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.

Um, and then obviously the next portion of that is just non-public safety personnel, um, and then we obviously have some large charges such as electricity bills, um, our Shawnee County inmate care charges, insurance various insurance charges.

Um thank you high level we set the 2026 budget unbalanced.

I don't know, we set it balanced, but we had to have an influx of reserve to make it balanced.

So we did not have enough recurring revenues currently structured to cover those recurring expenses.

So obviously a lot of numbers on this slide.

But I thought this was a good illustration of how post-COVID we had a rise of revenue in current cash balance and in the various funds versus how we've been spending that down in 25 and then 26, and then without a structural exchange in 27.

So just a couple of highlights.

General fund is obviously what was on the previous slide.

So we had a high fund balance in 2023.

We transferred about $2 million of that to projects at the end of 20 or at the end of 2024, and then in 2025 and 2026, we're we plugged the operating budget with built built-up fund balance.