City of Topeka FY2027 Budget Work Session - January 28, 2026
City of Topeka FY2027 Budget Work Session - January 28, 2026
Mayor Duncan called the special budget work session to order at an unscheduled time, with seven council members present. The session was held to kick off the FY2027 proposed budget process, review FY2026 adopted expenses and revenues, discuss a high-level FY2027 forecast, and gather initial feedback on policy considerations from the governing body.
Discussion Items
- General Fund Overview: Josh McInarney, deputy director of budget and finance, presented that the FY2026 general fund budget of $133 million is balanced using built-up reserves. Recurring revenues are $6 million less than recurring expenses. The main revenue sources are sales tax, property tax, and franchise fees; 81% of expenses go to public safety personnel.
- Fund Balances and Structural Deficit: Post-COVID fund balances have declined. The general fund balance is projected to fall below the 15% policy threshold in FY2027 without structural changes. Other funds (special highway, health insurance, parking) also face deficits or require subsidization.
- Parking Fund: Recurring revenue does not cover expenses; options include rate increases or using non-parking revenue (e.g., property-tax-backed debt service fund) to cover bond payments.
- Special Highway Fund: State gas tax revenue insufficient to cover street operations; may require general fund or half-cent sales tax subsidies.
- Sales Tax Initiative Options: Staff proposed potential ballot measures: 0.1% for fire station replacement, 0.1% for affordable housing/homelessness, or 0.3% for general public safety. Each tenth of a percent generates ~$4 million annually. Councilmembers debated the need to first fix streets, finish the fire master plan, and demonstrate fiscal responsibility before asking voters.
- Early Retirement: Council consider an early retirement incentive; staff noted parameters need careful design to avoid backfilling positions and costly packages. Council requested data on eligible employees and potential savings.
- Permitting and Planning Fees: Currently run a $600,000 deficit; could be adjusted to revenue-neutral over 1-3 years, but significant increases may affect development.
- Union Contracts: Water/wastewater contracts up this year; police, fire, teamsters, and AFT contracts expire next year, affecting future budgets.
- Council Member Requests:
- Councilmember Kell: Provide descriptions and spending parameters for all funds, especially the opioid fund; improve website transparency for budget information.
- Councilmember Hiller: Urged a management review beyond budget, inventory of major street repairs, and completion of the fire master plan before spending. Opposed repurposing half-cent street sales tax for operations.
- Councilmember Bradbury: Requested list of vacant FTE positions (currently ~98 vacancies), and savings from delaying hires; suggested a public survey on priorities.
- Councilmember Banks: Asked for total impact of funds not covering expenses.
- Councilmember Hofer: Inquired about new electric vehicle fees and whether expiring tax exemptions (e.g., Mars) are factored into property tax projections (they are not).
Key Outcomes
- Staff will compile and provide requested data: fund descriptions, five-year cost increases by department, vacancy lists, street repair inventory, cash vs. bond modeling implications, and early retirement analysis.
- No formal votes were taken. The governing body directed staff to continue refining the FY2027 budget based on initial feedback, with a follow-up work session planned in approximately 30 days.
- The city manager emphasized the need for the council to make decisions on long-standing policy items (e.g., fire station plan) to free up budget assumptions.
Meeting Transcript
I will call this special meeting of the City of Topeka governing body for a budget work session to order. With that, if everyone would rise for the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands. One nation undervisible with liberty and if the clerk would call roll, please. Mayor Duncan. Here. Council members Hiller. Here. All Divia Aquala. Ortice here. Thanks. Here. Miller. Here. Bradbury. Here. And Hooper. Here. All right. We have seven presents. Alright. With that, I will turn it over to the city manager to begin this work session. Thank you, Mayor. As we began discussing towards the end of last year, I wanted to hold this budget work session to kick off our FY2027 proposed budget process. Before I turn this over to Josh McInarney, I deputy director of budget and finance. The purpose of this work session is to refresh the governing body of our FY26, adopted expenses and revenues, discuss a high-level FY2027 forecast, highlight some of the policy considerations, such as finalization of a fire station plan that we'll need guidance from the governing body as we craft the FY2027 proposed budget. We'll also lay out a budget calendar. And our hope is that today's discussion will lead to some initial feedback today and more feedback in another work session towards the end of next month. With that, I will turn this over to Josh to lead us to the discussion. Thanks, Inajor. Obviously, special budget work session. We'll talk about the budget tonight. Kind of the reason being is we don't want to put a budget to bed in September, then not talk about it for a couple months. So the purpose of the night is be proactive, tell the governing body what are some things, policy considerations that we're mulling over for the upcoming year, get various feedback on what what is a priority, what's not a priority, etc. And then just kind of a high level snapshot of where we are financially now. Full disclosure, preparing a 2027 budget in late 2025, it's early. So getting into it. Oh there we go. I didn't have it all on. Thank you. So just as a reminder, the 2026 budget was set balanced, but we we balanced it with bath past built-up reserves that we we garnered through 21, 22, and 2023. So just as a reminder, where do we spend money in our general fund and how does our general fund generate money? So our general fund generates money by three main ways. Sales tax, property, motor vehicle tax, and then franchise fees. Um and then we obviously transfer money in from various funds, and then we have our like we talked about two weeks ago, our fee scheduled, which is a small amount of money permitting licensing, things of that nature. But the main takeaway of how our general fund gets gets money are franchise fees, sales tax, and property tax. So where do what do we spend that incurring revenue source on? So main thing in the general fund is public safety, police and fire. Of that 133 million dollar general fund expense budget, 81 is million is just dedicated to uh public safety personnel salaries. Now salaries is in the form of health care, overtime, payroll taxes, um, any holiday pay that they may incur.
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