LEXINGTON, Ky. — The Budget, Finance & Economic Development Committee met Tuesday to review the city's financial status as Lexington begins its new fiscal year, examining July revenue collections and year-end closing procedures for the previous budget cycle.

City finance officials presented the monthly financial update for July 2026, the first month of the newly approved $847 million fiscal year 2027 budget. Finance Director Wesley Holbrook reported that July revenues came in slightly under budget at about 5 percent below projections, driven largely by timing issues and the typical seasonal pattern where the city does not receive substantial property tax revenue until November.

Officials noted that a major taxpayer's payment was mailed to an incorrect address and not received until July 2, requiring an $8 million accrual adjustment back to the previous fiscal year. Holbrook explained that the finance department closely monitors the city's top four revenue sources—payroll withholding, net profit taxes, insurance payments, and property tax collections—to ensure proper cutoff procedures during the year-end closing process.

Motor vehicle ad valorem tax collections exceeded budget by $300,000, while detention center bed fees contributed to higher-than-expected revenue in the services category. Holbrook indicated that overall July figures remained close to budget projections when accounting for one-time accruals and timing adjustments that occur during the beginning of the new fiscal year.

Council member Dave Sevigny asked about the $8 million in revenue accruals moved back into the previous fiscal year, noting the impact on fund balance for fiscal year 2026. Finance officials acknowledged that these adjustments improve the prior year's fund balance, though they noted that revenues running under budget during the year would have provided additional benefit.

The committee also heard from new team member Elaine Stucky, who joined the city's accounting department for the new fiscal year and is participating in the annual audit process. Officials highlighted that several new personnel and supervisors have assumed roles in the finance department as the city begins its new budget cycle.

On the expenditure side, Director Lueker reported that year-end closing for fiscal 2026 remains ongoing. Health insurance subsidies have not yet been recorded, and transportation costs that typically require time to process during fiscal year closing have not been fully booked. The committee heard that a $3.2 million variance in operating expenses is spread across multiple divisions rather than concentrated in a single department.