Travis County Commissioners Court
August 10, 2004
Item 23
23 is receive presentation on f.y. '05 preliminary budget and take appropriate action. There mr. Smith is. Should we take another item, christian? Should only take a minute.
>> you should have already received a copy of the preliminary budget which was filed on July 28th. It has been distributed to all elected and appointed officials and their financial staff. It appears on the website for Travis County. You should also have received a coach what we call the black books which are the planning and budget office write-ups on all of the various budget requests that have been submitted. What I would like to do very briefly is just to simply give you an overview of what is contained inside the preliminary budget in preparation for budget hearings which will begin tomorrow. And this power point presentation provides that summary. As you know, this is not the budget, it is a budget. It is the planning and budget office's best recommendations for a sound and financial plan and based on the principles and guidelines the court has established.
>> move that mike around just a little bit to your left so we can -- that should be better.
>> okay. Thank you. Can city is in reasonably good financial shape. Our finances are stable. Our triple a bond rating was recently confirmed. Resources have been managed carefully to navigate through some pretty difficult times over the last two or three years. Our health is due to the preparations made by the court to increase reserves and fund balance in prior years, your adherence to adopt guidelines on the use of resources, avoiding one-time revenue for ongoing costs. You've been historically careful about spending as have official both elected and appointed, and there is also low rye leans on fluctuating income sources. However, we have had a further shift in the property tax base. Total value will increase slightly from 60.2 billion to 61.1 billion. New property values, meaning new value on the ground not before constructed until this year will decrease from last year's 2.1 billion to 1.9 billion. Last year was the first decade in -- year in a decade we saw a drop in property values. There is a slight rebound, but commercial values overall will drop 5% and homestead values have increased from 191,000 to 197,000 and some change. That shifts the tax burden from the commercial sector to homesteads again. Last year for '04 we saw that happen. We're seeing it again in '05.
>> christian, is new property values and the decrease to 1.9, is that attributable to less building or that the values on what has been built is less? Is it just -- is it just overall less building? That probably is the answer, isn't it?
>> that's the total value on both the commercial and the homestead side.
>> on new property both.
>> on new property. So I don't have a bead on the components of that on the commercial versus homestead.
>>
>> [one moment, please, for change in captioners]
>>
>> ... As you know, f.t.e. Tracks very closely to county population. Looking at a chart from 1992 back to -- to '04, '03, in essence, as the population grows, so do the county f.t.e. Which is what you would expect.
>> christian, is that true in all counties? I mean, if we were to compare, I mean, is that just a standard that you expect with population to grow up, as it grows, for your f.t.e.'s to grow, so that's just a given in government.
>> it's not a given in government. It's intuitively understandable. I mean, I don't think there's anything that's given. I just think that it's logical.
>> but it tells me that the service level to our constituents does not drop.
>> if you are concerned about service level as population grows, if you keep f.t.e. The same, something must give. Usually it's service.
>> service level.
>> unless of course you insist that that not be the case, I mean, if you have five people doing a job, for example, and five people that's doing the job for -- for 100 people in the population, the fact that you add 20 people to that population doesn't necessarily mean that those five people can't still do the job for the 120 people versus the 110 people. What you have to ask is how do you do more with the same.
>> yes. If there were only -- I think you are absolutely right. If there were not fire members of the Commissioners court, for example, but there was only one, the government -- the Travis County would probably run more efficiently on a Tuesday, but the decision making might not be as wise.
>> our meetings would be shorter. [laughter]
>> I just wanted to throw that out as a possibility.
>> I don't know exactly who got slapped on that one [laughter]
>> we could say the same thing about four executive managers having one instead.
>> yes.
>> there's all sorts of ways to cut this. May I move on? [laughter] that means do I still have a job?
>> I didn't say anything about the executive managers.
>> the themes really were set back in January-february, restraint, caution, using existing resources to meet new needs and the absence of new funding for anything but minimal increases and either contractual or statutory obligations. Here's a simple chart about the numbers. These are all in -- in millions. The general fund moving from 323 million to 337 million. Road and bridge, seeing slight decrease. Debt service slight decrease, other funds and transfers seeing a slight decrease. Overall a change from $487 million budget to almost $498 million budget. We were talking about personnel. Not that -- not that long ago. There are 61 and a quarter positions added to the general fund. And there are 16 positions that are being reduced. The net increase is 45 f.t.e. And consistent with the guideline that's the court provided, 16 net new positions have new revenue associated with them. Just under 17 are a switch from the grant fund to general fund. And then 8 f.t.e. Are associated with the voter approved east metro park. You total those two together, those three numbers together, you get 40 out of the 45 f.t.e.-related, either to new revenue, a fund switch or the new park. A hospital district, is a -- is certainly an issue for this year. This budget includes all of those programs and services that are related to the hospital district. They obviously must be removed in '05. And the tax rate will then be reduced based on the '04 expenditures. That the county incurred for hospital district programs and services. An independent audit will validate that amount and we suspect that that will be a -- available, that verification will be available by the first week in September. So the tax rate and the related expenses have not been adjusted in this preliminary budget. That would be done in September and that allows full disclosure and transparency. There's a wide variety of funding issues and these are what we call maintenance of current effort. In essence, expenditures to tip doing the same thing or that are to meet obligations or contractual interlocals that -- that -- that -- that are -- that are a part of the fabric of the services that are being provided. We've got the combined communication, transportation emergency communication center, and the radio system of $859,000. The intermediate anxious center is 826,000. The interlocal with e.m.s., I.t.s., Maintenance of current effort, which are primarily maintenance contracts, we've got the balcones canyonland preserves preservation fund, fuel increases, risk management maintenance of effort, opening new parks, there are resources in there for increased maintenance and repair of our facilities, community supervision corrections department software license which you have talked about last week, indigent attorney's fees, all of the justice of the peace and constables have varies increases -- various increases in the preliminary budget which are all outlined. Various health and human services increases, star flight increases, a new environmental enforcement team that the county attorney and a new collection team for the county attorney both of which are -- which are revenue neutral. All of these I -- are outlined. There's a paragraph or two for each one of these in the preliminary budget and I?m sure some of these you may wish to go into some greater depth. We have our central reserves, unallocated reserves, which have stayed at 11% over the last decade at $35.2 million. We have an allocated reserve which is similar to what you had in '04, a million-nine. Then the emergency reserve. You may remember the emergency reserve was just about a million-eight in '04, we believe that it is before you tent and reasonable to reduce that -- prudent and reasonable to reduce that because we are seeing that the recession is behind us and the original justification for that reserve is -- is diminished. I don't know if it's no longer there, but it certainly is diminished. And assuming that -- that you know our -- our predictions are -- come cogent we should be able to reduce that to zero in '06.
>> do you have jail overcrowding --
>> no that would be part of your allocated reserve or emergency reserve.
>> be sure to footnote that to look at during the budget process.
>> there's a capital acquisition resources account preserve of 500,000 for capital items should that's just the reserve.
>> that's just the reserve. That's not the -- and then we have a variety of special purpose reserves. And there are probably more of these than you have seen in the past at this point in time. What we are doing is we are putting them on the table and -- for your consideration, some of these are because we just don't know yet what the -- what the amounts should be and therefore were hesitant to recommend an actual appropriation to a department, but we believe additional resources will be necessary in the absence of some programmatic or policy change to the contrary. What does that mean? Well, police increase reserve, $500,000, you have just dealt with the airport question. Depending upon what happens, who goes where, it may very well be that we are going to need that $500,000 to handle leases if certain actions occur, vis-a-vis the airport. We have the fully automated courts tracking system. We have two reserves related to that. One is related to departmental requests, as you have heard in times past, a variety of departments have said when facts comes, I?m going to need more to manage. How much more? Well, it's not here. We believe there will be some additional f.t.e. That will -- that will be logical, appropriate in order to make the facts system work reasonably well. How much? Is it one f.t.e., 10 f.t.e.'s, 22 f.t.e.? We are not sure. As you know, facts has been a little slower in its implementation than what was originally envisioned. Anxiety because of the unknowns that are out there.
>> is this amount sufficient? If it isn't, we really don't know. But -- but the next year that -- that is coming up. I guess anticipating that -- some revealing of where we are in facts when this actually becomes something online and something that's real at that time. Right now it's a lot of anticipation, but -- but I really don't have any hard core evidence to suggest exactly when this will become a real thing. So -- so $400,000 in anticipation of -- of that realization for '05.
>> yes.
>> I guess that's what I?m trying to get a handle on. On.
>> yes.
>> okay.
>> yes. Yes, yes.
>> yes, we do not know. Yes, we need a handle on it. Yes, we will have a handle on it. Yes, it's a judgment call. Yes, it's part of the art of governance as opposed to the science of governance. There's one other thing about that 400,000, because we have requests for much more than that. How much of those requests are based on -- on anxiety and apprehension and how much of those requests, among multiple departments are based on just raw un-- unadulterated facts, pardon the pun, is probably unknowable right now. But will be noticeable once this thing gets rolled out and is able to be touched and felt and smelled. There's a second reserve, a capital reserve one time, because we also have requests for modifications. To the facts system in order to make it more -- more user friendly. So both of these facts items, tied up with the integrated justice system, ijs total 700,000, one is ongoing, one is one time. I might add that -- that you will have a choice Commissioner when you deal with the facts issues about whether this is to be annualized or not. It may be that some of these f.t.e. Or some of these departmental changes will not be needed until January or February. Or April. Well, this amount of money -- should be sufficient, so moving on, you have a security reserve, of $200,000, noose improved security county-wide, also hopefully the court will provide policy guidance on how to best improve security. After -- an after-school pilot program, you've heard bits and pieces of that during the public hearing, that was a pilot which I assume will get dealt with during the budget hearings. Annualization reserve for the east metro park, a record storage reserve depending on what happens with the airport. If everything stays the same on the records storage side there's a contractual obligation to increased expenditures there, but again that's tied up with the airport question. Fines, fees, assessments, that reserve is there in order to -- to help further promote the increased collection of fines and fees. The exposition center subsidy reserve --
>> back up to the fine and fees, reserve. -- $150,000, what is the purpose of that is -- how is that used? I remember we had some -- some rendering of -- of the collection of fines and fees done by cscd with that needs system, csc software. Of course they were able to bring about so many millions of dollars to the table. County of course getting some part of it. My question is: how -- how will this particular $150,000 be used? Is it tied into what they are doing? Something independent and outside of collection of fines and fees?
>> this is the -- the fines and fees task force has not yet made its recommendations and presentation to the Commissioners court. When they do, then -- then there will be -- there will be resource questions to answer. What this reserve does is in essence say, it anticipates that the court may wish to invest some dollars to improve the collections of fines and fees. Or it may not. But if it does, you have got to reserve. If it doesn't, you don't need a reserve. So it is a -- it is a lever for you to pull when -- when that fines and fees task force comes forward.
>> okay.
>> similarly, with -- with the exposition center, subsidy, '04, there was a subsidy in the expo center for the -- at one revenue estimate it looked as if the expo center would not require any further subsidy, fine. During the latest revenue estimate, it looks as if the expo center still has fiscal challenges. And we put this on -- on as a place holder to allow that discussion to again occur. Then there's the solid waste management reserve. Health benefits you have dealt with -- with earlier. It will be $3.5 million more in the general fund. Employees are being asked to contribute more. But the basic benefits levels of the health plans are not -- are not being modified, three options will continue. The health insurance fund will go 31.6 million in '04 to 37.3 million in '05. The fund has more than doubled since '02. Compensation reserves, as you know, rank and file employees have had no races in two years, peace officer pay scale no raise for one year. Termination rates show rank and file leaving the county at more than twice the rate of the pops employees, 13.5% versus 6.1%. We all know that substantial risks can occur whencal salaries remain frozen over multiple years. When and if we lose ground in retaining and recruiting a talented workforce, it can take many years to recover. So we have two reserves established. A rank and file at 5.75%. Totaling $5.8 million and a pops reserve of 2.75%, totaling 1.6 million. That recognizes the two dynamics that have occurred with respect to frozen pay for longer in one area than another, a turnover rate differential. Proposed tax rate. Again I remind you this has nothing to do with the hospital district tax decrease. But at the effective m and o, maintain and operation, plus debt rate, it's just under a one penny increase going from 4918 to 516 per $100 of value. With the increase in home values at that tax rate, the average of all homes would increase $42 a year from 752 to $794. This obviously will be adjusted when the hospital district tax rate reduction is fully known. This is a chart that you have seen before about the average property tax show, shows all of the taxes broken down between the city of Austin, which is about 20%, Travis County about 16, Austin aisd at about 61%, a.c.c. At about 3% of the total tax bill. We have capital recommendations totaling $19.3 million. Voter approved bonds of 5 million. Road and bridge fund of slightly over 4 million. The capital acquisition resources account, which is cash out of the general fund of 8.8 million and five year certificates of obligation of just over -- over $1.2 million. And --
>> for members of the public who wish to see this -- this 13 or 14 pages of detail, they can contact Travis County, we can accepted them a copy of these.
>> we can send it or they can look on the website available through the internet.
>> as of today?
>> as of five days ago.
>> okay. The capital acquisition resources account has the detail listed. Totaling $8.8 million. The road and bridge fund also has a variety of road and bridge related capital expenditures, totaling 4.1 million. The certificates of obligation are a variety of -- of facilities related needs and computer related needs. And voter approved bonds are continuing the -- the -- the bond expenditures that were voter approved. And you have your black book writeups. There are 470 separate budget issues that are -- that are outlined. All the departments have those writeups and -- and there will be a variety of public hearings. One on August 18th. That's next Wednesday. The ad will be in the chronicle on Thursday. A hearing on the tax rate on September 22nd, along with the budget and then on September 28th the public hearing on the proposed budget. Plus naturally every Tuesday citizens communication. And what happens next is the series of budget hearings, they will start tomorrow, they will end on Monday the 23rd. They are scheduled every afternoon on Mondays, Wednesdays, Thursdays, all morning on Fridays and then you'll have budget markup on September 8th, 9th and 10th, that will be when you -- when you make decisions on appropriations. And adopting the budget would occur on September 28th.
>> okay. Thank you.
>> you're welcome.
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Last Modified:
Friday, October 28, 2005 9:11 AM