# Budget & Finance Committee Meeting - October 27, 2009 > Auto-transcribed civic record · October 27, 2009 - **Permalink**: https://meetings.lexingtonky.news/meeting/1102 - **Source video**: https://lfucg.granicus.com/player/clip/1102?view_id=14&redirect=true - **Date**: 2009-10-27 - **Last revised**: July 17, 2026 - **Length**: 18,661 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Budget and Finance Committee met on October 27, 2009, at 1:00 p.m., with Kevin Stinnett presiding. The committee conducted five informational agenda items during the meeting, with no formal votes taken. The committee heard four public comments during the session. The meeting focused on financial and operational updates across multiple city departments and organizations. Agenda items included a review and discussion of FY 2010 financials, a quarterly update from Commerce Lexington, a presentation on overtime for the Fire Department, an internal audit quarterly update, and a general list of recommendations from Council Links. All items were presented for informational purposes rather than formal action. ## Attendance The following individuals were present at the meeting on October 27, 2009: * Kevin Stinnett * Ed Lane * Jim Gray * Linda Gorton * Chuck Ellinger * Andrea James * Tom Blues * Julian Beard * George Myers * Peggy Henson No members were recorded as absent or late. ## Public Comment Several council members and city officials addressed economic development priorities and the role of Commerce Lexington during the meeting. **Council Member McCord** [timestamp: 1:13:24] raised concerns about retail services in northwest Lexington, noting that residents currently travel long distances to access local retail. He urged Commerce Lexington to be proactive in recruiting retail businesses to serve the north side community. **Vice Mayor Gray** [timestamp: 1:20:22] emphasized the importance of strategic planning with clear goals, tactics, and accountability. He called on Commerce Lexington to adapt to changing market conditions and communicate priorities clearly to the council. **Andrea James** [timestamp: 1:33:54] expressed concern that Commerce Lexington has not prioritized local retail development despite community demand and a prior feasibility study. She stressed the need for Commerce Lexington to respond to neighborhood needs and align with city plans, specifically referencing Destination 2040. **Council Member Martin** [timestamp: 1:35:26] urged the committee to reinvigorate Destination 2040 as a guiding strategic plan. He called for clearer expectations between the city and Commerce Lexington regarding their respective economic development responsibilities. The comments reflected a shared concern among council members about the alignment between Commerce Lexington's activities and the city's strategic planning goals, with particular emphasis on addressing retail development gaps in underserved neighborhoods. ## Contested Items **Commerce Lexington's Focus on Local Retail** A heated discussion emerged regarding Commerce Lexington's approach to local retail development. Council members Andrea James and Council Member McCord expressed frustration that Commerce Lexington had not prioritized local retail development despite documented community demand and the completion of prior feasibility studies. Both members called for the organization to establish clearer strategic direction in this area. [timestamp information not available in source data] **Clarification of Commerce Lexington's Strategic Focus** The council was divided on the fundamental question of Commerce Lexington's organizational mission and scope. The disagreement centered on whether Commerce Lexington should expand its focus to include local retail and community development initiatives. One faction argued that local retail and community development activities fall outside the organization's core mission. The opposing viewpoint held that including these elements is essential for achieving equitable economic growth within the community. This dispute resulted in a split vote among council members, indicating that consensus could not be reached on the appropriate strategic direction for the organization. [timestamp information not available in source data] ## Review and Discussion of FY 2010 Financials [timestamp: 00:01:00] Commissioner Rumpke and Bill O'Mara presented a detailed review of the FY 2010 financial position through September. The presentation highlighted significant revenue challenges compared to the prior year. **Key Findings** The review identified a $1.7 million shortfall in total revenue compared to the same period in the prior year. During the first quarter alone, the fund balance decreased by $663,000. Based on current spending and revenue trends, the presenters projected a potential $2.4 million annual shortfall if conditions continue unchanged. **Next Steps** In response to these financial pressures, Commissioner Rumpke and Bill O'Mara committed to conducting a comprehensive review of both revenue and expenditure options. This full review is scheduled to be completed by November, allowing time to identify potential adjustments to address the projected shortfall. **Outcome** This agenda item was presented as informational, providing the body with current financial data and establishing a timeline for developing response strategies to the identified revenue challenges. ## Quarterly Update of Commerce Lexington [timestamp: 00:36:25] President Bob Quick delivered a comprehensive overview of Commerce Lexington's first-quarter activities and strategic initiatives. **Key Topics Covered:** - Company prospects and business development efforts - Startup support programs and services - Workforce development initiatives - Minority business initiatives - Strategic events and community engagement **Highlights:** Quick emphasized the organization's ongoing relationship-building work with site selectors, a critical component of economic development efforts. He highlighted several successes, including the Access Loan program, which has provided financial support to businesses. The presentation also noted new business expansions occurring within the Lexington area. **Speakers:** The presentation was delivered by Bob Quick, with participation from Josh. **Outcome:** This agenda item was informational in nature, providing stakeholders with an update on Commerce Lexington's operational activities and accomplishments during the first quarter. ## Presentation of Overtime for Fire Chief Hendricks presented a quarterly update on fire department overtime during this agenda item [timestamp: 1:37:34]. The presentation was informational in nature and included remarks from Hillary. **Budget Performance** Chief Hendricks reported that the fire department was $310,000 under budget for the first quarter, indicating favorable fiscal management of overtime expenditures. **Overtime Fund Allocation** The department detailed the use of $1.3 million in overtime funds, which was directed toward full-time hiring initiatives. This allocation resulted in the recruitment of 41 new recruits for the department. **Cost Management Strategy** Chief Hendricks explained the department's approach to reducing overtime costs by utilizing on-duty personnel for special events. This strategy allows the department to manage event staffing needs while controlling overtime expenses. **Outcome** This agenda item concluded as an informational presentation with no formal action required. ## Internal Audit Quarterly Update Sahli provided a brief update on the internal audit process and the Division of Revenue Tax Gap Audit during this agenda item. The update included a summary of audit results. **Key Speaker:** - Sahli **Content Presented:** The update covered the internal audit process and the Division of Revenue Tax Gap Audit, with a summary of the audit results presented to the group. **Outcome:** This item was informational in nature, with no further discussion or debate recorded in the meeting transcript. ## General List of Recommendations From Council Links Kevin Stinnett presented a list of recommendations from council links to the council. This item was presented for informational purposes. No specific discussion or action was recorded in the meeting transcript regarding the recommendations presented. --- ## Full transcript Music Thank you. The budget and finance meeting for October 27, 2009. Welcome, everyone. I especially want to welcome our new Commissioner of Finance, so it's kind of baptism of fire, so we'll fire away when we get an opportunity. Now, just kidding. Linda, thank you for being here, and welcome to your first budget and finance meeting. We'll start off, as always, with our update and review and discussion of our 2010 year-to-date financials. So without further ado, Commissioner Rumpke. Thank you, Chair. I'm very pleased to be here. We've changed it up just a tiny bit to give you a little bit more information, because as we know, the economy is moving at an interesting pace right now, and unfortunately not positively in the areas that we'd like to see it. So I'm going to do a brief economic overview, and I'll be turning the mic over to Bill O'Mara to bring you up to date on the revenue side of the equation, and then Mary Pfister is here to answer any other questions around the financials, and then we'll give a quick summary. So without further ado, we'll get started. I put this in here, and this is a little bit different than what you might be used to seeing, but I wanted to give you an example of some of the tools that I would like to bring to this committee for your use. I think it's a sample of what we can begin obtaining from the financial services providers that we do business with now. And so we're going to be able to get more bang for our buck from all of those great contracts that we have with providers. I love this sentiment slide because, you know, it started out, wow, boy, am I smart, lots of optimism. And then, you know, a year ago, how could I have been so wrong? And if I had to say where we are right now, nationally, statewide, and locally, I'd like to believe that we're in the hope category on the way back up. As we were walking down here, we got breaking news from the ABC News Comfort, excuse me, Consumer Comfort Index. And we found out that this is the lowest month that they've had since January and only four points above the very lowest that we've had. Not good news for us. The sagging ratings in the buying climate and personal spending, no big surprise to anyone. But, again, this is the kind of information we'd like to bring forth to you. If you look at the GDP, I think that this gives us a realistic view of, yeah, it's bad, but it really isn't as bad as the Great Depression. So if you look at the decline that we've had in the GDP of 3.9 percent, while that is the highest in recent times, you know, we were at 26.5 during the Great Depression. So I think that that puts it into perspective, and again, just a data point for everyone here. So I'd like to go over a couple other considerations for the council as we look at our revenue projections and just where we are as a community. Third quarter earnings observations, we had increasing profits due to cost cutting, and that's as 19 percent of the companies have reported up to now. 82 percent of the firms that are reporting are beating their earnings forecast, and 62 percent are beating their revenue estimates. That's good news for us. I always look at GE as one of those bellwether firms, both for the industrial side and the financial side. So if you look at the industrial side of the equation, the industrials have really recovered back to trend, and their order backlog is at record levels. That's good news for us because that means at some point we're going to have to hire back so that we can meet those order requests. We're just not there right now. Unfortunately, on the financial side, they're down 93% year over year with delinquencies still high, but they're starting to crest. And, again, that's the good news. It's not continuing just that hockey stick up. We're starting to see some subsiding in those delinquency rates. Then I want to move just a quick comment on the availability of credit. On the corporate side of the equation, it remains difficult, but it is available. The financial services firms are looking for higher debt coverage. They're looking for stricter cash flow covenants, but you can get credit. That's all great and fine. Unfortunately, we don't have 50 Fortune 500 firms in this community. So I look to the small business community, and that's really a driver for Lexington. And quite frankly, in one word, it just sums it up, it's terrible. It's absolutely terrible. Access to credit remains an issue. We have small business owners who have depleted cash reserves. They've done a great job all these years, but the sustained recession that we're dealing with has just literally wiped out their cash reserves. And then if you talk about trying to start a new business, besides some of the great programs that urban county government and other partners in the community are working on, we just can't get enough going to offset some of the things that are happening. I think the bottom line for the small businesses is that it's very difficult for them to demonstrate to credit providers what I would call bankable cash flow, in other words, sustainable cash flow. Again, because they have drained their cash reserves, they've utilized their credit cards, et cetera, et cetera. So that gives you a little flavor. And then finally, I wanted to comment on the commercial real estate bubble. We talk a lot about the single-family housing and multifamily housing, but if you think about commercial real estate in general, This was a staggering fact for me. $1.4 trillion, trillion with a T, of real estate is up for refinance over the next 33 months. So what does that mean to us? About 45% of those projects are not going to be able to get refinancing. They're not cash flowing. They have vacancy rates, all of the things that you've heard before. So how does that affect us? Well, not only it affects us from a job perspective, but the defaults are actually going to hit our local and regional and national banking community. Because if they default with the banks, then the banks are going to have issues. They're going to have to downgrade their loan portfolios, and then that further restricts credit. And that's why I wanted to bring it to your attention today. As you think about unemployment, the jobless claims are improving, but they're still weak. And there's really a lot of questions about slowing down job losses to job creation. About 60 percent of the decline in claims appears to be the result of the exhaustion of unemployment benefits. That's not a good sign. Lexmark did announce, as many of you are aware, that they are going to reduce their job ranks by about 825. The positive news is the Lexington employment base is going to remain at 3,000. At least that's what they've told us in their release. And, of course, we all know about the ACS hires 300 new jobs, hopefully 50 of those permanent. And then I just mentioned the Modine manufacturing closure, which is in Harrodsburg. I don't know how many we have commuting from Fayette County to that Harrodsburg plant, but it could, again, impact the overall family if, in fact, that is their employer. And they are going to – that's going to be 110 losses of jobs. So if you think about our unemployment rates, I really like this chart that Bill O'Meara had put together for us. In Fayette County, we've really remained kind of flat over the last two months, and that's not a bad thing. The whole MSA has actually decreased in unemployment rates about 0.4%, and Kentucky has remained flat. But, again, I'll draw council's attention to the fact that some of this is just the fact that they're running out of benefits. So I don't think we're out of the woods by any stretch of the imagination. If you look at foreclosures, foreclosures in Fayette County were at 42 in September. That's our lowest number since April, so that's good news. Nationally, pending foreclosures are really starting to swamp the improving price trends that we've been seeing, and it really excused the housing data. so that I wanted to bring this up to you today. So as you are doing your analysis, please understand when you look at this national housing data, we're really a nice little microcosm here. And the fact that we can gather local numbers, we will do our best to continue to provide what does that mean for Fayette County. So we'll balance it with the national information, but I want to keep everybody abreast of that. Our housing permits are down from August, about 162. That's not abnormal for the cyclical nature of new permits. We were hoping that it would stay propped up since we had decent weather, but that was not the case. So I think the bottom line for my portion of the presentation is that we obviously are experiencing a jobless recovery at the present. We're so dependent on job retention and growth, particularly in the small business sector, and we've still got some significantly heavy lifting ahead of us. You know, global financial services firms are projecting that it's going to be end of 2011 before they really see a full, more robust economy. And, you know, there could be other, depending on what happens with that whole commercial real estate bubble, it could further depress even what's happening here in Lexington. Even though we're not the commercial real estate capital of the world, it still does impact our economy. And with that, I'm going to ask Bill to come up and present the September preliminary results. Welcome, Mr. O'Meara. And I also want to thank you for the last several months in presenting to this committee. We appreciate your service to us. Now, are you going to bring us the good news? Maybe I should sit down. No. I'm going to bring you the news, and then we'll talk about how rosy or gloom it is. September preliminary results for withholding our number one revenue source is down a million dollars, same period last year. Net profits are virtually flat. Insurance is virtually flat, and the franchise fees are just slightly ahead. We did see net profit refunds, which we anticipated would start showing up in our numbers, which has a depressed effect on money to spend this year, and that is reflected in the year-to-date numbers. So for the first quarter, September 2009 is $36.2 million in withholdings, and same time last year was $36.8 million. So we're down $561,000 year over year for the first three months of the year. Comparing it to our budget for FY10, we are now at $1.8 million behind where we wanted to be in order to obtain 2010 revenues for that line item. Net profit is $4.97 million this year compared to $5.3 million. That puts us $380,000 behind, and much of that can be explained with an increase in the amount of refunds experienced in the first three months. We're a little bit ahead of where we hope to be year to date, but looking at net profits, the first quarter has not been a bellwether predictor for how net profits would come out. Withholdings has been more reflective how first quarter goes, the rest of the year goes. Insurance is slightly behind year-to-date, and franchise fees are slightly ahead. So for the top four revenue streams, we're at $49.5 million. Last year, we were at $50.6 million. So of those four revenue streams, year after year, first quarter, we're down $1.1 million. Compared to budget, we're down $2 million. If you just look at the graph that I've been trying to show you just so that you can see the trends, the level is not going up. It is flat, and that reflects where we are on the payroll. If you look at – that's very hard to read. But basically it shows that 2010 is below both 2008 and 2009 levels at three months ending. If you look at the – sorry. I think I'm lost. Hold on. Here we go. Instead of looking at year over year, since last October there was some significant financial activity occurring, we're looking at the trend for the calendar year. And so for withholdings, we are trending about 1.4% less for the nine months ending calendar 2009 compared to nine months ending calendar 2008. And the net profits, that graph shows the same. We're not pulling ahead. It also shows that we're about the same as 2008 and 2007 through September instead of ahead. And then the same trend analysis for calendar year 2009 versus calendar year 2008 shows that we've taken in about 12.7 percent less for the nine months ending September 30th, 2009 versus the same period in 2008. The insurance premium tax, again, shows graphically that we're slightly behind, and the franchise fees show we're basically on track to same levels as last year. The comparisons that we're going up against in the first quarter of 2009 are going against same period last year before the financial crisis hit, so comparisons a little more difficult than they will be in the second quarter of fiscal 10. October, November, December, there was financial activity that was unpredicted. It did not really show up in our numbers, though, until calendar year 2009. The rest of the news is just looking at total financial results. We talked about the first four largest revenue streams, but if you click total revenue for September of 2009, we took in 56 million total revenues from all sources for the three months ending September 2008 was 57.7. So total revenues for the general fund for the first quarter ending is 1.7 million lower than last year. That's the sobering news. The silver lining, if there is one, is that we have not spent in the expense category at the same level as last year or the same level as budget. Personnel costs are at 36.2 for the three months ending. The same period last year was $37 million. We're $768,000 less than the same period last year. Operating is $13 million versus $15.4, and that's $2.4 million less than last year. The other category is over by 2.1, and that reflects the fact that we issued bonds in the winter for both pension and general obligation construction bonds, and those first interest payments were due in September. So those payments hit this year where they were not an obligation, same period last year. The bottom line is that we had $1.7 million less in revenue. We had savings in operating personnel and other expenses, so that net change in fund balance first quarter of this year over first quarter of last year is a decrease of $663,000. In addition, accounting has prepared that flash report that you all have asked for as well as departmental results. There are some variances there that we can try to address if you'd like to. If you have questions now, I guess I would like Commissioner Rumpke just kind of to wrap it up, and then we can try to field questions. Well, I guess it goes without saying my first week on the job. I hate that I'm not the bearer of good news, but I think what's really important to focus on is the fact that, obviously, it appears that a revenue shortfall is going to be likely, at least with the trend analysis we were able to do to this point. And as Bill pointed out, it has been difficult up to this point to get our arms around that trend analysis because of all the craziness that's happened over the last 18 months. But we are doing a deeper dive on our revenue projections as we speak, as well as analyzing what steps we can take to reduce expenditures. And we will be bringing a presentation to the Council in November of what our findings are and some recommendations for next steps. We're looking at everything. And I think, as I referenced at the beginning of my presentation, I think it's important for us to be pulling data points from all of these resources so that we can truly get our arms around the trends. Because I think the team has done a good job, you know, before I joined it, but we're living in unprecedented times. So any data points that we can pull together to get a more refined revenue projection, that's what we're working on. And we're available for questions. Committee members, if anyone has questions, please log in on the Granica system, and we'll start down our list. First up, Council Member Ellinger. Thank you. Chair, from the first quarter, then, where would we find those numbers on which? On the first quarter? Or the first quarter that we've had from July, August, September, those numbers were? So was that in your presentation? It was in the revenues and expenses were in the slide, but also in your handout. The first pages, I believe, of the handout give the financial results for first quarter. So where do we stand right now for the first quarter with looking at our revenues and expenses? What are we down? We're down. Fund balance has changed $673,000. 663,000. 663,400? Yes. And so when we made our projections on this budget, we had, what, 4.2 percent growth? Was that my understanding? That's correct. So where do we stand right now? We're at a negative growth? That's correct. So we actually were supposed to grow $13 million and we're down 663, so we're almost down $14 million in the projections. Well, one is a three-month total and the other is a 12-month total. So it could actually be higher, then, depending on how it trends. Well, actually, it would be better than that. Let's say the first quarter is a bellwether of the entire year. Right. It would take 600,000 times four. Okay, minus. So 2.4 is what you're saying. So when you come back, you say you're coming back in November with some possible ways to address the budget. And what are you looking at to do? and what are we going to know between now and November? Well, first of all, all I can say is we have to look at every line item. I mean, as responsible citizens, we have to look at every line item. And so, again, I know I'm the new kid on the block, but when you're faced with a swing like you've just described, We've got to get a more solid feel about where we think the revenues are going to be and then look at every line item on the expense side of the equation and come back to you. So I guess to get my numbers right, we expected a 4.2% growth, and we're actually at a negative growth. And if it trends like it does, instead of the $13 million, we could be $2.4 million short, so we could actually be over $15 million short is what we'd have to? Or it would just be 2.4? That would be 2.4. Just the 2.4. The 2.4 is comparing to last year, not the budget. So we're mixing comparisons to budget and actual. We have what could be a measurable shortfall ahead of us, and that's why we are going through with the commissioners a full review, such as we did in January when we were preparing the 2010 budget and going to come back with some very hard choices to present to the council because strategic hiring is what we talked about. We'll have to decide whether strategic hiring is enough in order to get through this storm or whether we have to do other things. We're going to look at what are have-to-dos versus want-to-dos and analyze everything from that perspective. And you were going to come back with us at the November meeting? Yes. We're talking about in November. We're not saying November budget and finance because I believe that's the first week of December. That's correct, Chair. So before that, you were going to come to the full council instead of to the budget and finance. Okay. In the next couple weeks. Okay. Thank you. Councilman Beard. Thank you, Chair. Bill? So since all these words came out of your mouth, tell me again about the category on the expense side of things of $2,578,000 versus $443,000. The other category? Yeah. What I drew your attention to was in the first quarter of 2009, we made an interest payment that was due to our bondholders on the bonds that were issued last winter. That payment, since those bonds had not been issued last year, was not in the September 2008 numbers. So there is an increase in debt service payments in September of 2009 of about $2.2 million, $2.1 million, I believe, over the first quarter of 2008 because we took on those additional bonds and the debt service that went with them. And we don't accrue that? That's all handled on the cash prices? Well, I'm comparing what we paid last year to what we paid this year. So I'm comparing the fact that we had those payments this year. We didn't have those payments last year. When comparing to budget, yes, it is budgeted. It is budgeted. Yes. On a month-by-month basis, I mean. Yeah. Okay. Thank you. All right. Councilman Martin. Thank you, Chair. And I'm trying to figure these numbers out as well. I understand we have, and these are sort of round, but about a million-five shortfall in our revenues. And then a $600,000 savings on the expense side. So we've spent that much less. About a million-dollar savings on the expense side. So the net loss is $600,000. I'm sorry? The net loss is $600,000. Net loss. Okay. So the $600,000 times, I guess, four periods would be 2-4. So we're looking at not only the 4% increase of the revenue that we needed to make the 2010 budget plus the $2,004,000. Is that right? That's one way to look at it. We're hoping that we – I don't want to hope right here. I want to know sort of where we are. What's happening right now is projected over the year. Right now, the first quarter showed a loss of $600,000. Right. So that puts us at $2,400. and then how much is the 4 percent? What number is that, a $15 million or a $13? What was 4 percent of the budget that we needed? Maybe the easiest way to look at it will be if you look at your – Actually, right now I really want to know what the 4 percent of the budget was. How much more revenue did we need this year than we needed last year? About $13 million. So I'm with Council Member Ellinger that we're 15-4 short if the trend right now continues through the year. So being that we started talking about this in May and June, I guess echo my colleagues that I've been asking on a number of occasions what our contingency plan has been. And I guess I'm about to get pissed about it unless we get some answers, because, you know, we're looking at a big train coming at us, and I know that these are difficult choices to make. But this is, I think, something that we've all been very concerned about since June. And I just – it would give us a little bit of comfort to know that there is some sort of idea about how we're going to handle a $15 million shortfall. It just hasn't been communicated to me. Maybe my colleagues have more information than I do, But I know I've been asked this is the fourth or fifth time I've asked this question, and I guess I'd like to know what we're going to do. And what we're going to do is the same thing that we're going to build on the answer I gave you before, Council Member Martin. When we were putting together the 2010 budget, we looked at a 15 percent decrease across the board, asked the commissioners to come up with a game plan on how to obtain that. We built the budget and did not have to go to that because of the trends at the time. We were hopeful that we would not have to go that deep into restricted budgets. We're asking them to go back to that, but what was the facts in January may be different from when they are October 15th. So we're asking them to revisit, look at the realities of today, refresh those discussions, and then come together to you with a proposal. So basically we're going through the same exercise we did in January, but updating it for the realities of today. I just want to make a clarification on the numbers. If you look at the budget, it's $2.4 million through the deficit at the end of the first quarter. So if you extrapolate that out, that's a $10 million bogey for the budget, not $15. So it's a bad number, I mean, regardless. But it's something we're going to have to take care of, right? But the reality is it's $2.4 million and change. So if you extrapolate that out and it's going to be that bad the next three quarters, we would be looking at a $10 million shortfall. I guess I'm really not following that because are we ahead of budget or behind budget? We're behind budget. Well, we needed, based on the difference between our 2009 revenues and 2010 revenues, an additional 4% of revenues in order to make budget. And that amount was approximately $13 million because we're also behind budget as well. So in addition to having to make up the 4% to be even, but we also have to make up now our shortfall. I'm sorry to try to confuse. Let me see if I can try to clarify. The analogy that you used assumes that we would spend at budgeted rate, but our results show that we're not spending at budgeted rate. That's why we don't feel that the 15 is the reasonable bogey. Does that help clarify? I do, though. I can show you why. In other words, if you assume total revenues go up $13 million and without asking, we're also going to spend an extra $13 million, your analogy would be correct. We're not making that second assumption. So what you're saying is our expenses are not going to be what we had budgeted either. Our revenues are going to be down, but our expenses are going to be down too. And in the process, you're thinking that our whole is going to be $10 million. Is that a number that we're now looking at? And I'm not sure where that 10 comes in. If you look at your second report that's in your packet, the one that shows by month, if you look at the very bottom, we actually changed this based on some confusion from last month, and we actually put on here the change in fund balance. And if you notice, right under where it says change in fund balance, The year-to-date actual for September is the $2.4 million. Based on our budget, and the budget was developed by looking at the nature of every kind of expenditure and whether it's seasonal or not based on the division that the expenses happen in. So there was a very detailed analysis that went through to develop the monthly budget. So based on the monthly budget, we would have expected our net change in fund balance to be $6.6 million. So right now the variance is $2.4 million. Because we spread our budget based on the nature of accounts and things, I think one quick back-of-an-envelope approach would be to just multiply that by four. And that should project, you know, what our perceived deficit is. Part of the things that's offsetting it, Councilman Martin, from the amount that your rough estimate coming from a revenue, is that we do have some vacancy credit and that the mayor has been managing and strategically hiring in the general fund because we knew that our revenues were soft. So, you know, if you recall in the budget, we had a vacancy personnel credit of $5.9 million. We're actually looking for that to track closer to $8 to $9 million if we continue to manage our vacancies in the manner that we are now. So that's kind of some of the things that are factoring into why the, you know, why the amounts don't just add up because we will have savings. We also are seeing a lot of savings in our repairs and maintenance. Facilities and fleet management is down almost a million dollars from where they historically have been in repairs and maintenance and vehicle maintenance and things like that. So, you know, we are managing expenses as best we can to offset the revenue shortfall. And I appreciate it. And I guess just to finish up, I was very impressed that the administration brought in the 2009 budget, $6 million under. And I know these are the most difficult economic times in our lifetime. And so I appreciate the enormity of the task. And we just want to be sort of know that there's a plan and that we're all headed in the same direction and sort of be included in the process. I think as yet, probably while the administration has discussed some of the hard alternatives, we just haven't been included in those discussions, and so we're sort of in the dark at this point. Thank you, Chair. Any other committee members have any questions on the financial reports? Anybody else? Thank you all so much. We'll move on to our second item, and that's our quarterly update from Commerce Lexington. And President Bob Quick, welcome today. I see you brought your economic team with you. Thank you. Thank you all. I think this is our first opportunity to come before this group, the Budget and Finance Committee. One of the things that you should have received from us on October 14th was a very detailed packet of information about our activity that goes through all the numbers and gives you a lot of background data. I think the information that was sent to you late last week from Chairman Stennett was a handout, which is several pages back, this handout, and it just says at the top, first quarter fiscal year 2010. And in talking with Councilman Stennett, he had asked that we provide kind of a high-level overview of these activities and functions that we have done, again, for July 1 through September 30, 2009. These are our first quarter results, and I will kind of lay these out in probably more general terms. If you have questions, I'd be more than happy to follow up with you then. You can see our prospects. We are at 27. These are companies, we call them prospects. They are looking to expand or to locate here. Our startups, entrepreneurial high-tech companies, we have, during that period, we worked with 10. And existing business visits, we have 49. What I would like to point out is in the difficult times we're in, what we have found very interesting is our activity load, when you compare it to previous years, is up. So we are finding companies interested. Now, that doesn't mean that every company that contacts us and says you're on a short list or if they're here and they're looking to expansion, it doesn't mean that those expansions are going to occur right away. But it is a good sign because we are, and even if you forward it to today, We are finding there is still increased activity. So companies are out there. I think a lot of it, what they're trying to do is figure out, judge when the economy is going to turn, and so as they're adding employees or expanding product lines that they're positioned for that. So I just wanted to point that out. The existing business aspect I want to point out to you, it's very, very important, and you're going to hear me mention this word quite a few times, and I think you can all relate to this. It's about relationship. And so what we try to do is maintain a very trusting relationship with our candidates. And the reason why I say trusting is that we want them to share with us if they've got issues, if they've got opportunities, because we want to be able to show them that we can work with them in a confidential manner, and I think we do have that reputation. So, again, those existing business are very, very important. The next items I want to cover and cover briefly would be a variety of activities. Many of these are general. They're relationship-oriented. Others are very direct as far as working with companies. The Alltech European Equestrian Games was an event that we went to. Jenna went along with Anthony Wright and also Nikki Heidelbach from the Convention Business Bureau. We are finding an awful lot of interest in our European and Asian guests to come to the World Equestrian Games here next September. So one of the most important things that we feel like we need to do is make sure that we're building that relationship and working with them, but we oftentimes don't know what their relationship is with a corporate business CEO background. So also we're trying to figure out how to connect with those individuals. They may not locate a business here, but they may want to invest. So we're trying to figure out who they are and, again, build relationships with them. The Manufacturers Network Group, as you all know, we've been here before, and you already have passed support for a company, Florida Tile. But last session, the economic development incentives was overhauled pretty significantly. They were pulled together, streamlined. And the most important thing that we're trying to do is make sure that we get that message out about how that all works now, including our manufacturers. They are maybe smaller in total number, but they are significant in payroll. So, again, we're trying to keep that very close relationship with them. We brought in the Economic Development Cabinet Commissioner, Jim Navolio, who talked about those incentives. He did a really good job of building that rapport because, again, when their company is looking to expand, they may have plants all over the U.S. and the world. We want it to be done here. Also, we had David Freiber with Kentucky Utilities. He talked about cap and trade. That is an issue. There is a lot of concern, as you might expect, here in this immediate area. So we had 50 people attend, which was a very good turnout. And we met at the Wabasto facility. D.C. fly and come back home, that's one of the items we've talked about that we need to keep connected with our expatriates, but also people in Washington, D.C., that may want to come back and locate a business or at some point come back to Lexington, Central Kentucky to live. We had 150 people attend the event. It was one of our better events from a turnout standpoint. They're all great events because, again, we are always shocked at how many Kentuckians, but especially Lexingtonians, are high up in the different administrations that are in D.C. Now talking about how we try to deal with prospects from another standpoint, the University of Kentucky Engineering Summer Program. We partner up with the university at a week-long engineering camp, and we work with them. These are prospective students. They don't have to come here. We're trying to build that relationship with them so that they look favorably upon Lexington and the University of Kentucky. Again, future job sources. The U.K. Clinician Innovation Day, another one of, I think, a very significant strategic effort that the University of Kentucky is putting together. We have a lot of great things in research, but to get into commercialization, oftentimes, Oftentimes, as Dr. Todd points out, it takes not only a conversation, but it takes a lot of legwork behind the scenes to help those companies go from research out to the mainstream. University also announced, UK announced, the formation of Therics Medical. Jim Clifton, who some of you may know, face from here, is heading that effort up. And, again, it's trying to figure out how to get medical devices, focus on medical devices as a target industry. Very significant effort. Advantage Kentucky. You know, there's the issue we deal with all the time is whenever we're competing for companies, we're often competing against larger metro areas that put us at a very significant disadvantage. One of the things that has happened with our partners in northern Kentucky, Dan Tiberky, Steve Stevens with the chamber there, Dan with our economic development group, with Joe Reagan in Louisville, and now here in Lexington, We are doing joint trips collectively to different centers. We have one coming up to New York. We've been to Chicago. Again, relationship building. And all of these trips that we've made to go meet with site selection folks have brought project ideas back that we could then, project opportunities back that we could work on. So like I said, we've got a trip coming up to New York. Site selectors are your gatekeepers. They are the ones that if you don't have a relationship with them, a lot of these different projects are going to go to where they do have relationships. Larry Hayes is the new Cabinet Secretary for Economic Development, and we connected him in. I know all of you were invited as well to a function at the Buffalo Trace, and we just want to make sure we connected him, introduced him to a lot of our folks and vice versa. That went extremely well. Marketing and advertising. Our Kentucky alumni magazine featured Todd Vincent, founder of XML Legal. as part of our comeback article. And also we're trying to link in our visionaries, mavericks, dreamers, direct mail pieces, and carry that theme into other things that we're doing. We also put an ad in the Area Economic Development August-September issue featuring Rebecca Ryan's Next Generation Cities, where we look very good based on other competing competitive cities. And many of these things you may have heard us talk about, but again, just trying to give an overview. Some cool and interesting happenings. Geeks Night Out. It's really done very well. Last time we had 75 people at a networking for high-tech companies. This is a part of our Intellects group, which, again, was something that came out of the Lexington Entertainment District. When they were talking about what can we do in Lexington to jazz us up, make us cool. And anyway, these groups are performing very well. A lot of people are coming, a lot of interest. And also we're networking them throughout the downtown, so a lot of people are talking about what they're finding. Pachalc-cha, let's just call it PK. I don't think I could do that five times in a row very quickly. In Japanese, it means chit-chat. But when you bring together your high-tech, your design people, your travel, idea creation, and you sit them and we're talking, we're interacting, it's interesting the conversations that take place, but the people start to feel connected that participate in those different initiatives. Those have gone very well as well. Awesome Inc., I think they were here the other day visiting with you, an incredible group. They have really captured the hearts, minds, and also the talent here and did some really incredible things. I know we spend time working with them to try to help feature. And here's one of the events we worked with them on where they had 100 attendees from throughout the region that they came in. Many of those may have been their first time to Lexington or were their first introduced to our tech sector. But, again, it turned out very well, and we appreciate the relationship with Brian, Luke, and their other partners. Pod Growth Companies, you've heard us talk about Florida Tile. as you helped with the incentives. 51 new jobs, average wage $47,000. Baker Iron and Metal, they also have opened up a new recycling facility, added five to ten jobs, $6 million to $8 million in capital investment. Again, some very significant efforts here when other markets we're talking with are declining. We've done well with a couple of those companies. And a third one is equine diagnostic solutions. This is an example of a situation where a company was purchased, and then the equine group that was part of that was shut down later. Well, the talent within that company, the senior staff, Jennifer and Amy, they then worked with us. We used our access loan. We used the Small Business Development Center. We brought our team together, and they are a new startup company here, and we were able to pull together the capital, $340,000 in debt financing with Community Trust Bank. So, again, another situation where that's been successful where we could have lost and hopefully will be a gain. And we have another announcement that will be coming up in about two weeks, a very similar type situation. On our Lexington Workforce Development, Partnership for Workforce Development, our third annual Lexmark Teacher Institute was very successful. Once again, we had about 51 Central Kentucky educators. It connects them to have a better understanding of what businesses wants and needs are and then to look at trends. And again, you can see on one of those pages all the different companies that came together to work with these teachers, and it's very interesting, their perspective when it's all said and done. They gain a lot, and they can apply that back in the classroom. And then under community minority business development, we sponsored and attended the first annual partners for entrepreneurial advancement, or they call it the PEAK Conference. Again, we had 27 businesses and practitioners and attendants that worked then with 130 folks there to help them to understand the different options that are available. This was a Northern Kentucky event, but, again, it's one of those areas where we're reaching out. We're trying to connect in and let people know that we are open for business and we want to work with minority companies. Again, it was very successful. We're a lead sponsor in the Lexington Fayette County Minority Business Expo, large several attendants of 480. and then also we were involved with the Governor's Minority Empowerment Seminar. We've helped bring in Dr. Melvin Gravely, and he's just a tremendous individual who's a really good startup, entrepreneur, thinker, and kind of a leading guru, think tank person. The chamber also then hosted the Messer Construction National Diversity Solutions, their construction economic inclusion outreach session. That was part of the $30 million public safety operations center. And finally, I would just say that my comments here, the access loan program, the first quarter, we worked with companies to the tune of $350,000 in loans. The access loan is when all the banks come in. We work with individual companies. They get to a certain point where then they can present to the banks. At the end of the day, the banks can get back with them and say they're interested in the loan or not. And we've had a lot of good success there, as I said, in the first quarter, $350,000 in loans. And then we've also identified about 390,000 in procurement, either in completed or executed projects by minority business. So a lot of effort, a lot of activity going on, and this will give you a thumbnail. And I thought if we got just a minute, have Josh come up and talk a little bit about the job situation from some of the numbers we've been able to pull. It would be great, yes. The committee members, if you have any questions, please log in. I apologize. I didn't have this prepared ahead of time, so I'm going to pass these out. So there's two sheets coming around. One of the sheets is a look at the residential unemployment of Fayette County. basically the unemployment rate you see in the newspaper every month that is reported at the state, national, and local level. The unemployment rate for September in Fayette County was reported yesterday as 7.7 percent. It is about 3 to 4 percent higher than normal, the average of this decade, and the first chart will bear that out. As you can see, there's a large darker blue line that's on top. That's 2009's unemployment. And the lighter blue line underneath is the average unemployment for this decade. So two things I'd like you to take away from this chart. One is that you can see that we're basically following the same seasonal trends that we always have with an extra cushion of between 3 and 4 percent of unemployment. Unemployment tends to be a lagging indicator. The economy is probably going to be around a while. Again, looking for significant growth in order to get that down. we did see a good reduction of a half percent of unemployment from August to September. The other sheet that I'd like to show you is establishment employment. And basically this is a survey of companies instead of residents in different industries what the employment trends have been between September of 2009 and September of 2008. And so this is the bar chart, the colorful bar chart. And you can see that professional and business services and manufacturing are there in the bottom. They've lost the most amount of jobs percentage-wise. Manufacturing is fairly easy to comprehend. Professional and business services is anything from, like, an advertising agency to a lot of different white-collar firms that serve businesses that don't fall in any of these other categories. So this is just a quick snapshot of what's going on. You can see some of the industries are doing better than others. Overall, Lexington still has the lowest unemployment in the state. We can benchmark versus a variety of other cities across the nation, and I'm open for any questions if you may have them. Thank you. And are we working on getting the bar chart on the overhead, just the bar one, just so everyone in the watching audience can see as well what we're looking at on the bar chart? Council Member James, do you want to go ahead and lead us off? Thank you. Thank you, Chair. Mr. Click, thank you for the report. Look, I'm glad we're doing the quarterly or monthly or whatever they are reports out. Quarterly, I guess it is. And we'll be here monthly to answer questions. Okay, that's great. Thank you. Commissioner Rumpke talked about local businesses she thought were very important to our local revenue sources. What specifically is Commerce Lexington doing to enhance, encourage local businesses? Sure. A number of things. One is we try to reach out to many, as many companies as we can. When we have group type events and activities, oftentimes that is when we can identify people. They can help identify or connect to us that we're looking or that they need help or that they have opportunities or they have issues. challenges. So that and then also we have a fair amount through the Small Business Development Center, Access Loan, Minority Business, Community Minority Business Program, and just other folks that kind of come and go with us that more of the one-on-one where they just identified us, they come in because they have an idea and they've gone to one of their different points and they've said go to this office, go to this location. So it's a lot of group things, but it's also we try to get it down to that one-on-one where we work with them, provide them the materials of what they need to get help or to get a startup to get the help they need. Okay. It's a variety of things. Let me just put this out there. This is something that I've mentioned before, and I'm going to ask every time. We had someone present to our Economic Development Task Force once about retail, and they basically did like a needs assessment for, I think they used District 11 as the example. and they showed what would be supported and helpful commercial and retail establishments in that particular district based on, you know, a cash economy of that local neighborhood, you know, spending trends, demographics, that sort of thing. Can Commerce Lexington, do you have an interest in doing that? Can you do that? And the reason I'm asking is because we are seeing changes in the global economy, and there is a trend towards supporting local economy because of things like the price of oil and people living where they work and such. So what's your mindset or Commerce Lexington's mindset on supporting local economy? Well, supporting local economy obviously is what we're all trying to do. How we go about doing that and what you're referring to with the retail component, We have not – that has not been something that we traditionally have focused on. With our efforts, we typically try to work on getting more dollars in the economy through payroll, added payroll, increased payroll with the idea that retail will come, again, within the mission that we've had in the past. So that's where our focus has been. It's not been on the retail side. Now, I don't know if any of the discussions we've had with Harold of any retail – but that's not been part of our focus in the past. Okay. Well, I will at some point talk more to my colleagues. I just, I'm hearing that from my constituency, and I don't, and I'm seeing, I'm reading it in all the planning booklet and magazines and things like that, and it just seems to be something, it seems to be where the market's going. I feel, I'm not an expert, but I feel like we're behind there. With local businesses, we do help. We're not big on recruiting the big retailers. We don't turn them down when they call. So when we get a phone call from a new Myers or a big box store, we try to connect them with the local real estate community. If it's a small mom and pop who's looking to set up a new grocery store or an example of a clothing store, we work very closely with them through the BBDP to try and help them find access to capital. And I'm not really talking about helping. I'm really talking about a view. looking in on what the needs of our local community are for commercial and retail and then almost setting it up to where here's what the needs are, the way we were presented. I think you all were present at that meeting when the consultant, I think he was from Ohio, Indiana, I can't remember, and he presented what retail and commercial establishments would be supported by the demographic and spending habits of District 11. That has not been our focus in the past, so that's the only way we can respond to it. Okay. Thank you. Bob, I have a couple more for you. On all of the Commerce Lexington boards of whatever type of specialty, are there any council representatives that sit, and who are the council representatives that sit? On our economic development committee that we have, we have Vice Mayor Gray and we have Councilman Stenet. Okay. Who selects those representatives? Well, we did, since we did not have representation about a year and a half, two years ago, and based on the input of people from the council, is we selected the two individuals who were co-chairing the economic development for the city. So that seemed like a logical way of plugging in with those two folks. We're trying to have some logic as to why. Also, I would point out on our board of directors, we have by position, by bylaws, the mayor, vice mayor, and then the city's economic development director, Anthony Wright. Okay. And you all have had some great events the past couple of months. I've heard really positive things about them. Mr. Gravely, is that how you pronounce his name? He's phenomenal. He's made a huge impact. Yep. And I'm wondering what's Commerce Lexington going to do different now that you've heard him? And any time we have any speaker come in, you always try to modify what you're doing, your approach, or kind of take the nuggets, the golden nuggets away. That would be a good conversation we have, like from the Melvin Gravely event with Tyrone. But, again, we typically pick up, I think, as much as the participants there, and I guess we are participants, we try to pick up a lot of what they're saying to then focus it in again with what our mission has been, and then improve it, change it as we need to. I know I'm being really generalistic, but we try to look for specific changes that we can make and how we assist companies. But that's something I just have to try to analyze and put a list together for you as we do each of these. I don't have anything right now I could say boom, boom, boom. Okay. There's a minority inclusion report that's floating around. Have you had a chance to review that? Yes. Yes, we are. And we're also working on how we can enhance that with a group of individuals. What are your immediate takeaways based on that report? It's actually hopefully not more. It's a continuation of what we've been trying to do, but we're trying to figure out how do we take it to the next level. How do we get more minority inclusion in the region? Our chair elect of the board is Kim Minke from Toyota. Kim loved it. And he's trying to help us to apply some Toyota principles as well on how we can get much more inclusion, economic inclusion for the minority community, small business community, but especially for the minority community. Okay. I personally would like to see a position from Commerce Lexington on their opinion. Our board did support that. Our board did support the initial draft, and we're trying to enhance that draft. Okay. We have taken it to our board, and we have talked about it. I'd like to see that come forward. As far as I'm concerned, I'd love to see that come forward, present it to council with the strategies of what Commerce Lexington will be doing. Yeah, that's a very natural strategy. And what I know Kim Minkie's points to us were we need to have measurements on it. time to measurements that we know we're making progress or where we've got to make more progress. Okay. When can we expect any of that to come forward? Tyrone is at a conference in Louisiana. I'll find out from him where he's at in that effort. He's the lead on that? On our end. Okay. And then Rebecca Ryan was phenomenal when she was here. I love hearing her speak. Again, any immediate takeaways based on her visit and she had some pretty impressive things to say? One of the things we were trying to do, and I think actually from the leadership trips that we've done from years past and the current ones, we're trying to make sure that people don't feel like when we get done, our participants, when we get done with those trips that it's over. We're trying to figure out how to get more and more individuals to take ownership and then to whatever their point of interest was or whatever best practice they came away with or things not to do, trying to get everybody to have an ownership in that so that it's not just seen as it's the council's job or it's Commerce Lexington's job. Bringing Rebecca back to Lexington was all about her being on the ground, having a chance to interact with you, with the tech sector, with others, people who are happy, those who are not happy, and trying to figure out how can we then take the points that have got us to 13th in midsize city, magnet cities, and then we can look at and analyze where we're at compared to all these other 12 ahead of us. and try to improve ourselves. So what we're doing now is taking the pieces and trying to put those into action plans, but also we're hoping that people here will, others, other groups, organizations, will take on the challenge of some of her findings in the report as well. Okay. I look forward to hearing back from that as well. I know that as far as a council member, I will be advocating for many of the things that she proposed through policy. So I would look forward to Commerce Lexington doing the same. And I think one of the frustrations that you all have, I think the community has, is that we have a lot of these efforts that go on, and then how are we following through on them afterwards. So when we talk with Rebecca in our ongoing conversations, we want to have implementation. We have to implement the things that we're coming away with, but we also have to come to a consensus on what some of those key things are and what priority order. Okay. I'm glad to hear that because we have heard nothing but just tremendous feedback. Yeah, it was great. I was out of town, and boy, we were getting an incredible amount of e-mails in. People saying amen. Yeah, she's powerful. And just to add one other thing, I was with a group of my colleagues, 16 of them in Denver, at a Ford Foundation Fellowship on regionalism. And her name came up, I would say, by a quarter of the group, that she's in their community or is just left after having done a similar benchmark study. Interesting. Yeah, it is interesting. One of the things that I talked to a couple of business leaders following the Minority Expo about debriefing and how we can do things, and I need to share this with the committee as well. But a couple of people specifically mentioned Commerce Lexington and felt like that Commerce Lexington, they expected less of a benign effort following the expo. They felt like they wanted something, a little bit more action. And that's why I mentioned the minority inclusion report, because that's in your hands. That's something that you have the ability to make, that ruling up and down, and it really does tell the personality, I believe, of the organization, depending on the way that you flow on that report. So I just wanted to report that back to you, that there are business leaders that are waiting for Commerce Lexington as the primary recipient of Urban County Government General Fund dollars for the purpose of economic development to really take a leadership role in the outcomes of that Minority Expo. And always, and I'm not looking for names, but always feel free to forward those kind of comments, criticisms. That helps us to be able to analyze and break things down as well. Sometimes we, and I'm not trying to point that issue out, there's just times where we've got so many things going that something can fall through the cracks for a later time. So just having feedback like that's very helpful. Yeah, I'd be happy to share that. Obviously, if they felt comfortable enough coming to you, they would come to you directly. Sure. So I'm relaying that because they've let me know that, and I think it needs to be said. That's fine. That's good. That's good. Thank you. Thank you, Chair. Councillor McCord. Thank you, Chair. Linda, let me ask you a quick question. Don't go anywhere, Bob. Let me ask this. Just something that was said kind of in passing between the two reports. On the unemployment rate piece, can it be seen that part of maybe the unemployment, when it decreases, is because people just have exhausted their benefits and they fall off the rolls? What I have been reading, that's absolutely correct. Now, mine is more of a national look, whereas Bob and his team have brought the very, very local look. But just on CNBC this morning, they were talking about that. And I think that's something I had not heard or thought about, but it does make total sense that you can track what's on the rolls. But if you exhaust your benefits over that period of time, then technically you fall off the rolls, and that may not actually lead to more jobs being created or found. That's correct. It's just you're not on the rolls. Okay, I just wanted to point clarity on that. The other thing I find interesting about the bar graph is if you look at the industries that are growing, it seems to be government is the trend. So maybe not the best place for there to be job growth. You know, one of the things, Bob, I guess the question that I have to you just from commerce-lexing standpoint is you're all strategy. You're guiding philosophy and what you all do. I know the strategic plan was done a number of years ago and so forth. Do you feel like, honestly, that it is working, that it is good, that it is solid? Yes. Okay. And, again, it's a very basic, straightforward plan that when we compare ourselves and we talk to other communities that it's hitting certain basic things that you're trying to do, trying to work with your prospects, your existing companies. In our case, technology-based companies working with UK in that partnership, but also the private sector. Can it be enhanced? We're always looking for ways to enhance it. And also we're looking at a way, and we'll be coming back to you with an idea about making sure we go back through our targets and rethinking those, relooking those. We try to do that every so many years. But at the next meeting we'll be coming back with a proposal on that. Okay. You know, one of the things that I had asked for a year or so ago, and I know we kind of got tripped up, was this reporting matrix. And there's a very specific reason why I asked for that is that there are other cities that use that, and it is a very easy document to compare to that how are we doing as compared to other places. So I'm very glad to see that that's in. I appreciate, Jenna, you giving me a call. You weren't there. Jenna, you giving me a call and let me know that that is in, and that's something that certainly I expect, and I know this body expects every quarter. A couple of very tactical things as far as this year the leadership visit is a first, which I think is a real, real positive with Louisville and Lexington going together somewhere and being interfaced. What, Bob, are your hopes for that trip? What do you want to see happen, and what can we as a body expect to come out of that as more than just the feel-good of that's never been done before? Let's go ahead and let's do that. That's a pretty good segue. This council, and I know, Jay, you've been very active in this, you've been working with the Louisville Council, Metro Government Council, and you're doing it because it all gets back to relationships. Well, we know that in the Commonwealth, if we're going to be successful, we have to come together in a way we haven't in the past. So our relationship with Louisville has really come together in the last many years. Again, this council deserves a lot of credit for that as well. The mayors connect, the councils connect, and the economic development and chambers are connecting extremely well. I would tell you that overall, I think one of the most significant pieces of the trip is going to be Louisville-Lexington's key leaders coming together and interacting like we never have before. Until you get, and more of our leaders get to know each other, and I mean really get to know each other, we're not going to be able to build those bonds of trust. And that is absolutely core. The other thing about Pittsburgh is that several years ago, when we were looking at where and we were looking at Madison, which is ultimately where we went, we also were looking at an international trip. But I will tell you, they came out, number one was Madison, number two was Pittsburgh. Pittsburgh has had to reinvent itself, and they've done it on innovation. They've done it on their downtown. They've done it by being very inclusive of all people, minority, women, all business. They've had to reinvent themselves. Now, they have some things we don't have. They have some very large foundations that provide a lot of money. But one of the things that they have done is they've been able to reinvent and be – They have a hard time keeping their young people, believe it or not, which is really shocking for us when we heard so many of the initiatives that they've started and created. But they're doing it because they're trying to do the same thing we are, recruit or keep at home. So I think you're going to find very general takeaways, but specifically in the areas of how the university, the community interact, and how they have reinvented themselves and using the technology and the innovation sector to do it. Well, and being part of that planning committee over the last four or five years for these trips, I would challenge all those on the committee, whoever we have this year, as to having some definable, as Council Member James has put, some very specific things, that these are our goals, that we are, these are the things we want to do. because I know with Rebecca we wanted to have this continuation in getting people not just excited while they're there, but actually getting them engaged in the process. So I would challenge that planning committee, whoever is serving on it, and you all as leadership of that to guide and direct that for GLI and for us. As we talk about some of the very specific things, you had mentioned Pachaccha, and I know that – You could probably say that five times more. Yeah, I've only been practicing for about three months. But, you know, I know that Pachacha is here only because Kent Hall sat down and wrote the application. I know that TEDx, we're a TEDx city as well because he sat and read about an 80-page application for that. So what is your role in that? Because I know Kent is really the one that has kind of led that charge and saw that that would be something good for us. What role does Commerce Lexington play? It actually all started with our committee called Intellects, and that committee formed based on a conversation that took place here in the council from Lexmark and Toyota. And they expressed to the council that they were having difficulty in retaining their best and brightest. So we formed a committee called Intellects, and Dan Kloiber, who was still at the time with HP, said the first thing he wanted to do was make sure we were having social venues for these things, which started Geeks Night Out. So we're now on year two with Geeks Night Out, and Kent Lewis is his name, and he's actually part of that committee. And his second thing besides Geeks Night Out was, let's do something else. I found out about this thing in Denver, Colorado. It's called Pachachach. So we're part of that planning team. We support it. We advertise it. We try to get the people there, help him organize the same thing with TEDx. It'll all be part of, and Rebecca Ryan already kind of blew this for us, but we're forming a technology month. And all those things we're going to kick off in April of 2010. Hopefully it will be geared around, bookended with creative cities to start, which a lot of you guys are working on. And then we'll have Pachakcha, TEDx, and lots of other things in the Geeks Night Out events. So it's all geared around making sure we're promoting Lexington as a technology base, not just to Lexington but to the world. So we're planning those events coming up in April. And they'll be ongoing throughout the year. But April we're going to try and do them all in one month so it might get us some national exposure. Councilor, I want to record your time's up, so if you could wrap up. Absolutely. I think that, you know, Rebecca Ryan said the other day, Buster's said it very well, and I would just encourage all of us in this room to kind of go with this sentiment. That is that sometimes we like to celebrate ribbon cuttings over grand openings, and we like to celebrate what we're doing, what we're thinking about doing, versus this is what we got done and here is how we're doing it. And so I think that's what this body needs to take up as well as our partners out in the community. Thank you. Thank you, Chair. Bob and Jenna, I just wanted to underline a point that Council Member James made, and that is that we need on the north side of Lexington, northwest Lexington, not only in old neighborhoods but also in our newer suburbs, we really need the kind of retail services that now our constituents have to drive long distances to find. And so I would hope that you would not only be receptive to those who call, but active in recruiting them. And I think that at her point, that making a study and analysis of, you know, of the needs, of the services needs of the, you know, of the districts, and then, you know, going out to try to find those who could profit by, you know, by serving them would be a great idea. So as I say, I just wanted to sort of highlight that point, because I think it is really needed in our area of town. Thank you, Bob. Thank you. Councilor Beard. Thank you, Chair. Bob, last year I think 15 of us, 14 of us I guess, 14 last year, 15 the year before I guess it was, we of the council went on the trip. Addison. What's Louisville's production been as far as their council is concerned? Do you know? I don't know. I just went to Indianapolis with them, and I wanted to say it was probably, I could be wrong, I could give myself a little bit of trouble, but I want to say it was maybe three, four, five. They're having a mayoral election, so there were a lot of candidates there, and there was a little bit of humor about that. But I think typically in the past, theirs has varied quite a bit. Now, also, the Louisville trip, it's by invitation only. So when they take $125, $150, you have to be invited, whereas ours is an open. basically first come, first serve, but we do have targets we try to meet as well. I'm just thinking of the interaction. If we don't have some corresponding individual to interact with, it's going to be a little tough. We have to go four-on-one or five-on-one. To our advantage. You know, there's a lot of things about the trips that are very different, a lot of things that are very similar. They're a little nervous because now as their community is finding out a lot more about the trip they do and about our trip. They have the issue where a lot more people want to join in. So we've got a lot of meshing, and Councilman McCord, I would tell you, there's been a lot of meshing going on trying to make this all work because we do have peculiarities between our trips, but we also have a lot of similarities, as you might expect. Thank you, Bob. Vice Mayor Gray. Thank you, Mr. Chair. Bob, thanks, and Jenna and the whole team, thank you all for joining us today. Councilmember James, the fellow that we brought in last year, his name is Kelly Cofer, and his company's name is The Retail Coach. I feel like I've been around maybe sometimes too long, But I remember a long time ago I had a guy who was a coach to our company. He was an Indian, not American Indian, but from the province and the land of India. And he was a brilliant man. His name was Maurice Mascarenas. And I remember when I was objecting when I was about 25 or 26, it wasn't long after my father passed away, but I was objecting really strenuously about using the word strategic or thinking about a strategic plan because it seemed really very sort of bizarre and difficult to get my arms around. And he pushed back on me and he said, with a thick Indian accent, he said, Jimmy, he said, the journey is the safest when the roadmap is the clearest. and I enjoyed talking about the sales that we'd already created and the business that we'd done in the last year and I really, really did not like Maurice upbraiding me about that. And also another piece of wisdom that he offered was he said when I was talking about the past instead of the future and talking about the stuff that we'd done, He said a plan is like the windshield. It's 100 times bigger than the rearview mirror. So he was saying to me, Jim, I don't want to hear about the rearview mirror. I want to know what we're seeing through the windshield. And I think that that really has context for us, because I think the real questions that we come back to and have for some time is, what's the windshield? How are you managing to a strategic plan? My own experience is that when that strategic plan is created and sort of set by the side, it's really meaningless. You know, it has to be managed literally on a weekly basis. What are the strategies? What are the goals? What are the tactics that we're chasing? Which are the ones that are really driving? And how are we measuring those? What's the level of accountability? And I think the yearning, the unmet anxiety, maybe the anxiety and the unmet expectation is, what are the strategies? And how are we chasing those strategies? and how are they adapting to a changing economy? For example, this issue that we've been talking about now for a year related to retail, how has the chamber or how has the economic development initiative adjusted and adapted to address the changing needs? So the strategies adjust or adapt. In fact, earlier the language is it's not part of our focus. It's not part of our focus because it hasn't been part of our focus. So my question really, Bob, is how are you managing to the strategic plan? What is the method that you're using to manage to the strategic plan? And actually, can you kind of forget strategic? That word has a lot of baggage associated with it, but just a business plan. How are you managing to the business plan, which would include adjusting and adapting strategies, goals, tactics? What we put together was our planning guide that in each of the key core areas that were our targets, how we need to pursue them. How we've adjusted is that as we have encountered difficulty with obtaining or making some of those objectives, or as the market's changed, or as the players in a market, or as we reviewed how we're marketing ourselves or where we're marketing ourselves, we try to make those, probably on our end, more subtle adjustments or large adjustments as we've gone along. but in the area of the retail it's something that and I'm not trying to create anger it hadn't been something we had been designed to focus on but what we try to do, Vice Mayor is adjust as we go along because the marketplace keeps adjusting on us and we're trying to make sure, for example, with site selection consultants they're one of the key groups we've got to stay in front of so we are trying to figure out better ways to do it One was with Advantage Kentucky with our two partners, Northern Kentucky and Louisville, and some great success. There was some risk there. Would Louisville gobble up? Would Northern Kentucky gobble up? Would Lexington gobble up certain projects? And so far, those things have worked. So a lot of what we've tried to do is, as we've gotten with calm companies, and we're not able to meet their needs, we've got to figure out how to meet their needs on opportunities of growth or issues of job loss. and it's a constant, just like in business, it's a constant adjustment and change. This is a question that this is really digging down into tactics a lot, which I suspect it would probably be better for us to address in the Economic Development Task Force meeting, and it has to do with the focus on site consultants, but that's something we can look at later. Thank you. Thank you, Mr. Chair. One of the things I think that might also help address what we'll be coming back to you next month is with a proposal of every so often we try to review, relook at, recalibrate, as I call it, our targets, who we're going after, why, and go through that whole exercise, but also interact with you about being a partner on how we go about doing that. Mr. Martin. Thank you, Chair. I just keep coming back to Destination 2040 because that's a huge community effort that was undertaken a number of years ago, and I don't think we're really quite geared up here in the city to really attack that. I think we need sort of a governing body to help sort of be the caretaker of 2040. That is a huge strategic plan that this city and many of the Commerce Lexington participated, hundreds, I guess, of other partners participated in. And I look forward to those efforts sort of being reinvigorated. And I know that Commerce Lexington is referring to Ascension 2040. And I think part of our Economic Development Committee, one of the things that we need to do is to sort of understand all the different aspects of what Commerce Lexington is going to do for us because, obviously, you can't take care of everything that the city is doing, nor are you expected to. And I think it's important for Commerce Lexington to have sort of clear guidelines from us as to what we're expecting you to do because, you know, I've got a pothole in front of some houses in my district, but I'm not going to call you on it. And so – but I think it is important for you all to have some clear guidelines about what we expect of the relationship and what is actually in the agreement between Commerce Lexington and the city. I think that – I keep going back to my understanding of economic development about making the pie bigger, about making – if money was water, we'd want a bigger pond. and how we divide up the water in the pond, where we send it to different places in the community, is one thing. But economic development fundamentally is bringing more money into Lexington from someplace else and increasing the amount of money that's flowing in the economy. And we can move it to different parts of our community, and that's an important thing for us to continually look at to make sure that we're serving all parts of our community and that we're doing the best thing, really best job we can for our citizens in all parts of the city. But fundamentally, economic development is bringing money into Lexington from someplace else. It's about making the pie bigger. It's about bringing in either having someone move it here by investing it from someplace else, either in the terms of building a new development on Angliana Avenue and bringing money in from California that was out there and now it's going to be here, or by creating new jobs, which I am a huge supporter of, having written the state's venture capital program. And so creating new jobs here from the great minds here in Lexington and the University of Kentucky at Transy, at BCTC, and to growing new jobs, creating new companies, creating new ideas, commercializing the ideas we have here. And so that we can actually make a product here in Lexington that we can sell someplace else and bring the dollars in from Europe or from China or from New England or from California. And once the dollars are here, we can figure out what to do with those dollars. And we can help our community sustain through hard times. We can increase the number of services we can provide. We can decide how we divide those new dollars up among different parts of our community to make sure that we're fair to all levels of folks in all types of circumstances. But what I want to make sure is that we don't sort of throw everything at Commerce Lexington because you can't do everything for the city. And so I look forward to a time when we get into our economic development committees where we can sort of more clearly indicate to Commerce Lexington what our expectations are and what your all responsibilities are. And it may be that we want to expand those, and we'd have to have a discussion about those. And to the extent that we as a city are not providing services that we need to provide, we need to encourage the administration to do that and to maybe reallocate resources within the city in order to bring in, whether it's for a particular type of specialist or a particular type of program that we're not funding adequately. So I just want to make sure that we don't try to make Commerce Lexington be all things to us, because there are many things that happen in our economy that affects the real bottom line of every person watching. There's many things that happens in the city that affects what their neighborhood looks like, that affects the amount of money not just within our city but actually within a particular part of town. And that is a community development thing that we as a city must embrace, and we need to decide whether Commerce Lexington is going to help us move money around from one part of town to another as opposed to bringing in money in from someplace else. So I appreciate your all's efforts. I appreciate Jenna and the whole crowd coming over, and thank you, Mr. Chair. Thank you, Council Member Martin. Any other comments or questions for Commerce Lexington? Vice Mayor Gray. Yeah, real quickly. I think what Council Member Martin had to say is really insightful, especially in particularly the last part because, you know, it's like a real challenge, huge challenge. Economic development is often, you know, like a crystal ball. And this notion of being all things to all people and the expectations of being high, and especially when there's economic issues on the front burner for a lot of people. And I think that really does illuminate why, as much as anything, the strategy is so important, knowing where we are going and why we are going there, and that that message can be conveniently articulated and expressed by all people in leadership roles and positions in our community. We need to be able to understand that. The people around this horseshoe need to be able to understand that. It is so clear and so compelling that we have that understanding, and we can then walk the talk. And so I think that represents the urgency of it. It's really awkward. I don't think anyone wants to scapegoat and to claim against for performance issues. What we're trying to find is the gravitational pull and the understanding where we're going, why we're going there, and then the sort of data that supports that. Thank you, sir. Thank you, Bob. Thank you, Mr. James. Thank you, Chair. I want to agree with you, Vice Mayor Gray, and to say in no way is it ever, from my intention of asking questions, to criticize a particular organization is to talk about the holistic view, and I think Council Member Martin is right. It's a combination of community development and economic development together. So when you have a community development plan that says we need such and such in economic development, it is then when we stand up and say we need this in our economic development world in order for it to happen. And fortunately or unfortunately, all of our money is going to Commerce Lexington for economic development. So they are, at this point, the only entity that is to fulfill that role. So that's what we got. And unless we want to do something different at budget time, this is the opportunity to talk about what our economic development needs are in conjunction with DDA, planning, neighborhood associations, and everybody together. So I hope that it's never thought that, you know, all of the burden is being put. It's a blessing. It's not necessarily a burden. It's a blessing if you're given that, but if you're not going to be able, if that's not your focus, if your focus is not local retail, but the small area plans for East End and for Central Sector are calling for local retail because of the way that our neighborhoods are developed and because of the way that they're built currently and the way that they're growing, somehow we need to respond to that. Otherwise, the money, the time, and the approval of the Planning Commission, it doesn't go anywhere. So I think it's our role to connect all of those things, and this is through economic development, a.k.a. Commerce Lexington, since we only have one economic development person on staff for the city, this is what we got. And so I will continue to encourage that. And my question, I do have one question before I stop talking, is, Mr. Quick, what do you need from us to know that we are interested in pursuing, at least some of us, an option for some local retail to be part of economic development for Lexington? I think the most challenging thing that we deal with is, and just to be very candid, we get a lot of different opinions and ideas of what we ought to be doing from different council members, and it's really hard to know what the council as a whole wants. at times. What we would need from you is to be very clear and concise to us is these are the things that we need for you to do. A lot of the interaction we have with you is individual where you say I need you to do this or I need you to do that. And we hear you, but it gets down to a situation where we've got so many resources, so many hours, and we're trying to figure out how do we best fulfill what that mission that you expect as well that you have. We have private investors that, I mean, they just want a bigger economic pie created and they want a higher quality of life. How we get there is challenging because everybody has different ideas and opinions, private sector as well. We just need a very clear, crisp direction. Okay. And I don't want to make anybody angry either, but you mentioned that you didn't know that retail, local retail was a path that we wish you to take. And after the presentation from the gentleman, Kelly, the software that he had that showed how to do that someone from Commerce Lexington at that meeting said we have that technology, we can do that in my follow-up meeting with Commerce Lexington that I had one-on-one I was told, oh no, that wasn't what we thought it was we actually don't have that and I got that relayed from our economic development person for the city as well that it wasn't what they thought it was so we couldn't provide that. So I made it very clear that local retail, and that was, I don't even know if that was last year. That could have been the year before when he presented it to us. So that's the only thing I want to say. This is not the first time it's been proposed, but it's not the first time I've been told that that is not your focus. If it's not the focus, yet it's a need, then I think we as a council need to figure out how do we get a need fulfilled if that's not something you're going to do. No offense to you because you have your priorities, but how do we as a council establish priority if someone's not going to do that? Thank you. Councilman Martin, we only have about 25 minutes left in our meeting. We've got a very important presentation we need to hear from fire, so if you could be brief. I'll be quick. Thank you. I look forward to the University of Kentucky coming over and talking, maybe making a presentation about its economic development programs there because it was a really terrific day at UK listening to their presentations. I keep going back to Destination 2040. You know, I must have said it a couple dozen times in our meetings, but I just don't hear many other people talking about it. And I know I'm still the new guy around the circle up here, but I don't know why it's not getting any traction with the council. And so it is – I read it and I just thought it was just fabulous. And, you know, it was a lot of things in there. And as far as Vice Mayor Gray's performance issues, you know, I'm sorry, but Jim Gray is always going to be a rock star to me. When I was at Economic Development, I mean, he was really a leader of helping the Economic Development Cabinet gear up towards strategic planning. And so I just think that is an effort that we should not waste and that we should not stick in the drawer. and it is not a final document, nor would any really good strategic plan be a final document. We should continue to work with it, implement timetables, and work, you know, allocate resources to pursuing that. Thank you, Mr. Chair. Thank you. And in 26 words or less, vice versa, one less. It really is just a ditto. And I think the takeaways from this are that, you know, in managing a strategic plan, we would take the data, for example, from this meeting or from the meeting on retail. That's part of that strength, weaknesses, opportunity, the SWOT analysis, you know. What Doug is saying, what Council Member Martin is saying, you know, becomes part of managing that strategic plan on a day-to-day basis. New data points, bring them in, work them, keep it on the front burner. Thank you. Thank you. That was more than 26 words. Sorry, Mr. Chairman. You owe me. Mr. Quick, thank you, sir. Thank you. Appreciate it. Thank you all. Appreciate it. Okay, next on our agenda is our fire budget overtime presentation, and I welcome to the mic, I assume, Chief Hendricks and company. Thank you all for waiting. We know your time is valuable, and we appreciate you waiting. Chief Hendricks, welcome. Not a problem. Thank you, Mr. Chairman, members of the committee. Pleased to report good news. Let me say that up front. And what we will show is a little more detailed accounting of what that news is, and I'll be happy to answer questions as may come up. Okay, we were asked, as you know, by counsel to keep them apprised. of how our overtime situation was getting. This follows last spring, which in addition to being a severe problem for the government, was certainly one of the most difficult economic times for our division. Due to starting the last budget cycle at a minus 19 staffing without taking any companies off duty and finishing up the year at a minus 41 staffing without taking any companies off duty, We ran out of overtime in, I believe it was April. And you all graciously filled in that void so that we were able, again, without taking any companies off duty, closing any houses, we were able to finish the year. But you also wisely required that we give you an accounting of what's going on. So here is our quarterly report of that overtime situation. Hillary? The mayor and his proposed budget assumed that we would be with a minus 27 staffing and knew that we would need additional money in overtime to cover that for a total of $3.4 million. As you can see there, represented by this entire pie chart. We knew, based on our projections, based on our experience, having run out with what we did with the minus 19, that at a minus 27, we would be in just as bad a shape, if not worse, by perhaps the same point in this fiscal year as we were in that, or perhaps even earlier. The other thing that we were able to show and demonstrate to the council was that we could hire approximately 2.3 people for every position we were trying to fill on an overtime basis. I feel wisely the council approved the shift of a portion of that overtime monies to full-time hiring of full-time staff. And that's exactly what we did and have done to this point. That enabled us by moving $1.3 million from that budgeted overtime to the full-time hiring and employment of staff. We were able to hire 41 people who continue to be in recruit class. We were only able to get 14 of those in time to start in July based on human resource and the hiring process. We were able to start 27 more in August. And those graduation dates, those accelerated graduation dates, which I'll comment on a little further down the line, will be November 5th and I believe January 5th before we reap the full benefit of those folks. So what you see there, again, represented by this pie chart, is the full $3.4 million. To the right or in blue you'll see the money that we used, 39% of that, to actually hire FTEs, full-time employees. And the other two categories, we have broadly divided those into backfill, which means that we have to fill a position on the line when the people are not available, and the other into events and training. Events in training would include such things as mandatory paramedic training that cannot be done due to scheduling during the workday, and events such as the Bluegrass 10,000, the Roots Festival, events such as the WEG test events, and that sort of thing. So 900,000 to the events and training, 1.1 to backfill. There will be a slight discrepancy, I suspect. Our system, our software system, is the ASTRA system that's been utilized by the division in excess of 20 years. Obviously, we're changing over to PeopleSoft, and we understand that there's a very slight calculation. Again, I'll explain that in a little bit down the line because there's a slight discrepancy in the amount that we estimate. To straighten these out for you, on the left you see actual dollars, and at the bottom are charted pay periods ending on those dates. If you divided those out evenly, what we were budgeted, budgeted and this takes us up through January when we can get the second of that recruit class out, this is the way it would break out if they were divided evenly. I must say there's also a difference there in, you see, November 11, I believe it's 03, 08 perhaps as far as the pay period is concerned. That simply is when the first class gets out. We get those 14 people on the line, and then at the end of the chart would be when the 27 additional folks were to come out of training. What you see experientially is charted in red. In the very first column, that's somewhat misleading because there were actually only five days of the pay period included there, July 1st through the 5th. So obviously the summer months, when people like to take off and use their benefit time, is obviously where those first three columns would find themselves. When school started, we got significant relief. As additional minimization of utilization of personal time off continued through September, we found a very low spot. We know experientially that September and October are our least backfill overtime periods, so we'll see that as probably a steady incline from this point forward as well. What you'll see in the future as we begin to get toward November and December, of course, is the overshadowing of three holidays, and things even as simple as hunting season will come before us. This is Kentucky after all. And we do know that it affects the interest that people have in taking off. So we will see a steady incline as we get up through December. If you were to look at this, again, incrementally, or as we are adding to that each time, You can see that we are under, there was actually only one of those pay periods where we exceeded that in terms of backfill. I can't explain that specific pay period to you, but it had to do with there were more people interested in taking off during that pay period than in the others relative to our projection. Training events, this is a similar kind of relationship. the blue being projected, the red being the actual experience. I know the very first peak that you see there is a paramedic in-service, which can run into a great deal of money. And the one probably most recently, there was some additional paramedic training that would be considered an in-service and categorized the same way. So you see we have a lot of peaks and valleys, but we are in relatively good shape overall. In terms of events and training, the running total, again, is under for all of the pay periods. Overall, this is the number I think that you'll like to see the most. For our first quarter, we are about $310,000 under our projected budget. I don't want you to get too excited about that because there is the H1N1. There are many other things that can fall into that category, but that is certainly an important point at which to be. In terms of that remaining $2 million that I spoke about to begin with, once the hiring money was used, this shows you to the overall period about where we are at this quarter, and it breaks it down again into events and training and backfill. So the same numbers, again, just represented a little bit differently. In summary, as we proposed, excuse me, as the mayor proposed, $3.4 million. We requested to split that out so that we could hire people instead of paying so many people on backfill. We did that, and thus far we've been successful in both categories of backfill and events and training, at keeping those under our projected needs. There is another slight category there that we break out as well, and that is many times the companies will be out on another run or out past shift change, So it's unintended over time, but rather than have them go out of service immediately, they are perhaps in a hospital still caring for a patient or they're still at a scene and it takes time to change out the personnel. As I said, there was a slight discrepancy when we compared the Astra version versus the PeopleSoft version. We found there was about a $50,000 discrepancy. We think two things probably account for that. PeopleSoft is able to account for this day by day by day. We are using pay periods with the Astra software to make that. The other thing is the two dates that were used were very slightly different. So in the overall scheme of things, in a $2 million budget world, we're not terribly concerned about the $50,000, especially when it appears that if PeopleSoft is in fact more accurate than our projections, it's 50,000 to the good. So just a little disclaimer about, and what it essentially says is that we can't predict the future, and we certainly know that there are things that may befall us, including the flu for which the President has declared the national emergency that could affect what it is that we're doing here. I'd be happy to send questions. Thank you, Chief. We do have a couple of people signed up. Councilman Feigl. Yes, ma'am. Thank you, Chair, for indulging me since I'm not a member of the committee. I just wanted to bring up an issue that had been presented to me, and I have talked to Commissioner Bennett about it. I see in the overtime budget that you have funds there designated for special events. But it's my understanding that some of those special events are being manned by on-duty firefighters. Is that correct? Yes, ma'am. I anticipated this might be a question that would come up. So we've broken these out. I have a... Yes. If you would, please. This gives a pretty clear depiction from this entire budget cycle to date, where we are in terms of special event, or excuse me, event coverage generally. It not only denotes what those events were, None of them will come as a surprise to you, I don't think. But what you will see is how they are covered. And what I would direct you to is the last two columns, because that's by far and away that we do most special events. If there is not a city component sponsoring the event, we bill for that at an agreed-upon rate. And those are in the final column, reimbursed over time. And you can see those are typically two-person first aid calls or, in some cases, the bike medics and so on. And that's pretty much self-explanatory, I would think. Working backward to city event over time, these are events that are city-sponsored and do not have anybody particular that we could bill for that. Obviously, the 4th of July, the Patriotic Concert, Bluegrass 10,000, and so on. And so those should be pretty much specific. On 11 days of this period, which is taking us from July the 3rd through October the 10th, you can see that we did use no more than two companies ever that were considered on-duty companies. And I don't have it broken out, but I can tell you pretty specifically the number of hours that a company was, quote, out of service for that time. In the combat challenge, there was one engine company which was utilized to supply. It's the Firefighter Combat Challenge used to supply water for the event. It was a downtown company that was utilized, and they were technically out of service during that time. The EMS unit that was used there and was changed out, and in most of these cases, where it's a longer event, the companies were changed out. The EMS unit could easily have been pressed into service. There were plenty of folks on scene that could have provided the continued first aid coverage. We just thought it best to have a unit there on scene. With the picnic with the Pops, you see listed there on the 21st and 22nd of August, that was a three-person EMS crew. two of those five that are listed there are civilians and would not have robbed from our existing line personnel. The Roots and Heritage Festival, probably six hours the first day and two 12-hour events or two 12-hour days for the next portions of that, in which case, as I understand it, there was one engine company down there. Again, that engine company could have been broken loose for perhaps if there were a second alarm going on somewhere else in the city. That company could easily have been broken loose and placed into service. The U.K. football games, as you can see, we do bill U.K. for those. That's a risk management decision that we made as an administration that when you have 70,000 or between 60 and probably 80,000 for some of the games, people congregated in one area of the city that has very limited access into and out of for about a five- or six-hour period, that it's probably best to utilize, to have some manner of meeting the needs, the emergency needs, on a more direct basis by having crews on site. So in those cases, we did have, in some cases, a cart that was equipped not only with first aid equipment and fire extinguishers, but also we had an engine company on scene, and those personnel, again, were rotated on and off. As I calculate, the estimated number of hours for all of those 11 days events, we're only talking about 95 hours for the entire three-month period. Okay, my follow-up question would be, traditionally, when you've manned these special events, has it been through overtime? Yes, ma'am. And so we're cutting overtime now by using their on-duty firefighters to man the events. And does that in any way reduce the response time in the event that there is a fire in a neighborhood where that on-duty vehicle is not there at the fire station? I suppose it could. I'm not believing that it necessarily would. The areas that we utilize are areas that have relatively close coverage, particularly the downtown companies. Engines 1, 4, 5, and 6 are placed not only for the proximity for insurance ratings and that sort of thing, but also due to the overlap and the run volume for a downtown area. What we are, again, managing the risk of is as likely or more likely to be a significant event in and amongst many thousands of people versus the event taking place particularly near a specific fire station. Okay, and tell me why we're not using overtime for those events? Why are we not bringing in firefighters on overtime for those events? Because we are doing our very best to stay within budget and to manage our overtime. Okay. Thank you. Yes, ma'am. Any other council members have any questions in regards to the fire overtime budget? I have one follow-up. Chief, we had on the recruit classes. I know we hired one in July or started one in July, end of August. Correct. One started July the 5th. They will graduate November the 5th, next Friday. I hope you all have received your invitations. We look forward to everybody being there for that graduation, and certainly we look forward to them being online. The other group of 27, now down to 26, regretfully one resigned last week. Those 26 should join us in the first week of January. Very good. Anything else for Chief? Chief, do you have anything else? Vice Mayor Gray. Chief, can you tell us a little bit, how does that new class relate to the number of firefighters who are exiting? That's a very good question, Mr. Gray, and your point is, as I take it, is very well taken. We have the 41 people. We're already too short. We've had one resignation and one retirement in the very recent time since we started that class. So we're already at minus two. We're down to 543 total at this moment. And we anticipate we've got three more that are out and have applied for disability pensions. We anticipate that would take us to five by the time the second group gets out. and we're estimating somewhere between 8 and 10 personnel leaving on service retirements in the early part of January, which is the optimum time for those folks to do so. So we'll be at about a minus 15 by mid-January. So the net is minus 15? Correct. recruits net of exits, right, of retirements and planned unexpected. Right. So the 40 that we have minus the 15 will still be a negative number. We're running out of time, Chair. I think it would be useful for us to hear maybe a report sometime soon on what the plans are for the World Equestrian Games, what sort of ramping up and planning is, I don't know that we've had that report, have we? The public safety ramp up for the games? Yeah, public safety. I had it put down for a November meeting for police and fire to kind of see what the thoughts are going forward, because as we prepare for next year's budget, that's going to become a major issue. Thank you, Mr. Chairman. You're way ahead of me. Thank you. Anybody else? We're at one minute left. Chief, thank you. We have two items on the agenda.