Travis County balances its preliminary 2010 budget

Travis County’s budget balancing act for FY2010 will require a three percent tax increase over the effective rate, according to the financial staff. And the county’s budget gurus warned Tuesday that FY2011 would likely be more challenging.

 

Budget Manager Leroy Nellis and Executive Manager Rodney Rhoades of Travis County’s Planning and Budget Department briefed commissioners on Tuesday on the FY2010 preliminary budget. Revenue, with the exception of current property tax and beginning fund balance, was down $9.4 million from FY2009. The total budget for this year is $900,000 less than last year and includes a five percent cut each department submitted.

 

Nellis said the county had “ongoing expenditures matched with ongoing revenue and one time expenditures matched with one-time revenue.” He said some shifting of expenditures had to be shifted from ongoing to one-time, effectively putting some departments “on notice” for FY2011. Nellis said funding pilot programs for extended periods had become an issue, with a number of one-time programs extending beyond three years.

 

Some items Nellis chose to highlight included maintaining an 11 percent unallocated reserve of $43.5 million and allocated reserves at $3.9 million. He said recent fluctuations in fuel prices rendered previous questions about a fuel reserve moot, and the county has socked away a $1million for that, which he called “prudent.” Travis County will also have an Economic Reserve of $4.9 million “in the event that the recession continues longer than we anticipated,” Nellis said.

 

Other reserves include $500,000 for future grant requirements that may be needed for grant matching funds. Another $1.6 million required reserve will be allocated to departments for retirement funds. Nellis said equity market reductions were hurting pension funds. The county will also fund $1.7 million for maintenance, down substantially from the $3.8 million allocated in 2009. Information Technology Services will get a $450,000 increase and the Travis Central Appraisal District will be boosted by $140,000. Pharmaceuticals for juvenile courts will cost the county an additional $217,000 while adjusted requirements for Health and Human Services will cost another $320,000.

 

The adopted tax rate for FY09 was .4122, and the preliminary budget is balanced at 3 percent above effective rate, which is .4254. The rollback rate, 8 percent above the effective tax rate, is .4377.  A one-cent increase in the tax rate, Nellis said, represents about $9.2 million in extra revenue. After all exemptions—including the county’s 20 percent homestead exemption, $65,000 for individuals 65 or older, and veterans exemptions—applying the proposed tax increase, on the average homestead valued at $284,000 will result in an additional $47.16 for the owner.

 

Rhoades said departmental cuts represented about $4.6 million in reductions, the largest bulk from Sheriff’s Department— about $3.2 million. A lot of those reductions are a result of a lower Average Daily Population in county jails. The higher this number is the more employees are needed to guard and administer prisoners. The ADP assumption in 2009 was 2,650 but the current budget estimates 2,450 inmates. However, Rhoades said recently the markup process will give a clearer picture as the ADP has recently been rising again. 

 

There was plenty of good news with the preliminary budget. Pct. 1 Commissioner Ron Davis asked Rhoades about the county’s bond rating. Moody’s and S&P gave Travis a AAA rating, one of only 4 counties out of 254 in the state to receive such a rating. Nellis said “it means that when you take your bonds to market you get people to buy them and you get a reduced interest rate, which saves the tax payers money.”

 

Travis County Auditor Susan Spataro said the PBO was “very wise” setting up the reserves. She said that Travis has not raised taxes to the rollback rate for a “long time” and noted that it wasn’t happening this year either. “You have really managed this budget over years to put us in the position we’re in,” she told commissioners. “Many, many governments are in an absolute disaster and crisis and this government isn’t and it’s not an accident. It isn’t that we got more money than anyone else—it really is the management of the commissioners court and the elected and appointed officials.” Pct. 2 Commissioner Sarah Eckhardt returned the compliment to the staff.