Mayor A.J. Holloway, citing a need to shore up city finances, has vetoed two budget measures passed by the City Council on Tuesday.
Holloway notified councilmembers this afternoon that he vetoed the proposed budget for FY 2015 because the $53 million budget provides only a $56,000 spending reserve, which, the mayor said last week, could lead to a downgrading of the city’s AA credit rating and fails to provide adequate funding to meet unexpected expenses.
The mayor also vetoed a companion resolution, the tax levy that would have funded the budget.
Holloway proposes shifting available funds to help the city end the new fiscal year with a nearly two-million-dollar reserve. Financial analysts recommend that the city should maintain a healthy contingency fund, and as a result of its financial stewardship, Biloxi is one of few cities in the state to have a coveted AA credit rating, which affords the city lower interest rates when borrowing money.
In his memorandum to councilmembers on Sept. 4, which Holloway attached to his veto, the mayor said councilmembers could create the $2 million reserve by shifting money from a long-term debt fund – the city has enough money to cover debt payments for nearly three years – and by using funds from a $14 million bond to cover street-related projects.
Said Holloway in his memo: “I believe these two budget changes will provide the city with the best ending fund balance, as well as provide for a few fund contingencies that may occur during the year.”
Read the Mayor’s veto message
