Music Thank you. Thank you. Thank you. Thank you. Thank you. It is April 25, 2013, and this is a committee of the whole for the fiscal year 14 budget. And so today the council will look at revenue, debt, capital, and we'll hear from our finance and budgeting folks. and so I will ask who's Melissa Luker? You're our acting budget director and you're going to give the presentation? I'm going to get us started and then I'm going to close it out with the final piece. Okay, very good. Thank you so much. We'll just get right into it here. There we go. I can never remember which one slides forward. What we're going to do this afternoon is we're going to talk about the revenue, the debt, and the capital. And how we're going to do it is I'm going to start us off with an introduction, and then we're going to have Dr. Chris Bollinger, who's the executive director of the Center for Business and Economic Research at UK. He's going to talk about the process that he went through with us on revenue, and then Bill O'Mara will talk about the mayor's proposed budget revenue in a little more detail. Then I will pick it back up and talk about the current debt structure, the proposed bonding that's in the mayor's proposed budget, some capital reallocation that we've done again this year, and operating capital. Now, the presentation is very long. There's a lot of detail there, but a lot of it is detail for you all and not something that we'll get into today. It's just so you have that information. So don't think that we're going to be going through word by word on all 51 slides or whatever it is. So we'll hit the high points and the overviews, and hopefully can answer any questions that you all have. Okay, sounds like a plan. I also wanted just quickly to say, particularly for new council members, Eventually, we will want to have in this whole budget process a motion to accept a revenue number, but it won't be sooner. It will be later because you all will be giving us a very late, as late as possible, revenue estimate. So at some point, we'll need to accept a revenue number for the budget. Well, I'll turn it over to Kristen. Okay, thank you. Welcome. Thanks, Melissa, and thank you, Linda, for welcoming me and the rest of the council. I appreciate your time this afternoon. I recognize that we're all busy. We were asked by the revenue office to help them with a revenue forecast for your budget. Revenue has six major components, occupational tax, net profit tax, insurance, franchise fees, property tax, and a whole bunch of other stuff, the details of which are difficult to get into and complicated. Occupational tax and net profits tax are two of the biggest components and together make up a large proportion of your total revenues. They're also the highest variation. Insurance, franchise fees, property tax actually are relatively stable through the years and are relatively easy to forecast. So we were asked to focus on the occupational tax and the net profits tax and we thought that was also a smart thing to focus on. Predicting these days is difficult, and I kind of want to put that out there. This is an index that was put together by Baker, Bloom, and Davis at the University of Chicago, so I'm not claiming credit for it, but what it is is it's an index of economic uncertainty. So you can see through the 80s and 90s, it's kind of chugging along, and here's today, and that index has gone up dramatically over the last few years, and it has to do with a lot of different things, including policy uncertainty as well as just economic uncertainty, things in Europe. It is a difficult time to forecast anything. So that's my disclaimer. Components of prediction. We've got two things we're predicting, the occupational tax. The main things that go into the occupational tax really is total earnings in Fayette County, but of course that closely tracks employment. The net profits tax is a little bit more difficult to measure. Profits in general are difficult to measure because they're more of an accounting concept than an economic concept. And we think production tracks that pretty well, gross domestic product, but we also think it's related to employment. And so I'm going to talk a little bit about trends in employment, earnings, and output in Lexington and in the U.S. over the last few years. So here's employment in the Lexington MSA, and I think the good news is we're really starting to see an employment recovery here. You can see this is 2009. We all know what happened there. It began to recover through 2010 and 2011, and as we hit 2012, we're really starting to see rapid employment growth here, and that's good news. We're beginning really to see a serious recovery in employment in the Lexington MSA. And here's earnings in the Lexington MSA. And so again, you can see here's earnings in Lexington. And so you can see here we had our decline in 2009, but they've come back and they're beginning to track back up again. And this fits very closely to what's going on overall in the U.S. economy. The Lexington Fayette occupation tax really depends on earnings. And so you can see a lot of the same features in that as we saw a general upward trend. Here's the 2009 recession. Rather than dropping overall tax revenue, it just meant that it didn't grow very fast. But we now seem to be back on a track very similar to what we were on before. Overall production in Lexington looks like this. It's a little bit, you can see, there's the decline in 2009, as we all experienced. It's come back up. It got a little flatter in 2011, and we're not really sure where it's gone in 2012 yet because we don't get those numbers as early as we do for the U.S. Here's what's going on for the U.S. It's actually returned back to something of a stable growth rate and is going along at about 2% to 3%. Net profits tax, though, as you can see, it sort of follows what has happened in output and earnings and employment, but it's been flat lately. And what we sort of attribute a lot of this to is that uncertainty that I began with. In no small part, net profits, what you get in net profits which depends on how firms declare their profit structure on their federal income and on their federal taxes. And with a lot of uncertainty lately in how the federal government is going to handle those taxes, consequently, we're getting uncertainty here. And I think firms are sort of pulling back and retaining earnings and doing things to sort of offset that uncertainty. So here's our forecast. We have a model that we've put together that uses these economic inputs, in particular for the net profits we're focusing on national GDP and national GDP forecasts. Our model takes the statistical relationship between GDP, some time trends, and some other statistical factors, and puts together a prediction based on what we think the GDP is going to be going forward. For 2012, we used the actual GDP. For 2013, 2014, and 2015, we used CBO projections of the GDP to arrive at our model predictions, and those are reflected in the first column. However, we do take a closer look, and we don't just go with what the math shows us. And so this year, in addition to my pessimistic and optimistic forecast, I've presented what I'm calling an augmented model. So this augmented model takes into account two things that, well, actually three things, but two things that we know as facts. The first thing is that overall net profits revenues this year have been a little below, have been somewhat below what we had projected. And over the last two years, our model has tended to predict a little bit higher than the actual net profits revenue. And so we took those two factors into account, and so the augmented model is a lower number based upon those two facts, as well as just simply the economic understanding that in this uncertain environment, we think that businesses are going to have lower net profits shown. And so that's our augmented model. And so for 2013, our augmented model predicts 29.4. For 2014, we show no growth in net profits in the augmented model. In the pessimistic model, that model basically builds in sort of a worst-case scenario. That's basically a double-dip recession, not quite as deep as the last one, but still deep. And our prediction would be that it's, in the pessimistic sense, it's starting now. I don't know that it's starting now. Please don't take this as Chris Bollinger says that there's a recession starting now. I don't believe that, but that's my most pessimistic view of what might happen. The optimistic view is actually the model view. We think that the model is predicting a relatively optimistic world based on the CBO projections of GDP that we're looking at and comparing those to the actual realized fourth quarter GDP numbers and what we're getting as predictions for first quarter 2013. The occupational tax forecast is actually, I will tell you, the occupational tax is a lot easier to forecast. Our base model, again, it's the same kind of statistical model based on, in this case, earnings in the U.S. and earnings forecasts in the U.S., as well as some time trends and some other statistical artifacts or structures. The model for 2012 is based on actual realized earnings in the U.S. 2013, 2014, and 2015 are based on CBO projections for those earnings. The augmented model takes into account similar things. We looked at the year-on-year receipt of the occupational tax. It's actually very, very close to our model. So our augmented model for 2013 is about the same as the actual model. For 2014, we hedged our bets a little bit in the augmented model because we had some concern over whether the growth that's being forecast would continue. But if you look at it, it's very close to the model in terms of percentage differences. For the pessimistic model, again, as with the net profits, that reflects a very pessimistic view, kind of a double-dip recession starting now. I don't really believe that model. but it's what we think is a worst-case scenario. The optimistic model is an even faster growth rate. The optimistic model has us returning to an employment and earnings growth rate that rivaled the pre-recession period of around 2003 to 2005. And those are my forecasts. I'm happy to go back to those. I understand you also have them in front of you and answer any questions you all have. Thank you very much, Chris. and this would be a good time, Council Members, if you have questions of Chris, if you'll log in, please. Council Member Kay. Thank you. Thank you for the presentation. Can you just go back one? The question I have really is the difference between the model and the augmented model. It sounds like you think the augmented model is really the more appropriate model for our economy. Yeah. Yeah. The augmented model is closest to my best guess. It may be a little pessimistic. A couple of things to just say a little bit more about that. This has been a very fluid couple months with sequestration, with changes in tax structure, with political events going on in Europe and elsewhere that affect what I think is going to happen in the economy. and my view of what's going to happen in the economy can change daily. I mean, I woke up this morning to the reports on NPR and in the news, as I'm sure many of you did, about the effects of the sequestration on air traffic controllers, which was, to be honest with you, something I hadn't really thought about until this morning. And I said, hmm, that's important. And so my view of the economy changes on a daily basis. We were putting these predictions together in February and March and early April, and they change regularly. The augmented model may be a little more pessimistic than I felt a week ago, and it may be a little less pessimistic than I feel today. It's my best guess. Thank you. That answers my question. Thank you. You're welcome. Are there any other questions, Council members? Thank you. That answers my question. Thank you. Council Member Clark. Thank you, Chris. Just a real quick question. And both the chart that has earnings in Lexington and the GDP in Lexington, that product, both of those go only to 2011? Yes. You mentioned that, but could you explain that a little more, why that can't be projected into 2012? It can be projected. These are the actual numbers released by the GDP for Lexington, I believe, would be national. BLS, Bureau of Labor Statistics. So Bureau of Labor Statistics collects all the data, runs it through their processing, and produces national numbers. And then they go back and begin to release subnational numbers, and they start big and move down. And metropolitan statistical areas are the last thing they release. And so consequently, I don't have those numbers for 2012 yet. I believe they're scheduled to be released sometime late this summer. And so that's sort of the constraints we're under from Bureau of Labor Statistics data. And so that's part of why we prefer to use national numbers in our model building is because those are more up-to-date. They're released earlier. We can use them quicker. And the other models seem to indicate a steady growth anyhow, so we would probably predict those Bureau of Labor statistics to be there. We can hope. All right. Thank you. Thank you, Chris. Thank you. Welcome. Does anyone else have a question or comment? All right. Thank you. All right. Thank you, Chris. I see none. Great. Thank you all very much for your time. I appreciate your questions. We appreciate it. Thank you all very much for your time. I appreciate your questions. We appreciate it. Excuse me. I have reference material in case I need it. Thank you very much. I was going to, as a former director of revenue, handle this part of the presentation. and I want to thank Dr. Bollinger and his staff for their help. We appreciate this is the second year we've worked with them, and it helps immensely to have an independent set of eyes come in and talk to us and see what they say. It is challenging because nationally the numbers lag, and we need to know what we're going to do next month or the month after, not a year ago. So it just kind of augments the fact that our crystal ball is a little fuzzy, but we do the best we can. So with that said, let me go across what we have incorporated in the mayor's proposed budget as far as revenues for our fiscal year 2014. And starting with the general fund and those big four revenues that Dr. Bollinger talked about, the employee withholdings. Let me first start by saying I think the last time we were at the Budget and Finance Committee, I was not a bearer of glad tidings. I talked about the trends that we had seen through February and raising some concerns that we would meet total budget and came up with some estimates as to what kind of shortfall we might see compared to budget. That estimate was about a $6.4 million potential shortfall in actual for FY13 compared to the original budget. As we were preparing the mayor's proposed budget, we were hungry for numbers, and we watched March come in, which came in very strong, especially in the net profit category, which was the area that we had our largest concern. We saw that the U.K.'s model was expecting stronger net profits than we were seeing. We were seeing a 9% drop year over year through February. So that made us wonder what was unique about Lexington. Reached out to our sister city, Louisville, and their experiences were not tracking the same as ours. They were having positive year-over-year, both employee withholdings and net profits. I also contacted the state budget office, and while they were seeing soft sales receipts, sales tax receipts, they were experiencing very strong both personal and corporate income tax returns. So when March started coming in, showing a positive, we thought maybe that we were late to turn the corner and revisited that estimate. And so we actually raised the estimate for what net profits to be. We don't think that we will be $5 million behind. We think it will come in more like $4 or $3.5 million behind budget. And that's good news because that's the basis that we use in order to build the 2014 budget. We also saw that withholdings was still, it kind of lost its momentum in January and February. It was kind of gaining some momentum in March. So we felt that instead of being plus $600,000, we think that it will probably beat budget by about $1.5 million this year. Again, that's good news because that's the basis that we billed 2014. We also looked at insurance and saw that insurance was still tracking very strong, so we upped our estimate on what we felt insurance would come in. So basically we feel that the February estimate of 6.4 below budget, we decided that based on the March and now that April has come more than halfway in, we feel that that is $3 million better. We will not make budget, but instead of a $6.5 million shortfall, we're looking at finishing the year with about a $3.3, $3.5 million shortfall. That's significant in that we have to decide what we think 2013 will be in order to build forward to come up with the 2014 budget. So with all of that said, this is what we're proposing for 2014. We think that a budget of $168.4 million is reasonable. That's a 3% increase over our current projection. It would be 4% over the original budget that was adopted in 2013. That assumes that continued improvement in employment in the local economy that we're seeing both in the national and the most recent MSA trends. The real question is the slope of that line. We're not saying that the slope won't continue to go up, But what rate? That's what we're guessing. Is it 2.5? Is it 3.5? We're predicting a 3% year over year. In net profit, because of the strong results that started coming in in March and April, we're projecting a $29.7 million 2014 results for net profits. That's 2.5% over this year. Remember that that is a 9.8% decrease from the original budget and basically flat two years in a row. So that's not we're out of the woods in net profits. It's that we're not slipping as far as we were fearful that we would earlier in the year and feel that that trend that's on the national will start to come and be seen locally. So any questions on those two before I go to the next slide? Dr. Bollinger is still here. I'd be glad to try to answer questions. These are the most difficult to prognosticate, and this is our best effort at this point in time. Any questions, Council Members? Okay. Okay. Uh-oh. We have a login problem. Council Member Stenick. Mr. Mayor, thank you for the update. I'm glad to see that we're a little more optimistic than we were before. Can you go back and redo the chart then in the budget book for us and give it to us, the chart that shows the projected year in now versus the new revenue and what percentage growth that it was? I know we're saying 2.7, but I think it's changed on the next page over where it says 3.9. If you get an opportunity, you don't have to do it today, but can you go back and recalculate that and kind of give us a new percentage and email it to us? I'll take a look at that. I'm not clear as to what you're asking me, but I'll be glad to follow up. Yeah, because you had a projected year-end number in the budget when it was printed, and I think that projected year-end is a little higher now, about $3 million. No, actually, this reflects the $3 million increase in the forecast. The one we already have? Yes, the $285,919. So we're still projecting a 3.9% increase over the projection. Over last year's budget. Not over the budget. That's what the last column says. Okay, I'm reading the total, and I think it's the 214 estimate versus the 2013. Oh, revised. Revised what? Right. I thought it was revised estimate. You're saying it might be revised budget. Right, but I think you revised it again. So if you can just give us a new chart, that would help us all. And then on these numbers, if we accept that and pass the budget, what is our safety net? I know we had this discussion a little bit on Tuesday, but what happens next year if those numbers are off and we run a deficit? Where do we go to besides cuts? Well, first is controlling expenses. That's always where we go first. Then we go to fund balance. Which is $1.5 million. Well, I think you all haven't finished your discussion. Well, I'm saying no. Outside of that fund balance, I'm talking about the one we've programmed in the budget currently is $1.5 million. Yes, as far as budget to budget. But at that point, we would look at actual fund balance. Right. So cash flow, basically, assuming we don't, hopefully we won't spend any more of the fund balance, we can carry it forward because my concern is, and after you revise that sheet, we won't make these estimates, and then what do we do? Because I'm not sure how much more we can afford to cut. But that is definitely the first way to look. But having that safety net in an emergency fund type situation is what we need. I love to sing that song. I like good governance of fund balance. And in order to do that, you have to have a fund balance to govern. So, yes, sir, I agree with you. Okay. Maybe we need to create a true rainy day emergency fund and put cash in for situations like this, because that's where we really are exposed, in my opinion, not a budgeted economic contingency, but a true rainy day type fund balance that we can get to with a little more flexibility. and maybe we can work on that with this extra. Thank you, sir. Okay. Any other questions? You're singing our song. Thank you. Council Member Massadi. Just for my clarification, we've got 1.5 in the fund balance, and that is actual. No, ma'am, that's budget. Budget, I'm sorry. Actual was the presentation from Tuesday, which is $7 million maybe? Right. Well, it's how you want to look at it. If the council tonight has first reading the way it is and has second reading after that next meeting, it's $3 million-sign is unassigned. Right, but the $1.5 is what you're carrying over from 2012. No, it was built into this current budget. Okay. Second question, on the emergency contingency fund that we have set up, we could not use that money for your saying if there was a downfall? in any of these, or could we? It all depends on the subsequent events. There is a calculation, and I'm not well-versed in it, but it's a three-year average of revenues. So if the revenue shortfall was severe enough to make that three-year average to show that we could pull money out, then it would be within the standard guidelines. Okay. If it is more gradual, then you would have to pass ordinance in order to access that economic interpensate. But it is there if we do fall within the guidelines. It depends on the severity of the shortfall. Okay. Thank you. Are there any other questions? I see none. Okay. Thank you very much. Please proceed. Dr. Bollinger, thank you again. We appreciate our partner at UK. Thank you. I asked him to stay until we got past that slide, just in case he was needed. Thank you very much, Vice Mayor. Rolling forward, the insurance premium tax is the next category, and we're having a very strong 2013 in this category. It is somewhat elastic in the fact that it kind of jumps up and down, but it kind of jumps up for a few years and then kind of jumps down and then comes up for a few years. Some of that has to do with actual turn of events. For instance, large losses last year with windstorms, ice, and tornadoes caused, I think, the overall risk premium for the state to go up. We actually, that bad news for the individuals, all of us paying our insurance premiums, is good news for our revenue on the government side. We've predicted a second year, year-over-year increase in this category of 5%, which is much less than $9.5 that we're experiencing right now, comes to $25.5 million for the insurance premium tax. The next is franchise fee. And as you're aware, there is a proposal there. This $22.7 million has the assumption of a 1% increase in the gas and the electric utility franchise fee for the entire year. That's going from 3% to 4%. The reason it is not on water is that that franchise is not yet up for renewal. I don't believe that happens until 2015. this does assume that the general fund adopts an ongoing subsidy to the urban service fund for streetlight costs. It would produce about $4 million more in this fund than at the current 3% level. and we have incorporated, and you'll see this in the urban service discussion, a $2.5 million transfer to subsidize the actual projected cost for the Streetlight program. So in numbers, it's a 21.4% over our projection. It's a 7.2% over the budget. It is both usage as well as rate sensitive, so this reflects a rate increase, usage is totally dependent on Mother Nature, whether it's a very cold winter, whether it's a very hot summer, whether it's a very dry or wet year. Until this unusual long-term spring, we had two very unusually mild winters. We do feel that because of the cold, extended cold spell throughout the spring, that we will benefit from a small increase in the fourth quarter when those franchise fee payments collected for those bills in the February, March, and April period come due. And any questions on insurance premium or franchise fee? Questions, Council members? I guess, Bill, my question would be, and this is sort of a technical, and it may not be your question, but it may be. In order to, if the budget assumes an effective date of July 1st for the increase in franchise fees, then that needs to be built into the utility bills. And so backing that up, is there a little problem with timing? That's a great question. And David Barber could address this better than I am, but based on the comments that I've overheard, utility companies have asked for at least for 60 days to implement a rate increase. So if we truly wanted it to be effective for usage July 1, we would need an approval of this sooner than later. Now? Yes. I see. That would support the 12-month assumption. The idea is that we have the actual franchise agreements. It's actually on second reading or first reading. I'm not sure, but one of the two is on tonight. That is just the agreement itself. Separate from that would be an ordinance for if we wanted to change the rate, because incorporated in the extension or the new franchise agreement, it says it's anywhere between 3% and 5%. It's currently at 3%. Do you know if the administration is bringing anything to the council? I think it would like to. It was waiting to see what the discussion might be today in the revenue. Not that you have to make a decision, but we were hungry to hear what type of comments and questions arose today. Okay. All right. Thank you. Council members, any other questions? All righty. All right, thank you. Seeing none, thank you. And we'll try to get it going here. Those are the major revenue sources for the general fund that kind of gets us above the 75% revenue source. So then to migrate to the other funds, the Urban Service Fund, which is your streetlights, street cleaning, and refuge, it's currently budgeted projection of $36.1 million. That's a 1.2% increase over our projection for the current year and a 1.9% increase over the current year budget. It does reflect a 1.5% increase in property tax revenues. We started our mayor's proposed budget at zero, but the assessments and talking to our PVA, the 1.5% seemed to be a solid number, so we incorporated that in our mayor's proposed budgeted revenue. It also reflects actually a decrease in commodity sales. That's from the MRF, the recycling. There are decreases in intergovernmental and sale of surplus, and it does show a transfer from general fund at $2.5 million for the Streetlight program. That's basically a net zero because it was in the FY13 budget. It's also in the FY14 budget. We do have a question. Okay. Council Member K. I thought I understood the previous slide, and now I have to ask a question. Sure. In the previous slide, you, and besides talking about revenue, you talked about the transfer. So is that franchise fee $22,007,000, is that actual revenue for that general fund? That is the total revenue predicted for that line item in the general fund. What I'm showing at the very bottom is that we are intending in the general fund to transfer $2.5 million out of the general fund as a transfer to the urban service fund as a subsidy to streetlights. So this is kind of the link between the discussion in the general fund and then also that comment there as where it's being received in the urban service. Well, so I guess how does that show up in the actual budget? It shows up in transfers. Is that correct? We have categories. We have revenue. We have personnel, operating, partner agencies, transfers, and debt service. So when we look at the total budget, we look at revenues, we look at expenditures, that's going to show up in the expenditure side as a transfer. Yes. That $2.5 million. $2.5 million. And it will show up in Urban Services Fund as revenue. Well, it will show up as transfers, but it will be a positive transfer instead of a negative. Does that help? Yes. Thank you. All right. And just, if I might, Council Member Ford, just quickly to tag onto that. So that would be the $2.5 million transfer for streetlights would be on top of the $2.5 million from the fund balance that Council's considering tonight for this fund balance. So that's $5 million total. Well, I may agree with you. I want to make sure that we're talking about it. Because we did not raise the franchise fee in 2013, we wanted to make sure that the general fund had enough money to supplement or subsidize the urban service in 2013. So we asked to assign part of last year's fund balance to be used for that purpose. It's not an additional 2.5. It's 2.5 in 13. It's 2.5 in 14. So it's not the same 2.5. It is additional money. It's one transfer in 13. It's another transfer in 14. Okay. Thank you. Council Member Ford. Thank you, Vice Mayor. Bill, explain to me why there's a deficit in the, and we talked a little bit about this in our retreat in fund balance conversation, but can you give me an explanation of why there is a deficit in the Urban Services Fund that requires these transfers from the general fund over there via budget and via fund balance? Yes, sir. We have estimated total Streetlight funding program of about $6.5 million. that includes $300,000 for new installations as well as the tariff for the electric for all of the streetlights in Fayette County. Currently, the funding source for that program is from a special district property tax. That's currently at 2.1 cents per hundred, and that generates approximately $4 million. So there you have a $6.5 million total program cost. You have a funding of $4 million. There's the $2.5 lack of funding to cover the total program cost. Does that represent an imbalance then? And should we consider properly addressing the revenue for that source? We should. and the administration's proposal last year and this year is that it would be a transfer from the general fund. That would be the revenue source to complete the funding for the program. Thanks, Bill. Thanks, Vice Mayor. You're welcome. Council Member Clark. Bill, I see a 1.5 percent increase in property tax revenue, and I've seen that report from David, a PVA administrator. And my understanding is that even though we have a 1.5 increase in property taxes, as he reports, we don't have use of that, all that increase, because with the 5% that goes to the library and so forth, we would not have that full increase to use as part of our fund. Is that correct? How do you figure that in the budget, in the revenue there? That's a general fund question rather than urban service fund because we have two components of our property tax. We have the general fund property tax, and we have the special district funds which fund the urban service fund. So your question is over here in the general fund. I see. And that's $0.08 per $100 of assessment, and we have a requirement that $0.05 of that $0.08 go to the library. As far as presentation in the budget, the entire $0.08 goes in as property tax revenue, and then under partner agencies, that transfer of the $0.05 goes to the library as an expense. That explains it. Thank you very much. Council Member Stennett. Thank you, Vice Mayor. Mr. O'Meara, on the streetlight, do you have a capital need total in front of you? The last one we got at a meeting, it's been what, two years ago, it was about $8 million in new installations out there. I do not. I have what has been presented of $300,000 a year, and so that's what we have embedded in the budget last year and this year. And the $6.5 million reflects that. If more would be wanted to be done, then we would have to subsidize the greater amount. The challenge is also the lead time. So when you make the commitment for the streetlights, there seems to be a history of a very long time before those installations actually go in. Well, I'm glad you brought that up because last year when we balanced the budget with the extra $2.5 million in there, Did you all, did my colleagues know that the first street light from that increase went in last week? It took that long. He's right. The lead time takes that long. So I think this is an even bigger conversation. We may need to have just a meeting on street lights because the council, there's some policy issues about using general fund dollars to supplant our urban fund. Do we want to continue to do that? We've made those decisions in the past. For instance, the leaf collection used to be paid out of the general fund, but we transferred it to the urban fund. So there has been precedent set of using one and then the indirect costs that we're putting back in the general fund from urban funds, et cetera. I think it's a policy issue. Nothing out there says that we can't have two funding sources for one item. We just have to legally justify it, such as garbage. We have two funding sources. We have a fee and we have a property tax. I think it's come to make a choice on streetlights because this may or may not be the best way to continue to do this. And to Council Member Ford's point, Either we need to bite the bullet and increase the property tax to the appropriate amount or find another funding source, simply put, whether it be from a general fund or an urban fund created. So I like to have that conversation. I think my colleagues would feel more comfortable maybe having just a streetlight conversation on the history. Some of them have not seen that presentation and maybe going through those. It may be helpful. Council Member Standard, we can certainly do that. We have the information of what a fee might have to be. We also have the information as to what the property tax would have to be to cover the current running rate of $6.5 million, the challenges of the property tax with the 4% increase without having a recall option, as well as the franchise fee funding as basically a general fund subsidy, and just to commit that that's part of our utility costs that have to be covered by the general fund. One of the philosophies of going that route is that we have neighborhood streetlights and we have community streetlights. You have streetlights in your neighborhood to get to your home and outside your house down at the stop sign. We also have streetlights on major arteries, such as the spokes of the wheel, New Circle Road, that type of thing. And so that property taxes for neighborhood lights seems to be appropriate. You're paying for what you yourself have and your neighbor down the street may not. And then a general fund subsidy for those that are shared by everyone in the community would be analogous to this subsidy. Yeah, I think the discussion also needs to be clear about the property tax piece. Not everyone pays it. So we're putting streetlights in for people who are not paying the tax that they're getting the benefit out of. And then a fee, everyone has to pay the fee. You're talking about not-for-profits, churches, that type of thing. Government, we don't pay our own streetlight fee for Main Street. We have a lot of not-for-profit footprint in Fayette County. Right. The point is we need to make sure the fees are fair and equitable, whether it be a fee or tax. But that discussion has got to take place sooner than later because we've never raised the streetlight property tax. We've actually decreased it. And here's where we're at. We didn't keep up with our electric bill. and we've got to make a tough decision. But as you mentioned, I'm glad you did, is there's a difference between a neighborhood streetlight and a community streetlight that everyone benefits from having that street well lit as a safety precaution just to get down the street. So if we can have that soon, that way we can make a final determination on the budget and the franchise fee. Okay, thank you, sir. Not to give you a stroke or anything, but what about Tuesday? Do you have all that information? If we could bring the handouts Tuesday, we could make that. I don't think I could get it ready tomorrow. Take a stab at starting the discussion when we have our meeting Tuesday. And council members are shaking their heads that they would be willing to suspend the rules ahead. It's having it ready tomorrow is my hesitation. I'll be glad to have the information ready and present on Tuesday. Okay. All right. Council Member Massadi. Vice Mayor, that was what I was going to request, if we could have this information as quickly as possible, because it seems like no matter what, we're never going to catch up at the pace that we're going with now. So unless we make some kind of policy change, as Council Member Ford and some of the other council members have suggested, we're never going to catch up. Is that correct? That's the way we're going. We're always going to have to supply the general fund with. What the current proposal is the general fund would be the catch-up and would take on that responsibility for these community streets. But that will be ongoing unless we make some kind of a policy change. That's what I'm saying. We will never, ever be able to catch up unless we make some kind of different alternative funding mechanism. Correct? That's correct. This franchise is one funding mechanism to have us caught up. There are others which we'd be glad to present and show you the options. I think it would be real helpful, Vice Mayor, if we could have that information. Thank you. Councilmember Lawless. We don't need to do this by Tuesday, but I think we need to have a similar conversation about street sweeping and those things that are part of property tax. And I've met with Kevin Wente, and they're coming up with a new program and GIS. But that's been a huge issue in my district, and I would imagine at least in some of the older areas and probably the first district and the second district. So that's where people are paying the higher tax rate, and the streets don't get swept. And some places there are signs up that say you can't park here, and people get tickets, but the streets. So that's a conversation for later, but I think we need to have that too. Thank you. Are there other questions on materials so far? Seeing none. Please continue. All right. Next is Sanitary Sewer Fund. We have proposed a total revenue of $46.2 million. That's a seven-tenths of a percent increase over our projection for 2013. It's a 3.7 increase over the FY13. It does reflect a 1.6 increase in collections in the user fees, but it also reflects decreases in both intergovernmental and sewer tap-on fees. The sewer tap-on fee, of course, would be related to new development. The water quality fee is the next major one. We do have a total revenue of $13.6 million, which includes, for the first time, a $2.1 million Kentucky Infrastructure Association. I don't know what the A stands for. State loan proceeds. Net of that 2.1, it reflects a 2.8% increase over the current year projection, 5.6 increase over budget, and it does reflect an increase in revenues from the user fee. And then the final fund I was going to draw attention to was the landfill fund. Total revenues are being proposed at $6.9 million. That's an eight-tenths percent decrease from the FY13 projection, pretty flat compared to the 2013 budget. It reflects a $60,000 loss from construction and demolition fees due to the closure of the landfill. And that concludes my portion of the mayor's proposed revenue. If you have any questions on those, I'd be glad to entertain them now or later. Council members, questions? Council member Stenwick. On the construction and demolition fees decrease, now are we paying someone else now to collect those in the landfill? Is that why there's a decrease? We don't operate ourselves anymore. We do not operate it, so we do not have people coming and dumping. That was the source of the revenue. If someone else has to go, they have to go to an alternate site, but then so do we. We do pay fees for that to alternate site because our landfill is no longer open to that site. I'm trying to understand a lot. So we're paying someone else now to do it for us or have an agreement. Do you know what that contract, how much we're paying? I do not. We can get that in the expense side. It was discussed when we had the mayor's hearing. I don't remember a dollar amount. It may be more efficient than operating our own, obviously. Well, I would defer to environmental quality as to why this year closure, but I think we were supposed to close it. We've been working on closing it for, I guess, 15 years. So whether it was timed this year or next year, I don't have to. But we still have a resource for the public to go to. So, yes, there is one available. It's not owned by the urban county government. Very good. Thank you. Is there any other question for Mr. O'Meara? Councilmember Akers. Back to the franchise fees. Do we collect any money from cable or any other utilities that would be included in here? That's a great question. The answer is yes, but, unfortunately, I'm sorry, Councilmember Akers. There's a state statute that took away the local right to assess a franchise fee for telecommunication companies several years ago. It was replaced by a state excise tax with a portion distributed through the state to local government. We get a monthly check from the state that is for cable, telephone, anything that meets the telecommunications definition. So we have a flat revenue source from now on from that state expense. Okay. Thank you. Are there any other questions? I see none now. Thank you all very much. Are you abandoning the podium? I am exiting and letting Melissa Luker. Thank you, Commissioner. Yes. And we'll look to Melissa Luker, our acting budget director. Just a second to get my stuff back up here. Okay, there we go. We're going to start off talking about the current debt structure and where we stand right now. If you look at this chart, which is pretty small, the names on the side, you see where we are. The first column is 2013. That's our current debt. We have debt service in the FY13 budget of $33.6 million. That includes the yellow there is the pension bonds. So you can see what a strain the pension bonds have put on our debt service for the next several years. And then the other are just existing bond projects that we have done. So then hit the wrong button. How do I get it to? Something was clicked on there and I can't switch it. There we go. Thank you. Clicker's not my friend today. If you look at this chart, this shows the anticipated debt service with the $500,000 payment for the first year for the proposed bond that's in the mayor's proposed budget. That is up there in the red. That's where that anticipated new debt is showing up. And then in that number, the new debt service for FY14 with the anticipated debt, the gross number is $34.9 million. Half a million of that is the first-year payment on the anticipated debt. It also is offset by a transfer of MAP funds of about $1.3 million to pay for the debt service for the $13 million paving bond that we have done during this fiscal year. So that's not reflected in the chart, but that is not included in the 34.9, so it actually makes our net debt service 33.6 from an expense side because of that transfer. This next slide is this... This thing is getting really happy today. The next slide here shows this black line is the projected revenues. We have set a goal to have our debt service less than 10% virtual revenues. You can see by looking at the black line that at our current pace, we're not going to get below that goal until 2017. So we have a long way to go to get under that goal there. And you can see the pension bonds are putting us over the top there. Does anybody have any questions on the current debt before we move on? Councilmember Massavi, just curious, what kind of interest rates do we pay on this debt? Can I get back to you on that? I'm assuming, depending on when it was incurred. Yeah, it's varied on when we did it, what it is, and I can get you the numbers. I don't have them with me today. Okay. And I'm assuming that we take the opportunity to refinance whenever we can, just like anyone else would be in the market. And if you'll send that to all the council members, please. Thank you. I can certainly do that. Councilmember Clark. Just quickly, tell me why there is an increase in the pension bonds in 2018 over 2017, and then it drops again in 2019. 2018. The actual specifics, I don't have the answer, but I do know that every time there is a debt issue, there's a structure as to different payments. We try to look at level payments, but a lot of times that does not occur. It's also structured in order to get the best rate available. So if there's a 10-year call embedded in there, there's ways of structuring your payments so that it's more attractive to investors. All of those type of analysis and structure of the debt is handled by our financial advisors, and so some of that would be reflective of that kind of structuring when we issued the debt. Okay. All right. Thank you. Thank you, Vice. You're welcome. Council Member Akers. Are all of the bonds, are the interest rates the same across the board, or do they vary? They vary, and I'll send those to you all. Is it based on length of term of the bond, or is it just different for what you're bonding? There's various reasons why the interest rates change, and what I'll do is when I send you the interest rates to the council members, I will put why. I can put those answers in there. I was just curious. I was just trying to think about something different. So it's okay. Thank you. Are there other questions, Council Members? I see none, so go ahead. Moved on to the proposed bond for FY14. Just as a refresher for Council Members and new for new Council Members, we used the same CIP process that we used in the FY 2013 budget. And as part of this process, we had the divisions, they submitted capital requests. In their request, if it was a project that was over $25,000, we had them fill out a questionnaire. The questionnaire asked questions relating to fiscal and economic impacts, impact, the total cost of the project, projected start and end date, is it a revenue generator, is it going to create new jobs, is it going to create savings for the government, what are the long-term costs of this? So we didn't, you know, we asked very detailed questions, that way we know, you know, the best way to invest our money. We also looked at the health and safety impact. There's a set of questions on the questionnaire on that, on the quality of life, implications of deferral. If we put off this project, is it going to cost us more in the future to make this repair, do this project impact on other capital projects? If we have other projects going on, if this is something that is related to that, we looked at that. We also looked at leveraging outside dollars. We're getting state and federal dollars for various projects, so any time we can do projects with other money that's not the government's money, that's great. So we want to take advantage of that. So those were some of the criteria that we looked at and questions that the directors had to answer on their requests. and then what we did was we went over the CIPs in the mayor's budget hearing and we went back through with the divisions and asked them their priorities. You submitted this in February. It's now March. What are your priorities? Have they changed? Has something changed? So we went through the priorities and we looked at the division's top priorities and we tried to do the top priorities of the divisions. So that's kind of just a high-level overview and refresher for some and new for the new council members before we get into this. I'm not going to go into detail on all of the projects because there are so many, and you all have, it's in the packet and you got an email on the, We have a description of the bond projects and the reallocated bond projects. They're in the back of your packet. It's a really good resource. It is very helpful. But you can see here we are proposing to bond 1.25 for the Rupp Arena project. We've got the continued million dollars for PDR in there. We are bonding money for corridors. We've got some computer services projects. We have public safety. The new EOC projects are also included. We also, the big item is $5 million for the Senior Sentison Center. This is for purchase of land and to get started on that project. We have police and fire vehicles. In that we have, I believe it's around 50 to 60 new police cars. We have an EC unit, ladder truck, engine. Those are in there. And you can see the total for the new bond projected is 15.6. So that's what we are projecting for a small bond for FY14. Okay. We have a question. Council Member Kay. Yes. The item on the community action facility roof, is that our building that they lease from us, or is that their building that we're fixing? And if it's our building and they lease from us, what's the lease arrangement? I can answer part of that. It is our building. We are responsible for the structure of the building. The roof is in very bad disrepair. We had quite a bit of discussion on this. I can't give you the lease information, but I can get that. Sally can get it for you. Ms. Madam CAO. Which building is it? This is that community action building on Georgetown. This building has a 99-year dollar lease. Yeah. 99 years. Uh-huh. For a dollar. We are having discussions here. We're going to come back. Yeah. We're going to come back to you all. We are having discussions with Community Action and are trying to run a financial model on would it be better to approach the council with turning the building over to them? We have numerous repairs that needs to be taken on this building. Now, this is sort of a conversation for another day, but this is a long-term lease per dollar. I negotiated this one. And I'm sorry, do you mind if I ask what year that lease was negotiated? How many more generations will come? I will have to look that up. I'll guarantee you none of us will be around. No. But it was not real recent. No, it was not real recent. Okay. Thank you. We have looked at this lease and re-looked at this lease and looked at it through legal and various things. Thank you. Okay. Council Member Akers. Can you tell me what the Code for America is? Yes. I can give you a high-level overview of it. It's a nonprofit organization made up of urban and technology experts, and they want to help cities become more connected and efficient. It engages citizens. It's very technical. I can't give you all of the details on it. Jamie Emmons? I think it's probably part of that citizen-like startup and hacker stuff and open source and data and all that kind of. Yeah, basically. I think I know a little bit about that. Okay. And then what about Acela? Acela is a program that we're currently using with water quality as an enterprise program. And this would expand it to, I believe, it would be building inspection. Oh, I've heard about this too. Possibly code enforcement, plannings to get it to where they're all working together. Part of the one-stop shop that has been talked about quite a bit recently. So this is the startup for that project. Excellent. Okay, thank you. Councilmember Beard. Thank you, Vice Mayor. You know, you're probably going to have to turn around and ask Sally because she's been up to her elbows in this issue. The Tays Creek golf carts and the Picadome golf carts, for some reason that just doesn't seem to fit with me that the Picadome golf carts cost more than the Tays Creek golf carts. Or is it? The Picadome golf carts are gas cars, and that's the reason why they're expensive. Yes. Yes. So in addition to being an anchor around us, we have to pay for the gasoline and everything else for the people. I wonder, do we get more money from rental, or do we know? That I will have to find out. I think it has something to do with the facilities at Picadome. We don't have the charging stations for the golf carts like we do at the other golf courses, and that's why. Yes, correct. Okay. I don't think Picadone has as much use by 4X than Tays Creek would have. When we were out there the other day, I saw two people out on the course. This request also was a larger request when you see the CIP. we reduced this request as far as the golf carts were concerned because we figured that these could be staged. And exactly the way you said, we would replace those that were in really bad shape and had to be replaced for good public use. And then we would watch the play before we replaced more of them. I think you raise a good point. And that's why we did reduce what the agency, what FARC had requested. Okay. Very good. Thank you. Thank you. Council Member Scutchfield. Thank you, Vice Mayor. I had some questions about the computer services, the items there. The descriptions are really vague. Could we get a little bit more detail? Yes, we can have computer services into more detail. But I do know that they worked on a study, an efficiency study, an optimization study, and that is what they're requesting as a result of what this study found that we need for the government. Okay, just a little bit more detail because we need some information. Melissa, I think you're keeping a list. I am. Okay, I appreciate it. And so when you have those, if you'll just distribute the list to the council members, that would be great. Councilmember Lawless. Thank you. I was back on the golf carts, and it seems like last year or the year before, we did a sizable bond for a lot of golf carts. And I'm trying to you. In fact, we bought golf carts for Avon, which had been closed for three or four months. There was a slip somewhere along the line, and they were ordering 60 golf carts or something for Avon, which is kind of strange. Why don't we get more information? Yeah, let me get more information from Parks on the issue because I don't know what the law is. It might also, just a suggestion, you know, what do you do with the old golf carts? And are there golf carts out there that are used that we might, that are in good shape that we might be able to look at? We can provide much more information. Yeah, I'll get with Parks and get back with you. Council Member Massadi. Thank you, Vice Mayor. I had a question on the environmental quality as far as the wayfinding signs. Are we there yet, or am I jumping ahead? I think you're jumping ahead. Okay. Because I know we're talking about golf carts, and I've seen that on the capital projects. We're talking about computers. I've seen that on capital projects. I just want to make sure that I'm at the right place. Right. What we're doing is with the next section, and I can just go ahead and... Where is that? I think there are more questions on the bond projects. Is that what you're on? No. She's referring to wayfinding, which is on the reallocation of bonds. Can we hold that for a minute until we get there? Council Member Beard. Thank you, Vice Mayor, again. The total bond projects of 15674, roughly, does that increase our bonded indebtedness? Does that decrease our bonded indebtedness after this is settled? Or is it about the same? Let me go back to the slide. the red is the new anticipated debt so that's where that new bond the debt service you can see where that puts us above ok so it increases it by that much is what you're saying whatever that much is but it still puts us over that 10% goal ok thank you you're welcome And we'll remind everybody in your packet, page 52 does start the definition of all those projects that you've just been over. That's okay. The packet is very large. We haven't had the packet that long, so no problem. So I am interested in a little bit more, though, about the Code for America. Is there more detail you can get us? Yes, we can get you more detail. I don't know all of the detail. Okay. And Jamie had just prepared. He is not here the rest of the afternoon, but he had just prepared a long email. and a very informative one to our links committee. And, yes, Council Member Ellinger has that. It was sent to Council Member Myers and to Council Member Lawless. I think that that e-mail will answer all of your questions. And we will get that sent to everybody. To all Council Members. I think that will really help. And exactly the specifics of what that $180,000 is and does. And the one that you've got, that sort of list in the back part of your package, is that what I sort of did that for me? I mean, I couldn't keep up with what these projects were, so that's the real simple list that you can just refer to. And then, like, we'll get much more information. Okay. That would be terrific. Council Member Stennett? Thank you, Vice Mayor. I just want to add on to some of that. This is what our links process is actually for, to go through each one of these. So I remind our chairs that if you can take this list and make sure your link asks about them and get additional detail to come back to the council so that we can, during the links process, learn a lot more. So that may be the best avenue at this point rather than coming to the Cal at this point. Traditionally, these are broken up into links, and each link will ask detailed information. Just curious from an administration standpoint, and you can give your opinion, unless they're not or defer to whoever you want to, but some of these items we have a fund balance. We had a long discussion Tuesday about a fund balance, and the council made a motion to put additional money in savings, but yet we're going into debt. So I'm trying to understand, with the $3 million left, wouldn't it make sense to pay some of these out of cash versus going into debt? Because that cash is not earning any interest, barely. And we're going into debt, maybe 2% when we issue this bond. It just doesn't make sense putting money in savings, but yet we're going into debt. And what we did, we had the general fund bond request, the CIP request came in, and it was about $40 million. So we had to really look at this and look at what are the top demands, what are the top needs. And that's why in the next section I'll be talking about the bond reallocation. We looked back at old bonds, you know, what's not being spent, what projects are completed, what hasn't had activity. And so we looked at that to offset some of the bond. That way we didn't have to bond as much. And then we're also cash funding some capital as well. Yeah, I mean, you all have done a great job of scrubbing the old bonds. My concern is we drafted a debt management policy a couple years ago to get to 10%. Here we are, though, adding more debt service. And when we could pay a lot of these projects out of cash. And that's a philosophy decision amongst the council and the administration. But I think it's something we need to really seriously consider, especially when we go before Budget and Finance Committee and talk about these reserve accounts. Because we can't keep adding debt and there aren't any money on interest on our savings. It doesn't make sense financially. Mr. O'Meara, you want to? I would love to just comment if I could. I'm sure. Cash is always king. I would always rather pay cash than borrow as long as we have our safety net. So the discussion is that balance between having a safety net and then leveraging your cash for best purposes. And the philosophy that I would like to continue to talk about is appropriate use of fund balance is for non-recurring, non-programmatic recurring expenses, and capital fits right in there. You don't want to use cash to pay for hiring someone that then has to be paid for the rest of their career. You don't want to use one-time monies to establish a brand-new program that has a spending life of 10 or 20 years. So using fund balance for capital is an excellent use of fund balance as long as you have your safety net, if we're comfortable with our safety net. And that's really where the dynamic discussion is. So the 15.6, we modeled several years ago that because of our pent-up infrastructure, that a measured $15 million a year would be about as much as we could ever afford. And you can see from that graph that it's still going to take us several years to have that under control at the 10% level. So if we can migrate back, that's great on that bonding. Well, I look forward to our discussion in budget and finance when we have this topic brought up because I think we need to get serious about it. I think the council has been so thirsty of wanting the ability to save money, but at the same time we've issued a lot of debt, some being pension, some being general obligation debt for the normal day-to-day, but we've also let some of our day-to-day go by, and this list reflects some of the things that we've been needing to repair for years and that we need to get that discussion and get a better policy. But thank you for helping, volunteering today to lead that charge. Thank you, Vice Mayor. You're welcome. Council Member Akers. Thank you. That's what I was going to sort of ask also. Kevin started it, though, and that's why I asked earlier about the interest rates on the bonds and whether I was sort of going to ask you offline, but we started it. So I want to know, too, is it more, in your opinion, do you think it would be better to use fund balance to either pay off some existing debt that we have to pay that down so that we've reached the black line faster, or is it smarter to pay for some of these bond projects in cash? And what is your opinion? Well, let me clarify. It's very similar to what type of home mortgage do you have. Do you have the ability to make additional payments? Some do not, and that's kind of analogous to bonds. Bonds have call dates, and you can't really retire a bond until that call date comes. And that's why we have financial analysts periodically throughout the year see if the interest rate is low enough to refinance to save money against what is callable. And so we have that dynamic going on all the time. And when we have one, just like when we issued the $13 million paving bond, there were two bonds that were subject to calls, one of which we have to wait over a year before we can make the payment. So we borrowed the money, put it into an escrow, waiting for the call date to occur. And even with that sitting there, we feel that there is savings. So there's a complex dynamic as far as paying down current debt. So the more reliable or the more advantageous is when to pay as you go, which is cash financing versus bonding. Okay. Does that help? Mm-hmm. For sure. And, Sally, the 99-year lease, does that mean when you said legal's looked at it and everybody's looked at it, does that mean that there's no way to get out of it? There's a question today. I've tried and tried. Is that what that means? I mean, I thought that's kind of what you were saying when you said this. And I'm sort of looking at various ways. We're weighing how much it costs us to keep that building. Right. And it's got block grant in it. So if it's sold, you're paying back certain things. So we're going to take a real good look at all kinds of alternatives here. I'm sorry. Is that the only building of theirs that we own and manage? They have a lot of buildings throughout Fayette County. I think so. That's the only one that we have. I'm not sure about that. I need to check that. Okay. There's one on High Street. We on the High Street one also? I'll check and find out about that. I'm speaking about something I don't know. Okay. Thank you. Okay. And we've already sent to you, I think everybody's watching TV, that we have already sent to you the Code of America email. Oh, okay. Great. Thanks, Vice Mayor. Thank you. Thank you. Any other questions at this point? Okay. Melissa? All right. we're going to move on to the capital reallocation. And as I just said, we wanted to, we looked at projects that had, that were completed. We looked at projects that had projected balances, where we had other sources of income, so we didn't need the bond, and projects that haven't had activity for a while. So that's what we looked at to see what was out there, what was available you can see we had 1.92 million that we are reallocating or proposing to reallocate some of these projects go back to 2009 it's four years you know long time to be sitting on the money and not spending it so we have reallocated those projects and what we did was we looked at projects that were smaller dollar amounts, shorter lifespan, so we knew we could get the projects done and not be sitting on those dollars still. You can see there are some computer things, the wayfinding signs. They've requested more signage in Lexington. That's what that is for. and if you go back you can see that we actually in 2010 there were bond proceeds left from a way finding sign that weren't used so rather than bond another hundred thousand dollars for it we swept that we're using that i don't know if they knew it existed or not but that's what we're doing with the way finding signs you know we're not going to bond additional dollars if There's dollars sitting there for that project already. So you can see, let me go back. We have several small dollar projects on there. We have some stuff at corrections. We have radios. That's something I meant to mention. Radios are a common theme throughout the Capitol. Everyone's aware. The FCC mandate, it's not just police and fire that have radios that have to be changed over. It's streets and roads, it's parks and rec, it's corrections. So what CAO Hamilton has done is she is leading a group. I believe they've already met once. We reserve the funding for the radios in the divisions, but CAO Hamilton is working with the divisions to coordinate the efforts on the purchase of the radios. So that's why you'll see radios in here quite a bit. We've got some basic life safety stuff for fire. We've got some vehicle replacement. We have Phoenix Park upgrades, some items for the pools, some facilities items as well. Does anybody have any questions on the reallocation? Council members? Council member Akers? On the Shillitoe Park fields, well, I guess on this entire list, were these submitted as part of the capital requests, and then you went back and saw bonds that were available to fund them already existing? Yes, and I should have said that these were all part of the requests that the divisions submitted, and what we did was we looked at the projects, and we were looking for the shorter lifespan, smaller dollar projects that we didn't want to have to bond, and so that's where these projects came from. but they were all a part of that total of about $40 million request that I mentioned. So if I want to know why $150,000 for Shillitoe versus another park, I would ask Jerry or Sally. And Lynx, correct. Yes, he could give you more information on that. Thank you. Are there other questions? Okay. I see none. Okay. Well, we have one. Excuse me. Okay. Council Member Scutchfield. Thank you, Vice Mayor. I have a question about the wayfinding program. Mm-hmm. Council Member Massadi and I and our legislative aides kind of took a look at this. The 100,000 that you are looking at, I believe when you all did it originally, there were 98 signs. I will have to go back to the other number. There's 92 right now, I believe. Right. I guess the question is where are those other six signs? And also, originally the cost to design, produce, and erect all 98 signs was $732,000, which comes out to per sign about $7,500 per sign. And we're talking about $25,000 now per sign. just wanting to know what's the increase? I need to get more information from Kevin Wincy and Public Works on that because I don't want to speak out of turn. I know some of the signs need to be, I don't think it is just for four signs, but I would want to check with him, and we'll get you the information. Yeah. Any other questions? Okay, I think you can go ahead. Finishing up writing my notes there. Now we're moving on to the operating capital, which is cash-funded. This is a lengthy detail list, and this is something I'm just going to kind of give a hot overview of. In the general fund, we have a total of $149,000 of cash-funded capital. the top one there the $90,000 that's for a desktop lease project that we're doing we are Mike Nugent and computer services has looked and it's advantageous for us to lease computers as opposed to purchasing computers everyone knows the day you buy a computer it's it's obsolete basically. So this will allow us every four years, we'll have 600 computers. So we will have, we'll get 600 computers a year. And then in the next year, we'll get an additional 600 computers. We'll have them for four years. And so we'll keep on a rotating basis. So every year, we'll have 600 new computers in the government. That will help us to be up to date on the computers. And also create a savings for the government because the purchase of computers is significantly more expensive than leasing the computers. So that's the main one there. We'll move over to the Urban Services Fund. We have projected 4.16 in the Urban Services Fund of cash capital. The biggest part of that is refuse trucks, you can see, and we have projects going on at the MRF as well. and you'll see radio communication equipment up there. And the streetlight installations are also included in our cash-funded capital. In the map fund, we have various engineering projects. You can see here some of them are matches, and then we have a grant match there. moving on to the sanitary sewer we have several projects there you can see that are quite large but that's all with our consent decree for a total of 6.3 million and our sanitary sewer construction fund we have several projects here These are higher-dollar projects for a total of $40 million. Some of this is being paid for with proceeds from the KIA loan that Bill mentioned earlier in the revenue. We've been very fortunate to get that money. It's a very low interest rate, so that has helped us with being able to fulfill the projects that we need to. The Water Quality Management Fund, you can see it's a little less than $3 million for a total there. various projects in water quality stormwater. The landfill, we have a million dollars there. Part of it is for the Household Hazardous Waste Facility, and the other is for, I believe it's a cardboard recovery, that CDD recovery. Then the Enhanced 9-1-1 Fund, This is for the radio system, the 2.2. It's part of the big radio project that is ongoing in public safety and throughout government. I think that does it, doesn't it? Yeah, that's all. Okay, let's open it up for final questions. Council members, do you have any questions at all? There may be questions come through later. You know, I know as council members have more time to digest this and read it in more detail. Anything else today? No. Okay. Thank you very much, Melissa, Commissioner, CAO. We really appreciate this. And on Tuesday, our meeting is at 1 o'clock, I believe. and we're going to add as the second item the streetlight at least start the streetlight discussion and have information i think it's a really good idea because if we're going to do anything particularly with the tax we'll need to be prepared in the fall to have kind of vetted through the information and then Commissioner O'Meara and Melissa I believe and other folks are going to help us go through the mayor's the premises that were used by the mayor to put and the administration to put together the budget correct yes okay very good so thank you very much Is there anything else, Council Members? If not, I'll entertain a motion to adjourn. Okay, it's been moved and seconded. All those in favor, say aye. Anybody opposed? We are adjourned.