The Lexington council agreed this week to restart its search for a new home for city government.
The Lexington-Fayette Urban County Council decided Thursday to break into subgroups to figure out how to finance a new government center, where it should be located and which city offices it should house.
Vice Mayor Steve Kay said the council needs to make a decision on all of those issues before moving forward on a specific proposal. The council subgroups will meet over the next several months.
“We will move quickly but we will not rush,” Kay said.
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Mayor Linda Gorton has previously said there will be no money for a new city government center in the budget for the upcoming fiscal year, which begins July 1.
The city is trimming $2 million from its current-year budget. It also is bracing for more cuts in the fiscal year that begins July 1.
Chief Administrative Officer Sally Hamilton cautioned the council they may want to wait until the upcoming budget is finalized before moving forward on a city hall plan. Gorton will release her budget proposal in early April.
“You need to really see if this is really the right time,” Hamilton said.
Kay said the council must first agree on how much it wants to spend, how it will finance a new city hall and where the city wants to relocate. With those issues resolved, the city can move forward when money becomes available, he said.
The city has debated for decades whether it should consolidate its operations and move to a different location. Last fall, the council scuttled a public-private partnership that would have moved the city’s operations to the Lexington Herald-Leader building at Main Street and Midland Avenue. The city would have paid a private developer $5.1 million a year for 35 years and own the building at the end of the lease.
At the time, some council members said they were uncomfortable with the cost of the public-private partnership. Others didn’t like the location.
Council members agreed during Thursday’s meeting that a new government center is needed. The city’s five downtown buildings, including the former Lafayette Hotel on Main Street, are aging. Deferred maintenance for all five of the buildings is $22.5 million, according to one report.
The city’s borrowing has increased over the years — it’s debt payments are nearing 12 percent of its revenue. The city’s goal is to have borrowing at under 10 percent.
Hamilton told the council that borrowing for a new city government will not be possible.
Many said they liked the public-private partnership model because the developer would pay for maintenance and the city didn’t have to borrow money.
Councilman Richard Moloney said the city currently spends $2.9 million a year on its buildings. “That should be our budget,” Moloney said.
Other council members said they wanted to know more about how much space the city needs and how many leases for private property the city currently has in addition to its five downtown buildings. A lease for a building that houses the city’s water quality division costs the city $406,000 a year, officials said.
Others said they want to know how much the city’s current buildings are worth and if there would be interest if the city put them up for sale. Those buildings include the main government center, the police station and the city clerk’s office, all on Main Street, and the Phoenix building on Vine Street.
Councilman Fred Brown said the buildings could be sold to help pay for a new building.
“You have some valuable property,” Brown said of the Main Street properties. “You could sell those properties and help pay the debt.”