Lexington city leaders are trying to lower their debt payments. A Council committee recently approved a ‘debt management policy.’ Currently, about 11% of city revenue goes to pay off debts. Finance Commissioner Bill Omara says his goal is to keep that percent to no more than ten-percent.
“The 10% target is a target for how much our debt service is as a percentage of total revenue. It would relate to how much your house mortgage is as a percentage of your total personal income,” said Omara.
Traditionally, such borrowing is tied to city-sponsored construction. Omara says such a debt limit would still allow new construction.
“We have bonds that roll off of the books that sometimes give us a lot of capacity, sometimes a small amount of capacity. It’s kind of a yearly thing. We’ve modeled a basic $15-million project bond each year and we would attain that ten percent goal by 2020,” added Omara.
Lexington’s current debt burden doesn’t worry Council member Julian Beard. Beard says much of the borrowing is the result of a federally mandated overhaul of the city’s sewage system.
“We’ve got $53 or $56 million in projects out there right now being executed and that’s an awful lot of business to say grace over,” said Beard.
Lexington Mayor Jim Gray will soon begin the task of developing the next city budget.