Derby council votes to exceed revenue-neutral rate, adopts $80.1 million 2026 budget and five-year CIP

The Derby City Council voted 6-0 Tuesday to adopt a resolution to exceed the state-calculated revenue-neutral property tax rate and to approve a $80,100,000 proposed 2026 operating budget and a 2026–2030 capital improvement plan. The council’s adopted levy for the 2026 budget is 44.998 mills, a decrease of 0.5 mills from the adopted 2025 levy, but the city said the change does not necessarily lower individual tax bills because assessed valuations have risen.

Finance Director Megan Pater explained the revenue-neutral process at the hearing. “The revenue neutral rate is the tax rate in mills that would generate the same property tax revenue in dollars as the previous tax year using the current assessed valuation,” Pater said, describing the state-mandated public hearing required when a city intends to exceed that rate.

That procedure drew public comment and sharply divided reactions. Bob Hole, a retired Air Force veteran, told the council, “You’re increasing it by $966,000. You’re taking 12% more of my money.” Pat Carney, who said she has lived in Derby 50 years, said she is “so freaking fed up with my property taxes being this high.” Both urged the council to limit tax increases and do more to shield fixed-income seniors.

Council members and staff framed the vote as a response to rising costs for personnel, infrastructure and long-delivery capital items. City Manager Kyle Mangus said Derby faces inflationary pressures and long lead times for equipment: “I bought a fire engine 13 years ago and it was $400,000. I think we just spent…$1.11 million. It was triple or quadruple what it was,” Mangus said, citing the higher procurement costs that drive the budget. The adopted budget includes a 2% cost-of-living adjustment for employees, a 3% merit pool, and funding for nine new full-time positions across police, fire, parks, utilities and senior services.

The budget and CIP list several major projects: phase 1 construction on the wastewater treatment plant, design and early work on a new water treatment plant west of town, Dukarski Park Phase 2 construction, Hyde Park Phase 1 (including eight lighted pickleball courts), North Woodlawn design and construction, and the North Rock Road segment between Freedom Road and 50th Street. Mangus said the water treatment plant is intended to supplement purchases from Wichita and to move Derby toward greater long-term water independence.

Officials stressed debt management and funding sources. The city’s 2026 debt position is projected at 15.96% of assessed valuation (below the city policy threshold of 20% and the state statutory limit of 30%); some large utility projects are bond-exempt. Staff cited healthy sales tax growth in recent years as a factor permitting a modest reduction in the mill levy while still funding capital needs.

Council members also debated broader state-level property tax structures. Council member Coleman noted long-term valuation increases and the gap between wage growth and tax growth: “Our budget from 2021 to now has increased over 30%,” Coleman said, and urged further state-level fixes to the revenue-neutral formula. Council President Nick Engel and others said the council had reviewed the budget across workshops and found no obvious places to cut without affecting services.

Votes at a glance: the council recorded several formal actions during the meeting. A resolution to levy a property tax rate exceeding the revenue-neutral rate for the 2026 proposed budget passed on a roll-call vote 6-0 (Truett, Veil, Engel, Coleman, Molt, Gould recorded as yes). Later the council adopted the 2026 operating budget, the 2026–2030 capital improvement plan and amendments to three 2025 funds (Derby different sales tax, water and wastewater) by roll-call vote 6-0 (Neal, Engel, Coleman, Molt, Gould, Truett yes). Separate votes during the meeting carried unanimously or by voice vote: approval of the consent agenda (with item 8.3, the North River Street closure, approved 5-0 with Council member Coleman abstaining), an ordinance levying special assessments (6-0), and authorization for the city manager to contract with NoWatt Construction for the North Interceptor force main (not to exceed $2,289,913.86) (6-0).

The budget takes effect for the 2026 fiscal year beginning Jan. 1; council members said staff will return with implementing ordinances, updated notices and any required amendments. Officials also urged residents who qualify for state property-tax relief programs to pursue those options; the city said it has public information about available state programs and a municipal relief program that to date has disbursed about $5,000–$10,000 to a small number of applicants.

The council’s action completes the legal steps required this summer: the city notified the county clerk of its intent to exceed the revenue-neutral rate, held the public hearing required by state law and adopted the necessary resolutions and the budget. The council and staff emphasized that some residents will still see tax increases because assessed valuations rose in 2025 even as the city lowered its mill levy.