Junction City holds early budget work session; staff flag declines in building fund and pressure on police/dispatch costs

City staff presented a third-draft budget forecast and a range of concerns at a Feb. 20 Junction City Council work session, warning councilors to monitor declines in several enterprise and special funds and to begin long-range planning for personnel and service changes.

"Nothing's on fire," said Jason (Administrator), the city administrator, opening the discussion, adding that the materials presented were a forecast intended to spur early discussion rather than to request decisions. The presentation identified several items staff want the council to watch: reduced growth in property tax revenue tied to a building and sewer moratorium; falling system development charge (SDC) receipts; a projected decline of roughly $230,000 in the building fund; a court fund that shows a recent negative beginning balance; and an anticipated swing of about $485,000 in the police fund under the city’s staffing assumptions.

The administrator said the city relies on property tax growth above the 3% statutory increase to generate much of the general fund’s “growth” revenue and that several years of constrained development would reduce that additional revenue. He noted parks SDCs currently hold about $1 million but warned replenishment could be slow without development. The building fund’s projected $230,000 decrease, staff said, stems from fewer building permits and associated fees; staff are pursuing revenue opportunities such as a building-services intergovernmental agreement (IGA) with Harrisburg to provide plan review and inspections.

Councilors pressed staff on specific funds and assumptions. Councilor Thomas asked whether the same moratorium affecting development was driving projected declines in the court and police funds; the administrator said the projection methodology compares beginning and anticipated ending fund balances and that the moratorium’s effect on growth is a contributing factor. The court fund’s current reported deficit (shown in the draft worksheets as a roughly negative $20,440 beginning balance) led councilors to recall a previous one-time transfer of about $175,000 into court in fiscal 2023–24.

Police-fund pressures stemmed in part from turning partial-year vacancy budgeting this year into full-year costs next year: vacancies budgeted for six months this year become full-year payroll costs in the draft budget. Staff estimated that each additional filled dispatcher position increases the department cost by about $150,000 when salary plus benefits are included; background checks and onboarding add several thousand dollars per hire. The draft assumes the department will fill sworn positions and maintain current dispatch staffing through a contract with county dispatch services; staff said doing more than that would accelerate the fund’s decline.

The council also debated internal "administrative charges" allocated to departments (administration, finance and related overhead billed to operating departments). Some councilors argued for returning administrative overhead to its own department lines for clarity; staff and other councilors cautioned that past practices created opaque allocations and that the current FTE-based allocation is intended to increase transparency and prevent future manipulation of administrative charges.

No formal budget decisions were made. The administrator asked councilors to treat the materials as an early-warning conversation: staff expect to produce at least two more drafts before formal budget committee review and said they are monitoring key funds and service contracts while seeking possible revenue offsets.

Next steps: staff will provide a worksheet showing the administrative-charge allocation, continue outreach on potential building-service agreements, and bring refined drafts to the council and budget committee for further discussion.