# Budget & Finance Committee Meeting - July 7, 2009 > Auto-transcribed civic record · July 7, 2009 - **Permalink**: https://meetings.lexingtonky.news/meeting/970 - **Source video**: https://lfucg.granicus.com/player/clip/970?view_id=14&redirect=true - **Date**: 2009-07-07 - **Last revised**: July 17, 2026 - **Length**: 14,666 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed with OpenAI's open-source Whisper large-v3-turbo model, run locally by The Lexington Times. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude. Verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Budget and Finance Committee met on July 7, 2009, at 1:01 p.m., with Kevin Stinnett presiding. The committee addressed four agenda items during the session, hearing two informational presentations, approving one recommendation, and deferring one discussion item to a future meeting. The committee took two votes and heard four public comments during the meeting. The agenda included an update on revenues for fiscal year 2009, an informational presentation on a Division of Engineering New Development Section Audit, consideration of a General List of Recommendations From Council Links which was approved, and a discussion on fund balance for the Urban Services District Fund which was deferred. ## Attendance **Present:** Kevin Stinnett, Ed Lane, dim Gray, Linda Gorton, Chuck Ellinger, Andrea James, Julian Beard, Tom Blues, Peggy Henson, and Mike Webb. **Absent:** George Myers. **Late:** None. ## Votes and Decisions The council took two votes during this meeting. **Council Link Recommendations Procedure** [timestamp: 01:25:59] A motion was made by Ed Lane and seconded by Martin to adopt a procedure for council link recommendations to be reported back to the Budget & Finance Committee. The motion passed by voice vote with no abstentions. **Adjournment** [timestamp: 01:37:20] A motion was made by Tom Blues and seconded by Julian Beard to adjourn the meeting. The motion passed by voice vote with no abstentions. ## Public Comment Four speakers addressed the council during the public comment period, raising concerns about fund management, financial transparency, and revenue reporting. **Urban Services Fund Balance and Capital Needs** Andrea James cautioned against interpreting the Urban Services Fund balance as available spending capacity [timestamp: 01:32:25]. She emphasized the need for capital investment in waste management operations and equipment upgrades, noting that current service delivery levels do not eliminate the necessity for these expenditures. **Fund Transparency and Composition** Linda Gorton stressed the importance of understanding the composition of the Urban Services Fund to enable informed decision-making [timestamp: 01:31:19]. She referenced past success in lowering taxes through fund-specific analysis, underscoring the value of detailed fund information. **Revenue Reporting** Kevin Stinnett requested the re-initiation of a detailed monthly revenue report that had been used previously [timestamp: 01:45:42]. He indicated that restoring this reporting mechanism would improve transparency and tracking of revenue streams. **Insurance Payment Timing** Julian Beard sought clarification regarding the timing of insurance premium payments and their impact on revenue reporting [timestamp: 01:42:20]. He asked whether late payments from insurers could affect June 2009 revenue figures, and confirmed that July payments for June expenses are accrued into the fiscal year. ## Contested Items The July 7, 2009 meeting included two significant areas of disagreement among council members. **Contingency Planning for Revenue Decline** Council members debated whether to adopt a contingency plan to address the possibility that revenues might remain flat or decline. Councilman Martin and other council members advocated for immediate planning measures to prepare for potential revenue shortfalls. The administration countered that deep budget cuts were difficult to justify at that time, given that revenues were still being received. This disagreement reflected differing views on the appropriate timing and urgency of fiscal contingency planning during uncertain economic conditions. **Urban Services Fund Spending** A heated discussion arose regarding the $33 million Urban Services Fund balance. Some council members expressed concern about spending from this fund without first conducting a thorough analysis of capital needs. They urged caution in deploying these resources. Other council members emphasized the importance of transparency and accountability in how the fund was being used, suggesting that the funds should be deployed with clear justification and public understanding of their purpose. This disagreement centered on balancing fiscal prudence with the need to utilize available resources responsibly. ## Update on Revenues FY 2009 and Discussion Bill O'Mara presented preliminary revenue data for fiscal year 2009 [timestamp: 00:02:35]. The presentation focused on the current state of revenues amid challenging economic conditions. **Revenue Performance** O'Mara reported a 0.3% year-over-year increase in withholdings and a 0.64% overall increase in primary revenue streams. Despite these modest gains, he noted several softening trends affecting revenue growth. **Economic Headwinds** The presentation highlighted significant economic pressures impacting revenues: - Rising unemployment at 7.7% - Declining insurance premiums tied to stagnant home values - Reduced new car purchases affecting related revenue streams - Broader recessionary conditions affecting overall revenue growth **Outcome** This agenda item was presented as informational, providing the meeting participants with an update on the fiscal year 2009 revenue situation and the economic factors influencing revenue performance. ## Division of Engineering New Development Section Audit Bruce Sahli presented findings from an internal audit of the New Development Section [timestamp: 00:46:45]. The audit identified several significant deficiencies in the section's operations. **Key Findings** The audit revealed the following issues: - Deficiencies in inspection documentation - Lack of standardized procedures across the section - No systematic problem tracking mechanism in place - Insufficient supervision of staff and processes **Recommendations** To address these deficiencies, the audit recommended: - Standardizing documentation practices throughout the section - Reorganizing the reporting structure - Implementing internal audits on a regular basis **Management Response** Mike Webb and other management representatives participated in the discussion and committed to taking corrective actions in response to the audit findings. **Outcome** This agenda item was presented for informational purposes, with management acknowledging the audit results and indicating their intention to implement the recommended improvements to the New Development Section's operations. ## General List of Recommendations From Council Links [timestamp: 01:25:29] Chair Kevin Stinnett introduced a proposal regarding the handling of recommendations from council links. The discussion centered on establishing a procedure for council link chairs to report progress on their recommendations to the Budget & Finance Committee. Stinnett proposed that council link chairs provide regular updates on the status of recommendations they had previously submitted. This would create a systematic mechanism for tracking and following up on past recommendations, ensuring they received ongoing attention and accountability. The proposal was discussed by council members including Ed Lane and Martin. The discussion proceeded without significant objection or debate over the proposed procedure. A motion to adopt this procedure was brought forward and passed without dissent, indicating unanimous support from the council. This approval established that council link chairs would henceforth report their progress on recommendations to the Budget & Finance Committee on an ongoing basis. The outcome enables the council to maintain continuity in addressing recommendations that have been made by various council links, preventing recommendations from being overlooked or abandoned after initial submission. ## Discussion on Fund Balance for Urban Services District Fund [timestamp: 01:27:33] Council members discussed concerns regarding transparency and allocation of the $33 million Urban Services District Fund balance. The discussion centered on how funds are distributed across three service areas: solid waste, street cleaning, and street lighting. **Key Concerns Raised** Council members expressed concerns about the lack of detailed reporting on fund allocation. There was particular emphasis on understanding how the $33 million balance is divided among the three service categories and whether the current allocation reflects actual service needs and costs. Council members urged caution against spending the fund surplus without first conducting a thorough analysis of long-term capital needs. They emphasized the importance of knowing what infrastructure investments and maintenance requirements exist before committing funds to new expenditures. **Speakers** The discussion involved Bill O'Mara, Linda Gorton, Andrea James, and Kevin Stinnett. **Outcome** The agenda item was deferred, indicating that the discussion was postponed rather than concluded. This deferral suggests that additional information, analysis, or further deliberation will be needed before the council can make decisions regarding the Urban Services District Fund balance. --- ## Decisions - **Motion** — passed: Adopt procedure for council link recommendations to be reported back to Budget & Finance Committee - **Motion** — passed: Adjourn meeting --- ## Full transcript Music Thank you. Thank you. It started through the July 7th budget and finance meeting. we do have a quorum present it's about one after one I know we're competing with the Michael Jackson ceremony so our viewership may be down today but nonetheless we'll continue to have our meeting and move forward this is our last meeting before we take a recess for the month of the rest of the month of July and 1st of August our next meeting regular meeting will be again in August last Tuesday in August So I just want to remind everyone of that. And without further ado, first up on our agenda today will be the update on the fiscal year 2009 revenues. And Mr. Bill Mara, I know you bring us news of excitement and joy in regards to our revenue picture, or at least I hope. I have news. Very good. Yes, and I have liftoff with our slides. This is the fourth working day of July, which is when we try to have revenues closed. So this is, in capital letters, preliminary revenue update. And I push the button, nothing happened. Okay, so the first thing that I'm going to give you are all my disclaimers, because this is the preliminary numbers for a significant month, because it is the very last month of the year. And at the end of June, we do a modified accrual basis for the Consolidated Accounting and Financial Report, which means we wait and look into July to see what revenues are received in July that are for the June period and make adjustments for final revenue streams based on that. So that accrual is looking at what came in that is for the June period in July last year, what came in for the June period July this year. We look at the difference and make an adjustment. So this accrual can either increase the reported revenues that I'm going to show you today or decrease them depending on how they match up to the same period last year. In addition, we have bank reconciliations, odd adjustments, And this is the time when we are rolling the year-end from one year to the next, going through open POs as well as staff have been working all through the holiday to implement the project grants module. So that's the end of my disclaimer report that this is fresh off the press with limited review. So the preliminary report for the month of June, June 2009, compared to the same period last year, we took in $12.9 million in payroll withholdings compared to $13.2 million the same period last year. That's down $272,000. The net profit, we took in $2.5 million. That compares to $2.8 million the same period last year. That's down $284,000. The June of 2009 number is depressed because of some larger refunds, as we had anticipated might show up, and that did happen in June of 2009. However, a preliminary review of total refunds for the year say that they're comparable to the same 12-month period last year. But the timing, some major refunds were processed in June of 2009. Insurance, June is not a large month, but I don't know that I've ever seen one this small before. That compares to the $214,000 that came in last year, down $206,000. And franchise fees is our sunshine, I guess. We continue to trend ahead of the same period last year. So June over June, for the four major revenue categories, we took in $15.9 million compared to $16.6 million of last year. Year-to-date, actual-to-actual. So this is the preliminary numbers for 12-month ending June 2009 compared to the 12-month ending June of 2008. Our employee withholdings were $148.9. The same period last year was $148.4, so that's an increase of $464,000. The percent increase is significant. Let me draw your attention to that. That's a 0.3% increase over last year. As far back as we could look, we had not seen a year-over-year increase less than 1.8%. So this is a confirmation that the winds of recession are starting to be felt in Lexington. The net profit, we took in $30.6 million for the 12 months ending June of 2009, compared to $31.1. That's $500,000 less. Insurance was $20.5 versus $20.7 for the 12 months, $179 less. And franchise fees is that sunny day, $17.4 versus last year's 12 months of $15.8, or over 10% greater than last year. So the net of those four primary revenue streams is an increase of $1.39 million, and that's a .64% increase over the same 12 months of last year. Compared to our projections for FY09, this was presented the last two months. These are the same 12-month ending numbers. They're the preliminary June 09, 12-month ending. The withholdings are 148.9. We had projected $149.3 million. Net profit came in at $30.6. We had projected net profit to be $30.9. Insurance came in at $20.5. We had predicted at $21 even. And franchise came in at $17.4, and we had predicted a $17.2 million 12-month number. So the sum of those is 217.5 against a 218.4 or less than projected of $864,000. Graphically, you have color here. You have black and white in front of you. The color ink cartridges ran out of ink. and I didn't know where to find replacements, so I didn't. So I gave you black and white. But the significance, this is showing you comparisons over time. And if you will look at the last large recession, we had two flat years and then trended up. Is that what's happened now or is there another flat year ahead of us? That's the prognosticating that the economists get paid to do, and that's what we're looking at for our payroll. For net profit, here was when the payroll had its dip. In our net profit, it actually lagged behind and had a two-year dip and then came up. We have two years that are virtually flat. So what is supposed to be over here? Again, is it another flat year? Is it already recovered and is going to come out? Is the question that we have before us for net profit. On insurance, it is showing a longer trend, which is a little surprising. We have had a very, very difficult time predicting insurance premium tax. It will be up one year, down the next, up, down, that type of thing. And we've actually seen a flattening of insurance over the last three years. Part of that is the risk rating for the state. I understand we're not having as many accidents and we're not having hurricanes and major catastrophes going through the state, which has had benefit of lowering the risk rating of the state. and those in insurance may be able to correct me or have me use the proper term, but we have not seen an escalation in the actual premium rate as we might have seen in prior years. The other thing that's going and definitely affecting that is assessed values of both cars and homes and the lack of purchase of new cars. If people are holding on to theirs or buying used rather than new, though the insurance base is not growing as we've seen in the past. And then franchise fees is consistently increasing. We are seeing the monies coming in and recorded more comparably this year to last than years past. Part of that is the telecommunications excise tax, which is now a flat payment that comes from the state, that comes in every month, versus quarterly payments from the telecommunication franchises in the past. Others are both a function of rate and weather. Cold weather, hot weather, dry weather all affect the usage of the utility, and the higher the utility usage, the more the franchise fee revenues are. So what we're looking at is a softening in revenues. My analogy is the winds of the recession are starting to blow. We looked for them back in December. We looked for them back in February and March. I think that we do have some wind. How strong that wind and how long that wind is going to blow is the $64,000 question. Or in a recession terminology, are we going to have a V recession, which bottoms out quickly and comes back, a U recession, which bottom stays there before it comes out, or a W where we have a false positive, another dip, and comes out, and that's the debate that's going on at the national level. Some of the local information that we have, and again, we have not completed our analysis because of the time, we have been tracking very closely the difference between slow pay and no pay as I talk about it. And we definitely have people paying us slower, delaying when they pay us. but at a year end, if they started paying us slow since January and they haven't caught up in June, the year is over, so that slow pay shows up in our final numbers for the year. So is that trend going to continue? Do we actually see a reduction in our base? That's the analysis that we're trying to massage right now. Our top 30 employers are still showing 1.6% up, but that used to be 3% up. So there is a contraction going on. Our unemployment rate is 7.7. That's the bad news. The good news is it's the lowest in the state. That compares with the state of 10.6 and the nation as a whole as 9.4. We're tracking foreclosures. We're tracking building permits. We're trying to track home sales and pending home sales, any of the leading indicators that we can try to get information on. But all of those have a lag. They're at least one month, if not a quarter, behind before you get the data. So that kind of challenges us to use it to predict what's going to happen tomorrow. Very good, sir. I know we have a couple of committee members signed up for questions. But before we do, do you have this year's budget with you in terms of the employee withholdings, net profit, insurance, and franchise and what we projected for this year so we can compare to the FI09 preliminary numbers? Yes, sir. I have three out of those four. Okay. I had the mayor's proposed budget. I failed to update the amended amount for franchise. So that's the one I'm weak on. Is there a way to put those up or if you just tell it to us? And this is the proposed budget, not the council adopted? Right. But I think three out of the four numbers are the same. Excuse me, Councilor Duff. I apologize. Fresh off the press. And small, so we're going to be challenged for you to be able to read it. Do you want to go ahead and tell us what they are while she's putting that up there? Well, the copy is over there. Okay. So I'm waiting to see as well. Let me go ahead and tell you what. Withholdings and FY10 is budgeted $156.5 million. Net profit is budgeted at $31.5 million. Insurance premium is at $21.8 million. And this is the total franchise was originally at $7.3 million and I believe that went to to 17.5, but I'm waiting to see that actual number. Okay. Withholdings is budgeted at 156.5 million. Net profit is 31.5 million. premium is $21.8 million and franchise $17.552. Thank you, Bill. I appreciate that. I'll go ahead and turn the floor over to Council Member Beard. Council Member Beard Thank you, Chair. Of course, the thing on your first page, preliminary numbers. Well, first let me ask, the June of 2008 numbers, are they the honest-to-God audited number versus preliminary number? They're from the CAFR. They're from the audited financial statements for 2008. So it's not an apples for apples in relationship to where we are at the same time last year. My first page disclaimer, I don't have the modified accrual reflected in current June numbers. Okay. The thing that jumps off the page is the insurance number. And – Well, excuse – okay. Well, I guess – There's a caveat to that one. Well, is it possible that there's money lurking out there that's going to come to us that would represent insurance premiums or from insurance premiums of June? Yes. That's why we track all of July payments, because if they were for a June period, then we're going to accrue them into the 09 fiscal year. So we're going to be looking at payroll withholdings for the month of June that are paid in July. We're going to look at net profits that were paid for period ending June 30 or before. Insurance premium is the same way. And I think we do EMS billings as well that way. Do we go dig as deep as to find out who has not remitted and who has remitted, and are they large insurers or smaller companies? For the CAFR, for the closing of the books? No, for this report. Well, let me answer you yes and no. Yes, we look at when we're looking at who is slow pay and have made contacts based on that information on why are you three months behind or do you realize we haven't gotten your payment, especially if it's a large dollar amount. but the CAFR accrual looks at actual dollars received in July, I believe. So have I answered your question? Well, I guess yes and no. Okay. Well, we're on the same page. Yes, exactly. Well, let's put it this way. It was me that was receiving the money, and I had 1,500 sources of money, and it trickled in at just a minute stream. And I know that State Farm and all the big insurers had not remitted yet for premiums that they collected in June of 2009, that there should be some, I mean, if in fact you know that, we should have a pretty large chunk of money coming to us at some point, not in relationship to the whole budget, but in relationship to the insurance piece. Well, let me make a qualifier. At the bottom of each one of these slides, there says the 2008 number has been adjusted for a one-time accrual. So if you look at the CAFR, and I told you these were audited numbers, that was a true statement except for insurance. Because for the first time, we made that July accrual back into June last year. So that's a one-time accrual. It will be an ongoing accrual from this point on. So when you go look at the CAFR, last year's 12-month number is $2.78 million more than what I have shown here. Because it was the first time we'd ever done the accrual, I made the adjustment for this comparison. Okay. Thank you, Bill. All right. Okay. Up next is Council Member James. And before you take over, I want to thank you again for switching meeting dates so we could have these numbers. if it's important to get some of these numbers before we go on break. So thank you for switching with Intergov with us. Councilman James. Sure. Thank you. No problem. Thanks, Bill. A couple of questions, just trying to get my arms around everything and making sense of it. You talked about that for the insurance, that you talked about the effect of not buying new cars. What's the housing market effect on that insurance number as far as new houses versus rehab of houses? Is there a difference between that and what the revenues? Well, I think the answer is that the price of homes is not escalating. It's coming down. We've just come off of a very robust period for real estate where every year the same property was worth more than the year before. And a lot of people refinanced. Your property taxes and your insurance is based on your most recent assessment. So if I've been in my house for 20 years, my insurance premium is not going to be the same as what I paid 20 years ago. They're knowing that your house is going up and that the value is going up, so therefore your premiums have gone up. If home prices are not rising, that escalation in the risk base has slowed or stopped. Okay. Right. So with that, if you have, in the case where folks are not buying new houses, in the case where they're rehabbing, say, a house that had been valued at a lower property value and now it's being rehabbed and reassessed at a higher rate, does that help to stabilize it a bit? That would be the opposite of what I just explained. So that you've taken a piece of property that had an eroded base or a stagnant base, made improvements to it so that it is now worth more, then the insurance premium base would go up and the premium would go up as well. Okay. So when you're looking at the building inspection permits, you're also looking at the ones for rehabbing as well in your numbers. Well, I'm letting the insurance company decide what the base is and collect the premium tax. I was just trying to explain why we thought that it had flattened out. Okay. When we look at building permits, we're just trying to gauge the pace of construction in Fayette County. So I don't want to mislead you. I'm not analyzing to that degree the type of building permits that are issued. Okay. But you're doing that to try to get a grasp on these numbers somehow. So when you're looking at the building inspection, new construction, what does that help you gauge? What numbers on this page? That helps me gauge both payroll and net profit for the construction industry. Oh, I see. Is it growing? Is it stagnant? Is it contracting? Okay. And I'd be interested in seeing, you said the unemployment rate now is 7.7. Do you have anything you could show us that shows over the past, say, 10 years or something, as the unemployment rate has changed, the effect of our revenues, of the effect of unemployment on our revenues, something that you could show us to where we could see what the trends are and if it really is, because sometimes that number is not really reflective of true unemployment, and so that's kind of my question. It just depends on who goes to the office and files for unemployment. So if we have folks that are never employed, get out of high school, never even get on any kind of system where they'd be indicated that they never get a job, so then they can never be counted for unemployment. I'm just wondering how relevant the 7.7 is to our numbers truly. Well, again, we're looking for economic indicators to help us assess. So the assumption is that if unemployment rate is going up, then we're trying to see if that is affecting our withholding revenue. And so that's why we look at it. We equally look at employment and not just unemployment. And there's a statistic that comes out, it's a little late, but it says that 140,000 people are working in Fayette County. And we compare that to the same statistic, the same period, the year before and the year before and the year before. On that statistic, May is the most recent that we have, and 140,200, and that compares to two years ago of 145,100 people employed in Fayette County. So the fact that we have, according to this, 5,000 less people working, and yet we have more revenue in withholdings than we did two years ago, there's not a one-to-one relationship, but it tells us that there is compression or pressure on that withholding number for the future. Okay. So really the statistic of 7.7 is really irrelevant because you're really only looking at employment, not necessarily unemployment if we're never going to – I mean, if you're throwing it out there, we're not really basing the unemployment rate on anything. We're looking at employment versus employment last year or previous years. Well, I think it's relative. I don't think it's an irrelevant number. I think it's one of many things that is something to watch and track to help us in our forecasting. Can you help me by providing something that just shows just the trends? I don't know where I would get the unemployment data information and then compare that to whatever numbers would be relevant to the unemployment rate, in your opinion, based on things that we have to deal with here with our budget. All right. Okay. Thank you. Thank you. Council Member Lane. Hello. Yes, I'm making sure I don't forget the request. Yes, sir. Well, the area I'd like to discuss had to do with the trend of revenues, and I wondered if you have taken maybe the last quarter of revenue for this fiscal year and averaged that out to a monthly number and then projected it into next fiscal year to see if we have a downturn in our revenues, which I'm pretty confident we had much higher revenue the first half of the year than the second half, and more than the third quarter than the fourth quarter. I'd like to see a projection of the fourth quarter running straight line out through the balance of fiscal year 10 just to see what would do to our revenues if we didn't have an uptick in revenues during the fiscal year 10. Does that make sense, my question to you? Yes, and the first half of your question, we do have the numbers by month, by quarter. I did not put it in the packet because they were preliminary numbers, but I've shared that with you in previous reports. The other half is, no, I have not taken the fourth quarter trend alone and projected that into 2010, so I certainly can. Well, I mean, the reason I bring that out is if, let's say that we end up the year at $200, in 17.6 million for these four categories, and we're projecting about 225.3 million for next fiscal year. So that's about, give or take, among friends, around $8 million increase. But if this average, these numbers we have for the year to date show much higher income or tax receipts for the first part of the year and a lower amount for the latter part of the year, then it's sort of a double compounding thing. We have an increase and then we're going to have either a flat or could be less than the total revenue we have year-to-date for 09. We actually could have less revenue in 10 than in 09. That's what I'm looking at. I know it sounds a little bit negative, but I thought we ought to look at those numbers and see if we need to have another contingency plan on the boards ready to go if that happened to be the fact. I will do it. Okay. Do you think that since we're sort of on a short schedule here, this is our last meeting today, do you think there's a possibility you might be able to bring that information later today, since you already have some of it already done? Depends on how many questions you ask me on item three in today's meeting. I mean, in addition to my questions, what you're saying. Well, no, actually I'm on the agenda for later. So I'm having a hard time going back to my office to work on anything before council meeting and council work session. But I can certainly. Okay. We're not asking for it to be, you know, cast in bronze, just sort of a ballpark number, see what it looks like. Thank you very much. And to that point, thank you, though. If he was able to get to us maybe next week while we're on break, we still get e-mail while we're on break and mail. So that would be easier. Would that be okay, Councilman Rolaine? That would certainly be another option if you can't do it today. You said you already had the quarterly numbers, so I thought maybe just running them out wouldn't be that big of a deal. But if you can't do it, I mean, I understand you've got a lot on your plate. Well, I can tell you that the fourth quarter this year was $400,000 less than the same quarter last year. Repeat that, please. And the fourth quarter this year was $400,000 less than the same quarter last year, just from this monthly work paper. Now, you're saying compared to the fourth quarter of last year, but I was looking at the first six months of this fiscal year versus the last six months of this fiscal year, because we've added all those numbers together. If we were increasing early on in the year and then we've started declining, I just would like to see how that would project out into next year. I misunderstood your assignment, so thank you for the clarification. Thank you. Vice Mayor Gray. Thank you, Mr. Chairman. My question really has to do with the special funds. I was just curious about what's been the history of reporting on the special fund revenues. Is that done to the budget and finance on a regular basis? just so we see trends in those numbers. Which special funds are you referring to? All of them. All numbers are able to be? Urban services. That's on number four on our agenda, so we'll get there. But the other ones, we can have a report out of anything. I'm just saying, why wouldn't we get a routine, regular? That's one of the goals of number four today's discussion. You're ahead of me again. So we see those surpluses out there. There we go. You're ahead of me, Mr. Stinnis. So glad you're the chairman. Thank you, sir. That's it? Councilman Henson. Thank you, Bill. I was just curious. I have a couple questions. You said we have possible late payments. Do you have a total calculation of what is late? Well, that analysis has not been done. It was not done last night. We didn't have the information in order to do that for today. We have done that in prior months, but I haven't looked in this in a month, so I'm not sure I can get right to your question. No, I'm not sure I can answer that right now. Okay. Just whenever you can get to it. Also, I was just curious if you have late payments, you have late payments and you have non-payments, and will, in some cases, I would think late payments will become non-payments. Is that normally the trend? Or do, I mean, we don't get 100% payment, right? Well, let me clarify when I say late pay versus slow pay, or no pay versus slow pay. Right. When someone pays us late, I then know how much they owed us, and I know how late it was. Right. After the fact. Because this is a self-reported tax, they know how much their payroll is, we do not, until they report it to us. So I do not have a dollar amount of how much is out there today that did not pay us on time June 30th. I can tell you who should have paid us in May and paid us late in June, who should have paid us in April, paid us late in June after the fact, and show that that trend has been there since the first of the year. And an average maybe of how much they pay. Okay. Now, also I was curious for the projection for 2010. We've got the employee withholding at 156.5, correct? Yes, ma'am. And the actual for 09 was 148.9. Do you think that projection is a little high? We are challenged to meet our 2010 revenues in the payroll withholdings and the net profit somewhat in the insurance. Absolutely. Okay, thank you. We have Council Member Martin next. Thank you, Council Member Stennett. Mr. O'Mara, I appreciate you stepping into the line and answering all our questions. What is the increase of the total 2010 budget over the 2009 budget? Do you know that number? I think I know it, but I don't want to sort of just guess. I have it. Here's the fresh off the press. I should be using that. The approved 2010 budget is $279,621,000 compared to, at the time, the 2009 projected of $270 million which is 3.3. Last month however, I projected this year to come in at 267 million. So our budget is about 13 million over last year's, our projected revenues for 2009. Is that accurate? Yes. In the ballpark. So if our revenues hold flat, we're going to be 13 million short. Is that right? right? That is a possibility. So I agree with Council Member Lane that I think we need a contingency plan in case we hold flat or in case the economy ticks down. Has the administration put together such a contingency plan? We have talked about it. There isn't one that is on a piece of paper that is ready to hand out. We talked about it's, well, when we thought the economy was going to go down, and we might need to make some very strong recommendations of amendments, and the revenue keeps coming in, it's very hard to go forward with a very deep adjustment to your budget. And so we proof in the pudding, but not too late. When the trends are there, then it's time to come forward with some very serious discussions about where do we have to go in order to stay in a budget that is balanced. And I anticipate this fall being the time when those discussions would have to be engaged in. And I think we need this summer results to see how strong those winds are and how long they're going to blow, some sense of it. Well, I think that before we actually see the numbers, we should put together lists of possibilities. I mean, that's what a contingency plan is. Once those possibilities come to exist, it's going to be an actual plan and not a contingency plan. And so I think while we're on break, I think it would be good for you all to put together, you know, $13 million, $15 million of projected cuts that could be made if we need to do those to keep this budget flat as compared to 2009. And I think, you know, many of us, when we adopted this budget, we talked about where things were and what the numbers were, and if they held flat or declined, that we would need such a contingency. And so I think that would be extremely prudent to put such a contingency plan together. You know, we're all hoping for the best but playing for the worst. And so I think that when we get back, I would like, for one, to see, you know, at least a contingency discussion about if things held flat or declined, you know, where we would find the revenues and what we would do in such a situation. I was very impressed that the administration brought the budget in, brought their expenditures well under budget in 2009, and I think that's a good trend to continue and to move forward on. I think Mary's got some words of wisdom. Well, thank you. And I guess the thing I was going to remind you is of a $279 million budget, $191 million of it is in personnel. And so there's friction in living within a moving target budget and trying to fill all the positions that everyone feels are very important in order to fill. And so that will be part of the discussion as well as other cost savings. But last year we cut operating. The year before that we cut operating. So programs would have to be visited to see whether they continue or not, as well as staffing, as well as if – and I'm not talking about alternative revenue sources, But all of those things would have to be discussed and considered. Well, I think that if we experienced any decline in our revenues this year, we would be in serious jeopardy without a contingency. Would you agree? Yes. Yeah, so maybe we can just revisit this when we come back in August. Okay. Thank you. Councilman Beard. Thank you. Being a slow learner, I'm going to walk you through a scenario and you can tell me I'm back on the insurance situation and late payments. an individual receives a bill and their insurance payment is due, let us say, on the 29th of June. And it's received by the insurance carrier on the 29th of June. But we don't, they don't report that to us until the 5th of July, let's say. That may be even be optimistic, but just for purposes of illustration, that is adjusted, correct? Is that considered a late payment and a late payment? I don't want the public to get confused about when we use the term late as to whether the payment was late to them, so it's late to us, or whether the payment was on time to the carrier, but late to us just because of logistics, I guess. Well, let me try to clarify, but I might be confusing instead. that we are not tracking when the consumer paid the insurance carrier. That's up to the insurance carrier. I understand. And the insurance carrier is supposed to track all of their revenues that they received in a quarter. And then they have a month, I think, in order to report that to us and remit the part of the bill that is ire. Right. So their responsibility is to track all the payments that they received in a quarter, see what jurisdiction they are applicable for, and I think there's some 300 in Kentucky that they have to divvy out and say, this one goes to the small town of this or the large town of that, and then remit our portion, the Lexington-Thade-Irban County portion, the end of the month. What we're tracking is we didn't receive their check on June 30th. We received it on July 15th. We will accrue that back into June. We do that once a year. And we look at the change between how many times that occurred last July versus how many times that occurred this July and book the difference. Does that help? Yes. No, it helps. So I just wanted to be sure the public understood what we're talking about. Thank you. Anyone else wishing to ask Mr. O'Mara a question in regards to his report? I just have one comment. As we're talking about our revenue pictures and how revenues are coming in, and Council Member Martin's point, we're not talking about expenditures today. And that's one thing that last year the administration did a great job in. We budgeted $274 million approximately, $273 million and change, and we came in at, what, $268 million in expenditures? Well, we'll have to wait and see. We were close to that. Yes. So you're talking about $5 million to $6 million lower than what we budgeted. So that always is the case. And so to that point, Mary, can we start getting our next report that we started using at the beginning of this year, starting in August, that shows everything broken down by the month again, and that nice thing you worked very hard on, I don't know what we named it, but if we can start getting that again, that would be great, starting in our August meeting. That kind of breaks it down in a little bit more detail that some of us like to see. Anything else on this agenda item? Okay. Thank you, Mr. O'Meara. We'll see you here shortly. Next up, we have the Division of Engineering Audit for the new development section. And, Bruce Selle, if you want to give us a quick recap of that audit report, all the council members should have it in their packet as well as it is available online now. Is that correct, the report? Okay. So it's also available at lextonky.gov. Mr. Salih. Mr. Salih. Thank you, Chairman Sennett. It's my pleasure to come before the Budget and Finance Committee and to report out on the results of the Division of Engineering and New Development Process. Very briefly, as I always emphasize to the committee and also to the public at large, a couple of things about the internal audit process. It's important to understand that internal controls are the responsibility of management, And it's our job to assist members of urban county government management in the effective discharge of their responsibilities by providing an internal audit function to provide analysis, recommendations, counsel, and information concerning the areas that we audit within their particular divisions and departments. The second thing I always want to emphasize, both to the Council and to the public, is it's important to note that findings are a common result of an audit, and they do not in and of themselves indicate carelessness or negligence on the part of management. Efficiencies identified during an audit can be the result of many factors, and some of those may be only partly controllable by management. In addition, internal audit reports are designed to draw attention to opportunities for improvement, and therefore they do not address the areas of satisfactory performance that may have been noted during the audit. So the Council is encouraged to maintain a balanced perspective regarding the nature and extent of internal audit findings. In the packet you have there in front of you, you have the summary of audit results. The Office of Internal Audit completed an audit of a division of engineering and new development section processes on June 19, 2009, in response to an Urban County Council special request. The general control objectives for the audit were to determine that the Division of Engineering new development inspection process was sufficient and effective, that field inspectors and engineers had the necessary training and experience to perform their required duties, that field inspections were completed timely and adequately documented, that the field inspection process was sufficiently managed and anomalies resolved in a timely manner, and that the problem resolution process was effective, sufficiently documented, and communicated to all stakeholders. The following findings were reported to senior management in the June 19th audit report. Management should develop standardized documentation requirements for field inspections to ensure that documented results of inspections indicate those inspections are appropriately conducted. Management should also develop procedures to provide oversight and monitoring of field inspections to ensure timely, accurate, and thoroughly documented field inspections that comply with all federal, state, and local regulations. Division of Engineering Management should periodically validate reported inspections by conducting random, unannounced field-level reviews of inspection work performed. Management should develop improved documentation requirements for inspections affecting later accredited amounts. Division of Engineering Management should periodically validate reported inspections by conducting random unannounced field level reviews of inspection work performed. The new development section reporting structure should be reorganized to provide at a minimum the assignment of direct supervision of field level personnel to one supervisor to improve the management and accountability of that function. We know that there was no systematic process for new development section problem tracking and resolution. Management should coordinate with LexCol to obtain database tracking regarding the nature of issues reported and to determine if assigned NDS employees have implemented timely and appropriate steps to resolve the issues. This database tracking would also provide NDS management a systematic database of information regarding issues that may have several years of history associated with them. We noted the duties of project coordinators should be assigned to a licensed professional engineer as required by the Engineering Procedures Manual approved by the Council to ensure the highest level of professional competency in the project coordinator position. Licensed professional engineer seals should be obtained for submitted construction plan documents as required by the Engineering Procedures Manual, including any amendments to the original plans as they become the new representations of the external engineering firms. In our opinion, urban county government should continue the current practice of placing reliance on external licensed professional engineers to provide detailed reviews of development plans, while the Division of Engineering personnel should continue to perform their limited reviews of such plans. Documentation of commercial pre-construction meetings needs to be improved to increase the overall accountability of this process. These meetings are required before grading permits can be issued. Engineering management should request that information technology update the NDS database to include the documentation for commercial inspections, similar to what they have for residential home inspections. And supplemental commercial files, for example, for building reconstruction, should contain checklists to ensure personnel are aware of and document compliance with all required project meetings and inspections. Management's responses to the findings indicated appropriate action would be taken to correct the deficiencies identified, and management and staff were very courteous and cooperative throughout the course of the audit. With that, I would open the floor to any questions. Thank you, Mr. Salee. We have Council Member Blues was up first and actually pushed you off, so I'll let you have the floor, and Council Member Gordon will be up next. Thank you, Chair. Bruce, I wonder if you can help me on bullet point number one here, maybe fill in between the lines that we suggested that standardized documentation requirements for field inspections are needed, and we need documented results to ensure that the inspections were appropriately conducted. Can you give me a kind of example of what we're talking about here, what is done now as compared to in the auditor's view should be done? What we noted, particularly with this first finding, was that there was significant variance between the documentation standards that existed among the four different field inspectors. One field inspector's documentation might be very sparse and really difficult to follow in terms of there's a logical progression taking place that they've done an inspection, They've noted an issue. They've gone back out and done progress reports. And then there's what they call the process resolution that they would document. So for some of the inspectors, you really wouldn't see that kind of flow at all. For others, you would see it very well and it would be fully documented, plus it would explain exactly what the issues were they noted that needed to have corrective action, how they noted them, what the condition actually was, whereas some of the other inspectors might simply say grading in progress or other in progress. So there was a very large difference between some inspection results by some inspectors and the inspection results done by some of the other inspectors. So it's really in some ways then the luck of the draw here for the builder or developer, whether you're going to get a fairly strict by-the-book scrutiny or some variable of that, I would guess. My understanding is that the inspectors are assigned to different geographic areas. I don't know exactly. There may be some overlap, and I don't know how much they'll rotate it out either. But basically what you're saying is I wouldn't say that the inspection necessarily would be less for one than for the other. But the documentation showing the results of that inspection was, for one, it may be very limited and may be difficult to follow the logical progression and resolution of an issue. While for another one, it could be clearly understood and identified what the problem was, what their in-progress inspections might result in, and then how they determined that the problem had been resolved. Does that answer your question? Yes, that's very helpful. Also, can you tell me what measuring tools the inspectors use when they go to a site? Do they do any sort of scientific appraisal, or is this pretty much an eyeballing of the progress in relation, say, to the development plan? Some of it would involve measurements. Other parts would be site inspections. As an example for a site inspection, if a new developer, they have to put screens up around stormwater sewer areas to make sure that there's not runoff, and so forth going into those stormwater areas, you can just do a side inspection of that. Some other areas, if you're looking for manhole cover to be elevated a certain amount above the ground, it's required maybe by regulations, and that might require measurement. And one more question, and that relates to the third from last bullet, where you refer to documentation of commercial pre-construction and so on. Now, I'm assuming then you're saying that in reference to residential pre-construction, everything's okay in the view of the audit. Yes, that is a different finding. It has a different area, yes. We looked at both residential and commercial inspection activity as part of the overall new development section's responsibilities. And in the commercial pre-construction meetings, these pre-construction meetings are required before a grading permit can be issued to the developer. And what we noted was that there really was all that the documentation included for that was just a checklist that the meeting took place, the date and the location. but there was nothing about persons in attendance, topic of discussion, or really an indication as to why that meeting resulted in the determination that, yes, a grading permit should be issued at this time. Well, thank you very much. This is a pretty important audit. I know that I have at least one situation in my district where there have been questions about the, about grading issues and inspections. So this is very helpful and might come back here for more specifics later on. Thanks again. Thank you, sir. Council Member Gordon. Thank you, Mr. Chair. Thank you, Mr. Sully. I always appreciate your good work and the work of your folks. I had a couple questions. On the third bullet recommendation, the new development section reporting structure should be reorganized. Can you give a little bit more detail about that? Are you thinking that a reorganization would help these other bullets that involve someone overseeing different inspectors, et cetera? One of the key things that we wanted to see addressed there was you have four field inspectors that have very autonomous jobs. They do their work independently. They document their work independently. and our belief is that there needs to be the organizational structure that they currently had in place to place significant supervisory responsibility on one employee. And we felt it was not an effective reporting structure to make sure there was proper oversight of the division where the duties are complex, departmentalized, and often involve field operations with significant autonomy. And a particular concern, as I said, was this reporting structure did not provide management the opportunity to effectively oversee the work of field inspectors. So our recommendation was that they should reorganize to provide, at a minimum, the assignment of direct supervision of field-level personnel to one supervisor to improve the management and accountability of that function. Is that a, I mean, that makes common sense to me. Is that a commonly seen structure in other entities that have this sort of a, I guess other cities, et cetera, that have this sort of a section for engineering? That's a good question. I really don't know the answer to that. What we were basing this on was cell management practices. Well, the next bullet talks about no systematic process for problem tracking and resolution. And I know that I have sensed that, and maybe other council members have too, in certain situations. I mean, I won't name the properties, but there have been various properties over the years where there were problems with the new development part, and it seemed like there was not a way to track the problem from beginning to resolution. Yes. And that's been very frustrating. So I was, in a way, happy to see this next bullet about the problem tracking and resolution. I mean, I wasn't happy to see it, but I think putting it on paper and saying we need to manage this process better will help everybody. It will help the neighborhoods. It will help the new developments. It will help everybody who's impacted because I think that has been a fairly significant problem that eventually works its way to council members because citizens don't know where to go when the due development impacts them and the problem hasn't been tracked. Well, on this next bullet, the duties of project coordinator, is that something that's not being done at all, assigned to a licensed professional engineer? Because it is required by our engineering manuals. What we specifically noted was that the engineering employee currently designated as the project coordinator for commercial projects is not a professional engineer. And we also found no documented evidence of professional engineer supervision of this employee's work in the commercial project files. Now, will management report back? I know you've given us the spreadsheet in the past of findings and then what has been reported back to you for action. How soon do you think you'll get some sort of report back, or will you go back and check on these things? Typically, it depends on the complexity of the problem that management is trying to address. Typically, I try to go back within a six-month period to see the problem resolution stages and the status of their action plans. So it would certainly be within this calendar year. Okay. Council Member Blues mentioned the third from the last bullet. And most recently, well, what comes to mind with documentation of commercial preconstruction meetings is that these are now elevated with EPA consent decree rules and that this, you know, there's some things in this engineering section that we can't afford to, well, we can't afford not to maintain a high standard because it will cost us money, as everybody knows, in fines. So I wonder in these commercial pre-construction meetings, Did you find any evidence that in these meetings best management practices were discussed? The only, basically what we observed was that the checklist typically only contained the meeting date and the location. There was no documentation of persons in attendance or topics of discussion. Well, I guess I'd like to ask Commissioner Webb a question, if I might, because I know that within the last couple of weeks, I think you're aware of the new development situation where notices of violations have occurred, and it's out the Winchester Road corridor. And without, I don't want to get into detail about that project, but it seems to me that these pre-construction meetings would be really good place for best management practices to be discussed. So can you kind of... Actually, the plans that are reviewed for a grading permit include the best management practices, and those, the reason for the meeting in the field is to discuss the plan in the field and check those best management practices are in place before it goes forward. I have Chuck Saylor here that he can really give you more detail in that than I can. I think our issue here was that we weren't accurately recording the information about the meeting and who attended. Those meetings take place before every project. Yes. And it's a documentation issue. issue as some of the other issues we have, we do not have a procedure that includes standards for the information that needed to be recorded for every type of inspection that you do. And therefore, we had some of our inspectors did this level of recorded data, and some did this level. And what we need to do is develop a written standard that shows what needs to be for every inspection. And that we include in those anything that is required by regulation or statute or ordinance for that particular inspection as a required piece. Rather than we documented inspections by saying we went out and inspected. we need the date, the time, what we were there to inspect so that we start that record of chain of what's going on in that property. And that needs to be done the same by all inspectors. It's good to hear you say that because I think we've got to start doing that. This impacts us or will impact us in a lot of different ways. And I know that I appreciate, I believe, Cheryl Commissioner Taylor and some of her folks went out to this one particular site and actually had a meeting about best management practices. And it seems to me if that, once we do what you've just said, and once we do the best management practices at the front end, then we'll have a better situation all the way around. It concerns me because I think really and truly we could go back and look at quite a number of situations without getting into the details of them that fit in this category. Right. And I don't know if you have the complete report and my responses to the recommendations. If you have those, and I would share with you what I recommended and I am pursuing now. We've already addressed some of the minor things that we can do quickly. Those have already been done, including a reorganization. It's not a major reorganization. It's putting the right, put the people under the right, under a supervisor and making sure an engineer is signing off where they should be signing off. But overall, my recommendations are that we provide written documentation in the form of a procedure for what's required for every inspection and that we develop a process. I would term it a quality control or internal audit process, not one where an auditor comes in. But based on their findings, we catch those things that we look to be doing wrong or not doing completely. We develop that process, and then several times during the year, we do a self-internal audit where our inspectors work for the day before we go out and we check in to make sure the written documentation is what we see out in the field. We do an audit on the records that we're filing to make sure that engineering seals are in place on that, and we find those things ourselves. Where we have found those, you'll find in my responses that the steps that we take are that we document what we find internally, that we address or change whatever needs to be a change or address any issues we have with individuals, and then we follow up after that. And we document those changes that we make in the process as memos that people sign off on. so everybody's aware of what's expected. And then we follow up on that any issues that we had after we've gone through this is what's expected and this is what we found missing, this is how we handle it, just to make sure that the learning that we expected took place. And if it didn't, then we have additional issues that we have to go through. But that is what I'm proposing, what I'm pursuing, so that we take care of these issues. And what I feel that it will do as we go out and we look at work in the field versus paperwork that we get in and issues that are noted, those types of things, is it will do away with one of the issues I think that Council Member Blues was alluding to, is there seems to be a different inspector. I call it calibrating your eyes so that every inspector sees the same issue the same way and issues a notice of violation for that. And that's what we want for those folks that we go out and inspect. We want a standard that they can expect and that they can comply with. I greatly appreciate that. And I think that internal audit and picking up those issues where we have people looking at things differently will help us catch that. get the group back in, recalibrate with the group, and then send them back out again, and then follow up again. And that just becomes a continuous process. It really comes from my background in the utility industry where we had people in the same situation. They did not work in a building. They did not work under direct supervision. They worked in the field continuously. And, you know, we would have them in and do a training, and you think that that training takes place. And what we began to do was more and more auditing on the work that they were doing and dealing with those issues like that. And I have found very good success with that, and that's what I'm hoping we'll find from this. Again, you have to have people that are willing to sit down and do it the way you want to do it, but that becomes a different type of issue if you don't have that. But from some of the early things that I heard about inspection problems, a lot of it I do believe comes from the fact that we don't have the calibration of the inspectors, how they view things and what they indicate is a notice. This is a notice of violation for this one. The next one looks at it. That's not an issue. I'll just say something. We can, I think through the process I'm proposing, we can take care of that. And a lot of the documentation issues are already in the process of being corrected. We started on those as soon as we got the audit. Well, I just want to say I appreciate your proactive stance on that. I know you haven't been here that long, so I do appreciate that. And I think all in all it will just make us for a better engineering division, and we we will be better able to fulfill the consent decree requirements because of it. So Chuck's been standing back there. I don't know if you want to say anything or not in response. No? Well, I appreciate it very much. Thank you. I would just share with you that I made a last stop before this meeting today to make sure that everyone understood what my intentions were and that they agreed with what we were going to do. Great. Thank you. Thank you, Mr. Chair. Thank you. Council Member James. Thank you. Commissioner, before you sit. Thank you. A couple of questions. One follow-up on what Council Member Gorton was talking about, about the checklist. Yes, ma'am. And I've sat in a couple of those pre-construction meetings, and I think it might be good for council members that are not familiar with that checklist, if you could share with us a copy of that checklist and the number, I think it's like two pages of questions that you go through for pre-construction because I think the issues of the best management practices could potentially be implemented into that checklist. So instead of it being a separate meeting, we can maybe take a look at that checklist to see if it could incorporate all of our concerns. There will be a best management practices for every grading plan. Some of those plans may include things that others don't. All of them will potentially include things like silt fence, construction entrance, those types of things. And I believe, correct me if I'm wrong, but this checklist was to identify the things that we discussed in the actual meeting out in the field. And the meeting out in the field happens after the pre-construction meeting? No, that is the pre-construction meeting. As you meet out in the field, we'll receive a grading plan. It'll be reviewed and it'll be checked off. The engineering will do their checkoffs in the new development section. But then before construction starts, for commercial and industrial type sites, We actually will meet on site, and then what we're asked to do is to check off the items that we discussed on site. Okay. I guess what I'm thinking is the meeting I'm familiar with is a two-pager. I think it may go up to number 16, 17. I can't remember what it goes up to, but it's a checklist. All the utility companies are there. The contractor is there. different folks are there from different divisions of government, and you go through, you know, you're looking at minority participation, you're looking at that kind of thing. Is that a similar thing that you talked about in engineering? I don't think we're talking about the same thing. Yeah, I don't think so. Typically for pre-construction, that meeting occurs after we have accepted the construction plans. Okay. At that meeting, we'll request that the engineer of record be there, contractor, anybody from sanitary sewers if there's an issue with that, urban forester. Utilities typically are not there at that meeting. Okay. It's typically those folks. And probably half, if not more, of the time is spent discussing the best management practices. Okay. The other half is probably on the infrastructure. But once that meeting has concluded, they're free to install the best management practices for the first phase of their construction. We then go back and inspect that. If that's okay, then we can issue the grading permit. But that's typically how our meeting transpires from beginning to end. Is there a meeting that shows the utility placement in any project? Not that we're typically involved with, no. All right. Thank you. Commissioner, another question. Is a couple, well, at least one of the recommendations, recommendation number, let's see. Number two, where it talks about unannounced field level reviews of inspection, do you have the staff to be able to do that? Well, that was my presumption that we would be able to do that internally, but not one of the inspectors internally. We would go out and do that internal check. what I think what auditing had indicated was a spot inspection. I look at it more as a complete process, a process that we lay out again in procedure form. You know, so many times a quarter we'll check work. So many times a quarter we will, or biannually we will check files. We would just lay that out as a procedure. That would become our process. But one thing we would not do is tell an inspector that tomorrow we're going to check your work. It would just be a preset thing, and then we would take so much work and go out and inspect what was done or check what was done yesterday to verify the accuracy of that work. Who's we? Who's we when you say we'll do that? We have two ways to do this in my mind. One would be to hire a consultant to do this. The other way would be for the management component in engineering to do that. And I would really look to Cheryl Taylor to help us. She has more expertise in the EPA area. Okay. And we may ask her to share in those inspections until we all get calibrated. Some of the consent decree stuff is relatively new. and our folks haven't been extensively trained, and it takes that calibration by a professional to really get you to where you need to be. And I recognize that as we've gone through this audit. I've recognized the amount of training that our folks have gotten in those areas. And in the end, I think how it would progress, the time frame would really depend on how much we're finding as issues. The more issues we have, the more we'll have to do it to make sure that those issues aren't there. As they taper off, then we may be able to get to a quarterly or maybe at some point biannually. I couldn't say right now. It really would depend on that. And then if we have a regular internal audit, then that would be a second check of, yeah, you are finding the things and getting them corrected before we're getting here. So within the next six months, you're going to have to decide whether you're going to hire a consultant or someone internally take care of that. My approach would be to work with Commissioner Taylor on the water quality component and let us work internally on the inspections that are strictly engineering-type inspections. And if we have issues and can't work it out, that may be the way we need to go. And I have already talked to Commissioner Taylor about the need for additional training. Okay. That was going to be my next question. She is agreeable to support us. I was going to say that was my next question is did you, within this year's budget, how much did you put towards professional development and training? I did not put any in there specifically for this. I can't quote a figure right now, but I did have conversations with Commissioner Taylor prior. And this training on the water quality component would be used by not only engineering folks, but the other folks that are doing that type of inspections through water quality. Okay. All right. Thank you. Next questions, Mr. Salley. The questions are findings number six and seven, which are at the top of the second page there. Who right now is responsible for overseeing, from your findings, who's responsible for overseeing the engineering procedures manual and making sure that we're in compliance with that? Well, the overall responsibility of that division, of course, rests with the director. I don't know who is assigned specifically those particular areas, though, but he has the overall responsibility. And do you know from your findings, did you find out is everyone familiar with that? Like if you work for the Division of Engineering, does everyone have to know that manual, check off that they read it, reviewed it, acknowledge it? I'm not aware of anything that requires them to sign off that they read it. I will tell you these manuals are voluminous. I mean, I think they're more than 1,000 pages. There's several manuals, highly, highly detailed, highly technical. So to say whether or not those have actually been read and understood by other people, I don't have an answer to that question. Okay. Would that be something that we would want to recommend, is that there be some type of training on this particular manual for manual guides of division? I think it would certainly be a good idea to make sure that everybody, that his responsibility that rests within this manual to say, yes, we have read it, yes, we understand it, and we've approached our management with any questions we may have about our responsibilities. Yes, I think it would be a good idea. Okay, and kind of with that, the number seven, the one that talks about placing reliance on external licensed professional engineers, is that because we don't have the level of expertise within the division? Should we be aiming towards educating the folks that work for us to be able to do this as opposed to outside entities? Or is that just a third party kind of that you want to have? Well, we felt that the high-priority findings that were identified in the report, coupled with the fact that they only have four licensed professional engineers, we felt that indicated that the NDS processes and the available NDS personnel were not sufficient to assume those additional responsibilities and the associated risk of liability it could incur to urban county government. Okay. So it was our opinion that the financial and compliance risk would likely increase if urban county government once again assumed primary responsibility for detailed review of development plans. Okay. So what happens now if we're found that we're not compliant and if what we've done is not compliant with the manual, what's the penalty? There's a financial penalty. I don't know of any particular financial penalty, and you may be getting into a question that it's a hypothetical question, I realize. It might be something that the law department could maybe give you more information on, speaking from a hypothetical violation perspective. Okay. Does that make sense? Okay. All right. Thank you. I do ask, Mr. Solly, that it seems like maybe in about six months or so you'll go back and take a look at. I'd be interested in having you report back to this committee at that time, maybe January or February, and let us know how all these things have been met. I'd be happy to do so. Okay. Thank you. Anyone else have any questions regarding the new development engineering report? Okay. Moving right along to our next agenda item. We have the general list of recommendations from our past budget discussions. This, if you all remember, is a list that we had included in our budget council links, and we put it in here today for discussions on how to move forward. And one of the recommendations I'd like to make, if it pleases the committee, is to have each counseling chair report out to this committee, either on a quarterly basis or as needed, as we work down those recommendations and who's going to be responsible within that link to follow through with them or place them on a council docket. For example, under Public Works, a motion to place nepotism in the Intergov Committee for discussion, I assume, would be made by Council Member James at a work session whenever you choose to. But if we could work in that pattern, if that's okay with everyone, the link chairs can report out and follow up on each of these items instead of the whole committee going through each one and bring them to the committee one by one as the whole committee needs to address them. And that would be one idea, and we'd have a motion to along those effects. Councilman Martin? Thank you, Mr. Chair. There were some individual recommendations made as well, and they didn't seem to make it to this list. Are we going to have a – do you know what we're going to do with those? Well, we could handle it one or two ways. Each individual person can bring those up and add them to our list here, and we can have that person address it. I like to do any committee item, or we could go back to the chairs and ask the chairs to address them, whichever way you'd prefer to handle them. But it'd either be placing into committee like any other item on our agendas, or letting the chair of the council link, budget link, work with you. So the individuals making some of those recommendations might make a motion at work session to have it referred to a committee then? That's correct. Thank you. Anyone else? Have any discussion items on this list and how we want to proceed? It is. Excuse me, Chairman. I make a motion we adopt your policy. Do refer you back to the Lynx Committees and have them report out when appropriate. So move. Okay. We have a motion on the floor. Any discussion on that motion? All in favor say aye. Aye. Nay. Okay. So that passes. Next on our item was the discussion of the Urban Services Fund Balance. And if Mr. O'Meara will come up to the microphone again. We have a copy of this year's budget page that shows the summary of revenue and the expenses for the Urban Services Fund. This is the fund that makes up our land, or I'm sorry, our solid waste property tax, our street cleaning property tax, as well as our street light property tax. It's one of the funds that does have a fund balance, and that's one of the reasons why we put it into this committee to discuss what that fund balance is and get a better reporting out during this committee as well, as Vice Mayor Gray alluded to earlier, as to what component of each of those three is making up the fund balance and how much each of those three are adding to the fund balance. I believe Mr. O'Mara will be prepared to have that information in August in terms of the details of each of the three different funds, as well as the landfill user fee, which is another fund we want to look at that doesn't add into this fund, but it's a separate fund. So you want to comment on that and kind of give us a quick overview of what you're working on behind the scenes here? I'm glad to. I've been working with both accounting and water quality or, no, environmental quality. Excuse me. Yes, sir. I was half right. to work on preparing what you've asked for as well as management reference information that they can use. And some of these revenues are joined together. The property tax is paid to us in a lump sum, and we're having to come up with a way in order to split that out properly to show the right amount that goes to each of the dedicated areas. Others are more specific, such as dumpster fees or recycling fees and everything, that are easier to identify. And so we're going and preparing management reports that tie to the CAFR, the audited financial statements for the past, as well as work with environmental quality as to what they see is what the use of funds or programs that they want funded through these funds in out years. I hope to have that to you in August. And we've started the project. We have not completed the project, and we're here basically to give you that update. The landfill, I did not have on my radar until yesterday, although that I'll have to get to work on because I don't have as much sleeves rolled up and know some details in order to comment on that today. And the reason I ask that to be in this committee is because during the discussions of the stormwater management fee, we do have a plan for user fee of $4.50 on our water bills that may or may not still be needed, And that's part of those discussions as to what the balance of that fund is and how much we're really spending out of that fund and how much do we need to spend to close our landfills. So if you could bring that to us as well for discussion. And you said by August you'll be able to have the breakdown of the street cleaning, street lights, and solid waste from what it makes up the urban services funds. And what is the current fund balance? We have that. Total full urban services is in the $33 million range. Okay. Okay. Questions from committee members. I see Council Member Gordon. That is as of 08, excuse me. As of 08. Thank you, Mr. Chair. I don't really have a question. I just have a comment. And, Bill, I appreciate that you're going to work on this. I think it's critical we have to know what is in each fund because the citizens are paying these taxes based on the need to pay for the service. And this is how we were able several years ago to lower the – we knew what was in every fund, and we were able to – you'll remember this – lower – I believe we lowered the streetlight tax and maybe one other in order to make it a neutral move to put on the health tax. And for me personally, it's important because at some point we may be able to lower the tax for our citizens, but we can't do it if we don't know how much is in the fund. So I appreciate your working on this, and I understand part of it had to do with switching to the – we were not billing it anymore, switching to the sheriff. But I will look forward to seeing what each of those funds has. Thank you so much for that work. Council Member James. Thank you, Chair. I would throw just a little bit of caution out there. As citizens heard a $33 million fund balance in the landfill or urban services district fund, I've been talking pretty extensively with Commissioner Taylor regarding at least solid waste and know that there are some – our citizens need to understand it's not just about the services that are provided, but about operations and about capital as well. So where we think we may not, you know, there's a balance and, you know, their garbage is getting picked up every day and their recyclables are getting picked up, and what's the problem? We have not upgraded our waste management operations in probably over 25 years. So we need to make sure that we have the equipment that's necessary and the capital, the buildings that are necessary, and there are some plans to do things to upgrade that actually would potentially increase our revenues from this as well. Cities are really utilizing their recyclables as a generator of revenues, and we have an opportunity to be a regional recycle center. But we know, as we saw with stormwater, it takes investment to get things up to where it needs to be up to par, to where it benefits us, to where it not even benefits us, but puts us to a standard. So even though your garbage is getting picked up, the recyclables are getting picked up, it doesn't mean that everything's done. We need to look at the years of non-investment and something that we cannot do without. So as we look at a number of a balance, we've got to look at what the expenditures are. kind of the way I think about it is if I looked in Councilmember Stenet's bank account and saw $10,000 balance in there and think I can go out and spend it and get everything that I need or he needs or a community needs, I have to think about what he or his family have planned for that $10,000 before I say, you sure you do have a lot of money in your bank account. So just a little bit of caution. Let's make sure we hear from the divisions of government that have been making plans and been working hard to do that before we look at changing anything and also look at what the options are as far as ways to generate revenue. Thank you. Anyone else have any comments on the Urban Services Fund? That's from Arlene. Yeah, I was just going to say that was a bad example. Mr. Stenner probably has $100,000 as his checking account. I will add a couple comments to that. One thing I did also ask Commissioner Taylor and look at these three funds, and she's been working very hard on this, we still do not know as a government how much it costs to pick up one Herbie, one Rosie, one Lenny, et cetera. And hopefully she'll be able to tell us that because we can't manage what we can't measure. And right now we can't measure it. We're taking in revenues. And the problem is not the fund balance. The problem is future fund balances and how do we correct it so we're not taking more money from our taxpayers than we need to be taking. Or instead of taking money from there to pay for a service that we have access, we need to pay for other services in government because, just to be clear, the Urban Services Fund can only be spent on what it's collected for. So we should spend every dime of that surplus on those items if they're needed. And I think in this year's budget, and you can correct me, Bill, and Commissioner Taylor is here, we spent close to $9 million for that surplus with the new recycling center upgrades and the new truck capital bonds, which are about $8 million, too. So we spent a lot of money this past year to upgrade our system and needed so. But we've got to get to the end of why we're generating a fund balance every year and which one of these three is contributing the most to it. I know the street cleaning is currently in. Hopefully it will be soon by a consultant looked at, which could possibly be added to our water management fee in the future, and that could be another opportunity to save people money and pay for dedicated service through a dedicated fee that gets the whole city covered. So those are just the thoughts I had. We'll have this issue in our August meeting. In addition to the business occupational license, Councilman Beard put that into committee actually last year. And we'll have a discussion on that because I think there's some misinformation out there on that $100 a year for the business occupational fee that we need to clear up. And this council also knows the opportunity, as we do with any ordinance or resolution, in changing that. So I know there's been a lot of comments out there about refereeing and realtors in Fayette County and things like that. So this will be an opportunity to discuss that at our August meeting, so before we get to the year in taxes and everything. and Mr. O'Mara has a pretty concise ordinance to deal with collecting that occupational fee, but we have a chance as a body to change it, upgrade an improvement, and do what we need to do. So does anybody else have anything else they'd like to see on the August meeting when we come back from break? We'll have the business occupational. Obviously, our revenue numbers will be back. So is the Urban Services Fund. All right. Do I have a motion to adjourn? Okay. All in favor say aye. Opposed nay, we're adjourned. I'm sorry. If you're watching me Oh yeah Oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh She was practiced at the art of deception Well, I could tell by her bloodstained hands You can't always get what you are You can't always get what you are You can't always get what you are But if you try sometime, it's just my fine, it's just my fine I can watch a name for you, for you Can't always get what you want, no roses Can't always get what you want, darling man I can't, I'll let you know what you want And if you try sometime, it's just my friend You do my friend, it doesn't work It's about me I'm set to go Thank you. Thank you. Yeah. Yeah. We should lose you. And I don't know what I'm going to. So soon I die. I don't need a reason why. I I know you win They can't run and joke as fast as you can They can go crazy about a sharp-dressed man We'll be right back. I'm out. Looking sharp, looking for love They caught the blood and took the past again Cause every girl crazy about a shot this way That's right, that's right That's right, that's right I'm fine. We'll be right back. Just look at you Sitting there Never looked better than tonight And it'd be so easy To tell you I'd stay Like I've done so many times I was so sure This would be the night You close the door and why don't you stay with me And it'd be so easy to tell you I'd stay Like I've done so many times Don't fall in love with a dreamer Cause he'll always take you in Just when you think you've really changed him He'll leave you again Don't fall in love with a dreamer Cause he'll break you every time Oh, put out the light Just hold on Before we say goodbye Now it's morning and the phone rings And you say you've got to get your things together You just gotta leave before you change your mind And if you knew what I was thinking, girl I'd turn around If you'd just ask me one more time Don't fall in love with a dreamer Cause he'll always take you here Just when you think you've really changed him He'll leave you again Don't fall in love with a dreamer Cause he'll break you every time Oh, put out a lie And just hold on Before we say goodbye Before we say goodbye Goodbye Thank you. guitar solo Oh, poor ghetto woman Waiting for a man to come on She's just a ghetto woman Waiting for a man to come on A rat run across the floor A rope run up the wall Everything is noise around her Don't seem to bother her at all Cause she's a ghetto woman Sitting there all alone She's just a ghetto woman Waiting for a man to come home guitar solo Playin' the low down dirty blue My ghetto She's all alone She's just a ghetto Waitin' for a man to come home Oh, she's a ghetto woman Say she's a ghetto woman Oh, ghetto woman What's on your mind? Sometimes I look in your face King of a drug guitar solo Oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh