Mexico council adopts $25 million operating budget for fiscal 2025-26, funds gap with reserves and grants

The Mexico City Council adopted the city's fiscal year 2025-26 budget after a public hearing, approving an operating plan that estimates a little more than $25,000,000 in expenditures and $21,800,000 in revenues for the year beginning Oct. 1, 2025. Mr. Schlegel, city manager, presented the budget and described it as "a balanced budget" and "a reasonable spending plan, while strategically preparing for future opportunities and challenges."

The budget document lays out capital and operating spending across multiple funds and programs and shows expenditures exceeding revenues by about $3,200,000; the shortfall will be covered from project reserves, unreserved surpluses from prior years, grants and American Rescue Plan funds. The plan includes funding for streets, stormwater improvements, wastewater projects, downtown revitalization efforts, the demolition of the former Audrain Community Hospital building and planning for a potential new hospital. Mr. Schlegel told the council that Boone Health and a county healthcare committee have an exclusive letter of intent to explore building a new critical access hospital in Mexico and that the investigation and potential build could take up to three years.

The budget keeps the overall property tax rate at 0.7591 per $100 of assessed valuation, with the general fund portion at 45.91 cents, parks and recreation at 10 cents and public health at 20 cents. Total assessed valuation is reported at a little more than $187,000,000, up from about $173,000,000 the prior year, a net assessed-value increase of roughly $13,500,000. The budget also assumes sales and gross receipts taxes roughly comparable to the prior year and forecasts a small decline in use tax receipts.

Major capital and program items shown in the budget include computer network upgrades at city hall; body cameras and patrol vehicles for public safety; GIS aerial photography and stormwater mapping; a new street sweeper paid from the street maintenance fund; multiple stormwater grants from the Missouri Department of Natural Resources; and a transfer to support the airport and the aquatic center. The wastewater operations fund shows estimated revenues of $3,586,000 and expenditures of $3,064,000 with a planned interfund transfer of $748,000 to the wastewater debt service fund and $80,000 in project reserves; the budget reflects a 2% wastewater rate increase. The sanitation fund anticipates $880,000 in revenues and $858,000 in expenditures and includes a $150,000 transfer to the general fund; a 4.1% refuse rate adjustment is anticipated under the residential refuse collection contract.

The personnel budget holds authorized full-time staffing at 84 positions and provides a 1% cost-of-living adjustment for all positions, a step increase for hourly employees and a 3% increase for exempt employees. Mr. Schlegel flagged state-level changes as a pressure: the state of Missouri extended minimum wage protections to public employees and will set a $15 hourly minimum effective Jan. 1, 2026, which the presentation said increases pressure on the city's payroll budget.

Council members moved to read and pass the budget ordinance, Bill No. 2025-58, and the ordinance passed unanimously. The council's approval appropriates funds as allocated in the ordinance and authorizes expenditures by the city manager and other officials for the stated purposes.

The council's staff presentation included detailed line items and grant awards anticipated during the fiscal year: multiple Missouri Department of Natural Resources stormwater grants (including awards in the hundreds of thousands and multi-million-dollar projects), a Missouri Department of Transportation airport runway repair reimbursement, and a TAP grant for sidewalk improvements. The council packet and presentation listed specific capital-dollar amounts for many projects, for example a Smiley Lane extension ($347,720), pavement maintenance ($650,000), and downtown street lighting rewiring ($30,000 set-aside).

The city manager closed the hearing by thanking department directors and staff and by saying he hoped the budget would be "well received by the council and the citizens of Mexico." The council then voted to adopt the budget ordinance on first reading and passage.