The Thank you. The End Thank you. ¶¶ The End ¶¶ ¶¶ Thank you. guitar solo Please take your seats, we'll get started. Thank you, welcome again. This is a special meeting of the Urban County Council for the purpose of hearing the mayor's budget address. Before I introduce the mayor, just one housekeeping piece and and that is after the Mayor's address, we'll take a five minute break to reset the room so that we can then have a work session as usual. So it's my honor, obligation, pleasure to welcome all of you and to welcome you to the eighth budget address and the last budget address by Mayor Gray. So welcome, please help me welcome Mayor Jim Gray. Thank you, Vice Mayor, and welcome everyone this afternoon. Creating jobs, running government efficiently, and building a great American city. With these goals as our foundation, we've actually created thousands of jobs, and we've saved millions through efficiencies and put our city back on firm financial footing. We've made our city safer. We've made investments to build a great American city, a city with a quality of life that regularly attracts national blue ribbons. Yes, Lexington is routinely listed among the nation's best places for business, for children, for citizens, for vacations, and even as a great place to eat. Yes, we are one of the 30 most exciting food cities in America. The budget I'm proposing today will once again focus on creating good-paying jobs and running a lean and efficient city government as we continue to create forward momentum and upward growth. Start to finish, our budget process is an out-in-the-open public process. By the time our council members vote on a budget, they have completely done a thorough review, and the public has had a lot of opportunity to weigh in on every decision, and that is as it should be. Council members are essential, important members of the full budget process. Vice Mayor Steve Kay, at-large council members Kevin Stennett and Richard Maloney, and district council members James Brown, Joe Smith, Jake Gibbs, Susan Lamb, Bill Farmer, Angela Evans, Preston Worley, Fred Brown, Jennifer Massati, Amanda Mays Bledsoe, and Peggy Henson and Kathy Plowman. Council, with your help, will again put together a budget that stays true to our goals and stays true to our citizens. Thanks to all of you for your leadership, for your determination, and for your commitment. Let's start today by talking about what some might describe as the elephant in the room, pension costs. of the state pension question, it's been a challenging year to put together a budget, a little more challenging than most. Yes, money is always tight and resources limited. The budget process at City Hall is all about competition, competition for every dollar as we work to cover the essentials and also to invest in our future. And this year, our budget also came with a big unknown. We knew there would be a state mandate coming from Frankfurt, a significant increase in our pension costs. But the multimillion-dollar question has been, how much will our city be required to pay? As a result of the legislature's initial passage of a bill to phase in these increasing costs over several years, we think we will have some relief. With this phase-in, our current estimate for this budget is $3.1 million, a $3.1 million increase in pension costs across all of our funds, our general fund and our other funds. The governor has voiced his support for the phase-in, but he vetoed the bill for other reasons. Like mayors of cities across Kentucky, I hope the legislators and the governor can work together later this week to give final passage to a phase-in bill. And thanks to our decision last fall to set aside funds for pension costs, we are able to cover the costs this year. This decision will also help us as we manage the increased costs in future years. As hard as it is to build a budget on uncertainty, our excellent budgeting team, Sally Hamilton, Jeff Reed, Bill O'Mara, Melissa Luker, and their staffs, They've kept our budget on track as the news from Frankfurt shifted. As I finalize this speech, additional changes have come out of Frankfurt. But in making our final budget decisions, if we face more changes in pension costs, we are ready. Now let me take a minute and drill down into just how it's been possible for our city to swallow a pill this size. pension costs up $3.1 million in one year. Had we faced this problem just a few years ago, the impact would have been extreme, even catastrophic. Now, that's a strong word, but it's not over the top, and in this case, it fits. In 2011, my first year as mayor, we inherited a city in a tough financial condition, the really peak of the recession. We had a $9 million hole in the 2011 budget and a $27 million shortfall projected if we'd continued at the same spending the next year. We've turned that around. We have saved for uncertainties. Our rainy day fund today stands at $31.4 million, almost double what it was in 2011. We've controlled spending. We created surpluses in each of the last seven years. The $10 million we set aside last fall for the increased pension costs came from these surpluses. Thanks to efficiencies and fiscal controls put in place, we are able to absorb the pension pill. It isn't easy, but it's manageable. We've learned how to live within our means, and that's evident in the budget that I'm presenting today. This budget says yes to many important initiatives, but we also had requests for over $10 million in programs and positions that we could not fund. Yes, we have learned how to live within our means and provide for our city's essential needs and make improvements that will bring economic growth for the future. The general fund budget I'm putting before you today totals $370.7 million, and that includes, that anticipates, a 3.5% growth over last year. This revenue estimate of 3.5% growth is again built with the advice of University of Kentucky economists, economists from the private sector, and the work of our budget team. And once again, we followed some basic ground rules in putting together this budget plan. First, we held the line on operating expenses, the day-to-day cost of doing business. Secondly, we've again based the budget on a painstaking analysis of actual spending and actual needs, division by division. And third, we continue to monitor hiring, examining every open position. We added no new general fund positions this year outside of public safety. We abolished four general fund positions. Other than the staffing increases we have made in public safety over the last seven years, we've hired police officers firefighters and corrections officers to keep our growing community safe but outside of those outside of public safety we are currently operating government with just 13 more full-time employees than we had in 2011. let me say that again outside of public safety we are currently operating government with just 13 more full-time employees than we had in 2011. The progress and many of the accomplishments of the recent years came through the efficiencies, technology, and emphasis on continuous improvement that are now embedded in the DNA of our government. Progress has also come from valuing and investing in the highly productive employees we have. We are doing so again in this budget with a 2% cost of living raise for those not covered by collective bargaining contracts. And we are taking our final step in raises for our seasonal and temporary workers, increasing their annual wage to $10.10. It's competitive, and it's the right thing to do. Finally, in this budget, we are sticking to priorities, clear priorities, based on our city's needs. In putting this budget together, when we considered funding for a project, we asked this question, Will it create jobs? Will it create opportunity? Will it improve public safety? Will it make us more efficient? Will it improve quality of life? Here are the investment priorities we set in this budget proposal. First, always first, public safety. The council is well aware that public safety is always a top priority in our city's budget. Our citizens agree. This year, public safety represents 55.5% of the general fund budget. From my first budget in 2011 to the budget we're discussing today, our total investment in public safety has been $2.3 billion. And in that time, we've increased our cumulative investment by 38%, including a 3.8% proposed increase for next year. Last year in public safety, our focus was on new police officers, and this year it's on new firefighters. This budget includes 25 new positions in our fire department, with 24 to staff our new station in Masterson Station, the largest firefighter force our city has ever had. This is an additional station, our 24th, and it reflects the growth in this part of our community, Masterson Station. Hiring staff now allows us to be ready to open the station when it's completed in 2019. It is also the second station we have built since 2016. both significant investments, important investments, and needed investments in public safety. Also in fire, we're investing $2.7 million in new tower trucks and other vehicles, and $1.3 million in station maintenance. And we've included $12,000 for the smoke detector program that's saving lives. This year in police, we're continuing to implement investments we've made in recent years, especially last year when we added 30 new police officers and six safety officers. We're investing $2.5 million in new police vehicles. We've added a new sergeant to complete the staff structure. We are purchasing mobile computers and forensic computers to support the work of our officers. And we continue to work on violence prevention through the largest police force in our history, through an increased emphasis on community policing, and through the extraordinary work of One Lexington. Let me talk about One Lexington. With just a modest investment, but with remarkable vision, for the past year, One Lexington has been bringing together people from all over our city. People inside and outside City Hall. Folks from the faith community, from nonprofits, neighbors, parents, people from our schools. And they have one thing in common. They want to get at the roots of violence. To wrap our arms, our hearts, and our resources around the issues and make a difference in the lives of young people especially before they go down a path that may lead to violent behavior. We've started our work in Winburn. and are laying the foundation for other neighborhoods now. One Lexington director, Laura Hatfield, has met with more than 80 members of our community, not just a face-to-face little meeting, but intense, intense conversation and interviews, 80 members of our community, to identify resources and gaps in services. and Laura is currently organizing a mentoring summit in order to get even more folks engaged in this work. Violence prevention also means working hand-in-hand with our schools, especially this year. We work closely with Superintendent Calk and his staff, and our police coordinate their efforts with school law enforcement, providing backup whenever needed. Leading this effort is our new police chief Lawrence Weathers who came back to Lexington police after two years as director of law enforcement for Fayette County Public Schools. I've included funds in this budget to improve student safety for example to assist with the cost of purchasing metal detectors for our schools. In our community using city funds to pay for school costs yes is is unusual, but I believe school safety and public safety go hand in hand. Just as it's important to bring together the community to confront violence, the community must be involved in helping those who most need our help. So we are keeping our extended social resource grants, the grants we use to assist social service agencies throughout the community. We are keeping those grants at the same level as this year at $3 million. Since 2012, our city has almost doubled funding for these grants, as federal and state governments actually cut back. This is an unusual commitment at the local level to quality of life for all our citizens. And we back up those grants through several other programs. First, we are also committing $200,000 to Mental Health Court, a program that focuses on treatment instead of jail time for people with mental illnesses. We are one of just a few counties in the state to offer this program, and it's working. And second, we are continuing our annual commitment to affordable housing and homelessness prevention. Of course, there's still a lot of work to do, but since we started these programs in 2014, we've made significant progress toward getting people off the streets and into safe, clean, affordable housing. Since we made permanent housing the priority of our homelessness initiative, the number of people experiencing homelessness in Lexington has dropped to its lowest level since 2005. And through the Affordable Housing Trust Fund, the city has invested $11.3 million, leveraging today almost $100 million. It's up from the numbers that I'm reading here in my speech from 86.6 to today, almost 100. We've added almost 1,200 new or rehabilitated units, including apartments and single-family homes. And third, we have funded a $25,000 overdose public awareness campaign to help people caught in the web of the opioid epidemic to find resources and services. This is an expansion of the Substance Abuse Office, which has become a mainstay in Lexington's fight to stem the opioid epidemic. Creating jobs is another important goal for our city. quality of life for our city and its citizens depends upon creating jobs good paying jobs and jobs at all skill levels since 2011 our unemployment rate has been cut in half from 7.7 percent in 2011 to 3.7 percent today we all know that short of family and health having a good job, a job with purpose and meaning, is perhaps the most important thing in the world. Our new convention center will produce good jobs and help us attract even more visitors to our city, attracting even more jobs. There are funds to support a bond up to $20 million in this budget for construction, and that construction is scheduled to begin this summer. The new Convention Center will stimulate development, produce millions in 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 and one of the largest public investments in our city since Rupp Arena was built almost 50 years ago. With an expanded Convention Center, we'll be able to go after nearly 90 percent of national convention business where today we are only able to chase about 65 percent of that market. The City and Lexington Center have worked a long time to get the funding of this project secured, reducing costs through value engineering. With the funding in this budget, we are close to digging in and starting construction. Another key to attracting and growing jobs is workforce training. This is our third year for workforce training grants, grants that ensure we have a workforce with the right skills to meet companies' needs. We've put $270,000 in this budget for these grants. Our goal is to ensure our community has the best quality workforce at all levels of employment. We've also included $270,000 in this budget for our Jobs Fund, our incentive program designed to attract high-tech companies, advanced manufacturing, and company headquarters. There are now 20 companies participating in the Jobs Fund. Since 2013, these companies have produced 176 good jobs and $233,000 in annual payroll tax. The average annual salary for these jobs is $61,300. Also under the economic development umbrella, we continue to work on our agreement with UK to trade some sections of streets near campus for land at Coalstream Research Campus. The Coalstream property represents the opportunity to bring new companies, especially manufacturers, to Lexington, and there's already a lot of interest from the business community. This budget includes $100,000 for traffic improvements near UK. Under our partnership with the university, UK has committed to $3 million over 10 years for this work, including $1 million in the first year. Just yesterday, we learned that Lexington was selected to form Opportunity Zones, which encourage investment and job creation in our low-income areas. And finally, there's an economic development initiative that you will not find in the budget, and that's because it's not costing the city anything today. Metronet has started work on its fiber optic network in Lexington, the network that will make Lexington the largest gigabit city in the country. Metronet is investing at least $70 million here. The company hopes that this summer the first residents and businesses will be able to start receiving internet access, television packages, and phone service over fiber optic cables, which carry data at gigabit speeds or 1,000 megabits per second. This is a new service for cable TV. It creates competition in the Lexington market, which leads to better service and lower prices. I want to quickly read a message I received from a citizen about this service. Tony Schmidt wrote, I recently moved my online software business from Seattle, Washington back home to Lexington. Unfortunately, my location today is only served by a single DSL provider, which is significantly inadequate for my business's needs. But I was confident in making the move back home after reading about the addition of fiber across Lexington and out the east side. I decided to move back to Lexington to help boost the tech economy here as well as create more local jobs. Thank you for helping in this process and for making it viable to move my family and business back home. Well, I should say welcome home, Tony. of life is one of the main reasons businesses move their jobs to Lexington. And we are making several investments in this budget to enhance quality of life, to improve the appeal, the attractiveness of our city. And I want to mention just a few of these. First in parks, where we've included $2.6 million for projects all around the city, including a new playground at Shillito, a walking trail in Metathorpe, a new basketball court at Jacobson, and even more. There's $100,000, let me say this again, there's $100,000 to build a monument to celebrate the history of women in Lexington, to break the bronze ceiling. In addition to funding for our summer youth job training program, a program to help young people learn about the world of work. We've included $30,000 for the Power Scholars Academy, a summer learning program for youth in grades kindergarten through eight. The YMCA and Fayette County Schools are partners in this work. The goal is to address summer learning loss for children in low-income households in urban areas. And we continue to participate in Coach Fellowship for Young Black Men, which will start this fall. We're providing support through job training and leadership development. We have also included $300,000 to continue our corridors projects, making our major roadways attractive and $150,000 in addition to maintain our trails. There is $12 million in the budget for paving, improving the look and the safety of our neighborhoods. And we are investing $250,000 in pedestrian safety, which includes improving existing pedestrian crossings, adding new crosswalks, and completing critical sidewalk gaps, plus $850,000 for traffic signals. Now, let me close with this. Our great American city has a long, has a storied history, an extraordinary history. Settled in 1775, 243 years ago, in fact one year before the Declaration of Independence itself was signed. And over the years, it's often been the investments that we've made together as a city that have made Lexington a great, a unique place to live, to work, to raise a family. The budget I'm presenting today is a blueprint for the investments we'll make over the next 12 months. I know the council will examine it carefully, and I invite the public to do the same. this is our home. It is your home. It's my home. It's our home. In a few short years, our city will celebrate its 250th anniversary. And as we move toward that landmark, it's up to us to make sure that everything in our home is clean and well cared for. It's up to us to be sure we are all safe at school, at work, and in our neighborhoods. It's up to us to help those who can't help themselves. We're the ones who are responsible for making sure there are good jobs and opportunities and a talented workforce. And if we want a bright future, we have to plant the seeds now. Yes, it is up to you and me. It is up to all of us. And I thank you all very much for being a part of this. Thank you so much. We'll be right back. Better than a world