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Topeka reports stronger-than-expected 2025 revenues, warns reserves will be used to balance 2026 budget
Summary
Deputy finance director Josh McEnany told the Topeka governing body that sales tax and delinquent collections exceeded estimates in 2025, but the city drew down about $4 million in reserves and plans to use up to $7.3 million more in 2026 to balance the budget.
Deputy Finance Director Josh McEnany told the Topeka governing body on March 17 that the city’s preliminary 2025 financial results came in better than expected but relied on reserves.
McEnany said sales tax, delinquent tax collections and some franchise fees exceeded what the city budgeted when it adopted the 2025 budget. “The main takeaway is we ended the year better than we expected,” he said, noting one-time transfers and capitalized interest also boosted the general fund.
On reserves, McEnany said the city entered 2024 with roughly $37,000,000 in the general-fund balance, spent down about $4,000,000 in 2025 and stood at roughly $33,000,000 at the start of 2026. He said the adopted 2026 budget uses reserves — up to $7,300,000 — to balance that year’s plan but that the full amount may not be required.
McEnany flagged several other items council members will need to monitor: encumbrances in the JADO sales-tax fund tied to projects such as Huntoon and Harrison-to-Gage that exceed annual revenue; a parking fund loss that narrowed from about $500,000 to roughly $200,000 due to rate changes and debt-service timing; and surpluses in utilities driven in part by unfilled positions and investment income. He also noted the city transferred $2,000,000 into the health-insurance fund for 2026 after a roughly $2.5 million drawdown the prior year.
Several council members pressed staff for clarifications on how the budgeted variances translate to actual year-end balances, and Council Member Valdivia Alcala asked for an update on the city’s search for a permanent finance director. City Manager Dr. Robert Imprez said the finance director position is posted and the city may consider a recruiting firm if a qualified candidate does not appear in the initial pool.
Why it matters: The presentation shows the city ended 2025 in better financial shape than officials feared but confirms the council is using reserves to smooth near-term expenses. Staff warned that continuing to spend reserves without revenue increases could require future cuts or new revenue options.
What’s next: Staff will continue budget work through the spring and summer; councilors flagged debt-service, the JADO fund encumbrances, and the pending finance-director recruitment as items for follow-up.
