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City of Topeka presents first-quarter financial update; officials flag special-highway and health-insurance pressures
Summary
City budget staff reported the first-quarter fiscal position, noting flat sales tax (timing issue), higher franchise fees, increased property tax receipts driven by property-value growth and a mill shift, and pressure in the special-highway and health insurance funds; city leaders were asked to monitor vacancy-credit outcomes and fund balances.
City finance staff presented the City of Topeka’s first-quarter financial report at the May 6 governing body meeting, summarizing revenue and expense trends and highlighting several funds that will require continued monitoring.
Josh McInerney, division director of budget and finance, told the governing body that the year-to-date sales-tax numbers were largely a timing artifact: "we collect two months behind," he said, which made a direct quarter-to-quarter comparison misleading. Franchise fees from utility companies were "coming in way higher" than budgeted, he reported.
On property taxes, McInerney said the city collected about $2 million more compared with the prior year because assessed values rose and the city captured appreciation without increasing the mill levy; the council also shifted 1 mill from the debt service fund into the general fund in the prior year, increasing general-fund receipts.
On expenses, personnel costs were higher year over year primarily because of new union contracts; the organization had built a vacancy credit of about $2.4 million into the budget and, after eight pay periods, McInerney said the city was on pace to slightly beat that credit by about $500,000. "If we don't meet it, that means we're gonna actually exceed the budget," he cautioned, urging careful monitoring of staffing changes.
Enterprise funds were meeting minimum fund-balance policies; the combined utilities days on cash exceeded the city’s minimum threshold, McInerney said. But he warned that the special-highway fund — which depends on gas tax revenue — is "stagnant" on revenue while costs are rising and may need either cuts or an infusion from another fund by 2026. He also flagged the health-insurance fund: claims have been high and "the amount of claims we're paying out versus the money we're paying into the fund is the expenses are exceeding the revenues."
McInerney summarized the city’s pension position in its annual report and noted a material net pension liability remains on the balance sheet but said the chance of the city paying the full liability in one lump sum was "pretty slim." He stressed the next material revenue checkpoints will come in July when additional months of sales and franchise taxes and most property tax receipts are reflected.
No formal action was required; the presentation concluded with council members asking for clarifying analyses and timing scenarios. McInerney and staff said they would provide further updates and answer detailed questions in follow-up briefings.
All quotes and figures above are drawn from the May 6 meeting transcript of the governing body.
