Fannin County Commissioners Court accepts proposed budget

Fannin County, Texas -- In a special meeting and workshop held Monday, July 29, 2019, Fannin County Commissioners Court accepted a proposed budget for the upcoming fiscal year with the same tax rate as the past two years while also including a significant raise for most employees, approved the professional services of Sanderson Surveying to complete a boundary survey for the Lake Fannin complex and received a briefing from Turner Construction regarding courthouse restoration.

This will be the first year that Texas counties will operate under the fiscal restraint of a 3.5% rollback process recently enacted by the Texas legislature. Senate Bill 2 dropped the rollback rate from 8% to 3.5% for counties, cities and most other taxing entities.

Rollback was initiated in 1979 by the Texas legislature to limit the amount of growth of a taxing entity before voters could weigh in with a referendum.

According to the Texas.comptroller.gov website, the rollback process starts after a taxing unit formally adopts a tax rate. If a taxing unit other than a school district adopts a tax rate that exceeds the rollback tax rate, voters in the taxing unit may petition for an election on the tax increase. A successful election limits the taxing unit's current tax rate to the rollback tax rate.

Rollback rate is based on a formula that begins with the "effective tax rate," which is the tax rate that would create the same amount of revenue as the previous year.

The rollback rate is the maximum tax rate above the effective tax rate that is allowed by law before voters could petition for an election on the tax increase, known as a tax rate ratification election (TRE).

Fannin County Auditor Alicia Whipple predicts that the county is on track to experience almost 8% growth in taxable revenue, while Fannin County Pct. 4 Commissioner Dean Lackey suggested the jump in taxable revenue may be in the 10%-12% range.

Both of those scenarios could trigger a petition for a rollback tax referendum because a static tax rate combined with significant growth would easily top the 3.5% mark in increased revenue and in effect be considered a significant tax increase.

Fannin County Judge Randy Moore is aware of the challenges the 3.5% benchmark creates.

"The proposed county budget will exceed the rollback rate, but I don't think we can go back to the rollback rate," Judge Moore stated. "Going back to the rollback rate would cost us [the county] $500,000 and that could mean cutting employees, cars for the sheriff, or EMS."

In contrast, the county's proposed budget would result in a $1,040 annual pay increase for all employees except elected officials.

Judge Moore stressed that the proposed budget is "not the final product."

"There's definitely some more trimming to do," added Fannin County Pct. 2 Commissioner A.J. Self.

Fannin County Pct. 1 Commissioner Gary Whitlock noted that his philosophy is to always "cut from the top down."

Fannin County Commissioners Court unanimously approved a proposed budget with a tax rate of 0.589, the same rate that was adopted in 2017 and 2018.

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Commissioners voted to acquire the professional services of Sanderson Surveying to reconstruct the boundary of the 2,025-acre Lake Fannin complex for $24,840, a task complicated by the meandering nature of Red River which borders the property to the north.

The country wasn't required to go out for bids for the survey because the contract is for professional services and less than $50,000.

Judge Moore believes that a survey and appraisal are needed to meet the stipulations of the bill that will eventually transfer the property to Fannin County. Funds to pay for the survey will come out of the line item dedicated to professional services.

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Fannin County Commissioners Court received an update regarding cost overruns on the courthouse restoration project, with recent estimates soaring from the original $16 million to almost $27 million.

"We knew we had a bit of a problem, but not as bad as it was when proposals came in," remarked Robert Hirsch, a senior project manager for Turner Construction.

Judge Moore questioned Mr. Hirsch about the legality of a county with $16-$17 million approved for a project committing to a project that could now cost $27 million, but received no answer.

With bond money, combined with the grant from Texas Historical Commission and interest earned, Fannin County had $17,977,459 dedicated to courthouse restoration. To date, $1,546,994 has been spent, leaving $16,431,465 to complete the job.

Hirsch did note that significant architectural modifications could cut costs. For example, instead of placing restrooms in the basement, the restrooms could be located on the ground floor. He now estimates the total cost to be approximately $25.3 million, down slightly from the $26,965,271 announced earlier this month in Fannin County Commissioners Court.

"We have to work with Texas Historical Commission to make sure we are following their intent," Hirsch said.