ESD Accountability

"There is no greater violation of the public trust than mismanagement of taxpayer funds."

That's how I opened my remarks to the Johnson County Commissioners Court yesterday morning at their meeting.  The mismanagement I'm referring to is by the Johnson County Emergency Services District (ESD).  You can read more information on what the ESD does in my first post on the subject from August 2009 shortly after taking office when I first learned of the inequality the City of Joshua faces each year in our contract with the ESD.

In January of this year the council held a special work session and invited ESD Director Joey Reed to speak on the ESD's plans and the issue we have with the lack of funding provided to our city.  My post after that meeting goes into more detail, but the key comment from Mr. Reed that evening was that perhaps Joshua needed to look more closely at how we spend our fire department money instead of trying to get more money from the ESD.  Oh how things can turn.

Chapter 775 of the Texas Health & Safety Code is the state law under which the ESD was formed and is governed. It's quite an interesting read if you're so inclined to look into whether or not an entity with the power to tax is keeping up with its obligations under the law.  Chapter 775.083 Requires that the ESD report annually to the Texas Office of Rural Community Affairs with basic contact information for the ESD along with their current tax rate and budget. As of last week the ESD has not reported on the last several years.  The information that is online for previous years does not appear to be accurate either since it shows the same budget amount every year.  At the time Mr. Reed sat before our council his organization was already several weeks behind in one of their requirements.  I wonder if he knew he was one week away from missing another.

Chapter 775.036 of the Texas Health & Safety Code requires that the ESD file with the commissioners court no later than February 1st each year a report concerning the financial well-being of the ESD for the preceding year. That date came and went.

In early spring of this year the ESD announced plans to seek a tax increase from the Johnson County voters in the May election.  Not just any tax increase, but a 100% tax increase from the current $.03 per $100 valuation to $.06.  I wrote a blog post on that subject in April of this year to help educate voters more on the dealings of the ESD and then a second post in May to combat some inaccurate information that came out in the Cleburne Times-Review by an area fire chief. At that point the ESD was several months behind in filing under the 775.036 requirement and the 775.083 requirement, but wait there's more.

At the time I didn't know it yet, but a couple weeks after the election in which an overwhelming majority of voters approved the ESD tax increase they missed another deadline.  The most serious one in my opinion.

 Chapter 775.082 Requires that an annual audit be filed with the commissioners court no later than June 1st. The ESD failed to do this as well. An open records request filed by city of Joshua staff on August 10th for the most recent fiscal year audit has gone unanswered as of today. State law allows 10 business days to produce requested documents, state that they are unavailable or file for an opinion with the state attorney general to not provide the documents so the ESD has until the end of business today to respond, but any taxpayer would expect such a basic and vital document as an annual audit be readily available very quickly if it were available at all. We've been told the audit is either underway or is complete, but not yet received from the auditor, but no evidence has been shown to support either claim as of yet. This is unacceptable.

The commissioners court has sent a letter to the ESD now demanding the audit by September 1st, three months past due, or they will order an independent audit themselves.  So how do you feel about a taxing entity that has not met any of their filing deadlines under the law in which they were created now getting double the money you gave them last year?  Before you answer read on.

As the City of Joshua staff and city council began finalizing our own budget we needed the proposed amount the ESD would provide us in our 2010-2011 contract for emergency services.  Since this is budget preparation month for most government entities in the state it was not out of the ordinary to expect the figures, but the ESD delayed.  After several requests it was revealed that the ESD is having difficulty in reconciling revenues and expenditures for the current fiscal year! For an entity that just a few months ago asked of and received from the voters of Johnson County a 100% tax increase it is especially alarming to find that they are not quite sure where all their money is being spent.

So Mr. Reed sat before the Joshua City Council in January already derelict in his duties, suggested we manage our money better, went on to lead the charge to double the tax rate while failing to report his organizations financial status and now we find out they don't know where the money has been spent.  Did I mention his employment contract is up for renewal this month?

I don't want to leave this entirely on Mr. Reed's shoulders.  There's obviously one or more incompetent staff members involved and a board of directors who have either not paid attention to the financials or not received financials and not cared to ask why.

The Johnson County ESD is a perfect example of why government in general has such a dismal approval rating by the people of our nation.

If you'd like more information about the ESD or would like to contact them about these issues their web address is http://www.johnsoncountyfire.org/.   I also recommend contacting your county commissioner to make sure your voice is heard.  As always I'm happy to discuss the issues as well.

A.J.

A Correction and Continuation of this subject was added 8/26/10.