MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Tuesday, February 27, 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 2:12 PM

1.  Consideration of the Minutes of February 14, 2001Committee Meeting.

2.  Ordinance No. 01-891 For the Purpose of Adopting the Annual Budget for Fiscal Year 2001-02, Making Appropriations, and Levying ad valorem Taxes, and Declaring an Emergency.

Chair McLain began with a General Fund related department wrap-up. Councilor Bragdon asked what the timetable was on Council analysts’ questions to departments and their response. Peggy Coats, Council Analyst, responded that questions would be distributed today and at the next two meetings. General Fund departments’ written responses would be presented 3/13, Enterprise Fund 3/14 and Support Services/Miscellaneous Funds 3/22. The committee would have the opportunity to ask additional questions at that time.

Jennifer Sims, Administrative Services Department (ASD) Director/CFO, spoke to a memo, Adjustment to FY00-01 Estimated Ending Fund Balance. A copy is included in the public record of the meeting. Councilor Monroe asked why the estimate of election fees was off by $36k; he felt that missing the target by 20% was unacceptable. Ms. Sims said the formula for calculating the charge was complex and often came in higher than anticipated. Chair McLain asked Ms. Sims to submit a written explanation to the committee. Councilor Bragdon asked how the tonnage estimates influenced the excise tax. Ms. Sims said revenue was based on an estimate of what the tonnage and recovery rate would be. When the forecast for the aspirational rate was higher than the actual rate realized, it effected the anticipated surplus. In the first year of the flat rate and with declining tonnage, it was now projected that there would be no cushion and in fact, there would be some reduction to the beginning balance of the reserve account.

Tony Mounts, ASD Financial Planning Manager, noted that the formula that drove the rate did not forecast tonnage; Metro was required to use last year’s actual tonnage as the basis for determining next year’s rate. In an environment where tonnage was declining the potential to use up the margin was built in to the formula. Next year’s rate would be based on a full 12-month period. This year covered only seven months, so the margin was smaller. Tonnage would have to drop 7%-8% in 2002 order to use up the entire margin designated for the rate recovery reserves.

Mr. Mounts spoke to the Enterprise Related Departments overview. A copy is included in the public record of the meeting. Councilor Burkholder asked about the in REM (Regional Environmental Management) Rehabilitation and Enhancement Fund and the lack of FTE for staffing. Mr. Mounts said there was a transfer from this fund into the Operating Fund to cover those costs. Councilor Bragdon asked if the Rate Stabilization Fund still existed. Mr. Mounts said it did; in case of a recession and if tonnage drastically dropped, that reserve would be tapped rather than instigating a substantial mid-year rate hike. The fund was held at $3.2m; the remainder needed to subsidize the $62.50 rate came from the Undesignated Fund. Chair McLain noted that the Rate Review Committee planned a discussion of the Regional Systems fee that dealt with both funds. Councilor Bragdon asked what plans had been made in case of a change in solid waste transportation costs. Mr. Mounts said that the forecast was based on the current contract.

Councilor Monroe asked what attendance was projected for the Zoo. Mr. Mounts said 2001-02 projections were conservative (1.1m), since attendance always depended on weather conditions. Attendance so far this year was higher, in part due to good weather. Councilor Hosticka asked about Zoo funding. Mr. Mounts said it was funded by an operating levy dedicated to the Zoo; that was the property tax estimate in the Zoo Operating Fund. Debt service was in the General Obligation Bond Fund which also covered debt for the Open Spaces and the Oregon Convention Center (OCC) bonds. It would be covered under Support Services Fund and miscellaneous funds at tomorrow’s meeting.

Tony Vecchio, Oregon Zoo Director, and Kathy Kiaunis, Deputy Director, spoke to Council Budget Briefing Oregon Zoo. A copy is included in the public record of the meeting. He noted that even with a proposed hike in admission charges the Oregon Zoo would have the lowest entry fees on the West Coast. Councilor Monroe asked how much time remained on the Zoo light rail station construction bond and what percentage of Zoo visitors rode it. Mr. Vecchio said 17 years remained on the 20-year bond. Last summer 30% of zoo visitors rode MAX, but prior and after that ridership was steady at 17%, according to visitor surveys. Councilor Monroe offered to try to help facilitate a subsidy for Zoo patrons riding MAX with Tri-Met. Mr. Vecchio said that according to the survey less than 4% cited cost as a deterrent to riding MAX; 60% said that it was not geographically feasible for them and 20% said it was too much hassle. Councilor Monroe also suggested that a Zoo admission/MAX package for OCC visitors might work. Chair McLain noted that a conference she was involved with at OCC last June saw 1,700 out of the 3,000 attendees take advantage of such a package.

Councilor Burkholder asked for help in understanding how the Oregon Zoo Foundation operations related to the Zoo in staffing, funding and performance measures. Mr. Vecchio said that as Foundation president he would be happy to help; performance measures were figured conservatively, like attendance figures, and based on historical data. He felt the Foundation had done a phenomenal job over the past two years in cultivating donors, but it took time to build strong relationships.

George Bell, MERC Commission Chair, provided an overview of MERC (Metropolitan Exposition-Recreation Commission). He felt good about the close working relationship established this year between MERC and Metro staffs. He noted that this budget was a construction budget with the OCC (Oregon Convention Center) expansion. Additionally this bond would give PCPA $2.1m in immediate capital assistance and ongoing operational support. He noted that Hall D at Expo should open ahead of time, ahead of schedule and under budget.

Mark Williams, MERC (Metropolitan Exposition-Recreation Commission) General Manager, reviewed Enterprise Fund Review MERC Presentation. A copy is included in the public record of the meeting. He said this year’s budget contained a number of solutions for long-standing problems. Councilor Monroe asked if higher costs due to the delay in construction were balanced by the lower interest rate on the bonds (5.1%). Mr. Williams said increases were due to a combination of construction and inflation-related costs, as well as construction changes required by the City of Portland Planning Department. No comparison had been made.

Councilor Burkholder asked how long-term regional needs were addressed. Mr. Williams said MERC proposed no role in future needs since no money was available. He thought it should be a Council decision. Chair McLain suggested it was a subject to be discussed at the upcoming Council Retreat, and that the new OCC Advisory Committee might put this subject on their agenda.

Terry Petersen, REM (Regional Environmental Management) Director, reviewed REM Department Proposed FY 2001-02 Budget. A copy is included in the public record of the meeting. Chair McLain noted that on her visits to Hispanic advocacy groups it was stressed that recycling materials should have less text and more pictures. She asked about the DEQ plan for St Johns Landfill. Mr. Petersen said Metro had not yet received DEQ’s final plan, but he was confident it would be complete by late October 2001. Councilor Burkholder asked when the Strategic Plan would be complete. Mr. Petersen said it was due for completion in October 2001. Councilor Atherton noted that the Solid Waste committee would begin work sessions on this topic March 7. He encouraged all Councilors to attend.

Mr. Mounts reviewed Status of Agency Capital Reserves. A copy is included in the public record of the meeting. Chair McLain noted that a task force had been formed to deal with this topic.

Ms. Coats reiterated the Council Analyst Questions/Issues process. After each department made its report, Council analysts would submit questions to department heads with copies to the committee. Departments would then have a chance to respond and the committee would review their answers. Today questions related to General Fund departments (Planning, Regional Parks and Greenspaces, Council and Executive Offices) were passed out. Copies are included in the public record of the meeting. She also solicited questions from the committee; The analysts would be happy to review any material for the Councilors. Chair McLain noted that the Budget amendment form should be used for any potential amendments. A copy is included in the public record of the meeting.

3.  Councilor Communications

Chair McLain adjourned the meeting at 4:01 PM.

Respectfully submitted,

Pat Weathers

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF FEBRUARY 27, 2001

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

i:\minutes\2001\budget&finance/022701bdm.doc