Stutsman asked if there were any other changes to the budget memo and Pillard said no. Stutsman said they would send it to department heads. Jordahl said he had submitted different language and wondered if County Auditor Tom Slockett was going to incorporate it into the memo. Stutsman suggested asking Slockett to come to the meeting.

Recessed at 9:28 a.m.; reconvened at 9:35 a.m.

Stutsman informed Slockett that Jordahl wanted to know if the language was included that he had proposed. Slockett said they hadn't done anything on it since they last met. He said Jordahl's comments came after the last draft of the memo was sent up. Slockett said that Jordahl had suggested that his paragraph replace some text in the memo. Slockett felt that the paragraph should be added but not replace the other information. Stutsman asked if the Board felt comfortable with the subcommittee revising the budget memo without seeing it again because they were getting down to the wire to have it finished by the 10th. Slockett asked if the Board could review it individually and informally. Bolkcom asked how close they were with the memo. Stutsman said there was just one change. Bolkcom asked what the change was. Jordahl said in the section entitled additional needs they were asking all department heads to prioritize. Slockett said this was not a controversy or problem, it was just a matter of sitting down and doing it. He said that nobody on the subcommittee had the authority to write it themselves and so all they can do is propose changes. Slockett said what they've been doing with the memo is making changes and using revision marks to show new parts and cross out old parts. They have approved that and proposed changes. Stutsman said she would like to have a draft with changes in it so that the Board can review it. Slockett asked if she wanted Jordahl's change included. Stutsman said if he was proposing changes she would want to see them. Slockett said Jordahl proposed a change and suggested a section be deleted; he would like to discuss that because he didn't feel it should be deleted. Bolkcom said if Jordahl was proposing a change, it was up to him to present it. Jordahl said he did that during the subcommittee meeting. Pillard distributed Jordahl's proposed change to the Board.

Stutsman asked if they were ready to go with the memo as it is so far besides Jordahl's suggestion. Slockett said this was an important enough memo that they all ought to feel comfortable with it. Stutsman said they need to be clear on the memo, because if they're not, they can't expect department heads and elected officials to be clear on it. She said the main object in spending time on the memo was to make sure that it would be as clear as possible so that there wouldn't be any confusion. Slockett said he didn't feel they had closure on the memo yet. He said he hasn't been able to give it the type of attention he would like to because of the school election. Stutsman said the budget meeting with the department heads and elected officials is Thursday afternoon. Slockett and Stutsman agreed they couldn't wait.

Slockett said a concern of Jordahl's was that the additional needs paragraph was so long, but after they made revisions it wasn't that long. Jordahl said it was still about twice as long as the text that he proposed. Pillard said the memo was about 3 times as long as the original. Bolkcom said that still made it pretty short. Pillard said they could have the most clear memo and there would still be questions. Pillard said at some point they will have to go forward. Slockett noted this draft gave instructions about how to fill out the accompanying forms. Stutsman said that Jordahl's suggestion and the current draft both said the same thing but one wasn't as wordy as the other. Bolkcom said he was wondering about the whole process of asking for the 1 through 5% increase. Stutsman said that was the question and they need to focus more on whether they want to go ahead with that rather than the exact wording. Bolkcom asked if it excluded cost-of-living. Slockett said the form takes care of that and they have revised the form to include a grants section, and increases would be given for parts that aren't grants. Pillard said they are just looking for a percentage increase in actual tax asking. Bolkcom asked if people could request more than a 5% increase if it is legitimate. Slockett said if there was a need above that there was another column for the department heads to present that, and they were asking for narratives to accompany that. Stutsman said basically this was asking the department heads to do more work. She said they need to decide if this was the kind of information they want to help them make their decisions or are they better to go back to the way they used to do it. Slockett said they should think through how the budget process has worked and what has happened in the past. He said in the past when the Board has cut a budget, it has sometimes affected a departments ability to collect revenues through grants. He cited an example of the Board granting a half-time position instead of a full-time position, and the department didn't want the part-time position. Slockett said the idea of this was to let the department heads choose their own poison and if they find it necessary to make a 1% cut, they'll have their notion of what the best way to do it is for their department. Slockett said it is going to be a lot more work and he thinks, for him, it will be a useful exercise for him to think about his budget in this way. He said they should try it for one year and see how it goes. Stutsman said they have talked about making some changes in the budget process and this is an opportunity to see how it will go. Slockett said they have already heard some opposition to it and they should just throw it out to the department heads and see how they feel about it. Stutsman asked how Bolkcom would feel about that. Slockett said they are trying to figure out ways to streamline the process and to him this seems like it might do that. Bolkcom said they are still going to need communication with the department heads when they get down to the final days when they are cutting down budgets. Bolkcom said he didn't think any of the worksheets would help them with that. Pillard said they would and they wouldn't, but it would change their priorities list. Slockett said a project may include personnel and equipment and the Board may not know the implication of cutting out one piece of equipment, but the department head can lay that out. Jordahl said the point of his paragraph is a switch in the psychology of the process from cuts to increases. He said they also need to move towards performance based budgeting with what justifies an increase requested. Bolkcom said he liked the priorities list better than the percentages. Jordahl said they want to be moving in the direction of what are the increases in the demand. He said they want to make decisions on the basis of the real needs of the County and not on the basis of the ease of figuring 1%. He said the positive about the percentages is that it does make the department head do some of the Board's work regarding impacts but it's really the impact of the changes of society in Johnson County that have changed the need for expenditures within a department and it is that link that the performance based budgeting direction is all about. Lacina said he didn't know they needed to get into the small details of the smallest line item. He said he liked the idea of priorities. He said he could see what they were trying to get at with the percentage increase, and didn't think they were needing huge detail to start off with but might need it in the future. Lacina said he did like Slockett's paragraph better because it talks about the narrative and the staffing requests. Duffy said the Board of Supervisors if they fall down a little bit it's that they're not keeping up with some departments. Duffy said any budget still boils down to priorities. He said what in the past has been called the wish list was simple. He noted the need to be flexible to meet changing needs such as the demands on Secondary Roads brought on by a harsh winter. Slockett said the budget is many different things. He said it is a prioritizing document, a planning document, but finally from the Auditor's Office perspective it's translating these things into numbers. He said when they make a cut, the Board makes a dollar amount cut, but it all has to be broken into line items. He said it was helpful to get that up front. Bolkcom said that makes sense. Lacina said the department may reallocate different line items. Slockett said that was true but they have to do that when the Board is done with the process if they haven't done it before. Bolkcom said they need to settle on numbers in the end and the sooner the department heads figure that out the better. Slockett said the overriding goal was to streamline the process. Bolkcom reiterated what they had been talking about and asked if they had three supporters of using the percentages. Stutsman said she would. Bolkcom agreed. Lacina said they should run it past the department heads to see what they say. Jordahl said they run a risk of having a department need that would be justifiable at one and a half percent and this doesn't address that question. Bolkcom said they are going to want to see both percent and the real number. Jordahl said prioritizing didn't imply increments of percentages. Bolkcom said they are one in the same. Jordahl said the department heads might see this as busy work. Pillard and Slockett said they would. Pillard asked how many department heads actually know their budget and this was another way of making them think about their budgets and how they spend their money. Bolkcom said most do know their budgets. Pillard said this is a way of making them look at their budgets. Slockett said it makes them prioritize ahead of time. He pointed out the increases wouldn't necessarily be exact percentage increases. Bolkcom asked what the percentages would be based on. Slockett said it would be expenditures, less personnel and less grants. Stutsman said the department budget would be put on the worksheet so they will know what number they have to work with. Bolkcom asked if the percentage is based on non-personnel items. Slockett said that is correct; the Board would decide on personnel items through negotiation and by setting the management increases. Stutsman asked if the subcommittee could work on the wording. Bolkcom said that would be fine.

Bolkcom asked if they had the technology form. Slockett said Information Services Director Jean Schultz has updated that form. Bolkcom asked about the merit system that would be implemented for professional staff and asked for a recommendation for department heads on how to budget for that. Lacina said that it shouldn't be within the departments, it should be allocated from somewhere else because if it's in the budget it will be expected that it will be spent. Bolkcom said part of it was step increases. Lacina said he was talking about the merit pay. Bolkcom said the suggestion has been to budget it in each department's budget but don't budget it at 100%. Bolkcom said the committee should have some discussion about that and give the Board a recommendation on it. Slockett said they talked about it at the elected officials meeting. Duffy said he saw what Jordahl was trying to do and it wasn't a bad idea if they were going to go performance based budgeting.

Stutsman said there weren't any changes in the timeline and said that Pillard had put together a memo for a timeline. Stutsman said it was clear they will be spending most of December scheduling those. Stutsman said they need to think about what kinds of things they want the department heads to submit this year by way of performance based budgeting. Bolkcom said there was a lot of work to present the department heads. Jordahl said to get started down the road a mission statement shouldn't be rocket science. Jordahl said goals could be left up to the departments to do on their own. He said there should be some existing statistics which won't require going out and collecting new statistics. He said that performance indicators should be moved to the bottom of the list. He said they could even change the name performance based budgeting to service cost correlation. Lacina said if they give them a packet saying when they are going to be doing the presentations and have them to sign up, the packet will give them an overview of the budget process. They can give out a form asking for a mission statement. Lacina said they should really simplify the process. Stutsman said one of her concerns was they would be telling people to do something and then they wouldn't tell them exactly what it was. Bolkcom said the timing may be a problem because the departments are very busy and may not have time for a mission statement. Lacina said on performance based budgeting they are going to want to know what grants are going away and if they are going to have to look at whether to continue a program or not. Bolkcom noted the form should show that. Stutsman said the program description or narrative is a brief description of what each department does, because it lays the foundation of performance based budgeting. Pillard asked if they wanted to focus numbers, and they need to prioritize what they want from the departments this year. Stutsman said some of that information has already been compiled by Kim Benge. Slockett said that one of the things that is consistent throughout all of the literature on performance based budgeting is that if it is imposed from above it won't be useful. Bolkcom said he was feeling unprepared for performance based budgeting. Stutsman agreed. Bolkcom said departments presented information last year and could build on that with information on costs and statistics. Bolkcom asked who would talk about issues and trends. He suggested that during the department head meeting everyone could chip in because it was dynamic. Jordahl said one way of looking at it was the tax freeze was off but they have postponed long term space needs, so they are looking for austerity in the departments. Slockett said there wouldn't be much information on revenues available yet at the upcoming meeting. Bolkcom went over what they would do at the upcoming department head meeting. Pillard discussed setting up the December budget schedule with the Board for the department presentations. The subcommittee decided to meet again on September 10th at 7:30 in the morning.

Motion by Lacina, second by Stutsman, to enter into Executive Session at 10:28 a.m. to discuss "Oakes vs. Johnson County" under section 21.5(1.c), Code of Iowa, "to discuss strategy with counsel in matters that are presently in litigation or where litigation is imminent where its disclosure would be likely to prejudice or disadvantage the position of the governmental body in that litigation." Roll call: aye: Bolkcom, Jordahl, Stutsman, Lacina, Duffy.

Motion by Stutsman, second by Duffy, to leave Executive Session at 11:47 a.m. Roll call: aye: Bolkcom, Jordahl, Stutsman, Lacina, Duffy.

Recessed at 11:47 a.m.; reconvened on September 10, 1998 at 5:37 p.m.

(Continued in Part 3)