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- 2014 - August - 1st -
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Council, Mayor Alvin Brown's office continue to disagree on pension, reserves and revenue

By David Chapman, Staff Writer

City Council members went into a pre-budget meeting Thursday looking for answers.

Instead, they walked out with more questions after a series of disagreements with Mayor Alvin Brown’s administration that continue to be unresolved.

There’s Council Auditor Kirk Sherman’s concern about public safety pension contributions being $11 million short. His continued contention about the city spending too much from reserves, dipping the rainy-day fund below a longtime council threshold. A disagreement on up to $5 million in projected revenue items.

For each concern, a response.

Brown’s administration says there is no pension shortfall. That the amount in reserves falls in line with what bond-rating agencies allow. And the revenue projections come from the state estimates, the experts in such matters.

Any possible pension contribution shortfall is still being looked at by actuaries, but the reserves issue went nowhere Thursday.

Sherman maintains his stance that a specific portion of a general fund account is what’s used to evaluate city reserves. The administration is using the entire account, which has earmarks for constitutional officers and other areas.

“It’s not valid, not at all,” Sherman said of the administration’s view. “We’re confusing the public, confusing other parties about this …. We’re not going to get there I guess.”

There might not any budging on revenue projections, either. Sherman and his office made the case that some state revenue numbers the administration uses aren’t reliable. For instance, a state communications tax has continued to drop the past six years — not once hitting its mark — but is projected to rise $1 million this year.

The administration said the state is the expert on the matter. Sherman said the state doesn’t have any stake in the matter and has been wrong too many times.

“We’re the ones who suffer when we come up short,” he said. “The state could not care less.”

Those disagreements are just by the finance people.

An agitated Bill Gulliford continued his criticism of the administration for taking the $13.4 million Shipyards settlement and spending it, even after council members specifically pulled that money back for capital projects.

Chris Hand, Brown’s chief of staff, came right back with a response, saying the Office of General Counsel and bond counsel said the No. 1 way to use such money was to pay debt service on the bonds that went toward the Shipyards. It’s what the administration has proposed.

And a disagreement of sorts was a request council President Clay Yarborough gave Thursday to Hand and the administration. He asked for a prioritized list of the $230 million in capital projects Brown is proposing in his budget to be returned by 5 p.m. today. Some of those projects have been requested by council members.

Hand said he’d look at the request, but the mayor’s legal obligation was met when the budget was submitted. All of the items on the list were considered priorities, he said.

With more time, there is a possibility some of the issues could be resolved. But there isn’t.

On Monday, council members will have to vote on a tentative property-tax rate to send homeowners in the coming months.

As Finance Chair Richard Clark suggested, the amount of reserves spending and disagreements total about $55 million, which could make for hard choices depending on what route council decides.

The two extremes: cutting $55 million from the budget or again raising property taxes.

The answer, he said, likely lies somewhere in the middle.

David DeCamp, Brown’s spokesman, strongly disagreed that the figure represents a shortfall.

Council meets at 8 a.m. Monday to set the millage rate. Budget hearings begin Aug. 7.

dchapman@baileypub.com

(904) 356-2466

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