Manhattan City Commission Special Meeting – July 14, 2026: Budget, Tax Resolution, and Sales Tax Renewal Discussions
Manhattan City Commission Special Meeting – July 14, 2026: Budget, Tax Resolution, and Sales Tax Renewal Discussions
The Manhattan City Commission held a special meeting on July 14, 2026, to address the 2027 budget, a revised revenue neutral rate resolution, a proposed workforce housing sales tax request for a new subdivision, and a detailed discussion on debt mill levy and sales tax renewal options. All five commissioners were present. The meeting included public comment on one item and multiple work session presentations.
Consent Calendar
- No consent calendar items were listed.
Public Comments & Testimony
- Gary Oles (3308 Frontier Circle) commented on the resolution regarding exceeding the revenue neutral rate. He noted that Junction City had previously published a notice of intent to exceed the rate but later canceled the public hearing after achieving revenue neutral, stating it was statutorily allowed. He provided this information for the commission's consideration.
- No public comments were made on the workforce housing sales tax item or the debt and sales tax renewal discussions.
Discussion Items
- Revised Revenue Neutral Rate Resolution (Resolution 0714268): Due to a revised assessed valuation increase from 6.7% to 4.4%, the revenue neutral rate changed from 51.056 to 52.210. The commission repealed the previous resolution (070726b) and adopted a new resolution stating the intent to exceed the revenue neutral rate but not exceed 54.506 mills, with a public hearing set for September 15, 2026, at 6:00 p.m. at City Hall. Commissioner Fox expressed support, noting he had identified modifications to reach revenue neutral if franchise fees were increased from 4% to 6%. The vote was 3-2 in favor (Mayor Chak, Commissioners Fox and McCullough yes; Commissioners Morrison and Von Lintel no).
- Workforce Housing Sales Tax for House End Park Subdivision: Developers Craig and Lindsay Laupe (New Place Development/Gray Lane Homes) presented a proposal for a greenfield subdivision with 36 lots, including 16 cottage court lots (two-bedroom, two-bathroom, 972–1,150 sq. ft., priced at $265,000–$275,000, or 90% AMI) and 20 single-family home lots (priced at $300,000+, within 110–120% AMI). They requested feedback on using workforce housing sales tax funds (estimated $40,000 per cottage court lot, total $640,000) to pay special assessments for future homeowners, reducing monthly payments. Three scenarios were presented: Scenario A (no workforce housing tax, with benefit district) resulted in a monthly payment of $2,279.43; Scenario B (no benefit district) raised the sale price to $310,000 with a monthly payment of $2,429.16; Scenario C (with workforce housing tax and benefit district) lowered the monthly payment to $2,112.43. Commissioners expressed general support but raised concerns about density, parking, and zoning. Commissioner Fox suggested staggering special assessments. Commissioner Morrison recommended exploring tax credits through the Manhattan Area Housing Partnership. Staff noted that the workforce housing sales tax fund balance exceeds $6 million. The commission directed the developers to confer with staff and return with a formal proposal.
- Debt Mill Levy and Sales Tax Renewal: City Manager Danielle Doolin and Deputy City Manager Jason Hildreth presented updated debt analysis. Key statistics: The annual debt payment is over $22.7 million, with $334 million total debt service (including $110 million in temporary notes). The bond and interest fund currently has 0.66 mills supporting it, but without additional revenue the fund would run out by 2031. The recommended budget mill levy of 54.506 would generate 3.799 mills for the bond and interest fund, pushing the deficit to 2033. Commissioner Fox proposed four adjustments to reach a mill levy of 52.207: (1) increase franchise fee revenue from $4 million to $4.6 million, (2) reduce the general fund cash reserve increase from $2.5 million to $2 million, (3) increase bond and interest fund contribution by $2 million, and (4) halve the library's requested increase to $130,000. The commission discussed the importance of cash reserves, IT costs, and the need for a stable revenue stream. For the sales tax renewal, three scenarios were presented: a half-cent, three-quarter cent, and one-cent increase. Commissioners expressed support for a three-quarter cent to 0.8 cent increase, with priorities for streets ($6–8 million annually), debt service ($3 million), fire training facility, and deferred maintenance. Commissioner Morrison opposed funding for Move MHK projects. Staff will prepare ballot language for the August 11 work session, with a required action on August 18 to place the question on the November ballot.
Key Outcomes
- Resolution 0714268 passed 3-2, repealing the previous resolution and setting the public hearing for September 15, 2026, at 6:00 p.m. on the intent to exceed the revenue neutral rate.
- The commission gave positive feedback on the workforce housing sales tax request for House End Park, directing developers to work with staff on a formal proposal.
- Direction was given on the sales tax renewal: a three-quarter cent to 0.8 cent increase, with allocations for streets, debt service, fire training facility, and deferred maintenance. Ballot language will be drafted for the August 11 work session.
- The next budget work session is scheduled for August 11, 2026, with final budget adoption on September 15, 2026.
Meeting Transcript
Good evening and welcome to the uh July fourteenth, twenty twenty six meeting of the Manhattan City Commission. We are having a special meeting this evening. Uh Chelsea, will you please call the roll? Mayor Adam Chak. Here. Commissioner McCullough? Yes. Commissioner Fox. Here. Commissioner Morrison. Here. Commissioner Von Lintel. Here. Mayor, we have five commissioners present. The quorum of three is met. Thank you. Will you rise and join me in the Pledge of Allegiance? I pledge of allegiance through the flag of the United States of America. And to the Republic for which it stands. So instead of being about a 6.7% increase, uh the increase in assessed valuation is now 4.4 percent. Uh what that does to our revenue neutral rate is instead of being 51.056, our new revenue neutral rate is 52.210. So we need to um like the mayor read, we need to repeal the resolution we passed last week and we need to um adopt this revised resolution that would say that we plan to um exceed the 52.210, uh, but we will not exceed 54.506. Um staff has prepared uh those different scenarios that you all charged us with, however, those numbers look very different just because of the difference in assessed valuation, and we will be going through those after you have your first work session item. Um happy to answer any questions you all may have. Okay, doesn't look any better, does it? Uh it did not make it look better, Commissioner Morrison. It it definitely uh changed uh the budgeting approach that um staff had and that recommendation that we had to um take advantage of the savings that uh we saw with the Riley County Police Department and that increase in assessed valuation and plugging those funds into uh any of those additional revenues into our bond and interest funds. So very similar conversation, um, just a continuation, but uh we will um dive into that a little bit deeper later uh at this meeting, looking at those debt numbers and what we need to do as far as stabilizing that bond and interest fund uh with mills and with sales tax. So I'll go ahead and make the comment now that uh I've discussed with you. I've been through this 85 to 90 pages of of proposed budget, and I've I've come up with a couple of modifications that in my mind would get us down to that revenue neutral mill levy. However, that is subject to uh increasing the franchise fees that we have talked about in past meetings from four percent to six percent. Now we have not agreed to do that yet officially, so I don't really want to uh go out on a limb and you know bet the farm that we're going to approve those sometime down the road. So uh I'm I'm gonna be supporting the resolution tonight, but knowing that if once we approve those, I I have a budget that gets us actually a little less than 52.21. So uh just a couple of minor changes. Appreciate that uh Commissioner Fox, and we can certainly um we have additional analysis to provide you this evening, additional conversations to have with you all this evening, and we have another work session um scheduled for August 11th to continue uh working on these budget numbers and continue getting additional information for you all to make decisions uh when you finally adopt on um September 15th. Still a lot more information and conversations to be had. Uh one thing I was looking at was the eco devo 4.6 million. Um so what I'm wondering is like what's staff's recommendation for using that money and why can't we use it for LeBond and interest fund in 2027? Sure. I think that is a really good conversation that we can follow up on, but does not necessarily relate to the resolution that is in front of you right now. Um and after we pass this resolution, I will go back um to um my my desk over here, and like I said, we have a lot of additional information to share with you this evening, and I think that's a good conversation point um for our second discussion item tonight. I would just add to that Danielle, we um we all have a number of things we'd like to bring up, and I think that's for item three on our agenda tonight. And um, I would just like to move that we approve resolution 0714268, and um to um regarding the city commission's intent to levy a property tax exceeding the revenue neutral rate and setting the public hearing on September 15th at 6 o'clock at the city hall and repealing resolution number 070726b. And then we could get started from scratch on the on the budget. Thank you. Do we have a second on Karen's motion? Second. Oh thank you. Pardon me before we vote, the if we could request public comments. Yes.
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