A Mobile City Council committee has suggested reforming the earmarks associated with roughly $30 million coming into city coffers from a 1-cent sales tax increase.
The council’s Capital Improvement Project (CIP) committee suggested changes that would simplify the city’s capital budget and also secure steady funding for its capital improvement plan, which splits $21 million of that tax money evenly among the seven council districts to be used for infrastructure projects.
The ordinance supporting the capital plan mandated the city split the remaining money from the tax increase — roughly $9 million — proportionally among public safety, economic development and other projects.
The suggestion by Councilman John Williams would consolidate line items for public safety vehicles and economic development into a single line item of up to $4 million to be used for municipal buildings, studies and other citywide capital expenses. The rewrite would also direct any money left over be put into the capital budget.
“I would like to see us make it simpler,” Williams said.
Councilors did request that Mayor Sandy Stimpson’s administration work with them to find possible alternative funding streams for other line items within the capital budget.
One area of concern was changing the $5 million line item for economic development. As Councilman Joel Daves pointed out, it would be tough to predict when and how much money would be needed for economic incentives.
“The problem is you don’t need it until you need it,” Daves said. “You also don’t always see it coming a year in advance.”
Dianne Irby, executive director of engineering and development, told councilors that in the past, the city has pulled hundreds of thousands of dollars from district spending for citywide projects and studies. For instance, Irby said, $387,000 of CIP money from each district went to buildings. Another $347,000 from each district went to study the greenway project.
Councilman Levon Manzie said the city could go “tighter” on economic development, as it doesn’t spend $5 million per year. That money could help reduce the burden on district spending, he said, adding that the goal of the CIP should be to get as much of the $3 million per year into tangible projects as possible.
“We’ve settled into study, study, study mode,” Manzie said. “Studies are going to kill us. We’ve got millions more in needs than we have resources.”
Councilwoman Bess Rich said she’d like to hear from Mayor Stimpson’s administration on how much of the economic development line item is used and about how close the city is to making its motor pool self-sustaining, so more capital money could go to district projects.
“No matter what, the $21 million, district-by-district, was to be for tangible projects,” she said.
Councilman C.J. Small reminded his colleagues that they wrote the ordinance and could change it if they wanted.
“We’re the ones who created this,” he said.
Councilman Fred Richardson complained about the disparity between the money spent on public safety vehicles and public works vehicles. He said the city spent only about $600,000 for public works and $21 million on public safety over the last three years. Daves reminded him of the city’s individual share of the BP oil spill settlement, which went to purchase new garbage trucks.
“Where do you think the new garbage trucks came from?” Daves asked. “Did they snap their fingers?”
“It wasn’t CIP,” Richardson said.
Relya Mallory, from the city’s finance department, told Richardson that while only $630,000 had been budgeted in capital for public works, much more had actually been spent.
“We’re buying a lot of public service equipment,” she said.
As for how much goes into economic development each year, Mallory said the city would “love” to have $5 million. Last year, $1.3 million was removed for raises.
What will make this more challenging, Mallory said, is the $18 million to $23 million in debt service the city can’t touch.
“We haven’t had $5 million in economic development in three or four years,” she said. “There’s only $30 million to work with after all the expenses and $21 million of that goes to CIP.”
As for the motor pool, Mallory said it’s not yet self-sustaining and a portion of that public safety line item would need to be used until it is.
“It’s going to take forever for it to get where it needs to be,” she said.
At times the discussion broke down into a debate over who was truly responsible for the city’s financial recovery and who was to blame for its initial fiscal failures.
Richardson said without the sales tax increase, which the council renewed despite Mayor Stimpson’s 2014 veto, the city would not be in good financial shape now.
Daves argued the previous administration under Sam Jones had the extra sales tax and still couldn’t make ends meet.
“In the first two years we reduced spending by $17 million,” Daves said. “The reason we have money today is reductions in the general fund and the renewal of the penny.”
Richardson countered by talking of the Great Recession and said Jones’ administration was hampered by the nationwide economic downturn. He credited a decrease in unemployment for the increased tax revenue.
“Unemployment went down and generated the money we have now,” Richardson said. “The economic posture changed. It wasn’t any genius who came in.”