Lenexa approves 2024 budget

Lenexa approves 2024 budget
Posted on 08/23/2023

A property tax rate decrease, funding for high-quality services and conservative financial strategy are among the highlights of the 2024 Budget passed by the Lenexa City Council.

The Council unanimously approved the 2024 Recommended Budget during a Special City Council meeting Aug. 22. You can view the full recommended budget here, or catch up on highlights from this video presentation by City Manager Beccy Yocham and Chief Financial Officer Nate Blum.

The $154.3 million budget sets the City’s mill levy at 27.372 mills – a 0.75 reduction in the City’s property tax rate. This is the sixth year in a row the City has lowered its mill levy. The budget also includes steady user fees.

While the mill levy decreased, it still exceeded the City’s revenue neutral rate – the mill levy needed to generate the same amount of property tax revenue as the prior year, using the current year’s assessed valuations. A 2021 state law requires taxing jurisdictions to pass a separate resolution if they intend to exceed to revenue neutral rate. The Council also approved this resolution at the Aug. 22 meeting.

Taxing jurisdictions commonly exceed the revenue neutral rate so they can balance maintenance and expansion of services with factors like inflation and growth. Lenexa’s 2024 budget funds strategic projects and high-quality services for the community. It adds 6.5 full-time equivalent employees to help address growth in both population and facilities - including new firefighters and additional lifeguards for an expanded Indian Trails Aquatic Center.

Sales and use tax growth, strong consumer demand for goods and services, assessed valuation increases and a hot labor market continue to provide steady sources of revenue for the City. But concerns like ongoing inflation, interest rate hikes, supply chain disruptions and a potential housing market contraction could threaten those revenue sources or increase the cost of providing services. The 2024 Budget conservatively estimates next year’s revenues and expenditures and maintains sufficient reserve funds to help protect the City from a potential recession, economic downturn and other financial pressures.

Members of the public were invited to learn more about the budget at an Aug. 17 open house. They also had the opportunity to give feedback on the budget and the City’s intent to exceed the revenue neutral rate at two public hearings before the Aug. 22 votes.

Now that the budget is approved, City leaders can turn their attention to planning for major capital projects. The Council will begin review of the 2024-2028 Capital Improvement Program (CIP) in early October. The CIP outlines a schedule, basic details and funding sources for capital projects over a five year period. It typically includes projects with a cost of at least $300,000 and a useful life of at least five years. The Recommended 2024-2028 CIP will be posted at Lenexa.com/CIP in October.

Budgeting strategy earns praise from credit agencies

The City of Lenexa strives each year to prepare a strategic and responsible budget and financial strategy. As a result of those efforts, Lenexa received the highest possible credit rating of AAA/Stable from Moody’s and Standard & Poor’s earlier this month.

“The Aaa issuer rating reflects a growing economy with a significant commercial presence as well as healthy resident income and property wealth ratios,” a press release from Moody’s said. “The rating also incorporates favorable financial performance with strong available fund balance and liquidity ratios...”

“The stable outlook reflects the expectation for continued economic growth driven by residential commercial development, as well as maintenance of healthy reserves supported by a strong management team that budgets conservatively.”

These high ratings allow the City to fund projects with lower interest rates, saving taxpayer dollars.

Published August 23, 2023