Travis County Commissioners Court
September 7, 2004
Item 4
Number 4 is to consider and take appropriate action on revenue opportunities
and obligations to impact the f.y. '05 budget process. And we did chat last
week about t.n.r. And had a follow-up discussion with the planning and budget
office and the county auditor. And there is some good news. And that good
news is --
>> all right. For those that are listening, just to give
a little context for this, [inaudible] to special revenue fund and the reason
it's set up that way is there are certain revenues that come in that are absolutely
dedicated to road and bridge-related expenditures. And the reason the special
revenues fund is set up is so that you can document that money was indeed
spent for the if you were for which it was intended. It has not been uncommon
that the fees that were dedicated to road and bridge did not cover all of
the kinds of expenditures you all wanted to make for road and bridge, so there's
nothing that precludes the Commissioners court for spending more than the
actual fees are generated. A couple years ago we were routinely making transfers
from the general fund into road and bridge. And then we became aware of --
I believe it was a a.g.s opinion that said that all traffic related fines
and fees needed to go into the road and bridge fund. The various financial
systems which we have talked about indepth for years and years and years have
not been able to separate those that go into road and bridge and not. So as
not to make an error and spend money that was dedicated for road and bridge
on anything other than that, what we decided as a group was to put all fines
into the road and bridge fund. And the at that time time that you did that,
that pred well equalized the transfer you were making from the general fund
so it was kind of no harm, no foul. So the money going in was all fines, but
it had equalled kind of the amount of contributions you had made from the
general fund. So you discontinued making the transfer from the general fund
and put all the fines in there. Since that point in time, there have been
numerous efforts, as you well know, in the county to work on increasing the
collection of fines and fees. And we have seen some of that. We hope to see
more. Also, when the economy was robust, there was an increase in the motor
vehicle fees and that's one by law goes into the road and bridge funds. As
I heard your discussion, it seemed apparent that maybe we should revisit the
issue of can we separate those fines that should and must go into the road
and bridge fund and be sent there from those that we have just transferred
over. Which, again, would put you in the position of all of those that have
to be deposited in there, all traffic related, are in road and bridge, and
of course you are free policy-wise to transfer as much more money in as you
see fit in funding those programs. So it doesn't really have an impact on
how much you decide to fund those programs. It's just where the money goes.
So after hearing the discussions with road and bridge, I visited with my staff
to see if it was at all possible going forward that we could separate out
those fines that have to go into road and bridge for those that did not. And
they visited with the sheriff's office, community supervision and corrections,
and [inaudible] the tax office that has been collecting fines and fees on
a pilot basis for the court. Basically misdemeanor -- and we decided with
the j.p.s leave them the way they are and once facts come up, but most of
the money coming out of the j.p.'s and constables are -- so leave them where
they are. We have roughly $2.5 million of county fines and district fines
that have been deposited in the road and bridge fund. At this point in time,
I am comfortable, and I might get more comfortable in a day or two, but I
am comfortable with the work of the offices that have been done so far to
say that -- sorry -- that 1.5 million of that is not traffic related. And
does not have to be deposited in the road and bridge. Now, to make things
-- and I believe -- we just haven't gotten a report out of the cscd system
yet, and if we get that report, it's very likely this will be 2 million. But
I hesitate to taeu 2 million today when we don't have that report. So I think
that a very safe number today is 1.5. The law is very peculiar, and the way
it reads now those moneys have to be deposited in road and bridge and then
you transfer them back out. So I知 going to investigate that, the impact on
your decisions that doesn't impact. We'll either put tonight road and bridge
and move it into the general fund or we'll deposit directly to road and bridge.
That's kind of a epl implementation problem. We'll get with p.b.o. To handle
that. But the net impact for you will be that there will be $1.5 million more
estimated at least in the general fund and $1.5 million less deposited in
road and bridge. We we kwrufrp up and say yeah, there's one piece of bad news
and that is the district clerk forwarded a letter from the a. Government Friday
stating that they have read the law and they do not believe there is any statutory
authority to pay us filing fees for title 4-d cases. We've estimated $120,000
of revenue which we must now pull out of our estimate. So the net of those
two will be $1,380,000 new because we're going to have to make that $120,000
reduction. There may be some expenditures that tied to that. We got that breaking
news like 5:00 Friday so we didn't get a chance to talk to p.b.o., But it
looks like at least for '05, the a.g. Said they would try to get that law
changed, but it doesn't look like that's going to happen in tpao euf. So what
that amounts to then is a net increase of 1,380,000 since we're going to have
to pull out 120. My staff tells phao e me it will probably be a day or two,
hopefully one day that we're going to know whether we can add another 500,000
from the fines from road and bridge. So I wish I had the definitive 2 million
now, but I hate to tell you that and count out and find out that number is
too high. So it could come out -- the instant I知 comfortable with it, I will
notify p.b.o. And I will notify each of your offices so that you know that
in planning.
>> susan, would it be fair to say since we've identified
this and been able to separate these this is something -- [inaudible].
>> we believe it should be relatively easy once facts comes
out, but we will make it happen next year regardless wh-f the different segments
of facts come out.
>> we would be able to go back, and since you were able to
identify this one and a half million, could we go back three, four years and
get some sort of an indicator as to what the fluctuation with that thing?
I guess it grows each year.
>> it's been growing gradually because -- I mean the -- whether
that fund really spiked in all honesty were the motor vehicle registrations,
in the boom people are buying a lot of vehicles and registering them and that
fee kept going up. And then we had vested money in cscd in that system. There's
been a county-wide effort working on the cleaning up of the cscd transactions
in that system pump add lot of fines in there because there were things sitting
in abeyance which could not be classified so that brought that up. So, you
know, it's difficult to tell. I don't see, you know, unless we go go into
another recession, I don't see anything that would make the money going in
there would tank. I don't think this is ab aberration where we take this out
and now after taking that out we see another $2 million hit in road and bridge.
And again, I reiterate, none of this stops you from transferring money into
road and bridge should you decide that. This decision does not determine what
to spend on roads. It's just where the money is deposited.
>> and this is -- since it's ongoing money, just as an observation,
you probably have many more khalgtsz against the use of ongoing money than
defined resources so that is good news. And with this news what I would think
that we would want to start markup with an additional ongoing revenue line
of a million 380 and then subject to natural confirmation from the auditor's
office once she is able to tight tkourpbgs but at least you can start your
planning with that at the beginning.
>> when you say you may need a day or so, realistically you
think that late tomorrow or Thursday morning?
>> I知 hoping late tomorrow. What it is, judge, is that the
system that cscd has, it's a canned system so we're not able to run reports
against it. We need to go to the vendor and have them run a report and so
it's not something we have total control over. I知 hoping by the end of the
day tomorrow. I would be jumping up and down if my staff knows today.
>> as a technique, one thing that y'all have done in the
past during markup is to use a parking lot as a technique where you park things
that you might want to vote to appropriate or not depending upon further resources
as the final revenue items and revenue issues come clear to you. So that's
a technique that also will allow susan to not have 24 hours of workload each
staff member doing this but only 12.
>> and I mean we're happy to doist it. Departments have been
cooperative. I just don't want to get a bad number out in our zeal for a short
period.
>> did the department -- did you talk to the department about
these new findings? I think when they were here before --
>> yes, they were in the meeting.
>> when you were here before, we did discuss, you know, some
of the impacts that it makes as far as a temporary one-time look at this and
then an ongoing. Ongoing meaning it would maybe interfere with the permanent
program that's set in place which I知 really concerned about because, number
one, we have a lot of reconstruction projects that have not been complete
or in the pipeline, of course. I want to make sure those projects are really
complete. I know there's some in precinct 1, I think precinct 3 and also 2
probably, I mean not 2 but 4 also has some things that are going on. I just
want on to make sure what we are doing it does not interfere with the permanent
situation. If this is going to be a temporary situation, we can look at that
too, and I did not hear from the department as far as some of these new findings
that are being revealed here today. Because real any essence what really it
boils down to with the three options that staff had put before us last week,
option 1, 2 and 3 and we said we wanted to look at it, we never did reach
a decision. Well, to look at it and see if the temporary solution on this
would be just a temporary, which would be a one-time expenditure as posed
to an ongoing expenditure dealing with the road and bridge money, which would
be a permanent situation which really would hurt the program that we have
intact and the way we finance and fund the way we deal with our reconstruction
and surfacing and other projects on our roads. This is what I don't want to
end up getting to. I want to make sure what's being revealed here is not --
is not going to interfere with the project itself as far as our maintaining
and dealing with our roads in the county. So I haven't heard anything from
--
>> let me just say one thing and then carol can respond to.
That the deposit of the money does not impact the decisions that you are talking
about. Let's say, for instance, that we're putting 1.5 in the general fund
and you decide you want to spend 1.5 more in road and bridge. You simply budget
it and transfer it in. So this does not impact your policy decision. It does
impact the use -- it provides flexibility for the money, but it does not in
any way dictate how you spend that money. If you wanted it to transfer $5
million from the general fund into road and bridge, there's nothing that would
ever stop you from doing that. This doesn't impact it.
>> but I guess -- and I hear what you are saying, but the
question was looking at one-time expenditures as opposed to ongoing expenditures
in that program itself. And so that's, you know, my position is basically
-- I hear what you are saying, but I would like to hear from t.n.r. Staff
also as far as what we discussed because this is ongoing stuff that we're
talking about.
>> good morning, carol joseph, t.n.r. To answer your question
specifically, it does not impact t.n.r. In '05. As you recall in '05 right
now we have sitting in an allocated reserve line item almost $1.3 million
in that line item. And we -- when we met with christian and susan, we agreed
even if she went to the 2 million out of the fines and fees, we would be able
to find the additional $600,000 or $800,000 without impacting what we do in
'05. We expect to come here in October, end of October, first of November
with a revised -- with a completion of our pavement management system and
we are all hopeful the tults results of that will show us we're in such good
conditions that we may not even need to do as much as we normally done within
the fiscal year so there will perhaps even be more savings. At this point
we don't know that. To answer your question spefpbgly, in '05 this does not
impact t.n.r. We have already budgeted what we normally would do in t.n.r.
>> right. Right. And I guess my whole point is if we visit
the policy the way it exists now, and which I do not want to change policy
per se that may impact t.n.r. Even in the upcoming years from going from a
temporary fix to what we're looking at in a permanent. So I want to make sure
we stay away from a permanent situation because I think if we're going to
hurt a lot of road -- projects that we have in the pike now. That's basically
where I知 coming from is just that particular scenario. If we're going to
visit policy, I would rather visit policy with all the information on the
table, especially with the information that won't come to this court until
after the budget cycle is over with. It would be kind of premature, in my
opinion, to do anything to harm that existing program as far as ongoing revenues
that's being stripped away from the program such as our road programs at t.n.r.
So I have a little problem with that if it's anything done prematurely to
that policy without all the facts on the table.
>> I don't think anything is being done prao ma turl. I think
when we come back with the pavement management system, at that time if you
need to change policies or relook at what you are --
>> that's the direction I would like to --
>> that's what we'll have and that will effect '06.
>> that's the direction I知 tying on to and latching on to
and I want to make sure folks understand that.
>> anything else regarding this item? Now, I know individuals
are looking at the risk management fund.
>> yes, sir. We met with the risk management department and
we met with eric shepherd of the county attorney's office. All of us went
over all of the liabilities, and the good news is that we had a very, very
good year this year with regard to liabilities. And the joint recommendation
is that we can declare a surplus of $996,000 in the risk fund which will require
a declaration by the court to take that one-time money from risk and put it
into the general fund.
>> and this includes litigation?
>> yes.
>> but not health?
>> does not include health, judgment we looked at health
and felt it was stable and ought to be left the way it is. That we have had
goals with that health fund and we're kind of where we feel pretty comfortable.
We're having, as you know, cscd is moving out of that plan into another one.
That's always kind of an unstable time. You don't know what that's going to
do to risk efforts. You really just don't tphoefplt it's a year-end deal by
the time we know for sure, too late to bump up that fund again. So it was
our general feeling that that fund was stable and that we should leave it
the way it is.
>> so does that mean that that amount then goes into the
parking lot amount?
>> well, what we'll show tomorrow is $996,000 of one-time
resources, and it's up to you to determine how you want to use those one-time
resources.
>> it would be add to do the 1.3 million that we're going
to -- working off of?
>> that's correct. And we would show 1.3 of additional ongoing,
996 of additional one-time and that will give you the freedom to prioritize
the one-time needs against that and any other one-time resources that you
may choose. You've got quite a number of levers that you still have not pulled
and that will allow you to either spend or save resources.
>> except that this is one time taken 1.3 is ongoing.
>> that's correct. And so what we would -- our only urge
would be to use this one-time surplus as a fund source for any one-time needs.
And you have plenty of those needs.
>> yes.
>> and I would like to commend risk management and the county
attorney's office for this year. This was a fine year. These things don't
accidentally happen. They did a fine job.
>> I appreciate looking at it. I still think 4.5 million
is too high for [inaudible] in this county. And that's a personal feeling
I have from watching the budgets now for my 10th year. And so I steu theul
that's a lot of -- still think that's a lot of money and nonetheless I will
continue to exercise patience with us and let's see if we can learn from our
past actions. I would assume we will learn. And -- but is it proper then,
judge, to move that $996,000 to -- as a one-time surplus to be used for the
markup tomorrow?
>> makes sense to me. Do we normally do some written resolution?
>> there's a declaration that legally needs to be made. And
so the county attorney's office needs to draw that up, but I don't see a problem.
The department in our department and the county attorney agreed it's not as
though there's a disagreement on the 996. So -- and it's legal if there is
a declaration.
>> yeah, and --
>> what's to indicate -- our intention to move 996,000.
>> so we can use the money for one-time expenditures, as
I知 looking at our --
>> we'll bring you the declaration as soon as it's ready.
The withdrawal will take place within 90 days of the -- within the first calendar
-- first 90 days of the calendar, the new fiscal year, so October 1st.
>> seconded by Commissioner Sonleitner. Any more discussion
of the motion? All in favor? That passes by unanimous vote. We talked about
[indiscernible].
>> yes.
>> any result you can share with us?
>> I believe that jessica rio has taken a preliminary stab
at that process and we will go through the details tomorrow, but she can report
her prediction of what is likely at a minimum and her hopes and dreams for
the future.
>> good morning. We will be doing first off tomorrow the
rebudgeting of the c.o.s as well as c.a.r. And once we do the rebudgeting
of the c.o.s, that's what we truly see what is left in allocated reserves
that's available for scrubbing. I have met with the county attorney on some
of my preliminary indications of what I think we can likely do and it's between
1 million and 1.5 million. Maybe a little bit more, maybe a little less, but
I feel very comfortable between 1 million and 1.5 million given current circumstances.
Probably closer to 1.5.
>> so should we use 1.5 as a final figure or 1.25?
>> you are asking me? I would use 1.25 and be pleasantly
surprised rather than 1.5 and be unpleasantly disappointed.
>> tomorrow morning at 9:00?
>> no, you won't get it until the end of markup. But you
will have Tuesday, September 14th, to have final markup discussions along
with the 21st. What I would suggest again is if we use 1.25 and use the parking
lot technique, put the highest priority one-time items, use these for those
purposes -rpbgs and then if you have additional things that are lower on the
scale but you want to fund as resorts become available you, do so on the 14th.
>> I should note that my preliminary work has included moving
some of the current c.o. On to old c.o.s. So I would need to backfill some
of that c.o. In order to get you additional savings in c.a.r. There is additional
work to be done. That's why I think christian is saying it would be better
to use a lower number for now and then be pleasantly surprised with all these
-- you have to remember these projects need to be c.o. Eligible. R and I need
to work with the county auditor on that which i've done preliminary work but
there's further work to be done.
>> when you complete your backfilling, you will have freed
up some ongoing as well as some one time?
>> no, it would all be one time as far as they are all capital
resources. The question is whether i've taken projects off of the current
proposed c.o. List or off the proposed c.a.r. List and in so much i've taken
projects off the proposed c.o. List, if I backfill with c.a.r. Projects you
have additional resources in the general fund one time versus what we were
already expecting to go out for debt, short-term debt.
>> could somebody bring me up to [inaudible] I thought we
were going to [inaudible] better than we thought, worse than we thought, right
on target? It's all this last-minute stuff that gets dumped in.
>> we have the fourth revenue which is the latest and greatest
with respect to the ending fund balance which is composed of projections of
revenue as well as expenditures. There are some updates which are going to
continue this afternoon that we were planning to provide you at the beginning
of markup, but leroy may have it --
>> I can wait until tomorrow, but --
>> okay.
>> I just might mention that on Friday we did receive additional
certification on the fqhc revenue that is on a joined item that you are going
to be addressing. That particular amount was $73,500 more revenue, which would
reduce the projected expenditures against the general fund. So as a minimum,
that's additional revenue that we expect to hit the ending fund balance.
>> are we on projection related to the accrualals and/or
the uncompensated days? Those are all things that get dumped into the last
minute.
>> we will have an update on that for you.
>> I can wait. Is it bad news as opposed to good stphus?
>> I don't know the answer. Our assumption is at this point
we're a target.
>> I can deal with on target.
>> okay. Thank you.
>> on item number 9, fqhc shortage, the backup says there's
revenue that exceeds the shortfall.
>> it doesn't exceed. I think the projected deficit was about
-- is sherry here?
>> the only question whether we should plan on spending more
money or whether we think at least that's taking care of itself.
>> yeah, the projected deficit was $153,000. Now that the
new revenue has been certified it increases the expenditure budget and therefore
the projected deficit now is only 79,500 rather than the original 153,000.
>> okay.
>> and we had used the original estimate of 153 in our --
for the fourth revenue estimate expenditure projection. So it should -- you
ought to see the fund balance go up 73,500 at least.
>> any other big revenue items that we need to discuss under
revenue opportunities? I know we talked about the p.c.s and I guess guess
mr. Harley would be able to give us information on that. If not today then
early tomorrow morning. I have a i.t.s., $350,000. What's that about? Did
I dream that up or --
>> no, you didn't dream that up. That is an amount of money
that was recommended in the preliminary budget to be capital funded, which
i.t.s. Is indicating it is acceptable and reasonable to defer that expenditure
into '06. Therefore that frees up an amount from the preliminary budget.
>> should you wish to take advantage of that.
>> and yes, capital that's one time.
>>
>> [one moment, please, for change in captioners]
>>
>> so we're working on ending fund balance that's still out
there.
>> there are some things related on markup tomorrow related
to the county attorney's office?
>> I think the jury is still out on capso. And I think the
county attorney will be prepared to talk about that and give you an update.
I don't think it's --
>> probably not six figures, but could be high five, so to
speak.
>> the county attorney is aware of the deadline and he wanted
to make sure that he explained real clearly that he was not wanting to pay
this directly out of capso.
>> [inaudible - no mic].
>> i've also advise the county attorney because he wanted
to know if there were other resources. And I indicated that the general administration
does have resources should you choose to use those resources? And that's the
choice.
>> there's a discussion underway regarding the legal expenses
line item of hospital district in '05.
>> that's correct.
>> how much of that do they plan to reimburse since they
intend to reimburse the county for it in order to get that number certified.
>> we don't have that number and have not certified that
yet.
>> and the board of managers meets again tomorrow at six
p.m., And I believe at the end of the meeting they will have finalized their
recommendation on the budget, which will then appear before you on the action
on the 14th. There are various opinions on that line item for attorneys' fees.
And the board of managers' conclusion I think will be known tomorrow evening.
>> even though we don't know what the item is, we know that
there's some amount that's coming that can offset, so we'd be privy to that
information, even if it's just for information only.
>> that's correct.
>> because the law does require that the county attorney
represents the hospital district. I mean, that's the way the law is written,
and it is logical that the hospital district would pay Travis County for those
services that they offer. ,. Any questions as far as reimbursement of that
expenditure? Anything further for item number 4. Thank you very much. We'll
continue this discussion tomorrow morning as we start markup.
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Last Modified: Thursday, October 27, 2005 10:34 AM