Loading...
HomeMy WebLinkAbout2014-05-30 Budget Meeting Minutes - EDCO, Wrap Up Minutes of Budget Meeting Friday, May 30, 2014 Page 1 of 25 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 DESCHUTES COUNTY BOARD OF COMMISSIONERS FRIDAY, MAY 30, 2014 – EDCO & WRAP UP ___________________________ Allen Room, Deschutes Services Building ___________________________ Present were Commissioners Tammy Baney, Anthony DeBone and Alan Unger. Also present were Tom Anderson, County Administrator; Erik Kropp, Deputy County Administrator; Mike Maier, Clay Higuchi and Bruce Barrett, Budget Committee; Wayne Lowry and Teri Maerki, Finance; and, for a portion of the meeting, Nick Lelack, Community Development; Dave Doyle, County Counsel; Judith Ure, Administration; Andy High, Central Oregon Builders’ Association; and Roger Lee and four other representatives of EDCO (Economic Development for Central Oregon). No representatives of the media were in attendance. Meeting minutes were taken by Bonnie Baker. Bruce Barrett opened the meeting at 9:00 a.m. ___________________________ Bruce Barrett asked if anyone from the departments should come back today to complete discussions. EDCO. Roger Lee introduced Angela Price, immediate past president of EDCO and the regional manager for Pacific Power; Greg Lambert, past president of EDCO, and Sam Lambert, of Mid-Oregon Personnel; and Amy Tykeson, incoming president of EDCO, of Bendbroadband. He provided information on their budget and a draft strategic plan. Mr. Lee then conducted a PowerPoint presentation. He feels their organization is not only judged by efforts, but results. Over three quarters, their company visits, assists and referrals, events, and event net profit were well over the annual goal. Earned media is also tracked is lower than anticipated, but their advertising budget is minimal. They rely heavily on media mentions. Minutes of Budget Meeting Friday, May 30, 2014 Page 2 of 25 Their goal is to have 24 companies build or purchase equipment and become active; year to date they are at 26. The companies’ capital investments have been almost double the goal. Payroll amounts are on track. Most of the companies have located in Deschutes County, except for Apple in Crook County. There is a wide variety of companies established or in the work s. The venture catalyst program that assists entrepreneurs has met all of the established milestones. They are seeing an average of 200 early-stage companies annually. This program is relatively new and will require sustained public funding since capital is not well-established. They are seeking a new manager with the right experience who does not expect a lot of compensation. Sam Lambert said that his company would not be where it is now without the assistance of this group. The guidance provided was priceless. In the past few years, there has been a big increase in entrepreneurs in this area. A lot of the start- ups are not just from here, but from elsewhere. They come here because it is becoming known as a good place to begin a business. His company was an early stage success story. Angela Price emphasized there is a culture here that is hard to replicate. This team has gotten in the front of this, and other communities are trying to figure out how to replicate these efforts. EDCO’s staff saw this opportunity early and acted. Amy Tykeson said that they can help business here grow, bring in new; and seeding those who have good ideas. It is an investment strategy for the future. With the university and the entrepreneurial spirit here, they are in a g ood position to bring in business. Mr. Lee stated he knows they have budget constraints, but he wants to emphasize how important the venture catalyst program is to the area. Bank of the Cascades has helped with this. The funding last year was for $30,000. It is now at $15,000 so another $15,000 is requested. Commissioner DeBone said they made some specific choices out of the video lottery fund. Mr. Anderson said that a year ago they almost doubled the allocation to EDCO based on the new concepts and having a representative in Sisters and La Pine. The Board refocused a commitment towards economic development. Minutes of Budget Meeting Friday, May 30, 2014 Page 3 of 25 This year they got bad news about how much lottery funding would be provided from the State. The challenge this year was to try to fund what has been funded in the past with $100,000 less available. This affected many agencies and partners. They increased the administrative allocation to EDCO by $5,000, but reduced the amount to the venture catalyst program. He considered it as part o f the general contribution, with a net reduction of $10,000. The amount was similar to the previous year. Mr. Maier said no County department got that kind of increase. Commissioner DeBone feels emergency food and shelter is top-heavy and this is a good direction, even though they got twice as much. The cities are matching at some level. Mr. Higuchi asked what the difference is between last year and this year. Mr. Anderson said $10,000. Mr. Higuchi asked where that would be taken from. Mr. Maier stated he does not recall doubling the contribution. Mr. Anderson stated that it was done by the Commissioners at their discretion. Mr. Higuchi said it was brought up in the presentation last year, but the Budget Committee did not take action. If it is a priority to the Board, that is their choice. You will not see results in a year or more. A commitment has to be made over a long time. Chair Baney stated that the Board did not want it to be a permanent allocation. She looks to the cities. They gave $10,000 to both Redmond and Bend. She stated that it might be better used directly towards EDCO and not to the cities. Mr. Lee stated those proceeds focused on the Bay Area. EDCO would have to find resources elsewhere. The cities gave $28,750 per year for two years. It is a relatively small amount but it all helps. Mr. Higuchi asked if it is understood by the cities that funding from the County it is not forever. Mr. Lee said they fund a significant amount. The local programs are scaling back, but the venture catalyst takes longer. The regional offices are meant to sustain operations. Fundraising for local entities is in Bend only at this point. Mr. Maier asked what they should anticipate in the new few years, seed money or add-ons. Mr. Lee stated that Founders Pad is to be phased out in year 3. The venture catalyst is one that should continue as a core economic development program. The Commissioners had asked for the whole package. Ms. ? stated this provides building blocks for new companies. The funding covers instruction. This is the new economy. Minutes of Budget Meeting Friday, May 30, 2014 Page 4 of 25 Commissioner Unger stated that OSU-Cascades is seeking federal funding for something similar. Mr. Lee said other accelerators are looking to launch as well. Commissioner DeBone said that the lottery grants supports those most in need and economic development. It is hard to put these together. They chose not to add to the general fund expense for this. Chair Baney said it is difficult because you have to decide whether you feed children or use the funds for this. Greg Lambert asked about compartmentalizing, but they can show the jobs created and in turn bring revenue to the County. He understands the human needs but by creating jobs, this reduces those needs. They are striving to create an environment that will create jobs over time. This will reduce the need for other help. It is hard to measure and takes time, but should grow every year. Commissioner Unger stated that is why they are in the game. There are a lot of immediate demands th at others feel should be continued. Mr. Lee said the County is a great partner, and he hopes for help in sustaining these programs. ___________________________ In regard to enterprise zone activity, 34 businesses participated, with a capital investment of nearly $62 million, and 930 new jobs. They are tracking well on all major plans, launched the Sisters and La Pine programs, and have made major headway for start-ups. All of this provides an excellent value for the County’s investment, which is about 20% of EDCO’s budget. Wi thout that support, it would be a very different organization. ___________________________ Commissioner Unger asked about the forgivable business loan fund. Over $500,000 has been invested, and the Board needs to decide what should be reinvested. Mr. Lee said that the jobs committed were 425, but 832 were created. There have been zero losses. (Mr. Lee referred to a list of the companies involved in this program and the details of each.) He recommends recapitalizing the fund. The City of Sisters is considering a similar program. Mr. Maier said there was a huge increase in the cost for speakers and events. Mr. Lee said they are getting higher caliber speakers, but people are willing to pay more to hear them. Minutes of Budget Meeting Friday, May 30, 2014 Page 5 of 25 Chair Baney asked if the Board came up with half of the venture catalyst amount, could EDCO match it. Mr. Lee said he thinks they can, and this can be discussed later in the year. The EDCO representatives left at this time. ___________________________ Mr. Barrett said perhaps EDCO can double its membership if the County challenged them to do so. Mr. Anderson stated that most of the funding that was added last year is a pass-through. Mr. Maier feels that Founders Pad is a duplication of other programs. Chair Baney stated she does not understand how this operates but Mr. Lee indicated it is critical, but a pass-through. Mr. Barrett stated he is involved with SCORE and they do much of the same thing, helping new businesses. There is also Opportunity Knocks, which is a peer support group doing something similar. Commissioner Unger said Founders Pad is trying to teach people how to sell their business and do more on their own. Mr. Maier stated that there are a variety of options. Commissioner Unger feels that it all helps to create buzz. Commissioner DeBone said that the Venture Catalyst manager needs to be the one who advocates for Founders Pad or other programs. Mr. Maier thinks the County is digging itself into a hole by having to pick and choose. He thinks EDCO should get the funds and then decide which programs should be supported. EDCO is the expert and should not be asking the County to decide on the various programs. Mr. Barrett stated that they want to encourage organizations but what is lacking is leadership for the programs. EDCO has the controls and knowledge, and they should handle this internally. Mr. Higuchi noted there are alternatives to Founders Pad, and they might want funding as well. Commissioner Unger thinks they should just fund EDCO and let them decide how to apply it. Mr. Maier said they should give EDCO what is budgeted and keep it simple. Chair Baney stated that there was a commitment made to La Pine and Sisters to establish their unique ownership of this under the direction of EDCO. The $20,000 to each should be upheld. This is within the $217,000 that is budgeted to EDCO. The cities will need to know that eventually this will funnel through EDCO. Mr. Anderson stated that the lottery allocation is annual and there is no way to know what that will bring in the future. Minutes of Budget Meeting Friday, May 30, 2014 Page 6 of 25 Chair Baney said they should adjust Founders Pad by $5,000. Judith Ure said they are in an awkward position since EDCO handles the pass-through and would have to advise Founder’s Pad of the reduction. Chair Baney said they could give the Venture Catalyst $20,000. Mr. Maier stated they need to be put on notice that in the future it will all funnel through EDCO. Commissioner DeBone would like to see $10,000 from the general fund to keep them whole. Judith Ure said that Mr. Lee seems to think this is the last year o f the three-year commitment to Founders Pad. Commissioner Unger would like to see them remain whole this year. Mr. Maier thinks EDCO should prioritize where the money goes. The Board does not get involved with how COVA spends its money. Commissioner DeBone does not want to get in the middle of expectations for Founders Pad and the catalyst manager. Mr. Anderson said they are in between venture catalyst mangers, so there is a salary savings right now. Chair Baney feels that $2,500 from general fund is adequate. Mr. Higuchi said if the Board wants to deal with this through lottery funds, they can move on. Mr. Maier would support one year of general fund coverage but they have to prioritize in the future as to where it goes. It would take $7,500 out of the general fund to make all of them whole. Mr. Higuchi said that next year they need to do something else. Mr. Anderson said they would transfer $7,500 from general fund to the lottery fund, and restore half of the Founders Pad money. Chair Baney said that next year they just want to hear from EDCO and Roger Lee. Mr. Kropp said the Board did agree to help with the city positions. Wayne Lowry confirmed that they are to take $7,500 out of general fund and put it towards the video lottery fund; and increase EDCO by $15,000. Judith Ure said that she has to report on the lottery fund and this is awkward. Also, there might be an ending balance to the fund this year and they would transfer it in. The Board still has the last quarter to handle. ___________________________ CDD. Andy High and Nick Lelack joined the meeting. Minutes of Budget Meeting Friday, May 30, 2014 Page 7 of 25 Chair Baney commented that the recession times were tough, and they talked about service levels, and how to stay on top of things when it turned around. At the same time, they were updating the comp plan and this was a significant investment. She has no idea what this project cost. The Board asked for a variety of other projects, long-range in nature, while they had the time. Reserves need to be restored and stronger. They need to identify when to update the comp plan and establish reserves for this and similar planning issues , and how to cover long-range and current planning costs. Commissioner Unger stated there is a percentage of both and a value to both , for the agency and others. Mr. Maier said they talked about reimbursement but did not decide on it. He recommended that they approve the budget but increase reserves to four months. Mr. Anderson suggested it would be better to have closer to six months’ operating costs. Mr. Maier stated they need to build reserves, pay off the building and try to calculate what the extra work costs. He does not want to hold up anything waiting for these figures. The repayment cannot be made now without more information. Mr. Higuchi noted that reserves need to be rebuilt. Long-term planning to him is different. It should be separate from what affects building in general. Direct services are different. If the Assessor or Clerk had a deficit, it would be made up through the general fund. Mr. Maier stated that some departments are mandated to have certain services and reserves. Mr. Higuchi said CDD should not be treated differently. Commissioners Unger said that long-term planning involves the use of the land, water and infrastructure so they are ready when building occurs. They need to be sure they are capable of handling it. Commissioner DeBone said they are expected to make payments on their pay-back plan. Mr. Lowry said they know how much general fund that is. Mr. Maier stated that when times were good, CDD was covering the cost of long-range planning. Commissioner DeBone feels they should strike this sentence from the document. He appreciates long-range planning efforts. Mr. Lowry said there was $495,000 for long-range planning, but the net was less. Commissioner DeBone asked they think about this as an enterprise fund. Commissioner Unger looks to CDD in this way. Mr. Maier said they were self-sufficient for years. Long-range planning merits ongoing general fund support because it is not entirely self-supporting, but sets the table for many other activities. Minutes of Budget Meeting Friday, May 30, 2014 Page 8 of 25 Commissioner DeBone asked about a years’ worth of reserves and paying off the bills. Mr. Maier said if they are making a lot of money, they can pay this back over time, but should not drop the reserves. Mr. Anderson feels that the reserves may not keep going up. Fees are the balancing point. Development is cyclical and eventually there will be a downside, and they need to still maintain services. Mr. Maier noted that he would like to see a serious conversation with the builders eventually. It will take time to build the reserves back to where they should be. They have to decide whether to provide general fund support again if things go down. Mr. Higuchi said the Board does not ask other departments to pay back general fund. Mr. Maier stated it is not right to compare this to the Fair & Expo. Traditionally Fair & Expo facilities are funded through the general fund. This is a $50 million investment as well. Mr. Lowry noted that in 2007, CDD had $5 million in reserves. That was spent down and the general fund put in $4.2 million; and they also laid off 2/3 of their staff. Chair Baney asked how much has been spent on long-range planning historically. Mr. Lowry said they don’t have those details yet. Some funds were chipped in to pay for long-range planning to get specific projects done. Mr. Anderson stated that during the years before then, CDD paid for long-range planning, and this would need to be calculated into the 1990’s. It might be a wash. Mr. Maier thinks they might be fine and they don’t need to make a decision now on repayment. The fees are still lower than in the City of Bend, and are middle of the road for the State. He would rather see small, incremental increases as necessary. Mr. Anderson supports removing the sentence regarding repayment. Part of the problem is this and a fee increase, as the builders might think that is where the fees are going. Mr. Lelack explained that as they had capacity, the planners would work on long- range planning. Also, the beginning fund balance is not as healthy as it should be. Almost half the amount is being carried forward from the previous year. Minutes of Budget Meeting Friday, May 30, 2014 Page 9 of 25 Chair Baney feels it is the responsibility of the general fund to pay for long-range planning, as a service to the community vision. She would like them to back -cast to see what that might have been. There were significant adjustments to balance out services, and it might be close to even overall. The comp plan update was not done for 30 years, to it needs to be done and funded. Mr. Maier said they need to know what minimum level to maintain in the future. Chair Baney stated that reserves need to be prudent, and no one should question why those should be maintained. Andy High said that it was not difficult ten years ago, and Mr. Anderson felt six months was adequate. Half the workforce left since then. Some agencies felt they needed two years of reserves. He thinks six months is fair. You have to guarantee those who have already paid for permits that they will get services. Planning is mandated by the State, so has to be done regardless. Mr. Lelack noted that many counties are not sure what is going on with their EFU land because of the delay in comp plans. Commissioner Unger feels they should share the cost of the comp plan with the builders. It is their investment as well so they can stay here and grow. They might need more than six months’ reserves to get through some of the future tough times. ___________________________ Mr. Anderson asked if the Board wanted to transfer a portion of funds derived from fees from Solid Waste to Road. Timm Schimke had second thoughts on his presentation and should have stressed more on the long -term reserves for capping and monitoring Knott landfill cells. He understands the Board might want to see options for extended hours or days. He asked if they should have the larger discussion now regarding fees and a transfer to Road. If so, they also need to involve Chris Doty. Mr. Maier said they need to agree on the hours. Maybe they could charge more on Sundays, which is a popular day for this. He asked about the rationale for transferring funds to Road. Commissioner Unger stated that the big trucks use the roads, the haulers. Chair Baney said they should not have to increase fees to be open on Sundays. It is the peoples’ landfill and she did not hear a level of concern for the self-haulers. Mr. Maier noted that the vast majority of waste comes from the haulers, but the public makes up most of the visitors. Chair Baney said that the fund transfer was a Band-Aid for a bigger problem. Perhaps they could use a contract worker for limited hours on Sundays. She does not think they need four peop le there. Minutes of Budget Meeting Friday, May 30, 2014 Page 10 of 25 Mr. Anderson stated that on the revenue side, it is not just fees but volume. It is on the increase and they expect it to be steady. They need more than a couple of people to operate the site. He understands the Board wants to see more hours. He will come back with some ideas to expand service. Mr. Higuchi suggested they get a count on Sundays to make sure it is high enough demand. Commissioner DeBone said they have these numbers anyway. Mr. Anderson added that they might be able to differentiate between garbage and recycling. Chair Baney said that the transfer had to do with the SDC charge, but they are not seeing the impact of that yet. It was to be short -term. Some of these have changed, and an enterprise department should not have to subsidize roads. Mr. Maier stated that PILT funds used to go right into the general fund and not to Road. Road has been more than offset. Commissioner Unger noted that they are getting PILOT and secure rural schools funding, but it is short-term. Mr. Anderson said that gas tax is trending down. Mr. Maier stated that Road sounds to be in good shape for now. Mr. Barrett added that he doesn’t think all will get done that needs to be anyway. Commissioner DeBone and Mr. Barrett supported keeping the transfer to Road. Mr. Lowry noted that it is imbedded in the per ton rate. There are a lot of future costs to the landfill that are not built in to the rates. Rates need to be considered in the long-term, with a portion dedicated to reserves. They need to consider equipment, closure, monitoring, and what happens after Knott. The Road transfer should be a part of this as a long-term strategy . The rate is low compared to most areas. Mr. Maier said he would prefer to do a gradual increase. Chair Baney stated they have been waiting for the haulers to put in an increase to customers. The waste to energy project should eventually result in revenue as well. Mr. Higuchi said that Mr. Schimke should develop a plan as to what is needed. Smaller increments are easier to take. The group decided to leave this as it for this year, but discuss it more later. ___________________________ Minutes of Budget Meeting Friday, May 30, 2014 Page 11 of 25 Bethlehem Inn. Mr. Anderson said that negotiations have been occurring on the Bethlehem Inn property. Based on the appraisal, a loss can be anticipated. The County has been carrying it as a deferred expense of $2.7 million, affecting the general fund balance. He suggested it is time to bite the bullet on how it is carried on the books. Since then, there has been more active negotiations. The board of the Inn needs long-term certainty to invest in capital improvements and fundraising; they need some kind of long-term rights to the property to do this. He suggested the County divest of this property. He will discuss this further with the Board on Monday. The citizen members agreed this is the right choice. Chair Baney also agreed. She added that the City of Bend had given a loan for $300,000, which she feels should become a grant. The affordable housing fee was used, and some of it went through COBA. Mr. Anderson noted that projects like this are in the cities. Chair Baney said they stand to gain since housing is needed. She is proposing a housing summit with builders and others. They are in crisis mode right now regarding affor dable housing. Mr. Barrett stated he does not think anything else can be done in regard to the Inn. A plan and grants were in place, but a series of events that the County could not control changed things. Mr. Maier added that there is a major regional need for this. It is history and they are more solvent now. Commissioner DeBone agreed. Mr. Maier said that Deschutes County is a leader in a lot of things. The Clerk is concerned about voter apathy and how to push harder on this. Chair Baney asked if funding should go towards communications instead. Mr. Maier said the Clerk has $50,000 now to review and get professional marketing done. Doing this at the State level would be best, but it has to start somewhere. The goal should be a 75% turnaround. Ms. Maerki stated that the Clerk would raise recording fees for this. Mr. Kropp said that they have $40,000 in communications for various campaigns. Chair Baney said she would approve $25,000. Mr. Anderson asked if they should invite the Clerk in to talk about this. Mr. Maier said no one is prepared for it. He suggested setting aside the funds and let them figure out what can be done. He thinks social media is being missed. Minutes of Budget Meeting Friday, May 30, 2014 Page 12 of 25 Chair Baney observed that this would take working with a lot of groups. Commissioner DeBone said that people don’t sign up for open offices, either. Mr. Maier added that they need to do something, or they are just as bad as the 70% who did not bother to vote. Mr. Lowry said that they can ask the Clerk what can be pursued and to bring back a budget adjustment at that time. Mr. Maier stated that perhaps national voter projects are available. The trend is going down here. Mr. Barrett said that the last time this was effective was the presidential election. Social media got to those whose vote was wanted. He would like to know how they did this. There is a limit on what can be done, but elections is a primary purpose of the Clerk’s Office. They should plan for this and let the Clerk know it is of a lot of interest to the Board. Commissioner DeBone asked what fee is charged to the electricity cooperatives. Mr. Maier stated that the formula was developed by the Department of Revenue to use instead of property tax. Most of it here is from Midstate and Central Electric Cooperative. Mr. Maier asked why dog license fees have increased so much, from $12 to $16. A minority of dog owners carry the burden, since most don’t buy them. There seems to be little effort to go after those who don’t bother to license their dogs. One way to correct this inequity is to institute a pet food tax of 5%. This would then be paid for by all pet owners. They could then get a license at no cost, and funds could support animal control, humane societies and small groups that deal with animals. Much of this now comes out of the general fund. The only ones that would not be supportive is the retailers; they will not want others to get the idea this is a way to generate revenue. Doing this could also result in free spay/neuter of pets and would eventually bring down the numbers of stray and abandoned animals. There was a bill in the legislature for this about twenty years ago, but the big manufacturers fought it. It could mean funds go from $400,000 to up to $1.8 million. Cat owners might object, but it c ould be shown to benefit cats overall. Mr. Lowry stated that the cities spend about $150,000, and the humane society gets around $90,000. Minutes of Budget Meeting Friday, May 30, 2014 Page 13 of 25 Chair Baney said that Bend Spay/Neuter representatives have told her that some communities are raising tax dollars for animal welfare in this way . Mr. Maier explained that there is a big problem out there, especially regarding cats. He would like to bring in a group to analyze it. The community should share the problem. They can’t do this simply by raising the cost o f dog licenses. There is little enforcement and the humane societies are supposed to actively sell dog licenses, but they don’t. No one wants to recognize the big problem of animal abuse, abandonment and other animal issues. Chair Baney said that the County does not want to drive this, but an organization could come in with a plan on how it benefits the community overall. An operating levy would be hard to sell. Commissioner DeBone stated that he is not motivated to start something like this up; it should be up to the people. Chair Baney said she would reach out to others and let them develop a plan. Mr. Maier said that historically the County has been open to putting things on the ballot. This problem is all taxpayer funded in some way. Chair Baney stated that it is the right of the people to vote on whatever they want. Commissioner DeBone supports this approach. ___________________________ Health Services. Mr. Anderson said that Health Services has asked for $159,000 as an additional transfer. These programs are already in the budget, so they would have to use reserves if they don’t get funding. Mr. Lowry added that it lowers the contingency fund. Mr. Anderson recommended against a transfer. They are trying to match up the historic general fund allocation to services they want covered. There is better information available now to isolate this. He would like to see them cut it back closer, since general fund assistance moves around based on where they think it should go. It is not a ‘one size fits all’. There is more need for the Oregon Health Plan now with the affordable care plan. He wants them to propose service levels and pay for it, and they need to make a point regarding additional services that would come out of general fund. He would like to hold the general fund support at the same level. Mr. Maier and Commissioners Baney and Unger agreed. Chair Baney said that they budget based on general fund transfer and anticipate increases. The culture of budgeting like this needs to change. She is also concerned about health care transformation, and what it means to the County. Minutes of Budget Meeting Friday, May 30, 2014 Page 14 of 25 They need to know what the differences in health care coverage might end up being. Funding will change, as it could go to a CCO. There would be less money going to counties. The County has to show value added. There is a 21-month contract with the CCO, and this needs to be carefully tracked. This is the right time to challenge how budgeting is done. Mr. Anderson stated that the ELC is different. Staff is general fund supported to enable handling grants. Chair Baney said that money will no longer go to the counties. All there is now is a lot of planning. There is a role for the counties to partner, but the money will go through the hub. A commitment was made for two FTE to support this work until things are shuffled out. Mr. Anderson noted that the process is taking longer than anticipated. Chair Baney said that everyone is a partner in this, with Crook County at $18,000 and Jefferson County at $15,000. The ESD is providing in-kind work. They will let the County pay for this as long as it will. Mr. Lowry noted that he researched the early learning hub. There will be a set number of hubs, and Deschutes County is a natural for this. It seems that until the designation is done, there is prep work and a focus on new priorities. There will be no revenue from the State once designated. There will be a certain amount per child. There is a lot of pressure on the State to put some money behind this, as no one can administer this free, for very long. It seems that at some point, the up-front work will be done and the big question is then sustainability. Chair Baney said there is $500,000 in two years to plan out, then another $250,000. There will be $70,000 for administration and $1.29 per child per month. This goes to the early childhood providers. It is meant to provide for community needs. Mr. Maier stated that the whole thing is confusing. It sounds like a State shell game, trying to shuffle work and expense off to the counties. He would like to see the schools handle it. Chair Baney replied that the community has to have a role. It involves the same directors as the previous Commission on Children & Families. Mr. Lowry clarified that it is not just academics, but other domains such as social services, parenting, nutrition, health and readiness for school. Minutes of Budget Meeting Friday, May 30, 2014 Page 15 of 25 Chair Baney said she believes in this work, but it is difficult to determine what the County’s responsibility will be for this. Commissioner DeBone said it involves ESD, Head Start and the State; no one is doing anything wrong, but he wanted to know who is responsible overall. Mr. Higuchi asked if they can fund, but with an exit strategy, or reduce the amount over several years. This might force others to step up. Chair Baney noted that 80% of the youth are in Deschutes County. It benefits both the educational and health systems. They are starting to see a commitment in future investments rather than short-term. Mr. Barrett said that he has learned more about school-based health centers and the delivery of social-based health services. They need to be ready to deliver these services. For instance, it helps to know what is going on in the home; it becomes more efficient this way. He wanted to know the limits of what the County is supposed to do. He does not have the capacity to think how this might turn out; it sounds reasonable, but the Board needs to determine the limits. Mr. Higuchi asked if the State is sending the funds. The legislature could change things, and this is also a big unknown. Commissioner Unger stated they could do it this year but there will be a better plan next year. Things are changing and there is no solid plan yet. Chair Baney said they have to pay to apply. There are no funds coming from the State for planning purposes. The schools have a capacity issue. The question is whether the County will have to contribute two FTE each year. Also unknown is the return on investment; they don’t know if the administrative dollars will come to the County. Mr. Barrett said with all the unknowns, they need to hold for this year as proposed. Mr. Maier and Commissioner Unger agreed. They are looking at kids before school age and this is not the County’s responsibility. Mr. Higuchi stated that the Board needs to send a message. The County does not have the money to do it all. Chair Baney said she feels that the Sisters clinic is the right thing to do; they would be doing this anyway; more than the others. They should be able to bill for services, but can’t cover overhead. She asked if it is the government’s role to provide care for everyone. This will be $363,000 or more each year. Regarding the expansion of health care reform, Mosaic is federally qualified and can do this. Mr. Maier said that the cost is $1.2 million. Healthy Start is a pass through. There is a federal grant of $139,000, so this is not cost-effective. Minutes of Budget Meeting Friday, May 30, 2014 Page 16 of 25 Mr. Lowry said that he did not think all the resources of the ELC come through the County. A lot of welfare and federal dollars are being refocused. Mr. Barrett stated that health services people want to deliver services, and need to be shown how to do it differently. However, this can’t happen today. Mr. Anderson said that part of the $363,000 is not new services. Some are existing services that were delivered in County buildings in the past, but has moved into the schools. This should be an off-set. Chair Baney stated that there should have better clarity next year. Mr. Maier added that it is too unclear at this time, and there needs to b e some major closure to some of this so they can move forward. The group decided there would be no changes, but Mr. Anderson is to deliver the message that there will be change in the future once things are clarified. Juvenile. Mr. Anderson suggested the same for Juvenile Justice. They also need more clarification on where the money will be spent. There was a brief discussion on how grant funded programs get un-funded so the Board is asked to fill in the deficit. Direction was given to fund as budgeted, but to make it clear there will be future changes. Fair & Expo. Regarding handling food and beverage services in-house, Commissioner Unger wanted more information. They will have to add an amount for staff later if this is the right way to go. Assessor. There were no issues with the Assessor’s budget. Clerk. There will be communications work done regarding elections. Direction was to leave recording revenue as it is, since it is trending up. Minutes of Budget Meeting Friday, May 30, 2014 Page 17 of 25 Solid Waste. Staff is to put together a range of options regarding expanding services. There will be no change to the transfer to the Road Department. Road Department. There were no issues with the Road Department budget. Community Development. Staff is to take out the sentence regarding payback to the general fund, and review long-term planning cost history. Community Justice. They will analyze the Juvenile fund for next year. Justice Court. This fund is improving, but it not yet out of the woods. They need to work on a better relationship with the Sheriff; for fiscal healthy, they need to involve Sheriff citations. Natural Resources Protection. This budget is appropriate as it is. There was an addition to pay for Joe Stutler’s ongoing work. District Attorney. This budget is appropriate as it is. They may request additional staffing next year. They will work with Circuit Court on a new Judge, and with AOC regarding facilities. 9-1-1 County Service District. Mr. Maier stated that many agencies look at the 9-1-1 reserves as a pot of gold, when they should be seeking other ways to fund things. The same thing happened with the records management system. There is a role for 9-1-1 to play, but they should not have to pay for other agencies’ costs. This is a challenge for the smaller agencies. Minutes of Budget Meeting Friday, May 30, 2014 Page 18 of 25 Chair Baney asked if 9-1-1 even needs a director. Mr. Kropp said he has been helping with administration, as have others, but a lot of management level work is not being done, particularly on the next levy or forming a district. Supervisors are not getting needed development training either. Sheriff’s Office. It was felt the budget was acceptable. Commissioner Unger would like more analysis done, to learn more about oversight. Mr. Maier said they looked at other Sheriff’s Offices, and the ratio of deputies to services, the jail, etc. Some of this is merely asking the Sheriff about certain operations. There is no hidden agenda, and they won’t mind meeting with a Commissioner. A raise in the levy is needed, as their contingency level is less than four months; and they need to purchase new generation radios from Multnomah County. BOCC/Administration. Staffing will remain the same. There will be a transfer from the general fund. Law Library. Support was for the direction previously discussed. Personnel. Chair Baney said that a salary survey seems to be expensive. Mr. Kropp replied that it was $74,000 ten years ago. They would do an RFP for this. Mr. Maier stated that the last one was long overdue. A committee was to keep this up to date. This one is probably overdue as well. There needs to be a commitment to do this regularly. Mr. Kropp said that they talked about new classifications, but did not keep the job descriptions up to date, especially for non-represented. They have not had anyone in Personnel to handle classification and compensation work. Even then, you may need to hire an outside firm at some point to do a complete review. Mr. Anderson asked if they would have the departments pay on a per-person basis. Mr. Kropp said the consultant would help to determine this. Minutes of Budget Meeting Friday, May 30, 2014 Page 19 of 25 Finance. Mr. Lowry said it would take two years to integrate the new software system. The group found the budget acceptable. Information Technology. This budget was found to be acceptable. Legal. This budget was found to be acceptable. Property & Facilities. Mr. Maier was surprised to hear that Parole & Probation has space issues. He thought the Parole Officers would be out in the branch offices more. Mr. Anderson replied that they are a long way from determining that an expansion is needed. There are some opportunities out there such as the Unger Building in Redmond, in La Pine, and the Jameson Street building is under-utilized. Chair Baney said the plan was to be out in the community more, but access might be an issue. COVA. The budget was found to be appropriate for now. Sunriver has a portion subsidizing a visitors’ center. COVA will be back in December with a mid -year report. EDCO. They will restore $7,500 out of general fund. They will be requested to handle the overall programs and not have smaller groups coming to the Board. It was felt that 6% is reasonable. Other Funding Issues. Health Benefits will have a 6% increase. Medcor is providing a wellness coordinator. Minutes of Budget Meeting Friday, May 30, 2014 Page 20 of 25 There was a discussion about advance payment to the PERS reserve. Mr. Maier said 16% sounds good. He is concerned about doing the entire amount due to risk; they should do part and keep a reserve until they know they are insulated. They should keep $2 million out of the $10 million fund. The question for the Economic Development Fund – Business Loan Program was whether to leave it alone and recapitalize as needed. Mr. Anderson said there are few options; they would have to use general fund. Chair Baney would like to phase this out. EDCO can come back if they think it is needed. Commissioner Unger said this has been critical in negotiations and he does not want to tie their hands. This is part of the tools they can use, and should have some latitude. Chair Baney suggested recapitalizing with $40,000 this year. Mr. Lowry said the general fund can do this, but he needs to know if it will be long-term. Chair Baney stated that some business owners have asked why they are not getting this kind of benefit. It is easier to defend if it is out of video lottery funds, with a direct link to economic development. Mr. Barrett said it may not always matter, but it seems to matter at this time. Mr. Anderson was advised to proceed with the Bethlehem Inn as discussed. The group talked about most of the general fund items on page 45 of t he budget. Mr. Lowry said the big ones are about the same, and the jail project is winding down. ___________________________ Mr. Maier asked if the County is breaking even with the Deschutes Services Building. Mr. Anderson said the State needs to renew, but per the Assessor, they can’t pay over market. This affects how much they can pay. This covers the debt and they continue to pay more over time. County Tax Rate. Commissioner DeBone said the proposal is for 5% growth in the budget, but he thinks this could be calibrated back to 3% by adjusting the rate. He proposed a $1 million reduction. They are seeing some relief through TRT and CDD. This might be the magic time to do this. He supports reserves, but does not see a scenario that will put them in a bad spot. Based on news off the media, there are good things happening. As an elected official of the people, he has seen they have had to do with much less. Minutes of Budget Meeting Friday, May 30, 2014 Page 21 of 25 Mr. Anderson said the biggest issue is the Bethlehem Inn. This is not consummated, but without some kind of purchase by them, funds would be below statutory requirements. If something unforeseen happens, it would be difficult. A sale would help if they can come up with cash. Chair Baney said they don’t have the money to pay. Mr. Anderson noted that the timing of the purchase is critical. Commissioner DeBone stated that they have another asset in Redmond to sell. This is not a suggestion for long-term, but he thinks a good opportunity in this election cycle. This last happened maybe twelve years ago. Chair Baney said she is worried about the ramifications. She does not want to sit on reserves that citizens could get, but there are many unknowns. This could result in more taxes the next year. Commissioner DeBone stated that politics is not the driver, but it is persona l to him. He feels this is a good opportunity. People won’t remember if you reduce it, but this is the year. Mr. Kropp asked if they want to cancel paying back Solid Waste. He is hearing the courts need another Judge and two new courtrooms. They wat ched the downturn, and thank goodness they had reserves, but those have been drawn down. It is more prudent to pay off debts and build up the reserves. Commissioner DeBone said with the project fund, he wants to do something that makes sense. Mr. Maier stated that the landscape when it was reduced in the past was grandstanding by then Commissioners Swearingen and DeWolf. It was not the right thing to do at that time. The County was not in a good position then, but the economy was doing well. It took a lot of time to build up the reserves after that. They regretted this action later because some important projects could not be funded. This group is lucky to be able to even have this discussion. He wants to see debts paid off first. The Courthouse project will be expensive. He would rather see reserves where they need to be. If not for those, CDD and other departments would be gone. There would not be enough general fund to float them. They need to resolve the Bethlehem Inn issue and pay back Solid Waste. Minutes of Budget Meeting Friday, May 30, 2014 Page 22 of 25 Commissioner Unger wants to support the public, but a reduction could mean maybe $25 at most, and who is going to appreciate this very much. Also, the total budget is not the same as the general fund. Mr. Higuchi agreed that some clean-up needs to happen. This is the time to do that. There are too many unknowns. He agrees with Mr. Maier. Mr. Barrett also agreed, and said that the amount to a homeowner will be small and won’t matter much to them. Commissioner DeBone said that the concept is guaranteed growth in government, and small business does not have this opportunity. Mr. Maier stated they have to also weigh this against the needs of the partners. Veterans’ Services is behind on appointments. Even a little bit helps them. Does this mean more to the overall community? Most would want veterans to get help. The workload will increase as more veterans return. This is just one example. Other groups need help as well. He would like to see more towards solving animal welfare issues. Th ere are many other examples. Mr. Barrett added that Road has a balanced budget, but that does not solve all of their problems. Chair Baney noted that they need to pay debts and then get money working in a productive way. Commissioner DeBone said it is political and philosophical for him. Basic living costs a lot. He feels the growth is set at 5 -6% and they could dial it back to 3%. Mr. Lowry said they did this in the past, but this estimate is realistic. They are not expecting anything above 5%. The general fund as budgeted ends with $8.1 million as the ending balance contingency. Four months of property tax revenue is $7.7 million. That is the floor, which is not much higher than the required floor. The cushion then is just $385,000, after the Bethlehe m Inn. Commissioner DeBone stated that things can go backwards. The County is well run and they can live within their means even if things are bad next year. Chair Baney said they voted no for some capital purchases in the Road Department. They want to see more sharing. They won’t see this type of opportunity often. Minutes of Budget Meeting Friday, May 30, 2014 Page 23 of 25 Mr. Higuchi said the Bethlehem Inn issue needs to be cleaned up. The Board and Administration are doing the right thing. They need to move on. He would agree in the good times but they are not there yet. It is still fragile. He can’t agree with what the City of Bend did, spent all the money in the good times and now is broke. The County needs to leave it as-is and get stabilized. Commissioner DeBone insisted he wants to calibrate the rate back to 3%. Mr. Barrett said he respects the effort, but the mission statement reflects the budget, and he wants to commit to it as it is at this time with the changes as discussed. Transient Room Tax. Mr. Lowry referred to a chart on the distribution of room tax dollars. It used to be complicated, but there is a new agreement with COVA. It is 20% after expenses, and the Sheriff gets the balance. There is the new 1% in a different fund, with 70% to the Fair & Expo and 30% to the general fund. A few pieces are still transitory, and the Fair & Expo gets $25,000 out of the initial amount. Dan Despotopulos would like to pursue a bond when the other expires, to cover operations into the future. Capital Projects Fund. The group discussed the annex remodel, the north County services project and the Sisters health clinic. The Sisters health clinic is over budget because of delays in starting, requiring some of the work to be rebid. Regarding the Unger Building, Mr. Maier feels the architect design costs are very high. It was felt this is for other purposes also. Mr. Kropp said this is being held for other north County projects should the Board want to take action on various situations. This could be at $150,000. Mr. Anderson said they can work on getting more details. It is a maximum allocation. Mr. Lowry stated that some is for the purchase of the Antler Ave. building. Video Lottery Adjustment. The group approved an adjustment to the interfund contract. COIC dues are about $13,000. This will come from the general fund. Otherwise, the Video Lottery Fund budget was found to be acceptable. Minutes of Budget Meeting Friday, May 30, 2014 Page 24 of 25 Other Items. The group then voted on the proposed budgets. MAIER: Move approval of the Deschutes County budget, as proposed with changes. HIGUCHI: Second. VOTE: Unanimous in favor, with the exception of a ‘no’ vote from Commissioner DeBone. MAIER: Move to set the tax levy for bonded indebtedness. HIGUCHI: Second. VOTE: Unanimous in favor. The Deschutes County budget meeting was closed at this point. ___________________________ CONVENED AS THE GOVERNING BODY OF THE COUNTYWIDE LAW ENFORCEMENT DISTRICT (#1) HIGUCHI: Move approval of the Countywide Law Enforcement District #1 budget. BANEY: Second. VOTE: Unanimous in favor. HIGUCHI: Move approval of the capital reserve budget. MAIER: Second. VOTE: Unanimous in favor. The meeting as the Governing Body of the Countywide Law Enforcement District #1 was closed. ___________________________ CONVENED AS THE GOVERNING BODY OF THE RURAL LAW ENFORCEMENT DISTRICT (#3) MAIER: Move approval of the Rural Law Enforcement District #2 budget. DEBONE: Second. VOTE: Unanimous in favor. MAIER: Move approval of the capital reserve budget. HIGUCHI: Second. VOTE: Unanimous in favor. The meeting as the Governing Body of the Rural Law Enforcement District #2 was closed. MAIER: Move that the budget meetings be adjourned. HIGUCHI: Second. VOTE: Unanimous in favor. Being no further discussion, the session ended at 3:45 p.m. DATED this f.f}J Day of ~ 2014 for the Deschutes County Board of Commissioner . Tam ki1~ Anthony DeB one, V ice Chair ATTEST: Alan Unger, Commissioner ~~ ecordmg Secretary Minutes of Budget Meeting Friday, May 30,2014 Page 25 of25 Budget Presentations ­ Attendees (Please Print) Name E() 0. E!2... (A:£ 1//Yl1 rv,k'6f~I'A/ GI"'t..~ L:(:rrn Jol~r t ~~gdA p~ S:><>t ......... L-.-.4~-V- Group{s) DatefTimes 5-30-L5 Dept./Agency :buc..a EOto tCbc..c) EDco &; DC. 0 Phone # e-mail address 9-((-.3 93-3d S''' Y"OCj a..I'@ ad '-0 ,'a" t:O, ~ S"L./I-.!IY'S-Y22f-d ty Rt?s v/J fi) k.hP/6~c:ld./4;r,. ,""'t?,r: I , ,,:)1,11· t.j Ln" I ')."l Cf i ~i'l..~~'iYll dOI't..(jOll") ~"~-V Y/V(.e.a <­ . s41-4IQ'3'145 ql1f)e/a·fr,ce~faCtAc.crr'cc : c;l(l-3'7C'-l.f7">O ')A;""'i. L",-h-LL--t-t:9"C.'/"PCOPl "---5 ,"" BUDGET COMMITTEE AGENDA Friday, May 30th , 2014 Deschutes County 9:00AM • Reconvene the Deschutes County budget meeting 9:00 ­• Economic Development of Central Oregon 9:30AM (EDCO) Discussion items 1) Bethlehem Inn/General Fund 2) Review list of Significant Issues 3) County tax rate 4) TRT Explanation of revenue allocations and "extra" revenue collected 5) Adjustments to Capital Project Funds and Fair and Expo Fund 6) Video Lottery-Remove interfund contract $12,794 7) Other items BUDGET APPROVALS Deschutes County (Budget Committee-Commissioners, Clayton Higuchi, Bruce Barrett, Mike Maier) • 1) Motion to approve Deschutes County budget of $305,433,009 adjusted for approved changes and set the tax rate at $1.2783 per $1,000 of assessed valuation • 2) Motion to set tax amount oflevy for bonded indebtedness at $2,676,170 • Motions to be seconded • Budget Committee votes • Close Deschutes County budget meeting ...--~--- Countywide Law Enforcement District (District 1) (Budget Committee-Commissioners, Clayton Higuchi, Bruce Barrett, Mike Maier) • Reconvene the budget meeting of the Countywide Law Enforcement CSD • 1) Motion to approve Countywide Law Enforcement County Service Distict budget of $25,608,019 and set the tax rate at $0.9500 per $1,000 of assessed valuation (Fund 701) • 2) Motion to approve Countywide Law Enforcement County Service Distict Capital Reserve budget of $627,100 (Fund 703) • Motions to be seconded • Budget Committee votes • Close Countywide Law Enforcement District budget meeting Page 1 BUDGET COMMITTEE AGENDA Friday, May 30th , 2014 Rural Law Enforcement District (District 2) (Budget Committee-Commissioners, Clayton Higuchi, Bruce Barrett, Mike Maier) • Reconvene the budget meeting of the Rural Law Enforcement CSD • 1) Motion to approve Rural Law Enforcement County Service Distict budget of $15,168,526 and set the tax rate at $1.4000 per $1,000 of assessed valuation (Fund 702) • 2) Motion to approve Rural Law Enforcement County Service Distict Capital Reserve budget of $1,481,000 (Fund 704) • Motions to be seconded • Budget Committee votes • Close Rural Law Enforcement District budget meeting Page 2 BUDGET COMMITTEE AGENDA Thursday, May 29th , 2014 Program Budget Tab/Page Sheriff's Office • Public comment (Continued) • At conclusion of presentation, continue Countywide Law Enforcement District meeting to Friday, May 30th, at 9:30 a.m. • At conclusion of presentation, continue Rural Law Enforcement District meeting to Friday, May 30th, at 9:30 a.m. 1:15 -1:25 PM 1:25 -1:35 PM 1:35 -1:50 PM 1:50 -2:05 PM 2:05 -2:20 PM 2:20 -2:35 PM 2:35 -2:50 PM 2:50 -3:05 PM 3:05 -3:20 PM 3:20 -3:30 PM 3:30 -4:00 PM 4:00 -5:00 PM Break Support Services • Introductions • Budget discussion • Board of County Commissioners (Fund 628)............... . • Administrative Services (Fund 625)............................ -Law Library (Fund 215)........................................... -Veterans' Services (Fund 001-23)................................. • Risk Management (Fund 670)................................... . • Personnel (Fund 650)............................................... • Finance (Fund 630).................................................. • Information Technology (Fund 660)......... .................. • Legal (Fund 640)...................................................... • Property and Facilities (Fund 620)............................. Break Service Partner • Central Oregon Visitors Association (CaVA) Review and Discussion • Recall Departments for further clarification • Other issues and considerations Continue the Deschutes County budget meeting to Friday, May 30th , at 9:00 AM 6/211 6/216 6/224 6/221 6/225 6/226 6/233 6/240 6/245 6/249 Page 2 FE31 ECONOMIC DEVELOPMENTI:E:j FOR CENTRAL OREGON 2013,-15 STRATEGI ,C I M:MAR EDCO's Vision Prosperous communities and quality jobs for Central Oregonians ED CO's Mission Launch, grow and recruit traded-sector businesses to purposefully create a thriving and diverse economy. Organization's Make or Break for 2013-15 eoco must secure sustainable, consistent and effective operational funding required to achieve its mission and meet the expectations of ~he region's communities and residents. The strategy to achieve our "make or break" involves three components: 1. Comprehensive communications plan development and execution 2. Membership development plan development and execution, and 3. Development of new sources of revenue. GOALS for 2013-15 1 Support local traded-sector employers with a robust Business Retention & Expansion (BRE) Program that catalyzes $100 million in new capital investment; 800 new, well-paying jobs; and at least 36 "done deals" by the end of 2015 . 2 Recruit 36 new companies to the region that will create 1,000 new, well-paying jobs and invest $200 million in new capital investment by the end of 2015 . Target marketing and recruitment efforts geographically and by industry for greatest effectiveness. 3 Develop an ecosystem in Central Oregon that supports and attracts entrepreneurs to establish the next generation of employers and jobs. Catalyze creation of 200 new jobs via 24 early stage companies that successfully raise $50 million in growth capital by 2015 . 4 Quarterback industry development initiatives and strategic projects that will pave the way for private sector employment growth. S Advocate and champion improvements to the region's business climate and com petitiveness. Contained in the complete 56-page Strategic Plan are 21 objectives under the five goals which flow into 60 action items and intiatives required to successfully achieve both the objective and goal. EDCO 2013-15 STRATEGIC PLAN EXECUTIVE SUMMARY -MARCH 2013 Foc us on traded-sector is key Focusing on the traded-sector (companies that export a good or service to customers outside the region) is EDCO's greatest leverage of time and resources. There is a reason that most economic development organizations across the country concentrate on growing traded-sector employers : they form the foundation for all other jobs. Historically, traded-sector companies were manufacturers, but the lines have been blurred with changes in technology. Today, many services can also be traded sector, everything from engineering to accounting to administrative, call and data centers. EOCO faci litates job creation, but businesses create job s Job creation is one, if not the most important, metric for most economic development organizations across the country. This holds true for EDeO as well. We track new employment added by the companies (recruitment, retention/expansion or early stage) that we work with closely to help­ whether with incentives, logistics, relocation, recruitment, site location, local entitlements, finding talent, capital financing, or a host of other issues. Our assistance must add real value or we don 't include it in our metrics. But while we monitor closely new job creation, capital investment and even payroll of our client companies, we acknowledge that businesses, not EDCO, actually generate new employment and a tax base. EDCO's Core Values In order to "move the needle" for this big vision with a small staff and budget, it is imperative that EDCO play the role of catalyzing projects, initiatives, programs, and other infrastructure that is critical for success. BUSINESS AOCOUNTABI.£ BIAS FOR ACTION 2 EDCO 2013-15 STRATEGIC PLAN EXECUTIVE SUMMARY -MARCH 2013 Results of Organizational SWOT Exercise with EDCO Board of Directors & Other Leaders The tables and narrative below is a distillation of discussions and prioritization of strategies identified by those attending a strategic plan retreat held in November 2012. Other Plan Elements The 2013-15 Strategic Plan provides a detailed overview of economic development strategic planning at national, state, regional and local levels in the document's second appendix and how EDCO's vision, mission, goals and objectives dovetail with other efforts and organizations in the region. Also included in this section is a summary of priorties and challenges at the local community level within the region. The last page of this strategic summary includes a matrix of these community priorities. The third appendix provides an overview of historical and current macroeconomic trends that impact the national, state and regional economy. Included in this section is information about current economic condictions, re-shoring trends, automation, and productivity trends. Twenty-six pages of information on specific industry trends and business intelligence on sub-sectors comprise the fourth appendix. While not intended to be comprehensive in scope, this section covers: agriculture, administrative centers, alternative/renewable energy, aviation/aerospace, building products, biosciences, brewing/distilling/wine making, high technology, professional services, outdoor equipment & apparel, recreational vehicles, and specialty/advanced manufacturing. 3 Local Economic Development Priorities Input for 2013-15 EDCO Strategic Plan ~ Resources: Industry: Assets Resources: HiIh Techno\otrt INiltural Resources (software, medical device, (AaricUlture, 'Wood teleCom infranruCtlR, tech talem pool, air service access, hill her education acceu & v,ood fiber nearby, ProducU, Mini .., industrilll Ian:! wood Products workton:e skilled in the ir>dUstry, land mass,_I"".. Products available resources, existi..secondary wood prod. industry, still~ workforce If1 #2 m o n o N o '-' w, f-' 1I1 V'I -! ;u » -! m Cl n -n » r- z m X m n c -! <: m Ul C ~ » ~ ;u -< I » ~ :::tl n :r: N o f-' W j Commissioners 1300 NW Wall St. Suite 200 • Bend, OR 97701-1960 (541] 3BB-6570· Fax (541] 3B5-3202 \NVIIW,co.deschutes,or,us board@co.deschutes.or.us May 28, 2104 Tammy Baney Anthony DeBone Alan Unger Dear Wood to Energy Grant Program review team, I am writing on behalf of Deschutes County to express strong support for the Mt. Bachelor Biomass Energy project. Mt. Bachelor is applying for Hazardous Fuels Wood To Energy Grant Program funds to complete design, engineering, and environmental analysis work for biomass heating systems for its West and Sunrise Villages along the base of the mountain. This project presents the opportunity to link forest restoration efforts on the Deschutes National Forest to nearby energy needs, providing a highly visible model of how local renewable wood fuel can replace costly imported fossil fuels in building space heat and hot water applications, New biomass boiler systems at West and Sunrise Villages could provide a meaningful new market for wood chip fuel delivered by local forest contractors from restoration projects just up or down the Cascade Lakes Highway from Mt. Bachelor. This project helps our community reduce its carbon footprint, increase its energy independence, improve the health of our forests, keep our energy dollars local, and create local green energy jobs in fuel production and system operation. Deschutes County would welcome the development of these biomass energy facilities at Mt. Bachelor. By creating markets for biomass produced as a by product of forest restoration and hazardous fuels reduction projects, these energy facilities can help make County residents safer and improve the resiliency of the forest that sustains our tourism and forest products industries. We would be happy to see more green jobs created in renewable fuel production and renewable energy system operation while reducing the need for workers that perform pile burning activities. This project could also serve as a model for additional small scale, highly efficient, economically viable biomass energy projects in Deschutes County and the Central Oregon region. At this time the other biomass boiler systems that are fueled by chips in the region are industrial process heat systems, not commercial or institutional building thermal energy applications. There are many such opportunities if we can develop working models. We encourage you to support Mt. Bachelor in this exciting project with a Wood To Energy grant for design, engineering, and environmental review. Thank you for your consideration. Sincerely, Tammy Baney, Chair Anthony DeBone, Vice Chair Alan Unger, Commissioner Enhancing the Lives of Citizens by Delivering Quality Services in a Cost-Effective Manner ECONOMIC DEVELOPMENT FOR CENTRAL OREGON FINANCIAL STATEMENTS For the Year Ended June 30,2013 (With Comparative Totals for June 30, 2012) ECONOMIC DEVELOPMENT FOR CENTRAL OREGON FINANCIAL STATEMENTS For the Year Ended June 30, 2013 (With Comparative Totals for June 30,2012) TABLE OF CONTENTS Page Independent Auditor's Report 1 - 2 Financial Statements: Statement of Financial Position 3 Statement of Activities and Change in Net Assets 4 Statement of Functional Expenses 5 Statement of Cash Flows 6 Notes to Financial Statements 7 -12 I }onesJRoth ."""..... (PAs & Busine~Advisors INDEPENDENT AUDITOR'S REPORT To the Board of Directors Economic Development for Central Oregon Bend. Oregon We have audited the accompanying financial statements of Economic Development for Central Oregon (a nonprofit organization), which comprise the statement of financial position as of June 30, 2013, and the related statements of activities and change in net assets, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design. implementation. and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting pOlicies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. The Right People Beside You. (PAs & Business Advisors Retirement Plan Services Financial Advisors BEN D 300 SW Columbia Street EU GEhE 432 West 11th Avenue HILLSBORO 5635 NE ELlIm Young Pkwy. Suite 201 Eugene, OR 97401 Suite 100 Bend, OR 97702 phone (541) 687-2320 Hillsboro, OR 97124 phone (541) 382-3590 fax (541) 485-0960 phone (503) 648-0521 fax (541) 382-3587 fax (503) 648-2692 > jrcpa.com Securities offered through 1st Global Capital Corp., Member fINRA. SIP(. Investment advisory services offered through 1st Global AdvIsors, Inc. o Printed on 100% PC recycled paper Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Economic Development for Central Oregon as of June 30, 2013, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited Economic Development for Central Oregon's 2012 financial statements, and our report dated December 26, 2012, expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2012, is consistent, in all material respects, with the audited financial statements from which it has been derived. Jones & Roth, P.C. Bend, Oregon December 16,2013 - 2 ­ FINANCIAL STATEMENTS I ECONOMIC DEVELOPMENT FOR CENTRAL OREGON STATEMENT OF FINANCIAL POSITION June 30, 2013 (With Comparative Totals for June 30.2012) Assets Current assets Cash and cash equivalents Accounts receivable U.S. SBA earmark grant receivable Prepaid expenses Total current assets Certificate of deposit Furniture and equipment Accumulated depreciation Furniture and equipment. net Total assets Liabilities and Net Assets Current liabilities Accounts payable Accrued payroll Accrued vacation Deferred revenue Total current liabilities Net assets Unrestricted: Unrestricted and undesignated net assets Board-designated net assets (HiDEC) Total unrestricted net assets Total liabilities and net assets 2013 $ 146.814 18.740 3.895 4,137 173.586 78.013 39,188 (26.022) 13.166 $ 264.765 $ 1,482 33.244 16,266 32.508 83,500 173,662 7.603 181.265 $ 264,765 $ $ $ $ 2012 79,712 2.736 6,721 13,983 103,152 75,637 37,453 (27,663) 9,790 188,579 29,986 17.963 500 48,449 132,846 7,284 140,130 188,579 The accompanying notes are an integral part of these statements. - 3 ­ ECONOMIC DEVELOPMENT FOR CENTRAL OREGON STATEMENT OF ACTIVITIES AND CHANGE IN NET ASSETS For the Year Ended June 30, 2013 (With Comparative Totals for June 30,2012) Support and revenue Direct private support: Membership dues HiDEC membership dues Programs and events Regional programs Other revenue Direct public support: Regional programs U.S. SBA earmark grant revenue Other: In-kind donations Interest income Sublease income UAV initiative Loss on disposition of assets Pass through items: Travel bank income Travel bank expense Total support and revenue Net assets released from restrictions Total support, revenue, and reclassifications Expenses Program services Supporting services: Management and general Membership development Total supporting services Total expenses Change in net assets Net assets, beginning of year Net assets, end of year Unrestricted Temporarily Restricted Total 2013 Total 2012 $ 190,888 11,980 128,483 7,285 $ 193,375 $ 190,888 11,980 128,483 193,375 7,285 $ 177,714 7,200 93,846 161,000 176 99,167 223,200 36,895 322,367 36,895 293,300 80,361 23,020 2,432 2,746 55,000 (2,055) 23,020 2,432 2,746 55,000 (2,055) 53,430 2,976 9,812 405,035 (405,035) 405,035 (405,035) 518,946 453,470 453,470 (453,470) 972,416 879,815 972,416 972,416 879,815 729,849 729,849 682,605 140,065 61,367 140,065 61,367 146,400 50,778 201,432 201,432 197,178 931,281 931,281 879,783 41,135 140,130' 41,135 140,130 32 140,098 $ 181,265 ~$=== $ 181,265 $ 140,130 The accompanying notes are an integral part of these statements. -4­ )1 >~ ECONOMIC DEVELOPMENT FOR CENTRAL OREGON STATEMENT OF FUNCTIONAL EXPENSES j I :1 For the Year Ended June 30, 2013 (With Comparative Totals for June 30,2012) i '! I i Program Management Membership Total Total II Services and General Development 2013 2012 Salaries and wages $ 384,983 $ 86,410 $ 35,286 $ 506,679 $ 509,756 Payroll taxes and benefits 74,848 16,375 6,071 97,294 93,391 Total employee i .~ I 11 related expenses 459,831 102,785 41,357 603,973 603,147 ~ Advertising and marketing 3,695 3,695 2,363 Bad debts 15,894 15,894 19,059 Contract services -operations 8,653 1,893 702 11,248 3,500 11 Contract services -UAV 45,000 45,000 Insurance 2,448 2,448 3,509 lI Market research 4,958 4,958 5,852 1 Miscellaneous 5,674 1,241 460 7,375 4,378 11 Occupancy 31,434 6,877 2,550 40,861 56,752 Office expense 11,276 2,467 915 14,658 8,859 Professional development 8,508 1,861 690 11,059 20,125 , Professional fees 15,495 15,495 15,199 I Publication and event costs 102,882 102,882 68,885 Telecommunications J'I II and database 18,452 4,037 1,497 23,986 38,033 HiDEC program 9,200 9,200 12,000 Travel 12,840 12,840 11 ~I, Total expenses before depreciation 725,457 139,104 61,011 925,572 873,411 J I Depreciation 4,392 961 356 5,709 6,372t II Total functional expenses $ 140,065 $ 931,281 $ 879,783 II i I jl The accompanying notes are an integral part of these statements. :1 j - 5 ­ I ECONOMIC DEVELOPMENT FOR CENTRAL OREGON STATEMENT OF CASH FLOWS For the Year Ended June 30, 2013 (With Comparative Totals for June 30, 2012) Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Interest on certificate of deposit Depreciation Loss on disposition of assets (Increase) decrease in: Accounts receivable U.S. SBA earmark grant receivable Prepaid expenses Increase (decrease) in: Accounts payable Accrued payroll Accrued vacation Deferred revenue l\Iet cash provided (used) by operating activities Cash flows from investing activities Purchase of property and equipment Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $ 2013 41,135 (2,376) 5,709 2,055 (16,004) 2,826 9,846 1,482 3,258 (1,697) 32,008 78,242 (11,140) 67,102 79,712 $ $ 2012 32 (2,881) 6,372 (621) 6,996 (6,231) (1,966) 5,018 (1,926) (5,OOO) (207) (207) 79,919 79,712 The accompanying notes are an integral part of these statements. -6­ I I ECONOMIC DEVELOPMENT FOR CENTRAL OREGON NOTES TO FINANCIAL STATEMENTS I 1. Summary of Significant Accounting Policies Business Activity Economic Development for Central Oregon (EDCO) engages in activities designed to promote growth and profitability of new and existing traded-sector employers -companies that export a majority of their goods or services outside the tri-county Central Oregon area. EDCO's vision is to build a strong and secure economic future for Central Oregon and its mission is to lead the economic development and diversification of the Central Oregon economy through marketing, targeted recruitment, business expansion, and the formation of effective public/private partnerships. Additionally, EDCO pursues strategic projects that will help improve the region's business climate and strives to be a leader in statistical research and a provider of information on the regional economy. High Desert Enterprise Consortium (HiDEC) is a subcommittee of EDCO dedicated to providing access to quality training, continuing education, and a creative forum for sharing ideas to assist Central Oregon enterprises in achieving world-class performance. Their funds are included in EDCO's operating activities as EDCO has control over the expenditure decisions. Total Hi DEC membership dues, sponsorships, and grants were $11,980 and $7,200 for the years ended June 30, 2013 and 2012, respectively. As of June 30, 2013 and 2012, Board-designated net assets of $7,603 and $7,284, respectively, were comprised of cash held in a separate bank account for HiDEC operations. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America. Net assets and revenue, expenses, gains, and losses are classified based on the existence or absence of donor­ imposed restrictions. Accordingly, net assets of EDCO and changes thereto are classified and reported as follows: Unrestricted net assets -net assets that are not subject to donor-imposed stipulations. Temporarily restricted net assets -net assets subject to donor-imposed stipulations that mayor will be met either by actions of EDCO or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities and changes in net assets as net assets released from restrictions. There were no temporarily restricted net assets as of June 30,2013 and 2012. Permanently restricted net assets -net assets subject to donor-imposed stipulations that the assets be maintained permanently by EDCO. There were no permanently restricted net assets as of June 30,2013 and 2012. Cash and Cash Equivalents EDCO considers demand checking accounts, money market funds, and highly liquid debt instruments with an original maturity of three months or less to be cash and cash equivalents. No portion of EDCO's cash and cash equivalents was uninsured by the Federal Deposit Insurance Corporation at June 30, 2013 and 2012. -7­ ECONOMIC DEVELOPMENT FOR CENTRAL OREGON NOTES TO FINANCIAL STATEIVIENTS 1. Summary of Significant Accounting Policies, continued Furniture and Equipment Furniture and equipment are stated at cost and are depreciated over estimated useful lives of 5 to 7 years utilizing the straight-line method. Deferred Revenue Deferred revenue of $32,508 and $500, as of June 30, 2013 and 2012, respectively, represents cash received, but not yet earned, from various activities of EDCO. Revenue and Support Membership dues are collected for the membership year and are based upon seven levels of membership category and business type. Member dues are recorded as unrestricted revenue when billed. EDCO recognizes contribution revenue for certain in-kind services received at the fair value of those services. Services recognized are those that would typically need to be purchased by EDCO if they had not been contributed, require specialized skill, and are provided by individuals with those skills. Services valued at $23,020 and $53,430, were donated to EDCO for the years ended June 30, 2013 and 2012, respectively. A portion of EDCO's functions and programs are conducted by unpaid volunteers. The value of this contributed time is not reflected in the accompanying financial statements since the services do not require specialized skills and because the amount is not susceptible to objective measurement or valuation. Advertising Advertising costs are expensed as incurred. Accrued Compensated Absences EDCO accrues paid time off at current pay rates. The employees accrue paid time off annually. Any unused accrued paid time off is paid to employees upon termination. Functional Allocation of Expenses The costs of providing various programs and other activities have been summarized on a functional basis in the accompanying statement of functional expenses. Accordingly, certain costs have been allocated among the program and supporting services. EDCO utilizes a simplified cost allocation method, whereby specifically identifiable costs are charged directly to the program or supporting services and indirect costs are allocated among program and supporting services through an allocation base. EDCO uses salaries and wages as the allocation base, which is determined by percent of time spent by individual employees within each functional category. -8­ I I ECONOMIC DEVELOPMENT FOR CENTRAL OREGON NOTES TO FINANCIAL STATEMENTS I 1. Summary of Significant Accounting Policies, continued Income Taxes EDCO is organized under Section 501 (c)(6) of the Internal Revenue Code (IRC) as a tax-exempt corporation and therefore is exempt from federal and state taxes on its fax-exempt activities. However, certain activities may be defined by the IRC as generating unrelated business taxable income which could subject EDCO to unrelated business income taxes. EDCO conducted no such activities in the years ended June 30, 2013 and 2012, and accordingly no provision for income taxes is recognized in the financial statements. EDCO's Form 990, Return of Organization Exempt from Income Tax, for the years ended June 30, 2013 and 2012, are subject to examination generally for three years after filing. Use of Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates. 2. Cash and Cash Equivalents At June 30, cash and cash equivalents consisted of the following: Non-interest checking account Interest-bearing money market account Merchant account Petty cash Undeposited funds Total cash and cash equivalents I 3. Certificate of Deposit 2013 2012 $ 43,907 $ 42,939 79,740 31,149 21,998 1,480 309 309 860 3,835 $ 146,814 :s Z9!712 As of June 30, 2013 and 2012, EDCO held a certificate of deposit in the amount of $78,013 and I $75,637, respectively, bearing interest at 3.11 percent with a maturity date of December 22, 2014; however, it is accessible to EDCO on demand, with a penalty. I 4. Fair Value Measurement Accounting principles generally accepted in the United States of America define fair value, establish I a framework for measuring fair value, and establish a fair value hierarchy that prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A I fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability; in the absence of a principle market, the most advantageous market. Valuation techniques that are consistent with the market, income, or cost approach are used to measure fair value. -9­I I I ECONOMIC DEVELOPMENT FOR CENTRAL OREGON NOTES TO FINANCIAL STATEMENTS I 4. Fair Value Measurement, continued I The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: I Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities EDCO has been able to access. I Level 2: Inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly. I Level 3: Unobservable inputs for the asset or liability that rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability (the unobservable inputs should be developed based on the best information available in I the circumstances and may include EDCO's own data). The following tables present EDCO's fair value hierarchy for those assets measured at fair value on a recurring basis as of June 30,2013 and 2012: I Assets at Fair Value as of June 30, 2013 Level 1 Level 2 Level 3 Total I Certificate of deposit $ 78.013 $ 78.013 Assets at Fair Value as of June 30. 2012 I Level 1 Level 2 Level 3 Total Certificate of deposit $ 75,637 ~$==== $ 75.637 I 5. Accounts and Grants Receivable I At June 30,2013 and 2012, accounts receivable were comprised of receivables due within one year I from various members for membership dues. Management considers all accounts receivable balances to be fully collectible; accordingly, an allowance for uncollectible accounts receivable has not been reflected as of June 30, 2013 and 2012. Accounts receivable balances are considered past due 30 days after invoicing and individual balances are written off to bad debt expense when considered to be uncollectible by management. I I The United States Small Business Administration Grant is an expense reimbursement grant. As of June 30, 2013 and 2012, $3,895 and $6,721, respectively, of funds had been requested, for grant related expenditures, which were not yet collected as of June 30, 2013 and 2012, respectively. 6. Employee Retirement Plan I I ED CO offers a Simplified Employee Pension Individual Retirement Account (SEP IRA) plan for the benefit of its employees. Under the plan, a percent of eligible gross compensation for each employee is contributed to the account of the employee. An employee must have one year of service with EDCO before they are eligible to participate in the plan. EDCO contributed $15,066 and $21,368 to the plan for the years ended June 30,2013 and 2012, respectively. I -10­ I ECONOMIC DEVELOPMENT FOR CENTRAL OREGON NOTES TO FINANCIAL STATEMENTS 7. Lease Obligation As of August 15, 2007, EDCO entered into a 5-year lease contract on its primary office building with two renewal options of five years each. The lease contract was terminated subsequent to June 30, 2012. As of November 1, 2012, EDCO entered into a new 5-year lease contract on its primary office building with one renewal option of five years. Future minimum lease payments under the new agreement are as follows: Year Ending June 30. Lease 2014 $ 26,370 2015 2016 2017 Thereafter 27,150 27,965 28,820 9.703 Total Rental expense respectively. for the years ended June 30, 2013 and 2012 was $40,861 and $56,752, 8. Related Party Transactions EDCO purchases goods and services from companies that have members currently on EDCO's Board. None of these amounts were material for the years ended June 30, 2013 and 2012. 9. Economic Dependency EDCO receives a substantial amount of its operational support from four public agencies (U.S. Small Business Administration, Deschutes County, Jefferson County, and the city of Bend) and two private agencies (Redmond Economic Development, Inc. and Prineville Chamber of Commerce) totaling approximately 35.1 percent and 56.4 percent of total support and revenue for the years ended June 30, 2013 and 2012, respectively. A significant reduction in the level of this support would have an effect on the programs and activities EDCO would be able to provide to the public. Additionally, a significant decrease in the support level from the region-specific private agencies could endanger EDCO's ability to conduct activities in these regions. 10. Prior Year Summarized Comparative Information The financial statements include certain prior year summarized comparative information in total, but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with EDCO's audited financial statements for the year ended June 30,2012, from which the summarized information was derived. -11 ­ I I ECONOMIC DEVELOPMENT FOR CENTRAL OREGON NOTES TO FINANCIAL STATEMENTS I 11. Subsequent Events I Management evaluates events and transactions that occur after the statement of financial position date as potential subsequent events. Management has performed this evaluation through the date of the independent auditor's report. I I I I I I I I I I I I I I I -12 ­