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Lexington council adopts FY2026–27 budget and approves $778,000 midyear reallocation for vehicles, equipment
Summary
Lexington’s Town Council unanimously adopted the FY2026–27 budget and approved a midyear FY2026 adjustment reallocating roughly $778,000 in general-fund underruns toward capital purchases including police vehicles; staff said most savings resulted from turnover and contract hires, and council debated whether to retain savings for operations or spend them on capex now.
Lexington’s Town Council on June 1 adopted the town’s FY2026–27 balanced budget and approved a midyear FY2026 adjustment that shifts roughly $778,000 in general-fund underruns to capital purchases, including police vehicles.
The council approved the midyear adjustments on final reading by unanimous vote after staff described the savings as largely one-time, year-end underruns caused by turnover and contract hires. “The reduction is only applicable in this current fiscal year,” Rachel, a town staff member, said when explaining that several positions were unfilled or converted to contract arrangements, producing savings in salary and benefits.
Why it matters: Council members expressed differing views on whether to use one-time operational savings for capital expenditures now or to preserve the funds in the general-fund balance for future salary and benefit increases. Supporters said ordering vehicles and other items now avoids higher prices and production delays; police staff estimated a $3,000–$4,000 per-vehicle savings by ordering patrol cars early, roughly $24,000–$30,000 overall.
The midyear adjustment included transfers from salary underruns to the capital budget to purchase equipment and vehicles that town departments had requested. Councilman L moved for final reading and approval of the midyear adjustments; Councilman Williams seconded and the motion passed unanimously. The council then adopted the FY2026–27 budget on final reading, also by a unanimous vote.
The town cited turnover in administration and the police department as main drivers of the salary underruns. Staff explained that some formerly budgeted FTEs were not replaced with full-time employees but with contract services that reduced benefit costs, producing temporary savings available for one-time uses this fiscal year. Council members asked staff to present a holistic view of the next fiscal year’s budget so they could evaluate whether to retain some savings in fund balance to offset rising salary and fringe costs.
Next steps: Town staff will finalize the midyear reallocation and proceed with the approved purchases. Council members indicated they may request additional budget detail during the next budget cycle to decide whether similar year-end spending should be routine.
