Holton's 2023 budget will generate more on unchanged mill levy

The City of Holton will collect $76,510 more in local taxes with its new proposed budget for 2023 while keeping its overall mill levy the same, the Holton City Commission learned this week.

During the commission’s regular meeting on Monday, Overland Park-based financial auditor Mike Peroo met with commissioners to report on the city’s proposed budget for 2023, which would keep the ad valorem property tax levy unchanged from the 2022 budget at 59.117 mills. The proposed mill levy is more than the “revenue neutral rate” of 55.797 mills, a number determined based on the amount of property tax revenue expected to be generated in 2022.

Although the mill levy will not change, it is expected to generate more in 2023 based on a $1.4-million increase in the city’s assessed valuation. In 2022, the city’s valuation was listed at $23,667,497, while in 2023, the valuation was listed at $25,075,740.

Based on the 2022 valuation, the 59.117-mill levy was expected to generate $1,405,893. Based on the 2023 valuation, the same mill levy is expected to generate $1,482,403 — an increase of $76,510, according to information provided by Peroo.

Peroo’s annual report to the commission also included comments on the city’s utility funds — particularly how the city’s cash position is affected by each utility department’s expenditures. The city has “an excellent cash position” at 271 “days in cash,” he said, noting that cities should have at least 90 days in cash to be in good shape.

The “days in cash” in the city’s water fund has been increasing over time due to good spending habits, Peroo said, noting that fund’s 308 days in cash is well over the 180 needed for the fund to be in good shape.

But the city’s electric fund, he noted, was down to nine days in cash, and the sewer fund was down to zero, prompting him to suggest the city review its utility rates. The city has not changed its electric rate since 2009, and water and sewer rates have been unchanged since 2013, it was noted.

On the bright side, Peroo told commissioners, the city’s only outstanding debt — $1,735,393 on a Kansas Department of Health and Environment sewer loan set to mature in 2026 — was a testament to the city’s willingness to cut spending in order to reduce its debts and keep property taxes down.

Commissioners scheduled public hearings on the budget and their intent to exceed the revenue neutral rate with the budget for 7 p.m. Tuesday, Sept. 6, the date of the commission’s first regular September meeting due to the regular meeting date falling on the Labor Day holiday.

For more on this and other stories, please log in to your holtonrecorder.net account and select Aug. 3, 2022 under “E-Editions.”