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Valley Center council backs Option 4 to proceed with 2026 budget process
Summary
The Valley Center City Council voted to approve “Option 4” as the path forward for the 2026 budget process, keeping the budget figures as previously presented and scheduling the required public hearings later this year.
The Valley Center City Council on a voice vote approved “Option 4” as the city’s course for the 2026 budget process, asking staff to proceed with required public notices and hearings.
City staff presented four ways to incorporate a previously discussed 1.2 mills into the 2026 budget. The options were: (1) add 1.2 mills to bond and interest; (2) add 1.2 mills to employee benefits to replenish reserves; (3) split the increase between bond/interest and benefits; or (4) keep the budget “exactly as it was” and proceed without adding the 1.2 mills. Council approved Option 4 to proceed with the budget as previously presented.
Why it matters: councilors and staff framed the decision as a near-term choice that affects reserve levels and how the city manages an expected increase in bond and interest payments beginning in 2027 as several GEO bonds mature. Staff also said state deadlines require posting a budget summary and filing documents in the coming weeks, and a revenue-neutral-rate hearing is scheduled for Sept. 2 followed by the public hearing and adoption process.
Details presented at the meeting: staff said the city’s 2026 revenue projection without the 1.2 mills left roughly $573,000 in reserves in the bond and interest fund; adding 1.2 mills would raise that reserve closer to $678,000, according to the materials shown. On employee benefits, staff said that reimbursements received since the prior meeting improved the projected 2025 position from a larger shortfall to a projected deficit of about $174,000 in the trending column; staff also noted the employee-benefits account is volatile because stop-loss reimbursements and annual claims can change through the year.
Staff emphasized the timing constraints: the city must post a budget summary to the state and complete a multi‑page spreadsheet; staff asked council for a consensus among the four options so staff could complete the required filings before the next deadlines.
Council discussion and context: several council members said they were comfortable moving forward with Option 4 after hearing the presentation and follow-up explanations. Council members and staff discussed the tradeoffs between restoring reserves now and holding the mill levy steady, and several councilors said they preferred avoiding a temporary mill reduction that could lead to a sharp increase later. Council members also raised concerns about a possible state cap on valuation growth in Topeka and the implications for local revenues; staff said the city’s financial scenarios were modeled at several valuation-growth rates (4%, 6%, 8%, 10%) to test sensitivity.
Action: A motion to approve Option 4 to proceed with the 2026 budget process passed by voice vote (motion carried). The motion authorized staff to proceed with the filings, schedule the revenue-neutral-rate hearing on Sept. 2, and prepare the public hearing and final adoption steps required by state law.
What happens next: staff will post the required budget summary to the state, publish the revenue-neutral-rate notice and hold the hearings noted above before final adoption.
