# Environmental Quality Committee - February 18, 2014 > Auto-transcribed civic record · February 18, 2014 - **Permalink**: https://meetings.lexingtonky.news/meeting/3247 - **Source video**: https://lfucg.granicus.com/player/clip/3247?view_id=14&redirect=true - **Date**: 2014-02-18 - **Last revised**: July 15, 2026 - **Length**: 20,517 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Environmental Quality Committee met on February 18, 2014, at 11:00 a.m. at Lexington-Fayette Urban County Government, with Stinnett presiding. The committee addressed five agenda items, took five motions and votes, and heard five public comments during the session. The committee approved the January 28, 2014 Committee Summary and approved Items Referred. Two informational presentations were provided on the Tree Canopy Survey and Monthly Financials. The Material Recovery Facility (MRF) Audit was deferred to a future meeting. ## Attendance **Present:** Stinnett, Mossotti, Gorton, Akers, Farmer, Scutchfield, Myers, Ciarke, Henson, Lane **Absent:** Kay **Late:** None ## Votes and Decisions The committee took five votes during the February 18, 2014 meeting, all of which passed by voice vote. **January 28, 2014 Committee Summary** [timestamp: 0:00:00] A motion by Scutchfield, seconded by Gorton, to approve the January 28, 2014 committee summary passed by voice vote. **Division of Water Quality Construction Process** [timestamp: 0:00:00] A motion by Myers, seconded by Scutchfield, to remove the division of water quality construction process from the committee referral list passed by voice vote. **Annual Report on Public Education Effectiveness** [timestamp: 0:00:00] A motion by Farmer, seconded by Scutchfield, to remove the annual report on public education effectiveness from the committee referral list passed by voice vote. **Waste Management Expenditure Audit** [timestamp: 0:00:00] A motion by Myers, seconded by Scutchfield, to remove the waste management expenditure audit from the committee referral list passed by voice vote. **Adjournment** [timestamp: 2:15:59] A motion by Farmer, seconded by Clarke, to adjourn passed by voice vote. ## Budget and Financial Actions The meeting included a review of monthly financials across multiple fund categories: * **Sanitary Sewer Operating Fund** — Monthly financial overview presented * **Water Quality Fund** — Monthly financial overview presented * **Construction Fund** — Monthly financial overview presented for the newly created fund No specific dollar amounts, resolution numbers, or vendor information was provided during the financial discussion. ## Public Comment Council members raised several concerns during the meeting, focusing on recycling facility management and urban forestry coordination. **Recycling Facility Management** Council Member Lane [timestamp: 1:38:29] praised the audit report as thorough and detailed, noting that the Materials Recovery Facility (MRF) has been grossly mismanaged for years due to inadequate accounting, poor management, and lack of transparency. He advocated for restructuring the MRF into an enterprise fund and implementing new management and accounting controls. Council Member Scotchfield [timestamp: 1:40:44] commended the audit for bringing critical issues to light and stressed the need for the committee to address mismanagement, improve transparency, and ensure accountability in the MRF's operations. Council Member Hinson [timestamp: 1:42:51] emphasized the lack of communication from management regarding critical issues including the MRF audit, RFPs, and hiring an accountant. He requested a written action plan with next steps and monthly updates to ensure accountability. **Urban Forestry Program** Council Member Akers [timestamp: 2:04:32] highlighted concerns about the fragmented nature of the urban forestry program, which operates across multiple departments. He stressed the need for centralized control and coordination to maximize program effectiveness. Council Member Farmer [timestamp: 2:08:27] connected tree canopy data to practical city services, suggesting that canopy coverage information could inform leaf collection prioritization, particularly in districts with high tree density. ## Contested Items **Lack of Follow-up on Audit Recommendations** Council members expressed significant frustration regarding the repeated failure to implement audit findings. Council Member Myers and Council Member Henson were particularly vocal in emphasizing that prior recommendations had been consistently ignored. The core disagreement centered on the absence of enforcement mechanisms and accountability measures to ensure that corrective actions were actually implemented. Council members stressed the need for stronger oversight to prevent this pattern from continuing. **Mismanagement and Transparency at MRF** A heated discussion arose over systemic failures identified in Materials Recovery Facility (MRF) operations. The audit revealed multiple serious issues, including poor accounting practices, safety risks, and inadequate oversight. Council members criticized the lack of communication and transparency surrounding key operational matters, specifically citing concerns about the Request for Proposals (RFPs) process and the failure to hire an outside accountant. The disagreement reflected broader concerns about governance and accountability at the facility. ## January 28, 2014 Committee Summary [timestamp: 00:00] The committee approved the January 28, 2014 summary without dissent. Key speakers on this agenda item included Scutchfield and Gorton. During the discussion, council members emphasized the need for improved communication, transparency, and follow-up on audit findings. No specific concerns or objections were raised during the approval process. The summary was approved as presented. ## Material Recovery Facility (MRF) Audit [timestamp: 00:15:21] Bruce Sahli and Charles Martin presented findings from an audit of the Material Recovery Facility. The presentation identified 12 critical issues requiring attention: **Key Findings:** - Lack of segregation of duties in financial and operational management - Inadequate security measures at the facility - Excessive overtime costs - Poor accounting practices - Absence of formal contracts with affiliate organizations and BRRC (Blue Ridge Recycling Company) **Committee Concerns and Recommendations:** The committee emphasized several operational and management priorities: - Need for a dedicated plant manager position - Requirement for an on-site accountant to improve financial oversight and controls - Improvements needed in safety protocols and practices - Development of a formal action plan to address the identified deficiencies **Outcome:** The agenda item was deferred, indicating the committee did not reach a final decision or resolution at this meeting and plans to revisit the matter at a future date. ## Tree Canopy Survey John Saylor and Jenny Gulick presented the results of an urban tree canopy analysis [timestamp: 1:46:12]. The analysis found that the urban service area currently has 25% canopy coverage. The presentation included several components: * Results of the urban tree canopy analysis * A prioritized planting plan * Ecosystem benefit calculations * Tools for future management The committee discussion that followed identified key needs and opportunities for the city's urban forestry efforts. Susan Pluger participated in the discussion alongside the presenters. A primary concern raised during the discussion was the need for a unified urban forestry management plan to guide future tree planting and maintenance efforts across the city. Committee members also discussed the potential for public-private partnerships to support tree canopy expansion and management initiatives. The outcome of this agenda item was informational, providing the committee with data and analysis to inform future policy and planning decisions related to urban tree canopy. ## Monthly Financials O'Mara presented a financial snapshot covering three fund areas: sanitary sewer, water quality, and construction funds [timestamp: 2:15:00]. **Key Presentation Points** O'Mara provided updates on the current financial status across the three funds, offering the board with an overview of the financial position during the reporting period. **Issues Identified** During the presentation, discrepancies in revenue reporting were noted. O'Mara identified concerns related to collection rates and billing system performance that required further investigation. **Next Steps** O'Mara committed to conducting additional research to address the identified discrepancies. This research will focus on understanding collection rates and evaluating how the billing system is performing. **Outcome** This agenda item was informational in nature, with no formal action taken. The presentation served to update the board on current financial conditions while flagging areas requiring further analysis and follow-up. ## Items Referred The committee voted to remove three items from the referral list during this discussion. The items removed were: - The division of water quality construction process - The public education effectiveness report - The waste management expenditure audit Key speakers in this discussion included Stinnett, Myers, Farmer, and Scutchfield. The committee also addressed the broader process for handling referred items, noting the need for revenue analysis before dropping additional referred items from consideration. This discussion reflected the committee's effort to manage its referral workload while ensuring that financial implications were properly evaluated before items were removed from review. The outcome of this agenda item was approved. --- ## Decisions - **Motion** — passed: Motion to approve the January 28, 2014 committee summary - **Motion** — passed: Motion to remove the division of water quality construction process from the committee referral list - **Motion** — passed: Motion to remove the annual report on public education effectiveness from the committee referral list - **Motion** — passed: Motion to remove the waste management expenditure audit from the committee referral list - **Motion** — passed: Motion to adjourn --- ## Full transcript I Thank you. Love the only thing that keeps me here You're the reason that I'm hanging on My heart stays where my heart belongs I say Never helps no man who fights in fear Love the only thing that keeps me here You're the reason to... Sailing on the cool and bright clear water There's lots of those friendly people They're showing me ways to go But I never want to lose their inspiration Time for a cool change I know that it's time for a cool change. And now that my life is so prearranged, I know that it's time for a cool change. Well, I was born in the sign of water And it's there that I feel my best The almatross and the whales, they are my brothers It's kind of a special feeling When you're out on the sea alone Staring at the full moon like a lover Time for a cool change I know that it's a war for a cool change Now that my life is so free of rage I know that it's time for a cool change I've never been romantic And sometimes I don't care I know it may sound selfish But let me breathe the air Yeah Let me breathe If there's one thing in my life that's missing It's the time that I spend alone Sailing on the cool and bright clear water guitar solo Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. guitar solo guitar solo guitar solo guitar solo Thank you. guitar solo guitar solo guitar solo Thank you. Thank you. Thank you. Thank you. Okay, we'll go ahead and get started. It's 11 o'clock. This is the Environmental Quality Committee meeting. First up on our agenda is motion or committee summary from our January 28th meeting. Is there a motion by the committee to approve? Second. Motion and approve. Any additions, subtractions, deletions? All in favor say aye. Aye. Any opposed? Okay, that passes. Second up on our agenda is the material recovery facility audit, and this will be presented by Bruce Salley of our internal audit department. Mr. Salley, you want to come up and take it over? As normal, sir, we'll have 15 minutes to give your presentation, and then we'll open up the floor to questions. Well, thank you very much. As you received in your packet there, there's the report of the material recycling facility. And this was an audit done of the collections process. It also included some review of the inventory process and some safety and security issues as well. The report was actually issued on January 24th, 2014. And we've already received some responses from Charlie Martin regarding how the concerns that were noted in the audit report are going to be addressed. There were 12 findings in the report. The report was an objective not met because of the significance of the findings within it. Charlie Martin has actually put together, I think, some information that he wants to provide this morning to the council because he and I worked very closely on this because of the significance of the findings to try to go ahead and explain how that the Division of Waste Management is trying to address them. So I think probably the best approach here for the Council of Bo C in terms of a summary of the findings and how these are being addressed would be for Charlie to come up here. And I think you have some slides. No, I don't have slides. Okay. Go ahead. Let me speak for that. All right. I don't mind that happening, but I also want to know what the audit findings were. So, Charlie, if you're going to address that as you go, each one, or Mr. Sully, if you can address each one and then Charlie can jump in under each one, if that works better. Because I think we need to know publicly what those findings are. All right. I'll be happy to address them. I'll be glad for Charlie to address them as we go. Right. Yeah. One of the big reasons I was thinking of doing that was because of the time limit on this. Because there's a number of findings. The first finding in the report is that MRF should be considered for assignment to a separate enterprise fund. One of the things that we noted is that the MRF is really like a standalone manufacturing facility. And therefore, because it is actually selling a commodity to the open market, we feel that it in most ways meets the definition of an enterprise fund. I know that one of the things the council is often interested in is how much does it cost to run a particular process? Well, one way you can really know for sure how much it costs to run a process or a facility or function is to have it assigned as an enterprise fund. That way, all of your revenue, all of your costs are assigned specifically to that. And then if you have a situation where it can't be self-sustaining, which an enterprise fund typically is, then you still, as we understand GASB, you're still allowed to use general fund money to subsidize it. But it gives you the opportunity to really get a good handle on here's the specific revenues, here's the very specific costs related to that, and how much you either are making or losing in operating this particular function. The second finding. Hold on, Bruce, let's stop here. Charlie, do you want to interject as we go? Is that okay with the committee? That way they can address it as we go and we can ask questions because there are several. And if we go through them all, we may miss things at the beginning. And just in fairness to Mr. Martin, just so people watching and those in the audience as well, he is the acting commissioner over this department. He's not the director that responded in the audit, but there was some brief response. And I appreciate, Charlie, you being in your role the last couple months to have an opportunity to review this. So we have a lot of patience for you and leeway, given that you're just addressing these issues in this department. But again, he is not the director's response piece in this audit. That director has since retired. So, Charlie, you want to take over? Yeah, just to phrase that, I got this two days before Christmas as far as the division's response. So I guess that was my Christmas present to work on. Merry Christmas. Thank you. As far as in response to the first one, what I said in the response audit is still maintain that, is that that's really a decision that needs to be made by the administration and the council, the leadership of this community. It really isn't my decision on whether or not this is an enterprise fund or not. I do agree with Bruce, though, and this is what we've been spending all of our time once since the, or a lot of our time since I completed my response is a focus on cost of operation in comparison with revenue so we can make a determination of whether or not this is a moneymaker, a break-even proposition, or a losing proposition. There's got to be greater clarity to that in order to be able to move forward. How we go about doing that, again, I will defer to the administration and the council on whether or not an enterprise fund is the correct mechanism to do that. Very good. Any questions for Charlie? If you'll log in, please, and we'll keep a tally. I saw Councilman Lane's hand first. And Councilman Henson next. Thank you, Chair. You want Henson to go first? I'll let you have that high side. Councilman Henson, go ahead. I was just wondering if anyone here could possibly answer how long of a process it would take to convert this fund from the urban service fund to an enterprise fund. I know I can't speak to it. And quite honestly, you know, in light of the other issues, the other 11 findings regarding plant management and safety and the contractual or the absence of contractual relationships with the affiliates and with BRRC, most of my focus has been on getting those things addressed and resolved. Bruce mentioned that I might have slides. I don't. Basically, I have developed a spreadsheet that has broken down each one of these items, with each one of them being a tracking mechanism for, A, who owns the problem, and, B, what are we doing about it? That was what Bruce mentioned that I sent to him on Friday. My commitment to him on any of these things is to keep him abreast of what we're doing, as opposed to him having to ask me. what we're doing about this. But again, as far as this one, I don't know how long it would take. I don't know if it is appropriate to take or not. Like I said, I'm deferring to others to run with that one. But in order for us to be able to even make that work, if we're doing that, if we don't get to the crux of these other 11 issues, I think that we will end up with a system that will be hard to validate because of the tracking of costs operationally. and also revenue? I feel like it is an important piece. And if at all possible, we should know where our weaknesses are, where we could increase revenues, where we could be more efficient within the MRF itself. So maybe it is to come later, but it's something that I certainly think is a good idea. And, Council Member Hanson, we'll keep this. This is a longer discussion on what an enterprise fund is and then does this fit that definition that we may need to have in committee because there's a lot more to it than just creating a fund. Is it an enterprise fund to begin with? That's the first question. We haven't answered that yet. So we'll keep it in committee as we go. Council Member Lane. Thank you, Mr. Chairman. This is for Mr. Martin. Yeah, based on what I know about this, part of the problem is our accounting system is not adequate to account for all of the moving parts of the recycling process. Because we are, as I understand this, and correct me if I'm wrong, we do reimburse some of the counties for bringing recycled materials to us. They get some payment for that. At the same time, we're also doing the recycling for them. And then we're selling the surplus recycled materials on the open market, and that market varies depending on the demand for steel, aluminum, or whatever. Or having, I know you're new in this slot, but having looked at this, you know, are you as concerned as I am that we might be losing money, again, subsidizing the recycling for other counties in our process? Or do you just not even really know at this time because the accounting is not adequate to project whether we're losing or making money? I don't know for certain. And that's what we've got to get to the bottom of. Is there an appropriate linkage between operations costs and the actual cost of processing recyclables on a per ton basis? There's a major disconnect there. In developing the draft memorandum of understandings that I've begun to distribute to the affiliates, one of the things I've left out of there is the cost per ton as far as processing their recycling. because I've got to make sure, and this is in the context of the overtime thing, is that we're operating this efficiently before I show up and tell you how much it costs per ton. I better make sure that I've got a handle on what those costs really are. So, yes, I think that there are major improvements that need to be done in the accounting process to be able to determine whether or not that we're processing each ton in an efficient manner, tracking those costs, and then those costs are being allocated appropriately to the various contributors. Yeah, because there is another benefit of recycling that we don't have to haul trash to the landfill, and we have a cost incurred there. As I said, there are a lot of moving parts to the process, and with some of a weak accounting system, I guess it's very difficult to analyze, you know, where we are and what our bottom line numbers are. The BRRC, which is mentioned in the audit, Bluegrass Regional Recycling Corporation, I've had some discussions with the operations manager for that group because they're basically playing a role of broker in a lot of these different commodities. I've asked for a meeting with him on the 28th, and I've already exchanged some information that I'm interested in. What truly is their role as far as the allocation of those costs? And also the revenue stream is there. There's a spreadsheet that gets generated on a monthly basis that breaks down how much came out and then how much went and went to other folks. You know, we've got to, I think this is what Bruce was alluding to in the audit, that there is a clear and reproducible mechanism at which to track those things within PeopleSoft as opposed to doing it on an Excel spreadsheet. All right. Okay, I'm going to stop with questions there. Thank you very much for your input. Council Member Massadi. Thank you, Chair. I don't know, maybe, Charlie, you can answer this. You said BRCC. How many other private recycling facilities are there in Lexington or in the surrounding counties that we compete with? Well, right now, BRRC plays basically a role of being the broker, is that they do some relationship with various mills and vendors who buy the product or take delivery of the product. And then you've got what I'm calling the affiliates, which would include Rumpke, Republic, some of the surrounding counties. They deliver to us, and we charge them a processing fee. And then through BRRC, the materials then are marketed out after they're sorted. And then there's this calculation that goes on that determines how much of that sale gets returned back to the affiliates. So it's BRRC, which is kind of in the central part of it, and then there's the affiliates that are either bringing materials to us and being paid for them, and in some cases there's ones that are just bringing materials to us, and they're not deriving any revenue from it whatsoever. We're deriving the revenue. So we are the main facility then? We're the processing facility, and we're using BRRC in a lot of ways as far as our administrator slash bookkeeper. that would be about the best way that i could could describe it we're processing it we take it at the facility we run it through using a combination of lfucg labor and otherwise but all of this mixed bag of what you put in your rosie every week gets sorted through the process to where plastics of this category goes here cardboard goes here and it all gets shipped out in bales to these various vendors and vrrc does the the actual brokerage part of that one okay thank you for the clarification okay and this is on finding number one councilman henson i just had a follow-up question chair thank you charlie if if we're bringing if we're bringing in recyclables from other counties or municipalities, don't you think it would be a good idea for us to know if it's really making money before we take on more product? If we were at, you know, if we're losing money on the products, why would we continue to take them in? Is that just for the environment or? I think there's a variety of reasons. One is that, you know, historically, I think we all know that rural portions of the state of Kentucky have had waste management issues. It's my understanding that historically one of the reasons this got set up was a way to be able to encourage more recycling within the Bluegrass region as opposed to people just dumping along the sides of roads and things like that. So you've got some of the other smaller entities that are kind of counting on LFUCG to continue to fill that role where there's a void in the market otherwise. Otherwise, the recycling goes away. So, you know, rather than just simply pulling the plug, which in the early days of this, I was wondering the same thing you are. Why are we doing this? As I've peeled back that layer, I realized that I think that there is a social reason why we're playing the role that we are. It gets back into Council Member Lane's question is, are we doing it in an equitable fashion? Likewise, then, you've got the state regulatory folks as well, the Division of Waste Management in Frankfort that works under the Environmental Protection Cabinet. I think they're going to have a certain expectation of what Lexington and these other communities are doing. And just to give you, I didn't bring that down with me, but we're talking about Frankfort. We're talking about Franklin County. We're talking about Madison County, Bourbon County, Winchester. So it's some of our other surroundings. This was established to be kind of a regional partnership. And until we can get a better handle on where those numbers really lie, I think that it would be my recommendation that we continue to see that partnership through, but we do it in an equitable way. Thank you, sir. Thank you, Councilmember Henson. All right, finding number two, and this is the exclusive management team to operate the management operation. And I would want to make just one more point, if I may, about the benefit potentially of having this as an enterprise fund. As Charlie was mentioning, there are a lot of surrounding counties that bring their recycled material to the MRF. Those are then recycled at MRF or so to mills that buy the product as a raw material. And we currently charge each of those counties and organizations a $35 per ton processing fee. If you have this set up as an enterprise fund and you're able to track your revenue and your costs more exactly and see what the bottom line effect is, then that may give you a cause to raise your processing fee or lower it depending on the effect that you're seeing in the market for the commodities. So it would help you potentially be able to gauge whether your processing fee that are charging other counties is too high or too low, and it may be adjustable based upon the fluctuations the market is paying for these commodities, if that helps also to understand that. It does. And I was going to wait until finding later on in the audit, but since you brought it up, how did they come? Did you look at how they came up with $35 per ton? I don't remember on the top of my head. I think that was something that was agreed upon some years ago, and I would have to get back with you on specifically how they came up with that. And I don't know that it's been looked at recently. That's my next question. So it hasn't been adjusted, hasn't been changed. That's been what it's been for a number of years. That's my understanding, yes. It's a big issue. Continue, please. Finding number two, the MRF operation needs an exclusive management team to manage its operations. As we note in the finding, the MRF operation is sort of a standalone manufacturing facility. The division director of waste management has MRF underneath him as well as about 200 other employees and various other waste management collection and processing functions. And we feel that one of the issues that the MRF was experiencing was the fact that there probably needed to be a senior management individual, and we thought maybe at the deputy director level, Charlie is thinking in terms more of a plant manager, and I can understand his reasoning there as well, but someone who is hired in and assigned the task of correcting the problems and implementing the recommendations, and then managing MRF on an ongoing basis as a dedicated senior employee for that operation. finding number three kind of along the same lines again murph i'm sorry i was going to ask charlie if he had any response on item two finding two if you don't i understand about you had a pretty long response in our audit so i just want to give you an opportunity to just to let you know where we stand on this right now i have developed a job description is it's focused on the plant management aspect of things that has been distributed to through contacts with commerce Lexington, several individuals who contacted either the mayor's office or me directly after seeing the article in the newspaper. So we're actively pursuing someone with a manufacturing background that can come in and be able to, essentially part of their scope is to spend a certain period of time collecting the financial and the trend data necessary for us to make decisions about what the short-term or long-term viability of continuing the operation is. Okay. Any councilors have a question? Councilor Myers. Thank you, Mr. Chair. So if we hire that person and they come in, is there an opportunity to look at maybe taking over this piece that BRRC does? Yes, there is. I think everything's on the table. As I mentioned earlier, I had a short of 30 days to provide Bruce a response because he's on an aggressive schedule, like we all are. And honestly, I think my answer that I would give you today is much different than the one I would have given you at the end of January because as I've peeled back the layers, I'm seeing what is a familiar type of situation. In my home division, we run two treatment plants. It's not a whole lot different. The only difference is that nobody buys what we make, which is clean water. But it's still a manufacturing facility that has to operate efficiently. And some of those things could be taken in ourselves. Again, that's why I'm trying to meet with BRRC, so I make sure that I'm clear what functions that they're providing for us and at what cost that they're providing those for us. because then if myself, the acting director, Tracy Thurman, and this plant manager can understand and validate to you folks that we can do it differently, better, and less expensively, there's a solid recommendation moving forward. Okay, thank you. Okay, Bruce, finding number three. Finding number three is really in many ways somewhat similar to number two. It addresses the need for an accountant on site at the MRF because, again, of the fact that the MRF is kind of a standalone manufacturing facility. And we noted various accounting issues that were occurring at the MRF, accounts receivable not being tracked, inventory not being reported to the Division of Accounting, inventory not being reconciled to the available product records, affiliate payments being deducted from revenue rather than being put through a accounts payable account. Revenue transactions being reported in the incorrect fiscal year because of timing differences. All of those things pointed to the need for an on-site accountant, somebody who really had an accounting background and could help to manage the day-to-day accounting needs of that facility. The one thing that we do mention in the report here, and I think Charlie and I are very much in agreement on this, is that the accountant at the MRF, operationally, they need to be taking their directives from the Division of Accounting. because we want that accountant to have the independence necessary to produce the accounting records that are accurate and complete as directed by the accounting director and not directed by someone who maybe does not understand the accounting process and what its needs are. Very good. Charlie? I don't really have anything to add to that. It's dead on. So, you know, we're making progress in working with the accountant that was hired basically under a contract type of thing for less than $20,000. I've talked to her several times. I sent her the audit. What I found in the aftermath of the audit is that she wasn't really focused on that aspect. And so we're working to get her focused on those things. You know, she could write some really good SOPs, I'm sure. But to me, this still comes back to the plant management aspect of things, because if we don't implement something that is sustainable over a long term, then you've just got a stack of SOPs. And so I'm really trying to focus on the sustainability of whatever corrective action we take while we look at the long-term future of our role at the MRF. But in the meantime, we're making progress on that on multiple fronts by utilizing the services of the former director of accounting for our urban county government. So just to be clear, we hired an outside accountant. Basically, yes. And because the council wasn't notified because it was under a $20,000 contract. That's what I'm told. I had no role in that whatsoever, as you can see from the division's response. Basically, that was something that I inherited, but that's my understanding, yes. So we weren't notified. How long is this contract for? It is kind of an indefinite thing. It's not to exceed a certain amount, and it's almost as a will call type of service agreement. When I first looked at the scope, because that was one of my questions when I saw the audit and was reviewing it is that, okay, what exactly is this person supposed to be doing? And it was pretty clear to me is that they weren't hired to deal with this. It was more about trying to develop written standard operating procedures to stop doing some of the things that I think that the internal audit had identified in some other audits, which was essentially taking delivery of commodities or goods and then putting the purchase requisition on in the aftermath. So how long will we continue to use this person? And are we ever going to hire a full-time accountant to be out at the MRF? Yes. Let me answer your first question. I'm still working with her. Again, my focus has been on the plant management aspect of it, because even if I hired an accountant tomorrow, the best one in the whole world, then I would send he or she out there to be somewhat rudderless, because there's a huge void in the day-to-day management of the MRF. To me, it's paramount that we get a plant manager who has extensive experience in a manufacturing environment. That person very well may be able to bring along with them the financial controls that we are looking for. They probably carry them in their hip pocket. If they've been in a private sector manufacturing facility before, they've been there, done that. I really believe that. Okay. We do have a Council Member Henson signed up. Thank you, Chair. And, Charlie, I really appreciate you taking this on. I guess my question would be, it's like in the audit there's a recommendation to hire two people, an accountant and a plant manager or vision deputy director or whatever. But if we really don't know how much money that we're generating, why do you take on new people? I don't know. To me, it would just make more sense to find out how much money do you have, how much are you bringing in, or do we need that in order to tell us those two positions? That's a very good question. Again, my focus has been on the single position. Deputy director isn't even on my radar screen. Plant manager is. The way this is worded, it is a contract type of situation to where it could be severable at any time. The one person that I've already actually come in, he has interviewed with myself, Tracy, and Brad Stone. He came from the private sector. had opened up and ran two facilities in Mexico for a Fortune 500 company. But basically, I told him, I said, if you're going to do this and do this right, you very well may be working yourself out of a job. And I'm being clear to that with everybody that I'm talking to, is that there is not a long-term commitment for this. Part of the scope of services for this plant manager is to do that overall evaluation. And if they do it honestly, sincerely, and thoroughly, it's going to come out with an answer. And the answer may be that we need to do this and continue our role. It may be that, and it may be that we can completely outsource this to somebody else or somewhere in between. Everything's on the table as far as I'm concerned, but it's not a long-term, it's not a civil service position that I'm looking for. That's good to know. Thank you. Thank you, Councilmember. Finding number four, security issues. As it notes in the report, we noted several security issues at the physical plant of the MRF. Some of this was brought to our attention by employees who worked there. We were informed about several interior and exterior doors that had never been re-keyed and that there was no way to determine how many keys may exist or who may possess them, including employees who no longer work at the MRF. We noted one door in the back of the plant that was broken and could not be locked. We noted that the lower gate, which was secured with a combination padlock used by drivers to access the premises after hours, was really not sufficient security for that plant. We did see that there were some cameras that had been installed and that there was a chain link fence around the MRF. However, we feel that there was a significant accountability issue at the plant when you consider that there was no accountability for the keys. There was no guaranteed security of the administrative offices and probably the biggest worry of all, if you've been to the MRF and you've seen how the facility operates and the machinery that is used to recycle this material. If someone unauthorized were to enter that plant and get into that manufacturing process, into that actual hard physical plant and fell into this machinery, then potentially the urban county government could be looking at a very, very significant event. Someone could be injured or killed, and then potential for a lawsuit, certainly bad press would be a very significant issue. So our recommendation there was to increase the security, to go with having the doors rekeyed, increasing the security of the gate by having an electronic gate and the ability to determine who came in outside of the gate during off hours, who was accessing the plant when the plant was closed. Any questions about finding number four? Charlie, do you have any rebuttal or response or positive news? I have no rebuttals. I only have anecdotal information. I mean, the safety thing, and I don't disagree with Bruce, but I will say, you know, again, pointing back to my home division, we have safety issues in a lot of different places. It wasn't until the last couple of years that I was able to cobble together the money to be able to get a fence built around West Hickman. So when you talk about risks and all those kind of things, I mean, unfortunately, we have a lot of those, and I know that a lot of folks are focused on them. But that being said, is that for this one, I was really concerned about the safety issues, and I felt like those were things that we could address in the near term. And so Acting Director Thurman is taking that one over, and she's the owner of that in my little spreadsheet here as far as tasks and ownerships. One of the things that we've done is we've reassigned duties, is that there is a safety person, dedicated safety person, waste management. Now that person reports directly to Tracy Thurman, not through a different chain of command. And so she's holding that person highly accountable to implement the steps that are necessary, not only at the MRF, but throughout waste management. Secondly is that I know that risk management and that safety person now are collaborating. I think you'll see quite a bit of response in that in your packet following the audit itself, where there's significant progress being made on addressing some of those safety issues that Bruce mentioned. And then lastly, the security that I know that Tracy has been working closely with Jamshid and our security folks down at the front desk, that the cameras are now queued into LFUCG safety, I mean security here to where they're being monitored. So I think that's because it was one of those things I viewed as with a commitment as fairly low-hanging fruit. I think we made a lot of progress. Can I declare it completely resolved? Not quite at this point. Thank you, sir. Okay, finding number five. As the audit notes, there was a significant amount of overtime that was routinely incurred at the MRF by certain employees. A small matrix that is provided to you in the report notes that in 2011, five of 16 employees, that's 31% of the employees, received 86% of the overtime. In 2012, 37% of the employees at the MRF received 91% of the overtime. And in 2013 through July 25th, 28% of the employees receiving 88% of the overtime at the MRF. Now, some of that appears to have been driven, probably a significant portion of it being driven by the way that maintenance was being done at the MRF. They were allowing employees to work a regular shift, and then they would stay over and do maintenance work on the MRF. so that had something to do with the reason that only certain individuals were receiving the overtime hours. But we think that there are certainly some better ways to manage your overtime there. Now the division did not go over on its overtime for the whole division, but they did exceed the overtime that was assigned for the MRF each one of these years. So our feeling is that there's a couple of safety issues involved here. if people are working a full shift at the MRF on a regular basis and then they're going in and doing the maintenance work on the machinery week in and week out, then if a fatigue factor becomes an issue, the type of machinery they have there, you could have an injury. We also thought that there may be a potential for setting up a second shift that would do the maintenance work, as opposed to having this being done by just employees who work on the floor on a regular basis. The overtime issue there was, it was significant enough that it was actually brought to our attention by the deputy CAO while we were doing the audit, that he'd gotten wind of the overtime and he asked us to look at it as well. Any questions on number five? Thank you, sir. Charlie, anything to add, respond to? Right after the audit came out, Acting Director Thurman had ordered that we shorten the duration that the line runs from eight hours a day to six hours a day, with the intention of taking that additional two hours to perform the necessary preventive maintenance that needs to happen. preventive maintenance is kind of a large term there is that basically you can imagine that the equipment needs to be cleaned up it's like a confetti it's like a parade in there every day by the time all this paper and all this stuff runs through this it hangs on pieces of equipment it's just everywhere and so it's a necessary thing Bruce's suggestion that we're running a second shift I think is a good one but again I've lumped this again into that plant management issue I I don't want to make a decision from 200 East Main Street when really somebody who's on the ground there would have a better idea of what the long-term sustainable approach would be. But in the interim, we've tried to reduce that overtime by shortening the time that the line runs. That way that at least cleaning preventive maintenance can go on on regular time as opposed to overtime. One of the real problems out there, and I'm not used to this in my home thing as well, is that there's a lot of places that is a pinch point in the process. I spent five and a half hours out there a couple of Thursdays ago essentially walking through the whole process. In treatment, you have redundancy. In this process, there's a single conveyor that leads to a lot of the processes. And so one thing that goes down shuts down the whole operation. And we've got to look at that really hard to try to figure out ways that we can do the preventive maintenance necessary to minimize, if not eliminate, the shutdown. Because then that's going to have a huge cost to your overall cost per ton of processing. Thank you, sir. We have a couple of council members signed up. Council Member Henson. Thank you, Chair. Charlie, in the report, audit report, it says that there was an RFP issued. It's under review for a new contract. Are you setting that aside or what's going on with that? I'm setting it aside right now because one of the things, the findings of the audit, and I don't know if it's here, it's mentioned later, is that we have existing contract operations, and the previous plant management staff weren't monitoring them very well. If, for example, that they were supposed to have a lead worker there that apparently never was there. This new contract would essentially be substituting the ones that are there, and I felt like in absence of having a strong plant management, that you're just substituting one for the other. I think that the pending RFP, I think that that company is, from what I've read about it, is highly reputable. I think they would be a good addition to the mix out there. But again, in absence, somebody from the client, us, has to be telling them what they're supposed to be doing. Or otherwise, they're running along rudderless and billing us on an hourly rate to do it. And that seemed unwise. I agree. Thank you. Councilor Myers. Thank you, Mr. Chair. In terms of the overtime, if you took out the people that were doing the preventative maintenance as overtime, is there still a lot of overtime being done, or was there? No, I think that largely it is the preventive maintenance. In the short time frame that I had to really dig into this, is that I couldn't really figure out how much of it was, like I said, the housekeeping preventive maintenance versus I've got to take out this gear. I've got to take out. It requires a level of mechanical aptitude. I know one of the things that Tracy had worked on was trying to get the appropriate folks doing the appropriate thing because you don't want the $35 an hour guy pushing the broom. Right. So, I mean, we're still trying to work through those issues. The other thing that was creating us a lot of challenges on addressing this over time in the near term is that essentially there is no heat in that facility other than what the machinery produces. So here when it was like zero degrees outside and all that, we were kind of struggling with just trying to keep the line up because the offices were warm, but out there on the floor and on the sorting thing, it was frigid. So now with better weather, I think we're going to have to be able to get a better handle on being able to address the overtime. But it is an ongoing issue. They are short staff as well, but it goes back to Council Member Henson's question about, I'm not so sure I'm ready to rush out and hire folks to try to be able to offset the overtime when I'm not so sure I know exactly what the long-term outcome is for it. It is a work in progress. So my other question would be, have we looked at someone else in our government, our maintenance department, doing that preventative maintenance? No, I don't. You know, I guess maybe I'm a little bit biased as well, is that we've got some fine folks in general services and stuff. But this is an industrial application. I'm not so sure that it's entirely within the skill set of a lot of those folks. You know, electricians will tell you there's a difference between a residential electrician and a commercial, you know, and so that might be a little bit challenging. What we're looking at instead is opportunities to create a contract maintenance type of thing to where you would have a third party come in and do pull that preventive maintenance either in the off hours or on a Saturday, all geared towards trying to eliminate or minimize downtime of the line. Right. Because if we're down for four hours and we've got people standing around, we're bleeding money. And that's what I was thinking. If you shorten them out in the time that the line's running, then we're sort of doing that. Well, no, because we're sending the people home or, you know, we're sending home the people except the ones who are pulling the preventive maintenance. So if we're shortening the line, we're not letting people just stand around. And basically, we're just running a six-hour operation instead of an eight-hour one and keeping the other staff in to sweep, to grease fittings, to do the things that need to be done in order to prepare the line for tomorrow's run. Everybody else goes home. What's happening, though, with the short hours is the tipping floor volume is increasing. There's that big domed building out there. If you go inside of it, the amount of stuff that's sitting in there now versus what was sitting in there a month ago is more because we're not processing as much as we were before. And as the weather changes, this may catch up with us. As people start cleaning their garages out and things like that, the volume starts going up. Okay. I'll have a follow-up question about the efficiency of this after we're done to go back to that point. Thank you. No other counselors have signed up. I do have two questions, though, Charlie, for you. One, who approved this overtime? Who signed off on it? Well, we're trying to get to the bottom of that, too. I told Tracy I want to know who signs off on all the overtime in waste management. So we don't know who signs off on overtime? I can tell you right now. I could go tell you if I went and looked. Was there a budget amendment done? Do we know that? To move the money? Because somewhere in that account, there was a deficiency. And there had to be money moved into that account to pay that overtime. I may be misspeaking. I'm sure that Bill will come up here and tell me otherwise. but typically things budget check at the department level. So if the MRF had overtime that that particular line had got overspent, it very well may go to administration and to other 60,000 accounts, which are the overtime and personnel costs. And so it would not have necessarily been caught, except at the monthly budget meetings that we have with finance. Each one of the divisions meets with finance and budgeting folks to review where their status is. But a budget amendment of moving overtime money from administration to the MRF would not have come through this body because it was an operating account. I just have a hard time, though, understanding why it wasn't caught over three years, not just the three years we know about, during those budget meetings with the finance department. I mean, to me, we've brought groups before this committee and other committees and talked to them about why their overtime is so high and publicly have asked them to reduce, et cetera. And then I just can't have a hard time understanding why this wasn't caught. I know it wasn't you, but I want to correct it going forward. The other issue I got, and Council Member Henson asked about it, an RFP was issued. When was that RFP issued to look at the management from an outside group? Oh, as far as for the contract operation group? Yes. It was before I came in in November. It was something that I inherited, and folks were wanting me to press forward with when I came November 1. Again, it was under $20,000, so that's not it. No, no, no, no, no. This one was actually publicly. This one was a significant. This is a several-million-dollar contract. And so this would have gone. It never made it to council because I wouldn't let it go. That was where I was going. So when did you receive it, though? When was it received by the administration? I'd have to go back and give you a date. But it went, Todd was involved, you know, purchasing was involved, it was your typical RFP, but the recommendation never made it to the council chambers because when I read the contract, I was uncomfortable with the fact that it seemed like we were just changing horses and not necessarily having a sustainable approach to winning the race. is that if they're going to have somebody in charge, and it said right there is that that person was going to take their direction from LFUCG's management, I didn't see who that person was, and so why would I do that? It's still viable, and, you know, matter of fact, one of the other competitors is coming in to meet with me next week because I want to get their perspective on what they saw from this proposal, why they responded the way they did, And we may go back out again. We may forward this recommendation, provided that the one that most folks favored is still the recommended one or whether or not their price is even good. But that is on hold right now because it just seemed like a bad approach or not a sustainable approach. Okay. Thank you. Finding number six. finding number six relates to ceo policy number 40 deposit violations noted during our testing of deposits we noted a lack of segregation of duties over the mail processing and deposits because the same employee was opening the mail was also preparing the deposit the deposits were not being properly secured prior to being delivered to the division of revenue and also there was no mail log to record when a check would be actually received in the mail, making it impossible to determine with certainty that deposits were being made in a timely manner. The check issue is particularly important because these would often be checks coming from the mills that have purchased the commodities, and some of those check amounts could be some very substantial amounts. So our recommendation there was to segregate the duties so that mail was opened and checks law by an employee who was not responsible for making that deposit. We recommended that the MRF get themselves a small safe so they could secure payments that were not sent to the Division of Revenue on the day they were received. And as I said earlier, a big reason for that is the size of some of these checks from these commodity buyers. Any questions on number six? Mr. Martin, do you have anything to add? I know in here it says you agree with the findings. Pardon? I know in here it says you agree, but you may have something to add. No, basically it's done. I mean, the only thing that I, as far as resolve, the only thing that I can't necessarily account for is how long-term sustainable it is because I'm not there. But it is in place right now. This one is a fairly easy one to implement corrective action. What I would be looking at as far as a management is to ensure that it continues to be that way. Thank you, sir. We have Councilman Myers up first. Thank you, Mr. Chair. I guess, Mr. Sully, it seems like several of the audits that you do end up with this same exact issue of segregation of duties, particularly when it comes to funds. And we've got a CAO policy that speaks to that. I guess my question is, how are we holding the government accountable across the board? Because it seems that we keep waiting for these audits to be done, and then we find this issue. Do we have a systematic way of looking at government and saying all of our processes where money comes in from the outside And then it's put in accounts or sent to another department or whatever And we just go through and look at all them to make sure that segregation of duties is in place Well typically we look at segregation of duties when we audit a particular function now partly to that answer is that question for 2014 for the audit plan that was approved by the internal audit board we have 17 of these reviews where we're going to go back in and see if things have been corrected that have been audited within the last couple of years. The MRF is one of these audit projects that we are going to revisit. So that is a significant increase in the amount of reviews that we're going to be doing. And secondly, and I don't want to speak for Sally at all, but it's my understanding that she has also told her commissioners, go back and look at these audit reports that have been issued over the last two or three years and sit down with your people and make sure they're addressing them. So I think from both those perspectives working together, I'm hopeful that you will see that these things are not going to be found at least on a repeat basis. Okay, just two follow-ups real quick. I appreciate you doing that review of those 17, and I was on the audit board with you, and we talked all the time about your ability to have teeth and mandate and make sure that departments do change the things that you recommend they should change. And so I look forward to you. Will you bring that list of 17 back to this body or the full council and give us an update on your findings? Oh, I'd be happy to. I mean, you'll be getting the report. Whenever we do those follow-ups, you'll get the report. And I'm certainly fine with sharing the list with you now. Okay. so that you'll know what we are planning to go in and look at in 2014. I'd love to have that. And then also the other question I'd ask is do we know if any fraud has happened? Because I remember when I first got on the council, we always talked about the MRF making a million dollars a year. And revenue keeps going up, but it's still losing money. So if we know that segregation was not there, we know that doors aren't locked, we don't know how many keys are out, we've got another combination lock, gates, all these issues, do we know if merchandise was stolen or if checks were not deposited properly at the end of the day, and that's why we have a shortfall instead of a profit? Well, the testing that we did of deposits, we did not find anything that was missing. So, of course, that's a sample test. But we didn't find anything in the audit that would indicate that there was any kind of fraud. To the question about maybe inventory being stolen, You have to understand that the inventory that comes out of the MRF, these are huge bales that may weigh 1,000 pounds. So the biggest risk you would have there would not be that someone would take a bale, you know, dump it on their pickup truck or whatever. It would be very unfeasible. The biggest risk there would be that there would be a shipment that we didn't properly bill for or that there was a payment that we didn't record and deposit timely. But in the audit, we looked for those areas, and I told my auditors, take a good look at the physical security of the inventory. That kind of gets back to where we need to know who's coming into this plant after hours, because you sometimes, at the Murph, you will have a trailer that is loaded, for example, with cardboard, that is ready to be taken to a mill, and that has been released. and then you may have the driver who is an outside transport. They can come in after hours using this gate, this electronic gate, hook up and take it. It's already been released. We know what's on it. So by having electronic key at that gate so that you know which driver specifically has come in and gone, that also will provide you more security over your inventory. But again, the audit did not detect any indications of fraud. What about the other opportunity when the truck's weighed, if it's not weighed properly? Is there an opportunity for the amount of revenue coming in to be different than what the truck actually weighed? The big issue with the trucks being weighed, the way that the MRF determines how much to pay each of these outside affiliates is based upon the weight of the product that they bring in. They have a formula that we examine the formula based upon the fact that you have the single stream of recycling where everything is thrown together in the truck. It appeared to be a reasonable process to determine how much revenue or how much is paid to each one of these affiliates. But if a truck comes in, say, from Franklin County, and they don't get a proper weight on that truck, then it makes it more difficult for them at the end of the month to determine of all the commodities that we have sold and all the revenue that's come in, X amount should go to Franklin County. So that's why that was an issue. And our understanding is that when that may have occurred from time to time, the scale operator at the Murph would try to go back. she would watch this and she would try to go out and tell them, all right, you're going to have to back up here and you're going to have to sit on the scale because we've got to get an accurate reading of how much weight of recyclable material, all of it thrown together, you have on your truck. Okay. Does that help? Yes, sir. Thank you. Councilmember Akers. Thanks, Chair. Bruce, under the response from the Director of Waste Management, and maybe this is to Charlie, I'm not sure, But it's just that an outside accountant has been hired to develop the protocols and processes. So my question is, why is an outside accountant necessary? And couldn't someone in our Department of Finance help with this? And really, why weren't these processes already in place? Or are they and they're just being revised? And all of those kinds of questions. I would prefer to let Charlie maybe speak to that since he's addressing those. I was going to hope Bruce was going to tell you why it was because he was the one that found it that way. So I really can't tell you why it was that way. And so this is the one that Council Member Henson asked about earlier, correct? Well, no, I thought this was kind of the one that Council Member Myers was alluding to. Because you have. You've seen this in various other places where folks outside of revenue are collecting revenue. and then it's their responsibility to collect those checks and get them transported to revenue in a timely fashion. Then there's also just the overall making sure the appropriate documentation matches those revenue streams. I was sitting back here looking. I've got the October report. I think they do a fairly good job of being able to track, you know, what share goes to the affiliates and what share went to us. In October, our revenue portion is $157,000 in selling of the recycling. We're by far the biggest portion of it. I was just scanning that. The next biggest check would have been $9,000 to one of the affiliates. So, I mean, we're the 800-pound gorilla in the room. when it comes to the share of revenue received from those. It's just a matter that we can take in, that Bruce or any other auditor can come in, take the individual paperwork and match it up and come up with the same number. That's where the issue is. I think Councilman Rakers was asking about, is this the same accountant that I asked about? Oh, yes, it is. I'm sorry, I didn't understand your question then. That's all right. Go ahead. Yes, it's the same accountant. Right, and so it just says that they were hired to develop the protocols and processes to properly track shipments, receivables, disbursements, to outside haulers. So I assume that we already had those processes in place at some point in time when this, I mean, this shouldn't be a new thing, you know, I mean, right? You would think not. But again, like I said, I wasn't part of the audit team and stuff, and so I can't really tell you what has happened and why those things did not. Obviously, they're able to generate the numbers. I think, and Bruce can step up here and correct me if I'm wrong, I think the stuff is there. I think it's just inconsistent. Okay. Would that be a true statement? Yes. And I may have misunderstood the question a little bit, too. Basically, you're asking what is the root cause of the late deposit activity is what I think I'm hearing. Why was it occurring in the first place? Is that? No. Okay, so under number six, and then it says Director of Waste Management Response. Do you see there's condition, effect, recommendation, and then that director response? And it says an outside accountant has been hired to develop protocols and processes. It seems to me that we should have already had protocols and processes in place, and so that's why I don't understand why we need to hire an outside accountant to establish those processes. It seems like that should be an internal function of government that we review them and we improve upon them or not, instead of outside. I can't really speak for the logic of the former director of waste management response. I mean, this gentleman has retired. So all I can tell you is that the urban county government has had CEO policy number 40 in place since, I think, June of 2010. So that is your policy and your protocol. Right, right. So it doesn't matter really. So how much longer are we paying this outside accountant? And how much longer is the contract for this person? I'm not paying her at all right now. Okay. I'm not paying her at all. Until we can modify the scope that she had in place and come to an agreement that there's going to be a specific deliverable that helps me be able to deal with this, we're not doing anything. And they're being cooperative with that. Like I said, they worked here for many years, and so they understand how our processes work and stuff. Like I said, it's been a meaningful dialogue off and on over the last few weeks. Again, like I said, so much of my energy has been in two areas. One is getting a plant manager in place that can mine the store long term, whether we have this accountant or any – or an accountant downtown or any place. And secondly, getting some contracts in place so everybody knows, both the affiliates, us, and BRC knows who's supposed to be doing what to whom. And the safety issues, obviously. Thank you, Charlie. I know, I mean, I trust, you know, your judgment and I appreciate your efforts and I look forward to improvements. Thank you. Thanks, Chair. We have Kasper Myers back up. Thank you, Mr. Chair. I guess not to be the dead horse, but if you go back to the fact that this person's worked here a long time before they got this contract, were they working in the capacity of an accountant? Yes. This person was the former director for accounting several administrations ago. I can't remember when she actually left. She was here when I first came in 99. Okay. She would be, I guess, probably, I would guess to say she's the post-PeopleSoft or pre-PeopleSoft era. So CO policy 40 has been in place for eons. This person came from accounting, so they know one general accounting practice is separation of those duties that we talked about a second ago. And Council Member Akers talked about that person being brought in to set up those protocols. So I guess my question is, like the auditor said, CO policy number 40 has been in place, so the protocol was there. So if this person used to work for us and was a director of accounting, they know general accounting practices, how can they be there and not have looked at this segregation of duties and not brought that to somebody's attention to do something about it? Well, first of all, I thought Bruce said that this policy had been in place since 2010. So it's probably not as old as eons. I think you used the word eons. And I'll be honest with you, this is an unfortunate outcome on any of us out off old Frankfort Pike, and this is where Sally is going to cringe and she's going to know we're going to have to work on this, is sometimes the communication of policy changes don't make it out to our folks out at old Frankfort Pike the way they should. That's not to say we shouldn't be following them. That's not to say that at all. Now, as far as her role, her role, she wasn't hired to work on the MRF, because when I found out about this and I contacted her to see what her scope was, despite what it says in there that this accountant is in place, that is not what this person was hired for. That's why we're working on modifying her scope. I agree that she doesn't need to write something that already exists. It's a matter of implementing it and having somebody on the ground that's going to hold somebody accountable to make sure they implement it. I understand, but if I go back to Bruce, even if the CAO Policy 40 was only in place since 2010, general accounting practices, I mean, when you do your audits, are you relying on CAO Policy 40 to say that there's a segregation of duties, or is that general accounting practice? It is general accounting practice. That was my point. policy 40 that that specifies if you will and it spells out a lot there's a lot of detail in it about segregation of duties late deposits securing money etc it spells out the or the urban county government's expectation to an employee specifically with regards to the segregation of issues of duties late deposits and so forth okay thank you all right no one else and i will say we will have a hard stop on this issue at 11 or 1230 so we can get to the tree canopy. So we'll work as hard as we can up until then and then if we need to carry over to the next thing we will. Continue on Bruce. Number seven. Number seven issues noted by the Division of Risk Management that were not addressed. As it states in the report as a result of an initial walkthrough that we did at the MRF during the audit we noted what appeared to be violations of safety rules and we notified the Division of risk management. We were informed by risk management that they had spent a significant amount of time addressing some safety issues at the MRF, and as recently as October 2012, it issued a report with several findings. Upon our request, the Division of Risk Management personnel re-inspected the MRF, and they issued another safety violations report in July 2013. The July 2013 report contained two new findings and also noted that 11 of the 12 prior findings from the 2012 report had only been partially addressed or had not been addressed at all. Now, some of the, I don't recall every one of the specific safety issues that were in the risk management report, but a good deal of them related to two significant areas. Number one, the tip floor, which if you've been to the MRF or if someone watching us is trying to envision the MRF, when garbage is first dumped at the MRF, it's dumped on what's called a tipping floor. It's just a huge dumping area for the garbage trucks. There's a large front loader that operates there. This front loader scoops it up, takes it to a hopper, which is at the end of the conveyor, that's going to run it through the recycling machinery, and dumps it in there. And then you have this constant back and forth of your front loader. This is a very large, heavy piece of machinery. There were some safety issues related to that. There were some safety issues related to people. we witnessed a worker actually climbing up into the garbage, the recycled garbage pile, to try to pull out plastics and things that would knot up the machinery. A significant safety issue there is if someone falls down into that, you can literally slip down into this stuff. They disappear in it, and the front loader grabs them, picks them up, dumps them in the hopper, and they're in the machinery, and they're probably killed. The second major areas of safety risk that, as I recall, that report included in it was just around the machinery itself, the workers' position at different working stations, whether or not they were secured, whether or not they had on their hard hats, earring protection, things of that nature. So we worked with the Division of Risk Management. They went back out to the MRF. They issued their second report in July 2013. and I know that Charlie has provided, he provided me just last week kind of an update on a spreadsheet as to how these issues were trying to be addressed, and I was satisfied with the progress that he is trying to make with this. Any questions on 7? Council, nothing to add, okay. Finding number 8, IRF contractors providing outside services. Mr. Sally, hold on. I'm sorry. Christopher Myers. Thank you, Mr. Chair. Bruce, I want to go back to this, and I know that's not part of this audit, but we keep having this situation where you audit, you come up with findings, you come up with recommendations, some of them are high priority, et cetera. You ask those changes to be made, and then you audit a year or two years later, and you find out that they've just been ignored. And I know having been on your board, you don't have the staff, you don't have the people power to continue to go back and make sure people do what they're told to do. So I guess what I'd like this committee to do is to put that particular issue into committee and see if we can't come up with a way to help solve this problem. And I don't know if it's that we come up with disciplinary action against the people who are responsible for making sure the change happens and continues to happen or what that is. But, you know, the city's vulnerable in all these different areas. If a person falls in and gets killed, if money's stolen, reputation, there's all kinds of things that the city's at risk in or for if these recommendations aren't followed. And so I think that we need to take this as serious as possible and come up with a way to help you make sure that what you say has to happen, particularly when department heads and things agree with it. And it's still not happening. And so I guess I'll ask this. I know I can't put it in the committee in this committee, but I'll be putting that in the committee and see if we can come up with something to help you. Thank you. Councilman Henson. Thank you, Chair. That was going to be my comment, too. And I know I've brought this up to Sally before. it's like what kind of assurance can we have that when you make these recommendations that, you know, it's just not going to be blown off, but someone is really going to take this seriously. You know, particularly, I think not just with the audit and running efficient government, but with our risk management, because to me that's very, very critical. And so, you know, I just share in your concern is that, you know, what good does it do to pay Bruce's salary if we're going to ignore him? So thank you. Our CEO, Sally Hamilton, would you like to address that? I totally agree with the comments. I came from the auditor's office, so I know the frustration when somebody blows off an audit. We are doing a form right now. We've asked all the commissioners to go back and look at the last two. They're on the website. The last two audits that have been internal audits that have been in their department the last two years of them. We want them to fill out those forms and give them to the CAO's office. because we have to make sure, and these are the commissioners, and we're going to hold everybody responsible because we have to make sure all of those findings have been addressed, and everybody is going to have to verify that to us, and we will see how they've been addressed because we agree with you totally. Thank you, ma'am. And I think employees should understand at the MRF, for instance, if you're not complying with those risk management recommendations, your job could be on the line. This is something you have to do. It's not if you want to do it. It's you have to do it. And I think most companies operate that way. So thank you. Council Member Myers. And I think as a follow-up, CAO Hamilton, you know, Particularly these things that have to do with safety. If we've identified an issue and we say it needs to be fixed and it's not fixed and then someone gets hurt later on as a direct result of that same exact issue, then we have a real – we've got a person hurt, first of all. But then we've got those other problems that come from that as well. So I appreciate your work on this. Thank you. Item number eight. And I would just like to say, too, that I appreciate both Council Member Myers' comments about, you know, the enforcement, and I also appreciate C.L. Hamilton's comments about how they are going to try to ensure enforcement. It needs to be understood, certainly I know the council probably does, but maybe for the viewers, that audit does not have the power of enforcement. I mean, it is our job to go in and identify the issues, But then the management team, director, commissioner, that is under that, that oversees that function, they have the responsibility for the enforcement of corrective action. Item number eight. Thank you. MRF contractors providing outside services should be monitored. This was actually touched on earlier by Charlie. the part-time workers that work on the line at the MRF, it's an outside company, it's an outside temporary labor agency, and one of the requirements of their contract was that they were supposed to provide a supervisor on the floor working with the recycling employees on the floor to make sure that they're doing their duties properly, to make sure they're functioning safely, et cetera, et cetera. And our review of the contract and the charges indicated that they were not providing that supervisor. So as Charlie had already alluded to, basically our people that work at the MERP were having to go out onto the floor and ensure proper supervision of the employees, proper safety, equipment being used correctly, and so forth. So that one's kind of already been touched on. I don't know if there's any other questions about it. Mr. Martin, do you have anything to add at this point? Thank you. Councillor Myers. Thank you, Mr. Chair. I guess, is it possible to go revisit that contract and put language in there that speaks to whatever corrective action we want to take against the company if they don't provide that supervision? Because again, even if it's their employees, if they're operating in our facility and they're not wearing their safety equipment get hurt, we can always point to the fact that our contract said they should have oversight, but it still creates a problem for us. I have the contract, and I'm in the process of doing that right now. This is the same one I mentioned before. I think Council Member Henson asked about that we had advertised but had not awarded. Both that potential contract and this existing contract, basically they'll have the same language in that the lead person for the outsourced work reports to the lead person for urban county government. And so, like I said, in both cases, you know, until we get that lead person in place that essentially gives them direction and then holds them accountable for those directions, we still have a weak link. And so I will do that. Again, though, the emphasis is having somebody that's managing the doggone thing 40 hours a week is imperative. I understand that, but if they're not even providing that person as a part of the contract, that's a deficiency in their adherence to the contract we have. But they're not billing us for it either, and if I ask them to start providing one now, then they're billing one to us, and they've got another person potentially standing around. So I felt like it was unwise at this point until we had leadership in place. Okay. Thank you. Councilman Henson. Thank you, Chair. Charlie, you were probably already aware that there were problems at the MRF before we even got this audit. I've heard things, not necessarily in the detail of the audit. I've known that from my past foray down here as the commissioner back in 06, there was an expansion going on, and I had actually sent one of my people in to essentially manage the project for him because I was concerned about how it was going on. And then the issue with the affiliates and stuff, I've been hearing about that ever since I worked here. And you were involved with the MRF from the onset, correct, when we first began? No, I've never. Oh, you were not? No, I have not. Like I said, is that my only role in the, you know, the last time I was the anti-commissioner was when we went to once a week garbage collection. I was a little consumed with that, and so the MRF really wasn't on my radar screen. Okay. But I was just, I was thinking that the contract was pulled, and then the audit came out. So I was kind of thinking, you already were taking a look at things, it sounds like to me. Thank you. And in the LFUCG, when they then sell the product for the different affiliates that are bringing the recycling material in, we receive a $35 per ton processing fee from each affiliate as part of their revenue share. Current contracts could not be located or otherwise did not exist between LFUCG and the BRRC or the affiliates. It's our understanding discussions concerning the elimination of BRRC as a broker work are occurring. But even if BRRC is eliminated, you're still going to need contracts with your affiliates. The contracts would provide performance specifications. They'd reduce potential misunderstandings between the parties. It would limit legal liabilities and provide the usual securities for urban county government that any of our contracts do. So our recommendation there was that regardless of the decision concerning BRRC, contracts are needed with all the current and future affiliates that define items like the fees that would be charged, sharing of inventory loss if there's fire damage, penalties to an affiliate load contained at a disproportionate share of glass or trash, and limit LFUCG's legal liabilities. Any questions on number nine? Charlie, any follow-up? I know we talked about this earlier a little bit. Any additional comments? Just for the sake of being brief, the draft MOU has been completed. It's been issued to the two main affiliates we have, and I figured I'd work my way down from the largest contributor down to the smallest ones. And then there has been ongoing dialogue with BRRC, and I'm reviewing the spreadsheets that demonstrate what the costs are. So I think we're making a lot of progress in that area. Ultimately, though, any agreements that get put in place, the council will become aware of those because they'll have to be blue sheeted. Thank you. Number 10. Finding number 10, the May and June 2013 reports from BRRC for the commodity sold contained some discrepancies. Kind of the bottom line on that, there was an error in how the fee for LFUCG's processing of the recycled materials was processed in May and June, which resulted in an overpayment of broker fees in the amount of $9,341 for LFUCG's portion. We brought this to the attention of BRRC during the audit field work, and then they corrected that on their billing for the next pay cycle. finding number 11 production reports should be restated there was a production report that was being generated by the staff at the BRRC that was used for basically just ensuring that the management there had a good idea about about the production levels, how close the MRF was to its capacity, and those were discontinued during a certain time frame, as noted, during the audit. This caused some confusion among the employee who was supposed to produce the report, and the concern that we had was that given the characteristics of a manufacturing operation, without these production reports, then you are not going to be able to measure closely your production goals or how closely you're reaching those goals or how well you're managing your plant capacity. So our recommendation there was that this report be reinstated and it's our understanding that that was also addressed and that report is now being looked at and used to help manage the MRF and its production process. Finding number 12, a couple of additional issues that we noted. One of them has already been mentioned by Council Member Myers and that was the scale, the gated the scale, to make sure they get the correct weight measurement for billing purposes. And then the second item being the voided manifests. We noted that VRR manifests, the voided VRR manifests are sent back to BRRC, but no record of them was being kept. and without keeping the voided manifest in place, then you would not have at the MRF a record that would support any adjustments to processing fees paid to the MRF or processing fees that need to be passed on to the affiliates. Or any other questions about any of these other findings? All right, I'll move the floor to general comments, discussion from council members. Anyone have any other questions, comments for Mr. Saleek or the administration? Give me one second. Our system's lagged behind for the chair. There we go. Councilman Massotti. Thank you, Chair, and thank you, Bruce, for your in-depth analysis of this department. I think we all found it disturbing when we first received the information because so many of your suggestions had not been responded. it looks like in synopsis we have safety issues we have accounting issues we have employee issues with overtime we have inventory issues and we have management issues and these are all very very serious issues and i appreciate your response charlie i know this is a something that you inherited but i think going forward that we need to be aware that these are again serious issues and we need to act upon them. And, Sally, I do appreciate your response. But, again, as counsel, ultimately it is us who have to make a lot of decisions concerning these different departments and divisions, and without all the information, we can't act on that. So I do appreciate that so much, Bruce. Thank you. You're welcome. Thank you, Councilmember. Casper Myers. Thank you, Mr. Chair. Charlie, I just had a general question. When we sell off the material, is all the different types of recycled material bundled together, or do we segregate it off? That's the process. It takes a single stream and sorts it into all of these different things. Is there a little bit of contamination that may pass through after multiple processes? Yeah, a little bit. They try to pick it out, as what he was describing before. But, yes, they are bailed into the particular commodities and marketed as such. So as we move forward with this, and I know you want to get a new manager in there and that kind of thing, is there an opportunity to look at a more in-depth opportunity with each one of these different types of commodities and getting specific contracts with people so we can get the most dollar out of this thing and make this profitable? Absolutely. Absolutely. Absolutely. Like I said, what I would be directing this person that I'm hoping to recruit here very soon, I've already interviewed one, I've got another one scheduled for this Thursday, I'm putting it out there to as many people that I think that know folks that would be interested in this, is that we've got to increase revenue, we've got to decrease costs, and then let's see where those two points land on the scale of things. And that would include, as opposed to maybe being exposed to market fluctuations, is that you competitively bid your commodity. Sure. Okay. Thank you. Councilman Lane. Thank you, Mayor. Excuse me. Chairman. I'll take whatever you call me. Vice Mayor, how's that? Okay. I just wanted to make a general comment. First, I'd like to thank the Internal Audit Board staff for its report on the Lexington's material. recycling facility because I think it's well done and very detailed. And from my perspective, I see recycling as a multimillion-dollar enterprise operation of the urban county government, and I think it's been mismanaged for years based on this report and the previous ones that have come through. the excessive cost and waste that has been incurred as the taxpayer's cost, because we've really, I think, had an inadequate accounting system that allowed management to evaluate what the operational costs are, whether we're getting all of our money and whether the fees are appropriately allocated, et cetera. And I think also our executive management and solid waste has not been that good. Also, the precise amount of the cost to taxpayers, I don't believe that we can really say how much it is, but we can say that it's a significant amount and an unknown amount. And I believe that in reviewing the internal audit report, I think that anybody that reads that gets the distinct impression that almost every operational aspect of the materials recycling plant has been grossly mismanaged. And so I think it would be appropriate for council to think along the lines of restructuring it into an enterprise, putting in new management controls and new accounting controls, because there's the potential over the long term that recycling will be a greater and greater percentage of our solid waste products. And it would be, you know, have a lot of profit potential for the government in the future. So I want to say thank you again, Mr. Sally, for your work on this and your staff. And I am on the board, but I give all the credit for this report to the staff. You did a very good job on it. Thank you, sir. Thank you. Council Member Scotchfield. Thank you, Chair. Bruce, first of all, thank you. I think one of the biggest jobs that we need you to do is to bring to our attention issues that we need to address. We get to be, I guess, the bad guys, but you have to bring the information to us. Charlie, I think one thing that I look at this report to you is obviously there has been mismanagement. I think there's lots of options that we have available out there for moving forward, and I think we need to take a look at all of them, but we do need to address what's going on right now and get them corrected. One of the things said before, this should be something that we see profit from. You know, it is the move towards the future as far as recycling these items. And we pride Lexington on being forward for these things. So, you know, looking at it, increasing the revenue from this department, decreasing the cost, making sure that we're transparent in how we work. And I appreciate all your work bringing it forward. And, Charlie, you know, anything we can do to help move forward to make sure that we get it back on track. Thank you. Thank you, Chair. Thank you. Council Member Hinson. Thank you, Chair. I simply just wanted to say thank you also. Bruce, I said you always just call those more work, but I appreciate it a lot. And I think any time we have an opportunity for government to be more efficient, you know, we welcome that. I hope that someday we're all perfect and we won't need you. But anyway, no, I hope it doesn't get that perfect. But just thank you. Anyone else? Well, I'll close in our last 30 seconds by saying thank you, Bruce, for bringing this to us. Charlie, I know you're acting commissioner, but thank you for taking this on and hopefully bringing us solutions. And I can't think of a better team, CAO Hamilton and the commissioners you have to work with to solve this problem. Some of my comments, I'm going to say, are based on a couple things. One, as chair of this committee, but also chair of the Waste Management Task Force that is currently looking at funding options. And this plays a big role into that. And my biggest concern, of course, is lack of management, security, safety out there, but lack of transparency to this council and to the community and lack of communication. Because we were not informed that RFPs were being put on hold. We weren't informed that we hired an accountant out there. And here I have sat through many task force meetings, and some of my colleagues have been on there as well. Not one time did anyone speak up and say we have financial problems out at the MRF. And we were using those numbers that they were giving to us to form our funding model. And that has put a big damper into our mission of being trash-free by 2020, long less building a new MRF that we've talked about, what, four years ago as recently? And we put that on hold, too. Good thing we did that because there's a serious issue out here, but I think it starts with communication. And whatever we do going forward, this body right here, this committee, and the full council needs to be involved in communication about what's going on out there. Because we were set to create a funding model based on bad data, in my opinion. And that's critical to the success of our recycling operation. Because since 2004, we went from 10,000 tons now to 22,000 tons last year in our last audit of recycled material. We've over doubled the capacity out there, but our profits haven't. It's a serious issue, and I want to ask for this committee's purposes to keep this in here and bring back an action plan. You've heard the comments today, but I'd like to see it in writing, an action plan. I know you have a chart, Mr. Martin, that you're working with, but I want to be brought back to this committee, the action plan about what's going on. I'd like to have our acting director here, too, maybe so we can meet her and answer any questions as well, because this is a serious situation, and we need to start all being on the same page and the same team as to what next steps we're going to take to fix this, because it can't continue, as many of my colleagues have here have said. Thank you. And, Mr. Martin, do you have anything to add? Is that okay for next month, the action plan? Will you all have that, an outline of next steps? Well, like I said, I'll work on the spreadsheet to get it more in line along with things that you asked for. But I do want to go on the record again and say that, you know, the last thing I want to do is have Bruce call on me saying, where are you with us? And so I basically made a commitment to him is that he will get updates on a monthly basis. This is too important to lose track of. I think you all have made that very crystal clear to me. But it was apparent to me when I saw it as well. And that even though I'm acting, Tracy's acting, is that this can't just fall by the wayside. In the newspaper, it was mentioned that I had known something about the MRF from before, which I've only heard. I never knew there was a MRF audit until I read it in the newspaper. So I went and pulled it out, and I found it, and everybody's name that was on there doesn't work here anymore. And that's a big problem. We can't afford that to happen again. Thank you. All right, next on our agenda is the tree canopy survey put in by Councilman Clark. Thank you all for waiting so patiently if you're here for this issue. Councilman Clark, do you want to give us some leeway into the conversation? I know Susan Pluger, I think, are you going to introduce our speaker, or is he coming? Okay. Yes, I will. Come on, John. I believe John Saylor is going to make that introduction. Yes. John, you're welcome. I guess this is probably a bad word now to say, but we'll talk about audit of a different type now. My name is John Saylor. I'm an Arbor senior with environmental policy. And first, I'd just like to say thank you guys for letting us present this to you today. And also, you guys make up part of the whole council who approved this, and thank you for that as well. This is a huge tool for us to use in urban forestry. as far as getting benchmarks for our urban tree canopy. We've even broken it down into council districts so that we know what our benchmark is and also what we're shooting for as we try to increase canopies. So no longer are we going to operate from ready, shoot, aim. Now we can ready, aim, shoot. So I also want to mention that this will be linked up on our website by the end of this afternoon. So you can go find the full report there. I was tasked with being the project manager over this project, and it was great to work with Jenny Gulick and Davey Resource Group. Jenny and her team are a class act and did great work. And so without further ado, I'd like to ask Jenny to come up. Welcome. Thank you for coming. Thank you for waiting. Oh, that's very interesting. so on a lighter note i want to congratulate you and uh staff for completing this really important project um i'm pleased to let you know that lexington has the first highly accurate urban tree canopy analysis in the state um louisville northern kentucky may have theirs coming online but they'll be a second a distant second and third lexington so So congratulations for being a leader. In the whole country, there's probably about 300 cities that have an urban tree canopy analysis, a UTC, but only a handful, probably less than six, have taken that next step and used the UTC and created a prioritized planting plan. So again, congratulations on being innovative and being a leader and wanting this kind of information for the community. So, Lexington did this UTC of the urban service area to better understand the community forest as a whole. Well, why care about it in the first place? Well, it's because of all these benefits. And you know what the greatest benefit of Lexington's trees are? Is that they provide all these benefits all the time. A stop sign gives you a public safety benefit, but that's it. That's all it gives you. And unlike trees, the stop sign is only going to give you that one benefit its entire life. The urban forest, a tree, will give you this benefit every year, over and over, and more as it grows. So that is the cool thing about trees, and that's why you should care, because these benefits are given to you, and then given to you even in greater quantities as time goes on. So real quick, the purpose of the project was pretty straightforward. It was to assess the current tree canopy area, identify preferred planting areas in locations that were appropriate, analyze these ecosystem benefits and quantify those, and then give you and staff tools to manage and track the urban forest canopy. So again, I'm pleased to report, mission accomplished. All these purposes were accomplished. The mission now is to start the good work and decide on a canopy goal collectively what's right for Lexington's urban service area. Work on using the UTC information to create an urban forest management plan. Engage the public and support the urban forestry program. So really a lot was accomplished during the UTC project, and I am going to share some of the results with you. You do have the full report in the packet, and it will be online and available to you in many formats. And I'm going to pretty much highlight just some of the major findings. But first, I want to explain a little bit about how the UTC study was done, because some people are mystified. It seems like it's a little complicated. But first, what is the UTC? What is the urban tree canopy? That's if you take a bird's-eye view and look down on the city or on a tree. It's all the green parts. It's all those visible parts. So it's what a bird could see. That is the urban tree canopy layer. Well, then what we do is take various layers of GIS data that are about other characteristics and assets that the Lexington Urban Service Area had, and then those are collected, integrated, and analyzed, all in relation to the urban tree canopy. So what you end up with is this interactive map or interactive data set that will allow you to see the urban service area and the urban tree canopy as you never have before. So here's, if you're ready, here's the big reveal. Here's the result. The project, when we were all done, we determined that the urban service area had an urban tree canopy of almost 25%. And another finding was that this UTC increased by over 5% in the last 18 years. Why that 5% increase? It could have been maybe the success of reforest the bluegrass. It could have been the success of land development policies that required trees to be planted. Or it could be something else. We're just really not sure, but that's a very positive trend. So you're probably going, okay, we got 25%. What is that, you know, give me some perspective. Well, the national average, UTC, is 27%. So around, kind of around here, again, because not that many cities have done them. Evansville, Indiana's UTC is 26%. West Memphis, Arkansas is 12%. Chattanooga is 25%. And Louisville, they've kind of estimated at 27%. 47%. So you're in the ballpark with the national average and with some of these communities. But other cities around us here, Cincinnati's got 39%. Knoxville's got 40%. And Nashville's got 47%. Now, American Forest, which is a leading conservation organization, sets a goal. It's a standard, it's an average of 40%. So there you go with some of the percentages. You know where you stand. You know where other people stand. And the recommended goal as an average is 40% canopy cover. So as I keep saying, the average in the urban service area is 25%. Well, with this UTC data, what you can do is now drill down and get more precise information on specific areas. So you could look, what's the UTC in watersheds? What's the UTC in school districts? What's the UTC in neighborhoods? Or what about council districts? So up on the screen is an example of council districts. So if you look at the statistics, council district number two has the least UTC at 18%, but if you look at the numbers, it has a pretty high number of forested acres. Statistically speaking, district four has the highest UTC at 32%, and that maybe is because it's got older trees, which has larger crowns and takes a bigger picture, and therefore they have a higher UTC. So what is the UTC doing in the urban service area? Well, a lot. Using the U.S. Forest Service, they have some tree benefit calculation software. It's called iTree. It was determined that in just these three categories, air, carbon, and water, that the trees in the urban service area are providing over $30 million worth of benefits annually. Trees are a very good investment. We do studies across the United States, and we do cost-benefit analysis, and in the end, I've never seen a negative cost-benefit analysis. The return on investment is for every dollar that you put into a tree program, you get $2 to $4 back. Trees are a great investment. So since trees are so valuable for public health and safety, environmental, economic, and social reasons, it's pretty logical that you want to plant more trees to reap more benefits. But you don't want to do this willy-nilly. You want to do this strategically. And you want to plant trees where the benefits are going to be maximized. So your staff was pretty savvy and asked us to do just that. prioritize the planting layer and the planting plan and use these categories. How close was the planting area to hardscapes? How close was it to other canopy? The floodplain, slope, population density, road density, urban heat island. So basically in the end, you take all these layers and you look down on them and where they all intersect, that's where the highest priority is going to be because that's where the multiple benefit is going to happen. We really want a tree planted here because it's going to give you multiple benefits. So that's how that planting plan came about. So when you look at this planting plan back out, that's in the top left corner, it kind of looks like abstract art. But when you start zooming in, you start seeing more definition. and you can see where the planting areas were determined and where we recommended, and then you zoom in farther and you start seeing colors, and those are the priority areas where we say it's a very high priority or it's a low priority. The planting plan is also based not only on priorities but also on reality. You know, we know a tree can't be planted just anywhere, cannot be planted in a cemetery or in the middle of a ball field or in the middle of active agricultural lands. So all those things were taken out of consideration. The planting plan doesn't include those. It's just where it's reasonable, preferable planting plans. So now you have this plan, and you have all this data at your fingertips, and you can use it to guide tree planting, help you get grants, and just to help you get more bang for the buck, because, again, this planting plan is prioritized. It tells you where you're going to get the most benefits by planting a tree in a certain location. So we all think that the urban tree canopy should increase. It should be higher than 25%. And to do that, it's going to require more tree planting. And to really do that, I mean, in all reality, it's going to need a cooperative effort between the public and the private. There's going to have to be a partnership. Because clearly the private property is where most of the trees can be planted and should be planted to get the most benefits. we all benefit from the trees no matter where they're planted, but the most opportunity is on private property. So again, when you look at the, you know, looking at council districts, and again you can zoom down to whatever you want, it appears council district 2 has the most acres to plant, but look at all 12 districts. They pretty much almost have an equal percentage of acres that can benefit from more trees. You've got a lot of tools. Not only you've got this interactive data set that's just, you know, fun to look at and zoom in and zoom out, You've got a prioritized planting plan, but you also got more stuff. You got more tools. It was a very effective project to invest in. It gave you and staff all these practical tools that will help you take action now and help you plan for the future. The planting plan itself, as I said, was an interactive tool, and it's got mapped and prioritized sites, detailed down to the number of estimated trees that should go in an area, and the recommended species, whether that be a large, medium, or small. Another management tool is the canopy cost calculator, and this is used to determine the budgets for either public funds or for grant applications to achieve various canopy percentage increases. Whatever you decide, you can use this calculator to figure that out and use that for planning. Other tools that are now in staff's hands as a result of this project are an ecosystem benefits calculator, so when trees are planted or changes do occur, You can recalculate the number of all the benefits that trees are providing. You've got an eye tree canopy, which is a way that you don't have to hire anybody else again in the future to see how you're doing on canopy. It's all set up. You just grab the latest imagery, put it in. You can just check how you're doing once a year, every five years, every ten years. And my favorite is the UTC viewer. And this is a web-based map of this UTC that I'm talking about and the planting plan. and it is for staff and officials to use. It's web-based. You don't have to know GIS. You just click on it and start looking around. You can also make this available to the public, so it's a great public outreach tool. And you also are using TreeKeeper, which is a tree management software, so when you do plant the trees, you've got a very effective way and efficient way of managing the trees already in place. So now that you have this great UTC data and you've got this great UTC map, and you've got all these practical urban forest management tools. You know, don't stop now. What this does is, you know, unlike any other city, as I said, in Kentucky, you have the foundation and you have the momentum now to move forward and really do some great stuff. And whether that's finishing the urban forest management plan, you can reach out to the public, You can set canopy goals collectively. You can engage the whole community and a lot of partners, and people can rally around this. And by doing so and by planting these trees and setting these things in place, you are putting into action something that could double or triple that $30 million benefit that the current trees are providing. And I keep wanting to repeat, that's $30 million annually, not since they were planted. It's annually. So now Susan is going to come up and conclude on some next steps and some ideas and give you some comments. Thanks. Susan, welcome. Welcome, Susan. Thank you for being here. Thanks. It's great to be here in my new role with environmental policy. So I went from water to trees. And that's a good thing. It all goes together. I just wanted to let you know a few things that we're working on related to what Jenny just presented, how we're going to utilize our new tools. You know, this is the beginning. It's not the end. We're just getting started. We're currently, we have a decentralized approach to forestry. Streets and roads, parks, planning, water quality, engineering, building inspection, environmental policy all have a role to play with forestry. In environmental policy, we take the lead in enforcement, compliance, new development review. We assist citizens, other divisions, reforest the bluegrass, et cetera, is what comes out of environmental policy. But we have a full focus. I'm not going to spend a lot of time on it. I need to be brief. But here is our focus areas related to forestry. We are currently working on an urban forestry management plan. We're going to take these tools and determine the existing condition and talk about what the roles and responsibilities are, how we're going to implement, what recommendations we might have to change that. Number two, at-risk trees. This is really important. We have 55,000 street trees. 5,000 of those are ash. So we're going to be losing those, as well as pin oaks in the older areas of town that are aging out. So we need to deal with those issues. We need to expand our public-private partnerships. We're going to be asking you for some additional funding that we have currently in this current fiscal year to expand our tools with Davey Resources, with a little bit of work on some interactive web tools for the public, and then enhance our interdepartmental coordination. We're bringing together those working on urban forestry as well as those working on greenways, because it turns out they're basically the same people. bringing them together now instead of meeting separately we're going to try to meet together with a natural resource management coordination committee internally so those are our main focus areas and you have any questions we'll open the floor very good thank you for being around right on the mark on time thank you council members any questions or comments give the system one second to catch up all right councilman Clark thank you chair this is a this is a very exciting program and and I think Susan a I know you and I have talked and we're really looking forward to what this can bring to our community it's very exciting and I think all of us that have been have have gotten more involved in trees and I have since I've been a member of the council I as a member of the tree board and people who have who have indoctrinated me perhaps have have done a good job in making me realize how important trees are to our community. So I just want to say thank you. And I think this is a very good study. It just happened that I was involved in the bid process and evaluating the bids, and that's kind of where I started on all this. But one of the things that concerns me that I want to just mention, and we've talked about this a lot, and I know we have a great urban forester in our government, But our program, our forestry program, our urban forestry program is considerably fractured by the fact that it's in several different departments without. So consequently, we don't have centralized control. And I think that's something we need to really look at in order to maximize what we can do with trees in our community. And I think our urban forester has a lot of energy, a lot of expertise, but very little staff or equipment or things, our authority to make things happen. So I think we really need to think about that as a council to look at how we can make that more effective. And I'm excited about the urban forestry management program that's being looked at right now. I think that's coming out in a month or two, and I think that's going to help us as well. So thank you to the Davie Group and for that wonderful report and the kind of tools it gives us to go forward from this point. And thank you, Susan, for taking charge of all this. Thank you, Chair. Thank you, Council Member Clark. We have a long list signed up, so get ready for some questions. Council Member Lane. I was going to ask a question about the urban service area of Lexington. Because we are managing the land usage to maximize the utility of the land, our lots here are smaller, which means we have less land in order to have trees. When you were analyzing our numbers compared to other cities, would that have a bearing on our percentage of canopy versus other communities? Sure. There's lots of things that can influence that, and we did only look at the urban service area, and those other statistics that I were giving you were for entire municipal boundaries, which would include larger lots outlying in the area. So that could definitely have an influence. So what we tell people, even anybody that does an urban UTC study, okay, I told you American Forest says 40%. That's just an average. There is not one right number for any city until you decide yourself with the limitations and your other economic goals and that. So that could play into, well, that's the reason for it. And your number is going to be unique is, I guess, what I'm going to say. Okay. The other question I have is we have the emerald ash borer here, and it's eating a lot of our trees up. In my district, I have some neighborhoods where just whole blocks of trees have been killed and they've had to take them out. Do you have a comment on that at all? Yeah. Well, you can use the UTC to track the impact of their emerald ash borer because it's going to get all the mature ash. And the mature ash have large canopies, so you're going to start seeing holes in it, and you need to be prepared for that. and that's why that planting plan was then hand-in-hand with the UTC so we can be proactive and plan for that and increase species diversity and start trying to replace some of the environmental services that the ASH are doing. But, yeah, you're going to see some holes, but I don't think it's a disaster in terms of the long-term urban forest canopy if you plant trees. Thank you. That's all I had for you. Mr. Chairman, back to you. Thank you, Council Member Lane. Council Member Farmer. Thank you, Chair. I want to thank you all for staying and for being here to begin with. And those of you who left, I'm sorry that you had to leave. We waded through an audit that needed ample time, as does this subject and its importance to our city. The tool you have given us is truly dynamic and what we can do with it is it's like opening a new present or new toy at Christmas. It really gives us the opportunity to look forward to making the tree canopy in Lexington better and more vibrant and broader in its species. I know that the tree board will take it up. I know that it will come up in our corridors commission. I know that through the committees of the council, we will keep it, and Susan will work on it. And I would just say to you all that there's no way we can, well, I need to say especially to the council, there's no way we can have this much conversation about trees without having some conversation about leaves and leaf collection. Just something that needs to be part of the discussion. Thank you, Chair. I was waiting on that, so thank you, Councilman Farmer. Time will tell. Councilman Akers. I was actually thinking the same thing, Council Member Farmer, that we could look at the tree canopy coverage per district and maybe prioritize where leaf collection needs to be. Perhaps the second, since I am lacking in trees, doesn't need as much attention as the fifth that seems to be quite abundant in its tree canopy. So I wanted to ask, following up on these numbers, and I'm very grateful for this. Thank you so much for this report. It is dynamic, as Council Member Farmer said, and I think provides a lot of opportunities for improvement, particularly in the second district. So I guess that's my question to Susan. Will the urban management, forest management plan, or whatever it's called, will that address how we can take the recommendations from this report and implement them locally? and what, I mean, I would like to know, and this goes to Councilmember Clark's comments too, of who is responsible for the management and implementation of the forestation plan, and what recommendations specifically could I make to residents in the second district where it has been newly developed and small lots and that sort of thing. And so how do we determine where we should be planting the trees, what the highest priorities are? I have the town branch also in the district, so I'm sure that the creek and some of the EPA consent decree plays into this as well. So is that going to fall under Tim's purview, or who is handling all of that? Well, it's really going to come out of the number one. The urban forestry management plan will codify our entire program. Currently what we do, who has certain roles and responsibilities, and it also will include the goals and objectives for the program. If we want to increase our canopy by how much, how do we want to do maintenance of trees, is it the private property owner with the street trees, what's the role with our ordinances, how that plays in, and then also recommendations for changes to how we currently are either organized or manage our program to implement and meet those goals and objectives. So that's the main, all of that is included in the forestry management plan. When you come down to specific planting plans, then those can be done through really number three, the public-private partnerships. We have a lot of grants where people can get grants to plant trees, and that's what I would recommend for right now is one mechanism to do that. community and sustainability grants. Some of our stormwater incentive grants include tree planting, neighborhood grants, et cetera. And so now as we've got this planting plan, we know our highest priority areas, and we can work with the public to implement those and then also possibly expand Reforest of the Bluegrass, expand LFUCG's involvement with those at Arbor Day and other aspects to develop those partnerships. And how is it determined each year where reforest the bluegrass happens? I do not know the answer to that question. John does. In the early days, it was based on need of blue line streams and getting that buffer zone. As of late, it's basically been touching base with the maintenance crews that are mowing and trying to take that land out of mowing. And then also, we're still trying to cover and do that buffer strip on our streams, but the last couple events haven't been over, can't be covering over a stream. But this will also dovetail into how we predict the future sites, where we're going to go to, how we're going to plant. So this will fold into that as well. Okay. Thank you. Thanks, Chair. And last up, we have Council Member Myers. Thank you, Mr. Chair. Thank you for coming in and providing this great report. If you go back to the slide that says canopy cost calculator, it says for each 1% increase in Lexington's tree canopy, approximately $1.2 million in tree planting would be needed, as well as additional investments in maintenance. And I was wondering, as you look at that 1% based on the $1.2 million, where is the tipping point where we need to be in terms of percentage of increase before we start to realize the return on investment and the value add for the taxpayer? Well, again, right now, the average is for every $1 that you put in, you will get two to four out. So if you spend $1.2 million, you're going to get $4 million back in return. I'm not quite sure if that was your question. That $1.2 million for that 1% increase, now remember the urban tree canopy doesn't care about property lines. So clearly, private property is where the bulk of the planting is going to be. So, you know, the $1.2 million for $1.84% of it would need to happen on private property. And so funding-wise, you can see, it's not all city funding. It's not all public money that needs to happen. It's a partnership. Everybody's got the whole community has to come together. And it's not the burden of just the government to fund every single tree being planted. But hopefully you can be the leader and do the planting on public property and help people, encourage them to plant on private. Okay. Thank you very much. All right. No one else up to speak? I'll just close by echoing Councilman Clark's sentiments about looking at the division of street roads and forestry, but actually the division of forestry and getting it back under one roof. I think that's a real critical need. And then, Susan, what is the time frame on the canopy management plan? Well, we're working internally. John's doing a draft, and we're going to work internally with our Urban Forestry Coordination Committee first. It's kind of like the process that went with Greenways to develop this plan and then bring it out. So I would expect it to be later in this year before it would go out. Just curious. All right, thank you. Very good. Nothing else on this issue. We'll move to our fourth issue on the agenda, monthly financials. they're in here for information only. If you have any questions given the late hour, please email Commissioner O'Mara. He'd be glad to answer them on the monthly financials. And also, he'll follow up here in the next week or so on the question in regards to collection on our Lexar bill. Any other items come before the committee? Do I have a motion to adjourn? They have adjourned. Motion and second. All in favor say aye. We're adjourned. Thank you. Thank you.