LEXINGTON — Lexington council members on Tuesday received an update on the city’s medical debt relief initiative — a program that has drawn both praise and criticism since its approval — while also advancing major funding steps for the Town Branch Trail and approving a slate of budget, bond and personnel items during a lengthy work session.
The Jan. 13 Urban County Council work session included discussion of the city’s partnership with the nonprofit Undue Medical Debt, along with bond issuance, trail construction timelines, police wellness services and labor matters.
Medical debt relief presentation
Legislative aide Victoria Cruz-Falk presented a six-month update on the city’s medical debt relief program, which uses interest earnings from federal American Rescue Plan Act funds to contract with Undue Medical Debt to purchase and abolish qualifying medical debt.
According to the presentation, the first round of debt relief eliminated about $12.6 million in medical debt for 6,484 Fayette County residents. Cruz-Falk said the average amount of debt abolished per recipient was just under $2,000, with some individual balances far higher.
The program has been controversial since its approval last year, with critics — including Mayor Linda Gorton — raising concerns about the proportion of program funding used for administrative and indirect costs rather than direct debt purchase, as well as whether the initiative produces meaningful, lasting financial impact for recipients. Supporters have argued the program provides outsized financial relief to residents relative to its cost and addresses a widespread burden that local government can otherwise do little to affect.
Vice Mayor Dan Wu, who spearheaded the initiative, praised the program during the work session and emphasized the scale of debt eliminated relative to the city’s financial contribution. Several council members also expressed support and asked about future reporting, geographic breakdowns and oversight.
No council action was taken Tuesday related to the program.
Town Branch Trail funding and timeline
Council voted to place on Thursday’s council meeting docket a resolution authorizing a $4.7 million federal Transportation Alternatives Program grant application for Phases IV and V of the Town Branch Trail, which would require a $1.175 million local match if awarded.
Engineering officials said utility relocation work for Phases IV and V is expected to begin this spring, with construction potentially starting next year if funding is secured. The work would connect trail segments near Old Frankfort Pike, New Circle Road and the fire training center.
Bonds, leases and city finances
Finance Commissioner Erin Hensley briefed council on a proposed $18.04 million general obligation bond issuance, noting it would bring the city’s debt ratio to about 10.4%, slightly above council’s self-imposed 10% target.
Hensley said the ratio is expected to decline as older debt rolls off and explained how the City Hall lease-back project will be treated by bond rating agencies, which view the arrangement similarly to long-term debt even though it does not count toward the council’s internal cap.
Council members also discussed an amended lease expanding office space for the police department’s Behavioral Health and Wellness program, which provides mental health services to officers and their families.
Personnel, labor and committee referrals
Council approved multiple personnel changes projected to produce cost savings or remain budget-neutral, including restructuring positions in waste management, parks and recreation, accounting and emergency management.
During council reports, members referred several issues to committees, including:
- Review of a “meet and confer” agreement with a municipal employees’ union;
- Possible updates to right-of-way restoration rules following utility work;
- A review of the city’s Housing Rehabilitation Program.
The work session concluded without public comment and adjourned in the early evening.
Items advanced Tuesday are scheduled for final consideration at the Urban County Council meeting Thursday night.
