Iola City Council members will be tasked with approving the city’s 2026 budget when they gather for their regular meeting Monday.
A public hearing will precede the budget adoption process to give residents an opportunity to voice questions or comments about the $35 million spending plan, an increase of about $1 million, or around 3%, from this year’s budget.
If approved, the spending plan would be supported in part with an ad valorem tax levy of 58.8 mills, an increase of about 0.7 mills from 2025.
That means the owner of a $100,000 home would spend about $677 to support the city’s budget next year, an increase of about $8.
(Those figures do not account for property taxes to support the other entities, such as the county, Allen Community College or USD 257.)
FOR GENERATIONS, the city’s general fund budget has been supplemented with transfers from Iola’s utility funds, primarily as a means to keep property taxes in check.
This year is no different, with more than $3.8 million, or roughly 36% of the proposed $10.6 million general fund, coming from the electric, gas, wastewater and sanitation funds. And if there’s enough money left at the end of the year, some will be taken from the water fund as well.
Iola City Administrator Matt Rehder detailed why the utility reserves are such a vital component of the budgeting process.
Without them, it would require a property tax levy of about 153 mills for the general fund. That equates to a property tax bill of more than $1,700 a year for that same $100,000 property owner.
Included in the $3.8 million is funding from the city’s electric capital improvement projects (CIP) fund, Rehder noted.
He’s leery of pulling from that fund — after all, it was created to pay for capital projects related to electric generation or distribution — but it has allowed the city to stay afloat when times were tight over the past two-plus years.
“It’s good that we have it, and we have a healthy electric fund,” Rehder said, calling it a “crutch.”
“Our goal is not to have a CIP transfer,” he said.
The city budgeted a potential $1 million transfer from the CIP in 2023, but was able to limit that transfer to $400,000. In 2024, the city again budgeted $1 million, but was able to keep the actual transfer down to $195,000.
For this year’s budget, the city has set aside $500,000, as Rehder has done for 2026. Where those final transfers will land remains to be seen.
Also of note, 2025 is the year the city makes its final payment for construction of the water treatment plan from 2005, which frees up about $500,000.
