LFO Analyst: Niswender

The Department of Corrections, formerly a division within the Department of Human Resources, was established as a separate department by the 1987 Legislature. The Department is responsible for the incarceration of adult or certain juvenile felons sentenced to prison for more than twelve months by the courts. Senate Bill 1145, passed by the 1995 Legislature, transferred management of those offenders sentenced or sanctioned for incarceration periods of 12 months or less and all felony offenders under community supervision to the counties effective January 1, 1997. The Department provides funds to local governments to offset the costs of maintaining these offenders.

The legislature adopted a budget that was reduced from the Governor's printed budget by $24 million General Fund and increased by $161.8 million Other Funds. The total funds budget of $1.026 billion is a 41 percent increase above 1997-99 estimated expenditures. The General Fund budget of $759.9 million is a 16 percent increase over the 1997-99 estimated expenditures. The $24 million in General Fund savings resulted primarily from delayed start-up at the Two Rivers Correctional Institution (TRCI), reduced inflation, delayed occupancy of the Snake River Correctional Institution (SRCI) Intensive Management Unit (IMU), and reduced debt service. The $161.8 million Other Funds expenditure limitation increase was primarily due to establishment of a new $171.7 million capital construction expenditure authority for the Women's Prison and Intake Center, which was partially offset by delayed pre-construction/community development activities and inmate work program expenditure patterns. The legislatively adopted budget:

• phases in final SRCI expansion beds (except the IMU) and most of the TRCI new beds;
• continues funding for the operation of all other institutions & most correctional programs at levels similar to 1997-99;
• delays opening of the Women's Prison and Intake Center until the 2001-03 biennium and provides additional funds to continue to contract with Clackamas County for intake services;
• delays the hiring of all new TRCI positions by one-month;
• reduces the amount of inflation for most services and supplies expenditures;
• reduces the amount of General Fund support for Inmate Work programs and eliminates 40 work crew supervisors;
• eliminates the PERS contribution for the first six months for all new TRCI positions;
• establishes a new capital construction limitation for construction of the Women's Prison and Intake Center (WPIC) at any site except the Dammasch Hospital site;
• provides funding for expansion of two existing facilities, pre-construction activities at four sites, and major capital improvement projects;
• provides funding for operation of the new warehouse in Salem based on anticipated savings from spot buys; and
• reserves funds with the Emergency Board to address potential population management issues resulting from prison forecast changes and newly passed crime legislation.

The Institutions Division is responsible for the security, housing, and operation of thirteen correctional institutions. These are: Oregon State Penitentiary, Eastern Oregon, Snake River, Two Rivers, Santiam, Columbia River, Powder River, Shutter Creek and Oregon State Correctional Institutions; South Fork Forest Camp; Oregon Women's Correctional Center, Mill Creek Correctional Facility; and the Oregon Corrections Intake Center. Included are institution operations, classification and transfer, inmate transportation, gang management, interstate compact, emergency preparedness, and Institution's central administration.

The Other Funds include revenue from a variety of sources including canteen sales, witness fees, meal ticket sales, and rental of beds for SB 1145 offenders ($550,631) until local facility construction is complete. Other Funds are also derived from inmate work activities, sales income, and room and board reimbursements ($1.1 million). Other Funds are also provided by a portion of the Inmate Welfare Fund and from revenues received from inmates or inmate-related sources such as coin operated telephones, canteen profits, vending machines, and copiers ($997,622). Approximately $8.0 million in Federal Funds is expected to be available through the State Criminal Alien Assistance Program to partially offset state expenditures for incarceration of illegal aliens. In 1997-99, approximately $6.6 million Other Funds was derived from rental of beds for SB 1145 offenders.

The budget for Institutions is driven by the prison population forecast; sentencing laws; custody level requirements; local arrest, prosecution, and sentencing practices; and Ballot Measure 17 implementation.

The 1997-99 budgeted institution capacity ranged from 8,037 up to 9,311. The Department is currently able to manage all male offenders within the state. A shortage of women's beds required the Department to temporarily rent approximately 116 women's beds from out-of-state facilities in Gallup, New Mexico. The completion of the 2,348-bed expansion at Snake River in November 1998; completion of a 96-bed minimum custody capacity in Umatilla (TRCI); and retrofitting of 160 women's beds at Eastern Oregon increased the Department's system-wide bed capacity to 9,338 (9,058 base and 280 temp beds) as of July 1999 and provided temporary relief to population pressures. The Department had all women housed within the state by February 1999 and should be able to avoid bed rental for at least the next 18 months. In 1999-01, the Department also plans to phase-in up to 1,344 of the 1,632 TRCI beds and the remaining 192 beds at Snake River. The 1999-01 estimated additional cost to start-up and operate beds at TRCI is $57.6 million and approximately $5.0 million for the remaining Snake River beds.

The October 1998 prison population estimate used to develop the Governor's 1999-01 recommended budget indicated a need for 9,218 beds by July 1999 and 10,779 beds by July 2001. The long-range forecast indicates that Oregon's prison population will increase by 69 percent (to 14,275) by July 2008. About 55 percent of this growth is directly or indirectly due to passage of Ballot Measure 11. About 14 percent of the growth is due to passage of the HB 3488 (a repeat property offender bill passed in the February 1996 Special Session). To accommodate this growth, the Department continues to implement its Long-range Prison Construction Plan. The plan was initially approved by the June 1996 Emergency Board and it has been modified based on subsequent forecasts. The budget calls for a 150-bed expansion of two existing minimum custody facilities in 1999-01.

Based on the October 1998 forecast, the Department plans to use 280 men's temporary beds (beds that are beyond facility design capacity and generally occupy dayroom spaces) until February 2000. At that time, 1,248 Umatilla medium custody beds should be finished, creating a male bed surplus of 1,134. This male bed surplus is projected to decrease to 307 by July 2001. If counties decide to continue renting space for SB 1145 offenders, the male bed surplus will disappear even faster. In August 2001, if the medium beds are available at a new women's prison as planned, the Department will have a surplus of 224 women's beds that should meet projected need through 2008. The availability of new women's beds remains uncertain until decisions are made on placement and funding for the Women's Prison and Intake Center.

Due to changes in the charging, plea bargaining, and sentencing practices, the Department will have more minimum custody inmates and less medium custody inmates than was forecast at the time the Umatilla prison construction was authorized. In 1999-01, the Department will have an average of 1,116 more minimum custody male inmates than it does minimum custody beds; 1,131 less medium custody male inmates that it does medium capacity; and 424 less maximum custody male inmates than it does capacity. The net effect is that over 1,000 minimum custody male inmates will be kept in medium custody beds throughout 1999-01. Medium custody beds are generally more costly to operate than minimum custody beds. The Department may be able to modify staffing patterns for minimum custody inmates kept in medium custody facilities to avoid higher costs. The Department has modified the long-range prison construction plan to add minimum custody beds as overall system capacity requires.

Until the Women's Prison and Intake Center is completed, the Department will continue to contract with the Clackamas County Sheriff for use of the Oregon Intake Center. This contract arrangement has been in place since 1991-93 and the county has consistently asserted that the Department has not covered the county's costs. In March 1998, the Department agreed to pay $71.33 per bed per day for the remainder of 1997-99. The 1999-01 roll-up impact of this agreement is estimated to be $1.3 million. Due to population growth among female offenders, coupled with high cost and complications associated with keeping women out-of-state, the Department is remodeling a building at the Eastern Oregon Correctional Institution so it can temporarily house up to 160 women until the new women's facility is ready. Even with this addition, it may be necessary for the Department to maintain some out-of-state rental beds for women.

Many of the existing institutions have significant deferred maintenance needs due to their age, over-utilization, and lack of funding for maintenance systems. The Department estimates that deferred maintenance needs now exceed $75 million. Approximately $1.3 million is available in the current service level budget for Capital Improvements to deal with this issue.

The Department is experiencing an 11.8 percent rate increase in all utility/fuel areas, which is well beyond what is covered by the standard inflationary allowance (2.8%). Overall, this is expected to have a $2.7 million affect on the Institutions budget.

The recommended budget reflected a 25 percent increase ($75.3 million) above the 1997-99 estimated expenditures and was based on the October 1998 prison population forecast, which revised the growth rate downward from the prior forecast. However, most of the forecast revision applies to the out-years of the forecast. The Governor's budget relies on the use of 180 to 280 temporary beds through the biennium and up to 288 rental beds for women during the last five months of the biennium. The budget growth is primarily due to roll-up costs of negotiated salary increases and SRCI/TRCI operations phase-in. The budget reduced the General Fund by:

• $4 million based on the assumption that full-biennial federal funding for the State Criminal Alien Assistance Program would occur; and
• The transfer of $3 million to Central Support/Operations for operation of the warehouse and distribution center based on assumed efficiencies of the Central warehouse operation.

General Fund additions to the budget included:

• $43.5 million for phase-in of 385 positions (315.75 FTE) for start-up and operation of the Two Rivers Correctional Institution in Umatilla.
• $29.4 million for salary, PERS, merit, reclassification, and promotion roll-up costs.
• $5 million for roll-up costs associated with operation of SRCI expansion beds.
• $2.2 million to rent beds for women in the last five months of the biennium due to delayed opening of a new women's prison opening.

The legislature approved a budget of $343.1 million General Fund, $355.3 million total funds, and 2,602.31 FTE. The General Fund support is 23 percent above the 1997-99 estimated expenditure levels and the overall program funding is increased by 20 percent. The legislature generally approved the changes recommended by the Governor; however, the legislature reduced the Governor's printed budget by $14.7 million General Fund and 94.41 FTE primarily based on staffing plan changes and delayed phase-in of new beds at TRCI and SRCI. The legislature also considered the April 1999 forecast, which did not change significantly in comparison to the October 1998 forecast. Specifically, the April 1999 forecast indicated the Department's prison bed need by July 1, 2001 would be 10,809 instead of 10,779, a 29-bed increase from the October 1998 forecast. The legislative budget modifies the Governor's printed budget as follows:

• Adds $460,933 General Fund to fund temporary beds required by the April 1999 forecast, finance position reclassifications, and restore duplicate reductions made during development of the Governor's recommended budget.
• Reduces $7.4 million General Fund, $69,692 Other Funds, and 39 positions (41.44 FTE) based on TRCI staffing plan changes, downsizing of tele-video visitation operations to a pilot, and a delaying the phase-in of TRCI units by one-month.
• Reduces $4.5 million General Fund and 46 positions (46 FTE) based on delayed occupancy of 96 beds in the Snake River Institution Intensive Management Unit.
• Reduces $1.2 million General Fund and 36 positions (9.97 FTE) budgeted to phase-in the operation of the last three TRCI units and sets this money aside in the Emergency Fund for allocation, if necessary, after the April 2000 prison population forecast.
• Reduces $1 million General Fund from funds provided in anticipation of services and supplies inflationary impacts.
• Reduces $586,749 General Fund based on elimination of a reserve for replacement of emergency equipment.
• Reduces $463,068 General Fund by eliminating costs associated with operating 20 beds at the Clackamas County Intake Center.
• Reduces $99,000 based on anticipated savings from transferring operation of a radio maintenance program from the Department of Forestry to DOC.

This program provides Grant-in-Aid funding to counties pursuant to the provisions of SB 1145. Based on SB 1145, the community corrections program was restructured to establish state/local partnerships and shift resources and control for community corrections to the counties. The state provides oversight and block grant funding (Grant-in-Aid) and no longer operates any community corrections field offices directly. The Grant-in-Aid is based on the number and risk of offenders to be managed.

This budget unit is entirely supported by the General Fund. SB 1145 went into effect on January 1, 1997, so grant funds were only provided for the last six months of 1995-97. In 1997-99, approximately $101.2 million was provided for supervision of all parole and probation supervision populations and approximately $64.1 million was provided for local control of all offenders sentenced or sanctioned to 12 months or less.

The Community Corrections Grants budget is driven by the local offender population forecast issued by DAS Economic Development; the number of offenders on parole, probation, and post-prison supervision; offender supervision risk scores; local arrest, prosecution, sentencing, sanctioning, revocation, and treatment policies; and the Grant-in-Aid funding formula. The October 1998 local control forecast is compared to the October 1995 forecast used in the 1996 Special Session in the following graph:

In 1999-01, counties are expected to manage 23 to 35 percent more local control offenders than was originally projected. However, community supervision (parole and probation) populations will be dropping from a monthly average of 30,440 to 29,204. Using the same formula and methodology as used in 1997-99, adjusted upward for 3.02 percent inflation, the net effect is a $6.2 million increase to Grant-in-Aid funding.

The state has provided funding to build 21 local facilities to incarcerate/treat 1,486 offenders, so the counties will be challenged to manage those offenders that will exceed their jail/treatment bed capacities. Based on the October 1998 forecast, counties will have enough state-constructed jail/treatment beds to deal with 77 percent to 84 percent of the SB 1145 offenders projected to be in the system between now and July 2005. The original agreement and assumption was that 75 percent would receive jail/treatment and 25% would receive an alternative sanction.

During 1997-99, the Department rented bed space to counties while they were completing construction projects. The majority of county construction projects (16 of 21, providing 1,081 additional custodial beds) for housing additional SB 1145 offenders are completed, so county demand for rental space is expected to phase-out during 1999-01.

There is still considerable concern among several counties as to the adequacy of state funding for management of SB 1145 offenders. The 1995-97 baseline funding for state payment of county SB 1145 offender management cost was based on the assumption that 75 percent of offenders would require a jail bed and 25 percent would only require alternative sanctions. The baseline also assigned a cost of $65/day to jailed offenders and $7/day to alternate sanctions, producing a blended reimbursement rate of $50.50/day per SB 1145 offender.

These rates were adjusted for inflation in 1997-99 and are proposed to be further adjusted in the Governor's 1999-01 budget. However, counties have expressed interest in increasing funding based on the actual cost of managing offenders.

To address county concerns, the staff have been working with the SB 1145 Implementation Committee (made up of sheriffs, jail commanders, community corrections directors, criminal justice staff, and county representatives) to collect and analyze information on the actual costs of jail, work release, and sanction services. Preliminary and partial cost data showed that 87 percent of the SB 1145 offenders were in jail at an average daily cost of $80.64; 3 percent were in residential treatment at an average daily cost of $47.12; and 10 percent were under community supervision at an average daily cost of $18.69. The daily jail costs reported ranged from $38.22 (Yamhill) to $111.37 (Benton). The estimated full biennial impact of replacing the current baseline funding method with a cost based method is approximately $33 million.

The Department is projecting a decrease in the number of parole and probation offenders that will be under community supervision in 1999-01. The 1997-99 budget was based on an average parole caseload of 11,416 and a probation caseload of 19,024. In 1999-01, average parole caseload is expected to be down to 10,886 (5% reduction) and a probation caseload of 18,318 (4% reduction). If these projections hold, the budget to address these offenders will only need to increase by about $1.6 million (from $101.2 million to $102.8 million).

The recommended budget is 3.64 percent ($6.0 million) above the 1997-99 estimated expenditures. It has been adjusted based on the October 1998 population projections; daily rates for jail and community services costs adjusted for inflation;

and offender case rates for parole and probation field supervision costs adjusted for inflation. The Governor's budget is $1.1 million less than the original current service level budget, since it uses a 3.02 percent inflationary factor rather than 3.7 percent used to develop the current service level budget.

The recommended budget also calls for $7.7 million special purpose appropriation to the Emergency Board for SB 1145 costs. This special purpose appropriation acknowledges that counties are still working with the Department to develop an alternative funding methodology that considers costs reported by the counties and that phase-in of an alternative methodology is likely to occur during the biennium. Based on early cost information submitted by counties, $7.7 million will cover costs to phase-in a cost-based funding methodology for the last 12 to 18 months of the biennium.

The legislature approved a budget of $174.7 million General Fund. The General Fund support is 5.7 percent above the 1997-99 estimated expenditure levels. The legislature generally approved the changes recommended by the Governor; however, the legislature increased the printed budget by a total of $4.4 million in the following ways:

• Added $4.7 million General Fund to increase the baseline funding by factoring in actual county impact and cost information. The increased funding is to phase-in during the last 15 months of 1999-01. Along with this funding increase and passage of HB 2432, the legislature deleted the requirement that impact and cost information be factored into the baseline funding on a biennial basis and directed the Department to develop a method for allocation of the grant funds based on a capitated model. The Governor originally set aside $7.7 million for this purpose.
• Added $2.1 million General Fund to address caseload increases reflected in the April 1999 SB 1145 forecast. The forecast showed that monthly local control populations would increase between 33 and 96 offenders when compared to the October 1998 forecast used to develop the Governor's budget.
• Added $94,694 General Fund based on passage of HB 3057, which creates the crime of Identity Theft as a Class C Felony.
• Added $29,534 General Fund based on passage of HB 2328, which requires the Parole Board and local supervisory authorities to subject sexually violent offenders to intensive supervision through their post-prison supervision period.
• Reduced $3.6 million General Fund based on passage of HB 2002, which made conviction of a 4^th DUII within 10 years a Class C Felony and reduced most Driving While Suspended or Revoked convictions to Class A misdemeanors. Based on passage of this bill, the legislature also appropriated $1.1 million General Fund to the Emergency Fund for allocation to DOC, if necessary, after the April 2000 forecast to address population management issues.

This division provides various services to incarcerated inmates. Included are Workforce Development; Education and Training; Health Services, Religious Services, Intake and Assessment, and Counseling and Treatment Services. In prior biennia, this division also included Inmate Work Programs; however, it is now in a separate budget unit.

The primary source of Other Funds is the Inmate Welfare Fund ($4.8 million), which has revenues received from inmates or inmate-related sources such as coin operated telephones, canteen profits, vending machines, and copiers. Other Fund revenue is also expected from Oregon State Police pass through of Federal Funds for residential abuse treatment ($1.1 million); the Department of Education for inmate education programs ($371,417); various educational grants ($320,827); beer/wine tax distributions from DHR for alcohol and drug treatment programs ($206,612); community college services ($127,400); and other charges for services ($72,365). Prior to 1997-99, the Department of Human Resources provided approximately $1.1 million in grant funds for alcohol and drug treatment programs.

The Correctional Programs budget is driven by offender population; constitutionally and statutorily required programs and services; and other offender treatment or vocational training needs. Increased prison populations and the phasing in of new facilities will place higher demands on the various programs (health services, mental health, education, social skills, cognitive skills, sex offender assessment, alcohol & drug treatment, religious services), thus requiring more staff and General Fund support. The estimated 1999-01 phase-in costs to provide correctional programs when 1,954 new beds are

filled at Snake River Correctional Institution are $3.2 million. Additionally, the Department may need to extend the hours constitutionally required programs are offered since inmates cannot be required to give them up to meet Ballot Measure 17 requirements.

The Department continues to experience increases in medical costs and is responding by strengthening its emphasis on managed care and utilization of a network of preferred providers. It currently hopes to establish and maintain care provider service rates that are less than or equal to those used under the Oregon Health Plan. Additionally, the Department would like to develop a database to better predict future health care costs based upon characteristics of the inmate population. It would also like to establish an occupational health and safety program so it can more effectively prevent on-the-job injuries.

Although the number of incarcerated sex offenders continues to increase, funding for sex offender treatment was eliminated in the 1997-99 budget. During the current biennium, the percentage of inmates receiving mental health services has grown from 13.5 to 17.5 percent. If these trends continue, the Department may need additional treatment capacity.

The recommended budget was 25 percent ($17.4 million) higher than the 1997-99 estimated expenditures. The primary reasons for the increase were the phase-in cost for Snake River expansion beds; negotiated salary increases; plans to open newly constructed beds at the Two Rivers Correctional Institution; and expansion of a federal grant supported residential treatment program. Specifically, the budget reduced General Fund by:

• $3.2 million based on delaying the opening of the Women's Prison and Intake Center until 2001-03; and
• $1.7 million by eliminating one-time costs primarily incurred to phase-in of SRCI expansion beds.

General Fund additions to the budget included:

• $6.9 million and 46 positions (32.42 FTE) for start-up and phase-in of the Umatilla medium custody complex;
• $5.7 million primarily for roll-up costs of 1997-99 salary adjustments, promotions, merits, PERS adjustments, and reclassifications;
• $4.9 million for biennial operation of Snake River expansion beds;
• $845,983 for inflationary increases to goods and services; and
• $534,890 and four positions (3.28 FTE) for women's program operations in the H-unit at Eastern Oregon Correctional Institution.

The budget included $1.1 million in Other Funds to enhance and expand programs for inmates with dual diagnoses of substance abuse and mental illness. Federal funding is available under the Residential Substance Abuse treatment Grants administered by the Department of State Police.

The legislature approved a budget of $83.5 million General Fund, $90.3 million total funds, and 375.11 FTE. The General Fund support is 20 percent above the 1997-99 estimated expenditure levels and the overall program funding is also increased by 20 percent. The legislatively adopted budget funds the programs at the levels indicated in the table below:

The legislature generally approved the changes recommended by the Governor; however, the legislature reduced the Governor's printed budget by $3.6 million in the following ways:

• Reduced $1.9 million General Fund by reducing services and supplies and the inflation rate applied for 1999-01.
• Reduced $1.6 million General Fund and five positions (4.57 FTE) based on delayed TRCI start-up and staff reductions.
• Added $43,832 General Fund to correct omissions, errors, and PICS accounting adjustments.

This program is charged with the responsibility for implementation of the Prisons Reform and Inmate Work Act of 1994 (Ballot Measure 17). The Act requires all inmates, with limited exceptions, to participate in work or work development training for a minimum of 40 hours per week.

The source of Other Funds is from sales of prison industry goods, services, and commodities produced by the farm ($34.5 million). Additionally, revenue is derived from services provided to state agencies and other clients by inmate work crews ($9.6 million) and $1.0 million is derived from the sale of Certificates of Participation (COP's) to finance commercial laundry equipment at TRCI.

This budget is driven primarily by the Oregon Constitutional requirement that inmates work as hard as the taxpayers who provide for their upkeep and be involved in productive activities that develop practical skills and a viable work ethic.

Fiscal Year 1996-97 financial records show that overall sales of goods and services from Inmate Industries were good, despite a five-week shutdown of the Furniture Factory because of fire and a ban of interstate commerce that began in January 1997 and continued through the end of the fiscal year. The total Other Fund revenues for 1995-97 were $21.9 million with a net income of $198,000. The projected revenues for 1997-99 are $42.1 million. The largest revenue producing areas are expected to include Wood Products Division; Laundry Division; Agri-Services Division; and Work Crews. For August 1998, all Industries Programs had a net income except for the Garment factory. This loss was primarily due to the sale of obsolete garments at less than cost. Furniture and Metal Division had a very good month due to the large shipment of cell furniture and door/window frames to Two Rivers in Umatilla.

In May 1998, compliance with Ballot Measure 17 reached an all-time high of 60 percent. The Department hopes to achieve 70 percent compliance by July 1999. Achievement of 60 percent compliance has been largely reliant on General Fund support, since there are only six public/private partnerships in place employing about 185 inmates. The Department has been putting inmates to work through institutional support jobs, use of inmate work crews, and by utilizing various treatment and educational training courses. Continuing this approach will require a significant amount of ongoing General Fund investment.

To further increase compliance levels, the Department plans to start work crews and laundry services at Umatilla; start a metal shop, laundry services, and a call center at SRCI; pilot a mobile work camp program with the U.S. Forest Service; expand partnerships with state and federal agencies; develop a statewide marketing plan; create Other Funded Ballot Measure 17 coordinator positions; and develop new opportunities to reduce idleness at EOCI. The Department will also need to improve the timeliness and efficiency with which it is able to negotiate and finalize contracts with private partners. The Department of Justice's assignment of two staff attorneys to deal with Inmate Work Program issues should help in this area. The Department remains challenged due to increases in the prison population; a lack of adequate space in existing facilities; a loss of significant construction work opportunities since SRCI is complete; and institutional support and available outside work crews are at capacity.

Review of program revenue sources shows that the Inmate Work Program remains highly dependent on its governmental customers. As of June 1998, 87 percent of the revenue received for 1997-99 had come from governmental sources. Achievement of the Department's compliance plan relies heavily on its ability to increase sales to private entities and to establish more private partnerships. In 1997-99, $2.7 million in General Fund revenue was dedicated to a Parks-DOC partnership and interim reports to the Emergency Board indicate that it has been effective in meeting various facility refurbishing, equipment replacement, and grounds maintenance needs. Passage of Ballot Measure 66, which dedicates a portion of Lottery Funds for Parks Department projects, may increase the demand for inmate work program services.

In July 1998, the Joint Legislative Audit Committee concluded a study of inmate work program pricing practices for products, services, and inmate labor. The Audit Committee found that the Prison Industries Board and the Department's practices reflected the policy choice to achieve compliance while being self-sufficient. While the Audit Committee agreed that self-sufficiency was a worthy goal, it acknowledged that it was not a prerequisite for compliance with Ballot Measure 17. The Audit Committee concluded that the strategy for pricing products, services, and inmate labor should be in line with the program's overriding goals and objectives. The Audit Committee also recommended that the Department of Corrections' budget include outside work crew security costs as part of its General Fund budget; that all inside work crew costs be included in the Institutions budget unit; and that the budget clearly identify the number of security positions that are to be used for outside work crews and institutional support work crews. The estimated cost to shift 20 outside correctional officers to General Fund is $1.7 million. This shift should allow the Department to keep the daily work crew rate at a level that cities, counties, and other state agencies can afford; increase the likelihood of inmates being used in ways that generate savings to government; allow the Department to fill needed positions; and enable work crews to play a significant role in Ballot Measure 17 compliance efforts.

In November 1998, the Speaker's Council on Prison Workforce issued a final report containing 18 policy, funding, regulatory and workspace recommendations. The key funding recommendations include creation of a separate, quasi-public agency to administer workforce financing; creation of a prison workforce capital development fund; and improvement of agency budget partnerships.

The recommended budget was 15 percent above the 1997-99 estimated expenditures. The General Fund support for this unit was decreased 61 percent from $8.1 million to $3.1 million, and Other Fund support was increased 40 percent from $28.6 million to $40 million. Funding for workforce development and cognitive development programs were maintained at current levels; however, contrary to the recommendations of the Joint Legislative Audit Committee, inmate work crew supervisors were significantly reduced. Specifically, the budget:

• Reduced $5.9 million General Fund and 40 positions (40 FTE) that supervise inmate work crews and program support;
• Reduced $1.2 million General Fund and shifted funding for TRCI's laundry equipment to Other Funds using COP's;
• Reduced $62,440 General Fund start-up/operating costs for the Women's Prison & Intake Center;
• Added $1.2 million Other Funds and 10 positions (10 FTE) to allow positions created and re-classed during 1997-99 to continue; and
• Added $3 million Other Funds and 21 positions (20.50 FTE) to fund post-factor relief and a fund split on TRCI work crew supervisors, to staff an 80-inmate mobile work camp, and establish work program coordinators at existing institutions.

The legislature approved a budget of $3.8 million General Fund, $45.7 million total funds, and 190.07 FTE. The General Fund support is 53 percent below the 1997-99 estimated expenditure levels, however, the overall program funding is increased by nine percent. The legislature passed HB 2488 and referred HJR 82 to the voters. If voters approve HJR 82, the Prison Industries Board will be replaced with an Advisory Council and Oregon Correctional Enterprises will be created as a semi-independent agency. As such, the budget for inmate work programs will no longer be under legislative or executive branch budget controls. The legislature generally approved the changes recommended by the Governor; however, the legislature reduced the printed budget by $2.6 million in the following ways:

• Added $781,488 General Fund to restore the services and supplies budget for 22 work crew supervisors that was omitted from the Governor's recommended budget.
• Added $1.6 million Other Funds expenditure limitation based on increased needs for inmate labor by the Parks Department and the Department of Forestry.
• Reduced $2.9 million Other Funds and 22 positions (22 FTE) based on spending history.
• Reduced $1.6 million Other Funds and 9 FTE based on updated plans to only use the mobile work camp seasonally.
• Reduced $318,699 Other Funds based on PICS accounting and services/supplies reconciliation.

The Central Support/Operations unit includes Business and Finance, Human Resources, and Information Systems and Services. Business and Finance provides budget management, resource management and support services for the entire Department. Components include the Office of the Assistant Director; Budget Office; Fiscal Services; Prison Planning, Siting, & Construction; Community Development; and Facilities Services. Human Resources includes Personnel, Employee Development, Training, Employee Safety and Risk Management, and Payroll Services. Information Systems and Services includes: Operations and User Support, Applications Development and Maintenance, East Region Support, and Research. It is responsible for operating the offender data base and tracking system used to manage the state's prisons and community corrections; the Corrections Information System; the integrated fiscal services and prison manufacturing system; the Automated Financial and Management Information System; and automated office systems.

The Other Funds expended in this program are derived from the sale of Certificates of Participation and are used for pre-construction activities, infrastructure planning, the bid/solicitation process, design, construction supervision, and community development.

The latest prison population forecast will not have a significant impact on previously established facility opening dates and the number of beds required.

A major area of growth in this division is in the central warehouse operations. The 1997 Legislature authorized the purchase of the Waremart Distribution Center in Salem and the Department's budget request has several new positions to purchase, receipt, warehouse, and distribute products. This facility should create operational efficiencies by allowing the Department to take advantage of economies of scale; increase purchasing power; maximize volume discounts; provide adequate space for spot purchases; and reduce institutional stockpiling of resources.

The Human Resources unit will continue to be challenged to manage the growth and development of the Department's workforce. Expansion of SRCI, start-up of new facilities, and the implementation of SB 1145 will also place increased demands on Information Systems and Services to keep existing automated systems running efficiently, to make necessary computer network and application upgrades and to continue development of a Community Corrections Information System. The Department is still in the process of completing several projects critical to achieving full Year 2000 compliance, but expects them to be completed by June 30, 1999.

The recommended budget for this budget unit was 13 percent ($5.5 million) higher than the 1997-99 estimated expenditures. Specifically, the recommended budget reduced General Fund by:

• $278,841 based on reducing the allowable inflation to 2.8 percent; eliminating the Prison Industries executive director position since support is being provided by others in the Department; and eliminating one of five positions that provides fiscal/accounting support to the inmate Work Program.
• $869,698 and 20 positions (4.93 FTE) based on delaying the opening of the Women's Prison and Intake Center until 2001-03.
• $330,823 based on a 1-week delay in hiring of all new TRCI positions; eliminating PERS funding for the first six months for employment; and reducing start-up expenses by 15 percent.

General Fund additions to the budget included:

• $3 million and 15 positions (14.50 FTE) to operate a centralized warehouse and distribution center in Salem that will serve all DOC institutions. The funds for this addition are transferred from Institutions' budgets in anticipation of savings that will be achieved.

The recommended budget also included 24 positions (17.28 FTE) that are funded by $3.7 million in Other Funds revenue derived from the sale of certificates of participation. These positions are to manage expansion of the two existing minimum custody facilities; manage a new deferred maintenance program; and establish three teams for new construction projects.

The legislature approved a budget of $34.8 million General Fund, $43.7 million total funds, and 258.86 FTE. The General Fund support is 1.3 percent below the 1997-99 estimated expenditure levels, however, the overall program funding is increased by 4.3 percent. The table below shows the program level funding and FTE adopted by the legislature.

The legislature generally approved the changes recommended by the Governor; however, the legislature reduced the printed budget by $3.4 million in the following ways:

• Reduced $1.9 million General Fund and four positions (7.5 FTE) based on elimination/delayed hiring of several positions and reduction to services and supplies expenditure plans.
• Reduced $1.7 million Other Funds and 13 positions (9.82 FTE) based on delayed implementation of most of the pre-construction/community development activities at the Junction City building site and plans to transfer the existing Umatilla team to the Lakeview building site.
• Added $278,148 General Fund based on position transfers, job classification upgrades, and accounting adjustments.

Administration & Debt Service includes the Office of the Director, Public Affairs, Inspector General, Offender Information and Sentence Calculation (Records Management), and administrative staff for Community Corrections and Inmate Work Programs. This unit provides overall direction and administration, oversight and investigative support, internal audits, hearings and rules coordination, and public information. The Community Corrections administration works in partnership with counties and is charged to develop standards and operate a statewide evaluation system to monitor the effectiveness of community corrections services provided under SB 1145. The Community Corrections staff also develop inter-governmental agreements with counties to provide supervision, services and sanctions to: felony offenders sentenced to probation; felony offenders on parole or post-prison supervision after completion of a prison sentence; or to felony offenders sentenced or sanctioned for incarceration periods of 12 months or less. Community Corrections staff are also responsible for interstate compact activities, development of release plans for all prisoners, and compliance inspections at 109 jail facilities located in cities and counties.

Base budget funds include amounts owed on certificates of participation (COP's) that have been issued ($65.1 million); amounts estimated to be owed to finance previously approved construction projects where the COP's have not been sold ($21.9 million) and amounts estimated to be owed if financing is approved by the January 1999 Emergency Board ($3.2 million). The projects for which COP's have been sold include the SRCI expansion; Two Rivers Correctional Institution; the 21 local construction projects authorized by the 1996 Special Session for counties to use in the management of SB 1145 offenders; and costs related to the evaluation and purchase of seven new sites to carry out the Long-range Construction Plan. The projects authorized for which the COP's have not been sold include the Women's Prison and Intake Center and a NORCOR county jail. The projects not approved prior to January 1999 include costs to expand three existing prisons; to finance a Multnomah SB 1145 facility; to pay for warehouse improvements; and pay for year 2000 compliance projects.

Administration and Debt Service are primarily supported by General Fund. Other Fund revenue from COPs sold to pay for facility construction is also used to pay for COP issuance/finance costs ($5.6 million. In 1997-99, $600,000 in Other Funds was provided for inmate release or "gate money" from the Inmate Welfare Fund and approximately $622,200 will be provided in 1999-01.

The Department is in the middle of a state facility construction and expansion period that is projected to continue beyond 2005. Debt service will continue until approximately 2030. The construction and siting costs are estimated to be over $1 billion. In 1999-01, debt service payments are estimated to be $82 million. Approximately $65.1 million is for projects already financed or expected to be financed during 1997-99 and the remaining $16.9 million is the estimated amount needed for new projects. New projects include existing facility expansions; Lakeview, Madras, Junction City, and White City pre-construction activities; and select capital improvement projects.

As inmate population grows and facilities expand, it will increase the need for investigations, searches, work site monitoring, drug testing, internal audits, and hearings. Opportunities for contraband to get into institutions will also increase since more non-DOC staff will have contact with inmates through work crews, prison industries, public/private partnerships, and contract services. To better utilize limited Special Investigations Unit resources, more cases are being referred back to functional units for further investigation. Offender population growth and increased complexity of sentence calculations is also placing greater demands on the existing system for calculating inmate release dates. The system for calculating inmate release dates is not automated and could contribute to inaccurate release dates being set. To address these issues, the Department has completed a series of consultant studies, developed a business plan, centralized staff, and started implementation of an Offender Information and Sentence Computation (OISC) re-engineering plan. Legal services expenses for 1997-99 are estimated to be $1.2 million more than budgeted and the Department expects a similar level of effort will be necessary in 1999-01, as it continues infrastructure discussions with various local jurisdictions.

Community Corrections administrative staff is still involved in performance reviews, so it can report on the county progress in the development of local programs and accomplishment of outcome measures. It is also working to fully implement a statewide jail management system that should provide counties and DOC with custody offender data necessary for decision making and policy analysis.

The recommended budget was approximately 33 percent higher ($31.2 million) than 1997-99 estimated expenditures and reflected roll-up costs for debt service on previously approved projects; debt service increases to address planned construction projects; and office space needs for central administrative staff. It did not contain any start-up or operating costs for the Women's Prison and Intake Center based on the assumption that it would not open until 2001-03. Specifically, the budget reduced the General Fund by:

• $1.5 million and postpones the need for 9 positions (1.47 FTE) based on the assumption that the Women's Prison and Intake Center will not operate until 2001-03; and
• $108,386 by delaying hiring of new TRCI positions by one week, eliminating PERS funding for the first six-months of employment, and reducing Services and Supplies for start-up/operations.

General Fund additions to the budget included:

• $16.9 million for debt service resulting of the sale of approximately 195 million in COP's in 1999-2001. Those sales are proposed to support construction of the Women's Prison and Intake Center; expansion of two existing institutions; three county facilities authorized under Senate Bill 1145; pre-construction costs for state facilities in Lakeview, Madras, Junction City, and White City; several Capital Construction and Capital Improvement projects; and supporting project/administrative staff.
• $776,319 and six positions (6.0 FTE) for additional technical and staff support for the Offender Information and Sentence Computation Unit.

The legislature approved a budget of $116.1 million General Fund, $122.8 million total funds, and 148.75 FTE. The General Fund support is 23 percent above the 1997-99 estimated expenditure levels and the overall program funding is increased by 30 percent. The legislature generally approved the changes recommended by the Governor; however, the legislature reduced the printed budget by $3.1 million in the following ways:

• Reduced $781,488 General Fund based on lower TRCI debt service costs resulting from refinancing actions. These funds were re-directed to the inmate work program area to restore services and supply budget omissions.

• Reduced $564,518 General Fund and 4.17 FTE based on delayed hiring of TRCI and Offender Sentencing Unit positions.
• Reduced $384,738 General Fund and one position (1 FTE) based on reduced inflation, delayed hiring of community corrections staff, position transfers, and attorney general hourly rate reductions.
• Reduced $124,155 Other Funds to cover finance charges due to updated COP sale dates and amounts.
• Added $277,616 General Fund to address supplemental State Treasurer debt finance service charges and increased demand for attorney general services.

The current service level projection for capital improvements totals $1.3 million General Fund. These funds are generally used for deferred maintenance and asset protection projects.

The $1.0 million in Other Funds available in 1995-97 were one-time funds available from miscellaneous receipts for use on high priority projects. In 1999-01, Other Funds revenue is derived from the sale of Certificates of Participation ($870,875) and from the sale of inmate products and services ($500,000).

Facilities currently owned and operated by the Department are up to 125 years old and include approximately 3 million square feet. A 1996 consultant's review indicated the facilities have deferred maintenance needs totaling nearly $63 million, excluding architectural and engineering (A/E) fees. The consultant's report has been updated to include A/E fees, contingency funds, and inflation. The current deferred maintenance estimate is $75.5 million. In 1997-99, only $1.3 million was provided in this budget unit for capital improvement projects and another $4.0 million was provided in the Planning and Budget Unit to address two environmental clean-up projects at existing institutions. Continuing to defer critical projects is likely to reduce the useful life of facilities and increase future capital outlay needs.

The recommended budget reflected a 111 percemt increase overall from 1997-99 estimated expenditures and provided approximately $1.3 million General Fund that would be used to fund priority life, health, and safety needs in the Department's existing institutions. The budget also provided $870,875 Other Funds expenditure limitation for mandated environmental projects. A $500,000 Other Funds expenditure limitation was included to allow the Inmate Work Program flexibility to create or expand work space as new business opportunities arise.

The legislature approved the Governor's recommended budget for this unit.

This budget unit includes expenditure authority for acquisition or construction of any structure or group of structures; all land acquisitions; assessments; improvements or additions to an existing structure, which is to be completed within a six-year period with an aggregate cost of $500,000 or more. It also includes funding for planning of proposed Capital Construction Projects.

Capital construction plans for 1999-01 are based on the Long-range Construction Plan as modified based on the October 1998 Prison Population Forecast. In July 1999, the Department will have an overall system deficit of 210 beds, which will be managed through the use of temporary beds. Within this total, there will be a 997 minimum custody bed deficit; a 504 medium bed surplus; and a 283 maximum custody bed surplus. The Department has adjusted its long-range plan to begin to address the minimum custody bed shortage. In 1999-01, the plan calls for work to begin on the expansion of three current minimum custody facilities and to begin design/bid activities for construction of 400-bed minimum-security work camps in Lakeview and Junction City. The institutions to be expanded include: South Fork Forest Camp (SFFC) by 50 beds; the Powder River Correctional Institution (PRCI) by 100 beds; and Shutter Creek by 100 beds. During 1999-01, the Department plans to complete the design work on all three-expansion projects but only begin construction at the SFFC and PRCI facilities. Once the three expansions and the Lakeview facility are completed, there will still be a 400 to 500 minimum custody bed shortage, requiring medium custody beds to be used

In 1997-99, the Department installed an interim clean-up system to begin a long-term groundwater contamination clean-up process near Oregon State Penitentiary. The system consists of a groundwater extraction system and a treatment system. It estimates that it will need approximately $850,000 in 1999-01 to operate the system, collect test data, and evaluate alternatives for long-term clean-up.

During the 1997-99 biennia, the Department's prison construction program was reviewed by three Secretary of State audits. The audits reviewed infrastructure planning and development; procurement and contract development; and long-range planning and budgeting. The audits found that the department should: 1) develop a process for infrastructure planning and development that completes agreements earlier; 2) incorporate infrastructure development into the construction schedule to ensure it is complete before the project is finished; 3) provide the knowledge and skills needed to manage infrastructure planning and development; 4) improve its processes for contractor selection, decision documentation, and determination of contract cost; 5) improve its establishment of contract cost limits and control over contract amendments; 6) re-evaluate its long-range construction plan; and 7) conduct the analysis necessary to ensure it is building at least cost. The Department generally agreed with the conclusions of the first two audits, but disagreed with the conclusions of the long-range planning and budgeting audit.

The recommended budget provided Other Funds expenditure limitation based on the assumption that $45.9 million in construction-related projects would be supported by the sale of COP's. Capital construction expenditure authority is needed for only $21.1 million of the projects. The $21.1 million Capital Construction Other Funds expenditure limitation covered development of designs to expand three existing facilities ($750,000); construction of expansion beds at PRCI & SFFC ($7.1 million); pre-construction activities at Lakeview, Junction City, White City, and Madras ($11.8 million); completion of an electrical upgrade at OSCI ($983,500); installation of an electrical substation at SFFC ($500,000); and an on-going groundwater clean-up project at OSP ($850,000).

The remaining $24.8 million related to projects that already have capital construction authority or to projects where such authority is not necessary. Specifically, the $24.8 million Other Funds expenditure limitation covered three SB 1145 county projects ($12.3 million); TRCI laundry equipment ($1.0 million), environmental projects ($0.9 million), and construction-related operational expenses ($10.6 million).

The recommended budget also included a $22.1 million supplemental 1995-97 Capital Construction Other Funds limitation for the Women's Prison and Intake Center. With this supplemental limitation, the Department planned to have the Department of Administrative Services sell approximately $173 million in COPs so construction of the Women's Prison and Intake Center at Dammasch could begin. The Governor's budget was built on the assumption that COP's for this project would be sold on August 1, 1999 and again on August 1, 2000. The following table summarizes 1997-99 authorized projects and 1999-01 proposed projects.

The legislature approved a budget of $187.9 million Other Funds. The legislature generally approved the changes recommended by the Governor; however, the legislature adjusted the printed budget in the following ways:

• Reduced $4.9 million Other Funds for various requested 1999-01 projects based on reduced pre-construction activities at Lakeview, Junction City, and Madras, including establishment of a $249,700 Other Funds limitation for White City and a $2 limitation for SB 1145 projects being planned for Klamath and Lincoln counties.
• Reduced $154.9 million Other Funds for 1995-97 authority for construction of the Women's Prison and Intake Center in Wilsonville or the Wilsonville Urban reserve. This represents the unexpended authority, since $2.3 million has already been obligated for various evaluation and design activities at the Dammasch Hospital site.
• Established a $171.7 million Other Funds expenditure limitation for construction of the Women's Prison and Intake Center at any site except the Dammasch Hospital site.

The following table summarizes 1997-99 authorized projects and 1999-01 approved projects.

The legislature approved a $2.6 million appropriation to the Emergency Board for allocation to the Department after the April 2000 prison population forecast, if necessary, for population management issues. These funds were identified and set aside since they correspond to estimated costs to start-up and operate the last three units at TRCI ($1.2 million); operate additional prison beds resulting from passage of HB 2002, which increased the penalties for a 4^th conviction for driving under the influence of intoxicants ($1.1 million); operate additional prison beds resulting from passage of HB 2273, which increased the penalties for assaulting correctional staff ($146,051); and to operate additional prison beds resulting from passage of HB 2319, which increased the penalties for money laundering ($117,884). If these funds are not allocated to the Department by November 1, 2000, the Emergency Board may use them to meet any other lawful purposes.

LFO Analyst: Niswender

The Criminal Justice Commission was created by House Bill 2704, passed during the 1995 Legislative Session. The bill created the Commission and eliminated its predecessor, the Criminal Justice Council. The members are appointed by the Governor, subject to confirmation by the Senate. The Commission's primary purpose is to develop and maintain a state 333criminal justice policy and comprehensive long-range plan for a coordinated state criminal justice system that encompasses public safety, offender accountability, crime reduction and prevention, and offender treatment and rehabilitation. The Commission is also responsible for monitoring and recommending change to sentencing guidelines. Other duties include: the study of criminal justice issues; the collection and dissemination of related statistical information, including sentencing practices; and technical assistance to local public safety coordinating councils. HB 2229, passed during the 1997 Legislative Session, directed the Commission to produce recommendations regarding methods of assessing the effectiveness of juvenile and adult correctional programs, devices, and sanctions in reducing criminal conduct. HB 2951, also passed during the 1997 Legislative Session, directed the Commission to staff the Asset Forfeiture Oversight Committee. SB 555, passed during the 1999 Legislative Session, directed the Commission to provide staff support to the Juvenile Crime Prevention Advisory Committee (JCPAC), implement JCPAC recommendations, coordinate administrative and technical assistance of state agencies, and contract with counties for juvenile crime prevention programs and services.

The agency is supported mainly by General Fund. The Commission's primary Other Funds revenue ($66,481) is derived from forfeiture proceeds, which are to fund the Asset Forfeiture Oversight Advisory Committee activities and a half-time support position. The law requires local agencies to contribute 2.5 percent and state agencies 3 percent of net forfeiture proceeds, not to exceed $50,000 in any biennium, to be deposited into the Asset Forfeiture Oversight Account. Amounts received above $50,000 must be distributed to the state and local governments that contributed. It is not known whether the asset forfeiture revenue will be sufficient to fund the Asset Forfeiture Oversight Advisory Committee activities. As of November 1998, the Commission has received approximately $18,000 in asset forfeiture revenue and approximately $50,000 per biennium is needed. It appears many law enforcement agencies have not been contributing as required. A recent Legislative Counsel opinion confirmed that cities and counties risk being liable to pay interest on amounts owed.

In 1999-01, $3.6 million in federal funds from the Federal Office of Juvenile Justice and Delinquency Prevention will be transferred to the Commission. These funds have been going to the Commission on Children and Families from Formula Grant, Challenge Grant, and Delinquency Prevention programs. The funds have been used to support programs developed by local governments, local private agencies, and eligible tribes. The Formula Grant allows 10 percent of the funds to be used for planning and administration. The Delinquency Grant requires a 50 percent cash or in-kind match. The Challenge Grants are 10% of the state's Formula Grant and targeted at gender specific programs or alternatives to incarceration. The agency is also eligible to receive a $50,000 annual federal grant, through the Bureau of Justice Statistics, for support of its Statistical Analysis Centers. Remaining federal funds ($315,848) are from a National Institute of Justice grant that has been provided for a two-year study on the justice system impact of Ballot Measure 11.

The Commission has yet to fulfill its primary duty of developing and maintaining a state criminal justice policy and comprehensive, long-range plan for a coordinated state criminal justice system. The primary reasons are that it is a significant task and that limited Commission staff have been heavily involved in sentencing guidelines monitoring/updates and other duties. The Commission is in the process of developing its first report for presentation to the 1999 Legislature. The report will outline how the current system operates and identify key planning and policy issues. The Commission will rely on input from the 1999 Legislature to finalize a work plan to fulfill its primary duty. The scope and timeline for completion of the work plan will determine the Commission's staffing and funding needs for the next biennium.

In September 1997, the Governor signed an executive order and formed the Criminal Justice and Program Effectiveness work group. The work group was directed to study and make recommendations regarding the criminal justice community's need for performance data and useful research. The work group is still formulating its recommendations but early indications are that there will be specific recommendations to establish a criminal justice policy research institute, develop a criminal justice data warehouse, and implement program effectiveness measures.

In September 1998, the Governor signed an executive order and formed the Juvenile Crime Prevention Advisory Committee (JCPAC). The Governor charged this committee to review local juvenile crime prevention plans and recommend them to the Governor for funding. The Governor is recommending a budget initiative to implement Oregon's High-Risk Juvenile Crime Prevention Partnership. The Governor has directed that the Criminal Justice Commission staff JCPAC and be responsible for implementation of its recommendations. Additionally, the Commission is to coordinate state technical assistance efforts on a statewide and county specific basis. This additional administrative responsibility will present a significant challenge to the Commission's leadership and will require an increase in the Commission's position authority.

Due to budget limitations, most Commission members and Sentencing Guidelines Subcommittee members have not received travel cost reimbursements and the Commission has not been able to hold meetings outside of the Salem area. Members are concerned that this is adversely affecting their ability to provide an impartial forum for statewide public safety policy development and planning.

The Governor's recommended budget of $23.6 million was a $22.5 million increase over the 1997-99 estimated expenditure level and the Commission's current service level. The increase was due to the Commission's role in administering the Governor's juvenile crime prevention program. Support for the Asset Forfeiture Oversight Committee was shifted from General Fund to Other Funds, as the 1997 Legislature directed. The Commission's public safety planning and coordination programs were continued at current service levels. The major components of the budget increase were:

• $20 million General Fund for implementation of the Governor's High-Risk Juvenile Crime Prevention Partnership. Of this amount, $19 million was to be used by counties for high-risk juvenile crime prevention programs and $1 million is for coordination of activities with counties; management of grants to counties and providers, and evaluation of program results. The recommended budget included four new positions (4.0 FTE) to staff the Juvenile Crime Prevention Advisory Committee and coordinate state technical assistance efforts.
• $2.4 million Federal Funds and a $67,058 General Fund match was transferred from the Commission on Children and Families for local juvenile crime prevention programs and services. The recommended budget included two positions (1.50 FTE) that are to administer the Federal Office of Juvenile Justice and Delinquency Prevention funded activities.

The legislatively adopted budget is $14.8 million General Fund, $18.9 million total funds, and 11.25 FTE. It reflects a $6 million General Fund reduction and a $1.3 million Federal Funds increase when compared to the Governor's recommended budget. The legislature generally accepted the Governor's recommended budget proposals but did reduce it by a total of $4.7 million and provide additional directives. Specifically, the legislatively adopted budget:

• Reduces $6 million General Fund from the $20 million included in the Governor's recommended budget for high-risk juvenile crime prevention programs. As such, a total of $13 million will be distributed to counties for implementation of local juvenile crime prevention plans and $1 million will be used by the Commission for plan administration and evaluation. To carry out the expanded duties, 4 positions and 3.75 FTE were approved.
• Adds $1.3 million Federal Funds to the $2.7 million included in the Governor's recommended budget. These additional funds are available since all of the federal grant funds provided by the Office of Juvenile Justice and Delinquency Prevention during 1997-99 were not spent by the State Commission for Children and Families prior to transfer of program responsibilities to the Criminal Justice Commission. The two positions (1.50 FTE) necessary to administer the OJJDP grants were also approved.
• Shifts $18,000 from General Fund to Federal Funds based on available grant funds. Specifically, $15,000 was shifted to a U.S. Department of Justice grant to study the impact of Ballot Measure 11, since the Commission is assuming a greater administrative role in the study. The remaining $3,000 was shifted to Federal Funds since purchase of a personal computer will be charged against the Statistical Analysis Center grant.
• Sets up a separate expenditure limitation for the Asset Forfeiture Oversight Account to separately track expenditures, since passage of HB 2937 will allow the Commission to retain more than $50,000 of asset forfeiture proceeds.
• Directs the Commission by budget note to work with other criminal justice agencies to develop a work plan for a state criminal justice policy and comprehensive long-range plan. The work plan is to be presented to the Emergency Board by January 2000 and a progress report is to be provided by December 2000.

LFO Analyst: Niswender

The Dispute Resolution Commission (DRC) is a seven-member commission appointed by the Governor. Its purpose is to support the effective use of conciliation, negotiation, mediation, and other collaborative problem solving processes. The three programs administered by the Commission include Community Dispute Resolution Services, Court Related Mediation, and Public Policy Dispute Resolution.

The purpose of the Community Dispute Resolution Program is to develop and maintain sustaining community dispute resolution services throughout the state. The Commission works with many partners and stakeholders in providing technical assistance, training and grant funds to dispute resolution programs selected by the counties.

The Court Related Mediation Program encourages the development and use of mediation in civil matters. The Commission is responsible for assisting the Oregon Supreme Court to implement and govern the operation and procedures of court mediation through the development of model rules. The intent of this program is to reduce reliance on costly litigation to resolve disputes.

The purpose of the Public Policy Dispute Resolution Program is to establish an integrated and coordinated effort to help state agencies and the public resolve contentious public policy issues using proven collaborative problem solving techniques and procedures. The goals of the program include: 1) decrease the cost of dispute resolution, 2) increase the efficient resolution of disputes and the quality of the agreements reached, 3) increase the satisfaction of users with the processes and outcomes of these processes. DRC works cooperatively with the four agency based Dispute Resolution Coordinators in the Department of Transportation, Department of Human Resources, Department of Administrative Services and Land Conservation and Development Department. Each Coordinator is responsible for working within a cluster of smaller agencies in coordinating the overall mediation process. Guidance is provided in education, training systems design and case assessment.

The Commission is primarily funded through a surcharge on certain civil court filings. The 1997 Legislature increased fees for small claims court cases, probate fees and the existing surcharge on district and circuit court filing fees. Based on the current surcharge rate, approximately $2.3 million will be collected in 1997-99. Fifty percent of the filing fee revenue is reserved for grants to local counties for community dispute resolution program services. Thirty percent is available to the Commission for program management. The remaining 20 percent is used for the purposes of supporting state agency use of alternate means of dispute resolution. The total amount of filing fees projected to be collected in 1999-01 is $2 million.

Within a three year period if a county does not use the surcharge for developing a community dispute resolution center, the money reverts to DRC. In 1999-01, $269,968 in accumulated and unspent filing fees will become available for DRC programs. Since the goal is to have dispute resolution conducted on a local basis, the money is targeted for thirteen unserved counties to develop programs and centers so they can receive the services and grant funding in the future.

The DRC successfully organized nearly all of the state's mediation centers in a joint proposal to the National Association for Community Mediation to provide each participating Oregon center with the same case management and case data software. In the 1999-01 biennium, the mediation centers will receive their vouchers covering 30 percent to 70 percent of the cost of the software. With each center having the same software, there will be faster and easier reporting process. DCR is having common software developed so there will be a uniform reporting format, which will result in the entire reporting process being electronically transferred to DRC.

There is an interagency agreement between the Commission and the Department of Housing and Community Services to provide grants for manufactured dwelling park mediation programs in five counties. The total amount projected for 1999-01 is $168,765. The money is passed from Department of Housing and Community Services through the Commission to the counties.

The General Fund appropriation provides partial support for the Public Policy Dispute Resolution Program Coordinator and corresponding services and supply costs.

The Community Dispute Resolution Program set several goals for the 1999-01 biennium:

• Continue to strengthen and provide technical assistance, training and grant funds to existing and new programs in counties.
• Stress the utility and benefits of having community dispute resolution centers serve youth through the schools and juvenile justice system.
• Focus on creating a greater cultural and language competence for local mediation centers. They are targeting four counties with substantial Hispanic/Latino populations.
• Continue to develop working relationships between the courts and dispute resolution centers.

DRC is assisting the Oregon Supreme Court in a major restructuring of the court system and development of an integrated statewide system of community dispute resolution centers along with expanded use of settlement conferences, mediation, and arbitration. The Commission emphasis is on support of the Justice 2020 vision and implementation and the effective integration of court related and community mediation services.

With revenue derived from the surcharge described above, the Commission provides grants to community programs. To participate, counties must adopt resolutions and select grantees from among qualified dispute resolution programs. There are 24 dispute resolution centers in 16 counties that are served by 676 volunteer mediators. They mediated 2,759 cases with 8,394 clients during 1997-98 and achieved an 84 percent resolution rate. The Commission is targeting thirteen additional counties that do not have dispute resolution centers to start programs during 1999-01. The Commission hopes to establish multi-county consortiums for the yet unserved counties.

The Governor's budget of $2.2 million was 30.4 percent higher than the 1997-99 estimated expenditures. The General Fund support increased by 66 percent. This includes $40,000 to fund a pilot program for conflict resolution strategies in schools. In addition, it increased support to counties and Dispute Resolutions Centers. It would fund the development of dispute resolution centers in thirteen counties where programs do not exist.

The legislatively adopted budget consists of $148,253 General Fund and $2.3 million total funds. This represents a 2.3 percent General Fund increase and a 30 percent total fund increase over the 1997-99 expenditures. The legislature approved all current service level programs, but made adjustments, which decreased the Governor's recommended budget by $92,403 General Fund and increased Other Funds use by $87,226. The 1997 Legislature directed the agency to reduce its dependence upon the General Fund since court filing fees were increased to result in additional Other Funds revenues. Based on this, the 1999 Legislature shifted all General Fund services and supplies expenditures to Other Funds. Additionally, a $50,000 proposal to improve conflict resolution strategies for schools was approved, but the funding source was shifted from General Fund to non-court filing fee Other Funds. The Department of Education budget also contains a budget note directing that $15,000 General Fund be used to assist in the development of the Commission's school strategies. The approved budget allows for the reclassification of the director's position and an increase in services and supplies that support the county and dispute resolution center program. The legislature directed the Commission to document the number and types of cases encountered in the public policy program; how the cases were resolved; the timelines of the cases from inception to resolution; and the estimated savings of mediating the case versus having them resolved by litigation. This information is to be provided to the Joint Committee on Ways and Means during the next regular session.

LFO Analyst: Bailey

District attorneys, while elected locally, are state officers. District attorneys and their deputies prosecute state criminal offenses committed by juveniles and adults. In addition to criminal prosecution, district attorney legal duties include enforcement of child support obligations in non-welfare cases, prosecuting civil forfeitures, presenting evidence at mental hearings, ruling on public records requests, assisting juvenile courts, and advising and representing county officers. District attorneys also are active in local public safety coordinating councils, child abuse prevention teams, and community outreach activities.

As state officers, the salaries and benefits of the 36 elected district attorneys are paid by the state through a General Fund appropriation. The 1995-97 salary plan had four categories with various amounts that recognize the difference in the size of counties.

The state's support of DA salaries and benefits comes entirely from the General Fund; however, most counties (approximately 2/3) supplement the salary paid by the state. Generally, counties fund 90 percent of the total expenses of the offices of district attorneys.

In SB 5523, the 1997 Legislative Assembly appropriated an additional $345,172 General Fund for district attorney salary increases. This amount and the distribution from statewide employee compensation funds provided an estimated 7.5 percent annual cost of living increase. The salary amounts are based on a plan developed and adopted by the Department of Administrative Services that includes salary adjustments awarded other management service employees.

The Governor's recommended budget continued the state's payment for district attorney salaries and benefits at the current service level.

The legislature approved the Governor's budget for DA's salaries and benefits with one technical adjustment to delete $358,716, which reflected a 1997-99 salary adjustment included twice in the 1999-01 budget.

In addition to paying part of the district attorneys' salaries and benefits, the state provides special payments to counties to defray the cost of deputy district attorneys. There are approximately 300 deputy district attorneys serving Oregon with the same duties as the elected district attorney. A prosecutor handles an estimated 800 to 1,000 misdemeanors or 200 to 300 felony cases per year. Counties pay most of the deputies' salaries. The state funds for deputy DA's are distributed as follows: $458 per deputy per month for the first three deputies, plus the balance on the ratio of the number of deputies per county to total deputies (approximately 300). Each quarter, counties are required to certify their staffing levels. This formula protects smaller counties from significant funding changes and leaves larger counties with more funding level variations and a greater reliance on supplemental county funding.

The majority of the deputies' salary is paid by the county and, therefore, not reflected in the state budget. The state's appropriation comes from the General Fund.

Over the last 10 years, the state supplement for deputy salaries has decreased approximately 40 percent. During that same 10- year period, the number of deputies increased by nearly 50 percent, causing counties to provide more and more support for state criminal prosecutions. If additional funding were available, the number of deputy DA's would probably increase to meet workload. However, this would also affect the court system, jails, prisons, and community supervision.

The Governor's recommended budget continued the state's supplement for deputy district attorneys at the current service level.

The legislature approved the Governor's budget to provide special payments to counties to defray the cost of deputy district attorneys.

This is a partial reimbursement of statutorily mandated witness fee costs for trials and grand jury hearings in criminal cases. These funds have been distributed as follows: $990.50 per county, per year, plus the balance on the ratio of deputy DA's per county to total deputies. The counties are required by statute to pay witnesses $5 per day and mileage at eight cents per mile.

The state's contribution is entirely General Fund. Counties, with county resources, however, pay the majority of these costs.

This appropriation also provides partial reimbursement of actual witness fees for trials and grand jury hearings in criminal cases. The amount of the state's reimbursement is less than half the total cost. The counties pay the difference between the state's reimbursement and the total cost of witness fees. Counties that have difficulty making up the difference may consider other steps, which primarily rely on reducing the number of witnesses testifying at trials.

Prosecution witness fees in the Governor's recommended budget were continued at the current service level.

The legislative made no change to the funding level recommended for prosecution witness fees.

Administrative expenses include mandated central service costs such as tort liability insurance to cover all DA's and their staff, assessments for audits, state library, and Department of Administrative Services Service Charges. The remaining funds pay for the purchase of one copy of Appellate court legal opinions and advance sheets for each District Attorney Office. The Department of Justice provides at no charge administrative and accounting services.

The Governor's recommended budget continued administrative expenses at the current service level.

The legislature made no change to the funding level recommended for prosecution witness fees. Adjustments to the Department of Administrative Services' assessments and changes in the Division of Audit's allocation of audit charges resulted in a net increase of $5,125.

LFO Analyst: Bailey

The Department of Justice is responsible for general legal counsel and supervision of all civil actions and legal proceedings in which the state is a party or has an interest. The Department is in charge of all the state's legal business that requires an attorney or legal counsel, and is further responsible for a number of programs including child support enforcement, district attorney assistance, crime victims' compensation, charitable activity enforcement, and consumer protection services.

The Department includes the Office of the Attorney General (Administration) and six operational divisions; these are the Appellate, Civil Enforcement, Criminal Justice, General Counsel, Trial, and Support Enforcement Divisions.

The Department of Justice receives General Fund, Other Funds, and Federal Funds. Other Funds make up the majority of the Department's revenue (87%), half of which comes from hourly rates the Department charges state agencies for legal advice, litigation, and other services. This biennium, the Department has proposed an increase in hourly rates for attorneys from $79 to $92, investigators from $53 to $59, and paralegals from $45 to $51. Hourly rates for law clerks and clerical support are also increased. The other portion of the Department's Other Funds revenue comes from several sources:

• Adult and Family Services Division of the Department of Human Resources for child support enforcement;
• unitary assessment revenue for crime victims' compensation;
• fees charged to charitable and non-profit organizations for registration and filing financial reports;
• the Consumer Protection and Education Revolving Fund from Assurances of Voluntary Compliance; and
• the Western States Information Network grant funds passed through California by the federal government.

The General Fund appropriation, which makes up about 8 percent of total revenue, partially funds legal services in programs where there is no state agency to bill. These services include representing the state in criminal and capital appeals, drafting and defending ballot titles, and corrections litigation. District Attorney Assistance, Organized Crime and Criminal Intelligence, Consumer Protection, and Medicaid Fraud are also activities supported by the General Fund. These services are provided by Trial, Appellate, Civil Enforcement, and Criminal Justice Divisions. Because the General Fund does not cover the full cost of legal services, state agencies have subsidized them through the fees they pay the Department.

Federal funds comprise approximately 5 percent of the Department's total budget, and they support two programs - Medicaid Fraud, administered by the Civil Enforcement Division, and the crime victims' compensation program in the Criminal Justice Division.

The adopted budget for the Department generally approved funding for all programs at the level in the Governor's budget except for a major reduction in the Civil Enforcement Division in General Fund resources supporting the Financial Fraud and Consumer Protection Section. The only other major deviation from the Governor's budget was a reduction in Criminal Appeals resources of $1.5 million General Fund. This amount was appropriated to the Emergency Fund. A description of the Governor's recommended and legislatively adopted budget for each DOJ program follows.

Administration includes the Office of the Attorney General and Administrative Services. The Office of the Attorney General, which includes the executive management of the Department, sets direction and policy for the Department. Administrative Services provides centralized operational support services for the entire Department and includes Fiscal Services, Information Services, (Facility) Operations, and Personnel.

The Department as a whole has experienced considerable growth since the 1995-97 biennium. This trend continued in the 1997-99 biennium with the addition of the Child Support Accounting Unit in the Support Enforcement Division. Additional administrative staff is proposed in the 1999-01 biennium to provide fiscal, personnel, and information systems services to support the growth in the Department.

The Governor's recommended budget proposed an increase of 22.7 percent above 1997-99 expenditures. The budget for this section included program packages that added 8.75 FTE and more than $700,000 to provide additional help in budget support, accounts receivable and cash management, accounting and contracting functions, and personnel. These program options also provided resources for information systems support including maintenance of existing database systems, development of a comprehensive data warehouse, work to oversee the Department's network, and expand use of the Internet and Intranet.

The legislature approved the Governor's recommended budget for Administration. SB 5547 provided an increase of $154,972 in the Other Funds expenditure limitation, which reflects changes in the Secretary of State, Division of Audit's allocation of audit charges.

The Appellate Division represents the state in all cases that are appealed to state and federal appellate courts in which the state is a party or has a significant interest. Attorneys in this Division spend the majority of their time preparing briefs and arguing appeals in criminal, civil, and administrative cases in which defendants disagree with the trial court results. In most of these cases, attorneys appear before the Oregon Court of Appeals, the Oregon Supreme Court, and the federal Ninth Circuit Court of Appeals. Attorneys occasionally appear in other federal appellate courts and the U.S. Supreme Court. Attorneys in this Division also must prepare and defend ballot titles.

Although the Division's budget is totally supported with Other Funds, the principal source of funds to pay the billing is the General Fund appropriation for criminal appeals. This appropriation, however, is insufficient to cover the total cost of these appeals. Any shortfall in funding is covered by Other Funds resources from hourly rates paid by state agencies for legal services and advice. The 1997-99 legislatively adopted budget included $600,000 Other Funds. Without a significant increase in the General Fund appropriation, the shortfall for criminal appeals will be significantly greater in the 1999-01 biennium. This shortfall translates into approximately $3.00 per hour of the amount charged to state agencies for services provided.

Revenue for all other appeals, which are civil or administrative appeals, is Other Funds that are generated from the hourly fees billed to the state agencies involved in the appeals.

Since the Department is usually responding to appeals filed by others, it has little or no control over its workload. During 1997 and 1998, the State argued and briefed 1,500 criminal cases that defendants had appealed. Criminal appeals are expected to increase 15 percent in the 1999-01 biennium. The increase in appeals is driven by projected increases in the prison population, longer mandatory sentences imposed under Ballot Measure 11 and HB 3488 (chronic property offender legislation), and more challenges to decisions made by the Board of Parole and Post Prison Supervision. Death penalty cases are automatically appealed. While the Department receives few death penalty appeals during the biennium, these cases are always very complex and time consuming. This Division also experiences greater workload demands because the number of ballot measures continues to increase. More ballot initiatives generate more complaints about ballot titles that the Department must defend. Since there is no client agency to bill for ballot title work, the Department has absorbed this workload in its budget, which means this activity, too, is being subsidized by revenue from state agency billings.

The Governor's recommended budget maintained services at the current service level, which included adjustments for inflation, increased state government service charges and PERS contributions. The budget also included a program option package that adds $1.2 million and 11 positions (9.5 FTE) to manage the increased caseload of criminal appeals and mitigate a backlog of approximately 140 cases.

The legislature approved the Governor's recommended budget without adjustment.

The Civil Enforcement Division represents the state in civil cases and also enforces certain criminal laws. This Division includes five sections.

• The Family Law Section provides legal services to the Support Enforcement Division for establishing paternity and child support orders. This section also provides general counsel to the Legal Assistance Program of the State Office for Services to Children and Families (SCF), and represents SCF in termination of parental rights cases.
• The Civil Recovery Section is general counsel for agencies in the collection of debts owed the state This section also collects benefit overpayments (i.e., unemployment and assistance) from individuals as well as unpaid and underpaid wages and workers compensation claim costs from uninsured employers.
• The Medicaid Fraud Section investigates and prosecutes fraud by Medicaid providers and physical or financial abuse or neglect of residents in Medicaid-funded facilities.
• The Financial Fraud/Consumer Protection Section provides information to citizens to help them protect themselves from fraudulent circumstances such as construction contractor fraud, elder abuse, phony sweepstakes promotions, and real estate frauds. This section is the primary enforcer of the Unlawful Trade Practices Act and files criminal cases, when indicated, or pursues available civil remedies.
• The Charitable Activities Section supervises and regulates the activities of charitable and, to some degree, other nonprofit organizations and enforces laws related to charitable trusts, charitable solicitations, and nonprofit gaming.

Revenue to support the Family Law and Civil Recovery Sections comes from billings to the state agencies involved. Federal Funds provide 75 percent of the resources for the Medicaid Fraud section. The federal government has allowed the Department to use funds recovered from earlier investigations and prosecutions in lieu of the 25 percent General Fund match. Changes in federal policy, however, will make this more unlikely in the future. Financial Fraud/Consumer Protection Section services are funded by both the General Fund and Other Funds, including funds in the Consumer Protection and Education Revolving Account paid by companies and organizations that sign assurances of voluntary compliance for violations of consumer protection laws. Other Funds also include annual fees paid by gaming registrants or licensees. Fees charged to charitable and non-profit organizations for registration and filing financial reports provides funding for the Charitable Activities Section.

The Medicaid Fraud Section continues to pursue fraud vigorously, balancing the severity of the potential fraud with the level of potential dollar recoveries. The increasing numbers of senior citizens in long-term care facilities, the changes brought about by various health care reform initiatives, and the increasing sophistication seen in health care fraud schemes combine to increase the workload of the Medicaid Fraud Section. The Family Law Section expects a significant increase in its workload caused by the federal requirement to file for termination of parental rights for all children in foster care who have been in care for 15 of the last 22 months.

The Governor's recommended budget provided resources at the current service level adjusted for inflation and other increased costs. It also included three option packages. The first package increased expenditures by $1.1 million Other Funds and added 11 positions (10.0 FTE) in the Family Law Section to accommodate the expected increased workload resulting from implementation of the federal Adoption and Safe Families Act and SB 689. The second package added two positions and $280,000 Other Funds in the Civil Recovery Section to more aggressively pursue recovery of moneys due the state, as identified by Secretary of State's audits. The third package increased the Other Funds expenditure limitation by $230,000 and added 3 positions (2.5 FTE) in the Financial Fraud/Consumer Protection Section to improve response time to consumer complaints and provide resources to regulate Monte Carlo events, which was mandated by the 1997 Legislative Assembly.

The legislature approved in total the Governor's recommended budget for the Civil Enforcement Division. However, the legislature decreased the General Fund appropriation supporting the Consumer Protection and Financial Fraud program by $1.1 million and increased the Department's Other Funds expenditure limitation by the same amount. The Department expected to receive reimbursement in excess of its costs in the tobacco settlement case. States are to be reimbursed for their legal fees at market rate, which exceeds the Department's $77.00 per hour billing rate used to calculate actual cost. This excess reimbursement will provide the resources for the increased expenditure limitation.

The Criminal Justice Division provides investigative and prosecutorial assistance to state agencies and Oregon's 36 district attorneys through publications, training, and direct assistance on specific cases. The Division is organized into three sections: District Attorney Assistance, Organized Crime, and Crime Victims' Assistance. This Division also coordinates Oregon's role in the Western States Information Network, a federally funded narcotics information network among five western states.

District Attorney Assistance Section - Assists district attorneys and their deputies in criminal cases and matters relating to prosecution and law enforcement in their respective counties by providing trial and investigative assistance, technical-legal and prosecutorial advice and services, and legal education and training in criminal law and procedures. The primary purpose of the Organized Crime Section is to detect and combat organized criminal activities in the state. The section also investigates allegations of corruption or malfeasance by public officials in Oregon and, where needed, assists with legal action. The Crime Victims' Compensation Section is responsible for administering the crime victims' compensation program and the federal Victims of Crime Act grant program. The crime victims' compensation program was created to provide assistance to innocent victims who sustain injuries resulting from criminal activity. This section certifies local assistance programs so they can provide assistance locally. The Victims of Crime Act is a federal grant program that provides funds to states for victims' assistance.

District Attorneys' Assistance and the Criminal Intelligence Sections are funded entirely by the General Fund while the Crime Victims' Compensation program is supported by revenue from the Unitary Assessment, punitive damages and restitution, and the federal Victims of Crime Act grant funds. Oregon also receives funds through a contract with the California Department of Justice, which administers the federal grant supporting the Western States Information Network. These funds are budgeted as Other Funds.

The Governor's recommended budget for the Criminal Justice Division reflected an increase of 12.9 percent over the 1997-99 estimated expenditures. This increase includes resources to cover standard inflation on services and supplies, increases in government service and legal charges, and two program packages that add $477,630 total funds and four positions. One package enhanced the Western States Information Network by adding one FTE to be funded entirely by the contract with the California Department of Justice. The second package added $326,000 federal funds and three FTE for the Crime Victims' program to deal with increased workload.

The legislature approved the Governor's recommended budget for the Criminal Justice Division and added three limited duration positions and $272,716 Other Funds expenditure limitation to address a growing backlog of applications by crime victims for assistance. The legislature also passed HB 2258, which extends the period of time a victim of child abuse is eligible to receive victims' assistance. Previously, benefits were available for three years after the initial determination of eligibility. This legislation, which added one position (0.50 FTE) and $336,384 Other Funds to the Division's budget, will allow eligible victims to receive benefits until age 21.

The General Counsel Division provides a broad range of legal services to state officials, agencies, boards, and commissions. The Division provides oral and written legal advice, drafts or reviews contracts and other documents, represents agencies in administrative hearings, and furnishes legal opinions. The Division also handles some litigation and appellate work involving client agencies.

State agencies generate varied and diverse legal issues. To deal with this broad range of subject matter, the Division is organized into the following nine sections: Business Activities; Education, Government Services; Human Services; Labor and Employment; Natural Resources, Regulated Utility and Business, Tax and Finance; and Business Transactions.

Funds to support the General Counsel Division come from billings to state agencies for legal advice and representation as needed.

State agencies' need for legal advice and legal representation is increasing. A significant area that agencies and the Department must address in the 1999-01 biennium is the Y2K issue. This Division, along with the Trial Division, will advise agencies about steps to minimize their risk of Y2K litigation exposure and will represent them when and if litigation ensues. This Division's workload is growing both in volume and in complexity. In 1997, HB 2321 added requirements that the Attorney General (AG) review and approve state agency contracts for legal sufficiency or process class exemptions after a legal review of agencies' contracting practices, forms, and proposed conditions on each exemption request. Two other areas in which legal issues are increasing in complexity relate to federal laws on the Endangered Species and Clean Water Acts. Also employment-related matters (such as employee grievances, disciplinary actions, collective bargaining issues, and sexual harassment) comprise a larger percentage than ever before of court dockets. As a result, this Division's caseload on employment law issues is also increasing.

The Governor's recommended budget was 31.9 percent over 1997-99 expenditures. It continued services approved in the 1997-99 biennium, adjusted for inflation and other increases and also included a program option package that adds $3.1 million and 24 new positions (23.0 FTE) to respond to the demand for additional legal services in the following areas:

• Business Transactions Section. Two positions to handle work from the Department of Corrections (DOC) and three positions specifically to handle the additional workload generated from passage of HB 2321. Because the Department of Corrections is required to put inmates to work, it needs to enter into a large number of contracts and oversee increasingly complex transactions that require legal review.
• Labor and Employment. One new position to deal with the increased demand for legal assistance in this area. Bargaining units have increased and the number of grievances referred to this section by the Department of Administrative Services' Human Resources Management Division by 66 percent from the 1995-97 biennium (104) to the 1997-99 biennium (173).
• Government Services. Three attorneys (2.5 FTE) to deal with issues related to the Department of Corrections' two new correctional facilities that will become operational, as well as issues related to the Oregon Youth Authority, Secretary of State, and the Department of Transportation matters.
• Business Activities. Two attorneys and one investigator to meet the workload caused by the increased number of cases and complexity of issues faced by regulatory and licensing boards.
• Human Services. Two attorneys to meet increased workload related to requirements under the federal Adoption and Safe Families Act and SB 689 that will generate more hearings related to parental rights. These hearings are expected to be more contentious because parents whose children have been removed from their homes have a shortened time frame to correct problems so they can have their children returned to them.
• Natural Resources. Two attorneys to address legal matters concerning implementation of the Salmon Plan and in adjudicating Klamath water rights.
• Alternative Dispute Resolution. One attorney.
• General. Six support staff to relieve attorneys from doing clerical work that ultimately gets billed at attorney charge rates and one administrator (.5 FTE) to handle daily administrative duties resulting from increased staff and workload.

The legislature approved the Governor's recommended budget for this division with minor technical adjustments in one policy package. This technical adjustment reduced the Division's budget by $30,627 Other Funds. The legislature also reduced the rate the Department can charge for legal services from the $92.00 per hour the Department proposed to $90.00 per hour. This adjustment will have the greatest impact on the General Counsel Division. To offset part of the increasing demand for legal service by state agencies, the legislature also included a budget note in the Department of Administrative Services' (DAS) budget directing DAS to work with the Department in developing a policy to manage access to DOJ by state agencies to ensure the appropriate use of legal service.

The Trial Division represents the state and its agencies, departments, boards, commissions, officers, employees, and agents in all state and federal trial courts. Attorneys in this Division are responsible for investigation, motions and pleadings, negotiation, witness preparation, depositions, and court proceedings in cases related to tort claims, civil rights cases, condemnation acquisitions, and major contract claims. The Division is organized into three sections dealing with (1) commercial and environmental litigation, (2) corrections litigation, and (3) special litigation. The Commercial and Environmental Litigation Unit includes court cases involving contracts for state functions as diverse as highway construction, timber sales, or the purchse of computers and software. Environmental litigation deals with the listing of threatened and endangered species, water rights, pollution prevention, and toxic waste clean up. The Corrections Litigation Unit is the largest unit of this Division because it handles cases in which prisoners are suing the state; attorneys in this unit represent the state or its officials and representatives. The Special Litigation Unit handles large cases in which government institutions are challenged or its financial stability threatened. Also high profile ballot initiatives often result in litigation that challenges the language of the measure, its appropriateness for the ballot, the validity of signatures to support it, and/or the constitutionality of the measure if approved.

Most of the revenue to support this division comes from billings to state agency clients. However, appeal cases heard in trial courts that are filed by or on behalf of persons incarcerated are handled in this Division and charged against the General Fund appropriation for Criminal Appeals.

Workload in the Corrections Litigation Unit is expected to increase as more prisoners are filing legal actions dealing with issues such as conditions of confinement, as well as efforts to overturn prior convictions and avoid lengthy mandatory sentences for repeat offenses. The total number of new post-conviction cases increased from 780 in 1996, to 806 in 1997.

The budget recommendation was 15.4 percent above the 1997-99 estimate. In addition to adjustments for inflation and other standard increases, the budget included two packages totaling $1.3 million and 10 positions (9.17 FTE). The larger of the two packages provided $697,400 and five positions (5.0 FTE) for increased post-conviction caseload. The smaller package includes five positions (4.00 FTE) and $364,000 for support staff. These additional positions were intended to relieve attorneys from doing tasks that could be done at a lower cost by support staff.

The legislature approved the Governor's recommended budget for the Trial Division.

The Support Enforcement Division's mission is to ". . . enhance the well being of children and promote positive parental involvement by providing child support program services to families." It establishes paternity, enforces and modifies child support obligations, and receives and distributes support payments from absent parents. The Division provides these services automatically for families that are receiving, or have received, public assistance from the Adult and Family Services Division (AFS), or if the child is in the care of the State Office for Services to Children and Families or the Oregon Youth Authority. The Division also provides these services to other families if they request the service. In addition, Gilliam, Linn, Lake, Sherman, and Wheeler County District Attorneys have contracted with DOJ for child support enforcement.

The Division has eight field offices as well as four operational units. These four units are Interstate, which deals with child support matters across state lines; Locate Unit, which focuses on locating absent parents; Enforcement, which collects support orders; and the Child Support Accounting Unit, which receives, records, and disburses child support payments. The Child Support Accounting Unit was transferred from the Department of Human Resources to this Division effective October 1, 1998, in accordance with SB 1101.

The Child Support Program is a joint federal, state, and local effort to collect child support payments. The program is administered by AFS, which receives federal funds that pay 66% and state General Fund and local funds that pay the remaining 34 percent. AFS contracts with the Department to provide child support program services and, therefore, these resources are budgeted as Other Funds.

The 1997 Legislative Assembly passed HB 2324, which implemented provisions of the federal Welfare Reform legislation, and the Department received additional, limited duration positions in the 1997-99 biennium to implement the new requirements in the federal legislation. Although the child support caseload has leveled off and is showing a slight decrease, the Department's collections have not decreased, primarily due to the new requirements under welfare reform that enhance collection of support payments. The amount available to reimburse the state and federal governments to offset assistance payments is relatively constant even though public assistance caseloads have been decreasing over the last two biennia.

The Governor's recommended budget for the Support Enforcement Division continued services established by the 1997-99 legislatively approved budget increased for inflation and other costs. It also included a package to continue the 19 limited duration positions (18.25 FTE) established in the 1997-99 biennium to enable the Division to ensure compliance with federal welfare reform requirements. This package added $2.0 million to fund these positions which are expected to be phased out by the end of the biennium.

The legislature approved the Governor's recommended budget for the Support Enforcement Division. It also passed HB 2229, which authorizes the Division, when requested by another state, to search state data bases and seize assets of non-custodial parents who are delinquent in their support payments. These are parents believed to have assets in Oregon but who are living in another state. Passage of HB 2229 increased the Division's Other Funds expenditure limitation by $373,582. However, the Adult and Family Services and Support Enforcement Divisions were directed to work together to identify resources to cover the increased workload.

Criminal Appeals is a budgetary unit to track the cost to the Department of defending the state in cases in which sentenced offenders challenge their convictions or sentences. Personnel and resources to do the work are shown in the Trial and Appellate Divisions.

Criminal and capital appeals are primarily financed by the General Fund appropriation. Due to the limited availability of General Fund support, however, the Department has used Other Fund revenue generated from billings to client agencies to cover the cost of criminal appeals and post-conviction cases. In the 1997-99 biennium, the Legislative Assembly approved a $600,000 Other Fund limitation to cover part of the General Fund shortage, which was approximately $1.6 million. The estimated General Fund shortage for 1999-01 is $2.6 million, which will again be financed with Other Funds generated from client agency billings.

Caseloads are expected to increase due to the projected increase in prison populations; the increased length of sentences under Ballot Measure 11 and HB 3488 (chronic property offender legislation which was effective July 1, 1997); increased challenges to prison disciplinary proceedings; and increased challenges to decisions made by the Board of Parole and Post Prison Supervision.

The Governor's budget for Criminal Appeals provided resources at the current service level.

The legislature approved the Governor's recommended budget for Criminal Appeals in total; however, it approved a special appropriation to the Emergency Fund of $1.5 million to ensure efficiency. If the criminal appeals caseload increases according to the projections, the Department can request part or all of this amount from the Emergency Board. If not requested by November 2000, the $1.5 million can be used for any Emergency Fund general purpose.

LFO Analyst: Jordan

The Military Department is responsible for administration of the Oregon Army National Guard, the Oregon Air National Guard, and the Oregon State Defense Force. The National Guard is described as a Federal/State partnership, which serves on a day to day basis under the command of the Governor, but is available to the federal government upon orders from the President. The members are trained to assist should there be man-made or natural disasters, or a need to back up law enforcement agencies.

The Department's operating Other Fund revenue sources include; facility rental fees, federal reimbursements, and miscellaneous sales revenue. Rental revenues earned from federally supported facilities are required by the federal government to be used in support of the facility that earned it. Miscellaneous sales revenues are derived from vending machine profits, coin operated telephones, and recycling programs.

The federal government provides approximately 97 percent ($382 million) of the funding for the Oregon National Guard. However, only a limited portion of these funds ($35.9 million or 9%) are included within the Department's budget. Guard member salaries and wages are paid directly by the federal government and are not included in the Military Department budget. Federal funds support 100% of troop training, Department of Defense programs, base security, base fire fighters, and youth programs; 75% of the logistical support for the training sites; and between 75 and 85 percent of the utility, maintenance and supply expenditures of the Air National Guard.

In 1999-01, Federal Funds are expected to increase slightly (from $33.6 to $35.7 million) from 1997-99. The critical issues are the decline in facility maintenance and recruiting and retaining members. The Oregon National Guard has a significant commitment of National Guard assets that provide economic benefits to the state and communities and serve as an import resource in disaster relief and recovery. In addition to proposals in Congress to reduce the size of the Guard nationally, Oregon faces the loss of units to other states if training levels and facilities' readiness is not maintained. The Youth Challenge Program was 100 percent federally funded until federal fiscal year 1997. It now requires up to a 40 percent state match. If the program is to continue, the agency estimates it will need close to $2 million in state matching funds to support the program in the 1999-01 biennium.

The Administration Program consists of the office of the Adjutant General, Financial Administration, Personnel, Operations and Training, and Telecommunications and Recruiting. This program supports approximately 1,950 state and federal full-time employees, commands over 9,400 soldiers and airmen, and provides oversight for approximately $2 billion in facilities and equipment.

The Oregon National Guard is experiencing difficulty recruiting and retaining members. Recruiting efforts have fallen short by 400 personnel per year for the past four years. The declining strength level may have serious implications if it is not reversed resulting in the loss of units and associated full-time positions, federal equipment and funding. The loss of units and possible closure of armories critically reduces the ability of the Guard to provide emergency response to citizens during natural disasters or civil unrest.

The recommended budget was funded at the current service level adjusted for inflation with an additional $100,000 in Other Funds to increase services and supplies for increased Federal/State agreement activity, and an additional $101,876 Federal Funds for store-front recruiting offices and .50 FTE for a communications technician at Camp Withycombe.

The legislature approved an expenditure limitation of $7 million total budget and 29.25 full-time equivalent (FTE) positions. The budget is 23.5 percent higher than the Governor's recommended budget reflecting an increase of $1.2 million General Fund and 1.0 FTE for the Tuition Assistance program and $120,000 General Fund and 1.0 FTE for the Oregon Military Museum and Resource Center. In addition, the budget is adjusted for efficiency savings in the Department of Administrative Services and Employment Relations Board assessments and a realignment of Secretary of State Audits fees, for a net increase of $69,620.

The Facilities Management program provides support to 40 Army National Guard Armories statewide, seven training facilities, and numerous logistical facilities. The program is responsible for acquiring, disposing, designing, constructing, operating and maintaining all Army National Guard facilities in Oregon.

The Oregon National Guard currently has 40 armories and 13 training/logistical sites in 33 counties. The age of a majority of the facilities makes them inefficient and expensive to operate and maintain. The average age of all facilities is 35 years. A recent analysis indicated that 12 percent are in compliance with Army standards (an increase of 8% from 1997-99), 50 percent do not fully meet those standards (an increase of 5% from 1997-99), and 38 percent are dysfunctional or substandard and in overall poor condition (a decrease of 7% from 1997-99). The increase of facilities in compliance with Army standards and the decrease of dysfunctional or substandard facilities is directly attributable to 1997-99 Emergency Board action to fund several roof replacements. Without additional funding, the agency expects the current trend of facility degradation to continue at 5 percent per year. If the agency is unable to properly care for the armories, it could reduce armory rental revenue that is relied upon to operate and maintain the facilities. Currently, 13 armories are being operated without basic custodial and facility maintenance support. The Department projects a significant increase in repair costs if repairs are delayed to future biennia.

The recommended budget supported the current service level adjusted for inflation. Included in the Governor's budget was $151,037 for three positions to support the Training Facilities Program at Camp Rilea. The positions were to be funded from Other Funds and Federal Funds revenues generated by the usage of Camp Rilea training and billeting assets.

The legislature approved the Governor's recommended budget at $19.1 million and 99 FTE.

The Air National Guard program operates the Portland Air Base at the Portland International Airport, Kingsley Field in Klamath Falls, and the Camp Rilea Air Station in Warrenton. These three locations are where the Air National Guard trains and equips members to provide defense and security for the United States and to provide public assistance during disasters. State funding supports the civil engineering maintenance and operation program, and some services and supplies items for the Air Guard program. Personnel in administration, base fire fighting, and security and billeting programs are entirely federally funded.

The Governors budget established two positions, a Natural Resource Specialist 2 to support Portland Air Base federal and state environmental compliance requirements, and a Construction Project Manager to provide management and oversight of Kingsley Fields large construction program.

The legislature adopted the Governor's recommended budget of $15.9 million and 122.61 FTE.

The Community Support program coordinates support for local programs and supports the Governor's initiatives on education, environment, public safety, and productivity. The program contains the agency's public affairs office, the Science and Technology Academy Reinforcing Basic Aviation and Space Exploration (STARBASE), Youth Challenge, Counterdrug, and Innovative Readiness Training Programs.

The recommended budget was funded at the current service level adjusted for inflation with the exception of $3.6 million in Federal and Other Funds for the Youth Challenge Program. No General Fund was recommended for the Youth Challenge Program because the program did not directly contribute to the mission of the agency.

The legislature approved a budget of $7.1 million and 51.46 FTE. This is a 19.3 percent increase compared to the Governor's recommended budget. Included in the budget is an increase of $660,000 General Fund and $448,000 Other Funds and 13.6 FTE to fully fund the Youth Challenge Program.

The Department of Defense Sponsored Program installs and maintains an intrusion detection system as well as repair and redistribution of communications and electronic equipment returned from Europe.

The recommended budget was increased $159,211 from the current service level to allow the Equipment Refurbishment Program to utilize the state procurement system for local acquisition of services and supplies. The $4.8 million dollar budget was 23 percent higher than the 1997-99 estimated expenditures.

The legislature adopted the Governor's recommended budget of $4.8 million and 58 full-time equivalent positions.

This program provides for the construction of new and replacement facilities to carry out the agency's mission.

Other Fund revenue in the Construction Account is from the sale of real property and earned interest. The revenues generated from the sales of properties are used as state matching funds. Depending on the type of facility constructed, the federal government pays between 67 and 100 percent of the approved construction cost. Site improvements and multi-purpose accommodations outside the federal guidelines are 100 percent state obligations. In 1995-97, Lottery Funds were provided to support the state share of architectural and engineering costs associated with the design of major construction projects.

The Construction Account, mostly acquired from the sale of Camp Withycombe property for highway right-of-way, is nearly depleted and cannot provide the required match on currently approved federal projects. The agency currently has more than 30 projects identified in the National Guard Bureau Long-Range Construction Plan estimated at $176 million. Of that amount, the state would be required to pay $19.9 million (11.4%). While the agency plans to identify buildings, facilities and real property that are excess to generate revenue to offset the state match requirement, the Major Construction Other Fund Account presently does not have sufficient funds to undertake additional projects. The agency plans to pursue all available federal funds for new facility design and construction and is looking to partner with other state agencies to share services and reduce operational expenses. In the future, federal funds for capital construction are expected to be highly competitive.

The Governor's budget provided no funding for capital construction.

The legislature approved a technical adjustment to add $1 expenditure limitations for each of the following Capital Construction "Placeholder" projects: Salem Armed Forces Reserve Center, Ontario Readiness Center, The Dalles Readiness Center, Site Improvements Phase 1 at Clackamas, Consolidated Site Storage Facility at Clackamas, Warrenton Site Improvements Phase I and Warrenton Consolidated Storage Facility. The expenditure limitations are also included in the statewide Capital Construction bill, SB 5527. The legislature also invited the Department to appear before the Emergency Board should federal funding become available for planning and design of the Baker City Readiness Center.

LFO Analyst: Niswender

The Board of Parole and Post-Prison Supervision is responsible for setting parole release dates for offenders who committed crimes prior to November 1, 1989; approving release plans and establishing conditions of community supervision for all offenders; setting release dates for "dangerous offenders"; responding to offender appeals; administering parole revocation hearings; and notifying victims of hearings and releases.

The Board is supported primarily by the General Fund. Other Funds revenue is from the sale of documents and hearing tapes to members of the public and to offenders. In the 1997-99 biennium, $9,075 in Other Funds was derived from a grant awarded from the Oregon Department of Justice and federal Victims of Crime Act funds for production and distribution of a video on victims' rights in the parole and post-prison supervision process.

The Board's role and workload have been drastically altered by implementation of sentencing guidelines in 1989; increases in the inmate and offender populations; increases in victim participation in post-sentencing matters; passage of SB 1145 in 1995; and passage of SB 156 in 1997. As a result of the most recent changes, local authorities have even more control and discretion in sanctioning offenders who violate conditions of community supervision.

Although the Board does not establish prison terms and release dates for most crimes committed after November 1, 1989, it is still responsible for all offenders sentenced under previous systems. That population is diminishing. The number of inmates under the Board's jurisdiction to determine initial release dates has declined from 5,300 in 1989 to about 1,400 currently. It is expected to decrease by another 300 during the next three years. This represents a 21 percent reduction in this population group. This workload reduction was expected and allowed the board members to be reduced from five to three; institutional hearings to be reduced from five days per week to two; and the number of support staff to be reduced from 19 to 14. On the other hand, the Board's responsibility to approve release plans for all offenders released to parole and/or post-prison supervision and for imposing conditions of supervision applies to a growing population of offenders. Currently, on average, 350 offenders are released from prison each month. A gradual increase in the number of inmates released is expected around 2001.

The average monthly number of offenders on parole or post-prison supervision has increased from 2,000 in 1988 to approximately 10,032 currently. Of the 10,032, about 8,450 (84%) are under the Board's jurisdiction and 1,700 are under the jurisdiction of local supervisory authorities. For 1999-01, the average monthly number of offenders on parole and post-prison supervision is expected to increase from 10,032 to 10,886 (an 8% increase).

The Board continues to be responsible for parole and post-prison supervision violation hearings and the monthly average has declined since 1995-97 from 515 to 305 currently. The monthly average of offenders being revoked from parole or post-prison supervision has also decreased since 1995-97 from 140 to 68. These reductions are due to full implementation of SB 1145, passage of SB 156, and adoption of administrative rules that allow greater use of sanctions. Under the new rules, parole officers may sanction offenders for up to 30 days; hearing officers for up to 60 days; and the Board must impose sanctions in excess of 60 days. Prior to November 1997, parole officers only had authority to sanction up to 15 days and hearing officers up to 30 days. For 1999-01, the Board estimates a similar number of parole violation hearings as it is conducting in 1997-99.

The Board also handles the public and victim inquiries concerning both in-custody and out-of-custody offenders. The number of victims who have registered with the Board for notification has increased from 780 in 1989 to about 7,000 as of September 1998. During 1997-99, the number of registered victims increased by 500, or eight percent. During 1999-01, the Board expects the number of registered victims will continue to increase at a similar rate.

Proposed legislation to allow the Board greater control over highly dangerous offenders is expected to slightly increase the number of Board hearings and psychological evaluations for these offenders.

The Governor's recommended budget was an increase of $312,689 (11%) from 1997-99 estimated expenditures. The budget continued most activities at current levels. The increase was primarily due to salary and merit increases, Secretary of State Audits Division assessments, and plans to upgrade the Board's management information system. Specifically, the budget:

• assumed that the Board will be able to absorb $15,340 within its approved budget and cover the costs to reclassify an office support position from salary range 15 to 17 and provide work out-of-class pay for a Board member serving as a vice-chair;
• reduced $48,443 General Fund based on the assumption that parole violation hearings conducted by counties will decrease by 10 percent in 1997-99 and remain reduced by that amount in 1999-01; and
• added $65,000 General Fund so the Board can complete about one-half of the work necessary to upgrade its information management system. The upgrade is necessary in order for the Board's system to remain compatible with the Department of Corrections Information System.

The legislatively adopted budget is $2.9 million which is a three percent increase from 1997-99 estimated expenditures. The budget will allow the Board to continue to provide all current services and take initial steps to upgrade its management information system. The legislature reduced the Governor's recommended budget by $223,137 General Fund and directed the Board to conduct a business process review in an effort to gain even more efficiencies than have been gained thus far through the application of technology to existing practices. The $223,137 General Fund reduction was based on Board plans to reduce Attorney General costs by implementation of an assignment system for legal casework; plans to further develop legal expertise within the Board; analysis of judicial reform options that would reduce the Board's legal caseload; reductions in the rates that will be charged by the Department of Justice for attorneys; and revised audit and Department of Administrative Services assessments. An additional $60,000 was taken out of the Board's budget and appropriated to the Emergency Board based on the tentative nature of the need to use the funds for psychological evaluations of offenders. The $60,000 will be allocated to the Board if it is needed for psychological evaluations or other unforeseen operational expenses. Based on passage of HB 2328, a $5,580 increase was made to cover costs of additional psychological evaluations.

LFO Analyst: Niswender

Historic functions of the Oregon State Police (OSP) include patrol, criminal investigation, forensic lab services, and fish and wildlife law enforcement. Responsibilities expanded when the 1993 Legislature approved merger of the following into the Department: Boxing and Wrestling Commission, Emergency Management, Law Enforcement Data System (LEDS), State Fire Marshal, and accounting for the Arrest and Return of Fugitives. The 1995 Legislature expanded agency responsibilities further by adding two more functions, the Medical Examiner and Criminal Justice Services Division.

The legislature adopted a budget that was reduced from the Governor's budget by a total of $13 million. The total funds budget of $339.2 million is a two percent decrease below the 1997-99 estimated expenditures. The General Fund and Lottery Fund budget of $168.3 million is a 16 percent increase over the 1997-99 estimated expenditures. While the Governor's recommended General Fund budget was reduced by $1.0 million, $3.3 million in Ballot Measure 66 Lottery Funds were added. The $1.0 million in General Fund reduction resulted primarily from shifting Salmon and Clean Stream Initiative enforcement positions from General Fund to Lottery Funds. The Governor's recommended Other Funds budget was decreased $3.7 million and Federal Funds were decreased $11.8 million. The $3.7 million Other Funds expenditure limitation reduction was primarily due to reduced ability to rely on Oregon Fish and Wildlife license and tag revenue to fund 23 existing enforcement positions and disapproval of a proposal to add five new Other Funds support enforcement positions. The Federal Funds reduction resulted from elimination of the second year's federal grant spending authority, which was coupled with the requirement that the Criminal Justice Services Division return to the Emergency Board to report on all federal grants. In summary, the legislatively adopted budget:

• adds $4.9 million General Fund, $1.6 million Federal Funds, and 100 new patrol troopers (31.25 FTE);
• adds $3.3 million Ballot Measure 66 Lottery Funds and $1.5 million General Fund to replace proposed Other Funds support for existing fish and wildlife enforcement positions;
• adds $2.1 million General Fund for call takers, computer support technicians, and data entry positions (15.14 FTE);
• adds $1.8 million General Fund and 21 new forensic positions (18.38 FTE) to address increased workloads;
• adds $1.2 million General Fund to replace exhausted federal grant funds and continue 15 of 24 forensic evidence technician positions (16.12 FTE);
• reduces $3.3 million General Fund due to retirements, vacancies, elimination of projects, and other service/supply reductions;
• reserves $515,373 General Fund in the Emergency Fund for potential forensic equipment and staffing needs; and
• directs the Department through budget notes to take various actions, including maintenance of specific staffing levels, to schedule personnel in the most efficient/cost-effective manner, and to continue to implement cooperative policing action plans.

The Patrol Services Division provides uniformed police presence and law enforcement services throughout the state with primary responsibility for traffic safety and response to emergency calls on Oregon's highways. Services include enforcement of the Motor Vehicle Code, Motor Carrier Regulations, Public Utility Commission Laws, Criminal Code, Fish and Wildlife Laws, and assistance to local agencies and the public.

Other Fund revenues are received from the Department of Transportation for traffic safety patrols in highway construction zones ($1.7 million); commercial truck inspections ($1.6 million); enforcement of the maximum speed limit and alcohol-related laws ($950,000) with a 25 percent match required; snow-park enforcement ($312,535), and DMV vehicle identification (VIN) inspections ($92,561). It also receives Unitary Fine and Assessment revenue from the Department of Revenue for truck enforcement ($661,294); from Oregon State University for campus security ($1.5 million); for the Department of Administrative Services for Capital Mall Security ($1 million); from the Legislative Administration Committee for Legislative/Capital Security ($654,485); from the Parks and Recreation Department for the Cadet Program ($587,915); from the Corps of Engineers for parks enforcement ($262,541); from the U.S. Forest Service for dunes enforcement ($184,361); and from the State Fair for security services ($124,519).

Federal Funds (COPS Ahead and COPS Universal Programs) have partially funded community policing positions by paying $25,000/year for three years of an officer's salary. COPS Ahead grants expired on June 30, 1998 and COPS Universal grants will expire on June 30, 2000. In 1997-99, the Department received about $2.7 million. In September 1998, the Department was notified that it was eligible to receive up to $22.7 million federal funds from the COPS Universal program. Of that amount, up to $15.1 million may be used in 1999-01 to pay $25,000 per year for the first three years of an officer's salary for up to 302 new patrol officers. After the first three years, the biennial General Fund cost to continue 302 new officers would be in excess of $50 million. Overall, revenue forecasts for Other Funds and Federal Fund sources indicate that available funds may increase by up to $15 million, when compared to the amounts expected for the 1997-99 adopted budget. The Governor's recommended budget includes $1.4 million in COPS Universal Federal Funds.

Since 1979, Oregon has experienced increases in population (22%); licensed drivers (25%); registered vehicles (35%); and in vehicle miles driven (40%). However, since 1979, there has been an overall reduction of 37 percent in the patrol road strength of the Department (641 to 403). The reduction has been due, in part, to the need to shift officers to address increases in criminal activity (violent crime, juvenile crime, drug activity, gang activity, crimes against children, hate and bias crime, and narcotics) and increased competition for limited General Fund resources. As a result of sworn staff reductions, most of the state is without 24-hour coverage, patrol areas have been expanded, some duties have been eliminated, response time has decreased, and officer safety has been reduced. It should be noted that from 1985 to 1997, when patrol officers were being reduced, the number of annual traffic accidents decreased from 50,284 to 49,595. This decrease has been largely attributed to tougher drunk driving laws, vehicle/roadway improvements, and aggressive public information, which seem to have increased safety awareness and encouraged changes in driving behaviors. Fatal accidents also declined from 1990 to 1997 (from 579 to 524). Other contributing factors include the facts that the state's population growth primarily occurred in incorporated areas; the number of city police officers has increased by 28 percent since 1985; and the number of sheriff's deputies has increased by 37 percent since 1985. The Department has taken actions to enhance Patrol efforts including the purchase of technology/equipment; consolidation of offices; use of non-sworn personnel; use of new enforcement strategies; use of federal grant funds; and development of policing partnerships.

The Department's most recent efforts to assess the adequacy of Patrol strength involved a Community Based Resource Gap Analysis process. Based on this analysis, the Department reports that 358 additional patrol officers are needed statewide and 58 additional patrol officers are needed for the Portland freeway system. The Sheriff's Association supports the Department's efforts to increase its sworn strength, but there are several county sheriffs that have expressed a desire for the Governor and the legislature to allocate a portion of the state funds to counties. The primary argument for local funding is that the average cost of a State Police officer is more that that of a deputy.

Over the next two biennia, approximately 192 sworn officers (department-wide) will be eligible to retire (110 in 1999-01; and 82 in 2001-03). There should, however, be some temporary overall salary savings when senior officers are replaced with recruits. The patrol vehicle fleet is currently 53 vehicles short of meeting its needs due to budget reductions and significant increases in patrol car purchase costs. To address this shortage, the Department has assigned two officers to each car, with certain exceptions, and extended the miles on vehicles from 95,000 to 120,000.

The Governor's budget for Patrol Services was 7.9 percent higher than 1997-99 estimated expenditures. It enhanced Patrol Services by leveraging available federal grant dollars. Specifically, the budget:

• reduced $46,409 General Fund and $1.1 million Federal Funds eliminating sworn positions following termination of federal COPS grants for officer salaries;
• reduced $55,040 General Fund to implement the reclassification of a sworn position based on a desk audit; and
• added $1.2 million General Fund and $364,583 in COPS Universal Federal Funds to hire 25 new patrol sworn positions (7.29 FTE) for the last seven months of 1999-01. The Department currently plans to use these positions for targeted enforcement activities once they are trained.

The legislatively adopted budget is $9.3 million, or 12.9 percent, above the 1997-99 estimated expenditures. It enhances current patrol operations by adding 100 new patrol officers and allows most of the requested changes in the Governor's recommended budget. The legislature enhanced the Governor's budget by $3.5 million General Fund; $1.1 million Federal Funds; and 23.3 FTE. Specifically, the adopted budget:

• adds $3.8 million General Fund and $1.2 million Federal Funds for 25 patrol officers that are to be hired by July 2000 and 75 new patrol officers that are to be hired by January 2001; (This is an enhancement to the Governor's recommended budget, since it only added 25 patrol officers for seven months. These 100 new officers are expected to return over 20,000 service hours to local law enforcement on a biennial basis.)
• adds $30,343 General Fund and $18,218 Federal Funds based on PICS accounting adjustments discovered after the recommended budget was developed;
• reduces $222,866 in General Fund inflationary increases;
• reduces $69,134 General Fund and fund shifts 2 positions to Other Funds, since they are assigned to the Juvenile Cigarette Enforcement program;
• reduces $34,607 General Fund and $37,500 Federal Funds by eliminating PERS funding for new hires for the first six months of employment;
• reduces $90,375 Other Funds based on expenditure patterns;
• directs the Department to have 380 troopers and sergeants to be routinely assigned to patrol as of July 1999; 405 as of July 2000; and 480 as of January 2001 with newly authorized staff assigned based on the priorities established by the Community-Based Gap Analysis; and
• directs the Department to document steps taken to increase the time that sergeants spend in field supervision and activities.

The Investigative Services Division augments and supports local law enforcement through investigation of major crimes, the pursuit and apprehension of criminal offenders, and the gathering of evidence. Specialized units include arson/ explosives, drug investigations, intelligence, missing children clearinghouse, polygraph examinations, sex offender registration, sexually exploited children, homicide incident tracking system (HITS), computer crimes, and gang enforcement. Detectives are currently participating in 36 county child abuse multi-disciplinary teams; 29 interagency major crime teams; 24 individual drug investigative teams; 17 arson task forces; and 10 district attorney investigative support teams.

Marijuana eradication funds are received from the Bureau of Land Management ($159,492), U.S. Forest Service ($76,903), and the Department of Justice ($33,293). The Federal Drug Enforcement Administration funds drug task forces (190,908). Federal and state drug seizures fund positions and enforcement expenses ($1.3 million). The State Fire Marshal transfers funds for arson/bomb investigations ($1.85 million). The DHR-Health Division transfers funds for a child fatality review team position ($141,370). The Construction Contractor's Board provides funds for construction fraud investigations ($382,000), and miscellaneous charges are expected to generate about $599,000.

Marijuana eradication revenues transferred from the U.S. Department of Justice (for state and private lands) are expected to increase by 1.5 percent while federal funds for this program from the Bureau of Land Management and the U.S. Forest Service are expected to increase 5.1 and 11.07 percent, respectively. Federal drug related forfeitures are expected to increase by 12.9%, providing additional funds for overtime, confidential expenses, and acquisition of equipment. Other Funds from the Fire Marshal for arson activities are expected to increase by 2.0 percent. Narcotic interdiction seizures are expected to decrease by 3.5 percent due to reduced levels of staffing on patrol, better concealment methods used by drug traffickers, and smaller amounts of drugs currently being transported to reduce any significant losses on one interdiction stop. Health Division funds for child fatality review team activities are expected to increase by 21.9 percent. Overall, projected Other Funds and Federal Fund revenue is expected to decrease from $5.5 million to $5.0 million (a 9% decrease).

The number of documented gang members has increased from 665 in 1988 to 4,279 as of June 1998. Juveniles represent 570 or 13 percent of the total. Projected growth in prison populations is putting increased demands on detectives investigating felony crimes within institutions. The number of investigations for crimes against children have more than doubled over the last four years, increasing from 429 to 892. To keep up with this demand, the Department has had to utilize Patrol troopers. Changes in federal laws relating to sex offender registration are likely to significantly increase workload for the Department. If Oregon does not comply with new federal laws, Byrne grant dollars will decrease by 10 percent ($1.3 million). Currently, 3,408 sex offenders are registered with the Department. OSP projections are that there will be approximately 10,665 registered offenders by 2001. The demand for drug enforcement activities remains high since Oregon is ranked 10^th in the United States for methamphetamine lab seizures and ranked 2^nd in the number of indoor marijuana grow seizures. Additionally, drug related deaths have more than doubled in the last five years (from 100 in 1992, to 221 in 1997).

Crime increased 6.9 percent in 1997 when compared to 1996, and crimes increased in 21 of the 36 counties. Overall, crimes against persons decreased 0.8 percent; crimes against property increased 6.4 percent; and behavioral crimes increased 10.2 percent. In spite of the 6.9 percent overall reported crime increase (from 440,554 to 470,814) between 1996 and 1997, the number of arrests only increased 0.3 percent (from 169,567 to 170,043). This inability to proportionally increase arrests has the potential to create an environment where criminal activity (especially behavioral crimes) continues to grow. Based on the Department's Resource Gap Analysis process, 43 additional investigative sworn personnel are needed.

The Governor's recommended budget was 9.3 percent higher than 1997-99 estimated expenditures. It enhanced investigative services by adding $536,219 Other Funds and 6 new positions (6.0 FTE) to bring Oregon's sex offender registration system into compliance with the federal Wetterling Act. The new positions were to be funded with fee revenue from proposed legislation that would require an annual registration fee of at least $30 be charged to all sex offenders. Failure to comply with the Wetterling Act would result in a loss of 10 percent of the federal Byrne Grant funds, or $1.3 million annually. The recommended budget reduced General Fund by $247,293 and Other Funds by $6,656 due to elimination of a vacant detective position and anticipated personal services savings resulting from retirements.

The legislature approved a budget of $19.7 million General Fund, $25.1 million total funds, and 151.16 FTE. The General Fund support is nine percent above the 1997-99 estimated expenditure levels and the overall program funding is also increased by nine percent. The legislature generally approved the changes recommended by the Governor; however, the legislature made a few adjustments. It reduced a total of $117,911 General Fund and $48,309 Other Funds by reducing services and supplies inflation; considering expenditure patterns, factoring in Attorney General rate reductions; and reducing PERS funding for all new hires. The legislature shifted two General Fund positions from Patrol to Investigative Services using Other Funds available for the Juvenile Cigarette Enforcement program. The legislature also created an Interim Construction Fraud Unit consisting of the Assistant Attorney General, an Oregon State Police office, a clerical support position, and assistance from the Construction Contractor's Board staff and investigators. The interim unit is to report to the Emergency Board at least semi-annually and develop recommendations for the 2001 Legislature. The estimated costs for the interim unit are $382,000, which is $213,328 less than included in the Governor's recommended budget.

The Forensics Services Division is comprised of Forensic Laboratories, Identification Services, and an Implied Consent Unit. The Division provides scientific, technical, and investigative support to all criminal justice agencies through forensic analysis and compilation of criminal offender information. Seven forensic labs are located in Bend, Coos Bay, Medford, Ontario, Pendleton, Portland, and Springfield. A DNA Unit is also located in the Portland Lab. The Identification Services Section is located in Salem and is comprised of Latent Prints, Questioned Documents, Criminal History, Regulatory Compliance, Automated Fingerprint Identification System, and Firearms programs. The Implied Consent Unit is also located in Salem, with regional staff located in Pendleton and Central Point Laboratories.

The Medical Examiner's Office is located in Portland and provides technical assistance and supervision to 36 county offices, directs investigations, provides direct professional services (autopsies, court testimony, case review, and consultation), and certifies the cause and manner of all investigated deaths. The office maintains records and provides training lectures on death investigations to medical school physicians and students, law students, police officers, and emergency medical technicians. The office also provides proportional payments (up to 50% of the costs) for autopsies required to be done in counties with less than 200,000 population.

Other Funds revenue sources include the fees for: Open records checks of criminal histories ($2.5 million); fingerprints checks of educators ($1.3 million); Concealed Handgun Permits; Instant Check of handgun purchases ($625,987); medical examiner fees for autopsy reports ($16,636); and miscellaneous receipts. Other Funds are also received from the Unitary Assessment to fund forensic bench chemists ($2.9 million) and Traffic Safety Grants for Drug Recognition Expert positions. Federal Funds ($153,889) are expected from the Department of Justice through Byrne Grants (25% match) and local law enforcement grants (10% match). Other Funds and Federal Funds revenue is expected to increase by approximately $685,000 (a 9% increase from the revenue projected for the 1997-99 legislatively adopted budget).

Average monthly evidence submissions to this Division increased by nearly 20 percent (1,940 to 2,323) from 1996 to 1997. However, through increased productivity measures, use of overtime, and hiring of 13 additional staff, the average submission backlog dropped 16 percent (from 637 to 533). As of May 1998, the backlog had grown to 938 cases. Since six positions approved by the January 1998 Emergency Board were hired in April and May 1998, the backlog should be reduced significantly within six months.

The demand for forensic services is expected to grow as cities, counties, and the state add more police officers and as DNA-based evidence analysis systems are expanded and improved. Over 90 percent of the forensic analysis is performed for cities and counties. Total Oregon sworn personnel is projected to grow by 11 percent (from 5,673 to 6,275) between 1998 and the year 2000. This growth will create additional demand for forensic services. There also could be significant increases if efforts to more fully utilize forensic evidence to solve crimes succeed. In 1996, less than 10 percent of more than 98,000 person, burglary, and stolen vehicle crimes were processed for physical evidence and submitted to the labs for analysis. Efforts are being made to refocus police officers workload through forensic training and more effective use of firearms and fingerprint databases. This will increase forensic workload. Additionally, the Department plans to introduce legislative concepts to improve DNA and breath alcohol evidence collection and analysis techniques that may further increase service demands. Forensic services customers are interested in improved analysis turnaround times and would like to see better forensic evidence collection training for officers. The Portland crime lab is on a month-to-month lease and is looking for a new location.

In 1996, the Department received a COPS More grant to fund 24 evidence lab technicians. The grant funding expires on September 30, 1999. These non-sworn positions have performed duties that in the past have been performed by sworn officers, allowing the sworn officers to direct their services to the public.

The workload for the Medical Examiner's office continues to increase, due to the continuing growth in Oregon's population. In 1997, there were 29,000 deaths compared to 26,000 in 1992. Approximately 35 percent (10,200) of the 1997 deaths were investigated by the Medical Examiner's office. The office has seen significant increases in the number of drug related and accidental deaths. In 1997, there were 221 drug-related and 1,117 accidental deaths compared to 100 and 903, respectively, in 1992. Reduced levels of county funding, coupled with scope of practice changes and retirements of local forensic specialists, are likely to cause more work to be shifted to the state medical examiner program. This trend is expected to continue in 1999-01. The Medical Examiner's office does not consider its current facility to be adequate and is hopeful that it will be able to relocate its operations when the Department identifies new space for the Portland crime lab, patrol, and district offices.

Based on the Department's Resource Gap Analysis process, 58 additional forensic positions are needed.

The Governor's recommended budget reflected a 24 percent overall increase from 1997-99 estimated expenditures. The budget maintained Medical Examiner Services at the current service level and enhanced Forensic Service capability. A total of 26 new forensic positions were added and 24 forensic evidence technicians were continued with General Fund support. The Federal Funds support for the technicians ends September 30, 1999. Specifically, the budget:

• reduced $362,206 General Fund based on elimination of one information system project and anticipated savings from retirements;
• added $2.1 million General Fund and $146,887 Federal Funds to continue 24 civilian evidence technicians (24 FTE) that have been used to free sworn officers to perform other duties, offsetting federal grant funding which expires September 30, 1999;
• added $2.0 million General Fund and $566,793 Other Funds to fund 24 positions (19.93 FTE) for workload increases in the Lab and I.D. Sections, eight of which are funded by regulatory fees paid by customers for Criminal History Background Checks;
• added $516,462 General Fund for acquisition and maintenance of technical equipment and supplies; and
• added $93,008 General Fund support (along with $17,507 Other Funds and $6,901 Federal Funds) to cover reclassification costs; the costs of three legislative concepts dealing with forensic documents, DNA samples, and breath tests; and to add two new positions (1.66 FTE) that will maintain the integrated ballistic information system.

The legislature approved a budget of $22.9 million General Fund, $30.8 million total funds, and 196.29 FTE. The General Fund support is 24 percent above the 1997-99 estimated expenditure levels and the overall program funding is increased by 20 percent. The legislature generally approved the changes recommended by the Governor; however, the legislature made several adjustments. It reduced a total of $1.2 million General Fund and 9.43 FTE. Specifically, the legislatively adopted budget:

• reduces $892,474 General Fund and 7.88 FTE based on elimination of 9 of the 24 evidence technicians;
• reduces $515,373 General Fund and 1.55 FTE based on tentative workload and equipment needs and appropriates the funds to the Emergency Board for allocation to the Department, if necessary, on or after April 2000;
• reduces $135,557 General Fund from the inflationary funds provided for services and supplies;
• reduces $92,520 General Fund by eliminating base budget funds the Department was considering using toward rental of lab space in Monmouth; and
• reduces $64,733 General Fund and $17,411 Other Funds based on elimination of PERS funds for new positions, position reclassifications, and PICS accounting adjustments.

The primary mission of Fish and Wildlife enforcement is to assure compliance with laws, which protect and enhance the long term health and equitable utilization of Fish and Wildlife resources. The officers also routinely enforce traffic, criminal, boating, livestock, and environmental laws.

This Division receives its primary funding from the Department of Fish and Wildlife (ODFW) ($16.2 million) based on fish and game license fees. Historically, 28.4 percent of these revenues have been provided to the State Police. Receipt of all of the $16.2 million Other Funds is based on an ODFW proposal to obtain a General Fund backfill to support administrative costs and on legislative approval of license fee increases. The Marine Board provides funds ($473,292) for enforcement of boating laws and charters/guides enforcement. The Parks Department partially funds ($222,409) Deschutes River enforcement. The Department of Environmental Quality partially funds ($193,953) environmental investigations. Approximately $1.5 million in Other Fund revenue is expected to be available from a variety of service contracts. Federal funds that have been provided by the Bonneville Power Administration (BPA) for protection of endangered species in the Columbia River have been discontinued. The Corps of Engineers continues to provide funds ($348,011) for a variety of fish and wildlife issues.

This Division is faced with increased demand for enforcement and protection services at a time of reduced license and tag revenues. There were about 279,000 Oregonians with hunting and fishing licenses last year, down more than 100,000 from the 20-year peak in 1980. Since 1980, the portion of the population purchasing licenses has declined from 18.5 percent to 8.6 percent. The change is primarily due to population growth in urban areas, static or declining rural populations, aging of the baby boom generation, declines in game population, use of a lottery tag system in Eastern Oregon, and habitat loss.

In 1997-99, seven positions were held vacant because of reduced ODFW revenue and the pressing need for equipment, and 13 officers were shifted to the protection of salmon and health streams. Continued reductions in revenue from ODFW, the need to fund cost of living increases, and the loss of funding from the BPA will result in the loss of 26 positions and a net reduction in the current service level.

Ballot Measure 66 was approved by voters in November 1998 and is expected to dedicate approximately $44 million a year in lottery proceeds to finance the restoration and protection of native salmonid populations, watersheds, fish and wildlife habitats, and water quality in Oregon. The Measure requires that 65 percent ($30 million) of the funds be used for capital expenditures; however, a portion of the remaining funds may be directed to pay for enforcement of fish and wildlife and habitat protection laws. This Measure has the potential to eliminate the need to reduce staff by transferring Measure 66 funds from ODFW.

The Governor's recommended budget reflected a 26 percent overall increase from the 1997-99 estimated expenditures. The increase assumed $1.1 million Other Funds would be available from ODFW due to license/tag fee increases; $1.9 million Other Funds would be available to be transferred from ODFW, if the legislature approved a General Fund increase in ODFW's budget; and $2.45 million Lottery Funds would be transferred from ODFW because of the availability of Ballot Measure 66. Specifically, the budget:

• reduced $36,433 General Fund and $53,360 Other Funds due to anticipated retirement of sworn officers in 1999-01, which will reduce personal services expenditures;
• added $3.8 million Other Funds to restore 23 existing sworn enforcement positions (23.0 FTE) that would otherwise be held vacant due to ODFW and BPA revenue reductions; and
• added $1.1 million Other Funds to fund seven sworn enforcement positions (6.50 FTE). Five of the positions are to partially fill the void left in central and eastern Oregon when 14 positions were dedicated to clean streams and salmon enforcement in 1997-99. Private donations will be used to establish a Sandy River enforcement position and Marine Board funds will be used to establish a half-time position to enforce charter and guide regulations.

The legislature approved a budget of $8.7 million General/Lottery Fund, $23.5 million total funds, and 128.74 FTE. The General/Lottery Fund support is 67 percent above the 1997-99 estimated expenditure levels and the overall program funding is increased by 19 percent. The legislature generally approved the changes recommended by the Governor; however, the legislature separated the Fish and Wildlife General Fund appropriation from the rest of the Department's funds, established minimum field enforcement staffing levels, and reduced the budget by $1.3 million. Specifically, the legislative budget:

• reduces $2.6 million General Fund and back fills this entire amount with Ballot Measure 66 Lottery Funds to continue 13 salmon/clean streams positions and cover capital expenditures for the Division's vehicles and boats;
• reduces $2.5 million Other Funds limitation transfer from the Fish and Wildlife Department for 23 positions, since it depended upon a significant ODFW fee increase and ODFW General Fund backfill that was not acceptable to the legislature; ( In exchange, the legislature directly provided $1.5 million General Fund and $743,360 Ballot Measure 66 Lottery Funds for the 23 positions (16 FTE). This level of funding maintains 9 filled positions and phases-in the remaining 14 vacant positions.)
• reduces $890,748 Other Funds and six positions (5.50 FTE), since available Ballot Measure 66 revenue was not adequate to cover a five position enforcement enhancement and fee payers withdrew their support for an additional guides/outfitter enforcement position;
• reduces $38,407 Other Funds based on expenditure patterns and elimination of PERS funds for the first six months on all newly authorized positions;
• adds $543,969 Other Funds by increasing the revenue transfer from the Marine Board to more accurately reflect the Department's actual expenditures on boating enforcement activities;
• establishes minimum staffing levels by directing the Division to have between 101 and 115 sergeants, troopers, and senior troopers assigned to field enforcement activities; and
• directs the Department to develop a plan for allocation of funded fish and wildlife enforcement positions and present it to the Emergency Board.

The Human Resource Services Division provides direction and logistical support for command staff at Headquarters, Districts, and Stations. It includes the Office of the Superintendent; the Budget Director, labor relations, research and development, and other agency-wide support and standard setting efforts. The Training Division recruits, selects, and retains the sworn workforce. Additionally, it provides training and education to all Department employees, coordinates the Citizen Volunteer Program and provides oversight of the OSP Reserves Program. The Criminal Justice Services Division provides advice to the Governor on criminal justice policies, administers federal grant programs and coordinates the development and improvement of the Criminal Justice Information System (CJIS). The legislatively adopted budget for

the programs under this budget unit is as follows:

The General Fund supports the majority of the Human Resource Services costs. The DHR-Adult and Family Services Division provides Other Funds to partially cover extradition expenses related to criminal non-support. The Department of Public Safety Standards and Training (DPSST) provides Training Division Other Funds, based on assessment of fines made on all arrests and bails paid in lieu of fines, to partially pay training expenses ($1.6 million). Federal Funds for the Criminal Justice Services Division programs are derived from Department of Justice (DOJ) and Byrne Grants ($32.8 million). Certain DOJ grants have cash match requirements.

DPSST revenue is expected to increase by 2.8 percent in 1999-01 and provide a total of $1.6 million for Training Division services. The Department anticipates increases in recruitment and training as the result of an estimated 47 percent retirement-based attrition rate over the next six years. Additional workload will be created if new patrol and investigative positions are added based on the Department's Resource Gap Analysis.

The Criminal Justice Services Division will be administering and coordinating 12 programs involving over $38 million. In 1995-97, when it was first established, it only managed three grants involving about $12 million and in 1997-99, it managed eight programs involving $34 million. The Criminal Justice Services Division's role has also grown from a pass-through agency to a grant management agency involved in providing central information to various components of the criminal justice community, as well as coordinating activities related to applications, reporting, monitoring, and program evaluation. In light of this growth, the Department is interested in increasing the number of staff dedicated to monitoring projects and coordinating grants. Approximately 81 percent of the grant funds are passed through to county, city and non-profit organizations. The federal funds expected to be available for use in 1999-01 is $32.8 million, which is a 12 percent increase from 1997-99.

The Arrest and Return program has experienced a significant increase in the number of arrested people charged with felony crimes that are being extradited to and from Oregon for trial. This has created additional costs and the need to prioritize the types of offenders extradited. Additionally, there have been increases in workload for transports, preparation of rendition documentation, legal research and investigation.

The Governor's recommended budget essentially maintained the same level of services as approved for 1997-99. The 11 percent overall budget increase was primarily due to an increase in federal funding for pass-through grants. Specifically, the budget:

• reduced $696,163 General Fund and one position (1.0 FTE) based on elimination of one bureau and anticipated savings from retirements;
• added $449,413 General Fund and $144,093 Other Funds to cover costs for three new training support/recruitment positions (3.0 FTE) to help with the workload resulting from the anticipated retirements of 47 percent of the Department's sworn staff between 1996 and 2005;
• added $582,456 General Fund and seven positions (7.0 FTE) to continue positions created during 1997-99 based on new assignments or additional duties and responsibilities, including a facilities manager, payroll support, counselor, safety coordinator, and clerical assistance; and
• added $3.3 million Federal Funds and two positions (2.0 FTE) to manage a federal juvenile justice grant and provide positions and funding for the grant and information standards sections. This limitation also covers costs of consulting services and position reclassifications.

The legislature approved a budget of $22.9 million General Fund, $45.6 million total funds, and 155.75 FTE. The General Fund support is approximately 6 percent above the 1997-99 estimated expenditure levels, however, the overall program funding is decreased by 14 percent. The legislature generally approved the changes recommended by the Governor; however, the legislature reduced the budget by $13.6 million. Specifically, the legislatively adopted budget:

• reduces $355,254 General Fund by reduction of the inflationary allowance for services and supplies;
• reduces $201,027 General Fund and one position (2.25 FTE) based on elimination of a Bureau support position and delayed hiring of several new positions;
• reduces $126,232 General Fund based on PICS accounting adjustments and an Attorney General hourly rate reduction;
• reduces $114,192 General Fund and eliminates a position that has been vacant for an extended period and is no longer necessary;
• reduces $13.5 million Federal Funds for the Criminal Justice Services Division, requiring the Division to return to the Emergency Board to report on all federal grants and request all justified expenditure authority for the second year of the biennium;
• adds $163,500 General Fund to cover of the costs of physical examinations and background checks for the 100 new patrol troopers; and
• adds $600,000 Federal Funds so that the Department can work collaboratively with the Department of Justice to set up and operate a High Intensity Drug Trafficking Area Criminal Intelligence Unit.

Information Resource Services includes the Regional Dispatch Centers, data processing, and telecommunications staff responsible for the design, acquisition, installation, maintenance, and repair of the statewide telecommunications and information management system. It maintains the Law Enforcement Data System (LEDS), which connects law enforcement, criminal justice agencies, and other authorized users to central files. These files include data relating to wanted and missing persons; sex offenders; drug manufacturers; stolen vehicles; concealed handgun licenses; criminal records; restraining orders; and offenders under parole or probation supervision. LEDS also operates the Oregon Uniform Crime Reporting Program, which collects, processes, and distributes Oregon crime and arrest statistics and provides Oregon data to the FBI for the national crime statistics program. The legislatively adopted program level funding and FTE for each of the programs under this budget unit is as follows:

Information Resources is mainly supported by the General Fund but it does use Other Funds revenue from the Unitary Assessment and the sale of surplus equipment ($2.3 million). The General Fund supports LEDS, however it does receive Other Funds from charges to user agencies to pay for terminals, telephone line access, and the training coordinator program ($5.5 million). Edward Byrne Memorial Grant funds continue to be budgeted into 1999-01 for the LEDS system improvements ($42,159). Unitary assessment revenue dedicated to purchase technical and information system equipment is expected to increase by 5.9 percent for a total of $2.3 million. LEDS terminal leasing revenues are projected to be about the same ($2.0 million) for 1999-01. No changes are expected in the amount of the charges or in the way the charges are assessed or collected. Byrne grant funds used to improve criminal justice records are expected to increase from $2.3 million to $3.5 million (a 52% increase).

Even though the 1997 Legislature approved 26 new regional dispatch and computer support positions, overtime usage at the Salem location has remained unacceptably high. Based on a recently completed telecommunicator workload study, the Department is interested in adding several more positions in the Medford and Salem Regional Dispatch Centers to provide desired coverage and reduce the hours of overtime worked.

The first phase of a LEDS reengineering project is in progress and should be completed by May 1999. The Department is positioned to move ahead on the next two phases. These steps are necessary for the system to remain compatible with new communication protocols and data types. LEDS is currently experiencing increased demand for criminal justice related information in the public and private sector, along with the increased number of system users. This has created increased system security concerns, since access to certain data is not allowed from unauthorized entities. Major changes in federal crime reporting systems are taking more staff time to ensure changes are planned and executed in ways that avoid service interruptions.

In 1997-99 there were five technical support information services positions that were funded through COPS MORE federal grant dollars. These grants will expire in September 1999.

The Governor's recommended budget reflected a 22 percent increase from 1997-99 estimated expenditures. It included funds and positions to address projects and workload relating to computer support, redesign of the LEDS message switch, and regional dispatch services. Specifically, the budget:

• reduced $188,898 General Fund based on elimination of three information systems projects;
• added $586,343 General Fund and eight dispatcher/call-taker positions (7.0 FTE) to address workload needs at regional dispatch centers;
• added $441,561 General Fund and five positions (5.0 FTE) to fund shift technical support positions funded through COPS MORE federal grant dollars, which expire September 1999;
• added $472,409 General Fund and $437,020 Other Funds for four computer support positions (3.76 FTE) and to acquire computer hardware/software; (Other Funds revenue from the Criminal Fines and Assessment Account (CFAA) will cover hardware expenses.)
• added $150,927 General Fund and three positions (2.46 FTE) to provide data entry and information systems support; and
• added $3.5 million Other Funds and two positions (1.5 FTE) for LEDS redesign, training and operations.

The legislature approved a budget of $23.1 million General Fund, $31.2 million total funds, and 173.64 FTE. The General Fund support is 18 percent above the 1997-99 estimated expenditure levels and the overall program funding is increased by 20 percent. The legislature generally approved the changes recommended by the Governor; however, the legislature provided directions and reduced the recommended budget by $0.5 million. Specifically, the legislatively adopted budget:

• reduces $266,424 General Fund and one position (3.08 FTE based on elimination of a data entry position and delaying the hiring of 7 positions by three to six months;
• reduces $176,033 General Fund by eliminating a portion of the services and supplies inflationary allowance;
• reduces $22,917 General Fund and $47,195 Other Funds based on elimination of PERS new hire funding, PICS accounting adjustments, an attorney general rate reduction, and updated criminal fines and assessment revenue information; and
• directs the Department to convene a work group of Criminal Justice Information System agencies and develop a Criminal Justice Enterprises Technology plan; to explore the appropriateness of assessing a transaction charge to users of LEDS data to assist with the system's operational and maintenance costs; and participate fully in the Public Safety Data Warehouse Project and establish measurable performance goals.

The Gaming Division ensures fairness, honesty, integrity and security of the Oregon State Lottery and tribal gaming centers operating in Oregon. The state lottery was established in 1985 and tribal casinos were first allowed in 1993. Since 1993, the Boxing and Wrestling Commission has operated from within the Department and it ensures the integrity and honesty of boxing and wrestling events.

The Lottery Commission fully funds Lottery security services, and the Native American Tribes fully fund Indian Gaming Enforcement activities ($8 million). License fees and pay-per-view charges fund the Boxing and Wrestling Commission ($300,086). Any excess boxing and wrestling revenue is transferred to the Children's Trust Fund.

The Department is still in negotiations with the Lottery Commission on the amount of revenues available for security services; however, it expects an increase of approximately 12% to be available to cover the costs of services provided. The demand for Department investigative services continues to grow due to new contracts and new lottery games. The Lottery Commission began with one game and now offers eight games and 32 different versions of instant ticket games. In 1999-01, Lottery Commission activities will place greater demand on the Department's Gaming Division resources.

In 1995, there were six casinos operating 2,600 slot machines and numerous table games. Currently, nine of ten Native American Tribes in Oregon have gaming compacts and seven are operating gaming centers with over 3,500 slot machines. At least five of the seven currently existing casinos are planning expansions in the near future. A majority of the compacts are being re-negotiated and increases to the number of gaming devices and forms of gambling allowed at each casino are likely. The Resource Gap Analysis showed that five additional gaming enforcement officers would be needed. Based on some changes in the monitoring responsibilities that should improve the efficiency of both State and Tribal operations, the Department hopes to fulfill its 1999-01 regulatory functions without additional staff. Based on the plans, all tribes will conduct their own employee background investigations (monitored by OSP); the current bookkeeping, billing, and collection process will be simplified; and there will be improved cooperation and reporting between the Department and Tribal Gaming Commissions.

The Governor's recommended budget reflected an eight percent increase from 1997-99 estimated expenditures. This was primarily due to salary increases, government service charges, and inflationary increases. The base budget was reduced by $399,394 Other Funds based on two position reclassifications and expenditure limitation reductions for travel, vehicles, and professional services. Nearly all of this reduction was in the Tribal Gaming Unit.

The legislature approved a budget of $7.8 million Other Funds and 44.75 FTE. The Other Funds support is nearly three percent above the 1997-99 estimated expenditure levels. The legislature generally approved the changes recommended by the Governor; however, it reduced the budget by $391,448 Other Funds and 3 positions (3 FTE) based on a new agreement, which requires the tribes to conduct employee background checks and use a simplified billing process. The legislature also requested that the Governor's Office make a good faith effort to raise the issues of increased officer presence and training costs being incurred as a direct result of gaming centers.

The purpose of the Oregon Emergency Management Division (OEM) is to coordinate and maintain a statewide emergency services system. This system incorporates the separate local and state emergency service elements into a comprehensive capability to prepare for, respond to, and recover from disaster conditions. Activities include preparedness planning, and development and implementation of mitigation strategies.

Administration of the 9-1-1 Emergency Telephone Systems Program is funded by the 9-1-1 Telephone Tax ($49.4 million). The tax is a flat monthly rate of $.75 for all landline circuits and wireless devices capable of accessing 9-1-1 services. The tax will sunset December 31, 2001. Other Funds are also provided from the Fire Marshal's Office, Fire Insurance Premium Tax for the administration and coordination of the state's hazardous materials programs.

One hundred percent Federal Funds (FEMA) are available for specific technical and specialized services (emergency management training and for technical assistance in all hazard planning) and are also available from the Department of Defense, via FEMA, for the Chemical Stockpile Preparedness Program ($33.2 million). Federal matching funds are also available on a 50/50 match basis under the State and Local Assistance Program (SLA) for day-to-day administrative costs that enable jurisdictions to prepare for emergencies; the Disaster Preparedness Improvement Grant Program ($50,000 annual Federal Funds cap) and the National Earthquake Hazard Reduction Program ($75,000 annual Federal Funds cap). Up to $53,700 per federal fiscal year is also available on a 25 percent state match basis from the Mitigation Assistance Program.

The 9-1-1 program tax base has been expanding due to the steady growth in both landline circuits and wireless devices. This has increased the amount of funding available for enhanced 9-1-1 projects. As of July 1998, 78% of Oregon's population was served by Enhanced 9-1-1. By January 2000, 100 percent of the state is required to be served by that system.

In Federal Fiscal Year 1999, FEMA funds available to all states for specialized and technical services will be reduced from 100 percent Federal Funds to require a 50 percent state match. FEMA is also in the process of revising the criteria for Presidential Disaster Declarations. This may have a major impact on Oregon since it does not have a disaster fund to assist with a proposed "floor cost" concept. FEMA wants to use a floor cost as a deductible to encourage states to develop their own programs for public assistance.

The Department has also focused personnel and resources in Eastern Oregon in support of the Chemical Stockpile Emergency Preparedness Program. Congress has allocated approximately $25 million for an emergency system so that chemical munitions stored at the Umatilla Army Depot can be incinerated. OEM is in the process of completing emergency preparedness plans with both Morrow and Umatilla counties. During 1997-99, officials in the Eastern Oregon communities expressed concerns over how the federal funds have been used; the delays experienced in completing emergency preparedness activities; and the adequacy of funds to purchase necessary protective equipment. Both OEM and FEMA have taken steps to address these issues. Emergency response work is to be completed within two years so the Army can get a permit to do a one year test burn.

New federal initiatives are being considered that may impact emergency management programs. These initiatives include establishing disaster resistant communities; establishing automated emergency management processes; implementation of changes in cost-sharing and grants management processes; and enhancement of counter-terrorism and consequence management efforts.

The Governor's recommended budget reflected a 25 percent reduction primarily due to a $28 million reduction of Non-limited Federal FEMA Funds for disasters that occurred in 1995-97. The recommended budget included funds to continue recovery assistance programs and state/local assistance programs. The budget added $248,324 General Fund and $707,203 Other and Federal Funds to continue eight positions (8.0 FTE). Four limited duration positions will continue recovery assistance from presidential disasters that occurred in 1995-97; two positions will maintain the state and local assistance program; one position for financial management of the Hazards U.S. Program; and one position to support the regional CSEPP office.

The legislature approved a budget of $1 million General Fund, $1.8 million Other Funds, $7.3 million Federal Funds, and 40 FTE. There is an additional $70.1 million Other and Federal Funds that pass through OEM without legislative expenditure limitation. The General Fund support is 26 percent above the 1997-99 estimated expenditure levels and the overall program funding is decreased by 25 percent. The legislature generally approved the changes recommended by the Governor; however, the legislature reduced $4,480 General Fund, $1,718 Other Funds, and $4,370 Federal Funds based on adjustments to inflationary increases, an attorney general rate reduction, and elimination of PERS new hire funding. The legislature also expressed its expectation that the Department, the Department of Administrative Services, and the Governor's Office participate in a 9-1-1 Advisory Committee work group in an effort to develop a more coordinated 9-1-1 emergency response system and assess whether there are more cost-effective and efficient ways to provide medical, fire, hot line, and officer dispatch services.

The Office of the State Fire Marshal is charged with protecting life and property from fire and hazardous materials. It has the following five major program areas: Fire and Life Safety Services, Education, Non-Retail Flammable Fuel Dispensing, Community Right to Know and the Regional Haz-Mat Response Teams. There are 16 Deputy Fire Marshal's that serve Oregon communities that cannot provide their own full-service fire prevention programs. There are also 14 regional Hazardous Materials Emergency Response Teams which provide containment and mitigation operations.

The Other Funds revenue supporting the Fire Marshal programs include; non-retail fuel dispensing fees (funds card lock enforcement), hazardous substance user fee, petroleum load fee, and fire insurance premium tax. The remaining revenue is generated from licenses and permits (relating to liquefied petroleum gas, explosives, and fireworks) and from an interagency agreement with DHR for fire and life safety inspections of Medicare/Medicaid funded facilities. The non-retail fuel dispensing fees are expected to generate $570,000; the hazardous substance possession fees - $2.6 million; petroleum load fees - $2.6 million; fire insurance premium tax - $9.9 million; the DHR safety inspections - $426,000; and the license/permit fees - $300,000. The 1995 Legislature provided a General Fund appropriation of $120,000 for continued coordination and training activities for hazardous materials teams in Ontario, LaGrande, and Hermiston.

Population growth and commercial development are increasing fire service and hazardous substance protection needs. Fire and life safety deputies have been inspecting only the most critical facilities (schools, day cares, special residential, corrections, flammable tanks, community target facilities) and they are not always able to do them timely. Deputies are rarely able to inspect other facilities (restaurants, colleges, industrial, motels, camps, and conference centers). This is placing lives and building investments at risk of unnecessary fire loss. The number of fire deaths per 100,000 population has dropped about 21 percent from 1993 to 1997 (from 20.4 to 16.8). This drop is primarily due to engineering, enforcement, and education. However, the number of fire investigations increased 33 percent and the hours invested increased 23 percent. Fire prevention public education programs and personnel are being reduced at local levels, which places greater demand for services and resources from the state's community education resources. The number of Haz-Mat incidents has dropped from a high of 103 as of July 1996 to 35 in October 1997. This drop is due primarily to more careful handling of substances and increased ability of local emergency responders to resolve incidents.

Using Employment Division records, the Department has identified approximately 15,000 additional business facilities likely to store, use, or manufacture hazardous substances. It continues to identify more of those facilities. The enhanced data has prompted emergency responders to seek more information from the Department so they will be more prepared when incidents do occur. Approximately 60 percent of the Emergency Response Teams activities can continue to be funded from the re-formulated Petroleum Load Fee (Other Funds). For the remaining 40 percent, the Department plans to utilize remaining residual carry-over amounts from the original Petroleum Load Fee ending balance. This was done in 1995-97 and 1997-99.

The fire insurance premium tax ($9.9 million) has been a stable revenue source and is expected to remain so during 1999-01. However, passage of HB 2855 by the 1997 Legislature will allow additional premium tax offsets starting in 2002, which could potentially significantly reduce the program funds available during 2001-03.

The Governor's recommended budget reflected a 9.6 percent increase from 1997-99 estimated expenditures. It added positions to support the liquid petroleum gas and hazardous materials programs, $333,778 Other Funds and three positions (3.0 FTE) to address licensing and inspection workload increases in the liquid petroleum gas program and to provide more technical assistance to hazardous materials responders. The two liquid petroleum positions would be supported by proposed tank inspection fee increases.

The legislature approved a total budget of $13.1 million Other Funds and 80.71 FTE. The Other Funds support is 12 percent above the 1997-99 estimated expenditure levels. The legislature generally approved the changes recommended by the Governor; however, the budget was increased by $53,433 Other Funds and one position (0.96 FTE) to fund reclassification of a deputy fire marshal position and establishment of an information systems position for the Community Right to Know program.

LFO Analyst: Niswender

The Department of Public Safety Standards and Training (DPSST) is responsible for developing and maintaining standards for recruitment and providing training to law enforcement, correctional, telecommunication and private security officers. Additionally, the Department is responsible for promoting competency in fire fighting operations by prescribing uniform standards in educational programs, training courses, and fire protection equipment purchases and utilization.

The primary revenue source for the law enforcement training programs is the Criminal Fines and Assessment Account (CFAA) funded by the unitary assessment added to all fines and bail forfeitures ($13.1 million). Law enforcement program funding is also provided from polygraph examiner licensing fees, and miscellaneous receipts ($106,500). Other Funds from licensing fees support the certification program for private security officers, which was established by the 1995 Legislature ($972,500). The primary revenue source for fire service training is dedicated funds from fire insurance premium taxes ($1.4 million). Revenue for the tele-communicators and emergency medical dispatchers training programs comes from 911 telephone taxes ($228,216). Federal Funds from the U.S. Department of Justice have been provided since 1995-97 and are expected in 1999-01 for the Western Regional Community Policing Training and Resource Center ($2.0 million).

Continued growth in the Oregon economy and population has created more demand for public safety services. DPSST currently has about 32,000 constituents and is expecting to grow to nearly 37,000 by the year 2000. The number of students enrolled is projected to increase by about 30 percent (4,455 to 5,841) for 1999-01. Over 70 percent of the projected student growth is in three areas--corrections (481), basic police (262), and OSP advanced training (251).

The increase in basic police training is being driven by plans to fully implement the 16-week training course, retirements, and demand for more officers. The 1997 Legislature mandated that DPSST expand the basic police training course from 8 to 16 weeks, however, due to staffing, management, and facilities concerns, this has not been fully implemented. The corrections training increases are being driven by construction of new county jails and state prison facilities due to passage of Senate Bill 1145, House Bill 3488, and Ballot Measure 11. The State Police training increases are being driven by retirement-related attrition and plans to increase patrol strength. To address these workload increases, the Department is developing a strategic plan. The plan is likely to modify the role of the training academy in Monmouth. It is expected to call for the establishment of regional skills-based training sites; the accreditation of training that is offered by other agencies and providers; self-directed training using distance learning and other technologies; and equivalency credit based on prior training and experience. An adjustment to the unitary assessment distribution formula established in law may be necessary to fully fund the 16-week basic police training, establish maintenance training, implement reserve training, and address other components of the strategic plan.

Since 1974, DPSST has been in a landlord-tenant relationship with Western Oregon University. Since that time, additional classroom, office, and dormitory space has been leased in a variety of locations, but it has not kept pace with the constituent growth and training needs. Hallways have been converted to classrooms, dorm rooms have been used for training and office space, and additional office space has been leased in Salem. Space for defensive training and physical fitness is very limited and officers must be transported off campus for firearms, use of force, emergency vehicle operations, and building search training. Facility limitations have increased training time and costs. The Department has been working with the Department of Administrative Services (DAS) on a facilities plan to deal with long-term needs.

The limited facilities at the Monmouth academy are requiring flexibility in training delivery. Correctional officer training is already being conducted from a remote site in Ontario. In order to meet the basic police training demand, it will be necessary to conduct three to five basic classes concurrently at regional facilities or divide the training between locations. It will also be necessary to incorporate distance learning, testing, and evaluation. In the past year, municipal and county police departments have had to wait as long as nine months to obtain a class slot at Monmouth for a new officer. Under the law, new officers are to be sent for training within three to four months; however, agencies are being excused from this requirement because of DPSST's facility and staffing limitations. To address these limitations, DPSST has been working with both the Portland Police Bureau and the Eugene Police Department to deliver off-site basic police training. Portland plans to begin its off-site training in February 1999 and Eugene in March 1999. DPSST will provide oversight, curriculum advice, and evaluate whether the regional training programs are more cost-effective. DPSST has also entered into an agreement with these agencies to evaluate whether this type of training is effective.

Based on the outcome of an Americans with Disabilities Act (ADA) civil suit, DPSST is required to conduct a job task analysis at regular intervals for each discipline covered under the Standards and Training Act. These are comprehensive studies that require additional resources. These job task studies may also increase DPSST's training requirements. Passage of the ADA, along with the growth in constituents, has also prompted increases in the number of challenges to the training standards. This has increased waiver hearings; consultations with physicians, employers, and attorneys; and field testing to verify applicants can perform essential functions. The increase in constituents has also created additional DPSST workload related to maintenance of training records and officer terminations.

The recommended budget of $20.5 million was $5.7 million (39%) higher than 1997-99 estimated expenditures. The budget and staffing increases were focused on improving internal agency management and operations; developing alternative training delivery methods, and evaluating training effectiveness. Funds were provided for curriculum development, accreditation of non-DPSST training programs, instructor certification, and distance learning. Due to revenue limitations, the basic police-training course was limited to 10 weeks rather than 16; there was no reserve for capital or facilities issues; regional training centers would not be developed; and certification maintenance standards would not be implemented. The recommended budget did not rely on increases in DPSST's share of criminal fine and assessment account or fire insurance premium tax revenue. Based on expected revenues and planned expenditures, the Department would have a 1999-01 ending balance of $1.9 million, equivalent to only two months of operating costs. Maintaining the recommended budget may require additional revenue in 2001-03. Specifically, the budget:

• added $1.6 million Other Funds and 21 positions (21.0 FTE) to make limited duration instructor positions permanent; (These positions have been limited duration since 1995 when the Attorney General determined the instructors were not independent contractors.)
• added $1.2 million Other Funds and six positions (5.75 FTE) to establish managers for various programs, create a testing unit to monitor training effectiveness, provide assistance to local public safety agencies, and fund room and board costs for an increasing workload in corrections training;
• added $618,063 Federal Funds and $50,000 Other Funds along with four limited duration positions (2.0 FTE) to continue the federally funded Western Regional Community Policing Center; (The $50,000 Other Funds is in anticipation of grants, donations, and fee revenue received from regional partners, students, and other constituents.)
• added $617,288 Other Funds and eight positions (8.0 FTE) for records management, fiscal services, and information services; (This will reduce government service charges by $117,000, since the Department will perform its own accounting and payroll functions.)
• added $531,827 Other Funds and six positions (6.0 FTE) for curriculum development, instructor certification, accreditation of non-DPSST training, and development of distance learning capabilities; (To fully fund this enhancement, the Department plans to introduce legislation that will create new fee revenue.)
• added $396,801 Other Funds and five positions (5 FTE) to continue as permanent four limited duration private security program positions and establish one additional support position; (This enhancement is funded with existing fee revenue.)
• added $134,345 Other Funds for student room and board costs to fund a 10-week basic police course through 1999-01; and
• increased the transfer of Fire Insurance Premium Tax revenue from Oregon State Police by $120,322 Other Funds to cover additional PERS and service/supply costs.

The legislatively adopted budget of $21 million is approximately 42 percent above the 1997-99 estimated expenditures and $505,392 more than the Governor requested. The budget addresses staffing deficiencies, projected training workloads for all disciplines, and funds activities to move the programs from institution-based to regional, distance learning, and technology assisted training. The legislature generally accepted the Governor's proposals, however, it adjusted the budget in the following ways:

• Identified approximately $627,000 in Other Funds reductions to the Governor's recommended budget based on updated student week training projections and delayed hiring of seven new positions. However, correction of an error in the Governor's budget required that $360,000 be added back to cover training costs. The net result of these actions was approximately a $267,000 reduction.
• Added back another $250,000 when it discovered that critical facilities planning work that must be completed in 1999-01 was not addressed in the Governor's budget.

• Added $560,000 Other Funds based on passage of HB 2391, which created the Public Safety Memorial Fund Board and also placed administrative responsibility for the Public Safety Memorial Fund with DPSST. These dedicated Criminal Fines and Assessment Account funds will allow the Public Safety Memorial Fund Board to provide benefit awards to families of public safety officers who have been permanently disabled or killed in the line of duty.

Budget notes require the Department to take steps to identify sufficient revenue to fully implement the 16-week basic police training course in 2001-03; to increase police training beyond the 10-week level in 1999-01 as Other Funds revenue levels allow; and to develop a facilities plan for presentation to the Emergency Board.

LFO Analyst: Baker