An overview of the Economic Contingency Fund, and proposed amendment
Lexington-Fayette Urban County Government Center. Source: City of Lexington.
In Tuesday’s Budget, Finance, and Economic Development (BFED) Committee, Councilmembers will hear a presentation on the history and current status of LFUCG’s Economic Contingency Fund.
The Economic Contingency Fund was established in 1996, and serves as a savings fund that Council can draw from for financial support during a natural disaster, a Budget shortfall, or other circumstances that create financial instability the City had not planned for.
Lexington’s goal is to maintain 10% of the previous year’s General Fund balance in the Economic Contingency Fund. However, due to the COVID-19 pandemic, Lexington withdrew funds from the Fund and has not resumed making contributions to the Fund.
Right now, the fund is at roughly 8.2% of the FY23 General Fund, or $39.2 million.
The current 10% goal is roughly $45 million.
A chart showing the current Economic Contingency Fund’s total balance, the balance as a percent of the General Fund, and the 10% goal number. Source: June 25th BFED Committee Packet, City of Lexington.
The presentation will also include a proposal to amend the ordinance regulating the Economic Contingency Fund. The change would require a monthly contribution of $75,000 to the Fund each Fiscal Year until the 10% goal has been met, at which points contributions would cease.
You can review the presentation slides and ordinance amendment starting on page 41 of this packet.
The Budget, Finance, and Economic Development Committee will meet on Tuesday, June 25th at 1pm in Council Chambers. You can attend in-person or watch live on LexTV.
