May 14, 2025
By: Dwayne Page
The county’s fiscal agent, Steve Bates, met with the budget committee for the first time this year Tuesday night to give his assessment of the 2025-26 fiscal year budget as proposed and to offer some advice for the future.
“The budget as presented (with many budget requests left out) is as good as any budget I’ve seen us do here. We could be off five percent on expenditures and three percent on revenues and still have a balanced budget,” said Bates.
The county general fund was projected to go into cash by the end of the 2024-25 fiscal year to the tune of $854,000 but as of Tuesday, May 13, 2025 the fund showed $3.1 million in budgeted but unspent money for the 2024-25 fiscal year. County officials said it is unlikely that all of that money will be expended by June 30, 2025.
For the 2025-26 fiscal year, the county general fund is projected to go into cash by $1,014,586 if all anticipated revenues come in and every penny budgeted is spent.
Bates said that too is unlikely.
“On a budgetary basis, theoretically we (county general) could be in the hole (going into cash) every year. But we keep a strong fund balance in the general fund just to meet cash flow,” he said.
Last year, the county commission adopted a budget with a 51-cent property tax increase for debt service (0.6160 total) to fund construction of a jail/judicial center through the issuance of bonds not to exceed $65 million. But that project failed to move forward after it was soundly defeated at the polls in a public referendum in November. Still the 51-cent tax increase remains as part of the overall tax rate of $2.51 per $100 of assessed value.
In February 2025 the county commission voted to adopt a detailed bond resolution not to exceed $55 million to fund construction of a new 800 student Pre-K to 2nd grade elementary school (adjacent to Northside Elementary School). The term of the bond is for up to 30 years. The projected cost to build the new 124,207 square foot facility at the latest estimate is $53,414,825. Construction has not yet begun.
The new school will be funded only by revenues from local option sales tax money (local purpose/sinking fund) designated for school construction and operation. No county property taxes will be used to fund it.
Although no further tax increase is needed, Bates is recommending that the county keep the tax levy the same (0.6160 for debt service) to not only fund a jail project but future school construction.
“You have a jail to build, and you will need to do short term borrowing for that,” Bates explained. “We don’t have a choice because there’s another school coming after this (elementary) school. As time goes on, the expenditures you are spending now on putting inmates out to other counties, that money will come back once the new jail is built. We can take interest income from capital projects and maybe bank excise income from solid waste, put it in the general fund, and then have the revenue needed to fund the extra positions that the jail requires”.
“In ten years, you are going to build another school. Its coming. You might as well get ready,” said Bates. “We can amortize this jail say over 12 years and get it paid off and then you can build that next school and let that tax levy (0.6160) fund the new school,” he said.
While new elementary school construction is to be supported through the local purpose (local option sales tax) fund, Bates said local purpose is not financially strong enough to support debt payment for two school projects at the same time.
“There is no way sales tax can build two schools,” said Bates. “If you doubled your population and your sales tax doubled you could probably fund a new school but if that happened you would have to build five schools. You are at the jump off point. You have waited too long to build and you’re playing catch up now. We have to look long term and make sure we don’t leave a future county commission in a position you have found yourself in. Let’s get the first school done because when the second school comes if its ten years down the road then you’ll be doing 20-year bonds for that school,” he explained.
Bates also offered another suggestion for the county to consider in support of future new school construction while meeting the state’s maintenance of effort funding requirement for schools.
“They (school board) are budgeting $1.3 million for another piece of land to build a new school (either high school or middle school). I would suggest the county tell the school board to take that out (of their budget) and let the county fund it out of local purpose (local option sales tax revenue) because that fund is supposed to be for things like that,” said Bates.
“They (school board) also need (local option sales tax) cash in their general-purpose school fund to operate on. I would use our restricted cash and let them keep their cash because we have to keep them funded annually at $1,910,000 (from local purpose fund). We are bumping up against the state maintenance of effort (requirement) right now. The more the state gives (schools) the more our (county funding) match goes up. Right now, we are probably within $250,000 or $300,000 of that (threshold) but the good thing is we can count what we are paying in (school) debt toward our local match,” said Bates.
As far as overall debt, Bates added that the county is in good financial condition. “You only owe $925,000. That’s the only debt you owe now,” he said.
The budget committee took no action on Bates’ suggestion. The next meeting of the budget committee will be Thursday, May 15 at 6 p.m. in the lower courtroom of the courthouse.
During the regular monthly meeting last month (April), the county commission voted to ask Treanor Architects and Bell Construction to come up with cost estimates to build a new jail complex at the current site on the public square as well as on a generic green space location. The commission also wants to know what the jail footprint and cost would look like if the county were able to purchase the additional half acre lot adjoining the jail on the east side. No project has been funded or let for bids.