FAO Select Committee

Okay, good. Good morning, everyone. To the OCTOBER 15 financial out an oversight select committee focused jta. We're going to start off with introductions either. A few more people coming, but we'll go ahead and get started introduce them when they get here MR. Russell will start us off. Thank you, Brian. Russell Council research carries to populous Officer General Council, Peterson Council water. Ramparts counselor's office. Ron Salem group 2 at large. Good morning, Chris Miller at large 5, Elaine in District 3 visiting. Good morning. We're down in district 13. The beach is also visiting. Sounds good and we're. I think everyone front of them has the agenda here for today and you'll notice going to the public comments at the end because I want to make sure. We get into the items that we have listed before that and and then whatever time is left. In that hour and a half and I'm going to stick to it again. Is my goal to stick to the scheduled time? And this case, 11 o'clock. And then I'll just mention right now won. Saying this. Our next session is scheduled for OCTOBER 23rd. And it's also at 9.30 So just want to put that out there. That's also been published. The the schedule as we know it. 5 Sessions has been published as well. If you want to refer to that document that went out this past week. Okay. One first 2 is. As the Jenna says, there were some things that we ask about last time and are and I realize not everyone from jt is available. The acting ceo is not available today and we were aware that and there were some requirements. Audit wise other requirements. They've been under Stanley scrambling for the state attorney general and others that have requested these documents. So there's there's some information. In a briefing that will originally I was hoping to get today. The 26 27 projections and discussion with jt on those those years. Budget wise projections. We're going to take that up the next session. And today's going to be mostly focused on what the auditors are going to present. But before I do that, we're going to start off with any outstanding questions or or issues from last time or things that came We want to follow up on so going to first go to past Presidents, Salem for for a few follow-up items. Thank you, chair through the chair to MISTER Peterson. >> And if you answered this last time I missed it. Jta does not have a outside audit yearly by a form of some sort. We are relying completely on your quarterly reviews. Is that correct? >> And the cherry counselor, Salem, they do have an outside audit believe their auditors cherry Beckert jt is a component unit of the city. And so their audit, financials ultimately roll up into the cities. But as for there operational expenses what I want to say that you are concerned about you are we are rely on our core Lisa Marie's. We're reliant on the information that they present. >> We do review their annual audit and we'll go over a component of that in the presentation today. But I hope that answers your question. >> 40's, I have a pen outside altered as well. Just out of curiosity. >> Yes, sir. They each have their own audit. Perfect. Second question is and don't think this came last time. This covid money. I'm sure I assume jta got covid money. Can't. Can you help us maybe in your presence? How much did they get? How was it spent? And get it potentially >> influence. Delay and what we're seeing today because of the covid money that was there. >> Due to shared accounts or Salem, that is not going to come up in our presentation today. We absolutely can look into that and report back to you. I based on what we see in and we'll get into the details. I don't know that that contributed. I think it MAY have provided them additional capital dollars along the way that MAY have what's that turned on them trying to think of the right word. But think it MAY have. Contributed. Na Na they were doing a lot of things. And so that then where we where the problems do occur, which on the small spoilers ultimately within the last 2 years I think that that MAY have pushed it further back thinking they had lot more things going on. Then if the covid dollars had never come in, that they MAY not have gotten into certain things. But I can answer the specific on how much they got, how it was spent. That is not ultimately we stopped based on when we thought they were in a good financial state and just carried it forward from there. I think that would be helpful to the committee. >> Because if if they did get into other services and such because of the covid money and then it. Indeed clearly at some point, how did that influence that the issue we have today? That's what I'm most interested in. Thank you. Thank you, chair for allowing me to say that. Sure that I think it's a good point and I will add on to as far as >> I guess you call a task. To look into, but I but I think that's a good that's a good start. The covid funds. But we also know there are other federal dollars. They came in for various programs. Other things like perhaps nab the another other areas that MAY have shored up different things. But I would like to see as best we can. If all those funds came from those other sources as best like I said best we can. We're were utilized. In line without they were. How they were offered. And those requirements associated with those funds. So there MAY be some other things beyond covid funding there as well. And if you would, please try to try to see and work with MR. Barnes and others to if we can capture that as well. Okay. Was there? And anything else from anyone else? I've got a couple of things. One I had asked if shepherd or or Mr Barnes would like to. Addresses. I had to ask MR. Ferguson and I know we turn back to you all want to ask this less last meeting. About. If there are documents that exist. Oath of office, other really documents for the executive team members, the board members associated with codifying specific fiduciary responsibilities, something that's in writing. They've acknowledged what those fiduciary responsibilities are related responsibilities. If those documents exist. He said he didn't think so. But he would find out. And so I'm asking, do we I would think we would know that. Do we know that now? What is the status? Are there such documents and in what form those documents exist? It's PRESIDENT Sam just Pfizer for to the board night, I referring to both the board and the executive leadership. I specifically talked about executive leadership as well. The ceo, the ceo the cfo. >> The others you listed in that organization chart as the executive team. >> To the chair bars chief financial officer jta. I do recall your question. I'm sorry. We don't have an answer, but we will find out today and respond back to the council okay with the response. Thank. Thank you very much. And and and the second one passenger there, the second followed by head was. I didn't do this from the diocese. We were talking. And so I mean, now I just make this. >> Transparent here. I'd also ask because eyes notice there are a lot. There's a lot turnover. Through the years. We've been looking at that. The auditors have been looking into the financials. Lot of turnover in cfo office. I just wanted to get information on those individuals who who had been in that office and are no longer with you, including your predecessors, CFOs to get a feel for who those key people were and what the turnover has been in that amount of time period, which is the roughly 5 years. So if assume you don't have that information available or hadn't gotten the ok to release that information at this point is that is that so? >> To the chair? I don't have the information on hand, but we can certainly or turn that over to you provide you with the number of individuals and who they are. The you want the last 5 years >> that that would be my preference. But a minimum of 3 years. Okay. Yes, no specifics on when they were released. If. I think it's important to know. Did they just move on to another job that they resign? You know what, what happened? Bear whatever's appropriate. I don't want to I'm not asking to cross any lines in the hr world or anything like that. Privacy world, but just want to get a feel for it because obviously your current office and and before you got there, all those people are our key, too. It's really knowing what happened when it happened when it should have. You know, when those steps should have happened to avoid. Where we are right now. >> Yes, we can. We can provide information just for for some background. I mean, just in my my vision. So finance and technology were about 50% of what we at 10 1.25 So there's been significant turnover just in the last year and certainly over the last 3 a cake that be good to know and if you can also add in there, the current employees, if you could, let me know by person. >> How long those individuals have been with jta. Okay. Okay about Thank you. Thank you. Thank you very much. And the anyone else, anything else to add or do you all have anything that you wanted to provide response, MR. Barnes. Well, if not, we will move on to the in the next agenda item, which is turning things over. To MR. Peterson, MR. Parks to discuss the history of jta and overall from a financial audit or perspective, how we got to this point and now realizing there's I do realize and if you're the state that when you get to that point, it each it's. Part of your presentation. I realize there's some questions you've asked because it's my understanding you don't have access to their systems, direct access and so you've requested some information that will be coming later. But I just asked it, you know, as best you can walk us through period. And I believe you guys are starting out. 23. 24 is that is that correct? Through the chair? We're going to date back to 21. 22 to try to set a That's good. That's good. Okay. Just turning over to you now. Thank you very much. Sure. And just to go ahead and address the issue that you brought up. >> It's kinda to councilmember Salem's question. Earlier we in the auditors office do not have access to jta as financial systems. We are reliant on the information that they provide to you in the quarterly reports, the information that they provide to you at budget. >> The projections that they make for each of those documents. And we do look at them for reasonableness, were able to utilize information that we have access to here at the city as it relates to the elegy tea and a half cent sales tax to determine if numbers are accurate or in the in the ballpark. And then looking at projections whether or they're following along, what we're seeing from the state. But as it relates to the day in and day out, operations of their payroll, their benefits with those type of things we do not have access. So we are we are reliant on them when it comes to MISTER Peterson. Before we go further, I'm just curious. And and I don't know the full answer this question. I think I know a partial answer, but to put it in context, do you have partial or access to? Systems of? City related independent organizations. Through the chair to our to the chair. So for the city, our office has read only access to entire city operations. So we everything that goes on with the city of Jacksonville. We have we have the ability to look in to see the detail transactions. See the journal entries that support everything goes on as it relates to j ea. We have 2 individuals in our office who have access to their systems. One has had it for it. I will. Don't know how many years back but we do have access and can go in and see things if we need to. Aj has released a j and j p a. >> We do not have similar to jta. We are reliant on the information that they provide. I do want to note that you mentioned questions that we have sent over to jta. One of those questions is can we get access to their systems MR. Barnes is working with us and we are in the process of getting access. There's some security things that need to be addressed. But the hope is that in the hopefully this weekend, if not next week, we will begin to have access so that we can in the future going in and see things when we need very good and jta. Thank you very much for that. >> Okay. I I will. I will get out of the way now. Already a guys Please stop me along the way. I think it's better if you have questions because this is I think 34 35 slight. If you have questions about aside, just stop. I think it be better to address it at that time. And I just do want to carry out this. We are looking at jt a's operations here, not at their capital side. We don't necessarily have any reason to believe that the Capitol was a contributing factor, too, where they are. But however, if we come across anything are you hear of anything, we will absolutely look into that and bring it back to the committee along the way. So. Wanted to try to break these this presentation up revenues and then talk about that and then talk about the expenditures because there there are both contributing factors to where we are currently revenues is more of 25. 26 problem. But do want to just kind of give you a a overview holistically of the revenues and first want to stock on the half-cent transportation tax because that does represent depending on the year anywhere from Low 60's to up to 70% of jta as budget. So it's a it's a driving force of their budget. And if there are big swings, plus or minus that can have significant impact on their operations. And so obviously retailers and other businesses that collect the half-cent sales tax. They remitted to the state. The city then receives those funds from the state. Typically usually in a 2 month arrears timeframe. So what was received in JULY was actually from a collections, the city and then turned center to fiscal ag MAY recall during the budget. We talked about involvement of the fiscal agent. We send the entire portion to the fiscal agent. They withhold a portion for the debt service based on a written directive between an agreement between the city and jta and then the fiscal agent since the net proceeds to jta. The remittance from the state. Overall looking at a rolling 12 month time period had increased consistently over the past 10 year period up until NOVEMBER of 2025. And we've got to slide to show kind of how that happened. And then the debt withholdings, those are based Amber some schedules that are known by all the parties, but they there are some fluctuations. And so over the past 5 years, it's fluctuated from 36.3 million in total debt went down to about 19.7 million and then has crept back up to 36.9 million. And so you'll see, like I to keep using this clicker so you'll see on the blue line is the total rolling 12 month collections from the half-cent sales tax. The red line is the net to jta over that time period and the green line is the debt that was withheld by the fiscal agent as it relates to those collections. Based on those a bird some schedules. And so you'll see there is a peak to jta in that SEPTEMBER. 24 time frame because of the decrease in the debt for that year. But as the debt creep back up, the net to jta. Correspondingly went down because there was a I mean, sales tax is growing. It's hard to see in this because that's what they're each gap is 20 million dollars. But it is going. But it's not growing at the rate at which the debt was going. And so. This chart shows the annual activity the prior it was on a rolling 12 months. This is what actually occurred in each of the fiscal years. And so wow. The sales tax total collections, that blue bar hit a peak in. 24. 25 the debt increased from about 20 million in 23. 24 up to 37 ish million in. 24 25. So the the net amount to jta. He turned off accordingly. And if I can to committee, so this is where we wanted to make sure it's clear is some people I think have been looking at the net sales tax and thinking that there's this strike in a cliff. As you see it, it has dropped and a gross number. But >> it's much more impacted by the debt where it increased back up to the normal levels. And so this like some people have been like a house that's dropping so much more. This doesn't make sense. It is a steady. Do you know about a 3 to 4? But it's not as dramatic as some. You know, when you're hearing some of these things MAY have thoughts that we just want to make sure. And that's what we were trying to show in these charts. >> Through the chair, what what would cause the debt to go up so significantly? Was it road projects? Was it was The Skyway with investments going on? >> I believe that some of this is going to deal with timing on refinancing staff of where they MAY have made some prepayment gets to make that go down it in the future. It's not because of any new thing coming on that I'm aware of because as you can see, 36 million was actually kind of consistent. And then there's the drop. We have kind of got different information on that. I'm not so sure. And that's one of the things that we will dig into a little bit more is to understand fully what why they set it up that way, because that's kind of the problem. If you set things up and you're using that for your operational expend that creates problems. You know, mean, like that's a one-time savings you shouldn't be using that. We're going jump. I do want to jump ahead to a point where the I think they were also thinking the sales tax was going to continue to grow at a rate where we had some different differences. So I do want to jump too far ahead, but it's a. >> This is a follow-up in 20 to 23. Obviously. And 23. 24 cut the debt decreased significantly. Were there dollars added to reserves at that time? How will those extra dollar spent or can you tell me that today you the church council or sell those dollars were just plugged into their operational budget. >> So they they had more money. So they spent They're provided more services. >> Brought on more people. They they it was plugged into their budget and used. In those years. >> I would be interested in. What extra services they were providing as this money as more money came in. What were those services or? Is it a situation where we've got more money? We're going to spend And I don't mean that flippantly. But most companies would take those extra dollars if they couldn't added to reserves. So hopefully we'll get a picture of the reserves through this process as well. >> Thank you. We also welcome by U.S. PRESIDENT Carlucci. Go ahead and go ahead and continue MR. Peterson Parks, thank and do want to address the debt that is here is related to bjp projects. Go back in time. In 2000, the city negotiated with jta to utilize a portion of their half cent 2 for construction of bjp projects in exchange the city then contributed the local option gas tax which prior to that time frame, the city was keeping 100% of the gas tax that their original $0.06 And so it was kind of exchange. And I wasn't here still in high school, but the my my thought is jta was giving up a very pleasurable large revenue stream to the city to do those We kind of backfield with them, the elegy t but the debt that is related here that comes out of the house. It is all tied to previously funded bjp projects. All right. Moving to the next slide. One U.S. Start on the revenue side in fiscal year. 24 25 ultimately we believe all of the issues start in. 24, 25. But from revenue standpoint, this is an excerpt from our budget handout that the council would have seen in the summer of 24 and does the work for were taken from a handout that discussions with jta. We recommended reducing the sales tax by 11.4 million jta was going to offset that with 7 million in non transportation revenue related to bjp debt and then also moving 5 million in interest earnings from their general fund division over to the bus division. And I point that out because they submitted a budget that was 11.4 million dollars higher. Then what you ultimately approved. The council took our office's recommendation, but that they submitted a budget with 11.4 million in additional sales tax revenue. And I point that out because on this next slide, you'll see this is a excerpt from the year into quarterly summary. So of 2025 and do note that who pulled lines, net sales tax operating, you go to the far right. It came in under budget by 1.3 million dollars. And that was after the 11 million dollar haircut. So had that not happened. You could add another 11.4 million dollars being under budget. When you look at their budget as a whole gas tax came in 1.7 million dollars over budget. So that balance each other out. And that's why you hear from frequently that it's not a good idea to take revenue from one source and be just use it because they came over because you MAY have another revenue that comes in under it helps balance each other out. And so for the year 9, 30 25 revenues were just under budget by 65,000. In the grand scheme of things. That's not that big of a deal. So wanted to point that out then looking at. Preparation for the 25 26 budget. This is the data that we had available. The budget office had available to them. Looking at you. You can see that the transportation tax is on upward trend, even though it might be slow. It has been trending upward for a consistent period of time. This is almost 6 years worth of data. And so when it came to, but building the 25 26 budget. The budget office had a gross projection of a 137.3 million jta had a gross projection of one. 36 point to that. That numbers before the debt is taken out. We determined that these amounts are reasonable based on the 12 month rolling total that we just discussed. Was that 133.3 and the growth trend had been about 3% over that time period. We do and did note that the gas tax appeared a little overstated. But given the trends for the sales tax at the time, analyze together, ultimately it seemed reasonable between those 2 revenue sources. But then this is what happened up. Sorry. Yes. Hold on position. Yes, time you're recognized. 3 to share. Just as one of I remember this going on. Back to your slide on fiscal year. 24 25 in that excerpt. >> 11.4 million. You said. Something that, you know, you don't just go and say, hey, there's 11 million dollars you need take off of this. And only people here is the finance committee and City Council. You must've talked to some of the jta about the budget. How did that conversation go? Did they say oh, yeah, you're right. Are bad. 10% of our collections are off and, you know. How that go. If I can through the chair. Not. Well, we had a lot of pushback. Counselors say one MAY remember as the finance chair's. Well, we had to have a lot of meetings with them. They felt their numbers were correct. >> I don't know if they were looking at things correctly from the debt, not subtracting out because if you see when you're looking at. 24 25, that's when we're going back to normal debt payments. I don't I don't know if there was some confusion with those and as move back to slide, if they didn't properly. I got brought into meetings. I've not normally involved an independent agencies to have discussions on these projections. They did not. It was a lot of pushback. And so there was reluctance. They effectively, as you kind of see in the recommendation, they're basically using reserves when they eat. Did the 7 million dollar thing. And then the investment Corning's never happened because they didn't have the cash balance. So it was not a great conversation. And that's why we want to kind of point this out where that kind of is this point where I think week start getting out of whack, at least when it comes to the operations budget. And that's because as what we're focusing in on so. >> Sue and threw the chair to Phillippe. And so I asked Bill this informally like 7, 8 months ago, like out of these conversations go when you're saying, hey, got a problem. You cause your way out of whack on this and then they push back on you and doesn't sound like they had They have a good argument. I did. You and your professional opinion be like? Okay. So they didn't have a a nasty, unfair question, which is always the next one through the chair. Did you feel that they were pressured to do this? Did you get any of that? And it's kind unfair question is that's not your job figure out. But this is a big number. And you guys are telling them they're wrong and they're mad. What did you get any like sense of why this is happening? I don't think I can honestly answer that question because I I was involved in certain meetings as was going to this projection. I was focused in on the revenue peace, not necessarily. >> The impact is if your revenues to hide, you need to lower, obviously need to lower your expenditure. And that's the piece. I was not more involved in sight. It would be at fair for me to speak to that. >> And I agree that it is unfair, but I want to see just in case, you know, you never know there might be done something set back to the chair. We asked the person who's talking a Brian Philip and can why are you pushing this 10 million dollar gap? If? If they're telling you in these are smart tunes who and lady who know what they're doing. Why were you so upset? Why are we fighting this so hard? What was your math that we didn't know and I hate to use the example again. But that's where we start to figure out where the pressure was coming from. When we said, hey, your math is wrong, why you insisting on bad math. You checked you know, going to get into. So much of He says she says kind of thing, but I think it's important for us to understand the context of the conversation. Were your conversations? >> Held. Between you all and your office and those in the CFOs office or their other others involved from other positions in in leadership or other parts of jta. >> When we had the formal sit-down meeting to discuss this in that meeting was. Cleveland. Ferguson was at that time. The cfo Raj was and that I believe Jessica was in that and I can't. Number what budget. There was a budget person, at least in there in those meetings when we had that over here and just checked chicken head. Yes, she was in that meeting. Okay. Okay. Oh, yes. Know My question was I did not recall who was in that meeting. I think that's important to establish who was in that meeting. You just said thank you. Get that. That's what I wanted to go. And I appreciate council moved. Post going to. >> We get to the end, but it was better addressed right there. So I appreciate you bringing it up at that point. Any comments or use want to leave it there for now and go forward. You know, I I don't want to I don't want to keep going if you if there was something important, Michelle player that you thought you wanted to to comment on, you don't have to. To leave it there. If. Oh, yes, past PRESIDENT Salem, you're recognized through the chair. >> Remind me so you push this narrative that this is inappropriate. You sat down with him but ultimately. They just said that's our budget. We're going to move forward with it and that that's what eventually the I guess came to the city council. >> As as you MAY recall, there was actually they you are involved in somewhat that some of the discussions, obviously as well as the finance chair. And so we work through that. They eventually did. We kind of came to a compromise. Was the 11 we were actually a little bit more as what we would have even reduced you know, to be in to be conservative on those numbers and more match the cities. Forgot city cfo was there as well as some kind of talking through this so we, you know, talk through those numbers they agreed to come down with these and instead of reducing expenditures. That's when they came up with the offset. Was the non transport revenue piece which is effectively using reserves and then some investment corning stuff. So that was their safe. So they did. In the end, you reduce that line item by 11 million dollars, two-year budget process. >> You recall how much was in the reserves at that time? >> know, and I they were explaining that this was partly from a debt piece of the prepayment as we're getting that detail that was kind of pushed on that. And we did not have a lot of time. We kind of had to rely on them again. So we're not able to understand their reserve, like with our peace with what we're able to see live and everything else. There's a little bit of a difference of feeling comfortable with those numbers. Ok, we will be showing later, though, kind of where their current assets and current liabilities were. From an audited financial statements. Thank you. We're going next to finance Chair Lane and you're recognized. Thank you, chair through turn, MR. Parkes appreciate Bringing up reserves for the first time in Councilmember Salem. I think we're on the same >> level here about the reserves. If you look, I really think this is an important moment for the beginning of all the problems because if you look on Page 6, none of those were cash substitutions. These are essentially balance sheet moves. I believe to balance the budget. And this is really what led, ok? We're going to have real. We're going to have less cash revenue. We're going to balance our budget through balance sheet transfers. And this ultimately was the beginning that led to on MAY. 28 2026 of this year telling the board that they had $938,000 in operating cash not to get ahead of the story here. But we're about to go through 3 or 4 quarters of deficit spending that ultimately led to under a million dollars in operating cash and then needing a line of credit really fast. Start paying our bills on the way credit. So want to reiterate, I really think we could go back in time. How can you balance this budget on a cash basis? Not just making moves to match the revenue reduction that we agreed to at the time. >> spawn unless you have something you want to. I don't ok, okay. Let's let's go on police. Thank you. We talked about the projections of the city and the jta for 25. 26 once again was based off of this constantly growing have sent transportation tax. You'll see what happened afterwards Diamond, if you will, that's in JUNE of 25. That's the information that. Everyone had available at the time. The 25 26 budget was being approved yet the transportation tax kinda just started going down after that, which is the one of the contributing factors in the shortfalls that are occurring in the current year. From a revenue standpoint. 24, 25 because of the lowering of the sales tax by 11.4 million. But yes, they used roughly 7 million of reserves to kind of fill that hole. But the revenues were not a problem in. 24 25, however, in 25 26, they became a problem that we'll talk about that a little bit. Then on the expenditure side, what we have taken here is the quarterly summary for each of the last. For years are completed 4 years. And then shown you the projection provided by jta. Where they are as of the 9 months ended, JUNE 30th of 26. Don't expect you to do math, but the 9, 30 22, yes, they went beyond budget from an expenditure standpoint, but it's only to the tune of 4.8 million. In 20 3. They're under budget by 3.2 million. And 24 over budget. But it's only 3.4 million. But then you'll see. And 25, that's the 19 Million. And that's that's where we see the problems really starting to arise. So kind of see take you through? Should we have seen this along the way? And so what you have on the next following pages are excerpts from each of the quarterly summaries along the way year in for the first 3 years. And then we'll go quarter by quarter beginning in 24. 25 and so at 9, 30, 22 and once again, these are direct quotes from the reports that our office issues, it provides to the full council and then gives of an actual report to the Finance Committee when they come out so end of end of 22, there was no budgetary stress for jt as a whole all of their divisions had gone over budget. But like I said, that was just to the tune of 4.8 million and while 4.8 million is a small number, it's still going beyond their council approved budgetary authority. If you've sat down with me at any regarding these that's what council has approved. And they have gone beyond that spending authority. They come back to you with a budget amendment, whether that's 3 months, 6 months, sometimes 12 months later. You stick a pin in that. Please present Salem. You're recognized through the chair. This gets to where there. >> They're coming back to the council with a revised budget. Sometimes was 3 months, 6 months. A year later. And we really got on jta, as I recall. >> Through the Finance Committee and other places about being more timely on a budget amendments. That's important to is that recall? >> Through the chair accounts were saying you're absolutely correct. I don't recall the specific year, but there were years where they were coming back 12 months after the year had in did asking for a budget of Bennett to be in line with their budget. At some point along the way, believe is you that lead that charge requested and to try to be more timely. And now when they have budget limits, we're seeing that more and that DECEMBER timeframe. So 3 months after the budget has ended, and I I get it to some extent. They if if the the first 9 months you're somewhat on track to meet budget, you MAY not know that you're going to go over budget in till that the last possible minute. Given that they've got to go through that, the council, the process, they don't have necessary to have transfer authority. But if you're going to go over budget, you MAY not know that till the end. And so they wait until their financials are more closed state to come back to you so that they don't have to come back again. But in the the 20 for 25 year where it became very obvious, at least on jta side and that last quarter, they should be coming back to you at a sooner date to make you aware of what's going on and to seek a budget amendment. Go forward a year 9, 30 23 once again, we say that there's no budgetary stress. We do note in here that the bus connection and very divisions exceeded budgetary authority. The bust division only exceeded budgetary authority because at that time the all of the revenues went into the bus operations and then they transfer dollars out too. Each of the other divisions. But for that bus would not have gone over connection and ferry. Each over by $700,000. In fiscal year. 24 once again, we say no, but but no budgetary stress, the connection division win over by 4.4 million ferry, whatever by 20,000 and then the bus, internal operations, whatever by 800,000 and they needed to come back to you for a budget amendment. Then looking at the 1st quarter of 24. 25 which this quarter did not indicate issues, but this was the start of the issues. So draw your attention to the bolded part that says they're projecting the overall surplus of 34,000 for all of their divisions that is made up of a favorable revenue variants of 2.1, 8, 9 million and an unfavorable variance, meaning barrick's expected to spend beyond their budgetary authority by 2.1, 5 million and expenditures and not bolded. But the last 2 sentences of that say they are projecting the half-cent sales tax, the constitutional gas tax and local option gas tax to come in at their projected amount. It at budget we noted that this MAY not occur and we'll continue to track those on frequent basis going forward. But I if we get ticket pause there, I just want to ask something for clarification purposes and also just a. >> Just a do a little. I would cut a foot stomp on what you just went through We started in 22. There are clear indicators and clear things that were being. Noted and looked at especially when they had to come back to us for exceeding what was approved by the full Council for their budget. And so I I just want to make sure. I hit that. That. What you've started with was in. 22. And this picks up as you go forward here, obviously and in and in our further need for involvement. But I just want to make sure that's that's in. 22 now. You you've repeated the same statement. Here in these quarters up to this point saying that they exceeded the budgetary appropriation approved by City Council. You know, just for just for comparison purposes for the other entities that the full City Council approves budgets for. What were we looking at? I know you don't have exact numbers, but what are we looking at the same time period? How many other agencies that we approve budgets for. We're coming back to us for quarterly revised. Budgetary adjustments to get approved. To the chair. Don't hold me to this, but memory is correct. Ge has come back to you. At least once maybe twice over this 5 year period. And then I don't recall Jpa or coming back for exceeding budgetary authority. Ok, thank you. And I and I think pastors and Salem his finance experience MAY be able shed some light on as well. Just just for >> context. Thank you. No, I'm going to go a little different direction. I would love to know. >> Where the board was on some of these. Can we match up information that was going to the board at the same time or they're minutes along with these discrepancies. Were reports going to the board? Were they discussed? I think that's a critical component of this. Somehow we've got to get minutes to see what they were told. Because if they were told that's a problem. And if they were told what was the response? >> Through the chair, I'm going to try to answer the question and defer to jta if I get something wrong. But based on the presentation that Mr, Barnes gave. >> Last week in committees when we were discussing the 30 million dollar loan, Avila gt funds. I believe he had ace a bullet that said that the projections were not being provided to the board. So without having projections, I don't know that the board could have known. With that. They were going to exceed budgetary authority. The board did approve budget amendments. That was always a requirement that's attached to all the pieces of legislation that you see. But that's an after the fact Ish issue after already occurred. >> Let me clarify. I'm not trying to blame the board. I'm trying determine the facts. What was occurring was the board informed if they weren't informed then you can't blame the board, then it becomes an operational issue that the board was not informed. And that's a whole nother problem that we need to correct. And all our 40's much less jta. >> I don't disagree with you at all. And I think that was the point that MR. Barnes was making when he made his presentation. Is that? Because the projections were not being provided to the board, they wouldn't have known. And that is that staffing issue, which is now being remedied because they are now providing projections let me just me. >> If I'm a board member, I am sitting home angry as h# # that. Know, the Boris. Is there for that very reason. And they weren't provided the information they needed to have to make appropriate decisions. Thank you, chair. >> MR. Barnes I'm assuming you want to comment on on that line of discussion Stu. >> Yeah, thank to the chair to the committee. >> Just want to clarify what the board has been receding. So they do receive. >> Reports financial reports for every board meeting that are for the prior the prior month and year to date they do not. They have not been receiving projections, but we will provide going forward. But that is not something that we have provided. Ok? Thank you. We'll we'll next. Go >> Councilmember time. And you're recognized. Thank you, MR. Chair I was gonna ask question to later, but I you jump right on Council in Salem me, this is a it's wild to be on board and act to get projections. And then it begs the second question where they intentionally not given projections because they were so bad. And that's the question. We need some people at this podium to answer, including I think that 40 to answer some of these questions, board chair, I think any be up there. That's just my $0.02 But I was going to ask more tailored question on these these updates cause. i remember looking at these, remember this language eta's not seeing any budgetary stress and for a guy who did like lot of what they're doing like always and are breaking the bank. And now you're telling us. Yeah, by 24, it was a lease obvious that their projections were being very generous and and I but here's my question through the chair of field. At what point did your discussions with jta? You know, money, people, the budget, people go from just normal home, dealing with Jack Sport and j a. >> Just professional numbers, guys going back and forth. And ladies to tense, like when was the earliest time this stuff started to get little less fun. And just for the committee, I think that's gonna start to tell us where the people side of the started to go sideways. Through the chair. Counselor Diamond. I don't know that I would ever classify our interactions with them And I hate to do this in a public setting. They've always been the most difficult agency to work with. Responses are not have not been timely in the past. Responses didn't necessarily make sense when we got answers to our questions. But it was never uncomfortable dealing with It just. Just it was not. We were not getting great information on quick turnaround, ok? So 2 things, one, I think that's a Jacksonville problem that we are more honest about hate. This agency is hard to deal with. We need to get that stuff out that they're not giving us time. We staff that is not you've got to get the auditors the right staff on time. So that's a If if I MAY council Medina. Line of. Question in Ok, we roughly what time period we talking about here. I mean, I want to I it just a rough timeline. You said you said, you know what, your assessment as the otter working with all these agencies is are we talking 5 years? We're talking 10 years. Through the chair to the chair and the committee. So I've been with the city for 21 years. I've worked with in the pit independent agencies like that was one of my first jobs when hired in 2005 transition off of them came back transitioned off and now back again. As long as I can remember. It's been that way with jta and I'm not going to give them a pass, but they are a little bit different of an entity being a state. Semi agency. However, you want to classify. That's Where as jta wholly owned by the city, that's a different animal. Je pa in just I don't liqueur. Just great people along the years. Not aware of any issues. I take that back. We have had issues with one of them along the way, but we've worked through it so but it is unfortunately, as long as I can remember it, it's been. Pulling teeth to get stuff from jt, ok, that's important. Know, back over to you. COUNCILMAN Member Diamond. Thank you, MISTER. And I just had like one follow-up because I'm just trying to get my time lines like in my head here. >> So I you tell us that in 24 25 budget like your like 10 million, 11 million off. They're giving their light. Now we like are bad numbers, no matter how smart you guys are. When was the first time those kind of conversations were happening. Like can you tell us like at what point where you're like, hey, you're being very generous with your projections. It looks to me like that's probably for this when this 24 12. 31 24 quarterly summary is coming along is that when things started to be like, look, our numbers and yours are just not jive in together. >> MR. Parks. And making sure answer was the same. Always So and I say that because both of us have worked with different agencies at different times in the 24 25 conversation he was involved. I was not involved at all. But that was kind of the first significant push back we got from them. We would have disagreements in the past but were able to work through them in one way or another. And get to a resolution that we felt comfortable coming to you with. That was the first one that kind of really stood out where there was. Pretty significant pushback from them unwilling to necessarily need us somewhere along the way. Roger, thank you. Thank you. And she said this earlier, but we welcome Councilmember Clark Perry as well Mexico, too. The finance chaired Landon. You're recognized. Thank you, chair. A first dog still amaze from last week hearing that the board members did not get projections. And I think I'm just as amazed that. >> I mean, these are 7 pretty accomplished people that no one was asking for projections South, reach here to MR. Peterson, could your team look at the other in independent authority sometime the next few weeks to see if their port board packages containing projections because they get actual is are important, but not nearly as important the projections telling you where you're heading and same thing with cash position. I'd just like to know because I know on the MAY 28 jta board meeting maybe because I asked a week prior to that what the cash on hand was concerned about all the Corley deficits that we had for 3 or 4 quarters in a row. I wanted to make sure that they were going to update the board. So I do know that they had that in the board deck. I don't know how much conversation there was on the fact that they had less than a million dollars remaining for cash on hand. But I mean, I think all of our independent authority board members should always get projections and they should always know the cash on hand. And I was just a scourge to hear that that had not been happening. Thank you. And I I don't you know you you went through that in a very efficient >> man or I don't want to lose the fact that we talked a little bit earlier about they they were being provided that information. But it is on the board to ask for that information if they're not getting what they need to make good board decisions. So I wanted I wanted to. Hit that one a little bit as well. We'll go next to Vice PRESIDENT Carlucci. Recognize again. Thank you. MISTER Chair and kind of had the same exact. What did we get? 100% clarification from jta that the board didn't get these projections. >> Can someone answer that because I kind of well, maybe they did, but maybe they didn't. What did they or did they not get the projections? >> Chair to Councilmember Carly Key to my knowledge, they did not get projections for fiscal I mean, what provided actual isn't year-to-date. Okay. Monthly actuals and and year to date but not projections. Okay. Understood in. >> To reiterate again, no one asked for asked for them either. >> wasn't here. So I not to my knowledge, not well. I've been here and I want to ask, got with the correct. Person or entity is to do this. But I I I agree with the earlier recommendation. Let's go back through the board. >> Minutes, tapes, whatever it is. So we actually check verify you know, for says what we think we remember. And let's let's matchup what's been said to make sure it does impact matchup. What actually occurred. So I'm not sure who that is sending buddy have a. Have any thoughts for me to make sure that we we do go back and do that through the chair will commit to going back through board packets to see what was included in them minutes. Don't always give a great picture of what happened. But the package should whether or not there's an included will report back to you. Very good. Thank you very much. And one other thing. Well, he's >> I guess is another question. The ogc is there. Is there. >> Policy or action that we can take from the council side like you know, ordinance, whatever to require that or is that just an internal change for jta to making? Hopefully? >> Through the chair to Councilmember Carlucci, not. Not really. If they're not even jta isn't even in the charter with wrist because they are state hybrid agency. They are created by virtue of a state statute. So you're really not in a position to legislatively and force or address how their board meetings and what information gets shared, et cetera. With respect to jta like you might be with some of the other independent authorities do so. Okay. Got it. Do we threw the chair? >> Require them to come before us, though, and give financial updates during the budget. >> The charter provides. Because they're an independent authority and they're not they're not her own section in the charter. But the charter provides that the independent authorities come to you for. Budget approval each year. And so that's why you see the amendments that occur periodically mid-year. But it doesn't require other than the presen presentation of their budget for approval or amendments there, too. It doesn't require that they provide reporting throughout the year. >> we can't require them to give us reporting. Through the chair, the council, vice-PRESIDENT Carlucci, based on the language that's in the charter. I don't believe you can, but you can always request it. And a lot of reporting comes through the council auditors office as well. So to a certain extent, you MAY get some through them. Okay. Do the chair to MR. Parsons, you have something. Through the chair. It accounts for college. You said they do provide the quarterly reports to us. So there is some level of reporting we're trying to determine if that's included in that the ordinance code. >> Or if that's in their chapter 3.49, a Florida statutes where their operations are laid out or maybe it's in both. I don't have that top my head, but we are getting some level of reporting. I don't know if you're looking for something more just and a lot. Last point. What I'm trying to do is make sure that their board is getting the projections. >> So if that's the you guys getting it and sending it to them or than just treating new internal process and actually sticking to it. Unlike fine. But that's on trying to do. After the chair Councilmember Carlucci, I can can certify that we're going to be providing projections going forward, said no, no issues with that. Also, just want to say any time these guys say something. We're going to listen to I've worked with them for a long time. So >> there aren't going to tense arguments if they if they bring up a point, they're probably right. So we're going we're going to work through it and understand that just want to make that point. >> Thank you. And nothing more. Just quick point from past present Salem, then we'll go over to Councilmember Clark. My. Thank you chair. Chair. I don't know for ever going through this process. Bring in some. I don't like to use the word witnesses, but but I'd love to get a board member in here. Preferably the board chair and to ask >> him or her what they knew. >> Did they did? They ask about projections? Did they have any understanding of the financial situation of jta through this period of time that maybe a couple of board chairs. But that and there's been some names that have come up that were in some of these meetings that are still with jta. We need to hear from them as well to understand what they were thinking because something went astray here. Thank you, chair. Over the Councilmember Kleckner. You're recognized. >> Thank you, chair. And good morning to everyone through the chair to MISS Pull us. Councilmember Carlucci just talked about what type of authority we have. First of all, I know that the the charter we able to revise it before or amended before that? And you are that 10 year whenever the revision. Data a time is. Through the chair to Councilmember Clark Murray. So >> there is the Charter Review Commission that you're thinking of. Yes, there's different ways in which charter committee amended you can amended by referendum. You can amend by Jay Bill, a local bill being processed through through the state legislature and then there are certain exceptions where you can do modifications to the charter that are non substantive, et cetera. There's a few exceptions to those rules. But the difference for jta is that they are not in our charter. I like the other independent authorities are because they are created by virtue of state statute and they are a hybrid state agency. You probably be more looking at. Is there a way to amend the state statute specifically in that you can do that through a local bill. But there's there are a little different in that regard just because of what they are. Thank you so much for that. Also threw the chair, sir. Resolution. Can we? >> Draft a resolution? Prompt the state. At the changes that we want that are necessary seeing that this is unusual circumstances. >> Through the chair to Councilmember Clark Murray. So normally when you do a resolution to prompted an adjustment to state law, that would be of local application, you would do that with a j bill being included. That sponsored by member of the representative member of the delegation that takes it to the state. You also have the ability to the extent the council wants to take a position, be a resolution and just put it out there to the delegates. If you wanted to address it to the Duval delegates that there isn't a desire of the council for some action to be taken. Maybe not would necessarily through a j bill, but to see if any of the delegation members says I agree and wants to pursue legislation on their own behalf are, you to the extent that you have the ability to speak with delegates about the interests of the city. And its independent agencies and see if they would sponsor their own legislation, not necessarily through Jay Bill. You can you can do otherwise, normally the traditional. Pathway is to to do a local bill so long as it's only of local application, which what you're discussing pretty much what the Thank you. Thank you, MR. Public, thank you. Chair. Thank you. Good discussion. Thank you very much. Back to the regularly scheduled program here. Thank you. >> All right. So indicated at the 12 34 quarterly summary they were projecting overall surplus of 34,000 fest for 3 months. The 3 31 25 quarterly summary gt is projecting overall surplus of 2.3 million, which was made up of version revenues and over expanding of 2.4 million and expenditures. We did notice that the overall net surplus. Does assume that the half cent constitutional gas tax and the local option, gas tax all come in at the budgeted amounts. While this might not occur, we were going to continue to monitor those going forward. So we went from a 34,000 surplus to a 2.3 million dollar surplus. And then at the 6, 30 25 they're projecting an overall surplus of 3.9 million south from 34,000 2 2 points. 3 million to 3.9 million. And then once again, we know based on the information that we had available to us at the time, they were still projecting to come in a budget and that appeared reasonable at the JUNE 30 deadline. Then we get into the 25 26 budget. So the JUNE 30 25 quarterly summary is due to the council at the end of JULY, you adopt the budget for gta and all the agencies in the city are financed. Does in mid AUGUST. So wanted to draw your attention to 2 items, specific items that came up in that budget review. One was the b# # Bus Division Services category, an increase of 5.7 million. And we noted at the time that 10.8 of that was due to an increase in Abby and the Autonomous Innovation Center. There was partially offset by a decrease of 3.1 million and their professional services line. When we asked about this decrease, no explanation was given on how they were arriving at this cuts. Then in the ctc, which is the connection service. The budget was decreasing by 642,000 even though the year. 24 25 that we're currently in. Was it expected to exceed budget by almost 4 million dollars? They were pretty. Wanting to budget a decrease in that service. And then the next bullet shows some items that made up that those numbers and that first line just and kind of reiterate what we were talking about earlier due to a reduction 863,000 and contractual services. However, when we asked about this increase, no explanation was given on how those cuts were going to be made. We were separately notified by jta that they were going through cost-cutting exercises that would help cut 7 million dollars within their budget. There were we did receive a spreadsheet on it. It was not the most detailed, but they were actively trying to address these measures. So that's AUGUST of 2025, then the quarterly summary for the year end. We went from 34,000 projected surplus. 2.3 projected surplus. 3.9 projected surplus. And then we find out that they are ending the year and an overall deficit of 18.9 million. So this this and this is where reliance on their projections, they can appear reasonable to us. But we are we do have to rely on them if nothing stands out entirely. So. This this is the first year that there we see significant problems and this is on the expenditure side and 18.9 million dollar issue bus in connection both exceeded their budgetary appropriation bus is where now the is. Buried, if you will. And the connection is the connection. Regular service and the connection. Plus service both exceeding their budget. So that's 9 30 25 which for your reference the year in quarterly summary think every entity gets an extra month so. You and us would have received this at the end of NOVEMBER 2025. We make this report. Our office is required to turn around this report within 15 days. So by DECEMBER, 15th. And more than likely, if my memory serves me right, council had already met. You go on a 2 to 3 week Council break. We come back in JANUARY to present this information to you. Early got the we have Councilmember Diamond in the queue for so we'll go. We'll go to him. I'll be quick because I don't I know you've got a hard deadline, but through the chair to fill up. Okay. So. >> Budget surplus. 36,003 plus 3 million, 3 million throwing 18 million deficit. Did you like drop your chair? Like where you like? This is wild by. What was your reaction to this? >> Through the Chair Council or diamond. So I was knee deep in legislation at that time. So I didn't I wasn't really involved in this aspect. Him would have. Dr Chair, correct? Yes. Okay. Which a real question. My real question is this. >> The doh variance between what they're reporting from the 3rd quarter to the end of the year. >> Was over. 21 million dollars off on 140 something million dollar budget. Tell you that there is a significant problem with how they were doing their budget math. Given the gap is 20 Million. How much of that would you attribute to new projects it in Abby? >> South through the chair to council diamond that was our will to our initial. But that was confirmation that. Projections from an entity that you don't have access to that we can't fully rely on And I'm not saying that anybody was trying to mislead anyone along the way. But that that was kind of all right. The red flag is for real up now. Not just hey, we think there might be something that was that was the red flag of we've got to. We've got to figure something else out when it comes to. These independent agencies. And how much of that did you guys a tribute to this new expensive of under buses for n# # ? >> And that connection center so through through the chair to counter a dime. And that's the reason we included that prior right there. >> That they were projecting 9, 10.8 million for Navy in the 25 26 budget. Now Abbe went live. We look to state up yesterday and I'm drawing a blank, but it went live sometime in 20 4. I believe. Maybe as 25 so that is a contributing factor to it. The other factor and I will get into in. 25 26 Corley summaries, but the connection plus service greatly increased in cost in a relatively quick time frame that I don't think jta was ready for and then day under budgeted on their fringe benefits