by Geoff Fox

Hancock officials received a clean opinion when it came to the audit on the fiscal year 2025. Cheryl Dodson presented the annual audit during the April town meeting last Tuesday evening.

The actual audit has been extended until the end of April, Dodson said, however the financials received the clean opinion.

There were some noted changes in accounting principles, she said, as there are new standards the town was required to adopt.

Fiscal 2025 compared to Fiscal 2024 saw an increase in the town’s assets in the general fund mostly due to Trulieve, which had a huge increase in the company’s value. leading to investment income from that increase.

“It’s a little bit like ghost income. It’s paper income, it’s not really cash or anything you can spend,” Dodson said.

The assets for water and sewer also went up due to investments into capital infrastructure, she added.

For the revenue side of things, Dodson said most of the increase was Trulieve while expenses were pretty much flat.

Prior to Dodson’s presentation, Town Manager Mike Faith gave the Public Works report. The topic of water and wastewater came up and through recent studies, Hancock has one of the lowest rates in the county.

Hancock’s water and wastewater bills are combined when other municipalities across Washington County have separate rates.

The town could consider splitting the bills due to the investment in the new wastewater plant. Town Manager Mike Faith said that should be reflected in the rates.

He said those are questions that should be addressed in a public workshop.

During her presentation, Dodson told town officials the water and sewer funds could help inform them when it comes to rate studies.

The income from water and wastewater went down a little, less than a percent, Dodson said, but expenses went up about $63,000.

“Most of that was compensation costs,” she said.

When getting into looking at the statements for the water and sewer funds, Dodson said town officials would find they’re not covering their respective operating costs whether that’s water, sanitation, or sewer.

The sewer funds looked like they had income, but Dodson said that was because there was grant money coming in.

“It’s revenue, but the expense was capitalized,” she said. “So you spent it when you recognized it.”

Dodson added it was something town officials would have to think about as they move forward with the water and wastewater rates.

Right now, the General Fund is doing a lot of subsidizing for the Public Works funds, she said.

“So if you’re thinking of remeasuring your rates, that might be part of the conversation as to whether you want to continue having your general fund doing as much as subsidizing or if you want to increase your rates so these funds can cover more costs,” Dodson said.

The idea is the two should operate like a business and cover their own costs.

Faith said town officials should begin looking at the Fiscal Year 2027 budget and this discussion dovetails nicely into looking at the rates as well.

Dodson mentioned the town still has $712,000 in ARCA funds that need to be spent by the end of Fiscal Year 2026. She said she understands the money is already earmarked for a project.

There was one finding Dodson’s firm found — the money coming from Trulieve.

The state of Maryland requires all municipalities to insure or collateralize their full cash balance.

Because funds come from Trulieve, the bank the town currently uses can’t cover the funds with FDIC and only offers government securities for collateral, which also can’t insure the cash.

Dodson said the town has a balance just under $325,000, which is uninsured or collateralized.

“It’s a technical violation of the state’s statute,” she said adding that the firm reported on it in the back of the packet officials were given.

Dodson said Faith would have to deal with another business or financial institution that specialize in how to cover risks with cannabis businesses.

Overall, though, Dodson said the town looked pretty good except the only concern was keeping an eye on the water, sanitation, and sewer rates and covering those costs.