The shortest version of how we anticipate funding our long-neglected capital investments into our facilities and roadway maintenance equipment

I began attending Presidio County Commissioners Court meetings in 2012 when I was still a member of Marfa City Council. Initially I had intended to go to these meetings in order to understand why it seemed like the City and County were always at odds with regard to our interlocal cooperation agreements (I soon learned it was primarily due to a lack of communication).

At that time the maximum total tax collections increase the County could have each year without triggering a rollback election threat was 8%. It is now 3.5% in a time when inflation is higher than at least 5% in real experienced costs to the County. Commissioners Courts from when I started attending meetings to now have generally been working hard to minimize any debt and conserve cash resources. It’s not easy, but thankfully those efforts have been mostly successful. The only bad thing about this very conservative approach, in my mind, is that difficult decisions about major capital investments in our existing infrastructure (buildings, heavy machinery and equipment, upgrades to mechanical systems) have been put off or done on the cheap.

Since before I took office as Justice of the Peace in January of 2015 there have been known major issues with the jail roof, the HVAC and elevator in the courthouse, mold and leaking in the County Annex building, and a lack of maintenance and direction with regard to what to do with the Agriculture Barn and the Old Jail buildings. County Road and Bridge equipment has been upgraded on an emergency basis only and much of what we have is beyond its usable life but for the hard work of our employees keeping things functioning at a basic level of operation.

Now that we collect fewer dollars per year (in adjusted dollar value after inflation is factored in) how do we pay for upgrades to our working capital (buildings, equipment) without bankrupting ourselves?

The County has fairly significant cash balance savings that until recently we have not invested in order to receive a return. This year that changed and now we are making around 4.2% on our savings of around $4 million. The State requires us to invest only in ultra safe assets with firms that provide a 24 hour liquidity provision in case we need to withdraw funds in an emergency situation.

But that’s not where the money comes from to do these needed projects.

Texas local government tax rate law is exceedingly complex (by design) and attempting to explain the two sides of tax rate calculation (maintenance and operation vs. interest and sinking) is not a task I’m up to. But the bottom line is that Presidio County utilizes all of our Maintenance and Operation tax capacity while using very little of our Long-term debt issuance, aka Interest and Sinking capacity since we have very little debt. Thanks to our cash savings and our frugal history with regard to debt, we are able to issue debt in the governmental bond markets at a competitive rate. This type of debt is supposed to be used for long-term capital outlay, not recurring operational expenses. That’s exactly what we plan to use it for, and the backing of our reserve cash acts as the backstop to potential default as long as we are prudent in our spending for the long-term.

So we’re looking at different borrowing scenarios- between the $3 to $5 million range to tackle a laundry list of deferred capital investment- mostly what I’ve referred to above. Honestly, I think those basics will eat up all of whatever we decide to borrow. That’s how far behind we are in investing in our own infrastructure as a County. But the goal is to make the County more functional to the constituents, more efficient in our systems and a far better place to work for all our employees.

Thanks for reading!

David Beebe