MINUTES OF THE METRO COUNCIL

BUDGET AND FINANCE COMMITTEE REGULAR MEETING

Wednesday, October 9, 2002

Metro Council Chamber

Members Present:  Rex Burkholder (Chair), Susan McLain, Rod Monroe (arrived at 2:50 p.m.)

Members Absent:  David Bragdon and Bill Atherton

Chair Burkholder called the meeting to order at 1:35 p.m.

Due to the lack of a quorum, consideration of the September 11, 2002 minutes was deferred until later in the meeting.

2.  Report from the Chief Financial Officer

Jennifer Sims, Director of Administrative Services, reported that she was tracking new developments on PERS to predict how Metro would be affected and agreed to forward information to the Council when available. She updated the committee on Metro’s outstanding debt status, which the Administrative Services Division has been monitoring for refunding opportunities. A copy of her written report is included as part of the meeting record.

Chair Burkholder asked for clarification on whether the Oregon Economic Community Development Department (OECDD) held the bonds for the Expo loan. Ms. Sims responded that they did and that Metro was requesting that they refinance so that the loan cost would decrease. Casey Short, Financial Planning Manager, added that although a formal request had not been made, Metro’s financial advisor agreed that it was a good idea and that he would talk to OECDD about refinancing.

Chair Burkholder asked that the debt summary be shared with the entire Council.

3.  Capital Asset Management Policies Implementation Update

Casey Short reviewed the process that culminated in Metro’s Capital Asset Management Policies. As a result of a resolution adopted by the Council in October 2001 containing a set of policies for capital asset management, the Financial Planning Department convened a group representing Metro departments to discuss ways of implementing those policies. Mr. Short acknowledged and thanked individual members of the group, which included both finance and facilities staff.

The group determined what requirements and procedures were called for to implement the asset management policies. These include: 1) Develop written policies and procedures for renewal and replacement of facilities; 2) Develop written policies and procedures for annual maintenance plans; 3) Establish renewal and replacement reserve accounts for each major operating fund; 4) Conduct an assessment of facility conditions at least every five years; and 5) Include the capital needs in the five-year revenue and expenditure forecasts produced every fall. Mr. Short said that the group had completed two

of those five tasks, establishing policies and procedures for renewal and replacement and for maintenance, and had begun the process of including capital needs in revenue and expenditure forecasts. He said that some departments were already in compliance with the policies and others had not yet conducted an assessment of their major assets. Representatives from REM and MERC have volunteered to assist other departments in the assessment phase.

Mr. Short added that departments have three options for the FY 2003-04 budget: 1) They could include renewal and replacement reserves with an explanation of where the numbers came from; 2) Departments that hadn’t completed an assessment and inventory could estimate the amount they thought they would need; or 3) Departments could present a work plan for completing an assessment and inventory in the coming year.

Councilor McLain asked if the policies were specific enough to ensure that they would be ongoing despite changes in committee chairs, council presidents, etc. Mr. Short replied that they were. Chair Burkholder confirmed with Mr. Short that there would be a note in the narrative section of the budget that would show how close each department was to meeting the guidelines and what their plan was to achieve them. The committee agreed that it was important to implement the policies but also recognized that they would cost money and could result in difficult decisions about whether to put aside money for capital maintenance or continue ongoing programs or fund balances.

Chair Burkholder called a recess at 2:00 p.m. to wait for a quorum. He called the meeting to order at 2:50 p.m. when Councilor Monroe arrived.

1.  Consideration of the Minutes of the September 11, 2002 Budget and Finance Committee Meeting

4.  Resolution No. 02-3233, A Resolution of the Metro Council Authorizing General Obligation Refunding Bonds, 2002 Series

Casey Short said that refunding Series A and Series C Open Spaces bonds would result in a savings of $10 million to property tax payers between now and 2015, when the bonds were retired.

Councilor Monroe agreed to carry Resolution 02-3233 to the full Council.

5.  Councilor Communications

None.

There being no further business before the committee, Chair Burkholder adjourned the meeting at 2:52 p.m.

Prepared by,

Claudia Wilton

Council Assistant

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF October 9, 2002