Music Thank you. is the council's first budget committee of the whole to begin discussing our budget. The mayor's proposed his budget to us, and so now it's up to us to do something with it. So I welcome everyone, and we will start out with, on our agenda, we have two items, the mayor's proposed budget revenue, debt, and capital, and then our list of upcoming budget committee of the whole meetings. So, Commissioner, are you our go-to guy? Commissioner O'Meara, welcome. Well, we're going to have a team effort and present different sections, but I'm going to start. and we're going to talk about our relationship with UK Center for Business and Economic Research, working with us for our revenue forecast, talk about the proposed revenue budgets in the mayor's proposed budget, then go to current and proposed bonding and cash-funded capital. So hopefully that will address the issues that we were looking at. First, Dr. Chris Bollinger is the director for the Center for Business and Economic Research. He was unable to make a presentation today. It's the end of the semester, and his students are actually making presentations to him right now. So I said that I would only quote exactly what he said and not improvise, but we do thank Dr. Bollinger as well as his two graduate assistants for working on a specific tax forecasting model for LFUCG. And the first slide is showing employment in the Lexington MSA from 2003 until the end of 2013. And as he says, in general, employment has been rising in the Lexington MSA since the trough of 2009. So the reset in the economy is well apparent in all of these slides. The next slide is looking at wages and salaries, and again, we see that there was a dip in relationship to the recession, but we have now recovered from those wages and salaries and actually surpassed the pre-recession peak. Next is gross domestic product for the Lexington MSA. The same cycle is seen where there was an immediate dip after the beginning of the recession, And we have now recovered that back and are somewhat on the same path that we were pre-recession levels. So then we go to the actual tax model that's been developed by UK. They've come up with an algorithm to help us predict what occupational license fees for withholdings and net profits would be. And it has tracked pretty well. The red is the model. blue is what our actual results are. And so for occupational tax, Dr. Bollinger predicted 2015 about a 4.3% growth and a prediction of $175 million for employee withholdings. For the net profit, the red is the algorithm, the blue is the actual. And again, it is somewhat tracked very closely what we've actually experienced. And the model is projecting a 5.9% growth in net profits and with a suggested budget of 35.3. And then his caveat is to use caution with using the numbers just straight from the model prediction, but to also add our observations and our feel of how the revenues are going within the urban county government. So any questions on the tax modeling that we've worked with with UK? Council members, do you have any questions so far? I see none. Well, with that, I'll turn it over to Rusty, who will talk about the actual revenue proposed in the mayor's budget. Good afternoon, everyone. Today I'll start out on the revenue by looking at the general fund. And what you're currently looking at is a chart showing the revenues from fiscal 2000 up through our current fiscal 14 forecast, as well as our 15 proposed budget. The fiscal 14 forecast is $301.7 million, which was a 3.3% increase over our 2013 reported revenues. and our 2015 budget is $313.2 million, which is a 3.8% increase over our 2014 forecast. The next couple of slides is I'll go through the top four revenue categories in the general fund. The top category, employee withholding, we have a proposed budget of $174.7 million, which is a 4% increase over our 2014 projection. This is assuming improvements in the employment and local economy that we have been seeing throughout the 2014 year. Net profit is $35.1 million. It's a 5% increase over our 2014 projection. And this is based on growth in business activity throughout 2014 as well as the prior years as we've seen the growth. Insurance premium tax is $27 million. That is a 1.9% increase over the 2014 projection. The insurance premium tax revenues tend to be cyclical, and what that means is catastrophes, other weather-related events can drive up their insurance rates, which in turn would have our revenue increase. We're assuming flat risk rates for the state in the next fiscal year. And the franchise fees at $21.5 million, which is a 2.4% increase over our 2014 projection. Moving to the Urban Services Fund, the 2015 budget is $37.1 million. That is a 1.4% increase from our 2014 projection. Inside the budget, reflecting a 2.1% increase in the total realty tax revenue, flat commodity sales, and also a transfer from the general fund of $2.3 million for the Streetlight Program. moving to the sanitary sewer fund the proposed 2015 budgets 49.5 million that's a 0.3 percent decrease from the 2014 projection that's based on user fees revenue being flat over the 2014 projection and a decrease in interest revenue due to the drawdown of the capital funds also in the construction fund we have 37.27 million in kia loan proceeds assumed for the capital program water quality fund we have a budget of 13.1 million for 15 that is flat versus the 2014 projection and it's flat due to flat revenues and user fees and also note there are no kia proceeds budgeted in 2015. The last fund I'll speak on is the landfill fund. The 2015 budget is $6.9 million, which is a 2.7% increase from the 2014 projection. Is there any questions? Council Member Stemmett. Thank you, Vice Mayor. Rusty, back on your general fund projected revenues of 3.8%, is that over the revised 2014 estimate? That is correct. So it's not the adopted that the council passed? Because that's what? 4.9? No, that is about 5.4, which is over the budget from last year. Okay, so the 3.8 is based on revised numbers? Yeah, the revised forecast that we submitted. Alright, thank you. Councilmember Hanson? Thank you, Vice Mayor. Thank you. On the Insurance premium tax, does that include health insurance? That is correct. It includes all the categories that we have for the insurance. I guess I had a question with more and more people becoming insured. Would that not affect it? We could see some increase. We did some, but I don't have any numbers looking forward. To project it? That is correct. Okay. Thank you. You're welcome. Council Member Kay. Thank you, Chair. A follow-up on that question, there's been some confusion about what insurance products actually assess that fee. My understanding is there's a distinction between group health plans and individual health plans. Could you or somebody explain what actually the fee is applied to? Sure. I'll have to go to the commissioner for a little more help on this one. Yeah. I'll take a shot at that. I haven't looked at the details in several months, and maybe council members that are in the field might correct me if I misspeak. But I believe the only thing that's left that is assessed an insurance premium tax are individual plans. They're excluded, the group plans, from both private as well as governmental units. Now, why? So. I'm sorry. Would you say that again? We'll give you some more time. Which ones are excluded from the tax? Excluded are group plans, whether it's with a company or a governmental unit. Individuals who go out on the market and buy an individual plan are the only ones that are assessed the insurance premium tax. So in the new... We'll send you a copy. We will send all of you a copy of the statute. The statute articulates which ones are subject to the tax and which ones are not. And I don't know that you said that exactly right, which is why I want to send them a copy. Okay. But if I can just nonetheless follow up. We'll look forward to that specific information. But my understanding would be that any individual who goes on the state's Kentucky Connect, that's basically group and not individual. So they would not be taxed on that insurance premium. Is that correct? That's not an individual going on to the private market. That's a group plan, just like the urban county government is a group plan. I will follow up and make sure that that statement is correct. I have not looked at that individually, and evidently I've already misspoke, so I want to step back and make sure I answer your question accurately. Okay, and just to be clear, I think, Council Member, I don't want to put words in your mouth or thoughts, but her intention in asking this question and mine in following up is to make sure that going forward, the most vulnerable of our citizens are not being subject to a fee that nobody else is subject to if they get an individual plan. Is that, Council Member Hanson, is that a fair interpretation? Well, I was just going to ask the question, what's the rationale? Does anyone know why one group would not be taxed and the other group is taxed? I defer to the legislature, who is the one. Do you know Council Member State? We'll send out an email to all Council Members and address those issues. Thank you. If I can, just one more. I'm sorry, I said I was done, and I want to get back in. So are we subject to state regulation in terms of the assessment of that fee, or is that a decision that Urban County Council can make? And you may not have the answer to that question now either, but I think that's pertinent. Let me see if I can clarify your question. We have control over the amount, 1%, 6%, 10%. We do not have control over what it's assessed on because that is statute-based at the state level. Okay, I think that's worth repeating because I think there was a side conversation. Council Member Henson and Stenet, just... Council Member Henson. I just ask a question. The decision about what that fee gets assessed on is made by state regulation. We don't have control over it. We have control over the level of assessment, but we do not have control over which actual insurance instruments are subject to the fee. So we could work at the state level, but we can't alter that here. Okay. Thank you. Thank you. Thank you, Chair. Are there any other questions, Councilmembers? Councilmember Akers? Bill, you just mentioned that we can set what the assessment value is. What is it now? I mean, you said it's either 1 or 6 or 9 or 10 or something like that. 5 percent. Okay. So we could raise that, but we can't change who it is assessed to. We can't decide whose life insurance it's assessed on, whose marine, house, car. That's defined by state statute. But we said the tax rates? Yes. Okay, thank you. Councilmember Lane, and his, just for Stacy's information, his login isn't working. Okay. All right, thank you. Yeah, I'm out of service here. Some council members would be glad to hear that. I was just going to ask, in your projections for revenue going through fiscal year 15, but are you projecting some years into the future what the revenues are going to be for the Irvin County government? But the reason I asked that, I noticed that we're projecting, you know, a percentage of our revenue for bonding. And I just wondered if you had parallel numbers to run with that. Yes, the next section is going to address bonding, and part of that has a projection of revenues with it. Okay, good. Thank you. Council Member Myers. Thank you, Madam Chair. Mr. Barbary, could you come up for a second? You're probably going to want to answer this one. I don't know. So my question is, going back to the tax assessment, we can't change which policies we assess. We can only change the amount of assessment. However, is it possible that we could say, looking at a certain policy, we're going to increase the assessment on that one, but not the increase on another policy, type of policy? We would have to look into that, but arguably you all would have the discretion to set a higher rate on certain policies if that's what you're asking. But we would want to look at that issue before we gave you a conclusive answer. Okay. Thank you. Are there any other questions, Council members? I have just one on the landfill. That might be a commissioner. I don't know who this is for. This is just a broad general question. I know we're talking about revenue, but basically right now, are we simply needing landfill funds to maintain the closures? I don't think we have an active. Do we have an active landfill anymore? We don't, do we? We have gone through the closure of the large landfill. The one I have to check on is out Tates Creek. My mind's gone blank. Charlie. I know Raven Run was closed by the state, correct? Raven Run was closed by the state, yes, but we still have long-term obligations on post-closure, monitoring treatment of leachate and those things like that. Whether or not the current revenue stream is appropriate for that use, I think that's something that the Solid Waste Task Force was looking at very closely. I know that Council Member Stenet has asked me to try to reinvigorate that activity. But as it stands right now, we will always have, for our lifetimes, have some type of post-closure costs for those landfills. But that's our only cost right now, since we're not actually running an active one. Right, yeah. We're not accepting any more refuse at those locations. Okay. All right. Thanks, Charlie. Other questions, Council Members? Okay, I think we're ready to go on to the bonding, the fun part. Thank you. The next is current proposed bonding. And so I prepared with help this slide, and it was supposed to come in four parts so that I could build it for you. Okay, let me picture this. The first slide has the red line and only this dark gray portion in the bottom left-hand corner. So block out everything else, and let me just talk about existing bonds. So those represent all project bonds that the city has issued and still are paying debt service. And as you see, it cascades down as those are paid off, ending in about 2035. Now think of this with the red line and the two gray portions, the only thing that is on the slide. This light gray portion is projecting out debt service at the $25 million project bond level, which is proposed in the mayor's proposed budget for FY15. It then assumes a $20 million project bond in FY16, and then $15 million each year thereafter, 17 on. We have pent-up needs that were delayed during the recession period, We know that we have a high demand for infrastructure, and so we have modeled $25 million, $20 million, and then $15 million to illustrate what those bond debt responsibilities would be under that scenario. Then let's look at the red line. That represents our goal of having our total debt service to be 10% of revenue. And to address Councilmember Lane's question, in order to have that line there, we had to make some assumptions about revenue growth into the out years. And so we assumed about every five years that there was some sort of an economic bump. And I don't know that you can see that, but you see it's not a straight line. It has a little dip, and then it rises on up, and then there's a little dip, and it rises on up. So we have assumed accelerating revenue, 3.5, 3.8, and then maybe a 1.8 correction, and then we would come out of that at 2.5%, 3%, 3.5%, 3.8%, 1.8% correction, just so that we could model what would be a plausible debt service goal as 10% of revenue. And that goes out to, I think, 2032. So now back down to the different colors. We've looked at existing project bonds or the dark gray. I've explained to you our assumptions for proposed bonds, which includes the 2015 proposed bond of $25 million and a scenario of what those bonds would look like in the future. The dark blue was an assumption that if we issued a special $40 million project bond, it might be for Rupp and a convention center. So what would be the pressure on LFUCG if we had a $40 million project bond that was issued in the spring of 2015? It would have a zero impact on the 2015 mayor's proposed budget. It would be issued in the spring. The first payment would be six months later. We would be in FY16, and so the payments then start showing up in FY16 and go out for the life of the bond. So now you have the layered effect of existing bonds, proposed project bonds, up to a $40 million special project bond, and we're still under the 10% debt service. But we're not finished. we have issued pension bonds. And those are on our books. They're not project-related. They're taxable. These others would be non-taxable bonds. But we have those, and we have to pay those out over the course of the 20-year issue. So when you layer the pension bonds on top of all of the project bonds, we now are in excess of our 10% goal. We are this year, and we would be until about 2023 under this scenario. But we would grow out of it with increased revenues and controlled spending in the out years. That gives you a scenario of how we stack up currently with our goal of total debt service to be within 10% of revenue and a scenario of how we would work our way up to meeting that goal in the future. And before we leave this page, we have several with questions. The visuals are always good, Bill. Thank you. Councilmember Lane. Thank you, Vice Mayor. When you say bond debt, does that include all debts of the government? This is general fund, general obligation debt. It's not total debt because we're matching general obligation debt to the general fund, which has to support it. So I'm only talking about general fund debt. But it is all general fund debt, even if it's not a bond. It will be included in there. Don't we have other debt other than bonds? Not a material amount. I'm trying to think. My mind's gone blank. Our debt service, this is what we pay our debt service on and qualifies as debt service in our CAFR. Now, this is gross debt service. We get a rebate on the Build America bonds, which is not recorded in debt service. It has to be recorded as other income. And then there's a million dollars that the MAP funds are supporting because the $13 million paving bond that was issued last year, the intent was, it wasn't dedicated money, but the intent was that future MAP funds would assist in paying that. This is before those subsidies to our debt service. The rate of interest that we're paying over the 10 years, we go out to 2024. What rate of interest are we estimating for that? I can get that computed for you. Future, you mean future bonds? Yes, sir. Yes, well, we've started out at 3%, and then in 2016 we used 3.75%, and in 2017 and on we used 4%. We tried to guesstimate on the high side how the rates would go up in the future. Okay, now in addition to the general fund debt, we have enterprise debt that would apply to things like the EPA consent agreement, construction of storm sewers. I guess solid waste would be under that area too. What would be our total bond debt if you added up all the bond debt of the Irvin County government, whether it be enterprise or general obligation bonds. I'll be glad to get that information for you. I have a slide next talking about the sanitary sewer bonds, but the total bond debt, I'll get back to you with that. Okay. The other question I've got, are you proposing that as the amount of bond goes up, that we would be increasing the amount of money we have on our contingency account, our rainy day fund so that we, you know, would have more money available, you know, to improve our bond rating and to help out if we had a dip in the economy and, you know, we still have the debt to pay. Well, all of those things go into our bond rating. The fact that we have a policy and that we are working on a plan to meet those goals, Our cash in the bank is always important, as well as the characteristics of our economy and our tax base. So it's many, many factors that the rating agencies go into it. But I dealt with debt service and revenue on this analysis, not unbalanced. Well, my approach on this was to look at our total indebtedness of the government, say, for the next 10 or 20 years. For example, if I'm not mistaken, I looked this up a few weeks back, but it seems like that our total debt of the Erden County government as of June 30, 2013, the end of the fiscal year, based on the CAFRA report, was about $400 million. So if we were going to spend maybe bond $300 or $400 more million for the EPA, assuming we can fund some of that in cash, and then do the other things we need to do, the proposed project bonds that you noted here would add up to maybe about $160 to $170 million over a 10-year period. I'd sort of like to just put everything in perspective to show total indebtedness and estimated interest rates on that and what our total payments would be. Obviously, the $40 million proposed project bond, and I presume that was the one for the Rupp Arena, as a percentage of our total debt is not very significant. So that's all I think I have on that. Thank you, Vice Mayor. You're welcome. Council Member Stennett. Thank you, Vice Mayor. Thank you, Bill, for bringing us this chart. I'd like to have a little more of the details, though, behind it, especially for the public to understand it. Thank you for putting those up. Can we get a copy of that? We can. Can you just quickly go over, just so the public watching, everyone understands, what our current debt service is, what's projected for FY15 will be, because I think it actually goes down. and then what the total outstanding bonds are, and if we add the $25 million and what the outstanding total will be. Can you kind of go through that quickly? Real quickly, the middle column with a yellow header on it is the modeled total debt service. This is gross debt service all the way through 2033. And to the right of that is what it would be as a percent of revenue. So gross debt service, 34.5, but the budget is in the $33.2 million range. Remember I said there were subsidies that were going against this. It would rise in 2024 to about $42 million, but at that point you're at 10% of revenue. and then it starts to diminish under this scenario because we didn't project out a continual another 20 years. On the far left is total geo debt, and the 275 and the 137 comes to about $410 million, and that's general fund debt. The missing piece to answer Council Member Lane's is our total sewer debt outstanding, but I can get that number for you. It's in the $40,000, $45 million range, I think, but I'll get you that number. I may be off a few million. Can you make copies for the council? We can. For this chart so everyone knows. So the $33,407 that you have in the budget, is that net of the money coming from the map? It is. It is. Okay, and that's the $1.2 million-ish? Right. Okay, that is the debt service. Now, what year was the first pension bond issue? Do you remember? 2009 right we were in the middle of the left-hand schedule 70.6 million and the significance of that and the reason why i ask that is when we first started working on the 10 debt management plan that was in 2008 that was well before our thoughts about pension bonding correct so um you know even though the pension bond puts us above it today we are still well below if you add in all the other categories, including the $40 million for the Rupp project. Significantly lower. So the last pension bond you're saying comes off in 2035, approximately, on your previous chart? 2033, I believe. Okay. And then on the current debt service, it went down this year. Which bonds dropped off this year? Going into next year's budget. Do we know? I'm having people take notes. Yes, we do know, but I did not bring to quote that. But, yes, there were some that dropped off this year, and I can get that to you. Okay. And this year's $25 million need has $8 million, obviously, for the Senior Assistance Center, which is a one-time hit on that piece of project. So you think going forward $15 million is what we're going to project and that will hold? Well, that's putting us on a diet. The assignment was how do we meet our goal of 10%. And so this is one scenario of how we would meet that in a reasonable amount of time. And you think $25 million, you're going to go through that list here in a second of all the projects, but that does not include any additional road resurfacing money bonded-wise, right? It does not. We have separate funding for that, which is part of the presentation as well. Okay. Thank you, sir. All right. Council Member Kay. Thank you, Vice Mayor. Thank you, Bill. If you'd go back to the chart. Thank you. I guess for my information and for those watching, there's obviously a point at 2023 when there's a steep decline. Can you explain what happens to cause that? Well, there's some major bonds that roll off and that are totally paid off, so that's why there's a steep decline. And we can look through our schedule to see which ones those are. So it's not a single major bond issue. It's a variety of bonds that were issued, whatever that length, 20 years ago, and now they're. So there's a lot of bonding that was added in at one point. Again, I didn't come prepared to talk specific bond issues in 2007 versus now, but we can get that and show you, illustrate that point to you. Okay, that would be helpful. And second question, this is a long projection, but of course life will go on. If you took the line, I'm looking at the proposed projected bonds at 2037. Is that going to start to balance out? If you projected that line, would it start to go up because of the accumulation of bonds that have been issued in the preceding years, or would it start to reach a balance? Well, we only projected out that far, but if we continued to bond at $15 or $20 million, that would slowly rise up, but not at the same rate as your red line that your revenue is raising up. I see. So that's a reasonable assumption about fiscal responsibility. It's still significantly less than the target of 10%. That's what we were testing, and that's what I was trying to illustrate with this chart. Okay. Thank you. Thank you, Chair. You're welcome. Council Member Ellinger. Thank you, Vice Mayor. I want to make sure I understand the chart because I think we've put some things in here that maybe need to be moved around a little. So if we look at the gray area, the existing project bonds, that's what we have already committed to. That's correct. Now, the next one is things that that just leaves money that we could propose projects, but that's nothing we've spent money on, correct? That's correct. This is projecting out some assumptions into the future for future bonding. I guess what I think would be a better chart is if you would do the existing project bonds, because we know we're going to have to pay those out, and then we also have to pay the existing pension, right? Correct. Why would we not put that down there second? Because we know that's something we have to do and set that in, and then that kind of sets our basis of what we are every year going to be spending money on. and then we can look at where we're going to grow each year. But as it looks like, that's on top, and it's something that is not payable, but we need to put that down there, I think, right next to the existing bond projects because that will then set our basis of where we stand. Do you understand? Because it looks like... I do, and we can arrange the colors in any... Well, I just think if you do that, then that gives us a little better understanding of how much we actually have to spend to get to that red line each year. Because we know what we've already committed to. And then we'll know what we can go above that. But as it stands, we don't really know what that light gray is. But we know if we put the other two together where we are presently. I can take that assignment and turn it around real short in order. And then because it looks like the existing pension is the one that puts us over the 10 percent, and that's the problem, but we've got to see what we're going to do with our existing potential bonding and the RUP and see where that puts us, know where we stand before we get to that next level. I think that would be helpful for me at least. Thank you. Thank you. Council Member Akers? Well, I was actually going to say exactly what Council Member Ellinger just said. I recognize that, too, that the way the picture is laid out, it does look like the existing pension is what's putting us over the edge. And I recognize that that is still true today, but it won't be true in 10 years or so. And so if we look at what we actually have committed to already first, then we see that where the proposed projects would actually be what puts us over that 10 percent mark instead of what we're committed to. And so it's just a, I think, just a better accurate depiction of where we are and where we want to be as far as debt goes. So I guess the proposed project bond of $40 million, that is a, I guess, you have that separate because it's just a one-time bond separate from the $25, or is it because it's payable out of a different? It's a standalone project. Okay. And when we were putting the budget together, we wanted to size and assess where that was in this modeling that we were doing. Okay. I think that's all I have. Thank you, Jim. Okay. Councilmember Ellinger. Thank you, Vice Mayor. I guess when you're redoing the depiction here, could you put what you have each year is what we'll have to spend. So when we put in our existing project bonds and we put in our existing pension, then could you put out from each one what we have the number that we'll be able to do for the proposed project each year on throughout, and then how much also we'll be doing for RUP. so we'll know what that number gets to, so we'll know accurately how much this model is going to allow us to go from 2015 to 2037, that we'll actually have that number. So you want a spreadsheet of daily, of annual debt service broken out by the components? Yes, if you could, please. We had that. I thought it was too busy, so I didn't bring it, but we can sure produce it for you. Well, I guess looking at this, what each year, what that number you project to be. That's how we built it. Right, exactly. I just wanted to get that in just the numbers. Thank you. Okay. Council Member Lane. Yeah, I was going to suggest that maybe if you didn't have the bonds and the amount of the debt and the debt service readily available, say as of today's date, that maybe you could pull the number as of June 30th, 13, which is the end of the fiscal year. And I know you absolutely have it for the audit. And if that was simpler, I think that would be, from my perspective, would be adequate. And then you would be adding what additional debt has been added this year. I also was wondering, with this assumption, I don't see anything in there, for example, like a new city hall. And I don't see the Irving County government operating out of this building for 10 more years. So there are going to be some other capital investments that may be required over the next decade that there needs to be some kind of an allowance for that. But I put in $30 million for a new city hall, and I put in $40 million for the Rupp Arena. I used your $165 million estimate for project bonds, and I figured the EPA would be about $300 million. That would be in the enterprise fund. Sanitary service maybe could pay out a, not sanitary service, but storm service could pay out of cash. We're going to bond the senior citizen center for $8 million. That's part of the 25th. That's in that number. Okay, good. And then I figured in 10 years there are going to be some other things we didn't anticipate. For example, you know, what if the actuarial estimates for the police and firefighters pension fund is wrong? and, I mean, 10-year estimate of what are the interest rates earned by the pension fund and how many police officers and firemen will be covered by the fund, how much they'll pay in, that kind of stuff. There's a lot of gray area out there. So, you know, I think you need to have a little bit of a cushion for additional expense. But just on these rough numbers I plugged in, I came up with over $600 million in expenditures over the next 10 years, and we already have $400 million as of June 30, 2015. So that's a billion dollars worth of debt that we're going to have to be paying off. Now, granted, we'll be paying it down over time, so we'll be reducing some of the principal amount as we're adding the new debt. That's why I'm saying I think for the council to look at numbers like this, that we could sort of visualize 10 years out into the future, you know, what might be our debt requirements and what our debt service will be and relate that to our projected revenues, which I think everybody else has said something similar to that, but I'd just like to reiterate I think that would be a very valuable exercise. We maybe don't have to do that every year, but since we're at a turning point on our bonding, this would be probably a good time to do it. And thank you all very much. I know this is a hard job with all the bonds, and when you refinance and merge them together, it's even more complex, but if you could pull those numbers together, that would be great. Thank you. Councilmembers, if you don't mind, I'll go first to Councilmember Beard, who hasn't spoken yet. Thank you, Vice Mayor. We keep on talking about the $40 million for Rep Arena. And as it stands right now, there's essentially nothing from Frankfurt. There's nothing from the U.K. It's $40 million or $41.5 million, whatever it might be. which means that if we go forward, we're going to have to do $40 million next year and $40 million the following year and $40 million out of an item until we get the thing built or and or keeping on issuing bonds. What do you all feel about this? and Frank is back there for the very purpose of saying something. I don't know. I was told he was going to be here, so I figured that it was a shame not to let him get to the microphone. I told Bill, pick the time when you want to throw me under the bus, and he just nodded. So the $40 million, Councilman, is presumed that the other parts of the financing come together, which includes the university and the state. If they don't come together, there will be no need for the $40 million from the city. So, you know, they all have to come together in a coordinated fashion or the project is a non-starter. But that still doesn't, you know, at least the numbers that we heard initially, that still isn't going to do but a third of what we're going to need to do by 2017. The plan that hit the newspaper about an hour after we made a confidential presentation last week basically outlined a plan that calls for an annual $10.7 million contribution from the university, a proposed then $80 million contribution from the state and a $40 million contribution from the city, in addition to other revenues which would be generated by the activities of the Lexington Center Corporation. You put those all together, that is sufficient funding for the $175 million renovation of Rupp and the $110 million reconstruction of the Convention Center. There is no anticipation that the project would come back and ask for any additional funds from the city. Your 40-40-40 scenario is not on anybody's radar screen. It's a one-time 40-40. I understand that, except once we go start down the path, and if the state and university don't jump in with us. Then you don't issue the bonds. At the very front end, we'll know that we don't issue bonds. We won't have already issued it. Well, we will know by that time next year whether we have the support of our other two partners. And if we don't, these bonds would not be issued by Bill until that time this spring of next year. And if that's not there, then we will not be back here asking you to issue those bonds. Okay. I'm sure that's what everybody would like to hear. Thank you. Thank you, Vice Mayor. You're welcome. Council Member Stenet. Thank you, Vice Mayor. I appreciate the conversation that we're having today. And, Mr. O'Mara, if we could maybe redo this chart with debt service payments spelled out specifically and how much that debt service. I think the bigger discussion is not the amount of the bond, but the amount of money taken from the general fund that could be used on other priorities or other projects. The $40 million bond alone for Rupp, that's $2 million additional debt service. We went from $29.7 million in 2013 now to this year, $33.4 million in debt service. that's almost that's 3.7 million dollars additional we're taking out of the general fund that could be used somewhere else so we have to weigh that and i would like to see that the chart that every for every dollar we add what the what the debt surface jumps to can you do that i think council member ellengrath said well um i can do what council member ellengrath asked for i i'm hearing something different you you want a sensitivity chart if i do this then i'll read over and here's my point and if yeah but some things are different i read over to this we had this conversation this is not about the bond amount it's about living on the credit card and what it takes away we have to have money to pay the debt service and it takes out of other things in a general fund so if we're increasing our debt service between fiscal year 2013 to this year by nine percent we can't keep on that same path and sustain it in my opinion some people may want to they like to grow their debt but not where i come from we don't want to grow our debt and Unless it's a priority and a need. I think we need to have that real conversation. I think you're going to reverse the chart and put the bonds on top. We can see that. But I'd like to see what the debt service anticipation will be and constraint on the general fund. And a real dollar amount so we can see. And the chart that I showed you, you asked for a copy for, is that answering your question or you need additional information? I think it does. If you put it back up, I'll tell you. I don't remember. It was up so quickly. The middle column with the yellow header is the anticipated debt service per year under this scenario, regardless of the order of putting the colors up there. And right to the right of that is what percent that is of our assumptions on revenue. But if you want a chart within each year to say this is pension, this is 2009, this is 2012, then we can explode each one of those numbers and show you which bond makes up that 34.3 and which bond makes up 37.9. My real concern is what happens from 2015 to 2016. You have $4.5 million of cash taken out of the general fund. Again, that could go somewhere else. And that's what we really got to be concerned about. I want to be under 10% as much as anyone. But also the impact to the general fund cash flow is also a big issue. We had that discussion in 2009 when we went through the recession. It's not about the dollar amount of the bond. It's about the cash flow. And we have to be able to afford this going down the road. And it looks like it goes down, though, the following year, 2017. Is that because bonds come off? And this assumes $15 million each year, this chart? Yes. Well, $25, $20, and then $15. All the way out. Okay. I think if you can get us this chart up, that will be sufficient, but I think it's an important lesson to understand that anything above that will spike our dead service. Thank you. Thank you, Vice Chair. You're welcome. Council Member Ford hasn't spoken. Council Member Kay, if you wouldn't mind if you would go next. Council Member Ford. Thank you, Vice Mayor. the issue in regards to RUP, I plan to speak not in regards to bonding, but I plan to speak to that issue later at work session, just for clarity for council members, because there's an item on the docket as it pertains. As they say now, and I see Frank here, and hopefully he can help us at that time. My question is in regards to something that sparked my interest that Council Member Lane mentioned, and I hope this is the appropriate time, so I'll just throw it out there. in regards to the government center. Are there any funds bonded or otherwise in the proposed budget that speaks to either repairs on the existing government center or proposals to get towards building a new government center? Let me talk about repairs. There are repair dollars in the budget. both in cash-funded, I think, as well as bonding. So there are dollars, and those are for repairs not to one footprint, but to all of our footprints that we own in Fayette County. In regards to a new government center, we have a RFP out right now looking at a public-private partnership, and those are due in short order, and we will be evaluating those to see if they have any merit and if so, to bring them forward for your all's consideration. So we do have an idea that we're vetting to replace this building, and so it's going through its development stages now, and we'll come forward when we have actual numbers. Very well, and I guess my last question to that end would be, depending on the findings of this or the conclusion of the RFP process, in your long-term forecast, which I know you guys are paying attention and due diligence in carrying forth, is it safe to say that perhaps we'll have to incur some long-term debt to bring about a new government center? Even if we are able to go into a public-private partnership, might our future debt load also encompass construction of a new government center from a forecasting standpoint? Well, our forecast did not include any bonded debt for replacement of this building because we were very interested in this concept and were in the process of vetting it. So until that comes back, we wouldn't have any data to make our assumptions on. I left it out. I used this as project bonding, pension, and stopped there. The consent decree and everything is on the next slide, which is revenue supported. It's not supported by the general fund, so I was trying to stay within the general fund with this forecast. Hi, sorry, I was watching downstairs. In terms of why there's no money set aside for, I lost my breath, I ran up here too fast, for the public-private partnership. So the idea behind it is that there's a chance that we won't have to bond, or we may have to bond something that's lower than $30 million. So, excuse me, that winded me. So the idea behind getting all the buildings together and working with a private company is that they might put up some of the capital for the project. There might be a lease option, for example. So we don't know exactly what that dollar figure is. Does that answer your question? Yes, sir. Thanks, Vice Mayor. You're welcome. Councilmember K. Thank you, Vice Mayor. Bill, while you're coming up, kind of in a more general sense, people have asked about specific projects that might need to be bonded out in fiscal year 15 and beyond. I'm assuming that what you're telling us is that right now there's placeholders, 25 million and 15, 20 million and 16 and 15 for whatever kinds of projects might come forward. It might be, we might need it for some part of the government, a new government center, whatever we might need it for. Is that correct? That's correct, Councilmember. I was doing a scenario to project past 2015, 2016. And so you have to make assumptions. So I tried to pick some that I thought would be of value for this illustration. I tried to keep them simple and model that out and see how it would overlay over the course of time. Okay. But in terms of what's now committed, all of that that's in the second, the lighter gray area, is simply options that we might have. If this council could decide in 15, 16, 17 to bond nothing, and that would bring that line down. Is that correct? That's correct. Okay. And then more generally, why do we bond? I think people watching this may not understand why would we even consider bonding something as opposed to paying for it. Are there guidelines for that? What do we think about when we think about whether to bond or not? Well, if you can pay cash, that's always best. If you can pay cash for your car, if you can pay cash for your house, that's always the best way. Many people and many organizations cannot afford to do that or feel that the benefits of doing it now versus 15 years from now when the cash is available are good enough to consider going into debt. So what type of things are we talking about? Not operational. We're not borrowing money to pay for overtime to pay for a recurring project. We're talking about doing things for infrastructure, things that have useful and future life to the community, whether it's fire trucks, whether it's a senior citizen center, whether it's purchase of development rights, or software that has a 10-year useful life to support functions. So it's the same decision tree that an individual would go through as to my washer and dryer have broken, Do I go to the laundromat until I have cash, or do I put it on a credit card and make payments? And bonding would be like putting it on the credit card. The good thing about bonding is it's competitive, and it's usually a low rate. These are non-taxable, and therefore are usually lower than what you can get from a bank. And so it's low cost of capital financing. Okay. So basically we borrow money so that we can get the use of something now, and kind of the tradeoff is that we pay a little bit of interest, but we get the use and we use it only for things that have a useful long life. Correct. Okay. That's helpful. Thank you. Thank you. You're welcome. I'm going to go ahead and ask a question and ask if there's a council member who hasn't spoken yet to go ahead and log in if you have a question. Bill, when you first addressed this page 18 chart, I wrote this down as a quote. Oh, boy. You said that the blue line, quote, might be for Rupp Project, unquote. Is there something else that might be for? No. This was modeling up to $40 million for the project. Okay. And just from your perspective, I know there are many perspectives on this project. Is there any reason now that the state is out, the university is out, and we're actually the only ones with money in the project, that we would have to authorize these bonds now to sell them next spring? Can we wait to authorize them? I think the authorization of bonds is always at the discretion of the council. The authorization is not an edict of when to issue. Talking to Tom Howard, who did the bonding, billions of dollars of bonding for the state, many times the state legislature would authorize something, and it would be two years later that the money was needed that the final issue would be made. So authorization, issuance, two different times. You can do them together. You can do them separate. And that would be to whatever the guidance of the council would like. So what would be the latest that the council could vote to authorize them if they wanted to? I mean, I realize that the legislature will meet again next year, but is there a big rush right now, I guess, is what I'm wondering. Well, let me clarify. I'm not advocating. I understand. I was just illustrating if to put into this model. What the debt service would look like. Because that was the assignment to talk about future debt services. But you would know, I think, or maybe not, when the administration was going to come to the council for authorization. Or do you know that? Actually, we built the budget, the 2015 budget, and asked about the Rupp project. It had no impact on dollar budgets in 2015. All of the scenarios were a 2016 budgetary impact. Authorization was a discussion that could happen any time between now and when the bonds needed to be issued. Okay, that's really what I was getting at. because there isn't money in the budget for these bonds, and so the authorization is really not an imminent thing, which has brought Frank Butler to the podium. Let me respond to your question about why. Part of this negotiation has been, let me see if I can characterize this appropriately, everybody wanted everybody else to show their cards. And when we went to talk to the state, the state said, well, where's the university? We went to talk to the university, they said, where's the state, where's the city? So part of the strategy for you approving it now would be that when we go back to the state, which we will be doing between now and their next session, we can say to them, the council has approved the bonds, conditioning on the other partners stepping forward with their part of it. So myself, the mayor, and others can go meet with the same people we spent the last two months meeting with and say, hey, folks, the city has stepped up. And, I mean, we got that question from the governor's office, from the Senate and the House, you know, where is the city in all this? And so from my perspective, it makes the sale of this project much easier if we have a commitment that's coincident with everybody else's commitment that we can go to them and say, yes, we do have a commitment from the city to do this. Let me put my question a little more to the point. Is there any difference between April 2014 and November of 2014? realizing that those of you who are in the middle of this would rather get it done now than later well we anticipate that you know we will start our second full court press within about 30 days and we will start meeting with legislative leadership in June so and there and that that question will be asked of us who is committed where's the UK agreement and and if you're going ask us to put up 80 million dollars we want to know who else is in the hunt so i don't know how time sensitive it is vice mayor i just know that it would be helpful if there was an indication of support from the city to us and try to sell it that helps and and i understand that and and i understand that councilmember ford will bring us some more questions and discussion and work session. I think the most important thing will be for the council to finally have a discussion about the Rupp project, which will help everybody sort through all these things. Thank you so much. Council Member Ellinger. Thank you, Vice Mayor. This was not the question I was going to ask, but Mr. Butler, since you started talking about this, I want to get to this question first. When you started going to scenarios, and as the Vice Mayor said, we really haven't had this discussion on the finances and who's putting one in. And you've talked about the $40 million for us. Is that our one and done sort of kind of? That's your one and done, yes. And speaking of which, Julius Randle just decided to go to the pros, which is not shocking, but he made the press conference. But he's one and done. But is this our one and done into this? He'll probably make more in his contract than I'm asking you to commit from the city. But, yes, this would be your one and done. And what was the other numbers that you went through? The $10.7 million from the university would be their annual contractual commitment over a 30-year period, which, and let me say this, and hopefully you'll receive it in the spirit in which I offer it. We're basically asking the university to invest over $300 million in RUP over a 30-year period, and they don't own it. You all do. We're asking the state to put $80 million into it, and they don't own it. You all do. So what we're asking you to do is put $40 million in an asset that belongs to you. That's the most succinct way I can put that, but it is a one-time request. You said the state $8 million? $80 million. $80 million. $80 million. I thought I missed a zero. No, $80 million. Okay. I was trying to do the math, and that didn't seem right. Okay, thank you very much. I appreciate that. And now the question I had for Commissioner, looking at this chart here, and I won't belabor the point, and then if we go to the, is this chart the same as what those numbers are that you put up there that we don't have? Could you put up the annual, could you put that chart back up there then, please? And I guess to answer my question, also Council Member Stendon, so those are the numbers you're using for the chart for each breakdown. And I guess if you could go through each year and put down what is in each part of that. So if you look at for 2016, the $39 million, how much of it is existing? How much is it going to be proposed projects? How much is a pension? So that would kind of break each of those numbers down. And it would show what we would have as we go forward for that number that you're putting in for the proposed project that we'd have in the future so we know how much we'd have. And I think that would then give us our debt service each year and how it's broken down. And I think that would answer both of our questions. Or at least it would help me. Maybe not him, but it would help me. Thank you. Council Member Lane. Yeah, I had a question for Frank Butler. Yes, sir. My question is that if the Herb County government puts the $40 million bond into the Rep Arena, what other obligations do we have financially? If there's a shortfall, how is that covered for the... You basically have the obligation for Lexington Center Corporation now. So that obligation doesn't change. So you would have an obligation as the city for any debt that the Lexington Center takes on. Okay. That's all I had on that. But the other thought that I was having, I was sitting here thinking about the long-term projections here for revenue, and a percentage of that is for the debt service. And it made me think of the misery index, which, and I looked it up here real quickly, It was 19.7% in 1980, and that was a combination of the unemployment rate and the inflation rate. And here again, just as an abundance of caution, we need to be thinking about in our 20-some-odd year projection out here, we could have some type of a downturn in our economy and a higher unemployment and a higher interest rate, and all those would impact our projections. So I guess I'm a fiscal conservative, but we need to always be thinking about the good, the bad, and the ugly, and the ugly would be the misery index. Thank you. Thank you. Council Member Stenet. I hate to ask this, Bill, but in this chart, normally when we do in my profession a retirement plan for someone, we have a discount rate factor going forward because $15 million is not $15 million 10 years from now. Is there a way to do that in this chart, or is this just a flat $15 million? We didn't show maybe it would be $17 million to get the same $15 million worth of projects in 10 years. Is there a way to add 3% inflation rate for future to get a real more estimate? We can use whatever assumptions you'd like for me to model. But you didn't use any of those assumptions. We meant 15, 15, 15. Yeah, so in 10, 20 years, it shows it well below 10%, but that may not be the case. I'll be glad to raise the 15 by a factor of 3% inflation or whatever it may be, because we know things will cost more to do later on. I think that would give a more accurate assessment. And then back on RUP, Frank, I've got a question. Since we're going to open up the can of worms today and talk about RUP maybe later too, I was going to ask you, so everyone's making an investment in RUP. The city's investment in this piece is $40 million. What's the return? Did you all factor in a return on that investment? I know there's some indirect conversations about jobs and other things, but internally. The way it's structured, and it's in the details of probably the upside is in the details of the contract with the university. Because there are a number of things that we didn't put into the calculation because it would have been those kinds of projections where you said, well, where did you pull that one out of? But, you know, there's a considerable upside in the food and beverage revenue that's not cranked in. There is a substantial upside on the media part. And the way we structured that with the university is that two things would happen. One, that as a part of that operation, we would create a capital reserve, which now does not exist for RUP. RUP basically operates almost on a break-even basis. And so whenever they need capital, they basically have to scramble. Things break. They're trying to figure out how to pay for it. We would establish a $10 million capital reserve from proceeds, from new proceeds from media and the premium seating, et cetera, and we'll go into a pool. Once that pool was established, there would then be revenue sharing between LCC and the university. And that, we think, has got substantial upside. We haven't tried to put a number on it. You could ask a consultant, and they basically would say, what would you like the number to be? And so we didn't want to get into that, but there is some substantial return. The other thing I would mention, if you all remember when we started this out three years ago, one of the considerations that I put on the table for financing was that we were going to include TIF financing in this. Well, we took that off the table, and instead of having that as a part of the RUF project and trying to include that in there, we assumed that whatever TIF revenue that would be generated from the property that you own across the street, the TIF, most likely TIF revenue coming from the development of the high street lot, that those funds would be returned to the city and not to support the RUF project. So there are a number of potential returns and offsets that would come back to the city, in addition to all the other stuff you've heard with the additional jobs and the tax revenues. But you're just focused on the RUP piece. What about the convention piece? Because does a U.K. deal only apply to RUP piece? It doesn't apply to the convention side. Right. Anything that's generated on the convention side stays with LCC. Is there a projection of what we'll get back from that? Yeah, but it's very modest. basically because of the reality, and as you probably know, the convention center doesn't make money in and of itself. It's actually subsidized by what's generated in RUP. And there's a whole series of reasons for that, the issue of competition for events and what people have to do in order to attract those folks here. The real beneficiaries to the convention center is not RUP, it's not LCC, It's to the businesses around the convention center. So you, in effect, are funding a loss leader in the convention center to generate revenue for the rest of the city. And that's as simple as I can put it. Now, we have built into the revenue projections an increase over time. But as you might suspect, we've been very conservative about that because part of the project calls for about a 14-month dark period where we would close the convention center, redo it, and then reopen it. It's going to take some time to recover on the backside of that if you do that. The other consideration we had was we were going to stretch the renovation out in the convention center, and that actually turned out to be more painful financially than doing it in a single period of time because of the construction costs and the uncertainty, because we've already got, as you probably know, we've already got folks that are looking beyond May of 15, which was the date we had originally projected to start the renovations, and they're already saying, well, we're going to start looking somewhere else for our convention because we're unsure of what's going on. And even if it's open, there's going to be some construction going on. We don't want to be there when that's going on. So we have tried to be conservative in all our approaches, both from a revenue standpoint and an expense standpoint. I'll close by asking, I'll save some questions for the work session, but when will the public and the council see the detailed plan? We're willing to do that any time you all want to. Now that the session is over and all the secrets are out, we're happy to sit down and go through the gruesome details with you one-on-one if you'd like. Well, I think it's more important for the public to see it. I think that should be our logical next step is to get the public to understand what we're trying to do and why the council should even consider a $40 million bond. I think once that case is made, then the council can take it up. We're happy to do that. Thank you. Thank you, Vice Mayor. Councilmember Scutchfield. Thank you, Vice Mayor. Excuse me, Frank, I just wanted to remind you, along the same lines that Kevin was talking about, I did ask for a five-year past profit for Lexington Center looking at the ROI in the future, and I know that you all have been working, but that's something I need to consider, and I think the council would be better off to be able to see that as well. Just a reminder. Okay. Yeah, we have been unfortunately otherwise engaged. Thank you. You're welcome. Will you be at the work session? Yes. Okay, I appreciate that. And just in response to Councilmember Scotchfield, I know at Thursday's Lexington Center board meeting, we looked at numbers. The only two net profit generators are the Hyatt and the Arena. The Convention Center is not. Triangle Park is not. The Opera House is not. But those do have economic impact on our community. Those people shop. They eat at the restaurants. they, you know, boost the bottom line in that way, which is a whole other conversation I hope we'll get to have around this, and that is what happens when the convention center goes dark and all those businesses in the Lexington Center are closed for a year to two years. So, I mean, I think that's a future conversation, but it's a major conversation. So I appreciate that you'll be here with us the whole day. Okay. Thank you. Thank you. I don't see any other questions, and we still have presentation left. So, Commissioner, if you want to go ahead. Thank you, Vice Mayor. Well, we were talking about the general fund debt. I wanted to take one slide and talk about sewer fund bonding and to tell you what our plans were for 2015. We do plan on using about $37 million in very low-cost Kentucky Infrastructure Authority loans, as well as cash reserves, to fund our capital demands on our consent decree and the building plan through the sewer fund. We do not plan to issue any new money bonds in 2015. However, we are pursuing restructuring the existing sewer bonds, and that will allow us to be more favorably placed when we do go to market with very large bonding in the future. We would defease the existing revenue bond, which means we would put all the money in escrow. We would basically pay it off early and it would then be paid to the bondholders over time. After that's done, we would refund an existing Build America bond, which is refundable because of sequestration reduced our subsidy to that. If we retire both of those bonds and reissue a replacement bond, we would write new debt covenants, which would be much more favorable and less onerous so that when we issue new bonds, we wouldn't have to have a mountain of cash required to be sitting in our bank account when we're going out and borrowing more money. So we plan on doing that hopefully this summer, early fall, again, so that in 2016 and beyond we would be better positioned for future issuance. Any questions on that? I'd like to see none. Oh, look, look, look. Council Member Lane. What is your estimate of the total bonding for the EPA consent agreement? Do you have a number on that yet? We have a model. I don't remember because we have KIA, we have cash, and we have bonding, and I'm not remembering the three pots right now. But it's all dependent, of course, on these first projects and how they come in. So we've used very early numbers. We think they're probably a little on the high side because of the things that Charlie and his people are doing with these early. and we actually have been updating it about every six weeks or so as more information, and so it's a moving document. We're actually having a third-party person do a review of our total model to make sure there aren't any mistakes in it because we will be relying on it for several years to come to both model bonding as well as rates. If you could, when you do the other bond report, if maybe you could show us what we're doing in the sewer fund right now, both, you know, the KI loans and bonds combined. Thank you. Okay. All right. All right. With that, then I would like to turn this over to Melissa, and she can talk about the actual project bond in the FY15 Mayor's Proposed Budget. Welcome. Thank you. Good afternoon. We've talked a lot about the project bond, So let's talk about what's in the project bond. Well, I hope you all have a copy at your desk because this is very, I can't read it up there. So we didn't think about that when we put this slide together, clearly. On this list, we have a variety of things. These are what we proposed for the project bond. We had a goal of $25 million, and we came about $7,300 shy of that. So we came right under where we had established as our goal. Some of the big projects in here, some things that you've seen in prior years that we continue to do every year, or there are projects that started last year or two years ago and they're still in progress. The first thing on there you'll see is the Public Safety Operations Center. The first line on this spreadsheet is the LexCol portion of their move to the new facility. Later on in the spreadsheet here, you'll see the public safety side of that. That public safety side is about $1.7 million for next fiscal year. We have $1 million in there for the PDR program for FY15. We have the second phase of the Accela project at 1.1. The next three items are computer needs. Some of these are to support our network and to give us some critical updates that we need to our network. We have sidewalk and catch basin repair on Man of War. And this is specifically from the section from Bold Bitter down to Tates Creek. We did a section last year. We plan to do another section next year, so this is just repairing the sidewalks on Manowar. You can see we have sidewalks that are nonexistent in developed areas. We'll be putting sidewalks in. The next few are general maintenance repairs, and I believe someone asked about if we had general government repair money in our budget. And this is the bond funding for roofs, HVAC, general repairs, infrastructure improvements, life safety. The vehicle replacement of a million dollars on this list, that is for non-police and fire vehicles. You all will remember, we are reallocating funds during the current fiscal year to purchase vehicles for both police and fire, so we're not having to bond money and FY15 for those two divisions. The pothole patcher, which after this winter seems to be a very popular item because we've got lots of potholes now. We also have a new tax revenue system that's going to update and automate our tax collection system. I've mentioned the Lexical Public Safety Center. We're going to do a new jail management system. And this is more than, this is what tracks the inmates. It's a computer database that tracks their biographical history, their arrest history, their medical history, their behavior, property records, so it tracks them. It's more than just where they are in the facility. It's everything about the inmate. Some people, there's a lot of peanut allergies, so people have to be separated for things like that. So this system does quite a bit with all of our inmates. We have a new police patrol transport wagon. We have the public safety radio system. You all remember we did police in the current fiscal year to get in compliance with the FCC regulations. This $2 million is to bring fire in line with the FCC regulations for this fiscal year. We have money for a new fire training tower. You all know we no longer have our tower, so this would be a new tower for us. The new senior center, which we had a presentation on last week, so I think everybody's pretty familiar with that one. The Shilato multi-purpose sports fields, these are park amenities to the fields, scoreboards, bleachers, more parking, things like that. Just various improvements to the Carver Center, which includes some off-street parking. Currently, there's no off-street parking at the Carver Center. We have dugout replacements. We're in the process of replacing dugouts that are the brick-and-mortar kind that are a public safety hazard with chain link. That way you can see in them and people can't go in there and hide. So we've got that on there. We've got basic aquatics maintenance. This is pools, pumps, liners. And then we have $2 million in there for a relocation of Station 2. We already own the land, so this is just the building cost of the new fire station. And we have land acquisition money in there for a new Station 24 that's out near the Masters and Station subdivision, and then we have a procurement website upgrade that will enhance our purchasing online footprint and make it easier for people that are doing business with the city. Now, I can take questions on this, or I can go into the cash-funded, whatever you all prefer. Are there any questions right now? Council Member Myers. Thank you, Vice Mayor. On the pothole patcher, is that a machine, or is that just material and labor to patch potholes? It is actually a machine. Let me get to it here. And it will allow us to repair potholes year-round, and it will extend the life of our roads because of the technology that is used with this type of machine rather than what we're currently doing with how they just scoop the stuff out. This is a lot more efficient, and it will last longer, and it will also take fewer people. This can be a one-man operation. Or one woman. Is this the same pothole patch that we were looking at last year? Yes, this is what was a fund balance request that we took out, and we may have jinxed ourselves for the winter by doing that. I'm not sure with all the snow we had and all the potholes we have now, but yes, it is the same. Okay, so we're getting a better price on this, right? Because wasn't it last one $340,000? I'd have to go back and check, but the number we have is $200,000 is what we have now. Okay. Thank you. Are there other questions, Councilmembers? Councilmember Akers. Thank you, Vice Mayor. Are the roof repair and replacement in HVAC, is that for the Downtown Arts Center? I can tell you where it's for. There's a list of buildings, and I think it's just a matter of which ones are in the worst shape, which is the ones they're going to do first. with the roof repair. They had listed Carnegie Center, Downtown Arts Center, General Services Building, and Police Headquarters. Okay. Are there other questions? Thank you. All right, I see none. Go ahead. Okay. We'll move on to the cash-funded capital, which is easier to read on the screen here. The very first thing is the coroner radio equipment. Once again, FCC regulations, the coroner's office has radios that communicate with police and fire. So this is for them. In the council office, you all are getting a new lease copy machine, I believe. And so that's considered capital. We've got some new cameras for GTV3. We're continuing with the practice that we've started this fiscal year with leasing desktop computers as opposed to buying. So the $180,000 is $90,000 for the first lease of computers and then a second lease that we're starting next fiscal year of $90,000 for additional. We'll be on, I believe, a four or five year cycle with computers. So each year you will see that number go up slightly, but we'll have everybody will be getting turnover of new computers and we'll be leasing instead of purchasing. The redundant network will provide us a second Internet connection coming in and out of the government center. Streets and roads has some just small radio equipment needs. The traffic engineering, that's the neighborhood traffic match program. We're updating emergency sirens that are in our parks. Fire air cylinders, this is for the firefighters. There's a limited life on these, so we have to replace them on our replacement cycle. The mobile data computers for FHIR, this is because their current mobile data computers are no longer going to be supported by Microsoft. We have $50,000 for a new education wing at the Visitor Center at the Arboretum. We also have $50,000 for a Woodhill Indoor Sports Complex. This is going to be a public-private partnership, so we will be able to leverage private dollars with this project. We have playground upgrades, and I believe this one is going to be at Jacobson Park to update the playground there. And then just various ADA improvements in parks, and then $100,000 for the continued renovation of the Kentucky Theater. Okay, so that's our general fund cash capital. We also have a list here of Urban Service Fund cash capital. We're not doing a bond this year in the Urban Service Fund. We have enough cash available to support the needs of this fund. The government communications, this is the urban service portion of the LexCol move to the new public safety operations center. The general service fund is 75% of the calls that LexCol receives, so that's why they have a larger portion in urban service than they did in the general fund. We have various radio equipment for streets and roads. You can see Waste Management has several projects. New truck bay, software, sonar equipment replacement, route wear equipment, loan a box, Herbie, Rosie, Lenny carts, compost pond improvements, concrete pad repair. We also have $300,000 budgeted for streetlight installations. And then we have various vehicle replacements within the Urban Service Fund. We have a street sweeper replacement and a leaf vacuum replacement. And the 2.9 is for waste vehicle replacement. Council Member Sennett asked earlier about the road resurfacing and if we were bonding any dollars for that. We are not bonding dollars for road resurfacing in FY15 or we're not proposing to in the mayor's proposed budget. we're using a little over 1.2 million dollars from the map fund for resurfacing 500,000 from mineral severance fund 200 from coal severance 300,000 and cash from the general fund and then we have a reallocation of cold stream that we are going to with your approval bring forward a budget amendment to reallocate the dollars that we got from the sale of cold stream to paving to make us to give us $3 million for total paving for FY15. So with that, does anyone have any questions? Will you log in, please, Council Members, if you have questions? We don't have anybody right this second, but now we have Council Member Myers. Thank you, Vice Mayor. Is it possible just to get a little bit of detail about each one of these things? Yeah. Do you want for all projects or just bond? Probably not. I was looking more at the cash-funded capital. Okay. And it doesn't have to be all of them. There's some little things on there, but you know, like the truck bays, some of the bigger stuff. Okay. We can certainly do that. Okay. Thank you. You're welcome. Council Member Stinnett. Thank you, Vice Mayor. Well, Melissa, we had a briefing back, I guess, in March, our total list of capital needs. I guess from what you show, what was it funded? What are next up on the list of things? Do you all keep that list? Yeah, I've got a total spreadsheet of what the total requests were, so if it would be helpful, I can provide that to you. Yeah, I was just curious about what was it, because we're hearing about it in our link meetings, and so it would be nice to see what else has opportunity to be funded once the council finishes our deliberation. And then the road money, the total amount, was that for instituting the program that has been talked about in the planning committee meeting for major roads, or is that neighborhood road money? Did you all differentiate the two? We did not differentiate. That is for you all to decide where you would like the street paving. Okay, and if we wanted to separate the major road funding out, can you all assign a number to it? How would you account for that money? We can work with streets and roads and get it. They have some estimates, so we can get that to you. And you can assign it in the budget, its own budget number, if council wants to separate the two issues out? Yeah, we can put it as its own line item if you'd like. Thank you. Thank you, Vice Mayor. You're welcome. Are there any other questions? Council Member Myers. Thank you, Vice Mayor. Could you give us some detail on the different, you talked about coal severance, mineral severance. Can you give us the balance of those accounts? You don't have to do it right now. Okay, yeah, let me send them to you. Okay, thank you. Thank you, Vice Mayor. You're welcome. I trust, Melissa, you'll send all that. to everyone everybody thank you we appreciate it are there any other questions council members nope i see none so thank you very much uh bill and rusty and melissa and the whole team i know you have people working behind the scenes too um so our second item on here is if you'll look at at the back page, upcoming Committee of the Whole meetings, and our next meeting, which Stacey has so kindly highlighted for those visual folks among us, is our discussion analysis of the mayor's proposed budget on the 29th at 2 o'clock here in this chamber. So is there any other business to be brought before us? Council Member Beard. On page 27, the last two items, Second reading of budget, 619, and then council budget debriefing. In September. Okay, that solves it. That debriefing is something that the council asked for last year after the budget. This year we have a debriefing, and we can also discuss those. I think this is the meeting, Stacey, when we have the non-budgetary items and those sorts of things. This is what you all talked about at the budget retreat that we had at the Arboretum, and it was to refer all of the non-budget items to committees so that everyone in the committee would know what the item was, and they didn't all end up with the vice mayor's name. Thank you. Thank you. Any other questions? That's all. I just was curious. Okay. Councilmember Ford. Thank you, Vice Mayor. I have a question in regards to late items. And we always, of course, with a document to this scale, there are going to be some typos and some misprint numbers. But I think it's also that maybe we've had pretty substantial changes aside from just regular clerical cleanups. Can somebody from the administration speak to what defines a late item that may perhaps come from the mayor? And I see that deadline is on June 5th, the same day that we will begin to review links and council member recommendations. It's my understanding on the 5th, they'll actually have the list in front of us of the late items to discuss. Yes. From the late item list from the administration, it's just errors or omissions that were in the mayor's proposed budget. So we try to check it every year, but there's always things that you're going to miss. So not new projects or new ideas that have happened between April 8th and now. Correct. These are errors or omissions. Very well. Thanks so much, Melissa. Thank you, Vice Mayor. I appreciate that you brought that up because now I'm remembering last year the discussion about that, and so new projects will not be on that list. And it will also, will it not include items that between when the mayor put his budget out and when we're in that June date that council has approved, which aren't really exactly omissions, but that we've approved to go forward? Yes, things that you all have approved that have a budgetary impact will be on there. For example, Sally mentioned to me the homeless coordinator. That position is going to be approved. Right now it's funded as a vacant position, so we would bring that forward as a late item to have it funded as a whole. I know there's a budget amendment in process for some MAP projects that are in the MAP funds. If you all approve the budget amendment for those MAP projects, we would then take those out of the budget. So that's a couple examples of things that happen between when the budget is proposed and when you all finalize the budget. So the homeless coordinator position is not in the budget? The position is in the budget, but it's funded at the vacant level. we funded vacant positions at a lower level than what we funded filled positions so we would come back and ask to have that position funded at the full filled position okay so that'll be a smaller amount than the full salary correct yes we will not have the full salary okay any other questions about this last page council members or anything all right do i hear a motion to adjourn Second. All right. All those in favor, say aye. Aye. We are adjourned, and we thank everyone who has been with us today. guitar solo Thank you. darling Thank you. And plead to you, baby Your pleading keeps you from Walking out that door Ain't too proud of you, baby No, don't leave me, girl Ain't too proud of you, baby No, don't leave me, girl Baby, baby, baby Don't leave me, girl I can't fight this feeling any longer And yet I'm still afraid to let it flow What started out is friendship Has grown stronger I only wish I had the strength to let it show I tell myself that I can't hold out forever I say there is no reason for my fear Cause I feel so secure when we're together You give my life direction You make everything so clear And even as I wander I'm keeping you in sight You're a candle in the wind I'm going to call a dark river's night And I'm getting closer than I thought I might And I can't fight this feeling anymore I've forgotten what I started fighting for It's time to bring this ship into the shore And throw away the oars forever Cause I can't fight this feeling anymore I've forgotten what I started fighting for And if I had to