Music guitar solo guitar solo Thank you. Good afternoon. We do have a quorum. It's somewhat scattered, but we do have one. It's in the room somewhere. First issue on today, we have, actually we need to explain something here. We have two agendas. And one has the courthouse update on it, but not a lot of data behind it. and the original has got all the data for all the other issues, the other five issues. We have a summary from the October 15, 2013 meeting, and if you would review that, and I will accept a motion at that time. Move to accept. Second. Okay, we have a motion and a second. All in favor? Aye. Aye. Any opposed for any reason? Good. Thank you all. Council Member Henson, are you going to handle the food truck issue? Is there going to be a food truck issue? What's going on with that? It was my understanding that this will be heard at a special community. We're going to do that. In fact, we had that set up for February, but I thought maybe there was something. Some people may have showed up that we didn't get to. If there's anyone here, I guess, that would want to speak on this topic. Is that the case? Do we have anybody from there? Yes. Come forward. Give your name and address, please. I want you to come at the process of the case. Good afternoon. My name is Andrew Stuthers. I live at 3292 Sweet Clover Lane, Lexington, 40509. I am one half of a new food truck opening actually in two weeks. I leave in 48 hours to head to New Jersey to pick up a brand new $110,000 food truck. We're known as the Gastronomes LLC. My partner is Kyle Klatka. Between the two of us, we're both, between us, 25 years in fine dining restaurants. We both have culinary degrees from very reputable culinary schools. The majority of my time cutting my teeth as a chef, I did 12 years in Minneapolis, Minnesota, before coming back to Kentucky. My work would be I opened the Village Idiot on Short Street. I was the opening chef there. I opened Palmer's Grill in the former regatta space. So I didn't come by this food truck idea haphazardly. I did about three months of demographic research. Really just saw a lot of potential in the Lexington area to expand what the food trucks are currently doing and what the city is doing with food trucks. Obviously, I just kind of showed up today to be the supporter. It's tough to get food truck owners out during the lunch hour. So since we're not quite up and running yet, just wanted to come and kind of speak on behalf of the Food Truck Association. Certainly been a member since July, even though we're not open. So I guess if the council had any questions for the Food Truck Association, I could certainly answer those. We have, what, four pilot operations going right now, I believe. I'll actually be turning our application in. I know tomorrow, I know as of our last food truck meeting, which was at the middle of January, I believe we have nine trucks in build right now, all of which are considering to be part of the pilot program. So those should all be built within the next two months. Are they on private or public property or which? As far as the trucks? As far as the trucks are concerned. I mean, they're in build, but I assume they'll be doing both. I know we plan to do both public and private property. I know that the pilots themselves have always been on private property. Sure. As far as the current issue, I mean, that could have happened anyway. Right. The issue is the public. I know at our last meeting, I certainly brought forward to our council that really to back up this pilot program and to see it succeed for mutual benefit, that having one truck here and one truck there in the zones of the pilot program, in my opinion, wasn't effective. So we're currently organizing, especially with a lot of the new truck owners, because I feel more of the new truck owners that are building now are doing this as full-time jobs, myself included. We've left our other careers to do this full-time. So we really want to, again, some of the other trucks doing it part-time as a second job. So what I'm trying to do is organize to get two and three trucks within those zones at any given time where, you know, more trucks bring a bigger draw. It shows more success in the pilot zones. Does anybody, Council Member Henson, do you have anything to? I think Councilmember Scutchfield has a comment, but I wanted to let you know that our next Cal will be February the 20th, correct? A special Cal, so if you would like to come back or... Primarily for this issue alone. Sure, that'd be great. Time on that? It'd be 1. 1 o'clock? 4.30. 4.30. 4.30. 4.30 on the 20th? At 4.30, I'm sorry. But I would appreciate if you would come back and if we could get as much feedback as possible so that we could move the pilot program forward. Fantastic. We have a food truck organization meeting prior to that, so I'll make sure I bring that up at our meeting and make sure we get a good representation here for you. Thank you very much. Thank you for being here. Thank you for being here. Appreciate it. Was there anything else, Council Member? I guess I wanted to ask a question. Okay, sure. We don't have anybody here in opposition to the food trucks. Is that correct? As far as I know, the only person, this gentleman, just spoke. I would like to at least extend a motion if we are so interested, because we had this meeting today and we had this on the agenda, and I know that council members have voiced in their newsletters that this was going to be on the agenda today. My biggest concern when I asked for this to be sent to committee was to give an opportunity for the community to be heard, and I think we have done that. If you all will hear me, I guess I'm going to make a motion that we go ahead and extend for the year. Second. I was going to second it for purpose of discussion. Any further discussion on the subject? When you're talking about for the year, do you mean in addition to the six months or a year on top of the six months? We had a six-month, I guess, trial. Those that served on the committee may be able to give this answer more. We had a six-month trial, correct? and the intention was to extend it for a year if it was a successful trial period, which I think at this point we've shown a successful trial period. Well, yes and no. If I might, I'm not supposed to really say anything from this position, But we really don't have anybody in the public arena right now, or haven't had for the last six months. It's been on private property. And the issue for everyone is what's the public presentation, I guess, or to the public in general as opposed to wherever. and I'm not totally sure where they're located on the private property. I know there's one with Mexican food located in a gasoline station I passed not too long ago, but I assume that's a food truck. It's selling food, but it may not be. I don't think we're here, though, for the private property. That's a whole different issue. I think it's the public property, and I think the whole idea of us having it on for the committee, the whole today, I'm sorry, the economic cow today, was to get input from the public. And my office has not been contacted specifically about this. And I guess the reason I make that motion is if someone does know of something concerning, I think we've given the public the opportunity to discuss this and to react to it. and I have not gotten a negative response. And that's me. Well, we have a motion and a second. Go ahead, Councilman Myers. Okay, is this discussion on the motion? Yeah. Okay, here's my question, and I don't really know what we do with this. I just want to kind of put it out there. I've had people ask me this question in several different forms, And that is, if we're talking, again, just about the ones that are on public property, has there been any, will there be any discussion about the fact that you've got a private business operating on public property and they're only paying, I think, $25 for a permit. So people have said to me, I have a framing business or I have an insurance business or I have this kind of business. what if I buy an RV, come down, pay $25, and I set up and start selling insurance or start selling custom framing or whatever it is downtown or where I want to on public property. We're not paying property tax to do that. We're not paying any kind of utilities or anything. But we're operating a business on the cheap without a lot of regulation that I would have if I had a brick-and-mortar business. And so before we get to the point where we want to just codify this law and say that this is where we are forever, I think that that discussion needs to be had. And whether it's – I don't know the answer to it, but $25 to set up a business on public property, I'm getting the question, is that really what we want to do? So, if we're talking about extending the pilot, I don't necessarily have an issue with that, but I think before we codify this into this is what we're going to do from here on out, we've got to have that conversation about operating on public property in that manner. We are talking about an additional six months, not an additional 12 months. Is that correct? The initial, I think, was an extension of 12 months. So can I ask then if we are going to extend it for the six months which I don't really have a problem with. I don't know who in the administration we would have to research this issue of this whole aspect of operating that way on public property. And do some work around that. Mr. O'Mara is coming up, Commissioner. So that at the end of the six months we can have that conversation and substance and then move on and do whatever it is we're going to do. So that we don't keep dragging this out. Yes, sir. Yes, Commissioner. Well, I looked around and I didn't see anyone else. So this issue was discussed in the work group, and the pilot was specifically limited to food operators and was not a statement that would allow insurance or framing or the examples that you gave. So the recommendation and the pilot that was put forward was unique to the restaurant and food truck business. If Council wants to revisit that discussion, then we can put that and give you more information. Well, if I can, can I respond? Sure. I think eventually what we want to do is determine if we're going to have food trucks on public property, And if so, let's codify it and move on and not discuss this every six months. I think it's what the council wants to eventually get to. And so if we're going to do that, I think that we ought to have this conversation about what opportunities are there for people to open up businesses in the same fashion. And is $25 the appropriate fee to do that, et cetera, et cetera, et cetera. I'm sure there's more than just those two questions around that. So I'm looking for help on how we approach that so that if we give another six months for the pilot, at the end of that time we've had the proper discussions and we can then move forward with whatever we're going to do. So did I ask for that research to be done or that committee to continue that work to look at what other opportunities might be out there? How do we do that, Mr. Chair? And Mr. Commissioner? Well, I would look to the committee's leadership, but we'll be glad to address it either through the subcommittee or directly. It's at the council's will. There was some discussion about it, but we can share that in whatever forum is appropriate. I mean, the conversation could start tomorrow, for that matter. And I would hate to see us go five and a half or five and three quarters months and then panic and run around with our heads cut off. Yes. Mr. Chair, I have just been informed by one of the council members not here in attendance that an email was sent out with the intention that we were moving the food truck to a different date. I am going to withdraw my motion at this time because my understanding is there were some people that were going to come to speak on the issue. And because the public was told that it was moved, I don't want to take that opportunity away from people from reacting. And I apologize for the misinformation that I gave earlier. You're referencing the next month. My motion is to go ahead and extend for a month. I think we should wait until the 20th to hear. Okay. Okay. All in favor? Don't jump a dog one time. Anybody got any comments? Yes, Council Member Lane. Thank you, Mr. Chairman. Excuse me. At our previous meeting, we discussed some length about extending the term of the license through the end of December 2014. I like that because if you're running a business, by the time you put a business plan together, you get your marketing materials, you set up your business, you know, four or five months can be gone by the boards. And I think it's very, very bad to put that kind of an obligation on small businesses to operate that way. And by going through the end of the year, they'd also be their full tax year would be included. So I don't know if there were any objectors to December 14th for the termination of the extension. Would this be a friendly amendment? Well, I mean, I could make a friendly amendment on it. I would be happy to move that. We extend the temporary license through December 14th, excuse me, December 31st, 2014. So move. We have a motion to amend. All those in favor? Can we have discussion? We didn't vote, so we saw the motion. Well, this was a friendly amendment to that motion, though. There has to be a new motion. Council Member Lane? Well, Mr. Chairman, I don't believe we voted to terminate that motion, although there was a suggestion that she would like to terminate it, but there were no votes to terminate it. So it seemed like that motion was still in force and effect, and my amendment would be good. If it's not, I'll be happy to make a new motion. Oh, that's true. Let's vote on her. Why should I say what it is? Yeah. Yes, if you wish. We can go ahead and do that. Okay. All those in favor of the original motion? To withdraw? To withdraw, yeah, to withdraw. Aye. Come on, folks. Any opposed? Just four ayes and nobody else cares. This isn't the easiest job on earth, I'll tell you that. Yes, Councilmember Henderson. Henson, brother. Thank you, Chair. Just to clarify, then, this item will be heard in a special Committee of the Whole meeting on February 20th at 430, and at which time we may choose to extend the pilot once we have an opportunity for the public to come and express their concerns, best wishes, or whatever. Correct? Yes, that would work, yes, without a doubt. And it maybe does preempt Council Member Lane's motion. if you would like to withdraw your motion and we'll wait until the February meeting. Okay, I withdraw the motion until the February meeting. Thank you. Thank you. Okay, we're on for February then. Good, I'm glad we can get on to the next. item number three is the jobs program review requested by council member Masati is the administration ready to take care take over thank you for the opportunity to be back before you today to talk a little bit about the jobs fund that we have previously discussed. We wanted to start out first taking a look back at where we have been a little bit. As you can see, we first brought the proposal to you all on October the 9th, made a presentation to this committee, along with Jim Parsons, who is probably one of the most recognized economic development attorneys in Kentucky back about a week later on the 15th. Then the council body approved in February both the fund and the committee at the board to oversee the fund. We had our first meeting of that board. Laura Boyson and Tyron Tyra, two of the board members, are here with us today. you can see a list of Councilmember Beard our chairman today was also at that meeting to begin the process of going over the guidelines and rules to administer the jobs fund component of this board we are scheduled to meet this week as well to revise and bring back to the full council the guidelines as far as the industrial revenue bond program are as well so that board can is starting to meet and continuing to be active in its efforts the good thing about our first meeting we had a good attendance a good discussion on the guidelines eric donegan who is a former commissioner of the kentucky department of economic development and has been a a good supporter of economic development within lexington and fayette county was there and a major contributor at that meeting. You can also see the list of others who have contributed during the entirety of this process, and you will note that we've had good staff support on this from Commerce Lexington, our economic development partner, as well. So as we completed our first meeting, we forwarded to you the guidelines and the operating documents as the fund committee, as we walk through each section, as we made changes and tweaked those so we could bring them towards you. So what we'd like to do now, Wes Holbrook is our staff person assigned to the committee. He is the one that helped us research and develop the guidelines that we originally brought to you for this. So we would actually like Wes to come up and walk through the remainder of the presentation today for you all. Thank you all very much for letting us come before the Economic Development Committee to go through the policies and guidelines. The policies and guidelines are not hard and fast rules for how this fund is going to be run. There are guidelines and the format and the structure within which we'll operate to make sure that we're able to make the best incentive offers to companies for Lexington. As with all pieces of this program, our goal has been flexibility. That's why when we're going through the guidelines, there are very few things that are hard and fast rules that we'll require, but we do have a lot of tools in the toolbox to make sure that we can put together the best agreements to protect taxpayer dollars and make the incentives attractive to businesses, and also just to be flexible based on the types of programs and businesses that we may be trying to attract. So the first section, Section 2 in the document, is basically going through the minimum criteria. So we have some minimum criteria for all of our programs. One is that they're located in or moving to Lexington, that they have specific job creation targets. As far as what that number is, that's extremely flexible because we want to make sure that this fund is available to businesses that are trying to create jobs numbering in the tens and also if we're able to have businesses create jobs numbering in possibly 20, 30, 40, 50, and much higher. The average wages is a component that we wanted to add in to make sure that we're creating jobs that you're going to see some other residual job creation from. What our research has shown is that for higher wage jobs that we create, you create more jobs going out from that, specifically in the service sector, not just retail and restaurant jobs, but also in higher level services, such as doctors, lawyers, accountants, and so on and so forth. So as long as whenever our applicants submit a proposal that they have the average wage greater than or equal to our county median income, then they could be eligible for incentives. We'll need to make sure, just as a matter of covering some of our administrative and legal fees, that there's an application fee submitted, that the business submits all of the requested materials, that they're current with all taxes and licenses, and also that they're producing some sort of service or good that can be traded or provided for the community, not just Lexington locally but also the state nationally and internationally. Specific to some of our programs, the worker training grants would be limited for positions with demonstrated longstanding unfilled jobs and also would be targeted specifically to our current initiative with the Bluegrass Economic Advancement Movement, and those are transportation equipment, machinery, very high-level and advanced manufacturing. With loans specifically, we want to make sure that this is not the sole source of financing for some of these companies. So the goal would be for, and we put this in the policies and guidelines, no higher than 50% of the incentives and financing received for any individual project who come from city sources. And moving on to Section 4 in taxpayer protection, In this section, part of this is covered in the ordinance. We want agreements no longer than 10 years, and we also want to make sure that in these taxpayer protection sections that we're doing the best we can and still maintaining the flexibility to make sure we're protecting our taxpayer investments, but also that this is something that businesses can handle and doesn't create too much of an onerous burden. So we proposed regular annual reports and as requested, that whenever they submit the application, the business must sign a document indicating that but for any incentive package they receive, that the project would not be able to go forward. They're going to need to signify best efforts in their agreements, provide evidence of business expenses before disbursement. This is just a way of making sure that they're utilizing incentives for a legitimate business expense and that they have evidence of that before we disperse or before we make some sort of recurring disbursement. Possible collateral. If it's a loan where we're capitalizing some sort of large equipment expenditure, then we could use that as collateral. Otherwise, depending on what the incentive is, we may require some sort of collateral requirement. Clawbacks in each of the incentive packages, this is a pretty standard practice with the state and in a lot of the local economic development incentive packages that we have currently, and also that the business will need to certify proper use of the funds. As far as compliance, sorry, I skipped one. In application materials, we try to be pretty thorough to make sure that between our internal staff and our board that we're able to have as much information as possible to determine whether or not the companies are able to or eligible for incentives, and also that they would be a good match for our community and are targeting their businesses and jobs in areas that we want to create jobs. So they would be required to submit the location. The incentive amount that they're requesting, this is where we would gather the baseline job creation data. So they would have to submit what their current employment would be in Lexington, and then also what their proposed job creation and proposed wages would be. Disclose any other incentives, either public or private, or any other financing. Where they're organized, proof that they're current on all taxes, submit applicable tax ID numbers, some report of credit worthiness, and then information regarding ownership of the company. And in addition, also the application fee to ensure that we're able to cover some of the legal and administrative costs of administering the fund. And finally, in the last section, we talk about compliance. We want to make sure that we're being very above board with all of the companies that we do business with and that we're providing incentives for because this is taxpayer money. So one of the pieces of the policies and guidelines would be for board or council members to recuse themselves if they are associated with the company or owners with the company. And in discussions with the law department, that would extend through the life of the agreement. We've also put in for annual reports on job growth from the baseline that they submit. And we can also, again, have other reports as requested. and also to make sure that we do provide some sort of notice for the businesses that are in noncompliance, that aren't meeting their job or wage creation targets, and also communicating with them what a time frame would be to become compliant. If they're not able to do that, then the penalties and the clawbacks that we discussed in the document would go into effect until the point where they become compliant. And we also put specifically that ensuring proper usage is key to this because we want to make sure that if a company is getting incentive package for some sort of manufacturing equipment, that they don't go out and use it for lunches with clients. So they'll, again, we're going to make sure that we have some sort of documentation for the expenditures and that the money is properly used through their reports. And I have some specific questions from the vice mayor that I can go through that were part of your package, and then we can take questions from the other council members if that's fine. Thank you, Mr. Chair. So Vice Mayor's first question was determining what the high priority industries are that are targeted for incentives. We established some of those in the ordinance, but we also looked at those industries as areas where we already have existing economic initiatives and also areas where based on job growth in Lexington, we have the opportunity to create some sort of, to build a hub or a cluster based on the growth that we've seen so far. We can look at new and additional priority areas based on job growth over time. Callback provisions are, is the second question. She wanted to explain in detail what callback provisions were and how they protect the public money. Callback revisions are included in agreements. We propose that they would be included in agreements that businesses would sign with the city. This is a tool that the state uses standard in all of their loan agreements to make sure that there's some mechanism to reclaim some of these public incentives in the event that a business becomes noncompliant. I believe there may have been some companies previously in Lexington that we have received clawbacks for from other incentive programs. And so this is something that the city does have some experience with as far as receiving this money back from businesses that may not be in compliance. In addition to this, because we're not proposing dispersing all the money in one lump sum up front, and we would prefer to do some sort of regular disbursement or disbursement based on expenses, we want to look at clawbacks, or at least the formulas for clawbacks, as limiting the money that the company would be able to receive for the rest of the life of the agreement. So if they've received half of their incentive package and they're noncompliant, then they would not be able to receive incentives, and the clawback formulas that we would use would be used to eliminate some of the future funding that they would be able to receive if they do become compliant. Within the next question was, who within LFUCG will track the job creation numbers and ensure the companies receive job testimony are compliant with their agreed job creation targets and retentions. This is supposed to be a joint function currently of the mayor's office, the chief development officer, and the finance department. And then the last two questions were based on ensuring that council members and board members will be able to recuse themselves if they're private investors in the company. We're currently asking companies to submit the names of owners with up to 20% ownership. And during the evaluation process, that could be a question that we ask the businesses if they come before the board and we request more information of them. And that's the end of the vice mayor's questions. I already covered the length of time that a council member or a board member may be prohibited from investing in the company, company and that would be the length of the agreement well thank you counsel any questions and go right ahead councilmember Henson yeah you first here anyway thank you chair thank you Wes for the presentation What is the county median wage? Currently, and this is based on census data, but it's currently about $23 an hour. Yes. $23 an hour. And my question would be, how did you come up with that? Sure. But what we wanted to do is we wanted to, based previously on a comment from Councilman Ford that expressed some concern about this not being a tool for wage growth on the lower end, we wanted to make sure that we were being as inclusive as possible but also still prioritizing some of the higher wage jobs and high growth potential companies that we're hoping to target with this. So the way that that would, and it's formulized in the application, so if you go through and play with it, you can put in the number of jobs and what the proposed wage is. But it will add up the proposed wage, the number of jobs at that wage, and then average it out for all the jobs proposed to be created. And that will also be a tool for compliance as well, to make sure that if a company says they're going to create jobs at the median wage, because that's roughly the midpoint of wages in Lexington, then we can make sure that they're creating jobs at that level as well. You know, I guess I just think that's a little high. You know, I know that's what the census says. Yeah. And I know that it is approximately 23-something an hour. But if a company were to come in and they're going to employ, say, 100 people at $18 an hour, then they would not be eligible, correct? Not for this program specifically, but depending on the industry, there may be some state incentive programs. They may be eligible for other, you know, I guess. And then, I don't know, when you look at the average wages, I would be curious to see what the number of people are. You know, it's like how many people in Lexington make above the $23 an hour as opposed to the number of folks below that. I just want it to be inclusive. Yes. But I also understand that we want to create good jobs. Exactly. And we want to retain our college students. Right. And what we've seen is that with the more high-wage jobs that you create, you do create some lower-wage jobs just as a residual of that. So our thought was by targeting these higher-wage jobs that we create a better foundation for the growth of some of those service sector jobs that might not be able to provide the foundation for our economy that we would like in Lexington. Yeah, that makes sense. Thank you. You're welcome. Council Member Massadi. Thank you, Chair. Thank you, Wes, and thank you, Kevin, for coming to us today. And I place this in committee because it is a pilot program, and we do have a fiduciary responsibility to taxpayers to let them know what we're doing with this money. And I certainly want to be able to speak at a neighborhood meeting or run into someone at the grocery store and feel comfortable about the program. I think on the surface it's got great merit, and I really appreciate the work that you've done to get it to us. You did, or I guess Mr. Atkins did say, that you're going to meet and revise these guidelines. I don't feel real comfortable going forward on this unless we've seen the revised guidelines. I don't know what's going to be revised. I mean, I've got a lot of notes here on different questions just on the guidelines today. So if you're going to be revising them again, I'm not sure the questions I have are applicable. So that's my only concern. Council Member Mazzotti, the first meeting that the board had, we did the guidelines for this fund, the Economic Development Fund. The guidelines that the committee is going to be revising at its next meeting are the industrial revenue bond guidelines that our law department has said probably have needed to be revised for some time since they're more than a decade old. is you remember the committee makeup of this board was the Industrial Revenue Bond Review Committee that was already in place. We took that, we added some membership to it, and then that became the fund board. So what you're seeing as far as the Economic Development Fund itself guidelines, that's what the committee worked on the last time. Those are not slated for, unless there's questions that come out of this session that need to be reviewed, those are not slated for review again. It's the IRB function of the committee that is going to be. Okay. I appreciate the clarification because when you came up and said that you were going to meet again and revising the guidelines, that gave me a little bit of hesitancy on some of the questions I have. I have a few questions. One is that when you said on the callback provision and you said possible collateral, is there going to be collateral for each person that applies? Is there going to be some type of personal collateral? Or can you give me a little bit more? Because you said at one point there was possible, and then you said there was going to be collateral. So is there collateral connected to this as far as whoever gets either a loan or that would be for a loan, I would say? That's one of the pieces that we're looking at is being flexible. Collateral may be required after we do a credit check and get all the information from the business. So you're saying if the business is strong enough, you're not going to require any collateral? Depending on the type of program that they might apply for. Okay, that leads me to my second question. How do you determine who gets a grant or who gets a loan? How is that determined? The company will indicate in their application if they would be applying for a grant or a loan program. And as the board goes through and evaluates and reviews it, they may make a suggestion that the business may be more well-served by one of the other programs and suggest to them at that time that they reapply or amend their application for one of the other programs. so that as the business applies they'll have the opportunity to express their merits for each individual program and then the board will make that decision. If I was a business or coming into town I certainly would apply for the grant before I would the loan because I don't have to pay the interest that's you know involved with the loan itself so that was a question I had how you know how is that going to be determined? One of the real clear lines that we've been discussing is looking at if there is some sort of operating need for the business, that that may be more appropriately served by a grant program, whereas the loan program would be more appropriate for some sort of capital expenditure. But at the same time, it's meant to be flexible. And I understand, this is a pilot program, and you've got a lot of details, and unfortunately the devil's in the details, but there will be some companies that will want to be taking advantage of this, and I want to be comfortable enough that we are going forward in the right direction. When you review this, you said you were going to do an annual review. You know, when a person goes to get a commercial loan at a bank, they typically have a monthly review. Is there a possibility of having a quarterly review? I don't want to get so far down the road where we are nine months into it and we realize that this business A has not been able to perform or has not said what they were going to do or just hasn't kept up with their commitment to us. Is that a possibility? In our initial discussion, the document originally had quarterly reports in it, but through the board's discussion and also at the suggestion of Eric Dunnigan, who used to do this work with the state, He suggested that annual reports and their reports as needed or as requested were sufficient for them. And as the number of reports increases, that may create a more onerous burden, not only on the business, but also administratively trying to track a lot of these. I can understand that, but I also don't want to get so far down the line that we've lost money. We've gotten into it nine months, and we realize these people aren't players, and they can't come up with the money, and maybe they don't have collateral, maybe they do. and that was my big concern, too, that goes in with the CLAWB Act provision. So that is a concern of mine, waiting for an annual review as opposed to maybe even a semi-annual review, just to give us an idea of where this particular business is. And I guess lastly, I would think that from what I understand, just correct me if I'm wrong, these are for businesses that Business Lexington is basically working with. Correct? Already? This is not separate from Business Lexington. You are working in conjunction with Commerce Lexington. I apologize. And they're working with them, and maybe they need some more incentives and some more dollars to have them pick Lexington as opposed to a Chattanooga or some other city. Is that the basis of this program? That's a piece of it, but they don't have to be a company that's working with Commerce Lexington. I'm sorry? They don't have to be a company that's working with Commerce Lexington to be able to apply for this program. So who can apply for this then? I mean, what are the parameters for that? Council Member Bazzotti, obviously the clients that Commerce Lexington works with on our behalf. I'm sorry? Obviously, the clients that Commerce Lexington works with on our behalf would be one of the companies likely to participate in a program like this. They, though, however, are likely to be participants in the state programs and various others. I think, to answer your question, it could be people who are working with any of our economic development partners that are looking toward bringing jobs here. We've already had a couple of inquiries actually in our office directly to us about people who are currently not working with Commerce Lexington, but are interested in bringing their operations, albeit small in most cases, to Lexington. So I guess the answer to your question is we would continue to work in partnership. And I think it could actually work in reverse in some cases where we get a company that's interested and comes directly to us. It's an opportunity to see if they're wanting to grow. Are there other programs out there that we can help them participate in as well? But it would not necessarily have to go through Commerce Lexington. Okay, so you can work together or there can be others that would be separate of this. Do you have any kind of specific definitions on, I know you talked about what type of companies, like basically what their projected income is going to be? I mean, certain criteria like that, is that going to be looked at? Oh, I think that was one of the things that we discussed initially with this fund. I mean, we want to apply it to the best jobs for this community that we can possibly apply it to. Okay, I may have some other questions later. Thank you. Now from R.K. Thank you, Chair. Thank you, Wes, for bringing this forward. I just really have a small detail question. Sure. And it has to do with the difference between average and median. On your slide, we've talked about this before, but on your slide it says average wage of jobs, and we had a conversation that led to Commerce Lexington in changing their application and their reporting form so that it was average and median income, average wage, median. Is that something you talked about? Is there a reason why it says average instead of both those things at this point? Whenever I use the word average, I do mean the median income, and whenever we're talking about averages, I mean the median because I do understand that that can flatten out some of the outliers at the end. So we can, if it says average in the document, the intention is that it's the median. Okay, so I'm not a statistician, but there's a distinction, and it's not an unimportant one. And if I can take two minutes to give a little demonstration because I find it amusing. If there are 10 people having lunch at Alfalfas and their average income is $50,000 and Coach Calipari walks in to get his favorite tomato bisque, the average wage of that group becomes about $200,000 because you take his, you add it all together, you divide by the number. The median doesn't change. The median would still be somewhere around $50,000. So it's not an unimportant distinction, and it tells us more. If we have the average and the median, which are different, it tells us more about the makeup, actually, of the workforce. So we get that from Commerce Lexington, and I presume we could just get that from you folks as well. Is that reasonable? To provide the average and the median as well? Yes. Great. Thank you. Thank you, Chair. Mr. Chair, before we go. I think I see exactly what you're saying, Council Member Kay, which is why we added it onto the KBI information that comes to the body. What Wes was saying was that the 23 would be where we wanted to really focus in and everything above. And I see what you're saying, and I think it's something that we can incorporate and ask for as part of this. So the 23, that is the median of wages in this community at this time? That's right. As a median. Right. And you would be comparing that to the median of the wages for the company that is making the application? What we wanted to do was, this as you know, was intended to be a job deal closing fund, as some have called it. So we wanted to make sure that when we were investing or using the public resources, they were done at a level that did not fall below what was already there. That's not to say that some of the jobs, as you pointed out, may not be, you know, 19, 18. But some may well be 25, 30. But you have to have a target with which to work from. And we wanted to invest the money to create the kind of jobs that help that 23 number for the community as a whole to continue to grow. Well, I'm in complete support of the intention. I just want to make sure that the language reflects what the intention is, and I'm confident that you can do that. Thank you. Thank you, Chair. Thank you. You left the mode out while we're doing averages. That's less than useful in this instance, I believe. This is the banker in me now. He stole my thunder, so to speak, because I was going to talk to you about median also. Council Member Scratchfield, please. Thank you, Chair. You know, we've been talking about this for a while, and I'm glad we are, because, I mean, we need to basically get to, there needs to be a process. We can only create this process once, and I think we need to make sure we are as transparent as we can, not only to the companies that are thinking about investing in our city and thus us investing in them. Have you had companies approach you? We've received some inquiries from companies via e-mail and phone calls. Okay. Has the administration reached out to any companies that they would like to see come here? Until the fund is in place and the council is comfortable and ready for us to operate, no, we have not directly reached out. As Wes said, we've had some inquiries. Now, what we have directly reached out to are some of the consulting firms that guide companies and where they want to locate telling them that this is on the table and that we are in the process of trying to finalize. All right. Thank you. Thank you. Council Member Myers. Thank you, Mr. Chair. Thank you, Mr. Holbrook, for coming in today. I want to kind of revisit the median again, as Council Member Kaye did, and if maybe Council Member Kaye can help me out on this. My perspective is to give a little bit different example, And that would be, say we take a specific business like a hotel or maybe a hotel that has a museum with it. If you look at the incomes, the salaries that are going to be paid out in that hotel, it's got a restaurant, you've got an executive chef, you've got the curator of the museum, you've got the top hotel management. And so as Council Member Kay pointed out, that's going to skew the median or the incomes. And I understand what you're trying to do here. Again, I'm in support of that as well. But if you do a research project, the methodology requires that you account for outliers. And so I understand that you're putting that information in here now so you can actually be able to see that. But what if we went a different direction and you, say, you chopped off the top three and the bottom three or whatever the number is so that you actually take them out of the mix? and then you really get a true picture of the median income in the business that's applying for these incentives. I think if with some of the companies that we're talking about and with the program partially being geared towards companies that may not be eligible for some of the state incentives because they're hiring less than, say, 10 employees, which is, I think, the floor for what the state programs are, that may become a little difficult to do. Okay. In any sort of very procedure-driven way. Okay. So let me try one more time and see, because we're not, I don't know if this is going to get passed out of here today. And even if it does, we still have time before it gets second reading. The statisticians of the world, as Dr. K talked about, might be able to help us with, If you don't take out the top three and the bottom three, if you provided some type of a formula, that would help you get at a more equitable accounting of what the median income is rather than the huge salaries up here and then the salaries at the bottom. Would you guys look at – yes, sir? No, go ahead. Would you guys look at, in the interim, as we're moving this thing forward, the opportunity to put something like that into play? It's something I think we would be willing to look at. I think it's, when you mention three at each end, it may become more difficult. We may be working with companies whose start point is 10 jobs. So you've taken out 60%. 60% of the workforce if you take out three on each end. I think we'd have to all determine what that takeaway statistician number would be. So I think that's the thing. When you look at the median, however you want to define it, the median, if you're looking at 10, you may want to look at all 10. Okay. Okay. Well, will you look into that, and maybe somebody at UK can help us with that, and maybe somebody else in the country or another state or another city has done something like that as well. And I also just want to add on to that. In the application, the applicant will list out the wage level of each job and the number of jobs created at that wage, so we'll have a pretty clear picture broken out of how many jobs are being created at which wage and be able to look at it in that way as well. Okay, and using that information in the way that we talk about the opportunity when it comes forward is important. You know what I'm saying? So if you've got that information and you put that into the equation and you go back to the transparency piece, we have a more realistic presentation to the public as to what we're really getting. We want the company. We want the jobs. But what we're really getting for this investment. And I think maybe it would get to the heart of what you're asking, Councilman Myers, is Commissioner O'Mara and I have talked about an additional form to go out as far as the payroll on companies who would participate in this program, and possibly if the state will allow us to even do it within the KBI program, so that we have that supplemental form that gives us a true picture of employment, wages of the participants within that program as it compares to the incentives that we're applying. That would be excellent. Okay. Thank you very much. Thank you, Mr. Chair. Oops, I hit that button. Council Member Lane. Thank you, Mr. Chairman. I looked over the Lexington Jobs Fund policies and guidelines, and I have a few questions just on procedure. Okay. So if you could keep the answers fairly short. I've got some or eight of them, but didn't want to drag it out too long. Right. The first question I have, who would be the key contact for the city of Lexington regarding economic development? But would it be the jobs fund policies or the Lexington jobs fund or would it be Commerce Lexington? How are you going to decide who feels this and who manages it, who coordinates it for the city's effort? The key point of contact and application in the ordinance and in this document is the chief development officer. But as Kevin mentioned, with Commerce Lexington possibly providing some support and introducing some of these companies to us, they may be a point of contact as well. Although, as far as the application and the evaluation for this fund, it would be the chief development officer. Okay. You have basically a loan agreement, a grant agreement, or some similar agreement, it says in here. And my question is, if it's a grant, are we going to give the money just a cash payment and then hope they're going to pay it back? Whereas most of the incentives from the state and the city currently are based on the performance. It's creating the jobs and the credit is given back and the tax that is created on the payroll that is generated from those new jobs. What kind of a grant do you have in mind? The way that we've discussed it so far is the preference for any sort of disbursement would be based on demonstration of making some sort of expense or buying some sort of equipment, and that they would have to provide, this would be the preference at least, that they would have to provide some evidence of expense to the government before that money would be dispersed. So, for example, if a technology company came in and said we need equipment to set up for business, They might buy that equipment with the grant, but we would get a lien on it. Is that how you would visualize them like that? Okay. All right. What if a company came to Lexington and they had a similar service or product that competed directly with a local company? It's already established here. And we do want to recruit them. are we going to basically give them a cash incentive or a loan to help them get in business, but they will be competing against one of our local businesses here? How would you handle something like that? I think you have to look at every case on an individual case-by-case company. I mean, we've got companies in this community who compete against each other every day. I think it's all about the jobs, the wages, and what they're going to bring to the community. So we would take a look at what they're proposing, and then we would take that recommendation to the board. The board is comprised of folks in business, and we would have the discussion there. Well, you can see where a local company is paying taxes. It would be a little bit miffed if their competitor came into town and we're giving them taxpayer money to help get them started to compete against them. So, I mean, that's a sensitive area. It's a sensitive area. I can also say that that same company would be eligible, potentially, for those incentives if they were growing their company here locally. Right. Okay, thank you. Okay, in your guidelines it says that only one program funding at any given time. Does that apply only to the Lexington Jobs Fund, or does it also apply to incentives that might be given by the state and the city as a separate incentive? In other words, could they be eligible for more than one of those? our TIF program that we've approved. How does that work? In some of the companies are asked to submit any other public financing or public funding that they may have. So this is a program that can be used in conjunction with some of the state incentive programs. We've spoken specifically about the federal SBIRSTTR program for high-tech and high-wage jobs. So this in conjunction with some of the other public incentives, this can be used with those. The intention with that statement is to make sure that they don't come to us for a loan or a grant, and then two years later, before they've even reached the end of their agreement, come to us for another loan or a grant without some sort of amendment to their current agreement. Okay. Mr. Chair, my time has run out, but I have one more question. May I ask for permission for a little extra time? Sure. Go ahead. Thank you, Mr. Chairman. This sort of ties in with the payback of either the grant or the loan. Do you have a certain plan like it would be a lump sum payment at the end of 10 years, amortized straight line plus accrued interest or interest only for a certain period of time, or maybe amortizing loan. The reason I ask that is that you mentioned the clawback. I like the way you emphasize that. If we did the clawback, we need to be able to get the money pretty quickly. And it would be nice if we collected part of the money we've already granted early on in the process so we wouldn't have to get it all back at the end. If the company is failing, that's the hardest time, obviously, to get the money back. So do you have some idea about how that might be structured, the debt and the payback? And that's my last question. I'll defer to Kevin on this one. I would say that, as you see it, that's one of the negotiating items within it. the plan and the reason I say that is it may be a year loan the program is designed up to 10 years but in some cases it may be a year, it may be 5 years I think we're going to want to keep clarification on where these companies are as often as possible as Council Member Mazzotti mentioned so that's all part of the the negotiation toward the agreement, in my opinion. Okay. I would like just in closing to say I read this over pretty carefully a couple of times, and I think you did a very, very good job. I mean, there are a lot of details in there, but these are complex. Every deal is a little bit different. There are different conditions and issues that come up, and I guess you have to be fairly flexible. and I guess that does stimulate one last question. If you're going to bring this before the council for some approval, final or initial, would you treat this sort of like you're buying a piece of real estate and we would go into closed session and you would say, we're thinking about making an offer to give a grant or incentive or whatever to some company and get the council to give you up or down sort of thumbs on it before you go out. Because one of the difficulties is that if the mayor or the economic development people come in and they say, we have made a deal, we're going to give them $250,000 or whatever, and if the council doesn't approve it, they're not going to come to Lexington. That puts the council in a hard spot to make a vote on that. So it would be nice if we could be involved a little bit earlier than later in the process. And, Council Member Lane, I would want to talk to our Commissioner of Law and her staff about how you proceed down that process. As you know, under the Kentucky Revised Statutes, economic development has a carve-out where some of the information to protect proprietary information from the companies is exempted in some ways. I think we'd want to get their input on that. But keep in mind, as I say that, that the council has two representatives on the investment board, the chairman of the budget committee, the chairman of the economic development committee, and those meetings are open and public meetings and are noted on the schedule for LFUCG. Okay. Thank you very much. I appreciate it. And thank you, Mr. Chairman, for your... Quite all right, Mr. Lane. I've got an opportunity to catch up. Council Member Clark? No, I beg your pardon, Council Member Ford. Okay. Thank you, Mr. Chair. Wes, thank you for your time today. You've done a good job putting this information together, and it's evident that you've worked really hard at it. I have just a few questions, and I would ask us to turn our attention to slide number seven in your PowerPoint. And this is as it pertains to taxpayer protection. And just for a recap, we have $1 million that was capitalized, used to capitalize this jobs fund from prior year fund balance. I'm looking at the third item, and my comments will be speaking to the impact, to the need of the use of these taxpayer funds and the cost-benefit derived thereof. That statement says certification that, quote-unquote, but for these incentives, this project would not happen. Explain that. Now, we have $1 million in the fund now. The awards are carved out up to $100,000 for grants. So if we maxed out the potential there, it could possibly be $10,000, $100,000 grants. Or we have loans for up to a quarter million, so we could max them out as four. So it's not going to be very many awards based on the funding that is in the pot right now. Talk a little bit about how do you certify but four. That statement I read means that absent the investment of these taxpayer dollars, either $100K or up to $250K, that the project wouldn't go forward. Explain your rationale in regards to that. Sure. This is one of the pieces that we got from the state in looking at what sort of information we may want to receive from applicants to make sure that this is going towards the best use. So I think it's on the third sheet of the application that was submitted, and Kevin can speak to it in just a second. But the business must indicate, either as a business moving here or an expansion business, that without receiving this incentive money and sign a document stating this, that without this incentive money, that they would not be able to create these jobs at these wages. Now, before Kevin jumps in. I wanted to add, Councilman, before it was, just as the state has, that would be a legal affidavit form of certification. So it's on the company to certify. Right. So let me understand this, that this fund is truly an incentive. And so help me clarify, I have some skepticism. I support the concept of a jobs fund. We're trying to create jobs for Lexington Fayette County. But I have some skepticism, and a taxpayer may find it hard to believe that a viable business, absent $100K from the government or absent $250K from the government cannot carry the project forward. Are we necessary? But I could understand that if that company were to say, we are going to come to Lexington or we are already here in Lexington and we plan to expand, and right now we're proposing 10 jobs, and we're going to do the 10 jobs and we don't need the taxpayers' money to do those 10 jobs. However, we would like to have a bigger impact for Lexington, and we would like to have 15 jobs. And but for the jobs fund investment, we can't do 15 jobs. We can only do the 10 that we have the financing and the capacity to do. Is that more in line to what the jobs fund is? And if so, I think we need to clarify that. We're looking for the impact above and beyond what that private entity planned to do initially. Is that correct, or am I mistaken? If I understand the question. Yes, sir. When we start working with the companies, they bring to us the proposal of what they're planning to do. It may be a recruitment to Lexington. It may be adding jobs in Lexington. So they're telling us on the front end what the job creation numbers are likely to be, what their projections are, what the payroll is. It would be more a question of how this incentive fit into that model. So I'm not sure if I understand the question. If we put this on the table and I was going to create 10 or 15, is that the difference? Then if this fund makes the difference in going ahead and adding those five additional jobs, yes, that would come under the but-for clause because but-for the ability of me to participate in this fund, I would not be able to do the additional five jobs and add to the economic impact of the project. Right. Well, that's what I'm thinking. I don't mean to complicate it or convoluted, but this is a new program. We need to get these out on the table. So my question is on the impact. Are we judging it on the additional benefit that the government's involvement is going to be via grant or loan? And so I think that we have to judge the add-on, the improvement, the plus gain to be derived from the jobs fund. Two quick other points, Mr. Chair, if I could. Go ahead. Just try to wrap it up. 21C is not, I'll use them as an example for the but for a clause, okay? That's a project that is $40 million somewhere in there, proposed to be. This government has already offered $1 million in UDAG residual funds for prior years, and $6 million of Section 108 loan, which I will say to this point, we have not reviewed at all anywhere close to the level of scrutiny that we're giving the jobs fund. And so that's a benefit and a testament to the work that you guys have done with the JAWS Fund. But I'm battling as we speak to how that but-for clause as it pertains to 21C, and that $6 million investment applies to that project, and I think it could relate to similarly other projects that would come before the JAWS Fund. That's just a statement. The last question I have is, there's $1 million in the pot right now. How do we plan to support the jobs fund going forward? And, Kevin, you or Jamie may can help us there. Again, it started with a $1 million investment from prior year fund balances. And I know that we probably don't want to just, $1 million gets us started. How do we plan to go forward with this tool and the toolbox? We've talked about it some. I'm going to defer and let Jamie come up and give his thoughts on how we move forward from there. Very good. Thank you, Kevin. Well, I think we have to balance all of the government's needs, so we need to look at the next mayor's proposed budget as an option for future funding. But, again, we haven't gotten this off the ground yet. I don't have any data to share with you on the success of the program yet. I don't know how fast we're going to go through the million dollars. So there are a lot of unknowns. To give you a solid answer would be probably not quite appropriate yet. But I do think that there will be some money come back into the fund if we do loans, but it won't sustain the program. Okay. Most likely general fund? Most likely. That's right. Okay. Thank you, Jamie. Thank you, Mr. Chair. Thank you. Council Member Clark? Thank you, Mr. Chair. I hate to say that most of my questions have been answered, and I appreciate the – yeah, I know – some very good questions, and I appreciate that. There are a couple of things that I do want to ask. The application fee seems to be fluid. at best. Why isn't that set in stone? Wes, is there some reason for it to not have a specific amount? Part of that is that we're still, obviously, we haven't gotten the program off the ground yet, so we don't know exactly what the administrative and legal costs will be for the program. The other part is, in the policies and guidelines document, we wanted to have the ability to set it once a year, set what the application fee would be, because there are going to be some costs associated with administering the program. And as we figure that out, allow the board to set that fee for the year based on the amount of money that may be in the fund and also what the expected work required may be. So currently the board has set the fee at $250. That's what it is currently. Okay, so the fee could change each year corresponding to the fiscal year? Is that the idea? You don't have to answer that question. Council Member Clark, it would be part of the guidelines and the rules of the fund, and so therefore any change to the application fee would have to come back to this body to be approved by the council. I see. Okay, good. Another question. In thinking of the median salary or the average salary, have we considered the possibility of an industry standard? In other words, there are some industries where the salary is going to be considerably higher than others. Have we thought of looking at industry and having some standard that we could use? Because if a company is in an industry where the average or the mean salary is $50 an hour, and they say that we're going to pay $25, that's above our $23 median. So have we looked at the interest rate standards at all in terms of salary considerations? As far as the salary considerations, we've been looking just specifically at what the county median has been, but that could be maybe not as a piece of this document, but as we look at evaluating and analyzing some of the applicants, looking at their specific industries and finding what the standard may be to compare to. Okay. It probably does not need to be in the document, but it's certainly something that you could look at and think about in terms of evaluating an application. Then let me also mention this, and I think this is really not a question. This is a comment. I think one of the things that I've been impressed with is that one of the statements that we've made in this document that the Small Business Innovation Research, known as the SBIR, is an important evaluator. And looking at a company's application, if that has already been done, we know already that that company has high credentials. Is that not correct? And would that not also be true about STTR? about STTR, and then we would also consider, I think we may have mentioned in there, but we would also consider other very high-profile or very thoroughly vetted federal and state and also traditional financing. So let me just say that I think that's a really important part of the document. I'll also say and remind everybody that when we were talking about fund balance and using some of the fund balance to support this program, I thought a million dollars was too little, and I still think that, and I'll just go ahead and say that. But I do hope that we can move this forward as quickly as we can. Thank you, Wes. You've done a great job on this, and Kevin. So I appreciate all your hard work on this. It's a good document, and I think it's something that could be very, very valuable to our community in our economic development. We appreciate it. Thank you, Chair. We've pretty much gone through the group once. somewhere along the line I'd like to hand the gavel over to someone so that I have an opportunity to do the same. If Council Member Lane would function in that part, I'll hand this phantom gavel over to you, and then we'll go back and retrieve it and let Council Member Myers and Masati and whomever else speak. It isn't going to take me long. Are you saying you'd like for me to make a motion? Yes. Okay. I move that we extend the extension period for the food trucks be extended to December 31, 2014. So move. That wasn't exactly what I was after, but we can go ahead and do that right now. I'm afraid we don't have a quorum yet. We do? Nine? Okay. Do you have a second? I didn't hear. Anybody second for me? I'll second. All in favor? Point of order. We were on a different item on the agenda, and now we've switched. when there were people still signed up to speak i thought you were handing over the gavel so you could speak i was i was attempting to do that he misunderstood what i was going to say and this is something that probably has to happen anyway so i'll i'll bow to to that and to the point that i just have a couple of questions that i'd like to ask or brush up on a little bit But again, all in favor? Aye. Any opposed? No. Well, the ayes have it. Thank you. Now, if you would take my place with the gavel so that I can ask a question or two. Point of order. What was that vote? Well, it would be, we had nine, I believe, here, and we had two nays and seven yays. I'm asking what was the vote for? I'm still trying to understand if we were on one issue, how we moved from the issue that we were on to a whole separate issue. And that's why I made a point of order, so I'm not quite sure how we can do that. As I say, he misunderstood what I had asked him, and he went in another direction. You'll have to ask Council Member Lane. So does that mean that the point of order stood, or does that mean it did not stand? I'm sorry? So does that mean that the point of order stood and that we go back to the agenda, or does that mean that it doesn't stand and we continue on with what you weren't expecting to have happen? Thank you. I'm still not exactly care what the motion was. Did we have it on the system recorded correctly, what it was to do? I was going to go back and get the date, but he made a motion to extend the food truck pilot program, but I didn't catch the date, so I was going to go back to the tape and pull it. Number 31st. Number 31st. And that's just the motion out of this committee, then the whole council has to vote on it again. If I could have the privilege, then I would say that in that vote there was not room for discussion. But you would still have an opportunity to vote no on it, and we had that discussion at the work session when he reports out. He cannot extend it just in this meeting. I understand, but I don't think half of us understood what the vote was about, and there wasn't a chance to discuss it. It was just we voted. So could I ask for an electronic vote? I know. Don't look at me. It's Mr. Stendert's ball at this point. He's already called the vote. Said it passed. It's passed, so it's done. And it's not a big deal, to be perfectly honest. If I may raise a point of order on this very issue, I was out of the room when the motion was made. I did not vote electronically, but my vote was recorded. So I would like to have a re-vote, and I would like to abstain. I don't know what the motion was. It references back to the food truck issue. The vote hasn't been recorded. I just went by the yays and nays. It's still up there if you want to change your vote. It hasn't officially been recorded in the system. Well, but the chair of the meeting recorded it and said the vote passes. So that records it. But I would make a motion just to clear things up to reconsider. That's what I was going to do. I was on the prevailing side so I can do so. So there's a motion to reconsider. Second. Do we have a second? Second. Okay, fine. All in favor? Aye. Any opposed? Okay. Okay, Council Member Lane, if you could put this to the end of our present discussion, it would be a big help to all of us. Thank you, Mr. Chairman. I apologize for misunderstanding what you were saying. I yield to the Council Member Beard. Thank you. Hopefully I can get out of here before anything happens. Other than that, we're approaching 30 minutes to go, and I wanted to ask a couple of questions of Wes and Kevin, if possible. Chair, there's actually a motion to reconsider on the floor. I thought we voted on it. No, we voted to reconsider. Right. So there's still a motion on the floor about the food trucks that we need to dispose of before we continue on. So then doesn't he need to restate the motion and then we vote again? Correct. Okay. Let's go ahead and get the food trucks out of the way. Would you like to restate your motion? Thank you, Mr. Chairman. My motion is to extend the temporary, what is the term we use for the pilot program through December 31, 2014 for the food trucks. So move. Second. All in favor? There's discussion. Oh, there is discussion. Right ahead, whoever is discussing. We have Council Member Myers up. Thank you, Mr. Chair. I thought earlier we discussed this, and we have moved this to a meeting later on this month, 18th or the 20th, 20th? 20th. 20th. Where the citizens can come in and speak, and we've got a young lady in the audience that would certainly like to speak, I believe, if we are going ahead and vote on this because she asked people to stand down and not come today because it had been pushed to another meeting. So actually, I move to table this motion until February 18th? 20th. Until February 20th. So moved. All in favor? Aye. Any opposed? No. The ayes have it. Can we go ahead and finish up this other issue that we've been spending an hour on? Wes, we were talking about collateralizing. Are you talking about personal signatures of whom? If, in fact, you're going to collateralize, you've got to collateralize with more than just used furniture or whatever. we got to, in my opinion, have personal signatures of the principals. Have you all discussed that at all, or are we going to discuss that in our committee meeting, Kevin? We have discussed the principals ought to sign the document. I think from your question, it may bear more conversation. in our I'm sure it will yeah that's why I wanted to start and say it first this average wage situation which was brought up by councilmember Kaye actually concerning the technique to develop an average and I had that as one of mine. State of organization, does that mean we're disorganized, but we're going to get it organized and we'll be at that state? Or are we talking about a state of 50? The state in which the business is organized. Okay. I figured as much now. I guess my big question is on clawback, If there is a bankruptcy, the clawback is not going to be senior to a bankruptcy issue, I don't believe. Yes, go right ahead. If you're a secured creditor, if we do have collateral, to your earlier point, and that's part of the discussion, then we would be part, we'd be a secured creditor in the bankruptcy. If not, we'd go into the unsecured pool. So that would be a discussion point, to your point, bankruptcy. If you're secured, you take a priority. Is that the answer? Yes, that's kind of where I was headed. You knew that answer. Well, of course. Okay, thank you. Now, there he is. Council Member Myers, you had a second shot at... Thank you, sir. I'll be brief. Kevin, could you come up, please? We were talking about a form that they were going to add. I was asking Kevin if he maybe had a name that he would call that form so we would know to look for it in here. We don't have a name. I mean, we would basically just consider an addendum to the form for those who participate. So you could probably call it the jobs fund addendum. Okay. And then you envision that going under section number six? Which would be the compliance section. Which would be the accounting and compliance section? That's correct. Okay. So will you guys create that when this gets finalized? It will be a part of it, or is that just going to come later? How are you planning on doing that? We would finalize it so it could go out with the forms as they go out on a yearly basis from Commissioner O'Mara's office. Okay, but when we vote on this and finalize this document, will it be a part of it at that time? I think we would probably still be finalizing the reporting document. Okay, and the last question we were talking about before we came up here. In the case of a company who says we're going to either buy two pieces of equipment and we buy one today and we're going to buy one three years from now when our production goes up, or we're going to create 50 jobs, 25 when we first open the doors, The additional $25 are going to come online incrementally. Under Section 3, protecting the public dollars and investments, this third to last bullet talks about how you can disperse funds incrementally. Is that how you would address that, or how do you address that situation where I produce part of it up front and the part of it is going to be future? The answer to your question on equipment would be, we would do it as Commissioner Dunnigan said, the state does it, which is once you have purchased the equipment, so you can purchase a piece now, a piece later. Once you have purchased that specific piece of equipment, then you can submit the receipt for that purchase to the board, and you can be reimbursed for that. And then if it's three years and you buy the second piece, and then in three years, then you can submit the additional receipt and be reimbursed for the second piece. You wouldn't get it all up front. Okay. And then what about on the jobs part of that? I think that's where we would use the addendum form and track to make sure that the job creation was really there as it had been applied for. And if it's not, you know, after the first year, after the second year, then you really start looking at and you start enforcing the clawback provision. Okay. Thank you very much. Thank you, Mr. Chair. Thank you, Council Member Massadi. I'm finished, Mr. Chair. You're finished? You're done? Yes. Well, thank you very much, Wes and Kevin and Jamie, for that matter, and Laura and whomever else was in the room that jumped on board. We have one more issue to discuss. Pardon me? Oh, I'm sorry. That's okay. That wasn't there the first time I started. Go ahead. So I assume this issue will stay in committee? Yes. Okay. Thank you. You know, nothing can happen without final approval of the council anyway, so obviously whether it's in a committee or not in a committee is moot, in my opinion. um to courthouse yes I was going to address councilmember Stent's point I think we do need to move it out of committee but I'm not a council member I can't make that motion chair yes councilmember Clark I'd like to move that this issue be move to out of committee to the full council. Motion and a second. All in favor? Aye. Are you opposed? We need to light up the Christmas tree, I'm afraid. Get everybody to vote. I guess I don't really need to Get the vote. What is the paragraph that is hiding two names? I'm afraid it's five to two. anyway the nays have it in this case you're a no Stacy Council Member Elgar is saying no okay I think we just have you left. I don't want my screen. Is that working? I don't even. Okay, let's go ahead. If we might, with the courthouse, this isn't going to take long, is it? Good. We are having work sessions. Chairman Beard, we don't seem to have your vote. Pardon me, you can take my vote? I need your vote. Thank you. Okay, we're done. All right. Well, thank you for the opportunity to give you a quick update on, there should be a few slides before that, give you a quick update on the courthouse from where we're at, and Jamshid is here as well to handle some specific questions. All right. And I apologize. I was asked to do this, and we did not have time to get it into the packet, so I'll be happy to distribute these slides afterwards. So we'll be brief and attempt to be thorough as well. I wanted to give you a quick snapshot in time is that the old courthouse is not a six-month-old project. It is really what is now a 14-year-old project. So in 1999, LFUCG takes the building from the Division of Courts when they decided to build the new courthouses. Early on, there was a lot of aspiration for the building. So two studies were done of note. One was the Fitzsimmons Office for Architecture, which basically looked at a full restoration of the building, put it back the way it was, more or less. And that price tag, which has been updated, came in at about $12 million. Shortly thereafter, Vernon Johnson & Associates was brought in now to Boston to take a look at what would happen if we did the U.K. Art Museum and the History Museum mash them up and do a joint facility with the courthouse, which would have also included new subterranean galleries. I forget the exact price tag on that, but it was quite a bit more than $12 million. That project was shelved shortly after 9-11 happens. But about the same time, early 2000s, for those who remember the Ben Schneider settlement, the city spent, at the end of the day, a few million dollars here and there, but one million of that was spent to stabilize the building and make minor improvements to three floors, which then became the Lexington History Center. And so home for the History Museum, Public Safety Museum, and Kentucky Pharmacy Museum. For about a decade, they operated in the building. but did not have much success raising capital funds. 2009's Park Street Scape in the lead-up to the World Equestrian Games. Cheapside Park's reinvented its fifth-third bank pavilion. 2012, elevated levels and the environmental hazards that we'll talk about here in a minute shuttered the building to the public, and then that leads to LFUCG using part of its Brownfields grant to conduct both the Phase I and Phase II environmental studies on the building and also we have basically a work scope for abatement of the building. That work scope price tag is around $775,000. Is that correct, John? So that's the estimate for what the abatement would be, and that includes lead, pigeon guano, asbestos, and mold remediation. So to give you an idea of how we're thinking about the courthouse is generally as a leasing concept, courthouses are good at being courthouses. And they're public buildings, and this is the last of our public buildings. And so as you think about ground floor, and by ground floor, that's the entry level off of short, upper, and cheap side. Some sort of market, cafe, retail, plus public restrooms, the service, the pavilion. Some sort of public access use on the entry level, which is actually the sort of second floor that you enter off of Main Street. And there have been numerous uses kicked around over the years. We've had conversations with various institutions locally, none of which are ready to talk publicly about their interest or disinterest. And then offices, the old courtroom becomes a conference room, and additional offices on the fourth floor. So we flip to the next one. And so the big question, potential sources of funding. If you were going to tackle a building like this, how would you do it? And it doesn't matter if it is the city that does it, whether it's an independent agency that does it, or if it's the private sector that does it. All of them are going to look at these sources. Historic tax credit equity can be anywhere between 15% and 20% of the project cost. New markets tax credits could also generate between 15% and 20% of the project cost. Some permanent debt may be supportable. Private equity and a local contribution of some sort. So let's talk about the first bit of that local contribution. So where are we at? Here's our flow chart. So currently we've assembled or are assembling existing drawings, engineering, historic inventory on the building, and environmental reports. We're having informal conversations with potential end users. Again, none of them are ready to talk about this publicly. LHUCG has submitted to the EPA Brownfield grant application, which would help with remediation. However, it is for $200,000 of the $775,000. Job sheet has. There is money in this year's budget, this year's capital budget, to undertake a structural analysis this summer and then do some stabilization on the building. And then I'm in the process of pulling together an RFP for a conditions assessment, which would be the architectural conditions. And why this is important is because the building is beginning to deteriorate. I was actually in the cupola yesterday afternoon. It's taking water. So we've got a little bit of a timeline on the stability of the building and what we're going to need to do there. So it's important that we get into an architectural conditions assessment so that we understand both the historic piece of it, but also what's really the scope of what we're going to have to do in there just to get it stabilized. That's the current work. Early action would be the next stage. Not fully funded. We'll have to start thinking about this, but I'm putting it out there so you can see it. Undertake the remediation. Like I said, it's substantial, but it's important. We're estimating about $250,000 for stabilization jump sheet. Is that right? Which will be based on the structural report that's going to happen this summer. And then there's some cosmetics, which is actually just going in and straightening the blinds on the windows and things like that. So that's pretty easy. And then we'll be at a decision point. We'll have a much better idea at that point as to, A, what is the liability of the building? So what's it going to take just to get it to a place that either a lessee or a developer would be interested? We'll then see a development partnership, whether that's through an RFP or request for ideas. The city may undertake it themselves. We'll have some decisions to make at that point. However, no matter which direction you go, if you're going to utilize those sources of funding we talked about, particularly the tax credits, you'll have to establish legal ownership structure and get together some conceptual design and cost estimates. So that will be the next phase. And then once we've actually got a development partner in place, we've got a likely tenant at the end and a business plan that makes sense for the city and for the public, then we would move into pre-development, at which point you would actually do your final design, your hard cost estimates, put in the tax credit applications, secure financing, and to move forward. So this is where we're at on the continuum. We're in the first column, and we'll be in the first column for the foreseeable, you know, 6 to 12 months. And I think we'll be in the early action hopefully from 12 to 18 months. So that's where we're at in the update. All right. Thank you, Jeff. Absolutely. Any questions from the council or the committee thereof? You're clear. All right. I'd be happy to share and have any conversations with the folks who'd like to. Thank you. If you'd like to take a quick look at items referred to committee, we can go ahead and do that. I think the list is, as I remember, relatively short. Any subtractions? Hearing none. might we have a motion to adjourn all in favor come on I've only got one vote here all right thank you all Thank you.