs. Subsequently, the lease/subscription asset is amortized on a straight-line basis over its useful life.

3. Key estimates and judgements related to leases include how the County determines (1) the discount rate it uses to discount the expected lease/software agreement payments to present value, (2) lease/software agreement term(s), and (3) lease/software agreement payments.

The County uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the County generally uses its estimated incremental borrowing rate as the discount rate for leases/software agreements.

- The lease/software agreement term includes the noncancellable period of the lease/software agreement. Lease/subscription payments included in the measurement of the lease/subscription liability are composed of fixed payments and purchase option price that the County is reasonably certain to exercise.

The County monitors changes in circumstance that would require a remeasurement of its lease/software agreement and will remeasure the lease/subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the lease/subscription liability.

Lease/subscription assets are reported with other capital assets and lease/subscription liabilities are reported with long-term debt on the statement of net position.

G) Adoption of Governmental Accounting Standards Board Statements

The County adopted the provisions of GASB Statement No. 102, “Certain Risk Disclosures”. The adoption of this statement had no effect on previously reported amounts.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 1: NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Pending Changes in Accounting Principles

In April 2024, the GASB issued Statement No. 103, “Financial Reporting Model Improvements”. The County is required to adopt the provisions of Statement No. 103 for its fiscal year 2026 financial statements.

In September 2024, the GASB issued Statement No. 104, “Disclosure of Certain Capital Assets.” The County is required to adopt this statement for its calendar year 2026 financial statements.

In December 2025, the GASB issued Statement No. 105, “Subsequent Events.” The County is required to adopt this statement for its calendar year 2027 financial statements.

The County has not yet completed the various analysis required to estimate the financial statement impact of these new pronouncements.

NOTE 2: DEPOSIT AND INVESTMENT RISK

The County's investments at December 31, 2025 were as follows:

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NOTE 2: DEPOSIT AND INVESTMENT RISK (CONTINUED)

As of December 31, 2025, the County had the following debt investments and maturities within its excess operating fund accounts:

Investment Maturities (in Years)

Investment Type Fair Value Investment Maturities (in Years)

Less Than 1 1-5 6-10 More Than 10

Fixed Income Mutual Funds $ 215,679 $ - $ 215,679 $ - $ -

Commercial Paper 31,279 31,279 - - -

Total $ 246,958 $ 31,279 $ 215,679 $ - $ -

Interest Rate Risk: The County's investment policy does not limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Credit Risk: The County’s investment policy limits investments to direct obligations of the United States Government or its agencies; local agency demand deposits, certificates of deposit; Ginnie Mae, Fannie Mae, Freddie Mac, and obligations secured by these agencies; mutual funds; corporate bonds rated A or higher by Standard & Poor's or Moody's; commercial paper which is eligible for purchase by the discount window of the Federal Reserve Bank and has a rating of A-1 by Moody's or P-1 by Standard & Poor's; bankers acceptances which are eligible for purchase by the discount window of the Federal Reserve Bank; repurchase agreements having a maturity of less than 30 days; and passbook savings account demand deposits and money market accounts. The County's investments in fixed income mutual funds as of December 31, 2025 were rated AA.

Custodial Credit Risk: For deposits and investments, 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. At December 31, 2025, $23,139,256 of the County's bank deposits of $64,101,757 were exposed to custodial credit risk, as they are collateralized with securities held by the pledging financial institution and uninsured. The County does not have a written policy to limit its exposure to custodial credit risk.

At December 31, 2024, the County had investments classified as cash equivalents in money market holdings and agencies through, Pennsylvania Local Government Investment Trust (“PLIGIT”) of $35,697,237 and through PA INVEST in the amount of $2,574,473.

The Pennsylvania Local Government Investment Trust (PLIGIT) I-Class is a 2a7-like pool. The County's investment in PLIGIT is reported at amortized cost, which approximates fair value. The County has no regulatory oversight for the pool, which is governed by the Board of Trustees and is administered by PFM Asset Management, LLC. The pool is audited annually by Ernst & Young, LLP. The pool is rated AAA by Standard & Poor's. PLIGIT issues separate financial statements available at www.plgit.com.

The PA INVEST program is a family of high rated investment pools. The County's investment in PA INVEST is reported at amortized cost, which approximates fair value. The County has no regulatory oversight over the pool, which is governed by the Board of Trustees and administered by the PA Department of Treasury. The pool is rated AAA by Standard and Poors. Annual reports are issued and available at www.patreasur.gov.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 2: DEPOSIT AND INVESTMENT RISK (CONTINUED)

Restrictions on Qualified Investment Pool Withdrawals. There are no restrictions on the number of withdrawals per calendar month from the PLIGIT and INVEST accounts.

Concentration of Credit Risk: The County has no formal policy for investments pertaining to concentration of credit risk. At December 31, 2025, the County was not exposed to concentration of credit risk.

Fair Value

Generally accepted accounting principles define fair value, describe a framework for measuring fair value, and require disclosure about fair value measurements. Recurring fair value measurements are those that GASB Statements require or permit at the end of each reporting period. The established framework includes a three-level hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quote prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets or liabilities fall within different levels of the hierarchy, the classification is based on the lowest level input that is significant to the fair value measurement of the asset or liability. Classification of assets and liabilities within the hierarchy considers the markets in which the assets and liabilities are traded and reliability and transparency of the assumptions used to determine fair value. The hierarchy requires the use of observable market data when available. The levels of the hierarchy and those investments included in each are as follows:

Level 1 – Represented by quoted prices available in an active market.

Level 2 – Represented by assets and liabilities similar to Level 1 where quoted prices are not available, but are observable, either directly or indirectly through corroboration with observable market data, such as quoted prices for similar securities and quoted prices in inactive markets and estimated using pricing models or discounted cash flows.

Level 3 – Represented by financial instruments where there is limited activity or nonobservable market prices and pricing models significant to determining the fair value measurement include the reporting entity's own assumptions about the market risk.

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 2: DEPOSIT AND INVESTMENT RISK (CONTINUED)

Mutual Funds

Mutual funds listed on a national market or exchange are valued at the last sales price, or if there is no sale and the market is still considered active, at the mean of the last bid and ask prices on such exchange. The County's interests in mutual funds are categorized by type as fixed income or equity. Such securities are classified within Level 1 of the valuation hierarchy.

The County has mutual funds that have recurring fair value measurements as of December 31, 2025. All mutual funds of $574,505 are valued using quoted market prices (Level 1 inputs).

Government Sponsored Enterprises

Government sponsored enterprises are generally valued at the most recent price of the equivalent quotes yield for such securities, or those of comparable maturity, quality, and type. Such investments are classified as Level 2 of the valuation hierarchy, totaling $29,840.

Commercial Paper

Commercial paper consists of various corporations. These investments are generally valued at the most recent price of the equivalent yield quotes for such securities, or those of comparable maturity, quality, and type. Such investments are generally classified as Level 2 of the valuation hierarchy, totaling $31,279.

NOTE 3: RESTRICTED ASSETS

Assets whose use is limited to a specific purpose has been classified as restricted in the governmental funds balance sheet and the statement of net position. Restricted assets are comprised of the following:

2020 Capital Projects Fund Cash Restricted for Construction $ 545,477

Total Restricted Assets $ 545,477

NOTE 4: REAL ESTATE TAXES

Real estate taxes attach as an enforceable lien on property on January 1. Taxes are billed on or about March 1, payable under the following terms: 2% discount, March 1 through April 30; face amount, May 1 through June 30, and 10% penalty after June 30. The County bills these taxes which are collected by elected local tax collectors. The County collects delinquent real estate taxes on behalf of itself and other taxing authorities. Real estate taxes levied for 2025 are recorded as receivables, net of estimated uncollectibles. Net receivables estimated to be collectible subsequent to March 1 are recorded as a deferred inflow of resources – unavailable revenue property taxes in the Governmental Funds Balance Sheet. Prior years' levies are recorded using these same principles, and remaining receivables are annually reevaluated as to collectability. The rate of taxation in 2025 was 5.1393 mills for general purposes.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 5: CAPITAL ASSETS

Capital asset activity for the year ended December 31, 2025 was as follows:

Depreciation expense was charged to functions/programs of the primary government as follows:

Total Depreciation Expense – Governmental Activities $6,998,417

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 6: LAND HELD FOR RESALE

Land held for resale is stated at the lower of net realizable value or original purchase price plus capitalized interest, if applicable, and development cost. At December 31, 2025, the balance of “land held for resale” was $320,306.

NOTE 7: DEFINED BENEFIT PENSION PLAN

A. General Information about the Pension Plan

Plan Description. The County, through a January 2021 agreement, provides employee pension benefits through participation in the Pennsylvania Municipal Retirement System (PMRS). The PMRS was created by the Pennsylvania General Assembly in 1974 with the passage of the Pennsylvania Municipal Retirement Law 1974, P.L. 34, No. 15. PMRS administers pension plans on a contracted basis for any municipality or institution supported and maintained by a Pennsylvania municipality. This agent multiple-employer public employee retirement system maintains each municipality's account separately with that municipality's contributions and related employee contributions, and earnings segregated into separate accounts. PMRS issues a separate Annual Comprehensive Financial Report, which can be obtained by contacting the PMRS accounting office at P.O. Box 1165, Harrisburg, PA 17108-1165.

Benefits Provided. Benefit terms were established under the June 2010 agreement between PMRS and the County, changes to benefit terms can only occur by modification of this agreement. Major provisions of the 2021 agreement include the following:

All full-time County employees are required to participate in the System. Benefits vest after five years of service. Employees can retire with an annual retirement benefit after 20 years of service provided age 55 has been attained, or at age 60.

The normal form of payment of retirement benefits is a monthly annuity available for the life of the retired employee. For members hired on or after July 1, 2010 an annuity comprised of the following applicable annuities:

• A municipal annuity equal to one percent of the member's final salary multiplied by all years of credited service.
• A member’s annuity equal to a single life annuity starting on the effective date of retirement with a present value equal to the accumulated member contributions, regular interest on the member contributions, and any excess interest that may be credited to the member’s account.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 7: DEFINED BENEFIT PENSION PLAN (CONTINUED)

A. General Information about the Pension Plan (Continued)

For members hired prior to July 1, 2010, an annuity comprised of the following applicable annuities:

• A current service municipal annuity equal to one and twenty five hundredths percent (1.25%) of the member's final salary multiplied by all years of credited service rendered by the member subsequent to January 1, 2005.
• A prior service municipal annuity equal to one percent (1.0%) of the member's final salary multiplied by all years of credited service rendered by the member between January 1, 2005 and January 1, 1975.
• An additional prior service municipal annuity equal to four tenths percent (0.4%) of the annual average compensation earned during the five years immediately preceding January 1, 1975 or, if not so long employed, then the average annual compensation earned and paid during the whole period of such employment times all years of credited service rendered by the member between January 1, 1975 and January 1, 1963.
• An additional prior service municipal annuity equal to four tenths percent (0.4%) of the annual average compensation earned during the year prior to January 1, 1963 or, if not so long employed, then the average annual compensation earned and paid during the whole period of such employment times all years of credited service rendered by the member between January 1, 1953 and January 1, 1963.
• A member’s annuity equal to a single life annuity starting on the effective date of retirement with a present value equal to the accumulated member contributions, regular interest on the member contributions, and any excess interest that may be credited to the member’s account.

Supplemental benefits are derived from employee contributions and interest earnings of the fund. A retiree may elect to receive a reduced amount of benefit and provide a death benefit in the form of annuity or lump sum to the designated beneficiary. The plan also provides death and disability benefits for an active employee.

The Plan did not include an assumption for projected ad hoc postemployment benefit changes as they are not considered to be substantively automatic.

Administrative costs, including the investment manager, custodial trustee, and actuarial services are charged to the plan and funded through investment earnings.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 7: DEFINED BENEFIT PENSION PLAN (CONTINUED)

A. General Information about the Pension Plan (Continued)

Employees Covered by Benefit Terms. At January 1, 2024, the following employees were covered by the benefit terms:

Inactive plan members or beneficiaries currently receiving benefits 309

Inactive plan members entitled to but not yet receiving benefits 125

Active plan members 488

922

Contributions. Required contributions to the plan are governed by the 2021 agreement. The PMRS Board will actuarially determine the normal cost of the benefits provided under the contract (2021 agreement) and any liability associated with the actuarial experience of such benefits which shall be contributed annually by the County. Members shall contribute six percent of their compensation to fund the annuity. Members shall also have the option to contribute an additional percentage to fund the optional contribution annuity. The total of the mandatory and optional contributions shall not exceed sixteen percent (16%) of the member's compensation. Optional contributions shall be based on whole percentages and may only be changed or stopped one time per calendar year with written notification to the System.

Payment shall be made by payroll deductions and transmitted to the System by the County in accordance with established System procedures. For the year ended December 31, 2025, the average active employee contribution rate was 6.0% of annual pay, and the County's average contribution rate was 7.36% of covered annual payroll.

B. Net Pension Liability/(Asset)

The County’s net pension liability was measured as of December 31, 2024, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2024 with update procedures performed to roll forward the liabilities to December 31, 2024.

Actuarial assumptions. The total pension liability was measured as of December 31, 2024 and was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Mortality rates Pre-Retirement were based on the PUB-2010 Male General Employees male table and the PUB-2010 Female General Employees female table. Mortality rates Post-Retirement were based on the RP-2006 Male annuitant male table and RP-2006 Female annuitant female table.

The discount rate was changed from 5.25% to 5.50% for the 2024 measurement period.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 7: DEFINED BENEFIT PENSION PLAN (CONTINUED)

B. Net Pension Liability/(Asset) (Continued)

The actuarial assumptions used in the December 31, 2024 valuation were based on the PMRS Experience Study for the period covering January 1, 2014 through December 31, 2018 issued by the actuary in September 2020 as well as subsequent Board approved assumption changes.

The PMRS System’s long-term real rate of return on pension plan investments was determined using a building-block method in which best-estimates of expected future nominal rates of return (net of investment expenses) are developed for each asset class. These returns are combined to produce the System’s Long-Term Expected Real Rate of Return by calculating the weighted average return for each asset class using each respective target asset allocation percentage and multiplying by the expected future nominal rate of return, while also factoring in covariance across asset classes, then deducting expected inflation (2.5%). Best estimates in geometric real rates of return for each utilized asset class are included in the pension plan’s target asset allocation as of December 31, 2024 and summarized in the table below labeled “System Nominal Net and Real Rates of Return by Asset Class”.

System Nominal and Real Rates of Return by Asset Class

Based on the aforementioned methodology, the PMRS Board established the System's Long-Term Expected Rate of Return at 7.29%.

In addition to determining the System’s Long-Term Expected Rate of Return, the PMRS Board, under the laws of the Commonwealth of Pennsylvania (Act 15 of 1974), is obligated to develop and apply the Regular Interest Rate to each of the individual participating municipalities’ actuarial asset accounts held by PMRS. The rationale for the difference between the System’s Long-Term Expected Rate of Return and the individual participating municipalities’ Regular Interest Rate is described in the following section “Discount Rate.” As of December 31, 2024, this rate is equal to 5.50%.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 7: DEFINED BENEFIT PENSION PLAN (CONTINUED)

B. Net Pension Liability/(Asset) (Continued)

Discount rate. While it is often common practice to establish an actuarial Discount Rate that is equal to the Long-Term Expected Rate of Return, PMRS is required by law (Act 15 of 1974) to establish a Discount Rate equal to the Regular Interest Rate (Regular Interest Rate / Discount Rate). The PMRS Board establishes the Regular Interest Rate / Discount Rate on the basis of expected stable and consistent earnings on investments to be applied to the accounts of the individual participating municipalities and includes the accounts of plan participants, municipalities, and plan retirees each year. As a starting point, the Board considers the following five quantitative factors in reviewing the Regular Interest Rate / Discount Rate:

1.) Retiree Plan liability as a percentage of total Plan liability.

2.) Active Plan participant liability as a percentage of total Plan liability.

3.) Smoothed Pension Benefit Guarantee Corporation (PBGC) annuity rates as a proxy for annuity purchase rates,

4.) PMRS System Long-Term Expected Rate of Return and.

5.) PMRS investment expenses.

The Board then considers the Regular Interest Rate / Discount Rate derived from the above formula by a variety of qualitative factors such as the desire to minimize Regular Interest Rate / Discount Rate volatility, probability of achieving the Regular Interest Rate, varying levels of asset allocation and liquidity, trending of annuity rates, total PMRS actuarial and fair value funding ratios, feedback from existing PMRS municipalities, and recommendations from the System's investment and actuarial consultants. The Regular Interest Rate / Discount Rate adopted by the Board and used to measure the individual participating municipalities' total pension liability was 5.50% as of December 31, 2024.

The Regular Interest Rate / Discount Rate will likely be less than the System Long-Term Expected Rate of Return. Should the System experience a prolonged period of investment returns in excess of the Regular Interest Rate / Discount Rate, the Board is authorized to allocate any applicable portion of any such excess in accordance with Board policies in the form of Excess Interest as provided for in the law.

The projection of cash flows for each underlying municipal plan, used to determine if any adjustment to the Regular Interest Rate / Discount Rate was required (“depletion testing”), used the following assumptions: 1.) member contributions will be made at the current contribution rate, 2.) participating plan sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate, and 3.) the System’s Long-Term Expected Rate of Return will be used in the depletion testing of projected cash flows. Based on those assumptions, the PMRS pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 7: DEFINED BENEFIT PENSION PLAN (CONTINUED)

C. Changes in the Net Pension Liability/(Asset)

Changes in the County's net pension liability for the plan for the December 31, 2024 measurement period were as follows:

Sensitivity of the pension liability to changes in the discount rate. The following presents the net pension liability of the County, calculated using the discount rate of 5.50%, as well as what the County's net pension liability/(asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (4.50%) or 1-percentage-point higher (6.50%) than the current rate:

County's net pension liability/(asset)

Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in the separately issued PMRS financial report.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 7: DEFINED BENEFIT PENSION PLAN (CONTINUED)

D. Pension Expense and Deferred Outflows of Resources Related to Pensions

For the year ended December 31, 2024, the County recognized pension expense of $(695,211). At December 31, 2024 the County reported deferred outflows and inflows of resources related to pensions from the following sources:

The $2,139,429 reported as deferred outflows of resources related to pensions resulting from the County contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2026 financial statements. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended December 31:

2026 $ (585,432)

2027 1,181,468

2028 (3,014,005)

2029 (1,536,259)

2030 -

Thereafter -

NOTE 8: LEASES

Pertinent information regarding leases at December 31, 2025 is presented below:

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 8: LEASES (CONTINUED)

The future principal and interest payment at December 31, 2025 are as follows:

Year Principal Interest Total

2026 $ 429,689 $ 348,323 $ 778,012

2027 284,241 334,426 618,667

2028 298,595 322,815 621,410

2029 258,115 311,630 569,745

2030 243,223 301,405 544,628

2031-2035 1,515,557 1,338,871 2,854,428

2036-2040 1,966,178 983,868 2,950,046

2041-2045 1,725,664 581,282 2,306,946

2046-2050 911,151 329,924 1,241,075

2051-2055 663,342 186,887 850,229

2056-2060 663,239 36,773 700,012

$ 8,958,994 $ 5,076,204 $ 14,035,198

Lease Liability

Lease liability activity for the year ended December 31, 2025 was as follows:

The County, as the lessor, leases various building space to its vendors. An initial lease receivable was recorded in the amount of $576,390 in the General Fund. There was no additional revenue for variable and other payments not included in the measurement of the lease receivable. As of December 31, 2025, the value of the lease receivable is $293,095 and the related deferred inflow for future payments expected to be collected on the lease is $265,701. The payment amounts are fixed monthly payments ranging from $2,016 to $5,330 with lease periods ranging from 4 years to 9 years. The leases have an interest rate of 4%. The County recognized lease revenue and interest of $123,489 and $12,632, respectively for the calendar year.

The Conservation District, a special revenue-nonmajor governmental fund, entered into two leases with varying terms that run through 2029, with payments ranging from $3,672 to $17,366 based on the District's estimated interest rate of 3.75% and 4.01%. The ending lease receivable was $357,967 and the associated deferred inflow was $323,643. The fund recognized lease revenue of $243,403 and interest revenue of $20,667.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 8: LEASES (CONTINUED)

Business Type Activity – Adams County Industrial Development Authority

The Authority leases office space from ACEDC, a related party, at 1300 ProLine Place, Gettysburg, Pennsylvania. The leased premises consist of approximately 3,059 square feet in the ACEDC/Career Link Building located in Straban Township, Adams County, Pennsylvania. The lease commenced on February 1, 2003, for an initial five-year term and renews automatically for four additional five-year terms unless either party provides written notice of termination at least 120 days prior to the expiration of the then-current term. In no event may the lease be renewed beyond the twenty-fifth year from the commencement date without a new instrument signed by the parties.

Rent under the lease is $18,000 per year, payable in twelve equal monthly installments of $1,500. The lease automatically renews at the same annual rent of $18,000

Maturity Analysis

Future minimum lease payments under noncancellable leases are as follows as of December 31:

Lease Liability

Business-Type Lease liability activity for the years ended December 31, 2025 was as follows:

NOTE 9: RISK MANAGEMENT

Effective January 1, 1999, the County participates in the Pennsylvania Counties Workers Compensation Trust (the “Trust”) insurance pool for workers’ compensation insurance. Insurance premiums are developed based on employee job descriptions, rate factors, and payroll costs for the year. For the year ended December 31, 2025, the County was required to pay an insurance premium of $780,076 to the Trust. The Trust has an audit performed each year and the County may be required to pay an additional premium or entitled to a refund as a result of the audit. For the 2025 Trust audit, the County received a refund of $47,639.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 9: RISK MANAGEMENT (CONTINUED)

Effective January 1, 2015, the County has elected not to purchase commercial health insurance for the risks of losses to which it is exposed. Instead, the County’s management believes it is more economical to manage its risk internally. The County pays all claims for risk of loss which the County is exposed including health and dental claims, which are administered by third parties. The County has purchased stop loss insurance from commercial insurers that will reimburse the County 100% of all medical claims over $175,000 per year per participant with exceptions.

The County will also receive a stop loss reimbursement of 100% for all medical claims up to $1,000,000 which exceed $10,059,855 in 2025. The County would have to fund any claims incurred in excess of the $1,000,000 threshold. During the year ended December 31, 2025, the County received stop loss reimbursements for seven claimants in the amount of $507,197.

The County accounts for its self-insurance activity in its Internal Service Fund. Liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Because of delays between the time a claim is incurred and it is reported to the County for payment, the estimated liability does not necessarily result in an exact amount. The County's claims liabilities amounts for the years ended December 31, 2025 and 2024 were:

The County continues to carry commercial insurance for all other risks of loss including liability and property, and casualty insurance. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years except for the stop loss reimbursements mentioned above. The self-insurance liability is recorded as Accounts Payable in the Proprietary Fund Statement of Net Position and the Government - Wide Statement of Net Position.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 10: LONG-TERM LIABILITIES

A summary of changes in long-term liabilities follows:

The change in the compensated absences liability is presented as net change.

Compensated absences are liquidated by the General Fund, Children & Youth Fund, 911 Fund, and certain other Nonmajor Funds.

The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax-exempt debt bonds after August 31, 1986. Arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if rebates are not reported and paid to the Internal Revenue Service (IRS) at least every five years. At December 31, 2025, the County has not recorded an arbitrage liability in its financial statements.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 10: LONG-TERM LIABILITIES (Continued)

General Obligation Notes and Bonds Governmental Activities:

COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

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NOTE 10: LONG-TERM LIABILITIES (Continued)

An analysis of debt service requirements to maturity on these governmental activities obligations follows, assuming current interest rate remain the same:

General Obligation Debt Note Payable

Principal Interest Total Principal Interest Total

2026 $ 4,770,000 $ 1,381,169 $ 6,151,169 2026 $ 57,143 $ 6,859 $ 64,002

2027 4,850,000 1,296,177 6,146,177 2027 57,143 6,859 64,002

2028 4,855,000 1,203,723 6,058,723 2028 57,143 6,859 64,002

2029 4,950,000 1,109,325 6,059,325 2029 57,143 6,859 64,002

2030 5,055,000 1,005,469 6,060,469 2030 57,143 6,859 64,002

2031-2035 22,005,000 3,030,409 25,035,409 2031-2035 - - -

2036-2040 9,340,000 600,441 9,940,441 2036-2040 - - -

2041 555,000 16,650 571,650 2041 - - -

$ 56,380,000 $ 9,643,363 $ 66,023,363 $ 285,715 $ 34,295 $ 320,010

NOTE 11: INTERFUND TRANSFERS

Interfund “transfers in” and “transfers out” are as follows:

Transfers from the General Fund are used to move unrestricted revenues to finance various programs that the government must account for in other funds in accordance with budgetary and legal authorizations, including amounts as subsidies or matching funds for various grant programs.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 12: INTERFUND RECEIVABLES AND PAYABLES

Interfund receivables and payables balances of each individual fund as of December 31, 2025, are as follows:

The General Fund has paid expenses on behalf of other funds, therefore, a corresponding interfund receivable and payable has been recorded.

NOTE 13: COMMITMENTS AND CONTINGENCIES

NOTE 14: COMPENSATED ABSENCES

• A)The County participates in a variety of federal and state assisted grant programs, which are subject to financial and compliance audits. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the County expects such amounts, if any, to be immaterial.
• B)The County is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the County's financial position.

Employees of the County are entitled to certain compensated absences, consisting of paid time off ("PTO") and sick leave. Applicable GASB pronouncements require accrual of compensated absences that meets certain specific conditions. The County has determined that such conditions apply to PTO and sick leave pay of Governmental Funds.

All full-time employees are eligible to accrue PTO, beginning the first day of employment, based on non-overtime hours paid. At year-end, employees may carry over a maximum of 260 hours of unused PTO. Any unused PTO in excess of this limit is placed in the sick leave reserves for employees. This balance is attributable to services already rendered and carries over without limit. Upon retirement, employees may receive reimbursement for up to 60 hours of accrued sick leave reserves. An additional liability for total sick leave is recorded for amounts more likely than not to be used for time off.

To the extent PTO and sick leave liabilities for governmental funds are liquidated with available resources they are accounted for as fund liabilities in the fund financial statements; the remainder of the obligation is accounted for in the government-wide financial statements.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 15: FUND BALANCES/NET POSITION

The constraints of fund balances included in the fund financial statements represent portions of fund balances that are nonspendable, restricted, or assigned for various purposes and are not available for the payment of other subsequent expenditures. The following nonspendable, restricted, and assigned fund balances are included in the fund financial statements.

General Fund

Nonspendable
This line item represents amounts for prepaid expenses.	$ 181,603
This line item represents amounts for loans receivable	$ 585,000
Assigned
This line item represents amounts assigned for the subsequent years' budget.	$ 5,000,000
Opioid Settlement Fund
Restricted	$ 2,270,949
This line item represents amounts that are restricted for the expenditures in accordance with an Opioid litigation settlement.
Nonmajor Funds
Restricted
Act 13 Fund (Public Works)	981,451
This line item represents amounts that are restricted for the expenditures in accordance with Act 13.
Liquid Fuels Tax (Public Works)	449,708
This line item represents amounts that are restricted by grantors for the future payments of expenditures for the building and improvement of roads and bridges.
Records Management (General Government)	423,492
This line item represents amounts that are restricted for improvements in the for the County as well as the Register of Wills, Recorder of Deeds' Office, Clerk of Courts, and Prothonotary offices
County Records Improvement (General Government)	$ 319,679
This line item represents amounts that are restricted for records improvements in the County.
2020 Capital Projects Fund	442,395
This line item represents amounts that are restricted for various capital projects of the County.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 15: FUND BALANCES/NET POSITION (CONTINUED)

Nonmajor Funds (Continued)

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 15: FUND BALANCES/NET POSITION (CONTINUED)

Nonmajor Funds (Continued)

This line item represents amounts restricted for the Green Space Program.

The Internal Service Fund, a proprietary fund, had a fund deficit of ($852,207) for the year ended December 31, 2025. The deficit is due to an increase in self-insurance claims in for the year ended December 31, 2025.

The Capital Reserve Fund had a fund deficit of ($119,525) due to a large payable balance at December 31, 2025.

NOTE 16: NOTES RECEIVABLE

Notes receivable represent amounts loaned to qualified County residents for Affordable Housing that are to be repaid to the County. The County has various loans that extend to different time periods with respective residents. The balance of the notes receivable at December 31, 2025 was $100,681.

NOTE 17: LOANS RECEIVABLE

The County loaned or paid funds to/on behalf of the Adams County Industrial Development Authority in which the Authority was able to purchase four properties. Upon sale of these lots, proceeds will be transferred to the County until the loan is satisfied. The balance outstanding as of December 31, 2025 was $585,000.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 18: OPIOID LITIGATION SETTLEMENT

In 2021, the County signed on an Opioid settlement with the state of Pennsylvania where the County will receive funding for various opioid remediation uses. The County received payments in 2025, totaling $234,098, and will receive annual payments over the next 15 years.

In 2022, the County signed on an Opioid settlement with the state of Pennsylvania where the County will receive funding for various opioid remediation uses. The County received payments in 2025, totaling $284,924 and will receive annual payments over the next 14 years.

NOTE 19: EXCESS EXPENDITURES OVER APPROPRIATIONS IN MAJOR FUND

The following major fund had an excess of actual expenditures over budget for the year ended December 31, 2025.

The excess expenditures over appropriations in the Children and Youth Fund was funded by greater than anticipated revenues and transfers in.

NOTE 20: SUBSCRIPTION BASED IT ARRANGEMENTS (SBITA's)

The County has entered into various software contracts that meet the criteria as a subscription based IT arrangement under GASB 96. The contracts vary from monthly payments to yearly, with payments ranging from $696 to $119,131. Interest rates were not readily available, so an incremental borrowing rate of 4% was used for all contracts. The subscription assets have useful lives varying from 1 years to 4 years and an initial asset value of $2,522,617. At December 31, 2025 accumulated amortization for the subscription assets was $1,575,378. The initial liability was $1,208,955 and the outstanding liability at December 31, 2025 was $810,218.

The future principal and interest payments as of December 31, 2025 were as follows:

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2025

NOTE 20: SUBSCRIPTION BASED IT ARRANGEMENTS (SBITA's) (CONTINUED) Subscription Liability

Subscription liability activity for the years ended December 31, 2025 was as follows:

NOTE 21: SUBSEQUENT EVENTS

The County has evaluated subsequent events through June 29, 2026. This date is the date the financial statements were available to be issued. The following event subsequent to December 31, 2025 was noted:

In March 2026, the Adams County Industrial Development Authority entered into a redevelopment agreement and a sale agreement with Greenmount Ventures, LLC for the sale and mixed-use redevelopment of the former Gettysburg Foundry property (Adams County Parcel No. 09E16-0075-000) for a stated purchase price of $500,000. Under these agreements, the Authority will utilize grant and loan proceeds from the BIOS program to complete certain environmental remediation and site preparation activities prior to closing, and the purchaser is responsible for providing public water and sewer services to the site and for repayment of the BIOS loan at settlement.

No other material events subsequent to December 31, 2025 were noted.

NOTE 22: CHANGES WITHIN THE FINANCIAL REPORTING ENTITY

Change in Presentation/Restatement of Net Position

During 2025, the Conservation District was reclassified from major to a non-major fund due to significant decrease in its liabilities.

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REQUIRED SUPPLEMENTARY INFORMATION

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COUNTY OF ADAMS REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE COUNTY'S NET PENSION LIABILITY/(ASSET) AND RELATED RATIOS LAST 10 YEARS

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COUNTY OF ADAMS, PENNSYLVANIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL CHILDREN AND YOUTH FUND FOR THE YEAR ENDED DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL 911 FUND FOR THE YEAR ENDED DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2025

Budgets and Budgetary Accounting

Legal Requirements

Commonwealth of Pennsylvania statutes require that County Governments establish budgetary systems and adopt annual operating budgets. The County's annual budget includes the General Fund and certain Special Revenue Funds and is based on estimates of revenues and expenditures approved by the Commissioners. The County adopts the budget on the same basis of accounting as reported in the fund financial statements. The County of Adams follows these procedures in establishing the budgetary data reflected in the financial statements:

County Budget Process

1. During the 3rd quarter each year the Budget and Purchasing Department prepares and distributes to all department directors budgetary worksheets. The worksheets are used as a tool for department directors to provide their projections for the current year and the next year. Also, worksheets allow for multi-year planning. The County utilizes Target Based budgeting for their new budget process.
2. The County Manager and Budget and Purchasing Director in conjunction with the Commissioners interview all department directors to discuss their budgets as submitted and allow them to substantiate projected revenues and expenditures.
3. The Budget and Purchasing Department assembles the preliminary projections of revenues and expenditures into a formal budget incorporating any revisions or adjustments resulting from the Commissioner's review.
4. Public meetings are conducted on the proposed budget. The proposed budget is available for public inspection for 20 days prior to final adoption.
5. After the 20-day inspection period, but prior to December 31, the County Commissioners adopt the final budget by enacting an appropriate resolution.
6. Formal budgetary process is employed as a planning device. The adopted budget is on a basis consistent with GAAP. Budget amounts are as originally adopted, or as amended by the County Commissioners.

Level of Control

The County maintains budgeting control at the individual fund level.

Lapsing of Appropriations

Unexpended appropriations lapse at year-end.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) DECEMBER 31, 2025

Budgets and Budgetary Accounting (Continued)

Management Authority

During the course of the year, departmental needs may change, emergencies may occur, or additional revenue may arise. As a result, funds are transferred between line items of a department's budget or additional revenue may need to be budgeted for a specific project or grant. As a management device, the County maintains budgetary control at the department line item level, as authorized by a resolution of the Board of Commissioners. County's management can overspend at the department level and make transfers between the departments without the approval of the Commissioners. Actual expenditures and transfers out may not legally exceed "budgeted" appropriations at the individual fund level.

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OTHER SUPPLEMENTARY INFORMATION

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 2025

Special revenue funds are used to account for the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes. The County adopts budgets for the following nonmajor special revenue funds: Liquid Fuels Fund, Hazardous Materials Fund, the Act 13 Bridge Improvements Fund, and the Hotel Tax Fund. The following nonmajor governmental funds are utilized to account for those financial activities:

The Juvenile Restitution Fund is a special revenue fund used to account for juvenile offender restitution revenues and expenditures.

The Liquid Fuels Fund is a special revenue fund used to account for state aid revenues and expenditures for the County's Liquid Fuels Program which funds a range of projects to support construction, reconstruction, maintenance and repair of county bridges.

The Domestic Relations Fund is a special revenue fund used to account for Title IV-D revenues received.

The Hazardous Materials Fund is a special revenue fund used to account for the revenues and expenditures for the County's Hazardous Materials program as defined in Act 165 of Title 35.

The Community Development Block Grant Fund is a special revenue fund used to account for revenues and expenditures as set forth in Act 179. Uses include housing rehabilitation, public services, community facilities, infrastructure improvement, development and planning.

The Ag Land Administration Fund is a special revenue fund for the Agricultural Land Preservation Program administered by the County with matching funds from the State.

The Law Enforcement Fund is a special revenue fund used to account for the purchase and distribution of law enforcement equipment.

The Commissary Fund is a special revenue fund used to account for revenues received from commissary commissions and expenditures for inmate welfare.

The Records Improvement Fund is a special revenue fund accounted for by division which includes: County Records Improvement, Register of Wills Automation, Recorder of Deeds Automation, Orphans Automation, Criminal Automation, Prothonotary Automation. These funds have a restricted fund balance.

The Home Fund is a special revenue fund used to account for the revenue received from the PA DCED for the administration of the Home Grant.

The Affordable Housing (Act 137) Fund is a Special revenue fund used to account for revenue collected from the recording of fees for mortgages and deeds to enhance local affordable housing efforts.

The Hotel Tax Fund is a special revenue fund for the administration of the County's Hotel Tax program.

The Court Reserved Fund is a special revenue fund used to account for the revenues of the Offender's Supervision program, treatment fees, and youth education fees.

The Coroner's VSIA Fund is a special revenue fund used to account for revenues received from death certifications from the Vital Statistics Improvement Account. Funds to be used per Act 122.

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COUNTY OF ADAMS, PENNSYLVANIA NOTES TO COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 2025

The Act 13 Bridge Improvements Fund is a special revenue fund for the administration of the Act 13 Marcellus Shale monies that are specifically to be used for at risk bridges.

The Parks and Recreation Green Space Fund is a special revenue fund for the administration of the County's Parks, Recs & Green Space Grant Program. Funded by Act 13 Marcellus Shale monies and County contributions.

The Equitable Sharing Law Enforcement is a special revenue fund used to account for the share of proceeds from federally forfeited assets in cases where the County participated in federal investigations leading to the seizure of assets.

The Conservation District Fund is a special revenue fund used to account for the County's natural resources, land prevention and debt service.

The Capital Reserve Fund is used for capital budget transactions. Funded by appropriations from the General Fund and debt issued for capital item purchases.

The County Records Improvement Fund is a special revenue fund used to account for the records improvement activities of County offices.

The 2020 Capital Projects Fund is used to account for capital additions to the County and future capital projects of the County.

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COUNTY OF ADAMS, PENNSYLVANIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2025

SPECIAL REVENUE FUNDS

Assets SPECIAL REVENUE FUNDS

Juvenile Restitution Liquid Fuels Domestic Relations Hazardous Materials Community Development Block Grant Ag Land Administration Law Enforcement Commissary Fund Records Management Home Affordable Housing (Act 137)

Cash and Cash Equivalents $ 69,875 $ 700,158 $ 1,995,091 $ - - 310,213 $ 181,560 $ 824,193 $ 403,292 $ 329 $ 402,000

Restricted Cash - - - - - - - - - - - -

Receivables

Accounts, net - - - 150 - 2,554 1,472 15,861 4,994 - - 16,763

Taxes - - - - - - - - - - - -

Notes Receivable - - - - - - - - - - - 100,681

Due From Other Funds - - - 66,725 - - - - - - - -

Due From Other Governments - 24,287 426,448 - - - - - - - - -

Other Assets - - - 98 - - - - 15,206 - - -

Total Assets $ 69,875 $ 724,445 $ 2,421,539 $ 66,973 - 312,767 $ 183,032 $ 840,054 $ 423,492 $ 329 $ 519,444

Liabilities

Accounts Payable - 274,737 - 151 - - - $ 8,399 $ - - 30,390

Accrued Liabilities - - - 1,455 - - - - - - - -

Unearned Revenue - - - - - - - - - - - 75,972

Due To Other Funds - - 584,644 65,367 - - - - - - - 7,750

Total Liabilities - 274,737 584,644 66,973 - - - 8,399 - - - 114,112

Deferred Inflows of Resources

Leases - - - - - - - - - - - -

Unavailable Grant Revenue - - - - - - - - - - - -

Total Deferred Inflows of Resources - - - - - - - - - - - -

Fund Balances

Restricted:

Capital Projects - - - - - - - - - - - -

Public Works - 449,708 - - - - - - - - - -

Judicial 69,875 - 1,836,895 - - - - - - - - -

Public Safety - - - - - - 183,032 831,655 - - - -

Cultural and Recreation - - - - - - - - - - - -

Conservation and Development - - - - - 312,767 - - - - 329 405,332

General Government - - - - - - - - - - - -

Unassigned - - - - - - - - 423,492 - - -

Total Fund Balance 69,875 449,708 1,836,895 - - 312,767 183,032 831,655 423,492 329 405,332

Total Liabilities, Deferred Inflows and Fund Balance $ 69,875 $ 724,445 $ 2,421,539 $ 66,973 - 312,767 $ 183,032 $ 840,054 $ 423,492 $ 329 $ 519,444

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COUNTY OF ADAMS, PENNSYLVANIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE/(DEFICIT) NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL LIQUID FUELS FUND FOR THE YEAR ENDED DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL HAZARDOUS MATERIALS FUND FOR THE YEAR ENDED DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL ACT 13 BRIDGE IMPROVEMENT FUND FOR THE YEAR ENDED DECEMBER 31, 2025

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COUNTY OF ADAMS, PENNSYLVANIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL HOTEL TAX FUND FOR THE YEAR ENDED DECEMBER 31, 2025

• $ 96,706 $ 70,306 $ 4,779 $ 446,114 $ 153,291 $ 879,648 $ 758,428 $ 239 $ 15,226 $ 55,068 $ 34,859
• - - - - - - - - -
• - - - - - - - - -
• $ 96,706 $ 70,306 $ 4,779 $ 446,114 $ 153,291 $ 879,648 $ 758,428 $ 239 $ 15,226 $ 55,068 $ 34,859
• - - - - - - - - -
• - - - - 879,648 - - - - -
• - - - - 879,648 - - - - -
• $ 96,706 $ 70,306 $ 4,779 $ 446,114 $ 153,291 $ - $ 758,428 $ 239 $ 15,226 $ 55,068 $ 34,859

Unclaimed Prison Inmate Clerk of Courts Clerk of Courts Prothonotary Resolution & Sheriff New Treasurer Agent MDJ Money Cash Account General Bail/Computer General General Sheriff General Escheat of Comm Harvey MDJ Snyde

Total liabilities Net Position - Restricted

Liabilities. Due to other Governments Other Liabilities

Total assets

Cash and Cash Equivalents Accounts Receivable Delinquent taxes receivable on behalf of other governments

COUNTY OF ADAMS COMBINING STATEMENT OF FIDUCIARY NET POSITION (CONTINUED) DECEMBER 31, 2025

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