Johns Creek council delays allocation of $4 million surplus placeholder while budget numbers are finalized

Johns Creek City Council on Sept. 8 heard staff present a balanced FY26 budget that includes a $4,000,000 placeholder for part of a projected FY25 surplus and agreed to delay final allocation until staff closes the books and returns with verified figures.

Assistant city finance staff Kaye told council that the budget document is balanced but includes “a $4,000,000 placeholder and it is just that, a placeholder, should the council decide to allocate some of the projected FY25 surplus, as part of the FY26 budget.” She said staff is still finalizing August and September numbers and expects a final surplus figure in November after year‑end closing and audit adjustments.

The discussion centered on whether to assign the placeholder now or park it in contingency. One councilmember suggested placing the dollars in unassigned reserves and “let staff make sure they can implement all the projects,” noting that parking the funds could yield interest until the council finalizes priorities. Other members said they were comfortable with staff’s recommendation to put the amount in capital projects contingency and revisit allocation at a strategic retreat.

Council members pressed staff about specific priorities. One councilmember pressed to begin hiring and equipping sworn officers, arguing the city should start on two uniformed positions and vehicles even if cadet hires are prioritized. Finance staff said the police chief prioritized four cadets for FY26 to accelerate recruitment; fully trained sworn officers and vehicles were listed as a second‑tier request.

Kaye gave several figures to frame the discussion: staff is estimating an approximate surplus of $4,700,000 as of July statements; the unassigned fund balance would be about $30,874,000, the three‑month reserve is roughly $16,163,000 and a cash‑flow amount near $13,090,000, leaving an illustrative net of about $811,000 after those reserves if the placeholder is fully allocated. She also said staff calculates a cash‑flow stabilization number based on prior fiscal years and current revenue/expense patterns.

Council debate touched on the budget’s growth assumptions: some members criticized a 9% property‑tax digest growth assumption as aggressive compared with neighboring cities’ projections and urged a conservative approach to avoid creating a large perpetual surplus; others said historical trends and multiple scenarios support the staff calculation. Council directed staff to finalize the numbers for the public hearing and to be prepared to explain the growth assumptions.

The council did not adopt allocations from the placeholder at the work session. Staff will finalize year‑end figures and return with updated spreadsheets; council members said they expected to revisit allocation decisions once November closing and the strategic retreat produce firmer data.