MINUTES OF THE METRO COUNCIL BUDGET COMMITTEE MEETING

Wednesday, March 4, 1998

Metro Council Annex

Chair McCaig called the meeting to order at 3:30 PM.

1.  CONSIDERATION OF MINUTES OF FEBRUARY 25, 1998

Chair McCaig noted that Councilor McLain wished to have one passage of the minutes revised to more accurately reflect her comments. She asked Councilor McLain to frame her revisions in the form of an amendment to the minutes. Councilor McLain asked that the minutes be formally amended as shown in the revised version of the minutes, a copy of which is included as part of the meeting record.

2.  ORDINANCE NO. 98-724, FOR THE PURPOSE OF ADOPTING THE ANNUAL BUDGET FOR FISCAL YEAR 1998-99, MAKING APPROPRIATIONS, CREATING FUNDS, LEVYING AD VALOREM TAXES, AUTHORIZING INTERFUND LOANS, AND DECLARING AN EMERGENCY

OFFICE OF GENERAL COUNSEL

Chair McCaig noted a vote to approve the budget for the Office of General Counsel (OGC) had not been taken at the February 25 Budget Committee Meeting. She entertained a motion to do so.

Councilor Morissette asked if the amount of the increase in the OGC budget, which is due to the proposed transfer of funding of appraisal and legal services from the Open Spaces program to the OGC, is offset by a corresponding reduction in the Regional Parks and Greenspaces Department (RPGS) budget. Daniel Cooper, General Counsel, said the OGC budget will increase by $300,000 due to the transfer of funding responsibility, however, he did not know how much the RPGS budget will decrease.

Councilor Morissette said immediately prior to today’s meeting, he had asked financial staff for this information. Kathy Rutkowski, Principal Administrative Services Analyst, said there had not been time to determine the exact dollar amount. However, the line item where these expenses had been funded in the past is proposed to decrease by 49%. Ms. Rutkowski said she believed this decrease would be very close to the $300,000 increase in the OGC budget.

Chair McCaig suggested the committee vote on the budget, keeping in mind they could revisit the issue after the RPGS budget had been reviewed. Councilor Morissette said he was satisfied with Ms. Rutkowski’s answer, and would be willing to proceed with a vote.

INFORMATION TECHNOLOGY UPDATE

Chair McCaig asked Jennifer Sims, Director of Administrative Services, to give a report on the InfoLink project. Ms. Sims introduced Eric Stathers, PeopleSoft Public Sector Customer Service Manager, who was available to answer questions.

Ms. Sims gave a Power Point visual presentation describing the InfoLink project. A hard copy of this presentation is included as part of the meeting record. Ms. Sims said three and one half years ago, staff recognized the need to replace its computerized financial system. The year 2000 problem was looming, and the software vendor for the current system was selling out, so vendor support would diminish. Council approved proceeding with the purchase of a new management information system. Subsequently, representatives from all departments were polled to establish a list of success factors.

Ms. Sims said a selection committee of users from across the organization unanimously chose PeopleSoft. Metro hired an outside consultant who assisted with drafting an RFP and evaluation process, and assisted with contract negotiations. The consultant concluded Metro’s process was very good. Subsequently the process has become a model used by Tri-Met, the city of Salem, and Clackamas County. Council approved the project package and contract; and last year Council approved several contract amendments to the project.

Ms. Sims reported briefly on the history of PeopleSoft. Approximately 25% to 30% of PeopleSoft’s business is with the public sector. Clients include Lane County, the state of Oregon, the Bonneville Power Administration, the city of Eugene, and others.

Ms. Sims reported the list price for the software is $936,000. Staff was able to negotiate a 35% off-list price of $653,000 because Metro bought a large package of the modules, which allowed the agency to benefit from the integrated nature of the modules. The total approved project budget is $2.3 million, and expenditures are on budget. To-date, approximately $1.9 million has been spent, leaving $400,000 to finish the project next fiscal year. The licensing fee for the system is a standard $120,000. It pays for on-going support and all regular upgrades. Metro will pay a fee to add memory to allow the number of concurrent users to increase as the data-base grows, on an as-needed basis. The Capital Improvement Plan (CIP) shows that a five-year replacement is planned, based on the assumption that it will become outmoded at that time.

Ms. Sims said three modules are live as of August, 1997. Work is being completed on the human resource and payroll modules, and the April 10 payroll will be processed through PeopleSoft. Metro is working with PeopleSoft to deliver some fixes on the accounts receivable and billing modules. These two modules had originally been scheduled to go live August, 1997. There are four remaining modules that will be evaluated next spring when Version 7.5 is issued.

Ms. Sims said as with any project, the process has not been completely smooth. She reminded the committee that Metro had changed its implementation consultants. Originally, Metro used Business Information Technology (BIT), but soon discovered that the PeopleSoft Group, an affiliate of PeopleSoft, had better expertise. In addition, Ms. Sims reported staff is working with legal counsel on a settlement letter to resolve accounts receivable and billing problems.

Ms. Sims went on to show several examples of spreadsheet reports that can be designed on any desktop at Metro, and she referred briefly to capabilities the software possesses that there are currently no plans to use. Ms. Sims reported the department will deliver the project within budget; staff will commit to giving Council a quarterly update; and will offer training to any councilor who wishes to pull up financial reports at their PC. One of the features of the system is its “real-time” capability, which is to say information on the system is available as soon as it is entered. Paper flow is reduced in the accounting department; the vendor is committed to regular product innovations; and the system is fast and reliable.

Councilor Morissette said it is frustrating when going through the process of approving a project like PeopleSoft, that not all of the elements of the project are analyzed, such as the audit proposal. He said although staff was probably unaware of the potential of an audit, it would have been easier for Council had this expenditure been anticipated.

OFFICE OF THE AUDITOR BUDGET

Chair McCaig asked Alexis Dow, Metro Auditor, to report on her progress with regard to the proposed audit of the PeopleSoft system. Copies of a memorandum from John Houser, Senior Council Analyst, to Chair McCaig and Ms. Dow, which addressed funding of the proposed audit were distributed to councilors, and a copy is included as part of the meeting record.

Ms. Dow said she reviewed Mr. Houser’s memorandum, and agrees with part but not all of it. During the past week, she and Mr. Houser reviewed the auditor’s historical spending by line item. She reported Ms. Sims has informed her that the Administrative Services Department (ASD) can contribute $15,000 toward the PeopleSoft project. With the internal shifting of funds plus the transfer from ASD to the auditor’s current FY budget; along with the proposed line item changes to the FY 98-99 proposed Auditor’s budget, Ms. Dow said the amount proposed in Mr. Houser’s memorandum comes within about $2,000 of the amount she originally requested.

Chair McCaig said last week the committee had discussed a $140,000 project that had two components. One component is a project management component that she understood Ms. Dow to say could be done in-house. The second component would be a review of the individual modules that are coming on-line at several different times. Chair McCaig said councilors believe there will likely be some value in auditing the modules, even though some experts have pointed out its value may be perceived to be primarily political. The audit should provide an objective review that would establish whether Metro has received the system, capability, and value it was promised.

Chair McCaig said the questions remaining were, which parts of the $140,000 project the committee wishes to go forward with, and at what time the auditor wishes to proceed. She asked Ms. Dow how she was able to reduce her estimate from $140,000 to $107,000 within the period of a week. Ms. Dow said the $140,000 figure was a number put forward by Mr. Houser. She originally estimated a complete audit could be funded for $110,000, so she could be very happy with $107,000.

Chair McCaig said Mr. Houser’s current memorandum recommends that the project management phase of the audit be completed out-of-house, rather than in-house. Ms. Dow said it had been Mr. Houser’s recommendation that this portion of the audit be done internally, however, it was always her belief that it could be done more efficiently and effectively by an outsider.

Councilor Naito commented on the Scope of work, saying she did not know if all the modules need to be audited. She said those modules that contain internal financial controls should be audited, however, other modules could be self-audited by the users. Ms. Dow said the Scope of Work Councilor Naito referred to is a first draft. Councilor Naito said the Coopers and Lybrand report honed in the type of audit she would be interested in pursuing.

Chair McCaig said there were three decision points to consider. One, whether the project management piece should be conducted in-house or out-of-house. Two, what level of auditing the Council would advise the auditor is necessary to support the modules. She recommended that the audit concentrate on the accounts payable module and those systems that affect accounting principles, rather than the human resources module. She asked Ms. Dow whether her proposal would be to audit all of the modules. Ms. Dow responded she would audit five modules. The third decision point would concern the timing of the audits. Ms. Dow said she would recommend the audit be undertaken in August.

Chair McCaig recommended the committee first determine which of the five modules should be audited. Ms. Dow said because the RFP is in the developmental stage, her initial recommendation to audit five modules is based on her understanding that the incremental cost for additional modules will not be great. She said she is not currently prepared to commit to the five modules.

Councilor Washington asked Ms. Sims whether there is greater benefit to auditing one module over another. Ms. Sims said she has not been involved in this type of audit, therefore, her only knowledge of them comes from Ms. Dow and Mr. Stathers. She said Mr. Stathers told her an audit of this nature is very common practice; and its purpose is to assure the purchaser that the system has been installed properly, and that the internal checks and controls are in place. Mr. Stathers suggested that if Council is concerned with the cost of an audit, it may wish to prioritize where the greatest risk is. In this case, it would be in the areas where Metro is sending money out the door, such as payroll and accounts payable. Ms. Sims said there will be other modules in the future that will deal with money coming into Metro, such as accounts receivable, which will also be important to review.

Mr. Houser said if the auditor brings forward her proposal during the current fiscal year, the contract code will require that she bring it before the Council for consideration and approval before she releases the RFP. If she brings it forward after the start of the next fiscal year, there will be an opportunity for councilors, in reviewing the contract list, to designate it as a significant impact contract requiring Council approval prior to its release. So, in either case, Council will have the opportunity to review the final Scope of Work.

Councilor Naito said since upgrades will be coming on constantly, an audit will need to be an ongoing component of the project. She said the RFP should be an ongoing contract. Ms. Dow said future upgrades will not be as significant as the initial change to PeopleSoft from the main frame environment. She said this initial change-over is the only time that an intense review of the system will be needed. For each subsequent upgrade, an internal audit will be sufficient.

Councilor McLain said while she agrees to the value of the audit and understands that it may be an ongoing need, she wants it to come out of funds that are already in the budget. She thinks payroll, accounts payable, and accounts receivable are the modules that should receive priority. Following the initial prioritized review, Council will have a better idea of what needs to be done next. She anticipates subsequent audits will not need to be done in the same manner, or to the same degree. Ms. Dow agreed that this is so.

Chair McCaig asked if the timing of the audit would change if it were to be prioritized as suggested by Councilor McLain. Ms. Dow responded she did not believe the timing would be affected because accounts payable came on line last July, and payroll will come on line in April, so the proposed August audit will not be affected.

Councilor Morissette asked whether Council has authority to direct which audit Ms. Dow conducts, or if it simply has the authority to allocate the resources. Chair McCaig said Ms. Dow is not asking for any new money, because it is available within her current budget, however, the proposed audit will require amendments to the existing budget. It is the RFP that Council will have an ability to effect. Ms. Dow said she is open to any input from the Council.

Councilor Morissette said he did not buy into the original budget request for the $25,000 remodel, so he will not support that proposed expenditure being redirected to the audit. He said Metro needs to be careful with its resources because there are many programs that need funding. He said he spoke briefly with Ms. Sims, asking her how much an audit would reasonably cost. The figure he was given was around $40,000. He said if ASD transfers $15,000, then Council will actually only need to come up with $25,000. However, since the auditor has $40,000 available in her current budget, there will actually be $55,000 available, and Ms. Dow should be able undertake the audit with that amount of money. In response to a question by Chair McCaig, Councilor Morissette clarified that if the auditor does not spend all of her budgeted funds in the current fiscal year, those funds should not transfer to the next year for more projects.

Chair McCaig confirmed with Councilor Morissette that he believes the $25,000 proposed Capital Outlay expenditure in the FY 98-99 proposed budget will not be approved in the first place. She asked Councilor Morissette whether he is comfortable shifting the remaining $27,526 in the proposed FY 98-99 budget to different line items in order to accommodate the audit. Councilor Morissette said he is because it is within the purview of the auditor to decide how to spend her money. Chair McCaig said the purpose of the budget committee, however, is to approve the shift of money from line item to line item, and that the budget Ms. Dow submitted does not have $27,526 in the appropriate line items to enable her to fund this project.

Councilor McFarland asked what the proposed Capital Outlay expenditure is for. Chair McCaig said its purpose is to fund an office remodel to provide more privacy to the auditors. Ms. Dow explained the purpose is actually to enhance efficiency.

Chair McCaig said the proposal under consideration will amend the current budget to approve funding of the first portion of the audit in the amount of $55,000. She said the second piece will concern the FY 98-99 budget; and she asked for further discussion on whether to approve the full $52,526 request or to reduce that amount to $27,526.

Councilor Naito said she wished to discuss the cost of the audit. She said Councilor Morissette has said it can be done for $40,000. She said the committee is operating with a lack of information, because it does not know the actual scope. She feels uncomfortable making any kind of decision in this context. The Scope of Work is an issue; there is a huge range in the potential cost; and she has not received any outside information about these costs.

Ms. Dow said this information has been provided to councilors. She said she has spoken with three outside firms, and has been informed the cost will run between $40,000 to $50,000 to look at two modules. To do more modules, some firms have indicated it will cost a minimum of $50,000, and it will be more realistic to plan for up to $100,000. She estimates she can audit the modules for $80,000 and she will need about $30,000 to do project management piece. This is how she reached her $110,000 figure.

Chair McCaig said she believes the committee has reached agreement that the audit will be prioritized, that not all of the modules will be reviewed, and that they might occur at different times. She said she would entertain a motion that would allocate $82,526 to the auditor by reconfiguring her budget to provide $55,000 in FY 97-98 and $27,526 in FY 98-99 to perform the InfoLink audit. She said the auditor can come back to the committee if she finds that the project as outlined in the Scope of Work exceeds the amount of money available.

Councilor Naito asked what would normally happen during the current fiscal year with $40,000 in under spending. Ms. Sims responded internal service charges are the charges paid by all the departments that benefit from the service, and it is based on the cost allocation plan; at the end of the year, Finance staff looks at what the actual costs were to do the work as opposed to what the budgeted amount was and the departments are only charged what the real costs were. Therefore, all departments benefit a little.

Councilor Naito asked about the $15,000 from the ASD. Ms. Sims said she was willing to make this transfer to help with the need. Councilor Naito said she would tend to agree with the $15,000 transfer because it stems from the InfoLink project. She would also agree to allocate the $27,526 that has been identified in the FY 98-99 budget. Councilor Naito said she believed the $40,000 should go back. Ms. Dow said this money is already in her budget, and is available to her to spend before June 30, 1998. Chair McCaig asked staff whether a budget amendment would be required to permit the auditor to spend the existing funds on InfoLink, and was informed it would not.

Councilor Naito said she would be willing to move to transfer the $15,000. She said the reason she would take this action is that she prefers to take the conservative approach of auditing the initial modules and internal controls, at an amount of about $40,000 to $50,000. She said Ms. Dow’s contention that she could find about $27,526 in her proposed budget would bring the total amount to $42,526. Chair McCaig said the $40,000 in FY 97-98 can be spent however Ms. Dow chooses, therefore, the total amount would come to approximately $82,526.

Chair Morissette said the committee is confusing the fact that the funds extend over two separate budget years. He said the next discussion the committee may wish to have, is whether the other two line-items [$17,000 and $10,526] in FY 98-99 are necessary. He said the issue is that since Council has discovered that the current budget will be under spent by $40,000, why would it be acceptable to base next year’s budget using calculations that include that same $40,000.

Chair McCaig asked for an amendment to transfer the $15,000 from ASD to the Office of the Auditor. Councilor McLain said she could do this. However, she said this action will bring the total amount of funding to $55,000. Therefore, the question is whether $55,000 is sufficient to fund the first prioritized pieces of this project. If it is, the committee should vote yes, if it is not, the committee should vote no. Councilor Morissette said there still needed to be a discussion about the proposed FY 98-99 budget. Councilor McLain said the budgets should be dealt with separately.

Chair McCaig pointed out this vote will only approve going forward with the amendment, it will not adopt it. The proposed amendment will need to come before the Council in the form of an ordinance for adoption.

Chair McCaig then asked the committee to consider the two line items for $17,000 and $10,526 in the proposed FY 98-99 budget. Ms. Dow said last week she had been looking for $20,000 to $30,000. She agrees with Mr. Houser on the $10,526 figure, however, she does did not know where the $17,000 will come from. She said she reviewed the budget with Mr. Houser, and will have to really tighten down all of her line items to get to the $17,000, but she is willing to do so because she thinks this is an important project. She has had to make sacrifices to reach the $27,526 figure. She said the $17,000 is where the extra $20,000 will come from. She said she does not want to come back to the committee to ask that an extra $20,000 be found.

Chair McCaig said there is now $27,526 requested in line item amendments to the FY 98-99 budget. Chair McCaig said this would bring the total amount appropriated for the audit to $82,526.

[Editor’s note: The $27,526 shift in funds referred to in today’s meeting is itemized by line item in a memorandum distributed by Mr. Houser at the February 25, 1998 Budget Committee Meeting. Of this amount, $17,000 is already budgeted in Contracted Professional Services.]

Councilor Naito said she was bothered that this amount of money is available by simply moving it around. She said a review of all departments may be needed if this amount of money can be so easily found. Chair McCaig said a similar review of the Council Budget may be warranted, and Councilor Naito agreed.

Councilor McLain spoke to her motion. She said the reason she is comfortable moving these line items is that it is the job of the committee to prioritize budget expenditures, and she believes in the purpose of the proposed audit. She said if the committee wants to ask why Ms. Dow put these numbers in the proposed budget, they should recall that Ms. Dow had already admitted she had not scrutinized her line items as much as she planned to do in the future. Ms. Dow had simply used a summary percentage to arrive at her proposed budget for this year. Councilor McLain said now that the committee and committee staff have looked at the line items, and have found this expenditure to be appropriate, it is appropriate to approve the shift in funds.

Councilor Naito said the committee went to a great deal of effort with the decision to fund OMSI in the amount of $100,000 last year. She said there is $40,000 in under spending this year, and this same level of proposed spending will be moved into a project in the proposed budget that the Council does not know enough about. She thinks the $55,000 should give enough money to give a first cut to get the job done. She said she intended to vote against the amendment. Councilor Morissette agreed that until the committee knows more about the proposal, he is willing to go slower, and stay with the $55,000 approved from the current year’s budget.

Councilor Kvistad said that he agrees with the project, but sought clarification on the components. He asked if the committee had approved funds in FY 97-98 to undertake the first component of the study, and whether the committee was now addressing funding for the second phase of the work. Chair McCaig said she did not think the delineation is as clear as that. She said there is a set amount of money that ranges anywhere from $40,000 to $110,000. However, the components of the audit will cross over between the two fiscal years. The elements of the project are the project management piece and the five modules. Chair McCaig said committee has agreed there is not interest in auditing all five modules, that they could be prioritized. This leads the committee to believe the dollar amount could be reduced by an amount to be determined. She said ultimately, the amount should cover both the project management and module review elements of the audit.

Mr. Houser said that if a total of $82,526 is appropriated, $55,000 will need to be spent during the current fiscal year. This will require Ms. Dow to expedite the RFP. Ms. Dow said the project management piece will be the first component. Councilor McFarland said if Ms. Dow does not spend all of the money this year, and returns to the committee to delineate what further funds will go for, the committee could move to carry over the funds to the next Fiscal Year.

Councilor Kvistad said he was not clear on the numbers. Chair McCaig said if the committee dropped consideration of the $25,000 currently proposed for Capital Outlay that Ms. Dow is requesting be transferred to Materials and Services for the audit, there will be no new money involved. Councilor Kvistad asked if a yes vote will permit the shift in funds for Ms. Dow’s re-prioritization. Chair McCaig agreed, saying the audit has become a priority since Ms. Dow submitted the budget.

Chair McCaig said the proposal as it stands does not include the $25,000 from Capital Outlay. Ms. Dow said she believed the money is warranted. She said she had always stated she could do the audit for $110,000, and the $25,000 would bring the approved amount to $107,526, and she could work within this amount. She said if she comes back six months from now for additional money, she knows there will be comments that she is requesting new money. She said the money is in the current proposed budget, and she would like to see it moved to the Contracted Professional Services line item for the InfoLink audit.

Ms. Dow said she is unaware of the mechanics of budgeting, however, she would propose as an alternative, if the Council wishes to reserve judgment until the Scope of Work and RFP are available, that the $25,000 somehow be made a place holder or contingency so that it is not considered new money.

Councilor McFarland asked if the committee had voted to keep the $25,000 in the Auditor’s budget. Chair McCaig said she hoped that decision would be made following the vote on the InfoLink audit. She said the $25,000 will either be included for remodeling, be set aside in a different line item for future review, or be eliminated.

Ms. Dow said she believed the $110,000 will be necessary.

[Editor’s note: Councilor McFarland originally voted no, and following clarification of the motion, changed her vote to aye. The correct vote is reflected in the vote record above.]

Councilor McLain said the debate before the committee at the last meeting and at today’s meeting was brought about by the committee’s need to get a handle on cost. She said the door has been left open that if the first two modules take up the funds, there is always the opportunity to revisit the project. Councilor Morissette recommended, however, that Ms. Dow attempt to not exceed the amount of money approved.

TRANSPORTATION PLANNING DEPARTMENT BUDGET

Chair McCaig said there would not be enough time to adopt the Transportation Planning Department budget at today’s meeting. It was decided to begin deliberations on the Transportation budget, and carry over any unfinished business to the March 18 meeting.

Councilor Washington asked Michael Morrissey, Senior Council Analyst, to give his presentation on the Transportation Planning Department budget. Copies of a memorandum dated March 3, 1998 from Andy Cotugno, Transportation Director, to Mr. Morrissey providing answers to Mr. Morrissey’s questions were distributed to councilors. A copy of this memorandum is included as part of the meeting record. Mr. Morrissey reported there are no unresolved issues relating to the Transportation budget. He said there are a number of items pertaining to the budget he will bring to the committee’s attention, including several new project proposals. He said he had asked Mr. Cotugno to clarify several items including: 1) the prioritization of his work plan, 2) issues on S/N, 3) four new programs, and 4) questions relating to FTE and staffing. A revised version of the Transportation Planning Department Budget Overview was distributed to councilors, a copy of which is included as part of the meeting record.

Mr. Cotugno highlighted several items contained in the department overview document. He said it will be important to complete the FY 98-99 Regional Transportation Plan in order to permit other Transportation and Growth Management plans and programs to proceed. Mr. Cotugno said he does not know if there will be a follow-on activity subsequent to the completion of the Congestion Pricing project.

Mr. Cotugno confirmed for Councilor Naito that the additional FTE requested in the TransSim Project will span four years. She asked what will happen to that position after the four years. Mr. Cotugno reported the position is not designated a limited duration position. Councilor Naito asked Ms. Sims if the position should be considered limited duration. Ms. Sims said four years is too long to be considered limited duration. Mr. Cotugno said a person will not be hired for the project, but rather people from throughout that section will all work on that project, which will add up to an FTE. A junior-level staff person will be hired to compensate for the redirected FTE. In four years, it may be necessary to lay a staff person off, but it is too far out to judge who that may be.

Councilor Kvistad said there are a number of positions with limited duration that can be revisited.

Mr. Cotugno said the Congestion Pricing Project, which is in the budget to be completed by the end of the calendar year, had originally been budgeted on the basis of two positions being limited duration positions. He said they are two actual, identified people. The proposed budget proposes to assign these people to other projects. One proposal is for a position that is not currently funded. The I-5 North Corridor Study is on the list of new initiatives. This study is part of the ISTEA position paper that Metro adopted last week. Mr. Cotugno said he believes there is a good chance Congress will fund the project. However, if not funded, Metro will be unable to fund the positions.

Mr. Cotugno reviewed highlights of new initiatives, including the Highway 217 study, an updated MILT project, and a pilot project to undertake a schools outreach program. The pilot project is budgeted in two pieces. The first piece is staff work to pursue some foundation grants and to design what the pilot project would look like, and there is a $50,000 proposal for a foundation grant to implement the pilot project. Further new initiatives include a Regional Transportation Information and Performance report and a commercial transportation study.

Councilor Morissette said the budget at first glance looks great. He asked about increases in the General Fund, and Mr. Morrissey reported that the Finance department has characterized the Transportation Planning budget as being a status-quo budget. Councilor Morissette asked Councilor McLain if the addition of $50,000 General Fund dollars to Transportation is worth the loss to Growth Management issues. Councilor McLain said she believed the two departments needs are interrelated, and the programs of the Transportation Planning department support Growth Management programs. Councilor Morissette said he believes there is an overemphasis on transportation alternatives and not enough emphasis on roads.

Councilor Naito said the overall budget seems to be in flux because of the grant situation, in that the department is uncertain about what funds it will be receiving. Mr. Cotugno responded that this is always the case. Councilor Naito asked if there was any one area where the $50,000 increase in General Fund dollars could be said to be going. Mr. Cotugno said this is a status quo budget, and from the standpoint of the General Fund, it probably constitutes less than one-half of one percent of the General Fund. He said the cost of inflation in his budget is really being absorbed elsewhere, and the $50,000 is much less than the cost of inflation.

Councilor Washington said the department mostly lives and breathes on grants. Mr. Cotugno said the General Fund piece is a very important piece, because Metro cannot get the grants without the match. He said there are a variety of overall functions that grants do not pay for. They pay for specific projects. They do not pay for things like training or computers.

Chair McCaig asked Mr. Cotugno about the new initiatives, particularly the schools pilot project. She asked if the Council had seen them before, and how they became new initiatives that were included in the budget. Mr. Cotugno said the committee has seen some of them, however, the schools project and the commercial transportation study have not been seen by the Council. Chair McCaig asked how staff came to the position that the schools project is a priority. Mr. Cotugno said the JPACT Budget Advisory Committee, which includes staff from other jurisdictions and citizens involved in transportation issues, came to the conclusion that it is a good idea to get into the schools. Chair McCaig said, for the record, she feels this is a huge decision, and she expressed dismay that staff had apparently decided to proceed with a new outreach program without consulting the Council. She said she was not certain the schools project is one of the priorities she would establish for the agency right now. Mr. Cotugno said he has trepidation about the scope of the project himself, and this is why he budgeted it as a pilot project.

Chair McCaig said, apart from specifics of the program, there is a definite problem with any process that permits a budget advisory committee made up of citizens and staff to make recommendations that show up in the budget as if they are established, approved programs. She said it is one of Council’s major responsibilities to review and approve programs like these. In next year’s budget presentation, Chair McCaig said all recommendations coming from the JPACT Budget Advisory Committee should be separated out. She said there is nothing in the current format of the proposed Transportation Planning Department budget that reflects which of the new initiatives listed had received council input and review, and which had not.

Councilor McLain said this is another example of an earlier discussion she had about a citizen involvement piece that appeared in the budget without going through the filter of the Council. She said proposed programs like these could go on a proposed future programs list, rather than a list to be budgeted in the upcoming budget.

Chair McCaig asked if there were any recommendations from the JPACT BAC that did not get included. Mr. Cotugno said no, but that there was a project they proposed eliminating that stayed on the list. Chair McCaig said there needs to be a procedure in place to give councilors the understanding of where the proposal came from, and to give them an opportunity to comment.

Councilor Naito asked what project the advisory committee recommended dropping. Mr. Cotugno said they recommended dropping the feasibility study of extending S/N to Oregon City. Chair McCaig said this was a project the Council had already reviewed and directed staff to go forward with, and it would have been inappropriate to delete it.

Chair McCaig expressed interest in limited duration positions. She asked the Executive Officer, either through Ms. Sims or Mr. Cotugno, to develop a policy on limited duration positions, so Council will know how often they are used and what criteria are in place for keeping them. She said it appears they are currently used as full time employees who are moved around. Councilor Naito said there needs to be a checkpoint when the terms of the limited duration positions come to an end to review them.

Chair McCaig said consideration of the Transportation Planning Department budget will be continued at the March 18 meeting.

There being no further business before the committee, Chair McCaig recessed the meeting at 5:11 PM until Wednesday, March 11, 1998 at 3:40 PM.

Prepared by,

Lindsey Ray

Senior Council Assistant

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