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Lexington City Council held a public hearing on the city’s proposed budget for the 202425 fiscal year at its meeting on last Thursday. Council will hold a vote on approving the budget at a future meeting.
Under the proposed budget, tax rates for the city will remain the same in the upcoming fiscal year, but water rates from the Maury Service Authority are expected to rise, resulting in an 8 percent increase in water bills for citizens. Within the city, minimum usage will be charged at $44.15 per month and those outside the city limits on the water system will be charged $59.62 per month for minimum use.
The proposed budget totals $47,390,066, an increase of more than $12 million over last year’s budget of $35.2 million. The majority of that increase is a result of several planned capital investments over the next fiscal year, including a $6.2 million renovation to city hall and $930,765 for the city’s portion of the construction of an auxiliary gym at Rockbridge County High School. In total, the city is budgeting $14,629,679 in capital investments for the upcoming fiscal year, including $9.8 million in capital projects, $4.4 million in water and sewer projects and $417,788 in equipment purchases.
A total of $17,173,345 is proposed for general fund expenditures, an overall increase of $799,423 from the adopted FY24 budget. Specific increases proposed for FY25 include $138,028 for the police department; $17,281 for central dispatch; $371,628 for public works; and $249,356 in increased school funding.
Other expense increases proposed in the FY 25 budget include a 5 percent cost of living adjustment for all city staff and $40,000 for the fire department to cover the cost of medicines for the city’s ambulance. At a budget work session on March 14, Lexington Fire Department Chief Ty Dickerson explained that the new line item was due to a change in federal and state policies regarding the medicines used by ambulances. Previously, the drugs were stored and supplied by the hospital, but now the city will be responsible for purchasing the drugs.
On the revenue side, city Finance Director Jennifer Bell informed Council during her presentation of the proposed budget that the city is budgeting a 3.8 percent increase in revenues from FY24. General fund revenues are increasing to $22,641,786, up $801,986 from last year’s budgeted $21,839,800.
While the city is expecting property tax collections to remain in line with last year’s budget, it is expecting an increase in meals, lodging and sales tax collections. The city is budgeting $1,473,876 in sales tax, $798,196 in lodging tax, and $1,984,302 in meals tax revenues for the upcoming fiscal year, anticipating respective increases of $136,733, $116,862 and $280,378 from FY24.
The city is also anticipating a $33,000 increase in rescue service fees (up to $394,000 in FY25) and a $154,449 increase in county revenue sharing payments (up to $2,472,899 in FY25).
