Commission signals intent to exceed revenue‑neutral rate; posts 2‑mill increase and sets Sept. 16 public hearing

The Manhattan City Commission voted 4‑1 on July 15 to publish the city’s intent to exceed the revenue‑neutral property‑tax rate by 2 mills and set a public hearing on the matter for Sept. 16. The motion passed with Commissioner Mata dissenting.

City finance staff presented the fiscal rationale: staff recommended a cap of 56.109 mills to preserve flexibility while the commission completes budget deliberations. The staff presentation explained that the primary driver of the need to exceed the revenue‑neutral rate is the Riley County Police Department (RCPD) requirement combined with an increase in property‑tax delinquency rates used by the county in its calculations. Danielle (city finance staff) said the city’s recommendation included a delinquency allowance for RCPD based on recent historic delinquencies and staff’s practice of budgeting for the potential shortfall; she said, “it is our recommendation to include that RCPD delinquency number.”

Staff explained that the five‑year average property‑tax delinquency has been lower (approximately 1.83%), but 2023 and 2024 showed higher delinquency (2.34% and 2.67% respectively). Because the city is statutorily obligated to pay the RCPD requirement even if taxable collections fall short, staff said the recommendation to publish a rate above revenue neutral is intended to reduce the chance the city would need to transfer general‑fund reserves midyear to cover RCPD costs; staff suggested building a small RCPD fund balance going forward if delinquent collections are later recovered.

During deliberations commissioners described the tradeoffs between employee compensation, deferred vehicle and building maintenance, and holding reserves. Staff presented three scenarios for discussion: (a) roughly a 1.134‑mill increase (minimal increases, limited vehicle/building replacement), (b) about a 2‑mill increase (some flexibility for employee cost‑of‑living adjustments), and (c) about a 3‑mill increase (3% COLA plus funding for prioritized deferred maintenance and equipment replacement). After discussion the commission chose to publish an intent to exceed revenue neutral by 2 mills to allow further budget negotiations. Mayor Karen McCullough and three commissioners voted yes; Commissioner Mata voted no.

Public commenters reiterated concerns about timing and cumulative tax increases. Andrew Veil Minto said such decisions should happen earlier in the process and urged the commission to prioritize core services and debt reduction. Commissioners and staff agreed to continue budget work sessions, to present clarifying slides tying revenue sources to fund expenditures, and to provide a clearer breakdown of residential versus commercial tax impacts prior to final adoption.

Next steps: the commission set the public hearing date for Sept. 16 (the date when the budget and the final rate will be considered under the city’s single‑reading ordinance change). Staff will update the public materials to show the scenarios and provide additional details on how delinquency and motor‑vehicle tax changes affect the mill levy.