Five years ago, as many as three police cars could’ve been eligible for antique license plates due to their age.
“They were over 25 years old,” Executive Director of Finance and Acting Chief of Staff Paul Wesch said. “We were in a crisis mode of replacing engines when they gave up, as opposed to replacing cars at the end of their useful lives.”
The solution to that problem represents one of the biggest year-to-year changes in the proposed 2020 fiscal year budget, Wesch said. The $5.5 million increase in so-called vehicle lease rates will be the culmination of what Wesch described as a multi-year process of rebuilding the city’s motor pool.
“The motor pool is a poor term, but it’s the only one we have for a system where each of the departments that have vehicles pays from the general fund into an account that is established for the purpose of replacement and repair of those vehicles,” he said. “The idea being that those lease rates are sufficient so that when a vehicle is at the end of its useful life, it can be replaced without having to scatter around and find capital dollars.”
The additional funding means the motor pool will be self-sufficient going forward, Wesch said.
Another increase in the $260 million general fund budget comes from a 2.5 percent across-the-board, cost-of-living adjustment for all city employees, which will cost the city an additional $4.5 million to $5 million, Wesch said.
The raises could be controversial, considering Wesch confirmed the adjustment would also go to mayoral appointees hired outside of the merit system. The move apparently ignores an amendment passed by the Mobile City Council in May that set about to strip the raises from non-merit employees due to lingering legal issues between councilors and Mayor Sandy Stimpson.
“That’s been the case for each of the cost-of-living adjustments the mayor has made,” Wesch said of giving raises to both merit and non-merit employees. “It’s been across the board.”
The city is projected to lose another $1.2 million from the Civic Center this year, Wesch said.
One of many small increases is to the city’s funding of Mobile Metro Jail, Wesch said. By contract, the city provides 35 percent of the jail’s funding. While the percentage is expected to stay the same, the projections are for the costs to rise by $800,000.
Another small increase will come from a $500,000 payment to help fund operations at Mobile County Circuit Court. That expenditure matches the funds the county has committed as part of a three-year plan, Wesch said.
All performance contracts in the proposed budget will remain the same as last year, Wesch said. One issue with this involves the board for Ladd-Peebles Stadium. The board was set to receive a $750,000 increase from the city in the form of a council-approved performance contract. The mayor’s office to this point has only honored the standard $200,000 performance contract for the stadium. The issue is the subject of a council counterclaim being made in an ongoing lawsuit between the two sides.
On the income side of the ledger, Wesch said the biggest funding increase in the general fund comes in the form of an estimated $4.7 million increase in sales taxes, compared to last year.
“We look at historical actuals and attempt to project,” Wesch said about estimated revenue totals. “That is a very difficult thing to do because you can’t actually project downturns that easily. You have to look for clues in the economy.”
The city is looking at a $1.3 million increase in expenses in the two capital budgets totaling $64 million, Wesch said. These budgets include one of the more talked about issues: the $2 million bailout of GulfQuest National Maritime Museum of the Gulf of Mexico and the Civic Center.
The city will begin paying off the museum’s debt with the first of five $400,000 payments out of the capital budget’s economic development fund.
“Now, we’re viewing the city’s investment in GulfQuest as a big-picture initiative to bring life to our waterfront,” Wesch said. “That’s going to be good for our citizens, but we also think it’ll be good for the economy in terms of creating tourist traffic in our waterfront area. We thought that was the appropriate place to go for that allocation.”
The capital budget includes the typical $21 million per year for allocation as part of the capital improvement program, or CIP, Wesch said. The CIP is funded by a sales tax increase extended by the council over Stimpson’s initial objections. In addition the city will be executing another $39 million in grant initiatives, he said.
“Prior to 2016, we were spending about $5 million per year on infrastructure capital projects,” Wesch said. “This was before the CIP, but those types of projects — you know, roads, sidewalks, drainage improvements, street lights, those types of things. We are now looking at $60 million per year.”
The city is continuing to pay down long-term debt, Wesch said. When the Stimpson administration took over operations of the city, Mobile was facing more than $300 million in long-term debt. Since that time, Wesch said the city has reduced that debt by almost $100 million and has not added to it.
“While we have been increasing our capital toward infrastructure and vehicles, we’ve also not been borrowing any money and paying down our debt,” he said. “Five years ago, we were deemed to have a higher-than-average debt load and now it looks much more favorable.”
Current projections have the entirety of the debt being erased by 2030, Wesch said.
“That debt service, by the way, is $21.5 million per year,” he said. “Imagine if we had that on top of the $21 million we already have for just the CIP. Imagine the improvements that we could make.”
Stimpson’s administration is also continuing to increase the city’s reserves, Wesch said. Currently the city has more than a month’s worth of funds, or $20 million in reserve, but the goal is more.
“A one-month reserve is below average, so we have a goal to get to what is at least average, which is a two-month reserve,” Wesch said. “We’re not there yet, but that is the goal.”
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