MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Wednesday, January 24, 2001

Council Chamber

Members Present:  Susan McLain (Chair), Carl Hosticka (Vice Chair), Bill Atherton, David Bragdon, Rex Burkholder, Rod Monroe, Rod Park

Members Absent:  None

Chair McLain called the meeting to order at 2:08 PM

1.  Consideration of the Minutes of December 13, 2000 Committee Meeting.

2.  Second Quarter FY 2000-01 Review

Tony Mounts, Administrative Services Department (ASD) Financial Planning Manager, reviewed the Metro Quarterly Report, Second Quarter, FY2000-01 through December 31, 2000. A copy is included in the public record of the meeting. Councilor Burkholder asked to see historical variations of projections vs. actuals. Mr. Mounts said major variations between the two could be covered with a sentence in the narrative. The committee agreed that would be acceptable.

Councilor Hosticka asked how the various funds were invested. Jennifer Sims, ASD Director/CFO, said a portion of Metro’s portfolio was invested in the Local Government Investment Pool (short-term), but the amount placed in it was limited. As a government agency Metro was required to use very conservative investment principles. She noted that the higher return this quarter was due in part to a rise in interest rates; in some cases spending had been slower than planned or revenues had come in faster.

Mr. Mounts handed out page 36A as an addition to the above report. A copy is included in the public record of the meeting. He noted that as the new flat rate solid waste fee went into effect in December, the first year’s revenues might not meet anticipated levels. This effected the reserve portion, first estimated at $200k, but revised downward to $10k-15k.

Councilor Burkholder asked if there was a corresponding reduction of costs with the reduction in tonnage through the Metro transfer stations, and if so, what the scale was and which funds were affected. Mr. Mounts said the excise tax from solid waste went into the General Fund. The revenue from the tipping fee went to the Solid Waste Fund and covered expenses for staff and transport from the facilities. The savings could be seen in the Solid Waste Fund between revenue and expenditure. Metro still controlled the flow of solid waste tonnage within the region, but the fees were collected in a different manner. He suggested that Terry Petersen, REM Director, might explain how the shift affected the Solid Waste Fund when he testified in February. Chair McLain added that Council had approved the new system structure in order to continue covering Metro’s fixed costs. Councilor Burkholder asked for the 1999-00 General Fund figures for comparison. Mr. Mounts promised a year-end reconciliation for the Councilor.

3.  Overview of 2001 Budget Committee Goals

Mr. Mounts reviewed Overview of Metro’s Budget & Budget Process. A copy is included in the public record of the meeting. Chair McLain noted the overview was “Budget 101” where funding came from, where it went and what spending restrictions were mandated. She said SWAC (Solid Waste Advisory Committee and the Rate Review Committee, both citizen groups, had been set up in the past and were specific to solid waste fee-setting. The Executive Office had set up other review groups in past years, sometimes MCCI had been involved; the methodology was still evolving.

Councilor Monroe asked if the TSCC (Tax Supervising & Conservation Commission) would still be the budget review authority after the 2000 census figures officially shifted the majority of population to Washington and Clackamas Counties from Multnomah County. Mr. Mounts said TSCC review authority was based on assessed value rather than population figures and thus would not change.

Councilor Burkholder asked where enhancement funds from landfill and transfer stations resided. Mr. Mounts responded that they were reserved under Renewal and Replacement (R&R) in the Solid Waste Fund. Councilor Park suggested that the formula for figuring the percentage of excise tax transferred to the Parks Fund might require adjustment to Council policy. Mr. Mounts said staff used the formula of 1% of 11.75% of the total tax. Chair McLain asked that the formula be reviewed at a future meeting.

Councilor Monroe asked what the breakdown on excise tax collected from the Zoo was on enterprise activities (food/catering/retail) vs. admissions. Mr. Mounts promised that the Zoo presentation to the committee would cover this information. Chair McLain noted that the only negative comments she had received were regarding the high cost of food at the Zoo. Councilor Bragdon asked what a “point” generated in revenue. Mr. Mounts thought it was approximately $.5 million. Chair McLain asked that color copies of pie charts be available for Councilor’s use when making budget presentations.

4.  2001 Committee Work Plan

Chair McLain presented a draft of the memo, Committee Work Plan. A copy is included in the public record of the meeting. Councilor Bragdon said he liked this year’s Budget Buddies system and development of Council influence on next fiscal year’s budget. He felt a similar process should be set up FY 2002-03 in the overall context of the transition. He suggested it be held in the latter part of the calendar cycle, to discuss how budgets would be prepared after January 2003. Chair McLain asked staff to add it to the calendar. Councilor Bragdon also asked that the budget side be coordinated with programs of other committees. Chair McLain requested staff add a note under long-term funding that other committees dealing with specific programs would initiate discussion on goals; then as it turned to funding strategies, the Budget committee would take over.

Councilor Monroe suggested several additions: 1). Review MERC/Metro support services to be certain there was no administrative waste with the two agencies operating separately. This would address the hospitality industry’s concerns about how efficiently the tax collected for MERC and the OCC expansion was spent, 2). Ascertain if the planning budget was adequate to meet the public mandated charter. 3). Continue Metro’s involvement in national organizations. He felt it was critical that Metro remained actively involved, 4). Eliminate excise tax on zoo admissions and 5). Look at options to maintain and improve Metro parks and openspaces.

Councilor Atherton asked if there was any interest in examining unfunded state mandates. Councilor Burkholder said he would like to better understand what Measure 7 mandates would cost the agency. Councilor Hosticka agreed that it would be useful to know how much it would cost, and if the state would fund them. Councilor Bragdon suggested the programatic committees might be a better place for a first review on unfunded mandates. He felt Jeff Stone, Dan Cooper and Bruce Warner might include the fiscal

implications of new legislature in their weekly report. Chair McLain directed staff to bring any such unfunded mandates to the Chair’s attention as they came forward and to bring the amended work plan back at the next meeting.

Councilor Park noted the mechanism was in place with House Bill 97-05 to compensate the agency for unfunded mandates. Councilor Atherton asked if it was certain that this issue was settled. Councilor Park said that the clock would start with new unfunded mandates. Anything required by the state must be funded by the state. Councilor Burkholder asked the legislative team to add this to the white paper on Measure 7. Councilor Atherton said this presentation by Ms. Coats and the financial staff was the best he had seen in his career in public service.

5.  Task Force

Councilor Bragdon explained that it had been suggested that a task force could mobilize the Council on particular issues. Councilor Atherton had been asked to head a Systems Performance Task Force to review R&R needs, a subject he had brought up at prior meetings. He and the other task force members would come back to the Council in six months with recommendations. A second issue was a follow-up on the Auditor’s recommendations with a systems performance review to be certain that all of the recommendations had been implemented. Chair McLain said Councilors Bragdon, Hosticka and herself constituted the balance of the task force. She asked that a preliminary report on the logistics of the task force be given at the next Budget meeting. Councilor Atherton said he appreciated the opportunity to focus on R&R; it was a common problem for everyone.

6.  Councilor Communications

Chair McLain adjourned the meeting at 3:32 PM.

Respectfully submitted,

Pat Weathers

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF JANUARY 24, 2001

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

i:\minutes\2001\budget&finance/012401bdm.doc