Budget & Finance Committee Meeting

Summary

Meeting Overview

The Urban County Council - Budget and Finance Committee met on December 9, 2008, at 1:00 p.m., with Dr. Stevens presiding. The committee addressed four agenda items during the session, hearing three informational presentations and considering one deferred matter. One motion was voted on during the meeting, and the committee heard three public comments. The agenda included discussions on the equine economy in Central Kentucky, financial matters, internal audit reports, and Man-O-War projects and SLX status updates.

Attendance

Present: - Dr. Stevens - Jim Gray - Linda Gorton - Chuck Ellinger - Ed Lane - Kevin Stinnett - George Myers - Andrea James - Don Blevins - Bruce Sahli - Max Conyers - Bob Bayert - Mike Webb

Absent: - day McCord

Late: - None reported

Votes and Decisions

Motion on Sales Tax Inequities for Horse Farm Owners

A motion was made to take the issue of sales tax inequities for horse farm owners to the Central Kentucky Caucus and LFUCG's Director of Government Relations. 1:01:02

The motion was made by Linda Gorton and seconded by Chuck Ellinger. The motion passed by voice vote.

The following members voted in favor: - Linda Gorton - Chuck Ellinger - Dr. Stevens - Jim Gray - Ed Lane - Kevin Stinnett - George Myers - Andrea James - Don Blevins

No members voted against the motion.

Budget and Financial Actions

The meeting on November 25, 2008 addressed the following financial matters:

Operating Expense Reduction

An amendment was approved for an additional 5% reduction in operating expenses across all divisions.

Licensing Fee Structure

A change to the minimum licensing fee structure for businesses was considered as a contract matter.

Public Comment

Three council members provided comments during the meeting.

Ed Lane addressed economic indicators and capital investments 1:22:33. He highlighted positive local economic trends, including job growth in Fayette County and low unemployment rates. Lane noted that major capital investments in healthcare, infrastructure, and the World Games are injecting money into the local economy.

Later in the meeting 1:38:58, Lane raised a question about outsourcing construction management for large sewer projects. He inquired whether outsourcing would improve efficiency and cost control, given the scale and complexity of the upcoming infrastructure work.

Jim Gray expressed concern about project management competency 1:22:09. Gray stated that the government lacks core project management competencies, citing delays and inefficiencies in projects such as the Raven Run visitor center. He emphasized the need for accountability, clear responsibility, and better coordination across departments.

Contested Items

Project Management Deficiencies in Division of Engineering

Council members Jim Gray and Ed Lane engaged in a heated discussion regarding systemic project management failures within the Division of Engineering. The contested issues centered on multiple operational deficiencies, including lack of accountability mechanisms, poor coordination across divisions, and the absence of a centralized tracking system for projects.

The concerns raised by Gray and Lane pointed to structural problems within the division that were impeding effective project oversight and execution. The discussion reflected frustration with how projects were being managed and monitored across the engineering department.

The council members called for substantive changes to address these deficiencies, specifically advocating for both structural reorganization and personnel changes within the Division of Engineering to remedy the identified problems.

The Equine Economy in Central Kentucky — Stevens

Dr. Stevens presented recommendations from the Equine Task Force during this agenda item 1:00:00.

Presentation Overview

The presentation outlined several key initiatives to support the equine industry in Central Kentucky:

• Creation of an Equine Economic Development Office
• Tax equity reforms
• Branding initiatives
• Incentives for the equine industry

Proposed Next Steps

Dr. Stevens proposed that he and Jerry Southers lead outreach efforts to stakeholders. The goal of this outreach would be to develop actionable recommendations based on the Task Force's initial proposals.

Outcome

The agenda item was deferred, meaning the discussion was postponed rather than concluded or voted upon at this meeting.

Financial Discussions - Koch

Commissioner Koch presented the November 2008 revenue report during this agenda item. Despite challenging national economic conditions, the report indicated a positive revenue trend for the jurisdiction.

Key Presentation Points

Commissioner Koch emphasized the importance of proactive fiscal management in response to the economic environment. She outlined two primary fiscal measures:

• A 5% reduction in operating expenses
• Preparation for an anticipated $18–20 million shortfall projected for 2010

Projected Challenges

The 2010 shortfall is attributed to two factors: increased pension contributions and debt service obligations. This advance planning discussion reflected concerns about the longer-term fiscal impact of current economic conditions.

Participants

The discussion involved Commissioner Koch, Bill O'Mara, and Mary Fister.

Outcome

This agenda item was informational in nature, with no formal action or decision recorded as an outcome.

Internal Audit Reports - Sahli

1:03:45

Bruce Sahli presented findings from two internal audits conducted by the organization.

Division of Engineering Project Management Audit

The first audit examined project management practices within the Division of Engineering. Key findings identified a lack of centralized project tracking systems, which hindered the organization's ability to monitor project status and progress across the division. The audit also revealed poor interdivisional coordination, indicating that communication and collaboration between different divisions needed improvement.

Haley Pike Landfill Collection Process Audit

The second audit focused on the collection process at Haley Pike Landfill. This audit uncovered weak cash handling controls, representing a significant internal control concern that required attention.

Management Response

Mike Webb participated in the discussion alongside Sahli. In response to the audit findings, management committed to implementing corrective actions to address the identified deficiencies. These commitments included establishing better project tracking mechanisms, improving coordination between divisions, and strengthening cash handling procedures.

Outcome

This agenda item was presented for informational purposes, allowing the governing body to be apprised of the audit results and management's planned responses to the identified control weaknesses and operational inefficiencies.

Man-O-War Projects and SLX Status - Conyers

1:39:32

Max Conyers presented the MPO's low-build project rankings for Man-O-War, focusing on improvements related to safety and congestion. The presentation outlined prioritized projects designed to address key transportation challenges in the corridor.

Bob Bayert provided details on proposed SLX funding allocations spanning 2009 to 2014. Bayert noted that the funding proposals are sensitive to actual apportionments and the availability of matching funds, indicating that final allocations may be subject to change based on these factors.

This agenda item was presented as informational, with no formal action or debate recorded.