# Council Budget & Finance Committee - November 29, 2011 > Auto-transcribed civic record · November 29, 2011 - **Permalink**: https://meetings.lexingtonky.news/meeting/2266 - **Source video**: https://lfucg.granicus.com/player/clip/2266?view_id=14&redirect=true - **Date**: 2011-11-29 - **Last revised**: July 17, 2026 - **Length**: 9,952 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Budget & Finance Committee met on November 29, 2011, at 1:00 p.m., with Mr. Chair presiding. The committee addressed three agenda items during the session, including a monthly budget report presentation, discussion of the Board of Architectural Review fee structure, and a review of items referred to the committee. The meeting included eight public comments and resulted in one vote. Two of the three agenda items were informational in nature, while the Board of Architectural Review fee structure discussion was deferred for further consideration. ## Attendance The following individuals were present at the meeting on November 29, 2011: * Vice Mayor Gordon * Mr. Sinnott * Mr. Lane * Mr. Stinnett * Mr. Myers * Mr. Beard * Mr. Schoeniger * Mr. Farmer No absences or late arrivals were recorded. ## Votes and Decisions **Motion to Remove Economic Contingency Ordinance from Committee Consideration** [timestamp: 1:05:30] A motion was made by Mr. Farmer and seconded by Mr. Stinnett to remove the economic contingency ordinance from committee consideration. The motion passed by voice vote. The following members voted in favor of the motion: - Mr. Farmer - Mr. Stinnett - Mr. Lane No members voted against the motion. The body noted a condition associated with this decision: the economic contingency ordinance may need to be revisited if a budget shortfall occurs after December. ## Budget and Financial Actions The meeting included discussion of three requests for proposals (RFPs) related to billing and administrative services: * **Banking and Account Fee Review**: An RFP for consulting services to conduct a banking and account fee review * **Sewer Landfill Water Quality Fee Billing**: An RFP for third-party billing and collection services for the sewer landfill water quality fee * **Project Management Services**: An RFP for a project manager to oversee the sewer landfill water quality fee billing project No specific dollar amounts, vendor names, or resolution identifiers were provided for these financial actions at this meeting. ## Public Comment **CAFR Timeline Concerns** Vice Mayor Gordon opened public comment by expressing concern about the Comprehensive Annual Financial Report (CAFR) being completed after half the fiscal year had passed [0:05:36]. Gordon urged earlier completion and suggested that partner agency deadlines be tightened to improve the timeline. Mr. Sinnott echoed these concerns about late CAFR completion [0:09:26], emphasizing the need to speed up the process to make it useful for fiscal planning purposes. Mr. Lane asked about technical or personnel issues delaying the CAFR [0:10:34], noting that auditor transition and accounting standard changes appeared to be contributing factors to the delays. **Historic Preservation Permit Fees** Dr. Blues raised questions about historic preservation permit fees [0:32:39], asking how to justify fees to residents and whether fee-charging municipalities had experienced negative consequences such as increased unpermitted work. Mr. Stinnett clarified that the original request was for a simple $25 application fee to cover operations, not a full permit fee structure [0:47:27]. Mr. Beard questioned the equity of a flat fee structure [0:53:31], asking whether small jobs like replacing a storm door should incur the same fee as large renovations. Vice Mayor Lane asked whether fees would discourage historic district development [0:55:43] and whether a tiered application fee system could be feasible. Vice Chair Lane later suggested a two-tiered application fee system based on job complexity [0:56:13], proposing $25 for simple tasks and higher fees for complex reviews. ## Contested Items **Historic Preservation Permit Fees** Council members were divided on the question of whether to implement fees for historic preservation permits. The disagreement centered on several concerns raised during the discussion. One key concern was the potential impact on homeowners and preservation efforts. Council members worried that implementing fees could discourage people from pursuing historic preservation projects. Additionally, there was concern about the possibility of double fees, as homeowners might face charges from both the historic preservation permit process and the building inspection process. Fairness to homeowners was another point of contention, with council members questioning whether it was equitable to impose these fees on property owners seeking to preserve historic structures. Rather than reaching a definitive resolution, the council reached a compromise. They agreed to revisit the issue at a future time with a revised approach: a tiered application fee structure. This structure would allow for differentiated fees based on the complexity or scope of preservation applications, rather than a flat fee across all cases. ## Monthly Budget Report (1-15) [timestamp: 00:00] Finance staff presented updates on several financial matters during this informational segment. **Topics Covered** The presentation included progress on the Comprehensive Annual Financial Report (CAFR), as well as updates on Requests for Proposals (RFPs) for banking services and sewer billing services. Streetlight funding was also discussed. The staff reviewed current revenue and expenditure trends. **Financial Performance** Revenue increased in October, primarily due to timing differences in when payments were received. Expenses were reported as slightly above budget, which staff attributed to historical spending patterns and timing variances rather than overspending. **Key Speakers** Mr. Chair, Ryan, and Bill participated in the discussion. **Outcome** This agenda item was informational in nature, with no formal action taken. ## Board of Architectural Review Fee Structure — General Government Link (16-28) Ms. Kerr presented research on historic preservation permit fees conducted across 70 cities. Her presentation proposed implementing a $25 administrative fee and a $50 design review fee for Board of Architectural Review applications. The council discussion centered on concerns about the proposed fee structure and its potential impacts. Council members debated the fairness of the fees, with particular concern raised about the possibility of double fees when applications also required building inspection review. There was also discussion about whether the proposed fees might discourage property owners from pursuing historic preservation projects. Key participants in the debate included Dr. Blues, Vice Mayor Lane, Mr. Stinnett, and Mr. Beard, who raised various perspectives on the fee proposal. Rather than adopting the proposed fee structure, the council determined that the issue required further consideration. A motion was made to revisit the matter with a revised approach: a two-tiered application fee structure that would presumably address some of the concerns raised during the discussion. The item was deferred, indicating that no final decision was made at this meeting and the matter would return for future consideration with the alternative fee structure framework. [timestamp: 0:23:58] ## Items Referred to Committee Mr. Schoeniger provided an update on items that had been referred to committee [timestamp: 1:03:49]. **Actions on Referred Items:** - The economic contingency ordinance was removed from committee following a voice vote - Local vendor preference and minority business recruitment initiatives were merged with the procurement task force - The itinerant merchant matter was transferred from the Public Safety Committee to the Budget & Finance Committee **Participants:** The discussion involved Mr. Schoeniger, Mr. Farmer, Mr. Stinnett, and Mr. Lane. **Outcome:** This item was presented as informational, providing the body with status updates on the disposition of previously referred matters. --- ## Decisions - **Motion** — passed: Motion to remove the economic contingency ordinance from committee consideration --- ## Full transcript Thank you, Council Member. As I like to do at the beginning of each report is just give you some general overviews of some things that are happening within finance and overall status. And then Ryan and Bill will follow up with the revenue and expenditures. And I'll wrap up the first page of the handout that you should have received. just some updates the CAFR update vice mayor I'm happy to report all component units have been received by us the preparation of the CAFR is still on schedule we are doing some final adjustments with the auditors and we do anticipate completing by the end of December so we are on schedule there We have issued an RFP for consulting services for banking, looking at all of our accounts, the fees, et cetera. The responses are due back December 12th, and then we are going to be going through the evaluation and negotiations and moving that project forward. One of the other projects that you included, our request for funding, was working with Dr. Trosky and the U.K. Center for Business and Economic Research on the revenue modeling project. We have negotiated our agreement with the university and are working with them for helping us go through the mid-year review as a part of that process. But that agreement is really building us a model for revenue estimating that we can use in the future. But in addition to that, he'll be working with us on our revenue estimates as we move forward. In addition, you've heard last time we gave you the heads up about the sewer landfill water quality fee billing project. We actually are issuing two RFPs. One is for the third-party billing and collection services, the actual services. The submissions are due back December 8th. We hope to shortlist those by mid-December, have folks in for presentations in early January, and select that vendor in early January. In addition, it is such a huge project in terms of dollars for the government. We also want to enlist the help of a project manager for that project, so we have also issued the RFP submissions are due back December 7th. Again, hopefully have a short list by December 12th, and then select a project manager. We probably should have had these flipped because we want to select the project manager first so they will be involved in the selection of the actual vendor. Some of you are participating with us in that process, and we do appreciate that help. We will also be enlisting help for the banking RFP review as well. So we have put together an aggressive timeline, obviously due to our notice from Kentucky American, and so we are going to ask for your approval in January for both these agreements and contracts. So we appreciate, again, your assistance and participation in this selection process. The last update that we wanted to just give you a really brief update is on the streetlight funding issue. From the finance perspective, we did participate in a meeting with KU representatives where there was good conversation about continuing to look at cost mitigation options with them and that, you know, right-sizing the number of lights, downsizing the number of lights, looking at different types of lights. There were all kinds of options on the table that we are now pursuing. And as I understand it, the whole group that's been working on this will come back to the council in January with a presentation on an update on street lights. And that's just an overview of some of the big projects within finance, in addition to looking at the financial overview, which is our main purpose today. I think before you go any further, we have questions on the updates you gave us. Vice Mayor Gordon. Thank you, Mr. Chair. I wanted to go back to the CAFR, and I know I sound like a broken record on this, But the reason I do is because I remember a lot of years, late 1990s through the early 2000s, that we received our audit in November. And I just wanted to ask you if you're looking at any plans to put the partner agencies on a diet, so to speak. to get them to move forward and be completed sooner, like Lexington Center was complete in September, that sort of thing, so that we can get our final audit earlier. I think it's really important that we get it before we're halfway through the fiscal year. So I know it's not maybe your top priority right now, but I wondered what kind of thinking you've done about changing the process to do that. Well, we do have a date that's earlier, October 1st. Next year. Those dates. Well, it's actually, we had that date this year. So we will continue to work with those agencies. So, you know, one year is not like any other year as you go through a process. But, you know, our goal would be to complete the annual financial report in November. It gives us, you know, once we get all those adjustments made, we'll have the year in balance. We can share with you. We can make plans in terms of any other changes that we need to make. This is our first full year through the process, and we will meet our required date. But, yes, every year we will have the goal to complete that. Well, I appreciate that. I do. I really, it concerns me that it is our fiscal year will be half over. and I guess I'm thinking, I mean, my perception is it's the partner agency audits that have kind of held us back. Is that fair or not fair? No, I don't think that's fair. I think, you know, some of them that came in later pushed us a little bit later getting information to the auditors, but it's, you know, I was on December 31st schedule in Louisville. There are a lot of factors that I think as the staff gets more tenure, you know, too. Again, this was the first process where we had everybody, the current folks on board. So, you know, I think much earlier than November is not realistic just because of our process and our systems. But I do think our goal is to have it earlier than the end of December. Okay. So will you be tinkering with the October 1st date for partner agencies? You know, I really, the Director of Accounting and I haven't talked about that in terms of actually changing that date or not. But we can certainly take that under consideration and get back with you. Well, I appreciate the work. Or give you a schedule as we develop next year's schedule. So that might be helpful for you. Okay, very good. Thank you. Thank you. Mr. Sinnott. Thank you, Chair. I just want to go back briefly to the Streetlight Fund. I know Commissioner Taylor and I met on the fund and what the administration was working on about a month ago. Did she share any conversation with our meeting with you about some of the ideas we came up with to share up a fund? Not with me specifically, but she may have. Okay. Okay. I'd like to continue that conversation. Okay. If yourself and myself and maybe Commissioner Graham can sit down because it requires an ordinance changes and explore that, because I think that long-term would be the best option. And maybe she may have mentioned some of the different funds. Okay. Good. But, yes, we can certainly. I'd love to do that. Thank you. And then to echo the vice mayor's comments on getting the CAFRA done sooner rather than later, I know we used to have it in November, and whatever we can do to speed that process up, because I, like you, end of December is just not acceptable to be able to utilize it to its full extent. And we pay, what, $150,000 to get it done? And so whatever you can do to help us speed that up. And I know you've had your first trial run. I'm sure there's a lot of things you'll correct going next year. But thank you for your diligence on getting it sped up. Thank you. Thank you, Chair. Thank you. Mr. Lane. Yes, I was also going to refer to the CAFRA, too, and I wondered, were there some technical issues or other issues that sort of held you back, or was it more personnel? Could you give us two or three of the factors that helped delay the report? Well, again, it's not, we are on the schedule that we set out. Again, the component units, some of those were delayed. But there are some other factors at work. We're looking at how the change in the balances are characterized. There's a change in an accounting standard, so we're going through that process currently. So that's something different and not standard from prior years. But the audits, we have a new auditor, which typically adds a little bit more time just because they're coming up to speed. compared to an auditor that's been on board for a number of years. So I think, again, we're on schedule compared to our original. Well, that does make sense because the auditors do take longer the first time around. Yes. Are you in a position where you could say what our preliminary or final budget surplus will be? I will soon, not today. Okay. All right. That's all I have now. Thank you. Thank you. I see no more questions, so if you would proceed, thank you. I don't know if that's me. Just wanted to give you some highlights. Were you going to take – was I going to do – okay. I just want to make sure. Just in general, you're going to see that our October revenue is up. We've looked at this pretty critically, and we feel some of it is due to timing. But in the whole scheme of things, we still have $195 million left to collect. So we want to keep that in perspective in terms of our revenue. I'm always the one that says, let's be cautious. We've got all of these other pressures in terms of future expenditures. The end of the second quarter, Ryan is going to talk to you about October expenses are up in personnel as he goes through his numbers. And we will have a really good picture along with our CAFR. We'll have that ending fund balance. We'll also have six months of revenue, obviously, at the end of the second quarter. Really good picture about where we go with the remainder of the fiscal year. We do continue to have pressures from our health care. We are looking at a proposal to bring to you on how we pay for the subsidy for health care. Collective bargaining, all those agreements are not in place. This sounds like a broken record from last time, but these still exist. The general fund efficiency savings, which is a small amount, but we're still working on achieving that. and then obviously the streetlight funding, which I had mentioned before. So I was going to turn it over to Bill to go through revenue and economic indicators, and then Ryan with expenses, and then I'll wrap up. Thank you, Commissioner. Let's start with our usual graphs for comparison. This is the unemployment rates for the United States, Kentucky, as well as the MSA and Fayette County. And one thing I would point out is that Kentucky and the USA seem to be kind of flatlined, but there is volatility in the Lexington MSA and Fayette County. The unemployment rate went up in September, went back down in October. Don't quite have an explanation for that, but I'd just draw your attention to the difference between the small area versus the larger area when it comes to unemployment rates. The second slide smooths that out by taking a moving three-month average. So the volatility in the Lexington MSA and FEC County is not quite as pronounced, but the flatlining at USA and Kentucky is prevalent. The one thing I also would point out is we are still up here in the 7% and 8% range. We used to be down here below 5%. The next slide gives you a comparison of multiple indicators with a trailing six months. As you can see on the very top, we were at 7.2% unemployment October of 2010. We're at 7.0 October of 2011. That came out after your packet went out last Wednesday, so we added that piece of data. The other good news that continues is that we do have more people employed, even though we have high unemployment. We have more people employed this year than last year. That started to show up in the spring and so far has stayed pretty constant. Our budget reflects a 4% increase in withholdings, and this is showing about a 4% increase in number of people working. The county permits issued is pretty stable month over month. It's lower than same time last year except for October. Similar for the new business licenses, there's not a lot of volatility there. There's no big spike or big decrease that might be a foreshadow of numbers to come. So for October, the month of October looks very favorable until you start to analyze it. The withholdings is up $1.8 million. We're slightly under in net profit. but insurance is up $1.4 million in franchise fees, which is not a major player in October, is up about $33,000. The thing to take into consideration is quarterly payments last year. Well, quarterly payments are always due the last day of the following month, so October 31st is the due date for quarterly payments. Last year, October 31st was on a weekend, and state law says that when your deadline is on a weekend, and the next business day becomes the due date. So last year those payments were due the first week of November. This year those payments were due in October, the last week of October. So that's why we're saying most of the favorable variance in the month of October is due to timing differences both in employee withholdings as well as insurance. If you'll also remember, at the end of September, we were slightly ahead, about a half a percent. So this total 26.2% is all the volatility in October over October numbers. And that's reflected in the year to date. We show that we're up over the big four 6.1%. Again, we were up only 0.5% at the end of September, so this one timing difference between one week and the next, comparing October last year to this year, is affecting our results this year. We do anticipate that some of that timing will wash out when November comes through, and then December will be the pivotal month for the quarter to see how we look. If you look at those two previous slides were to the budget. If you want to see how we're doing comparing to last year, These are the year-to-date October of 2010 compared to year-to-date October 2011. And as you can see, it's up 8.18%, which is more than what I showed you in the slide before compared to budget, which makes sense because our budget did show and incorporate increases in both net profit, employee withholdings, and franchise fees. Do you have any questions on October results? I see none. Move on, please. Thank you. I think Bill articulated two areas, both in withholdings and insurance, where timing was the answer why we were trending a little bit above budget. I have one of those as well. But in the services category, I wanted to shed some rain on that category as well. The sheet in front of you shows almost a $2 million, over a $2 million favorable variance to budget. But once we inspected it, there's two issues that we can substantially wipe out that variance year to date. There's a quarterly payment that was received for fees and collections last year that was received in April. This year we received that earlier, and that attributes to about a $1.1 million timing variation. And then in detention fees, we also noticed an outlier of $1 million. State passed House Bill 463, and whereas the state previously paid this in monthly installments, we received a one-time lump sum payment in advance of $1.1 million. So that $2.1 million timing variation essentially wipes out the services category there. And we are on budget in the services category when you factor in those two timing variations. Moving to the expense side, as we articulated last month, we are about $1.5 million above our personnel budget. The trend has continued where we're $700,000 above budget and personnel category attributable primarily to collective bargaining and those not being in place. The favorable variance in operating of almost a million dollars also seems the theme of today has some variations in timing. Similar to the services category, there was medical spending corrections. they are renegotiating that contract where last year we spent money quicker through a larger purchase order than encumbered those funds and spent those there now moved to a month to month for those medical services instead of paying several months in advance. So when you look at the encumbrance that was booked in the very beginning of November, there was about a half million dollars in expenses that hit later than last year. Again, the budgets are built on historical spending patterns. And there's also $200,000 that has not, no grant matches have been hit thus far, where last year they were hit through the end of October. So there's about $600,000 of expenditures that we believe that we have not put in the budget expenditures year to date. So when you look at the total expenditures in terms of us being above budget $127,000, and you can add another $600,000 to that. So almost three-quarters of a million dollars were over budget, again, year to date, just based on historical spending trends. Any questions, council, committee members, CNN Commissioner? I just wanted to wrap up with our challenges that we continue to work with. Obviously, the revenue at midyear, again, we'll come back and have a better picture in terms of projections through year end. And we'll also have Dr. Trotsky's thoughts on that as we move forward. health care, identifying those areas, which we're going to reduce to pay for health care. Collective bargaining, as Ryan mentioned, we still just have the one contract settled. I already mentioned efficiency savings and streetlights, but our list is longer than this, but the ones that we've talked about prior to are the capital needs, having adequate reserves, the whole pension issue, the firefighters' overtime suit, which is not on this list, but it probably falls in the category of future issues to deal with, and just the general economy, the nature of the current economy. So, again, these are just the things we continue to work with and want to be up front as we address these issues with you and work through this fiscal year. So I'd be happy to answer any questions about any of those issues. Council members, log in if you have any questions. Seeing none, I think we'll move on to the next item on the agenda. Thank you, Commissioner. Appreciate it. Thank you. The next item is the Board of Architectural Review fee structure, and this was put in from the general government link. And I think we have Ms. Kerr here that's going to talk to us on this. Welcome. Thank you. Good afternoon, Council members. Yes, during the budget preparations for this year's current budget, as you're aware, the Link Committee requested that Historic Preservation look into charging fees for the permits, referred to as certificates of appropriateness, for the permits in the local historic districts. We have had local historic districts, as you probably are aware, since 1958, and two local landmarks, I should say, and those properties encompass about 2,000 properties. We researched as part of this, Amelia Armstrong, our preservation inspector in our office, researched about 70 other communities, cities, varying ranges of sizes. We kept track of the population data a little bit as we did that and found a kind of broad spectrum in that sense. If we want to, where did the clicker go? Here it is. I'm going backwards. Have I gotten myself in this? Put my finger on the wrong button. Apologize. As part of the research of these 70 cities, a little over half of them do not have any permit fees for their historic district processes. And Lexington has not had a permit fee to date for the same. And you will see that within the cities that we found that did have permit fees, of which there is a range, obviously, of size and so forth, there are six other cities in Kentucky that are what are called certified local governments. Lexington and Fayette Urban County Government is a certified local government per our preservation program for the city and county. That comes through the federal mandate, then to the state level and to the local level. So we have here in Kentucky six other certified local governments that do have permit fees included and other cities as well throughout the nation. The range of the fees that we found within those cities, as you can see, they basically broke down into two categories. a fee for administrative-issued permits, and a different fee for a design review board heard and processed application and permit issuance. And so the range for those through these some 30, 35 cities ranged from $0 to $75 for the administrative level of permit fees, for ones that went to the design review board, $25 to $100. Demolition permit fees for these ranged from $50 to $500 and plus. And then retroactive permit fees. Frequently, the permit fee was at least doubled and sometimes had pretty hefty penalties that came with it, hence the figure of up to $500. But the norm seemed to be whatever the current permit fee was to double that fee. And the permits issued within Lexington's preservation process, we do handle in a similar fashion a large number of them. The permits are issued administratively and don't go to the Board of Architectural Review. That constitutes about 65% of the applications that come into the process. And they include things such as replacement of roofs, doors, windows, general renovation of an existing condition, repointing and tuckpointing of brick, satellite dishes, replacement of pavement where it's in existing condition, pavement that is just an introduction of a small area where it may not have existed before, installation and replacement of side and rear yard fences, and the removal of trees if they are unhealthy. We work with the urban forester if they are unhealthy. Trees greater than 10 inches in diameter do go through a review process at the staff level for the most part, occasionally to the Board of Architecture review, if it's found by the urban forester that there's nothing unhealthy about the tree. So just to give you some idea of what constitute the staff-issued, staff-level or administrative-level issued permits. Just a few pretties to break up the type of some of the projects going on in the local historic districts. And then categorically, your design review board-handled projects tend to be the ones that result in a more substantive change. All new construction goes to the review board. All demolition requests go to the review board. Construction of additions and or free, entirely freestanding, entire structures. Installation of front yard fences. It's interesting. People feel very strongly about fences sometimes, and through the years it's been learned that the front yard fence part, particularly the public, wants an opportunity to participate in. So those go to the Board of Architecture Review. and creation of parking areas and so forth and so on. So those constitute about 30 percent, give or take 30, 31 percent, something like that, of the applications that come through the process. So what we're proposing, based on the research that was done, and it is consistent with the communities that we found did have permit fees of a similar size kind of community and so forth, is to divide the permit process and the fees accordingly. It would follow the existing permit process. The administrative or staff-issued permits would be $25. Ones that go through the design review board process would be a $50 fee. Demolition permit for a primary structure would be $250. Now, this would not include demolition of garages. That's a very common request, and it's commonly approved. And so that topic would fall back in your $50 fee because that would be something reviewed by the board. But it would not be consistent with what we were finding in other communities to have that have as high a tag as demolition of an entire structure. New construction for an entire building would be a permit fee of $150. And then for fences that are handled at staff and the board, we didn't think you should penalize people for the fact that their fence is in their front yard. So we just administratively are suggesting that all fences, regardless of staff issued, which is 95% of them, or board issued, which is probably 3% or 4% at most, be $25, and then that if people had already started work without a permit, that that fee would be a minimum of $75. And as I mentioned, these fees, as we're recommending, are consistent with those that we found through our research in communities that do have fees. There were a number of communities that do not have fees at all in their historic process, and over the years that has been more the norm, But we're certainly aware with this economic times that it's really getting to be a challenge. And we think that this would generate between $10,000 and $12,000 per year for the LFUCG. The process handles between 400 and 450 permits annually at the current rate and has for the last, that's about a five-year tracking. Questions? We have a couple questions here. Go ahead. Dr. Blues. Thank you, Mr. Chairman. Betty, if we instituted this fee structure, how would we explain or justify it to the people who would pay the fee? That's my first question. And then my second question is, if the municipalities that now do charge fees, do they experience any negative consequences of that? That is due, you know, might it be that there would be an increase of people building a fence, say, without getting a permit and that sort of thing? Well, to answer your second question first, I think that is a legitimate concern. We did not in our research talk one-on-one to all these different preservation programs, but did talk to some, and some of the ones who just flat said they won't consider fees is because of that very reason and sort of the negative pushback that can come. Historic districts have meant to be a mechanism to entice people to improve these historic structures and put money into these areas that sometimes have been in less than desired status. And so it's wanted to really not have any burden, additional burden, put on people who are trying to carry that out. And that's been historically where Lexington's program has been, along with many others. I think that it is very possible there will be people perhaps wanting to not get a permit because of the expense. One thing to keep in mind, there's also expense at building inspection end when they get their building permit. And so their fence, for example, has a $25 fee at building inspection as well. And so that means that Joe Q. Public will pay a $50 fee to the urban county government between the two entities. And I do have concerns about that, to be quite honest. The council and administration asked us to look at doing the fees. I think that it's important to do so, but I think there are downsides to it. Remind me of your first question. I'm still a little jet-lagged. The first question would be how do we explain it to the person who is going to have to pay the fee. Well, I think everybody's probably aware these are pretty time-consuming applications in terms of when people make a submittal to this program for the permit to be issued, staff has to go out and look at the property, review drawings if indeed that's necessary, and counsel with that applicant, sometimes a little, sometimes a good bit. So each one does take a considerable amount of time. There is expense also to the LFUCG in the legal notice functions that we're required to carry out through the notice in the Herald Leader, and also we send, per the ordinance and per the state statute, letters to people within 200 feet of each of these applications for the ones that go to the Board of Architectural Review. Legal notice does not have to go out for that 65% of the applications that's handled administratively. So it's only a smaller portion that have to have the expense of the legal notices. But those are the kinds of things that I hope that property owners would take into consideration if a fee does indeed need to come about. I appreciate those answers, and I think that's something that we'd want to consider. We're not talking about a substantial increase in revenue if we did institute these fees either. It's not able to be, I think, a big money generator in the big picture, no. Not at all consistent with what our research has found. Right. Thank you. Thank you, Mr. Chairman. Thank you. Vice Mayor? Thank you, Mr. Chair. Thank you very much, Betty. I had some questions very similar to those of Councilmember Blue's in particular about the impact. And I wondered on your slides about, I guess, page 25 and page 27, the types of permits issued by the BOAR and then the proposed fees. On the proposed fees, the new construction primary building permit fee, I just want to be sure I understand what that is. Is that if someone goes before the Board of Architectural Review and they get a permit for demolition, is that a permit for rebuilding? Or what is that? They'd be two separate ones. The demolition request, if you had a structure on a lot that was structurally unsound and beyond being able to be renovated and the board granted approval, that would be a demolition permit issued in accordance with that. And then if you wish to build a new structure to take its place or to sit in a similar scenario, that would be a new construction permit. Now, they might be rolled together in a paperwork sense, and I think some mechanism could be considered to reflect that in the fee structure as well. But in light of the fact that new builds, building inspection for new construction, everything is based on how many square feet times a formula. One of the problems with that in the historic buildings, a lot of them, more normally what you're doing is a room addition or a bathroom addition or kitchen additions or whatever. And sometimes there's not as much drawn as would be necessary for a building permit. And one of the things we're trying to avoid is have people have to generate architectural drawings that aren't really necessary because that indeed has additional expense. Well, is this permit fee for new construction, is that on top of a building inspection permit fee for new construction? Yes. So it's kind of like a double whammy in a way to the property owner. And I think that's a very legitimate concern. Some of these, I guess you could, some of these aren't a double fee, and some of them are? Many of them are a double fee. Fences, for example, need a building permit as well. Any new construction, I'm looking at the list of either an addition and or a freestanding house. You do get a demolition permit from building inspection. Things that, let me go back to the administrative. It's mostly things that go before the BOAR, correct? Yes. So if I live in a non-H1 district, and there's one on here about replacing your front sidewalk and driveway. Right. You do not get a sidewalk permit from building inspection. However, you may need a curb cut or something through engineering. The things such as replacement of roofs and windows and this sort of thing that result in the status quo staying the same and are not structural, broadly, I think it would be safe to say you will not get a building permit as well. And that is a chunk of what comes before an H-1 process. But the more we researched and got to sitting and looking at what would occur, it was really brought home to me the possibility for double impact. Right. Well, I appreciate your work on this. Thank you. Thank you. Thank you. Mr. Myers? I'm sorry, Mr. Lane. Thank you, Mr. Chair. Welcome today. How are you? Thank you. Very well. Thank you. If you were to charge a fee for services under granting permits, whatever, do you have to prepare any additional paperwork to do that, or will you just add a fee on top of what you're already doing? Well, the work to accomplish the issuance of the permit would continue to be the same. The only additional piece that would happen would be processing the payment and depositing it and that sort of thing. So the paperwork to track the fees. But the process to carry out the issuance of a permit would continue in a similar fashion. Okay. Do you envision that you would have to add any new employee to handle the paperwork and the processing of the checks? Well, quite honestly, given our financial situation, I've just always, like everybody, acknowledged that's highly unlikely to be possible, and so we're committed to doing whatever additional would be necessary should this be decided to be done with our existing staff. Now, as the economy improves and people are doing more construction and renovation and so forth, lots of things could change, and there might be a need to restudy that in the future. But for the current time, I'd say no. Would it be possible for the – I guess you have a conflict issue here. I was going to say it would be nice if the people issuing the billing permits could also, So if there was a historic review of the property and an additional fee on that, it would all be processed as one thing. But as you were pointing out, if you replace your doors or windows and there's an architectural issue there to maintain the historic character of the property, then that could be done as a replacement, which does not require a permit, but would need to have your approval to get that done. I think it would be complicated under a scenario of suggesting that building inspection, for example, could reflect the two pieces, because a certain percentage, as you've just said, don't ever need to go to building inspection, and it would be difficult to track that. Well, your budget for the fiscal year is $362,000, and I believe you mentioned that you processed $400,000 to $450,000. permits per year. If you just average that at $425, the average cost to process the average deal is about $850 per process. The good news is we do a lot of other things in addition to the H-1 permitting process. So there are many other services being provided to the historic community that don't result and permits, National Register work, Federal 106 reviews, all manner of other programs that are also reflected in that staff budget. So it would reduce your per permit number considerably. And then the other question, if someone owns a house on the Historic Registry and they do a renovation on it, do they get any type of tax incentives for doing repairs and maintenance and updates? There is the possibility for properties listed on the Federal National Register of Historic Places to get federal and state tax credits. And we help people with that in terms of making them aware of it and how the program works and so forth. It is limited to investment properties for the federal tax breaks and is available to resident-occupied and investment properties for the state. All right. Well, you know, if the recommendation of only $10,000 a year in fees on this, I don't think that it's a good economic justification to charge fees unless they were, you know, covered more of the cost of issuing permits, what have you, because just processing a check might cost $10. And so to charge $10 to issue a bill, to get the check, to deposit, to do all the accounting on it, I think is sort of not worth much to the government. So that's sort of my read unless the fees were higher. Thank you, Mr. Chairman. Thank you, Ms. Kerr. Thank you. Thank you, Mr. Myers. Thank you, Mr. Chair. Thank you, Ms. Kerr, for coming in today. At the end of this presentation today, is it your goal that we move this forward? Well, my goal today was to provide you all the information that you need to weigh this per the Council and the Administration's request. And if it is your desire for the program to start initiating fees, then yes, we would need to move ahead to carry that out. I think there are as many detriments to considering putting these fees on as there are pluses. And so if in a perfect world, I think it would be best to not have fees put on. But I wanted to be sure that I carried out exactly what you all had requested so that we could all have this discussion. Okay, so then you don't recommend that we do this? I believe the historic districts and the community would be better served if we continued to not have fees. Oh, okay. That's great with me. I don't really have any more questions then. Thank you very much. Thank you. Thank you. Mr. Stinnett. Thank you, Chair. Thank you, Chair. I know I was on the link that made this recommendation back to explore these, and I remember differently what we asked for. I don't think we asked for this level of fee structure. What we asked for was simply an application fee because you get $4 to $4 to $450. Is that in applications or is that permits issued? We actually probably get about $450 to $470 applications, and we issue $400 to $450. I don't know anywhere else in government where we don't have an application fee, and I think simply doing a $25 application fee, which would generate close to $11,000, and your operating budget is $12,000 just for operations, it would cover that. And I don't think that's unreasonable to cover her operation costs. Obviously, it's not covering personnel, but it would cover operation costs for the administration of the application. I'm not so much for all those other fees either. I think they're overkill, doing a demolition permit fee and another offense fee and all that. But I do think an application for anybody that submits one is reasonable because I don't know anywhere else in government where we don't do that for any type of application. So, and that's maybe park and rec, but even though there we probably charge for the activity. So you all didn't just look at that? Yes, we included looking at application fees as opposed to permit fees in our research. We found that most communities, if they have a fee at all, it is for the issuance of the permit, not an application fee. There were a few that did have an application fee of $20, $25. So I guess I'm trying to go back to your previous statement you made with Councilman Myers. How would it hurt the community, especially the historic preservation community? Because if I look at the rest of the city that's not historic, it's a majority out there that would benefit from this because it would balance pay your operating costs, the cost it takes to administer some of these programs. Well, the application fee, say it were hypothetically $20, $25, $25, would match what is your base permit fee for 65% of those applications, that being the ones issued in an administrative or staff fashion. So I think philosophically we're not far apart, the difference being that what we found in our research was if you have fees, that distinctions were made about the level of where that permit came out of and so forth. I think it really comes back to the whole pro and con of requesting of these property owners to pay any fee and also taking into consideration that they do go to building inspection as well. And I'm really not trying to lobby you one way or the other. I do want us to do just what we're doing, have a very forthright and informed discussion. And what we were trying to do in our material is provide you with the data that reflected the whole range of possibilities. And I appreciate that. You did give us a nice range. But going back to the link discussion, I think we were more worried about the application process. And I think fees and applications are two total or permit fees and applications are two totally different animals. I think building inspection fairly reviews and charges a permit fee. but I think under your circumstances being a separate division, and you're getting applications where you're not approving them, but you're still doing the work on those applications, which are very few. They're probably about 3% to 5% of the applications annually are not approved, so it's a pretty small number. But, yes, I understand what you're saying. I just don't think an application fee is unreasonable out there if we're really going to look at that type of system. So thank you, Chair. Thank you, Mr. K. Thank you, Chair. Thank you, Betty. In your research, this may be a question you can't answer. Were there communities that instituted these fees after the historic districts or their equivalents had been established? So enabling legislation to set up historic districts and then fees added as opposed to having fees when they were first set up. Do you know anything about that? We didn't attempt to track the dates that they implemented fees tied to the dates that they created their historic districts. That's an interesting question. I would broadly suggest that without it being fully researched or researched at all in that sense, just knowing the preservation businesses I have over these years, no community had historic preservation permit fees for many, many years, and yet we've had historic districts for many, many years. And so I think many of them have come to be after the fact, after the district has been created, after the legislation has been put forward, and as time has passed, they have come to have some of these communities, these fees. But we did not research that question specifically. Okay, but the kind of walking around evidence is that there were communities that instituted these fees after the programs had been set up. That's likely. Yes. And so I guess my next question would be, again, I didn't research this, but what impact that then had on whether new historic districts were approved or? Right. And that's data we don't have this time. It would be interesting to try to gather, but we do not know that at this time. Okay. And finally, just a comment. I appreciate Council Member Stinnett clarifying what the original request was, and I would agree that an application fee makes a lot more sense than a whole set of permit fees. I think that would be a disincentive for the present system, and if there's any notion that there will be additional historic districts, I think it would be a much harder sell. So thank you, Chair. Thank you, Betty. Thank you. Mr. Beard. Thank you, Chair. Betty, as far as fees are concerned, if in fact they were charging fees, is there a threshold as to, and I'll give you an example, a storm door is being replaced, one storm door. Still pay the same fee as if you're putting storm windows and doors all around your house? Yes, if indeed you're issuing a permit and that permit has that price tag. I don't know how we would reduce that fee because only one element is on that permit versus more. And it's one of the reasons that I think there are challenges to trying to put something like this into place in our historic areas because we do run that full gamut from that very simple storm door up to a total new construction on a parcel. Then the question is signage. A commercial establishment of some sort has a garish sign that is seen as last days, let's say. And so they put up something more appropriate to a historic district, and we're going to charge them to do that? Signs are reviewed by the design review board. The staff is not empowered to issue permits for signage. And so they would be, if they were to elect to do that, getting a permit through the BOAR, then having the $50 fee for a BOAR reviewed. And then the last thing I guess I had to question concerning a historic area is the satellite dish. It doesn't quite fit into my picture of what a historic district might be. But they're living and breathing neighborhoods, and we do have modern conveniences. That's exactly right. And they are staff. Especially if you've got trees. They are staff issued. And, yes, the positioning of them can be very challenging. I don't mean to be flipped. They certainly are just part and parcel of what comes with the process, and they are handled at staff issue. Thank you. Thank you, Chair. Thank you. Vice Chair Lane. Thank you, Mr. Chair. Coming back to the question, I also concur the idea of permits does not register well with me, but I think just an application fee is a good strategy. My thought, though, is that perhaps you could have two fees, one for small stuff like putting a satellite dish up or some small thing, and then if you have to go into a lot of review and investigation, maybe review plans, have hearings and all that, maybe for a bigger scope, and you would be able to determine, based on your track record of doing this in the past, issues that take a bigger amount of time than maybe the application fee because you'd have to spend more time to review. It could be a little bit higher. I think that approach would support that. Would you be able to perhaps evaluate the scope of different jobs and maybe come back with a list for a $25 fee and then a fee for another amount for the more extensive issues that need to be handled. I certainly will be glad to do that if you all would like. And I would say just quickly, I think you'll find that about 70% would be in that $25 category, and then the other 25% or 30% have the more complicated scenario. But we could certainly put our thinking caps on about that and get back with you with the concept of just an application fee. I must have, at the link committee, we didn't go into much detail about it, and I thought we were just charged to come up with ways to raise some funds to facilitate the operations of the program. And so I may not have taken it quite as literally in the terms of application fee versus permit fee as perhaps you all intended for which I... Coming up on Lexington Mouth, the Beem News Conference, Tree Liding Festival in Triangle Park, downtown holiday events, and the Lexitram holiday bus schedule. This and more up next on this week's edition of Lexington Now. Thank you, Mr. Stinnett. I was just going to circle back and appreciate the comments that Councilman Lane said. And with regard to how much, so when someone submits an application, how much time do you spend on that one application, usually your norm or anything? With it going that gamut of everything from a storm door replacement to something quite complicated, I would say that it goes anywhere from an hour and a half to tens of tens of hours. And can they do these applications online? Not at this time. they can download it online to get their paperwork, we still have to have a real signature. Okay. So we have to have a legal real signature. And last but not least, what do we charge the Planning Commission for a zone change application or a Board of Adjustments application to? Do we know, does anybody know what we charge for those? That I do, I'm not myself familiar with, but. Because it would seem to me this is in line with the zone change application or a Board of Adjustments application. We got info about predominantly building inspections fees, and we might need to get back with you on that. Yeah, just curious, just trying to think, you know, parallels, other systems that we have that we charge fees for for applications. Here's their official filing fee schedule, and they range from $150 to $1,000. Is that a planning commission? This is for zoning amendments, board of adjustments, subdivision and development plans, re-approvals and extensions of continued discussions, wireless tower applications, and so on. So not to cut your department short, you're doing the workload that a lot of them are doing, and they're getting a lot more money to do that. They are, but I think our difference is our client. Sure. Our client are predominantly homeowners, sometimes investors, who are putting their stake in predominantly their residence, and it's more difficult, I feel, to ask those parties to pay those higher fees. And we really struggled with, in terms of all the research and data we found, what could be done that would raise some money but still be equitable and fair to those property owners. Yeah, and I'm not suggesting charge higher fees, but I think when you start comparing a $25 application fee to some of those fees, it looks very minimal just to do the process. So thank you, Chair. Thank you. Vice Chair Lane? Yeah, just a quick follow-up question. Could you go over the number of people on your staff and what their job titles are so we could get sort of an overview of how you're handling the operations there? Right. There are a total of five of us, including myself and an administrative person, and then the other three individuals. One is Amelia Armstrong, our preservation inspector, who she's predominantly out in the field, as it sounds, doing inspections and meeting with applicants about their applications, but also works with preparing the materials for the Board of Architecture review meetings and issuing permits. Martin Genacchio is our preservation architect who does similar of reviewing the plans and working with applicants and so forth. And then Randy Shipp works less so with the H-1 overlay process and does more of our federal 106 review process and a large gamut of other pieces of the program not tied to the local districts. We're such a small staff that we all do whatever is needed on an ongoing basis. So you have an architect on staff, and do you have any other professionally designated people on there? Myself, I'm an architectural historian, but no, we don't have any additional license type planner or anything like that. All right. Thank you. Vice Mayor Lane, you had asked for two different billing and fee structures. Do you want me to make a motion on that? Well, I didn't know if you want to do that or if Ms. Kerr was going to get back with us on that or how we want to follow through with that. I mean, I don't know if I'm making a motion, but I think Ms. Kerr would probably get back to us on a timely basis. Do you think you could have something back, you know, maybe? We can leave this in committee, and when you get that back, we can put it back on. For our next meeting, it's in January, I believe. Maybe you could just come back on January in the meeting and give us a little mini-report. Surely. I'd be glad to. You can get with Mr. Schoeninger here, if you would, please. Surely. And for that, we'd like to look at an application fee with kind of two ranges. Right. And, of course, you may make a different recommendation if you wish after you review it because you're the expert on it. I was just thinking some small thing, $25 seems reasonable. And if you have a renovation, a substantial amount, and you have to spend a lot of time, and it goes before the commission for hearings and all that, maybe the fee should be a little bit higher. Maybe $100 or $150 for something like that. Okay, thank you. We'd be very glad to look at that and come back to you with some further breakdown. Okay. Thank you, Mr. Chairman. Thank you. I see no further questions on this item. We'll go on to the next one. Thank you, Ms. Kerr. Thank you. And the last one is the items referred to committee. Mr. Schoeniger, if you would just give us an update. I'd be happy to. First of all, there are a couple corrections on this. Under the solid waste cost revenue tax structure that the Vice Mayor referred, under the status, that should be the waste management task force, not the solid waste task force. and also under the purchasing, procurement, and professional services selection process, reporting back to the full work session on November 29th today rather than two weeks ago. But I'd be happy to go through the list. We've had the first item, obviously. The second item, the review of the economic contingency ordinance, that's still in committee, I believe, and I think Council Member Farmer wanted to leave that in committee for a while, I believe. Mr. Farmer. I felt like we had a good discussion about it last month. My question is related to what the trigger mechanism was for that process. I felt like after we reviewed it, it was well-suited, well-suited. I would be in a position, unless there's another facet to this I'm unaware of, just to remove it from committee consideration because we had a good conversation about it last month. We have a motion to remove. We have a second. Any discussion? All those in favor, second. Oh, I'm sorry, Mr. Stenet. Well, I would just add the caveat that we haven't seen what the budget looks like after December, and we don't know what the administration's plan is for a budget reduction. And that $50,000 a month we're putting into the fund may need to be reviewed, again, leaving the flexibility. I'm not saying we should do that. I'm just saying that's $300,000 the next six months that we are required to put in by ordinance, and that may need to be abated or may need to have some flexibility if we get into a situation where through December we don't have revenue. So I would just maybe keep that thought, and we can take it out for now, but we may have to revisit it if that is an opportunity. And I think you're right. I think we could take it out, and if we need to put it back in, we can do that and discuss it later. Right, certainly. Any other discussion? I would just say as we had this discussion last month and talked about that very potential, the mayor indicated flexibility on that item, too. So I think he's aware of it as long as we're all aware of it. It's one of the things at our disposal as we continue to work very hard to make our budget work. Thank you. Mr. Lane? Yeah, I concur. Sure. I think it's good discipline to continue to put the $50,000 in the contingency account so that there's not a period where we're not putting money in. And then if we need to get it out, then we can vote it out without any problem. So I would encourage us to keep the money going in. And now if the Commissioner of Finance comes in and said, you know, our cash flows are dismal, then, you know, we'd have to reevaluate that. I think the commissioner would be our lead person as to whether to put the money in or not. Thank you. Any other discussion? All those in favor of removing this from committee, say aye. All those opposed? That passes. Thank you. Mr. Schoeniger. Thank you, Council Member. The local vendor preference referred by Vice Mayor Gorton and the minority woman in business recruitment referred by Council Member Stenet were in some way merged with the purchasing procurement and professional services selection services. Whether that satisfies counsel today, I don't know. We'll be discussing that at the work session today, and unfortunately in there we really don't go in depth on that because that was not part of what the task force, their charge was. So we really haven't answered those questions. So I think we're probably going to have to go in more in depth on that and probably ask the task force if we'd like to today when we meet, if they'd like them to bring that up in the task force, and we can reinstitute the task force and discuss those issues. And that might be a possibility today at the work session to do. And then the last item, the itinerant merchant, that was originally referred in April by Councilman Henson to the Public Safety Committee, and that was recently moved from public safety to budget and finance by the vice mayor. and I think that's the end of what I think. Thank you, Mr. Schoeniger. Any other issues before this committee? Do I have a motion to adjourn? So moved. A second? Second. All those in favor say aye. Aye. We are adjourned. Thank you.