December 31 , 2012

Paul Koprowski, Air Program Coordinator U.S. Environmental Protection Agency Oregon Operations Office 805 S.W. Broadway; Suite 500 Portland, OR 97205

RE: MOE Exception Request

Dear Paul :

As discussed, the Lane Regiona l Air Protection Agency (LRAPA) requests an exception, due to economic circumstances, from the maintenance

- of

- effort (MOE) requirements of the continuing air grant program under s ection 105 of the federal Clean Air Act.

LRAPA has had to grapple with dif ficult economic conditions and variable levels of financial support in recent years. Economic recessions generally impact Oregon deeper and last longer than the rest of the United States, and the current recession from 2008 to present is no exception. As a result, LRAPA has experienced funding reductions from our major non

- federal revenue sources and must request an exception from the MOE requirements for FY2012 and FY2013. [LRAPA has consistently met the 40% minimum match criterion, the other statutory cos t

- sharing provision in section 105, and is projected to continue to do so in future years.]

For review, LRAPA is the only local air pollution control agency in Oregon . It was established under Oregon statutes adopted by the 1967 Legislative Assembly and a n intergovernmental agreement between Lane County and the cities of Eugene, Springfield, Cottage Grove and Oakridge. LRAPA is a local single

- purpose air quality agency authorized to implement most aspects of state air quality rules

and the federal Clean Ai r Act. The chief executive is the LRAPA Executive Director and the fiscal

decision

- making body is the 9

- member LRAPA Board of Directors.

The detailed budget information and supporting documentation are attached, but the MOE worksheet

calculations are ill ustrated in the first attached graph and summarized as follows:

 Actual MOE = $1,010,832 in FY 2008 (July 1, 2007 to June 30, 2008);

 Actual MOE = $1,064,539 in FY 2009 (July 1, 2008 to June 30, 2009);

 Actual MOE = $1,067,889 in FY 2010 (July 1, 2009 to June 30, 2010);

 Actual MOE = $1,068,396 in FY 2011 (July 1, 2010 to June 30, 2011);

 Actual MOE = $935,855 in FY 2012 (July 1, 2011 to June 30, 2012); and

 Projected MOE = $800, 3 13 in FY 2013 (July 1, 2012 to June 30, 2013).

LRAPA has evaluated its expenditure reductions i n FY2012 (and its projected expenditures in FY2013)

in accordance with the September 30, 2011 EPA guidance on MOE exceptions. We believe the LRAPA situation clearly meets the EPA criteria

.

 The expenditure reductions were the result of adverse economic conditions;

 Air program expenditure reductions were the result of general reductions in the LRAPA budgets;

 Air program expenditures were not singled out for disproportionate reductions; and

 Air program expenditures were not reduced in order to in crease funding for programs or activities that clearly degrade air quality and jeopardize the public's health. 1010 Main Street Springfield, OR 97477

Phone: (541) 736

- 1056 Fax (541) 726

- 1205

1

- 877

- 285

- 7272 www.lrapa.org

E

- mail: lrapa@lrapa.orgPaul Koprowski, EPA Oregon Operations Office

December 3 1 , 2012 Page 2

The recent reductions in LRAPA funding are illustrated in the second attached graph. The biggest reductions occurred in LRAPA funding from state and local general funds. These reductions are the

direct result of the economic recession.

As a single

- purpose air quality agency, most of the LRAPA programs are closely related to secti on 105 program implementation. The major exception is the Title V in dustrial permitting

- compliance program which relies on dedicated permit fees, and which is excluded and sepa rate from the MOE calculations. A few other LRAPA programs are pass

- through air quality grant programs with dedicated federal grant funding, which a re also separate from the MOE calculations.

In order to operate within its FY2012 and FY2013 budget s , LRAPA implemented a combination of unpaid furlough days, schedule reductions, and systematic across

- the

- board reductions wherever possible in materials and services (M&S) expenses. In addition, open positions resulting from retirements or resignations were left vacant, with the related responsibilities redistributed, reduced, postponed or eliminated. The net result was an overall reduction across all LRA PA programs.

Therefore, LRAPA specifically requests that EPA reset our MOE, for the purposes of meeting the
statutory cost

- sharing provisions in section 105 of the Clean Air Act, to the following:

 $935,855 in FY 2012 (July 1, 2011 to June 30, 2012); and

 $ 800,013 in FY 2013 (July 1, 2012 to June 30, 2013).

Detailed documentation is attached. I look forward to discussing this request with you in the near future.

Sincerely,

Merlyn L. Hough

LRAPA Executive Director

Enclosure: LRAPA Documentation of Maintenance of Effort (MOE)Paul Koprowski, EPA Oregon Operations Office

December 3 1 , 2012 Page 3Paul Koprowski, EPA Oregon Operations Office

December 3 1 , 2012 Page 4LRAPA Documentation of Maintenance of Effort (MOE) Page 1



## LRAPA Request to EPA Oregon Operations Office for MOE Exception for FY2012 and FY2013

December 31 , 2012

EXECUTIVE SUMMARY

The Lane Regional Air Protection Agency (LRAPA) requests an exception, due to economic circumstances, from the maintenance

- of

- effort (MOE) requirements of the continuing air grant program under section 105 of the federal Clean Air Act.

LRAPA has had to grapple with difficult economic conditions and variable levels of financial support in recent years. Economic recessions gener ally impact Oregon deeper and last longer than the rest of the United States, and the current recession from 2008 to present is no exception. As a result, LRAPA has experienced funding reductions from our major non

- federal revenue sources and must request an exception from the MOE requirements for FY2012 and FY2013. [LRAPA has consistently met the 40% minimum match criterion, the other statutory cost

- sharing provision in section 105, and is projected to continue to do so in future years.]

For review, LRAPA is the only local air pollution control agency in Oregon. It was established under Oregon statutes adopted by the 1967 Legislative Assembly and an intergovernmental agreement between Lane County and the cities of Eugene, Springfield, Cottage Grove and Oak ridge. LRAPA is a local single

- purpose air quality agency authorized to implement most aspects of state air quality rules and the federal

Clean Air Act. The chief executive is the LRAPA Executive Director and the fiscal

decision

- making body is the 9

- member LRAPA Board of Directors.

The detailed budget information and supporting documentation are included in this
report

, and the MOE worksheet calculations are summarized as follows:

 Actual MOE = $1,010,832 in FY 2008 (July 1, 2007 to June 30, 2008);

 Actual MOE = $1,064,539 in FY 2009 (July 1, 2008 to June 30, 2009);

 Actual MOE = $1,067,889 in FY 2010 (July 1, 2009 to June 30, 2010);

 Actual MOE = $1,068,396 in FY 2011 (July 1, 2010 to June 30, 2011);

 Actual MOE = $935,855 in FY 2012 (July 1, 2011 to June 30, 2012); and

 Projected MOE = $800, 3 13 in FY 2013 (July 1, 2012 to June 30, 2013).LRAPA Documentation of Maintenance of Effort (MOE) Page 2



### LRAPA has evaluated its expenditure reductions in FY2012 (and its projected expenditures in FY2013) in accordance with the September 30, 2011 EPA guidance on MOE exceptions. W e believe the LRAPA situation clearly meets the EPA criteria.

 The expenditure reductions were the result of adverse economic conditions;

 Air program expenditure reductions were the result of general reductions in the LRAPA budgets;

 Air program expenditure s were not singled out for disproportionate reductions;

 Air program expenditures were not reduced in order to increase funding for programs or activities that clearly degrade air quality and jeopardize the public's

health.

As a single

- purpose air quality agency, most of the LRAPA programs are closely related to section 105 program implementation. The major exception is the Title V industrial permitting

- compliance program which relies on dedicated permit fees, and which is excluded and separate from the MO E calculations. A few other LRAPA programs are

pass

- through air quality grant programs with dedicated federal grant funding, which are also separate from the MOE calculations.

In order to operate within its FY2012 and FY2013 budgets, LRAPA implemented a combination of unpaid furlough days, schedule reductions, and systematic across

- the

board reductions wherever possible in materials and services (M&S) expenses. In addition, open positions resulting from retirements or resignations were left vacant, with the related responsibilities redistributed, reduced, postponed or eliminated. The net result was an overall reduction across all LRAPA programs.

Therefore, LRAPA specifically requests that EPA reset our MOE, for the purposes of meeting the statutory cost

- sharing provisions in section 105 of the Clean Air Act, to the following:

 $935,855 in FY 2012 (July 1, 2011 to June 30, 2012); and

 $800,013 in FY 2013 (July 1, 2012 to June 30, 2013).

This documentation is provided to support the LRAPA request to EPA to a djust the

MOE for FY2012 and FY2013

.LRAPA Documentation of Maintenance of Effort (MOE) Page 3



### BACKGROUND

What is the Lane Regional Air Protection Agency? Lane Regional Air Protection Agency ( LRAPA ) is a local air agency authorized by state law to implement most aspects of s tate air quality rules and the federal Clean Air Act. The geographic jurisdiction of a local air agency may consist of a single county or may include multiple counties. LRAPA has jurisdictional responsibilities for Lane County, Oregon, and the cities wit hin Lane County. The decision to create a local air agency is made by the governing bodies of the county or counties included in the jurisdictional boundary of the Agency. The applicable Oregon statutes are primarily in ORS 468A

. The chief executive is the LRAPA Executive Director and the fiscal decision

- making body is the 9

- member LRAPA Board of Directors.

What are the duties and mandates of a Local Air Agency?

LRAPA generally ha s these basic func tions:

 permitting of stationary (not mobile) industrial and other emission sources;

 adopting and implementing local regulations to meet local needs;

 enforcement of federal, state or local regulations relating to air pollution control;

 monitoring the amb ient air quality;

 coordination and development of local air pollution control strategies for any

nonattainment areas as part of the Oregon Clean Air State Implementation Plan; and

 public education and outreach regarding air quality.

In order to enforce federal regulations, LRAPA must receive delegation of specific programs from the U.S. Environmental Protection Agency (EPA). In order to receive delegation, LRAPA must adopt the necessary regulations and have staff capable of implementing them. A contra ct with EPA is agreed upon and outlines federal, state and local commitments to operate delegated federal programs. In Oregon, the Environmental Quality Commission (EQC) and the Department of Environmental Quality (DEQ) are responsible for statewide envir onmental regulatory oversight, while LRAPA and its Board performs similar regulatory duties for air quality in Lane County.

What does LRAPA actually do?

LRAPA performs a variety of tasks. Foremost, it regulates statutorily identified categories of activi ty that contribute to air pollution. Additionally, it monitors the ambient air quality within its jurisdiction, responds to citizen concerns about potential air pollution, enforces federal and state air quality regulations, reviews applications for projec ts which require permits, and issues such permits. LRAPA administers air quality grants that provide funding directly to communities for emission reduction projects.

LRAPA also provide s public education and facilitate citizen involvement in local air qual ity issues. Further, LRAPA operate s in a transparent manner so as to ensure the public has access to information about current air quality and access to information concerning major sources of air pollution within its jurisdiction. Examples of LRAPA's

tr ansparency include its annual report and website.LRAPA Documentation of Maintenance of Effort (MOE) Page 4



### How is LRAPA funded? Generally, the operational funding of a Local Air Agency such as LRAPA is a combination of permit fees, federal and state grants, and contributions by local partner governments. LRAP A also receives Airmetrics enterprise revenues, unique among Local Air Agencies, from the local manufacture of portable air monitoring devices now sold throughout the world. Major industrial source programs unde r Title V of the f ederal Clean Air Act require the Agency to collect fees equal to the cost of operating the Title V air permit program. Other air quality protection programs required by state and federal law allow the Agency to establish fees that cover t he cost of the programs. Similarly, for minor emission source permitting programs (the various air contaminant discharge permits), the Agency is authorized to establish fees to cover the cost of the programs. Oregon law prevents LRAPA from receiving enfo rcement fines and penalties as a funding source. All LRAPA fines, after legal fees are recovered, are directed to the Lane County General Fund or up to 80% of a fine may be directed to a Supplemental Environmental Project.

To whom is LRAPA accountable?

L RAPA is a regional air quality control authority authorized by state statute (ORS 468A.105) and established by a local intergovernmental agreement between Lane County and the cities of Cottage Grove , Eugene, Oakridge and Springfield. LRAPA financial statements are audited annually by an independent auditor in accordance with the Government Auditing Standards issued by the U.S. Comptroller General. As an

EPA

- delegated program, the Agency receives perf ormance audits by the EPA as part of its audits of the overall Oregon programs. Most importantly, LRAPA is accountable to the citizens within its jurisdiction to faithfully perform its duties and thereby contribute to community health and well

- being.

W here can I find more information on the duties and procedures of the LRAPA

Board? The LRAPA Citizens Advisory Committee and LRAPA Board of Directors completed a

Handbook for Board Members in May 2012. It provides more details on the duties and mandates of LRAPA, as well as the responsibilities of board members, board protocols, characteristics of effective board members, notification of meetings, public disclos ure, ethics, and conflicts of interest. The handbook also outlines the corresponding duties of the LRAPA Citizens Advisory Committee and the LRAPA Executive Director and

includes references with more detailed information.LRAPA Documentation of Maintenance of Effort (MOE) Page 5



### AIR QUALITY PRIORITIES AND PROG RESS

What are the priorities of LRAPA? LRAPA updated its strategic plan in 2007 and has updated its strategic future priorities (and reviewed recent successes) each July since then. A copy of the July 2012 report is

linked here

.

What are the vision and mission of LRAPA that guides these priorities?

 Vision : "Community partners working together to ensure clean air for everyone."

 Mission : "To protect public health and the environment as a leader and advocate for the continuous improvement of air quality in Lane County."

What are the strategic goals of LRAPA to implement this vision and mission?

1. Air Quality : To ensure healthful air quality for all La ne County citizens.

2. Involvement : To inform and involve citizens and businesses in improving air quality.

3. Service : To serve citizens and other stakeholders fairly, courteously, and in a timely manner.

4. Partnerships : To work with our partners to leverage reso urces to make a difference in local air quality.

How is LRAPA doing on achieving these strategic goals and priorities? LRAPA and our partners are doing remarkably well, even in these difficult economic
times, as summarized in the linked letters and report s . For example:

 Air Quality : We have been remarkably successful in achieving and maintaining compliance with air quality health standards for particulate matter, ozone and carbon monoxide in Eugene for over 20 years, despite the tightening of national st andards in 1988, 1997, 2006, and 2008. See the progress an d trends in State of the Air

. Involvement : LRAPA provides local control and decision

- making, and frequent

meet ings/inspections of permitted facilities and asbestos abatement projects.

 Service : Annual surveys conducted by the LRAPA Advisory Committee consistently report exceptional staff service on p ermit modifications, permit renewals, new permit applications, an d c onstructi on permit r eviews. Industry representatives appreciate the focus at LRAPA to minimize air pollution by working with industrial sources to maximize compliance with the prescribed standards.

 Partnerships : Independent of business permitting progra ms (which pay their own way), LRAPA has been successful in leveraging other funds . For example, we provide $2.72 of services for every dollar of local dues, as well as $2.10 of pass

through funding assistance to businesses, schools and residents for clean air projects.LRAPA Documentation of Maintenance of Effort (MOE) Page 6



### BUDGET ANALYSIS

Economic Recession and Impacts on Oregon Budgets

Economic recessions generally impact Oregon deeper and last longer than the rest of the United States, and the current recession from 2008 to present is no exception.

Th e Oregon economic forecasts have resulted in a series of budget reductions in state general funds during FY2009, FY2010, FY2011, FY2012, and FY2013. These state general fund budget reductions have impacted both Oregon DEQ and LRAPA. Counties

and cities of Oregon have been similarly affected by the economic recession , and these county and city budget reductions have correspondingly impacted the local funding received by LRAPA.

Reduced S tate F unding for Lane Regional Air Protection Agency

Since mid

- way thr ough the 2007

- 2009 biennium, revenues to the General Fund of the State of Oregon have declined. In response, the state has reduced agency budgets through a variety of measures including across the board mandatory unpaid furlough leave for state employees, wage and spending freezes, eliminating normal budget increases for inflation and identifying specific work and associated spending cuts to agency budgets. Below is a link to the analysis of the Oregon 2011

- 2013 Legislatively Adopted B udget published by the Legislative Fiscal Office: http://www.leg.state.or.us/comm/lfo/2011

- 13%20LAB.pdf

For the 2011

- 2013 biennial budget, DEQ was required to provide the Legislature with General Fund cut options. The Legislature reduced agency General Fund by approximately 24 percent overall. No particular program was singled out for reductions. Air Quality’s General Fund was cut by 31 pe rcent, Water Quality’s by 31 percent and Land Quality by 44 percent, while General Fund for debt service increased to meet debt repayment obligations. Attachment A provides a summary of the DEQ 2011

- 2013 Legislatively Adopted Budget by program by fund type

.

The DEQ Air Quality budget includes state General Fund support for LRAPA as a separate item, Special Payments, in its biennial budget. As Air Quality is required to offer General Fund reductions in the budget development process, a similar percentage

o f LRAPA General funding is also offered as a reduction. Attachment B is the General Fund reduction list that DEQ submitted to the legislature. Reduction #3 on the Attachment B list ($112,544 for the biennium), is a 31% reduction to LRAPA General Fund sup port. Attachment C is the official Air Quality program budget for 2011

- 2013. The amounts that affect LRAPA are highlighted in yellow.

DEQ’s budget also includes General Fund support for current and former communities

that violate National Ambient Air Qual ity Standards for particulate. The funding helps the communities to implement woodstove curtailment efforts to attain and maintain compliance with national standards. LRAPA receives a small amount of state General Fund from this funding; however, it is em bedded in the Air Quality Services andLRAPA Documentation of Maintenance of Effort (MOE) Page 7



### Supplies budget and cannot be identified separately. Reduction #4 in Attachment B is a reduction of $76,105 to the $246,720 biennial funding for this work statewide.

Attachment D provides a summary of the amount of r educed state General Fund support for LRAPA in fiscal year 2012. In total, DEQ reduced General Fund support to LRAPA by $66,601, $58,981 from direct General Fund support and $7,620 from

woodstove curtailment.

Reduced Local F unding for Lane Regional Air Pr otection Agency

The budget crise s in Lane County from FY2008 to FY2013 ha ve been similarly severe

t o those of the State of Oregon. The Lane County budget reductions in recent years are

reviewed on its website . The most recent Lane County Budget in Brief is included as

Attachment E

.

For example, the Lane County general fund budget was reduced by 17 % in FY2013 , in

addition to the 1 1 % reduction in FY2012 , for a total reduction of about 26% over the 2

- year period (for comparison to the biennial reduction in State General Fund mentioned previously) . The linked and attached documents have additional details, but here is the Lane County budget overview for recent years (in $ millions) including the County General Fund which is most closely related to local LRAPA funding:

Budget Category FY2010 FY2011 FY20 12 FY2013 Total Budget All Funds $680.6 $644.6 $579.5 $479.1 County General Fund $111.0 $106.1 $94.2 $78.1

A few recent media articles on the budget crises in Lane County and the City of Eugene

are included as Attachment F

.

Cost

- Share Requir ements of Federal Air Grant Programs Under the Clean Air Act

Section 105 of the federal Clean Air Act provides grant assistance to state and local air agencies to support their continuing air pollution control programs. Section 105 contains

two cost

- shar ing provisions intended to ensure adequate recipient support: a minimum of 40% recipient match, and a maintenance of effort (MOE) requirement. MOE requires a recipient to expend at least as much for recurrent program activities each grant year

as it did th e previous grant year. The latest MOE guidance was provided by EPA on September 30, 2011.

LRAPA has consistently met the 40% minimum match criterion, and is projected to

con tinue to do so in future years. But as a result of the difficult economic conditio ns in recent years, LRAPA has experienced funding reductions from our major non

- federal revenue sources and must request an exception from the MOE requirements for

FY2012 and FY2013

.

The primary purpose of this report is to provide the necessary document ation for LRAPA to request a MOE exception from EPA consistent with the MOE guidance datedLRAPA Documentation of Maintenance of Effort (MOE) Page 8



### September 30, 2011. The MOE guidance includes ten questions to assist LRAPA and

EPA in the determination that MOE reductions are non

- selective ; responses to those

sp ecific questions are included in Attachment G. The MOE guidance also outlines several guideline to determine whether a non

- selective reduction in MOE is appropriate; the LRAPA responses to the four criteria applicable to LRAPA are:

 The LRAPA expenditure re ductions were the result of adverse economic
conditions;

 Air program expenditure reductions were the result of general reductions in the LRAPA budgets;

 Air program expenditures were not singled out for disproportionate reductions;

 Air program expenditures were not reduced in order to increase funding for programs or activities that clearly degrade air quality and jeopardize the public's

health.

LRAPA is a local s ingle

- purpose air quality agency, and the LRAPA Board of Directors

is the fiscal decision

- maki ng body and executive agency for MOE calculation purposes. But it is not surprising that overall MOE reductions at LRAPA mirror the overall

reductions in state and local general funding. For example, the actual LRAPA MOE

reduction between FY2011 and FY2012 is about 12% compared to an 11% reduction in Lane County General Fund for the same period; and similarly, the projected 2

- year LRAPA MOE reduction between FY2011 and FY2013 is about 25% compared to a 26% reduction in Lane County General Fund and a 24% red uction in State General Fund for the same period.

Economic Recession and Impact on LRAPA Budget

LRAPA has had to grapple with the difficult economic conditions and variable levels of

fi nancial support in recent years

. In order to operate within its FY2012 and FY2013 budgets, LRAPA implemented a combination of unpaid furlough days, schedule reductions, and systematic across

- the

- board reductions wherever possible in materials

& services expenses. In addition, open positions resulting from retirements or

res ignations were left vacant, with the related responsibilities redistributed, reduced, postponed or eliminated. The net result was an overall non

- selective reduction across all LRAPA programs.

For example, in order to stay within budget, LRAPA had to imple ment most of the contingency measures in its 5

- year budget plan and reduced staffing from 23.4 FTE in

the FY2008 budget to 19.3 FTE in the FY2012 proposed budget and then 16.5 FTE in

the final FY2012 budget

. The contingency measures in FY2012 included the elimination of all air toxics monitoring in Lane County, a significant reduction in travel & training and materials & services, and a reduction of almost three FTE :

 0.2 FTE from 12 furlough days per year by the director and managers;

 0.2 FTE from four furl ough days (total office closures) per year by all staff;

 0.3 FTE elimination of part

- time and intern staffing;

 0.5 FTE reduction in Airmetrics staffing;

 0.5 FTE reduction in woodstove replacement program staffing;LRAPA Documentation of Maintenance of Effort (MOE) Page 9



###  0.5 FTE reduction in airshed planning staf fing;

 0.2 FTE reduction in monitoring staffing;

 0.2 FTE reduction in permitting staffing; and

 0.2 FTE reduction in compliance staffing.

In FY2013, three positions from retirement or resignations were left vacant, with the related responsibilities redistri buted, reduced, postponed or eliminated , and the furlough days and schedule reductions were discontinued. These FTE reductions affect ed all staff directly or indirectly

. For example, the reduction in staffing of the woodstove replacement program require d a team effort by other existing staff to fill this gap and complete the project ; the reduction in airshed planning staffing require d a team effort to fill that gap and complete the Oakridge PM 2.5 

### Attainment Plan

.

These FTE reductions, as well as reduction s in materials & services and travel & training, affected all of the LRAPA air p r ograms . The reductions significantly reduce d

the amount of non

- mandated ambient air monitoring and the number of compliance inspections and complaint responses. LRAPA p rograms continue to be implemented on a priority basis.

LRAPA Budget Reductions and Effect on MOE

The following series of stacked

- bar charts (Figures A, B and C) illustrate the LRAPA budget reductions and the effect on the MOE calculation.LRAPA Documentation of Maintenance of Effort (MOE) Page 10



### Figure A illustrat es that LRAPA met the MOE requirement (i.e., MOE requires a recipient to expend at least as much for recurrent program activities each grant year as it did the previous grant year) in FY2009, FY2010, and FY2011, but did not meet the MOE requirement in FY20 12 and is not projected to meet the MOE requirement in

FY2013 . The MOE data is summarized as follows:

 Actual MOE = $1,010,832 in FY 2008 (July 1, 2007 to June 30, 2008);

 Actual MOE = $1,064,539 in FY 2009 (July 1, 2008 to June 30, 2009);

 Actual MOE = $1,06 7,889 in FY 2010 (July 1, 2009 to June 30, 2010);

 Actual MOE = $1,068,396 in FY 2011 (July 1, 2010 to June 30, 2011);

 Actual MOE = $935,855 in FY 2012 (July 1, 2011 to June 30, 2012); and

 Projected MOE = $800, 3 13 in FY 2013 (July 1, 2012 to June 30, 2013).LRAPA Documentation of Maintenance of Effort (MOE) Page 11



### Figure B illustrates that the MOE

- related expenditures were reduced in all categories in FY2012 as a result of the overall LRAPA budget reductions, and that MOE

- related expenditures will be further reduced in FY2013.LRAPA Documentation of Maintenance of Effort (MOE) Page 12



### Figure C illustrates that the reductions in MOE in FY2012 and FY2013 are the result of funding reductions from all of the major LRAPA non

- federal revenue sources

.

Detailed LRAPA FY2012 Budget Analysis

The following series of pie charts (Figures 1

- 11) illustrate in more detail the LRAPA budget and resource allocation for FY2012

. These figures are not directly comparable to the previous MOE graphs since they include all budgeted core revenues (including federal funds and Title V permit fees that are not part of the MOE calculation) but they are useful for illustrating the range of air quality programs within the LRAPA core budget.LRAPA Documentation of Maintenance of Effort (MOE) Page 13



### The first pie chart summarizes the budgeted LRAPA core revenue sources for the most recently completed budget year (July 1, 2011 through June 30, 2012). Various permit fees provide d about 65% of the LRAPA core revenue, and the various general fund sources (local, state and federal) provide d about 32%. [When LRAPA began in 1968, all of the funding was f r om general fund sources.]LRAPA Documentation of Maintenance of Effort (MOE) Page 14



### The various general fun d revenue sources are broken down in the second graph. Local

contributions are required to at least equal state general funds. Local and state funds in turn are used to provide match for the federal funds and to help meet the Maintenance

of Effort (MOE) re quirements for federal air grants. [Major industry permit fees (i.e., Title V), federal grants, and non

- recurring expenses are not included in the MOE calculations.]LRAPA Documentation of Maintenance of Effort (MOE) Page 15



### The various permit fee revenue sources are broken down in the third graph.LRAPA Documentation of Maintenance of Effort (MOE) Page 16



### T he fourth graph summarizes the LRAPA staff time distribution for calendar year 2011. Overall, the permit fees at least cover the costs of the permitting programs, although there are some fluctuations from year to year due to the number of projects requirin g permit fees (e.g., asbestos abatement work related to demolition or renovation projects) or startup costs of new programs (e.g., gasoline dispensing facilities, autobody shops).LRAPA Documentation of Maintenance of Effort (MOE) Page 17



### The fifth graph summarizes the major LRAPA programs provided by gener al funds during 2011

- 2012. The costs of these programs slightly exceed the amount of general fund revenues during 2011

- 2012; the difference is provided by reserves or other funds.LRAPA Documentation of Maintenance of Effort (MOE) Page 18



### The sixth graph summarizes the geographic areas of these same LRAPA programs provided by general funds during 2011

- 2012.LRAPA Documentation of Maintenance of Effort (MOE) Page 19



### The seventh graph summarizes the geographic areas of LRAPA monitoring and reporting during 2011

- 2012. Most of the monitoring is in Eugene (based on population and air quality maintenance reasons) a nd Oakridge (based on PM attainment and maintenance reasons).LRAPA Documentation of Maintenance of Effort (MOE) Page 20



### The eighth graph summarizes the LRAPA monitoring and reporting during 2011

- 2012 by pollutant. Most of the monitoring is for PM2.5 purposes.

The next t wo graphs (Figures 9 and 10) sum marize the locations and sources of air pollution complaints during 2011

- 2012.LRAPA Documentation of Maintenance of Effort (MOE) Page 21LRAPA Documentation of Maintenance of Effort (MOE) Page 22



### The last graph summarizes the population s of LRAPA's intergovernmental partne rs, which is the calculation basi s for requested dues from the partners

.

CONCLUSION S REGARDING MAINTENANCE OF EFFORT REQUIREMENTS

The Lane Regional Air Protection Agency (LRAPA) needs to request an exception, due to economic circumstances, from the maintenance

- of

- effort (MOE) requirements of the continuing air grant program under sectio n 105 of the federal Clean Air Act.

LRAPA is a local single

- purpose air quality agency authorized to implement most aspects of state air quality rules and the federal Clean Air Act. The chief executive is the

LRAPA Executive Director and the fiscal deci sion

- making body is the 9

- member LRAPA

Board of Directors.

LRAPA has had to grapple with difficult economic conditions and variable levels of financial support in recent years. Economic recessions generally impact Oregon deeper and last longer than the r est of the United States, and the current recession from 2008LRAPA Documentation of Maintenance of Effort (MOE) Page 23



### to present is no exception. As a result, LRAPA has experienced funding reductions from its major non

- federal revenue sources and must request an exception from the MOE requirements for FY2012 an d FY2013.

LRAPA has evaluated its expenditure reductions in FY2012 (and its projected expenditures in FY2013) in accordance with the September 30, 2011 EPA guidance on MOE exceptions. LRAPA believes its situation clearly meets the EPA criteria.

 The expe nditure reductions were the result of adverse economic conditions;

 Air program expenditure reductions were the result of general reductions in the LRAPA budgets;

 Air program expenditures were not singled out for disproportionate reductions;

 Air program ex penditures were not reduced in order to increase funding for programs or activities that clearly degrade air quality and jeopardize the public's

health.

As a single

- purpose air quality agency, most of the LRAPA programs are closely related

to section 105 program implementation. The major exception is the Title V industrial permitting

- compliance program which relies on dedicated permit fees, and which is excluded and separate from the MOE calculations.

In order to operate within its FY2012 and FY2013 budg ets, LRAPA implemented a combination of unpaid furlough days, schedule reductions, and systematic across

- the

board reductions wherever possible in materials & services expenses. In addition, open positions resulting from retirements or resignations were l eft vacant, with the related responsibilities redistributed, reduced, postponed or eliminated. The net result was an overall reduction across all LRAPA programs.

Therefore, LRAPA specifically requests that EPA reset its MOE, for the purposes of meeting th e statutory cost

- sharing provisions in section 105 of the Clean Air Act, to the following:

 $935,855 in FY 2012 (July 1, 2011 to June 30, 2012); and

 $800, 3 13 in FY 2013 (July 1, 2012 to June 30, 2013).

MLH:mlh (1 2/ 31 /2012)

# Attachment AEnvironmental Quality, Dept ofAgency Number: 34000Agencywide Program Unit SummaryVersion: Z - 01 - Leg. Adopted Budget2011-13 Biennium2011-13 LegAdoptedBudgetSummaryCross ReferenceNumber2011-13AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09Actuals2011-13Governor'sRec. BudgetCross Reference Description001-00-00-00000Air QualityGeneral Fund9,557,9995,279,0475,909,2658,249,6647,633,0537,768,464Other Funds31,479,70540,029,53441,040,25742,977,67538,514,72238,514,722Federal Funds4,897,1997,247,9638,446,4688,781,4187,447,3957,447,395All Funds45,934,90352,556,54455,395,99060,008,75753,595,17053,730,581002-00-00-00000Water QualityGeneral Fund19,407,89713,207,53016,192,55321,364,98519,126,50019,314,798Lottery Funds5,610,1714,502,1973,133,1535,632,9375,415,7175,426,117Other Funds17,714,77122,264,45023,748,72222,053,40521,165,01421,168,587Federal Funds10,606,01912,116,11212,117,29912,538,37012,049,06612,049,066All Funds53,338,85852,090,28955,191,72761,589,69757,756,29757,958,568003-00-00-00000Land QualityGeneral Fund2,091,894540,805587,7611,925,335967,313995,736Other Funds46,356,87455,715,33156,043,66756,407,86455,581,88855,581,888Federal Funds10,473,86710,412,17010,938,95511,337,45715,408,60415,408,604All Funds58,922,63566,668,30667,570,38369,670,65671,957,80571,986,228004-00-00-00000Agency ManagementOther Funds20,666,41521,815,82521,943,51423,338,01321,249,53421,249,534_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Agencywide Program Unit Summary - BPR010Environmental Quality, Dept ofAgency Number: 34000Agencywide Program Unit SummaryVersion: Z - 01 - Leg. Adopted Budget2011-13 Biennium2011-13 LegAdoptedBudgetSummaryCross ReferenceNumber2011-13AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09Actuals2011-13Governor'sRec. BudgetCross Reference Description005-00-00-00000Cross-MediaGeneral Fund674,001666,592699,386742,324658,776658,776Other Funds354,164162,162162,168171,191149,645149,645Federal Funds475,422951,8701,094,9451,127,6601,030,2491,030,249All Funds1,503,5871,780,6241,956,4992,041,1751,838,6701,838,670008-00-00-00000Non-LimitedOther Funds133,527,390109,516,601109,516,601110,225,000174,778,200174,778,200009-00-00-00000PCBF Debt ServiceGeneral Fund4,712,8405,379,5685,573,1805,573,1804,592,3534,592,353Other Funds4,643,29216,388,80116,388,80116,388,80115,492,54815,492,548All Funds9,356,13221,768,36921,961,98121,961,98120,084,90120,084,901TOTAL AGENCYGeneral Fund36,444,63125,073,54228,962,14537,855,48832,977,99533,330,127Lottery Funds5,610,1714,502,1973,133,1535,632,9375,415,7175,426,117Other Funds254,742,611265,892,704268,843,730271,561,949326,931,551326,935,124Federal Funds26,452,50730,728,11532,597,66733,784,90535,935,31435,935,314All Funds323,249,920326,196,558333,536,695348,835,279401,260,577401,626,682_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Agencywide Program Unit Summary - BPR010

# Attachment B

### Oregon Department of Environmental Quality

2011 - 2013 Biennium Agency Number: 34000

Detail of General Reductions Incorporated in 2011-13 Legislatively Adopted Budget

1 2 3 4 5 6 7 12 16

Dept.

Initials Prgm. or

Activity

Initials Program Unit/Activity Description An Rec
Pkg 085 An Rec

Pkg 090 LFO Rec

Pkg 810 TOTAL

FUNDS POS FTE POS FTE POS FTE Impact of Reduction on Services and Outcomes

Dept Prgm/

Div

1 3 DEQ AQ Air Quality Monitoring Efficiencies 265,487 $ 265,487 $ 2 1.50 The Air Monitoring section has streamlined operations which reduces staffing needs. They reduced quality assurance, network review and audit frequencies. Using regional staff or contractors to collect samples at remote sites saves travel time and costs. New data management system also provides efficiencies. EPA is adding many new monitoring requirements and normally these resources would be

shifted to cover some of the new work.

2 1 DEQ LQ Eliminate .50 Hazardous Waste manager position in Eastern Region 175,516 $ 175,516 $ 0 0.50 Consolidate Solid Waste & Hazardous Waste sections in Eastern Region, resulting in a larger span of control and expanded areas of responsibility. Could result in less manager attention to some program

issues.

3 2 DEQ AQ Reduce Support for Lane Regional Air
Protection Agency 112,544 $ 112,544 $ 0

- This cut would result in an across the board reduction for LRAPA through furloughs or other reductions. It would reduce the amount of inspections, air monitoring, reporting, forecasting, complaint responses, permits issued, enforcement actions, grant applications, and open office hours.

4 1 DEQ AQ Reduce Local Government Air Quality

Outreach 76,105 $ 76,105 $ 0

- Reduces funding for local government fine particulate reduction outreach. DEQ’s support for these former non-attainment areas is a federal requirement of the State Implementation Plan (SIP). Work
supported includes: daily air quality advisories, voluntary woodstove curtailment programs and conducting wood smoke public education activities to reduce emissions. May result in higher fine particulate emissions or in some communities, violation of the federal standard.

5 4 DEQ AQ Reduce Air Toxics Outreach 132,957 $ 132,957 $ 1 0.50 Cuts outreach work to reduce benzene and PAH emissions, two of the most significant toxic air pollutants. Reduction efforts target dry cleaners, gas stations and development of community burn ban

and woodstove ordinances.

6 2 DEQ LQ Shift a portion of existing Ballast Water program to new fee funding authorized in

SB 81 23,615 $ 23,615 $ 0

- Shifts program funding to fee funding sooner than planned, leaving less 2013-15 beginning balance for industry-supported increase in technical assistance and compliance efforts.

7 11 DEQ AQ Reduce Clean Diesel work 254,762 $ 254,762 $ 1 1.00 Reduce overall clean diesel work. The immediate impact would be eliminating the Fleet Forward clean diesel recognition program. The program recognizes fleets that burn less fuel, cleaner fuel and reduce diesel exhaust. Long term the reduction to education and outreach will make it more difficult to reach the statutatory goal to reduce the excess cancer risk from diesel engine emissions by 2017.

8 1 DEQ WQ Reduce State Water Quality Permitting,

WPCF 393,105 $ 393,105 $ 2 2.00 Reduces inspections, technical assistance and permit renewals for permittees that land apply their effluent. Permit renewals will be delayed. This means that DEQ will be unable to assure the public
that permitted discharges are in compliance and potential water pollution violations will go unchecked.

9 9 DEQ AQ Eliminate Carbon Monoxide and PM 10
Monitoring 211,336 $ 211,336 $ 0 1.00 Eliminates carbon monoxide sites in Medford and Portland and four PM10 sites (Klamath Falls, Medford, Grants Pass, and Pendleton). The loss of the CO sites would eliminate the last two CO monitoring sites in the state. CO is a good indicator of vehicle emissions, including benzene. The four PM10 sites are in former non-attainment areas, and are an important component of the current plans to
maintain air quality in those areas.

10 5 DEQ AQ Reduce State Air Permitting (ACDP) 374,984 $ 374,984 $ 3 1.65 Eliminate most of remaining GF from ACDP, leaving less than 2 FTE of non-fee funded FTE in the program. Will reduce facility inspections and compliance oversight, eliminate coordinated inspector training and delay or eliminate outreach materials for new sources.

11 3 DEQ LQ Reduce Hazardous Waste compliance 206,582 $ 206,582 $ 1 0.95 Reduces Hazardous Waste compliance staff by about 10%. Reduces ability to inspect generator and TSD facilities and follow up on compliance issues, to respond to complaints and to maintain current TSD permits.

12 8 DEQ AQ Reduce Fine Particulate Planning 165,720 $ 165,720 $ 1 1.00 Eliminates an Air Quality Planner developing and coordinating fine particulate reduction strategies and carrying out mandatory CAA requirements for new federal standards. Delays work to develop an air quality plan for returning Klamath Falls and Lakeview air to healthy levels. Extended violation of the fine particulate standard negatively impacts public health and economic development in the area. Postpones pollution prevention outreach and strategy development in Oregon communities at risk of violating federal standards.

13 3 DEQ WQ Reduce Toxics Monitoring and Mixing

Zone Studies 106,367 $ 749,309

$ 855,676 $ 0 0.75 4 4.00 Reduces work in the Water Quality Toxics Monitoring program and eliminates mixing zone studies for

small communities. This means: • Fewer monitoring samples will be taken from rivers and streams and analyzed. DEQ will have less data and information regarding the toxic pollutants found in water and fish in Oregon’s rivers and

streams. • DEQ will stop doing mixing zone studies for small communities. This means all municipalities will be required to conduct their own mixing zone studies as part of the water permit renewal process. There will be additional costs to the communities that DEQ has previously assisted with this permit
requirement. • Development of maps and other visual tools that geographically depict where toxics monitoring was done and the monitoring results will not be readily available to the public. DEQ has had frequent requests from the public for this information to date. • Remaining staff in the toxics monitoring program will not have administrative support to do copying, filing, mailings, scheduling and database work. • Reduced ability to develop informational materials for the public or conduct public outreach regarding the results of the toxics monitoring results.

14 6 DEQ WQ Reduce Water Quality Enforcement 204,270 $ 204,270 $ 1 1.00 Reduces enforcement capabilities for water quality violations. This means there will be reduced compliance with legal requirements, fewer Supplemental Environmental Projects funded by violators, and less civil penalty money contributed to the General Fund. An Rec 085 LFO Pkg 810

Priority

(ranked with lowest priority

first) An Rec 090

\\server01\Users\MLH\My Documents\LRAPA Overview\Budget\Maintenance of Effort - MOE\Attachment B - DEQ 2011-13 GF Reductions including LRAPAAttachment B - DEQ 2011-13 GF Reductions including LRAPA11-13 LAB GF Red Option Status

### Oregon Department of Environmental Quality

2011 - 2013 Biennium Agency Number: 34000

Detail of General Reductions Incorporated in 2011-13 Legislatively Adopted Budget

1 2 3 4 5 6 7 12 16

Dept.

Initials Prgm. or

Activity

Initials Program Unit/Activity Description An Rec
Pkg 085 An Rec

Pkg 090 LFO Rec

Pkg 810 TOTAL

FUNDS POS FTE POS FTE POS FTE Impact of Reduction on Services and Outcomes

An Rec 085 LFO Pkg 810

Priority

(ranked with lowest priority

first) An Rec 090

15 7 DEQ AQ Reduce Air Emission Inventory 198,121 $ 198,121 $ 1 1.00 Delays air toxics and fine particulate planning work. Emission inventory is the scientific underpinning of air quality planning, including identification of sources, determining baseline emission levels, evaluating the benefits of proposed emission reduction strategies, and meeting federal technical requirements. With fewer resources, DEQ will have to delay planning efforts to reduce air quality
health impacts.

16 10 DEQ AQ Reduce Fine Particulate Monitoring 197,277 $ 197,277 $ 2 1.30 Reduce fine particulate Federal Reference Method samplers in McMinnville, Portland, Madras and the Klamath Falls background site. These sites have the lowest PM readings and normally when sufficient data has been collected, DEQ would shift the samplers to new areas where air quality is unknown.

17 2 DEQ WQ Reduce Wastewater PermittingStormwater 595,757 $ 595,757 $ 4 3.50 DEQ would not be able to meet the commitments made for the Stormwater program. Specifically,

DEQ would: • Reduce inspections and compliance activities for industrial and construction sites. This means that DEQ will be unable to assure the public that permitted industrial and construction discharges are in
compliance and potential water pollution violations will go unchecked. • Reduce permit issuance. This means that all stormwater permit issuance and responses to proposed
new construction projects will be delayed. • Commitments to reissue the 1200Z industrial stormwater permit by August 2011 that is included in the settlement agreement with Northwest Environmental Defense Center and Columbia Riverkeeper would

not be met.

18 7 DEQ WQ Reduce Wastewater Permitting 248,139 $ 381,100

$ 629,239 $ 1 1.00 PARTIALLY IMPLEMENTED
Reduces capacity in the wastewater permit program. This means that municipal permits will take longer to issue, the backlog goal of 10% will not be met, and the timelines for inputting data into EPA's compliance database will not be met. DEQ’s ability to ensure consistent and up-to-date implementation of permit program policies will be reduced significantly. DEQ’s ability to ensure water quality issues are addressed through permits will be significantly reduced.

19 6 DEQ AQ Reduce Air Toxics Monitoring 265,430 $ 265,430

$ 2 1.00 This would cut the air toxics monitor in Klamath Falls or a monitor in Medford. This reduction, together with a monitor cut in 2009-2011 would significantly undermine DEQ's air toxics monitoring effort. The monitors were added in the 2007 budget in response to substantial public interest. When sufficient data is accumulated, the Klamath Falls monitor (previously Salem) will move to a new location, which will provide air toxics information in another part of the state.

20 4 DEQ WQ Reduce Willamette TMDL Implementation 554,642 $ 505,754

$ 1,060,396 $ 2 2.00 2 2.00 Significantly reduces implementation work associated with the Willamette TMDL. This work includes: • Providing technical assistance to local communities, watershed councils, local governments, other state agencies, federal agencies, businesses, citizens, and other groups in the Willamette Basin for implementing watershed restoration and pollution control activities. • Collecting and analyzing mercury data to ensure DEQ, communities and other stakeholders can better understand how mercury affects the environment and make cost-effective decisions about mercury reduction strategies. • Conducting compliance reviews for all stormwater annual reports submitted by local governments

associated with the Willamette TMDL.

This reduction option package includes a manager position.

21 10 DEQ WQ Reduce Biosolids Management, Compliance Support and Complaints
Response 305,221 $ 305,221

$ 1 1.70 PARTIALLY IMPLEMENTED Reduces staff responding to the public about illegal discharges to the environment and complaints about non-permitted sources of pollution by 25%. Will greatly limit DEQ's ability to assist and respond to the public and impact permit timeliness and inspection frequency because permit staff will need to respond to significant complaint issues.

Reduces DEQ’s timely response to grant site authorizations for the land application of municipal and industrial biosolids by 40%. Reduces capacity to issue Water Pollution Control Facilities permits that
have a biosolids component.

Eliminates a compliance position that works with EPA, permit writers and permittes on compliance activities. Reduced effort in coordinating with other state agencies on permitting issues related to mining and water quality. Fewer resources to address DEQ’s general permit backlog. This means
there will be a delay in evaluating and inconcorporating new water quality requirementes into expired general permits. In addition, DEQ cannot register new facilities to expired permits which makes them
vulnerable to third party lawsuits.

22 8 DEQ WQ Reduce Water Quality Information Services and Support 157,415 $ 285,057 $ 442,472

$ 1 1.00 1 1.00 Eliminates a manager position in the water quality program focused on information technology and process efficiencies. Staff to manager ratio will increase. The Water Quality program will have less
support in organizing rulemaking hearings, responding to public comments and conducting background

research. This means that technical staff will have less time to focus on the technical work.

\\server01\Users\MLH\My Documents\LRAPA Overview\Budget\Maintenance of Effort - MOE\Attachment B - DEQ 2011-13 GF Reductions including LRAPAAttachment B - DEQ 2011-13 GF Reductions including LRAPA11-13 LAB GF Red Option Status

### Oregon Department of Environmental Quality

2011 - 2013 Biennium Agency Number: 34000

Detail of General Reductions Incorporated in 2011-13 Legislatively Adopted Budget

1 2 3 4 5 6 7 12 16

Dept.

Initials Prgm. or

Activity

Initials Program Unit/Activity Description An Rec
Pkg 085 An Rec

Pkg 090 LFO Rec

Pkg 810 TOTAL

FUNDS POS FTE POS FTE POS FTE Impact of Reduction on Services and Outcomes

An Rec 085 LFO Pkg 810

Priority

(ranked with lowest priority

first) An Rec 090

23 5 DEQ WQ Reduce Groundwater Protection Program

- $ NOT IMPLEMENTED DEQ would no longer do work associated with any of the Groundwater Management Areas (GWMAs) that are located in the Lower Umatilla Basin, Northern Malheur County, and in the Southern Willamette Valley. The work associated with the GWMAs includes: • Implementation and monitoring of Groundwater Management Areas where the water quality has been degraded, beneficial uses are seriously impaired, and public health may be at risk in part from nonpoint source groundwater pollution • Technical assistance to communities and watershed councils engaged in groundwater pollution prevention efforts.

- $

2,694,549 $ 6,161,033

$ 855,708

$ 7,146,572

$ 13 13.25 16 14.40 4 3.70
An Rec 085 - 2009-11 Across the Board GF Reductions Implemented as 2011-13 Reductions in the Analysts Recommended
An Rec 090 - GF Reduction Options Implemented as 2011-13 Reductions in the Analysts Recommended

GENERAL OTHER FEDERAL

18 7 DEQ WQ Reduce Wastewater Permitting 483,194 $ 236,066 $ 85,832

$ 4 4.00

21 10 DEQ WQ Reduce Biosolids Management, Compliance Support and Complaints
Response 316,806 $

- $

-

$ 2 1.30

23 5 DEQ WQ Reduce Groundwater Protection Program 909,010 $

- $

-

$ 4 4.00

1,709,010 $ 236,066 $ 85,832

$ 10 9.30 Highlighted Cell Are Reduction Options Not Implemented in the LAB

\\server01\Users\MLH\My Documents\LRAPA Overview\Budget\Maintenance of Effort - MOE\Attachment B - DEQ 2011-13 GF Reductions including LRAPAAttachment B - DEQ 2011-13 GF Reductions including LRAPA11-13 LAB GF Red Option Status

# Attachment CEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsLIMITED BUDGET (Excluding Packages)PERSONAL SERVICESGeneral Fund4,596,0174,294,6004,109,7744,109,7744,596,0174,596,017Other Funds31,145,82424,291,19227,635,45127,635,45131,145,82431,145,824Federal Funds4,571,1583,448,6284,166,3064,166,3064,571,1584,571,158All Funds40,312,99932,034,42035,911,53135,911,53140,312,99940,312,999SERVICES & SUPPLIESGeneral Fund3,125,3613,493,7443,260,7723,125,3613,125,3613,125,361Other Funds10,000,2056,550,84810,000,20510,000,20510,000,20510,000,205Federal Funds1,056,2251,152,9861,056,2251,056,2251,056,2251,056,225All Funds14,181,79111,197,57814,317,20214,181,79114,181,79114,181,791CAPITAL OUTLAYGeneral Fund32,989349,25032,98932,98932,98932,989Other Funds687,692637,665687,692687,692687,692687,692Federal Funds158,500-158,500158,500158,500158,500All Funds879,181986,915879,181879,181879,181879,181SPECIAL PAYMENTSGeneral Fund364,9291,420,405364,929364,929364,929364,929Other Funds191,374-191,374191,374191,374191,374Federal Funds2,066,364295,5852,066,3642,066,3642,066,3642,066,364All Funds2,622,6671,715,9902,622,6672,622,6672,622,6672,622,667_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsTOTAL LIMITED BUDGET (Excluding Packages)General Fund8,119,2969,557,9997,768,4647,633,0538,119,2968,119,296Other Funds42,025,09531,479,70538,514,72238,514,72242,025,09542,025,095Federal Funds7,852,2474,897,1997,447,3957,447,3957,852,2477,852,247All Funds57,996,63845,934,90353,730,58153,595,17057,996,63857,996,638AUTHORIZED POSITIONS246237246246246246AUTHORIZED FTE238.91230.09236.27236.27238.91238.91LIMITED BUDGET (Essential Packages)010 NON-PICS PSNL SVC / VACANCY FACTORPERSONAL SERVICESGeneral Fund(22,874)---(22,874)(22,874)Other Funds130,830---130,830130,830Federal Funds28,960---28,96028,960All Funds136,916---136,916136,916021 PHASE-INSERVICES & SUPPLIESOther Funds80,494---80,49480,494022 PHASE-OUT PGM & ONE-TIME COSTSSERVICES & SUPPLIESFederal Funds(14,651)---(14,651)(14,651)SPECIAL PAYMENTS_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsFederal Funds(449,457)---(449,457)(449,457)031 STANDARD INFLATIONSERVICES & SUPPLIESGeneral Fund87,179---87,17987,179Other Funds347,926---347,926347,926Federal Funds35,928---35,92835,928All Funds471,033---471,033471,033CAPITAL OUTLAYGeneral Fund792---792792Other Funds16,505---16,50516,505Federal Funds3,805---3,8053,805All Funds21,102---21,10221,102SPECIAL PAYMENTSGeneral Fund8,758---8,7588,758Other Funds4,593---4,5934,593Federal Funds38,806---38,80638,806All Funds52,157---52,15752,157033 EXCEPTIONAL INFLATIONSERVICES & SUPPLIESGeneral Fund56,513---56,51356,513SPECIAL PAYMENTS_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsOther Funds1,252---1,2521,252Federal Funds7,340---7,3407,340All Funds8,592---8,5928,592050 FUNDSHIFTSPERSONAL SERVICESOther Funds156,428---156,428156,428Federal Funds(155,811)---(155,811)(155,811)All Funds617---617617SERVICES & SUPPLIESOther Funds13,606---13,60613,606Federal Funds(13,606)---(13,606)(13,606)All Funds------TOTAL LIMITED BUDGET (Essential Packages)General Fund130,368---130,368130,368Other Funds751,634---751,634751,634Federal Funds(518,686)---(518,686)(518,686)All Funds363,316---363,316363,316LIMITED BUDGET (Current Service Level)General Fund8,249,6649,557,9997,768,4647,633,0538,249,6648,249,664Other Funds42,776,72931,479,70538,514,72238,514,72242,776,72942,776,729Federal Funds7,333,5614,897,1997,447,3957,447,3957,333,5617,333,561_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsAll Funds58,359,95445,934,90353,730,58153,595,17058,359,95458,359,954AUTHORIZED POSITIONS246237246246246246AUTHORIZED FTE238.91230.09236.27236.27238.91238.91LIMITED BUDGET (Policy Packages)PRIORITY 0085 2009-11 ALLOTMENT REDUCTION ROLL-UPSPERSONAL SERVICESGeneral Fund(345,966)----(345,966)Federal Funds3,878----3,878All Funds(342,088)----(342,088)SERVICES & SUPPLIESGeneral Fund(117,642)----(117,642)AUTHORIZED POSITIONS(3)----(3)AUTHORIZED FTE(2.50)----(2.50)086 ELIMINATE INFLATIONPERSONAL SERVICESOther Funds(6,333)----(6,333)Federal Funds(2,736)----(2,736)All Funds(9,069)----(9,069)SERVICES & SUPPLIESGeneral Fund(64,891)----(64,891)_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsOther Funds(159,522)----(159,522)Federal Funds(16,915)----(16,915)All Funds(241,328)----(241,328)CAPITAL OUTLAYGeneral Fund(792)----(792)Other Funds(16,505)----(16,505)Federal Funds(3,805)----(3,805)All Funds(21,102)----(21,102)SPECIAL PAYMENTSGeneral Fund(8,758)----(8,758)Other Funds(4,946)----(4,946)Federal Funds(40,874)----(40,874)All Funds(54,578)----(54,578)087 PERSONAL SERVICE ADJUSTMENTSPERSONAL SERVICESGeneral Fund(232,493)----(232,493)Other Funds(1,728,474)----(1,728,474)Federal Funds(244,496)----(244,496)All Funds(2,205,463)----(2,205,463)SERVICES & SUPPLIESGeneral Fund(44,172)----(44,172)_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09Actuals090 ANALYST ADJUSTMENTSPERSONAL SERVICESGeneral Fund(1,039,536)----(1,039,536)Other Funds(11,714)----(11,714)Federal Funds24,855----24,855All Funds(1,026,395)----(1,026,395)SERVICES & SUPPLIESGeneral Fund(373,605)----(373,605)Federal Funds(3)----(3)All Funds(373,608)----(373,608)SPECIAL PAYMENTSGeneral Fund(112,544)----(112,544)AUTHORIZED POSITIONS(6)----(6)AUTHORIZED FTE(6.40)----(6.40)801 TARGETED STATEWIDE ADJUSTMENTSSERVICES & SUPPLIESGeneral Fund-----(168,214)802 VACANT POSITION SAVINGSPERSONAL SERVICESOther Funds-----(812,126)AUTHORIZED POSITIONS-----(8)_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsAUTHORIZED FTE-----(6.26)805 BUDGET RECONCILIATION ADJUSTMENTS (SB 5508)SERVICES & SUPPLIESGeneral Fund-----(507)Other Funds-----(7,575)Federal Funds-----(814)All Funds-----(8,896)810 LFO ANALYST ADJUSTMENTSPERSONAL SERVICESGeneral Fund-----(184,593)SERVICES & SUPPLIESGeneral Fund-----(80,837)AUTHORIZED POSITIONS-----(2)AUTHORIZED FTE-----(1.00)819 SUPPLEMENTAL STATEWIDE ENDING BALANCEPERSONAL SERVICESGeneral Fund-----(98,051)SERVICES & SUPPLIESGeneral Fund-----(88,548)CAPITAL OUTLAYGeneral Fund-----(1,095)_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsSPECIAL PAYMENTSGeneral Fund-----(8,373)PRIORITY 3111 IMPLEMENT NEW FEDERAL AIR QUALITY STANDARDSPERSONAL SERVICESFederal Funds662,593---701,157-SERVICES & SUPPLIESFederal Funds101,394---103,825-CAPITAL OUTLAYFederal Funds256,000---256,000-AUTHORIZED POSITIONS6---6-AUTHORIZED FTE5.00---5.00-PRIORITY 6110 IMPLEMENT NEW FEDERAL GREENHOUSE GAS PERMITSPERSONAL SERVICESOther Funds166,269---175,946-Federal Funds152,972---161,875-All Funds319,241---337,821-SERVICES & SUPPLIESOther Funds24,753---25,000-Federal Funds24,732---25,000-_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsAll Funds49,485---50,000-AUTHORIZED POSITIONS2---2-AUTHORIZED FTE2.00---2.00-PRIORITY 15112 AIR QUALITY PASS THROUGH GRANTSSPECIAL PAYMENTSFederal Funds195,312---200,000195,312TOTAL LIMITED BUDGET (Policy Packages)General Fund(2,340,399)----(2,970,617)Other Funds(1,736,472)---200,946(2,747,195)Federal Funds1,112,907---1,447,857(85,598)All Funds(2,963,964)---1,648,803(5,803,410)AUTHORIZED POSITIONS(1)---8(19)AUTHORIZED FTE(1.90)---7.00(16.16)TOTAL LIMITED BUDGET (Including Packages)General Fund5,909,2659,557,9997,768,4647,633,0538,249,6645,279,047Other Funds41,040,25731,479,70538,514,72238,514,72242,977,67540,029,534Federal Funds8,446,4684,897,1997,447,3957,447,3958,781,4187,247,963All Funds55,395,99045,934,90353,730,58153,595,17060,008,75752,556,544AUTHORIZED POSITIONS245237246246254227AUTHORIZED FTE237.01230.09236.27236.27245.91222.75_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007AEnvironmental Quality, Dept ofAgency Number: 34000Program Unit Appropriated Fund Group and Category Summary Version: Z - 01 - Leg. Adopted Budget2011-13 BienniumCross Reference Number: 34000-001-00-00-00000Air QualityDescription2011-13 LegAdoptedBudget2011-13Governor'sRec. Budget2011-13 AgencyRequestBudget2009-11 LegApprovedBudget2009-11 LegAdoptedBudget2007-09ActualsOPERATING BUDGETGeneral Fund5,909,2659,557,9997,768,4647,633,0538,249,6645,279,047Other Funds41,040,25731,479,70538,514,72238,514,72242,977,67540,029,534Federal Funds8,446,4684,897,1997,447,3957,447,3958,781,4187,247,963All Funds55,395,99045,934,90353,730,58153,595,17060,008,75752,556,544AUTHORIZED POSITIONS245237246246254227AUTHORIZED FTE237.01230.09236.27236.27245.91222.75TOTAL BUDGETGeneral Fund5,909,2659,557,9997,768,4647,633,0538,249,6645,279,047Other Funds41,040,25731,479,70538,514,72238,514,72242,977,67540,029,534Federal Funds8,446,4684,897,1997,447,3957,447,3958,781,4187,247,963All Funds55,395,99045,934,90353,730,58153,595,17060,008,75752,556,544AUTHORIZED POSITIONS245237246246254227AUTHORIZED FTE237.01230.09236.27236.27245.91222.75_____ Agency Request _____ Governor's Recommended _____ Legislatively Adopted2011-13 BienniumPage __________ Program Unit Appropriated Fund and Category Summary- BPR007A

# Attachment D

## DEQ General Fund funding to Lane Regional Air Protection Agency

2009-2011 Biennium Legislative

Budget FY 10 FY 11 2009-2011 Biennium FY 10 FY 11 FY 12 FY 13 -

expected

Base Budget 426,672 Lakeview 15,000 18,000 10,000 10,000

Inflation 11,947 La Grande 8,000 7,500

- -

2009-2011 LAB 438,619 Jackson County 30,000 30,000 15,000 15,000

Reduction due to reduced GF

revenue forecast (73,690) Josephine County 10,000 13,720 10,000 10,000

364,929 182,464 182,464 LRAPA 21,000 25,000 17,380 17,380

Klamath Falls 30,000 35,000 28,000 28,000

2011-2013 Biennium Legislative

Budget FY 12 FY 13 -

expected Burns

- 3,500

- - Base Budget 364,929 Total 114,000 132,720 80,380 80,380

Inflation 8,758 Biennium totals 160,760

Eliminate inflation (8,758) LRAPA reduction FY 11 to FY 12 (7,620)

Reduction taken (112,544) Statewide Ending Balance hold

back (8,373)

LAB Budget to LRAPA 244,012

DEQ was able to cover LRAPA's

portion of this reduction and did

not pass it on to LRAPA 252,385 123,483 128,902

Reduction from FY 11 to FY 12 (58,981) Legislative appropration - to LRAPA through the DEQ budget - Special
Payments - 2011-2013 Reduction option # 3 $112,544 Current and former non-attainment areas - GF support for woodstove

curtailment work - 2011-2013 Reduction option #4 local gov outreach -
$76,105

246,720

# Attachment E

# Lane County

FY 12

- 13 Proposed Budget

Example of Services General Fund pays for :

Animal Services

Assessment & Taxation

Criminal Prosecution

Deeds & Records

Elections Emergency Management/Disaster

Response

Facilities Management

Family Law (Child support collection, etc)

Governance (Board of Comm, etc)

Human Services Commission

Lane County Jail

Law Enforcement

Medical Examiner

Public Health

Search & Rescue

Sheriff’s Patrol

Veterans

Youth Services Example of Services Road Fund pays for : Emergency Management/Disaster

Response

Facilities Management
Fish Passage Preservations &

Enhancement

Geographical Information Services

Heavy Haul Permitting

Materials Quality Assurance & Testing

Right of Way

Road & Bridge Construction

Road & Bridge Design

Road & Bridge Maintenance

Road & Bridge Preservation

Road Utility Coordination

Stormwater Management

Surveying

Traffic Engineering

Transportation Planning

WeighmasterPERSONNEL/FTE REDUCTIONS

Lane County is a service organization, rather than one that produces products, and therefore its largest

expense is pe rsonnel (salaries & benefits). In 2012

- 2013, the County will have 1,246 FTE (full time
equivalent). Countywide, the County is eliminating 224 FTE (full

- time equivalent FTE), which is a 15.3%
reduction from current year and is

the lowest staff level since 1990

when there were 1,243 FTE

. One
important distinction between
1990 and today is that the County
population was 282,912 v. 353,155
in 2012. This means that in 1990,
there were 4.4 FTE per thousand
County resident s . Beginning July 1,

2012, there will be 3.5 FTE for
every thousand County resident s

. For comparison, the City of Eugene
reports in their FY 12

- 13 Proposed
Budget that they will have 9.2 FTE for every thousand City residents.



## WHY DOES THE COUNTY HAVE A BUDGE T

SHORTFALL

The short answer is because there is not enough revenue to
support the services that Lane County has historically
provided. This is primarily due to a reduction in funding from

timber harvest as well as a very low permanent property tax

rate a nd Property Tax Measures 5 & 47/ 50 passed by voters

in the 1990’s.



## Timber Harvest Revenue

National Forests
Timber Harvest Revenue to Counties goes back more than 1 20 years. In 1893, President Harrison
created Forest Reserves which were expanded by President Cleveland in 1897. Then, in 1908, President

Theodore Roosevelt created the National Forests.

Photo credit: http://www.des.ucdavis.edu/faculty/lubell/Teaching/ESP172/Lecture7Forests.pdf

Also in 1908, President Roosevelt signed an agreement that provided for Counties to receive revenue for
the land that had been ‘claimed’ by the federal government as forestland

. It provided that Counties

would receive a percentage of the revenue from timber harvests occurring on the lands. This revenue
was needed by the counties because t he federal lands are not taxed. The revenue from the National
Forest harvesting went to supporting county r oad f unds and eventually also s chool f unds. Which services use General Fund

Revenue

– and how much?This arrangement worked well, from a revenue standpoint , for decades. However, b etween 1970 and

1993, p olicies changed. In 1976,
the National Forest Management

Act of 1976 was passed. In the
1980’s the Spotted Owl was put
on the endangered species list,
and it had the effect of sharply
decreasing the ability to harves t
timber from National Forests,
thereby d ecreasing the revenue

c ounties were receiving. F rom 1993 to present, there has been

continuing decrease s i n timber

harvests and reforms to Forest
Service Planning.

O&C Lands

- Bureau of Land Management

In addition to the National Forest system, i n 1916 the Federal Government reclaimed 2.8 million acres in

Oregon that had originally b een designated for a railroad. The lands, no w known as ‘O&C’, are managed
by the Bureau of Land Management. In 1926, the Stanfield Act provided that the counties also receive a

share of the revenue from the timber harvests occurring on the O&C lands. This revenue has gone to
support General Fund

services such as Public
Safety, Elections, Deeds &

Records, Assessment &

Taxation, and a multitude

of human services

includi ng communicable

disease, human services
commission and public

health. Timber harvest has
also dramatically decreased

on the O&C lands, for the

same reasons it has

decreased in the National

Forests.



## Property Tax Revenue

Property tax revenue has severe limitations due to ballot measures that have been passed by the voters
in the past fifteen years. Current provisions include a cap on the amount available for general government purposes ($10 per $1,000 assessed) and a limi t on the percentage that assessments can be
increased annually to 3%, regardless of the change in real market value. Two ballot measures in 1996 & 1997 (47/50) went so far as to reduce property taxes to the 94

- 95 or 95

- 96 levels minus 10%.

The property tax revenue shortage is exacerbated in Lane County due to the very low permanent tax rate of $1.28 per $1,000 assessed value. This puts Lane County in the lowest 5 counties for the State of

Oregon. It also puts the County well below the rate of every inco rporated C ity within the County. Below
is a chart of the permanent rates for Lane County and its incorporated cities. Following is a graph

s howing the property tax revenue collections and population for County and its two largest cities
(Eugene & Spring field):*Springfield revenue includes two operating levys (above their permanent rate)



## WHAT IS LANE COUNTY DOING TO TRY AND SOLVE THE PROBLEM ?

Lane County has explored multiple options in recent years to improve our financial situation. These

have included:



###  Refinancing of all eligible debt to obtain lower interest rates



###  Moved employees to health insurance plans that are lower in cost, while maintaining care



###  Revenue Stabilization T ask F orce consisting of residents and community partners



###  Ex plored Public Safety Special Taxing District (City of Eugene objected)



###  B udget planning meetings with hours of public comment



###  Reorganize County departments to increase efficiencies while maintaining customer service



###  Innovate Lane County

– creating a flexib le, efficient, customer

- oriented entity.



###  Strategic Planning



###  Long Term Financial Planning



## FY 12

- 13 SERVICE REDUCTIONS

Despite all of the best planning, there is no way to avoid service reductions when revenue decreases. FY

12

- 13 will see major service reductions to our residents including :



## HOW DO I STAY INFORMED?

Visit www.lanecounty.org and click on County Budget. Attend Budget Committee meetings in May, 2012 and/or contact your County Commissioner a nd state and federal representatives!

You can also follow Budget & Financial Planning on Twitter with the hashtag #lcbudget or follow the
Budget Manager at CMoodyLC and on Facebook at: http://www.facebook.com/LaneCountyBudget  Sheriff’s Office Patrol decrease

– no longer

able to provide 24 hour patro l

 Closure of 131 jail beds (leaving 120

- 130)

 Elimination of Parole & Probation supervision
for misdemeanor crimes.

 Decrease in prosecution of crime by the District
Attorney’s Offic e

 Elimination of a Medical Examiner for Lane

County

 Reduce by 1⁄2 detention beds for youth  Increased case loads in Y outh S ervices, DA’s
office and Parole & Probation

 Decrease in Veterans Services

 Decrease in Human Services Commission

 Decrease in Public Health, including

communicable disease control

 Dec reased public access hours across the
organization including Assessment & Taxation

and Elections.

 Reduce Road maintenance, engineering, and
right of way services

 Reductions in Land Management

# Attachment F

### Lane County Budget


# County faces severe cuts

A proposal includes a reduction of more than 200 jobs, mostly targeting public safety

By Greg Bolt

The Register

- Guard

Appeared in print: Wednesday, April 25, 2012, page A1

The precipice that the Lane County budget has been rolling toward for the past year came into view Tuesday, when the county administrator unveiled a proposal that lowers revenue by $100 million and lays off more than 200 workers.

All of the worst predictions about deep cuts to vital programs are found in the budget proposal released by county chief Liane Richardson, including the loss of 131 jail beds, a 75 percent cut in the number of patrol deputies, closing half the ju venile detention beds, and severe reductions in criminal prosecutions and offender supervision. Cuts to a variety of other county departments

— such as public works, assessment and taxation and health and human services

— also are proposed.

“We knew the cl iff was coming,” Richardson told reporters Tuesday. “We knew the cliff would be here this year.”

Richardson’s proposal will go to the county budget committee, which will hold its first meeting Tuesday . The budget committee, made up of the five county comm issioners and five citizens, will take public testimony and can make some adjustments to the spending plan before sending it on to the Board of Commissioners for final adoption in June.

In what is most likely the bleakest revenue picture in more than a dec ade, the county faces the elimination of the federal Secure Rural Schools Act funds that had replaced money once generated by timber sales in the days before habitat issues and overcutting almost shut down logging on federal lands.

But cuts also are coming from other federal programs and from the state, leaving virtually no county service immune from some level of reduction.

### Particularly hard hit are the two funds that pay for some of the county’s most expensive and

important programs: the general fund and the road fund. Both are taking big hits from the loss of

the so

- called county timber payments.

The general fund is expected to shrink by $16.1 million, or 17 percent, while the road fund will lose $18 million, a 23 percent drop.

The budget plan would elimi nate 224 full

- time

- equivalent jobs, leaving the county staff at its lowest level since 1990, when there were 70,000 fewer people living here.

Because more than 60 percent of the general fund goes to public safety programs, those will take the biggest hit. The sheriff’s office alone gets 40 percent of the general fund, leaving it with a proposed $7 million cut.

But Sheriff Tom Turner said other revenue sources, such as jail beds rented to federal law enforcement and state funds for parole and probation, also are shrinking. That leaves him with a budget hole of more than $10 million.

That will mean cutting patrol deputies down to six from the current 24, which will mean only the most dire calls for help will be answered and even then help may be greatly delaye d.

Turner said that as far as he’s been able to determine, no other county in the nation has ever had to deal with such deep cuts to law enforcement.

“This is going to be a very, very severe time for Lane County,” he said.

When the county has faced serious cuts to law enforcement in the past, it’s been able to rely on Oregon State Police to help fill the gap. But Turner said state police are understaffed as well and won’t be able to help as they have in the past.

With the reduction of 131 jail beds, only 12 1 will be available for local offenders, the lowest number in modern county history.

That means some people accused of violent crimes, including some Measure 11 crimes that require minimum mandatory sentences, will have to be released, putting the county i n violation of state rules and its residents at higher risk.

The district attorney’s office will have to cut 171⁄2 full

- time

- equivalent positions, which would force a reduction of about 30 percent in the cases tried. That would most likely mean that people

a ccused of property crimes and some low

- level violent crimes would not be prosecuted, while those who are prosecuted probably would be released early because of jail reductions.

Other public safety programs, such as the medical examiner, would be eliminated , and the 16 remaining beds at the county juvenile detention center would be reduced to eight. Cuts to parole and probation programs would mean that people convicted of misdemeanors and released from jail early no longer would be supervised.

### Turner said th at’s particularly worrisome because that group includes people convicted of

domestic violence.

“They’re some of the most violent and difficult people and the people who need the most supervision,” he said.

In other departments, health and human services wi ll lose 251⁄2 positions; assessment and taxation will cut 12; and public works will lose almost 50. The 20 percent drop in the road fund, driven mostly by the end of the county timber payments, means that oil will not be sprayed on
rural roads, and other roa d maintenance work will be put off.

Richardson said she decided to cut each department roughly in proportion to the amount of general fund money each receives, even though that means cutting into the meat and bone of county services. She said that’s becaus e the county, which has been through a long string of lean years, already has made the easy cuts.

“We’ve already cut all the extras,” she said. “We’ve already cut all of the services we deem not

essential. All we have left are essential services.”

But even though the county will have to cope with a huge drop in revenue, some workers will continue to receive raises. Richardson said of the seven unions that represent county employees, three have existing contracts that call for cost

- of

- living raises i n the coming year as well as what are called “step” increases for those who aren’t at the top of the seniority range.

She said none of those unions has said it’s willing to talk about reopening negotiations.

Four other bargaining units are currently in neg otiations for new contracts. Richardson said the county is proposing no cost

- of

- living increases in those pacts and has not budgeted any money

for raises.

But Richardson noted that some county bargaining units last year accepted a new, lower

- cost health pl an that saved the county a substantial amount of money. She said some unions voluntarily reopened their contracts to make the insurance change.

## The Register

- Guard http://www.registerguard.com/



## Eugene on edge of own fiscal cliff

The city grapples with how to cover a $6 million budget gap

BY EDWARD RUSSO The Register

- Guard

Published: Midnight, Dec 9 , 2012

Eugene city government faces a $6 million budget gap, but City Manager Jon Ruiz doesn’t want to plug it all by laying off employees.

Instead, Ruiz on Monday is expected to propose that the City Council balance next year’s budget through a combination of cost cuts and tax or fee increases.

The prob lem: While city government spending increases have slowed compared to previous years, personnel costs are still rising faster than revenue, creating the gap.

Two years ago, a citizens committee formed by Ruiz to analyze ways to raise revenue

recommended th e city impose a 5 percent tax on restaurant sales. The group examined other things, such as a local option levy to help pay for the rising cost of municipal operations, a utility tax and a citywide monthly service fee.

Ruiz on Monday is expected to mention ways the city could add revenue through fee and tax increases, but he won’t provide details about them.

“We want to hear from the council about whether they are interested in moving forward on new revenue,” said Kristie Hammitt, the city’s central service s director. “If they are, we would come back to them later with more defined options.”

The council’s discussion is being driven by the $6 million gap

— the difference between what the city expects to receive in its mainly property

- tax

- fed general fund in t he 12

- month fiscal year that begins next July, and what it would expect to spend if city expenses continued at the current

pace.

The general fund is being squeezed by two factors: Ever

- increasing employee costs and slower

than

- projected growth in property tax revenues, the latter caused by the weak economy and lagging real estate prices.

Eugene’s financial situation is not as dire as Lane County’s, where reduced federal payments have led to deep staffing cuts at the county jail, the sheriff’s office and oth er departments. And other local governments are feeling the same kind of financial pinch as Eugene.

### Springfield city government, for example, is looking at a $1.5 million general fund gap for the

next fiscal year.

Tax revenues “since 2008 have remained sta gnant, and we are not seeing them bounce back like we would have expected them to,” said Bob Duey, Springfield’s finance director.

In Eugene, salary increases and rising health insurance and pension expenses have pushed the annual average total cost of a city employee to nearly $100,000.

In simple terms, to plug the budget gap Ruiz could propose laying off about 60 employees, which would equal a 4 percent reduction of the 1,445

- employee city workforce.

But Ruiz won’t do that, Hammitt said.

City employees, including librarians, police officers, firefighters, street sweepers and recreation workers provide valuable services to residents, she said.

“There would be a huge community service impact” if the city eliminated the gap by cutting 60 positions, Hammitt s aid.



### Community discussion

City councilors say the upcoming budget deliberations will lead to a community discussion about how the city spends its money.

“That will be the hard part about this process,” said Councilor Mike Clark. “Our community has a really broad spectrum of priorities. What is a priority in one part of the city is different in another part of the city.”

Clark, a conservative who represents north

- central Eugene, said he doesn’t favor new taxes as a way to balance next year’s budget.

“I fear that a majority of my colleagues see the best answer as increasing taxes,” he said. “I

don’t.”

A local option levy, Clark said, wouldn’t be a permanent solution because it would have to be renewed by voters every five years.

“I also don’t believe it will pass” the first time it would be put before voters, he added.



### A widening gap

In the six years before Ruiz became city manager, city general fund spending increased each year by an average of 6.2 percent.

### Ruiz started as city m anager in 2008, about the same time as the effects from the recession hit

the economy, which also depressed tax revenue.

In response, city government undertook a series of cost

- cutting measures largely unseen by the public. They included reducing city empl oyees by about 100 positions, mainly through attrition.

As a result, increases in general fund spending in the last four years slowed to an average of 0.6 percent annually.

That took place even though the general fund had to absorb a $3 million expense in 2011, when the library local option levy expired.

The budget gap has loomed since last spring.

In March, Ruiz provided the council with a list of two dozen potential spending actions to show what various city services cost. They ranged from minor

— such as eliminating the sister

- cities program contract and saving $20,000

— to major, such as closing a swimming pool, thereby saving $500,000 a year, or a fire station, which would save $1.4 million a year.

Earlier this year, faced with another unbalanced budget , the public was no longer spared from the cutbacks. The city slashed in half the hours at its two branch libraries.

The move, projected to save $578,703 a year, reduced hours for some branch employees and eliminated branch and main library positions, some of them vacant.

The city in the current fiscal year, ending next June 30, is expecting to receive about $81.8 million in property taxes, up from $80.3 million the previous fiscal year.

Total general fund spending in the current fiscal year is set at $121 .7 million, down slightly from the year before.

For the coming fiscal year, the city projects property tax receipts at $83.5 million, up about 2 percent from the current fiscal year, according to city Finance Director Sue Cutsogeorge.

But that’s not enoug h to meet rising personnel expenses.



### The PERS factor

Employee and retiree pension costs are rising at an ominous pace.

The city pays into the state Public Employee Retirement System for 3,586 current employees and retirees. In the present fiscal year, the city is paying $18 million for retirement benefits, but a rate increase mandated by PERS to keep the pension system solvent will boost that to about $21 million in the next fiscal year. That accounts for much of the projected budget gap.

### Since 2010, the to tal average annual cost of a city employee, including wages and benefits, rose

to $99,318, up $10,221.

With wages and benefits averaging a total of $117,230 annually, Eugene firefighters are the highest cost city employees. They are followed by non

- unioniz ed managers, who receive wages and benefits averaging $115,489; police officers, $106,572; employees represented by the American Federation of State, County and Municipal Employees, $80,540; and workers represented by the International Alliance of Theatric al State Employees, $67,425.



### No more fat to trim

City Councilor Alan Zelenka said the city has done a good job of curbing expense growth in the last four years.

“Is there more we can do?” he asked. “Probably, but it won’t be enough” to close the budget gap

.

Zelenka is politically liberal and, unlike Clark, is more willing to explore a tax increase.

Without more revenue, the city will be forced to cut employees and services , he said.

“We are at the point that we are no longer able to get efficiencies and f at and waste out of government,” he said. “We are at the point of eliminating complete programs.”

Cindy Clarke, president of the American Federation of State, County and Municipal Employees Local 1724, said some city departments have too many managers. “If staff reductions are the only option, the city needs to evaluate the need for the many, many layers of management,” she

said.

Also, vacant but funded city executive positions should be eliminated, and Ruiz’s management

team should be restructured to save money, she said.

“If further reductions are necessary, the city needs to look at making cuts at the top of the pay scale, not at the bottom,” she said.



### THE COST OF A CITY O F EUGENE WORKER

Average cost per full

- time equivalent employee (total wages and benefits, but excluding
overtime)

American Federation of State, County and Municipal Employees

08

- 09 fiscal year: $70,41 9

12

- 13 fiscal year: $80,540

### Full

- time equivalent employees: 609

Eugene Police Employees’ Association

08

- 09 fiscal year: $91,568

12

- 13 fiscal year: $106,572

Full

- time equivalent employees: 241

International Association of Firefighters

08

- 09 fiscal year: $107,434

12

- 13 fiscal year: $117,230

Full

- time equivalent employees: 172

Non

- unionized employees/managers

08

- 09 fiscal year: $106,375

12

- 13 fiscal year: $115,489

Full

- time equivalent employees: 418



### WHAT’S NEXT

The Eugene City Council on Monday will hear Ci ty Manager Jon Ruiz’s plan to eliminate a $6 million budget gap.

When: 5:30 p.m.

Where: Harris Hall, 125 E. Eighth Ave.

Watch: Metrovision TV, Comcast channel 21. Webcast, www.eugene

- or.gov

Copyright © 2012

— The Register

- Guard, Eugene, Oregon, USA

# Attachment G

### LRAPA Responses to Ten EPA Questions on Budget Data and Funding Actions Regarding Non-Selective MOE Reductions.

Number 

### Question Response

1 When does the fiscal year begin and end for Lane Regional Air Protection Agency (LRAPA)? LRAPA's fiscal year is from July 1st of the year to June 30th of the following year.

2 What is the budget (funding) period specified in the section 105 assistance agreement for which LRAPA has not, or will not, meet its MOE requirement. LRAPA has filed the Federal Financial Report (FFR) for its 2010-2012 project cycle (i.e., for the two-year period that ended on June 30, 2012). The report specified that LRAPA was short of meeting MOE by $132,540.87. Furthermore, the staff at LRAPA are projecting an additional shortfall of $135,582.26 for the
period ending on June 30, 2013.

3 How much in non-federal funds did
LRAPA expend on section 105 expenditures over the budget that preceded the budget shortfall period? What portion of these expenditures was non-recurrent? What portion was recurrent? LRAPA's recurrent program
expenditures are supported by a number

of sources. In the documentation that LRAPA has filed it shows all recurrent expenditures and the sources and uses of these resources including: State of Oregon General Fund; funding from the local government jurisdictional partner agencies within Lane County (Lane County Government, City of Eugene, City of Springfield, City of Cottage Grove, City of Oakridge); permit fees; reserves; and other miscellaneous

revenue sources.

4 What was LRAPA's MOE p roposed MOE level for the budget shortfall period? LRAPA's MOE for its FY2012 budget year that ended on June 30, 2012 is $935,855; this was $132,540 less than the $1,068,396 that LRAPA expended from
its FY2011 budget year that ended on June 30, 2011. LRAPA is projecting to expend $800,313 for its FY2013 budget year that ends on June 30, 2013 or a
reduction of $135,582.5a a. If the period with the shortfall expired,

and LRAPA submitted a final financial status report for the grant, what was the

actual recurrent expenditure level that budget period? LRAPA's actual MOE for FY2012 (July 1, 2011 - June 30, 2012) was reported at $935,855.26 and the projected MOE level for FY2013 (July 1, 2012 - June 30, 2013) is estimated at $800,313.00.

5b b. If that budget period has not expired,

or LRAPA has not submitted a final financial status report for the grant, what

is the expected recurrent expenditure level for that budget period? LRAPA's budget period for FY2012 has expired and the FFR has been filed. However, LRAPA budget period FY2013 is underway and LRAPA projects to expend $800,313 for this budget period.

5c c. What is the amount of the actual or
anticipated shortfall in the level of
recurrent expenditures below the required MOE level due to the executive branch agency budget reduction for the budget shortfall period? LRAPA's reported actual shortfall for FY2012 and the projected shortfall for FY2013 are directly related to the budget shortfall caused by the adverse economic conditions impacting LRAPA's funding sources, including the State of Oregon General Fund, local government contributions, and the reduction in the permit fees it receives from industrial facilities.

6 What MOE level is LRAPA planning to (or proposing) to use in its application for
a section 105 grant in the year following the budget shortfall period? What will bethe sources of funding for the nonfederal, recurrent section 105 expenditures? LRAPA proposes to use the MOE level of $935,855.26 for its FY2012 budget year, and proposes to use an MOE level of $800,313.00 for the following FY2013 budget year and thereafter.7 What were the budgets or the

expenditure levels for all the departments or programs within LRAPA environmental programs containing the air program for the affected MOE shortfall period? For the prior funding period? The MOE worksheet calculations are summarized as follows: • Actual MOE = $1,010,832 in FY 2008 (July 1, 2007 to June 30, 2008); • Actual MOE = $1,064,539 in FY 2009 (July 1, 2008 to June 30, 2009); • Actual MOE = $1,067,889 in FY 2010 (July 1, 2009 to June 30, 2010); • Actual MOE = $1,068,396 in FY 2011 (July 1, 2010 to June 30, 2011); • Actual MOE = $935,855 in FY 2012 (July 1, 2011 to June 30, 2012); and • Projected MOE = $800,313 in FY 2013 (July 1, 2012 to June 30, 2013). The
other non-MOE funding categories in the core air programs are federal funds and Title V permit fees which are included in the response to the next question.

8 What were the budgets or the expenditure levels for all the departments or programs within the LRAPA operation for the affected MOE shortfall period? For the prior funding period? The total LRAPA core program budgets are summarized as follows: • $1,953,987 in FY 2008; • $2,076,177 in FY 2009; • $2,007,552 in FY 2010; • $2,025,895 in FY 2011; • $1,909,395 in FY 2012; and • $1,833,020 in FY 2013.
The total LRAPA core program budgets include federal 103/105 base grant funds, Title V permit fees, and non-recurring expenses which are not included in the MOE calculations. Pass-through federal grants are excluded from both the core program budgets and the MOE calculations.

### 9 What are the comparative differences in

budget totals for the two periods when comparing the affected air program to other programs within its environmental agency (if applicable) and when
comparing the air program budget and its agency's budget to those of other executive branch agencies? (Please
show aggregate totals, dollar differences, and percentage changes by agency and/or program.) This is not directly applicable since LRAPA is a local single-purpose air quality agency, and the LRAPA Board of Directors is the fiscal decision-making body and executive agency for MOE calculation purposes. But it is not surprising that overall MOE reductions at LRAPA mirror the overall reductions in state and local general funding. For example, the LRAPA MOE reduction between FY2011 and FY2012 is about 12% compared to an 11% reduction in Lane County General Fund for the same period; and similarly, the projected 2-year LRAPA MOE reduction between FY2011 and FY2013 is about 25% compared to a 26% reduction in Lane County General Fund and a 24% reduction in State General Fund for the same period. See pages 6-12, and Attachments A-F, for more details.



### 10 If the budgets of all executive branch agencies were not reduced, or were reduced in different ways (e.g., dollars vs. positions), or were not reduced
proportionally relative to section 105 air program, please provide a thorough
explanation. This is not directly applicable since LRAPA is a local single-purpose air quality agency. In order to operate within its FY2012 and FY2013 budgets, LRAPA implemented a combination of unpaid furlough days, schedule reductions, and
systematic across-the-board reductions wherever possible in materials & services expenses. In addition, open positions resulting from retirements or resignations were left vacant, with the related responsibilities redistributed, reduced, postponed or eliminated. The net result was an overall reduction across all LRAPA programs. See pages 8-9 for more details.

NM/MLH (12/31/2012)