Manhattan maintains A1 credit rating, outlook upgraded to stable

Financial forecast warns of $3 million debt service shortfall by 2031

Commission reviews conversion of $140 million in temporary notes

Upcoming 2026 sales tax renewal looms over long-term budget strategy

Analysis shows city mill levy averaged 1.82 percent annual increase since 2010

General fund subsidized Riley County Police Department in 2025

City utility funds show strong cash reserves for future projects

1. Manhattan maintains A1 credit rating, outlook upgraded to stable

MANHATTAN, Kan. — The city received positive news as its A1 credit rating was maintained and its financial outlook was upgraded from negative to stable. Tom Kaleko, a principal at Baker Tilly Municipal Advisors LLC, the city's financial advisory firm, said the upgrade was driven by the city's balanced 2026 budget and strong cash balances at the end of 2025. The improved outlook is expected to make the city's municipal bonds more attractive to underwriters, potentially lowering borrowing costs for future capital projects.

2. Financial forecast warns of $3 million debt service shortfall by 2031

MANHATTAN, Kan. — A long-term financial forecast presented to the Manhattan City Commission revealed a looming $3 million annual gap in the bond and interest fund by 2031 if no corrective actions are taken. While the current debt service fund holds a healthy cash balance of more than $20 million, existing obligations will eventually outpace revenues. City officials plan to explore solutions over the next few budget cycles, including incrementally increasing revenues or shifting property tax mills, to flatten the deficit before it impacts operations.

3. Commission reviews conversion of $140 million in temporary notes

MANHATTAN, Kan. — As part of an ongoing debt management strategy, city staff and Baker Tilly financial consultants outlined the impact of $140 million in outstanding temporary notes on the city's long-term budget. These short-term notes, which have been used to fund various capital improvement projects, will soon need to be converted into long-term general obligation bonds. Commissioners requested a detailed breakdown of the specific projects tied to this debt — including the City of Manhattan Joint Maintenance Facility and Aggieville improvements — to better understand the financial obligations heading into the 2027 budget season.

4. Upcoming 2026 sales tax renewal looms over long-term budget strategy

MANHATTAN, Kan. — A critical factor in addressing the city's long-term debt and budget strategy will be the potential renewal of the city's 0.20 percent Street Maintenance sales tax in November 2026. City administration reminded commissioners that sales tax revenues have become an increasingly significant portion of the city's debt service funding, gradually replacing property tax reliance over the last several years. The outcome of the 2026 ballot measure will heavily dictate how the city funds infrastructure maintenance and pays down existing bond obligations.

5. Analysis shows city mill levy averaged 1.82 percent annual increase since 2010

MANHATTAN, Kan. — A historical property tax analysis provided to the Manhattan City Commission showed that the city's mill levy increased by an average of 1.82 percent annually from 2010 to 2025. This compares with an average annual increase of 1.15 percent for Riley County and 1.28 percent for Manhattan-Ogden Unified School District 383 over the same period. When combined with an average assessed property valuation increase of 3.68 percent, the overall property tax burden for residents has grown by roughly 5 percent annually, providing historical context as the commission prepares to set the 2027 budget.

6. General fund subsidized Riley County Police Department in 2025

MANHATTAN, Kan. — The city's general fund was required to make transfers to the Riley County Police Department fund in 2025 because dedicated property tax revenues fell short of the agency's budget requirements. The RCPD remains the largest levied fund in the city, commanding $23 million in the 2025 budget. City administrators highlighted this transfer as one of the major general fund expenditure highlights from the previous year, noting that police, fire and employee benefits also required specialized sales tax transfers.

7. City utility funds show strong cash reserves for future projects

MANHATTAN, Kan. — The city's water, wastewater and stormwater funds are reporting robust cash balances, leaving the utilities well-positioned to fund future infrastructure needs without relying heavily on new debt. According to the 2025 end-of-year review, the water fund holds $12.1 million — amounting to more than 200 days of operating cash — while the wastewater fund holds more than 300 days of cash on hand. Baker Tilly consultants said these high balances are intentionally reserved to cash-fund major upcoming capital projects, such as backup power generators for the water and wastewater treatment plants.

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