Budget, Finance and Economic Development Committee

Summary

Meeting Overview

The Budget, Finance & Economic Development Committee met on September 22, 2015, at 1:00 p.m., with Stinnett presiding. The committee addressed seven agenda items, including approval of the previous meeting's summary, review of financial reports, and discussion of economic development initiatives. The committee took four votes during the meeting and heard two public comments.

The committee approved the June 23, 2015 Committee Summary. Several items were presented for informational purposes, including the July Monthly Financials for the General Fund, a Fayette County Workforce Review, the Monthly Budget Report for June and July covering Other Funds, and an update on the Kentucky World Trade Center. The Economic Contingency Fund was deferred for later consideration, and Items Referred were removed from the agenda.

Attendance

The following individuals were present at the meeting on September 22, 2015:

• Stinnett
• Moloney
• Kay
• Lamb
• Farmer
• Scutchfield
• Brown
• Mossotti
• Bledsoe
• Hensley

No absences or late arrivals were recorded.

Votes and Decisions

The meeting included four motions, all of which passed by voice vote.

Approval of the June 23, 2015 Budget, Finance & Economic Development Committee Summary 11:35 - Motion by: Farmer - Second by: Scutchfield - Outcome: Passed

Motion to remove the Activity-Based Costing/Financial Efficiency item from the agenda 1:28:03 - Motion by: Brown - Second by: Hansel - Outcome: Passed

Motion to reconsider the funding mechanism for the Economic Contingency Fund and bring back alternative options next month 58:17 - Motion by: Kay - Second by: Farmer - Outcome: Passed

Motion to adjourn the meeting 1:28:35 - Motion by: Mossotti - Second by: Scutchfield - Outcome: Passed

Budget and Financial Actions

The meeting addressed the following financial matters:

Snow Plan Funding

An appropriation was approved for funding related to the snow plan. Specific dollar amounts and additional details regarding this appropriation were not specified in the meeting materials.

Kentucky World Trade Center Grant

A grant of $100,000 was approved for the Kentucky World Trade Center. This funding was designated to support the operations and activities of the Kentucky World Trade Center.

Public Comment

Two speakers addressed the council during the public comment period.

McConnell Springs Historical Programming 2:40

Council member Siobhan Akers highlighted the historical programming available at McConnell Springs. She noted that the park hosts monthly events for residents, including presentations such as "Treasuries of the SS Central America" and "Mary Todd Lincoln, First Lady of Controversy." Akers encouraged residents to visit the park to take advantage of these educational offerings.

Martine's Pastries Business 3:47

Vice Mayor Steve Kaye discussed Martine's Pastries, a local business specializing in wedding and specialty cakes. Kaye focused on the business's growth and its presence within the Lexington community.

Contested Items

The meeting included two significant areas of disagreement among council members regarding budget allocations and fiscal priorities.

Use of Urban Service Fund Balance for Snow Plan

Council Member Brown questioned whether the $31.4 million restricted fund balance could be appropriately used for snow removal operations. This dispute centered on the legal restrictions governing the fund and the fiscal responsibility implications of drawing down this balance for operational expenses. The question of whether such restricted funds could legally be deployed for snow removal sparked broader debate among council members about the proper use of designated fund balances and their intended purposes.

Funding Mechanism for Economic Contingency Fund

A heated discussion emerged regarding the contingency fund's ongoing financing. Vice Mayor Kay and Council Member Brown argued against maintaining the contingency fund at its current funding levels. Their position emphasized the opportunity cost of the fund, pointing to deferred infrastructure needs that could be addressed with those resources and citing low returns on the contingency fund itself.

Other council members countered by defending the contingency fund's importance to the city's financial stability and its role in supporting the city's bonding capacity. This disagreement reflected differing priorities: some members prioritized immediate infrastructure investments, while others stressed the necessity of maintaining financial reserves for stability and creditworthiness in the municipal bond market.

June 23, 2015 Committee Summary

The committee reviewed and approved the summary from the June 23, 2015 meeting 11:35. Farmer moved to approve the summary, and Scutchfield seconded the motion. The summary was approved without dissent.

July Monthly Financials - General Fund

12:06

Rusty Cook and Bill O'Mara presented the monthly financial update for the general fund. The presentation highlighted strong financial performance, with a year-to-date surplus of $2.8 million. The presenters noted particularly strong performance in two key areas: employee withholding and net profit.

This was an informational presentation with no formal action required.

Fayette County Workforce Review

Betsy Dexter presented the Fayette County Workforce Review during this agenda item 13:10. The presentation focused on identifying gaps between current educational offerings and the skills required for in-demand jobs within the local economy.

Key Points

The review emphasized the critical need for better alignment between education and employment opportunities in Fayette County. Dexter highlighted that a coordinated approach would help ensure that local workforce development efforts match actual job market demands.

Outcome

The presentation was informational in nature. Dexter outlined a plan to deliver comprehensive recommendations within 90 days, establishing a concrete timeline for addressing the identified workforce alignment issues.

Monthly Budget Report June & July – Other Funds

25:32

Bill O'Mara presented the monthly budget report covering June and July for the committee's other funds. The presentation reviewed financial reports for four funds: Urban Service, Landfill, Water Quality, and Sewer.

The discussion focused on fund balance usage and the legal restrictions governing the reallocation of funds between accounts. The committee examined how each fund was managing its financial position during the two-month period and considered the constraints placed on moving resources across different fund categories.

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

Economic Contingency Fund

Tyler Scott presented on the Economic Contingency Fund 34:44, covering its growth, investment strategy, and operational considerations. The presentation included discussion of the fund's current status and performance.

Key Topics Discussed

Scott addressed the fund's growth trajectory and reviewed its investment strategy. A significant portion of the discussion focused on the fund's financing mechanism and whether adjustments were needed to how it operates.

Concerns and Considerations

A central issue raised during the presentation was the need to reconsider the fund's funding mechanism. Additionally, the question of whether the fund should have a cap on its size was discussed, suggesting consideration of limits to its growth.

Outcome

The matter was deferred, with a motion made to revisit the Economic Contingency Fund at the next meeting. This allowed for further analysis and discussion before any decisions were finalized.

Kentucky World Trade Center

Ed Webb and Sherry Malkins presented on the Kentucky World Trade Center's mission and activities 1:08:45. The presentation focused on the organization's role in promoting international trade, job creation, and economic development in Lexington.

The presenters highlighted upcoming trade missions as key initiatives. These include planned missions to Cuba and the United Kingdom, which are intended to expand business opportunities and strengthen international connections for Kentucky-based companies.

The presentation was informational in nature, providing an overview of the Kentucky World Trade Center's work in facilitating international commerce and supporting economic growth in the region.

Items Referred

The committee addressed the Activity-Based Costing/Financial Efficiency item that had been referred to the agenda. 1:27:32

Discussion and Concerns

Brown and Hansel led the discussion on this agenda item. The committee identified a lack of background materials as the primary concern regarding the Activity-Based Costing/Financial Efficiency item, which prevented adequate review and informed discussion.

Outcome

A motion was made to remove the Activity-Based Costing/Financial Efficiency item from the agenda. The motion passed, and the item was removed due to insufficient background information being available to the committee.