Council Budget & Finance Committee

Summary

Meeting Overview

The Budget & Finance Committee met on August 30, 2011, at 1:00 p.m. The committee addressed five agenda items, all of which were informational in nature. During the meeting, the committee heard one motion and received four public comments.

The agenda included a Monthly Budget Report, a time table discussion for the FY 11 Comprehensive Annual Financial Report (CAFR), a review of the FY 10 Management Letter, brainstorming on budget process ideas, and consideration of items referred to the committee. No votes were recorded during this meeting.

Attendance

The following individuals were present at the meeting on August 30, 2011:

• Ellinger
• Lane
• Gorton
• Kay
• Farmer
• Myers
• Beard
• Lawless
• Blues

No absences or late arrivals were recorded.

Votes and Decisions

The Budget & Finance Committee held one vote during this meeting.

Motion to Adjourn

Mr. Schoeniger moved to adjourn the Budget & Finance Committee meeting. The motion passed by voice vote 42:43.

The following members voted in favor of adjournment: - Ellinger - Lane - Gorton - Kay - Farmer - Myers - Beard - Lawless - Blues

No members voted against the motion.

Public Comment

Four speakers addressed the council during the public comment period, raising concerns about financial reporting timelines, budget processes, and fund management practices.

Mr. Lane 24:26 expressed concern about delays in receiving audited financial statements from component units. He noted that the Lexington Airport's audit was delayed due to ongoing construction activities. Mr. Lane emphasized the importance of engaging auditors earlier in the process to improve the timing of financial report delivery.

Council Member Kay 26:33 questioned the mismatch between budget report formats and the certified audit (CAFR). He suggested that aligning these formats would enhance comparability and facilitate trend analysis across financial documents.

Council Member Beard 33:58 inquired about how fund balances from external agencies are managed at year-end. Specifically, he asked whether these balances roll over to the following year or are reserved in rainy-day funds.

Dr. Cain 35:04 advocated for improvements to the budget process, calling for a more thoughtful and proactive approach. Dr. Cain recommended earlier engagement with departments, including a dedicated priority-setting session and better coordination of analytical information across all departments to support more informed decision-making.

Contested Items

Timing of CAFR and Audited Fund Balance

Council members engaged in a heated discussion regarding the delayed timeline for receiving audited financial statements. The primary concern centered on the Comprehensive Annual Financial Report (CAFR) and audited fund balance arriving too late to meaningfully inform budget decisions. Council members expressed frustration with this schedule and called for the process to be accelerated to November to better support their budgeting work. In response, the administration acknowledged the challenge posed by the current timeline and committed to proactive coordination with component units to improve the delivery schedule going forward.

Format Mismatch Between Budget and Audit Reports

A split vote emerged over whether the CAFR format should be restructured to mirror the budget format for improved comparability between the two documents. Some council members advocated for aligning the formats to make it easier to cross-reference budget projections with audit results. However, the administration explained that accounting standards requirements necessitate the current CAFR format and prevent the alignment that council members sought. This disagreement reflected differing priorities between those prioritizing practical usability and those bound by regulatory compliance standards.

Monthly Budget Report (1-11)

The committee reviewed the monthly budget report during this agenda item. 14:30

Key Speakers

Mr. Lane and Council Member Kay led the discussion on this presentation.

Discussion and Concerns

The committee's review focused on several timing and procedural matters related to the budget and financial reporting:

• Final Audited Fund Balance and CAFR: The committee discussed the timing of when the final audited fund balance and Comprehensive Annual Financial Report (CAFR) would be available.

• Delays from Component Units: Concerns were raised about delays in receiving financial information from component units, which was impacting the overall timeline for completing the audit and financial reporting process.

• Accelerated Audit Timeline: There was a desire expressed by the committee to move the audit timeline forward to November, presumably to expedite the completion of financial reporting.

Outcome

This agenda item was classified as informational in nature, indicating that the primary purpose was to present information to the committee rather than to make a decision or take formal action.

Time Table for FY 11 CAFR (9-10)

The committee discussed the timeline for completing the Fiscal Year 11 Comprehensive Annual Financial Report (CAFR) 19:56.

Key Participants

Mr. Lane and Dr. Cain led the discussion on the CAFR completion schedule.

Discussion Points

The committee addressed concerns about the current schedule for delivering the FY 11 CAFR. A primary goal identified was to deliver the final audited fund balance by December. The administration indicated that draft financials could be available in November, which would support the timeline for completing the final audited report by the December deadline.

Outcome

This item was presented for informational purposes, with no formal action taken. The discussion established the expected timeline for CAFR completion, with November identified as the target month for draft financials and December as the target for the final audited fund balance.

FY 10 Management Letter Discussion (12-21)

The committee reviewed the FY 10 management letter during this agenda item 29:26. Mr. Schoeniger led the discussion.

The committee conducted a review of the FY 10 management letter without proceeding through a line-by-line examination. Members expressed general agreement with the contents presented.

No significant concerns were raised during the discussion, and the committee moved forward without requiring further action on this item. The outcome was informational in nature.

Budget Process Brainstorming Ideas

30:01

The committee engaged in an open dialogue focused on improving the budget process. Key participants in this discussion included Mr. Schoeniger, Dr. Cain, Council Member Kay, and Council Member Beard.

The committee explored several areas for potential improvement:

Earlier Engagement and Information Sharing The group discussed the need for earlier engagement with the administration during the budget cycle and emphasized the importance of better information sharing throughout the process.

LINCS Process Reconfiguration A significant suggestion involved reconfiguring the LINCS process to be used year-round, rather than limiting its application to a specific period within the budget cycle.

Standardized Reporting Formats The committee identified standardized reporting formats as a tool that could enhance consistency and clarity in budget documentation and presentations.

Revenue Forecasts Participants recommended implementing earlier revenue forecasts to allow for more advance planning and better-informed budget decisions.

This discussion was informational in nature, with the committee gathering ideas and perspectives on how to streamline and improve various aspects of the budget development and approval process. The suggestions reflected a focus on enhancing communication, extending planning horizons, and creating more consistent documentation practices across the budget cycle.

Items Referred to Committee (22)

41:37

Mr. Schoeniger provided updates on referred items during this informational segment of the meeting. The discussion covered five main areas:

• Board of Architecture review
• Catering definition
• Economic Continuity Ordinance
• Solid waste task force
• Procurement task force

No action was taken on any of the referred items during this portion of the meeting. The updates were presented for informational purposes only, allowing the body to remain apprised of the status of items previously referred to committee.

Following Mr. Schoeniger's updates, the committee moved to adjourn.