The Mobile City Council’s Finance Committee agreed Friday to recommend the entire council pass an amendment to earmark some of revenue generated from an extended 20 percent “penny” sales tax equally among all seven districts for infrastructure improvements.
The plan, if approved by the entire council Tuesday, would take $21 million of a proposed $30 million in revenue from the sales tax increase and split it seven ways, giving $3 million to each council district. The rest of the tax revenue, roughly $9 million, would be used for citywide capital expenses and economic development.
The council has already approved extending the sales tax hike for three years, where Councilwoman Bess Rich was the lone dissenting vote. During budget negotiations, the council also had to override the veto of Mayor Sandy Stimpson to uphold it.
Today, committee members Rich and Fred Richardson voted in favor of making the recommendation, while Chairman Joel Daves voted against it.
Before debate on the recommendation began, Executive Director of Finance Paul Wesch said it was the administration’s goal to provide a 10-year plan for capital infrastructure improvements. He said the administration would work with councilors on the long range plan and meet individually with each to make sure needs are met in their districts.
Daves argued that splitting the money into separate “pots” for each district would prevent the city from working on big projects or in emergency situations.
Richardson referenced Stimpson’s veto of the three-year tax extension and defended his position that the council should earmark the money for capital improvements within their own districts.
“If the $21 million was a baby, you guys tried to abort the baby,” he said. “We refused to abort the baby and now you think you can take better care of the baby than us. We want the baby.”
Councilmen John Williams and Levon Manzie both said they supported the measure, which is sponsored by Richardson and Councilman C.J. Small. Manzie cited “desperate needs” within his district and added that the administration’s plan could still work within the confines of the proposed amendment.
Williams said the money should not be made discretionary and instead, the administration and council should work together within the framework of the ordinance to make the infrastructure improvements.
Rich said there are critical needs in her district that have been ignored for years.
“I wish the administration would get behind this,” she said.
Council President Gina Gregory said one question that needs to be asked with the amendment is that if a big project needs to be completed in a certain district, will councilors step forward and transfer money out of their districts to help?
In other business from the meeting, Wesch presented the year-end financial report to the committee. The city ended fiscal year 2014 with expenditures at $6.1 million below what was budgeted, Wesch said. That is a 2.7 percent improvement over the budget.
Wesch said the city sales tax were 3 percent ahead of budget projections and business license fees were up 3.5 percent over projections. Total revenues were $7.4 million, or 3 percent over budget, he said.
Combined revenues and expenditures put 2014 actuals at $13.5 million over budget projections, Wesch said.
The city has $15 million in reserve funds, about $10 million short of what the administration would like, Wesch said. He believes a $25 million reserve fund with would give the city an extra month of operating revenue and would also strengthen its credit rating.