Days after a City Council committee sliced a public-private fund for affordable housing from her proposed budget, Mayor Donna Deegan called the action a “big mistake” that was motivated by politics.
During an Aug. 13 appearance on the WJCT News talk show “First Coast Connect,” Deegan also slapped back at Council member Rory Diamond’s proposed legislation to reduce the mayor’s discretionary spending to $99,999 from $500,000. She called the idea “absolutely insane” and said it would bring the city to a “screeching halt.”
Deegan criticized “one or two people” on the Council Finance Committee for prioritizing their political ambitions over the needs of the community in axing a $10 million city loan to launch the affordable housing fund.
The cut, which was made on a voice vote on Aug. 8, was among the first by the Finance Committee in a series of budget hearings scheduled through Aug. 23. Some committee members came into the hearings targeting Deegan’s plan to spend $47.2 million in operational reserves on several one-time expenses, which included the affordable housing loan.
Deegan didn’t name specific Council members in her criticisms, but identified one as the member representing her neighborhood in the Beaches, which would be Diamond.
Diamond, a member of the Finance Committee, has spearheaded several cuts to Deegan’s proposed $1.9 billion general fund budget, including the housing loan.
Deegan said her administration would strive to get the money back in the budget, which would require a two-thirds majority Council vote after the Finance Committee carved it out of the budget instead of moving it “below the line” where it could be reconsidered later.
Affordable housing plan
She said the $10 million loan, which was designed to be paid back to the city in 20 years, had already been matched by more than $20 million in private investment en route to a target of $30 million. Over its lifetime, the loan was structured to spur development of $120 million in affordable housing.
“There is no other money in the budget for affordable housing,” Deegan said. “So this is a big deal. We need that money back in the budget.”
The fund is a high-priority item for Deegan, who celebrated its creation during a media event in April that drew Council members Joe Carlucci and Michael Boylan along with other community leaders.
Her comments on the talk show came a day after Joshua Hicks, affordable housing director for the city of Jacksonville, told a special Council committee examining the community benefits that the community is short 35,000 units of affordable housing, with 26,352 people on the Jacksonville Housing Authority’s waiting list for low-income housing assistance as of March 2024.
Diamond called the fund a “half-baked idea,” referring to a Council auditor report stating that the term sheet for the loan didn’t include basic details such as the minimum number of affordable housing units that would be created through the fund. In moving to cut the expense, Diamond said Deegan’s administration could bring back a refined version of it later.
During her talk show appearance, Deegan contended the loan was fully formed, having been developed over the past five years and modeled on funds that had been successfully rolled out in other cities.
“We’ve got to get to the point where we simply stop playing politics with people’s lives and start moving forward,” she said.
‘Absolutely insane’
On Diamond’s proposal to require the mayor’s office to obtain Council approval to spend more than $99,999, Deegan said the legislation would subject millions of dollars in spending to the six-week Council process. She contended the measure wasn’t fiscally responsible, and instead would result in delays and added expenses for such projects as riverfront parks and septic tank replacement.
“If that (discretionary spending) were gutted and everything had to go through the six-week cycle of Council, can you imagine how much that would cost us?” she said. “It’s absolutely insane.”
Diamond and Ron Salem, the Finance Committee chair, have been lead critics of Deegan’s reserve spending, with Salem calling for caution in a budget year when tax revenue came in at less-than-projected levels and the city facing big-ticket expenditures in the near future.
Those include a $775 million outlay on the “Stadium of the Future” deal with the Jacksonville Jaguars and an additional $56 million in community benefits attached to the agreement. An additional $94 million in community benefits are under consideration by Council, and the city also is moving toward replacing the Duval County jail at a potential cost in excess of $1 billion.
Spending city reserves
Deegan said her budget was fiscally sound and would address critical community needs while leaving the city with ample reserves. The city is carrying operational reserves of $345 million, with another $125 million set aside as emergency reserves that can only be touched if the operational reserves are exhausted.
Last year, Deegan said the city salted away $76 million in reserves. Using some of the reserves now, she said, would allow the city to take care of needs such as new emergency vehicles and equipment without resorting to tax increases.
“There’s nothing elaborate about this budget,” she said. “It’s focused on real needs.”
Deegan said the administration had made strategic investments that were paying dividends, including increases in salaries and pensions for police officers that had helped generate an 88% increase in applications for officer positions and new fire stations that resulted in lower insurance rates for surrounding neighborhoods.
Throwing bombs and darts
Deegan said the criticism from Council was “coming mostly from one person,” whom she indirectly identified as Diamond. The Democratic mayor said Diamond, a Republican, used his Council seat to “just drop bombs or throw darts” to support his ambitions as a far-right political candidate.
“He is clearly more interested in his next political gig in being combative toward me than working to get things done,” she said.
Asked for a response, Diamond sent an emailed comment saying, “Donna Deegan calls anyone pushing back on her extremist left-wing agenda ‘political.’ She is incredibly cynical, and it’s very disappointing. We need a balanced budget and some sanity in City government.”
Diamond, elected to Council 2019, has never voted in favor of a city budget. He voted no on Republican Mayor Lenny Curry’s budgets three times and was absent for Deegan’s budget vote last year on military duty.
Storms concern Salem
Salem said he would have taken his same course of action on the budget regardless of who was mayor.
Based on looming expenditures and on Council audit budget projections showing possible deficits through 2029, Salem said his goal was to minimize reserve spending and protect the city’s financial cushion to use in the event of severe weather or economic crises. He noted that the city and JEA spent $7 million in response to Tropical Storm Debby, a relatively minor storm, and forecasters were predicting several major storms to break out during the 2024 hurricane season.
“There are fundamental differences in policy here between how I think about reserves and how she thinks about reserves,” he said. “My thinking about reserves is they can be utilized, but it should be a minimal amount and they should otherwise be saved for when the city is in a bad situation. If the mayor would like to have a debate on reserves I’d be happy to have that debate.”
Regarding the affordable housing loan, Salem said he had never been briefed on it and believed the administration should have brought it forward through the normal Council process versus placing it in the budget.
“This is a major policy,” he said. “And I don’t believe that major policy initiatives should be included in the budget. They should go through the normal ordinance process where you get the public to weigh in during the normal six-week process.”