By County Judge Stephen ‘Brint’ Carlton

 

Orange County Residents,

The year 2017 was my third year serving you as your County Judge and it will be remembered by most for two events not created by the county: HURRICANE HARVEY and the HOSPITAL DISTRICT ELECTION. Hurricane Harvey was an act of God and the hospital district election was an act of the people. This past year also saw Orange County finally return to FINANCIAL STABILITY after three years of hard work by the Commissioners’ Court and the county employees.

The county employees also received substantial pay increases in 2017. Despite necessary benefit restructuring for future employees, pre-existing benefit plans were “grandfathered” for existing employees and retirees so that they lost nothing. The employees and retirees are better off now than in 2014 with higher pay for employees and less costs for Medicare-eligible retirees. (Examples given later.)

Throughout all of the successes and challenges of 2017, Orange County employees continued to work very hard to provide services to all 83,000 of you while trying to wisely use YOUR MONEY that you have ENTRUSTED TO US. Each county employee is a public servant, and it is my goal to ensure that our number one priority is to serve you. Despite the fake “news” spread on social media by some disgruntled individuals who want to return to the days of taxpayers taking a backseat to special interest groups, this renewed dedication to public service has Orange County’s finances, services, and employees in the best position in over a decade. The below facts are backed by available public documentation.

SUMMARY:

I know your time is valuable and you probably want the bottom line on what happened at the county level in 2017. Here we go:

– Hurricane Harvey passed over Orange County in the early morning of August 30, 2017. It was the worst disaster to strike Orange County in recorded history. The county issued a disaster declaration on August 27, a voluntary evacuation on August 29, and a mandatory evacuation on August 31. The storm’s behavior was unbelievable to even the most experienced weather experts and dropped more rain than any other storm to strike the United States. Tens of thousands of people were impacted and it will take years to recover, but we will recover.

– A hospital district election occurred on December 19, 2017 after a group of residents submitted a valid petition calling for a vote. The county complied with the petition as required by law. The submitting group exercised their rights under Texas Health and Safety Code Section 286 to call for such a vote in hopes of attracting a new hospital to Orange County. Baptist Hospital closed all emergency services in January 2017. Opponents to the proposed district cited Baptist’s previous failure to operate a profitable hospital, the proximity of Jefferson County hospitals, an aversion to government involvement in health care, and a desire for no additional taxes. The hospital district vote failed by a very wide margin. Some residents have vowed to try again in one year while others have vowed to submit a new petition with a zero cent tax rate. The county and Commissioners’ Court, who equally represent all citizens, must remain neutral on this issue as this the vote is initiated by the people and determined by the people. The petition is not the plan of the county, the county does not control when a petition is submitted, the county has no choice but to accept a valid petition, the county does not control the timing of any such election, and a hospital district, should one ever exist, would be completely separate from Orange County Government and control its own decisions, finances, and operations.

– The county finally achieved financial stability by building the fund balance to $12 million while REDUCING THE TAX RATE. The county built up this amount by planning for the future, controlling expenditures, and developing fiscally conservative budgets. These funds will be a tremendous help during Hurricane Harvey recovery operations. However, the county also managed to fix problems that had plagued the county for years. Here is what we accomplished:

o Built the fund balance to $12 million after it projected to be only $390,000 in 2015

o Reduced the county property tax rate for the first time since 2011

o Increased transparency and access by having Commissioners’ Court in Bridge City and Vidor and posting more salary and benefit reports online.

o Raised employee pay an average of 8.4% (first raise since 2015 and first significant raise since 2005)

o Increased Sheriff’s Office Union certificate pay by 50% for fiscal year 2017-2018

 The Union rejected a 5% pay increase that would have also required their health insurance benefits to be the same as non-Union employees

o Ended a four-year old (2013-2017) negotiation stalemate between the county and the Union by signing a two-year extension (2017-2019)

o Ended the Montano jail inmate wrongful death case from 2011 and paid the $3.2 million judgment to prevent further county legal expenses in a losing effort

o Saved tens of millions of dollars over the next 30 years by restructuring retiree health benefits to be similar to surrounding jurisdictions for employees hired on or after October 1, 2017

 We grandfathered employees hired before that date and existing retirees

o Increased funding to the Orange County Economic Development Corporation by

$400,000 in order to improve our chances of landing future development projects (there is a total of 23 projects being pursued with a total value of $20.7 billion and 4,000 jobs)

o Continued work through Way Services to improve county energy efficiency and reduce costs

o Developed Orange County Courthouse Master Plan in order to be eligible for hundreds of thousands of dollars in grant funds to repair the courthouse marble facade

o Purchased $725,000 in 10 new law enforcement vehicles, jail equipment, road and bridge equipment, and computer networking equipment

o Eliminated the elected officials’ pay matrix and raised elected official pay an average of 13.47% (first raise since 2009)

 County Judge Carlton, Commissioner Burton, and Commissioner Crump were the only elected officials to refuse any increase and are making the same today as they were on January 1, 2015

PENDING: Received final payment proposal from TXDOT for proposed Loop 299 project. The Court will make a decision on this project soon, but it will only pass if the project can be done in a way that is an overall benefit to the county and does not create an additional tax burden on the people.

This concludes The 2018 State of the County summary. Please see this article online at orangeleader.com for more information on any issues mentioned in this summary and for the personnel examples cited above. I wish you a blessed 2018!

 

Stephen ‘Brint’ Carlton, Orange County Judge

 

HURRICANE HARVEY:

Hurricane Harvey was devastating to Orange County. Thousands of rescues occurred, tens of thousands of homes were damaged, hundreds of thousands of cubic yards of debris were created, hundreds of millions of dollars in aid were approved by FEMA and SBA, countless volunteer hours and donations were given, and, tragically, four lives were lost as a direct result of the unprecedented storm. The storm dropped trillions of gallons of water across the state, made three separate landfalls, changed directions daily, and stumped weather experts. The storm’s behavior was unlike anything ever recorded.

On August 27, I issued a disaster declaration for Orange County in coordination with city officials, law enforcement, and emergency management professionals. At that time, the storm had made landfall near Rockport, Texas and was projected to continue into central Texas with minimal wide-spread effect on Orange County. The mayors of all seven Orange County cities (Bridge City, Orange, Pine Forest, Pinehurst, Rose City, Vidor, and West Orange) were in agreement on the timing of the disaster declaration.

On August 29 at 12:45 pm, I issued a voluntary evacuation for certain areas of Orange County deemed to be the most at risk in coordination with all city mayors, law enforcement, and emergency management professionals based on the most up-to-date weather forecasts and historical data. The mayors of all seven Orange County cities (Bridge City, Orange, Pine Forest, Pinehurst, Rose City, Vidor, and West Orange) were in agreement on the areas to be included in the voluntary evacuation order.

On August 29 at approximately 9:30 pm, the National Weather Service updated the forecast for Orange County with significantly more rain than previously predicted. The decision was made with law enforcement that it would be unsafe to call for a mandatory evacuation during the night.

On the morning of August 30, the county received even more rain than the 9:30 pm forecast had predicted as Hurricane Harvey stayed directly over Orange County for hours longer than forecast. This is when the most severe flooding began and many roads were impassable. The decision was again made with law enforcement to not call for a mandatory evacuation at that time because many first responders were trapped in their own homes and the two county shelters were flooding and had lost power.

On August 31 at 12:30 pm, I issued a mandatory evacuation for certain areas of Orange County in coordination with all city mayors, law enforcement, and emergency management professionals. I honored the request of city mayors that requested to be left out of the county’s mandatory evacuation order as those officials did not want a mandatory evacuation for their jurisdictions at that time. The mayors of all seven Orange County cities (Bridge City, Orange, Pine Forest, Pinehurst, Rose City, Vidor, and West Orange) were in agreement on the areas to be included in the mandatory evacuation order.

Orange County received record amounts of rain and just over 60 inches, a new U.S. record, was recorded in Jefferson County. I am so proud of the efforts of Orange County employees, law enforcement, first responders, the military, state agencies, out-of-state agencies, and those who volunteered to help their neighbors. I must also thank our federal, state, and local elected officials for their hard work. Some of that work is visible to the public, but far more goes on out of the public eye to request assistance, acquire help, deliver resources, and take care of all of Orange County.

Many people had sleepless nights, put themselves in harm’s way, and were separated from their families during this event. My family also experienced the challenges of Hurricane Harvey as I was in the Orange County Emergency Operations Center almost constantly from August 25 through September 11, was working for 41 hours straight at one point, and learned of my family’s rescue by the Cajun Navy after it happened. We still have additional family members living in our house due to their home flooding.

The work continues to rebuild our county, homes, and families. It will take years before Orange County recovers. However, despite all of the devastation, Orange County will recover.

HOSPITAL DISTRICT ELECTION:

The loss of Orange County’s only hospital has led federal, state, and local elected officials and business and community leaders on a quest to find another hospital to open here. The majority of the hospital companies we met with inquired about a hospital district in Orange County. We learned that, per state law, a hospital district election can be initiated either through state legislative action or a petition brought by registered voters of Orange County.

The Commissioners’ Court’s role is not to decide when, how, or why people of the county exercise rights given to them by the Texas Legislature. Our role is to keep the public informed (transparency) of county-wide issues and what rights the people have regarding those issues. The Commissioners’ Court held two town halls to explain what a hospital district is and what rights people have regarding the formation of a hospital district. We did not and could not tell the people to submit or not submit a petition or how to vote in the event of an election. The Commissioners’ Court represents all people in Orange County and therefore we must represent those who are for and those who are against a hospital district. By law, the Commissioners’ Court has no choice but to accept a valid petition and call an election if that is what the required number of registered voters call for. We cannot refuse to accept a valid petition, we cannot refuse to hold an election, and we cannot advocate for or against a hospital district. A hospital district election is initiated by and determined by the people.

Not surprisingly, the election to form a hospital district failed in 2017. As a neutral party in this, the Commissioners’ Court is proud any time the people peacefully exercise their rights and proud of the number of people who turned out to vote. With or without a hospital district, Orange County will continue to search for a private hospital to come to Orange County and establish a new hospital.

FINANCIAL STABILITY:

Orange County reached its goal of a $12 million fund balance (i.e. savings or rainy day fund) in July 2017 and just in time for Hurricane Harvey. We reached this goal by proper planning, tough decisions, and hard work. However, the number one factor that turned it around was putting the TAXPAYERS FIRST. We were also able to REDUCE the tax rate for this year and keep more money with the public.

A county budget, like all budgets, is made up of [your starting savings + anticipated revenues] – [anticipated expenditures] = [ending savings (or deficit)]. Revenues are made up of assessed property taxes, sales tax, fees, fines, and grants. County property taxes are made up by the county tax rate as determined by the Commissioners’ Court and appraised property value as determined by the Appraisal District. Expenditures are made up of operations (fuel, utilities, paper, etc.), capital outlay (new vehicles, computers, etc.), personnel (wages, employment taxes, benefits, etc.), and retirees (benefits). Prior to 2015, Orange County would make large cuts to operations and capital outlay which reduced services to the taxpayers.

Orange County had a lot of work and soul searching to do in order to build the savings from $390,000 in 2015 to $12 million in 2017. We could have chosen the “easy” path and just raised the tax rate. This would have created an additional strain on homes and businesses to make up the additional tax burden. Instead, we chose to reduce unnecessary expenditures that do not improve service to the public and create a fiscally conservative budget. Here is a brief list of some of the decisions made in 2017:

–           Increased Fund Balance: The Texas Association of Counties (TAC) recommends that counties have a fund balance equal to 25% of annual expenditures. This would equal about $12 million for Orange County. This is especially important in counties prone to major disasters (i.e. Hurricanes Rita, Ike, and Harvey). The fund balance allows a county to operate after a disaster without the need to borrow money. Borrowing money increases costs because of fees to set up the loan and interest costs. The fund balance when I took office was projected to be $390,000. We took necessary steps to increase the fund balance to $12 million while also maintaining county operations, revitalizing our equipment, and taking care of our employees. We accomplished all of this while also REDUCING the county property tax rate for the first time since 2011.

–           Reduced County Property Tax Rate: The major goal of public service is to provide necessary services to the public at a minimal cost to the taxpayers. Lowering tax rates is good for the people because it reduces financial strain on homes and businesses. The Commissioners’ Court was able to reduce the county property tax rate for the first time since 2011. The timing of reducing the tax rate and keeping more money in the pocket of taxpayers was also important as residents struggle financially to recover from Hurricane Harvey. Orange County Government was one of only two taxing entities in Orange County to lower their tax rate for the upcoming year. All other taxing entities in the county either maintained their existing tax rate or increased their tax rate for the upcoming year. I hope to lower the county property tax rate more in future years.

–           Increased Transparency and Access: The Commissioners’ Court is dedicated to transparency for all Court decisions and county operations. Court was held in Bridge City and Vidor and it was held in the morning, early afternoon, afternoon, and evening times in order to give more residents a chance to attend in case they had conflicts with other times or locations. We also posted more salary and benefit reports and information online so that anybody can see exactly how their tax dollars are spent on personnel and retiree costs. None of these reports were posted online prior to 2015.

–           Increased Employee Salaries: The county had neglected significant attention to our employee pay matrix for almost a decade. Very few adjustments and pay raises were given and this started to impact our ability to attract and keep employees. We increased the starting pay for all matrix positions and also added a new pay level for those employees who had been with the county for over 20 years. We also added a 5% pay increase across all levels. These changes resulted in a minimum 5%pay increase, a maximum pay increase of 17.88%, and an average pay increase of 8.4%. This change combined with the 1.5% pay increase in 2015 means our matrix employees received a compounded minimum 6.58% pay increase, a maximum pay increase of 19.65%, and an average pay increase of 10.02% from 2014 rates. From fiscal year 2009-2010 to the present, the Employee pay matrix has increased an average of 11.68%.

–           Increased Sheriff’s Office Certificate Pay: Certificate pay became a contractual problem when it was no longer provided for in the contract. The Commissioners’ Court took the unpleasant step of suspending certificate pay in June 2017 (67% through the fiscal year) until a new contract could be reached where certificate pay was included. An end to a four-year negotiation stalemate in September 2017 resulted in a 50% increase to certificate pay for fiscal year 2017-2018 (beginning October 2017) for our Union members. This means they will make about 17% more money in certificate pay under the new system over the two year period of 2016-2018 than if no action had ever been taken (100% + 100% = 200% vs. 67% + 150% = 217%). The Union membership did reject a 5%pay increase offer which would have required them to have the same county-provided health insurance contributions as non-Union employees. From fiscal year 2009-2010 to the present, the Union pay matrix has increased an average of 19.74%.

–           Montano Case Ended: End costly litigation and pay the required $3.2 million judgment in the Montano jail death case from 2011. It was clear the county could no longer proceed after the disastrous U.S. Fifth Circuit Court of Appeals opinion in which those judges affirmed the jury’s blame of Mr. Montano’s unnecessary death on the Orange County Jail.

–           Restructure Future Retiree Health Benefits: Restructure future retiree health insurance benefits only for employees hired on or after October 1, 2017. This change will put Orange County retiree benefits in line with other public entities in the area and SAVE THE TAXPAYERS TENS OF MILLIONS OF DOLLARS over the next 30 years. That is money that can go to services or that can stay with the public through reduced tax rates in future years. Employees hired before October 1, 2017 stay under the 2016

“sliding scale” plan. Retirees who retired before October 1, 2016 stay under the “pre-2016” plan.

–           More Resources for Economic Development: The county devoted an additional $400,000 to the Orange County Economic Development Corporation (OCEDC) to help attract businesses. This is a major step forward as this is the largest amount of resources ever dedicated to the OCEDC. We are surrounded by competing jurisdictions in Jefferson County and Louisiana who were spending far more than us to attract businesses. We now have a better chance to prosper. There are a total of 23 projects being pursued with a total value of $20.7 billion and the potential to create 4,000 jobs.

–           Way Services: The county continued its project with Way Services to reduce energy usage and costs throughout county buildings. Hurricane Harvey delayed completing the work and caused Way Services to go back over work already completed. The project should be complete in early 2018 and pay for itself through energy savings as Way Services has guaranteed. If the county fails to meet the projected cost savings, then Way Services will pay the county the difference.

–           Courthouse Master Plan/Grant Funds: The courthouse marble has been a safety issue since 2015 and required scaffolding to keep it in place. The Commissioners’ Court employed an architect to develop a Courthouse Master Plan for submission to the Texas Historical Commission. The master plan should allow Orange County to receive up to hundreds of thousands of dollars in grant funds from the Texas Historical Commission to make the marble repairs. This will save local dollars for use in other areas.

–           Capital Outlay: The county has continued to replace old and outdated vehicles and equipment in order to provide better, more efficient, and safer services to the people and our employees. We purchased new road and bridge equipment, 10 new law enforcement vehicles, new jail equipment, and new computer networking equipment for a total of about $725,000. Additional purchases are prepared for later in the year depending on available funding and priority needs.

–           Increased Elected Official Pay: The elected official pay matrix was frankly a mess. Prior to 2015, some elected officials, such as the Sheriff, had received pay increases while other elected officials, such as the Constables, had not. Not all Constables made the same pay, not all JPs made the same pay, etc. Also, neglecting the system since 2009 had led to a situation where the Sheriff’s Chief Deputy would earn about $30,000 more than a new Sheriff. The entire system was in disarray.   We decided to eliminate the elected officials pay matrix where elected officials earned more money with each additional term as an elected office (the terms did not necessarily have to be in the same elected office). We based all elected officials’ pay as percentages of the Sheriff’s Chief Deputy and all officials of a similar office will make the same (i.e. all JPs will make the same). The elected official increases ranged from 2.22% for JP 2 (but 14.04% for JPs 1 and 3) to 23.58% for the County Clerk, Tax Assessor Collector, and Treasurer. The average increase was 13.47%. From fiscal year 2009-2010 to the present, the elected officials pay has increased an average of 13.47%.

–           Deferred Pay Increase: As the County Judge, I do not feel it is right for me to vote a pay increase to myself in my existing term of office. As such, I have voluntarily waived (refused) any pay increase for my position for the remainder of my term. The pay increase will be effective for my position on January 1, 2019 regardless of who is County Judge then. Commissioners Burton and Crump have also similarly waived any pay increase for the remainder of their term. We believe this was the best and only way to permanently fix the elected official pay problem that had existed since 2009 while not directly benefiting us. We may never personally see the pay increase and that is fine. It is up to the people and we adopted the increase as if we were under the limitations placed on Congress by the 27th Amendment to the U.S. Constitution. No other Orange County elected officials refused the pay increase and they are all currently receiving the additional amount.

–           PENDING: The proposed Loop 299 Project has been considered in Orange County in one form or another for 30 years. The Texas Department of Transportation (TXDOT) has offered to pay for part of the cost of building the road. However, the county would be responsible for the remainder of the costs. This additional cost is primarily why the county has not approved the project so far. There is a slim possibility of the project receiving additional outside funding to eliminate the county’s portion. The county is exploring this possibility and will make a decision soon. However, as previously stated, the Commissioners’ Court is not interested in approving a project that will not provide an overall benefit to the county and cannot be financed in such a way as to not create an additional tax burden.

o          Example 1 (Long-Term Employee): The District Attorney’s Office Manager is an NE-4 position on our pay matrix. The individual filling that position, Mrs. Lynda Smith, has been with the county for over 20 years. She has held this specific position for less than 2 years and was previously an NE-3. In 2014, her annual salary, excluding longevity pay, was $37,606.40 ($18.08 per hour). She moved up to the NE-4 position in 2016 at a rate of $40,560.00 ($19.50 per hour). The 2017 raise moved her to $46,051.20 ($22.14 per hour). So, she is making 13.5% more today than in 2016 and 22.5% more than in 2014. Even assuming she had been an NE-4 in 2014 ($39,956.80 or $19.21 per hour), her pay would be 15.25% higher today than in 2014. She continues to receive 6 weeks of vacation under the plan that existed for employees hired before October 1, 2016 and she pays no additional funds for employee health insurance. While she is an employee, the county would continue to pay 40% of her eligible dependents’ health insurance if she wanted to enroll them. She had 360 hours out of 480 hours of sick time eligible for buyback earned prior to September 8, 2015. She is down to 338 that is still eligible to be “bought back” upon her retirement and she can still accumulate up to 1440 hours (36 weeks or 9 months) of sick time in the event she needs it. Her county-provided employee life insurance increased from $15,000 to $20,000 in 2015. Even though she will obviously retire after October 1, 2016, her 20+ years of service allow her to retire at any age with the county covering 100% of her retiree health insurance premiums for the rest of her life (Blue Cross Blue Shield of Texas while under the age of 65 and a Medicare Supplement Plan when age 65 and older) as provided for employees hired before October 1, 2017. The county is also paying substantially more into her retirement pay plan with the Texas County and District Retirement System (TCDRS) due to her substantially higher salary. By any objective standard, she is in a far superior position now than in 2014.

o          Example 2 (New Hire): Let’s say a new employee is hired on January 1, 2018 as an NE-3. That employee would earn a salary of $30,534.40 ($14.68 per hour) because they have no existing years of service. This starting rate of pay is 13.9% greater than it was on September 30, 2017. This new employee could earn a maximum of 4 weeks of annual vacation after 20 years of service and can still accumulate up to 1440 hours (36 weeks or 9 months) of sick time in the event the new employee needs it. However, none of this sick time is eligible to be “bought back” upon retirement because the sick time was earned after September 8, 2015. The county will continue to pay 100% of the new employee’s health insurance premiums but will no longer contribute toward the cost of dependent health insurance for employees hired on or after October 1, 2017. Additionally, this employee would be eligible for 100% county-provided retiree health insurance premium coverage if they retire at age 60 and their age plus years of service equal at least 75. County-coverage for this future retiree would end at Medicare eligibility at age 65.

o          Example 3 (Long-Term Retiree): Mrs. Jean Slaughter Parker retired from the county in 2012 with 23 years of service. The county paid 100% of her retiree health insurance premiums when she retired and continues to do so today. All retirees that are Medicare-eligible were switched from a stand-alone Blue Cross Blue Shield health insurance policy to a Medicare Supplement policy in 2015. This reduced the retirees’ overall out of pocket costs, reduced their cost to add eligible spouses, and saved the taxpayers about $220,000 per year. This was an overall improvement for everybody. All retirees also had their life insurance doubled in 2015 from $5,000 to $10,000.

o          Example 4 (New Retiree): Mrs. Valli Lott retired from the county in 2017 with 18 years of service. Because she retired after October 1, 2016 and had less than 20 years of service, the county is paying 75% of her retiree health insurance premiums. All retirees also had their life insurance doubled in 2015 from $5,000 to $10,000.

The above described changes in benefits were necessary to ensure the county would not run out of money and done in such a way as to preserve benefits for existing employees and retirees. A failure to address the rapidly rising health insurance costs now would be financial mismanagement and inevitably lead to higher and higher tax rates. Additionally, these changes are in line with the benefits of surrounding jurisdictions. We were determined to put the taxpayers first and not “kick the can” down the road any longer.

Past “State of the County” addresses can be found at http://www.co.orange.tx.us/County_Judge.html.

These are just a few of the many accomplishments of Orange County in 2017. These do not even take into account the daily achievements of Orange County employees. We kept our fellow citizens safe, moving, healthy, and able to access courts, justice, and records.

Every government employee enjoys the privilege of serving each of you. Government employment is not a right nor do the citizens exist to serve and fund the government. Our sole purpose as public servants is to execute the ideals embodied in The Declaration of Independence and The United States Constitution. Those ideals are that all people are created equal, we each have the rights of life, liberty, and the pursuit of happiness endowed to us by our Creator, that governments are instituted among the people and derive their just powers from the consent of the governed, and that the people established a more perfect union to secure the blessings of liberty to ourselves and our posterity. Thank you for the opportunity, privilege, and honor to serve as your County Judge and I look forward to serving you for many years to come. I pray that 2018 will build upon the successes of 2015, 2016, and 2017 and bring future progress and improvement throughout Orange County. May God bless you, your family, our community, and The United States of America.

 

Stephen ‘Brint’ Carlton Orange County Judge