Good morning, colleagues.

We're calling together the meeting of the Jackson City Council Finance Committee meeting.

It is 11 a.m.

on Monday, July 27th.

I'd like to begin uh by thanking uh Councilwoman Tina Clay for leading the finance committee over the past year.

Um she's done uh a tremendous job, including getting us uh closer to be up to speed on our audits and uh helping us navigate some uh budget uncertainty.

So I thank her for all of her leadership.

Um colleagues, any other opening statements to speak in our meeting today.

Okay.

Um right.

Well, colleagues, Mississippi Code Section 213525 uh calls upon us if we as a governing body uh notice a um an expected shortfall in revenues.

Um it calls us at any time during the current fiscal year, but not later than the regular July meeting of the board uh to to basically rectify that situation.

And so um uh we've worked to do that, um, and a lot of that work I appreciate was was done uh under my predecessor.

And uh as she has shared, um, under the great work of Mr.

Tawasane and Ms.

Caldwell and others, uh we we've known for a while that there was an anticipated shortfall, and so they've been communicating with department heads and asking department heads to be as as conservatives and as prudent as possible within their spending.

And so the because of all of that wonderful work, the the work that we have left to do uh for tomorrow is simply codify the um the conservative spending that the department heads have already been operating towards.

And so um the agenda that you will see for the council meeting tomorrow includes item 49, which amends the fiscal year municipal budget, and it um uh does so in accordance with what we've been discussing.

And so the purpose of today's uh council or committee meeting is to just have an opportunity to dive into this to discuss this, to ask our uh CFO any questions that we have, make sure that we are all comfortable with this and uh and really have a chance to dive in before we vote on it ultimately at tomorrow's council meeting.

We don't have a deficit, so we don't necessarily have to do this, but I'm glad you're deciding to do this.

My next question is where are you uh proposing to take or how are you proposing to get to the one toil that we know we're at?

Thank you very much.

So uh Miss Caldwell has provided uh uh she she must have been burning their midnight oil because I got this email at three in the morning.

Um but if you look in the agenda packet, the first couple pages are the agenda item as it will appear on the uh council meeting tomorrow, and then once you get to a page that has a note on it that says report 727 26, that indicates the revised budget as well as the proposed amended budget and any difference.

So uh we can go line item by line item if anybody wishes, but this indicates where those uh amounts will come from.

Mr.

Chair.

Yes.

Good morning, Peter Taylors and CAO.

I want to um respond to councilwoman's first statement and refine the language slightly.

We do have a statutory deficit, and so this action is necessary because on paper we adopted a budget that was more than our revenues.

Everything else that both councilwoman clay and you have said about how we have controlled revenues is uh correct.

So I just want to say, and again, that's that's a very small refinement of the language, but I think it's important since we have a record being made.

So yes, we do have a statutory deficit, and the action we're taking is to codify everything that you two have discussed and bring us on paper in align with what the statute requires.

Thank you.

No problem.

We 112, we're good to go.

We'll look at it.

We appreciate your work.

Thank you both.

Uh no, no, good.

Thank you.

Any questions, Mr.

Foot?

Thank you, Mr.

Parkinson.

Thank you.

Um setting this meeting up and asking for some information from the administration.

And I've got this report I just locked in about 10 minutes ago, so I haven't had a chance to go down it in detail.

So we have this report here that goes about seven or eight pages.

And if you could, if someone could go through this and explain the different um items, uh I would appreciate it.

Well, the first column on the on the right hand side, it's got um revised 2025-2026 budget.

So that's the budget we're living under.

What when the revised is it the revival?

Was it revised?

Uh what when was the revision take uh happen when did it happen that we end up with a revised budget instead of just the budget?

Gillian Caldwell, CFO, during the course of the fiscal year, you have approved um multiple amendments to the budget.

Wow.

And so this revised budget reflects the amendments that you have already.

So it's that that's the budget we're living with, and it's been revised by the council.

Okay.

So if you could kind of give us an overview page by page.

Okay.

Mr.

Foote, if you don't mind, before you do that, can you kind of tell us the process you you quick two-minute version of the process you went through to get get to this point?

And you may need to change.

Even before that, is any layoffs or is this just uh skimming the budget to make it work till we get to the next two months.

This budget we have um pretty much brought it in, excuse me, brought it in line with where we um where we have made it through this current fiscal year.

So it's no layoffs, it's just keeping skimming, keeping frozen, keeping doing what we're doing, working the numbers.

Appreciate you.

You've done a good job.

If you could just set the framework for us on how we got to this page.

So beginning, excuse me, Brandon Jackson, budget manager.

So um at the beginning of February, we started having meetings with um department heads, um, telling them about the issues of revising the budget and updating the budget.

Um from there, we had several conversations with you all, um discussing our revenues, where what we're actually bringing in um with our revenues, and how to get to where we actually should be um pertaining to the actuals of our revenues from there.

We also started having conversations about our expenses um on how to right size the budget to our actuals for the revenues, going department dot um department by department, seeing what we could actually um decrease and still be efficient.

Okay, and this is what we've come up with getting to that level from that process.

Okay, and this is uh in discussion with department heads, yes, sir.

Thank you.

I'm also excited to work with y'all so that um we are hopefully our next budget will forecast the revenues in a in a more accurate way so that we aren't each year having to go back in maybe quite such dramatic fashion.

Um so I think that's gonna be great to sort of look ahead, but we are where we are now.

Um and I think we've got to sort of make it work, but I appreciate again the leadership that y'all have shown because while you never ever want to see cuts, um, I think what feels good is people have already been operating with the understanding that we need to be working as conservatively as possible, and so it will hopefully feel more like just codifying the work that we've already sort of been operating in our minds, and less like all of a sudden we have to make all of these adjustments in the final two months.

Mr.

Foote, thank you, sir.

Uh the let me start with a couple of questions here because um I want to make sure I understand um what we're doing here.

The the last whereas before this list of revenues comes down, says the department of administration recommends that the governing authorities, which is the council approve the amendments for the purpose of realigning the general fund to the known actuals of the fiscal year 2025-26 municipal budget category changes as follows.

So when I said revised, I meant I was led to believe that understood that these are amendments or amendments we'd already been approved during the year, but this looks now but based on that sentence, it looks like we're amending making new amendments.

Is that correct?

You understand where I'm coming from?

I mean, we gotta start.

We know what I'm talking about I want to voice.

What I want to do is establish reality of where we are, and then we can talk about making changes.

I'm not against making changes, but I want to make sure that I understand whether this is proposed for new new things or things we've already done.

So throughout the year, um we did agree on several things, but we they um they were never voted or approved.

Um you all have to actually vote as a council in order for us to make the change.

Oh, so we haven't amended these.

Okay, so this is not this is not stuff that's already been done.

We've discussed it, but they don't they haven't been voted on.

Okay, I'm just gonna let's just be really, really clear.

Jillian, would you like to go ahead?

Um, so there have been budget amendments during the year that you have voted on and approved.

Okay, all right.

That is what is in your detail report um as far as the revised budget.

During conversations, we have made other things known that need to be adjusted.

And so now we're coming to you to make a reduction down to the 112.

And so this order will revise the budget down to the 112 amount.

I might be able to help too.

So I'm I'm confused.

I might be able to help.

Um so if you look at the document that's labeled report.

Well, I'm I'm on page three.

Okay, I'll get to page three.

I promise I'll get to page three.

Okay.

But if you look at the document that says report 727 26.

Okay, and let's just take the first one for example, current realty taxes.

You see that the proposed amended budget is 37 million, 44,158.

Okay.

If you look at the uh order that we're gonna be looking at tomorrow.

What is that?

Right here?

Yep, that's it.

Page three.

Do you see the first item says current reality taxes?

It's uh 37 million, 44,158.

Okay.

So if we uh pass this item tomorrow, which I would urge us to pass, uh, this will be the new item that will be this will be the the late, this will be the official budget.

And it and that matches it's all the same information.

If you go back to the report, it says here's where we're the most recent we are after all the amendments we've already done and this, that, the other, we are currently at 37,544,158.

The issue is we know we're not gonna get that half a million dollars.

So here you can see where it says FY26 revised budget.

That's our real budget on paper right now.

If we take no action, it's saying that we have we are expecting to get 33 million five hundred forty-four thousand one hundred and fifty-eight.

If we pass tomorrow's, it will go down to 37,000, sorry, 37 million, 44,158 dollars.

This shows you the difference.

And so you can look at it in any two ways.

If you just want to see after we're all seven done, what's the budget gonna be?

You can look at the item that we're gonna be voting on tomorrow.

If you want to see where was it and what is it going to be, you can look at the report that is provided as well.

So the report has all the same information that this one has, plus additional information.

So you don't have to go flipping back and forth and back and forth and back and forth.

A quick question here.

Is there a distinction between what has already gone before council?

None of this has gone before council then.

Is that what the the FY26, not the order um that we're proposing, but the detail, the FY26 revised budget does not itemize what you have um amended during this year, but it does, it is included in that total.

Okay, okay.

So that's what we're working with then.

Yes.

And today you have the proposed order to bring you to a new budget that falls in line with our anticipated revenues.

Thank you.

So the report is what we've actually collected year to date and what we forecast we're gonna collect.

These are not actuals, no.

This these are budget.

These are budgeted amounts.

My question is how close is it to actual we're uh we're about 75%.

Okay, so why can't we have the actual so we can see where we really are since we changing the budget so we're gonna know exactly what we're doing?

Since we changed it, we might as well have the actuals saying we can predict the next two months.

Yeah, we can do that mathematically, we can so I would be feel more comfortable voting on something, actually having the actual, so we won't be in the same predicament we in there.

Because if we don't have the actuals and we just taking these numbers at random, and you I'm saying at random, and at random doesn't mean at random, literally.

It means that they're not actuals and they're not projections of the next two months.

So if we got time by four o'clock work session to go in there and look at the actuals, give us the actuals, come back and project the uh two months, we'll vote on it tomorrow.

It makes good sense.

Yes, we and just know that we have um provided actuals through June 30th.

Let's take them to the day's date.

We know what we got.

You got a check on June, July 20th from the accounting, right?

So that brought us a little more money on taxes.

Let's take that check, let's take all the actions.

Then we everybody is transparent, everybody knows everything the city is operating on, and guess what?

Them two months we can operate perfect.

Then when we go to the next October Ford, we have real numbers and won't nobody be saying they didn't know what it was or what it was.

It doesn't matter whether they audited or not, they got the actuals, and we know how close and how good you've been at keeping them on tax well, I'm really confused.

This is not what I expected we'd be going over in the meeting.

Let me explain try to explain what I'll what I was uh hoping we'd be talking about.

The the purpose of a budget is to set up what you're gonna spend versus what you get you get in.

And so there's revenues coming in, and you need to stay within your expenses, and your expenses need to stay within your revenues.

And the so what I was thinking we'd be doing is looking at the expenses we have and trying to figure out how to get the expenses down to meet the revenues that are reality.

And the revenues are just if you're running a business, revenues that's what they come in, and you've got to live within your revenues and and make ends meet and cut expenses if your revenues are short.

Obviously, our revenues are short, but um the uh where's the expense side?

So, yes, it's a good question, and certainly we could do that, Mr.

Foote.

So again, if you're looking at that uh, and it's included on both, but I'll just look at the report again.

If you're looking at report 727 26, which page?

Okay, you got it right there?

Okay, it first lists the revenues, and there's two and a half pages of revenues, and then it goes to expenditures, and it does exactly as you described.

So it shows that the current budget that we are living under, the total revenues is between 135 and 136 million dollars.

And by the way, we're just exclusively talking about the general fund, just to be clear.

Um the uh expenditures that we had budgeted at the beginning of the year were similarly between 135 and 136 million dollars.

But to your point, we are now expecting between 112 and 113 million dollars, which means the proposed expenditures is between 112 and 113 million dollars.

And and so if we wanted to, we could adjust this.

I mean, this is just a starting point, but to the point that we've got two months left, uh-huh.

So we could say, for example, um in administration, personnel expenses.

Originally there was nearly five million dollars allocated in that one expenditure, which would you what page on look for that?

Right, or you're on the right page.

Okay, human and under under administration.

There was nearly five million dollars budgeted, that's what we budgeted.

Okay.

And personnel services.

And now the administration has proposed that we lower that to $3.3 million.

We could say no.

We don't we want that to remain at $4.6 million, but then we would have to find uh funds elsewhere in order to uh reach the $112 to $113 million overall expenditure that matches the revenue.

So to your point, Mr.

Foote, this does include both revenues and expenditures.

I respect the work y'all done and everything, but I would prefer seeing actuals for those categories.

And when you bring us actuals, Mr.

Foote know Tina Clay would have a question because he would have to do that.

I'll have questions.

I'll have a question.

If he have questions regardless, you speak for yourself, I'll speak for me.

Well, guess what?

He'll have the answer because he'll know exactly what's been spent and what we have.

And if he has a question, he can ask that question.

But he'll know what he's asking.

He's not assuming that we got this.

And neither would I, and nobody else up here.

And I realize it'll be a little work, but at least we'll know the actuals.

So uh so basically we can look through here and find if there is anything that we consider urgent or priority for the city, or just uh in our you know, just searching our own knowledge base.

Hey, that may cause some problems if we don't show her up, or this is an area I believe that we can uh we'll be okay with so we can just look down these items.

Is that correct?

Yes.

Okay.

So I guess our assignment for tomorrow will be to kind of review new document and and sort of see if we have any questions.

What about the actuals?

Nobody wants to know actuals for Tina etc.

I mean, I would no, that's not true.

Uh are you going to provide um a copy, Ms.

Cardwell?

Yes.

That the actuals are you gonna have a copy for that tomorrow?

Excuse me.

I'm sorry to interrupt.

I'm just asking you a question.

Are you gonna have the actuals tomorrow?

Yes, you can have a copy.

Okay, fine.

So that discussion we can put on the back burner, but for right now, what we have right now, we can go through this and see exactly if we have any hard burn with some of these items.

Peter Taylor CAL, one quick comment on the actuals that the CFO says she'll provide.

Remember the city has 45 days to pay bills, so even actuals have some variants, it ought to be minimal.

So it's not going to be exactly up to we understand that.

We understand that, and money is gonna come in and it's got to do with posting, etc.

We understand that 110 percent, and we're not gonna nail you to a number that you put on this piece of paper and say it was the actual okay, so I go through the last page of the private oh, here's okay, cuz you got I guess one of the things I'm having a hard time with on this exercise is that um the we approve this, we still got two months to go.

So these aren't the um I would like to look at the numbers.

Well, the so this is are these numbers as of July uh June 30?

Is that what they are?

These this is your budget, so it will be through September 30th.

Well, I'd like to see where we stand, where we stood as of June 30th.

We're gonna have an emergency and do this amendment.

We need to look at at the real numbers, not you know, here's as of September 30.

I just I I apologize, but we provided the job.

That was the hard time grasping that um uh you know the the fact that um you've come up with all those shortfalls that um are gonna keep us down the total expenditures drop by 22 million.

Part of that's because here's four million and an operating transfers 4.634 million.

Is that grants we didn't get or what what is that?

How do we have a savings of 4.6342?

And we plan to spend 7.7 million, and as is that grant money, general general government.

Can you somebody tell me where that 4.6 is just for that's just on the last page?

The operating transfers are um appropriations to outside funds.

So for example, you have um JTRAN fund 187.

The general fund sends.

Yeah.

So who didn't get 4.6 million dollars they were expecting mostly parks and rig, um, because it was pooled back into the general fund.

We didn't have I didn't think parks and rec's budget number was only like about two million dollars.

It wasn't 4.6 million dollars.

Well, it was some of those I was saying it was some of the 4.6.

Is Parks and RIC, and then we have um the the zoo, and then we have J Train, those are the large.

Yeah, so this is what the really budget process is really about.

It's not just you know, we had all the numbers up and we're we're good to go and walk out the meeting.

We gotta we need to know where the money's going that we we don't have.

In other words, we were expecting to spend 135 million during the course of the year, and we didn't spend 22 million dollars, and we need to know the where's that 22 million dollars didn't go to.

Did not go to payroll because we had a bunch of empty slots at public works.

Did it not go to JTRAN?

Did we cut them short?

Did we cut, you know, who who did that?

This is I you know I appreciate all the information, all the work that's putting me to put this together, but we've got to flesh it out for the people to un the public to understand that here's where we're cutting.

We didn't spend 22 million dollars we're expecting to spend, but we don't have any idea where we didn't spend that money.

We have an idea.

She's told us all along that we didn't spend it.

Where do we not spend it?

She told us how many spots we didn't feel.

We should we we know how many well I swell?

I'd like to see it.

I'd like to find it here it again.

I mean, that's I I asked the 4.6 and I didn't get a straight answer.

Okay, well, that may be true, but she told us it is true.

I didn't get a straight answer.

I'm not arguing with all I'm saying is me and you're not gonna have a monkey shell.

Never.

Okay, this is what I'm telling you.

She told us, and we're gonna respond she told us, okay.

Well, I want more information than just that.

Good thing.

Uh the uh no no no offense to Ms.

Calwell, but but the the people need to know more and that in the government we're spending all this money and signing off on the on the claims every every two weeks, and here we didn't spend 22 million dollars.

It's a fair question to ask.

Let's have a list of the 22 million dollars we didn't spend.

And and so it let me see if I'm understanding this, so you want a further breakdown.

We see we see the categories, and we see a difference, but we need additional information, uh, explanation on that.

Yeah, I'd like like for instance, um, well, the the question, the operating transfers.

I'd like more information on 4.6 million that didn't get transferred.

Um then I guess the to the extent that there's payroll, I'd like to what is the number for the whole city's payroll versus what we actually paid in payroll, or we're gonna actually pay in payroll for uh this fiscal year.

We have that number.

You would like total or by department?

Either way, or both okay, we can get that.

Okay.

Payroll.

I mean, I think total payroll would be very informative.

If if we and I'm um I I'm my um suspicion is that most of the difference between the 135 and the 122 is not having slots filled, payroll, uh a big drop in payroll, and that would be informative, and we and the public needs to know that, and we need to know it.

Uh, particularly as we're getting ready for the budget coming up, yes.

And part of that, Mr.

Foote will come from the information that uh Councilwoman Clay has requested.

So she has, I think you were looking at the information when this came up, but she has requested another column here that is actuals.

So what have we spent thus far?

And revenues, what have we earned thus far?

Yeah, to better inform the proposed amended budget.

Um and uh they've they've committed to providing that information, which I think we're helping.

Let me ask one more general question.

Let me ask one more general question, please as that an area that I think we need to focus on as a council for managing our funds for the year ahead.

And that is debt service.

There's a lot a lot of different listings and debt service throughout this, but I think particularly for the general fund, we need to make sure we understand the debt services we're paying, and they're gonna be different categories of it.

Some of it may be for our for the city funds, but some of it may be for the um you know the the convention center or JRA or whatever.

We need all those categories of debt service.

We have to get our debt service under control.

That's savings we can we can find solutions for that shouldn't have to come out of the general fund.

So if you could give us a breakdown of the um the debt service paid that's coming out of the came out of the budget this year, and and so we can see if we can find some solutions for next year that would be really helpful and the other thing that I uh would like to we haven't gotten into specifics.

Uh if we could on the expense side on the revenue side, okay by page revised budget for revenue.

Okay, um the let's start with at this third page right here, if you could.

Um current realty taxes, and you got in in parentheses 37 million, and current personal taxes 20 million seven thirty-five.

The and then advorem taxes on cars, six million five forty-three.

Those are these are revised.

Um so is this what we were expecting?

The 37 million, and where do we stand on what we actually got?

Is that is that another on another page?

We don't have we do not have actuals in this report, but the 37 million on the current reality taxes, the 37 million, 44,158 is our anticip that our what we currently anticipate revenues to buy.

Was that where we were at the beginning of the year too?

I mean, is that changed?

No, at the beginning of the year you were you adopted um at 37 million, 544.

Okay, so it's virtually close.

It's uh it's off by half a million dollars or whatever.

Yes, and so that that's one of the things I think it's really important for the council to know on um the revenues versus where where we anticipated a year ago, because we're getting ready to start a new budget process, and the if if we've got an area that where we're got declining revenues, is the modernization tax listed in here, or is that listed that's outside the general fund?

It's outside the general fund.

Okay, but all those uh revenue sources that the city has, uh, we need to keep a close eye on because that's you know, huge part of our budget process.

We're getting ready to start um in the next couple of weeks.

Thank you for that.

Yeah, and I think that's a good point.

And I would also just I think in that spirit, just encourage us to be thinking about because as a council getting stronger and stronger and stronger at each step of the budgeting and finance processes.

And so right now we have an immediate challenge, and that challenge is to uh pass uh uh amended budget by our last uh regular meeting in July.

Uh but then as soon as we do that to your point, Mr.

Foote, it it's time to be looking ahead at the at the FY27 budget.

Okay, two more things here.

Please one is on the still on the third page, interest on delinquent taxes.

So we're expecting 450,000 dollars in interest on delinquent taxes.

I'm surprised by that, and then damages on delinquent taxes, revenue of 315,000.

What is damages on delinquent taxes?

Those are um part of our property taxes, and the damages on delinquent taxes are I believe that's coming from our the back pay that we receive on the delinquent taxes.

So pretty much your current taxes, those are um it's as a state at current, and then you have the delinquent, but the damages are kind of like an additional penalty that's added to those delinquent taxes.

Okay, here's here's a technical question for you.

Advilorum on advalorum tax on automobiles.

Now that is that the the sales tax when somebody buys a car, or is that the the when they go into the um tax collector and pay their um license plate?

Do you know which that is?

That's just the tag.

That's for the tag.

Yes.

Now so the but the sales tax when you buy a car, if they bought it in Jackson, it would show up as sales tax as sales tax.

Um that would be 45 45, 15 pro rate of state sales tax.

45 15.

So we were expecting it be included in that 31 million.

Yes, sir.

See, one of the things I worry about is that as the car dealerships have left Jackson, it's really hurt.

Those those tax sales tax on the new cars is going to Madison and Rankin County instead of us.

So it's really important that we protect our try to convince our car dealers to stay here in Jackson.

But um, it's uh you know, the I probably need to sit down with with um y'all and and talk about how the presentation information would be easier for me from the standpoint of understanding where we are and where we're going and what we can expect.

Thank you.

Thank you, Mr.

Foot.

Anything else on the daisy?

I see Le Shea Brown Thomas, and I know uh Brian Grisel was on it earlier as well.

Okay, anything else before to come before this committee?

Seeing none, this meeting is adjourned.