# Council Budget & Finance Committee - January 31, 2012 > Auto-transcribed civic record · January 31, 2012 - **Permalink**: https://meetings.lexingtonky.news/meeting/2379 - **Source video**: https://lfucg.granicus.com/player/clip/2379?view_id=14&redirect=true - **Date**: 2012-01-31 - **Last revised**: July 17, 2026 - **Length**: 7,197 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 Lexington-Fayette Urban County Government Budget & Finance Committee met on January 31, 2012, at 1:00 p.m., with Chuck Ellinger presiding. The committee addressed four agenda items during the session, including a discussion of the Board & Historic District Fee Structure, which was deferred for further consideration. The committee also heard an informational presentation on Activity Based Costing regarding Lane, and reviewed other business and items referred to the committee. The meeting included three public comments and one motion and vote. ## Attendance The following individuals were present at the meeting on January 31, 2012: * Chuck Ellinger * Ed Lane * Richard Farmer * John Stinnett * Paul Schoninger * Bettie Kerr * Scott Seymour * Jim Gray * Vice Mayor Gordon No absences or late arrivals were recorded. ## Votes and Decisions A motion was brought forward to request Ms. Kerr return with a three-tier fee arrangement proposal, consisting of one option at no cost and two others at reasonable levels designed to offset costs without exceeding them. [timestamp: 00:23:08] **Motion Details:** - **Moved by:** Ed Lane - **Seconded by:** John Stinnett - **Vote type:** Roll call - **Outcome:** Failed **Vote Count:** - Ayes: 3 - Nays: 4 - Abstentions: 0 **Voting Record:** *In favor (3):* - Chuck Ellinger - Ed Lane - Richard Farmer *Opposed (4):* - John Stinnett - Paul Schoninger - Bettie Kerr - Vice Mayor Gordon The motion did not pass, falling short of the required majority with three votes in support and four votes in opposition. ## Budget and Financial Actions The meeting addressed revenue generation from application fees related to historic district oversight. **Certificate of Appropriateness Fees** The board approved an appropriation of $12,000 in revenue from application fees for Certificates of Appropriateness in H-1 Local Historic Districts. This revenue source supports the administration and processing of applications required for properties within designated historic districts seeking approval for modifications or improvements. ## Public Comment Three speakers addressed the meeting with concerns regarding financial management and reporting processes. **Ed Lane** [timestamp: 00:24:51] spoke about activity-based costing implementation. He expressed concern about the need for better cost data to manage government operations efficiently, particularly during economic downturns. Lane emphasized the importance of understanding the true costs of services, specifically citing golf courses, swimming pools, and real estate operations as examples where accurate cost tracking is essential. **Vice Mayor Gordon** [timestamp: 00:35:30] addressed indirect cost allocation and activity-based costing. He asked about the committee's approach to allocating indirect costs and inquired whether desk audits are being used to track time spent on activities. Gordon noted that transparency in cost allocation is essential for accountability. **John Stinnett** [timestamp: 00:46:27] raised concerns about the timeline for CAFR (Comprehensive Annual Financial Report) and audit documents. He emphasized the need to accelerate the CAFR production process to align with the budget cycle, noting that the current timeline delays critical financial reporting. ## Contested Items **Historic District Fee Structure** The council was divided on a proposed three-tier fee system for historic district services. The motion to request implementation of this structure, which would have included a no-fee tier alongside two other fee levels, failed with a vote of 3-4. This split decision reflects fundamental disagreement among members regarding whether the proposed fees appropriately balance cost recovery with accessibility, or whether they are justified from an administrative standpoint. The close vote margin indicates that council members held substantively different views on the merits of the fee proposal, with neither position commanding clear consensus support. ## Board & Historic District Fee Structure [timestamp: 00:00:00] The committee discussed a proposed two-tier application fee structure for Certificates of Appropriateness in H-1 Local Historic Districts. Under the proposal, staff-reviewed applications would cost $20 (representing approximately 65% of cases), while applications requiring Board of Architectural Review would cost $50 (representing 30–35% of cases). The estimated annual revenue from this fee structure is $12,000. **Key Speakers and Positions** Bettie Kerr, Ed Lane, Richard Farmer, and Vice Mayor Gordon participated in the discussion. **Concerns Raised** Several concerns emerged during the discussion: - Questions about whether administrative costs justify the proposed fee levels - Potential barriers to participation that fees might create for applicants - Uncertainty about whether fees should be tied to building permits or structured differently **Motion and Outcome** A motion was made to request a three-tier fee system that would include a no-fee tier in addition to the two proposed fee levels. This motion failed. The agenda item was deferred, indicating the matter was not resolved and will be revisited at a future meeting. ## Activity Based Costing — Lane [timestamp: 00:24:51] The committee received an update on the organization's efforts to implement activity-based costing (ABC), a method designed to improve cost accounting and financial transparency across divisions. **Presentation and Progress** Ed Lane, Richard Maloney, and Jane Drissel presented updates on ABC implementation efforts. The presentation highlighted progress on several fronts: - Monthly division meetings to review and refine cost allocation practices - Development of performance reports to track financial data by division - Improved cost allocation methodologies to enhance budget transparency The CAO and Jane Drissel emphasized steps being taken to strengthen divisional ownership of financial data, enabling departments to better understand and manage their costs. **Challenges Acknowledged** The committee recognized significant obstacles to full ABC implementation, including: - System complexity in tracking and allocating costs across operations - Time requirements for staff to learn and apply new accounting methods - Financial costs associated with system development and training **Committee Decision** Despite the acknowledged challenges, the committee agreed to continue pursuing activity-based costing improvements. The outcome was informational, with the committee receiving the update and supporting the ongoing effort to enhance cost accounting practices and budget transparency across the organization. ## Other Business The committee discussed the delayed release of the Comprehensive Annual Financial Report (CAFR) and management letter. Vice Mayor Gordon and John Stinnett addressed the timeline for these documents, which the auditor is expected to deliver by early March. The committee emphasized the importance of accelerating the audit process to support the upcoming budget cycle. This acceleration was identified as a key priority to ensure the financial documents would be available in time for budget planning activities. In response to these concerns, the Chief Administrative Officer (CAO) committed to developing a revised timeline that would address the committee's need for expedited delivery of the audit materials. The outcome of this discussion was informational, with the CAO taking on the responsibility of creating an updated schedule for the CAFR and management letter release. ## Items Referred to Committee [timestamp: 00:47:01] The committee reviewed a list of items that had been previously referred for ongoing consideration and action. Paul Schoninger presented the status of these referred matters. The following items were confirmed as remaining active: - Comprehensive Review of Economic Contingency (removed from the list) - Solid waste management - Procurement task force items, including: - Local vendor preference - Minority women business recruitment - Itinerant merchant task force - Activity-based costing - Street lighting fund The committee confirmed that these items remain active and will be addressed in future meetings. This was an informational discussion intended to ensure that previously referred matters continue to receive attention and progress toward resolution. --- ## Decisions - **Motion** — failed (3-4): Motion to request Ms. Kerr return with a three-tier fee arrangement, one being no cost, and two others at reasonable levels to offset cost without exceeding it --- ## Full transcript Update on the finances that we had at our budget retreat so we don't have to reiterate those issues. The first item on the agenda is the board and historic district fee structure, and I think Mr. Lane is going to go ahead and tee it up for us, and then we'll have Betty Kerr speak. Thank you. Thank you, Mr. Chairman. I'm the chair also of the – I'm not the chair also. I am the chair of the General Government Committee. and during our LINCS review of this issue of charging a fee for permitting for the Board of Architectural Review Services, this came up as an issue and was a recommendation for that group to make a suggested fee structure presented to the Budget and Finance Committee. So Betty Kerr, who is the director of that organization, is going to make a presentation for us today. Thank you very much. And welcome. Thank you. Yes, I'm Betty Kerr, director of Historic Preservation, and thank you for inviting me back. I'll be very brief in the materials, at least. At the last discussion, as Council Member Lane has eloquently put forward about the Link Committee's interest in pursuing possibilities of a fee, I know you'll recall at the last committee meeting discussion of some options about that and that you all asked that we look at an application fee that would have two tiers. And so I believe you have the memo in your packet that we generated that reflects that. And essentially, instead of pursuing a permit fee scenario, such as we discussed last time, per your request, we've looked at doing application fees with two levels. The $20 application fee would handle things that are able to be reviewed and permits issued at the staff level, so an administrative review level, and they are items such as what you see in the bullet points there. And then the second level would be for the ones that are a little more complicated and go to the Board of Architectural Review. There's more, by the way, of what is the staff level. The staff level review, by the way, while I'm on that, encompasses about 65% of the applications that come through the process, provided the scope of works continue in a similar rhythm to what we've been seeing over the last four or five years. But I don't think that ratio will probably change too much. And then the items that need to be reviewed by the Board of Architectural Review constitute about 30 to 35 percent of the applications that come forward, and they include the things that you see here in your bullet points, such as demolition, all new construction, and that's a varying range of sizes of new construction. Some of it are a small room addition. Some of it are a freestanding garage, storage buildings, pools, et cetera. But all of them have to go to the review board. The staff is not empowered to review and grant anything on new construction. New paved surfaces larger than the 200 square feet, less than 200 square feet, the board has mandated to the staff. That was in the previous list. Refreshing gravel, that is in the list predominantly because of the need for public notification and a lot of citizens' interest in participating in those discussions. Signs and then changing or creating openings on existing structures. So that is proposed, the things that go to the Board of Architectural Review, to be ones that would have the $50 application fee. And so the process does review, on average, about 400 permits a year. And then under this scenario of the $20 and the $50 application fees, it would generate approximately $12,000 per year in income to the LFUCG. And that's it. If you have questions. Mr. Lane? Do you feel that the $20 charge is worth collecting the fee in consideration of the amount of time required to collect the money, do deposits, and have it accounted for by our accounting department? Have you analyzed it from that perspective? I do think that that's a valid question, certainly, and one that, yes, I do think it is worthy of collecting if indeed we want to go this route. But the other end of the spectrum is that because the list of the things that can be reviewed by the staff include things, everything from storm doors, satellite dishes, up to overall renovation of structures, which could include multiple themes and so forth, stepping stones. I mean, we were trying to have the lower-end application fee be as little as possible to be able to cover that gamut of applications, because the person coming just for the storm door application, I think it would be good for that fee to be as little as possible. And then so the spectrum kind of stretches up to include some things that are bigger but still able to be reviewed by the staff. But that's really why we settled on the 20. The other option would have been to thought about a three-tier, but then the administrative end gets even more time-consuming. And so we were trying to arrive at a two-tier that would be time-effective and still fair to the property owners relative to the nature of what they were asking for. I know that the finance department has hired an outside consultant to evaluate the way we operate the finance department. And so I guess my question would be, does it cost the government more than $20 to process a $20 check and do all the accounting work on it? And is that a good use of our time? Right. It's something, I'll be honest, I don't know the answer to in terms of all as it goes through. I know at our end what it will take to take that in and deposit it and track it and so forth. But then as it evolves through the system, I can make certainly additional inquiries on up the food chain to help come to that. Because there's no question there is a threshold where it doesn't pay you to process it. With all of these items you have on the screen above, can these be done without any type of permitting? other than approval by your... Other type being like a building permit? Yes, ma'am. Certain things, if it involves something structural like that storefront one, a miner might need a building permit if they're getting into something that had a load-bearing capacity. handrails does need a permit from building inspection because of course it's tied to public safety your general renovation could include under that things like roof work if it included taking out your roof joists and putting them back, building inspection would need to issue on that if it's just a reclad and existing roof without any structural repair it would not need a building permit Porches and decks, repair of existing probably would not need to go to building inspection, and any new porches and decks go to the design review board. Roofs I've kind of touched upon. Foundations, the anticipation is that it's working with an existing condition, hence it's a staff review. If it were to create a new one, it would go to the Board of Architecture review, and an existing condition, if you're just repairing it, would not go to building inspection. So the lion's share, I'd say, would not have a building permit. There will be a few within this that would. Okay. There was a discussion previously about there would be no fee. This is another idea. No fee for approving these applications unless there was a building permit was required or some type of building inspection. And then there's already a fee charged for that. So the idea, I think, that was discussed was to add on the fee for the Board of Architectural Review's review of anything that falls under irresponsibility that also requires a permit. Then it could be one bill, and it could all be done simultaneously, thereby making it easier on everybody and not incurring the administrative cost to collect $20. Do you think that idea would be workable at all? I think it will be complicated in that, so you're suggesting things that do not get a building permit fee would have no fee at the historic end. I'm not recommending that. I'm just sort of saying it's just another idea. It's a discussion point. I understand. with things that only go to also get a building permit i think it might be possible to you know because they they can't review it until it has the permit from historic building inspection cannot so there would be a catch-all you know to monitor oh this has come to us via historic, therefore we need to add to this fee. It's possible. I'd have to talk to the director of building inspection and learn more about how they foresee something like that working, but I wouldn't rule it out. Okay. I think that's just probably answered most questions that I had. I think it might be worthwhile to have somebody from either finance or revenue to just give us a short comment on, is a $20 fee, is the administrative cost greater than the amount of the money coming in, and just get some feedback on that point? Thank you, Councilman. we have not done a transaction-based analysis in many, many years. The last time, I don't remember the date, and so I'm searching my memory banks when it was and what the amount was. If I can sidestep while I'm thinking and give you some background on fees, it's always been told to me my understanding for fees is fees cannot exceed the actual cost incurred by government. A tax can for a revenue basis, but fees have to be tied to what does the cost actually incurred. It needs to be either less than or equal to, but never more than, the actual cost incurred. And the question is whether just the financing processing side is more than $20, and my answer is no, I don't believe it is. I believe that would probably be half the processing fee, and then half of that would probably go to defer the actual cost in historic preservation for the review and the time and effort that they go through in order to either approve or disapprove the application. Okay. Thank you for your comment on that. Thank you, Mr. Chairman. Mr. Farmer? Thank you, Chair. One of my questions has been very similar to that. Would the income produced cover some of the costs involved in providing the service, which is how I believe this discussion, like ones in Environmental Quality, Link and others, would kind of look back and see are we charging what we're doing, and if so, does it cover the cost or not? I guess I had one question, Betty, if you would. Just do you think that this potential fee structure of $20 and $50 represents any sort of a barrier for participation from anyone who comes to make application for these services? Well, I think that there's perception and there's real in terms of barriers, and that's true with everything. Sure. I think that because historically, and I mentioned this when we met before, the process has been one that's structured to encourage people to do good work in historic areas and not had a fee attached, I do believe there will be some philosophical pushback to instigating fees at this point, partly in light of the fact that it's been, And it kind of is contrary to what has been the case in the past, not only in a literal sense but in a philosophical sense. As far as real burden, I would think that there may be a few parcels that are held that we have properties that, for example, participate in the community block grant projects that a permit is issued tied to that permit or to that scope of work that's being facilitated by federal monies. And that's kind of your worst-case scenario, I guess I'd say, in terms of an imposition. For the most part, I mean, I don't pretend to know everybody's individual finances, But particularly the $20 level, I'd like to think that that wouldn't be an undue burden perhaps. But the $50 level, because of the fact those are for a little more substantial projects, by the nature of the fact that substantial work is going to be being carried out, that's obviously got some expense already. Yes, ma'am. But people do have, as we all know, an innate pushback to, what do you mean there's a fee? Yeah. So there will be a learning curve on it at the least case scenario, if not some legitimate hampering of the occasional thing along the way. So I think it will be mixed. You know, on the one hand, I mean, a transaction record or something to see if we're paying for the time used, I'm not really asking for. On the other hand, if we do enact this fee structure, I would just ask you to let us know if there became a barrier problem that you would kind of, as we evolve on all policies, we might come back and either change or augment in some capacity. Well, and I thank you for that because I think that is an important part of any of these things when there's change to sort of evaluate how it's working out and where the impediments are coming if there are. So I thank you for that. Very good. Thank you, ma'am. Thank you, Chair. Dr. Blues? Thank you, Mr. Chairman. I'm wondering whether we're talking about enough revenue income from these projected fees to make some kind of meaningful difference. In terms of the possible costs of discouraging people from undertaking these various upkeep operations, I'm just uncertain about that. I'm not quite sure I see a benefit to the government sufficient to justify installing these fees. Well, and I know we touched briefly at our last discussion about the possibility that part of the outcome of this, unintended though it will be, will be for people to do more work without getting the required permits. And the only thing I guess I would say in hearing Dr. Blue's comment for a minute, the cases that are the most difficult for the process to resolve in a smooth fashion are the ones where people have already physically made the change. And then the project, if it's not within the guidelines, and the Board of Architecture Review has to deny it, the remedy gets into money. And so we have always been, we, everybody in this effort, including all the government, great proponents of come to us first, come to the process first, so that it's all on paper and able to be discussed, and there's no expense to making adjustments at that point other than to some drawings and things in a monetary sense. So I do think that is one of the potential unintended outcomes of something like this as well, perhaps tied to is the dollar amount sufficient. And realistically, that's obviously something that I will have to leave in your all's hands to decide in terms of the dollar amount. Thank you. Any other questions? I have just a couple. So when we're looking at the items such as the following, I see cleaning exterior surfaces and painting. Do you need an application for each one, or is that going to be for the whole address then? It would be for the whole address, and the cleaning exterior surfaces include such things as removing paint from brick, and you may or may not be painting back. The painting is a, the process does not review paint color, but it does review the method in which you prep to paint so that it doesn't damage the surface. So if somebody came and said, I'm going to repaint my building, and in order to prepare it for painting, I'm going to sandblast it, that would be very detrimental to the brick itself. And so that's what's to be reviewed in those permit applications, and they would be under one permit tied to that one address. If you want to just put under general renovation, could that pull most everything into it then? In terms of all that list? Yeah. General renovation can include things such as reworking historic windows and repairing your cornice, and so it can include a lot of carpentry, which is not particularly enumerated spot-specific in this. The reason the list is as finite as it is so that the people utilizing the process can zero in and know, oh, that's something I'm thinking about, versus broader language that leaves them going, is my subject included in that? So it's not all-inclusive either, but it's meant to be somewhat finite to give people a sense of how they relate to it. Thank you. Mr. Lane? Yes, just hearing what your comments have been. And maybe a three-tiered approach would be good. One tier would be free. And if it was something like a satellite dish approval or tuck pointing, perhaps, here again, I don't know how much detail you go into on these types of items, but the ones that are more simplistic, more straightforward, take less of the staff time, maybe they would be free and then only charge four more complex issues where more time is involved and maybe have two tiers there like you were suggesting. Maybe it would be a compromise on that. So that way people wouldn't feel like, you know, I want to put a historical marker up. Well, I mean, I don't know how complicated that is, but if you just have to approve it, charging $20 for that might not be reasonable. Many of these things, almost all, even satellite dishes, which they are what they are, but ironically you can spend considerable time on a satellite dish. And I don't mean to be flip again, but they many times require the staff to make a site visit to see wherever it is people are talking about for installation of such historic marker. But it is very correct that certainly certain things take less time, no question. Maybe I would make a suggestion, Mr. Chairman, that Ms. Kerr come back with a three-tier sort of scheduling. And you don't necessarily, if you could come back to the meeting or you could send us a memorandum on it. I'm always glad to visit you. And then we could discuss it at our next meeting. But I know how much you like having meetings, so maybe you'd like to come back. We all, as we know, including all of you, live for meetings. Right. But I'd be glad to explore any additional options the committee would like. and if that's your all's wish, to look at a three-tier option, the base one of which being a no-fee option, and then are you thinking a $20-ish? Well, that would be your recommendation. It's just a suggestion, and we'd like to get your feedback on that. Mr. Chairman, is that all right, or do you want a motion on that or anything? I think it would be appropriate to make a motion to ask for a third tier, if that's what you want to do. Right. Okay, I would then make a motion that Ms. Kerr come back with a three-tier fee arrangement, one being at no cost and the other two being at a reasonable level to offset your cost of handling it, but not to exceed the cost. So move. We have a motion. Second. And we have a second. Any discussion? All those in favor say aye. Aye. All those opposed? Let's do a... Can you do the voting over there, please? Well, just raise your hands. All those in favor, say aye. One, two, three. All those opposed? One, two, three, four. That passes. I mean, I'm sorry, that fails. Sorry. It's been a while since I did this new math. So at this point, that fails. Any other motions we'd like to come forward on this issue? Seeing none, Mr. Lane, would you like to keep this in committee then? I think it would be, if it's all right, with the, yeah, let's just leave it on committee for the time being. Thank you. Okay. And thank you, Ms. Kerr. And we'll move on to our next item, which is the activity-based costing that Mr. Lane put in committee. Mr. Lane. Thank you, Mr. Chairman. Yes, the issue here is cost-based accounting, and I thought it might be helpful for everybody that's going to listen to the presentation today just to give a little background information. And I and several other council members came on to the council in 2006, actually 2005, and we voted in to install PeopleSoft as an enterprise software to manage the operation of our government for costing. This new software replaced cobalt software that we'd had, I think, from the 1970s, which was sort of an archaic type of system. The program was implemented. We did approve the software. It was very expensive, and the system was implemented by Mayor Teresa Isaac during the last year of her administration. And there were some implementation problems that came up during that period. so when Mayor Jim Newberry was elected, we were having problems getting reports out of our software program. So it was necessary to come back and re-implement the installation of all the software and all the database that supported it during the first year of the mayor's term. And around the second and third and fourth year of Newberry's term, we started getting reasonably good financial information. The issue that I sort of have been bringing up here lately is that we have an extremely expensive software program. It does many things that can help us operate and manage the government more efficiently. And now that we're in an economic downturn or stagnant area at this time, this gives us an opportunity to more carefully manage the day-to-day operations of our government by budgeting and evaluating our expenses against budgets to see how much it is costing us to provide certain types of services. And I made just a quick list here of some of the things that have come up just in the general government committee. For example, the cost to operate our real estate buildings. We do not individually provide expenses for each building, so we were not able to specifically say what it costs to operate that building. The similar problems we've had in the golf courses and swimming pools and in some of our recent meetings, our accounting people have been able to go back and manually break out costs and reallocate expenses, but it's a time-consuming effort and it's not readily available. And also the people that manage the real estate property or the golf courses or the swimming pools can't really see what their actual costs for operating those activities are. And I could go on down the line most recently in our Solid Waste Task Force. We did not know the cost of operating commercial operations versus residential operations where we would have to manually, I guess, go back and analyze that to see what those costs are. and those are the types of issues that I think are important. So I've asked our Chief Administrative Officer, Mr. Maloney, to speak with us about some of the efforts that are being made to improve our accounting. And I would like to add to this that I have spoken with many of the people in accounting and finance and budgeting, and they are all very, very supportive of improving our ability to do activity-based costing. But there's an issue of the amount of time available to work on this, the funding that's available, maybe the cost for additional software package to go in there, and there's also the issue of having our staff become more familiar with how to do this kind of accounting work so we can look at what our costs are. But I felt that this would be a good priority to discuss this issue and see if there's something we can do to move this effort forward. Thank you, Mr. Maloney. Thank you, Councilman Lane. We've been at it for a year now, and I want to commend the administration and also Jane Drissel on some of the issues that we came on board that we had to face. and a lot of good things have happened in the year, and we're trying to hit some of what adds Council Member Lane's concern. And out of the box, we started a monthly meeting with all our directors, which has never been done before with our finance, and that meeting has been going very well, and everybody's getting more control of what their budget is. The other thing we've done this year, we've done a performance for the funds, which we've never done before for able to do the general and sewer funds. We're excited about that. And the third thing, what we like to do is what Ed was just talking about, Councilman Lane was just talking about, is I go, for example, at the golf courses and things like that, we want to break down where each division is able to do what their costs are. And that's anywhere from fleets to utilities and insurance, which we are working on now. And that has been going on, and we're real excited about that. And finally, we'd like to move to the program about budget, and that is what we're working on. And I have Jane here to be able to answer some of your questions to go forward with more. But I just want to commend Councilman Lane, and I think the administration and the mayor agrees what you want. And I think with Jane being able to do the monthly meetings, we want to put the budget back into the hands of the division, which they've never had before. Or if they have, I don't believe in the last few years they've been allowed to do that. But they are for the first time. And Jane, you want to add anything on that? Thank you. I guess I would just add a couple of points, and we've had many conversations about this with Council Member Lane. Analysis is a key for us. I think you all have seen it with the presentation of the Urban Fund, Proforma, the sewer fund, making progress on being able to analyze, give you better information. one of the tools we did put in place is a monthly meeting with the divisions because better information going into the system is key as well. And we feel like with our monthly meetings, we're able to key in on what issues may be in the agencies. The other, I think the CAO mentioned, is ownership. having divisions take ownership in their budget and help provide us with better information as we move forward. And he also mentioned program budgeting. I talked about this in my confirmation hearing, being able to give you better information by program, what we spend in total on the police department, for example, being able to give you that total picture. and also might add that we made some strides in this last budget in terms of cost of service. You know, health insurance is an example. It was hard to hear, but we did go through that analysis and talk about what it really cost us for health insurance. So I think in terms of agreeing totally in concept with being able to provide better information per activity or by program, we feel like we've put in some steps in place, and we're beginning to develop reports we also think that will be helpful in the future as we work with departments. And we've shared all of this, and I do think there are some good steps when you look at best practice and being able to provide the governing body information about specific activities. So I guess those would be my comments in response to Richard's. Is that all, Ms. Lane? Just let me say thank you. And I guess I could have added that Commissioner Driscoll was the head of finance at the Louisville Metro Government. And actually, when we were looking at PeopleSoft, I had some meetings with her over in Louisville. She was very, very helpful at that time, and she is really good at PeopleSoft. And I think we're very fortunate to have you on as our commissioner, and I appreciate all the efforts you're making. I'm just not trying to be adversarial, but to get across the idea we need to do a better job as quickly as we can, I realize there's some implementation issues at hand. And I would maybe add one more thought. We're spending about $500 million a year in the urban county government, if you look at all the utilities and just general fund expenditures. And 1% of that is $5 million. A half a percent is $2.5 million. A quarter percent is, of course, $1.25 million. So we have, you know, if we could make some savings here and there, it could add up to be a substantial amount of money. But thank you for your comments today. Thank you. Vice Mayor Gordon. Thank you, Mr. Chair. I wanted to ask a couple of things. Commissioner, you mentioned I think what you said had to do with division directors having a greater in-depth understanding of their budgets and what was spent where. And in our memo from Mr. Schoeniger, one of the things at the bottom of the first page, and this is in the packet on page three, it talks about proponents of the activity-based costing say that it addresses the problems of allocating indirect costs. Do you have any thoughts on that? Because I think sometimes indirect cost allocation is, well, I don't know if it's not understood or if it's not clear. Do you have any thoughts on that comment in the packet? I do have comments on indirect costs. You know, it is a lot of questions surrounding indirect costs and the rates for indirect costs when I arrived. So we're going through a process now of looking back historically what went into setting those rates. I think when you have a good understanding of those central, some of those services that provide customers or really the government, being able to appropriately allocate those costs, again, to understand what it truly costs to run a parks department or a golf course within that department. I do think it's important to look at both direct costs and indirect costs if you want to get a true sense of, again, what it costs to run a particular division. Again, full cost information is we have leaned that direction in terms of the budgeting when we want to provide better information on what it costs to run a particular program. The CAO mentioned, but just so to reiterate, we do want to distribute cost for insurance as it relates to a particular department based on their history. Those are the kinds of things that really should happen and that we're moving towards making happen, again, so that you can look at a division and say, this is really what it cost us to run this division. And then I think what your, Council Member Lane, is looking for, even within the division, what it cost us to pick up a residential waste, what it cost us per person to have a swimming pool, et cetera. And I do understand that. My comment was back to what you said about division directors. Do I understand that they don't really have input into indirect costs? No, actually, when you go through the process, you want to gain that information about how much time is devoted to particular activities within a division. So I think what you've probably heard in the past, it's hard for them to accept the rate charged to them because maybe they haven't in the past had as good of information of where the number came from. Quite honestly, I'm not sure where some of the numbers came from, but we're going through that analysis now so that we'd be able to answer to both the division director and you and the mayor where those percents come from. Does that involve any desk audits to actually look at how much time people spend doing certain things? Well, it hasn't to this point, but we, you know, again, our starting point were these rates, and so we're going through that analysis now. So as that fully develops, we can get that information to you. Okay. And then I also wanted your comment on the last two paragraphs of this memo, where it talks about several local governments have experimented with activity-based costing and haven't continued the practice because they found it to be complex, expensive, required a lot of time and money. Do you have any comment about that? I can speak from a little bit of experience for implementing different modules of Oracle financials, which is related to PeopleSoft now. But when we went through an analysis in Louisville, just to use the Louisville example, there were certain modules within the system that would have given us ultimately some better information. but the complexity at the time of implementing those modules was the expense as well as the complexity and the user-friendly or non-user-friendly aspects of the system. We determined it wouldn't have been cost-effective for us to do that and leaned more towards the analysis piece with the individual budget staff and were successful in making some of that happen. Now, ultimately, the goal would have probably been to implement that once some of the bugs, if you will, in the software were worked through and the ease of implementation and the complexity was that piece of implementing the system was made better for the entity. and they are still looking at it that hasn't been implemented still today. So that's my only experience in terms of we had developed some reports out of the system that were a good transition piece, if you will, giving us good information that we needed at that point. Okay. We can always improve in terms of, don't get me wrong, I think we can always improve on getting better information related to activities and programs. But, again, best practice, you would look at program-based budgeting, priority-based budgeting, what is the priority of the community. A good piece of that, though, is being able to tell the public how much it cost us to provide certain services. So that's an integral piece as well. I agree. I think it's very good that you're going to be going through this. I was curious, Mr. Maloney, you mentioned golf. Everybody always mentions golf. Are you looking at all the other parks? You know, we have many, many programs other than golf. Are you looking at swimming? Are you looking at all of those? Everything, every division. And one example I want to compliment, Council, and as you all know earlier this year we were doing the software with solid waste, and we had a little bit of a problem there. And we got off track and we were able to put it back on track, and we're going to be able to save a lot of money with that. And that's something we'll be bringing to you all on examples that we're able to show how these divisions are really getting a handle on where their money is and how they're saving. So we're really excited about bringing that to you all, too. Thank you. Thank you, Commissioner. Any other council members? Mr. Lane, what would you like to do with this issue? I don't think that any action is necessary. I just wanted to have the Budget and Finance Committee get updated on what the efforts are. And if somebody thinks there's an action needed, I would certainly be open to it. So we want to keep it in committee for the time being? Okay. We'll do that. And now on item number three, other business advice, Mayor. Vice Mayor had a question, I think, for finance. Thank you, Mr. Chair. I had asked where is our CAFR because we had been told we would hear it today. And so do you know when we will be receiving the CAFR, the comprehensive annual financial review? We have the electronic copy. We were waiting for bound copies. We just made them for you and a few copies. We really reduced the amount that we were publishing this year, although we are putting some on CDs. So if you'd rather have it on a CD, we can do that as well. But we are supposed to get them this week, the actual printed copies. But I can send you an electronic copy. Go ahead and send that if you'd like. We've not received the management letter and won't receive that until the A133 is complete, which is the federal audit. They do one management letter that's inclusive of both. So I talked to Mr. Schonegger about presenting at that point and bringing the auditors as well, but it's whatever your pleasure, we will do. When that would be? That is typically end of February-ish, early March is the typical time frame. We have a meeting scheduled on the 28th. Do you think we could have it ready? My mother's birthday, 75. So for a present for her, could you deliver that to us? Yes, hopefully. I'll have to keep you posted on when, if we get the, I can probably tell you by the deadline if we're going to get it by then or if it's going to be early March. because really those A133's deadlines are end of March 31, but we have talked to our auditor about having that by the end of February. And then I guess this reminds me back to the work you're doing to move this process earlier so that we could get back to getting our documents more toward November time frame. I think you had said you were going to be working on that. Do you have any update for this next year, 2000, and I guess fiscal year 12 audit? What I've asked the Director of Accounting to do is put together a schedule and really highlight for me where our problem in meeting deadlines came. This year was the first year, full year, that this new director of accounting and myself had to complete the CAFR, as well as we had new auditors. So I think I've asked her to work with the auditor and have a schedule, and I can present that to you once that's complete as well. Okay, very good. Thank you. Thank you, Mr. Chair. Thank you. Mr. Stennett? I was just going to ask on the same thing that we ended on. Before PeopleSoft, obviously, we got it in November of every year. Something within PeopleSoft changed this whole process, and hopefully what your comments just made, I just want to emphasize what the vice mayor said. If we can speed that up, that sure is a lot more helpful in the budget process for you and for us. So whatever you can do, if there's a wrinkle somewhere, if there's an outside agency that's holding us up, let us know. We'll be glad to help. Thank you. Any other issues on other business? Seeing none, we'll go to number four, items referred to committing. Mr. Schonecker, if you would go through this list for us, please. First, I want to apologize for not putting the referral list in the packet. That was my bad. You heard, I can just go down the list. You heard the latest update about the bore fee structure. The solid waste issue is in. Well, actually, the Comprehensive Review of Economic Contingency, Mr. Farmer had to leave but said he is fine with having that removed, so there's a motion to remove. We'll entertain that now. Move to remove Comprehensive Review of Economic Contingency Ordinance. We have a motion and a second. Any discussion? All in favor, say aye. All opposed, we'll remove that. The solid waste management issue, that's in the Waste Management Task Force, and that work is continuing. Council Member Stenet can probably give you more of an update than I can, but their work is continuing, and they're examining solid waste or waste management. There's two items that were related to the Procurement Task Force, the local vendor preference that was referred by Council Member Gordon, and then the minority women business recruitment that was referred by Council Member Stenet, The procurement task force really wasn't in their domain to look at that. So those items are still outstanding. We're going to look at, because I chair that task force, we're going to bring those back up for the task force to address. And more recent, maybe I think it looks like Council Member Stanton wanted to say something. I was just going to ask, on the procurement task force, are you also working with a scoring system and how we weight each score? Because those two would play into that system. And right now we currently don't weight minority and women business owners in our scoring system. But we ask about it, but we don't use it in our system. So I don't know if you all would want to be reviewing that and what we put weights on. I think all that will be addressed. Good. Thank you. The itinerant merchant item that was referred by Council Members Henson was moved from public safety to budget and finance. That task force, the itinerant merchant task force, I think, I believe is still working on that issue. There were also two items that were, at the most recent work session, referred to the committee, the activity-based costing, which you heard today, as well as the street lighting fund that was referred last week as well. And we'll hear the street light next? It should be ready next month, or part of it, at least to start that discussion. And hopefully to CAFR and the management letter, too, for the next one. Anything else before this committee? I'll entertain a motion to adjourn. Second. Second. We have a motion in a second. All those in favor say aye. Aye. We are adjourned. Thank you.