Jonesboro City Council Working Session: 2026 Budget Overview

Council members and city officials convened for a working session on Friday afternoon, December 5, 2025, to discuss the proposed 2026 budget. Mayor Copenhager opened the session by addressing the "20,000-pound elephant" regarding the City serving as a trustee for City Star's financial activities following a Department of Justice meeting, confirming that children's sports programs will continue while the financial baseline is established. Chief Steve Pratte then presented a detailed budget overview, emphasizing a strategy of consistency and fiscal responsibility. The session featured extensive Q&A regarding revenue streams, employee compensation, capital improvements, reserve funds, and long-term infrastructure needs, with no final action taken as the agenda will move to the Finance Committee on the following Tuesday.

Consent Calendar

• No routine consent calendar items were presented or approved; the session was designated strictly as a working session for discussion and questions.

Public Comments & Testimony

• No formal public comments were recorded during this closed council working session, though the Mayor noted that the public is invited to review the budget documents available online and attend the upcoming Finance Committee meeting.

Discussion Items

• City Star Trustee Arrangement: Mayor Copenhager stated that the City is prepared to serve as a trustee for City Star's financial activities. He expressed that the Department of Justice has no concerns with current protocols. The Mayor emphasized that while this will be a budget impact, the exact cost is unpredictable until a baseline is established, and the City Star board has voted to collaborate on this transition to ensure youth sports programs continue without issue.
• Budget Philosophy and Salaries: Mayor Copenhager stated that the 2026 budget prioritizes consistency, noting there are no new revenue streams. He confirmed the budget includes a two percent annual step increase in salaries plus a two percent cost of living adjustment. Dr. Coleman questioned if the two percent increase was adequate for specialized staff (HVC, IT, sanitation), expressing concern that competitive market pressure might require higher pay. Councilmember Bryan noted that sanitation and entry-level worker pay has increased nearly 40 percent over a 10-year period despite these small annual adjustments.
• Captive Insurance Program: CFO Pratte explained that the city entered a captive insurance program, which successfully decreased overall claim activity by two million dollars from the previous year. He contrasted this with the national market trend of 13-15 percent premium increases, noting that without this program, premium increases would have been projected between 25 percent and 48 percent. Pratte stated that claims dropped from ten million dollars to approximately eight million dollars in 2024, demonstrating the program's efficacy.
• Capital Improvements and Bonding: Pratty detailed the use of a 17.5 million dollar bond approved in mid-2025 to fund the E911 safety center, Caraway Road expansion, and pedestrian trail connections. Councilmember Hafner expressed concern regarding the growing Capital Improvement Carryover Fund (increasing from 6.3 million to 11.1 million) and asked when specific long-standing projects, such as the 50 Spot parking lot and Loop Road overlays, would be completed. Engineering staff confirmed they are reviewing the fund and will work to realign or reassign funds if projects are deferred. Dr. Coleman inquired if the remaining 1.6 million in bond proceeds had a specific timeline for expenditure, clarifying that while there are constraints, the goal is to utilize funds effectively within the three-year window, though the specific projects for that remaining amount are still being identified.
• Revenue Limitations and Infrastructure Costs: A significant portion of the discussion focused on the constraints of the one-cent sales tax revenue. Councilmember Bryan argued that the limited revenue stream prevents the city from addressing all needs, citing that 70 million dollars of economic activity yields only 700,000 dollars in tax revenue. He expressed concern that residential growth in Valley View (3,000 lots) may not generate enough sales tax to cover the infrastructure costs required to serve those new residents. Councilmember Coleman and the Mayor discussed the lack of property taxes and sanitation fees for apartment complexes in Jonesboro compared to neighboring cities, noting the city provides nearly $1.5 million annually in free sanitation services to commercial complexes.
• Police and Fire Department Staffing: Chief Elliott (Police) stated that the department is currently 15 officers short of full staffing. He expressed that while the city is preparing the budget for a fully staffed force, the primary challenge nationwide is recruiting qualified applicants. Elliott noted that the department is currently at a critical retention point due to high retirement eligibility among command staff (six eligible this year, eight next year) and the mental toll of the job, though the new health and wellness program has improved retention. He stated that once the department reaches full staffing, he will immediately seek federal grants for expansion. Regarding the Fire Department, the Mayor and Chief noted similar pressures, with new fire stations and equipment costing two million dollars; the city has appropriated 25 percent of this cost, with City Water and Light agreeing to fund the remaining 1.2 million over two cycles.
• Reserve Analysis and Interest Rates: The discussion covered the city's reserve position, forecasting roughly 20 million dollars in unappropriated reserves, which provides approximately 3.8 months of spending power against a required 1-2 months. Dr. Coleman suggested exploring short-term CDs to earn higher yields on the 2.8 percent currently earned on checking accounts. Pratte confirmed that while the current rate is competitive, the city would be open to re-evaluating investment strategies, though the current provider includes significant free services that offset the yield difference.

Key Outcomes

• No Vote Taken: As a working session, no formal votes or approvals were taken on the 2026 budget or the City Star trustee arrangement.
• Referral to Finance Committee: The budget presentation has been referred to the Finance Committee for the next Tuesday meeting, where action will be taken on whether to forward the budget to the full council.
• Future Considerations: The Mayor and Council agreed to revisit budget requests, specifically regarding employee compensation and the allocation of the 1.6 million dollar remaining bond proceeds, following first-quarter results to assess growth trends and economic impacts. Councilmember Bryan recommended the council consider a potential half-cent sales tax increase or other revenue sources to accommodate long-term public safety and infrastructure needs as the city continues to grow.
• Sanitation Fee Review: Council requested a review or re-examination of the internal costs associated with free sanitation services provided to apartment complexes, potentially referencing a past study on the matter.
• Investment Strategy Review: The finance department agreed to investigate potential short-term investment vehicles (such as CDs) to optimize returns on reserve funds while maintaining liquidity and FDIC insurance standards.