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2008-934-Minutes for Meeting October 06,2008 Recorded 10/30/2008DESCHUTES COUNTY OFFICIAL RECORDS CJ 2448.934 NANCY BLANKENSHIP, COUNTY CLERK COMMISSIONERS' JOURNAL 10/30/2008 03:08:50 PM III 111084 Do not remove this page from original document. Deschutes County Clerk Certificate Page If this instrument is being re-recorded, please complete the following statement, in accordance with ORS 205.244: Re-recorded to correct [give reason] previously recorded in Book or as Fee Number and Page Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.orc MINUTES OF WORK SESSION DESCHUTES COUNTY BOARD OF COMMISSIONERS MONDAY, OCTOBER 69 2008 Present were Commissioners Dennis R. Luke, Michael M. Daly and Tammy Melton. Also present were Dave Kanner, County Administrator; David Inbody, Assistant to the Administrator; Marty Wynne, Finance; Tom Anderson Community Development; Judith Ure, Administrator; Mark Pilliod, Legal Counsel; Sheriff Larry Blanton; Anna Johnson, Communications; several media representatives and approximately twenty other citizens. Chair Luke opened the meeting at 1:30 p.m. 1. Update on Central Cascade Lines Bus Service. Dave Kanner stated that there have been numerous discussions about this issue. A copy of the latest report was provided to the Commissioners and put on the Commissioners' web page, along with a letter from an attorney representing Central Cascade Lines (CCL) and another from ODOT. Judith Ure explained that site visits have been done, and the required documentation was not available at the time of the first visit, so they were unable to determine if they were in compliance. Additional time was given to allow CCL to come up with the appropriate documentation. Some information was provided by August 25, and a second visit was done on August 28. What was found that they still did not have adequate documentation. Some pieces were missing, such as a training plan and procurement policy. Other documents were incomplete or inconsistent with operational practices. It appears work was started on some things but not completed. During the site review, they were looking for business practices and accounting practices. They are not adequate to obtain grant funds, per ODOT. There is nothing to differentiate where funds are going. This must be in place before grant funds are received. Minutes of Administrative Work Session Monday, October 6, 2008 Page 1 of 7 Pages Internal controls are lacking; it does not appear that there is much oversight of the board, which has a fair amount of turnover. They do not appear to be operating within their own articles and by-laws. The policies and procedures have not been customized for their use. They appear to be operating at a loss as well. Service has been shut down on at least one occasion, and there is no operational budget established. ODOT funds are not intended to be the entire source of funding; and it appears that the organization cannot function without this. The grant funds are made available on reimbursement basis. The grant funds are the State's and the County does not receive them until a need has been shown. The agreement is between the State and the entity. The money is paid out at the time ODOT releases the funds. When an organization is found to be compliant, it can receive funding. In regard to the purchase of a new bus, it takes six to ten months to go through the process. Commissioner Daly asked if they have received ODOT funding in the past. Ms. Ure said that they get formula grant funds from the County, which is different and there is more discretion. The advisory committee makes these recommendations. Commissioner Daly said that they might not be able to operate without the ODOT funding. Mr. Kanner said that the money could be held in an account, and can be awarded to another agency if a process is opened up to compete for it. He said that if the County decides to work with CCL, that would have to happen without these particular ODOT funds. At this time, the group discussed ODOT requirements regarding the financial process, tracking revenue and expenses; also, record keeping in regard to maintenance. An operational track record for a period of time is also needed. Nothing would keep CCL from operating but it would have to be done without these particular funds. Dave Kanner emphasized that Deschutes County is not a transit planning or funding agency, only a pass-through. ODOT will not reimburse the dollars even if everything is in place by December 1. The goal is to provide transit services, not to support a particular provider. Another provider is running and is willing to take the County out of the picture. ODOT will not do another site review. Ms. Ure is not a transit representative. Mr. Kanner recommended that the grant agreement with ODOT be terminated to allow funding to go to COIC, and take the earmarked formula funds and provide it to COIC. Minutes of Administrative Work Session Monday, October 6, 2008 Page 2 of 7 Pages Commissioner Melton added that Ms. Ure is consistent and optimistic, but should not have to have been as involved as she was in trying to work this out. Greg Chaimov, representing CCL, said that in addition to advocating for his client, he also represents constituents at the State and other agencies. He is away of the need to watch over funding and the amount of work needed to receive any grant funds. He assured that CCL understands its obligations, and can see why in the past the Board may have had the impression that they are not ready, willing or ably to adjust the way they do business. He will not say now that they have the capacity to do what is needed at this time, but they have reached out for professional help by engaging his law firm. Commissioner Luke reminded everyone that the requirements are not those of the County; they are ODOT's. The County does not want to have to pay back the grant funds to ODOT. Mr. Chaimov said there are attorneys waiting to help them put together their policies and procedures. He worked with TACS for years, providing technical assistance to nonprofits. There is an office through the Governor's office that supports minority, women and emerging businesses with certain types of communication. CCL is asking for a chance to put these resources into play. They would like until the end of November to demonstrate they can operate in a way that will comply with ODOT and the County. He has discussed this with ODOT and would not be asking for additional time if he did not think they could bring ODOT around at that time. He asked that the agreements not be terminated and the award not be made to another entity. Commissioner Luke asked how the County is going to know if CCL is compliant, since ODOT will not do another site visit, and the County does not have the expertise, authority or capacity to do it. Commissioner Melton pointed out that ODOT is the end-all, and if ODOT will not reimburse, County funds are being used. Mr. Chaimov stated that they are not asking for the County to use any funds, just t not give them to anyone else until CCL has had a chance to show what they can do. Based on his conversation with the Director on Friday, October 3, ODOT should be willing to inform the County by the end of October whether CCL is operating properly. Minutes of Administrative Work Session Monday, October 6, 2008 Page 3 of 7 Pages Commissioner Luke asked if Mr. Chaimov could get a letter from ODOT by Wednesday stating this. All the County has right now is a letter from ODOT stating they will not support CCL. Mr. Chaimov stated that having a letter by Wednesday would not be a problem. He thinks if the County is willing to give it some time, ODOT may be willing to continue the effort. Commissioner Luke reiterated that the latest letter the County got from ODOT says that they are done. Mr. Chaimov said he would try to get a letter by Wednesday. Commissioner Daly stated that Mr. Chaimov alluded to the Governor's Office. He asked if there is any indication that they will tell ODOT to give CCL an opportunity. He added that he has worked with Lupita a long time and wants the business to be successful. The County cannot take on any more financial risk and needs ODOT behind it in this case. Mr. Chaimov agreed. Ms. Ure stated that the track record is very clear. ODOT said what is in place is not adequate for these funds. They want to see 18 months or longer of operating in accordance with the rules. Commissioner Luke observed that the letter would have to say that, and also allow for a site visit. If not, there is not much reason to continue this. Ms. Ure added that this has to be properly managed. ODOT will not grant funds if they are at risk for their STF allocations and federal funding. Commissioner Melton said that the County is involved because ODOT requested the County be the pass-through agency. ODOT holds the funds. She added that she appreciates COIC's ability to help out. She also believes in an open RFP process. Ms. Ure said that applies to formula funds only. If the County steps out of the discretionary funds part, ODOT would direct and deal with whomever they want. The County has to recommend the money stay in the region, as they could send it wherever they want. They do not traditionally contract with new entities, which is why they asked the County to do it. If a transit district is formed, it will be responsible for all of the money and where it goes. Minutes of Administrative Work Session Monday, October 6, 2008 Page 4 of 7 Pages Mr. Kanner asked if CCL could operate without public funds. Mr. Chaimov replied that he did not know, but that it hinges not so much on the money but on County support for the operation. There needs to be a public show of support so as not to depress ridership. Commissioner Luke pointed out that this has been done; they have received short-term lottery grant funds for fuel and maintenance. They would release funding today if ODOT would sign off on it. The County has given its support but does not control most of the money needed. Commissioner Melton added that the County wants them to succeed. The strings attached make it harder. Fulfilling all of the requirements would make the business stronger. Ms. Ure said that there is nothing to prevent them from applying for future cycles of funding, but time is not on their side for this cycle. Commissioner Daly stated that the community wants to see them successful. The County is getting blamed for this, but it is ODOT's call. 2. Continued Discussion of General Fund Transfer to Community Development. Dave Kanner suggested that the $200,000 needed for Community Development operations come out of the general fund contingency, and they can backfill out of different reserve funds later. Discussions have occurred with departments to look at cost savings that would total $200,000. The next fiscal year the $200,000 could go back into contingency. This amount could be reduced by examining the travel and training expenses of departments. Commissioner Luke stated that the summary left something out. If positions are not filled, the costs associated with those positions should not be paid. Anyone who was an FTE who was laid off is still being charged for PERS and health benefits. Mr. Wynne said that PERS is different. The health benefits part is charged by FTE, as is the health benefits trust. PERS is charged against salary. Minutes of Administrative Work Session Monday, October 6, 2008 Page 5 of 7 Pages Commissioner Luke pointed out that the number of employees times the number of months is substantial. Before moving funds over, he wants to be sure they aren't getting charged for this. Mr. Wynne stated that Mr. Kanner asked that a resolution removing those charges be drafted and approved later in the month. Mr. Kanner pointed out that even if they do this, the department is still upside down. Commissioner Melton said that she is okay with using general fund contingency at this time. She does not want to take it from general fund next year and ask other departments to cut back. The department is fee driven. In the past, other departments have had to cut back and did not benefit in this fashion. If the other departments were held harmless, this should remain the policy. It is not fair to reduce some departments' budgets to cover long-range planning expenses. Mr. Kanner stated he has asked to reduce general fund expenditures, and perhaps will set target amounts. He is not talking about any department having to cut a large amount of money. Commissioner Melton replied that they might need that money for their own needs, regardless of the amount. Mr. Wynne asked to keep things simple right now. Adjustments can be made in the new budget process. The Commissioners indicated they approve of the general funds transfer at this time. 3. Discussion of Spay and Neuter Grant Application Program. David Inbody said this program involves voluntary donations given by the public at the time of dog licensing. There has been about $2,000 collected at this point. The form, which will be sent to appropriate agencies, outlines the criteria to follow, and will go to eligible entities. There are not a whole lot of organizations that provide this kind of service. Commissioner Melton stated that the Board plans to double the amount collected, per Commissioner Luke's suggestion. The Board supported the form as presented. Minutes of Administrative Work Session Monday, October 6, 2008 Page 6 of 7 Pages 4. Economic Development Grant Requests: • New Generations Early Childhood Development Center David Inbody said that it is unclear if this is part of a request for a fee waiver from Community Development or something different. Commissioner Luke stated that a lot of citizens in Sunriver area volunteer for this program, which deserves support. Tom Anderson said that he would like the Commissioners to see the whole picture. This will be addressed at a future meeting. 5. Update of Commissioners' Meetings and Schedules. None were discussed. 6. Other Items. None were discussed. Being no further discussion, the meeting adjourned at 3:15 p.m. DATED this 6th Day of October 2008 for the Deschutes County Board of Commissioners. Dennis R. Luke, Chair Tammy hey) lton, Vice Chair ATTEST: Recording Secretary Michael aly, ommissioner minutes of Administrative Work Session Page 7 of 7 Pages Monday, October 6, 2008 Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org WORK SESSION AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 1:30 P.M., MONDAY, OCTOBER 6, 2008 1. Update on Central Cascade Lines Bus Service -Judith Ure 2. Continued Discussion of General Fund Transfer to Community Development - Marty Wynne 3. Discussion of Spay and Neuter Grant Application Program 4. Economic Development Grant Requests: New Generations Early Childhood Development Center 5. Update of Commissioners' Meetings and Schedules 6. Other Items PLEASE NOTE: At any time during this meeting, an executive session could be called to address issues relating to ORS 192.660(2) (e), real property negotiations; ORS 192.660(2) (h), pending or threatened litigation; or ORS 192.660(2) (b), personnel issues Meeting dates, times and discussion items are subject to change. All meetings are conducted in the Board of Commissioners' meeting rooms at 1300 NW Wall St., Bend, unless otherwise indicated. Ifyou have questions regarding a meeting, please call 388-6572. Deschutes County meeting locations are wheelchair accessible. Deschutes County provides reasonable accommodations for persons with disabilities. For deaf, hearing impaired or speech disabled, dial 7-1-1 to access the state transfer relay service for TTY. Please call (541) 388-6571 regarding alternative formats or for further information. ~p Qj L g ~ 00 ~ N • ~s O co E _v Ir c3' LL. 0 lp - `n bo 1 Q C s o 00 ~o r" 1.0 CT~ i ~J i a t o r 141 c, y M ~ CP 'r V C N ~ ~ '0 •Q) ~ C O .C a ~ M O ~ ~ p lam, r0 Lo t-- ~a ( ` N . ~ 0- p- , - + V LL v 4 C Pik '.9 M cL ? ~ t 7 Q ~ J u- 7 O ZCI - a g ZZ4 a TES 2-A Department of Administrative Services i_< Dave Kanner, County Administrator 1300 NW Wall St, Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 www. co. deschutes. on us October 2, 2008 TO: Deschutes County Board of Commissioners FROM: Dave Kanner, County Administrator RE: Site Review Process Recommendation The Board of Commissioners has received a copy of the Site Review Process Report which summarizes the process, issues, findings, and conclusions of Deschutes County and Oregon Department of Transportation (ODOT) staff assigned to evaluate the eligibility of Central Cascade Lines, Inc. (CCL) to receive certain public funding. The report concludes that CCL is not currently qualified to receive federal and state funds to operate a public transportation program. As a result of this determination, ODOT will not approve payment of grant funds to be passed through Deschutes County to CCL. I believe that the Board of Commissioners has limited discretion in this matter unless it is willing to assume the considerable risk of awarding CCL funds for which the County will not receive reimbursement. In addition to the financial consequences of such an action, the County's reputation as a responsible grant recipient could also be affected, potentially jeopardizing future ODOT funding decisions to benefit all Deschutes County residents. Following an evaluation of the Site Review Process Report and further discussion with staff concerning the outcomes of the CCL site review process, I recommend that the Board of Commissioners take the following actions at this time: 1. With concurrence of ODOT, terminate agreements #24258 and #24419 which specify that Deschutes County will act as direct recipient for grant funds to purchase a vehicle and capital equipment and contract for Job Access/Reverse Commute (JARC) transportation services. 2. Request that ODOT consider reallocating the $82,103 and $50,000 in discretionary grant funds identified in the terminated agreements to benefit residents of south Deschutes County as originally intended. 3. Award fiscal year 2008-09 Special Transportation Fund (STF) formula grant funds in the amount of $52,604 which are currently being held in reserve to an alternative, qualified agency for the purpose of providing transportation to the elderly and persons with disabilities residing in south Deschutes County. If the Board of Commissioners approves these actions, County staff will prepare a letter to ODOT that requests termination of the agreements in the manner described above. In addition, staff will amend the County's STF application to allocate STF funds as directed by the Board. Enhancing the Lives of Citizens by Delivering Quality Services in a Cost-Effective Manner N regon Theodore R. Kulongoskl, Governor October 3, 2008 Dave Kanner, Administrator Deschutes County 1300 NW Wall Street, Suite 200 Bend, OR 97701 Dear Mr. Kanner: Department of Transportation Public Transit Division Mill Creek Office Building 555 13'}' Street NE, Suite 3 Salem, OR 97301-4179 Telephone (503) 986-3300 FAX (503) 9864189 www.oregon.gov/ODOT/PT/ I have reviewed the Site Review Process Report dated September 19, 2008 which was prepared by Deschutes County with technical assistance provided by Oregon Department of Transportation (ODOT) staff to determine whether Central Cascade Lines, Inc. is in compliance with state and federal laws, rules, and regulations. Based on the findings contained in the report, I concur with the County's conclusion that Central Cascade Lines, Inc. is not currently qualified to receive state or federal funds for the purpose of operating a public transportation program. As a result of this determination, I recommend that both Deschutes County and ODOT mutually agree to terminate agreements #24258 and #24419. This action will remove the County from its role as a pass-through agency with the responsibility of both purchasing a vehicle and capital equipment and contracting for Job Access/Reverse Commute (JARC) transportation services. The affected grant funds in the amount of $82,103 and $25,000, respectively, will revert to ODOT's control. Given the findings of the report, I would also concur with any action by the Deschutes County Board of Commissioners to decline to approve a Special Transportation Fund (STF) grant to Central Cascade Lines, Inc. for the current funding period and until such time as Central Cascade Lines, Inc. can provide evidence that it has resolved all outstanding issues related to eligibility as described in the September 19, 2008 report. I understand that the Deschutes County Board of Commissioners will discuss this issue further during a public meeting to be held on October 6, 2008. Please let me know if I can provide further assistance in support of the Board's decision-making process. Sincerely, ~V4 III!"? I( Michael Ward Administrator Public Transit Division DESCHUTES COUNTY / OREGON DEPARTMENT OF TRANSPORTATION SITE REVIEW PROCESS REPORT SEPTEMBER 19, 2008 CENTRAL CASCADE LINE, INC. BACKGROUND In June 2008, Deschutes County initiated a review process to determine if Central Cascade Lines, Inc. (CCL) is qualified to receive certain federal and state funding to operate public transportation programs. The County contacted the Oregon Department of Transportation (ODOT) to provide technical assistance in the review process. Although the review was prompted by specific complaints made by former employees and passengers of the agency, the process was primarily intended to determine if CCL, a new organization incorporated in the State of Oregon in 2006, is operating in accordance with state and federal laws and regulations governing such programs in anticipation of receiving public funding. This report outlines findings as determined through the site review process and represents the joint observations, opinions, and conclusions of County and ODOT staff assigned to conduct the review. To date, the review process has consisted of the following: 1. Site Review Checklist: CCL completed and submitted on June 30, 2008 a site review checklist which answered specific questions related to the organization's financial, management, and legal sufficiency; transit operations, safety, and security procedures; and compliance with the Americans with Disabilities Act (ADA). 2. Initial Site Visit: County and ODOT staff visited CCL on July 18, 2008 for the purpose of verifying information provided in the site review checklist by viewing written records and operational systems. Steps 1 and 2 of the process were described at length in a summary report which was prepared by County and ODOT staff on July 31, 2008 and presented to the Deschutes County Board of Commissioners in a public meeting held on August 4, 2008. That report, included background information about CCL, a history of the issues, and an assessment of the agency's operational capabilities at the time of the visit. The report concluded that CCL was unable to provide documentation necessary to verify compliance with the requirements necessary to receive public funding. 3. Request for Additional Documentation: During the August 4 meeting, the Deschutes County Board of Commissioners agreed to give CCL additional time to compile and submit the necessary documentation. Ms. Lupita Lewis, representing CCL, was asked to provide a timeline in which the agency could accomplish this task. In an electronic message dated August 6, Ms. Lewis indicated that the documents described as insufficient in the summary report would be delivered to the County by August 25, 2008. CCL submitted some, but not all, of the documents requested by this date. County staff requested the missing information in a series of follow-up ['age 1 of 13 communications, but several items, including a procurement policy, driver training plan, and safety and security plan were never delivered. At no time following the Deschutes County Board of Commissioners meeting did Ms. Lewis or any other representative of CCL request technical assistance from either the County or ODOT in preparing the requested documents and, although the Board of Commissioners indicated that an extension could potentially be granted with adequate notice, CCL did not request additional time to complete or submit the documents. 4. Second Site Visit: County and ODOT staff conducted a second site visit on August 28, 2008 to determine if CCL was operating in accordance with the policies and procedures both submitted during the initial site visit and in response to the subsequent request for additional documentation. CCL was provided, in advance of the visit, with a list of supporting documents and other information for reviewers to evaluate on site. Board President Lupita Lewis, Board Vice President TJ Miller, Board member Berry Mills, Deschutes County Citizens Action Group member Tom Bradler, and Certified Public Accountant (CPA) Chris Telfer were present during the site visit on behalf of CCL. Deschutes County Management Analyst Judith Ure, ODOT Public Transit Division Capital Program Manager Joni Bramlett, and ODOT Public Transit Division Internal Fiscal Analyst Jim Jordan served as reviewers on behalf of the County and the State. Lupita Lewis requested permission to make an audio-recording of the site visit for future reference. Permission was given and Berry Mills operated the equipment to do so. ASSESSMENT The following sections of this report represent an overview of the issues and findings identified by County and ODOT staff during the review process. Financial Policies, Procedures, and Controls Issue 1: CCL's financial policies, procedures, and systems do not address several of the minimum requirements outlined in the July 31, 2008 Site Review Summary report, including: • Segregation of grant funds, matching funds, and expenditures. • Cash handling procedures and frequency of bank deposits. • Persons with authority for payment authorization and use of business credit cards. • Fare collection and accounting procedures. In addition, the document contains confusing or undefined terms and roles, including an executive committee, operations manager, budget holder, executive director, audit committee, and external auditor which are not reflected on CCL's organizational chart and are not referenced in the agency's articles of incorporation or by-laws. Although the agency's by-laws state that "business and affairs of the corporation shall be managed by its Board of Directors," the document does not include a date or signatures indicating that it was formally adopted and meeting minutes subsequently provided by CCL do not show that such action was taken. llage 2 of 13 Finding 1.1: CCL's financial policies and procedures are not sufficient regarding many key business practices necessary to responsibly manage public funds. Finding 1.2: CCL's financial policies and procedures are not consistent with its organizational structure and operations. Finding 1.3: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Issue 2: All financial responsibilities are assigned to a single person with no clear separation of duties or established system of checks and balances. Lupita Lewis, as President of CCL, receives payments, prepares deposits, writes checks, reconciles bank accounts, and performs all bookkeeping functions. While CCL employs a contractual accountant to prepare tax returns and some reports, this individual does not review financial records for accuracy or perform any routine reconcilements. The agency's Financial Policies and Procedures document identifies certain functions to be carried out by an audit committee and external auditor, but these positions are not represented within organization and an audit has not been performed to date. There is no record that the Board of Directors has received regular financial reports or authorized any of the agency's financial transactions. Finding 2.1: CCL's financial management system does not have sufficient internal controls in place to effectively guard against potential errors, inaccuracy, misuse of funds, or fraud. Finding 2.2: CCL is not operating in accordance with its financial policies and procedures regarding audit requirements. Finding 2.3: CCL is not operating in accordance with its by-laws and articles of incorporation regarding Board oversight. Budget and Accounting Systems Issue 4: Although the Financial Policies and Procedures document states that "the annual budget of the organization shall be prepared by the Executive Director and approved by the Board on an annual basis," CCL has not developed or approved an operating budget. CCL has also not identified an adequate level of reserves that "relate to current and long-range spending plans" as stated in the Financial Policies and Procedures document. A significant portion of the agency's revenue was obtained from two separate personal loans on which no repayments have been made to date. On more than one occasion, CCL has requested emergency funds from the Deschutes County Board of Commissioners and ODOT to support basic expenses such as fuel, maintenance, and repairs. Finding 4.1: CCL is not operating in accordance with its financial policies and procedures in regard to an operating budget, spending plans, or reserves. Page of 13 Finding 4.2: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Finding 4.3: CCL's current financial capacity is limited and its resources are insufficient to ensure predictable and uninterrupted services. Issue S: Financial systems and reports provide conflicting information at times. The cash balance shown on the first year tax return is different from the amount shown in the agency's financial system for the same period. Bank reconcilements do not always correspond with financial statements. Although the agency's Financial Policies and Procedures document states that "revenue shall be recorded in the period earned" and "all expenses shall be recorded when incurred," financial transactions are not always recorded in a timely manner. In one case, a significant revenue source was not entered into the financial system until several months after receipt and, at the time of the August 28, 2008 site visit, no accounting entries had been made since July 7, 2008. Finding 5.1: CCL's financial systems and processes do not provide a consistent, easily verifiable statement of the agency's financial position at any given time. Finding 5.2: CCL is not operating in accordance with its financial policies and procedures in regard to timely recording of transactions. Issue 6: CCL has no system in place to record or track volunteer hours, reimbursements, and/or contributions. In the initial site visit, Ms. Lewis indicated that records were not kept of volunteer services because volunteers do not receive compensation. However, two payments for $1,000 each that were made to Ray Lewis were recorded in the agency's financial system for undefined "volunteer services". Finding 6.1: CCL's financial policies, procedures, and systems do not adequately account for or report volunteer hours or services. Finding 6.2: CCL's accounting system does not provide adequate information to determine if compensation or reimbursement made to volunteers is appropriate, allowable, or consistent with the agency's stated practices. Issue 7. Much of CCL's start up and operating revenue appears to have been secured through two separate, interest-free promissory notes issued by Ray Lewis in an amount totaling approximately $100,000. There is no evidence that the Board of Directors has ever approved the two promissory notes as required by the agency's by-laws. Finding 7.1: CCL is not operating in accordance with its by-laws as they relate to contracting indebtedness. Finding 7.2: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Page 4 of 13 Use of State and Federal Funds Issue 8: CCL did not submit a procurement policy in anticipation of receiving public funds and as outlined in the July 31, 2008 Site Review Summary report and requested by County staff in subsequent follow-up communications. Finding 8.1: CCL does not have the capacity to conduct a procurement process that conforms with state and federal rules and regulations guiding the use of public funds. Issue 9: CCL's financial policies and procedures do not address tracking of equipment purchased with state and federal funds in anticipation of receiving public funds and as outlined in the July 31, 2008 Site Review Summary report, including: • Maintaining use consistent with purpose. • Identifying items as purchased with state or federal funds. • Keeping adequate records; protecting items from misuse, misappropriation, waste, etc. • Tracking items through a physical inventory system. Finding 93: CCL does not have an adequate system in place to effectively track and monitor equipment and therefore cannot use state and federal funds for this purpose. Issue 10: Of the four vehicles currently owned by CCL (none of which were purchased with public funds), one ownership title was missing at the time of the August 28, 2008 site visit. CCL subsequently provided to the County a copy of a request for duplicate title made to the Oregon Driver and Motor Vehicle Division (DMV). Finding 10.1: CCL does not have an adequate system in place to effectively track and monitor equipment. Issue 11: CCL provided no evidence of a system in place to account for public funds, including the minimum requirements stated in the July 31, 2008 Site Review Summary report: • A defined method to distribute costs. A defined method to distribute administration and communal expenses. A method of allocating costs to individual grant agreements. Finding 11.1: CCL's financial system does not provide the means necessary to effectively track and account for public funds. Grant Administration Issue 12: CCL provided no policies or procedures addressing the subject of grant management and the agency does not have a cost allocation or other system in place to account for grants, including the minimum requirements stated in the July 31, 2008 Site Review Summary report: Page 5 of 13 • Tracking matching funds contributed to grants. • Tracking cash donations and in-kind non-cash contributions. • Documenting the source and amount of in-kind, non-cash contributions. • Documenting tasks and hours per task performed by volunteers. • Documenting volunteer reimbursements and/or payments. Finding 12.1: CCL does not have the capacity to properly account for grant revenues and expenditures. Issue 13: During the August 28, 2008 site visit, Ms. Lewis and the agency's accountant indicated that all of CCL's operational costs were being recorded against STF formula funds which are restricted by Deschutes County specifically for services for the elderly and persons with disabilities. Finding 133: CCL does not have the capacity to properly account for public funds which may be restricted in nature and/or require distinct matching funds or in-kind contributions that must be attributable and limited to the approved project. Issue 14: CCL has received a total of $22,500 in economic development grants awarded by the Deschutes County Board of Commissioners, including: • $1,500 awarded in 2006 to purchase a computer, monitor, portable computer with speech output, printer, office supplies, and a grant reference manual. • $2,500 awarded in 2007 for operational costs related to providing a shuttle service between La Pine and the Deschutes County fairgrounds during the 2007 County Fair event. • $3,500 awarded in 2007 to repair/replace the transmission and shift differential on a 25- passenger bus. • $10,000 awarded in 2007 for emergency funds to pay for fuel and wages. • $5,000 awarded in 2008 to purchase a high-speed photocopier. However, the agency has no system in place to track the receipt of local grants, account for the funds, or track the expenditures and did not provide evidence that the funds were used as intended. Finding 143: CCL does not have the capacity to properly account for grants and related expenditures. Finding 14.2: CCL cannot provide assurance that grant funds received have been expended consistent with their intended use. Procurement Policy and Procedures Issue 15: CCL did not submit procurement policies or procedures for review. Page 6 of 13 Finding 15.1: CCL does not have satisfactory procurement policies and procedures in place to make capital purchases in accordance with rules and guidelines regulating public funds. Management Operational Policies and Procedures Issue 16. Many of the documents submitted by CCL appear to be copied from published manuals, government guides, or materials developed by other agencies. Much of the information was not thoroughly or completely modified to reflect CCL's specific business practices. In numerous cases, position titles and sub-committees are referenced that do not appear on CCL's organizational chart, articles of incorporation, or by-laws; boilerplate language with sample business names, places of business, schedules, and other information was not replaced with appropriate information; and options were not selected from the various models provided as examples. In one instance, text was photocopied directly from a reference book with no apparent attempt made to customize the information. Finding 16.1: CCL's policies and procedures do not provide sufficient documentation of the agency's actual business practices. Finding 16.2: As submitted, many of CCL's policies and procedures are more suitable for a different type or size of organization and therefore may bind the agency to more restrictive requirements than are appropriate for its size and operations. Issue 17. None of the policies and procedures documents submitted by CCL includes dates or signatures that indicate review, approval, or acceptance by the agency's Board of Directors. Copies of the Board's meeting minutes provided by CCL during the August 28, 2008 site visit do not show that such action was taken. Finding 17.1: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Board of Directors Issue 18: Board actions are recorded only sporadically in CCL's Board meeting minutes and there is no record of discussions being held or votes being taken on many significant and important issues, including: • Changes in membership and new directors. • Adoption of policies and procedures. • Financial reports. • Budget development or approval. • Significant expenditures. • Loan acceptance. l:'age 7 of 13 Finding 18.1: CCL's Board of Directors is not conducting adequate oversight of the agency's activities and operations. Finding 18.2: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Issue 19: Copies of Board meeting minutes provided by CCL are not signed. In addition, Board meeting minutes do not show that minutes of the prior meeting are read or approved. Some of the copies provided appear to be blank templates with times, dates, locations, names, topics, and other information not recorded in the designated placeholders. Meeting dates shown on the minutes at times appear to be incorrect or are missing entirely. CCL did not provide copies of meeting agendas. Finding 19.1: CCL's Board meetings are not sufficiently documented to provide a clear and accurate accounting of Board proceedings. Finding 19.2: CCL's record of Board activities provides no evidence of adequate oversight by Board members. Issue 20: Board rosters and meeting attendance records indicate that CCL's Board membership changes frequently with at least one new member at each meeting held. However, there is no corresponding documentation within the Board meeting minutes of new members being recruited, selected, or installed as required by the agency's by-laws and articles of incorporation. In addition, CCL has no established process in place for recruiting or selecting new members. According to Ms. Lewis, Board vacancies are not advertised, but are communicated via word-of- mouth. Finding 20.1: CCL is not operating in accordance with its by-laws or articles of incorporation as they relate to Board management. Finding 20.2: CCL's record of Board activities provides no evidence of adequate oversight by Board members regarding recruiting, selection, or installation of new members. Issue 21: CCL's by-laws provide for the positions of president, vice president, treasurer, and secretary on its Board. Board meeting minutes do not show that Board members have ever held a vote to designate who fills these positions. Additionally, CCL has not designated a treasurer on its Board to date. Finding 21.1: CCL is not operating in accordance with its by-laws as they describe Board appointments or composition. Finding 21.2: CCL is not operating in accordance with its by-laws in regard to appointing a treasurer and ensuring that the responsibilities of the treasurer are carried out. Page 8 of 13 Finding 21.3: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Issue 22: CCL has no paid employees other than drivers. As Board President, Ms. Lewis manages Board activities, functions as a voting Board member, and supervises and controls all of the business and affairs of the corporation as provided for in the agency's by-laws. However, none of the documents provided by CCL address how these various roles are to be managed without conflict. As Board meeting minutes do not provide a complete record of significant votes taken, it is unclear whether Ms. Lewis routinely abstains from voting on issues in which she may have a personal interest, such as the acceptance of a loan made by a family member, payments made to a family member for volunteer services, or approval of a lease agreement which involves family property. Finding 22.1: CCL does not have adequate policies or procedures in place to ensure internal controls or the prevention of a conflict of interest. Finding 22.2: CCL's Board meetings are not sufficiently documented to provide a clear and accurate accounting of Board actions taken to prevent a conflict of interest. Labor and Employee Relations Issue 23: The Employee Policies and Procedures document submitted by CCL appears to be copied from a commercially published resource. In several sections, boilerplate language and fill-in fields have not been appropriately modified or selected. Positions referenced in the document are inconsistent with CCL's organization chart, by-laws, and articles of incorporation. The document does not include dates or signatures that indicate review, approval, or acceptance by the agency's Board of Directors. Copies of the Board's meeting minutes provided by CCL during the August 28, 2008 site visit do not show that such action was taken. Finding 23.1: CCL's Employee Policies and Procedures document does not provide an accurate representation of the agency's actual structure or business practices. Finding 23.2: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Passenger Guidelines and Service Delivery Issue 24: Neither the Riders Guide and Fares or Guide for Passengers documents includes dates or signatures that indicate review, approval, or acceptance by the agency's Board of Directors. Copies of the Board's meeting minutes provided by CCL during the August 28, 2008 site visit do not show that such action was taken. Page 9 of 1i Finding 24.1: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Issue 25: The Riders Guide and Fares document submitted by CCL references an appeals board. There is no description of an appeals board within the agency's organizational chart, by-laws, or articles of incorporation and no record of who serves on it or how it is selected. Board meeting minutes do not show that an appeals board has been appointed. Finding 25.1: CCL's description of its passenger appeals process is not consistent with the agency's actual structure or business practices. Issue 26: CCL's Riders Guide and Fares document states that personal attendants may ride at half price. Both the Riders Guide and Fares document and the Guide for Passengers with Disabilities indicate that portable oxygen tanks will not be transported. Both documents also outline conditions under which requests for rides are documented as refused, rather than denied. The Americans with Disabilities Act (ADA) requires that personal attendants ride free of charge, that portable oxygen tanks be allowed, and that rides that cannot be arranged at the requested time be documented as denied, rather than refused. Finding 263: CCL's policies and procedures regarding personal attendants are not in compliance with Americans with Disabilities Act (ADA) requirements. Finding 26.2: CCL's policies and procedures regarding portable oxygen tanks are not in compliance with ADA requirements. Finding 26.3: CCL's policies and procedures regarding denied and refused rides are not in compliance with ADA requirements. Driver Training Issue 27: CCL did not submit a driver training program as outlined in the July 31, 2008 Site Review Summary document. Although a section is reserved within the table of contents of the Vehicle Safety document, the associated information was not provided. Finding 273: CCL did not provide a documented driver training program. While not federally mandated, most public transportation providers do adopt and follow a written driver training program as a best practice. Issue 28: A copy of Board meeting minutes dated May 15, 2008 indicates that a Board member has, on at least one occasion, acted in the capacity of a driver. There is no documented evidence that Board members have been screened for proper qualifications or have received driver training. Finding 283: Although not federally mandated, CCL should adopt a driver training plan that specifies how all individuals who operate the agency's vehicles or transport passengers are managed to ensure safety. Page 10 of 13 Safety and Security Plan Issue 29: CCL did not submit a safety and security plan as outlined in the July 31, 2008 Site Review Summary document. Although sections are reserved within the table of contents of the Vehicle Safety document for such topics as safety, emergencies, accidents, insurance, fires and evacuations, hold ups and robberies, natural disasters, blood borne pathogens, and infection control, the associated information was not provided. Finding 293: CCL does not have a safety and security plan in place, indicating a lack of operational and management capability. Issue 30: CCL has inconsistently reported or portrayed the circumstances of at least one vehicular accident. On the initial site review checklist, Ms. Lewis indicated that CCL had experienced no significant accidents. However, in an earlier grant status report, CCL reported an accident that occurred in November 2007 in which one passenger submitted an insurance claim for an injury received. Ms. Lewis stated that, to her knowledge, no payment was made, but a Driver and Motor Vehicle Services Division (DMV) report shows that a settlement was paid in the amount of $2,500. Ms. Lewis also stated that the event was minor. However, the vehicle involved, purchased for $41,010 on January 26, 2007, was sold less than five months after the accident occurred for $1,248, an amount that appears to be representative of a total loss. According to Ms. Lewis, the vehicle was sold because it did not meet CCL's needs. Finding 30.1: Either CCL has misrepresented facts related to the November 2007 accident or the agency does not have the capacity to maintain accurate records related to accident history. Vehicle Maintenance Plan Issue 31: The Vehicle Maintenance Plan document did not include the steps for a quarterly preventative maintenance program. Associated pages were either not prepared or were omitted from the document. Finding 31.1: CCL does not have a complete vehicle maintenance plan in place, indicating a lack of operational and management capability. Issue 32: The Vehicle Maintenance Plan document does not properly address testing and maintenance of wheelchair lifts as required by the ADA. The preventative maintenance schedule does not provide for daily cycling of the lift to verify that it is functioning and maintenance is only scheduled on an annual basis. Finding 32.1: CCL's procedures to test and maintain wheelchair lifts are not consistent with ADA requirements, Federal Transit Administration (FTA) regulations, or Motor Carrier Division standards. Page '1 l of 13 Anti-Drug Use and Alcohol Abuse Prevention Program Issue 32: CCL submitted three different documents that address its drug and alcohol abuse prevention programs, including an Employment Policies and Procedures document, Drug and Alcohol Policies and Procedures document, and an Alcohol Policy document. It is not clear which are currently in effect and provisions described among the various documents differ at times. The Drug and Alcohol Policies and Procedures document appears to be a direct photocopy of a book or manual which includes boilerplate language and fill-in fields that have not been modified to reflect CCL's adopted policies, procedures, or practices as well as sections that are labeled as optional which have not been selected one way or the other. None of the documents includes dates or signatures that indicate review, approval, or acceptance by the agency's Board of Directors. Copies of the Board's meeting minutes provided by CCL during the August 28, 2008 site visit do not show that such action was taken. Finding 32.1: Documentation of CCL's anti-drug use and alcohol abuse prevention program is inadequate for review and, therefore, compliance can't be verified. Finding 32.2: As submitted, CCL's Drug and Alcohol Policies and Procedures document may bind the agency to more restrictive requirements than are appropriate for its size and operations. Finding 32.3: CCL is not operating in accordance with its by-laws and articles of incorporation in regard to Board oversight. Issue 33: In a random sampling of CCL's employee records, only two of five files that were reviewed showed evidence that a drug test had been administered. Of those two, only one recorded the test results. During the initial site visit, Ms. Lewis indicated that all employees are administered pre-employment tests and that all drivers are included in a random testing pool. Finding 33.1: CCL's description of its drug testing program is not supported by documentation. Issue 34: During both the July 18 and August 28, 2008 site visits, Ms. Lewis and others were unable to locate a key to open a file cabinet containing confidential employee files. During the August 28 visit, however, a duplicate key was found in Ms. Lewis' briefcase and the file cabinet was made accessible to reviewers. Finding 343: CCL's security procedures for handling confidential records are deficient. Finding 34.2: As the key to the confidential files is not kept in a secure location and was missing at the time of the review, records could potentially have been compromised. Page 12 of 13 CONCLUSION The issues and findings described above demonstrate a present unreadiness and inability to properly manage public funding in accordance with state and federal laws and regulations and in accordance with Federal Transit Administration certifications and assurances, ADA requirements, Department of Transportation guidelines, or industry standards. The agency's by- laws, articles of incorporation, policies, procedures, and business practices are inconsistent as documented. Written policies and procedures are often incomplete or inadequate and there is little or no evidence that the Board of Directors has formally adopted them or that they are being followed. CCL's financial policies, procedures, and systems are insufficient to account for public funds or to track and monitor expenditures made with such resources. The agency does not have effective internal controls in place to ensure against errors, inaccuracies, fraud, or misuse of funds. Documentation to demonstrate sufficient oversight by the agency's Board of Directors is lacking and CCL's organizational structure does not appear to allow for independent review of policy and fiscal management. As a result of the site review process, County staff has concluded, and ODOT concurs, that CCL does not have the institutional, managerial, and financial capability to ensure proper planning, management, and completion of projects and is therefore not qualified to receive certain federal and state funding assistance, including Special Transportation Fund Discretionary and Formula Grants, to operate a public transportation program at this time. Page 13 of 13 Deschutes County Working Capital Balances As of September 30, 2008 Fund # Fund Name Working Capital 105 Business Loan Fund 416,663.74 111 Court Technology Reserve 15,590.83 114 A & T Reserve 205,141.54 135 7ERS Reserve 9,872,911.21- 140 Project Development & Debt Reserve 4,416,807.14 142 General coup Pro"Wts 372,798.53 143 General Capital Reserve, 1,053,965.08 218 Coun Clerk Records 264,747.65 261 Heal, -Department Reserve 551,263.09 290 Code Abatement 92,334.82 300 CDD Operating Reserve 1,059,338.95 301 CDD Building Program Reserve 1,000,797.29 302 CDD Electrical Program Reserve 85,607.64 303 CDD Building Improvement Reserve 111,701.62 305 GIS Dedicated 702,465.11 329 Public Land Corner Preservation 1,570,010.26 330 Road Buildin & Equipment Reserve 1,514,882.72 335 Road Improvement Reserve 5,839.22 340 Vehicle Maint & Replacement 894,256.33 611 SW Landfill Closure 6,944,341.86 612 SW Landfill Postclosure 2,335,031.97 613 SW Capital Project 4,275,054.66 614 SW Equipment Reserve 752,976.27 615 SW Environmental 2,013,273.05 617 Fair & Ex Center Capital Reserve 747,171.63 670 Insurance 2,700 727.24 675 Health Benefits Trust 15,929,312.86 703 Law Enforcement Dist #1 Capital Reserve 735,414.28 704 Law Enforcement Dist #2 capital Reserve 724,426.28 Grand Total 61,364,852.87 "Unrestricted" 2,006,278.25 "Partially unrestricted" 29,427,012.93 (1) Combination Operating and Reserve Fund. FY 2009 Budget includes $225,000 Contingency and $264,290 Unappropriated Ending Fund Balance. (2) FY 2009 Budget includes $1,609,000 appropriated for specified Capital Outlay. (1) (2) Note: Solid Waste Reserves total $16,320,677.81 Deschutes County Spay and Neuter Grant Program General Information Beginning in November 2007, the Deschutes County Dog License and Pet ID Application provided for licensees to contribute additional funds to spay and neuter programs in Deschutes County. These funds are now being offered in the form of grants to non-profit organizations in Deschutes County offering spay and neuter services. A total of $4,000 is available for these grants. Funding Obiectives The primary objective of this grant is to expand spay and neuter services in Deschutes County in an effort to reduce the number of unwanted dogs and cats in the county. The focus of this grant is to provide spay and neuter services or for promotion or education associated with spay and neutering to those who would not have otherwise undertaken the procedures due to financial constraints or physical limitations. Eligibility for Grants Requirements for applicants to the community grant program: • The applicant must be a 501(c)(3) tax-exempt organization. • The organization must be located in Deschutes County. • The proceeds from the grant must be utilized in support of Deschutes County residents. • All proceeds must be used for expenses associated with direct spay and neuter services or spay and neuter education or promotion. How to Apply for a Grant The application deadline is November 1, 2008 for the grants awarded in December. The application form is available on the county website beginning October 6, 2008 or in the Administrative Services office. Completed applications must be mailed or sent electronically to the Deschutes County Administrative Services department on or before the deadline. Once an application has been received, a multi-stage review begins. All applications will be reviewed by a committee of county employees and/or community members based on three criteria: 1. Organizational stability and solvency 2. Connection to grant funding objectives 3. Funds provide leverage to organization for receipt of other funds Each criterion will be weighed equally in determining final recipients. Some applicants may receive phone calls and/or site visits to aid in this process. Application Packet For an application to be considered for a community grant, it must contain the following: • Completed and signed application form, which includes the following: o Organization history, purpose, leadership, structure and activities o Organization budget for the previous and current fiscal year o Description of project or program grant funding will support and other funding sources, if any o Explanation of how the program or activities will positively impact the goal of promoting or expanding spay and neuter services o Explanation of anticipated outcomes and how success will be measured • Letter from the IRS granting your organization 501(c)(3) tax-exempt status Deschutes County Spay and Neuter Grant Application Complete this application form and return it, along with a letter from the IRS granting your organization 501(c)(3) tax-exempt status, to the following address: Dave Inbody Deschutes County Department of Administrative Services 1300 NW Wall Street, Suite 200 Bend, Oregon 97701 Applications may also be sent via e-mail to davidi(ED.deschutes.ong. All documentation must be received by November 1, 2008. Any applications that have not completed all requested documentation will not be considered. No information or materials in addition to that specifically requested in this application will be considered. Contact Information Organization Name Address City Phone Number Fax Number Website Zip Code Alternate Phone Number E-Mail Address 1 certify that the all information provided to Deschutes County is correct and that I am authorized by the governing board of this organization to submit this grant application. Further, I certify that this organization is in good standing with the IRS and retains its official 501(c)(3) tax-exempt status. Additionally, I certify that this organization is located in Deschutes County and any proceed from this grant will be used in support of Deschutes County residents. Print Name Signature _ Title Date Organizational information Brief) describe the history of our organization max 150 words : Mission of your organization Describe the leadership and structure of your organization. If there is a board, include the names of its members max 100 words Brief) describe the primary activities conducted b our organization max 150 words Financial Information Period covered by the most recently completed fiscal year Total expenditures for this period Total financial support received for this period ProiecVProgram Information uescrine the specific program or project that this rant will support max 150 words Describe how this program or project will positively impact the goal of promoting or expanding spay and neuter services max 100 words Explain the anticipated outcomes of this project or program and describe how success will be measured max 100 words FOR: 10/6 Economic Development Fund Discretionary Grant Program Organization: New Generations Early Childhood Development Center Organization Description: New Generations Early Childhood Development Center is a non-profit organization that provides quality and affordable child care for children in the Three Rivers Area. There are currently 36 children enrolled from ages 6 weeks to 8 years of age. Project Name: Head Start Facility Renovation Project Description: The Center received a letter of intent from NeighborImpact to open a Head Start Program at the facility. In order to accommodate the program, the facility will need to be renovated. Funding assistance has also been requested from The Oregon Community Foundation and Three Rivers Care for Kids Foundation. The landlord for the facility is willing to provide heating/cooling and an awning to partially cover the playground. Project Period: December 2007 - July 2009 (Funds needed by January 2009) Amount of Request: $3,000 (Total Cost for Project = $88.200) Previous Grants: • Feb. 2003 - $2,000 Development center ($2,000 Luke) • Dec. 2007 - $3,000 Head Start facility renovation ($2,000 Melton; $1,000 Luke) TE Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org DESCHUTES COUNTY ECONOMIC DEVELOPMENT FUND DISCRETIONARY GRANT PROGRAM APPLICATION Direct Application to: Commissioner Tammy Baney Commissioner Michael M. Daly Commissioner Dennis R. Luke All Three Commissioners xxx Date' 9/21/2008 Project Name: NEW GENERATIONS RENOVATION TO HOUSE HEAD START Project Beginning Date: 12/2007 Project End Date: 7/2009 Amount of Request: $3000 Date Funds Needed: 1/2009 NEW GENERATIONS 93-1328004 i~ Applicant/Organization: EARLY CHILDHOOD CENTER Tax ID L Address' 56840 VENTURE LANE #5-7t3bX % City & Zip: SUNRIVER 97707 Contact Name(s): Sandra Mootry, Board President Telephone: 541-617-9374 Fax: Alternate Phone: 541-593-1010 Email: sandimnbendbroadband.com On a separate sheet, please briefly answer the following questions: 1. Describe the applicant organization, including its purpose, leadership structure, and activities. 2. Describe the proposed project or activity. 3. Provide a timeline for completing the proposed project or activity. 4. Explain how the proposed project or activity will impact the community's economic health. 5. Identify the specific communities or groups that will benefit. 6. Itemize anticipated expenditures*. Describe how grant funds will be used and include the source and amounts of matching funds or in-kind contributions, if any. If the grant will support an ongoing activity, explain how it will be funded in the future. Attach: Proof of the applicant organization's non-profit status. * Applicant may be contacted during the review process and asked to provide a complete line item budget. Amount Approved: By: Declined: By: Date: Date: New Generations Early Childhood Development Center 1. Description of applicant organization, including its purpose, leadership structure, and activities. New Generations Early Childhood Development Center is located in South Deschutes County. We serve young families in the Three Rivers Area, many who deal with depressed economic circumstances. We strive to keep tuition and fees at a modest level and offer a scholarship program to assist when possible. Our mission is to provide quality and affordable child care in a safe, caring and stimulating environment that promotes healthy social, emotional, cognitive and physical development for children in our geographic region. We operate our non-profit with a 9 member Board of Directors and have held our 501-0 status since December 2002. We employ an Executive Director and seven teachers. We currently have 29 students enrolled and serve children from the ages of 6 weeks through 8 years of age. 2. Description of proposed project or activity. We have received a letter of intent from NeighborImpact to open a Head Start Program at our facility. The Three Rivers Area has not had a Head Start Program for more than 6 years and as a result, 30% of the children entering kindergarten are not considered "ready to learn" Betty Schuler estimates we will have 9 to 10 children who meet the qualifications for Head Start, but in order to accommodate these children we will need to renovate our leased facility. We have detailed architectural plans, blueprints, and budget estimates to complete the project and have applied to The Oregon Community Foundation, Three Rivers Care for Kids Foundation, The Collins Foundation, Burlingto Northern Santa Fe Railroad and Sunriver Rotary to assist with funding. Our landlord would support the project by providing heating/cooling and an awning partially covering our play ground. These items are included in the attached budget. 3. Provide a timeline for completing the proposed project or activity. We have made application to OCF, The Collins Foundation, Burlington Northern Santa Fe Railroad, Sunriver Rotary, and Care for Kids for funding for the project which totals $93697. Care for Kids has committed to cover $15,000 now and $15,000 for completion of the project in mid 2009. We applied for and received funding in the amount of $3000 from the County Commissioners Lottery Funds November 2007. These funds were used to finance the completion of the blueprints from architectural drawings. We have submitted plans to Deschutes County and are awaiting our permits to commence renovation. In the meantime The Sunriver Resort has offered to temporarily house the Head Start Program in their Fort Funnigan facility. The program will begin in January 2009 and be complete June 2009. We would anticipate completion of our renovation in July with the classroom and ADA approved restrooms which meet Head Start standards ready for class to start in September 2009. We will use volunteers to help with construction whenever possible. 4. Explain how the proposed project or activity will impact the community's economic health. With the completion of our renovation to house Head Start, the community we will also benefit from additional space to serve the young families in our area by providing affordable care for children. Health and family educational services will be available to all of the students enrolled at our center as a result of the collaberation with Head Start. Through NeighborImpact, we have been approved for funding as of July 2008. 5. Identify the specific communities or groups that will benefit. Families in the Three Rivers Area of South Deschutes County will benefit. 3 and 4 year olds will receive needed training and education and a much underserved area of our population will enter kindergarten ready to learn. As was featured in the Tuesday, November 6"' 2007 Bulletin article, Head Start is struggling to keep up with growth and many children are on a waiting list. The primary reason is lack of facilities available to house the programs. We will help to solve the problem by becoming the Head Start facility in the Three Rivers Area. 6. Itemize anticipated expenditures. Description how grant funds will be used and include the source and amounts of matching funds or in-kind contributions. Please see attached builder estimate and project revenue and expense summary. If request is approved, we would use the funds to assist with the overall expense. Any funding received in excess of the estimates will be used to provide a much needed upgrade to our kitchen. PROPOSAL CHARLES BEITH CONSTRUCTION, OIL LIC. #44868 55008 Mallard Drive, Sunriver, Oregon 97707 541-593-8349 Date: 7/25/07 For: New Generations Day Care Center SPECIFICATIONS; L Survey, Plans, Blueprints $8000 2. Permits building permits only 2000 3 Site prep/evacuation/demolation 2750 4. Foundation-Footings 5. Framing: Materials 2200 6. Framing: Labor 3000 7. Trusses 8. Windows & Skylights 1500 9. Roofing: Labor & materials 10. Gutters/sheetmetal/framing /brackets 11. Siding: Labor & materials 12. Plumbing: Rough in/Finish 9500 13. Wiring: Rough in/Finish 9000 14. Insulation 15. Drywall/Tape 6500 16. Entry Slab 17. Fireplace/Woodstove 18. Fumace/Heating units Landlord 19. Interior Doors 1500 20. Exterior Doors/ Garage 21. Cabinets/counters 2700 22. Interior Painting: Labor & Materials 2200 23. Exterior Painting: Labor & Materials 24. Vinyl/formica/tile: Labor & Materials 2700 25. Water/sewer/power 26. Plumbing Fixtures 1800 27. Electrical Fixtures 2200 28. Appliances 29. Interior Trim/Finis: Labor & Materials 3300 30. Hardware/railing/mirrors 600 31. Carpet/hardwood floors 2700 32. Decks 33. Exterior Concrete/Pavers 34. Driveway/Yardgrading/Fill 35. Miscelaneous-Accoustical Ceiling 6000 36. Miscelaneous- Construction cleaning 1200 37. Miscelaneous- Port-a-potty $75 per mo 300 Subtotal 71650 15% contractor's fee 9457 Total 81197 Leasehold improvements/landlord Heat and Air conditioner 5000 Fixed awning over playground area 7500 Total 93697 NEW GENERATIONS DESCHUTES COUNTY BOARD OF COMMIONERS REQUEST SEPTEMBER 2008 PROJECT REVENUE AND EXPENSE SUMMARY SOURCE OF FUNDS USE OF FUNDS "CARE FOR KIDS $30000 REMODEL $30000 "LOTTERY FUNDS 2007 3000 BLUEPRINTS 3000 **SUNRIVER ROTARY 5000 ARCHITECT 5000 ORE COM FOUNDATION 10000 REMODEL 10000 * *ROBT CHANDLER OCF 5000 REMODEL 5000 COLLINS FOUNDATION 10000 REMODEL 10000 BNSF RAILROAD 7500 REMODEL 7500 SUNRIVER ROTARY 2200 PERMITS 2200 LOTTERY FUNDS 2008 3000 REMODEL 3000 BOWERS LEASEHOLD IMP 12500 REMODEL 12500 TOTALS $88,200 88,200 "These income and expense items have been committed or received to date. Funds have been spent for architectural drawings and blueprints. THE CONTRACTORS TOTAL ESTIMATE INCLUDING LEASEHOLD IMPROVEMENTS IS $93,697 AND DOES INCLUDE LABOR. WE EXPECT TO SAVE MONEY BY THE USE OF VOLUNTEERS WHEN POSSIBLE. THE SUNRIVER COMMUNITY HAS BEEN VERY GENEROUS IN SUPPORT OF OUR CENTER OVER THE YEARS. INTE ~rA REVENUE SERVICE P. C. FpX 2508 CINC7'12,ATI, OH 45201 Date: APR 2006 NEW GENERATIONS PO BOX 3397 SUPiRIVER, OP 97707-0000 Dear Applicant: DEPARTMENT OF THE TREASURY Employer Identification Number: 93-1328064 DLN . 17053084719036 Contact Person: EDWINA 0 PERKINS ID 31229 Contact Telephone Number: (877) 829-5500 Public Charity Status: 170 (b) (i) (A) (vi) Our letter dated April 2002, stated you would be exempt from Federal income tax under section 501(c)(3) of the Internal Revenue Code, and you would be treated as a public charity, rather than as a private foundation, during an advance ruling period. Based on the information you submitted, you are classified as a public charity under the Code section listed in the heading of this letter. Since your exempt status was not tinder consideration, you continue to be classified as an organization exempt from Federal income tax under section 501(c)(3) of the Code, Publication 557, Tax-Exempt Status for Your Organization, provides detailec. information about your rights and responsibilities as an exempt organization. You may request a copy by calling the toll-free number for forms, (600) 829-3676. Information is also available on our Internet Web Site at www.irs.go-:. If you ha=:e general questions about exempt organizations, please call our toll-free number s^owr: in the heading. Please keep this letter in your permanent records. ;4e have sent a cop'v% of this le--ter to your representative as indicated in your power of attorney. Sincerely yours, Lois G. Lerner Director, Exempt Organizations Rulings and Agreements Letter 1050 (D)/CG)