City Blowing Through Its Fund Balance? | Jackson Free Press | Jackson, MS

City Blowing Through Its Fund Balance?

Director of Finance and Administration Charles Hatcher said his office is most concerned that groups can ask the city council for funds, without a process.

Director of Finance and Administration Charles Hatcher said his office is most concerned that groups can ask the city council for funds, without a process. Photo by Imani Khayyam.

— The Jackson City Council meetings are falling into a chaotic pattern—the later it gets into the meeting, the more likely you are to see a show-stopping argument between members of the council. Now it seems the disorganization has potential to put the City's fund balance at risk.

The infighting during May 22's meeting involved both the budget and racial tensions. Ward 3 Councilman Kenneth Stokes proposed an item for the council to authorize a grant worth $15,000 to support the annual Farish Street Heritage Festival. Although the City tends to support the festival, it was not included ahead of time as a line item in the budget.

Ward 2 Councilman Melvin Priester Jr. said he did not travel last year because he knew something would come up, and he ended up finding the money for the Farish Street Festival in the city clerk's budget.

At voting time, Stokes had not yet determined where in the budget the money would come from. Alberta Gibson and Lee Davis, who chair the festival pled their case before the council and the mayor to get financial support for the two-day festival.

Mayor Chokwe A. Lumumba, who said he supports Farish Street and the festival, wants to return to a request-for-proposal process instead of having people come to council meetings to persuade the members to find money, especially when he hopes to use some of the City's fund balance, also called the emergency or "rainy day fund," to help out with youth programming in particular. Lumumba encouraged the Farish Street representatives to come to budget hearings this summer so that they can be included more formally next time.

"We do all this politicking at a later hour when were talking about going into an emergency fund. ... [W]e have some very real emergencies," the mayor said.

Ward 7 Councilwoman Virgi Lindsay said that she would offer assistance with fundraising for the festival, but that she was concerned about being fair.

"The question remains is just this: ... it's your festival today and another festival tomorrow, and who decides which festival we choose to fund out of the fund balance?" she said. "It is truly a question of fairness in my mind. That's all."

The council voted 5-2, with Lindsay and Ashby Foote of Ward 1 voting nay. The council had moved on to yet another item—the Jackson Music Awards—that could cost the City $10,000 if the council approves the budget revision Stamps said he will present at the next meeting. Although the council was set to move on to yet another item that ended up drawing $6,000 from the fund balance, Stokes brought the conversation back to Farish Street.

"You've got to look at the City, how people feel when they watch these council meetings," Stokes said. "Two whites vote against Farish Street, and then we say we're working on race relations? Somebody's gonna say it. Imma say it." He was referring to Foote and Lindsay.

"The people are not saying that," Priester chimed back.

"Yes, they are saying that," Stokes said, repeating himself louder.

"You are making it worse by—" Priester began before Stokes interrupted.

Stamps gathered his things and left the council meeting for the night.

"No, I'm telling it like it is," Stokes said. "You go down State Street and see all the work going on in Fondren, but yet you can't support Farish Street?"

Council President Charles Tillman of Ward 5 rapped his gavel down.

"I'm tired of it being this level of discourse," Priester said.

"You can be tired, but it's the truth," Stokes said. "And the truth is going to keep coming out. The white areas are getting better than the black areas in this city, and this is a black-majority city. It ain't right."

"I would just add that the work is going on in your ward," Mayor Lumumba said to Stokes.

There could be serious repercussions if the council continues to spend money in the fund balance, which the City might need to use to repay its debts very soon.

Charles Hatcher, the director of the Department of Finance and Administration, believes that the city council will move the money from the fund balance to go toward Farish Street, although he does not necessarily support it.

"The principle that most disturbed the administration is that you can ask for money without a process," Hatcher told the Jackson Free Press. "All you need to get money from the council is four votes. That doesn't seem like good government."

Hatcher estimates that the City has around $12 million unassigned in the fund balance, and although sums such as $15,000 pail in comparison, there is a bigger picture—and it's a scary one.

"When you look at how much we're going to need to spend, and how much (we're) going to make in the next six years, that fund balance is going to evaporate in the next three years," Hatcher said. "[W]e need a strategy for building it up. It undermines that effort when we pick away at it."

The council also recently approved a raise for the part-time city clerks that drew nearly $117,000 out of the fund balance, causing uproar among City employees.

If the City goes into a negative fund balance, it would be insolvent, and the State of Mississippi could get involved.

Hatcher brings up six years a lot, and it's intentional. Jackson could be "out of the woods" concerning major debt payments to bondholders by 2024. However, in the meantime, Hatcher hopes to drive home the importance of more revenue and guarding the fund balance.

Like the mayor, Hatcher said cutting into the fund balance like the council has been doing, is like having a lot of money in your wallet but a big credit-card bill, so it becomes irresponsible to spend the money in your wallet.

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