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2009-1235-Minutes for Meeting May 15,2009 Recorded 6/2/2009Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org MINUTES OF SPECIAL WORK SESSION DESCHUTES COUNTY BOARD OF COMMISSIONERS FRIDAY, MAY 159 2009 Present were Commissioners Tammy Baney and Dennis R. Luke; Commissioner Alan Unger was out of the office. Also present were Dave Kanner, County Administrator; Erik Kropp, Deputy County Administrator; Marty Wynne and Terri Maerki, Finance Director; David Inbody, Assistant to the Administrator; and a representative of KOHD TV. No other citizens were present. Chair Baney opened the meeting at 11:05 a. m. The purpose of the meeting was to go over some last-minute details and clarification of various budget items to be addressed during next week's budget meetings and presentations. Dave Kanner conducted a PowerPoint presentation of the budget overview, detailing amounts and projects. The budget is down because some large projects relating to the Road Department, Solid Waste Department and the jail design are completed or nearly so. All revenue streams are down but property taxes are up about 2%. Small improvements are being seen now, so the forecast might be a little better by the end of the fiscal year, but it is expected that all sources of revenue will be down nonetheless. Some adjustments might be needed once the State has adopted its budget. In order to give some relief to shortages to the departments, health benefits charges to the departments have been reduced, as have those reserves. PERS and OPSRP charges are less but the PERS reserve fund is still growing. The goal is to have reserves equal to one year's claims, and it is now much higher than that. Maintaining adequate contingencies and reserves, based on sound financial policies, is challenging at this time. The goal is at least 8% for each department. Minutes of Board of Commissioners' Special Meeting Friday, May 15, 2009 Page 1 of 5 COLA freezes, supported by the unions, will save the County about $1.3 million for the fiscal year. This also relates to a savings in internal services costs. Two unpaid days off also positively impacts this figure. This freeze does not affect normal salary step increases that about half of the employees may get. The departments usually want to budget additional funds for unexpected expenses; these are not part of the budget. The contingency fund should be able to handle this possibility. The assumption also was that there would be no inflation in the cost of materials and services. The CPIU has been a negative number, and a deflationary period is being experienced. The Board's priorities, as stated early in the year, were the Sheriff's Office, the Assessor's Office, the Clerk's Office and the Tax/Finance Office. Three of these departments are those that bring in revenue. However, they will experience some budget cuts. The Community Grant Program and EDCo are still in the budget, at the Commissioners' request. Mr. Kanner then went over the Board's goals and objectives, with protecting the public being one of the priority items. There have been increased demands on the General Fund by Community Development and the Sheriff s Office; and it became clear that transient lodging tax revenue, which helps to fund the Sheriff s Office, would be drastically down. Even with the reductions, with all of the demands there was still a need for $933,000. This is the time when AFSCME was approached to see if they would support a COLA freeze. The cuts that would have had to happen if they disagreed would have resulted in cuts in several large cuts in various departments. As it turned out, some additional cuts would have to be made anyway. Health benefits charges were further reduced, as were indirect charges. Marty Wynne gave a brief overview of the specifics. Mr. Kanner state that there may requests from the 9-1-1 County Service District and the Deschutes Historical Society. The operating budget figures are down from the previous year, an average of about 10%. The capital outlay number is slightly up. Minutes of Board of Commissioners' Special Meeting Friday, May 15, 2009 Page 2 of 5 The budget is very conservative, and he hopes that the State budget shortfalls are not as severe as expected. The budget does not include federal stimulus funds. In regard to Community Development, it is stretched the most. Mr. Kanner stated that the Board would have to make some tough calls as CDD will likely request additional general fund dollars if things do not improve. The County has estimated conservatively that tonnage at the landfill will do down. Commissioner Luke said that he feels this is a benefit as the landfill will therefore not to have to be closed as soon. The revenue coming in covers operations but not reserves. There will be capital projects needing to be funded in the next two years. The $5 per ton tip fee increase that is effective in July will help to fund these. Some revenue will continue to be transferred to the Road fund. The legislature may pass a budget that will include transportation funding, and the transfer to the Road fund may not be necessary. Commissioner Luke observed that there could be a large shortage in the 19th Street improvement fund, as this may not get funding through federal dollars. He would like to see funding set aside for this project. There are a lot of other needs for these dollars as well. Looking at Fiscal Year 2010-11, there are some major concerns. Those include the Health Benefits Trust fund, based on the assumption that health insurance costs may increase about 11 Another concern is a potential increase in PERS rates in 2012. The existing PERS reserves can help to offset the impact. Cost of living adjustments are also in the future, which would involve AFSCME and non- represented employees. Negotiations with law enforcement unions will take place next year as well. An economic recovery is expected by the end of calendar year 2010. The County has been able to plan appropriately so the economic slump has not resulted in a severe crisis at the County level as it has for other entities and agencies. A year ago, no one predicted the economic situation happening at this time, so there is no way to know what will happen in the future. Eventually costs will rise and reserves will be depleted if the economy does not improve as hoped by the end of 2010. At this time the group took a brief breakfor lunch. Minutes of Board of Commissioners' Special Meeting Friday, May 15, 2009 Page 3 of 5 Commissioner Luke asked that the Commissioners' budget be reviewed for input prior to publication of the budget book next year. Mr. Inbody said that it was sent to the Commissioners for input some time ago. Commissioner Luke had questions about the cellular phone allowance, and how the community grant program is listed, and the cable company franchise fees. He also asked for clarification regarding the purchase of firearms for certified officers, and about the amount paid to the La Pine Industrial Group. Mr. Kanner said that the funds in that account are controlled by LIGI, and estimates need to be made regarding potential revenue from land sales. The County has an agreement with LIGI in this regard. Mr. Wynne added that the numbers shown are budgeted but the actual could be much less. A brief discussion occurred regarding crime prevention funds, which will be at current year levels. Commissioner Luke asked about transportation funds, and the business loan fund. He was advised that the amount in question relates to the Little Deschutes Lodge improvements. Commissioner Luke stated that he wanted to talk about the communications line item during the budget meetings. He asked what the amount for "all others" materials and services includes. Mr. Wynne stated that this item could encompass about 80 different funds. Further discussions occurred regarding items that were in the past budget but are not included in the new one. The budget for Mental Health has been reduced significantly. Most of the department's budgets are less than the amount requested. Commissioner Luke said that he would like a meeting prior to publication of the budget books, but having a meeting such as this one just prior to the budget meetings is helpful. Commissioner Luke stated that he still wants to fund, at least partially, the Inside Deschutes County media work. He feels this has been helpful in getting the public to understand the work of the County and some special situations. Mr. Kanner said that starting next year the support positions in BOCC should be budgeted under administration and not the Board of Commissioners. This would be consistent with the organizational chart. Various other budget items were briefly discussed. Minutes of Board of Commissioners' Special Meeting Friday, May 15, 2009 Page 4 of 5 Being no further items addressed, the meeting adjourned at 1:25 p.m. DATED this 15th Day of May 2009 for the Deschutes County Board of Commissioners. ATTEST: Recording Secretary 34b2w~ Tammy Baney, Chair Dennis R. Luke, Vice Chair Alan Unger, Commissioner Minutes of Board of Commissioners' Special Meeting Friday, May 15, 2009 Page 5 of 5 Deschutes County Budget Overview FY 2009-2010 Dave Kanner, County Administrabr r z. 0 ~ < Our Objective: Balance the budget using strategies and tactics that provide financial relief while creating the conditions for long-tern stability. This Includes: Health bandits charges to the departments reduced 14.4%. Reserves will decrease InFY 2010 by about $880,000. (HBT O 51 BM this year.) a Reduce PERSAPSRP Charges In responseto a reduction In rates assessed by the PERS stem, but continue to grow our PERS reserve In FY 2010. . Maintain adeQrate contingencies and reserves, per financial policiesill Building the Budget 1. Board Priorities ■ Sheriff's Office ■ Assessor's Office ■ Clerk's Office ■ Tax/Finance Office Retain the community grant program Fund EDCO at curent year's level Budget Overview Proposed FY 2010 Budget $281 million = 10% 1 Revised FY 2009 Adopted Budget $313 million WHY? Completlon of contracted projects. Declines In nearly all reveme streams: Recording revenues (39.2%) Planning & Building Fees (39%) Solid Waste (13.3%) Fair/Expo (15%) Translent Lodging Tax (29.4%) Video Lottsry (23%) State Funding for Mental Health (13%) State Funding for CCF (43%) Most Importantly ■ COLA freeze (DCSEA, Sheriffs Office non-represented) or COLA deferral (AFSCME, all other non-represented). ■ Saves $1.3 million Countywide in FY 2010. e About $500,000 remains In Sheriff contingencies. Vast majority of the remainder accrues to General Fund. a Savings In Internal services passed through. a THE DEPARTMENTS DUG DEEP! Building the Budget 2. Board Goals and Objectives Protect the public through a combination of prevention, prosecution, correction and supervision a Provide for direct services that enhance day-today quality of life and plan for future quality of life a Assess, protect and enhance the natural resources of Deschutes County Facilitate, Invest In and provide a of services to Improve the health of Deschut.:=Y residents e Ensure that Deschutes County staff and decision makers have the knowledge, skills, resources and tools necessary to deliver quality public service r 1 Building the Budget I Department Requests ■ Department budgets built around: -10% reduction In health benefits charges -Reductions In PERS/DPSRP charges -Reductions In Indirect service chages -Assumption of no Inflation In materials and services costs BUT... Increased demand on General Fund (CDD, Sheriffs Office) Wher ould the cuts h been? ■ $37 08 in the Community elo nt De rtment (10% reductio hours 5 Is s) ■ $ 4,222 in the Juve eppartment % r uction in hours o ayoffs) ■ $ ,253 in the He Services Depart nt ( layoff, oth ductions in maters and s ices) ■ $5 58 in Fair & Expo Departme (one lay ■ $31, the Crime Prevention ices Fund ( racted crime proven ' services) OV __1AirB,~u8gdget FY 2009 FY 2010 % Change personnel $76,008,332 $71,619,286 (9.77%) Matte & Svc. $92,444,244 $74,918,799 (1958%) Cap. Outlay $6,469,460 $3,820,227 (40.93%) SUBTOTAL $174,919,036 0150,058,309 (14.21%) Other C.O. $22,914,185 $23,845,506 406% Debt Service $19,436,701 $16,932,439 (12.88)% Transfers Out $26,402,358 $23,244,738 (12.00%) SUBTOTAL $243,672,280 $214,080,993 (12.10%) Contingency $69,377,801 $67,244,939 (307%) TOTAL $313,050,081 $281,325,932 (10.13%) Building the Budget $933,000 F " ,a-!-, 1 OUCH! ■ Reduce health benefits charges to produce another $400,000 in savings to GF ■ AFSCME COLA deferral applied to all related budgets ■ Kept savings: CCF Mental Health P&P Fair & Expo TOTAL: $75,522 +$275,000 Revenues 1 hope we're wrong! (i.e., too conservative) NOTE: Budget includes no federal stimulus 2 Community Development July 1, 2007 July 1, 2009 FTE 73.6 48.1 Charges for Service $7.2 mm $3.65 mm Total Op. Budget $9.2 mm $6.1 mm Reserves _ _ _ $5.6 mm $0 Score rSC.. ;t:T C,t r,., 4.79 4.82 Solid Waste FY 2009 Budget YTD Actual' Private andComm'I disposal fees 53,2429439 8199799137 Franchise disposal fees 84,826,406 $3,351,423 TOTAL 88,068,836 85,330,560 'Through Apr. 30, 2009 Budget assumes towage next year will be 3% below current year - - projected actual _ Looking Ahead to FY 2011 oriq oil 0 L~LA HBT PIERS COLAs BBm ~ lfi sts. AFSCME and non-reps.) Community Development General Fund Contributions FY 2009 $200,000 - Long Range Planning $850,000 - BNWC and contingency for FY 2010 General Fund Contributions FY 2010 $1,516,627 Keeps CDD on 36-hour week. Budget is built on an assumed continuation of one of the worst (if not THE worst) five- month periods in County history! Solid Waste Proposed budget hcludes a S5/ton tip fee Increase. Continues transfer of $708,567 to Road Fund. OPTIONS: r. Raise tip fee, keep $5 that otherwise transfer to Roads 2. Raise tip fee, continue transfer to Roads 3. Requested budget, continue transfer to Roads I Requested budget, but keep that transfer to Roads •ImPmrt Pmdvniary.- • Rdv. i M d ' vpmtlvv d ve un ' R Wvd b~ a v8E^.^Fde ufuvd lo.d. rl. ~°"F°l ,mm ..eery • R.br rd.nad feo '~'tW RudR:i,.rtu+.u dbudgm ~ •R+mvutlrr m.o - _ 2RR~c+~rm+n - Short tnm IeoR.rao, roo dbudRnaiw m,c.ma.wm,u.r~+.u~..m.e nmaym.n.c:iau.um.+r.. 3 Looking Ahljwk 2011 The Economy QUESTIONS? 4 Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org Thursday, May 14, 2009 For Immediate Release Contact: 388-6572 NOTICE OF MEETINGS The Deschutes County Board of Commissioners and County Administrator will hold a brief pre-budget meeting at 11:00 a.m., Friday, May 15, 2009, in the Allen Room (Commissioners' Office). Fiscal year 2009-10 budget presentations and discussions are scheduled before the Budget Committee 9 a.m. to 5 p.m., Monday, May 18 through Thursday, May 21. Public hearings on the fee schedules for fiscal year 2009-10 will be on the Wednesday, June 10 Board regular business meeting agenda (10 a.m.). Public hearings on the 2009-10 budgets for Deschutes County, 9-1-1 and other taxing entities are scheduled for the Wednesday, June 24 regular Board business meeting (10 a.m.). Consideration of adoption of the fee schedules and budgets will also be on that agenda. Two of the Commissioners will be meeting with representatives of the Oregon Department of Transportation on Friday, May 22 at 9 a.m. to discuss Century Drive and Forest Road 41 projects.