Travis County Commissioners Court
August 1, 2006
Item 5
Christian, number five is to receive precinct of the fy '07 preliminary budget.
>> the preliminary bungt budget was filed on July 20th. We'd like to share with you a high level summary of what's contained in the preliminary budget. As you know, it is just the beginning of the deliberations for the Commissioners court, which will end on September 26th when the court adopts the fiebl final budget. This first slide is wrong.
>> let's start over, chris.
>> this first slide is wrong. We filed a July 20th based on an estimated property value from the appraisal district and the appraisal district has filed its certified tax role. We balanced the preliminary budget based on a 73 billion-dollar property value. It is now $74.2 billion. The effective tax rate in the preliminary budget was 4516. It is new 4433, so we are seeing a five and a half cent decrease in the tax rate at the effective tax rate.
>> you said 4443.
>> instead of 4516.
>> that is still the effective tax rate. The average bill for all homesteads wobt stay the same at $813, but would drop to about $800. This second slide is wrong. The total value is not goik from 63 and a half billion to 73, it's going from 63 and a half billion to 74.2 billion. New value which is new construction placed on the ground in the last year also increased from 2.55 billion to 2.583 billion. There was a slight increase in the average homestead. It was $225,014. I should note the rest of the slides in this protection are correct. [ applause ] and if you would like, I'd end new. [ applause ]
>> I wouldn't say they were wrong, they were correct at the time you did the budget. You have updated numbers if us, so let's give you all some credit here.
>> we were just trying to keep us on our toes.
>> a little bit like my quote in the "austin american-statesman". This budget just happened. [ laughter ]
>> these are the feeble --
>> these are the final certified numbers. And we're awaiting the final effective tax rate calculations from the tax assessor calculator and there's one number that they're still trying to tie down. They have given me full confidence that the effective tax rate of 4443 is the accurate number.
>> okay.
>> maybe we won't be called bland in the newspapers, we're just pieing it up.
>> for those oh saw the hiewnl number of protests -- the huge number of protests, up in the 56,000 range, that number has been factored into the certification from the central appraisal district.
>> the appraisal district predick the outcome of -- predicts the outcome of what those protests are. We are stable, triple a bond rated, we've been managing our resources carefully. We have end reserve, fund balance you have been carefully adhering to adopted guidelines, historically have hadly spending, and you have been focusing on preventive steps to prevent future costs. This budget essentially meets existing contractual programmatic commitments, thigz we call maintenance of current either, and there's a lot of that,ious to keep the ship afloat. There are resources for exee health and compensation. There's some programmatic growth in response to the most critical work load demands where these demands, we had a criteria of extraordinary and compelling where harm would be done if additional staff were not provided for that health load in term of all funds, there's about $24 million in the general fund. The other fund, you can see all fund going from 542 million to 545 million. We have a new criminal district court with 15 f.t.e. Constable writ teams if the writ process. Maintenance and custodial have 10 f.t.e. New, parks nine. There are also 38 f.t.e. With either new revenue attached to them or that are internally funded or that were added by court action midyear. Focusing on the sheriff's office, we are mutually projecting the I mate pop laying the same as -- inmate population the same as it was in 2006. They have step increases for peace officers and a little over four million dollars in capital for the sheriff's office. The largest increases are for dispatchers, pharmaceuticals, medical services, utilities, plus additional law enforcement officers. There's a new criminal court. $1.2 million was added. Indigent services. They total $2.4 million and the district attorney prosecutors alone are 532,000. People think about a new court and it's a judge, maybe a bailiff, but when you add everything together, that's one of the reasons why new curt are so expensive -- new courts are so expensive. Needed, programmatically important, but expensive. Those other offices are the sheriff's if, district clerk, cscd. The new court is expected to start January 1 of '07. It will be set in reserve and be able to allow fy '08 to move smoothly in without any ratchetting of expenses. There are some mental health initiatives --
>> let me ask you something. When we have attorney fees of 402,000, is that only for that court or is the 402,000 indigent attorney fees for the courts?
>> for that court.
>> for that court. So these specifics, the 532 for the prosecutors, this is strictly for this court?
>> strictly for this court.
>> okay.
>> mental health initiatives --
>> is that frit consistent with each -- pretty consistent with each? Would we have about 4 $400,000 if each court?
>> I don't know off the top of my head. One would have to take the total indigent attorney fees, divide by the number of courts to answer that question. And I don't have it.
>> iewm trying to figure out -- I'm trying to figure out if this court was foing to be more costly than the other wubz. You wouldn't think it would be.
>> we can get that number back to you.
>> mental health initiatives, we have the mental health public defender, which is a grant program, 125,000-dollar match for the 625,000-dollar program. You're familiar with that. There's the mental health in pretrial, the performance results of that pilot appeared to be very successful, so we are recommending that be an on going program. And threens a sheriff's mental health assessment team within the central booking operation, a little over 300 thu dollars to screen -- 300 $300,000 to screen and assess central booking clients that have mental health issues. Prior to getting caught in the system.
>> where does project recovery fit in?
>> refresh my memory.
>> the latest team that we --
>> we voted to fund a piece of that in '06 and '07. I don't think it's really been implemented yet. But we voted to fubd the medication -- fund the medication case management part of that. This is if the public intoxication cases that would be enhanced to class b after a certain time. This would identify multiple repeat offenders, so we need to put an asterick by funding for 2007 is the dole.
>> that one, judge, but there's the six-month pilot project that the judge came over --
>> that is the same. My assumption always was that we'd get the pilot going, we had funding for this fiscal year and we would review it during budget process in terms of twowfb funding. 2007 funding.
>> so it's part of that. Maybe we need to get back in tuch with them because they think the pilot project has been dropped. So it has not been dropped. It will be continued on the other?
>> yeah.
>> the city of Austin community court --
>> they have dlampltz.
>> city funded like $400,000. We picked up a piece thattablelized should be 90,000 or so. But I don't think it's been I am policemenned. I think he -- implemented.
>> starting in September, judge.
>> there's a piece in '06 and a full year in twowfb. 2007. So it ought to be in our budget to tracy.
>> would you communicate with the junk to make sure that it's -- with the judge to make sure that it's there.
>> we'll communicate with her the status of it.
>> it wasn't prefunded, mar dpret. Dpret. Margaret. I had the same conversation to make sure there was a budget hearing and I was going to vote for it, but I felt it was an 2007 budget decision, not something preblessed to be included.
>> just so the confusion is cleared up.
>> new parks, fuel increases are all each over half a million dollars. Health and human services, most of that is related to obligations for the city. New its staffing to tracy issues that the computer -- to address issues that the computer efforts are resulted in. Justices of the peace, utilities, maintenance and custodial, indigent attorneys' fees for all the remaining court, $262,000. And then the medical examiner, 222,000. Those are resources that are in the preliminary budget and there are additional resources ble, but these are the highlights of the largeramounts. The health insurance fund increased from to 58.9 million. The health benefits will cost two and a half million dollars more in the general fund. Employees will be asked to contribute mr, but the basic benefits levels have not been modified. The three had been option plan continues in 2007 will youking employees to -- allowing employees to choose the best option. Compensation and benefits rg the history of compensation increases have been three years of three to four percent range. Four years in the five to six percent range. Two years at dough, one year at one and a half percent. There is four and a half million dollars in the compensation reserve that was built up using a particular methodology. That particular methodology you may or may not find comfort with, but we were advised by human resources thrarp two and a half -- there were two and a half million dollars worth of dpreen circled and compression employees. We assumed it would be two years given the magnitude of that problem, two years to implement. And given the other obligations in the budget, we were able to include a 2.85% compensation increase for all rank and file and elected officials. The question of what will 4.6 million fund, the answer is about fowrs percent. So if you wish to modify this and do with one number, you can in essence keep in your miebd just under -- mind just under $1.2 million for ef percent increase. You still have the each of green circled and compression employees and I am very confident that that -- as that issue gets more and more vetted that you'll be able to get visibility on the magnitude of that issue during two didn't compensation budget hearings, one at the frnt end of the budget hearings and one at the back end.
>> can I ask a question? So a green circled and compression employees, what's in the budget is half of 2.5, but it's half of the four million in.
>> yes. This is sirply a way to calculate. -- temperaturely a -- simply a way to calculate. It is just a way. The bottom line, though, is there's $4.6 million in the preliminary budget to be appropriated and increased or decreased in accordance with priorities of the court.
>> but I guess during the compensation budget hearing you can kind of flesh things out and see exactly where we want to land on that. But I can see where you're coming from. Excuse me, judge. I didn't mean to cut you off. Go ahead.
>> you didn't.
>> okay.
>> I can see why you may have brought this up, but I guess again to flesh things out as far as what our different positions are, some of the positions. I don't really necessity. And where we'll actually end up landing, I guess that will be coming up shortly. So this is just -- this is not ng etched in stone. What you're saying is nothing that's been actually etched in stone, even though it's in the preliminary budget because smup may someone may walk away today and say this is the ebbed of it. This is in the the case.
>> this is the beginning of it.
>> but as far as what you said christian as far as your presentation, what some folks may get in their mind that this is it. Mement moment
>> [one moment, please, for change in captioners]
>> .
>> bonds that were authorized in '05, 30.9 million. The detail is in the preliminary budget. In terms of car, $10 million, over half of it is in vehicles and computers. And then a variety of other projects in the sherf sheriff's office. There is a reserve for cost over overruns that is contained in a special reserve in car to allow cost overrun issues to be addressed visibly with the court and to allow the court to come to conclusions as to whether to modify scope or pay more money for the existing projects. There's also reserve for smith road improvements. There's a certain of obligation proposed. The vast majority of that is for vehicles, computers, east side service center, hot mix, asphalt and concrete, and a wide variety of other projects, airport, elevators, roads and parking lots, traffic signals, medical examiner equipment.
>> not parking loss.
>> no. There's approved bonds, an on ongoing program in '01 voters authorized a certain amount of resources and each year the court in conjunction with the departments issues bonds consistent with that authorization. So in '01 there's 19 million, a little over of proposition 1 money, roads, drainage and pedestrian access. In '05 there are three different propositions, .9 million in roads and drage act--9.9 in roads and drainage, .9 in parks. The remaining of 14 million. It is unclear what the augment augmentation of that will be. As you know there's 40 million budgeted in long-term co's related to the jail facility. None of those co's have been issued and it is unclear what the final magnitude of the jail project will be and whether the court are decide to change the scope to meet the budget or maintain the scope and modify the budget, and how much the modification will be is still unclear. We must give you a gentle--
>> do we need an amount under co co's for jail facility?
>> yes, when we know what the project is going to cost.
>> okay. But it will cost some amount, so we know we will need some amoun.
>> yes.
>> we they are we we -- stick with our original price taking or increase or modify. Roger indicated when I chated with him a couple days ago, they are at 50 or 60 percent of the 10,000 over the price tag.
>> 10 million.
>> 10 million over the prize tag that they told the court about in open session a week or so ag.
>> what percentage is that, judge?
>> instead of 10 million, more like six million.
>> okay, still over. So we still need to work on tha.
>> see the proposals that come in.
>> we need to do something or go back to the state jail commission in December and give a report.
>> we need to cut that down even more on the six million.
>> okay. Thank you.
>> we are not so bold as to know what the outcome of all those discussions would be.
>> we just thought it was wish wishful thinking, that you wish the jail project would go away.
>> I'm not going to touch that. But speaking of things like that we do want to give the court a little gentle reminder about projects that appear to be in the often that have not yet been been--en that have not yet--ove, in that have not yet been pulled out and to remind court there is future debt capacity that could be stretched. When the authorization was approved by the court you acknowledged that you would go over the white lines and stay over until coming back in 2010, and those white lines relate to debt capacity standards. But there are other projects that have been discussed with the court. They have not been approved, not been authorized yet, but they are out there. And the needs are real. So the courthouse, the jail budget overruns, you had a discussion about speeding up road projects. There has been some discussion about using debt financing for b cp, frencic center may--for enc encic center may be in the offering, and also leaving room for the next bond program. The need for roads and pargs and other projects is not going away with the growth in Travis County county. There's no answer to this, just a gentle reminder. We do have central reserves and unallocated reservers remain at 11 percent. The allocated reserve is lower than in '06, two and a half million, and then we have capital acquisition resources re reserved for unforeseen capital obligations. We also have some special purpose reservers, 600,000 in an annualization reserve for programs that are going to be implemented midyear and that allows resources to be applied to '08. The imaging division had a reserve for 285,000. You have already had a discussion about the programmatic benefits of that project. Ijs and fax of 260,000. Pharmaceuticals in the sheriff's office has a reserve, and out of county inmates for a spike during the summer in the event that is needed of 313,000.
>> how much was allocated in '06 '06?
>> it was 3, hmm, 3.244.
>> okay.
>> okay.
>> and that was, we believe, we've done an analysis of the allocated reserve that the court has had and there is no trend. Some years you underspend, and other years it's been very tight tight. Typically when inmates spike. When there are things that occur well out of your control, whether it's medical costs or inmates. We believe that '07 we can see ahead and do not feel as if you are at risk at two and a half million. You may see otherwise. This is a judgment call. You don't want to run out, because all of a sudden next summer comes and if you need resources to accomplish some public good, that's where those resources typically come from. To the degree have you spent them all, you constrain yoursel.
>> we will know on Wednesday the total of ear marks we had against the 3.2 million allocat allocated reserve for '06? I can get the Wednesday morning? That will help.
>> I can give you ear marks against 3.2 and against the 2.5, ear marks in '06 and '07.
>> okay.
>> christian, did you guys at all discuss as we were going through this in terms of what re reservers to set up, about the idea of a revenue cap reserver? We are sitting--reserver? We are sitting here on the edge of the state legislature coming back into session in the middle of a fiscal year. While I would love to think that caps are dead, they are not. And it's the possibility that opportunities to safeguard against that would be built in a moddest way, and if the allege does not act on that--l e dg e does not act on that, it disappears to the next budget. It can drop to ending fund balance and can be utilized the following year in items of make it go away. I think that's something would I like to discuss more as we go through the hearings process, whether a moddest revenue cap reserve needs to be put in there there. Otherwise the options for this court will be much more limited if the ledge moves in that directionbut that's not going to affect--
>> it would in '08 and beyond.
>> but it's not going to in '07. And I do think that they are probably moving towards--
>> you do not build--
>> other things they are moving towards. '07 is not.
>> not about '07. It's about building it into the tam rate so it becomes--tax rate so it becomes part of the base and next years's effective tax rate. It's going to be obvious if everybody is going to the max to be able to save up for the long-term expensive projects like simply add ago new criminal district court. I think it's one thing to talk about and strategize. It may be one where we just talk through it. I think the court ought to have a discussion. Nothing would thrill me more if it would go away after one year because nothing happened. But I'm not convinced nothing bad is not going to happen. Listen to the double negatives in there I'll bring that up during budget.
>> wonderful. You do have budget write-ups. You have a black book where every single budget request has been looked at by the planning and budget office. It's a very thick big book but you can drill down at your pleasure, or leisure, or neither neither. It contains a review of all the base budgets and all 410 separate budget requests. All the departments have those write-ups. You are going to be receiving and should have already, each day, an excerpt from the black book write-ups from the planning an and budget office, plus specific departmental material that has been provided for the budget hearing so, that each day day's budget hearings, you will have department a, that will have whatever that department wishes to provide you in backup, plus the excerpt from the p b o write-up so that you can focus specifically on what is going to be discussed in the budget hearings. This was a request that the judge made last year to have the budget hearings a little more focused, a little more organized a little more specific on '07 budgets and the departments are responding well to that. There are public hearings. We start next Wednesday, August 9, a hearing on the preliminary budget, 6 p.m.
>> term.
>> tomorrow.
>> August 2 is tomorrow.
>> August, next week--
>> next week is the public hearingnext week on--
>> next week, Wednesday, August 9.
>> thank you.
>> did I say tomorrow? I'm sorry.
>> no.
>> the hearing is tomorrow. The public hearing.
>> yes.
>> next week.
>> is next Wednesday, August 9, a public hearing on the preliminary budget at six p.m. And the website does contain the expect summary--executive summary of the preliminary budget. There are new statutory requirements that came into effect last year am there are new obligations this year for advertising. You will need to get briefed on that in the event you wish to go above the effective tax rate. We have built into the schedule an amount of time that allows you to go up to effective tax rate if you so choose. You also may wish to have these public hearings and the advertisements even if you stay at the effective tax rate. Those are choices. But if you go beyond the effective tax rate, you must hold a public hearing, and those would be scheduled on Tuesday, September 12, at nine a.m., Tuesday September 19 at nine a.m. For a second public hearing and then Tuesday September 26 is the public hearing on the propos proposed budget. But those are choices that you have before youyou. There's also, obviously, every Tuesday during citizens communication. Budget hearings will begin tomorrow, August 2. Those are hearings with the departments that end on Monday, August 14. They are scheduled every afternoon on Mondays, Wednesdays Thursdays, mornings on Fridays, you should have the schedule. They begin at 1:15. You have budget markup then on August 30, 31 and September 1. And you adopt the budget on Tuesday, September 22.
>> questions, comments?
>> this square on which we start tomorrow, due to the fact that you all are submitted a balanced budget to us, the preliminary bñled budget.
>> --balanced budget, given that we are going to have the next ten days or so listening to the departments with needs, all that we are probably going to be hearing in the next ten days or so are really justifications why we need something that we didn't get in the preliminary budget.
>> correct.
>> so, if we are not willing to cut something out of the preliminary budget every dollar that we are willing to spend, that we are going to be asked for starting tomorrow, necessitate going above the effective tax rate.
>> no.
>> no. If you have nontax revenue that is certifiable.
>> okay.
>> that is the most traditional way that that answer, no, occurs occurs. This is based on the third revenue estimate that was just submitted. There will be a fourth and can be a fifth and beyond. And so nontax revenue is, hmm, a way this which individuals' needs can be met without additional property taxes.
>> okay.
>> the usual suspects, Gerald, are capso, datso, corporations, collections, partnerships with the hospital, excuse me, health care district. There's lots of opportunities out there for us.
>> can we get now a reasonable idea from you all as to what that number might be?
>> no.
>> okay. I mean--
>> because, because we respect the prerogatives and the responsibility of the auditor in her role of determining what revenue is and will be.
>> then how do I get comfortable with having some sort of a number there, and maybe sues sñn the one that can give me that number. I mean, I don't even want to get jazzed about somebody asking if I don't think there's going to be enough money to take it there or to get there.
>> the third revenue estimate was based on the information we had at the time we prepared that we try to be fairly conservative so that we're not in a position where the fourth one is less money than the third. So that if there are changes, there are more. So the earlier ones are more conservative. The new references mats come after we close our books. July will close on the 9th. We will have the figures for that. Christian is right. The revenue sources he talked about. The other thing that just keeps bouncing around that is a judgment call on my part and we're still looking at it and will, and you mentioned earlier, is what kind of litigation is out there with the taxes. That is an estimate. The central appraising district tells us what they think, then we look at it and decide what we think to put it in there. But I can tell you, even the central appraisal did it has bounced around every time we have talked to them. That's moved. So as we get closer, we'll have better information. But I don't have a parameter yet I don't think you're going to see five, six million coming out of that estimate without a tax increase. If you are looking at parameters parameters. Do I think it's going to come up yes, I do. But I don't think it's going to be huge amounts. That's probably not the answer you wanted but that's as accurate as I can be at this point.
>> let me also suggest that you may not like what's in the preliminary budget. There may be things in there that you just go, why on earth are they recommending this. And I invite that. Please it may be that the judgments that were, and there are hundreds and hundreds of judgments that are made just like you make every week, that you may say, you know, that's just going too far and we believe there are other priorities that are higher for us. And so you can switch dollars very easily. There are judgments that are made about reserves in there. There are judgments that are made about compensation if you get jazzed about something, then you can equally get unjazzed about something else. And so, that's part of the budget process, is setting priorities. And traditionally in this organization, the preliminary budget has not been challenged deeply by either members of the court or elect the or appointed officials. And I think it would be wonderful to have those challenges because--
>> but that's not, but that is the point. We don't have enough time, not you all's fault, maybe it's not our fault, but to really go in and challenge pbo on most of it. You know, most of it being 99.9 percent. Because you all are the ones that have your concentration, you have your certain people that work with audit, all you have to do, your write-ups are real good. You know, you all are, it's hard to go up against whatever you say. I mean, in our mind, here is the reason we are here, here is the reason we are not. I mean, in a perfect world, I mean, if we all just, all we had to do all year long is just work on budget, that would be something that I think that you probably would have more challenge from all of us. But when you get the black book and start reading it, what you have time to do is, okay, sounds like a pretty good justification you know, to me. But what you really start trying to find is, you know, where maybe we didn't come up with ways to generate more revenue. But even that, you know, is very difficult to do come August. September when we are doing this budget. I mean, I think I hear what I needed to hear, which is it's probably somewhere, you know, between twon and three--two and three million, if you want to put something in your mind, Gerald, but it's probably not going to be any bigger number that that. I think susan just said don't think you're going to have five or six million.
>> I have one other gentle reminder for the court am and we decided against put ago slide down on thñmpt but the reminder is that we are out of balance with respect to one-time versus ongoing resources. There is a deficit of ongoing expenses of 2.9 million and a surplus of one-time of 2.9 million. So to the degree that there is just one-time additional revenue and you want to match that with ongoing expense, you exacerbate that imball balance. If our judgment, that is not that bad and not the end of world and it's not a structural imbalance the way other folks have sometimes gotten themselves into.
>> one time is how much?
>> one-time deficit, surplus, is 1.9 million, and one time deficit is .9 million. Excuse me. Ongoing deficit is 2.9 million. So there's two different kinds of revenue. One is one-time revenue, and that's not as good as ongoing revenue. Ongoing revenue can be matched to ongoing programsment but to the degree you match one time revenue to an ongoing expense, you run into a pickle in '08 and beyond. And what this budget says is we already have that pickle. It's not a great one, just a little pickle. But we would urge you not to exacerbate and blow up the pickle. I want to stop this now.
>> any other questions?
>> I have one, judge. I'd like to ask susan, susan, when will we actually have available to us the fourth revenue estimate?
>> we're closing the books on the 9th. So it takes lane a couple of days once they are closed to take and look at that. I will tell you, as things pop out that are really obviously before the formal revenue estimate is due, I tell the budget office that.
>> okay.
>> I mean, it's not as though we are worried about that. One thing I did want to say because I think it's worth saying, I looked at the city manager's proposed budget for the city of Austin for fy '07 and it emphasized the difference in funding structure because all of the increases, and it goes to to what you said, Commissioner, the increases that we're looking at go to the property tax because that's revenue source that the legislature has given us. In fy '07 in this budget the city, for instance, is project projecting, city manager, 7.8 million increases due to property taxes, 17.9 million in sales tax increases. They have 7.1 in the electric utility transfer and another, these are increases, 1.7 in the water and wastewater transfer. So you can see as of the increases of roughly $37 million that flow to the city, 7.8, or 8 if you want to round off, is from the property tax. And the other 29 million are for tax sources that we do not have. So the truth is, we have the same pressure in this government of a growing population increasing in utility costs to us, and everything we're doing, but the source of that is the property tax because that's what the legislature gave us. That kind of puts it in perspective of why we are always pushing property tax. That's all we've got.
>> right.
>> anything further?
>> thank you.
>> thank you very much. By the way, your introduction on Wednesday will not cover the same information we covered today.
>> introduction will be simply house keeping, getting a few minor things out of the way and going right into stuff.
>> okay. Thank you very much.
>> thank you.
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Last Modified:
Tuesday, August 1, 2006 7:14 PM