Exactions Program Update

In the Budget, Finance, & Economic Development (BFED) Committee meeting this week, Councilmembers will hear a presentation on the Exactions Program.

Building new infrastructure like sanitary and stormwater sewers, roads, and utilities is one of the most expensive parts of new development. The government typically pays this cost via tax dollars or fees. During the last Urban Service Boundary expansion in 1996, Lexington created an exaction program requiring developers to pay a fee for the parcel they were developing in the expansion area, offsetting the cost to local government. If developers didn’t want to pay this fee, they could install the infrastructure themselves and receive an exaction credit for future development in the expansion area.

Since the 1996 expansion, the exaction program has frustrated many. The credit/debit system proved complicated and challenging to track, and, since a significant portion of the 1996 expansion area hasn’t been developed, the uneven collection of exaction fees makes the program hard to operate. In this presentation, the city is recommending the program be dissolved by the end of 2024.

To replace the program, Planning Staff recommends Council adopt stakeholder agreements with developers in the 1996 expansion area to determine ways to fund new infrastructure more efficiently. You can review the entire presentation here.

The question of who will pay for new infrastructure in Lexington’s new expansion area (and how) will be answered through the 2024 Urban Growth Plan.

The Budget, Finance, & Economic Development Committee will meet on Tuesday, November 28, 2023 at 1pm in Council Chambers. You can attend this meeting in-person or watch live on LexTV.