Draining The Reserves

Photos by Darren Schwindaman

The Jackson City Council has opted to dip into the city's reserve fund rather than collect additional revenue with a fee increase. The council voted 6-0 on the revised city budget, which takes $1.4 million from the expendable reserve fund in addition to more than $2 million swiped from the same fund last year with the approval of the 2006 city budget.

The revised budget, approved by the council, does not hike the city's garbage fee $3 from $15.39 to $18.39 a month, though many council members could not make their vote in complete confidence.

"Sure we (the council) didn't approve of the fee hike, because city residents generally aren't friendly to it, but I can tell you this: Residents are going to feel the ache in the next few months," Crisler said. "I just wish the administration had met with us in private and discussed ideas and budget proposals with the council instead of giving us this one budget to either approve or vote down. I think there could have been more options."

Tapping the city's reserve fund will likely reduce it to below $5 million. An ordinance approved by the City Council years ago sets the minimum at $6.5 million, meaning that further reducing the fund violates the law. It could also have a detrimental effect on the city's bond rating, making loans for city development more expensive or unattainable.

Council members learned of the city's falling revenue in the March budget revision, which revealed revenues falling $3 million short of projections, with the biggest drops in municipal court fines, tax collections and cable franchises. Coupled with this are massive expenditure increases in utilities, fuel and the Retiree Health Insurance Premium, with those three alone accounting for more than $2 million in additional costs.

Chief Administration Director Peyton Prospere, who oversees the city's budget, proposed a budget revision calling for the $3 garbage collection fee increase, but council members were leery of the new tax.

"That garbage fee isn't anything but a tax. They ought to call a tax a tax, because that's what the people of Jackson are going to see, and then they'll compare us to our competition all around," Allen said.

Allen had supported the idea of the fee hike so long as the hike was temporary, forcing the council and the mayor to reconsider the increase with every following budget review, but the idea gained no traction with other council members.

Crisler said he regarded the $3 fee increase (paid equally by both Jackson's rich and poor) as more regressive than other revenue increases, such as the 1-mill increase recommended by the mayor at the onset of the budget year last September, before the same mayor summarily withdrew it hours later. Crisler said the city would have to decide on some form of revenue increase, even as he voted in favor of the budget without the fee increase.

"We are going to be aching until we do something," Crisler said. "Cuts in city services aren't going to make anybody happy either."

City services are already suffering from the non-surgical chops made in this and past administrations, say employees. Some companies, such as Landers McLarty Ford and Hyundai, which provided parts and service to city vehicles, have already refused to do any more business with the city because the city could not pay its bills on time.

Employees inside the city also claim that Blue Cross Blue Shield of Mississippi, which handles the city's health and retiree disbursements, will no longer carry the city by 2007. In late December 2005, the city missed its monthly payment to Blue Cross, prompting Blue Cross to temporarily suspend services to city employees.

Embarrassed council members rushed to hold an emergency vote endorsing a payment, and City Risk Management Director John Anderson dismissed the significance of the snafu, telling the JFP earlier this year that the payment was not missed because of any budget shortfalls but because of "an oversight."

"It was a little bit computer glitch and a little bit mail problem, but it really wasn't that big a deal," Anderson said.

Blue Cross Blue Shield Communications Specialist John Sewell also played down the significance of the missed deadline.

"As far as we're concerned, the city delivered their check to our office almost immediately, and we reset things that night," he said.

Nevertheless, when asked if Blue Cross Blue Shield had dropped the city for the upcoming year, Sewell said the city "has submitted an RFP for 2007," fishing for alternative coverage. Sewell, however, could not confirm whether or not Blue Cross had re-submitted its own bid for the job, and refused to say whether Blue Cross would.

Prospere announced that the city has managed to save some money over the last few months by cutting back employee overtime, which averaged "$2 million in excess of its budgeted amounts," in the last two years, he said, but former Mayor Harvey Johnson Jr., who battled revenue shortfalls throughout his administration, said the city would have to bring in new revenue if it was to survive.

Johnson explained that pulling in extra money from anything other than overtaxed city residents was going to require legislative approval for programs such as Payment in Lieu of Taxes (PILT) programs.

"We've got more than 30 percent of our city's buildings being used by tax-free entities like the state government, whereas most cities our size average 12 percent. There's an argument to be made that people are using our streets and services without compensation," Johnson said.

"The state government is using our services, as are the thousands of their employees who come to the city of Jackson to work," Johnson continued. "If somebody working in the Woolfolk Building has a fender-bender on High Street, that's the city of Jackson's police department and fire department responding. Not to mention our sewer and water lines running to their workplace."

Council members and past mayors have suggested other means of collecting revenue, such as a commuter tax and a regional tax—even a tollbooth. All require legislative approval, however, and both the former mayor and current council members admit that most state legislators have little interest in addressing Jackson's ailments.


Use the comment form below to begin a discussion about this content.

Sign in to comment