Travis County Commissioners Court
June 23, 2009,
Item 9
9.
consider and take appropriate action on fiscal year 2010 budget related items: a, fiscal year 2010 budget parameters; b, departmental budget hearings and markup schedules, and c, possible voluntary hiring freeze.
>> thank you, judge.
good morning, Commissioners.
if it's okay with the court, I would like to have leroy kind of walk through the budget parameters with you, we will talk about the remaining items after if that's okay.
>> all right.
>> thank you.
>> we have based these budget parameters on the auditor's first revenue estimate and what I would do is walk through these parameters.
we did receive on Friday the auditor's second estimate, I will kind of update you on that once we get through these.
as you can see the auditor's first revenue estimate was 447,068,873.
our propose for the fy 10 preliminary budget continues to maintain the unallocated reserve at 11%.
that calculation was based upon the -- the amount in the general fund because at that time that we calculated that we did not have the other fund available.
ie the debt and
>> [indiscernible] fund.
at this point we have the capital acquisition resources, car account at $9.2 million.
a regular allocated reserve of 3 million.
we have a reserve for fuel and utilities, although -- although it appears that fuel is holding and utilities are holding, we do believe it's prudent based on the volatility to have a reserve and we have placed a million dollars in for that.
waller creek, as you know, you're in a t.i.f.
and we will be briefing you in conjunction with the city on the update on that.
our projection based on rough numbers your 50% could be about $400,000.
we also believe it's prudent to allocate about a $4 million economic downturn reserve due to the volatility of what's going on in the economy.
i think you know over the last five days four of the equity markets have been down.
i don't know if that's an indication.
obviously the world bank yesterday had kind of a pessimistic outlook on the world economy.
we do believe it's prudent to keep an economic downturn reserve.
if you go on down, one of the things that -- that we are currently in the process of -- of
>> [indiscernible] with each individual department, going over our recommendations for them.
in the event that some of these departments have not realized their certified revenues per fy '09, then what we're doing is putting them on notice and essentially saying, we will one-time fund those programs during fy 10, but for fy 11, there -- you will be on your own to rejustify those.
in the largest of those is the star flight business plan.
i think all of you have been briefed, but there are significant under-revenue projections for this year on that plan.
as such we have taken $845,000 and put it on one-time funding for 2010.
likewise, we have elections that ramp up in 10, about 431,000, that should come down in fy 11.
i think that we have also briefed each of you that the projections on new construction that generate your additional revenue, we're currently at 2.8 billion for fy 10.
the chief appraiser has given us an estimate for 2011 of 1.8 billion.
that would be down about a billion dollars from where we're going into 2010.
as such we believe that the economic challenges that we'll face in '11 will be more of a challenge than 2010.
if you go to the next page, you know one of the -- one of the positive things about this is that -- this is the fourth year that we have recommended to the court as a health committee to hold the rates flat.
no increase.
i would be willing to say we may be one of the only entities in -- in at least Texas, I don't know about the united states, that's been able to do that.
but we have not in -- included any of the -- any of the increases because we're holding those steady.
likewise, as you are aware, several of our special revenue funds, health insurance fund, is -- has very healthy reserves and our outside auditors have recommended that we pull those down into a more manageable amount.
as such you will see in the middle of the page that we're talking about not transferring into the health fund, about 4.9 million.
and not transferring in 1.2 million from the risk -- into the risk fund.
now, our projections in conjunction with the auditor have been that probably 2010 will be the last year that we'll be able to do that, so that further emphasizes our challenges for 2011, we have about 6 million less dollars going into the general fund or staying in the general fund in 2011.
>> leroy I was hearing some of the discussion on the health care reform that is being proposed at the national level and the first lady was saying that -- that some of the difficulty is going to try to make sure that every individual understands that they have a lot to contribute to bringing about health care reform.
so if that's the case, then here at Travis County, probably every county employee needs to receive some credit for keeping these -- these costs down.
and the fact that we don't require any rate increases.
and she was talking about the need to change the diet to exercise and perhaps cook more at home and not buy so much fast food.
and -- so I mean I think all of our county employees, you know, need to receive credit.
for contributing to this.
>> it's definitely a group effort.
every single employee, you know the wellness programs that h.r.
has sponsored, the walking running, obviously the doctors, clinics that we have are very progressive, I know that Travis County clinic's system is being replicated in other counties and cities.
so I -- it's been something once the health committee recommended over five or six years ago to go to health insured to get the data, I think the committee is to be commended for their hard work over that and everybody.
then on the last page of these parameters, you can see that we have gone in, the budget guidelines for each department to give us a 5% reduction proposal.
of those, we have -- we have about 4.6 million at the time we printed this, that we are recommending that we take.
and we are in the process of discussing those cuts with the departments.
and some of those recommendations will be modified based upon those.
but this was the number that we had at the time that we published this.
there's also proposed additions in the budget.
the majority of those, one-time additions 3.3 million, these are a number of the pilot programs that are going on currently in fy '09, you can see on page 2 there's a list of any number of those.
then there's about 2.2 million of budget additions that were really maintenance occurring effort that we didn't see any way around of -- of putting in.
at this points, at the first revenue estimate, we were balanced.
you can see with these assumptions we have subsequently received a second revenue estimate.
i wanted to give you, we did not have a second revenue estimate the other revenue funds at the point we did these it's based upon our assumptions on general fund, but in the second revenue estimate, the general fund went up about $800,000.
however, the road and bridge fund went down about $6.5 million.
you know the auto registrations, the beginning fund balance pulled down.
the debt service fund that interfaces with the general fund in the calculation of the unallocated reserve, in other words we add the reserves in the road and bridge, the debt service fund and the general fund to determine what we had to put in in the general fund.
well the debt service fund went down 4.5 million, which would mean that we would need to make it up with one-time money in the general fund.
so your car account likely is to decrease from that 9.2 million to compensate for the decrease in the debt service.
we will have more specific calculations on that unallocated as we go into the third revenue estimate.
now, you know, there's no compensation in here for rank and file.
there's no compensation for the step increase for pops.
we believe that within the parameters that the court has given us at 3% above the effective tax rate, that -- we can bring the preliminary budget, even with the information in the second revenue estimate in at that tax rate.
>> there will be no retiring cola -- retiree cola either.
>> we need to get that news out, you know, as soon as possible.
>> uh-huh.
>> will we get another discussion of parameters before the preliminary budget?
>> we can give you an update.
i think the appropriate time perhaps would be --
>> mid July.
>> once we get the third revenue estimate that that's pushing -- we can do any Tuesday we can give that you would like an update on parameters.
we did not meet with the sheriff's office until July the 8th, obviously, the sheriff's budget is the largest in the county.
and the largest amount of cuts are in the sheriff's department.
so in answer to your question, judge, we could do that Tuesday following the 8th.
>> either that or any time before August one.
you finally adopted the preliminary budget the first part of August.
>> July.
>> July.
why don't we try the week before then to have a discussion.
>> sure.
>> can we do that?
>> what action do you need today on the parameters.
>> no action today, judge, we are giving you the updates.
we wanted to really let you guys know that the picture hasn't changed a whole lot from our initial discussions, as we went into this, went into it with three priorities, that being to minimize or not have layoffs, minimize the service level impact on the user or on the community, then to get compensation within the preliminary budget if possible.
i think we have done a fairly decent job of accomplishing two of those.
we obviously are not able to get compensation into the preliminary budget.
but we -- but I think what you have before you today is a -- is a pretty good representation of careful thought and care to -- to minimize the service level impact on the community and not have any layoffs.
>> many thanks to everybody, everybody is sucking up and participating in the balancing the budget.
>> yes, ma'am.
and the departments have been very responsive and we have -- we have really appreciated their willingness to step up and to -- to -- to --
>> in essence, I guess, asking
>> [indiscernible] there has been an air of cooperation apparently on some of these things.
i guess in essence it's basically I guess a freeze I guess to some degree.
with -- with of course the elected officials go ahead and do not take a salary increase, rank and file do not take an increase, basically we just -- probably have a better chance to -- to function properly I think during this crisis as far as our economy is concerned.
with all of this in place, the report that you have given us, especially on the compensation end, which is -- which is -- takes a big chunk to cover, as far as the budget is concerned, is this basically understand we are trying to make ends meet and pretty much agreeable to some degree it may not be any compensation as far as salary things like that have we done in the past?
>> I think everybody has been understanding of the current situation.
and what we're facing going into 2010 and again one of the things that we continue to try to stretch, it's not just 2010 but 11 also.
such as the economic downturn reserve maintaining some type of reserve in 20107 in anticipation of a tougher 2011 is really something that -- that we can continue to try to stress to the departments as we have since the beginning of this process when we kicked it off in -- in January.
so the realization if we are proactive now in dealing with the issues that we anticipate facing in 2011, then it makes it much easier in 2011 I think everyone has heard that message I think everyone has -- has agreed that we have a tough next couple of years ahead of us, they have been very willing to --
>> when will the next revenue estimate, when will it be available?
do we know?
>> it's late -- late July.
like the third week in July.
>> this discussion has led me to move approval of 9 c which is for us to ask elected and appointed officials to impose a hiring freeze of non-essential positions.
>> second.
>> second.
>> immediately.
non-essential means basically you can do without the position and still meet your mandatory and discretion duties and responsibilities in Travis County.
>> yes, sir.
>> and your memo basically sets forth the reasons why, we are looking towards a 2011 and maybe a whole lot tougher than 2010, this would appear to be a reason and appropriate proactive step at this time.
any discussion of the motion.
>> no.
>> judge, we have a -- we have a press release that's available if you would like to distribute that to the members of the court.
for approval as well.
>> I would do it.
>>
>> [indiscernible] vice-president seen it yet.
says basically what we just talked about.
>> yes.
>> all in favor?
that passes by unanimous vote.
look at it, make any changes that you deem necessary we will release that so there won't be any misunderstanding as to the reasons why.
that leaves b department budget hearings and markup schedule.
>> thank you, judge.
you have a budget hearing schedule, Wednesday the 12th through the 21st then a markup schedule that is scheduled for Wednesday, Thursday, Friday.
sent 9th, 10, 11.
we bring that to you for discussion purposes realizing that we do not anticipate not wanting to speak for susan, but we do not anticipate that the revenue picture will change between now and the -- the fifth revenue estimate and so we bring this to your attention for discussion purposes as to what -- whatever the pleasure of the court might be with regard to the -- both schedules.
>> you know how much I enjoy and appreciate the opportunity to chat with other departments.
in the past we have always anticipated additional revenue.
everything I'm hearing now indicates just the opposite.
>> exactly.
>> so there's a big question about why would we schedule a lot of markup sessions when in fact there's no money to mark up.
>> no money.
>> why don't we take a minute, a week, rather, to think about this and maybe put together an appropriate sort of written policy or letter that captures our position so we can look at specific wording next week.
>> well, judge, the thing about it is in order to generate new revenue, we would have to keep increasing the tax rate.
i'm not comfortable doing at all.
not from the stories that I have heard from people in the community.
people who are working.
sometimes both people in the household are working.
they still can't make it.
they're going to have to probably make a lot of arrangements with nelda about paying, you know, their taxes and not in cash on installment plans.
and I'm not comfortable going through that process because I think we also give people our departments maybe some expectations that there maybe some additional money and that will -- you know, I would rather not go through that exercise.
i really want to think about our taxpayers.
their situation is tougher than ours.
>> if we must have a discussion, we have Thursdays and Tuesdays.
i would rather rely on that than schedule markup sessions.
last year I think we took four case, right.
>> three days for markup, let's see last year five days for budget hearings.
>> also what really needs to be echoed in addition to what's already been echoed from the dais this morning is that those particular departments that for some reason during budget hearings have been bombarded by -- by revenue requests to -- to provide a particular service, I'm just wondering how have they postured themselves, I'm saying the department, how have they postured themselves to deal with a no money situation.
of course some of these folks are still probably asking for -- for money when there's no money available.
i know their services are still needed but there's only so much money, I'm just wondering how departments are dealing with this.
because during past budget cycles, in fact we had to change the rules at one time because of the fact that last minute requests for persons that -- that were asking services through departments and through our budget process, and then the last minute.
i'm just asking how are we handling that now the requests still are going to come, but then again there has to be some message, some kind of way to let folks know that there's no money.
>> [multiple voices]
>> the departments again have been pretty understand knowledge of the situation that -- understanding of the situation that we're facing.
obviously there's the requests out there, we appreciate their concerns and bringing those requests forward.
the reality is unless something magical happens, I don't see any more revenue coming in, that's just the reality of the world that we're in right now.
>> speaking of magic and revenue, ms.
spitaro.
>> I would absolutely echo what p.b.o.
said.
we are seeing a weakening in many of our revenue sources.
still the question is what will be the appeals of litigation with the property taxes, we don't have a bead on that.
but there have been record appeals more than any other year filed with the central appraisal district.
they are starting to work through those.
i would agree with the budget office that new revenue coming in, if you needed anything significant would require a tax increase.
that's where the money would come from.
not sources that we have internally.
we just started getting money on the third party collectors for fines and fees.
we have not gotten anything much until now.
but as leroy mentioned, those moneys go directly into road and bridge.
i mean that's short.
so if that money starts coming in, I'm just guessing that you will want that to stay and -- in road and bridge and not transfer that into the general fund with the shortage.
and one of the things that's just killed us is the low interest revenue.
that serves as the same thing.
when the interest revenue drops to what it is, we're not getting the interest revenue that we did before.
and everyone is in that same situation.
one comment which we obviously are in close contact in talking about the whole situation and I know the budget parameters that you gave p.b.o.
for the preliminary budget was the only time that you could add a position is if it was accompanied by revenue.
there was -- it's not my department, not a self-serving comment on my part.
there may be an extraordinary item that over the two years someone might want to zoo something really innovative that would in fact hold costs down or change systems and you might want to be in a position that a pepper or department, I really mean -- a person or department, I really mean like an extraordinary effort or reasons, might add a position if you saw, you know, a potential to really change the way we're doing business, the -- to kind of get us through the next two years.
that would certainly -- I would not suggest opening flood gates at all.
but if p.b.o.
saw something that really was extraordinary, it may be in the county's financial interest to allow them to do that, just like you would if revenue supported a new position.
obviously that's your call, but as we have been harshing out what things -- hashing out what things are happening.
Commissioner Davis what do people need to do?
think more creatively of how things will work.
some of the things that impact like our jail population, we get innovation there it makes a huge difference in terms like this
>> [indiscernible] so you might want to just consider that for what it's worth.
>> let's mull over b.
maybe come up with a draft sort of informal policy statement by Friday to share with court members and we can wordsmith it on Tuesday.
>> okay.
>> okay.
>> no problem.
>> so 9 b we will have back on next week, is that okay?
>> yes, sir.
>> all right.
now, we did indicate to many individuals that we would call up item no.
21 at 10:00.
we missed that.
but it's pretty close to it.
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Last Modified:
Tuesday, June 23, 2009 1:31 PM