City Council - Regular Meeting

Good evening. Welcome to the regular meeting of the Olathe City Council for Tuesday, July 7th, 2026. The next time on our agenda is the Pledge of Allegiance. Would you please stand with me for the pledge?

Pledge of Allegiance to the flag of the United States of America.

We'll now move to public hearings. Item A is a public hearing in consideration of ordinance number 26-35, amending a municipal code section 10.08.010 pertaining to the major street map. This map was last updated in 2016, so it's been 10 years since. And much of Olathe has changed since then. So is there anyone that has signed up to speak in this public hearing? Is there anyone here in the audience that would like to talk about our street map? Seeing none, a motion to close the public hearing be in order. I move to close the public hearing.

Second.

We have a motion and second with the city clerk. Please call the roll.

Mr. Bacon?

Yes.

Mr. Schoonover?

Yes.

Dr. Felder? Yes. Mr. Baucus?

Yes.

Ms. Essex? Yes. Mr. Creighton?

Yes.

Mr. DeNault?

Yes.

Motion passes 7-0.

A motion to approve ordinance number 26-35 would be in order. I move to approve ordinance 26-35.

Second.

We have a motion and a second with the city clerk. Please call the roll.

Mr. Skinover?

Yes.

Dr. Felter?

Yes.

Mr. Baucus?

Yes.

Ms. Essex? Yes. Mr. Creighton?

Yes.

Mr. Dinault?

Yes.

Mr. Bacon?

Yes.

Motion passes 7-0.

We'll now move to the consent agenda. The items listed below are considered to be routine by the city council, may be approved in one motion. These may include items that have been reviewed by the city council in a prior planning session. There will be no separate discussion unless a council member requests that an item be removed from the consent agenda and considered separately. Council, are there any such items this evening? Seeing none, a motion to approve the consent agenda as presented would be in order.

Thank you, Mayor. I move to approve the consent agenda consisting of 11 items A through K. 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. Donnell?

Yes.

Mr. Bacon?

Yes.

Mr. Schoonover? Yes. Motion passes 7-0.

We'll now move to new business. Item A is review of marketing results for city self-funded medical and pharmacy claims administration and authorization to proceed with final contract award to Aetna. This past year, city staff reviewed options for an improved employee health care plan. Director of Exceptional Services, Aaron Bader, is here tonight to begin a presentation. Welcome, Aaron.

Council, Erin Vader, Director of Exceptional Services. Earlier this evening, you had the opportunity to learn more about the city's employee well-being program, including recommendations to enter into an agreement with Aetna for the city's health plan and pharmacy benefits management services. As I shared earlier, benefits decisions, benefits renewals are a revolving door for HR in our world and in accordance with our best practices. with procurement, we routinely evaluate these contracts and make sure that they not only benefit our membership, but they are fiscally responsible for the public that we serve. I do have Matt filing here tonight with Lockton. He's the relationship manager for Lockton. We work closely with them. They manage the process and the evaluation. He's prepared to do a brief presentation if you are so willing.

That'd be great.

Thank you, Mayor. Thank you, Council. Appreciate the opportunity to present tonight. Just wanted to share with you the good work that we've been doing with the Olathe team. As you know, we were marketing the medical and prescription drug program for the city of Olathe. We casted a wide net. We went to several carriers, as you can see are presented here. We were really looking at opportunities for cost savings, opportunity for expanded network, opportunities for expanded program. And so what we did was we narrowed actually our marketing process down to two. Cigna and Aetna. As you can see from a financial comparison perspective, Aetna is a little bit better financially, showing $674,000 of savings versus Cigna's 363. However, I think it's important to note while we are showing the financial analysis, financials are important. This is a very large investment that the city of Olathe is making for their employees and within the employee benefit program itself. There were also other considerations as well as you know, expander programs, service to members, service to the City of Olathe team. So tonight we are recommending Etna as an option. One of the things that we had evaluated as a part of our decision here was provider disruption. Obviously, this is a big decision, a big change for City of Olathe. We want to make sure that members of the City of Olathe health plan have broad coverage to providers, the ability to see providers when they need it. And so as you can see, when we did a network comparison of City of Olathe's claims of Cigna versus Aetna, you actually see that you're getting better network coverage with Aetna. Percent of in-network bill claims is higher at 98.4%, and then the percent of in-network claims actually increases from 89.2% to 98.9%.

Matt, can I ask you a question? So one of the things that you mentioned was it can be a change. So when you are evaluating changing insurance management companies, health management companies, do you look at the provider that will have the least amount of disruption to an entity rather than, you know, because unless we've got big problems and we're saying, hey, we need to switch. So what kind of things do you evaluate when you're saying Aetna looks like a pretty easy switch? I'm an accountant. When we're doing tax software, we don't switch because price goes up a little bit because It could be very disruptive. We could have a terrible tax season. So we want to have, if we're going to switch, it's got to be almost seamless. So are you saying that the switch from Cigna to Aetna would be fairly easy for Olathe to do and to be seamless? Is that part of your evaluation process?

For any change, change is big, right? But what we have to look at are what are the advantages long term to this change? And what we think is advantages long term are financial opportunities relative to income. claims for medical and prescription drug, changing the trend line, reducing the trend line so that we have a sustainable program long-term for the City of Olathe, as well as we want to look at service for members and opportunities for programs for members to help them more proactively manage their care. In addition, also, we want to look at the service to the City of Olathe team as well. And so all those things taken into consideration, you know, we believe that Aetna is the best partner. But yeah, we're evaluating several different points along the way outside of just financial. So we're looking at discounts. We're looking at provider disruption. We're looking at opportunities for, you know, creative options like narrow networks. We're looking at different services that they provide. So we're taking into consideration a large number of different data points. And I just want you to know, too, we don't take this lightly. We're not just, this isn't a, we understand that City of Olathe has had a 13-year relationship with Cigna. We have members of your health plan that know Cigna, are used to Cigna. They've got their providers. But we also believe that for long-term sustainability for City of Olathe and the opportunity for members to continue to access viable care and be proactive with their health, Aetna is a good option.

Thank you. HOLD ON JUST A MINUTE, MATT. COUNCILMEMBER DENAULT, DID YOU HAVE A QUESTION FOR OUR CONSULTANT?

I WAS WONDERING IF YOU COULD ELABORATE A LITTLE BIT MORE ON THE ADVANTAGES OF ETNA OVER CIGNA. YOU MENTIONED SOME THINGS, ACCESS TO PLANS THAT EMPLOYEES CAN USE. I JUST WAS WONDERING IF YOU COULD ELABORATE A LITTLE BIT MORE ON THE ADVANTAGES THE EMPLOYEES WOULD BE GETTING WITH ETNA OVER CIGNA.

Sure. Well, employee-wise, what we're talking about is different programs to help them proactively manage their chronic conditions. And so what we feel like in our evaluation is that Aetna provides a little bit more flexibility than what has been afforded to through Cigna in the past. So that moving forward, that, you know, employees will have be at an advantage to be able to manage their health more proactively.

Okay. I had this other question. I know we all love filling out all the forms to switch our insurance whenever that comes up.

Yeah.

Not really. But I have seen some cases where taking the information from your previous provider can streamline the process to go into the next provider. And I would only offer that as a, hey, that would be awesome. to make the whole process more seamless. To that end, I am curious what the employees are saying. Do they want to switch? Which I know is probably a mixed bag, right? Some might want to, some might not. There's something to think about there. But I would offer, has there been a survey or anything like that to just hear, do we have a good, yes, this is more for Susan, to see kind of where's everybody at?

Yep. Thanks for the question. Susan Sherman, city manager. I think, you know, what I want to say to that is while we care deeply about our employees and what their experience is through our health plan, our responsibility is actually to make sure that health fund lasts for generations, right? And so I think everyone would have their own. I love my doctor. Oh, I didn't really like that vaccine. And I think that our HR staff team is really good about ferreting out those kind of things and dealing and transitioning people in terms of their ideas and their concerns and walking them through systems. So I'm not sure on a really complex decision like this, that it's really something that we feel like it's really a vote of our members. I think it's a higher level overarching. We've got to take care of a health plan and make sure we are providing the best programs and services that we can.

I really understand.

I like data, so I'm always looking. Thank you. Service, I will piggyback on that. I mean, one thing I didn't mention, advantage to employees, I think services as well is a part of that. So making sure that they're getting, have the ability to get questions answered, to be able to have help finding providers, being able to take advantage of the different programs that they need. So, again, that's just part of one of the many data points that we're utilizing when recommending a change. Thank you. Appreciate your time.

Thanks, Matt. Okay.

I just wanted to note one of the things that we ran out of time in providing you is a transition plan, and that takes into account needing to walk alongside our employees and members through a process and ensuring that we have continuity of care. It's one of the reasons we wanted to bring this before you early. Generally, we would be doing this very late in the winter months, and so we wanted an opportunity to take into account all the things that need to go into a transition plan. With that said, I did want to just reiterate what's in front of you tonight is an approval of a letter of understanding with Aetna that allows staff to go ahead and work through negotiations and finalizing things like plan design options. We talked a little bit about the addition of narrow networks, so we'll have to redesign all of our plans. It also allows us to set the rates, and it would allow us to continue to negotiate that complete contract And what we would recommend tonight is that the council authorizes the mayor to sign that as long as it is consistent with what is outlined in the letter of understanding, both financially and in terms of the actual terms of the agreement.

Was that the, oh, Council Member Creighton. Was that the end of your presentation, Erin? It is. Okay, thanks.

One of the things that I heard just a few minutes ago was that this is a complex decision. Our employees are first. And I support that and understand that completely. But it is a complex decision. We just first heard about it when we got our agenda on Thursday. I would like to know just a little bit more information about have we had any issues with our current carrier? We've had them for 13 years. And In my line of work before I retired and even now as a consultant, part of my responsibilities are helping people transition health plans. Employee angst over making those changes is significant. I would be open to saying let's take a little time for us to take a deep breath, hear back just a little bit more information, and potentially we do have a special meeting called for a week from today. Maybe over the next few days we could get some feedback. I would feel much more comfortable with seven more days to say, okay, this makes sense. So I'm just throwing that as an idea to see if that might stick and what the thoughts are. My understanding from our meeting, While we need to move, and I get that, I don't think seven days is going to be a deal killer. So I just wanted to get that on the record. I'm willing to say let's give it one more week.

Council Member Baucus. Thank you, Mayor, and thanks. Councilmember Creighton, I agree with what you're saying. You know, I think one thing we can all agree on is that we're just choking over this continual escalation in health care costs. It's not sustainable. Ultimately, something's got to give. But there's no doubt that we're all fully committed to ensuring that all of our Latham employees have the best possible health care. I want to thank Lockton for the work they've done, Matt, you specifically, and all the work the staff has poured into this. As we're getting the additional information to digest, we have follow-on questions. So I understand where Council Member Creighton is coming from. I'm inclined to agree. Mayor?

I would say that a lot of us had other things to do this week, this last weekend being a holiday weekend, that we were all busy. And so maybe it would be wise if we would just postpone the vote on this. It was an action item tonight. If we waited until our budget meeting next Tuesday night for action on this, it would be perfectly – so I would entertain a motion to table – item A. Thank you, Mayor.

Based on our conversation, then I'd offer a motion, a motion that we table item A until next week for a decision next week on the 7th, on the July 14th, rather, July 14th City Council meeting.

Second.

We have a motion and a second with the City Clerk. Please call the roll.

Ms. Essex.

Yes.

Mr. Creighton. Yes. Mr. Dinnall. Yes. Mr. Bacon?

Yes.

Mr. Schoonover?

Yes.

Dr. Felter?

Yes.

Mr. Baucus? Yes. Motion passes 7-0.

Just to close the loop on that, we have some follow-ups that we'll provide to you and ensure that you have all the information you need to make an informed decision on July 14th.

Thank you, Erin. Item B is related. Is it wise for us to move forward on it, or should we go ahead and postpone it a week as well?

It's related, but they're not unified at all. This is actually a really good story to tell. That's why we put it on special business.

Well, let me introduce it, and then if you want to make some comments, that'd be great. Stay right there. So item B is consideration of option to renew the Marathon Health Agreement for on-site clinic services for up to two one-year terms, including the addition of two no-cost services outlined in the addendum. So Marathon Health operates our on-site well-being center, which we know is an important asset for our staff. So, Erin, if you want to introduce our guest. Thank you, Mayor.

Contracts of this nature would generally be routine, and you would often see them on the consent calendar, but we felt like we had a compelling story to share with you. For the past, well, since 2015, we have had a partnership with Marathon Health that has provided immense cost savings, not only to our plan, but to our employees. And we do have Holly is here with us this evening for Marathon. She did not get a chance to share information with you. So if you'll entertain a few moments with her, I did just want to give you a little context. So at the end of 2023, for the contract year to begin in 2024, the council approved a three-year contract with Marathon Health. Within that term, you allowed for two one-year renewal options. And in those one-year renewal options, we could have brought that to you on consent. What we are excited about and what Holly will speak to is some things that are new to the Kansas City market, which is really why we wanted to just move ahead with the one-year contract. recommendation. Also, Marathon has gone back and added at no cost to the city of Olathe two service improvements and enhancements, one for our employee customers and one for the providers. And so we created an addendum, which is another reason why we just wanted to be transparent and bring that in front of you tonight. So I'd love to invite Holly to the podium. She can introduce herself and talk a little bit about some of the 10-year trend data that we were just provided this year.

Good evening. Thank you. I know you have a lot to cover, so I'll be super short. But I wanted to just take an opportunity to congratulate all of you, the benefits team at the City of Olathe. In our 10 years of partnership, we have seen great success. Four key metrics that we look at at Marathon Health to determine if a health center is successful is, are patients using it? When they use it, do they love it? Are they improving their health? And are we saving the city money? And with these data points, all of those answers are a resounding yes. So in our 10 years of partnership, we've completed almost 30,000 visits through the health center. Of those patients that are accessing services, 79% of them are improving their health. So their biometric screenings are improving. Their most recent reading is better than the one prior to that. That can be their blood pressure, A1C, BMI, cholesterol, any of those metrics. So almost 600 patients are improving their health. That makes a huge impact on the spend and the claims costs that Matt was speaking to. The other piece is 97% patient satisfaction. So of the patients that are coming in, 97% of them have given us either a very good or an excellent rating on the services at the health center. The last piece, saving money. So of those patients that are accessing care and are continuously engaged at the health center, they are costing your plan over $3,500 less per year. So the impact to your plan, your claims cost, them improving their health, the satisfaction and just consistency and availability of care that they get at the health center has true hard dollar savings to the city and to your medical plan. I'll read just one patient comment that we included in this presentation. This is a City of Olathe patient. They stated, the staff there is always friendly and helpful. They listen without judging. Kim and Sarah have always provided excellent service. I can tell they are very busy, but that does not stop them from providing great care with a positive personality. And that's just one of thousands of comments that we get on a regular basis. So Huge congratulations. Again, appreciate the ongoing partnership commitment to your employees. That's been apparent in what I've heard this evening, how important they are and your commitment to this health center speaks directly to that. So thank you. And congratulations for that. Okay.

Thanks, Holly.

Thank you.

It sounds like the work that you're doing is excellent and it's provided exactly what we wanted. And that was to try to manage our healthcare escalation costs. So, and that's what you're doing. So thank you.

Awesome. Thank you so much.

Any other comments or questions on this item? Are you finished? Okay, a motion be an order on item B.

Thank you, Mayor. Regarding item B, I move to approve a contract for our employee onsite clinic.

Second.

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

Mr. Creighton?

Yes.

Mr. Dinnall?

Yes.

Mr. Bacon? Yes. Mr. Schoonover?

Yes.

Dr. Felter? Yes. Mr. Vakas?

Yes.

Ms. Essex? Yes. Motion passes 7-0.

We'll now move to item C. Item C is consideration of Ordinance No. 26-36, amending Olathe Municipal Code Chapter 3.50, procurement policies pertaining to public improvement project contracts. These changes would align solicitation requirements for public improvement project contracts with procurement in general. This item was a report on our June 16th council meeting. Is there any need for a presentation or comments from anyone?

A motion to approve would be in order. Thank you. I move to approve Ordinance 26-36.

Second.

We have a motion and a second.

Will the City Clerk please call the roll?

Mr. DeMille?

Yes.

Mr. Bacon?

Yes.

Mr. Schoonover?

Yes.

Dr. Felder? Yes. Mr. Baucus?

Yes.

Ms. Essex? Yes. Mr. Creighton?

Yes.

Motion passes 7-0.

We'll now move to item seven, which is general issues and concerns of citizens. We have one individual that has signed up to speak to the council tonight. So at this time, I'd like the city clerk to read the guidelines and then call up our speaker.

The council has extended this privilege to allow people who live and work in Olathe to address the concerns to the city's council. Speakers must only address the council, and council members are not required to respond. Please treat others with kindness and respect. The council has allocated up to three minutes per speaker. Tonight we have one speaker, and would Yvonne Fregirio please go to the podium, state your name for the record, please.

Welcome.

Thank you. Good evening. So my name is Yvonne Frigerio. I am the Vice President of Account Management at Cigna Healthcare. So thank you for the opportunity to speak this evening and, again, to reiterate the 13-year partnership that Cigna's had with the City of Olathe. We recognize that the decision before you is significant. It affects your city's financial resources as well as every employee and family member who depends on these benefits to access care, support, and peace of mind. Throughout our partnership, the City has achieved results that many employers would welcome. In 2025, the medical trend was 0.04%. That performance reflects disciplined cost management, stable administration, and close collaboration between Cigna and the City. Looking ahead, the city is supported by a newly effective account management team that brings local leadership and a clear focus on proactive consultation, affordability, engagement, and employee experience. City of Olathe employees and families have benefited from 24-7.

It was indicated that this is a voluntary request for annexation of approximately 71 acres north of 175th Street on both sides of 169 Highway. And that area, based on the current comp plan and the previous one, indicates industrial type abuses, and that's what they would want to come into. What my question pertains to is, That's in our border area. Spring Hill is already annexed north of 175th, just east of the railroad tracks. They've annexed the southeast corner of 175th and 169th. And most recently, I believe within the last 90 days, they annexed the southwest area of 175th Street to the west of Lone Elm Road. I just wanted to make sure that our uses are not in conflict with what Spring Hill is looking at doing in that particular area. So can you confirm that I am understanding correctly that Spring Hill has those areas within their jurisdiction? And do we know what they have kind of master planned that area for?

Chet Belcher, Chief Community Development Officer. The area in yellow in Spring Hill is zoned M1, except for the last property you talked about at the southeast corner of Lone Elm and 175th Street. That has not been rezoned. At this time, Spring Hall has three industrial districts. One is a planned district. One is a manufactured home district. And then these are zoned M1 for general industrial use. And I'm not aware of any land use restrictions. So unlike we have M1 and M2 for the intensity of use, they just have the district district.

So the intention is it's each of those areas that surrounds this that are in Spring Hill are industrial uses. And so that we would be, anything that we would develop would not be a major conflict to what they're doing. That's correct. Okay. Very good. Thank you.

Any other questions on item two? Item three is a report regarding proposed amendments to Title IX of the Olathe Municipal Code. And how about 4 on Title 10, the changes to it? Okay. So we'll now move to discussion items. We have one, and it is a presentation on the 2027 proposed budget. This evening's presentation marks the beginning of a series of important public presentations and council discussion as we work toward the adoption of the budget in September. This process provides the council and the community with the opportunity to review the city's priorities, planned investments, and long-term financial outlooks. City Manager Susan Sherman is here for a presentation. Welcome, Susan.

All right. Thank you so much, Susan Sherman, city manager and mayor and city council members. This is a big night for the city of Olathe and for what we do going forward. It's my pleasure to introduce the 2027 proposed budget. This will be an overview of our 2027 budget and As you know, I've been in the city for 35 plus years. I've seen the best of years in budgets, lots of growth and lots of things happening. And I've also gone through a number of challenging periods of time, just like anybody in the room with their business or their homes. And so we'll talk through some of our challenges and opportunities with this budget. First of all, I also want to thank our staff for all of the time and effort they put in. We did a kickoff earlier this year, this month, and talked about some of the things that are happening in the environment around us, the fiscal challenges. But we have a great staff who is always innovating, thinking differently, and bringing forward ideas that others might not have thought of. And we are resilient because we have employees who come forward and use their voice to make things better and we can look at things differently as I said. We are stewards of taxpayer dollars first and foremost when we put a budget together we look at priorities and we look at being stewards of taxpayer dollars. Not everyone loves a budget process, but this is my jam. I love seeing the numbers. People talk about it being a science. It's an art. How you put this puzzle together, how you all speak into this process is very, very important. So today we are going to talk through an agenda of giving more information on the process and the calendar that we'll go forward on, a little bit of a fiscal overview for us, key considerations and priorities that were set in February at our council retreat, as well as things that we call evergreen goals that help us have a north star on decisions that we make going forward. We will talk about budget highlights And we will end with a commitment to service excellence and capital investment because while this may be a challenging budget year, we have so much to be proud of. Many of the things that are in place and going forward are really legacy generational projects that this community will enjoy for generations to come. Lastly, we'll talk about next steps and the budget process. So, as I said, we talked about kickoff where we gave you a lot of detailed information about economics and what's happening in the world and how that affects us. Tonight, we are doing the city manager presentation, which is your overview, big picture of where we stand on the budget. And really, this is the beginning. As you see across the board, we'll meet next week on July 14th, and we'll really dig into workshop number one, which we'll talk about the general fund. And that's our core services in our general fund. That's a property tax fund as well. So we'll do the general fund, the library also has property tax, our debt service, and our capital improvement plan. We'll also talk about the intent to exceed revenue neutral next Tuesday. Then as you can go across the chart, we'll meet on August 4th and talk about our enterprise funds. The 18th will be our recreation and park sales tax funds. SMST is our street maintenance sales tax. So we'll get into street preservation and how we use those dollars to make sure that we take care of the many streets that we have in the city of Olathe. September First is reserved in case we need more discussion and we want to talk about additional ideas. And then we'll finish up on September 15th with your consideration of the 2027 budget adoption. So first and foremost, we are a growing and prosperous community. We're advancing the Elevate Olathe. We spent a year working on a comprehensive plan. We asked people to come in to meetings, many, many open houses, and tell us what they thought Olathe needed in order to grow and prosper. We got a lot of people coming in, giving those ideas. The city council recently approved that Elevate Olathe plan, and we will be going forward on catalyst sites that will see new and varied ways where we can grow in different segments of our community. We are seeing growth and development activity across all sectors. We are setting records on single-family homes. So while we are going to talk a little bit about slowing economy and what we're seeing in the financial sense, know that we are still growing. We are building neighborhoods. We are building community. We also are very aware of the opportunity to leverage outside dollars. So we secure outside agency funding on things such as a police department firing range, a fire mobile integrated health, We are out there talking to people about great ideas, and more often than not, we are partnering with them, and they are giving us the chance and the dollars to try out new pilot programs and things that we really need as core services for our community as well. We are engaging and shaping Olathe's future, as I said, with Elevate Olathe, but we do neighborhood design-a-park meetings. We have neighborhood meetings for new developments. We certainly know the importance of asking our neighbors and our friends and our family and people in the community what they want in their community so that we can make that happen. We've done some strategic annexations, one you just approved or are going to approve maybe in the upcoming meetings. And we want to make sure that we're doing those in a managed growth manner so we know where those streets are going to go and we know how that fits into the puzzle of Olathe. Lastly, we're expanding economic development and the investments that we are seeing there. We know that economic development helps us diversify our tax base. So when businesses are paying property tax, that helps make residential property tax maybe less of a burden. And so always have our eye on making sure that as we are bringing in property tax, we're diversifying that tax base as best as possible. And sometimes that means that we give an incentive early on for a development. But when that rolls off, then we have the benefit of that for years and years to come. We are fiscally responsible. We know that property taxes are a big deal to people, and I'm going to talk a little bit more about that. But we are bringing you a balanced budget and a capital improvement program, and we would never do anything less than that. We are also looking at forecasts. So we will talk about what our forecast says and how we're going to alter some decisions now ahead of any kind of forecast that might show us that we need to have more money in a different fund. And really change the trajectory of expenditures escalating and making sure that we are continuing to be responsible for many years to come. We will be maintaining high-quality city services. We do a resident survey through ETC that tells us that our residents are very satisfied with the quality of services we provide, our customer service, and how we use their tax dollars. That makes us very proud. We get a number of awards across the nation for many things, but the Leading the Way Award comes from ETC and specifically names out those three things as something to be very proud of. Reserving our strong financial reserves. We know that when you rely on sales tax for some of the dollars that you use for operating that you need to have reserves on hand in case you have a downturn in the economy. So we are always watching that. It's also important to have reserves so that we can borrow money when we want to borrow money. Having high reserves strong reserves allows the rating agencies to see that we manage our money safely and strongly and we get better interest rates in the market for our bonds. We invest in critical infrastructure and capital projects, and we'll go through each of those during our meeting on July 14th. We know that a growing community is going to need new streets, but we also know that we have to take care of the streets that we have had for our history of 150-plus years. And lastly, I want to emphasize that we're not proposing increase in the property mill levy rate. And again, we understand, we hear, we have friends that talk to us about property tax. We hear from the city council. when you talk to us about concerns about people being priced out of their homes. So I want to be clear that the staff is listening, and we do understand, and we are trying to make sure that we are very responsible as we move forward on property tax. There is no property tax increase on our mill levy this year. To give that a little context, I wanted to show a slide that says what the value of services paid for your property tax in the city of Olathe. You know, we hear a lot about it and especially when people get their bills or when they get their appraisals. And so an average household in Olathe is about $450,000. Pretty good, good expensive home, right? $450,000. So we took the average household in Olathe and they pay $102 per month in property taxes to the city of Olathe. So I think we can be very proud that that is going toward your police department, your fire department, your parks and recreation, your libraries, your streets and infrastructure, and a lot of the people who are behind the scenes making things happen every day, whether it's the customer service person answering the phone or somebody coming out and making sure that everything is going okay in your neighborhood. As a relatable thing, you can see on the right-hand side how that might compare to somebody's rent or their groceries or utilities. And I'm not saying that $100 is not a lot of money. Everyone watches their pennies, although we don't have pennies anymore, watches their money. But even $100 can be a lot. But I think I would say that it's a really great deal what you get with the city of Olathe for your $102. But I will also say that we know we have people out there that is a burden. So that's $1,224 a year on their taxes. And so we have put several programs into place for military and veterans, as well as low-income families, as well as this year we are putting together an eligible program senior discount as well. And so we know that people need a little bit of extra help, even if it's $100 a month. And so we want to be there for those opportunities to help people throughout our community in that. We also have a lot of people watch us, right? And so Standard & Poor's, S&P, is our credit rating agency, and they look at our finances and how we manage across the board. And these are just some of the quotes that we have recently gotten from them as they look at all of our book of business, how we manage and how we take care of business here in Olathe. And I'm not going to read all of those, but suffice to say that... They believe that the leaders of this organization and this city council makes decisions based on data-driven decisions and the best things for the long term, that we have good financial management policies and practices, and we see strong economic growth and conservative, and we do conservative budgeting. And so we are always going to be ready to pivot if we need to face challenges along the way, and they know that we will do that. So the 2027 budget has a number of key considerations. One of those, and I'll go in more detail about each of these areas on the left-hand side, the council priorities and budget principles are something that we use to determine how we spend dollars. That's how the city council has input along with all of the workshops. We take these priorities and we say we know that these are the most important things from the city council's perspective. They go and walk neighborhoods and they talk to people and we need to honor what they have said. And so we'll go through exactly what those priorities are and what our budget principles are as well. We have adopted plans and strategies. I know you hear a lot about the 2040 strategic plan and how that looks to the future, 20 years into the future and gives us things to strive for. We have the Elevate Olathe comprehensive plan that was just recently adopted. And we have lots of transportation plans and water and sewer plans and parks and recreation master plans. That is one thing that I think the city of Olathe does very well is trying to envision the future through developing plans and having community input to see what they want in their community. And then last but not least is resident input. We do the direction finder resident satisfaction survey twice a year now, and we get those results back, and our staff digs into them. We want to know what people think of snow removal. That's one of them we watch. Our trash service is best in the nation. Police and fire have 95-plus people. percent rankings almost every time. And that's something that's earned and it is a point of pride for our staff to know that residents appreciate what we do and we go the extra mile whenever we can. On the financial side, we are facing economic conditions and inflation that are causing us to pause and think differently about how we move forward on operations and what things we are going to have in our capital improvement program. Inflation is certainly hitting things like construction materials, equipment, fuel, and utilities. We're seeing rising costs for technology, insurance, we just talked a little bit about that, and contracted services as well. So as we grow and need additional things, we are trying to be very judicious about can we keep something an extra year? How about if we do something every other year and not every year? So I give a lot of kudos to our staff who is really trying to make sure that we are stretching those tax dollars the best we can. But we are facing large-scale inflation in the things that we use every single day. Construction costs continue to challenge our capital projects. So you will see that as we get into the CIP and some escalating of costs on our capital projects. workforce continues to rise. We will see next week that unemployment is going down, which means that it's a much tighter employment market. Of course, we feel like Olathe is the best place to work in the nation, maybe the world, and we want to retain and recruit the best and brightest as we move forward.

We have long-range forecasts.

And those long-range forecasts are telling us something this year that we are paying attention to. We see that in four and five years that our expenditures are outpacing our revenue. And so, by making some small and medium adjustments now, we will ensure our success in four and five years as well. So you will see us saying that we are tightening our belt a little bit. We are not going to add any positions to the general fund this year. And we are just looking at ways where we can tweak what we are doing so we can save dollars to ensure that in four and five years we still are in very strong financial shape. We always know maintenance needs are paramount. People want us to do good things, build good things when we do them, but then take care of them. We know that we have to take care of what we have. And so we have plans and we have priorities for maintenance needs and we set aside dollars to ensure that we are taking care of what we already own. And then lastly, organizational capacity. That's investing in training. That's investing in all of our staff to make sure that their voice is heard, that they have the ability to learn and grow and stay in Olathe for 36 years and one day become the city manager. And we want people to have their career here and build something special with us. In terms of the priorities I talked about in terms of the city council, so in February we did a retreat and we talked about some evergreen North Star type priorities that we live by. So we want to deliver exceptional city services that respond to the community expectations. We want to do priority-based decision making and making sure that we're doing long-term strategies for the financial health of us many, many years ahead. We are a steward of community resources. We take that very seriously. We have a leadership philosophy that talks about being good stewards of dollars. And I think we take that to heart every day when we are spending those dollars in making our community better. We are a safe community in person and property. We support economic development because we know that creating jobs and diversifying our tax base will help us prosper into the future. We are also very mindful of environmental stewardship and retaining and attracting the best and brightest for our workforce. And then, of course, having a reliable and sustainable infrastructure. So those are the things that you have told us that, you know, for the long term, look at those, make sure those are priorities, and make sure that everything we do lines up with those. And we do. Then three goals were given to us as well in February as three priorities that we wanted to see movement on in the next two years. One of those is downtown revitalization and investment. And we can talk more about that. But if you haven't been to Third Street Social, you should certainly go there and have a wonderful dinner or lunch. Our housing programs and how we make sure that we have housing options for everyone who wants to live in Olathe. We are working on that. And the revitalization of the Santa Fe corridor to include the interchange as well as the railroad crossings on the west side here. So these were our north stars. As we built the budget, we tried to build things around these priorities into the future. This is a slide that talks about ETC's resident satisfaction survey. People tell us that they want us to spend dollars with flow of traffic. You can see that at the bottom, flow of traffic. They want most emphasis on congestion management in Olathe, the maintenance of city streets and sidewalks. police, fire, and emergency medical services. So when we take our budget and put it into those three, you'll see that 74% of our dollars, we put the money where our mouth is and do public service and infrastructure at 74% of the dollars that we have in the general fund. Then other services, which are imperative to the success of the 74%, are at 26%. And so I believe that we can show our community that we are listening and we are hitting those important milestones for the community. Talking about challenges, so coming right back to 2027 and what we were facing when we are building this budget, general fund expenditures are growing. significantly faster than revenues. So we call that, inside baseball, we would call that a structural imbalance. But we won't stand for that. So we will start making adjustments to our expenditures and trying to find new ways to bring revenue sources into the city that helps to lessen that gap. We are facing the lowering of our property tax growth assumption going in, coming out of a legislative session where there was a lot of discussion about property tax and local governments and how we can better manage that. We've been challenged, really, at a 3% growth in revenue for property tax. And going forward in our forecast, we lowered our 5% forecast to a 3% forecast because it could be that the legislature might really make that law. Next year, we wouldn't want to put the city of Olathe in any danger of having to do drastic measures by forecasting out at 5% when, in fact, we may get capped at 3%. The good news there on the positive side may be maybe that won't happen and we will be able to bring in the dollars that we need in order to grow and prosper. But we also want to be responsive to many people who talk about property tax relief. We will have continued economic uncertainty. I already talked about the inflation, cost of living pressures, and interest rates. We also lost a sales tax revenue that was a countywide sales tax that built the courthouse, who is right outside of here. So while we assumed that that might get re-upped, that did not happen and is not happening. So for 2027, we will reduce our revenues by $4 million because that sales tax expires. So again, we're putting a cap on our growth and we're seeing some of our revenues expire as well. So these are the challenges that we face. but we never bring you challenges without solutions. That is our job. So for 2027, we will not add any additional positions into the general fund. And we have had frozen positions, which mean we didn't eliminate positions, but we are not filling those positions. And we will hold those positions for 2027 as well. Now, next Tuesday, we'll get into the details of what that really means. But again, I believe we have a resilient organization that is going to step up to that challenge. But it will not be easy. I will say that I believe the organization will make some sacrifices with this budget. We are doing only essential increases in commodities, contractual, and capital expenditures. So those three C's that we talk a lot about that really give us the things that we need in order to do our jobs. There are subscriptions and software maintenance and things like that. We will be funding those because it's something that we've become accustomed to having to deal with. I will tell you that we are all going through what you probably go through at home as well. And you're like, how many people have Hulu now? And how many people have this subscription? And we're making sure that we are collapsing those and making sure that every subscription is something that we absolutely need and we do not duplicate those efforts. We are looking carefully, very carefully, at the capital improvement program. We will be recommending that we remove some projects from our capital improvement program. We will recommend some delays in capital improvement projects. And we will reduce the dollar amounts with some of the projects with scope change, not just reducing the dollars that we're giving to a project, but with that comes a lesser scope for a project. We are doing that diligently, really looking at what is needed, using as much data-driven decision-making as we can. But we know that... If the revenues are not coming in, you can't pay off those debts. And so you have to start, begin slowing the capital improvement projects going in because we already are committed and are happily leveraging lots of federal and state dollars for Santa Fe Interchange, but that also has a $40 million deficit. by the city of Olathe. So we know that when that gets done, we have to start paying off that $40 million. And so we're planning for that now. Again, we'll continue monitoring our expenditures. We'll look at reductions as we move through the rest of 2026 and into 2027 because we know that the more you can do right now to slow those expenditures, the better chance you have at closing that gap.

into the future. We are a balanced budget.

So the 2027 total operating budget is $468 million. We are a large corporation and we do 10 lines of business. We do water, we do sewer, we do trash, we do stormwater, we do fire, police, all of these things. This is the total budget for that. And year over year, that increases 4.6%. I believe looking at inflation, it's at 4.2%. So again, I'm proud that our staff and our departments and all of our analysts and directors came forward with a budget that is modest in its increase. I want to show a little bit about tax-supported funds. So we have three tax-supported funds. That means property tax goes into these funds. So we have our general fund. And you can see there that it also has sales tax and franchise fees and others, miscellaneous things like building permits and all of the things that go into making our business run. On the debt service side, we have revenue of $28 million, and that is some of our fund balance that we have. Because we've moved the mill levies, if you remember in 2026, we moved the mill levies from debt service fund to the general fund. General fund now makes a payment to debt service. And then lastly, the library fund, which gets property tax and a little bit from other things. Those could be other outside funding sources that we have there. So again, those expenditures are also listed there. And so on debt service, you'll see we'll transfer dollars in to make that $44.6 million payment on the debt service side. So we also have enterprise funds. So these are user fees, right? So you have the water and sewer fund. So when you turn your water on, take a shower or anything on the sewer side, you're paying a user fee for those. And we have a block. system of figuring out when you use more water, you pay more for your water. And we'll talk about all of that in August when we have a workshop on that. Solid waste also uses user fees and the stormwater fund is a user fee as well. Again, we will talk in more detail on all of those, the general fund, water, sewer, all our enterprise funds, and our capital improvement program as we go through the summer. All of those meetings are open to the public. I want to kind of end with three slides that kind of remind us why we do this job, right? We have people in the city of Olathe who are satisfied or very satisfied with all of the services we provide. You know, we make Olathe special because we have great leadership on the city council who says, go and do great things and try things out, but be responsible as you're doing them. So, you know, Luke Snow Walker and the fun community engagement that you get by simply putting a name on a snowplow, That's fun for our employees. It's fun for kids. It's fun for adults. And again, that didn't cost us hardly anything, but a lot of goodwill. Of course, our first responders are always there when we need them, and we thank them every day for the job that they come out and do day in and day out. We also appreciate our history. So we have the Mahaffey Farmstead and all of the things that we can teach our children about the past and how that catapults into the future. We're doing a lot of street preservation. We're doing a lot of trails. We're doing a lot of parks. The library is a wonderful place for all families and kids to come and learn, adults as well, senior citizens. If you go into a library, you see the gamut of families and all the things that are afforded to them at our libraries. And so this slide is really about service excellence. You can be assured that you have employees working day in and day out that are working hard to make Olathe a very special place. We also have a commitment to capital investment, and we have a long list of things that we have done on capital investment. Fire training center, fire station number eight, both downtown libraries, a police headquarter, park maintenance facilities, I-35, 119th Street Interchange. I don't need to read these to you. When you drive around Olathe, you see what our dollars go to. And you know that a lot of pride goes into not only designing them, but taking care of them when we're done. We have things coming up. Significant investments at 119th Street Extension. That will be so fantastic for the west side getting to the east side, and that has always been a priority of east-west trafficways, and so that will be a big boost to that goal. Santa Fe, Ridgeview to Merlin, we all know the interchange is coming, and it's going to be fantastic when it's done. So we're going to continue to be positive about that. Fire Station 4 and 9, and we have a police firing range. We have so many things that we can be grateful that we have been able to bring to our community. So never lose sight of all the things that are already happening. Look at downtown and the new restaurants and the things that are happening there. People love our parks and our trails. So to kind of round out my last slide, we are planning for the long term. We are fiscally strong and committed to providing excellent services. We maintain what we have and we are going to adapt to changing economics as they happen. That is what future ready and resilient means. And we are building and adapting for a stronger future. Again, I will finish off by saying we have a long way to go. This is the beginning, and we will go much deeper into details at these workshops, and we look forward to having that discussion with you along the way until September 15th, where you will consider a budget and a capital improvement program. I'm happy to answer any questions. We will put these presentations and our question and answer materials on our website so you can keep up with us for our budget process on the website or please visit us at any meeting that you can come to.

Very good, Susan. Great information. We do have a couple or at least some questions. Council Member Felder.

Thank you, Mayor. Susan, thank you for the presentation. And for doing it in a meeting that's recorded and goes out to the public, I don't think I remember this happening before. We've done workshops, you know, and the information, I'm always sitting there going, this is so good. But now we have a recorded presentation we can point the public to. So thank you for that. And excellent job. Thanks for constraining the budget growth. We're hearing about property taxes, especially for those on fixed incomes, the seniors. Thank you for allowing us to do the senior property tax relief this year. I'm very proud of Olathe. We were the first to innovatively do the veterans and active military. So anything we can do to take bite-sized pieces out without impacting. I love how you mentioned in the slide that we will maintain our high quality city services. And that's critical. It's there's a tipping point where you would really be able to tell. Like, we don't want our response times to go up for first responders. We still want to have the cardiac save rates that we have, things like that. And so I really appreciate it. As someone who has personally benefited from a cardiac save of a spouse, those are dollars that retroactively you can't say, shoot, I wish we had, you know, kept, you know, the mill levy where it was. You know, you have one shot at saving a cardiac event. So thank you for that. I appreciate all that you presented tonight. I look forward to the workshops.

Council Member Creighton. Thank you, Ms. Sherman, for your presentation. And I know we're going to be really getting into the weeds down the road. So I just wanted to make a couple of comments. And first of all, I CAME INTO THIS POSITION BEHIND KEVIN GILLMORE, AND KEVIN STRONGLY PUSHED FOR, AND I WAS ONE OF THOSE CITIZENS THAT REALLY APPRECIATED THAT HE OFTEN TALKED ABOUT WE NEEDED TO HAVE A LOWER CAP, AND I APPRECIATE THAT OUR STAFF HAS SAID, OKAY, WE'RE GOING TO LOOK AT 3% AS OPPOSED TO 5% LIKE WE'VE DONE IN THE PAST. SO THANK YOU FOR THAT. It's fiscally responsible, but it's also an acknowledgement that there may be changes coming out of Topeka on property taxes. So thank you for that. Also, some of the things I'm hearing is that there have been some ideas floated in Topeka related to changing some formulas on how other revenues may be filtered to the cities. So we have to take that into account. And I understand there's at least one utility company in the state that is desiring to do away with franchise fees. And so that's an acknowledgement, again, of all of the struggles that we're going to have. Those are the challenges. But thank you for starting to slow the rate of growth and to work towards that. And it's going to be some hard decisions. And the citizens are going to see some of those impacts. I know you're going to be presenting changes to the CIP. And you've said there's going to be some things come out of that. And I have a feeling those are going to be some things that I really don't want to see go. but I understand it and we'll be talking through those. And so, appreciate taking the stand on no new positions. And finally, just to our staff, please continue to keep the pencil sharp and if we can reduce it even more as we go into these specific stations ahead, we'll delve into those and talk a lot more about how we could even maybe find some more ways to cut. So, anyway, thank you to everyone has been involved in the budget process at this point, it is very much appreciated and appreciate the leadership of our city manager. Council Member Baucus.

Is your mic on? Thank you, Mayor, and thank you, Susan. I'd highlight again the workshops that are coming up on the 14th of July, August 4th, August 18th, September 1st, September 8th, and then the final budget adoption on September 15th. Those are all open to the public, and we encourage that as many folks as can come and hear these workshops. It's very insightful. It helps you to fully understand, better understand the complexities of the local government. So again, I encourage anyone here tonight, anyone that may be listening either now or at a later date, pulling it off the internet, please try to attend these workshops. I think you'll find them educational. And it does come with a free meal, I think. So thank you.

That had to be cut. Just kidding. A little joke.

Maybe a small meal.

Yeah, I don't think we're providing food for anyone that wants to attend on these workshops. That's not been the case. But I would say good job, Susan. I appreciate the staff's hard work at trying to take on some challenges this year. I wish it wasn't this way. I mean, that we didn't have to tighten our belt, but sometimes we do, and maybe that's not always a bad thing. But this is one of the most important things we do as a governing body. is approve the budget and listening to staff and hopefully following our goals for the city and the citizens direction finder results. So It's going to be a good process going forward. I would just echo some things that Dean and you mentioned, Susan, and that is we do want public input. And if you can't attend the meeting, you can go online at OlatheKS.gov and find all the material. we're presented here on the council so it's all going to be available for you to see and so you know what we're looking at and if you've got some comments or ideas we'd love to hear from you so thank you and we'll proceed with our next meeting next Tuesday on the 14th and it will be at it is at the police department community room very good all right thank you We'll now move to additional items. I'll start on my right. Council Member Dinnall.

Thank you, Mayor. I hope everybody had a good 4th of July holiday. Even though there was a bit of rain, I wasn't able to go to the fireworks because I go to see family every year. I also wanted to thank the police department for showing up every time those pesky teenagers lit off the fireworks they weren't supposed to light, especially the ones by my house. I didn't call them. And then I wanted to thank the fire department for being ready. And thankfully the rain probably made that a little easier. So thank you.

Council Member Essex.

Thank you, Mayor. I just want to echo, too. July 4th went off without a hitch. Well, we were a little late on the fireworks. I bet every one of us got a text. Are they still on? Are they still on? Everybody was excited, but we were there and we saw it and we pulled it off. So good job to everybody. I also just want to make a quick comment. This budgeting process is is difficult, and it's detailed, and it takes many hours. And I always want to make sure that we thank our staff that has put their heads together, prepared, and listened to the community, listened to the council concerns. And I'm pretty impressed with what I've seen so far. So I just want to thank you so much for all your hard work on the budget.

Council Member Bacchus.

Thank you, Mayor. Well, I just mentioned on Monday I had occasion to be out at 159th and Black Bob, and that's our pathways – Habitat for Humanity's Pathways Project, where we're coming to closure on building 14 affordable homes. And they're just about done. I had occasion to meet with the third owners who have been selected for ownership, a young family, husband and wife with five kids, no less. But they'll be moving in in about 60 days. It looks great. And, you know, in conversation with the Habitat for Humanity folks, You know, they did confirm that for these 14 units that are about to be completed and occupied, they had over 500 applications. So as we continue to have our conversations here in city staff, Wynn City Council of what we can do to help make some incremental increased properties available in the missing middle. That we look for another Habitat for Humanity project this year to just agree that we can do that. They are ready to step up and work with us. They're very happy with the relationship with Olathe. If we can find some additional land for them to build more homes, the demand is there. So thanks very much, staff and council, for your consideration as we continue to look for ways to build inventory in that lower missing middle. These homes come in at about the $250,000 price range. And what Habitat says, if these were being brought to market by a typical developer with markup, they'd be a little bit over $300,000. So that's the kind of property that we need to build. Thank you, Mayor. Council Member Felder.

Thank you, Mayor. I wanted to highlight an action in our report tonight under the Municipal Code Title 10. There was a really important change made for at least one of our residents. He brought to my attention that UTVs do not follow the same ordinance as golf carts. And I asked our city attorney, Ron Shaver, I nailed it, if we could make a change. And it wasn't even, I would say, 30 days ago. And tonight we were seeing the language to get that brought up to where it makes the treatment of the two equal. And I just wanted to give a shout out to Ron Shaver and Bob Gallimore for that. doing such great work so quickly. Do you want to add anything Rob?

I was about to say give a shout out to Bob. Bob does the work and our law clerks Maya and Liam who are in the audience tonight also helped with that. So it's a group effort. We provide you our updates to the standard traffic ordinance and the public offense code every year at this time based off legislative changes and we include a few others that we gather along the way and this one was timely so we're glad we were able to include it as well.

Thank you. So we'll vote on that sometime in the future. The state already kind of recognized this law equally, so we're just kind of catching up. So I was excited about that. And then we didn't have time tonight, but for the next session, I did create budget bingo, and I do have prizes. So I will pass these out next time. And I really do appreciate what the staff does. I kind of make light of it, but it is fun to get residents engaged, get people to pay attention to keywords like CIP, infrastructure, fire department, police. So everybody, I think I attended different versions of the card, and I made a special trip to Costco to get some treats to hand out. And whatever we have to do to get, you know, engagement with the public. And so I figure that's one step. So next Tuesday I'll pass those out. Thank you. Thanks, Mayor.

Council Member Schoonover.

I was just going to say it's National Ice Cream Month, so let's get out of here.

Council Member Creighton. Anything further?

Just one thing, just a reminder that the next series of Olathe Live concerts continues this month. There are two coming up, the first one this Friday, July the 10th. The following one will be Friday the 17th, and I don't want any comments from the five council members who are younger than me, but as a baby boomer, I'm excited that I get to host the July 17th meeting, or excuse me, concert series, because it's a tribute to Steve Miller, John Cougar, and something that I always loved as a when I was much younger, CCR. So anyway, and then there'll be some more after that. But look forward to everybody coming out over the next couple of weeks. The shows start at seven until about 10 p.m. at Stagecoach Park. So looking forward to as many people coming out as possible.

City Manager Susan Sherman, anything further tonight?

Just one quick reminder that Fire Station No. 9 will have its grand opening on Friday at 3 o'clock, so hopefully that will be a lot of fun for everyone.

Great. The concert this Friday night at... The Mahaffey Stagecoach Park is also going to be a benefit for the Olathe Mayor's Children's Fund. So we will have the red buckets out there. So all the money we raise will go to support the basic needs of Olathe kids. So if you're there, hopefully you hear about it and you bring some change for the cause. So thank you all for joining us tonight. Have a great evening, and we are adjourned.