Travis County Commissioners Court
Tuesday, June 1, 2010,
Item 8
8. Receive update from the planning and budget office on fiscal year 2011 budget. Let us indicate that we will call item 10 b up next, then item 16 up. 10 b next and then 16 and now we are on item 8. Good morning, judge, commissioners. We are here to give you an overview of -- of the budget for the fy '11 budget year. The -- the -- as it stands today based on the first revenue estimate. Leroy will kind of walk through a little bit of the information and i'll jump in where needed.
>> okay.
>> you do have the backup rodney's memo dated today that kind of summarizes where we are. County auditor last tuesday gave you the first revenue estimate based upon the guidelines that you established. In february for the fy '11 budget. If those guidelines you authorized us to go 3% above the effective m and o but no higher than 3% above the effective m and o plus debt. As you can see on that memo, the total revenue generated from that first revenue estimate at this point is 483,182,239. The significant increase in the first revenue estimate being the beginning fund balance. I would just reiterate what we have said in the past, that fund balance normally is one time funds. The increase has been the combination of three factors, number one, we recommended to the court that you establish some emergency reserves in fy '10 and to offset any type of recession that we would have in fy '11 and potentially in fq 2012. I think we're all aware that we have challenges in fy '11, we are not out of the woods yet. We have been extremely conservative in recommending to the court that you use one-time money for one-time expenses and ongoing money for ongoing expenses. The increase in that fund balance has been the result of not only those reserves, but that the revenue actually come in higher than what was anticipated. I think we were very fortunate to have the county attorney, tax assessor collector's office and auditor's office working very hard to bring those tax revenues in. We still have question marks about fy 12. We have attempted to build those reserves and they go from year to year through the -- through the means of the fund balance to give us the cushion in the event that we will need them in fy 11 and further. The other revenue the drop there you see of about $3 million was from investment earnings. The transaction that you took, approved just before this agenda item reflects that interest is at an all-time low. Not only can we refinance our outstanding debt, but we on our investments we essentially suffer from the lack of investment earnings. I might say that the summary on page 26 the general fund request, the 25.6 million does represent constraint by -- by -- by the departments in travis county. We have been very fortunate that awful the departments have cooperated in limiting their request to the most critical maintenance requests. We have had capital requests of 65.6 million which is greater than what we have in the debt model going into fy '11. We are working to size that -- those capital requests.
>> just by way of contrast, last year's total requests submitted for the fy 2010 budget was a 259 requests a little over 163 f.t.e. Requests. This year we had 363 requests and 169 f.t.e. Requests. What we are working very hard and my staff has -- is probably tired of hearing me say it, but i've been really pounding the table hard trying to work to -- to get some type of compensation inside the preliminary budget this year. And what we're looking at roughly is -- is about 2 and a half percent of compensation. And that is with the intent that we would try to use some of that compensation increase to offset any -- any employee insurance increases that the court might approve when -- when the -- when that item comes to you. With all of that and -- i might also say that we have also got a lot of the maintenance of current effort requests inside the preliminary budget, albeit not to the extent of the total requests, but we have taken care of the most critical needs as leroy mentioned. We are still about a million dollars short of being able to balance as it sits today. We are hopeful that we will -- that we will be successful in balancing that budget. On the -- on the special revenue funds, just to highlight just because it's -- i think that it's good to note that we have got some issues with the road and bridge fund that we are having to deal with and we anticipate thanks to all -- they may have some shortfall as well, but we will know more as we get a little deeper into this. I want to talk a little bit about the effective tacts tax rate. The effective tax rate as it's calculated today is 44.96 cents. And at 3% above the effective m and o plus debt, right now, we are sitting at a proposed tax rate of 46.98 cents. I want to try to give you kind of a little bit of a feel for -- for what the -- what the proposed salary increase might mean to -- to a random sample employee.
>> we picked a pay grade 11. That's at midpoint and that would be an annual salary of about 34.5. Just to give you an example, of what a two and a half percent increase would do to that salary. We have laid out on that chart on page 3 the -- the monthly salary, two pay period salary. And estimated take home and then the estimated costs, the recommended costs, that -- that the health committee has brought forward for your consideration later this month for -- for health insurance increases. We use the worst case scenario, we used -- an employee that was paying the entire health insurance costs for the family, ppo coverage. And as you can see in the -- in the left hand, that cost $432 a month. Currently, in fy '10, the recommended health insurance cost is $467. In fy '11, which means there would be a $35 per month increase, in that, with a 2.5% increase on that -- on that approximately 35,000 salary. Without the -- without the 2.5% increase, you would obviously have a $35 reduction, in other words the employees would take home $35 less a month with the two and a half percent salary increase. They would be taking home $15 more per month. And there again, this is the worst case scenario. We don't have a lot of employees that take out that ppo family. But there are some.
>>
>> [indiscernible] point. I have -- i have a concern that -- that may need to be addressed by hr. Especially during this period whereby true-ups, meaning the documentation that -- that will have to be provided, to us -- to -- to i guess safeguard either flush out the inevitable expenditures that we may be paying now and i guess the audit may reveal some of this ineligible expenditures that may be brought by the health -- health benefits. I'm trying my best to get my arm around, i know the state of texas doing the last presentation before the court, hr did reveal some alarming statistics about -- about true-ups meaning to verify and substantiate through vehicle such as documentation for every employee within example the state of texas was a prime example and -- i think it was -- i think it was houston or harris county, i can't remember which entity. In those particular true-ups, there was a significant savings -- well, elimination of expenditures, illegal expenditures that had been -- had been -- had been sent by -- by a county or the -- or the -- eligible governmental entity, that carry health insurance. My concern, though, is -- what -- what was that amount as far as the amount of expenditure owe objection the state of texas is a -- of course the state of texas is a big entity. But i think it was something narrowed down to maybe a county level. I think, i'm not sure, i can't recall whether it was the university -- not university of houston, but harris county or either houston that had true-ups established benefits of their system, we, of course, this is coming before the court, something new for us. My point is that -- that if it does reveal, that there is -- there is ineligible expenditures that -- that we, travis county, are spending, we won't know that until after the gate is closed on the issue and of course hopefully that will be done before -- before end of fiscal year and i understand that we see that we are about a million dollars short at this points. I am wondering if there are expenditures that we, travis county, have spent on health care benefits, if there was a lot of money that was spent on ineligible type of situations. So i really don't know if there is a figure out there. But if there is such a figure that exists on ineligible expenditures that we travis county have -- have had to deal with in the past, what -- what will -- what will that money of course -- end up going to the general fund. Which i think is something that we need to maybe take into consideration after the audit has been conducted and all the employees of travis county are having to produce the necessary documents to show that the benefits that -- that we -- that we have encumbered under the united health care is actually those figures. So it's just something of mine -- thought before we go through this process.
>> commissioner, i do not know what harris county or city of houston realized but we will be glad to research that for you and get it to all of the court members as to what -- as to what the effect of their audit was. The audit that h.r. Is recommending will -- will help mitigate any fy '12 health insurance increases. I think we know nationally health insurance is going up somewhere between 8 and 12% per year. We were very fortunate, we did not have a rate increase for over three years. We're sitting on a 10.66% rate increase this year, which was kind of answer kind of anticipated. We will be staying in contact, we being the health committee and hr to the effect of implementing the -- the audit.
>> okay. Laying that on the table.
>> two or three -- two or three quick questions. What's the recommendation as to the -- to the compensation for retirees?
>> we've got two and a half currently plugged in, judge.
>> and do we think there will be -- they will be impacted in pretty much the same manner that incumbent employees are regarding the recommended insurance increase?
>> i need to get back to you. I'll get back to you before the public -- employee public hearing. If you want to comment, travis, on the retiree piece of it.
>> the -- the travis county employment and budget office. The increases recommended for retirees are roughly 8% which are the same for county employees. The over 65 employees, the actual rate they pay is typically a lot lower than what an active employee pays because their mayor kirk medicare is primary.over 65 -- ] under 65's compared to active employees. The over65's would have a smaller increase more likely compared to active employees. But they are all about an 8% increase of what they are currently paying.
>> i don't understand. In other words, judge, i will wait until you finish. I have a question to ask on the same subject, especially retirees.
>> let's put together an example for retirees, get the inquiry, maybe send it to them. Do we know what the other major employers dooring in this area -- are doing in this area regarding compensation?
>> we had a conversation with the cfo for the city of austin last week. We have been told that they are trying to get 2.5% as well.
>> can we survey the city of austin, lcra, who we normally compare ourselves to, the state of texas, other major employers so we will know we have the list.
>> the employee public hearing is scheduled for when.
>> june the 16th.
>> if we have that information by then, that would be helpful.
>> those my questions, commissioner davis?
>> [one moment please for change in captioners]
>> travis county, if they're on the health plan, would be the primary payor.
>> so it's i think an 80/20 type situation in there.
>> it would depend on the depend on the plan that they would pick. So well, the coverage is for an under 65 would be the same choices that an active employee would make. So that would be bpo, -- ppo, 90 percent plan, the cpo, an 80/20. What i can do is -- why don't i -- in the process of putting together the example of retirees and how the 2.5% would impact that with the rates, i can go into some detail and walk you through some things as far as explaining the differences between the over 65 and under 65.
>> the under 65 i understand. The over 65 i don't especially if they're paying more.
>> they're paying less. They're paying significantly less because medicare is the primary payor.
>> that's at 80 percent, though, i think. It's 80/20 type situation.
>> well, medicare pays 20%.
>> medicare pays 80 and i think the county has to pay 20. Yeah, for picking up --
>> as far as the remainder of what choices one has as a retiree over 65 to have the remainder covered by a secondary policy, but each individual gets to choose.
>> and along that line also we mentioned the -- i guess you will have a comparison because i'm really concerned about not only the ppo, but of course we have the -- what is it --
>> we have the epo, which is like an hmo.
>> which is the alternative.
>> which is the highest plan and then the cpo, which is the lower of the three plans.
>> i notice the example we have here in the backup is ppo, and that's based on i don't know why ppo was used and comparing it to epo.
>> ppo is the base plan. It's the most popular plan. I think that's why it was selected.
>> it was chosen, okay, because epo -- we still have some persons that are on -- in the epo situation. And i don't really know what the numbers are, but --
>> we can get those for you.
>> it would be good to know because we do have significant numbers. I don't know what they are at this point as far as the -- as far as what employees or retiree comes up under which plan. It would be good to know that. The ppo and epo and then that other one, that one -- the one that you default. So all those things need to be ut putt on the table because somebody is going to fall into one of those scenarios.
>> sure.
>> somebody. They would all be ppo's if not.
>> and whenever the item went to court, i think it was maybe may 11th or 15th, i may be off on the date, the backup included each category and what the impact would be. We can gather that together and re-present that to you whenever we bring these back.
>> thanks.
>> one of the goals that we also have in terms of the preliminary budget is to maintain the reserves that were established as far back as 2009. If you recall, there was a fuel and utility reserve that was established. We also had an economic downturn reserve and a reserve for future grant requirements that were established as well. And our goal is to continue to try to maintain those reserves with the uncertainty of fiscal 11 going into fiscal 12. We believe that there may be a need for those reserves in fiscal '12. I think we've done a -- we being the entire county and the commissioners court has done a fantastic job of planning for the future by creating those reserves and we want to try to maintain those reserves in anticipation of fiscal '12 being a little bit tough as well. Just to give you a few dates for those of interest, we have the employee public hearing scheduled for june the 16th at five p.m. At this point we have a budget hearing scheduled for wednesday, august 11th, through friday august 20th. And then markup to be held wednesday, thursday and friday september eighth, ninth and 10th. Now, because of the tight resource constraints, pbo is recommending to the court that you might consider reduced schedule again this year as you did for fiscal '10. But we can have more conversation at a later date on that issue.
>> didn't we agree with employees to have the public hearing begin at 4:30?
>> we had talked about that. And yeah, i think -- we had 5:00 in the calendar, but i think we -- after discussing it, we decided to do it at 4:30, judge.
>> i think we did commit to try to do that. So if we can, it will help.
>> we'll do it june the 16th at 4:30.
>> about how many new exeez new employees does the budget that you're thinking about recommending contain? Approximate number of new employees, new f.t.e.'s?
>> the guidelines that you approved limited us to only new f.t.e.'s that had revenue that supported them or that the department's internally funded. And --
>> no, you're answering question number two, that is how did we arrive at it
>> [ laughter ] i have that answer. How many?
>> i'm not sure what the total is at this point.
>> i can wait for an e-mail later today or tomorrow.
>> yes, sir.
>> one other budget item that you will see next week will be the agenda item on elected officials' salaries. And --
>> we're working to put that together just based on the same assumptions that were presented today on compensation, two and a half percent for those on the non-judicial. So you will be seeing that next week and the week after for your consideration.
>> that will be two or three sentences addressing the judicial pay scale, just so we'll understand it and they will.
>> sure. And pbo has been working with barbara wilson and the county attorney's on ensuring that you have all the information you need.
>> okay. Any other questions or comments, court members? We eagerly anticipate our next discussion.
>> thank y'all. You did a great job.
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:
Tuesday, June 1, 2010 2:35 PM
