. guitar solo guitar solo Thank you. Thank you. Thank you. Thank you. Vice Mayor's on our way. We've got a quorum. And we'll start with public comment. Mr. Money, anybody showing up for, anybody asking for public comment? No, no one. All right, sir, thank you. Next on our agenda is a docket approval. There's no council meeting this week. What? We do not have a council. We are doing docket, yeah, all right. Yeah, we're doing next week's. All right, fine. All right, it's a motion by Council Member Farmer. Who is second? Was there a second? Second by Council Member Lane. Is there any discussion on the motion? All right, hearing none, then we can take a vote. All in favor, please say aye. Aye. Opposed, no. Motion carries. And next on our agenda is a motion of summary. is a motion by council member beard second by council member scutchfield to approve the summary of the work session of may the 6th is there any discussion on the motion okay hearing none then we take a vote all in favor please say aye opposed no motion carries the next is uh budget amendments is there a motion motion by vice mayor gorton second by council member myers is there any discussion on the motion okay hearing none then uh vote is in order all in favor please say aye opposed no motion carries next is new business is there a motion motion by council member beard second by vice mayor gordon is there any discussion on the motion yes all right vice Mayor Gordon. Thank you, Mayor. It's my understanding that Item J may need a little bit of explanation and potential change, and I think that Jomsheed is here to help us understand what that change may be. Hi, Jomsheed. Hi, Hoya. It's just primarily a correction. Mathematically, when we put in the total number of cost for the A&E fees. For some reason, from the point we put on Legistar until it made it to the docket, the number changed very slightly, but we just want to make sure that we have the correct amount on the docket for review and approval. Is this correct as written in the new business? The correct amount should be $769,470 for the total. So, Mayor, would it be appropriate for me to make a motion to amend number item J to $769,470? So moved. Motion by Vice Mayor Gordon to amend. and second by council member ellinger is there any discussion on the motion all right hearing none we take a vote all in favor please say aye aye opposed no motion carries thank you mayor thank you thank you next uh my monitor is not working so council member scutchfield thank you mayor i had a question about letter C? This is a lease agreement. It's the C. All right, sir. I just had a question. What is the current rental, I guess, rental that they are paying for that space? The current rental is $33,116 per year. Okay, and is that market value? Yes, ma'am. It is? Okay. All right. Thank you. You're welcome. All right. Thank you. Council Member Farmer. Mayor, I do have two on two new business items, and then I missed the opportunity on one of the budget amendments, but let me do the new business items because that's where we are. Mine are about N and O, which I think are on page, starting on page 30. On item N, this is to close part of Simpson and Prospect Streets, and I'm just wondering, in doing this, in sanctioning this, is there any loss of connectivity in that area based on the roadway that is there now and what the development plan would bring to it after it was changed? Charlie. No, there will be no loss of connectivity. Essentially, those streets now basically dead in into a previous development done by the same requester. Okay. So it's immediately adjacent to an existing development by the requester, which then backs up to the railroad tracks there at Transcript and Virginia Avenue area there. So there's no loss in connectivity. The utilities that are existing there right now, they have to retain an easement for the future. And it looked like all those were in the packet. Pardon? Every outside entity who needed to retain an easement had a copy in here, I believe. Yes. Okay. All right. Thank you, sir. Yes. And then on O. All right. So this is the money for 21C, or the new style of financing that's available, the Section 108 Loan Guarantee Program. So this has now been sanctioned by HUD, and we're giving it a final reading here. Does this change them from neutral to drive, or what happens because of this? Not exactly. What we have is preliminary funding approval from HUD. It does have some conditions on it that we have to meet. Yes, ma'am. We have until June 30, 2015 to essentially close the loan. And we also have to provide them a repayment schedule that they find acceptable. They being HUD. HUD. Yes, ma'am. They'll have to find that acceptable. Also, it's conditioned that we have a second position, that our mortgage is in second position behind Central Bank. And also that the personal guarantees be in place. So those things still have to be satisfied beyond our new business item. Right. There is actually a lot of conditions that have to be met. And our law department is working on the financial documents now. They're working with HUD on those financial documents. So a period of months, do you think? We think months, certainly within a year, but we think months. And then once all that has transpired, would they then make a draw against it, or would they get the entire amount, or how would that work? No, we would give them prorated draws. It would be based upon work in progress. We would have the $6 million, we think, throughout the construction period and not make a final draw to them until the end. And then the other parts of this, which are excellently listed here, are they all in process or complete, or is this the last part? They are still working on some of the other parts. The central bank is on board, but they are still working on some of the other equities. I think they're still working on the new markets tax credits for sure. For $2.8 million. Right. The historic tax credits, both federal and state, they look okay. They look good. Our loan is starting to look good, so it should all be in place pretty soon. It would seem to me there's almost as many moving parts here as in another project around town, but that's just me. Thank you, ma'am. Thank you, Mayor. They're never easy, are they? Wouldn't be as much fun. All right. Thank you, Irene. Thank you, Councilmember Farmer. Councilmember Ellinger. Thank you, Mayor. Mine is also on O, Irene. And I guess I want to just kind of dive back a little and just try to explain how the Section 108, how that actually does apply here, because that's not usually what I would consider this as a 108 section. But can you kind of go through that process and how this applies, I guess because of the job creation, the economic development? Right. If you are a CDBG grantee, which we are, HUD gives us the ability to borrow against future allocations. We're putting our future allocations at risk, but we're actually borrowing privately, and HUD is guaranteeing the loan. And their guarantee is based upon those future allocations of CDBG funds. We're repaying, the developer will repay us, we repay HUD, and it's eligible because it creates jobs for low-income people. They are planning to create 125 jobs. Over half of those jobs will be held by low-income persons. And this is what makes it an eligible CDBG project. And what is the pay rate on that that has to qualify as low pay or low income? No, they have to be low income when they take the job. 21C does not have any obligation to make sure that they remain low income. In fact, we probably would prefer that they didn't. But they only have to be low income before the job. And what's that cutoff? What would that criteria be? Are you talking about a dollar amount? Yes, ma'am. Are you talking about the median income? The income. The final income? To define the income. HUD, for low-income purposes, HUD considers a family to be low-income if its income is 80% or below median income. And right now, a family of four, the median income in Lexington for a family of four is about $67,000. So 80% of that would be considered a low-income family. And the one statement says, Section 108 loans are not risk-free. However, local governments borrowing funds guaranteed by Section must pledge their current and future CDBG allocation to cover the loan amount. That's security for the loan. Could you explain that? I think you already did, but just to clarify that again. Right. The federal government guarantees the loan. Full faith and credit of the federal government backs the loan. But they don't plan to make payment on that loan. They plan for us to make payment. So we are guaranteeing payment of the loan through several means. One of those is, you know, the second mortgage on the property, and some other conditions that we're placing on the developer. But also, if all of that should fail, and if we should have no money to pay this loan back, HUD would go in and take our future CDBG allocations to make sure that that loan was paid. Okay, that's why I want to clarify. Thank you. Thank you, Mayor. Council Member Stennett. Thank you, Mayor. Irene, I appreciate the responses in the conversation we're having on Item O. And I think before we have second reading, I think it would be appropriate because there has been some time since we've seen the concept of what 21C is supposed to end up being eventually in our downtown is to hear from them. Is there an opportunity to hear from the developer about where they're at? You said there's a lot of moving parts. I don't know who's speaking with them directly, but I'd like to hear from them before second reading to see if they even still need this money. and to where the, if we can get them down here, or even a workshop, email, but I would like to hear from them. Is that possible? Okay, I just want an update on where we're at, what their new anticipated timeline is. If this money is approved, then what's the next step? You would like that before second? Yes, ma'am. Can you come to the microphone and say that so everybody can hear? I'm sorry. Yes, I think we can get them back. Yeah, I just want an update on how this piece still fits into the master plan of the property and where they're at in their process. It has been some time. Yes. So we have two weeks from next Thursday. So it's three weeks from this Thursday. I will email them this afternoon and ask them to make it. That'd be good. And you'd like it at work session? Either at work session or workshop. Either way is fine with me, personally. Work session. Work session. Okay. Okay, well, you know, we're missing a work session. this month. 27. 27 is our next one. Yes, ma'am. Thank you. Council Member Ford. Thank you, Mayor. My comments and questions are also on the 21C project. Irene, can you confirm whether or not our government has embarked upon a 21C project before? No, we have not. This would be the first? It's the first one. This will be the first one. I have a few questions for you, Irene. I think that this project, aside from the proposed funding through Section 108, has some merits. I think, first and foremost, potentially what it could do for historic preservation for a building that's been an anchor in our community is worthy. I think that it's going to create jobs, but it's going to do that with or without the Section 108 investment. And then also I think what it will bring for the arts, from what our understanding, will be good. I just have a, and I don't know if Irene can answer this, but if there's a mayor or somebody else from the administration that can speak to it, because I know Irene's focus has been on the grant or the loan. A series of questions. What classifies or qualifies this project to be a benefactor of public expenditure? What makes this a public project, I would ask. Secondly, I would ask is how, and maybe the developer would have to answer this, does a financing gap exist? Meaning, absent Section 108, would the developer still be able to carry forth this project? Why or why not? Are there financial means born of the developer, he or she, to take this project on without this public investment? The next question I have is, How does this risk, and it is a risk we'll be taking, how does it differ from the more recent downtown projects that we've taken, perhaps particularly in regards to condos and downtown housing? I think that's a concern. And then more, Irene, I guess, $6 million in the, now I'm venturing back to the 21C loan, I mean the Section 108 loan itself, in the eyes of HUD. $6 million, and we're committing to create 75 jobs. That's 60% of the 125 jobs? Yes, that's what's estimated. It should be 125 full-time equivalent jobs, and we're proposing that 60% of them be low-income persons. Okay. And so that's $6 million. And job creation, we need job creation. Don't get me wrong. But I'm trying to balance and equate this with this, what can be a potential tool to help distressed neighborhoods. Not Main Street. There's a lot of other streets throughout our community that I think Section 108 could benefit. $6 million divided by 75 jobs is $80,000 per job. And is that reasonable? And I know HUD has already opined. They look at their aspect of whether or not they would want to guarantee the loan. That's a policy question I think we have to answer. I've presented a lot of questions that I think that we ought to discuss. And part of me feels in order to, for me, to balance these questions and hopefully discover the right answers, is I don't know if a workshop in the interim of a second reading will do us justice. I think, Council, we may need to consider whether or not we pulled this item from the work session docket, agenda, to allow us the needed time to consider this before we put it back onto the docket. That's just my thought. I may come back for further questions. Thanks, Mayor. Council Member Lane. Excuse me, Mayor. Thank you. Yeah, and looking at the notes on this memorandum, from a real estate perspective, it's like a pretty good relationship because it would be the second mortgage on the property. So if there was a default on the property, we would be in second position as a certain county government to get our money back. and then they joined in several guarantee from Steve Wilson and Craig Greenberg, and they're both pretty substantial individuals financially. And I take it those are personal guarantees. I didn't say that on there. So that also makes me feel warm and fuzzy about the deal. And then the pledge of the unsubordinate fees, that would also be payable to the developer in an event of a default. So I do agree that $80,000 a job is a big investment, but considering the quality of the second mortgage and the people borrowing the money, I feel like this is a reasonably good relationship. Thank you. Councilman Beard. Thank you, Mayor. Back to the joint and several guarantees. Do we have financial statements or anything to back up whether they have the wherewithal to? Yes, we do. You do have? Yes, but they're confidential. Pardon me? They're confidential. Oh, I understand that. But just as long as we have them. Yes, we have them. Okay, very good. Thank you. Customer Myers. Thank you, Mayor. Thank you, Ms. Gooding, for coming today. When you go back to the jobs that are going to be created, do we have a way of finding out what the salary or the hourly wage will be broken down by job classification or title that they plan on creating? We have the jobs broken down by classifications, and if you would like to have those, I can send them to you. Could you do that, please? Sure. And could you, do you have that broken down in a way that would say there's going to be X number of jobs in this category, X number in this category? Yes, I think it gives you that kind of detail. It does not have an hourly amount connected with it. And there is no requirement that they do anything other than meet minimum wage. Right. That's a requirement. And that's kind of where I'm getting at because there's one side of it that is we're doing this Section 108 loan, but there's the other side of it that and so it may meet the requirements for that loan but as council member Ford said if we're spending this much dollar per job we want to make sure that most of those jobs are not simply minimum wage but that they're high paying jobs so if you could provide that that detail to the extent you can and then also is that pre-construction or post construction so part of those jobs will be created in terms of the rehab and that kind of thing but then the ongoing jobs that are really what we're looking at, what are those jobs? Are there going to be mainly housekeeping where it's all minimum wage or a restaurant where it's, you know, I don't know if it's minimum wage plus tips or however they're going to do that. But if you could provide that detail to the extent that you can, that would be great. Okay. I do want to add that during construction, the federal prevailing wage rate applies. So those will be very good jobs. Okay. So I'm more interested in, or mainly interested in the jobs that are going to be there after construction is over with. Thank you. Thank you, Mayor. Back to Council Member Lane, or no. Yeah, I had just a quick follow-up question, Ms. Gooding. Could you refresh my memory, and when did we initiate this transaction? How long has it been in process? We started in the fall of 2012. And that's on this particular, but how long has that property been under development? Is this an add-on to that, or was this the beginning of the development process? I believe they started several, I don't know exactly, and I don't have right now the date that they started looking at the property and thinking about whether or not they could do this project, but it's at least six months prior to that. Okay. and have they already closed on the property do they own the land most of the property i think there is one condominium that they don't own okay all right thank you very much that's all i have council member k thank you mayor irene just one question really a clarification i'm concerned that there may be a little bit of a confusion about whether this is an investment from the city or a loan and the equating of $80,000 per job given the overall loan. My understanding is that this is not government spending this money. This is our basically guaranteeing a loan which would be paid back. So we're not really spending $8 million to get however many jobs. We're just guaranteeing a loan. Is that? That's correct. They will be paying the loan back with interest. They will also be meeting quite a number of what we think of as federal baggage along the way. So I guess our thought is that nobody would want a 108 loan unless they needed one. Yes, okay. Thank you. Thank you, Mayor. Thank you. Council Member Ford. Thank you, Mayor. I don't hope to obstruct the process of this item being on the docket today. I've prefaced my questions, but if the Council will indulge me, I'll go ahead and ask answers to the questions that I posed before. Council Member Kay brought up a good point, Irene. I'll ask you to come back. total project is $41 million, and if we approve this $6 million in Section 108 loan, plus the $1 million in UDAG, total investment or involvement, however you want to phrase it, of the government is 17% of total project. My question is, and you just mentioned it, a lot of folks aren't lining up to embark upon Section 108 loans. And I think even though it is a loan from the government, the fact that it puts at risk, potentially, our entitlement allocation from HUD for our community development block grant makes it an investment. And we've made other investments with downtown housing that have not panned out well. Does the property owner, the developer, have the wherewithals to finance this project without us exposing our CDBG, hence bringing forth a loan guarantee? Can that be determined? Do we know the answer to that? I don't know the answer to that. But, again, I would repeat that the 108 carries so many requirements that, you know, if you could get the money someplace else, you probably would. I mean, the interest rate is favorable, yes. And it's, you know, it's fixed over a 20-year period. It's a good loan. But it also carries the relocation responsibility, the federal prevailing wage rate. We had to do an environmental assessment. They had to give us information for that. And then, you know, they have us as company for 20 years as we're monitoring their project throughout that 20-year period. They owe us report after report after report on job creation. So I personally wouldn't think that if you could get the fund someplace else that you would. Right. What classifies this project as a, why are we in this project? What classifies this project as a public project? Because that's what it, once we put this level of funding in, it becomes a public project. Aside from job creation, and I'm going to kind of dismiss job creation just for the purpose of this argument, those jobs are going to be created anyway. The private market is going to create those, in some cases, low-wage jobs anyway. So what qualifies this project as a public project? Can somebody speak to that? Well, I will. You have some help. Thank you, Mayor. Can you speak to it, Jamie? I think you and I can both speak to it a bit, but it's a public-private partnership. It's not just a public development. I think that's key, number one. Secondly, I would say we're not granting the private company any money. These are loans we're talking about. Jamie, but what I understand of that, I'm not argumentative. We're just here to discuss it. That's what work session is for. what incents us to be the public in the public partnership? What is the policy basis for us to take it off? I think you mentioned two things, or you mentioned one thing, and I would add another. Number one, historic preservation. That building is iconic for this community, and if somebody with some money doesn't come in and clean it up and develop it well, it won't be part of our community for a long time. Okay. I wish you would punctuate that because that is a very, very, very big deal. It's huge. $40 million being invested in a building that would otherwise fall down on the city skyline. And that's exactly what's happening to it. It's in the same trajectory as the old courthouse is. All right, keep going. The second point is the jobs. I think it's important to keep that in mind. I heard you say that those jobs would be created anyway. Well, I'm not sure that that's the case. Well, I can answer that one, too. Real simple. N-O. No. Would not be created anyway. This is a company with a national and is becoming an international brand. Nashville has just in the last week told them, and get the numbers for the other cities. The incentives that other cities have given them. Higher, much higher than what Lexington has. Now, all I'm saying is, let me finish. You asked me, Chris. Yes, sir. Okay. You don't wave a magic wand and create jobs. Real businesses create jobs. And this is not a campaign. This is about reality. This is a real business that has created a unique brand and is creating not just low-wage jobs but careers for people. I would suggest go to Louisville. Go to Louisville. Go see them. Talk to some of the employees. It's a real opportunity. You know, I'd invite anybody on the council to do that. Or go to Cincinnati. Or go to Bentonville, Arkansas. And see what it's done for their community. So I think that it's hazardous to suggest that things are going to materialize out of thin air. Mayor, Jamie, thank you. I like the opportunity to respond. Sure. Hazardous to suggest, but it's healthy to debate. It's healthy to get these questions. Mayor, I do please include in the information what the other cities have invested. It would be helpful. Tell us what Louisville has done, what Cincinnati, what Durham. Okay, a lot of this has come. Excuse me, Mayor. Let me just finish. That information would be helpful. I will also say what Jamie has said, what you guys have said is important. You've acknowledged that this has the potential to be a great historic preservation project. Heretofore, my understanding of what's been presented to this council, the basis of our investment is solely job creation. That's what we're telling HUD is that it's going to create jobs, which is true. But I'm talking on the whole, what I'm hearing today for the first time acknowledging is that what incents us is the historic preservation aspect as well. Understood on that standpoint. But again, Mayor, I will say, and with all that said, does the developer have the wherewithal to finance this project without Section 108 investment? Thank you for the time. I'll look forward to whenever that information is brought back. Thank you, Mayor. Thank you, Jamie. I can't speak directly for the developer's financial situation, but I can tell you that the message that they've given us is that without these two pieces of financing, this project will not happen. That would be the HUD-108 loan and the... That's absolutely true. What used to be the UDAG loan. That's absolutely true. but for this HUD loan. It will not happen. That's right. The cost of this project, and I do know this, and I think Jeff is going to confirm it, I do know this, the cost of this project to renovate this project are perhaps higher than any of the other projects that they've done. And yet they're still committed to the project. But I sure hope that we don't run them off. Now, I understand debate, and I respect debate, and you've never heard me on this council as long as I've been mayor. Depreciate or suggest that debate is not appropriate. But there is also a time when we should recognize that we don't look a gift horse in the mouth. that we recognize that someone is bringing to us something significant in value. Now, let's keep... I'm sure that we'll go back to them, and I'm sure that they will say, of course we'll come and we'll visit again, and I hope that they will. But I am not going to apologize for being an advocate for creating jobs and for preserving a building that would otherwise be falling down around us. And this is not the first time, Council Member Ford, that the value of historic preservation has been introduced into the evaluation matrix for this project or into the advocacy for this project. And Jeff, can you speak to that? As Jeff comes, Mayor, I appreciate you being unapologetic, but like sign, I'll be just as unapologetic for the defense of scarce community development block grant funds that this project brings into play. I would speak to your earlier question about the but for. I was part and parcel to a lot of the underwriting of this during the HUD put this project through and we spoke about this before is that the level of underwriting that they went through it actually, so I think Irene mentioned earlier this process started in April of 2012 and it has taken that long for HUD to go through this process. And so they've been through the ringer a number of times. HUD went to bat for the city's interest, to protect the city's interest multiple times. That's why there's many layers of protection before the CDBG is put at risk, including those personal guarantees, which came later, frankly. And part of their underwriting, because HUD sees that, HUD is looking at our position. They are looking at those scarce resources. They're looking at their situation in Washington and knowing that CDBG has a murky future. HUD is looking at all of that and looking at it with the city in mind and came to the conclusion that this project would not go were it not for their participation on this loan. So I just want to put that forth and two other points just to clarify, yes, the cost of this project is higher than in their other projects. And we're happy to share it. I have to dig it up and share it. But Lexington's participation is actually smaller than any of their other projects. And so that's another important point to keep in mind. So my two cents, this is a great example of public-private. As the mayor said, it's a $40 million investment. The city is only putting in a portion, a very small portion, and lending its name to another portion. So you're looking at an opportunity to really see a major investment that raises the level of investment expectation, creates jobs in the process. We've got guarantees on that. So it's not a, yes, we're going to do it, and then maybe we don't. There are guarantees. There's clawback provisions. There's a lot of protection built into this project. So I'll leave it at that. I think it might be important, too, to highlight that Lexington is the smallest market they will have built in. So they're going to make investments of more than they have in other communities. Except Bentonville. Except perhaps. I don't know whether Bentonville, I mean, Julian says, or Council Member Beard says Bentonville. My point being is that they want to be in Lexington for a reason. and clearly I believe that reason is that they believe in the long-term success of the community. Councilman Ford, any more? No, thank you, Mayor. All right, Councilman Myers. Thank you, Mayor, and thank you, Jamie and Mayor, for your comments. I would say that I appreciate all the questions and the discussion we're having, but also I would say that part of the reason why HUD has taken this long is because they are vetting this thing very seriously, and that's a good thing for everybody involved. Can I ask a couple other questions about, though, when we look at the investment that we're making? Because it's not just this Section 108 loan. Is that not correct? Are we doing tax abatement for this project also? There's no tax abatement. They are getting federal and state historic tax credits, and they'll get equity from those credits. But that will be a private investment. So we didn't do any help on property tax? They are funding a TIF. They're funding their own TIF. Okay, I got you. And then the other piece is, what are the terms of this loan? Is it a balloon payment at the end of 10 years? No, it's a 20-year. Actually, the regulations provide that you can take up to 20 years of fixed-rate loan. But they're making a monthly payment? They'll make monthly payments. Or annual payments. It could be annual. We still have not submitted that loan repayment schedule to HUD yet. We have to submit one to them that they'll find acceptable. Okay. Has it been placed on the table to do a balloon payment at the end of the 10 or 20 years? No. Or is it anticipated to be at least an annual payment? No. We have not gone there, no. Okay. And you know the interest rate? It's not exactly in place. It is benchmarked to a federal treasury rate of a similar project for a similar period. Okay. Thank you very much. Thank you, Mayor. Thank you, Council Member Henson. Thank you, Mayor. I appreciate the fact that this will restore a historical building. And that part, you know, is deep in my heart as far as any time we have an opportunity to restore something of great value. But when I look at this and it says that this agreement that we've made, the developer is projecting the creation of 125 full-time equivalent jobs, 60% of those will be filled by low or moderate income persons. And I remember when we first, back I guess in 2012, when this proposal first came forward, asking what their average wage would be, and I really couldn't get an answer. So, you know, I just share a concern that if this is going forward based on certain requirements that, you know, that they are feeling a need for low or moderate income persons, I would hope that we could have some sort of guarantee that once they become employed, they will no longer be considered low or moderate income. So I would like for us to move toward that. I don't know that we, from what Irene said, I don't think we can, but I just see it as being a little misleading. So thank you. Council members stand it. Thank you, Mayor. Irene, I want to follow up on something Council Member Myers asked. Just to be clear, I don't think I understood you correctly. There is no payroll or property tax abatement from the local level for this project. I'm not aware of any. I should rephrase that. I am not aware of any. Except for the TIF. Yeah, I understand the TIF, but there's no payroll tax abatement or property tax. I'm doing this from memory. There is, they engaged the state for what's called the Tourism Development Act, or the TDA incentive. It is basically a sales tax rebate from the state. There is what's the ad valorem TIF from the state, which means they get the state property tax. Don't touch the local, just state. And then there is a local project-specific local-only TIF, which basically was payroll. I think it was basically payroll. So that's our contribution there, and it's fairly small. And I don't have projections with it. But we can get those by the time they come. We'll know exactly how much we're abating for how long. Absolutely. You're right. Okay, so there are other local taxes that we are abating for this project. Yeah. And then, Irene, how much left do we have under a $108 loan? If we do the $6 million, do we have additional monies we could use, say, for the old courthouse or other blighted areas in town that may serve a good purpose for this money? You can borrow five times the amount of your current allocation. Current allocation is about $2 million, so you can borrow up to $10 million. So $6 million for this would give you approximately $4 million that you could still borrow. Okay. Thank you. Thank you, Mayor. All right. May I add something? Yeah. In terms of next steps, I think it might be helpful if we can communicate with 21C to get some answers, perhaps get them down here before you have your second reading on this issue. I know that things are coming together quickly for them. They've been working with Commissioner Paulson's office and getting some permits. So I know they're anxious to get going. So I don't want to delay their process, but I want to get you all the information you need to. So we'll get on that really quickly, and hopefully we can keep this thing moving. So they're talking about – you said they've talked with Commissioner Paulson's office. Yes. I heard that they would hope to get started in the next month. With demolition then? That would have to be with demolition. Right. Okay. All right. Okay. Thank you. All right. Okay, we're still on new business. Any additional council members wish to speak to the motion? All right, then we can take a vote. All in favor, please say aye. Aye. Opposed, no. Motion carries. Next on the agenda is continuing business and presentations. Is there a motion on the NDFs? So moved. Second. All right. Motion by Council Member Ellinger and seconded by Council Member Akers. Is there any discussion on the motion? Okay. Hearing none, we take a vote. All in favor, please say yes. Aye. Aye. Opposed, no. Motion carries. Next is a budget committee of the whole summary by Vice Mayor Gordon. Thank you, Mayor. Council members, this summary starts on page 47 of the packet, and it's quite lengthy, seven and a half pages, so I'm not going to read it all. I'll give a summary. For those folks at home, if they want to go see all the details of this budget meeting, they can go to our LexingtonKY.gov website, click on city government, click on urban county council, and click on the May 13th work session. So the Budget Committee of the Whole met April 22nd, and first item on the business was the mayor's proposed budget, revenue, debt, and capital, which Commissioner O'Meara presented. And Dr. Chris Bollinger, director of the UK Center for Business and Economic Research, provided the assistance with the LFUCG tax forecasting model. And in general, employment has been on the rise since 2009. The occupational tax model predicted for fiscal year 15 a 4.3% growth and a budget of $175 million in employee withholdings. Business net profits predicted 5.9% growth and a budget of $35.3 million. Under the revenue discussion, Rusty Cook presented that the fiscal year 15 revenue budget is $313.2 million, which is a 3.8% increase over fiscal year 14 forecast. So also mentioned were the insurance premium tax at $27 million, which is a 1.9% increase over fiscal year 14 projection and budget, and the franchise fee at $21.5 million, which is a 2.4% increase over the fiscal year 14 projection, 6.3% increase over the fiscal year 14 budget. The urban services funds were all discussed, including sanitary sewer, water quality, and landfill. And then the council proceeded into a detailed discussion of all of those items and moved on to fiscal year 15 current and proposed bonding. The mayor's proposed budget includes, for fiscal year 15 purposes, $25 million in bonds. Fiscal year 16 would project $20 million in bonding, and fiscal year 17 would project $15 million in bonding going forward. Our goal here in government is 10% of our general fund revenues are targeted for debt service. Commissioner O'Meara provided information on the $40 million bond project, or project bond, proposed for the Rupp Arena project, and payments would begin in fiscal year 16. Commissioner O'Meara also commented on the pension bonds, which, unlike the others, are taxable because they are not project related. When those bonds are added, we go above our 10% goal and will be above that goal until 2023, the year 2023. And then ensued a major discussion, a lengthy discussion, and part of that discussion was about the $40 million in bonding for Rupp Arena. Frank Butler, I guess he's the project manager, he's managing this whole thing, stated that plans call for an annual $10.7 million contribution from UK, an $80 million contribution from the Commonwealth of Kentucky, a $40 million contribution from the city, in addition to which are revenues generated by activities of the Lexington Center Corporation. When these are all added together, it's 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. We went on to discuss the many different things, one of which was that there currently was, at the time, an RFP out for a new government center. And then there were many more minutes of discussion about the Rupp project, all of which you can see online. and one of the questions which was asked was if the urban county government would have any obligation outside of the $40 million in the event of a shortfall on the Rupp project, and Mr. Butler said that basically the city would have the obligation for the Lexington Center Corporation indebtedness, and if the Lexington Center had a difficulty paying that. There was discussion about what parts of the Lexington Center Corporation actually bring in net profits and which ones are more based on economic impact within the community with our restaurants, et cetera. Mr. O'Mara discussed the fiscal year 15 bonding for the sewer fund, and other issues such as the EPA consent decree obligations were discussed. The final issue discussed was the cash-funded capital, and Melissa Luker, the budget director, walked us through the list of cash-funded capital items for fiscal year 15 in the general fund as well as the urban services fund. The fiscal year 15 budget does not include any bonding for resurfacing. And that is a very brief summary, Mayor, of our discussion. And then we also look to our next schedule of budget committee of the whole meetings. Thank you. Thank you, Vice Mayor. and that's all in new business in continuing business and presentations that moves us to council report if you've got a council report please sign on councilmember farmer thank you mayor i was just going to double back to the budget amendments because i had a question i did not get to ask during that portion of the meeting and this is about um journal entry that's on page 9, 77559-60, grants a special project, US Department of Homeland Security. $990,000 to eliminate funding for suburban mobile home park shelter project, which could not be executed. I'm interested in what that could have been. Please do tell. This program started, I think, back in about 2006 or 2007. It was a grant from Homeland Security to build a shelter in a mobile home park. Suburban mobile home park was the recipient of the grant monies, which would have had the shelter built. But they ran into a series of legal hurdles that were never able to be cleared. The park was owned by 17 heirs of the family. Okay. They could never agree on placement of the shelter within the mobile home park. We received an extension for a year by Homeland Security and FEMA to redo some things. They were looking at trying to move the shelter to an adjacent parkland area that Fayette County owned. But it changed the scope and the size of the shelter so much that it just was not feasible. So we ended up losing the grant. So it's already, it is in essence gone because the time ran out again? Yes. And in fact, it was, this was actually done, I think this was June of 2011. I'm not sure why this is catching up with the paperwork part of it now here. But, yes, we lost the grant. Well, do we have anything else like that out there that's languishing or still opportune? I do not know. I don't think so because I heard about this when we first came into office. This had been simmering and was still in attempts to resurrect. But Irene would know better. I don't want to get up on my high horse. From time to time, we have clean up. These just take time to clean up. And from time to time, you see them on here where they look kind of old. And what we call clean them up. And when the project no longer exists, we have to go back and we have to eliminate the revenue and the expenses. That all makes sense. And I appreciate it. And it just takes time to do it. Well, in the spirit of therapy, I mean, this is one of those areas that I think we are woefully lacking in on behalf of our constituents across the county. And I'm sorry we lost this opportunity. If it could be presented again, I think we should work as a community to make it happen, because I think there are vast parts of our citizenry who cannot adequately shelter themselves in place if there were a tornado or a straight line wind incident. Thus, my somewhat burning demeanor over this issue. Thank you. Thank you, Councilmember Farmer. Vice Mayor Gordon. Thank you, Mayor. I just wanted to mention a celebration. I know that some of us could not be at the Family Care Center where you were today to celebrate the 25th anniversary of our Family Care Center, but a few of us were at the YMCA at the exact same moment. I know Councilmember Kay and Councilmember Ford, in whose district the north side Y sits, and Councilmember Stennett and Councilmember Scutchfield were also at the YMCA for the fantastic, wonderful news that Lexmark, and you saw this in the paper today, if you've read the paper, Lexmark donated $1.5 million, which is a fantastic donation from a private partner to help expand the Northside YMCA. And they also announced their beginning of the Hamburg YMCA. And these two things will really have a huge impact on our community, and they will bring new jobs. And so it was a very exciting, thrilling moment to see the way that this private partner keeps giving back to our community. So it was a fine celebration. Thank you. Thank you, Vice Mayor. Council Member Beard. Thank you, Mayor. And I don't know who might be able to answer this, but within the budget, what has been allocated for repaving? Melissa. We have a little over $3 million in the budget for repaving. Somewhat similar to what we've done other than last year. Correct. well especially with the situation with the weather we had this past winter we'll never catch up we'll never come close to catching up we'll never even one-half way catch up unless we have some kind of support through the action like we did last year of bonding. But I get this from my constituents. I'm sure others do the same. But we really, really have to do something about that. That's all there is to it. It's something that is right out in front of everybody as soon as they go to work or go to the grocery or go wherever they go. and we've got to find some way to fix it more expeditiously. Thank you, Mayor. Okay, Council Member Akers. Thank you, Mayor. I have several neighborhood announcements. The first is tonight there will be a neighborhood meeting at Metathorpe Community Center on Larch Lane that begins at 7. They do open the doors at 6.30 for mingling, coffee, and the like. Also tonight, there is a candidate forum called Operation Voter Turnout that will be held at First African Baptist Church, and that it will start at 6.30 p.m. at 465 Price Road. The forum tonight includes candidates for the 2nd District, candidates for mayor, and candidates for the 77th House District. So please come if you can and if you're interested. St. Martin's Neighborhood Association will be meeting tomorrow night at the Charles H. Quilling Center in St. Martin's Neighborhood. And that begins at 6.30, from 6.30 to 7.30. And then Thursday morning and Saturday morning, there are a team of volunteers and different groups have partnered together to build a community garden on Roosevelt Avenue off Georgetown Street. It's Seedleaf Habitat, Leadership Lexington, and others from the Community Neighborhood Association and myself. We will be there Thursday morning from 9 to 11 working in the garden, as well as Saturday morning from 10 to noon. So if you'd like to come help, we would certainly welcome more volunteers. And lastly, on Saturday, for the second annual Speak Peace to Violence rally will be held at First African Baptist Church. Again, that's on 465 Price Road, and that will be from 10 to 3. I know that the mayor will be there again this year speaking. I will be there. There will be activities for kids, for families. There will be food provided. There will be a march at the end of the day to Douglas Park. and then there will be activities provided in the park for free as well for families and children. So lots going on, and I hope everybody can attend something. Thanks. All right. Thank you, Council Member Akers. Looks like that's all council members who've signed up for a council report. Next on the agenda is the mayor's report. Move approval. It's a motion by Vice Mayor Gorton. Is there a second? Yes. Seconded by Council Member Henson. Is there any discussion on the motion? Okay, hearing none, then we can take a vote. All in favor, please say aye. Aye. Opposed, no. Motion carries. And Mr. Mondays, anybody signed up for public comment? All right. No one signed up for public comment. I believe there's a closed session motion by Vice Mayor Gordon. Thank you, Mayor. I move to go into closed session pursuant to KRS 61.810.1F for discussions that may lead to the appointment of an individual employee. Second. All right. Motion by Vice Mayor Gorton. Second by Council Member Scotchfield. Unless there's objection, motion passes. And the council will now go into closed session. All right. Thank you. Thank you. Thank you. Thank you. guitar solo guitar solo guitar solo Thank you. Thank you. guitar solo guitar solo guitar solo guitar solo guitar solo guitar solo guitar solo Thank you. guitar solo guitar solo guitar solo guitar solo Thank you. Oh, oh, oh. Thank you. Thank you. Thank you. Thank you. guitar solo guitar solo Thank you. guitar solo Thank you. Thank you. Thank you. Thank you. Thank you. guitar solo Thank you. I love the chair. I like it out of the chair. Okay. Do I hear a motion to come back into open session? All right. All those in favor, say aye. Aye. Aye. Very good. Did we already have public comment? We did, didn't we? Okay. Do I hear a motion to adjourn? All those in favor say aye. Anybody opposed? Thank you. We are adjourned.