MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Thursday, July 25, 2001

Council Chamber

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

Members Absent:  Carl Hosticka (Vice Chair)

Chair McLain called the meeting to order at 2:07 p.m.

1.  Consideration of the Minutes of July 11, 2001, Budget and Finance Committee Meeting.

2.  Communication from the Chief Financial Officer.

None.

3. Debrief and Evaluation of Budget Process.

Pete Sandrock, Chief Operating Officer, said that there was agreement among Cabinet members that progress had been made in the past year’s budget process. Over the course of the next several Cabinet meetings, directors would address their priorities as a management team. These would be presented to Mike Burton, Executive Officer, who would follow up with individual councilors. This step would occur early in September so that a more complete goal-setting could occur at the retreat on September 25, 2001. Chair McLain said that councilors had expressed an interest in reviewing financial policy, and asked Mr. Sandrock to address financial policies when speaking with the department directors. Presiding Officer Bragdon commended the process and suggested that it be included in the retreat agenda.

Chair McLain spoke to the July 9, 2001, memo from Tony Mounts, Financial Planning Manager, regarding the results of the FY 2001-02 Budget Process Debrief Questionnaire. Mr. Mounts said a general theme was that last year’s process had worked well with early involvement of Council in direction-setting and Council staff in development. He noted an opportunity for improvement in linking goals with outcomes. He said that improving public involvement throughout the process was something that most public jurisdictions were also struggling with.

Chair McLain said that three years previously the Executive Officer had directed each department to involve chosen citizens in a budget committee. She asked how this had been working. Ms. Sims responded that standing committees had been found to be useful. She suggested looking at how different jurisdictions were using alternatives, such as website discussions, to supplement largely unattended public hearings. Mr. Mounts said there were three phases of the process: direction-setting, development, and review/approval, and that citizen involvement served a different purpose for each phase.

Councilor Park recognized that recommendations usually made by the Executive Officer would be more reflective of the Council in 2003. He asked if, from a policy standpoint, submitting packages would be more appropriate. Ms. Sims said that for decision-making, packages for certain types of functions could be helpful. She said that under the current budget law, it was the Executive Officer’s responsibility to propose a budget – this didn’t mean packages couldn’t be submitted outside of that budget. Chair McLain said that the Executive Officer had used different types of packages for different departments and that indicated some flexibility.

Councilor Park said that the future Agency Administrator would deal with seven or eight different opinions, and that a dry run to approach the new model was a good idea. Discussing how to build the budget would create a policy dialogue. Determining necessary staff support for this would be helpful, and it would also help with citizen education.

Mike Burton, Executive Officer, said that timelines would need to be set. He noted that only a certain discretionary amount of money could be moved within the budget. The Agency Administrator would need to do something similar to give staff time to debate options before budget passes.

Presiding Officer Bragdon said that any proposal must include the Council’s priorities. Building the priorities into the process was important and the Agency Administrator should be sensitive to them.

Councilor Burkholder commended Peggy Coats for her role in the budget process. He asked about linking performance to budgeting, recognizing that currently it was line item by department. He asked if there was a proposed workplan to implement all of the recommendations in Appendix 4 of Mr. Mounts’ report, and how it related to the March 30, 2001, Budget Note, which is included as part of this record. Mr. Mounts responded that the sample workplan was for educational intent, and that no current workplan had yet been created. The Budget Note was a foundation for all of the recommendations. He believed it was useful for the committee to review the recommended practices to determine their desirability for the agency.

Mr. Burton commented that the linkage aspect of performance was important. Setting a goal for a department had to take into account what resources the department needed. He was in favor of citizen education on the grounds that it would result in a better understanding of the agency, which held public relations value.

Councilor Burkholder proposed going through the recommended budget practices of the National Advisory Council on State and Local Budgeting in Appendix 4 step by step to determine each step’s importance. Chair McLain said that the material would certainly be useful and that all councilors would be consulted.

4.   Update of Long-Term Funding Issues.

Chair McLain spoke to the July 24, 2001, memo from Ms. Sims, which is included as part of this record. Ms. Sims said the memo was a response to the July 11, 2001, Budget Committee request to look at agency funding needs. Recognizing that the first step would be a needs assessment, the memo outlined the project and requested direction from the Council, including a target date for the assessment. A comprehensive assessment of Metro’s operating and capital needs would be prepared, focusing only on funds listed in the memo. The plan of approach would be to take current operating budget information and CIP information and provide a forecast. The forecast would become a base to look at needs. She said that any additions would directly impact staffing. She said that Budget Note 3 posed a request to the Executive Officer to provide a proposal to the Council to do this work by October 1, 2001. She proposed starting the work right away as some elements were already in place.

Chair McLain confirmed that the Budget Note did not preclude the Executive Officer from proposing something on his own. She said there was no question that the work for the needs assessment would be done. At the July 11, 2001, meeting the committee had asked for a baseline and Ms. Sims had enough information to forecast a five-year look at present programs. She recommended using existing Oregon Convention Center (OCC) information in the baseline. Regarding the timeline, the Council was committed to act within the next six months.

Councilor Burkholder said it was critical to see the cost assumptions for existing programs before deciding whether to add or eliminate programs. He also said that assumptions about inflation were important. He believed the Budget Note asked for an analysis of the scope to accomplish the work.

Chair McLain said that she believed a baseline would consist of all options, and then adding to or subtracting from those options was a next step.

Mr. Mounts responded that when a budget wasn’t presented by program, the forecast would have the same limitations. If there was a desire to be able to do marginal changes, the October proposal would reflect the effort to get there. He said it was easier to identify packages on the margin in terms of adds. He noted that existing information from Parks, Metropolitan Exposition-Recreation Commission (MERC), auditor recommendations and Regional Environmental Management’s (REM) upcoming rate-setting process could all be used. Planning and the Zoo would have to expend the most effort to develop new information. He said that to create the forecast supporting the 2003 budget, staff would take the adopted budget, project the ability to carry it forward, then add new information as needed. Any additional refinements could be done later in the fall.

Chair McLain said she saw three steps: 1) assessment/baseline, 2) strategy package of how much it would cost to address the need assessment, and 3) strategy options after money had been put to the task. Ms. Sims said the intent was to look at Metro’s funding needs, not the regions’ infrastructure funding needs. She referred to a past published document, “Metro Funding Needs”, which she had found confusing because it included everything from Parks to the Exposition Center to $200 million for roads and transportation projects. She requested clarification whether this was a policy Metro wanted to fund. Chair McLain recognized that the Regional Transportation Plan (RTP) and the 2040 Growth Concept both carried Metro’s name, and certain requirements were necessary for regional connections. She did not want to include every aspect of the RTP, but portions of that infrastructure cost would need support. The committee should receive all information before winnowing it down.

Councilor Atherton asked whether this process was necessary. Chair McLain responded that a lot of functions, departments, and programs were reviewed during each budget year, but that, strategically, a comprehensive look at long-term obligations was needed to make long-term choices. Councilor Atherton said that Metro was not responsible for developing areas brought into the Urban Growth Boundary (UGB). Chair McLain responded that Metro did have regional responsibilities in the areas of transportation and greenspaces, and acknowledged that this issue would need further debate.

Mr. Mounts clarified that the needs assessment would be the first step of the process proposal due to Council on October 1, 2001. The proposal at hand was to move forward on the first step while mapping out the rest of the approach to developing a strategy.

Councilor Park said that, regarding Step 2, if proposals were being considered for new funding sources that Council should decide it was something worth pursuing before the information became public. Chair McLain confirmed that Step 2 would have no recommendations.

5.   Confirm Schedule for Systems Task Force.

John Houser, Council Analyst, spoke to the Draft Systems Performance Task Force Work Plan, which is included as part of this record. He said the Task Force had met the previous day and tentatively approved a timeline for their activities. The next meeting’s purpose was to receive from various agency departments an overview of how each addressed capital asset management. The remainder of the workplan timeline was a series of two to three meetings at which the Task Force would give direction to staff regarding proposals to develop a capital asset management program. He anticipated that the Task Force would complete its work around the middle of October.

Councilor Atherton said that the term “major maintenance” would be replaced by the term “renewal and replacement”. He looked forward to his Task Force delivering a solid product.

6. Councilor Communications.

None.

There being no further business before the committee, Chair McLain adjourned the meeting at 3:33 p.m.

Respectfully submitted,

Cary Stacey

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF JULY 25, 2001

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

i:\minutes\2001\budget&finance/072501bdm.doc