! Thank you. Thank you. Thank you. Thank you. Thank you. Welcome to the March 12th meeting, the work session. And today we have first on our agenda is issues for public comment on public comment for issues on the agenda. The floor is available for public comment for issues on the agenda. Mr. Mundy, is anyone here? All right. Thank you, sir. All right. All right, next on our agenda, rezonings are docket approval and docket approval. There's no docket to approve this week. There's no council meeting and no rezonings. So that allows us to move to the third item on our agenda, which is approval of the summary. Is there a motion to approve the summary? Thank you, Council Member Beard. Motion by Council Member Beard, second by Council Member Clark. Is there any discussion on the motion? All right. Hearing none, then we can take a vote. All in favor, please say aye. Aye. Opposed, no. Motion carries. And next on our agenda, budget amendments. There are no budget amendments to approve this week, which allows us to move to new business. Is there a motion to approve new business? Motion by Vice Mayor Gordon, seconded by Council Member Farmer. Is there any discussion on the motion? All right. Is there any discussion on the motion for new business? All right. Hearing none, then we can take a vote. Is there a, I'm sorry, all in favor of the motion, please say aye. Aye. Opposed, no. Motion carries. And next, on our agenda, continuing business and presentations. And first, I need a motion for the NDFs. Is there a motion? Motion by Vice Mayor Gordon, second by Council Member Myers. Is there any discussion on the motion? Okay. Hearing none, then we can take a vote. All in favor, please say aye. Aye. Opposed, no. Motion carries. And next on our agenda is a report or a summary, rather, by Council Member Henson on the Public Safety Committee meeting on March the 5th. Council Member Henson. Thank you, Mayor. This is committee summary for March 5, 2013 Public Safety Committee. First on the agenda was approval of the summary. Second was 24-hour nuisance abatement form, which David Jarvis, the Director of Code Enforcement, presented an updated 24-hour notice abatement form, and council members approved the revised form. There was no motion needed for that item. Next on the agenda was the FEMA Hazard Mitigation Grant Program Update. Pat Duggar gave that presentation. FEMA has approved the grant application pending the approval of the Irving County Council. The approval of the grant, she can then move forward on projects in her division she's been working on, including a tornado facility on Fersales Road campus. She said FEMA is now making mitigation money available for residential single and multifamily dwellings to retrofit their homes for wind resistance. And there was no motions that came from that item. There were several items that were removed from committee, and we adjourned. A motion to adjourn. Thank you. Thank you. Council Member Henson. All right. Next on our agenda is a presentation on the annual road resurfacing process by Kevin Wente from the Department of Environmental Quality and Public Works. Mr. Wente. Thank you, Mayor. Our department is pleased to provide the administration and council an update on our annual resurfacing process. as council's well aware we had second reading for our 13 million dollar bond for resurfacing efforts and this is basically just an overview of some of the things that we involve ourselves with as far as rating the pavement management system updates and then translating that into the roads that we resurface as well as budgets and other items that we'll cover in this presentation. Every May, we hire a couple of interns from the Department of Engineering at the University of Kentucky. Those interns will be trained to assist us in evaluating street irregularities, as you see here, from the standpoint of block cracking, joint deterioration, surface irregularities. All of this is basically reviewed and then imported into our pavement management system every year. Road resurfacing activities include the following that you see here, general road resurfacing as you see, base failure repair as it is warranted. Base failure repairs are typically warranted through road coring that we conduct if we We are suspected of road conditions that meet those requirements. Annual pothole repair that is basically driven by citizen complaint. Crack seal and road rejuvenation and slurry seal, which typically occurs more so in the rural service area than the actual urban service area. approximately four years ago we began the process of evaluating the county in halves as opposed to dividing the county into fours which is what we had traditionally done and we felt that this was more accurate as far as reporting that information to council and having a more up-to-date report as far as numbers to you and so far as resurfacing conditions were concerned This slide basically shows that this year we're going to be conducting our efforts on the eastern portion of the county, and then next year we'll focus our efforts on the western part of the county. The dividing line is effectively Tates Creek Road through the center of downtown, and then Georgetown will separate the county into our east-western divisions. From the evaluation that occurs in the field, as I said, we will update that information into our pavement management system. One thing I would like to add, and so far as this portion is concerned, one of the problems that we've had in the past is linking the information that we've had. And by the way, I'd like to say nice fans. That's a great, great add to this. I can feel the breeze from here. In years past, we had actually had a tie to our actual tabular data set, the actual pavement management system that resides in the Microsoft Access database. A couple years ago, we actually had a corruption of that file, and as you're well aware, insofar as we're evaluating the information, I've only been able to provide you with tabular information to show you what streets were in greatest needs of repair. At present, we're working with a group in northern Kentucky to provide a full-onset GIS application that's going to be driven through a tablet, probably an iPad, to do the evaluations. It's going to have a GIS component to it so that there's no question as to where we are so far as rating what particular street, as opposed to looking at a database and trying to follow along in a car to determine what intersection we're at. So it will be a lot more efficient in the rating, and in turn will provide you a map that will be a graphic representation of roads of greatest need within your district. So just to make mention of that. Typically, that assessment with our interns starts in May, and we generally wrap that up by mid to end July. From that information, we assess road needs within the calculated square footage that are of greatest need, and greatest need being those that are rated at a rating of 65 and less. So effectively, we take all of the information that we've evaluated, and that we calculate a square footage of greatest need, which translated to a percentage that we divide per council district. That percentage, okay, before I back up to go to the next portion, again, about four years ago, at the same time when we started to evaluate the county in halves as opposed to fourths, we also noted that we were not tackling the roads of greatest need. At that point in time, the standard of practice was we would have an allotment of money that was budgeted by council, and that money was divided equally in 12 sections among each council district. We determined from our assessments as we were looking at the pavement management data that we were really not tackling the roads of greatest need. That's when we started to move to this evaluation where we looked at a full county assessment. we acquired a percentage of roads that were of greatest need and then were able to determine per council district what that percentage equated to. That percent or that number then equated to the percent allotted from a budgeted amount that you provided us. And that has in turn, I think, personally, equated to us being able to address roads of greatest need. And we're starting to see percentage decreases of roads that have required attention that, unlike years past, we really haven't seen a dent in that need for repair. So effectively, my point being is that I think we're doing a really good job in attacking those roads. The second slide basically just reinforces the fact that how we allocate that money in a percentage per council district. One thing, if you will note in the lower slide, beginning this year, the allocation of resurfacing funds that were bonded, that $13 million, we are going to place into PeopleSoft and requisition that money per council district. that will in turn allow your legislative aides, yourself or anyone requesting that information, to get online and to see the money that was allocated to your council district and what funds remain as that resurfacing continues through the calendar year, fiscal year, what have you. So we're going to continue that practice moving forward starting this year with the allocation of the bond that was approved last Thursday. So I think that's one positive note that I'd really like to emphasize to you today. As far as just the general flow chart as to how we go from there, we provide the list of roads, a full list of roads to council, and typically we'll highlight the roads that require attention as far as maintenance is concerned. And then with the work of the Urban County Council and our Division of Streets and Roads, we focus our resurfacing funds to the roads of greatest needs within Fayette County. Some points of interest. Our resurfacing contract was rebid in July of 2012, and in the new business items you'll see today, we actually are requesting an extension of that current contract where it was set to expire in July of this year. We're asking for an extension into July of 2014. our pavement management updates with this new GIS application some of the things that not we're going to see a benefit from is one I think efficiency as far as our ratings and then in turn the efficiency of reporting that information back to you the council as well as the administration we'd also like to look at roads that are requiring maintenance and so far as perhaps including bike when we're doing restriping to those roads. If we have enough right-of-way to where it could be warranted, that would be something that we would like to incorporate in this evaluation as well. Our last update was, as you can see there, was in July of 2012, and we're still working off of those numbers presently. We have sent a request to the University of Kentucky for interns this year, which will begin in May. The fourth bulletin item there, the concrete versus asphalt, our office, as well as a number of other offices, have received phone calls from the Ready Mix Concrete Association of Kentucky, and they would like to effectively compete with our asphalt contract. It's something that we are looking into. We have a number of concrete streets within Fayette County that we're responsible for maintaining. The only problem is the cost associated with repair of a concrete street is typically far higher than that of an asphalt street. Let me back up. Repair of a concrete street is typically far higher than that of an asphalt street. So with the assistance of council with work insofar as looking at areas of perhaps higher industrial use or higher truck traffic perhaps, it might be that within our pavement management system we could look to experimenting with concrete. In fact, Council Member Akers had a great point as far as looking at courts in her district that had high industrial use and perhaps instead of replacing those or maintaining those with asphalt, looking at replacing them with concrete. So there again, that's a great idea and it's something that we will definitely investigate. This fiscal year, just to go through the numbers as far as monies that we have, those are the next bulleted items. $3 million effectively was allocated for fiscal year 13 for resurfacing. We had roughly $700,000 allocated for county road resurfacing and maintenance. And then obviously the $13 million that council has approved to bond for additional resurfacing. As you can see, and you're probably well aware of, the breakdown of council districts for both the bond allocation as well as what was budgeted for fiscal year 13 is the chart you see below. And then effectively resurfacing estimates are based on one and a half inches of milling depth and asphalt replacement. And one of the things that we wanted to make a point to denote as far as our restructuring our contract with our asphalt provider, ETS, we have tiered our contract price so that effectively with more asphalt that we laid down, we get a better per ton cost associated with that. So that's something that I think is going to work to our advantage as far as the cost savings as we move forward and something that I just wanted to make you aware of as well. One of the things that we wanted to take a look at insofar as redistributing the means to which we have allocated funds for resurfacing, as opposed to having the equal amount that was divvied up per council district and looking at our numbers as far as allocating monies to greatest need per council district, we will be able to track that greatest need decline as we move forward, meaning that as we resurface these streets, we can look to see the areas where we're really tackling roads that are in greatest need of repair and start to see that percentage drop. One thing that kind of threw everything out of kilter was the redistricting, And this is what this slide was basically designed to weigh into that formula. When we first started this process of fund allocation per percentage, we were in a process of also redistricting. So when we first began this process and where we are today, we really can't compare council district per council district based upon all these changes that resulted as a result of the redistricting. So moving forward, I think we'll have a better handle on that to track and chart how your council district is moving forward as far as tackling those roads of greatest need. But we've had a little bit of a setback in doing it in the past four years simply because redistricting kind of threw a wrench in all of that. So that basically concludes my presentation. I've given a lot of information in a short amount of time, so if you have any questions, I'll be happy to answer those. All right. Thank you, Mr. Wente. We have council members signed up, ready to go. Council Member Myers. Thank you, Mayor. Thank you, Kevin, for an excellent presentation. I wanted to ask if I could just ask Mr. Wente to explain two slides without my time starting, just so that he can give us some more information about these two. And the two slides are the road maintenance flow chart. could you just kind of go through these different issues that roads have and how we look at those? And the reason I'm asking that is because we talked about that issue of the way council members look at this. We have a limited pot of money, and we're trying to get the most bang for our buck when we submit the streets that we want paved. But it might be that we do a long street. That conversation we had the other day, can you kind of explain that? Absolutely. One of the things when we were meeting with Council Member Myers is discussing what effectively the money that we allocate to your council district is going towards. And effectively that money, insofar as what we're looking at, is effectively solely for road resurfacing. The other maintenance items are items that are typically, those items do occur within your district, but we allocate percentages off the top of the full budgeted allotment of money to tackle these additional types of repair or maintenance or to facilitate those additional maintenance techniques. For example, crack sealing, that occurs within the urban service district or urban service area, but typically that's not a function of what we're asking you to relay to us. We're simply looking at roads of greatest need of repair from the standpoint of resurfacing. In addition, base failure repairs. Those are obviously going to be of greater cost insofar as a maintenance activity or construction activity because of the amount of work that's involved insofar as going at a greater depth, replacing the base, and then resurfacing over top of that. So, again, that is not typically a function of the monies that we're allocating per your district, but we really need to make you aware of when these repairs are required as far as a more expensive repair such as base failure. Road rejuvenation and slurry seal that typically occurs in the rural service area, that is money that is typically allocated through the county road aid fund and would not be a function of the monies that would be allocated to your district. And again, pothole repair. That is, we have a fund that is set aside specifically for pothole repair, and that does not implicate your allocated amount as well. So just to clarify those steps. Council Member, is that adequate? Can you talk about how you helped us determine whether or not we should look at doing a small section of a road that's really bad when there's other issues in that road as opposed to just doing that long stretch like we did on you. Thank you. That was a point that I meant to target, and I did not. With the information that we provide you, that is, this is the tabular form, then one of the examples that I gave Council Member Myers as well as the administration is we don't have weighted roads with regard to the information that's reported to you. For example, if we were to take Shinaway Road, would have the same rating as that of, say, Shinaway Court. Shinaway Road obviously has a higher volume of effectively a collector road, where Shinaway Court, in this example, would have, say, six houses. When we look to develop this GIS application, one of the things that I would like to provide the council is a weighting of roads that have a greater need based on traffic volume, as opposed to, say, a court or an alley that would not, whereas right now they're weighted the very same. You would see a number of, say, 55 attributed to Shinaway as you would 55 attributed to Shinaway Court, and it's up to you basically with that information to determine where you want your resurfacing dollars to go. Obviously, Shinaway Drive would be a higher priority, in my opinion, if I were a council person as opposed to Shinaway Court. So that effectively is one of the things that we're looking to tackle insofar as presenting this information graphically to Council as we move forward. Thank you. Can we start my time now? 26 seconds. He took two minutes. I was watching it very carefully. He started at four minutes and 15 seconds, and then there was two minutes of explanation. Okay, that'll work. I was just trying to get more information out to the council, but that's fine. Well, I think that we've got several that signed up. If they don't hit it, George, we'll come back to it. Council Member Myers, rather. Okay. Thank you, Mayor. Warranty. Do we have a one-year or two-year warranty on the work when they repave a road? Our warranty per our current contract, and Sam can follow me up on this, I believe is for one year. One year, okay. So I guess this is where the rub is for me because I just talked to Sam earlier today. We've got a road that was done. And by the way, this is a contract that does this work. It's not our people that do this work. But you guys had Sarin Drive done for me, and it's been less than a year. And if you go back to the picture where it shows the joint deterioration, it doesn't look quite that bad as that picture does, but it's getting there. and it's less than a year. So I'm wondering, you know, what do we do as a government to ensure that these folks that are paving these roads for us are doing a quality job? Because when I asked Sam what we do about that, he said we'll go out and have them crack-seal it. But can you talk a little bit about the length of time that a road should last if there's no cuts done in it after it's been paved? And then if you've got that type of joint deterioration happening in less than a year, will that road actually hold up for that length of time that we're expecting to get out of it? And I'd like Sam to follow this up as well, but typically when we're looking at a resurfacing contract, when we resurface a road, our expectations are for that road to last anywhere from 8 to 12 years. There are a lot of factors that play into the wear and tear on a particular road. Initial construction, whether or not it had an effective base before it went into construction. the amount of traffic volume and the type of traffic that that road sustains, seasons based on freeze-thaw cycles in the wintertime. There are other factors that are natural to just the central Kentucky area. We have a high karst-rich area that can also play a part in this. So to warranty a road, there are a number of factors that play into the conditions of that road from the onset of its construction. insofar as resurfacing that as i mentioned before we base our costs and the cost that we relate to you in council is based on milling a street one and a half inches in depth and replacing that with asphalt we expect that based on if our roads were constructed to our specifications for that to last effectively eight to twelve years once that asphalt is laid per additional maintenance which would include crack sealing and facilitating those types of maintenance activities. If within a year we have resurfaced a road and there is effectively a problem, as some of the things that you had relayed to us, I feel it is warranted that we respond in kind to our contractor to make sure that those issues are addressed and that those repairs are made per that warranty. If there's more that you'd like to weigh in on that statement. If that thoroughly answers. That answers, but if you want to ask it. I think what you're, you know, the thing we discussed there earlier, Councilman Myers, was the joining of the two when you're joining the pavement in the street. And that is an issue that I went to a conference in Louisville just earlier this year, And that is a big issue not only on our streets but on the interstate system and other areas. And that's something we've got to watch as it's being installed. And part of that factor is the ambient temperature when the asphalt is applied. We try to do it during temperatures that will allow that joint to bond with the previous laid deal. But I think the road that we're talking about was done when the ambient temperature was not ideal, and we may have to watch that. And that's one thing that's critical about us getting the roads and doing them during the heat of the summer. It makes for a better quality. Okay. I can go back and look and see when that was done. If you look at the road, there's parts of it that are really good, and there are parts of it that aren't. And so I'm just wondering if they did the best work they could have done when they first did it. Council Member Myers, we're now at 10 minutes. Oh, I was looking at the 19th. We're at 10 minutes. Okay. Thank you, Mayor. All right. Just let me remind Council Members, it's not my rule. This is the Council rule. Five minutes, and that includes Q&A. All right. Council Member Lawless. Thank you. So did I understand you to say that the crack seal and that kind of thing is not taken out of our paving budget? It is a function, a maintenance component that we actually will take a percentage off the top of the budgeted amount every year and apply that as a maintenance item throughout all of the urban service area. We wouldn't allocate a percentage per year allotted amount. So that wouldn't come out of my paving? Correct. The amount that we provide you per council district is the money that we would look towards solely resurfacing. And that's like crack seal, pothole repair. What about base failure repair? That is an item to which effectively we need to have a line item and a budget basically to offset that. We will use additional funds if they're available. Typically what I do when we're looking at percentages to allocate per council district, we'll up that percent, generally 10 to 15 percent, to account for the unknown, such as base failures and what have you, and then use that money towards the application of base failure repairs moving forward. Out of the? Out of the full budgeted amount. Because last year, I guess it was, a lot of the money that was used from my budget was due to base failure. and that came out of my resurfacing money. Just saying. I'd have to get back to you on that topic. Okay, I can get that for you also. Okay. And as we move forward, so the plan is that next year there will be a more accurate look at what the street conditions actually are because as you know in my district as well as I'm sure others and especially older districts, you do have more base failures. You do have the overpaving of streets, so the gutters are covered. Are we going to do anything about dealing with those situations where a street has been overpaved so many times over the years that there's either virtually no curb or because then we're dealing with the stormwater runoff. Beginning a couple of years ago, we actually did weigh in a component to the pavement management system that was effectively a curb and gutter evaluation, whereas we were charting, and it was just a rudimentary assessment where we were charting whether or not curb and gutter was in place first. If it was in place, what were the conditions? And those conditional ratings were basically good, fair, and poor. That is something that we still need to address in a greater sense. We were just adding that as a component because of seeing the need that was coming per council requests, per constituent requests, that we felt that was the best way to incorporate the evaluation because we had a team that was already circulating our roads throughout Fayette County. They were there so they could get out of the car and do either a windshield assessment or get out of the car to look effectively to see if curb and gutter was in place, and if so, what was the condition. So I think we've begun that process. It needs to be a more robust portion of our pavement management system. In my opinion, that's where it seems to be best suited because we're obviously out there in the field and rating that. I would like to see it in times moving forward that actually become a separate system altogether whether because of the capital construction costs that will be required to finance those repairs, if that's something that the city's responsibility ultimately decided, or if it's something that we have a fund that helps to offset constituent owner, residential property owners, commercial owners in a fund that would help offset the cost to them if we cite them for needing those repairs to be made. Well, and, you know, there are a whole lot of streets in my district that have never had a curb. and then it seems unreasonable because the city has not graded down and paved until there's no curb that the homeowner should have to bear the cost of that. And, Council Member Wallace, that could almost be a function similar in what we were looking at as far as rating of streets of greatest need per volume. That could be another component to the pavement management system as far as weighting necessity of curb and gutter based on whether it was once in existence or whether it was never constructed to begin with. And if it was never constructed to begin with, that would constitute a higher rating as far as need is concerned. Okay. Thank you. My time's up. Thank you, Council Member Lawless. Council Member Beard. Thank you, Mayor. Kevin, the two interns, do they work together or separately? We train them, and they actually are paired together. The reason that we keep them together, number one, is basically the safety application. We only have one vehicle that we can allocate for this process. And really the third thing, and that's perhaps the most important, When you're looking at the road repaving and looking at the roads as far as those irregularities that we showed on our first slide, the number that associates to a pavement rating is somewhat subjective. We have a fairly clear-cut criteria as far as the evaluation goes, but having two people to assess lessens that amount of subjectivity, in my opinion, so that we get a fair assessment of those streets. So they do, and to answer your question, yes, they work together. Okay, the second question involves the difference between a 66 and a 64. I think the numbers need to be a little coarser, not as granulated as they are, because, again, anybody can go down the street one day and think it's a 66, and then two days later they think it's a 63. And when you're struggling with this and trying to be fair, I got mine in on time. Thank you. Then we do 60, 65 in five number increments. It would get a clearer picture and there would be less discussion. Absolutely. And one of the things that you will come to find that will be of assistance to you as you're evaluating this information moving forward is everything will be represented graphically. And what I would do is typically have roads highlighted in green, for example, that would have a rating of, say, 100 to 85. So you don't have to involve yourself with putting money towards those streets because they're in great condition. 85 to 75, or excuse me, 85 to say 65, you know, would be one color, and then 65 and less we would have highlighted so that you could see, rather than looking at straight numbers, we have this, you know, this weighted value that compiles this information so you can see where you're going to get the biggest bang for the buck effectively. That does sound more reasonable to me anyway rather than try to pick. It's just difficult for us to rely on that tabular information to provide that information to you in that sense. We basically look at the numbers insofar as the resources that we have available to us now to give you that best assessment so that we can get our crews out in the field and get to work effectively. Very good. Thank you. Thank you, Mayor. Thank you, Council Member Beard. Council Member Farmer. Thank you, Mayor. I appreciate that. Kevin, thank you for your appearance for our planning committee earlier today. And you were brief there, and I want you to take your time here. But one of the things we talked about during that meeting was kind of the different importance this year for council members to turn in their lists over other years because our bonding that we're using to pay for some of these things has a different, I think, fiduciary level of maintenance and the fact that we have asked for the list to come in. and people are doing due diligence, but are we handicapping or holding you up by not having all those in yet? And to what capacity? One of the things, with the volume of work that's going to be let as a result of $13 million funneled towards resurfacing, the fact that we're right on the cusp of construction season. We've got a lot of capital construction projects that are underway. We've got a number of projects that we try to coordinate with our local utility companies. And if we were able to provide them with a list of streets that they know are going to be resurfaced, that is going to effectively assist us all in coordinating those efforts so far as if road cuts are required by Kentucky American, Columbia Gas, they could target that money for their maintenance to those areas where they know we're going to be resurfacing so that we can in turn come in after the fact, after they've finished their repair, and then resurface the road to where it's completely seamless. There's always going to be that unexpected, unknown, to where there's going to have to be road cuts because of just the nature of the business, the nature of utilities, the nature of construction, what have you. But if we can coordinate in a fashion where we're providing this information a month or two ahead of time, I think we're only doing ourselves a better service in the fact that we're going to get a better coordinated effort and we're going to see a better road network as far as not having as many road cuts if we can stay ahead of the game. I'll just dovetail briefly on that because I had spoken with both you and Sam about trying to get work started in the 5th District in the Eidl Hour area. And Mr. Martin's back there and he says he actually has a stormwater project that's going to go in out there on a couple of streets. So, yeah, having the interactive nature of all of the government entities as well as the non-government entities so that when we pave after things are done rather than before they are done, make us all look better. Absolutely. Absolutely. I appreciate the work you're doing and balancing all that. Once you receive our list, do you vet back through them in any capacity for roads left out or things that still need to be done? What do you handle? At this point, it's difficult for me to do so because I don't have an active link to our street center lines and the GIS. With this application that's coming forward, I think I will have a better way to say, you know, we have an intersection that may have been overlooked per your assessment with this tabular rating. Let's go ahead and incorporate it because we're right there. Or, you know, in a similar fashion, we can look graphically as to where in providing that information to you. You may have not seen a particular road that would have been a candidate for repair, but based on its geographic location, it just makes sense to go ahead and address that because our crews are right there addressing ones that you had already noted. So I think that will be of benefit moving forward. So this is this new PeopleSoft application? It's actually not a PeopleSoft application, but a geographic information systems application that we're having developed specifically for the city of Lexington. Wonderful. We appreciate that real-time information. Certainly. Thank you, sir. Thank you, Mayor. Thank you, Mr. Farmer. Council Member Henson. Thank you, Mayor. I have a question about the allocation of funds, Kevin. And if you think the process we went to is working, as far as percent of road miles in the district, you get a percent of the funds. From what I have seen in looking at the numbers from the times that we've started this and looking at the full assessed need of, excuse me, the full square footage of road of greatest repair, we are steadily seeing a decrease in that percentage, which I think equates to us doing an effective job of percent allocation per council district as opposed to lump sum allocation per council district. Right. In my opinion, yes, it is working. I agree with the lump sum makes no sense. This makes a lot more sense. But the thing that bothers me is like the older areas of our city, the older streets, those districts may have a higher percentage of streets below 65. and then your districts that are allocated a considerable amount are the districts that are really growing and have a high percentage of streets that are new. I agree completely. I think that bears weight to Council Member Lalthus' point, the third district per the first district, Council Member Ford's district, insofar as the age of those roads that require repair. In Council Member Ford's district, he has the oldest concrete street in all of Fayette County that is in need of repair, and that's one of the things that we have to target. I think we're doing a good job, and that could be a function as far as age, a function of the weighting component to this GIS application. Right now we're just on the cusp of getting that built, but I'm taking notes as we speak because these are great ideas, and something as far as the age of the road was not a function of what I was considering when we were looking at the initial weighted value of these streets. I'm simply looking at it from the standpoint of traffic volume. So that's an excellent point. Because I know when I submitted my list, which I have submitted, it was like all streets in my district that were 58, rated 58 and below, So I would just be curious to see what the other districts, how high they were able to go in their ratings. Sure. Thank you. Absolutely. Thanks, Council Member Henson. Okay, we'll go back to Council Member Myers. And Council Member Myers was sharing with me just for context that he had asked for this presentation for a couple of reasons, and I think he wants to share that again as well. But it's for the benefit of existing current council members? Members of the administration and new council members. Council Member Myers. Thank you, Mayor. Kevin, this has been an excellent presentation. In our district, we were looking at the fact that we've got some roads that because we have a limited amount of money, we spot fix them based on what my knowledge is of road repair. And this year we looked and we saw a couple of streets that were really long, and they had bad spots in them, but they were also kind of bad all the way through or most of the way through. And so we asked Kevin a question. Would it be better for the city in terms of long-term return if we didn't do the spot fixing this year and just did these two long streets? And he said yes. And then he began to explain to us why that is and the value of that. Because essentially we were doing almost the same thing as if you repave a whole street and there's a curb cut in it or a cut in it. The damage that it does to the overall length of that street's viability. So I thought it would be great for all the council members to hear that. And today you brought something even newer into the conversation, and that's with the concrete piece. Because actually, if we thought about that, we might have asked you to look at whether we do Sarin Drive as concrete right there. Because there's a gas station on one side and there's Walmart and a lot of other retail on the other side, a lot of heavy truck traffic coming in and out of there. And that's going to beat that street down even quicker. So this is great information. The software that you put together is going to be awesome for us as well. and so I really appreciate this. Absolutely. Thank you. Thank you. Thank you, Mr. Wente. Okay. That's all council members that have signed up, so we appreciate the presentation. Again, Kevin, thanks very much. This allows us to move on to the next presentation, which is on the police and fire pension reform agreement, and it's going to be led by Scott Shapiro and Chris Bartley and Mike Sweeney. And the vice mayor reminded me that the council administrator had passed around an email, I think, at your suggestion, Scott, that you needed a little bit more than the routine 15 minutes today. And she said that she didn't get too much of a pushback, so she was going to offer a motion to give you a little bit more time. Thank you, Mayor. Vice Mayor. Thank you very much. I was going to go ahead and move that we give Mr. Shapiro 30 minutes for his presentation. Thank you very much. All right. There's a motion by Vice Mayor Gordon and a second by Council Member Farmer. Is there any discussion on the motion? All right. Hearing none, then we can take a vote. All in favor, please say aye. Aye. Opposed, no. Motion carries. Thank you, Mayor. Thank you, Council. I am extremely pleased to be here today to talk about the police and fire pension reform agreements. If you had asked, I was just talking with Mike Sweeney, the president of the FOP, about the chances he would have given this agreement, the chance of success back six months ago, he said, hmm, maybe less than 50-50. But today we're pleased to talk about the agreement. Just before I walked in the room, I got a call from Representative Palumbo's office that the bill which had passed the House and Senate today was enrolled in both the House and Senate, so it will be landing on the governor's desk this afternoon. So before I get into the meat of the presentation, I wanted to go over how we got here, the road to reform. Back in October 2011, after the mayor had been elected, he became aware of the enormous challenges that the police and fire pension system faced. He formed a task force. This task force was led by Tim Kelly and Gene Vance, who are here in the audience today. And they did a tremendous job. This was an enormous effort. Over the next year, they kept all the parties at the table. They brought in speakers, made sure that data analysis was done, formed two subcommittees that addressed the issue. Then in June 2012, the mayor asked the task force to form a consensus by the end of the year. He also recommended that the task force hire a pension consultant, which it did, PFM, Public Finance Management. The groups then continued to do their work. A smaller group was formed, and in January 2013, a consensus was reached between the city and the union's pension board representatives. That agreement was then put out to a vote by the active police and fire and retirees as well. It got an enormous response, and 76 percent approved it. And then subsequent to that, the task force unanimously approved the agreement. So here we are. That brings us to March. It did pass the House 96 to 0. It passed the Senate 36 to 1. And again, as I said before, it awaits the governor's signature. So the small group that was formed that hammered out this agreement consists of the folks you can see on this slide. Chris Bartley, the head of the fire union. Detective Larry Kennard, who sits on the pension board. Detective Rob Tarantino, who's the vice president of the FOP. Captain Drew Short, who's a member of the pension board. and Detective Mike Sweeney, who's the president of the FOP, and also Mayor Jim Gray and his staff. Mayor, did you want to say something about the folks? Well, just with punctuation in parenthesis, I guess, you've already said it, Scott, but special thanks to Chris Bartley and Drew Short, Mike Sweeney, Rob San Antonio, Larry Kennard, Tim Kelly and Gene Vance, the chair and co-chairs of the task force. We've got the chiefs here and command staffs. So I think there's a generous and a general thanks to all that have participated in this. Everybody here has used the word compromise a lot, and I expect in my lifetime I don't think I've seen, I can say that I don't think in my lifetime I've seen that word used as well or as effectively. And as Chris Bartley said routinely, that didn't mean that it was all kumbaya all the time by any stretch. There were vigorous points of view that were vigorously engaged throughout it. But at the end, it represented shared compromise and shared contributions and shared achievements. So thanks. Thank you, Mayor. The quote here, which you don't have to read now, but it was hammered out around midnight on January 17th after we had come to an agreement, and it talks about the fund being put on solid ground for the first time in a generation through these common sense reforms. This truly was a team effort, as the mayor said. Some of the folks involved in hammering out the agreement are listed here. I think certainly beyond the mayor and his staff, council members. I can remember last year when we had the budget retreat, and it was the council that made this the number one fiscal priority, which certainly helped in the discussions. The Pension Task Force, Commerce Lexington, Lexington Industrial Foundation donated half of the cost of the consultants. Of course, the folks we've mentioned already, Mike Sweeney, Rob Sarantoni, Larry Kennard, Chris Bartley, Drew Short, PFM's Vijay Kapoor, and our sponsor in the legislature, Representative Palumbo. But really, this was a team effort. When I was thinking through putting together this presentation, I started just listing all the people that had a hand in creating this. I stopped at around 120, and I'm sure there are folks that I forgot to include in this as well. So it really was an enormous effort. So this slide, what I want to do is go through the backbone of the presentation, and then for each line that I give here, I'll have more detail as we go through the presentation. So as we all know, Lexington's police and fire pension system had spiraled out of control. But these two parts of the agreement, pension benefit changes and the guarantee of more money from the city, took the unfunded liability from $296 million down to $161 million, according to the actuary. What that does is it lowers the city's annual payment to an affordable amount, and it enables the city to pay down the liability over the next 30 years with no more bonding. And that makes the funds sustainable and affordable while maintaining a dignified retirement for policemen and firefighters. So this first part, spiraling out of control. When we first started looking at this, this is a downward sloping slide from fiscal stability down to service level insolvency. The state of the police and fire pension system had caused us to be in this sort of middle crowding outfage, illustrated by the $18 million hole that we had in the budget as a result. Pension costs over the last 12 years. This is looking at police and fire pension as well as CERS, who was 7% of our general fund in 2000. in 2012 has risen threefold, 22% of our general fund. So the first part of the agreement, pension benefit changes. I'm going to run through what they mean for new hires, actives, and retirees. So for new hires, we're upping the years of service from 20 to 25, raising the minimum age to draw a pension from 41 years. Well, there's currently no minimum from that to 50 years. The contribution rate will be 12%. Currently, it's 11%. We're lowering the annuity for disability. Ghost time is being eliminated except for military service. And the benefit factor, which had been 2.5, is now 2.25. Cost of living adjustments. So in the current system, the range is 2% to 5%. Under this system, we have a tiered COLA. For new hires, it ranges from 1% up to 2%. And as you'll see with new hires, with actives and retirees, we have a framework for potentially returning to higher COLAs when the funding level, when the fund reaches this 85% funding level. I can talk a little bit more about that, but the idea is that when the fund reaches 85%, the Pension Board can institute this sort of higher range of COLAs, but only if in doing so the fund does not then dip below 85%. For active employees, their employee contribution rises from 11% to 12%. We're establishing a 41-year minimum retirement age. We're working on the disability issue here, reducing the disability pension from 60% of pay down to 50%. And as actives retire, they receive no colas for five years or until age 50, whichever is sooner. As the Pension Board recommended, we are increasing the line of duty death benefit from 60% to 75%. So here with the cost of living adjustments, the range is from zero temporarily up to 2%. I think the framework for this was to make sure that we're protecting those who had the lowest annual pension income. So they have up to $39,999. There's a 2% COLA. $40,000 up to $75,000. there's a 1.5% COLA. $75,000 up to $100,000, there's a 1% COLA. And for those in the $100,000 plus bracket, zero COLA for two and a half years, and then it rises to 1%. Then you also see there's the same framework. Once the fund reaches 85%, the 85% funding level, the Pension Board can reinstitute the COLA, the old COLA, 2% to 5%. But again, only if in doing so, the fund does not dip below that 85%. And the COLA structure is the same for retirees as well. So the other part of the agreement, again, on one side was the pension benefit changes. On the other side is the guarantee of more money from the city. I'm going to take you through that now. So this graph, you can see the blue bar, the debt service. This is the annual debt service on the pension bonds that have already been issued, $10.8 million. On top of that are the cash payments. So if you look at the before column, $11 million is what the city had been paying over the previous few years. That, however, did not reach the annual required contribution that the actuaries said that we needed to contribute to keep the fund healthy. We had covered that $18 million gap right there through the pension bonds. So what we had been paying, traditionally, is around $21.8 million in cash per year. Now, if you think about it, the current KRS, before the governor signed the legislation today, the formula for what the city paid was what's called the normal cost, and then the interest on the unfunded liability. So the statute did not require the city to start paying down the unfunded liability. So our consultant, PFM, said that that was like an interest-only mortgage. So if you think, what would it take for us to start paying down the unfunded liability? Our consultant said you'd have to add another $5 million. And I'm putting that up there to show an apples-to-apples comparison between before and after. So if we were to start paying down under the old system, paying down the unfunded liability, that would be about almost $45 million a year. But after this deal, after this agreement signed into law, that number is going to be $30.8 million, so a savings of $14 million per year. What that requires of the city is an additional $9 million per year. So with that agreement, with the pension benefit changes and the guarantee of more money from the city, what that does is it takes the unfunded liability. When the actuary does its calculations, it takes the unfunded liability, which is what we owe, what the city owes over the next 30 years, from $296 million down to $161 million. Sorry, the unfunded liability is the difference between what we owe over the next 30 years and what's actually in the fund balance right now. So when we started this process, the unfunded liability was $258 million. As we were going through this process, the actuary did another calculation of the unfunded liability, and it came to $296 million. Now, that was largely driven by a change in the expected rate of return. So we have about half a billion dollars in this fund. And it's expected that that would return, part of this change, 8%. What we did was change that from 8% down to 7.5%, which is more realistic. that helped bump the unfunded liability up to $296 million. So thinking about how we got here, how did we get this enormous, nearly $300 million unfunded liability? And according to our consultants, it was passed underfunding by the city. Investment losses, the 2008 market crash, where the fund lost about more than 25% of its value. Retirees living longer, planned benefit changes, wage increases beyond the growth assumptions, COLAs granted despite the underfunding, and COLAs only partially funded, and then, as I said, lowering the assumed rate of return from 8% to 7.5%. Now, disabilities, as our consultant said, were not an enormous cost driver. So this is the trajectory, the red line before the agreement is put into effect. And when the governor signs the bill, the unfunded liability immediately drops from $296 million down to $161 million. And as I said before, we were paying as if it were an interest-only mortgage. We were never going to pay off the unfunded liability. Under this new arrangement, we are going to be paying off the unfunded liability so that it reaches zero in 30 years. Prior to the bill being signed, the funding level was at 64%. after the bill is signed, that will go down to 77%. I wanted to give you a bit of a comparison with KERS and CERS. So KERS is now at 30% funded, and CERS is at 60% funded. so with that drop in the unfunded liability that lowers the city's annual payments to an affordable amount enabling the city to pay down the liability over the next 30 years and here's what that looks like historically this starts at 2000 where the annual payment was about $7 million that had quadrupled. So in 2012, the blue bars are the annual required contribution, and on top of that is the debt service. And so you can see the trajectory there, and you can see where the change happens. We were brought to $20 million a year to pay into the pension fund, and then the red bars being the $10.8 million for most of those years for the debt service. So again, this was an interest-only payment, whereas here we're actually paying down both the principal and the interest on the unfunded liability. There was a choice that we were given by the consultants of two methods of trying to pay down the unfunded liability. One was actually slightly cheaper in the early years. And we decided not to go with that and to go with the more conservative level dollar method, which more aggressively attacks the unfunded liability. The great thing about this, again, with the level dollar method, is that it gives the council more predictability with budgeting. So this is the city's commitment in KRS that LFUCG must pay at least $20 million per year to the police and fire pension. We wanted to make sure that that was written into KRS to make sure that each and every year the city makes these payments, that we can bring the pension system under control. So as part of this agreement, this year we had budgeted a $34 million bond. With this agreement, we don't have to issue that bond. Bill O'Mara, our budget director, had a recent conversation with the ratings agencies who looked very favorably upon this arrangement, which was good news. So at the end of the day, this makes the funds sustainable and affordable, maintaining a dignified and guaranteed retirement for policemen and firefighters, which is one of the criteria that the mayor set when we started out with the negotiations. So there are some things that we still need to think about in terms of the pension. One thing is the market risk. So this system is, as with any defined benefit plan, there is market risk that's borne solely by the employer. So we have an assumed rate of return of 7.5%. If the market overperforms, then our fund will be healthier than we anticipate. If it underperforms, that's the risk that we bear, as any organization as a divine benefit program bears. I took a look at the last 17.5 years, which is the number of years for which we have records. The actuary looked at the rate of return, and it's been, over that period of time, 8.125%. But as we all know, past performance does not guarantee future results. And that's something I think we all need to stay on top of, is the rate of return. As part of this level dollar method of paying off the unfunded liability, losses and gains are smoothed over the rest of the amortization period. So as we get closer and closer to that 30 years, that may get more volatile. Another thing we should be aware of, and something that I'm sure we're going to be reading about over the coming years, are GASB rule changes around the reporting around pensions. What GASB is recommending is getting rid of smoothing and applying a more blended rate to the rate of return calculation. The disability issue. We think we improved it with this agreement, but more work needs to be done with that, and that's something that the small group has committed to working on over the next year. Something else that we've agreed to work on over the next year are vesting options. We all are in agreement in general that vesting options should be added to the plan. So I tried to, Vice Mayor, I tried to race through that to leave room for questions. but before that I'd love to invite Chris Bartley and Mike Sweeney up to say a few words about the agreement. Chris, Mike. Thanks, Scott. Mr. Mayor, Council, So the first thing I want to say is bigger is not always better. Obviously, when we started this in October with this large group, it took about a year to figure out that we weren't getting anywhere. And under the advisement of our consultant group, we met a much smaller group of us, six or eight. And having been in three contract negotiations, I can tell you that it works much better that way. It took a few days until midnight one night to finally come to a consensus along with Chris and Drew and Rob and Scott and Jamie and myself, and we did it. And I can't thank these guys enough. Chris said it when it was shared sacrifice among everybody. I can tell you that when I initially spoke I told Scott that originally I thought this thing probably had less than a 50-50 shot of going off the ground when I spoke with our members out there and after hearing some of the horror stories about defined contribution plans and hybrid plans we gave our members the option and they went with the option, which was to vote for what they did, for what we gave them and what we came up with. Define contribution plans or define benefit plans. There's a huge difference in those, and a hybrid plan certainly is not the way anybody wants to go. I can't commend everybody enough for what we've come up with. As Vijay Kapoor said, he's done this all over the country, and he has not seen a group, a city, and a group get together like we have and like we did, the city of Lexington and the unions get together to come up with this. And I think Rob even heard up at the Capitol that some of the legislators up there said they wish, you know, the state heads up there could come up with the same thing. And when we met up there and we met and we got this off the ground, this was just a part of it. But this is just Rob and Chris and the rest of our legislators. It took a lot of walking the halls in Frankfort, a lot of knocking on doors, the offices of the legislators, the senators, and the representatives. And I can't commend Rob and Chris and also Bill Brislin and Brandon Moracek on our legislative team for getting this taken care of in Frankfort. because you still had to convince the powers that be of the state legislature that what we did is the right thing to do. And it took, as I said, a lot of walk in the halls on these guys, and I want to commend them for what they did. And I want to commend the council and everybody else here. I think we broke some ground here, and hopefully we'll get this thing funded in the next several years. Thank you. Thanks, Mike. Chris? First of all, I just wanted to thank the mayor and Scott and Jamie for working with us. And Mike is right. Just coming up with the plan itself was a hard part, but sometimes the harder part was going up to Frankfurt to discuss it with the legislators and getting it passed there. And I wanted to thank Judy Taylor, who's the lobbyist for the city. We all worked each room pretty much together, me, Rob, and her. and she's pretty much protecting us. You know, she's a small woman if you've seen her. The compromise, it hurt some retirees. Obviously, it hurt some of our currents, and again, we've sacrificed again. And the compromise for this pension came out of necessity to protect our pension and our retirement and our future. our firefighters and police officers have earned and paid large sums of their own money over these years into the fund and this reveal that just passed provides a defined benefit and a dignified retirement since we do not get social security that is a misnomer out there we do not get social security so we do have to have a defined benefit that is you know that is what we need so it is protecting that and it does protect some type of cost of living raise for the retirees. Sad to say that the rest of the state is still in a fight over those issues and I'm glad that ours is solved. And again it's being able to sit down and talk over a very complicated issue that takes years and months and hours and committees and subcommittees and to the point to where I wish that there was a mayor that left some type of alcoholic beverage on the 12th floor, sometimes at midnight. So, anyways, again, I want to thank everybody. Although it's tough on our members, I do think it's the best for this plan and this city and the citizens of Fayette County. So, thank you. Thanks, Chris. All right. So, the floor is available for questions and comments. Council Member Stennett. Thank you, Mayor. I just want to start off by thanking everyone involved in the process. It goes back even on well beyond 2011 to past councils, past mayors. And we can all even probably say it started in 1974 when it opened unfunded back then. So I appreciate the effort, Mayor, that you've made a commitment to the council and to the city to get this solved, to the unions, but more importantly to the police and firemen and women that have to live through this, their families too, to live through the sacrifices, because it is a big sacrifice that you all have made. We've made a lot of movement, and this is a step in the right forward. right direction moving forward. I just pray and hope that we don't end up in this situation again in two years, 10 years, or 30 years down the road. I want to make sure whatever power this council has to do, whatever we have to do as a community to make sure this is solid and cannot be changed by future mayors and future councils, because I think all the hard work would be undone, would be a tragedy to this community. So thank you, Scott, for this presentation today and your help and work on this. I appreciate that, too, and the opportunity to sit down with you and make sure that this is a good day for Lexington, and it is. There was one slide in here. I guess I don't know if it came late or there was a change to it, but on the more money from LFUCG, I'm trying to understand the math in terms of what our before and after contributions are. Because the last time we met from the pension consultant, and it's on page 17 of the presentation, this year in the budget, and Mr. O'Meara, correct me if I'm wrong, We budgeted $16.2 million in cash to go to the pension and $2.3 million in cash to pay a bond payment. So that's $18.5 million we have budgeted this year. So next year's budget will have to be $20 million according to the agreement. So that's a difference of $1.5 million. So how do we get the $9 million cash difference? So this is not a particular year here. This is before and after. Historically, the last few years, we had been putting in $11 million. So what I was trying to do here is show sort of a before and after the agreement, but not tied to a specific year. Okay, because I was worried. I know I asked the mayor the question during the task force, our last meeting, where are we going to get $9 million? But I think it's more we have to come up with $1.5 million if we're going budget to budget. That's exactly right. I just wanted to make sure I wasn't missing it. So this year, historically, we had been putting in $11 million in cash. This year, we had budgeted $16 million. to put into the fund. We also took a look at we had put in the budget a $34 million bond, issuing a $34 million bond this year. The debt service on that is $2.8 million. So if you add that up, that gets to $18.8 million. And so we're going above that. So we're going to have to find the $1.2 million. Right, okay. And then on the bond, Would there have to be a budget amendment to take the bond out of the budget? I can't answer that question. If it was passed by ordinance in the budget? I'll have to get back to that. I know we had this, and I can pull up the tape from last May because we had this same discussion. I want to make sure, do we have to do an ordinance to take the bond out of the budget since Council passed it in the budget? I'll get back to that. Yeah, if you can, just to make sure what our semantics are going for. Because I assume that's the intention at this point is to take it out of the budget. That's right. And will that extra bond payment go towards the pension? We're in talks about that right now. Okay. Very good. Thank you, Mayor. Thank you, Council Member Sinek. Vice Mayor Gordon. Thank you, Mayor. Thank you very much, Scott, for your presentation. And I also appreciate all the hard work that Chris Bartley and Mike Sweeney and all the folks on your small group did with the consultant, as well as all the other folks before. And I was happy that Detective Sweeney and Captain Bartley both mentioned the defined benefit. That was going to be one of my questions about whether that had been discussed with the consultant in the small group negotiations because that was one of the things that our task force talked about at some length was either a hybrid or something different from a defined benefit. And so I appreciated that you all mentioned that. And it does make sense in the context of no Social Security to have the defined benefit. I think, Chris, you had mentioned that. I think also in combination of due to our work and our job title and what we do, We also don't work until our 60s or 70s. I don't think you want 60, 70-year-old firefighters or police officers out there running around or climbing ladders. So typically across the country, the average age of retirement should be about 55, 50 to 55. And so you have to have that gap in between what normally would be Social Security at age 65 now, probably 70 or whatever now, to our job. So that's the reason why we were more able to have a defined benefit. And I think that PFM even stated the same thing, that we needed to have a defined benefit. I appreciate that you both brought that up. Because this is going to be in state statute, I mean, to respond to Council Member Stenet's expressed concern about future councils, I mean, my thinking on it would be that a future council has to comply with this, correct? Because it will be state statute. That's right. This had been governed. As most folks know, this is really the only pension system that is governed by state statute but is paid by a city. So this does compel the city to pay a minimum of $20 million a year. one of the guiding principles for the negotiating group was this idea of certainty. In the past, there have been years when the city did not meet its annual required contribution. And on the city's part, there was wild uncertainty as we saw these costs go up and up each year. So what we wanted to do was to provide certainty all around. So a lower affordable payment that stayed the same for the city and for the beneficiaries of the pension system, knowing that it would be funded each year. If there was, just quickly, a council that, I mean, projecting out, if there is a rough patch revenue-wise and a council says we're not going to fund it at that level, What would be the recourse? In the past when that's happened, there's been a lawsuit. I think that when you have, again, when any organization has a defined benefit plan, they have to be aware of the market risks. Here, the way we're looking at this with the level dollar method of paying this off, those ups and downs are smooth over the amortization period. So, for example, that 8.125% that I figure that I gave you, which was the past 17.5 years, which we have records, that doesn't include last year, which was 11% return. The year before that, it was 1%. So it does vary, the rate of return, but what we do is smooth that out over time. And that leads right to my last question, and you heard me ask it at the task force meeting. I felt like the 7.5% was a very optimistic rate of return. So my question is, can this rate of return be reset, reviewed and reset, and at what point could that be done? I mean, if we're not getting even close to that rate of return, when can it be reviewed and when can it be reset? It can be reviewed by the pension board, and my guess is they would want to do that with the guidance of an actuary. but I would say that you would not want to be overly exuberant one year when you have an 11% return or overly pessimistic as we perhaps were the year before when we had a 1% return. These and the way actuaries work, as we all know, they're looking out over decades and I would suggest that we'd want that longer term view. Thank you very much. Thank you, Mayor. Thank you. Thanks, Mayor. Council Member Kaye. Thank you, Mayor. And thank you, Scott, for this presentation, which I presume will be placed online. For someone like me who is not the best at budget and finance, it was very clear. It was very helpful. I think it answers the questions that many people have about what has happened and what the impact is. So I presume it will be made widely available. I hope people watching, other citizens, will take advantage of the opportunity to look at this presentation, the slide presentation, so they can understand exactly what we have done. And from my perspective, what we have had virtually nothing to do with it, except to watch the process, but what this government has done together is really extraordinary. And I hope people do understand that. If they have been watching and listening, I think they should understand that. that in this instance, what we all show, what government showed, is that we can act responsibly and we can make decisions about present funding to save future cost. And that's something we have not done. This government, other governments have not done very well. We need to be, I think, more responsible going forward. But this is a great example of doing the hard work, making the hard decisions, and kind of owning up to the fact that we have to pay for what we get and not postponing these costs for future generations. So my congratulations and my thanks to all who have been involved in that. Thank you, Mayor. Thank you, Councillor. Can I respond to that? Two quick things. On the lexianky.gov homepage, on the bottom right, there's a button that says pension agreement. There's already a bunch of the presentations uploaded there, including video from the last Pension Task Force meeting. And they're the two presentations that PFM give. We'll put this one up as well. But to your point about sort of what this means, PFM was very, very clear that they do this work all over the country. Their work is on an uptick now. I think they're going to be spending a lot of time in California, would be my guess, over the next five years. And they did say that this kind of agreement is not something that they've seen anywhere else. I think it comes from a mayor that had the resolve to tackle this. There are opportunities, I will be honest, there were opportunities where ideas came forth where we could, the can could be kicked down the road. There were short-term fixes that were suggested, and this mayor, I know I work for this mayor, but I will say objectively this mayor did not want to do that and wanted to make sure it was tackled. And then sort of paired with that were these extraordinary public servants, the folks who we sat across the table from who wanted to make sure that this system was fixed for the long term for the folks that they represent. Council Member Beard. Thank you, Mayor. I, too, it's probably going to get boring by the time all of us have an opportunity to throw kudos to everybody on both sides of this, including, of course, Chris and Rob and Mike. It's something I feared would not happen. It looked like we were in a deadlock and we weren't going to be able to work our way out of it. So you all are to be commended for doing that. My concern kind of mirrors what the Vice Mayor said concerning the rate of return. I guess I just did a little math, and 1996 was 17 and a half years ago. and why we don't have records past 1996 is ridiculous. And I would really like to see somebody dig into that a little bit. 1996 was not that long ago. And your example of 1% last year and what, 11% this year? 11% last year, 1% the year before. The year before, okay. Well, even if you were to take those two numbers and smooth them out, it's 6.5%. It's not 7.5%. So, again, I'm concerned, and I'm concerned if they're coming anywhere close to that, that they're in risky territory as far as, because, you know, CDs are at 1% right now. U.S. governments, some maybe at 3% or so or less. And, you know, I think we really need to look at that again and make sure that we have some realism in what we're doing as far as that's concerned. Other than that, though, we're here and we're quite happy, I think, the council's happy and i think i'm sure you all are happy and i hope that police and fire are happy so thank you very much scott and thank you mayor thank you council member beard council member scutchfield thank you mayor um one of the things when i decided to run for city council most of the people i talked to one said you need to go clean up the pension reform of course i think what about two weeks after i took office so i want to commend you all for doing something that quickly. No. But seriously, when you take a look at this, how much everybody worked together, it didn't get played out in the newspaper, you know, people fighting, infighting. Everybody worked together. And I mean, I'm looking at everybody out there. You came to an agreement. Some of you might not be super happy with the result, but at end of the day you all thought about the city and you thought about making sure that the benefits continue. And I just I'm in awe of you all getting it done the way you did and I'm proud to be here. Thank you, Council Member Scushfield. Council Member Massadi. Thank you, Mayor. And thank you, Chris. And thank you, Mike. And to all those who participated in this process, I know the job of the first responder is the most difficult job that one will face, and I commend you because I just know what you do every day. I also had some concerns that Vice Mayor Gorton and Council Member Beard brought up about some of these rate of return, but I know it's amortized over a long period of time, so I won't go into that. I guess my only last question would be is about the disability. I know that's still a concern. In fact, there was an article in the paper about disability today with an officer trying to reapply for that. How are you going to go forward with that? Have you decided on any kind of avenue? Again, to the extent we could in the pension system, we tackled that by lowering it from 60% to 50%. But that is something that we've talked about discussing over the next year, along with the vesting option. There's going to be some reform in that. I assume, or some kind of a consensus when it comes to that? That's right. I think we've formed a good basis for talks over the past six months. Discussion, and you're going to move forward with that. I'm optimistic. Again, thanks for all your help, and thank you as well. Thank you, Council Member. Thank you, Council Member Sidi. Council Member Ford. Thank you, Mayor, and thank you, Scott. I do want to echo the congratulations for all the hard work for all the parties going in. And, Mayor, I've told you offline, but I want to publicly thank you for your leadership on this. Before I get into my question and comment, I do want to, certainly as all of us around the horseshoe, extend our commitment to the sworn officers and their pension fund. It hasn't gone well in years past, but going forward, but we hope to be able to financially demonstrate our resolve to meet these obligations. Conditions change, agreements as a result often have to be revisited. And there are probably folks at home wondering why it is that the General Assembly played a part in this, why we had to get their help. And I have a similar question. I was in Frankfurt last Wednesday to spend a little time down there, primarily in support for the voting rights issue. And I pull into the parking lot, and lo and behold, right next to me pulls up Mayor Gray and Scott and Jamie and going to the Senate committee hearing, which basically gave you the final blessing needed to get this passed. And the mayor and the sworn leaders represented us very well. But as the urban county government celebrates its 40th anniversary come this new year, forthcoming, why is it that our system is governed locally? I mean, we're governed locally, excuse me, we're governed by state statute, but we're funded locally. One of the things one of the senators mentioned in the committee, while he had some reservation about the defined benefit, and I'm real glad that he didn't allow his philosophical beliefs to keep us from this success where we are today, But he did mention that hopefully going forward that simply Lexington locally may have more control over needed changes, if any, are to occur. So with all that said, would you attempt to explain the dynamic of the relationship between our pension fund, our local efforts, and the General Assembly from Pipeville to Purdue and all points in between? Sure. I'd say two things. One, in terms of why it happened, I think memories are foggy, but it had something to do with the two different police departments during merger. That's why it's up at the – governed by KRS. I think what we have here is not very different from what we would have if we had local control. This was an agreement that came through compromise, everyone at the table advocating for their constituents and hammering out a deal. We were forced to do that because we were told that to get this passed in Frankfurt, all the parties need to come together. and instead of fighting up in Frankfurt, come together and come to a compromise, and that's what we did. So I'm not sure that we would have a very different agreement if we did have local control. Well, not to diminish the good thing that we have here now, I just raised that as a concern, and I may want to explore it a little bit more going into the future. But, again, I'll just conclude that I'm glad that all parties here in Lexington Fayette were able to reach a deal. And I don't think we need to take it lightly that this bill, House Bill 430, I believe it is, was able to be one of the few bills to date that will be signed into law by the governor. So, again, congratulations all around. Thank you, Scott. Thank you, Council Member Ford. Council Member Henson, then Council Member Farmer. Thank you, Mayor. Scott, thank you for the presentation, and thanks to everyone for all the work that went into this. I think Lexington reached a milestone. I feel that we should be very proud as a city for all the work and cooperation that has gone into this, and very grateful to the mayor for bringing this. and, you know, I guess having everyone realize the seriousness that it was causing to Lexington. And going forward, I would really like to see something put in place to where, you know, this is maintained, that we don't slide on this, and I'm not sure what that would be, but I really see that as being a big part of it with future councils and administrations. But thank you. Thanks to all of you. Thank you, Council Member Henson. Council Member Farmer. Thank you, Mayor. Scott, thank you for your presentation and all of your all's work. I appreciate the roll call of 120 that you put in there and certainly all the families and service members were affected by all this, and the council gushes over and I shout too. We're lucky enough to live in a community that was wise enough, our predecessors were wise enough to combine our city and county governments and make Lexington a more special place. And after that, we were lucky enough to live in a place that was forward-thinking enough to protect the rural service area and have an urban service boundary and a part of the county that is the city and our heritage protected in Ed Lane's 12th district. And now we're here at another very special time where Lexington has found its own voice among so many municipalities in need and indeed our state in need. and we have a leadership experience and leadership opportunity to show for it. So it is a special day, and it's like turning loose of an old friend. This has been around us for a while, and it'll be nice not to have to worry about some things because, as you made mention of our time at the retreat last year, this was our number one priority, And this was, I think many of us placed it there because in our minds it was. But I didn't think we had the ability to cover as many bases as needed to be covered to get us there. So this is a great accomplishment for all involved, and I appreciate the role you played. And Mary, you've been complimented already, and it's worthy of noting that somewhere in the world today they're trying to pick a pope. and here we've had a miracle. So thank you, Mayor. I think it was Mark Twain that said something about too much of anything. Too much praise is very dangerous. So we all recognize that. I know to express thanks appropriately. Thank you very much, and thanks to everybody. But truly, just like Scott said, this came together because there was a lot of recognition of problem. And problem solving is about people getting around the table and recognizing that we've got to do something. And I think that's really what occurred here. But in many respects, you know, if we look back over the last several years, the really tough conversations that we had in these council chambers, the tough conversations we have in campaigns, the tough conversations that we have in coming to a point where, you know, everyone pretty much recognizes that change is imminent and something must be done. And that's what really occurred. And for that, I think, as you said, Council Member Farmer, we're blessed to live in a place like this, like Lexington, where people are still able to do that. And that itself is often remarkable. I will say that in terms of the points that Council Member Ford made, I came to recognize myself a little bit. you know, when we first see an issue, sometimes we see it through a lens that then over time it may change. And I think the paradox of the structure that we are within today here in Lexington, the paradox of it is that we, as a result of our having the responsibility to fund and to manage the pension ourselves, we really in some respects were very much more aware of our condition than perhaps the rest of the communities in the state are, or Kentucky itself is, because it was right in front of us, and we were seeing the numbers routinely and regularly. So this debate, often vigorous debate, was occurring. And so in some respects, Council Member Ford, I came to see that there may be benefits actually to the Byzantine, in a sense, the Byzantine accountability that we have both to ourselves and to the state. I know that sounds really strange, but as we probably have a conversation going forward, that would be a point of view that I would share because of having been here where we have been. Thank you, Mayor. Like my colleagues, I want to thank everybody who spent a lot of time working on this issue, which was, as Scott said, the Council talked about in our retreat last year that this was our number one issue that we wanted to resolve. I'm glad that we've made great headways in it. One of the questions I want to talk about is what Council Member Mazzotti talked about, was the disabilities. And then the slide that you had on unfunded liability on page 52, it said, and a little asterisk, disabilities were not among the major cost drives. And then later on page 62, you said that's an issue improved we need to work on. We had a member of the pension board come down here and speak to us and say that this is actually an issue that the council themselves can take care of. Is that a true statement? and is this something that the KRS defines or is it something that we have local control that we can look at? And where you said more work needs to be done, where are you headed? And I guess I may ask Mr. Kelly also, since he chaired this, if he'd like to give some input on this too. But I'd like to know, because I've heard that, is this something that we can address or is this something that you're all going to address and bring to us? Or who kind of has a final say on that? because we've heard different times about the discrepancy between what the state disability percentage-wise and what we have. And I'd just like to see how we're going to address this issue. What I would say is that there are many things that factor into the disability issue. I think what we did is we, to the extent that the levers with the pension system affect disabilities, we were able to improve that. But there are other levers that need to be, that could and should move relating to the disability issue, and that's what we're going to be exploring over the next year. Boy, I didn't understand a thing you just said there. I really... Okay, let me try this again. So the factors involved with someone choosing to go on a disability or not, or a physician making the decision that someone is disabled, are multifaceted. So there's a lot of reasons why the disability system is not the way we want it to be. It's not simply because of what's written in KRS or the administrative thing or the way the department is structured, for example. There's a range of things that impact the level of disability. So it's a very complicated issue, but it's something that we're committed to addressing over the next year. And to answer the question I asked, do we have local control of this or is this state, or is it a kind of hybrid of both? There are many things that we can do on the local level that would impact the disability issue. Okay, and I guess you're going to keep the committee together to continue on this issue then? We have all agreed to look at this issue along with the vesting issue over the next year. And could you go just a little on what you mean when you're talking about the vesting and what options you're looking at then? Sure, and this is one example of what I was talking about, the various factors that can influence the disability rate. So right now, the way the old CARA statute and the new statute reads, there's no sort of interim vesting option. You have to stay in the role for 20 years or now with new hires for 25 years in order to recoup the employer contribution part of the pension and the rate of return that was achieved based on what's been contributed to the pension. So if you have a five-year vesting option, for example, or a ten-year vesting option, that allows you to take your pension at that time period, take that, and leave if you so wish. Okay. Thank you very much. Thank you, Council Member Ellinger. Council Member Lawless. Just very quickly, I want to say that when we talk about several mentions have been made about which side of the table you're sitting on, and I think one of the things that makes Lexington so very, very special is that we aren't on opposite sides of the table, that we're all in this together, and I want to thank everybody. And I think it's appropriate, as Councilmember Farmer brought up the papal issue, that when the governor signs this that we have our firefighters send up some white smoke. Thank you, and thanks to everybody. Councilmember Light. I didn't mean to be the cleanup guy here, but I may be the last speaker. I just wanted to say that the pension and health insurance benefits plan that we have has been a serious financial liability for Lexington for a number of years. And without making these changes, I think it would have been a serious future economic liability for our city and our reputation might have been at rest. But I believe we've made a significant headway in fixing this important obligation for our employees. And I just want to thank all the individuals that we've congratulated a lot of people today. I just want to reiterate thank you to all the individuals who worked on this project. Thank you, Mayor. Thank you, Ms. Langley. Council Member Stennett, up for this for Council Report. Just briefly, do we know what the logistics are of the governor signing this legislation? Like when he might do it, where, can we help him hold the pen? I've been told it might be today. Well, I think soon. Behind you. It could be today. The official signature could be today. But we will have a bill signing ceremony and invite each and every one of you. And it more than likely will happen in Lexington. So it will be close. I think every one of his 120-plus should be there because you all did the heavy lifting. Thank you. Thank you, Mayor. Thank you, Councilman Farmer. Councilman Stenet. Thank you, Mayor. Councilman Lane reminded me of a couple of issues that we still have to address that were not on there, one being the health insurance. But the other issue, Scott, have you all talked about, I think we need to add to our list to-dos is the investment policy of how the fund itself is being managed. I think the investment of manager needs to be rebidded out every so often because you can get stale in that management process. You may even look at adding more than one manager in there to keep a balance because, as my colleagues have alluded to, averaging 7.5% return is going to be very difficult. Even though we've done it the last 17 years, being in the investment world, but I know it could all change tomorrow. So can we add that to our shopping list? Because right now we're invested in mutual funds where today there are other things we may want to be invested in. And with different money managers, they recommend different things. So it may be an opportunity to have a team approach while keeping our expenses for that very low. So I think that should be brought to the attention of the Pension Board and have a real discussion on that issue because it's going to play a major role into the returns of this fund. I agree. I agree. And I'm glad the comments were said about the defined contribution versus defined benefit. However, I will stick up for defined contribution. Any day of the week, I will take that over to defined benefit. If you fund it out of your own paycheck correctly and can take the risk, you will come out ahead. And I firmly believe that versus the defined benefit. The hybrid, I agree, it would be worse for all of us to sit there and do a hybrid plan. You'd think record-keeping is bad now. It would be even tougher going forward if we did a hybrid plan. So thank you for everyone. Thank you, Mayor. There are two other folks I'd love to invite up to make quick points if we're not overrun on time. Chief Bastin. Chief Bastin, when we were coming up with the new hire plan, that was something that we took very seriously. We wanted to make sure that the city remained competitive. And Chief Bastin let me know his thoughts on the new hire plan. I thought I'd ask him to come share those with you. One thing I was concerned with from the beginning was that the folks who had not been hired yet could stand the most to lose. It was easy to cut for the folks that weren't here yet, and I was afraid that that might be done and leave us in an uncompetitive environment in trying to attract good quality candidates into the police and fire service. But I have to say, what we have is going to keep us very competitive. I feel like in the future. So I'm pleased that the folks who hammered this agreement out had the wisdom to take that under consideration because it's a very important point. I want to ask Tim Kelly, chair of the task force, to come up and say a few words. Thanks, Scott. In the interest of time, I'll be very brief. I just want to express my appreciation to my co-chair, Gene Vance, who had to leave and go off to another meeting to all the members of the task force, especially those on the council, both current and former, who participated, and to the union negotiators, union representatives, and particularly a couple of members of the forces who showed up for everything except when they were otherwise occupied with official duties, and that's Drew Short and Larry Kennard. They were just yeomen in this, and I really appreciate their continued participation throughout. The task force, as much as anything, we operated for 15 months. We tried to keep all the parties together at the table, all the parties speaking. Sometimes it was easier than other times, but mainly just to keep, for want of a better term, the ball on the fairway. And I believe we did that. We accomplished it. We heard from a lot of people who had expertise and involvement in this pension plan. And, you know, I just appreciated the opportunity from the mayor to chair this. It wasn't something I was looking to do in retirement, but it was certainly an education to see how the government works from the other side. So anyway, thank you all, and thank you, Scott, for all you did to get us to where we are today. Any questions of me? Any questions or comments from Mr. Kelly? Thank you so much, Tim. Okay, sure. Thanks. Thanks, Scott. All right. That's it for me. All right. If there are not any more questions. I think no other comments or no council members have signed on to speak, so I think we thank you very much, and we all thank everyone in this room very much and those beyond this room who everyone in this room is representing. Thank you all. Thanks. I think it may deserve a clap. And this allows us to move on to council reports, and I'm going to ask Vice Mayor Gordon if she will take the gavel and the chair for council reports in the remainder of the meeting. Thank you so much. Okay. Thank you, Mayor. If you have a council report, please log on. Council Member Massadi. Thank you, Vice Mayor. I just want to make a quick announcement. The Robin Wood neighborhood is having their annual association meeting this Monday, March 18th, at the Southern Heights Baptist Church. I believe police and fire will be there. And I welcome you all to join us as well. Thank you. Thank you. Council Member Henson. Thank you, Vice Mayor. I would like to announce a neighborhood meeting. It's a public meeting regarding Garden Springs Park that will take place this coming Thursday at 630 in the Garden Springs Elementary School Library. and then on Monday the 18th there is a Mitchell Avenue Neighborhood Association meeting, Vice Mayor I believe you're going to attend, and Commissioner Mills. We will have some discussion about the Senior Center. And that will be at the Rosemont Baptist Church in the basement. And then on Tuesday, the 19th, is the Pickett Home Neighborhood Meeting at 6.30 that takes place at SCAPA. So thank you, Vice Mayor. You're welcome. Council Member Akers. Thank you, Vice Mayor. I wanted to announce that tonight the Meadowthorpe Neighborhood Association will be meeting at 6.30 p.m. at the Community Center on Larch Lane. Tomorrow afternoon from 1.30 to 3, the West End Community Partners will be meeting at Booker T. Washington Intermediate School, located at 475 Price Road. And then this weekend, I just wanted to encourage everyone to come downtown and celebrate St. Patrick's Day on Saturday morning, beginning with the Shamrock Shuffle at 8, which I will be participating in, the Blessing of the Keg at 11 a.m., and then the Parade at 1 p.m. Thank you. You're welcome. Council Member Farmer. Thank you, Vice Mayor. I know that all the council members received these cute little packages today, which is from the new restaurant opening in the 5th District that is Coba Kachina. And I have not had the chance to unwind mine or defuse it, either one. But there it is. This invites, I guess, us to dinner some night soon? Saturday night. Saturday night. And they will be opening, I think, at the very beginning of the week. Then I needed to take a time, council time, to once again have the opportunity to use the term big-ass fan in public. Over the weekend, if you look up, what was three old fans is now three new fans that have been placed here. The fans in the council chamber are the most efficient, the quietest, and the most sustainable fans created by big-ass fans. These haiku fans are airfoils made of Moscow bamboo, a fast-growing renewable resource with the tensile strength of steel. Mossel bamboo is a sustainable product that can be harvested every 5 to 10 years, making it a highly renewable resource as opposed to other woods that are harvested every 20 to 30 years. Briefly, the typical residential ceiling fan requires 90 to 110 watts of electrical power. These take between 2 and 30 watts, actually underneath the Energy Star rating. So for something that was made right here in Lexington and adorns the airport and the Fifth Third Pavilion, we are glad to have their donation of these two fine fans for our chambers. Thank you, big-ass fans. Thank you, ma'am. Thank you, Mr. Farmer. Anyone else have a report? Okay. We'll move right on. There's no mayor's report. Is there any public comment? No public comment. Do I hear a motion to adjourn? All right. All those in favor, say aye. Anybody opposed? We are adjourned. Thank you very much.