# Budget, Finance & Economic Development (BFED) Committee on 2026-02-24 1:00 PM - February 24, 2026 > Auto-transcribed civic record · Committee · February 24, 2026 - **Permalink**: https://meetings.lexingtonky.news/meeting/6697 - **Source video**: https://lfucg.granicus.com/player/clip/6697?view_id=14&redirect=true - **Date**: 2026-02-24 - **Body**: Committee - **Last revised**: February 24, 2026 - **Length**: 16,670 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1, with speaker labels folded in from Granicus closed-captioning. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude Sonnet. Speaker labels and 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 (BFED) Committee met on February 24, 2026, at 1:00 PM in the Council Chamber of the Lexington-Fayette Urban County Government. The meeting covered four agenda items, all of which were informational in nature, including a monthly financial update for January 2026, an audit of LexArts and the cultural economy, a presentation on the VisitLex Tourism Improvement District, and a review of referred items. The committee took 2 votes during the session and heard no public comments. No presiding officer is recorded for this meeting. ## Votes and Decisions The committee took two votes during the February 24, 2026 meeting, both of which passed by voice vote. - **Motion 0159-26** — The committee voted to approve the January 27, 2026, Committee Summary. The motion passed by voice vote. No individual roll call tallies were recorded. [timestamp: 0:07:12] - **Agenda Modification** — Vice Mayor Wu moved to remove item number three, the LexArts Finance and Equity Review, from the agenda. The motion passed by voice vote. No second was recorded and no individual roll call tallies were recorded. [timestamp: 1:53:52] Neither vote was a roll call vote, so no individual member votes for or against are available for either motion. ## Monthly Financial Update - January 2026 **Agenda Item:** 0160-26 **Type:** Presentation | **Outcome:** Informational [timestamp: 07:42] Commissioner Hensley and Director Holbrook presented the monthly financial update for January 2026 to the Committee. The presentation focused on the financial status for the month of January, with particular emphasis on Governmental Accounting Standards Board (GASB) adjustments and their effect on the organization's financial statements. The presenters highlighted significant GASB adjustments as a notable feature of the January financial picture, noting the impact these adjustments had on how the financials are reflected in the statements. No additional detail on specific figures, fund balances, revenue or expenditure variances, or the nature of the individual GASB adjustments is available from the provided record. The item was presented for informational purposes, and no vote or formal action was taken by the Committee in response to the update. > *Note: Additional detail on specific financial figures, variance explanations, or Committee questions and concerns is not available in the source data for this item.* ## LexArts Arts and Cultural Economy Audit [timestamp: 23:04] The committee received a presentation on the findings of the Lexington Arts and Cultural Economy Audit under agenda item 0161-26. The presentation was delivered by representatives from Sound Diplomacy, including Amy Sweetall, Caitlin Buckley, Eduardo Saravia, and Matilda Lamer. Sound Diplomacy presented the results of the audit, which examined the economic impact of Lexington's arts and cultural sector. The presentation covered findings related to the cultural economy and included recommendations for strengthening the arts sector going forward. The item was informational in nature, and no formal action or vote was taken by the committee as a result of the presentation. ## VisitLex Tourism Improvement District [timestamp: 1:22:03] The committee received an informational presentation on the concept of a Tourism Improvement District (TID) for Lexington, brought forward under agenda item 0162-26. The presentation was delivered by **Mary Quinn Raymer** and **Tiffany Gallagher**, representing VisitLex and Civitas, respectively. The presenters outlined the TID as a mechanism to support hotel and tourism growth in the area. The proposed structure would be funded through a **2% assessment on hotel stays**, with revenues directed toward initiatives aimed at strengthening the local tourism and hospitality sector. No vote or formal action was taken on this item, as it was presented for informational purposes only. ## Review of Items Referred The committee reviewed items referred to it as agenda item **0163-26**. This item was informational in nature, providing updates on previous agenda items that had been referred to the committee for consideration. No specific key speakers, debate points, or individual concerns are recorded in the available data for this agenda item. The outcome of the discussion was informational, meaning no votes or formal actions were taken as a result of this review. *No transcript timestamp is available for this portion of the meeting.* --- ## Decisions - **0159-26** — passed (0-0): Approval of January 27, 2026, Committee Summary - **Motion** — passed (0-0): Remove item number three, LexArts Finance and Equity Review --- ## Full transcript I love you. ["I Ain't the Same"] ♪ Times have changed and times are strange ♪ ♪ Here I come but I ain't the same ♪ ♪ Mama, I'm coming home ♪ ♪ Time's gone by, it seems to be ♪ ♪ You could have been a better friend to me ♪ ["I Ain't the Same"] ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ Good afternoon, council members, committee members. We'll go ahead and get this meeting started. So I will call to order the Budget, Finance, and Economic Development Committee meeting for February 24th at 1.01 p.m. And the first item on our agenda is the approval of the January 27, 2026 committee summary that's in your packet that was distributed last week. I will entertain a motion. So there was a motion to approve and second it. Are there any questions or corrections? Hearing none, all those in favor, please say aye. Are there any that oppose? Hearing and seeing none, that motion passes. The next item on our agenda is the monthly financial update for January 2026. We have Commissioner Hensley, Director Holbrook, and Director Luker. Commissioner, the floor is yours. Good afternoon, everyone. It's actually just me and Director Holbrook holding down the fort today. Director Luker is home with a sick kiddo, unfortunately, so she won't be joining us today. But we will give you all the information anyway. So this monthly report is through January. We do have some items for consideration for the month of January. We'd like to note those if they are impactful, just so you all know in your decision-making if there's large items that are things to consider. So the biggest thing that we wanted to report to you all, we've made you all aware as we go through of the subpoenas, the subscription-based GASB adjustments that we've had to make throughout the course of the year. This one is really large. It's $7 million, almost $8 million that is coming through. It comes through as a revenue and an expense. So the net effect is actually zero on our financial statements, but it is impacting both our revenue and expense. And you'll see those in our other financing sources and in our capital. So as we walk through the financial statements, those are creating really large pops, both in our revenue and our expenses. And you can see those variances. The BAs, you all will see come through in our next meeting at our three o'clock. So those will follow. They won't actually get second reading until the March financials. So those will be creating large variances for two months on our financial statements. We'll continue to remind you, but as those GASB adjustments continue to happen, they do create some noise in the financial statements. Without those, our revenue would be about $3 million of a variance, as opposed to the variance that you're seeing that's almost $11 million. So you can see how that might create a different decision making environment than what we would be looking at otherwise. So we want to make sure we brought that to your attention. Wes is going to talk a little bit about the payroll collections and the timing that may have been affected by our ICE event. We're going to talk about that a lot today. Personnel is within 3% of budget after January. Again, we're going to talk about that as it pertains to our ICE event. And then our operating variances, again, we're going to talk about some of those large items. There was a large salt variance that had not been expended in January. That was gone as of February, so no worries about that. We had $900,000 in medical expense contracts at the detention center. We used a lot of that, if you all will recall, for reallocation for some of those needs for the ICE event, for replenishment of the salt barns. Portion of it went to that, and then we also had $1 million in contract and encumbered software services that we're working on spent out. So those are some very large items that as we're working through the winter into early spring months, those will be resolved. So those are just a couple of items that are impacting the month of January and into February that we wanted to note for you. And I'll turn it over to Wes. Good afternoon, council members. So as Commissioner talked about, we want to highlight payroll withholding because we've been running a positive variance for most of the year. And then when we start to see this dip, that can be a cause for concern. But one of the things that happened in January is really sort of a confluence of three things. One was the ICE event, which cut down on our ability to process because we were out of office for some days. Delayed some of the mail that we got that came in. We used lockbox processing where a bank processes some of our payroll for us. So as the mail gets slower there, that allows it not to be processed as quickly. And in the third quarter of the year, that's typically our highest collection quarter of the entire fiscal year for payroll withholding. And so any sort of hiccups as we come into a higher budget for that quarter are going to make it fall a little bit. We've already started to see some of this money come back in, in February, and we should be more on par with what we were seeing before the third quarter started as we get into February and beyond. With net profits, we're still benefiting from the delay in the tax filing from calendar year 2024. We had a lot of businesses that ended up filing on the extended deadline or even afterwards. Some things came in late, and we're still seeing some of that. We also started to see a little bit more estimated payment activity in January than we saw last year and maybe expected. So that's a good sign as we start to get head into the filing season in April. And we'll see if that continues to hold. Insurance, insurance is one that we really need to look at the first two months of a quarter. The deadline is not until the end of the first month of a quarter. And so as we see a minor variance there, that's not really too much cost for concern. About $500,000 off of where we thought we would be. We do see more that typically comes in in the second month of the quarter. I have gotten some questions from some people about franchise fees, because with the ICE event and the cold snap, there was some question about when we would start to see that. So if you think about when those events happened and when people were staying at home, you had a lot more gas and electricity usage during the month of January and February also. But that's going to be billed in February and March, and then we'll see that money get distributed to us in either February or March. So we should see some of that start to come in in those months as well. Other than that, property tax is tracking pretty closely. Charges for services, we do have a couple lines in there as we talked about before. That's made up of quite a few different things. Excess fees and collections that we see in some of our constitutional offices is really driving a lot of that positive variance right now. And then just the other thing to highlight, as Commissioner mentioned, is the other financing sources, those lease payments. We recognize the revenue for that, and that's that $7.9 million. There's going to be a budget amendment coming that's going to shore that up, and there's also going to be an expense that nets that to zero. So even though we're showing a $10 million positive variance, we're really at the end of January. If you take out that lease, that other financing sources, variance is really closer to three. And then we should see some of that come back in from what we expected to collect in January, versus what's actually coming in in February, just because of some delays in the mail and processing. Just looking at the comparison with year over year, as we've talked about throughout the year, we've tried to do a better job of making sure we recognize how much revenue is coming in and recognizing that in the budget. So you can see as we look at what we've done year over year, we're closer to $15 million on the whole of where we were performing last year. We only have about a $3 million variance to budget. So we're recognizing a lot more of that, and so that allows us to have maybe a better allocation of funds as we go through the budget process. And so just something to highlight, as you can see how much we were able to grow and recognize in our revenue budget this year versus how much we're collecting over the prior year. A lot of the story's the same with these lines. Insurance, again, is a little bit lower, but we do need to see the second month of the quarter to really see where that's going to come in. And everything else is pretty much a reflection of what we see on the budget side. So, unless anyone has any questions, I'm happy to pass it over to Commissioner for the expenses. I don't see any questions, so you did a good job explaining. Yep. All right, so for our expenses, personnel is right under 3% of our budget. January is a big month. That is our end of year payouts for a lot of our personnel that leave, retire, especially in our public safety. That's a big retirement month for January, especially with our fire and police. We see a lot of those at the end of the year, and that's a big payout month for them. As well as our sick checks go out in January, and it is a three payroll month. So that was a huge month for us as far as personnel goes. We also are seeing some overages in overtime that will also continue into February. Again, with the snow and ice event as that payroll is right there at the end of the month. So we are expecting to see additional overtime continue into the month of February, particularly with our streets and roads, parks, divisions of water quality, and some of the other funds. As we were continuing to take care of some of that extra work that was being done across government and across the city. In our operating accounts, we've mentioned a couple of the variances that were created, some that were in salt. Some of those contracts that were being paid, those are also delayed as far as the payment goes. Just because we have those on doesn't mean we haven't received the bills yet. So we are still continuing to get bills from contractors that were providing those services at this time. And so February, I anticipate, will be a much heavier month for a lot of those expenditures that actually occurred in January. So we're going to keep an eye out for those in February. Expenses will probably be a lot higher as far as the operating expenses goes. We are pretty close as far as our insurance. We actually knew that that was going to come in a little bit higher when we bid our insurance. The bid came in a little bit higher, so we're going to be making some adjustments for that. We did close our new bond at the beginning of February. So that one will come right back into line as soon as we make those payments. We're on target pretty close to partner agencies, and the capital again is the other side of that Sabita adjustment that we've been talking about. So to budget, we're doing pretty well, other than that Sabita adjustment that's creating some noise there. And then if you look year over year, you can see that we're spending more in every category than we did at the same time last year. Does anybody have any specific questions as far as expenses? Yes, ma'am, we have Council Member Savigny. Thank you, Chair, and thank you so much, Commissioner, for the report. Just a quick one. Is there anything that we, because like in a normal business, SALT might be considered an inventory, you know, versus an expense. Do we basically expense everything that we're inventorying typically in a year? I just don't know that answer. So we do, SALT is one of the items that we started with full barns at the beginning of this year. And then as we use it, and we purchase more, it gets expensed as we are purchasing it. So last year when we bought it, we expensed last year that filled up our barns. We started with the full inventory, and then we're actually replenishing it as we go. Okay, is there anything else that's like that? Brine would probably be like that. They have big tanks of brine as well, or not brine, the beet heat, I'm sorry, brine they make on site. But we have some other, you know, golf course chemicals. We do have things that live in inventory accounts and assets, pool chemicals, those kind of things. Great, thank you, that's all I have. Thank you, Chair. Thank you, Council Member. Next, we have Council Member Ellinger. Thank you, Chair. I was going to wait until work session, but you brought it up a couple times. Sure. I was watching the news and they had on there that we'd spent 390,000 for our snow, but I know that number can't be correct. And could you kind of give a little update of where we are on that, since you have brought it up a couple times? Sure, yeah, we've received just a few open records requests. A lot of them come and they're very date driven. We'd like to know how much was spent between this date and this date. The challenge with that is a lot of our bills haven't come in, even to date. For contractors that we know worked at that time period, for things that we purchased that have just not, we've not gotten the bill yet to even pay it. So when we are asked, we provide the documentation for the expenditures in those accounts at that period of time, but they don't reflect the entirety of the expense. I can't show that I've paid it, because I haven't paid it yet. That doesn't mean it's not due, or that we didn't incur the expense. And so, I'm answering the open records request in a responsive manner and in a way that I have to respond to it, but it doesn't actually give the correct information for what the government is actually responsible for and what we're going to end up paying. And I guess with our after action, at some point we'll have a full accounting of what it cost. I know we had, in our last council meeting, we had that walk on that Council Member Brown put on, I think for 800 and some thousand, that was going to replenish. So that's just going to be part of that total, too, as we go forward, so. Yeah, so to Council Member Savigny's point, we started with full barns of salt, and we used all of those. And then we are replenishing also that salt account, so we're buying additional salt. So we had the expense of what we used, we had the additional that we're replenishing now that we're not using, or maybe we will use it, depending on if we have another event, hopefully not. We have the overtime that's hitting, perhaps in February. We have the additional emergency contractors that we've brought on that have not yet billed. We have a number of different things that just have lagged in their payment, and they were not necessarily captured. But they will be in that after action, and they will be in that look back of the entirety of the event. Thank you, thank you, Commissioner. Thank you, Chair. Thank you, Council Member. I don't see anybody else signed up for questions, but I will say, Commissioner, I do appreciate the explanation about the subscription and the lease services that you have to account for, because I did have a question about the other financing sources. Yes. And then, I think Wes alluded to it, but so we may see some offset from the payroll withholding and then the franchise fees. It probably won't equal out, but the franchise fees should be up, and the payroll withholdings are going to be down. It's possible. Okay. Yep. All right, yeah, I don't see any other questions. Thank you. Thank you for the presentation. Thank you. All right, committee members, also in your packet is the ARPA financial update information for, in your packet for information only. The next item on our agenda is the LexArts Cultural Economy Audit. I think some council members were here when we funded this initiative back during the pandemic. We partnered with LexArts to have this done for us. So, President and CEO Amy Sweetall is here to introduce the consultants from Sound Diplomacy, who will be joining us virtually to present the findings of the audit. Ms. Sweetall, the floor is yours. Thank you very much. Hello, as Council Member Brown said, I'm Amy Sweetall, I'm the President and CEO of LexArts. As your official Lexington's local arts agency, LexArts is honored to introduce you to the final presentation of the Lexington Arts and Cultural Economy Audit. The LFUG Council has provided a one-off allocation of $300,000 to Sound Diplomacy to deliver a comprehensive, economic focused creative arts master plan to facilitate economic development and provide opportunities for investment in the wider creative economy. This report presents an opportunity for Lexington to leverage its existing arts and cultural economy and develop the sector to better support artists, retain local artists, retain local talent, and compete with cities, both regionally and nationally, in this rapidly growing sector of the economy. This study was produced by Sound Diplomacy, which uses research and data to demonstrate the economic and social value of the creative industries, and provide strategic planning for cities, places, and communities to maximize that impact. Sound Diplomacy is creating the global standard, demonstrating how investing in culture and the people who make it is the best path to economic and social growth. They provide world class data and evidence so that culture in all its forms is incorporated into how we build, govern, and make decisions to invest in ourselves and in our community. Our presenters today are Caitlin Buckley. She's the global head of projects. Caitlin provided executive oversight for the development of this Lexington report. Eduardo Saravia is the chief economist. I do see Eduardo on there, yes. Eduardo developed the quantitative methodology to measure the economic impact, mapping, and surveys. And Matilda Lamer, she is the senior researcher, and Matilda was the lead researcher for this project. So I'll hand it over to Caitlin, Eduardo, and Matilda, and thank them for being here to present this project. Hi, good afternoon. Thank you. Can you all hear me okay? Excellent. I will share my screen. Thank you for the introduction, Amy. So, yeah, so as Amy said, we're here to present the arts and cultural economy audit that we completed. So we've already been introduced, so I don't need to go through that. So the project. So to facilitate the economic recovery from COVID-19 and invest in the wider creative economy, LexArts was provided with this one-off allocation so that we could deliver a comprehensive economic-focused creative arts master plan. We had a number of goals to be able to do this. We wanted to leverage the existing arts and culture economy, identify specific actions to take to grow and support Lexington's creative economy, to better support artists and retain local talent, to compete with cities, both regionally and nationally, to build Lexington's identity around its creative economy and arts scene, to unify the community, to support the creative economy, and to embed the values and imperatives of DEI into Lexington's creative economy. I'm sorry, I hate to interrupt. Can I just ask you to speak up just a little louder? Of course. Is that better? Yeah, that's better. Okay. So what we did to be able to lead to the final result was a number of stages. So community ideation was our first step. We did a vision meeting with LexArts and key stakeholders to understand what the initial gaps and opportunities were in the local creative economy ecosystem. This helped us understand what kind of conversations were likely to come up throughout the process, where this research was likely to lead, and also understand what those goals were for this project. We undertook a full literature review and regulatory assessment, looking at all the local and regional reports, plans, policies and regulations relevant to Lexington's arts and cultural ecosystem. So this included areas that would either impact it already or could have an impact on the creative ecosystem going forward, and that where there were places that the creative economy should be incorporated or considered in local policy and strategy. We also undertook an arts and cultural asset mapping, which Eduardo will talk you through properly in a moment, so that we could identify all the physical assets related to arts and culture in Lexington. We came out and ran a number of roundtables. I don't know if anyone here today was at those roundtables, but if you were, thank you very much. They provided us with so much information and insight so that we could really hone in on what stakeholders were experiencing, what the day-to-day experiences were, what the long-term vision was for arts and culture, to really cement what we were seeing through the data and make sure that it aligned. And through that also, we did a full survey as well. So this went out to businesses, to people working in arts and culture, and also to audiences and attendees to arts and cultural events. And that meant that we, again, were able to expand on those in-depth conversations we had on the roundtables, and we were able to then see what that kind of broader landscape looked like and understand from more people and be able to capture as much data as possible and information as possible from as many people as possible. We also ran an economic impact assessment, looking at the economic value of arts and cultural ecosystem. Again, Eduardo will talk you all through that in a moment. And a SWOT analysis, looking at all the research and findings that we had, a full compilation of all this information to look at what the strengths, weaknesses, opportunities and threats are to Lexington's cultural ecosystem. And then finally, which Mathilde will talk through shortly, we put all of that information together into a full action plan, which has become the blueprint, hopefully, going forward for developing and maintaining a thriving arts and cultural ecosystem in Lexington. So there are a number of lessons that we learned. We learned that the presence of effective governance structures with clearly defined roles within Lexington's arts and cultural ecosystem is needed to spearhead action for the sector, but there is a clear appetite from the community to transform the local arts and cultural scene. We learned from local artists and arts professionals that produce high quality work with little amateurism, despite limited resources, that there's this really high quality that's coming through. But that there's a need for more professional development opportunities and arts related business support to better empower local stakeholders and enhance that talent retention. The targeted audience development and arts tourism strategies are essential to building a strong arts focused brand for the city and enhancing the promotion of its vibrant arts scene to both residents and visitors is needed. Regulatory changes are needed to streamline the licensing and organization of cultural events. This is something we find in most places that we work, that there's a requirement to simplify these processes to encourage and better support arts stakeholders in their efforts to host more high quality cultural events. And finally, a more proactive approach to diversity, equity and inclusion is needed to better reflect and represent the rich diversity of the local community. So now we'll present some of the key findings from the economic impact in the mapping and Eduardo, I'll pass over to you to talk through these. Thank you, Kathleen. Thank you all for having us today presenting these results. So the first thing is explaining a little bit what is included in this assessment. We analyzed the cultural and creative or the creative economy at the local level, including sectors such as artistic creation or the visual sector, books and press, cultural and natural heritage, cultural education, music recording and publishing, performing arts, visual arts. Some other support industries for this, for the creative economy. And we analyzed the sector in three different layers. The direct, indirect and induced effects or impacts in the local economy. And we also analyzed three different variables. The first one was output, meaning the sales of the sectors or the sector or the subsectors included in the analysis, the employment and the value added. To be also comparable with the national statistics office data and also to be comparable with other industries as well. And we found that the total number of jobs created by the cultural and artistic economy in the local level was annually 7,080 jobs per year. And that represents more or less 4.2% of the local employment. This figure is very important because it's higher than other traditional sectors such as also trade, real estate, which typically are like getting a lot of attention from the national and local public policy. So this is a very important figure. On the other hand, the total output of the sector reached $1 billion yearly and also a GPA of 616.5 million. If you see, let's say that the sectors that are contributing the most to these proportions are the audiovisual sector, books and press and artistic and cultural education. So but that doesn't mean that the rest of the sectors are also very important in terms of the contribution that they provided to the sector. And another important figure here is that the multiple effect produced by the cultural and creative sector is much higher than any other sector in the local economy. In this case, we found that for $1 invested or produced by the cultural and creative sector is generating $1.62 in the rest of the economy. So the ripple effect of this sector at the local level is highly important. Next, please. And here you can see the distribution of the contribution of employment and output at the local economy within the cultural and creative industries. As I mentioned before, the audiovisual sector is one of the biggest contributors to the local economy and on the to the local creative economy. And on the other hand, the book and press sector is also a big contributor. But this is on the right side of the slide, you can see also the trend of the creative industries against the trend of the GDP of the global economy, let's say, at the city level. And you see that due to the pandemic, the trend, I mean, the cultural and creative sector was more affected by the pandemic, making the sector much more vulnerable than any other sectors. So if you see that we are talking about a very important sector in terms of the contribution to the local economy, we also see that there is an important sector that is vulnerable. And face some bigger problems when a crisis like the COVID-19 happened. Next. During the process, we also run a mapping assessment. So we analyzed and identified every asset and business from the cultural and creative sectors in the county and in the area. And we, on one hand, we identified that there is a big concentration in Paget, which is natural because it's the, let's say, the business epicenter of the region. But we also understood that there is like a couple of gaps in terms of the supply of cultural and creative assets across the region that are highly explained in the document and documented. I think this is like an overview of the findings that we had during the process from the quantitative findings. And I pass the floor to Mathilde to continue. Thank you. So based on this research that Kathleen and Eduardo presented, we developed 24 actionable recommendations that are classified by categories. And I will go through them briefly now. So first category is creative economy development. I will go through the recommendations, Kathleen, if you can. Thank you. So first one is to establish oversight of the implementation of the arts and cultural economy audit, which is implementing this strategy and the recommendations. Recommendation two is to review, update and communicate the LexArts strategic governance plan to the public. So this one aims to educate the community about LexArts mission and key objectives and raise awareness around it. Recommendation three, increase cultural funding through existing revenue streams to fund these recommendations. Recommendation four, review and communicate the standardized scoring system to assess LexArts grant applications and advocate for other funding bodies to follow suit. Five, continue to convene the diversity, equity and inclusion committee at LexArts to build out the sector-wide DEI strategy. Next section is professional development, talent retention and business development. Recommendation six, organize workshops, lectures and working sessions to provide professional development opportunities for the creative industries, especially in gaps that we identified, which are marketing, business, financial management, grant writing, internationalization and copyright management and legal aspects. Recommendation seven, establish a creative economy stimulus and cultural entrepreneurship program for cultural businesses. Nine, sorry, eight, advocate for a job creation program and a freelancer support group. This should aim to offer tax incentives to arts-related businesses that generate opportunities for Lexington residents, employment opportunities. Recommendation nine, partner with Commerce Lexington to recruit businesses that fill gaps in the arts sector. So, this would be mainly intermediary professionals like bookers, producers, promoters and artist agents. Recommendation 10, host an annual arts and cultural industries conference. 11, create a database of Lexington arts stakeholders and spaces. 12, create best practice guidelines to make the cultural ecosystem more equitable, accessible and sustainable. So, the guidelines should be about fair pay for artists, for instance, accessibility in cultural spaces and sustainability in arts practices. Next category about licensing regulations and zoning. Recommendation 13, advocate for arts-friendly regulations and licensing processes. Create a one-stop shop for art and cultural permits, licenses, grants and the guides I mentioned. Recommendation 15, ensure the incorporation of the arts as a central component of the new downtown master plan. 16 is to repurpose vacant and underutilized spaces for the arts and cultural sector as, for instance, working spaces, performance spaces, if possible, rehearsal spaces and storage spaces. Recommendation 17, advocate for incentives to retrofit and upgrade existing cultural infrastructure, which we found is sometimes in need of some repairs or adaptation. My apologies. I must stop you there. The presentation time ran out. I guess we have those recommendations in front of us. I just wonder, Amy, was there any other remarks you wanted to say in closing of the presentation before I open it up for council members for questions or does somebody from sound diplomacy want to kind of wrap it up so we can go to questions? Okay. Nothing from our end. Thank you. Okay. Yeah. I'll let you go ahead and kind of wrap up the presentation before we go into questions. So you got a couple of minutes. Thank you. Thank you. I think if you've got all the recommendations in front of you, that was the final part of our presentation. So we're happy to go to questions now for us or for Amy. Okay. All right. So, committee members, you have the presentation in front of you. I think we also shared the executive summary from the report. Are there any questions? Vice Mayor Wu. Thank you, Chair. Thank you all for the presentation. I'm not sure if this is a question for Mr. Williams. I'm not sure if this is a question for Mr. Williams. I'm not sure if this is a question for Ms. Sweetall or for sound diplomacy, but well, I guess I'll go with Ms. Sweetall. There are a lot of recommendations. There are 24 recommendations. Are there any of those that specifically jump out for you as priorities for LexArts and also how are you prioritizing them? Is there kind of an order that you're going in? Yes, absolutely. The takeaway from the study as a whole, not just the recommendations, was just that there is great opportunity, I think, in Lexington for us to really develop strategy and implementation of some of these goals and these ideas in this. Really, that very first recommendation is the one that jumped out the most to me and it was probably what I would suggest as the next step in this process, which is convening a board or a group. I'm not sure what to call it, what it would be, but a group of LexArts, Celeste, the council, city government, a lot of our arts organizations and stakeholders, VisitLex, of course, and all of our wonderful partners that really have a stake in what the arts and cultural sector means in Lexington, to take these recommendations and really guide that force, make a real master plan for how do we move these recommendations forward. In terms of LexArts specific, you know, this is the city's, this is, despite the title on your screen, this is the Lexington arts and cultural economy audit. And so it's important for me to sort of make sure that what LexArts is doing is following these principles, but also to spread that across the city and all of the stakeholders that we can bring together to make these things move forward. I can show you examples, and I think this is probably for another time, but LexArts, in particular, in our strategic plan and in our board governments, has adopted many of these recommendations in our plans moving forward. We are specifically doing, taking measures to take some of those recommendations into account in the way that we are moving forward at LexArts, but we would like to take that out into the open, if you will, into all of our arts and culture sector. Yeah, that makes a lot of sense. It makes me think about the boards and commissions review that we're doing. We also got a ton of recommendations from civic Lex, and then we formed internally a subcommittee to kind of tackle, figure out how to prioritize, rank, recategorize recommendations. So that makes a lot of sense. Do you have a sense of a timeline of when that sort of oversight group will be formed? Well, I'm really coming to you to ask, I mean, is that something that you would suggest from this to take that next step? I mean, that is so, I think that we could probably, we could probably, we've got several folks in the room here today that have expressed support and interest in doing exactly that. But I think that there needs to be a really broad look at who was involved initially, who was called a stakeholder. So therefore, who would those folks want to come back and be a part of this planning group, this work plan. So timeline is TBD, but I don't see that would be any length of, long length of time to make that happen. Yeah. It does make sense that in a lot of ways, like recommendation number one will kind of oversee and inform all the rest of the recommendations. So I think that's the right way to go about it. Thank you. Thank you, Vice Mayor. Next, we have Council Member Lynch. Thank you, Chair. And the majority of my questions I think are going to be for sound diplomacy. And I only have five minutes. So can you please keep your answers short and succinct, please? My first question is, tell me about the demographics of the stakeholder groups. I know you've met with folks in person and online. Who was in that stakeholder group? What are the demographics? Where do they live in Lexington? What's the racial makeup? Things like that. I know you're asking sound diplomacy, and we will keep this short. We made available to you the executive summary, the full report, and all the appendices that list all of those groups and who attended and that sort of thing is available to you. And so we can kind of give you summary right now, but I think that you will have the actual data. Okay. So you're going to send us the full report? Well, that's what I was going to. It is your report. So I was going to ask you if we could publish it on the LexArts website or if you want to put it on the city's website. Either way, we could do that, but we can make that available. It's big. So, I mean, I can print it for you, but also we thought that... Email is fine. Yeah. But we have all of that data available to you. Could you summarize just what it is? Yeah. In terms of the stakeholder groups, we broke it out into various sectors, if you will. There were business leaders, there were artists, there were arts organizations, there were... We had a DEI kind of group where we asked folks that were concerned about the equitable and accessible aspect of the arts and to come give their thoughts on that. So it was taking sectors, if you will, and trying to move that forward. I'm not coming up with all of them on the top of my head, but that's... We were... So, yeah. Zip codes and things like that, I'm not sure I could pull that off the top of my head, but we tried to really do a full swath of folks that would have interest in this plan and this outcome. Awesome. My next question is to Sound Diplomacy. On the slide that's titled, What Did We Learn?, you mentioned that the presence of effective governance structures with clearly defined roles within Lexington's arts and cultural ecosystem is needed to spearhead action for that sector. Break that down for me. What does that mean? Yeah. So there is more clarity required based on conversations from stakeholders in those workshops to find one organization or to find a location for this report to sit and for the recommendations to be implemented. Although there are organizations that are particularly LexArts that are overseeing not just the work, but the support for the creative industries, there was a slight kind of discord in what people were feeling. So having one place for this report to sit for the strategy to be taken on and shared ownership, I suppose, with the city and its stakeholders was what was required. So you're saying that folks were voicing that they're not sure where this should sit, where this work should sit, that it's so many people at the table doing different things, maybe doing the same things. They're not sure where this work should sit in order as far as implementation of these recommendations. Exactly. And that some industries with subsectors were feeling that they worked in silos and that there wasn't kind of one necessarily voice for the entire creative industries. Thank you. That is helpful. Let's see. My next question. It's in regards to recommendation number seven. Establish a creative economy stimulus and cultural entrepreneurship program. Educate me on what you mean by creative economy stimulus. I'll take that one. So we were thinking of a program that would aim to empower cultural entrepreneurs and address the post-pandemic decline in the creative sector's GBA while also fostering long-term growth and innovation of cultural companies. So what we thought with that was to offer financial incentives, tax breaks, maybe grants and entrepreneurship support to stimulate key industries. Especially we identified audiovisual and interactive media, which have demonstrated a local strength. It would also provide business training and access to financing programs and maybe mentorship for cultural entrepreneurs. Thank you so much. Thank you, Chair. Thank you, Council Member. Next, we have Council Member Sheehan. Thank you, Chair. Thank you for the presentation and for, you know, contracting with Sound Diplomacy to do this work for us because I do think it gives us a whole picture. I see from the recommendations there are things that LexArts might do, but then there's partnerships with the schools. Commerce Lex has mentioned I think there are things that should be housed within government. So I think this does provide us that kind of overarching look at what next steps we could take. I have a question about the economic analysis. When, and I apologize, it's a little bit hard to hear on the Zoom, so this may be a repeat of something that you said, but could you talk a little bit about the choice to use the MSA instead of Fayette County specific information in that analysis? Because the MSA would include surrounding areas too. And we talk about regionalism in lots of domains, so I just wanted to hear a little bit more about the choice to use the wider swath instead of just this Fayette County specific information. And that was an original conversation when the stakeholders first met to talk to Sound Diplomacy about where to go there. And we did sort of parse out the pros and cons of do you go with Fayette County specific or do you regionalism? We expressed to Sound Diplomacy that Lexington is really kind of the hub of arts and culture of this region, so the surrounding areas. And so getting economic data really could be meaningful. So that was a choice that we made and we certainly could go back and do a subsector of that to just do Fayette County if we needed to. Okay. Thank you. That's all I have right now. Thank you, Chair. Thank you, Council Member. Next, we have Council Member Reynolds. Thank you, Chair. And thank you, Ms. Sweetall and everyone at Sound Diplomacy for being here today. And for this, I have a few different questions. As I recall, and I may have, I may recall incorrectly, back when we funded this, I thought that we had funded it as a master plan for the arts. When did it change its name and scope? And Sound Diplomacy would tell you that this is a master plan. So it's the plan to then move this forward. This is sort of the language that they use. It's a more updated language than a master plan. So they will tell you that this is what they consider a master plan. It's giving you those recommendations on how to then move forward. But I understand your question. You know, this is not a full scale, you know, take the next step here and take the next step here. And that's a different model. I will say that when we got this back, and poor Caitlin can attest to this, because I was grappling with a lot of that. Where are kind of next steps different than recommendations. And so much of it was, you need to do this, and you need to do this. And I personally sort of pushed back on that, because it was feeling very LexArts focused. That LexArts was to do this, that, and the other. And frankly, we don't have the capacity, funding, or any of those things to do those things. And so I pushed back to say, look, this is a city study that LexArts is willing and able to help facilitate in those next steps. So I'm not sure that it really changed. It just sort of, the wording got changed because it's a more updated wording, and it allowed us the opportunity to make next step plans from it. Okay, thank you. And Sound Diplomacy, I know you've done work in different countries. What experience do you have with cities our size and scope? Yeah, so the U.S. is probably our biggest client, cities in the U.S. So we've worked all over. We completed the State of Delaware Creative Economy Plan the year before last, which was broken down into smaller cities and counties within the state. We have worked in Stonecrest in Georgia, in Monroe in Louisiana, Memphis, Tennessee. At the moment, we're working all across Tennessee, in Knoxville, in Jackson. To be honest, the list goes on. We tend, although we have some larger cities and kind of metropolitan hubs that we have worked in, most of our clients are cities of a similar scale to Lexington. Currently, we're doing a lot of work in Asheville in North Carolina as well. So it's more a city like Lexington that we're actually most, if not kind of as comfortable working in as those larger hubs. Okay, thank you. And help me understand when it says like you're talking about cultural and arts. You know, my background in the arts, we don't usually include things like books and press and audiovisual interactive media when we're talking about the arts. So how, what was the decision in including some of these things in the analysis that you could say are cultural, but you could say a lot of things are cultural. Help me understand the different categories and why. And I guess when I just look at it, it seems really broad to me. Yeah, I can respond that. I think the scope of this project was mostly creative economy and arts, like not only the arts disciplines and sectors, but also including the creative economy in general, which includes, for example, audiovisual and also some audiovisual and book and press, books and press and some other sectors that their main, the backbone of the sector is the creation and not only artistic activities, but the creation, like creative processes, design and so on. So that was like, I mean, that's the concept behind the project, including the creative economy in general, plus the arts. And it's like the perspective of, for example, some other, for example, the cultural satellite accounting in the U.S. includes some of the creative economy sectors. So it's basically that. Okay, I'm out of time. I might circle back later. Thank you. Thank you, Council Member. Next, we have Council Member Higgins-Hoard. Thank you, Chair, and thank you for the presentation. I have a couple of questions. Well, there's actually one question. Originally this plan was due in August of 2024, and then it was given an extension for August of 2025. So to what extent is the downtown master plan that's currently being compiled and managed by the city supersede or duplicate the arts and cultural plan? I sit on the downtown master plan committee as well, and that was intentional so that we could make sure that we used the outcomes and the data that was collected as part of the downtown master plan considerations. And so supersede, I'm not sure, but I know that we are thoughtfully trying to make sure that those two things are cooperative and working together. Okay. Thank you. Thank you, Council Member. Next, we have Council Member Savigny. Thank you, Chair, and thank you for the presentation. I just have a couple of questions. One was why is the data end at 2021? Was that like the last data set that you had access to? Yes. When we were working on the project, that was the most updated data available, the official data. We combine official data with primary sources, but in order to be comparable with the national account system, it's important to use the official data available. So back in the day, it was the last year available for running the report. It seems a while back, so I'm just like I'm a little disappointed in that, so I'll just share that I'm disappointed in that piece. Can I just add to that as well? So we completed the final report in October 2024, so at the time that we were doing the economic impact, it would have been late 2023 into early 2024, so that was the most recent data available at that period as well. Okay. Thank you for that. And for LexArts, so you mentioned capacity, because first of all, I actually do read the reports, so I definitely want to make sure I get the written report. And I'm someone who is very interested in this, mostly because I firmly believe that a strong arts community actually creates economic development just by the factor of people want to locate in communities that have strong other things going on. So that was always my principle, kind of want and desire, so that we could create even a more vibrant and stronger community that would also attract other things coming in. I'm kind of curious if the written report does a good job at explaining on the next steps, like what that capacity is and what's required, so that this council could actually look at it and take some sort of action, whether it be policy-based, whether it be financial-based, whether it be creating a department, whether it's whatever it happens to be. And at this point, we have a department of one, I think, here, and you guys are our community arts partner currently. So I don't know how you envision this actually coming to fruition, but I'd be kind of curious as to your thoughts. Yeah, capacity is the word. I, like I said, once we got this report, it seemed obvious to me that there's a lot of work to be done, right? And knowing that LexArts really only has the ability to do so much in this, to me it seems like the capacity has to be built among our stakeholders. There seems to be a lot of good support to bringing our stakeholders, our arts sector into a space to together plan what those next steps and what the urgencies and what policies we need to push for and what funding we need to push for and all of those sorts of things. I don't think that LexArts or any one entity could come up with that on their own, and that's why I think that really that convening of all of the folks that would know what those next steps and how to create the proposed changes that we want to affect should take place. Thank you. And my final question then is for Sound Diplomacy. In other best-of-class cities, who really takes the primary role in an action plan at this point? Is it a separate nonprofit, independent agency? Is it the city government? Is it a university? What tends to be the most successful? Yeah, we see a range. Typically, it's the city itself. Sometimes a certain position is created in order to be able to see it through that then also benefits not just for this strategy but also the wider industry. So, for example, in Memphis, they created the Director of Creative and Cultural Economy, and that's part of the mayor's office, and that is where the strategy sits. We also saw that in Huntsville, in Alabama, a music office position was created. In Delaware, it's the Arts Alliance that's in charge. So we see either a city connected to either the mayor's office or just the city government in general or the equivalent of an arts council as the owner. Thank you. I'm out of time. Thank you, Chair. Thank you for your answers. Thank you, Councilmember. Next, we have Councilmember Curtis. Thank you, Chair, and thank you for the presentation today. I've got a couple of questions just to follow up on this stuff coming from the perspective of being somebody in Lexington who works in the creative arts. That's how I've made my living, and often when we have these conversations, it does become about the larger economic impact of it, and we start talking about larger organizations. So I'm curious, as we're talking about the next steps and bringing in all of these stakeholders, if you could go into who you picture those stakeholders being and what types of groups, even if you don't have a specific list, who do you want to bring to the table for that? And that was really where we started when we, the original group putting this together, talking about what stakeholder groups we wanted to discuss. And it was really important, and I think you can see in the recommendations how the artists, single artists, made, I think, a very distinct impact on this report because the things like incubators and entrepreneurship and business-focused and creating opportunities and those sorts of things shows up a lot in this report because our artists got a say in all of that stuff. So, yeah, I think it's really important. And when we talk about moving things forward, I think we have to look at, you know, you all know that there's several new venues being planned right now in Lexington. From my perspective, that's a wonderful thing. If anybody's investing in the arts and bringing jobs and bringing opportunities and spaces to do things, I think that's a wonderful thing, and we want to help support those things. However, what we also want to do is make sure that we're all talking to each other. Is it meeting the needs of the community? Is it meeting the needs of the small artists and the larger organizations? All of those things. And to me, by bringing this group together where we can have that single clearinghouse of that hub of disseminating and sharing that information is going to be key not just for our community but for the success of those organizations as well. And I think those small business artists should definitely have a say in this conversation. Our small organizations would say the same thing. You know, those that are doing the private lessons that don't maybe get the big play out in the community or those sorts of things. Residencies, artists in residencies, those sorts of things. So, yeah, when I envision this group, sure, you know, you want to talk to the business leaders and the folks that may have resources to put behind any of this effort, but we want to absolutely include those folks that will use this as an opportunity to further their art and the art sector in Lexington. No, and I really appreciate that, and you're absolutely right that we need to be centering Lexington artists when we're having these conversations, and I think that it's something I want to encourage all of us on this legislative body to consider as well when we're moving forward with this is that oftentimes these conversations can shift towards how do we attract outside business to come in, but Lexington has such a remarkable community of local artists, and we need to be creating opportunities for them to grow and thrive and to stay here in order to succeed because the narrative that I was given when I decided to pursue the creative arts was that if I wanted to be successful, if I wanted to earn a living, that I would need to move somewhere else because it couldn't be done here in Lexington. And so I think that that narrative has unfortunately over time had some truth to it, and when I look at how we spend our money here prioritizing arts, I want to make sure it's going to local artists. I want to make sure that we are teaching folks and making it clear from our perspective and our standpoint that the arts are not a luxury. They're a necessity, that they are part of life. They are not just economic. They are not just policy-based. They are sort of the thing that makes life worth living. And when we're making public policy, my entire life it's felt like the federal government and then the state government as well, the first thing they come for is the arts every single time. And I do not want us to allow ourselves to fall into the trap of doing that. So as we're going forward with this, let's make sure we actually follow through and keep this conversation going. Thank you. Thank you. Thank you, Councilmember. And before I go back around, let me just ask a couple of questions and kind of interject a little bit. Or not interject, just kind of make a point. And I appreciate the questions, and I agree with a lot of the sentiment about how important arts is to our community, our culture, and definitely an economic driver. So I think what we do with this audit plan is important going forward. My thought today was, and we could have had this presented to us in a work session, but I wanted to put this item in committee so we can be informed and make decisions about how this moves forward to our community. I think there is, and Celeste, if you don't mind coming up and just maybe speaking to this as well, I think this is an opportunity to engage Celeste in the mayor's office, LexArts, and other stakeholders and other partners about how we move this forward to make sure all voices are heard and help us address these recommendations. So that's what I'm envisioning today, is that somehow, some way, y'all figure out what the next steps are. And Celeste, if you want to speak to that and what you're thinking, I'd appreciate it. And I think committee members would like to hear it. Well, thank you very much. And I really enjoyed hearing everyone's questions. I think you all had really terrific questions. I've been furiously making notes. So I would really like the next steps to be putting together an event where we can have just public comment, we can have lots and lots of public comment, because I hear from people in the arts community all the time about things they want to say and ways they want to interact with LexArts or the ways they want to improve LexArts or just other programs within the city. So I would love for us to do that and base that around this audit and around these recommendations. So I think if we can have a big public comment. And then I think it would be great if we could amass all those things and then share them with your staff and make plans for the future. But I'm not sure that's ever been completely done where we put all that together. So I'm looking forward to the opportunity for us to bring this to the stakeholders and have some really good conversations about it and make plans. All right. Thank you for that. And that's kind of what I was thinking as well. I think this is an opportunity to just start having a public conversation about this plan, getting some public input, get stakeholders together. And in some ways, to Council Member Savigny's point, update some of the information in this plan because I don't know how some of these recommendations get implemented in our community and if they're relevant. The other thing I'll say too, and this may be a further conversation that we can parse out later, is this document does need to be in its totality accessible. So I don't necessarily know if that's on LexArt's website or if we host it here on the city's website, but I think at some point we've got to make this available so folks can tell us what they think about it and give us some more feedback. I know they were involved in the process, but I think now with the finished product, we need to have their voices heard. I don't have a problem unless anyone has an objection for it to be in both places. Okay. That's possible for it to just be put in both places and that does make a wider net for people to access it. Okay. Okay. Thank you. My intent, committee members, is to leave this item in committee and then address it, come back to it later. But we'll go back to questions. Council Member Lynch. Thank you, Chair. Thank you, Chair. My final question regarding the recommendations is for sound diplomacy regarding recommendation number 19, which is host regular workshops on safety during cultural events. Where did this recommendation come from? Give me some background regarding it, and can you explain it a little bit more in detail as well? Yes. So, it came from the roundtables that we held with local stakeholders, and it appeared in several of them. We had some stakeholders mention that there were some safety issues, mostly for women, from the lack of parking at cultural venues or directly in venues. So, we suggest that the LexArts, in collaboration with Lexington Public Safety Department, could develop some type of safety workshops for venues and cultural event organizers with their management staff, security, and also with artists to create some guidelines and educate the staff and maybe share some material, too, and resources and guidelines. Okay. Thank you. That's very helpful. And then the rest of my questions are data-driven, so I will just wait for the full report and pour through it. Thank you, Chair. Thank you, Council Member Sheehan. Thank you, Chair. Thank you, Ms. Lewis, for being here. I know we have our Director of Arts and Culture, but I also want to note that we have several staff members in our Parks and Recreation area that work within arts and cultural events. So, I want to also make sure, as we're going forward, that we are including them as being represented in these groups that, like, if we form a council or committee or commission, that we're including folks from Parks and Rec as well. Thank you. Thank you for that. Next, we have Council Member Reynolds. Thank you, Chair, and I look forward to reading the whole report. So, I apologize if my questions could be answered by looking at that. I'm still trying to understand when you used the data from the surrounding counties and when you used it for Lexington. Were your recommendations based off of recommendations from stakeholders in Lexington, or did it include the surrounding counties? So, I'm not sure where everyone was coming from, but the organizations were, and Amy might be better placed to answer this question, but the data obviously captured that wider area. So, recommendations were built based on the data, but also stakeholder conversations. The survey, I believe, captured a wider area. So, we also had a lot of data from survey respondents, not just based in the city of Lexington. Right. The survey was distributed out to as many events and locations that we could get it in. So, we were asking visitors to a venue or a location to take that survey when we were there. So, in terms of where they're from, of course, that could have been surrounding. Heck, I guess it could have been. I think one of the first questions was, are you from this area? Anyway, that would probably capture some of those folks in surrounding counties. But also, when we were creating the stakeholder groups, the forum groups, the roundtable groups, we would absolutely include some people that lived in surrounding or businesses that were in surrounding counties. We would include some of those, just knowing that their voice was potentially important in that conversation. Yeah, I guess that just, I'm a little puzzled because we, as LFUCG, funded it for what I thought was for Lexington. So, I guess I'm still a little confused as to why we included a broader area. But my other question is, I was part of the stakeholder meetings. You mentioned something about that being wrapped up by 2024. Was there a reason for the delay of this report coming out now? Yeah, that would be on my end. When we wrapped it up in 24, I had reported back to the city that the report was complete. And we needed to sort of finalize the executive summary, pictures, all of that sort of thing. And really, it just got delayed in that amount of time. And so, we wrapped it up a couple of months ago with all the right pictures and all of that kind of stuff. And so, just now was able to get it on the docket to move forward. And I did want to address what you were saying. I don't want to say that we were getting input from people about, let's say, what's happening in Clark County. What we were trying to capture was the people from Clark County or the surrounding areas that spend money on the arts in Lexington. We weren't asking about money that was getting spent in Clark County. It was where those folks in the surrounding areas are using the services and the arts sector in Lexington. So, that's what we were trying to capture. Okay, that's a helpful distinction. Thank you. Thank you, Chair. Thank you. Thank you, Council Member. I don't see any other questions. So, Amy, I just want to say thank you for the presentation. Thank you to our partners at Sound Diplomacy for their work on this. And then, thank you for the folks from our arts community that showed up today to hear about this update and all the work you do in our community. So, thank you. Yeah, could I just say in closing, I want to thank you because I think this study is helpful and it really will help us guide. And I think even with some follow-up, we can get some even better data, to Council Member Digney's point. So, but yeah, this is your report. This was funded by the council. And we, as LexArts and those representing the arts sector, really appreciate the opportunity to have this data to make those decisions to move forward. So, thank you. Thank you. And like I said, we'll keep this item in committee and hopefully come back soon with some updates about next steps. We'll go back to our agenda. And the next item on our agenda is the VisitLex Tourism Improvement District. This presentation will be given by VisitLex, our tourism, on the Tourism Improvement District by VisitLex. President Mary Quinn Raymer is here along with the presenter, Tiffany Gallagher, who will be presenting on behalf of the hoteliers in VisitLex. So, Mary Quinn, I'll turn it over to you. Good afternoon. Thank you so much for the opportunity to be here today. VisitLex is pleased to be here today in support of 13 hotel properties that have come together to talk about the state of the industry and growth for the future via a tourism improvement district. It is for hotels and by hotels. And it is my pleasure to introduce Ron Van Heron, who is the general manager at the Marriott Gryffingate, to kick us off with a few words. And then Tiffany will walk you through the deck. Thank you, Mary Quinn. My name is Ron Van Heron. I'm currently at the Marriott Gryffingate. I was for almost 12 years at the Hyatt, so I've seen both sides of downtown and not downtown. I can narrow down pretty quickly why this is so important. If we don't do this as these hotels, we won't be maintaining status quo. We'll actually be losing towards our competitors. Over 200 cities currently have something like this in place, and more of them are discussing this. It means more money for them to promote their city, to promote their area, their festivals, their tourism. VisitLex does an incredible job with the funds that they have, but it costs money to keep you at the foreground. If we don't do this, we'll lose ground. And I will tell you, and I'll go back to one thing, we just hosted a marvelous event, RCMA, which is the, if you don't know, it's the biggest religious trade show in the country. We hosted over 1,000 meeting planners in the city to show them how wonderful Lexington is, not just the convention center, not just downtown, but just the whole area. And we brought these people in, and I can speak only for my hotel, but in the last ten days since they have left, we have gotten over ten leads, requests for proposals, requests for information from groups, from religious groups, that have not been to Lexington before, which would be really great if you can book some things. And I'm sure other hotels have seen the same thing. If we don't do this, funds for something like that will no longer be available. We know that Louisville does several a year. Chattanooga is doing it. Nashville is doing it. Other cities that we compete with are doing this. And we will lose ground towards those kind of trade shows that we can't host and we can't show on this kind of scale how wonderful Lexington is for a group, for their attendees, and to spend money here. And it has an enormous economic impact, not just for the hotel industry. It will hit restaurants. It will hit the retail. It will hit horse farms, bourbon. Just in general, it will continue to generate jobs. So I think it's incredibly important that we move forward with this because it will be helpful for the industry, Lexington as a whole, and I think it will grow from just the 13 hotels to involve all of them eventually. That's all I had, so I'll give it up to you. Thank you. Good afternoon. Tiffany Gallagher with Civitas. We are a legal consulting firm. We are the national expert in tourism destination funding models. And so I'd like to just walk you through a brief presentation on the proposal for the model, and then we can move into Q&A. Just beginning with the economic impact of tourism, and so a key economic driver for jobs, spending, tax revenues, and the hotel numbers that you see below are total occupancy of the hotels in Lexington, and then their ADR, which is an acronym for average daily rate of hotel sales, $124.42. And then REVPAR, which is their revenue, so hotel revenue per available room, so this is spread across even unoccupied rooms, at $75.47. And I'll just make a quick note for you all that all of these numbers fall below national average. This is a quote from Jack Johnson. So Destinations International is a national association that represents destination marketing organizations across the country. I'd like to begin with this. I think it sets the tone for these types of initiatives. In today's globalized, networked world, every community must compete for its share of the world's visibility, its share of attention and respect. Every community must compete for its share of the world's tourists, consumers, and available talent. Those communities who fail to compete will lose ground and be left behind. We measure, as a firm, our initial role in these types of projects is to measure the sufficiency of destination resources relative to driving economic impact and demand into a destination. We take a look and evaluate the industry funding resources. We compare those resources to other destinations' resources. And then we also take a look at how that is set up. So the foundation for the funding and resources, is it based on economic activity or is it based on appropriation? We take a look at Lexington's available resources for destination promotion and we took a look at a competitive set. And you can see, measured against competing destinations, Lexington is on the lower side. The 10.5 million representing state allocation of collected hotel tax funds as it relates to competitive set. Of course, other states and other destinations have different models. You do not see Louisville listed here on this particular list, but I think it's notable that Louisville's base destination marketing organization budget is about 26 million. They have a tourism improvement district that generates 8 million per year. Memphis, shown here, that 7.1 is also a tourism improvement district that has been in place for the better part of 10 years. Just a snapshot of VisitLex's budget, and I'd like to draw your attention to the purple bar above blue and green. That represents federal funds, mostly ARPA funds. And those funds are set to expire. They must be spent in their totality by the end of this year. That fund averaging about $2 million a year, which has financed groups, meetings, incentives for occupancy and demand generation in Lexington. And so that fund will not be available for future years. Just a slide on Louisville's tourism improvement district formed in December of 2022. Formed the 200th district in the country, the only district in Kentucky. The assessment rate, I'm going to go into the mechanics of this in just a moment, 1.5% of gross short term room rental revenue. So 1.5% on the checkout folio. So average daily rate of here, 124, and it would be an additional percentage on top of that passed on to the customer. And their key initiatives being to promote regional leisure trail, sorry, leisure travel, working on public relations programs, dedicated funds to support incentives by offsetting costs associated with securing strategic industry events, groups, meetings, convention, research new markets, and consolidated business advocacy for workforce development. How it works, and so this is a model that began in 1990. A group of hotel owners in California identified the business improvement district model, known in Kentucky as a management district, I know you all have a local management district. They identified that as a good supplemental vehicle for activities that would support businesses. So they sought to form a management district or a business improvement district for, but not for all businesses, just for hotels. The very first tourism business improvement district formed in 1990 in West Hollywood, California. Couple of key differences, I know you all are familiar with management districts, it's a parcel based assessment. And so we would use the same vehicle available to you all here in Kentucky. However, there would be a key difference. There still would be a separate entity, legal entity set up to manage this district. And it is required by law that that is managed by the owners and operators of the businesses in the district. But the hotels here would pass on the liability of the assessment to the consumer. And so they would be assessed as parcels, but pass on that assessment to the consumer. So the tourism property pays the assessment, is collected by the city, and it is managed by that district board of directors. And so separate legal entity made up of hotel owners or operators. Just some key elements of the Kentucky Management District Law, you have this slide available to you. So this is the legal authority that we seek to use to form this district. It does require a petition signed by owners or operators of the properties in the district. There is a legal threshold that must be met in order for us to bring it to you all. This presentation is just the beginnings and an introduction to the concept. We are not at a position where we're ready to bring it to you more formally, but more for socializing the concept and talking it through. Taxes versus assessment. So the industry has chosen to use these assessment models as a supplemental vehicle for activities because it is different than taxes in a couple of key ways. And so if you were to ask a group of hotel owners or operators if they would support a new hotel tax, most likely you would hear a very loud no, right? This is a bit different in that it is a public-private partnership. It is required by law to be managed by the hotels or their designees. And the assessment model itself has key insurance policies the taxes do not have. These assessments must be initiated by the industry. They must be approved by the industry. They must be spent in accordance with a plan that those business owners have approved. There's legal accountability to that plan and there's also the ability to dissolve these districts if they're not working or being adhered to by the industry. The law has a procedure to petition the city to dissolve them if they are not in line with the structure approved by the businesses. Taxes do not have those key insurances. They are generally managed by the government and in this case by the state government. Overall lodging charges, so I mentioned that this would be a pass through to the consumer. So just taking a look at where Lexington sits in the overall percentage of fees on the checkout folio. So 16% roundly is where you sit, same as Louisville. Proposal is for a 2% addition on the checkout folio that the businesses would be passing on to their consumers. And you can see that you all live somewhere in the middle of your competitive set as it relates to the all in rates on the checkout folio. Overview of the district plan as it's proposed. And so looking to create a management district for a term of seven years, program for seven years. An assessment being a 2% transaction charge on gross short term room rental revenue. So this is different than a traditional management district where the assessment is on the value of the parcel. This is related to the activity and the programs for the business. It is for all lodging properties within a radial five miles of the city center of Lexington with two or more meeting rooms and at least 2,000 square feet of meeting space that also includes a full service restaurant. So this is for the large full service groups, meetings, conventions, hotels only. So a list of 13 hotels at this time. Collection, the board of directors may enter into an agreement with the local county government for collection of the assessments. So the city being the professional in the space of collection and enforcement would hold that role. Annual budget estimated to be around the 2 million, fluctuating with room sales of course. And the program primarily being sales, marketing, destination development, special event support. There's a administration component and then also a savings account for the district contingency reserve plan for the district. Board composition as required by law, two-thirds must be represented by property owners or their representatives. Nine directors is the proposal of board composition. Timeline here, we have a timeline that was a proposed timeline at the beginning of the project. We have been a little behind on schedule and so we're not quite here yet. So the months that are listed were ideal, but we're just now bringing this to you. We have not formally started the approval process with the hotels, which is to obtain signatures and support. Again, threshold being at least 33% of the owners of the property within the district. So at least 33% by number of parcels, coupled with over 51% of assessed value of parcels. In order to meet the minimum requirement to move that forward. We would then follow a cadence dictated by you all. This is an estimate, this would be a formation of district by ordinance. And so we would work obviously with the city on that piece and we have started to socialize that, but we do not have documents yet. A noticing procedure for a public hearing, so opportunity for those who are affected to be noticed and also have the opportunity to comment. Board of directors would be established post passage of ordinance if that were successful. And that board would be responsible for putting together annual budget, noticing the assessed parcels, and there is an opportunity for contest on an annual basis for that proposed budget. The ideal begin date for this would be lining up with fiscal year somewhere around July 1 of this year. We do have a number of folks available for other questions. We have the team at Visit Lux that is available, and some hotel partners that are here, and any technical questions for me. So I'll open it up. Thank you for that. Thank you for the presentation. Thank you for the way you kind of rolled through it when you seen the time ticking down. Before I open it up to questions, Mayor Quinn, is there anything that you want to add about today? And maybe about, is there a request from this committee? Is there any action you'd like us to take today, or is this- There's no action request for today. This was, as Tiffany mentioned, to socialize the concept for you all. Our next step, we have been talking with hoteliers over the last nine months. And so our next step is the petition process, and that's what we'll be doing next. Okay, thank you for that. And first we got up is Vice Mayor Wu. Thank you, Chair. Thank you for the presentation. Ms. Raymer, I got a few questions for you. So was this tourism improvement district essentially initiated by the hotel owners? Yes, as you might imagine, we meet routinely with our hotel partners, and we oftentimes have them segmented by groups. So we spend time doing a lot of conversations with our full service hotels, particularly on business that is good for our larger hotel properties. They have benefited and seen the direct impact of having ARPA recovery dollars working on behalf of the destination. And so this was a concept that initiated in that group and has been discussed at length and brought to you all today. And the participants are obviously not all of our hotels. It's hotels of a certain size that have a certain number of conference rooms, etc. So by that standard, are all qualifying hotels in that criteria, are they all participating? Are there other members who are not? Yes, they are all participating. They have been engaged in the process and in the conversations, as I mentioned over these last several months. There are, for your knowledge, 13 properties that meet the criteria. Again, these are our bigger box hotels that really cater to group convention and signature event space. Thank you for that. This is, I feel like it's on topic simply because this particular item has driven a few constituent questions that we've received lately. So I want to get a little more clarity from you. Can you tell me very briefly how Visit Lex is funded? Yes, be happy to. Visit Lex is funded entirely by the transient room tax, which is collected on overnight accommodations inside of Fayette County. We have never asked for general fund dollars from LFUCG, and we are not asking for general fund dollars at this point. Is it safe to say then that Visit Lex is basically funded by out of towners and not local residents? Yes, unless you stay in a hotel property or in a short term rental in Fayette County, your tax dollars do not fund Visit Lex. Okay, and then to the question of kind of expenses, right, what you all spend your money on. Can you give me a sense of basically how do we attract conventions? How do we attract folks, businesses to come visit Lexington? How does that work? I'd be happy to. As both Ron and Tiffany mentioned, tourism, the travel and hospitality space is an extremely competitive industry. If we're not getting them, then another destination is. And so one of the things that we do, particularly to drive group business and convention business, is we go to a lot of trade shows. These are appointment based trade shows for the most part. So think of it as you'll get to a show, you'll have a book of appointments. You might meet with 60 people over three days. You're selling them on the city. You're selling them on the value proposition of what it would look like to host a meeting or convention in Lexington. Then of course the goal is to come home with leads. We want to come home with proposals from these meeting planners about a specific event that they have in mind that they think might fit into our destination. And once we have the process to respond to that proposal, we oftentimes then bring them to town so that they can experience firsthand. We have an extremely strong closure ratio on the convention business that we book. It is much higher than anybody else in the state. And we're really proud of that, but that number goes up even higher once we get them to the city. The city does a great job of selling itself once we get them here. But you don't need me to tell you that Lexington and Kentucky is considered flyover country, especially for people on either coast. And so we have to constantly remind them that we are here. I appreciate that. And you brought up the idea of the closure rate. So I kind of, we're very much in the business of considering expenses, considering return on investment, how much are we spending versus how much are we getting back. Briefly, can you give me a sense of some of those metrics and how you measure success and how you measure return on investment? Absolutely. Particularly as it relates to the conversation today, we, as you might imagine, are tracking room nights that our organization books as well as total room nights booked for the city in the span of a year. We're looking at average rate, are we driving rate, and we're driving demand. We look at the number of leads that we have, so we want to make sure that that pipeline of leads is always full. We can't ever be resting on our laurels. We've got to keep new business and new business opportunities in that funnel. And we are looking all the time at where we can go source new leads. We've got two great facilities in the Central Bank Center downtown in the Kentucky Horse Park on the north end of town. And we want to keep those facilities booked all the time. In other areas, we might look at the type of earned media. So we don't have the biggest advertising budget, particularly compared to our comp set cities. But we do have a great story to tell. And so we'll look for earned media opportunities to get that story out there in place of the advertising that we can't buy. So the sort of high level that I can share with you is over the last three years, the city and this industry has had record breaking years back to back to back. It is a $1.7 billion impact to Fayette County. You as a property tax payer in Fayette County save almost $600 on your personal bill, by virtue of what visitors are bringing into this economy and leaving it, and leaving it here for us. And we have had about 12,000 people in the last year that have called this industry their workplace, their home. All right, thank you so much. Thank you, Chair. Thank you, Vice Mayor. Next, we have Council Member Ellinger. Thank you, Chair. So it would be a 2% on the person staying at the hotel that would be added to their bill? On the 13 properties in the district, yes. And in order to get this to pass, you have to have 33% of the owners and 51% of the assessed value? Yes, sir. So it would be, if you had 4.29, which would be five, and you had seven for the assessed, then everybody of the 13 has to opt in? Yes, but we would not bring something to you if we did not have more participation, particularly within that small of a group. Your goal is to have all 13? Yes. And you've talked to all 13? We have, at length. And at least, is there others? At length. We've had lots of conversations. No, no, sorry. Okay, yeah, sure. And then of the 2.1 million that your perceived amount that you're going to raise from this, how does that go about collecting and who is going to administer the project? Great questions. So the collection could go a couple of ways. The scenario that we have shared with you today has the city collecting much like they do the transient room tax. The city is currently collecting the transient room tax. It then remits it to Visit Lex and to the central bank center. Visit Lex receives 4% of current transient room tax. The central bank center receives the other four and a half that's collected here. So we could follow that same model. Then the board of directors, which is made up of hoteliers, would decide which agency they would like to contract with to execute these services. So the board would set the business plan for the year and they could pick whomever they want to fulfill that contract. There are lots of reasons as to why Visit Lex would be a strategic partner for them in that space, given that we are already collaboratively working together on recruiting convention business to the city. And what would be the administrative cost that would go associated with that then? We have not gotten to the point of working that out, but it would probably follow, if the city were to collect, it would probably follow something very similar to the transient tax. And what is that? It is 0.2, half of a percent. And then that 2% that's added on, you said when you look at the whole transient tax, 4% goes to Visit Lex and 4.5% goes to LCC? And that is to retire the debt on the building. Right. Now, would any of this 2% go to LCC then? No. Or this would all go to just this one fund, right? This would go to the board of directors, and then they would be directing the activities of the collections. I just didn't want to think that LCC got any of this. It all goes to the hotels that are actually the ones that are going to be? Participating. Collecting, I mean the hotels would be the ones passing it on to their clients, and they would be the ones in turn dictating how those funds would be spent. Yes, correct. Thank you. Thank you, Chair. Yes. Thank you, Council Member. Next we have Council Member Savigny. Thank you, Chair. Thank you for the presentation. I do appreciate it. I just have a few quick things. One of them might be legal, so I might ask Commissioner Barbary to come up just to help us with it. But the first one is, does it include the STRs within that four mile radius as well? This is limited to hotel properties that have meeting space and cater to convention business and a full service restaurant, so no. And then I'll eventually ask Commissioner Barber or something. My other question is, it literally sounds like it's a limited number of parties. I mean, if I were, I could literally organize a board of directors from those limited number of things. And if those people just decided to put 2% in on their own, they could raise their prices 2% anyway. They could put 2% in on their own. I don't know why exactly we need the management like this district when kind of it's a, it seems like it's very attainable with them actually having a collective, a co-op, so to speak. I'm going to ask Tiffany to share her perspective. So these models are a solution as opposed to a voluntary or a membership type model. So what you're proposing is a membership type model. It's a voluntary contribution in return for services. Unfortunately, that is difficult to maintain, and there is shift and change in our industry. So the assessment model gives us the ability to ensure benefit to all who pay in, and keep that even so that we have competitive even playing field, and we do not have free riders in a program. The balance to that is a term. So we only have proposed this be in place for seven years. Seven years sounds like a long time, but convention meetings, incentives, and bids happen sometimes very far out. It's probably not uncommon for you all to bid on events for 2030 at this point, right? So we want to be able to collect funds, invest them, and see benefit. And that benefit is legally required to spread against those who pay in. And so that creates a reliable, sustainable model that we don't have to continually ask for, if that makes sense. Okay, thank you. And then, Commissioner, is our, the transit room tax, it looks like when I looked at the, is it, it's a standard percentage across Kentucky, or does, do we actually have the ability to have our- Good afternoon, we've maximized what we can locally. I don't know that it's uniform throughout Kentucky, I think part of it is. But then we have the extra kick-ins that are by statute, and we are at the legal maximum right now with hotel taxes. Okay, all right. And I don't remember what the percentage is off the top of my head. But statute does allow us to do this, and we don't, this is not done by a vote, this is only done by a vote by ordinance here? So this is a, it's technically an assessment, but- Yeah. Basically, it's essentially a volunteer tax. I mean, to a point. I mean, if you got all 13 of them, it would be voluntary, but I don't know that, speaking candidly, I don't know that they will. So, but the idea would be, it's just going to be limited to these hotels, and whoever comes online, maybe during the seven years. Otherwise, it won't apply to anybody else. It's going to be seven years in duration. You all would revisit, assuming it goes forward, you all would revisit it again, probably year six, if they still wanted to do it. And then way off in the future, I guess, way off in the future, that LCC stuff will cycle off and there'll be a discussion at the state level about what that looks like going forward. I don't know that they think they need this forever, which is why they're only going with seven years. Okay. Thank you. Thank you all for the presentations. Thank you, Commissioner, and that's all I have. Thank you. Thank you, Council Member. Next, we have Council Member Morton. Thank you. So I just had just one quick question, and it's just, I guess, as a city, we're facing real challenges tied to homelessness, public safety infrastructure, and those issues could directly be tied to, in effect, tourism and visitor experience. So as you're starting to look and consider new revenue structures, are there innovative ways you're thinking about leveraging resources to help address these broader challenges that ultimately impact tourism? So I can speak to this in sort of two ways. First of all, Visit Lex has been invited to the table. This is speaking specifically on Visit Lex's behalf, not necessarily the entirety of the hotel industry. But you are exactly right, Council Member, that many of our hotels have seen the firsthand impacts of homelessness and transient populations, particularly in our downtown cores and along the interstate. So there have been a number of us that have been invited to various conversations over the last couple years in particular, where groups of citizens and stakeholders and decision makers are trying to look at creative ways and compassionate ways to be of assistance and to take good care of these folks. By statute, the transient tax collection is very limited as to what it can be spent on. And so there are some restrictions there, that is by state statute, and that is not a conversation that has happened specific to the TID. Thank you. Thank you, Council Members. Mary Quinn, I don't see any other questions. I'm just, I'll just say that the investment that has been made to visit Lex from American Rescue Plan funds at the state and at the local level, I think we've seen the impact of it. And I think you are working to try to diversify your funding sources to continue some of those works and some of those efforts so we can continue to have record years, just because I think that tourism economy is something that's booming here in Lexington. So I just want to say thank you for your work, thank you for the presentation, and if there's no other questions, then that's all for this item on the agenda. Thank you so much for allowing us the time. All right, thank you. Council Members, that brings us to the end of our agenda. Are there any other business items that we need to, well, we got the review of items referred to committee. Is there any motions? Vice Mayor Wu? Thank you, Chair. I move to remove item number three, LexArts Finance and Equity Review. Is there a motion? All right, there was a motion to remove and second it. Are there any questions? Hearing none, all those in favor, please say aye. Aye. Are there any that oppose? Hearing none, that motion passes. Council Member Savigny? Thank you, Chair. I just wanted to remind you that in June, we'll do a, the tech, the last item, we'll do an update in June on that. Okay. Thank you. All right, we'll get that updated on the packet. All right, with no other business, we'll consider this meeting adjourned. Thank you.