Jackson Free Press

*Updated/Web Exclusive*

The Melton administration this week proposed to dip into the city's budget reserves in an attempt to cauterize the bleeding city budget—and even pay rent on police precincts that are months behind. The news of the budget crisis came in the wake of city moves to waive millions of dollars in fees to downtown developers.

The Jackson Free Press broke the news on Aug. 3 that Jackson Chief Finance Officer Rick Hill believed the city would have to snag some money out of its $7 million reserve fund to cover almost $4 million in budget shortfalls this year.

The administration said Monday at a Council work session that it is calling for a budget transfer of $3 million from the general fund "to pay the salary costs of police officers that have exhausted their COPS Hiring Grant eligibility" and for funding police overtime.

The city council voted to put that item and three other items dealing with the budget into a budget committee meeting for next Monday.

The order, approved by city attorney Sarah O'Reilly-Evans, explains that the administration put the issue of the budget transfer before the council because "attempts to locate sources of funds within the adopted categories have been unsuccessful."

Council members Marshand Crisler and Margaret Barrett-Simon said they are nervous at the prospect of the budget transfer. Tapping the reserve fund could affect the city's credit rating.

Rating agencies such as Standard and Poor's and Moody's Financial Services base interest rates for city projects upon what percentage of the city budget the municipality can spare for its reserve fund. Less money in the reserve indicates how well the city is either spending or making money. Rating agencies generally prefer a reserve fund containing at least 5.5 percent of the city's budget. Anything below that and the city could see its interest rate increase. The city's 2006-07 revised budget was roughly $119 million.

"The problem with the budget is obvious," said Councilman Charles Tillman, chairman of the budget committee. "There's no money."

Tapping the reserve fund is nothing new to the city, though the city council and the last administration vowed to discourage the act after tapping the reserve fund for $2 million. City administration came close to tapping the reserve fund last year, but decided to instead impose a mill increase on home taxes and car tag costs and make cuts to city services. A timely $550,000 settlement with KGEN, LLC, also slaked the administration's desire to tap reserves. The city successfully proved in Hinds County Chancery Court that KGEN, LLC paid an abnormally cheap price for a coal plant near Hwy 220, in that case, so KGEN forked over the proposed difference.

Crisler used the impending budget shortfall as argument against the city's recent decision to waive building, construction and connection fees to some developments in the city's central business district, in the downtown area.

The council voted 5-to-1 in favor of an ordinance change that would waive fees to developments costing more than $50 million—such as Pinnacle at Jackson Place—as an incentive to encourage more construction in the city's heart.

Crisler, the only 'no' vote in that July ordinance change, stopped short of labeling the move "corporate welfare," but did call it a "case of extreme bad timing."

"I'm pro-business, but I have to be more pro-Jackson and more pro-citizens, because that's who sent me down here. We agreed in the interim that we would put together some incentives (for Pinnacle), but I don't think that any of us, Pinnacle included, thought we would wind up waiving the same fees for everybody," Crisler said, explaining that city attorneys later informed the council after the agreement that reserving the fee waivers exclusively to Pinnacle was illegal.

Steve Rogers, CEO of Parkway Properties, which is building Pinnacle, a multi-use facility including office space, condominiums, apartments and retail space, said the ordinance change will keep the city competitive with Madison and Rankin Counties.

"We promised our customers—the tenants, the law firms coming into our buildings—that we would pass those savings on to them so they could stay in downtown Jackson," Rogers said, claiming the more affordable rent sealed the decision of many clients agreeing to set up shop in the Pinnacle.

Rogers said the one-time waiver for Pinnacle would cost the city a little more than $100,000. Other companies could line up to take advantage of the fee waiver, however, such as Dallas developer Mark Small and TCI-MS. Small, connected to Texas real estate magnate Gene Phillips, signed a memorandum of understanding with the Jackson Redevelopment Authority in June on a hotel, housing and retail development project connected to the incoming Capital City Convention Center. That project will easily cost more than $120 million.

Crisler said that the fee waivers, despite their one-time nature, could cost the city up to $1 million on the numerous downtown projects, like Pinnacle, lining up for construction over the next five years.

"You've got the King Edward Hotel, the Standard Life Building, the Old Capital Green Project. I'm hearing out of the department of finance that this could cost us between $500,000 and $1 million," Crisler said.

Retiring Ward 1 Councilman Ben Allen, who resigned last month over health concerns, said the fee waiver was a good thing, despite budget woes.

"You have to deal with the world the way it is, not the way you want it to be, and when you've got competitors who are not charging these kinds of prices it's a hard pill to swallow," Allen said, criticizing the city's policy of charging building permit fees based upon the cost of the building.

"You have to understand that the permit fees set up in Jackson is different from most communities. … Some of them are looking at spending $100,000 for a building permit, or $200,000 for a building permit, so they'll say 'forget it. We're going to Madison.' I'm not aware of any other city that has its permit process as tied to property value as us. It seems to punish large investment."

In addition to the reserve tap, two other items tabled until next Monday include the administration's plan to refinance city debt through general obligation bonds, though Crisler criticized that method as unorthodox.

"That idea is irregular because general obligation bonds are basically bonds that allow cities to court new development, but we're looking at them to offset shortages in our revenue. Now they're telling me that on top of the reserve tap and the g.o. bond, there's still a chance that residents could face a mill or fee increase or a cut to city services. This is a mess," Crisler said.

The city will have to discover a means to cover holes by Sept. 30, however, when the council must approve a balanced city budget. The shortfalls the city is working with, in the meantime, are obvious.

Two administrations have been cutting city staff positions for eight years, and city residents complain of holes in city services, such as code enforcement, which has fewer than 10 individuals whizzing around the city checking code violations. Police Chief Shirlene Anderson said the city is also months behind on rent payments on the property housing Precinct 2.

"We shouldn't have been paying them for years," Anderson said, complaining that the city withheld payment because the property is decaying and has no air conditioning. Anderson said she is working to move Precinct 2 to a new location. The chief said the city leases the property from G.E. Modular for more than $3,000 a month. G.E. Modular, in Jackson, refused comment.

In other council news, the council agreed at the Monday work session to withhold a decision on six properties inside the Historic Farish Street District until Aug. 20.

"We need more information about the property in that area," said Councilwoman Margaret Barrett-Simon. "If we demolish too much of that property we risk losing the historic designation of that district, and many developers depend on the federal money available through that historic designation."

The issue of the demolition was before the council after the Jackson Historic Preservation Commission denied Mayor Frank Melton's request to tear down the buildings.

The commission also denied Melton's demand to tear down a wood recycling company, A-1 Pallets, at 1000 N. Mill St. A-1 Pallet property-owner Charlotte Reeves said she had expected her property to be included on the docket, but was not on the agenda that day.

Previous Comments

ID

94590

Comment

Well, it seems safe to say it now: Team Melton has just about broken the city. There are no excuses for this. It's sheer incompetence, or worse. Happy, Melonheads?

Author

DonnaLadd

Date

2007-08-13T17:28:22-06:00

ID

94591

Comment

Who balanced the books when he ran Channel 3? More fodder for an intelligent opponent.

Author

Ironghost

Date

2007-08-13T19:09:06-06:00

ID

94592

Comment

Sooooooo.......I guess cutting back on the pay of all the overpaid, underqualified buddies of ole FM is out of the question? How can you come and ask for MORE money when you screwed up the money you were already given? Is this why we haven't heard from FM since he came back from boy camp? Is this what he has been working on? I am reallydisgusted with the entire administration.

Author

honey2me

Date

2007-08-13T19:16:52-06:00

ID

94593

Comment

Unfortunately, since the majority of voters of Jackson only want entertainment, not progress...

Author

Ironghost

Date

2007-08-13T20:44:33-06:00

ID

94594

Comment

Tapping the reserve fund could affect the city’s credit rating. How exactly does that work?

Author

LatashaWillis

Date

2007-08-13T20:52:07-06:00

ID

94595

Comment

I fear you're right on that one, Iron. There is one editor, whom I will abstain from naming, who laughs about Melton every time I talk to him, although he knows he's a liar on so many issues. Entertainment, indeed. Of course, I haven't seen this dude lately. Maybe he's changed him mind, too.

Author

DonnaLadd

Date

2007-08-13T20:57:24-06:00

ID

94596

Comment

Who balanced the books when he ran Channel 3? Maybe it was Joe Jackson? I mean, he left the FBI to work as Melton's No. 2 man (for $140,000, I believe) after he was told to investigate him, Bluntson, etc., back in the '90s. Although, Melton told me Jackson was basically in charge of guarding him from all the police and drug dealers who was after him. So, maybe be didn't have time to balance the books, either.

Author

DonnaLadd

Date

2007-08-13T20:59:57-06:00

ID

94597

Comment

NFL football and then Seinfeld drove that station. Too bad he doesn't have help like that now!

Author

pikersam

Date

2007-08-13T21:02:15-06:00

ID

94598

Comment

Tapping the reserve fund could affect the city’s credit rating. How exactly does that work? L.W. I think it works pretty much like an individual's credit rating: the lower the credit score the more expensive it is to borrow money. A lower credit rating for the city would make borrowing money through bond issues more expensive, which would of course increase the city's budget problems further.

Author

Justin

Date

2007-08-13T22:22:08-06:00

ID

94599

Comment

Thanks, Justin. I assumed that it was more complicated.

Author

LatashaWillis

Date

2007-08-13T22:44:30-06:00

ID

94600

Comment

Surely none of this is a surprise. FM hired staff at ridiculous salaries, he was using the Command Unit like it was a VW roaming around town. Those police officers "hanging" out with him on raids are being paid overtime. Robert Walker has five assistant CAOs and to top it off Recio and Marcus are traveling with him on his "business" trips (no new business has actually come from any of these trips) paying all the expenses. These items are only the tip of the iceberg of his irresponsible spending and yes the SS City of Jackson is sinking. It will be interesting to see how this snake (FM) slithers out of this mess.

Author

maad

Date

2007-08-14T09:09:24-06:00

ID

94601

Comment

The Ledger got around to reporting this today, by the way—10 days after Adam broke the story. Right on schedule.

Author

DonnaLadd

Date

2007-08-14T09:10:37-06:00

ID

94602

Comment

Let's go back in melton's financial history with the city. (1) Did he ever pay back the money to the City for his bodyguard's vacation to the Bahamas? (2) Did the Council or melton do anything about the contract with SORE which allowed for $40,000 to be paid to her for the jps school bond. (3) What has been done about frank melton using 2 (two) body guards 24/7? (4). Does the salary continue for Jane Sargent who was being paid $85,000/yr as a consultant (remember the "City Plan" she authored without any numerical exactness). (5). frank worked for the MBN "free." Why is he accepting a salary from a city that he and his gang have bankrupted? (6). How much money has been taken out of the budget to pay Robert Schuler Smith for representing the police officers? (7). How much money has it cost tax payers for franks legal messes. (8) What does Carolyn Redd do for the City of Jackson to deserve her $80,000+ salary? Carolyn is frank's sister-in-law. Can anyone say, NEPOTISM??? frank had nothing to do with the financial operations of Channel 3. He also told the citizens of Jackson that he knew nothing about accounting or managing money. "I hire other people to do that." He also said that it was nothing to doing the job of mayor, "All you have to do is sit in an office and sign papers." This man told the people of Jackson that he was not qualified to be a mayor. I guess it just didn't matter.

Author

justjess

Date

2007-08-14T09:16:34-06:00

ID

94603

Comment

You are right, justjess. The city should be stepping up and showing every possible place where they can cut fat. And that includes payment for cronies just there to do the mayor's bidding. Especially them.

Author

DonnaLadd

Date

2007-08-14T09:26:23-06:00

ID

94604

Comment

L.W. It is a little more detailed than a credit score, but not much. Bond companies rate cities with A AA AAA or lower ratings. The factors that affect the rating include debt ratios, past payments and reserve funds on hand. Dipping into reserves funds is a key indicator that a city is struggling fiscally and many companies will drop a bond rating or at least consider it based on this red flag. Hope this helps AGamma627

Author

AGamm627

Date

2007-08-14T10:24:51-06:00

ID

94605

Comment

Which is the highest rating? A or AAA?

Author

LatashaWillis

Date

2007-08-14T11:06:38-06:00

ID

94606

Comment

L.W. Here is a site that did a good job explaining the ratings. http://www.munibondadvisor.com/rating.htm It also should be noted different companies use different ratings scales. I hope this helps. Bond ratings make a HUGE impact on cities and their budgets. That is something most people are not aware of. AGamma627

Author

AGamm627

Date

2007-08-14T12:09:45-06:00

ID

94607

Comment

Oh, Justjess, let's not forget about the City's cheerleader, Stephanie Parker-Weaver. Isn't she in one of those positions that pay around $70,000 with no defined job duties?

Author

honey2me

Date

2007-08-14T13:02:49-06:00

ID

94608

Comment

Don't forget the other cheerleader, higginbotham or whatever his name is. Is he still around? He was on contract for the city and all he did was "tote" the mayor's water...

Author

lanier77

Date

2007-08-14T15:08:46-06:00

ID

94609

Comment

It is really a sad state of affairs where this city is. I hate to think about if we only knew the full story of where we are financially what it would look like. I think Frank should be held accountable for paying the money back...Instead of using money from the reserve or rainy day fund, Melton should pay the $3 million that they need. This is yet another example of poor leadership!

Author

blkokc

Date

2007-08-14T15:34:42-06:00

ID

94610

Comment

Here is a site that did a good job explaining the ratings. Thanks, AGamm. That helps a lot.

Author

LatashaWillis

Date

2007-08-14T15:57:47-06:00

ID

94611

Comment

It is simply amzing to me that the city has not figured out yet....Melton was sent in to do exactly what he IS doing, NOTHING! I fear that he was put into place essentially to break this city down and I imagine that in the near future we will see a return of 'someone' who know longer holds any power (politically) and misses it, will return as the 'savior' of Jackson! It might just be my love of mystery that has set this plot within my head, but my personal account is that this was all pre-planned, although maybe not to the degree it has erupted into, so that the city is broken down ultimately to it's knees! Guess what - It's working!!!!

Author

Katie D

Date

2007-08-14T16:00:54-06:00

ID

94612

Comment

Who are you talking about, Katie?

Author

Kacy

Date

2007-08-14T16:17:44-06:00

ID

94613

Comment

By the way, Honey2me, I remember that Stephanie Parker Weaver was being paid less than $40K per year when JFP finally got responses to their queries under the public records act. She's actually undeserving of that, inasmuch as she spends most of her time campaigning for yet another Melton crony to get elected.

Author

Kacy

Date

2007-08-14T16:20:09-06:00

ID

94614

Comment

Yes, she said $37,000, although both she and Melton said something about him paying her more himself. Not sure what that meant.

Author

DonnaLadd

Date

2007-08-14T16:26:42-06:00

ID

94615

Comment

Police Chief Shirlene Anderson said the city is also months behind on rent payments on the property housing Precinct 2. “We shouldn’t have been paying them for years,” Anderson said, complaining that the city withheld payment because the property is decaying and has no air conditioning. Anderson said she is working to move Precinct 2 to a new location. The chief said the city leases the property from G.E. Modular for more than $3,000 a month. G.E. Modular, in Jackson, refused comment. I saw on channel 16 that the precinct will temporarily be on Pearl St. across from Standard Life.

Author

LatashaWillis

Date

2007-08-14T17:57:05-06:00

ID

94616

Comment

So! YOU people still won't let frankie do his job. I can't believe that you will not recognize genius when you see it. It's as if all of you are reactionaries, against all progress. You..YOU Luddites. The city needs to be broke.

Author

Cliff Cargill

Date

2007-08-14T18:03:30-06:00

ID

94617

Comment

Cliff, you are sounding more like Ray Carter with each post. LOL

Author

LatashaWillis

Date

2007-08-14T18:05:09-06:00

ID

94618

Comment

Thanks LW. I like reading Ray. As for the *Super-Star* that runs the city, there should be a tax increase. Hey, it takes lots of cash to have a crew....posse', or whatever the envouge term is. Give him more money.... I think frankie needs an avdance man. You know, one who's job it is to travel ahead to each location that his entourage plans to attend. He makes sure the suites at the hotels have a preordained assortment of fruit trays, tropical juices, beer, Cokes, Pepsi, liquour, hors d'oeuvres, and cheese plates....Must.Have Cheese.Plates. There is a complexity to all of this that rivals dimplomatic corps protocls. 39211, Get.The.Checkbook .Ready.

Author

Cliff Cargill

Date

2007-08-14T18:45:34-06:00

ID

94619

Comment

Must.Have Cheese.Plates. There is a certain mood on here today. ;-)

Author

DonnaLadd

Date

2007-08-14T19:11:51-06:00

ID

94620

Comment

I fear that he was put into place essentially to break this city down I was speaking with a guy on Sunday who feels the same way. L.W. knows who I'm talking about.

Author

golden eagle

Date

2007-08-14T19:28:11-06:00

ID

94621

Comment

Yeah, let's just pray that our city survives this latest onslaught.

Author

LatashaWillis

Date

2007-08-14T19:32:16-06:00

ID

94622

Comment

“The problem with the budget is obvious,” said Councilman Charles Tillman, chairman of the budget committee. “There’s no money.” Pretty sharp, huh?

Author

honey2me

Date

2007-08-14T21:19:20-06:00

ID

94623

Comment

i probably spend 2 or more hours a day reading these stories and blog postings, and every time i read something like this, i die a little inside. i've been so upset about people i know moving from jackson (35 in the past 12 months), but i've been thinking about moving more and more myself. i just can't believe things have gone this far. i love jackson more than any place on earth, and i will not sit by and watch this man and his staff ruin my city. between this insane debt, the corrupt politics, and horrible managment, i just don't see anything good happening until we get melton out of office. people need to wake up and realize that if we don't do something soon, he'll drive this city into the ground.

Author

katrina_h

Date

2007-08-14T21:40:11-06:00

ID

94624

Comment

..and you think that the situation just can't get any worse. Try this one on for size. The law firm of Phelps Dunbar has been given a contract to represent frank melton in his cases with A-1 Pallet Co., The Upper Level, and the mama drama with Batman. The cost for this representation is $185.00/hr. The City Council actually voted to hire this firm and pay this price. SORE, according to sources, is unable to represent him in cases of this magnitude. No SH!T!!!!!!!!! The City is BROKE! frank should have an appointed public defender represent him. What he did in each of these case was not in the scope of duty for the position of Mayor. No one could tell this idiot anything. His constant was, "I gotta do what I've gotta do." So, let him pay for his private defense or accept a court appointed attorney. Can you imagine what the final cost for all of these cases would be if paid on an hourly basis? Phelps Dunbar would own the City. I know that Ruebin Anderson and Fred Banks are lawyers in that firm. I wonder their positions on these issues? Honey2me, I thought the same thing about the Tillman comment. You talk about a nobrainer - this was truly a response from an airhead. Mr. Tillman has severe signs and symptoms of a person who is in trouble. How long will frank use him? There are so many things that he just does not understand. I've been asking, "Where Is frank?" I think I have the answer.

Author

justjess

Date

2007-08-15T08:35:42-06:00

ID

94625

Comment

His constant was, "I gotta do what I've gotta do." He said something like that to me at the second protest. Like Dr. Phil would say, "How's that working for ya?"

Author

LatashaWillis

Date

2007-08-15T09:02:07-06:00

ID

94626

Comment

know that Ruebin Anderson and Fred Banks are lawyers in that firm. So is Wilson Carroll, who happened to give money to Robert Smith against Peterson. Phelps Dunbar seems to be sitting pretty with this administration in office. For the record, they also represent The Clarion-Ledger in their TDN mess, which is still being investigated by the attorney general, as we understand it.

Author

DonnaLadd

Date

2007-08-15T09:16:48-06:00

ID

94627

Comment

and all of the time Ben Allen and others thought that Phelps Dunbar's involvement with the City was "pro bono." This only proves the point that there are no free lunches.

Author

justjess

Date

2007-08-15T12:49:02-06:00