Budget & Finance Committee

Summary

Meeting Overview

The Budget & Finance Committee met on September 23, 2014, at 1:00 p.m., with Ellinger presiding. The committee addressed five agenda items during the session, which included approval of the August 26 Committee Summary and the Economic Development Performance Measures. Two informational presentations were provided: the Monthly Financial Report and the Lyric Theater Audit. The committee took four votes during the meeting and heard nine public comments. One agenda item, Items Referred to Committee, was deferred for future consideration.

Attendance

Present: Ellinger, Stinnett, Gorton, Kay, Ford, Beard, Farmer, Scutchfield, Mossotti, Henson

Absent: Clarke, Lane

Late: None

Votes and Decisions

Approval of the August 26, 2014 Committee Summary 4:02

A motion by Farmer, seconded by Mossotti, to approve the August 26, 2014 Committee Summary passed by voice vote. All members present voted in favor.

Removal of Economic Development Partner Agencies from the Agenda 31:20

A motion by Scutchfield, seconded by Gorton, to remove Economic Development Partner Agencies from the agenda passed by voice vote. All members present voted in favor.

Motion to Remove the Activity-Based Costing Item from Committee 36:04

A motion by Gorton, seconded by Kay, to remove the activity-based costing item from committee failed by roll call vote. The vote was 5 in favor and 4 opposed.

Members voting in favor: - Ellinger - Stinnett - Gorton - Ford - Beard

Members voting against: - Kay - Farmer - Scutchfield - Mossotti

Adjournment of the Meeting 37:43

A motion by Farmer, seconded by Gorton, to adjourn the meeting passed by voice vote. All members present voted in favor.

Budget and Financial Actions

The meeting addressed two significant financial items requiring appropriation and contract approval.

Courthouse Maintenance Services Reimbursement

An appropriation of $136,000 was approved for reimbursement to the Kentucky Administrative Office of the Courts for courthouse maintenance services. This funding covers essential upkeep and operational expenses for court facilities.

Rupp Arena Planning Phase Expenditures

A contract valued at $4.6 million was approved for the Lexington Center Board to cover planning phase expenditures for Rupp Arena. This funding supports the initial planning and design work for the arena project.

Public Comment

Several council members raised questions and provided updates on various agenda items during the meeting.

Franchise Fees and Utility Payments

Vice Mayor Gordon sought clarification on franchise fee timing and was informed that higher-than-budgeted utility payments resulted from actual collections exceeding historical averages. 7:42

Contract Processing Delays

Vice Mayor Gordon inquired about delays in contract approvals during the summer recess. Staff reported that some contracts, including those for the detention center, experienced processing delays but were expected to be resolved within a month. 10:57

Nonprofit Partner Performance Measurement

Council Member Sani asked how the committee would measure return on investment for nonprofit agencies that do not generate monetary returns. The response indicated that performance is tied to agencies' stated scope of work and quarterly reporting requirements. 16:34

Audit Process and Partner Input

Council Member Clark inquired about partner agency input into the new reporting form and follow-up procedures. Staff confirmed that partners had provided input on the reporting form and that Kevin Atkins reviews reports before sharing them with the council. 19:12

Annual Reporting Format

Council Member McKay suggested implementing a rotating annual roll-up report for agencies to present a consolidated view of their quarterly data. Staff indicated this format could be considered in future years. 21:58

Lyric Theatre Audit

Council Member Ford supported the independent audit for the Lyric Theatre, noting it would build community trust and support fundraising efforts. Ford suggested delaying the internal audit until after the external audit is completed. 28:04 Council Member Clark emphasized that the audit represented a positive step to recognize progress at the organization and reinforce its solid foundation. 29:45

Solid Waste Task Force

Council Member Stenet announced that the solid waste task force would reconvene in November to review updated data, including the 2013 CAFR and new director input, to revise their cost model. 32:57

Wellness Center RFI

The CAO confirmed that the RFI for the wellness center concept had been reviewed, with a final meeting scheduled for the following week and a full update expected before an RFP is issued. 34:31

Contested Items

Removal of Activity-Based Costing from Committee

A motion to remove activity-based costing from the committee's agenda resulted in a split vote, with the measure failing 5-4. The disagreement centered on whether the item should remain under committee review or be removed from consideration.

Those supporting continued review of activity-based costing prevailed, citing unresolved data needs as a reason to maintain the item on the agenda. Council Member Lane specifically advocated for keeping the topic available for further examination, and this position secured the support of a majority of voting members.

The close vote margin—with only one vote separating the two sides—reflected genuine division among committee members regarding the item's readiness for removal and the adequacy of information available for decision-making.

August 26 Committee Summary

4:02

The committee approved the summary of the August 26, 2014 meeting. Ellinger presented the summary, which had previously been approved at a work session. The summary was presented to the committee as informational.

Outcome: The August 26 Committee Summary was approved.

Monthly Financial Report

The committee reviewed the July 2014 financial report during this agenda item 4:32. Key speakers included O'Mara, Cook, and Lueker.

The report highlighted a $3.7 million surplus for the period. This surplus resulted from timing differences and higher-than-budgeted franchise fees. Personnel and operating expenses came in under budget, primarily due to delays in contract approvals that occurred during the summer recess.

This agenda item was presented for informational purposes, with no formal action required from the committee.

Economic Development Performance Measures

13:45

The committee discussed the implementation of a new quarterly reporting form for economic development partner agencies. The form was designed to track outcomes that are directly tied to each agency's specific scope of work, establishing a framework for measuring performance and results.

Key Discussion Points

Council members Scutchfield and Atkins led the discussion on this agenda item. A central theme of the conversation was the importance of accountability and transparency in how funds are utilized by economic development partners. The committee emphasized that partner agencies should be able to clearly demonstrate the outcomes and results achieved through their work and the resources allocated to them.

The quarterly reporting mechanism was presented as a tool to ensure that economic development efforts could be systematically monitored and evaluated, with results tied directly to each organization's defined responsibilities and objectives.

Outcome

The committee approved the new quarterly reporting form for economic development partner agencies.

Lyric Theater Audit

The Lyric Theatre board presented an update on the auditor selection process. Paula King and Bruce Ali led the discussion on the status of identifying an external auditor for the organization.

The board reported that a Request for Proposal (RFP) process had been conducted, resulting in four proposals from potential auditors. The selection process was ongoing, with a decision expected by October 15. Once an auditor was selected, the audit itself was scheduled to be completed by year-end.

In addition to the external audit process, the board noted that internal audit work had been authorized but had not yet been initiated at the time of this meeting.

The item was presented for informational purposes, with no formal action or vote required.

23:05

Items Referred to Committee

The committee reviewed several items that had been previously referred for further consideration. 31:20

Solid Waste Cost Model

The solid waste cost model was discussed, with plans to revisit this item in November for continued evaluation.

Activity-Based Costing

A motion regarding activity-based costing was brought before the committee. The motion to proceed with this item failed.

Wellness Center RFI

The committee received an update on the wellness center Request for Information (RFI). An updated report on this item is expected to be provided soon.

Future Reports

The committee noted that additional reports are anticipated on the following topics: - AOC reimbursement - Lyric audit

Key Participants

The discussion involved Stenet, Lane, and the CAO (Chief Administrative Officer).

Outcome

The items under this agenda section were deferred, with several scheduled for continued review at future meetings.