Special Meeting - Council Budget and Finance Committee

Summary

Meeting Overview

The Budget & Finance Committee met on December 10, 2013, at 2:00 p.m., with Ellinger presiding. The committee addressed three agenda items during the session, which included approval of the previous meeting's summary, an informational presentation on the Comprehensive Annual Financial Report (2013 CAFR), and consideration of items referred to the committee. The committee took three votes during the meeting and heard three public comments. One agenda item—the November 19, 2013 Committee Summary—was approved, while the presentation on the 2013 CAFR was received for informational purposes. The Items Referred to Committee were deferred for future consideration.

Attendance

The following individuals were present at the meeting on December 10, 2013:

• Ellinger
• Stinnett
• Gorton
• Kay
• Ford
• Beard
• Farmer
• Scutchfield
• Mossotti
• Henson

No absences or late arrivals were recorded.

Votes and Decisions

The committee took three votes during this meeting, all of which passed by voice vote with no opposition.

Approval of the November 19, 2013, Committee Summary 2:00

A motion was made by Beard and seconded by Massadi to approve the November 19, 2013, Committee Summary. The motion passed by voice vote. The following members voted in favor: Ellinger, Stinnett, Gorton, Kay, Ford, Beard, Farmer, Scutchfield, Mossotti, and Henson. No members voted against the motion, and there were no abstentions.

Removal of the Solid Waste Task Force from the Committee Agenda 20:30

A motion was made by Stinnett and seconded by Henderson to remove the Solid Waste Task Force from the committee agenda. The motion passed by voice vote. The following members voted in favor: Ellinger, Stinnett, Gorton, Kay, Ford, Beard, Farmer, Scutchfield, Mossotti, and Henson. No members voted against the motion, and there were no abstentions.

Removal of the Debt Management Policy from the Committee Agenda 20:30

A motion was made by Stinnett and seconded by Henderson to remove the Debt Management Policy from the committee agenda. The motion passed by voice vote. The following members voted in favor: Ellinger, Stinnett, Gorton, Kay, Ford, Beard, Farmer, Scutchfield, Mossotti, and Henson. No members voted against the motion, and there were no abstentions.

Budget and Financial Actions

The meeting addressed funding for the 2013 Comprehensive Annual Financial Report (CAFR) and the associated audit process. No specific dollar amount, vendor information, or resolution identifier was documented for this financial action.

Public Comment

Three council members provided comments during the meeting.

Vice Mayor Gordon 16:09 expressed appreciation for the Finance Department's timely delivery of the Comprehensive Annual Financial Report (CAFR) before the holiday break. Vice Mayor Gordon noted this represented a significant improvement over previous years, when the CAFR had arrived in February.

Council Member Kaye 13:29 asked about the health insurance reserve and claims experience. Council Member Kaye confirmed that the $2 million reserve is based on actuarial projections and indicated that the reserve will be updated after calendar year 2013 claims are processed. Council Member Kaye noted this update is expected by late February.

Council Member Beard 23:36 raised a concern about potential legal obligations related to the Ben Ally case and the Arts Center. Council Member Beard noted that legal obligations may require maintaining certain revenue streams for the Arts Center and suggested that a legal review be conducted to address this matter.

Contested Items

LexArts Financial Support and Downtown Arts Center Revenue Retention

A significant disagreement emerged regarding the financial arrangement between the city and LexArts, specifically concerning whether to reduce financial support to LexArts in exchange for allowing the Downtown Arts Center to retain program revenue.

The core dispute centered on two main concerns. First, participants debated the legal obligations tied to any reduction in city funding to LexArts. Second, there was disagreement about the distinction between operational support and arts fund support, with questions about how these different funding categories should be treated under the proposed arrangement.

The debate reflected broader questions about how to balance the city's financial commitments to LexArts against the Downtown Arts Center's need to retain revenue from its programs. Some participants expressed concern that reducing support to LexArts could create legal complications or violate existing agreements, while others saw potential benefits in allowing the Downtown Arts Center greater financial autonomy through revenue retention.

The item resulted in a split vote, indicating that council members or committee members were divided on the appropriate course of action. This division suggests the proposal did not achieve consensus, with some members supporting the revenue retention arrangement and others opposing it based on the legal and financial concerns raised during discussion.

November 19, 2013 Committee Summary

The committee reviewed and approved the summary from the previous meeting held on November 19, 2013. 2:00

Key Speakers - Beard - Massadi

Discussion The committee examined the meeting summary document and identified a minor typographical error that required correction before final approval.

Outcome The committee approved the November 19, 2013 meeting summary with the noted correction applied to the document.

Comprehensive Annual Financial Report (2013 CAFR)

Bill O'Mara presented the 2013 Comprehensive Annual Financial Report (CAFR) to the board 3:05. The report had received a clean opinion from auditors on November 15.

Key Financial Information Reviewed

The presentation covered fund balances across multiple funds, including: - General Fund - Urban Services Fund - Sanitary Sewer Fund - Additional funds as part of the comprehensive financial overview

Topics of Discussion

The board's discussion focused on several areas: - Reserve levels across the various funds - Pension funding status - Health insurance funding

Concerns Raised

During the discussion, participants identified a need for better communication with project managers regarding financial matters.

Participants

The agenda item involved remarks and discussion from O'Mara, Stinnett, Kaye, and Gordon.

Outcome

This item was presented for informational purposes.

Items Referred to Committee

16:43

During this agenda item, the council discussed several matters that had been referred to committee. The following items were addressed:

• Solid Waste Task Force
• Purchasing task force
• Activity-based costing
• Affordable Housing Trust Fund
• Franchise fees
• Debt management policy
• Urban services refund policy
• Parking fines
• LexArts financial support

Key speakers during this discussion included Schoeniger, Stinnett, Kaye, Ford, Clark, and Beard.

Most of the items under review were deferred or removed from consideration at this time. The council indicated that updates on these matters are expected to be provided in January.

Outcome: Deferred