GLEN ROSE – Yes. It’s been a rough, rough, budget season for Somervell County.
Since budget considerations began around April, members of the Somervell County Commissioners Court have been preoccupied with counteracting the effects of Energy Future Holdings’ and its subsidiary, Luminant’s, continued fight to lower the assessed value of Comanche Peak Nuclear Plant.
Luminant recently requested Comanche Peak’s value be lowered from $1.868 billion to $261 million. The Somervell County Appraisal Review Board rejected that request but the decision was expected to be appealed to district court – as Luminant did when challenging Somervell County’s 2015 valuation.
As a result, all Somervell, County taxing entities – including the county, school, water district and hospital district – have moved forward in an almost complete state of uncertainty. Until the issue can be resolved, there is no real knowing what the actual tax base can and will be.
Somervell County Judge Danny L. Chambers said the county's monetary problems are considerable – thanks only to Luminant.
“It has put us – put these gentlemen – in a very difficult situation,” Judge Chambers said, indicating commissioners Larry Hulsey, John Curtis, Kenneth Wood and Don Kranz. “ … In this turmoil good (county) people go find other jobs.”
The situation has left commissioners in a rough place.
“Even without challenges by Luminant, we had an overall $400 million value decrease at the plant by the appraisal district between last year and this year,” explained Brian Watts, Somervell County auditor.
Watts said commissioners have no choice but to remain fiscally cautious because of uncertainties in the immediate future. They must stay wary of landing in a budgetary position where they are out of money, he said.
That’s had a major chilling effect on the budgetary proceedings of the Somervell County Commissioners Court: A hiring freeze. No new vehicles. No raises. No cost of living increases for county employees, no matter how well deserved – even as insurance costs continue to increase.
“A lot of our employees are going to see their paychecks go down – which will be disconcerting for some of them,” Watts said.
Watts said since 2013, commissioners have cut more than $4 million – over 25 percent – from the budget in anticipation of changes.
The problem is, anything can happen and it is impossible to determine the financial impact, he said.
“One of the downsides of trimming budgets so lean is you don’t know what you don’t know,” Watts said. “Accidents can happen. Emergencies can happen. If you’re not budgeted for a fire, or if one of the buildings got damaged, you might need to cover as much as a $5,000 or $10,000 deductible.”
A budget this lean will have to be continually reviewed – even after being passed, he added.
“It is very possible we will have to do more cuts – even midyear – to maintain liquidity for the county,” Watts said. “We are looking at serious departmental cuts and serious staff layoffs if this were to happen.”
Somervell County Commissioners unanimously passed a $11,643,943 budget on Monday, Sept. 26 – down 25.74 percent, or $4.3 million, since 2013’s budget.
Commissioners also voted to increase the tax rate by a nickel to .46159 per $100 valuation. Commissioners already increased the tax rate by a penny last year, the first time since 2013 it had been raised, Watts said.
“The budget does propose a deficit right now – based on the assumption we are looking at about an $800,000 deficit,” Watts said. “That is assuming we spend 100 percent of every line item in the budget, which is not going to happen.”
The revenue total of the budget is $10,816,564.
Luminant remains the elephant in the room when it comes to resolution of the problem, Watts said.
“There’s a lot of speculation as to what amount Luminant will remit for taxes,” he said. “That is the huge unknown when dealing with a taxpayer like that.”
The county has been frugal and in some cases that has been its salvation to date, officials said.
But Somervell is currently down to $5 million in the county reserves. It would take at least $12 million to keep the county afloat at a comfortable financial level for one year, Watts said.