MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE

Wednesday, November 28, 2001

Council Chamber

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

Members Absent:

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

1.  Consideration of the Minutes of November 14, 2001, Budget and Finance Committee Meeting

2.  Report from the Chief Financial Officer

Jennifer Sims, Chief Financial Officer, gave no report.

Chair McLain moved item 7 for consideration after item 2.

7.  Draft Ordinance No. 01-931, Amending the FY 2001-02 Budget and Appropriations Schedule Transferring $316,000 from the Planning Fund Contingency to Capital Outlay and Interfund Transfers to Provide for the Purchase of Computer Equipment Under the Transportation Model Improvement Program; Authorizing an Interfund Loan not to Exceed $300,000; Amending the FY 2001-02 Capital Improvement Plan; and Declaring an Emergency.

Kathy Rutkowski, Acting Financial Planning Director, reviewed the staff report of this ordinance (a copy of which may be found in the record).

Councilor Park asked about the REM fund, making loans such as these and how this was different from other types of loans.

Ms. Rutkowski responded that the ordinance would be council policy on loan payment. The bond covenant allowed loans but not grants.

Councilor McLain said this was a policy setting ordinance, bond covenants were met, no policies or codes were being broken. This investment followed all legal actions.

Councilor Park expressed concern about doing this for the Convention Center and now for this project. We were setting a precedent by doing this.

Chair McLain explained the amendment to the Capital Improvement Plan.

Ms. Rutkowski said the legislation recognized that at times it was less expensive to borrow from yourself rather than from another entity. The legislature just made a change in law to support this type of action. Undesignated fund balance was available as long as we had met all other obligations.

Councilor Park said when we did this we needed to make sure we were doing this as a sound policy.

Chair McLain asked Dan Cooper, Legal Counsel, to respond to Councilor Park’s concerns.

Councilor Park said he thought it was a policy question rather than a legal question.

Mr. Cooper responded to Councilor Park.

Councilor Atherton spoke to bond covenant protections and felt this ordinance did not interfere with that protection.

Mr. Cooper explained further.

Councilor Bragdon felt this was a policy discussion and each case needed to be considered individually. The statute did allow this type of action.

Councilor Monroe spoke to Solid Waste funds. These funds were currently in excess.

John Houser, Council Analyst, asked for clarification about repayment.

Ms. Rutkowski said capital projects could be repaid up to five years out.

Councilor Burkholder asked about the ongoing expenses of participating in the TRANSIMS project overtime.

Ms. Rutkowski asked for clarification on Councilor Burkholder’s question.

Councilor Burkholder said he wanted to know about the ongoing costs.

Ms. Rutkowski said this ordinance intended to replace the existing computer system.

Councilor Bragdon said this was an issue of sequencing.

Ms. Rutkowski said this was the second part of this project, the implementation phase.

Chair McLain clarified the total cost of the project.

Councilor Burkholder asked for further clarification of overall costs.

Ms. Rutkowski said, until the federal government had made a decision on how this would be funded, this phase was taken out of the CIP.

Jenny Kirk, Planning Department, said this was in the CIP, it appeared that Price Waterhouse Cooper was going to do the work, however, the federal government decided Metro would put the project in place.

Mr. Houser spoke to a TRANSIMS CIP question asked previously by Councilor Burkholder.

Ms. Kirk said the computers had been typically replaced every three years.

Ms Rutkowski and Ms. Kirk spoke to costs and grants.

Mr. Houser clarified that the ordinances before Budget and Finance Committee today were in draft form so no vote should be taken.

3.  Council Policy Preferences for FY 2002-03

Mr. Houser said that the council had concluded their discussion on Parks Funding #1. No direction had been given about a November election.

Chair McLain asked for Councilor Bragdon to clarify.

Councilor Bragdon said he thought a placeholder for election costs would be good, he didn’t want to preclude any option. He wasn’t sure if there would be competing items on the ballot.

Councilor Monroe suggested that no placeholder be placed in the budget for election costs.

Councilor Park thought they should put it in as a placeholder so if in the future they did go forward it would be in the budget. It could always be taken out later.

Councilor Atherton suggested holding it in contingency.

Chair McLain directed staff to put it in contingency.

Councilor Monroe suggested that it remain unspecified.

Chair McLain addressed 2) Funding for operations and maintenance and the bulleted points. She called on Mr. Charles Ciecko for pros and cons on the bullets.

Mr. Ciecko, Regional Parks and Greenspaces Director, proposed that current programs be maintained and plan for no expansion of programs, pursuit of funding from outside the agency and continue the fund balance. They felt they had cut all of the fat out of their budget, purchased acreage had continued to grow. They were confronted with a choice of continuing current programs, they were doing only core mission programs, until a new funding source could be found. Their projection on use of fund balance did not come true. They had taken a number of actions that limited funding this last year so they had a little more time to be able to find the correct solution to the funding problem.

Chair McLain noted the direction of the department was to continue current programs and to look for outside funding sources. She asked the council for input.

Councilor Burkholder said they had asked for the Parks department to look at not having an Acquisition Department.

Mr. Ciecko responded that their base budget was what he had described. They had also put together a narrative responding to Councilor Burkholder’s request.

Councilor Atherton asked Mr. Ciecko to explain core programs.

Mr. Ciecko said core programs would be those identified in the Parks Master Plan or the Regional Framework Plan. Outreach, education, stewardship of bond purchased properties, the acquisition program as well as the parks and visitors services were also included as part of the core programs.

Councilor Monroe asked what the parks fund balance was down to.

Mr. Ciecko said it was about $2.5 million.

Councilor Monroe pointed out that the fund balance would be gone shortly. They needed to find a way to replace these funds.

Chair McLain asked if anyone would like to talk about #6 Acquisition Division. No one responded.

Councilor Burkholder spoke to Administrative Programs area, the overhead costs and how they could find savings in this area.

Chair McLain asked Ms. Sims about percentage of funds used for administrative services.

Ms. Sims responded they had a variety of analyses that showed costs of support services. This was typically part of the budget process.

Chair McLain suggested Ms. Sims speak to this at the next Budget and Finance Committee meeting.

Ms. Sims asked for clarification, was this to be focused on support services?

Councilor Burkholder said yes.

Chair McLain then addressed the General Fund area.

Councilor Atherton said we were going to keep our reserves at current level. Council agreed.

Councilor Monroe spoke to the goal of rebuilding the general fund reserve.

Ms. Rutkowski responded that at the beginning of this fiscal year, it was about $800,000. She hoped they would be able to maintain this balance but it might be lower.

Councilor Monroe suggested the goal to increase it to $1 million was a good goal even in these economic times.

Councilor Hosticka reinforced Councilor Burkholder’s request concerning support services.

Ms. Sims expressed her appreciation for the early work the council was doing.

4.  Resolution No. 01-3122, For the Purpose of Approving Metro's entry into the PERS State and Local Government Pool.

Ms. Rutkowski spoke to the history of the rate pool and reviewed the staff report (a copy of which is found in this record).

Motion:  Councilor Burkholder moved the resolution to full Council.

Seconded:  Councilor Hosticka seconded the motion.

Vote:    The vote was 7 aye/ 0 nay/ 0 abstain. The motion passed, Councilor McLain would carry to full council.

8.  Draft Ordinance No. 01-926, Amending the FY 2001-02 Budget and Appropriations Schedule

for the purpose of Transferring $43,500 From the Planning Fund Contingency to Operating Expenses to Augment the Regional Goal 5/Fish and Wildlife Habitat Protection Program; and Declaring an Emergency.

Mr. Andy Cotugno, Planning Director, explained the amendment.

Councilor Park asked whether this had to do with Ballot Measure 56 vote.

Mr. Cotugno said it was not an official Ballot Measure 56 notice but felt the informational piece was important.

Councilor Burkholder supported the expenditure, it was a well done piece.

Chair McLain agreed.

Councilor Atherton asked if they would expect a similar expenditure when they were required to do an official notice.

Mr. Cotugno said yes.

Councilor Bragdon clarified the current notice and the reason why this was done.

6. Draft Ordinance No. 01-930, Amending the FY 2001-02 Budget and Appropriations Schedule

for the Purpose of Recognizing $75,000 in Grant Funds from Tri-Met; Increasing the Planning Fund Appropriations by $75,000; Authorizing the Addition of 1.20 FTE; and Declaring an Emergency.

Mr. Cotugno explained the amendment that paid for added costs.

Chair McLain commented that the draft ordinances all seemed to be supported.

8.  Councilor Communications

Councilor Bragdon explained that, do to the impact of the legislation that needed to be considered by the end of the year, they were considering December 11^th as a possible Regular Council meeting.

Chair McLain felt this would be good use of the Council’s time.

There being no further business before the committee, Chair McLain adjourned the meeting at 3:25 p.m.

Respectfully submitted,

Chris Billington

Clerk of the Council

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF NOVEMBER 28, 2001

There were none for the November 28. 2001 meeting.