MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Monday, July 24, 2000

Council Chamber

Members Present:  Susan McLain (Chair), Bill Atherton (Vice Chair), David Bragdon, Rod Monroe, Rod Park, Ed Washington

Members Absent:  Jon Kvistad

Chair McLain called the meeting to order at 3:33 P.M.

1.  Consideration of the Minutes of July 12, 2000 Committee Meetinga.

2.  Regional Parks

Chair McLain noted that the Budget Committee would look at high priority needs outside the current budget. At the next two Budget meetings Regional Parks funding needs and possible uses of the remaining bond funds would be discussed. She asked Charlie Ciecko, Parks and Greenspspaces Director, Jennifer Sims, Administrative Services Department (ASD) Director/Chief Financial Officer and Kathy Rutkowski, ASD Analyst, to speak to the memo, Funding Needs for Regional Parks and Greenspaces, A copy is included in the public record. Mr. Ciecko thanked the Council for identifying Parks funding as a priority. He felt this was the next step in the program as envisioned in the Greenspaces Master Plan and specifically called for in the Regional Framework Plan.

Ms. Sims said ASD planned to update the financial information based on the recently ended fiscal year along with some changes to the 5-year forecast. It would be ready for review in September along with cost management information that the Committee had requested, as well as the fiscal assumptions for building the 2001-02 budget. She noted that this memo was a collaborative effort between Parks, ASD and Executive to clearly lay out the different levels of funding needs. All figures were based on current year dollars and were preliminary numbers. Chair McLain asked if funding need priorities had been established. Could some components be done independently of others, or did all components have to be done simultaneously. Mr. Ciecko responded that it was all policy related and some of the issues she had raised were covered in later segments of the presentation.

Councilor Bragdon asked if Mr. Ciecko had a ballpark idea of the needs that existed in local jurisdictions and if he foresaw a continuing working relationship with these jurisdictions. Mr. Ciecko said that while he could not give exact numbers, the need at the local level was significant. Along those lines a subcommittee had been created to address some of the local parks issues. It was drafting a report to MPAC that he expected to be near finalization when MPAC met July 26. While it would not address gross need in terms of dollars, it would acknowledge the significant need on the local level. He said the report would make some general recommendations regarding a potential Metro role in helping to address that need. Councilor Bragdon asked the Chair to add this item to the Committee’s to-do list. Chair McLain felt that Metro had done a good job of tracking where cities and counties had spent the Bond money. The basis for this work was already available, at least informally. She had attended Hillsboro Park Advisory committee meetings and they had set out how the money would be spent between facilities, openspaces and greenspaces. This information related to how Metro should use its resources and how connections between Metro and local jurisdictions would benefit the region the most.

Jim Morgan, Parks and Greenspaces Program Supervisor, spoke to habitat restoration. He said the term landbanking referred to preventing any further degradation of the properties Metro had acquired. The annual cost was $.5 million on a 10-year plan. Chair McLain asked if the memo contained examples of the grants that were in place. Mr. Morgan said one example was a $242k grant from the Department of Agriculture to put in water control structures at Multnomah Channel for wetland enhancements. Up to an additional $110k came from the Oregon Washington Enhancement Board over the past 2 years. Mr. Ciecko added that the Conservation Reinvestment Act, currently in Federal congressional committee, should bring $50-60 million to the state annually when it passes. A good amount of it would be available through the Land & Water Conservation Fund and through restoration grant programs to be administered by the Oregon Department of Fish & Wildlife. In order to compete for any of these grant programs matching funds were needed.

Heather Nelson Kent, Parks and Greenspaces Planning & Education Manager, cautioned that usage plans might change dramatically after public input had been gathered. Mr. Ciecko clarified that the figures on page 5 were only to develop currently undeveloped Metro property purchased as part of the 1995 bond issue. Councilor Atherton asked for clarification of estimated annual maintenance. Ms. Kent answered that the full price was $5.3 million/year as shown on page 3 with a breakdown by park type on page 5. Ms. Rutkowski added that the figure on page 5 was for five Type 1 parks. She noted that until public outreach was done it was pure speculation as to what type and how many of each type of park the public desired. Councilor Bragdon asked how capacity was monitored to be sure parks were not overused. Ms. Kent responded that this problem was addressed in the park’s master and management plan. That too would be part of the public involvement segment of the Master Plan. Mr. Ciecko said development was tied to what staff believed should be peak capacity for each park. Amenities were designed to meet that capacity. Chair McLain noted there might be a difference between what a park could handle and what its eco-structure could tolerate. Mr. Ciecko agreed and said it was a balancing act. He cited a recent example, the Oxbow Park planning process, where there was a desire to accommodate more people than staff felt would keep its bio-diversity intact. He believed that Metro had been fairly successful by limiting development to 10% of the park’s landmass. Time would tell if that were true.

Councilor Bragdon asked if the term ‘development’ meant capital improvements outside of the regular operating costs. Ms. Rutkowski said certain development costs outside of Measures 5 and 50 were better funded by general obligation bonds. There were local option levies for both operating and capital available under Measure 50, but they were still subject to Measure 5 limitations of $10 per $1,000 of assessed value. All operating costs fell under the limits of both measures. Councilor Atherton asked if setting up a legacy fund whose proceeds would be used for maintenance and operations of parks had been established as legal. Ms. Sims said that Mr. Cooper, General Counsel, had advised staff that the existing bond funds could not be used for maintenance, but a new fund with a revenue source could if structured correctly. Operations money could be used for capital, but money approved for capital, especially for bond measures, could not be used for operation. Usually when a measure went to the voters, capital needs were separated out from operating needs. Councilor Atherton said that what he was talking about was a hybrid. Ms. Sims agreed that this would raise unique issues. If a bond measure should be developed its uses would have to be articulated. She had not researched the issue to date.

Chair McLain noted that the $135 million bond issue had identified a portion to go to local jurisdictions for capital projects. She felt this was similar. Ms. Sims said the difference was that Councilor Atherton was speaking about asking for money that would never be spent, but rather the interest accrued on that money would be used for operations and maintenance. Chair McLain said that when the Committee got to revenue sources this could be discussed further. Councilor Monroe noted that Executive Officer Mike Burton had suggested that Council might ask the voters for permission to use some of the capital bond money for development. He asked if Mr. Cooper’s view was that this was not a legal option. Ms. Sims agreed that was the correct interpretation. Mr. Cooper had indicated that it was not allowed since bondholders bought these bonds under a set of assumptions that could not be changed.

Councilor Monroe asked about compression under Measures 5 and 50. Ms. Sims said it would be uneven across the region; some areas would experience compression while other areas would not. Councilor Monroe said he would like Metro to look at possible sources of revenue other than property tax for ongoing maintenance and development of the Metro park system. He hoped that another source could be found. Mr. Ciecko suggested it would be useful to draft a memo to legal counsel requesting possible options for legal use of existing Bond funds. Chair McLain concurred.

Jim Desmond, Parks and Greenspaces Manager, noted that staff had received a sense of strong support from the community for system expansion. There seemed to be more support now than in 1995 for smaller, fragmented sites within the urban growth boundary (UGB). If neighborhood sites were found to be the direction for further expansion, the per-acre value would be significantly higher along with management costs. He said some policy decisions would be needed before proceeding further. The Landowners Incentive program would require something such as a tax abatement program in order to work. A number of decisions would have to be made. Chair McLain asked what the unknown was within the three types of expansion issues (size, inside vs. outside UGB and type of development). Mr. Desmond responded that all of the issues would impact value. Chair McLain asked if he was suggesting that Metro rethink its philosophy on acquisition criteria.

Mr. Ciecko noted that the missing piece was that Council had not formally identified was what comprised the regional system. He recommended Council formally make that decision prior to further discussion of going out with a bond measure. Chair McLain felt the Greenspaces Master Plan and the Regional Framework Plan might need some updating, but had laid a solid foundation for the system. Mr. Ciecko agreed and said this would be the next level of detail in the process. These parcels were now part of the regional system, ultimately to be acquired by Metro, Metro’s local partners, or in private ownership that would be addressed through education and incentives. Mr. Desmond said the public’s desire seemed to be for more park access throughout the region. While some jurisdictions already had detailed lists of possible acquisitions available smaller jurisdictions did not have the necessary staff to complete this sort of evaluation. He felt the program had worked well in the last bond issue and would work well again if funding could be found.

Mr. Ciecko cautioned that if it was decided to convene a Citizens Blue Ribbon Committee the focus should be narrowed to a more manageable size from the suggestions made in the memo. He reiterated that the plan also should be made more specific as to what was in the system and what was not. Councilor Atherton asked if staff had looked at a parks system development charge (SDC). Mr. Ciecko responded that the report did not discuss possible funding sources, but simply attempted to identify, from a staff perspective only, what were believed to be the present challenges. Councilor Atherton said he raised the issue because a longer lead time than 15 months would be necessary in order to put an SDC in place.

Councilor Park asked why this discussion was not being worked through the Operations committee. He felt it was a long way from being a budget issue at this stage. Chair McLain indicated that there was an overall budget strategy; and specific programs might end up with a referral to two committees. In this case there were general budget issues for which the operations committee needed some guidance before a substantial parks program could be discussed. After the Council retreat this Committee set up a calendar focusing on future needs for Metro and its programs, along with necessary funding. One of last year’s budget notes asked Parks staff to develop recommendations for expenditure of the remaining 1995 bond funds. Some of that work would go to Operations while some would reside with Budget. She did not feel that this work was misplaced or unnecessary. Councilor Park said it was his opinion was that this was the wrong place for this discussion based on where Metro was in the process.

Councilor Bragdon stated that he felt it was the appropriate place since it was the leading financial issue the Council had identified. As plans came forward the details would be dealt with in the appropriate forum. Councilor Washington thanked Mr. Ciecko for the presentation. His concern was not so much that it was heard in the wrong place, but rather that there was a fine line between the appropriate venues. Councilor Monroe asked if the strict limitations placed on SDCs by the State legislature allowed for the use Councilor Atherton had suggested. Mr. Ciecko said he did not have the answer at this time. Councilor Monroe asked that Metro legal counsel be consulted to supply the answer. Councilor Bragdon clarified that the question of whether Metro Parks were eligible for an SDC was yes. Legally the second part was the nexus between new development and the incremental service being provided occasioned by the development. Councilor Atherton said he understood that with a regional plan a regional SDC was possible. Service districts as well as municipalities could have SDCs.

Chair McLain appreciated the good work by Parks staff; especially the work on the two levels of funding. She assured everyone that there would be further conversations between the Chair and the Presiding Officer as to the gray area between Operations and Budget. The next item on the agenda would be possible uses for remaining bond funds. It would be discussed at the August 16 Budget meeting. Ms Sims suggested that some direction would be required from the Committee. 1) Time frame for considering a ballot measure – staff had tentatively looked at November 2002 and 2) If the Committee wished to pursue a ballot measure it would require a budget be drawn up along with the current status of the various department’s fund balances. These figures should be ready within the next 2-months.

2.  Councilor Communications

Chair McLain adjourned the meeting at 5:00 PM.

Respectfully submitted,

Pat Weathers

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF JULY 24, 2000

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

i:\minutes\2000\budget&finance/07240bdm.doc