Lexington council accepts city hall renovation bid; agrees to cover roughly $750,000 shortfall with bond interest and surplus

The Lexington City Council voted to accept a construction bid for the city hall renovation and authorized staff to use a mix of bond interest, capital balances and an anticipated fiscal‑year 2025 surplus to cover an estimated $750,000 funding shortfall.

Council members approved the award after reviewing the project scope, estimated costs and funding options; the decision followed a presentation by project manager Patrick Madigan and budget discussion by staff. The council recorded an affirmative vote with one member absent.

The project matter was urgent to council because the building requires a full systems replacement and safety upgrades, and the council has previously authorized a $6.5 million bond for facility work. The accepted package keeps the core renovation on schedule while relying on identified contingency and near‑term revenues to close the remaining budget gap.

Madigan, the city project manager, told council the work will “be gutting and coming back in with new mechanical, electrical, and plumbing throughout, you know, new roof and, a new entrance.” He outlined additional elements that include new IT infrastructure and an IT/server room sized to protect billing and meter data, a new operational entrance and modest streetscape improvements on Washington and Fuller streets. The council discussed options to add a concrete pad and conduits for a future generator but not the generator itself; staff estimated the pad and basic site work at about $24,000 (approx.).

Budget details presented to the council showed a roughly $750,000 gap between currently available project funding and the anticipated construction cost. Staff described two principal options to close the gap: use bond interest earnings from the recently authorized $6.5 million bond (estimated at about $552,000 in total bond interest, or about $400,000 if limited to Lexington‑specific proceeds) and apply an expected FY25 general‑fund surplus (staff projected about $800,000). The council noted that reimbursement resolutions adopted last summer permit the city to reallocate unused bond proceeds later if actual spending comes in under estimates.

Council members pressed staff on schedule, contingencies and reuse of existing fixtures. Staff said the contract timeline in the bid is 17 months from notice to proceed, with practical completion likely in mid‑2026 if construction begins promptly. The renovation carries an 8% construction contingency; staff cautioned that historic masonry repairs and concealed conditions (including asbestos‑containing floor tiles and other legacy materials) could increase costs when contractors open walls. Madigan said asbestos materials are currently encapsulated and will require licensed removal and disposal if disturbed, which adds complexity and cost.

Other design details discussed: a new enclosed vestibule at the public entrance to reduce indoor debris and heat loss, modest loss of a few parking spaces for contractor laydown on the east side, pair of handicap ramps, refurbished or replaced fire escapes, improved IT conduit runs and pull strings for future network upgrades, and a customer path and layout that relocates the registrar, treasurer and commissioner of revenue into more appropriate footprints for early voting and public counter work. Staff said the city intends to warehouse existing furniture during construction for possible reuse and to dispose of or sell excess items later.

Council members debated whether to include furniture, fixtures or a generator in the base contract; the motion approved at the meeting accepted the bid and authorized use of capital fund balances, bond interest/earnings and the anticipated FY25 surplus to make up the difference. The vote was recorded in open session; one council member was absent.

Staff committed to return with final contract documents and a notice to proceed after the formal award; construction will begin after that pre‑construction step and the city expects a pre‑construction conference within about 30 days of award. Swing space arrangements were reviewed: the council confirmed a two‑year lease with options to continue month‑to‑month after the initial term, which currently would carry staff moves into swing space through October 2026 under the schedule presented.

The council’s approval keeps the renovation moving from schematic and design work toward construction but leaves room for further adjustments if concealed conditions increase costs or if the council elects to add optional items later. Staff said they will manage contingency and pursue cost‑saving measures where feasible.

Votes at a glance: Council approved the renovation award and funding approach in an affirmative vote with one member absent.