A.G. Gancarski
Discussed toward the end of Tuesday’s Jacksonville City Council Finance meeting, the Council Auditor’s quarterly summary raised concerns in the committee.
There also were concerns that weren’t discussed by the panel.
One such concern discussed within the committee: stress on various subfunds related to stadium improvements.
The stadium subfund is projected to incur a $644,502 shortfall because of stadium improvements: “Budgeted revenues did not take into account the full scope of the stadium improvements approved by amendment 14 to the Jaguars lease, which are negatively impacting revenues.”
This cost of the stadium shutdown for the work, combined with a projected unfavorable variance of $44,740 for legal fees, adds up to close to $690,000.
Another concern was overtime overage in the Fire and Rescue budget, a recurrent issue that led to an exchange between Council Vice President Lori Boyer and Jacksonville’s Chief Administrative Officer Sam Mousa.
Boyer noted that department has a “budget overrun on a consistent basis,” and that she’d like the “budget to be more accurate.”
Mousa noted it’s not a new issue, and the increased overtime costs are a function of backfilling gaps created by retirements as new hires are trained and brought aboard. The overtime is “required” to “keep crews active,” Mousa said.
The increased overtime charges are now projected at $1.75 million.
Meanwhile, as noted previously, a recurrent issue is created by equity market pressures.
“This past quarter witnessed continued global volatility fueled by heightened uncertainty around Chinese markets as well as bond market adjustments as a result of the Federal Reserve’s first interest rate hike since June 29, 2006. It has been the committee’s view that market interest rates will continue to rise as economic conditions have improved and the national unemployment rate has dropped to 5%, the lowest level since April of 2008,” the report notes, not mentioning that low unemployment was just months before the TARP bailout, and in the midst of a larger stock market “correction” that halved the value of the Dow Jones during an 18-month slide.
The portfolio is “positioned in a moderate to slightly conservative posture after having reduced risk in years prior,” with “headwinds” anticipated.
There is concern, generally, on the subfund level also, according to the Council Auditor’s Office: “… several of the City’s subfunds presented in this quarterly report are financially challenged. The reader will find similar comments repeated for several subfunds. Our review consisted of the [general fund and 29 other subfunds. Of the 29 other subfunds reviewed, four report projected unfavorable variances and two show a negative cash balance combined with a projected unfavorable variance. We are concerned regarding the cumulative negative effect of these subfunds on the overall financial condition of the City.”
Overtime costs are a pressure for many, department heads have complained often of insufficient manpower, and increased overtime seems to be the workaround.
