February 6, 1995
LEADERSHIP TEAM MEETING
Commissioners' Conference Room - 8:30 a.m.
Present: Wes Brustad, Steve Carmichael, Steve Cornacchia, Ellie Dumdi, John Goodson, Bobby Green, Sr., Doug Harcleroad, Bill Hoyt, Chuck Forster, Bob McManus, Rob Rockstroh, George Russell, Jerry Rust, Bill Van Vactor, Cindy Weeldreyer and Teresa Wilson. Jim Gangle excused. Budget staff present: Dave Garnick, Rick Schulz and David Suchart.
Follow-up Report on Car Rental Tax Exemption
Schulz reported that the amount of car rentals under the $20 per day exemption amounted to approximately $1 million and that the 10% figure on that would be $95-$100,000 per year. Wilson indicated that the ordinance change would be relatively easy and she proposed describing the dedication for parks as approximately 86% of the car rental tax with the balance being a non-specific dedication for the general fund. Rust asked that affected parties be notified as soon as possible. Wilson remarked that a letter could be sent to all of the car rental agencies immediately as a first reading could be scheduled as early as February 21, a public hearing following that in two weeks, with a tentative effective date of April 1, so that new revenues would begin accumulating at the beginning of the fiscal year. Questioning what happened to the commitment to the industry, Cornacchia indicated that he was not on board with different treatment on different issues. Goodson explained that one rationale is that vehicles are not directly tied to tourism or parks, as the under-$20 rentals were generally for local temporary replacement vehicles while primary cars were being repaired. There was consensus that direction be given for a first reading of this ordinance on February 21.
1. Use of Reserves/Changing the Prudent Person Reserve %
Schulz reviewed Margo Drivas's February 23, 1993 memorandum (see material on file) explaining the history of the 5% prudent person reserve. He then reviewed his own January 25 memo outlining reasons not to use the reserves. Finally, he discussed Randy Green's January 27 memorandum dealing with reserve amount versus bond rating.
Van Vactor indicated that after review, he is recommending not touching the reserves due to concern regarding loss of interest earnings and potential loss of bond rating. Rockstroh suggested that a cost/benefit analysis be done. Garnick remarked that using reserve dollars is a one-time solution. Green indicated that he does not support accessing the reserves. A brief discussion followed on the need to make decisions now and follow through with them later. MOTION: Adopt the recommendation of the Finance and Audit Committee not to use reserves toward balancing the FY95-96 budget. Rust MOVED, Green SECONDED. VOTE: 4-1, Cornacchia dissenting.
For Cornacchia's benefit, as he had been excused from the February 1 meeting early, a brief discussion occurred with regard to reconsideration of the usage of room tax dollars. Cornacchia indicated that he was willing to wait for the results of a May election.
2. Reduction Targets
Garnick reviewed the chart containing the various percentage scenarios available for reaching reduction targets (see material on file), focusing on a "spending ceiling" for each department. He brought forward the Finance and Audit Committee's recommendation that all four scenarios be brought forward by departments for preparation of the budget. Rockstroh distributed a handout outlining budget figures for his department. He expressed concern that the 2.01% of general fund scenario seems to provide a penalty for new grants. Rockstroh asked for a policy discussion regarding including "leveraged" dollars in budgeting targets. Van Vactor remarked that Finance and Legal get no "indirect" for Health and Human Services' $16 million in agency payments.
Dumdi restated her position that everything should be on the table for discussion except reserves and Harcleroad remarked that the department heads were in support of leaving room tax on the table. Green observed that taking away areas that are profitable (parks, tourism and the reserve fund) to shore up the general operating fund would only be a short-term fix. He remarked that a business approach over the long term would necessitate keeping the profitable areas. Rust emphasized that he would like to stop going over decisions that were reached last week and move forward, stating that he would not be changing his vote(s). Responding to Cornacchia, McManus noted that, in the past, departments were asked to give a variety of reduction scenarios to the County Administrator, who would then fashion a budget based on what he felt was best for the entire county. He noted that he understands that this year each department will be given a target dollar figure and be asked to present the cuts they feel are best for their department. Van Vactor observed that the Budget Committee/Board are the budget authority and preserve the right to make final policy decisions with regard to departmental reductions.
Responding to Green's questions regarding barriers to departments seeking additional revenue, Rockstroh reported that grant requests require significant staff time and generally require matching funds. Russell remarked that it is difficult for some departments (CAO, Legal, HRMS, etc.) to find grants available for their service.
There was consensus that departments would present proposals on the full range of scenarios so that the budget officer/budget committee/board would have some choices. McManus stressed that his bottom line was that he would be advocating for no cuts in Public Safety, but rather that the Board come up with a new revenue source or put other funding sources on the table for discussion.
This meeting recessed at 10:18 a.m. to reconvene at 10:31 a.m.
Carmichael emphasized the need to get figures together and move forward quickly in order to make decisions by March 16 to allow the ability to tell voters what they may be voting on. Garnick remarked that it would be early March before reduction alternatives are received and reviewed. McManus reiterated, and Carmichael confirmed, that the Management Team was unanimous that all potential revenues be put on the table, noting that decisions that have been made recently have fragmented that approach.
MOTION: To reconsider the February 1 vote and leave the uncommitted $421,000 from the transient room tax revenue on the table for discussion. Weeldreyer MOVED, Dumdi SECONDED. With regard to dedication of funds, Wilson explained that once taxes are collected, they are dedicated to their original purpose; she continued, however that the dedication could be changed so that new funds coming in, equal to that amount, can be rededicated. Garnick reported that $153,000 of the $421,000 is cash and $280,00 is anticipated new revenue for next year. Cornacchia indicated he would vote against the Motion as he thinks all room tax funds should be on the table for discussion. Responding to Rust, Wilson indicated that the room tax ordinance language may be broad enough to cover the redirection of funds being considered. Rust commented that he and Green would be meeting with the CVALCO Executive Committee next Wednesday. He also stated that the Blue Ribbon Task Force appointees should be notified that decisions on the room tax are being made at the budgetary level. Rust stated that a vote on this issue today is not conducive to a possible "win-win" situation with the tourism industry. Weeldreyer explained that her Motion would not affect the contract with CVALCO, but deals with the unobligated funds ($421,000) from the 5% portion of the room tax and would be contingent upon the non-passage of a levy. Garnick noted that the additional revenue from the addition of recreational vehicle parks to the room tax structure has not been included in the model. He estimated that figure could be between $100-150,000. VOTE: 2-3, Cornacchia, Green and Rust dissenting.
3. Budget Calendar
Garnick reported that budget instructions should be out in mid-February, with departments returning their budgets by early March and then being reviewed by the County Administrator during the week of March 12. After discussion, there was consensus to make preliminary decisions before the levy title deadline of March 16. The dates of March 13 (5:15 p.m.), March 14 (5:15 p.m.) and March 15 at 1:30 p.m. were set for a "Budget Committee policy summit." Van Vactor reminded the group that major decisions made during this time schedule would be done in advance of a public hearing process.
4. Preliminary Reduction Strategy in Public Safety and Youth Services
No discussion was held on this item pending the accelerated budget process discussed above.
5. New Revenues
Van Vactor reported that the Finance and Audit Committee would be meeting on February 15 and would accept any input/comments/suggestions prior to that time.
B. LEGISLATIVE STRATEGY RE: CORRECTIONS
Donna Lattin, Community Corrections Manager, reported that the Governor's budget for corrections reflects the impact of Measure 11 (which goes into effect April 1), which sets mandatory minimum sentences for select felonies and requires that juveniles age 15 and above who are charged with those felonies be charged as an adult. She indicated that the Governor's budget redefines the state/county partnership for managing felony offenders. Lattin remarked that the significant implications for Lane County are 1) counties would, in effect, be mandated to go Option 1, so Lane County would have a new responsibility to oversee the supervision of 2500 felons; and 2) counties will be mandated to assume a new workload which includes assuming responsibility for those felony offenders who are currently sentenced to prison for less than 12 months.
Lattin stated that the good news is that the Governor is deregulating the Community Corrections Act dollars and the state dollars that currently go to provide the supervision of the 2500 felons.
Lattin proposed the following recommendations: 1) that it be requested that a representative from Lane County, preferably a commissioner, be allowed to sit on the state committee that is reviewing the issues relating to the legal/personnel issues involved in assuming the new probation/parole responsibilities; and 2) that in the interim the County put together some type of a transition team to assess the impact of the Governor's recommendations as they take shape and to advise the Board.
McManus added that state grants will not come with the strings attached that CCA dollars have come with in the past. With regard to the Allocation Formula Committee, McManus indicated they are currently recommending an 80/20 split and a hold harmless, which would result in Lane County receiving $8,963,300 (by 80/20 population formula) or $9,050,832 (by workload only formula). He indicated that the workload that will be going to the local jail will be astronomical, expressing concerns about operating costs and ongoing maintenance.
Responding to Rust regarding Lattin's recommendations, McManus indicated that he did not feel it would be possible to get more people on the committees. He stated that he does think a transition team is a good idea. Rust emphasized his support of a message to the state level regarding unfunded mandates. With regard to who should take on the responsibility for parole and probation, McManus offered his support of placing it within the purview of Public Safety.
There was consensus to support Lattin's recommendations, especially since Lane County is the largest Option 2 county.
Van Vactor introduced Garnick as the new Senior Management Analyst.
There being no further business, this meeting adjourned at 12:02 p.m.
Sharon Giles, Board Secretary
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