Executive Director of Finance Paul Wesch warned Mobile City Councilors of “pressures” in the fiscal year 2016 general fund budget due to the earmarking of additional sales tax revenue for infrastructure improvements.
During a meeting of the Finance Committee yesterday, Wesch said the administration is supportive of the council’s mandate to reserve for capital improvements in all seven council districts $21 million in revenue from an extension of a 20 percent sales tax increase, but the city would have to find $18 million from other places in the budget to make that happen.
With the tax increase in place this year, the city was able to set aside a little more than $3 million dollars for capital infrastructure improvements, Wesch said. Some councilors suggested pulling money out of savings to make up the difference, but Wesch said the city is trying to operate with a one month’s operating revenue as surplus, which would equal $25 million.
He said the surplus could be used in times of deep recession, or more importantly for this area, natural or man-made disasters.
As for the monthly financial report, Wesch said property tax revenues in the city were up by about $1 million. That means the value of existing property has increased. Sales tax revenue was flat in February.
On the expenditures side, departments are nearly $2 million under budget, for the year, Wesch said. He added that this number was “somewhat misleading” because the city will experience increased expenditures later in the year.
One reason for the increased spending is the late start for the police and fire recruit classes, Wesch said. In addition, contracted grass cutting wasn’t budgeted for, but will need to come out of the current budget.
“We’re running less this year even with raises and additional expenses,” he said. “That’s nothing more than a product of department heads doing a good job.”