The Rockwall County Budget is comprised of two major cost components; the Maintenance and Operations (M&O) portion and the Installation and Service (I&S) area.
The M&O portion is the money needed by the County to operate on a daily basis. This section includes all costs for the 260 people who make up the County personnel roles; the operation of all the departments in the County, such as the Jail, the Sheriff, the Courts system, the District Attorney, the County and District Clerks, etc.; the on-going maintenance to keep the seven buildings and one leased space, along with the 100 plus vehicles, operating efficiently; and the running of all the services the County is required to provide, such as Indigent Health Care, Fire Marshall, etc.
The M&O makes up about 81% of the total budget this year, or about $25.5 million. This money is allocated from the tax rate that is established specifically for M&O.
The second portion of the County expenses, the I&S portion, is what is needed to pay the principal and the interest on the debt that the County has accrued. This debt includes payment for the Library, the New Courthouse, some Tax Notes issued in 2007, the County Services Building, and the numerous Road improvement projects you see on going through-out the County. Our total debt at the start of this fiscal year, October 1, 2011, was $86,104,727. $56,500,000 of this is Principal and the remainder is Interest on the debt.
In addition to this debt, this year we sold additional Road Bonds in the amount of $16,400,000. Another $26,000,000 will need to be sold this Fall to maintain the accelerated schedule in place to continue the construction of new and better roads for the County.
The money to pay the I&S also comes from a specific tax rate that is allocated to pay this portion of the County expenses. As you can quickly see, the debt is growing, primarily to meet new road construction projects throughout the County that were specifically authorized by the tax payers in the 100 million Road Bond Election of 2008.
The current County tax rate is 38.64 cents per hundred dollars of assessed value of property. This rate for the last five years has been relatively constant: 2007, 35 cents; 2008, 37.5 cents; 2009, 37.5 cents; 2010, 38.64 cents, and 2011, 38.64 cents: a growth of about 10% over five years.
From this tax rate, both the O&M and the I&S are allocated a specific taxable portion that is used to pay their overall costs. For example, the O&M tax rate allocated from the overall tax rate has been: 2007, 29.70 cents; 2008, 29.91 cents; 2009, 29.44 cents; 2010, 29.95 cents; and 2011, 30.79 cents. Again, as you can see, over the past five years, the cost for the operating part of the County has remained relatively constant.
On the I&S side of the budget, however, the I&S tax rate has been: 2007, 5.05 cents; 2008, 7.34 cents; 2009, 7.81 cents; 2010, 8.44 cents, and 2011, 7.84 cents; an increase of 55% in the last five years.
In short, as our debt has grown to pay for the capital improvements we need in the County, the Commissioners Court has held the O&M tax rate and spending almost constant and allocated more money to debt servicing each year versus on-going operations.
This was the proper and prudent course to take. Personnel headcount has essentially been held constant. New software and automation systems have been put off to the future. Capital modernization has been limited. Consolidation of facilities and workspaces has been a prime focus. Some training has been postponed. Salary raises have not occurred. Some new services have been delayed.
But now “The Perfect Storm” is approaching. We know that modernization in the automation area must occur (the Judicial software system that allows our Jail, DA, and the Courts to function is no longer being supported by the vendor because it is so old and antiquated). Some of our vehicles used by the Sheriff have reached their useful life limit and must be replaced. A review of our salary system is needed. And at the same time that we know costs are going up to operate the County, we also know our I&S costs are going up because of previous votes by our citizens and because of the flat-out need to improve our County infrastructure as we continue to grow towards that number of 200-250 thousand people living in Rockwall County.
The Commissioners Court is now working through the budget for FY 2013. At this time, it appears that the tax rate of 38.64 cents will be maintained for yet another year. But this will not be possible for FY 2014 as it will be necessary for our I&S rate to increase from the current 7.84 cents to 10.56 cents. This I&S tax rate of 10.56 cents, while almost three cents higher than our current rate, should be sufficient for the implementation of all of the Roads bonds approved for our Master Transportation Plan. The only debate will be whether it happens all at once or the increase is spread out over two years or three years.
The issue of continuing to take the needed funds from the O&M side of the overall tax rate is a non-issue. The limit has been reached this year. As we grow, we must devote funds for that growth. And as we used to say when I was in the Army, “this is a warning order;” don’t be surprised next year if you see that small increase in our taxes to keep our growth and progress going.
Jerry Hogan is a retired US Army Special Forces Lieutenant Colonel who is currently County Judge of Rockwall County Texas. He can be reached at email@example.com or 214-394-4033.