1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Budget Workshop 10 Monday, August 16, 2010 11 10:00 a.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 23 PRESENT: PAT TINLEY, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 24 WILLIAM "BILL" WILLIAMS, Commissioner Pct. 2 BRUCE OEHLER, Commissioner Pct. 4 25 ABSENT: JONATHAN LETZ, Commissioner Pct. 3 2 1 I N D E X August 16, 2010 2 PAGE 3 Review and discuss FY 2010-11 Budgets and fiscal, capital expenditure, and personnel matters related 4 thereto, including, but not limited to, cost-of-living adjustment, salary considerations, staffing levels, 5 health benefits and insurance 3 6 --- Adjourned 96 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Monday, August 16, 2010, at 10:48 a.m., a budget 2 workshop of the Kerr County Commissioners Court was held in 3 the Commissioners' Courtroom, Kerr County Courthouse, 4 Kerrville, Texas, and the following proceedings were had in 5 open court: 6 P R O C E E D I N G S 7 JUDGE TINLEY: At this time, I will convene a 8 Commissioners Court budget workshop which was posted and 9 scheduled for this date, also at 10 a.m. The agenda item -- 10 as soon as I can find it here -- is to review and discuss 11 fiscal year 2010-11 budgets and fiscal capital expenditures 12 and personnel matters related thereto, including, but not 13 limited to: Cost-of-living adjustments, salary 14 considerations, staffing levels, health benefits, and 15 insurance. Ms. Hyde, I think at this point in time we'll 16 drop it in your lap. 17 MS. HYDE: I'm going to drop it right behind me to 18 Gary. 19 JUDGE TINLEY: Okay. 20 MS. HYDE: And let Gary give you the numbers that 21 y'all had requested. 22 JUDGE TINLEY: Okay. 23 MS. HYDE: This will be backup to the numbers that 24 I've been giving you for the last five weeks on insurance. 25 And he also went ahead and put together two additional 8-16-10 bwk 4 1 scenarios that you asked for at the last workshop. 2 MR. LOONEY: What I'd like to try to do is make 3 logical sense out of some of this, which is not easy. 4 COMMISSIONER WILLIAMS: Good luck. 5 COMMISSIONER OEHLER: Good luck. 6 MR. LOONEY: So, the first -- I'm not going to give 7 them all to you at one time, 'cause I don't want you reading 8 ahead. The first one, the first assumption that I made, and 9 the first one that I've just given to you is an assumption 10 that is not necessarily something that I recommend or am 11 promoting, but what it is is an example of what would happen 12 if we were, in fact, to eliminate all coverage for dependents 13 and that the County would not contribute anything toward the 14 subsidy of the dependent coverage, and as a matter of fact, 15 not even offer dependent coverage. And then change the HRA 16 program as you had talked about before from a $600 17 contribution to a $400 contribution for employees. The first 18 sheet that you see there, then, is an estimation of what the 19 liability would be if we were to make that type of change. 20 So, that liability that currently we're talking about on an 21 annual basis is almost 3 million, 2.9 million. Then that 22 liability would drop to almost -- about a million dollars, to 23 1.867 million, if we were to make this type of change. 24 Now, the sheet right behind that is the -- is the 25 method that is used to calculate what the county budget 8-16-10 bwk 5 1 number is for the current number of employees that are 2 insured, and that number is going to be at the top and the 3 middle of all the samples that I'm going to give you, so you 4 see that the budget number would be $570 per employee, per 5 month. And that would then project this into the total 6 number of employees that generates the $1.867 million in 7 liability that is projected under that plan change. So, the 8 first page is the -- kind of the summary of how we get to the 9 liability. The second page is going to be, then, what 10 premium allocations and the employee contributions are 11 required to -- to get to that funding level. So, you know, 12 again, this is not necessarily something I recommend. This 13 is the floor. This is where you start, and then you build 14 from this moving forward as far as plan design changes are 15 concerned, and as far as other benefit changes are concerned. 16 So, with that, I'm going to give you the second page. 17 JUDGE TINLEY: Is that the second one? 18 COMMISSIONER WILLIAMS: Yes, sir. 19 MR. LOONEY: Now we've made some additional 20 assumptions. We've made the assumption that the plan is 21 going to keep the dependent coverage in force. They're going 22 to have the HRA again funded at $400, but subject to the 23 deductible only, and then some minor prescription changes 24 that we had talked about as far as changing some of the 25 prescription medications to be at a higher co-payment. What 8-16-10 bwk 6 1 we did then is went through that process again. Once again, 2 the first page is the estimate of the liability that's 3 generated during the next plan year, in 2011. Takes that 4 generation, and that money comes out to about 2 million 8,9 5 for that. That's that bottom number down there. Then again, 6 if you look at the second page, what we've done is we've 7 assumed that the contribution level for the employee stays at 8 the same current contribution level as it is today. We 9 didn't make any change in the dependent contribution level 10 for these plan changes. If you -- if we then want to go back 11 and add in additional contributions to employee 12 contributions, then I need to take this format and go back, 13 and what'll happen is these numbers will change at the top. 14 You see again this funding budget number there, the top 15 middle. It now has gone from the $570 number, I think it 16 was -- 17 MS. HYDE: Yeah. 18 MR. LOONEY: -- to 797. So, that becomes the 19 budget number to apply toward each employee -- actually 20 applies toward each active employee slot. You budget that 21 number, and then you assume the employee contributions are 22 deducted from that, and other -- other revenue that's 23 generated from COBRA payments and retiree premium payments 24 then reduce that overall cost, but still the maximum 25 liability that's generated is that 2 million 8 number. So -- 8-16-10 bwk 7 1 so -- 2 COMMISSIONER OEHLER: What's the 2 million 458 -- 3 459? 4 MR. LOONEY: I'm sorry? 5 COMMISSIONER OEHLER: This -- on the second page of 6 that, the 2 million 4 right here. 7 MR. LOONEY: Right. 8 COMMISSIONER OEHLER: That's your total cost with 9 the -- 10 MR. LOONEY: That's the total employer contribution 11 cost, is 2.4 million. But -- 12 COMMISSIONER OEHLER: That's what I thought. 13 MR. LOONEY: Okay. And the total liability is 14 that. 15 COMMISSIONER OEHLER: So, the first plan you showed 16 us here was 1.8, which is -- and then it goes from that to 17 the 2.9. You got several different deals; 1.8 is the very 18 lowest. 19 MR. LOONEY: Right. 20 COMMISSIONER OEHLER: That we can do with not 21 having any dependents whatsoever. 22 MR. LOONEY: Right. 23 COMMISSIONER OEHLER: Did I understand that right? 24 MR. LOONEY: That's right. 25 COMMISSIONER OEHLER: And then we go to the 8-16-10 bwk 8 1 second -- second part of that, and it goes to 2.9 if we keep 2 our plan as-is, with the same rates applied? 3 MR. LOONEY: No, that includes making the changes 4 in the HRA deductible. 5 COMMISSIONER OEHLER: Okay. So that it goes to -- 6 that's the 2.459? 7 MR. LOONEY: 2.892. 8 COMMISSIONER OEHLER: Okay. 9 JUDGE TINLEY: Now, if we were to take that second 10 one and do any number of things, such as increase dependent 11 premium cost, that would bring that 2.9 number down some. 12 MR. LOONEY: Right. What it -- the way this -- the 13 way this flows -- I was trying to kind of give you the 14 feeling for the way it flows -- is that the funding number -- 15 what I give to you is a funding -- the County's 16 responsibility overall to reach that $2.9 million or 2.8; 17 that's the funding number. And, as you said, it's 2.8, but 18 the County's portion of that is 2.4, so that's when you come 19 up to that. The balance of that is premium that's paid by 20 employees for dependent coverage, retiree contributions, and 21 COBRA coverage, estimates for that. 22 COMMISSIONER OEHLER: And that -- and the 2.459 23 that we would be doing, is it the present funding level for 24 the premiums that are already paid by employees? 25 MR. LOONEY: Right. 8-16-10 bwk 9 1 COMMISSIONER OEHLER: For dependents? 2 MR. LOONEY: That's correct. 3 COMMISSIONER OEHLER: That's how we get that down 4 to 2.459? 5 MR. LOONEY: That's correct. 6 COMMISSIONER OEHLER: So if we added a little more 7 premium in some areas -- not a huge amount, but if we added a 8 little more premium to the employees for dependents, or to 9 employees, we could bring that number down a little bit more? 10 MR. LOONEY: Correct. 11 COMMISSIONER WILLIAMS: And that number is down 12 from 2.9; is that correct? 13 COMMISSIONER OEHLER: This number is down from 2.9. 14 MR. LOONEY: That number's down from 2.9. Now, 15 this is 2.9. Again, we wanted to try to kind of give you the 16 routine that we go through to get here. There's one extra. 17 COMMISSIONER OEHLER: Hey, I think your staple gun 18 went crazy on this one. How many sheets of paper are we 19 supposed to have here? 20 MR. LOONEY: There's supposed to be about four 21 attached to this, maybe five. 22 JUDGE TINLEY: Okay. 23 COMMISSIONER WILLIAMS: There's the 2.9. 24 MR. LOONEY: Here, Judge. You may not have 25 gotten -- do you have one loose? 8-16-10 bwk 10 1 COMMISSIONER OEHLER: I've got one that has a funny 2 staple in the corner. 3 MR. LOONEY: You know, I did the stapling myself. 4 COMMISSIONER LETZ: You must have been listening to 5 Looney tunes or something. 6 MR. LOONEY: I put it in one of those -- you know, 7 my printer machine does staples. You can't believe how many 8 staples I've got in this thing were on the wrong page or 9 backwards or whatever else. I am challenged by the 10 duplicating machine. But this is -- you know, this is -- we 11 go back to the 2.9 that I -- that we had projected 12 originally. So, now we -- we've got the 2.9, and this is 13 where we got to put the 2.9 number. Now, the page behind 14 this, the first page behind this should be the current 15 contribution rate by the employees. It shows what the -- and 16 it shows the county funding at that point. It shows it at 17 2.5 million, or $817 dollars per employee, per month, for 18 retirees. Do you see that page, Mr. Williams? 19 COMMISSIONER WILLIAMS: Mm-hmm. 20 MR. LOONEY: Okay. The next page is based on a 21 contribution of $55 by employees, but you have to follow. 22 It's in all tiers, all categories, which means that you've 23 added $55 to the employee contribution. You've also 24 increased the employee/child and employee/spouse by 300, and 25 the dependent/family by 600. But what happens is, you get 8-16-10 bwk 11 1 two methods of calculating. I've shown you both of them. 2 One of them is that the employee-only coverage is $55, which 3 is added to each one of those categories, which makes it not 4 just $300 for the spouse, but $355 for the spouse, because of 5 the way the calculation is generated. So, that number is 6 here, and then behind that is the number -- that's just $55 7 per employee, and then three, three, and six, which was 8 another number that y'all had asked to -- to support. 9 Actually, it's not 55; it's $60. I'm sorry. We've -- I was 10 asked for the $60 number. So, each one of these sheets that 11 you look at, if you look at that little yellow box there -- 12 should be yellow. That's what the employee contribution 13 level would be. All of the premiums are funded at 2.9. So, 14 the change that takes place is in the fact that this 15 generates revenue against the premium, so every one of these 16 reduces the per-employee, per-month cost to the county. So, 17 every time you add additional costs on the premium collected 18 to the employee, that's considered revenue, and that reduces 19 the overall funding number for the county. 20 COMMISSIONER OEHLER: Does this include the benefit 21 cards for dependents? 22 MR. LOONEY: Sir? 23 COMMISSIONER OEHLER: Does this include benefit 24 cards for dependents? 25 MR. LOONEY: Yes. 8-16-10 bwk 12 1 COMMISSIONER WILLIAMS: How much? 2 MR. LOONEY: Cards? It's four. 3 COMMISSIONER WILLIAMS: Four? 4 MR. LOONEY: No, I'm sorry. There's no change in 5 this 2.9. 6 MS. HYDE: Right. 7 MR. LOONEY: There's no change in the 2.9 number, 8 the one you're looking at that says the total funding balance 9 is 2.9. 10 COMMISSIONER OEHLER: Mm-hmm. 11 MR. LOONEY: There's no change in the benefit 12 structure from that standpoint. So -- so, you know -- you 13 know, again, I'm trying to -- trying to show you the rhythm 14 of how it works. 15 COMMISSIONER OEHLER: Right. 16 MR. LOONEY: So if we make -- if we make the one 17 change in the $400 co-payment, HRA and everything else, that 18 2.9 is reduced to 2.8, so we've taken about $100,000 out of 19 the total picture. That $100,000, then, if we apply that 20 back in as revenue to the other side of it, and also add in 21 the employee contributions, then that generates the net 22 number to the County for revenue purposes. So, somewhere in 23 here in this mix is the lowest number that we saw, which was 24 the five-something, and the highest number that we saw, which 25 was 800-something dollars. So, somewhere in that mix of 8-16-10 bwk 13 1 benefit, employee contribution, and revenue is the budget 2 requirement for -- for the county. Now, the one that -- that 3 appears to be reasonable is the loose sheet that I gave you. 4 COMMISSIONER WILLIAMS: The loose sheet? 5 MR. LOONEY: Yes, there's one that was loose. It 6 says right at the top -- says 741.69. 7 COMMISSIONER WILLIAMS: Mm-hmm. 8 MR. LOONEY: Okay. This is assuming a $55 9 contribution by the employee. It's assuming no plan changes, 10 and it's assuming an increase on all of the categories for 11 employee/spouse, employee/children, and family. 12 COMMISSIONER OEHLER: Which one are you on? 13 MR. LOONEY: It's the one that's loose. 14 MS. HYDE: The rate on this one -- 15 COMMISSIONER WILLIAMS: 741.69 at the top. 16 COMMISSIONER OEHLER: I got it. I thought that was 17 it. 18 MS. HYDE: The rate on this one, the spouse is 240 19 plus your 55. The child or children would be 250 plus your 20 55, and then the base rate on the family is 450 plus 55. 21 COMMISSIONER OEHLER: So it's 505. 22 MS. HYDE: Right. 23 COMMISSIONER OEHLER: This seems to me to be the 24 most fair. 25 MS. HYDE: We think that we can keep more people on 8-16-10 bwk 14 1 the plan that way. 2 COMMISSIONER OEHLER: Right. Because from the way 3 it's been explained to me, you know, we can drop something -- 4 we can basically force people to get off of it, but that's 5 not necessarily the best idea, because they're -- you know, 6 the premiums do -- that they pay do help our plan. And if we 7 get them too high, then they all drop off. And it's not 8 that -- 9 COMMISSIONER WILLIAMS: Then we're left with only 10 the sick ones. 11 COMMISSIONER OEHLER: Yeah, it's kind of a 12 two-edged sword. But this one seems to be, in my mind, the 13 most fair. 14 COMMISSIONER WILLIAMS: And the County's bottom 15 line is 2.287? 16 COMMISSIONER OEHLER: That's correct. 17 MR. LOONEY: Right. 18 COMMISSIONER OEHLER: And that gets us back down to 19 where we can -- 20 COMMISSIONER WILLIAMS: Kind of like that. 21 MR. LOONEY: With all due respect to the Court, 22 this is a budget number. You know, we're six months prior to 23 the anniversary date of the plan. Having this as a budget 24 number gives us some leeway moving forward to be able to make 25 minor adjustments if we need to. 8-16-10 bwk 15 1 JUDGE TINLEY: Now, on this last one that we're 2 speaking of, that's the current HRA of 600 -- 3 MR. LOONEY: Right. 4 JUDGE TINLEY: -- to all insured. 5 MR. LOONEY: To all insured within -- the primary 6 change in this one is that the HRA is only used for 7 deductible purposes. 8 JUDGE TINLEY: Okay. 9 COMMISSIONER OEHLER: What happens when you take 10 off -- how much is it if you take off of the benefit cards 11 for all the dependents? Spouse, children -- 12 MR. LOONEY: The -- the reduction of the benefit 13 card of $400 is worth about $80,000. If we -- 14 COMMISSIONER OEHLER: If you take it completely 15 away from dependents. 16 MR. LOONEY: If you take it completely away from 17 dependents, you're probably -- you'll be looking at a hundred 18 and -- looking at $160,000 in HRA payments, which, of that 19 160, about 70 -- 70,000 of that was on the co-payments. On 20 that portion of it. How much of that was actual dependents 21 and how much was actual employees, I don't know. 22 COMMISSIONER OEHLER: If we do it just to -- just 23 to allow them to be used for -- for deductible costs rather 24 than co-payments, -- 25 MR. LOONEY: That's -- that's -- 8-16-10 bwk 16 1 COMMISSIONER OEHLER: -- that should make a good -- 2 a big difference. 3 MR. LOONEY: That's going to make a big difference. 4 'Cause when I looked at the -- the reports that I got that 5 showed the dollar amounts that were paid by check, I had 6 about four pages or five pages of $10 payments and $20 7 payments. The checks were for $10 and $20, and those 8 primarily are co-payments. 9 COMMISSIONER OEHLER: Yeah. 10 MR. LOONEY: And prescription drug card payments. 11 COMMISSIONER OEHLER: And this -- does this 12 incorporate the -- the idea that some of those drugs that 13 have therapeutic equivalents will be eliminated? 14 MR. LOONEY: No, but it does put in a -- an 15 additional deductible for some of those. We put in 16 additional deductible. 17 COMMISSIONER OEHLER: How much? 18 MR. LOONEY: We really -- you know, right now we're 19 estimating it being $75, but that may very well change as our 20 experience -- as we with get closer to the end of the year, 21 and that's why I want to, if I can, keep that in reserve, 22 because that may be one of the adjustments that we're -- 23 COMMISSIONER OEHLER: We still have from now to 24 basically December -- November/December to -- we're just 25 trying to get a budget number to budget for at this time. 8-16-10 bwk 17 1 MR. LOONEY: Right. 2 COMMISSIONER OEHLER: And then we're going to stay 3 on the same plan until -- 4 MR. LOONEY: Correct. 5 COMMISSIONER OEHLER: -- November/December, and 6 then have re-enrollment on the new plan. 7 MR. LOONEY: Right. 8 JUDGE TINLEY: What I'm hearing from you is that if 9 we work off of the 2.2 to 2.3 number for budget purposes, as 10 we get further into this ensuing year where we start making 11 decisions with regard to the specifics of the plan, we'll 12 have more information, and we can tweak it then insofar as 13 the description, the HRA, the -- the co-pays. 14 MR. LOONEY: Correct. 15 JUDGE TINLEY: All those things. 16 MR. LOONEY: We'll still have some juggling room to 17 be able to move benefits around a little bit or change 18 contribution levels. 19 JUDGE TINLEY: So we're far from over. 20 MR. LOONEY: Judge, if I had my -- if I had my 21 special -- you know, if there were some way for me to predict 22 the future, believe me, I would. We're just too far ahead. 23 COMMISSIONER OEHLER: Shine your crystal ball up a 24 little more. 25 MR. LOONEY: I feel like six incidents in the jail, 8-16-10 bwk 18 1 on a daily basis. 2 SHERIFF HIERHOLZER: Judge, if this were that type 3 deal with the 55 for the employees, is that something that 4 will take effect in January? Or in October? 5 MR. LOONEY: January. 6 SHERIFF HIERHOLZER: January for the employees. 7 JUDGE TINLEY: Yeah, it would begin with the new 8 policy, and our policy year is the calendar year. 9 SHERIFF HIERHOLZER: Okay. 10 MS. HYDE: It would be taken out of payroll in 11 December, though, because we prepay insurance. 12 JUDGE TINLEY: Yeah. 13 COMMISSIONER OEHLER: That's the way it is. 14 SHERIFF HIERHOLZER: Okay. Just so the employees 15 would know, yeah. I'm just -- I didn't know when. 16 COMMISSIONER OEHLER: Well, I appreciate what 17 you've done. I think y'all did a -- you know -- 18 COMMISSIONER WILLIAMS: A lot of good crunching 19 here. 20 COMMISSIONER OEHLER: I mean, there's a lot to be 21 considered here, and especially with the new law coming down 22 like it has, and, you know, this -- this whole thing. It's 23 just amazing to me that we've had a really good insurance 24 plan for employees and everybody, and then the federal 25 government comes along and messes it up. 8-16-10 bwk 19 1 SHERIFF HIERHOLZER: Isn't that normal? 2 JUDGE TINLEY: Any other words of wisdom you got 3 for us today, Mr. Looney? 4 MR. LOONEY: Other than the fact that I'm 5 monitoring it on a regular basis, Judge. 6 JUDGE TINLEY: As usual, we appreciate your 7 efforts, and if something rears its ugly head, good, bad, or 8 otherwise, why, I assume you'll be passing it on to Ms. Hyde. 9 MR. LOONEY: I'm planning on probably another visit 10 before you expect me, just so that we can bring you up to 11 date on a regular basis. So, I want to make sure everybody's 12 informed of where we are. 13 JUDGE TINLEY: Any more questions for Mr. Looney? 14 COMMISSIONER WILLIAMS: Not right now. 15 JUDGE TINLEY: Thank you, sir. 16 MR. LOONEY: Thank you, Judge. 17 JUDGE TINLEY: We appreciate it. Okay. Other 18 budget issues, Ms. Hargis? 19 MS. HARGIS: We're actually flipping. I'm going 20 first; then Eva's following me. We're a tag-team on this 21 thing. 22 JUDGE TINLEY: Okay. 23 MS. HARGIS: We have a printout for you, as well as 24 it's installed on your computer, so you can look at it in two 25 different manners. We do have it up there for everybody to 8-16-10 bwk 20 1 see. 2 COMMISSIONER WILLIAMS: You got one? 3 MS. HARGIS: We're attempting here to go a little 4 slower today, and also to answer the questions a little bit 5 in a little different format than we did last time, and 6 hopefully a little bit better. We're going to start a little 7 differently this time by explaining to you that the 2010-11 8 budget is balanced. We didn't explain that to you last time. 9 We want to explain that. The budget is balanced as we 10 presented it. There are three things, and the budget 11 includes the following: The current salaries. It does not 12 include longevities, but it does include the current 13 salaries. Includes health insurance at 2.2. It includes the 14 new retirement rate of 11.9 and all requested expenditures, 15 and as you can see, I gave you the explanation there of 16 17,908,000 to 17,908,000 in the general fund. The rest of 17 the fund, there's a little surplus in the beginning of their 18 cash balance, so plus or minus, we used a little bit of that. 19 I have given you the summary, which I give you 20 every year. That's on the slide. It's also in your handout. 21 The one thing you will note in -- in Fund 10, I have reduced 22 the beginning cash balance or the beginning fund balance to 2 23 million 42. I had that at 2 million 6. I'm not that 24 optimistic right now. That leaves us with only 11 percent 25 reserve. If you have any questions, slow me down. Next 8-16-10 bwk 21 1 slide, please. One of the things that my job today is to 2 emphasize to you that what's not included in the balanced 3 budget is replenishment of diminishing cash reserves, the 4 $750,000 health insurance increase, longevity and law 5 enforcement educational, elected and appointed officials' 6 position schedule request, COLA and/or additional raises. 7 Again, these are just the things that are not included. 8 My part of this presentation is to show you 9 basically that our -- we have two revenue sources. The first 10 one I'd like to call controlled revenue. That's our ad 11 valorem tax. We have the ability to raise it, leave it the 12 same, and do what we need to do with that. The uncontrolled 13 revenue is our sales tax, fines and fees, and all of our 14 other permitting. Most of our fines and fees are stated by 15 law. We're at the maximum, according to our clerks, in most 16 all of those areas that we can go up. I gave you an example 17 here of the ad valorem -- this is your controlled revenue 18 versus your fines and fees and sales tax. What you want to 19 see in this area is 50/50, 50 percent ad valorem, 50 percent 20 the other side. As you can see, we are losing on the 21 uncontrolled revenue. We only have -- this year we have 33 22 percent of our revenue coming from that source. That's how 23 much of a reduction we've had in the last five years. That's 24 pretty tremendous. 25 Part B. What I'm trying to say is we have -- on 8-16-10 bwk 22 1 the expenditure side, we have reduced the expenses during the 2 past two years by at least a million dollars. We have 3 maintained and reallocated staffing levels and personnel 4 assets. No new employees have been added in the last two 5 years. The departments continue finding ways to hold 6 expenses under their budgets, and thus effectively increasing 7 the amount of carry-over to help bolster the diminishing 8 reserves. All of our departments, all of our elected 9 officials, have been great about not spending very much in 10 the months of August and September in both of these years to 11 help us. However, when the revenue decreases, even if we 12 keep the expenses down -- our revenues have gone down so much 13 that they're not offsetting the amount of expenses that we 14 have to pay out, so each year we have been eating into our 15 reserves, at a very rapid rate. 16 So, basically, why do we need reserves? We need 17 reserves for the following reasons: We don't get our tax 18 money, our -- large quantities of our tax money until 19 December. We have two months, October and November, that we 20 have to cover payroll; we have to cover all of our other 21 expenses. If we don't have a reserve sufficient enough to 22 cover that, we have a problem. That means no bills get paid, 23 no payroll, no health insurance. The next slide. Why are 24 the reserves diminishing? First of all, I think this is very 25 apparent to all of us; the economic downturn. The economy 8-16-10 bwk 23 1 grew at 2.49 percent, which is one-half as much as last year. 2 That's this year, according to the Dow Jones average that I 3 looked up yesterday. The effects of the sales tax, the fines 4 and the fees and the interest rates are all affected by this 5 economic slowdown. The tax assessments have remained fairly 6 flat for the last three years that I -- I've been here. 7 They're at 1 percent or 1 and a half percent. Housing starts 8 are down, which means no new houses on the tax roll. There's 9 no increase. The other thing that has affected our revenue 10 is the median barricade on the I-10 corridor that has 11 decreased a lot of our fines. 12 Now we're going to go through some slides so that 13 you can kind of see. This is -- this is the real slides that 14 come off of the accounting program. The first one is a 15 little bit hard to understand, because the yellow bar is a 16 little high, but that's today. We still have $3 million in 17 the bank. We have two months to go before the end of the 18 fiscal year. If you'll take those yellow bars and look at 19 them, they're going down. We lost 500,000 between '08 and 20 '09, so we're taking a steady downward turn. We had a 21 million, 585 in the bank at the end of last year. 22 COMMISSIONER OEHLER: How much? 23 MS. HARGIS: 1,585,000. Part of our money, though 24 from the clerks doesn't come in until September -- I mean 25 October, because of the accrual method. They have to do 8-16-10 bwk 24 1 their reports first, and then our cash goes back, so that 2 goes up over 2 million. But, nevertheless, our accounts 3 balance. That's in the operating account only. Now, we're 4 only talking Fund 10 here. The first thing I want you to 5 look at, the next slide is our sales tax. The green bars are 6 your budget bars, the yellow bars are your balance, and the 7 red ones are your activities, so the red and the yellow are 8 going to match pretty much. In 2006-2007, you can see for 9 two years there, we remained at about 2 million 8. The next 10 year, in 2008-2009, we were at about -- came -- we're about 11 2,8 there as well. The only difference in that period is we 12 sold a $100,000 -- well, it was a million dollar airplane. I 13 don't know how many million, but we got $100,000 off of it, 14 so it kind of boosted us up and it gave us, you know, kind of 15 an artificial increase that year. But you can see how much 16 it has dropped between '08-'09 and '09-'10. 17 The other problem, I think, with these three years 18 is this is the -- this is the period of time when gasoline 19 went up almost to four dollars a gallon, so we had an 20 artificial spike in our sales tax, which made us think that 21 our revenue was really higher than it was. As soon as gas 22 came down, so came the sales tax. We also know, however, 23 that we've had a lot of business that have -- that have 24 closed their doors, and that's affecting our sales tax 25 revenue. And people are not spending, and the economic 8-16-10 bwk 25 1 papers that I read over the weekend state that the -- most 2 consumers still don't have the confidence to spend, and they 3 don't have the money to spend. 4 The first office we're going to look at is the 5 County Clerk's office. This is her main account where she 6 has most of her civil fees, her criminal fees, and most 7 everything that they collect is in this account. And you can 8 see, the yellow bar's going down here as well. She was at 9 the -- actually over 450,000 in '05-'06, and now we're down 10 to about 200-something thousand, so we've taken about a 11 $250,000 hit over that period of time. The next one is our 12 criminal fees. These are not a huge number, but again, you 13 can see where those have dropped as well. 14 The District Clerk's fees are dropping. Not as 15 drastically as the County Clerk, because she didn't collect 16 quite as much money, but they are also coming down from what 17 they were. She spiked a little bit in 2007-2008, and then it 18 started coming down in '08-'09, and it's continuing to come 19 down. The second one on the District Clerk is -- is the 20 civil fees, and her normal contribution there was about 21 $11,000, and she took a spike because the civil fees now are 22 being collected in her office. Those went to 20,000. 23 However, when I look back at the civil fees that were 24 collected in the County Clerk's office on an annual basis, 25 they were around 60,000, so we're only picking up about 10 of 8-16-10 bwk 26 1 that 60. This is no reflection on their offices; just a 2 reflection of the fact that these fines and fees are not 3 coming in. These offices are still very busy, but they -- 4 they are just not bringing in the large numbers of fees that 5 we had in the past. 6 We did the J.P.'s for you, and in a quadrant here 7 so that you could see all of them, because they all vary 8 tremendously, but you can see in all four offices except J.P. 9 3 -- hers is picking up just a little bit, but you can see 10 she took the biggest drop. But all of them are coming down. 11 The next one really shows it, and this is a direct 12 correlation to the economy. This is interest rates. And we 13 have gone from, in 2006-2007, getting around $195,000, which 14 is that uncontrolled revenue, to $7,000. That 200,000 is a 15 great offset, and it's not because we're not collecting the 16 money during the times that we've normally gotten interest. 17 It's that the interest rate is minimal. And Mindy and I, as 18 well as the company that you hire, we try to get the best 19 rates we can out there. Unfortunately, they're not very 20 good. But this one really shows the economic downturn. 21 I guess my point is that when we talk about raising 22 taxes, we have to compare the fact that we have two sources 23 of revenue, one we can control and one we cannot. And, 24 therefore, when we can't find any other way to cut -- and we 25 have cut expenses from 18 million last year in the general 8-16-10 bwk 27 1 fund to 17 million this year, so we have made the cuts 2 necessary to try to balance the budget. Unfortunately, it's 3 just not enough, because I've got to have money in my surplus 4 account or I'm not going to be able to pay those bills in 5 October and November. The other thing that is very scary is 6 if we have a big trial, it can suck that money out in -- 7 $2 million for a murder trial is nothing. You know, it's 8 gone; it never even happened. 9 So, how do we fix it? I wish I had a crystal ball, 10 but here we go. The uncontrolled revenue is the sales tax, 11 fines and fees. We're not able to change those, because 12 they're set by state law or they're affected by the economy. 13 The controlled revenue you can change. It's not the 14 preferred choice, and it's not the one that -- that we want 15 to ask you for, but I've got to replenish the reserves. My 16 concern is the reserves are going under $2 million, and that 17 is not -- we just can't do that. We can't pay these -- we 18 can't pay our bills. So, I'm not asking you for money for 19 additional expenditures here. I'm asking you for money to be 20 able to survive. I don't think we want to be one of those 21 counties that has to go bankrupt. You know, I understand 22 from Judge Emerson that one of his didn't even have enough 23 money in the bank to pay their bills as of the 1st of October 24 last year. 25 The other thing we want you to look at real quickly 8-16-10 bwk 28 1 is -- is the different pennies. And we've given you more of 2 a choice this time; four, five, and I've actually told you 3 what those would bring in. And then if I put -- if I 4 subtract out the 500,000 -- that's assuming that you make the 5 other changes for staff and the other things, which you may 6 or may not do, but you can see it's not going to help me a 7 whole lot even then. I'm going to 16 percent, 15 percent, 8 and 12, so it's still not great. So, we're going to stop 9 right here, and we're going to say, what is your direction? 10 And I want -- I want and hope that you will have some 11 questions. Some of you we've had a chance to visit with. 12 Some of you we have not. So, are there questions at this 13 point? Because last time we moved a little quickly. I tend 14 to be even faster than Eva, so I want to slow down and see if 15 there are questions, questions from the audience. 16 COMMISSIONER OEHLER: Well, just like all other 17 businesses and all other people that live in this county, 18 they're trying to make it through. We're going to have to do 19 some things that I feel like that we don't want to do, but 20 that's just me. 21 MS. WILLIAMS: Excuse me. Could I say something? 22 COMMISSIONER OEHLER: We can't control some of the 23 things that have happened to us, but we do have control 24 over -- over some things that -- where we can find some 25 money, I believe. 8-16-10 bwk 29 1 MS. WILLIAMS: I would just like to say, I know 2 that raising taxes is not what you guys want to do, but I 3 agree with the County Auditor. Our cash flow is really, 4 really tight, and I think this is something that we all have 5 to face. I'd hate to be in a position to say that, "Sorry, 6 guys, we can't do payroll this week because we don't have the 7 money," but we're getting there. Just my two cent's worth. 8 JUDGE TINLEY: Ad valorem taxes, you had mentioned 9 December. Generally, it's really towards the end of 10 December, what comes in in December, if I'm not mistaken. 11 MS. HARGIS: That's true. 12 JUDGE TINLEY: People wanting to take that 13 deduction in this calendar taxable year. 14 MS. HARGIS: And also, you must remember too that 15 because we offer that you can pay half in the beginning and 16 half in July, we don't get as big a bulk right away as we 17 might. However, what we do get in December, of course, is -- 18 in January helps us throughout the rest of the year. But, 19 again, we had 2 million 9 in 2005-2006, and now we're down to 20 a million, five. 21 COMMISSIONER WILLIAMS: Now, what? 22 MS. HARGIS: A million, five is what we started 23 last year with, as far as cash in the bank. We're talking 24 cash. Now, when we look at an accrual basis revenue, we -- 25 and we take the fines and fees that we collect in September 8-16-10 bwk 30 1 that are kept in the clerk's offices until the reports are 2 issued, we'll probably be a little bit over $2 million, maybe 3 about 2 million 1. And, however, that's -- you know, our 4 payroll is a million dollars a month. It's over a million 5 dollars a month, but we do have some other agencies that we 6 pay that reimburse us for theirs, but our payroll is pretty 7 -- pretty healthy. Even if we held back on all the rest of 8 our expenses and just paid payroll, we would have -- but we 9 still have to pay the utility bills and things that are 10 mandatory. 11 JUDGE TINLEY: I guess my point was that figuring 12 that there are two dry spell months, October and November, 13 it's really three -- three months, because what comes in in 14 December is normally towards the very end, which really 15 doesn't get to be utilized until after the first of the year. 16 But then the big bulk of the tax money starts coming in in 17 January, before the taxes become delinquent. So, we really 18 got three months that we got to be concerned about from a 19 cash flow standpoint. 20 MS. HARGIS: That's correct. 21 COMMISSIONER WILLIAMS: Go back to Slide Number 4. 22 We talked about 2010-11 budget, what is not included in the 23 balanced budget. You make the case early on that we have a 24 balanced budget at 17,9, right? And which includes salary, 25 health insurance at 2.2, retirement, and all the requested 8-16-10 bwk 31 1 expenditures. So, if you go to Slide 4, replenishment of 2 diminishing cash reserves, 750K health insurance increase. 3 Now, if we just -- if we just heard the presentation from 4 Mr. Looney at 2.2, -- 5 MS. HARGIS: Right. 6 COMMISSIONER WILLIAMS: -- what is this 750? 7 MS. HARGIS: Well, that was originally what we 8 funded, because you haven't told us exactly what you wanted 9 to do. So, we're assuming that we're paying the whole bill 10 until you tell us otherwise. But if you take the scenario 11 that he gave you that's loose, and you take the total county 12 annual, which is in the middle of the page, it shows you, 13 with the contributions that we would get from the employees, 14 that shows you 2,287,372. 15 COMMISSIONER WILLIAMS: Right. 16 MS. HARGIS: That's only $87,000 more than we're 17 paying today for the county's contribution. 18 COMMISSIONER WILLIAMS: Okay. 19 MS. HARGIS: That greatly reduces that $750,000. 20 COMMISSIONER WILLIAMS: All right. So that 750 21 gets reduced down to -- 22 MS. HARGIS: And we have some alternatives for that 23 one. 24 COMMISSIONER WILLIAMS: Okay. 25 MS. HARGIS: The longevity and the law enforcement 8-16-10 bwk 32 1 education is about -- we've estimated about 50,000. 2 COMMISSIONER WILLIAMS: Okay. 3 MS. HARGIS: Those are the normal longevities for 4 people that they get by policy by the Court. You have a list 5 of elected and appointed official position schedule requests. 6 Eva's going to go over those with you as well in the next 7 part of the presentation. You had a long list of people 8 wanting to go up from one step to another step, so forth. 9 There's a long list of those requests. And then, of course, 10 whether or not you want to give COLA's or any type of raises. 11 Those are going to be covered in the next half, but we wanted 12 you to know on the front end what was covered and what was 13 not covered. These are optional items for you. We think we 14 probably now have a good handle, after yesterday -- Eva and I 15 worked all day yesterday, along with Gary on the phone, and 16 working with him on these schedules. We do feel like we have 17 some alternatives for you, that have been suggested by some 18 of you as well, to perhaps cover the health insurance, and 19 perhaps even the longevities. But as far as the other items 20 are concerned, again, that would depend upon what y'all 21 wanted to do with the tax rate, how much money you want to 22 put in the reserve. 23 But I'm requesting -- but I'm encouraging you to 24 consider greatly that we need to increase our reserves. Now, 25 in what manner you want -- you guys want to do that, you 8-16-10 bwk 33 1 know, that's not my choice. But we need some direction to 2 get -- to move -- my big concern at this stage of the game 3 is, we know we're short -- if we don't get all of our 4 advertisements and our meetings in line by September 30th, 5 we're going to be stuck with last year's tax rate, and we 6 will have a shortfall. I mean, that's the law. The law says 7 that you have until September 30th to approve a budget. If 8 you -- and a tax rate. If the tax rate is not approved by 9 September 30th, it reverts back to last year's tax rate. So, 10 we're kind of already, time-wise, two weeks slower than we 11 had anticipated, so we really need direction today. That's 12 why we're asking this. But I'm going to let Eva finish her 13 presentation, which we've broken down into two more segments 14 for you. But, again, we wanted you to be able to understand 15 these separately, not all crammed together into one. So, 16 this is my part of the presentation, and if there's any other 17 questions on -- on the revenue and the shortfalls, of why 18 it's there, you've seen the actual slides coming off of my 19 computer screen. Those are the actual dollars that we've 20 collected. So, I will turn it over to Eva. 21 MS. HYDE: The health insurance numbers that Gary 22 gave us yesterday afternoon -- 23 COMMISSIONER WILLIAMS: Is your presentation still 24 part of this -- 25 MS. HARGIS: Yes. 8-16-10 bwk 34 1 COMMISSIONER WILLIAMS: -- that I'm looking at? 2 MS. HYDE: Yes, sir. 3 COMMISSIONER WILLIAMS: Okay. 4 MS. HYDE: Or part of the 15 different scenarios 5 that we've given you over the last six weeks. That's been a 6 lot for everybody to try to understand. So, we go back to -- 7 go ahead, Tess. We go back to -- these are the two 8 scenarios -- these were the two basic scenarios that you 9 asked us to break down and change. You know, do something 10 with the HRA, don't do something with the HRA, do something 11 with the scrips. So, when we talked about the $750,000, that 12 is based on there was no change to the plan whatsoever. 13 There was no change to the cost to employees; that the County 14 would have to absorb the rest. That's a big -- that's a big 15 chunk of change. If we look at the two scenarios now that 16 were -- that have not been very popular during the last six 17 weeks, I think that y'all can see that that goes down to 18 about $2.3 million on the top, and it'll be the same on the 19 bottom. It's about the same, without any plan changes except 20 the HRA, and the HRA then becomes deductible only. 21 I will caution again, just like we said six weeks 22 ago, we're so far ahead, and our claims have been so high 23 this year. Typically, we do better in the next few months 24 with the claims; our end of year doesn't normally seem as 25 bad. But I'm real hesitant to say that this year, 'cause I 8-16-10 bwk 35 1 don't know. The 750 would then be able to come out; it would 2 go down to between 600 and 650. That's a big difference. 3 You know, so we're talking about $50,000 to $100,000 now that 4 the county -- that we're requesting from the County. So, if 5 you go to the next one, this one -- this one changes from 6 331,000. Ms. Hargis and I think Mindy would agree, we're all 7 very tentative. We're still thinking we need a little bit of 8 hedge room here, so we're looking for probably 100,000 more, 9 so we're looking at maybe a total of 200,000 so that we have 10 it in case, because we don't have the reserves. And then the 11 50,000 is the enforcement for longevity -- sorry, longevity 12 and law enforcement education. 13 And I think that when we talked about those in the 14 past, there's some misconceptions. We have a longevity 15 program for all employees, and it's every three years. After 16 your first year, you get it your first year, and then it's 17 every three years. And for all employees except for the 18 Sheriff's Office and jail, during their career, elected and 19 appointed officials can request, for whatever reason, an 20 additional 2.5 throughout the employee's career four times. 21 So, to make it fair with law enforcement, it was decided that 22 on law enforcement, their educational, so that means when 23 they got their advanced -- I'm sorry, their intermediate, 24 their advanced, and then their masters. Because their 25 masters, they get 5 percent, and typically a masters takes 20 8-16-10 bwk 36 1 years, plus over 1,200 hours worth of education. So, that 2 gives them their four, so that way it was more equal. But 3 currently in the budget, that is not included. So, after 4 talking with some of y'all during the last four or five 5 weeks, there's been some more places that we could look at. 6 How can the County pay for the required needs and additional 7 requests? And this first one, I'm going to let Commissioner 8 Oehler talk about a little bit. 9 COMMISSIONER OEHLER: Well, I don't know what kind 10 of -- how -- if we can get out of the contract we have with 11 the City on the one fire truck that I feel like is not really 12 used for anything. We don't really get much benefit out of 13 it. I don't know whether -- how simple that is to get out 14 of, or whether we're locked into it or what, but that's 15 $195,000. That's more than we pay all of our volunteer fire 16 departments lumped together, and I think it's too much. I 17 just don't know what the terms of that agreement we have with 18 the City is, and whether it has a 30-day clause to get out or 19 what, or what would it mean to the rest of our relationship 20 with the City. 21 COMMISSIONER WILLIAMS: I guess the question is, is 22 it part -- is the 195 or whatever that number might have 23 been, is that part of the three-year funding agreement that 24 we fashioned with them? Do you recall, Judge? Or is that a 25 separate deal? 8-16-10 bwk 37 1 JUDGE TINLEY: Well, we struck a bargain on a 2 schedule of all of those, which included that, I think. 3 Airport, library, animal control, fire, and EMS, I believe. 4 Those are the -- those were the things that were included. 5 On a comprehensive -- you know, specifically whether one 6 fails, all fails, you know, I don't know that that was there. 7 I know it was perceived that, for example, the -- the 8 reduction in contribution to the library by the County was a 9 quid pro quo for the County assuming all the M & O costs for 10 the airport. 11 COMMISSIONER WILLIAMS: Right. 12 JUDGE TINLEY: That's what the perception was. 13 COMMISSIONER WILLIAMS: Right. 14 COMMISSIONER OEHLER: I think the fire truck is 15 maybe apart and separate from some of that. I'm not 100 16 percent sure, but I don't think that was all part of that 17 original discussion. We contracted with them for that truck 18 a long time ago to serve Kerrville South. I'm not sure that 19 it's part of that agreement. 20 JUDGE TINLEY: Well, the bargain on how that was to 21 be determined was established at that meeting. 22 COMMISSIONER OEHLER: Mm-hmm. 23 JUDGE TINLEY: Like I say, whether or not it was 24 part of an overall package that -- and I'm trying to recall 25 whether or not there was any specific consideration for 8-16-10 bwk 38 1 Animal Control picking up the city and phasing that in. 2 COMMISSIONER OEHLER: It wasn't. 3 JUDGE TINLEY: With the exception of not picking up 4 dead animals, what -- what the consideration was for us 5 assuming that initial liability. 6 COMMISSIONER OEHLER: We just took it as part of 7 the deal, trying to make all that come together. We wouldn't 8 be fussing about funding any more and joint projects. 9 MS. HARGIS: I think that's correct. 10 COMMISSIONER WILLIAMS: We didn't get anything out 11 of that. 12 COMMISSIONER OEHLER: We didn't get anything out of 13 Animal Control. 14 MS. HARGIS: That was just a negotiating tool, I 15 think, that we used. We're out of the three years. 16 JUDGE TINLEY: Yeah, I understand that. 17 MS. HARGIS: We're out of the three years. Now, 18 the truck and EMS were in there, but they were just -- we 19 just discussed them, and they would remain the same. The 20 only thing, remember, they added was an escalation clause, 21 cost-of-living or COLA on the fire truck. 22 JUDGE TINLEY: Mm-hmm. 23 MS. HARGIS: But those two were really just 24 continuing. It was really the library, the Animal Control, 25 and the airport. 8-16-10 bwk 39 1 COMMISSIONER OEHLER: The airport. 2 MS. HARGIS: They were big-ticket items. Those 3 were the three that we kept having problems over. And so I 4 don't know if we ever signed a contract with them. I mean, 5 do you sign an annual contract with them on the fire truck? 6 JUDGE TINLEY: We previously had done addendums on 7 an annual basis. Like Commissioner Oehler said, that 8 contract went way yonder back, and we -- we got certain 9 services in return. Now, it's conceivable that -- that, you 10 know, if we're able to provide those services in some other 11 manner, such as the manner suggested, that we no longer 12 require the services. Of course, the -- the one downside, 13 looking at from it down the street, is I'm sure they've 14 already got that 195 included within their budgetary figures 15 for what they're working on. 16 COMMISSIONER WILLIAMS: Yeah. 17 JUDGE TINLEY: But -- 18 COMMISSIONER OEHLER: Well, and too, they just 19 increased all ours by a hundred something thousand dollars, 20 EMS contract. 21 JUDGE TINLEY: That was about a $100,000 increase. 22 COMMISSIONER OEHLER: Yeah. 23 COMMISSIONER WILLIAMS: Typically through the 24 years, both EMS and fire have always been subject to 25 increases, right? 8-16-10 bwk 40 1 COMMISSIONER OEHLER: Mm-hmm. 2 COMMISSIONER WILLIAMS: And the quid pro quo for 3 getting out of the library and into the airport, that was a 4 progressive thing, too. We came down and came down, -- 5 COMMISSIONER OEHLER: True. 6 COMMISSIONER WILLIAMS: -- and finally got to the 7 point where we say, "Okay, we take over the airport." And 8 where are we, 200,000? 9 COMMISSIONER OEHLER: Supposed to be 200 this year, 10 right? 11 MS. HARGIS: It leveled off at two -- 12 COMMISSIONER OEHLER: 300 this year. 13 MS. HARGIS: -- 200 this year, and then the Animal 14 Control dropped off this year. They did -- we did phase that 15 down a little bit. We got a little bit last year. 16 COMMISSIONER OEHLER: Very little. 17 MS. HARGIS: 17 percent last year, and so that's 18 gone. And then we get no help with the airport. So, we 19 basically took some pretty large liabilities on. And -- and 20 when I came here and was down the street, you paid 125,000 21 for the fire truck. 22 COMMISSIONER WILLIAMS: For what? 23 MS. HARGIS: For the fire truck. 24 COMMISSIONER WILLIAMS: Fire, okay. 25 MS. HARGIS: So you -- 8-16-10 bwk 41 1 COMMISSIONER WILLIAMS: That's -- 2 MS. HARGIS: -- you got a huge increase on that. 3 And in one year, it went to a hundred -- I believe it went to 4 185 that year, and then they've gone up to 195 since 2000 -- 5 that was 2007. So, this is a suggestion. I don't think this 6 is one of the bargaining tools. I think these were there and 7 you just continued them. There wasn't any question about 8 those at that particular time, but I think if another 9 volunteer fire department ever came on board, even so, even 10 using these, we would have probably considered that, because 11 why would we want to pay for it if we had a fire -- so it's 12 my understanding that Turtle Creek responds to those fires 13 anyway. 14 COMMISSIONER OEHLER: Turtle Creek and Ingram and 15 Center Point, all three respond to them. 16 COMMISSIONER WILLIAMS: Right. 17 MS. HYDE: So if we added Center point, there would 18 be another 15. 19 MS. HARGIS: I asked the question of the Kerrville 20 firemen when they were here, "Do you have a pumper truck to 21 go up there?" Because they don't have the water pressure up 22 there. And their answer was no. 23 COMMISSIONER OEHLER: I don't think we're getting 24 any bang for our buck out of that deal. Whenever they are 25 called, they basically are in the way. They pump a few 8-16-10 bwk 42 1 gallons of water and they're done, and the volunteers have to 2 take over anyway. I really don't think we're getting any 3 service. 4 JUDGE TINLEY: We need to look at that contract and 5 see what our ability to -- to terminate that if we no longer 6 need that service. 7 COMMISSIONER BALDWIN: Judge, while you're looking, 8 too, you might want to see if there's -- if it addresses the 9 north side of town, Fredericksburg Road. 10 JUDGE TINLEY: I know it was intended to. 11 COMMISSIONER WILLIAMS: Mm-hmm. 12 COMMISSIONER OEHLER: Well, I'm just trying to find 13 some money, guys. That's what I've been doing. I've been 14 looking at all the holes I can find. 15 COMMISSIONER WILLIAMS: That's all good. In this 16 case, we'd have to -- have to have a little lead time to get 17 ready for this. 18 COMMISSIONER OEHLER: Yeah, that's true. 19 COMMISSIONER WILLIAMS: Well, I think it's 20 something we ought to evolve into. 21 COMMISSIONER OEHLER: I think it's something we 22 ought to work on getting rid of eventually, whether we do it 23 now or later. 24 JUDGE TINLEY: Mm-hmm. Yeah, I would agree with 25 that. 8-16-10 bwk 43 1 MS. HYDE: Y'all just did the immediate hiring 2 freeze, and that -- if I understand it correctly, all hiring 3 must be approved by Commissioners Court. If somebody loses a 4 position, it will come back to Commissioners Court, whether 5 it's budgeted or not. Review of nonprofit donations. 6 Ms. Hargis had talked to you, Judge, about the nonprofits as 7 well, and looking at those. Reduction of overtime. When we 8 looked at the overtime, we talked with the Judge as well. If 9 you reduce overtime, that's $19,000 in the following offices: 10 2,000 in Tax Assessor; 3,000 in 10-510, which is part of 11 Maintenance; 10-511, 1,000, in Maintenance; and then 10-512 12 was the big one where you had 50,000 and reduced it by 10; 13 and Environmental Health, another 1,000; and Animal Control, 14 2,000. Which pretty much took out the overtime. 15 JUDGE TINLEY: What's that total reduction based 16 upon those overtime reductions? 17 MS. HYDE: $19,000. And you had asked for -- there 18 are the notes on what line items. So, again, if you take the 19 331 and modify that to 200,000, we now have a little bit of 20 change. There's no longer an $82,070 shortfall with just 21 those, because we know -- oops, you've already changed it. 22 We know right now there are two known positions that are not 23 being refilled. One is in the County Clerk's office, which 24 was a reduction in force. It has not come off of the 25 position schedule and it has not come out of the budgeted, 8-16-10 bwk 44 1 and it's already included in the budget for next year. And 2 then there's another position that'll be talked about next 3 Commissioners Court. The 19,000 in overtime, so now -- now 4 we're not at a negative $82,000. 5 COMMISSIONER WILLIAMS: Well, that assumes you're 6 going do the fire, right? 7 JUDGE TINLEY: Mm-hmm. That does assume the 165. 8 COMMISSIONER WILLIAMS: Mm-hmm. 9 MS. HARGIS: Yes, it does. 10 MS. HYDE: So here's that wonderful question again. 11 We're looking at the insurance, and basically we had gotten 12 it down to two, and I think that you've heard what our 13 recommendation is. So, we're hoping that you'll give us more 14 direction today. 15 COMMISSIONER OEHLER: Well, I like the one -- that 16 2.287 plan. 17 COMMISSIONER WILLIAMS: On insurance. 18 MS. HARGIS: That's this one. 19 COMMISSIONER OEHLER: 741.69 per employee/retiree 20 per month funding. 21 COMMISSIONER WILLIAMS: That's the one I like. 22 COMMISSIONER OEHLER: I go for that one. That has 23 done most of everything we asked to be done. And 24 unfortunately, it's going to be an increase on employees 25 having to pay when they haven't had to pay in the past, but I 8-16-10 bwk 45 1 don't see any way around it. 2 MS. HYDE: But this is just your choice so far, 3 right? That could modify? I mean, it could be modified, but 4 right now this is the one that you guys are looking at as 5 best case? 6 COMMISSIONER OEHLER: That's what I -- that's my 7 part of it. 8 COMMISSIONER WILLIAMS: 2.2 something. 9 MS. HYDE: It ends up being -- 10 COMMISSIONER OEHLER: 2.287. 11 MS. HYDE: -- 2.287. 2.2. 12 MS. HARGIS: And we're at 2.2 now, so that's an 13 87,372 increase. If we can go ahead and put that in the 14 budget, that will be a big help. 15 JUDGE TINLEY: For discussion purposes and 16 analysis, that's probably -- 17 MS. HARGIS: Okay, we're going to go ahead and load 18 that one. 19 COMMISSIONER OEHLER: Okay. 20 JUDGE TINLEY: Commissioner, let me ask about this 21 fire service situation. All things considered, do you think 22 it's feasible that we can get that done this year? 23 COMMISSIONER OEHLER: Good question. I just came 24 up with the idea. That's the hard part, is coming up with 25 the idea. The worst part's trying to figure out how to get 8-16-10 bwk 46 1 it done. But it just seems to me like that we're -- I do 2 realize that they -- that they respond a little bit more in 3 time too, and they're supposed to respond to Kerrville South, 4 from what I remember our agreement being. My goodness, 5 that's more money than it takes to build a volunteer fire 6 department. 7 COMMISSIONER BALDWIN: Well, I agree with it. I 8 like what you're talking about. We've been trying to do 9 exactly what you're saying for a number of years now, and so 10 you're pecking on the door here. But there's two -- there's 11 two things that I'm going to want to know, and one is, is the 12 contract covering the north side of town? And I think it 13 does. And what will we do for coverage there? Do we redo a 14 new contract? They have a new -- City has a new fire station 15 kind of out that way now. I don't know the answer to that. 16 Number two, I -- we need to notify the volunteer fire 17 departments and ask them if they're interested in -- 18 COMMISSIONER OEHLER: Sure. 19 COMMISSIONER BALDWIN: -- working out a new plan. 20 COMMISSIONER OEHLER: True. 21 COMMISSIONER BALDWIN: So I can't give an answer 22 today. 23 COMMISSIONER OEHLER: Yeah. 24 COMMISSIONER BALDWIN: Because -- because of those 25 two issues. 8-16-10 bwk 47 1 COMMISSIONER OEHLER: Isn't there some kind of an 2 old satellite station up on the hill there on the Schwethelm 3 place? 4 COMMISSIONER BALDWIN: There was. 5 COMMISSIONER OEHLER: There was. It's gone? 6 JUDGE TINLEY: Building's down now. 7 COMMISSIONER BALDWIN: Just a shed thing there. 8 But -- 9 COMMISSIONER OEHLER: I know it was dead. But, you 10 know, one of the alternatives if we get can't another 11 volunteer fire department to take it, if we can't start a new 12 fire department or get -- see that one gets started somehow 13 or another, the ones that are in existence can do satellite. 14 COMMISSIONER BALDWIN: Sure. Done it before. 15 COMMISSIONER OEHLER: And that's a good -- that's a 16 good way to get some new people involved in doing those 17 things, and they're not expensive to put one truck somewhere 18 and make sure somebody's keeping it up, and I think it's a 19 good alternative. And once you start that, maybe you can get 20 more interest as time goes on in those areas to help man the 21 thing and do volunteer firefighting. 22 COMMISSIONER WILLIAMS: I think you've got 23 short-term issues and you've got long-term issues. 24 COMMISSIONER OEHLER: I understand. 25 COMMISSIONER WILLIAMS: The short-term issue is how 8-16-10 bwk 48 1 you transition to the volunteer fire departments and maybe 2 rework the contract to make certain that the north is 3 covered. 4 COMMISSIONER OEHLER: Yeah. 5 COMMISSIONER WILLIAMS: And still have some 6 contract with the City, but reduce the scope. 7 COMMISSIONER OEHLER: Right. Because -- 8 COMMISSIONER WILLIAMS: The second part is, how do 9 we establish a new VFD? 10 COMMISSIONER OEHLER: Either a new one, or get an 11 existing one to do satellite. 12 COMMISSIONER BALDWIN: To give you an example, on 13 top of the hill right there, Five Mile Hill, I think we used 14 to call it -- used to be 5 miles from town -- there is a 15 large water tank that is fitted for trucks sitting there 16 ready to go. And some folks that are -- and there's a couple 17 little ponds, and there's lakes out that direction. So, it's 18 -- it's a matter of getting it done. 19 COMMISSIONER OEHLER: Mm-hmm. 20 COMMISSIONER BALDWIN: Is the issue. I've got a 21 question about the insurance, but we'll get completely off of 22 it, though. 23 MS. HYDE: Yes, sir. 24 COMMISSIONER BALDWIN: Are you through with your 25 fire truck thing? 8-16-10 bwk 49 1 JUDGE TINLEY: Yeah. My sense is that at this 2 point in the game, it may not be something that's doable this 3 year. 4 COMMISSIONER BALDWIN: Be tough, but -- 5 JUDGE TINLEY: But it's something that definitely 6 needs to be pursued. 7 COMMISSIONER OEHLER: A lot of money for not much 8 service. 9 JUDGE TINLEY: Yeah. 10 COMMISSIONER OEHLER: Next to nothing. 11 COMMISSIONER BALDWIN: Next to nothing. It truly 12 is. I don't want to say things like that out in public. 13 COMMISSIONER OEHLER: I know. 14 COMMISSIONER BALDWIN: You know, with the newspaper 15 in front of us and all that. You know, we don't want to be 16 honest and truthful about this. 17 COMMISSIONER OEHLER: Doesn't bother me. 18 COMMISSIONER BALDWIN: However... 19 COMMISSIONER WILLIAMS: You get that, Conor? 20 MR. HARRISON: Yes, sir. 21 COMMISSIONER BALDWIN: Oh, my god, he is in here. 22 Well, it's rape and pillage, to be honest. 23 MS. HYDE: Oh. 24 COMMISSIONER BALDWIN: Let me ask you a question. 25 On the insurance program, which I -- if I were going to make 8-16-10 bwk 50 1 a decision today, this would be the one I would take, as far 2 as information I have right now. But the -- the children -- 3 MS. HYDE: Yes, sir. 4 COMMISSIONER BALDWIN: -- line, the 305. 5 MS. HYDE: Yes, sir. 6 COMMISSIONER BALDWIN: What is it today? 7 MS. HYDE: $129 a month. 8 COMMISSIONER BALDWIN: And 305 covers one kid? Or 9 it covers 29 kids? 10 MS. HYDE: Yes, sir. 11 MS. HARGIS: 305 includes the $55 for the employee. 12 COMMISSIONER BALDWIN: Right. So, it's really 13 two-something. 14 MS. HYDE: It's $250, sir. 15 COMMISSIONER BALDWIN: And then -- okay. 16 MS. HYDE: I think one of your questions last week 17 was also about the retirees. 18 COMMISSIONER BALDWIN: No, I didn't have that 19 question, but I do today. 20 MS. HYDE: This continues the retiree coverage. 21 COMMISSIONER WILLIAMS: It's built into the 741.69 22 and the 2.287, right? 23 COMMISSIONER BALDWIN: That number doesn't change. 24 MS. HYDE: That -- that number, that $180 that's in 25 red, that would be up to y'all whether it would change or 8-16-10 bwk 51 1 not. That's -- that number is the retiree cost. The 2 dependents right now cost full coverage cost, so their cost 3 would be 749 -- $741.69. And keep in mind, this is 4 estimated. But the 180, that would be up to y'all's 5 discretion. Y'all vote each year on what the cost for 6 retiree insurance is. 7 COMMISSIONER BALDWIN: Is the 180 the present 8 number? 9 MS. HYDE: Yes, sir. 10 COMMISSIONER WILLIAMS: And that's what's built 11 into the 2.287? 12 MS. HYDE: Yes, sir, currently. 13 COMMISSIONER WILLIAMS: Okay. 14 MS. HYDE: I know it's an increase for child and 15 children, Commissioner, but it's a lot less than $279 going 16 up to 300. I mean -- 17 MS. MABRY: If I might say something, my home has 18 one income, and I have three children, and the first 19 scenarios we were given just about made me have a heart 20 attack. But I feel like that this last option that you have 21 -- have talked about would be something for my family. Just 22 speaking for us, that would be doable. I did the math on it. 23 It's going to basically -- it's not going to increase so much 24 that I can't absorb it in my family. Just my two cents. 25 MS. HYDE: Do you have any other questions, sir, on 8-16-10 bwk 52 1 the insurance? 2 COMMISSIONER OEHLER: Well, if we need to come up 3 with more money, we only have a few other options besides 4 doing what Ms. Hargis was suggesting, to raise taxes quite a 5 bit. We either reduce staff and cut expenses, or we all take 6 a pay cut across the board, 2 and a half percent. 7 COMMISSIONER WILLIAMS: What's that net? 8 COMMISSIONER OEHLER: About 300,000, isn't it? 9 MS. HYDE: 10 percent? 10 COMMISSIONER OEHLER: 2 and a half across the board 11 reduction in salary. 12 MS. HYDE: About 377,000. 13 COMMISSIONER OEHLER: So that's -- 14 COMMISSIONER WILLIAMS: What kind of staff 15 reduction are you hinting at? 16 COMMISSIONER OEHLER: That would be something we 17 all have to decide on. I mean, there are some areas that 18 could be cut. And none of it would -- none of them would be 19 popular, but I think we have to try to be fair about those 20 when we do them. We don't just target one and say, "You're 21 it," and we're going to lose four or five people. 22 COMMISSIONER WILLIAMS: No, you have to be fair 23 about it. 24 COMMISSIONER OEHLER: Have to be fair. There are 25 some departments that -- that could reduce. The service 8-16-10 bwk 53 1 wouldn't remain the same, but drastic times call for drastic 2 measures. 3 COMMISSIONER BALDWIN: Well, along that line of 4 thinking, I use the Tax Assessor/Collector just -- just as an 5 example, because I think it's -- to me, it's the clearest one 6 to see the function. And they are -- are exceptional 7 employees. They care about the county. They care about 8 those people that walk in there. I mean, they're just good 9 people. However, it's built in a way that when it comes 10 taxpaying time, that the taxpayers are not inconvenienced. 11 They don't -- there's not this huge line that runs out in the 12 hallway and outside most of the time. There are some times 13 it is. But we have enough employees in there that are sharp 14 enough to keep that line going, and -- and, you know, if we 15 cut some employees and our taxpayers were thrown into a line 16 and they were inconvenienced in some way, I just don't find 17 that that's important. That's not an important issue to me 18 at all, for the price that we're paying. They can wait in 19 line for a little while. It's the cost of doing business in 20 a downtime, in my opinion. 21 JUDGE TINLEY: We've obviously got a ways to go on 22 the balance of this. In order that we don't grind Kathy down 23 to a nubbin here, why don't we go ahead and break for lunch, 24 come back at 1:30. We'll be in recess till 1:30. 25 (Recess taken from 12:03 p.m. to 1:33 p.m.) 8-16-10 bwk 54 1 - - - - - - - - - - 2 JUDGE TINLEY: Okay, let's come back to order, if 3 we might. We were in recess for the lunch period. Now we're 4 back. We left off somewhere with you, Ms. Hyde. 5 MS. HYDE: You asked that the numbers be updated, 6 so that's what I just handed out to you. 7 COMMISSIONER WILLIAMS: Tess, is this new one on 8 here, or is this hard copy? 9 MS. MABRY: It's not on there. 10 MS. HYDE: Yeah, it is. I gave them a hard copy. 11 MS. MABRY: On their computers. 12 MS. HYDE: Oh, okay. 13 MS. HARGIS: We'll upgrade your computers in just a 14 little bit. 15 MS. HYDE: So the new cost for the insurance takes 16 it to the county contribution of $87,372. If you look -- 17 COMMISSIONER WILLIAMS: A long way from 18 three-quarters of a million. 19 MS. HYDE: Absolutely. If you look at the next 20 page, the insurance with longevity and law enforcement 21 education, that now drops that to $137,372. If you skip to 22 the next page, there's the insurance. The longevity gives 23 you 137,372. We now have two known positions that can be 24 removed. I removed the fire truck as requested, and the 25 19,000 in overtime leaves us -- leaves us $2,522 that we need 8-16-10 bwk 55 1 to do those two things. 2 COMMISSIONER WILLIAMS: Okay. 3 MS. HYDE: So that updates that. And then the next 4 section is personnel expense. This was -- this was given the 5 last two times for sure, but the first three on Road and 6 Bridge, it's important to note that in that bottom number, 7 Road and Bridge comes out. They're in a separate fund, so it 8 does not impact Fund 10. They have an excess in their 9 carry-over, so that can be self-absorbed in their budget with 10 no cost. 11 COMMISSIONER WILLIAMS: Which one? The top one? 12 MS. HYDE: The top three; the certified mechanic, 13 the admin assistant that has now their pesticide certified 14 license, and the assistant administrator. Those can be 15 absorbed into their budget, not in Fund 10. 16 COMMISSIONER WILLIAMS: Okay. 17 MS. HYDE: And then the rest of them would be up to 18 y'all. The County Clerk has reduced in force one position, 19 and then we talked about the chief deputies going from Grade 20 19's to Grades 23. It takes it down to $31,000, Judge, on 21 the bottom. If you take out the Road and Bridge. 22 MS. HARGIS: Its 16,574, I think, for Road and 23 Bridge. 24 COMMISSIONER WILLIAMS: The 3970 comes -- 25 MS. HYDE: The 48,358 becomes 31 -- 8-16-10 bwk 56 1 MS. HARGIS: Five-something. 2 MS. HYDE: It should be in the notes at the bottom, 3 Tess. 4 MS. HARGIS: Back. Back -- go down to the notes. 5 Does the note show? The notes are not showing. 6 MS. MABRY: Hmm-mm. 7 MS. HARGIS: It's 31. It comes down to 31,000, 16 8 from 48. There you go. Here you go. It comes down to 9 31,905. 10 COMMISSIONER WILLIAMS: 905? 11 MS. HARGIS: Mm-hmm. 12 MS. HYDE: Road and Bridge, the 16,000 -- woops. 13 That's okay. No notes there. 14 MS. MABRY: They're on the other slide. 15 MS. HYDE: Would there be any questions on this 16 one? 17 COMMISSIONER OEHLER: So, explain to me again about 18 the J.P. court coordinator increases. 19 MS. HYDE: The court coordinator increase was 20 requested -- it was originally requested from Judge Wright 21 for a 2.5 discretionary increase, one of four, for her 22 employee. And she based it on the education that she'd gone 23 to and the test taking she had received and passed. And then 24 the other two J.P.'s also felt like that theirs deserved 25 their discretionary increase as well, and requested it. 8-16-10 bwk 57 1 JUDGE TINLEY: For the same reason, or for 2 different reasons? 3 MS. HYDE: Different reasons and the same. They're 4 all going to get the -- get the education. 5 COMMISSIONER WILLIAMS: All going to get it, or all 6 have gotten it? 7 MS. HYDE: I don't know that they've received it or 8 not. The only one that I have a certified -- certification 9 from is from Judge Wright. And the Sheriff's Office, 10 everything was taken out except for the one for the crime 11 prevention -- is it crime prevention? Is that -- okay. 12 Crime prevention officer. That also increased her duties, 13 because now she is supervisor over dispatch, 10-plus 14 employees, and has been doing the supervisory job for the 15 last year. 16 COMMISSIONER BALDWIN: This court coordinator thing 17 for the J.P.'s, is that -- their discretionary raise, is that 18 written in our policy, that all employees -- 19 MS. HYDE: The way the policy was written back in 20 2000, Commissioner, was that we did the step and grades, and 21 they got the longevities. Also included with that was they 22 received four discretionaries throughout their career. 23 Unfortunately, we don't have anything prior to 2006, knowing 24 if someone got it or not -- got a discretionary. 25 COMMISSIONER BALDWIN: Why don't we call it the 8-16-10 bwk 58 1 educational program like we do for the Sheriff's Office? 2 MS. HYDE: That's been discussed in the past. The 3 difference in the Sheriff's Office and Road and Bridge is 4 that Road and Bridge has C.D.L., and they also have at least 5 80 to 96 hours of educational training that they have to do 6 annually. As far as the Sheriff's Office goes, his education 7 goes from -- when they go from a basic peace officer to an 8 intermediate, which is approximately 400 hours and five 9 years, and then from intermediate, they go to advanced, and 10 advanced is 10 years and 800 to 1,200 hours of certification 11 and training. 12 SHERIFF HIERHOLZER: Or certain college degrees. 13 MS. HYDE: Or certain college degrees. And then 14 from that to advanced -- from advanced to masters, they get a 15 5 percent increase, because it's 20 years and over 2,400 16 hours of education. Or a four-year college degree, and some 17 of those years come down. So, it wasn't really -- 18 COMMISSIONER WILLIAMS: Notwithstanding the 19 differences in Sheriff versus somebody else and somebody 20 else, we're talking basically an educational -- a policy for 21 educational achievement, period, right? The specifics of 22 which apply to each department, and those employees have to 23 qualify accordingly; is that correct? 24 MS. HYDE: You can, yes, sir. 25 COMMISSIONER WILLIAMS: All right, thank you. 8-16-10 bwk 59 1 COMMISSIONER OEHLER: Hey, Linda, would you mind 2 explaining about the 8,000 increase in your part-time? 3 MS. UECKER: What I had done was, Simona -- and 4 I'll just tell you who it is -- a longtime employee, is 5 wanting to retire. So, what I did is I eliminated all of my 6 regular part-time money, and was going to move her to a 7 part-time, because -- so she could continue to do the 8 appeals. I have to hire -- I mean train somebody else to do 9 that. But she was willing to come back, and I hate to lose 10 that experience if she's willing to do it. But I would also 11 totally eliminate any other part-time like I have right now. 12 And then the other one that -- I'll go ahead and explain the 13 other two. One of them is now the assistant bookkeeper or 14 the accounting, does the reports and stuff. She's learned to 15 do that. And then the other one was moving it from a 14 to a 16 15. She's still at what the janitor's salary -- within that 17 pay group, which I didn't think was right. I think there's 18 some others on that in the other offices that earned it as 19 well, the 14's. 20 COMMISSIONER OEHLER: So, what is -- what's the 21 justification for the deputy clerks all going to 23.1's? 22 MS. HYDE: For the chief deputies? 23 COMMISSIONER OEHLER: Chief deputies. 24 MS. HYDE: For the chief deputies, they're 25 currently at Grade 19. Going to 23's allows them to make 8-16-10 bwk 60 1 more money towards the end of their careers, but it also -- 2 going to 23, all of the elected officials that had chief 3 deputies say that they would insure that those folks were 4 totally trained and certified to take over their position in 5 case, so that you guys would have a choice. 6 COMMISSIONER BALDWIN: "So you guys would have a 7 choice"? 8 MS. HYDE: Yes, sir. Y'all. When -- if somebody 9 retires or leaves a position open, then you would have 10 someone that could automatically step in those shoes if -- if 11 you need to fulfill the term, that are already certified and 12 trained. 13 COMMISSIONER OEHLER: So, Ms. Auditor, which -- 14 which one -- what was the total of this, all of this put 15 together after the insurance, FICA, and retirement? 16 MS. HARGIS: 31,905. 17 COMMISSIONER OEHLER: So that is the absolute 18 total? 19 MS. HARGIS: Mm-hmm. We'd really like some 20 direction on this today if we could get it. 21 COMMISSIONER BALDWIN: Direction on what? On this 22 -- the page that we're looking at right now? 23 (Ms. Hargis nodded.) 24 COMMISSIONER BALDWIN: Where is the -- where is 25 that sheet of paper that we just went through, though? I'm 8-16-10 bwk 61 1 having a hard time keeping up with my paper here, that five 2 minutes ago we were -- 3 MS. HARGIS: Right here. This was a duplication, 4 so we took that off. 5 COMMISSIONER BALDWIN: Okay. 6 MS. HARGIS: That's the only change. It's the 7 same. 8 COMMISSIONER BALDWIN: Actually, I'm looking for -- 9 crap. 10 MS. HYDE: Which one are you looking for? 11 COMMISSIONER BALDWIN: Well, I'm not sure any more. 12 COMMISSIONER WILLIAMS: A bunch of paper. 13 MS. HYDE: Is it back here in health insurance? 14 This one? 15 COMMISSIONER BALDWIN: Yeah, it may have been. 16 MS. HYDE: Or this one? 17 COMMISSIONER BALDWIN: I don't know. 18 SHERIFF HIERHOLZER: Just for clarification, I 19 think on the 50,000 that she has in there that says longevity 20 and law enforcement education, that longevity covers all Kerr 21 County employees, right? 22 MS. HARGIS: Yes, that's right. 23 MS. HYDE: Yeah. 24 SHERIFF HIERHOLZER: Not just Sheriff's Office. 25 And I would cover my longevity and the officers' education. 8-16-10 bwk 62 1 You know, the officers' education in the -- in the Sheriff's 2 Department this year, as far as what we all predicted, that's 3 even if they actually get to those points, 'cause -- 'cause 4 you can see there's a lot of requirements, would be 6,000 5 max. So you have to -- it's not 50,000 coming out of 6 Sheriff's Office. 7 COMMISSIONER WILLIAMS: What number are you looking 8 at? 9 MS. HARGIS: We know that Rusty -- 10 SHERIFF HIERHOLZER: 6,000. 11 MS. HYDE: It's 6,000, yeah. 12 MS. HARGIS: We know. But it says "and." 13 MS. HYDE: On the longevity and law enforcement 14 education, on this page where it says 50,000, that is 15 longevity for all employees. 16 COMMISSIONER WILLIAMS: Okay. 17 MS. HYDE: And then law enforcement education. Is 18 there any other questions on this page? Somebody stole a 19 couple of sheets of paper right here, while I'm sitting here. 20 (Laughter.) 21 COMMISSIONER WILLIAMS: While you're dozing. 22 COMMISSIONER BALDWIN: All ties together. Where 23 are we -- tell me again where we are with our insurance 24 moneys. How far off are we, et cetera, et cetera? 25 MS. HYDE: $87,372. 8-16-10 bwk 63 1 COMMISSIONER WILLIAMS: Page 32. 2 COMMISSIONER BALDWIN: Page 32? 3 COMMISSIONER WILLIAMS: Top line. 4 MS. HARGIS: Instead of 332. 5 MS. HYDE: Instead of $332,000. 6 MS. HARGIS: Is that what you're looking for? 7 COMMISSIONER BALDWIN: I expect. 8 MS. HARGIS: Okay. Hang on just a second. Here 9 you go. The original packet was the number. Here you go. 10 COMMISSIONER BALDWIN: That's the original number? 11 MS. HARGIS: Mm-hmm. 12 COMMISSIONER BALDWIN: And is this the present 13 number? 14 MS. HARGIS: Yes. 15 COMMISSIONER BALDWIN: Now -- and so now we have 16 arrived at the salaries. And I can't afford an ink pen, and 17 the Judge won't offer me one, so I don't know what the -- I 18 can't remember what the bottom number here is, 42 or 19 something. Well, thank you. 20 COMMISSIONER OEHLER: 31,905. 21 MS. HYDE: You got one? 22 COMMISSIONER BALDWIN: Say it again? 23 COMMISSIONER OEHLER: 31,905, I believe. Is that 24 correct? 25 MS. HARGIS: Yes, sir. 8-16-10 bwk 64 1 MS. MABRY: Yes, sir. 2 MS. HYDE: 31,905. 3 COMMISSIONER BALDWIN: All right. Now, in -- in 4 all those little things that we were talking about, this 5 31,905 and then the insurance issue and all that, is there 6 still tax increases in that? 7 MS. HYDE: What you have on this page here is 8 before any -- any request for any sort of raises or COLA or 9 anything. We need $2,522. For insurance, longevity for all 10 employees, and the law enforcement education, we need $2,522. 11 The next section is -- now, here's raises that people are 12 asking for for their employees, and that's where we're at. 13 These are elected and appointed officials' requests for 14 increases. These are not figured into any -- any of these 15 numbers so far. 16 COMMISSIONER WILLIAMS: So, the 31,905 becomes 17 41-something, right? You need 2,200 -- 18 MS. HARGIS: Well, it now becomes 33,000. 19 COMMISSIONER OEHLER: Be 33 -- 34,4. 20 MS. HYDE: I didn't add those in, because I don't 21 know if you guys want to do this or not. 22 COMMISSIONER BALDWIN: I do not. I can answer 23 that. Is there -- in the 31,905, is there any tax increase 24 in that? To reach the numbers that we've arrived at today? 25 MS. HARGIS: Would there be a tax increase? 8-16-10 bwk 65 1 COMMISSIONER BALDWIN: Yeah. 2 MS. HARGIS: Yes. 3 COMMISSIONER BALDWIN: Okay. Now, where is that 4 tax increase? I mean, how much is that tax increase? 5 MS. HARGIS: Well, why don't you let her finish all 6 of them, and then we can -- 7 COMMISSIONER BALDWIN: Okay. Please remember to 8 answer that question at your convenience. 9 MS. HARGIS: I think it's just easier at the end. 10 COMMISSIONER BALDWIN: Okay. 11 MS. HYDE: The next page -- 12 COMMISSIONER BALDWIN: I don't know how you're 13 going to get to -- I don't know how you're -- I mean, I guess 14 everybody agrees to it but me, so I guess we move forward. 15 COMMISSIONER OEHLER: I didn't say I agreed to it. 16 COMMISSIONER BALDWIN: Okay. I don't know how 17 you're going to get -- get us to say yes or no here so you 18 can move on to the next page. 19 MS. HYDE: If y'all are -- no, I've been asking if 20 y'all had any other questions, and if you don't, then I'll go 21 on and keep going. 22 COMMISSIONER BALDWIN: Okay. All right. 23 MS. HYDE: The next one -- 24 COMMISSIONER BALDWIN: I kept reading on here -- 25 I'm sorry, I slept through another one here, but I kept 8-16-10 bwk 66 1 reading, "What is your direction?" What -- 2 MS. HYDE: It's at the end. 3 COMMISSIONER BALDWIN: What do you want us to do? 4 So, I was just trying to get you to that point. 5 MS. HYDE: You answered the question on the 6 insurance. That's why we were able to give these numbers 7 during lunch, so that it would show a difference, which was a 8 large difference. 9 COMMISSIONER BALDWIN: Okay. 10 MS. HYDE: And these are -- these are the next 11 sections. These were the proposed supplemental increases for 12 the County Judge, the $18,000. And the explanation is down 13 at the bottom; 6,000 for M.H.M.R., 6,000 for probate, 6,000 14 for juvenile. Under the J.P.'s, a proposed supplement of 15 $4,739 each, and that's $2,739 for M.H.M.R. and $2,000 for 16 probate. Then on the constables, it's an additional $2,000 17 for master peace officer licenses. And then for the Sheriff, 18 an additional $24,000 -- not to exceed $24,000, which was 19 for -- 6,000 for the intermediate certificate, 6,000 for the 20 advanced, and 12,000 for the master's. And that was 21 presented at the last -- during each of the last budget 22 meetings or budget hearings. This is not included in those 23 numbers, either. The next slide -- the next slide was the 24 proposed raises, which y'all said to do away with all except 25 for the one. 8-16-10 bwk 67 1 COMMISSIONER BALDWIN: Except for the Maintenance 2 Supervisor? 3 MS. HYDE: Not -- yes. Yes, sir. That was the 4 only one that was still under discussion. 5 COMMISSIONER OEHLER: I don't see how we can just 6 discuss one. 7 COMMISSIONER WILLIAMS: No, we -- 8 COMMISSIONER OEHLER: That's not fair to the rest 9 of them. 10 COMMISSIONER WILLIAMS: Yeah, you got to talk about 11 all of them. 12 COMMISSIONER BALDWIN: If you don't do that one, 13 you don't have to worry about the rest of them. 14 COMMISSIONER OEHLER: Yeah. If you eliminate that 15 one, the rest of them won't have to be there. 16 MS. HYDE: Next. This was the additional request, 17 the 2.5 COLA as outlined by the Department of Labor, which is 18 $323,015, and that's estimated. The HRA remained the same, 19 except make it deductible only, which at this point you've 20 tentatively agreed to with the new insurance rates. 21 COMMISSIONER BALDWIN: HRA remains 600 as opposed 22 to 400? I thought we dropped it to 400. 23 MS. HYDE: No, sir. These are the rates that you 24 guys agreed to -- 25 COMMISSIONER BALDWIN: Six? 8-16-10 bwk 68 1 MS. HYDE: -- on this one. 2 COMMISSIONER BALDWIN: So, the only change there is 3 the deductible issue? 4 MS. HYDE: Yes, sir. And to help -- why are we 5 asking for that? To help employees offset the 4 percent 6 federally imposed increase in payroll taxes as of 1/1, and 7 the .9 percent federally imposed Medicare withholding tax. 8 And the question mark, because we don't know what the 9 increase to insurance costs is going to do to the employees. 10 So, if you go to your last page, which is what Commissioner 11 Williams was talking about, I broke it down into three 12 sections. The first section was insurance with longevity. 13 That's 137,000. If you take off the two known positions and 14 remove the overtime, then our needs are $2,522. In our 15 budget right now, we would need an additional $2,500. If you 16 take that 2,500 and you add the 2.5 percent COLA, that takes 17 you up to $325,537. So, to answer your question, 18 Commissioner Baldwin, on the $2,522, I believe we could find 19 that within the budget without any sort of increase. 20 COMMISSIONER BALDWIN: Say that sentence again? 21 MS. HYDE: I believe on the $2,522, -- 22 COMMISSIONER BALDWIN: Uh-huh. 23 MS. HYDE: -- we could find that within the budget 24 without a tax increase. 25 COMMISSIONER BALDWIN: Well, Bruce spills that much 8-16-10 bwk 69 1 on Saturday night. 2 COMMISSIONER OEHLER: Not in a while. 3 MS. HYDE: If you go to the next section, however, 4 comma, I don't think that we can carve out $323,015. 5 COMMISSIONER BALDWIN: You don't think that we can 6 carve out -- 7 MS. HYDE: So that there wouldn't be a tax 8 increase. You were asking me if it would need a tax 9 increase. Unless we can cut another $325,000. 10 COMMISSIONER WILLIAMS: Well, even if you're 11 talking about 325,537, most of which is for a COLA, you still 12 haven't satisfied the Auditor's desire to put some more money 13 into reserves. 14 MS. HYDE: Right. 15 COMMISSIONER OEHLER: She's going to get a little 16 bit this year. 17 COMMISSIONER WILLIAMS: How little is "a little"? 18 COMMISSIONER OEHLER: Somewhere between -- from 19 what I was told, somewhere between 500,000 and 650,000. 20 MS. HARGIS: Yeah, but I've had to revise that. 21 COMMISSIONER WILLIAMS: So who's got the 550? You 22 got it, or you got it? 23 COMMISSIONER OEHLER: I don't have it. 24 MS. HARGIS: Well, because of the -- again, because 25 of the claims and the revenue reductions, I'm not -- I'm not 8-16-10 bwk 70 1 sure we'll get -- I mean, we're running that far under 2 budget, yes. But what we will have in revenue that's more 3 than that, I'm not sure. In order to carry a reserve 4 forward, I must have more revenue at the end of the year than 5 I had expenses, and right now I have less expenses than 6 budgeted, but my revenue is running behind. So, at the end 7 of the day, I may still have -- to make this simple, $100,000 8 worth of revenue and $150,000 worth of expenses. So, I'm 9 grabbing from reserves even though I'm under. That's our 10 whole problem. If we look at every year, and I did an 11 analysis as far back as the software would allow me, 12 2003-2004, every year our revenue has been less than our 13 expenses. We have been under in expenses the three years 14 that I've been here, but the revenue has been so much lower 15 than projected, even though it was conservative, we -- you 16 know, kind of where the cash comes in. Next -- and that's 17 the part that I'm telling you about, the controlled and the 18 uncontrolled. 19 COMMISSIONER OEHLER: Where is this number that's 20 proposed supplemental increases? Where does that show up in 21 the three? 22 MS. HYDE: It doesn't. None of those show up. 23 COMMISSIONER OEHLER: So that's in addition to. 24 MS. HYDE: That's right. 25 COMMISSIONER WILLIAMS: The 325 that you're talking 8-16-10 bwk 71 1 about. 2 MS. HYDE: That's right. Those are all proposed. 3 There was no sense in putting those in at all. The 2.5, 4 Commissioner Letz had said he looked at a 2.5 COLA. You had 5 looked at a 2.5 reduction, so it's in there. Either way, 6 it's in there, so you guys can see the number plus or minus. 7 COMMISSIONER OEHLER: Correct me if I'm wrong. 8 When I talked to y'all the other day, you said the J.P.'s 9 COLA could be -- would be pass-through money. It would not 10 be money that would have to be allocated in the budget. Is 11 that correct? 12 MS. HYDE: It says that. It says that. 13 MS. HARGIS: Yes, that is correct. 14 COMMISSIONER OEHLER: All these others would have 15 to be allocated? 16 MS. HARGIS: That's correct. 17 MS. HYDE: Right. It says State Hospital and 18 magistration is a pass-through. 19 COMMISSIONER OEHLER: State Hospital and -- and 20 State Hospital for the Judge? Okay, I was looking at the 21 wrong one. 22 COMMISSIONER BALDWIN: Well -- 23 COMMISSIONER OEHLER: Those two would be 24 pass-through money. 25 MS. HARGIS: Yes. 8-16-10 bwk 72 1 SHERIFF HIERHOLZER: Magistration would be only if 2 we go up on the fees that we charge the City for the one day 3 of housing. We're currently at 37. I have to bring all the 4 Sheriff's fees back to the Court. But I would, you know, 5 propose -- and the City is not aware of this -- that we go 6 from the 37 to the 40 in inmate housing for their one day. 7 And so what that would -- would equal throughout a year, I 8 couldn't tell you exactly, but it should pretty well offset 9 that J.P. one. 10 COMMISSIONER OEHLER: So, how would we get the 11 money for the probate and juvenile? 12 MS. HARGIS: They're going to increase the fees. 13 COMMISSIONER OEHLER: Increase the fees on both of 14 those? And those would be -- 15 MS. HARGIS: Yes. 16 COMMISSIONER OEHLER: -- paid to the Judge instead 17 of -- 18 MS. HARGIS: They go into our revenue. We would 19 then bill them for the additional. In other words, we're 20 going to go up on our fee for the M.H.M.R. as well, and that 21 -- that is also an average, because they have to actually be 22 the judge for that particular case before they would receive 23 those funds. 24 COMMISSIONER WILLIAMS: What's the constable 25 supplement for? 8-16-10 bwk 73 1 MS. HYDE: Their master peace officer license. 2 We've asked for it each year for the last three years. 3 COMMISSIONER OEHLER: Does that generate any more 4 income for us? 5 MS. HYDE: That would be a question for the -- for 6 the constables. 7 COMMISSIONER WILLIAMS: I think I know the answer. 8 SHERIFF HIERHOLZER: I think in the long way 9 around, it does, 'cause you get a lot better and more 10 professional trained officers. 11 COMMISSIONER OEHLER: Would it increase our 12 revenues? It may increase -- or may decrease our liabilities 13 some. 14 SHERIFF HIERHOLZER: Depends on how you look at it. 15 COMMISSIONER OEHLER: It's just -- you know, 16 there's all kinds of justifications for increases in 17 salaries. I mean, there's no -- you can go across the board; 18 just about anybody in this courthouse and anybody that works 19 for Kerr County, and you could say that they deserve more 20 money. I don't think there's any question about that. 21 There's no question that they're -- they're good employees. 22 But this is not a normal time in the course of the economy. 23 I just don't see doing any -- anything much at all, unless 24 we're willing to take an across-the-board salary decrease. 25 MS. HYDE: That would be 300 -- 8-16-10 bwk 74 1 COMMISSIONER OEHLER: If you want to put money in 2 reserves, that's one way to do it. Just decrease everybody's 3 salary, mine included. 4 MS. HYDE: Well, the 325,000 would be a reduction 5 to 2.5 which is what you asked. That way you could see it -- 6 Commissioner Letz could see the 2.5 that he asked for. Then 7 you can see the reduction of 2.5. 8 COMMISSIONER OEHLER: Yeah, same thing. 9 MS. HYDE: That would be how much it is. 10 COMMISSIONER OEHLER: Same thing. 11 MS. HYDE: I just tried to kill two birds with one 12 stone. 13 COMMISSIONER OEHLER: That -- you know, the thing 14 is, we all know that everything runs in cycles. This just 15 happens to be a really deep down cycle. And other businesses 16 are suffering. There's a lot of people that are retired 17 that -- of course, they blame it on frozen taxes. That's one 18 thing. You can blame it on that every year, but those are 19 starting to level and come back the other direction, more so 20 than they did in the first three years. You know, sales tax 21 is tied to sales. I mean, there's no other way around that. 22 You can't force people to buy stuff and pay sales taxes. 23 When the market's good, people have money; they spend a lot 24 of money, and we get a lot more revenue. Retired people's 25 incomes are down because the money's not worth anything. If 8-16-10 bwk 75 1 you got money in the bank, it's -- 1 and a half percent is 2 about all you're going to get for it. That doesn't keep up 3 with anything. So, you know, I'm just not for a tax 4 increase. I'm -- you know, I think we just try to hold the 5 best we can with the benefits we got, and be glad we all have 6 a job, because this is not a normal time. And I hope it 7 doesn't get worse. But I don't think the government ought to 8 be exempt and just raise taxes because we get in a jam and 9 everybody now is going to get behind on their -- I don't 10 think that's a good excuse. 11 COMMISSIONER BALDWIN: This is exactly the wrong 12 time to do it. 13 COMMISSIONER OEHLER: I mean, you know, you have to 14 look back -- there's an argument that, well, you know, if we 15 don't do this, employees are going to be behind and they're 16 going to lose -- lose ground, you know, on their take-home 17 pay and stuff. Well, part of that's not this Court's fault, 18 and I'm not sure we ought to raise taxes to keep up with 19 government-mandated, basically, increases on the employees 20 that have good insurance, take it away from them, but that's 21 the way they've chosen to do it. We don't have any control 22 over that. 23 COMMISSIONER WILLIAMS: Well, that applies 24 specifically to the two I'm looking at, 4 percent 25 federally-imposed increase to payroll tax -- 8-16-10 bwk 76 1 COMMISSIONER OEHLER: Mm-hmm. 2 COMMISSIONER WILLIAMS: And the .9 federal employee 3 Medicare withholding tax. That's almost 5 percent. 4 COMMISSIONER OEHLER: Sure. 5 COMMISSIONER WILLIAMS: None of which we have any 6 responsibility for, and it applies to everybody in God's 7 green earth here. 8 COMMISSIONER OEHLER: We're all going to be subject 9 to it. It's not something that's going to be just kind of -- 10 well, we've insulated and isolated ourselves. But I also 11 have to remind everybody that a lot of employees, over the 12 last three years, have gotten 21 percent or more. That's 13 pretty hefty. Yes, it was to catch them up, and I'm not 14 complaining about that, but it's a fact. 15 COMMISSIONER WILLIAMS: Well, of course, the point 16 that I think Commissioner Letz was making is, we worked hard 17 to do that. 18 COMMISSIONER OEHLER: That's right. 19 COMMISSIONER WILLIAMS: And to help pull them up to 20 where they should be. 21 COMMISSIONER OEHLER: Mm-hmm. 22 COMMISSIONER WILLIAMS: And take some of them out 23 of the poverty food stamp level, which is all good. And 24 because of circumstances, I guess, beyond our control, may be 25 slipping back. 8-16-10 bwk 77 1 COMMISSIONER OEHLER: And we may slip -- 2 everybody's slipping back; it's not just the county 3 employees. It's not just -- you know, I just think local 4 government needs to be responsible to the people we serve, 5 the people that put us here to do the things they would have 6 us to do, and do like they're being forced to do. The people 7 that are paying, the numbers of those are shrinking, and the 8 ones that are not paying as much is kind of growing. But 9 it's a tough thing, and I don't -- I don't want to see 10 anybody be hurt by this. I don't want to -- you know, I 11 would hate to -- to suggest that we fire employees. I think 12 I would rather everybody stay the same, or even take a small 13 pay cut, rather than somebody lose their job. That's just 14 the way I think about it. Maybe that's wrong. But I think 15 there's a county family here that -- that supports one 16 another, and I don't believe there's anybody here that wants 17 to see somebody lose their job. And I think that we need to 18 try to do the best we can, but if we can't, I think the 19 hiring freeze may help us a little bit. And we can -- 20 COMMISSIONER WILLIAMS: A little. 21 COMMISSIONER OEHLER: A little. It won't be a huge 22 thing, but it may help us a little bit. 23 COMMISSIONER WILLIAMS: That's down the road. 24 COMMISSIONER OEHLER: But it'll be -- you know, 25 hopefully there'll be some of that during the year that will 8-16-10 bwk 78 1 help us. 2 SHERIFF HIERHOLZER: If I can, the only thing I'd 3 mention on top of that, Bruce, is that with the insurance 4 costs to the employees -- 5 COMMISSIONER OEHLER: Mm-hmm. 6 SHERIFF HIERHOLZER: -- that we know is going to 7 happen, and with what Eva's given us here on the 4 percent 8 payroll tax and the 9 percent Medicare tax -- 9 COMMISSIONER OEHLER: .9. 10 SHERIFF HIERHOLZER: .9. I think what you're 11 seeing, just with those three things, is already all the 12 employees taking a cut. Unhelped, -- 13 COMMISSIONER OEHLER: It is. 14 SHERIFF HIERHOLZER: -- but they're taking a cut. 15 Because a whole lot of the employees -- or the majority of 16 them, the county is their only income. I know most of the 17 Court's that way, but not all the Court. The County is not 18 necessarily -- you know, a lot of these families -- or these 19 employees, that's their only income they have, and so it's -- 20 it's going to get hit this year because of this stuff. And 21 to consider taking a pay cut on top of this, you know, me for 22 one, if you're -- and being a homeowner and a taxpayer, if 23 I'm given the option of whatever the one was, I think, that 24 Jeannie had given last year of paying $100 more a year on my 25 property tax, okay, than to see a lot of my employees end up 8-16-10 bwk 79 1 with a whole lot less, a whole lot more drastic cut on just 2 that small group of people I think is the wrong way to go. I 3 think we all -- the whole county has to share this, not just 4 the employees. 5 COMMISSIONER OEHLER: Yeah, well -- and I think 6 this is -- I think if we -- you know, we've pretty well come 7 to what I call ground zero pretty much today, if we don't do 8 anything else. 9 COMMISSIONER WILLIAMS: If what? 10 COMMISSIONER OEHLER: If we don't do anything else. 11 If we don't increase -- if we don't buy anything else or pay 12 for any raises anywhere else, we're pretty much at ground 13 zero without a tax increase. And, yes, you know, the federal 14 government is also the ones that are responsible for all 15 these additional taxes we're all going to be subject to, some 16 of us more so than others. 17 COMMISSIONER WILLIAMS: Okay. So for ground zero, 18 as you point out, pretty close. 19 COMMISSIONER OEHLER: Yeah, pretty close. 20 COMMISSIONER WILLIAMS: By not doing any of these 21 things, -- 22 COMMISSIONER OEHLER: Mm-hmm. 23 COMMISSIONER WILLIAMS: -- and the tweakings and so 24 forth we've done on insurance and other things. 25 COMMISSIONER OEHLER: Mm-hmm. 8-16-10 bwk 80 1 COMMISSIONER WILLIAMS: We still have not dealt 2 with whether or not we want to try to bolster our reserves. 3 COMMISSIONER OEHLER: That's -- that's another way 4 to do it. I mean, the only way -- there's only two ways to 5 do that. You -- either you cut staff or raise taxes. There 6 is no -- there's no other way. Unless you're going to gamble 7 and -- and say that it's going to be a good year and our 8 revenues are going to be up. 9 COMMISSIONER WILLIAMS: Well, if it is, that's 10 great. It goes to reserves. 11 COMMISSIONER OEHLER: That's right. 12 COMMISSIONER WILLIAMS: But if it's not, then we're 13 in a real box. 14 COMMISSIONER OEHLER: You know, we're going to be 15 in a worse bind. 16 COMMISSIONER WILLIAMS: The box is getting smaller. 17 COMMISSIONER OEHLER: Yeah. 18 MS. HARGIS: Well, and they're not predicting that 19 there -- 20 COMMISSIONER WILLIAMS: Pardon? 21 MS. HARGIS: They're predicting -- if you'll look 22 at all of the economic forecasts out there, which I tried to 23 do before we came to this, they're predicting -- as I said, 24 it's a slowdown. It's already started to slow down, and 25 they're predicting next year to be an even worse year than 8-16-10 bwk 81 1 this year. And we can't sustain two bad years; then we 2 really won't have any money. And if we have a big trial that 3 hits, that's all it's going to take. We're going to be gone. 4 We won't have any money left. Then we're going to have to go 5 back out to the bond market. And I'm not sure you can 6 finance maintenance. 7 COMMISSIONER OEHLER: You can't. You shouldn't. 8 MS. HARGIS: So -- 9 COMMISSIONER WILLIAMS: If you don't believe that, 10 just ask the City. 11 SHERIFF HIERHOLZER: Now, the one other thing you 12 can do, if you do the hiring freeze, okay -- and I don't want 13 to hurt Tim, all right, on this, but part of that 31,000 was 14 26 on a new position. I can try and increase the outside 15 trustee program a little bit more to try and give him some 16 more help. Normally, they're not ones you want inside 17 cleaning a major office space and that. I don't know, but we 18 can try and work some of those kind of issues out, which 19 takes 26 off that 31. I don't know if Tim can do that. I 20 don't know what that new position is for. 21 MR. BOLLIER: Before I would like to see any of our 22 family here be laid off or anything, I can do without. I can 23 do without my extra man I asked for. I mean, I've done 24 without a whole heck of a lot less in life. I mean, the 25 people here mean more to me than -- than hiring somebody else 8-16-10 bwk 82 1 out off the street. I mean, you know, come in for extra. 2 So, I mean, if it takes getting rid of my man, I'm all for 3 it. 4 COMMISSIONER OEHLER: Yeah. 5 MR. BOLLIER: Anything I can do to help. 6 MS. HARGIS: If we can go back, Commissioner 7 Williams and I were discussing what a penny, and -- and what 8 three cents would do on the average home, which I believe 9 this year is around 179,000. And we multiplied that out, and 10 I believe it came down to $53 for the -- the average home. 11 And for a $100,000 home, a penny is $10. So, you know, I 12 started with the three cents because that's what we thought 13 we needed, is the 300,000 for the insurance. But I'll -- a 14 penny is $290,000. I need to increase the surplus. I 15 cannot -- as one auditor said on my listserv, she said, "I 16 stood in front of my court and said we're going to go broke, 17 and they didn't hear." And I'm -- I don't think we're going 18 broke, but I'm concerned that we won't have any funds. We're 19 going to have to hold our bills and not be able to pay. So, 20 another problem that arose this morning is, you know, we -- 21 we also distribute to other funds. One of our other funds is 22 not receiving the revenue they should have been receiving, so 23 now we're short there, so we're probably going to have to 24 transfer our money from our general fund over to that fund. 25 So, it -- you know, by the time the end of the year comes 8-16-10 bwk 83 1 around, you know, I got to be sure that all the funds have a 2 beginning fund balance. And right now, I'm hoping that they 3 do. But, again, with all of our revenue sources except for 4 the ad valorem tax, and it's pretty much in -- we got a bit 5 more last month, because that's when our semiannual payment 6 comes in, in July. This year we won't receive -- this month 7 or next month, we won't receive very much of that. So, you 8 know, it's -- it takes, I believe, at least 2 million or 9 better, and really closer to 3 million. I'm, you know, at 10 12.91 percent, we have managed to be, and we budgeted between 11 16 and 19 percent; actually closer to 19 percent every year. 12 We have dropped 10 percent. I don't think we can drop again. 13 The other problem is, if we don't ease up a little bit the 14 effective rate and the rollback rate, and we stay flat on the 15 tax rate, and then next year we need more than this, we're 16 not going to get it. And -- and so what you need to think 17 about is not only this year, but next year. 18 JUDGE TINLEY: Ms. Hargis, I can appreciate your 19 lead and desire, as evidenced by a number of places through 20 this presentation about direction, wanting direction, and I 21 can -- I can understand that and appreciate it. The 22 unfortunate position we're in today, however, of course, as 23 Commissioner Letz couldn't be here, and he obviously needs an 24 opportunity to have his input and to digest all this 25 information, and we do have some other options that have been 8-16-10 bwk 84 1 introduced today, so I don't see that we're able to give you 2 any firm direction, as you've requested at every juncture, to 3 go forward. And -- 4 MS. HARGIS: I'm happy with the one today, but by 5 Monday, again, I can't reiterate the fact that the -- on 6 August the 23rd, it's the drop-dead deadline for us to put 7 the last advertisement that we have to put in the paper for 8 the ad valorem taxes, I believe, because we have to publish 9 when those hearings are going to be and so forth. Remember 10 that she's got to put that publication in. Now, you can have 11 the hearings after that, but we need to have that in the 12 paper, and I believe that is on the agenda. And what that 13 agenda item requests of you is -- not that you're going to, 14 but she needs to show in the newspaper what the ultimate tax 15 rate you might be thinking about. Doesn't mean you have to 16 levy it; it just means that you have the option. So, I would 17 say that down to September the 30th, at least you have that 18 option open if you give a range. Let's say that 3 cents was 19 the worst scenario you thought you would do. You put 3 cents 20 in, and on September the 29th, when we have our regular 21 meeting, you say it stays the same. As long as you -- 22 you know, if you put in the newspaper what you're 23 considering. So, I would ask that you think about that 24 between now and, you know, next Monday. 25 COMMISSIONER BALDWIN: You are hell-bent on raising 8-16-10 bwk 85 1 the taxes. But let me ask you this. You just said that you 2 could -- you could put the 3 cents in, which is -- I mean, I 3 can see you quaking, wanting to do that. 4 MS. HARGIS: Mm-hmm. 5 COMMISSIONER BALDWIN: And then, at the very last 6 minute, we could adjust it to whatever -- where we needed to 7 be. Can you do that in reverse? No tax increase, and then 8 at the last minute -- 9 MS. HARGIS: No. No. That's why -- 10 COMMISSIONER BALDWIN: Then I think we ought to put 11 the zero in, then, and just get on down the road. The -- the 12 thing is, if we're going to -- and I'm almost with Bruce. 13 Only -- you know, the only way to really cut money out of 14 this thing is employees. It's -- you know -- 15 COMMISSIONER OEHLER: That's true. 16 COMMISSIONER BALDWIN: All this other stuff is 17 wonderful. It's drops in the bucket, but it takes drops to 18 fill up a bucket; I understand that. But the way to get down 19 to really doing it is with employees. And let me ask you, 20 what happened to your salary increase that was in here? 21 MS. HARGIS: I took it out. 22 COMMISSIONER BALDWIN: Okay. Both of y'all? 23 MS. HARGIS: Mm-hmm. 24 COMMISSIONER BALDWIN: I didn't realize it was gone 25 until just a few minutes ago. But Tim is the only one 8-16-10 bwk 86 1 that's -- that's asking for a salary increase. 2 MS. HYDE: No, that was the only one that y'all had 3 left. You pretty much said no to everything, but I remember 4 Commissioner Letz -- and there were several nods that he 5 deserved one, so I left it in there, 'cause it wasn't a no. 6 The rest of them were pretty much no. 'Cause he's got more 7 buildings; he's got more responsibilities. 8 COMMISSIONER WILLIAMS: Well, a 5 percent reduction 9 in workforce yields $700,000, give or take a penny or two. 10 COMMISSIONER BALDWIN: And so what we're dealing 11 with is, we're dealing with these other salary increases of 12 these chief deputies and -- and J.P.'s and sheriffs and 13 constables and county judges and -- and maintenance and tax 14 assessors and all these other things. That's what we're 15 dealing with here, right? 16 MS. HARGIS: These are suggestions. It's whatever 17 you want to do. 18 COMMISSIONER BALDWIN: Let me -- let me tell you 19 reality here. So, what we're being asked to do is to vote to 20 raise taxes at the totally, completely wrong time, and we're 21 being asked to lay our -- our political careers on the line 22 so that these folks can have a little bit more money. 'Cause 23 I guarantee you, if we vote to raise taxes like you're 24 recommending, we're in our last term. 25 MS. HARGIS: Well, I don't know about anybody 8-16-10 bwk 87 1 else's neighborhood, but I know about mine, and they're 2 very -- they're not cheap houses. And most everybody in my 3 neighborhood has agreed, and -- and after visiting, a lot of 4 them have called me. I mean, it's not a big subdivision. 5 There's only maybe -- there's only about 50 of us, but they 6 -- they would rather see our services remain intact and the 7 employees get what they need. You know, all of us work long 8 years to -- to get where we need to be. And the bad times 9 may not be over for three or four years, so we're asking -- 10 and I'm not asking for myself, 'cause I may not be here that 11 long, but we have a lot of young people here who are 12 struggling to stay in a home, to -- to work, and then we're 13 asking them to pay $200 or $300 a month in insurance, which 14 deleted our -- you know, our deficit there. And then we're 15 asking them to -- you know, in addition to that, we want you 16 to have all the -- you know, the I.R.S. stuff we can't 17 control. But at the same time, you know, we want Kerrville 18 to grow and Kerr County to grow. 19 COMMISSIONER BALDWIN: That's wonderful, 20 Ms. Hargis. I tell you, I've been an elected official for 21 almost 25 years here, and it is the wrong time to raise 22 taxes. I would be in my very last term if I raised taxes 23 like you recommended; I don't care what your neighbors say 24 and how wonderful they are, and I'm sure they are. Some of 25 them are my dear friends. But that's a drop in the bucket 8-16-10 bwk 88 1 out there. People do not want their taxes raised. I can 2 answer that today, unequivocally. 3 SHERIFF HIERHOLZER: Buster, the only thing I have 4 to say to that -- and don't take this too personal -- is what 5 I'm hearing you say is you're asking every employee of this 6 county, okay, to take a cut in their pay and their take-home 7 to save your political career. 8 COMMISSIONER BALDWIN: That's part of it. And not 9 give you -- and not give you a major raise. 10 SHERIFF HIERHOLZER: I'm not worried about that. I 11 haven't -- 12 COMMISSIONER BALDWIN: Well, let's cut it. 13 SHERIFF HIERHOLZER: Cut it. I already thought it 14 was; you hadn't done it anyhow. The only thing that I've 15 ever asked this Court to do that I think is fair for the 16 Sheriff's position, okay, is that the Sheriff should make 17 more than his chief deputy makes. And I think this Court's 18 normally agreed with that, and in fact had passed a court 19 order to do that. 20 COMMISSIONER WILLIAMS: We did that. 21 SHERIFF HIERHOLZER: Okay. Even though it has not 22 been done now. 23 COMMISSIONER WILLIAMS: Well, it's time to 24 straighten it -- 25 COMMISSIONER OEHLER: Reduce the chief deputy. 8-16-10 bwk 89 1 SHERIFF HIERHOLZER: But what I'm talking about is, 2 you know, I, as a taxpayer, have paid that tax increase. No, 3 it's not good, but why should all of our county employees, 4 who -- who every one of y'all has said has worked their tails 5 off, whatever you want to say it, to make sure that they've 6 cut every budget that we can cut to the bone for the last two 7 years in order to better this county, and now we're going to 8 turn around, in my opinion, and slap them in the face. We 9 have to do some of that because of the insurance; I 10 understand that. But it doesn't have to go farther than 11 that. If the County, in my personal opinion, would have done 12 things correctly for the last number of years and raised 13 taxes a fraction of a penny or a penny or whatever over the 14 last number of years, the employees wouldn't be asked to do 15 this now. 16 COMMISSIONER OEHLER: Well, this is going to hit 17 them wherever they are, because the federal government just 18 passed all the new stuff, and it's unfortunate it all hit at 19 the same time, which -- 20 COMMISSIONER WILLIAMS: Yep. 21 COMMISSIONER OEHLER: -- that's just the way it -- 22 that's the facts. We had a bad claims year and we had a bad 23 year for laws getting passed down to us and making us look 24 like the bad guys. Which we all get -- we're all affected 25 too. I'm not sure that some of our employees aren't going to 8-16-10 bwk 90 1 be better off than we are, because there'll be some that will 2 get big refunds that we won't get. Equalization of income, 3 redistribution. 4 COMMISSIONER WILLIAMS: That's redistribution of 5 wealth. 6 COMMISSIONER OEHLER: So, anyway -- I mean, I don't 7 like it any better than anybody else, and I hate it for the 8 employees, but I don't think that our taxpayers should be 9 asked to pick up the slack of whatever the federal government 10 passed down on us and force to pay -- and force each and 11 every one of us to pay, including employees. But I don't 12 think the taxpayers of Kerr County ought to pick that up to 13 make us all whole again at this time. It'll happen at some 14 point, but not now. 15 COMMISSIONER WILLIAMS: If we don't go in that 16 direction, then the alternative is you've got to reduce your 17 force. 18 COMMISSIONER OEHLER: You're exactly right. 19 Unfortunately, that's true. 20 COMMISSIONER BALDWIN: Got to do what will reduce 21 your workforce, as painful as that may be. 22 COMMISSIONER OEHLER: Don't want to do that, but if 23 we have to, we have to. 24 COMMISSIONER BALDWIN: So what do we do? We wait 25 for Commissioner Letz to get back in and get briefed on the 8-16-10 bwk 91 1 -- there's two or three tweaks today. 2 COMMISSIONER WILLIAMS: That would be my 3 preference. 4 COMMISSIONER BALDWIN: And sit down and do this 5 again? 6 COMMISSIONER OEHLER: Monday, hopefully. Can we do 7 it on Monday? We're going to have -- 8 COMMISSIONER WILLIAMS: That's my preference. 9 COMMISSIONER OEHLER: Going to have another meeting 10 on Monday. A regular meeting, isn't it? 11 JUDGE TINLEY: Mm-hmm. 12 COMMISSIONER WILLIAMS: Do we need to meet before 13 then? Whatever, I don't care. 14 COMMISSIONER OEHLER: That's fine. We -- 15 COMMISSIONER WILLIAMS: Whatever the timetable is. 16 COMMISSIONER OEHLER: We'd have to meet on Friday 17 to get it posted, wouldn't we? 18 MS. GRINSTEAD: Commissioner Letz won't be here 19 Friday either. Commissioner Letz won't be here Friday; he's 20 got Region J in Camp Wood. 21 COMMISSIONER BALDWIN: We may have to do this 22 without Commissioner Letz. 23 COMMISSIONER WILLIAMS: We could move our meeting 24 to Region J. 25 MS. GRINSTEAD: Camp Wood. 8-16-10 bwk 92 1 COMMISSIONER BALDWIN: Camp Wood, woo-hoo. 2 COMMISSIONER WILLIAMS: On second thought... 3 COMMISSIONER OEHLER: On second thought, I'd rather 4 stay here. 5 COMMISSIONER BALDWIN: Yeah. 6 COMMISSIONER WILLIAMS: Yeah. Well, I would like 7 Commissioner Letz' input. And we've digested a lot of things 8 today, and I think what we're -- the decisions we have to 9 make requires his input as well. 10 COMMISSIONER OEHLER: One more question, Eva, on 11 the insurance. The benefit card was dropped to 400, and it's 12 still in force for every employee and dependent? 13 MS. HYDE: No, there will be no change. There's no 14 plan change on the one that y'all chose, except that the HRA 15 card can only be used for deductible. 16 COMMISSIONER OEHLER: But it's still 600? 17 MS. HYDE: It's still 600. 18 COMMISSIONER OEHLER: We can still drop that a 19 couple hundred bucks. 20 COMMISSIONER BALDWIN: Sure could. I thought we 21 did. 22 MS. HYDE: That's what Gary was telling you guys. 23 If you drop it to the 400, it's only going to save you about 24 $60,000. 25 COMMISSIONER OEHLER: 60,000 bucks right now is a 8-16-10 bwk 93 1 lot of money. 2 MS. HYDE: I'm just saying. I'm just saying. 3 COMMISSIONER OEHLER: And if you took it -- and if 4 you only give it to employees and not to dependents -- 5 MS. HYDE: That's -- he said it would probably save 6 about 130. But, remember, he said he -- he would request 7 that you leave those alone for right now, because that's kind 8 of our -- 9 COMMISSIONER OEHLER: Right. 10 MS. HYDE: -- gimme so that you can guys can see 11 these numbers. That's a pretty big difference in what we had 12 to give you the first time. 13 COMMISSIONER OEHLER: We have from now until 14 December to -- to -- 15 MS. HYDE: Right. 16 COMMISSIONER OEHLER: -- make that decision. This 17 is just for budget only. 18 MS. HYDE: Right. When we started crunching the 19 numbers, if we leave the prescriptions pretty much alone, the 20 HRA pretty much alone, then that gives you some wiggle room 21 if this 2.3 goes up, so that we don't have to do a budget, 22 then we turn around and say uh-oh, you know, we need another 23 $200,000. 'Cause then you guys would be, like -- 24 JUDGE TINLEY: Well, there's still the option all 25 the way to the other end. Coverage for employees only. 8-16-10 bwk 94 1 MS. HYDE: There -- yes, sir. There's still -- 2 there's still this one that's 1.8. 3 JUDGE TINLEY: That gives you another 400-plus 4 thousand over and above the other. 5 MS. HYDE: Be 1.8, yes, sir. 6 COMMISSIONER OEHLER: But then -- 7 MS. HYDE: But if you do that -- I know you guys 8 are knowing this, but if you do that, then, you know, 9 September 1, that's not -- I think last time you were asking 10 about what really goes into effect? September 1, we're going 11 to get hit with certain fees. They're coming. They're 12 already there. The grandfather, you guys already know it's 13 not worth anything any more. They've already changed enough 14 of the regulations, it's not worth anything. 2014, 1/1 is 15 when it becomes law that everyone must have insurance. This 16 year Mindy's going to have to insure that on our W-2's it 17 shows how much our insurance is, and typically what that 18 tells you -- you guys have been around a long time. I.R.S., 19 typically when you start putting something on your check, 20 it's coming. 21 COMMISSIONER OEHLER: Not supposed to hit anybody 22 under 200,000, right? 23 COMMISSIONER BALDWIN: This free insurance has 24 gotten awfully expensive. 25 COMMISSIONER OEHLER: What a joke. Got to have all 8-16-10 bwk 95 1 the little guys, you know, to pay it. 2 SHERIFF HIERHOLZER: Did you hear this afternoon 3 that the Colorado Supreme Court upheld Colorado's legislation 4 declaring that Colorado will not be part of the Obama care 5 system? And their Supreme Court upheld it earlier today. 6 MS. HYDE: Cool. 7 SHERIFF HIERHOLZER: Colorado State Supreme Court. 8 COMMISSIONER WILLIAMS: It happened today? 9 SHERIFF HIERHOLZER: It happened today. 10 COMMISSIONER BALDWIN: It's coming. 11 JUDGE TINLEY: That was the Colorado Supreme Court. 12 SHERIFF HIERHOLZER: Colorado Supreme Court upheld 13 it, so now it's all got to go up to the U.S. Supreme Court. 14 But Colorado -- 15 COMMISSIONER OEHLER: Try it in J.P. court; see if 16 we get the same result. 17 JUDGE TINLEY: Okay. Any more questions for these 18 ladies? Any more information desired, gentlemen? We can 19 figure out a way to gather some up for you. 20 COMMISSIONER OEHLER: County Attorney has 21 something. 22 COMMISSIONER WILLIAMS: Got a lot to digest 23 already. 24 MR. HENNEKE: Gentlemen, just to clarify on the 25 position schedule request, I did want to point out, I've got 8-16-10 bwk 96 1 -- it's a no-dollar increase for the one that I've put there, 2 but I've got -- of the employees in that office, depending 3 upon when they were hired, I've got one employee whose 4 classification is not consistent with the workload or 5 responsibilities as compared to the other employees. So, 6 it's no increase in compensation, it's no increase in pay, 7 but it's just an adjustment in the -- 8 JUDGE TINLEY: Job description. 9 MR. HENNEKE: Well, it's actually moving -- 10 MS. HYDE: Changing class. 11 MR. HENNEKE: -- moving the classification up to 12 where the job description is. And I think it's not -- it 13 just recognizes the responsibility that's already there 14 without any kind of raise or promotion, and just to make it 15 fair within how the rest of the individuals are classified, 16 and that's why that's there. 17 JUDGE TINLEY: Moving up in grade, but back in 18 step, so it's a wash. 19 MR. HENNEKE: Yes, sir. 20 MS. HYDE: Right. That's what it says. 21 JUDGE TINLEY: Okay. Is that it, gentlemen? We 22 will be adjourned. 23 (Budget workshop adjourned at 2:32 p.m.) 24 - - - - - - - - - - 25 8-16-10 bwk 97 1 STATE OF TEXAS | 2 COUNTY OF KERR | 3 The above and foregoing is a true and complete 4 transcription of my stenotype notes taken in my capacity as 5 official reporter for the Commissioners Court of Kerr County, 6 Texas, at the time and place heretofore set forth. 7 DATED at Kerrville, Texas, this 19th day of August, 8 2010. 9 10 JANNETT PIEPER, Kerr County Clerk 11 BY: _________________________________ Kathy Banik, Deputy County Clerk 12 Certified Shorthand Reporter 13 14 15 16 17 18 19 20 21 22 23 24 25 8-16-10 bwk