LANE COUNTY LEADERSHIP TEAM
December 8, 2009
Goodson Training Room, Public Works Delta Complex
Present: Tom Turner, Rob Rockstroh, Alicia Hays, Liane Richardson, Anette Spickard, Rick Reno, Faye Stewart, Scott Bartlett, Tony Black, Lisa Smith, Pete Sorenson, Bill Fleenor, Jeff Spartz, Marsha Miller, Roland Hawkins, Alex Gardner, Brad Russo, Cindy Land, Denis Hijmans, Alice Kaseberg, Rob Handy and Recording Secretary Melissa Zimmer
1. Call Meeting to Order
Pete Sorenson, Chair, called the meeting to order.
2. Service Option Sheets & Service Categories for FY 10-11
Jennifer Inman, Senior Budget Analyst, distributed a stack of Service Option Sheets. (Copy in file). She explained that these represent Public Safety and the general government services in whole or part funded by the discretionary general fund. She recalled that they have used these sheets for the past three years for service levels. She indicated that they have not explored the consequences of not meeting all of the mandates and what will happen if they donít fulfill the mandate specific to each service. She commented that a majority of services are at or close to threshold so any cut of funding will require them to no longer do that service She stated that this is a beginning point.
3. State Budget Update
Alex Cuyler, Intergovernmental Relation Manager, discussed Oregon Budget 101. (Copy in file).
Cuyler reported Measures 66 and 67 would have major outcomes. He indicated that because of the uncertainty, the state agencies are looking for a ten percent cut in five percent increments.
Handy asked what cuts will take place if Measures 66 and 67 donít pass.
Smith said she met with the Oregon Youth Authority and in a worse case scenario, (if the measures donít pass) the OYA is looking at a 25.4 percent cut, it will affect most residential services. She said they would be closing 530 secure beds out of 900 and there would be no capacity at the local level. She added that foster care would no longer exist at the OYA level and there will be a 25.4 percent reduction to basic and diversion funds. She indicated they could be losing from 50 to 100 percent of the detention capacity and a quarter of probation staff.
Hays reported that Children and Families will see cuts to services of 10 to 15 percent and the entire community will be impacted because of cuts to foster care and to senior and disabled services. She added that the cuts will be devastating. She indicated they will lose child care funds with schools in 4J.
Rockstroh said that for the Department of Human Services, there will be state cuts. He said the legislature wants to cut 5.5 percent but they are talking bout ten percent at certain levels. He thought the worst case scenario is 5.5 percent, but he wasnít sure about cuts to schools.
Spickard asked the Department of Revenue about possible reductions. She said they will cut shift work back to the counties. She recalled they eliminated 100 percent of general fund support last session. She stated that the Department of Revenue wouldnít release the information until after the vote.
Gardner said there would be indirect cuts. He noted the cuts to the Oregon State Police could be as much as 2/3 of the Criminal Division. He said the Community Correction money cut would be huge. He indicated they need a five percent cut to make the budget work.
Tom Turner, Sheriffís Office, said they didnít know what the percentage of cuts would be. He noted with the Oregon State Police, the Eugene office is running only 20 hour shifts because of budget cuts.
Rockstroh stated that it is more like an 18 percent hit.
4. PERS Information
Karen Artiaco, Human Resources, presented information on PERS. (Copy in file).
She commented that PERS is in better financial condition than any other public pension program in the United States. She reported for Lane County that the unfunded actuarial liability in 2005 was $13 million surplus. She noted in 2007 it was $62 million and in 2008 there was a liability of $112 million. She said Lane County lost $174 million in funding capacity. She said if Lane County had to pay that back in one year it would be 150 percent of payroll. She stated the good news is that Lane County is outperforming PERS. She indicated that in the future PERS has a rate collar based on a point in time. She said it was a caveat to mediate any swings for employers. She added that PERS put a rate collar in that it canít increase or decrease more than three percent, but should an employer be at less than 80 percent funded, it doubles and the rates could go up from 6 percent per year. She added that none of this should affect Lane County. She said it could possibly in the future, but from the information from AOC, it doesnít look like an option. She thought for the next fiscal year that there would be a three percent fee increase for the next three biennium: going from Tier 1 and Tier 2 from 9 percent to 12 percent in 18 months. She added that OPSRP is 11 percent going to 14.5 percent plus 6 percent for IAP and pension bonds.
Hijmans asked if the PERS defined benefit goes down over time.
Artiaco responded that they still have a defined benefit with Tier One and Two. She indicated there is a lesser benefit after that.
Fleenor asked if they could transfer money from the reserves to PERS as a loan and if they meet it, if they could transfer it back. He thought it could be a temporary safety feature.
Artiaco responded that there is no provision for a loan. She indicated the way they treat pension bonds or contribution proceeds is different than when Lane County sold pension bonds.
Dwyer asked what the difference was between three and six percent.
Artiaco stated the amount is $2.1 million.
5. FY 10-11 Budget Process and General Fund Financial Forecast
Christine Moody, Senior Budget Analyst, distributed information. (Copy in file). She said that they continue to assume the Secure Rural School formula reduction is going away. She said it assumes the last year PERS rates. She indicated that they knew when the budget was built last year that the stock market wasnít good and they knew rates were going up. She said they left the rates higher than they would have been and it will help them pay off PERS when it goes up. She said they left in 3 percent higher than what PERS will be charging. She said payment for PERS assumes payroll is growing and because they didnít last year the raised bond rate was 7.5 percent to pay off $1.5 million of bond. She added to pay early will save interest by the end of the fiscal year to pay off the callable bond. She said the assumption is then taking the PERS bond rate down. She indicated the forecast doesnít assume any reductions, but it is flat. She added that it does not include the Supplemental Budget 2 for tomorrow. She indicated that they still have three years of stability and then things drop off. She added that if they receive partial SRS, they will still have problems. She stated they will still have a structural deficit.
Fleenor asked what the current reserves were.
Moody responded that the prudent person reserve is at $8 million and the rest is in the service stabilization reserve. She said that cash was at $24 million.
Fleenor said they need to slow down the spending in the current budget year if the vote in January is negative and if the December forecast isnít good. He stated that the Board could give a briefing with the Budget Committee invited on what they could ratchet down if they have to, based on the stateís forecast and the January vote. He recommended a night public hearing before they adopt the budget.
Sorenson wanted the first budget meeting to take place on April 27.
Fleenor and Dwyer liked the proposal as is.
Moody discussed budget and the planning related projects. (Copy in file). She stated that Mike McKenzie-Bahr, Economic Development, will come to the Board in January to talk about the transient room tax funding, with more information on what Parks has generated. She recalled they swapped TRT for car rental tax and it has been a hard year for TRT.
Adjourned at 11:35 a.m.