LEADERSHIP TEAM MEETING
January 10, 2006
Goodson Room, Delta Highway, Public Works
Present:† Anna Morrison, Lisa Smith, David Suchart, Bill Dwyer, Jim Gangle, Bobby Green, Doug Harcleroad, Chuck Forster, Tony Black, Val Major, Alicia Hays, Ollie Snowden, Russ Burger, Greta Utecht, Teresa Wilson and Recording Secretary Melissa Zimmer.† Peter Sorenson was absent.
1. Approval of Minutes:† February 25, 2005, Leadership Team, 8:30 a.m.
MOTION: to approve the Minutes of February 25, 2005.
Harcleroad MOVED, Green SECONDED.
2. Strategic Planning & Performance Management
Gangle recalled the last Strategic Plan was approved in March 2001 and was in place from 2001 to 2005.† He stated it was time to update the plan.† The Strategic Plan Steering Committee had been working to update the plan.† He said they want to make it more concrete and integrate the plan to make it work better as an user friendly document.† He said they want to separate policy and practice from strategy and conduct an environment scan for input on the plan.† He said the plan will go to the Board for approval.
3. Strategic Objectives
Jennifer Inman, Management Analyst, explained that they identified four priority strategic objectives.† She said with those objectives they created an action plan, timelines and identified who was responsible for the next steps.† She indicated they had been working on the objectives for the past eight months and collected input about how they were doing on each of the objectives.
Utecht recalled they had major bargaining the past year with AFSCME and LCPOA.† She said the units contain the largest amount of employees and it was important to discuss cost containment.† She recalled that both units were reasonable and they reviewed the Fin Plan for the next three years and spent the costs they had worked into the Fin Plan.† She said they continued to believe that keeping the benefits in full was most important.† She stated they either didnít take a COLA increase or took less than in the plan.† She commented that the only thing in managing benefit cost was to charge employees more or provide less in the plan for the short term.† She stated they were putting most of their energy into the long term, focusing on a wellness program.† She commented that the more insurance plans they have, the more costly and cumbersome it becomes to administer.† She noted that currently they have 14 different plans.
Dave Garnick, Budget and Financial Planning Manager, said they took the internal audit review that Kay Blackburn presented when she was the internal auditor.† She took that to Finance and Audit and it needs to go to the full Board for formal adoption.† He thought the recommendations were straightforward enough that they want to incorporate them into the 06/07 budget process.† He said originally the task force was going to offer additions to the public safety program and toward the end of the task force process, the recommendation was to move public safety out of the general fund and into a dedicated fund.† He said in the process of doing that, they took some of the pressure off of the general fund.† He indicated he was working on a Fin Plan that would look at what would happen if public safety was taken out of the general fund.
Garnick explained the direction is to move forward with a public safety district.† He added the recommendation is to pursue alternate funding mechanisms separate from the public safety district.† He noted the new proposal is a personal income and business income tax on all people inside the County.† He explained that both personal tax returns and businesses would be charged, and the process would be moving public safety out of the general fund.† He thought if they did that they could stabilize public safety services and the general fund. He indicated a charter amendment will go to the voters with a rate cap.† He said if the voters vote on this in May or December, they could enact the ordinance to impose the taxes.
Dwyer commented that they want to be clear that with the personal and business tax, there would be a credit for one or the other, so businesses wouldnít get taxed twice.
Melinda Kletzok, Public Information Officer, distributed information. (Copy in file). She discussed the surveys they had done.† She said they need to have a higher visibility than ever in the past.† She indicated that they want to get the employees involved.† She stated the Board allocated funding for an awareness campaign that would not be just for public safety, but other departments, explaining what the County does.† She said they are going to position the County as a source of information.†† She said that people will be able to see the value of the County with the publicís tax dollars.
Suchart explained that he put together a preliminary program on what the public health building could be.† He noted the scope of the program is anywhere between $11 million and $24 million.† He indicated he is involved with an RFP for the master plan with the architectural selection and site, the type of structure and how it is going to be funded. He noted the RFP should be out this month.† They should have a master plan completed in July to go to the Board in August.
4. Measures and Performance in County Decision Making
Inman reported they reconvened a performance measure cadre.† She said they are involved in an assessment and revision of the operational level performance measures across the County.††† She thought this year they were coming forward with their performance measurement implementation effort by having performance management systems.†† She indicated the Performance Measurement Implementation Team met to develop new performance management guidelines for the County.† She said they will bring those to management team for review and adoption.† †
With regard to the HR Department, Utecht indicated they are trying to put more focus on diversity with the new Diversity Action Plan.† She said they matched the Diversity Action Plan against the HR Plan to make sure they are moving forward.† She commented that absenteeism and illness is becoming a major cost factor for the County.† She indicated that they are working hard on career development.† She noted there are currently 105 classifications for 130 employees.† She said their goal is to reduce the classifications down to 30 and build them broader so employees have more ability to move into different career areas.† She commented that the performance review needed to be revamped.
5. Financial Planning and Budget Process
Garnick said the recommendation is to develop a revised general fund reserve policy.† He said it was reviewed by Finance and Audit and the Management Team.† He indicated they wanted to include policies in the budget instructions with the understanding that it needs to go to the Board for formal adoption.† He explained they have a five percent prudent person reserve.† He said this proposal is to increase it to ten percent.† He recalled the last time they went out to the bond market, they were close to getting their bond rating reduced as a result of reviewing their financial situation.† He said they are planning on increasing their reserve to a minimum of ten percent to have that at the end of the year.† He said the range from the government finance office is between five percent and fifteen percent.† He indicated Moodyís wanted ten percent as a minimum.† He indicated this keeps a ten percent reserve, with the first five percent as an emergency reserve that is only to be used under extreme circumstances.† †
Morrison commented that Finance and Audit thought this policy was a smart strategic thing to do.† She indicated that this would impact more departments than others.† She asked if the Management Team agreed with this.
Rockstroh noted the Management Team thought it was a good idea.
Garnick reported that this had already been included in the Financial Forecast.† He noted in the past few years the departments had been under spending and it had exceeded ten percent. He indicated it would be more difficult to do that in the future if the public safety measure doesnít pass.
Green asked where the money would be generated.
Garnick responded it would be covered by cash.† He added that in the future they would have to set aside an additional five percent to have a reserve.† He said that would mean there would be less money to spend.
Blackburn explained that the next proposal would be to move the dedicated funding out of the general fund and that wonít require a ten percent reserve.
Stewart thought they should have an economic stabilization reserve because they will be going through different types of taxes.
Wilson thought if they had a public safety dedicated fund built on an income tax that is volatile revenue it might be different than this.† She indicated that each fund would have to be reviewed for what the appropriate reserving policy should be.
6. Current Financial Polices
Garnick noted in Attachment B (copy in file) there were 22 polices--in the order they were established.† He noted Attachment C (copy in file) organized and grouped them into logical categories and the wording was easier to understand.† He said the finished policy is that every fund should have a five percent prudent reserve.† He explained for the lapse policy, they discovered the policy had been applied differently by departments.† He said the recommendation is to make it clear about how the general fund lapse is calculated and what it is based upon.† He noted there is a section about consequences if they donít achieve the minimum two percent lapse.
Burger didnít mind paying the two percent lapse but if they come up short, he thought it should be based upon a percentage versus a fixed dollar amount.† He commented that their budget is so large that trying to fit it at 98 percent is difficult.† He said their lapse is generated by personnel vacancies.† He didnít have confidence in the voters approving an income tax measure.† He thought they should have a plan to add capacity in corrections over a five or ten year period and if they had lapse in excess of two percent, he would to put it into the project for long term planning.
Dwyer didnít know about the precedent it could cause.† He thought the concept was good but in reality it would defeat what it would take to restructure the planning.† He asked what would trigger the reserve.
Garnick said when items go to the board that they have to come up with strategic objectives.† He noted that the public health building is a priority and they have money set aside in the Fin Plan to try to start that.† He thought departments could come forward with long term proposals that would take time and dedication of resources.† He said they could start to build that into their plan.
Green commented that what the Sheriff proposed had merit.† He encouraged the Board to make it work for the entire organization and then everyone could have the same opportunity.
Burger thought each department should have the benefit of fiscal management to have long term planning decisions and the departments could save toward that.
Morrison was concerned about the perception that each department has dedicated funds for the future they are generating the capital for.† She said they still have service needs that are not totally being met.† She thought they should be cautious with the perception by the public that they couldnít provide a service even though there is money in another fund to do something else.
Burger commented that the perception by the public is, that in government, if you donít spend it, you lose it.† He said if they donít try to control their own destiny, they wonít get what they want.
Garnick explained that Attachment E (copy in file) was part of the prior audit report. He said when they looked at other comparable counties, (Clackamas and Marion), they found they divert most of their restricted revenue into a special revenue fund so what is left in the general fund is the discretionary general fund portion.† He noted that is the portion the board has authority to decide how to spend.† He said when they calculate the lapse required it is smaller.† He said the recommendation is to look for areas where they could move things out of the general fund.† He noted that the Department of Children and Families could be moved out as they currently do not use any general fund dollars, since they are funded by outside revenues.† He said by moving them out of the general fund it reduces the fund and the reserve requirement.† He indicated the idea is any programs in any of the general fund departments that are entirely self supporting or funded by restricted revenue could be moved over to a special revenue fund.† He said in going along with the general fund reserve policy, they could go out to the bond market with something for the public health building.
Blackburn stated that operationally they would like to get everything that is not discretionary out of the general fund.† She said for this budget season they could move Children and Families and programs that donít have any general fund support and they could meet with the departments and work on which programs could move out next year based on a phased-in approach.
Garnick thought there was about $104 million in the general fund with over $13 million that could be moved right away.† He indicated that they would be bringing this to the Board as a formal packet for a Lane Manual change in the budget direction.
7. Fin Plan Update
Garnick reported the forecast this year maintains the same assumption but it also includes all of the changes in the bargaining unit contract agreements with changes in deferred comp and the planned pick up of the employeeís share of PERS.† He said at this point it didnít show public safety being moved out.† He added it assumes the renewal of the Secure Rural Schools Act and under the capital projects line they filled in money for the public health building.† He said in the process of updating all of the numbers, the projected budget for 06/07 shows there are no reductions necessary to balance the budget.† He stated they could have a status quo budget for the next year.† He said the projected reductions for 07/08 are $2.2 million and in 08/09 they would need to reduce almost $4 million.† He commented their expenses continue to outstrip revenue. He added if they donít receive the Secure Rural Schools funding and the income tax measure doesnít pass, they will be looking at a $17 million loss.
Morrison requested that Garnick prepare the Fin Plan projections and change the numbers with Secure Rural Schools monies received at 50 percent and 75 percent so they could get an idea at what they are looking at.
Garnick reported they reserved an extra amount of money they have been charging for PERS.† He said if the legislation is overturned and they would have to make a large payment, they would have money to make the payment.† He said in 06/07 they stopped the reserve because PERS projected they would raise their rates another 4.5 points.† He said in the process of doing that they eased up the reserve rate and they have $6 million in that fund.† †
Harcleroad asked what number they would need to cut in 07/08 so they wouldnít have to cut anything in 08/09 to have two years of stability.
Garnick responded that would be an additional $2 million.
8. Budget Process
Garnick explained they summarized what was done in the last budget process and how they thought the process went.† He said the first question asked was how the members felt about getting the budget material only ten days in advance.† He noted other jurisdictions only get their budget materials to their budget members four days in advance and others jurisdictions in just hours.† He said for the most part they want to get the materials quicker to the Budget Committee.† He added that last year Snowden presented the Budget Committee an update on his Fin Plan and there was a presentation on the actual benefit costs.† He said they want to bring the committee as up to date as possible.† He asked if that information was beneficial.
Morrison thought the information was meaningful especially to the public who are listening.
There was consensus to continue with that process.
Garnick stated that they did away with the technical meetings they used to have prior to the actual Budget Committee meeting.† He said they will encourage the members to contact the departments if they have any questions.
Dwyer asked if there was any problem with the pre-meeting not taking place.
There was consensus not to have the pre-meeting.
Garnick asked if they still wanted the departments to make a presentation and then ask questions at the end.
There was consensus to do that.
Garnick asked if there should be a limit of two presenters per department.
Morrison thought the questions could be written down and the answer given later to that person who had the question or for the whole budget committee.† She said if there is a question about a particular department presentation, they could go to that department and ask a question before the budget meeting.
Dwyer thought it was important to limit the presentation.
Denis Hijmans, Budget Committee Member, thought it was a learning process. He wanted there to be a process to answer questions.† He said questions were presented to departments but the departments didnít respond to the questions.
Stewart thought they had a good process.† He thought if they had more concerns or something was missing, they could be asked the next night or they could be e-mailed to the departments.
Mary Ann Holser, Budget Committee Member, thought the process went well.† She thought there should be the flexibility allowed for someone to ask an important question.
Rockstroh thought there should be a time set aside to ask questions before the last meeting.† He thought if it was important enough for the people to discuss that it could be built into the schedule.† He said there could be a section of Budget Committee comments where if there were any questions that came up in the past week, there could be a time to discuss it.
David Crowell, Budget Committee Member, commented that Rockstrohís recommendation was good and worth pursuing.
Hijmans thought there should be more time allotted to larger departments in the general fund.
Green thought things worked out well last year.† He thought each department was sensitive to the time and were careful not to take too much time in their presentation.
Garnick indicated that every year they will review the budget process to adjust to the circumstances that are needed.
9. Survey Results from Other Counties
Christine Moody, Budget Analyst, explained she contacted six counties. (Copy in file)† She noted that Lane County was third in size with its budget and FTE.††† She indicated that all counties were developing a Strategic Plan.
10. Recommended Budget Direction
Garnick indicated there was a draft placed in the packet. (Copy in file).† He said, based on the general fund forecast, they will have a status quo budget with the same services continuing next year.† He said they will be negotiating with bargaining unit 626 and Admin Pro.† He added they will be negotiating for Parole and Probation but they wonít be budgeting for them yet.† He commented things were being under spent with materials and services.† He wanted to control growth, so the recommendation is to have minimum growth.† He said they will be using the discretionary general fund.† He said due to the status quo, there will be no general fund add packages unless the department is self-funded.† He stated they wonít have to do reduction packages unless they are in the process of losing grant funding money.† He commented that they needed to stay within their target and live within their means.† He said the recommendation is to move some departments out of the general fund entirely. He reported that HR will be budgeted in a separate department.†
There being no further business Commissioner Dwyer adjourned the meeting at 10:55 a.m.