Central Oregon Intergovernmental CouncilBudget Committee Minutes

June 1, 2017

City of Redmond – Public Works Department243 E. Antler Avenue

Redmond, OR

Budget Committee Members: Jerry Brummer, Crook County; Tony DeBone, Deschutes County; and Wayne Fording, Jefferson County. At-large members John Boylen representing loan activities, Mike Daly representing employment and training activities, and Joe Krenowicz representing economic development activities.

COIC Staff: Karen Friend, Executive Director; Michelle Williams, Fiscal Services Administrator, and Debbi Bracken, Interim Executive Assistant.

The meeting was called to order at 3:40 p.m.

Election of OfficersTony Debone moved to nominate John Boylen as Budget Committee chair. The motion was seconded by Mr. Fording. The motion unanimously carried.

Chair Mr. Boylen moved to nominate Tony Debone as Secretary. The motion was seconded by Mr. Brummer. The motion carried unanimously.

Approval of the MinutesChair Boylen moved to approve the COIC Budget Committee Minutes of June 2, 2016 as presented. Mr. Brummer seconded the motion. The motion carried unanimously.

Budget MessageMs. Friend reviewed with the budget committee the contents of the budget book, describing each of the sections and detailed information included in the book.

Ms. Williams reviewed the budget message, she informed the committee: The 2017-18 budget represented a 6% decrease from prior year. For 2017-18 the general fund budgeted

revenues and expenditures are $22.3 million compared to$ 23.7 million for 2016-17. Transportation department 2017-18 revenue is $14.4 million compared to the 2016-17 revenue of $15.2,

reflecting a 5% decrease, primarily due to the decrease in ODOT funding and Special Transportation Funds.

Community and Economic Development department will have a slight decrease in revenues for 2017-18, with a budget of $1.1 million, compared to $1.2 million in 2016-17; a 7% decrease and represents $94,000. The decrease is primarily due to a grant from ODOT to update the Coordinated Human Services plan which will be ending.

The Employment & Training Department revenue for 17/18 is budgeted at $3.5 million, compared to $5.5 million in 2016-17; representing a 36% decrease. This decrease is due to funding cuts to the Adult Employment & Training program from the Department of Human Services, Workforce Investment Board and several National Emergency Grants that expire at the end of this fiscal year, and, for the first time in approximately 20 years, are not projected to be renewed. Also COIC is transitioning out of Region 11, Klamath and Lake Counties, effective August 31, 2017 thus; current year budget only represents two months of expenditures.

Approved by the COIC Budget Committee 6-7-18

PERSONNEL SERVICESMs. Williams reviewed the personnel services budget and assumptions. She noted that with the decrease in projected funding for 2017/18, and COIC discontinuing services in Region 11, the projected FTE will decrease from 133.92 to 113.94; a decrease in projected budgeted personal services from prior year to current year of 15%. In addition she added:

COIC is proposing a 2.5% COLA and 2% merit increase for 2017-18. The assumption of 2% merit represents approximately 2/3 of employees who are eligible to receive a merit in 2017-2018.

COIC health insurance is projected to increase by 2.5%. The employee will continue to pay 10% of the total cost of health insurance and COIC will pay the remaining 90%.

PERS rates for 2017-18 are projected to decrease from 19.84% to 16.78% for PERS and 14.47% to 10.97% for OPSRP. COIC has joined the State Pool for PERS, the reason for the decrease in rates.

MATERIALS AND SERVICESMs. Williams reviewed the materials and services budget and assumptions. She informed the committee:

Rent for the Adult Employment & Training Department is budgeted as a significant reduction in 2017-18. The East Cascades Investment Board requires that they hold the leases and incur the facilities cost for all of the WorkSource Centers. COIC is in the process of transferring all leases effective July 1, 2017 to the East Cascades Investment Board. With reduced staffing, general office supplies, furniture and equipment, costs have been reduced.

Fees and dues will increase mainly due to COIC proposing to join NEOGOV for the HR program for use by job applicants.

Transportation fees will increase as the result of the real time arrival app which was introduced 6/1/17, as well as, a new module for the scheduling and reservation software to benefit the Dial a Ride program.

Contracting is proposed to increase by 8%, mostly in CED and transportation. Many of the CED Department grants include contracting out some of the services to local businesses as a required part of the grant. The majority of increase in the Transportation Department is due to the increase in transportation services being provided by Paratransit Services because of the proposed summer service and increased provider service payments for Medicaid rides. Also included is $50K for marketing and $75K for planning.

Proposed pass through expense is projected to decrease from $233K to $41K. The amount of pass through expense that occurs is dependent on the grants that COIC receives and requirements for each grant.

With the elimination of services to Klamath and Lake Counties, operational and crew travel is budgeted to significantly decrease. Client job training expenditures are budgeted to decrease by 55%. With the extent of cuts in funding, less client dollars will be available. The majority of the decrease is from Employment &Training Department.

CAPITALEXPENDITURESMs. Williams explained that some of the capital outlay projects that were budgeted to occur in 16/17 have been shifted to occur in 17/18. All of the proposed 17/18 capital outlay projects are within the Transportation Department budget. The detail of the budgeted capital outlay in Section 8 was reviewed.

SPECIAL FUNDSMs. Williams reported that the EDA Revolving Loan Funds 1-3 have been combined into a single fund starting in fiscal year 16/17. Resources and requirements for the EDA loan fund have slightly decreased from the 16/17 budget. The same is true for the USDA Intermediary Relending Fund. The Local Job Creation Fund is projected to be the same as 16/17 budget. Loans projected to close remain flat.

RESERVE FUND The Board approved a reserve fund policy setting a goal for two months of reserve. The fiscal department

has evaluated the time lapse between COIC’s departments’ expenditure and revenue cycle.

Approved by the COIC Budget Committee 6-7-18

The Transportation Department incurs expenditures throughout the year on a weekly basis and requests reimbursement from grantors on a quarterly basis. With the time period between cash outlay for expenditures and cash receipt from reimbursement being around 5 to 6 months, it is necessary and fiscally responsible for the Transportation Department to have a goal of 6 months of operating expenditures on hand in reserves at all times. The department continues to build reserves; however, they are only projected to have accumulated 68% of what they need in reserves by the end of the current fiscal year.

The Community & Economic Development (CED)/Loans department time lapse between the expenditure cycle, which is incurred weekly, and revenue cycle, which is done on a quarterly basis, is approximately four months. The CED/Loans department continues to work toward their goal of 4 months operating expenditures in reserves at all times. The CED/Loans department is projected to have 116% in reserve by 6/30/17. The majority of the reserve balance is from the Loan department. The Loan department is projected to exceed the necessary reserves however; the CED Department is projected to be short on necessary reserves.

Employment & Training Department’s time lapse between the expenditure cycle, again done on a weekly basis and the revenue cycle, where billings occur on a monthly basis, requires approximately two months of reserves. The amount required for Employment & Training is $590,887 and they are only projected to have $210,836 which will leave them short by about $310,051.

All departments have a significant challenge building reserves due to a significant amount of grants funds and required match funding being utilized to fund programs. Reserves are specific to the department and in some cases program in which they are earned.

OverviewMs. Friend stated that based on the fiscal review, a review needs to occur of the policy set by the Board. Ms. Williams is working on a proposed revision to that policy. Mr. Brummer stated that Crook County has been working on building reserves and it has also proven challenging.

SUPPLEMENTAL BUDGET FOR EDA RLF SPECIAL FUNDSMs. Williams reminded the committee that the EDA Revolving Loan Funds Round 1-3 has been combined into one EDA Revolving Loan Fund for fiscal year 16/17. The Board approved a policy to make the change effective July 1, 2016. The supplemental budget being proposed has no net dollar change; it just combines the three special loan funds into one.

Mr. Krenowicz asked questions about the funding for the Transportation Hub building in Redmond. Ms. Friend stated the Redmond Transportation Hub project was #1 in the state in the recent Connect Oregon processes. COIC received $1 million, in addition to $220,000 for the project from Regional Solutions, $90,000 from the Redmond Downtown Urban Renewal, and $20,000 from the Oregon Community Foundation. COIC dedicated $200,000 from the funds in Transportation. COIC also received a $100,000 ODOT grant. Mr. DeBone asked if that would pay for everything and Ms. Friend confirmed that the project is being designed to live within the budget constraints and phased where the buildout exceeds the dollars available.

Mr. Krenowicz asked about the decrease in local government contributions from last year. Ms. Friend stated that local governments have continued to contribute the same amount but that there is a decrease in the special transportation funds of approximately 16%. Those funds go to the counties and are awarded through the competitive process. The transportation department had also previously deferred some revenue from the prior year into the current year to complete projects. The entire amount was not necessary and the remaining balance was used to build the reserve fund.Mr. Krenowicz stated that he had noticed that budgeted bus fares were significantly lower than previous years. Ms. Friend stated that a slight decrease in bus fares was budgeted since the system would be converting to an electronic fare system and paying a commission, reducing fare income. Ms. Friend also stated that due to increased contracts for group pass programs, contract income increased and fare income decreased by

Approved by the COIC Budget Committee 6-7-18

approximately the same amount. Ms. Williams stated that she found that group pass contracts in previous budgets had been coded as fares, when the proper code should be contract income.

Mr. Krenowicz questioned the increase in fiscal administrator positions. He stated that in prior years, there was only one administrator, and now it looks like we have three (3) additional administrators. Ms. Friend stated that there is not an increase in number of positions rather a reorganization of the accounting department due to the need to upgrade our accounting capabilities. For example instead of accounting coordinator and senior account, there are now three fiscal managers specific to their area of expertise for example a fiscal manager overseeing transportation, one overseeing CED and Loans and one overseeing Education and Training. Each Fiscal administrator is responsible for all the grant requirements, payments, and other requirements for their particular programs. Ms. Williams noted in answer to total positions, she was comparing budget to budget and not all of the budget positions for the 16/17 budget were filled.

Mr. DeBone asked if COIC was still planning on applying for the Distinguished Budget Award, and creating an additional version of the budget. Ms. Friend stated that last year the previous fiscal team had tried but were not successful and at this point we had not decided if we would be applying again in the future. Ms. Williams stated that she didn’t know anything about the additional documentation requirements for the award until last week however; she stated she would like to apply next year.

Mr. Debone inquired about the match committed for capital grants. Ms. Friend explained the match is always a local source such as contract income, advertising revenue, special transportation funds and any other source considered local.

Chair Boylen commented on a very good presentation of the budget, and requested that Ms. Williams discuss the proposed supplemental budget. Ms. Williams stated we are under budget for the current fiscal year 16/17 and although it is not necessary to have a supplemental budget for the general fund, the supplemental budget being proposed is for the EDA Revolving Loan Special fund. COIC Board approved a policy after receiving permission from the EDA to combine the three EDA Revolving Loan funds into one EDA Revolving Loan fund. There is no net change in dollar amount, just a change in reporting.

Mr. Krenowicz made the motion to recommend approval of FY 2016-2017 special funds supplemental budget and resolutions #286 and #287 to the COIC Board. Mr. Fording seconded the motion. The motion carried unanimously.

Chair Boylen made the motion to recommend approval of FY 2017-18 general fund budget and resolutions #288 and #289 to the COIC Board. Mr. Brummer seconded the motion. The motion carried unanimously.

Meeting adjourned at 4:45pm by Chair Boylen.

Approved by the COIC Budget Committee 6-7-18