Travis County Commssioners Court
January 21, 2003
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Item 13
13 is to consider and take appropriate action on claims and funding -- --
>> in the fy '03 buet that you adopted beginning October 1st, you approved a list of projects to be funded from both short-term and long-term, five-year, 20-year, certificates of obligation, along with projects to be funded out of order approved bonds. You have not issued that debt yet. You need to come to a conclusion on how much debt to issue. It would appear, based on what we know as of right now, that it would not seem to be any indications of changing the amounts of voter approved bonds to be issued in '03 and in essence continues the path that tnr has laid out to execute for the voters, and this would take that next bite of $32 million towards implementing the full 185 185 million that was approved. On the other hand, with respect to co's, there appear to be two opposite notions of -- or proposals for changing the amount. On the one hand the resources necessary to construct the precinct 4 office building totaled $1.4 million less than wt was originally expected. So all other things being equal, you would say we do not need to borrow that $1.4 million and reduce the 17.1 by that amount. That's one track. The other track is that the commissioners court gave directions to facilities management to explore the feasibility, appropriateness and specifics of acquiring one way or the other a building to house the election and records division of the county clerk and perhaps a site for the tax assessor collector as well. Roger corey and his staff have been pursuing that direction and have identified anywhere from 3.3 to $5.2 million in addition to spend for that project. And I'm sure that roger is available to brief you if you wish on that. But with respect to the timing, there is no need to land today on this question. I think one of our thoughts was perhaps to lay it out there for you. There is a list of projects attached to your backup. You could at the one extreme ask for rejustification of the entire $17 million, which was reviewed in some detail during the budget process or you can look at this incrementally, that's your choice. You could look at the rejustification of the $36 million of voter approved bonds as well, which is your choice. Commissioner Davis asked a question last week about, well, what kind of debt service implications are we talking about? And in shorthand -- and that information is shared with you in a letter dated Friday the 17th. In shorthand, if you reduced your short-term debt by a million dollars, your debt service would drop by about 250,000. And I should know your first year's debt service is always higher than subsequent because you're picking up the interest between the time that you issue and the end of the fiscal year. If you dropped a million dollars' worth of 20-year debt, then you would save about $130,000. So it's 130 and 250 depending upon how you want to move. If you want to reduce your debt if it's short-term, it would drop by 250, and if it's long-term it would drop by 130.
>> christian, the real question really centers around the 1.4 million related to the precinct 4 office building, is that really what it boils down to?
>> from all that we can gather, that's what it boils down to.
>> while we do have, and thank you, roger, for that coming in at 1.4 under, the reality is we don't have bids in on the west world precinct 3 buildings, nor do we have bids in on the north rural community center and clinics, so we don't know if those are right sized or not, correct?
>> well, I would have to answer -- I would have to defer to roger and say how accurate he believes his budget is.
>> we hope they are, but we don't have those numbers in. And we don't know what you need to do or not do related to the clerk, her space, etcetera, etcetera. Is it not accurate that that 1.4 million is not put down as county office space or how is that put in the bond documents in terms of what it is that we are borrowing that money for?
>> ohe top of my head I believe it says something to the effect of improvements to county administrative buildings, etcetera, I believe.
>> to me it seems we ought to just keep the number where it is because of the great unknowns related to two very large projects that are still out there. While I hope these numbers are beyond accurate or even less, they perhaps may not be. But if we have an opportunity, which is really where I hope it goes, with the clerk, tax collector or any other variety of folks, that 1.4 million could be a down payment that could be structured so that by the time we get to the rest of our budget process for next year, we could pick up the balance of it and we could wind up locking in to a deal that may be had out there because real estate prices being what they are, if we don't need it, we could reduce our co for next year.
>> I think it would behoove you to only borrow what you need, and if you don't need it, don't borrow it. The other hand, if you need it, borrow it.
>> I don't know if we need it or not. Because while there have been savings -- and thank you -- on one project, we have a whole bunch of other things that are in that exact same category that have not come in yet. And we do not know if those numbers are right on tart get, under or over.
>> could I also add that the $1.4 million' worth of savings is --
>> essentially less.
>> that may be so, but --
>> the monies for --
>> right. Only 677,000, however, are in this issue. The remainder of the savings are actually found in last year's co's, just to make that comment.
>> I'm sorry.
>> in last year's co's, we issued money for precinct 4 last year as well to start the project, and the only thing that we would be issuing for next year with 677,000. So the remainder of the savings of that 1.4, net of that is in last year's co's and it's already been issued.
>> so it's cash in hand. So we spent a little bit of it for furniture, fixtures?
>> I thought the 1.4 was net of that. , but I could be mistaken.
>> the 1.4 is exclusive of the ff and e. We asked for about $160,000.
>> as I review this information this week in preparation for action next Tuesday, may I rest assure that this is all the items that we know of at this time? Unfunded growth road projects. I think if we could have another week to go over this, if there's no rush on it. If this is at the end of March, we ought to take action this week or next week.
>> so you could delay it by February fourth and still get the money by March. From what we can gather -- you may be able to get briefing about the status of the election and tax assessor building in that period of time, so you're more comfortable with the options.
>> okay.
>> so that project is a source of the money. We really don't need it for building because the funds are paid in full. But the cash we have on hand, plus this would be that net 1.4 savings, and the question is what do we do if it if anything.
>> so this is addressed in the budget cycle and agreed to fund through coo's?
>> correct.
>> okay.
>> let me make sure I understand this as far as when you have the voter approved bonds that we have that we have not issued, but may be issuing, of course the co's that we're looking at right now and that's why I asked you for the information as far as the debt service on these particular bonds, I guess if you total them up it's for 180. How much is that, 17 and -- 35? 53. At any rate, looking at that, what I'm trying to figure out is if we prioritize and go according to what we want to do -- and we don't what court is going to do on this. If they were issuing bonds some time this year in '03, anythinghat required debt service would be applicable to the bonds for this year?
>> '04.
>> '04, that's what I'm trying to tie down.
>> the beginning of the fiscal year. You would have the budget, the full amount of the debt service for all the voter approved bonds and all those certificates of obligation. And the issuance would not be sometime this year, the isce would be in early March and must not would be received at the end of March.
>> at the end of March.
>> and the debt service is for the budget of '04?
>> that's correct. And I guess all of these things, I don't know how we're going to land on this. I do know that if we're going to start prioritizing some stuff, we may need to look at what the voters have asked us to look at first. And I still wouldn't know exactly -- I got a breakdown as to $10 million of bonds that are issued as the debt service to that. I'm looking at that now and of course it will be calculated within everything else as far as the next fiscal year is concerned. So I just want to make everyone aware of that.
>> so you do or do not want to-
>> I'm talking to christian right now.
>> I'm asking a question.
>> I don't have to answer your question, commissioner. I am just -- I have just as much right, equal rights to you as a commissioner. I don't have to answer you at all. Now, I guess, christian, what I'm trying to understand here is I'm looking at this and I'm just trying to equate in my mind exactly what the impact is going to be if I total all of these and if we issue all of them, maybe not. I don't know, but I still want to know what that impact is and I need a total. In other words, all of it, a portion of it, a percentage of it. I don't know. But I need the answer.
>> I can give it to you now.
>> don't give it to me now. Let me rap a little bit for a little while, okay? So we've got a wee that that would give me enough time to lock down or look at this the way we want to deal with it and how we would approach it as far as debt service and what we can look at as far as the next tax year.
>> the answer to your question is contained in my January 17th memo.
>> in terms of a message to the central Texas voters, related to the precinct 2 projects, I'm not interested in delaying any of the precinct 2 it projects. They were billed to voters, they expect them to get done. Now, if any other commissioner wants to delay their precinct projects, I am happy to consider that, but if people are asking what the priorities are, the voters have already said get these projects done, get them done within a certain time frame. We've already issued r.f.p.'s. Many of these projects are moving forward. The public has expectations. But I would certainly respect it if any commissioner would like to delay their bond projects, but in terms of the voters of precinct 2, they've made it pretty clear, get them done and get them done sooner and not later.
>> since I didn't have any, could I get some on this list? [ laughter ]
>> I would like to have roger come up and answer a question that you would call him up for and we thought we weren't going to have to ask him, but I am interested in the question that you were talking about, where we think we're going with building, I mean, costs and things like that.
>> it's in your project. We're dealing with the lovely city of Austin.
>> on the permitting side?
>> yeah. I'm dealing with Pflugerville. I think I know what mine's going to cost.
>> yes, sir. The question I think was what do you think with regards to anticipation of what's happening with prices and given that we were 1.4 million under the precinct 4 clinic and the building out there, community center, whatever it's called, do you have any reason to doubt that the numbers are going to hold pretty economical as far as what we're getting bid wise and things of this nature. For example, once we go out to the southwest rural clinic.
>> okay. I think our numbers are reasonable and always there's a market factor there. And at this time the marketer factor is on the onerous side and therefore there's some condition that might drive the project to be a little bit more than what is budgeted for, but so far I think we are in good shape as far as our projects are concerned.
>> roger, what did you find that was so remarkably under on the one southeast. I mean, what really surprised you the most, I mean, given that we were 1.4 under the guesstimation.
>> the main thing is the big surprise was the market. You know, that's the biggest surprise. I mean, the architect did an excellent job in making the project under budget and all, and the -- our project management team made sure that the management of those requirements are under budget. And it helps us a lot right there on not asking for -- asking for what they need. And the market help us a lot, so our project did come under budget, but it's not normally. It's kind of like it's --
>> what year did you do those projections for this building, this southeast? Was it 2000, was it '99? When did you start putting your numbers together for --
>> for the precinct 4?
>> yes.
>> for precinct 4 we put it in 2001.
>> so that's when you actually literally did the projection was in 2001?
>> that's correct. And we did the projection based on land, based on the architect, engineering services and based on the construction and also when we look at the projection we look also about the location and if it's two-story, three-story or only one-story and the footprint of the buildings. All these things combine to come up with a realistic projection.
>> commissioner Sonleitner, I think that's a good -- and I am in full agreement with you that whatever the voters said that I think you ought to do it. It's a great buyer's market today and so -- and I think that we're going to find that for at least probably the next year and a half, but I would fully agree with you in going forward with this.
>> the market does not change overnight. In the scrubs business it construction business it takes some time for the market to flip around. The market is on our side. We can get the markets on the straight, the better season we'll have.
>> the closer we are in terms of the estimate as to what those costs are to win actually, the closer those things are, we got killed the other way around when an estimate was made back in '93 and '94 for projects that didn't go out to bid until '98 and '99. It did not work out too well then and it was a huge market bonus that had to be paid. . So I just hope we can get to your process so I can actually get yours under contract. But yours is probably a longer lead time than what we're dealing with out in Pflugerville, which we're working through all our issues and hopefully getting something out of it shortly.
>> I think that big bust down there is the fourth and congress building. As soon as they walk off that building, those guys will get a contract there. There's a lot of guys working down there.
>> thank you.
Last Modified: Wednesday, April 2, 2003 10:25 AM