Holton Commission proposes revenue neutral budget

Holton’s proposed city budget for 2026 will put the city’s property tax levy at the state-mandated “revenue neutral rate” for the second year in a row, and the city remains in a good financial state, even though two of the city’s utility funds could use a little help.

That’s the view of Olathe-based financial auditor Mike Peroo, who contracts with the city to craft its annual budget and review its finances.

During the Holton City Commission’s regular meeting on Monday evening, Peroo met with commissioners to discuss the city’s 2026 budget, which as proposed will only generate about $36 in additional city taxes over last year but will bring the property tax levy from 2025’s 51.189 mills down to 50.035 mills.

That’s the city’s assigned revenue neutral rate for 2026, 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. The city’s assessed valuation for 2026 is up $693,318 from 2024, when the valuation was listed at $30,051,021, to its 2026 valuation of $30,744,339.

Commissioners set a public hearing on the 2026 budget for 6 p.m. Monday, Aug. 18 at Holton City Hall. The city’s proposed 2025 budget is printed on Page 13 of this edition.

Peroo also congratulated commissioners on their continued good management of city funds, noting that the city’s general fund and its water fund exceeded benchmarks for “days in cash” — a comparison of a fund’s cash balance to its daily operating expenses — but noted some financial growth is needed in the city’s electric and sewer funds.

In the case of the electric fund, which Peroo said currently has 70 “days in cash” — well below the benchmark of 180 days, he said — a change in the city’s base electric rate, which was discussed earlier in the meeting, could be a big help for the fund. Commissioners on Monday approved a Kansas Municipal Energy Agency-recommended electric rate study (see related story).

As for the sewer fund — which currently has 21 “days in cash,” also below the 180-day benchmark — that fund is likely to increase when the city pays off about $600,000 remaining in indebtedness on a Kansas Department of Health and Environment sewer loan set to mature in 2026. Once that debt is paid off, the sewer fund could benefit from about $400,000 annually that won’t have to be spent on debt service.

On the positive side, Peroo noted that the city will have 221 “days in cash” in its general fund, above last year’s 159 “days in cash” and the 45-day benchmark, and the water fund will have 246 “days in cash,” above last year’s 219 and the 180-day benchmark, going into 2026.

Based on last year’s valuation, the 51.189-mill levy generated $1,538,285 in tax revenue, while the proposed 2026 levy of 50.035 mills is expected to generate $1,538,321, an increase of about 0.002 percent.

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