Discon, who said last week ‘we’re overspending,’ offers no operating cuts and says budget now ‘looks pretty sufficient’
Civil Service’s 2.8% COLA would consume roughly $200,000 budget cushion
MANDEVILLE — After weeks of warnings about city spending and a pointed challenge from Mayor Clay Madden to identify where Mandeville was overspending, Councilman-at-Large Scott Discon completed his review of the proposed fiscal year 2027 operating budget Wednesday night without identifying a specific expense he would cut.
Discon, who also serves as the council chairman, ultimately joined other council members in praising Madden’s proposed operating budget, saying he found little room for significant reductions.
“I’m looking at the budget right now, and I do agree with everybody that it looks pretty sufficient,” Discon said.
Later, after the council had worked through the operating budget, Discon acknowledged he saw little room for substantial reductions.
“We went through the operational tonight,” Discon said. “I don’t see where we could make any big change. I guess we’d have to look at capital.”
Discon then suggested capital had been the greater area of concern during last year’s budget deliberations — a characterization Councilman-at-Large Jason Zuckerman immediately challenged based on Discon’s own voting record.
“If I remember correctly, last year, capital was where we had more concerns on budget cutting,” Discon said.
Discon questioned on last year’s vote
Zuckerman pointed out that approximately $2.2 million in proposed reductions last year had instead targeted the operating budget — the same budget Discon ultimately voted against — while Discon voted in favor of the capital budget.
“Again, you just mentioned that last year the concern was in the capital budget, but there was $2.2 million in cuts offered to the operating budget, and the operating budget is what you voted against,” Zuckerman said. “You voted for the capital budget.”
Discon did not dispute Zuckerman’s account, saying instead that he could not recall all of the details of the previous year’s deliberations.
“I can’t remember the specifics of everything that happened a year ago,” Discon said. “It’s been a big year of a lot of work on the council. So without getting into nit-picky, accept my explanation and let’s move forward.”
The exchange followed a notable shift from Discon’s comments during the council’s Aug. 13 budget hearing, when he accused the city of overspending under the proposed FY2027 budget and said expenses should be reduced.
“I still think — we’re overspending,” Discon said at that hearing. “We should be saving some money somewhere.”
Discon argued then that before city officials considered changing how restricted tax revenues could be used or asking voters for greater flexibility, the council should demonstrate that it was serious about “fine-tuning our expenses.”
When Madden pressed Discon to identify where the city was overspending, Discon said council members had not yet conducted their detailed review of the operating budget and he was not prepared to identify specific reductions.
Wednesday night was that review. With no significant operating cuts identified, the search for the savings Discon has advocated now moves to the capital budget, which the council is scheduled to examine at its next budget hearing, scheduled for Aug. 26 at 6 p.m.
Looking for ‘fat’ in ‘clean’ operating budget
And Discon was not alone in finding little to cut from operations.
District II Councilman Kevin Vogeltanz, who proposed approximately $2.2 million in operating-budget reductions last year, called the proposed FY2027 spending plan “a very good budget.”
“There’s not a lot of fat in this budget, at least from the operating side,” Vogeltanz said.
Vogeltanz explored whether an across-the-board 1% reduction could produce additional savings but questioned whether such an arbitrary cut would accomplish anything beyond forcing departments to return to the council later for budget amendments when legitimate expenses arose.
“I don’t know at the moment if I have any proposed cuts to make at all,” he said.
District I Councilwoman Cynthia Strong-Thompson similarly described the proposal as “a very good budget” and “a very clean budget,” saying she saw little reason to “nickel and dime” operating expenses.
Zuckerman called it “a very solid budget” and again emphasized what has become one of the administration’s central claims about the FY2027 proposal: recurring revenues are projected to exceed recurring operating expenses.
“This is the first time since I’ve been on the council we were able to put together a structurally balanced budget,” Zuckerman said. “We’re paying for recurring expenses with recurring revenues.”
Discon also credited the administration for reaching that benchmark.
“This year, yes, you created a balanced budget,” Discon said. “Bravo. I’m proud of you for doing that.”
2.8% COLA would consume operating cushion without cuts
The council’s favorable assessment of the operating budget came immediately after a nearly hourlong joint proceeding with Mandeville’s Civil Service Board over employee compensation.
The Civil Service Board unanimously recommended a 2.8% cost-of-living adjustment for police and non-police employees, compared with the 1% COLA already included in Madden’s proposed budget.
The 2.8% recommendation matches the Social Security Administration’s 2026 cost-of-living adjustment.
Upon taking office in 2020, Madden set out to address what he described as a pay and morale disparity between Mandeville and neighboring municipalities.
In February 2022, the council approved Madden’s sweeping pay-scale overhaul, bringing city employee salaries in line with or above those of comparable municipalities in the region. Since then, the council has granted the Civil Service Board’s requested COLA each year.
Finance Director Jessica Farno said each additional half percentage point costs the General Fund approximately $60,000, including associated personnel costs. Increasing the COLA from 1% to 2.8% would therefore add approximately $216,000 in recurring expenses.
That figure is significant because the proposed General Fund currently contains roughly $200,000 more in recurring revenues than recurring expenses. A 2.8% COLA would likely push the budget as proposed — without any cuts — just beyond the “structurally balanced” mark.
Vogeltanz framed the decision plainly.
“We found a way to save $200,000,” Vogeltanz said. “We’re gonna spend it immediately.”
He emphasized that the council could choose to do so, but said it should recognize the long-term implications of adding recurring personnel expenses.
Zuckerman said during the Civil Service discussion that he could support the 2.8% COLA if the council identified recurring savings elsewhere in the budget to fund the additional expense.
Strong-Thompson appeared more comfortable using the existing operating cushion, noting that recurring revenues would still cover recurring expenses at approximately the amount proposed.
The council did not decide the COLA Wednesday.
Near the end of the budget hearing, Strong-Thompson asked whether the council would settle on the Civil Service Board’s 2.8% recommendation or remain with Madden’s proposed 1%.
Discon deferred the decision.
“We can conclude the meeting and everybody can think about it,” he said.
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Discon raises FEMA, sales-tax concerns already addressed in emails
Discon raised two remaining concerns with the operating budget: nearly $2 million in disputed FEMA reimbursement revenue and a projected increase in the amount transferred from a dedicated Special Sales Tax Fund to reimburse the General Fund for eligible Public Works expenses.
The questions were not new. An email exchange between Discon and Finance Director Jessica Farno obtained by Mandeville Daily shows the two had discussed both issues repeatedly before Wednesday’s hearing, with Farno providing detailed written explanations and Discon indicating a week earlier that he understood them.
The exchange was extensive. Between July 22 and the afternoon of Wednesday’s hearing, Discon and Farno exchanged at least nine substantive emails concerning the budget questions, including four written responses from Farno explaining the accounting and reimbursement issues in detail. Her final response Wednesday afternoon alone ran roughly 800 words and included supporting documentation.
On Aug. 12, Farno explained that the city was awaiting a decision on its appeal involving $1.998 million in disputed Hurricane Ida reimbursement revenue. She said the money had already been anticipated in FY2026 and, if a decision was not received before the fiscal year ended Aug. 31, the anticipated revenue would move into FY2027.
Discon responded: “And I understand the FEMA reimbursement.”
Six days later, however, Discon raised the issue again in an Aug. 18 email, this time questioning whether the city should anticipate receiving the money at all. Because FEMA had previously denied the amount and the matter was in arbitration, Discon wrote, “there is a high probability that we will not ever get this amount. Why count it if you don’t have it?”
Farno responded at 2:59 p.m. Wednesday, hours before the budget hearing, copying Madden and the remainder of the council. She disputed Discon’s assessment, saying she was unaware of any information about the city’s pending appeal supporting the conclusion that there was a high probability it would receive nothing.
“I do not believe it would be appropriate to remove the anticipated reimbursement from the forecast solely by assuming an unfavorable outcome before the appeal/arbitration process has been completed,” Farno wrote.
Discon nevertheless raised the concern again during Wednesday night’s hearing.
“If you don’t have it, don’t count it,” Discon said, warning that the city could find itself “$2 million in the hole” if the reimbursement never materializes.
The email exchange shows a similar back-and-forth over Discon’s second concern, involving a projected increase in the transfer from the Special Sales Tax Fund to the General Fund for eligible Public Works expenses.
Discon had questioned the roughly 90% estimate as early as July 22. Farno explained Aug. 10 that the percentage was a budgetary estimate of eligible expenses, not a predetermined reimbursement rate. At year-end, she said, Finance reviews actual expenditures and transfers only those costs that qualify under the sales tax dedication.
Discon sought additional information Aug. 11, and Farno provided another detailed explanation the following day. Discon then summarized his understanding that the budget contained an estimate and that the transfer would ultimately be adjusted to actual eligible expenditures at the end of the fiscal year.
“That’s the gist of it!” Farno replied.
Discon returned to the issue Aug. 18, asking for the actual FY2025 expenditures and questioning whether the FY2027 estimate was too high because of its substantial increase over previous years.
Farno’s Wednesday afternoon response included a retrospective analysis of FY2025. Although the city transferred about $2.26 million that year — approximately 66.2% of total General Fund Public Works expenditures — Finance subsequently identified approximately $2.34 million in eligible expenses using what Farno described as a deliberately conservative review. The analysis did not examine every potentially eligible account because Finance had already identified more eligible expenses than the city actually transferred.
Farno said Finance has since refined its process to more completely identify expenses legally eligible for payment from dedicated funds. She said the higher FY2027 estimate partly reflects repeated council requests that the city make fuller use of restricted revenues for legally eligible expenses rather than unnecessarily relying on the General Fund.
“This change was not made in a vacuum,” Farno wrote to Discon. “You have raised that concern yourself on multiple occasions.”
When Discon raised both matters again during Wednesday night’s hearing, Farno made a point of putting their previous exchanges on the public record.
“Both of those items have been looked at and were explained in extensive detail in my email response to you, as well as in previous meetings with the council,” Farno said. She offered to read the email aloud if Discon still needed an explanation.
Discon asked her instead to paraphrase it.
Council considers additions instead
The few concrete changes discussed during the operating review were additions or reallocations rather than cuts.
Strong-Thompson proposed providing $10,000 each to the Children’s Advocacy Center/Hope House and Youth Service Bureau.
Planning Director Cara Bartholomew subsequently identified approximately $43,000 remaining in the Comprehensive Plan budget that she said was no longer needed because the work had been completed, potentially providing a source for the proposed $20,000 without increasing overall operating expenditures.
Madden also suggested considering $5,000 for the organization responsible for the city’s Veterans Day activities.
The council has not yet adopted the FY2027 budget.
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