Council adopts updated water and wastewater capital plan after solids-handling cost jump to $38 million

The Lexington City Council on April 28 adopted Resolution 2025-010 updating the city's water and wastewater capital improvement plan after staff told council that cost escalation on a wastewater solids-handling project requires an updated plan to pursue additional state grant funding.

"The original capital improvement plan was approved in 2022," staff member Tom Johnson told council as he explained why an updated plan was required. He said the city previously secured a loan under the American Rescue Plan Act for the solids-handling project that was estimated at $28,000,000 but now is estimated at $38,000,000 "because of price escalation," and that the Division of Water Infrastructure requires a capital plan less than two years old to consider additional gap funding.

Johnson said the city's combined water and wastewater capital needs total roughly $256,000,000 over the next 10 years and that a previous rate study set annual increases (roughly through 2028) to help fund capital needs. He said the plan is a working document; projects may be shifted to align with grant opportunities. "Everything on that list. Everything. If we can't cover it within a budget proposed, in the proposed budget, it's gonna be seeking grant funding for it," Johnson said.

Council discussion touched on the solids project, sequencing of major projects, and the possibility of inter‑utility partnerships to improve grant competitiveness. Johnson noted the water treatment plant is shown in the plan with a roughly $30,000,000 allocation in the 2027–28 timeframe and said the timing may change depending on regulatory needs and funding. He also told council the city has done preliminary PFAS testing and expects non‑detect results, but that federal testing methods and reporting requirements remain a cost and staffing pressure.

On a motion by Councilman Burke and a second by Councilman Holloway, council approved the resolution by voice vote. The motion record shows a voice vote in which "all those in favor say aye" and the mayor declared the motion adopted; a roll-call tally was not recorded in the public discussion.

Ending: The updated capital plan will allow staff to reapply for state ARPA gap funding to cover the solids-handling cost increase; council and staff noted the plan will continue to be revised annually as projects, grants and regulatory requirements shift.