Travis County Commissioners Court

June 12, 2012 - Item 7
Agenda

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>> Seven is to receive update regarding fiscal year 2013 preliminary budget development.

>> We're in the process of pulling up the powerpoint, and you should have hard copies of that before you, but let me go ahead and kick that off.
We'd like to give you an update today on where we're at in terms of the 2013 preliminary budget development process.

>> And media needs to give you a bit more volume.

>> Do they?

>> That's if --

>> How about this?
Is that working?

>> Media, can we increase the volume on the microphone she's using?

>> How's that?
Is that a little bit louder?
There we go.
Okay.

>> Thanks.

>> Okay.
So moving on to the first slide, it's actually slide no.
2, we just wanted to recap what the budget guidelines were that we've been working under.
The court actually approved those on February the 14th, valentine's day, 2012.
And so basically the major elements of those guidelines were to come forward with a preliminary budget in July, with -- that provides a tax rate at or near the effective tax rate, just in terms of direction to the departments that then go off and work on putting together their target budgets.
They were not asked this year to put together potential budget reductions.
I believe the county as well as the city and other entities have gone through that exercise over recent years, and many of those options are still out there, if needed, but basically the way we're proceeding and what we're seeing so far is that will not be an avenue that we need to take.
The compensation, of course most of the county's budget is comprised of personnel costs, and so the compensation -- various compensation line items that will be in the preliminary budget will include the annualized cost of any actions that were taken in the current year, and that is really primarily directed at the impact of the market salary survey that was implemented.
And then departments were asked to live within the target budgets that were set for them as part of the budget development process, and that would incorporate both maintenance of current effort, as we talked about that here at the county, and trying to absorb any new needs, but of course we'll actually be looking at new budget requests as well.
Then moving on to slide no.
3, just some more guidelines that we're following in terms of developing the budget, any requests for funding from noncounty entities, the county department that is in process of kind of filtering through those requests is in charge of prioritizing those, for example, health & human services.
They see a lot of requests from outside entities.
As always, I understand this is a consistent county practice, and it's a good one, departments are encouraged to identify options for increasing their non-property tax revenue.
We are largely a property tax revenue-driven entity, and then as well, any pilot programs that they might have piloted currently or thinking about piloting in the future, or revenue-supported programs, to take an look at those carefully, see how they're doing, and really just carefully evaluate those each year.
And then efficiency across the county operations should continue to be sought and improvements made.
Moving on to the next slide, we wanted to kind of give and you feel here for how many requests -- budget requests we're actually getting comparing this year to last year.
We've laid it out here by the general fund, by other funds and by capital requests, and you can see the level is fairly significant.
We did kind of an inventory of just the number of requests that we're getting for 2013, about a little over 430 compared to 320 last year, and those are our statistics as of June the 5th.

>> Do we know why the capital requests are so much higher than last year?
-- or this year?

>> I can speak a little bit about the request numbers.
If you look at that slide, and let me just apologize, we're having technical difficulties.
I thought I had saved it on to the flash drive and it's not there, so jeremy is trying to connect on to our m drive.
We actually had more requests this year.
As you can tell, we now have approximately over 430 requests.
Last year we had over 320 requests.
Those are pure requests, as you recall last year, departments were expected to turn in reduction proposals.
The other thing we had last year that's different than this year is we had a bond election.
So although I cannot say 100% certainty, but I have a feeling that the answer to part of your question on the capital side is related to the fact that tnr had requests turned in on the bond rating side -- or excuse me, the bond election side rather than the budget process.

>> Since I stopped you, the departments have indicated that they will be able to prioritize requests from noncounty entities?

>> The budget guidelines directed the Commissioners court approved on February 14, directed departments -- the sponsoring departments to commit those requests and part of that process is aimed to do just that, to prioritize.
I can't speak for whether all departments followed that protocol.

>> But we think -- we think that -- well, nobody has pushed back and said, I'm really not in a position to do this?
As far as we know they have tried to cooperate?

>> They've been submitted.
I don't know if they are in prioritized order.
In my understanding, on at least one department is that they are not.

>> Because I guess that's pretty important.
What it means f they don't, then we have to have a hearing and do that ourselves.

>>

>> [inaudible] external requests were -- I think it was -- the way they stated, they were prioritized in alphabetical order.
So they were not prioritized.

>> [laughter]

>> So they're struggling a little bit.

>> Yeah.
So I'm still working on that item.

>> And that would be where the majority were the external requests, I would think -- of the external requests come from.

>> Yes.

>> What it means is the Commissioners court needs to conduct work session hearings and do that ourselves if the departments don't do it, right?

>> And last year I believe that we had for our block of time, that we kind of dedicated in budget hearings before the court for all the external people.
We'll be coming up with a little more criteria, I think, but that's kind of how you handled it last year and it seemed to work.

>> And ms. Flemming last year coordinated with all the external requesters to come in and they provided a one-page update on their budget request and then she had them scheduled each for like four minutes or five minutes, to come in, let you know about their budget requests and answer any questions you had.

>> Finally, are we talking about 10 to 12 or are we talking about substantially more than that?

>> I think it's about a dozen, different agencies.
Some of them have more than one request.

>> And then speaking -- speaking of budget hearings, we're actually going to -- jessica is going to run through on the next couple of slides some potential topics that we might want to hold budget hearings related to.

>> And let me just say that I prioritized these in alphabetical order.

>> [laughter] these are actually based on submissions and not necessarily on the department's prioritizations.
I just wanted to give and you feel for some of the things that we're seeing currently.
The analysts are working through these write-ups and we just started meaning on June 8 with departments, and those meetings will go through the end of the month.
So recommendations from pbo for the preliminary budget are anywhere but finalized.
As you can see, and I apologize again for the powerpoint not being up, there is requesting out there for additional staffing to support the court system, external requests for funding that we just discussed, mental health funding, new emergency service stations, new voting system, a variety of space issues such as the current critical needs that we have, as well as the future crime lab and planning for a new medical examiner's facility.
The on the next slide, we have requests from Travis County sheriff's office for staffing, some is central warrants, dispatch, inmate, dwi staffing.
We also have transportation natural resources projects and road and bridge fund that is outstanding, a variety of information technology requests including end of life for networks, unified communication three, server, storage, tape library, and then finalized there is wildlife and firefighter aircraft which is a $2.5 million request.
This is just a sample.
There is obvious with 420 requests, a great deal of need that we're considering that we're working through and limited resources.
The next slide is just to give you a high-level briefing on where we're at regarding compensation and benefits.
We were able to recommend funding in the preliminary budget for the market salary adjustments, the annualized portion of that.
As you recall, those were affective on April 1, 2012, so that's a half a year in fy '12 and we will require a foul year funding fy 13 and forward.
The Commissioners court reserved funds similar to 3.5, and similar to audit and purchasing office and I want to comment on the elected officials salaries.
We're required to advertise the salaries if they are higher than current salary amounts, and we will be bringing that forward to you actually on June 26 for consideration.
We will not require action until, I believe the calendar is now calling for a July 10, at the latest.
It could be on July 3.

>> Oh.
You worked miracles.
Thank you!

>> The powerpoint is now up.
And on the pace officer pay scale, hmrd is currently in discussions with the associations and reviewing proposals.
We had set aside 3.41 million based on the previous court action.
The request from the association, it says here could be above.
We know that they are above the reserved amounts, and hrmd will be presenting those scenarios in late June.
Employee -- oops, employee and retiree health care, 3.55 million is estimated for increase in costs.
This is only the second increase in the last six years.
There are recommendations on minor plan design changes to limit cost increases to the county, to the employees and retirees.
There is a public hearing that leslie will highlight later, but it is just to say now on Wednesday as 4:30, I believe.
The retirement system, we have an additional 1.5 million needed to maintain the required funding and that is without a retiree cost of living.
We have received the first revenue estimate, and the second revenue estimate is actually due out, I believe, June 18.
I wrote it down.
We have a beginning fund balance estimated by the county auditor's office of 107 million, property tax revenue is estimated at 391 million.
That reflects the new construction value that has a large portion of it being samsung.
As you know, we rebate back -- is that the right term?
-- we rebate back to, 80% of that back.
We do have other revenue estimated at -- the county auditor has estimated 73.5 million and then the total is 571.5 million in the general fund based on the guidelines and the sumses laid out.

>> How does that compare to this year?

>> This year was 400 --

>> This year the adopted budget is 474, 961, 871.

>> 96, $97 million more?

>> Budget, I'm sorry --

>> 541.

>> 541-23-2832.
So --

>> 30 million more?

>> Uh-huh.

>> Correct.

>> About 30.

>> Increase.
, which results in less than -- I think we calculated what the impact --

>> It's approximately 21, $22, somewhere in there.

>> $21 on the average homestead and we did get some information geographically from the del valle school district.
The taxable value overall in Travis County is about $215,000 for the average homestead.
The del valle is more in the $80,000 range, and the manor school district is in the $110,000 range.
And I will send you the actuals.
I did not pull the we were and we do -- and we do know that it -- the western and we know it's approximately 2 times or 1.8 times over the average homestead for the entire county.

>> May I look to see that one?

>> It was about 110,000.

>> About 110?

>> I'll send you those actuals.

>> That would be good to see.

>> -- homestead numbers.

>> 571.5, 3% over effective?

>> Yes.

>> And what is effective?

>> The effective tax rate.
I wrote that down.

>> I've got it right here.
The effective tax rate is 48.17 and the proposed, which would be 3% above the effective tax rate is about 49.61.

>> And what would be our -- what would be our general fund revenue estimate at effective?

>> At the effective it reduces the total revenue about $14 million, we've estimated.

>> So it takes us to --

>> Takes us to --

>> 557?

>> 571 less 14 would be 557, approximately.

>> Do you have a question?
Okay.

>> Okay.
The next slide is just a snapshot to let you know that we are -- bless you -- going to produce a preliminary budget.
Currently we're working on that.
We have the new financial system came live on June 4 and we are working very diligently with the b-15 to ensure we're able to do all the things we were able to do previously, and we will be producing an fy '13 preliminary budget that's entered into the legacy system.
However, we're working very, very closely with chris brew southward and he'll -- brusard, and he'll upload that and we'll test to we ensure the preliminary budget to the adopted will have a parallel system and be able to ensure we have an adopted budget and sapd system on October 1.

>> Hold on one second.

>> Sure.

>> Mr. Reeferseed, are you part of the planning and budget team now?

>> [laughter]

>> I'm dreaming.
Anyway, I just have a little question about her great bunch of information out there, but one thing little -- this is about a preliminary budget, right?
My question was, the thing that came up, that sparked my ears, you mentioned briefly an end of life program?
Or was I just managing that.

>> For it.
For computer equipment.

>> End of life of the computer equipment.

>> Technology, not --

>> Okay.
I was just checking, you know?
Thanks.

>> [laughter]

>> Thank you, mr. Reeferseed, we needed that.

>> [laughter]

>> Onward to the budget schedule.
These are our last two slides.
So right now, June, we are in the heat of departmental meetings.
Those -- we're having a number of those every day, so we're talking to the departments about what they want to see in their budgets, and trying to come through what we think we can afford.
In July we will finalize and balance the preliminary budget recommendations against the third revenue estimate, and then we would file the 2013 preliminary budget on July the 23rd.
August, we just previously talked about Commissioners court may wish to hold some budget hearings during the month of August, and then mark-up is scheduled to occur on September 5, 6 and 7th.
That would then culminate in adoption of the budget on September the 25th.
Then we've listed just kind of some other key dates here on the final slide.
Jessica mentioned that on June the 13th there is an employee public hearing at 4:30 p.m.
Then she also touched upon the proposed elected official salaries, and that process would entail advertising in the chronicle and then holding a public hearing on those proposed salaries sometime in July, and we're in the process of working to get that scheduled.
I believe she mentioned a presentation on that in late June, June the 26th.
Then in -- on September the 6th we would actually also advertise in the chronicle a public hearing on the proposed fy 13 Travis County budget, and then that public hearing would actually be held on September the 25th, and then the rest of the dates here are related to the taxation requirement.
September 10 we would advertise in the states man for a notice of public hearings on the proposed tax increase, and those would occur -- there are two that are actually required on September the 18th and September the 21st.
Then we're also required to produce ads in the states man, or the daily newspaper.
Those would be scheduled to run on September the 19th and the 22nd with the tax rate scheduled for adoption on the 25th.
So those are the key dates.
That is the schedule, and --

>> Scheduling aspects, how can we -- well, let me say what happened in the past and it continues to happen every year, we deal with the budget, and that is that we have -- during the budget hearing process, we have persons that want to do business with the county, are doing business with the county.
They have come in and said, well, I had no -- I didn't know that it was scheduled at this time, and they have -- and there have been some of the nonprofits and other persons that may want to do business with the county.
I didn't have any idea of the budget hearing for this particular subject matter, that I would like to address the Commissioners court with.
I'm just trying to figure out some kind of way, if possible, that we can reduce those type of situations.
I've heard it a lot, and I'm kind of -- I'm still concerned about it, and I know you are too, but what can we do collectively, I think, to offset those type of concerns that have been echoed by persons that participate in doing business with Travis County during the budget cycle?

>> Well, and I may ask leroy and jessica to address this as to what we've done in the past, but a couple of avenues.
The departments, of course, are probably aware of entities like that that have special interests that can certainly pass that information along by word-of-mouth, but we can post the -- all of the dates on the web site, and you can typically use your public tv channel to kind of run those -- run those ads as well.

>> As far as addressing what's happened in the past, I think we did -- west a problem a few years ago where that was occurring on multiple occasions and one way that we tried to address that is to fold it really into the budget guidelines -- excuse me, the budget manual and the guidelines and really reach out, have an educative process with the departments and the departments with those outside agencies to encourage them to bring those proposals in the March time frame and also I'd say that it's important to also be consistent, and I think we've attempted to do that over the last two or three years, to provide them a process that they are familiar with and doesn't change on them.
So I think we've seen less of that in the last couple of years, the ones that come at the last minute outside the process.
That's not to say that there aren't occasions where that happens and where they need to be informed of the process and encouraged to go through that process.
But we will work diligently with the department heads to reach out to the external agencies and then if they contact us or if you hear of agencies that contact you, feel free to direct them to the planning and budget office and we'll get them to the appropriate person to talk to.

>> Okay.
Thank you.

>> And I think that's it.

>> Are there questions, comments?

>> Questions, comments?

>> Just to put them on the calendar, the mark-up is -- those are usually in the morning, 9:00, until we finish?
That first day and probably the Thursday, but Friday is usually kind of half-day.

>> That's correct.

>> Set aside, right?

>> That's correct.
I believe yolanda from our office has provided each of your offices the schedule and has tried to make sure that you all have that information and that you're available.
The other thing that we have in September that's a little bit different is we do have that one Friday public hearing and we will continue to remind your offices that that's there.
But yes, Wednesday, Thursday, Friday, September 5, 6 and 7 is the mark-up, three hours in the morning, 9:00 to noon, and three hours in the afternoon from 2:00 to 5:00.
However, the court in the past I believe has done a half-day on Fridays.
And I think in the last few years we haven't used all three days.
Now, as far as public -- excuse me, budget hearings that happen in August with departments, what the calendar calls for is just that the Commissioners court may hold budget hearings between August 8 and August 17, and I did look at the web site today.
Last year for the fy '12 budget process we had three days that were scheduled, Wednesday, August 10, 11 and then the 15th for afternoon sessions.
A year before that we only had one day scheduled and the year before that we had no days scheduled.
Part of that was we had reduction proposals in front of us and so there really wasn't an opportunity to talk about the budget requests as much as, you know, departments were ensuring that their reduction proposals were considered appropriately and not taken,.

>> [laughter] so having said that I think that there will be a demand for some limited budget hearings this year, and we'll seek direction from the court as to how you would like to proceed on that.

>> I do have a previous commitment on the 17th.

>> On the 17th, okay.

>> The -- are these dates tentative?

>> Yes, sir.

>> The important dates?

>> The budget hearings --

>> The important dates, that whole list of dates there?

>> The advertisement dates that are statutorily required are not as tentative as the dates related to the budget hearings.

>> But if we want to change these, the time to do so is now?

>> The sooner the better.

>> I mean, September 6 is a long way off.

>> Uh-huh.

>> Okay.
Let's look at these.
And do we need to approve these dates at some point?

>> They are in the budget manual.
We don't regularly request approval of the dates, especially if you would like the flexibility to look at these up front.
The one time I think budget mark-up has changed in the past, we did have a Commissioner at one point that had a schedule that we changed it, I believe, for a couple years, but generally these -- the budget mark-up dates have stayed pretty much where they're at.
The important thing about the budget mark-up dates that I'm aware of is the tax rate needs to be set, generally, by that second day, by noon.

>> And that's

>> [inaudible] the tax rate, just the whole process is very prescriptive so we'll have to make sure there's certain days you have to advertise and you have to wait a certain amount of time.
So on and so forth.
We'll make sure those are locked down and I think they pretty much are at this point.

>> I think barbara wilson locks those down.

>> We'll continue with work with your office and make sure you have feedback like Commissioner Gomez said, on the August date.
And if we need to come back to you we will.

>> I guess I'm -- I'm questioning working with us individually versus us responding to a list of draft dates in court.

>> Okay.
Well, we can.

>> Do you see what I'm saying?
I have an issue with a couple of these dates, which is why I'm concern about it, but if we have four other members present my absence won't matter that much.

>> What we could do is post an item just on the calendar, if you wish, and have that discussion in court --

>> That's what I would do, and that would force us basically to pull our calendars and look at them.

>> Okay.

>> Plus there's -- I have no idea what I have working in September except a possible trip.
But if we are going to discuss it in court, then I'll give it a whole lot more thought than I would otherwise.
I mean, normally that's far enough off for me to think, I've got plenty of opportunities to think about it between now and, say, the next 30 days, you know?
But if I know I need to decide in the next seven, then I'll do it.

>> And we can have that discussion in July.
We don't need to have that discussion in the next week or two.
I think it's real important just to -- the dates that are important and that are more statutorily driven are the September dates, than anything else, as you approach the adoption of the budget.

>> Yeah.
Okay.
Anything else on this item?
So as far as you know, there are really no significant developments that we ought to anticipate.
It's a fairly standard, routine budget cycle?

>> I think that depends on who you ask, but --

>> [laughter] from my perspective it's standard.

>> Are you suggesting that we ask the taxpayers, ms.--

>> Or the individual departments that have requests --

>> Many, many requests.

>> A whole bunch of requests.

>> Court members, anything further?
Thank you all very much.
We look forward to the opportunity to have a follow-up discussion regarding the preliminary budget.
I move we recess until 1:30.

>> Second.

>> All in favor.
That passes by a unanimous vote.

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