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Finance director: Salina general fund buoyed by investment income; staff told to hold 2026 budgets flat
Summary
Salina Director of Finance Debbie Papp presented non‑audited 2024 financials and 2025 projections, reporting a $33.7 million general fund balance driven largely by investment income and asking departments to limit 2026 budget increases.
Debbie Papp, Salina’s director of finance, told the City Commission on April 28 that the city closed 2024 with an unusually large general fund balance — roughly $33.7 million — driven in large part by investment income from higher interest rates and steady revenues across other sources.
Papp described the general fund revenue mix and 2024 results: roughly 32% of general fund revenue comes from sales and use tax, 21% from property tax, and about 10% from investment income; EMS revenues make up about 8%. She said sales tax collections flattened in 2024 (sales tax was roughly $17.22 million in 2024 versus $17.26 million in 2023) and that the city budgeted optimistically for 2025 but actual sales tax growth has been uneven since COVID.
The finance director said 2024 exceeded the 2024 budget on revenue by roughly $4 million largely because investment income was many millions higher than budgeted; Papp attributed that to higher market rates and the city’s expanded investment powers and the results of a banking RFP. She noted the city’s current overnight sweep rate was about 4.15% at the time of the presentation, and the city has a laddered portfolio with CDs and U.S. Treasury notes of varying maturities.
Papp reviewed individual fund results, saying sales tax capital showed a net loss for 2024 (about $2.4 million) because some capital spending was deferred and not all budgeted projects were completed. She described the water/wastewater fund showing a large net loss in 2024 tied to debt payments and major plant projects, consistent with the prior rate studies that planned for multi‑year spending on capital projects.
Looking ahead to 2026, Papp said preliminary assumptions will treat general fund revenue growth conservatively: planners are using about a 2% revenue increase over 2024 actuals and have asked departments to hold budgets flat relative to 2025. She said personnel costs may rise 4–5% in aggregate for 2026 and reminded the commission of a previously planned $5 million use of fund balance in the 2025 budget. Papp said departments should expect targeted conversations during the 2026 budget process about possible spend‑down of fund balance for strategic investments.
Commissioners asked several technical questions during the presentation about the split of the city’s 1.25% sales tax (Papp said 0.75% goes to the general fund and 0.5% to special sales tax capital), transient guest tax allocations to tourism and debt, and whether incremental transient guest tax collections are tracked separately for long‑term turf replacement and park improvements (Papp said those flows are in the tourism/transient guest tax fund and she will verify historical practice for earmarking any excess to turf replacement).
Papp closed by outlining the budget schedule and saying the staff intends to present a conservative, balanced budget for 2026 that holds departmental budgets largely flat while monitoring sales tax and investment revenue trends.
