MINUTES OF THE METRO COUNCIL

BUDGET AND FINANCE COMMITTEE REGULAR MEETING

Wednesday, July 10, 2002

Metro Council Chamber

Members Present:  Rex Burkholder (Chair), David Bragdon (Vice Chair), Bill Atherton (arrived at

     1:55 p.m.), Susan McLain

Members Absent:  Rod Monroe (excused)

Chair Burkholder called the meeting to order at 1:50 p.m.

1.  Consideration of the Minutes of the June 26, 2002 Budget and Finance Committee Meeting

Councilor Bragdon noted that the June 26, 2002 meeting took place in Room 370, not in the Council Chamber.

Vote:  Chair Burkholder and Councilors Bragdon and McLain voted to adopt the minutes of the

 Budget and Finance Committee meeting of June 26, 2002, as corrected. The vote was 3/0,

 and the motion passed.

2.  FY 2003-04 Budget Assumptions

Chair Burkholder said that the purpose of the committee review of the budget assumption matrix was to:

•  discuss and better understand the factors used in creating the assumptions;

•  determine areas of change and areas where the Council had little or no discretion; and

•  agree upon a proposed set of assumptions and create a resolution for Council approval.

He set out the following timeline to review the budget assumptions and approve a draft resolution to provide guidelines for budget assumptions:

•  by July 10: Review and discuss global and personal services assumptions.

•  by July 24: Hear enterprise-driven departments present their specific assumptions.

•  by August 28: Approve a draft resolution and assumption matrix.

Kathy Rutkowski, Financial Planning Budget Coordinator, went through the budget assumptions handout, focussing on the personal services assumptions section. Extensive committee discussion ensued. The outcome of the discussions included the following points:

•  Councilor McLain discussed the need to average Metro and MERC compensation and fringe packages, after looking at each separately to identify any disparities.

•  Councilor Atherton suggested applying cost of living increases to a fixed amount of income that would change with the cost of living index.

•  Councilor Atherton suggested exploring whether the unemployment index might serve as a factor in creating budget assumptions.

•  Councilor McLain said that merit increase assumptions should be set in conjunction with the compensation study currently underway at Metro. She suggested setting a target 4 percent increase but stressed that more information was needed before establishing this assumption.

•  Casey Short, Financial Planning Manager, pointed out that the Council could direct certain assumptions changes, but without a change in Council policy, the result would be the status quo.

•  Councilor McLain asked to go on record that she did not want Metro to be on the low end of benefits, but rather remain in the mid to high range, as compared with other similar government entities.

Chair Burkholder reiterated that one of the biggest personal service issues would be the impact of rising personnel and benefits costs. He said that the committee was in general agreement with the direction of the budget assumptions.

Casey Short summarized the committee discussion as follows:

•  Staff would prepare scenarios showing savings resulting from capping COLA increases at salary ranges of $30,000, $40,000 and $50,000.

•  The PERS assumption would be increased from 4 percent to 5 percent.

•  Departments that have capital assets would be directed to demonstrate how they were addressing the renewal and replacement policy.

•  Staff would prepare information on the effect of having an average merit pay increase of 4 percent on non-represented employees

3. CIP Manual Presentations

Karen Feher, Capital Improvement Plan Coordinator, introduced the seventh annual Capital Improvement Plan (CIP). She reported that the only addition to last year's process was the implementation of the capital asset management policies that were adopted by the Council in October 2001. She noted that the CIP process had migrated from spreadsheets to a database, which resulted in a more efficient process. Since the Council had not had time to thoroughly review the CIP, Ms. Feher said she would be available to answer any questions that arose.

4. Councilor Communications

There were no councilor communications.

There being no further business before the committee, Chair Burkholder adjourned the meeting at 3:42 p.m.

Prepared by,

Claudia Wilton

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF JULY 10, 2002