Income Strategies Committee focuses on spending discipline as dedicated funds continue to grow
MANDEVILLE — Mayor Clay Madden said Monday night he is not prepared to pursue a sales tax rededication for the City of Mandeville, citing repeated voter rejection of similar measures in neighboring municipalities and a belief that the city must first demonstrate tighter control over its cost structure.
Speaking as chairman of the Income Strategies Committee at its February 9th meeting, Madden said recent failures of tax reallocation initiatives in St. Tammany, Tangipahoa and East Baton Rouge parishes show a lack of public trust that government is spending tax dollars wisely. Instead of advancing a ballot proposal, he said the city will focus on internal reforms first, including possibly pausing the cost-of-living adjustment adopted in 2021.
“I agree wholeheartedly that the imbalance needs to be addressed,” Madden said, referring to the growing gap between restricted funds and the general fund. “However, I feel that we need to exhaust every feasible option in adjusting our cost structure before taking on a reallocation ballot initiative.”
Dedicated funds grow as general fund faces pressure
Madden said Mandeville is experiencing a financial dynamic common to many municipalities: dedicated fund balances continuing to swell while the general fund struggles to keep pace with rising operating costs.
He pointed to significant growth in several restricted funds since he took office in 2020. The Streets Fund has grown from $17.7 million to a projected $23.7 million by the end of fiscal year 2025, a 34% increase, even while $9.6 million has been invested in street and capital projects. The District 3 Fund rose from $4.9 million to an expected $7.1 million over the same period, a 45% increase, while still funding $4.6 million in capital improvements.
The Special Tax Fund, Madden said, declined early in his term due to one-time expenditures such as land acquisitions and the Bayou Castine bulkhead repair, dropping from $11.1 million to $7.7 million by the end of 2022. Since then, it has rebounded sharply, growing by $4.9 million to a projected $12.6 million by 2025 — $1.7 million higher than when he took office, even after $14.2 million in capital spending.
Overall, Madden said total governmental fund balances have increased by $9.8 million since 2020, rising from $57.5 million to $66.7 million.
COLA pause and salary review
Madden said a recent review of the city’s cost structure, conducted with Finance Director Jessica Farno and committee members, led him to conclude that the city’s cost-of-living adjustment should be paused, at least temporarily.
Human Resources Director Joanna Anderson presented findings from a recently completed “micro” salary study and the Social Security Index. She said most city positions fall within 3% of market averages, though several positions — particularly police officers, public works, planning staff and some clerical roles — lag behind the market.
Anderson said the Social Security Administration set the COLA at 2.8% this year, but the city’s compensation consultant suggested a compromise increase of roughly 1.4% to maintain competitiveness while slowing growth in personnel costs.
Committee members questioned whether benefits were included in the salary analysis and discussed whether future cost savings should focus on salaries, benefits or both. Madden cautioned against undermining recruitment and retention gains made since the city’s 2021 compensation adjustments.
Push for clearer financial reporting
The committee also reviewed a proposed financial “dashboard” designed to make city finances easier to understand for council members and the public. The dashboard would track revenues, expenditures, headcount, overtime, capital outlays and fund balances in a private-sector-style format, while remaining supplemental to legally required financial reports.
Farno said the dashboard could be populated from existing accounting systems and used as a recurring reporting tool, even if it does not replace reports required by state law.
Discussion also focused on overtime reporting, particularly for police, where holiday pay is currently categorized as overtime. Farno said staff are working with the city’s IT department to better separate true overtime from holiday pay in future reports.
Fund balance policy debated
The final agenda item centered on whether the City Council should formally establish minimum fund balance targets, rather than debating balances each year during the budget process.
Councilman-at-Large Jason Zuckerman argued that excessive restricted fund balances limit the city’s ability to address operational needs and force recurring budget debates over the general fund.
Farno cited Government Finance Officers Association guidelines recommending that local governments maintain at least two months of operating expenditures in unrestricted general fund reserves. She said Mandeville’s projected general fund balance represents more than seven months of operating costs, well above industry standards, while the city carries no debt.
Committee members discussed whether fund balance targets should be adopted by ordinance to provide long-term consistency across councils, while allowing future councils to amend the policy as needed.
Next steps
Madden said no immediate action will be taken on tax rededication and emphasized that upcoming months will focus on cost controls, organizational review and budget preparation ahead of the July budget cycle.
The committee plans to meet again after Mardi Gras, likely in early March, to continue discussions on cost structure, financial reporting and long-term fiscal policy.
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