Travis County Commissioners Court
November 23, 2004
Item 13
Hear the morning
discussion.
Hear the afternoon
discussion.
Afternoon text.
Number 13 is to consider and take appropriate action on the issuance of srts of obligation in fy '05. Certificates of obligation.
>> good morning. The court should have received from pbo an updated one-page worksheet that shows the same information that was discussed with you on Thursday. The upper part being the projects already approved by Commissioners court and the lower half of the sheet being potential projects not yet approved. This worksheet has been updated, however, by pbo with the most up to date, current information as we understand it. I'll be happy to answer any questions and I believe there's programmatic parties here that would like to discuss the project.
>> okay. If you would like to join us for this, come forward. So in terms of debt capacity summary that you provided, what's the bottom line?
>> the debt capacity information that was also distributed to your offices yesterday was in response to the citizens' bond committee planning subcommittee that was -- that met last week. And that was at least a -- on what the information was presented. I'd be happy to go through that at this time if this is what you would like to look at first.
>> how about a 60 second highlight?
>> sure. The 60 second summary of that information, there were two tables presented. The first table was just for theoretical purposes. It shows the future debt capacity without any other debt -- in other words, without a future bond election in 2005. The second table assumes a level debt service. And that's really the key point here is a limiting factor of 62.5 million, which is the fy '05 estimated that service level, actual debt service level, 625363. And what pbo is is use that as a constant for the remaining years on the second table b in order to find out approximately how much long-term debt the county could incur at that approximate debt service level. We did discuss some of the functions in there. The most important assumptions are the interest rates, which I discussed with ladd, with our financial advisor. And also some other assumptions including two million dollars in co's in the come years that is an average that we found to be somewhat realistic. The last few years, as you recall, have been very low co's. We've had in the past up to $20 million in co's, and above that. So 10 million, so this would be a constant that would allow the court to meet everyday or everyday county-wide needs. The results of those assumptions on the second table total up to approximately $145 million in long-term debt. And that would -- what came up with the assumptions. And I think we discussed the bond committee information and you'll see that that number has been revised to allow for flexibility for those variance beds. I don't know if that was 60 seconds. I don't think it was. [ laughter ]
>> but this 145 million is if we went that way, and that would mean with no taxes, no additional taxes.
>> no additional taxes. In other words, the taxpayer would not see additional taxes with -- related to debt service because the debt service would remain constant. That doesn't mean it doesn't cost anything, nothing is free, but the debt service remains constant and therefore there's no additional taxes above that. That's correct.
>> and I should note, it's very important that the 2005 co is showing -- was assumed in here with the information given at the time that these tables were created is 2.9 million, which is what's in the adopted budget or what we thought to be the co at the time of the adopted budget. Obviously that's under consideration today under this item and could be adjusted. I don't know -- I couldn't tell you how much it would -- if you were adding small amounts to that it .9 million, I don't think -- 2.9 million, I don't think it would make much difference in these numbers. Since we're tiewking about the large numbers, sowfer however, if the Commissioners court were to add larger projects on to that, it could make a difference appeared limit the debt. We wanted to leave all the siewltions constant.
>> -- assumptions constant.
>> related to the 10 million you've got, is that 10 million in five years?
>> yes, it is.
>> so we've had discussions before of sometimes what we're looking at is not necessarily five-year co because it would be something that normally would be 20 year or in case of helicopters, 10 10 year. Meaning that 10 million could be actually higher or lower depending on what the mix is of five-year money, which is more expensive, than 20-year money, which is less expensive.
>> right. 20-year money obviously allows for more flexibility. The 10-year is, as you said, short-term debt assumption, as is the 2.9 million for fy '05 that assumes short-term debt as well. And those are just assumptions, like I said. Next year we might issue to issue eight million, 12 million. It obviously depends on the needs that are presented to you.
>> okay. Thank you. In terms of the '05 co issuance, I guess the biggest question would be regarding the starflight helicoptersment see, we decide if the total cost is 13 million, we would issue co's for the full amount or would we expect to net out the trade in value of the current two?
>> I spoke with multiple parties, purchasing, the auditor's department and the department. We believe that we would -- the r.f.p. When it's put out to bid, that it could be structured in such a way that purchase a helicopter net the trade-in value, the new backup you got yesterday reflects a eight-million-dollar bond issuance, which is the estimated 13 and the trade-in value of five million. It's consistent with how the last helicopters were purchased.
>> that would take the total issuance up to 10.9?
>> yes, sir.
>> plus issuance cost?
>> what's related to the gardner-betts piece, that is five-year money? I presume that would be 20-year money, but I choose to be educated. It was consistent with what the rest of gardner-betts has done as a permanent facility.
>> if I could answer that, I believed, Commissioner, that it would depend largely on if there was helicopters in the mix, if that needed to be really longer or not. I don't know the life of the helicopters. Last time we issued for helicopters it was five-year money. And since i've been here I don't believe we've done a 10 year issuance. As far as gardner-betts, it probably wouldn't be 20 year by itself.
>> it's kind of a bundling. It doesn't get bundled with anything else, so it's basically rolled into a pot.
>> it's something that we could definitely explore.
>> but a stand alone for under a million bucks doesn't make any sense.
>> it's hard to find # $45,000 for the gardner-betts bailout, do we think we can come up with it?
>> do you mean, judge, from existing co's?
>> that would be a good place to start.
>> I don't believe the existing co's is going to yield that sort of flexibility with all the other demands that have been placed upon it this year. It's definitely something we could always look into.
>> if we have about a million dollars, as we were told earlier today, and we spent 603 doing the engineering work for the jail construction project, that would be half of what we need there, assuming we could use it --
>> assuming.
>> that's $200,000. Iguess I question if it's less than a million bucks, should we issue co's or wouldn't we just hash it out. If we can locate half of it fairly quickly, where would we come up with the other half, I guess?
>> let me try a different version of that. And that is that it seems like we were issuing quite a bit of co's related to our -- did we do cash on that? I take that back, related to the radio equipment over at the rmdt.
>> I think we did a combination of car money and co money.
>> the question is whether any of that was co stuff that's part of the two funds for 235 and 455 whether we had rdmt monies there, it may be that we have the 600,000 covered related to the radios. We're just trying to bridge gaps here of whether the 400 can apply towards the radios and then we find the other 200,000 in car reserves or something else and the radios are done and the other one is the -- it looks like six of one, half dozen of the other.
>> what's the drop dead date on this issue? We have until next week on it?
>> on sizing the co?
>> on finding another $400,000 for the gardner-betts facility.
>> yes. We do have holidays and some of us may be out of town.
>> would that be you? [ laughter ]
>> yes. But I would be happy to work on it this afternoon. I do want to mention going back to the long-term debt, christian reminded me and I should have mentioned that the can Commissioner court does have a debt policy that we do issue short-term debt unless there are certain exceptions. So we would need to make an exception to that if we chose to go in that direction. As far as this, I can definitely work on it this afternoon. I don't like to rush these things because they are legal and accounting tests that need to be met.
>> let's look at the no debt alternative for the gardner-betts detention billout, and if we can't do it that way, we can always put it back in the co issuance.
>> would the other option there be it's no debt related to the radios?
>> and I believe on the radios, danny had spoken with me about possible savings.
>> well, where there may be some potential is in the c tech. The radio is spent because we bought every radio that we possibly could buy. And as you remember, we didn't have all the money there as far as some of the accessory equipment. So I don't think you're going to find anything on the radio side. I think there's a potential in regards to the c tech side, but until we get all the bills in, we're not going to know for sure there.
>> so with the outstanding co's issued pertains to the helicopter?
>> judge, let me ask. I don't know who really gets to give the final say if pbo, whenever you read that last line about recommended or it's not recommended, but whoever wants to come on to the microphone and tell us why bottom line is pbo not recommending the purchase of the new helicopter?
>> why we're not recommending. What we're not recommending is to issue $13 million should the court coman deer a policy decision that it is in Travis County's best interest to acquire two new helicopters, which is the question before the court. And whether the five or six million dollars' worth of additional costs is more than overcome by the public benefits. If the answer is yes, then what we are recommending is that we issue eight million dollars of additional debt by assuming the approximate estimated-million-dollar cost of the helicopters will be reduced by the five-million-dollar trade- in. That's what that sentence says. If you're asking would we -- do we believe that the public benefits are worth the approximately $5.7 million, you can get an answer. But that really is why five members of the court look at this thing through their own prisms. And we're -- I mean, I would -- I don't know if I were a member of the court, I might land on a different lily pad than someone else, because it is not an easy question because you look at those benefits and there clearly are benefits. Are they worth $5.7 million? I don't know. But that is the question.
>> 5.7 or 8 million?
>> that's what -- the cost of the helicopters, the new helicopters due 2012 after all is said and done is $5.4 million.
>> but if we put them in the co issuance, it would be eight million dollars.
>> you're going to co a net of eight million dollars, but you're going to save maintenance over time. So you'll increase your debt and reduce your mno.
>> the reason I asked -- and I guess that explains something to me, christian. I thought it really was -- when you see the pbo, whether it comes from pbo or tnr or whatever, and you go -- I think it stated that pbo does not recommend -- maybe I can do something else, but it didn't say that. I can see what you're not wanting to do is put yourself in a spot are we making the call on whether or not you all need to do that? I mean, I think that from what I understand, y'all's opinion is based strictly on the numbers part of this thing.
>> we're recommending the financing technique. And we've confirmed through purchasing and confirmed through auditor's office that it would be better to net it out than to go out and borrow $13 million, have a trade-in of five and then somehow go through a reimbursement or offset of a bond fund. That seems awkward. Not only that, it's no different than buying a car. Sometimes people will say i'll give you a lot for your car, but then i'll also charge you a lot for the new car. So it's really the net, what's out of pocket. And we -- so our recommendation is on the financing. We haven't been asked on whether or not the public policy question would land one way or the other. Because that's not at this point a question that's been posed to us.
>> I think what Commissioner Daugherty is remembering is in the budget process there was initially asked a question about the helicopters was initially started with what have extensive maintenance needs coming up in 2006. Is it cost effective from a financial standpoint to replace the helicopters or not to replace the helicopters? And our write-up in the preliminary budget focuses primarily on that point. And when we make the assessment of whether it was all things being equal in the service levels, from a financial standpoint should we keep the helicopters or replace them? The cost benefit side of it related to the financial side of it says it's cheaper to keep the existing helicopters than to replace them; however, there is a programmatic expansion aspect of this whole proposal, the increased capacities. And that is I believe where the issue lies now is the increased capacity of the starflight program for the additional cost.
>> that's what I did. I've read so much about this because with Karen and I being on the subcommittee, this is -- let me cut to the chase here. This is the hardest thing for me to sign off on because we have representatives that do a more than adequate job for us. There are things that we do have to spend money on that we know that we have to spend money on, and I think we all recognize that. Now, eight million dollars is a lot of money, and it's especially a lot of money to me before we -- I think we're going to have a retreat. And I think that the retreat, the design behind this retreat is to come up with a plan as to what we are going to tackle. And I would think that some of these things may necessity some money, may necessitate some borrowing. Now, if we go through that and there's not, then I?m personally going to relook at this. Are there benefits to having new helicopters? Yes. But I?m struggling with whether or not I want to spend eight million dollars right now. Of course, i'd be much more comfortable after this retreat or maybe this next year on this, but -- I think we have two helicopters that do need occasional work and we have things that we would like for new helicopters to be able to do as far as carrying more fuel, having more room, given that we're going to do the night vision capability with the existing helicopters, and that's in the price that we have, I think that we have pretty capable helicopters. So I?m willing to talk about that, but I?m really struggling with $8 million, spending will million dollars on new helicopters.
>> there is one other thing I think you might want to consider. In the write-up that pbo did where they looked at it from a fiscal standpoint of where it was not recommended. I think allen will also tell you that he also stated that if we were to openly consider looking at the purchase of new aircraft, that this was the time to do that because you cannot wait until next year. If you wait until next year, then in 2006 you're getting into the heavy maintenance schedule. And so this is why it was critical now, one of the reasons it's important why we look at it in '05 because in '06 is when you do start the heavy maintenance on the existing aircraft. So I don't think it's a decision, Commissioner, that you can simply wait until next year to make this decision. Because then you get into the paying for the further maintenance.
>> and if the conclusion is not to go forward, what we would then do is in essence preload the budget with the appropriate amount of resources necessary to do the maintenance in '06. It's a given. Because of the f.a.a. Requirements. And if it's a million dollars, then that would be preloaded into the budget.
>> well, we got that -- that is in allen's summation of -- if you keep the helicopters, if you keep the helicopters until 2012, all of that is in there. [overlapping speakers].
>> the existing aircraft until 2012 is all I?m saying.
>> I guess my point is that I?m looking at -- how do you equate dollars to benefits. When we talk about the additional capacity, for example, when we are dealing with fires, especially out in the hill country, hard places to get at when it comes to dealing with fire control and things of that nature. That is something that our existing helicopters can deal with. But the new helicopter would add additional capacity to deal with that. And then when you look at the capacity as far as the he want hits self -- helicopter itself is something on the inside of the helicopter, of the space that with the new ones compared to the old one is something else that I think we need to probably look at of other big benefits. Then again, the capabilities of starflight -- it's something that I think is very impressive. I think -- i'd like to applaud starflight and all the e.m.s. Services that we have under our service area. It helps people that are stranded in times of flooding and stuff like that. My concern is that we really look at this, benefits versus cost. And is it really worth the additional issuance of bonds to actually -- to deal with that? And it is a struggle to make those decisions. But at the end of the day, my goal I think is to provide safety services for the community, but also at a cost whereby we're able to do -- to do that. So manageable cost. And I don't think it would throw it out of kilter. Those are the decisions we have to make individually, but I?m really concerned about the additional features that you give us a new helicopter versus what we're dealing with right now. And sometimes you've just got to trade in that old car because it is obsolete. I'd hate to just -- the older it gets, the more maintenance it will require, the more expensive it is to maintain. That's going to be another cost. And again, we just have to wres sell with this individually. So anyway...
>> is it good enough to wrestle with over lurchl. Why don't we take it up this afternoon. On the guardmer bets, I understand what we'll try to do is hustle up the money without issuing debt. And if we cannot, then we simply would include it in the co.
>> yes.
>> so that's your information? I do know the other item is on the agenda for this afternoon. So why don't we do ta a lot bit more this afternoon. I think we do need to go ahead and land on it so our starflight people -- y'all are welcome to come back, but I think we have the incorporation items and I think we could get to this by 1:40, 145.
>> just so he know, just from reviewing a few official statements that I have in front of me, I believe that we probably have more flexibility on the telecommunications equipment that's under the corrections officers radio than we would on the gardner-betts detention build out from what I?m looking at so far. But I will look over lunch.
>> now, we are certain that if the decision is made to purchase two helicopters, it is in an '05 issue, not '06.
>> actually, it's an '06 issue.
>> it takes a year for helicopters to get here.
>> that's right.
>> why is why it would be an '05 issue.
>> we want to issue the debt sooner in a year. We want to issue it in a timely manner and when it's time to pay it, we want to have it in hand. Can we think about that a little bit over lunch also? Exactly when we need the eight million dollars. So that really is if we can't do it earlier, when will we have to put up the money?
>> we do know and we have found out over the last several days that in regards to -- we would actually send out an r.f.p., So we're not saying we're going to select anything, but we have found that one particular manufacturer does have some available potentially. So there might be a way of doing that or getting them at the end of this year.
>> we need to figure that out too.
>> any questions of when we want them then? Or would we want to squeeze as much life out of the current two without having to incur the additional maintenance cost? Let's think about that over lunch too. Move that we recess until 1:30. All in favor? That passes unanimously.
just before the lunch recess, we were discussing the sizing of the co, item
no. 13. And run into somewhat of an impasse over the star flight helicopters.
All of us wrestled over lunch.
>> well, I don't know if it's an impasse for me. I'll tell
you about the decisions that helped put me over into the camp that it is time
for us to go ahead and commit to this. Is we have known since the date we
bought these helicopters that there is pretty tricky weight limitations. Limitations
is a good word because not only is there a limit on the weight, it limits
the kinds of things that can occur out there. There's been an ongoing filter
problem that we always hoped would get worked out by the manufacturer, never
did. Even if it could, the filter creates issues for star flight's mission.
Certainly in terms of the neonatal mission that I think is -- is upon us related
to the expansions over at st. David's and the new children's hospital, which
will come online in 2007, not only provide an opportunity for that mission
to go in that direction and to serve the needs of this community, but also
some revenue opportunities that simply could not occur without the bigger
helicopter, more weight. And then I was very impressed. And I greatly appreciate
all of the emergency service district fire chiefs who came in from western
Travis County to appropriately remind us of the very dangerous urban interface
for wildfire that we have got in western Travis County. And how star flight
is an essential part of that mission, not only protecting lives and property,
but some of that property is public property. More than $200 million has been
invested by the public related to the balcones canyonlands and other kinds
of water quality lands out there. And that needs to be protected, too, unfortunately
your best assault is by air. And there are limitations that we heard about
from the fire chiefs that -- that fuel starts running low, folks have to take
off to go get that and they wind up losing out to the fire out there. I think
Commissioner Davis said it very well this morning as we broke before lunch.
It's time to trade in and to I think avoid some costly maintenance issues
that were really better to invest those dollars in something that will take
us through the next eight years as opposed to doing it the other way.
>> do we need money in five '05 or '06? While some of us
were mulling, we thought somebody would be trying to find answers to three
questions, that's one of them.
>> we spoke with the county auditor's office about the issue
of fy '05 and '06. They are still reviewing the question, they will have to
get back to us. The issue is related to what's required to actually let the
contract in fy '05 and whether the funding has to be in place prior to the
letting of the contract.
>> all right. Two quick -- is this -- is this to answer that
question or my next two?
>> it is related to '05 and '06.
>> okay. That's question one. It still is 8 million. Which
will be reduced from the capacity to borrow whether it is '05 or '06. So --
so --
>> but if we need it in '06 we wouldn't issue it in '05,
we have for the in the past because we have to pay interest while we are sitting
and holding.
>> no. But you would have to -- you would have to -- to do
certain kinds of special things.
>> I?m thinking we will take the vote today. We would have
to pinpoint when in fact we would have to hand the money to the vendor or
manufacturer of the helicopter the other question is if you issue cos, that's
a whole whole lot different than 11 or 12, I don't know if the bond rating
firms would want to see us or maybe they would.
>> well, you have -- you have other bonds that were -- that
are on the table to be issued, five million of -- of road bonds. Whether or
not -- whether or not they want to see us is a judgment call. I do know that
they are quite interested in our -- in our current financial picture as well
as what's going on with the hospital district. Backup at $2 million, 13 million,
we have taken 5 million from that, because we netted out trade ins and we
have 845,000, so the 5 billion that you have just mentioned, it goes on here,
too?
>> no. We would -- we are suggesting --
>> voter approved 5 million.
>> the voter approved 5 million that's t.n.r. Road bonds.
>> okay.
>> this is not the entire bond package.
>> voter approved, is the voter approved only 5 million.
>> 50 the thousand. -- 5,090,000.
>> one is if we maxed out, utilization of the current two
helicopters, short of increasing the risk of something bad happening, how
much additional use do you think that we have in terms of months? That's the
star flight operators I believe.
>> I have heard you all say many times in '06 we have to
buy a new engine if we still have the two helicopters, right? Do we have we
think another year's use or -- or 18 months or what?
>> not a private facility. Maintenance issues are starting
to come up, going into the high dollar maintenance issues rather than if we
would wait that long, judge. What we are looking for is the aircraft delivery,
the decision is made with the time allotted for the r.f.p. Would be in the
-- either the last part of '05 or the first part of '06, probably talking
about a month's difference here from one fiscal year to the other fiscal year.
Early in '05, it depends on the decision that's made and how fast everything
progresses.
>> what you are saying is that we should expect to be right
in the check -- writing the check sometime in the September, October, November,
time frame of calendar '05. Is that the bottom line if one goes through the
r.f.p. Process and --
>> yes. Possibly a month earlier.
>> so if we borrowed or added this to the co, the 8 million
to the co, one would have the money in -- in April and cut a check in September
or one would go through a reimbursement resolution for $8 million in October
and borrow it as part of the fy '05 -- excuse me, '06 co.
>> one can -- I mean that's after the decision as to whether
or not you want to do it or not.
>> yes.
>> one can debate the pluses and each of those have pluses
and minuses, but it's -- my guess is that's after the decision of whether
you really want to buy these two helicopters and spend the 8 million or not.
>> the late '05 early '06 date is driven by what?
>> is driven by the decision and the length of time to complete
the r.f.p. And design the aircraft which includes the -- the completion of
the airplane as well as completion of the medical interior for the aircraft.
The aircraft will come as a generic aircraft, then the physical therapying
out product of it -- the finishing out product of it, of modifying it for
the e.m.s. Interior, which is all a part of the development of the entire
aircraft. So it's just a time frame that we are looking at. We are looking
at being completed within the times that I have stated before.
>> all of this assumes no down payment. Now there's one other
option, if you look. And that is an 8 million dollar co could be a stand alone
co that is issued in springtime and then money received in September, October,
and the check cut. But you have to know that's what you want to do.
>> then you are already doing an issuance that's going to
be delivering money in March and April, you would have separate cost coming
with something that could be just a matter of a couple of months later, you
have to write a check.
>> I understand.
>> well --
>> if this were a 90 million dollar check to cut, that's
one thing. But we are already bundling and packaging a co. The money will
be delivered in early spring.
>> the high maintenance expenditures will start when?
>> sometime during fiscal year '06. And the reason I can't
give you an exact date on that is because it's based on some [indiscernible]
requirements between how much time it's flown between now and then. Of course
we also have the real possibility of -- of unscheduled maintenance item that
could occur because another major -- something happening in -- wanted the
engine to be a great expenditure that we had to encounter once before already
because the engine was sent in for something else, other reason unrelated
to the erosion problem once the engine was there and broken down, erosion
was found. Then hate to be repaired before it can be sent back out to the
field. These are all variables that we are working with.
>> so your best recommendation as a pilot is what in terms
of -- of money available, purchase the helicopter, et cetera?
>> my best recommendation is pilot and do -- get this going
[indiscernible] deciding to -- is to do -- go ahead and get the approval done
for '05.
>> I?m slowly but surely getting more confused now with these
numbers. If we are going to get into expensive things with our existing helicopters
and we are anticipating getting $5 million of trade-in for these helicopters,
is that at all predicated on us having put a new engine in this -- in this
helicopter?
>> no. That's -- the time, the estimated value of the helicopters,
commission, is based upon what they would expect -- we are talking about the
time, we gave them a time that we would expect to trade the aircraft in. That's
what -- all of this is related to the same time frame that we're talking about.
Looking at normal, from the time that we thought the decision was made, probably
looking at one year to pay us. This is the information that we gave to them,
to the people that made the decision on what they estimated value of the trade-in
would be.
>> what is roughly an engine cost?
>> what would roughly an engine cost.
>> allan, if I think I remember correctly, I think that the
engine overhauls was around $600,000, $600,000.
>> all told -- the estimate that you gave us as $1.1 million
in maintenance for fy '06 for the transmission engine overhauls.
>> are we going to have to spend that in order to trade the
helicopter in and get $5 million? Or can we not spend $1.1 million and trade
the helicopters in and still get $5 million?
>> the financials that you are seeing with the 5.8, $5.9
million is we don't spend the money to do the maintenance in lieu of getting
new aircraft. So we would not spend that 1.2 for maintenance, but it is a
time dependent problem. If we delay the -- if that's the decision that you
go, if you delay that six months or a year, we could be forced in order to
have the aircraft air worthy to spend that money at the same time that we
are in the acquisition process for new aircraft.
>> what is the risk of an oops? What's an oops? An oops is
that the Commissioners court authorizes $8 million worth of debt and $8 million
comes in in March. And we are going through the r.f.p. Process and we open
up the r.f.p.s and we talk to these people and we discover oops it ain't 8
million, it's 9 million. We discover that over the summer. And we also then
discover oh, my gosh, what happens now? Because we have got this engine that's
got to be replaced. What's the degree of comfort that we are going to be able
to avoid an oops.
>> that's basically what I?m -- what I?m trying to get to.
Thank you for articulating that.
>> it's a technical budget term, an oops.
>> we have talked with various manufacturers about where
we are with our estimate. I mean the 6.5 million dollar per aircraft came
from an estimate, a quote that we got from one manufacturer. So as we -- in
the backup that you showed last week, the vnd der built -- vanderbilt is flying
ec 145's as an example, those aircraft were 5.4 million. There are some things
from a public safety perspective that we would want that they don't have.
We are fairly comfortable with that $6 million, 6.5 million dollar number.
In fact it could come in less than the 13 million that we are at. But it is
-- there's a little bit of wiggle room on how much our aircraft was worth.
Again we have a quote of 2.2 to 2.5 million dollar, depending on who you talk
with. There's a little wiggle room on what exactly our aircraft is going to
cost, which model we choose, what comes in with the r.f.p. But based on some
discussion that's we've had with the manufacturers we feel fairly comfortable,
not locked in because obviously until we have an r.f.p. In our hand, we don't
know. But they have said you are in the ballpark. Very close.
>> 22 versus 25, that's a $300,000 difference times two,
that's $600,000, that's an oops in our simple world if we are picking the
high number.
>> part of that is based on we can't give them a -- we're
going to trade the aircraft in on August first. It's like going to a car dealership,
next year I?m going to trade my car in, 20 to 40,000 more than where it is
now, they will give you a range of where they are. I don't know that we can
lock anything in until we know when that delivery will take place.
>> take the car analogy. You want to have money in hand so
if you do go 40,000 you don't have an oops when you come home and say honey
guess what? So you would want to at least be able to know what you've got
and be conservative. I would think. So you don't, it's always better to have
a little extra rather than have an oops, especially when you are facing a
million dollar engine overhaul and you don't have much time to -- to -- we
just haven't had -- as you can see, these kinds of conversations have not
occurred between money people and the program people because part of it was
-- was does the Commissioners court want really to go forward and commit programmatically
and has come to a conclusion from a public policy standpoint the -- what we
have identified and all agreed to is a $5.7 million cost. Do you have more
than $5.7 million worth of program benefit. If the answer is yes, then let's
-- let's worry about how to make it happen. And we will come back with a plan,
the answer is no, there's not $5.7 million worth of benefit, there's benefit.
But it's not 5.7. All of this is -- is moot.
>> is it a good time of year to buy a helicopter?
>> is there a time that's better?
>> right now, when you go out and buy your '05, seven months,
or less, but not quite new. I didn't think, I would hate to compare the tar
car to a helicopter, I really do. One is we are in the public a personal level,
yeah, we are on public safety issues, but that's, you know, within the --
when one family, one individual family versus needing to serve the whole universe
here. So -- so -- so I don't see the analogy. That isn't really useful to
me. So -- so but I think that we made the commitment for public safety a long,
long time ago. And so obviously we've recommitted to it. Because we -- because
we were still in the business. One thing that I would like to know is how
much would a lawsuit cost us if something went wrong with this helicopter
and we had all of these discussions about replace it and we didn't. Does anybody
have a ballpark figure of what we would need to put aside in risk. Dan?
>> the answer to my question, though?
>> I don't think so.
>> no.
>> if we vote now to indicate an inclination to -- to purchase
two new helicopters and ask you to come back next Tuesday, Tuesday with specifics
about how to get it done, is that enough time? That's contingent upon the
kinds of consideration that's have already occurred programmatically, with
what the options are, timing, likelihood of the numbers turning out to be
about what they are being suggested now. I don't know what your degree of
comfort is. Being able to --
>> well, you know we usually -- usually go back to our folks
who know to give us some advice on that. I think that i've heard the advice
being given to us several times and we are -- then the latest is today. We
normally rely on our staff who has the expertise. If the staff is saying each
helicopter can be anywhere from 2 tonight 3 2:00 to 2.5, we are counting on
2.5, we borrow $8 million, we discover that we needed 9 million, we will have
a -- we will have a -- challenges. That's -- that's -- one thing that I want
to at least highlight.
>> sounds like it's 8.5 or 9. If it's less than that. That's
-- if you are saying christian y'all think about a contingency figure, I?m
comfortable with that. I?m ready to like, the judge and everybody keeps asking
are we going to do this or not, I?m ready to say program mickally, we -- programmatically
we are ready to move ahead, we can debate on the number. I am ready to put
this to bed.
>> we have been in this business for a long time [multiple
voices]
>> to come after we resolve the main question which is are
we going to purchase the helicopters or not.
>> the point is [indiscernible] less costly than today. Checked
with, was tending to be $6.5 million. Of course with the trade in, stuff like
that, of course that figure is coming down substantially with the trade in
I guess as is. For existing helicopters. But of course so -- so safety, I
think -- I think all of us is -- are big supporters, so -- so safety for owe
poe for in community -- for this community. What kind of price we want to
put on safety. I guess the question would be to me if we are going to issue
cos, I would rather issue at a higher than not having enough. But again the
r.f.p. Will dictate exactly what -- what we have to do here. I guess my point
is if there's something over, that -- less than the actual amount, then of
course that we will deal with that. But right now I think -- I think that
we need to give somebody and let this public know that we are ready to move
forward, every time I look at the news footage of news broadcast, there are
some folks that really appreciate what -- what our services are doing for
Travis County, I guess some of these other folks that we serve also [indiscernible]
but like condition of an emergency situation. So public safety in my opinion,
is -- is real paramount. Kind of hard for me to wrestle I guess with the fact
that benefits, benefits for the public as far as safety is concerned and then
the cost. I think the taxpayers understand that. I feel very, very comfortable
in moving forward today. I stated earlier why I like to move forward. Testimony.
It's no -- no decision for me. We need to move forward. This is not a safety
issue. Our helicopters are not unsafe. Our helicopters have probably been
in the air in the last week for a lot of hours for all of the water we've
had. I?m not trying to send anybody a message in the community that we have
unsafe equipment. I?m not trying to send anybody in this community a message
that I?m not willing to spend money on safety. I mean, what I?m trying to
do is when somebody comes up to me and says, why would you spend $8 million
more on something that you already have that -- that does 99% of what this
mission was sent out to do 20 years ago or whenever we started it. I know
you want the hell hems and if -- the helicopters, if money wasn't an issue
to me, if I didn't think that I was going to sit in the next 90 to 120 days
"get healthy" wrenched about -- get get wrenched for everybody who wants money
in this community, we start asking p.b.o., The auditor, all of the numbers
people how do we make these things work, by the way, we want to keep our tax
rate. Where everybody wants it to be. I don't mean to come across as being
a nay saier on the helicopter because I don't want to buy the helicopters.
If the helicopters weren't $8 million or if we had helicopter that you said
you know what our equipment has been grounded for the last six months and
we can't -- we can't take all of the mission that we all wanted when we started
this thing. I mean that's not the case. I know it's not the case. I know that
we have got money to spend, we would have to spend money on keeping this equipment
up and going. I mean this is not a revenue capability kind of thing because
the additional revenue that we are going to get out of this, whether it's,
you know, infant, you know, travel or whatever, you know, we want to call
it is never going to make up the difference in what we have between expenditures
and revenue that we have. But that's fine because we know that we are in the
business to take care of our community. I?m very willing to say you know what
it costs us a million dollar to have helicopters when you really net out everything.
But I do know that there are going to be dollars that we are going to sit
down in the next, you know, whatever time and come up with -- with things
that we may need to spend money and that may be more difficult to say well,
we don't have those things, I guess we will eventually get to the point that
that could also be safety, I mean, but I?m -- it's all -- it's all $8 million,
if $8 million is nothing to -- to -- you know, I guess we can vote on it,
you know,, I mean, it's simply a numbers deal with me, has nothing to do with
anything other than that. I?m ready to vote.
>> [indiscernible] on the co about whether it's appropriately
done or not. Let's say christian is correct. It needs to be higher because
we need to have some flexibility room there because it might be higher. Well,
what's the down side if it actually happens to be lower? Jess ask runs us
through this deal all the time of what it is called the co sweeps. I?m looking
already at what's bundled in the co just to start with in terms of what's
already going to be listed in the co. You've got its equipment, so it could
be swept for it purposes. You have got planning for the new civil courthouse.
It could be swept and used related to that same topic located within this
co. You have got -- you have got improvements to another county office building,
that co sweepable. You have got things going on out at the sheriff's office
related to -- to a jail, certainly have those kinds of issues, a fire alarm
and got a big one here, allen, related to the county-wide vehicles and heavy
equipment for t.n.r. Does any of that include e.m.s. Vehicles? There is one
for ambulances, I don't believe it's --
>> part of the regular [multiple voices]
>> in terms of being a county-wide vehicle and heavy equipment,
certainly e.m.s. Vehicles could be in that same category. So could be swept
for any number of things that we all know that we are going to have to do
in next year's --
>> Commissioner when you use the phrase sweep do you mean
not spend or rebudget? That's simply you still have a commitment. When do
we need the co? One today or next Tuesday? Right.
>> our motion is to indicate our inclination to purchase
two new helicopters at a net cost of about $8 million and to the extent that
additional specific information can be presented to us between now and next
Tuesday, we go with that number.
>> second that. The other thing is specific due diligence
done over the next few months anyway, right? R.f.p. Together, figuring out
what vendors to contact with it. I guess in that r.f.p. Do we describe the
two helicopters that we now have?
>> yes.
>> then indicate what features we want on the new ones, right?
>> yes, that's correct.
>> our goal would be to keep it down as low as possible.
>> yes.
>> that's the motion. It was seconded by Commissioner Davis.
Does that make sense?
>> uh-huh. Yes, sir.
>> and the -- $8 million thinking that we will get about
five million on trade-in. Discussion? All in favor? Show Commissioners Gomez,
Davis, Sonleitner, yours truly voting in favor. Voting against, Commissioner
Daugherty. The rest of these cos we need to approve these? The rest of this
list?
>> yes.
>> move approval.
>> second.
>> discussion?
>> question. There it is an item on our agenda later today
that may or may not impact that co number, judge. Do we need to wait until
after executive session to take that motion?
>> that's what I said, I say let's come back and reconsider
this if we need to.
>> I wanted to make sure it wasn't forgotten I?m getting
furious notes saying don't forget another item.
>> all in favor. That passes by unanimous vote. That was
the rest of the list.
>> when you say the rest of the list, there were two outstanding
issues, you asked staff to go through and look at some existing resources.
Talking about radios and gardner-betts.
>> I think on gardner-betts the motion would be to approve
this amount in the cos, but I do think we ought to look. It would be easier
to take it up next week than -- take it out next week.
>> I would second that.
>> we already have it in there. I heard what was said this
morning about some difficulties.
>> to interpret your motion, you say approve the list, you
are also talking about the list of projects that have not yet been approved,
the radios, gardner-betts and obviously the helicopters.
>> right.
>> okay. What's in the backup.
>> what's in the backup. Thank you.
>> thank you.
>> thank you all.
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:
Wednesday, October 26, 2005 3:01 PM