County finds $12M, eyes tax rate cut
By Dave Rogers
For The Record
Orange County auditor Pennee Schmitt and her staff have found $12 million in unexpected money, County Judge Stephen Brint Carlton said in a Friday interview.
He said that means not only that all county employees should see their first raise in base pay in years; taxpayers may see their first reduced tax rate since 2011.
Carlton said Wednesday the commissioners’ court, consisting of the judge and four commissioners, was hopeful of giving all county employees a 4 percent raise in the 2018 budget, which takes effect Oct. 1.
In an interview Friday, he upped that hoped-for increase to “the 4 to 5 percent range,” and added that he thought it was time to help the taxpayers, too.
“The county will discuss whether we need to do a tax rate decrease this year based on our financial position,” Carlton said.
The 140 members of the Orange County Sheriff’s Office Employees Association haven’t had a raise in base pay since 2013. The approximately 250 non-union, non-elected county employees received 1.5 percent cost of living adjustments in 2011 and 2015.
The county’s elected officials haven’t had a raise since 2009, Carlton said.
The county tax rate has been 54.4 cents per $100 valuation since 2013 and was last decreased in 2011. However, county property valuations have risen 59 percent since 2000.
Lori Ardoin, the county’s human resources director, was ready for the good news she heard in meetings over the past couple of weeks.
“I’m surprised and I’m glad to see a glimmer of hope that we’re able to push the savings to the employees and services to citizens,” she said.
Schmitt started her job in October 2016, after the release of the 2017 budget. She was busy Friday finalizing the proposed 2018 budget and unavailable for comment.
Based on Schmitt’s updates relayed by Carlton, the latest estimate is that Orange County will have between $15 million and $17 million in its ending fund balance for the 2017 fiscal year, which ends Sept. 30.
That’s significantly more than the $12 million mark – 25 percent of the county’s annual $48 million operating budget – that Carlton and the four county commissioners have been seeking to set aside for emergency expenses, such as hurricanes.
It’s also as much as $12.2 million more than was projected in February, after the county paid an unbudgeted $3.2 million judgment for the Montano v. Orange County jail death case.
It turns out projections made in the 2017 budget were way off, some based on previously miscalculated projections going back to before Carlton took office in 2015.
Before the $3.2 million lawsuit judgment, the county already anticipated spending $3.8 million more than it took in for 2017. Together, that’s a $7 million hit to the fund balance.
But instead, Carlton said new estimates are for the county to take in $5 million in excess of expenses. Less the lawsuit expense, that would leave a $1.8 million addition to the fund balance rather than a $7 million takeaway, a flip-flop of $8.8 million.
And Schmitt has calculated that instead of starting the 2017 budget year with a fund balance of $11.6 million, the beginning total was really “closer to $15 million,” Carlton said Friday.
That would be another $3.4 million in “found money.”
Carlton, who, along with Commissioners Barry Burton and Jody Crump, is running for re-election in 2018, said the county had a projected $392,000 in its fund balance at the beginning of the 2015 budget year.
The judge took office three months into that budget year, on Jan. 1, 2015.
He said by “being conservative with our financial estimates,” and the fact that department heads overestimated their yearly needs, the county closed 2015 and 2016 with $5 million to $6 million each year in revenues over expenses.
That money went into to the fund balance.
Carlton’s critics say he just “padded” the budgets by overestimating expenses and underestimating revenues, so he’d look good at the end of each year.
“There is no intent to ‘cook’ the books,” he said. “Elected officials and department heads complained we would never make it with the money we budgeted.”
Commissioners’ court has been looking hard to cut costs in recent years. That’s rubbed some employees the wrong way.
“We’re doing now what we said we would do whenever we hit 25 percent,” Carlton said.
“The court has said in the past if we can get in the right position and make sure we’re still providing services, reducing the tax rate will help homeowners and businesses. It will make Orange County more attractive for businesses to locate here.”
It has been a team effort, he said.
“All the county elected officials, department heads and employees have done a good job to help us get to this point. We got here faster than I thought,” Carlton said, “which is a good thing.
“I thought it would take us five or six years. Two and a half is a surprise – but it’s a very good surprise.”