Council directs $5.3 million in leftover FY26 budget dollars. What got funded?

On Tuesday, October 27th, Council met to decide how to assign roughly $6 million of leftover money from the previous fiscal year's budget – ultimately approving about $5.3 million to help cover the city's street paving, vehicle fuel costs, affordable housing and several other Council priorities.

Every fall, Councilmembers gather to talk over their proposals for the "fund balance," which is essentially leftover money from the previous budget year, which ended June 30, 2026. It's an opportunity for Councilmembers to advance their priorities, whether that's earmarking funding for new roundabout designs, youth programming, shelter services and more.

Heading into Tuesday's meeting, Council was tasked with deciding how to allocate $6,043,836 left unassigned in the fund balance from fiscal year 2026. While it assigned the bulk of that funding, Councilmembers decided they needed more time to talk through plans for the remaining $734,972.

Which intiatives did Council fund?

Council agreed to fund the following proposals from Mayor Linda Gorton – with the caveat that city staff will report back to Council about the first two recommendations at a later date.

Down the road, if the city needs less money to help with paving and vehicle fuel costs, it could create a future funding opportunity for Council.

The Mayor's recommendations to Council include:

1. $2,168,750 - Paving revenue (income) replacement in the Municipal Aid Program due to underperforming revenues.
2. $1,536,573 - For rising vehicle fuel costs due to ongoing global conflicts, such as the war in Iran.
3. $1,007,000 - To support a new affordable housing Shared Appreciation Mortgage program. In short, the program would provide a second, interest-free mortgage of up to 25% of the home's purchase price for income eligible first-time homebuyers. A Tuesday afternoon news release from the Mayor's Office said the allocation would be enough to assist 15 to 20 first-time homebuyers.

In addition to these requests from the Mayor, Council assigned funding to several of its own proposals, including:

• $250,000 - For multimodal safety. This will support safety improvements at signalized and unsignalized crosswalks around town, compliance with the federal Americans with Disabilities Act, and new or modified striping along existing streets.
• $150,000 - Wayfinding Sign Program implementation. This money will help with phase 1 fabrication and installation for a new wayfinding sign program.
• $96,541 - For emergency financial assistance that helps local renters and homeowners stay in their homes and pay their utility bills.
• $50,000 - To support Council's efforts for closing Lexington's digital divide through the Digital Accessibility Plan.
• $50,000 - To the city's Environmental Services Division for the Typology Study Pilot Project. This money will help support implementing one of the projects in the typology study or help with adding an entrance sign to the Georgetown Street neighborhood.