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Johns Creek council adopts $100M growth assumption for FY26, leans toward using reserves to allocate surplus
Summary
At an Aug. 25 work session, Johns Creek officials settled on a $100 million property-tax growth assumption for FY26 and signaled a preference to treat any FY25 surplus as a use-of-reserves in the FY26 budget rather than immediately earmarking it; staff will return with final numbers for Sept. 8 adoption and exact allocations after year-end close.
Assistant City Manager Kaye Love told the Johns Creek City Council at its Aug. 25 work session that staff had revised the proposed FY26 budget to reflect updated revenues and expenditures through July 31 and to correct a double-counting error in permitting revenue.
"In the new copy ... if we went to the $100,000,000 then it would be $22,400,000 on that current property tax revenue line item," Love said, describing how different digest-growth assumptions change property-tax revenue projections.
Why it matters: The council’s choice of a growth assumption directly affects how much revenue the city expects to have available for capital projects, one-time allocations and reserves. Council members debated a conservative $70 million, a mid-range $100 million (one standard deviation) and the $200 million placeholder that had been used in the revised packet.
Council discussion focused on balancing prudence with the desire to fund near-term capital projects. Multiple members said the one-standard-deviation option ($100 million) was a reasonable compromise. "I think 100,000,000 is a fair compromise," Councilmember Bob said, citing peer-city comparisons and Moody’s data.
Council members also discussed three options for using any projected FY25 surplus: (1) a FY25 budget amendment to allocate surplus now; (2) embedding a dollar amount as a use-of-reserves in the FY26 budget and allocating projects after final numbers are known; or (3) routing funds through predetermined allocations (the council’s term “meat grinder”). Several members described option 2 as the "cleanest" for staff.
Staff cautioned the exact surplus will not be final until year-end closings are complete. Love said the books will not be closed until October and staff expects to be able to provide a firm reserve number in November. Council set a procedural next step: staff will return with a final adoption package on Sept. 8 and a post-close allocation review in November.
On permitting revenue, staff explained a systems mapping error produced double counted permit receipts in the proposed budget; finance reduced several permit-line items in the revised document by roughly $2.255 million and reported a consolidated projected permitting revenue of about $3.5 million for FY26.
On training and travel, staff said they applied a five-year lookback and reduced what had been an aggregate overestimation by roughly half while leaving departments with budgets above recent actuals; Finance Director Kimberly said she and staff will work with departments if additional training funds are required.
Mayor pushed back on misinformation circulating outside the meeting: "Recently, people have been talking about that the ambulance response time is 18 minutes. That is crazy. There is nothing in the data that supports anything like that," the mayor said, asking council to be careful with public language about service levels.
Next steps: Staff will publish the final revised adoption packet and supporting spreadsheets for Sept. 8 and return after the fiscal-year close with final surplus/reserve numbers and recommended project allocations.
