MINUTES OF THE METRO COUNCIL BUDGET & FINANCE COMMITTEE
Wednesday, March 13, 2002
Council Chamber
Members Present: Rex Burkholder (Chair), Bill Atherton, Susan McLain
Members Absent: David Bragdon, Rod Monroe
Chair Burkholder called the meeting to order at 1:45 p.m.
1. Ordinance No. 02-940, For the Purpose of Adopting the Annual Budget for Fiscal Year 2002-03, Making Appropriations, and Levying Ad Valorem Taxes, and Declaring an Emergency
Chair Burkholder briefly reviewed the budget process to date and explained that this meeting was a continuation of the department presentations begun on March 12.
Department Presentations
MERC
Judy Rice, MERC Commission Chair, reported that a committee, formed for the purpose of developing MERC's budget, held a series of public hearings in September and October, 2001, and formulated the proposed budget based on that input.
Mark Williams, General Manager of MERC, gave a broad overview of MERC’s budget and highlighted major issues. Copies of the budget outline and Mr. Williams’ talking points are attached to this record.
Mr. Williams noted for future reference that the Visitor Development Plan, which funded the Oregon Convention Center (OCC) expansion, allowed for a lump sum of increased operational support for OCC during the first five years of the plan. He explained that after five years, there will be no guaranteed additional operating support for OCC, despite the fact that the convention center building is doubling in size. He put the committee on notice that in FY 2005-06, the Metro Council President will need to make a decision regarding a future operational subsidy for the OCC. If necessary, a dispute resolution process will be triggered to resolve any disagreements.
Councilor McLain requested copies of the Intergovernmental Agreements (one between Multnomah County, the City of Portland and Metro and a second with private parties, including theTri-County Lodging Association and the Car Rental Association) which spell out the subsidy arrangement. She questioned Mr. Williams about the possibility of an exposition center being built in Hillsboro. Mr. Williams said that MERC is providing technical assistance to Washington County on this issue and that they are working on a cooperative arrangement to prevent a competitive situation from developing with the existing Expo Center.
In response to a question by Chair Burkholder, Mr. Williams said that MERC has not experienced the increase in utilities costs that they anticipated, partly because costs did not increase as much as expected and partly because staff has done a good job holding down energy use.
Mr. Williams noted that the OCC would still benefit from having a headquarters hotel. Chair Burkholder mentioned that the Council would hear from POVA about the headquarters hotel idea and other matters that relate to OCC funding at a Council Informal meeting in April.
Oregon Zoo
Kathy Kiaunis, Deputy Director of the Oregon Zoo, gave an overview of the Zoo’s budget and funding outlook. A copy of Ms. Kiaunis’s presentation is attached to this record. She explained that Zoo revenue is driven by attendance and that the Zoo is predicting attendance more aggressively for FY 2002-03. The budget also includes a $.50 fee increase effective January 1, 2003. She said that enterprise revenues, although increasing, are not keeping pace with expenditures.
Councilor McLain noted that the Council had just recently approved an admission fee increase. She asked whether the Council had been given a “heads up” that another increase would be needed this quickly. Council and Financial Planning staff indicated that they would check into this.
Councilor Atherton asked about the Zoo’s repair and replacement policy. Ms. Kiaunis responded that, in the long term, the Zoo plans to grow and develop, but first they need to secure adequate funding.
Mr. Houser asked if attendance and revenues were meeting projections for the current fiscal year. Ms. Kiaunis said that the Zoo is monitoring its attendance and that, although they are running slightly behind projections, they are basically on track. Mr. Houser asked if the Zoo anticipates any further transfers from the operating fund to the capital fund. Ms. Kiaunis responded that they do not anticipate any such transfers. Mr. Houser asked for clarification on the assumption of an increase in donations for FY 2002-03. Ms. Kiaunis responded that a big portion of the increase was related to enhanced Zoo Foundation donations for specific purposes.
Chair Burkholder said that he was concerned that the Zoo was spending more on capital and increasing its costs but had not identified revenues to cover that cost. He wants to address this during this budget process to avoid the Zoo running a deficit in the future.
REM
Doug Anderson, REM’s Financial Management and Analysis Manager, presented REM’s budget as outlined in the handout attached to this record. Also attached is an additional handout, which provides more detail on REM performance measures and the status of current waste reduction initiative grants.
Mr. Anderson noted that, although proposed initiative funding levels in FY 2002-03 are lower than in the current year, this does not indicate less commitment on the part of REM to these programs. He explained that they have developed the infrastructure and are now moving into the operations phase, which requires a lower level of funding.
Planning
Andy Cotugno, Director of Planning, presented the Planning Department budget as outlined in the handout attached to this record.
Mr. Cotugno initially focused on changes resulting from the abolition of the Boundary Commission. He said that when the commission was eliminated a couple of years ago, three functions were taken over by Metro: 1) Metro analyzes whether an annexation is appropriate to proceed. (This function is being eliminated, because jurisdictions will contract directly for that support with Ken Martin as a private contractor rather than as a Metro employee.) 2) If there are annexations, Metro does the official filing of those annexations and reports the jurisdictional boundaries to the Tax Assessor and the Secretary of State. 3) The Metro Council appointed a commission that deals with any appeals of annexation issues.
Councilor McLain asked for clarification on whether the annexation process resided with local jurisdictions and whether Metro had any responsibility to review those annexations. Mr. Cotugno replied that Metro simply served as a contractor to do the analysis and only had responsibility to review annexations on an appeal basis. Jurisdictions chose to contract with a private contractor rather than with Metro.
Mr. Cotugno next addressed the issue of the Transportation Investment Task Force. He said that the Executive Officer recommended that the Planning Department undertake an analysis of transportation funding options and included $50,000 in the Administrative Services Department budget to pay for consultant support for that activity. Mr. Cotugno said he hoped to have the program organized and functioning by June 1 so that they could move quickly into that expenditure when the budget is adopted. He hoped to have some recommendations from the group before the end of the year for the legislative session coming up in the spring of 2003.
Chair Burkholder asked if the goal was to put something on the ballot in November of 2002. Mr. Cotugno responded that the amount in the budget was designated for staff support and consultant fees for the task force, not for election costs in the event there is a Metro election. If there is a ballot measure, it would probably be in 2004. He said that, in addition to a possible ballot measure, the Task Force would look at other strategies that it should pursue, both within and outside of Metro.
Jennifer Sims, Administrative Services Director, clarified that the $50,000 for the task force was a special appropriation in the general fund and was not necessarily assigned to ASD finance staff.
Chair Burkholder asked if the action taken this past year in terms of streamlining the Urban Growth Boundary Amendment processes would have a positive effect on the Planning Department’s staff allocation. Mr. Cotugno responded that this is a self-supporting function, where the fees cover costs. If Metro staff are working on other priorities, the work is contracted out and paid for with fees, with no additional expense to Metro.
Chair Burkholder asked if there was anything in the Planning Department’s budget (aside from the add package) to address affordable housing. Mr. Cotugno responded that, because of other priorities, the department was not able to include affordable housing.
Mr. Cotugno spoke about Goal 5 notice costs. He explained that last year $28,000 was budgeted for one mailing. This year $75,000 is budgeted for two mailings with expanded mailing lists. Councilor McLain said she was concerned that, of the $200,000 originally budgeted for notice costs, only $75,000 is now
slated for the two mailings, and she wanted to ensure that Metro meets its promise to be inclusive with this second set of notices. She recommended that if additional dollars were not identified for Goal 5 notice costs, Metro should seek corporate sponsorships or grants. Mr. Cotugno agreed with Councilor McLain that $75,000 was a small sum for outreach purposes. This amount would only cover two direct mail notices.
Councilor McLain asked if the Planning Department was making an effort to identify grant possibilities. Mr. Cotugno explained that the department invests minimal energy in going after grants because of the amount of effort it takes relative to the results obtained. He said that there is a possibility of more grants in the natural resource area but that they are not pursuing them because of the schedule demands on the Fish and Wildlife Program. Councilor McLain responded that Metro had been successful with grant writing and obtaining federal dollars in the past and asked to go on record as wanting to include something in the budget that would give Metro grant avenues if they are deemed practical and probable.
Councilor Atherton mentioned that there had been dialog about Metro serving as a clearinghouse to coordinate some of the grants and funding strategies having to do with affordable housing implementation for other local jurisdictions. Mr. Cotugno said that the Planning Department is not adequately funded to be able to provide that service at this time.
Parks/Open Spaces
Charles Ciecko, Director of Parks and Open Spaces, presented his department’s budget. A copy of his presentation is attached to this record.
Chair Burkholder asked when a decision needed to be made on Ordinance 02-939, which would amend the Metro excise tax to provide revenues for Regional Parks and Greenspaces programs. Mr. Ciecko responded that the ordinance would need to be acted on by the Council by the end of March in order for it to be incorporated into the rate structures set by local governments. Councilor McLain said that she understood that the Presiding Officer wanted to ensure that the Council acted on the $1 amount first before acting on a resolution to place excise taxes collected by the department in the General Fund. Mr. Ciecko said that that was his understanding as well.
Councilor McLain commented that parks master planning has been on the sidelines for years, and she would like to see it addressed at upcoming meetings. Mr. Ciecko said that the Green Ribbon Committee had a fairly extensive discussion about master planning and they would be forwarding a recommendation to the full Council that they would like to see more master planning. Councilor McLain asked that this issue be added to a list for further discussion.
Executive Office/Council
Pete Sandrock, Chief Operating Officer, Executive Office, expressed his appreciation for the Council staff’s assistance with budget development. He also thanked the Administrative Services and Financial Planning staff for an excellent budget overview. He then presented the Executive Office’s budget as outlined in the handout attached to this record and pointed out that the proposed budget for the Executive Office staff does not anticipate any effects of the transition except the elimination of the Executive Officer’s position in the last half of the year.
Mr. Sandrock addressed the cost of the PeopleSoft upgrade. He was told that the total cost of the upgrade would be approximately $1 million, which would include four or five FTE per year for two years. He said it is a significant and important effort.
Peggy Coats, Council Chief Operating Officer, spoke about the increasingly efficient and cooperative working relationships between the Council and Executive Offices and the rest of the agency during this budget process. She said that in terms of the Council budget this year, she and Mr. Sandrock worked to ensure that neither the Council nor the Executive Office introduced expenses or made assumptions
beyond what the Council asked for, which was to maintain the status quo until the transition. Ms. Coats then presented the Council Office budget. A copy of her overview is attached to this record.
Chair Burkholder asked if the Council Office had budgeted for election expense in November. Mr. Houser responded that $250,000 had been budgeted for FY 2002-03 as a special appropriation.
Auditor
Alexis Dow, Metro Auditor, presented the Auditor’s Office budget, with a focus on one-time expenditures, unresolved factors that may affect the final budget, whether current program levels are sustainable within current or projected resources, and the status of outstanding audit recommendations for ASD and IT. A copy of her presentation is attached to this record.
Chair Burkholder asked if the budget note adopted last year regarding the cost of audits would be available to the committee soon. Ms. Dow responded that, according to the budget note, the information is to be provided once a year in conjunction with the Auditor’s annual report. That report usually is published in September. Councilor McLain said that in order to capture the Auditor’s knowledge and expertise for the budget season, it would be helpful to have the report earlier than that, and she requested that the timing be changed so that the report would be available with the material for the next year’s budget. She requested that this be added to a list of issues to be addressed.
Mr. Houser asked for an itemization of the reductions by the Executive Officer to the Auditor’s budget. Ms. Dow listed them as follows: 1) $37,000 in personal services (elimination of a temporary, part-time position); 2) $30,000 for outside contracting; and 3) $20,000 for office renovations related to the transition. She said that it was essential that the temporary part-time position and the outside contracted position totaling $67,000 be reinstated. She said the timing of the $20,000 for remodeling was less critical, although it was important that the Auditor’s office space be modified when the transition occurs.
2. Councilor Communications
There were no councilor communications.
There being no further business before the committee, Chair Burkholder recessed the meeting at 4:25 p.m.
Respectfully submitted,
Claudia Wilton
Council Assistant
ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF MARCH 13, 2002
3/13/02 MERC Budget Presentation Outline 031302bdg-01
3/13/02 MERC Presentation Talking Points 031302bdg-02
3/13/02 Oregon Zoo Budget Presentation Outline 031302bdg-03
3/13/02 REM Budget Presentation Outline 031302bdg-04
3/13/02 REM Handout re Performance Measures and
Status of Waste Reduction Initiative Grants 031302bdg-05
3/13/02 Planning Budget Presentation Outline 031302bdg-06
3/13/02 Parks/Open Spaces Budget Presentation Outline 031302bdg-07
3/13/02 Executive Office Budget Presentation Outline 031302bdg-08
3/13/02 Council Office Budget Presentation Outline 031302bdg-09
3/13/02 Auditor’s Office Budget Presentation Outline 031302bdg-10