HomeMy WebLinkAboutFinance October 15 19921 WHATCOM COUNTY COUNCIL
2 FINANCE AND PERSONNEL COMMITTEE
3 Budget Review Session
4
October 15, 1992
5 , The meeting was called to order in the Executive's Conference. Room, 2nd floor
6 Courthouse, 311 Grand Avenue, at 7 p.m. by Committee Chairperson Marge Laidlaw.
7 Also Present: Absent:
8 Bob Imhof None.
9 Ken Henderson
10 Other Council Members present were Barbara Brenner and Larry Harris. Other
11 County officials present were Treasurer Barb Cory, Assessor Keith Willnauer, Sheriff Dale
12 Brandland, Personnel Director Larry Mans, and Executive Shirley Van Zanten. County staff
13 present were Tom Sutberry, Terry Hinz, Linda Irvin, and Bob Woods.
14 Introductory Comments: Van Zanten commented on the changed format of the
15 budget submitted to the Council, and said the Administration will attempt to provide
16 additional information as requested. Hinz commented as well. It was noted that requests
17 for more information should go through Woods and Laidlaw.
18 Content of the Budget Documents: Van Zanten called the Committee's attention
) - to the staffing levels information and the revenue /fee schedule.
20 Revenues - Current Expense: On page 10 of the proposed expenditure plan for 1993
21 (pink book). Sutberry discussed how the revenue report was put together. He commented
22 on the new style of presenting the information.
23 . Property taxes are a stable source of revenue that continues to grow. The projection
24 is $9.8 million on $290 million new construction; a couple of hundred million dollars on
25 appreciation of existing properties. The levy rate will go up by. two or three cents._ This is
26 the only area we're seeing appreciable growth for 1993. When Whatcom County reaches
27 the levy lid, it will have problems. Woods asked WiUnauer and Cory about tax collection.
28 Laidlaw asked the Administration what rate of collection the budget was built on. Sutberry
29 said the projections are based on a 98 percent collection rate.
30 Sales tax (retail sales and use) was discussed next. Sutberry said it doesn't appear
31 the County will meet the 1992 projections. The $7.3 million. that was projected probably will
32 come in at about $7.1 million. The trend is the contraction of this tax; it is consistently
33 dropping; if it continues the projection for 1993 will not hold, either. Sutberry reduced the
34 projection for this year by about $580,000 (loss due to the annexation of Cordata by the City
35 of Bellingham) and increased that amount by seven percent; Sutberry called this a very
36 optimistic projection for 1993, and added he is not very confident about his projection.
37 There was discussion among Laidlaw, ' Sutberry, Brenner, Henderson and Van Zanten.
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Interest earnings also have been on the decline for the past three years, Sutberry said.
The 1992 projection of $2.2 million will be met; but are projecting $1.9 million for 1993.
Cory said there is an assumed average rate of return, six percent. Looking at the portfolio
interest rates have continued to decline so that now the average rate of return is about 4.5
percent; she said this makes her very concerned about the projection. She talked about the
difficulty in getting a good sense for this area of revenue.
Other revenue sources in decline are timber harvest taxes, excise taxes and fees,
Sutberry said. There was some discussion of. timber revenues by Woods, Sutberry, Van
Zanten.
Laidlaw asked about state entitlements and revenue sharing, and grants. Sutberry
said entitlements included entitlements from the state for criminal justice, for example,
which will be $140,000 higher than the projection.
Sutberry said the frightening part of Current Expense is that many of its revenues are
going downward or flattening out at the same time.
Henderson asked about "other interfund service charges." Sutberry said that fees
Information Services were built in to the administrative fees charged to other departments
for the first time, and that accounts for the increase in that area. Van Zanten commented.
Laidlaw asked about line 8301 and 9101 (transfers in; residual equities). Sutberry
said they may be for capitalized equipment, flood control zone reimbursement, Fair debt
transfer, and the Treasurer's Operation and Maintenance transfer.
Woods asked about fund balance for Information Services. Sutberry and Hinz said
a lot of those resources are committed. Nor -Bell funds also are being collapsed into
Current Expense.
Laidlaw pointed to page 2, third paragraph of the Budget Message (on file) regarding
the Health Department being asked to use $200,000 from its fund balance. Van Zanten
commented on how that came about (relating to the contracts with cities for Health
Department services). As a result there was a hefty fund balance that was rebated to the
County and cities contributing to the health department, due to the delayed start of certain
programs, she said.
The other rebate the County received was on page 6, Exhibit B, of the budget
message, from the Washingotn Association of Counties Risk Pool ($222,000), Van Zanten
said.
Laidlaw talked about on that same page, the comment relating to on -going building
costs. Van Zanten explained. Laidlaw also asked for the base from which the budget was
built; she noted that Van Zanten had said it was a status quo budget, and she wanted to
know if that meant it was based on the 1992 budget plus supplementals, or the 1992 budget
plus six percent inflation costs, etc. Van Zanten said there was no salary increase for non-
union people (that is, no cost of living increase). The salary increase for existing contracts
was built into the 1993 contract for certain unions. Departments had to calculate benefits
based on rates provided by the Executive's Office. Additional things -- communication costs,
supplies, etc. -- the percentage of increase varied for each account. Hinz said departments
were instructed to assume the same amount for next year, no increase in inflation, and if
there was an increase it had to be justified. On page 9, in Current Expense, the second
column of th 1992 budget as it stood in June and then Executive recommended; sometimes
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1 the Executive's recommendation was lower than the amount requested. Departments were
2 asked to make a percentage cut after the base budget was presented. Laidlaw discussed the
3 matter with Hinz and Van Zanten further. It was clarified that the base budget was
4 calculated at the 1992 approved amount, plus any supplementals granted through June.
5 Priorities: The Executive noted that there were no cuts in personnel for criminal
6 justice. She did not ask Buildings and Codes to make any cuts. Other departments did have
7 to make three percent cuts. Parks and Seniors received five and six percent cuts. Personnel
8 cuts were minimised.
9 Imhof asked how many union contracts were up for negotiation. Van Zanten listed
10 them (five bargaining units within Teamsters). Mans said the contracts expire December
11 31. Van Zanten said this involves about two- thirds of the County's employees, and most are
12 funded through Current Expense.
13 Van Zanten called attention to page 5 of the Budget Message, where she had shown
14 a fund balance of over $625,000 for Current Expense, not including $500,000 allocated for
15 somewhere else.
16 The budget only has a couple of position cuts, she said. As a result, there is no
17 money available to add to Current Expense for personnel additions. She said additions are
18 needed in the criminal justice system. The Council may want to look at some of the
19 revenue options to raise some money. Or other cuts may need to be made in Current
20 Expense to cover additional needs. She said money needs to be put into the jail (early
21 estimates are at least $200,000 to $300,000 for a work release center). Money for staff (at
22 least four) are needed for the jail, about $150,000, or more. She said about $500,000 in new
23 revenue or cuts to other departments would probably be needed. Van Zanten said whatever
24 decision is made should be made jointly by the Executive and Legislative branches of
15 County government. Laidlaw commented.
2.6 The one big addition in Current Expense fund was four people in the Juvenile
27 Detention Department, which will be funded in 1993 by criminal justice money. These
28 positions are needed when the new juvenile facility comes on line, for the last four months
29 of the year. Unfortunately, in 1994 there will be full-year impact on the budget and the
30 criminal justice funding may not be available.
31 Laidlaw asked about personnel cuts (one in the Executive's office, as of April, one
32 in the Treasurer's Office, and a half position in the senior program). Cory said increased
33 efficiency due to computer systems resulted in the reduction in staff in her office. Van
34 Zanten said Cory was to be highly commended for making this sacrifice. There was general
35 agreement among Council members that Cory had done a good thing. Cory said she would
36 have preferred to have handled it by attrition, but it was not possible. Sutberry said the
37 Treasurer's Office was the only department that had offered an employee. Sutberry said
38 that was partly why the Executive's Office had offered to cut their person; automation in the
39 accounting system will mean less need for daily reconciling of books, so the staff was no
40 longer needed.
41 Woods called attention to page 6 of the budget message. He asked if the Executive
42 thought it would really go all the way to $30.6 million; Hinz said quite honestly the
43 projection could be a little low.
44 Sutberry said he has the feeling that most departments will spend everything they
Finance and Personnel Committee Minutes, 10115192 Page 3
1 have because they see a lean year coming.
2 Van Zanten called attention to pages 3 and 4 of the proposed .expenditure plan,
3 regarding the authorized positions. The notes on the right margin give a run -down of where
4 these will go. She went through them. Van Zanten also commented on the information
5 provided on page 3 of the budget message, regarding program enchancements, and how. it
6 related to the list of authorized positions for the Health and Solid Waste departments.
7 Sutberry said it was anticipated that even more custodians would be needed in 1994.
8 There was some discussion of the one -year road program.
9 Woods asked about the Road Fund and the fund balance for that account. He asked
10 if workload is changing, if the County would continue to build bigger and bigger fund
11 balances. Van Zanten said. a goal of this fund was to build a contingency fund for
12 emergency situations (at least $1 million). One reason for this is cash flow needs while they
13 await collection of taxes (most bills need to be paid in the summer). The other piece is
14 discretionary. The Council may want to look at several unfunded projects to deplete the
15 fund balances.
16 Laidlaw, asked if a fourth quarter supplemental would be brought forward, and Van
17 Zanten and Sutberry said it was likely some would come forward (but they would be very
18 closely scrutinized).
19 Laidlaw asked if people felt like they wanted a break and then move through
20 expenditures; a five minute break was called at 8:10 p.m.
21 Expenses
22 Van Zanten said no new programs are being proposed for 1993. Woods asked about
23 one -time expenses for 1992 (such as capital expenditures, phone system, etc.). Sutberry said
they are not included in the base, but that some of that money was put back in to the
25 budget for ocmputer- related equipment, moving departments, etc. Van Zanten noted that
26 she didn't believe any new vehicles had been included in the 1993 budget.
27 Laidlaw asked about the definition for "basic" in regards to furnishings for the new
28 Courthouse. Van Zanten said not all of the final figures are yet available. She pointed to
29 the book on Reports, page 14, additional bonding for capital purposes; because of the
30 contract signed for the building that is going on, $4 million plus was needed. About $1
31 million is being added to that for Nor -Bell. The Executive said she is going to propose that
32 this is funded through another 20 -year bond. A segment of that loan would be for seven
33 years, $1.2 to $1.4 million to be used to complete the telephone system, capitalize a new
34 morgue (which will be needed), a new mobile home for the Point Roberts Sheriff's station,
35 window blinds and signage for the new additon, detention furnishings for the new detention
36 center, moving costs, and new furnishings only for the areas where there is a need to provide
37 furnishings for people who do not have furnishings now. A marker of $250,000 was placed
38 in the 1993 budget for the secondary part of this loan.
39 There was discussion, some focusing on other existing bonds. It was noted that the
40 County was in a very good position in this regard.
41 Henderson asked about increases in staffing in past years. Van Zanten said part of
42 the increase could be attributed to the Health Department creation, Planning due to Growth
43 Management, Buildings and Codes due to development activity, criminal justice, etc.
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1 Brenner commented and asked some questions relating to victim - witness funding and
2 Information Services. Van Zanten responded, as did-Sutberry. Laidlaw commented. The
3 consensus was that Information Services was a good deal for the money allocated.
4 Brenner asked to see how much money was spent for each position; Hinz said he was
5 preparing the listing and would forward it to the Council the next day. Van Zanten
6 suggested that the Council look at the 1992 budget for such detail, as well. Sutberry said
7 next time personnel control documents would be included in the budget document.
8 Brenner asked if the Committee would be discusing the types of revenue the COuncil
9 could pursue; Laidlaw said the Committee should look through the "Reports and Proposals"
10 booklet that was presented with the budget.
11 Reports and Proposals: Van Zanten said this booklet was based on the Council's
12 budget resolution.
13 Admissions Tax: Information on the admissions tax came from Sutberry and Cory;
14 they estimated the County could gain $300,000 to $500,000 in revenue to the County. On
15 pages 3 and 4 of the "Reports and Proposals" booklet, Cory prepared a report of admissions
16 taxes levied in other counties; Sutberry included a draft ordinance that the Council could
17 adopt. Brenner noted that some percentage would come from people who live outside of
18 the area, and asked if a specific percentage was available; Sutberry said no, he just made
19 a guess because most private businesses are not bound to provide the information to the
20 County. He expected that golfing and skiing would be primary sources of revenue. Sutberry
21 said an auditor of sorts would be needed to go out and make sure the taxes are being
22 collected (this would cost between $30,000 and $50,000). Even so there would be a net gain.
23 There was discussion. The additional person could also audit gas and gambling taxes, Cory.
24 and Sutberry agreed. Sutberry said only the City of Bellingham is collecting admissions
S taxes right now.
2.6 Car Rental Tax: The State Legislature allows counties to collect such a tax, for a
27 dedicated use. Laidlaw and Van Zanten and Brenner discussed this. Van Zanten felt
28 perhaps it was linked to Growth Management somehow.
29 Gambling tax: This was not included in the report, but about two percent more
30 could be collected,. Van Zanten said. Revenue now is between $600,000 to $900,000; this
31 money must be dedicated to criminal justice. There was some discussion.
32 District Court: On page 13. Van Zanten and Brandland commented. Brandland
33 said the impact of cities turning over certain cases to the County is being studied and
34 evaluated, to determine how much money should be collected from the other jurisdictions.
35 In 1991 there appeared to be a $1 million cost to the County for the impact of city cases,
36 Van Zanten said, adding that cities were open to discussing a_ more equitable solution.
37 Brandland said so far there seems to be some support for a change in this system. Sutberry
38 noted that arbitration would be required if there was a problem, and he felt the cities
39 probably wanted to avoid that. Brenner asked when the County might see some results;
40 Van Zanten said she didn't think it was probable (though it would be desireable) for things
41 to be settled before the end of. this budget season.
42 R_ eal Estate Excise Tax (,REET) option: It appears that the requirement needed to
43 get this would be to pass a capital program. These revenues would need to be reserved for
44 capital needs. Sutberry has presented the Council with the ordinance that would enact
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1 collection of this tax. There was clarification that this document is the known capital
2 facilties plan for the County at this time; it would qualify the County for the REET. The
3 other capital facilities plan required by the Growth Management Act (to be finished next
4 year) would qualify the County to impose impact fees, Laidlaw said.
5 Bonding of f Capital Projects: On page 17. Not mentioned previously, Van Zanten
6 said, are proposed lease purchase for the AS400 computer, and for a camera for a document
7 imaging system.
8 Unified Fee Schedule: Laidlaw said this seemed to be fairly straight - forward and
9 complimented Irvin on the work. The suggestion of adopting the fee schedule as one
10 ordinance was not put forward, Van Zanten said. She suggested that Finance Committee
11 discuss this option further. Irvin suggested that the Council speak with legal counsel about
12 certain fee schedule issues that have not been addressed in the past. Laidlaw said it would
13 be helpful if Irvin could put those questions together for the Council to send to the
14 Prosecutor's Office. Irvin said she had something already put together and would provide
15 it to Laidlaw.
16 Laidlaw urged all Council Members to continue attending Finance review sessions,
17 particularly because the new format may be somewhat confusing to people.
18 The meeting was adjourned at 9 p.m. Laidlaw made a final note that all questions
19 for the Administration should come through Woods and /or Laidlaw.
20 WHATCOM COUNTY COUNCIL
21 ATTEST: WHATCOM COUNTY, WASHINGTON
22 /ax dX
23 Ramona Reeves, Clerk of the Council Marge aw, Member
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