The Mexico City Council approved a $25 million fiscal year 2025-26 budget at its Sept. 8 meeting.

The fiscal year begins Oct.1 and ends Sept. 30, 2026. Council approved the city’s tax rate of  $0.7591 per 100 dollars of assessed valuation on Aug. 25. 

Council approved a balanced budget, with $25,060,150 in expenditures and with total revenues at $21,852,952. The expenditures exceeded revenues by $3,207,198 and will be funded by project reserves, unreserved surpluses from prior years’ budgets, grants and American Rescue Plan Funds, according to the budget statement provided by City Manager Bruce Slagle. The additional expenditures are for planned capital equipment purchases, planned capital improvement projects, project reserves and carry-over improvement projects.  

“During the current budget year, low unemployment, supply chain issues, higher interest rates (and) rising retail costs have all led to inflation,” Slagle told council. “However, the city continues to live within its means and it is well-positioned moving into the fiscal year 26 budget.”

Slagle said the budget is “sound and reasonable” and that it delivers great value and outstanding services to Mexico residents.

“It addresses planned infrastructure projects for streets (and) stormwater improvements, wastewater projects, downtown revitalization efforts, hospital demolition, a work force compensation study and computer network upgrades,” he said. 

In addition, he said the budget maintains the fund balance reserves as required by city policy and uses surpluses from prior years to help fund non-recurring expenses and purchases of capital assets. 

“Staff continues to pursue partnerships, grants, donations and other resources to help supplement our funding for our operations and capital projects,” he said.

Slagle’s statement included information on how low unemployment rates have strained the city’s ability to hire and retain a qualified and talented workforce. In 2025, the state of Missouri extended minimum wage protections to public employees, ensuring they receive the same base wage as those in the private sector. Beginning Jan. 1, the new state minimum wage will be $15 per hour. 

“Therefore, providing competitive wages and benefits along with minimum wage increases has increased additional pressures on the city’s financial resources,” Slagle said. The city’s staffing level of 84 full-time employees will remain the same. 

Slagle’s budget statement revealed that recurring operational expenditures and the cost of replacing capital equipment continue to increase on a regular basis, noting there are some “large ticket items” that will require consideration in the near future, such as repairs to the Teal Lake Dam, Town Branch Improvements, Lakeview Lake Dredging and the replacement of City Hall and Public Safety facilities. 

Other highlights from the budget:

• Property and liability insurance renewal rates are estimated to increase by 12% over last year, mostly because of policy claims and national disasters. Dental insurance premiums are estimated to remain the same as the current year.  Employee health insurance premiums are estimated to increase by 20%, effective Jan. 1. The budget includes the cost associated with continuing the High Deductible Health Plan coupled with the use of a Health Savings Account with dependent premium increases being split proportionately between the employee and the city. All insurance rate increases have been estimated based on industry averages, but all policies will be bid to ensure the best possible rate, the statement said.
• Employees will get some raises. The city has three position classification and pay Schedules: Schedule A: General Hourly Employees; Schedule B: Public Safety Officers; and Schedule C: Exempt Employment Positions. This budget allows for a 1% cost-of-living adjustment for all positions. In addition, this budget allows for a step increase for Schedule(s) A and B for an average rate increase of 3% for all hourly employees and a 3% increase for Schedule C employees. 
• The city will provide a total of $86,400 to outside agencies, with money going to charitable and contract agencies: Charitable: Mexico Senior Center, Inc., $14,000; Audrain County Historical Society, $7,400; Miss Missouri Scholarship Pageant, $10,000; The Help Center, $7,500; Optimist Youth Sports, $7,500. Contract Agencies: Handi-Shop (recycling program), $12,000; Mexico Chamber of Commerce (community marketing), $13,000; Presser Arts Center (community theater activities), $10,000; Mexico Chamber of Commerce (economic development activities), $5,000.   
• Grants anticipated in support of this budget: Missouri Department of Natural Resources, Stormwater Mapping Grant, $50,000; ARPA-MoDNR, Stormwater Infrastructure, $883,778; ARPA-MoDNR, Stormwater System, $3,058,187; ARPA-County-HIP Reimbursement, $110,000; DOT-Airport Runway Pavement Repairs, $67,500; MoDOT-TAP-Sidewalk Improvements, Phase 3 & 4, $307,002.
• In the Capital Projects Fund, the city applied for and received two separate ARPA-MoDNR Grants for stormwater system and infrastructure improvements, and the city has received revenue from these two grants for work completed, but is expected to receive an additional $3,941,965, in this budget year.   
• The Wastewater Operation Fund has $864,750 in planned capital improvement projects for this fiscal year. This budget reflects a 2% increase in wastewater rates for the upcoming year to meet current operating expenses, capital improvements and debt service obligations.  
• The Sanitation Operation Fund includes $150,000 to be transferred into the general fund to pay for half of the costs of a new street sweeper. This budget anticipates a rate adjustment of 4.1% in the base sanitation rate for the upcoming year to be effective in April 2026. The rate adjustment is needed to cover the increase in the residential refuse collection contract and other sanitation operation related expenses, the budget statement said.

Also at the meeting, council approved:

• A resolution authorizing the city to enter into an agreement with Mainstreet Mexico to assist in providing services for the Mexico community, approving $35,000 in support of the organization’s 2024-2025 ongoing program of works, economic development and revitalization of the downtown district.  
• A resolution authorizing the city manager to sign a task order with Lumix Electrical for Downtown Street Light Improvements with a maximum not to exceed the amount of $30,000.