Council members press for clearer rules after $2.2M in trust withdrawals and internal borrowing discussed

Julian Brown, speaking as a delegation on the Municipal Compliance Trust (MCT) account, told the Cairo City Council that several draws were taken last year and this year to cover operating costs while tax receipts were delayed.

Brown said draws occurred in April and July 2024 and in November, December and February of 2025, and that the money was used to cover payroll, vendor obligations and emergency mutual-aid expenses after a hurricane response. "Those draws were made to cover expenses," Brown said. "We paid down a bank loan, so we could pay it off, so we would not carry that in '25 along with debt." He also said "none of this went against the policy the council approved in 2024."

Council members pressed for documents and raised process concerns: several speakers noted that the council's current resolution authorizes the city manager and finance director to deposit year-end settlement funds but does not explicitly authorize withdrawals from the trust without prior council action. One council member cited an April 2024 email from "Mr. Jimmy" that said, "let's not make a precedent of withdrawing from the trust." Councilmembers also questioned why the withdrawals (which Brown and others said totaled about $2,200,000) plus roughly $3,000,000 in long-standing internal fund transfers had not eliminated the reported cash shortfall.

Council discussion also flagged a separate concern: restricted state and grant funds. Council members cited a memo and an accounting clerk's breakdown showing that some state-allocated LMEH funds (earmarked for street resurfacing) and landfill-restricted funds had been used in the utilities fund, creating obligations that must be repaid or addressed in future budgets. "LMEH...is supposed to be spent for street resurfacing. But it has also been put into and spent in the utilities fund. So that is a debt," a council member said.

There was no final vote on policy changes during the meeting. Councilmembers instructed staff to bring a clarified resolution and any related policy amendments back to a future meeting. One councilmember recommended the city attorney review the trust document to ensure the revised resolution aligns with the trust's written terms.

The council also discussed the practical bookkeeping issue of internal "due to/due from" transfers, which staff said can be corrected in the audit or by budget amendments. Council members asked for supporting documentation from the transactions that occurred while several prior staff members who handled them are no longer employed by the city.

Next steps recorded in the meeting record were staff direction to prepare a revised resolution or policy language clarifying when withdrawals from the MCT trust require council approval and to provide documentation on the timing and destination of tax receipts and other deposits that were expected to replenish the trust.

Ending: The council did not adopt any immediate financial remedy; instead, members asked staff to return with documents, a proposed resolution, and a review by the city attorney so the council can vote at a later meeting.