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HomeMy WebLinkAbout2008-07-09 Work Session Minutes 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 WORK SESSION DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, JULY 9, 2008 ___________________________ Present were Commissioners Dennis R. Luke, Michael M. Daly and Tammy Melton. Also present were County Administrator Dave Kanner, Deputy County Administrator Erik Kropp, Sheriff Larry Blanton; David Givans, Auditor; Marty Wynne, Finance; Teresa Rozic, Property and Facilities; Laurie Craghead, Legal Counsel; Alan Unger, Redmond Mayor; various representatives of the media; and approximately forty other citizens. Chair Luke opened the meeting at 1:30 p.m. 1. Forester Update. Joe Stutler updated the Board on the status of grants received, those that have been applied for and work regarding cleanup of private property. He also gave a brief overview of Project Wildfire and what is being done to address fire season issues in Central Oregon. A severe wildfire season in California is impacting the entire west coast; temperatures have been over 100 degrees for a long time, and over 700,000 acres have been lost, as well as more than 100 homes. Alan Unger, Mayor of Redmond, asked how the BLM land outside of Redmond is handled in this regard. Mr. Stutler replied that the various agencies combine resources and respond as needed without regard to whose land it is. 2. Update and Discussion of the Telecare Project and Grant Opportunity. Due to time constraints, this item will be addressed at another date. Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 1 of 9 Pages Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 2 of 9 Pages 3. Discussion of Pending Closure of the Redmond Humane Society. Dale Gilbert, the President of the Humane Society of Redmond’s Board of Directors, and Jason Reynolds, Treasurer, were introduced. Mr. Gilbert then introduced Tony Duff, Lisa Klemp, and Dr. Rachel Oxley of the Board; Loretta Mann and Jackie Dahl were not present. Mr. Gilbert thanked Dr. Byron Maas, Dr. Oxley and others for donating their time to do spays and neuters of over fifty animals during the week. Mr. Gilbert said that it is safe to say that everyone knows the Society is in financial distress. The problem did not happened overnight. In short, the facility does not have funds to continue operations. They were not able to make payroll obligations on June 30 but are working with the bank to cover that. A decision was made to close the shelter, which is what will happen now if there is no way to come up with some kind of solution that would allow the current Board to do otherwise. Commissioner Melton asked how long Mr. Gilbert was on the board. He said over three years, and as President for the past year or so. Commissioner Melton asked what they have done in regard to fundraising efforts. Mr. Gilbert said that the facility has never been able to do a good job of fundraising, for a couple of reasons. Overall as a community, there is difficulty raising funds when compared to Bend. The current situation has taken a lot of time to manage and has not allowed opportunity to put on quality fundraising events. It takes money to make money. It is a complex dynamic. The expertise of those on the past Board and current Board is not in the area of marketing or fundraising. He would like people in the community help with that. Mr. Duff said that the Society is about $20,000 per month in the red, including some interest-only payments on the mortgages. Commissioner Luke asked what their income has been; Mr. Duff replied it was about $450,000 last year. Mr. Gilbert explained that the primary mortgage is about $580,000 and costs about $5,000 per month. There is debt tied to the event center for $650,000; the interest payments are taken care of through the trust for twelve months. He has been hoping that a property sale will happen to clear that debt. There is another debt in the amount of $130,000 that runs $1,000 per month. Total debt service is about $12,000 per month, and is secured by the property. Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 3 of 9 Pages The executive director resigned on June 26, and since then records show some other debt. There is credit card debt in the amount of $25,000 at an interest rate of almost 25%. Commissioner Luke asked how this could happen without the Board knowing about it. Mr. Gilbert said that as a new board, they were not given all of the information on shelter operations. Things have been kept from them, although they are not blaming someone. It was not just the resignation that caused this, and not just the trust that has been slow to give them information they needed to make decisions. There was a combination of things. The goal of the board is not to look at what should have been done; they want to fix the problem. It cannot be fixed just by the board. It will take the City, County, HSCO and the shelter to help figure out how to structure and operate the facility properly. They will all have to look at trust. They are looking at the City and County for help or they have to shut the doors. The Redmond shelter is important to the community. Bend has a great facility but cannot carry the burden. Sheriff Blanton asked about their budget. Mr. Gilbert said it was approved on June 30, for $516,000 a year, but only a portion of the debt service was included. The debt service is on the main facility; the event center is okay for a year through the trust. The numbers will be skewed, and bills that have not been opened since 2007 are significant now. A notice from the City that the water is going to be shut off on July 15 was there. He expects there will not be further surprises but no one knows for sure. Sheriff Blanton said that if there is $450,000 in income, but a budget of $516, it is upside down, plus other debt; he questioned how they put this budget together and approved it. Mr. Gilbert replied that this was based on last fiscal year, and they will have to do fundraising to make up the difference. Alan Unger said the Teater Trust has been in the overall plan as one of the things to set some of this right, but it is taking longer than anticipated. Mr. Gilbert stated that counting on that money has caused the majority of issues being faced today. There are two parts to the trust. One is the mobile home park, with revenue that is collected monthly and given to the shelter annually. The other is the assets of the trust. Last year the beneficiaries of the trust got together and asked that some bare land be sold. Unfortunately, that request was not acted upon as hoped. Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 4 of 9 Pages He said a Realtor reviewed the 11 acres some time ago and said it is worth about $195,000 per acre. An offer is being considered but he is skeptical about this price being overinflated in today’s market. If there were liquid funds in the trust that could be used, they would not be here today. With not having the proper income stream, and the fact that they had an animal welfare officer at the shelter who was supposedly handling cases but was in fact going to other counties where there is no contract in place, with the shelter carrying most of the burden of the cost, that position has been terminated. He has asked the interim director to get contracts from those counties. This also could conflict with the Sheriff’s Office union. The type of management has been a problem as well. Ron Roberts, Redmond Police Chief, said that they should have had a zero- based budget and not one that includes something that might not happen. Mr. Duff stated that the plan was to go back to core services, but the shelter is now stuck with certain bills. Sheriff Blanton pointed out that the Humane Society does not have a responsibility to do investigations. The people in his Department are animal lovers and have an obligation to address this growing problem. He suggested that an independent audit be done, but this will also cost money. They cannot walk away from this. Commissioner Luke asked Mr. Karnopp to comment on the Teater Foundation. Mr. Karnopp said that Arthur and Alice Teater owned Green Pastures Mobile Park and adjacent land. The trust was created in 1982, and allowed them to benefit while still living and, upon their deaths, the income would be distributed annually to the two Humane Societies. The principal was to be distributed in five installments over a five-year period. The agreement was amended in 1989 to divide the amount equally between the two organizations. There is a provision that they must be actively engaged in offering care to animals. Mr. Teater died and Mrs. Teater asked Mr. Karnopp to administer it. There is ongoing income from the mobile home park’s low-income tenants. They have been talking about the potential sale of the mobile home park to an organization that may allow the residents to purchase it. The Teaters were concerned about the tenants. He is not sure if there money in the trust that could be distributed. He is troubled by the news of the possible closure, since they have to be actively engaged in animal welfare to benefit from the trust. Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 5 of 9 Pages Commissioner Luke stated that it would be difficult for any government agency to give money to a nonprofit without some kind of security. He asked that if it is up and running, could the bare property be used as security. Mr. Karnopp said no; there is only an expectation. Money can only be provided to a going concern. Commissioner Daly asked if the trust were liquidated, is there enough money to pay off the debt on the buildings to get rid of the debt service. Mr. Karnopp said this is conceivable but unknown because of the market. Sheriff Blanton pointed out that this might relieve debt service but what about the day to day and long-range plans. When you close down, it is not easy to reopen. It is dangerous to run any organization based on something that might happen. His Department will help in any way it can other than financially. This is a quality of life issue for any city and county, relating to animals and animal abuse. There needs to be a viable, immediate fix to the situation. In his opinion there needs to be a new budget and new books. Chief Roberts observed that he supports this valuable function, and wants it to be sound and remain open. Mr. Kanner asked if there is seasonality to the expenses. Mr. Gilbert said it is about the same month to month, although could spike if there is a rescue event. An important consideration is having the capacity to take care of large animals. The rising cost of hay and people wanting to dispose of large animals that might be dumped on public lands or starve to death requires proper fencing and shelter for those animals. What they have now is not adequate. Mr. Gilbert said that they should be an example for the community, and when they don’t have the proper structure, they need to change. He said the Board has not done a tremendous job, but they are committed to not giving up or backing down. They are in trouble and need help, and don’t have all the answers. Mr. Kanner asked if they have a business plan or something in place to address a short term fundraising effort that could help net this amount. Mr. Gilbert replied that he hopes to see community support in this regard. With a management change and a commitment to making it successful, they hope for donations. Perhaps they can get help from HSCO to put on a quality fundraiser. Mr. Kanner observed that they can always hope that the community steps up, but can’t always count on that. Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 6 of 9 Pages Mr. Gilbert stated that they will get an interim director and restructure, but the amount of time it takes a voluntary board to work on this is tremendous. They have been spending a lot of time dealing with shelter issues and don’t have the manpower to do it. They hope to bring people onto the board with business acumen. Commissioner Melton asked what getting down to bare bones would look like. She said she anticipated that they would have brought a balanced budget. Mr. Gilbert stated that the executive director just resigned a week ago, and to have a full-blown plan in this short time is hard to do. They are working towards this. Commissioner Melton said that everyone needs to be responsible. She has served on a lot of boards. At the end of the day, they are responsible. Sometimes it is just tooth and nail. With pending litigation, no agreement as to which direction to go, this just didn’t happen. The board has allowed it to get to this juncture. There is responsibility of being on the board of directors. Mr. Gilbert stated that they take it seriously and are not backing away. There is a group of individuals who would like to see the current board gone. He doesn’t think that this should happen at this time, as there is work to be done. To have someone come in and start over would cause this plan to fail. Commissioner Melton observed that there does not seem to be a plan in place yet. Katie Kudlin, President of the HSCO board, feels it is in everyone’s best interest that their doors stay open. If not, it is an overwhelming situation that HSCO cannot accommodate. There is not enough room and no place for large animals. She said that they have offered help in the past. Pat Roden of HSCO offered to help before with issues other than financially. Dan Newport, Vice President of the HSCO board, said he has been talking to Mr. Gilbert about this. They extended an invitation but are not sure what they can do; they cannot jeopardize their own financial situation. Much is incumbent upon having big donors. It takes too long to put on an event to make a lot of money; the quickest way is to simply ask for money. They can work towards a balanced budget, and HSCO will help where possible. They cannot afford to take their animals, and it is a terrible thing but there is not enough space and ultimately the animals will suffer. They don’t deal with large animals so will have to figure out what can be done. Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 7 of 9 Pages Sheriff Blanton says that the Sheriff’s Office counts on Redmond Humane for large animal seizures. This cycles, but with the economy and the cost of hay, it is now a big issue. He also suggested that it doesn’t matter what your budget is if you can’t cover expenses. Commissioner Luke asked if the County has an obligation to run the shelter if it closes; and what do other counties do. Mr. Kanner replied that the counties run them as they have statutory animal control authority. Sheriff Blanton said that they are obligated as a county to take care of animal issues. He has been around counties that have county-run shelters. Something needs to be done. Commissioner Luke said that a long term plan needs to be discussed at the staff level. Mr. Unger stated that the City Council wants it to stay open. They have some funds for animal control, and can help to keep it open with the expectation that they will not be charged for animal care. Sheriff Blanton observed that in terms of money, there appears to be no plan in place today. They need to be diligent with taxpayer money. He asked if the County or City are in a position to relieve debt service. Commissioner Luke said that the immediate thing is that there be funding to keep them operating until August 15. Staff from the City and County can work with them to develop a long range plan. He hoped that the trustee would be part of that. There is an asset of bare ground; it could possibly be put up for security to pay back the City and County. Sheriff Blanton asked about the employees, unfunded liability for vacation accrual, workers comp and similar expenses. Mr. Gilbert said he did not know these figures. Commissioner Melton stated that in terms of operation, this is just a Band-Aid; the long-term can’t just look at the trust. That is a risk that sometimes pays off but obviously didn’t this time. They should not look to just selling land down the road to fix this problem. Commissioner Luke said that this is business, not personal. It is a burden on everyone if they shut down. Mr. Unger stated that he wants to see fiscal oversight. Mr. Gibson said that Jones and Roth are their current CPA. Sheriff Blanton said that there needs to be an independent auditor. Minutes of Administrative Work Session Wednesday, July 9, 2008 Page 8 of 9 Pages Mr. Unger said that the City could front funding for the next month. He asked if the County can put up some cash, as a loan instead of a grant. Laurie Craghead pointed out that there are organizations that give grants to help agencies such as this one. Dr. Byron Maas pointed out that there are a lot of issues compounding this situation. Historically the government agencies have relied on nonprofit humane societies to provide impound services for the community. This is a huge burden considering the growing number of animals. The ultimate responsibility will fall to HSCO or Ochoco if Redmond closes. They will have no ability to process the animals and they will be subject to euthanasia. He said that there are organizations in this area that have done a huge job in trying to get the overpopulation numbers down. This has to be addressed. In regard to the event center, it was important to a lot of citizens when there was the wildfire at Sisters and people and animals were evacuated. This needs to be kept in mind. The consensus was that money is the solution and a long term plan is needed. Mr. Gilbert said that the shelters aren’t able to work on adopting out animals. They need other sources. They have the event center but are not sure what kind of use is appropriate. They could make it a doggy day care center but additional employees may be needed. Mr. Karnopp said that it is not necessary for him to be involved in this plan. Rachel Oxley, board vice president, said they will put forth a business plan and short-term action plan, but they are unable to come up with the bare bones number. They do not know the current financial state. They would like people to help in the long term, expand the board and have task forces. Commissioner Daly said that he advocates getting as much money as possible to the shelter. His wife was on the boar for a number of years. They operate primarily on volunteer help and struggle to raise funds. The government should take a more active role to help them out now and later. Commissioner Luke stated that the County does support them in some ways. Commissioner Melton pointed out that the land was donated by the County.