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Olathe council adopts 2026 budget and five-year CIP; council shifts debt mills to general fund and raises resident utility discounts
Summary
City Council adopted the 2026 annual budget and the 2026–2030 Capital Improvement Plan on Sept. 16. The budget keeps the overall mill levy stable, shifts debt-dedicated mills into the general fund to improve flexibility, funds a $250,000 property-tax rebate program and expands utility discounts for low-income residents; the budget ordinance pas
The Olathe City Council adopted the 2026 annual budget, the five-year Capital Improvement Plan (CIP) and an updated schedule of city fees at its Sept. 16 meeting.
Budget manager Clara Bernauer presented the final budget proposal, describing how staff balanced slowing sales-tax growth, inflationary pressures and rising personnel costs to present a balanced plan. The 2026 proposed budget the council adopted is roughly $626–627 million across all funds, of which the general fund operating budget is approximately $227 million. Staff proposed leaving the overall mill levy unchanged at 23.317 mills while shifting mills that had been dedicated to the debt service fund into the general fund and using transfers to meet debt-service targets; staff said the change improves flexibility while keeping the total levy stable.
Bernauer emphasized that property tax bills will vary based on county appraisals: the city’s mill rate did not rise, but average home assessments pushed the average Olathe homeowner’s city portion higher by about $7.42 per month. The proposed 2026 budget includes a $250,000 property-tax rebate program for low-income residents and veterans; Bernauer said the city had already awarded 431 rebates in 2025 for a total of about $232,000 and that roughly half of awards had gone to veterans.
On utilities, the budget includes proposed rate adjustments; combined, the average monthly residential utility bill (water, sewer, stormwater and solid waste) would increase by about $7.36 per month to an average of about $135. Bernauer noted the city expanded its water-and-sewer utility discount from $4 per month to $12 per month per utility (a combined $24 monthly discount) and broadened eligibility to households up to 80% of area median income with no age requirement.
The council reviewed the 2026–2030 CIP, which staff described as scaled back from a particularly large prior CIP cycle but still notable: staff presented a five-year CIP totaling approximately $741 million with major projects including I-35/Santa Fe improvements, a Nineteenth Street extension, and a West Cedar Creek sewer interceptor, together with continuing street preservation and reconstruction programs. Staff said outside funding and grants helped underwrite about 19% of the CIP.
Council discussion touched on tax burdens for seniors, the idea of alternative, constrained “budget-by-choice” scenarios to show trade-offs, and avenues for state-level or local programs to provide property-tax relief for older residents. Several council members thanked staff for a detailed and difficult budget process.
Roll-call votes: The budget ordinance (Ordinance 25-33) passed 5-2, with Councilmembers Gilmore and Essex recorded as voting no. The CIP resolution (Resolution 25-10-82) and the fees-and-charges resolution (Resolution 25-10-83) each passed unanimously, 7-0.
What’s next: Staff will implement approved FY2026 operating budgets, continue CIP planning and proceed with the planned rate changes and the expanded utility discount and property-tax rebate programs. Councilmembers said they plan to continue public outreach and to discuss longer-term options for senior property-tax relief.
