Travis County Commissioners Court

September 14, 2004
Item 14

14. Receive and take appropriate action on presentation of budget for the Travis County hospital district from the board of managers. And we do have the interim administrator and several members of the board of managers if not all members. Do we have enough chairs there? I see 8, Commissioner.
>> good afternoon.
>> would you like to us begin, judge?
>> it's not form mall over here. If you have a seat, we look at you, it's time to start talking [laughter]
>> our council administrator has reminded me that the first thing that we need to do since we all wanted to come be a part of this presentation, we actually needed to post a meeting of the board of managers of the Travis County hospital district, mr. Collins has advised that we should call that meeting to order right now so that we are lawfully gathered. The sole item on that agenda is to present to you the budget that we adopted on September 8th. We appreciate the chance to come. We appreciate the chance to serve. I think that you know everybody, but I would like to introduce any colleagues, with whom we have all become quite familiar over the last month or so. It's been a privilege to serve with every one of these people, we thank you for that privilege. Starting on my right is carl richie, vice chair of the board and chair of personnel committee. Frank rodriguez former city budget director now principal in capital linkages also on the budget committee. Tom young former administrator at brackenridge and the former administrator and -- of the Austin regional clinic. He thought he had retired. He's chair of our budget committee. We have worked hard on what we are going to present to you. You all know jim collins, rose lancaster has been a long-serving member of the fqhc board and has a tremendous amount to contribute to us in terms of how the clinics operate, how that works. Rosy mendoza is a principal in r. Mendoza and company accounting firm, a cpa, dr. Donald patrick is currently serving as the directive director of the Texas medical examiners -- state board of medical examiners. I need to get that right. He's also a neurosurgeon, once you are a sewer ro surgeon you are always a neurosurgeon, he's also a lawyer, he also plays the violin and he climbs mountains and he is going to make a serious effort to get into the senior olympics in this next round. We are talking to him about taking up ballet dancing next. [laughter] but it's a wonderful group of people. And we appreciate the chance to come. Since we started meeting on August the 2nd --
>> the one person missing is mrs. --
>> we have dr. Tom coop-wood the former chief of staff at brackenridge hospital, a retired surgeon, one of those that thought he had retired also, but he's called into full service and victoria chu, who has recently retired as the executive director of the state agency that governs registered professional engineers and she's now operating her own real estate business. Those two could not be with us today.
>> okay. Since August 2nd, we have met seven or eight times. We have developed a draft budget with our budget committee, which we previously introduced and with mr. Collins as our administrator carrying and laboring on that. We held a public hearing on that budget and had, I believe, 11 people come and testify. And at that budget we had all -- at that hearing we had all kinds of customers for any additional funds that we might possibly have, but we got some good input at the hearing as well. And on September 8th, we actually adopted the budget that we are presenting to you today. You have the budget, I think, that jim collins sent it around to each of you. I want to just talk to you a little bit about some of the key points in it. And then open it up for questions. First of all, I would point out that this budget does exactly what we told the voters we would do in the referendum in may. In that it is predicate odd a tax rate of 7.79 cents per $100, which is, I believe, going to be exactly the amount by which the city of Austin and Travis County reduce their tax rates as a result of the creation of the district. The budget also permits the availability of an additional $5 million of funds to deal with the critical issues of health care in this county and you see that in the line item budget sort of at the end, in the line item that says enhancement program. Thirdly the budget does not result in any lowering of he gibility requirements for the m.a.p. Program or any other eligibility requirements. It preserves those that were in place when the district was created. The budget also specifies, you see both in the front page and in the back, total reserves of -- of 12,428,231, which consists of $10,700,000 which the city authorized yesterday in their -- at least their first vote on their budget. And then an -- in an ordinance they considered yesterday. Also includes a 728,231 which is it is the first trench of reserve contribution that you all authorized last week and if you look at that total and then count the second trench, which we have not put in here because this is the amount of cash that we anticipate that we will have on October 1, your second tranch would get us to a total reserve of $13,200,000. We announced a couple of weeks ago, after carefully thinking of all of this, that we would like to get to a reserve of $15 million or higher. And we are very serious about that. And think that we can do that. And we plan to do it over the next couple of years. I think that we are going to have to continually monitor the situation in terms of what our reserve should be. I think there are those who on the board who think we should continue to try to build a reserve higher. As we go along. But I think that it's just something that we are going to have to look at as we go. In addition to the $10,700,000 that was authorized by the city council yesterday for contribution, the city has agreed to put in the interlocal agreement that we are still working on and which still needs considerable work, but which I believe several people are working on hard, to contribute the cesar chavez building at 1111 cesar chavez to contribute a deed to that property. The arrangement that's been involved would be the district moving into that building sometime in 2005. Right now that building is for the most part occupied by about 60 people who are in m.a.p. Program which work for the city as part of their program and another 18 or so people who work for the city in the health and human services department and so appropriate transition for the 18 people who are -- from the health and human services department would need to be worked out and we would need to complete a due diligence investigation on that building, which I believe the county is going to help us with. One of the many things that we are getting help from you on is conducting a due diligence review of that building. But it's been reasonably refurbished, I say that in the last five years or so.
>> six or seven.
>> it's about 15,000 square feet or more, 15,000 of office and another how many of --
>> [indiscernible]
>> okay. Of warehouse space. We actually had a board meeting over there at one of the -- of the third or fourth meetings, I guess. That they all flow together now. We've had so many of them. And we think that it is a suitable place, hopefully, to consolidate lots of the folks that will be involved and owe-- in what we are doing in health care. We attach a value to that building of have in the neighborhood of $1,500,000, we haven't done any appraisals, that's sort of our rough estimate. In addition to the real estate, we would also get what we have referred to as the stuff that's in it. That goes with the -- with the community care department but not the health and human services department. Those 18 people when they move will at least need to be able to take their desks and chairs, so on. We also sort of as we look at the contribution side of this, think of other contributions that are being made by both the county and the city. Thus far we have been able to receive gifts from the county in terms -- not gift, but gracious extensions of assistance from the county auditor's department in terms of bookkeeping and accounting services. From the purchasing department, from the administrative services department. From the legal services department. And from sherri flemming. We are getting lots of help from the county, it's very valuable. We are going to get an addition from the city, they are going to sign as part of this interlocal that's being worked out, a contract to manage the clinics. To manage our leases with seton and utmb and to serve as a paying agent for the district in the initial phase of the district's life. And so we've got a lot going on. And -- in that interlocal that needs to be worked out and our lawyers are working hard on that. Other sort of highlight of the budget that I called to your attention is that we settled on a salary range for the administrator of between 150 and $200,000 and the detailed line item in the budget puts that salary at $175,000. We have given a lot of thought and discussion to that. I?m not sure that we are all of one mind as to where that ought to be, but we felt comfortable I think with that range. We have settled on and the budget reflects the legal fee budget of $220,000, which includes budgeted amounts of approximately $170,000 reflecting anticipated charges from the county attorney's office, which would be serving us as our primary outside counsel and the potential of spending up to $50,000 for outside counsel fees if we do need to go outside for counsel for anything. We have in the budget $125,000 for auditing, an additional $20,000 for appraisals. It's thought that as we have some one-time expenses that we are going to need to deal with, as we create our first set of books, one expense is to have an audited balance sheet as of October 1, which reflects what our assets and liabilities are on that date. And probably will include some sort of an inventory function to be sure that we have got a proper list of all of those assets that are going on on our books. We also need to conduct some appraisals of both our real and personal property assets so that we can properly book those assets initially. And start accounting for them properly. So there's a one -- there's some one-time charges in there. Then there's a second audit built into that $125,000 which is the year-end audit that would be performed just as you have your year-end audit and have to budget for that. We are budgeting for ours. Perhaps the biggest thing that's -- that's in this budget is a 41,818,744-dollar item. Which is anticipated payments to the city of Austin to operate the m.a.p. Program and the fqhcs. That represents some increase about 3,593,000, is that the right number? From last year? Trying to match apples to apples so that you can see sort of what expansion is there. And there's a list of all of those increases somewhere. The three that sort of jumped out at me is -- is comprising most of that 3 million -- 3,593,000 or a 12 percent increase in m.a.p. Enrollment on a year to year basis, costed out at about a million-six. A $769,000 amount for salary increases, both at the city and at the county, and what's the $423,000?
>> that's the increase in pharmaceutical costs, which continue to be a -- to be a major escalator type of problem that is going to require attention on down the road. Those were the highlights of the budget that we wanted to just be sure and call attention to. I think at this point i'll stop and ask approximate if our colleagues have anything to say or our friend and administrator mr. Collins has anything that we think we ought to add and take questions in terms of our presentation?
>> anything from the court, questions, comments.
>> I have a number of questions, i'll defer to somebody else if they want to go first. Related to the $175,000, you have some other line items, is -- does the 175 include some of those benefit line items that you've got there or is the 175 inclusive of benefits.
>> are you talking about the salary line?
>> yes, sir. On page 1, the 175, beneath that another 181. And I?m not sure who that actually refers to.
>> the 181 are the other employees that we are anticipating, I think three other employees that we are answer operating hiring during the course of the year as well. And then the -- the lines following that, the fica, hospitalization, life insurance, everything but the salary savings are the benefits. The salary savings recognizes that the -- that likely -- likely to bring these people on at the beginning of the year, so that's a bit of an offset to it.
>> we don't have broken out in those other line items any benefits related to the 175,000?
>> yes, they are included.
>> they are included.
>> yes. Those are the benefits related to both of the top two items.
>> wanted to make sure of that. Great. Did you all -- at one point you all were looking at some kind of i'll call it a forensic audit for lack of a better name. Where did you all wind up on that? And is that going to be codified in some way of why you might be taking it out because you are getting something someplace else.
>> well, I think where we are came out on that was that we did take it out. We saw that item as an item if there was going to be dispute or controversy with respect to contributions by the city and county as something that might be of the initial step in trying to get to the resolution of that. We feel like we are, at least from the standpoint of the district, at a resolution of that issue. The 10,700,000, the m.a.p. Being, the items:rest of the interlocal, there's some other aspects to it in terms of a long-term lease on the -- on the shared use city clinics that would be on the same terms as the shared use county clinics, so it's the same deal. But that would be a conclusion of -- of the legal issue with respect to -- to what the right reserve contribution is our feeling was if we were going to spend $200,000 on a forensic audit and we had resolved that issue that the expandture of that money -- expenditure of that money would not be wise in terms of trying to look at other physical assets and things of that sort and the approach we wanted to take there that we would have a physical inventory there of assets so that we could list them, produce a detailed balance sheet which generally accepted accounting principals, this start-up audit that we would get, which would not be a forensic audit, but would be a regular g.a.p. Audit, they would test those, of course a g.a.p. Audit doesn't involve the complete examination of every table and desk and chair that you have or whatever. But it would test your inventory of -- of fixed assets and test other things about your financial statement. That's where we settled on it.
>> there's another line item, i'll call it the jack stick amendment. And I don't know whatever happened with that. There was a great deal of discussion about whether you all needed to set aside some amount of money because of an interpretation of what was in the original creation language about whether that was something that immediately needed to happen or it was something that was a little bit more language-term.
>> the number that you see there, [indiscernible], is -- is a very rough estimate and -- we have not had an opportunity and we -- I mean, our plans there, frankly, are to talk with the entire Travis County legislative delegation, including representative stick about what their intention was with respect to that and then see if -- if perhaps we could find a partner or someone else that might want to go in with us on that. The idea being to try to get that number down as low as possible, but also to be respectful of the legislature and the fact that it is in the statute and that we don't want to ignore it. We didn't feel like we could pull it out of the budget, consistent with -- with what -- with the -- the statute doesn't say when it has to be done.
>> that was the question, yeah. But we felt that in order to keep good faith with the legislature, that we should put something in there for that and then we would just work that. We wanted to be sure we had enough in there so if we needed to do a full-blown study in this budget year that we could do that.
>> my last one before I turned it over to others, related to what were the promises, I know -- to the voters, there was a lot there about the rate we thought would be during this first year. I think what mr. Maxwell turned over to everybody is absolutely consistent with what the voters were told. We talked a lot about the transparency. Can you give me a sense, clark or anybody else, related to the enhancement, did you think that the voters thought there would be enhancements to indigent health care from day one in terms of the creation of this district or whether that, too, was a bit more long-term, but that certainly was a goal, but you certainly didn't expect things to be bigger from day one and perhaps that's a place where if you've gotten hancement moneys left over out of your allocated out of the unexpected that's the place to concentrate. Otherwise that enhancement money come move down a couple of line items into an unallocated reserve and build that line item up.
>> I think that -- we have not had the opportunity as a board to fully discuss our views on how we would spend the $500,000. I mean the $5 million. [laughter] I?m very anxious to hear the views of the people, particularly the people that have experience in health care who understand our system or what passes for a system in the country. I think that we look at that $5 million and say that our first priority is going to be hiring an administrator, a permanent administrator that -- that has vision and the capability to lead and to lead change in this area. And to study together what ought to be done and be very careful about making commitments of that $5 million. For fear that we would commit $5 million and it would come back next year and say you remember me when I was five, I?m now seven. We might not have the seven. So I think that -- that we are going to be very careful about how we commit those dollars and we are going to want to be sure that they are committed wisely. I don't think that the voters would have heard that we were going to immediately pour $5 million on October 1 boo the budget. But -- into the budget. But we felt it was important to be able to show in the budget that we had built a house that was capable of doing that. We don't spend it all, then we will be able to carry it forward. Put some of it in a reserve and if not all of it, and I think we will spend some of it.
>> okay.
>> I would -- other colleagues had -- that would like to -- that would like to -- to take a shot at that?
>> in my mind, included in that is flexibility to respond to recommendation that's we received from a board from both the city and the county staff at the beginning. There was something like a million-six worth of either enhancements, recommended enhancements to the -- to the currents structure and the m.a.p., R map and fqac system. In addition to that, there were discussions during the election and with the city and county staff about organizations like the indigent care collaboration and project access, which you all funded last year. And so those are -- those at least those things are things that I think that we will be considering as a part of the distribution of those moneys. That's in that $5 million.
>> psychiatric care and the trauma center diversions were very much a part of the publicity given this that started it, the whole idea of Travis County doing something now about it. So -- so I think those would be very important things to listen to. For expansion. Or for enhancement. But not committed to those, that we list them all, prioritize, public input.
>> this is the part b, then I swear I?m finished. But if those are ongoing commitments, then -- and what transfers are going into the unallocated is 7 million and that was considered made up of one-time moneys, how are you all going to build up the unallocated without basically saying when you do have new attention revenues coming in in the next years, you are going to intentionally have to set aside dollars to not spend knowing that all of those pressures are still out there. Because you all gave us a sheet in terms of what other -- what other systems are doing and seven million pales in comparison to what other large urban hospital districts are doing to shore up in a very uncertain world of indigent health care.
>> I think that you have to look at now just the 7 but the 4 ... And 800,000 as part of our reserves. I think we wanted to be conservative about not loading the unallocated too much in the first year because this is the first budget that we have ever done. The advice that we were hearing from lad patillo and others is once you put something in that unallocated, it's a financial sin to take it out. Unless there's true emergency of the sort that is very unusual, I think that it's fair to say, you know, I went over and talked to the city council about this yesterday, there was a lot of concern over there, that -- that -- about how we view the total reserve. I think that it's fair to say that we look at our total reserves as a birth right, as an inheritance, as something that we are going to be very reluctant to commit to spending on a one-time, you know, in an operating budget and so I think that it would be our expectation that if -- that if our budget works as we hope that it will, that we would take a substantial amount of the 4,878,000 that's now in the allocated and move it into the unallocated reserve. I want to invite comments from my colleagues on that, we had a lot of discussion about that the other night. I think that we had to use, frankly, lots of different views about -- about it and we settled on these numbers and -- but the thought was we wanted to maintain flexibility this year because it's our first budget year, but that we would take a lot of the 4,878,000 and put it in the unallocated reserve. We also think there's a good chance that we won't spend this year's budget not -- not focusing so much on the five million, but other cost items in there that we hope that we don't spend all of where we could have some savings and I believe the budget actually projects a fund balance or the ability to contribute to the reserve, 200 -- 230 what? 49?
>> is that right?
>> the reserve does have 200 -- the reserve is funded in two ways. Part of it the cash transfers from the city and the county, which are one-time cash transfers, but there is 249,000 of ongoing revenue that is not included in any other expenditure line item, so that will be 249,000 every year added to it. It's -- it's as ongoing revenue funding and reserve. In addition, I would like to say --
>> Karen, I wanted to answer something and add to what clark is saying, but I also believe that some of the expenses that we have in the current year are one-time expenses. You know, so we won't be incurring those expenses and hopefully adding on to our reserves next year. And in addition, I also believe that -- that there's an ability to -- to increase the revenue of certain line items in the future. That could also add to our reserves.
>> I think regular contributions of reserves are a budget policy that -- that you know we -- we got into this scheme fairly light and really had to accept a lot of stuff that was -- that was developed and given to us. I think in our deliberations as we head into future years budgets, one of the things that we will consider will be the kind of policy that you are talking about is -- is to budget into our expenses, if you will, a regular contribution to get us to a certain point to where we want to be in the future.
>> questions from the court? We do have one citizen that's signed in to give comments.
>> have we gotten any information on el paso? I see that we have got a message left -- I mean, it would be an interesting extrapolation there since they are close to our population and they got 158 million dollar budget, do we have any idea on what they -- on what they told us for the 2,000?
>> we have not heard from them, Commissioner. We don't know what their reserve is.
>> okay. Because I mean it's -- in -- two things y'all that I -- first of all, let me thank you for doing this job. I know how much time you all are putting into this thing, this is incredible to ask citizens to, you know, belly up to the bar and do something and especially for getting no pay. So I really appreciate each and every one of y'all for doing this. You know, at first blush, I mean, you're always concerned about reserves, I mean, even I have gotten to the point where the county really hammers on you enough about reserves over here which is I guess running the sports plex I never had to figure out whether I was a triple a or a triple l bond rating probably which was the case. But it's obvious to me that so many of these financial entities, their role is really not just the job that they do, but their reserves is probably how they are rated. And I?m -- I probably am not going to get over $33 million. And that's not y'all's fight. I understand. I mean y'all probably don't want to be part of that. But I will continue to ask that question, but if you just look at percentage of total budget on the right side of the page that you all gave news the reserve balances, I mean, boy it's pretty all over the board. From 15% to 50%. I would say even if you load up, our 12 million on our $97 million budget, we are somewhere around 12%. We do know that we are going to try to get more reserves, and I think Karen you know hit it right between the eyes. How do you increase reserves and how do you also perform things that -- that the community was basically sold and let me tell you, mental health was a large part of just about every -- every part of any kind of a -- of an event that I had gone to where -- and I know that we have a judge in Travis County that was highly interested in mental health. So if we are going to try to grow these services, then we do have some real challenges. Of course we wouldn't have near the challenge if we could get somebody to put the kind of reserves in this thing that need to be in reserves that were in the reserves at one point in time. But not to get drug back into that. So I really am concerned about that, number one. Number two, I understand that this last Saturday we did -- there was a meeting where we did have our purchasing agent at a meeting, clark with the city and from what I understand it was everybody that the city -- I mean, most of the hierarchy with the city along with legal representation. Given that we have one large line item in this budget, that being a $42 million or around a $42 million payment that we are going to have to make to the city of Austin to operate this, now, I don't expect that you ought to get out and operate them. We can't. I wondered a long time ago when somebody knows more about your business than you know about it, you are subject to really being in trouble. Now, fortunately, we have got a number of people on this board that -- that has enough, you know, -- has had enough history that -- that I?m going to have to really lean on some of y'all because I?m not really sure that the small briefing that i've had, since our -- not even from our attorney since our attorney wasn't at the meeting, but I understand this was a pretty broad asking from the city of Austin where -- where the liability basically was an solved by the city of Austin and -- absolved by the city of Austin and came the hospital district's way. I?m really -- I really want to make sure -- I would think that we really need to get comfortable on the interlocal agreement. Way before we are anxious to belly up to the bar and sign-off on the budget. Quite frankly, didn't look like war and peace, but it wasn't something that you could read over lunch and I?m hopeful that we are going to have the ample time -- I don't know that can do that -- I don't want to be overly pressed to do it by October 1. We really have to do that because, you know, we're really going to have to set this budget before that. I?m going to be very uncomfortable y'all with us signing off on this when we have a document that I think that we probably have some real concerns over. I mean david, john, have you all read the -- the -- the interlocal agreement?
>>
>> [one moment please for change in captioners]
>>
>> the district board has all the authority to sign this agreement and doesn't lack any authority to effectuate that agreement. That's not my opinion. I understand that's not what the district board believes is the opinion either. So I think this is just something that the city did mistakenly or otherwise, and it's going to be corrected.
>> okay. Well, if that's the case -- but those two things are -- no, between reserves and interlocal agreement. And the people who have forgotten more about this industry than I will ever know. But as an elected official, i've really gotten to look at you folks in the eyes and say, I really hope that y'all are going to do the job that -- that we all know that the health care district, you know, needs to do, and I just -- I?m cautiously, you know, going in to this thing -- I think you wanted to say something.
>> first speaking to the interlocal agreement. The discussion this weekend was foe discussed mostly, -- focused mostly -- while we were just handed this agreement on Saturday morning, we didn't have a chance to read it before we got there. And we did not comment or really discuss specific language in the draft. And the draft was prepared by the lawyers for the city, and as you can expect, the city in that draft was well protected. The focus of the discussion this weekend was on what I would call deal points, that should be in the agreement. And I think there is substantial agreement in terms of what those deal points are going to be. There was lots of spirited discussion on some of those issues. I think we've gotten a tentative resolutions on what the points are going to be, but we haven't begun to finish the language of the agreement. And my stance is that we do need to come back to you once we've finished negotiating that agreement and present it to you. And once we're prepared to recommend that you approve it, ant we're not at that point. As mr. Collins says, it's not soup yet. But ij that the framework for the agreement in terms of the underpinnings for it is there. And it's the same issues that I spoke to you about when we came to your office and we visited with each of you individually about sort of what we thought the deal points in that would be, and they're there. There's going to be some continuing negotiation on how it expressed in the agreement, but I believe that we will get there. On the reserve issue, I look at our budget, although it has a 97-million-dollar number in both places, of that amount, 24 million is in there as dispro send up. It's money that the district will send up and get back within a week. And while I think it's properly set forth, I think the reason it's set forth this way is because this is sort of the way the county does things and we want to delay it out in a way that it makes sense from a check writing and budgetary standpoint. You can coat it that way and so on. But I really view that 24 million almost like an investment. You send it up and get it back. It's not a health care expenditure. It's something that is a technical thing so that you can get the match that flows through the seton lease and comes to us. I look at our budget as approximately a 75-million-dollar budget. And I look at the 15-million-dollar reserve as 20% of that. And while we had testimony and presentations from various financial people about hospital districts needing somewhere between 90 and I believe it was 132 days worth of cash and looking on that sheet that you're looking at, there's some large hospital systems that own these large and operate these large public hospitals that also have debt, big debt. Our hospital has no debt. It has this unusual situation. It's difficult, we found, to find sort of a normal hospital district that looks like us. We thought that good advice was to try to get somewhere between 90 and 120 days' worth of cash, and I think that's our goal. If you had -- if your budget were 60 million and there are ways that you can look at it as 60 million, given sort of the actual checks that we're going to write, then you would get 90 days cash on a 15-million-dollar reserve. But that's sort of how we tried to get to some number. We also wanted to be sensitive to this notion that you can over reserve. If we ask the county for a contribution of our reserve that's so large that you have to increase your taxes, that may as well be us increasing our taxes. It's the same taxpayers and we're taking that money out of their pockets and we're putting it in a reserve that's going to earn two percent. That we would love to have, don't get me wrong, but the taxpayers would too. So trying to find that spot that is a responsible spot, that's not -- it's kind of like the goldilocks and the three bears. It's not right. We tried to find out and 15 is where we came out. We're starting 1.8 million below that.
>> and we did -- I guess it depends on what numbers you apply to that numbers. If you asked me did I raise taxes this year, i'd say we're probably going to sign off on the effective tax rate. And the effective tax rate to me tells you that you're going to write a bigger check for your home this year. Than you did last year. So yeah, I raised the tax. So it's one of those deals where did I raise it? If we weren't having to come up with an additional couple million dollars or a million and a half and a half to throw y'all's way, so you're right, whether I take it out of my budget, whether I take it out of your budget, it's just taxes to folks. [overlapping speakers].
>> I understand what you're saying. And I do agree, who knows what the right reserve is. Now, i'd probably differ with you on you can over reserve. I think most people would let's over reserve. That's a good deal. But hey, we're going to -- we're going to work with you. I mean, I think that the county has shown, you know, that we're willing to work with you and put the dough in because that's the right thing to do for this community. But there are a couple of these questions that I still have lingering for me, that i've got to somehow try to resolve, but you know that because you've bit them off a couple of times.
>> Commissioner, i'd like to respond to your questions about the draft of the contract, the interlocal that's been circulated. Because there have been some concerned response to that, that I think is probably premature, whenever you have a contract, some lawyer on one side or the other has to sit down and write a first draft of the contract, and typically whichever lawyer does that writes it in a way that is without completely distorting the deal, slanted as heavily in favor of his or her client as they possibly can. And the city came up with that first draft of the county. We've been working on some outlines. They came up with the draft, and that's exactly what they did. And good lawyers sometimes do that. And sometimes good lawyers don't do that. But that's what they chose to do. That is a city draft. That does not incorporate any of the changes that the county attorney's office will make in a response draft that we'll send back to the city. We will go through there and we'll find all those things that got tilted overly in favor of the city and we'll tilt them back in favor of the district or back towards the middle hopefully. And what I can tell you is that that draft is not the contract that will be signed. And I predict that there will be a number of substantial changes in that contract before it's signed. So I think the responsive concern to that contract and that people kind of are having a little bit of panicked feeling in their throat that this is what the district is going to agree to is way premature because that contract as it's written is not what the district is going to agree to.
>> and I just have a feeling that we're going to continue our conversation. It's going to be ongoing because the other thing that I remember seeing on the literature to ask people to vote for this is it was going to save money and it was going to save lives. And so -- and I think folks kind of depended on that. So I have a feeling that this conversation will be ongoing for, you know, a few years here until we all kind of figure out where we are. But I was real glad to see that you have some money set aside for legislative assistance, legislative help. The dispro money I think is always one of those things that is kind of out there that the state likes to propose different things for at different legislative sessions. And that's the one that I think we're going to have to keep an eye on and make sure that they don't cripple us, the new hospital district, any more than it has to. But they have all kinds of scenarios on what to do with that dispro money. And so I would say for all of us we need to stay alert about that dispro money and the legislative session. But I think some of the other points have been covered, judge.
>> Commissioner Davis?
>> yes, thank you, judge. Jim, I guess the meeting that was held Saturday and the memo or the paperwork that was generated from the meeting that they talked about on the dais, of course I don't have a copy of it and I don't think I have a copy of it. I definitely would like a copy of what transpired in the actual meeting of the information that was contained in that memo. I?m kind of at a loss for that information. But in fact, we have talked -- several persons have answered from here in the dias, especially the ones I guess as far as the five million dollars for the enhancement, which I guess is a step in the right direction. As far as how y'all explain that particular money. It's been mentioned several times as far as the dispro money. It can be a moving target and we've got it to make sure that we keep that because it's five ways that really can generate the type of revenue to go into this particular budget process. The tobacco settlement money and all the other thigz that are part of generating revenue for the budget. I?m kind of concerned that we really get to a place where we can move forward. I think the community is kind of looking forward for us to go in a direction we can go on so we can ensure that indigent health care needs are continually met at an effective type of manner. And i'd like to thank each of you. I think you've done an outstanding job in the length of time you've had to deal with some of these issues. As you know, I have posed the county about what about the reserve? You've heard several comments brought up about the reserve that I think are very necessary in any type of budge setting, and I think y'all are all aware of what those requirements are to keep an effective reserve on hand. And of course looking at the urban counties that have substantial reserves doesn't necessarily mean that they are in better shape than what we are in at this particular time. Again, there are still in unknowns that I would still like to get clarified, especially with another memo out there. It's kind of clouding me up because there may be some questions generated from that memo, and I have not had a chance to investigate or review or analyze. So with all of those things, I think again that we're in the right direction. I think you've done a well thought out job, and of course the public must know that all of y'all are volunteering to do this. So I just want to keep heading in the right direction and make sure that we can provide the health care needs here dealing with our medicaid clients and others here in Travis County. And of course, legislatively there are some things that I?m still pushing for, and I think you probably remember those things when I interviewed you, when we all interviewed you, but one thing I kept hammering on is it was to make sure during this legislative session that we look at cost sharing possibilities of other county residents using this particular hospital district to be sure that they share in the cost. Of course, that means the law has to change to do that. Again, that legislative stuff and all the other things we have before us, we have some serious challenges, but I don't think it's nothing that we can't overcome if we keep working together. Thank you very much.
>> thank you.
>> you're talking about a memo. Is that an actual draft of the interlocal agreement that you would like to see. There is a draft that our lawyers are working on. I guess our hope is that we can get our budget approved so that we can start working forward understanding that we still have to finish negotiating the interlocal agreement. And that it will come back to you for approval, we'll need to approve it also. And logically it would work just like our budget does. We would negotiate it. We would keep you all advised of what it looks like, the same lawyers that are working on it, and we would approve it and we would bring it to you and present it to you. And that would be my hope as to how we would take it.
>> how much time do we have in this overall, david? Ideally we have the contract in place before October 1 because the contract contemplates the services by the city will start on October 1. And we anticipate doing that. It is possible if the contract is not done by October 1 that we might siep it on October 2nd or October 10th. Nothing is triggered statutorily if the contract isn't signed by October 1, but it's certainly our expectation that the contract will be in place before the start of the fy '05 budget year for the district and for the city and for the county.
>> you all I think have a meeting scheduled for the 28th, which is a Tuesday. We have?i a meeting scheduled for the 21st. We haven't scheduled any after that. But my hope would be that either on the 21st or sometime between the 21st and the 28th we could authorize an interlocal subject to your approval and bring it to you on the 28th.
>> the city yesterday this their budget resolution included an ordinance that authorized the city manager to negotiate and execute the interlocal agreement.
>> and so have the ability to in essence close the deal once it's fully negotiated and authorized on our side. I think their concern, given the fact that we have two levels of sort of approval. And that's where they're going with this opinion business is that. We've gotten it approved by everyone who needs to approve it. My sense is that both houses need to approve it in order for it to be valid.
>> [inaudible - no mic].
>> with regard to the negotiation of this contract with the city, so that you understand you understand the impact on the budget, there are a couple of things that are settled. Obviously nothing is final until the city signs it, the district signs it and you guys approve it: but two things that do not any longer seem to be moving parts are that the charge paid by the district will total no more than this 40,180,000. And that the city is going to transfer 10.7 that will be funding for our reserve so that there are a bunch of moving parts to a lot of things being negotiated, but the budgetary impact things, while not final until everybody signs off on it, do not seem to be on anybody's plate for further discussion. Those seem to be settled. And they are settled enough that I as the straighter was willing to make these estimates in the budget and the board was willing to vote for these estimates in the budget.
>> it's also conceivable that the right thing would be for us to have an interlocal agreement with the county just as there are things that the city is agreeing to do, there are services the county is providing, there are leases that are spoken to, and this, these points that we've talked to the city about, they're the same issues with the county. And I think we would certainly invite a discussion with you all about whether we ought to have an intrl that embodies -- interlocal that embodies that or an understanding or whatever it is. I?m not sure what right thing is. But we may might need to explore that.
>> somebody is supposed to be drafting those.
>> when we initiate it, we're fair. [ laughter ] Commissioner Daugherty?
>> I just have one quick thing that anybody could answer, I?m sure. It's last week's Austin business journal about st.david's new mueller -- clark, you and I have often joked about seeing our name in print and having comments, but somebody comment on this if you would on the board. Mueller, who has spent the past six years as a board member of the united way capital area says he would like to strengthen st.david's commitment to the community. It will bolster some of the funds that will be doled by but the new Travis County health care district. What does that mean? Is that one of those things that, again, I need to get nervous about the reason that st.david's and seton put so much money into helping pass this thing that -- is there a line that people are going to start getting in to get this health care district money?
>> the words dole out are of concern to all of us, I guess. I think that one of the issues that has come up since we first started discussing the hospital district is the fact that the public dollars are going in through the seton lease to support what's going on at brackenridge, they're operating the hospital, we're paying monies to seton which they then use to provide subsidies for physicians to show up over there, neuro surgeons, an anesthesia groups that may not take call over there if they didn't have that subsidy. And st.david's throughout the discussion has pointed out they do a tremendous amount of charity care in their system, and they don't get any public dollars. And I can remember neal kocurek, who is a hero to many of us who died this year, his theory is we discussed it -- and you all who worked on the steering committee remember that this situation should evolve to a dollars follow the patient type model. And that was something that was discussed and it wasn't discarded. But it was something that I think when we met, I think it was February in 2003 or something, we talked about that some and I think the conclusion was that we needed to take this step by step, that we needed to do the kind of things that we had to do to strengthen our regional trauma center at brackenridge. And that that was something we talked a lot about during the campaign. And somebody outside the city of Austin was asking me why should I vote for this. My answer tended to be because that might be your little girl getting out of that ambulance at brackenridge hospital and do you want the right neurosurgeon and the right facilities there? And that's an important thing for us to address. It's a priority in the community, I think, in term of the broad community. So I think that health care in general and central Texas and everywhere is in such bad financial shape that everybody is making their case for help wherever they can find it. And I think mr. Miller is a great person, he's a great choice. He's going to be a great leader for the st.david's system, but I don't think that there's a likelihood that we're going to be able to make a change this year in terms of -- and I don't think that the idea of doling out is the right notion.
>> that makes me feel better.
>> that's not an accurate description of how this district runs.
>> I would say that in fairness to st.david's, as clark says, they are bearing a substantial uncompensated care and?i uninsured care burden, and I think that certainly even short of any direct subsidies, which I?m guessing they would consider the brass ring, the more that we can through the district and the groups can strengthen the safety net, if you will,, that burden can be better supported than haphazardly with patients showing up with no financial supports.
>> can I comment on that? [inaudible - no mic].
>> the concern I have is that there's no end. Once you get started working with, let's say -- let's just talk about not st.david's, but let's just talk about an imaginary institution. And it has built into its financial situation areas where they have risk, which of course are uncompensated patients coming into their system. And they have to pay all their technicians and everybody else. And let's say we dole out some money through a system like that. The doctors are going to be right behind, starting off perhaps with the pathologists, the laboratory people, the x ray folks, the an teasologist, the emergency room physicians, the hospitalists, the internists who work within the hospital, don't have an outside practice, just work in there. And then you talk about the doctors that come in from outside, sprt specialists and the other physicians who did uncompensated care. For example, right now at st.david's, there's the clinic and I?m not sure what the financial arrangement is. I don't have any idea. I know there is some financial relationship with some of the doctors involved, not all. So once you get started down that road,, then we can spend every nickel we've got and every dollar we have in our reserves every year on that issue. And so what we really have to concentrate on and what is brought up by Commissioner Gomez was this money that we set aside to work for the legislature and talk about spreading out the risk to surrounding counties, the things that we have to do. As you can tell today, we have got a lot of jobs to do. We've got to get this interlocal agreement fixed. Then we've got to work about how we're going to make more efficient, wait in which we provide services, and both of those are big time issues that we have to spend a lot of time on. We decided as a group, and this group is wonderful to work with, we stied to take everything step by step. The first thing we'll do is get the budget approved, by ourselves first. And then present it to the county Commissioners. And then that's done and then the next step, which is to formalize our interlocal agreements, probably with the county, and for certain with the city, and then we'll start working on our contracts. And I think all of this is new. All of this we're doing for the first time. All of it requires a lot of study and thought, and nothing happens quickly with us. We kick it around and worry it to death because we don't want to do the wrong thing. So our meetings take a long time, and it's worth it. And I just -- I thought it might have been the time to share with you what I see are risks, our concerns, but that we actually do have a plan, stepwise plan established to do this. And were it not for the daily, daily meetings that our chairman was having with just about everybody, we'd be nowhere. And we owe him a lot. And I want to make that very clear. And without clark heidrich running this show, we'd be months away from a budget. I don't know where we would be. But he has -- the interlocal agreement would just be started. It wouldn't say anything about reserves because it took somebody who knows how to respect others and to work out a very, very, contentious, difficult issue in a very gentlemanly way so that I think that the district has ended up in a posture where it -- where it's friends with the county and with the city. We want to keep it that way. We owe you a lot. Everything we do you scrutinize. We trust you. We know that you're there doing the right thing and we want to do the right thing for you and for your constituents.
>> couple more questions. We're going to approve the four corners of adoption that we call the Travis County hospital district budget, but in the same way that we all approve a budget on behalf of all of Travis County, there are things that you don't need the Commissioners court's permission to move around. Like if I want to move from a training line item into a mileage line item, I don't have to come to commissionrs court. But we have these kind of double lines of thou shalt not that nobody gets to mess around with. So can somebody give me a good answer that if we say or we approve a budget that says that the unallocated reserve is going to be blank, that we have assurances that it will be blank and that it can't get moved around? What flexibility does this board have to move money around and what kind of things do they not have authority to do and need to come back to Commissioners court to get signed off on? Because I certainly don't want to be signing off on moving a postage line item over into a long distance, but I certainly would love to visit with you if you're talking about the unallocated reserve? So can somebody give me some general guidelines?
>> let me have the first shot at that.
>> the level at which this budget is adopted or the two levels at which this budget is adopted are set out in the budget resolution, which you have as part of the budget. After consultation with the county auditor and the county planning and budget office, and they were arrived at in an effort to try to balance exactly what you're talking about. The need for the Commissioners court to have an overall control over the budget to make the day-to-day decisions and move postage over to employee mileage or whatever. And you see that adoption levels reflected in the two documents that are attached to the resolution. One, a single page document that's entitled Travis County hospital district. This is the year 2005 budget that has revenue and expenses all laid out on it in what I?m referring to as categories. And then the line item expenditure control. So what -- when you take the resolution that's adopted and apply these two documents to it, what it means is that the way it's been adopted, if the district wanted to move funds from one category to another as set out on this page, it would require Commissioners court approval. The district can move funds among line item as long as they are within the same category. And the auditor will control the district expenditures and its spending in accordance with the line item expenditure control portion.
>> so when we see a line that says reserves, that has a little fence around it related to that you could not do anything without coming to see us.
>> that's right. In the capital category it was line item 80.02. And then there's the capital reserves. So there's 800,000 currently in the line item and zero in the 80.02 line item in the way this was adopted. So the board could move between those two line items if they made that choice. In the reserve category that has two line items, allocated and unallocated. The board can't move those items out of that into something else, but they could move between those two items. I can assure you that with those particular two, there's extraordinary sensitivity to the need to not change the unallocated, what we have in the category unallocated and allocated reserve. The capital reserves is in the capital category.
>> it's not so much a question as think about this. Sometimes silliness occurs in the state legislature in terms of if you're not looking out, things get filed over there. So this is in the category of to be on the lookout for. Maybe that's why we need the legislative advocacy because I can just imagine that there be a local bill filed in a county of more than spital district says may of 2004 and that would only impact one particular county. But what I?m concerned about is when we set this budget that this is it. I know clark jokes about being on our couch all the time. We want to get y'all independent and on your own, but I?m concerned that there might be efforts either to try and dismantle the fw works to this point or mess with the good work to this point because some folks were less than thrilled about how this all turned out. Who have the ability to go to the state legislature and file things. So I don't know if there's going to be any silliness, but I think we need to be careful that folks don't try to file anything that can sneak below the radar screen. And even though it may not be successful, it's something that would then require you all to spend a lot of good time that is totally unnecessary because the voters have spoken on this. Whether you voted for this or you vote against it, the voters have spoken and we need to make sure that that vote respected and that nobody tries to mess with y'all.
>> thank you.
>> mr. Don zimmerman and then the county judge will have a few short questions. Mr. Zimmerman still here?
>> he's left.
>> okay. Sorry about that.
>> can somebody remind me of what we did with -- with the tobacco litigation settlement when it begins October 1 of '04.
>> the estimate begins may 25th of '04. The portion -- there are more tobacco litigation funds that will come to this geographic area because this is not included -- this does not include an estimate of the tobacco settlement funds that reimburse for jail expenses. So that money is going to come, if I understand it correctly, it's going to come down to the district, but the understanding is that money is passed over to the county for reimbursement of the jail.
>> this represents the projection of post may 25th, '04 funds from the city and the county?
>> yes.
>> non-jail.
>> non-jail, yes.
>> is the board of managers considering a debt issuness policy?
>> we have a number of policies that we need to consider, including policies relating to our reserves, frankly in terms of fixing what the circumstances would be, when we'd ever consider invading a reserve, an ethics policy that I know we have under review. I think there are a number of policies of that sort that we've got to work through.
>> I recall 15 or 20 years ago when the county had zero debt also. We cannot boast of that today, but the policy has helped us quite a bit. What are the standards of the dispro funds? Any recent update?
>> in terms of current year dispro funds or the likelihood the dispro will continue?
>> fund and I guess expectation for tomorrow.
>> this fiscal year funds, we've been advised that there will be about 3.7 million in one tranch and 845,000 in another. The 3.7 million is a year-end type payment that relates to the work done over the entire year. The 845 I believe is payment with respect to July. And of course, the way -- the way this budget and overall approach has been taken is that we would start the district for financial accounting purposes on October 1. So those funds, using that approach, would go to the city. And are in fact a part of the 10.7 that they're contributing. If we had tried to answer the question of how many angels dance on the head of a pin or when did the district start and what would the rights of the district versus the city in those payments be, we would have had a disagreement about that that is in essence resolved by starting October 1 and then having the 10.7 come back. We've done a lot of I guess you could call it due diligence on the likelihood that medicaid disproportionate share program will continue both from a federal and a state standpoint and others have been a part of that. And I want to invite them to speak, but I think it's our sense that it's not likely the disproportionate share would stop from a federal standpoint any time soon. From a state standpoint, we've actually had a meeting with Commissioner hawkins about that, and I would invite those people that went to that meeting to speak if they would.
>> good afternoon, Commissioners. In our meeting with Commissioner hawkins, he explained to us that the dispro money that congress is looking at appropriating for this upcoming fiscal year has actually been increased; however, there was an amendment attached to that funding that allows the state to take the incremental increase for that increased funding and keep it for two years. What they have agreed to do is hold all the public hospitals harmless, so we will not receive less than what we would be entitled to for the next two years we will not see an incremental increase. And just sort of doing some other investigation in washington, it's my understanding that dispro is fairly safe because it has been institutionallized. In fact, the house of representatives has a very large -- one of the representatives has a very large hospital in his district. However, that does not mean that the form in which dispro comes down may not change. There have been some discussions that it may come down in the form of a block grant to the state to be redistributed. But that is part of a discussion, but something that they are looking at maybe sometime down the road. But in the immediate future, there will an increase in dispro funding, but as I said, for the next two years the state will take off of their portion -- I believe what we were told we would sort of be the indirect beneficiaries of that because to extent that certain medicine ca cade patients that were not receiving funding through the state that may show up at our door now they may receive some of that funding because some of that increase was part of the $600 million that the governor announced recently and he came up to help with the medicaid and the chips budget.
>> the city and the county have different fund eligibility criteria. And the board's decision, I guess, was to leave that in place for fy '05. Further study with an eye towards uniform standards next fiscal year or fiscal year '06.
>> I don't know that I would say an eye towards uniform standards at any particular time. I think it's a commitment to just look at it.
>> I think what we're saying is that for the time being we're not going -- we decided that it was not appropriate to be talking about changing eligibility at benefit levels, but it's certainly going to be one of the things that we're going to study much more in-depth as we go through the year. I wouldn't predict how -- how we come down. It's a very complicated issue. And it's got difficult consequences to deal with.
>> okay. And I think at some point the lawyers will tell us whether that's okay. Speaking of lawyers, my understanding from previous legal advice from lawyers, our lawyers, is that the county must approve the interlocal agreement with the city of Austin regarding the clinics and with the city and seton regarding the operation at brackenridge.
>> let me try to answer it this way. We've gone through the statute some time ago, but depending on what the action that the district board takes, there are different categories of whether it requires Commissioners court approval or not. Without giving a whole lecture of what falls in and what doesn't, it's my opinion that the interlocal agreement between -- that's now being negotiated between the city and the district to handle the clinics is one of those that falls in the category that requires ratification and approval from the Commissioners court prior to being effective.
>> obviously the board would like for us to approve the budget today. And failing to get approval today, as soon as possible.
>> yes, sir, we would sure hope we could get it today if we could.
>> and we have previously collaborated with our kind auditor, and our contact day is --
>> one of the questions I had -- [inaudible - no mic].
>> it's difficult to isolate issues that y'all might be concerned about and we might -- when in fact there's an interlocal that we haven't interacted with. My concerns would be in terms of adopting a budget is, is the 10.7 separate and aprart from the interlocal. If it is not, I don't see how you can adopt a budget. If it is a part of the interlocal, then it seems that the interlocal has to be adopted before you can adopt a budget because you can't really set a reserve rate if that money does not come in. So that's just a question of staff, and I don't know the answer to that. The other concern I have is that y'all set financial and purchasing policies, and those are distributed to the board. And whoever is negotiating on our part, that interlocal must in fact comply with those standards. The one that I am obviously most interested in since I have to prepare the county's annual report, is that we have the information that is necessary and in auditable format so that we can prepare the county's financial statements. That's in all honesty my most significant concern. I have others as well. And the complexity of that interlocal will determine what information we have to have. And it is critical that the county be given timely access to what we need to prepare our statement from the district and whatever the city means to give the district to do that. And so just kind of as a reminder, it's very critical that that interlocal addresses that. In the financial policies that you adopted and gave to the district, it said that if we did not have them in a timely basis, Travis County could hire an outside firm to get the data at the expense of the district. The complexity of that interlocal and what they handle will determine kind of what we need. In other words, it's a very limited and it's a turnkey operation, that's one thing. If it is very complex and basically that contract is handling all the business of the district, that's another. So the -- so people can look at that the sooner the better because once October 1 comes, then we're kind of in play. And this is just the kind of things that impact what we would do.
>> have we given to the district in writing what our requirements are so as to the financial records?
>> yes. When you adopted them, I made a presentation at the initial board meeting and we've been in contact with the board. What we are not -- I mean, I don't want to get overly worked up over a draft of an interlocal because that's what it is, but I can tell you what I saw doesn't meet the terms of what i've just described. My worst fears would be realized if that in fact were the contract. So I realize it's just -- it's a document in progress, but again, regardless of -- I think Commissioner Sonleitner, when you said people voted for this and it's here. That's exactly right. But also the law is very clear that, a, y'all set the tax rate. B, you approved the budget. And because of that, it's on the county's financial statement. So we do have a responsibility to all of the people that pay taxes here, and where there have been a tremendous discourse between Travis County and the city of Austin, there are 21 other cities in Travis County that you all represent that don't get to vote for the people in the city and the people in the unincorporated parts of the county. And this board represents all those people, as do i, as do you. So I want to keep the concerns of all of those people since the oath of office I took represents every resident in Travis County. So those are just my concerns, and they may well be dealt with.
>> maybe we should take this issue with the city negotiators so if there's a problem we can get some county people more involved and we'd be happy to do that. It sounds like it's a pretty big deal.
>> I think the issue of all of the financial statements is critical and I think that was a deal point we discussed. We've got to have access to information so that we can respond to our auditors, who we have hired to produce audited, year-end financial statements that we'll then need to plug into yours so that they work. And that will be done. As I understand what the city did yesterday, they adopted a budget that included a cash contribution of $10,700,000. And --
>> do we need documentation of that, I guess? Is that what we need? Because I?m sure we can get that from --
>> my only question, judge, is if in fact that 10.7 comes regardless of the interlocal, then you really aren't in danger adopting a budget with that in there. But if in fact -- and I don't know the answer to this. If that is tied integrally to the interlocal, then it seems to me that you are hard pressed to adopt a budget since that 10 million is a significant part of your thinking without the interlocal. I don't know the answer to that. So that's just my --
>> we'll have this back on the court's agenda for next Tuesday and get that information between now and then.
>> I can give you that information now if you want it. I can answer susan's question about the 10.7 right now if you would like me to.
>> do you want to answer or do you want to see something -- documentation?
>> I think we'd like something in writing. The city council has not finished -- they've pretty much got most everything done, but they have not concluded.
>> unless I?m gravely mistaken, the 2.5 million from the county and the 10.7 million from the city are in exactly the same position. The city has voted in the first reading of their pujt to include 10.7 million in their budget to pay to the hospital district. You guys in your markup voted to put 1.7 million in the budget, and you've made a commitment, although I don't think it took a vote, to 700,000 by at least '06. So I think those two are in exactly the same place. I do not believe that the 10.7 from the city is dependent upon the interlocal agreement. But the interlocal agreement will incorporate the 10.7. If we took that interlocal agreement and threw it in the trash, it is still my belief that 10.7 is coming from the city regardless. They will be the in the interlocal agreement. So you're going to see it in the drafts of the interlocal agreement. The budget -- every revenue item in the budget is just like for the county, an estimate. You cannot know with absolute certainty that sums are going to come in as revenue whether you're the county or the city or the hospital district or any other government. I as administrator and as a board, we're very careful not to include any sums of cash transfer from the city or the county in the budget until we had a level of confidence that those sums were going to be received that allowed us to make that estimate with essentially the same level of certainty that we made estimates about taxes, tobacco litigation, all of those other revenues. So to me personally, I am confident that these are the revenues that we're going to have, including the revenues from the city and the county. Can I say with 100% certainty that that's true? No. And I won't be able to say with 100% certainty after budgets are adopted by the city and county and contracted are signed. But we have a confidence level at the same level for the cash transfers that we have for all the other revenues.
>> I would like to ask for the court's help here. We're working hard on getting all these agreements worked out so that we can finish this. I think approval of our budget today is an important step forward in resolving the issue, including the issues about the reserve fund. The city has committed to the 10.7 million, and to work out an interlocal agreement with us along certain points. I?m confident that that interlocal agreement is going to be worked out. The lawyers will negotiate, but we're going to get an agreement along the points that we've discussed because we have committed to do so. Personally to get it done. It's the responsible thing to do and it will be done. I think it's important for us today to send a message back to the city that we've got this resolved. I pushed them very hard to get to a decision point yesterday. By committing the 10.7 so that we could come over here today with it in hand. And I think the right thing to do and the responsible thing to do is to go ahead and get a budget approved. I will tell you that if we're not able to get an interlocal agreement worked out, we're going to have lots of very interesting meetings and discussions in here between now and October 1 about a lot of other things besides $10.7 million or $13.2 million or other amounts of money. We'll be to find ways to do -- we'll be having to find other ways to do other things that we thought. I believe that we have an understanding. I think it's going to work out, I believe it will work out. But I think it is important to the success of getting what has been worked out completed, that we take the step of approving this budget. And in doing so, making the statement that this reserve is going to be the receive and is the responsible thing for the district to have done. And I realize there may be people on the court who don't agree with how things have been handled, and we started out this discussion by saying that we respect you all and we do. We'll be partners with both. So we would respectfully ask that you consider approving our budget today with the understanding that if we're not able to work out the interlocal for some reason, we'll be back in here between now and October 1 with a full range of discussion items both in here meeting with you all and in here meeting as a board.
>>
>> [one moment, please, for change in captioners]
>>
>> there is a possible of giving a tentative approval in terms of this is the proposed budget, therefore then when we have the budget, the actual tax hearing next Wednesday, it's not all locked down and something thinks their input is positively meaningless. When we all do our work here, we are still working with a proposed budget. It's in markup, but it's still not official yet until we actually adopt a budget order and adopt the tax rate on the same day. Now, do people have a good sense of which way we're headed? You bet. We put out a proposed tax rate which is actually what we did this morning in court. My only concern is that if we say this is the budget we have approved it, then what message have we just sent to the public that we are going to hold a hearing on a tax rate for the hospital district that is -- that is meaningless because it's already locked down. So is a tentative approval something that -- sounds like doing first reading, although we don't do first, second, third readings here to send a positive message this is where we're headed but to respect that the process isn't over and there are some technical steps here that need to occur, we still have a couple of weeks.
>> public hearing on the -- on the proposed tax rate or the budget?
>> on the rate.
>> rate, it would be the same for the hospital district. Tax rate --
>> only one.
>> you end up discussing some of the budget anyway. It doesn't bother me. I thought the request was pretty simple. Basically sort of an assurance that the reserve cash amount would be handed over by the city and the county, the cash amounts, notwithstanding success or failure on the interlocal agreement. See what I?m saying? So if we were to tentatively approve the budget today, get that information, either from the city manager in a letter or minutes, if our budget markup, we did just that, but if we need another motion today to confirm it, then we will be on equal footing. How does that sound?
>> go ahead.
>> I think you are on equal footing now. We will -- we will get the minutes from the city council meeting yesterday and --
>> may well say where is your guarantee from accounting? Well, they made a motion in court that was approved by -- approved unanimously, handed over to the district, a cash reserve of, the $2.5 million.
>> right.
>> and certainly that will be reflected in the minutes. For a letter from -- from the court -- if necessary. What I?m suggesting is that either the minutes of this -- from the city where they approve the amount or a letter from the city manager really treating negotiations on the [indiscernible] separate and apart from the cash reserve.
>> the only thing is that if you adopt this tax rate today, then it's locked in. This is the tax rate that -- that the public is looking for.
>> that's why department active approval I guess.
>> what if we have an approval of our budget today, subject to approval of the tax rate, and if we needed to ratify the approval that would be fine. We've had a public hearing on our budget. And my focus today is to get approval by this court of our budget. I understand that you haven't approved our tax rate and that you approved our -- you set our tax rate.
>> my whole point, though, what is the -- what is the big deal about [indiscernible]
>> I think getting our budget approved will help us complete the interlocal agreement.
>> [indiscernible] the responsibility of coming back to Commissioners court next Tuesday? I don't want to --
>> let me say -- [inaudible - no mic] [multiple voices]
>> i'll start with your question, Commissioners. Is there something in between? You know, if we take a break, maybe lawyers can get together and come up where something. But my general preliminary answer is no. There's approval and there's not and -- lack of approval. So any discussion of tentative approval of the budget I would caution you does not exist. I think what clark is asking for, if we were going to come up with something in the middle is -- well I don't know that clark is asking for it, if you wanted to accepted a message and yet not approve the budget, the best that I could advise you is that you have language that -- that, you know, from each of you is if we get to this point, this point, this point, it's your intent to adopt this budget or that you don't see any difficulties with this budget, but for the issue about the tax rate and the timing, you don't have any concerns about that budget. That's about the best that I can see other than approving the budget that you can do legally at this point.
>> kind of like where we were with home depot on the tax incentive thing. Kind of like hi we technically can't accomplish what you want to accomplish, but with all of our comments from the dais, you can pretty much take it to the bank that this is what we intend to codify in a document but you have to allow us time to get the codification in process.
>> finally, I think there's some thought about approving the tax rate. To my knowledge, that's not on your agenda. So it would be a budget that would lock you in to some numbers on the budget.
>> there was nothing -- [multiple voices]
>> this is just about a tax rate hearing. Why have a tax rate hearing if it is meaningless because the budget is already approved and that has to be the tax rate to support that particular budget. I mean it's just --
>> christian, did you have a suggestion? I heard you whispering in somebody's ear.
>> I have a question.
>> if that's the case, why are we having this hearing today anyway?
>> this was to -- the presentation of the budget to us.
>> well, let me explain they -- the Commissioners court has the authority to approve the budget today should they desire. That -- that's an option that you have. Short of that, there really isn't much that you can do other than, you know, broad statements made from the dais.
>> I?m just confused about why we have to lock in -- we can't lock in the tax rate until next week, but yet we are going to have a meeting today about finalizing our budget. Those two facts were 1999 -- were known when we scheduled this.
>> what I was going to suggest is an explanation of this meeting, perhaps a way that everybody could have what they're looking for. If you characterized what you have today as a proposed hospital district budget, the board is proposing a budget. And the Commissioners court approves the proposed budget. Then you work out the interlocal and on September 28th, the Commissioners court finally adopts the proposed budget, which it approved two weeks earlier. So you can continue and that's exactly what the county is doing, the county is going to have a proposed budget filed next Friday and then the board of -- the Commissioners court will adopt it. The road district proposed a budget a month ago. And then on September 28th it will be adopted. So it's --
>> this is adoption of a proposed --
>> so I would suggest -- I would suggest that you approve the proposed budget.
>> at what point does the hospital district board approve its budget?
>> it already has, hasn't it?
>> I thought you said it was either proposed or it's approved and the Commissioners court does not adopt the budget. The Commissioners court ratifies the budget.
>> okay. Well then perhaps the word should be -- I was trying to find a way through the thicket.
>> the law says approved.
>> budget [multiple voices]
>> the budget revisions must be approved by the board and then shall be presented to the Commissioners court for final approval.
>> final approval.
>> so my suggestion I think perhaps would not use the word ratification, but the chair of the board could say I proposed the budget, the Commissioners court has approved the proposed budget, and then on the 28th it becomes adopted because the board has already actually adopted its proposed budget.
>> that's my suggestion, cutting the baby.
>> [indiscernible] [multiple voices]
>> I move approval of the proposed budget as presented to us today.
>> let me -- [multiple voices]
>> with all due respect to christian here -- [laughter] -- and appreciation of christian smith here [multiple voices]
>> does that make him eligible for a career ladder.
>> that might have been the motivation for all of that. But the best that I could offer is to approval in receipt of it. But approval of a budget and then adoption or I think -- the same thing. I don't think you are doing anything -- so the best I can go there is receipt of the budget and then statements made from the dais as to your personal thoughts on your willingness to adopt that budget in the future.
>> all of this is subject to what happening? I thought it was documentation of the cash reserve, little not subject to the approval of an interlocal, right? Early on I thought it was pretty simple. We get documentation of the cash reserve from the city and the county, and we approve the budget. We continue to work on the interlocal agreement or agreements that we need to operate.
>> I think two things have come up. One is that there seems to be sentiment so the day I can't say that you don't want to approve the hospital district budget until after you've had the hearing on the hospital district tax rate, which has nothing to do with any confirmation from the city or anybody else, interlocals or anything.
>> but they ought to raise the issue of the cash reserve.
>> the issue of the cash reserve would get the minutes from the city council meeting yesterday, if you -- I -- I think if you are going to request something from the city, it -- it will be important to make sure that you request precisely what you want so that when you get it, there is -- there has not been another request for something else from the city. Because the city got representations from the -- from the board members, not from the board, but from board members that if they would take the action they took yesterday, that they would have brought themselves up to exactly the same levels that the county is on its 3.5 million and in reliance on that, they took that action yesterday. So we need, the board needs to know what it is that you want to get from the city and that that's going to be enough. When we get that from the city.
>> I guess all I really want to hear today is that our budget, assuming that -- that the tax rate hearing goes appropriately, that these numbers are acceptable to you. So that we can move forward. And we are going to get an interlocal done and bring it back to you so you can approve it on September 28th and if you wanted to finish with us on th 28th, if that's your pleasure, that's -- that's fine. At that point we'll have everything done. We'll have the interlocal done, we'll have the interlocal with you done or whatever memoranda of understanding that you would like to have and we'll be set. I just want to be sure that as we finish negotiating the -- the interlocal, that these numbers are approvable in some way. And it's not that -- from my standpoint that we have to be finished for all time. From a legal standpoint that's not what's so important, I don't think, in finishing these discussions, but knowing that we have an approvable arrangement here from a deal point issue and that the numbers we're using are appropriate so that we can move forward.
>> [indiscernible] that was a question raised though, about cash reserves. If that was important to the auditor, I thought it was pretty simple to just get documentation from the city give you, what the county give you. That's what I meant by on equal footing. Give the same thing. I would have it back on the agenda next week where it will be routine approval assume thank we get assurance that's the cash reserve is there. Then that's done, we have the perfect -- perfect the public hearing on the tax rate, then work dill gettingly on completing that major interlocal and really the other interlocals that we need to turn our attention to.
>> so it's very clear that you are not disapproving our butt.
>> no, sir. -- not disapproving our budget.
>> I do.
>> not --
>> [indiscernible] one person has in issues.
>> I -- pun one person has some issues.
>> I?m sure if you sign-off on the thing, I?m sure the city did sign-off on $10.7 million, take out the 3.7 dispro how much has the city really put in there. 3.7 million, how much money has the city of Austin put in this thing? Because I?m looking at the general fund summary and it goes 2002, 2003, to 2004, 2005, budget stabilization reserve fund 33 million dollar, we are supposed to sign-off on 10.7. I?m sure if I was part of the council I would say let's sign up for the $10.7 million. If we sign-off on this thing, we are basically on that interlocal agreement we are saying we are willing to accept, I mean, thank goodness you gave us some money city. But I?m -- no, I?m not happy with it. With the budget. I can't -- I couldn't vote for it but hey there's five of us up here if four goes then it goes, but it's not, I mean, I just I?m not happy at all with trying to sign-off on something before we do the interlocal agreement and clark what you are up against, I don't deal with the city of Austin where I think, you know, what i'll bring this thing back to you. I've been dealing with 1405 and 1445 and 1204 for a year and the legislature told them to do something and I can't get them to do it. So what kind of -- I mean I don't have any comfort level. I know that you were good and you have a good relationship and that you've got part of your board that was appointed by the city of Austin. But I know that they have severe resistance to putting what I think is ample money into the deal. So I can't sign-off on the budget. But I mean so yes I mean in answer to the judge's question I mean is there anybody that has a problem with the budget, yes?
>> you asked a legitimate question. How much is the city honestly putting into this? A whole lot less than the 10.7 because a good chunk of that is dispro that actually the district gets anyway. Another 3 million of it is money that was in the '04 budget that falls out of line items to ending fund balance that belongs to the district no matter what. So it's a whole lot less than that. [indiscernible] I?m signing off on this budget because this is I think the best we are going to be able to do given the circumstances. But do not think for even a millie second that I?m signing off on what the city of Austin has done. Millisecond. Not for one second. I hope the queue starts up over at the city of Austin that says fine you didn't send it to the hospital district. Fine, let us try to get ahold of some of that money. While the [indiscernible] people, firefighters, e.m.s. Folks out in del valle, the trail builders, let the line begin over at the city because they are keeping the money, they didn't transfer it for this purpose and I am not happy about it. But I also know when it's time to say we have to move on and let this district move on and it's not healthy in every sense of the word for us to continue to get agitated about this. They are not budging. We know what they did. You know what? The community knows what they did and they are going to have to answer for it. But it is not these folks -- these folks -- burden. I mean how -- what else do we have to do?
>> don't take it personal today. All right? [laughter]
>> what else are we supposed to do? I think judge aleshire said it best in his letter to the Austin business journal. They are going to get away with it. Yeah, they are. But it is not these folks' fault. They have been working very, very hard too try to get this budget up and going I think we all have been very good advocates to trying to make this thing happened. At some point we have got to get a budget adopted and let the public figure out what happened here and let the line begin over at the city to try to get somebody else to get a chunk of that money. They didn't decide to put it into health care, let's see what they do decide to put it into.
>> judge, what's your motion? [laughter]
>> my motion is to approve the budget of the hospital district. Subject to --
>> all right.
>> [indiscernible]
>> receipt of documentation of the cash reserve, my next Tuesday. At which time this matter will be on the Commissioners court agenda again.
>> my question would be, judge, what is documentation of the cash reserve? The city is not going to actually adopt their budget finally or have they -- is theirs completely final? It won't be -- will it be by Tuesday?
>> what would you think, judge, about -- about adopting it subject to bringing back the interlocal agreement by the 28th? And we'll just do it all at one time and that would enable you to have your tax hearing, us get the interlocal agreement done both with the county and with the city and I know that you are trying to help us and I appreciate that.
>> I was trying to make it simpler, but that's fine.
>> I just think -- I worry about trying to demonstrate a commitment to write a check without an interlocal and I just sort of think that the thing to do is to get it all done. Think think that makes everybody on the dais more comfortable in moving forward. We will get the interlocal done. I think we found out what we feed to hear, if you pass that resolution, and then you can pass a global resolution on September 28th that fits whatever the requirements of the county attorney's office are on tax rate, budget approval, all of that, does that -- does that work for us?
>> I will second that, judge. If that's what your motion is. What just stated. But let me say -- with that second let me say this. It's really caused I guess a lot of disharmony between two governmental bodies. I think that have basically the same kind of interest, health care delivery for this county. That's unfortunate. If we are having to struggle with the situation and -- and as you've heard stated before, the voters have approved and supported this, so that means we've got to do it. Whether we like it or not. However we felt about it. Whether we supported it or opposed it. It's not you board members, board managers of the hospital district. As I stated earlier, I think that you have done an outstanding job. But sometimes working interlocals out with other governmental entities has not been the easiest thing in the world to do. It really does have its challenges. Of course you can see how the eruption has taken place here, maybe eruptions in other settings that maybe I don't know anything about. I think it really has caused disharmony, I think it's time for mending to take place here. Whereby whatever he end up doing the Travis County hospital district will be the best hospital district in the state of Texas. Not that I?m not wanting the others to succeed, but I just think that we do better than what we are doing. That's what I?m really striving for. We don't have much time to deal with this. We don't have, you know, October 1 fiscal year coming in for '05. With that the time is of the essence, I really appreciate all of the comments that everybody has made on this dais and from out of the audience, what we have heard over the months, first went up to the legislature as far as creating the hospital district for this area. There's been a lot of hard work, a lot of hours spent on this. But the bottom line is that the health care delivery must be effective and efficient for the person that the person that will receive it. Thank you all very much for your work.
>> thank you.
>> two conditions would be cash reserve and interlocal. Could it be back on the court's agenda on September 28th.
>> yes, sir.
>> I think the cash reserve will be in the interlocal.
>> okay.
>> that would be fine. The other thing that I would say is if in fact we expect final action by the court on the interlocal, knowing what I know about the Commissioners court, we need to make sure that we see that -- before then so if we have feedback maybe get it to you a few days to kind of work on it. Just sort of anticipating the possibilities.
>> my question, judge, what do you consider the interlocal to include.
>> could it be bifurcated into services versus property, facilities, et cetera.
>> that makes sense to me.
>> so that we can have more time to work on the issue of services but settle the issue about transfer of property back and fort.
>> knowing --
>> legally is that permissible?
>> I don't -- as [indiscernible] mentioned earlier, there's not any date hard set for the service part. So I don't see a legal issue to that. It's really the policy issue what the court is going to be comfortable with.
>> makes sense to me. Board members.
>> it has to fit in with that contract line item. All of a sudden there's a change in terms of the city saying no, no, no, we replot this, actually don't want to cap the exposure on that particular contract line item. That's the only danger here is if they decide they choose not to --
>> okay. 141 million.
>> yes, because that's what the budget is based on.
>> that's -- big deal.
>> real big deal.
>> all is well that ends well.
>> thank you.
>> let's vote first. Any more discussion? We are just voting for --
>> approving subject to those two conditions.
>> those conditions.
>> on the 28th, we meet again either the conditions have been met or they have not. All in favor of the motion, show Commissioners Gomez, Davis, Sonleitner, years truly in favor. Voting against Commissioner Daugherty. Thank you all very much. We had set aside most of the afternoon, did not expect you all to take it. [laughter]
>> we're sorry we did. But we very much appreciate your final.
>> we really don't blame you. [multiple voices]
>> we probably ought to have a motion to adjourn our meeting.
>> move.
>> second.
>> any discussion? All in favor please say aye.
>> aye.
>> adjourned. Thank you all.
>> appreciate your dedication, hard work, et cetera. The Commissioners court has further business to conduct.
>> thank you.

The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.

Last Modified: Thursday, October 27, 2005 10:28 AM

September 14, 2004 Item 14

September 14, 2004
Item 14