County discusses assistance districts

Donley County officials learned more about the idea of creating four County Assistance Districts to help fund law enforcement services during a called meeting last Thursday, November 16.
Bob Bass of the Allison, Bass, & Magee law firm from Austin fielded questions about how such districts work and the steps involved in creating and funding the entities.

Representing the county at the meeting were Judge John Howard, Sheriff Butch Blackburn, Clerk Vicky Tunnell, Sharon Braddock, and Commissioners Mark White, Daniel Ford, and Dan Sawyer. Clarendon City Administrator Brian Barboza, Howardwick Alderman Johnny Floyd, and Howardwick City Secretary Sandra Childress also attended along with former Clarendon administrator David Dockery.

Bass said the creation of the districts would generate revenue for law enforcement that comes “mostly off the highway” from sales at gas stations and convenience stores by collecting sales taxes throughout the county.

Currently there is no sales tax collected in the unincorporated areas of the county. Clarendon has a 2.0 percent sales tax rate, Howardwick collects 1.25 percent, and Hedley collects 1.0 percent. Under state law, local sales taxes cannot exceed 2.0 percent.

Under the proposal a 2.0 percent sales tax would be imposed on the unincorporated areas of the county, Howardwick would be asked to allow an additional 0.75 percent sales tax to be collected in that city, Hedley would be asked to allow another 1.0 percent; and Clarendon would be asked to give-up 0.625 percent (five eighths of one percent) of the rate collected for its general revenue and allow that amount to re-imposed in the city by a new district.

There would be a total of four county assistance districts – one in each city and one covering the unincorporated areas of the county. The districts could be governed by elected boards, Bass said, but it is more common and cost-effective to allow the commissioners’ court to serve as the board of each district. The commissioners would then oversee the funds raised by the district, with the primary intent to be to fund the jail and law enforcement.

“We would have to give notice to the cities of our intent to pursue this,” Bass told commissioners, “and then they would give us notice of their desire to participate,”

The cities wishing to participate would then put the issue on their May ballots, and the county would put the creation of a district for the unincorporated areas on a ballot in May also.

The county assistance district idea came up earlier this year when the City of Clarendon sought to reduce funding it pays by contract to the Donley County Sheriff’s Office. The city has contracted with the county for law enforcement since 1981. The city’s previous contract with the county expired at the end of September and had been a three-year agreement with a built-in percentage increase each year. If the agreement had been renewed, the city would be obligated to about $170,000 in this fiscal year.

County officials say the cost of employing two deputies is about $180,000, and those two positions are the difference in having 24-hour police coverage. The entire budget for the sheriff’s office in the current budget is $442,658 and the jail is an additional $373,144.

Judge Howard and Sheriff Blackburn said Thursday the county had agreed to reduce the city’s obligation to $140,000 for a one-year contract with the understanding that the city would put the county assistance district on the ballot, but the city council rejected the new contract when it included language about putting the issue on the ballot and specifically when it mentioned the 0.625 percent sales tax.

Bass said his firm has helped with the creation of several county assistance districts, but he said asking cities to give up their revenue is difficult.

“We’ve rarely gotten a city to forego a portion of their sales tax,” Bass said. “Cities are reluctant to give up their revenue stream.”

Sales tax revenues have historically gone up over time, which make county assistance districts appealing as funding streams for law enforcement, but it also means cities don’t know exactly how much they are giving up over time.

Former city administrator David Dockery noted that Clarendon’s sales tax collection with a 2.0 percent rate grew from about $230,000 in 2015 to about $500,000 in the last fiscal year.

The 0.625 percent rate the city would be asked to cede to a new district is estimated to be what would have generated $140,000 in the last fiscal year, Bass said. The 2.0 percent rate that would be sought for the unincorporated areas is expected to generate about $30,000, and Bass said the projected revenues from Hedley and Howardwick “could not be calculated.”

The comptroller reported in February that Howardwick’s 1.25 percent sales tax generated $3,3355.04 for calendar year 2022. Hedley’s 1.0 percent sales tax brought in $2,142.63 for the same period.

Bass said if one city does not agree to the county assistance district plan, it could possibly cause the entire plan to fail.

County officials say Clarendon can choose to continue with an annual contract each year instead of creating a new district, but they can’t continue to provide the same level of service for less than about $180,000. Other municipalities can also contract with the sheriff’s office. Cities can also choose to fund their own law enforcement agencies, but that option would be more costly than contracting with the county and would open the cities up to new areas of liability.

If the county assistance districts were approved and revenues exceeded what was needed to supplement the sheriff’s office and jail, they funds could be used for fire protection, emergency medical services, emergency management, maintenance of roads, economic development, tourism promotion, libraries, parks, museums, and other things. All of which cities can do with sales tax revenues.

Bass said the county is under no obligation to provide law enforcement for cities without an agreement to do so, and Howard said the assistance districts would have everyone in the county paying the same rate of sales tax and provide a steady revenue stream for the county sheriff’s office, which would still also be supported with ad valorem taxes from the county as well.

County officials will plan informational meetings for each proposed district, and Judge Howard anticipates the county will likely meet before its next regular meeting to give notice to the cities of its desire to pursue the districts.