City's "strong cash position" noted in budget presentation

For the third year in a row, Holton’s proposed city budget for the next fiscal year will put the city’s property tax levy at the state-mandated “revenue neutral rate,” it has been reported.

The city’s proposed 2027 budget — a public hearing on which will be held at the start of the next Holton City Commission meeting, set for 6 p.m. Monday, Aug. 17 at Holton City Hall — includes a proposed property tax levy of 47.646 mills, which is equal to the Jackson County-assigned revenue neutral rate for the city.

That mill levy is expected to generate $1,538,292 in taxes in 2027 based on an assessed valuation of $32,286,115, an amount similar to the estimated $1,538,321 generated in taxes this year on a 49.989-mill levy and a $30,772,619 valuation.

The city is in a “strong cash position,” as Olathe-based financial auditor Mike Peroo told the city commission at its Monday, July 20 meeting, where commissioners and Peroo discussed the city’s budget for 2027.

The proposed mill levy decrease to 47.646 mills in 2027, the city’s assigned revenue neutral rate as calculated according to the city’s assessed valuation and the mill levy needed to produce the same amount of tax revenues generated during the previous year, will be discussed further at the Aug. 17 public hearing.

Peroo also noted that the city is taking steps to improve an already-strong cash position, including action taken in March to increase the city’s base electricity rate for the first time in 17 years, increasing the number of “days in cash” in the electric fund, while noting a similar increase in water rates is needed to ensure that the water fund stays in good shape.

Rather than focus on “days in cash” — a comparison of a fund’s cash balance to its daily operating expenses — in the city’s individual utility funds as in previous years, Peroo instead noted the “days in cash” position of the city’s main funds, noting that while the city’s general and business funds were below “days in cash” benchmarks, the city was still in good shape.

According to Peroo’s calculations, the city’s coffers have had about 8.1 percent cash growth on average over the last 10 years, above the annual rate of inflation, and at present, an overall 186 “days in cash” — anything above 90 days is considered strong, he said. The city also has about 2.36 times the amount of cash compared with total taxes coming in, he added.

Peroo also noted the city’s strong position on sales taxes, which he noted “helps offset some of the pressure for property taxes.” Sales taxes collected by the city have accounted for 44 percent of the growth in taxes since 2012, or an annual growth rate of about 9.7 percent.

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