With financial spending uncertainty ahead, the Lexington city council is considering setting aside more money in a contingency account. One of the primary unknowns is how much the local government will need to spend following anticipated state pension reforms.
Finance and Administration Commissioner Bill O’Mara got council budget committee approval Tuesday for a $10 million budget stabilization reserve.
“We’re looking at the next two years of a lot of uncertainty, specifically with pension reform as well as commitments and programs at the city. So, we feel it’s prudent to have that stabilization fund in case it’s needed in the next two years,” he said.
Although not serving on the budget committee, Councilman Fred Brown expressed concern about locking in that amount of money.
“But that doesn’t mean that we don’t have some projects out there or some problems that we need. And specifically we under budgeted our paving,” Brown said.
Brown contends the current budget falls short in road paving by about $4 million. O’Mara told committee members the city government finished the fiscal year in June with a balance of $65 million.
He said spending in areas like repairs and maintenance, operating supplies, and professional contracts was tightened to make up for lower than expected revenues and higher personnel costs.