FACT CHECK: Hays County & Citizens' Budget Project on county debt

Forty-two million dollars is a substantial revision of the county's reported debt when compared to the county revenue this year, which is projected to be about $81 million

Note: "Watch On Gov" Editor Lenee Lovejoy reports that she has received official county documents that verify that key numbers on the county debt were revised downward by over $40,000,000 just before last Tuesday's March 22 Budget Workshop. Additionally, the County Auditor's slide presentation during the Workshop did not disclose the fact that the County will operate at a deficit this fiscal year and is taking money from reserves to cover the gap.

Send your comments and news tips to roundup.editor@gmail.com, to Ms. Lovejoy at

♫

leneel@centurytel.net, to County Auditor Bill Herzog at bherzog@co.hays.tx.us or click on the "comments" button at the bottom of the story

By Lenee Lovejoy
Special to the RoundUp

When asked at the Budget Workshop if the county's regular operating expenses plus debt payment would exceed revenues this year, County Auditor Bill Herzog appeared to have difficulty answering the question. This, combined with what appears to be a public attempt by County Judge Bert Cobb to discredit individuals who are speaking out about the county's debt, give the appearance that some members of our county government may be trying to deceive the public about the true state of our county's financial health.

Case in point: Recent articles published in the Dripping Springs, Wimberley and Kyle/Buda papers quote Judge Cobb as saying, “We have spent hours explaining to him the budget, and he still misrepresents the budget.”

Judge Cobb was referring to Sam Brannon, leader of the Hays Citizens’ Budget Project. Has Sam Brannon misrepresented the county financial data, as Judge Cobb has claimed? What is the true health of the Hays County finances? How can we tell? We tell by reviewing information in official county documents.

Mr. Brannon had stated that Hays County debt as of last October was about $258 million and that it was projected to reach nearly $400,000,000 by the end of the current fiscal year, and that the County Auditor had verified that this number was accurate, within about 10%.

Watch On Gov has obtained official documents that show that the county changed numbers related to county debt shortly before last Tuesday's Budget workshop. The County Auditor had originally reported Hays County's debt on the first day of this fiscal year at $257,869,998. This is verified on the Hays County STATEMENT OF INDEBTEDNESS, which is in the front section of the Hays County, Texas Fiscal Year 2010 - 2011 Budget (before the first tab).

Shortly before the County Budget Workshop, however, this number was revised downward by about $42 million dollars, to about $215 million, which is the number shown in the slides presented by Mr. Herzog at the March 22, 2011 Budget Workshop. In other words, the County Auditor has now officially revised the amount of debt that Hays County will report for the first day of the current fiscal year. Forty-two million dollars is a substantial revision of the county's reported debt when compared to the county revenue this year, which is projected to be about $81 million.

The most recent version of the auditor's slide presentation is available on the Hays County website at the link shown at the bottom of this article. When you look at the slide presentation, note specifically the slide titled "What Hays County owed on the 1st day of the fiscal year." (The slide was #11 when Watch On Gov downloaded the presentation on March 27.)

A second important number to look at regarding Hays County Debt is the amount of debt that the county is projected to take on this year as a result of commissioners court issuing and selling bonds. This number is recorded in financial forecasts that are created for Hays County by the firm that advises the County on bond issuance and debt structure, Specialized Public Finance Inc. The forecast is titled "Preliminary Capitol Improvement Program."

The forecast that is currently posted on the county website, which was prepared on March 21, 2010, projects that Commissioners' Court will issue bonds totaling $143,055,000 during this fiscal year (look at the number labeled 'Projected Issuance').

Watch On Gov has obtained a copy of an earlier forecast that was run on July, 2, 2010, and it shows that, at that time, Commissioners' Court was projected to issue $154,295,000 of bonds during this fiscal year. In other words, the county reduced its projection of how much additional debt it would acquire this fiscal year by issuing bonds. It is likely that additional forecasts were created between July 2, 2010 and March 21, 2011. The complete set of forecasts would be needed to determine precisely when this projection was changed and by how much.

Did Mr. Brannon misrepresent the data? Taking the debt number that the County Auditor originally reported for the beginning of this fiscal year ($257,869,998) and adding the projected amount of additional debt that will be added as a result of issuing bonds this fiscal year ($143,055,000), show that Mr. Brannon DID NOT misrepresent the data on Hays county debt when he reported that county debt was projected to reach about $400,000,000 by the end of this fiscal year.

What does this tell us about Hays County's Financial Health? The county's current debt level (revised downward to $215 million) already includes some, but not all, of the borrowing that has been approved by Hays County Commissioners' Court. After bonds are issued for the full amount of borrowing that Commissioners' Court has approved, county debt is likely to be close to $400,000,000. It is not possible to tell from the forecasts presented thus far what the full impact of this debt will be on the county's property tax rate.

The county frequently updates the information on its website so I will post the particular document versions that are referred to in this article later this week, along with a copy of this article, at www.watchongov.com.

To view the most current version of the county auditors' slide presentation, and the Preliminary Capitol Improvement Forecast on the county website go to www.co.hays.tx.us/index.php/government/fy-2012-budget-planning/