JC's fund balance sees slight uptick in FY26, rainy day fund still subpar

While its "rainy day" fund continues to lag behind state recommendations, Johnson City's overall general fund balance saw a $3.4 million increase in fiscal year 2026, according to financial data recently presented to city commissioners. Revenues to cover the city's $120 million operating budget came in around nearly three-percent above what was originally budgeted for in fiscal year 2026, according to Stephanie Laos, the city's finance director, during a presentation to the board Thursday. Expenses also came in slightly less than budgeted for, overall. As of the fiscal year-end, the city's general fund sits at $34.7 million, according to the unaudited financial statement Laos presented. The city's "rainy day" fund — also known as a stabilization fund or unrestricted fund balance — still falls short of state recommendations. As most regulators for public finance, the Tennessee Comptroller of the Treasury recommends local governments have at least two months worth of operating expenses on hand in their rainy day fund. That equates to around 16 to 17% of an organization's current budget. According to Laos, the city's rainy day fund currently stands at $18.5 million or around 14.5% of its current budget.Meeting this standard can help the city's creditworthiness and subsequently its bond rating, according to state comptroller guidelines. The city's rainy day fund was significantly depleted in 2025 after a legal settlement paid out $30 million to alleged victims of convicted child sex abuser Sean Williams.As of June, the city's rainy day fund makes up 53% of its general fund balance. Forty-six-percent of the fund balance is already budgeted for or set aside for future use. The remaining 1% is non-spendable dollars Freedom Hall fund The previous fiscal year financial statements for the city's Freedom Hall fund show expenses outweighed revenues by $856,270, according to Laos' presentation. Freedom Hall revenues were $1.7 million (17.1% above budget), while expenses in FY26 were $2.6 million (34.5%) above budget. However, Laos said Freedom Hall's statements don't do justice to the building's wider economic impact citywide."It is hard to look at their financials and really paint a picture of what their impact is," Laos said.The Big South tournament, hosted by Freedom Hall during the month of March, is one of the city's biggest economic drivers each year. According to local sales tax revenue numbers, March has been the city's second-highest performing month for sales tax revenue over the past five years. The city's finances are currently undergoing an annual independent audit as required for all local governments under state law. The FY26 financial statements Laos presented are technically not official until the audit is completed and submitted to the state in December.