I'm going to go ahead and convene the Budget Committee of the Whole. Today is April 30, 2013. We are finished with April after today. So welcome to everyone. And today our meeting consists of two things. One is the Fiscal Year 14 Mayor's Proposed Budget Overview, which I believe our Acting Budget Director, Melissa Luker, is going to go through for us. And then we have also the Streetlight presentation, which I believe Commissioner Bill O'Meara is going to walk us through. And so we'll go ahead and get started. Melissa? Council members, do all of you, before we get going, the streetlight packet, do all of you have the latest and greatest? Yes. And although it may say April 26th, it's really April 30th. Okay. Welcome, Melissa. Thank you. it's a committee all right what we wanted to do was wanted to give council a kind of an overview on how we got to where we got to with the mayor's proposed budget. There are some things that, you know, happen, and we're not sure that council is aware of all of the things that happen, and we wanted you all to have an understanding of why we did what we did and why it looks the way it does. So this is not a presentation meant to go into great detail on individual line items in the budget. It's kind of a high-level overview. And before we get started, I want to remind everyone yesterday in your email you should have received a copy of the mayor's proposed budget summary book. That is something that we have been working on since we completed the budget. It takes a 485 page budget and summarizes it into about 135 pages. So while it's still large, it definitely is not as large as the budget. So it's a great reference and I'll make reference to adjourn this presentation. Okay. Okay, so we have just lost our quorum. So. Oh, our quorum's back. Do you need to be out for a second? Oh, good. Thank you. Thank you. The question, yeah, the questions come up, do we have a printed copy of the budget book, the summary book, and we do not, unless your aide printed it out for you. It's 135 or so pages. Yeah, and there's some charts that are in color, and so what we did was I just wanted to get it out quickly in e-mail. We don't have the funds to take it and get it printed like the budget book. but no I'm just gonna like some of the things in the presentation I'll say you know that's in more detail in the book and things like that I'm not gonna reference it line by line or anything like that but we can get you a printed copy if you would like okay just one more document to hold on to um what I'm gonna do is I'm gonna go over the approach and the approach of the budget talk about some personnel, things that we did, operating, go over new requests at a high level and give a summary of the budget. So the budget process actually started back in December when we went over the capital improvement plans with directors at a director's meeting. They submitted their requests for capital in January. We worked on compiling those requests for the mayor's proposed budget, put those all together, reviewed them. Then the operating requests were due in February. This is when divisions turned in their operating requests for their continuation budget, any new or expanded items, and they also gave us reduction scenarios. We held budget hearings in March. Chief of Staff Jamie Eamon, CAO Sally Hamilton, Commissioner O'Meara, myself, budget staff, and CAO staff attended the budget hearings with the directors. The directors came in. The requests were very well articulated. They used good business logic and advocacy, knowing that not everything that they asked for could be funded. They still brought forward good requests. It was clear through the budget hearings what a couple years of tight budgets had done to the government and how tight we were doing. It was to the point of divisions were having to do less with less instead of more with less. That's the point that we were at, and that's what we heard. It was a common theme in the budget hearings. Another theme was we had this grant, we've lost this grant. The stuff going on with the federal government, we're not sure what funds we're going to get. So those are all things that were discussed in the budget hearings, and directors were aware of as we went through the process. So when all the requests were totaled up, it was clear we have a lot of demand built up over the last couple of years. The total request for the general fund was $309 million. Included in that request was $6.2 million of new and expanded items. Well, our original revenue estimate from February was $290 million. So we had $19 million that we were going to have to cut in this budget to have a balanced budget. I took this binder right here home with me on a Friday afternoon after the budget hearings, and I tried to go through it line by line where there were increases and what can we cut, what can we do. To get to $19 million was basically impossible. So we regrouped on a Monday. We brought all the commissioners in, and we explained to them, we've got $309 million in requests and $290 million in revenue at this point. We need some help. We need some direction from you on your divisions and what we can cut. So the commissioners came in. They met with us. They went back to their directors, and they reexamined their budgets. They reexamined their requests and looked for places where there were additional savings that we could capture. They brought them back to us. We reviewed them. Some of them were appropriate. Some of them were not. We knew there were certain things that were brought forward that we just couldn't cut. So it was a very difficult time, and with these additional revisions, we were getting back to doing less with less, and that's not something that we were wanting to do. We weren't happy with it, but it was just part of the process. We didn't take anything that the commissioner or division director didn't recommend. So we made sure that all of the reductions were vetted through the divisions and through the commissioners so that we didn't take something that a division needed, that they were contractually obligated for this service, things like that. So we made sure that we incorporated them into the process. throughout this whole process bill was on the phone calling louisville calling scott county calling the state talking to them about revenues he explained some of this last week so i don't want to go into too much detail but we were researching the revenues you know what what are what are things looking like what what can we do what's what's the situation um revenues went up a little bit they didn't go up a lot so the decision was made that we needed to do the franchise increase So that's how we got to that. Throughout the budget process, when we were upstairs in the 10-floor conference room for several days and nights and weekends, we had some guidelines that we followed. And I went over these last week in the capital discussion, but we talked about government efficiencies, quality of life, quality of place, public safety, and leveraging outside dollars. What we wanted to do was any requests that we had, any expenditure, we looked at that. Does that add to the quality of life in Lexington? Does that make us run more efficiently? Do we have some outside dollars we can leverage on this? What about public safety? So we asked these questions, and we kept these in mind as we went through the process. On personnel, what we did with personnel, this is more of a systematic thing, but through HCM, our PeopleSoft module for personnel, we have to select a date and time in which we're going to pull the personnel. So whatever data is in there on a certain date is what data is going to be in the mayor's proposed budget. So we set that date as of March 1st. We pulled the personnel, and we gave it to directors in their budget hearings, and we asked them to go back through and look to make sure that there weren't any errors, any corrections that needed to be made. You know, an employee moved positions, they moved to a different section, things like that. So they helped us to get the personnel lined up and accurate to reflect where our personnel are in the government. We included a 2% raise for the non-sworn employees. It's a very modest raise, but it's a raise nonetheless. One thing that the new council members may not be aware of, but what we're doing with our personnel is we are budgeting personnel if it's a filled position at 98%. Vacant positions were funding at 75%. Filled positions are budgeted at 98% because if somebody leaves a position, if there's turnover, it takes time to hire. So we know that if somebody leaves a job, they're not going to be in that position for the whole 100%. So that's a way that we can budget that. And then with vacant positions, the directors know it's about 75%. So about October is when you can start hiring. And, you know, there are some exceptions there, but for the most part, overall, the field positions are 98 and the vacant positions are at 75, which is probably new to some people. So that's why I wanted to explain that. With our health care, we had Benefits Insurance Marketing, our health care consultants. We met with them on several times, several occasions. They also presented to the council at a work session on the impact of the health care reform, the FIPACA. So our health care costs, they reflect the projected increases due to the health care reform and all of the things associated with that. So we projected that. We continued the benefit pool and the supplement. So there are no changes there. and then on operating we discussed every increase over FY 2013 you know we wanted to know we asked the division directors why do costs go up is it contractual is it are you doing a new service are you change vendors you know why has this gone up so we discussed those with division directors we call people on spring break we interrupted people spring break to get to get these answers because the timing is just not the best. But everyone was very helpful. They provided us with answers. They worked with us. It was very great relationships. We continued the allocation of insurance out to the divisions. Accounting, risk management, and law worked together on getting us the allocations to where they should be. We also, the utilities are provided by general services. General Services works with James Bush in environmental policy on accurately tracking and projecting out the utility costs. And actually, we meet on a quarterly basis, so we're able to keep track of it throughout the year on how we're doing on our utility. So that was helpful. The vehicle fuel equipment maintenance, those came from Fleet Services. They're provided based on past usage, age of vehicles, older vehicles, repair costs, maintenance costs go up, gas mileage, various things like that. So those are three areas, the insurance, the utilities, and the vehicle fuel maintenance. Those are three areas where the divisions, they're not the ones bringing those forward. It's brought forward by other divisions that are the expert in that field. So going into the links process, I know that for new council members it will be helpful to know that the divisions didn't request that amount. That was actually vetted and gone through a process and well-thought-out numbers. So I'm going to just share that. We're working on the true cost of services. Many of you all will remember we broke out the golf courses by a golf course so that we know how much each golf course is making, bringing in, if it's being able to fund itself. the pools are like that this year in this year's budget. Last year the pools were all lumped together, and this year the pools are budgeted by individual pools. Another area where this is done is police. They have separated out some of their sections so they can track operations. They want to know, you know, we want to know how much is the canine costing, how much is the amount of police costing. So we broke that out into sections so that we're able to track those costs. The new request, as I said, totaled $6.2 million. There were 107 new positions requested in the general fund alone. We were able to fund 24 positions. What we did in funding those was we looked at positions that were a value add to the government. You know, where can we get the most bang for our buck? And in that, you know, we knew everybody made such good cases for their positions. It was very hard to say, no, we can't fund this position, but we had to. We lost several positions due to the loss of grants. So eight of the 24 new positions are not new positions. They're current positions that were funded by a grant, but now we're having to pick up the cost, and we chose to do that because of the positions. Some of them were in police. If we didn't fund those positions, then they were going to have to take sworn officers off of the street to pay for those to move into those positions. So we wanted to, you know, public safety, keeping that in mind, that's why we chose to do that. With the corrections positions, corrections, you know, ask for some new positions for booking because they only have one booking station. Well, if we added an additional booking station, that's three corrections officers, that takes our booking time, reduces that. it also reduces the amount of time that our police officers are spent inside the jail at booking and gets them back out onto the streets faster. So while the positions are in corrections, they're also helping out police as well and with the safety of our city getting police officers back out. So we look for things like that as far as if we're going to add new, we want to make sure we're adding value. Another example, some of the additional camps that we did in parks. We were able to add additional camps, and they were offset completely by revenues or somewhat by revenues that they brought in for the attendance and the camp fees. So we were able to add without just adding to our expenditures because that was helping balancing off with revenues. Melissa, this might be a good place to see if there are any questions about what you've done so far before you get into numbers and pie charts. Council members, does anybody have a question so far? I guess I will ask my question on the 2% raise for non-sworn. Is that all-inclusive? It's civil service and at will. Is that correct? Yes, it is. Okay. Seeing no other questions. Well, now we have a question. Council Member Stenner. Thank you, Vice Mayor. And on that same line of questioning, is that 2% a structure movement for people who are at the top of their pay grade? Yes, we will do it. So it's both a structure and a raise? Mm-hmm. There's a big difference. I know in years past we've only done the raise and didn't move the pay grades up. So we're actually moving all pay grades up 2% as well? Yes. Okay. Very good. Thank you. Thank you, Vice Mayor. Very good. Okay, thank you. Anything else? All righty. Go ahead. I have a note. This is where I'm going to reference the mayor's proposed budget summary packet, only because in that packet we break out these revenue streams in greater detail, and on some of them we've got a history in there. We've got charts to see how it's grown, decreased over the years. So that's a very helpful reference on that. I said we started at $290,000 in February when we worked on talking with other cities, looking at the revenues. March came in a little better, so we ended up with a total revenue of $97 million. And then we have a fund balance, July 1st, we were projecting of $1.5 million. So we ended up with $298.7 million. So that's where our revenue, sorry, and I'm not going to go into detail because I know we did that last week. so in the interest of time. And then here are our expense side. We have total operating expenses of $296 million. The biggest portion of that you can see is personnel, followed by operating, debt service, partner agencies. We have some operating capital in our general fund, which takes our total appropriations to $296.68, which leaves us, we're projecting with a fund balance of $2 million on June 30. This right here is the general fund revenue by category, so you can see where license and permits makes up the biggest piece of our total revenue, followed by services and ad valorem and then other. And here it is on the expense side. You can see that our personnel is 64.4% of our general fund budget. So it makes it very hard when you have to cut whenever 64.4% is personnel. So you're to the point of doing less with less. Here is, and it's kind of hard to see, I can tell now, the expense by department. So you can see public safety, general government, general services. Those are our three biggest areas. And all of these charts are found in the mayor's proposed budget summary book that you all received. So it may be easier to see on there because I'm having trouble seeing it on the screen here. But I just wanted to give you a perspective, and I think these charts do give a perspective, you know, on where our money comes from, how it's spent, where it's spent. So that's why we wanted to include these. I mentioned the summary packet. I'd like to thank the budget staff and the staff of Enterprise Solutions. They were very helpful. We had some system issues, and they helped us out. And I'd like to thank Commissioner O'Meara and CAO Hamilton and Glenn Brown and Jamie Emmons. They were all helpful. We all spent entirely too many hours in the room together. We know too much about each other now, I think. But that happens when you spend so much time in a small space. But, you know, we're looking forward to working with council during the links process and helping out any way we can. So with that, I'll take any questions. Melissa, thank you very much. And before we go to questions, I also wanted to thank you for your, you emailed the answers to council members' questions from the April 25th meeting, and we all appreciated that very much. And I suppose there could be some questions on that. Are there any questions, council members, on what Ms. Luker has just covered? I'll go ahead and ask my question. Back on the, you mentioned that with the grant-funded positions, the eight positions that used to be grant-funded and now we've put them in our budget, and you mentioned that public safety, are any of those Division of Emergency Management? No, there are seven in the police department and then one in social services. Okay. I know Division of Emergency Management has, I don't know how many grant-funded positions. That's come up in past links. They're not getting as much grant recoveries. They're not getting as much, but we were able to fund all of their positions. Okay. All right. Very good. Are there any questions, Council Members? I see none. So thank you so much. Really appreciate it. And we will move then on to streetlights. And we have Commissioner O'Mara here. So the podium is all yours. Thank you, Vice Mayor. Ah. Ready to rock and roll. In response to last week's Budget of the Whole, Committee of the Whole for Budget, we discussed revenue, and of course one of the points in this year's Mayor's proposed budget is the 1% increase in the franchise fee, and asked for additional information. And that was Thursday, and this is Tuesday, and we were able to cobble this together basically from other presentations that have been made to Council. As far as I could tell, it has been discussed both in July and August of 2011, January and February of 2012, and then again during the budget process last year with the Mayor's proposed budget of 2013. So just as a recap, put these together. the basic statistic is there's a little under 31,000 streetlights in Fayette County and the current program, the expenditures are over the dedicated revenues. The expenditures are broken up into the tariff expense, that which we pay the utilities in order to have the streetlights on, assuming a $300,000 a year new light installation budget. And then because this is the Urban Service District Fund, which has three programs in it, when we were doing this analysis last year, we made an effort to allocate some of the direct and indirect costs of the total fund toward each of the programs. So we looked at the total expenses for each program. About 16% of the total expenses in the Urban Service Fund are related to streetlights. So as a method to allocate, we allocated about 16% of the direct and indirect costs of the whole fund to this program. That comes up with an estimated total cost of the program of about $6.5 million a year. And the revenue source is special district property taxes. And that brings in approximately $4 million a year. So there is the imbalance. We have a total program cost estimated at about $6.5 million with a dedicated property tax revenue source of $4 million. So in the past, we've talked about funding options to address this program imbalance. And one is to increase the urban service property tax rate. This is a dedicated fund for those people who have streetlights in their neighborhood adjacent to their property. And so if you wanted it to be totally funded through property tax, that would be the place to go. The other option is to create a streetlight fee. There has been discussions on whether that would pass a legal review or not, but that was one option that was investigated. And the third one is to look to the general fund to subsidize the program, either through an appropriation or through an increase in appropriation of incremental revenue. And what was being proposed was the incremental revenue would be sourced through the franchise fee. So if you look at the first option, our current streetlight tax is $2.1 per $100 of assessed value. That is in those districts that have streetlights in their neighborhood. That's the source of the current $4 million. If you wanted that to meet the current program at cost, estimated at $6.5 million, we estimate that that would need to be raised from $0.2.1 to $0.3.4. That's a $0.1.3 increase. In a percent change, that would be a 62% increase. It would relate to about a $23 a year increase for a house valued at $175,000. I believe someone told me that $175, $178 is about the average value of a home in Fayette County, so I chose the $175 as an example. There are more levels to this discussion than just the increase from $0.21 to $0.3.4. In the state of Kentucky, property taxes are governed by what's called House Bill 44, and the total revenue generated from a property tax cannot generate more than 4% additional revenue from comparable property year over year. So in times of inflation and property values escalate by 6%, 7%, you actually have to roll your rate back so that your total revenue does not exceed 4%. in times of stagnant property values, then it would allow you to actually increase the rate a full 4% in order to get that total revenue. We have about a 1.5% estimated increase in property values by the PVA, so we're just back into the good place where we have values that are actually increasing. And if we do a 62% increase, then the voters have the option that if enough citizens sign a petition, that they could ask for this increase to go to a vote to be validated or turned back. And my layman's understanding of that, that would be at the next general election, which would be fall of 2014. So if we passed a property tax this August, and then within the requirements of so many days, I'm not into the how many days, 45, 65, I'm not sure, then we would not be allowed to assess this tax until the voter referendum was passed the following year. So you would actually go without the revenue for a year. The other thing to keep in mind is if the will was to raise the property tax this year 62% in order to cover the current programmatic cost of 6.5%, you would still be advised by a financial person that you need to continue to raise that each year in order to try to keep pace with the increased cost of the streetlights. and that is capped at 4%. As an example, at the current 2.1% level, if you raise the property tax, the 4% cap every year, it would take 13 years for the property tax to grow to the 3.4 cents that is currently required for today's costs. And that is before utility increases or additional lines are added to the program. Mr. O'Mara. Yes. Before you go on, when you said you were talking about the timeline on the tax, and you said if we passed it this year, it would be the general election in 2014, and we would go without the revenue until the election, did you mean the increase in revenue or any revenue? That's a debatable question. I don't know that we have a good precedent. I would have to defer to my legal eagles in order to answer that question. When we asked that question of the state, they indicated that that was the preferred practice. They also indicated that certain school boards do what you're talking about and go ahead and just withhold the difference until after the year. It's an open legal question, but that is what they instructed us to do, would be to withhold the, if we did it, that they would advise us to withhold the entire amount. Okay, I appreciate that. And Council Member Stennett has a question. I just, I wanted to follow up on the 2.1 cents for $100 of value. I know typically when we have these discussions, I know we recently had one in regards to waste management and talking about property tax. Usually a penny, a property tax in Fayette County, produces about $2.6 million of revenue. But we're saying that the street light fund is only collecting $4 million? By that math, you should be collecting $5.8. So I'm trying to figure out why are we only saying it's collecting $4 million and how we get there. Well, the general service tax, the $0.08, is on everyone in Fayette County. This tax is only for those residents that have the service. So the pie is smaller, is my answer. Okay, because the general service tax is on every property. Okay, there are some problems that do not have streetlights. Okay, I was just trying to follow your – so the 3.4 cents is just – how much property value is that on? Do we know? Yes, sir. I knew you'd have that. This is based on the 2012. That's $19,598,726,400. And total property in Vett County, is that 90% of it, 95% of the property owners pay this? Now you've got me. I brought this space, but I didn't bring... I'm just trying to put the increase of $23 on how many people it actually affects, because it doesn't affect nonprofits, it doesn't affect churches, it doesn't affect schools, governments, et cetera. That's a very good point. This is a property tax, so any not-for-profit government footprint would not be paying it now, would not be paying the increase. So you have schools, universities, governments, churches, hospitals that are not-for-profit, all of those are not assessed a property tax. And commercially, we do have commercial businesses assess the property tax. Absolutely. And obviously their values are what's funding this fund and make up the bulk of it. So it's really $23 per home, but it's a much bigger hit on our job base and our commercial property. So we need to be aware of that issue too. Thank you, sir. And just as a follow-up, can you remind us, just not with the exact number, but the number of properties which are off the property tax rolls is the amount of money is over a billion dollars worth approximately. Do you remember? I cannot recall that. It used to be over a billion. Maybe the assessments are down a little. Well, the difficulty is that I'm not sure that PVA has assessments for governments and not-for-profits on their roles. I have seen zero attached to parcel values, so I'm not sure that I have a good grasp of that number. That's interesting because... I may be incorrect on that. Yeah, it used to be that we were told that there is over a billion dollars worth of property off the tax rolls. That very well be true. We don't know exactly, maybe. I don't have a recollection of that. Okay. All right. Council Member Scutchfield. Thank you, Vice Mayor. I think taking a look at the streetlights, some of us that are new to the council are just being exposed to this. I know my constituents have been calling my office. One of the biggest concerns I have is to discuss increasing a fee when we still haven't provided the service to everyone that's paying for it. I can't go there. we've got to figure out how to get the service to the people that are actually paying for it. I think that, let me make sure I know the context of your question. When an area adopts the fact that they want streetlights, they are assessed a streetlight property tax. and there may be a delay of a year or more before the street lights appear on their street. And I believe the process is to refund that once a year if the lights had not been installed. That's not correct? Okay. Let me erase all of that. Just take the tape and erase it. And I guess, you know, one of the phone calls that we got in the office yesterday as one of my neighborhoods is quite concerned because they haven't been refunded and they've been requesting the refund since October. And that's a concern. Really, the discussion of increasing a tax when everybody's not getting it is not okay. And may I, if I might, tag on a couple things. Any tax increase discussion would occur in August, correct? Property tax discussion, yes. Property tax. And it was my understanding in one of the documents that I think someone does need to answer the question about refunds because it was my understanding they have been suspended. Is that not true? We're actively still refunding. Funding, typically the time of year that I will start that process is in May. So Council Member Scotchfield, if somebody had contacted your office in October, typically it's May that we would start that process. We have had some discussion as to in the past, effectively past year or two years, where are we getting the money for the refunds, and that's been something that has not been clearly answered to our office. So there is an issue. And that's something that we do have to address. Are you sending checks out in May? Yes, we will be. Where are you getting the money from? That is a good question. Okay. Council Member Stenet. I just want to follow up. That's a serious issue, Council. I thought we had suspended those a year and a half ago when we had this. We found out that the streetlight fund was bankrupt. I don't understand why we're giving refunds when we don't have any money to even turn the lights on in the first place, long less put them in. So something has to change. and our policy of giving some people refunds for that and others not, we need to really sit down and redefine that because the previous administration, I thought, had suspended it until we got this under control. We actually did have a delay as far as refunding, but the actual process has not ended. The other question that came up within recent months were the same question with respect to street sweeping. We have roads, especially in, I think, Tuscany is in your district, where we're not able to get in and provide that service, yet they're still being assessed that urban service fee. But there again, we don't typically refund for not providing that service because we're at the mercy of the developer to provide final service so that we can get in there and provide that service. Well, part of our ordinance and part of the rationale for making that street tax or property tax be paid, regardless of whether we're offering a service from a new neighborhood, is because the installation cost alone has to be recouped somehow. And that property tax for streetlights doesn't even come close to recouping that streetlight for a number of years, for decades. So why are we refunding it is my question. It helps put the capital outlay out there to even put the light in, but yet we're refunded. It makes no sense at all. And I ask the same question, and I agree with that statement as to the reason why we're actually refunding it. I think that's something we need to take up as a policy decision immediately. And, you know, as we're trying to make this decision, too, on how we're going to fund them going forward, the big thing we're missing, as Council Member Scutchfield alluded to, is we can't even install them. We don't even have enough capital to actually put them in neighborhoods right now either, unless turn the meters on and keep them lit. So I'm glad we're having this discussion. But I think, Commissioner O'Mara, we need to have a policy decision. So why are we going to continue refunds when we don't even have money to install them in the first place? Thank you, Vice Mayor. You're welcome. Council Member K. Thank you, Vice Mayor. This is to follow up on the same issue. What order of magnitude are we talking about with these refunds? Is this hundreds of thousands of dollars, half a million, a million, yeah, $895? Typically on the order in the time in my tenure of issuing refunds, it's been between $25,000 to, well, at most it was around $45,000. Our last go-round, it was roughly between $25,000 and $35,000. Okay. When you're looking at a .021 per 100 value per home rate, it's a minimal amount. And we get a number of complaints for people that are just requesting a check that typically is on the order of $9 to $11. So there's a lot of headache and a lot of administrative oversight for something that is, when you look on a per-house basis, is very, very minuscule. Well, I wouldn't want to minimize the inconvenience and the cost, but nonetheless, in terms of the government's budget, $45,000 or $50,000 is not a significant issue. If people are paying for service and they're not getting it, they should get their money back. Thank you. Any other questions? Okay, Mr. O'Meara. Oh, wait. We have one. Council Member Beard. Thank you, Vice Mayor. This is just a case, like we see in many other things that happen around Fayette County, that somewhere along the line we screwed up. And we decided we weren't going to fix it immediately. And it kept on growing and kept on growing and kept on growing until we don't have the capability to fix it. And we can't play ball like that anymore. Our constituents are a little smarter than maybe they used to be. and this one or they missed it on the tax bill but there is getting some some activity now from the telephone calls and things of that sort that they would like to have some movement of some way even if it's to defer and keep a role of what we do owe, and maybe at some point we can fix that. But right now, just say tough luck about your streetlights. It doesn't sell with me, and probably many of my constituents probably would not like that too well. Thank you. Thank you. Council Member Stenet. Vice Mayor, would this be maybe the appropriate time to see how much we have outstanding in terms of installation costs? Do we have that number? I know Jim Woods is here. Just to kind of get a threshold, because these are the people we actually are talking about refunding as well. What's our value? Yeah, we have about 450 lights on the list to do, and it's probably $360,000 for those installations. Repeat that one more time. About 450 street lights on our current list to install, and that would be roughly $360,000 to do that. Okay, now has anyone gone the next step, and once we install those, how much additional tariff we'll pay for those new 400? Because it'll increase the cost. The operational cost will go up. Yeah, do we know how much? The average for the KU bill on average per light is $14.30 per month per light. So here we are again. We can't have the money to install them. Once we install them, our operational costs are going to go up once again. So whatever decision we make today, we're going to have to account for future increase in operating costs once those are installed, too. So I hope the calculations up here take that into effect, maybe. Mr. O'Meara? Thank you, Mr. Woods. I appreciate it. Council Member Henson. Thank you, Vice Mayor. I guess I had a question. When there's a new development and the street lights are not there, they go ahead and put them in that taxing district. I don't know who could answer that, but why not until the lights are installed? it could be addressed in that fashion we've i think typically the course of business has been to go ahead and roll the new developments into the tax district that of those services they will receive once the development is complete then we will issue refunds until which time the street lights are installed and we'll note that so that and actually the refund is based on the number of months that development has been without the their street lights or without that infrastructure on any given year so in some cases it might be three months it might be a full 12 months it's just based on when the urban services process ends and when that neighborhood is supposed to be or slated to receive that service. Do you know what the average time is, the length of time? I mean, is it like they wait until the very last house in the development is built, or how does that work? It's usually, as far as, and Trappett can explain this in more detail if I'm incorrect in this, but I think KU typically waits until the majority of the houses are constructed so that their conduit is not destroyed during the course of their installation. with the larger equipment that's brought in just for the sake of construction. To answer your question, as far as when the development is rolled into a tax district but it's not receiving that service to the point to which they are receiving it, I would say on the order of two to three years is a general average. We definitely need a better way to do either leave them out of that tax district until at least the process began. I think it's actually easier to roll them into the tax district to offer the refund just from an administrative standpoint and also a legal standpoint so far as the urban services process is concerned, whereas we'd have to continuously re-roll houses that have already been entered into a specific tax district on one account and then re-roll them into a new urban services. We could handle it in that fashion, but it's either handling it legislatively we're handling it based on a refund at this point. That's more or less where we lay. Okay. You know, I think it does cause problems if someone's paying for the service and not getting it, and they're calling the council members and they're upset over it. Then, you know, what's easiest for us may not be the best way. Right. And like Council Member Sen was alluding to, this is a policy issue. And from our office, we'll be happy to abide by any policy that you direct us to do. Thank you. Council Member Scutchfield. Thank you, Vice Mayor. This question may not be able to be answered right now. It might be a planning and zoning issue. When we have a new neighborhood that's being built, have we reviewed, is it possible that we can say to the developer, you have to install the streetlights for the neighborhood? I'm sorry, customer. Can you repeat that again as far as the new development aspect? When we have a new development going in that's been put in a tax district that's paying for lights that now may be paying for them for three years without getting the benefit, can we at some point have developers, part of the zoning change or development, they have to put in the streetlights? Again, I think that's a policy issue. If you recall, up until last year, we were on a moratorium for streetlight installation simply because of the issue that we're facing here. Because we were running such a huge deficit, we weren't sure how we were going to pay for that infrastructure. To turn that over to the developer and say within a certain amount of time you have to install, I'm not sure if we can, on behalf of the city, make that request until they know that we're going to have the means to reimburse them for that infrastructure. So I'm not sure if I'm the one that's probably here to answer that question. One of your backup singers has arrived, Mr. Jeffrey Neal. Did you want to speak to this, Jeff? I think Kevin was accurate on his answer to the question. Right now it is current policy that the city go in after the fact and pay for the infrastructure. Basically, the utility companies are paid a certain amount of dollars per light to put the light in, and they don't move in until things are pretty much built up. Anything else, Council Member? I am so sorry to belabor this, Kevin, but May is tomorrow. Correct. And I'm just wondering if there's anyone who could give the council an idea of whether you'll be bringing a budget amendment from the fund balance or how those refunds will be since you're getting ready to make the checks, send the checks. As Bill and I mentioned, as we were crossing paths, the refund would be issued through the Urban Services Fund. Now, whether a budget amendment is required in that regard, in the past, I have not issued a budget amendment to support the refunds that we were distributing. So it would be being, does that mean it will be being borrowed from one of the funds that has money in it? I would. Not from the Streetlight Fund. You said the Urban Services Fund, which is. If I could step in. For FY13, the mayor's proposed budget had a subsidy from the general fund to the urban service fund to cover the costs of the streetlight program. That includes $300,000 for new installations, which is in process. So the FY13 budget has complete funding for the streetlight program. Okay, so prior years there is a point of discussion, but the FY13 had the program fully funded. It was a one-year funding. Now we have proposed an ongoing funding in the proposed mayor's budget in the 1% increase in the franchise fee in 2014. And if I could make one more just clarification, I believe there was some confusion, and I was not confident with my answer. that refunds are given for street lights before the installations come now you pay your taxes october november december the refund happens in may i can help explain that that delay because the tax season doesn't end until may that's when the books are closed for the property tax season and it's now ready to to do the refunds so it's it's not a lack of funding between october when you may have paid your two percent discount and May when the refunds go out, but a matter of when the property tax season is concluded. Okay, so I think that does clarify that one piece. There is money in the budget for the refunds. And traditionally, refund of tax revenue, I don't know the case where a budget amendment was necessary because you're giving back revenue that is basically not yours. Okay. Council Member Farmer. It seems the more we talk about this, the less light there is shed on the subject. So did that answer the question you had asked then? That answered my question about the refunds. But I think there still remains potentially, as far as the council is concerned, the policy question of whether or not between now and our time at work session later on, Would there be the availability for us to see to whom and how much we're talking about here? I think Kevin, I don't know that he would have a list of every taxpayer, but he gave you a range of $25,000 to $45,000 a year. Total. As a total. That's what I didn't get. I thought some entities were receiving potentially that much. And it's about 450 customers. well if we were going to take this up in a policy capacity it wouldn't start at this meeting it would start at a work session but i think that we might want to think about approaching this as part of this multi-level discussion thank you thank you council council member ford thanks vice mayor the question that i have is when are we going to install the 450 street lights that are scheduled? We're actually installing them as fast as we can. We have basically a hit list right here, and it's mapped out. Basically, we can install about 100 lights per month during the installation season. And that's if KU is fully staffed to do their part. Right. So I guess my question, going back to Council Member Scutchfield's initial remark, is that we do have intent and a plan in place to catch up and provide the service to the folks in the respective taxing districts who deserve the service. It's a catch-up game after our moratorium. There was two years where we weren't allowed to install any lights. And so there's some neighborhoods that have been without lights for an extended period of time. But we're going to correct that as soon as we can. We're trying to get to those first. And then, I guess, basically the longer you've waited. And if the neighborhood is ready for the lights, then those are on the priority listing. Thank you, sir. Thanks, Vice Mayor. You're welcome. Any other questions? I think that did help clarify a few things. So thank you. Now, Mr. O'Mara, I think you're still presenting. Yes, I'm on page four. We were talking about funding options for the Streetlight program, and the first option that we discussed was an increase in the dedicated property tax. One of the things that may put some clarity, Back in 1996, the streetlight assessment was 3.11 cents. In the 2003-2004 year, it was rolled back to 2.6 cents. And that was the year that two new property taxes were assessed in Fayette County, one for the extension service and one for soil and water conservation. I believe you can see that those new taxes were going forward, and so some taxes were rolled back so that the net effect to the taxpayer was negligible. The following year, Lex Tran tax was added to the rolls, and then again this tax was rolled back from $0.2.6 to $0.2.1, mitigating some of the total tax increase burden in that year. It's been at $0.2.1 since the 2004-2005 tax season. Mr. O'Mara, can you provide the slide for council members? Yes, I have. It is not in our package. It is not. I added it this morning, so I thought it would give you some context. Yes, it's helpful if you don't mind to email around. Thank you. The second option that was vetted in 10, 11, and 12 was a discussion about replacing the property tax with a streetlight fee. Two options were investigated last year, and I've just brought that slide forward, basically. And that would, to be assessed, a fee to everyone in Fayette County with the argument that everyone in Fayette County benefits from streetlights. Some benefit more than others because of it in their neighborhood, but everyone benefits from those in common areas. It was estimated at $5.52 a year. However, there are additional costs of implementation. Our current property tax and franchise fees have a very high collection rate. Individual assessed fees have a history of having a lower collection rate, so that 552 may have to go up some to compensate for a lower collection rate. And to piggyback on a comment that Council Member Stenet made, it would kind of shift the burden from the commercial to the residential resident because of the differences in property tax assessments. Commercial assessments are higher than the average value of the home. This fee would kind of be a flat fee for all citizens. The other option was looking at a supplemental streetlight tax. Those people that are currently paying the property tax and receiving the neighborhoods if you needed to assess a fee in addition to the property tax. Because that pie is smaller than the total population, that was estimated about $5.89. Again, there are issues there on whether you can mix on top of a dedicated property tax a dedicated fee. There are issues about whether you can assess a fee for someone who says, I don't drive on any street that has a streetlight. So there's some controversy as to the viability of assessing a streetlight fee, but these were the numbers we kind of crunched through last year. And the third option that we talked about at the beginning was a supplement from the general fund, and that could either be just an appropriation, an additional expense to the general fund of approximately $2.5 million this year. That would mean that we would have to reduce some other costs in the general fund budget by that amount from whatever part of the total budget that we wished. I just gave some examples there of the larger divisions. And then 3B, which is what is being proposed by the administration, is a 1% increase in the electric and gas franchise fee. And the reason it's electric and gas is those are the ones that have come up for renewal. The water does not come up until, I think, 2015. Depending on the size of your utility bill, whether your total utility bill averages $100 or $200, That would be about $12 to $24 a year. If you had an average of a $100 utility bill for gas and electric, you would pay an extra $1 a month. If your average was $200, you would pay an average of $2 extra a month. And this would be the concept of the general fund is subsidizing the streetlight program each year from now on for the common area streetlights that are beneficial to all residents of the community. And that is basically the review of the funding options. I would remind that we are looking at anticipated tariff increases because of the higher cost of using coal. the EPA requirements and everything. So it is anticipated that the tariffs for electric will continue to rise, probably in excess of that 4%, which is the cap in the property tax. The one thing about using the franchise fee is when the tariff goes up, since this is assessed on gross income, the income that the government receives from that bill also rises. So there would be some embedded escalator in this income to the general fund that is somewhat matched to the increased cost of the streetlight program. And then I also would remind you that all these estimates did include a $300,000 per year estimate of capital expansions to answer your question of how much the total cost would go up if we're averaging that, it's about $70,000, $75,000 a year that our streetlight program tariff cost would go up due to expanded streetlights. Would you say that number again? $70,000, $75,000 per year in increased utility costs to support the additional streetlights. Questions, Council Members? I see none. Should I say great? Thank you so much, Mr. O'Meara. I do think, not to spring this on David Barbary, but it might be helpful. Council members also have in their packet the legal opinions dating back from 1996, 1995, and 2011. And I just wondered if you wanted to add any clarification to the legal opinions of streetlight funding. Number one on Bill's chart that he had up a minute ago on the fees, that would be a legal problem. It was probably unconstitutional, the idea of doing a flat fee across Fayette County. Okay. That was kind of a non-starter. There's some possibility, although I don't know that there's any precedent for doing this in Kentucky, of doing a hybrid-type system like we do for garbage. But we'd have to be able to pick out what part of the street light you were funding out of that fee, and it would only be applied to the people that are in the tax district. And that would be something that would be legally novel in its concept. I don't think it's ever been done before. In Kentucky or in the world? I don't know that anyone's really studied the different modeling outside of Kentucky, but I'm fairly confident it has not been done in Kentucky. Okay. Council members, if you had an opportunity to read the legal opinions, did you want to ask anything of Mr. Barbary while he's here? Council Member Stennett. Thank you, Vice Mayor. David, I don't know if you can answer this or maybe Bill, But in the fee analysis of doing away with the tax totally, what would be that process to do away with the property tax since we only set those once a year? I think everyone needs to understand this. That would be unique as well because I don't think we've ever done it before. We've had this discussion. I think it's suggested that the council would control that process if we ever came about to abolishing an entire type of tax or district. So I think that would be within your control. and it would probably be like you suggested. It would be at the same time we were creating districts. Now, our problem legally has always been individuals opting out versus, I mean, if you all made a decision you no longer wanted to fund the urban services area and just wanted to do away with it and you pay for it out of the general fund, I think that's probably within your powers to do that. We just have to decide the mechanism for you all to go ahead and do something like that. But that would only be in August when we actually set the property taxes. Is it the only time we really could abolish a property tax? Well, the tax, Bill can correct me if I'm wrong, but I think the tax here actually runs January 1st. So, yes, it would likely be in that same time frame. It would be effective. Right, it would be effective later, but our action would have to take place when we're setting the other taxes. Yes. Okay, and then Commissioner O'Mara, in the fee structure, did you calculate in there a collection rate that if we didn't sustain or you said it would be hard to collect? I understand the issue there, but we did, yes, you don't have to answer specifically a number. That's not what I'm looking for, but did you calculate in that $5 and change some attitude, I guess, in terms of if we don't collect enough? I actually didn't dig deep enough to remind myself of all the assumptions in that. I do know that when we were doing that analysis a year plus ago, that discussion went on. I'm not sure what percentage was used in that analysis. I'm nervous that it wasn't low enough. I understand, as am I. That's why I'm asking the question, so thank you for that. And then if I could practice without a license. You're on camera. I think the discussion we had just a moment ago is probably on point, that the major action is when the council sets the rate, but I think the taxing districts are in effect January 1st of every year. So the actual, I mean, if you wanted to pass a zero rate, that would put it into effect this year, but then I think there would be maybe some research needed to actually abolish it that would be effective for the next January one. Right. So I think it might be a two-part. Yeah, I just want to make sure when we can actually lower it, everyone understands it's once a year and not we can't just do it in May. Right. One other tidbit, and I'll leave my colleagues with this comment. And we had a fund balance discussion, ironically, and I think the majority of the council voted to put $2.7 million more into savings. But yet in the same breath, we're talking about increasing taxes on our city by 1% to fund $2.5 million for streetlights. I think there's some really thought needs to be given to that because if we're going to plan on raising taxes, when we have cash that can pay for this, we need to have a serious conversation about our priorities. Thank you, Vice Mayor. And Councilmember Ford. Thank you, Vice Mayor. However, to that same note, and not to be argumentative, just to the point that Councilmember Stenard has made, a fund balance to me represents one-time money. And it appears to be that the recommendation that Melissa and Bill have provided for us talks about how we build the fiscal 2014 budget, and it's to raise the franchise by 1%. My question is, what do we do next year and what do we do the year after that? The imbalance still remains, it seems to me, in regards to streetlight funding. If there's going to be, is that gap of... I think one of the reasons they suggested the franchise fee is that it would be permanent in its nature and it would be the same increase, and I think that they would decide to appropriate it every year to cover the sharp wall. Once you set the franchise fee, I mean, you could technically at some point or legally you could set it back, but I think their idea is you'd raise it to 4% and there would be an extra $3.5 to $4.5 million a year going forward that would go into the general fund and you could use that money to pay for something like this. The proposal is, I'll say it in the same concept but in different words, The proposal is to permanently have a funding source from the general fund, and that is the 1% increase in the franchise fee. And as I alluded to it, as tariffs go up, that kind of grows into the general fund. And the general fund adopts a policy of subsidizing this program for the common area funds. And it's very similar to the general fund pays, I don't know how much, but it's north of a million dollars a year for fire hydrant fees. So it's a utility cost that the general fund incurs for the benefit of all of Fayette County. Same concept in my mind that this is. We have dedicated funds for neighborhood, local neighborhood streetlights. We have general fund funding for those common area in the major arteries. And so it's embedded into our utility costs each year from now on. So this is considered to be a permanent funding source. Will it be able to keep up, Bill, do you think? I mean, because we're talking about expansions. We're talking about increased operational costs. The tariff is going to go up, as you mentioned. my fear is I'm concerned about the subsidy I think subsidy has a place I think general fund subsidy has a place but I also feel that if one we implement the service and provide the service as we should we have to start there we have to get street lights to where they should be as soon as we can but then I'm also not opposed to adequately putting in place the revenue source to pay for those services. And I would contend that most residents, if they are provided the service, wouldn't be necessarily adverse to that as well. If you could go back to page five of your slide. Sure. It seems like to me that we robbed Peter to pay Paul when we rolled back certain taxes. And we roll those taxes back, it seems to me, to be revenue neutral, not to have a so-called increase on tax. So when we brought on, I think you mentioned the soil conservation, and when we brought on the LexTrant dedicated source, is that we rolled back a tax to keep the tax rate or the out-of-pocket cost to citizens neutral. However, it appears that we've added services in it. I think we have to be very careful about the pension to roll back taxes, because I think that we ended up in holes like where we are right now. Just my commentary. Thanks, Bill. Thanks, Vice Mayor. Amy, you can feel free to respond if you wish. Well, Council Member, I hear what you're saying, and there are good points to lots of different approaches. I have a revenue background, so if I just have my revenue hat, I would say you need to do both. Those neighborhood utility costs continue to grow, And so adopting a 4% increase in your streetlight property tax each year is just trying to keep up with that increased tariffs for the neighborhood section instead of asking for the general fund to fund the common areas as well as all future tax or rate increases for the entire program. So from a pure revenue management, I would say that it's good governance to consider doing both. one for the common area and one for the neighborhood dedicated. To say that it can all be done with property taxes, I have a hesitation for that. I have a reference slide that I'd like to show you, and I'm going to play Chris Bollinger from UK Economics. But if you will look at the blue is the revenue, and the light green is the expenses, and I believe the 2008 expense is kind of anomaly. If you will look at the rate of increase that expenses are going, do you see the slope of that line? It is greater than the rate of increase in the property tax revenue. Even doing a 4% increase each year, I think we will always be challenged to keep up with the tariff increases and cost of service for streetlights. So a dedicated property tax for those people receiving it is a good direct link to services provided and costs of taxes. But because of the nature of utility costs and the fact that we have a lot of common area, I'm not sure that that's a long-term fix for this program. So if that makes any sense. Thanks, Bill. Thanks, Vice Mayor. You're welcome. Councilmember Lawless hasn't spoken yet. Councilmember Lawless? Just quickly, I think also that one thing that is, and I've said this before, is an issue with the increase is the cost of the new light poles and transitioning them to this new LED or whatever they call it technology in the streetlights, just FYI, for your information, not fiscal year. Council members, do you have any objection to allowing Council Member Stenet to speak? I think you've spoken twice. You've spoken a lot. Our rule is speak twice, but I see no objection. Council Member Stenet? Thank you, Vice Mayor. Mr. Ryan, I want to get back, and since we're putting all of our cards on the table, the historical significance of that chart that you showed on page 5. Keep in mind, not everyone pays streetlight tax, so it wasn't tax neutral. Some people actually had a tax increase in those years. And so the council at the time may have been or may not have been aware of that, but you had a lot of people in our community that had a tax increase. And I'm glad you said what you said about the property tax, because no matter what this council raises today, if we decide to do that, to, we'll never keep up with it because utility rates rise quicker than our property tax increases. It's just a known fact. We've seen that for years. So I don't think the reason why I mentioned using fund balance is because until we continue to keep supplementing from general fund, until we continue to change either the franchise fee or go to a fee itself, we're never going to be ahead of the game, ever. And I think we need to have more serious debate on do we keep subsidizing from general fund or do you raise a franchise fee today? because, again, not everyone has electric and gas. Some people have all electric and don't pay a gas bill. And the discussion comes up, I think you mentioned the water. Will we look at water next year and do the same thing, too? I don't know. That's a question we're going to have to analyze. But the least intrusive amount on the way to do this is a fee. You're talking $12 to $24 for a franchise fee. That's almost double what a flat fee would be for everybody. That's a bigger burden on our taxpayers, and that's where I'd get uncomfortable with the franchise option. I think it's the most expensive to taxpayers to do it that way. I know the property tax route is the cheapest way, but also we'll never keep up with it. Any thoughts on that, Mr. O'Mara? I know our Lexer bill is the crux to some of this. I personally like the franchise option. I think $1 a month to $2 a month is a reasonable request for the service that's being provided. I think the streetlights provide a great service to the public on safety at multiple levels, and we need to pay our electric bill. So I personally think the franchise fee is the best of the three options. I'm not a fan of a dedicated fee for different reasons than law has. And that is the collection. And I feel that if you ask, you have another tax theory of asking the people that are good citizens to pay more because people that aren't necessarily good with their actions refuse to pay has an issue. and the utility companies have a very motivating way to make sure you're current on your bills well collection is definitely important that's why it's a whole nother conversation we probably need to have as well on all of our collections but for years this fund has been funded and subsidized from other urban service funds we all know that we all can look at this chart and know we haven't kept up since 04 so where does that difference came from and you with your hard work Commissioner Driscoll and Ryan Barrow, we've uncovered and separated, mainly you're doing, separated three funds. Now we know where the money was really coming from. And until then, we didn't know. And so this is not something that happened overnight, but I think it takes a lot of thought. And I don't disagree with your collection theory. I appreciate you saying that. But when you talk about a franchise, a lot of people who are paying that franchise fee may not have streetlights. So it goes back to our policy decision is if you're not getting the service, you're still paying for it. one way or another, whether it comes from general fund or franchise fee, because everyone has to have electric, pretty much. And again, the theory is that everyone does benefit from some streetlights, not necessarily outside their bedroom door, but whether they're going to work, going shopping, going to visit and using the major arteries, New Circle Road, all of that, there are safety benefits, and we are furnishing that to our citizens and visitors to Fayette County. Thus my question, why do we give refunds if everything you just said is true? I understand we are. Yeah. So they're still betting in front of them, but we're giving their money back. Another issue. Thank you, Vice Mayor. We have a lot of issues surrounding this. Council Member Kay. Thank you, Vice Mayor. I think this slide and the previous slide showing the two lines diverging essentially indicate what we've known about this and other things that government does, and that is that we're not raising appropriate revenue for the service that we are providing. And you can not raise a rate or you can lower a rate and you can pretend somehow that that's not going to cost any money, but when we say we take it out of the general fund to put it into that fund, that means that something else that we want to fund or need to fund is not getting funded. That money doesn't come from nowhere. So whatever else we do, I would like to see this council be clearer about where the revenue is coming from, where it's going to, and that we provide sufficient revenue to meet the need. We've had deficits in various areas. because Council is going to get tired of hearing me say this, but we don't have adequate funds for fleet replacement. We don't have adequate funds for building maintenance. We don't have adequate funds for park maintenance. We pretend we do. We put a budget together, but we don't. And until we face that question of fully funding what we're really trying to provide to our citizens, we'll continue to have these kinds of issues. Thank you, Vice Mayor. Welcome. Any other questions, comments? I see none. I thank you, Commissioner O'Mara and Acting Director Luker, David Barbary, Jim Woods, Jeffrey Neal, everybody who contributed to this. And, Councilmembers, I just wanted to remind you, and then we do have another Councilmember, The next Committee of the Whole for Budget, I believe, is May 21st when we start our links report outs. We've been sort of in discovery so far. And I've been in conversation with our council administrator, and so the first links that meet will be the first links to report out. We'll kind of go in that order exactly. and then I would ask if Paul or Stacy, you could, in years past, you've kind of done an update on the list of meetings and highlighted where we are in the scheme of Committee of the Whole and all of those, if you can maybe do that for Councilmembers and put it out by e-mail, it would be helpful. Now, Councilmember Ford. Thank you, Vice Mayor. Not to prolong the meeting, but just trying to, just because I'm just in my third year now, kind of getting my bearings as they go to General Fund and Urban Services Fund. Bill, I have a question for your help. The whole gist of this is that street lights is a component of the Urban Services Fund. and our discussion today as it pertains to the budget is a policy question in regards to the need and the reality that we need assistance and subsidy from the general fund to cover this service. That's kind of where we are right now. Is that basically? That is the proposal that the administration has brought forward. And what that says to me, though, is, however, that is it fair to say that historically, and I think Council Member Sennett just alluded to it, is that historically, this service has been subsidized, but the subsidy was contained within the Urban Services Fund. And now the Urban Services Fund can no longer afford to subsidize the specific activity or service of streetlights. and now we're resorting back to the general services fund. Is that? I would almost agree. It's one step further than can afford. It's not appropriate. Okay, that's right. Okay, because of the segregation of the revenues collected. And then, okay, I'm coming up to speed. The last question I had in regards to if it is a reality now that we have to find another source, and right now our focus is on the general fund, the question of equity for the public good. You know, property tax, we have our constraints with House Bill 44 and being able to keep up and raise property tax. And then there's equity that it would be an overburdening in a lot of ways to business and to those folks who the property tax actually applies to, I believe. The other flip side of the coin is that if we went to increase the utility, that opens the pool of folks who can contribute to the revenue source. Is that what we will have to decide in our deliberations about the appropriateness of? That is one component. The franchise fee is assessed on all utility users, regardless of whether it's a governmental, not-for-profit, for-profit, individual business. Your tax filing status does not apply in regards to the utility franchise. If you received the service, you would then pay into the increase and help us generate additional revenue. That's correct. So it's a larger pie. Right. The property tax is very focused and very dedicated. and I guess the argument that I've been putting forth is that it was originally thought that it would be only for those people who receive the light, which would be a neighborhood light, but we have many more lights than just neighborhood lights, and that's where the common good comes through, where all citizens benefit. Therefore, a subsidy from the general fund has merit for consideration. And the last question I had is in regards to House Bill 44. I'm not certain. Have we utilized or have we taken advantage of House Bill 44 in times past? Meaning, I believe it's the compensating rate, correct me if I'm wrong. Have we actually gone up close to that 4% in times past that's allowable by the statute? I've been here 17 years, haven't written down every one of them. So I'm going by personal memory, but Lexington has been very reticent to ever raise a property tax. Even more than last year, many times it's gone back a hundredth of a penny or something. And so I won't say that it's never looked at the compensating, but very rarely has there been a property tax increase over the rates that the council is primarily responsible for. So never a 4% that I can think of in my memory. I wouldn't, just me personally, I know I'm running out of time, I don't sit here now advocating to go above the 4% at all, but I am sitting here saying that we may need to consider, I think you mentioned it earlier, looking at both revenue sources, and I think that we may need to take a closer look at what House Bill 44 offers us and other municipalities across the state in regards to revenue generation. Thank you. Thank you, Bill. Thank you, Vice Mayor. You're welcome. And just a comment. Council Member Kaye and I were having a sidebar. The Board of Education routinely for the last several years takes the 4% and shows the public how they are responsibly using it, building new schools, et cetera. I don't know if they take any criticism. They don't ever take any criticism in the media. They may get lots of emails. I don't know the answer to that. But I think that what they have done is they have shown the public that they have used those monies responsibly when they have taken it up these last few years. I've kind of forgotten now how many it is. Is it three or four? I think they have a pretty constant history of taking 4% except maybe 08 or 09. and then they also took advantage of another opportunity to have an additional tax for capital only, and they were successful at introducing and having that go into place. And I will say just anecdotally, council members have received emails about why we increased the school tax, and we've referred folks to the school board. And many local governments are in control outside of Kentucky. the local school board. So the Chicago's, those type of things, that is part of the local council, but not in Kentucky. Well, thank you again very much. We appreciate it. And council members, there is no more business to come before us today, so do I hear a motion to adjourn? All right. All those in favor, say aye. Aye. Anybody opposed? We are adjourned. Thank you.