# Council Budget & Finance Committee - August 31, 2010 > Auto-transcribed civic record · Council · August 31, 2010 - **Permalink**: https://meetings.lexingtonky.news/meeting/1490 - **Source video**: https://lfucg.granicus.com/player/clip/1490?view_id=14&redirect=true - **Date**: 2010-08-31 - **Body**: Council - **Last revised**: June 18, 2026 - **Length**: 11,490 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 31, 2010, at 1:00 P.M., with Kevin Stinnett presiding. The meeting addressed three agenda items covering fiscal review, debt policy, and a licensing fee proposal. Two items were informational in nature — a review and discussion of fiscal year 2010 revenue for July 2010, and a presentation on a Comprehensive Debt Management Policy — while the Minimum License Fee Proposal was brought to a vote and approved. In total, one motion and vote was recorded during the meeting, no formal presentations beyond the agenda items are noted in the record, and no public comments were heard. ## Attendance All ten Council members were present at the August 31, 2010 meeting. No members were recorded as absent or late. **Members Present:** - Kevin Stinnett - Ed Lane - Jim Gray - Linda Gorton - Chuck Ellinger - Andrea James - Tom Blues - Julian Beard - George Myers - Peggy Henson ## Votes and Decisions The Council meeting on August 31, 2010, included one recorded motion and vote. - **Motion: Forward Minimum License Fee Proposal to Full Council** [timestamp: 1:05:33] The committee voted to forward the minimum license fee proposal to the full council for review. The motion passed by voice vote. No individual roll call tallies were recorded, and the mover and seconder were not identified in the available record. ## Contested Items - **Debt Management Policy Draft Presentation:** A procedural dispute arose during the meeting regarding the order in which a draft debt management policy would be reviewed. An objection was raised to presenting the draft directly to the full committee before the subcommittee had been given an opportunity to review it first. The available data does not identify the specific individuals involved in the dispute or record a final outcome of the disagreement. ## Review and Discussion of FY 2010 Revenue for July, 2010 The Council received a PowerPoint presentation on the FY 2010 revenue figures for July 2010. Rumpke delivered the presentation, walking the Council through the revenue data for the period. This item was informational in nature, and no formal action or vote was taken as a result of the presentation. The discussion served to keep Council members apprised of the city's fiscal position for the relevant period. No additional details regarding specific revenue figures, concerns raised, or debate among Council members are available from the meeting record. ## Comprehensive Debt Management Policy [timestamp: 23:34] The Council took up a discussion of the draft Comprehensive Debt Management Policy, which was described as currently under review by the city's legal department. The item was presented as informational, with no formal action taken at this meeting. Key speakers on this agenda item were **Rumpke** and **Ryan**, who led the discussion. The conversation centered on three primary areas covered by the draft policy: - **Debt issuance** — the procedures and criteria governing when and how the city would issue new debt obligations - **Debt structure** — the framework for organizing and managing the terms of debt instruments - **Debt metrics** — the measures and benchmarks used to evaluate the city's overall debt position and fiscal health Because the policy was still under legal review at the time of the meeting, the discussion was preliminary in nature. No final decisions or votes were made on the policy's adoption or content. The item served to keep Council members informed of the policy's development and to allow for early input before the document is finalized. The outcome of this agenda item was **informational**, meaning it was brought before the Council to provide awareness and context rather than to seek approval. Further action on the Comprehensive Debt Management Policy would be expected at a subsequent meeting once the legal review is complete. ## Minimum License Fee Proposal [timestamp: 58:52] The Council took up Agenda Item 3, a proposal to modify the existing minimum license fee structure. The item was presented by O'Mara and centered on two key changes: adjusting the due date for the minimum license fee, and establishing an exemption for sole proprietors whose gross receipts fall below $4,400. The proposal was brought forward as a discussion item, with O'Mara outlining the rationale for both components of the change. The exemption threshold of $4,400 in gross receipts was identified as the qualifying criterion for sole proprietors seeking relief from the minimum license fee requirement. The Council ultimately approved the proposal. --- ## Decisions - **Motion** — passed (0-0): Forward the minimum license fee proposal to the full council for review --- ## Full transcript **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Musik** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Jazz Music** **Pause** **Jazz Music** **Pause** As we look at Fayette County, which is obviously what we're most focused on, you know, our unemployment has been fairly steady. April and May we were at 7.7%. June and July we were at 7.8%. I guess just a small item to note, we're no longer the lowest unemployment in the state. Boyd County is now at 7.7%. So we don't hold that distinction anymore. I think one of the points I wanted to add here, and I know we've talked about it several times at this committee, is that employers are continuing to be reticent to add new jobs. And obviously, given our tax structure, that's concerning for us. So while we remain fairly steady in our unemployment numbers between the individuals that have fallen off because they no longer qualify for unemployment and the reticence on the business community's part to add new jobs, we're still having some, what I would call, revenue challenges that we're going to need to address in the coming months. And there's just a look at Fayette County. From an economic indicator standpoint, as you can see, our employment rate has gone up a little over a thousand. Permits issued month over month down 206. Our new business license, the good news is, we're up over June. June was low at 243, and we were up to 350 in July, so an increase of 107. I want to spend just a couple quick minutes talking about home sales and what's going on in that arena, because it seems to drive a huge part of our economy here in Lexington. Home sales has no big surprise to everyone since all of the tax incentives rolled off. We're down 286 in July. And if you've watched any of the national news today, they released the new single family numbers and nationally, we're down 12.38% in the new single family home sales. Existing home sales for single family is even worse. It's down 27.06%. So that's really a huge decline, and again, with all of the stimulus-type programs rolling off, that's a real issue. It seems that we really have a deflationary mindset. People think that there's going to be more government assistance ahead, so they're kind of waiting and wondering, okay, should I wait to buy a home or should I not? And then that's further causing declines, both in the number of homes sold, but also it's putting a lot of pressure on home prices. The good news is, here in Fayette County, we seem to be holding our own as far as home prices go, so hopefully we will remain insulated, but the national trends are concerning. The other item, and I know several council members, we've talked about this over the last few months, is just the bank's willingness to modify mortgages, and we're finding that more and more, they're not willing to do any modifications. They're allowing it to go to foreclosure, and as you can see, even though our foreclosure numbers are remaining steady in the 50s, there is still a huge backlog with the master commissioners, so we've got, Bill, I don't remember how many months the last time we looked, was it like four months? Four to six months of backlog just with the master commissioners, so we're not out of the woods yet, and obviously that doesn't even take into consideration the commercial real estate market. The one positive note that I'd like to bring up just to plant a seed today and we'll move on, the bond markets, if you've been following them, there's some unique opportunities to actually be financing right now. The 10-year treasury, I think yesterday was at 2.46, right at 2.5. 20-year bonds were sub 3%, so I've been meeting with our financial advisors really just to discuss even though we've talked about delaying going to market for our bonding needs, we might want to weigh the options of going sooner versus later versus our cash flow and ability to afford that, because I think these are just historic times in the bond market. We're also keeping an eye on our opportunities to do any refundings, to be able to capture additional savings from this unique interest rate environment. And with that, I'm going to turn it over to Director O'Meara, unless there are questions. Thank you, Commissioner. I have a short presentation today. We have one month in, and that's July, and first blush would make you smile. So let's take a moment and then I'll tell you the rest of the story. We're up in all four categories of the four leading revenue streams, $825,000 for withholding, $54,000 net profit, $991 in insurance, and $144 in franchise fees. That's the good news. The asterisk there explains part of it. Of the $875,000 variance in occupational license taxes, about $765,000 of that is reflective of the amnesty program that we did during the month of July, and about $765,000 of those amnesty collections are in your July report. The insurance appears to be a timing difference. I think we just had a few major players pay us a couple of days earlier than they had in the past, so I believe that will pretty much wash out as the year goes by. The other is franchise fees. The major players pay us quarterly, so this reflects the telecom check that we get from the state each month, as well as some of the smaller franchisees that pay us on a monthly basis. After adjusting for one-time revenues or timing differences, I would describe July as flat rather than a $2 million positive. That doesn't discount the fact that we've got the money in the bank, so I don't want to take all the air out of the balloon, I just want to put it into perspective. And to, speaking of amnesty, if I may, I just wanted to give you the total results. As I alluded to, we took in $675,000 in July, another $588,000 in August for actual cash collected is $1.35 million. We have an additional $350,000 in payment agreements that we will be collecting over the course of the fiscal year, so total amnesty on a book basis is $1.7 million. We took in 245 new accounts, and we had 1,150 actual taxpayers participate. Excuse me. Those should be reversed. New accounts is 245, total accounts is 1,150. My bad. We used Revenue Discovery Services for the first time in conjunction with the amnesty, and they accounted for about 150 of those 245 new accounts and about $100,000 of the $1,353,000. So that's July revenue and amnesty report as of today. Any questions? Councilman, if you have any questions, just raise your hand, and we'll get to you the old-fashioned way. Anybody at all have any questions? Bill, I do. Back on the previous chart, you said $750,000 of the net profit line? The OLT, the two combined. The two combined, okay. Employee withholding a net profit, which ties to the next slide, July receipts, $765,000. Okay. I just want to clarify that. And then Commissioner, back on the bonding question, the Treasury yields, which we all know dropped yesterday, big time, have a big effect on a lot of other markets. What about bonding for the items we approved in this year's budget? Is there a plan to go ahead and go to market now? Because it sounds like we can do a pretty good job. Well, that's why I wanted to bring it forward to the committee today because, as you know, we had talked about delaying it until maybe January. That's why I reached out to our financial advisors to have them run some scenarios that I could bring forth immediately because I think time's going to be of the essence to really capture this market. And when will you have those scenarios so we know if it's a good deal? I believe they are going to have something for us right after Labor Day. So they're actually going to come visit with us, forgive me, I think maybe Wednesday or Thursday next week. And if I'm not mistaken, you need 60 days to go to market basically? Just about from the time we get all the bond rating calls, et cetera. So even if we did say pull the trigger now, we're still November at the earliest to go to market? Right. That's correct. Okay. Council Member Lane. Just a follow-up question on that. Do you need any additional authorizations from the council to go ahead and go for bonding or do you feel like you've got all the approvals you already need? We would have to have approval to go forward with the actual issue. What I'm doing right now is getting all the research together so that you all can make an informed decision as to whether to move forward or not. The other option we have, and I had mentioned this to the chair, is that if we get all the information gathered and we authorize to go forward, we could authorize where we would go forward in this range and if the rates were outside that range, we would just wait. And look at it on a week-to-week basis so that we could get the best rate that's out there. So that's one of the alternatives. Well, I think it's a good idea. If we can get a lower rate, we should try to do it. That's a no-brainer. Thank you. Vice Mayor Gray. My question actually goes back to Bill. I think the question is related to the amnesty collections bill. You said you did not allocate it or you do not have an allocation between employee withholding and net profit? I think that's a really key number for us. Especially the net profit number. I didn't do it on this slide. We have the information. Just when I was preparing the slide, I did it in total. Be glad to furnish it to you. Have you got any order of magnitude? The reason I think that's really relevant, that could be the most relevant thing that we're dealing with today. Because if our net profits tax, if our receipts for net profits are substantially lower than projected, then that gives us a pretty good indication of what's happening with our business community today. I don't know many people are planning on paying taxes in small business world. To piggyback on your comment, one of the things, the results of this amnesty program were different from the characteristics of the one we did seven years ago. We got fewer new accounts and more delinquent taxpayers coming forward and saying I'll take the deal. The previous amnesty loaded up a lot of more new taxpayers on the rolls. I actually am not surprised at those results because we were trying to say you've got all these competing expenses, taxes is at the bottom of your list, we're trying to move up to be right behind your utility and your inventory costs. So I think the results show that, that we motivated current taxpayers to come forward and try, if they could, to address their delinquencies. And by offering installment plans, I'm actually surprised that the payment agreements is only 350 of the 1.7. I would have predicted that more people would have taken time payments to avail themselves of the amnesty rather than paying lump sum. So good news for our cash flow, they didn't do that. I was actually expecting because of the economic conditions, more people availing themselves of the amnesty. But I'll be glad to break it between net profit and payroll for you. Do you have any idea of that number today? You don't have any idea of what that represents? Does anyone have any idea of what that is? I do not know. I don't mean to be expressive, but I think that is I'll run out and get it for you. I do think that's very relevant to us and maybe the good news is that it doesn't represent much at all of the net profit number. I wouldn't lean that way. I'll get you the actual numbers. Thank you. Counselor Lane. I just thought you got the numbers. I'm so glad you asked, Vice Mayor. Thank you. Of the 1,353. A lot of people aren't, but I'm glad you. Pardon me? Sometimes folks aren't, but please go ahead. Of the 1,353, 976,000 was net profit, 376,000 was payroll. So of the 1,353 of cash collected over the entire amnesty program, 976 payroll, 376 excuse me, 976 is net profit, 376 is payroll. What you probably need in addition is the breakdown between July and August. And so we'll work on that while the debt policy discussion is going on. Very good. Counselor Lane. My question was are these revenues that were collected under the amnesty program, are they principally for tax returns that were due for the calendar year 2009 and they were payable in April and they didn't pay? It was the requirement was it had to be delinquent as of May 31st. So if you were supposed to file your taxes by May 31st of 2010 and had not, then you could avail yourselves of the amnesty ordinance. So some paid one year, some paid three years, some paid even more. The reason I bring that up is that this revenue information doesn't really have a lot of bearing on this fiscal year or this calendar year because it was really for last year's calendar year. Would that be a fair thing to say? The amnesty dollars are all prior year liabilities that were due us. But it puts into perspective the actual collections of July that are related to July. That's all for me. Thank you. Any other committee members have any other questions for Mr. O'Mara? I do have one follow-up. We budgeted in the budget this year a million dollars for taxed amnesty. That is correct. So we're about $700,000 to the positive on that one line item. I'm not saying the overall budget. That one line item. Okay. Just want to make sure. Okay. If there's no other questions, we'll move on to our next topic. This is the debt management policy. I thought it was important to go ahead and get a preview of the draft to the full committee because when we found out there's a couple other pieces that should go along with this policy that we'll probably have to break down to a smaller group to go over. One would be the cash management policy of government. The other would be the capital, which we have worked on a couple years ago. But that's another important piece that does affect this policy. So I don't think there's going to be an opportunity to draft this without the other two either in place or along with it. Because we can't just have a debt policy and bond everything we get. So we've got to look at the capital. And of course, as we're learning right now, cash flow is going to be an important indicator of what we can and can't do. So Commissioner Remke, you want to give us a quick breakdown of what we've got so far and what our plan is to look at the other two? Matt, can I ask a question before we get started? Sure. When we had the one meeting of the debt management subcommittee that I'm a member of, I didn't see a draft that came back to that subcommittee that was even something that we're presenting today. Can you talk about how it even got to the point? Like, who was talking about how this draft even came forward? And how did it get to this point? Because we only had that one meeting. Right. We had the one meeting. As I explained in the July budget and finance meeting, we would bring it back to the whole committee to draft a report out for this meeting so the whole committee could see it. We asked the administration to go back and draft a policy. And that's what they've done here. So that's what we're here today to talk about. What's the point of the subcommittee? It was to go over the finer details. And that's what we'll adjourn to after the preview today. If there's other points we need to go back and reevaluate along with the other two proposals, then that would be the work of the subcommittee. But we wanted to have something on the table so that everyone knows what we're talking about before we go down to that committee. And I made that decision. So if you and I want to talk about a better way to do it, be glad to look at that too. You made that decision as part of a subcommittee? As chair, to bring it to the full committee so we can take a look at it today. Well, yeah, I do wish that you would have talked to the subcommittee members and found out how we felt about bringing it forward without the subcommittee meeting to even see the draft before. I can't recall a time when a subcommittee's work is exposed to the full committee before the subcommittee gets an opportunity to review that. So I am stating my objection to that today. Thank you. And if I could just take two seconds to thank the entire revenue team for their efforts on amnesty. If you happen to be down here this summer when it was going on, they had tables out here. They made it very, very easy for people to participate. So I wanted to thank Bill and his staff publicly for all the work that they did. And on that thank you note, what you're looking at today, we'd like to say thank you to Nathan Phelps from the Gatton College of Business and Economics who spent countless hours of research based on a lot of the feedback that we had received from you all, looking at over 12 different entities, cities, etc., and doing line-by-line comparisons of debt management policies to bring forth this, what I would call, outline or policy draft for your consideration today. And I also wanted to thank Bill and Ryan because they put in a lot of hours to bring this forward. So, as the Chair has just pointed out, this is really an overall financial policy development plan, and the first step was to get the debt management policy draft in place so that this committee had something to review. I think it's important as we evaluate these plans, it was very difficult when we were working on the debt management plan to not jump into the capital, you know, the CIP evaluation process because they do go hand-in-hand, and then cash management is the overlay on that. So we're trying to keep them very separate and distinct, and you'll see what I'm talking about. You have the draft in front of you, so I just put together a few quick slides to help lead you through today, and then as the Chair pointed out, you can review it, and then we're happy to have further discussions at the subcommittee level or before the whole committee, however you all choose. The purpose, and this would be on page one, we wanted to have a policy that discussed the method of debt issuance, you know, the structure, the types of acceptable debt, and then what is the appropriate level of debt that we should be looking at as a leadership group. With respect to the scope, again, establishing the guidelines of purpose, type, structure, method of sale, usage, etc. And then as we've all discussed, what are the metrics? I mean, we've had a really hard time. We've listened to Hilliard lines and other financial advisors come forth and say, well, it should be X or it should be Y, and we're bringing forth some of those proposals for you to look at today as far as how do we measure ourselves. On page one and two, there's a discussion about the credit rating, and I guess my comments would be, you know, we don't want to fall below an A credit rating, but our desire is to have the highest credit rating possible. As you know right now, we're a double A, so we'd like to at least stay where we are or be higher, but you have to balance that with the needs of the urban county government and the economic climate as well. And so we want to do this without compromising our delivery of service, but also we want to be able to achieve the policy objectives. On page three of the draft, here are some of the purposes for debt issuance. Obviously for buildings, planning and design, land acquisition and development, equipment, and then pension obligations is something that I think this group needs to talk about. Do we look at bonding going forward for our pension obligations or don't we? And so I put that on there as something for the committee to discuss. As far as types of debt, again, this should not be new for you all. Obviously general obligation bonds, which we have used quite regularly, revenue bonds, special assessment types of debt like TIFs, which obviously we've got several going right now. And then we also added the paragraph because it seemed like across the board there was policies addressed short to intermediate term debt instruments. We have been fortunate that we didn't have to walk across the street to one of our local banks and establish a line of credit, but given the economic times that we're in, we want to make sure that we have some guidance for this committee should we ever need to do that. Your debt structure, again, we want to make sure our repayment matches cash flow so that we're not further obligating our children with large lumps of debt because we put off paying our debt service. But that said, it's also important that we match our debt service with our cash flow and sometimes that means we have to look at smoothing opportunities and we can talk more about that. Fixed rate debt obviously preferred. We like to have competitive sale if possible. And we want to be able to refund debt when it seems prudent and appropriate, such as these times when we have interest rates that are just off the charts as far as being very, very reasonable. And I'm going to ask Ryan to come up and talk a couple minutes just about the two metrics that we've put in place and why we suggested these two as a test of affordability and capacity for debt. Ryan? Thank you. Actually, this is what I would call the meat and potatoes of this policy is targets, affordability targets. The A credit, double A credit rating is somewhat subjective and we don't really have hard data. But what we did on our review of our peer groups, other cities and counties, both the credit rating agencies, Moody's and S&P and GFOA, more or less one of the base targets that we thought would be applicable to tie to a percentage would be debt services percentage of operating expenditures. So when we developed these targets we wanted anybody to be able to pick up our financial statements and run the math themselves if they choose to. So for nerds like myself that want to do that and go through a peer group and look through and run the math. Now, in order to keep the double A with the minimum of an A and to adhere to the GFOA recommendations, the target that we proposed, certainly this is a policy decision, I made it very clear that that would rest with this body and the full council, but we put a 10%. Now, this would be debt service, our annual debt service, principal and interest payment divided by operating expenditures. And operating expenditures, we can pull from our CAFR, be the total operating expenditures, backing out the debt service. So roughly the 10% metric would be what would be across our peer group for quote unquote financial health. Brian, while you're going through this, I think it would be useful. Give us an order of magnitude in absolute dollars. Are you talking about the general fund, 270, 280 million, or are you talking about the total including all the special funds? I apologize. This is for the general fund metric. All right. Okay. The reason I'm and I'll ask another question later when you get through. There's some language in the policy and the full policy, which I think you received a copy of, that speaks to revenue debt. And those are more on a coverage calculation versus a percentage basis. So this would be the first metric that we proposed. So we do a debt service to operating expenditures, and we also wanted to look at debt services as a percentage of recurring revenue. Tax amnesty is not a recurring revenue. Property sales is not a recurring revenue. So over the long haul, there's instances where expenditures do not equal revenue. So we wanted to not get into a bind in certain years where that happens, structural imbalances and such. So we also wanted another kind of general target, debt service as a percentage of recurring revenue. So again, what you would do is you would take the debt service for the general fund and divide it by recurring revenues. Now, recurring revenues you can more or less take from the CAFR and back out those one-time property sales, tax amnesty, those kind of major bullet points in the CAFR and to come to a percentage calculation that we could then benchmark against this 10% target. One of the other reasons we thought it was important to do a recurring revenue metric, many of you may have read about some of the challenges Illinois and other states have had, and they have been bonding based on non-recurring revenue. And so while we're trying to benchmark against peer groups, what we're seeing is that their CAFRs aren't exactly as transparent and pure, and so we wanted to be able to test ourselves with respect to the actual recurring revenue, and it is something, as Ryan said, many in the industry are looking to that metric, and there is more and more being written in the Financial Times about the need to get to the year-over-year recurring revenue versus these one-time hits or stimulus dollars that may have flowed in that kind of cloud the actual financial picture, so that's why we added this metric. Yes, that's a really good point. I probably think this is a better test, but as Linda said, it's hard to benchmark the recurring revenue, because you've got to really pour through financial statements, and one of the things that we set out in terms of developing a metric would be that you could quickly, anybody could pick up a financials for any entity and kind of run a comparable percentage, but you have to know a little bit about the entity or have to read through the entire CAFR to be able to pull out sometimes those recurring revenues. We can do that for ourselves easily, but when we benchmark against peer groups, sometimes it's hard to pull out those without really pouring through the information. So if you'll give us the plan going forward, what you all will be bringing back with the other two policies and what your time frame is, so we know when we can schedule meetings in between what you're thinking, and then we'll... Well, let me throw out what we were thinking and then you all can tell us if we're off the railroad track or not here. We thought this was really the foundation. This gives us the guidance to then take that second step and look at the CIP evaluation process, because unless you have that policy in place, then it's hard to put an evaluation process in place. So we were going to immediately jump into the CIP process as you all make your final comments on the policy. So in other words, we would be running concurrent so that we can continue to move this forward. We think it's probably going to take us another 60 days to pull the CIP together. It's a little bit more complicated, and I shudder to think the number of hours that Nathan put in research-wise, but that said, a lot of his research actually pulled the CIP evaluation process from these groups. So we've allocated staff time to be able to get that done, Chair, so even though I'm a cash girl and I'd like to have that cash management policy in place across the urban county government, I think that the appropriate step would be to move right into the CIP immediately with your blessing, knowing that we hadn't finalized this through a vote, and bring that back in draft form. And then also, if we can work concurrently on the cash management plan, we would absolutely do that. But I think they're all critical, and if we're going to try to go to market, we certainly want to at least have some even a skeleton structure in place to review our debt going forward. Okay. Anybody have any questions before we talk about our approach going forward on what they presented today? Council Member Beard. Thank you, Mr. Chair. Explain to me a little bit about how, on an ongoing basis, we're going to be able to measure where we are, do we drive a stake in the ground as of June, the end of June, and then look at our revenues and calculate whether it's 10% or less, and then what do we do when we find out in December that those revenues aren't there and we can't necessarily adjust the debt service to sue this? How is that ongoing going to work? The proofs and the implementation, right? So this is a guidance. We would be looking at our numbers on a quarterly basis to the best of our ability. Obviously, the finance team brings forth our revenue projections, and we're going to be rolling up our sleeves here shortly since Bill's done with amnesty, putting together what our projections are, because, you know, we brought those forth during the budget process, but we have more data to base those on now. So I would think that we would look at this on a quarterly basis to the best of our ability, knowing that there are timing differences in a lot of our expenditures. Now, the good news about doing it on a quarterly basis, to your point, Councilmember Beard, is should we need to say, look, we're not going to spend these dollars, whether it's in operating or whether it's in capital, we would have the ability to do that, and that's really what we want to be able to model and forecast versus just kind of licking our finger and sticking it up there in the wind. And some Ryan has been working on some modeling that's going to allow us to do that and have more tools for this committee and for the government. But you're absolutely right. We can't just, you know, calculate it in June and say, oh, okay. So we're going to have, to the best of our ability, at least look at it on a quarterly basis and provide this group updates to the best of our ability. And exclusive of the amnesty money, it seems like which quarter, is it a calendar quarter type of thing, or is it going to be one month off from a calendar? I don't think that we're set in stone either way. I don't know, do you all have any thoughts on that? Well, as Ryan points out, obviously we would do the official calculation on the annual audited numbers, but then I think, you know, with July 1st being our beginning of the fiscal year, that we would do it on a fiscal year basis so that we know where we are from a budget standpoint. Does that make sense? Well, I mean, that's part of it. The other part is that on this revenue situation, we're all over the place. And these people don't file, they file three days late, the checks in the mail. I mean, all this kind of stuff seems to happen. And there should be some historic way to go back and determine at least how you use, which quarter you use, I mean, or how many months in, obviously in a quarter. From a revenue perspective? From a revenue, that we're always going to be one month off from people filing and that's our real revenue. As I said, because they're really paying for the previous three months. And we can come up with those recommendations and bring them back to the committee. But thank you for bringing that forth because that's a good point. Okay. Thank you. Thank you, Chair. Vice Mayor. Thank you, Mr. Chairman. This question goes back to Bill's period as Acting Commissioner. Bill, just a sort of a, I remember in conversations that we had a couple years ago, maybe, when we were discussing the 10% number, which had been a benchmark and sort of, for me, for some time, or at least anecdotally. And we had some conversations about that. And as I recall, your pushback on a number like this was that it was not as effective a tool or an instrument because it really, because what we really need to be doing is measuring the capacity of the institution that is, in our case, the government. Our revenue, the strength of our revenue system or our revenue base to, and that can only, that's not a percent target. I remember those conversations because we had two or three of them, as I remember. I was then talking about, if we're going to invest, that number might arguably be higher than 10%. I think today we're at 13%, and then the context of it is, I'd also like to ask about benchmark cities because I think Columbus is at north of 20%. So other cities. Thank you. Was that a question? I would like for you to continue the conversation or go back to that conversation and share with us. And share with us, I don't think my memory has failed me, I think that you were very, that were reasonably demonstrative for Bill O'Mara on that subject. Wow, that's saying a lot. Here's what I remember, Vice Mayor. What I was talking about is we can do a percentage all day long, but if you can't afford to write the mortgage payment, then you've overspent. And so I was talking about we have the pie, and you all have the responsibility to decide how to split that pie. How much is for payroll? How much is for operating? How much is for debt service? Those are your three major parts of your budget. So if you want to invest and you want to run at 15 percent, we can afford that as long as we reduce operating or payroll so that we can still write the check to pay the mortgage payment. So that was the context that I remember. Does that ring a bell? Yes. And so the extent to which all of those influences that you just mentioned are incorporated in this model, it can be an effective model. Yes. But if we don't incorporate all of those influences, then the number alone can be, can misguide us. We can't look at anything in a vacuum. Right. It's all interactive. Anyone else have any questions? Council Member James. Thanks, Chair. Ryan, on the benchmarks that were used for research, is that something that you have charted that you would be able to share all information, kind of like an economic analysis of those particular benchmark cities and what everything else looks like in their city? Like cost of living, the hourly wages of like how much each individual taxpayer is paying per household for certain taxes. I'm looking for a deeper economic analysis of how do we pick a percentage and know that that percentage is equal, comparable to our city, even though something as flat as a debt service as a percentage of recurring revenue or the steady revenue, I just don't know that that really captures the depth of setting a debt management policy that works in conjunction with all the other types of policies that will have to be set forth that will work with it. So do you have a spreadsheet that shows all the economic analysis of the benchmarks? The way we tackled this was to pull 10, 15, 20 policies, debt management policies. And we did a matrix that looked at each aspect that every entity had and went across the board and picked out the various issues that we wanted to touch on. So we didn't do a collective model for every entity and say, well, this entity, and analyze their cash flow, analyze their CAFR, and do all the metrics for every single entity. We took 10, 15, 20 policies, gelled it together, what's already been done internally within the government, and came up with a policy you see before you. I'm happy to send a copy of every policy we pulled, some of the analysis that we did, all the drafts that we did on this. It's a lot of information. And without participating in it, I'd have a hard time garnering a lot of information on it. But I'm happy to send that all to you. I don't think the whole committee needs it, but I do think the subcommittee, that could be work of the subcommittee, that the analysis can be done to make sure that whatever we choose is across the board the most comparable for our city for all the other aspects. And I'm thinking about a lot of things that we've worked on where you look at comparable cities and you pick a number. Like, for instance, the Affordable Housing Trust Fund. There's a percentage that other cities give and invest in their affordable housing. And if I were to present that number today to the council, the council would say, well, what does that mean to us today? What does that mean for us here? So they'd be looking for some more in-depth information about, show me what the economic impact is on the city as a whole, if we were to do this frame and have a target of this range. So I think that would be work that the subcommittee could work on to get that in-depth information. Yes, that's great. And let me say one more thing about the number. This is what we envision to be in a policy, not an ordinance. So it's not something we have to adhere to. Clearly we're over it currently. What we did was we did our own analysis. It was a number that came up in a lot of different policies. It was a number that the GFOA, you know, our trade organization has thrown out there. It was a number I've heard mentioned in council meetings previously. And it was a number that, you know, all credit ratings in the investment category with Moody's and S&P would fall below that 10%. So we did do a lot of research, and I'll make sure that we send copies of all that information to the subcommittee. Well, and that's great. And I think, too, you know how I feel about Moody's and S&P is I'm not ‑‑ I think that they're probably one of the prime reasons that we're in the economic situation that we're in right now. So I think that there are some nontraditional, more progressive thinking as far as what is debt and how do you qualify debt? When are you willing to take on debt that aren't necessarily based on the S&P index? Because there are a lot of people that don't feel secure in the way that things have been done, that they don't want to use the same things that have always been done, nor use the same advisors that they've used before. So I think, you know, I think instead of just kind of looking at the history, that we need to look at what are the progressive folks that are really grasping a hold of that it's not the same industries that were before. Things aren't the same. The bonds aren't the same as they were before. It's a whole new world out there when it comes to economic analysis. And moving forward with that. So again, I hope that the subcommittee, I was really disappointed the subcommittee didn't get a chance to see this before it was presented to the whole, because you talked about this won't be an ordinance. But in this government, in the absence of ordinance, we've created policy and policy has become tradition. And I think we take a chance on letting something become a practice of how we do it, instead of really kind of gathering what the facts are and what the future is for it. So I do appreciate the research. I know a lot of work went into it. I wish that we could have helped you with the work on the subcommittee. As a subcommittee member, I would have been willing to help you with that. So I hope moving forward that we'll be able to work together on it. Thank you. Anyone else have any questions for Ryan? And just to hit a couple of follow-up points. One, the work of the subcommittee at this point will be to go over those numbers and get into the nitty-gritty of each of those cities, because Ryan does have that information available, as well as another reason why I'm bringing it forward today is we have another policy we need to either ask the administration to start developing and bring to us, or we can do it as part of the work of the subcommittee, and that's the capital management. And the reason why we're bringing that up now is we have a budget process that will begin in a few short months. And we know how long it takes things to work through our different committees and different systems. And if we want to have a debt management and a capital management policy before next budget, we need to begin working on it today, because time, we're already into September. And so does this group, do we want to also ask for the capital management plan to bring forward a draft so we can also chew on that in the subcommittee and go over that, or is that something we don't want to do right now? Because if we're going to do it for the budget purposes, we need to get working on it. I think the capital investment policy might be good just to come out of Commissioner Rumpy's office for a draft and we can look it over, because they have the resources and the people that are competent to do the drafts on that. You mean the capital improvement? Yes, sir. Is everyone okay with that on the committee for the administration to proceed in drafting the policy, bring back to us to begin working on? Commissioner James. Can you talk a little bit about what that, what capital improvement are we talking about? It's the one we actually tried to start about three years ago, I think it was, when we had the meetings at the library. This is a policy that says what we bond from, you know, streetscape projects to vehicles to equipment. This is the policy that dictates how much and how often we would do those sort of things. I know we tried to get a master list three years ago and that kind of fell through and some changes happened in government. But am I right? I don't want to. And the other thing, Councilmember James, that we've seen as we've gathered all this voluminous information is just how the ranking process, which I know, you know, that's been a really, really tough thing for us, because every project is extremely important and many communities have been very successful in not only putting the parameters together like the chair just described, but also what was the ranking process and prioritization of those projects so that if you have a list of 30 projects, but now your debt management policy says, oh, you better only go to market with 10. Which 10 do you go to market with? So I think it really is that next step in our evaluation process. Is that what you were thinking? You know, the hesitation I have with placing it, because it's not all, I mean, there's a component of it that is financial, but there's also a component of it that's based on other things that are going on in our government. So that CIP list has from every division of government included on it. And everything is different. Like say, for instance, for urban services fund and waste management trucks, there's a schedule of replacement that happens that outdates, a truck is outdated at a certain point. So I don't know if just talking about, I mean, I know that from Commissioner Rumpke's aspect, the financial, what we're able to do is one thing, but the prioritization of those things, I think that really is a, it's more of a collaborative effort of all aspects of the government and every division of government. So I don't, I'm not sure, I don't know, it just seems like it needs to be more of a collaborative type of process. And I'm not really sure how to make that happen. What I was going to share is the information that we've already gathered thus far. The ranking process is, the financial is like just this much of the overall prioritization process to your point, Council Member James. There are a lot of other aspects that go into how you rank and prioritize. You know, health and safety issues would have a, if you went on a point system, for example, some communities use a point system, and you take a project, let's say Commissioner Bennett brings forth the fact that we need a new fire tower, we just approve that. And it would go through every project, every director would bring forth their request, and it would go through a very detailed process, and financial is just one part of that overall process. And then once you get that list and you've prioritized them, whether it's a point system or there are other ways to do that, but let's say it's a point system, and so you've got them listed one through 30, then your financial piece kicks in, and that's what your debt management policy is for. How much, to the Vice Mayor's point, what's our capacity, how much can we afford to go to market with. So very much it would involve more than just the financial aspect. Well, and also to Councilwoman James' point, though, the policy also needs to have the urban services fund, because we tend to focus on the general fund up here. It would be for all of them. But it needs to be for all different funds, so their feedback and input and needs can be met in that policy. So is everyone okay with taking a stab at that? It's based on a political will, because in November we had our last meeting and the majority of votes got the projects on there. This will kind of clean that process up and allow a little bit better criteria. Is everyone okay with him taking a stab at the policy and bringing it back to the subcommittee to chew on and go over in detail? To a subcommittee? I support it going to a subcommittee. Yes, that's what I said. So is everybody okay with that? Okay. And we'll schedule another subcommittee to go over the debt management in detail and have the breakdown of all the cities and all the numbers so we can chew on the two matrix as well. We'll try to do that in the next 30 days or less before the next budget and finance. Given everyone's schedule, I think we may be able to get it done in the next couple of weeks. Next on the agenda is the business occupational license fee discussion. I know this was another item that's been on topic for several of us in our committee. I also get a lot of questions on it as we approach a new calendar year coming up. So, Mr. O'Mara, you want to take over, and this is the current proposal. That's correct. Thank you, Chair. In the budget proposal, there was a change proposed for the minimum license fee, and so this is to go over that and talk about next steps. Currently, the due date for the minimum license fee is December 31st, prior to the beginning of the year that the fee is associated with. So the minimum license fee of $100, which is currently in place, is due December 31st of this year for calendar year 2011. We're proposing to make that due date April 15th in the year of the minimum license fee. So instead of paying it by this December 31st, you would pay it April 15th when you're paying your other taxes for 2011. The second part of the proposal is the current requires posting of the license. We would still keep track of who is licensed, but we would drop the requirement of posting a license in a business location. And then the third part of the proposal is to create an individual or sole proprietor exemption. Currently, all business entities are required to pay the $100 minimum license fee each year, and that is regardless of the type or level of business activity. What is being proposed is for business entities that are individuals or sole proprietors, if their total gross receipts from their business activity are less than $4,400, then they can apply for an exemption from the minimum license fee. So in other words, when they file their April 15th return for 2010, and it shows that their gross receipts for 2010 are less than $4,400, then they could apply and be exempt for paying the $100 minimum license fee for 2011. Everyone else would stay on the current requirement. So if you're a corporation, an S Corp, whatever, it's still $100, because you have put yourself out there as a business entity and in the business of making money. I think there's questions. I'm sure there's a backward calculation that you arrived at $4,400, but give me a hint about how you did that and why $4,400 as opposed to a nice round figure like $5,000 there. It's $100 divided by .0225, the tax rate. That's where the $4,400 comes to $4,444. I round it to $4,400. I'm just wondering if the public would understand that as well as what are we actually losing? Because it's not granulated at all. It's a given point, it's either $100 or it's zero. That's correct. We incorporated in the budget the loss of about $175,000, running the numbers at $4,400. If you made it $10,000, then we would have a budget impact. If you made it $2,000, we'd probably have a budget impact of a pickup. If you changed it a little bit, it's probably a mute point. If you would rather have $4,500 instead of $4,400, we'd call it even. Will your system sort from high to low and find out how many people are involved in the $600 difference? Well, we can estimate it. Our system is based on net profits. This test is on gross receipts, so we don't capture everyone's gross receipts. We're actually doing the analysis based on the data that we received from the IRS, which is two years old. But we're stratifying that in order to make a prediction of what the impact it would have on our future use. I don't know. It just seems like we're trying to how the public may react to $4,400. It's like we're targeting a segment of people that are in there in that area. Well, this is creating an exemption. This would be an ordinance-driven exemption for sole proprietors with a gross receipts activity of less than X. We can run the numbers at whatever that number X is. Okay. Fine. Thank you. Thank you. Council Member Lane and Council Member Feigl. Yeah. One of the considerations of dropping sole proprietors making less than $4,400 is there's an administrative expense to collecting this money, and that expense might be greater than the amount collected. That's my seat of the pants on it. I owe you $100 for the time you put bills out or review them and run through accounting, deposit the money, do all the accounting for it. You have an administrative expense that would relate to that, too. So even if we were receiving more money, we might also be incurring more expenses to collect, report, and account for the money. Just a thought. Council Member Feigl. Well, I just wanted to clarify something. The $100 that they pay then goes to satisfy what they owe to the city ultimately, right? The $100 is a non-refundable credit. So in other words, if a business entity owes $120 on their net profits, they've already paid $100. They would only pay the difference of $20. If their calculations show they owe $80, then the minimum is $100 and there would be no refund. Does anyone else have any questions or motions in regards to the changes in the minimum license fee proposal? At this point, it's in this committee. Unless we make a motion to bring it to the full council, it will stay in here. I make a motion to forward it to the full council for review. Okay. We have a motion and a second. Is there any discussion? Okay. All in favor say aye. Aye. Any opposed? Okay. Well, we'll bring that for the full council next Tuesday to put on the docket and look over. And actually, not next Tuesday, in three weeks, basically, three weeks, we'll bring it to the full council. So you have a little bit of extra time, David. Okay. That's the last item on our agenda. Is there any request for next meeting? Any additional items any committee members would like to see for the next budget and finance or special request? Okay. Do I have a motion to adjourn? So moved. Motion and a second. All in favor say aye. Aye. We're adjourned. Thank you all. Record. Record. Thank you. You got a smile so bright. You know you could have been a candle. I'm holding you so tight. You know you could have been a hanger. The way you swept me off my feet. You know you could have been a broom. The way you smell so sweet. You know you could have been some perfume. Well, you could have been anything that you wanted to. And I can tell. The way you do the things you do. Oh, baby. As pretty as you are. You know you could have been a flower. You know that you could be an hour. The way you stole my heart. You know you could have been a cool book. And, baby, you're so smart. You know you could have been a school book. Well, you could have been anything that you wanted to. And I can tell. The way you do the things you do. Oh, baby. Yeah. You made my life so rich. You know you could have been some money. And, baby, you're so sweet. You know you could have been some honey. Well, you could have been anything that you wanted to. And I can tell. The way you do the things you do. You really swept me off my feet. You made my life complete. The way you do the things you do. You made my life so bright. The way you do the things you do. You make me feel all right. The way you do the things you do. You make me feel all right. electric guitar plays Your love is strong And you're so sweet You make me hard You make me weak Your love is strong And you're so sweet And someday, baby, we got to meet electric guitar plays A glimpse of you was all it took A stranger's glance, it got me hooked I'll follow you across the stars I'll look for you in silver bars electric guitar plays Are you scared of craving It's more than just a dream I need some time We make a beautiful team A beautiful team Your love is strong And you're so sweet And someday, baby, we got to meet Just being aware Out in the dark Out on the street Out in the dark I'll follow you through swirling seas Down darkened woods With silent dreams Your love is strong And you're so sweet You make me hard You make me weak Are you scared of craving It's more than just a dream I need some time We make a beautiful team electric guitar plays I'll wait for you Until the dawn My mind is ripped My heart is torn Your love is strong And you're so sweet Your love is bitter I take the lead Our love is strong And you're so sweet And someday, baby, we got to meet Just being aware Out in the dark Out on the street Out in the dark I'll follow you through swirling seas Down darkened woods With silent dreams Your love is strong And you're so sweet Your love is bitter I take the lead Our love is strong And you're so sweet One day People are searching for The kind of love that we possess Some go on Searching their whole life through And never find the love I found in you And when I speak of you I see you being over me It's hot And I'm well aware Of what's on their mind They pretend to be my friend When all the time They long to persuade you from my side They kill the world And on their own For just one moment We had enough Burn to death They want you because Of the pride that it gives But burn to death I want you because I need you to live Oh While I live Only to hold you Some of the men They long to control you But how can they control you Burn to death When they cannot control themselves Burn to death From wanting you Needing you But darling You belong to me I tell the world You belong to me I tell the world You're a part of me Burn to death Burn to death Burn to death In your arms I find Another piece of mine The world is searching for You You give me the joy This heart of mine Has always been longing for You You give me the joy This heart of mine Has always been longing for In you I have Whatever men long for All men need Is someone to worship and adore That's why I treasure you And place you high above For the only joy in life Is to be loved So whatever you do Burn to death Keep on loving me Burn to death Burn to death Keep on needing me Burn to death Burn to death You're the soul of me Heart of me You're a friend to me Burn to death You mean more to me Than that woman Was ever meant to be Instrumental Oh baby don't it feel like heaven right now Don't it feel like something but a dream Yeah I never know 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Don't let it get to you Yeah yeah yeah Yeah yeah yeah The waiting Is the hardest part Every day You get one more yard You take it on faith You take it to the heart The waiting Is the hardest part Every day You get one more yard You take it to the heart The waiting You take it on faith You take it to the heart The waiting Is the hardest part Yeah the waiting Is the hardest Part Yeah Yeah Is the hardest part Yeah Is the hardest part Yeah Mercedes Mercedes Do you wanna drive Do you wanna drive Baby let me tell you I've been watching you I see you dancing in my dreams Feel your heart beat Silently So if you feel it coming on Catch me getting in the mood Boy I'll give you anything Cruising's all you'll have to do Do you wanna ride My Mercedes boy Tell me what you're gonna do With me, with me Cause if you wanna ride My Mercedes boy There are so many things That I'm gonna do to you Baby let me tell you I've been watching you I see you dancing in my dreams Feel your heart beat So if you feel 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gonna do With me, with me Do you wanna ride My Mercedes boy Tell me what you're gonna do With me, with me Cause if you wanna ride My Mercedes boy There are so many things That I'm gonna do to you Do you wanna ride My Mercedes boy Tell me what you're gonna do With me, with me Cause if you wanna ride My Mercedes boy There are so many things That I'm gonna do Do you wanna ride My Mercedes boy Tell me what you're gonna do With me, with me Cause if you wanna ride My Mercedes boy I thought you and me were something special Thought you thought that way too Now I know that this old boy Just ain't the best you think you'll ever do It ain't cool to be crazy about you It ain't smart or devilish To let you know I can't like I do It ain't smart to be so reckless with my heart I should have known right from the start I'd end up like a fool Believe me, it ain't cool All of my friends they tried to tell me What and what not to do It took a while for them to sell me But finally they got through It ain't cool to be crazy about you It ain't smart or devilish To let you know I can't like I do It ain't smart to be so reckless with my heart I should have known right from the start I'd end up like a fool Believe me, it ain't cool Call me up from Amarillo Said you were coming to town I thought I'd like to tell you hello And drive an old friend around I pulled up to the airport On foot in and cool But when you stepped off that plane I knew I was your fool My little Texas tornado Blowing me away again I swore it wouldn't happen again But I looked at you and then I'd like a tumbleweed And a wild west Texas wind You're blowing me away again You're lying with me in Atlanta It's such a beautiful life You play me like a piano I always let you get by I know I'll go through hell, girl When you find someone else But right now I'm in heaven And I can't help myself My little Texas tornado Blowing me away again I swore it wouldn't happen again But I looked at you and then I'd like a tumbleweed And a wild west Texas wind You're blowing me away again guitar solo I'd like a tumbleweed And a wild west Texas wind You're blowing me away Texas tornado Blowing me away again I swore it wouldn't happen again But I looked at you and then I'd like a tumbleweed And a wild west Texas wind You're blowing me away again guitar solo playing in bright rhythm