APPROVED APPROVED 3/10/99
February 23, 1999
BUDGET WORK SESSION - BOARD OF COUNTY COMMISSIONERS
9:00 a.m. - Commissioners' Conference Room
Commissioner Bobby Green, Sr., presided with Commissioners Bill Dwyer, Anna Morrison, Peter Sorenson and Cindy Weeldreyer present. County Administrator Bill Van Vactor, County Counsel Teresa Wilson and Recording Secretary Melissa Zimmer were also present.
Bill Van Vactor, County Administrator, reviewed the history of the Fin Plan. He said every year Dave Garnick, Senior Management Analyst, presents a financial plan that has been accurate, setting the overall parameters of how much will be spent. He added it has been a solid way to predict the budget. He said in February, 1999, the County is still in a period of change. He said the County is in the second year of Ballot Measure 50, there is a PERS situation and the issue of state funding. He said the financial plan needs to be institutionalized as an annual process in January or February, and the Board of Commissioners need to go over each assumption and make sure they are in agreement with it. He said they will base the proposed budget and the deliberations of the Budget Committee on what service levels the County has for 99/00, based on the document.
Garnick went over the Fin Plan (copy in file). He said the Fin Plan tried to maintain a ten year horizon and the County is now in year five. He said it projects how the revenues and expenses will do for the remaining five years of the guarantee. He said the overall general fund is about $78 million, and the discretionary portion is 54% of the overall general fund.
Garnick noted he had included the $1.6 million estimate from the general fund in this model. He said the County will not collect 100% of the taxes, so there is an uncollectible amount built in. He said the overall average growth of 3% plus new construction, averages about an increase of 6% per year.
Regarding indirect and overhead figures, Garnick stated they will be charging departments only for what it takes to cover the cost of providing support services. He said there are specific cost factors for all of the support programs, and they factor and charge departments based upon contracts and agenda items reviewed and checks printed. He added the costs are fixed. He said they could bring in additional indirect revenue from their grants to help with their own internal costs, and that way the general fund is better protected.
Garnick said the 97/98 Measure 50 reduction was about $1.645 million in the discretionary general funds and the accumulative total had cut 150 positions and $9 million as a result of trying to keep the County balanced. He added PERS starts next year, and the County has to absorb it and that is why the cash dropped significantly. He passed out a sheet with different scenarios (copy in file). He said there are also alternative revenues that could be considered to make reductions sooner. He said this is what was discussed with the Management Team and their expectation is the Board will read it and at the Leadership Team meeting on March 11, there will be direction from the Board.
Van Vactor noted when the Management Team considered the scenarios, the Sheriff didn't like any of them. He said the Sheriff would prefer the Board do reductions in this budget year to keep the organization balanced. He said the Sheriff hoped that when reductions were done, it was not in the Department of Pubic Safety. Van Vactor said when the Board met with the Management Team, the Sheriff wanted a strategy because they were not in an agreement as a management team. He added as a budget officer, he has the duty to prepare the proposed budget and if there is to be a cut strategy, he wanted direction from the Board as to where the reductions will come from. He added he would be prepared to recommend Scenario 5.
Tanya Heaton, Budget Analyst, reported all departments were directed to prepare a status quo budget. She added there would be no increases in services or new services. She said if the department was going to request that, they would have to present it in an add package. She added they included the full PERS increase and a 12% health benefits increase. She said she heard the increase may actually be about 20%, so there may need to be another adjustment for that.
Weeldreyer stated the Labor Management Benefits Group had been working on this and have realized savings for Lane County as opposed to other organizations that don't have that mechanism in place. She added they get a lot of credit for the costs they have been able to contain in the health care benefits.
Sorenson asked if the County was at a point where they could look at major changes in the way that health care is provided, with the County hiring their own dentist, doctors and covering the employees health care without a third party.
Van Vactor responded that a labor relations person spent a lot of time on this issue and he doesn't know the status of that.
Sorenson stated employees need health care coverage, but the County shouldn't be spending increasing amounts when it could go out and buy the services itself.
Weeldreyer said her biggest concern would be the limit of choices. She said if a family had gone to a certain doctor their whole life and then had to go to another doctor that didn't know their medical history, that would be problematic. She said a person's health has to be weighed with the cost of choosing physicians. She added the reason Lane County has the option of the traditional Blue Cross plan is because the County had been so good at containing costs.
Heaton noted that at this time the departments are completing their budgets in the old system and next week they will start putting it into the new system. She added the Department of Revenue is putting on a short training session on Thursday, February 25, on Budget Law. She said on March 9 there will be the Budget Committee Orientation, where Budget Committee members and the new commissioners are invited to hear about the process that the County uses. She added on March 11 there will be the Leadership Meeting where they will talk about the scenarios and where they will come away with some direction from the Board in what they want to see in the budget process.
Doug Harcleroad, District Attorney, stated his view is that the County does not have enough money and there is a strategic plan that is needed. He said with regard to money, he sees its strength as once the plan is created, he will work to try to get it passed. He said this last time the levy was not passed, but it was very close. He asked the Board to consider another type of revenue source that will help deliver services. He added if the County will end up going to the voters in the Year 2000, a double majority would not be needed. He said regarding Public Safety, he spoke with them and told them they needed to have their plan put together and delivered to the Board for consideration by March, 2000, because six months is needed for marketing for any plan. He said he is pushing a plan (if the Board decides to go out for more revenue) by March and he wants to help.
Sorenson said he takes exception to starting with the assumption that they will have an election. He said he asked that the leadership to think about the best non-property tax revenue model that currently exists--the Multnomah County Business tax. He said that tax was instituted by majority vote of their Board of Commissioners. He said he agreed with Harcleroad on planning for implementing some kind of revenue enhancement for the County. He said if the County were to take the business tax to replace the $17 million in property tax, he wanted to discuss that before he discusses the election. He said the election is not the only way to get revenue.
Green noted that Multnomah and Lane County do not contain the same types of businesses. He said Multnomah County has more private sector businesses than Lane County.
Commissioner Green recessed the Work Session to the Interview of the Internal Auditor at 10:55 a.m.
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