# Budget & Finance Committee - November 27, 2007 > Auto-transcribed civic record · Committee · November 27, 2007 - **Permalink**: https://meetings.lexingtonky.news/meeting/258 - **Source video**: https://lfucg.granicus.com/player/clip/258?view_id=14&redirect=true - **Date**: 2007-11-27 - **Body**: Committee - **Last revised**: February 1, 2026 - **Length**: 13,886 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude Sonnet. Speaker labels and verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Urban County Council Budget & Finance Committee convened on November 27, 2007, at 1:00 PM with Dr. Stevens presiding as the meeting's presiding officer. The committee addressed three agenda items during the session, focusing primarily on informational presentations and financial matters affecting the urban county government. The meeting included two informational presentations: one regarding assistance with parking and concessions for Lexington Horsemen, and another reviewing provisions of financing to partnered agencies. Additionally, the committee had scheduled financial updates for discussion, though this item was ultimately tabled for future consideration. Three members of the public provided comments during the meeting's public comment period, offering community input on matters before the committee. No formal votes were taken during this session, as the agenda items were primarily informational in nature, allowing committee members to gather information and ask questions about the presented topics. The meeting served as an opportunity for the Budget & Finance Committee to review ongoing financial partnerships and consider requests for municipal assistance, while also providing a forum for public engagement on budgetary matters affecting the urban county. ## Attendance The following committee members were present for the meeting on November 27, 2007: • Dr. Stevens • CM James • CM Ellinger • CM Myers • CM Moloney All committee members were in attendance with no absences or late arrivals recorded. ## Public Comment Three speakers addressed the Committee during public comment, all focusing on a proposal from the Lexington Horsemen regarding facility costs and operations. **Susan Harris**, Director of Business Development for the Lexington Horsemen, presented a proposal aimed at reducing facility costs and making concessions and parking more affordable for patrons [timestamp: 00:00]. Harris outlined the organization's efforts to provide more accessible entertainment options to the community. **Bryan Boehm**, General Manager of the Lexington Horsemen, followed Harris's presentation by emphasizing the organization's commitment to working collaboratively with Lexington Center [timestamp: 00:00]. Boehm clarified an important aspect of their proposal, stating that the Horsemen are not seeking direct financial support from the city or facility management. Instead, their focus remains on creating affordable entertainment opportunities while maintaining a sustainable business relationship. **Bill Owen** from Lexington Center Corp. provided the facility's perspective on the Horsemen's proposal [timestamp: 00:00]. Owen addressed the existing financial arrangements and lease terms between Lexington Center and the Horsemen. He noted that the Horsemen currently benefit from having the lowest rent among tenants and receive various additional benefits as part of their current agreement. Owen's comments appeared to provide context for evaluating the Horsemen's request for further cost reductions. The public comment session focused entirely on the business relationship between the Lexington Horsemen and Lexington Center, with speakers presenting different viewpoints on facility costs, lease arrangements, and the goal of providing affordable entertainment to the community. The discussion highlighted ongoing negotiations between the parties regarding operational costs and facility usage terms. ## Contested Items The Committee meeting featured one significant contested item that generated heated discussion among members. **Lexington Horsemen Proposal** The primary point of contention centered on a proposal from the Lexington Horsemen and its potential financial implications for the Lexington Center. Committee members engaged in a heated discussion regarding differing perspectives on the financial impact of the Horsemen's proposal and what obligations the Lexington Center had in response. The debate revealed fundamental disagreements about how to evaluate the proposal's financial consequences. Some members expressed concerns about the potential ramifications if the Horsemen were to leave as tenants, suggesting that losing this tenant relationship could have significant negative effects on the Center's operations and revenue. The discussion highlighted tensions between different approaches to tenant relations and financial risk assessment. While specific details of individual member positions were not fully documented in the available materials, the characterization of the discussion as "heated" indicates that committee members held strong and opposing views on how to proceed with the Horsemen's request. The disagreement appeared to center on balancing the Lexington Center's financial interests against maintaining important tenant relationships. Members grappled with questions about what level of accommodation or concession might be appropriate in response to the Horsemen's proposal, weighing the costs of agreement against the potential costs of losing the tenant entirely. The outcome of this contested discussion was not clearly resolved in the available documentation, suggesting that the matter may have required further deliberation or been tabled for future consideration. ## Lexington Horsemen, Assistance with Parking and Concessions [timestamp: 00:00] The committee discussed a proposal from the Lexington Horsemen regarding assistance with parking and concessions to reduce facility costs and make these services more affordable for patrons. The item was presented as an informational discussion without a specific agenda identifier. Key speakers included Susan Harris, Bryan Boehm, and Bill Owen, who provided perspectives on the proposal. The Lexington Horsemen sought ways to lower operational expenses related to facility usage, particularly focusing on parking and concession arrangements that would benefit both the organization and attendees. The Lexington Center Corp. participated in the discussion to offer their viewpoint on the financial obligations and lease terms that would be affected by any changes to the current parking and concession arrangements. The corporation's input was essential given their role in managing facility operations and existing contractual commitments. The discussion centered on finding ways to make the venue more accessible and affordable while maintaining the financial viability of operations. The committee examined how modifications to parking and concession policies might impact both the Lexington Horsemen's ability to host events and the broader financial structure of the facility. The outcome was informational, with no immediate action taken. The discussion served to present the proposal and gather input from relevant stakeholders, including the facility management perspective from Lexington Center Corp. This allowed committee members to understand the various considerations involved in potentially modifying existing arrangements for parking and concessions to support the Lexington Horsemen's operations. ## Review of Provisions of Financing to Partnered Agencies [timestamp: 00:00] The committee conducted a discussion on standardizing provisions within Professional Services Agreements (PSAs) with partnered agencies. CM Myers led the discussion, focusing on the need for more consistent contractual terms across all agency partnerships. The primary topics addressed included establishing uniform provisions for recapturing unspent funds from partnered agencies and implementing stronger accountability measures for outcome reporting. The discussion centered on ensuring that public funds allocated to partner organizations are properly utilized and that any unused portions are returned to the city. Commissioner Askew participated in the discussion, providing input on the current process and potential improvements to the PSA framework. Commissioner Helm also contributed to the conversation, offering perspective on how these provisions could be implemented effectively across different types of agency partnerships. The committee examined the need for standardized language in contracts that would require partnered agencies to demonstrate measurable outcomes and maintain proper financial accountability. This review was part of broader efforts to ensure taxpayer funds are being used efficiently and that the city maintains appropriate oversight of its partnerships. The discussion was informational in nature, with no formal action taken during this meeting. The review appears to be part of ongoing efforts to strengthen the city's contracting processes and improve accountability measures for organizations receiving public funding through partnership agreements. ## Financial Updates The Financial Updates agenda item was scheduled for discussion at the November 27, 2007 committee meeting but was not addressed during the session [timestamp: 00:00]. The committee made the decision to continue this item to the next meeting without any presentation or debate taking place. No speakers presented financial information, and no concerns or issues were raised regarding the district's financial status during this meeting. The item was tabled, meaning it will be carried forward to a future committee meeting for full consideration and discussion. --- ## Full transcript And the magic hour for the monthly meeting of the Budget and Finance Committee has come. So we'll call the meeting to order. And the first item of business is discussion concerning the Lexington Horsemen. Mr. Allengard, do you have any comments you want to make? I understand both parties are in the audience and probably have something to say. Well, I think we might let both of them speak on the subject. The reason I wanted to bring this forward to the Budget Committee was we had had the discussion here in the Council Chambers about the issue and the integral part that this organization brings to this community and the family-oriented activities and the different things I think will give the horsemen their opportunity. And then also I'd like to have the LCC give their viewpoint from this, because obviously they've got some issues that they can or can't do, too, and they have a board that they have to answer to, too. And I'm sure that they've tried to work out an arrangement, and we might not be able to be the right facilitator here, but I thought this might be an opportunity that we could at least look at the different issues and see if there's an opportunity that the government can work with you all, because this is a very important group. I think it's not like the Wildcats, but we have started to gain some momentum with them and now being in a new league, it's nice to have a group that we can follow, and as I said, what you all give back to the community I think is very important. So if we could have, I guess, the horsemen speak and then also let, I guess, Bill Owens back there, he could also speak on behalf of the Lexington Center. And I think the issues that we would like to address or look at possibly would be some of the things that you raised last time would be the parking and possibly concessions and then rent. And I think there are parts of the contract that do talk about if we have some incentive clauses, if we do reach certain amounts that things are brought down, and maybe that's something that we can look at and address, too. But those are, I just wanted to kind of bring it out here, see if there's things that we can do, because I certainly would like to keep the horsemen here, and I know the Lexington Center would like to keep the horsemen here, too. So if there's anything that we can come to an understanding, I think it would be great that it would be good for the people of Lexington. Thank you. Go ahead. Go ahead. Thank you, Mr. Ellinger. I see that the horsemen are in the starting gate and ready to go. So if you'll identify yourself and the microphone is yours. Thank you very much. I'm Susan Harris, Director of Business Development for the Horsemen. I originally addressed the City Council on October 23rd and brought to light some of the issues that the horsemen have heard from various parties. We have brought a proposal. Did you want us to go ahead and hand that out? Yes. If you would reiterate those, some of those, pass them out. Perhaps you can start with the Lexington Center behind you, unless they already have it. Thanks. The gentleman that has currently passed out the proposal is Brian Bain. He is the General Manager of the Horsemen. I think he has a couple of issues that he would also like to address. The first issue we have on here, of course, is our official statement, which we released on 11-23. It is our goal to bring economic growth and revitalization to downtown Lexington and to provide entertainment that is affordable to all. There were some things going in the press last week that indicated that the horsemen had asked the City Council to subsidize our organization. We wanted to address that and to let the Council know that we are asking for reduction in concessions and parking, which the Horsemen Organization gets no revenue from that. We are currently asking for two things. The first is a reduction in the facility cost at the Lexington Center. This was brought to our attention by the owner, Mr. Lenny House. He has polled all the teams in the UIF and AF2. He found that most teams are charged $2,500 to $8,300 per game. The horsemen are averaging $12,000 plus a game in expenses at Lexington Center. We just wanted to bring that up. Secondly, Mr. House would like to see the Lexington Center be more consumer friendly and affordable, and when he's referring to that, of course, we're talking about Rupp Arena. He feels that when we look at the cost of parking and concessions for a family to attend an event at Lexington Center, it is too expensive. To pay $10 for a game ticket, $8 for parking, then you're going to add in concessions, and most families of four will spend a minimum of $90 to $100. It definitely limits the number of games a family can afford to attend. The working families could attend more games and have a more enjoyable experience while they are there. Lexington's downtown business would benefit from all the extra traffic, and the Lexington Center would make more money on a greater concession volume. We feel that everyone would win if we could get these two issues resolved. We have proposed the following suggestions. We're asking for a 50% reduction in concession pricing for all patrons, regardless of their income. We're asking for a 50% reduction in cost of parking for all patrons, regardless of their income. In addition, no cost of concessions to the recipients of the Partners for Youth programs. That is our program that we fund from private donations, plus what I discussed last time, that the horsemen did for these different programs. We would like for them to be able to get their concessions with no charge. Currently, we supply them with food at an off-site location. That location includes a lot rental, $500 plus the cost of the food for all the children and the families that are going on those tickets. We're also asking for no cost of parking to those recipients of the Partners for Youth program. What we have discovered is all these children work very hard to make the goals that have been set by individuals in order for them to receive a ticket to the game. It no longer becomes a free ticket when they have the added cost of parking and the added cost of concessions. We want to enable these families to go with no cost attached for them. When we give them a free ticket, we would like for it to be a free ticket. The horsemen currently get 40% off the face value of the ticket, and Kentucky Utilities was one of the organizations that donated money to tickets. One of the hard decisions that we had to make with that lump sum of money was, do we use it all for tickets or do we divide it? Do we use half for tickets and half for concessions? The choice we made last year in conjunction with Partners for Youth was that we would use all money for tickets and the horsemen would incur the cost of the food. The parking has kind of gone on the wayside. They park where they can or a lot of them will come up and ask you if you can possibly give them the money for parking. I work the tailgate parties. I spend about $150 of my own money per game to give folks parking money to make sure that they can get into the game. A lot of people aren't prepared for that $8 price. Brian, do you have anything to add? Probably our biggest. Would you give us your name, please? First name is Brian Boehm, general manager of Lexington Horsemen. Brian Boehm. Yes. Thank you. Our biggest thing is we want to be able to work with the Lexington Center, and over the past year that I've been with the organization, I've felt as though we do work extremely well together. Our biggest thing is we want to bring not only for the horsemen but for all people in Lexington and surrounding central Kentucky an affordable environment for entertainment downtown, which would probably coincide with the city council's goals of making sure that downtown Lexington can be revitalized and the economic growth is in place for future events in conjunction with art fairs, plays, different things. And that's our biggest point. And I know Susan touched on it, but we also want to make it clear that we are not asking for any pennies or any dimes to go to the Lexington Horsemen Organization. This is merely to help Lexington Center cope with any type of, if there's any type of concession price cuts, to help them cope with that loss. We don't get concessions. We don't get parking, so it doesn't affect us on any decision. We just want to make it affordable for all parties involved. I do want to make sure that Lenny House, our owner, would like to make sure that he does reserve the right to address the board if he can concerning any issues. He was unable to attend. He's up in New York State and apologizes for not being here. Lenny House did want to bring up the fact he is concerned and does question who actually runs and owns the concessions for Rupp Arena and the Lexington Center. The city council, I believe, was under the impression that there's a third-party agreement in place. However, there has been some discussions with other facilities in other cities saying that it is in-house and is maintained in-house. So he did want to bring up that point. Okay. Mr. House will be welcome most any time. I'm sorry he can't be here today. And thank you, Susan Harris and Brian Bain. Now we have some representatives of the Lexington Civic Center here, and Mr. Owen. Good afternoon. Good afternoon. Mr. Southers called our office and advised my assistant that I or one of our staff were invited to respond to today's meeting to, quote, explain Lexington Center or LCC's side of the horseman request. I don't that the word side feels clumsy to me. We don't take sides with our clients and users and tenants. Typically our motivation and desire is to help all of our users at Rupp Arena, Lexington Center, and the Lexington Opera House to be successful in hosting the event that they wish to promote and put on. Go ahead and pass that out if you would, Sheila. It's a little unfortunate at this point. I think it's regrettable that in the media it's been phrased as sides or subsidy or needing help and those kinds of things. At the very time that our indoor football franchise is out trying to sell season tickets and sponsorships, there's this cloud of uncertainty that has been cast. That is certainly not the image and the impression I get from the owners, Mr. and Mrs. House, about next season. Indeed, they have convinced me repeatedly and assured me repeatedly that the franchise will be playing football in Rupp Arena. I was delighted to see a schedule released just the other day. Typically this kind of discussion, you know, the horsemen agreement and our concessions prices and our parking prices and all of that, right or wrong, is a management and staff decision, which ultimately becomes my responsibility. If there's any debate over whether or not that is appropriate or the way we operate is appropriate, that typically goes to our Lexington Center Board of Directors, which this body appoints and places for the management of the facilities. The horsemen have decided to come here directly, and I would convey to them, if they wish to meet with our board of directors, we meet the third Thursday of every month at 9 a.m., and you're certainly welcome to come and address that body as well. I'd like to recognize Carl Hall, our Director of Arena Management, and Sheila Kinney, our Marketing Director, who have joined with me today. I didn't realize, I didn't know until someone mentioned to me watching TV3 that the horsemen were making a presentation to the council. I didn't know that they were making presentations on radio talk shows last week, and again, that's not that they need my permission to do that, but it is, this comes as a bit of a surprise. It occurred to me that there are maybe three questions that I would help you kind of get your mind around this whole issue, and I've got a nine-page, do you have one, Ms. Harris? Okay. I've got a nine-page discussion that I'll go through hopefully quickly and then entertain any questions that you may have. The first question is, what are concessions and parking prices at Rupp Arena, and how do they compare to other venues? Do they impact attendance at events? If you look at page two of the handout, this is a survey. Every couple of years we will survey competing and other arenas and sports venues in the region. We don't always get accurate information. Sometimes it comes back to getting someone to return a phone call. Sometimes they'll give you the information, sometimes they won't. But we did get a pretty good response from a survey that we began in July and completed in September. Rupp Arena is the far left-hand column. Then it moves to four different venues in Lexington that we kind of see as alternatives for entertainment that do have concession sales, Commonwealth Stadium, Applebee's Park, Keeneland, and even Regal Cinemas, figuring that if someone has disposable income that they can use for entertainment, they could go to the movies. And so we did compare those. And then moving to other venues, Assembly Hall and Memorial Stadium are at the University of Illinois. Nippert Stadium is University of Cincinnati. And Fifth Third Arena, I think, has similar pricing. Greensboro, North Carolina, Great American Ballpark where the Cincinnati Reds play. Diddle Arena is Bowling Green at Western Kentucky University. Thompson Bowling Arena is Knoxville. And then the far right-hand column is Kentucky Fair and Exposition Center or Freedom Hall. I was interested to see in the proposal or the presentation that you saw previously, the discussion was concession meal of one hot dog, one small drink, and popcorn is double to triple the cost of other entertainment in another venue in Lexington that provides professional sports and suggests to reduce concession pricing to be competitive with other pro sports venue in Lexington. That's obviously Rupp Arena and Applebee's Park. Applebee's Park, there were nine or there were 14 menu items that we were able to compare as a result of our survey. Rupp Arena is equal or lower than nine of those 14 items that we did compare. I would suggest to you that we're double to triple is certainly inaccurate and that I think we are competitive. I'll also say in terms of concessions and parking, I've been at Lexington Center 17 years. Mr. Hall has been there 19 years. The horsemen are the first promoter that has, in our memory, collective memory, that has questioned our parking and concessions pricing. It's just with typical promoters, it's just something that doesn't hit their radar screen. They are concerned about rent and costs and all of those kinds of things. But the other items of pricing of concessions to suggest that particularly for family entertainment and other events that I heard on the radio talk show that our pricing is hurting our marketing to attract events. Just this month alone, there were 13 arena events. Next month, there are nine. January, there are nine. February, there are 11. In the next seven months, we already have on the books 62 different events spread over 79 different days. So particularly this time of year, we are an active facility. Page three gives you some information on parking rates. For a long time, Rupp Arena was at $5 and we graduated to $6 and stayed there three or four years. Then we went to seven. Then we went to eight. We decided to go to $10 after observing that many privately owned lots around the neighborhood were at $10 and higher. This particular survey was taken just a few days ago at the University of Kentucky Liberty game, and page four shows you a map of those locations. For horsemen games and smaller events, there's a lot of those lots that won't even open, but you can see that we certainly are at market rate even less than some locations farther away. Central Bank Building, Kincade Tower is higher than our lots. Radisson Hotel is higher than our lots. There's even a small lot on Short Street where Felix intersects that's even higher. We do discount our parking rate 20% to $8 for events less than 10,000 parking, but that kind of gives you the results of a quick survey there. Page five shows you the last seven years of event utilization. Again, in terms of how busy we are, how many patrons, how many visitors we attract, and you can see that it's pretty constant with a couple of, there are some swings. 2002 was when we were under renovation. We had limited availability. 2003 looks to be a bit of a spike, 129 performances. There were nine days of the Daughters of the Nile Convention that used Rupp Arena that kind of skews that, plus in that physical year, we hosted the circus twice, and the circus, when they come, they do anywhere from seven to nine performances. So that can kind of give you an example, but the predictable attendance at Rupp Arena for all events, U.K. basketball, horseman concerts, family shows, and whatever, runs roughly 800,000 people. Page six gets to question number two. If you go back to page one, what are the terms of the horseman lease and how are they different from other Rupp tenants? Well, page six gives you some information about the specific lease. First of all, the horsemen have the lowest rent of any tenant that uses Rupp Arena in the last four years. Second, they have attendance-based rent credits beginning at 4,500 patrons, making it possible to reduce rent to only actual game day personnel costs. At 7,334 tenants, the only thing they're paying for in their lease structure is ticket takers, security, video operators, people that are required to be there to actually run the event. They are the only Rupp Arena tenant with this benefit. They have the lowest bond fee of any Rupp Arena tenant. They have free office space 365 days a year, including all utilities, a value in the shops at Lexington Center, rental value of $18,500 annually. They're the only Rupp Arena tenant with this benefit. They have discounted parking for season ticket holders. Now, I heard on one of the comments I heard on the radio last week was, yes, for the last two years, we give season ticket holders $4 parking, and for those that want it, give those parking passes to the horseman. I don't know whether they pass that along to the season ticket holder or not. What I did hear last week was that they make up the difference up to the $8. That simply is not accurate. They do get $4 parking. We do plan in the upcoming season to go to $5, and we've already advised the horseman of that. But there is discounted parking available for season ticket holders. The next item, we run a variety of concession specials that might be dollar hot dog, dollar beer. In 2006, we ran $1 hot dog specials on April 15 and April 30, $1 beer specials on April 30, July 16, July 22, July 30, $1 popcorn on April 30. Last year, we ran half-price beer or two-for-one on April 7. We ran half-price hot dogs or two-for-one on April 15. On May 12, we ran a special at the concession stands, buy a Papa John's pizza and receive a large fountain soda at no additional charge. They're the only user of Rupp Arena to get this type of benefit. They have free use of the parking lot for tailgate promotions. Now, they opted to rent a lot across from the Hyatt Regency, which has better exposure to Broadway, and I can understand why they would want to do that to create the presence, but we did offer free of charge part of the parking space for tailgating. Free parking for game personnel, and that's on an unlimited basis. Free use of the arena for practice when available. Free use of the Heritage Hall for tryouts and field maintenance. LCC charges only for installing and removing the field. Last year, we gave free parking. Tryouts happened to fall on the same week as suite 16. Well, obviously, we can sell our parking spaces on suite 16. However, we gave free parking in support of the horsemen and have committed to do that again this March. We just had a conversation about that yesterday. You go to page 7 and 8, and you begin to see what happened and where the real issue is in our opinion related to the horsemen. That basically shows you year by year the seasons, the tickets sold, the turnstile, and the rent for 2003, 4, 5, 6, and 7. In 2003, if you look at the rent column, you can see that's the operative aspect of the rent credit. The greater the attendance, the more ability they have to get a rent credit to buy the cost of occupancy of the space down. Also, the first year, they sold 41,689 tickets. The turnstile was 42,122. Now, you might ask, how could the turnstile be more than tickets sold? It's not unusual to have some level of complimentary tickets for players, players' families, sponsors. The horsemen are very active in their working with youth groups and the like, as Ms. Harris has already explained. So, that's not unusual at all. You go to the second season, sold tickets dropped to 33,620. The third season, 05, sold tickets dropped to 22,817, and you can look at the averages there. The fourth season, 2006, you can see that ticket sales went up slightly over the previous year. I'm now on page 8, and that was a good sign that they were selling more tickets. However, you can also note that turnstile report is dramatically higher than tickets sold at 31,949. The public is pretty smart, and when you start to comp too many tickets, people figure out, well, I don't have to buy a ticket. I just need to look around to get that complimentary ticket. And to generate the attendance on complimentary tickets, I don't know how many tickets were offered. I don't have that at my fingertips. But still, that has a tendency, we've learned with other franchises, professional sports franchises, to work against you if you go across the line. I've got a handwritten note there. After the 2006 season, there was new ownership. Mr. and Ms. House, midway through the season, acquired 100% of the franchise from some other owners that were initially involved and came to us and said, you know, for next season, if we're going to be here, we need some support. We need you to reduce some fees. You need to work with us on it. So basically, we changed the structure of the lease from being a minimum rent plus reimbursable expenses to being a flat fee that included reimbursable expenses. Now, reimbursable expenses are going to vary depending on attendance. You're going to have more ticket takers or security if you anticipate 5,000 people coming than if you anticipate 3,000 people coming. So that's the reason in the last year, this past year, that's the reason that you see rent varying on that number relative to the 9,500 flat fee. Now, I'll emphasize again, that rent goes away if they get attendance to 7,000, scan tickets to 7,330 people. Rent credits start kicking in at 4,500. They're the only reparina tenant that has such a feature in their lease. The last page, and I'll try to wrap up, gets to the third question. And that question is, what are Lexington Center Corporation's financial obligations and how does it, Lexington Center, meet them? Lexington Center is charged to be responsible for the operating management on behalf of the Lexington State and the community to operate reparina, Lexington Convention Center, the shops at Lexington Center, the Lexington Opera House, Triangle Park, and the ancillary parking lots. Our current operating budget is $10.6 million. We're just now putting a budget together to bring to our board and ultimately to Urban County Government through the agency process next April. Our current debt service payment in the current fiscal year is $3.6 million. Our fiscal year 2008 approved capital maintenance expenses are $1.8 million. Those are basically the three expense items that we have to look for to support. What are our sources of revenue? By Kentucky Revised Statute, 2 percent bed tax, or that's one-third of the total bed tax, comes in support of the mortgage indebtedness at Lexington Center. That helps us make that $3.6 million debt service payment each year. We have a contract agreement with the Convention Visitors Bureau, whereby they take a portion of their bed tax receipts, $948,000, and send that to Lexington Center in support of our debt. And then third, we count on cash flow from operations, rent, concessions, parking, rental equipment. That number varies annually depending upon activity in the facilities. Over its 32-year history, Lexington Center in Rupp Arena has paid 100 percent of its operating expenses. It's paid 100 percent of its capital maintenance expenses. Debt service in that period of time totals $102 million, has been paid 50 percent from the motel room tax, 33 percent from Lexington Center operations, and only 16 percent from the Lexington-Fayette-Urban County General Fund. And over half of that 16 percent was paid in the first 10 years of operations, 1976 to 1986. Lexington Center is already providing significant financial support, attendance-based rent credits, office space, parking support, concession specials, et cetera, to the horsemen relative to all other Rupp Arena tenants. We feel further subsidy is contrary to the best interests of Lexington-Fayette County taxpayers and that their interests must be considered first. While we are committed to maximizing utilization of the facilities, and we are committed to that, utilization is one thing and it's very important. Financial performance is another. If attendance is such that it's not supporting the lost revenue from doing something else, if you can do one medium-sized concert and achieve the net revenue that you're otherwise achieving from a franchise operation, if you can replace all of the attendance with two medium-sized concerts, we have to take that under consideration. While we're committed to maximizing utilization of the facilities we manage, it must be achieved in a financially responsible way. So with that, I'll entertain any questions that you may have and try and answer. I will say we're looking forward to the upcoming season with the horsemen and to continue to support them as we do all of our tenants and clients. Thank you, Mr. Owen. If there are any questions, please direct them, and I'm sure that Ms. Harris and Mr. Bain will be happy to answer questions also. Councilwoman James. Thank you, Chair. I'm not on the committee, but is it okay that I go first asking questions? Certainly. Okay, thank you. You always go first. Oh, that's pleasant. Thank you. Bill, I have a couple questions for you. Is the rental rate based on the capacity of Rupp Arena? So is there typically if someone rents Rupp Arena, is it based on what Rupp Arena will hold or is it based on the amount of attendees that they expect to be? The anticipated attendance does have some bearing because if you've got 23,000 people there, it costs a lot more to clean it up after the event. But we have two tenants that do multiple events by contract every year. That's the horsemen and University of Kentucky for basketball. Other events might be it would probably be more like a stand-alone concert. It might be Live Nation. It might be Outback Concerts. It might be AEG. It might be one of those. And depending on their artist and the anticipated attendance, rent is typically lump sum at an amount that gets negotiated. We don't have a blue plate pricing structure for the arena. Each event is a little different. Are those negotiations annual, the negotiations between the venue or the event? Well, we've just completed negotiations and signed a new lease with the horsemen for one season. Fortunately, we're not due to negotiate the U.K. basketball lease until 2018, and that's a really good thing. So it depends on the contract that you have with the organization. Yeah, it depends on the contract. It depends on the contract. And you said that the horsemen have the lowest rent of all the events. Yes. Why is that? Well, we did three years with a rent mechanism that we were satisfied with to have the opportunity for seven or eight multiple events through the summertime, which typically is a slower period for the arena, was an encouragement for us to offer an attractive rent. At the expiration of that three-year lease, they came to us and said, we want to give it one more year that required a significant capital investment of the owners, and we wanted to work with them for one more year to give them the ability to build attendance, to get to that 5,000 or 6,000 or 7,000 multiple event activity. That's what we're eager for. That's what we want. That's what we'd like to have. Again, this year, going up in league to the AF2 with new enthusiasm, they've added some additional staff and they've got some new hopes. We've given them one more year. Okay. You said there were dollar days. There have been some dollar days. Who has to make up the cost when you have those dollar days for the hot dogs and beer? Nobody. Nobody makes them up? Nobody. We sell a cup of beer that we usually sell for $6. Well, it's reduced. It's a smaller size. But, you know, the hot dog that usually is $2.75, it's a dollar. Okay. Those are mechanisms that we have offered over the last two years to help them build attendance. So is there a third-party concessions operator? No. Concessions operations at Rupp Arena are all Rupp Arena employees. There are a number of arenas. Commonwealth Stadium, for example, uses a concessionaire, it's referred to, where they take a percentage of the gross sales. We have felt like you lose a little control with that. We've kind of grown up since 1976 doing our own concessions, and so that's all the pricing structure, the employees, what kind of hot dog we serve, what kind of ice cream we serve. Those are all Lexington Center staff decisions. Okay. And have the prices for concessions and parking risen since 2003? Yes. Okay. Yes. And is that price? And, you know, when I pull into Speedway, pardon the commercial, and get my cup of coffee in the morning, I'd love it to be cheaper. I'd love everything from, I think all of us would, from gasoline to health care, for everything to be less expensive. What we have found to keep us from having to come to this body and look for greater funding out of the general fund, the Lexington Center organization has grown up with that operational paradigm, and we continue it. If the board of directors, if our board of directors, to whom I'm accountable and our staff is accountable, were to say, we need to look at our concessions in charge less or our parking in charge less, what are the implications of that? That happened at one point. We made a proposal, we made a request in 2003 for funding support of the Urban County Government out of the general fund, which was declined. The board of directors decided, given a variety of alternative suggestions, to look at our parking, concessions, and bond fee. That was the reason for decline, is that they wanted you to reevaluate what you were doing? Yeah. Well, no, it was declined. Urban County Council declined our request for $300,000 out of the general fund in financial support. We had to go back through our budget process and say, where can we make up that difference? Did they tell you why they were declining it? No. Did they give you a reason? No, but, you know, you all have tough decisions to make in terms of what you put in the budget and what you can put in the budget and what you don't. Our desire is to, at Lexington Center and the way that we operate, is to minimize that at least insofar as Lexington Center. And, again, in my term at Lexington Center, this is the first time a promoter has objected to those pricing. In Mr. Hall's 19 years, this is the first time a promoter has objected to those pricing. Our survey information, both locally for parking rates and regionally, locally and regionally for concessions rates, tells us that we are in line. Have you heard from any of the other activities, organizations, that use Rupp Arena since this has all come out as far as how they feel about the parking and concessions? I have not. Have you, Mr. Hall? No, I have not. Okay. All right. That's all the questions I have for you, and then I have some questions for the horsemen. Thank you. Thank you. Are there any other questions for Mr. Owen or the Lexington Center? Yes. Mr. Ellinger has some questions. Did you want to go ahead and finish your questions with the horsemen? Well, she was going to ask the other, the horsemen. Okay. Mr. Owen, if you don't mind, I just have a couple questions, please. And thank you so much for the information. It was very, very helpful and very informative. I guess a couple things. Outside of the U.K. basketball, would the horsemen be probably the most unique local organization or group that uses that facility? Well, it uses Rupp Arena, I guess. Other users include Fayette County Schools. No, there are some local. But would do it on a continuous basis where they have eight different venues? Yeah. Not just a one time, but this would be a... Local, that's true. We do have a, for example, Feld Corporation, which owns Ringling Brothers Circus. They come every year, and they'll do nine performances over a weekend. V Corporation that operates Sesame Street Live, some other shows that are out currently. Would that be, though, all at one time? Those, however, are not local. Okay. But that would be all at one time. That's right. Something that you could build community unity with like the horsemen would do or the U.K. Wildcats do for Lexington. Right. Would that be accurate? Like I said, I appreciate the information here. And I guess a couple things they looked at, and it would be a win-win if we could boost attendance up because it would be good for the horsemen. It would also be good for the convention center, too. We'd be delighted to get 10,000, 12,000 people coming. That would be great for everybody there. You say you do promotions, and when they do their promotions and they bring people in, it's a marketing tool to get people down there. So, in a way, it's helping you all out because it's bringing people to the civic center. Is that accurate? Well, if, for example, you're running Dollar Beer Night, you've got to make it. It's difficult to quantify from our standpoint. Is our revenue greater from selling $6 beer to a crowd of 2,500 or dollar beer to a crowd of 4,000? Have you at any point on any of the times ever lost money from doing that? Given a glimpse of a single game? Yes. On concessions? Yes. I haven't looked at that simply because you get some people that, you know, based on what we have seen in the times we've run the promotion, it really has not achieved markedly greater attendance. When you do that, do you do a promotion and let people know that there are going to be dollar beers, dollar hot dogs? Yes, the horsemen promote. Or do you just, when they come, they realize they had that? No, no, the horsemen promote. So you work in conjunction with them? They've already asked us for the upcoming season. What games can we anticipate a concessions special so that we can advertise it and promote it? Have you ever thought of doing one where you'd have maybe dollar hot dogs the whole year so they could always have that as something that would allow? We haven't done that. We haven't done that. Again, those types of specials, we don't do that for UK. We don't do that for Feld Corporation, V Corporation, any of our concerts. They're the only tenant that has that benefit. You say that you're the ones that control the concessions. Have you ever done like you talked about with UK, allowing boosters or somebody to come in and do that part of it so that some community organization could come in and run the concessions, that game, so that part of it could go towards that charity event? We do that. We work with a variety of fundraiser programs to achieve, to boost our labor supply. However, if it's the Lafayette Explorer Troop working in the concession stand, they're working that event in order to raise money for their group. We do a lot of that. But that is allowed because I was told that wasn't. No, that's inaccurate. I was trying to get the facts here. I think St. Peter and Paul School has been there for 20 years or more. Is that accurate? The parking you say for the people who have season ticket holders, you do have a reduced rate for that? Yes. And on the cost for the parking, what do you incur on that outside of having an attendant and then, I guess, cleaning probably the parking after that? Would that be your two biggest costs? Well, I would say the biggest cost is capital. When it comes time to reseal or pave our lots or buy new parking equipment, to replace landscaping, to replace sidewalks. How can you do resealing? Most of the parking expense is capital, not operating. A single parking cashier in an hour's time can run a lot of cars in if those cars are there. But, you know, the expense of maintaining and the capital maintenance, again, our capital maintenance in the current year is $1.8 million. That's over and above an operating budget of $10.6 million. We have to get that revenue from somewhere. Well, I guess the one I'm looking at would be the parking in that. What would be your annual for that capital for that? It wouldn't be all of that 1.6 or 8 that you described. In the year we reseal a lot, I think, as memory serves me, last time we resealed high street lots, it was about $36,000. Parking supports more than just itself. Parking helps to support expenses at Triangle Park. Parking helps to support expenses at the Lexington Opera House. Parking helps to support the shops at Lexington Center. You know, you look at areas of revenue, operating revenue is key to Lexington Center's operation, and its operating revenue includes revenue from parking and concessions. So when you start eroding that, there's only one place for us to come to replace it, and that's right back in this room. One of the issues that the horsemen talk about as an advantage of this community would be, I guess, allowing youth at risk to go to games and gives them an opportunity to go do something that would be a minimal cost. And I think one that they talked about is they get the free ticket, but they still have the cost of parking and still have a cost of concessions. Is there any way if we do something that we could work with them on somebody who comes as an at-youth risk, then parking or concessions, that we could give them something that would lower that? If this body would choose to decide that, we're at the ready to work with you on making something like that work. Those are all the questions I have right now. Thank you so much. Thank you, Mr. Hellinger. I see no Mr. Myers. Thank you, Mr. Chair. Mr. Owens, thank you for coming in. I have just a couple of questions for you. Okay. Thank you for coming today, and thank you also for the information that you provided. There's a couple of discrepancies between, or maybe I'm not understanding it correctly. The horseman said that, number one, reduction of facility costs, election center. They're saying that most teams in the leagues are charged $2,500 to $8,300 per game, but they're charged $12,000 plus per game. When I look at your spreadsheet, it seems to say on page 8, I guess probably 7 and 8, a fee for renting the stadium. Does that $12,000 figure include utilities and other things? Their rent number is $9,500. On top of that, they pay bond fee, which is by urban county government ordinance, sales tax, which is 6% on tickets sold, and any other staff requests that they have outside of what's included in that $9,500 flat fee. I don't know how they constructed the $12,000. I don't know what number of components are in there. But what comes to election center is $9,500 plus those three items. The sales tax we send to Frankfurt. Okay, so in the documents that you gave us, where does it show how much they pay per game? If you look at, well, I didn't give you that. I can get you a copy of the lease that shows what they're obligated to pay. If you look at page 8. Right, 7 and 8. Under the column rent. Yes. Let's just take an example. April 7, Evansville was the opponent. Rent was $3,569.31. That number was constructed by taking $9,500 and subtracting from it our cost for ticket takers, security guards, first aid, other items that we have to have, other personnel that we have to have and pay an hourly wage to to operate that event. So it gets down to a net number. So then you're not charging them for those hourly employees? They're included in the $9,500. Okay. You see the handwritten note there? The restructured lease went from a base rate plus reimbursable expenses, which is our typical source. See, with most every other tenant we have, you may pay $15,000 to rent Rupp Arena, and then you have a menu of staff costs that includes everything from security to ticket takers to box office personnel, et cetera. And you pay the actual costs for the number of hours for those people. For the horsemen, we just constructed, what's it going to take for us to operate a horseman game with a theoretical 4,000 attendants? $9,500. Okay. So that's the number I was looking for that's not on here. When I read on here, say that Evansville game, $3,569, but it was actually $9,000. Yes, and you get to the $3,569 by deducting what we paid in personnel costs to operate that game. Okay. Another question I have is when it comes to, Councilman Ellinger alluded to having those third parties come and do concessions, and I realize that if the Lafayette School team comes and they actually work the concession, that they're doing that so that they can earn some of that money. Would it still be cheaper to do it that way and allow them to take off a portion of the sales, decrease the cost of the food so that you could have, say, quarter days? But the stadium saves the money that it paid those hourly workers so that it's not a loss to the stadium, but it's still an economic advantage to the patron. Well, you know, we've got a long history of working with other charitable organizations in the community that count on working concession stands at Rupp Arena for some of their revenue and to send them away. I'm not sure that we're willing to do that. I'm not sure why you have to send them away. Maybe I'm not following your question. What I mean is instead of having your staff, LCC staff, work concessions for horsemen games, allow all those outside groups to come in and do that so you don't have that staff cost. Well, but they don't work for free. They come because we make a donation for their hourly work to the organization. Right, I understand that. But what I'm asking you is would that hourly contribution that you're making to the organization be cheaper than what your staff cost would be? Not generally. Plus, we have found that in order to have capable staff there, we have to kind of mix in that labor together with our more skilled, experienced labor. Okay, that makes sense to you. I guess that's it. That's all the questions I have for you. Thank you, Mr. Myers. Mr. Maloney's hand is up. Bill, I appreciate what you all are doing, and I appreciate you working with the horsemen. A question I got on the volunteers that you, or the charities, how do they deal with the liquor? I mean, the beer. Do you all make sure there's no beer in that booth? They don't serve it. If they haven't been through TIPS training, they don't serve it. It's another reason we have to have our own staff who have been through the required training for alcohol service. And I don't know if it's probably a question for them, but do you all, when they work up a schedule, do you all make recommendations that they make sure that they don't play the same time the legends play? Because it seems like I went to a couple of games last year, the year before, and when the crowd was low it was because the legends were playing the same night. And it just seems to me that it's a beautiful night that most people are going to be out seeing the legends. I'm sure that they, that's a question for the horsemen. I'm sure that they try to avoid whatever competing activities might exist. But that's not, we just, we work with them and we gave them dates for the upcoming season about a month ago. Two weeks ago, two months ago. About two months ago we gave them available dates and said, these dates are available in our schedule for you to submit to the league to schedule football games. I just want to come in. It seems like you all are trying every effort and giving discounts and working to keep them here. And hopefully next year that we get to 7,500, if we're going to another league, and maybe this time next year they don't have to come here and go to your board. And maybe something will come out of it that way. But I commend the work. Thank you, Mr. Maloney. If there are no further questions, Mrs. James has a question for the horsemen. I'm sorry, what's your name again? Brian Boehm. Brian. Okay. A couple of questions is how do you explain the drop of attendees since 2003? What's been going on of why people are dropping off? I think if you look at minor league in sports, of which I believe we were a part of in the UIF and the NIFL, it starts off strong, and then once people come out and see it, they've seen it, they don't necessarily need to come see it again. And it's just that added excitement. Our job, and one of my personal goals, I've only been on the general manager position since October 15th. So one of my major goals is to keep that excitement built on through this season, through the next season, and through seasons to come. That falls on our shoulders. The lack of attendance that's directly coincides with marketing, coincides with specials, coincides with everything, which I believe and the organization believes coincides with the cost that we incur and our fans incur at the venue. Some of the rebuttal comment, if I may, to what Mr. Owen had to say was on the rent and the lease agreement, I think of which Mr. Myers was referring to, was the rent is $9,500, and then you add on these costs to the $9,500, which gives you the $12,000 to $13,000 per game. He's right, the bond fees and the state tax all go different places, but it still averages about between $12,000 and $13,000. Will the change of division that you recently received, is there anything attached to that as far as advertising that will automatically increase exposure? Absolutely. Arena Football 2 is a national organization affiliated with the Arena Football League, which is owned 10% by ESPN, ABC, Disney. Of that, they are in discussions of marketing and televising the Lexington-Louisville rivalry, of which there are three dates scheduled versus Louisville. We feel as though, unfortunately, about a month ago, Cincinnati had dropped out of the league. They went dormant for a year, but if we can get Cincinnati back into the league, Cincinnati, Louisville, and Lexington, you've got at least six games there of which enormous marketing potential and revenue potential for downtown is available. I'm going to ask you something with that, and I don't know if this is, I don't know, maybe you can't answer, but how much money do the owners of a team make? So as I'm looking at the lease benefits, and I'm looking that it looks like a lot of the costs are being offset from one end. Right. Is there any way that, I don't know, I'm just thinking private business, that the owner or someone that's making money based on the benefits would then be able to offset some of the costs for the patrons? I will speak for Lenny House on this regard. He has opened up his books to anybody who would like to see them. They're at Schweitzer McGehee. He has given me that authority to go ahead and let anybody do that. In 2006, he lost in the area between $1.3 and $1.5 million on the horsemen organization alone. In 2007, we've cut that deficit to about $850,000. It is my goal to cut that even further to about $450,000. So as the horsemen organization, yes, Rupp Arena, Lexington Center, might be 10% to 20% of our total costs. However, every percentage counts, and there is no money being made for the horsemen or the horsemen organization. Everything is pretty much a loss. Okay. What about the $12,000 that you have listed as what the rent is? Will those books also show where you're coming up with those numbers? Mr. Erwin said that he wasn't sure of where the $12,000 was coming. I have the settlement receipts from 2006 and 2007 of which every charge is shown. I would be happy to get that for you guys if you request them. Okay. And how do you know that dropping concession prices in parking will increase patronage? These are the only two things in our area that we don't control. We've lowered our ticket prices. We've made it extremely fan-friendly in regards of having post-game autograph sessions, having our players and our staff members out in the community to make them more marketable and feel as though as they're a member of this community. We've done as an organization as much as we can do other than an exceptional marketing job over the past few years. If you lower – more of our season ticket holders have made the comment of we can't afford seven, eight games due to concessions in parking coming there on a weekly basis. Maybe if there was a three or four-game package, it might make it a little bit more affordable. We've done that this year. For our organization, we have offered a four-game package instead of the total eight-game package. Other than concessions in parking, what else can we do? And that's the problem that we face as an organization is we're controlling as much as we can, but as a tenant, we're kind of handcuffed in some areas. So are there some things that you're trying that you haven't been able to see the results of yet? Well, not as of yet because we just started the four-game package this year, instituted it about a month ago. There hasn't been any major reduction. Mr. Owens talked about seven dates in 2006 of a concession program or six or so, I can't remember the exact number, versus three in 2007. I will admit that those promotions were asked for on a late basis, which was hard to market, hence why I asked him yesterday, can we have our schedule, it is mid-November, let's get this in stone now to market it now for our commercials, for radio, for print, all of that in place now, so we both can be a little bit more successful. Okay. That's all I have. Thank you, Chair. Thank you, Mrs. James. Mr. Myers has some questions for you, too. Thank you for coming in today, and I was trying to get at the bottom of the difference between the $3,000 or $4,000 rent that they're showing and the $12,000 that you're showing. I think you've done that. We would like to, if we could get those documents from you. Absolutely. That would be a big help. The other thing I'd say is I think that, and really this is for Mr. Owens as well, I don't know the answer to this problem, but I do know that we can't afford as a city to lose the horsemen. I think that would be irresponsible to let that happen. I'm not sure how to come together and how to make things more profitable for both sides, but that's what I'd like to see happen, and I think that the Outside Agency Oversight Committee has talked to Mr. Owens the last two or three years about increasing the number of opportunities that are there in the stadium throughout the year. And I think if you seem to say, Mr. Owens, that when you look at all these capital costs, things like repaving the parking lot, those kind of things hinge a lot on these eight games. And I would think that one of the answers here is to increase the number of opportunities in the stadium year-round so they're not so dependent on individual sales. But I think that there's a difference between, and I think Councilman Ellinger was trying to allude to that, a difference between the horsemen in the U.K. in that they provide multiple events throughout the entire season, whereas the circus and different things like that, they may have multiple events, but it's in a two- or three-day period of time. Again, I don't know the answer here, but I think that we need to do something to make sure that the horsemen can stay here and become profitable. Thank you, Mr. Myers. Are there any other questions? I have a question. Oh, Mr. Maloney, sorry. Just looking at Mr. Owens' printout, I guess y'all's printout, the ticket last year, where y'all had tickets sold and then I guess the remaining tickets that y'all gave out, how many tickets did y'all give out complimentary a game? Do you know, on average? About 1,000 tickets per game. Again, that's part of, you know, any type of partnership agreements we come up with with sponsors, come up with any type of agreements with youth organizations that, you know, we're charitable to. You know, it kind of varies from game to game, depending on interest. I try to help out. I was involved last year as director of operations. I was very involved in making sure the players' families were taken care of when they got here and there wasn't a whole lot of expense for them to come and watch their son play. You know, then you have to factor in, you know, our cheerleaders, which there was 30 to 35 of them, and then you consider that you have your support staff, of which all of our support staff is comprised of interns, which we graciously give them two tickets apiece for their families and friends to come to. So it varies. I guess that's a long version of the answer to your question, but it varies. Okay. The question asked, Mr. Orange, but I think it should have been addressed to you. Do you all work with the schedule and with the legend to make sure that there's not a same night? Because I'm a big Horton fan. I've been to a lot of games the last five, six years. I mean, three years, whatever. But it seems like the night that I was going with a very big crowd is because of the legend. And have you all tried to work out the schedule? Yes. This year we received our, with the new league, we joined on October 15th, probably around October 20th, 23rd, around there. We received a sheet from Arena 2 with numerous dates on it for us to get with Mr. Hall and Mr. Owen on the availability for those dates. What I had given to Mr. Hall was dates that I would like to see if they would have them open, and I also gave this to the league, of dates that also didn't coincide with Legends games. We had the Legends schedule, which came out a few weeks before ours, and our tentative agreement or our tentative schedule for the Horsemen. And there were about four or five dates that didn't quite meet up so well with them having a game and us having a game. But then that kind of goes back on facility availability. And then the league structures our schedule. I can request dates. I can't. How many games are going to be? Eight. I mean, tonight the Legends are playing. Four. There will be four games on that. Okay. Of which the Lexington Legends have been an extreme help and aid to us over the last two years, and I am in current discussions to try to see if we can't get some cross-marketing going where, you know, if someone comes from a Legends game, they have a coupon or something for a Horsemen game. I think both of us can work together for the common good on this. You said Cincinnati pulled out. Are they still got a football league? Are they going back to what the Horsemen won last year or are they out altogether? The entire franchise has went dormant for the year. The owner pulled his interests out when he moved to a different team. He was a member of the Cincinnati Bengals and was released from the Bengals and went to a team out west. Subsequently, he didn't pay some of his league fees, and they asked him to leave. However, the team and the franchise has went dormant. I am in coordination with the league to try to find a new ownership group to bring Cincinnati back. Yeah. I understand that you all are going up to a higher league, and the football players you all are going to have to recruit are going to have to be, I mean, a different caliber than what you have. Absolutely. And my concern is a lot of people that I went and watched the game were former Kentucky players, Georgetown College players and all that. And when you start going into that league, you start losing those players. Because they're not going to be at that caliber of players to be in that league. And what concerns me is the majority of the people that like to follow these kind of football, they like to follow local players. And how are you going to be able to substitute when you're likely you're not going to get the U.K. players anymore or the local players at high schools that played here that a lot of people follow? And you're going to end up getting, and I assume that this is going to be on television, ESPN, you're going to be getting some pretty good ballplayers, but a lot of no-names that folks here don't know about. Well, that's to an extent. I believe with the recent success of U.K., many of their seniors that have a lot of potential to move on past U.K. can actually play for us. I'm extremely involved in the recruiting process of our players, and I can say that we target first off the guys that are local, the Eastern Kentucky guys, the U.K. guys, the Georgetown guys. And we want to keep that base of players that we've had for the past few years as our core team. Yes, there will be some changes, but those changes will be for the better, and the caliber of player will be higher. This is where those players at U.K. can make a difference, and we tend to hopefully bank on that. Have you all started recruiting any of these players? When does that happen? Absolutely. We've started back in September recruiting. Have we gotten any big names yet? There's a few. There's a few. Name so I can tell everybody. Well, there's a few. Ike Klepper, Eddie Evanston, who has been our quarterback for the past few years, their contracts are still pending league approval. They have signed. Harry Lewis has verbally committed. Michael Madrazo, Will Mulder. Probably our key two losses was Ellery Moore and Antonio Hall. Both were signed to our big brother in the AFL for Chicago Rush. Okay. Well, I look forward to being there next year. Thank you all for your presentation. Thank you. It's nice to get an update, though it may not be relative to what we're talking about here today. Are there any further questions? Mr. Ellinger has a comment. I want to remind the committee that we're scheduled to adjourn here at 2.30 because we have a meeting upstairs. Right. Mine shouldn't be too long. But, actually, I'd like to ask Mr. Owen again, if he doesn't mind, a couple questions. Okay. Thank you all for coming today. Thank you for letting us come. Providing us with that information. Sorry to continue to keep asking questions, but a couple that came to mind. Do you have the economic impact if the horsemen, if they, for some reason, don't make it, what they actually bring to the LCC by concessions and parking and rent that we would lose as a city if they didn't make it? Well, I have that data. I have not calculated it, but that data is available. You know, if it boils down purely to economics, we do the one concert and the net revenue from the one medium-sized concert and seven or eight weekends to do it over would outweigh that to Lexington Center. Our preference is to have seven or eight successful football games. Okay. I guess on the same note, though, we do have a lot of empty dates that we would like. Would it be to our advantage if we had 365 performances on 365 days, or would that not be a good thing? Well, there again, there's a misconception out there, I think, that Lexington Center is a promoter. We're not. We're a venue, and we make our facilities available to promoters that take private promoters' risk. And that's true whether or not it's a concert or a family event or a truck pull or an indoor football game. But I guess it goes back to my question. Would it be to our advantage because we would be making revenues every night if we could to have something every night? Oh, yeah. We like to have the lights on every night. So to say that we could have one concert that would do the same, but then we'd lose eight other opportunities. So we don't want to lose those eight opportunities, do we not? Of course not. We would rather have, as I said, you know, as I said, we would rather have seven or eight football events than we would the one concert. But if you boil it down just to economic impact and lost to Lexington Center revenue, you can replace the net revenue with that one concert. That's not our objective. Our objective is to maximize the revenue from the events. So what kind of ballpark then are you looking at, the lost revenue, would you be estimating? Rather than shoot from the hip, I can get that data to you. Yes, that would be fine. I can tell you the parking and concessions revenue and rent revenue, everything from start to finish. Okay, thank you. And that is available. And I guess this is kind of odd. What was in 04, between 03 and 05, there was a big drop. Do you know what the difference with that was? You had 129 performances, and then you had 88 and 127. That was the year you had the Daughters of the Nile, which were here for six years. No, but you, but. I can tell you, they use it almost all day long, every day. It just kind of was glaring on why 04 was a lot lower in performances. And maybe that's, and attendance was a big difference that year. Which page are you looking at, Mr. Allen? Page five. 04 and 05. Well, just looking at 03, 04, and 05. Well, 03 included in that, in that, in 03, there were nine days of the Daughters of the Nile, and we had two circuses in one fiscal year. That's the spike of 129 there. 04, I don't, you know, I looked at the spike previously, because the 88 was comparable to the current, or to the last fiscal year. Again, it kind of runs in cycles. I will say that with 800,000 people come, with the activity that we get at Rupp Arena, we are a busy arena, particularly one in a market the size of Lexington. The proposal that they presented that we all just saw, and so it's probably premature to ask this question, but the four things that they put in there, do you know what that would cost you all if that was implemented? Well, let me pull that out. You know, if you look at half-price concessions, an awful lot of the expenses of Lexington Center and the shops and Triangle Park and the Opera House right on the back of the concession stands. And as soon as you, would you provide that only for the horsemen, or would you provide it for a concert promoter that might bring us six concerts over the course of a year that are attended by 125,000 people? What kind of concessions would be expected from our primary tenant, the University of Kentucky? Okay, I guess just back to my initial question, do you know what that cost or savings would be? Fifty percent reduction in concessions pricing for all patrons regardless of their income. Are you talking about the four bullet points there? Yes, sir. I can get that data for you. I don't have it. Could you provide that for me, if you don't mind? Yeah, we can tell you that. And I guess one further question, if there was an incentive, and is there not an incentive in the contract right now for a rent if it gets a certain number and the rent actually is zero, is that correct? They begin to get rental concessions of $1 per head at 4,500 attendants. When it gets to 6,000 attendants, that jumps to $1.50 per head. That's rent reduction to their organization for that game. When it gets to $7,330, the only fee they're paying are the actual costs of game personnel required to get that crowd in and out safely, first aid costs, ushers, security, those types of expenses. So that becomes, as we said earlier, the more we get in there, it's a win-win for everybody. Have you looked at, this will be my last question, Dr. Steeve. Okay. Have you looked at, and is there anything in the contract about, as attendance increases that there are concessions on, on the concessions and also on the parking? Is there any incentive clause on those? As the attendance increases, then they would get a kickback on concessions or parking? Well, that's the operate. When we can look to attendance-based revenues, like concessions and parking, we can give them a break on the rent. I guess they could pass the break along to their ticket buyers if they'd like. Right. That's what I'm trying to think. Whether or not they want to pass, I mean, in final analysis, that would either be a rebate or a reduction in their ticket price. Right. That's their decision. Okay. Thank you very much for coming down. I appreciate the information. Thank you. And are there any motions? If not, we'll go on to Item 2. Mr. Myers introduced the review of provisions of financing to partner or outside agencies, as we used to call them. Mr. Chair. Yes, Mr. Blevins. While Mr. Myers is coming up, I'd like to make a motion before the committee that we delay Ms. Koh's testimony until next month, as we're almost out of time today. We can perhaps wrap up Mr. Myers' item, but I think we need to let her go, because I don't think we're going to get to it. That's okay. Well, I don't think she had much to say today. I'm sure it was very important. If anybody on the Council is interested, they can ask her during Council report. So we'll be happy to excuse her. That's a good idea. Thank you, Chair. I was hoping she would have a long report today, but I don't believe there's one. Is that correct? Thank you. Mr. Myers. Thank you, Mr. Chair. Could I have the Commissioner come up for a second, please? Good afternoon. Thank you, Commissioner. One of the things that we'd like to do, or I'd like to do, is to get from the Department of Law what sort of things have to be or need to be in a PSA. We're looking for consistency, consistency, consistency. And also a very important aspect of it is how do we recapture unspent funds from partner agencies? And so I've got some documents here that came right before the meeting because they weren't expecting this to be on the docket today. So that's the majority of what I'd like to get from you, is structuring the PSA. And here's sort of the history of that. When you look at most partner agencies have to fill out an application to receive funding. In that, there's outcomes, there's a whole lot of things that are measurable, that are based, and that's part of what we base whether or not they get funding on. The problem is then that when the PSA is written, it normally doesn't have any of that language in the PSA. In terms of the expected outcomes? Right. Okay. And so the things that we require of them in order to get the funding in the beginning, on the front side, we don't have any teeth on the back side once they get the funding to hold them to that. And so we're looking for ways to standardize some of that language and make sure that we can hold them to the outcomes that they've said that they're going to provide. Okay. You're talking about something where you could review it during the course of a year, as opposed to when they come to you at the end of a fiscal year and ask for more money, you go back and you say, okay, let's see what you did this year. Absolutely. You want something mid-year or something where you can go back and measure how they're doing? Yes. And I think quarterly would probably be preferable. Okay. Because that would give them an opportunity, if they're not meeting their benchmarks, to make some adjustments in their plan so that they can get to those benchmarks, say, for the next quarter. Okay. And whether or not the council and administration at some point want to tie funding per quarter based on outcomes, I don't know. Maybe that's next year. Okay. But I certainly think that we need to have outcome-based PSAs that provide the opportunity for oversight throughout the year. All right. And then, again, a very important aspect of that is to recapture funds that are unspent. An example, and I won't name the agency, but a couple years ago we gave an agency some funding to do a particular task or provide a service, and they said that they were going to have to hire a staff person to do that. But at the end of the year, they had never hired that staff person. So, you know, at some point we need to be able to look mid-year and say, if you haven't hired that staff person, obviously you're not going to be able to do the work that that staff person was supposed to do. Or if you found another way to get that done without that, then maybe you don't need that money. Okay. I'm looking at the agenda for today, and that covers, I believe, item B and item D, what you just mentioned. Yes. A process for recapturing unspent expenditures and expectations on how monies can be spent, drawn down, and reported. Okay. What about item C, Council Member Myers? The accounting of expenditures, what exactly are you all looking for there? I'm going to have to get back with you on that one. I can't remember what that one was. I know under item E, you and I had a conversation recently about an agency and the possibility of having our internal audit group go in and just check to see how LFUCG monies are being spent. Yes. You still are interested in that? Absolutely. Okay. And one of the things that we can look at with regard to that is, some agencies do work on a regional perspective, and we want to also ensure that our dollars, LFUCG dollars, are being spent here in Fayette County and not subsidizing other counties' programs or services. All right. I am not certain. I haven't gone back and looked at all the PSAs. I don't know whether they have all of the consistency. From what I understand is we have, for a number of years, used an agreement, and it might be slightly modified for an agency. And then year after year after year, that same agency has that one, and then that might be used for another one and so on. I don't know whether there's been a detailed review recently or not, but there's some basic provisions that I think are included in all. But I understand the need for consistency and I understand what you're looking for adding. Okay. And then you also do have that piece in there that will, in the PSA, ensure that LFUCG has the ability to send our auditors in to look at their books. Right. Currently, there are provisions in every one that I've seen that state that those books and records are available for inspection, which means we could send somebody over to look now, but we can be real specific about that. Okay. Also, as part of that, could we include in our PSAs that we get their total budget so that we understand where their other funding sources are coming from? I think you could ask for it. Okay. Try to determine the need for the money, is that what you're thinking? Right. Yeah, I don't see why you couldn't do that. I don't know what's presented now to Council Member Myers. I would assume they would do that and say this is how much we need, but I gather that they don't always do that. Correct. Okay. We want to see how they're spending their money, if they're spending their money wisely, because while we may not necessarily have much oversight on how they spend other funding sources' dollars, we do want to make sure that we're not giving money to an agency that's not doing well with the other dollars it's receiving. One of the things we might want to consider, and I don't know whether this is done now, but that is have some sort of process in place when people actually request the money. In other words, before a request is considered by the mayor and the council for inclusion in the budget, what sort of items have to be presented as part of that request? I don't know whether we have that now or not. I think actually Commissioner Helms and Mr. Kelly may want to come up and speak to that. I know they're working on a uniform process across government. Well, that would help a lot in terms of resolving some of these questions on the front end. Right. Commissioner Helms did an incredible job last year in the budget cycle of putting together some interview committees, and they did site visits and a lot of different things. I think my thinking is or my sense is that the administration is trying to use what she did as sort of a jumping off point. For all of the agencies. For all of the agencies, yes. Good afternoon. This past year we did have a process that we started where we asked each agency to come in and to work or to present their information to a panel. A lot of the information that I think you talked about, I won't say a lot, but several of the items that you mentioned are already required. I think a portion of the problem is that we haven't really been monitoring the agencies. You know, we make the allocation and then we don't really interact with the agency again until the end of the year. And we need to do more. We need to provide. I'd like to see us have a technical assistance meeting at the very beginning to make sure that people understand what the requirements are going to be. If you apply for the money and you're successful, here is what you're going to have to do in order to satisfy, you know, the parameters of the funding. I think you're exactly right, and I think that would be another thing that we should put in the PSA, so that they're on the hook for coming to that technical meeting and then they're accountable for what they learned in that meeting and what we're going to hold them to. Many funders do not even, you know, you're not even eligible to apply unless you attend that meeting. If you don't attend that meeting, then your application is then pulled. And so I think maybe we just need to put a few more steps, not, you know, not user, steps that are not user-friendly, but just steps that say these dollars are taxpayer dollars and we've got to be good stewards of the money. Absolutely. And I agree with you that part of the problem is that we haven't been monitoring. And that's why we want to put those things, those provisions, into the PSA, because that's a legal document that they sign rather than the application that they submit at the beginning. I think the PSA is a good document. It just doesn't get into the specifics. And each agency is so different, and they interpret it differently. If we had that technical assistance meeting at the beginning, we would go over the PSA and they would understand what they're agreeing to, because I think to some extent some of these agencies are very small. Right. You know, we're giving $2,300 to one agency. We're giving another one almost a million. There's a vast difference between the workings and the administrative talent within each of those agencies or the administrative depth in each of those agencies. Okay. One more follow-up question. Can you give us a little bit of idea where the administration is at with respect to coming up with that sort of one-size-fits-all process for next year? Mr. Kubine and I and Mr. Deaton are meeting later this week. I've put together a draft packet of material, and we hope, along with a timeline for the upcoming funding cycle, and hopefully we'll have something to present after we meet together. Hopefully we'll have something to present to council very, very soon. Okay. Can you also include Commissioner Askew in that process? Because he was just saying that some of those questions, when answered ---- I don't know whether I will include him or not. I will give it serious. No, we work as a very good team, and he certainly will be at the table with us. Okay. Thank you very much. I know you all have a confirmation hearing. Let me ask a question. When would the committee like to see a draft of those proposed language changes? Do you have a timetable in mind? I think that we'd like to see it early enough that we could send a recommendation to the full council and have that approved prior to the start of the application process for this coming fiscal year. Okay. That will not be a problem. Okay. We'll do it. Thank you. Thank you very much. That's all I have. Thank you very much. Is there any further business to come before the committee? If not, we are adjourned.