Jacksonville City Council cuts budget for affordable housing program

City Council members went into budget hearings with the intention of making cuts. On the first day, they succeeded, looking for ways to add money to other initiatives.

Several council members expressed displeasure ahead of budget hearings over Mayor Donna Deegan’s plan to take $47 million out of operating reserves for extraordinary expenses. The Finance Committee on Thursday decided to completely eliminate one of the included programs for affordable housing and move millions of dollars below the line.

The council said the measures were fiscally responsible. Deegan said it was a question of image.

“It’s like starving your family so you can have more money in the bank than you actually need, so I don’t really understand it beyond the fact that I think some of it is politically motivated, but some of it is also just a difference in philosophy,” Deegan told reporters after the council made the changes.

Deegan questions budget criticism Difference between being fiscally “conservative” and “responsible”

Budget Summary: Mayor Donna Deegan unveils $1.92 billion city budget, adds 40 JSO officers

Housing fund: Deegan plans $10 million in loans for affordable housing developments, more expected

Deegan presented the budget on July 1. Unlike his first budget, he had the time and opportunity to implement more of his vision for the city in the budget. He defended spending from operating reserves as an investment and highlighted the city’s recent credit ratings.

The rating agencies were aware of the proposed budget and rated the city with projections out to 30 years, the mayor said. Because the ratings affect the city’s interest rate, they will ultimately save the city money, he said.

However, Deegan’s role going forward could change, depending on legislation passed by Council Member Rory Diamond. This week, he introduced legislation that would limit the mayor’s ability to transfer more than $99,999 without City Council approval, a change from the current $500,000.

Finance Committee Chairman Ron Salem said after the budget hearing that he was pleased the committee made the necessary changes and that he did not agree that the cuts were political.

Other council members had considered bills similar to Diamond’s over the past two years for varying amounts.

“I think this budget just reinforced the need to rein in some spending,” Salem told the Times-Union.

The council eliminated several expenditures, including more than $19 million in grants awarded to projects through the Downtown Investment Authority. The money has already been allocated in development agreements, but the distribution depends on each project. The DIA will return when necessary to gather the funds.

Members also moved below the line to provide $500,000 for the Jacksonville Symphony and $228,000 to pay membership dues to organizations such as the Florida League of Cities, the National League of Cities and the Florida Association of Counties, as well as $22,000 for council members to travel to the organizations’ events.

They also implemented an auditor’s recommendation to reduce the expected amount for salary increases by $10 million because it was over-budgeted.

Salem said more budget cuts are on the way. He did not specify the possibilities, but said the council would try to make enough cuts to be able to add some items above the cap, including the council’s strategic priorities.

The council had previously considered adding funds to the Jacksonville Sheriff’s Office budget, including money for new equipment and uniforms. The Times-Union requested a copy of all the expenses that have been added or removed so far, but it was not immediately available.

Several committee members said they supported the additions because they were regular budget items, not improvements.

“For whatever reason, they didn’t fund some regular budget items through the (Mayor’s Budget Review Committee),” Salem said. “I don’t know why, and I think this council is very supportive of public safety, so that’s why we changed it today.”

Housing fund could return to legislation

The City Council Finance Committee cut the $10 million Deegan praised in April for the city’s share of an affordable housing loan fund. The Community Foundation planned to use the city’s contribution to raise another $30 million from the private sector to eventually create up to 1,000 housing units.

Without the city’s contribution, the global fund is nullified.

“We can’t really present this as an opportunity to private investors or philanthropic investors,” said James Coggins, one of the project’s architects from The Community Foundation. “Our foundation and others were also considering investing in this fund, but without the role of that city, providing that lost capital in the first place, it just doesn’t work.”

Coggins has been working on the project for about four years and initially pitched it to Mayor Lenny Curry’s administration, but council members said they had not been briefed on the idea.

Diamond and Salem called the idea “half-baked,” but said the council would reconsider the proposal if the mayor’s office came back with legislation incorporating the council auditor’s recommendations for reporting measures.

“If they’ve been working on this for years, what’s a couple of months to get it right?” Diamond said. “And then we compare it to other projects, right? So we get all kinds of good, affordable housing.”

Salem said the move was practical and that Deegan refers to “every time the council takes an action he doesn’t like” as a political move.

Council members not on the finance committee can still advocate for funding to be restored, as Matt Carlucci said he plans to do.

“Cutting this $10,000,000 from the budget as the City Council Finance Committee did this morning is like swimming halfway across the St. Johns River and then turning around and swimming back, as we always seem to do,” Carlucci said in a news release. “We must be bold in this budget process and ensure that these funds are allocated effectively to have a real impact.”

Deegan said the cut was short-sighted and that the below-the-line measures were intended to remove as much of the expense from reserves as possible, knowing that much of that amount would be spent later in the year.

She knew the administration would have to fight for more initiatives in upcoming hearings, but said she hoped they could move forward together.

“I really believe that the majority of this council wants to work with me to move things forward,” Deegan said. “I think there are people who spend a lot of time, frankly, being part of the problem rather than being part of the solution.”

The Finance Committee will meet again on Friday.

Times-Union staff writer David Bauerlein contributed to this report.