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

Page 30

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