Lexington City Council continues annexation talk, takes first look at 2025 budget (2024)

LEXINGTON — On Tuesday evening, the Lexington City Council continued discussion of the proposed annexation of the Tyson Fresh Meats plant and reviewed the proposed fiscal 2025 budget, setting a public hearing for Sept. 10 at 6 p.m.

The council took no action on the annexation.

City Manager Joe Pepplitsch provided an overview of the annexation’s potential benefits, including providing the area with city services such as street maintenance, electric and water utilities, sanitary sewer collection, and police and fire services.

Pepplitsch said annexation would increase property tax revenues for the city. With the city’s levy set at approximately 32 cents per $100 of assessed valuation, the annexation could generate an estimated $80,000 annually.

However, Pepplitsch also acknowledged uncertainties associated with the annexation, particularly regarding sales tax revenues. The Nebraska Department of Revenue has not yet provided clear information on the potential impact of the annexation on sales tax collections. Pepplitsch said any additional revenue from the annexation would be directed toward essential services and programs, such as public safety, social issues and housing development.

Tyson Plant Manager Dave Roemmich recommended that representatives from the city and Tyson conduct future discussions via Teams calls to delve deeper into the expectations and requirements of the annexation.

Mayor John fa*got and council members agreed that further meetings between the two parties are necessary before an annexation decision is made.

Following the annexation discussion, the meeting shifted focus to the Fiscal Year 2025 budget proposal. Pepplitsch provided an extensive overview of the budget, covering the general fund, enterprise funds and other financial allocations.

Pepplitsch reported that the general fund’s assessed valuation had increased by $33 million. The total city valuation is at $558,471,717.The property tax request will be $1,796,504. Total general fund revenue was set at $8,669,047. General fund expenditures amounted to $10,870,267.

The proposed property tax rate for fiscal year 2025 is 32.17 cents per $100 of assessed value. It’s a slight decrease of 1.2% from the current fiscal year’s levy, Pepplitsch said.

The police budget was a significant topic of discussion. Pepplitsch said personnel costs have increased due to comparability requirements. Although the current staffing levels are considered adequate for the city of Lexington, there is an ongoing need for additional police officers to ensure public safety.

Capital improvements and maintenance projects were also discussed, with a focus on essential infrastructure upgrades. Pepplitsch highlighted the need for mechanical unit replacements and water source heat pumps at the Grand Generation Center and Lexington Public Library. The Grand Generation Center, in particular, requires a mechanical unit changeout, which is estimated to cost $30,000.

The electric department’s financial status was reviewed, and Pepplitsch reported a $6 million cash reserve. Despite this reserve, a proposed 2% to 4% increase in electric rates is being considered to ensure the department’s continued financial stability. The water department is in good shape, with no significant capital projects planned for the upcoming fiscal year.

Sanitary sewer projects are a priority for the city, with a $2.4 million grant from the Environmental Protection Agency earmarked for these efforts. Pepplitsch said pending agreements with Darling International and Chief Ethanol, which are expected to support the wastewater treatment plant’s operations. The plant is anticipated to remain financially viable for at least the next five years.

The debt service fund was briefly discussed. Pepplitsch said there is no significant debt associated with the general fund. Street department updates on local participation in state projects, including hike and bike trail segments and intersection panel replacements were discussed. Joint projects with the county, such as the paving of East Walnut, are planned for the future, along with airport road projects that may include a reduction in speed limits.

Pepplitsch also provided updates on various other funds. The economic development fund has a balance of $1.7 million, with budget authority to use these funds for local development initiatives. The Community Development Block Grant Programs fund is nearing closure, with no new requests planned. The revolving loan fund has $440,000 available for reinvestment in the community. The health fund is reported to be in good shape, despite a 50% reduction in revenue due to fewer calls for service.

The meeting concluded with a reminder about the upcoming public hearing on Sept. 10 at 6 p.m. The hearing will focus on the Fiscal Year 2025 budget, providing an opportunity for community members to voice their opinions and concerns. Pepplitsch said the intent is to keep the regular meeting agenda short to allow for an in-depth discussion of the budget immediately afterward.