If you were to ask Councilman Joel Daves and Councilman Fred Richardson who or what deserves the most credit for helping to turn the city’s financial situation around over the last few years, you’d get two almost completely different answers.
During the Mobile City Council meeting on Tuesday, April 16, Daves commended Mayor Sandy Stimpson and councilors for work done to help turn the city’s financial situation around over the last five years.
After reviewing the most recent financial documents, Daves said the city looks a lot different than it did in 2013, when Stimpson and current councilors were elected. For instance, Daves said the city’s long-term debt has been reduced from $297 million to $205 million over that time, which means almost “a third of the debt has been liquidated.”
The debt wasn’t the only thing reduced in the last five years, Daves said. Operating expenses in the general fund budget have also declined from $43 million to $34 million in that time.
“That’s because there are 300 fewer employees working now than there were five years ago and all of that is through attrition,” Daves said.
The increases in spending have come in departments like Build Mobile and public safety, which saw bumps of $2.2 million and $10 million respectively.
While both debt and expenses have declined, Daves said, revenues have increased from $304 million to $351 million. In addition the unassigned, or reserve fund balance has increased from negative $4 million to a $38 million surplus, which is on par with what financial institutions like to see for municipalities of Mobile’s size, Daves said.
“It’s very impressive and I wanted to share it with my colleagues and the general public,” he said.
Richardson, who has been on the council since 1997, corrected Daves about the city’s finances prior to Stimpson’s arrival as mayor. Richardson said there was no deficit when former Mayor Sam Jones left office because that would be “illegal.” Instead he said the city had a $3 million surplus.
Daves shot back that he was referring to the unassigned fund balance within the general fund and not the budget at large.
Instead of applauding financial stewardship, Richardson credited the council’s move to extend a sales tax increase over Stimpson’s veto for the bulk of the success.
“The penny generates $32 million per year, which is $160 million over five years,” Richardson argued. “Without the penny, this city would be broke.”
While Richardson is correct that the council voted for the sales tax increase over Stimpson’s objections, the money from the increase is spent almost exclusively on capital projects, like the district-by-district capital improvement program, or CIP, and would have less of an impact on other areas of the budget.
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