Dorchester’s County government has lost a key credit rating in the latest fallout from years of overdue financial audits that are only now becoming available. 

Moody’s Investors Service late last week formally withdrew Dorchester’s credit rating when county officials failed to produce financials under a 30 day deadline. Moody’s cited the lack of information from Dorchester in wiping out its credit rating.

County Council President Lenny Pfeffer said Dorchester officials are engaged with Moody’s to try to fix the information. The county posted the oldest of the overdue audits, for fiscal year 2021, on its website Monday.

“We’ve instructed (Moody’s) that as soon as we receive the audits that are complete, we will make sure that they have that information,” Pfeffer said. “But in the meantime, we’ve sent them everything else that we could up to this point.”

With no credit rating, the county would be forced to pay much higher interest rates on any bonds or capital leases. The difference could be 12 to 15% higher than the desirable municipal bond rating it had enjoyed until now. That’s more taxpayer dollars going to pay for higher interest. 

The lack of a credit rating also means a likely discount in the resale value of at least $30 million worth of bonds the county previously issued. S&P Global, another rating service, withdrew its rating for Dorchester in April.

The county government has failed to file legally required financial audits to the state since 2020. With the 2021 audit complete, the county is still overdue on the 2022 audit. The fiscal year 2023 audit is due by the end of October.

Officials previously cited high turnover in the finance department and a 2020 computer hack as reasons for the delay. But multiple extensions granted by the state last year had expired with no completed audit submitted. Pfeffer said the current delay is a matter of time auditors need to work.

“We’re at the mercy of the third party independent auditor, so we can only go as fast as they go,” Pfeffer said. “We’ve tried to supply as much information as personnel that they’ve asked for, but we’re still at their mercy.”

Pfeffer said at a council meeting September 5th that the audits were 99 percent complete and predicted the oldest missing report, for fiscal year 2021, would be ready in two weeks. The posting on Monday of the 2021 audit comes one day inside his prediction. Pfeffer said he expects progress will accelerate.

“FY21, since they had to translate a lot of data for the system that was lost and stuff that was put in incorrect or whatever, the new information going into 22 should go much faster,” he said.

The county can submit a fee to Moody’s to reevaluate a credit rating once it has the required financial reports finished. Moody’s did not indicate how long it could take to reestablish a credit rating after financial audits are delivered. 

By Jim Brady of WHCP Community Radio 

University of Maryland Shore Regional Health’s plans for construction of a new Regional Medical Center (RMC) in Easton have moved a step forward as hospital officials have received notice that the Maryland Health Care Commission has docketed the application for the project’s Certificate of Need (CON). 

MHCC provided public notice of the docketing in the Maryland Register on August 11th, which initiated a 30-day window for public comment. As of today, no comments have been posted, and the CON application is now ready for MHCC’s review and anticipated approval in the coming months. 

Docketing of the application not only keeps the project moving forward as is required by MHCC’s procedural regulations, but also allows MHCC to gather any supplemental information needed to render a decision. 

The total projected cost of the new Shore Regional Medical Center is $550 million. 

The schematic design phase of the project, which has been completed, involved the participation of multiple departments in refining layout plans and creating new external renderings. The design development phase is now in progress, focusing on the design of individual rooms for optimal workflow.

Plans to build the new Shore Regional Medical Center in Easton are critical to the comprehensive health care delivery plan for Caroline, Dorchester, Kent, Queen Anne’s and Talbot counties. The new location on Route 50 at Longwoods Road will promote better access to care, the new design will accommodate advances in high-quality care and improve patient satisfaction, and the new facility will enhance UM Shore Regional Health’s ability to recruit and retain health care providers and staff.  

Using one of Maryland’s toll bridges and tunnels could become more expensive.

The state has not seen an increase in tolls in more than a decade. Joseph Sagal, executive director of the Maryland Transportation Authority, said that era, which included two toll reductions, may be at an end within the next four years.

“We started looking at the last time tolls were raised, that was nearly a decade ago,” Sagal said at a meeting of the Transportation Revenue and Infrastructure Needs Commission in Annapolis.

“There was a subsequent reduction around 2016 and with that toll revenue decline we saw during the pandemic era and … increased costs,” it is triggering a need for toll revenue increases in the 2028 fiscal year, he continued.

The last time tolls increased was in 2011 under then-Gov. Martin O’Malley (D). At that time, the authority voted to raise cash tolls for cars crossing the Chesapeake Bay Bridge from $2.50 to $4.

Cars crossing the former Harry W. Nice Memorial Bridge in Charles County would cost $4, an increase of $1.

Tolls on both then increased again to $6 in 2013.

Former Gov. Larry Hogan (R) ran his 2014 campaign criticizing O’Malley and Democrats for overtaxing state residents. He cut tolls twice — once in 2016 and again in 2019 — during his two terms in office.

During that time, the state demolished the old Nice Bridge and replaced it with a modern Governor Harry W. Nice Memorial/Senator Thomas ‘Mac’ Middleton Bridge.

Maryland Budget Secretary Helene Grady asked Sagal for details on the impact of toll recent reductions.

“What was the sustainability plan at the time the tolls were reduced and to what extent have the assumptions about that sustainability plan by the previous administration been realized or not realized?” Grady asked.

The need for an increase was attributed to “operating costs being so high, especially as it relates to personnel, equipment, repairs” and other concerns, according to Sagal.

Frank Principe, chair of the commission, said he has discussed the issue of tolls with Transportation Secretary Paul Wiedefeld “as well as the overall performance relative to the toll revenues.”

Principe said the toll rates “is something that the commission will be interested in discussing further at another meeting. I’m sure we’ll get to that in due course.”

The 31-member blue ribbon panel — referred to commonly as the TRAIN Commission — is charged with reviewing, evaluating and making recommendations on how transportation projects should be prioritized and funded.

Last month, commission members were briefed on the need to seek alternative funding sources to bolster declines in state gas tax revenue.

The authority is funded only by tolls from eight facilities in Maryland.

The authority has more than 180 projects in its six-year plan totaling $2.7 billion. The total is a nearly $170 million increase over last year’s six-year planning document.

Included in that are the replacement of eight bridges that are each 50 years old or more, as well as an ongoing study of a third crossing of the Chesapeake Bay.

Sagal spoke in broad terms and offered no specifics related to timing or the amount of an increase.

Sagal’s talking point left some commission members looking for more information.

Senate Minority Leader Sen. Stephen S. Hershey Jr. (R-Upper Shore) said Sagal did not offer enough justification for toll increases.

“I think the important thing that he said, he said the $400 million that they have in operating costs is fine,” said Hershey. “They’ve been able to meet that. So, then you have to look at what the projects are. I think he said the $600 million in projects. I don’t think he came up here and said ‘hey, we’ve got a lot of projects that we haven’t been able to do because the revenue is not there.

“I’d like to hear more of a justification if somebody said we need to increase the polls for exactly what projects out there are not being completed,” he said.

By Bryan P. Sears

After absentee ballots were counted, final results were:

Frank Gunsallus 875
Bob Willey 746
Al Silverstein 393
Kevin Bateman 36

Easton residents are encouraged to vote for Easton Town Council President tomorrow at the Easton Fire House between 7 am and 8 pm. The fire house is located at 215 Leonard Rieck Drive..

Last month, the Spy and the Avalon Foundation interviewed three out of the four candidates. Those interviews are reposted below.

Readers can also watch the Avalon-Spy special Town Hall meeting with all four candidates here.

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The Talbot Spy and the Avalon Foundation recently agreed again to provide special coverage of Easton’s September 12th election for Town Council president. As part of this partnership, the two organizations have decided to hold a Town Hall meeting at the Avalon Theatre on august 29th at 6 pm. Moderated by Spy columnist and Easton resident Craig Fuller, all four candidates have been invited to participate in an hour-long discussion on the future of Easton.

The Spy and Avalon also agreed to broadcast individual candidates’ profiles before the Town Hall gathering.

Last week, Dave Wheelan, the Talbot Spy’s editor, sat down with candidates Frank Gunsallus, Al Silverstein, and Bob Willey to discuss their backgrounds, qualifications, and priorities if elected to office. The fourth candidate, Kevin Bateman, did not respond to our invitation to participate.

In these interviews, the candidates talk about their backgrounds, motive for running for the office, priorities and address some of the town’s challenges.

These interviews average 20 minutes in length.

Frank Gunsallus

Al Silverstein

Bob Willey