Travis County Commissioners Court
January 30, 2007
Item 6
Number 6, consider and take appropriate action on the following topics related to the fy '08 budget process process. A, fy '08 budget parameters that present a range of budget issues to be address addressed, and 6 b, proposed fy '08 budget guidelines that establish policies, strategies and procedures for the budget process.
>> I'm christian smith with the county and budget office office. To my left is my colleague, lee loi ellis, budget manag manager. Have you a pack of material that has been distributed to you, elected officials and financial staff of. Composed of two parts, part a and b. Part a is the numbers, part b is the rules rules. In January or early February what we like to do is tell you everything we know. Give you an overview of whether we know with respect to values and expected fiscal challenges. All of that is in part a. I'd like to walk you through those numbers there in the form of a high-low range. Then what we did was take that and develop guidelines which are based on fy '07 declines. That to you in legislative style format. We have met with you individually. Through that process, each of you had different thoughts on the guidelines we have incorporated. This is the first time to have a collective opportunity for the court as a whole to review this and come to a conclusion. We are going to ask if you can vote on the guidelines whñrks today or another time so that you are comfortable, and these are in essence instructions to the planning and budget office for the development of the preliminary budget. As you know, that preliminary budget is intended to be a balanced budget, one that is responsible, that you can then take and add just accordingly once you go through budget hearings in August and markup in September. So we have a long way to go, but we want to at least get out in front of you what we know financially. So with your concurrence, I'd like the at least go through part a. Fairly quickly. We have an information from the appraisal district that the total of value of all property is expected to go from 74.2 billion bull to 82 82.8 billion. So we--billion. So we are growing. That includes two and a half billion dollars of new construction. Art cory, the chief apricer, feels fairly comfortable with those numbers of and his history is quite solid. When he, as you know, in December, he usually provides a prediction of what he will certify in July July. He's been doing that for many years. That goes to the bond rating agencies. And usually if you go back to his original predict predictions that he gives us in January or December, they are pretty right on. You can't take it to the bank but at least can you see where the bank is. He is also predicting that homesteads will go from 225 225,000 to 243,000. That's an eight percent increase. Well, as you know with the effective tax rates when values go up pecktive tax rate goes down and vice versa. We start with the effective mno plus tax rate. What that is is the tax rate that provides the same amount of property tax revenue, and the year before from existing properties on the roll, applause applause applause--plus whatever it takes to pay off the debt service. That tax rate is 4189. That is just three cents below the current tax rate. This would result in a de decreate in the tax rate. A little over three cents. For planning purposes we also wanted to show what two and a half percent above the effective ml plus rate would be and show what the impact on the average homestead would be. At the effective mno plus debt, the impem would be $4 a year and at two and a half percent more than that, it would be $21 a year. Some of you have expressed some attention on giving some attention to the growth in the general fñnd over the past few years. As you foe, the generally fund has uncarried from 10.7 percent. We are showing on this legal size sheet of paper, with your forbearance, I'd like to walk you through our assumptions, or at least our vision of what a range of low high revenue and expense might be for the upcoming year. We have a beginning fund balance. That increased 4.8 million. That's the ending fund balance carried forward through the upcoming year. That's 67.9 million. Current property taxes if we go with the effectivetive mn mno plus debt, that's a drop of 3.1 1 cents from the current rate. We would have a property tax revenue of 272.6 million. If we go with two and a half percent above effective mno, that amount would be 279.5 million. So there's about a 7 million difference in that little two and a half percent results in about 7 million of additional revenue. Other revenue is made up of literally hundreds and hundreds of individual revenue line items. And we looked at the history we have chatted with the chief revenue estimator, auditor's office, and we have a range of 75 to 77 million. That is not as precise a number as it will be once we start getting revenue estimates. But it's good enough for the time being. So with that, we would show total revenue at the low amount of 415.5 million. At the high amount, 424.5 million. That's anne carries from 3.7 3.7--an increase from 3.7 to 5.8 percent above the current revenue in the '07 budget. Now the question is can we live with that. What about the expenses we know that are probably likely to confront us. Plus recognizing that historically there has been a desire to keep compensation and benefits at an appropriate level. We have had unallocated reserves at 11 percent for ten yearsyears so we have an unallocated reserve amount that is a range of between 40.5 and 41.5. And that depends upon that generated by the amount of revenue. Capital questions resources account was 16 and a half man this year. That's the cash to pay for capital. We're showing a range of 16- 16-18 million but that's going to be based on read and available resources. Had a has been a substantial lever used in the past to help balance the balance. It is a one-time, however, expenditure. We have regular all indicated reserves--all indicated reservers. We are suggesteded as we have in prior years, that you can live with an allocat allocated reserve of between two and two and a half million. It's currently 3.8 million. It is larger for a variety of reasons but we believe that it is reasonable to go with the two to two and a half. In your prior history, in the absence of some known event, excuse me, some known problem that might occur in the future that is uncontrol uncontrolable, that two to two and a half should be sufficient. Then we have other reserves, annualization reserve, green circle employee reserve, mental health mobile treatment reserves. I'm going to skip the sheriff's, jail overcrowding inmate pharmacy, senior and disabled reserve. All of these were special specialized reserves established in the '07 budget. What we are suggesting is that we not treat, we treat them as one-time. Take them off the table. Then revisit the question. Should there be an ain't poverty tour as opposed to just a reserve--expenditure as opposed to the reserve. The green circle, annualized annualizedation reserve, appears there won't be the substantial dislocation that we experienced this year in '07 on, with market salary surveys and green circle employees, which are employees being paid below minimum. On jail overcrowding, out of county, we are, this is a safety valve. We are showing between 8 800,000 and a million six as a reserve. We will know more when we know more about what's happening with the jail construction project. This assumes that the jail construction project is going to proceed according to the time line that facilities management has set out. And we are not making any assumptions about whether that time line will be modified based on the merits of the program. We are also supervising an average daily population of 2825. That's about 150 more inmates than we had in the '07 budget. When you deconstruct some beds, then we're going to still have the inmates. If you don't have the beds and you have the inmates, you got to put them someplace. So that's why it's out of county. And there's a range. The range is driven by what the variance bed situation will be and those are judgment, public policy, and strategic issues that the court is going to be facing in conjunction with the sheriff's office on those variance beds. So since we don't know what the situation is going to be we put a range down so that at least you got that potentially covered. Might not be 800. Might be less. Could conceivably be more than a million six. That's if the jail project goes forward as currently planned and jail inmates do not start going beyond what our history has shown. As you know, we have had great fluctuations in inmates and they are expensive to take care of. Bottom line is, you have reserves totaling 59.4 to 63 63.6 million in this high- high-low fall assistlow-- assistlow--analysis. Budgets, that's the largest mum on this sheet but it is a calculation that based on the last four, five years of the approach the court with planning and budget has taken, you have a budget target. That is in essence your '07 budget less any one-time plus any annualized ized expenditure am we call located that and that goes from almost 312 million to almost 340 million and that is simply taking what '07 is and adding what was, decisions made by the court in the '07 budget to the various individualized departmental budgets. Then we get into wages and benefits. The total of these is in the nine million range. So that's another large number. What we have is health benefit. That's an assumed increase of six to eight percent on the expense side. Includes new retirees entering the plan but fewer '06 retirees were added to the health plan than anticipated. And the health plan has a healthy fund balance, there's going fob policy and strategic questions before you on that balance because there are choices to be made made. But for the time being, we're showing this 900,000, a million two, it is lower than we have seen, we have projected at this time in prior years. Sometimes we have been in the two plus million dar range. We have two different compensation adjustments. As you foe, we have rank and file and peace officer pay scale employees. We are assuming in this analysis, we assumed a four percent compensation increase for all rank and file. And these numbers include benefits. And that's 5.4 million. And we also put what the amount would be if it was four percent for the peace officer pay scale so that there would be symmetry and equity between those two different groups of employees. And that is just over $2 million that could include a two percent anniversary raise plus two percent for other increases totaling four percent for pops. As to what the component parts in rank and file pops would be, such as cola versus performance base pay versus add pay, versus all of the different ways in which compensation increases can be allocated, it's probably too soon to come to a conclusion at this point. What we are trying to do is put big giant building blocks down so that we can see, can we balance the budget at the revenue that we have available to us. Elected officials, we are assuming that they are going to follow suit the same as rank and file. So we put four percent. The amount of $70,000 for elected officials is smaller in the past because district judges are at the top of the amount, the maximum amount allowed by statute. So since jp's are hooked to judges, that's a whole group of people that would not be seeing increases based on the district judges salaries salaries. We have career laiders of 26 260,000 which is similar to '07. The court has historically wanted to address retire ee colas. We put three percent down, which is about 300,000. We also are, as you know, last year we had a very large increase from the Texas county district retirement system because every five years they go through an analysis of their members and make adjustments adjustments. That cost was a million four in '07. This year is the first year of a face-to-face face-to-faceface-to-face-- five-year period. They are not going to do a reanalysis. They have advised us that they have healthy investment earnings. Therefore we are putting zero down. If indeed the investment earnings result in a drop in our rate we are probably going to suggest that we hold the rate the same and do some good things for the retirement system for our employees, because that's the time to do it, when you are not seeing these large increases. So that's about $9 million, eight at the low, 9.3 at the high, on wages and benefits. That then leads us to on the expenditure side, the departmental programs. As you know, there are the priority program areas, three entities that have been have been vexing to the Commissioner's court and officials and drive a the lot of what the budget is all about, mental health, substance abuse, and work force development, county speak for getting people jobs. We have a half million to a million dollars. Those are driven by proposals to spend. We have criteria. The criteria are in your budget guidelines. We also know that it's likely that some amount is going to be dedicated to those three primary areas. Juvenile justice, we are informed that may be zero, it may be as much as a half a million dollars. We're advised that there may be a need for additional resources on the juvenile justice side because of changes from the state or from grant reductions but it still is a little too early to tell. We may see a request for additional detention staff or other juvenile justice issues in the 500 to 600,000 range. So that's why there's a range there. Initiatives to reduce jail population, sometimes we have had rocket, socket, missile docket, variety of different techniques to be used and that have money attached to them. You have to put an expenditure down to reduce inmat account. Some years we have had those and the cort has said go for it other years we haven't. Chances are it's going to be in the zero to 300,000 range range. We have sheriff's department increases. There are untrollable expenses. When--uncontrollable expense expenses when you have more inmates. Ew tilth, food, medical, pharmaceutical. If you have 2825 inmates, which is our assumption, 150 more than budgeted in '07. That's a 800 to 900,000 price tag.
>> I guess I'd like to see late or a written explanation of that assumption.
>> the assumption of 150?
>> 2825.
>> 2825. Okay. Yes. It is a best guess. Based on history.
>> one of those areas where the higher the assumption, the higher the reality.
>> and if that's the case--
>> '08 may be a lower assumption. Anyway, I'd like to see the eggs planationplan-- planationplan--explanation.
>> if we go with the low assumption, you are going to have us lobby you hard to rattle the cage of the system to get the pointed and elected officials to work to get that down because that system is very complicated. If you have an assumption that says we're going to hold the line we they'd to take steps to ensure that the going to happen or else build up reserves on the back-end. Saying it is one thing and doing it another as we know.
>> we have funding in three or four different cases. This court will rat this will cage with you.
>> beautiful.
>> that's a big issue I think because of so much money involved. Okay.
>> okay.
>> as we hurredly go through the rest of this report.
>> I'm trying to, I can spend as much time as you look.
>> how about five more minutes.
>> will do. We have con stabel. A million dollars added to their five budgets in '07 but that was a large increase due to execution specialist teams. We do not see that likely to be repeated in '08. Health and human services initiatives, we put 250,000 to 400,000. That's, we know there are probably going to be requests that are much greater than that. We also know that investments in those areas have been traditionally attractive to the Commissioners court and appropriatelve we also have a health interlocal with the city of Austin that is still underreview but that may cost some additional dollars dollars. Speaking of interlocal, we have the e ms interlocal with the city. And that is a sent of contractually obligated increases of when the city adds salaries or locations, we have obligations to follow through and that's in the 3500 to $700,000 range. We have b cp, which is the balcones canyon land program program. And that is about 900,000 similar to '07. What happens is that the money for the tive, --for the tif, the money comes in and has to go to the gcp fund based on obligations to that program. Fuel and utilities, last year, '06, we had large dis dislocations in the price of fuel. Right now looks as if fuel is stabilizing, if not going down, and so that whole area appears stable. But it's still a little too early to tell. We will know more as may and June come forward. But we certainly don't think that we are going to see the kind of dislocations on fuel that we had in the past where it was sky rocketing. We have a new county court at law. You voted an if you weeks ago to request the allocation, the authority to establish a county court of law. We are assuming that authority will be given to you because have you to pay for it then. And we are putting a million 250 to a million 750. There still is on low and high that depends upon the type of authority, the timing of the implementation the magnitude of the support support. There are a wide variety of support offices that have to come together to make the court work. And we also know that there's going to be one-time facility and equipment costs costs. That might be able to be accommodated within your capital acquisition resources account. So we still are probably in the million and a half to two million range. But for operating we have it at a million and a quarter to million three quarter range. New criminal did it court was tour in '07--thrñp-- '07--thrñp--expenditure in '07. There will be no additional one. The cost is built into the '08 budget. Medical examiner, we know there will continue to be an approach to meet national standards but it's to be determined as to what exactly the commitment will be. Its, which is the information technology group computer support, we have on ongoing maintenance agreements. And 700 to 800,000 of additional resources has been, looks as if it will be again on the table and also has been traditional, as has these maintenance agreements and their escalations. Risk management transfer, as you know we had a 1.2 million reduction in the general fund. Last year we built that into the oa budget target. There might be opportunities for further reduck shñnce but it still is a little-- little--reductions but it still is a little early to tell. Indigent attorney's fees. Those increases are probably likely. We are beyond the day when we were looking at million dollar increases but they have been two to 300,000 historically recently. Leases we have already built into the budget target 150 150,000 drop in lease expense. There may be further lease expenses but we don't know about a temporary space. You may make certain decisions programmatically that require temporary space spaces in '08 that will result in additional leases the there's going to need to be some further analysis of time spent on the space situation in '08. We have a variety of pilot programs. You were given a listing of almost $2 million worth of one-time programs. Those we expect to be revisited. Not necessarily sure that all of them will be recommended in the preliminary budget, but we know some will. Pilot programs sometimes work, sometimes don't work. Sometimes they meet standards, sometimes they don't. Sometimes there's not been enough time to actually have even any kind of results. So then you say, well, if you did it the year before, should we continue it to get the result. To at least get the data. Or if you can't get the results, life is tough, not enough money, sorry. Those judgments will need to be made. But we do, we are saying, well, chances are won't be less than a half million and could be as much as a million. We don't have any new building coming on line that we are aware of at this time so we don't see any maintenance and operational and custodial. Similarly jp, justices of the peace had 430,000 increase in '07 and that was due to collections and revenue driven programs that we do not, we are going to let that sit and mature. Unlikely those will be repeated. Then we have all other. That's for everyone else. As you know, we get over 450 budget requests. Each year. And analyze each one. So this is a million and a half to $3 million for all other requests. That may be high. Others could suggest, my gosh, that's low. Bottom line is--
>> .
>> with those department budget requests that we're looking at today, has that, I guess at some point, some of these figures may be altered because of the budget parameters, budget guidelines and stuff like that that we're going to be looking at. So that's just not concrete. It's just the request at this point as far as what they are putting forth, is that correct ?
>> these are nothing to do with any specific requests.
>> I know. Just anticipation.
>> right.
>> what you feel is coming.
>> yes. No , well, what will come to us a 10 or $20 million worth of requests. So that I know just because, you know, I've been doing this for a while. The question is, is it reasonable, responsible, to put a million and a half to three million for all these other requests. And my answer to that is yes yes. But this is a big valve. If indeed the Commissioners court said stop it, just stop it, we would crank that lever way back. If the Commissioners court on the other hand said, you know, we want to invest in had a wide variety of areas, and we want to really move here, then that lever could be pulled forward. That's one of those levers that you use to balance a budget. Did that answer your question, Commissioner ?
>> yes, christian.
>> all right.
>> sorry.
>> I won't call you Commissioner Sonleitner.
>> I hope not.
>> who had seen the budget issues beside the Commissioners court ?
>> this was sent to all elected and pointed official officials and their financial staff, about 150 people.
>> anybody what whoa-- whoa--anybody who has not seen the parameters can contact you or a member of the court and just get a copy of this.
>> absolutely.
>> okay. Budget declines. The two or three biggest ones. By the way, we will call up the legislative item next and try to reach the green circle employees. That that that--covers three or four items. I would doubt that we would reach more than that this morning.
>> you have a document under part b, which is a guideline six pages of legislative style changes that we are proposing to the guideline, along with two attachments. Because we also put together a two-page summary of those proposed changes. Judge, you asked for the most important one. Sometimes what's important is in the eyes of the behold beholder.
>> that would impact the county departments.
>> okayokay. As a result of going through the numbers, we received at least one strong set of observations regarding the growth in county government over the years, and we thought that maybe for the purposes of the preliminary, establishing the preliminary budget, it would be reason reasonable to establish a self-imposed cap on our growth of between three and a half and four percent. Excluding any nontax revenue revenue. Do we believe we can balance the budget with that discipline? And I say absolutely. There is no question we can balance the budget. Will there be departments and officials saying, but what about this, and look at what is not able to be pursued? Yes. Will you have an opportunity to come to a conclusion on your own about those? Absolutely. So, what we are suggesting is that for the purpose of the preliminary budget, that we put a cap on between three and a half percent and four, and that also we also match that to the compensation side, that the compensation be roughly three and a half percent to four for both employees and the rank and file and employees on the peace officer pay scale. When we know more, then we will be able to narrow these ranges down. And still be responsible. So those one area that you may feel very comfortable with and you may feel a little apprehensive about. But we certainly can deliver a budget that is responsible with those kinds of restrictions. New ft e, only 180 ft e added in the '07 budget, more than one of you have suggested that, gosh, that's a lot of folks. Wanted to know how come. Well, what we had was, we had in '07, the planning and budget office was authorized to recommend additional ft e if they are covered by new revenue, the if they are internally funded with existing resources, if they are part of a court approved program or a statutory mandate. Or part of these priority program areas. But in addition we had had language in '07 that said, and if they meet an extraordinary and compelling need. Well, what is an extraordinary and compelling need to one person is just an interesting idea to another person. And so we thought it would be appropriate to put some definition into what does it really, that is a reasonable kind of criteria, extraordinary and compelling but does it really mean. So we have language down that gives specificity, the health or safety of the public or a county employee would be measurably and demonstrably in danger those add add--add jecktives will be important. The need is of an emergency nature. The need cannot be reasonably deferred for a year and/or a significant workload increase. And we have a lot of workload requests, can be measured or demonstrated involving a substantial public requirement that would result in unacceptable service failures or degradations if not funded. So we got workload requests. People are waiting in line for something too long. The line is growing. Well, will that meet this criteria. It will depend. But at least we have some solid criteria that then if we put things in the preliminary budget, or don't put things in the preliminary budget that don't meet these criteria, then we're not doing our jobs. And we should be called to the carpet for that.
>> where in here would you, the list that you have, do they cover like including the price of the space?
>> interesting because the next bullet is space.
>> okay.
>> what we are suggesting is if you don't have space or have not costed space or don't have a plan for space, then we are not going to recommend it. And we're going to work substantially with facilities management where they are the ones that we're going to rely on. Yes, there is space, no, there is not space. Heck, we don't know. A lot of times it's heck, we don't know. And I have to acknowledge that in '07, there were recommendations made where heck we don't know, but I'm sure we can make it work somehow, those kinds of things occurred. And we're saying that's probably not a very good idea. That you either have it, can identify it, you know what the cost of leasing it will be, you know, or you know exactly what the cost of creating it will be. If you can't get it, you can't find it, and facilities doesn't know, then we're not going to recommend it. That doesn't mean it won't be funded. It might be funded after the preliminary budget or it might take a year to do so. Does that answer your question, Commissioner?
>> I just want to make sure no one misses it. So I would think that if you refer to it more than once, I won't be overlooked.
>> okay. So you would want to suggest extraordinary and compelling that we also say and spaces available, identified and/or costed.
>> I think so.
>> most of that you have gone through the budget process have commented. Not just commented, but complained about budget hearings and how you're put in a position of having to read complicated things that you have not had a chance to look at. People come in with late requests that come in with requests that haven't been veted.
>> if you say Commissioner Davis.
>> Commissioner Davis would like to talk about this. But Commissioner, you are joined on the diaz with some of your colleagues with similar frustrations.
>> okay.
>> what we have are some proposals in essence there is a short summary of pros and cons of each request that the departments would put in their budget request initially in may, and those would be summarizeded along with pbo observations as part of the backup. The backup materials would be provided at least seven days in advance to the planning and budget office. We will put together a packet so that you have time to read it. If the materials are not provided in that deadline, then we have had a suggestion. We will follow through and enforce it, that then the budget hearing would be postponed. If there's time available or slip to the '09 there may be some unhappy people. Once we start enforcing that that. But there will be happy people and those people will be on the Commissioners court because you will have time to look at it and you will also know had a when somebody says it's $57,000, you know it's an accurate number as opposed to I think it's 57 and it's really 72. We have had that situation with requests that aren't--
>> you discussed the budget guidelines with all members of the court ?
>> yes, I have.
>> that's why I move approval.
>> second.
>> I move approval of the distribution of the parameters which would include budget issues that I'm sure county supervisors, managers, officials, et cetera, will want to see. And so they will be ready for distribution.
>> I have one quick question.
>> okay.
>> about attachment a.
>> sure.
>> sub a, external evaluations. You have probably become aware by now that I love external evaluations. But the second sentence, agreement from appropriate officials that the program will be discontinued min the result do not meet predetermined targets. What about the circumstances in which unforeseen external tys make the predetermined targets impossible to reach or that it becomes apparent that the predetermined targets actually are inappropriate measurements of success of the program ?
>> that's good language. Can I work with you in the next day to put it in in.
>> sure.
>> or would you like to suggest it in the dias and we'll play word smith ?
>> we can talk about it.
>> let me add that language. That's good. And we have not always followed this.
>> I think that this is, it's certainly needed. My only concern is the external circumstances or where we find the measurements are actually not measuring what we, the kind of success we're looking for.
>> why don't I word a send sense or two, show it to you and if the concept is accept acceptable, then we can just put together and add it. Is that acceptable? To the person that made the motion to accept it?
>> no problem.
>> in addition to that, christian, there are going to be persons that will come up here and ask new ft e's, more than likely. And of course there may be opportunities in vague since that they already have in the department--vacancies that they already have in the department. I'm trying the look for a time line, I guess, to see where they are and fill in those vacancies that already exist in the departments, and of course, somewhere in the budget year, the budget cycle or budget year, before we look at new ft e and a bunch of other stuff, we just need to know what the status is of the vacancis that they are already have on the books. That's a big concern to me. Maybe some one else. But the new ft e's, it's something that I think we are going to look at very closely. I would also like to look at the vacancies within the departments also. I'm trying to get a balance here as far as how can that work or how would it work with you all to look at those vacancies.
>> we can generate vacancy reports any time.
>> you can ?
>> where the existing vacancies that have been open for three months, six months or a year.
>> yeah, okay.
>> those are easy to do. Now, it's a little harder to do. Why? Okay. Why is this. The whies are where the real interesting discussion occurs.
>> yeah.
>> some of the whies--
>> again if we are going to look at growth at three and a half to four percent of the increase in the general fund, the way we have things now, that's, and that's the low end of this, other than the 5.9 or whatever you had on the high end, looking at those things this, I think a lot of those things, in my opinion, would be a part of an increase in the general fund. So I'm kind of concerned about that. That's why I pull the question.
>> I think it's a good idea to look at that.
>> yeah.
>> we can send the court and the departments know their vacancies. We can ship that out to new perhaps April. The budgets are due on April 30th. So maybe at the end of , early April, send that to you so that you are at least aware of the vacancy under the three month, six month, 12-month variable. Would that help ?
>> I think so.
>> that that shines a little spot light on that issue.
>> anymore questions? All in favor. That passes by unanimous vote. Thank you.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Wednesday, January 31, 2007 6:55 AM