Salina commission rejects KMEA sales tax exemption on 2–3 vote

The Salina City Commission voted 2–3 to reject a resolution supporting Industrial Revenue Bonds (IRBs) tied to a sales tax exemption on construction materials for the Kansas Municipal Energy Agency (KMEA). The measure failed to pass, with commissioners split over whether the city should forgo sales tax revenue for a project that would not generate future property tax revenue.

City staff presented the request as sales-tax-only, not a traditional full property tax abatement. KMEA representatives told commissioners the project would support their statewide work serving municipal electric utilities and expand their Salina operations.

What KMEA and staff told the commission

KMEA described itself as a nonprofit municipal energy agency serving communities across Kansas and said the Salina facility would support line work, substation work, engineering, and related services statewide. Representatives said the organization has grown since acquiring the local operation and projected continued hiring over time. They also said the larger facility would allow them to host more meetings in Salina rather than renting space elsewhere.

Staff noted the city has often used incentives with existing employers and said many new jobs typically come from companies already rooted in the community.

Why commissioners pushed back

The biggest concern was the lack of a long-term tax return that usually comes with incentive deals. Several commissioners said the city often approves abatements with an eye toward future revenue once the incentive period ends, but in this case, property tax revenue would not come online later.

Commissioner Mike Hoppock summarized that hesitation directly, saying:

“I guess the reason I voted nay is it seems like we’re giving other municipalities a break, but yet cutting ourselves out of the loop a little bit… and… a lot of times when we approve these, we’re always looking at the future earnings.”

Commissioner Doug Rempp focused on fairness and optics, questioning why taxpayers should give up revenue when the materials suggested KMEA’s wages are well above local averages.

“One of the things I struggle with is, KMEA is a nonprofit, yet they have enough income for an average salary of $110,000 for their employees… that leads me to believe that their average pay… is north of 110,000… which is probably triple the average taxpayer in Salina… I struggle with… forgoing money coming into the city… when your average income is over triple what the average citizen gets.”

Commissioner Greg Lenkiwicz, who voted in favor, acknowledged the tension between the broader statewide benefit and what he saw as the city’s primary responsibility.

“Maybe just us being good neighbors, so to speak. I guess that’s not our job…”

Why KMEA says wages are high

KMEA representatives responded that the pay levels reflect the labor market they compete in. They said the agency competes directly with the utility industry for highly skilled positions, including engineers and linemen, and that the lineman workforce in particular remains difficult to fill statewide.

In response to questions about the wage ranges, KMEA said it pays well intentionally to recruit and retain qualified workers and provide municipal utilities with skilled, dependable crews.

Vote tally

The resolution failed, 2–3.

YES:

Greg Lenkiwicz

Dr. Trent Davis

NO:

Doug Rempp

Mike Hoppock

Jerry Ivey Jr.