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The Lane Report

Investing Your Tax Dollars Wisely

As your new 12th District council member, I look forward to serving the citizens and taxpayers of Fayette County. One of the major themes of my recent campaign was to "help bring sound business ideas to local government".

Shortly after the election on November 2nd, a report by the LFUCG Commission on Budget Effectiveness (CBE) was released. The commission was appointed by Vice-Mayor Mike Scanlon and chaired by Phil Roeder who is a professor of political science at the University of Kentucky. The purpose of the study was to evaluate the structure and financial policies of Fayette County.

The report makes a number of recommendations which can significantly improve how our taxpayer's money is spent. The major findings of the report include:

• LFUCG employees are doing the best they can under significant limitations in planning, budgeting, information technology systems and processes.
• LFUCG lacks a strategic planning process.
• The LFUCG budget process is fragmented, complex and non-strategic, and uses three separate budget documents.
• A comprehensive, integrated focus on performance or results with benchmarking is absent.
• Key government officials and stakeholders are not engaged throughout the entire budget process.
• LFUCG financial and budget reporting is ineffective; financial reports are delayed, unreliable and not user-friendly.
• The LFUCG information technology (IT) system is outdated and ineffective.

The CBE's key recommendations:

• Implement a strategic planning process with vision and mission statements.
• Establish a three-year planning budget process.
• Redesign financial reporting with end-users in mind.
• Upgrade and replace the IT system (hardware and software).

Preparing vision and mission statements, budgeting for three years and redesigning end-user reports are enhancements that can be made by the Mayor and Council and will cost little to initiate. I expect these changes will be in effect for the 2005-2006 fiscal year budget.

Conversely, the cost to bring LFUCG's financial controls and IT systems up-to-date will be expensive. A recent upgrade of Metro Louisville Government's accounting system cost about $7 million. The failure to upgrade the way your tax dollars are accounted for and expended could increase inefficiencies and waste in Lexington's future governmental operations.

The LFUCG's general service fund alone will expend about $218 million this fiscal year. With enhanced budgeting, strategic planning, management controls and timely financial reporting, a mere one-half percent improvement in operating efficiency will create an annual savings of about $1.1 million. A two percent improvement would save $4.4 million annually. Savings in operations and increased productivity would likely pay for much of the cost of a new accounting system.

With a modern accounting system, LFUCG will also be able to determine how much it costs to pick up a "Herbie" full of trash, to send a police car to respond to an emergency call, or to provide property management and cleaning services for government owned buildings. These costs can be compared to benchmarks (the cost for which other entities are providing the same service).

Without excellent controls on budgeting, cost analysis and expenditures, local government managers and elected council members can not accurately evaluate how well government is providing services and spending your taxes.

Transparent financial reporting and planning are the foundation of good government and should be LFUCG's top priority. I plan to strongly support upgrading budgeting, planning, financial reporting, and IT systems for Fayette County.

If you would like to review the final report prepared by the LFUCG Commission on Budget Effectiveness go to www.edlane12th.com . If you would like to contact Ed Lane he can be reached via at EdLane@LFUCG.com ; and by letter at 200 East Main Street, Lexington, KY 40507.

“I want to conservatively spend our tax dollars,
eliminate waste, and bring sound business ideas
to local government.”

To contact Ed Lane's 12th district council offices, e-mail him at edlane@lfucg.com.