Fayette County

Gray touts economic record and Lexington’s strong finances, remains mum on Senate run

Lexington Mayor Jim Gray delivered his state of the city address Tuesday in the Bluegrass Ballroom at Lexington Center.
Lexington Mayor Jim Gray delivered his state of the city address Tuesday in the Bluegrass Ballroom at Lexington Center. cbertram@herald-leader.com

Lexington Mayor Jim Gray spent much of his sixth state of the city address Tuesday on job growth, economic development and Lexington’s robust finances.

“Lexington’s model is working; we are an economic engine for our state,” Gray said during his speech at the Lexington Convention Center.

During his nearly 30-minute speech before the Lexington Forum, Gray touted economic development initiatives and changes in policing aimed at cracking down on crime. He gave updates on key capital projects, including construction of a new downtown linear park and trail — the Town Branch Commons — and an overhaul of the Lexington Convention Center and attached Rupp Arena.

But Gray did not unveil any new major initiatives or capital projects during his speech, further raising questions about his political aspirations.

Gray, a Democrat, has confirmed that he is considering challenging Republican U.S. Sen. Rand Paul in this year’s Senate race. Gray gave no indication during his speech whether he plans to take on Paul but said afterward that he plans to make an announcement before the Jan. 26 filing deadline.

Gray said the absence of new projects or initiatives should not be taken as an indication that he is going to run.

“We have plenty of projects in progress, and we have got to get our arms around those,” he said.

Gray, 62, won re-election in a landslide in November 2014, becoming the first Lexington mayor in 16 years to win a second term. Gray can run for a third and final term as mayor in 2018. If the mayor ran against Paul, he wouldn’t have to give up his job as mayor unless he won the Senate seat.

During his speech, Gray said that since 2014, nine local companies have used city incentives to expand. Those local incentives also have helped attract three new companies. Unemployment is at 3.6 percent, a historic low. Home sales are up and foreclosures are down. Nearly one-third of all new businesses that have started in Kentucky have started in Lexington, Gray claimed.

Over the past six years, the city has tightened its belt, he said. Because of changes to city employee health insurance, the city has been able to keep health insurance costs flat. The city also made changes in 2013 to the police and fire pension fund. That fund is now 78 percent funded, one of the most well-funded pensions in the state.

The city also has tried to shave costs through contracts. A switch in its solid waste contract last year from Republic to Waste Services of the Bluegrass saved the city $4 million.

During the recession, the city’s finances took a dive. But in the past five years, the city has had surpluses. It now has $32.2 million in its rainy-day fund.

Gray spent part of his speech talking about investments in public safety, which has been a top issue in the past month. Four people were slain in the first 13 days of January. Arrests have been made in two of those four homicides.

“Since 2011, we have invested about $1.5 billion in public safety — a 22 percent increase over five years,” Gray said.

Lexington Police Chief Mark Barnard also is looking at a new initiative — a safety action team consisting of social service providers, the courts, churches and civil rights activists. That team will look at underlying causes of crime and at other measures besides policing to address crime, Barnard said.

The city already has set aside $10 million in bond money for Town Branch Commons, a 2-mile linear park that will connect the city’s downtown to its rural trail system. The city has also received about $6 million in federal transportation grant money through the Kentucky Transportation Cabinet to build infrastructure for the trail.

Design and construction work will begin this year, Gray said.

“Town Branch Commons has the potential to be a centerpiece of our community for decades,” he said.

The city is pursuing $75 million in state money for an overhaul of the Lexington Convention Center. In addition, city officials plan to pursue legislation that would increase the hotel and motel tax by about 2 percent to help pay for the nearly $250 million remodeling and expansion.

Gray said after Tuesday’s speech that officials with Commerce Lexington were scheduled to meet with Gov. Matt Bevin on Tuesday about the city’s $75 million request.

Gray said there were “no indications yet” whether Bevin would put the request in his proposed budget.

Bevin is expected to deliver his budget address — which would outline his spending plan — later this month.

Gray did not mention the long-stalled CentrePointe project in his speech Tuesday.

New developers took over that downtown development last summer. The new developers had proposed moving city hall to the development that is also supposed to include an underground parking garage, an apartment building, hotel and restaurant and retail space. The city is waiting on a real estate consultant’s report to determine whether moving city hall to the block is the best use of city tax dollars. That consultant’s report is due in coming weeks.

“We are hopeful that the new developers will come up with a plan that will be responsible and productive for the city,” Gray said Tuesday. “It’s been a challenge, of course, but there is still potential for it.”

At-Large Councilman Kevin Stinnett said after Gray’s speech that he wished Gray had focused more on future plans.

“It was a great recap of where we have been and some of things that we have gotten done. But it was light on where we are going,” Stinnett said.

Councilwoman Jennifer Mossotti agreed.

“I think it was a good start but I think we have a lot more to do particularly with our parks, paving and our other infrastructure projects,” Mossotti said. “I have a lot of neighborhoods who have had a lot of issues with public safety – they are seeing more vandalism and things like that. I think we have a lot more concerns about safety.”

But Vice Mayor Steve Kay said the city has a lot on its to-do list right now and must focus on getting key projects completed before the city can move on to other things.

“People are excited about Lexington and I think his speech reflected that,” Kay said. “We have enough on our plate. I was not surprised that there wasn’t any new initiatives.”

Kay and other council members said Gray has not told them if he will run for Senate. But Kay said if Gray does decide to run, the city’s day-to-day operations will not suffer.

“He’s got a great team in place,” Kay said. “From my perspective, it’s the strongest it’s ever been...We have a great CAO (Chief Administrative Officer Sally Hamilton).”

Beth Musgrave: 859-231-3205, @HLCityhall