A.G. Gancarski
On Wednesday afternoon, the Jacksonville City Council special committee on capital improvement projects continued its work refining legislation and policy related to debt management and CIPs.
It ironed out aspects of draft legislation to move Jacksonville toward a more consistent and efficient approach to capital improvement projects, and with budgeting more generally, resolving City Council disquiet with the creative budget practices of the previous administration.
Happily for members, the basic parameters of a lot of meaningful legislation have been agreed upon, with all that’s left being a “few revisions.”
One such bill discussed: 2015-428, which seeks to resolve budget discrepancies on unappropriated balances exceeding $50,000.
The committee, in discussion of this measure, also looked into resolving five-year plans for IT capital expenses, especially with regard to refining plans so that resources are not committed to “outdated or inefficient” technologies, processes, and so on.
Another measure discussed: 2015-429, which addresses deficiencies in the way the city’s current five-year CIP process operates related to projected costs of approved capital projects being approved. Projects in years two through four are speculative rather than true numbers.
The committee was good with that.
This led to more substantive “policy conversation” on 2015-450, which Boyer said was “explicit … about the administration’s ability to transfer cash” from one fund to another.
“We can either say that there are no cash transfers of borrowed funds from one project or another,” without council approval, or the administration can have free rein, or, a middle ground: the ability of the executive branch to make such transfers, while delivering a report to the Finance Committee providing relevant context.
“This would give us all a pretty good picture of why a project isn’t moving forward for some reason,” Boyer said, allowing for operational flexibility.
“Two years ago at Budget, there was great concern,” said Committee Chairwoman Lori Boyer, about borrowed money “stripped” from projects long since approved.
Bill Gulliford advocated that Finance be “engaged” in the process, saying that the group could serve as an interpreter for less-engaged council members who “didn’t want to dig in deeply.”
A spirited discussion followed between administration members and John Crescimbeni about the mechanics of engaging council, with the executive representatives wanting an after the fact report of what happened, with Crescimbeni urging for advance notice.
Crescimbeni’s fear was motivated by events a few years ago.
CAO Sam Mousa urged that “you’ve got to have the ability to move [money] from this pot to that pot to keep things moving,” and Crescimbeni signaled a willingness to compromise.
“I’m willing to get past two years ago … and if there’s something we see that isn’t managed properly, we can come back and address it,” Crescimbeni said.
As well, refinement of the Debt Management policy was discussed.
“Everything in it is something we’ve discussed, but we haven’t agreed on the language,” Boyer said.
One aspect of the proposal: lowering the threshold of expected net or present value savings on refinancing debt.
The $100 million threshold that allowed for a savings break from 4 to 3.5 percent was discussed, with concerns that a project close to nine figures would be artificially bumped up to effect savings.
Another discussion: “backloading” the debt, which was a point of pique for those on the committee based on what Boyer called “past experience.”
While many municipalities do this to service near-term capital needs and other urgencies, there clearly is a conflict between that and sound budgeting.
“You can’t move them out too far without conflicting with the asset line,” Treasurer Joey Grieve said about debt issuances.
The executive and legislative branches have spent the bulk of the summer and the autumn attempting to find accord on issues related to short-term and long-term budget priorities.
A smooth budget process, helped along by using money from legacy funds, helped a lot.
Arguably, this is the next step … and one that must be resolved, as the city works to incorporate the politically inconvenient recommendations of the 90 Day Audit.
