LEXINGTON, Ky. — The Lexington-Fayette Urban County Council discussed a proposed $546.9 million budget for fiscal year 2027 during a Committee of the Whole meeting Monday, as city officials reported a strong third quarter performance for the current fiscal year.

The council adopted a total funds available amount of $546,901,379 to serve as the foundation for council discussion of Mayor Linda Gorton's proposed general fund budget, according to the meeting archive. The move came after City of Lexington Financial Director Holbrook presented the FY2026 Quarter 3 financial update, which showed the city ended the third quarter with a $429,000 surplus.

Through the first nine months of the fiscal year ending June 30, 2026, revenue collections are slightly above budget at 1.8 percent above projections, according to Holbrook's presentation. The director noted that April is historically the city's largest revenue month due to net profit tax payments, with city staff currently processing significant volumes of mail containing tax receipts.

On the expense side, Holbrook reported that personnel costs are $8 million under budget following sick payouts and mid-year retirements, creating potential for reallocation. The city continues to monitor operating expenses in light of rising fuel costs and contract surcharges heading into the fourth quarter.

The mayor's proposed FY2027 budget includes strategic investments in public safety and infrastructure. The budget must be adopted by June 15, with a public hearing scheduled for May 14. The proposal allocates $78 million for capital investments, including $13 million for paving and a new $5 million allocation for snow and ice removal.

Slower payroll revenue growth is expected over coming years, potentially affecting the city's ability to expand programs. Mayor Gorton has emphasized fiscal restraint in developing the budget, noting that the plan creates three new city positions, the lowest number since 2021. The proposed budget includes no tax increases and limits city borrowing.

Council members will meet in small working groups called "Links" to examine specific budget items before subsequent Committee of the Whole meetings to finalize recommendations and amendments. Multiple opportunities for public input remain available throughout the budget adoption process.