Budget & Finance Committee Meeting

Summary

Meeting Overview

The Budget and Finance Committee met on February 24, 2009, at 1:00 p.m. at the Lexington-Fayette Urban County Government Center, with the Chairman presiding. The committee heard three informational presentations during the meeting: Equine Task Force Recommendations, Financial Reports and Discussion, and the Lyric Theater Business Plan. Four members of the public provided comments during the meeting. No motions were voted on during this session.

Attendance

The following individuals were present at the meeting on February 24, 2009:

• Jim Gray
• Linda Gorton
• Chuck Ellinger
• Ed Lane
• Kevin Stinnett
• George Myers
• Andrea James
• Julian Beard
• Tom Blues
• Peggy Henson

No absences or late arrivals were recorded.

Budget and Financial Actions

The meeting included the following financial action:

Lyric Theatre Renovation and Construction

• Amount: $6,000,000
• Type: Appropriation
• Resolution: Resolution 0073-26
• Recipient: Tate Hill Jacobs Architects

This appropriation provided funding for renovation and construction work on the Lyric Theatre, with Tate Hill Jacobs Architects designated as the recipient for this project.

Public Comment

Four members of the public addressed the meeting with questions and suggestions regarding equine industry initiatives and a proposed theatre project.

Equine Industry and Education

Andrea James spoke at 24:21 about the equine industry's economic impact on local revenues. She suggested integrating equine education into Fayette County Public Schools as a means to sustain long-term industry support.

Regional Collaboration

Julian Beard raised the question of regional involvement at 28:15, inquiring whether Jessamine and Clark Counties should be included in the equine initiative. He noted that these counties have existing horse farms and potential for collaboration on the effort.

Breed Diversity

Peggy Henson addressed the scope of the equine task force report at 29:19. She asked whether the report addressed horse breeds beyond thoroughbreds, specifically noting the growing importance of standardbreds in regional equine activities.

Theatre Project Due Diligence

Ed Lane spoke at 20:35 regarding the proposed Lyric Theatre project. He suggested that a comprehensive study be conducted on operating expenses, long-term liabilities, and facility needs before the project is finalized.

Contested Items

Lyric Theatre Project Timeline and Funding

A heated discussion emerged regarding the Lyric Theatre project timeline and associated funding obligations. The core disagreement centered on the urgency of moving forward with the project in light of a January 2010 deadline established under a 1997 Memorandum of Understanding (MOU) with the state.

Participants expressed concerns about potential liquidated damages if the deadline was not met, which created pressure to take immediate action. However, this imperative to proceed quickly conflicted with existing budget constraints that limited available resources for the project.

The debate reflected tension between two competing priorities: meeting contractual obligations to avoid financial penalties, and managing fiscal limitations that made rapid advancement difficult. The discussion highlighted the need to balance the legal and financial consequences of missing the state deadline against the practical challenges of funding the project during a period of budget restrictions.

Equine Task Force Recommendations

Dr. David Stevens presented eight action items for the Urban County Council's consideration regarding equine industry support 13:02. The recommendations included initiating a multicounty effort to support thoroughbred breeding, establishing partnerships with the University of Kentucky, analyzing breeding and racing incentives, and monitoring the Purchase of Development Rights program.

Key Discussion Points

The council engaged in discussion focused on three primary areas:

• Constituency engagement: Council members explored how to effectively communicate equine industry initiatives to constituents and stakeholders
• Fiscal impact: Consideration of the financial implications and budget requirements for the proposed action items
• Outreach expansion: Discussion centered on broadening engagement efforts to include rural settlements and schools

Speakers and Participation

Multiple council members participated in the discussion, including Linda Gorton, Kevin Stinnett, Andrea James, Julian Beard, Peggy Henson, and Chuck Ellinger, alongside Dr. Stevens' presentation.

Outcome

The agenda item was classified as informational, indicating the council received the recommendations without taking formal action at this time. The presentation and discussion provided the council with details on the proposed equine task force initiatives for their consideration and future deliberation.

Financial Reports and Discussion

Mary Pfister presented a revised monthly financial report to the committee, detailing significant financial challenges facing the organization. 32:00

Key Findings

The report highlighted declining revenues across multiple areas. Employee withholdings decreased by $2.1 million, and net profits declined by $1 million compared to projections. Personnel expenses presented a particular concern, exceeding budget by $3.7 million. This overage was driven by two primary factors: retiree payouts and fire department overtime costs.

Budget Projections

The committee discussed substantial budget shortfalls projected for the upcoming fiscal year. The organization anticipates a $27 million shortfall for FY10, attributed to the combination of declining revenues and increased operational costs.

Participants

The discussion involved multiple committee members, including Jim Gray, Kevin Stinnett, Peggy Henson, and Chuck Ellinger, who engaged with Pfister's presentation and the financial data presented.

Outcome

This agenda item was classified as informational in nature, with the primary purpose of presenting the financial situation to the committee for their awareness and consideration.

Lyric Theater Business Plan

Susan Hill of Tate Hill Jacobs Architects presented the business plan for the Lyric Theatre, outlining the project schedule, program elements, and compliance challenges 1:05:12.

Project Overview

The presentation detailed three main program elements for the Lyric Theatre: - Theater space - Museum - Multi-purpose space

Key Issues Discussed

The committee identified code compliance challenges as a significant concern requiring attention during the planning process.

A major outcome of the discussion was the recognition that additional analysis was needed. The committee agreed that a follow-up study should be conducted to examine long-term operating costs and liability associated with the project.

Next Steps

The committee scheduled a follow-up meeting with AMS Consultants for March 3, 2009, to further discuss the project details and address the identified concerns.

Participants

The discussion involved multiple committee members and stakeholders, including Shaye Rabold, Ed Lane, Linda Gorton, Andrea James, and Tom Blues, in addition to the presenter Susan Hill.