1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Budget Workshop 10 Monday, August 6, 2012 11 9:00 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 GUY R. OVERBY, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 25 BRUCE OEHLER, Commissioner Pct. 4 2 1 I N D E X August 6, 2012 2 PAGE 3 1.1 Review and discuss FY 2012-13 employee insurance programs, including group employee 4 health benefits and voluntary supplemental insurance programs; review and discuss as 5 necessary certified tax rolls; review and discuss requests for additional personnel; 6 review and discuss compensation for department heads and individual employee compensation 7 and other individual increases not mandated by the current policy; review and discuss 8 changes or additions to step and grade schedule and restructuring of department(s) 3 9 --- Adjourned 60 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Monday, August 6, 2012, at 9:28 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: I will now call to order a workshop 8 of the Kerr County Commissioners Court posted and scheduled 9 for this date and time, Monday, August 6th, 2012, at 9 a.m. 10 It is a bit past that time now. The agenda item for the 11 workshop is to review and discuss fiscal year 2012-13 12 employee insurance programs, including group employee health 13 benefits and voluntary supplemental insurance programs; 14 review and discuss as necessary certified tax rolls; review 15 and discuss requests for additional personnel; review and 16 discuss compensation for department heads and individual 17 employee compensation and other individual increases not 18 mandated by current policy; review and discuss changes or 19 additions to step and grade schedule and restructuring of 20 departments. The first portion of this dealing with the 21 employee insurance programs, we have Mr. Gary Looney with us 22 today, who has been acting as our consultant working with 23 Texas Association of Counties with regard to our -- our group 24 employee health benefits program, so I'm going to turn it 25 over to Mr. Looney in connection with this insurance portion 8-6-12 bwk 4 1 of it. Good morning, sir. 2 MR. LOONEY: Judge, good morning. Good morning, 3 Commissioners. As you know, we received some information 4 from Texas Association of Counties for renewal for this next 5 year that had a slight increase in it. We had made some 6 recommendations or suggestions about the possibility of 7 changing the anniversary date to an October 1st anniversary 8 date. Moving the anniversary date to 2012, October 1st, was 9 really not a positive option, because we would have lost 10 premium months; we would have been increased in premium 11 months. Went back and discussed the changes with Texas 12 Association of Counties, and moving to the October date. We 13 got into some discussions about underwriting. I think Mr. 14 Letz and I at one time talked about underwriting and -- and 15 what the options might be for them. After we finished our 16 discussions, TAC agreed, and they'll renew the contract 17 January 1st through October of next year -- or till October 18 1st next year at no premium increase, so with no increase in 19 premium during that time frame. 20 So, rates are flat. No plan changes, no benefit 21 changes. The way this typically works with renewal process 22 is we requested that renewal information in writing from TAC. 23 Since we're so far out in advance of the anniversary date, 24 they'll probably have that ready for us sometime in 25 September. And that -- I do have confirmation via e-mails 8-6-12 bwk 5 1 from Mr. Norwood, so we've got that. We have the official 2 documentation from them. So, that was -- that worked out. 3 In discussions with their underwriters, we were able to come 4 to an understanding about rating and how it should work, so 5 that was good. The other thing -- 6 JUDGE TINLEY: Let me see if I understand you 7 correctly, Mr. Looney. They have agreed to change the 8 anniversary date to end September 30th? 9 MR. LOONEY: In September. It will end September 10 30th with the renewal October 1 of next year. 11 JUDGE TINLEY: Yeah. And whereas initially, they 12 had quoted us a 1.6 percent increase in premium costs, that 13 has been negotiated away? 14 MR. LOONEY: Correct. 15 JUDGE TINLEY: Because our anniversary date now is 16 January 1, which is a good ways down the pike, they will not 17 be able to formally notify us of that offer until -- 18 MR. LOONEY: But they -- 19 JUDGE TINLEY: -- sometime next month, but they 20 confirm that will be their offer? 21 MR. LOONEY: Correct. It's a procedural process, 22 because what we ask them to do is to give us complete 23 summary, plan descriptions of the benefit plans. We go over 24 those, make sure there's not any plan changes, and then after 25 that's completed, then we'd just sign a request, and I have 8-6-12 bwk 6 1 to have the Court prepare a letter for the Court to sign 2 officially requesting the anniversary date change. 3 COMMISSIONER OEHLER: Mr. Looney, one of the 4 questions proposed to me is, what happens with the deductible 5 during a 9-month contract, as opposed to a 12-month contract? 6 MR. LOONEY: The contract for services being 7 rendered by Blue Cross/Blue Shield are a 9-month contract. 8 The contract for employee benefits -- the plan design itself 9 is actually a 12-month contract. 10 COMMISSIONER OEHLER: That's what -- what happens 11 to the deductible? 12 MR. LOONEY: There's no change. As long as there's 13 no benefit plan changes, then there's no change in any of the 14 deductibles for tabulation periods or anything else. It 15 doesn't restart that deductible period. It's a calendar year 16 accumulation for employees. If you were -- if you were to 17 change the deductible October next year, then there might be 18 an offsetting cost for the balance of the year. 19 COMMISSIONER OEHLER: But there's the 2,000 20 deductible now, and then a 4,000 max out of pocket for a 21 12-month period, and if this is going to be for nine months 22 starting January to September -- 23 MR. LOONEY: No, the plan -- the plan document 24 you're under for benefits is a calendar year 12-month 25 contract. The funding of that contract is the contract that 8-6-12 bwk 7 1 Blue Cross administrative service and insurance company has 2 for the county for the actual pricing of the contract, but 3 the benefit plan doesn't change in reference to the policy 4 year. 5 COMMISSIONER LETZ: If -- I mean, it seems -- and I 6 hadn't -- it seems at some point there has to be a catch-up. 7 Say at some point we were to leave TAC. It seems then that 8 there's a -- would the new, I guess, benefit plan still be 9 starting January 1? Even though -- or would you change at 10 some point to -- 11 MR. LOONEY: If you were to change contracts from 12 TAC, then you would -- when the contract -- the contract 13 discussion that you have with a new carrier, what do you is 14 -- in that process, is that you require the new carrier to 15 give full credit for any deductibles or coinsurances that 16 were satisfied by the employee in the previous nine months. 17 That credit is given forward, and then the plan again 18 regenerates in January as far as accumulations of the 19 deductibles. 20 COMMISSIONER LETZ: Okay. 21 MR. LOONEY: TAC, at that point in time, since it's 22 a fully insured contract, has established the reserves 23 necessary to pay any claims that were incurred up to the 24 September 30th date, so that the new carrier moving forward 25 would simply have premium payable for claims incurred October 8-6-12 bwk 8 1 1st forward, but giving full credit for deductibles or 2 coinsurance. 3 COMMISSIONER LETZ: As part of the negotiation 4 whenever you change, if we ever change? 5 MR. LOONEY: Yes. 6 COMMISSIONER LETZ: Okay. 7 JUDGE TINLEY: Question. We've had some discussion 8 earlier about dental coverage. 9 MR. LOONEY: Yes. 10 JUDGE TINLEY: Where are we there? 11 MR. LOONEY: We have -- we have three offers on the 12 table from Texas Association of Counties. What we did is we 13 took their -- we took information in general about the dental 14 plan and put that out into the industry in general terms to 15 make sure that the rates being offered were competitive, and 16 the rates that TAC offered are competitive. And you can 17 consider one of three plans. They have offered three plans. 18 One has a $2,000 maximum annual benefit. One has a $1,500 19 maximum annual benefit, and the other is 1,000. The 2,000 20 and 1,000 each have $50 calendar-year deductibles for an 21 employee for dental services, and then the benefits are paid 22 in dental insurance. You classify four different categories 23 of benefits. You have a preventive care, which is a standard 24 action; X-ray, cleaning, that type of function. Basic 25 coverage, which typically is coverage that -- fillings, 8-6-12 bwk 9 1 not -- not anything that includes metal. So, if metal is not 2 included, those are -- that's typically covered. Endodontics 3 and periodontics are also covered under basic, and that's one 4 of the things we look for to make sure those two areas -- gum 5 treatments, periodontics is a treatment also. The fourth 6 area of coverage is orthodontics, so that's an option. 7 Typically with dental plans, it's whether or not you want to 8 include orthodontics, whether you want to include for 9 children only, or you want to include it for adults and 10 children. So, there's pricing in that area. The major 11 coverage typically is for replacement of teeth, where you 12 have some sort of metal involved; gold work, work that's more 13 extensive, and that benefit's typically paid at 50 percent. 14 The premium rates that they've given to us range from -- the 15 highest premium rate is $21.62 per employee, per month. 16 Based on 270 employees, that's roughly $70,000 a year, 17 covering 270 employees. The next plan with the $1,500 18 maximum annual is $20.62, only a dollar difference, and that 19 amounts to $66,800 a year in premium. The third benefit with 20 the $75 deductible, a much lower benefit on an annual basis, 21 is 16.50 per employee, and that is $53,500 per year in 22 benefits. The way that the -- the Blue Cross plan works 23 when -- in conjunction with the TAC Blue Cross/Blue Shield 24 program is that they do have conversations between their 25 claims operations, so that the Blue Cross dental network does 8-6-12 bwk 10 1 communicate in the claims operations with the Blue Cross 2 servicing for the TAC benefits, so that is a benefit in that 3 case. The employee-only cost, you're talking about providing 4 that for all -- this is only if the County pays 100 percent 5 of employee cost. If it's on a voluntary basis, those rates 6 do increase and go up as a result of it being less 7 participation in the plan. 8 COMMISSIONER LETZ: Gary, is there -- these are -- 9 the amount that -- say you go to 16.50 per employee, per 10 month. What if -- is there an option for the spouse and/or 11 family -- 12 MR. LOONEY: Yes. 13 COMMISSIONER LETZ: -- to be added under that? The 14 employee would pay for that portion, correct? 15 MR. LOONEY: Yes. There's options for employee and 16 children, employee/spouse, employee/family, that are all 17 included in those rating structures. And the county paying, 18 again, 100 percent of the employee cost gives them a break, 19 because that -- that rate is less expensive for them to 20 participate. 21 JUDGE TINLEY: What -- what, if anything, has been 22 plugged into the budget at this point with respect to dental 23 coverage? 24 MS. HARGIS: The higher plan. The $2,000 plan has 25 been plugged in. 8-6-12 bwk 11 1 JUDGE TINLEY: It's already there? 2 (Ms. Hargis nodded.) 3 JUDGE TINLEY: Okay. What about uniformity of 4 rates for dependent coverage, spouse, children and so forth? 5 Have those been all reconciled within both the health plan 6 and the dental plan? 7 MR. LOONEY: Yeah -- yes, and there's a reason for 8 that too, Judge. The reason -- one of the reasons we do that 9 is that I'm sure there are a number of county employees that 10 have received letters from Humana saying that they were going 11 to be reimbursed some -- some amount of money from the excess 12 that was going to be provided. I have -- through Rob, I've 13 got a Federal Register that shows how we can and cannot use 14 those funds, and under a federal program for cities, 15 counties, and other non-federal governmental agencies, 16 there's very specific methodology that may be used and 17 followed. So, one of those is to use that dollar amount 18 toward the cost of the medical plan for the following year. 19 Based on the subsidies that the County currently provides, 20 that doesn't come close to what -- that amount doesn't even 21 come close to what the County subsidizes on dependent 22 coverage under the plan. Take aside the employee cost. As 23 you know, we subsidize the dependents' coverage also, and we 24 subsidize it considerably more than the reimbursement that's 25 being provided, so that can go back to the County as far as 8-6-12 bwk 12 1 reimbursement for that additional subsidy. 2 JUDGE TINLEY: What about the uniformity of rates 3 under the dependent coverage? That -- 4 MR. LOONEY: One question that's come up that we've 5 had on a number of occasions is where two employees work for 6 the county, as to how those dollars are distributed in the 7 premium scope. And what happens is that, typically, if you 8 have two employees, one employee will cover the spouse and 9 family, but the County contributes per employee toward the 10 cost of the plan, so you have a lesser premium because of the 11 fact that you're using a family rate as opposed to two 12 employee rates. So, we actually give a little additional 13 credit for two employees that are participating in the plan 14 as a family unit. The one thing we have to watch out for and 15 be careful of is that that employee that's covered as a 16 dependent is covered under the group term life insurance as 17 an employee. That's separated out so that we continue the 18 life insurance for the employee. 19 JUDGE TINLEY: And that's permissible under the -- 20 under the rules that we're required to operate under? 21 MR. LOONEY: Yes, sir. 22 JUDGE TINLEY: Okay, good. Okay. So, we've 23 already got the -- the better of the three plans -- 24 MS. HARGIS: Mm-hmm. 25 JUDGE TINLEY: -- plugged in. 8-6-12 bwk 13 1 MR. LOONEY: Premium -- the 1.6, I think that's 2 roughly a little over $20,000 a year reduction in the premium 3 cost that would have been paid otherwise under the Blue Cross 4 TAC plan. 5 JUDGE TINLEY: Now, with regard to the funds that 6 have been returned under the Humana plan, is there a specific 7 court order or resolution that this Court needs to make with 8 regard to the designation of where those funds will be 9 applied? In order to -- so we're not out of compliance with 10 those reimbursements? 11 MR. LOONEY: That's one of the things that I wanted 12 to discuss with the County Attorney. That's why I brought 13 the Federal Register with me. 14 JUDGE TINLEY: Okay. 15 MR. LOONEY: We'll have a chance to discuss that 16 and determine whether or not there's a specific court 17 procedure that needs to take place. 18 JUDGE TINLEY: Okay. So, other than that one 19 remaining issue, which is probably a formality, to say the 20 least, -- 21 MR. LOONEY: Right. 22 JUDGE TINLEY: -- everything's set, as it were. 23 MR. LOONEY: I think the budget -- I think your 24 budget can be confirmed. 25 JUDGE TINLEY: Yeah. And we got all that plugged 8-6-12 bwk 14 1 in? We're ready to go? 2 (Ms. Hargis nodded.) 3 JUDGE TINLEY: Okay. Any other questions from 4 anybody on the Court? 5 COMMISSIONER BALDWIN: Only question I have is, I'm 6 assuming that, through Dawn or someone, that we'll be able to 7 get all this stuff in writing, or at least an outline to it? 8 'Cause although y'all have plugged it in your budget, that 9 don't mean it's going to stand when we get a hold of it. And 10 hopefully you'll allow us to take a look at the budget. 11 JUDGE TINLEY: She's saying no, I don't need to do 12 that? 13 COMMISSIONER BALDWIN: Oh, yeah, we need to do 14 that, believe me. So, anyway, I hope somebody, you know, 15 puts it in kind of an outline type thing. Dawn, I guess. 16 'Cause I'll be the only one that will not remember all that 17 when we get around to it, to looking at the budget. 18 COMMISSIONER LETZ: It might have more questions, 19 but I think this is it on insurance. 20 COMMISSIONER BALDWIN: This is the end -- this is 21 the last conversation we'll have on insurance? 22 COMMISSIONER LETZ: For today. 23 COMMISSIONER BALDWIN: Oh. (Laughter.) Okay. 24 COMMISSIONER LETZ: Until we start looking at the 25 bottom line. 8-6-12 bwk 15 1 MR. LOONEY: Any other questions? 2 JUDGE TINLEY: Thank you, Mr. Looney. Appreciate 3 it. 4 COMMISSIONER LETZ: Thank you. 5 MR. LOONEY: Do you want that in big block letters? 6 COMMISSIONER BALDWIN: Yeah. (Laughter.) 7 JUDGE TINLEY: That's all, folks. For today. 8 COMMISSIONER BALDWIN: Yeah, okay. 9 JUDGE TINLEY: Okay. I think the next thing we've 10 got to talk about is the certified tax rolls. There's a 11 notification that we are required to give, and which I think 12 will raise some eyebrows. Decrease in property taxes of 13 $733,199 under this budget, including almost $230,000 of 14 revenue raised from new property. I don't think we've seen 15 anything like that in a pretty good while. 16 COMMISSIONER BALDWIN: Yeah. I've got to ask a 17 question about what that means. 18 JUDGE TINLEY: Well, that means that the amount of 19 revenue coming into the county to be included within this 20 budget is down $733,199 from ad valorem taxes as proposed in 21 this budget. 22 COMMISSIONER BALDWIN: Now, do you add -- 23 JUDGE TINLEY: And that's notwithstanding the fact 24 that we had almost $230,000 of new revenue from new property. 25 COMMISSIONER BALDWIN: So, the new property numbers 8-6-12 bwk 16 1 have already gone in? 2 COMMISSIONER OVERBY: Mm-hmm. 3 COMMISSIONER BALDWIN: I see. Okay. 4 COMMISSIONER LETZ: So, if you don't -- if you take 5 out the new property, the property value's dropped a million 6 dollars. 7 COMMISSIONER OVERBY: That's right. 8 COMMISSIONER BALDWIN: Yeah. That's not funny. 9 JUDGE TINLEY: No, actually -- I actually think -- 10 COMMISSIONER LETZ: Tax. 11 JUDGE TINLEY: -- if there'd been no new revenue 12 from new property, it'd actually be closer to a million 13 dollars we'd be down. 14 COMMISSIONER OVERBY: Right. 15 COMMISSIONER BALDWIN: Yeah, that's what he said. 16 Yeah. 17 JUDGE TINLEY: Oh, I'm sorry. 18 COMMISSIONER BALDWIN: Something like that. 19 COMMISSIONER LETZ: I thought that's what I said. 20 JUDGE TINLEY: Oh, that's not what I understood. I 21 apologize. 22 COMMISSIONER OVERBY: 965,000. That's a lot. 23 JUDGE TINLEY: Pretty big number. 24 COMMISSIONER BALDWIN: There's nothing funny about 25 that at all. 8-6-12 bwk 17 1 COMMISSIONER OVERBY: No. 2 JUDGE TINLEY: No. 3 COMMISSIONER OVERBY: No, not a good sign. 4 JUDGE TINLEY: But my point is, we're required to 5 publish this, and you need to be aware of it and the ad 6 valorem tax aspects of the budget, and that's not been 7 something that we've been used to. Generally, our revenue 8 from ad valorem tax has been increasing because of either 9 increased values in existing properties, or increased value 10 because of new properties that go on the rolls. And this is 11 going the opposite direction, which is kind of foreign to us. 12 COMMISSIONER LETZ: Diane, is this -- is it across 13 the board? 'Cause I'm -- I've heard from quite a few that 14 their taxes went up. 15 MS. BOLIN: That their property taxes went up? 16 COMMISSIONER LETZ: Values went up, yeah. And, I 17 mean, I must have been -- I'm just wondering, was this kind 18 of -- where did the reduction -- 19 COMMISSIONER OVERBY: Come from. 20 COMMISSIONER LETZ: Yeah. Where was it? 21 COMMISSIONER OVERBY: Where are they coming from? 22 COMMISSIONER LETZ: Do you have any idea? 23 MS. BOLIN: I don't have any idea. We just pull 24 what the Appraisal District gives us and plug them in. I 25 think a lot of it is the over-65 freezes -- 8-6-12 bwk 18 1 COMMISSIONER OVERBY: Tax freeze. 2 MS. BOLIN: -- are eating our lunch. 3 MS. HARGIS: The value moved down. 4 COMMISSIONER OVERBY: How much more was that? Do 5 you know that number of how much -- I mean, obviously, 6 733,000. What was that percentage this year that was added 7 to that? You don't know for sure? 8 MS. BOLIN: I didn't even think about bringing the 9 paperwork with me, to be honest. 10 COMMISSIONER OVERBY: That's a big chunk. 11 MS. BOLIN: It is a big chunk, but I do know that 12 the over-65 goes up a couple million at least every year 13 because of the freezes that they get. Their value may 14 increase, but their property taxes to us do not increase. 15 COMMISSIONER LETZ: Right. I think it would be -- 16 interesting question. We can't do anything about it, but at 17 next week's meeting, if you could just give us a summary -- 18 MS. BOLIN: Okay. 19 COMMISSIONER LETZ: -- on that as to what the 20 values did, and where the -- what caused that, so that the 21 public is aware? 22 MS. BOLIN: Okay. 23 COMMISSIONER BALDWIN: Yeah, 'cause it is what it 24 is. 25 COMMISSIONER LETZ: Right. 8-6-12 bwk 19 1 COMMISSIONER BALDWIN: And we're going to have to 2 be big boys and act accordingly, and take care of the 3 taxpayers' business. When does -- when does this form go -- 4 be advertised -- not advertised, but -- 5 COMMISSIONER LETZ: Published. 6 COMMISSIONER BALDWIN: Published. 7 SHERIFF HIERHOLZER: It was in the paper July 21st. 8 COMMISSIONER BALDWIN: With my name on it? 9 MS. BOLIN: No, sir, with my name on it. 10 COMMISSIONER BALDWIN: Okay. 11 MS. HARGIS: That -- that will go -- 12 COMMISSIONER BALDWIN: When this will one with my 13 name on it -- 14 MS. BOLIN: Oh, that one -- no, that's not -- 15 that's Jeannie's. 16 MS. HARGIS: That's mine. That goes on the front 17 cover of the budget when we publish the budget online. We're 18 required by law to put that on top of the budget as the cover 19 sheet. 20 COMMISSIONER BALDWIN: And these numbers will not 21 change between now and that point? 22 (Ms. Hargis shook her head negatively.) 23 COMMISSIONER OVERBY: That's reality. 24 JUDGE TINLEY: Based upon certified tax rolls at 25 this point. 8-6-12 bwk 20 1 COMMISSIONER BALDWIN: Okay. 2 MS. HARGIS: Those are the same numbers that she 3 published on the 21st. 4 COMMISSIONER OEHLER: If memory serves me correct, 5 and sometimes it doesn't -- 6 JUDGE TINLEY: You have that problem too? 7 COMMISSIONER OEHLER: I have that problem, just 8 like other people I know. But it seems to me that last year, 9 that that number was -- the loss of revenue from the tax 10 freeze was about 800,000. Year before, it was a million. 11 And so it seems to me like -- you know, maybe I'm all wet, 12 but it's going the other direction. We've been lucky enough 13 to make that up with -- with some new values and things, but 14 that number eventually should adjust to where it's not 15 anywhere near this. As the cycle continues, and after seven 16 or eight or nine years, you finally get back to a place to 17 where you're -- you know, you have people that are no longer 18 with us. Those properties sell; people pay the new value. 19 You know, that's the cycle that you get. We're only about 20 six years into this process. 21 JUDGE TINLEY: Yeah. The -- the rationale that 22 eventually you'd start recovering from the over-65 tax freeze 23 was that as -- as these elderly folks sold their property or 24 passed away and they went into third-party hands and were 25 sold, the values would reset. 8-6-12 bwk 21 1 COMMISSIONER OEHLER: Right. 2 JUDGE TINLEY: But I think what we're finding is, 3 because of the market, that even -- even when there's death, 4 that -- that they're not selling in the open market. So, if 5 they're not resetting, they don't -- 6 MS. HARGIS: They're not resetting. And also, if 7 the spouse is as young as -- what is it, 52? 8 MS. BOLIN: 55. 9 MS. HARGIS: 55, and they hold onto the house, it 10 stays with them. The other problem we have with this, in -- 11 and this is a problem in areas like Kerrville, where your 12 over-65 population is greater than the normal percentage that 13 you can absorb. Most counties have anywhere between 5 -- 5 14 percent is high. 10 percent is really high. We're at 40 15 percent. Any time you have 40 percent of your roll is over 16 65, you're not going to recoup, because it's too massive, and 17 we're not growing enough in the other sector to offset that. 18 You have to have growth to offset. When I first came here 19 and we were doing all of this, I called where I'm from and I 20 said, "What is the percentage of over-65 in Montgomery 21 County? It's 3 percent. It's as many people as we have, but 22 the population is so much larger, it didn't bother them. But 23 here it's -- and Georgetown was suffering in the same 24 situation. However, their growth, because of Austin, has 25 gone up, so now they're -- they're doing better. But I think 8-6-12 bwk 22 1 that the city is also seeing -- seeing this same situation. 2 But when we -- before we got the certified rolls, 3 there's an amount -- the way that the Appraisal District 4 figures this is they give us our values overall, with over-65 5 figured in. Then they make all these ag deductions and so 6 forth. Then they give us a bottom line, and then they 7 subtract out the value of the over-65. Then they also give 8 us the amount of money we will get for over-65. They have to 9 give us that, because it's based on when those -- that person 10 turns 65 years of age. When I got the certified roll, that 11 amount of tax revenue went up, and my value -- total overall 12 value went down, so it was obvious where it went. The -- you 13 know, it just flipped. It was in the value. But because 14 they declared they were over 65 as of January, any time 15 during that year, then it flips. And that's -- that -- you 16 know, it's been almost a million dollars a year. Started out 17 a million, two -- I mean a million; then it was a million, 18 two. I think I gave y'all that a couple years ago. It was 19 astronomical. We've lost $6 million. 20 COMMISSIONER BALDWIN: And at first we thought it 21 was going to turn around at 5 million in the beginning of 22 this whole thing. And we need -- we're throwing around the 23 words "over-65" pretty strong, and I think there's another 24 part of that exemption, and that's the disabled folks, and 25 seems like there was something else. So, let's don't throw 8-6-12 bwk 23 1 the whole rock at -- 2 MS. HARGIS: Veterans -- the veterans, that's a 3 small percentage. That's really a smaller percentage. 4 COMMISSIONER BALDWIN: I understand that. I 5 understand that. 6 MS. HARGIS: It's a smaller percentage. 7 COMMISSIONER BALDWIN: I'm trying to keep you out 8 of trouble. 9 MS. HARGIS: Okay. Well, I have been, you know. 10 COMMISSIONER BALDWIN: Well, I do, because you 11 represent us, okay? Let's just, you know, talk about the 12 whole exemption, not just the over-65 folks. 13 MS. HARGIS: Well, it's not a -- it's not something 14 that we -- we created. The State gave it to us, and -- and 15 had you not given it, I think we probably would have had the 16 election. It was in the city, and the people -- that's what 17 the people wanted. The problem is, it didn't self-correct. 18 I think that -- I wasn't here at the time, but my 19 recommendation to you would have been to probably adopt the 20 effective rate, which is probably 10 -- one-tenth of a penny 21 every year to keep up with some of that. But the economy's 22 also been a huge factor in this. You know, everybody's 23 stopped selling. I mean, because they can't sell, just like 24 the Judge said, so that's part of the problem. You know, 25 there are people who want to sell their homes that are over 8-6-12 bwk 24 1 65 right now, and they can't. I mean, our -- my neighborhood 2 is classic of that. We've got about five or six houses up 3 for sale that have gone on the market; they can't sell them 4 and they'll take them off, and then they'll put them back on. 5 So, you know, there -- but it -- in the overall scope of 6 things, we have to look at those exemptions as a whole that 7 -- that have reduced the overall roll, and that's what's 8 happened. You've actually reduced the roll where the 9 rollback rate is actually going to end up being higher than 10 the effective rate. And that happens. I think I told y'all 11 that two or three years ago, that that could happen, and this 12 is one of those years when your value went stagnant and your 13 value actually came down. So, it's not detrimental. We can 14 get through it. We just need to be aware of it and -- and 15 make some changes and go forward. 16 COMMISSIONER BALDWIN: Make some changes? What do 17 you mean by that? 18 MS. HARGIS: Well, we tighten our belt and -- and 19 then we look at, you know, doing -- perhaps levying a 20 different -- I'm not saying we go up on taxes, but perhaps 21 using the effective rate, which is the same dollar, which 22 would provide us the same dollar as we got last year. And I 23 think it's not even .25 tenths of a -- of a penny. I mean, 24 it's not even a penny. And that would keep us level. And I 25 think that's what we have to look at for the future. I mean, 8-6-12 bwk 25 1 I know we don't like to compare ourselves, but we do in 2 salary studies and things of that nature. One of the things 3 that has kept Gillespie County ahead and their fund balance 4 so large is they've always used the effective rate. The 5 effective rate is the same tax rate that it would take to 6 bring in the same dollar as you did last year. That way you 7 stay level. It's kind of like cost-of-living. You're 8 basically absorbing that cost-of-living in that, and it's -- 9 and that's kind of where you're at. And, you know, it may be 10 10 -- $10 a homeowner, but at the same token, it keeps the 11 county solid. It keeps us in a good financial position, and 12 I think that's one of the things that you're responsible for, 13 is you don't want to see your -- you have to run; you have to 14 have your services. And I think we've done an exceptional 15 job in the last three years of bringing down the cost. 16 COMMISSIONER OVERBY: Jeannie, is there any way out 17 of these numbers here that you could extrapolate what has 18 been lost in business revenue and new revenue from commercial 19 revenue that's come in as well? I'm just curious. 20 COMMISSIONER BALDWIN: That's a good point. 21 COMMISSIONER OVERBY: I'd like to know what is the 22 community losing in business development property taxes, and 23 what new revenue have they created in the last 12 months? 24 MS. HARGIS: That I have to get as a separate -- 25 actually, -- 8-6-12 bwk 26 1 COMMISSIONER OVERBY: I'd like to have that. 2 MS. HARGIS: -- Diane would have to get a separate 3 document for that. 4 COMMISSIONER BALDWIN: I bet you could run those 5 numbers better than anybody. 6 COMMISSIONER OVERBY: Well, I mean, to me, let's 7 see what new growth we've gotten in commercial business 8 compared to what we've lost. I'd like to know what that 9 number is. 10 MS. HARGIS: I think we've had some replacement. 11 COMMISSIONER OVERBY: Yeah. 12 COMMISSIONER BALDWIN: Good idea. 13 COMMISSIONER OEHLER: Fox Tank is probably the 14 biggest -- 15 COMMISSIONER OVERBY: Well, you haven't started 16 seeing the sales tax revenue or any of that come in yet. 17 That's not even on this year. 18 COMMISSIONER OEHLER: No, but I understand that's 19 coming. But the thing is, did it -- did it surpass what 20 we've lost in other businesses? 21 JUDGE TINLEY: Well, it's going to make up a 22 portion of it. 23 COMMISSIONER OVERBY: Next year it will. 24 JUDGE TINLEY: And the key is, that's how you 25 overcome your continued loss under this over-65/veterans/ag 8-6-12 bwk 27 1 exemptions, other areas where you're losing on ad valorem tax 2 on properties. 3 COMMISSIONER OEHLER: No question about it. 4 JUDGE TINLEY: Economic development is -- is how 5 you pull things back into balance and you're able to soften 6 what the individual homeowner has to absorb on their -- on 7 their home. That's the key. 8 COMMISSIONER OEHLER: Yeah, no doubt about it. I 9 just hope that it continues to do well. 10 COMMISSIONER OVERBY: A lot more. 11 COMMISSIONER OEHLER: Yeah, and more -- more come. 12 JUDGE TINLEY: Yeah. Anything more on that tax 13 rate? Okay. Let's go to the rest of it. What I have done 14 is I have -- I've got a cut sheet, as it were, -- 15 COMMISSIONER BALDWIN: Thank you. 16 JUDGE TINLEY: -- which kind of encapsulates all 17 the rest of it. 18 COMMISSIONER LETZ: Judge, you must have read my 19 mind. 20 JUDGE TINLEY: What's that? 21 COMMISSIONER LETZ: I was going to ask for one of 22 those. 23 JUDGE TINLEY: Okay. Well, that's why I got them. 24 Okay, she's got one. Okay. What I've done is -- and this is 25 my recommendation on these items. I've had extensive 8-6-12 bwk 28 1 discussions with the Auditor, with H.R., and I've reviewed -- 2 if you'll recall, there was a survey about department heads 3 and so forth. Looked at other salary surveys, information 4 that was made available to me, as well as looked at the 5 personnel requests from various departments. This kind of 6 encapsulated those personnel requests, salary increases, 7 department head merit increases, extension of step and grade, 8 and -- and then some -- an issue of restructuring. Probably 9 the most noncontroversial is the extending the step and grade 10 three additional steps so that we don't penalize people for 11 having too much experience that we desperately need. The 12 more experience we have from our people, probably the more 13 valuable they are. And, of course, it proposes that we 14 increase those from 12 to 15. There are just a few employees 15 affected, but they're longtime veteran employees that 16 shouldn't be penalized because they've been with us a long 17 time. 18 COMMISSIONER BALDWIN: So, you're saying that 19 having long-term employees, which some are -- well, not 20 elected officials, but just that theory of having a long-term 21 employee is a good thing? 22 JUDGE TINLEY: I think it is. 23 COMMISSIONER BALDWIN: I do too, but there's some 24 folks in town don't think that way. Isn't that interesting? 25 That is really interesting. 8-6-12 bwk 29 1 JUDGE TINLEY: Well, anybody that can debunk the -- 2 the theory that the longer the employee is with you, the more 3 experience they have, the more skills they've gained in their 4 job, and the greater their capability and efficiency in being 5 able to perform their job, I'd like to see that business 6 management theory, 'cause it doesn't square with anything I 7 learned. 8 COMMISSIONER BALDWIN: Yeah. Daddy always told me 9 that. 10 JUDGE TINLEY: With regard to the department heads, 11 if you'll look on Page 2, there are different suggested, 12 recommended raises for some of those. They're pretty modest. 13 I -- I think in reviewing the performance level and the 14 requirements of each of those jobs, and looking at the study 15 information that was received from the study that Ms. Lantz 16 did, that she was asked to do about comparable counties, I 17 think those are within that. Now, you will note there is one 18 significant change on restructuring, and that in large 19 measure is based upon the -- the study that Ms. Lantz did. 20 Every single jurisdiction that was included within the 21 city -- the study had Animal Control under the jurisdiction 22 of the Sheriff's Department, and this proposes that that 23 occur. Now, the -- the salary would require some sort of 24 adjustment, depending upon how the Sheriff brings that in. 25 Normally, they're brought in, according to the study, at the 8-6-12 bwk 30 1 grade of sergeant. And if that's the case, why, the salaries 2 indicated there are based upon a 25.1. I -- I don't believe 3 that we're the only smart jurisdiction and all the rest of 4 them are not. I think there are some advantages to be gained 5 to placing the Animal Control under the Sheriff's Department. 6 You've got enforcement issues that -- that meld well into 7 that department. So, those are my recommendations with 8 regard to the salaries of those department heads and the 9 restructuring of Animal Control. 10 COMMISSIONER BALDWIN: Judge, could I ask you, do 11 you see any dollar savings? 12 JUDGE TINLEY: Not at this point in time, no. Not 13 at this point in time. Now, down the road, after that's 14 absorbed, there may be some efficiencies to be gained with 15 the -- with that. I don't know. Time will tell. 16 COMMISSIONER BALDWIN: Number of staff or something 17 like that? 18 JUDGE TINLEY: Yeah. Yeah. 19 COMMISSIONER BALDWIN: But what -- so your 20 recommendation here, to make sure I'm understanding what I'm 21 seeing, is that there's an increase in the Animal Control 22 Director salary, plus shifting it to -- so it's certainly not 23 a savings; it's an increase, regardless of where they end up. 24 JUDGE TINLEY: Well, even -- even if it remains 25 where it is, there is that modest increase. 8-6-12 bwk 31 1 COMMISSIONER OVERBY: One percent. 2 JUDGE TINLEY: But if -- if it is moved over under 3 the Sheriff and is brought in comparable to a sergeant under 4 his structure, -- 5 COMMISSIONER BALDWIN: That's where I'm going. 6 JUDGE TINLEY: -- that would be a -- a slightly 7 larger increase. Yeah, that's correct. 8 COMMISSIONER OEHLER: I don't see any point fixing 9 something that's not broke. We have a model Animal Control 10 agency, and our Sheriff and our Animal Control works 11 hand-in-hand on enforcement. If they have warrants and stuff 12 to be served, they -- the Sheriff does that, and the Animal 13 Control is there. I don't see any point -- it's not going to 14 save any money, and our Animal Control has been recognized as 15 one of the top in the state, so I don't think it's going to 16 improve putting it under the Sheriff. I don't see the 17 benefit. That's it. 18 COMMISSIONER LETZ: I guess I have a question on 19 long-term. 20 JUDGE TINLEY: Okay. 21 COMMISSIONER LETZ: If the reason to do it is what 22 you just said, is kind of, I guess, a -- there's a problem 23 having -- I forgot the words you used. Basically, have law 24 enforcement involved in Animal Control. But if you put the 25 -- do that, you have to make the Animal Control officers 8-6-12 bwk 32 1 deputies. I mean, to have them have any kind of law 2 enforcement ability more than they have right now, they've 3 got to become deputies, and then you're going to -- I mean, 4 to make it different from what it is right now. I mean, 5 right now you have Animal Control officers going out there. 6 If that person is not a deputy, they have no law enforcement 7 capabilities. So, the only way you're going to get law 8 enforcement capabilities is to make them deputies long-term, 9 and trained as deputies, and then isn't that going to be an 10 increase in costs down the road? Or am I -- 11 COMMISSIONER OEHLER: Also going to require some 12 certifications that are required to be Animal Control people. 13 JUDGE TINLEY: Not necessarily. You can have 14 civilian operation within that department and still have it 15 under the -- under the Sheriff, but you've got then a more 16 seamless coordination with the S.O. on the -- on the 17 enforcement aspects. That's my way of thinking. 18 COMMISSIONER LETZ: I don't -- I'd be interested to 19 look at it more closely. I'm not ready to make a change 20 right now, because all it seems that we're doing to me is 21 setting Rusty up to want a raise for having more 22 responsibility. (Laughter.) 23 SHERIFF HIERHOLZER: That's one point. 24 COMMISSIONER BALDWIN: But that is true. 25 SHERIFF HIERHOLZER: A major point, though, is a 8-6-12 bwk 33 1 lot of agencies, Judge, also have Environmental Health under 2 the Sheriff's Office. Okay? Number one, we may not be like 3 every other county in the state, but if you look at our 4 Environmental Health department and you look at our Animal 5 Control department, because they're -- they are separate -- 6 totally separate functions. Sheriff's Office is a law 7 enforcement agency, and Animal Control and Environmental 8 Health are not primarily a law enforcement agency. And I 9 think that's why both of those agencies in our county are 10 exemplary under the work they do. If you put them under a 11 law enforcement agency -- I've talked to other sheriffs 12 across the state about this. They wish they didn't have 13 animal control, because they are tying up good personnel over 14 animal control issues. We're not dog catchers. Sorry. And 15 no -- no, I'm not trying to demean Janie. 16 MS. WHITT: I understand. 17 SHERIFF HIERHOLZER: But we're a law enforcement 18 agency. We work great hand-in-hand. Your comment about 19 making it seamless, I wish you could get out and see what we 20 do. It is seamless, okay? We work fabulously together with 21 all those aspects. Whether it's over dumping issues with 22 Environmental Health, or whether it's over animal issues, 23 we're there to back both of those different entities up. And 24 it will cost you a whole lot more, because if it's going to 25 be under law enforcement, then those officers are going to be 8-6-12 bwk 34 1 certified officers, certified deputies. It's the only thing 2 that would make sense. That's 900 hours of training they 3 don't have, okay, to get that, alone. Plus I have asked for 4 a new person in this budget. I asked for three, technically. 5 You know, one, I let y'all and the District Judge fight it 6 out. And I forget what the other one was, but the last 7 one -- the main one I'm concerned about is an administrative 8 lieutenant in my department, and we'll get to that. But if 9 you throw Animal Control -- I need the administrative 10 lieutenant because of all the duties we're doing now that I'm 11 having to have officers do. 12 You want to throw Animal Control over there, and 13 now I've got to have somebody that's totally over that too. 14 I don't see how it's ever going to save this county a dime. 15 And I don't see that there is any way that it can improve the 16 efficiency of what those -- both of those entities do. I 17 think they do a fabulous job. They've both been 18 recognized -- state, nationally -- on the job they do, and 19 we're there to back them up and help them and assist them in 20 any way we can, and they know that. But it leaves them to do 21 their jobs. O.S.S. stuff is not my job, and I don't want it. 22 Ray does a fabulous job at doing that, okay? But he can have 23 it, you know. And I don't think he wants me trying to 24 explain it to him; it wouldn't be right. You know, my idea 25 of euthanizing animals wouldn't be what Janie does. I'm 8-6-12 bwk 35 1 sorry. That's not law enforcement. I think this county is 2 exemplary in the way they have it set up. Yes, we're 3 different, but we're one of the best counties in the state 4 when it comes to all three of those functions. And I'm like 5 Bruce; don't mess with something that ain't broke. 6 MR. GARCIA: I think one of the things, to echo off 7 of Rusty's comments there, is that, again, for Animal 8 Control, just a part of this is that the way we work 9 together, when we're -- when the Environmental Health guys 10 are out there, they're taking all the illegal dumping calls. 11 They're taking all the public nuisance calls, which frees his 12 guys up to go fight crime. We take care of that. The same 13 thing with Animal Control. The same situation again, is all 14 the calls. Okay, based on just my calls alone, right now I'm 15 at 329 to 340 complaints right now, and we're only in -- in 16 the first part of August here. Okay. I average 500 17 complaints a year. Okay, that's 1,000 and 1,100 follow-ups 18 for each deputy. Just a deputy. I'm not talking O.S.S.F., 19 okay? If you take that volume and you apply it to what 20 Janie's calls are, again, you're freeing up these guys to do 21 their job, his deputies. And that's just a small part of it. 22 Again, you're talking about more manpower there. Again, 23 we -- whenever there's a call out there, our two deputies 24 that go out there, James and Reagan, will take all the 25 illegal dumping calls and anything else to free up their guys 8-6-12 bwk 36 1 so they can get on, or we'll -- just give us the cases; we'll 2 take care of them. Again, same thing with Janie. When 3 they're out there, we all work together in that aspect, 4 again, and it is -- that is seamless. And that is, again, a 5 testament to how well we have our departments running in this 6 county and how effective we are at what we do. 7 SHERIFF HIERHOLZER: And the thing is, if we want 8 -- you know, if you seriously want to do that, I'm not saying 9 you can't. I have five officers -- going along with what Ray 10 says, five officers, including a sergeant, patrol sergeant on 11 duty, for 1,100 square miles at a time. That's it. That's 12 if it's a perfect day. And if you put all the rest of that 13 underneath the Sheriff's Office, there's going to have to be 14 a lot more officers on duty at a time. I don't see it in any 15 way, shape, or form saving this county one dime by doing what 16 you're considering, Judge. I just don't see it happening. 17 JUDGE TINLEY: Well, that's my recommendation, 18 gentlemen. Go to the last page. That includes those new 19 positions and adjustments -- or some of them. They're not 20 all included, obviously. And I think they're detailed on the 21 first page there towards the bottom section. That will tell 22 you in a narrative form what's there. What I can tell you 23 is -- is that all of these matters that are shown by this 24 particular document are within the matters that are in the -- 25 already in the budget, plus you add these, and are all within 8-6-12 bwk 37 1 the current effective tax rate. If something else is going 2 to be added, why, then that might become an issue. 3 COMMISSIONER LETZ: Judge, sorry, I was half 4 reading and listening. So, all of these are in your 5 recommended budget on the -- in the computer? 6 JUDGE TINLEY: No. Oh, have they already been 7 added? 8 MS. HARGIS: Mm-hmm. 9 JUDGE TINLEY: Okay, they've already been added, 10 and they're within the current effective tax rate. 11 COMMISSIONER LETZ: What's this -- do you -- do you 12 know that little one-page summary sheet you prepare every 13 year? Do you have one for today? 14 (Ms. Hargis nodded.) 15 COMMISSIONER BALDWIN: Thank you. 16 JUDGE TINLEY: Oh, yeah. Okay. 17 MS. HARGIS: I don't have enough for everybody. 18 Y'all can share it. It's a draft, still a draft. 19 COMMISSIONER BALDWIN: Let me ask a question on 20 this -- 21 JUDGE TINLEY: Okay. 22 COMMISSIONER BALDWIN: -- schedule right here. I'm 23 not sure what I'm seeing, really. The very first one, Tax 24 Assessor. 25 JUDGE TINLEY: Mm-hmm. 8-6-12 bwk 38 1 COMMISSIONER BALDWIN: Now, we're requesting one 2 new employee there at a 19.1? Is that what that's saying? 3 JUDGE TINLEY: That's correct. 4 COMMISSIONER BALDWIN: Okay. And that -- and that 5 is an addition of a little over 50,000 for that one salary, 6 right? 7 JUDGE TINLEY: Mm-hmm. 8 COMMISSIONER BALDWIN: Okay. Now, Maintenance is 9 only asking for one. 10 JUDGE TINLEY: No, they asked for three, I think. 11 COMMISSIONER BALDWIN: Okay, I can't -- I don't see 12 that. Help me understand. 13 JUDGE TINLEY: Well, what is shown there is what's 14 being recommended, and one is being recommended. One new 15 one. 16 COMMISSIONER BALDWIN: Oh. Oh, he asked for three, 17 but you're only giving him one? 18 JUDGE TINLEY: Yeah. 19 COMMISSIONER BALDWIN: I see what you're saying. 20 JUDGE TINLEY: Yeah. 21 COMMISSIONER BALDWIN: Plus two and a half for -- 22 percent increase for everybody, for all -- 23 JUDGE TINLEY: That's correct. 24 COMMISSIONER BALDWIN: -- all the Maintenance 25 employees. 8-6-12 bwk 39 1 JUDGE TINLEY: Yeah. 2 COMMISSIONER BALDWIN: Now, if we go nuts and give 3 a 3 percent across-the-board to every employee, these 4 particular employees will get 3 percent plus the two and a 5 half? 6 JUDGE TINLEY: Yes, the three would come on top of 7 that. That's correct. It would not be in lieu of. 8 COMMISSIONER BALDWIN: Okay. 9 COMMISSIONER OEHLER: Why -- why would you propose 10 that? You gave 4 percent last year. Why would you propose 11 two and a half on Maintenance, plus -- is there a 3 percent 12 figured into this number too? 13 MS. HARGIS: Yes. 14 COMMISSIONER OEHLER: For everybody? 15 MS. HARGIS: Yes. 16 COMMISSIONER OEHLER: Huh? 17 MS. HARGIS: Yes. 18 COMMISSIONER OEHLER: There is? 19 MS. HARGIS: Yes. 20 COMMISSIONER OEHLER: I don't agree with that. 21 COMMISSIONER BALDWIN: And so you go down to the 22 County Clerk, and is that one or two positions? 23 JUDGE TINLEY: One. 24 COMMISSIONER BALDWIN: Okay. Two in the I.T., 25 though. 8-6-12 bwk 40 1 MS. HARGIS: No. 2 JUDGE TINLEY: No. No, those are just -- those are 3 just increases to the I.T. specialists. 4 COMMISSIONER BALDWIN: And the Sheriff has one. I 5 can see that pretty clear. 6 JUDGE TINLEY: Mm-hmm. 7 COMMISSIONER BALDWIN: Okay. And then that bottom 8 box is the -- 9 JUDGE TINLEY: Increases of the department heads, 10 yeah. 11 COMMISSIONER BALDWIN: Okay. 12 COMMISSIONER LETZ: So, you're adding three 13 employees total? 14 COMMISSIONER OVERBY: Correct. 15 COMMISSIONER LETZ: One in Maintenance, one in 16 County Clerk's, and one in Sheriff. 17 MS. HARGIS: And one in Diane's. 18 COMMISSIONER LETZ: That's on the first page, 19 though. 20 JUDGE TINLEY: Actually, it's four. 21 COMMISSIONER OVERBY: So, four total is requested. 22 COMMISSIONER LETZ: Oh, Tax Assessor, I'm sorry. 23 JUDGE TINLEY: Yeah. Yeah, four. 24 COMMISSIONER LETZ: Okay. Is that it, 25 Commissioner? 8-6-12 bwk 41 1 COMMISSIONER BALDWIN: Yeah, mm-hmm. I just wanted 2 to make sure how to read this. 3 COMMISSIONER LETZ: On this sheet, the last column, 4 I think there's a typo. That should read 9/2013, I believe. 5 MS. HARGIS: No, that's today. 9/29 is when we 6 present this. 7 JUDGE TINLEY: No. No, estimated ending balance at 8 the end of the fiscal year. 9 MS. HARGIS: No. 10 COMMISSIONER LETZ: No, but the first column is 11 estimated ending balance for the year. The last column 12 should be estimated ending balance for next year, so that 13 should be 2013. 14 JUDGE TINLEY: Sure. 15 COMMISSIONER LETZ: And the reason -- that shows to 16 me almost a $500,000 reduction in reserves, total. I mean, 17 for estimated four -- bottom line, at 4.2 million estimated 18 balance at the end of this year, and we go to 3.7. That's -- 19 big numbers -- $500,000 reduction. 20 MS. HARGIS: That's for -- that's because of debt 21 service. 22 COMMISSIONER OEHLER: Because of what? 23 COMMISSIONER LETZ: Debt service. 24 COMMISSIONER OVERBY: Our debt service structure. 25 COMMISSIONER LETZ: But what are we doing on the 8-6-12 bwk 42 1 general fund? We're going -- well, that's going to be debt 2 service, then, too. What are we doing to reserves is what I 3 want to know. 4 COMMISSIONER OVERBY: Right. 5 COMMISSIONER LETZ: From where we are now, or the 6 end of -- projected end of September this year, what is the 7 budget going to do to reserves for the end of next year? 8 Projected? 9 MS. HARGIS: Well, you know, basically what I'm 10 trying do is, this is what our reserves -- I estimate our 11 reserves to be, and I'm very cautious on those. Last year we 12 ended up with a little more than -- than I anticipated 13 because we -- we didn't spend all the money. But at this 14 stage of the game, I have to assume we spend everything we 15 budgeted. 16 COMMISSIONER LETZ: Correct. 17 MS. HARGIS: So that's how much I think we'll end 18 with. And then -- then you just, you know, basically add and 19 subtract across to get what we -- so if we end up with more, 20 which we did last year, then our reserves will be higher. We 21 probably have a -- a considerable amount of flexibility in 22 our health insurance now, because we're -- we have a fixed 23 premium. We have employees come; we have employees go, and 24 so, therefore, usually we have probably anywhere from 150,000 25 to 200,000 there that will be in reserve. Juvenile Probation 8-6-12 bwk 43 1 is running about 250,000 to 350,000 less in his budget, but 2 those are things I cannot estimate. It's too far out. 3 Because right now, I'm paying July bills, so I have 90 more 4 days to think about. So, I have to be conservative about 5 this beginning fund balance. 6 JUDGE TINLEY: This time last year, when you were 7 figuring the reserve on the general fund, what was that 8 number? 9 MS. HARGIS: That number was a million, eight. 10 JUDGE TINLEY: In terms of percentage, it was 11 somewhat below the 17.57 percent, if I recall correctly. 12 MS. HARGIS: Right. It was around 13. 13 JUDGE TINLEY: Yeah. 14 COMMISSIONER LETZ: 12, 13. 15 MS. HARGIS: So we gained -- 16 JUDGE TINLEY: Significant increase. 17 MS. HARGIS: -- over last year. 18 JUDGE TINLEY: Based on the methodology that you 19 used, but that's subject to variation, because it's based 20 upon expenditures of all funds within these authorized 21 budgets. 22 MS. HARGIS: That's correct. 23 JUDGE TINLEY: Yeah. 24 MS. HARGIS: And generally last year, as you 25 recall, as we got closer to it, we spent about a million less 8-6-12 bwk 44 1 than we had -- than we had budgeted. And it -- those are in 2 areas that are, you know, highly volatile. 3 COMMISSIONER LETZ: Right. 4 MS. HARGIS: So I can't really -- like, if the 5 juvenile picks up and we have to pay housing, that money will 6 go pretty quickly. He's been able to use grant funds. Those 7 grant funds have gone -- we don't know what they're going to 8 be for next year; they could be a little less, could be a 9 little bit more. But this is -- and it's also based on cash, 10 not so much what we might get or what we have. It's -- this 11 is what I think we're going to have in the bank. And this is 12 important, 'cause we have to run on cash, not on numbers we 13 don't have. And -- any my predecessor had also plugged in 14 numbers that weren't there, and I'm not going to do that. 15 COMMISSIONER LETZ: Right. I guess -- let me ask 16 my question maybe a different way. The first column under 17 estimated balance is 4,254,476. Is that a -- from what you 18 know right now, an accurate estimate? Or does that have a 19 lot of fluff in it still because we don't know exactly where 20 we're going to spend money? 'Cause we still got basically 21 four months from an accounting standpoint, four months -- 22 MS. HARGIS: It's a very conservative number. What 23 you want to look at there -- the difference that you're 24 looking at, if you look at the 2012 certificate of 25 obligation, and you see that 276 number, 276,735, -- 8-6-12 bwk 45 1 COMMISSIONER LETZ: Mm-hmm. 2 MS. HARGIS: -- that's the number we borrowed, so 3 that is skewing what you're looking at on the other side. 4 COMMISSIONER LETZ: Okay. I still want to look 5 at -- I want you to -- maybe you don't have it on this 6 worksheet. I want to know where we are from a reserve 7 standpoint, best projection right now, year-end. Take out 8 the capital, the money we borrow and stuff, the cash flow. I 9 want to know -- basically, I'm trying to figure out where we 10 are. Will we have to do a deficit budget next year or not? 11 I want to know what. 12 MS. HARGIS: These numbers are solid. 13 COMMISSIONER LETZ: Right. But as I look at this, 14 though, I can't figure that out, because I see -- 15 MS. HARGIS: If you got $3,376,000 in the bank 16 today, as of 9/30 of 2012, -- 17 COMMISSIONER LETZ: Right. 18 MS. HARGIS: -- put in the tax revenue and the 19 estimated revenue that we have that's been very 20 conservatively estimated, -- 21 COMMISSIONER LETZ: Okay. 22 MS. HARGIS: -- you take the expenses that are in 23 there today that have been approved by the budget officer, 24 that leaves us with that amount. The only difference will 25 come is if we don't spend some of the items between now and 8-6-12 bwk 46 1 the end of the -- of September that I can't -- 2 COMMISSIONER LETZ: Right. 3 MS. HARGIS: -- extrapolate. 4 COMMISSIONER LETZ: I understand that. But I look 5 at this -- so we're almost -- we're slightly lower -- $20,000 6 lower projected 2013 than this year, so basically straight or 7 flat. What is that reserve -- I remember at length we talked 8 about we need to have 20 percent reserves. 9 MS. HARGIS: Your -- 10 COMMISSIONER LETZ: What does this give us? 11 COMMISSIONER OVERBY: 25 percent. 12 COMMISSIONER LETZ: 25 was the state 13 recommendation. I don't know if our management plan calls 14 for 20 or 25 percent, but, you know, we've been happy if 15 we've been near 20 to 25 percent. We've been unhappy when 16 we've gone down to 12 percent. I want to know where we are 17 with these numbers. 18 MS. HARGIS: You have the percentage beside the 19 general fund. 20 COMMISSIONER LETZ: So that's 17.5 percent. That's 21 what this number represents? 22 (Ms. Hargis nodded.) 23 COMMISSIONER LETZ: Okay. 24 JUDGE TINLEY: Which is about a 4 percent increase 25 from where we were for this time last year, based upon -- 8-6-12 bwk 47 1 MS. HARGIS: We picked -- 2 JUDGE TINLEY: -- the same methodology. 3 COMMISSIONER LETZ: Right. Okay. 4 COMMISSIONER OEHLER: Last year, what we -- what we 5 did, as far as I remember, again, is that we projected 6 everything out where we were able to give 4 percent to 7 employees. We also were to put about 600,000 in reserves to 8 build it back up without increasing taxes, without increasing 9 the tax rate, is what I remember that we did. And so I guess 10 the other thing is, is that 600,000 going to go into reserve 11 that we tried to plan for in last year's budget? 12 MS. HARGIS: It's in there. It's in there. 13 COMMISSIONER LETZ: It went up 4 and a half 14 percent. Four and a half percent, which is probably pretty 15 close. 16 COMMISSIONER OEHLER: Pretty close to it. I just 17 want to be sure that, you know, the public knows that that's 18 what the intent was, and hopefully the plan worked. 19 MS. HARGIS: One of our biggest expenses that we 20 had in those two prior years, as you recall, was going from 21 being partially self-insured in our insurance plan, and now 22 being 100 percent insured. That makes a huge difference. I 23 would estimate that we probably have another 500,000 easily 24 to put in this fund balance, but I don't like to do that in 25 the budget process. 8-6-12 bwk 48 1 COMMISSIONER LETZ: We're still pretty -- we have a 2 long way to go. 3 MS. HARGIS: Yeah. And, remember, I change this as 4 we move; I try to up this as much as I can. 5 COMMISSIONER LETZ: I noticed on -- I don't know if 6 it's on this sheet. On the individual sheet, you show about 7 a $500,000 increase in sales tax revenue. 8 MS. HARGIS: Right. 9 COMMISSIONER LETZ: Is that -- 10 MS. HARGIS: That's good. 11 COMMISSIONER LETZ: That's a good number, you 12 think? 13 MS. HARGIS: We've done -- we've done an 14 extrapolation. We've looked at what we're getting. We're 15 continuing to get a pretty strong 5 percent, I mean, every 16 month, and so we're actually, you know, over the 2008 -- 17 we're actually running 2008, 2009 numbers again. So, that's 18 been pretty steady, you know, since December. 19 COMMISSIONER LETZ: Is that -- can you include the 20 Fox Tank numbers in that? 21 MS. HARGIS: No. 22 COMMISSIONER LETZ: No? 23 COMMISSIONER OVERBY: Not until the end of next 24 year. 25 COMMISSIONER LETZ: This is a projection for next 8-6-12 bwk 49 1 year. 2 COMMISSIONER OVERBY: Could be high. 3 COMMISSIONER LETZ: I mean, so -- so there's a -- 4 even if sales tax revenue slows back down, Fox Tank will help 5 offset that, 'cause that's not included. 6 JUDGE TINLEY: The first -- what, 75,000 of that 7 is -- 8 COMMISSIONER OVERBY: Property -- yeah, kind of 9 incentive. 10 JUDGE TINLEY: -- rebates? 11 COMMISSIONER OVERBY: 37,5 over two years. 12 Remember, right now none of your sales tax -- all that sales 13 tax right now, the point of sale is originating out of 14 Kendall County, and you won't start seeing that until after 15 the first year in Kerr County. 16 COMMISSIONER LETZ: I thought they closed that 17 facility down. 18 COMMISSIONER OVERBY: They're not closed; didn't 19 say closed. They're in transition. 20 JUDGE TINLEY: That's down in Comfort. You'd think 21 Letz would think that's a great deal, wouldn't you, Buster? 22 COMMISSIONER OVERBY: They may keep it there, too, 23 have all of them going. What it sounds like, they could be 24 busy enough where it may stay there. Who knows? You want to 25 get as much sales tax originating out of Kerr County as you 8-6-12 bwk 50 1 can. 2 COMMISSIONER LETZ: Yeah. I hate to bring this 3 item up, Judge, but -- 4 JUDGE TINLEY: Well, if it's not within what the 5 agenda says, don't. 6 COMMISSIONER LETZ: Well, I will probably get -- 7 you know, be criticized for it somewhere along the line. 8 JUDGE TINLEY: Okay. 9 COMMISSIONER LETZ: But last year, about probably 10 this same time of the year, there was a discussion about the 11 5 percent reduction that the employees -- or some elected 12 officials and all members of the Court took two years -- two 13 years ago. 14 COMMISSIONER OEHLER: We took two and a half. 15 COMMISSIONER LETZ: Two and a half percent off. 16 Well, whatever it was. That was restored to the other 17 elected officials and I believe yourself last year; however, 18 somehow the four Commissioners got left out of that increase, 19 even though it was all discussed at one time, I thought. Is 20 there anything to do -- going on with that? I mean, I almost 21 hate to bring it up, because it shows on paper as a salary 22 increase, when all we're trying to do is get back the amount 23 we gave up two years ago. Anyway, is that in here anywhere? 24 I'm still not real sure how that happened, that -- 25 JUDGE TINLEY: I think restoration's in there, 8-6-12 bwk 51 1 isn't it? 2 MS. HARGIS: No, I didn't -- I didn't -- we didn't 3 restore them back, but we can. I mean, it's not that big; 4 it's not that much money. We didn't discuss it. 5 COMMISSIONER LETZ: Anyway, I just am bringing it 6 up. I mean, you know, it's a -- I thought it was done last 7 year, but it wasn't, so I don't know if we want to do it this 8 year or not. 9 COMMISSIONER OEHLER: I thought it was to leave 10 everybody up -- there was one word that got left out of that 11 court order that said -- still said Commissioners Court. It 12 said Commissioners -- 13 COMMISSIONER LETZ: Right. 14 COMMISSIONER OEHLER: -- would not be restored. 15 COMMISSIONER LETZ: Right. 16 COMMISSIONER OEHLER: That left out one word. 17 SHERIFF HIERHOLZER: And, Bruce, real quick, you 18 had mentioned a while ago about all the employees getting 19 4 percent. Remember, last year it was all elected officials 20 that didn't get any. 21 COMMISSIONER OEHLER: Right, 'cause I meant all 22 the -- 23 SHERIFF HIERHOLZER: All the employees. I agree. 24 COMMISSIONER OEHLER: But all employees did get 25 4 percent. 8-6-12 bwk 52 1 SHERIFF HIERHOLZER: Because we're going to go back 2 to that flip-flop if we're not careful, where we're going to 3 have employees making more than elected officials, 'cause the 4 elected officials have been left out. 5 JUDGE TINLEY: Are we talking about the 5,000 6 again? 7 SHERIFF HIERHOLZER: I'm not -- I'm just saying 8 we're going to go back to that flip-flop. I've had that 9 discussion too many years in a row, Judge. 10 COMMISSIONER LETZ: And, Judge, before I forget, 11 just to get it on the record, I know that the -- the J.P.'s 12 came forward, I don't know, sometime -- one of these budget 13 workshops, and requested a travel allowance. And while I'm 14 not in favor of a travel allowance for the J.P.'s, I visited 15 with J.P. 3 and discussed that, this whole issue some, and I 16 think an option or a solution might be to give them a vehicle 17 that would be on rotation for whoever -- whichever J.P. is on 18 call, 'cause when they're on call, they tend to have the 19 majority of their mileage. That we have a, you know, vehicle 20 available to them. I'm not sure if we have a vehicle, you 21 know, one that's currently in our fleet of vehicles that they 22 could be -- that could be used, or if one should be 23 purchased, but I think that is an option that I would not be 24 opposed to. 25 COMMISSIONER BALDWIN: I agree with you, actually. 8-6-12 bwk 53 1 JUDGE TINLEY: Buster, did we ever fix the court 2 order on the $5,000 gap between the Sheriff and the Chief 3 Deputy? 4 COMMISSIONER BALDWIN: Yeah. We just agreed that 5 we weren't going to fool with it any more, regardless of what 6 happened with it. 7 JUDGE TINLEY: Did we actually rescind the order? 8 COMMISSIONER BALDWIN: I don't know if we have or 9 not, but it didn't matter; we're just not going to do it. 10 JUDGE TINLEY: Okay. (Laughter.) 11 COMMISSIONER LETZ: So, anyway -- 12 JUDGE TINLEY: Good luck trying to make it work, 13 huh? 14 COMMISSIONER BALDWIN: Yeah. 15 COMMISSIONER LETZ: I don't know. Is -- I don't 16 know who keeps track of vehicles. Is there a vehicle that is 17 not particularly used that much? If not -- and I don't know 18 if we, you know -- 19 COMMISSIONER BALDWIN: We do. We have that old 20 Jeep. 21 MS. HARGIS: They can't drive that. 22 COMMISSIONER BALDWIN: Two old Jeeps. 23 COMMISSIONER LETZ: Two vehicles. 24 COMMISSIONER OEHLER: We have one that Gene turned 25 down when we got his, you know, one-ton -- 8-6-12 bwk 54 1 MS. HARGIS: He traded it in. 2 SHERIFF HIERHOLZER: It was traded in. 3 MS. HARGIS: It was traded in. 4 JUDGE TINLEY: Yeah, we don't have it. 5 MS. HARGIS: And it was having a lot of problems. 6 The Jeeps are not reliable to go more than to the bank and 7 back very much. 8 MS. WHITT: Jeannie, I do have a truck that y'all 9 might possibly be interested in. 10 COMMISSIONER LETZ: Well, I think it's something 11 worthwhile to look at. 12 COMMISSIONER BALDWIN: Sure. 13 COMMISSIONER LETZ: In here, whether -- you know, 14 and I don't think they need an Expedition, either. I mean, 15 just because we tend to have an awful lot of Expeditions, you 16 know. I mean -- 17 COMMISSIONER OVERBY: I think they're all spending 18 a lot more time out. I mean, there's obviously a lot of 19 traveling the week they're on, and it's good -- a good idea. 20 COMMISSIONER LETZ: So, I think that solves that 21 issue. And, you know, I don't know -- I'll toss it back to 22 the J.P.'s to figure out what they think they need, and then 23 we can decide that it's not going to be an Expedition. 24 (Laughter.) 25 JUDGE TINLEY: I see. Okay. 8-6-12 bwk 55 1 COMMISSIONER LETZ: I don't know what -- I mean, 2 I'm not sure -- you know, if they need something that's 3 off-road, so be it. I'm not sure what they actually need. 4 They know their -- 5 COMMISSIONER OEHLER: I would say they need a 6 pickup or something that had a little clearance, anyway, 7 because sometimes they go to these -- 8 COMMISSIONER LETZ: Go out on ranches. 9 COMMISSIONER OEHLER: -- unattended deaths and 10 things that they have to go and do, and I sure want them to 11 be able to get there. We're not talking about four-wheel 12 drive or, you know, something that's got a high ground 13 package or something on it. 14 COMMISSIONER LETZ: If it's a really bad situation. 15 COMMISSIONER OEHLER: Four-wheel drive vehicle. 16 SHERIFF HIERHOLZER: We've done that before. But I 17 would recommend a pickup or two-wheel drive vehicle, where 18 they can get to a lot of these. 19 COMMISSIONER LETZ: I don't know what stuff they 20 carry with them. I might go with a non-four-wheel drive. I 21 don't know what -- Explorer? Do they make those any more? 22 Something like that. I mean, anyway -- 23 COMMISSIONER OEHLER: Well, we're getting good 24 prices on vehicles now. I think that's -- you know, that 25 would be a -- a way for them to have less expense. And when 8-6-12 bwk 56 1 they're not on call, they could use their own vehicle. We 2 don't get one, period. We furnish our own. 3 COMMISSIONER OVERBY: Yeah. 4 COMMISSIONER LETZ: Okay. 5 JUDGE TINLEY: Okay, it is 10:30. We can either 6 wrap this up, or if -- if there's a bunch more to be talked 7 about under this particular agenda, why, we can recess. I 8 don't know if we've got anything additional that we want to 9 be jawing about under it. If we do, why, we can recess. 10 Otherwise, we can wrap it up. 11 COMMISSIONER LETZ: Judge, I don't think we need to 12 recess. The question is, is on going forward, you know, this 13 is pretty much -- with, you know, your plan, I kind of need 14 to look at it and think about it a little bit, look back at 15 all the numbers, now that I know what's in it. You know, I 16 think we need to have another -- either -- probably a 17 decision-making meeting, as opposed to just another workshop, 18 so we can start voting and moving down the road on some of 19 these issues. So, I'm just tossing it out to the Court. I 20 mean, I don't know what the schedule looks like. We can do 21 it on an afternoon of one of our regular scheduled meetings, 22 or -- 23 COMMISSIONER OEHLER: Next meeting. We have a 24 regular meeting Monday. 25 JUDGE TINLEY: Yeah, we could do it in connection 8-6-12 bwk 57 1 with a regular meeting. That may run us on into the 2 afternoon, but so be it. 3 COMMISSIONER OVERBY: That's fine. 4 COMMISSIONER LETZ: So, I mean, is that something 5 that people would like to do, or -- I'd like to get this 6 done. 7 COMMISSIONER OVERBY: Yeah. 8 COMMISSIONER LETZ: I see a lot of nods from, I 9 know, those that have to do the posting. 10 COMMISSIONER OEHLER: Well, one thing is, if 11 elected officials are included in those increases, you're 12 going to have to post notice and all that, have a public 13 hearing. 14 COMMISSIONER LETZ: Just add it to the agenda for 15 next Monday. 16 COMMISSIONER OEHLER: I think I'd really like to 17 see us get it done before the 1st of September pretty much, 18 if that's possible. If not, let's -- last year on the 28th 19 was a little -- 27th was a little late. 20 JUDGE TINLEY: We'll have to look at the -- at the 21 notice requirements on some of these, and we'll schedule it 22 to comply with those. Okay. 23 COMMISSIONER BALDWIN: So, next Monday afternoon? 24 JUDGE TINLEY: Well, we're going to be meeting next 25 Monday anyway. 8-6-12 bwk 58 1 COMMISSIONER OVERBY: Conclusion of the meeting. 2 JUDGE TINLEY: If the notice for aspects of that 3 requirement can be met, why, we can do that. Otherwise, 4 we'll have to put it as an action item either later in the 5 month or at a special meeting. But we got to check the 6 notice requirements and what's in there. 7 COMMISSIONER OEHLER: Is this budget -- has it been 8 filed with the clerk yet? 9 JUDGE TINLEY: It has not yet been filed, no. I 10 anticipate it will be filed this week, however. 11 COMMISSIONER BALDWIN: Judge, I want to bring up 12 something right quick, if I may, please. 13 JUDGE TINLEY: Okay. 14 COMMISSIONER BALDWIN: An article in today's 15 newspaper that is extremely important. It's about -- the 16 headline is, "Agencies invite public comment on wildlife 17 management." They're having a meeting this week -- this 18 Friday from 5:30 to 8:00 out at Schreiner University, and 19 it's the U.S. Fish and Wildlife Service, to present details 20 of a plan officials say could bring -- add protection to 21 endangered species in the area's valuable spring-fed 22 waterways, while helping the state avoid a potential lawsuit. 23 So, they want to -- I mean, to me, this is basically the same 24 issue we asked them -- we said no several times. 25 JUDGE TINLEY: Thanks, but no thanks. 8-6-12 bwk 59 1 COMMISSIONER BALDWIN: Yeah, and please don't come 2 back kind of thing. But here they are back doing exactly 3 what we've asked them not to. And they are -- they want to 4 protect and take over the Guadalupe River, basically, and 5 then teach us how to not sue them, is part of the deal. So, 6 I think it would be kind of an interesting meeting. It's a 7 Friday night. 8 COMMISSIONER LETZ: Where is it? 9 COMMISSIONER BALDWIN: Schreiner University, 10 Cailloux Center. 11 COMMISSIONER LETZ: Is that in today's paper? 12 COMMISSIONER BALDWIN: Yeah. 13 COMMISSIONER LETZ: Thank you for bringing that up. 14 COMMISSIONER BALDWIN: You're quite welcome. 15 Unbelievable. 16 COMMISSIONER LETZ: Well, you were successful last 17 time. Maybe we'll be successful again. 18 JUDGE TINLEY: I think it is -- they're going to 19 pitch till they win, I think is the name of it. 20 COMMISSIONER LETZ: Well, a change in Washington 21 would be a big help to -- 22 COMMISSIONER BALDWIN: Yeah, absolutely. These 23 words, "spring-fed waterways," holy smokes. They're talking 24 about the entire county, is what they're talking about. 25 JUDGE TINLEY: Yeah. 8-6-12 bwk 60 1 COMMISSIONER LETZ: It's clear they're talking 2 about the entire -- all the basins that come out of the hill 3 country, what they're talking about. 4 COMMISSIONER BALDWIN: Yeah, absolutely. 5 COMMISSIONER OEHLER: Just what we need. 6 JUDGE TINLEY: Yeah. Okay, we got anything else 7 for the workshop? We'll be adjourned. 8 (Commissioners Court workshop adjourned at 10:37 a.m.) 9 - - - - - - - - - - 10 11 STATE OF TEXAS | 12 COUNTY OF KERR | 13 The above and foregoing is a true and complete 14 transcription of my stenotype notes taken in my capacity as 15 official reporter for the Commissioners Court of Kerr County, 16 Texas, at the time and place heretofore set forth. 17 DATED at Kerrville, Texas, this 7th day of August, 2012. 18 19 JANNETT PIEPER, Kerr County Clerk 20 BY: _________________________________ Kathy Banik, Deputy County Clerk 21 Certified Shorthand Reporter 22 23 24 25 8-6-12 bwk