BUDGET COMMITTEE MEETING
May 6, 2004
Commissioners' Conference Room
Chair David Crowell presided with Budget Committee members Scott Bartlett, Bobby Green, Sr., Don Hampton, Mary Ann Holser, Kathy Keable, Anna Morrison and Peter Sorenson present. Bill Dwyer and Francisca Johnson were excused. County Administrator, Bill Van Vactor, County Counsel Teresa Wilson, Senior Budget Analyst David Garnick, and Recording Secretary Melissa Zimmer were also present.
1. Call to Order
Chair David Crowell called the meeting to order.
2. Committee Business
Approval of Lane County Budget Committee Minutes:
April 27, 2004, 5:15 p.m.
MOTION: to approve the minutes of April 27, 2004.
Morrison MOVED, Sorenson SECONDED.
VOTE: 6-0 (Keable out of room).
Sorenson was concerned about the absences of the Budget Committee members. He said some Committee members stated they heard the presentations before and didn’t think they needed to be present.
Van Vactor stated they had only heard from four departments. He was concerned about the other departments and the Budget Committee not giving their full attention.
Sorenson said they weren’t given the opportunity to deliberate.
Green thought it was an equity issue and that all departments should have the opportunity to give a presentation.
Holser wanted to hear from all departments.
Scott Bartlett arrived at 5:25 p.m.
Keable appreciated the time and effort that went into the presentations. She said it was essential for her to hear all the presentations. She suggested possibly changing the presentations for next year but thought that for the remainder of the meetings that all departments should be heard.
Bartlett asked about the relevance of a subcommittee.
Wilson responded the purpose of a subcommittee of the Budget Committee is to have a legally constituted meeting and to continue to deliberate.
3. Board of Commissioners/County Administration Budget
Van Vactor explained the direction that local government is seeking is outcomes. He noted that Lane County remains an accessible and effective local governing body. He said the Board of Commissioners meet weekly and there is public comment at every meeting. He added that all agenda materials are now available on the web. He indicated they produce about 125 sets of minutes per year. He added they are on Metro Television and in the past few months the meetings have been available over the Internet. He indicated that the Board has 38 advisory committees and other task forces.
Van Vactor said that Lane County government is accountable to its citizens for expenditure of its money. He said they have a Finance and Audit Committee that reviews in detail all of Lane County's financial practices and reports. He added the Finance and Audit Committee works with the internal auditor looking for efficiencies. He reported that as soon as the Budget is ready, it goes on the web and is available all year long.
Van Vactor noted the budget for 03/04 was taken from the Strategic Plan and for the 04/05 budget, the Board had a goal setting. The result was that Lane County would remain a general-purpose government and that there would be no new property taxes. He indicated that a key component of their financial plan is that it is a critical planning tool.
Van Vactor reported that Lane County will maximize revenue from the federal and state governments and enhance efficient service delivery at the local level. He said they are working on the Secure Rural Schools and defending County funding from the state government. He noted on the local level they have a successful urban transition program.
Van Vactor stated they work hard to maintain the Economic Development program. He said they allocate funds for strategic economic investments. He stated the Board had defined economic development in Lane Manual 4.100 as a program or group of policies that seeks to improve the economic well being of the community. He said the funds are split into two categories, a maximum of 50% to the general allocation and the remaining 50% to the strategic investment.
With regard to reductions, Van Vactor explained they took everything they could out of materials and services. He noted they contracted with Benton County for the services of the public information officer to generate revenue. He recalled that last year they lost an analyst and it wasn’t appropriate to continue to look in the analyst positions for reductions. He said they looked in the area of the Document Resource Center. He added the Board took a nine percent share of the reduction. He said they had a target of general fund loss of $35,000, but in adding all the factors, they ended up cutting $113,000.
Van Vactor reported that the Public Safety Coordinating Council has been assumed by County Administration and they absorbed it within their existing workload. He added they are managing the cable franchise along with the metro and rural franchise. He said they are also working to renew the Secure Rural Schools. He said the auditor was concerned about the form of governance as the Workforce Partnership does not match state and federal law. He said that might have to be changed. He noted the biggest task is to provide analytical support to address the structural deficit.
With regard to leverage, Van Vactor indicated that Lane County has an aggressive indirect plan that is approved by the federal government, but the intent of the plan is to charge as much as they can to recover the full cost of their services for all funds. He noted the net effect is County Administration and the Board of Commissioners only cost the general fund 42 cents on every dollar they spend and minimize the cost for support services.
Green said if they are not going out for additional revenue, then this is what the citizens are willing to afford.
4. County Counsel
Wilson reported that County Counsel has the Legal Services Division and the Law Library. She explained that the Legal Services Division provides legal advice to the Board and the departments. She noted the major project this past year had been the HIPPA project. She said they had delivered a deed to the National Guard and Lane County is now the owner of the site. She added the National Guard is now leasing the building from Lane County. She indicated the Strategic Plan describes support services as being an element that should be kept in proportion to the direct service. She said it describes the most essential service. She noted under the most essential services, it describes reduced risk of loss to the organization, fiscal management and provides direct support to the Board of Commissioners. She indicated they try to avoid a mistake that will cause a loss to the organization.
Wilson explained the second piece of County Counsel is the litigation service, which is an essential service. She stated that Lane County is self-insured and handles not only all the litigation filed against the County, but also the litigation in which the County sues someone else. She indicated the number of claims was not significantly increasing over recent years. She noted what had increased was the amounts paid out. She stated what has been paid out so far this year was $241,000. She added that in that figure were two significant personal injury cases: one was settled at $75,000 and the other was a verdict that came in and they paid $70,000. She commented that the increase in claims is a trend they should pay attention to.
With regard to the budget, Wilson stated County Counsel was smaller than County Administration and less than 0.2 of one percent of the total County budget. She said they are one of the smallest legal counsel offices. She noted the five attorneys they have in Lane County are carrying the responsibility of 306 county employees. She added it is the highest rated of comparative counties. She noted it is county employees who do all of the work of the County and it is the employees who need legal advice to avoid making mistakes. She noted that Lane County is running a higher risk of loss than other counties. Wilson explained that County Counsel took cuts without laying off a staff person. She commented that they are currently at a bare bones existence.
With regard to the Law Library, Wilson explained that it provides legal reference materials available to attorneys, litigants and to the general public. She noted filing fees from civil cases filed in the courts fund it. She noted there was a retirement and a new employee in the Law Library. She added the position is now three-quarter time. She added they made some reductions in the book budget because they anticipate a significant revenue drop as a result of Measure 30. She said they are looking into providing an electronic research resource in the Law Library for patrons. She hoped they could do it at about $6,000 per year.
5. General Expense
Tanya Heaton, Senior Budget Analyst, indicated there are 13 different funds. She noted they worked the nine percent reduction in the general fund portion of general expense. She indicated the total budget is $81 million and about 20% of the County’s total budget. She discussed a chart about Lane County’s debt. (Copy in file.)
6. General Fund
Heaton explained the general fund general expense was required to have a nine percent reduction. She said they had an old adjustment of $200,000 from last year that was an add back. She added that all services took a nine percent reduction. With regard to the LCOG dues, she noted $34,000 comes out of general expense and goes to video lottery funds. She said that gives the general fund $500,000. She noted there is now $113,000 of General Fund 020 dues and they have $54,000 for Fund 010. She said it gives them $167,000 in memberships and dues, which is a $51,000 savings. She discussed the special services projects. (Copy in file.)
Heaton noted there is an eight percent room tax in Lane County. She said out of that a 5% tax is imposed for capital improvement and a 3% tax for visitor industry. She passed out a sheet describing the charges. (Copy in file.) She said they have $2.8 million in transient room tax. She said it is split with the majority going to capital for the Florence Events Center, to the indirect, the fairgrounds bond and capital, and $308 to the reserve. She noted those monies are imposed through Lane Code and the Budget Committee can discuss changes to these, subject to the new state law. She added Lane County receives around $1 million in car rental tax, with 76% going to Parks operation and 24% going to the general fund.
7. Information Services
Tony Black, Information Services, indicated their budget had changed. He said between February and now, the Board approved the IS Department with the internal services fund model, to report and bill on real time actual work. He indicated the goal this year is to identify what they do and where they spend the money. He described that information. (Copy in file.)
With regard to reductions, Black explained they have come from materials and services from the general fund. He said last year to get to a reduction of $143,000, they took $300,000 worth of cuts. He added to get to a level of $234,000 this year, they took almost $500,000. He indicated he was not sustainable at a training level with what he has.
Black noted that in July they would be starting a real time billing system. He said they would determine the actuals at the end of July and bill out in August. He stated the biggest challenge is in capitalizing new projects. He said there are countywide projects that have been taken off but might be added back. He added there is no one available for new projects. He commented if there was a project for new development, they would have to contract it out.
With regard to comparables with Clackamas, Marion and Washington counties, Black indicated Lane County is at 45 FTE, Clackamas has 51 FTE, Marion County has 52 FTE and Washington County is at 55 FTE. He said with regard to budgets, Clackamas is over $10 million and Marion County is the closest to Lane County with $7.2 million.
Francisca Johnson arrived at 7:25 p.m.
8. Regional Investment Systems
Paul White, RIS, passed out information on his department. (Copy in file.) He noted RIS services are primarily focused at the individual IS level of local government. He said they operate a data center in the Public Service Building that is shared by Lane County, the City of Eugene, LCOG, AIRS, Regional GIS System and the telephone PBX system. He added this is the central location for all of the optical fiber that local government uses. He said they keep e-mail flowing through agencies and support e-mail at a system level. He added they also handle first level virus protection. He noted their largest customer is the City of Eugene and their second largest is Lane County.
With regard to saving money, White said they save by operating systems that save the County money and they have gone through budget reductions by coordinating with other agencies, which reduces the cost of labor. He added they bring economy of scale and reduced duplication and they are able to do things less expensively. He said they have an organization with three groups where they could have people on call for 24 hours per day because they have enough people working together providing the service.
Lisa Smith indicated that they pay $400,000 per year toward indirect for central support functions. He said they are starting off with one FTE reduction. He said that would bring them up to a staffing level of 36 FTE. He added they have 4 FTE through half of the fiscal year and as their plans work out, there will be half-time support in the data center and they would be using on-call staff to deal with problems as they arise. He added they are working toward an additional $50,000 budget savings during the fiscal year.
Smith stated the largest challenge they are facing is the AIRS conversion project. He explained the project is to replace 35 years of law enforcement and public safety systems. He said they are going to have to figure out funding methods. He noted one opportunity is to outsource the mainframe to Salem without paying the state for what it would have cost to keep the mainframe in Eugene. He said that is the reason they can go to unattended operations.
9. Management Services
David Suchart, Management Services, said Management Services includes internal services to all Lane County departments and direct services to citizens. He noted the base function of the department is management and protection of public assets including human capital and physical infrastructure. He explained that in the past year they have completed infrastructure projects in the jail and the public service building. He noted they are 95% complete in the Sheriff’s Dispatch Center. He added they have started remodeling the new elections building. He noted the top priority is replacement of the Lane County annex building and development of a new public health facility.
Dan Banducci, Building Facilities Manager, explained they worked hard to stay in the budgetary guidelines. He noted that last year they initiated a maintenance management system that changed the way they do business. He said it reduced the cost of paperwork and increased the amount of time to process work orders and created a database. He said they expect more savings as they continue to make adjustments and improvements to the system. He said they are working on consolidating similar services. He said with the new elections building coming on in August, they would add 18,000 square feet of maintainable space. He said they have to keep up the building with one less custodian and one lesser trained mechanic. He added the custodial staff has been downsized to seven people. He said with less staff they would still have 12 buildings to maintain mechanically and close to 375,000 square feet of cleaning space. He noted the increased utility cost had been a significant impact to the County budget. He added the volatility of the energy market makes it difficult to forecast. He said they anticipate an eight percent price increase for the years 04/05 or $80,000 to their utility bill. He said their objective is to maintain a high level of service, protect County and stay within their economic constraints.
Becky Koble, Financial Services, explained that historically Lane County had contracted out with external auditors to produce the financial statements and to also audit them. She indicated that this year for the first time, Financial Services staff produced and published in-house a comprehensive annual financial report for Lane County. She said the County’s CAFR has been submitted to the Government Finance Officers Association Prestigious Award Program for a certificate of excellence for financial reporting. She added the external auditor fee has gone from $145,000 to $80,000 for Fiscal Year 03 for the financial audit. She noted they were in negotiations with Moss Adams for a contract as the County’s new external auditors. She noted a challenge they are facing into the new fiscal year would be adjusting their level of service to the one remaining staff resource in the accounts payable function. She indicated this function was reduced from 2.5 FTE to 1 FTE responsible for the annual processing of over 53,000 vouchers for payment of County goods and services.
Annette Newingham, County Clerk, Elections, reported their recordings have made large increases in revenue over the years. She said they have taken advantage of technology to do a lot of the work. She indicated that Elections has been increasing in registration. She reported that the optical scan was a success. She stated that last month they processed over 5,150 registration cards and over 1,000 miscellaneous pieces. She noted they are in the process of a centralized voter registration system and will be going to a statewide voter registration system where Lane County is a pilot.
Greta Utecht, Human Resources Manager, reported she was unable to get any information from Clackamas County as a comparison but the number of employees per FTE in Clackamas is 62 FTE, Marion County has 65 FTE, Lane County has 81 FTE and Washington County has 113 FTE. She noted the main difference between Lane and Washington County is that they have fewer labor unions and fewer people in the unions and they contract out most of their negotiations. She stated that 70% of the employee base in Washington County is non-represented compared to 15% in Lane County. She said it makes a difference in negotiations and grievance management. She added that Washington County contracts out other functions that Lane County doesn’t. She commented that in general, Lane County employees are cost effective. She indicated the average age and years of service of employees is higher than other counties and it is a major issue in managing the benefit costs.
Utecht explained that the update of the Diversity Implementation Plan is one of their major goals. She said they have to have higher visibility and use more innovative recruitment strategies for employees of all backgrounds. It continues to be a major challenge. She said that benefit costs are continuing to increase. She noted they have a different plan for each employee group they manage, and major claims are at an all time high. She noted that no raises were given last year to employees and the same might take place this year. She reported they are facing layoffs.
Green requested more information on the number of vacancies that had not been filled that could possibly translate into positions.
Mike Wellington, LCARA, indicated in the animal control industry it is hard to compare with other counties because of different budgets, laws and services. He said that revenues need to be allocated wisely. He said their current staff is at 13 FTE and with proposed staff they will be cut to 11.75. He said the 04/05 cuts would eliminate 1.25 county positions for a reduction of $72,207. He said in the past year animal bites had increased 11% and neglect and abuse investigations have increased 50%. He said at this point the County only allocates one officer to the county. Wellington said they been going out and doing investigations that pulls them away from their duties. He noted in 2001 the County implemented its Strategic Plan and LCARA has been using the plan for the current future development of the agency. He stated the main goal of LCARA is to ensure the safety and health of the animals and the people who live, work and visit the community. He said they are looking for citizen participation, revenue development and service improvement through reorganizational opportunities.
He noted on June 2 the license fee increases will be presented to the Board of Commissioners and if they are approved, they will submit a technical budget adjustment to be put into LCARA’s estimated revenue for the 05 budget. He noted the estimated amount is $30,000 and is a minimal estimate. He asked the Committee to support funding from the discretionary fund in the amount of $15,342. He said the priority of the funding is the restoration of the .25 position. He added funding the County’s portion would re-open the full cattery service and add back service hours to LCARA’s public counter. He said it would increase the ability to free up an officer who is doing kennel duties to work between the County and the City of Eugene. He noted the City of Eugene would be willing to support a kennel attendant position that is a lower paid position. He said for the $15,000 they would be getting two more employees, more enforcement into the County and they are open for more hours for the citizens.
Garnick passed out information from Health and Human Services and the District Attorney for next Tuesday.
Adjourned at 9:05 p.m.