Budget COW this week to discuss Fund Balance Proposals from the Mayor and City Council
On Tuesday, October 31st, there will be a special Budget Committee of the Whole (COW) meeting to discuss the Fiscal Year 2023 Fund Balance.
What is a fund balance?
At the beginning of every fiscal year, the City of Lexington adopts a budget for the next 12 months based on how much money they think they will make, and how much money they plan to spend. Like any budget, this is all a projection - often, things cost more or less than expected, or revenue is higher or lower than expected.
At the end of every fiscal year, the city reviews the difference between what was budgeted and what their actual expenses and revenue were. Sometimes, there is money left over. This money is called a fund balance.
The annual fund balance conversation is a unique opportunity for the city to make significant funding decisions outside of the typical budget or budget amendment process.
In this meeting, the Council and the Mayor will discuss how to spend the city’s $55.9 million fund balance from the fiscal year that ended June 30, 2023.
How will the city use the fund balance?
There are a variety of options for spending the unassigned fund balance - it can be spent on special projects, saved for a future date, and more.
The Mayor’s Administration has submitted recommendations to Council for how to allocate the money. These recommendations total $55.9 million, or the entire fund balance. Recommended projects include:
$44.6 million for a Capital Project Construction Fund that could go towards projects like a new City Hall, Senior Center, or public safety facilities. Typically, large capital projects like these would be funded through bonds.
$2.2 million for a Council Capital Project Fund, allowing Councilmembers to allocate money for capital projects in their districts.
$5 million in additional money for Lexington’s Affordable Housing Fund.
$1.5 million for the Dunbar Community Center building improvements.
However, the Mayor’s priorities are just a recommendation, and the decision is ultimately up to Council. Council has submitted a list of projects totaling $19 million they are interested in funding, including:
$9 million to the Fayette Education Foundation for building a permanent day shelter and permanent homeless transitional housing facility, submitted by CM Fogle.
$1.2 million for renovating and expanding the Valley Park Building, submitted by CM Reynolds.
$1 million for supporting Solarize Lexington’s programs to install solar panels on low-income homes, submitted by CM Sheehan.
$1 million for supporting Phoenix Park improvements including a public restroom, new dog park, and shade structure as a part of the Phoenix Park Reimagined project, submitted by CM LeGris.
$750k to the Department of Housing Advocacy and Community Development for the Innovate and Sustainable Solutions Fund, submitted by Vice Mayor Wu.
Combined, the Mayor’s and Council’s proposals total just over $75 million, meaning that several of the recommendations from the Council and Mayor will likely not be funded.
You can view the full Budget COW packet here. The Budget COW will be held in Council Chambers on October 31st at 12pm. You can attend in-person or watch live on LexTV.
