Lexington council restores funding to shelters, housing. Money added for businesses.
The Lexington council voted Tuesday to restore funding to shelters, other social service programs and the affordable housing program in the upcoming budget.
The council also added $2.5 million to the budget for grants to Fayette County small businesses hit hard by the coronavirus.
The council decided to tap $6.4 million from its rainy day funds for the programs in the next fiscal year that begins July 1. The city will then replenish those rainy day funds with up to $25 million in reimbursements from federal stimulus funds for COVID-19 related expenses.
The council voted Tuesday to allocate $1.8 million to the city’s affordable housing program, which could be used to fund 800 affordable housing units. The council also allocated $2.1 million for the extended social resource program, which traditionally funds shelters for women, children, families, food banks and other nonprofits.
At least half of the $2.5 million to help small businesses will be set aside for minority and women-owned businesses, which have been hit hard by the economic downturn related to the coronavirus. The details of how that small business stimulus program will work will be decided at a later date.
Also on Tuesday, the council decided to cut about $35,000 from the council budget to be used to fix possible holes in the budget at a later date.
The council will have its first reading on its now more than $379 million budget on June 9.
In late April, Lexington Mayor Linda Gorton proposed a lean $372 million budget for the next fiscal year as the city’s revenues cratered due to business-related shutdowns caused by the coronavirus pandemic.
To make up for a predicted $40 million revenue shortfall, Gorton proposed taking $30.2 million from various city savings accounts, including $13.6 million from a $35.6 million economic contingency fund and $9.4 million from an $11 million reserve fund for increased payments into the state’s beleaguered pension fund.
Gorton initially proposed an additional $12.6 million in cuts across city government and the $6 million in cuts to outside agencies that the council addressed Tuesday.
The cuts to social service agencies, homelessness and housing programs drew fire from many advocates and some on the council.
The city was able to find additional money on Tuesday for the Office of the Homelessness Prevention and Intervention and did not need the council to allocate $400,000 that Gorton proposed cutting, said Chief Administrative Officer Sally Hamilton.
The city learned late last month that it would be eligible for up to $25 million in funding through federal coronavirus relief money. But those funds can only be used for COVID-19 related expenses. The money cannot be used to make up for revenue shortfalls.
The city will have an estimated $5 million in COVID-19 related expenses from March to May 30 eligible for reimbursement, city officials have said. That means $5 million would be available to spend elsewhere.
Councilman Preston Worley, who proposed the $2.5 million small business program, said many Fayette County businesses are hurting and in danger of closing. Worley said he envisions one-time grants to those small businesses.
In addition, the city is pursuing grants for low-interest loans to small businesses. The city should know in the next 60 to 90 days if that money will be available, said Kevin Atkins, the city’s chief development officer.
But some on council expressed reservations about allocating the $2.5 million Worley proposed when the parameters of the program and studies to determine need have not been completed.
“Generally we get a plan of action… then we go and get the funding,” said Councilman Fred Brown. ‘”It’s backward.” Brown said he also had reservations about giving businesses grants rather than low-interest loans.
Worley argued the council needed to act now to allocate the funds because businesses need help now. Worley also agreed to an amendment by Councilman Chuck Ellinger Jr. to designate at least half of the funds to minority and women-owned businesses.
Budget, Finance and Economic Development Committee Chairwoman Amanda Bledsoe said the committee meets June 23 and could vet some of the parameters of the program at that meeting or at a meeting in August.
The council ultimately voted to set aside the $2.5 million for the program with the caveat that unused money could be returned to the general fund to pay for other expenses.
This story was originally published June 2, 2020 at 4:29 PM.
