Lenexa staff proposes 0.75-mill rollback for FY26; council hears sales-tax, debt and public comments

City finance staff presented an update on the recommended fiscal year 2026 budget, proposing an additional quarter-mill rollback that, combined with earlier reductions, would result in a total 0.75-mill rollback for 2026 and place the recommended mill levy at 26.209 mills.

Finance staff noted a history of mill-levy reductions since 2019 and said one mill is approximately $1,890,000 in revenue for the city. Staff described several revenue and expenditure drivers behind the rollback: personnel cost savings from an adopted compensation adjustment (staff estimated savings equivalent to about 0.25 mills), three abated properties returning to the tax rolls that are estimated to generate about $450,000 for the city, and conservative revenue assumptions for sales and use taxes.

Key budget figures and assumptions presented by finance staff included: an estimated property-tax revenue of about $49,500,000 for 2026 (roughly a 4.2% increase over last year after new growth), $40,900,000 allocated to the general fund and $8,600,000 to the debt-service fund, and a personnel-services increase of just over 4% (including a 6% compensation pool for next year). Staff said they estimate a 3% vacancy rate in several large departments (police, fire, parks, municipal services and community development) that produces about $1,700,000 in estimated vacancy savings.

Staff stressed their conservative approach to sales-tax forecasting. The city’s dedicated 3.08-cent sales tax is restricted to parks and pavement and is treated as a pass-through for those projects; the city also receives an annual share (about $2,000,000) of a countywide sales-tax that is sensitive to the city’s share of county property taxes. Finance staff cautioned that a county sales-tax renewal (moved by litigation to a future date) and state legislative action could affect revenues. Staff said sales-tax projections will be revisited before budget adoption and again in March–April 2026, and the budget could be adjusted up to the adoption date (public hearing scheduled for Sept. 2 per staff presentation).

Councilmembers asked clarifying questions about the vacancy-rate estimate, timing for sales-tax updates, impacts of tariffs and federal tax changes, and whether properties returning from abatements are a recurring source of revenue. Staff said abatement returns will likely increase in coming years as older abatements expire. Staff also explained that conservative sales-tax estimates are being used so pavement contracts and other capital plans are not overcommitted.

During the public-comment period on the budget, resident John Giesler asked about debt mills and whether mills dedicated to debt service would disappear if debt is paid early; the council deferred detailed answers and said staff would follow up via email or on the city website. Gaylene Van Horn raised multiple budget concerns including whether the city explored co-location with the county MedAct facility, operational travel-time baselines for emergency response in Ward 3, the status of a $400,000 study and the potential cost of a new fire station; she urged transparency and asked about alternatives to expensive infrastructure at the 80th and Monrovia property.

No budget adoption vote was recorded in the transcript. Staff recommended the additional quarter-mill rollback be included in the proposed rate and planned to return with the formal public hearing and adoption process.