# Budget & Finance Committee - August 28, 2007 > Auto-transcribed civic record · Committee · August 28, 2007 - **Permalink**: https://meetings.lexingtonky.news/meeting/114 - **Source video**: https://lfucg.granicus.com/player/clip/114?view_id=14&redirect=true - **Date**: 2007-08-28 - **Body**: Committee - **Last revised**: February 1, 2026 - **Length**: 4,619 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude Sonnet. Speaker labels and 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 convened on August 28, 2007, at 1:00 PM with Dr. Stevens presiding. The committee addressed four agenda items during the session, focusing primarily on informational updates and financial reporting related to the city's fiscal operations. Three items were presented for informational purposes, including updates on FY 2008 debriefing topics, a report on FY 2007 General Fund Capital Improvement Projects, and a status update on the Lexington 2015 Financial Study. One agenda item regarding tax relief for private neighborhoods paying property tax and KU for street light maintenance was tabled for future consideration. No formal votes were taken during the meeting, and no public comments were heard. ## Attendance The following committee members were present at the August 28, 2007 meeting: • Dr. Stevens • Jim Gray • Linda Gorton • Chuck Ellinger • Richard Moloney • Jay McCord • Ed Lane • Kevin Stinnett • George Myers • Don Blevins All committee members were in attendance. No members were reported as absent or arriving late to the meeting. ## Appointments The Committee took action on one appointment during the August 28, 2007 meeting. • **Mary Pfister** was appointed to the position of Director of Accounting. The appointment was processed through the Committee's standard procedures for personnel matters. No additional details regarding the appointment timeline or specific responsibilities were provided in the available meeting materials. ## General Update on FY 2008 Debriefing Topics [timestamp: 00:00] Commissioner Koch provided an informational update covering three key operational areas for the upcoming fiscal year. The discussion focused on the implementation of the budget module within the STARS system, which represents a significant technological advancement for the organization's financial management capabilities. Commissioner Koch outlined the current status and expected timeline for this system integration. Additionally, Commissioner Koch addressed the ongoing management audit being conducted by Management Partners. This external review is examining various operational aspects of the organization to identify potential improvements and efficiencies. The Commissioner provided details on the scope of the audit and anticipated completion timeline. The third major topic covered was the Capital Improvement Planning process. Commissioner Koch discussed the framework and procedures being established to better manage and prioritize capital projects moving forward into FY 2008. This agenda item served as an informational briefing to keep committee members apprised of these important operational initiatives. No formal action was required, and the update was provided to ensure transparency and maintain committee oversight of these significant organizational developments. The presentation allowed committee members to understand the current status of these three critical areas as the organization prepares for the new fiscal year, establishing a foundation for future discussions and decision-making related to these initiatives. ## FY 2007 General Fund Capital Improvement Project Report [timestamp: 00:00] Mr. Jim Deaton presented an update on capital improvement projects funded through the General Fund for fiscal year 2007. The presentation focused on providing the committee with current project status information and outlining the administrative processes for ongoing project management. Deaton discussed the quarterly reporting system used to track capital improvement project progress and expenditures. This reporting mechanism allows the committee to monitor how allocated funds are being utilized across various infrastructure and facility improvement initiatives. A key component of the presentation addressed the reappropriation process for capital project funds. This process enables the city to carry forward unexpended capital improvement funds from one fiscal year to the next, ensuring that multi-year projects can continue without interruption due to budget year transitions. The agenda item was structured as an informational discussion, allowing committee members to receive updates on project status and understand the administrative framework governing capital improvement spending. The presentation provided transparency into how the city manages and tracks its capital investments using General Fund resources. This quarterly update serves as part of the city's ongoing oversight of capital expenditures, ensuring that approved projects remain on track and that any necessary adjustments to funding or timelines can be identified and addressed in a timely manner. ## Discussion on Tax Relief for Private Neighborhoods Paying Property Tax and KU fo [timestamp: 00:00] Council Member Kevin Stinnett led the discussion on agenda item 3, which addressed tax relief issues for private neighborhoods that are paying both property taxes and Kentucky Utilities (KU) fees for street light maintenance. Stinnett outlined concerns regarding the financial burden on certain neighborhoods that are being charged twice for street lighting services - once through their property taxes and again directly by KU for maintenance costs. This double taxation issue affects private neighborhoods where residents are responsible for maintaining their own street lighting infrastructure while still paying municipal property taxes that typically cover such services in other areas. During the discussion, Stinnett acknowledged that the matter required more detailed analysis and research before the committee could make informed recommendations. He noted that additional time was needed to properly examine the scope of affected neighborhoods, the financial impact on residents, and potential solutions that could provide equitable tax relief. Rather than rushing to a decision without sufficient information, Stinnett proposed postponing further deliberation on this agenda item. He suggested that the committee table the discussion until November, which would allow staff time to gather comprehensive data on the issue and develop potential policy options for consideration. The committee agreed with Stinnett's recommendation to delay action on the tax relief proposal. The agenda item was officially tabled, with plans to revisit the matter during the November committee meeting when more thorough research and analysis could be presented to inform the committee's decision-making process. This postponement ensures that any eventual policy recommendations regarding tax relief for private neighborhoods dealing with dual street lighting costs will be based on complete information and careful consideration of all stakeholders involved. ## Status on Lexington 2015 Financial Study [timestamp: 00:00] Commissioner Koch provided an update on the Lexington 2015 Financial Study during the committee meeting. The discussion centered on the formation of the Lexington 2015 Commission and the engagement of Management Partners to conduct the financial analysis. Commissioner Koch outlined the current status of the study, explaining how the Lexington 2015 Commission was established to examine the city's long-term financial outlook and planning needs. The commissioner detailed Management Partners' role in the comprehensive financial study, which appears to be examining various aspects of the city's fiscal health and future projections through 2015. The agenda item was presented as an informational update, with Commissioner Koch serving as the primary speaker to brief the committee on the progress and current state of the financial study initiative. The discussion provided committee members with insight into how the study was progressing and the involvement of the external consulting firm in analyzing Lexington's financial position. This update represents part of the city's broader effort to conduct long-term financial planning and analysis through the Lexington 2015 initiative, with Management Partners providing professional expertise to support the commission's work. The committee received this information without taking any formal action, as the item was designated for discussion and informational purposes only. --- ## Full transcript A quorum is present and the August meeting of the Budget and Finance Committee will be called to order. Our topics today are more for information than they are for any decisions to be made unless motions are forthcoming. So we'll start off with a general review of the topics that were selected during our budget process for consideration in our proceedings and in our processes. And Commissioner Coe is here today to help us with the ones that she has been assigned or taken responsibility for. Commissioner? Thanks. Unless you really want me to, I wasn't going to go down through each individual item today because there are a number of things that are now kind of grouped together under a completely different process than when we started first talking about that long list that came out of the original Committee of the Whole. But let me run through my list and then if you have questions about anything on that spreadsheet then we can back up if that's okay. First of all, we have made a decision to move forward with the implementation of the budget module in STARS. Most of you know that we had implemented financials or a lot of the financial piece, but the budget module itself we had not implemented. We are moving forward with that implementation and expecting that to be available early January so that we could use that module for budgeting in the next budget cycle. So one of the things that we'll be doing, and we really just made that decision in the last week or two, we kind of had some timing issues that we needed to work out. What I would like to do in terms of reporting, because a number of the issues that you raised about the last process was about the report itself, and we're going to work with the folks, with the Metaformers folks, to pull some things out of STARS as we move forward with this implementation and bring those reports to you to see if they work for your purpose before we get to the end of the implementation. So we will be asking you along the way for report review. I don't have anything right now because, of course, we don't have any data loaded into the system or anything like that, but as soon as we get to the point that we could generate a few reports, we will bring those to you for format. So we will be looking at using the STARS system to do our budget for the 2009 budget. Also, some things that are happening that would affect the long list is that we have employed management partners to do a management audit of government. There are a number of items on your list that I've passed along to them so that as they do their interviews and bring forward recommendations, they can have your list and their recommendations all together. They've done a lot of work in a number of cities around the budgeting process, so they will be bringing to us best practices. I think those things will help us in the determination of how we want to budget for personnel because certainly we've had some issues around that, and I can never even remember the name of it, but basically it's a personnel contingency calculation. So that and the fund balance, and I expect management partners to be bringing us recommendations on both those issues. In addition to that, the management partners is working with, will be working with the folks that will be appointed to the Lexington 2015 Commission that we've talked about, the finance group, some of the council members and some area businesses and other folks to look at our processes and what we can do to improve the efficiency of the financial reporting system and also look at what our revenue is going to look like about 10 to 12 years out and how we deal with that. Management partners has already agreed to handle the research end of that particular project, so we will be working with them on that piece. And the mayor will be making appointments to that commission in the near future, and that will be coming to you. We are moving ahead with the capital improvement planning process. That was part of what was in your document. I have my intern, I think most of you have met, Nathan Phelps, who's been working all summer on pulling together information about what other people do, other cities do in terms of capital improvement planning, has met with the folks from Louisville and Jefferson County to look at how they handle things and is also working with management partners on best practices in capital improvement planning. So while we're still planning for the planning, we will be moving that process forward in the next few weeks. Nathan's also working on some of the benchmarking activities that we talked about in our last meeting. He also is working that benchmarking. We're feeding that information to management partners so that we can pull all that information together at one time also. You had inquired about a retirement payout and what we might be facing with the legislation changing or actually the rules changing by statute January of 09 for our folks who want to retire at that time. We have run those numbers, but actually I need to do some more work on that before we go any further. Certainly it's one of those things that will have to be on our list as we enter into the 2009 planning for the budget, because we know that there is that chance for some rather hefty payouts and also for the fact that we might be losing that much experience from government at one time. Those are huge things that are looking at us that we will have to plan for as we move forward. Finally, you had asked about an actuarial analysis for the Police and Fire Retirement Fund. We have that scheduled to be presented to Council on September 18. The folks from Kavanaugh, Mr. Kavanaugh with McKay Shields, who has done our work, will be with you all on September 18. So, if you have any other questions about progress or lack thereof, I'm more than willing to answer any questions you might have. Thank you very much, Commissioner. The fourth thing on our docket today is the finance study. You mentioned several things about that. Do you want to add anything else to that? Just one minute. Let me look at your report. You can finish that one. I think what I all I was prepared to report, really, is that we're working on trying to get the appointments together. This is going to be about 15 people? That's what we're shooting for, 12 to 15. I think if it goes beyond 15, then it's just going to be unmanageable. But it would be people from the government and the Council as well as from the outside? Yes. Absolutely. Yes. And I'm beginning to contact people. We just, you know, we want to make sure we have a diverse group that covers a lot of the different areas of the county. So, we're trying to make sure we have all that in place. Some people who particularly have radio talk shows think that any time you have a financial study group, that means only one thing, and that's we're going to raise taxes. That's right. But this will be more comprehensive than that, I take it. Well, it's certainly I don't think the role of the group is to look for ways to raise taxes. It's ways to use the money that we generate more efficiently. And is there another way to structure our taxes for more benefit to the community? Okay. Thank you. Are there any questions for the Commissioner? Thank you. The second thing on our docket is a report from Mr. Deaton and Ms. Underwood, who have been working with us, too, on a general fund capital improvement project. Mr. Deaton. Greetings. One of the requests that we picked up during the budget process was a question about we deliver money to a project and you wanted some timely updates on the progress and whether it was done or not. The information that's contained in here is one of our initial cuts at getting the information back from the divisions so that we can start doing a quarterly report to you. It is not complete. I need to say that right now. We have not received all the responses. There are lines in there to say whether it was completed at year end or what the status was or if they had any other notes, and we're still receiving those back from the divisions. And we want to expand this to include prior projects and then make sure that we get in there the 08 projects so we have an ongoing report that we can do. And that's about all I have right now, so I can answer questions. Can you expand a little bit about what's in our packet and tell us what these documents tell us? On page 5 is an overview or a recap of the capital projects as we were able to determine them based upon particular account numbers for the fiscal year that will end on June 30, 2007. This report was run about a month ago, and there's been other activities, closing entries, items changing as the accounting department finishes up June 30, and so these numbers possibly could have changed in the meantime. So on page 5 and 6, it just gives you a big overview. 7, 8, and 9 is another view of that overview. And then you get really the crux of the reporting that we want to really concentrate on. It starts on page 11 and goes through page 32. And these are the items that will go out to divisions. In this particular case, on page 11, this item would go to your administrator of the council and Jerry Southers, your administrative person there, and they would help us to gather that information on those particular items, whether they were completed in progress at the end of a fiscal year. You can look on page 13, and you can see two examples where the first line item for $15,000 was not started and it was not completed at the end of the fiscal year, and then there's a note. And we want to continue gathering these, continue updating these, so that when we present this to you on a quarterly basis, you'll have a history of what's taking place and what's happening. Okay, thank you. Mrs. Gordon has requested to speak. Thank you, Doctor. Thank you very much, Jim. I appreciate this information. I had a couple of questions, and I don't really want to belabor all the details here in this meeting, but I did want to ask you a couple of things. On page 11 on the council office capital improvements, is the account title Construction Street Well, I guess I need to go back. Is this an accounting for the $100,000 capital money that council members had? Yes, this is the remaining budget. You started with $100,000. Yes. It went through one fiscal year, brought forward the budget, the expenses to there, and on June 30th, the ending available budget. Okay. So we're slowly whittling it down. Now, is Construction Street simply, was that simply selected to encompass everything? Because some of these weren't street projects. Yes. It's just, it's like, you should consider it as a holding account number that we're using it to control and reconcile to. Okay. And when will, some of these projects were not able to be completed in the fiscal year, so when do you anticipate the reappropriation of these monies? The reappropriation will take place when the accounting department and Tina Cole, Commissioner Cole can probably address that, the timing of that. When they have completed their preliminary closing of the books, we will then have an estimated fund balance and bring forth information on reappropriations. Okay. I know some of these are specific projects in neighborhoods where the neighbors have had to front money, and so can you give us, and I know that reappropriations won't just apply to this category, but can you give us a more specific idea of when we might expect to see the reappropriations? I wish I could. We hope to do our first soft close right after Labor Day. Okay. But I need for you to be patient with me. I don't have a director of accounting. And we are really, really struggling with closing entries, because no one in that department had done closing entries except the director. And, I mean, I have people working night and day, and, you know, I would hope by mid-September that we would have a fairly strong number. Are you, well, tell us about the director of accounting. Are you? I have one that will be coming. It is in process. I have someone who has accepted, and the name will be coming to you through the normal process. I guess it's fine to tell everyone. Her name is Mary Pfister. And you may remember she was, she's right now the chair of the LexTran board. She's controller at Eastern Kentucky University, has a really, really strong background. And I think she's going to fit right in. She's excited about coming. In fact, she sent me an e-mail this morning. She said that her coworkers were asking her to wipe that grin off her face, because she's so excited about coming here. So I look forward to her. She plans to start work on October the 1st. Oh, okay. So we have another month. She had to give 30-day notice. I see. Okay. But she's going to be offering assistance as she can prior to coming on board. Okay. Well, that's good news, then, that at least we know we have someone coming. Yes. Okay. Very good. Thank you very much. Thank you, Jim. Thank you. Mr. Blevins. Thank you, Chair. A couple of quick questions. The first one is completed by year end. There's a column here. What year are we talking about? Fiscal year, calendar? Up in the upper left-hand corner, it says as of June 30, 2007. So this particular information would be as of the completion of that fiscal year. Oh, I see. So, okay. This is not projected into the future. This is as of that date. Remember, this is just the first cut. We will be adding 08 information in here. We will be going back and trying to pick up existing one of the requests out to divisions. Give us a list of what you, your projects from prior fiscal years that you're still tracking money for. And as we get that, we'll be expanding this information. I want to follow up on what, thank you, by the way. I want to follow up on what Councilmember Gorton was leading to. The completed projects, some of them have funds remaining. What are we going to do with those? In which, you're talking about in the council's office or in other ones? I was just flipping through and saw a couple. I can't find a specific one. But there are completed projects with funds remaining. How are we going to clean them? Those go into the fund balance available and are reallocated. Right. We've already done that, or that's part of the close that you're in the process? That will be part of the close and part of the upcoming process. Good. That's what I wanted to hear. Thank you. Okay. Thank you, Mr. Blevins. Mr. Stennett. Thank you, Doc. I've got a question going back to Linda's comment about the actual capital projects for council. If we have a project that has been completed over the summer months and the vendor needs to be paid, we don't have time to wait until November. I mean, here's work that will have been completed for five months if we wait until November. How do we get them to cut a check out of this capital money before we reappropriate it? Is that possible? If there's already been a purchase order out there, they wouldn't have been able to do work. So vendors are not going to wait for their money based on our closing. When that project was established, there were purchase orders cut. So as long as there was a purchase order there before June 30th, we're going to continue to write checks to vendors as they submit finished products to us. That's not how it worked with the capital money? And money was, in other words, no PO commission. And you may not have known this for some of the projects. And this is reimbursement to PTAs, to neighborhood groups for work that was completed. And they submit us the bill. And once they submit us the bill, then, you know, our obligation as we've already passed on council by vote is to pay that bill. Yeah, if we receive a bill that's approved by the council administrator or whoever approves in your office, we pay it. Well, that's not what I've been told recently through the capital process. So if you could help us. I'm sorry. No, it's not your fault. I understand. But if you could help us figure out how do we get these vendors paid, because I have an outstanding bill from July that still hasn't been touched. And we need to get some of these vendors paid because they're quite upset, as you can imagine. Well, absolutely. Waiting 30, 60 days for their money. And if we wait until November, as has been said, we would have to get this money reappropriated. We're going to have a mess on our hands. I apologize. I'm not aware that we have any unpaid invoices other than those that would be just in the current cycle of we write checks, I mean, run checks twice a week or something like that. Well, I think the issue is this available budget money, having it reappropriated in order to cut a check. But if you're saying we can work together to figure out a way to pay some of these and then reappropriate later on, I think that would be a great win. We'll get on that first thing tomorrow morning. Thank you. I'm sorry. No problem, though. Thank you. Are there any further comments from the counsel concerning this item? Thank you very much. Mrs. James. Sorry. I'm not logged in. A quick question on page 18, Division of Planning. The account title is Land Acquisition, and there's a budget of zero, expenses of zero, and available of zero. I just wanted to get some clarification on this item. You have to remember, this is our first cut, and we ran a query. And if it had a zero budget and an account number, it came up, and we haven't filtered these out. This is what we sent out to the divisions, and we said, do a couple of things. Tell us, you know, is this a valid account? And if it isn't and the money's been moved out somewhere else, they will send us an email and we will take it off. So it's a work in progress. Okay. I'll just watch out for it. I will check this one just to make sure and try to get you an answer. Thank you. I would presume, then, that the committee would like to see how it comes out next month also. We'll keep you informed as much as possible. Okay. We can count on it to be on the docket, then, for next month and get an update. If there is no further discussion concerning this topic, we'll go on to the next topic, discussion on tax relief for private neighborhoods paying property tax and Kentucky utilities for the maintenance of streetlights. And I think this was placed in our committee by Mr. Stennett. Mr. Stennett, do you have any comments that you'd like to make about this item? Thank you, Chair. Well, there's a couple of issues here, and I'm not sure if we're ready to go through the full-fledged presentation today. We're still doing some work, and I apologize on that. But there is still the issue of neighborhoods who have received LFUCG funds via the developer of the community, usually, to put in private streetlights. And once those private streetlights are installed, they are indeed maintained by a homeowner's association or the people that live in the neighborhood forever. And they pay the fee to KU. They pay the fees through property tax as well to us. And I think the question has been raised is, when does that ever stop, if ever, on some of those private neighborhoods? Because they do pay back into the system what they received up front. And their question to LFUCG and what we need to do is compare how many neighborhoods are actually doing this, first of all. And we have not asked for that information due to several things going on in the Department of Finance. I have not approached Commissioner Coe about doing this yet. So I'd like to postpone this probably until November or December meeting so we can gather that information. I think that would be appropriate with the things going on with the 2015 committee and the management study. They've been under a lot of work up there. So if we can wait until November, that would be my request, sir. Okay. We can. I live in such a neighborhood, and I may be in the dark because my neighborhood doesn't have any streetlights. I do recall dimly seeing a check that I got from the urban county government repaying me for the tax I paid for the streetlights. So it has been done. Right. Initially, LFUCG gives a lump sum payment to help install them. But I'm not aware, as you just said, any refund we've given any neighborhoods. And I think there's plenty of neighborhoods, especially in Hamburg and Heartland area and other areas that have paid for their streetlights over the years that have not received any money back on that property tax bill. So that's what they're looking for. Well, I believe I did get a check. Are you aware of this, Ms. Cole? I'm sorry. I mean, I remember the issue, but it came up during the budget process. But we need to talk to Bill O'Mara. Well, we can get that, get together with Mr. O'Mara and flesh that out. I did have a question that perhaps you can answer. A constituent asked me. I'm about 0 for 3 here now. Sorry. Which is in this general topic, and that is a constituent who is requesting whether the property tax could be paid in installments. I'm going to really shoot from the hip on this one. I'm guessing it would require action by the council. But what I would encourage you to consider is the more bills you send out, probably the lower your collection rate is going to be. We have a very high collection rate right now on property tax. And if you start spreading those out and sending out more bills, not only does it cost you more to send out more bills, generally I think what people have found is they don't get as high a collection rate. But I think it's something we can look at. We can see what's going on in some other cities. And, you know, one thing that might be helpful is as we move forward with some of our technology, we're hoping that we're going to be able to allow people to pay for some things online. And so that might be one consideration there is if we can get online payment up and running for some other things that we're looking at, we might be able to do some things around the property tax, too. But certainly we need a lot of attorneys and revenue people at the table to be able to figure that out. Well, this letter that I received was from a senior citizen on a fixed income. Right. And apparently they don't ‑‑ I guess they could start saving a year before and accumulate that bolus to pay. But also it seemed to me that they could ‑‑ bills are generally sent out in October, I think. And the taxes are not delinquent until sometime three or four months later. So they would have an option of paying two or three months at least. Right. Partially. They wouldn't have to pay it all at one time. That's right. That's right. But I do think as we move forward with technology, it's something we can certainly look at. Okay. Appreciate it. Appreciate it. Can we put that on Mr. O'Meara's list then? I'm going to add it to the list, yes. Okay. Thank you. Mr. Maloney. I need a question in line with that. The mortgage companies that are filing bankruptcy right now, they're going under a lot of these homes. They do the pay the end of the year for the taxes. What's going to happen there? I mean, there's about three large major companies that have gone under. And some of them may go under. Does anybody have any idea what's going to happen with that? I'm sorry, I don't. I could ask Mr. O'Meara to look at our billing, because the billing would go now to the mortgage companies and to compare that against what we know about which mortgage companies are not functioning right now. We'll take a look at that. Because some of these, I mean, they're paying still, but I just hate to see these folks get punished. And the mortgage company is no longer there, and the money, they don't know where it's going. So if you all can keep up on that, I appreciate it. Right. Well, I think the other thing that's going on there, too, the Federal Government seems to be looking at that whole issue around maybe some form of bailout, right? But we will take a look at that, because it will hurt us even if we get the money, but it's delayed. Okay. So we'll look at that. Thank you. Thank you very much. Is there any further business to come before the committee? If not, we are adjourned. Good job, Doc. Give me five. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.