Mobile County Commissioners said they were “encouraged” by an end of year financial report showing the county, for the most part, stayed under budget in 2014 and revenues continued their gradual upward trend.
Finance Director Michelle Herman briefed commissioners during their conference meeting Feb. 5, where she highlighted, amongst other positives, leftover “undesignated funds” from last year that put the county $7.6 million in the black.
“An uptick in sales taxes is one of the major reasons that we actually finished the year on a positive note,” Herman said. “We’re still seeing large variances with monthly collections, which gives us a little trouble accurately figuring out which direction sales taxes are going in, but over all, for the two years we have seen total increases of around 3 to 4 percent in sales tax collection.”
The year-end report shows the county took in more than $54 million in sales taxes last year — a 4 percent increase from 2013’s collections. That number was about $4 million higher that what the county has expected and included in its FY 2014 budget.
“We really can’t accurately say why the fluctuation is happening. We don’t have the raw data,” Herman said. “There are some changes we expect, for instance, when Mardi Gras hits — we expect a fluctuation. As for changes throughout the year, it’s just collections, and we don’t have the data to analyze it.”
One such “unexplained” fluctuation was in Sept. of 2014, when the county saw a staggering 13.8 percent increase from figures at the same time period in 2013.
Herman also said property taxes, the county’s major source of revenue, have remained level over the past few years. According to the report, Mobile County saw a slight increase in revenue from property taxes on motor vehicles, but a near 30 percent in revenue from taxes on real property.Though collections were a factor in the $7 million surplus, Herman said at least 46 percent of that figure came from a one-time sale of fixed assets, most of which were county-owned properties. Those one-time revenues totaled about $3.7 million, which included a more than $1 million in transfers from the Treasury Department that have been accumulating for the last decade.
The other key factor behind the good fiscal year was the county succeeding in an effort not to exceed its budgeted expenditures, which only came out to $123 million last year, as opposed to the more than $130 million that was originally budgeted.
According to the report, the county’s expenditures for personnel, operational, utilities, debt service and appropriations were less than originally expected. Personnel costs came in at around $1.4 million under budget, which Herman said was mostly due to the county’s change in insurance policies in April of 2014.
“We didn’t have to spend nearly as much on our payouts to the old insurance program as we expected, because we received some significant credits,” Herman said. “But, the departments, overall, stayed well within their budgets. We had hardly anybody go over budget, and of those who did, most went over by very small amounts.”
Interestingly, the county’s planned expenditures for appropriations were only $47 under budget, which in government finance, is about as close as it gets.
Even though a majority of surplus was due to one-time revenues, Herman said it’s beneficial to see that type of a carryover into the next year. Another portion of the report said the county didn’t have to use its transfer from the county’s tobacco tax in its general fund expenditures, which mean that money can be used for things economic development moving forward.
These numbers are very good to see, and should could continue as long as sales taxes can hold out,” Herman said. “At some point, we certainly expect property taxes to start moving up again, but we don’t have a way of knowing when that’ll be. I hope its not in the too-distant future.”
Commission President Connie Hudson said the numbers were some of the best financial news the county has received since she became a member of the commission in 2010.
“I’m encouraged, and I think everyone else should be as well,” Hudson said. “It’s too soon to get really excited about it, but this shows a trend moving up toward increased sales tax revenue, and I hope it continues to climb.”
Hudson and District 1 Commissioner Merceria Ludgood praised the county’s departments for staying under budget, and said the advanced raises and “salary adjustments” employees will receive this month wouldn’t have been possible without those efforts.
However, Ludgood also offered a word of cautious optimism — reminding the commissioners and staff the county was still “digging itself out of a hole” from 2008’s Great Recession.
“I too thank those departments that worked so hard with us to keep spending down. I know that couldn’t have been easy when you’re already feeling like you’re operating with less than you need,” Ludgood said. “We’re seeing a great trend, but I think we need to remember that we still aren’t back to our 2008 levels.”
A full copy of 2014 report is available below.
2014 Year End Report