Travis County Commissioners Court
May 26, 2009,
Item 23
>> good afternoon, let's call back to order the voting session of the Travis County Commissioners court.
we have one item left on our voting session agenda.
that is item no.
23.
receive and discuss the first revenue estimate for the fiscal year 2010 budget process.
>> [inaudible - no mic]
>> it is very broad.
and very preliminary.
as we said before, really what has happened in the economy has not happened before.
it's a very difficult -- it's very difficult to project.
and this is our first stab at it.
as we get better information, I would expect the estimate to be more credible.
but this is really what we see right now.
blaine will go through that.
then part of where we end up in the year is what we think in terms of revenues coming in as well as what expenditure levels are.
planning and budget office takes a stab at that as well.
so leroy can talk about that and blaine, do you want to start with revenue.
>> blaine keith auditor's office.
judge and Commissioners, this is the first estimate for this year's budget process.
this is the format we've used for a number of years.
for the first one, as susan said, general fund only.
it's very similar to the format that we used back in February when we did that -- that preliminary look at where we thought we'd be as far as revenue.
on the left we give you how we calculated the fund balance for the end of the year, that carries over to the next fiscal year.
and the next part we make our estimate of revenues.
obviously we go through this process of calculating the fund balance for every fund, every revenue estimate.
after this one we go to the more traditional format that you are used to seeing with all of the funds.
we won't see the calculations here.
this is something that you do, but you only see in detail right here.
we're basing our estimate for next year based on this year.
we really haven't had time to get to look at what departments and offices have submitted to us yet.
we'll do that more in the second one.
this is just to give you a very broad look.
as of the end of -- of April, general fund balance was about 208 million.
we expect to bring in about another 30.5 million in revenue this year.
based on p.b.o.'s forecast, we will probably spend or end cumber about another 184 million by the end of the year, of course this is -- this is the standard pattern because most of our revenue at this point is in.
most of our tax revenue is in.
we will be spending more than we will be taking in the next few months.
we ended up with a -- with a $54.4 million estimate for the end of the fiscal year.
that's extremely close to what we estimated in February.
i think it was 54.7 million.
i would not have made book on that a few months ago, but it worked out well.
we felt that our forecasted revenues would come up.
it did, just that p.b.o.'s forecast and expenditures went up by almost exactly the same amount.
we think that we will carry about 54.4 million into the next budget process.
we a first run, a tax run for next year, that's 322.6 million, that's at 35.27 cents, about one and a third cents higher than the current rate.
as susan laid out in the memo, this is a very conservative approach to taxes, there are many things that we don't know about taxes yet.
we are still two months from getting the certified value.
we have tried to be conservative.
we did last year at this time, we are glad we did because it's worked out well.
since taxes are a main source of revenue, if we make a big mistake there, then we're in real trouble.
we have to be cautious with our estimate there because if we get too aggressive, then we are courting disaster when it comes to -- to property taxes because we don't -- obviously we don't have a sales tax or anything else.
so we're looking at 322.6 million.
other revenues, which is -- which we calculate basically taking our forecast for this year and making some amendments to the things that we know about, it is about 70 -- $70 million, which is about -- about three or four million less than we are forecasting this year.
the two biggest things are interest, we expect to be down even more next year, this year we began the year with some -- some investments, we are paying a nice interest rate.
but those have rolled off now and unfortunately we're not being able to buy those now.
and election revenue.
it is a big thing.
we had a lot of election revenue this year.
we're not looking for that next year.
even though we have election, we're not sure when the revenue is going to show up sometimes, a year or so later.
and obviously any elections that take place in 2010 will probably -- will take place in the fall, that's actually our fiscal 2011.
so expenses for elections we expect to be down, but revenue is going to be down, that's a big item right there.
in total, we're looking at 447 million-dollar at this point for next year for the general fund.
on a budget to budget basis, that's -- that's down about $4 million.
that's -- that's -- sometimes it's up, sometimes it's down at this point of the year.
just it depends.
the single biggest item is that fund balance is on a budget basis.
it's down about 3.2 million, that's most of it right there of the difference.
we will do obviously at least one revenue estimate a month through the rest of -- of the year, the next one will be on June 30th.
it will have all of the funds except for probably our two internal service funds, risk management and then employee health care fund.
on a -- on a conservative basis, that's where we see that we are as of end of April, looking at what resources you will have for next year for the general fund.
we will be glad to answer any questions that you have on that.
>> questions?
so one -- what is the -- the payment for an election due, when is it due?
is it due like 30 days after the election or --
>> I don't know, you would have to --
>> [multiple voices]
>> there's no predictable pattern.
>> I don't recall seeing a date in the contracts that we have --
>> no.
>> various entities.
>>
>> [indiscernible] with the auditor's office, for most of the entities with which our county clerk contracts, they're supposed to pay 75% of what's due before the election, then we send them a follow-up bill.
but the biggest problem is that perhaps next year there will be a primary and that has to run through the secretary of state's office and last few times that we have gotten reimbursement from them, it's been more than nine months after the primary.
because -- because of all of the process that has to go through.
so that's -- that's why there's not going to be general fund estimated revenue for elections next year.
>> so it's not the other entities that you run elections for, it's the primary.
>> right, it's the primary.
>> then the other entities when they have their own elections like in may, when we're not a part of the election, all that runs through special revenue fund as per statute.
so you don't see that in the general fund.
>> but the primary revenue comes from the state comptroller?
>> yes.
well, actually from the democratic and republican parties but through the -- through the secretary of state's office.
they have to approve all of the expenditures.
so it goes to the secretary of state and then --
>> parties to the state.
>> > okay.
>> to -- let me make sure that I understand this.
to get the same level current operation and maintenance along with this -- with the interest and debt service and all of the other things that require looking at the effective tax rate, what will we have to go above just to meet those obligations that we already have in place and on the ground running?
>> this estimate, commission, we use 3% over effective, which are the guidelines that you gave the budget office.
>> right.
each penny brings in, does anyone know off the top of their head.
>> about 9 million.
>> 9.1.
>>
>> [multiple voices]
>> effective tax rate.
>> where we are now.
>> right where we are now, correct?
>> it's just a lot of uncertainty still out there.
>> when will we -- I know that we have about five of these.
five estimates.
when will -- when will we get clearer a better picture of where we are in this process as far as the -- the reports are concerned?
what -- that third report or the fourth report will get more of a clear picture exactly where we are because these numbers are going to continue maybe to move a little bit.
>> usually we know pretty closely by the third estimate, that's in July.
we quite often have the final certified role, due by July 25th, after that, the only thing that could really affect it would be anything that would affect debt.
>> to -- let's say if we don't go 3% above the effective tax rate, let's say we are at the current, at the effective tax rate, what would that be as far as the shortfall amount that we could actually be looking at probably -- not saying that we're going to do that, but if we are saying 3%, to me just a current maintenance and operations, debt service and all of these other requirements, all of these other factors that we look at, just to stay at the effective tax rate, how much of a shortness would we have at that point --
>> given over the -- over the effective part of the m and o, each cent brings in about 9.1 million, so one and a third cent would be about 12 million.
>> how much?
>> about 12 million.
>> $12 million?
>> you would add this -- it would be about --
>> [multiple voices]
>> yeah, because we added 4 million now,.
>> it would be about a 16 million shortfall if you went to the effective --
>> 16 million.
okay.
>> the other unknown out there as we go on, key points are when we get the certified role, appeals come in, due about June 1st.
we will hear what the appeals are, what's litigated.
that gives us more of a feel.
we're using on this estimate we use the new value as estimated by the chief appraiser, when we talk to you in February, we have that much lower.
we have got that higher, what he thought.
the other thing that impacts it is the expenditure level.
that is -- that is, you know, p.b.o.
estimates what they think will be spent and what will be left.
if something accelerates that expenditure, you know, say our jail population kicked way up, the expenditures kick up higher than we thought.
that would impact that ending fund balance.
they are watching that very carefully, but that impacts it well, not only the revenue coming in, but the expenditures, of course that is what was budgeted for the department.
it's not as though they are doing anything wrong when they spend their budget.
but that is another estimate.
the business personal property wasn't coming in until about may 22nd, we need to see how that came in the renderings on that.
so, you know, as time goes on, the other thing that is a concern is, you know, are we going to see additional bankrupts for major tax holder -- taxpayers.
will we see additional layoffs with some of our major employers.
you know, if we do then that's not a good thing, if we don't that's kind of leveled off, we don't see it, then that's another story.
part of it is we're getting more facts as we're going on.
i'm as nervous about this estimate than I've been in the 20 years here because so many things are so different than they have ever been before, it's very difficult to predict.
blaine is talking to the revenue collecting offices, we are also talking to -- to elliott beck in the county attorney's office and dusty knight in the tax assessor's office sometimes they get a feel for what's going on, who is filing bankruptcy, those kind of things.
it's a county effort to keep on top of this.
the other revenues have gone down, too.
the building permits are down because of the drought, park revenues are on the lakes or not what we would be if we had a lot of water.
nothing to do with the economy, but impacts these things, like blaine said one of the big hits we took and everyone took was on interest revenue.
since we get our money so early we made a fair amount there on interest.
and blaine is right, I mean, once the investments fall off and mature, our investment people are really investing in pools because the return is so low on other instruments that it actually costs more than the interest that you earn.
i think she was at some of them are coming in at like --
>> less than half a percent.
>> less than half a percent.
really low interest rate.
almost no interest at all.
but that makes a difference, that makes a difference in all of those funds.
we have healthy fund balances in the health insurance fund, road and bridge, general fund, debt service fund.
all of those have earned interest, that's been a good thing.
now by the same token, we have never issued debt at the low interest rate that we did last Tuesday.
that's kind of the other side of the coin, we are seeing the benefit of low interest when we are getting out there to borrow.
>> the judge asked about the expenditure side a few weeks ago.
i took a look at fuels, t.n.r., you augmented their budget about $930,000 for fy '09.
of that, that's the additional augmentation.
they are projecting a savings in that account of about 850,000.
so these have been all of these numbers have been incorporated in the numbers that we've submitted to the auditor's office.
the utility budget, we still do not have -- a number for any savings, if any, on that.
your total utility budget that facilities manages is about $4.6 million.
they are going to -- to have an update on the expenditures because some of those meters are off cycle and they do actually go through a line item analysis for us for the second revenue estimate.
so we could see some savings in that area.
you know --
>> that includes the -- the line item budget plus any reserve?
>> well, the reserves are separate from that.
and the court actually put 1.1 million in a fuel and utility reserve last year and we're projecting that they need will not be needed.
and so those -- those numbers are in the ending fund balance.
the court also put an additional $3 million on top of the allocated reserve last year.
as kind of an economic downturn.
you put that into your tax rate and it appears that this -- at this point that we could possibly finish the year with a -- with an allocated reserve balance of about $5 million.
each week on your budget amendments and transfers there's an itemized list of each of the reserves, exactly where the balances are.
the only tricky part about that analysis is that like on allocated reserve, if you looked at today's budget amendments and transfers, you would see a billion of $4.8 million -- you would see a balance of $4.8 million.
if you look we did a resolution to purchase those vehicles, you approved a reimbursement of about 1.3.
once those c.o.
funds come in, then we are going to be able to replenish that 1.3.
a couple of other reserves, obviously your planning reserve is projected to be expended totally.
your annualization reserve, which is another -- another reserve that helps you maintain a fund balance, a 2.3 million obviously we're not projecting spending any of that.
the health and human services reserve that was at 400,000, we're projecting that you will need at least 400,000 to spend there and we're projecting a zero balance.
and then basically, in your -- in all of the new financial system, we're projecting that there could be as much as 300,000 that -- that would not be used this year, but obviously it's incorporated into the target budget's for next year because we anticipate those -- all of those funds will be needed next year.
the one area --
>> leroy, did we ever get -- didn't mean to cut you off -- go ahead, I will come back.
>> I just wanted to mention one other thing.
you know, we do calculate a health insurance contra account.
it's kind of like health insurance savings.
we put that in several years ago and we calculate it each year.
what it is is that the court previously had paid something like $179 a month or 190 for people that declined health insurance.
you stopped that policy some time ago.
so we were saving -- saying we would budget the entire amount, $629 a month, but we were only paying out 170 or 190, so we were having stash savings.
as those employees retire or resign, that program is not in effect.
we are not getting the savings on that.
actually we will be add adjusting that contra account down by about $400,000 during this coming budget cycle.
that's one thing that affects the ending fund balance.
if you have a large contra account, you don't need it in savings it pulls your fund balance down.
so that's where it is.
my -- I might remind you that rodney and I will be bringing -- the summary of all of the budget requests and everything to the court probably in the second week of June, we will be reviewing with you all of the requests on all of the various funds and everything.
>> okay.
>> thank you, leroy.
what I was going to ask, we established an efficiency committee basically charged to go out and look at ways, especially with the big spike in the increase as far as fuel is concerned, it's going back that direction again, going -- getting on up there, fuel.
one of the charges was to look at that as far as throughout the county to look at ways to -- for about -- we will be able to save by not spending, per se.
in some sense.
i'm just wondering was there any type of inkle link from the committee itself as far as looking at departments coming up with fuel savings, other type of savings that may be related per department to see where we are on that?
i'm kind of concerned because maybe it would help a little bit if we could see -- what has happened with that.
with that part.
may not be a part of what we're talking about here but I think it's all budget related, in my way of thinking.
but anyway --
>> Commissioner, the goal of the committee was to try to hold a steady state fuel consumption going into 2009.
>> so where are we as far as that's concerned?
>> I don't recall the last report that I saw I think we were actually down.
>> down?
>> yes, sir.
>> which is a savings?
>> right.
>> is it fair to say that the departments really are holding the line across the board?
>> our indication is that the departments are not spending out.
they are being sensitive to the financial situation.
just last Friday I sent out a memo to all of the departments asking them to evaluate all of their encumbrance and preencumbrances that were 120 days or older in which we're tempting in the event that those encumbrances or preencumbrances can be liquidated we're asking them.
i have seen several that say please help us liquidate these encumbrances.
i would say they are being very sensitive to the financial situation and trying to be helpful.
>> which comes under the umbrella of expenditures.
so again I wanted to just hear what you had to say on that.
were everybody aware -- in other words, do we really have a team effort going here.
it appears that we do.
>> uh-huh.
>> okay.
thank you.
>> let me make sure how I should feel about the reserve funds.
>> [laughter] when I see the project fund balance, I should assume that those reserves like the allocated reserve, whatever we don't spend there is rolled into the $54 million.
>> it is rolled into the 54 million.
here's a good way to look at that fund balance.
your budgeted fund balance is the amount of your unallocated reserve.
that is currently at $41.3 million.
so what you are saying -- everything else is budgeted to be spent with the exception of your other reserves like the -- the annualization reserve, you wouldn't expect to spend.
>> fuel utility.
>> fuel utility.
you can add those up and then what you see, once you add all of those reserve numbers on to that 41, that would be about 51 approximately, the rest of the fund balance are those amounts that have been budgeted to the departments that we have projected that they're not going to spend.
>> okay.
>> what is, you know, about four or five million dollars.
>> I would hope that's going to come up before the end of the year, that ending fund balance will come up from that.
>> yeah.
>> questions, comments?
we eagerly look forward to the second -- revenue report.
>> we thought that we would be invited back
>> [laughter] if we have good news, we will tell you, even if it's between us.
>> thank you, leroy.
>> thank you all.
>> this legislative item -- we need these?
>> yes.
>>
>> [indiscernible]
>> all right.
let's recess the voting session of the Commissioners court.
that's my motion.
>> second.
>> and we take up the housing finance corporation.
all in favor?
that passes by unanimous vote.
with Commissioner eckstein.
>> Eckhardt.
>> what did I say?
>> eckstein.
>> oh, Eckhardt, other urgent business.
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Last Modified:
Tuesday, May 26, 2009 2:00 PM