MINUTES OF THE METRO COUNCIL BUDGET WORK SESSION

Wednesday, March 10, 1999

Council Annex

Presiding Officer Monroe called the meeting to order at 2:00 PM.

1.  CONSIDERATION OF MINUTES OF FEBRUARY 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

MISCELLANEOUS FUNDS

John Houser, senior council analyst, gave a report on miscellaneous funds for fiscal year 1999-2000. A copy of the proposed FY 1999-2000 Metro budget containing these funds is included as part of the meeting record. Mr. Houser also summarized a memorandum dated March 9, 1999, entitled “Budget Recommendations Related to the Administrative Services Department, Miscellaneous Funds and Special Appropriations.” A copy of this memorandum was distributed to councilors and is included as part of the meeting record.

Presiding Officer Monroe asked Jennifer Sims, chief financial officer, to explain why the executive did not include an appropriation to RACC in his budget, and to report on the proposed general fund contingency level. Ms. Sims distributed a memorandum dated March 10, 1999, entitled “General Fund Ending Fund Balances” to councilors. A copy of this memorandum is included as part of the meeting record. The attached chart shows the general fund ending fund balance as a percent of current revenues, as well as a dollar figure. Ms. Sims said the agency has enjoyed historically high ending balances based on higher than projected solid waste revenues. Past practice was to conservatively estimate tonnage and the corresponding excise tax. Of the excise tax, 75% derives from solid waste. This conservative estimate led each year to an unexpected windfall. Ms. Sims said financial staff has revised the methodology for predicting tonnage to become more accurate. At the same time, Metro has drawn down its fund balance.

Ms. Sims explained the purposes of the general fund balance. It consists of the contingency amount and an unappropriated balance. The contingency is for unforeseen requirements for the general fund over the course of the year. The contingency fund is at 5%, a reasonable sum. The unappropriated balance is combined with the contingency to provide a cushion should the excise tax revenue stream deviate from projections. Therefore, Ms. Sims said it would not be prudent to dip much below the funding levels proposed.

Ms. Sims said when funding for RACC was put against other priorities of the agency such as planning, and support to land banking requirements for parks, while maintaining the general fund balance, it was felt that it would not be feasible to provide funding for RACC.

Ms. Sims answered questions regarding the methodology for predicting excise tax levels.

(Proposed amendment No. 1 to fund RACC): $25,000 should be identified in the budget for an allocation to RACC. Part of the allocation would come from a less than expected COLA increase for non-represented employees funded in the general fund. The budget manual directed that departments include a 2% COLA for such employees. The actual percentage change may be significantly less than 2%. The difference between budgeted and actual would be allocated to RACC. In conjunction with this action, it is proposed that the additional funds needed to bring the total up to $25,000 be accomplished from a small reduction in the proposed general fund contingency.

Councilor Washington expressed his support for arts. He said Metro has a responsibility to do so.

Councilor Kvistad said Metro should have a $100,000 floor for funding of arts programs, and RACC specifically. He submitted an amendment to the budget to provide for this funding.

(Proposed amendment No. 2 to fund RACC): Councilor Kvistad’s amendment read as follows. “In addition to the RACC allocation proposed by the presiding officer, I would propose that the position of chief operations officer be eliminated form the budget of the executive officer. All direct general fund funding for this position (estimated to be $17,868) shall be allocated to increase the RACC allocation. In addition, any increases in general fund resources that may result from other budget amendment actions or changes in the general fund transfer for support services resulting from changes in the cost allocation plan shall be dedicated to RACC up to a maximum total RACC allocation of $100,000.”

Councilor Bragdon said he agreed with Councilors Washington and Kvistad that Metro needs to keep it’s funding of RACC whole at $100,000. He said he did not know how to accomplish this, but he would look at Councilor Kvistad’s proposal closely. Councilor McLain said she was in favor of funding RACC, however, she would not be in favor of taking away a position in the executive’s office. She did not believe that there would be sufficient savings in support services to fund RACC at the level desired. She said after the appropriate research, she might find it to be legitimate to take $50,000 out of the general fund ending fund balance, however, FTE cannot be reduced any further. Councilor Atherton agreed that the arts ought to be held harmless. He suggested eliminating the twenty-year land supply law.

Presiding Officer Monroe said he would ask Ms. Sims’ staff to look at Councilor Kvistad’s proposal to ensure the dollar amounts were real. Councilor Kvistad said he had obtained the numbers from the finance department. Presiding Officer Monroe said he is not interested in eliminating the chief operating officer’s position, however, he would consider the other portions of Councilor Kvistad’s amendment.

Councilor Kvistad pointed out that the executive’s chief of staff is resigning, and this should be considered when making the decision to add an additional position in the executive’s office. Presiding Officer Monroe said there has been in prior years a position comparable to the chief operating officer position, which has been vacant for some time. Ms. Sims said this was the Director of Administrative Services that was formerly held by Doug Butler. When Mr. Butler left, that position was eliminated. She said basically, the executive is reinstating that position.

Councilor Kvistad said he wanted to make a motion that the committee agree to fund RACC at $100,000, and that throughout the rest of the budget process, moneys be sought to fill this need. Presiding Officer Monroe said the time to make this motion would be on March 18 at Council. Councilors Bragdon and Washington said they would agree to the $100,000 funding level. Councilor Park said in addition to the quality-of-life elements of arts funding, these activities create economic activity in the region.

Presiding Officer Monroe said he supported and patronized the arts, however, he was unsure how $100,000 could be found to fund them. Deputy Presiding Officer McLain said she also supported the arts, however, she didn’t think it was wise to establish a permanent number for every year, because Metro’s general revenue is tied to service provision and an excise tax that is different every year; and tip fees have been reduced for the past couple of years. She said no other Metro department has a fixed budgeted amount set for them.

Presiding Officer Monroe asked councilors to prepare budget amendments for the March 18, 1999 Council meeting that will fund RACC.

ADMINISTRATIVE SERVICES BUDGET

Jennifer Sims, director of administrative services, appeared before the council to present the proposed administrative services department budget for fiscal year 1999-2000. A copy of the proposed FY 1999-2000 Metro budget containing this budget is included as part of the meeting record.

Mr. Houser gave an overview of the administrative services budget, and indicated that the presiding officer and the deputy presiding officer would not recommend any monetary amendments to this budget.

(Proposed amendment No. 1 to the administrative services budget): The presiding officer and deputy presiding officer recommend the following budget note.

Councilor Atherton asked if this would not be an auditor function. Mr. Houser responded that the budget advisory committee did not perceive this to be a function of the auditor. It was believed this would be more appropriately handled by an outside vendor. He said the accounting office is going through a benchmarking process with the auditor, but the results of that process will be statistical and not recommendation oriented. Through the benchmarking process, Metro is being compared with private businesses.

Councilor Washington noted that there are tremendous differences between private business and governments. He asked Ms. Sims why Metro is being compared with private businesses rather than other governments. Ms. Sims agreed that this would be a good question to pose to the auditor.

Ms. Sims said the study of the business processes is merited, however, no money exists to fund it. Councilor Atherton said he believes this is a legitimate audit function for the auditor’s office, and they do have funds to pay for it. Deputy Presiding Officer McLain suggested that the auditor’s office undertake coordination of this study.

(Proposed amendment No. 3 to fund RACC): Presiding Officer Monroe distributed a memorandum from Executive Officer Burton dated March 10, 1999, which outlined a proposal to ask POVA to make the contribution through MERC from the $2.3 million in funding they currently receive from MERC. Executive Officer Burton addressed his proposal.

HUMAN RESOURCES BUDGET

According to Presiding Officer Monroe, no changes are recommended in the human resources department. No presentation was given on the proposed budget for the human resources department for fiscal year 1999-2000. A copy of the proposed FY 1999-2000 Metro budget containing this budget is included as part of the meeting record.

REGIONAL PARKS AND GREEN SPACES BUDGET

Michael Morrissey, senior council analyst, gave an overview of the regional parks and greenspaces proposed budget for fiscal year 1999-2000. Charlie Ceicko, director of regional parks and greenspaces, also appeared before the council to answer questions. A copy of the proposed FY 1999-2000 Metro budget containing the executive office budget is included as part of the meeting record.

Mr. Morrissey distributed a copy of his memorandum dated March 9, 1999, entitled “Recommended Budget for Regional Parks and Greenspaces Department” to councilors. A copy of this memorandum is included as part of the meeting record. Mr. Morrissey recommended that the department set clearer benchmarks in department objectives for private fundraising, such as that for Diack Nature Center at Oxbow Park.

(Proposed amendment Nos. 1, 2, and 3 to the regional parks and greenspaces department budget): Mr. Morrissey recommended the following three budget notes.

Presiding Officer Monroe said when the initial bond measure passed, it was clearly stated that this would be phase one. He said it is time for a plan in terms of what additional acquisitions, and how much money can be acquired with what is left, and at what point will it be necessary to consider approaching the voters for an additional bond. He said the open space bond was for acquisition, not development or management or parks creation. That is an unfunded need. Now there is a potential funding source 4 for that need. Before Metro moves forward a specific dollar amount of need needs to be determined. A specific plan is needed, or people will not approve the bond measure. Mr. Morrissey said there is a circular movement in play where it is not possible to determine how much money is needed until master planning has been completed.

Councilor Bragdon said the tax study proposal needs to be comprehensively considered, so that various entities and departments of Metro do not collide with their competing needs. He said the convention center and the parks department may both be considering a car rental tax.

Deputy Presiding Officer McLain said there needs to be a policy discussion to decide what role Metro will play in the region before staff can be asked to comply with the budget notes. She requested that a work session be scheduled to make these decisions.

In response to questions by Councilor Washington, Mr. Ceicko gave an update on Whitaker Ponds and Mountain Beach.

Councilor Kvistad asked why the March 18, 1999 Council meeting to consider budget amendments was not on the schedule. Presiding Officer Monroe said he had added this date within the past couple of days, and this was the first announcement of that date.

There being no further business before the committee, Presiding Officer Monroe recessed the meeting at 3:30 PM until March 24 at 2:00 PM.

Respectfully submitted,

Lindsey Ray

Senior Council Assistant

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