Budget, Finance and Economic Development Committee

Summary

Meeting Overview

The Lexington-Fayette Urban County Government held a meeting on September 22, 2020, at 1:00 p.m. in the Council Chamber located at 200 E. Main Street, Lexington, Kentucky 40507. The meeting was presided over by the Chair. During the session, the body addressed five agenda items, took three votes, and heard five public comments.

The meeting included one approval, two informational presentations, and one deferred item. The Committee Summary from August 25, 2020, was approved. The body received informational updates on the August 2020 financials and reviewed two separate informational items: Revenue Sources and Coronavirus Relief Funds Proposals. An assessment of Lexington-Fayette Urban County Government-owned property for potential revenue and cost savings opportunities was deferred to a later date.

Attendance

The following individuals were present at the meeting on September 22, 2020:

Council Members: - Vice Mayor Kay - Councilmember Bledsoe - Councilmember Lamb - Councilmember Massadi - Councilmember Plowman - Councilmember Fred Brown - Councilmember Maloney - Councilmember Worley - Councilmember Marsati - Councilmember McCurron - Councilmember Farmer - Councilmember James Brown - Councilmember Swanson - Councilmember Ellinger - Councilmember Higginshorn - Councilmember Bowman - Councilmember Borley

Commissioners and Directors: - Commissioner Amara - Commissioner Ford - Director Lucas - Director Holbrook - Director Lidger

Other Attendees: - Jamshid Sheed - Brandy Peeja - Jennifer Sutton - Sally Hamilton - Ms. Reddick

No absences or late arrivals were recorded.

Votes and Decisions

The meeting included three votes on matters brought before the council.

Approval of August 25, 2020 Committee Summary 0:30

Ms. Lam moved to approve the August 25, 2020, committee summary, with Vice Mayor Kay seconding the motion. The motion passed by voice vote.

Property Assessment Report Referral 32:42

Councilmember Sheed moved to refer the property assessment report to a subcommittee of the Budget and Finance and Economic Development Committee, with Councilmember Plowman seconding. The motion passed by voice vote.

Palmer Pharmacy Building Renovation and RFP 2:05:14

Councilmember James Brown moved to allocate $300,000 toward the renovation and remediation of the Palmer Pharmacy Building and to issue a Request for Proposal (RFP) for community partners. Councilmember Maloney seconded the motion.

The motion passed by roll call vote with 10 ayes and 5 nays.

*Voting in favor (10):* - Councilmember James Brown - Councilmember Swanson - Councilmember Belfarmer - Councilmember Higginshorn - Councilmember Ellinger - Councilmember Massadi - Councilmember Borley - Councilmember Bowman - Councilmember Farmer - Councilmember Maloney

*Voting against (5):* - Councilmember Lamb - Councilmember Worley - Councilmember Marsati - Councilmember McCurron - Councilmember Fred Brown

The motion included a condition that the RFP must clearly state that the city does not intend to retain ownership or maintenance responsibilities, with the goal being to transfer ownership to the winning partner.

Budget and Financial Actions

The meeting on September 22, 2020 included two significant financial actions:

Palmer Pharmacy Building Renovation

The body appropriated $300,000 for the remediation and renovation of the Palmer Pharmacy Building. This funding will be distributed to a future partner agency selected through a Request for Proposal (RFP) process.

Coronavirus Relief Funds Distribution

The body disbursed $726,000 from Coronavirus Relief Funds to eight partner agencies to support household assistance programs. These grants were distributed across the partner agencies to provide direct assistance to households during the pandemic response.

Public Comment

The council heard comments from five councilmembers regarding the Palmer Pharmacy Building and related budget matters.

Support for Palmer Pharmacy Remediation

Councilmember James Brown advocated for immediate allocation of $300,000 to remediate the Palmer Pharmacy Building and issue a Request for Proposal (RFP) to attract community partners. He emphasized the building's historical significance and its potential to uplift the neighborhood. 1:42:04

Councilmember Swanson supported the motion as an exception to her usual opposition to ad hoc spending. She cited the building's long-standing blight and the urgent need to serve a historically underserved neighborhood. 1:45:04

Councilmember Higginshorn supported the motion to preserve the building's legacy as the first African-American-owned pharmacy franchise in the U.S. and to create economic development opportunities in District 1. 1:53:26

Councilmember Borley emphasized that the RFP should allow the market to determine the best use of the building, with the city acting as a partner to unlock potential that may not be immediately apparent. 2:02:35

Opposition and Fiscal Concerns

Councilmember Maloney opposed the Palmer Pharmacy funding, arguing that the city should wait until the October budget discussion to avoid spending during a fiscal crisis and prioritize basic services. 1:43:19

Contested Items

Allocation of $300,000 for Palmer Pharmacy Building

A motion to allocate $300,000 for the Palmer Pharmacy Building's remediation and to issue a request for proposals (RFP) resulted in a split vote among meeting participants. The disagreement centered on whether the timing and fiscal circumstances were appropriate for this expenditure.

Some members opposed the motion, arguing that the allocation was premature given existing fiscal constraints. Their concern focused on the financial feasibility of committing resources to this project at the present time.

Other members supported the motion, emphasizing the Palmer Pharmacy Building's historical significance and its potential positive impact on the community. They advocated for moving forward with the remediation and RFP process despite budgetary concerns.

The split vote reflects a fundamental disagreement about budgetary priorities and the relative importance of preserving the building's historical value against immediate fiscal limitations.

Approval of August 25, 2020, Committee Summary

0:00

The committee considered approval of the minutes from the August 25, 2020, meeting. Ms. Lam and Vice Mayor Kay participated in this agenda item.

A motion to approve the August 25, 2020, Committee Summary was made and seconded. The committee then conducted a voice vote on the motion, which passed unanimously.

Outcome: The August 25, 2020, Committee Summary was approved.

Financials Update - August 2020

1:03

Director Lucas and Director Holbrook presented a financial update for August 2020 to the committee.

Key Highlights

The presentation highlighted strong revenue performance, particularly in occupational license fees. The organization achieved positive net profits during the period, with results driven in part by timing effects and the impact of PPP (Paycheck Protection Program) loans.

Expenses were significantly below budget during August. This favorable variance was attributed to reduced operations and lower personnel costs compared to budgeted amounts.

Fund Balance

The committee was encouraged by the organization's positive fund balance, which stood at $10.7 million as of the end of August 2020.

Outcome

This agenda item was presented for informational purposes. No formal action or decision was required from the committee.

Assessment of LFUCG Owned Property for Potential Revenue and Cost Savings Opportunities

Jamshid Sheed presented a comprehensive assessment of Lexington-Fayette Urban County Government (LFUCG) property holdings during this agenda item 18:46. The presentation examined assets across five divisions: facilities, parks, fire, water quality, and miscellaneous assets.

The assessment focused on identifying opportunities to generate revenue and achieve cost savings through strategic evaluation of the government's real estate portfolio. Sheed outlined criteria for determining which properties might be candidates for disposal or alternative use, including:

• Financial impact of retaining or disposing of properties
• Community benefit considerations
• Cultural value of assets

The committee engaged in discussion regarding how to systematically evaluate the extensive property holdings and determine which assets could be leveraged for fiscal benefit without compromising essential services or community resources.

Rather than approving immediate action on specific properties, the committee recommended establishing a subcommittee to further refine the assessment. This subcommittee would be tasked with developing and applying evaluation criteria to the full list of LFUCG-owned properties to create a prioritized list of potential candidates for disposition or revenue generation.

The outcome of this agenda item was deferred, allowing for additional analysis and stakeholder input through the subcommittee process before any final recommendations or decisions would be brought back to the full committee.

Revenue Sources

Vice Mayor Kay presented the rationale for considering revenue enhancement options during this agenda item 1:03:07. She emphasized the importance of long-term fiscal sustainability and the need to maintain quality of life for the community.

Vice Mayor Kay proposed a 0.25% increase in payroll and net profit taxes as a potential revenue option. She characterized this proposal as a transparent and equitable approach to addressing fiscal needs, and stressed the importance of keeping all options on the table for public discussion and consideration.

Jennifer Sutton also participated in this discussion.

The outcome of this agenda item was informational in nature, with no formal decision or action taken at this time.

Coronavirus Relief Funds Proposals

Brandy Peeja presented an update on the status of Coronavirus Aid, Relief, and Economic Security (CARES) Act funds 1:37:46. According to the presentation, the committee has received a total of $24,647,733 in CARES Act funding.

To date, $726,000 has been disbursed to eight partner agencies to support household assistance efforts. These funds have been distributed as part of the committee's response to provide relief during the coronavirus pandemic.

The committee discussed a potential allocation of $300,000 toward the Palmer Pharmacy building. This proposal was considered as a possible use of the available CARES Act funds, though the specific details and rationale for this allocation were not detailed in the available information.

The agenda item was classified as informational in nature, with the primary outcome being the presentation and discussion of the fund status rather than a final decision or formal action at this time.