Lexington presents balanced FY27 budget; stormwater fee and utility rates set to rise

The Lexington City Council heard a presentation on the proposed fiscal year 2027 budget and opened a public hearing on the agency funding requests. Finance Director Jennifer Bell said the FY27 budget is balanced and proposes no increase to real estate or personal property taxes.

"We are not proposing any real estate or personal property tax increases in '27," Jennifer Bell said, adding the city will implement the second half of a planned stormwater fee increase and raise water and sewer rates. "We're going to implement the second half of the stormwater fee in '27, which will raise it from 30¢ per equivalent dwelling unit to 60¢. And in addition, we are proposing an 8% increase to our water and sewer rates, and we are receiving an 8.18% increase from the MSA."

Bell told council the budget includes nearly $20,000,000 for infrastructure and capital projects, continues the city's living-wage approach (as calculated by MIT), and funds a roughly 4% pay increase for most staff with larger increases for positions benefiting from the living-wage calculation. She also noted a 25% jump in staff health-insurance premiums that the budget must absorb.

The public hearing on the budget allowed residents and local agencies to make their case for funding; council closed the hearing after the scheduled presentations and moved on to normal calendar business. No council vote on final adoption of the FY27 budget occurred during the meeting.

Why it matters: the combination of maintained wage policy, a significant capital program and rate and fee increases will affect both municipal services and household utility bills if the council adopts the budget as presented. The public record shows staff recommended the measures to balance rising costs, including higher insurance and regional service charges.

Next steps: the council held the public hearing and will consider the budget at subsequent meetings before final adoption.