Somebody forgot to levy $57,000 in bond payments. Kenyon found out eight months late, from the vendor.
The 2025 budget left out $57,000 in payments on bonds the city had already issued. Nobody in city hall caught it. The outside firm hired to clean up the books found it in August 2025 and proposed paying it back over three years.
A city that issues bonds promises to levy for the payments. Kenyon issued its 2023A general obligation bonds and then, in the budget adopted for 2025, did not levy for them. The omission is one line in a budget memo, and it explains a good part of why the 2026 levy opened at 27 percent.
The line
Abdo's budget memo in the August 26, 2025 packet lists what drove the proposed $378,901 increase. Under debt service it says: "A new bond payment for the 2025A G.O. Bond has been added, along with the 2023A G.O. Bond. The 2023 G.O. Bond should have been budgeted in 2025 for $57,000. We are adding it to the 2026 budget and spreading it out over the next three years for a total of $19,000 for 2026, 2027 and 2028." The levy table beside it shows the 2023A bond line at nothing for 2025 and $76,000 for 2026. The September memo put the debt levy increase at $107,646, or 38.96 percent.
Part of the increase will be needed to make up for an oversight which saw the city fail to levy $57,000 that it should have to finance already issued bonds.Kenyon Leader, September 2025, reporting the August 26 work session.
The Leader added the part of the arithmetic that makes the miss expensive: state law requires a city to levy 105 percent of its scheduled debt service. A payment left out of one year does not disappear. It comes back with a cushion on top.
Who was in the chair
The 2025 budget was adopted on December 10, 2024, by Resolution 2024-28, with a levy of $1,400,000 and a maximum increase of 9.55 percent. The administrator that night was Frank Boyles, serving on an interim contract, and the finance director was Whitney Kyllo. Scott Lehner had been hired on November 7 and went on the payroll December 14, four days after the vote. The budget that missed the payment was not his.
The year that ran on it was. The 2025 fiscal year ran under Lehner from its first month. The finance director resigned on June 10 and left July 17. Kyllo had told the council in April that claims from the IRS and the Minnesota Department of Revenue from 2023 were legitimate and would be paid with penalties, so the office was already finding old errors. The bond miss was not found until Abdo, hired in July and again in August to do "substantial clean up," built the 2026 draft. That was eight months into the fiscal year, after the person who might have caught it in a monthly review had gone.
We are adding it to the 2026 budget and spreading it out over the next three years for a total of $19,000 for 2026, 2027 and 2028.Abdo budget memo, August 22, 2025, source
Where a second set of eyes would have sat
Kenyon had an audit committee every year from 2019 through 2024. Its members were two council members, the administrator, and a finance staffer. On January 14, 2025, Lehner's first regular meeting, the packet asked the council to fill the committee's two council seats. The mayor instead raised whether it was needed at all, saying he had discussed it with Scott; Lehner said "the reason I brought it up to the mayor" was that he, the finance director and the auditors would handle the work anyway, and that "I could go either way." The council voted 5-0 to approve the year's appointments "eliminating the audit committee."
The record does not show that the old committee ever met, and it does not show that a committee would have read a debt schedule against a levy table in the spring of 2025. It shows only that the one council body with that assignment was dissolved in January, that the finance director was gone by July, and that the miss was discovered in August by a vendor preparing the next year's request. The word "somebody" in the headline is deliberate. The minutes do not name who left the line blank. They name who was not there to find it.
The council spread the $57,000 over three years, at $19,000 each, and certified a preliminary levy of 9.93 percent in September. The make-up payments will be on the levy through 2028.
Before and after
- Dec. 10, 2024The 2025 budget and a $1,400,000 levy are adopted under interim administrator Frank Boyles and Finance Director Whitney Kyllo; the 2023A payment is not in it.
- Dec. 14, 2024Scott Lehner goes on the payroll.
- Jan. 14, 2025The council eliminates the audit committee 5-0.
- July 17, 2025The finance director's last day.
- Aug. 22, 2025Abdo's budget memo discloses the missed payment and proposes spreading it over three years.
- Aug. 26, 2025The 2026 levy opens at 27.06 percent.
- 2026 to 2028The make-up payments ride on the levy at $19,000 a year.
What the statute says
The governing body of any municipality issuing general obligations shall, prior to delivery of the obligations, levy by resolution a direct general ad valorem tax upon all taxable property in the municipality to be spread upon the tax rolls for each year of the term of the obligations.
A city that issues general obligation bonds commits in advance to levy for every year of the payments.
will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the obligations
The levy has to overshoot the payment by five percent, so a missed year comes back with a cushion on top.
People in this story
- Frank BoylesInterim administrator when the 2025 budget was adopted
- Whitney KylloFinance director until July 17, 2025
- Scott LehnerCity administrator, on the payroll since December 14, 2024
- Jessi SturtzAbdo manager; her memo disclosed the miss
- Don KirchmannMayor
Sources
- Abdo budget memo, August 22, 2025, in the August 26, 2025 packet; work session minutes on the meeting page.
- Kenyon Leader, "Kenyon City Council discusses cutting projected levy increase," September 2025.
- 2025 budget and levy, Resolution 2024-28, December 10, 2024; administrator hiring, November 7, 2024.
- Finance director resignation, minutes of June 10, 2025, in the July 8, 2025 packet; IRS and Department of Revenue claims, April 8, 2025.
- Audit committee: recording, January 14, 2025, 30:44; minutes "eliminating the audit committee" in the February 11, 2025 packet.
- Preliminary levy, September 9, 2025; debt levy figures in the September 9 packet.
More from the record
Two weeks after the Leader printed his quote, Lehner "clarified" it. The levy still opened at 27 percent.
The Messenger has an office in Kenyon and asked for the legal-notice contract. The council gave it to the Leader without a word.
Lehner's own math: Abdo $200,000, a finance director $130,000. He picked Abdo.
All 27, in order · The open letter · Every packet and recording