Grand Island finance staff propose using vacancy savings to stabilize staffing, fund capital projects

City finance staff outlined preliminary assumptions and a proposed fiscal approach for the FY2026 budget at the Grand Island City Council meeting on April 15.

Patrick Brown, assistant city administrator and chief financial officer, said the city faces economic uncertainty and plans to approach the 2026 budget with “very cautious optimism.” Mr. Schultz of the finance team walked the council through the process and presented initial parameters: a 2% projected increase in revenues (about $1.1 million), an expected 10% rise in operating expenses (roughly $1.0 million), and a 4% estimate for personnel costs (salaries and benefits). The finance staff said their current plan is to present a property tax request that keeps the dollar amount flat compared with recent years; staff clarified that “keep it flat” referred to the amount, not the rate.

Why it matters: Finance staff said elevated construction, fuel, equipment and contracted‑service costs and uncertain external revenue streams make conservative assumptions necessary. The council debated how to treat unspent vacancy savings, which staff said totaled about $3,600,000 last year.

Key proposal and mechanics: Finance proposed retaining up to 50% of prior‑year vacancy savings within the general fund as a “general fund staffing stability” reserve to help cover personnel costs (for example, collective bargaining settled increases, health insurance), and transferring the remainder to a capital improvements fund. Under current fiscal policy those vacancy savings flow to the bottom line and are available only for one‑time capital uses; staff said a policy change would be required to formalize the new approach. Brown described the staffing stability pool as intended to support existing FTEs and to avoid using prior savings to fund new, ongoing positions.

Council questions and clarifications: Council members asked about the policy’s mechanics, the risk of accumulating an unused balance, and how the pool would interact with the council’s 20–30% reserve guidance (staff noted a 30% target minimum). Staff said the amount moved each year would be a recommendation from finance based on current revenue forecasts and needs; if revenues are strong the transfer would be smaller and excess would remain in cash reserves. Councilors also discussed vacancy timelines and whether positions unfilled for multiple years should be re‑evaluated during the annual budget cycle.

Other budget items discussed briefly: the presentation reviewed ClearGov budget software, the calendar for the budget process (department 1‑on‑1s, presentations on the general fund, enterprise and major special revenue funds), fee schedule updates effective Oct. 1, salary ordinance and property tax requests to be considered later in the year. Finance staff emphasized that directors may still bring staffing requests, but strong justification will be required in this uncertain year.

No formal action or ordinance was adopted at the meeting; finance staff said they will return with specific policy language and formal items for council consideration later in the budget season.