What to look for in the Mayor’s proposed budget
Here’s one thing this week to watch in city hall… the Mayor’s Budget Address to the Urban County Council.
📺 - Watch this presentation live on Tuesday, April 13, 2021, at 3:00 pm
Why should you care?
If you care about any issue that impacts Lexington residents, you should pay attention to this conversation.
If you’ve ever been to a CivicLex Budget Workshop, you’ve likely heard one of us say that “a city’s budget is an expression of its values.” We say this because budgets paint a transparent picture of what a city places value on - and what it does not. While there is always additional context to know, budgets are an excellent starting point for understanding a city’s priorities, structure, and how you can best advocate for the issues that motivate you.
The Mayor’s proposed budget sets the tone for the entire budgeting process. As our community representation on Council negotiates what programs will be funded in the upcoming year, they are doing so from the starting place of the proposed budget. If you are interested in shaping what our city prioritizes (and funds), watch this presentation and get involved early.
What’s the context of this proposed budget?
The budget process starts with the Mayor’s proposed budget, which Mayor Linda Gorton will announce and release on Tuesday.
The proposed budget is just that - a beginning negotiation point. After the budget is released, Divisions and Departments will work with Council to negotiate their collective priorities.
Once the Department/Council negotiation process ends, Council will likely add some of their priorities.
This negotiation process will last until late May or early June - but it is all framed by the Mayor’s proposed budget.
It’s important to see this year’s budget in context.
Lexington’s city budget has been in a state of flux over the past couple of years.
After significant capital investments in the Gray Administration (the Old Courthouse and the Convention Center renovation, to start), the city’s bonding (think: loans for major projects) exceeded the City’s recommended level, forcing the city to pare back expenses.
The Gorton Administration has demonstrated a more fiscally conservative approach to governance.
In last year’s budget, the city’s revenue projections caused the Gorton Administration to recommend a significant reduction in expenses, including a hiring freeze on City workers and extreme cuts to external agencies.
Council reversed some of these expense cuts in the final budget.
This year’s budget will be framed by last year’s.
FY21 (last year’s) budget contained expense reductions that were painful for many across Lexington, but it was a decision made in the throes of the COVID-19 pandemic when it was uncertain if Federal relief would arrive.
This year, with tens of millions in Federal stimulus coming, the city’s financial risks are - for the moment - less dire.
This budget will be essential to watch because it will show us a more accurate picture of this Administration and Council’s priorities.
A quick review of last year’s budget
Understanding last year’s proposed budget will help you see how the administration’s priorities have changed. Here are the takeaways we wrote about last year.
The Mayor’s Proposed Budget made significant cuts across city government because of a $40+M projected revenue shortfall. This revenue shortfall resulted from the economic impacts of the COVID-19 epidemic, leading to many cuts to internal and external programs in the City Government.
Internally, the city instituted a hiring freeze for all vacant positions, including 41 unfunded positions. It cut over $12M across several divisions and departments, including $1.4M from the Department of Environmental Quality and Public Works and eliminating many bonded projects.
Externally, the Mayor’s Proposed Budget cut almost all funding to social service agencies, eliminated the funding of many economic development programs, reduced the Affordable Housing Fund by 90%, and cut funding for Homelessness initiatives by almost 50%.
Council restored many of these cuts in the final budget.
What do we know will be new in the budget?
Throughout the year, we’ve kept a running list of things that the Mayor or her administration have mentioned as likely to be included in the proposed FY22 budget.
The most significant change we can expect is the addition of a new city department - the Department of Housing Advocacy and Community Development.
The Department of Housing Advocacy and Community Engagement would dramatically reorganize city government, absorbing the the Divisions of Code Enforcement, Grants and Special Programs, Historic Preservation, and Community and Resident Services, Homelessness Prevention and Intervention, and the Office of Affordable Housing.
Currently, these divisions and offices are located in different Departments across LFUCG.
In addition to absorbing these divisions and offices, this new Department will hire a Commissioner, an Administrative Officer Senior, and a Community Development specialist.
The department will likely focus on programmatic issues related to homelessness assistance programming, incentives for the development of affordable housing, emergency financial assistance, housing, and utility repair support, and Code Enforcement and assistance.
It’s also important to note that this department’s creation would fulfill several recommendations from the Mayor’s Commission on Racial Justice and Equality report.
We’ve also heard about a new housing assistance program that would be housed inside the Department of Housing Advocacy and Community Development.
The proposed new code enforcement financial assistance program would help low-income residents address code enforcement policy violations, which has been a significant burden on many.
The Mayor has also committed to keeping at least partial funding for the Extended Social Resource program, which provides funding to the city’s external social service agencies.
The Mayor’s Administration came under criticism from the city’s social service organizations after almost all funding for their programs was removed from the FY21 budget.
ESR-funded organizations said this cut was made without any communication and would have caused program reductions and staff layoffs during the peak of the COVID-19 pandemic.
Agencies successfully lobbied the Council to reinstate the funding in FY21.
The Mayor’s proposed budget will also likely include funding to implement elements of the Mayor’s Commission on Racial Justice and Equality report.
The specifics around this are less clear.
There is no shortage of recommendations that need to be implemented. We broke them down a few months ago here.
We’ve pulled a list together of the recommendations that would likely need a budgetary expense in this proposed budget in the section below.
What else should you look for?
There are a couple of other things we’ll keep our eyes out for in this proposed budget.
What will the city’s revenue projections look like for the year?
The city’s actual revenue over the past eight months outperformed the city’s projections, meaning that even without stimulus, the city would have had more money than they thought.
If this trend continues, will the city maintain its worry about upcoming financial troubles?
What recommendations from the Mayor’s Commission on Racial Justice and Equality will have funding in this year’s budget? Here are some that require specific funding:
Allocate $1M for nonprofits working on multigenerational education.
Create a new staff person inside LFUCG to manage the city's progress on educational goals.
Create a new funding pool for minority business expansion.
Match the city's investment in the Purchase of Development Rights program with a new program targeting gentrifying neighborhoods.
Create programs to invest in minority-owned businesses in gentrifying neighborhoods.
Create a Community Health Worker position to serve as a liaison between hospitals and city government.
Hire a consultant to review the LPD/Fraternal Order of Police relationship and present recommendations for changes.
Increase funding for the recruitment of new officers that follow the 21st Century Policing Recommendations.
Create a new position to review all police and justice activity to monitor racial disparities.
Create a sobering center for residents needing to recover from the effects of acute alcohol or drug intoxication.
Create a new Job Training Center focusing largely on public sector jobs.
Create a city-wide or neighborhood-based summer youth job program based out of the Job Training Center.
Will the city’s Federal stimulus be included in the budget or managed separately?
The City is expected to receive over $100 million in federal stimulus.
Funding of this magnitude could dramatically reshape Lexington, but it is likely to be managed separately from the budget since it is one-time funding.
Will the local stimulus program be continued in this budget?
CM Preston Worley recently proposed reinstating the city’s local business stimulus program with $5M in additional funding.
Will the proposed budget fund ambitious planning goals?
The Division of Planning has made significant progress in implementing the Comprehensive Plan, but there are ambitious goals ahead, including a vast reimagining of the Nicholasville Road corridor.