Buoyed by a better-than-projected revenue rebound and federal coronavirus relief money, the city of Lexington finished the fiscal year that ended June 30 with a nearly $30 million surplus.
During a Tuesday Lexington-Fayette Urban County Council Budget, Finance and Economic Development Committee meeting, the council agreed to set aside $28.1 million in surplus into one of the city’s main savings accounts.
The council will decide how to spend that money at a later date.
Finance Commissioner Erin Hensley recommended the council put $15 million permanently in the budget stabilization fund to help with escalating pension and other unexpected costs.
Vice Mayor Steve Kay agreed.
“Budget stabilization has allowed the administration and council some flexibility on how it wants to spend its funds,” Kay said.
But some of the $28 million may go to pay bonuses to city workers who do not qualify for supplemental pay through the American Rescue Plan Act. The city set aside $15 million in relief funds for bonus pay for police, fire, corrections and others.
“We will be having a discussion on Thursday about compensation,” said Councilwoman Amanda Bledose, who chairs the Budget, Finance and Economic Development Committee. At the Thursday meeting, Mayor Linda Gorton’s administration is expected to discuss who qualified for the supplemental pay through the federal coronavirus relief funds and how much it would cost to give similar supplemental pay to employees who did not qualify.
The city has been socking away money since 2010 in its rainy day account. That account has a little more than $37.9 million, a little less than the goal of 10 percent of the city’s budget. That rainy day account has a lot of restrictions on when the money can be tapped. The budget stabilization fund does not have those same type of restrictions.
The city ended the year with much more than the $28.1 million but much of that surplus is already assigned to other expenses, including but not limited to $4 million for health care, $8.1 million for current-year expenditures and $2.5 million for a small business loan program, Hensley said.
Gorton’s administration also requested the city set aside more than $400,000 for repairs to the government center’s garage, $125,000 for a compensation consultant and $150,000 to fix information technology issues at the Fayette County Detention Center.
The council ultimately agreed to take money from the surplus for the fixes and compensation study, leaving $28.1 million.