Good afternoon.

It's approximately 106, and we'll call the order the finance committee meeting for the city of Jackson City Council.

Are there any announcements?

If no announcements, we'll go with the planned um presentation by CFO Caldwell.

Madam Chair, may I offer a couple of remarks to kind of set the table for the endeavor we're pursuing?

Okay.

Madam Committee Chair, Council Members, Peter Taywerson, CAO.

Please allow me a couple of minutes to outline the task before us.

Jackson has a math problem, except there is no textbook for what we are about to pursue.

That is reducing a municipal general fund budget by some 23 million dollars while also resolving another $7 million in water bills.

And we have but a few months to pull this off.

No municipality in the state of Mississippi has attempted to close a budget deficit of this size, a true $30 million dilemma.

The only cities that have faced anything like what we are facing are the coast cities after Katrina and Jackson after the flood of 1979.

But we are not receiving a federal bailout.

Today should serve as your introduction to the city's modernization discussions that address the math problem by balancing the budget while establishing a foundation for growing Jackson over what we anticipate will be a series of committee meetings.

You will drill down while we show you what math will and will not work for your priorities.

As the governing authorities, you will ultimately decide which math best fits your priorities, and we will implement those priorities.

So please view today as the first of several honest needed conversations that seek to balance the needs of the community with the economic reality of too many square miles and too few people, but never lose sight of the axioms that we cannot implement what we cannot fund, and we cannot spend what we do not have.

On behalf of the CFO and her team, as well as myself, we ask for your patience and temperance as we collectively work through the crucial conversations necessary for you, the governing authorities, to make the best of difficult decisions.

Is this a presentation that we're gonna get a copy of, or is it strictly what we're gonna see?

Yes, you'll get a copy.

Okay.

In the future, any presentations that deal with numbers, can we have them before you present them?

Yes.

Thank you, Jillian Caldwell, CFO.

Um we'll get started on our presentation.

Go make one slide.

So this is our um our plan to modernize the city of Jackson, and we're presenting it to you to get um your approval to move forward with some of these decisions and to make some of the decisions that'll be needed to put us into a better financial position.

Our plan um we we're expecting it to take a little over 12 to 18 months to um fully realize the impact that uh of this plan, and right now we see ourselves as being uh pretty much six months into this situation.

Um, for the last six months, we have really been digging through our re uh revenues and our expenses and just trying to right size, you know, the ship and and do things in a more efficient manner.

The uh uh one of the first um tasks that we have is to balance the budget.

Um we've realized that the budget that was adopted um last fall was approximately 24 million dollars over the budgeted revenues that we um foresee coming in this fiscal year, and so we want to bring the budget back into balance.

And the goal here, of course, is to modernize our workforce, um being more efficient in everything that we touch and do and restore public trust and build a fiscal foundation that supports long-term investment, yeah.

And so, as I just um just mentioned, our budget was adopted at 135 million, and our actual anticipated revenue is scheduled to be 112 million, which is a 23 million dollar shortfall.

Budgeting, go let's go back one second.

Budgeting beyond the revenue is not sustainable.

Um, in the past, the only way it happened is because we were able to you know utilize some of our fund balance in prior years to be able to function how we have we no longer have that option.

The fund balance is no longer at a in a position where it can allow us to continue to operate outside of our actual revenues that we're receiving, and of course, that's in direct violation of state statute as uh CAO Taywison mentioned.

This is a math problem.

Um approximately 20 years ago we had over 200,000 residents, and now we have less than 150,000, and so we have to modify our budget to flow with those changes the sales tax revenue has declined um for from years ago, uh 20 years ago, we have seen a decline in our sales tax revenue, and we have seen uh an inflation in our cost for the goods and services that we're paying for for the city.

Yes, sir.

So what is the break dollar of sales tax revenue?

How much standard sales tax and how much modernization so this does not include any modernization?

However, our sales tax is approximately two million a month, and our um modernization sales tax dollars are a little over a million.

Thank you.

So thank you.

That's just five minutes.

Yes, and so to all that's on that, but that's just five minutes.

Well, to bring it into perspective, um, a large part of what we're discussing today is the general fund, and your modernization funds are only designated for the purposes designated for that fund.

Yes, sir.

Yes, sir.

It's just a obvious thing.

Yes, okay.

So plus we want I agree the population has decreased.

We know all those things, but we want this to be a positive impact and not a negative story.

So I think the presentation is good, but I think really what we need to be looking at is the numbers and not you telling us how we've gotten here because we all know where we are.

And we know when we did this budget.

I think a lot of people don't know where we are.

Well, anyway.

Anyway, the council knows, okay.

But when we did this budget, we knew we did this budget with uh a deficit.

That was told to us when we presented the budget that we knew it was the deficit.

So we don't need to look like we surprised that we got a deficit today, right?

So that should not be what comes across out of this meeting because there's no surprise.

This budget was based on numbers that we know were not real at the time.

And so definitely as we go on through this presentation, you will see how we have made efforts to right size the ship, and we are doing positive things to bring it back into a better financial position.

Um is not all negative.

Um we have some really good, you know, uh city departments that are bringing in revenues from different sources and and even trying on a daily basis to find even more revenues and external funding that to help support our city.

So it is it is not all a dark picture.

It's not saying negative in terms of dark picture, I'm saying negative in terms of numbers because we knew the numbers when we put the numbers on paper.

Okay.

And so this um this screen is for is referring to our vacant properties and the um the blight across the city, and just showing you how it's a cycle of the population and the commercial flight leads to a surge in vacant properties, which leads to depressed um assessed values and increased municipal resource drain.

So when we look at the the city's workforce, um we have when we went through COVID, um that really impacted the city as far as the programs that we were able to bring.

And so we're now in a position where we're starting to rebound from that, and we're seeing the effects of our departments coming back out of that COVID area era and doing things in their department that to drive um the the um to drive the programming in their core services.

So our modernization plan is to um first find ways that we can increase our revenues and to be more efficient efficient with our cost and services.

Um phase one has been to address our audit findings, pay our obligations and restore the audit division, as well as um um bringing bringing some of our expenses back into the realization of what we where we were last year this time.

Our second phase will be to lean up our operations and shift our policies, and our third phase would be to um look more to our asset management and make sure we're accounting for all of our all of the city's assets, whether it's buildings, laptops, you name it.

One um one thing we've done in the last couple of months is we've met with every department and we've gone through their budget um line by line, and along with them, we have identified approximately 11 million dollars where we could reduce costs and see some savings.

We've also identified redundant positions in the department where we have um some are vacant, some may even be filled, but those positions are overlapping each other, and as the departments look to be more efficient, they're finding ways to cut some of those costs.

The we have some long-term debt um and lease obligations that'll be rolling off this year, and and with within the next 12 to 18 months that will also be able to allow us to save some funds, and our insurance premium is go is going up, it's the possibility our insurance premiums will be going up.

Um looking at how much the the fund 57, our insurance fund is costing the city.

So can I ask questions about the job?

Yes, sir.

So I'm gonna do something in the middle.

So this three year 26 budget is saying that this is we need to reduce the budget by 10 million dollars.

Yes, so one of our um steps we have taken so far is we've asked the departments to bring their budgets back in line where where they actually spent funds last year.

And so we brought them back to their FY25 amounts, and that allowed us to save 10 million seven hundred and twenty-seven thousand.

So are we going to get more detail on the million dollars?

Yes.

So far.

That's that was the first step.

Now that is an addition or a subtraction.

So those are some um potential savings.

I'm sorry.

Okay.

Yes, those are potential savings that we may be able to get um from the insurance funds.

So that's a subtraction too of 2.7, and hopefully you can get that in smaller premiums.

So that will be uh in addition to the 10 million.

The 10 million is just from the where we have asked the departments to go back to their FY25 budgets.

Okay.

These are some additional savings that we may be able to see.

Yeah, I want to go around the circle here.

So the public works, you're you're trying to reduce the public works budget by 2.96 million.

Their general fund budget, yes.

Their general fund budget.

Okay.

So what's the difference between their general fund budget and their non-general fund budget?

So public works has a several outside funds.

Um, as you're probably aware, they have the 40 million dollar bond, we have the modernization funds.

Those funds are pretty much handled by the public works department and allow them to um do projects within the city for infrastructure needs.

So there you're talking about you're gonna want you're gonna reduce the money they take from the general fund?

Yes.

So how do you do that?

If if the modernization funds, for instance, uh, I think they're what 18 million a year or something like that, I think something like that.

So the the um but you gotta spend that money the way the state dictates a modernization fund.

So how do you reduce it?

How do you go about reducing it by 2.96 million?

So again, this is the general fund we're discussing, and we have gone through their budget and their where they what they actually spent in last fiscal year, and that's how we were able to reduce their budget by the 2.96 million.

Okay, and then the general government 2.69 million.

What where is that money?

You got any specifics on that reduction of 2.69 million?

Yes, those are um that's a group of several city departments, um, and includes city council, the mayor's office, municipal, uh quarter, clerk of council's office.

So is now is that just a a general number you're using, but you haven't gotten down to specifics of where that money is gonna come out yet.

So what we've done so far is line by line, we have reduced the budget back to what was spent in FY25, line by line.

Okay, and so we in addition to working with the departments to make sure they have enough budget in you know, lines that they have identified is if it if it didn't work out mathematically like that, we worked with the department to make sure they had enough funds in their um accounts to do what they needed to do.

Okay, that's all the questions I got right now.

Sorry.

Thank you.

First, I have just uh clarifying question uh on how to read this chart because when I add two point nine six plus two point six nine plus one point two five plus one point two nine, I do not get seven ten point seven.

So what is the ten million seven hundred and twenty-seven thousand two hundred and two dollars, and how does that relate to the four quadrants plus the three modules Brandon Jackson finance manager?

So what you see um in the inside um with the departments, those are only the those are the um more major um decreases, declines um within the general fund.

Every department took a major hit on going back to the FY25 actuals.

The modules that you see on the outside are potential savings that we would actually um add to the 10.7 million dollars.

So make sure I understand the 10.7 million includes the amount we see there for public works, general governance, policing, and administration plus others that we don't see on the screen.

Yes, yes, sir.

All of that together equals 10.7.

Most definitely.

And what you're saying is in addition to the 10.7, which includes the four subsections here plus others that we don't see.

In addition to that, you see these three modules as even additional ways to save even additional funds.

So if we were to add those to that, two, three, six, that's seven, eight, nine million dollars that we get up to 20 million dollar savings.

Close to it.

Yes.

And so the 10.7 does include other departments that you do not see.

Um and it's also something that we've already done.

We've already worked with the departments to what is general governance.

I think it's a general governance includes other departments.

There are departments within general government.

So within general government, that would only include the mayor's office, um, city council, clerker council, um the appropriations of JRA and um other major appropriations that would include the appropriation to the zoo, um, the parks and recreation, um peg and uh and a couple of other uh departments as well.

In general governance, so again, we so yeah, we we literally with the 10.7 million dollars, we took um whatever were um whatever we actually spent in FY25 and took it um directly back to that.

So you take the 135 million dollars that we adopted um in September and you subtract um what was actually spent in FY25 and you get that 10.7 million dollar amount.

So is there a reason why um why didn't we when we were talking about the budget initially?

Why didn't we keep the twin FY25 actuals as the as the proposed budget there?

Why why did we we did not know them at the time we were doing the budget?

No, you don't know your FY25 actuals to your close your budget year September 30th, for which you then have 45 days to pay your bills, you have to adopt your budget by September 15th, but you don't know your FY25 actuals until November 15th.

My question is when we were doing our budget, we asked point blank what had been spent and what we had.

They might not have been your um actual numbers, but we asked and we were told that we were doing a flat budget and we were basing everything off those numbers, okay?

I know we didn't if we had spent the money or it was already out there, we weren't 20 million different than that number.

We kept asking continuously about those numbers, and that's what we were told.

So we were told something wrong then because you should have known what you had spent, and every time I asked what was in the bank or what we had, it was a different answer.

The flat line that we actually had a discussion about was what we actually adopted for FY25, and there was still a difference in between what we adopted for FY25 and what we actually spent for FY25.

We knew that all alone because of how far, just like the budget we working on right now, we know we have spent money and we know what it is, and we have never seen actuals for these six months, and that's what we keep asking about actuals.

So what we're doing does not tell true numbers.

No, it does not.

You look in, but if we if we come in here every two weeks and approve something, and we don't know what's in that fund at the end of those two weeks, then we really don't know what we have.

And that's why at the beginning of the new administration, we said that we would get a running balance on every account so we would know what we had.

We have not gotten any running balances.

So those monthly council reports, and that's something that I think was brought up a few months ago.

Um, you all said that you wanted to see a better format for those um council reports that you receiving monthly.

That's something that we're definitely open to, you know, finding a better format for those reports that we're providing because they can show you um where you are on your spending for the the year to date as of those months that we're providing them.

But they don't show they should they show what we're spending, I agree.

And we as a council, I think we need you to present this.

Don't get me wrong.

We want you to, but we want to sit down and look at numbers ourselves and see what you really present us because what we're seeing, like the numbers he just added are different than that.

We need to talk through these numbers.

And our budget when it was done, was done in a format that I wouldn't have wanted to see.

We just went along with what you guys brought.

But we really should be looking at these numbers and seeing what's what ourselves.

And I know you and Peter have done an excellent, excellent job.

Don't get me wrong, but we can't comprehend as fast as you giving those numbers as to what's going on and make a decision about the budget.

And since we're gonna have to amend the budget, we need to do it right so we don't come back at the end of the year and we have a deficit.

Council Chair, I asked for a little bit of patience and temperance when I made my opening remarks, and we're gonna ask for that again.

She did not get confirmed and take that position until October 1st.

Our own audits acknowledge that we don't know the balances in funds and haven't known those for several years.

To the extent that you imply there was some sort of intentional misleading with numbers.

We're doing the best we can to sort through unaudited numbers in real time and provide you the data.

If you'd like data in a different format, I open my remarks by saying I thought this would be a series of meetings.

Just tell us what you would like and how you would like it.

We will get it together, furnish it to you before whichever next meeting it is, so we can have these meaningful discussions.

We did not think we were coming in here today to solve this size issue, but this is again an opening discussion on that.

I guess we didn't know what we were coming to today, okay?

Right.

Basically, so I apologize, and if my voice goes up and down, that's just how my voice goes, okay.

I'm not upset or against anything, and I'm not implying that the numbers are wrong.

I'm just saying if we were coming to something to amend the budget today, we should have known that's what we were coming to or something different.

We in my eyes, what we were coming to today was for you to give us the actuals and where we are, et cetera, not our plan.

So I may be wrong, and all the rest of the council knew what was going on, but I just say if that's what we need to do, we are open to doing it as a council.

So we are before you speak, CFO.

You're gonna need two steps to amend your budget.

The first step is the relatively easy one, and that is simply return the budget that was passed, the 135 or so million, to what as of November 15th were your FY25 actuals.

That's the 10 million or so.

Any decision beyond that is gonna require some true deliberation.

And so those are the discussions that you will need specific data, whether it's um uh financial or otherwise, and we'll have to have more in-depth discussions because everything we do after returning to last year's actuals is going to be felt somehow by a lot of people.

And so we didn't intend to ask you to rush through this.

We intended this as a table setting and a request to return your adopted budget to last year's actuals with an understanding that we will have additional discussions and provide data to make the additional reductions that are necessary to get us down to verifiable revenue.

Well, probably that's been spending okay.

So the 10 million, like I said, we we've already identified along with the departments this the 10 million that we can reduce the budget by the as I pointed out at the beginning.

Um we need to reduce the budget by 23 million.

So there's approximately 13 million left to figure out, and the modules that you see surrounding the circle, those are potential savings that we can um that will help us with the additional 13 million, and we that that's a copy of the presentation, and so my thoughts for today is that we were getting started on a process.

This as uh CAO Tavison mentioned, this will not be done today.

It's gonna take days and weeks to figure out you know how we reduce the budget by 23 million dollars.

And so you now have a copy of today's um presentation.

You also have a copy of where we are currently in FY26 by department by category in each department, and you have a copy of how much was spent in each division in FY25.

Yes, sir.

Yeah, first of all, Madam Chair, uh I apologize for members of the council.

Um I'm hearing two figures 20.

20 million and then 10 million.

Uh which figure are we reducing it by?

So both.

Yeah.

Let me see if I can do this.

You total the council, the council.

I can simplify this.

The council passed the budget of 135 and change million.

Okay.

By law, that budget has to match verifiable revenue.

Verifiable revenue is 112 and change million.

So the ultimate reduction is 135 minus 112 or 23 million by returning us to last year's actuals.

The first step we're actually asking you to take, that generates the 10.7 million dollars in savings by returning the last year's actuals.

Okay, so this is step one.

Yes.

And then step two is how do we get from last year's actuals were 125 million?

How do we get from 125 million down to 112 or so?

Thank you.

You're welcome.

Well, we're taking a pause.

Councilman Foote.

Yes.

Your earlier point on the internet tax is well taken.

We were specifically only looking at sales tax and the internet tax, of course, only came about more recently.

I think we can adjust that slide to show that there is a replacement or additional income strain that has more recently come into play.

And you are correct.

Uh y'all need to know this, but for your internet sales tax, your city probably wouldn't be afloat.

So even though we can't use it for everything in the city, and it's limited by statute, that has been the one fund that has provided some flexibility as we've come to understand budget and spending in in recent years.

How much was that internet sales tax?

Which one?

Yes, about um a little over one million a month.

One other point that's important.

We are focused on the general fund because that's the fund that is unbalanced that we have to balance.

So we do have various grant funds, other funds.

We're not talking about the entire funding of the city.

We have focused on the general fund because that's the fund that has to be balanced by state statute and is out of balance.

So we'll proceed with the presentation.

Um phase one has been to triage and and to have more transparency.

We've already um the CAO and myself, we've already approved a reduction in travel, a reduction in vehicle use and discretionary spending.

Um we've we have recently restored the internal audit division, and they are they have been tasked.

Um, one of their major tasks has been to um work with our auctioneer to bring in revenues from some of our outdated obsolete and damaged equipment, and that revenue will be able to support some of our departments across the city.

We've also um, as you know, paid a lot of prior prior fiscal years invoices, and that has restored our trust within the um business community.

And currently we're working to eliminate the 23 million dollar shortfall in our budget.

Our phase two will be to restore policy and to restructure, and the restructure um restructuring is aimed to eliminate redundant positions that we have identified in our departments.

It's aimed to be more efficient and to streamline some of our processes and make sure that we're you know able to respond to the citizens and the needs of the city.

We're also looking to adjust some of the work schedules for our fire and police, which will hopefully assist with the overtime budgets.

As far as assets and operations, we're decreasing our lease space, um, trying to get out of some of the leases and bring our departments back to city owned facilities.

We're um auctioning our surplus assets so that those funds can be used to purchase new vehicles and new equipment for our public works and police and fire departments.

We're also um looking to build uh a better in-house maintenance team to help with the the um our facilities and get our buildings back into better condition, and um also streamlining our permitting to help with economic development, and we're looking to have amnesty week um for the municipal court services soon.

Explain what that is, amnesty week that will um allow um courts, yeah.

The the people who have court fines to come and make payment on those fines without um court calls yeah, court calls and legal fees.

In addition, if they miss court and have a contempt of court warrant out for them, that warrant would be quashed if they came in and paid their fines.

So it is truly an amnesty day.

Uh it's an attempt, and the city's done it in the past, to generate revenue while giving some sort of bargain to citizens who want to own up to their accountability for owing fines to the city of Jackson.

They also used to do it twice a year.

Are they still doing it twice?

That is our plan.

We would like to do it twice.

We would need the council to authorize us to do an amnesty week.

We would we uh intend to put on the next agenda of request to do one now, and we suspect that as we go through the budget cycle and adopt next year's budget, we need to do another one, if not later this fiscal year to start the next fiscal year.

So twice during the calendar year.

And just to make you understand, if you ever go in court service around that walls, it's millions of dollars worth of warrants, millions.

So it does help.

So I got I got a question.

Can I ask a question regarding this slide?

Sure.

Okay.

The um real estate side, sale of unneeded city owned properties, establishing a capital improvement plan for utilized buildings, sourcing corporate partners for city parks.

Um all those things are, I think areas ripe with with potential.

The JRA, they don't pay property tax on the properties they oversee, do they?

Or do they?

I will, yeah.

I wouldn't think they do, but they they have like 90 properties, okay.

I think that's a problem.

I I really have an issue with that for a number of reasons.

I think we've had a number of investors come in and bought properties on Capitol Street and other places in the downtown area, which is really really encouraging because once they buy them, even if they buy them, you don't know who they buy them from, that they should start to pay taxes, real estate taxes on that.

Now, I don't do real estate taxes go into the general fund, or do they property taxes go into the general fund?

Yes, okay.

Okay, so um JRA's got properties on Capital Street, and they've shown no interest in selling them.

I've heard from people who've who went and tried to purchase properties from JRA and they got the back of their hand.

They weren't interested in selling properties.

That's that's counterproductive to what we're trying to do right now.

We should we should I think we should take those properties back and try to sell them ourselves.

If they're not gonna redevelop them, then we should take prop those properties back and try to sell them to these investors that are coming into town.

That's one thing.

The other thing would be that um the um uh okay.

Obviously, we have all these abandoned properties and stuff like that.

That's a separate issue, but um the the real estate, I think has real potential to change the you know the income flow or to improve the income flow into the general fund.

And I think there's probably other things that offer similar opportunities, like in the next block over on contracts.

I think we had a lot of bad contracts from the previous administration.

That's my opinion.

I'm biased, but I think we get a lot of bad contracts that were overpriced and and need to be reviewed.

And I think there's a to the extent that we can review those contracts now.

I would encourage us to do it.

Uh the sooner the better to go look at those contracts and see if we can get better deals that save the city money.

That's my two questions for right now.

Thank you.

May I respond on the JRA situation?

Yes.

So councilman Foote, you raised that at Monday's work session, and I think it was also raised at last night's council meeting by some other council members.

I sent um uh JRA an email this morning requesting that they appear on the April 7th at the April 7th council meeting and the April 6th work session.

I've already received the response in which they begged off to the second April meeting.

So they will be on your second April meeting, and again, that's a night meeting, so I expect them here for work session as well.

I've made that clear.

Uh I've given them a heads up that there is a concern by the city council on vacant properties, uh, the spending of the money at Union Station, because that issue came up as well.

And I think I put a third issue I I've heard raised.

So I just want to let you know we heard you loud and clear last night and Monday with respect to JRA, took that seriously.

Uh apologize for not getting them on the next agenda, but they will be on the second April meeting.

Now, if the body decides to hold some other uh budget meetings or something where you'd like to meet with JRA separately, you certainly have the right to do that, and I will make sure just as Monday's and last night's concerns were promptly conveyed to JRA.

I'll make sure to convey any other times or concerns you have.

Okay, so do we JRA has the budget, so it comes from somewhere.

I don't know where it comes from.

Does I know they get money from parking garages that they own, they come they control around the city, around downtown anyway.

Do they do we take we pay JRA any any money from our general fund?

Yes, sir.

We paid them 600,000 a year, yes, sir.

That's another reason for me.

I think we can and do we have to pay them rent if we occupy one of their buildings?

Yes.

They don't pay us.

Let me say that.

I say yes, I'm thinking of the legal department.

They didn't pay.

I don't think we are paying rent for hood or the porter buildings.

So I guess that would be a partial yes, but not a complete yes.

How what is what determines the um establishment of JRA?

Is it something that the council can eventually get rid of?

We'll come up with a better form.

So the Jackson Redevelopment Authority is a creature of statute that it was uh a statute was passed.

Uh the city of Jackson took advantage of the redevelopment statute and created JRA in the late 60s.

Um you exercise some control over the existence of JRA, though you don't exercise control over the budget of JRA.

Uh but that is a good question you asked, madam chair, and that probably a point that needs to be impressed upon JRA, because they need to be a true partner with the city going forward.

And I think there is a legitimate concern that there are a number of properties, they have more vacant properties to dispose of than the city of Jackson.

We don't have 90 surplus properties.

Uh if we did, we'd be trying to get them in the developers' hands because y'all have made clear that we don't need to take in property and hold property.

We need to get it back into uh into the cycle of productivity.

If we got rid of JRA, could we put it in the planning and um department with the city and increase their work uh not increase their workload, but give them additional people to work on it and give them a real estate department within off the top of my head in theory, but if you really are serious about that, we need to ask our legal department to provide us with a briefing memo, and I will certainly pass that along to uh city attorney Martin.

Well, um forgive me for getting uh late to the party, but is there a list of prioritization list or maybe by order of the cuts you're proposing, and so we can examine that in lieu of the impact?

Yes, um, so we have provided the general fund savings report that shows where we have already identified um savings within each department that total the 10 million um that we were referencing earlier.

The additional 13 million, we can prepare a report of what um what our proposals are for that so that you can look over you know different options that you have to help us reach that $13 million reduction.

So these uh on this general fund savings, these are actual numbers of reduction and amounts.

Yes.

Okay, and you call it savings, but so we go to each section and we can see which uh how much you're gonna draw out of each each area okay.

What are these salaries?

Are they what what makes up the numbers basically what we ask?

So it's a combination of salaries, um, other professional services, it's it's it's a combination of dollars from every category.

Um, salaries, supplies and materials, other professional services, and um capital outlay and some of your grants and contributions, so it's it's a combination of dollars from every category.

I'm sorry.

I don't understand this chart.

So you can go.

So what you're looking at is a total of um the savings from all of the categories.

This is if we go from the current 26 budget to the 25 actual budget, yes, sir.

So this is can you go back a few slides?

Okay, thank you.

So this grand total on this one says 10 million four hundred and twenty-five thousand thirty dollars.

But that says if we did the reductions to the 25 actuals, it would be 10 million seven hundred and twenty-seven thousand and some change.

So there was a reduction in it.

Um, and I can provide you all of uh breakdown of all of what makes the 10 point originally the 10.7, we had to move some of the money back into capital alley in order to make some purchases, but that is the difference um for DigiCon, actually.

Are we gonna be asked to vote on a budget reduction in the meeting that we are currently in?

No, sir.

No.

Okay.

This is really just to start the conversation.

With all due respect, I know y'all don't think that we would come in here and just throw something at you and ask you to vote on a budget reduction.

I've been very serious.

I understand that none of us know because it's never been done.

We understand that, councilwoman, but part of the lack of communication or poor communication is we are all doing something that's never been done.

There's no playbook, and if we're having difficulty explaining it, again, I ask for a little patience because there's no way we can, there's no way we can call to ask how to do this, but we would not ambush you by asking you to do that.

And I appreciate that.

And let me think y'all are.

So they'll so that the city council can understand the first step with the specific numbers that are add up to the first step.

I I think that's something everybody's asking I I I think y'all are doing a great job, but we've only been given two documents thus far, and the two documents already don't align.

And it's off by a half million dollars.

It's not a you know, so I uh again, I I asked these questions not to be, but we were just giving this.

We we didn't prep for this, we didn't, you know, and I'm trying to understand what is it we're talking about.

So I I hope you won't take my questions as antagonistic.

We're here to partner with you, we're here to work with you, but I'm trying to understand are we cutting 10.4?

Are we cutting 10.7?

And where is that money coming from?

Well, I think the difference is Mr.

Jackson said is we had to move 300,000 back to cover some repairs that we are doing that were unbudgeted.

But he has said he would give you the specific breakdown, so we'll give you that.

And again, I think the questions you're asking today that allow us to zero in on the data you need will enable us to have a better next meeting.

And I suspect at next meeting, though, you're gonna have questions that'll be another meeting.

So that's why I said I think it will take a series of this.

You have my apology, likewise, that we didn't better communicate what we're trying to do, but I think we're figuring it out as we go, and thank you for all the back and forth.

Um look, I appreciate that.

Uh I really do, and this is a work in progress, and it is not the best of occasions.

Okay, okay.

So everybody's a little uneasy here.

Um, what I'd like uh you are gonna break it down because I'm interested in how the impacts of some of these cuts are going to be, for instance, in public works, you know, how you know what parts are we allowing to happen and the impact of it, and so we need to get a fair representation of that as well.

Okay, thank you.

And one other thing, will you give us from the general fund?

What exactly can be spent and how what can be spent and how from the general fund?

Okay, and so I also want to mention um going back.

We have a 23 million dollar shortfall.

This 10 million dollars is what we have come up with as we've worked with the different departments.

This is in conjunction with them.

We have identified 10 million that we have already been able to reduce the budget by on paper, and so you know, in the final analysis, we will be asking you to approve those final adjustments, but we still have 13 million dollars that we all have to figure out how we reduce the budget by that 13.

And so we can prepare a list of you know some of our recommendations and some places that we see within the budget that would allow us to get there, but ultimately, you know, the decision will lie with with among the government authorities.

Can we so if I can on this?

Yes, you you can ask for instance.

I so Mr.

Furch, you might can I just ask a question just based on what she said first, and then just before we leave that topic.

Is it safe to put it another way?

Uh we've got to eventually cut 23 million.

This is fairly uncontroversial.

Department heads are already expecting this.

That this is sort of low-hanging fruit, not that anybody wants to do it, but if we if we do this, that's sort of of the 23 million.

This takes nearly half of that.

That's fairly easy.

Then you're saying the difficult part after that is no department head wants to lose any more than this, but we have to find some kind of way.

Is that a fair way to say we're gonna do that?

That is very accurate.

Okay, yes.

And then I would like to know why.

And then we look at the 13 together, and let's go.

But we want to do the 13 and the 10 together.

Yes, not just take this 10 and say we okay with the 10, okay?

Right.

So we're gonna get some numbers together, and you give us the what this is, and we're gonna work as a council, and we're gonna get down to the 23 for you, and you're gonna give us recommendations and we're gonna work with you.

We have no problem doing that, but we want to know all the options and where the money can be spent and what the dollars really are.

We don't want just to say, okay, like we rubber stamp that budget that we rubber stamp that 23.

Yes.

Okay, one start with unit cultural service.

653,695.

Is that the number that you would do to your funds?

Yes.

What exactly are the alignments?

I think you're 653,000.

We can provide a more detailed list of these items.

Um like I said, they they came from every line within the budget of these departments.

So it impacts salaries, it impacts um how many personnel get laid on.

So these numbers do not lay off personnel.

It will it would be more so vacancies that were in the department where they did not utilize those funds last year, it was just removed out of their budget.

It did not require any layoffs.

Okay, let's go to public work.

Oh, right.

What is the where's that $2 million $168,000?

So I think I think it'll be if if you allow, um, it'll be better if we can get you a a detailed list because again, they all touch the for the categories within the department, the salaries, the supplies and materials, the other professional services, the capital alley.

We touch pretty much all of those areas in each department.

So is it we spent the last Mr.

Harlington delete project trying to be thought public force by buying more quick heavy duty equipment so they can actually go out and do stuff so we can get the crumb that multiplier effect of new equipment leveraging the the crews we've got to be more productive for our citizens?

And um if this two 2 million 968 undermines that or cuts the muscle and leaves us with just bones and and uh skin that that we haven't really improved the we haven't benefited the citizens at all, so it's important to to know what the particulars are uh so we can still focus on being productive too.

Anyway, that's you know so just the number alone doesn't really tell us much, I guess, other than you divide it up the the figure.

Um into to parcels, okay.

Thank you.

Uh just one question in this tableson.

Yes, sir.

Is it possible?

And I would I see this as a mini uh budget season.

Budget okay.

Let me say what this is, sir.

This is one and a half budget cycles.

And what we're doing now is adjusting both the current FY26 budget, and ideally, as we go through this, we're gonna have figured out FY27 in the process.

So, really, uh, as we've talked about getting two audits done at one time, what we're doing is uh restoring ourselves and doing almost two budgets at once.

There shouldn't be a lot of future discussion for FY27 because that's going to occur as we reset FY26.

Okay, uh two brief questions.

One, um, is it possible that once we do the audit, things will be a little bit sunnier, more sunnier?

I'm just saying, uh, if I mean down the road, does it look as though um we may get a break money-wise?

Unlikely.

Uh it's probably more likely that a new auditor will uncover more something that has been missed somewhere else.

Okay.

Uh we don't expect the audits to materially change anything up or down.

Okay.

And my other question is this is there someone in a department that can uh run something of a like a suggestion program.

There may be things out there that folks on the ground are seeing that can make some make some significant difference if we change procedures.

Uh and just to follow along.

As we advance this, we need to be asking those folks down in the in the lower echelons.

Hey, what can we be doing better and more efficiently to approve what we're doing?

Agree with you, we are already doing that.

I don't know that we have a formal process, but every director is encouraged to talk with all their employees and bet that I certainly am accessible.

I get many an idea from employees on the sidewalk.

Uh, to your extent, it was brought to me this morning that we should consider a term concrete bid.

We've not had that in the past.

We've had asphalt, we've had supplies, uh, but our concrete vendor uh who apparently has done some good work at really reasonable cost.

Uh the suggestion was have we ever considered a term bid?

That would be something we would bring before you and suggest would make sense.

And let me make this clear.

We've listened to the mayor and the council members.

Y'all have made clear what your priorities are.

Blight elimination, better delivery of services, figuring out how to make sure the grass is cut in a decent fashion.

We have listened to those.

There's no action that we're proposing that gets to any of your priorities.

Ultimately, you're gonna have to wrestle with some of those priorities, but we're not proposing that.

That's why we said step one is return your spending, your budget to last year's spending, and then from there, you'll set the priorities.

If you want to continue to support public works, we're probably going to need to make sure we have employees contributing more towards their health insurance premiums.

Now I know that's not a good thing to talk about, but we've got to figure out a generation revenue.

And so we hear you, Councilman Hurley.

That's why we want to have this, and we encourage those questions.

There've already been several good requests from you as a council for us to provide additional data.

Just keep asking us, and we'll keep furnishing it.

Eventually, together, we're gonna get where we need to get.

Thank you, sir.

I appreciate your answer.

Okay, we'll move on to our um back to our presentation.

Um, so what we have on the screen now is our matrix as it regards as it relates to the comprehensive modernization plan.

The phase, yeah, every phase will touch budgeting assets um and fleet personnel and infrastructure.

The first phase has been to eliminate shortfalls in the budget, um, look into our assets and audit those items, personnel.

We have looked into um leave abuse, time abuse, making sure you know employees are abiding by our timekeeping policy, and as far as infrastructure, our CAO project coordination has taken place.

Um on phase two, we have looked to reduce and restructure um within the departments utilizing our auction funds um to support those departments with the with the surplus, also reduce leases where we can um bring departments back to city owned facilities and reduce redundant roles in staffing and um create an in-house maintenance team for infrastructure, and phase three will look to market aligned capex, divest real estate, um, implement market aligned salaries, and um look into street lighting and parks partnerships.

The um city of Jackson, we're we're trying to be more fiscally stable.

Um as it relates to our past audits that we were just mentioning, those audits typically um identify your fund balance.

I think that's you know, a lot of why we look for our audits to know where our fund balance is, fund balance is our fund balance is only like a savings account for the city.

Um, once we do identify what our fund balance is for those prior years, those are that's like a savings account that we should only look to use for one-time type projects, one-time type costs.

We should not use the fund balance to support our day-to-day activities.

And that has kind of been what's happened in the past.

And so the budget from from year to year, it stands alone.

It stands on his own revenues and it stands on, you know, the expenses need to um stay in line with those revenues that we're bringing in in that one fiscal year.

The trade-off is exchanging those redundant roles and these um legacy processes for a more efficient and highly capable, well-compensated essential infrastructure work for workforce.

Um, we've discussed some salaries, you know, in the past couple of days when we had the um work session, and we do want to bring um all employees up to a higher um standard of living with their with their salaries and wages, and we think you know, by being more efficient, the city of Jackson will be positioned to do that.

Our next step is to go through this budget process and find ways that we can you know cover the 23 million dollar shortfall and balance our budget and bring it in line with available revenues, and that concludes our presentation.

I got a question.

Yes, I have a question.

Uh going back to our original numbers, we started out here with the 135 million dollar budget for the general fund that we'd adopted and now trying to squeeze that down to 112 million.

Um I think that's right.

That's the number.

So the uh on um there's another way to try to you know skin this um fish, and that is um seeing if there's ways we can increase revenues to come in, make the you know, make the revenues coming to the city greater than 112 million.

And and so the my understanding is and help me with this because I I could be off on this.

So we've got a property tax.

I think our real our property tax revenue is about 60 million a year, is that right?

Is that right?

It's a little less numbers on their computer their fast and tell us the numbers.

So does it around 60 million?

Is that am I right?

Yes, it's it's about 60 million.

Okay, so the property that all goes in the general fund?

Yes, okay, all right, and then the sales tax number you've cited on here.

Um where is that page?

Uh where I'm sorry.

It's uh it says it's declined from 37.9 to 26.8.

So your sales tax is 26.8.

Yes.

So we got 60 million in property tax, and then what's that?

86.

And then 26.8.

What is the other money that comes into the general fund besides that each year?

So you have emissions fees and rentals.

Um, you have how much is that work out to wouldn't be much, I don't think Brandy, can we provide the council with what comprises or how we arrive at the hundred and twelve million in general fund revenue by property tax, whatever source it is?

I think that's just is that your question, Mr.

Okay.

It's just is is there a something we're missing where we could be increasing the revenue, you know, uh for instance all the properties that are just um that are out there that that don't pay uh because if the state owns them or we own them or something where we're not getting any revenue from property tax, downtown properties or wherever it might be.

The that it so if we if we can know where the sources of revenues that to meet that 112 number is, I think it would help us from a brainstorming process in trying to come up with some answers to do this.

Um you know, in a constructive way we'll provide that information.

Um and likewise, I think councilman foot, you and Councilman Hartley are saying the same thing.

We do have to grow revenue.

We have to reduce the budget to verify our revenue now, but that can't be the be all the end all once we do that, that resets our pot on its bottom, but then we all need to figure out exactly what you're saying.

How do we grow revenue?

Because resetting on the bottom doesn't provide the level of services that our citizens expect.

Right.

And so uh don't think that when we accomplish level setting the budget, any of us think our tasks are done in turn, it's time to grow.

Right.

One question.

Um the numbers we got from the February City Council monthly report.

Are you looking at those numbers to see the ratio of where they are for the the five months?

Is that number lower than the one twelve?

When you do the ratio, will we be under 112?

Or is it is that I know it's not a six-month number, I know it's a five month number, so I know it should be instead of being a half, but have you looked at it and see where we are?

Yes, so we have been looking at those percentages.

Um, and that's why we've done the cuts to get to try to bring them back in line to stay within the 112 million.

This is what I'm asking.

I want to make sure, and I don't want to sound hard, negative, or whatever.

Is that 112?

If we had six months, exactly 50 percent of what we've taken in revenue.

Because what I'm looking at in this book is a little less.

Well, property tax comes in in big chunks.

It's got to be.

I understand all of the above, and I understand it's a 60-day lag time on taxes, et cetera.

I'm just asking a question.

If we have everything that we get at that correct time, how far behind are we or are we on target?

We are on target.

We're actually on target for a lower number than you have adopted on your budget.

But that's somewhat misleading.

Uh part of it is we have held the line on spending.

Part of it is there are some expenses which are uh heavier in the second part of the year than the first part of the year.

An example would be our bond payments, our bond payments that we pay early in the fiscal year are lower amounts than bond payments we pay later in the fiscal year.

I didn't ask about expenses and the total.

I asked about revenue only.

I'm glad we're holding those expenses down.

That's gonna make us even better.

But is the revenue where you expect it to be?

I'm sorry, it's slightly ahead.

I'm sorry, misunderstood your question.

That question is we are slightly ahead on revenue.

Now, what we don't know is that is that because people pay their property taxes early as opposed to waiting to the sale, and will that trend sustain?

But currently, we are slightly ahead on revenue, both sales tax and property tax, then we where we were last year at this time.

So that is some good news.

That is some good news combined with the fact that we've spent less than budgeted through this time.

So there is some good news there.

Yeah, our uh sales tax collections for thus far in this fiscal year are 13.7 million dollars compared compared to 13.1 million for the same period or year ago, so 600,000 up on fifth center.

Thank you.

Okay, I want to make sure I'm understanding the other documents that we received.

So we received one that says year-to-day budget report for FY25.

So just as an example, as I look at this, this says line 442, police department.

If I scroll over and see year-to-day expenditure expended.

Um yes, and in the general fund, yes.

Thank you.

So if I take the amount that we budgeted for FY26 in police, and I subtract this amount, I will get this amount.

You should, yes.

That is what we did with our first round of reductions.

Okay, okay.

Um and then what is this just a copy of so that is the expense report through today?

So that's where we are with our expenses per category per department as of today.

So the very first line item I see is um undefined departments.

So that's just the role, that's just the the system um adding up the totals.

The department start at 100 for administration so 73 is how much total money we've spent thus far between October 1st and today's date.

Yes, it's those those are the revenues, the 73 million.

Our expense total is on page five for the general funds, and this says revised budget, but we haven't revised the 26 budget rate.

So this is just the act, the budget that we passed.

Okay.

Now in FY25, I just thought about it.

Um, that's including all of the funds.

That's not only including the general fund, that would include um any grants that they would have as well in the FY25.

Um it would also include all of the funds.

Um, we just ran it by um division, but when you run it by division, it picks up everything within the budget completely.

But what we need to balance is the general fund, is that correct?

Can we can we get this for just general yes, please?

And so as we continue to um have these discussions, your general funds also support some of your other funds.

Um, for example, the zoo and um some of your grant funds we provide match like JTRAIN and we've also had to in the past um provide support for sanitation fund.

And so this is this will also show you some of those divisions in those other funds that the general fund is having to support.

So we can we can probably be helpful to provide you a list of those appropriations the general fund is making to um to these other funds, and I know as the audits are completed as we did in FY23.

Um you will probably be asked to see how the general fund had to support some of those outside funds, and so that's a continuing um situation for the general fund to have to provide that support.

Was there a talk about 30 million at some point?

30 million for someone wrote in a news article last fall something about 30 million, and so that's out in the uh internet ether world.

Uh that may be we do have 30 million in challenges before us, but seven million of it is the water bill.

So you have 23 million that we've been discussing today separately.

Um, as of Monday, Mr.

Hennerfin provided saying that our water bills are seven million dollars.

And so, but that issue we are intentionally keeping separate from the 23 million of the general fund because we suspect we'll end up in court over the seven million dollar water bills because we also got sanitation fees that are owed us, and so we've tried that may for better or worse, that's on me.

I've tried to keep those two separate.

So we have 30 million dollars in challenges ahead, but the one we really need to focus on is the 23 million in the general fund.

Let us go through the court process and see what we can do to address the other miss Cardwell certainly appreciate uh uh your presentation, and I see there's gonna be a lot more information as we evaluate this going down the road.

Yes, you are thank you.

Uh and Mr.

Jackson, what is your what's your extension?

1010.

Okay, thank you.

Thank you for your direction.

I think there are five or six categories of information that you as council members have asked for, um, whether it's what revenue comprises the general fund or specific reductions that would return us to last year's spending.

Uh, we've certainly taken all that into account, we'll gather that information as quickly as possible and get it back before you as a council.

And when do you want this budget um amended to 10,000 by to put the amended budget to reduce back to last year's spending on the next regular council meeting?

We may not be able to do that, but we'll work toward that.

Um, we're gonna get together in just a minute and figure out our strategy and what we want to do.

Well, and again, I think the written document I provided Monday, as well as my opening remarks.

We need some direction from you.

We stand to work with you.

These are two branches of government.

Obviously, we execute the policy decisions that the eight of y'all make, but in this case, the budget is in the purview of the council, and we do need some direction, so we appreciate y'all taking some time to tell us what you need from us because we can't we can't necessarily know that without the communication.

Okay, and Ms.

Taberson, uh certainly appreciate that.

Look, as a manager of a division, I've been through zero balance where I've been uh where I was told by the boss, you don't have any money.

You broke use those words.

So what we had to do is we had to buckle down, make essential decisions, and then ask the entire workforce what can we do better to save money and make us more efficient?

Yep.

And it took it took Cook two years to pull out of it, but we did.

And then we had all the folks come in to get money from us after that.

But uh, yeah, this may be a long haul, but uh there will be something in the future for us to look forward to.

We appreciate that, and I think your your timeline um of what it takes and the culture shift that goes with that is um if you look at and zoom out as of what we presented.

I think we're aligned in that.

One of the things that or two things that we're gonna have to get a handle on sooner rather than later is those sanitation fees and uh how we're gonna get resolved between the judge and Jackson Water, uh what is owed to us.

Uh our calculations are one number, and Jackson Water's calculations are a whole nother number.

So that that's something that that's that's gotta be determined sooner rather than later.

And the second thing is uh what we we're doing with regard to health care and being a provider of health care uh for the uh workers of the city, and and also 1230 and uh uh we have um uh a uh an insurance committee that's recommended a health care advisor who that we think we can save several million dollars under the under their advice, and we need to get that thing out of committee and get a hearing on it and let the council decide whether they they want to support this health advisor, but having it leaving it in a committee is not doing anybody any good.

Is that the the money up here the 2.75 million you're talking about?

We don't need that or is that something separate?

That's something separate.

Um those numbers that you see on that sheet, Mr.

Foot are proposals to increase the employee contribution towards health insurance, and we know that is unfavorable.

We realize that's um challenging in light of what we pay, but we're also realistic that continuing to subsidize 100 percent of employee health care and 85 percent of family health care is not what the market reflects, and it's not something that we can sustain.

The amount we would have to raise um employee contribution, Mr.

Foote will depend on what the mayor said.

Can we get a consultant in here to help us figure out can we better control our premiums and our spending?

Right now, we spend a little north of 15 million dollars a year on health insurance, and anything we can do to reduce that would be wonderful.

If nothing else, we need to make sure that number doesn't continue ticking up at the cost of medical inflation.

Okay, we will work with you, and we're gonna decide on some meeting times, and we're gonna decide on how we'll handle it and um before the next and we know we won't get it done before the end of this quarter, but before the month is over of April, we will have it um worked out.

I think everybody here is willing to put the time in, but we're gonna work through it and we're gonna think through it, and we're not gonna just come up with the 10 million when we finish, we're gonna have the 23 and be done with it.

Yes, thank you all for your time and consideration, you know.

Um, as we go through this process, is definitely gonna be a collaborative effort to get it done.

So we appreciate all of you.

This meeting is adjourned.

So, how many