Budget, Finance and Economic Development Committee

Summary

Meeting Overview

The Budget, Finance, and Economic Development Committee met on February 24, 2015, at 1:00 p.m., with Stinnett presiding. The committee addressed five agenda items during the session, including approval of the previous meeting's summary, which was approved. The committee heard three informational presentations: a Jobs Fund Update, a Commerce Lexington Quarterly Update, and a review of Monthly Financials. Items referred to the committee were deferred for later consideration. The committee took six votes during the meeting and heard nine public comments.

Attendance

The following individuals were present at the meeting on February 24, 2015:

• Stinnett
• Moloney
• Kay
• Ford
• Farmer
• Scutchfield
• Brown
• Mossotti
• Bledsoe
• Lane

No absences or late arrivals were recorded.

Votes and Decisions

The following motions were voted on and passed by voice vote during the meeting:

Approval of January 27, 2015 Committee Meeting Summary 1:00 - Motion by Vice-Mayor Kay, seconded by Ford - The summary of the January 27, 2015 Committee meeting as amended was approved

Removal of Lyric Financial Audit from Committee 1:31 - Motion by Vice-Mayor Kay, seconded by Ford - The Lyric Financial Audit was removed from Committee

Removal of Collaboration Strategy Among Economic Development Agencies from Committee 1:31 - Motion by Ford, seconded by Scutchfield - Collaboration Strategy Among Economic Development Agencies was removed from Committee

Removal of DDA 10-Year Development Plan from Committee 1:31 - Motion by Ford, seconded by Brown - The DDA 10-Year Development Plan was removed from Committee

Removal of Jobs Program Review from Committee 1:00:04 - Motion by Ford, seconded by Brown - The Jobs Program Review was removed from Committee

Adjournment 1:01:04 - Motion by Scutchfield, seconded by Farmer - The meeting was adjourned

All motions passed by voice vote with no recorded abstentions.

Budget and Financial Actions

The meeting included approval of two financial incentives totaling $200,000 to support job creation and retention in the region.

Grant Award to Sumitomo Electric Wiring Systems

A grant of $100,000 was awarded to Sumitomo Electric Wiring Systems. This incentive supports the retention of 28 existing jobs and the creation of 10 new jobs.

Loan Incentive to MedSignals Vital Signals

A loan incentive of $100,000 was awarded to MedSignals Vital Signals to support the creation of 11 new jobs.

Public Comment

The following council members raised questions and concerns during the meeting:

Council Member Brown 1:00 requested a correction to the meeting minutes, asking that the phrase "further exploitation" on page 1 of the summary be changed to "explanation." Brown also asked 57:57 for an update on the list of allowable uses for funds drawn from the economic contingency fund, referencing the original "rainy day" fund ordinance.

Council Member Kay 13:01 stressed the importance of including median wage data in economic development reports, arguing that median wage provides a more accurate picture of job quality than average wage alone.

Council Member Massadi raised two separate concerns. First 18:32, he asked for a breakdown of how many of the new jobs were the result of incentive programs versus other factors. Later 27:48, he asked how many companies have been turned away due to lack of available I-1 land and whether companies accept regional alternatives.

Council Member Scotchfield 24:25 asked for direct examples of companies recruited as a result of attending trade shows and international missions.

Council Member Akers 29:25 asked about barriers preventing the Economic Development zone land from producing jobs and whether it could be re-zoned or repurposed.

Council Member Maloney 52:18 asked for clarification on the $9 million positive variance, questioning whether it would increase if revenue catches up.

Council Member Farmer 55:42 asked whether the 10% of revenues target is a formal goal of the ordinance and whether the fund can be accessed for specific purposes.

Appointments

The following appointments were made at this meeting:

• Stinnett was appointed to the position of Chair
• Moloney was appointed to the position of Vice Chair

Contested Items

Land Availability for Economic Development

Council members engaged in a heated discussion regarding the limited availability of I-1 land and its implications for the city's economic competitiveness. The primary concern centered on whether the city possessed sufficient industrial land to attract new businesses. Some council members questioned the city's ability to compete with neighboring counties that offer free land as an incentive to prospective businesses. The debate reflected broader concerns about the city's economic development strategy and its capacity to secure new investment in the face of regional competition.

Economic Contingency Fund Target

A split vote occurred over the status and guidelines of the economic contingency fund's 10% of revenues target. Council members disagreed about whether this 10% target constitutes a formal goal established by the ordinance. The dispute also encompassed the need for clearer guidelines governing how the fund should be utilized. Some members advocated for more explicit parameters to ensure consistent and appropriate use of contingency funds, while the disagreement on the formal nature of the target suggested differing interpretations of the ordinance's requirements and intent.

Approval of Summary of January 27, 2015 Committee Meeting

1:00

The committee reviewed the summary from the January 27, 2015 meeting. Vice-Mayor Kay led the discussion on this agenda item.

During the review, the committee identified a minor correction needed to the document. Specifically, a request was made to revise the phrase "further exploitation" on page 1 of the summary.

The committee approved the summary with this correction incorporated.

Jobs Fund Update

Wesley O'Brux provided an update on the Jobs Fund during this agenda item 2:05.

Fund Status

Two companies have been awarded incentives totaling $100,000. The fund currently has $650,000 remaining available.

Applications

Five companies have submitted applications for Jobs Fund incentives. Of these applicants, two are currently awaiting the submission of additional financial information before their applications can be processed further.

Outcome

This item was presented for informational purposes.

Commerce Lexington Quarterly Update

Jenna Greathouse and Kimberly Rossetti presented Commerce Lexington's quarterly update 7:30, covering the organization's strategic targets, recruitment efforts, and operational challenges.

Key Presentation Points

The presenters highlighted a significant gap between the types of business leads Commerce Lexington pursues and the types of businesses that ultimately locate in Lexington. While manufacturing represents a common category of leads, the actual locations secured are predominantly in high-tech and professional services sectors. This discrepancy stems from land use constraints that limit the availability of suitable sites for manufacturing operations.

Speakers

• Jenna Greathouse
• Kimberly Rossetti

Outcome

This agenda item was presented as informational, providing the body with an update on Commerce Lexington's activities and market conditions rather than requesting a decision or action.

Monthly Financials

40:53

Commissioner Bill O'Mara and Melissa Leuker presented the monthly financial report for the period through the first seven months of the fiscal year.

Financial Overview

The presentation highlighted a $6.2 million positive variance overall. This favorable position resulted from a $9.8 million expense surplus, which more than offset a $4.1 million revenue shortfall.

Key Findings

The speakers attributed the financial fluctuations to timing differences in tax collections. Rather than indicating structural budget problems, these variances reflected the normal timing of when tax revenues are received and processed throughout the fiscal year.

Outcome

The presentation was informational in nature, providing commissioners with an update on the financial status of the organization.

Items Referred to Committee

59:32

The committee discussed several items that had been referred for consideration, including the Solid Waste Task Force, Activity-Based Costing, Wellness Center RFP, and the Jobs Program Review.

Key Participants

Stinnett, Farmer, and Brown participated in the discussion of these referred items.

Items Discussed

The committee addressed the following referred matters: - Solid Waste Task Force - Activity-Based Costing - Wellness Center RFP - Jobs Program Review

Outcome

The Jobs Program Review was removed from the committee agenda. The overall discussion on items referred to committee was deferred.