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2015-275-Minutes for Meeting May 27,2015 Recorded 6/23/2015 DESCHUTES RECORDS BLANKENSHIP, COUNTY CLERK W 2015-275 NANCY COMMISSIONERS' JOURNAL 06/13/2016 08;49'46 AM IllIIlllIIIjIOhlllllllIlIII111 2013-27 Do not remove this page from original document. Deschutes Count y Clerk Certificate Page 0 0004 . -‹ en A4�� ,r U G mei o eex, 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 MINUTES OF BUDGET MEETING— SOLID WASTE DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, MAY 27, 2015 Allen Room, Deschutes Services Building Present were Commissioners Anthony DeBone, Alan Unger and Tammy Baney. Also present were Tom Anderson, County Administrator; Erik Kropp, Deputy County Administrator; Wayne Lowry, Director of Finance, Loni Burk, Financial/Budget Analyst; Mike Maier, Clay Higuchi and Bruce Barrett, Budget Committee; and Timm Schimke, Director of Solid Waste. Meeting minutes were taken by Robin Edwards, Senior Secretary, Risk Management. Chair Bruce Barrett opened the meeting at 11:05 a.m. Timm Schimke presented three spreadsheets: historical information; the department's current financial situation, and three scenarios for expanded hours and services. Regarding waste flow, there was 10% growth from 2013 to 2014, and a 12% rolling 12 months change. Mr. Higuchi asked how much impact recycling has had. Mr. Schimke replied that 39-40% of all waste generated goes somewhere other than the landfill, so that's not reflected in these numbers; the spreadsheets reflect only what goes into the landfill. Recycling is about 39% of all waste today. Tom Anderson asked about the brush piles, and Mike Maier asked how many tons they collected. Mr. Schimke stated about 15,000 tons were collected. Mr. Schimke explained that three things happened to get Solid Waste through the lean years.. 1) They stopped putting money into reserves. In 2006, $3.5 million was put into reserves. In 2007, 2008, and 2009 nothing was put into reserves. 2) In 2009, they raised the rate per ton, and it helped. Minutes of Budget Meeting—Solid Waste Wednesday, May 27, 2015 Page 1 of 5 3) They closed on Sundays, cutting four FTE's from the budget. They didn't have to rely on reserves for operating costs. They are discussing reopening on Sundays as a result of better numbers. Mr. Schimke also presented the Revenue and Expenditure Forecasting Model and talked about different scenarios. Going forward, he said they need to consider reserve policy and balances as well as increased services and what they need to do to make both of those healthy. Scenario 1: Current days and hours of operation at all locations —no change Scenario 2: Current days, extended hours of operation— annual expense $84,000 Scenario 3: Add Sundays, current hours of operation —annual expense $328,000 Scenario 4: Add Sundays, and extend hours of operation— annual expense $482,000 FTE's are the biggest cost impact: $67,000 for a Landfill Attendant and $80,000 for an Equipment Operator. Mr. Schimke noted that both figures are based on employees at the top of the scale but with no longevity. Materials and services make up the rest of the costs. Mr. Schimke listed some ways to help cover those costs. Road Department transfers are expected to be about $335,000; money can be saved by eliminating that. Also, if they raise the rates by $5/ton , they would generate $700,000 in revenue. He added a post closure fund into which they'll expect to put $250,000 a year, resulting in $5 million in reserves. This is important so that when the landfill is full, they will have some funds to take care of it when it's no longer generating revenue. He said this is a good management tactic, but it's not necessarily required. They could make a decision to forgo those payments in order to expand service hours, and deal with the cost of Knott Landfill as an ongoing expense with whatever disposal option will be employed. Mr. Maier asked Mr. Schimke to run a scenario for extended summer hours, May to October, with possibly part-time employees. Mr. Schimke noted this is an option, and they have done so in the past, but it was confusing for customers. They accommodate darkness at the Knott Landfill easily due to the lighted building that customers enter, but it would be more of a challenge at some of the transfer stations. Minutes of Budget Meeting—Solid.Waste Wednesday, May 27, 2015 Page 2 of 5 1 Chair DeBone liked the idea of adding service hours. Commissioner Baney said she was hoping that not all stations would be open on Sundays, but to implement seasonal expansion of hours for all locations, and add seasonal. Sundays for Knott Landfill. She says it doesn't make sense to open the other stations on Sundays, especially if they can extend hours. Mr. Higuchi observed that in Northwest Crossing, which is currently a very busy construction area, landscapers are done by 3:30 p.m. and don't need extended hours at the landfill. But Commissioner Baney argued that in the summer there are many companies and individuals who would likely work longer. Commissioner Unger also asked about extending hours in the afternoon only. Mr. Schimke replied that from a cost perspective at transfer stations, any expansion has the same cost implications. Mr. Higuchi suggested experimenting at Knott first, to expand hours and add Sundays. Mr. Barrett stated that the interest is in expanding services and it will cost no matter what. Mr. Anderson said he understands that the will of the Budget Committee is to expand for customer service, but they are faced with large capital costs down the road. It would be useful to know, if we had to select one of the scenarios, what the pros and cons are. Mr. Schimke recommended not doing anything for one to two years. In two years they can add services, leave the Road Department transfer. alone, and not raise the Y � p rates. He wants to see if the current growth continues. Mr. Higuchi disagreed and thinks they should increase rates. Mr. Maier stated they need to play it close to the belt because they don't know what's going to happen; they should try to fund themselves all along the way. Mr. Higuchi confirmed that nobody had issues with the reserve requirements that are out there. Everybody agrees that shorting the reserves is not the way to fund things. Mr. Barrett stated if they want to add services, they need to find a way to pay for it. Chair DeBone asked Mr. Schimke if there are industry standard rates. Mr. Schimke replied that this County is on the low end compared to other nearby counties. Chair DeBone asked, if they commit to increasing rates, would any of the money go back to a diversion. Mr. Schimke stated that if they increased fees by $5 per ton, and assuming they expand service at a cost of$400,000, they'd have an additional $300,000 per year to put into reserves, which helps potential future years' shortfalls. Minutes of Budget Meeting—Solid Waste Wednesday, May 27, 2015 Page 3 of 5 Commissioner Baney said she is worried about an increase, but then is also concerned about franchise collectors. Mr. Schimke noted that they have provisions for that. Commissioner Baney added that they need to work with the City of Redmond, and there is an agreement for a six-month lead time before making an increase. She feels that expanding the hours is something they can absorb. Mr. Schimke said he wants to be cautious, as the last thing they want to do is expand services but then have to pull back too soon in the future. He thinks that incremental steps are best, as they will want to be confident about any changes they make. Mr. Lowry asked how difficult it would be to increase the rates by $2 or $2.50 instead of$5. Mr. Schimke replied that for franchise collectors, which bring in 80% of the waste, it's immaterial, because they run an account and pay a monthly bill. But for the general public, there are a high number of self-haulers. Commissioner Unger asked about increasing the charge to self-haulers but not the collectors. Mr. Schimke replied that this could be an option. Mr. Schimke stated that there is a reason they went away from seasonal hours in the past; they received a lot of calls regarding why they were closing when it was still daylight. He reiterated it was less confusing to add days/hours year-round. Commissioner Unger suggested opening on Sundays and have extended hours only at Knott Landfill. Mr. Kropp said that opening on Sundays seems to be the priority. Mr. Schimke added that expanding hours only at Knott will have little impact on costs. He recommended they make the change for a year and review the results. Commissioner Baney confirmed that they want to see Sundays and expanded hours at Knott Landfill right away. Mr. Schimke explained it has been six years since they have increased rates and he recommends that now. He learned years ago that they much better off having that income flow. They had $14 million in reserves when the recession hit, and that saved them. Commissioner Baney noted that they could compromise, with a $5 increase beginning January 1, 2016. Mr. Barrett and Mr. Higuchi agreed. Commissioner Baney asked how they can make sure the franchise haulers aren't already planning to request an increase from customers. She prefers that if the increase is $5, it be an aggregate. Mr. Schimke stated that the franchisees seem to be financially healthy. With the exception of south County, he thinks for the other three companies it would be a pass-through situation. Minutes of Budget Meeting—Solid Waste Wednesday, May 27, 2015 Page 4 of 5 Being no further discussion, the session ended at 12:15 p.m. DATED this /J Day of C--' 2015 for the Deschutes County Board of Commissioners. Anthony DeBone, Chair 614A - - Alan Unger, Vice Chair ATTEST: (� Tammy Baney, C issioner Recording Secretary Minutes of Budget Meeting—Solid Waste Wednesday, May 27, 2015 Page 5 of 5 BUDGET COMMITTEE AGENDA Wednesday, May 27th, 2015 • Program Budget Tab/Page 9:00 AM • Reconvene the Deschutes County budget meeting 9:00 - 9:30 AM Fair and Expo Center (Funds 617-619 and 601) 4 / 153 • Introductions • Budget discussion 9:30 - 10:00 AM County Assessor's Office (Fund 001-02) 4 / 125 • Introductions • Budget discussion; Special Requests 14/395 10:00 - 10:15 AM Break 10:15 - 10:45 AM County Clerk's Office (Funds 001-05, 001-06 and 218) 4 / 131 • Introductions • Budget discussion; Special Requests 14/399 10:45 - 11:45 AM Solid Waste (Funds 610-614) 4 / 175 • Introductions • Budget discussion; Special Requests 14/439 • 11:45 - 12:30 PM Elected Officials Compensation Committee (Lunch - Discussion) 12:30 - 1:00 PM Natural Resources Protection (Funds 326-327) 4 / 171 • Introductions • Budget discussion 1:00 -- 2:00 PM Road (Funds 325, 328-340) 4 / 159 • Introductions • Budget discussion 2:00 - 2:15 PM Break 2:15 - 3:15 PM Community Development (Funds 290-303) 4 / 139 • Introductions • Budget discussion; Special Requests 14/425 • Page 1 0 0 0 0 Ln d 0 Q1 ✓i Cr 0 in Or 0 C7 ai v} LI1 UI 0 .c 0 L C -0 o o ! 0 c 0 C L) CLJ c Ol Ln N C i+ C L co 0 0 a a f6 a � co a O i°- n - 0 0 0 0 -0 vo 0 O M CU n n UI 0 C .3 • L 3 d o _0 cc ro � U C 0 U a 4- a Lt9 4 N C o C i ul U a a 06 0_ 0 2 w- F as 0 00 R 0 a 0 0 0 C0 LOn in 0 Ifl 0 0 0 ID T-1-1 1001 N 0 M pr: nr CQn Q ? in.tn. in. f4 f4 f4 f4 f4 f4 0.1 CU a. a Q M O r Q 8 N G N o. 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