MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Wednesday, June 28, 2000

Council Chamber

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

Members Absent:  David Bragdon, Jon Kvistad, Rod Park, Ed Washington

Chair McLain called the meeting to order at 1:38 P.M. A quorum was not present.

1.  Consideration of the Minutes of May 24, 2000 Committee Meeting.

As a quorum was not present minutes were held over to the next meeting.

2.  Committee Discussion of Capital Needs Assessment Carried Over from Retreat.

Chair McLain reviewed a memo from Jeff Stone, Council Chief of Staff, Financing and Project Implementation Process Proposal (Dated June 13, 2000) addressed to staff. It included a copy of a proposal from Jennifer Sims, Administrative Services Department (ASD) Director/Chief Financial Officer. Copies are included in the public record. Chair McLain disagreed with item 3 on the memo. She felt it did not reflect what she had heard at the Retreat. Also the issue list was incomplete. Councilors Monroe and Atherton agreed that the memo did not reflect their understanding of the Retreat discussion. Chair McLain asked Ms. Sims to come forward to discuss the attachment she wrote.

Ms Sims said genesis of the attachment was a meeting with Bruce Warner, Executive Office Chief Operating Officer, as a follow-up of the Retreat. While the dates and timeframes might change, the idea was to make sure everyone was clear on Council priorities. As to Parks and Greenspaces she suggested that it might be useful to build the Council’s intent into the strategy. She noted the need for clarity in articulating a plan for replacing the excise tax used currently to fund Parks. She hoped that disagreements could be settled before it went to the public. Chair McLain suggested that without a quorum present it might be better to discuss this subject at a future Council informal session to give Ms. Sims a better feel for the will of the Council. Ms Sims was pleased to see Mr. Stone’s process was similar to earlier discussion and felt that this was an opportunity to bring Council, Financial Planning and department staffs together as a resource for this work.

Councilor Monroe said that a process was in place for Transportation funding led by the business community and others. Ultimately it would come to the Council. He suggested that Parks should be the first issue to bring to the public due to its popularity throughout the region. If Metro could shore up funding for Parks and open spaces access, development and landbanking would have a spin off effect to aid Planning and other funding needs of the agency. In the current climate it seemed prudent to take small bites and chew on the juiciest fruit first. Chair McLain agreed and added that at the Council informal yesterday it had been agreed that Parks would be an excellent model to present to the public. Another small bite would be to take the memo list, make sure each item was in the right category and determine when it would be addressed. She hoped that there would be a sideboard of issues identified within the present work.

Councilor Atherton said too great a focus on Parks could weaken the scenario to hit all four identified issues within the next 2-years. He felt that all of the issues could be addressed in that timeframe. Chair McLain clarified that she felt that some of the issues could be covered in the regular business of preparing next year’s budget. She agreed that the Council must understand and identify all the Agency’s needs and then set priorities in an effort to get something done. Metro needed to demonstrate that it was working on something successfully. Councilor Atherton felt the heart of good budgeting was to frame issues and options up front that dealt with the big picture rather than the minutia of numbers. Chair McLain noted that people from across a broad spectrum of interests had asked her when Metro would do something that engaged the public as 2040 had. They asked when Metro was going to repeat its success at selling 2040 to the public on a new issue. Outreach cost money. She said there was plenty of work to do and the resources required should not be underestimated, e.g. outreach for the Regional Transportation Plan (RTP). Finding funding must be addressed.

Councilor Atherton noted two possible amendments he planned to bring forward regarding the RTP. One was about proposed funding and the second related to environmental issues of roadway noise and air quality.

Councilor Monroe noted that in Regional Environmental Management (REM) the old 8.5% excise tax continued under the change that would take place in December 2000. He felt the Council must continue to monitor the reserves, recycling rates, etc. He respectfully disagreed with Councilor Park that all the money collected would be necessary for use within the solid waste system. He wanted the Council to continue to be vigilant in making sure that too much money was not set aside. He felt the Budget Committee should receive regular reports in order to monitor collection.

Chair McLain added her concern that the dikes along the St Johns Landfill were adequate. Without DEQ sign-off on the Landfill closure there were questions. She thought it was a major issue that should be settled prior to the next budget session. A complete picture of the costs was not yet available. Councilor Atherton noted that this was another of the sidebar issues the Committee was concerned with. Using REM excess collection fees might be a popular alternative to accomplish Parks and Greenspaces funding. Chair McLain said she would bring it up when more Committee members were present. She noted that a list of Parks funding needs should be the drawn up.

Tony Mounts, ASD Manager, reported the cost of living adjustment (COLA) had been determined since the Retreat. Ms. Sims said Metro bargaining agreements stipulated a range of 2%-4% COLA based on the Index. While the original Index was no longer active, a proxy had been agreed upon between the union and Metro – the figure was 3.7%. Metro Code required the Executive Officer to implement COLA for non-represented employees as well. Since budgeting had been directed at 2%, it would be up to each department to manage their budget through turnover and current resources. The organizational impact would be $.5 million over budget, of which $76k would be excise tax funding. Even if a ballot measure should be mounted and passed for additional funding, money would not be available until 2003. Chair McLain noted that there were also health insurance issues as costs continued to grow that must be addressed by the Council. Ms. Sims added that a 1% PERS increase was also in the future. Councilor Monroe said some tweaking might be in order to meet all of these commitments.

Mr. Mounts noted that the Metropolitan Exposition-Recreation Commission (MERC) component of the Long Range Funding notebook had not been reviewed previously due to its completion just prior to the Council Retreat. A copy is included in the public record. Chair McLain said that the Portland Metropolitan Exposition Center (EXPO) line was surprising; she thought that with the new hall it would be pretty lucrative. She asked if there was an unknown piece that had come up. Mr. Mounts said that the project was relatively tight and the forecast now reflected MERC paying its full share of support services costs as a marginal increase. The pro-forma for the loan went out 10-years. Past 5-years there could be an uptick in the costs of a loan.

Mr. Mounts moved on to Budget and Finance Committee Draft Meeting schedule for July-December 2000. He asked the Committee for direction as to topics and dates. A copy is included in the public record. Councilor Atherton asked if he was referring to RTP. Mr. Mounts said that was part of it, but also included 2040, how to define Capital Needs, etc. Chair McLain recalled that at an earlier meeting Councilor Atherton had requested a definition of the difference between maintenance and capital improvement projects (CIP). She would like a response presented in July along with a tool for the Committee to use as an identifier in each department. Mr. Mounts responded that there was an issue of whether there were facility status reports for the various areas. Right now the categories were New Construction, Expansion and Renewal and Replacement (R&R). R&R was a borderline area where work could be operations and maintenance, or replacement of a sub-system. Ultimately it depended on what the Committee wanted to see from a capital-planning standpoint.

Councilor Atherton said it was accounting and good business practice and should be clarified. Carpet replacement and elevator pit replacement were not capital costs, but regular ongoing major repair and replacement that must be budgeted for each year in order to remain solvent. Mr. Mounts thought it could be handled in one meeting in July. Chair McLain noted the Park issue would have to be covered by August 9 to meet other timelines. She suggested that real topics with real dates might bring more interested Councilors to these meetings. Mr. Mounts agreed he would slot the topics into individual meetings with the Park issue set for July 26.

Councilor Monroe noted that if there was to be consideration of any issue for the ballot this November it would need to be done quickly. Chair McLain said Ms. Sims had stated at an earlier staff meeting that it would take 2-years to get an issue ready for the ballot. Councilor Monroe agreed with Executive Officer Burton’s suggestion that perhaps the voters might be persuaded to use part of the existing Bond monies for Parks. That could be readied for the November ballot. Ms. Sims thought that staff should do more research on how bond funds could be utilized and report back to the Committee. Her concern was that utilization might be more limited than it was currently thought. Chair McLain asked if it could be done by August 9. Ms. Sims agreed.

Mr. Mounts suggested Sept 6 be used to bring up key assumptions guiding the development of the 2001-02 budget. After that the Budget Manual would be issued to the entire organization. Chair McLain felt the September meetings should include planning and Agency funding sources. Mr. Mounts clarified that by planning she meant needs assessment. Chair McLain agreed. The Goal 5 product should be ready for review in the September/October timeframe along with the 2040 engagement program from the Communications team. She hoped to have both groups in to talk about these issues and the implications of implementation. She noted that by then many of the reports requested in the budget notes should be ready. Mr. Mounts said that would take the Committee to November and the Capital Improvement Projects (CIP) Review.

Chair McLain added it would also be the time to deal with negotiation issues that were policy driven. There were choices to be made for general assumptions used in negotiations. She asked when the cost allocation plan would be considered. Mr. Mounts reminded the Committee that by listing possible topics he had heard raised to date he was not suggesting that they should all be covered in the last half of the year. Chair McLain requested Mr. Mounts send the revised schedule to the Committee; she would disseminate it to the Council after review with Presiding Officer Bragdon.

3.  Metro Agency Funding

Chair McLain said she had hoped that Agency Funding would raise more interest than it had with the other Committee members. She now looked to November/December as the timeframe when it would be covered. She hoped that if some success could be had on a funding issue such as Parks other funding needs would seem easier to attack. Ms. Sims believed that much of the staff work on the Parks funding issue would relate to all of the Agency’s funding issues; they were all related. Chair McLain agreed.

4.  Councilor Communications

Chair McLain adjourned the meeting at 2:43 PM.

Respectfully submitted,

Pat Weathers

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF JUNE 28, 2000

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

i:\minutes\2000\budget&finance/06280bdm.doc