Travis County Commissioners Court
August 29, 2006
Items 20 & 21
Now, number 20 is to discuss and take appropriate action to set fy 2007 tax rate, approve advertisement and schedule public hearings. I guess we can take 21 next.
>> I think 21 needs to be discussed before 20 to set context.
>> 21 is to receive presentation and shraings of completed fy 2007 agenda worksheets in summary form.
>> I am distributing now the summary of the budget agenda worksheet. This document is now available to others as well. This represents the accumulated conclusions of each of you on what you wish to discuss darg markup -- during markup. I am also going to pass out a summary of top picks that four or five of you wished to discuss among with top picks that three of you wish to discuss. This will give you an idea of at least the magnitude of financial issues that after budget hearings you wish to deal with from mark up-, which as you know has been moved. The large document, 11 by 17, is in multiple colors. Those items that are orange represent top picks that if four or five of you indicated you wanted to talk about at markup that are typically not in the preliminary budget. You the items in blue have three of you checking, and items that are yellow are two of you wishing to discuss. From that document, which -- and we received your individualized agenda worksheets on Friday, and from this document now, which is the summary we put together a two-page summary of those where four or five of you wish to discuss or three. In summary form, we are separating out those topics that are on ongoing versus one-time commitments. The orange items total just under a million dollars of ongoing requests with, and one-time money is 7.5 million, but I should point out that 5.9 million of that 7.9 million is money that's already authorized. It's the accelerated cash flow for our cip program. So if you back that out because it's money that's going to be spent, it's just going to be spent earlier, you have about 1.$6 million 1.6,000,001.$6 million' worth of compensation. So some of you chose the compensation increases and then the summary of the three who wish to discuss is again a little under a million dollars of ongoing resources and about 1 point is million of one-time. And these numbers that you see are updated to reflect the very latest costs that we're aware of because we believe that this will be in essence the basis for various decisions that you will be make ng markup. And these numbers are also general fund only unless indicated. That's the summary of the budget agenda worksheet which the judge has urged in more than one form to be quickly reviewed with you and not reviewed in detail. You also have received the fourth revenue estimate. The fourth revenue estimate is the estimate that upon which markup is based. And we are now handing out a status of the budget since the preliminary budget was filed because what you have -- what I just summarized was kind of the -- I suppose you could call them the highest needs, at least as interpreted by individualized members of the court. Now you have the resources. And this is all incremental. This is all additional resources above and beyond the preliminary budget. In the fourth revenue estimate there was $5.2 million of one-time money, just under 1.8 million of ongoing. What I'll do is let leroy nellis walk you through the darrell expenses because we do have -- through the additional expenses because we do have expenditure changes that are as a result of that fourth revenue estimate. And you can see the bottom line as to where you are today, and this is at the effective tax rate. And that's why we suggested to put this in the report so you can see the needs, you can see the resources, and then you can come to a conclusion on tax rate. Leroy?
>> the fourth revenue estimate that you received on August the 21st did have a description of the elements of the increase that total 7,029,000. Let me just reiterate those for you just briefly. On the expenditure side, the fund balance, which is that one-time $5.2 million, you have the health expenditures that we additionally transfer to the health fund that bhengsed to you I recaller. That's 2.1 million of that increased fund balance. You recall that hhs in their budget hearing, they said that they were able to disencumber about 450,000 dollars' worth of money and free it up in order to -- they were proposing that you consider using that for about 600,000 of their request, summer youth program and various. That's in that number. There were 570,000 of reclassed expenditures against the election fund that we had previously had inside the general fund. So working with the auditor's office we were able to free up 570,000. And then at the time that we released the expenditure estimates, we were approximately, I think, 150 plus inmates lower than what we are right now. So we were very conservative on reducing some of the expenditures for various -- like the inmate population. That has changed, I can tell you, in the last 15 days it's gone up. So I'd say maybe that 5.2 in the fifth, that one-time money may go down 100,000 or two to cover the increased inmates. There was also in that one-time money about 1.8 million of revenue that the auditor was was able to free up for the fourth. And then there's about 1.6, 1.7 of ongoing revenue. So that's just a little more detail on that increase of 7 million. We do an 11% increase for the unallocated reserve. Now, it's a combination of the road and bridge fund expenditures, the debt service expenditures and the general fund is the way that I calculate that. The interest income in the fourth revenue estimate on the debt service fund did go up as it did in the general fund. And any increase in debt service fund reduces the overall amount of the unallocated reserve requirement because you have additional funds. So that's the reason it's not more like 880,000. We had over 250,000 increase in interest earnings, and the road and bridge fund actually went down in the fourth revenue estimate. So the combination of those is -- we had a calculation of 442. You will recall we discussed with you reducing the general fund expenditures for risk management by 1.2 million for the next four years, so we've put that in. The purchasing board met yesterday on the purchasing budget and they approved 183,934 above the preliminary budget. The majority of that, 150,000, was at 75,000, as you recall in an allocated flferb the purchasing budget in '06 and then for reimbursement for the hospital district expenditures that they have. That same amount, that same reserve, was approved for 2007. It is our understanding they do not intend to take action on that during '06. So that's the majority of it. The additional expenditures related to the revenue in the fourth revenue estimate has to do with the da's grant, so that's 118,000 that got certified in the fourth. Health and retirement increase over preliminary budget reserves, at the time we filed the preliminary budget, we did not have the actual health insurance rates, and so we had a reserve in there and all the new positions in the preliminary budget for both retirement and health insurance needed to be adjusted once we did the actual calculation. The elected official salaries in excess of the reserves that we had in the preliminary budget, including the associate judges and the third court much appeal judges, was about 71,000. We have any number of corrections, and I will be giving you the backup so that you can review all the corrections. It totaled about a negative 21,878. The largest reduction in expenditures had to do with the e.m.s. Contract, the final numbers on that. So if you look at after these corrections, you have total funds available in addition to the preliminary budget of 4-point #- 7 million of one-time, 2.645 of ongoing for a total of 7.3 million. Now, the pending revenue items that we were able to identify, the -- it should say the health and housing corporation transfer of between 300 and 350, we had the capso that the county attorney normally declares and donates to the general fund, and we don't have that number.
>> [one moment, please, for change in captioners]
>> if we, the preliminary budget is at the effective tax rate.
>> correct.
>> and if we add half a cent to the effective tax rate, how much two questions, one is how much money will that generate for additional revenue. And two would be what impact would that have on the tax bill on Travis County for the average home owner.
>> 3.2 million net addition to the mno side and a $4 decrease to the average homestead.
>> for the average homestead the Travis County bill if we do this would still be a decrease of $4.
>> correct.
>> which is not a whole lot of money, but it's better than an increase, I guess, of four or ten or 12. It is my belief this if we can give the average home owner some kind of decrease it would be a good thing to do.
>> let me follow. I am either misreading or you misspoke. If we go the half cent it's not 804, it's 8 on the. Ride--809.
>> dis$809 --it is $809 average bill. The current is 813. The average homestead would see a $4 decrease.
>> okay.
>> that's what they add. One the reasons we are here is to decide if you stay to the effecttive rate, you don't need an add. That's what the add would say, there would be a $4 decrease if you add a half penny.
>> and you're exactly right. What I was reading was going from the 800 to the 809 but it's the last column. Okay. Got it.
>> christian, how likely is it that these numbers will add just any further? I want to say it was either last year or the year before we tried to zero it out. And there were some last minute calculations that came in based on what we did. We wound up doing like a couple increase .
>> no chance u your memory is related to what was filed in the preliminary budget and what was determined during the certified tax role that occurred on July 25.
>> that is one of the reasons that the budget tax rate that was written in the budget was not the final certified tax roll outcome for her effective tax rate. So there is no chance the certified tax role was certified and that is--tax roll was certified and that is it. We live with what was established.
>> in terms of susan being able to certify additional revenue, perhaps, however mod efforts beyond what was a fourth, a fifth, sixth estimate, we're always trying to get stuff certified right up until the last minute. I'm just trying to do it, cut it close, I want to cut it close on the zeroing it out as opposed to we just accidentally get ever so much over the zero dollar.
>> what we're looking at, there's only. We did an extraordinary amount of work looking line item by line item. A couple of you have asked is there anything out there I know that would significantly change the fifth. And we're looking at the bank accounts for the official fees. To see % if l amount of cash compared to last yearyear year. I don't contemplate there are. We're looking at that. Then you are looking at the farmer's market transaction. If that sells this year or next year or not at all, that is not in this revenue estimate. That will make a difference. With regard to properties taxes, one of the things we keep looking at, christian is right, they certify a role and we live with that. But we all know that the property taxes are very dynamic. Because every day they are looking at whether or not they are going, whether there's litigation, whether it's settled, whether there's protest and new property comes on. So the role truly is dynamic although at some point you have to freeze and look at it. What could change at the end would be we are always estimating what we think the litigation and the protests are going to result in. Because if it is a protest in value it would not only change what we would get this year but it would impact next year. We add just that all the time. It's a judgment call. The central district coast the same thing and we look and apply our judgment. Unless something tram difficult to change. We--dramatic would change. We have paid a lot of the attention to that this year. It has swung back and forth by the appraisal district and by us.
>> you don't see anything else out there, do you sph.
>> so I would, if I were you I would understand that the August books are not closed and we have the month of September. So we're projecting what we think. This fourth one, I would count on this one.
>> okay.
>> I would base my decisions on the fourth were I you. That's my best judgment.
>> makes sense.
>> go ahead go ahead.
>> I had asked you basically the same thing yesterday.
>> yes, you did.
>> we'll just add this at the end of the road. Looks like, for the full even estimate, it appears that it is.
>> but also I wanted to know some other factors that we need to look at and that was basically when you look at the overall demand from the departments that are making requests on ourour just am, in fact--adjustment.
>> that's an approximate amount of what was requested versus what was approved, recommended in the preliminary budget.
>> right. And as far as capital concern, which we also looked at as far as co and also bonds outside of, you know, the preliminary budget something pretty significant even though we looked to the next year as far as debt service as far as those particular entries.
>> that amount was about 27. 27.5 million. It wasn't funded, requested and unfunded.
>> so with those kind of requests you can see it's kind of tough to look at those kinds of amounts of money and then what you see here now before us looking at something that may be a little, right around the the $5 million mark as far as revenue, if you look at as far as what the tax rate will land on, it's going to be a serious challenge for us trying to get a size 12 foot to fit into a size 10 shoe. It's kind of hard to do. So that means that we're going to have to really go through a process where there's going to be some disappointments but then again I think we can look at some things and move forward forward. Let me ask, what is the clos closest tax rate that we can apply above the effective tax rate that would give a decrease to the average homestead here in Travis County? Looking at that, what would be the--
>> 45.16 will give you a three cent per year decrease.
>> three cents per year.
>> one more mill would move it to an increase. If you wish to shave it.
>> that close.
>> usually we round to the nearest dollar. But since this is, we anticipated your question, or a question like that. That is the answer.
>> okay.
>> the effective tax rate, again, to remind you, is 44. 44.43.
>> so it would be a decrease though, as far as the homeowners looking at their average homestead, decrease it for the homestead. Not homestead, but taxpayer, average household.
>> a three cent a year decrease.
>> a decrease and I guess that is an array of those scenarios. The judge brought up one, he asked a portion of the $4 decrease ended up being $9 for the average homestead. I'm trying to look at the scenarios and also recognizing the requests coming in from the departments and then try to land on something. But I definitely would like to stay in the arena of a decrease to the taxpayer, definitely don't want to go above that or have an increase. So basically looking at that type of scenario. Thank you.
>> another number for you to run for us. What's effective plus 0056. That gets us to had 44.99.
>> what we do is we take 44, I enjoy could go this on the fly. We take 44.43. You would like to add how much?
>> point 0056.
>> we add that and that gives us 44.99.
>> correct.
>> we multiply that times the taxable value of the average homestead, which is 180011 and divide that by 100sarb, because it's per hundred, and that gives us 8 809, I'm going to round up, 87 cents. 8809.8--809.7, that would give you a $3 increase using round numbers.
>> how much money does that free up?
>> well, we're going to do a ratio on this one, don't you think?
>> I'm going to guess 6 600,000.
>> okay. If you wish--
>> that's close.
>> 600,000.
>> yes.
>> for every hundredth of a cent that increase, and you 7w just increased six hundredth hundredths over half a penny you get additional revenue. So take 72,000 to six.
>> you get 432,000.
>> 432 works.
>> that woo give you a net of about--would give you a net of 3.6 million rather than the .2.
>> yes--3.2.
>> yes.
>> for the average taxpayer it's a decrease of $3 instead of four.
>> that the correct.
>> gives us a little bit-- bit--that the correct.
>> it gives us a little bit more.
>> when the average taxpayer get their bill, and the consolidated bill for Travis County, a reminder for people looking, the other jurisdictions are not as concerned as you are. Because they are going as the discussion is today, pretty much going to roll back. Decrease for the home owner or the holding the line for the home owner, will be on Travis County's part. When people look at each of those jurisdictions, that will be obvious. But if they look at it all together it will look like it is swallowed up by the other taxing jurisdictions.
>> what happens, though, the bottom line--
>> we got to do what we got to do.
>> exactly, Commissioner, thank you.
>> that's right.
>> what we need to do.
>> last one that we did was a tax rate of 44.
>> 99.
>> move that we set the tax rate at that number.
>> second.
>> 44.99.
>> so that would be the $3 decrease for the average taxpayer. As a rationale, I just think we need to generate a little bit more ongoing money to try to meet some of the needs /rneeds.
>> we'll look at that. Like I said before, judge, when I asked that question how much was being demanded from the general fund as far as outside the budget, you saw the dollars outside the amount, the demand on the general fund, that's quite significant.
>> I agree.
>> there's ways that we can maybe still fill the void, especially with ongoing, because some of these things are going to be ongoing. Again, I want to make sure that we meet that. Especially with the bond issue. It's really not a big deal right now but it will be for certain in fy '08. Those are considerations that we need to look at.
>> christian, for the viewing audience, because I think this is a real important thing for people to understand, articulate, or susan, either one, articulate really what the average home owner is in Travis County. I mean, when we say that the average home is $203,000, and how this is calculated with regards to people going do I really get a tax decrease this year? Most people tell you, they just see the one tax bill, there's nothing really different, and they say, I'm writing a bigger check this year than last year am you can tell them all day long about the the factors with effective tax rates, but can you articulate that for people watching and in the audience?
>> the average homestead value is provided to us by the appraisal district. They take the total value of all home steds in Travis County. Not at homes but all home steds. There are homes that are not homesteads. And then that total value, which is billions of dollars you divide the number of home steds into it and you get $225.14, which .is the average value of the homestead. And that methodology is used year after year after year. So there is some benefit when you see from year to year. The average homestead has gone up. Probably safe to say very few people actually live in the average homestead.
>> there you go.
>> but it is a calculation that allows governments to come to conclusion about their impact of the tax rate on the average homestead owner. And when people see their total tax bill, as the auditor indicated, they usually don't say, well, my e sd tax rate is this and my mug tax rate is that and my county is that and as d. They look at the bottom line.
>> right.
>> and people will hear, gosh, I don't understand, 8 800, total tax bill on a house valued at $225,000 is much more than 800. But all you can do is what is within your jurisdiction. And so, if another jurisdiction changes its tax rate significantly differently than the effective, it can make a big difference on what the total bill will be. And so that is kind of the circumstances that you're faced, you're just one of basically three major governmental entities that are providing the majority of the tax charges to homestead owners and that would be the school district any school district, the city, if you're in a city, and then the county.
>> on the Travis County bill Travis County bill, no matter the value of your homestead, we grant a 20 percent homestead exemption that all you have to do is claim.
>> that's correct.
>> and 97-98 percent of our residents claimed that last time I checked. Maybe higher or lower. But that's for the taking if you ask for it.
>> that's the largest amount allowed by law and the only other jurisdiction, if you live right here, that does that is the health service district and that's because the Commissioners court set that tax rate and set that homeowners exemption.
>> right.
>> so that very large shup, that 20 percent, is to-- to--exemption, that 20 percent, is to homeowners in Travis County because the Commissioners court has granted that.
>> open the top.
>> off the top--off the top.
>> off the top.
>> in addition, if you're 65 or older, we grant an additional 65.
>> that's right.
>> all have you to do is say I am 66, I want my exemption of an additional 65,000. So 20 percent off the top plus 65,000 if you're 65 years of age or older or dis disabled.
>> and no Travis County tax taxes that.
>> rightthe other thing that needs to be factored--
>> right.
>> the October thing that Octoberrb--the other thing that needs to be factored in this 800 for the average homestead is the bulk of the money that we have to finance services because that's what the state legislature allows us to have. So we are finances the bulk of county government on that amount. Other jurisdictions, for instance, like the city, about that finances about 46 percent of their generally fund expenditure. So that's important to know. If you look, and I use the city of Austin just because it's the biggest. But when you look at that, it is not fair to say, oh, look, the city is run on this and the county is run on this amount of money. That is not true. Because the county, that does pretty much represent what we have. The city has many other sources of revenue to add to that. So if we are to deal with the needs that you all are evaluating, we're really looking at property taxes to pay for that. Because we don't have many other things. You stretch it, try to increase fees, try to maximize the interest we earn, all of the other things. But that's a minor amount of money compared to the property tax. So one of the things I like to look at is for the average homestead, the average homestead probably pays more a month in average high speed cable than they do for all the county services that you render. I think it's always useful to have a concrete example of what people pay for the entire adult juvenile, civil criminal justice system, prosecution, health and human services, the jail, you know e all of the corrections, collecting tax taxes and all of the other things we do, emergency medical services, grounds and air ambulance outside the city. All of that buys you about what it costs for high speed cable.
>> I'm looking at a littlity bit--a little thing but it is important. What we have is average values, going from allegedly 203 thousand, which coincidentally what mine was last year, and allegedly going to 225. What is not figured in there there is a ten percent cap on how much your taxable value can go up in any given year. So it may be that the appraised value did indeed go up to 225. Mine didn't. It went up 26 percent. But you're only taxable, thank you, art finally caught up with me, or you finally caught up with art. But the 225 is more than the ten percent cap. So the appraised value may go, is indeed going up more than the ten percent but the then percent cap will actually bring that number down ever so slightly because the ten percent is about 223,000. It is moddest. Less. And it means you're going to get more the next year. We're looking at zeroing out what the appraise value did without overlaying on top of that that there is the ten percent cap. So we are going to be ever so slightly.
>> you don't need to get all jazzed about your ten percent cap. All it does is set you in for the upcoming year. Unless--
>> three years to catch up.
>> so, I mean, unfortunately they are going to get you one way or the other unless you just have a huge adjustment in the appraised values of real estate in the community that are going to go down. There is no indication that that is the case.
>> can somebody help me out, sorry, can someone help me out with the quarter page ad on the next page. I'm confused by that. That's probably the point. We're going to conduct hearings and it makes sense that we have to say increasing the tax revenues. That's the dollar amount by a certain percentage. But it's the income line that perplexes me. Scheduled to vote on the tax rate that will result in that tax, there's the word I'm looking at, increase. Are we talking about the tax revenue increase? Or are we talking about the tax bill, which in this case is going to be zeroed out?
>> this language was given to you by the legislature with the wisdom that they have. And therefore, the answer to your question is, that's the sentence.
>> wow.
>> to explain it is very straight forward. There is logic behind it. The increase beyond the effective tax rate.
>> but one thing, the truth is the effective tax rate calculation in Texas is very fair. It is. It's logical but complex. One of the things that it does is after you calculate effective, you get the taxes from new property. That makes a tremendous amount of sense because when the new property comes in, everyone assumes they will require services just like the old property.
>> sure.
>> the conceptual thinking behind that is you can have the same amount of money at the effective rate that you did last year for the same people. But if you have more properties that you have to provide the same level of services, then they tax to pay for that. So that is not, and I think the ad that the legislature in their wisdom created mud muddies that water because the truth is that when you get new property, you have to support it. And what this does is at the effective rate, the taxes that they are paying are provided for those services. Not really a windfall, here is lucky new money for you all. It is to provide the same these for more people.
>> and that I was debated, one could debate it here, as to the logic.
>> right.
>> there are multiple sides to that issue. N and it was debated and decided upon by the legislature.
>> so are we able to insert rate between that tax increase, tax rate increase, which is really what it is, without violating the law?
>> that paragraph is to include this. So I am disinclined to say anything at all, to take anything at all from that paragraph.
>> your answer is no.
>> no.
>> can we take out a separate, didn't we last year take out a separate ad that said by the way, this is what's going on.
>> it was a little paragraph that said, by the way, here it is in english according to what the Commissioners court would like to say. You're free to put anything in. This ad is not the short of the that we have seen--short seen--shortest ad that we have seen. It is long and complicated. But fill disclosure. There's data if here that my sense is, the first time that this law results in these ads, you know, you say gosh, there's a lot here. But over multiple years, a member of the public will be able to track from year to year to year to year. And there is where you will be able to see trends. I think that's probably what was part of the intention behind the significant increase in the amount of data being required to display to the public.
>> we pay for a quarter page.
>> yes.
>> no matter how many word.
>> thart.
>> if we can add a sentence or two toward the end that's truthful.
>> counsel.
>> there is nothing in the law that says you cannot include additional information in your ad. As long as your ad includes all the specifics, all the specific words that the statute, that one bill said you had to include and all the substance that the other bill said huh to include, there's nothing there that says you cannot add a paragraph that says, as long as it's truthful, what you want to say.
>> that the good legal advice there.
>> the legislature wanted transparency. If a member of the Commissioners court was not clear on the ad, you would almost say that it would not be transparent without some sort of--
>> I think the average taxpayer wants to know what's the impact on him or her basically.
>> that's right.
>> all this other legalese, my guess is they are a lot less concerned.
>> about all of that, ze and the last paragraph does say it. The last paragraph does say what is going to be the impact on the average homestead. Is it going to be anne carries or decrease--an increase or a decrease.
>> right.
>> if you do wish to add language, I urge you to decide that today so that we can get this to the newspaper in sufficient time for them to run it on the required day and in advance of the public hearings. If you do choose, you would be having to go above the effective tax rate on the motion that's I guess on the table. The hearings would be on September 12 and 19. The ad would appear on the 5 5th.
>> how much money are we talking about generating with this particular motion?
>> about 3.6 million.
>> still have one-time money money. Plus one-time money.
>> yes.
>> but the difference in the motion and the effective tax rate doesn't generate that much. It generate just an if you hundred thousand. Right? 172,000.
>> the unallocated reserve already backed out of that amount.
>> I thought the motion was that you, was to set the tax rate at 44.99.
>> that's it.
>> yeah.
>> what I said, that generates 43 2,000 roughly.
>> right.
>> over the effective tax rate.
>> no. That gen rits 432,000 more than a half a penny more than the effective tax rate.
>> more than the 3.2.
>> the effective tax rate is 44.43.
>> okay.
>> that's the $13.
>> a half penny more than that gives you 3.2.
>> yeah.
>> point 0056, which was the motion, gets you 3.6 million rather than 3.2.
>> let me ask, 45.16, how much, at 45.1, how much revenue does that generate?
>> 3.6 million.
>> no, no, no.
>> oh, 45.16.
>> still is decrease.
>> I see.
>> generates in the incremental amount over the effective tax rate of about 4.7 million.
>> I just would like to make a substitute motion to that effect. Which would come a lot closer . Anyway, still a decrease. But it is more revenue that we can deal with a lot of these requests coming in from some of the departments departments.
>> I was trying to stay under 45.
>> me too.
>> symbolically, if you know tax rates and stuff, I guess it means something.
>> 44.99 generates how many new million, how many million dollars?
>> 3.6 million.
>> over the effective.
>> over the effective. More than what is in the preliminary budget.
>> of ongoing money.
>> of ongoing money.
>> you have ongoing too.
>> that is all ongoing incremental increase of on ongoing money.
>> net of--
>> that's net net. And that is a $3 decrease.
>> okay. Substitute motion though by Commissioner. Is there a second? We're back to the original motion which is 44.999. Any more discussion of that one? All in favor. Voting against, Commissioner dougherty. Do we need a motion on advertising et cetera, taking appropriate action for us to not only advertise it but set a public he >> I would recommend, with your concurrence, that we bold and make larger font, which has no reference in the statutes, the $3 decrease. >> okay. That's the motion. >> second. >> anything else? All in favor. Show Commissioners, Gomez, Davis, son lightner, yours truely voting in favor. Against, mr. Dougherty. Anything else? >> thank you. >> thank you mr. Smith and mr. Mill lis. Wale make sure you get your paychecks on time day after tomorrow. >> mark up will begin September 6. >> thank you. >> thank you. >> next Wednesday. We'll get you an update on resources available. You have what you need for that. Okay.
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Last Modified:
Wednesday, August 30, 2006 12:28 PM