Jackson Free Press

JACKSON — The Jackson City Council finally heard Thursday what some members had already surmised in earlier meetings: The City administration has pulled from the ordinance-mandated fund reserves, leaving a little more than a million dollars for use in case of an emergency or to meet unforeseen budget shortfalls.

"Once we take into account the items that we have that we project will hit FY 15-16," Director of Administration Michelle Battee-Day said, "for '15-'16, based on $113 million revenue budget, the 7.5 percent amount that we should have for '15-'16 is $8,535,714. Once we make those deductions, that leaves us with $1,385,670."

Battee-Day sent a memo to the mayor and city council on May 9 saying that the City administration will likely need to draw $7,150,044 out of the reserve fund for fiscal-year 2015-2016. The reserve-fund deficiency was around $4 million for fiscal-year 2014-2015.

City ordinance requires a reserve fund to be set aside in an amount based on the projected total revenue, which can offset the shortfall for the 2015-2016 budget.

Without swift action, this could mean cuts to core services and more austere budgeting practices in a City already strapped for cash, especially considering numerous challenges to its ability to generate and maintain revenue over the last several months.

After days of pressure from the council to provide specifics, Mayor Tony Yarber's administration handed out a memo with steps for tackling the cash crisis, including recommendations to cut spending, including the possible suspension of the youth employment and summer enrichment programs. The memo defines these "core services" as those that "extend beyond safety, water, and wastewater and infrastructure (streets and bridges)."

"Our citizens have benefited tremendously from these services, but the cost of providing them has begun to drain the city of much-needed resources, which has affected the city's ability to provide core services," Yarber said.

The administration also suggests creating a "budget stabilization fund" that, the memos says, "will provide a mechanism by which funds which exceed budget needs (including the required fund balance) may be set aside."

The City will also freeze hiring and non-emergency overtime, the memo states. Yarber said during the meeting that these recommendations were the result of an "up-front" attitude about the budget.

"Over the past several days, there have been very specific accusations that the administration—or the mayor more specifically—has been dodging council questions concerning the budget, and that could not be further from the truth," Yarber said during the May 12 meeting.

"Fund-balance issues did not just arise," Yarber said, recalling a recent council decision in February to pull from the reserve fund to pay for an insurance obligation that the City held. He also said that it will be up to the council to make decisions about where to cut.

"You see, ladies and gentlemen, the budget master is and always has been the City Council," Yarber said. "The budget is what makes the Council strong."

Some of the council members were frustrated that the reserve, in years past almost a sacrosanct emergency cushion for the city, had been leveraged to this extent.

"I think we knew what the situation is," Ward 7 Councilwoman Margaret Barrett-Simon said after the meeting, indicating that she did not know earlier how deep a deficit the city faced. "That the 7.5 percent that we set by ordinance, not policy, mind you, but by ordinance, has been dipped into to this extent."

"And I frankly don't understand how that could be legal without some action by council. Every mayor since 2004 has honored that and always been believed to be untouchable," she added.

City Attorney James Anderson told the council that consequences for breaking the ordinance "cease to be a real issue at this point." He said that the ordinance was more of a guiding point, rather than a punitive measure. In a copy of the ordinance obtained by the Jackson Free Press during Tuesday's meeting, there is no language outlining any penalty for not maintaining the 7.5-percent reserve.

As Yarber and his administration talked about finding new sources of revenue, Ward 1 Councilman Ashby Foote dismissed quickly the idea that expanding certain programs, such as the practically defunct parking-meter system, this late in the game could turn the budget around.

"There aren't enough meters in Mississippi to cover this budget," Foote said.

"We don't have time to be in this internal strife mode," Ward 4 Councilman De'Keither Stamps said. "We must be in this unity mode to move the city forward."

Throughout the discussions, the mayor insisted that the council approve the budget, knowing that it could not meet the demands of the services that the city provides.

The mayor said that he had intended at today's meeting to present details about the bio-solids and other contracts associated with the Environmental Protection Agency Consent Decree, but after an hour-long discourse between the council and administrative representatives, Yarber asked that the issue be tabled for the second time this week.

Michael Thomas of Systems Consultants, retained by the City to help address financial issues, outlined how the City could look through the budget to "create new revenue opportunities for the City of Jackson."

"The first recommendation is that you freeze all non-essential spending for the rest of the year," Thomas told the council. He said that the City should go through each department to see where they can create savings.

He said that if they freeze spending, the City would save $1.4 million to begin the process of revitalizing the dwindling fund reserve.

"The recommendation is pretty general," Yarber said. "What we would probably like to do is come back with a specific analysis that helps us to better determine which of those agencies are performing, which of those agencies ... we may determine have waste, fraud and abuse that we may need to look at reducing general fund allocation to."

"But again, ultimately the decision will be the council's."

Email city reporter Tim Summers Jr. news tips at [email protected]. For more city coverage, visit jfp.ms/localnews.