October 2011
Lake Travis
Economic Impact Report

FY10 Budget: Frequently Asked Questions

Travis County’s fiscal year 2010 (FY10) begins on October 1, 2009 and ends on September 30, 2010.  FY10 has not even started and we already are working on the next budget year, FY11.  The Auditor and Planning and Budget Offices caution that next fiscal year, FY11, is going to be much more challenging than the upcoming fiscal year, FY10.  Over the past decade, we have been able to factor in adding billions of dollars in new taxable value each year to the tax rolls.  That new value helps to spread the tax burden to more properties, distributing the costs to run a growing urban county with citizen needs for roads, law enforcement, and court systems.  But those days of an assumed rapidly expanding tax base are over…at least for the next several years.  Continued tight credit markets have slowed down or even stopped many planned projects, so that will have an impact on Travis County's tax base.  In the FY10 budget process, we had to deal with an uncertain economy. While we do not know the circumstances that we will be facing in FY11, it is likely that the same uncertainties will be there, perhaps at an even more troublesome level.  I'm prepared to meet that challenge and I look forward to checking back in with you in the months ahead on this important topic. 

I asked the County Auditor’s Office (CAO) and the Planning and Budget Office (PBO) to provide responses to some commonly asked questions about our budget. Provided here is an abbreviated version of my questions and their responses.  The unabridged version and graphics are here on the website.     

Many thanks,
Karen

Q: Where did the money for the Economic Downturn Reserve (EDR) come from?
A (PBO): Travis County has attempted in recent years to be more proactive in our planning processes for FY10 and future fiscal years.  As a result, the $4,950,000 EDR in the FY10 Preliminary Budget was funded from the fund balance in the General Fund which is generated from expenditure savings in departmental budgets and reserves. 

Q: What is the chance the EDR will be exhausted?
A (PBO): It is not anticipated that the EDR will be utilized in FY10.  It is anticipated that it may need to be utilized in FY11. 

Q: What were the major one-time unexpected expenses?           
A (PBO): We didn’t have any large unexpected one-time expenses.  The largest decline in revenue which was not totally expected was the significant drop in fines and fees and investment earnings which declined $10.4 million from FY09. 

Q: In what areas do you think Travis County could save more money?
A (PBO): More automation of manual procedures could definitely realize personnel savings.  More efficient air conditioning systems in older buildings could substantially reduce future utility costs.  In addition, Travis County is looking at alternative fuel sources for our vehicle fleet and exploring ways to reduce idle emissions in our patrol fleet. 

Q: Why is revenue down if home prices in the area are relatively stable?
A (CAO):  While we do spend a great deal of our time thinking about property taxes, not all County revenues come from taxes; and we estimate that some non-tax revenues (e.g. interest income and many fees) will not rebound in FY10.

Q: Were there any savings from decreased CPI?
A (PBO): We had substantial savings in projected fuel and utility costs due to the drop in the cost of oil.  FY09 reserves for these items assisted in funding the economic downturn reserve for FY2010.

Thanks to Rodney Rhoades, Executive Manager for PBO, and Susan Spataro, the County Auditor, for their contributions.  

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