City's Debt Crisis Looms | Jackson Free Press | Jackson, MS

City's Debt Crisis Looms

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The Jackson City Council has put the brakes on the administration's plan to re-finance the city's debt to fill holes in the budget.

Councilmembers Margaret Barrett-Simon, Leslie McLemore, Marshand Crisler and new Councilman Jeff Weill voted against the plan at Monday's budget meeting, which would have given the city almost $6 million by 2008, but would have cost the city almost $7 million in higher interest rates over 17 years, plus $750,000 in initial costs. The $113,000-salaried City Attorney Sarah O'Reilly-Evans admitted—after considerable badgering by the Jackson Free Press—that she would have gotten an extra $35,000 in attorney fees for her service in the debt restructuring plan, thanks to a controversial stipulation in her employment contract.

A majority of council members deemed the restructuring plan too costly in the long term.

"I have misgivings about making such a serious decision on such short notice," Barrett-Simon said. "With our budget like it is, I think the last thing we need to do is lay our debt upon those who will follow us."

The city administration updated an earlier estimation of a $3.9 million budget deficit at last week's budget meeting. "The city is currently out of budget about $13.1 million," said city Director of Administration Rick Hill last week, before recommending the doomed debt-restructuring plan and drastic cuts to the Department of Parks and Recreation and JATRAN.

Adding to the shortfall is an unanticipated drop of $2.6 million in sales revenue and another $800,000 drop in public franchise fees—taxes the city collects through utility companies, thanks to a decrease in energy and utility consumption from the city's declining municipal population.

Also contributing to the $13.1 million "out of budget" figure is a list of new expenses, such as $250,000 in building maintenance; $344,000 for Thalia Mara roof repairs; and about $300,000 for police academy training, among other things. Because the city fell below federal qualifying goals for police recruitment, the city must also pick up a $1.8 million police salary tab that otherwise would have been financed by the federal COPS program.

Adding to the shortfall is a $4.3 million wish list from the mayor's office, including a $2 million payment for the mayor's misdemeanor work camp; a $611,820 pay raise for police personnel; a $549,278 raise for firemen, as stipulated by a union contract linking fire-fighter raises to police raises; and a $765,323 increase for overtime and special events.

The council has largely written off the wish list, choosing to focus its attention upon the more immediate $3.9 million shortfall, which could put the city on the wrong side of the law. Mandates demand the council adopt a fully balanced budget by Oct. 1.

Crisler and Barrett-Simon said they resented making draconian decisions so late in the process, complaining that earlier administrations had come to the council long before the last 30 days of the budget deadline, with more information and options.

"I've been on this council for years, and I distinctly remember every year we had a lot of information that would've already been supplied to us. What we affectionately call the 'Budget Bible' would have been distributed to us by now, containing line items, yet here we are knocking on the door of (the cut-off date)… It makes it very difficult for me as a council member to make informed decisions on this matter when we don't have all the information," Crisler said.

Hill said the finance staff had been working to figure out a plan before going to the council. "We've been working for months over there … we didn't want to bring the council something that wasn't well thought out … quite frankly, we didn't have it balanced," Hill said.

"When did you first know we were in trouble?" Crisler asked. "What month?"

"Probably March, February or March," Hill answered.

"Had we been notified, we could have been having hearings early, but now we're on the eve of the deadline, and I feel like my arm's being twisted a little bit," Crisler said.

Ruling out the debt-restructuring option now leaves Hill only a handful of alternatives to balance the budget. Those options include hacking away at the city's more than 2,000 employees, borrowing against revenue estimates for cellular tower leasing and raiding the city's budget reserve fund—which could have a heavy impact upon the city's delicate credit rating.

Weill came off as favorable toward the idea of cutting city staff last week. "When I inform people of how many employees the city has, they sometimes act surprised," Weill said.

The city has been steadily cutting staff and shutting down positions for 10 years, however, leaving what some council members consider to be the barest minimum of staff. More than 50 percent of city staff contains fire and police staff, while another significant portion contains Public Works people, who fix streets and keep the toilets flushing.

McLemore, unable to contain his sarcasm, urged Weill to meet with Hill to learn where he could "cut some fat."

Previous Comments

ID
68036
Comment

I really don't know what the problem is: frank was left unchecked by the Council for almost 2 1/2 years. All of the laughing, loud talking by Stokes, passicivity and ignorance of Tillman, and the lying and covering up which is not a novel situation for Bluntson, have come back to bite the citizens of Jackson. It's TOO little, TOO LATE. The answer to the budget problem is to get rid of melton, quick, fast and in a hurry. Isn't it interesting that he has no surrendered his salary?

Author
justjess
Date
2007-09-10T10:06:47-06:00
ID
68037
Comment

I'm sad to say it, but it may also be that Ben Allen's "why can't we all get along" swing-vote schtick exacerbated the problem. Now he's gone, and the rest of Council have to deal with the problems that were left unchecked, and he's having a grand ole time on radio and TV yelping about Jackson's problems again. I dunno. I admire many of the things he did, but he provide cover for Melton, intentionally or not. And he was wishy-washy about it in his public comments—much more outraged over Ramie Ford and the D.C. lobbyist's ousting than about anything else.

Author
DonnaLadd
Date
2007-09-10T10:13:56-06:00
ID
68038
Comment

Allen was wishy-washy and didn't even attempt to put frank in check until the Ford and D.C. lobbyist ousting. He was also a closet supporter of melton when he ran against Johnson; however, he was reduced to tears and with a great apology to a certain Councilperson for the mistake he made in supporting melton. I don't want to hear anything from Allen as it relates to this City. He had a chance to help make a difference and he didn't. My hope is that the newly elected person from Ward I will be a better representative.

Author
justjess
Date
2007-09-10T10:34:40-06:00
ID
68039
Comment

I kind of hear you, justjess. As much as I like him as a person, Allen was a drama king in his own right. And that radio show he does with Nesbit is downright trash, and always has been. It helped Melton get elected in the first place by overplaying crime fears and making it look like an effective mayor and police chief weren't doing their jobs. It's really too bad that he is willing to stoop so low. He should hold himself to higher standards. So far, it looks like Mr. Weill is doing a pretty good job. I have high hopes as well.

Author
DonnaLadd
Date
2007-09-10T10:47:21-06:00

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