MINUTES OF THE METRO COUNCIL

BUDGET AND FINANCE COMMITTEE REGULAR MEETING

Wednesday, June 12, 2002

Metro Council Chamber

Members Present:  Rex Burkholder (Chair) (arrived at 1:40 p.m.), David Bragdon (Vice Chair), Bill Atherton, Susan McLain

Members Absent:  Rod Monroe (excused)

Vice Chair Bragdon called the meeting to order at 1:34 p.m.

1.  Consideration of the Minutes

2.  ORDINANCE NO. 02-948, For the Purpose of Amending the FY 2001-02 Budget and Appropriations Schedule by Transferring Appropriations from Capital Outlay and Contingency in the MERC Operating Fund to Interfund Transfers and Transferring Those Resources to the MERC Pooled Capital Fund, and Declaring an Emergency

Bryant Enge, MERC Director of Administration, explained that two years ago MERC decided to more accurately track its capital program by moving the accounting for capital expenditures and maintenance from its operating fund to its capital projects fund. This ordinance reflects that transition.

Councilor Atherton pointed out that this accounting method did not follow a policy adopted by the Council that required renewal and replacement costs to be tracked under the operating fund, which allowed departments to set aside money for renewal and replacement costs. Mr. Enge responded that MERC kept its renewal and replacement activities in the MERC Pooled Capital Fund to allow them to more accurately track operating expenses without anomalies such as expenditures that only happened every three to five years.

Karen Feher, Financial Planning Budget Analyst, added that the policy mentioned by Councilor Atherton would not go into effect until FY 2003-04. She said that Metro would begin a capital planning process in July, 2002, which would include a full assessment of departments’ compliance with the new policy. She added that MERC’s project detail sheets in the capital plan specified whether an expense was capital maintenance, renewal and replacement, or a new capital item.

Chair Burkholder opened a public hearing. No one appeared to speak. Chair Burkholder closed the public hearing. He then invited further discussion from the committee members.

Councilor McLain said that the Renewal and Replacement Task Force strongly recommended carrying forward renewal and replacement as an important aspect of ongoing operational costs, and the Council passed the recommendation as policy. She stressed the importance of implementing the policy within a reasonable time. She pointed out that Ordinance No. 02-948 did not conform to the policy and said that even if MERC segregated renewal and replacement costs in a capital fund, it still would not allow for a clear understanding of the differences between renewal and replacement and true capital projects. She recommended going forward with the ordinance with the understanding that there was work to do in reviewing departmental practices.

Mr. Enge said that he would be pleased to meet with Karen Feher, John Houser and MERC’s capital projects team to review current processes and to see if they are consistent with Metro’s policy.

Chair Burkholder recommended that the committee review the implementation of the renewal and replacement policy at a future time.

Councilor Bragdon will carry Ordinance No. 02-948 to the Metro Council.

3.  Ordinance No. 02-949, For the Purpose of Amending Metro Code Section 4.01.050, and Revising Admissions Fees at the Oregon Zoo Effective January 1, 2003

Kathy Kiaunis, Oregon Zoo Deputy Director, explained that the purpose of Ordinance 02-949 was to request an admission fee increase of $.50 for adults, seniors and youth beginning January 1, 2003. She said that the Zoo used to be on a regular schedule to increase fees approximately every other year but the decision was made to delay increases during the light rail construction. After completion of the light rail line and opening the new entrance in late 1999, the Zoo increased fees for the first time in nearly five years. Fees were increased again in January of 2002.

Ms. Kiaunis said that currently the Zoo earned over 60 percent of its operating revenues. Although there had been strong growth in their enterprise areas, this fee increase was needed to help defray larger-than-expected increases, including utilities and benefits costs. The Zoo’s current five-year forecast included a fee increase to $9.50 for adults by January 1, 2007. She pointed out that fees would remain among the lowest of comparable facilities on the West Coast.

Councilor Atherton asked if the fee increase for senior citizens from $6 to $6.50 effective January 1, 2003, was necessary. Ms. Kiaunis responded that seniors were a big enough percentage of the overall visitor mix that it was important to keep those rates in line with adult rates. She added that the Zoo sponsors a special senior day to ensure that all seniors have access to the Zoo.

Chair Burkholder opened a public hearing. No one appeared to speak. Chair Burkholder closed the public hearing. He then invited further discussion from the committee members.

Councilor McLain said she thought an increase in two consecutive years was not good public relations, and was pleased with the plan not to increase fees again for several years. She cautioned that if other financial issues emerged between now and FY 2006-07, the Zoo should to identify them as soon as possible. She said that she thought there was a point where cost would cause a decline in attendance and expressed concern over the impact of charging an extra fee for new exhibits in addition to the admission fee. She recommended that the Zoo consider these issues as part of its business plan.

Councilor Burkholder said that despite fee increases, the zoo remains a great deal.

Councilor McLain will carry Ordinance 02-949 to the Metro Council.

Councilor Communications

None.

There being no further business before the committee, Chair Burkholder adjourned the meeting at 2:00 p.m.

Prepared by,

Claudia Wilton

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF JUNE 12, 2002