While other municipalities are cutting employee overtime, non-essential services and delaying capital improvement projects until the financial fallout from the COVID-19 pandemic is more clear, Daphne Mayor Dane Haygood has announced an “economic stimulus” proposal that would temporarily decrease city revenue and increase expenses.
In what he’s calling an “effort to release the financial hardship and to stimulate the local economy” within the city, Haygood is asking the City Council approve a plan to waive the $15.40 per month fee for garbage collection for three months, while also awarding all sworn police and corrections officers and non-civilian fire department employees a one-time payment of $250, plus a $3 per hour pay supplement for four weeks.
In the plan, which was distributed to the Council and disclosed in a news release April 2, Haygood said he hopes households that are able will spend the total $46.20 in savings at local restaurants and retailers. The first responder supplements are necessary “to reflect the increased hazards during this pandemic” and to “attract and retain such highly skilled public safety professionals.”
The plan also mirrors what other municipalities are doing to defer small business tax remittances until the summer, but goes further to institute a flat fee of $50 on applications to the building department for residential remodeling activity. Currently the fee starts at $30 for the first $1,000 of the contract amount, plus $5 for every $1,000 thereafter.
Haygood is asking the City Council to discuss and approve the plan at the Monday, April 6 City Council meeting beginning at 5 p.m., without a traditional second reading.
A draft resolution claims the garbage fee waivers will cost the city $388,500, but using a 2.5 multiplier indicates it could generate a local economic impact of “up to $971,250,” potentially creating a “tremendous positive impact on our local economy and employment within our community.”
The multiplier, the resolution notes, “is based on basic economic impact principles that flows of spending within a local economy lead to subsequent stemming from wages and profits resulting in further spending known as indirect spending.”
Only 5 percent of the city’s revenues are generated from charges for services, according to its 2019 Comprehensive Annual Financial Report, but sales, use and luxury taxes account for 57 percent of the budget. The city solid waste fund collected $1.6 million in 2019, or roughly $134,000 per month.
The $250 supplement for first responders plus the temporary $3 per hour hazard pay will cost a total of $97,300, making the entire plan worth about $500,000.
In response to follow-up questions, Haygood said while there have been negative short-term impacts to revenues in light of the pandemic, “the city has a strong financial position” with a $8.3 million rainy day fund and an unencumbered general fund balance of $10.8 million above that reserve.
He said the city would be in a better position to forecast economic damage from the pandemic a month from now, after additional sales tax filings are submitted, but his office “continues to lead and take actions that are in the best interest of the city of Daphne.”
Haygood did not answer more specific questions about how the effective $46.20 in savings per household would prop-up local businesses at a time when many of them are shut down due to statewide health orders, and he also declined to elaborate on whether the proposal was requested or suggested by city staff or residents.
Daphne has the third highest median household income in Baldwin County at $69,086, which is slightly below that of the city of Fairhope but $12,240 less than the city of Orange Beach. The median household income countywide is $55,962 and statewide, it’s $48,446.
While political campaigning has also been delayed by the pandemic, it should be noted Haygood has two challengers in the mayoral election this year. Steve Carey, owner of CertaPro Painters of Mobile and Baldwin Counties, filed initial campaign paperwork Feb. 14 and Councilman Robin LeJeune did the same about a month later.
Haygood has yet to file any paperwork or given any indication otherwise that he is seeking reelection, but similar to other elected officials locally, statewide and nationally, he has taken a beating on social media over the past several weeks from residents criticizing his handling of the pandemic. And while few people may question the idea of hazard pay for first responders during a prolonged emergency, Haygood’s proposal to benefit both first responders and citizens at large was unveiled just after the Daphne Police Department took to Facebook to thank Carey for donating a lunch April 2.
Asked whether the stimulus proposal was politically motivated, he wrote “there are no other motives present and I cannot speak for the motives of others.”
LeJeune hasn’t been shy about his mayoral aspirations over the past year, but Carey and his campaign manager Scott Boone told Lagniappe in February they preferred to wait until after the midterm elections to go public. But as the pandemic intensified last month, Gov. Kay Ivey announced the primary runoff election would be postponed until July 14, and both Carey and LeJeune put campaigning on the backseat.
Still, both have continued to seek campaign donations or pledges, and Carey filed a campaign finance report April 1 showing a balance of $28,535. Among his first contributors were Nathan Cox of 68 Ventures, the largest home builder in Baldwin County, and Esfahani Real Estate Holdings, the parent company of Eastern Shore Toyota and Eastern Shore Hyundai, owned by Shawn Esfahani.
LeJeune’s largest contributor has been Piggly Wiggly owner Danny Manning, but he’s also lent himself $2,000 and secured a donation from retiring Councilman Pat Rudicell. His April finance report wasn’t on the Baldwin County Probate website today, but in March his campaign balance was $6,150.
Just today, Carey took to Facebook to acknowledge he had planned to officially launch his campaign this week, however, “given the current challenges that we are all facing,” it is “on hold for now,” he wrote.
“As a local small business owner, I understand the challenges and uncertainty that everyone is facing at this and I wanted you to know that I’m here to help in any way possible.” Carey also provided contact information for anyone seeking more information or assistance.
LeJeune is also a small business owner — the restauranteur behind Market by the Bay in both Daphne and Fairhope — and along with his council duties, has been busy adjusting to emergency health orders prohibiting dining-in statewide.
Reached by phone today, he said as the council was only provided Haygood’s stimulus plan Thursday, he hasn’t had the opportunity to speak with the mayor, department heads or other council members about particulars.
“I’m not sure about the timing of doing this now with everything that may be coming in the future, but I am interested to hear about it and I am open to what we can do to best help not only our citizens, but also all our employees,” LeJeune said, adding he wouldn’t question the motives behind it. “I just don’t have enough information right now.”
Further, LeJeune said under normal circumstances, such resolutions are subject to first- and second-reads by the council, taking at least three weeks to approve, but “if the council feels the need to move it forward more quickly, they can suspend the rules … I’m not going to say it’s not going to happen Monday, but there is a lot of information we need to get, there are other employees we need to consider, and there are other items on the agenda.”
COVID Press Release Stimulus Plan Apr22020 FINAL
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