August 30, 2001
TO: Commissioners
FROM: Fred Henneke
SUBJECT: Budget Reconciliation
Before we begin the reconciliation, it is important that we all start from the same place. I
am no wizard with numbers, which is probably why I became an attorney instead of an
accountant or banker. So, I tend to look at things fairly simply. To amve at the deficit, I
took the latest Budget Summary and added the two revenue totals together for a total
revenue figure of $16, 318,494. I subtracted that number from the expenditure figure of
$16,744,249 to arrive an initial shortfall of $425,755.
In yesterday's workshop, the following expenditure requests were received:
1.	District Clerk merit increases	$2250
2.	District Clerk accountant position reclassification	2270
3.	Road & Bridge Admin Asst reclassification	2508
4.	Asst Extension Agent reclassification	2508
5.	Animal Control Kennel Worker reclassification	3064
5.	Road & Bridge Crew Salary correction	12,978
6.	Four additional patrol deputies	99,000
7.	Additional criminal investigator	27,320
Sub-Total
W/COLA
W/Benefits (14.5%)
8. Two scanners for Sheriff s Departrnent
9. Admonishments Video
10. Extension Agents Travel
11. Non-Dept Contingency increase
12. Non-Dept Capital Outlay (Mainframe memory)
13. Bond Election expenses
14. JP Supplement Increase
$151898
155695
178271
32,000
700
10,000
15,000
4000
11,000
2400
TOTAL: $253,371
Against that additional expenditure figure we apply the following credits derived from
the workshop:
1. Extra Maintenance salary $21,972
2. Duplicate CASA allocation 3000
3. Tower leases 125,000
4. Schreiner Trust road contribution 25,000
5. Union Church contribution 10,000
TOTAL: $184,972
If we subtract the credits from the additional expenses, the additional shortfall is $68,399
for a total deficit of $494,154. Of this figure, a total of $440,663 can be attributed to
increases in personnel costs (COLA step increases/elected officials/department head
increases).
Gentlemen, I have studied this from every which way and you can't get there - i.e., a
balanced budget -from here unless you essentially eliminate all compensation increases
across the board. There aze only two categories of expenditures in this budget that lend
themselves to substantial reduction -compensation increases and capital outlays. In order
to balance the budget and preserve the COLA, I first approached the problem from the
questionable point of view that all capital outlays except the Sheriff s Department and
Road and Bridge operations are expendable. If you delete all capital outlays except the
Sheriff s Department and R&B operations (and further delete the foreman's truck from
R&B operations), you receive a credit of $146,369. If you delete all conferences, there is
a further savings of $42,380. By eliminating all elected officials increases, including the
COLA, you save approximately $62,400; the same exercise for department heads gains
approximately $10,000. You can pick up $50,000 by deleting all funds for the Annex
renovation or Courthouse improvements and $32,000 by deleting the scanners requested
by the Sheriff. Removing funds for pazks, except the LCRA grant, gains $5000. By not
allocating funds for a bond election in the next fiscal yeaz, there is an $11,000 credit. If
we do away with all County sponsored programs (including those transferred to the
juvenile probation budget) except the trapper, emergency management, the task force and
KCAD, the gain is $47,000. Should we make all of these cuts. the total we save is
$395,149, which is still some $100,000 short of where we need to be to balance. To
get from this point to a balanced budget would require cutting operational funds to such
an extent that the adopted budget would be seriously deficient.
On the other hand, if we do away with all compensation adjustments, balancing the
budget is relatively easy. To the $440,663 saved from eliminating compensation
adjustments, you add $32,000 by removing the scanners requested by the Sheriff and
$25,000 by removing funds for further finish-out of the Courthouse Annex for a total of
$497,663. Or you could leave in the funds for the Annex and eliminate the new truck for
the Maintenance department and the printer for the County Attorney for a total reduction
of $494,353. However, such a budget totally negates the work we put in last yeaz through
the Nash study and elevates hazdwaze over personnel when personnel assets aze the most
important component of the services we provide to the Kerr County citizenry.
It is painfully obvious to me that a tax increase, both to cover the amortization of the
radio project and to provide absolutely essential funds for basic operations, is a bullet we
cannot in good conscience dodge. I propose that we consider a $0.0126 tax increase,
which would raise an additional $265,991. Those dollars would be used as follows:
A. $160,528 would be used to amortize the debt for the radio project.
B. The remainder would be used to fund the budget we discussed on Wednesday,
including the additional items requested at that meeting, SAVE AND EXCEPT
THE FOLLOWING ADJUSTMENTS OR DELETIONS:
(1) Elected officials salary increases this year would be limited to 33% of the
amount necessary to achieve pazity with our peers PLUS no official (i.e.,
me) could receive an increase that exceeded 10% of his or her current
compensation as defined in Commissioner Griffin's memo -total credit
against the deficit would be some $24,000.00
(2) Department head salary increases would be limited to 2.5% and they
would still get the COLA -total credit of approximately $5000.
(3) All conference budgets would be reduced 50% -total savings of $21,300.
(4) The foreman's truck for R&B would be cut -savings of $26,000
(5) The two scanners for the Sheriff s Department would be eliminated -
credit of $32,000.
(6) Two of the requested four new deputies would not be funded -savings of
$48,500.
(7) The increase in the JP's supplement for mental patient heazings would be
eliminated - $2400 savings.
(8) The new truck for the Maintenance department would be eliminated -
$18,100.
(9) All "Miscellaneous" budget requests would be deleted - $3533 credit.
(10) The funds for part-time supplemental Bailiffs would be deleted - $9000
savings.
(11) The DPS radaz units would not be funded - $8250 credit.
(12) Funds for additional finish-out of the Annex basement would be deferred
- $25,000 credit.
(13) Park funds would be deleted for next year - $5000 savings.
The total credits outlined above against the $494,154 deficit equal $228,163, which
leaves a remaining deficit (exclusive of radio project) of $105,463. When you combine
that with the $160,528 for amortizing the radio project, the total shortfall is $265,991,
which equates to 1.26 cents of additional tax. Painful but necessary.
Kerr County has enjoyed the same tax rate for eight yeazs. This Court and its
predecessors have been faithful stewards of the public's scazce dollars. However, we
have wrung as much blood as we are going to get out of this turnip. We as the
Commissioners Court have a constitutional duty to fund County government, which
includes the salaries of not just employees but also elected officials. That is why there is a
salary grievance committee procedure for elected officials. Hopefully, we will never find
ourselves embroiled in that process because I cannot conceive of an uglier, more divisive
situation.
Part of the reason we find ourselves in this predicament is because previous Courts have
deferred essential spending and financed long-term, capital projects from O&M funds
instead of levying specific, "sunsetted" taxes for those projects. It falls to us to address
this situation. I find little fat or fluff in this budget we are debating; some of the
reductions I have suggested will hurt. For the most part, all of the requests aze easily
justified; we have to determine which are essential.
Please call or come see me if you have any questions or suggestions. I sincerely
appreciate and thank each of you for the way in which you, collectively and individually,
have handled this difficult budget process.
Cc: Elected Officials and Department Heads