Manhattan staff outline 2026 recommended budget; commissioners debate mill-levy scenarios, COLA and use of reserves

Manhattan city staff presented the recommended 2026 budget at a July 8 work session, telling the City Commission the proposed total expenditures across all funds are $174,698,648 against projected revenues of $166,957,405 and outlining three mill-levy scenarios that trade off employee cost-of-living adjustments, equipment and building maintenance, and the use of fund balances.

The presentation laid out the budget calendar and outreach schedule and summarized key assumptions and changes. Staff said the recommendation assumes a 3% increase in water and wastewater rates, a 6% increase in stormwater rates, and a conservative 1.5% growth in sales tax revenue. Staff also described projected property-tax growth of about $1.4 million from assessed valuation increases plus an additional $847,000 tied to a hypothetical 1.134-mill increase, producing roughly $2.5 million in additional property-tax revenue under the assumptions shown.

Danielle, the presenting city staff member, said the recommended budget reflects an intentional use of special-revenue fund balances for projects and identified two debt-service payments coming online in 2026 for a joint maintenance facility and North Campus Corridor Phase 9 that help push debt-service spending to about $22.4 million. The presentation noted utilities’ combined actual expenditures were approximately $31.2 million in 2024 and are projected near $40 million in 2026. “We are projecting a 3%…