Office of the City Manager
Mayor Frese and Members of the Tonganoxie City Council:
It is my pleasure to present the City of Tonganoxie 2026 Adopted Budget, which was approved by the City Council on September 2, 2025 by a vote of 5-0. The Adopted Budget communicates the City’s immediate and long-term plan for continuing to deliver high-quality city services at a reasonable cost to Tonganoxie residents and visitors. Also, on September 2, 2025, but prior to the budget adoption, the City Council adhered to K.S.A. 79- 2988, which also required public notice for a public hearing to consider exceeding the Revenue Neutral Rate (RNR), which would allow jurisdictions to levy more revenue from property tax than the year before. On a 5-0 vote, the City Council voted to exceed the RNR and adopted Resolution 09-25-01 indicating such intent.
The adopted budget decreases the total City property tax rate by 1.265 mills compared to the current year mill levies. This change allows the City Council to have a 5.779 mill reduction approved over the last 5 years.
Strong Commercial and Residential Development Activity
There is continued activity within the Tonganoxie Business Park. We were happy to see Hill’s Pet Nutrition facility appraised by the Leavenworth County Appraisers Office with a value of $86M, which resulted in an additional $20M+ of assessed valuation for USD 464’s capital outlay levy. In addition, the City was able to negotiate a 10- year Fixed payment-in-lieu-of taxes (PILOT) with Hill’s, which allows each taxing jurisdiction within the City of Tonganoxie Tax District to get annual payments from the PILOT. Also, Hill’s has become a significant water user for the City’s water supply, resulting in increased utility revenues. Finally, Hill’s Bark Park, a new community amenity which was largely funded (Hill’s contribution) because of our stipulations in the Development Agreement with Hill’s, opened this year. We were excited to see the new DSM-Firmenich facility completed and open for manufacturing. The project was issued the Industrial Revenue Bonds (IRBs) for the $48M investment in a 57k sqft manufacturing facility, with 28 new jobs having an average annual wage of $71k. Following our successful annexation efforts at LvCo, Evergy received approval for an electrical substation on a 14-acre site, on 222nd St, near the Tonganoxie Business Park. We hope that this project remains a priority for Evergy as it creates electrical supply redundancy, something the area could greatly benefit from. Additionally, a 50-acre site directly across from the Business Park was purchased by a development firm and we are exploring options for the site. Outside of the Tonganoxie Business Park, there is continued activity near the Urban Hess Business Park. The Polished & Decorative Concrete building was constructed and opened for business, without the use of tax incentives, and the project has a LvCo appraised value of $2.56M. We’ve also seen activity in the retail sector, with Casey’s gaining approval and beginning construction of a new $1.2M investment store at 24/40 and South Park Dr. The previous vacant 5-acre site also has two potential pad sites, for fast/casual food type development (3.5 acres) directly to the West. We’ve seen growth in our residential development as well, including strong performance in our newer multi-family projects and is highlighted by competitive and limited availability at those developments. Lennar (Rausch Coleman) pulled 98 building permits for their 142-home development in Stone Creek, which resulted in the collection of $832,210 in fees for building permits, excise tax and utility system development fees (tap fees). This project is under active construction and represents an approximate $58M investment and will be completed in two phases that should span 3-4 years.
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