# Committee of the Whole - April 16, 2009 > Auto-transcribed civic record · April 16, 2009 - **Permalink**: https://meetings.lexingtonky.news/meeting/861 - **Source video**: https://lfucg.granicus.com/player/clip/861?view_id=14&redirect=true - **Date**: 2009-04-16 - **Last revised**: July 17, 2026 - **Length**: 8,050 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Committee of the Whole of the Council met on April 16, 2009, with the Vice Mayor presiding. The meeting focused on the Mayor's Fiscal Year 2010 proposed budget, with four informational agenda items presented to the committee. During the meeting, the committee heard three public comments and took one motion to a vote. The presentations covered the Mayor's FY 2010 budget proposal, revenue projections and economic analysis, the budget reduction process and position cuts, and transfers and one-time revenue sources. ## Attendance The following individuals were present at the meeting on April 16, 2009: * Mary Fister-Tucker * Dr. Blues * Council Member Ballas * Council Member James * Council Member Gordon * Council Member Feigl No absences or late arrivals were recorded. ## Votes and Decisions **Motion to Adjourn** The meeting concluded with a motion to adjourn [timestamp: 1:03:35]. The motion passed by voice vote with no opposition. Council Member Ballas, Council Member James, Council Member Gordon, Council Member Feigl, and Dr. Blues voted in favor of adjournment. No votes were cast against the motion, and there were no abstentions. ## Budget and Financial Actions The meeting included approval of several fund transfers to address financial needs: * **Internal Revenue Bond Fund Transfer**: $100,000 transferred to the Office of Economic Development * **Municipal Aid Fund Transfer**: $1.2 million transferred to support streets, roads, and forestry, and engineering functions * **Landfill Fund Transfer**: $1,000,000 transferred from the landfill fund to balance the general fund, resulting from a contract renewal with Republic * **Prisoners Activity Fund Transfer**: $1,900,000 transferred from the Prisoners Activity Fund to support the general fund * **Mineral and Coal Severance Funds Transfer**: $1,200,000 transferred from mineral and coal severance funds to support the general fund These transfers totaled $5.4 million across multiple funding sources to address general fund requirements and support specific departmental operations. ## Public Comment Three council members posed questions during the public comment period regarding various aspects of the proposed budget. **Property Tax Exemptions and Demographics** [timestamp: 0:54:28] Council Member James asked whether the budget accounts for homestead and disability exemptions, and whether demographic trends are factored into property tax estimates. Staff clarified that exemptions are not tracked in advance and that any changes to exemptions would not affect the 2010 budget due to the January 2010 effective date. **Rainy Day Fund and Revenue Contingencies** [timestamp: 1:00:36] Council Member Feigl inquired whether a shortfall in revenue projections would trigger use of the Economic Contingency Fund. Staff explained that the budget assumes use of $560,000 from the FY09 fund balance and that the contingency fund remains available if needed to address any revenue shortfalls. **County Attorney's Office Funding** [timestamp: 0:51:09] Council Member Ballas noted that the county attorney's office had received no reduction despite cuts to other departments, and asked about the reason for this exception. Staff clarified that the office had received additional funding after FY09 adoption, so the 2010 budget actually reflected a cut relative to that newly established funding level rather than an increase or exemption from reductions. ## Contested Items **Use of Economic Contingency Fund** Council members raised concerns about the reliance on the Economic Contingency Fund during budget discussions. However, clarification emerged during public comments that the budget structure was designed to avoid drawing from the fund, thereby preserving it for potential future shortfalls. This approach addressed the underlying concerns about depleting reserves while maintaining fiscal flexibility for unforeseen circumstances. ## Mayor's FY 2010 Proposed Budget Presentation [timestamp: 00:03:00] Mary Fister-Tucker presented the mayor's proposed budget for fiscal year 2010. The presentation outlined a comprehensive financial plan with the following key figures and parameters: **Budget Overview** - Total appropriations: $558.2 million - General fund appropriations: $279.3 million - Assumed revenue growth: 1.8% **Staffing and Personnel** - No layoffs planned - Elimination of 96 full-time positions - Addition of 5 new positions - 1% raise for non-bargaining employees **Cost Management** - Required contract increases included in the budget - $3.5 million in operating reductions identified - Minimal impact on services from proposed reductions The presentation was informational in nature, providing the council with details on the proposed budget allocation and the financial assumptions underlying the fiscal year 2010 spending plan. The budget reflected efforts to maintain service levels while managing costs through operational efficiencies and controlled staffing adjustments. ## Revenue Projections and Economic Analysis [timestamp: 13:25] Mary Fister-Tucker presented the revenue projections and economic analysis for the budget discussion. She detailed several key revenue forecasts: **Property Tax Growth** Fister-Tucker projected 4.4% growth in property taxes, basing this estimate on permit data analysis. **Employee Withholdings** The analysis included a projected 3.6% growth in employee withholdings. **Business Tax Returns** A decline in business tax returns was projected as part of the overall revenue assessment. **Analytical Basis** Fister-Tucker cited analysis from Dr. Ken Trouski and referenced historical trends to support the revenue projections. She emphasized that these assumptions were conservative in nature. **Budget Contingency** An important point highlighted during the presentation was that the budget does not rely on the Economic Contingency Fund, indicating that the proposed budget stands on its own without depending on emergency reserves. The discussion was presented as informational, with the outcome focused on providing the governing body with detailed economic analysis to inform budget decisions. ## Budget Reduction Process and Position Cuts [timestamp: 34:52] Mary Fister-Tucker presented the budget reduction process implemented to address fiscal constraints. The approach involved multiple reduction targets: 10% operating cuts, along with 7.5% and 15% total budget cuts across different categories. A key decision in the process was to restore filled positions from the initial cut lists. This strategy was designed to minimize layoffs and preserve essential services while still achieving necessary budget reductions. Rather than eliminating positions that were actively staffed, the administration focused the cuts on vacant positions. The final outcome of this process resulted in the elimination of 96 vacant positions while simultaneously adding five new positions. This net reduction of 91 positions allowed the organization to meet budget targets while maintaining continuity in staffed operations and limiting the impact on current employees. The discussion was presented as informational, with the outcome reflecting a deliberate approach to balancing fiscal responsibility with workforce stability and service preservation. ## Transfers and One-Time Revenue Sources [timestamp: 42:05] Mary Fister-Tucker presented an overview of transfer changes and one-time revenue sources affecting the budget. **Transfer Changes** Fister-Tucker outlined several key modifications to planned transfers: - A transfer of $1.2 million from the Municipal Aid Fund - A transfer of $100,000 from the IRB fund - Elimination of a $370,000 transfer to the stormwater fund **One-Time Revenue Sources** The discussion included identification of several one-time revenue sources available to the budget: - A $1 million contract payment from Republic - Mineral and coal severance funds - The Prisoners Activity Fund **Outcome** This agenda item was presented as informational, with Fister-Tucker detailing the specific transfer amounts and revenue sources without recorded debate or concerns being raised during this portion of the meeting. --- ## Decisions - **Motion** — passed: Motion to adjourn the meeting --- ## Full transcript Music Thank you. Thank you. Thank you. Thank you. Is this working? Okay, my light's not working. Okay, if we could call the meeting. call the meeting to order for our viewing audience. This is a meeting of the committee of the whole of the council. That means the full council. And the purpose of today's meeting is to hear from the administration specifically from the senior policy and budgeting advisor Ms. Mary Pfister. And Mary's going to report to us today on the mayor's budget that was presented in yesterday's work session. Ms. Mary. Thank you. Thank you, Vice Mayor. Tuesday's work session. Forgive me. I've prepared today just a short presentation, and then we'll open it up for questions. So today I'm pleased to present to you a more detailed look at the mayor's proposed budget. Before we begin though, I want to first recognize a few of our unsung heroes who have helped the mayor and without them we would not have been able to develop this budget proposal. As many of you know, when I was asked to be the acting senior advisor budget position back in December, we were facing a daunting task due to our unsure economic times. While the budget projections at the time were bleak, my main concern about accepting the position was the impact it would have on the dedicated staff in the accounting division. As you're aware from July of 2006 through December of 2008, the accounting division was faced with many hurdles to overcome related to the implementation of our ERP system. And as the spring rain brings beautiful flowers, that time period brought out the roses in the Division of Accounting. Many of the staff in that area routinely worked over 60 hours a week for months on end to achieve clean audit opinions in 2007-2008. I was concerned about the impact on that staff by taking the dual role as the Director of Accounting and as the Senior Advisor when I accepted the challenge, but I did so because I knew that it would take a full team for LFUCG to be able to climb that hill that we were facing. Shortly after I accepted the position in December, the hill before suddenly became even steeper. On February 9, Scott Brown died unexpectedly while riding his bike to work. On February 17, I learned that Kena resigned as the Commissioner of Finance, and on that That same day, Jim Deaton signed paperwork with the state to retire. I do want to take a brief moment to let Jim Deaton, who had open heart surgery on Tuesday, know that our thoughts and prayers are with him and we hope he has a speedy recovery. But within barely over a week, the mayor had lost three of his key financial people. Once again, the rain began. And the accounting division and the budgeting division stepped up to meet the personal and the professional challenges confronted them by losing three coworkers. At the same time we were blessed that we had Connie Underwood who sits beside me, a recently retired budgeting leader, return in our time of need. Connie has truly been our ray of sun shot on the cloudy day and without her efforts, I believe we would not be able to complete one of the smoothest mayor's proposed budget processes seen by Jim Newberry. Through leaving no stone unturned, we were able to develop a budget that I present to you today. We have developed a Mary's proposed budget with a total appropriations of $558 million. The general fund appropriations are $279 million, which make up about 50% of this budget. it. We developed the general fund utilizing only $560,000 of the projected fund balance. And we have assumed a growth in total general fund revenues of only 1.8 percent, which will result in about $5 million. We've proposed no layoffs, but we are proposing to eliminate net of the 96 full-time positions while adding funding for five new positions, an auditor, a software manager, and a minority vendor recruiter. We'll all be added to help our government work more efficiently and to bring competition to our purchasing efforts. As an end result, we should see a cost savings bar in excess of the personnel costs associated with these three positions. I also want to let you know that we have added two positions as security guards that we plan to use for building security in the Government Center and in Phoenix. We plan to use them, along with armed guards, to man proposed metal detectors for both buildings. The metal detectors were included in the FY09 appropriations. This will provide a higher level of security for all the employees and for those people who attend public meetings. We have included additional funding that's required to meet the requirements of our police, fire, and corrections bargaining agreements, and we've provided for a 1% pay increase with a scale adjustment for our non-bargaining employees. This represents a total cost of about $932,000, $641,000 of which is coming from the general fund. We are not relying on our economic contingency to balance our budget, and therefore we have not provided for a draw in this budget. However, we have also not provided for the $50,000 monthly deposit to the fund. As you will learn when you do to your LINCS Committee meetings, we are proposing a $3.5 million reduction in operating revenues in the General Fund with minimal impact to programs or services. The general fund revenues of the mayor's proposed budget total $278 million. Sorry, you all have a mouse is not working very well. As you can see from this pie chart, the distribution of our general fund revenues have not changed materially from prior years. fees and permits still make up the majority of our revenues, consisting of 83% of the general fund. Our ad valorem or property taxes make up the second largest category at 7%, which is just slightly larger than the third category of charges for services. Employee withholdings, which is part of our license fee and permits category, is our single largest revenue source for the general fund. It makes up 67% of the total revenues. As you can see by this chart, in 2009 we are projecting a modest growth of 2.4%. In reality, when we analyzed our employee withholding growth by payer, we are seeing a larger than 2.4% growth. Based on receipt analysis, which I performed in March, we are actually experiencing approximately a 4% growth in the amount paid by pay period. This growth is not seen in the overall collected numbers because we collected 27 pay periods during 2008 and we're only going to be able to collect 26 pay periods due to the timing of payrolls for any employer who pays on the biweekly schedule that's the same as LFUCG. When my by-payer analysis showed the 4% growth, I asked Connie Underwood to independently develop a projection of the employee withholdings. Connie turned to data provided by the state, which is reported, which reports the Fayette County wages covered by unemployment. It reports the wages covered by unemployment by business sector. And in doing so, she was able to confirm that Fayette County wages being reported during that time showed a 3.6% increase, which correlated nicely with what we were seeing in our buy payer detail. With this analysis, we enlisted the help of Dr. Ken Trouski, who is an economist for the University of Kentucky. Dr. Trouski confirmed that many of the fears that we had when developing our $27 million deficit projection and that Bill O'Meara had reported based on the information of the Governor's Budget Office in January were true. However, Dr. Trotsky saw our data from the wages covered in unemployment, and we explained our current collections in light of having one less pay period this year for most payers than last year. He agreed that because of the nature of our economy and our heavy concentration in government, education, and health care, that there was some reason for Lexington to be shielded from the economic trends being experienced by the rest of the state and the rest of the nation. For this reason, you will see that we are projecting the 2009 growth to be slightly below our original FY9 budget at 2.4 percent, and in our Mayor's proposed budget, we are assuming that the real wage growth for Fayette County will decline slightly, but still grow at a rate of 3 percent. As the Mayor discussed on Tuesday, we have some major developments in the Markey Cancer Center, the Argonne National Library, and the BCTC relocation which make us feel there is reason for legitimate optimism in the Lexington economy. We have purposely not relied on our economic contingency fund to balance this budget. We have done so because if our optimistic growth rate does not materialize, we will need to have those reserves to fall back on. The next revenue source that I'd like to discuss with you today is the revenue that we receive from our business tax returns, or net profits. This revenue makes up 11.3% of our general fund. As you can see from this chart, for FY09, an increase based on current collections is projected of 4.6%. Through March, our net profits are actually up from the same period last year by approximately 9%. So we have allowed for some anticipated refunds after the April 15 filings in our 09 projections. For next fiscal year, we are projecting a decline in this category. We are taking this approach based on the discussions with Dr. Trouski and based on our analysis of previous recessions. This is the area where Connie Underwood's 20 years of experience really helped. Based on our review of our history, it appears that typically we see a decline in business returns prior to seeing the tightening of our employee withholding revenues. By that, we think that employers are willing to try to keep more people on staff and have a lower bottom line before they start laying people off. So in our mayor's proposed budget, we are presenting that we will see this same trend as we've seen in other economic times, and we're going ahead and planning for the tightening of these revenues in 2010. The last revenue source that I'd like to talk to you about today is our property taxes or the Avalorum taxes that we receive. You can see that this makes up 7.5% of our general revenue in the general, 7.5% of the revenue in the general fund, and it makes up 91% of the revenue in the urban service fund. As you can see in this chart, the FY09 assessment growth is just 3.5%. This is significantly reduced from the growth experienced in prior years. Based on this knowledge and the fact that the Building Inspection Division is reporting for the first calendar quarter of this year that permits are up 20 percent, which includes a 40 percent increase in our single family residential permits, we are projecting a growth of 4.4 percent in our real estate collections, which will result in $762,000. Based on data that was reported by Don Blevins, Jr., regarding the decline we are seeing in our motor vehicle assessments, you'll notice that we are projecting motor vehicle taxes to decline just over 10 percent or by $181,000. Our general fund appropriations are $279,000. In 2009, you can see that personnel made up 68% of those appropriations. And you can see in 2010 personnel still makes up 68% of the classification. The only categories that have changed from the 2009 to the 2010 mayors proposed are operating, which has declined by 1%, and debt service, which has increased by 1%. As you will learn in more detail during your LINCS Committee meetings, our proposal has personnel appropriations increasing by 1.3%. This proposed appropriation is a result of the following things. We have allowed for the increase in the police fire and corrections contracts as required. We are accounting for the change in the CERS employer contribution from what was budgeted in 2009. We're providing for a 1% raise with scale adjustment. And we're covering the anticipated increases in the health costs that we are experiencing so far this year. We're factoring those into 2010. These increases have been offset by eliminating the funding of 96 full-time vacant positions as we just discussed. Our partner agencies is actually increasing 373,000, a little over $373,000, which is directly related to the increase in the funding for the library. As you know, the library receives 5 cents on every tax dollar, and in the mayor's proposed budget, this will provide an increased funding to them of $579,000. Some of the increased funding has been offset by decreasing funding in other agencies. You can see a listing of the partner agencies provided in the Mayor's Proposed Budget Book that you'll receive today on page 40. The debt service has increased about $3.9 million, and this is primarily due to the issuance of the $70 million pension bond. Mary, just a second. Yeah. That is in millions, I understand that. Yeah, I'm sorry. I should have said that to begin with, that these are all in millions. Sorry. It looks like a couple of, sometimes I can't help myself, I sense anxiety among some council members occasionally that they may need to ask a question. Is everybody, I was actually particularly thinking you look pained, Dr. Blues, you're all right? All right. Okay. Please proceed. And feel free to stop me at any time. All right. I was just concerned. I was just concerned. Okay. Uh-oh. Do you have copies of your paper? Yeah. Yes, I do. Okay. And it... Yeah. Sorry. And we may need it in order to ask questions. So if maybe we could get them printed. I could be printing them. Or you got printed copies already, Mary? Thank you, thank you. I apologize. There's a copy of right. Okay. Should we continue or do you want to? Okay. Insurance, you can see, is we have proposed that we will decrease the contribution we make to our self-insurance fund, the risk management fund, by $1 million. And as we talked about, the operating is declining by $3.5 million. And I really think you'll get the specifics from the division directors, but I do want to point out to you that the majority of this decrease was achieved through decreasing the professional services category for the budget. And we did include increases, anticipated increases in utilities in our operating, including our sanitary fee, which we self-imposed. Transfers are changing by 3.2 percent. Most of this increase is a direct result of not having the $4.5 million draw on the economic contingency fund that we had in FY 2009. Some of the $4.5 million increase has been offset by the Municipal Aid Fund. We increased the Municipal Aid Fund transfer to the General Fund by $1.2 million this year to cover costs in streets, roads, and forestry, and to cover some costs in engineering. We also allowed for a transfer from the Internal Revenue Bond Fund, which will go to support the Office of Economic Development. Capital is proposed to just slightly change by over $200,000. Now I'd like to take a minute if we can to go through the book that you received on Tuesday. You'll notice in your book, I know it's a very large book, but it's what we're statutorily required to provide to you and you can tell that there's a there's a table of contents which you'll be able to find that list by division or by department all the divisions and then under each tab we have a summary of the total revenue and appropriations for each fund followed by a revenue schedule which will show you what we're projecting and what the 2010 is and then there's some detail that summarizes by department the expenditures but i wanted to specifically talk to you about the report that makes up most of the report it's a computer generated report to make sure that this report makes sense to you well it's on on page 52 is the one that i'm showing here it's the division budgeting now we'll wait for a minute to give them a chance to pull it up Okay. And I don't know that that's going to help much, but hopefully most of you have your... Okay. Okay. So you notice where there's the letter A. That area will summarize the overall division's budget in four categories. So it will summarize it by personnel, operating, transfers, capital, and then we'll give you a total for each division. Then below that, you'll have by there what we call department ID and section. So here you can see it's budgeting administration, and it's just the generic section unallocated. So in section B, you'll see, or where letter B is, you'll see the listing of the specific accounts. So, for instance, this is the budgeting division, and you can see that in 2009, the original budget for the civil service salaries was that $381,000. So you can see that that's the original budget column. The next column that you'll see is the requested column. And the request, again, is in this for personnel will be the dollar value of all the budgeted FY09 positions at the FY10 cost. Okay. In the operating section, which if you look over around Section B again, further down where the accounts start with a 7, those are all of our operating accounts and so you can see that the conferences and other training here there is a budget of two thousand eight hundred dollars is the old non-budget and the the division of budgeting has requested one thousand four hundred and ten dollars this request I need to caution you for the operating, the departments were instructed to enter their request with a 10% operating reduction. So the request column doesn't necessarily mean what the department wanted, it's what they received in 2009 less 10%. They were able to allocate it between department codes however they saw fit, but it is, the the request does include a 10% operating reduction throughout. Yes. Yes. Should I be on the mic? Can you go back to what you said about civil service salaries? And you said budgeted FY09, and then go say that again, what you said. The civil service salaries in the request column is the dollar value for all budgeted 2009 positions at the 2010 cost. Filled or unfilled? All of those. So if it was budgeted in 2009, the request 2010 column includes that cost for that position. Now, if you notice on the civil service here, the request 2010 is $361,400. If you notice the mayor's proposed is only $259,000. This is an example of where there was a decline in, you know, we had a vacant position, Jim Deaton's position, that is not being funded in this budget. So that is the reason. an example of why the request would be different than the mayor's proposed. Okay, so the difference between, on personnel, the difference between the request and the mayor's proposed are those 96 positions that the mayor has eliminated funding for and any increases we receive. For example, when you flip through police and fire, you'll notice that there are increases in their overtime that are projected. That's because we know that we have some fixed staffing that we have to meet in those areas. And so we've included additional overtime because we are planning on not filling all the positions. Okay? So the difference between on personnel, the difference between the request and the mayor's proposed would be any changes in the kinds of positions that are being reflected. Okay? Mary. Sorry. Is there any one document that says for each division how many vacancies? Yes, there is, actually. And I emailed it out to each one of the division directors today. And I can, it's a PDF, I can send it to each one of you as well. I'm sorry, it doesn't have vacancies on it. This document contains the positions that were budgeted in 2009 and then what's being budgeted in 2010 and the difference. So I'll send that out to you guys. I'm sorry, but how can we know how many positions based on that? I don't know the salary for each person, so I wouldn't know how many if you showed the differences between, is it salary that you're showing there, or is it the number? It's the number of positions. Oh, thank you. It's the number of positions. Okay, thank you. So if we flip to the division of budgeting here, you would see that they had, you know, for overall they would have a negative, and I apologize, I'll send this out to you guys. They have a negative, you know, one by the director of division account of budgeting and then you'll be able to confirm that there was a position eliminated by looking at the big budget book in the detail, and that would give you the dollar value of the changes. Okay, thank you. Okay? Yes. Okay, now just to clarify what you said about operating, Mary, let's see. the 2010 request in the operating accounts reflects the request minus 10%. Did I understand that right? Actually, in the request, division directors were asked to enter in their operating budget at a level that was equal to their FY09 budget less 10%. The reason we did that, and the mayor spoke to this a little bit in his budget address, but when we started with the budget process, as you all know, we were looking at a $27 million deficit. And so we wanted to make sure that we were able to prepare the best possible budget. it. So when we went out with what we call budget call, when we called all the department directors in and handed out and began the budget process, we asked them in EPM, which is our budgeting system, to enter that request with operating having a 10% decrease. Because We knew that no matter what, we were going to need at least that. I mean, even if the economy turned around, we knew we were going to need at least that because we knew that we had increases in debt service and things that, you know, were going to require at least that much of a savings. And then in addition to what they entered, does that make sense? So the request is fiscal year 9 minus 10 percent? Yes, but the departments allocated it between accounts how they saw fit. And if they were not able to, you know, if there was a division, and a real good example of this is the division of purchasing. Purchasing was not able to meet their 10% reduction plan because they don't have a large enough operating budget to be able to absorb a 10% cut. So through the budget process, KENA made sure that at the department level that the cut was met. And so there is allocations between divisions if a division was not able to meet it. But yes, it does include a cut. So that's why you don't see a true 10% reflected in every one of these. Okay, thank you. Okay. So in addition to entering this 10% request, we had departments prepare a spreadsheet where they actually gave us three plans. They gave us one plan that said, what would you do, what would you need for personnel and operating if you could only receive the dollars that you received in 2009? The second plan that we had each department do was a 7.5% cut from the 2009. And the third plan was a 15% cut from the 2009. So departments went through a second exercise that actually included personnel where they came up with what their reduction plans were. And they gave us the bullet points as far as what the impact from an operational perspective would be should we choose any of those plans. When the process started with the budget, the mayor quickly saw that the impact in reading those budget bullet points, the impact of the 15% plan was just completely undoable, not possible for police, fire, corrections, and a handful of other small divisions. So what we started with was a 15% cut, the plans that were submitted by division for the 15% cuts for all areas with the exception of police, fire, corrections, parks, social services, accounting, revenue, and purchasing. Because those divisions, it was felt, did not have a large enough budget or the concentration of their personnel budget to their operating budget would just provide undue hardship by doing the 15% cut. So those divisions where the starting point was a 7.5% cut. So we went through the process, we came up with what we were projecting using those cuts, the plans, using those plans as submitted by the divisions. And the mayor conducted budget hearings. And soon thereafter, we learned that implementing those plans were going to mean significant layoffs and this was all going on at the same time that we were having all the discussions with dr. Trouski that we talked about so we felt better about our revenues given you know that we had had an external party come in and help us and give us some guidance on where he thought we should be and we backed off on the plans in some manner what we did was we we started with as I said the 15% plans for the majority of the divisions. But then we said, okay, if the position that they are recommending to be cut is currently filled, we're not going to cut it. So we added back any position that was on the list to be cut under the division director's plans that was currently filled. And that's how we arrived at the 96 positions that we ended up being cut. Because of that process that I just described, you really can't look at Division A versus Division B and apply a flat cut percent. Because taking the example, not to pick on Brian Markham, but taking the example of purchasing, you know, purchasing has very little operating dollars. So when he did his plan, he naturally had to go to personnel to be able to meet his plan, whereas another division may have had large operating dollars, and so they would not have hit their personnel as heavily. And so in that result, Division A would not have the same percentage cut at the end of the day as Division B did because of the way that the process was approached. But I do feel like that the mayor's proposed budget is a very, very good plan. I think because of the process and exercise that we went through, I think that we were able, when division directors were faced with putting someone's name on a list as a potential cut, it really made them go through their operating accounts and make sure that they had everything that they possibly can out of their operating accounts. And, you know, I think that that's the reason we were able to get the $3.5 million. Yes. I'm sorry. I have one more question, but it's not about this. It's about something you previously said. about the transfers, and you were talking about the revenue. Yes. And I was just curious about what the thinking was in taking dedicated fees for the landfill to balance the general fund. Actually, we didn't take the dedicated taxes from the landfill to balance the general fund. We have a contract with Republic to provide recycling that's in the landfill. And that contract is a five-year contract and has a five-year renewal option, which comes up this fall. Part of the original contract, Republic, five years ago, paid us a million dollars for the right to have that contract. And I'm probably not saying the legal appropriate terms. But basically, that contract has a clause where we receive a million dollars. It has nothing to do with the operations. They give it to us to spend however we want. We have the option to renew that contract this fall. And so, you know, our intentions are if we renew with them or if we decide to renew with anyone else, we should be able to, at a minimum, receive that million dollars. Okay. So it's not, I thought when the mayor gave his budget address, he said a million dollars from a landfill fund. He did. It is from the landfill fund. But it's not from taxes that the citizens have paid. So where has that money gone in the past? Actually, the last time that it was received, it's my understanding, it was during the Teresa Isaacs administration. and the money came into The landfill fund is revenue and then was transferred to the general fund for general fund support So we're just recommending that we do that same practice this time when we receive the funds for that contract Thank you. So yeah, as far as the The transfers If you If you look on page two, you'll see that obviously under the appropriations, it's clearly marked as transfers to and from other funds. That's the line item where we accounted for last year the $4.6 million payment from the economic contingency fund that we were planning on. And you'll see that the reason why it's changed the $3.2 million is because we don't have that payment this year planned. But in that line item, the key changes are that we are eliminating three key things I think are the take home, or not eliminating but adding. We're adding $1.2 million from, or actually about $1.1 million and $80,000, I believe, from the Municipal Aid Fund to support functions in streets, roads, and forestry, and to support engineering functions. And that is what the intention of those funds are to be used for. So there's added funding for Municipal Aid, or from the Municipal Aid Fund. We also have the IRB fund or Internal Revenue Bond Fund, which historically we've always used for economic development. And in this plan, we're proposing that we use approximately $100,000 from the IRB fund to support the expenditures for the Office of Economic Development for this year. The third thing in that line item that has changed is in the FY08 budget, there was a transfer from the general fund to the stormwater fund of approximately $370,000 and we have eliminated that in this plan for 2010. So that's the big major changes for the transfers on that line item. But if you go up above where you see other financing sources in the revenue section, And you'll see that we're budgeting $4.8 million, which is up from the 09, which was only $679,000. That is the line item where you'll find the million dollars that we are including to transfer from landfill for the payment from whatever vendor, be it Republic or whoever we choose to contract with. We have additional funds from the Prisoners Activity Fund, which was I believe about $1.9 million. We have additional funds in there from the mineral severance and coal severance, which I believe total about $1.2 million. So those are the funds that we're looking to draw one-time monies from to help balance the budget there will have to be public hearings for the coal and the mineral severance transfers at some point should you choose to to approve that in the final budget okay so that's all the transfers that are on there so they may have any other questions as far as the big book and the reports because i do want to make sure that you know what it looks like no questions okay and then i believe you just had passed out to you um a smaller book which is summary information this book is the one that we talked about at the council retreat and how we prepared this book you'll see a lot of the schedules are the same as what's in the big book but we actually have some explanations and more graphs and figures on the revenue and for the departments um each division each commissioner um developed what the you know the description of their division service and the budget highlights the bullet points of the impact of the reductions that's being presented. So the bullet points for the most part were received from the commissioners and the division directors to the extent that they enlisted their help for this document. Okay. Mary, I've got a question. Okay. This is just kind of a context question. when you said the budget reductions that were asked at the 10%, 15% levels, what did you all start out with? 7.5, 10, and 15. And those reductions were asked of the commissioners and directors out of the operating? End personnel. End personnel, okay. The 7.5 and 15 and flat were operating end personnel. Okay. What they entered in the system was just an operating reduction of 10%. Okay. So no personnel. There were no personnel reductions. Okay. So in absolute dollars, how much? So you were originally trying to get $27 million out of X. What was X? Because operating... We were looking... That operating... We were looking at a $27 million deficit. On a total of $275 million. Yeah, but if it ended up just coming out of the operating side. Let me clarify. There were two sets of instructions. The first instruction was only look at your operating. And out of that operating, we took out things like utilities and contractual obligations. So we're looking at the operating that they had some sort of control over. Ten percent of that, one assignment. The second assignment is look at your total budget and tell me what you do with same as last year, which means you've got to cut something because everybody's getting these increases in personnel cost, or a 7.5% total reduction, 15% total reduction. So it's two exercises. The 10% was operating only. Flat 7.5 and 15 was their total budget. But to answer your question, the total appropriations we were projecting originally were $292 million. And that was going to end up in a result in a deficit of $27 million. Total expenses were $292 million. Yes. And revenue projected was $278 million. Do you want to go through the... No, no, I'm just trying to understand what the methodology was. for arriving at Our original revenue estimate was that we would be below the 09 adopted revenue by $7 million. So we were originally in January anticipating revenue to decline by $7 million. Revenue ended up in the mayor's proposed budget increasing by $5 million. So that relieved $12 million of our projected $27 million problem. Okay. And the other 12 then came out of the operating numbers, right? Well, operating, configuring debt service, agencies, everything that's below that. Okay. So personnel from our projections, personnel, we were, from what we projected to where we ended up, ended up being a $2 million difference. So that brought us up to the 14. service we we in the plan and the mayor's proposed budget we're actually proposing that we delay some issue the issuance of some of the bonds for the 2009 projects because we feel like we can cash flow those and that's that's reducing what we anticipated the debt service to be by about two million dollars I don't want to hold everybody up for the question I can come back okay But I've got all that if you want it. I think everybody's just beginning to begin reviewing the budget. So I suspect that we really don't have the level of questions yet anyhow. So today it's more of review on you guys' part. Give us the headlines. Give us anything that you think we're not going to be seeing unless we start digging and then we discover something. That's really the reason for the context that I was asking for. Well, hopefully we've done that. Okay, are we ready for more questions then? Yeah. All righty. Questions? Council Member Ballas. I'm not sure you would have the answer to this question, But I noticed there were some things like the county attorney's office was, there's been no decrease in that. Yeah, the county attorney specifically, he had requested, if you notice, I'm not sure exactly what page he's on, But if you notice, he had requested an increase in his funding level. And so for that reason, he, you know, so each, the mayor actually had budget hearings, listened to what each person said that came into the hearings and made an assessment based on the impact of, you know, of a cut on their division. Yeah, most of them, especially the partner agencies, did have an increase. expect at least. It's been a little while since I've been here. But I think that the county attorney, did he not come after the first of FY09 and ask the council for additional funding that you all then gave him? At least. Yeah. Some of. And so his request reflected the fact that he had been after adopted 09 was in place. He didn't get that additional money kept in his 2010 budget. So in that respect, he does have a budget cut because you gave him additional money after the beginning of 2009, after the original cut. Are there places where we can get details of how these different folks spend that money? Well, I think that the big budget book... And I don't mean to pick on the county attorney, certainly. Well, the big budget bill will give you, by the account code, the nature of the expenditure. But it's not going to have a whole lot for him, as Connie just said. So, you know, over and above the level of detail we have here, really the department director or the county attorney, whatever area it might be, would be the best source to find out what they're doing with those funds. The Commonwealth attorney I saw was cut, but I'm not sure what we are supplying them. We can provide you with, for the constitutional officers, with all the information that we receive from them on their request if you'd like us to. That'd be great. Thank you. Questions? Questions? Anybody? Anyone else? Any council members have any more questions? Go on once. Go on twice. And council member James. Thank you. Let me see. I wrote down a question. Let me see what it meant. On the property tax, you had on your slide show, you had, was it $4 million? I can't remember what it was. The estimate? The property tax? Yeah. It's not 4 million. It's something all limited. Yeah. Okay. Property tax, I think, was only like 790. Okay. 760. I guess it was like a 4% or something. I forgot what the answer is. Yeah, it was a 4.4% increase. Okay. Do we factor in exemptions in that, or is that, like, how do we take into account what folks are eligible for, for like the homestead exemption, disability exemption? Are we tracking that to kind of see who's finally reaching that age where they qualify for this and who's disabled and that sort of thing? When we do the budget, we do an estimate for property taxes based on historical information. In the fall, when property tax bills are actually sent out, the bills actually take into account any homestead exemptions, disability exemptions, and we get that information from the PBA in the fall when assessments are actually put in place. So our timing's just kind of quirky there. We estimate now, and we actually don't know the information until the fall. And when we get that, is that something you can report out as soon as you get that to our Budget and Finance Committee? Actually, you all will have to take action at that time, and I haven't been through that process yet, But Connie has for many years. When you all come back from your break in August, you will probably be hit up fairly quickly thereafter with a decision on property taxes. Is that that packet that's like this thick when we first come back? Probably the first work session. We normally, the Division of Budgeting normally puts together a bunch of information for you all on that. And in that information will be the value of homestead exemptions and the value of assessments for different categories of property and things like that. Okay. Okay. And I guess I'm just looking for kind of trending and estimating you take that into account. So if you're looking at the demographic and you're looking at the ages and you see that folks qualify, you're taking that into account with your estimate or you're just basing it on last year? We're basing it on historical. I don't think that there's been significant difference in the homestead exemption. It goes up every two years, statutorily. Not the number, not the dollar amount, the amount of people that are eligible. It's not changed dramatically yet. It might, because I'm going to start spreading the word about it. But I know, seriously, you know, we're working really actively with PVA, so it may be that an estimate of an increase of 4.4 might, you know, depending on how fast we spread the word and how far we get with it, that might seriously affect. Well, and under... Actually, Council Member James, any word that you spread now would not be effective until January of 2010. Okay. That's the effective date of any exemption. Okay. Good. Then that wouldn't affect us. Thank you. And a couple more questions. Let's see. Can you explain what you meant when you said it factors in the 1% raise and you said with scaled adjustment? What does that mean? That means that if for a specific pay grade, the maximum pays $100,000, we're actually raising, or not $100,000, because there's not many of that, but $50,000. then we're raising that max to be 1% more than that. Okay. And let's see. You talked about the increase in the library. Can you explain that just a little bit more of why that's greater this year? The library actually receives 5 cents of every dollar for property taxes. So because we are projecting a 4.4% growth in the property taxes, that in essence increases what we have to pay them. Because it's my understanding there's a court order or state statute that we have to fund them at that level. And is that based on our fiscal year? I'm trying to figure out how that works because say that estimate is wrong. Well, what happens is annually we go back and true up. So annually we go back and we say, okay, if last year was wrong, we owe you or you owe us, and then we have revised the estimate for the remaining part of the year. So we just did that last month, actually, for this fiscal year. So annually we'll go and we'll say we start to pay them based on the budget, but then if we start to see that our budget is going to be off a little bit, we go back and revise the pay. And you adjust the numbers? So it's not ever that they're going to be owing us back money. It's just that it comes out of what we would be giving them. Right. If they owed us money, then we would reduce their future payments, you know, over the next 12 months to recoup that money. Is that something that council knows about? Is that something that's brought to our attention or it doesn't really have to come back to us once you have that? Well, you know about it in the form that we do a budget amendment to adjust what their receipt's going to be. Okay. And you talked about that the IRB funds would go to support Economic Development Office. Are there, how do we, have we estimated what the expenses are? Is that just for Anthony's salary? It's for his. He has his own department ID. And so when Anthony when when there are operating expenditures related to Anthony's Area then he charges his department ID and then we have we're covering his salary in addition to that Okay, I don't think his operating expenses are very large off the top of my head. They weren't you know, they're not there They're minimal okay, so the bulk of that money is Anthony's salary, okay, that's all I have. Thank you. Thank you. I think councilmember Gordon wants to clarify. I just want to clarify, since we're on air for the public, that the property tax is $0.08 on the $100 assessed value, and the library gets $5 of the $0.08. That is correct. On $100 assessed value, not a dollar. Yes. Council Member Feigl. Thank you. I think what I heard you say is that you're projecting a 4.4% increase in property tax and possibly some other new revenue. And if you don't, if your projections are not accurate, then funds would be taken from the Rainy Day Fund. Is that correct? Actually, for the property tax, under House Bill 44, we are allowed to increase the property tax revenues for up to 4% on existing properties. So, you know, we have some opportunities there. As Connie said, in August, you guys will receive the property tax assessments, and you'll have the opportunity to set the rate to either adjust it up or down based on those assessments. So we have the opportunity there. Right now, we think our property tax assessments are going to increase about 3.5%. That's with new growth? No, that is existing. It's going to be 3.5%. you know the division of building inspection has actually seen a 20% growth in the the permits that they've issued or in 40% growth in the the residential permits so that's factored into this as well so you know we we may be able to achieve this 4.4 without any change in the tax rate but under House Bill 44 we would have the opportunity to change the tax rate depending on the assessments, you know, should we not have the assessments at the level we need. Okay, but my question really was about the rainy day fund. Okay, the shortfall would come from two places, actually. If there's a shortfall, part of the beginning part of the presentation has stated that this plan is going to utilize $560,000 of our projected 09 fund balance. We're actually projecting the 09 fund balance to be greater than that. So it would come from either projected FY09 fund balance that's not yet been utilized and or the economic contingency fund which currently has a balance of about 13.2 I think million dollars. That was my question. Sorry. Anybody else? Nope. All right. If we have no further questions then, oh, Councilmember Blues. Not a question. I just wanted Councilmembers to tell you that the schedule for the general government links meeting is in your is in your mailbox so you're welcome to join us for any of those sessions starting next Wednesday. Thank you sir that reminds me I had written down here to does everyone now have the schedule for the Committee of the Whole meetings I think you do you should have them now all right then we We don't need to announce that. Okay. Then the chair will entertain motion to adjourn. Motion and a second. All in favor please say aye. Aye. All opposed, no. Meetings adjourned. Thank you.