In his State of the Merged Government address on Tuesday, Mayor Jim Gray hailed the agreement between the city and police and fire unions that immediately cuts in half the city's unfunded liability on safety workers' pension fund as a major accomplishment this past year.
The agreement achieved Thursday night "aggressively attacks the remaining liability" with no more pension bonds and puts the city on a path "to restored financial strength," Gray told the audience for his speech in the Patterson Ballroom of the Hyatt Regency. Reached after two task forces, five years of work and weeks of intense negotiations, the agreement now goes to the Legislature for approval.
The State of the Merged Government, sponsored by Lexington Forum, is a look at the condition of city government, Gray said, "where we have been, where we are going."
Achieving financial stability was the overarching theme of the mayor's remarks.
Because of tough decisions made in cooperation with the Urban County Council, "our financial house is back on track. We're not out of the woods yet, but we are back on track," Gray said.
Other steps that contributed to a more secure financial picture for the city included adding jobs, attracting corporate headquarters and reforming employee health care benefits.
Tackling health care was an important move that is expected to have reduced city costs in fiscal 2012 from $37 million to $27 million.
Gray said the city had focused its resources "to overcome our own fiscal cliff" of a $9 million deficit in fiscal 2011, and a $27 million deficit in fiscal 2012. "Today our budgets are balanced," Gray said. "We ended 2012 with $3.3 million surplus after adding $3.4 million to the Rainy Day Fund and more to other reserve funds."
Other highlights of the mayor's address included:
■ The city is emerging from the recession ready to grow and attract jobs, Gray said. He recognized several firms including Florida Tile that moved its headquarters to Lexington in 2011 and A&W, which moved its headquarters here in 2012. The Bingham-McCutchen law firm opened its global service center in Lexington last year bringing 250 jobs. 21C Museum Hotel will open in the old Fayette National Bank Building on Main Street with 150 jobs.
Additionally, Central Baptist Hospital has a major addition under construction, St. Joseph Hospital has expanded, and the University of Kentucky has a new hospital.
■ Fayette County now has 179,578 jobs, according to the Federal Bureau of Labor Statistics. That should yield improvements in tax revenue, Gray said. Unemployment is down from 8.7 percent at the height of the recession in 2009 to 6 percent, but that is still twice the unemployment prior to the recession.
■ When it comes to building a great American city, Gray said the city has to continue to "think big" in 2013. That includes reinventing Rupp Arena, energizing the surrounding blocks to create an Arena, Arts and Entertainment District, finding new life for the old courthouse and bringing Town Branch to the surface to create a park that would wind through downtown along the path of the creek.
Gray recognized Lilly Chamblin, 7, who wrote him a letter last week, offering to collaborate with friends to raise money for the project. In her letter Lilly wrote, "Dear Mayor Gray, I love the idea of uncovering the river down town. Because I think it's such a good idea I'm donating this money to you."
Gray held up the plastic bag of coins Lilly had sent.
Lexington's population for the first time exceeds 300,000, Gray said. It is 301,569.
Other initiatives Gray pointed to will be creating a new position to expand marketing local foods, building a new senior citizens center to replace the one on Nicholasville Road, and re-timing traffic signals on major highways.
Vice Mayor Linda Gorton said, "Wow, we've been busy. What a ton of good things have gone on."
When asked whether the mayor had painted an overly optimistic picture of accomplishments, Developer Holly Weidemann said she did not think so.
"I think the list of accomplishments could have gone on and on," she said, adding, "There is an enthusiasm about the city today, and enthusiasm is contagious."
Beverly Fortune: (859) 231-3251. Twitter: @BFortune2010.