Travis County Commissioners Court
August 3, 2004
Item 2
Item number 2 is to consider and take appropriate action on the following for the Travis County hospital district: a, Travis County programs and services to transfer to the hospital district. The board met yesterday and I guess the question is what do we need to do regarding Travis County programs and services. Did we give this to them last week as a draft?
>> yes. We gave them as part of the presentation a listing of the programs and services with the appropriate information on the approved budget for fy '04 and what we believe to be our best guess as to the '05 budget.
>> what else do we need to do on the programs and services today? Anything?
>> nothing that I知 aware of at this time, judge.
>> 2-b, Travis County facilities to transfer to the hospital district.
>> I believe the court has a backup that we provided. The first page of the backup is the Travis County community center and clinic comparison and it basically shows the square footage of the clinics and the community centers, and these numbers have been verified in terms of the square footage and whatnot. It's my belief and I believe mr. Collins has said to the court previously that he plans to recommend or may have already recommended to the hospital board of managers that these facilities or a decision about these facilities not be made until a determination could be made about the status of the qualified health centers. That status currently rests with the city of Austin, but extends to the county facilities. The board of managers did yesterday receive a very detailed presentation on the fqac and the issues at hand related to the designation. In addition to the potential cost benefits of continuing that designation. Based on that presentation yesterday, the board of managers was alerted to the fact that basically the federal government will not make a decision until they receive a detailed plan on what their operations will be like. So while the city has kept the federal government informed about the forming of a hospital district and what the potential impacts might be to our community, they will not make a determination about whether that status can transfer until they receive a detailed plan from the hospital district board of managers.
>> did we give the board of managers 2-b yesterday?
>> no, sir. We did not discuss the facilities with them yesterday.
>> we need to give 2-b to them then.
>> okay. There was an executive session discussion about the legal responsibilities related to the facilities, but I was not privy to that. Okay?
>> move that we give -- we make it available to the board of managers for their review, and I guess the action as they see fit. The health clinics as part of the total.
>> part of 2-b is also the equipment.
>> right. That's attached to it?
>> yes, sir. And if I could just a second, this is the equipment that exists in the clinics, in the county clinics. It has been verified with purchasing. We have actually laid hands on this equipment and reviewed the tags. And there was a concern when this information was presented to the transition committee that maybe there was not enough equipment represented based on what we know to be the size of the clinics, and the issue there is that some of the equipment belongs to the county and some of the equipment belongs to the city. So what you have represented here are items that have county asset tags on them. So this is our stuff basically.
>> you found a few more tables out at Pflugerville and I greatly appreciate it.
>> yes, we did. [ laughter ]
>> I guess we give the managers a similar list and whatever city equipment is in county facilities ought to be on that list?
>> that would be the expectations.
>> mr. Collins?
>> there are three categories of things that are at issue here, land, buildings and equipment. And with regard to the land and buildings, those do not transfer and cannot transfer from either the county or the city to the district until the district board makes a confirmation or confirms that the transfer of the land in buildings -- and buildings won't affect the fqhc status. And I can tell you I知 reasonably confident that the hospital district board does not plan to make that confirmation at this time. And as the lawyer representing you as the county is that there's no need at this point for the county to be preparing documents to title transfer -- to transfer title of the land or buildings. I feel that won't happen for some time. The equipment is a different matter, however. The equipment is not subject under the statute to the fqhc confirmation issue. It transfers upon organization of the board, which happened yesterday. So the board will be taking up that item on its agenda to accept the title transfer documents for the equipment that's on this list at its meeting tomorrow. And I anticipate that if it does not receive title transfer documents to that list, that it will be making some sort of formal request to receive those title transfer documents.
>> do we need to formally offer it up that we have scrubbed this list and it is a true and accurate representation of everything that has a county tag related to all those things?
>> I believe mr. Nuckolls may be prepared to talk to you about the title transfer document for the equipment he may have prepared, but I don't want to speak about that.
>> i've got that document prepared and i've got the list I got from purchasing as of, I guess, Friday of last week. Is that the complete list or is that as complete as we're going to get it? Okay.
>> why don't we have a specific agenda item next week in response to their action.
>> okay.
>> the other legal question is if we want their fiscal year to start October 1, would the transfer affect that in any way or not? We can get that answer next week too. I did not see this item as being basically us transferring stuff. I just thought we simply would make a list of equipment, etcetera, because I know that for them to just start thinking about it, and if by law we have to transfer it, so be it. The question is when do they want it, will it affect other things, etcetera.
>> my other just detail sort of issues -- and I know we can work these out -- is actually pulling all of our tags on and putting hospital district tags on. And what system they're going to have to track those assets since they haven't been formed yet, they don't have an administrator, they don't have software programs, so the very details will have to be worked out.
>> and I guess, jim, we just will -- my office with work with their administrator when they hire them to take care of those tasks?
>> from a practical perspective, we're taking steps in order to effect the law which is sort of one track that goes along. But whenever the title transfers, my recommendation would be that you not remove the Travis County tags until such time as the board replaces them with something to track the equipment in their own system. The fact that the tags are still on there will be a utility for tracking the equipment. It won't mean that it belongs to Travis County. It certainly will belong to the district. And if you take the tags off, then we lose all ability to actually track the equipment.
>> in a practical sense. I said at the meeting yesterday, these are nine very qualified people with a lot of ideas, and this has been complex for this government since the law passed. And they're going to need some pragmatic help in making this work and making a transition. They all have full-time jobs doing something else. This isn't their full-time job. Just the mechanics of getting an administrator, getting people to help them, figuring how how they're going to do things, they can't do that in a couple of weeks. It's unrealistic for anyone to think that they can. We're going to have to figure out how to help them become successful. I mean, there's policy issues that are just these kinds of things here. And I think that all of our meendz need to be together pragmatically of whatever it takes to help them make the right decisions so that they have time to think of those things that are important of why voters voted for a hospital district rather than have them worry about tags and systems and things like that. They just can't do that right now. All of us need to figure out how to help them do that to be successful. And y'all have a very big role in that. You know, I think one thing everyone keeps dancing around that, and that is there isn't enough money for them to do any of the kind of things that they would like to do. The information that they got and was sold to the public was just simply not accurate. And it became painfully apparent to them yesterday. And so I think one of the challenges is for them to keep this system afloat while having the opportunity to do some of the creative, nice things they would like to do for indigent health care in this community is going to really be difficult for them. And what we --
>> I don't know that anybody expected them to change the world overnight.
>> they can't. Yeah, they can't.
>> it seems to me that this district was created and will exist --
>> it will take some time.
>> the other important matter about equipment is that at some point they have to figure out what their situation is as to insurance.
>> do we have a problem ensuring it until that time?
>> I don't know that we -- do we think if we transfer equipment, we need to say county health insurance, you've got -- some of this is likely to disappear, so you need some safeguards in place. And that's their challenge. We can figure out ways to help them. What I知 thinking is, as you say, practically speaking, that would be real important. Travis County funds transfer, we gave the budget stuff and is there anything else on budget or did you cover it yesterday? Anything else on budget?
>> did y'all get into a discussion on reserves?
>> does Travis County need to do anything today to give the hospital district board of managers I guess a supplement to whatever you gave yesterday with the city?
>> there was a presentation that jointly showed the board of managers '04 budget and expenditures, '05 budget and expenditures for -- in a kind of omnibus way. There was also a presentation of services and those two can be seen as linked. I think it's fair to say that the -- there were a number of at least a sense of oh, my, and a desire that it will be brought up again on Wednesday. So that the oh my's turn into okay, now what? And more detailed work is going to be needed on the budget side of the house. To answer your specific question on reserves, the word reserve was brought up a number of times. Specific reserve numbers were shown. I do not believe there was a substantive debate and resolution on how that will get dealt with. I suspect that it will, however, occur soon, and if it doesn't, I believe it will inevitably come to the Commissioners court on the 19th because the reserves are going to be perhaps one of the most asalient questions on the birth of this entity. And different people have different opinions on appropriate reserves and different people have different expectations about what will and will not be available on the reserve side. I think the county's presentation was very straightforward and clear that there has been for the last decade an 11% unallocated reserve. That when the county spends a dollar more, 11 cents goes into a reserve. And when the county spends a dollar less, 11 cents can go out of the reserve and therefore I think the board of managers has a pretty clear understanding that if we spend 8 and a half million dollars less in '04 that the unallocated reserve can be reduced by $940,000, and that that showed up on the materials that the board of managers received. The city had a number there of $3 million that appeared on the material that the board of managers received, and I suspect that there will be more rich and rewarding discussion on that number and what that really means to the board of managers for '05. The board of managers also heard the word untouchable reserve versus touchable reserve. I believe that they are going to tomorrow probably receive a little presentation on public financing and what credit rating agencies look for. They are probably going to be alerted that as a fledgling entity they are going to be investment graded, which probably means triple b, and that that will have an impact on their interest rate should they go out to borrow money, they will also hear ex-soretations about getting themselves into a good position financially and that that will be an important feature that the credit agencies will be louing at along with good management and good trends and fiscal responsibility. They will also be receiving material on the county reserves picture and the county financial and budgeting guidelines which we use to help guide the fiscal picture for the county and they will have a choice as to whether use them, change them, but certainly it will be a model for them to come to conclusion. That is a long answer to a very simple question.
>> yes, sir, too long. [ laughter ] they look at the budget document and the figures. That's what you gave them?
>> no, sir.
>> [ inaudible ].
>> we have the budget part now, 2-c on the agenda. Last week we had a county budget document before us, and my question is we shared that with them, right?
>> that's correct. Valerie and I met with the city of Austin, john stephens, trish young and their staff, late Friday, and went over the financial numbers that we had previously met with the auditor's office right before attending that meeting. On the projected fy '04 expenditures, including the reserves. And at that point I had received a draft of what city of Austin had compiled based upon the numbers we had given them previously. So that initial draft there was not a line for reserves. We insisted on putting the reserves. The city did incorporate all of the recommendations that we made to them based upon the county, and they let the city of Austin reserves in '04 at zero for the city, which we put our 11%. And then on the fy '05 is where they put the reserve from the city of three million dollars. Now, we feel comfortable based upon everything that we've done in conjunction with the auditor's office that the fy '04 expenditure budget for those expenditures that will be picked up by the hospital district, including the rmap discussion that you had earlier on the agenda, that it's between a minimum 300,000 overrun to a possible 370,000. Those have been incorporated into the information that was presented to the hospital district yesterday. The '04 estimated expenditures which the auditor's office has delivered to the board of managers a document that is ready for the external auditor to look at those fy '04 expenditures to determine the tax rate reduction. Also incorporated and given to the board of managers yesterday was the city and Travis County's best estimate of the fy '05 budget by line item -- by programmatic area. They're looking at that and the board is asking questions of the people that are making the presentations.
>> does the Travis County Commissioners court need to do anything today regarding budget information to give to the board of managers tomorrow or later?
>> judge, you said that you're on item 2-c, which is transfer of funds. And in my opinion the court does not need to take action on transfer of funds because the district is not --
>> this is really identification of the amount of funds being budgeted to transfer to the district, so we just pass the information on, not transfer. All I知 trying to do is -- what I had in mind was real simple. We try to find out whether the Commissioners court needs to at any time today regarding budget information to supplement what y'all did yesterday.
>> no.
>> anything further on 2-c? See what I知 saying? If we don't transfer anything out of Travis County, I知 happy. But I didn't know what we had in court last Tuesday. So if that was it, that was our best effort last Tuesday. If you indicate the possibility of an additional amount based on hhs information and recommendations today, it seems to make all the sense in the world to share that with them. If you've done that already, that's fine.
>> would you like to see the presentation made that was a joint city-county presentation that was a joint budget. That you have not seen. It was presented --
>> I would. I think the whole court ought to see it.
[one moment, please, for change in captioners]
>> ... But I would anticipate there will be at least one meeting next week, at least one meeting the week after.
>> the schedule. Thank you.
>> have they discussed a meeting place? Or is that their -- are they comfortable --
>> they have not discussed an alternative meeting place. The meeting place tomorrow will be at brackenridge hospital in the two north conference room like it was yesterday.
>> okay. Yes, sir?
>> a meeting with the city of Austin, john stevens, everybody, talking about the financial matters of the hospital district. Has anybody asked specifically the city of Austin where $30 million plus, up to two years ago in reserves, have gone since that time? Has anybody asked that point-blank to the city of Austin? And has -- has anybody from here indicated that we think that there have been $30 million plus gone in the last two years that the hospital district board, if we're going to help the hospital district board along, let's help them along and connect some dots and not expect them to sit there and not be able to ask the right questions. Did you ask that of stevens whenever you were with him?
>> we have asked john stevens and trish young several times and I think it included the meeting with the external auditor, our Travis County auditor, has raised the issue of that $30 million with the city of Austin. They have not responded.
>> so the city has not responded when you ask them where $30 million have gone in two years.
>> Commissioner, the word $30 million was not put on the table yesterday. I cannot help but believe that that amount is going to be in front of the board of managers sooner rather than later. Now, the questions have been asked to the city in multiple forums in multiple times, but it has not yet hit the board of managers. So -- it will -- it will clearly be a question for both to deal with.
>> I知 not as interested in the board of managers understanding the implications of it right now, because I don't expect them to understand that. But since this is a Travis County health district now, it is in our lap, then I would think that we ought to demand from the city of Austin an explanation as to where $30 million has gone in two years. Let's stop beating around the bush and let's ask the city of Austin, say, we want to know and we want to know that by this Friday. Because we are getting those answers.
>> the Commissioners court has requested from the city of Austin the backup work papers that the Travis County auditor prepared for the court and you signed a cover letter asking for that information from the city of Austin. That went back to fy '02 when that reserve was established. I知 not sure what communication that the Commissioners court has received back from the city of Austin. In that request. There is a public request that you sent to the city of Austin for that information.
>> I think the sad reality to that answer is that you look at their budget documents and you find that they have spent it and balanced their budget using that some amount of that $30 million. It's almost as though we had somebody anticipating a divorce and they reclassified the assets. When it's time for all of the lawyers to get together and say let's split up the assets, let's get the community property out on the table, it -- it's there.
>> I understand that. I知 just trying to make a point that -- that this means -- that we are not talking about chump change here. We are talking about having our auditor and everybody know that we are a little behind the 8 ball in having enough money to get this thing started. $30 million and some shenanigan has been pulled unless somebody got some white out somewhere or just forgot to line item a $30 million deal. The city ought to tell us, here's what's happened in two years. Maybe if we need to reask that question, say we would really like to know and get a specific date, that's all that I want to know.
>> that's why I知 concerned about putting any caps on anything right now. Let's just wait and see what's there. I don't want to leave anybody behind.
>> 2 d. Issues related to independent audit required by health and safety code section 281.112. I have not taken any action since our last discussion on this. We still need to get with the city about that independent audit. What was the board told about that yesterday, anything? About the independent audit required by the -- by the statute?
>> are you discussing the tax verification that's required by the statute?
>> right.
>> that's not an issue for the board and it wasn't discussed at any time during the board meeting.
>> they still need to move on that, right, get that done?
>> I can answer that. My understanding was that someone from Commissioners court, I thought it was you, judge, was going to make the initial contact with maxwell, et al. John stevens indicated late Friday that he was scheduled to meet on the city's portion of that discussion today sometime with maxwell. I think that it's appropriate for members of Commissioners court or someone to make that initial contact and start -- start doing the preliminary negotiations to get that project started.
>> try to get members of the internal transition team to attend that meeting so we can discuss with maxwell, with the firm, the engagement. Let's do that. We will try to get that done this week. I'll get with the members of the committee, see what's convenient. We may be looking at Friday. Give everybody a chance for advance notice. I think we ought to land on that one way or the other.
>> judge, have we asked or do we know what the scope is of when what we are -- have we gotten any sort of input from the auditor's office with regards to what we expect to see out of -- out of this audit. Susan have we put together anything from what you think we need to see. I know that you are trying not to -- trying to distance yourself from this thing, because i've told you before I知 not very comfortable with not having my auditor.
>> well, the reason that I知 distancing myself from it is that you know I think that we ought to tell -- we, the two governments ought to tell the people the truth as to what's there, what they expect. I think in order to do that, to have an audit firm opine on it that you need to do our outside auditor yeahed with this. They need to go back and do a thorough audit of '02, '03, '04, of both organizations in order to even determine and come up with how much of that was tax money for the rate and then to make sure that all of the information is correct. Philosophically, I think y'all have taken a different point and that is jim thinks -- I will let jim speak for himself. He sees a much more narrow scope. I am up comfortable with that. Because an agreed upon procedure is not an opinion, it's simply, you gave me this number, I looked at this, yeah, that's what this is. I don't think that's what the public contempt plates. I think when the law was written, not well, I will say not well, the words aren't good, they are not accounting terms. But I think what they contemplated is an outside auditor would come in and assure the public that the money that should have been transferred was. And I think that it is more complicated than just taking one little number, looking at that. I think we have to look at the whole thing. The number -- the question about reserves is a big one. It's a question of -- you know, in the letter from deloitte told you this when they declined to do the audit. That is that the city of Austin has changed their accounting methods since '02 regarding the hospital funds. I don't know and they don't know if it's appropriate or not appropriate. But a fact is it has changed. You look at the statements. They are not the one they were in '01 before there was announcement of a hospital district. Headaches that's a coincidence, I think and they think it need to be looked at before you can draw a conclusion as to what that $33 million was and then legally and ethically does it belong to indigent health care, which this hospital district is now charged to do. And those are questions, it's legal, ethical, public policy question. It's not easy.
>> but, susan, aren't those questions that the hospital board managers ought to be asking related to what's in this law as flawed as it is, there is a calculation question and we are going to do, Travis County and the city of Austin, will make that calculation. It's really going to be in the hands of the hospital board managers to say, well, that's groovy, but let us backtrack through that number --
>> I don't know that --
>> to appropriately ask those questions of did the city and the county turn over everything they should have. I feel good that we will be able to say our number is good, but it's going to be the managers I think to press for that full-fledged audit since they are going to have the paperwork back to the beginning of time represented to that hospital and all of the programs.
>> Commissioner Daugherty? There are answers to your questions as -- as your legal counsel and as legal counsel for the hospital district board of managers, I知 advising you that it would not be in the best interests of either Travis County or the hospital district board managers for you to hear the answers to the questions that you have raised in open session. We will be glad to have an extensive discussion of this with you in executive session.
>> well, jim, I guess the only problem that I have with that, and, you know, I don't know whether you are acting as the county attorney now or the district.
>> I知 acting as the county attorney now at this desk -- [multiple voices]
>> my only concern about that is that I think that too often, you know, we go into executive session and I know that there are legal things that we are supposed to do that with. I just want to make sure that everybody in this community gets what they thought they were going to get. However we can be as open as we can possibly be, I don't think that an executive session question, what I知 asking the city of Austin, what happened to $30 million, from two years ago. Maybe you're telling me you know what Gerald you don't need to be giving that answer out in the public. I知 uncomfortable not having that answer given to me in public.
>> that's not what I知 telling you Commissioner. What I知 telling you is that if your goal is to ensure that the Travis County hospital district has received all of the assets from both the city and the county that it ought to receive, that there is legal advice that I would give you with regard to that goal that if I give you in public it will diminish the possibility of achieving that goal.
>> [multiple voices]
>> have the internal committee meet with maxwell firm, et cetera, try to get that done. Could I -- look at 2 b, hold on a moment, on 2 b there was a motion by the judge and seconded by Commissioner Gomez, really, just to make the list of equipment and clinic information available to the board of managers. Just so they would know. Later on when the transfer comes up we would take appropriate action at that time. But mostly really just to hand the board of managers that information. We did not vote on the motion is where I bring it back up. Any discussion of that motion? Deliver 2 b that was in our backup today to the board of managers, all in favor of that motion? That passes by unanimous vote. Now, further discussion of --
>> I just wanted to make one comment. The board of managers did receive the Travis County auditor's packet, which I understand in meeting with the auditor's office late Friday is -- is that Travis County is ready for the process to begin and the documentation from fy '02 through the current year is available for the auditor.
>> okay. Good. At some point on d, if we have views about the two or three kinds of audits that can be conducted, one is required of the city and county up front. That's what I知 trying to get done. On the other, if we have information or recommendations to pass on to the board of managers, I think it would be appropriate for us to do it. And so -- so e is a list of outstanding issues recommending for consideration by the board of managers. One of those recommendations may well ought to be that there be a more extensive audit of city and county records than required in I guess 281.122.
>> I didn't use the words forensic audit that goes with that. We are just talking about something that truly delves into precisely all of those issues that we have been talking about.
>> we have been keeping sort of a list of formal issues that we think the board of managers needs to be aware of. This item really is to pick those up. So are we still working on that? I don't know that there's like a master list yet?
>> that's a good one to start with. Unless we have one right now, maybe what we ought to try to do in the Monday meeting of the committee is put that together. On Tuesday come back with a draft list of those issues, including one that you just talked about.
>> I thought, maybe that's been done. I mean from the auditor's office what I guess leroy you were saying that was delivered or has been delivered.
>> right. Is that something that the auditor --
>> what we are delivering to them, delivering tomorrow is that we have prepared actual financial statements on a program basis and that is -- that has identified the programs that you all said that you were going to -- basically the clinics, the hospital. And that is we have separated all of that out into a program and so what we have done is prepared financial statements on actuals expending the actual expenditures of those programs. Then, of course. From June 30th on our projections. On that -- those numbers have come from the planning and budget office and hhs because those are not actuals. Our office is perfectly capable of generating the actuals. But the projections for the end of this year. Then I think it is that data that p.b.o. And hhs have used to project what '05 would be. Part of the data is what did we spend on those programs, for the city, for us, those moneys are in different places. We believe the public needs to see that as a program. Also I believe that is helpful to the board because this kind of says well, okay, these are the programs that the county paid for. Here's what they are here, here's the history of the spending and then they can look at that and -- in planning what they want to do. It's too much to expect that they can come in to -- to our books or the cities and starts pulling stuff out. We need to do that, put together financial statements for these programs. Those statements have to have footnotes, prepared in accordance with generally accepted accounting principles, which we have done. That has not been a simple task, but nonetheless I think we owe that. I know you think that. We owe that to the voters in this community. We will do that tomorrow. Packet of the policies that you all have adopted I haven't made a presentation on that because they simply ran out of time. Like you all do. 10, 11 hours, they were pretty worn out yesterday. So tomorrow I will do that. And we will work with them on any changes that they need to -- to make. They are overwhelmed at this point.
>> susan, the thing that I didn't know that was a part of it, that I would like to see, is an additional punch list or whatever of recommendations that you think the board needs to look at with regards to all the way back to 2002.
>> right, they have not asked me that. I didn't know, jim would be more of an expert on this. The two items that I知 supposed to speak on are not a forum for that. I知 asked to talk about generally accepted accounting principles, that's going to be brief because the truth is when when they get their financial person they will have plenty of time to talk to that these are not accountants. Secondly the policy and procedures that you adopted. We will has that joint presentation, I intend that to be very brief. These are the policies that the county has, they would like you to follow. Jim is going to help them adapt those to them. If there are any changes that we need to bring back to you, we will do that. Again, I don't contemplate going through that in any kind of painful detail because they are not ready for that. When they get their own people, we will work with them, get together with them. I think they are going to break down into subcommittees so they can focus on certain areas. I think there's a tremendous amount of work for them to do. So I -- so I sense that -- that --
>> actually the new board members for the hospital district received copies of those controlled procedures of Travis County over the weekend. And more than one of them told me Monday morning they had already read them. So they are --
>> it's a great board.
>> they are hitting the ground running.
>> they are.
>> they understand what they need to do. They are very serious. Susan is right there are two items on your agenda which do not relate specifically to the issue, the Commissioners court is concerned about today. But she's been asked to make the presentation on. There is, however, an item on their agenda, which I expect them to take up tomorrow, which is to employ an accounting firm to conduct an audit of the assets that -- assets and liability that have been transferred to them by the city and the county, and to make a determination that they didn't get any liabilities that they should not have gotten and to make a determination that they got all of the assets that they should have gotten and then to create a baseline analysis of exactly what the hospital district owns at the beginning of its existence. And while susan is not making the presentation on that, because that's a contractual issue, I made it clear to susan, pointed out to her, that that item is on the agenda and that the board members are anticipating that they will hear from her with regard to that item. She's -- she's not charged with making that presentation. But like any other item, anyone can speak, the board members are anticipating that they will hear from susan concerning policy issues with regard to that audit.
>> the immediate issue that they will have, I predict, when we get -- has nothing to do with policy or content -- is, you know, the budgets of both organizations through the end of the year covers exactly what the organizations are doing. The question is where does the money come from, from the board, where do they get that, where are those funds, that's something that I don't know. But I mean it's all well and good to say conduct an audit. The next question is what does it cost, where does the money come from. If we turn over money that we have now, every bit of budget is accounted for and running the programs that we do, I知 assuming that the city is the same. I guess we could use money that would be in the reserve. One question is what money did they have, how did they get it. Pragmatic things that are real questions. Maybe it's out of the 11% reserve, we have -- I don't know. But -- but the question on --? The city-county tax rate in the aggregate applied county-wide is supposed to generate an additional $6 million.
>> judge. The -- the navigant report talked about if the Texas rate -- tax rate were applied county-wide and county taxpayers that were not in the city paid a higher tax rate, that that would generate in the navigant report, that's what promoters used, was $7.2 million extra on the tax rate with the -- with the new appraisals and that type of thing. It's slightly more than that. The reality is while it was sold or told to people while it was implied that was available for extra new programs, new things to do, the reality is that does not cover an 11% reserve on the funds that they have. So if in fact they carry an 11% reserve, one is it is on the county's financial statements. When our bond rating is looked at, that is looked at as well. Forget programs for just a moment, but just look at Travis County's financial position. That makes a difference because it's on our statement. So we have an interest just -- just from our own viewpoint to have adequate reserves. That's one issue.
>> the next issue what kind of reserve do you need for that kind of a program where people are coming in and needing help? And you talked about it a little bit earlier. You know, you all have said take care of sick people, one. Differences in the county. You just did that a couple of minutes ago. More people came in than you thought and you took care of them. What the board is being told now in budget presentations is, well, you'll just have to restrict the number of people that are treated, that may be the hard reality. But that isn't what's happened in the county so far. They thought there would be more care. But the financing is so important because you need those reserves for a program like that, you need it for financial stability to be able to issue bonds, but by the sake token the -- same token the programs that are out there need to be ongoing. And I think everyone thought, this is going to be in your lap, everyone thought there would be that money, judge. Just like you were told there would be that money.
>> are you saying today that's not true.
>> no, that's not true, judge, because that money will not even cover the reserve level. So the truth is --
>> they don't have extra money.
>> you are saying the money has to be spent to cover the reserve. But if Travis County changes over an 11% reserve, same that we would have if the county kept program and services and paid for them, are you saying the city is creating the shortfall?
>> yes. That deal is not over. The only question is will the board have money to pay for an accounting firm to do whatever jim just described. I知 saying it seems to me that the county and city ought to help pay for that. But I知 also mindful that there ought to be additional revenue generated by expansion of the city/county tax rate county-wide or district-wide. I don't know that we ought to doom the board when they just had the first meeting yesterday.
>> I don't think we ought to doom the board, but I think you need to see the budget and.
>> the district doesn't have a budget yet. Because they have not submitted one to the county, we have not approved one. Seems to me if they, whatever amount they were given, if they said we need an additional x amount of mope to hire an accounting firm to do this, this, that, it will make sense. Would we treat them like we would another county program? I don't know --
>> that's a question, I don't know the answer to that, judge. The question is when you contract with the auditor, someone has to pay for it, I am sure that's going to be their question --
>> I think we are being incredibly negative at this point when the board has only had one day meeting, and we inundate them with information. One hand we are suggesting we ought to help the board as much as they can. It may be we ought to are more optimistic and let them do their job at this point. I don't see us doing that. I don't see us doing that. I don't know that anybody in his or her right now on the board would create a perfect health delivery system overnight. I would be less optimistic five years down the road, if the system isn't better. But I don't know that I would be -- that I would be -- pessimistic four or five months from now if they haven't created miracles. I don't know if we ought to through negative attitude and actions make it a whole lot harder for them. Seems to me that -- that's what we assume to be working on. I just don't buy into that.
>> to be positive, the health district was -- had a report that showed that there would be seven million available for uses that -- that report went on to say that there should be at least 10% reserves. If you calculate 10% reserves, you get $7 million. So -- so that never got into clearly a number of very key community leaders radar screens. In addition, because of the explosion in the numbers, of people, who are using the services, the -- the costs for '05 are much greater than what was projected. Those are facts. Those are simply what is on the table. One can characterize it as negative or positive. I think the intent, however, is to ensure that the birth of this entity is successful. And you are seeing a lot of energy go into trying to ensure that happens. I in all candor don't believe --
>> your recommendation to us it seems to me should be city and county, you ought to think about giving the hospital district x amount of money more than you have been contemplating. And if that is true, we ought to inform the board of managers that they ought to ask for it. That's what we are here for. I assume the reason the law puts on the Travis County Commissioners court authority to approve the budget is that at the appropriate time, we would do the right thing. I certainly don't think that we have any right to sit here and just doom this district from the beginning. I think that we have to realistically deal with budget pressures. Same way we do other complaint departments during the budget process. So if in fact the new money has to go to cover the reserves, that's what you all are saying, right, we have to live with that. Because I think that the hospital district leaves a reserve, same as Travis County.
>> right.
>> there ought to be an untouchable reserve. To the extent that the budget has to be increased, other known contingencies, [indiscernible], seems to me that we have to deal with that.
>> but you cannot control what your colleague government does. You can only influence it.
>> absolutely.
>> to the degree that you wish to influence it, you can. To the degree that it is not -- not influenceable, then the hospital board of managers will have to live with whatever it is that they have.
>> I think we ought to pursue the truth, nothing but the whole truth. One. Two is if we think there are soft spots out there or dark spots that the board of managers should inquire about, I think we have a responsibility to let them know that. To the extent that we can use our influence, clout, et cetera to help the district and the board, we ought to do it. I don't know that I can say more than that.
>> that would be very, very positive.
>> absolutely. I think we are a whole lot better doing that than by being real negative here. Period. This is hard enough. Let me get off my --
>> [multiple voices]
>> I知 not intending to go negative on this either. Mr. Branson is tired of me saying this over and over, I知 encourage knowledge the city to do the right -- encouraging the city to do the right thing. I know that Travis County is prepared to do the right thing. We have only been talking about transferring over the 11% reserve that we have been taxing folks for, that 11 cents on every dollar so we are not -- the navigant says 10%, I have always been prepared to send over the 11. The problem is the city while we continue to urge them to please positively do the right thing, they are not talking about the 10%. What they have so far put on the table is a number that is substantially below that. Which basically says they are going to have to use that new money that gets created by a wider tax base, to -- to make up for what we had hoped folks would do the right thing and properly transfer. They still have the opportunity to do the right thing. But we ought not to be afraid because it gets kind of sticky and yucky, when family members are talking about money to -- to point the hospital district in the right direction because I do want them to get off to a positive good start and sometimes -- and i've been waiting for the city to -- to do the right thing and put up 10% of their dollars but so far that's not the number that they have put forward in their budget documents. I知 not going to get freaky about what they put for '04. The question is whether they put them down for '05. $3 million is not 10%. I知 not even going to hold them to 11% like we're going to do. 10% isn't $3 million. And I still press and hope and urge that they do the right thing so that we can indeed get off to a good, positive start and that we are not having to use the new dollars to recreate what some of us thought was the right thing that everybody transferred what they had already been taxing for and getting from federal appropriations from dispro, from other kinds of sources, you can't use it to balance your budget.
>> anything further on number 2 today?
>> no.
>> excuse me, judge. The only thing with regard to outstanding issues, I believe the direction had been to staff that we e-mail any outstanding issues to the judge now. I wasn't present when you gave that direction, it could very well be hearsay. I think that we were supposed to have members of the transition committee as well as staff e-mail to you anything that we felt was outstanding with regard to the board of managers and that the transition committee would then compile that into a list. I just wanted to bring that back to your attention and see if there was any comment to that.
>> I don't believe that I have received any by e-mail.
>> yes you have.
>> I have received it -- I have received a memo from mr. Smith, though.
>> now, it may make a lot more sense to send outstanding issues to ms. Flemming, judge Biscoe, who else is on the committee?
>> it would be.
>> christian smith.
>> not the whole committee. What I have in mind is Monday morning we would come up a comprehensive list for those reservations and we would act on them. Add, delete, approve, et cetera. The way I see f working, e working, is for us really to give board of managers any issues that we think the board of managers should put on the plate, short term, long term. And these are unsolicited and it's basically our opportunity to kind of have our say. Any issues that we think are important to the board should be on this list. In my view. Open ended. In my view it ought to have something to do with the hospital district and its business. Anything further on e? F? Same item back on next week.
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Last Modified:
Friday, October 28, 2005 9:19 AM