Central Oregon Intergovernmental Council

(COIC)

Annual Budget FY 2017-2018

Central Oregon Intergovernmental Council 2017-2018 Budget Summary

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The proposed 2017-2018 budget is balanced, and represents a slight decrease from the previous year’s budget. COIC is proposing a $22.3 million budget for 2017-2018. Following is a summary of the budget; the full budget document can be found on the COIC web site: http://coic2.org/about/coic-board/ 1. Budget Trends

The COIC budget has been trending upwards over the past several years. Most of the growth can be attributed to the transportation department; a 30% increase to Bend’s fixed route system was implemented in 2015, and an expansion to the community connector system was implemented in 2016. However this year’s transportation budget is slightly down from the 2016-2017 budget. The decrease in budget for 2017-2018 is primarily due to funding cuts from ODOT and other funding sources.

The Budget for the Economic Development Department (including Loans) is also seeing a decrease in funding and expenses for the 2017-2018 fiscal year. The Employment and Training Department is budgeted to have lower resources and FTE next year mostly due to funding cuts from DHS and COIC moving out of region 11 (Klamath County) due to funding cuts. Even though COIC is experiencing budget cuts for the fiscal year 2017-2018, through diligent work with our funders we believe we will be able to offer great service to Central Oregon while working with a conservative budget.

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Budget TrendsCOIC Budget

ED budget

Transportation Budget

E&T Budget

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2. Budgets by Department

The following table provides detail on the percentage of budgeted resources per department. The transportation budget makes up 76% of all COIC resources, followed by Employment and Training with 17% and Economic Development with 7%. Even though resources for all departments have decreased, the percentage’s made up by each department have substantially stayed about the same as the fiscal year 2016 – 2017 budget.

Economic Development,

$1,624,081 , 7%

Transportation, $16,762,562 ,

76%

Employment and Training,

$3,758,698 , 17%

Budget by Department

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3. Expenses

Categories for expenses within the 2017-2018 budget can be found in the table below.

Personal Services, $8,298,213 , 37%

Materials and Services, $7,728,842 ,

35%

Client Services, $288,355 , 1%

Capital, $2,779,581 , 12%

Debt Service, $140,000 , 1%

Operating Contingency,

$3,100,335 , 14%

Expenses

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In analyzing trends, we note a decrease in personnel costs, materials and services, client expenditures and capital outlay, which is directly related to the decrease in funding sources and moving out of region 11 (Klamath County), while debt service remains stable.

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Expense Category Trends

Personal Services

Materials and Services

Client Services

Capital

Debt Service

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4. Funding Sources

COIC has traditionally had a very diverse funding portfolio. The proposed 2017-2018 budget is no different.

Reserve Fund, $2,949,813 , 13%

Loan Fund Transfers, $332,633

, 1%Federal, $3,752,648 ,

17%

State, $3,951,589 , 18%

Local Government, $4,439,778 , 20%

Misc., $6,908,865 , 31%

Funding Sources

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BUDGET MESSAGE PROGRAM YEAR 2017-2018

Resources COIC is projecting a decrease in funding for the upcoming program year, an overall 6% decrease in revenues over the previous program year, most of which comes from the decrease in Employment and Training funding, and COIC no longer servicing region 11 (Klamath County). Overall staffing is budgeted to decrease from 133.92 FTE to 113.94 FTE.

The Employment and Training Department is looking at significant decreases in DHS funding and funding from the Workforce Innovation and Opportunity Act. There are several National Emergency Grants that are expiring, and are not projected to be renewed for the fiscal year 2017-2018.

The Economic Development Department, including our Public Lending programs, is projecting a slight decrease in resources budgeted for this year as compared to the previous year. However, the department continues to receive funding through a planning grant from the EDA and significant funding from the USDA, both for local food programs and collaborative forest projects, as well as private foundation grants.

The Transportation Department is also projecting a decrease in funding for fiscal year 2017-2018 as compared to the previous fiscal year. This decrease is mainly attributable to a decrease in ODOT funding and Special Transportation Funds.

Wages COIC has included a 2.50% COLA increase in this year’s personnel costs for both the represented and the non-represented groups. Also included in the budget is a 2% merit increase for both the represented and non-represented groups. We arrive at this number by assuming that 2/3’s of the staff will receive a 3% merit increase. The represented group’s COLA and step increases are determined by the union contract, which is still under negotiations.

Benefits

Medical/Dental Insurance COIC has been regarded as a department of Deschutes County for insurance benefits since COIC's formation in the early 1970's. Deschutes County is self-insured and an employee benefits advisory committee meets monthly to review the plan, making recommendations to the Commissioners on the management of the plan. COIC has one representative on this advisory committee. The County offers two levels of coverage: 1) a standard plan for full-time employees and 2) a high deductible plan for part-time employees.

In fiscal year 2015-2016, COIC instituted a change in the structure of cost-sharing between COIC and its employees. Prior to FY 2015-2016, there was a fixed cost to the employee and any increase in premium charge was absorbed by COIC unless a new fixed employee cost was set. In fiscal year 2015-2016 COIC

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moved to a percentage cost-share of 92%/8%, where COIC paid 92% of the total premium and the employee paid 8%. This arrangement started with the represented group and was expanded to include the non-represented group as well. Under the union contract, the represented group moved to 90/10 split on January 1, 2016, and COIC made the same changes for the non-represented group.

We are projecting an increase in premium cost for both the Standard and High Deductible Plans in FY 2017-2018. The Standard Plan with Dental is projected to go from $1,705 per employee to $1,748, an increase of 2.50%. The High Deductible Plan is projected to go from $1,104 to $1,132, an increase of 2.50%.

PERS COIC participates in the state-administered retirement fund. The employer rate effective July 1, 2017 to June 30, 2019 is 16.78% for PERS General Service (Tier 1 & 2) and 10.97% for OPSRP General Service. These rates are in place for two years.

Looking long-term, COIC’s PERS expense outlook is mixed. On one hand, our Unfunded Actuarial Accrued Liability (UAAL) increased from last year by $814,664. COIC went from an 86% funded ratio down to 81% as of 12/31/2015, the latest reporting we have. Our UAAL as a percentage of covered payroll jumped from 43% on 12/31/2014 to 53% as of 12/31/2015.

However, COIC’s board approved participation in the state’s local government rate pool on December 3, 2015, which we believe will lead to a large reduction in PERS costs from those forecasted without joining the pool. The State of Oregon was able to offer projections for the 2017-2019 biennium for COIC both in and out of the pool. If COIC did not join the pool, rates would have jumped to 22.71% for Tier 1/Tier 2 and 17.16% for OGSRP (from 19.84% and 14.47%, respectively for 2015-2017). In the pool, our rates were projected to be 17.83% for Tier 1/Tier 2 and 12.43% for OGSRP; however our actual rates per the pool ended up even lower than projected.

The reason for the large change in rates is due to COIC having what is called a “Transition Surplus”. Once joining a rate pool, the organization takes on the demographics, AAL, and all other characteristics of the pool at large, rather than the individual organizations. This leads to greater stability of rates and a lower risk overall. If the organization’s status is worse than the pool’s, than the organization must pay in extra funds over 20 years to bring its status in line with the pools. If the organization is in better shape than the pool, as is the case with COIC, then the organization pays in less over 20 years to bring its condition in line with the pool’s. So there are trade-offs, but COIC management and its board felt that joining the pool and enjoying significant cost savings over the next 20 years was the prudent decision.

Workers Compensation COIC is budgeting for less Workers Compensation costs in FY 2017-2018 than the previous year due to an unfavorable year dropping off our experience this year, leading to a significantly lower experience modification.

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Materials and Services

Rent We are projecting lower rent in FY 2017-2018 for several reasons. On the buildings we own, we only charge programs depreciation as rent. The longer we own these buildings, the lower the depreciation and, therefore, the lower the rent. Another reason is we were able to restructure the loan on the Bear Creek facility last year, leading to a significantly lower payment and, therefore, lower rent. Lastly, the RFP for our adult programs funded through the East Cascades Workforce Investment Board (ECWIB) indicated that they will be taking on facilities responsibilities, rather than the provider. So we have not budgeted any rent expense for the WIOA portion of the Work Source centers in our E&T Adult Department.

General Supplies We have budgeted lower general supplies costs for fiscal year 2017-2018 than in the previous year. This is mainly to a decrease in operations through a decrease in staff and locations for fiscal year 2017-2018.

Furnishings and Equipment Much like the general supplies line item, furnishings and equipment also has a large decrease from the previous year, mainly due to the same reasons as stated above for general supplies.

Vehicle Maintenance We have budgeted lower vehicle maintenance costs for FY 2017-2018 than the previous year. In fiscal year 2015-2016, we transitioned from primarily contracting for maintenance services to performing the bulk of this service in-house. This has been extremely successful, leading to significantly lower costs despite expanded service and an expanded fleet.

Insurance We have budgeted lower insurance costs for FY 2017-2018 than the previous year. COIC is experiencing savings due to changing insurance carriers in fiscal year 2015-2016.

Contracting Our FY 2017-2018 contracting costs are expected to increase significantly. One of the main drivers behind this is our Medical Ride Brokerage Program. In fiscal year 2015-2016 the program management shifted from the Oregon Health Plan to a private CCO, in our case Pacific Source. One of the changes placed on both COIC and Pacific Source was to increase utilization of this service from the Medicaid population. COIC’s funding is actually directly tied to utilization. So far this has been successful and increased utilization has led to increased ride numbers which leads to increased contractor costs. Another main driver is potential transportation service improvements, to enable COIC to offer better and more efficient services to all of central Oregon.

Fuel Expense We continue to see lower fuel costs. Despite increased service, our fuel expense is expected to drop from last year’s budget.

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Client Services We are budgeted to decrease payments to clients this upcoming fiscal year in our Employment & Training Department. The reason for this decrease is mainly due to funding cut backs for COIC’s adult programs, and moving out of region 11 (Klamath County).

Capital Outlay All of our budgeted capital expenditures are within the transportation department this year. Among the capital items slated for purchase are:

• 4 large, low-floor replacement buses for the Bend fixed-route system • Construction of new bus stops • Development of the Central Station project in Redmond • Site improvements for both Redmond and Hawthorne transit centers • Enhanced transit stops for both Bend and La Pine

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CENTRAL OREGON INTERGOVERNMENTAL COUNCIL Elected Members:

City -- Bend, Culver, La Pine, Madras, Metolius, Prineville, Redmond and Sisters

County -- Crook, Deschutes, and Jefferson

Confederated Tribes of Warms Springs Non-Elected Members:

There are five appointed Private Sector Members generally representative of the following: Timber and Wood products, Agribusiness and agriculture, Unemployed and under employed, Business and industry, Recreation and Tourism.

Board of Directors: Jerry Brummer, Crook County Casey Kaiser, Crook County appointed - Tony DeBone, Deschutes County agribusiness and agriculture Wayne Fording, Jefferson County Katy Brooks, Deschutes County appointed –

Bruce Abernethy, City of Bend business and industry Bart Carpenter, City of Culver Katie Condit, Deschutes County appointed –

Connie Briese, City of La Pine unemployed and under employed Bartt Brick, City of Madras Vacant, Deschutes County appointed –

John Chavez, City of Metolius recreation and tourism Gail Merritt, City of Prineville Jim Wilson, Jefferson County appointed - Timber Jay Patrick, City of Redmond and Wood products Chuck Ryan, City of Sisters Lonny Macy, Confederated Tribes of Warm Springs Officers:

Chair – Jay Patrick, City of Redmond Vice-Chair – Wayne Fording, Jefferson County Secretary/Treasurer – Karen Friend

Executive Director – Karen Friend

CENTRAL OREGON INTERGOVERNMENTAL COUNCIL

EXPENDITURES

Personal Services103,809 112,289 1.00 114,450 1.00 127,055

42,365 42,576 1.00 44,724 Executive Assistant 1.00 47,439

76,513 84,021 1.00 88,269 Fiscal & Admin Services Administrator 1.00 73,923 - - - Fiscal Services Admin - CED & Loans 1.00 61,897 - - - Fiscal Services Admin - Transportation 1.00 55,414 - - - Fiscal Services Admin - Adult & Youth 1.00 56,656

62,218 66,323 1.00 71,775 Human Resources Manager 1.00 78,413 81,985 - 1.00 56,660 IT Manager 1.00 60,104 35,482 45,159 1.00 50,338 Network Administrator 1.00 53,128 63,429 69,542 1.00 70,906 Accounting Coordinator 0.08 6,263 56,489 60,162 1.00 61,752 Human Resources Coordinator 1.00 65,421 44,239 45,388 1.00 47,444 Accounting Technician -AR/AP 1.00 36,366 35,889 38,229 1.00 40,154 Payroll Specialist 1.00 42,561

- - 1.00 32,317 Clerical Assistant 1.00 33,281 - - - Accounting Clerk - Billing 1.00 36,366

Dept Managers98,140 104,564 1.00 106,626 Transportation Manager 1.00 93,636 95,729 101,968 1.00 103,968 Loan Manager 1.00 107,041

238,435 254,846 2.00 185,518 Employment & Training Managers 0.92 90,323 72,938 77,712 1.00 81,599 Economic Development Manager 1.00 86,513

Program Managers & Program Staff59,450 61,516 1.00 64,584 Program Planner E&T 1.00 79,654

- - - CET Dispatch and Call Supervisor 1.00 52,254 - - - Transportation Planning and Outreach Specialist 1.00 39,727 - - - Field Supervisors 2.00 94,878 - - 1.00 60,113 CET Operations Manager 1.00 63,753 - - 1.00 55,021 Senior Transit Planner 1.00 60,104

72,938 77,712 1.00 79,252 Loan Officer 1.00 81,598 102,664 107,796 2.85 170,128 Program Administrator-ED 1.85 115,153 254,641 224,641 7.00 364,415 Program Administrator-Transit 3.00 160,713

- - - Training Program Manager - E&T Adult 1.00 85,259 124,114 130,447 2.00 141,824 Program Coordinator-E&T 1.00 77,372

39,939 - 1.00 42,153 Program Coordinator-ED 1.00 43,413 - 39,568 - Program Coordinator-Transit - - 45,569 1.00 46,476 Employment Counselor/Adult Records Coordinator 1.00 47,853

45,303 58,933 - Outreach and Engagement Coordinator 1.00 63,766 151,762 147,225 4.75 169,359 Program Assistant-E&T 1.00 36,366 133,241 94,936 4.00 129,325 Program Assistant-Transit 3.00 99,081

22,959 163,158 1.00 32,317 Program Assistant-ED 0.80 29,093 - 150,728 4.00 156,666 Operations Assistant-Transit - - - - Quality Assurance Lead 2.00 86,827 - - - Market Attendant 1.40 44,239

36,548 53,928 - IT Systems Administrator - 33,440 40,298 2.00 68,027 Vehicle Mechanic 2.00 73,015

1,071,039 1,033,877 18.60 904,328 Employment Counselor-Adult 9.01 457,654 160,381 174,104 6.00 262,199 Employment Counselor-Youth 3.17 155,093 510,993 481,282 7.25 366,520 Classroom Instructor 6.75 343,766

69,597 122,176 2.00 125,007 Classroom Instructor-Lead 1.00 53,546 29,132 25,293 0.50 25,784 Loan Servicing Clerk -

- 48,388 1.00 27,870 Clerical Receptionist-E & T 1.00 28,704 - 18,068 - Classroom Aide -

5,482 11,540 0.33 11,772 Summer Crew Leaders 0.12 4,495 - - - Dispatchers 6.00 195,669

510,903 649,295 26.00 809,322 Customer Service Representatives 13.50 418,285 535,240 597,889 19.64 564,713 Drivers 24.35 769,594

52,981 127,058 3.00 88,099 Maintenance 3.00 91,940

5,130,407 5,788,204 133.92 5,921,774 113.94 5,164,665

71,688 - - Merit Increases - - - - COLA Increase - - - - Vacation Buyout/Longevity/Overtime -

5,202,095 5,788,204 5,921,774 ***SUB-TOTAL*** 5,164,665 Payroll Expense

1,786,414 1,993,021 2,268,122 Medical/Dental Insurance 1,892,979 23,606 26,079 28,456 Life Insurance/LTD 23,434

673,746 853,676 902,749 Public Employees Retirement 622,327 358,515 407,867 437,468 F. I. C. A. 378,321 116,098 145,031 114,936 Workers Compensation 102,553 124,080 138,632 127,287 Unemployment Insurance 113,934

8,284,554 9,352,510 9,800,792 TOTAL PERSONAL SERVICES 8,298,213

ACTUAL BUDGET FY 14-15

ACTUAL BUDGET FY 15-16

APPROVED BUDGET FY 16-17

Executive Director

Administrative Support

PROPOSED BUDGET FY 17-18

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CENTRAL OREGON INTERGOVERNMENTAL COUNCIL

EXPENDITURES ACTUAL BUDGET FY 14-15

ACTUAL BUDGET FY 15-16

APPROVED BUDGET FY 16-17

PROPOSED BUDGET FY 17-18

Materials and Services575,075 579,696 489,343 Rent 461,776 114,459 125,612 131,766 Telephone 130,259 238,948 247,501 256,756 Utilities/Janitorial 158,950

Supplies/Printing138,122 276,739 276,294 General Supplies 121,478

20,934 33,088 34,629 Printing 22,309 3,958 14,972 4,198 School District/Crews 1,224

36,438 166,926 161,344 Furnishings & Equipment 15,919 9,519 16,088 15,279 Postage 14,840 2,908 3,246 3,578 Subscriptions 2,497

188,500 304,176 190,528 Fees/Dues 271,765 2,297 5,495 5,027 Advertising 8,024 6,947 9,829 7,935 Office Equipment Lease Exp 8,479

Repair and Maintenance8,888 10,455 10,757 Office Equipment 10,435

398,953 551,785 319,124 Vehicles 250,010 23,578 30,651 31,546 Other 55,006

136,663 133,254 122,617 Insurance 170,112 Services

69,549 25,064 20,368 Legal 14,168 26,225 37,901 36,640 Auditing 20,929 18,265 47,559 48,757 Security 44,473

Consulting52,193 51,044 62,575 Computer Network -

2,301 4,773 4,897 Telephone Systems 21,802 4,472,107 5,652,679 4,975,283 Contracting 5,392,013

- 92,298 233,022 Pass Through 41,000 3,067 129 133 Other -

Training/Travel105,607 99,616 104,678 Operational Travel 63,770

8,764 8,187 8,404 Staff Training/Education 4,202 8,816 12,121 12,453 Travel/Employee Bus Pass 9,513

24,727 28,436 32,701 Crew Travel 8,870 520,881 604,318 368,451 Fuel Expense 350,073

- 4,886 5,032 Drug testing 3,201 Cost of Goods Sold

67,605 88,190 84,486 Hawthorne Market 51,744 7,286,294 9,266,714 8,058,601 ***SUB-TOTAL*** 7,728,843

Client Job Training/Services428,263 555,819 521,179 Workforce Innovation and Opportunity Act 249,312

29,608 36,832 76,000 Department of Human Services 19,793 - - - Back to Work Oregon 19,250 - - - Oregon Youth & Conservation Corp -

88,500 77,000 47,200 School Districts/Crews - 546,371 669,651 644,379 ***SUB-TOTAL*** 288,355

7,832,665 9,936,365 8,702,980 TOTAL MATERIALS AND SERVICES 8,017,198

Capital Outlay Equipment

- 72,229 - Computers & Software - 7,280 111,174 87,000 Furnishings & Equipment 52,000

- - 1,489,814 Real Property - 38,309 - 310,000 Property Improvements 1,077,051

361,033 1,937,710 1,635,000 Vehicles 1,650,530 406,622 2,121,113 3,521,814 TOTAL CAPITAL OUTLAY 2,779,581

Debt Services90,862 87,549 98,210 Debt Principal 100,000 49,061 52,374 41,714 Debt Interest 40,000

139,923 139,923 139,924 TOTAL DEBT SERVICE 140,000

Transfers & Contingency1,392,434 1,529,427 1,577,287 Operating Contingency 3,100,335

1,392,434 1,529,427 1,577,287 TOTAL TRANSFERS & CONTINGENCY 3,100,335

18,056,198 23,079,338 23,742,796 TOTAL EXPENDITURES 22,335,326

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