Council Budget & Finance Committee

Summary

Meeting Overview

The Budget & Finance Committee met on August 28, 2012, at 1:00 p.m., with Ed Lane presiding. The committee addressed four agenda items during the meeting, including a Monthly Financial Report and an Employee Medical Insurance Financials presentation, both presented for informational purposes. Two items—the FY 12 Financial Audit Timeline and Items Referred to Committee—were deferred for future consideration. The committee heard four public comments and took one motion and vote during the session.

Attendance

The following individuals were present at the meeting on August 28, 2012:

• Ed Lane
• Jane Driscoll
• Bill Barrett
• Ryan
• Phyllis Cooper
• Benji Myers
• Paul Schoeniger
• George Meyer
• Council Member Blues
• Council Member Kaye
• Council Member Farmer
• Council Member Beard
• Vice Mayor Gordon

No absences or late arrivals were recorded.

Votes and Decisions

Adjournment of the Meeting

Vice Mayor Gordon moved to adjourn the meeting, seconded by Council Member Farmer. The motion passed by voice vote at 1:07:54.

The following members voted in favor of adjournment: - Ed Lane - Jane Driscoll - Bill Barrett - Ryan - Phyllis Cooper - Benji Myers - Paul Schoeniger - George Meyer - Council Member Blues - Council Member Kaye - Council Member Farmer - Council Member Beard - Vice Mayor Gordon

No votes were cast against the motion, and there were no abstentions.

Public Comment

Several council members and attendees raised concerns during the meeting regarding audit timelines, financial reporting, and health care program implementation.

Audit Timeline and CAFR Submission

Vice Mayor Gordon 26:16 expressed concern that the Comprehensive Annual Financial Report (CAFR) completion target of November 28th would result in the Council not receiving the report until after the final meeting of the year. He urged the audit team to aim for delivery by November 27th to allow for meaningful review and timely budget preparation.

Council Member Farmer 30:11 similarly raised strong concerns about the CAFR timeline, noting that the report would not be available to the Council until after the November 27th Budget & Finance Committee meeting. He criticized this timing as inadequate for critical budget planning and implied the audit team should be compelled to deliver the report by the final meeting of the year.

Health Care Strategy and Wellness Program

Council Member Myers 1:00:15 questioned why the wellness program had not been implemented earlier despite promises of significant savings. He expressed concern that the HR department had not taken ownership of the health care process and that incentive-based wellness initiatives remained pending.

George Meyer 58:03 asked about the duration of the health care consultant contract and when the HR department would assume management of the program. He also questioned why the wellness program had not been launched earlier, despite prior commitments to do so.

Contested Items

Audit Timeline and CAFR Delivery

A heated discussion emerged regarding the November 28th completion target for the Comprehensive Annual Financial Report (CAFR). Council Member Farmer and Vice Mayor Gordon strongly criticized this timeline, arguing that it delayed critical budget planning and undermined the committee's ability to act before the new fiscal year. The council members expressed frustration over the timing, despite acknowledging the audit team's efforts to accelerate the process. The core disagreement centered on whether the proposed deadline would allow sufficient time for meaningful financial review and decision-making before fiscal year transitions.

Health Care Consultant and Wellness Program Implementation

A split vote occurred over the health care consultant contract and wellness program implementation. Council Member Myers raised significant concerns that the wellness program had not been launched as promised, despite two years of consultant involvement. He questioned the HR department's lack of ownership over the initiative and criticized the delayed rollout of incentive-based wellness programs. Myers suggested that the overall strategy had been misaligned with the council's original expectations for the program's scope and timeline. This disagreement reflected broader concerns about accountability and follow-through on previously approved initiatives, with the split vote indicating that council members held differing views on how to proceed with the consultant relationship and wellness program going forward.

Monthly Financial Report

Jane Driscoll, Commissioner of Finance, presented the July 2012 financial report 4:28. The presentation covered unemployment trends, revenue performance, and expense variances for the period.

Key Findings

The report highlighted a 6.6% unemployment rate in Fayette County. Revenue performance showed strong results in withholding and franchise fees during the month.

Concerns and Considerations

Driscoll noted caution regarding personnel expenses, as one pay period was recorded during the reporting period, which affected the expense figures presented. Additionally, the report included preliminary estimates indicating a $1 million impact from Lexmark's announcement.

Speakers and Discussion

Bill Barrett and Ryan participated in the discussion alongside Driscoll during the presentation.

Outcome

This agenda item was presented as informational, providing the governing body with an overview of the municipality's financial status for July 2012.

FY 12 Financial Audit Timeline

The committee discussed the timeline for completing the fiscal year 2012 audit and the Comprehensive Annual Financial Report (CAFR) 20:00.

Target Completion Date and Concerns

The team initially set November 28 as the target completion date for the audit. However, Vice Mayor Gordon and Council Member Farmer raised concerns about this timeline, noting that it would delay the report until after the final Budget & Finance Committee meeting of the year.

Key Speakers

Jane Driscoll and Phyllis Cooper presented on the audit timeline, while Vice Mayor Gordon and Council Member Farmer voiced concerns about the proposed schedule.

Resolution

In response to the concerns raised, the team agreed to provide a preliminary report by November 27th, even if the audit was not fully completed at that time. This adjustment would allow the committee to review the report before the final Budget & Finance Committee meeting of the fiscal year.

Outcome

The discussion was deferred, indicating that further action or decisions on this matter may be needed at a future meeting.

Employee Medical Insurance Financials

41:56

Benji Myers and Paul Schoeniger presented an analysis of the organization's employee medical insurance costs and financial performance.

Financial Overview

The presentation showed that actual expenses totaled $14.6 million year-to-date, compared to $14.1 million in premiums collected. The report detailed the components of these costs, including fixed fees, HSA contributions, medical claims, and pharmacy expenses.

Cost Reduction Achievements

A significant finding was a $12 million reduction in projected costs from 2011. This improvement resulted from three key factors:

• Implementation of reinsurance
• A new pharmacy benefit manager (PBM) contract
• Plan design changes

Outcome

This agenda item was presented for informational purposes, providing the organization with a comprehensive overview of medical insurance financial performance and the cost management strategies that have contributed to reduced expenses compared to prior year projections.

Items Referred to Committee

During this agenda item, the committee addressed the status of a reinvigorated purchasing and procurement task force. 1:06:48

Vice Mayor Gordon led the discussion, noting uncertainty about whether the task force had resumed its meetings. The committee was unable to confirm the current operational status of the group at the time of the meeting.

No action was taken on this matter. The discussion was deferred, with the item left open for follow-up at a future meeting.