Travis County Commissioners Court
Tuesday, August 3, 2010,
Item 10
10 is to consider and take appropriate action on request from the travis county health care district, d/b/a central health, for support in the district's participation in the intergovernmental transfer for drawing down federal funds in the upper payment limit and disproportionate share program. What's the real quick and simple explanation of the request?
>> we need to demonstrate to the federal government that we have intergovernmental capacity, and that capacity is defined essentially by -- mostly by property tax dollars. In other words, we send money up for the additional upo programs. We get that money back, with you we can't recycle it once those dollars come back, once they've been used as property tax dollars, we can't send them up again. So we've used pretty much the entire amount of property tax revenue and the other smaller revenues that we have on hand that comprise that intergovernmental capacity. And so we simply need to borrow property tax dollars from travis county which we will turn around within two days to you, repaying you from our reserves, which are a mixture of things that we cannot exclusively characterize as intergovernmental transfers.
>> my question, though -- i didn't -- this was going to go on consent and of course i did not want it to go on consent because i wanted to make sure that i had a good understanding on this. My question to you is how much do you have in your reserves right now, unallocated, you're a taxing jurisdiction, you tax just like travis county. And of course, how much do you have in your reserve unallocated and also allocated reserve currently?
>> we expect to end this fiscal year with an allocated reserve of 48 and a half million, a an unallocated reserve of about 48.6 million. And a capital reserve of about 18.1 million for a total of about $115 million in reserves. So again, it's not a question of having the cash capacity, it's a question of demonstrating to the federal government that there is the local will among the taxing jurisdictions to send up property tax dollars.
>> i know, but my question is why can't you produce that local will. You're a taxing entity just like travis county is, just like aisd and like the city of austin. And of course in my opinion as a taxing entity, whatever policy that is that you need to look at to make sure that you can use property tax dollars to do what you're doing to leverage federal dollars, it appears that that's what your policy should be doing.
>> the short answer is we've used all that money up this year. We have -- this year we have had a larger amount of intergovernmental transfers than we expected to have, although we did-- as we did last year we borrowed 12 million from you, and we anticipated that we might have to do that again this year. And in fact, we have made some relatively large intergovernmental transfers earlier this year, larger transfers than we've ever made before. So we have exhausted all of our property tax revenue for this year.
>> if i could step in. The calculation of the intergovernmental transfer capacity is done on an annual basis, and we have utilized on an annual basis all of the intergovernmental transfer capacity. About a third of our budget comes from funds that would not qualify as intergovernmental transfer, and therefore in our reserves, those reserves are a mixture of funds that qualify for intergovernmental and those that do not qualify for intergovernmental. So the calculation is done on an annual basis and we do maximize that.
>> i understand that. But my point is this, what can you do to ensure that you have enough money -- since disproportionate steve mcnair of money is an annual thing, and some of it is. I don't think it's just this year it's here and next year it's not. I think it's an annual thing that is basically drawing down from the federal government. And i believe i'm correct on that. I don't know if i'm incorrect, then tell me. But what type of policy have been placed within your governmental entity to ensure that you have available monies to take care of the situation without having to come to travis county to borrow it?
>> sir, we cannot do that. The only way we could do that is to raise our taxes. We are utilizing all of our tax capacity on an annual basis. We could do it, but we would have to raise our taxes.
>> well, i guess my point is my concern is the welfare of travis county in terms of it also. I know you're a hospital district. When we created it, my concern is even though you send us a two or three deal or whatever it is, my concern is it's coming from our general fund, travis county. Anything can go wrong, a catastrophe could happen in travis county. We have 30 some-odd million dollars in allocated reserve. This comes from allocated reserve, i'm assuming that's where it would come from, then we're talking about $25 million coming from that. And if that is the case, then travis county is left -- anything can happen within the federal government doesn't have to release that money in a timely manner. I don't know.
>> sir, we would not be waiting for the federal government to send funds back to us to repay the loan. We're proposing to repay the loan within two days.
>> i know that. That's what you're saying. That's what you're saying. My whole point is there any way you can swap any available money that you have within your -- that you can get your hands on that you can maybe make an equal swap? My concern is travis county. And of course you are a taxing entity, you have your own board, have your own people that run the hospital district. I'm not knocking that. I'm just saying that i'm trying to make sure that we protect travis county's general funds and the integrity of our allocated reserve as much as possible and especially lend to go other taxing jurisdictions. That's kind of not the way i envision this thing to happen.
>> from an historic perspective, prior to the health care district's existence, all of these sorts of federal funds were drawn down by the city of austin and travis county. We created the health care district in order to core don off taxing capacity for that purpose, but we didn't core don off very much taxing capacity, so they're basically borrowing some taxing capacity from us to meet the specific category of intergovernmental transfer capacity because they have a very low tax rate in comparison to other health care districts and counties of like size.
>> and may i try this? We do not now have an intergovernmental transfer scheduled to be made to the federal government. We expect to make one perhaps by the end of this month. We will essentially be giving back to you the same $12 million that you give to us, but we'll be giving it back to you as other dollars rather than as property tax dollars.
>> it has to go through --
>> 25 million.
>> 25 million.
>> [overlapping speakers]
>> and am i correct in my reading of the back backup that it's a question of the category that the money is in currently, then it must go through this process to become a category of money that can come back to us. It's actually in the nature of how money is fungible and it sounds hinky, but it's just --
>> almost procedural.
>> right.
>> in terms of how we try to categorize funds and make sure that we demonstrated that the appropriate funds are available for this program.
>> so what you're telling me today is that in order for you to bypass the county in the future, where the county does not have to make a loan to you, is that you will have to increase your tax rate to do that? Is that what you're telling me today?
>> yes. We do not have sufficient tax funds available to fund this program as it currently exists.
>> three questions. So this two-day loan will enable to you do what?
>> it will enable us to demonstrate to the federal government, if we're ever asked to show how we have the intergovernmental capacity to make this loan, it will demonstrate that at the local level there were two jurisdictions whose combined tax revenues were sufficient to fund --
>> if the feds are satisfied, they will do what?
>> they will allow us to continue in the program to draw federal dollars down for us to instill those dollars in the local --
>> this would put you in a better position to draw down federal money.
>> that's correct.
>> what do you do if we don't approve this item?
>> we'll lose the ability to send those -- to get that federal matching.
>> last year we loaned you $12 million for two days. You paid us back.
>> yes, sir.
>> $25 million isn't enough money to fight about, right? So if we approve this today, whenever you get the $25 million, two or three days after that we'll have the money back?
>> yes, sir.
>> mr. Reeferseed, enlighten us.
>> thank you. It's ronnie reeferseed, like you said. My question about those intergovernmental transfers, they seem sort of informal in who decides the procedural details about cost and fees, if there are. Involved in these intergovernmental transfers.
>> these are federal and state programs. The procedures are developed by the state and the federal government.
>> for these swaps that have to happen periodically?
>> these are not swaps, they're characterization of funds to the appropriate categories so that we can draw down the federal match, but these are guidelines which are provided by the federal program in order to draw down these funds.
>> transfers.
>> but there are no transfer charges, there are no private entities, bankers.
>> none whatsoever.
>> stockbrokers or anybody involved.
>> none whatsoever.
>> there's no churning of fees.
>> this is solely for the provision of federal matching funds for the delivery of health care to people who do not have the ability to pay.
>> well, thanks.
>> commissioner davis?
>> thank you, judge. So have you done this every year consistently? Every year you haven't missed a year since you've been in existence? What happened in the years that you didn't do it?
>> we did it in the first year of the operation. I think the next two years, what we had available to draw down, what was available to draw down from the program we had sufficient capacity to draw down. What's happened in the last couple of years is the amount available to draw down has grown, which requires us to transfer more funds to draw down those additional funds. So the program has grown over time.
>> you had the ability to do it in other years.
>> we had sufficient taxing capacity to do it in prior years. We do not any longer. Because the program itself has grown.
>> to help answer that question, they have the ability to do it in past years, but the amount that's available has grown so much that -- it's not a case of you just have less money than you had before to do it, it's combined with the fact that there's so much more available. You wouldn't have been able to do those past years.
>> there's more federal money available for indigent health care and health care for individuals who are median income, but can't find a general practitioner to handle their medical needs. That's a wonderful thing.
>> and i want to make sure the folks understand i don't knock the intent and the use of the money. I think it's very well needed. My problem is with the procedural type of situation that especially having to come and get money from the county, travis county, having to get money from travis county, which may leave us on the shortened if we have a catastrophe here. That's my concern. The intent of the money, who it's to serve, i think is well, well put and well, well used. I embrace it, but it's the procedural thing that i'm having to wrestle with, especially when you have to come to the county. And of course if we have a crisis situation, then what are we going to do? Those are just some of my concerns.
>> move approval of the request.
>> second.
>> any more discussion of the motion? All in favor? Show a unanimous court, including commissioner davis.
>> just wanted to let you know i have a real concern about it.
>> thank y'all very much. See you two days -- see you three days after receipt of the money.
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Last Modified:
Tuesday, August 3, 2010, 2010 12:30 PM
