Workshop Minutes 12-2-25

City of Kettering City Council

December 2, 2025

The Council of the City of Kettering, Ohio, met in a workshop session on Tuesday, December 2, 2025, in the Deeds Conference Room, Kettering Government Center 3600 Shroyer Road. The meeting came to order at 5:05 p.m.

Council members present included Mayor Lehner, Vice Mayor Fisher, Mr. Sullivan, Ms. Duvall, Mr. Scott and Mr. Suddith.

Council members absent: None

Staff members present included City Manager Matt Greeson, Assistant City Manager Steve Bergstresser, Assistant City Manager Bryan Chodkowski, Law Director Ted Hamer, Assistant Law Director Maggie Pasqualone, Acting Finance Director Randall Harper, Budget Manager Kelly O’Connell and Clerk of Council Amy Hayslip.

Mr. Sterling Abernathy, Ms. Laura Arber and Mr. Dan Palmer were also in attendance.

Mr. Greeson thanked the Acting Finance Director and Budget Manager for their hard work on the 2026 Budget, along with City administration for their input in its preparation. He then turned the meeting over to Ms. O’Connell to present the 2026 Budget.

Ms. O’Connell began by covering the budget highlights. She stated the City is positively meeting the 2025 ($339,725) and 2026 ($1,035,431) operating margins. Income tax revenues were estimated at $56.6 million (reduced from 58.2 million) in 2025, and the City is budgeting $58.1 million for 2026.

Personnel staffing levels will remain the same for full-time equivalent employees (FTE) and will increase 0.6 same for part-time employees. The operating budget increase for inflation and charge-backs in 2026 is $406,000.

In 2026, capital improvements are budgeted at $14.6 million. Ms. O’Connell noted the estimated ending general fund balance is expected to increase $110,400 in 2025, and will decrease $6.8 million in 2026.

Ms. O’Connell reviewed the general fund balance, which is estimated at $62,833,647 on January 1, 2026. The City has $6,812,870 in funds not spendable or not available for operations. The City will have receipts of $76,833,000. Other financing sources total $25,000. The general fund will transfer $23,619,000 to other funds to subsidize other operations or the capital improvement plan. The City’s operating expenditures will be $59,343,480 for an available ending balance of $49,565,208.

Items on the schedule include the Street Department receiving a $3.9 million transfer from the general fund. The Police Pension Fund will receive a $1.5 million subsidy. Parks, Recreation and Cultural Arts will receive a $9.9 million subsidy. Fraze receipts are estimated at $5.6 million with expenditures totaling $6 million showing the $400,000 subsidy in the budget.

Ms. O’Connell explained that the City’s Debt Service fund will receive a subsidy of $522,000 from the general fund. The capital improvement projects fund starts out with $14.6 million including the Boonshoft funds. The City’s receipts in the capital improvement projects fund are $4,673,000 with a transfer of $7,516,000 from the general fund into the CIP fund. The City’s capital improvement expenditures are $14,273,000 next year for an ending CIP fund balance of $520,008.

Ms. O’Connell presented non-spendable, restrictions, commitments and assignments totaling $6,812,870. These funds include prepaid worker’s compensation, assets held for resale at $2,248,570 (Miami Valley Research Park and two properties on Wilmington Pike), economic development commitment ($2,460,000 including 2026’s $500,000 annual transfer) and gas tax assignments for capital improvements ($997,300).

Ms. O’Connell mentioned that we will use the remaining ARPA funds totaling $309,000.

The Government Finance Officers Association recommends at least two months of operating expenditures are available as unrestricted fund balance. In Kettering, income tax is less stable than property tax used in GFOA’s model; therefore, Kettering opts to maintain no less than 15-20% or two months of operating expenditures and transfers.

Ms. O’Connell noted the general policy for operating margin is personnel, operating, capital outlay, debt service expenditures and operating transfers are funded by current operating revenue. Capital improvements may be funded by reserves. The City’s estimated 2025 and budgeted 2026 general fund margins are in compliance with these goals.

Ms. O’Connell presented the available general fund balance trends from 2017 through 2026.

The General fund operating margin is estimated at $339,725 in 2025 and $1,035,431 in 2026. After subtracting General fund transfers to the CIP fund of $6,658,000 in 2025 and $7,516,000 in 2026, the bottom line margins are negative in both 2025 ($5,693,275) and 2026 ($6,455,569).

Income tax represents 76% of the City’s general fund revenue. The City’s 2025 estimate for income tax revenue is 2.3% greater than 2024.  A 2.7% increase is budgeted for 2026.

Ms. O’Connell stated that property tax represents 13% of the City’s general fund revenue and is fairly stable. Every three years, property values are re-valued or re-appraised. Property tax revenue is anticipated to remain at 13% for 2025.

Ms. O’Connell reviewed other revenue sources with the Council members. Those sources included local government fund, court fines at about $1 million each year, as well as permit fees, reimbursements, and rental income between $3 and $4 million.

Ms. O’Connell then reviewed the 2025 budgeted general fund expenditures noting Police accounts for 26%, Fire makes up 23% and transfers total 26% of the total general fund expenditures. There are four types of expenditures–personnel, operating, equipment and transfers. The 2026 budgeted general fund expenditures total $83,313,569.

Ms. O’Connell explained that there was one part-time FTE – net 0.6 personnel change budgeted for 2026. An across-the-board pay increase of 3.0% for non-organized employees is included in the 2026 budget, as well as 2.5% for IAFF & Fire Command, 2.75% for AFSCME union employees. The PERS employer contribution remains at 14% (Police 19.5% and Fire 24%) and the employee contribution remains at 10% (Police 12.25% and Fire 12.25%). The City’s health insurance carrier will continue to be United Health Care and there will be an 11% increase in premiums for 2026.

Ms. O’Connell presented 2024 operating expenditures without personnel including the Comprehensive Plan ($148,800), Theater Projects study of Fraze operations ($70,000), Linklayer for MARCS radios ($59,500); gas mask replacements ($54,400); cybersecurity (39,600) and AXON ($1,741,000).

Ms. O’Connell reviewed non-personnel operating expenditures for 2026. The 2026 chargeback budgets were increased $406,000 for inflationary impact; $50,000 for Energy audit funding and $45,000 Process improvement funding. Streets Department’s 2026 operating subsidy is $129,000 (3%) less than the 2025 budget; PRCA 2026 operating subsidy budget is $467,000, (5%) greater than the 2025 budget; and Fraze 2026 subsidy budget at $500,000. No transfer from the General Fund.

Ms. O’Connell stated that non-personnel operating expenditures total 17% of the general fund expenditures between $8 and $10 million.

Ms. O’Connell presented the 2026 capital outlay items. The City-funded projects total $2,999,600 and those funded by ARPA are $73,300. City-funded projects include police marked SUVs, Police and Fire MDT’s, Dispatch site controller, Fire locution console, Fire PortaCount machine, stair chairs and Fire medic carryover, vehicles and SBCA cylinders; Engineering robotic total station and utility locator; Streets heavy dump truck, skid steer, pick-up with plow, concrete saw, SUV and air compressor.

Ms. O’Connell stated the estimated outstanding debt service as of December 31, 2025, is $17,968,087. Outstanding debt service includes $8.1 million for fire stations, $6.2 million for police renovation, $2.4 million for PRCA improvements, $0.2 million for OPWC promissory notes and $1.0 million for lease liability. For 2026, debt services expenditures total $2,776,948.

Ms. O’Connell stated that the capital improvements fund expenditures total is $30.1 million for combined 2025 and 2026. The funding breaks down as follows: grants $6.7 million (Traffic signals phase 4; Marshall Road: David to Wilmington and SR 835 pedestrian/bike path); ARPA $1.2 million (E. Stroop Bikeway, West Avenue pedestrian bridge, Gentile Park and Golf Club Estates); 1% for the Arts Fund $0.1 million; Boonshoft Fund $5.0 million; and City Funds $17.1 million.

Ms. O’Connell reviewed the 2026 CIP highlights including the asphalt program $1,915,000; neighborhood program (additional gas tax) $950,000; thoroughfares, arterials and collectors $490,000; Marshall Road: David to Wilmington (grant $1,005,000) $1,924,000; Whipp Road: Millshire to Oak Valley $850,000; Parklawn improvements $725,000; Display Lane improvements $350,000; SR 835 pedestrian/bike path (100% grant) $714,000; and miscellaneous carryovers since CIP workshop BMX track improvements $113,000; Playground equipment $100,000; Fraze ADA improvement design (Founder/Fan fund) $189,000; Cemetery signage (Cemetery fund) $40,000. Additions since CIP Workshop: Concrete repair for Far Hills medians & driveway modifications $140,000.

Discussion was held among City Council and City staff.

Council members thanked Ms. O’Connell, Mr. Harper, the Finance Department and Department Directors for all of the work put in to preparing the 2026 budget document.

Agenda Review

Mr. Greeson reviewed the agenda.

The City Council Workshop Meeting adjourned at 6:19 p.m.

ATTEST:

______________________________

PEGGY LEHNER, MAYOR

Amy J. Hayslip

Clerk of Council