Music Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. . I'll call this meeting to order for the Budget, Finance and Economic Development Committee for the June 25th, 2024. I'll call this meeting to order at 1.04 PM. And we'll go straight to our agenda. And the first item on the agenda is the approval of the March 19th, 2024 committee summary. That is in your packet. Second. All right, a motion was made and seconded to approve the committee summary. Are there any questions or corrections? Seeing none, all those in favor, please say aye. Aye. Are there any that oppose? Hearing none, that motion passes. Next is the monthly financial update. We have Director Holbrook and Director Luka. Can you please provide us with the monthly financial update? Thank you, Director. Yes, sir. Commissioner Hensley's out, and so I drew the short straw and get to present the opening slides. Just as an overview, we've collected $456 million in general front revenues through the first 11 months of the year, and we've expended $408 million. We also have a $60 million transfer line, and there's more detail on that in the next slide. But on the whole, we have a deficit of $12 million, but there's some extenuating circumstances, which Commissioner Hensley has discussed with you all before and we'll go into on the next slide. Just as you can see, we've come out of our largest revenue months of the year, and we're slowly going towards the end of the fiscal year. Some things to consider as we go into this closing of fiscal year 24. Our revenues have continued to run a positive variance to budget, and largely that's been in our insurance premiums, investment income, and EMS fees. Payroll tax collection has also continued to be strong, but it's not as strong as it was a few months ago, but still performing well. The big negative on our revenues has been our net profits and how that compares with prior year, which in FY23 was our largest collection year on record. There was a pre-funding BA that went through and got second reading on June 13th that adjusts up the revenue budgets for payroll, net profits, insurance, EMS fees, and interest income. And there were also additional expenses that were approved as pre-funding, but they're not yet reflected. And our operating budget shows $25.7 million positive variance. Much of that as savings is encumbered and will be carried forward to 25, but Director Luecker can go into detail on that item as well. So just as a reminder, the $12 million deficit that we've seen is a result of the use of FY23 fund balance and the way that we book that accounting-wise. If you were to back that out and consider how that was actually used, revenue over budget, revenue over expenses, we're looking at a $43 million surplus comparatively. Looking at the FY24 revenues to budget, our payroll withholdings as we continue to see through most of the year have continued to be strong to budget their $5.7 million over. We did, as part of the pre-funding, adjust that budget up by about $8 million. I don't know if we're quite going to hit that, but if you look down to insurance, we're making up ground in that item. $44 million was higher than we anticipated getting for this year, and so that's provided a nice cushion in case our net profits continues to sag a little bit, and if our payroll doesn't meet budget overall. Our charges for service is largely driven by our EMS collections through the rider that we get through the state, through some additional funds for enhanced Medicaid payments, and we've seen additional strong collections in investment income and some other items as well. Looking compared FY24 to FY23, you see much the same, but really the big story here is our net profits compared with prior year where we had almost $74 million, $73, $74 million collected in FY23, and we just haven't seen that level of business activity and collections this year. We've also seen franchise fees continue to sag. I'd say for when we get the collections for June, that'll probably change a little bit as it's been so hot and people have had to use more electricity. And then in charges for service, the item that we see there that is really pulling that down, our detention center bed fees is one of the items that's pulling that down, and also excess fees and collections are dragging that down over prior year. Otherwise, on the whole, you see performance continue to exceed what we did prior year in most other categories. I'm happy to take any questions that anyone may have about specific revenue lines. Otherwise, I can pass it over to Director Luger for the expenses. Thank you, Wes. We got Council Member Fred Brown signed up. Thank you, Chair. Go back to the slide before. The one that's got the 11 months cash flow variance revenue, actual to budget. Yes, sir. I'm looking at, I don't know if that's the one I want or not. Where's the one with expenses? Expenses will be, Director Luker is going to present those. luker is going to present those next okay i think it's expenses that uh this one's okay i think it's expenses i want so that you haven't got that okay sorry thank you council member next we have uh council member shan thank you chair um could you go forward one more slide again the comparison yes and on the charges for service could you explain that in a little bit more detail sure So Charges for Services is made up of about 20 different revenue accounts. And the largest that we see in those is the largest category there is our EMS fees. And we get a supplemental deposit from the state as well for enhanced Medicaid payments. And so that totals, it's going to be in about $14.5, $15 million. dollars and then the other categories the next largest ones are excess fees and collections golf course collections which is about four million dollars um detention center bed fees is about 2.5 million and everything else is smaller and getting smaller and smaller as you go down the line all right thank you thank you chair thank you council member uh wes i don't see anybody else signed up. Okay. I'll turn it over to Director Luecker for the expenses. Good afternoon. I just want to point out that the pre-fund VA that was part of the FY25 budget for the reallocation of FY24 funds, that is not reflected here in these reports that VA did not get approved until June. It wasn't posted until June. So that is outside of what you're going to see here. In our personnel line, we've got about 4% savings there. We've got some vacancies across government that we've got savings in, but a big thing, and I'm happy to report, we have some savings about $1.4 million in overtime between savings with the additional hiring that the jail was able to do and with the fire adding on the positions with the safer grant, so that's reduced over time. In those two divisions, it's about $1.4 million of savings that I think should be mentioned and noted because it is a big feat. They're spending less than they did the prior year and they're spending less than budget on their overtime. In our operating, we have a large amount that has come on to the budget spread with grant match because a lot of the grant match gets booked toward the end of the fiscal the year, some of that grant match, a large portion of that will also roll forward to FY25. So that's about $6.5 million of savings on that 25.6 is in the grant match category. We've also got savings in various professional services accounts. That's across government. We have numerous places where there are savings in professional services. We've got savings in repairs and maintenance. In this $25.6 million is also a little over a million dollars in SALT savings. That we have on a PO and that will be rolling into FY25 since we didn't have a budget for SALT in FY25 because we knew we had the savings. Some of these savings that you see in the 25.6 are already part of the purchase order roll that will happen in July and some of the savings has been reallocated as part of that pre-fund budget amendment. The debt service savings, that 4.2 there, we actually utilized that savings from issuing the bond late as part of the reallocation. So that 4.2 we've already reallocated as part of the pre-fund budget amendment that happened two weeks ago. So overall, we're saving about $42.6 million in our expenses. When you add that to our revenue collections, it's about a $69.1 million variance as of 11 months. If we look at the next slide, which is comparing to the prior year, you'll see that we are spending more, about 10% more in personnel and 10% more in operating than we did the prior fiscal year. Insurance, we also have spent more. We were able to utilize some savings from the insurance fund in FY23, so that reduced some of our expense then, but we didn't have those savings to use in FY24. So that's about $3.5 million more that we've spent on insurance due to not having those savings available. With partner agencies, we've spent more, and with our capital, we have spent more. So we're spending more. We're just not spending to budget is the message here. And just a reminder, some of the savings we've already reallocated as part of the FY25 budget is just not reflected on these slides. So I'll be happy to take any questions. Thank you, Director. Next, first we have a Council Member Fred Brown. Thank you, Chair. Yeah, on the schedule, go back a couple schedules on the cash flow variance expense actual to budget. I think you answered a couple of questions there. The debt service being lower. So is that the debt service, is there any going to be debt service in June? Is that the final number there, that main number? I believe we should be good. Look at that, Chad. There will be or will not be. There already has been some debt service in June. So there's a little bit in June still. So you do have some more expense coming in June on debt service? Yes, but that was budgeted. Monthly payment that we've got? I'm sorry? Is that debt service a monthly payment that we make? It varies based on the bond issue. Okay. And the insurance expense, that should be all for the year, shouldn't it? it? Yes. Compared to the budget? So there won't be any more insurance expense? There may be a slight expense, but the big expense for insurance is already. How about partner agencies? Usually they get all their money, don't they? They do get all their money. And some of that, if you all, some council members were here and some were not, but in FY, I think it was FY23, the library was afforded funds around $700,000, and that was for three fiscal years. So some of that is just rolling forward so some of this is due to the library getting their money over several year time period. My question on these is it doesn't look like June is going to have an overabundance of expenses or any surprising expenses going for the last month. Yeah, I know there was a lot of people scrambling at the end of the year to get purchase orders on to get things taken care of, but we do have additional budget that is in addition to the $450 million you see there, there will be June's budget added on to that as well. So, yeah, yeah, and well, we have June actuals on there too as far as revenues and as far as expenses, we'll have June expenses on there also. So I guess what I'm alluding to is right now we've got a fund balance of, I don't know, where are we at? The 69 million? Right? Yes, well, we've reallocated $30 million of that. Okay. That's not showing up. So what else have we got coming off that 69? We have the $30 million, and then we have the purchase orders that are rolling forward. Okay. I'm not sure on the total amount of the purchase orders yet. I know they're still in the year-end close process right now, but I wouldn't be surprised if we're looking at $10 to $15 million of purchase orders rolling forward. So I guess the bottom line is June doesn't look too bad either for revenues and expenses. Correct. Okay, that's it. Thank you. Thank you, Council Member. Next, we have Council Member Ellinger. Thank you, Chair. Could you go over the 25-6 on the operating? Where were the savings on that one again, if you don't mind? Yeah. So a large portion of that is in, there was $6.5 million that was grant match savings. We've got about $2.2 million in professional services, other in various divisions. We have some savings, a little $2 million in our vehicle repairs and maintenance. We've got about $2 million in repairs and maintenance. And then we've got $4 or $5 million more in other professional service accounts across government. And then a million in salt. I'm sorry, what was the last one? A million dollars in salt, which we are rolling forward to FY25. Thank you. Thank you, Chair. Thank you, Councilmember. Next we got Councilmember Savigni, who is not on this committee. Thank you, Chair, for recognizing me. I actually had the same questions as Councilmember Brown. So, I think you basically said $69 million fund balance, $30 million will show up this month for pre-funding. Maybe another $10 million worth of things that will end up getting booked because it's June. So it seems like we have at least something to look forward to in October as a fund balance. Am I correct in that? You are. We do not know that number and I will not speculate any number. I'm sure you know it pretty close, but it's okay. Thank you very much. Thank you, council member. Are there any other questions? I'm not seeing any, so thank you director and directors for the presentation. Committee members, going back to our agenda, the ARPA financial update is in your packet for information only. The next item on the agenda is the public infrastructure program update. I've been working with Councilmember Dave Savigny and Chief Development Officer Kevin Atkins and Craig Bents who is in his office for much needed update to this program. The presentation today is going to be provided to us by Administrative Officer Craig Bents. But before I turn it over to him, I was going to ask Councilmember Sevigny if he had any comments before the presentation. Thank you, Chair. And it's good to be not on this committee, but actually have an item in the committee. So I really think we worked, Council Member Brown and myself worked with staff on this, trying to refund this infrastructure program, and I'm really excited about the way it came out. And I really appreciate Council's willingness to fund it in this coming budget without actually seeing how the program could roll out as a new one and i um without further ado i appreciate all your work on it um craig and look forward to the presentation thank you good afternoon so this slide just shows some background on the public infrastructure program was created back in 2017 and it was amended in 2022 with some updated policy language the purpose of the program is to to provide interest-free loans with a term not to exceed 10 years for qualified projects for infrastructure improvements essentially that serve the public. Council did allocate $3 million originally to this program in 23, fiscal year 23, and that funding has been fully allocated pending Council approval of two recent applications, one that's been through work session and I think is up for final approval this Thursday and the other will be coming to work session in a couple of weeks. The maximum loan amount through this program is the lesser of $500,000 or 10% of the total project cost and program funds are only for, can only fund hard construction costs. In other words, they can only fund the actual improvements that are in the ground or sidewalks and things of that nature, the funds cannot be used for design and engineering and other soft costs. And the funding is provided on a reimbursement basis. In other words, we ask that the applicants actually construct the improvements and they submit receipts as they go along for reimbursement. This is a list of eligible and ineligible expenses under the program eligible expenses are just above and below ground infrastructure improvements like sanitary sewer and storm water you can see publicly accessible parking in there at transit improvements and sidewalks and trails things of that nature ineligible improvements include things like private utility relocations like if somebody needs to move a private utility line within a site that's typically not covered street lights on private property usually aren't funded fiber and broadband and other private utilities like that and parking that only serves the development that wouldn't be for shared use this slide shows the application review process it's pretty typical we we receive in the chief development officer's office we receive the application with the application fee and there's a staff review that's conducted prior to forwarding the application and the staff recommendation to the economic development investment board that board does review and hear staff recommendations and they make a recommendation to the urban county council at which point we blue sheet it and it comes to council for final review and approval this is just a list of general application requirements some of the some of the big things that we require are evidence of project funding. We make sure a project is fully funded before we consider providing any infrastructure funding. There has to be a demonstrated ability to begin construction within one year of approval so that funds aren't tied up too long through this program. We do ask for written documentation of the project's compatibility with a comprehensive plan and engineering manuals and other requirements. And the reason we ask for that is sometimes we'll receive these applications before these projects receive final approval through planning and engineering and all of their permits. So this gives us a level of comfort that they're at least compliant with our regulations before we approve things conditionally. And finally, we ask for the applicant to demonstrate that there's a long-term job creation through the program for the project. This is a list of the proposed program amendments that are in your packet they're redlined in both the ordinance as well as the attachment to that ordinance we are proposing to emphasize but not require funding projects located within the infill and redevelopment areas those are the areas that you see kind of the older infrastructure in the city so that we do want to place an emphasis on those areas but not limit funding to that because just by way of example for the applications we received we haven't received any within that core area. So this allows us to continue to receive applications within the urban service area. We're also seeking to clarify public infrastructure benefits are for multiple users and that's really specific to the underground infrastructure like sewer and storm water examples. What we're looking to do there is make sure that when improvements are made that they're done so in a way that adjacent users or future users can connect to that so it's not for the sole benefit of the applicant. We are recommending that the current $500,000 funding limit be maintained, although we've added language that the applicant can request and the EDIB can recommend to council that the funding be forgivable with conditions. We're also clarifying in the language, publicly accessible infrastructure, and that just makes it a little clearer what's happening with things like shared parking on sites or trail systems that might go through a site that would be eligible for this program. And we're adding language for infrastructure improvements that improve system capacity and provide a public benefit. And this came up recently with an application you'll be seeing within the next couple of weeks where the applicant is able to remove a lift station from the system and just have a gravity system on the project site, which matters to us because it removes, it takes out some of the cost of maintenance and so on for that system in the area. So essentially they are making improvements that benefit the LFUCG as well as part of their project. And finally, we're asking for allowance to waive limits and conditions for this program in the case of exceptional projects that might result in significant public benefits. And what we mean by that are things like significant job creation or a project that's solving an infrastructure issue that exists in the area that's been there for a while and really needs to be addressed or other significant economic development benefits to the community. And with that, I'm glad to answer any questions. Thank you, Craig, for the presentation and your work on this item. And I do think we have some folks signed up to ask questions. First we have Councilmember Fred Brown. Thank you, Chair. So this is just a presentation to support the change in the ordinance? Yes, sir, that's correct. Is that what we're doing? And I notice in the packet there, there's a few pages there that have a yellow marquee, and then I see where we've got redlined. Are those the same thing, or? It's essentially the same. The red line is the policy language. That's a little bit, it just goes into more detail, but the yellow highlights that you see in there for the ordinance are just kind of the highlights of the big changes that are being proposed. And this is committee structure. Who's on that committee? The Economic Development Investment Board, you mean? Yes. There's 13 members of that committee that are off the top of my head. I'm not sure I can list them all for you. Okay, it would be interesting to, I mean, in addition to what you're asking for here, I would like to have a little bit more background. Also, where is the financial status of the previous year? You've been in the fiscal year through June 30th. How much money you have on hand and what projects you're involved in? And I don't guess this was part of your presentation at all. Sure, so I can answer that if you'd like. Pardon? I could answer that if you'd like. You mean for the program itself? Yes. It was initially allocated $3 million, and all of those funds have been recommended at this point for allocation. And so $2 million were already approved, and the remaining million has been through the economic development. I guess what I'm asking for just maybe an accountability of the funds and the people. Do we have some council members on that board? Sorry? Do we have some council members on that board? We do. Council members, Savigny and Brown are both on that board. I don't know the information coming forward or whatever, but I'd just like to know a little bit more where we're at since we put $3 million in. Is that $3 million in the 25 budget? Is that what? No, I think the mayor actually put that in her proposed budget in 20, was it 21? I believe that's correct, I have that on a slide. Did we put anything in for 25 budget? So yeah, we did, the council did. It wasn't funded in the mayor's budget, but one of the amendments that we made was to add $2 million in funding to it this year in the FY25 budget. Okay, I just think, you know, for public record, we probably wouldn't hurt. If you just want to send it to me, that's fine, but it wouldn't hurt to see where our dollars are, what projects we're in, and is the funding adequate. Okay? If I could add to that, I do have a list of the projects, if that would be helpful. I'm glad to read those out if you'd like. Okay, certainly. So, and these are just rough dates when the Economic Development Investment Board reviewed them. But Keeneland received $1 million, and that was for the development of the Keeneland Paddock Chalet Building, the relocation of the back-of-house operations, grandstand upgrades, and the development of a visitor's center. The total project cost there was $92.6 million, and it was for the purpose of essentially increasing the capacity of their facility. The Lexington Soccer Club also right around the same time in October of 2023 received $1 million. And that was for, of course, the development of the soccer stadium and related training facility. They did create or intended to create up to 150 new full-time jobs as a result of that project. They did receive some other incentives. There was a 1.1% payroll tax refund. I think that went into place for 10 years for that project. And the total project cost for that was anticipated to be about $30 million. And then very recently, this month actually, the Wellington Park Apartments, which came through work session and first reading already, that's a $500,000 forgivable loan for the construction of an access road and related infrastructure from Wellington Way to the project site, which is 3125 Dorchester Place. And they created two full-time jobs, and this is a senior affordable apartment community that's being created. And finally, the one that will be coming before you, it went through the EDIB, but it hasn't been to council quite yet, is Red Draw Liberty. That's located at 2156 Liberty Road. It's kind of adjacent, kind of close to where the bus barn is on Liberty Road. There's a vacant parcel there. And that's for $489,613 in a forgivable loan for sanitary sewer infrastructure improvements serving the 10-acre site. That's also allowing, as I mentioned earlier, that one's allowing the removal of an existing pump station, which is maintained and operated by the LFUCG. So we're going to realize some cost savings long-term from that as well. And this is a 216-unit apartment development at about a $52.7 million project cost. So those are the four projects that are taking up that initial $3 million that was allocated. Thank you. Thank you, Craig, for that update. Next, we've got Council Member Reynolds. Thank you, Chair, and thank you, Mr. Vince, for the presentation. This is all very helpful. So basically we're saying we're redefining what the guidelines are for using this infrastructure program. Previously, and before these go into place, and when we were talking about Keeneland and the soccer field, what were the guidelines for using that money? The guidelines have always been focused on projects primarily within the urban service boundary. They've always been focused on infill and redevelopment if we can receive those applications. So what we've done through the red lines that are in your packet today are just clarifying those points and making it just a little easier for applicants to understand what we're trying to do with the program. And so it sounds like this money is open to either housing developments or economic developments. It's broader than just stimulus of the economy and jobs, correct? Absolutely. We're seeing multifamily uses most recently on this, but I would expect that we would see a lot of non-residential uses as well, that we would see commercial uses and so on moving forward. And so how does the board and how do you decide what is forgivable and what is not? I'm sorry, I couldn't. How do you decide as the board or whomever what is forgivable and what isn't in terms of the applications? Certainly. So the forgivability is purely up to the economic development investment board. That request is made by the applicant and they present that request to the board and the board just makes that determination if the project is of value and can proceed in that way or should proceed in that way and they make that recommendation to council. It's important to note that council does make final approval or final decisions on all of these as well. So if the board did make a decision that council was not aligned with for some reason, the council would have the opportunity to take action when it comes before you for final approval. Okay, and then it says that also there would be an allowance for waiving of limits and conditions in the case of exceptional projects that will result in significant public benefits. That seems very open and vague. If we're looking at making the criteria more strict and something that we can measure, a statement like that seems very open-ended. Sure. And it is, we had quite a bit of discussion on that and it's really tough to quantify what exactly that could mean because it's different for every project or different for every area of the city has different needs for infrastructure and so on. And so I know it's a little bit more generic, but we're looking for significant job creation. If it's more than, you know, what we would typically see for the applications, if it's an outlier in that regard in a positive way, that's something that we would possibly look at recommending a higher funding level or something of that nature. We're also looking at things like if there's a known infrastructure deficiency in the area, if there's a known flooding issue on a street or something that this is taking care of so that we don't then have to put other dollars into it, that would be considered exceptional as well. And then finally, there's just other significant economic development benefits that our projects bringing to the community. And I just I can't even guess what those would be. It would just be on a project by project basis. But those are things that both the EDIB and and Council would consider as we go through the approval process. I understand the need for flexibility. At the same time I get a little concerned with things like this because why one project might argue that they have those criteria and another one you know what how do you pick and choose without following guidelines so I just want to caution against that but thank you very much that's all thank you chair thank you councilmember next we have council member LaGree thank you chair thank you for this presentation I'm glad to see that this has come in front of us and I'm really appreciative of the emphasis on the infill and redevelopment area I want to talk a little bit about that process of emphasis um so that i better understand what that looks like because i constituents had a lot of questions about that as well so when i'm looking through the application review process i know you know the cdo receives the application then there's the staff review and recommendation to the edib and i am curious about like a rubric i know that in our previous conversation as as Councilmember Reynolds was just inquiring, there are some open-ended aspects, but when it says emphasis, I would think there would be a point system, or can you share with me what that staff review and recommendation process looks like and how that's quantified? Sure. The staff review process is literally a narrative staff report we put together. There is not a scoring rubric yet for this. If it gets to the point where it ends up being a very competitive program and we're receiving a lot of applications, I wouldn't be surprised if we're back before you with something like that. So far, we haven't needed to actually attach a score to each application. What I would expect is if we had two applications side by side, and one of them is exceptional in some way, the staff report would reflect that in the recommendation to the board and to the council for final approval. So far, we've been receiving with the exception of the two right now that we have going through the approval process. These have been kind of received one at a time and reviewed on their own merits in a narrative way, similar to how we handle jobs fund in some of our other programs. Okay, well it sounds like there's a chance for there to be a rubric or for maybe in the narrative portion, And as it gets in front of the EDIB or in front of the urban county council to kind of see some of these categories broken down, like what does exceptional look like in the case of this project? How do we quantify that? What is long-term jobs? Like what does that mean in this case? I mean, in one of the projects you mentioned, you said two jobs, but then some housing, much-needed housing, it sounds like. which was so I think seeing some of those areas of emphasis could help us better understand the selection process and help us share with our constituents the ways in which this money is making an impact in different meaningful ways in the in the community because I know that there are some areas that are vague like public benefit how is you know how's that defined sometimes it's infrastructure sometimes it could be something else so I'm wondering if for our sake if there are ways to for us to engage with the narrative that is kind of category-based and maybe that's already how you all write it to the edib but in regard to your earlier comment i think it would probably it's and it's a good a good idea i think what we probably could do with the blue sheet process is also submit the staff report that drills down into all of the program requirements and how they're met in terms of location and ensuring that the projects adequately funded and details on the project and what the jobs are and what that looks like and all the other details that go into that we'd be glad to share that okay that would be I would love to see some of that if it could make sense to your own process too and just so that we can talk about this in a in a knowledgeable way as we're quantifying impact. And then I think that that answers my questions. I was interested too in the idea of exceptional projects, but it sounds like there's some space to talk about exceptional in various capacities. So those are my only questions for now. Thank you, thank you for the presentation. Thank you, council member. Next we have Vice Mayor Wu. Thank you, Chair. Thank you, Mr. Benz, for the presentation. To kind of follow on my colleagues' comments, Councilmember Legree and Reynolds' comments about kind of criteria and how things are selected and how things are deemed as exceptional and forgivable, I don't know if you can speak to the intent of these changes, but it feels like the program as it stood before had a little bit of trouble getting people to bite and getting people to kind of fit into these categories, and it kind of took a while for them to actually fund projects. So do you think these changes which give a little more flexibility and maybe subjectivity to the EDIB to make these kind of decisions is a way to potentially encourage more people to apply for it as opposed to having more either strict or narrow or more objective sort of frameworks or rubric, for example? We hope that the program having a bit of flexibility certainly helps out and encourages people to apply. I mean, that's always the big challenge is getting the word out and making sure that people are aware of the program, but after that, making sure that they feel comfortable going through the process, that it's not too cumbersome. And with this being $500,000 sounds like a huge amount of money, but when you put it in the context of an overall development project, sometimes it won't receive a lot of second looks unless the program is friendly enough to, you know, easy enough to get through. That's not to say we don't provide thorough staff reviews and go through a process for approval and follow up to make sure that everything is being installed the way it's supposed to, but we want to make sure that the project itself or the process itself isn't overly cumbersome to applicants. Yeah, and I appreciate that thought process, and I do share my colleagues' concerns about having either categorical or objective sort of standards. That's how I like to operate whenever possible, but I totally understand that leaving that room, and I think the thing that makes me feel better about it is that ultimately it's going to come back to council as that final decision, so we can kind of weigh in as well if we disagree with the board's decision for whatever reasons. We can kind of give our input there as well. So I think there's flexibility. And I think ultimately everything we do, we can change it if it doesn't work. If we find somehow that this form of decision-making is too loosey-goosey or too subjective or whatever it is and we want to put in a rubric or a criteria, I think we can always come back and revisit it. So I appreciate that. In terms of the emphasis on infill and redevelopment areas, this is defining the infill and redevelopment area as that little map inside the city, right? Have we thought about, because for me, when I think about infill and redevelopment, I don't really like limiting it to that map. For me, infill and redevelopment is anywhere within our USB that can be redeveloped, whether or not it's outside that area. Is there, have there been thoughts about kind of opening up that definition and not just limiting it to that area? Well, the reality of the applications we're receiving is that they're truly, they're using that greater area. But I think the idea with including that map was that it's coincident with older infrastructure that probably needs some upgrades in the urban core. And so it's more in there for a comparison basis to help out with staff reports if we get two applications and one of them's right in that downtown core and one of them's perhaps out a bit further. Maybe we give it a little bit more emphasis to the application that's replacing some of that older infrastructure that's really helping not only that site but their neighbors. Yeah, and the way I interpret the word emphasize too is that it's not the end or be all. If we have two applications, one's within the area, one's without, it's not like yes, definite no. You're still weighing all the different aspects of the projects, and maybe the one outside the area will end up getting it because of various reasons. But kind of just keeping that emphasis in mind. So I think that's all I have. Thank you very much. Thanks, Chair. Thank you, Vice Mayor. Next we've got Council Member Lynch. Thank you, Chair, for recognition since I do not serve on this committee. Thank you for the presentation and I'm glad I'm on one accord today with my colleagues. Because these are similar questions that I had when I was reviewing this information. And I'll just start off with why you're adding the language in the proposed ordinance about emphasis on the map, the white area of the map in that area. And I was wondering why you all decided that change, but you said in your presentation, You all have always emphasized that specific area for infill and redevelopment. Is that correct? So you just want to codify it. We have. The previous or the existing version of the text already speaks to infill and redevelopment as a priority area. So it was just a matter of defining that area. It already has been, that map is well known and adopted for planning purposes, so we thought it made sense to kind of overlay that with this program as well. Okay, in your presentation it says emphasize but not require funding projects located within infill and redevelopment areas. But that's not what the proposed ordinance says. It doesn't include but not require. Is there a reason why but not require is not in the ordinance, proposed ordinance? I'll have to look back at that. They should. In section one, letter B, in the highlighted area, it says with an emphasis on funding projects located within infill and redevelopment areas. that parenthesis statement but not require is not there. And I just wonder why. Right. And that's, I see what you're saying now. And it's typical throughout the ordinance where it'll just be a very abbreviated version of the policy language, but the policy language would further define that. And the policy language is what's posted online for the applicants to see. Is the policy what was redlined in our packet? Yes, that's correct. It's attached to the ordinance. I don't recall seeing the but not require parenthesis phrase. And there are either, and I just want to make sure that folks know when they're applying that they know there's some flexibility there. That it's not mandatory that it occur in the info redevelopment area, but it can occur in other places. Because without that parenthesis, it seems like a mandate that where this project must occur. I see that. that's what you're intending? Well, I think with the emphasis language on there, I think stating emphasis doesn't preclude it from being in the urban service anywhere else within the urban service area, but I think it's a good idea to go ahead and add it if it's not in here. I'll take a look back at that policy language, and I'll make sure that's added before it's published to the website for sure. Okay, I just wanted to make sure, because I noticed that difference, and the way the ordinance is proposed, it doesn't seem like is very flexible at all. It was basically telling them where they can go based on that math. So thank you. I would love to see that corrected. And then I'll just finish up by saying I agree with my Vice Mayor Wu, Council Member Degree, and Reynolds that there needs to be, I feel, a scoring matrix. Because when you gave your examples of what are exceptional projects with significant benefits and impacts, I realize, like they did, that there is good to have wiggle room, you know, but it's also, I think, if things are going to be, people are going to receive equity in their application and scoring, I think it needs to be some kind of scoring matrix. So that you'll have a concrete basis for making decisions, and if people are upset about those decisions, they can say, oh, I didn't score, I scored low here, I scored low there, you know. So just, I think having numerical values will help in that. criteria as far as judging the applications. So I agree with my colleagues on that matter. Thank you for the presentation and thank you for the list of products that have already funded and I look forward to seeing what else is to come. Thank you, Chair. Thank you, Councilmember. Next we have Councilmember Sheehan. Thank you, Chair. Thank you for this presentation and the work on this. I appreciate that some of the projects that have been more recently funded have included housing and we know that for our community that housing is a concern and we are trying to increase housing particularly with infill and redevelopment projects. So my question is why is housing not specifically referenced in the ordinance and the policy like it says in B projects that spur economic development and in E it says that result in direct long term job creation. So why is housing, the wording specifically to housing not included as well? I don't think that we define any particular type of project. I think we try to leave that open to kind of where the infrastructure needs are. And so it could include commercial use, industrial use, residential use, if it's a housing development or so on. Well, I guess then my question is, would there be a reason why we wouldn't change the wording to say something like, for B, projects that spur economic development or increase housing and or increase housing, or on E, a project must result in direct long-term job creation or increase housing, so that we show that there's a clear priority for housing in this work as well? Sure. So is there a reason why we would not include that, I guess, is my question. We could look at that. I consider housing to be economic development, so I considered it kind of already included in that. Here's my concern. If we put housing in there specifically, we might have potential applicants that see that and say, oh, well, mine's not a housing project, and they set it aside right then. Well, I think that's why we could put or housing. I just think that the public sees this fund as something that will help us increase housing. And so for us to then not put that kind of specific language in here, then is not consistent with what we are hearing from the community and what we have expressed in our comp plan and the way that we have even talked about this funding, specifically as a council and a government. So if we have the intent to move this forward today, I would like to make a motion to include language specifically around housing let's hear it yeah alright thank you thank you council member council member Reynolds before you go for a second time I just have some comments that I just want to share and I think some of them speak to the intent for the changes to the vice mayor's point is we have this funding and this money kind of set in idle for a while and then all of a sudden we get to really big applications that kind of fitted fit in this category but we did make some exceptions exceptions with the funding and i think part of the intent would make in these changes was the level of playing field in regards to these fundings uh... buzz bm forgivable or not so i think that was part of it uh... in regards to housing is that we put a lot of money towards housing across this government especially affordable housing and i think the public perception about this fund being specifically only for infield housing infield i think is a concern because i think it's you know it's public infrastructure and i think we have to reinforce that as a counselor that this with this funding is forced for public infrastructure to help these development projects move and i would be concerned that if we but too much wording in it or wording that really specifically uh... focused on housing that we would be spending even more money on housing which i think we can't shoot but i think we do have some mechanisms in place but we do want to do uh... incurred some economic development projects and then the same thing with the emphasis on infield redevelopment i think i think saying emphasis makes the point that we want to focus on infield areas which we know a lot of times is difficult to get those projects off the ground for a variety of reasons so we're not required that the applications be focused on or in the infield redevelopment area but we're going to put an emphasis on those applications so so i i i just want us to keep that in mind and then i will also say that i do understand uh... uh... getting around the subjectivity of the applications in making you know waving limits and restrictions in that sort of thing but i don't think what they were still trying to build this program up to where we get a pipeline of applications and until we do that i think we can uh... i think if we make it too restrictive on the front end and not allow the flexibility for the economic investment board and this council because we can always when it gets to us put the hammer down to say this isn't really what we want to find what we want to do we want to go this direction i think we can do that But I think what we need to, one of the things that we ought to be focused in trying to do is to encourage people to apply, be flexible to applications that come in and try to create that pipeline so we, you know, those are good problems to have as we go forward. So that's just some of my thoughts as we continue to discuss this. And so I'll stop right there. And Council Member Reynolds. Council Member Plumman hasn't spoken yet. I think she's on this committee. Thank you, Council Member Reynolds. My question is with all of these changes and revisions, was there input from developers on the committee about what they would look at something like this being desirable? I don't think we had specifically put a call out for feedback and input, but I think a lot of the feedback came from the developers that we've heard from as council members. members and I also think what Kevin Atkins has heard from folks that have applied or inquired about applying for these funds and the barriers. Okay, good. I'm really glad that it's expanded, it can be expanded besides that one area. Because I think that will be very desirable. And I applaud the intent. We need to make infill and redevelopment easier so there's not that pressure on the boundary. So I think the intent is good. Like you said, we can tweak along the way if needed, if we find the area. So, thank you. Thank you, Council Member. Council Member Reynolds. Thank you, Chair. When we talk about this is a first-come, first-served basis, right? So, I wonder if there's a way to have quarterly reviews or some sort of review so that we can, you know, not just always give to the first ones that come, but compare what we have and the options that are available. Is there any possibility of doing that? Like having, I don't know, quarterly deadlines or something? That's definitely a possibility. The concern would probably be related to just whatever the timeline is for the development project. if they came in and they're, because usually this is kind of the last in funding by design. So if they're ready to go with the project, if they're close to development, we would, or close to groundbreaking, we would probably want to go a little quicker than that. But if they're still going through their permitting process and have a ways to go, I think that would be fine. I think that would give us the ability to look at more options instead of maybe always funding the same type of thing over and over because they got there more quickly, if that makes sense. Sure. Yes, it does. Okay. And then I also will have an amendment when you're ready. Thank you. Thank you, council members. I don't see any other questions or comments. And I just will say that I think the intent is to try to make these changes to the policy. And maybe try to get this reported out. We have a July 2nd work session. If we can report out to council then, I think it will give some time between this meeting and the next meeting to continue to talk about amendments or changes to the policy as it gets reported out. and then also give us some time to get some feedback so with that if there's a a motion to approve these changes uh... be reported out to the pool counseling to this policy i would entertain our motion was made to report these changes out to the to this policy to the pool council uh... and seconded are there any questions to the promotion First up is Council Member Reynolds. Thank you, Chair. I am not comfortable moving this forward with the part under 1F that says, in the event of an exceptional project that creates significantly more long term jobs, or results in a significantly greater benefit to the general public than a typical project, the urban county government may consider waiving some or all of the limits or conditions. I feel that either we should up the limits and conditions and make them more broad or we should stick to the ones that are in this. So I will move to strike that wording from this ordinance. It's one and then if you go to F, It's what's highlighted in yellow but starting at the part that says, in the event of an exceptional project at the bottom of the page, through the rest of the highlighted yellow. So bottom of page 29 onto the top of page 30. Of the packet. So is there a second? That's okay. Hearing none, that motion dies for the lack of a second. Thank you, Council Member. Are there any other amendments or motions or questions to the motion? Council Member Sheehan. I would like to make an amendment for item B to the last sentence that says, spur economic development and provide public infrastructure benefits to multiple users to add to spur economic development or increase housing, comma, and provide public infrastructure benefits to multiple users. Council member, I'm going to ask you, what section? It is section 1B, the last sentence. Okay. Where spur economic development is mentioned, I would like it to also say or increase housing or spur economic development or housing. Okay, a motion was moved. So moved. Second. And seconded to add. housing or housing Kelly is it is it okay are you gonna be able to put that up on the screen okay or housing and I will add that in regard to your question about like your statement about making sure this also is increasing jobs that is an economic development measurement or incentive I will leave E alone so that it would have to it could include housing but it would also have to include jobs So E is talking about job creation, so it would still include job creation and not just be considered housing alone, which is some of the projects that we have that we've already considered include jobs. Okay. All right. A motion was made and seconded to make that change to Section 1, Item B, to include or housing after the spur economic development. or is there any questions to the motion hearing that well that i've got a quick question if it's appropriate and i guess my question is to captain atkins in regards to this change the and my questioning in krig is as well the uh... how do you feel like this may impact applications but this program do you think this course i like the economic development language in there uh... i think it with the amount of development that's coming into the potential not potential the uh... increased urban services area i think a lot of the application we see could go to housing and not necessarily job creation at any level you think it's not you think it's belt those that's probably what we're going to see applications anyway right first any other questions to to change just are hearing none it no others all those that are in favor please say that are there any that oppose all right let's do the this is a roll call vote all right so it looks like that motion passes all right so the new and uh... so so that motion passes so that play which has been amended no i didn't know i think it's it would change the outcome all right so uh... so that motion passes at council member let you have a question to the to the now made a motion are you know if there any uh... any other questions that the now amended motion is on the floor alright see it none all those in favor please say a are there any that oppose here none that motion passes parliamentarian that we need a separate motion to ask for a part of a report out on a lot of the second that's it start that we need a a separate motion to report this out july second uh... yes chair you would not make that motion summer at a motion was made to report this item out july second and seconded are any questions that motion here in a c and none all those in favor please say that are there any that oppose that motion passes thank you all for that that discussion thank you correct for your work on this and and the presentation and and council members of the for your work as well All right, going back to our agenda, the next item. Are you, you got something? Council Member Lynch. I wanted to make a motion to make another amendment. Oh. But I'm guessing it's too late. At this juncture, I can make it later. You're not on the committee. So I can't make a motion even though I'm not on the committee? No? Okay. Okay, I'll do that. Thank you. Sorry about that, council member. All right, the next item on the agenda is economic contingency fund update. And during the FY25 budget, I proposed an increase in our monthly contribution to the economic contingency fund. In addition to the monthly increase, this draft ordinance will recommend additional contributions come from the annual fund balance. We have Ashley Simpson, our Deputy Chief of Finance, is here to present on this item. And she has Director Holbrook, Luecker, and Chad Hancock, our Finance Investment Administrator, with her to help answer any questions. Ashley, thank you for being here today. I'll turn it over to you. Thank you, Chair. We appreciate the opportunity today to speak on the Economic Contingency Fund, where we've been, and where we are today. When we look at the Economic Contingency Fund, in particular when we look at it as far as the dollar value over time, it's easiest to break that conversation up into three chunks. We'll look at it today by the three ordinances that have overseen the Economic Contingency Fund since its inception. The Economic Contingency Fund comes into play in 1996 under the original ordinance. That ordinance is in place for 10 years up through 2006. At that time, it experiences its first significant update to the ordinance. That ordinance goes into place in 2006 and remains in effect until 2016. At that time, we have another update to the ordinance, and that is the current ordinance that's in place today, the one that we're all most familiar with, and we'll talk about that third. When we look at the first ordinance, as stated, this went into effect in 1996, and prior to this we didn't have a formal way in which that we save as a city and as a council. When looking at this ordinance it has several specific stated purposes for why we decide to create an economic contingency fund. The first is that we need sufficient working capital. So at this point in time there's a discussion and some concern over the day-to-day kind of financials of the city making sure that we have cash available for cash flow and that we have that working capital that was needed. We also talk about the ability to address emergencies without borrowing. So we're thinking about perhaps that there's some type of significant event in our community and that we need to have the capital available to provide services to our citizens without taking time to go borrow those funds or to wait for an outside agency like the federal government to assist. We also talk about that we have a need for a stable and equitable tax structure. And I found this one really interesting because we don't really think about the tax structure when we're talking about the economic contingency fund. So what I think they mean here in this ordinance would be that sometimes we can have fluctuations within our budget that may force a sizable tax increase, something like that, in order to be able to balance. This created a fund that we could tap to stabilize that budget without making some kind of vast change to our tax structure. So I believe that to be the intent when we talk about a stable and equitable tax structure in relation to the economic contingency fund. They also, this ordinance talks about providing for a high credit rating to minimize borrowing costs and that's something that we continue to talk about today. A little about the ordinance and the goals that it sets in place. In the beginning in 1996, we set the goal at 5% of the actual general fund revenues. We also state that there's a minimum balance that we don't want to go below and that's million dollars so when we open the fund we contribute four million dollars initially and we work from there this ordinance doesn't have any monthly contributions and it doesn't have a required annual contribution though it does state that we will consider an annual contribution each year during the fund balance conversation during the 10 years that this ordinance was in place and we have 8.3 million dollars contributed to the fund so if we look back at that first slide You'll see here that 1996 we put in our $4 million, and then we have just kind of slight growth up through 2006 when we have our first change to the ordinance. So in 2006, there's a reconsideration of what we need for the Economic Contingency Fund. We have $8.3 million set aside in the fund. We're growing a balance. It's starting to be quite a bit of money. and we look at this and say we really need some parameters around when we use the fund or how we contribute to the fund. So that's what we see come into play in this ordinance update. The main purpose or need for the Economic Contingency Fund at this time is stated as revenue stability. There's a complicated calculation in this version of the ordinance that talks about our top three revenue sources, the insurance premium tax, the employee withholdings tax, and net profits, and it gives some triggers for when you can withdraw funds. There's a calculation. This is what we projected. This is what we actually have. It has to be this many months. Then you can tap your funds. This is also the first ordinance version that we see that allows for suspension of contributions when necessary. So this ordinance starts to contemplate that there may be times in which we would pull from our fund, and in those times maybe it doesn't make sense for us to also be contributing. This ordinance moves our goal from 5% to 10% of revenues, it says of the last completed fiscal year. So usually for us that means we'd be working two years back if we're looking at the last completed fiscal year. It maintains the minimum balance at $4 million and it brings in a monthly contribution of $50,000 a month or $600,000 a year. This version also has an annual contribution that's required and it states that that's 25% of the available fund balance. So each year when that fund balance conversation is had around October, 25% of the available fund balance would be moved to the economic contingency fund as part of that conversation. During the 10 years that this ordinance is in place from 2006 to 2016, we have $24.1 million contributed. So here that's really where we see kind of that rapid growth to our economic contingency fund and really puts us on the trajectory that we're on today of growth and stability in that fund. Our current policy went into effect in 2016. At the point in time that we're considering this revision, we have $32.4 million in our economic contingency fund and we're hovering right there around our 10% goal. At this point in time, the ordinance states that the purpose is to modify and replace the existing policy. We've been under this policy for 10 years. We've had this calculation required with these triggers and we're finding it to be a little too restrictive. There have been some times when maybe we have considered that we may need to use the funds, but these triggers just don't allow us to tap that fund when needed. So instead, this version of the ordinance gives some specific reasons under which we can withdraw funds. And those are listed as for costs related to a natural disaster or other emergency. Again, something happens in our community, we need to respond to our citizens. These funds are there for that purpose. It also names that we could use this fund if there's an unexpected significant liability. So that could be a lawsuit against the city or perhaps an unfunded mandate from our state or federal government. These are funds that could be used for those purposes. Additionally, the ordinance contemplates revenue stabilization in the event of an unanticipated revenue shortfall, as well as listing that there may be unanticipated situations of an unusual nature involving nonrecurring expenditures. When you look at those four together, kind of the thread that ties really is just something unexpected happens. We need to tap this fund. These are dollars that can be used for that purpose. Our target goal remains at 10%, though it says that the previous year's general fund revenues. So we're always looking one year back. We have a monthly contribution of $50,000, and the ordinance says that each year at the fund balance conversation, the finance commissioner will report what contribution would be necessary to meet the 10% goal. But then that contribution isn't necessarily required. It becomes a discussion and then becomes an assignment at that point in time. During the 10 years that this ordinance is in place, I'm sorry, it would be 8, from 16 current. We have $6.2 million that has contributed, leaving us with an FY 2023 audited fund balance of $38.6 million. We also know that during this period that we've had this current ordinance in place that we underwent a pandemic. We had some years that were just unusual. We had unpredictable budget years from FY 2020 to FY 2022. Our budgets were actually based on projected decreases in our revenues or very low growth. And that was based on just what we didn't know to expect from our payroll tax and our net profits. So during these years, we actually suspended our contributions to the fund. However, we also had some unanticipated opportunities during this time. We've had some federal funding that has assisted, helped us balance our budgets and really created some opportunities to contribute to this fund as well. So during this point in time, we had some years where we thought we may have to tap these funds, where we may have to put money in to reimburse ourselves. But in the end, we were able to go back and make those contributions from 20 to 22 and just really keep us on target thanks to those CARES funds. During these pandemic years, we've also had something unexpected. We've had an unexpected increase in our city revenues. So down here in our bottom chart to the right, I've shown our general fund revenues from 2016 to current. If you look at the years from 2016 to 2020, you'll see that it just kind of inches up in a line. It's moderate growth. We would usually experience around 3% growth to our revenue base a year, and we consider that to be moderate growth. That's something we're really proud of when we hit those 3% years and we're able to maintain. However, during the period from 2020 to 2023, we had much larger revenue increases. In fact, from 2020 to 2022, we had a 14.6% growth during that period of time. So something unexpected. I say, why does that matter? Why are we talking about revenues? We're talking about the Economic Contingency Fund. Well, our 10% goal is based on those revenues. So as we're looking at how we're meeting our goals in the Economic contingency fund, this upward trajectory of our revenues means that we have a higher goal that we're trying to meet. So if we look at where we are now and compared to our goals, we have a chart that's in your packet with three lines, the first of which is an orange line. This shows the dollar value of the economic contingency fund over this period of time from 2013 to 2024. And this follows that chart that we looked at very first in the packet, the dollar value. So we started at $23.3 million back in 2013. Now as of our last audit, we had 38.6. If you layer the $600,000 we're contributing this year, we're about 39.2. When we close the year, it'll likely be higher than that once we apply our interest earned and things like that. The next line is a green line. This is the 10% goal, the dollar value of that. So if you're looking at this line in the years that the orange line is below the green line, we're below our 10% goal. In the years that the orange line is above the green line, or right at it, we're at our goal, or we're above our goal. So we kind of go back and forth over time. But that green line today would be above our orange line. So we're not quite where we would hope to be. Then we'll pull in our blue line. And our blue line shows the percent value of our economic contingency fund right now as compared to our revenues. So 2013, 14, 15, right about that time we're considering a change to the ordinance, we are, we're there, 9.8%. We're roughly 10% in where we want to be. We kind of stay there up through those pandemic years. We have some wobbles, and then we have that revenue growth that just puts us on a downward trajectory. So as of our last audit, we were at 8.9%. Looking at our budgeted numbers and using those to project where we are, we're at about 8.2% right now. If we use those budgeted numbers, an estimated contribution of $4 million would be necessary to hit that 10% goal. Once we see where our actual revenues come in for this year, if they're over budget, which we know that we are trending that way, our percent funded would decrease. You might say, why do we save? Why do we want to hit this 10% goal? A city's ability to save money and to put aside funds for emergencies and things of that nature really shows our financial strength and resilience. It provides stability during times of economic volatility. It provides cash flow and available resources if we're in a state of emergency. And it provides a strong basis for our credit ratings and ensures that we have the ability to borrow funds for capital, which is part of our year-to-year budget strategy. Below, I have recommendations from two of our outside agencies that we look to often to see how our policies stack up against other cities in the nation. The first is our Moody's scorecard. Finances account for 30% of that overall score when we go to Moody's and we say how credit worthy are we what what do we look like as far as our ability to pay our debt service Moody's gives rating of a double air triple-a we're a double-a city Moody says that single-a cities should have fund balances a percent of revenues of five to fifteen percent double-a which we are fifteen to thirty percent and then triple-a cities over thirty percent so if that was the only thing that Moody's looked at we would fall more in line with the double or with a single-a city than a double-a city. However, we have a lot of strengths in our economy, a lot of reasons that they pull us up to that double-a level, and a double-a plus if we look at standard and poor. We also have the recommendation from GFOA, or the Government Finance Officers Association, and they recommend that at minimum, general purpose governments or cities have two months of expenditures or revenues placed aside in some type of unreserved account so that would be more like 16 percent all that to say that we think our 10 percent goal is really good but that we should continue to strive towards meeting that 10 percent goal and at this point in time I'll turn it back to council member James Brown speak about the ordinance thank you Ashley I just want to thank you and Aaron and the team in finance for your work on this along with Dave Barbary and Kelly for helping to get us to this point so committee members you have any questions and first up we have council member ellinger thank you chair and i've worked hard but back with dr stevens back in 2006 to really booster this up and i think we've done a good job i've got a question um we suspended it during covid but i thought we put the money aside but how much do we actually spend during that i i didn't think that we actually spend it i thought we put it there and didn't need to do it and i see the wobble but why does Does it go up and go down? Where is that expense? You are correct. We had two different resolutions that were in two different fiscal years. One anticipated using the fund and replacing the funds that we were going to use. So we had said we're going to need to use $6.4 million of the economic contingency fund, and we're going to take our first $6.4 million of CARES funds and we're going to put it back in there. So we put it into the fund, so that's where we hit $42.5 million. We close out that fiscal year, we're actually able to balance. able to balance with a very small surplus that year. And then the CARES funds actually came in and increased that in our ability to save. You may remember that budget had personnel freezes, had a lot of things that we put into place to make sure that we made that budget year and we were able to balance. So we put in the six and a half because we think we're going to have to use it. We don't. And then we pull out 4.6, which left 1.8 million, which was the 600, 600, and 600 that we would have contributed if we'd been able to in those years. Okay. So that's where the wobble was? Correct. Okay. I call it a wobble. All right. That makes more sense. Thank you. You're welcome. Thank you, Council Member. Next, we have Council Member Reynolds. Thank you, Chair, and thank you so much, Ashley. When we talk about what we could use this money for, we talk about emergencies. and around COVID time there's a lot of talk about if we get in a hard spot can we use this money and some of the you know things that we heard were no we cannot use this money. Is it your understanding that if we have a pandemic we have an emergency this is what this money is for the idea is eventually we hope to pay it back but that that's the time that we should draw here if it's needed is that correct? Correct it would be envisioned that perhaps during those times we may have to budget to use this fund and to actually draw from this fund if needed if we're unable to make those budgets work and to replace those funds over time as you stated. So that would be the idea that if we find ourselves in that situation, this is the type of fund that we can can use to budget, balance, draw from if needed. And is there something that stipulates how long we have to pay ourselves back? I would need to look directly at the ordinance. I don't think we state the number of years, but we've always said around three years to pay back. That would be the GFOA recommendation as well. Okay, thank you. I'm very glad that we have this fund. I just hope we know if we get in another emergency, hopefully we never will, that it is available for you. So thank you. Thank you, Council Member. Next we have Council member Fred Brown. Okay, I guess you're all welcome. 1996, 1996 Dr. David Stevens and I put this in budget committee and said it was time to set aside some savings. So we started the ball rolling then. And it has grown and it has been great. And the fact is we really haven't used any of it. I mean that's a blessing in its own right that we've been able to get this far. I like the 10% rule and I think we ought to probably adhere to that, but I have mixed emotions about setting aside a certain amount of money when we're bonding and going in debt for additional monies and I think there should be more of a balance. We didn't have that problem back in the 90s too much on the bonding side of it we wasn't concerned with it but we're starting to bond now a lot more than anticipated and the projects have been worthwhile no doubt about that but still to save is okay but i think to save on top of of additional debt i don't think is good budgeting i want to ask a question there when you're looking at the revenue number what What number are you looking at? Are you looking at total revenue budgeted, including bond revenue? No. This would be recurring revenues. So this is our general fund revenues. What you see above the line in your budget book is what we call it. So no one-time funds, no bonds, none of that comes into play for this calculation. We're looking at fiscal year 25 of 538 million? adopted revenues about 31 it's not quite that high that includes all sources well I think that includes but the bonding was just pulling that for us and my question is is what do we use it what what what are we doing the 10% on what number in this chart i'm using it on this year's budget so i'm looking at 460 million we closed last year with 480 and and we're keying in on that when we look at this year's um actuals and the budget amendment that we just did so it we before we had our last changes to the budget we had a revenue base of 490 so it's going to be right around that does that include bond revenues in there no it doesn't okay so you're recurring revenues okay okay so that's okay that answered my question okay that's all i have thank you thank you council member next we have council member savigny thank you chair um and thanks for the presentation just to um and this is like bond strategy right so to go from an A to a double A to a triple A is there like a standard rate change so so I'm I'm thinking is there a value like what's the real value to us because I think our bond issue is somewhere around will be somewhere in the 30 million dollar we're double A right now but I mean if we got to a triple A do we actually save a lot of money or does it matter that much It would impact our interest rate. Right. I don't have an actual value to bring to you today. However, we're more than happy to pose that question to our bond council. Yeah. I would be interested because it's like, okay, do you save $2 million by putting $2 million in here to get a higher rating? You know what I mean? Things like that. So, but overall, it looks like we probably need to add about 12 million to about 12 million bucks to this to try to be at closer to the 10% rate, somewhere in that range. That would be. Thank you. Accurate looking ahead. Yeah, thank you, Chair. Thank you, Councilmember. Next we have Councilmember Fogle. Thank you, Chair, and thank you. I am not on this committee, and please excuse my ignorance, but I'm trying to figure out whose lens do we look through when we constitute emergencies. And as we're talking about the pandemic, I do recall that there was 400 families that lost their homes. That seems like an emergency to me, or am I in the wrong vein? I just need to know, is it the council that decides if we're in a total emergency? What constitutes an emergency to pull from this fund? I believe that the language in the ordinance kind of looks at a state of emergency. that would be declared by the city or by the federal government. However, there is a lot of discretion in this ordinance, and there is a process that's outlined by which you would request to be able to use those funds. In the year, it begins with a request to the CAO's office, consideration, and then it's brought before council for a vote. So in the end, I think it would be fair to say it's at the council's discretion. What is the state of emergency? However, it's a limited amount of funds. During the pandemic, when we talk about those pandemic years, these funds were tapped to be able to provide some rental assistance type programs. Council may remember better what those programs were at that point in time, business assistance. So we have looked at this fund to provide those types of services during states of emergency in the past. Okay, thank you. Because I do remember, I was just incoming freshman, but I remember housing civilization ran out of money. And so if we had some money, and I know we used some of this money, but still I'm thinking about those 400 families that lost their homes due to not being able to pay their utilities or their rent or whatever, and that's what just washed over me. So thank you, Chair, for allowing me to get that clarification. Thank you for your presentation. Thank you, Councilmember. Thank you, thank you, dear. Yes, I'd like to make a motion to move this on forward to Council, so moved. All right, a motion was made and seconded to move this item to the full Council. Is there any discussion or questions about the motion? Yeah. Council member Ellinger. Yeah, what's the motion here? What are we, what are we moving forward? To move the amendments, the changes to the ordinance to the full council. And there's a draft ordinance in everyone's packet with the amended language highlighted in yellow. Thank you. All right, council member Brown. Chair, the motion is to move this forward to full council, then we'll discuss it? We can discuss it now if you've got a question. Well, I think it's a committee in its appropriate time to discuss whether we want to move this along with a vote, a positive vote, so I'm not sure what you're asking for. So I take it as the motion is to move these proposed changes forward to the full council for consideration out of committee. Well, I'm not in support of everything, so I guess I'll vote no then for the motion. But there's a motion on the floor for discussion and debate, so feel free to- Well, let me clarify, I mean, because I just saw this. I mean, it just came to us and I think you've been working on it for a while. But what was your idea on going from 50,000 to 75,000? Because that's a budgetary impact. I think it's an incremental increase. Since 50,000 is what we're putting in now, the incremental increase would be a 50% increase to 75,000 a month to go towards the fund. And then also a consideration during the fund balance discussion, the 10%. I think what I heard from a lot of council members last year when we had such a big fund balance is why wasn't there a consideration for adding additional funding to the economic contingency fund. And this change will make that something automatic in regards to considering fund balance reallocation. So it doesn't give us any out or any leeway then like we've had before? I think we always have the opportunity with a super majority vote of council to either suspend payments or to do something different. I think we've always had that tool. Well, I feel like the ordinance in place now was effective in the fact that it'd give us a way out. If we didn't get to the 10%, so be it, depending on budgetary figures. But what you're telling me now is that we don't even have a way to back out of it unless we have another vote on something. Then it's an automatic adjustment out of fund balance or out in the budgetary process to get to that 10%. Well, I think without making any change to increase our savings, we will never get to our targeted 10% of the economic contingency fund, 10% of our. I disagree with that because I think any year we can allocate anything we want to that contingency fund. We don't have to have an ordinance to do that. And I don't think the changes here preclude that going forward. Okay. It looks like Dave and Barbary has approached the microphone. Good afternoon. Would you like me to read the language? I think the language this proposed gives an out. because the council still has to make a final determination of the amount. I think the concept would be that if there is, like let's say this year there's hypothetically a $20 million fund balance, it would be incumbent on the administration to present to you all that $2 million of that would be put into this fund. You all would still have the final opportunity as part of your fund balance discussion to talk about whether that needs to be a higher, lower, or different amount. So it doesn't mandate that that amount goes in there. It just mandates that that action be put in front of you all for your consideration as part of that discussion. Thank you. Thank you, Dave, for the clarification. Council Member Ellinger. Thank you. Mr. Barbering, could you come back? It looks like the two big changes are the one from 50 to 75 and then also the number seven. Could you explain that one again on? Yeah, it's what we're just talking about. Basically, during your fund balance discussion, if there is a fund balance, and you're not at that 10% number because then a different element kicks in, but you're still short of the 10%. Hypothetically, you've got $20 million to talk about. The administration is going to recommend to you all, if this ordinance goes forward, that $2 million of that be set aside and put in this fund. As part of your fund balance discussion, you will decide whether you want to go forward with that or not, or whether it needs to be a different amount, the $2 million, a different amount, higher, lower, what have you. But you're not bound to do that. It's incumbent on the administration, however, to put that in front of you all as a consideration for that fund balance discussion. Okay, because at one point it was a 25% of the way back, and we changed that. But now we're going to 10% of the fund balance that they're going to have to recommend it to us. All right, thank you. Councilmember Savigny. Thank you, Chair. I just had two questions. So if this went to 75 versus 50, is that actually going to be a budget amendment that we have to do something with? Because we're basically saying it would start at the first month that we approve this. So do you have to take that account in a budget amendment? Correct. So we wouldn't necessarily be able to begin contributing at that $75,000 level right away. It would require a budget amendment to create the budget for us to be able to do that. Right now we have it budgeted at $600,000. That would move it to $900,000. So there would be a contemplation on how we would fund that, whether it be a pull from fund balance or if we wait until the fund balance discussion to create that additional change and then to move forward at that time. But you are correct that it would require a budget amendment for us to be able to make that change to our actual contributions. Got it. And then, and I just wanted to add, I do think it's, I think it's good to have the conversation at Fund Balance. And it's, it's mostly because I actually don't remember it actually coming up at this past Fund Balance, which was my first one. So I would like to make sure that it's at least discussed and presented. Like this is something that by ordinance, and I may have missed it in the fund balance discussion, the last one. Generally one slide. It shows where we are. It's the same chart that we looked at today. Okay. And there is a dollar amount attached to it. What this ordinance will change is roughly the way that we present that to you. The ordinance says that we will show it as a commitment. So usually we get to the end of the presentation. we give a number and we start talking about that number and how how we want to spend it instead with the way that the ordinance is now written we'll show the current value we'll show the 10 as a commitment um out of that bottom number and so it will be shown like that and then we would make changes to that number if you so desire at that point in time but it wouldn't be here's the number it would be above the line thank you very informative thank you chair Thank you, Council Member. Council Member Worley. Thank you, Chair. I'll be supportive of the motion and these proposed changes were supported during our budget discussions. I know we moved that to fund balance the actual funding source, but to change the ordinance. I think the slide that we see up there is really, really illustrative of where we're going as a government and the delta between how much we are growing versus our historical savings is showing that this city is growing. These budgets are getting bigger and bigger, and this government is growing and needs to grow as this city grows. And so I think then we need to make sure that we are saving the way that we always intended to save. And then I think that the council always has flexibility like we did when we determined that a global pandemic was reason enough to suspend our contributions or even when we intended to use the money to pay for some of our budgeting. And thankfully, we didn't ultimately need that. But the council will always have that. And I think we can also always keep an eye to, I really like the metric in here that if we're already at the 10%, then we can reduce that fund balance contribution or not make it. But I think, too, always keeping an eye to historically, at least the time that I've been here, we've set aside money for different things over the years. The budget stabilization fund started as a worrisome issue because we thought that the state was going to mandate massive pension payments that we couldn't afford. And so we set that money aside, and while it didn't have the same restrictions the Economic Contingency Fund has, we set that aside for an actual purpose, and then when that purpose didn't come to fruition, in consultation with our budgeting folks, with our bond council and advisors, we realized that it was better to spend that money, and then we took it and we used it. So it created a savings for us for a worry that we had that then led to opportunity down the road. And so ultimately, if this economic contingency fund gets so large that we think that we should use the money elsewhere, we always can. But this at least rights the ship a little bit. And again, that slide that shows the delta between those savings and our growth, our city is growing and this government is growing. Thank you. Thank you, Council Member. Council Member Bryan. Yeah, I just want one final thought or question, I guess. This money is set aside. Is it in total in one investment, or how is it invested, and what's our return on that? And is that part of our contribution? The income that's made from our investment is not considered part of the contribution, but it is dedicated to the fund and only to the fund. We have very safe investments here. We do have our investment analysts here to answer any detailed questions you may have. We look at short-term investments here, things like money markets or like step ups. Give me a ballpark figure what we're returning this past year. 5%, 4%? This past year, we have a lot of these funds in a money market right now because our money markets are doing so well. That's not been the case in the past. For this year, we're earning about a million dollars in this fund. On that fund? Between our interest and our investments, yes, for this fund alone. So I think we need to keep that in mind that that goes direct to that fund and that increases the principal amount on that each year. So that's part of our contribution source, I guess, to get to the 10%. So I don't know, I just wanted to clarify that. I think that's the way it's supposed to work. Yeah, yeah. all right not seeing any other discussion all those in favor of the motion please vote aye are there any that oppose hearing none that motion passes um thank you council members the committee members thank you ashley dave and your team and kelly for your work on this and i you know i think this is the way the council's demonstrating that we're thinking about the long-term financial health of the city and i think it's safe to say that the mayor is is also supportive of these changes to this ordinance. So thank you all for that. Going back to our agenda, I think we're out of time. Director, I hope you don't mind if we push you to the top of the agenda at the next meeting. So we'll do that, we'll take this item up at the next meeting. And with that, I'll entertain a motion to adjourn. So moved. Second. Second. All right, a motion was made to adjourn and seconded. All those in favor, please say aye. Aye. This meeting is adjourned. Thank you. Oh, oh, oh.