>> good afternoon everybody. Good afternoon.

Thank you. Welcome to the special meeting

of the council to hear the mayor's address. My responsibility is really two

fold. One is to tell you what you already know.

The mayor will be delivering

this budget and also to ask when he's done, if we can take about

a five-minute break, we have a council member work session

immediately following the address.

So without further adue, welcome mayor gray.

[Applause] >> thank you vice mayor and welcome everyone.

Good afternoon.

Today we take another important

step in building our great american city, lexington.

Through a budget for next year that reflects where we've been

and where we are headed. Looking back to our city's

founding in 1775, 242 years ago,

it's a safe bet that budgets in

those early years were not written down.

If they existed at all. Even so, citizens probably gath

ired together and made decisions

about the community's needs and priorities and we are still

doing that today. Since 2011 our focus has been on

creating good paying jobs and

running a lean and efficient city government.

The budget I'm proposing today, which is my seventh budget will

follow that same path as we

continue to create forward

momentum and upward growth from

start to finish, our city's budget is an out in the open

public process and it's quite thorough. After about 40 years in

business, I've learned that government budgets require a lot

more precision and accountability than we are

sometimes accustomed to in the private sector and that's as it

should be.

Council members are an essential and important partners in the

budget process.

Vice mayor steve kay and at

large could you could you remembers mol

and james brown, sasha love higgins, susan lamb, bill

farmer, angela evans, jennifer scutchfield, fred brown,

jennifer mosotti, amanda mays

bledsoe, peggy henson and kathy plomin. Our council members will divide

up the budget I'm proposing

today and closely examine every

expenditure in lengthy hearings. Citizens are also partners in

the process. You are all encouraged to voice

your point of view.

That's what democracy is all about.

The budget process at city hall is all about competition as

well, competition for every

dollar as we work to cover the essentials and also invest in

our future, and that, too, is a good thing.

It challenges us to find new ways to increase efficiency and

do a better job of setting priorities.

In 2011, which was my first year

as mayor, we inherited a city in

a tough financial condition, $9 million hole in the 2011

budget and $27 million projected

shortfall for the next year. together with the council, we

worked and made some tough decisions and put our city on a

track to stronger financial management.

, and since then as this start shows, we have turned things

around, saved for a rainy day,

controlled spending and have surpluses.

The surpluses were grounded in job growth.

As this chart shows, we've seen

a lot of it since 2011, a record

high number this past February. And specifically in growing jobs

with better pay. And those surpluses were

grounded, too, in streamlined

government to live within our means.

And our surpluses are the result

of tough decisions backed up by

the council. Now, with our economy cooling

off somewhat, the budget will

likely stabilize, both this year

and next. But we will adapt and adjust.

Our approach to financial management works when the

economy is moving swiftly and it works as the pace eases.

Thanks to efficiencies and fiscal controls that we put in

place, we are ready to meet a tighter budget head on.

We are ready to live within our

means and provide for our city's essential needs and make

carefully chosen investments that will bring us economic

growth in the future.

The general fund budget that I'm

putting before you today totals $358 million.

We are anticipating a $3.5% growth over last year.

This chart shows our revenue

growth since 2011, reflecting

the high paying jobs that have

been attracted to lexington. Our revenue estimate for this

budget is built with the advice of U.K. Economists and

economists from the private

sector and on the work of our budget team and I want to thank

all of them for the work it

takes to put this spending plan together.

Before I talk about what we've

included in this budget proposal, I want you to know

that we had requests for $8 million in programs and

positions that we were not able to fund, council members you all

know very well that as you work through a budget, you can expect

to encounter many requests for

additional funding. More paving, for example, by the

way we've included $10 million

for paving. So, as you think through those

requests, you May want to consider how we put together

this budget and here are a few of the ground rules we

established. First, cut back on operating

expenses.

We've trimmed 3.5%, about $2 million out of operating costs.

The day-to-day costs of doing

business, non-personnel costs.

Next, based the budget on actual spending.

While being attentive to special requests we based this budget on

an analysis of actual spending, division by division and not

just on last year's budgeted levels.

Third, identify and stick to priorities. We've set clear priorities based

on our city's needs; for

example, questions we asked when considering a project for

funding included will it create

jobs, will it improve public safety?

Finally ground rules included

cut back on hiring. Outside of public safety we

added no new general fund positions this year.

We felt we could either afford

new hires or investing in current employees.

In this budget we are investing

in our employees with a 2% cost of living raise for those not

covered by collective bargaining contracts. We are also investing in our

seasonal and temporary workers, increasing their hourly minimum

wage to $9.15 as we work towards $10.10. It's competitive and it's the

right thing do. In addition going forward this

year with this tighter budget we will examine every open position

and make only essential hires.

So I would urge council to avoid adding positions.

Those of us who were here in

2011 know how painful cutting budgets can be. Now here are the investment

priorities we set in this budget proposal.

First public safety. Public safety is always the top priority in our city budget.

And everyone in the city that I talked to says it's a top

priority for them.

This year's public safety

represents 54% of the general fund budget.

From 2011 to the budget we are discussing today, our total

investment in public safety is

more than $2 billion.

in that time we've increased our

annual investment by 32%,

including a 6.6% proposed increase for next year.

You can see that growth in this

chart.

Even though we've made these, cities across the country face

drugs and crime. We know that doesn't mean a lot

if it is your neighborhood that

has been hit with crime of any type.

The bottom line is simple.

It's our job to do all we can to help prevent crime.

That's what we've done and it's

what we'll keep doing.

Over the past six years we've add 45 police officers building

our authorized strength up to

600, the highest it has ever been.

We must do more to protected a growing city.

The budget I'm proposing this

year is defined by the plan to take the step of adding a fourth

sector to our police department

by deploying 30 new police

officers and six safety officers.

The largest one-year increase for lexington police since we

merged our city and county governments and that's as this

slide shows. The addition of this sector is

needed to serve our growing city.

It allows us to increase community-oriented policing by

dividing the city into four sectors, officers have

leicesterer to to cover.

With four sectors officers have

the opportunity to become more familiar with their

neighborhoods and the citizens

who live there.

when fully deployed, this

adjustment will translate into

660 sworn officers focusing on

safety. For lexington, it's the right

investment at the right time.

Now as we all know, violence prevention is about law

enforcement, yes but it's also about so much more.

And we have been doing more,

digging in to find root causes, expanding youth programs,

preventing drug abuse and attacking addiction.

And we have more work to do. With the rise of the heroin

epidemic, we've seen the need

for increased intervention and coordination to verify where

gaps in our services May exist.

To stay ahead of this crisis, we need a comprehensive inventory

which is already under way and

one manager, one person waking up every day thinking about how

we can improve.

As east end neighborhood advocate billy mallory says and

I quote billy, we have plenty of

structures in place but we are

lacking shared communication, cohesiveness and collaboration.

We need strong and coordinated

leadership to help make this

happen. Billy that's what we are

proposing with the one lexington initiate. A new program with existing

dollars that will coordinate all

our activities that address both

drug addiction, drug abuse and crime. Inside city government and

outside with our public and private partners.

The goal is to do our best to comprehensively take care of our

people before they go down a

path that leads to violent behavior.

As we crackdown on gangs and criminals both inside and

outside our city; therefore, our

team is proposing the hiring of a one lexington director.

This proposal comes from our chief administrative officer,

the commissioners of public

safety and social services as

well as our police chief and several council members.

We've created similar rolls in

other areas in the city and they have proven effective.

For example, in homelessness intervention, housing and

workforce training. This initiative will not cost

anything additional in the current budget so we are taking

steps to get this in front of the council quickly so we can

move forward soon. Partner agencies are also

important in our work to prevent

drug abuse and reduce crime and

so much more.

Therefore, we are keeping our extended social resource grants,

our esr grants, the funds we use to assist social service

agencies throughout the community, we are keeping those

funds at the same level that has year at $3 million.

Since 2012, our city has almost

doubled funding for these grants as federal and state governments

have cut back in funding. These grants help citizens

through our city, those who need help the most.

They're essential.

Another important solution to

violence prevention is having a good job.

Quality of life for our city and

its citizens depend on creating

good jobs, good paying jobs, and

jobs at all skill levels. Creating jobs has been a top

priority since the first days of this administration and it's

just as important today.

Jobs give purpose and meaning and life.

In this budget our investment in projects and programs that will

produce jobs, for example, effective in senate programs

like the jobs fund, workforce development to attract better

jobs, construction projects like town branch commons and the

convention center, economic development partner agencies.

In this budget, our investment in projects and programs that

will produce jobs tops $8 million. And that's a conservative

estimate. That $8 million includes a third

investment in our jobs fund, a unique local incentive program

designed to make lexington more

attractive to high wage industries.

Doubling it it includes doubling

our funding up to $300,000 for workforce training grounds to

ensure we have a workforce with

the right skills to meet companies needs today.

The goal is to be a community

with a skilled workforce.

And this $8 million includes continued funding for our

bluegrass farm-to-table initiate

which now works with 66 farms in 25 counties.

We all know that agriculture is an important and signature part

of our economy and we are

working to grow that sector. Quality of life one of the

reasons businesses move their

jobs to lexington. it is one of the reasons that I

moved to lexington and shortly afterwards the rest of my family

moved here and then our business moved here. We are making several

investments in quality of life in this budget.

First town branch commons. A friend recently told me about

how his father, as a child, used

to sled down mill street in the

winter, slide across a bridge

over the town branch and coast

all the way to main street. Now obviously that was a little

while ago.

Water features will be a part of

the appeal of town branch commons.

A 3.2-mile park that will wind

through downtown, roughly

following the path of town branch once our city's water source.

Work is under way.

The project is expected to

create 200 construction jobs and

many more permanent jobs. As other cities have found,

private investments follow these

kinds of public projects. Funding m this budget fulfills

last year's commitment to the project, a project that has

attracted generous federal and

state support. Plans call for town branch to

pass along our new convention center. One of the largest public

investments in lexington since

rupp arena which opened in 1976

over 40 years ago. The new convention center will

stimulate development, produce

millions of new convention and meetings each year, encourage

business and produce hundreds of direct and indirect jobs.

it's one of the largest economic development projects in the

state today. Planning for the facility counts

and therefore its design and construction pricing continue to

be refined.

The detailed budget estimates,

the guaranteed maximum price, will follow soon.

Last year the city dedicated funding to the project and the

state as well as the university

of kentucky have stepped up to the plate.

To make the project a reality this year we are proposing a

place holder to fulfill the last dollars in.

Value engineering in the design phase has helped us keep costs

down on other projects like our

sanitary sewer E.P.A. Concept decree projects.

The same rigorous process must be applied to the convention

center. And coming from a career in

construction, this is something that I'm sure of and that I'm

committed to.

Now quality of life also means continuing our work in improving

the appeal, the attractiveness

of our city, another investment

in this budget.

We will maintain the landscape beautification started during

the breeder's cup and expand it

to include the richmond road corridor. We are continuing our work to

keep major corridors clean and

once again, we've included funds to preserve our country side and

the jobs that are part of our

agriculture sector.

For 17 years now, we've invested in our purchase of development

rights or pdr program and this

year we are proposing to include $1 million. The board and the program are

well on the way to acquiring 35 farms over the next two years

which would increase the land

protected to 32,000 total acres

and that's a significant

milestone that we should all celebrate.

Now finally, here are other significant initiatives that

we've included in this budget.

We are purchasing just over $2.5 million in new equipment for the fire department.

As we replace equipment and we

move ahead with plans to build station 24, which will be the

first additional fire station in

lexington in 10 years. This chart shows our investment

in fire, police and corrections capital projects since 2013.

It's a total that represents a

total of $58 million with the

majority 30.4 million going to the fire department.

And at the jail today, we are

investing in a new computer security system.

It's essential to the safety of

both inmates and corrections

officers.

Now let's talk about planning and development. Through this budget we are

funding a newly established infrastructure fund.

An infrastructure stunned -- fund to help developers address the

higher cost of complicated infill construction sites.

We are also continuing investments in our popular

trails.

Funds for the brighton rail trail bridge.

That's a tongue twister. The brighton rail trail bridge

is in this proposal and it includes maintenance funding for

all of our trails. And, like I mentioned a little

bit earlier, we have also included $10 million for paving

as we continue to improve basic infrastructure.

Now let me close this afternoon

with this. I said at the beginning that our

city has a long and storied

history settled in 1775. That's 242 years ago.

One year before the declaration

of independence itself was signed.

You know, that's 242 years of disciplined attention to

providing basic services like

public safety and of creating

aspirational goals as well and achieving them.

That discipline continues today. It's part of this budget.

Those of us who remember lean

budget years in 2011 and 2012, we remember digging out of the

great recession.

We also remember that

challenging budgets bring out

our best imagination, yes

efficiencies, a focus on priorities. And that's just the same

challenge and the opportunity

that we have before us today. So thank you all very much for

joining us today and I believe the vice mayor, you said in five

minutes we will convene our work session. Thank you all very much.

[Applause]