MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Wednesday, April 26, 2000

Council Chamber

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

Members Absent:  None

Also Present:    

Chair McLain called the meeting to order at 2:09 P.M.

1.  Consideration of the Minutes of April 5 and 11, 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.

Chair McLain thanked MERC (Metropolitan Exposition-Recreation Commission) staff and Commissioners for attending today and all the hard work they had done to reach this point. She invited them to introduce their proposal. George Bell, MERC Chair, thanked the Committee for letting MERC find the best places in which to make cuts to the MERC budget. A copy of the memorandum, Amendments for the FFY 2000-01 Budget is included in the public record. He introduced MERC Commissioner Alice Norris, Chair of the MERC Budget Committee to review the document with the Committee. Ms. Norris reviewed the process used to make the cuts presented and said that MERC took this work very seriously. Mark Williams, MERC General Manager, reviewed the cuts made by the Commission this morning. When the Civic Stadium was cut from the managed facilities MERC would come back to Council with a supplementary budget at some point, either at the end of this fiscal year, or beginning of next.

Councilor Atherton asked about the full POVA (Portland Oregon Visitors Association) contract cost. Mr. Williams responded that it was over $2 million. Councilor Atherton asked if that contract was let competitively. Mr. Williams said no, it had never been bid competitively. It was a part of the original set-up for Oregon Convention Center's (OCC) marketing program with 1% of the City of Portland lodging tax earmarked for marketing OCC with an equal amount from the Metro share of that same tax. It fluctuated slightly above and below 1% according to perceived marketing needs. Councilor Atherton asked if that budget item was driven by tax revenues or by someone's "guess-timate" of need. Mr. Williams said it was driven by both. MERC felt that it was a contract for services and these services should be spelled out so that the public knew what they were getting for their money. POVA had accepted that. He noted that in a marketing analysis of other cities POVA was dramatically under-funded.

Councilor Atherton asked about the facilities condition assessment. He thought there would be people on staff to do this work. Mr. Williams said that MERC had two FTE capital projects staff, but they had a full workload. MERC had emulated REM (Regional Environmental Management) department use of a creditable specialist to inventory their facilities. Councilor Atherton said he understood that this was a condition of REM bond covenants for the transfer stations; he wondered why such conditions were not a condition of the OCC and Expo (Portland Metropolitan Exposition Center) bonds. Mr. Williams responded that the existing bonds were general obligation rather than revenue bonds. He suspected that they did not include this condition. He did not believe that the Expo bonds just issued did not have that requirement either. However, even if it was not mandated, he thought it was a good idea and hoped to reinstate that line item at a later date.

Councilor Monroe thanked the MERC staff and Commission for all of their hard work with the difficult task the Committee had given them. As an apartment house owner he understood that the last thing that should be cut in a soft market was advertising. He was concerned that nothing be done to damage marketing through the advertising budget cut to POVA. He asked why MERC opted to keep its own Human Resources (HR) person rather than using Metro's HR department. He thought that might be a better place to make cuts than to the advertising budget and did not think that a bifurcated HR system was the most efficient way to run things.

Mr. Bell said MERC felt strongly that an on-site HR person was a crucial part of a unique system. This uniqueness warranted having its own specialist. The closer you had the HR person to the operation the quicker on its feet the organization would be. He could cite many case studies supporting that conclusion. Ms. Norris echoed Mr. Bell’s comments that a specialist agency needed a specialist HR staff. This decision and many others would be revisited in the fall when MERC takes a holistic review of the system.

Mr. Williams said the proposal from Metro HR supported that choice. Chair McLain said that this history was disputed and it was not useful to revisit it now. She agreed that this type of thing might be reviewed later. She agreed that it would be helpful for both agencies to review their services to be certain there were no redundancies. Councilor Monroe praised MERC’s choice for that staff position; she was an outstanding person. He felt that the 6-month review was appropriate and looked forward to working with MERC on the review. He appreciated all the hard work that had been done by the MERC's volunteer board.

Councilor Atherton noted that the Committee was working to find a way to fund some of Metro's elements like Planning and Parks in order to find relief to the funded operations.

Chair McLain asked for direction on how to incorporate the MERC memo into the passed MERC amendment #3. John Houser, Council analyst, recommended that the memo be made an exhibit to MERC amendment #3 as to how these cuts would be made. A copy of MERC amendment #3 is included in the public record.

Councilor Monroe said he would support this amendment to accept MERC’s judgement as to where cuts should be made. Chair McLain said she thought the Committee had been diligent in assessing MERC needs and programs. Some of the Committee's suggestions had been accepted and some not, but as long as MERC was comfortable with the choices they made, she was comfortable with it. She would have made some different choices, but acceded to their wishes.

Chair McLain noted the 4/26/2000 revised copy of the fiscal impact Summary. It is included in the public record. She asked everyone to review the document to be sure they were comfortable with the accuracy of the record. She said there were two budget notes that might still come before the Council at tomorrow's meeting. One was from Councilor Atherton dealing with unfunded mandates. Councilor Atherton said he would present the note tomorrow. He said that the 1995 Ballot Measure 30 was passed by the citizens to stop the State Legislature from doing its "let it be done" dance. This note would say that Metro took that Measure seriously. Chair McLain said the second budget note responded to union concerns about FTE loss. It acknowledged that Council would review the budget when actuals came in and consider restoring these positions and program elements if the money was available. She believed that Council would do such a review in any case, but addressed union concerns and gave them assurance that their concerns would be addressed. It did not ask for a positive conclusion, only a review. She would present this note at Council tomorrow.

Councilor Monroe asked if staff had found money for NARC dues beyond the previously identified $7k. Mr. Houser said he awaited the latest iteration of the cost allocation plan. He had found an additional $910, but still needed $900 more. Kathy Rutkowski, Financial Planning Analyst, said she had not yet found the balance. Councilor Monroe asked if dues could be split into two payments. Mr. Houser responded it could not. Chair McLain stated that it would be found. Councilor Monroe asked if he could move to restate the NARC dues of $8,840. In the original motion it was thought that the dues were $11k. The funding source would be identified by Thursday afternoon prior to Council.

Councilor Atherton said he and staff were still searching for money for a feasibility analysis of the Willamette Greenway trail. He understood that it could continue to be discussed through July as the issue had already been raised.

Chair McLain stated that the next budget meeting would be held May 10. Part of the work at the May 30 Council Retreat would be a wide-ranging discussion on Metro's future direction. Presiding Officer Bragdon had directed the Committee to discuss the Capital Needs assessment issue. She wanted to see the lists from each department gathered together into one document. Councilor Monroe thanked Ms. Sims and her staff, Mr. Warner and Mr. Burton, and especially the Council analysts. He appreciated Councilor Atherton's contributions and most especially the work of the Chair.

3.  Councilor Communications

Chair McLain adjourned the meeting at 2:54 PM.

Respectfully submitted,

Pat Weathers

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF APRIL 26, 2000

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

i:\minutes\2000\budget&finance/04260bdm.doc