Please note: All agenda items are considered PASSED unless indicated otherwise.

OPEN SESSION:

PRESENTATION

1. Receive and discuss the follow-up FY2027 Baseline Budget Presentation, including findings regarding budget to actual variances, a summarized list of funding requests, and proposed next steps in the budget process.

Comments:

I’m encouraged by the detailed work Auditor Tim Hollis put into this follow-up presentation. We dug deeper into the numbers, and it’s clear we’re making progress on understanding where our fund balance has been growing and how to manage it more responsibly.

Key Highlights from the Baseline Budget Presentation:

• The net change in fund balance shows a projected $400,000 deficit due to adding contractually obligated public service agencies.
• Overall revenue is projected up about 3.33%, with property taxes still the largest source and sales tax (around 25%) expected to come in stronger than initially forecasted
• Administrative costs are up 8.16%, largely from new courthouse utilities/maintenance and some software license shifts from IT—not true growth.

What concerns me is that we’re seeing these increases without clear upfront planning for the full ongoing costs of operating the new courthouse. We’re talking increased staffing needs, a half million dollars or more in additional electricity costs and maintaining a 268,000 square foot facility that sees heavy public traffic. These are real, recurring burdens on taxpayers that should have been better anticipated and budgeted for from the start. We can’t keep kicking these long-term costs like these down the road.

We also don’t have a dedicated fleet manager—each department tracks its own vehicles and makes replacement requests. This ad-hoc approach makes it harder to plan replacements efficiently or control costs. 

Similarly, we don’t have a centralized contract manager. Department heads handle contracts, which sometimes expire before renewal and don’t always get shopped or negotiated aggressively. 

We wouldn’t run our own home business that way—why do we continue to handle the people’s business like this? These are exactly the kinds of common-sense improvements we need to better protect taxpayers.

• Public safety/law enforcement baseline shows a modest 2.39% increase. However, this reflects a reallocation of courthouse security salaries previously included in the Sheriff’s Office budget into a newly formed Judicial Services department. When viewed collectively—including the Sheriff’s Office, Judicial Services, Environmental Crimes, Dispatch and Jail Operations under the Sheriff’s authority—the true scope and impact of these operations must be considered together for an accurate picture.
• Road & Bridge is planning to intentionally spend down its fund balance on projects. In plain speak, this means they are using reserves (unspent funds from prior years that have accumulated like a savings or rainy day account) to buy capital equipment and fund other projects—around $7 million or more this year based on the presentation. This results in a deficit budget for the fund this year.

We discussed salary lag in detail—the money left over from vacancies that inflates our fund balance and pulls usable funds out of circulation. From 2020–2025 alone, over $10 million has dumped into reserves due to unfilled positions. At roughly $75,000 per patrol deputy (including benefits), that’s the equivalent of well over 130 additional deputies we could have had on our streets protecting our families. This is shocking waste. 

We NEED a strong vacancy policy with clear time limits—positions that stay unfilled too long should be reviewed and potentially removed so the money doesn’t just sit there unused. I appreciate the focus on quarterly reviews, better policy for long-term vacancies, and tools to reallocate those funds responsibly toward capital needs without creating new recurring costs. I’m glad we’re treating the budget as a continuous process rather than a one-time event. Taxpayers deserve that kind of accountability.

Summarized Next Steps from the Budget Discussion:

• Auditor Tim Hollis to resubmit an updated version of the funding requests presentation.
• Auditor Tim Hollis to provide recommendations on budget adjustments based on trends.
• HR Director Esmerelda Corona (with support from Auditor Tim Hollis) to conduct/lead data analysis on the cost of employee turnover.
• Auditor Tim Hollis to provide a list distinguishing one-time vs. recurring capital expenses.
• Implement quarterly budget variance evaluations for timely reallocation of surplus funds.
• HR Director Esmerelda Corona and Auditor Tim Hollis to develop a policy for managing long-term vacant positions.
• HR Director Esmerelda Corona to work with Tim Hollis to finalize salary study numbers and clarify desired comparisons.
• Consider a phased-in plan to adjust county employee salaries based on the study findings.
• Develop a policy and plan for a dedicated fleet fund to manage vehicle replacements.

Citizens, this is the most important time to pay attention to Commissioners Court. The decisions we make now on the FY27 budget will directly hit your wallet in the coming months through taxes, fees, and services. You can’t do anything about what you don’t know—and right now, the foundation is being laid for how your hard-earned money will be spent (or wasted). Stay engaged, ask questions, show up, and hold us accountable. Citizen oversight is the only thing that keeps government from growing out of control.

COURT ORDERS

COMMISSIONERS COURT

2. Consider and take necessary action regarding the Annual Review of Smith County Tax Abatement Agreements and authorize the continuation of all active tax abatement agreements for projects determined to be in compliance with their respective performance commitments.

Comments:

TEDC’s Scott Martinez presented the annual review of our active tax abatement agreements. I thanked him for the work the Tyler Economic Development Council does bringing jobs and investment to our area. At the same time, I have a responsibility to the taxpayers who are already here paying their full property taxes.

These abatements mean we forgo millions in revenue while the companies and their workers still use our roads, call for sheriff’s deputies, and need other county services. I asked questions so the public could understand the real return versus what we’re giving up—specifically around job shortfalls (like Sanderson Hatchery being short on promised jobs), the $4.9 million in deferred taxes, extra service costs, where workers actually live and spend their money, wage levels, and enforcement when targets aren’t fully met.

The Smith County Tax Abatement Committee recommended continuing the compliant agreements, and the Court approved it. I supported moving forward but I do want to stress the need for clearer net impact information in future reviews so taxpayers can see the full picture—not just gross jobs and investment numbers. We must keep a close eye on these deals to make sure Smith County taxpayers aren’t shouldering more burden than benefit.

3. Receive an Order of Appointment of the Smith County Auditor and set a base salary pursuant to the Smith County District Judges’ Order, dated June 26, 2026, in accordance with Section 84.003 of the Texas Local Government Code.

4. Consider and take necessary action to ratify a two-year bond for the Smith County Auditor pursuant to Section 84.007 effective July 1, 2026, and authorize the county judge to sign all related documentation.

Comments:

We welcomed Timothy Hollis as our new County Auditor. Congratulations, Mr. Hollis—I appreciate your background and look forward to strong fiscal oversight.

ROAD AND BRIDGE

5. Consider and take necessary action to approve an interlocal agreement between Smith County and the City of Arp for Road & Bridge Services and authorize the county judge to sign all related documentation.

Comments:

This agreement lets us handle road improvements on North Main Street in Arp, with the city reimbursing materials. Smart partnership that keeps costs down for everyone.

6. Consider and take necessary action to approve a Sanitary Control Easement with the Pine Trails Shore Public Water System for the construction of a new water well on CR 1178 and authorize the county judge to sign all related documentation.

AUDITOR’S OFFICE

7. Consider and take necessary action to approve the Capital Improvement Project for the new accounting system, PaymentWorks Inc. from Carahsoft Technology Corp. as approved in the FY26 and FY27 CIP Budgets.

Comments:

We approved moving forward with PaymentWorks to modernize vendor management and shift more toward ACH payments. This should improve efficiency and add fraud protection—important for safeguarding taxpayer dollars.

SHERIFF’S OFFICE

8. Consider and take necessary action to transfer salary lag funds for the purchase of vehicles, upfitting, and equipment needed for the FY27 budget year.

Comments:

This was a tough one. The Sheriff’s Office has vehicles with high mileage that need replacing now to keep deputies safe. Using current-year salary lag to pull some of these purchases forward makes sense in many ways and helps avoid loading more onto next year’s budget.

The Sheriff was requesting 11 vehicles: 8 PPV Tahoes & 3 Silverados for the Patrol Division.

That said, I voted no. As of the latest reports, the Sheriff’s Office budget is already significantly over on key lines the salary lag is supposed to protect: accrued leave is at 192% of budget (over by more than $115,000) and overtime is also over. The request takes 100% of the projected lag from the Sheriff’s Office and Dispatch budgets, plus a large portion from Jail—leaving very little buffer.

Salary lag has historically been a year-end safety net for operational shortfalls like utilities, meals, and inmate medical – which the previous Auditor flagged as trending hundreds of thousands over. Using it this early for capital purchases we planned for FY27 opens the door for other departments to do the same and commits us to new recurring costs (fuel, maintenance, insurance) before we’ve even built next year’s budget. The vehicles won’t even arrive for about six weeks, so there was no emergency. We haven’t finished reviewing the full FY27 picture yet.

I appreciate the discussion and the Auditor’s analysis showing some remaining buffer, but prudence with taxpayer funds required me to oppose at this time. The motion passed with one “Not at this time, No” vote from me. Taxpayers should be warned: there are likely more pressures coming in the Sheriff’s Office and Jail budgets. We need to watch closely where the money to cover any shortfalls will come from.

RECURRING BUSINESS

ROAD AND BRIDGE

9. Consider and take necessary action to authorize the county judge to sign the:

1. Re-Plat for Eastshore Estates, Unit 3, Lots 204B and 207, Precinct 2, and
   
2. Final Plat for the B. Pyron Subdivision, Precinct 1.
   

10. Receive pipe and/or utility line installation request (notice only):

1. County Road 1256 and 1294, Metronet, install underground fiber optic cable with ground boxes, Precinct 1,
   
2. County Road 140 and 139, Conterra Ultra Broadband LLC, install underground fiber optic cable with boxes and pedestals, Precinct 1,
   
3. County Road 128 and 135, Metronet, install underground fiber with road bore, ground boxes and pedestals, Precinct 2,
   
4. County Road 245 N, West Gregg Special Utility District, Road bore for service        line, Precinct 3,
   
5. County Road 434, Southwire for Oncor Electric, road bore for replacement underground electric cable, Precinct 3,
   
6. County Road 4157 and 4212, Metronet, install underground fiber optic cable with boxes and pedestals, Precinct 3,
   
7. County Road 46, Oncor Electric, aerial work on existing poles, Precinct 4, and
   
8. County Road 3151, CenterPoint Energy, install service line, Precinct 4.

AUDITOR’S OFFICE

11. Consider and take necessary action to approve and/or ratify payment of accounts, bills, payroll, transfer of funds, amendments, and health claims.

SHERIFF’S OFFICE

12. Receive report on status of Smith County jail operations, inmate population, employee overtime, and employee vacancies.

EXECUTIVE SESSION:

For purposes permitted by Texas Government Code, Chapter 551, entitled Open Meetings, Sections 55 l.071, 55 l.072, 551.073, 551.074, 551.0745, 551.075, 551.076, and 551.0761. The Commissioners Court reserves the right to exercise its discretion and may convene in executive session as authorized by the Texas Government Code, Section 551.071, et seq., on any of the items listed on its formal or briefing agendas.

SECTION 551.071 CONSULTATION WITH ATTORNEY

13. Deliberation and consultation with attorney regarding contractual compliance and claims submitted under the Smith County Health Plan.

OPEN SESSION:

COURT ORDERS

COMMISSIONERS COURT

14. Consider and take necessary action to reject all proposals received for RFP 18-26 Third Party Administrator (TPA) and ancillary services.

Comments:

We rejected all proposals for the TPA services for our employee health plan. This is an important area with rising costs—we’ll need to keep working toward the best value for employees and taxpayers.

15. Consider and take necessary action concerning the Smith County Health Plan, including but not limited to receiving the annual performance review of the Plan from Brinson Benefits and recommendations concerning related health care matters, contracts, agreements; and authorize the county judge to sign all related documentation.

Comments:

This was rescheduled for a presentation and a contract review from Brinson.

ADJOURN