We have actually two sessions today, two meetings. One is a special meeting of the Council, and the second is a work session. But even before that, the Vice Mayor just shared with me that last week at the work session, and there was planned to be a special recognition of some parks employees that we weren't able to get to. So we thought we would just do that before we called to order any meeting, and that way those folks from our parks division won't have to stay around with us all afternoon. How about that? So, Vice Mayor, why don't you join me down at the podium? So the Vice Mayor is going to make these introductions, and I'm going to shake hands. Is that what I'm going to do? We're going to share. This is really big news, and we were going to do it last week. And if you recall last Tuesday, we were quite busy with about eight and a half hours of meetings. And you will remember that on May the 7th, the mayor is abandoning me already. On May the 7th, the Division of Parks and Recreation brought some folks here to say, we are having our visit for reaccreditation. And this is a big deal, and we have learned that our Division of Parks and Recreation was found to be in compliance with all 144 standards of the Commission on Accreditation of Parks and Recreation agencies. And so in October, in Houston, Texas, they will be recommended for full reaccreditation. And today there are 108 divisions of Parks and Recreation across the country who are accredited. So this is a big deal. And the mayor and I wanted to congratulate Parks and ask Jerry Hancock to come up here to the podium and recognize whomever he wishes. Thank you. Yeah, we're going to take a picture. Thank you, Mayor, Vice Mayor. I brought four people with me today that represent all of Parks and Recreation. I'd like to recognize them. This is a bit of a surprise to them. We've got an award recognizing their efforts and the efforts of the many people that work for them. First and foremost, our Deputy Director of Recreation, Evelyn Bologna. Would you join us, please, Evelyn? Yeah, I would like to join you. Secondly, Brian Rogers, our Enterprise Deputy Director. Brian? Chris Cooperrider, our Deputy Director of Parks, is here. Chris? And Eric Howard is here. Eric was our CAPRA accreditation process manager, the guy that actually did all the work. So Eric Howard. And last but not least, not able to be with us today is a fellow named Mark Morgan, who helped in the process as well. So these four people did a lot of work. Thank you. Photo, folks. Ready? One, two, three, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, three, four, four, three, four, four, four, four, four, four, four, four, four, four, four, five, four, five, four, five, four, five, four, five, five, six All right. Okay. Thank you all. And now we can move to the council meeting. And Madam Clerk, when you're ready. We have first, you're looking at me like I'm, am I missing something? I can do the roll call if you'd like. Yeah, I was going to ask for the roll call. This is a meeting of the Council. The work session meeting will follow this meeting. So, Madam Clerk, will you please call the roll? Yes, sir. Mr. Clark? I'm here. Mr. Ellinger? Here. Mr. Farmer? Mr. Ford? Here. Ms. Gorton? Here. Ms. Henson? Here. Mr. Kay? Here. Mr. Lane? Here. Ms. Lawless? Here. Ms. Mazzotti? Here. Mr. Myers? Here. Ms. Scutchfield? Here. Mr. Stennett? Yes, ma'am. Ms. Akers? Yes. And Mr. Beard? Present. Here. Yes. Thank you. All right. Thank you, Madam Clerk. All right. That allows us to move to the first reading of the budget ordinance. Madam Clerk, when you're ready. Okay. Can I ask a question? Council Member Ellinger? Thank you, Mayor. Would this be the the proper time, I think, to make a motion because when we were going through our budget deliberations, we made the recommendation through our counseling but it never made it to the list for some reason and it was let through the cracks somehow. But we had made the recommendation for $34,740 for the Human Rights Commission and I want to make sure that that is put into this budget. I'd rather do it now than have a budget amendment down the road. So I would make a motion that we put $34,740 into the Human Rights Commission. Second. Motion by Council Member Ellinger, seconded by Council Member Myers. Is there any discussion on the motion? All right. Hearing none, then we can take a vote. All in favor, please say aye. Aye. Opposed, no. Motion carries. All right. Thank you, Council Member Ellinger. Madam Clerk. Ordinance number one, an ordinance appropriating the revenues, expenditures, expenses, and enter fund transfers of the General Services District Fund, the Tenant Relocation Fund, the Full Urban Services District Fund, the Police Confiscated Federal Fund, the Police Confiscated State Fund, the Public Safety Fund, the Municipal Aid Program Fund, the County Road Aid Program Fund, the Mineral Severance Fund, the Coal Severance Fund, the Miscellaneous Special Revenue Fund, the Police Confiscated Treasury Fund, the FY 2014 Bond Projects Fund, the Sanitary Sewer Revenue and Operating Fund, the Sanitary Sewer Construction Fund, the Lexington-Fade Urban County Government Public Facilities Corporation General Fund, the Lexington-Fade Urban County Government General Public Facilities Corporation's Parks Projects Fund, the Water Quality Management Fund, the Landfill Fund, the Right-of-Way Program Fund, the Extended School Program Fund, the Prisoner's Account Fund, the Enhanced 911 Fund, the Lexington-Fade Irving County Government Public Library Corporation Fund, the City Employees Pension Fund, the Police and Fire Retirement Fund of the Lexington-Fade Irving County Government, the Medical Insurance Fund, the Property and Casualty Claims Fund, and the Reallocation of Bond Projects Fund. On a divisional level by four control levels for the fiscal year ending June 30, 2014, for the Lexington-Fade Irving County Government and its agencies and instrumentalities, approving and adopting the Capital Improvement Program for fiscal years 2014 through 2019 as a portion of the fiscal year 2014 annual capital improvements budget and approving funding for the Lexington-Faylor County Tourist and Convention Commission from the transient room tax, said funding to equal 99.5% of the revenue from the tax. Thanks. Thank you, Madam Clerk. All right. Commissioner, I was going to say Commissioner O'Meara is here to speak to a possible walk-on. Council Member Senate? I was going to go ahead and provide the walk-on so we can have a discussion. I'm sure there will be a lot of questions and comments. I'll give us the segues. The list will be number two under first reading of ordinances. I move that a budget amendment ordinance be added to today's council meeting docket to provide $3.2 million for the police and fire pension fund based on the rate approved at the June 2013 police and fire pension board meeting. The additional funds will come from contingency funds of $1.975 million and fund balance of $1.225 million. So moved. That's by Council Member Stennett, seconded by Council Member Lawless. Is there any discussion on the motion? All right. Council Member Farmer. So what are the circumstances that bring us this budget amendment at this time? That allows Mr. O'Mara to come to the podium. Mr. Commissioner. Thank you. Last Wednesday morning, after a very productive Tuesday in this chamber, the Police and Fire Pension Board met, and they received an updated actuarial report from their actuaries that computed the employer portion that needs to be put into the Police and Fire Pension for this year. And the rate was adopted by the Police and Fire Pension Board as put out by statute. It's .3558. On Thursday, we went to start the process of implementing that so that we would be in compliance with the employer required contribution by year end next Friday. And in looking at the numbers, the amount was larger than what we expected. and after doing some research to make sure that our numbers were correct, we then shifted to doing research on why it might be larger than we expected. We got in touch with the actuaries at their home, actually, and discussed their recalculation and found that we're in the transition year. 2013, when it began, was before pension reform. within fiscal year 2013, we did have pension reform legislation that was passed by the state legislature. And therefore, some of that reform is in place prior to July 1. But the entire components of the pension reform go into effect July 1, 2013, the first day of the next fiscal year. So this actuarial calculation has part of that pension reform reflected in it, but not all of that because it is not yet in place. And an example of that would be July 1, the employee portion contribution will change from 11% to 12%. Also July 1, there will be a new set of data. my understanding of the actuary process is they base everything on a single point in time, kind of like a balance sheet. Where are we at this single point in time? And July 1st of the fiscal year is the time they do that. So they will do that again, effective with the staffing July 1 of 2013. But their calculations for this calculation have to be based on last July 1st. So not only do we have, as he put it, 18 levers moving all at the same time in an actuarial calculation, but we also have had changes in payroll from last July to this point in time. So between part of the reform being in place, part of it not, and the fact that we actually have more people on payroll at this point than we did last July 1, it results in a $22.2 million obligation to meet the employer portion of our contribution for this fiscal year. That's an excellent answer. It may not make me happy, but it's an excellent answer. I guess in the mayor and administration work, she is a consensus. I don't know if your microphone is on. I'm fading out today. All right. Was there such a nuance in this that the outside counsel and the outside actuarial didn't take this into consideration? Well, I think we have, when we did all of our analysis, it was reflecting pension reform. And that would reflect everything that's in effect July 1 going forward. It was also based on the data that they had, which was last July 1. So our projections and everything reflect total reform, all components of the 18 levers moving all around, as well as based on that point in time. So that is my understanding of why we have a different answer than we originally anticipated for this transition year. So you're saying this is just an answer for this transition year and not something that is part of what could be an ongoing 20-year miscalculation of some sort? Well, good question. And we had angst over that and talked to the actuary because my concern was what about 2014's budget? Well, the 2014 budget has a $20 million amount in it, not 16.2 or 19. Oh, it says 20. Which is our new statutorily required minimum payment. And asking the actuary, is that now a number that is outdated or whatever? And after discussing it with him, we need to see all those 18 levers moving. He kept using that analogy, so I'm capturing it too because I'm not an actuary and I don't know what those 18 levers are. But that $20 million is the best number we have at this time. Now, I would put this into context. Prior to reform, we had a projection of $29 million for this year, something north of $35 million next year and growing. We looked at a total reform package where both sides were looking for promises kept. We wanted some stability and expectation, and we wanted it to be viable. They wanted it to be a defined benefit plan and be viable. And so we've accomplished that. So we're not talking about $29 or $37 million. We're talking about $20 million. and this year the calculation comes out at 22.2. I don't want to discount that it's more than what we had hoped, but the variance, we have gotten a lot smaller. So if this were to happen next year, your gut is it would be for less than this variance this year. I'm not ready to make any predictions. What I'm saying is I quizzed the actuary about what is a best guess for next year, and he said there's too many variables for me to guess. I have to actually do it, and I have to wait until I go through that process. So without a better number, I don't have another number to present to you for 2014. Thank you. Councilman Rehlinger. Thank you, Mayor. So we're looking at fiscal year 13 right now, going from 19 to 22.2, so 3.2 whole is what we're trying to fill. Yes, sir. And where's the 3.2 coming from? How was that broken down? Okay. Okay. Within the contingency department in the general fund, we have the correct amount is in the motion, $1,975,000 of unused contingency dollars. Part of that was when we passed the budget last year. We weren't sure what our unemployment rate was going to be assessed by the state, and so we had a placeholder there in case that came back at a disappointing number for us. Other components of that are our best guess of what's going to cost when retirements come through, and we have payouts in January. So we have this $1,975,000 that has not been used to date in the payroll contingency. So that would leave $1,225,000 to be found somewhere else. It is our recommendation that we look to fiscal year 13 fund balance. As we've been reporting to budget and finance, that our expenses have been running less than budget and that I think that we have the capacity to pay that out of this year's what I call running rate or expense variance from budget. And I guess to follow up with Council Member Farmer, we can't really estimate. What do we have put in for fiscal year 14? $20 million. $20 million. And at this point, I guess it determines, and I guess where the issue came, we had more police and fire than we thought we would at this time. Is that where we had more people employed? because we added new classes? We've added new classes this year, yes, sir. So depending on where we stand here compared to next year, it will... Well, you have market rate, what type of return they're going to get versus the actuarial perception, what is the total headcount, the addition of 1% from the employee. All of those are identifiable moving targets that will go into next year's calculation. Okay. Thank you very much. Council Member Stennett. Thank you, Mayor. Mr. Mayor, so when would this calculation be done for fiscal year 14 in November? We asked them that, and they said it's usually the end of November is when they will have that completed and issued. So we'll be almost halfway through our fiscal year, and we could have an uptick again. So what is our contingency plan then? What do we have built in the budget that we're actually approving right now on Thursday night? Should that happen? Well, within the 2014 budget, we're looking at a fund balance in the $700,000 range. So we would have to look at what our running rate was through November, whether we're trending ahead or not. We would also have to look at our ending fund balance from the prior year. if this looks like we need more money to be allocated to our commitment. So when will we ever get ahead? So we get a snapshot prior to the mayor introducing the budget and the process we just went through. Will we ever be in a position that we'll be ahead of the game? We'll know what that number is prior to passing a budget versus after the fact? When do we catch up? I'm not the expert, so I hesitate in giving you a soft answer because I'm not 100% sure. But it's really my understanding that the actuarial report that we get in November is to be adopted to be for the next July 1 so that it is ahead of time. But I may not be correct there. Right. So we don't have one, though, for FY14. So can they do both at the same time and use that? Well, we had one for FY13. we asked, the board asked for it to be recomputed because the total reform was passed. So it's unusual for them to recalculate it. But they did because the entire pension reform was put into effect, and it shouldn't be trying to fund $290 million. It should be to try to fund the $160 million. So if we get the answer in November, though, would that be for FY14 or 15? Well, yes. Both. Because what the board did last Wednesday was they adopted the actuarial percentage for next year, subject to this actuarial report because we're in this transition period. They reserved the right to look and see what this report was for setting the 14 rate. Yeah, I mean, I think, you know, when the statute was passed, we all were under a lot of it. A lot of us were under the impression it was $20 million, but the way it's worded, it's a minimum of $20 million. So in some years it could be more than $20 million we owe. In some years it could be less. We don't get a refund if it's less. We just still pay the $20 million we get ahead of the game. So when we get ahead of the game in those years that maybe it's $18 million, does that $2 million count? Well, next year if it's $22 million we break even. How do we account for that? Let me give you a layman's answer because I'm not an actuary. but part of the statute is that there is an actuarial report done every year. Prior, I think it was every other year. So every year, we get a recalculation. So if we put in more, the returns in the market are more, then yes, that recalculation would take those things into effect, is my understanding. But we couldn't put in ever less than $20 million. We've got to put a minimum of $20 million based on what we agreed to. That's correct. Okay. And just to remind you, we're not paying just the interest now. We're paying interest and principal with this calculation. Well, I'd encourage my colleagues, in August, when we have the discussion on the 2012 fund balance, once again, it may be a good idea to keep some of that in cash, given that we don't know the uncertainty in November. And it could be a positive number. It could be a negative number. But let's hope for the best. So thank you, Mayor. Thank you, Council Member Stanton. Council Member Massadi. Thank you, Mayor. Bill, if you wouldn't mind, would you explain this contingency fund? You alluded that it was a payroll contingency fund. Could you just give me some more information on that, please? Sure. There is a contingency department or division, and things like the 27th payroll, in this case a placeholder in case our unemployment rate went up and we had to pay more than what was embedded into our payroll, things for payout for sick pay, payout for, I'm not in HR, so all the calculations and the additional payments when someone retires and someone leaves. We don't know how many people are going to retire or leave. We don't know how senior they are. We don't know what their accrued benefits are, so we have placeholders to compensate for that. And those are the different line items that are in this contingency division. Typically, what kind of fund do we keep? I mean, what's the amount we keep in that? What kind of balance? Between $4 million and $6 million. So we would pull almost two out of that for this year, but that's an item that you would also have for next year. That's a recurring balance that you always keep. It is, and to be very upfront, We tried everything we could to come up with a lean and mean budget. And so those placeholders that were unique to last year, we pulled them. So we're at the $4 million going in the FY14 budget. Well, I was wondering, do we short ourselves because of that? Well, have you ever heard the saying, rock in a hard place? Yes. If as a finance person and I, quote, pad the budget, then I incur criticism. And if I don't predict right on the contingencies, then I have not budgeted accurately. And so there is a play there as to the perception by the council as well as the perception of good governance, of what is too much and what is too little. and we have to weigh those every year when we put the budget together. Okay. Thank you very much. Council Member Lane. Commissioner, welcome aboard. Thank you, sir. That's a good way to start out your new fiscal year. I just asked a very general question. I think you touched on it about it might be this, it might be that. But is your intuitive feeling, based on what you know, that we will have a surplus at the end of fiscal 13 and we'll be able to manage most of the additional costs without too much problem? I do feel that. I'm not prepared to say what that balance is. As you can see, two weeks ago I didn't see this coming, so I don't know what other events might be around the next corner. We still have to close the books. We still have to make sure that our medical insurance fund is good. We have to look at our risk fund as good. We have actuarial reports that have to be done, and we will not get until the August, September, and that's why I asked Council to give me until October 1 to give you an estimate of fund balance for FY13. Okay. All right. Thank you, and good luck. Thank you. I'll take all I can get. That was generous. Thank you, Mr. Lane. Thank you, sir. Anybody else wish to speak to the motion? Anybody else wish to speak to the motion? All right. If not, then we can take a vote on the motion. All in favor of the motion, please indicate by saying aye. Opposed, no. Motion carries. Thank you, Mr. Romero. All right. We're going ahead with our agenda. Are there any announcements? Pardon? Oh. Mr. Oh, first reading. We did get it. Oh, first reading on this motion, yes. Right, right, right, right. Thank you, Council Member Stenet. Madam Clerk, will you give us a first read on the motion, please? This is Ordinance No. 2 for first reading, an ordinance amending certain of the budgets of the Lexington-Fayt-Irban County Government to reflect current requirements for funds in the amount of $3,200,000 for the Police and Fire Pension Fund based on the rate approved at the June 2013 Police and Fire Pension Board meeting in appropriating and reappropriating funds, Schedule No. 57. Thank you. All right. Thank you, Madam Clerk. That allows us to move to announcements. Are there any announcements for this special meeting? All right. Hearing none, we can move to public comments. Are there any public comments? All right. Hearing none, then I'll ask for a motion to adjourn. the special meeting. Second. Motion by Council Member Kaye, second by Vice Mayor Gordon. If there are no objections, we will adjourn the special council meeting and then move on to the work session. And Mayor, if you don't mind giving us a couple of minutes to transition, please. Thank you so much. We'll take a break then for five minutes. Did you say? A couple of minutes. We'll take a five-minute break.