08/07/2025
I fed A.I. the financial records of Rockdale County thru 2023 (the last report available online). It's a bit of a mixed bag.
Note: This doesn't account for any Judicial/Admin complex debt.
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Rockdale County's finances present a mixed picture, showing areas of strength and prudent management alongside several significant "red flags" that warrant concern and closer scrutiny.
Here's a breakdown of the county's financial health:
**Areas Indicating Good Financial Shape:**
* **Strong General Fund Balance:** Rockdale County has consistently maintained a healthy General Fund balance that exceeds its policy target.
* As of December 31, 2023, the General Fund balance was **$52,532,053, representing 54.08% of total General Fund expenditures**, which is well above the County's minimum policy target of 35% of the subsequent year’s budgeted expenditures.
* This positive trend is consistent, with balances of 50.74% in 2022 and 44.56% in 2021, showing conservative budgeting has enabled adherence to this policy. This provides a strong buffer against unforeseen cash flow shortfalls and a commitment to budget stabilization.
* **Increasing Overall Net Position:** The County's total net position has shown a consistent increase over the past several years, indicating an overall improvement in its financial position.
* Total net position increased by **$23,853,461 in 2023** to reach $498,567,483.
* This followed an increase of $32,223,123 in 2022 to $474,567,803, and $14,552,406 in 2021 to $445,243,003.
* **Prudent Debt Management and Strong Credit Ratings:** The County has no general obligation bonds outstanding, meaning its debt is not backed by the general taxing power but by specified revenues of proprietary (enterprise) funds.
* Total bonded debt outstanding decreased in 2023 to $62,729,539 due to scheduled debt service payments, a positive trend indicating effective management of existing obligations.
* Rockdale County holds strong credit ratings of **"Aa2" and "Aa3" from Moody’s** for its revenue bonds and certificates of participation, respectively. These are high ratings, reflecting confidence in the County's ability to meet its debt obligations. The County also operates well within its state-mandated general obligation debt limit.
* **Favorable Economic Environment:** Local indicators point to continued stability, with a well-balanced economy including retail trade, manufacturing, healthcare, and social assistance. Sales tax collections have generally increased, indicating economic activity.
* **Unmodified Audit Opinions and Adequate Internal Controls:** Independent auditors have issued unmodified opinions on the County's financial statements for the years reviewed (2019, 2021, 2022, and 2023), indicating that the financial statements are presented fairly in all material respects in accordance with GAAP. Management also asserts that adequate internal control structures are in place to safeguard assets and ensure proper financial transaction recording.
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**Red Flags and Areas of Concern (Reasons to be Worried):**
* **Persistent Negative Unrestricted Net Position in Governmental Activities:** This is a key structural concern. While the overall net position is positive, the **unrestricted portion attributable to governmental activities shows a significant deficit of $48,437,238 at the close of 2023**. This deficit, though slightly reduced from $50,863,728 in 2022 and $51,660,390 in 2021, indicates a long-term imbalance where past expenditures, often related to long-term liabilities like pensions and OPEB that are not matched by unrestricted assets or capital assets, have consumed more unrestricted governmental net assets than they have accumulated. This may signal that without careful management, it could eventually impact the County's ability to fund future governmental services from its discretionary resources.
* **Underfunded Pension Plan with Declining Funded Ratio:** The County's net pension liability was substantial at **$43,069,449 as of December 31, 2022**. More critically, the pension plan's fiduciary net position as a percentage of total pension liability has shown a concerning **declining trend from 83.6% in 2015 to 63.8% in 2023**. This worsening funded ratio means the plan has fewer assets relative to its obligations over time, which will likely require increasing future contributions from the General Fund to cover benefit payments.
* **Unfunded Other Post-Employment Benefits (OPEB) Liability:** The County reported a total OPEB liability of **$73,530,778 as of December 31, 2019**. A major red flag is the explicit statement that **"No assets are accumulated in a trust" for the OPEB plan**. This indicates a pay-as-you-go approach, where future OPEB obligations are not pre-funded, creating a significant and growing future financial burden on the County, primarily expected to be paid from the General Fund. The recognition of net deferred outflows related to OPEB as negative amounts in future pension expenses highlights the expected ongoing costs.
* **Custodial Credit Risk for Investments:** Rockdale County **lacks a specific deposit policy addressing custodial credit risk**.
* As of December 31, 2023, a significant portion of the County's bank balance ($122,007,287) was collateralized by securities held by the pledging financial institution's trust department or agent, *not* by the County itself.
* Furthermore, **all $4,463,548 of the repurchase agreements investment in 2023 carries custodial credit risk exposure** because the underlying securities are uninsured, unregistered, and held by the County’s brokerage firm, which is also the counterparty. This direct exposure represents a vulnerability if the counterparty were to fail.
* **Discrepancy in 2025 Budgeted SPLOST Revenue:** The 2023 Annual Report indicates that the "2023 Sales Tax Capital Projects Fund" (also referred to as SPLOST 2022 in other documents) is a 1% SPLOST tax that "remains in place for a period of six (6) years" from April 1, 2023. Actual 2023 revenue for this fund was $18,285,419. However, the **2025 Budget Book shows a budgeted revenue of only $110,000 for FY2025 for "SPLOST 2022"**. This drastic reduction from prior actuals to the budgeted amount for a multi-year capital projects tax requires a clear explanation and, if not justified, indicates a significant funding gap for future capital projects that were expected to be financed by this revenue stream.
* **Consistent Operating Deficit in Internal Service Fund:** The Fleet Vehicle Maintenance Fund, an internal service fund, has consistently shown **expenses exceeding its revenues** from FY2021 through FY2023 actuals, and is budgeted to continue this trend in FY2025. For instance, in FY2025, approved expenses are $2,290,044 while revenues are budgeted at $1,386,038, resulting in a deficit of over $900,000. Internal service funds are generally intended to be self-sustaining; a persistent and increasing operating deficit suggests inadequate cost recovery from user departments, which could ultimately require subsidies from the General Fund, straining its resources.
* **Reported Economic Loss from Debt Refunding:** In April 2017, the County engaged in an Installment Sales Agreement for debt refunding that resulted in an **economic loss of $133,265**. This means the present value of the new debt service payments was higher than the debt being refunded, indicating an unfavorable refinancing outcome.
* **Questionable Reporting of Landfill Post-Closure Cost:** The 2023 Annual Report states that the County's estimated portion of the landfill post-closure cost liability is "**$-**" for 2023. This is a sharp contrast to the reported liability of $70,000 in 2022 and $280,000 in 2019. While the 2023 report notes that "post-closure costs have been paid in prior years," the complete elimination of the *estimated liability for the current year* (2023) without explicit, detailed explanation of how a long-term, 30-year post-closure obligation (from a landfill closed in 1993) suddenly became zero is highly unusual and could signify a reporting anomaly or an unclarified shift in responsibility.
* **Pattern of CFO/Finance Director Turnover:** The 2023 Annual Report is signed by Michelle Irizarry as Chief Financial Officer, dated September 27, 2024. However, a job posting for a Chief Financial Officer/Finance Director for Rockdale County was active on the GFOA Job Board in May 2025. Reviewing previous reports, the 2022 ACFR was signed by an "Interim Chief Financial Officer" (June 2023), and the 2021 and 2019 ACFRs by "Roselyn Miller, Finance Director" (August 2022 and June 2020, respectively). This pattern of frequent changes in the top financial leadership position may indicate underlying instability, challenges, or difficulty in retaining qualified personnel in this critical role.
In conclusion, while Rockdale County demonstrates fiscal responsibility through its healthy General Fund balance, sound debt management, and a generally stable economic environment, the persistent negative unrestricted net position in governmental activities, the underfunded and declining funded ratio of its pension plan, the entirely unfunded OPEB liability, and the concerning custodial credit risk for investments point to significant long-term financial challenges. The discrepancy in future SPLOST revenue budgeting and the consistent operating deficit in the Fleet Vehicle Maintenance Fund also highlight operational and planning issues. Finally, the observed turnover in the CFO/Finance Director role could suggest a lack of continuity or underlying organizational difficulties within the County's financial management. Therefore, while there are many positives, the existence of these "red flags" suggests that continued vigilance and proactive measures are essential to ensure the county's long-term financial health.
