Oakley council approves 1% sales tax ordinance and agreement to send 97% to USD 274
January 20, 2026 | Logan County, Kansas
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The Oakley City Council on Jan. 20 adopted Ordinance 1197, imposing a 1% local sales tax that will begin collection April 1, 2026, and approved a mutual cooperation agreement with Unified School District (USD) 274 that directs 97% of the new revenue to the district for repayment of general-obligation bond principal and interest.
Garth Herman of Gilmore & Bell, serving as bond counsel, told the council the ordinance and agreement formalize the distribution mechanics approved by voters in last November’s election. Under the agreement’s section 3.4, 97% of monthly receipts will be transferred to USD 274 — the district will use the funds to make bond payments — and the remaining 3% will be retained by the city for mill-levy relief and other city purposes at the governing body’s discretion.
Councilors asked logistical questions about timing and the use of the 3% city share. Herman said the school district’s bond sale on Feb. 9 will set final principal and interest figures; the sale exhibits will be appended to the agreement after those numbers are finalized. He also said the city is not required by this agreement to decide immediately how to allocate the retained 3%; that is a separate future decision of the council.
Mayor (unnamed) called for a roll-call vote on the ordinance and the related authorization for the mayor to execute the sales-tax agreement. The transcript records the roll call as: Steve — yes; Brian — yes; Doug — yes. The chair announced the motions passed and the mayor was authorized to sign the cooperation agreement.
The council’s action sets the process for monthly distribution: the Kansas Department of Revenue will remit collections to the city, which is anticipated to forward 97% to USD 274 by the tenth day after receipt. Herman said the final payment schedule for the district’s bonds will be attached to the agreement after the district’s Feb. 9 bond sale.
The ordinance and signed agreement do not themselves appropriate the city’s retained 3% to any specific project; councilors and staff said future budget or project decisions will determine how those funds are used.
The council took the action at the Jan. 20 meeting and directed staff to work with counsel to obtain signature pages and finalize exhibit A after the district’s bond sale.
Garth Herman of Gilmore & Bell, serving as bond counsel, told the council the ordinance and agreement formalize the distribution mechanics approved by voters in last November’s election. Under the agreement’s section 3.4, 97% of monthly receipts will be transferred to USD 274 — the district will use the funds to make bond payments — and the remaining 3% will be retained by the city for mill-levy relief and other city purposes at the governing body’s discretion.
Councilors asked logistical questions about timing and the use of the 3% city share. Herman said the school district’s bond sale on Feb. 9 will set final principal and interest figures; the sale exhibits will be appended to the agreement after those numbers are finalized. He also said the city is not required by this agreement to decide immediately how to allocate the retained 3%; that is a separate future decision of the council.
Mayor (unnamed) called for a roll-call vote on the ordinance and the related authorization for the mayor to execute the sales-tax agreement. The transcript records the roll call as: Steve — yes; Brian — yes; Doug — yes. The chair announced the motions passed and the mayor was authorized to sign the cooperation agreement.
The council’s action sets the process for monthly distribution: the Kansas Department of Revenue will remit collections to the city, which is anticipated to forward 97% to USD 274 by the tenth day after receipt. Herman said the final payment schedule for the district’s bonds will be attached to the agreement after the district’s Feb. 9 bond sale.
The ordinance and signed agreement do not themselves appropriate the city’s retained 3% to any specific project; councilors and staff said future budget or project decisions will determine how those funds are used.
The council took the action at the Jan. 20 meeting and directed staff to work with counsel to obtain signature pages and finalize exhibit A after the district’s bond sale.
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