City Council - Regular Meeting

Good evening. Welcome to the special call meeting of the Olathe City Council for Tuesday, September 8th, 2026. We're here tonight to hear public comment on our 2027 budget and on exceeding the revenue neutral rate. This budget reflects a commitment to fiscal stewardship. It is mindful of rising costs our residents face while addressing the rising costs we as an organization face as well. We're balancing the needs of today with our responsibilities to our residents for the future. The budget is the most important thing this council does. So thank you to our staff for all the work that you've put in the past several months. Thank you to our residents for the input that we've received from all of you through our public workshops this summer. And those of you who are here tonight and also if you've written in or emailed us, Your feedback is a critical piece of this process. So before we begin our public hearing tonight, we'd like to ask our budget analyst, Ashley Wooten, to come up and give us a presentation. Welcome, Ashley.

Okay. Sorry, my computer is not cooperating. All right. Good evening, Mayor and Council, Ashley Wooten, Budget Analyst, and I'm here to present on the 2027 public hearing on proposed budget and exceeding revenue neutral rate. Before we get started, just want to go over a brief agenda. We'll start with a high-level overview of the 2027 budget process. Then we'll talk a little bit about revenue neutral rate. And then we'll go through some budget highlights. And then I will pass it back to counsel for the public hearings on proposed budget and revenue neutral rate. All right, so let's start with the budget process. We can start with where we are in the 2027 budget calendar. As you all can recall, we kicked off the budget meetings with the city manager's presentation back in July, and then we moved into a series of workshops reviewing the proposed budgets for the various funds and the proposed capital improvement plan. So we're utilizing this special call this evening to summarize the 2027 budget and open the floor at the end for public comment. Council will then vote on the proposed resolution to exceed revenue neutral rate. And these meetings lead us up to the September 15th meeting where Council will consider adoption of the 2027 budget, CIP, and schedule of fees. Each year when building the city's proposed budget, city staff take these factors into consideration. They play a foundational role in how staff approach the budget process. So starting with the city council priorities, they remind staff to be good stewards of the city's finances while also prioritizing community needs and services. Budget principles establish what it means for the city to be financially stable so that the city meets all legal obligations and continues to maintain a competitive credit rating. It's also imperative that city staff keep a constant eye on economic trends and how they affect the city's long-term financial outlook. So some of those trends that have been discussed in previous budget workshops are things such as unemployment rates, inflation rates, and consumer sentiment. Staff also monitor the city's financial outlook. Revenue and expenditure trends are updated throughout the year, and those forecasts are utilized throughout our budget process. And lastly, public policy can also have a direct impact on the city's budget, and I'll provide a few examples of that in the next few slides. Next is an overview of the budget challenges and solutions that we've reviewed throughout budget meetings this year. Just as residents are feeling a strain on their household budgets due to inflation, so is the city in personnel expenses, contract services, and commodities. Inflation is a contributing factor to the structural imbalance we're seeing where expenditures are outpacing revenue. Also due to the continued economic uncertainty, staff are continuing to see sales tax volatility and are continuing to remain conservative in sales tax projections. And lastly, due to the revenue loss that is anticipated over the next five years from property tax legislation and courthouse sales tax retiring in 2027, the proposed CIP required reductions and delay of some projects. Because the city knows and understands how these challenges are affecting city budgets and its residents, it was important to address those challenges with some solutions. And that's starting with providing some relief to the general fund by having no additional general fund positions for 2027 and being strategic with vacancy freezes or delaying the backfilling of vacant positions. The city is also ensuring that only essential expenditure increases are being prioritized in the budget proposal process. This is to keep down costs but to also maintain a great level of service to residents. CIP reductions may also continue to be a cost savings measure that is done in a fiscally responsible way that continues to maintain current infrastructure and tends to residents' future needs. And lastly, the city will continue identifying other cost-saving measures and increase revenue opportunities as we continue to navigate this economic uncertainty. Next, let's talk a bit about revenue neutral rate. To provide some background on the origins of revenue neutral rate, back in 2021, a truth and taxation bill was passed through the state legislature requiring cities and counties to provide notice, hold a public hearing, and conduct a vote by elected officials on the intent to exceed revenue neutral rate. And as you all may recall in workshop one, Clara Berner, our budget manager, presented on the intent to exceed revenue neutral rate, and city council passed the resolution on the intent to exceed revenue neutral rate. So what is revenue neutral rate? The revenue neutral rate is the tax rate that would generate the same property tax as levied the previous year using the current tax year's total assessed valuation. So that means that the city of Olathe would not be able to collect a dollar more than what was collected in 2026, and that presents challenges. Inflation continues to be one of those challenges. The city continues to see expenditures outpacing revenue, and the city is also currently anticipating property tax cap legislation and an expiring courthouse sales tax in 2027, which would be an estimated loss of around 39 million over the next five years. If the city were to remain revenue neutral, the city would experience a loss of roughly 15 million over the next five years. Although the city continues to identify cost savings measures and increased revenue opportunities, exceeding revenue neutral rate is necessary in 2027 to continue meeting the needs of residents and to prepare for the expansion of city services as the city continues to grow and develop. The pie chart on the right shows the breakout of the various taxing jurisdictions that receive a portion of a resident's property tax each year. As a reminder, the city only has the authority to set the city's property tax levy, which makes up about 19% of a resident's property tax bill. The 2027 budget consists of three tax-supported funds, which are the General Fund, Library Fund, and Fire Levy Fund. Although the city is having to pivot in order to navigate economic uncertainty and proposed legislation, the city will maintain a stable property tax levy for 2027 and will continue to provide outstanding essential services to its residents. Next is an overview of the 2027 proposed budget, starting with General Fund. The general fund is the city's principal funding mechanism for general government operations across the city. As you can see in the 2027 proposed column, general fund operational revenues total around $188 million, and that's a 0.5% increase over the 2026 projected revenue. On the operational expenditure side, it's totaling around $185 million with a 4.8% increase over projected expenditures. The next slide is a more detailed breakout of the general fund overall budget. The majority of general fund revenues come from sales tax at 42% and property tax at 34%. Other sources of revenue make up the remaining 24%. As for the general fund expenditures, our awesome employees remain our largest expense at 64%, with contractual services falling behind at 16%. Next, I'm going to talk a bit about utility funds in CIP. The utility funds make up about 16% of the overall 2027 proposed budget, starting with water and sewer at around $76 million, stormwater at $7 million, and solid waste at $22 million. As a friendly reminder, fees do recover maintenance costs for utility services. This table breaks down the average monthly utility bill for an Olathe resident. In 2027, the average residential utility bill will see an overall increase of $9.23. The next few slides are going to provide a brief overview of the city's capital improvement program. The proposed 2027-2031 CIP is at about $757 million. Some examples of the projects included in the proposed CIP are $13 million towards Lone Elm Road, 119th Street, to Herald Street improvements. 39 million in city funds towards the $130 million Santa Fe and I-35 interchange improvement project, as well as $332 million in utility maintenance and improvement projects. The next table provides more detail on how the city funds capital improvement projects. The city leverages a combination of debt, cash, and outside funding sources. Outside funding sources for the proposed 2027 to 2031 CIP include federal, state, and interlocal funding as well as grants. For 2027, no new additions are proposed for the general fund, as mentioned earlier in the presentation. But within the utility funds, water and sewer and stormwater specifically, there are seven full-time equivalents being proposed, two of which are reclassifications from part-time to full-time. And lastly, here's an overview of all funds combined. The total 2027 proposed budget is roughly $657 million, including operating and cash reserves, which is a 4.9% increase from the 2026 total budget. And that concludes this presentation. Staff and I stand for questions.

NEW SPEAKER THANK YOU, ASHLEY. QUESTIONS OF STAFF OR ASHLEY AT THIS POINT? ASHLEY, THE MILL RATE IF WE STAY REVENUE NEUTRAL IS ABOUT WHAT IS THAT, ABOUT 22.5? AND HOW MUCH MONEY WOULD THAT REPRESENT LOSS IN REVENUE FROM THAT REDUCTION?

It would be $22.496, and it would be about $3 million a year.

Okay. All right. Very good. Thank you. All right. At this time, I'd like to open a public hearing pursuant to KSA 79-2929 and KSA 79-2988 to hear comments regarding the proposed City of Olathe fiscal year 2027 budget and exceeding the revenue neutral rate. We have some speakers that have signed up, so at this time I'll call Doug Doffler. Doug, are you here? Yes, please come to the podium and give us your name and address for the record, please.

My name is Doug Dorfler, and my address is 21834 West 175th Terrace in Olathe, Kansas. So mayor and council members, I want to address one aspect of the 2027 budget discussion, the city's goal of increasing commercial and industrial property to 40% of Olathe's assessed valuation. I understand that goal makes sense. Commercial property in Kansas is assessed at 25% of value compared to 11.5% for residential property. Stronger commercial tax base can generate substantially more tax revenue and in theory reduce the burden on homeowners. But there's one important Distinction, increasing commercial valuation is not the same thing as reducing residential property taxes. The city's own materials show commercial property at approximately 26% today. Moving from 26 to 40 would require enormous commercial growth. and residential Olathe continues to grow at the same. I've not seen a published date by which the city expects to reach 40% or a financial model demonstrating how that goal will be realistically achieved. We also need to consider the kind of residential growth Olathe is creating. The school district says declining enrollment is being driven in part by rising home prices along with lower birth rates. Just this month, the district recommended closing five elementary schools and one middle school. The recommendation is not the city's decision, but it should matter to the city's growth strategy. Economic development should include housing choices that allow young families with school-age children to move to Olathe and remain there, not simply race to increase the commercial percentage of assessed valuation. The city is asking existing homeowners to assume a property value risk in order to pursue its commercial development goal. Nottington Creek values have not collapsed, but the lineage facility isn't even operating yet. But research tells us that the proximity to large distribution facilities can negatively affect residential values. And once that occurs, the homeowner, not the developer, and not the city, absorbs that loss. That raises the basic question, why should an established residential neighborhood be required to gamble its future property values so the city can move from 26% to the 40% goal? Again, I'm not opposed to commercial development. Just consider what you're doing. Basically, it comes down to three questions that I have for the city. what is the realistic timeline that you have for reaching that 40% goal? I'd like to see a land use strategy that protects existing neighborhoods and supports family-oriented residential growth. And most importantly, a measurable commitment explaining how increased commercial valuation will translate to lower residential property taxes. Thank you.

Thank you. Our next speaker is Charlotte O'Hare.

Good evening. Always good to be back in Olathe. I still have a couple of buildings out on Keeler Street. And I will tell you that that area on South Keeler Street is probably the best kept secret in Johnson County as far as producing tax revenue. And there is so many small, prospering businesses out in that area. And I will tell you from experience that very few had the tax incentives that you are pouring out in different areas of the city right now. You all know that in 2004 that I did use an industrial revenue bond for a 50,000 square foot addition on one of our buildings for WebCo And then WebCo chose not to renew their lease, and I lost a great tenant. But congratulations, they built another building in Olathe, gave them tax incentives. The problem with this idea of extending your tax base from 26% of commercial to 40%, it's unrealistic. And you are going to be pouring out so many tax incentives. I have a report from 2025, and it shows 37 industrial revenue bond projects. And 151st Street, 166th and Thetan, Lone Elm Road, 056 Highway, Lindenwood, Mahaffey Street, Lone Elm, Greenwood, and on and on and on. You have emitted that taxes are too high in Olathe and in Johnson County by abating all of these businesses. And now we're giving star bonds, giving all the sales tax dollars for the development of the chief's executive offices. They're never going to pay property taxes because the city, as I understand it, will be owning those facilities. You just continually swallow the idea of economic development, and it doesn't work. We've been trying this since 1986. It doesn't work. My taxes on my two buildings continue to go up. I mean, in 2018, the valuations went up 61% on those two buildings, 61%. And the residential side, they keep having to increase their cost of paying property taxes. I saw one woman in Capital Federal crying because she could not understand why her payment kept going up, and it's property taxes and insurance. You cannot accomplish this 40% without showering the industrial commercial industries with even more. I mean, some of these are 80% property tax abatements. Please, please reconsider your policies.

Thank you. Our next speaker is Kathy Winters. Kathy? Please give us your name and address for the record. Please give us your name and address for the record. Thank you.

My name is Kathy Winters. I live at 605 South Valley Road, Olathe, Kansas, on the west side over by 7. I've been paying property taxes here in Olathe, Kansas, for 56 years. I lived in my house for now 50 years. I built it in 1976. My house payment was $350 a month. My taxes this year was over $3,000. So I'm paying my house payment all over again. I'll never get my house paid off because you keep raising the taxes on our houses. I'm a senior citizen. I've been paying taxes long enough. I lived two houses down from Allen Brand when I moved into my house in 1976. Now everyone in that subdivision, most of them are senior citizens. My neighbor couldn't even pay her taxes this year. It is pathetic. She's lived there 50 years, too. So... I have capers. I started capers in 1997, my retirement. Since 1997, 29 years, there has not been a raise, not one dime raise in my capers in 29 years. But taxes keep going up. My Social Security If they do deem to raise it maybe 2%, it doesn't count that much because guess what? Medicare raises what they take out of your check before you even get your check. So they raise every year also, Medicare. Medicare is not free. You have to still pay for it after you've finished working and retired. You need to stop having these senior citizens pay. property tax. They've paid long enough. They'd like to enjoy their retirement for once. I'm 75. I'll never get my house paid off. Just to compare here. My income has not changed in 56 years. Johnson County, the district commissioner, he makes... based salary, $58,300 plus $25,311. That means $83,611. And it's only a part-time job as county commissioner. They can go out and get another job. It's only part-time. The chairman of the county commissioner makes $122,500 a year. And his is a full-time job. Then, do you know how much of a raise the county commissioners gave each other last year? Twenty-three percent. Twenty-three percent raise. Where us senior citizens haven't seen a dime raise. But every year, I'm going to be paying over $3,500 for taxes. You're trying to, you know, cost us out of our homes. You're doing that. You need to stop. Senior citizens vote, I'm telling you. And they are tired of it, and they will stop voting for you. You work for us. You're a public servant, but you're not helping the public.

Can you wrap it up, ma'am?

Yes.

Your time is up.

I'd like to know how you think families who are struggling right now can have their taxes raised every year, but yet their income doesn't. But the county commissioner says a lot, 23%. So I'm just saying it's time you started taking care of the people who have voted for you for decades. and you need to start taking care of them.

Thank you.

Thank you.

Those are the three folks that signed up prior to the meeting. Is there anyone here in the audience that would like to speak in this public hearing? If so, make your way to the podium and give us your name and address for the record, please.

Hello, Aaron Haffey. I live at 1834 East 152nd Court in Olathe. So first and foremost, I do want to say that compared to Johnson County, I at least do, to an extent, believe that I see some real value in my taxes that the city takes from me. I think we have really good wastewater facilities. I always get really excited when I see the street sweeper go by my house instead of running grape chat in our cul-de-sac. But I do want to just kind of call out a few things here. So I've been an Olathe resident for almost 15 years now and have seen a dramatic increase in my property tax as well as my sales tax and every other tax burden that I can imagine to have in the city here. And I'm a young family. We have two daughters and we're on a fixed income. And our income is not in keeping up with inflation. It's not keeping up with the taxes coming from the county and from the city. So we're getting hit from two sides here. I also want to say that the population of the county as well as the city is about 1% a year. And right now you guys are asking for a 4.3% increase. I'll be generous and allow that for inflation, but it still doesn't quite make sense why we need that. Someone's already said that the schools have announced declining enrollments. That is because young families are moving out of here very rapidly. And I think you're only going to continue to see that as affordability becomes an issue. I also want to call out that you guys said 22 positions were put on hold. To me, that tells me they're not critical or essential, and if they don't have to be filled, that they can be eliminated. Looking at the community improvement plan, there was $300,000 for a dog park. It's a fence and maybe a water fountain. This seems like a lot of money for a dog park. And that's fine. We have nice parks, but $300,000 for a dog park seems absurd. The Frisco Lakes project had $80,000 to design a bathroom. I don't need the Eiffel Tower or the Louvre bathrooms. I need a rectangle with some stalls put on it. If it's a design issue, I can do it for $2,000 using an AI architect software. There's a couple different other... design costs going through that plan that just seemed very absurd to me. And they all seem to center around bathrooms. So I'm not sure why bathrooms are so expensive to design, but, uh, they all averaged between 50 to $80,000 on the Indian Creek trail, Hampton park. I'm very familiar with that as I run it pretty regularly. Um, $250,000 to design a trail. Um, I'm not an expert on land by any means, but that seems like a lot. It's about $1,000 a foot when you take the overall cost of $2.5 million. So I guess I'm just trying to say there's a lot of funding that can probably be readdressed. If you're looking to cut costs, one thing you could probably do is hire a permanent. For what you're paying to design things now, you could probably just hire a full-time person and hand those off to a construction company. Looking to myself personally, we are looking to move and build, and we can buy plans stock for way cheaper than what you guys are paying to design. I'll just wrap up real quick and say that the schools have said there's declining enrollment. There's a lot of community improvement things for parks. I love parks. I have two kids. I understand we need good parks to attract things. But maybe those can be put on hold for a while because kids tend to be the overwhelming beneficiaries of those parks. And if they're all leaving because they can't afford to live here, maybe we need to scale back that area of funding. Thank you very much for your time.

Thank you, Aaron. Any other individuals that would like to address the council on this public hearing? Seeing none, a motion to close the public hearing be in order.

Thank you. I move to close the public hearing.

Second.

We have a motion and a second. Would the city clerk please call the roll?

Mr. Bacon?

Yes.

Mr. Schoonover?

Yes.

Dr. Felter? Yes. Mr. Baucus?

Yes.

Ms. Essex? Yes. Mr. Creighton?

Yes.

Mr. Dinault?

Yes.

Motion passes 7-0.

Item B is consideration of resolution number 26-1077, authorizing a levy of property taxes for the 2027 budget that requires a property tax exceeding the revenue neutral rate. This resolution does not establish the mill rate for our 2027 budget. It only authorizes exceeding the revenue neutral rate. The final rate will be determined after the City Council votes on our budget, which will take place at our September 15th meeting. So tonight we are just resolution 26-1077 just authorizes us to exceed the revenue neutral rate. Do I hear a motion?

Mayor, I'll make that motion. And as I make that motion, I want to just correct one thing. One of the speakers tonight made mention that we would own the chief's training facility in the chief's headquarters. That's not true. Those will be owned by the county. So having said that, I move to approve Resolution 26-1077. Second. We have a motion and a second.

Was there any need for questions or comments?

Mr. Mayor?

Yes.

Sorry, procedural thing. The statute requires you to adopt that resolution prior to closing the hearing. So if you could reopen the hearing and then take the motion to approve the resolution, then close the hearing. Okay. So that's not the way our agenda is set.

I saw that. I just saw that in the agenda.

We'll fix that in the future.

So I'll open up a public hearing then before we have a motion and a second.

Yes.

So I've reopened the public hearing. And so if you want to make your motion again, Council Member Fokas.

And if we want to discuss a little bit, we can do that too?

We can.

Okay. So listen, I'd take a moment to thank everyone that spoke. Very sincere comments and very helpful in some cases. Again, I did want to correct. One of our speakers made mention that the city would own the chief's training facilities and the chief headquarters. That's not true. I understand the county is establishing a sports authority. You know, Property taxation sucks. I mean, there's no doubt about it. And I appreciate the comments on Social Security and on Medicare. I'm on Social Security and Medicare. I see the same things that you're seeing where you get, you know, a little something in a bump up in Social Security, but it all goes away as soon as you see the Medicare bill. It's just not a happy situation. Quickly about our costs so you understand. You know, we've seen double-digit increases in health care costs for the last two years. And that's an example of the cost that we see. You know, I tend to think about, okay, what's the cost of the rising cost of the inflation? I think of 3%. We're seeing much higher figures than that here in the city. Not to make excuses, but as we've done our analysis time and time again, we look at costs that are higher than you would imagine. That's just the reality that we live in. Having said that, Mayor, I'll offer to Make a motion to close the public hearing unless we have.

No, we need to make a motion to pass this resolution first before we close the public hearing. Okay, very good.

Then I would move to approve.

I have a comment.

We'll get to you. Hold on just a minute. A resolution to approve 26-1077.

Second. We have a motion. Second. We have a couple other individuals that would like to speak. Council Member Essex.

Thank you, Mayor. Thank you to everybody that came out to just share what's on your minds. I have heard many stories lately that have been heartbreaking. I know that there are issues with our seniors and our veterans. I know Olathe has moved towards property tax rebates for these groups and for low-income individuals. And I'm so thankful that we have found a way to at least help a little bit with some of those rebates. But I know year after year, all the taxing entities for property tax have continued to go up and up and up. And I know we all have inflation to deal with. We all have higher costs. And as we heard tonight, salaries are not increasing. Social security is not increasing. It's just a really hard thing. And I would agree with Councilman Baucus that property taxes suck. They do. They're hard on families and hard on people. And I just feel like the city's done an exceptional job, I will say, tightening their belts. I would say more this year than others. The hiring freeze is the CIP reductions, the rebates that I had mentioned. But I feel like our taxpayers just need a break at least once. Can we do more is the question in my mind. So I will be voting no tonight on raising revenue neutral.

Council Member Creighton. THANK YOU, MAYOR. FIRST OF ALL, I'D LIKE TO EXPRESS MY APPRECIATION TO OUR STAFF FOR HAVING PUT UP WITH ME THROUGHOUT THIS PROCESS MY FIRST BUDGET AND I ASKED A LOT OF QUESTIONS AND I DO APPRECIATE THAT YOU ALL RESPONDED. MS. WINTERS, I ABSOLUTELY APPRECIATE WHAT YOU SAID. I'M GOING TO BE 68 THIS FALL. I'M ON SOCIAL SECURITY. My working days wages are in the rearview mirror. And just since February, gas prices have gone up over 40%. My insurance is up over 8%. I get it. It's a struggle. THAT BEING SAID, SOME OF THE QUESTIONS THAT CAME UP, AND I WAS STILL ASKING QUESTIONS ON FRIDAY TRYING TO MAKE A DECISION. SINCE JANUARY 1ST OF 2025 THROUGH THE END OF JULY, 19 MONTHS, THE CITY OF OLATHA HAS ISSUED IN EXCESS OF 800 BUILDING PERMITS FOR ONE AND TWO FAMILY DWELLINGS. THAT MEANS IN A TWO-YEAR PERIOD, WE'RE ASKING MORE AND MORE OF OUR CITY STAFF of picking up trash, our police officers and the like. And, yep, they're still having to pick up trash every week at more than 800. Another number I got last week from the engineering department was in the years 2025 and 2026, there will be approximately 30 miles of new lane miles. in the city. Most of those coming in residential areas paid by developers. And we're still going to have to maintain them. We're still going to have to send our police and firefighters out there. And as hard as this is for me to say it, because I came into this saying I was going to hold the line and recommend revenue neutral, IN ORDER TO CONTINUE TO DO WHAT WE NEED TO DO, WE ARE GOING TO HAVE TO MAKE THAT SACRIFICE. IT HURTS. I GET THAT. BUT I'M GOING TO SUPPORT THE RESOLUTION.

Thank you, Mayor. And thanks again to Susan and all of the city staff for really, I agree with Councilmember Essex where it feels like this year we've been a little more forward looking than I think, at least I remember in immediate years past. So I certainly appreciate you taking that approach and really looking to see how we can kind of cure some of these structural imbalances that we're seeing. I did have a real quick question on some of the numbers that we went earlier. So I don't know if you or Ashley would like to, on slide 11, I see that we adopted our, for the general fund, our 2026 budget was 178 million and we're projecting that will receive almost $188 million. Is that right?

I'm sorry. Repeat your question. Oh, I'm sorry.

It's okay. So, in 2026, we budgeted for the general fund to have about $178 million in receipts for the year, and then we're projecting that we're actually going to collect about $188 million. So, sales tax, we're anticipating is probably going to be a little higher.

That is it. Clara Bernauer, thank you for your question on that. Yes, correct. That is what's happening there on the revenue side. So it is an increase in the sales tax.

Okay. And I know for today's conversation, we're talking about the mill levy, which is on the property tax side of the equation. But similarly, when we look at, I don't know what slide, it's slide 20, I think, where we're Our proposed budget for the general fund is $247 million-ish, $248 million for 2027. If we see the same kind of increase between what we're approving in our budget versus what we actually receive in revenues, even if they're collected on the sales tax side, how are we accounting for that in our budget? That is, is there any way we can say, okay, in 2027, you know, we budgeted, I forget, $248 million. We ended up collecting $255 million. We're going to take that six or $7 million and put it towards property tax relief for the next year. Is there, how are we doing that now?

We are always re-forecasting throughout the year, so we look for those budget variances at monthly. And so everything's pretty much on the table. We have internal discussions. If it comes to a policy-level decision, that's when we come back to counsel as staff for that level of direction. When we if you're kind of looking at what the scale would be and you have those massive swings with sales tax because it can be so volatile and it's our number one revenue in the general fund. That is if it becomes different. And we believe that our forecasts are based off of good assumptions right now. But if it gets that different, that's when we have additional conversations.

Okay. So, but it's possible that in the future for these ongoing, perhaps even for 2026, we could look at, did we receive more revenue than what we thought we were going to get? Is that additional revenue already spoken for? No. Yeah, you got this.

Jamie Robichaud, Economy Director. Let's get everybody up. Yeah, just get the whole team up here. It'll be a little party. When we build the 2027 budget, we're building it off of the projections for this year and not what we budgeted. So 2027 is already assuming we're beating our sales tax projections for this year. And that's what Claire is alluding to when we're looking at our assumptions. We're consistently refining them. Sales tax, I think, is projected to be about $5 million more this year than what we thought it would be. Some of those other revenues are permits and things like that. So every year when we're building the budget, we're not building it off what we budgeted. We're looking at what are the trends showing us right now and what do we think we're going to collect this year to help inform what we'll collect next. next year and so the other thing that I would add here is you'll remember when we shifted the mills from the debt service fund to the general fund and now we're making a large transfer to the debt service fund each year to fund our capital improvement program part of that strategy was to increase the flexibility the city has of what we transfer to the CIP so if we do find ourselves with a surplus at the end of the year more than what we anticipated when we budgeted for the next year we can pre-fund the CIP to help us in the long run. Does that answer your question?

Yes, it does very much. Thank you very much.

Councilmember Felder.

Thank you, Mayor. So, Jamie, can I ask, dive a little bit deeper? So the overage of almost $10 million versus our adopted budget versus our projected numbers for the year, that's going towards funding future CIP?

No. What we're building the 2027 budget off of is what we are projecting to land at in 2026. It's not necessarily going to the CIP. It's a resource that we look at to say, okay, we have this resource. When we build the 2027 budget, that's That's revenue that's available above the 30% threshold of reserves in the general fund that can be allocated. And what's really happening here is that's just helping delay the structural imbalance we're projecting. If sales tax is doing better, that kind of kicks the can down the road a little bit. We know our revenues are still growing significantly. lower than our expenditures. But when revenues outperform what we budgeted, we're able to kind of continue the route we're going and buy a little more time before we really have to cut those projects. So had, for example, had sales tax not come in the way we were projecting it and it was staying flat for this year, you would have seen more reductions likely in the CIP and likely even more reductions in the general fund as well.

Does that answer your question? Sort of. I understand how you use the number for projections, but the overage, where is it right now? I know we haven't realized it totally yet, but when it comes in, well, maybe we have. The projected 2026 overage versus the budgeted amount.

Yeah.

Where is it?

It's assumed in the starting fund balance for 2027. So when we build the budget for 2027, you start with your fund balance here, and then you determine how much you think your revenues are going to bring in, how much your expenses are going to be, and then that's going to bring you to your ending fund balance. We always, when we build the budget, we want that ending fund balance to be at 30% because that's the council's policy. So that money in the starting fund balance is what's helping you have a balanced budget for 2027.

So it's not available for property tax relief. Exactly. Okay. Yep.

You will see in the 27 proposed that revenues for 27 are slightly above expenditures. That is by design. You would see in 26 we normally have very balanced revenues and expenditures, right? They're slightly above. That's because we have made strategic reductions in our general fund to slow the spending because we know revenues aren't growing fast. as fast as the expenditures are growing. And we're trying to get in front of what we know will be a structural imbalance in the next couple of years. So that is by design that that is structured that way.

Great. Thank you for that. Well, I'm so grateful for staff for working extremely hard to tighten the belts more visibly than I've ever seen. The impact is materially felt. I see it on every page. And I appreciate Doug and Mary and Kathy and Erin, thank you so much, and Charlotte for speaking tonight and explaining to us the impact of property taxes on your daily lives. We hear you. And Doug, I'll be getting some information to you about our goal on moving the commercial, broadening our tax base and our land use plans. And Aaron, having two young kids, you're at a different time in life. So we're hearing kind of the bookend stories here. So it's important for us as a governing body to hear these things. That's why these budget nights are important, these hearings for the exceeding revenue neutral. I'm going to vote in support of it tonight. And keep in mind that that's not voting for a budget. This is giving us room to make decisions when we vote for our budget. I will say that I think I will vote in support of our budget because I've seen our staff, we're holding the mill levy level and we've tightened our belts more than ever in my time on the city where we will not impact your first responder response times, your roads are going to stay nice, your The things that you hold near and dear to you, you're not going to see an impact on that. But you are going to see less spending on the city level. Let's see if there's anything else. The thing that I really appreciate, Susan, is you bringing transparency and professionalism to the process. Can I ask you a question about Councilman Vaucus mentioned about the chiefs. Can you talk about that? I have not heard anything about it.

Susan Sherman, city manager. I think Council Member Vaucus was referring to, I believe it's the state Kansas sports authority will own the headquarters and the training facility. The county may be looking at another sports authority for something else. But I believe the state will be owning the choice.

You're right. You're absolutely right. I'm sorry. Yeah, thank you.

Thank you. I was just making sure I hadn't totally missed a conversation. So thank you very much.

Council Member Bacchus.

Thanks, Mayor. I appreciate that. Thanks for asking, and thanks for straightening me out. Yeah, the sports authority is for Halo Ridge, but for the Chiefs, the training facility and the headquarters, part of the state sports authority, let alone the stadium in Kansas City, Kansas also. Thank you. Hey, I just wanted to dial in here, Jamie and Clara and Ashley, as we talk about specifically tonight, the possibility of exceeding revenue in excess of neutral, specifically as it relates to Olathe. Certainly, as we have the conversation about property taxation, in the aggregate, it's very onerous, it's very aggravating. Absolutely. Specific to Olathe, though, the budget that we're discussing, you know, if we look at the average price of an appraised home in Olathe, is around $460,000. And so the budget that we are putting forth, we're in the process of putting forth, translates to about $102 a month per homeowner if you're in that average house. Is that correct? So that's the money we're talking about specifically for Olathe. Okay, good. Thank you, Mayor.

Councilmember Dinnall. Thank you, Mayor. I also want to thank everybody who spoke. Your stories really mean a lot to me. As I've been studying this budget, one of the things that stuck out to me is very similar to something Councilmember Schoonover said, which was how this particular budget's a bit more forward-thinking And I know it was mentioned there's a structural imbalance that's kind of coming due to us in some years. And so I like the efforts that I've seen staff put forth to kind of address that. It is kind of a multi-year thing to address, but I also know there's struggle in paying property taxes, something that's happened throughout the country with inflation and our property taxes going up. And so my question with all of that is for you, Susan. On our property tax relief, are we still at the same amount for 2027?

So staff proposed changing from $250,000, now again, we spent more than that under my authority this year, to we budgeted $300,000 for next year's program.

Okay. I was looking in the big binder and I couldn't find it today, so I wanted to make sure to ask.

I would add to that that this year we will make sure that when we hit the $300,000, the program will close.

Okay. So I would say... In the next couple of years, knowing that we're on this kind of plan to get to that structural imbalance, I would be interested in looking for clever ways to increase that a little bit for the next few years. So if other people are in agreement, that's something I would love to see. What can be done? How can we do that in some clever ways that don't burden more taxpayers, other taxpayers in any unreasonable way? Thank you.

We do have a motion and a second on the floor. I did follow up on that rebate program, Susan. The maximum that any individual or any taxpayer can get is $750 under our current plan. What's the typical rebate amount? Is it always $750? That equates to about a $280,000 home, the equivalent of our tax on a $280,000 home, the $750. Sure. Do we have some requests that are less than $750,000?

So the program is broken into three parts, I would say. And I'm sure Jamie can help me with this as well. But if you are income eligible, it is $750. I don't know if that's a sliding scale or not. Then if you are a veteran, it is just a flat $250. There's no eligibility there. And then we are talking about a senior income eligible program. for 2027.

So on age, and it would be a flat similar to like 250 or something like that. So we do have different abatements

Thoughts? Yeah. certain thresholds for designing the final program.

So out of the pot, we say this much is for interns, this much is for those who are not eligible, this much for interns. We just say, first come, first serve, here's your program, and that's the way it works.

That's correct. You know, this was the first year that we hit our budget. We're going to change how we're communicating the program next year to have a deadline and the program will be very clear. The program closes as soon as we meet the thresholds for application in early.

Very good. Thank you. Council Member, did you have another question?

Yes. One thing I just wanted to add real quick. I know The program has a window of time and then it ends or if you reach the limit, it ends. I would be interested or curious to see if we can accept all the applications and if we do exceed Can we make sure that the people who need it most are put at the top of the list? Is there something along those lines that we can look at? And I know that's a difficult thing to quantify. So there's a struggle there. But I don't want to miss out on helping somebody who really, really needs it.

How about we take that under advisement and we'll put some thought into whether there's a way to do that fairly.

Yep. That's the key. Thank you. Okay. We have a motion and a second on resolution 26-1077. Would the city clerk please call the roll?

Mr. Schoonover?

Yes.

Dr. Felter? Yes. Mr. Baucus?

Yes.

Ms. Essex? No. Mr. Creighton?

Yes.

Mr. Dinnald?

Yes.

Mr. Bacon?

Yes.

Motion passes 6-1.

I would entertain a motion to close the public hearing. I move to close the public hearing.

Second.

We have a motion and a second. Will the city clerk please call the roll?

Dr. Felter? Yes. Mr. Baucus?

Yes.

Ms. Essex? Yes. Mr. Creighton? Yes. Mr. DeNault?

Yes.

Mr. Bacon?

Yes.

Mr. Schoonover?

Yes.

Motion passes 7-0.

I, too, would like to thank everyone that has participated in our budget process to date. We still have our vote on September 15th, so you still have time to influence us one way or the other. But at this time, I would like to thank everyone for coming tonight, and we are adjourned. Thank you.