LANE COUNTY BUDGET

COMMITTEE MEETING

April 30, 2009

6:00 p.m.

Harris Hall Main Floor

APPROVED 5/7/2009

Vice Chair Alice Kaseberg opened the meeting with Budget Committee members present:  Scott Bartlett, Bill Dwyer, Bill Fleenor, Rob Handy, Denis Hijmans, Cindy Land, Peter Sorenson, Faye Stewart and Rose Wilde present.  County Administrator Jeff Spartz, County Counsel Liane Richardson and Recording Secretary Melissa Zimmer were also present.

I. Committee Business

Kaseberg thanked David Crowell for his excellent service as a Budget Committee member.  She introduced Cindy Land as Crowell’s replacement.

Election of Chair and Vice Chair

MOTION: to nominate Alice Kaseberg for Chair of the Budget Committee.

Sorenson MOVED, Hijmans SECONDED.

MOTION: to cast a unanimous ballot for election of the Chair.

Dwyer MOVED, Hijmans SECONDED.

VOTE: Unanimous.

MOTION: to nominate Scott Bartlett for Vice Chair of the Budget Committee.

Handy MOVED, Stewart SECONDED.

MOTION: to cast a unanimous ballot for Scott Bartlett for Vice Chair of the Budget Committee.

Dwyer MOVED, Hijmans SECONDED.

VOTE: Unanimous.

Minutes of April 14, 2009

MOTION: to approve the minutes of April 14, 2009.

Fleenor MOVED, Stewart SECONDED.

VOTE: Unanimous.

Committee Process

Kaseberg discussed the proposed schedule.  She asked if there were any amendments to the schedule.

Bartlett noted on May 14 the Sheriff has 25 minutes.  He asked if they could do a minor adjustment on May 7 to counterbalance so Health and Human Services would be given 25 minutes and they would take ten minutes out of the two hour discussion.  Bartlett spoke with Rob Rockstroh, Health and Human Services, and Rockstroh thought that given the enormity of his scope, 25 minutes would be more effectively used than 15 minutes for the presentation. 

MOTION: to add 10 minutes to Health and Human Services on May 7.

Bartlett MOVED, Sorenson SECONDED.

Richardson mentioned to Kaseberg that her concern with how short the presentations are for the various departments, is that in times of cutting funds, they will be cutting services and it means making difficult choices about what is going to be funded and what is not and how it impacts the citizens.  She said in order to have defenses in those decisions, the committee needs to hear the ramifications.  She said by adding another question about what they are asking the departments, (and giving them more time to address the question about what they see as impacts), they could defend the committee’s decisions.

Sorenson thought what Bartlett suggested was a good change.  He thought it was important that in this difficult time the departments make presentations in the timelines they have set out in the main schedule.  He said they need to hear from departments specifically on issues related to the concerns.  He said there are situations where the amount of  money they have available from federal, state and local funds is not enough to perform the duties.  He added that they want the departments in their presentations to highlight that fact so when the Budget Committee is forced to make the tradeoffs, they have the necessary record.

Fleenor commented that there shouldn’t be an assumption that they are going to be cutting the budget.  He thought they still had discretionary immunity during the presentation and when they discuss major budget cuts, they could bring back a department head to ask about ramifications that would give them discretionary immunity.

Richardson said they need to talk about the specifics of the ramifications of a decision in order to use the defense.  She said because of the amount of funds they have, there is an assumption there will be budgets cut at some point.   She said if the committee wanted to wait until that stage and bring back the departments they are looking to make the cuts, it would be another way to have that discussion.  She wanted to make sure they had enough time to do that in the schedule.

Handy said there are needs in the community and in the departments.  He said they need time as a Budget Committee to not only assess all of the ramifications and the challenges before them, but in the middle of the process they will get the news from the state about the May forecast.  He said the format is giving them time to have important discussions.

Wilde didn’t want to add ten minutes to each department.

VOTE: Unanimous.

MOTION: to add ten minutes to the Sheriff’s Office for the appropriate balance for May 14.

Fleenor MOVED, Sorenson SECONDED  

Dwyer said he voted for the other motion because he wanted to create a balance.  

Fleenor explained that the first motion was not clearly articulated.  He didn’t hear Bartlett’s comments about trying to balance.  He commented that the District Attorney’s Office and Sheriff are separate entities paid by different funds.  He thought the Sheriff’s Office should be given the benefit of an equal hearing.

VOTE: Unanimous.

VOTE: to agree with the entire schedule as presented with the changes.

Fleenor MOVED, Sorenson SECONDED.

VOTE: Unanimous.

Bartlett commented that this was a departure from past budgets.  He hoped this would not be a template for the future.  He wanted to see how this works out for one year.

Kaseberg said they need to address the consequences on department programs, potential cuts and their affects on the community and the departments.  She commented that the Budget Committee should be prepared to discuss that.

Hijmans recommended that the new members visit the department directors so they don’t have to take committee time to ask questions.  He thought they would be well received.

II. Budget Message

Spartz gave his Budget Message for the 2009/2010 Budget. (Copy in file).

Hijmans asked if Spartz included the proposed cuts from the state in the budget.

Spartz said they can’t yet figure in the cuts.  He added that severe state cuts will shorten both the proposed and alternate budget timeframe.

Hijmans thought that cuts will be significant as they look at the years of stabilization.

III. Budget Overview

Dave Garnick, Budget Financial Manager, gave a presentation on the FY 09-10 Lane County Operating Budget Overview. (Copy in file).  He indicated the total budget for the current year is $534.6 million.  He said next year it will be about $513.4 million.  He said the overall budget will go down about $21.2 million or 4 percent.  He added the number of positions will be going up because the reductions are taking place in one fund and the adds are taking place in another fund. 

Garnick reported that the state budget cuts are proposed to be about a $4.4 billion.  He indicated that the legislature is waiting for the May 15 Economic Forecast before they make any final decisions.  He indicated that the legislature expects to apply some of the federal stimulus money to cover between $1 billion and $2 billion and they will be able to offset some of their deficit.  He said counties are expected to take a large share of the reductions. He noted that the state was discussing reducing video lottery funding and the County would have less money to try to create other job opportunities in the community.

With regard to the general fund, Garnick reported the current year has about $100.4 million and next year it will be about $103 million.  He added the FTE will increase about 34.9 percent.  He said the increase is due to the proposed add packages that are in the proposed budget.  He indicated that they are continuing to spend down the reserves and as they go forward and the timber money declines, they are spending more cash and when the money is spent out, they will get back to the structural deficit.

Garnick explained that the Discretionary General Fund Budget has the only unrestricted revenues the Budget Committee has to spend.  He indicated that there are no strings attached by the state or federal government or any grantors.  He said that funding is going from $70.9 million to $74.8 million.  He indicated that the biggest increase is with cash because they are carrying forward a large amount of revenue from this current year.  He noted that out of the whole proposed budget of $513 million, 14.5 percent is the only portion the Budget Committee has to work with because the other money is either restricted or used for a specific purpose.   He added that the general fund is about 20 percent of the budget or 5.5 percent are grants, contracts and program fees.

Garnick discussed that one time revenue is difficult to use for ongoing programs. He added that it is not renewable.  He said public safety is receiving 55 percent and is down about 1.6 percent from the current year.  He added that they are receiving the largest share of the discretionary money. He indicated that they have the ten percent prudent person reserve and an additional service stabilization reserve that they will be using to try to maintain services for the next few years.  He noted there is a spending limit with the Discretionary General Fund that was built into the Lane County Charter and approved in 1985. It says that the Discretionary General Fund can only be adjusted annually by the change in inflation and the change in the population.  He reported that if the revenues were coming in, they would have a way of guiding the budget.  He said the reality is they have not been able to spend up to what the voters would have allowed them to spend since 1992.  He reported there will be a funding gap for FY 09/10 proposed of $11.6 million

Garnick noted the general fund service adds in the proposed budget include $3.3 million to re-open 84 beds at the jail in the Sheriff’s Office.  He added there is $446,438 added for continued prosecution of non-violent felonies in the District Attorney’s office of five positions.  He noted in Health and Human Services there is about $310,000 for various services including communicable disease and at risk children.  With regard to Youth Services, he said they previously had a contract and they were using state courthouse security money to pay for a security station at the Juvenile Justice Center building at the Serbu campus.  He said that funding is declining and they are losing the person manning the station.  He indicated that they are requesting $50,000 for building security and it is included in the budget.  He noted for Children and Families there is another $33,465 for a resource development position.  He added they have a half-time position and this would bring it up to full-time.  He indicated that other departments will be bringing other requests that are not included.

Garnick reported that there is more uncertain than stability  because the proposed budget will provide approximately three years of stability through 2011/2012 without factoring in the state budget cuts or what the impacts will be on County services.  He added that they might not know until June at the earliest.

Fleenor asked what a structural deficit of about three to four percent is in actual dollars.

Garnick responded that the general fund analysis section shows about $1.2 million every year, which is what they have been cutting for many years.  He said it has been about three percent for the general fund portion across all departments.

IV. Property Tax Revenue Overview

Anette Spickard, Assessor, clarified a comment in the Budget Message.  She said there was a reference there was a bill pending in the legislature to eliminate all of the state aid that currently supports the Assessment and Taxation function.  She explained that there is a fund in the state budget that contributes to each County to support their operations.  She noted the portion being proposed for elimination is $5 million per biennium, a contribution from the state’s general fund.  She said the balance of the A & T funding grant (called CAFFA) comes from recording fees and delinquent interest.  She said it was not the entire grant going away, they were proposing an elimination of a small piece.  She gave a power point presentation.  (Copy in file).

Spickard reported that as of January 1, 2008, the county was worth $44.3 billion in terms of real market value.  She said under the property tax limitation under Measure 50, only $24.5 billion is taxable.  She explained the Lane County levy of $1.27 per thousand is applied to the $24.5 billion.  She said they have over 170,000 accounts in Lane County, with residential properties paying the bulk of the taxes.  She indicated they collect taxes for 82 districts

Spickard explained with Measure 50 most properties in the County will only see a three percent in maximum assessed value.  She said they could add that value if there is no construction or change in use.  She noted in 2007, 68 percent of the properties were taxed only with the three percent change and now that is 75.6 percent, meaning larger portions of the property are not having any changes, allowing them to add taxable value.  She commented that a projection of three percent of tax revenue to the County would be a best case scenario.  She noted that they are currently working on January 1, 2009 values based on everything that happened in calendar year 2008.  She added that anything that has happened since January 1, 2009 will not be reflected in this year. She reported that they are seeing residential values in some  places dropping ten percent in 2008, but Lane County has not had the dramatic fluctuations like Bend and Medford.  She expected that they will have more property tax appeals.  She indicated that whenever voters approve a new levy or a bond levy, they add it to the tax statement as a new tax and it causes taxes to go up.

Spickard reported that they are seeing all factors of the manufacturing industry suffering.  She said there have been closures and bankruptcies in a broad variety of sectors.  She said in talking with the Department of Revenue, they are responsible for appraising the properties and Lane County takes care of the land value but the state does the actual improvements.  She said they are looking at reductions to values in the 20 percent to 40 percent range. 

Spickard stated that up until February, their collection rates where holding steady.  She said they are off one-half a percent from this time last year.  She indicated that they have already collected about $347 million of the $379 million that is owed.  She said their bankruptcy filings are up about double from last year and they received the bankruptcy paperwork from Monaco and they owe almost $600,000 in taxes.  She said Lane County will receive 9 percent, but once they go into bankruptcy, she is not allowed to actively try to collect the money.  She indicated that they disqualified Hynix from the West Eugene Enterprise Zone and the amount of the tax penalty they currently owe is $5.4 million, due in November along with their regular property tax for 2009.  She commented that the economy is continuing to be slow and they have historically lagged the country in recovery.  She added the high unemployment rate will affect the ability of people to buy houses and the residential market will be hurting.  She said after they have their last deadline in May to collect the balance of tax that is due for the current year, they will have a better view on delinquencies and potential foreclosure problems.

Fleenor asked if a multi-year serial levy was passed when there was no compression, what happens to the serial levy that might be in compression now.

Spickard responded that they are now called local option levies.  She said the local option levy has second position in terms of compression.  She said any local option levy that is on an account, (if the account is in compression) she has to reduce the tax in order to get it under the $15 maximum.  She added that the first levy she eliminates is the local option levy.  She added if there is anything left over to reduce, it is pro rata to everyone else. 

Bartlett hoped Spickard will keep putting dog license information in the tax bills.

Handy asked if they were missing any opportunities at the County or state level to have an equitable distribution of timber lands.

Spickard explained that the state legislature set the formulas for how industrial or private timberlands are taxed and each year they go through a process to set the per acre values that are under the special assessment for timber lands.  She stated they were open for public comment and take comment on whether that should be adjusted.  She said by June 1 they have to send it to all the counties so they can assign the acreage values.  She indicated they are assessing property tax against the land only, not the timber.  She added the state has a separate program for the timber tax on the actual logs.

V. Performance Management

Jennifer Inman, Budget Analyst, recalled that when the County last adopted a Strategic Plan in 2000, one of the core strategies was to implement a countywide performance measurement practice.  She indicated that all departments of the County use program data in some form.  She indicated that the goals were about improving accountability, efficiency, credibility and trust among the departments with the service providers, elected officials and with the community and the outcomes.  She said they measure the outcomes of the programs and services.  She added they use indicator measures that give them an idea and actionable data that help them do program management.  She indicated that the Board had not returned to strategic planning, or identified enterprise-wide measures.  She said they have over 900 measures and metrics that are used at a program and operational level.  She stated that they look at program outcomes, efficiencies, key outputs from the program, other key information and indicators that help them plan for service delivery and resource allocation.  She indicated that they also measure financial and efficiency measures.

Inman reported that they keep track of a lot of data that they don’t have control over.  She said unless they keep track on what is going on, they can’t plan for and allocate resources wisely.  She said they have to see how the trends are over times.  She indicated that they purchased a tool called Performance Views to bring together performance measures and improve their ability to use the results of the measures and analyze them over time, to create consistency and reliability.

VI. Public Hearing

Chair Kaseberg opened the Public Hearing.

Steve Dodrill, Director, OSU Extension Service, Eugene, asked the Budget Committee to consider renewing their rent forgiveness for another year and to make a one-time bridge investment of $244,000 to help the OSU Extension Service achieve financial self-sufficiency in the coming year.  He recalled that over the past year the OSU Extension Service in Lane County has been working to build a diversified portfolio of local funding sources including fees, grants and anything else they can find to try to keep programs like 4H Youth Program, the Master Gardeners and Master Food Preservers alive.  He commented that the recession has undercut them this year and the OSU Extension Service will look different.  He said they are preparing that they might have to go with some of their programs to a virtual extension office.  He explained that Lane County residents would have to access their programs via the Internet.  He added that they might have campus or regional faculty who would occasionally come into the County to supplemental the on-line learning. He said except for the nutrition program that is federally funded, almost all programs might have to go virtual.   He said their goal is to maintain a local Extension office. He commented that they think the strength of their educational programs is having faculty, staff and volunteers in Lane County.  He believed with the $244,000 investment they could secure the diversified portfolio of funding sources they need to become self-sufficient financially in Lane County.  He added that they would not have to be part of the general fund and they could start making rent payments during budget year 2010/2011.

Paisley Makinson, Eugene, stated she was in her sixth year of the 4H Club.  She commented that the Extension Service has been around for 95 years and they are in trouble.  She said she was gong to do everything she could to keep the Extension Service.  She didn’t know how such a part of Lane County’s history could be in jeopardy. She said the Extension Service needs everyone’s support.  She wanted to make the best better for everyone.

Hal Reed, Eugene, stated he was in support of public safety.  He believed the first priority of government is to provide for public safety, to keep citizens properly protected.  He said to do otherwise was irresponsible.  He said they don’t have enough tax base to properly fund everything that needs to be funded.  He thought the Board should make the priority for the budget public safety.  He added that all the other services that might need to be provided should be put out to the voters to see if the public wants to pay for it.  He stated that public safety should be the Budget Committee’s first responsibility.  He asked the committee to think outside the box.  He asked to give a group of people time enough to come up with other proposals and put them on the ballot to see if people want to pay for them.

Carol McBrien, Eugene, said she was the past president of Lane County Master Gardeners.  She was happy to see that the Board was planning on giving rent forgiveness to the Extension Service.  She urged the Board to provide $240,000 in bridge funding being requested by the Extension Service.

Carol Berg Caldwell, Eugene, said she asked at a previous Budget Committee meeting if there was data about the duration of inmate stays at the jail and crime stats.  She understood the data had not yet been provided. She asked the committee to request it.  She said the media is stating there are dangerous felons being released early.  She thought the Budget Committee wanted the whole picture.  She indicated that homeless people return to the jail, admitting they commit crime to secure a warm bed and food.  She said if groundless arrests weren’t occurring, the jail would be less crowded. She supports jail sanctions.  She wished the jail could get the financial support to do the work they do.  She hoped the community would get behind a voluntary donor fund drive, given people the option to pick and choose which public safety crime prevention program to contribute to.  She supports a portion of the timber revenue going to the Sheriff’s Department, not the lion’s share again.  She added there are other critical needs largely due to mounting joblessness and home foreclosures.

Charles Moss, Eugene, commented that there was no foresight in growth.  He sees a lack of growth in the County with the inability to grow.    He noted there are natural resources but that the Board didn’t want to use them.  He stated he was in favor of public safety and wanted to see an increase in public safety, as it is the Board’s main responsibility according to the Constitution and the laws of the country.  He wants to see meaningful services they deserve and want.  He also supported the District Attorney.

David Hoffman, Eugene, stated that food comes first.  He commented that if people weren’t starving and not desperate for food that there wouldn’t be crimes.  He asked the Board to save the food supply and the Extension Service.

Linda Trujillo, Eugene, stated that she was looking forward to taking Master Gardener classes.  She said there is an opportunity to raise food and it could lower fossil fuel miles.  She said that people need pride and the Extension Service could help.

Dr. Jerry Boggs, Eugene, stated he is a practicing Veterinarian and is active with the LCAS Advisory Committee.  He encouraged the Board’s support for funding for LCAS.  He reported that he had seen improvement with LCAS’ image the past 18 months due to the decreased number of euthanasias.  He added that there has been an increase in the number of volunteers because of the increased image LCAS has.  He sees LCAS and the community at a critical time associated with funding.  He thought they were at a position that is critical with the energy to make all of it work.  He commented that funding becomes an issue to try to continue to make the positive efforts they have done so far.  He encouraged the Board to support funding for medical and behavior issues that LCAS still has to deal with.  He commented that LCAS still has far to go to become the premier society that it can become if given the efforts.  He indicated that there is excellent leadership and thought with proper funding, that it could continue to happen.

Karren Cholewinwski, Eugene, said the OSU Extension Services engages the people with research based knowledge and education on strengthening communities and promoting healthy families and individuals.  She said keeping the OSU Extension Service open and available to every County resident is the best investment the committee could make in Lane County.  She stated the OSU Extension Service has been delivering relevant researched based knowledge through education programs for over 95 years. She asked the committee for one more year of rent forgiveness.  She hoped the Extension Service can be around for the next 95 years.

Fred Hamlin, Eugene, supported public safety funding.  He recalled he moved to Eugene in 1954 and public safety was the number one issue at that point in time. He said at that time 70 percent of the discretionary general fund went to public safety.  He heard that it is now down to 55 percent.  He said the quality of life in Lane County is going in the opposite direction.  He said he had witnessed the frustration the citizens of Lane County are exhibiting.  He said they need to stop the revolving door in the jail and put the quality of life back into Lane County.  He hoped the committee will fund public safety to the maximum and give consideration for opening 84 beds.

There being no one else signed up to speak, Chair Kaseberg closed the Public Hearing.

Kaseberg indicated the discussion topics she received include OSU Extension request:  is there more information about how this money will bridge to new funding in 2010/2011.  She thought that could be answered by e-mail.  Another question was how much has LCAS collected in revenue in 08 compared to 07 and projected in 09.  How many people in Lane County are officially hungry and how many people get federal food stamps and what the County’s role is in helping people without food.  A question was what is the unemployment number for Lane County for March 09 and when was the last month and year the Lane County unemployment rate was this high.  For the proposed 84 beds to be added, what is the cost of the 84 beds per year.  Kaseberg noted it was $3.2 million.

Kaseberg asked if the Budget Committee wanted stability, what amount of dollars would have to be cut this year and what is the percent reduction in the general fund that is required. Another question was does the County maintain data on volunteers such as the number of volunteers by program area, the number of volunteer hours and the staff time expended to recruit, train and manage volunteers.

Inman said she would get the answers in writing for next week.

Kaseberg asked to what date they should plan stable provision of service as a general round robin to give input.  She asked how they deal with the factors that they might never know about.

Fleenor said they are struggling with risk analysis and risk management and uncertainty as they move forward. He said they have an unusual situation in the country, state and County that is unfolding, that they have never seen before. He said as they move forward as a Budget Committee, they need to discuss uncertainty and how are they going to deal with this in the bigger picture. He asked to look at risk management by having reserves or by looking at risk management by adding back programs that will reduce the exposure to crime and other public safety issues.  He said they have to be balanced.

Chair Kaseberg adjourned the meeting at 9:05 p.m.

Melissa Zimmer

Recording Secretary