Jackson City budget committee hears revenue update, approves grant and settlement amendments and gets audit timeline

At a Jackson City Budget Committee meeting, members approved a set of budget adjustments and heard updates on nonproperty tax revenue, property-tax collections tied to a new billing system, and the city's fiscal-year audit schedule.

The finance presenter told the committee that August nonproperty tax revenue ran slightly ahead of expectations, with local option sales taxes about $32,000 higher and other sales taxes about $21,000 higher than the same period last year. "We collected $97,000 less in nonproperty tax revenue than we had at the same time last year," said a finance staff member. Year-to-date general fund operating expenses were running at about 15% of budgeted amounts versus an expected 16.6% at this point in the year.

Committee members approved three formal budget actions by voice votes. The committee moved $21,700 from the street maintenance operating-supplies account to street-department resurfacing to pay for contracted resurfacing work that staff said would have been done in-house if a new trailer had already been available. The committee also approved a budget amendment recognizing a Tennessee Department of Environment and Conservation (TDEC) recycling grant of $192,000 to reimburse prior capital outlay (the shredder truck/equipment arrived last year); staff said the required local match (about $80,200) had already been paid. Finally, the committee approved proposed budget amendment number 28 to appropriate $125,000 from fund balance to pay a legal settlement reached in mediation.

On the legal settlement, a committee member said the case had been pending for several years and was resolved in mediation a few weeks earlier. The city attorney was not present for detailed discussion on the record and committee members were told an attorney-client meeting would be held to discuss questions that cannot be addressed in open session. The committee was told the $125,000 appropriation would be charged to fund balance because it was an unanticipated expense.

Committee members asked about larger unbudgeted draws on fund balance. Staff estimated several outstanding capital and program-closeout items could add up but said, without running detailed numbers, the total was likely under $750,000; some items could be handled via budget-neutral amendments and others would draw on fund balance.

Members heard a status update on the city's transition to Tyler Technologies for property-tax billing. Staff said the vendor's portal has a different workflow than the prior vendor (BIS) and that staff and vendor technicians were working to finish loading the 2024 property-tax file. Because the city does not want to mail property-tax bills before it can accept payments, staff said the transition timing is important for cash flow. "It does it automatically at the end of every day," a staff member said of the Tyler portal's automatic posting to the general ledger, adding that the system should provide more real-time reporting once the upload is complete.

The finance director updated the committee on the FY24 audit. Auditors identified interfund-balance issues related to a move to a pooled-cash approach during the financial-system conversion and discovered double-booked medical expenses that previously caused an understatement of cash by about $2.5 million. Staff said they had isolated the issues and expected the FY24 audit report to be issued in mid-October (the presenter cited October 15'17 as the target window). The presenter cautioned that FY25 audit timing would follow after FY24 work was completed.

Committee members discussed a planned large debt issuance that is contingent on the audit being closed. Staff said bond counsel and financial advisor PFM are standing by and that the committee would be invited to review the proposed debt package and meet outside its regular schedule if necessary; staff said they hope to issue debt by the end of the calendar year if the audit and rating-agency conversations proceed on schedule.

On budget planning for a later fiscal year, a committee member described a draft rubric to score department requests across several categories (including legal obligation and operational necessity) and suggested departments score their own budgets so the committee and council can compare priorities on an "apples-to-apples" basis as the FY27 planning cycle continues.

Ending: Committee business concluded with a brief audit- and debt-related calendar discussion and a motion to adjourn. Several attendees asked staff to return with more detailed estimates of anticipated draws on fund balance at a future meeting.