SPECIAL BOARD WORK SESSION
(BUDGET COMMITTEE INVITED)
May 1, 2003
1:30 p.m. - 5:00 p.m.
Commissioners’ Conference Room
Commissioner Peter Sorenson presided with Commissioners Bobby Green, Sr., Tom Lininger and Anna Morrison present. Bill Dwyer was excused. County Administrator Bill Van Vactor, County Counsel Teresa Wilson and Recording Secretary Melissa Zimmer were also present.
1. INTRODUCTION – BUDGET DEVELOPMENT.
Sorenson stated the Board was aware of the serious problem of the preparation and the adoption of the Lane County Budget He noted that several of the challenges in the budget prompted individual commissioners to ask questions about the budget in the context of Board business. He said they decided to set up this special Board Meeting to have a review of the Phase One, Phase Two and Phase Three aspects of the budget development. He added the Board of Commissioners invited the Lane County Budget Committee to be present.
Van Vactor explained that the Board has in its notebook a list of department reductions. (Copy in file). He said that Lane County government has been in a series of budget reductions. He noted there are three phases they will be spending time on and the net total is over $20 million of which $5 million is the general fund. He added that $14 million are reductions from other funds, most predominately from state government.
2. PHASE ONE – FY 2002-03 Mid Year Reductions.
Van Vactor commented that Phase One is where the departments have to reduce their budgets by the reductions received by state, federal and grant agencies. He said it is $403,000 in general fund and $2 million in other funds. He added that Lane County is also funded through state income tax. He said when the state loses income tax money, they cut programs and Lane County feels the impact.
Van Vactor noted that there is a Mental Health cut of $780,000 or 6.45 employees as well as the other cuts in Phase Two.
Jan Clements, Sheriff, commented that despite the budget difficulties, the Sheriff’s Office would continue to perform well. He wanted to show the Board the return on the investment for the ongoing operations to the Sheriff’s Office. He noted the Sheriff’s Office and Public Safety take the lion’s share of the discretionary general fund. He stated the Sheriff’s Office generates over $17 million in general fund revenue and that is 43% of the Sheriff’s Office budget. He noted the Sheriff’s Office protects 328,000 citizens and $18 billion in assessed property value. He said with the net $23.5 million of the general fund they use, they are protecting the County at a cost of less than one-seventh of one percent of the assessed evaluation.
Clements reported that early in the fiscal year (due to an across the board cut of less than a percent) they lost almost $40,000 and they had to defund an electronic surveillance deputy. He added they had to reduce 40 slots to 15 slots. He said they anticipated the failure of Measure 28 and they had to close the 35-bed intake center and defund the special management unit. He added they had to defund seven correction deputies. He noted the adverse impacts are 300 plus additional unsupervised matrix releases in the year. He said as a result of the November/December cutback, the Sheriff’s Office suffered a loss of $77,000. He noted at that time it was recommended that they close 84 beds starting in April. He said they were able to stall that and carry it through the end of the fiscal year because he had Title 11 and Title III payments from 01/ 02 come into the 02/ 03 year.
3. PHASE TWO – FY 2003-04 Budget Development.
Dave Garnick, Senior Management Anaylst, explained they made reductions in the current year and the direction from the Leadership Team to the Board was to budget the retiree medical, health insurance and PERS but not cost of living adjustments. He said they wanted to control costs. He said they found that the service costs grew by 8% but the revenue only grew by 1.4% and that was the problem. He said with the state funding, the reduction was $612,000 with other funds at $10.9 million for a total of about $11.5 million. He added they still have a general fund gap.
Sorenson asked how much money would be carried by the budget if everything were adopted as proposed.
Garnick responded the policy had been 5% of the discretionary revenue for a prudent person reserve or 3.5% of the total general fund. He said it is about $2.5 to $3 million to carry forward plus whatever lapse the departments might have at the end of this year.
4. PHASE THREE – FY 2003-04 Closing the General Fund Gap.
Karen Artiaco, Management Services, gave an overview on how employee benefits work at Lane County. She noted the mandatory benefits were the ones they had no control over. She added that Social Security, Medicare, Unemployment, Workers Compensation and PERS are part of them. She said they also have negotiated benefits through the bargaining contracts. She noted the largest piece is medical, dental, vision and employee assistance. She added they also have life insurance, short and long term disability, a flexible spending plan and deferred compensation. She indicated they projected a 9% increase in benefits for the 03-04 budget. She thought they would meet the numbers. She added they have retiree medical benefits that apply to certain people She noted in the past they were able to pay that through savings and other benefit programs, but now it needs to be funded as they have over 300 employees.
Van Vactor explained that last year they had an actuary study on PERS. He noted a law passed that caps earnings on employee’s accounts at 8%. He said that PERS had adopted an Administrative Rule with regard to mortality tables. He said there were five or six different bills that were going through the session He added that HB 2003a had received an amendment. He said they figured on 2.43% of rate reduction.
David Suchart, Management Services, said the LCARA reductions consist of two positions that would be lost, a field officer and office assistant. He said they might reduce one field officer and one kennel officer and have a reduction in the amount of cats they bring in. He said in the current budget year he used some reserve funds to fund ongoing operations.
Rob Rockstroh, Health and Human Services, discussed the cuts to his department. He said Lane Care is for Medicaid clients in Lane County. He added it is part of Lane County Mental Health that is an insurance company. He said that next year they would be reducing their budget by $4.4 million. He added internally within Lane County Mental Health they would reduce it by $3.8 million. He noted they have zero dollars in the state for mental health crisis. He stated that Parole and Probation would have an $826,000 cut. He said that Public Health has cuts of $682,000. He noted the Oregon Health Plan has changed. He said that out of 81 clients in the Lane County methadone clinic, 77% lost coverage for the treatment. He added that out of 822 clients, 250 clients lost coverage for Mental Health. He noted that collectively, Health and Human Services is down 47 positions.
Lisa Smith, Department of Youth Services, explained in the Phase One budget structure she met the 4.5% instruction. She said they internally prioritized the services using the Lane County Strategic Plan and the Service Information Sheet. She said they focused on maintaining the core services along a continuum of intervention. She added direct services were given a higher priority over planning and coordination. She stated the reductions were over $150,000 in grant fundings. She added over the past two years they had lost nine staff in anticipation of their grant monies going away. She noted the most notable cut is the elimination of the volunteer coordinator position. She added the position was created in 1994 and was responsible for the recruitment, training and coordination of all the volunteers at DYS. She noted on a yearly basis, this amounted to 125 volunteers and 18,000 hours of volunteer service. She added the position was responsible for the court school coordination, a young women's group in detention and assisted in the overall training development. With regard to Pathways, she said in addition to losing the $250,000 that they would lose $130,000 in federal reimbursement.
Tanya Heaton, Senior Budget Analyst, discussed the process they use to close the gap. She commented they were talking about a gap last fall of about $1.6 million. She said the recommendation included a set of principles on how reductions should be approached. She added it included a series of steps that provide actions that should be taken in making reductions. She said they want to avoid across the board reductions and consider the elimination of entire services before they do incremental cuts. She said they would review criteria, recognize and encourage innovation that reduces general fund use and distinguish those services that are dependent primarily on county discretionary revenue with state revenue. She added that no reduction would be made below a floor that places the safety of citizens or county employees substantially at risk. She noted the initial steps were to use the information sheets. She reviewed the charts. (Copy in file).
Heaton commented that the group overall thought that while the Strategic Plan was a good navigational tool, it wasn’t 100% where they thought it would be. She said there is recognition to go back to look at the Strategic Plan and how it says to prioritize things. She added it didn’t work the way it was expected when it was developed. She said it was hard to use the Strategic Plan to set the priorities to make reductions within 60 days.
Doug Harcleroad, District Attorney, passed out information. (Copy in file). He noted the $24,000 cut was for witness fees from the state. He said it was shifted to the County from the state.. He noted in the past the state would send $7,000 for a deputy district attorney and they are now sending $700. He said he planned for the cuts by having the district attorneys carry more cases. He noted in mid-year an attorney left and he did not fill the position. He added that he closed the education budget in his office. He said he had made cuts and it is reflected in their lapse rate. He said for the 03-04 budget they would receive zero from the state on witness fees. He said they would get $600 for each District Attorney that amounts to $20,000, when they used to get $60,000. He said they are cutting $229,860.
Harcleroad said his total reductions were $350,000 (four lawyer positions). He said the cut is 16% of the lawyer resource for prosecuting criminal cases. He noted it was 8,000 hours of attorney time.. He stated the priorities were felony person crimes, misdemeanor person crimes, assaults, DUI and felony property crimes.
There being no further business, Commissioner Sorenson recessed the meeting at 5:00 p.m.