# Budget, Finance & Economic Development Committee - January 26, 2016 > Auto-transcribed civic record · January 26, 2016 - **Permalink**: https://meetings.lexingtonky.news/meeting/3863 - **Source video**: https://lfucg.granicus.com/player/clip/3863?view_id=14&redirect=true - **Date**: 2016-01-26 - **Last revised**: January 26, 2016 - **Length**: 18,043 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Budget, Finance & Economic Development Committee met on January 26, 2016, at 1:00 PM with Stinnett presiding as the meeting officer. The committee addressed five agenda items during the session, focusing primarily on financial reporting and budget-related matters. The committee took three votes during the meeting, with one item requiring formal approval and four items presented for informational purposes. No public comments were heard during this session. The meeting accomplished routine committee business including approval of previous meeting minutes and receipt of several financial updates and presentations covering topics such as monthly financial reports, the annual financial report, urban services funding data, and economic contingency fund status. ## Attendance The following members were present at the meeting on January 26, 2016: • Stinnett • Moloney • Kay • Lamb • Farmer • Scutchfield • F. Brown • Mossotti • Bledsoe • Hensley • Evans All members were in attendance with no absences or late arrivals recorded. ## Votes and Decisions The committee took three votes during the January 26, 2016 meeting, all conducted by voice vote and all passing unanimously. **Approval of Previous Meeting Summary** Farmer made a motion to approve the October 27, 2015 Committee Summary, which was seconded by Kay. The motion passed by voice vote with no opposition. **Economic Contingency Fund Ordinance** Farmer moved to have the Administration return to Committee with a codified ordinance for the Economic Contingency Fund. Kay seconded the motion, which passed by voice vote. This action directs staff to prepare formal legislation establishing the fund's legal framework. **Adjournment** The meeting concluded with Farmer's motion to adjourn, seconded by Scutchfield. The motion passed by voice vote. All three motions were approved without recorded opposition, indicating unanimous committee support for the items considered. No roll call votes were taken, and no specific vote counts or individual member positions were recorded for any of the decisions. ## Contested Items The meeting featured one significant area of contention regarding proposed changes to the Economic Contingency Fund ordinance. **Economic Contingency Fund Ordinance Changes** A heated discussion emerged over modifications to the Economic Contingency Fund ordinance, specifically focusing on the conditions under which funds could be withdrawn from the reserve account. The primary point of disagreement centered on defining the mayor's role and authority during emergency situations that might require rapid access to contingency funds. Committee members engaged in extensive debate over the proposed withdrawal conditions, with particular attention paid to establishing clear parameters for when emergency fund access would be appropriate. The discussion involved questions about the balance between providing the mayor with sufficient emergency authority while maintaining proper oversight and accountability measures. The nature of the disagreement involved fundamental questions about municipal emergency response procedures and the appropriate level of executive authority during crisis situations. Committee members appeared to have differing views on how much discretionary power should be granted to the mayor when determining emergency fund withdrawals. The extracted data does not specify which committee members took particular positions in the debate, nor does it indicate the final outcome or resolution of the contested ordinance changes. The discussion was characterized as heated, suggesting significant disagreement among participants about the proposed modifications to the fund withdrawal procedures. *Note: Specific transcript timestamps are not available for this contested item discussion.* ## Approval of December 1, 2015 Committee Summary The committee reviewed and discussed the summary of their December 1, 2015 meeting as the first item on their agenda. The discussion involved key participation from committee members Farmer and Kay. The committee examined the previously prepared summary document, which captured the proceedings and decisions from their December 1, 2015 session. Following their review and discussion of the summary's contents, the committee moved forward with the approval process. The agenda item concluded with the committee's approval of the December 1, 2015 meeting summary, formally accepting the document as an accurate record of that session's proceedings. *Note: Specific transcript timestamps are not available for this agenda item.* ## December Financials General Fund Bill O'Mara, Commissioner of Finance, presented the December financials for the General Fund during this informational agenda item. The presentation focused on reviewing revenue streams and discussing variances in the financial data. The discussion involved three key speakers: • **O'Mara** - Commissioner of Finance who delivered the main presentation • **Farmer** - Participated in the financial discussion • **Moloney** - Also contributed to the conversation regarding the financials O'Mara's presentation covered the General Fund's financial position as of December, examining various revenue sources and identifying areas where actual performance differed from projections. The discussion included analysis of budget variances and their implications for the municipality's fiscal health. This was an informational presentation, meaning no formal action was required from the governing body. The item served to keep officials informed about the current financial status and provide transparency regarding the General Fund's performance during the December reporting period. The financial review is part of the regular oversight process, allowing officials to monitor budget execution and identify any trends or issues that may require attention in future budget planning or operational decisions. *Note: Specific transcript timestamps are not available for this agenda item.* ## FY 2015 CAFR Presentation Bill O'Mara and auditors from Strothman and Company presented the Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2015 during this agenda item. The presentation was led by O'Mara along with Bill Mire from the auditing firm. The CAFR represents the government's official annual financial report, providing a comprehensive overview of the financial position and activities for the completed fiscal year. This presentation served as an informational briefing to update officials on the financial status and audit findings for FY 2015. The agenda item was classified as a presentation format, indicating that the primary purpose was to inform attendees about the audit results and financial condition rather than to seek approval or make decisions. As an informational item, no formal action was required from the governing body. The involvement of external auditors from Strothman and Company suggests this was an independent financial audit conducted according to standard governmental accounting and auditing practices. Such presentations typically cover key financial metrics, audit findings, management recommendations, and overall fiscal health assessments. ## Urban Services Fund – Additional Data The committee held an informational discussion on agenda item 4 regarding funding options for street lights and street cleaning within the Urban Services Fund. The discussion involved three key speakers: O'Mara, Mossotti, and Bledsoe. The committee examined additional data related to the Urban Services Fund, specifically focusing on two critical municipal services - street lighting and street cleaning operations. These services represent significant ongoing expenses within the city's urban services budget. The discussion centered on exploring various funding mechanisms and options available to support these essential infrastructure and maintenance services. Committee members reviewed financial data and considered different approaches to ensure adequate funding for both street lighting systems and regular street cleaning programs throughout the city. The agenda item was classified as informational in nature, meaning the committee was gathering information and reviewing data rather than making immediate decisions or taking formal action. This type of discussion typically serves to inform future budget decisions and policy considerations related to urban services funding. The outcome of the discussion was informational, with no specific actions or resolutions adopted during this portion of the meeting. The committee's review of the Urban Services Fund data will likely inform future deliberations on budget allocations and funding strategies for these municipal services. *Note: Specific transcript timestamps are not available for this agenda item.* ## Economic Contingency Fund – Update The committee received an informational update on proposed changes to the Economic Contingency Fund ordinance during agenda item 5. The discussion focused on modifications to funding goals and withdrawal procedures for the fund. Key speakers during this discussion included O'Mara, Farmer, and Brown, who presented various aspects of the proposed ordinance changes. The committee examined potential adjustments to how the fund would be managed and accessed in the future. The discussion covered both the funding targets for the Economic Contingency Fund and the procedural requirements for withdrawing money from the fund. Committee members reviewed the proposed changes to ensure they would provide appropriate fiscal safeguards while maintaining necessary flexibility for economic contingencies. This was an informational item, with no formal action taken by the committee. The update provided members with details on the proposed ordinance modifications to help inform future decision-making regarding the Economic Contingency Fund's structure and operations. *Note: Specific transcript timestamps are not available for this agenda item.* --- ## Decisions - **Motion** — passed (0-0): Motion to approve the October 27, 2015 Committee Summary - **Motion** — passed (0-0): Motion to have the Administration come back to Committee with a codified ordinance for the Economic Contingency Fund - **Motion** — passed (0-0): Motion to adjourn --- ## Full transcript For the year, first up on our agenda is our approval of the December 1st committee summary, which portion of it has already been read out before we went on the Christmas recess. Do I have a motion to approve the remainder? So moved. Second. A motion and second to approve the committee summary. Any changes? Discussion, addition? Okay, seeing none, all in favor say aye. Aye. Any opposed? Okay, that passes. Next up, as always, is our December financials for the general fund. Mr. O'Mara, welcome. Thank you, Chair. If I could, I would like to show this one slide before we get into the regular slides. It is a great illustration of the recession that we just went through, through historical unemployment rates. So if I could, we start out with 2007, and this is the 12 months. And as you can see, we're humming along really great in the 4% and even down in the 3% range. 2008 comes along, and we're humming along, and then all of a sudden some unemployment pressures start to show. And then in October, it starts to blip. Here's 2009. So now we're in a whole new world. We're up close to 8% unemployment. Our unemployment has virtually doubled from two years before. 2012 comes, and there's some variance, but we're basically tracking the same as 2010. 2011, and there is some trending, but we're still up in those high unemployment rates. Next year, we've dropped some more. 13, we're still hovering around the same. So this is a characteristic of this recession. Usually you bounce back. As you see, we flatten. We make some ground, and it takes two years before we make some more ground, and then two years, and we make some more ground. So that's kind of the slogging through this recession that the economists have talked about. The next year, we're making improvement, and here is 2015. We're now equal to or below the 3% to 4% range that we saw prior to the recession. So I just thought, as a visual, this really showed how we reacted very quickly this year, this time, to an unfavorable recession pressure, and how long it's taken for us to come back to the pre-recession levels. Very good. Thank you for sharing that with us. So, now for our financial update. Okay, here is our usual slide, which shows where we are on our unemployment compared to the U.S., the state of Kentucky, as well as the Lexington MSA. Currently, for the U.S., November, it was 5%. Kentucky was at 4.9, and those were unchanged from October. The MSA is sitting at 3.7, and that compares to 3.2 the prior month, and Lexington is at 3.6, which compares to 3.1 the month before. So the question is, is this some seasonality, or are we starting to see, we were two years down here at the lower, are we starting to see a trend? One month does not a trend make, so it's just something for us to watch. Here's the rolling three-month average, which just kind of takes the spikes out of those. But as you can see, we're on a rolling good trend where the unemployment rate has been dropping. Not sure how much more can drop when you get down to close to the 3% range. Okay, hold on one second. We've got questions. Council Member Farmer. It's not serious, just interest. In all of these, the Fayette County line is always below the Lexington line. What is the reason for that? Well, the Lexington line is the total metropolitan service area. That includes all of our contiguous counties. The Fayette line is just Fayette County and the urban county government. So Lexington MSA is bigger, more diverse, broader. Broader. Ten counties or more, I think, with different economies than just the urban area of Lexington. Thank you, sir. Thank you, Chair. Let's see. No one else, but I do have a question on this. Do you have also incomes as they relate to the unemployment rate? Are incomes higher and more people have jobs? Incomes lowered, more people have jobs? The mayor mentioned incomes were up 13% here in his speech last Tuesday. Are you all tracking something like that that would show that even though we have a low unemployment rate, our income's higher or lower than they were pre-recession? I cannot answer that question off the cuff, but we can look at the Bureau of Labor Statistics, which is where we get these data. There's a wealth of data there. The difficulty in answering your question is, does it include farm income? Is it non-farm income? Which slice? But we'll take a look at it and report back to you. Because what I've seen out there in the private sector is even though more people are employed and our unemployment rate is very low, they're making less money. Well, and I would say something similar is they now have two jobs. They used to have one job. Right. That too? Okay. Thank you. So some of the selected economic statistics were all in the good range. We already talked about the unemployment. The employment, the last numbers released were for June. We will get another quarter released, I think it's in March. But 189,400 was the last employment numbers for Fayette County, and that was at the end of June. Our county permits are slightly up, 1,158 over 1,112 same time last year. Our new business license, we issued 162 last month compared to 137 one year ago. And the really strong number is home sales. There were 919 recorded compared to 794 same time a year ago. And the one that I like to see is foreclosures, and they're flat, 26 versus 25, same time last year. So question on those economic indicators? Then I'll turn it over to Director Rusty Cook for the top four revenues. Thank you, sir. Welcome, Director. Thank you, Chair. Good afternoon, Council. As Bill said, I'll go through the top four revenues as I have in prior months. The first slide is just the top four for the month of December. As you can see, we were just slightly under budget for December by $27,000. Let's take a look at this slide, which is our year-to-date compared to budget for the first six months. So the first half of the year gives us a good look at how the economy's been in the first half and it's been for us. We're up $2.3 million in the top four versus our budget. Employee withholding is most of that at $2 million. Within that number, we do have some one-time benefits, so it's not trending. Net profits up $1.2 million. We also have a one-time benefit due to an IRS audit of a taxpayer that resulted in some additional payments to us to about $325,000. Insurance is up $229,000. And the one problem is franchise fees down $1.1 million. It's a combination of we budget a little aggressively on that, and then the first half of the year the weather was pretty mild until here recently. If we have some worse weather, that will actually go up some. Next slide is a comparison of our year-to-date versus the same period in the prior year, 2014. It shows strong growth of $7.5 million year-over-year for top four. All four categories have grown. Withholding is up $5.3 million. Net profit, $1.4 million. Insurance, $450,000. That's really in the marine auto and casualty insurance. And franchise fee, $291,000. So, you know, Bill showed the statistics on the unemployment rates. You can see it's definitely indicative of where we are on our withholding and net profit, you know, having a pretty good economy. The net profit had a strong fall season. We have, you know, two filing seasons, and October was really strong. and then would also include any estimated payments. This next slide's in here for information purposes, and I believe the Director of Code Enforcement will go over that if you want to do it now or after we finish the presentation. Whatever's easier for you. We can finish ours and then you guys can go back to this page. Is there any question on top four before Melissa goes over other revenue and expenses? Thank you. Welcome. Thank you. Thank you. All right. So we'll get right into it. On the ad valorem, we are within about 2% of budget where we expect to be. That decrease where we are in our actuals is due to motor vehicle fees. Services, we are up about 3%. That's due to several categories, some of which are in our detention, building permits, and EMS fees. Fines and forfeitures, the variance is just that. It's in our fines and forfeitures. The property sale is vehicles. Again, we've seen this variance show up every month. We sold some vehicles, and we never know year to year what we're going to be able to surplus and to sell, so that's a hard one to gauge there. Intergovernmental is within 1%. Investment income is within 3%. And then the other income, that variance is due to miscellaneous revenue. On the expense side, you'll see that for the first six months of the year, we're tracking within 2% of budget. Our variance is 2.4 right now. I don't expect that to hold throughout the end of the fiscal year. January is a very large month for us. We have a lot of retirements. That's when a lot of the police and fire retirees announce. And then we also have sick checks that month. So January is a big month payroll-wise. It's our largest month. for payroll. So we'll probably get a better idea after we get January's data on where we think we're going to end the year with our personnel. On the operating, we've got a $1.6 million variance, which we're within 8%. And that is due to categories such as professional services, utilities, grant match, supplies, repairs and equipment. So it's various accounts. And you all are aware we had some stuff happen over the weekend. So we're probably going to be looking for some dollars there to cover that. So this variance also was not going to stand for the rest of the year. So we'll have to be doing some budget amendments here. Debt service is within 1% and partner agencies are within 5%. And that's just the timing difference of whenever payments were made to the partner agencies. And then operating capital, we're within 2%. And like I said, people are just purchasing their capital items a little bit earlier in the year than what we had anticipated, but we're fine there. So overall, on our expense side, we're about $3.5 million to the good for the first six months. Like I said, we don't expect that to hold. We expect some decreases in our variances there due to things in our control and things out of our control. And then if you take into consideration our revenue and our expense variance, we're at $6.1 million to the good for the first six months of the year. Thank you. We do have a couple questions. Okay. First up, Councilmember Maloney. Thank you, Melissa. My question is on partner agency, what did we get? Give me an example where we're getting that money or how we get that money. That's what we pay to our partner agency. So we may have, because of the holidays, the checks may have been cut a little sooner to the partner agencies. That's the social service agencies, economic development agencies. I believe the libraries in there as well. So because of the holidays, checks may have been cut a little sooner than normal. So that's probably what's causing that variance there. Thank you. Thank you. Council Member Brown. Thank you, Chair. One question on personnel. We had three pay periods in December, and that's reflected as far as the large amount. Is that not correct? Yes. What we do is we spread out the budget based on the pay periods each month. So we put, we know the months that we have the three pay periods, so we spread the budget out accordingly. So that did take, the budget did take that into account. Yeah, and are we into a 27 pay period in this particular fiscal year? I don't Phyllis, I don't think so. Is that coming up? 2017. 2017. So it'll be in next year's budget that we're working on, that we'll be working on probably. Is it calendar year or fiscal year? 2017. And the other question is, and I'm not sure, Bill may need to answer this, these December figures that we have, actual and budget and whatever, are these the ones that we're going to go into the budget year with, these numbers here, or are we going to wait and get January? These numbers here are what, we sent out the division's budget request last week, and so on their request forms, they have through December on theirs. Now, whenever the mayor gives his budget address and we have the budget book, that will be through February. And so you all will actually be using data through February whenever you're working on the budget. Okay. Thank you. Okay. Proceed. Thank you. The next two slides are comparing the current year to the prior year for information. So if nobody has any questions on that, I'll turn it over to the Director of Code Enforcement. Anyone have any questions on the last two? Okay. Thank you, Director. I guess I should go back to his slide for him. Welcome, sir. Good afternoon, sir. I'm Chief of the Director. Yes, sir. I'm the two-month director. Yes, sir. Where's the slideshow? Apologize. Give us one moment here. Okay. All right. and before we get started vice mayor did you want to say anything i know this was a topic that you asked to say i didn't know if you wanted to say anything no the reason i was interested in it is that at the beginning of the reporting period it looked like there was a dip in all of these areas i just wanted to get a a full year look and so we could have a good idea about how this works so thank you very good thank you proceed sir uh one of the questions that was asked of me after the last meeting I attended was there was some question about the header and what it actually meant whenever it said abatement and lien collections. And I don't want to go into too much of a tutorial on this, but what I'll just say is this. Whenever it comes to the enforcement action that we take against the residents, whether it be related to nuisance or housing, there are two different avenues to follow. That is the issuance of civil penalties if there's non-compliance over an extended period of time, or abatement. That can either be emergency abatement in nuisance instances or delayed abatement if the property owner is trying to work with this. Ultimately, what happens is in every case that there's non-compliance after a time frame, a civil penalty is issued whenever it is a housing matter. Now, it will be up to the property owner, not the individuals living at the property, but the property owner, to go ahead and file an appeal on that civil penalty, which would delay the possible payment regarding it, or they can go ahead and let the time run out, or they can pay it. If the time runs out, which is normally 30 days, it then automatically becomes a lien. So a civil penalty, noncompliance, after a certain amount of time, then becomes a lien. Whenever it comes to abatements, what occurs there is essentially the same thing. Abatements cannot be done for housing, though. That is nuisance only. What will happen is the government will actually use funds allocated to Division of Code Enforcement for that abatement. Then the individual will receive essentially a bill for that abatement. He or she, the property owner, can decide whether they want to pay it immediately or after a certain amount of time, 30 days. then it would also become a lien. So when we see the payments associated with liens, which is on the second slide, what that is, or I'm sorry, the filing of liens on the second slide, that comes from two different revenue sources, essentially. When we look at the civil penalties and abatement lien collections this month, or since July, this fiscal year, as compared to 2015, there was at the beginning of the year what I would refer to as a lull in those collections. Obviously, it is a decision by the property owner if they pay it or when they pay it and when it actually becomes a lien or not. Before they can sell the property, though, if it is a lien, they have to make arrangements to have that paid off. So any civil penalties or abatement that are not addressed immediately then become liens or held against the property. Ultimately, those liens can turn into a foreclosure of the property. We work with the law department in regards to that, identifying what's the best case for each individual location. But they can turn into foreclosures, which was alluded to a little bit earlier. If you look at this fiscal year, we are actually a little bit above last year, both whenever it applies to the collections or revenue collection and the liens, which are on the next slide. I'll go ahead and go to that slide real quick just for a reference, And I'll go back to the original slide just so you can see what I'm referring to. Proposed or possible revenue differences in the two fiscal years up to December of this year. It's actually a positive of about $65,000 over the last fiscal year. Ultimately, that may not hold out because, again, liens that are paid or the abatements that are paid or the civil penalties that are played do somewhat fall on the property owners when and if they do pay those, ultimately. They have to eventually, but when is a little bit up to them, to be honest with you. There were some issues, what I would refer to, back in July and August with some administrative changes, a change in leadership. Also, there was some administrative staff that were gone for an extended period of time. and because of some retirements in addition to the leadership of the division. We had two new housing officers hired, and we also had one nuisance officer hired. Those were not new hires. They were just replacement hires. And there was a learning curve there. So some of the administrative duties that would normally fall within their realm of responsibility maybe slacked off a little bit, to be honest with you. There was a little bit of a lull, but it quickly caught up in September. And as you can see, both in liens and the collections, it's surpassed last year's year so far. Any questions for Director Armstrong? First up, we have Vice Mayor Kay. Yes, sir. Thank you, Chair. Thank you for bringing the information. I think you've really answered the questions that I had. When we saw the July and August numbers, it looked like there had been, as you said, kind of a slack off in fines. And just to be clear, the fines and the penalties, it's not about generating revenue. It's about generating compliance. I understand. If code enforcement is not vigorous in applying these fines and collecting liens, then people feel that they can simply slide. even though they've been cited and nothing happened. So I appreciate the work you've done since you've come in, and I appreciate your bringing this information to us. It looks like you're going in exactly the right direction. Thank you very much, sir. And I would agree, ultimately, we want zero revenue from this. We want full compliance. Thank you. Thank you, Chair. Anyone else? Okay. Very good. Thank you, sir. Thank you very much, Chair. Next on the agenda, we have our annual CAFR presentation from our recent audit ending June 30th of 2015. Mr. O'Mara, welcome. Thank you, Chair. Council may remember that we changed auditors, and so Strohkman and company became our auditors, and this was our first year with them. They're here to give their management report and the results for the annual financial results, and we're handing out the management results in the A133. So I'd like to introduce Bill Meyer. He's the partner in charge of our audit, and he's here from the Louisville office to report to you. Thank you. Good afternoon. I'm Bill Meyer, as Bill said. I have with me Jennifer French. She's the principal with our firm that managed the day-to-day of the audit. I was the partner responsible for the overall audit. I'm here to answer any questions today. I was going to make a brief presentation. If you have easy questions, I'll answer those. I'll let Jennifer come up and answer any hard questions that you have. Just wanted to take a few minutes and just tell you a little bit about the audit, tell you a little bit about the annual financial report and the auditing procedures that we did. The audit overall went well. We got good cooperation from management. The financial statements, which I think you've gotten ahead of time. By the way, we don't come up with this format. This is the Governmental Accounting Standard Board that causes you to have a 163-page report. It's not anybody around here's fault. But we had to audit the whole thing. Your audit was clean, both the audit of the Comprehensive Annual Financial Report and then what's called the single audit or the government. It's the federal funds audit that Phyllis just handed you. That was a clean audit also. Just a couple things I wanted to talk about. The new pension accounting standard. You might have heard or may or may not have heard that the governmental accounting required the pension liabilities of the state to be pushed down to the various governmental entities this year. Now, you have two sets of financial statements in this document, basically. You have what are called governmental-wide, which are ones really nobody ever looks at except the bond people and so forth. And then you have the governmental funds, which is what you're used to with budgeting and so forth. The government-wide funds is the only statements affected by this pension liability, but you recorded approximately a $300 million pension liability government-wide as a result of this new standard. That sounds like a lot of money, but every government in the state, really around the country, was affected by this new standard. If you want to know more about it, I'm not going to go through all 163 pages, but starting on page 94, there's about 10 pages. Hold on, before you go on, what you just said there at the end, you said we have a $300 million pension liability. So basically the governmental accounting folks said that if you're a member of a multi-employer plan, which you're a member of the state plan, each government is supposed to figure out, through the use of actuaries, their share of that underfunding and record it on their own books under the theory that you're going to have to help fund that in the future. So again, it was just an accounting change. It doesn't affect the way you operate day to day. It doesn't affect the way you budget. It just affects these government-wide financial statements that are part of your financial statements. So when you say pension, I want to make sure we understand because we think about two different pensions. Oh, I'm sorry. This is your share of the state pension liability. It's $300 million. Right, approximately. Okay, I just want to make sure. It didn't include police and fire or a city employee's pension. Right, and you have that on your books, too. You have that all along. Okay, thank you. Again, I didn't want to go through 163 pages. I just did want to point out a few things that I thought might be of interest to you. This is information that's summarized from page 37 of the CAFR, and these are in millions. But just to show you, the revenues for the year were up nearly 7%. Expenditures were only up 4%, which is a good trend. and you had a net change in general fund activity, which is a positive, which is good, always what you want to look for. The other thing I thought you might be interested in, this is off page 35. This is the general fund balance and the allocation of the general fund balance. So it increased from $63 plus million to over $83 million this year. And again, that's a positive trend. And this shows the allocations that were given to the fund balance. We do have one question. Councilman Brown. I can wait until it gets through the government. I'm good. Yeah. Thank you, Chair. On page 35, you just alluded to that. Is that modified accrual on that page 35 versus cash? Yeah. Well, it's basically the modified accrual that you use for budgeting. Okay, and that's what you're using for budgeting, Bill? That modified accrual amount? Okay. And page 36, I thought that was a really interesting page. I don't know if you've got to it yet. Yes. So page 36 and 38 are similar in the sense that it reconciles the governmental fund basis of accounting, again, the basis that you budget on, to the government-wide accounting basis. Again, the government-wide basis is not used by many governments internally, but it's used by bond rating agencies and that type of thing. On page 36, I thought there were some interesting things that council members should be aware of. Going down to the second part there where we've got long-term liabilities, we've got bonds and notes payables of $322 million. And then we've got interest payable on there, $4 million. And the compensated absences of $23 million. What's that? Give us a little bit more information. Okay, yeah. So the two main differences between the governmental basis of accounting and the government-wide are on the government-wide, you have fixed assets that you record as an asset, and you have debt that you record as a liability. You don't do that on the governmental funds. So one of the debts or liabilities that you would record is compensated absences, which is vacation, sick time, that type of thing. Which is an item there that you really haven't spent for. Correct. So the government-wide is, that basis of accounting is very similar to a for-profit company. And you alluded to the three, is that the same $300 million you just mentioned, the unfunded pension? Yes, there's several. It's kind of in several different places, but that's... And then one other thing I think that's important, down there, the last contributions to the pension plan have been deferred in the statement of net position, But that's $36 million that we contributed, and then investment earnings on pension plan assets have been deferred of $56 million. Yeah, so those items are not— Is that going in the right direction? Yes. If you looked at any other city government or any government around the state, you'd see those types of things. Those are things that are recorded on your government-wide financial statements that aren't recorded on your governmental funds financial statements. But we're still responsible for them as far as— Indirectly, yeah. All right. Thank you. Anything else on this slide? All right. Please continue. So that's really all I had. I'm here to answer any questions. Again, everything went well. Everything was clean. You've got a lot of information I want to go through. I'm glad to answer questions now or come back later or answer them through the finance group. Any committee member have questions in regards to the CAFER? Yes. Council Member Brown. Trying to speak there. Thank you. Are we going to talk about the area, like the statistical section, or is Bill going to bring that up, that area? Well, if you have questions, they're here to answer anything you want to talk about. I guess my only question is the statistical section, which is pretty valuable, I think, for Council members to look in there and see what the trends are for the last 10 years or so. So was that given to you all by the government or by the finance department? So actually, your management of the finance department prepares this entire document. We just audited it. The statistical data is required in a CAFR by the governmental accounting standards, and it's trend data that goes back 10 years or so that's accumulated. But it is very interesting. If you all want to study it, it's very interesting information. Okay, thank you. anyone else have any questions on the caffert i do have a question for commissioner o'mare though okay going back to what councillor brand alluded to on the um the statistical analysis the last 10 years what portions of that are you all using and budgeting our priorities next year but for instance the number of golf rounds went from you know 152 000 in 2006 down to 91 000 last year Do we still need six golf courses? I mean, what part of this are you looking at and trying to incorporate into what we're trying to budget as priorities? Because to me, money's not going to get more abundant in the next year. It's going to get tighter. And fire runs, if you look over here at the number of patrol units, we had 481. Now we're down to 430. And the question is, are we going to add more public safety? So what part of that, I know it looks good on paper, but what part are we actually going to start using and referencing when we prepare a budget for next year? I know it's a loaded question, but I see these year after year, but yet we don't really pay attention to them. And I'd like to start. Well, my answer to your loaded question is that we look at all the information available to us when we put the budget together. And then I can put comma, asterisk, and we will give special attention to the statistic studies when we're putting the budget together this year. Any particular area have you all reviewed that we're going to concentrate on trying to address? Well, we've just been listening at this point. We have met with commissioners and directors to look at an early glimpse of what they see were important in this upcoming year. We just put the budget call out. We had the last meeting yesterday, and it's due the middle of February. And then, of course, we will have hearings to flesh out what they actually submit to us. And then the whole month of March is our collection and decision-making and weighing all these good requests. Because I don't know that I've heard bad requests from any of them. It's just a matter of competing with limited resources on what makes it to the A list versus the B list. And I definitely appreciate that. Do directors get a copy of this? Of CAFR? Yes. It's posted on our webpage. It's available for everybody. But, no, we don't spend money to print them for each director. Okay. Well, I'll just close by pointing out a couple more. Emergency medical calls are up 40% from 10 years ago, whereas fire calls are level. So it would mean we probably need more ambulances versus engines. So as we look at the plan, police, if you look at the traffic citations, 67,000 down to 44,000. Yet we get all in our districts complaints of speeding through the neighborhoods. So, you know, traffic is probably somewhere we need to address. So that's just what I wanted to point out. I mean, these are some valuable numbers to me. And they tell a big picture, especially coming off the recession. and I would hope that we would use it in planning for the future and outlining our priorities. Council Member Brown. Thank you, Chair. I want to follow up on the chair because I think, Council Members, that this information statistical section is real good to kind of digest. And some of the points that the chair made also, to me, and I think most people know, safety, public safety is probably my number one priority. And when I look at the statistics there, I see police officers all the way back to 2006 was 527, and then at 2015 was 518. Now, I know that numbers, 518 don't look right, but I know that we're trying to get our authorized strength up to 600. And I think we need to pay special attention to that particular area in the budget process. and then also the rounds of golf and the parks and recreation, rounds of golf and the pool visits. I think those areas are critical as to what is happening out there. And my third area is other public works, which would be street resurfacing miles. And if you've got that listed there, it's on page 157. It's the last line item. I'm curious there as to the number of miles. Are those lane miles that we have paved this past year? I think in 15 it has 27. Does that sound right? I'd be glad to double check on that. I don't know the answer. Okay, I know, well, let's see, this would have gone through June 15th, so that's correct, because we didn't start spending some big money until the fall of 15th. But my question is, if I'm not mistaken, and it's a little bit, I get different numbers, but we've got about 2,500 lane miles out there in our urban county government. and to pave 27 lane miles out of the 2,500, I think we've really got a problem there. And I think we're trying to address it, but I wanted to emphasize it a little bit more, but that particular area, based on these statistics, we're way behind. That's all I have. Thank you. Anyone else have any questions? Councilor Maloney. Yeah, I've got a question for you guys. What I hear is everybody's going back to 2006. What? Comparing 2006 to 2015, I'm hearing numbers dropping higher in 2006. We had a recession for the last 10 years, I think, if I'm wrong on this, correct me. But when I— I totally agree with you. When I came here to work with the mayor, we had a $20 million shortfall. Now, we corrected it. From Goff's standpoint, I heard that the numbers have gone up compared over the couple years. I mean, 2006, the economy was great. Everybody, I mean, you could do, but now it's starting to, and you said it, everything's going to be not like it was. It's going to be like this, real slow. We're gradually getting back where we hope someday we'll get that way, but right now it's a lot slower than it's been. So to compare it for 2006, I just have a little bit of problem with that. But we had surplus the last two years, and priorities, well, I see what we're doing here. The budget seems to be going on track, but I don't see a surplus here. I'm glad to see that you all are trying to fix that problem. But to me, when we had surplus, the priority list should be what he's talking, public safety and that kind of things that come around. And I think, to me, I think we're on the right track coming back slowly. but I just don't want everybody to get into thinking that we're just going down. I think we're starting to come back and everything. I think it's slower than what it was, and so hopefully people realize we don't need to be taking a drastic step, but I agree with public safety. I think there should be more police. There should be more fire because the city has grown a lot more in 2006, and six. So, and I don't think it's the discussion to get into what we put our priorities are, but I do think it's a discussion is we need to let everybody know we went through a recession. We went through tough times. We're back on track. We're slowly coming back. And I just don't want everybody to realize we don't need to do a drastic change. It's right now, but we can make a priority list, and I don't think this is the day to do it. But that's my point that I do commend your staff and everybody what you all have done the last three years to get back on track. Thank you. Anyone else have anything from the CAFR? All right, gentlemen, thank you both. Thank you. We appreciate it. Next up on our agenda, the Urban Services Fund, the Streetlight Data Continuation Conversation from our last meeting, and we'll begin on page 25. Commissioner O'Mara. Thank you, Chair. So what we were asked to do was to come back and compare fees versus property taxes. And what I wanted to do was just quickly review the analysis we presented last time by fund, by purpose, and then go into some funding options for both streetlights and street cleaning. In the previous presentation, we had a very busy spreadsheet that had lots of numbers on it. And so for a review, I tried to put that into a graphic scale. So this is the total urban service fund, all three programs, the fund itself, the grand total, and some history as well as a projection out to 2025. And we've highlighted on here the dates where there were property tax rate rollbacks. There was a streetlight rollback in 2004 and again in 2005. There was a refuge rollback in 2008 and then again in 2010. And this is showing you on a year-to-year basis revenues and expenses. We're not talking about fund balance. We're talking about each year standing alone, whether revenues exceeded the expenses or vice versa. And you can see a spike. You see the spike here, and that was when there was a major cash capital for refuse trucks, and that's why those years were abundantly higher. And then you also see that we have a projection here that revenues will increase, but that expenses will increase at a higher rate. So we'll go from, in current 2015, an annual deficit for the annual 799. That will grow to $6.5 million by 2025. So that's the projection. But those are the assumptions that we're running off of to do all of these analytics. We've done the same thing for all three of the different programs. Here is your cash flow for just the refuge portion. And we have those rollbacks that are highlighted. You see again where, excuse me. All right, we'll try to get back to where we are. It's supposed to be. I'll try again. You see again the large capital outlay that happened, and you'll see that for this program, we currently are running a surplus of about $1.4 million for the year. but that by 2015 that's projected to be a deficit of 550,000. So that tells you that the deficits you saw before of 6.5, the deficits are really in the other two programs. So here's the streetlights, and we're talking everything before subsidies from the general fund. We see the two rollbacks, and we see that the total expenses have been exceeding the total revenue for quite some time. We're currently looking at a deficit of about $2 million for the year, and that we're projecting that that will grow to $5.459 million in 2025. So that's what those spreadsheets told you the last time we came. This is just in a graphic presentation. The next one is street cleaning. And we're currently at a deficit of $266,000, and we're saying that that will grow to $509,000 by 2025. The other point I wanted to show was a breakdown of services received. And this is just a graphic illustration of how dense the urban service area is. The blue is the urban service area. The green is the entire county, all inclusive, our entire footprint. And so 95% of the people in the urban service districts already receive streetlights and are paying a streetlight property tax. If you look at all of those people as a percent of the entire county, it's 87% of the people in the entire county are already paying a street light property tax for that fee, for that service. For street leading, those comparisons are 82% of the people are receiving street cleaning versus 75% that are paying that property tax. And for refuge, it's 91% of the people in the urban service, and that equates to 83% for the entire county. It just illustrates of the big pie versus the small urban service, what the percentages of people receiving the services are. So now we look at the request of some modeling of streetlight funding. Before we get into that, we have one question. Sure. Councilor Massadi. Thanks, Bill. and I guess the question that everyone always asks is the street lighting. I mean, the deficit that we've got. I know we did the franchise fee last year, and that helped us with, I guess, half. We were at $4 million of a deficit, and so 1% gave us $2 million. Is that correct? We did a—the council raised the franchise fee two or three years ago, and that goes into the general fund. Part of that money was intended to pay the supplement that is needed each year to make the streetlight operational. So there would be enough money to pay for all the expenses related to the streetlight program. Right. So the only other way to catch up would be another increase in the franchise fee or some other mechanism, I'm assuming. Well, I'm going to go through three options for you. Okay. I'm going to look at the current where we're paying a property tax and we're supplementing it through the general fund. and then I'm going to show you what it would take for the property tax to fully fund the program, and then I'll show you what a fee would be like in order to fund that program. Thank you. Okay. Next up, we have Council Member Bledsoe. Thank you, Chair. I just have a philosophical question before you give us those answers, which is, is it your intent to move to a self-sustaining fund because that's the best way to do it, Or is it, and that's where you're working, that premise is what you're working toward? Or is it an assumption that we'll always, because this is a general good, people use them whether they pay for them or not, that small 5%. And then, of course, we have about $2 billion that are non-taxable and non-profits. They're also benefiting from the use of those. So I'm just curious what premise you're working from as a goal. Does that make sense? Right. But what we're working from right now is what you have adopted and what we have implemented right now. We're saying that there's a common good for the streetlights on the major arterials that everyone benefits from. They drive down Nicholasville Road or Versailles Road or Richmond Road. Take your pick. They go to a ball game or they go to the mall, and all those are lighted, and they benefit from that. And so that is a reason for the general fund to supplement the program for those people that actually have neighborhood lighting. Those people that have street lights in their neighborhood and on their streets, whether that's a commercial street or whether that's a private street. What we were asked to do was to give options. of instead of that, what would it take to make the property tax self-sustaining of the program or whether a fee-based approach would be self-sustaining for the program? That's what we thought the question was. That's what we're presenting today. That's good. I was just pointing out there's a principal difference or philosophical difference maybe between the end use and what we're working towards, and that's why I was just curious if you had a preference. Thank you. Thank you. Councilman Maloney. Thank you, Chairman. Appreciate that. When we raised that fee back two years ago or three years ago on franchise fees, how much did that generate? I think the $4 million is right. I didn't bring that with me, but I think that's right. And so out of that $4 million, we put $2 million or whatever to balance? Two to two and a half. and so with the franchise fee, we can still keep paying streetlights. When I was looking at the $25 million, when I look at $5 million that you're going to have in the next 2025, I see we can still got $2 more million to work with with our franchise fees that we raise. we can take out of that and keep paying those streetlights until how long do you think that $2 million will? I mean, how long before we hit the $2 million, and then we have to do another raise? If I could, this is debating the three options before I presented them. If I could present the three options. I'm not asking for an idea. I just want to know how long that $2 million, that we got two extra million dollars in that franchise fee because you're already paying $2 million, up to $4 million. Two of us are being paid for what we're in trouble with right now. How many years is it going to be before we go past the $4 million that we passed two years ago? Well, I need to answer your question this way. There isn't $2 million abated waiting to be used for the streetlights. It's part of the general fund, and the mayor and the council have both sized the general fund to meet the expenses for each year. So the question would be, do we want to continue to ask the general fund to subsidize the street late program in the range of $5 million in 2025? Will the franchise fee grow over that period of time? Absolutely. I hope withholding and net profit revenues do too. It's a matter of, do you want the funds from the general fund to play a part in a specific service program, or do you want the funds related to that specific program to be self-funding? As you related to a minute, yes. I do want to say one thing, and I was commissioner when we brought this up. I came up and said that this money is going to keep helping pay for the shortfall of the streetlights. And I told the council that all of it were eventually paid for it. And the impression is that's what got this vote from the council at that time to get these streetlights paid for it. So that's why I'm having a problem. And there's nothing against you on that. It's that that money was basically for one reason. That $4 million was to keep those streetlights going. And out of that $4 million, $2 million doing it now. so we've got a little bit of time left. And if I'm wrong on that, guys, you all will hear, but that's the way I sold it to the council at that time. Now, if I'm wrong with that, I'd be glad to hear what I misunderstand, but I promise you that was my commitment was to get this $4 million to go to y'all's streetlights, so I'm getting a different story here. Something changed, I don't know. Anyone else have any questions for Mr. O'Meara? All right, proceed. I got just a clarification point. Well, we're just going to deal with street lights today. That's what's on the agenda. And if we want to bring back options for street cleaning and or refuge at a later date, we can. Yeah. This is part of our problem, too. and I just want a clarification. This is just the biggest problem. We're just doing the street cleaning. Okay. As this previous slide demonstrates, the biggest deficit that we expect to have long term. Mr. O'Mara. Thank you, Chair. So the next is options and modeling of different ways to pay for the streetlights in Fayette County. So first, let me draw a distinction between a tax and a fee, and this is from a finance person, not a legal person, so I have to put my disclaimers in here. But a tax can be charged if a service is offered. That doesn't mean that the person availed themselves of the service, but that it was offered to the constituency. It does not include not-for-profit, schools, government. So the pie is smaller for a property tax, and we have a very, very high collection rate in Fayette County. It's in the 99 percentile range, so you have a very high collection rate of the program when it's a property tax. If you go with a fee, a fee must be based upon a provision of actual services received, and different services require a different fee structure. The pie gets larger because all people are subject to a fee, whether it's a government, whether it's a church, whether it's a not-for-profit. But the collection rate of how many people pay that fee has in other areas been lower and is actually unknown to us right now what kind of collection rate we would accomplish if we converted to a fee-based system. And I bring that up because that's really incorporated in everyone's fees. The people that do pay, pay the entire cost. And part of that, they're carrying those people that do not pay. And so you always need some sort of compliance for fairness so that those people who consciously choose not to pay, there are some sort of negative ramifications for the fact that they chose not to. So that's just a dynamic when you switch from a property tax to a fee that's going to be there wherever you are in whatever type of arrangement you make. So I came up with three. The current funding structure, which is using a property tax, which is traditionally not changed, and a supplement from the general fund, or a property tax only. what would a property tax rate have to be in order to totally fulfill this fee structure, or a fee-based, which is a larger population but is structured differently depending on the level of service that you receive. So the first on the left is our current funding structure. We've been at .021 for several years now, and this is projecting out what type of supplement would have to be relied on from the general fund at different points in time. So about a 2.1 in 16, it would be about $3.5 million by 2020. It would be about $5.5 million by 2025. That's the structure that we're in right now. On the right-hand side is what would a property tax that had a 4% increase, and it's important in talking about property taxes, about the limit of what a government's increase can be without the option of a voter referendum. It doesn't mean there will be one, but you open yourself up to a voter referendum if you raise a property tax 4% year over year. That's actually a year-to-year calculation depending on comparables, and so I don't have an exact number, but since I'm projecting out to 2025, We just took this year's base and just went a 4% increment for illustrative purposes. So if you had 4% increases each year in the property tax for streetlights, you'd be at 0246 by 2020 and 0299 by 2025. And the supplement would decrease from 2.1 now to 1.9 by 20 and down to a million dollars in 2025. So just some modeling of a property tax. We have a couple questions on this slide. Vice Mayor Kay. Thank you, Chair. Bill, when you say increasing the property tax on, so that's separate, there's a separate category within the property tax that you can raise just that aspect of the property tax? Are you talking about the limit overall for property tax raised, which we know is 4% by state regulation? My understanding of the law is each rate is computed separately. So there's a calculation for the streetlights. There's a calculation for refuge. There's a calculation for street cleaning. There's a calculation for the general. Each one stands alone, just like there is for LexTran, for the Water Conservancy. All of the different property tax, every one of them go through a 4% test. So this one would be its only test for just streetlights. Okay, thank you. That's helpful. Thank you, Chair. Council Member Massadi. Thank you, Chair. And that was my question, but a quick follow-up is, when was the last, have we ever, or when was the last time we've done this? I did not find a time where Council increased rates. I just didn't know if there was a time. I'm not saying it didn't happen. I just didn't find it. Not in your recent memory? Yes. Or our recent memory. Okay. Thank you. Good question. Thank you. Council Member Maloney. The question on this 4% on property tax and all that, and see, this is the concern that I have about streetlights. You've got streetlights around New Circle Road. You've got streetlights going up the sales road. You've got them all over where there's no properties. Who's paying for those? So in other words, people who have a streetlight property tax are paying for lights that nobody has property on. Is that correct? If we do this, 4%. Let me see if I can answer that appropriately. We have property tax assessed to both individuals as well as businesses. So whoever owns the individual tract of land is assessed a streetlight fee if it's on their land. the city does pay from the general fund to the dedicated streetlight fund about $200,000 a year for lights that are on public right-of-way. So that's been done since, well, for a long, long time. So general funds will be paying. So my question is, raising this tax fee here will be public taxpayers. Then the franchise fee that we just raised, that money will just go into general funds and be used for something else. As it is now, correct. Are we trying to raise this money up enough so that we can pay for the streetlights around New York Road for the public property? Do you use any general funds to pay for the streetlights? This option is multiple. We have multiple options. But these are two options of a property tax plus a supplement from the general fund. That's what this slide is showing. either with no increase at the current rate or if you increase the rate 4% per year. It will still require supplement from the general fund. How much will that be? Well, on the left, it grows from 2.1 to 5.5, and on the right, it goes from 2.1 down to a million. So one will go down while the other will go down? Because of their increase in the property tax will help fund part of the supplement, but the supplement will still be there. The general fund will still have to do a supplement to the program. If we raise it 4%, you're going to do 2016, and then 2020, is that another 4? I noticed it goes up a little bit higher. How does that go up? Is that 4% again we're going to raise another 4%? I'm modeling that every year it's increased 4% over the prior year. Okay. Thank you. Council Member Bledsoe. Thank you, Chair. I'm going to ask an obvious question, or maybe naive for me, but no one up here knows, or next to me knows. So what triggers a public referendum on a property tax increase? Is it the amount or the frequency? Like if it's 4%, it has to go to the referendum. If it's 2%, it does not. I'm not going to be able to say this properly. if the rate adopted by council generates more money in total for this program than the comparable portions that were taxed last year, if that total revenue increases more than 4%, then there is an option for the public, and it's a percentage of whoever voted in the last presidential election, if they get verified names of X, then they could put that rate up for a vote. And it would be suspended and not put into place until the election, the referendum was voted on. Okay. That's what I was trying to figure out. Okay. I stumbled through that. No, I stumbled on the question. Thank you. Council Member Hensley. Thank you, Chairman. I guess at some point, I mean, we're talking about raising the taxes to fund the street lots, but when do we take a time out and pause and do an assessment? Do we need all these street lots? I mean, a lot of times in the 12th District I hear about light pollution, and people ask me about taking some of the lights out. On my way home out in Old Richmond Road, I pass eight street lots, for example, I'm mentally calculating in my head. And so, you know, at some point, should we do a study to say, do we need these? You know, flying into Lexington, Lexington looks like a Christmas tree. I can't even see the airport flying in because it's buried in the light pollution. So has any thought been given into, do we need all these streetlights? Well, actually, I think it was 2011. It might have been 2012. Council asked that question, and I'm outside my space, but traffic engineering modeled taking out every other street light or taking out certain streets, and council directed them not to go that direction. So if council wants to have that conversation again, we can engage traffic engineering to present what national standards are and all the different issues that they presented at that time to council. next up council member acres thank you chair thank you for recognizing me hi bill um i guess following along what council member hensley asked is there my question is is there a way to reduce the cost of the street lights with technology or other advances i mean don't we lease them and pay ku for street light installation and replacement and that sort of thing. And so is there a way, like LED lights or other mechanisms that we could do that would reduce the prices of the street lights over time instead of just looking for ways to continue to pay more? Again, that is out of my space. I did a financial modeling, but from other times that's been asked, we pay a rate to KU that's assessed or approved by the PSC. They currently do not have one for LEDs, so that option is not open to us. Whether that would be open to us in the future would be something that we could ask KU. But we pay the same rate regardless of the age or how new or how old the installation is. They have gone before the PSC and said There's depreciation and return on investment and ongoing cost. So that's all incorporated in their one rate that we pay per streetlight. Okay. Thank you. Thank you, Chair. Council Member Scotchfield. Thank you, Chair. I guess one of the things that we have to look at as a council, I know that I struggle with, is how much is it worth it for the city to help pay for some of these things. It helps with our public safety. I mean, I can't tell you how many neighborhoods wish they had more lights because of issues that are happening. Obviously, Council Member Hensley, you have a lot of farmland, and it's a completely different situation. But I have yet to run into one of my neighborhoods for a meeting and have them say, we want less lights, because it does help defer crime. It makes people feel safe. And the reality is just because you may not have streetlights in front of your house on your street, you drive through downtown, you drive through other parts of the city that obviously you're getting a benefit out of. And I think it is an overall benefit to the entire city for us to somehow, I mean, when we have been helping to pay for it out of general fund. It's just a matter of, I guess, determined, and I don't know the answer yet. along council member acre's question you know i think we talked about at a different meeting that the led lights were a little bit more expensive to install i just i think i'd like to know that over a term of time whether the added expense will pay out with less upkeep and less expense down the road i think that's something we should explore and i know you can't give us a definite answer, but we have to look for alternatives to try to decrease these prices. Thank you, Chair. Thank you. Seeing no more questions, I would just say keep in mind as we're talking about property tax, you're saying that a $400,000 home is going to pay more for the same street light than a $100,000 home. Is that the most equitable way to fund this program? In the previous slide with fee versus tax, there are many different kinds of fees, some of which have very high collection rates as much as a property tax bill. So I didn't see that in here, and we'll get to that here in a second, but I just want to make that point that not every fee is equal, and different fees are collected different ways. So having said that, you want to go on to your next slide, and we'll get rocked. I'd be glad to. This slide was showing... I forgot. Let me look at it for a minute. This illustrates what the property tax would have to be in order to completely finance the program. So you would have to do a 41% rate increase between current and 2016. That would take it from 2.1 cents to just barely under 3 cents. But what's illustrated is that we still wouldn't be out of the woods. In order to stay up with the projected cost, you would still have to do 5% increases each year thereafter in order for this always to be self-sustaining. So this was kind of an acid test of whether what the council wanted to consider a total property tax option for funding this program. You finished with that slide? I am. I just want to make sure. Vice Mayor Kay. Thank you, Chair. Bill, help, it's not obvious to me, but help me understand why the acceleration, significant acceleration in the cost every four years, five years, whatever you've got listed. So there's a property tax increase. why is it not capable of keeping up with the normal rate of inflation for the cost of servicing those lights? Well, part of that is based on the assumptions we used. We've been seeing about 1.5% increase in assessed values. So we used that projected out. I didn't want to say that there would be a boom in housing or whatever. So we have property values going up 1.5%. We also average about $300,000 worth of additional lights, but that is also additional properties that come on. We put that into the model, and then we showed the utility costs and how they have gone up over time. And basically, the operating costs and the growth outstrips a 4% increase in the assessed value. I see. So basically, because utility costs increase faster than the underlying rate of inflation, they fall further behind. Okay. Thank you. Thank you, Chair. Please proceed. All right. So then we looked at fees. And so taking into consideration the rules that we're supposed to follow is that you actually have to obtain a value of the surface. there is the the value the overall value of someone that's living in Fayette County for using these common areas and everything and that's everybody in the county and then there's a different fee for those that have direct benefit and have them on the street where they live or work and so we looked at the the total number of parcels and we looked at the subsidy and if you divide the current subsidy by the total number of parcels, it comes out to about $34 a person. So we modeled $35 for a common good, public good fee that everyone would pay, and then how much would those people that are getting the direct benefit, those number of parcels into the total operating. And so if you look at a public good standard of 35, those people that are getting the additional lights would have to pay an additional $32 for a total of $67.75. That would grow to $107 in 2025. As compared to on the far side, the average assessed value of homes is $173,000 for Fayette County, so an average home would pay what's on the far right. The difficulty in computing how much per person is what should you divide by. And so measuring how many looms someone has versus how much frontage does your property have versus what the size of your property is becomes problematic and would have to be embraced if we wanted to do further research on what the fee. In order to model this, I just took total number of parcels. So a quarter of an acre parcel versus a two-acre parcel, that's one parcel, and divided equally for illustrative purposes. All right. Councilor Bledsoe. Thank you, Chair. I'm a little bit confused. So if my family of four would pay the $67.75 times four, No. Parcels, not people. You live on one parcel. You change per person. That's why I was trying to make sure. I'm sorry. Each parcel, each. But it's still just property owners. I mean, that doesn't count for rentals or people who are also here. It's still the same. Again, whoever owned the parcel, and that's who would get the bill under this illustration. Okay. Okay. Thank you, Chair. I assume you all did not look at what the council three years ago put forward as an option. That was to raise the franchise fee 2% versus the 1%. So today we'd raise it one more percent and fund it 100% from the general fund and do away and abolish the property tax. I did not. I did not remember that suggestion. Because the franchise fee has a much better collection rate, almost as good as collection rate, because it comes from utility bills. And they can cut your electric off if you don't pay it. The other issue is it's the only fee out there that will keep up with the electric rate increases. Property tax never will. You know, 1.5% versus a 6% electric rate increase, we're just going to be having this discussion again in 10 years. So, you know, I'd like to see that model. It failed 8 to 7 on the previous two councils ago. I think it's worthy of discussion to pay 100% of it from the general fund and increase the franchise fee, the 1%, and see what those calculations are. because that may ultimately by August be the best option to abolish the property taxes. It will never catch up in theory. I'll be glad to model that for you. Okay. One point is that water is still at three. The energy franchises are currently at four, and that water franchise is currently up. So if you're talking about moving above the four, that would be a current event when you're talking about the water franchise. Well, and that needs to be probably in your analysis, because we just did the gas and electric to get the extra 1%, which generated $4 million. So are you saying we have to do, I know David Barber walked up, you have to do them all at the same time equally, or can you just do water, get them up to 4% and see what that generates? I think it would be preferable to have them over time be the same amount. Right. But I was just pointing out to Bill that I didn't know if you all realized the water one's still at 3%. Right, we were still negotiating the franchise. It would be the potential that, well, you all just adopted it. It's adopted at 3. You have the ability to go to 5 just like you do with the other ones. So I just want to point, I don't know how much money that is. It's probably a little bit less than some of the other ones. But you could move the water one to 4 as a first step, which would garner a little bit more revenue than what you all have from the 3%. And I think Bill could probably come up with whatever that number was fairly easily. Okay. So can you bring that back to us next meeting, what the franchise fee increases would look at? We certainly can. My interpretation of fee was an actual fee associated with streetlights, so that's what I ran with. I'll be glad to model that. We need that calculation, too, because that would be collected on a LexServe bill, and that calculation needs to be there. But a fourth option could be abolish the property tax and go straight franchise fee through general fund. All right, Council Member Maloney. I want to echo what Council Member Stenner said. I agree that we need to look at the franchise fee because I want everybody to understand those streetlights are up there for one reason, safety. Not just for the people whose front yard is for people who are driving down that road. And there's a lot of apartment people that live in an apartment. There's a lot of people that don't pay for those. And I think the franchise fee may be a way to look at that because everybody should be paying for those streetlights. To me, it goes back to what I said about New Circle Road and places like that. I think they're using some of the franchise fees to pay for that. But I got a feeling at certain times we were paying for those lights out of the fees maybe years ago out of the street light fees. Now, going back to the water fees, I kind of wish to raise that because we pay those fire hydrant fees. And to me, I look at the fire hydrant fees the same way as I do streetlights. I mean, you've got an apartment catcher on fire. The only people who are paying for those fire hydrants are property owners. So I think, to me, maybe we ought to look, because we're looking at $2 million-something dollars a year to pay for those fire hydrant fees. Maybe we ought to put that in the franchise fee if we raise the franchise fee. So I think there's a lot of opportunities out there to make it fair for everybody, and that's the reason why I support looking at the franchise. It may end up not being feasible. It may be something that's not there, but I still think if I were to pick one, it may not be perfect, but I think it would be close to better than what we're paying now. So hopefully we can be open up and look at those opportunities. Thank you. Councilman Brown. Thank you, Chair. I just want to make it clear and make sure I understand whether it's a fee or a tax increase, the general population out there is going to pay for that. This is not a franchise fee that is going to be just given to us from the utility company. This gets passed on on the bill. And I think we need to look at that real close because you have a lot of property owners that have utility bills that don't pay. and a lot of low-income people would be assessed additional fees. You call it fees or whatever. It's all an increase. You call it tax or a fee. But I think we need to be cautious there and see what our group of people are going to be involved, especially the elderly and the low-income people. Thank you. Anyone else on this? All right, sir. Continue, please. Well, I did the same options for street cleaning, but I don't know if the council wants to entertain those. They're very similar. Yes, if you can go through those. Okay. All right, so the same where we have the current situation where property tax is the major generator, but if any shortfall, then the general fund would do it, or if you do a property tax or a flat fee. So here again, if the property tax stays the same, what the anticipated deficit that would need to come from the general fund, 266, would grow to 509. And that is basically the street cleaning program is covering its operating cost. What is getting it into a deficit is capital replacements or additions. So when you replace a street cleaning machine, or if you want to add a street cleaning machine, then that's what's putting it into a year-to-year deficit. On the right-hand side is what kind of property tax rate there would be if each year it was raised by 4%, and whether that would work us out of the deficit. And in this case, it would. that you would start off with a deficit, but then by 2020, you would actually be generating a surplus to save for those capital replacements that need to be done. And then the final slide is what the tax rate would need to be versus a flat fee. And the flat fee, I think, is the number of property owners in the area that is assessed that service now. We have Councilman Maloney. I think at the last meeting I asked if we could look into water quality because, to me, cleaning the streets is a very important impact of water quality and the sewers to keep them from going into the sewers. And I'm just wondering why we couldn't qualify that use as already we're paying an amount. For those to make sure we don't put trash in our water and trash in our sewer, Why would this not be able to be a qualified opportunity to put this into the water quality and use the tax money that we're using or the fee or whatever we're using now to offset this? Well, we can certainly see what rate the water quality fee would have to raise to if it took on this. We're going to have to raise the water quality fee. We all know that. We're going to have to raise it here in a few more years. We raised it just recently. We're talking about raising it again. To me, I'm just wondering how much, if a better deal, if it's a couple, three, four, five million dollars, would be better to put it in one that will constantly go forever. We don't have to worry about raising taxes. And we're just keeping them with the water quality franchise fee. I mean, it seems to me this is a water quality issue. And the main reason we do this is to keep stuff going into our sewers or going into the water, storm waters. And I just think this would be a perfect opportunity. And I'm not trying. I just want to keep it all consistent. And to me, this will be consistent. And I think if we could get that to fine, maybe law could look into it. And the council has another option. But to me, I think it would be a perfect world to put that in there. Anyone else on this topic? I would say in following up with Councilman Maloney, when we did the Water Quality Task Force, they actually created the fee. That was a long-term goal, was to incorporate street cleaning somehow into the fee in the future as part of water quality. So if we can look at that, Mr. O'Meara, I don't have the water quality numbers in front of me, but I believe there's even a surplus in that water quality fee that is potentially going to be used for future projects. project so how would that adjustment could it absorb this or or can you give those options for our next meeting along with the street lights i can do that and and just want to remind the water quality fee was part of the consent decree and there's 30 million dollars that we're obligated to do out of that and capital projects out of the water quality fee i'm not sure the current fee can support that epa capital project so this would be on top of that commitment so but we'll model the the numbers and see. Well, it seems like we're borrowing a lot of KIA dollars, too, so maybe it might be. We do have a few water quality projects that were KIA. Thank you, sir. Great funding. Thank you so much. Next on our agenda is the update on the contingency fund ordinance changes, and Mr. O'Meara, I believe that's you again. Good afternoon. Last meeting, you asked for an update. Contingency fund. and I think included in your packet is the draft ordinance and that ordinance covers the items that were discussed by council and tentatively given the nod by this committee so we started the contingency fund when we had no designation It's approaching 10%. We do have very restrictive, actually the most restrictive that we found in comparison to our peers and other cities on what can trigger use of those funds. So the current ordinance changes the name from the economic contingency designation to a contingency. It explicitly states a funding goal of 10%. It maintains the $50,000 monthly deposit each year and then adds that the Department of Finance at the end of each year will report to this body the amount that would enable the fund to be at or stay at the 10% goal. For eligible uses, it retains the unanticipated or unforeseen extraordinary needs of an emergency nature. It still has the revenue stabilization, and then it adds an unanticipated situation of an unusual nature involving non-recurring expenditures. And regardless of the use, well, two out of the three of the uses, the approval would be we would drop the equation that we're using and enable a majority vote for the council. The exception to that would be in a declared state of emergency. then the administration could use some of these funds in order to meet that emergency and report back to council. And that anybody, whether it's the administration or the legislative body, who wants to make a withdrawal, would submit that to the CAO, and then we would run the numbers and report to the entire body what the request was and what the impact on the fund would be. All right, we've got several signed up. Commissioner, we've got first up, Council Member Farmer. Thank you, sir. This brings us a long way from where we started to where we're almost there, in my estimation. A couple of questions. I'm just going to refer to the codified form in this instance on page 52, item C. Any withdrawal of monies must be approved by a majority of the Urban County Council. This is a far easier trigger point than in the current ordinance. did you think or was there conversation about the difference between a simple majority and something greater than that? Or did you have any thought process on that? We did have a conversation about a supermajority versus a straight majority. Okay. We proposed the majority, but understand your point. And we did have a dialogue as to whether we should propose a supermajority or not. Which would be 10 votes then as opposed to 8? Well, I just want to make sure you've had the conversation, because I think if we pursue this, we're changing everything in a pretty drastic way. And I'm not uncomfortable with the idea of being able to use this tool versus not using it. But just the fact that you had a conversation about the difference between regular and supermajority helps me in my deliberation. then I think the one thing that's not addressed here and would be companion to this is how close are we to the 10% and what do we do to attain that? Or does this, in essence, contemplate getting us there? This requires us to report to you, for informational purposes, what would be required to get to the 10%. And it would be very, in my opinion, it would be very similar to our fund balance discussions we've had for the last three years. Right. then it would be a council decision as to whether you would partially go there or you would reach all the way and obtain that 10%, depending on the finances of that fund balance and the finances of the government at the time. So the reporting is dynamic. In other words, the 10% would change year-to-year, budget-to-budget. So that would be taken into account. I guess I'm back at where we are now versus where we will go to. in how short those numbers aren't in here how short are we of that goal right now in terms of raw dollars i think we're in the nine percent range but i mean uh is that two million bucks more we need a million and a half i think it's like four or five we'll get back i can tell you directly how much that is but i think it's a little over four million 3.1? No. Hold on. Yes, sir. That's perfect. Thank you very much. Just get back. Oh, sorry. Our phones aren't working right. We'll get back to you. I just want to, I mean, to me, and I know what the council thinks or where the deliberation goes, I would like to attain that goal of getting to 10. And I would like to contemplate that personally. And I don't think we're going to have motions. I don't know what today. But, you know, I'd like to get there before we change the style of this because I think that's the goal. The goal was to get to 10, 10%. and then change this, but we can do whatever there's votes for. I'd like to make sure that we plan to get there rather than almost get there. And we've come so far so fast in the last five years dramatically. I just want to make sure we get to it. I think it's just very important for us, and I would like to see those numbers for the next meeting or the discussion in the meantime if that's all right. Thank you, sir. I can get those. If I could comment. Please. The getting to the 10 percent, from my perspective, is not changing in the current versus now. Okay. We're keeping the $50,000 a month regardless. Yes. And saying that our goal is 10 percent. And then right now the administration is recommending how much. The council considers that and then votes accordingly. But don't we have currently somewhere the fact that we need to take 25% of any general fund to roll in there, and that's not part of the new ordinance? It's not. You're correct. That 25% is not. So you're stepping back in one capacity. One step. You're correct. We just would have to have solid decision-making in a consistent fashion to get there. I want to address that when we take action on this. Fair point. All right. Thank you, sir. Thank you, Chair. Thank you. Council Member Scutchfield. Thank you, Chair. Council Member Farmer, good points. Thank you. Yeah, thank you. I have a couple of questions, and I'm looking at the codified form. One of the, and I guess my legislative aide and I both are lawyers, so taking a look at it, a lot of these, defining what's in here. In Section 5, when we say fiscal year may be suspended, I guess defining what the process is for suspending those deposits. I'd like to see that, I guess, the protocol, whether it's the same as suspending or allowing for withdrawal. I guess having language in there that defines that process is something that I'd like to see. And as far as on 7A, when we say unanticipated needs, again with that, I think I'd like a definition. We might know right now what we're talking about, but if this is something that is codified, it's something for somebody to look at and be able to tell on the face what that unanticipated event could be. Does that make sense, Bill? I understand your request. We did have a conversation about that, and feeling like that we couldn't have predicted the 50-year recession, we felt like we couldn't codify and predict what every event could be. And we actually looked at other cities to see, and these were the terms that they used, so that was the reason we chose them. We can be more deliberate if that's the council's will. But we did have a conversation about are we taking one restriction that is currently an algorithm and making another one in parsing of words, and did you really mean that with a comma or without a comma, those type of interpretation issues. Absolutely. And I understand that. I guess my interpretation of anticipated and someone else's interpretation of anticipated can be completely different. The other question I have is not focused on our mayor. It's focused on any future mayor, any issue. On number nine, I'd ask the council to take a look at this. I'm not saying one way or the other whether I feel strongly, but whether we want to allow for one person to be able to make this decision if it were to happen. Because it allows for the mayor in a state of emergency to be able to do it unilaterally. So I think we need to look at that, too, as a council, whether that's something that we want to have in here. And I know that you all probably looked at that as well. But those are my thoughts on the codified version. Thank you, Bill. Thank you for your work on this. Thank you, Chair. Thank you. And before we go on, Commissioner Mayer, back in November, you all recommended putting $4.6 million into the fund to make it funded at 10%. We only did half that at 2.3. So in theory, it should be 2.3. Thank you to our budget analysts for pointing that out and reminding us. So it's 2.3 million. Back to Council Member Farmer's question. Thank you. Council Member Brown. Thank you, Chair. The points have already been raised that I had questions on. I guess it's procedure here. We've got a draft ordinance here. Do we want to, as a council, to go ahead and give Bill and his administration some guidance on some of these? I would pop out first on number, I believe it's 8C, where there's any withdrawals of monies must be approved by a majority of the Urban County Council. I'm of the mind that that ought to be a two-thirds majority instead of an eight. And that way we could, and if I can get enough, I would, I would, I don't know if I can make a motion because we're really not addressing the ordinance, but I think we need to tell the administration if we as a body, you know, and I would, I would support a 10, a 10 member majority on that. So is that a motion? Well, is that in order? Yes. So moved. Okay. Motion by Councilman Brown. Second by Councilman Massadi. any discussion on that? Anyone at all? Okay, Councilman or Farmer. For clarity then, this would take this from a simple majority to a majority of ten. Is that correct? Two-thirds. Two-thirds? Two-thirds. Thank you. All right, and I would just say before we vote that the override of Mayor's veto, you need nine votes or three-fifths. So I'm comfortable if you want to go as far as ten, but I think it should at least be nine for sure. Ten is a little stronger. All right, all in favor say aye. Aye. Any opposed? All right. Councilman Brown. Okay. Well, that was easy. Y'all usually don't give me that much for generous today. Just today. The number nine, notwithstanding paragraph eight above, and I'm not sure what that language is because I'm not an attorney, but in the event that a state of emergency has been declared, the mayor may approve a withdrawal of monies from the fund for use related to the emergency. Why do we even need that in there at all? Because I think the council is going to make the final decision based on eight. Well, I would move that we take that section out and then we can discuss it. Okay, we have a motion to remove section number nine and second by Councilor Marsati. Discussion. Council Member, raise your hand so we don't... Council Member Hensley? I guess while I understand the question removed, number nine, tactically in an emergency, wouldn't we have to come into session to approve the funds? I mean, from a timing standpoint. And would that be the best way to serve the public? That's the only comment I've got. I mean, if we're in a situation where we're in a state of disaster and he needs access, that the mayor, he or she needs access to mayor's funds, emergency funds, would we be waiting two weeks to come into session if it happened on Friday, for example? Okay, next we have Council Member Farmer. Thank you, sir. So tell us why you added this in, number nine, specifically. Well, let me tell you a story. Oh, thank you. Is it 1996? It's Friday morning at 10 a.m., and we're supposed to get one to two inches of snow per hour. And there is insufficient budget to put a purchase order to replenish our salt supplies. Or we needed to expand the purchase order from 90 hours from our contractors to 120 hours, and there was not sufficient dollars to pay for it, nor budget. Now, we do not have that situation now. We have dollars, and we're going to work on moving budgets to cover these. But let's say the city is strapped for funds, and we're sitting on $30 million of contingency fund, and we have an emergency need, such as Friday morning, in order to get the salt delivered on Saturday and Sunday before the East Coast takes it all and before we run into a deficit. Those were the type of things that we had in mind where there was not time for a two-week process for approval. I wanted something a little more scary than that, I guess. Well, it's just the first thing. No, that's good. I see a Humvee coming to get 14 people and bringing them down here or something. This is a dramatic change in this whole area. and I just think we need to we're making some good changes and having great discussion this is one that kind of got dropped in at the very end it's the last paragraph in the potential ordinance and it just undercuts a whole lot of the things for an emergency reason and I understand that and I may even appreciate it but I'm just still council and we're process oriented I can change the story to a tornado well and that would work now you're on board thank you sir, thank you chair Councilman of Scutchfield I think, and thank you, Chair, I think that's one of the reasons I wanted anticipated defined in some way, because to me, anticipate or unanticipated would not be a snowstorm, because we know after the last couple of years that anything is quite possible during the winter months. Replenishing a salt supply would not be something that I would see as necessitating getting into our $30 million fund, having a tornado take down all of Main Street, that would be something. And so it comes back to my question about more of a definition or a parameter of what that anticipated thing could be. And then as far as taking out Section 9, I'm not convinced yet that we should take it out. I don't think we're going to move forward on this today. I think it's a valid discussion to review because I think it is. We've got to be here to make a decision to get something done. I'm not sure yet. Thank you, Chair. Next up, Councilor Lamb. Thank you, Chair. Just for clarification purposes, we as a body can have a meeting called within 24 hours. so um you know there's if there were a emergency situation we wouldn't have to wait two weeks for a meeting so um i think i do have some concerns too i'd like to see what other options are for language for this um i can see the need for it but i also want to make sure that this council and community is safe as well from misuse of funds. Thanks. Thank you. And then Councilman Massadi had actually chimed in on the login, so I'm going to recognize her and then Councilmember Hensley and Akers. Thank you, Chair. Mr. Barbary, can I ask you a quick question? in reference to number nine and i know um we the example was used about if there was a snowstorm and there would have to be immediate action i know i sit on boards and when there is a a vote needed as far as a board direction we get an email or we get a phone call and say you know yay or nay could that not be construed in this case do we have to physically be here As far as open meetings, in order for you all to conduct your business in an official manner, you would have to have an open meeting. And under the open meetings laws, you're not allowed to participate from off-site, unless I think that off-site part is also open to the public and noticed as well. So that's the real restriction on you all being able to conduct business by telephone or otherwise not being here. So that's really the restriction you all would have on even in an emergency situation. I think that the bill's covered most of the stuff with the emergency. And one of the things, just to point out, I think the two-thirds is fine, but this is just taking it out of this fund. There may be another budget amendment step that would need to take place on an expenditure anyway, and that's in here as well. So that's just something for you all to think about is this is just a mechanism for the money to come out of the fund itself. You still have, in a lot of instances, you still have that extra step that you all would need to take in doing a budget amendment at some point in time for the actual expenditure of those funds. I was more concerned about number nine than thinking if there was a true disaster. And for some reason, you know, again, we couldn't be down here. was there another vehicle that could be used if we had to give the authority to the mayor? And I guess there's not. So, thank you. All right, next we have Councilor Blitzo. Well, thank you, Chair. I just have one thought, which is, you know, we're a legislative body. And I think at some point there's a reason why the mayor decides there's a state of an emergency is because he's in the position of the executive to do that and to function as such. And while I'm uncomfortable to a certain extent of saying he gets to approve a monetary fund without us, since we're in charge of the resources, I do think there's a reason that we have one person as an executive in a state of emergency. That's all. Thank you. Council Member Akers. I agree. I think, you know, having actually been through a tornado myself in my house 10 years ago or so now, I think that if there was a true state of emergency in the city, then not necessarily all of us could be here or should be here and should be concerned about that. I also think, from my understanding, that we can't do two readings of a budget request in the same meeting anyway. So I just think it's unnecessary. I appreciate the concern of giving the mayor some kind of authority or power to withdraw these funds. But I don't think or I would hope that we would not, that the city would not elect someone that would declare a state of emergency just to spend money, you know, wildly. I mean, that seems a little bit fearsome unnecessarily. And then as far as unanticipated events, the Councilmember Scutchfield is referring to, and 7A, it's not just unanticipated events. It's extraordinary needs of an emergency nature, examples, natural disasters, calamities, et cetera. So it is defined, I think, to an extent that we cannot define, as Bill said, every single anticipated event because they're unanticipated. So I think that we have to have flexibility in the ordinance. That's what the fund is for, is for flexible emergency expenses. So that's my two cents. Thank you, Chair. Vice Mayor Kay and then Commissioner Hensley. Thank you, Chair. I have a question for Law. The way this is worded, it says, in the event that a state of emergency has been declared, who gets to declare a state of emergency and are there limits on when and how? I think there can be different types. Like this one this past Friday, I think it was declared at both the state and the local level. I think the mayor does have some authority to declare a state of emergency. And if that's something you all would want to clarify or place limits on or have a further discussion on, that's fine. But in many instances, the state will back up what the local government has done with respect to declaring a state of emergency. But to answer your question, I think it can be done at a number of different levels. So it can be done either by the governor at the state level or the mayor at the local level. And so far, as you know, you may not be equipped to answer this question. There aren't any restrictions on that. That is, the mayor tomorrow could say state of emergency. Well, I think there are. Yeah, I mean, I think there are. I can't recite them off the top. But, yeah, I think there are restrictions on when you are supposed to be able to declare a state of emergency. Okay. Well, given that, I think I agree with a couple of the other comments. I don't think that this is likely to be abused. and it may be necessary. I can imagine a situation where it's not possible to convene the council, but some money needs to be expended. So I would not take that out. Thank you. Okay, this is still on the motion to remove Section 9. Councilman Hensley. Having some experience with damage assessment myself, I mean, typically the way a state of emergency is declared is that there is some damage assessment that's done that says damages of so many dollars are accrued before you declare a presidential or a governor's state of emergency. So, you know, I would say instead of removing number nine, maybe put some language in there that says in the event of a presidential state of emergency or a governor's state of emergency has been declared, because as Council Member Farmer was saying, this is a huge change in the complexion of the access to this fund from what it's been. and if it's a governor or presidential declaration, that's pretty significant. They have fallen earthquakes and large ice storm events. So I make a motion to amend number nine to include presidential or governor's state of emergency. I'm going to call that motion out of order because the motion on the floor is actually to remove all of number nine. So let us get rid of that motion first, and if you want to amend after that, depending on what happens, then we can. Okay, so I'll call the question. Well, Council Member Brown's up. At this point, I think I'll withdraw my motion, but I want to clarify why I'm withdrawing it. One is I think we need further discussion on this particular item. And also, I think we need to keep in mind this ordinance right here, and even with number nine not in there, is probably still more powerful than what we have. because I don't think the mayor right now can take any of the fund out under an emergency. So keep in mind, we're not taking anything away from the mayor or the administration by deleting this item, but I think we need to understand that. And maybe, Bill, you all can come back with a little bit different language on number nine. That would be my suggestion, but I'll withdraw the motion at this point. And does the seconder withdraw? Yes. Okay. So the motion has been withdrawn, so I appreciate the debate. councilman hensley did you want to come back to your motion i'm thinking about it okay vice mayor k thank you chair i had a different uh section i wanted to look at that's number five which is the monthly deposit and i know this is uh right now probably not likely to happen but I can imagine a scenario where the revenues for the city, the budget, doesn't grow year to year, and we have reached the 10% goal. And I would not want the city to be in the position of having to put in $50,000 a month to a contingency fund that is not expanding. So I would, I don't know if I want to make a motion, but I would like at least some discussion about possibly inserting a phrase that said, required each fiscal year unless the 10% goal has been met. So if we're at 10%, don't add... All right, I'm getting encouragement. I'll make that as a motion. I'll second. Okay, we have a motion by the Vice Mayor, second by Council Member Brown to insert in the event the 10% has been reached or funds overdrawn for revenue stabilization purposes deposited for that fiscal year may be suspended. Any discussion? on that motion. Councilman Maloney. Let's say we do reach and the budget the following year comes out. I'm just giving an example. We have $350 million. We have $35 million set aside for 10%. The budget next year comes in $400 million. So we have something in writing that we're going to have to put in another $5 million more to get up to the $40 million. Is that going to be in the budget? automatically that the mayor will have to put in $5 million every time we go up to make the 10% or do we keep the $50,000 going to be part of it, and then when we have a surplus or something, we put the money in there. I don't want to be saying that we take the $50,000 because it seems like every year the budget gets bigger and bigger and bigger. And if we do, I don't ever see, unless we start dropping, maybe we'll just take the $50,000 if we start falling. But my question is I don't want to ever see it reaching the goal because every year, unless we start dropping, then we make a motion to take $50,000 out temporary until it starts picking back up again. I wouldn't, unless that's what you meant by your motion, I'm sorry I misunderstood you, but if you're saying if we reach our goals, I still think we should continue to put the $50,000 in there as long, because the budget goes up every year to me. I'll just go back to Commissioner O'Mara's previous statement, Councilman Maloney, that each year the administration can make a recommendation to pay the additional positive goods up to 10%, or the council can make a recommendation out of fund balance or whatever, get it back up to 10%. I think that 10% goal is stated in number six, and that's what we want to maintain. If the mayor chooses not to do it, the council could do it. Again, it would be a budgeting decision. Anyone else on the motion? All right. Seeing none, all in favor say aye. Aye. Aye. Any opposed? No. Okay, so if you'll chime in and vote. accordingly? Members of the committee, of course. All right, that passes. Any other guidance we need to ask the administration on crafting another ordinance and bringing it back for next committee? Anything else in here yet? Okay. seeing none I think there's three changes in here we discussed I have two two that passed and one did not number nine but then if there's any other language you can put in number nine maybe to some of the concerns if there's any tweaking we need to do please bring it back and suggest that anything else on this item seeing that we're out of time and I know a couple of you want to take a quick break we'll move the last item on the next month Councilman Hensley, if that's okay, I apologize. And do I have a motion to adjourn? So moved. Motion and second. All in favor say aye. Aye. We're adjourned. Thank you all.