January 10, 1995
LEADERSHIP TEAM MEETING
Commissioners' Conference Room - 9:00 a.m.
Present: Wes Brustad, Steve Carmichael, John Clague (for Bob McManus), Steve Cornacchia, Ellie Dumdi, Chuck Forster, Jim Gangle, John Goodson, Bobby Green, Doug Harcleroad, Bill Hoyt, Rob Rockstroh, George Russell, Jerry Rust, Bill Van Vactor, Cindy Weeldreyer and Teresa Wilson; David Garnick and Rick Schulz, Budget Staff. Sharon Giles, Recording Secretary.
1. PRESENTATION/Historical Perspective on Reductions.
Bill Van Vactor, County Administrator, reviewed the upcoming presentations. He noted that while the budget staff would be encouraging the Board to pursue revenue, the need for realistic budget preparation is understood. Referring to a recent opinion from the Secretary of State's Office, Van Vactor indicated that there is no longer the necessity of a public hearing 30 days prior to submission of an election notice to the County Clerk; thus, he noted that Lane County has until March 16 to make decisions with regard to what to place on the ballot.
2. DISCUSSION/Approach to Reduction Targets.
David Garnick, Management Analyst, explained the "Ten Year Discretionary General Fund Forecast" and reviewed the major assumptions built into the model (see material on file). With regard to video lottery funds, Cornacchia indicated that the governor has made a commitment that the current county split will remain intact this biennium. Garnick relayed a concern from Margo Drivas as to whether the County would be able to sustain all of the video lottery program spending to maintain projects. Cornacchia asked that this be monitored on an ongoing basis. Garnick mentioned that Drivas had also noted that the lapse tends to come from increased revenue production and had suggested that this be watched closely. While noting that the reduction for FY96-97 is under $1 million, Garnick stated that cutting the reserve perpetuates the problem. Direction was given to research the minimum reserves required to maintain favorable bond rating.
Cornacchia reported that some counties have quit making payments to the Common School Fund. Direction was given to have research done on whether Lane County has the authority to quit making payments to the Common School Fund and, if so, whether the state replaces those dollars into the school fund. Dumdi observed that the FTE reductions over the 10-year period in the forecast is very serious. Garnick reviewed the chart entitled General Fund Reductions, which reviewed the history of reductions that have been made over the last four fiscal years. Garnick reviewed past reduction strategies, observing that departments have prepared a variety of reduction packages reflecting reductions of 5-10-15-20-25%. He offered the question of whether it is appropriate to plan budget percentage reductions based solely on the discretionary general fund or whether it can/should be done on each department's overall budget. Garnick reviewed a chart which reflected that the general fund continues to grow, but the discretionary amount is declining at an average of 6% per year, while the non-discretionary has grown 26.2% per year.
Van Vactor remarked that the good news is that aggressive pursuit of grant dollars has been productive. Garnick reviewed the composition of funding mechanisms for each department.
Responding to Green's comment regarding benchmarks, Van Vactor indicated it would require additional revenue to maintain the status quo, whereas living within present resources would require reductions in each department. He stated the need to review strategies to develop goals. Noting that new systems in various departments are predicated on a better computer system, Cornacchia indicated his interest in increased materials and services budgets to invest in downsizing. Garnick reviewed a chart which highlighted potential general fund reduction targets for FY95-96, noting that the model projects a $2.495 million deficit for FY95-96. He noted that options for reductions include traditional "across the board" cuts, cuts based on a percentage of total general fund budget and reductions based on a percentage of each department's total budget. Responding to Van Vactor's request for direction on which alternative to use, Cornacchia remarked that it is difficult to choose a method without knowing the effects on the service delivery system. He suggested looking at all three options. Noting that his department has numerous external revenue sources, Rockstroh stressed the need to design a system for the community overall, not just on percentages. He observed that his department historically takes larger cuts than planned because they pursue grants aggressively. Rockstroh asked the Board not to do across the board cuts.
3. DISCUSSION/Budget Preparation.
Rust emphasized that the final outcome of last year's budget process, wherein lapse and reserves were used to shore up some reductions, had a negative impact on the County's credibility. He observed the need to regain that credibility this year and perhaps not go after new revenue. Rust suggested using reserves up to the amount absolutely necessary to maintain a good bond rating. He agreed with the need to use a "systems analysis approach" and suggested that be done during the next cycle, while utilizing the traditional 5-10-20 percent scenarios this year. Harcleroad expressed concern about the 5-10-20 percent scenarios, suggesting a position-by-position approach in order to see impacts on the whole. Cornacchia indicated that he was comfortable with the 5-10-20 percent approach and perhaps consideration on cuts based on percentages of the total general fund. He noted his discomfort with reductions based upon a percentages of departments' total budgets. Van Vactor summarized present direction as following the traditional 5-10-20 percentage approach and also presentation of the additional option, for information/comparison only, in terms of a percentage reduction based on the total general fund.
Schulz reviewed the handout dealing with fixed payments. Cornacchia indicated that he would like to have a breakdown of the room tax with regard to how much room tax is coming into Lane County, how much is specifically earmarked by Board Order and then what is left after that. Van Vactor indicated he would bring that information, including information on the car rental tax, to the Board during the first part of February.
Van Vactor remarked that direction is needed on the following issues: revenue, reserves, video lottery, IHSC, reduction strategies from the Sheriff (police v. corrections), reduction strategies from Youth Services (detention v. counseling), assessment and taxation, land management and funding for downsizing. He indicated that budget staff would prepare policy papers on each major issue. There was consensus that the Finance and Audit committee would meet to review some of these issues first. There was agreement for the Leadership Team to meet again on February 1 at 9:00 a.m.
Dumdi distributed a recent economic development-related newsletter, indicating that format could be used for educating the public with regard to budget. Van Vactor stated that the requested public survey is underway.
There being no further business, this meeting adjourned at 11:10 a.m.
Sharon Giles, Recording Secretary