MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Wednesday, November 14, 2001

Council Chamber

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

Members Absent:  Rod Monroe (excused)

Chair McLain called the meeting to order at 2:10 p.m.

1.  Consideration of the Minutes of October 24, 2001, Budget and Finance Committee Meeting

2.  Report from the Chief Financial Officer

Jennifer Sims, Chief Financial Officer, gave her report which was attached and incorporated in the permanent record of this meeting.

3.  Resolution No. 01-3120, For the Purpose of Adopting the Capital Improvement Plan for Fiscal Years 2002-03 Through 2006-07

Kathy Rutkowski, Program Analyst, briefly explained the resolution. She referenced the proposed Capital Improvement Plan Summary which was attached and incorporated in the permanent record of this meeting. She noted the Capital Asset Policies brought forward by the Council. She also noted the changes in the CIP. Councilor Burkholder asked about PCPA major painting project and the use of recycling paint. Scott Moss, Assistant Director of Administration, said he was not aware of a recycling paint policy for Metro facilities. Councilor McLain said she thought a budget note had been made at one time regarding use of recycled paint, all facilities were encouraged to used Metro's recycle paint. Councilor Burkholder said the Regional Facilities Committee would take it up at its next meeting. Councilor McLain added that other agencies and schools had been encouraged to buy the recycle paint as well. Councilor Park asked for more detail on the generator information. Mr. Moss noted that the generator was purchased at a reduced rate from Oregon Convention Center. The generator wouldn't cover the entire building but the generator would cover the second floor RIC and the computer departments running, particularly for emergency services purposes in a disaster situation. Councilor Park asked if there were other emergency services that Metro would be required to do in a disaster situation other than REM. Mr. Moss responded that there was a role for Planning to play to accommodate emergency facilities. Councilor Park asked if the GIS system would be available under this scenario with the computers operating. Mr. Moss said this was their goal. Councilor Atherton asked about system development charges, the breakdown of capital acquisition was 4% of the total funding. Had there been any further discussion to develop SDC's? Ms. Rutkowski said she would research it and report back. He noted the adoption of the renewal and replacement policy and the request to investigate system development charges for this kind of GO bond and capital projects not related to the enterprise fund. He then further inquired about the p.7 increase in maintenance expenditures. Ms. Rutkowski responded that it was in the MERC/Convention Center expansion p. 35, the increase in operating expenditures, personal services as well as materials and services. The hotel/motel tax would help make up this increase but there would still be some operating deficit. Councilor Burkholder asked if the new generator would meet the request of IT for an uninterruptable power source. David Biedermann, IT Director, said an uninterrupted power source was not the same thing as the generator. Councilor Burkholder also inquired about connecting MERC's PeopleSoft and the Zoo network infrastructure upgrades as future projects. He wondered why they were not in this year's CIP rather than in a future year. Mr. Biedermann responded that time and money was the reasons for the delays. Councilor Atherton thanked Ms. Rutkowski for the inventory of major capital assets, it was very readable. Chair McLain asked about p.29, the general summaries for MERC, made a personal observation regarding the absence of an elevator upgrade. Mark Williams, Director MERC, asked Mr. Blosser to speak to the question. Mr. Blosser said there were space limitations regarding the freight elevators, there was no additional space for a second elevator. In the new building, there were several service elevators planned. Chair McLain asked if there was any way they could compensate in the old building. Mr. Blosser said they could take a look at this issue but it was doubtful that this problem could be solved. Chair McLain felt Ms. Rutkowski's new color-coding was excellent as well as the unfunded mandates presentation.

John Houser, Council Analyst, reviewed a memorandum he submitted to the Metro Councilors concerning potential questions/issues related to the proposed CIP. It was attached and incorporated in the permanent record of this meeting. Chair McLain suggested a written response be prepared and given to Mr. Houser for distribution to the Councilors.

Chair McLain asked staff to address Keith Lawton’s memorandum, dated November 14, 2001, regarding the Transims Project (a copy of which may be found in the meeting record). Mr. Biedermann said the memo explained the reason for funding the project this year and the reason for the prior delays. Keith Lawton, Planning Department, explained that the project had been running for a while, it was a prototype for all major cities. They were building it here because we were the right sized city and Metro had a good reputation in transportation modeling. Additional funding had occurred this year so it was timely to begin the project as soon as possible. Chair McLain noted that this project was useful for our ongoing modeling responsibilities. Mr. Lawton explained the usefulness of the project. Councilor Hosticka asked if we had intellectual property rights involved. Mr. Lawton said Metro did not, the software had been prepared by Los Alamos National Laboratories on a federal contract. Price-Waterhouse, who was commercializing it, had no rights to it either. Metro were a test bed. Councilor Hosticka asked about the benefits of the project. Metro benefited because it had not cost Metro anything to date, there was now going to be a 80/20 cost split with Metro paying the smaller amount. The software would give us the ability to do much more transportation system analyses. He gave an example of the types of analysis it would provide. Mr. Houser explained the reason why the question was raised initially. Mr. Lawton said he would not expect upgrades every two to three years.

Motion:  Councilor Bragdon moved the resolution to full Council as amended.

Mr. Houser noted the proposed amendments.

Chair McLain indicated that she assumed that the amendments were incorporated into the motion.

Vote:    The vote was 5 aye/ 0 nay/ 0 abstain. Councilor Park was not available for the vote.

Councilor Atherton asked about an existing chimney that had to be replaced.

Paul Ehlinger, REM Manager, responded that the chimney was designed and constructed prior to 1924 and explained the history.

4.  1^st Quarter Report for FY 2001-02

Sarah Follette, reviewed the document, First Quarter, FY 2001-02 through September 30, 2001. It was attached and incorporated in the permanent record of this meeting. Councilor Hosticka asked what “below expectations,” or “as expected” meant. Ms. Follette responded to Councilor Hosticka's question and continued with her report. Councilor Park commented on the excise tax and the tonnage reduction in the region. Chair McLain felt the quarterlyreports were very useful. Kathy Rutkowski said they would be closely watching the activity on the excise tax and the activity on the Convention Center. She also commented on the bond issue.

5.  Council Policy Preferences for FY 2002-03

Chair McLain asked Mr. Houser to review the document he prepared entitled “Budget Policy Priorities/Direction for Fiscal Year 2002-03.” This document was attached and incorporated in the permanent record of this meeting. Mr. Houser said he and Ms. Coats had interviewed all of the Councilors individually and drawn up the document. Some of the information obtained was contradictory as the councilor’s opinions differed. Chair McLain asked if the committee could agree on where there would actually be changes in expenditures in the budget. Councilor Bragdon commented that savings were going to occur from the restructuring that took place. He felt the Task Force would be answering many of these issues and these could not be answered at this time. Chair McLain concurred about savings from reorganization. She wanted to address savings in other areas beyond restructuring. Councilor Park said the FTE changes were the ones he was focusing on. He felt that we should not reallocate these savings until they could see what the savings were. Chair McLain asked if the committee could agree on items without placing “numbers” on them. Councilor Burkholder said eventually yes, but not during the budget session. He felt it was unknown what those savings would be. Mr. Houser asked how the committee wanted the Executive Office to submit their initial budget? Should he assume all positions were to go away. Councilor Hosticka said the structure would not yet be determined by the time the budget was prepared. Councilor Hosticka said that the restructuring savings should be shown because of the charter change. Chair McLain said there should be no numbers put out there unless they knew what they represented and that options be discussed before being made public concerning the savings. Councilor Bragdon added that savings should be achieved and the public would expect to see these changes for January 2003, which was more important than the first half of the fiscal year. For the budget of 2002-03, effective July 1st, the first half of the year should be status quo, for the second half specific FTE's would be inappropriate but there should be an understanding that there would be budget amendments expected in the Fall of 2002. Ms. Sims summarized that to portray things as they were was appropriate and to make adequate contingency for modifications when things became more clear. Councilor Hosticka said what he would not want to see was a balanced budget that did not disclose the changes. Councilor Park said FTE was a way to track the administrative function of the agency, that was what was promised to the voters. There was a savings because we were able to streamline the administrative part. He wasn't sure they could show a savings in the upcoming year but in future years it was important that this be shown. Councilor Bragdon asked how vague could we be in the second half to avoid confusion. The FTE issue would be resolved in time. Chair McLain gave her perspective of how the budget should look, there needed to be something put in the spaces. Ms. Sims said we needed to show FTE, either as it was today, or to do some minor reconstruction around the known and then adjust forward from there. The specificity was required, number of FTE, levels of compensation, and these issues needed to be addressed in the proposed issues. Councilor Hosticka asked how specific did we have to be? Ms. Sims replied we must show by organizational unit, the FTE, the positions and whatever line items were chosen. She cautioned one point of review, the TSCC might question a budget that was all based on contingency, without resources identified. Councilor Park suggested leaving the FTE in as it was now, budget as if they were going to be spent, and make changes as decisions were made. He felt this was the best course of action, budgeting the funds as if you were going to spend them yet allowing flexibility. Chair McLain said flexibility was important. We did know that the Executive Officer would be paid through the end of the December and that there would be an agency manager beginning in January 2003. Ms. Sims summarized the councilors' comments and goals as well as the two step savings process expressed by the council. Mr. Houser made a comparison to the Auditor’s Office and how a space holder was created because of the uncertainty. He made some additional suggestions for the proposed budget.

Chair McLain continued to the item “Charter Savings Parks Funding.” Councilor Bragdon summarized the options. Chair McLain wondered if this was practical approach. Councilor Hosticka asked for the difference between a budget amendment and a supplemental budget and how those difference effected this discussion. Ms. Rutkowski explained the differences. Councilor Hosticka asked if there were different hearing requirements. Ms. Rutkowski responded yes and explained further the differences. Councilor Hosticka summarized the options. Ms. Rutkowski said with a supplemental budget process you would have to have additional revenue in which to recognize to provide the additional appropriation authority. She spoke to the issue of contingency. Councilor Hosticka suggested that he was anticipating that the November election would be for the purpose of providing revenues. Ms. Rutkowski said he was making the assumption of the revenues to the fund that was going to receive it. Yes, then if that were to happen they would do a supplemental budget to recognize the additional revenues that would come in. She noted the issue of the election expense. Ms. Sims noted that any revenues that would be authorized through an election would not be received until the following year. The short-term issue for this budget was the cost of the election. Chair McLain said she was not personally ready to go to the ballot for a vote on green spaces. Councilor Atherton said you didn't have to have that as a designated item, it could be in a contingency. This had been done in the past. Chair McLain asked for the council's perspective on the election. Councilor Burkholder asked if they didn't have a budgeted election expense already since several councilors were up for election. Ms. Sims said they were charged by the item and this would be a substantial increase because it would be region-wide. Chair McLain suggested this item be continued. Ms. Sims said this discussion was helpful.

6.  Councilor Communications

There being no further business before the committee, Chair McLain adjourned the meeting at 4:05 p.m.

Respectfully submitted,

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF NOVEMBER 14, 2001

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

i:\minutes\2001\budget&finance/111401bdm.doc