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Committee hears July financials: revenues ahead of expenses, year-end adjustments expected
Summary
Lexington City committee received July (Period 1) unaudited financials showing revenues ahead of expenses, timing-driven personnel and operating variances, and partner-agency payment timing that will smooth as fiscal-year close proceeds.
The Budget, Finance and Economic Development Committee of Lexington-Fayette Urban County Government was briefed on the city's July 2025 financials during its Aug. 19 meeting. The presentation said July represents one month of Fiscal Year 2026 results, the figures are unaudited and subject to adjustments as the city completes year-end closing processes through October.
Committee Chair and Commissioner Hensley asked staff for the update, and Director Wes Holbrook and Director Melissa Luker reviewed revenues and expenditures. Holbrook said net profits and several revenue categories are running close to or better than budget so far, noting April is a key month for collections and July comparisons look stronger than July 2024. He emphasized the figures are preliminary and will be adjusted as August collections and the year-end accrual process are completed.
Director Luker said the staff only completed the July reports the morning of the meeting and warned that several timing issues drive current variances. She said personnel variances (about $2,000,000) are largely timing issues tied to the fiscal-year transition and will likely normalize as accounting closes Fiscal Year 2025. Luker identified roughly $1,100,000 of operating variance attributable to a delayed billing/payment cycle for the medical/mental-health contract at the jail (Community Corrections), and said partner-agency payments (PSAs) were processed earlier this fiscal year than in FY25, producing a roughly $1,700,000 spend difference for July that should even out over the year. She added there has been no capital spending yet for FY26.
Staff reiterated that the July numbers reflect a 45-day lookback process to determine whether revenues and expenses belong in FY25 or FY26; those accrual adjustments continue through October. Holbrook and Luker said they will provide more detailed follow-ups on request and that the administration is tracking overtime and benefits timing (Anthem) that typically show variance early in the year.
Committee members asked whether federal tax filing extensions related to spring flooding would materially affect net-profits collections; the staff said they did not see appreciable timing impacts from the IRS relief and do not expect a material government revenue change. No formal action was taken on the financial update.
The committee moved on after staff answered follow-up questions and offered to supply additional, detailed information to council members who request it.
