HomeMy WebLinkAboutSpecial Council June 26 20011
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WHATCOM COUNTY COUNCIL
Special County Council
BUDGET RETREAT
June 26, 2001
The meeting was called to order at 11:00 a.m. by Councilmember Robert
Imhof in the Courthouse Multi- Purpose Room, 311 Grand Avenue, Bellingham,
Washington.
Also Present:
Dan McShane
Connie Hoag
Barbara Brenner
Robert Imhof
Absent:
L. Ward Nelson
Marlene Dawson
Staff Present:
Dewey Desler, Deputy Administrator
Brad Bennett, Finance Division Manager
Quenby Peterson, Budget Analyst
Debbie Adelstein, Administrative Assistant
Regina Delahunt, Health and Human Services Acting Director
Barbara Cory, Treasurer
Hal Hart, Planning and Development Services Director
Jeff Monsen, Public Works Director
Christine Blake, Deputy Auditor
Steve Paus, Juvenile Court Administrator
Joan Bird, Public Defender Office Administrator
Dana Brown - Davis, Clerk of the Council
Marina Engels, Deputy Clerk of the Council
1. COUNCILMEMBERS TO MEET WITH OTHER ELECTED OFFICIALS AND
DEPARTMENT ADMINISTRATORS TO SET GUIDELINES FOR
PREPARING THE 2002 BUDGET (AB2001 -206)
Imhof stated they would go through what the Council is going to expect in
the budget submissions, do a review of the revenues for 2001, and discuss the
different matters the County as an organization is doing.
Review
Desler stated the property tax income growth, without adjusting the levy,
continues to rise about $500,000 to $600,000 per year. It is primarily generated
by new construction. The growth for 2002 will probably be about $500,000 over
and above what the County currently receives, without making an adjustment for
inflation. For five years in a row, the County has had no adjustments in that
property tax levy. If Initiative 747 passes, it includes a provision to limit local
Special County Council Meeting - Budget, 6/26/2001, Page 1
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governments from increasing the levy by no more than two percent, without a vote
of the people.
The administration has been watching sales tax carefully. The County
collects one percent in all unincorporated areas and .15 percent of all retail sales
tax collected in incorporated areas. The sales tax revenues were about $125,000
over what they projected for 2000. Thus far, they've projected $7.15 million
dollars for 2001. They are on target to hit that number, based on the tax collected
in the first five months. That is a fairly stable source of revenue.
The one -tenth of one percent excise tax for criminal justice generated a little
over $800,000 in 2000 and will generate $1.2 million in 2001.
Imhof asked the reason for the large increase. Desler stated the County did
not begin collecting the tax until partway through the year.
Interest earnings continue to grow modestly. The County is getting healthier
based on reserves. When interest rates were higher, they collected a fair amount
of income. More recent changes in the federal fund discount rates mean that
investments will collect less revenue as they reinvest the existing instruments they
have in place. The amounts targeted for 2001 will be on track. They expect that
number to soften for 2002. They continue to collect a fair amount more every year
in interest earnings. The County received a 19 percent increase in 2000, over
1999, which amounted to about $549,000. Over the last three years, they've had a
50 percent increase in the revenue raised from interest earnings. They shouldn't
anticipate that kind of interest income rising over time. Currently, the budget for
2001 indicates that they will collect approximately $3,125,000. If interest rates fall
dramatically, the County could fall short of that amount.
Fees are something the County collects in multiple departments. They are
stable in the Planning and Development Services Department and the Health and
Human Services Department. They are noting some projected increases for the
people housed in the jail and for the alternative corrections programs. Another
area that has had modest growth is the court. Grants are a growing area for
income. It also has a deliberate expense attached to it.
Things are reasonably stable.
Crawford questioned whether the County is in a situation in which it is paying
for the services it gets and collecting reserves. He questioned whether the County
is collecting too much tax.
Desler stated there are capital expense issues the County will have to
address in the near future. They will see that balance dropping a bit. They are not
at a point where they are collecting too much taxes and fees. The County is in the
enviable position as having collected no increase in the property tax levy in the past
five years.
Special County Council Meeting - Budget, 6/26/2001, Page 2
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Crawford stated people in the Tweed Twenty area are looking at the issue of
annexing into the city, and trying to put together information about what they pay
for living in the county versus what they would pay in the city. At first blush, it
looks like they would receive the benefit of having a greater number of services in
the city, and pay fewer taxes. Part of that is offset by what they paid for utilities.
Overall, it may be more affordable to live in the city. Desler stated the residents
would pay the same property tax levy. They will not pay the road fund levy, which
is about $.80 on the dollar. They would probably pay a larger property tax to the
city than what they pay the County into the Road fund. The County collects the
same levy throughout the area for the General fund. That goes to support many of
the services that are provided countywide, such as the courts, assessment,
collection, and health.
Crawford stated it would be nice to have comparisons with other counties
and jurisdictions to see where Whatcom County is.
Status Reports
Desler stated that the Council approved in concept moving forward with the
facilities master planning, which would set the stage for how the County addresses
short- and long -range plans for the County buildings and properties. That is going
to be a fairly comprehensive effort that addresses all the elements of County
government. The County has about 75 buildings currently. There will be an in-
depth inventory of that, an indication of what the options are for the next step to
take.
Under the leadership of Executive Kremen, the County has been vigorous in
trying to conserve energy over the last few months. They've noted a 25 to 30
percent decrease in energy use every month since January. They would like to see
the County continue to sustain the same savings. They anticipate more expensive
energy. They hope to counter that expense with conservation efforts. There will be
proposals to do more work on the facilities to make them more efficient.
Hoag questioned whether the master planning is being done in -house or by a
consultant. Desler stated the administration will recommend a firm to assist the
County with that effort. They've identified needs for criminal justice, health, and
public works areas. It is a long -range effort. The recommendation on the approach
will come to the Council in July.
Hoag stated the City of Bellingham recruited volunteers for a citizen
commission. Desler stated this is different. They were looking at the capital needs
of the city from a general perspective, including the things they are involved in for
arts and museums. The County's activity will be more focused around the needs of
the corporation. They are asking ten or eleven key managers in the organization to
help with that. Ultimately, all department heads will be asked to participate in the
inventory work. They will present interim progress reports to the Council as
progress is made. He anticipated more detailed plans for some of the key
buildings. There were costs associated with the City of Bellingham's efforts. The
Special County Council Meeting - Budget, 6/26/2001, Page 3
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City hired architects and used staff to support their project. They got 35 to 40
people involved. At this point, it's not quite as public an affair because the County
has not allocated the staff time to do that.
Desler continued to state that the County anticipates additional revenues
resulting from the actions taken by the State legislature. They did not expect to
receive an increase in the I -695 funds they've normally received in the past. The
County currently receives close to $1.3 million from the State in those two funds.
The County anticipates an increase in those funds in an amount between $50,000
and $60,000 because the legislature approved the growth factor for those
corporations.
Another key issue is the labor negotiations. There will be issues before the
Council as that plays out. The County has two contracts with its unions that
expired in 1999. They are the ferry workers and the deputy sheriffs. The County is
involved in binding interest arbitration with the deputy sheriffs. They had a fairly
long series of hearings, and they expect another day or two next month. Legal
costs for that are extensive. Four contracts expire at the end of this year:
Teamsters Master, Teamsters Health Clerical, Local 17, and the Washington State
Nurses' Association. The County projects an extensive management workload while
bargaining with those groups. Negotiation with the unions will begin this summer.
They hope to have something settled by the end of the year. The unions are
mounting a fair amount of pressure on the County. The issues they are raising are
complex and take a great deal of staff time. They are also upping the stakes, in
terms of the things they are pursuing in very formal venues. There are more unfair
labor practice charges and union clarification charges against the County.
Grievances are going to arbitration. This activity might be related to the fact that
they are getting ready to go into extensive negotiations. There may be some
unrest in the unions over wages. That is an issue.
Crawford stated that a higher degree of performance evaluation and
accountability has been implemented over the last couple of years. He questioned
whether that would be a cause. Desler stated he has not detected any reaction to
that.
Brenner stated the County does a good job with its wages and benefits, and
she didn't know the cause for the unrest. Desler stated the County is self- insured.
The County is experiencing the same levels of increase as others in the private and
public sector. They have been averaging 15 to 20 percent increases in major
medical costs per year for the last three years. Dental costs have been going up by
six percent each year. For 2002, they project rates in the neighborhood of 10 to 15
percent for medical cost increases. The benefit of medical insurance is that it is
very attractive for recruitment and retention. The County is going to bargain the
issue and the cost of the benefits with these unions.
Brenner stated it sounds as if more is going on than the cost of living.
Imhof stated that is more appropriate for executive session.
Special County Council Meeting - Budget, 6/26/2001, Page 4
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Hoag stated she wanted to make sure the employees really understand the
value of benefits. Some of this discussion belongs in executive session.
Review Policy Guidelines
Desler read the budget development guidelines for fiscal year (FY) 2002 (on
file), which represent the policy direction for the County in developing the budget
request for 2002.
Brenner stated she would like to include a comment in item five, "The Council
encourages the maintenance of the current level of the property tax levy." That
comment has been made in earlier years.
Crawford suggested that they could also encourage a reduction in the level.
Hoag agreed. Going into the budget, it says that is where the Council would
like to stay.
Imhof stated they don't need a motion to include that comment.
The Council concurred.
Hoag stated they don't speak to maintaining service levels while trying to
find the best way to serve the public. She wanted to make sure the focus is still on
trying to serve the public the best they can within the constraints they have. She
suggested adding language to item four, Efficiencies, "...public resources while
providing the best possible service to the public." It should be clear that they don't
want budget cuts to impact the service to the public.
The Council concurred.
Brenner stated some positions are funded through grants, and a grant goes
away. She questioned whether that employee would have first shot at any
vacancies, even if there is someone in the public who is more qualified. Desler
stated the County is not required to give them certain jobs. However, there are
certain rights they have under union contracts to apply for other positions,
irrespective of the funding source. However, if the position is grant funded and the
grant funding goes away, then the position goes away. The County has let go of
people. Sometimes, there will be other job openings that the grant- funded
employee will qualify for and win once they've gone through the normal hiring
process.
Brenner questioned whether the County is putting itself in the position of
having to hire someone less qualified. Desler stated they have to meet the
qualifications.
Special County Council Meeting - Budget, 6/26/2001, Page 5
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Hoag questioned whether a temporary or one -time employee receives any
seniority rights when bidding for another position. Desler stated they do not.
Brenner questioned whether a grant position would be considered temporary
or one -time. Desler stated the advertisement for the position indicates that the
position is grant funded and will only last as long as the grant. The person could
get seniority through a grant position that goes on quite a while. The employee
could also take on other positions.
Hoag moved to approve the draft budget development guidelines for FY
2002, as amended.
Crawford questioned whether they could look at fees as a percentage of
overall revenue. Desler stated they could.
Crawford questioned whether the budget guidelines say that they can identify
other areas or existing areas where they are already collecting fees, to increase
fees. He questioned whether they want to increase that percentage of revenue so
there is more of a shift toward a fee structure and away from tax collection.
Imhof stated they do that every year. Last year, they began collections in
the jail for certain services. There is an opportunity as state law allows. In the
Building and Codes Division, the County is supplying a service to the people who
want it. In the jail, they are not always supplying a service to people who want it.
It makes a difference on whether there is an ability to collect.
Crawford questioned whether it is a goal of the Council to say it would like to
see fee revenue as a percentage of overall revenue increase. That brings the dollar
closer to the service that is provided. Desler stated the County has been collecting
more fees over the last few years. The administration has been promoting the idea
wherever possible. One of the clearest examples was when the County went from
subsidizing the cost of jail services and alternative corrections programs to the
point of collecting the full cost. The expenditures in the Building and Codes Division
are paid for by the fees it collects. Fees also support a significant portion of the
Health Department. The administration is examining areas in which the County
could collect new fees.
Hoag stated the policy that the Council and the administration have been
following has been to have fees cover the cost of services wherever possible. She
supported that policy. Councilmember Crawford is suggesting increasing the
amount of revenues received from fees, compared to other things. She didn't know
whether she would support that policy.
(Clerk's Note: End of tape one, side A.)
Hoag stated there are some areas such as police services where the County
cannot charge fees for services. It is simply the County's job to provide that
service for the health and safety of its constituents.
Special County Council Meeting - Budget, 6/26/2001, Page 6
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Imhof stated state law mandates the County to collect no more than what it
costs to do business.
Brenner stated she believed Councilmember Crawford suggested that the
County figure out wherever possible what the actual costs are and charges fees that
accurately reflect those costs. She believed that was the direction the County was
going.
Crawford questioned whether they can quantify whether or not they can
increase the percentage of revenue being received from fees. They are talking
about budget development guidelines. Guidance as an overall strategy would be
for department heads to look at what direct costs could be recovered from fees. On
the other hand, they have to help the indigent people who can't pay. It is a
balancing act. He questioned whether the administration feels there is room to
move forward on this, or whether they've covered all of this.
Imhof stated the County moves forward on this a little bit each year. The
Council and administration identify areas where it would be possible to collect a fee
for services.
Hoag stated that is exactly what section 3(a) says.
Crawford stated that it doesn't give them a target.
Desler stated there is a variation in how the County applies that item. For
example, the Council adjusted the amount of revenue to be received from fees in
the emergency medical services field. It went from 50 percent to 55 percent. They
adjusted the jail fees to meet the full cost of the service. This policy continues to
announce the administration's intention to use fees as a basis of recovering the full
cost of a service without exceeding that cost, and without using the other
discretionary resources from the sales tax and property tax to subsidize those kinds
of things.
Hoag questioned whether there are any differences in this year's guidelines
from last year's guidelines. Desler stated there are some differences. They've
tightened up the wording a bit. The concepts are the same.
Imhof stated it would be beneficial for the councilmembers to have this
information in a strikeout version from last year, to see the changes.
Motion to approve the budget development guidelines for 2002 as amended
carried unanimously.
Discussion of ASR Formats
Desler stated issues they hear about are how they properly measure what
they are doing, who the customer is, what they are actually doing, and what is the
Special County Council Meeting - Budget, 6/26/2001, Page 7
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outcome of a service. In many meetings with the Finance Committee, they've
talked about how to address those questions. The administration is proposing to
provide more information to the Council that would be consistently applied
throughout the organization. When an additional service request (ASR) is provided
as a proposal to the Council, there would be a request built that would include more
information. The first page of the ASR is the same version of the form that has
been used in previous years. If it is a new service, an enhancement of an existing
service, or if the expenditure is larger than $5,000, then the administration
proposes to submit an additional addendum. If this is the intent of the Council,
then the administration would apply this to all proposals that might come before
the Council in the future, whether or not it is part of the budget process. He read
the conditions of the addendum into the record (on file). This supplement would
comply with the request for getting at the outcomes and measurements and
focusing on the customer.
Imhof stated that this supplement could be developed into a zero -based
budgeting process where they go back and apply these questions to the current
positions and services. Just because something has been done historically doesn't
mean it needs to be continued. They have to justify the services and move forward
from there.
Brenner agreed. She questioned whether question 5(c) would incorporate
that concept.
Hoag stated it does not. She stated it would be good to incorporate that
concept under question five.
Brenner stated she wanted to incorporate the comment that, as they do this,
they will be aware that services provided historically may not need to be continued.
As they change, see what they can eliminate.
Desler stated the administration proposes to use this as an experiment to
look at how they begin to look at any new service. They did this with the law and
justice programs that came before the Council earlier in the year. Some of the
agencies are starting to understand that they have to specify whom they are trying
to serve, what the impacts are, and how the outcomes would be measured.
Imhof stated that concept is covered a bit under question 3(b). They can
fine tune it.
Brenner suggested that the administration add a statement to the ASR
addendum wherever appropriate that asks for an explanation of how the proposal
would help reduce costs elsewhere.
Cory stated the administration has requested in the past that a department
head fill out an ASR if he or she is asking for a reclassification of an employee. On
the old form, there were questions that didn't really fit with a reclassification
request, which is different than a service request. It would be appropriate to say
Special County Council Meeting - Budget, 6/26/2001, Page 8
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this addendum doesn't need to be filled out with a reclassification. The other
requirements that the Human Resources Division has need to be attached to the
reclassification request. This form doesn't fit for a reclassification request.
Imhof agreed.
Desler stated this form is not intended to go along with a reclassification
request. A reclassification request raises a separate series of questions on a
different form.
Bennett stated they've changed the process a bit this year. They won't be
doing an ASR for a reclassification this year.
Hoag questioned which ASR's would not be a new service or an enhancement
to existing services. Desler stated a department could request something relatively
minor, such an increase for increasing postal rates or more paper use.
Hoag questioned how much work it would take for a person to fill out this
form. She didn't want someone to create a Masters thesis to get something that is
a no- brainer. Desler stated the addendum is somewhat difficult. The
administration and the Council wants good clear proposals that are based on a
problem, a predicted outcome, a measurement of that outcome, and a focus on the
customer. That is described in the addendum. This is a bit of an experiment for a
year to see how it works.
Hoag questioned whether Mr. Desler has talked to department heads to see
what they think about the addendum. Desler stated they have done some training
for about 20 people. They are going to do more of that training. They are trying to
do this without creating additional staff.
Imhof stated there is a twofold purpose to this. A department head should
have sound logic behind the request. Also, it will filter out some of the departments
who have, in the past, sent 60 or 70 requests to the administration for additional
services due to the time it would take to think things through.
McShane stated the addendum specifies the questions that the Council wants
answered. There will be more consistency in the types of requests that these
questions address. The question would be whether there should be more added or
whether some need to be taken away. Last year's ASR's were broad in their
descriptions. Councilmembers should keep in mind, as they review the ASR
requests, whether this form works to answer the councilmembers' questions. He
suggested revisiting this form shortly after they complete the budget process
instead of next July.
Hoag stated she was a bit concerned about question 6(c). Some ASR's have
nothing to do with anyone else. Desler stated the question could be answered with
a "not applicable." However, someone else in the administration or on the Council
may be able to think of other parties who would be involved.
Special County Council Meeting - Budget, 6/26/2001, Page 9
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Hoag questioned whether they are going to set up another bureaucracy to
measure the success of the outcomes. She doesn't want to establish a bean -
counter regime that shuffles paperwork.
Imhof stated they have to have a system to measure outcomes. They are
putting the onus on the person requesting the service to justify the service.
They've been asking for that information as long as he's been on the Council. They
are making strides towards that. They are all concerned with that, to not create a
review department in house. It is the Council's job to do the review.
Paus suggested adding a question to item 7, "What fee or grant supports this
ASRT' Often times, he comes in with a fee or grant and can estimate the percent
of the cost that the fee or grant will cover.
The Council concurred.
Brenner moved to approve the ASR format as amended.
Hoag questioned whether the department heads have any concern about this
format. Desler stated he's presenting this form to the Council before he presents it
to the department heads. He can provide any comments to the Council that he
receives from the department heads.
Imhof stated the Council would hear about it if it becomes a problem. The
Council could address it at that time. This is a draft to get out to the department
heads to start the budget process moving forward. If, down the road, the Council
hears concerns, they can always pull it back in and amend it. Desler stated this is
an experiment.
Hoag suggested adding a question to item 2, "How will this improve service
to the customer ?" The customer service needs to be the County's focus.
Imhof stated they need to let the departments explain what the problems
are. The Council can always ask for more information. Don't burden the
departments too much.
Hoag stated she didn't want to overburden the departments. However, she
didn't want customer service to go out the window by focusing on the bottom line.
She would like her suggested added.
Brenner accepted Councilmember Hoag's suggestion as a friendly
amendment to her motion.
McShane stated the form is hard enough to fill out as it is.
Motion to approve the ASR addendum as amended carried unanimously.
Special County Council Meeting - Budget, 6/26/2001, Page 10
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Proposed Schedule for Budget Development
Imhof moved approval of the schedule.
Desler stated the schedule follows the typical preparation pattern.
Motion carried unanimously.
Other Issues
There were no other issues.
ADJOURN
The meeting adjourned at 12:30 p.m.
Jill Nixon, Minutes Transcription
These minutes were approved by Council on July 10 , 2001.
ATTEST:
Dana Brown - Davis, Council Clerk
WHATCOM COUNTY COUNCIL
WHATCOM COUNTY, WASHINGTON
Robert Imhof, Acting Council Chair
Special County Council Meeting - Budget, 6/26/2001, Page 11