MINUTES OF THE METRO COUNCIL BUDGET WORK SESSION

Wednesday, April 14, 1999

Council Annex

Presiding Officer Monroe called the meeting to order at 2:08 PM.

1.  CONSIDERATION OF MINUTES OF MARCH 24, 1999

2.  ORDINANCE NO. 99-793, FOR THE PURPOSE OF ADOPTING THE ANNUAL BUDGET FOR FISCAL YEAR 1999-2000, MAKING APPROPRIATIONS, LEVYING AD VALOREM TAXES, AND DECLARING AN EMERGENCY

REM Budget

Terry Peterson appeared before the council to present the proposed budget for the Regional Environmental Management Department for the fiscal year 1999-2000. He noted that the proposed budget was based on the current disposal rates. A copy of the proposed FY 1999-2000 Metro budget containing the REM budget is included as part of the meeting record.

Deputy Presiding Officer McLain asked John Houser, senior council assistant, to review the proposed REM budget and summarize his recommendations. He distributed a memorandum dated April 13, 1999, entitled “Analysis of the Proposed REM Budget for FY 99-00” to the committee. A copy of this memorandum is included as part of the meeting record. Mr. Houser noted that the REM budget would likely be affected by several significant changes in rates, revenues and disposal costs. He noted that the REM staff was working on some major plans that could significantly impact the budget, although they were not likely to be completed in time to affect the proposed budget but could be considered with the supplemental budget in the fall. These include: 1) transfer station cost of service analysis, 2) a transfer station service plan, 3) an analysis of the household hazardous waste program, 4) a status report on the Regional Solid Waste Management Plan, and 5) development of a revised organics recycling work plan.

Mr. Houser reported that he had no recommendations for monetary changes but did have a proposed budget note dealing with some fairly large ticket items that had not been clearly or fully defined as to how the funding was going to be spent.

Councilor Bragdon asked if the organics enhancement was looking strictly at capacity or to the demand side as well. Mr. Houser answered that it was capacity driven. Mr. Peterson added that their main interest was to continue working on organics. Councilor Bragdon asked if this covered some of the work they had been doing with perishables, for instance food bank salvage. Mr. Peterson answered that their intent was on the composting side rather than the reuse side. Mr. Houser clarified that the specific funding for the Oregon Food Bank was a different line item in the budget, loosely defined as “payments to other agencies”.

Deputy Presiding Officer McLain asked Mr. Houser to summarize the memorandum he and Mr. Morrissey prepared entitled “Budget Status” with regard to budget notes, adopted and pending. A copy of this memorandum is included as part of the meeting record. Councilor Bragdon’s proposed budget note pending for the REM budget follows:

Deputy Presiding Officer McLain pointed out the lump sum line item regarding challenge grants. She felt a conversation regarding whether the grants should be given out for population numbers or only for excellence and superior quality of program. She felt it was not a budget conversation because the money was already there, but how to split it out would definitely be something Councilor Washington’s committee should have a chance to talk about.

With regard to Councilor Bragdon’s budget note. Councilor Kvistad said he preferred to hold off for 12-24 months before reducing rates any further to see what the recycling rates would do. His philosophical view was that all of the money should go back to the customer. He was supportive of the proposed budget note if it meant waiting to see what the reduction in the tipping fees would mean for the recycling programs. He also felt they needed some conversation as to what to do with the money saved.

Deputy Presiding Officer McLain said Presiding Officer Monroe had indicated that conversation would take place at committee.

Councilor Atherton asked if the full extent of their liabilities with regard to the landfills had been studied. Mr. Peterson responded that, in addition to the impact on waste reduction, that was an assessment the department hoped to have completed within the next few months. Councilor Atherton felt some way to create markets for the recycled materials should be pursued. Mr. Morrissey commented that the Metro Recycling department had a booklet which included producers of outdoor products, picnic benches, etc., made of recycled materials, including plastics. Deputy Presiding Officer McLain noted that those companies had received 1% recycling grants from Metro to get started. Councilor Park commented that the many different types of plastics made recycling them complicated and difficult.

MERC Budget

Mark Williams appeared before the council to present the proposed budget for MERC for the fiscal year 1999-2000. A copy of the proposed FY 1999-2000 Metro budget containing the REM budget is included as part of the meeting record.

Deputy Presiding Officer McLain asked Michael Morrissey, senior council assistant, to review the proposed MERC budget and summarize his recommendations. He distributed a memorandum dated April 13, 1999, entitled “MERC Proposed Budget” to the committee. A copy of this memorandum is included as part of the permanent meeting record. He noted that the summary was accurate including the technical amendments.

Councilor Kvistad commented that depending on the northern rail potential there might be a need for discussion about how to connect to Expo, and how that might affect Phase 3.

Councilor Park wondered about the connection between the hotel/motel tax and RACC. Mr. Williams answered that the extra money there was because there was a CPI attached to it. In response to a question from Councilor Park, Mr. Williams said Multnomah County had complete authority and approval over where that money went.

Technical Amendments

Craig Prosser appeared before the council to present the proposed technical adjustments for fiscal year 1999-2000. He noted the memorandum dated April 7, 1999, from Mike Burton to Presiding Officer Monroe entitled “Technical Adjustments to the FY 1999-00 Proposed Budget” to the committee. A copy of this memorandum is included as part of the meeting record. He explained that the PeopleSoft system would not be implemented during FY 1999-00 but Support Services (ASD) had requested $34,586 to be carried forward in case the modules were implemented and Metro had to pay the license fees. Mr. Morrissey suggested that someone should talk to the PeopleSoft folks to work out a deal so they did not have to pay license fees for years the program was not implemented. Councilor Park and Mr. Prosser said they could call them. He talked about the budgetary adjustments made to the MERC budget because construction on Hall D would not be implemented in this fiscal year as they had previously assumed. He noted an additional change in a separate memo from Jennifer Sims, dated April 14, 1999, and entitled “Adjustment to the General Obligation Bond Debt Service Fund and Property Tax Levy” that said since the prior year taxes were not as much as anticipated, there was a need to increase the current year property tax levy. A copy of this memorandum is included as part of the meeting record.

Councilor Kvistad said he wanted to make a motion to roll over unexpended funds from the council budget into the next year’s council budget.

Deputy Presiding Officer McLain asked Mr. Prosser for a sheet with those funds listed. Mr. Prosser said they were working on that now and they had included assumptions for underexpenditure into the beginning fund balance of the general fund.

Deputy Presiding Officer McLain said they would receive a sheet with the particulars of the council’s underspending and would have a conversation at the formal meeting the next day regarding what to do with the underspent funds. She noted that the choices would be rolling it over into the council budget for next year or having it assumed as part of the beginning balance of underspent budgets for the agency.

Councilor Kvistad felt since the council had created the savings they should expend the money however they saw fit. Councilor Park was concerned that they were being penalized for not spending which then created the environment that if you don’t use it, you lose it.

Jennifer Sims said because of the way the budgets had been constructed and the assumptions that had been made, all of the excise tax was currently budgeted in some program or expenditure area and the result of that motion would be basically cutting somewhere else. She wanted to be sure that was clear.

Councilor Kvistad reiterated that he believed strongly when a savings was achieved in council then the council should be able to reallocate it. Mr. Morrissey said there were two types of unexpended funds. First were project-related where the project had been started but could not be completed in the same year it had been budgeted. That was a matter of following through on a project specific expenditure. The other kind, which he felt was more what Councilor Kvistad was referring to, was where all the dollars budgeted were not spent in the materials and services areas and the fiscal folks tried to estimate what that was for each department and programmed those into the budget.

Deputy Presiding Officer McLain thought Councilor Kvistad’s point was how to deal with the amount saved in different departments. Councilor Kvistad responded that the Council worked hard to keep their budget tight and the problem was when the council department had budget surpluses they went through the Executive Department to be reallocated. He thought they should be able to reserve the right to make the adjustments in the council budget with their priorities for projects if they earned the savings.

Mr. Morrissey and Mr. Houser reviewed the overview of changes needed as a result of negotiations between MERC and Metro. Ms. Sims said this matched up the gap between the two budgets.

Deputy Presiding Officer McLain asked for other issues. There being no further business before the committee, at approximately 4:32 PM she recessed the meeting until April 28, 1999 at 2:00 PM.

Respectfully submitted,

Cheryl Grant

Council Assistant

I:minutes\1999\budget\04149bdm.doc