MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Wednesday, March 1, 2000

Council Chamber

Members Present:  Susan McLain (Chair), Bill Atherton (Vice Chair), Rod Monroe

Members Absent:  None  

Also Present:    David Bragdon, Rod Park

Chair McLain called the meeting to order at 1:35 P.M.

1.  Consideration of the Minutes of February 16, 2000 Committee Meeting.

2.  Ordinance No. 00-847, For the Purpose of Adopting the Annual Budget for Fiscal Year 2000-01, making appropriations, and levying ad valorem taxes, and declaring an emergency.

ENTERPRISE FUND PRESENTATIONS:

▪  Zoo

▪  REM (Regional Environmental Management)

▪  MERC (Metropolitan Exposition-Recreation Commission)

Report on Status of Agency Capital Reserves

Distribution of Council Analyst Questions/Issues Related to General Fund Departments

BACKGROUND ON PRIMARY FUNDING SOURCES

Chair McLain stated that the committee had divided the departments into 3 segments: General Fund, Enterprise Fund and Support Services. Today the meeting focussed on the Enterprise departments. The clerk would collect all handouts from the meeting for inclusion in each Councilor's Budget book.

Tony Mounts, Financial Planning Manager, presented the Zoo portion of the staff overview, Budget and Finance Committee, March 1, 2000. A copy is included in the public record.

Tony Vecchio, Zoo Director, spoke to the Zoo Budget. A copy is included in the public record. Things were going very well at the Zoo, with very strong attendance. The successful Lorikeet exhibit had been built in-house by the year-old Exhibits department at a fraction of the cost of past exhibits built on the outside. There had been some concerns as to what was capital and what was maintenance; but he believed that this problem had been resolved and cost coding was now correct. When the Great Northwest Phase III opens it will take the Zoo to the next level in terms of caliber and public interest.

Councilor Atherton asked what the parking lot interest rate was. Kathy Kiaunis, Zoo Deputy Director, responded that it was 5% through the State Economic Development Fund.

Mr. Mounts gave an overview of the Solid Waste Revenue and Rehabilitation & Enhancement Funds. It is included in the public record.

Terry Petersen, REM Director, spoke to the REM budget. A copy is included in the public record.

Councilor Atherton asked where the focus was between wet and dry waste materials. Mr. Petersen responded that both wet, organic food waste and dry, construction and demolition (C&D) were the focus of the proposed programs. Councilor Atherton asked if C&D was going down. Doug Anderson, Waste Reduction Manager, responded that with the booming economy construction of the 90's C&D had been as high as 300-350k tons/year vs. the expected 200-250k tons/year. Figures were still high but trending back towards the average, with a slight slowdown in regional construction. About 40% by weight was currently recycled, but REM hoped to recycle up to 75% through the new initiatives. High disposal fees were a great incentive to recycle.

Councilor Atherton asked where education dollars were targeted. Mr. Anderson responded that there were 2.6 FTE educators on staff plus contract workers. State law required that school curriculum include recycling education. Metro had stepped up to help the schools provide this curriculum, which has become quite popular. Metro provided presentations, materials, curricula and certification of the Green Schools Program. Councilor Atherton asked about the State mandates. Mr. Anderson answered that Metro focussed its recycling education upstream on waste prevention and reuse rather than just recycling the waste created. The mandate was created prior to 1995. Councilor Atherton asked when the interfund loan would be paid off. Mr. Anderson said that it would be paid off July 1, 2000.

Presiding Officer Bragdon asked if the contingency and reserve fund balances met or exceeded the established criteria. Mr. Petersen responded that the reserves were at appropriate levels; the one exception was the Rate Stabilization account; it would be higher than normal if the proposal to deposit the expected $2.8 million in excess of revenue requirements was accepted. This proposal would give the Council flexibility in dealing with money issues expected in the coming year.

Chair McLain reminded the Committee that the Council analysts would be returning questions to the departments shortly. Further she understood that Councilor Park was working on an amendment to the REM budget, but it had not yet come to the Committee.

Mr. Mounts spoke to Capital Reserves and a copy is included in the public record.

Chair McLain stated that the current reserve for Renewal & Replacement (R&R), $2.4 million, was previously shown in two separate accounts and had been combined because of a change in the accounting process and to better define the capital outlay. It was the first step in trying to determine what amount should be set annually to fund R&R accounts. Mr. Mounts agreed.

Mike Burton, Metro Executive Officer, spoke to Metro's Budget Process and Support Services Charges to MERC. A copy is included in the public record.

Chair McLain said that Dan Cooper, General Counsel, had reviewed Metro Code in regard to MERC and its budget. He concluded that the Executive Officer was required to present the MERC budget to the Metro Council as submitted by MERC. Metro Council then was required to review it as thoroughly as the rest of the budget.

George Bell, Chair of MERC Commission, spoke to the MERC budget. A copy is included in the public record. He added that the MERC commission would welcome any suggestions that would improve accountability, give better outcomes, or greater efficiency of operation. It was understood when the consolidation agreement was approved that MERC would operate in a businesslike manner, fully accountable to government. It would use private sector tests of economy and efficiency. He said that a team of professionals from MERC and Metro had met to look at all these factors and recommend appropriate actions, but that this had not been completed, at least to the satisfaction of the MERC commission.

Chair McLain noted that the Council had requested a study on these issues last year and she had requested an update. It appeared that there were still some issues unresolved.

Mark Williams, MERC General Manager, presented a copy of a check in the amount of $150k from the Newmark and Bruning families to the Council. The check was for the completion the New Theatre building's 4^th floor space. He thanked the Council for giving the private sector the confidence to donate money knowing that the facilities would continue to be well maintained. He then spoke to the MERC budget. A copy is included in the public record. He noted that the Auditor was conducting a review of the POVA contract; he would welcome comments based on that audit. There was a difference of opinion as to just what the study results meant. It was agreed that most services could be better provided in-house; however there was no agreement on how to present this information.

Chair McLain asked why the MERC budget looked different than the others presented. Mr. Williams responded that the global MERC budget was presented first and in a format similar to the Zoo's. The individual division budget was behind it.

Councilor Atherton asked for an explanation of the difference in the amount allocated for support services. Mr. Williams said that it might be due to a lower level of service or pay rates. MERC had budgeted for 2.7% increase on MERC overhead rather than 3% increase budgeted by Metro. Councilor Atherton asked about the Human Resources (HR) director position. Mr. Williams said he was asked by Metro to add a HR generalist to staff with a shift from Metro to MERC. HR had presented a base package and an add-on package that allowed MERC to choose the level of support that it wanted. Councilor Atherton asked if he could suggest any other services, such as payroll, where there would be economies of scale. Mr. Williams responded that there were such services, however at the facilities, economy of scale could not be realized.

Councilor Atherton asked how much R&R was budgeted by facility. Mr. Williams said that typically public agencies did not budget a set R&R amount as the private sector did. For decades the Expo had had no specific funds identified for R&R. In essence this had resulted in the need for a lump sum via a bond debt-financing plan. Essentially the pay-off of this debt amounts to a retrospective R&R. It would have been more prudent if this had been done over the years by the entities who had run the facility. MERC had sought assistance from the private sector at the PCPA. Typically, he said, the donor community was willing to fund a new hall, reader board, etc., but not normal maintenance such as carpet, paint, etc. With respect to the OCC he believed that adequate maintenance funds have been allocated within the budget in the 25-year plan.

Councilor Atherton asked if there were adequate funds budgeted for regular maintenance plus R&R. Mr. Williams responded that at OCC and Expo Halls E and D it was adequate, but not for not Halls A, B and C. Because of deferred maintenance it was difficult to deal with maintenance cost build-ups without a lump sum capital infusion. At PCPA MERC faces the same problem.

Chair McLain said that action on the three revenue streams, Enterprise, General and Support Services funds would be considered March 29 through April 17.

Councilor Monroe asked Mr. Williams what the status of the proposal from Portland Family Entertainment to take over Civic Stadium was. Mr. Williams said that he had no solid information; therefore the Stadium had been budgeted for a full year of operation even though its status was uncertain. The decision date for submitting a definitive plan for Triple A baseball to the City was March 31. Councilor Monroe suggested that the final MERC budget decision be pushed to later in the budget cycle because of the pending Stadium deal. Mr. Williams agreed that it would be helpful.

Chair McLain presented a budget amendment to the Council budget regarding dues to the Water Consortium. She promised to discuss the amendment with Councilors individually.

3.  Councilor Communications

There being no further business before the Committee, Chair McLain adjourned the meeting at 3:43P.M.

MEETING RECESSED UNTIL MONDAY, MARCH 6, 2000 AT 3:00 PM

Respectfully submitted,

Pat Weathers

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF FEBRUARY 16, 2000

The following have been included as part of the official public record:

i:\minutes\2000\budget&finance/03010bdm.doc