The fate of Mayor Sandy Stimpson’s proposed $227 million fiscal year 2015 budget rests in the hands of the seven members of the Mobile City Council. The major issues to consider include incremental employee raises, an increase in healthcare costs, the cutting of more than $2 million in performance contracts and an increase in council discretionary funds.
The $227 million in revenues includes a two-month extension of a 1-cent sales tax, which the council will have to consider. The “1 cent sales tax” increased the city’s take from four to five cents on the dollar, and took the total sales tax from 9 to 10 cents on the dollar. It was scheduled to sunset in July 2015. In addition, future budget projections included in the 2015 budget packet uses the 1-cent sales tax, Executive Director of Finance Paul Wesch said.
The 2016 forecast predicts $230 million in revenue, while 2017 projections predict $234 million.
Stimpson is already asking councilors to consider an amendment to the proposed budget as it relates to performance contracts. The proposed budget shaves $2.1 million from performance contracts and would’ve allowed for $1.2 million in funding to various benevolent organizations through the United Way and the Community Foundation for South Alabama.
The administration has since backtracked from that idea and instead, wants to use that $1.2 million to fund the various organizations directly.
“It was not my intent to have these fine organizations called out onto the carpet and have their integrity questioned,” Stimpson wrote about United Way and the Community Foundation to Council President Gina Gregory.
“The unfair barbs being thrown at both of these organizations and their leadership are ridiculous and unnecessary. We cannot afford to affect their business models, fundraising campaigns, or the incredible impact they have in our community.”
Either way, the reduced funding is intended to eventually wean the organizations off taxpayer money. In the letter, Stimpson encouraged more private funding for these groups.
Councilman Joel Daves said he supports the change, as it gives the council more of a role in making the funding determination.
“Some argued that it was contrary to the Zoghby Act to allow the United Way and Community Foundation to make the decision,” he said.
While he said he has great respect for both organizations, putting the funding determination in the hands of those groups “ended up carrying a lot more baggage.”
Members of the local arts community also criticized the original plan.
Mobile Opera asked for a total of $33,000 from the city, or about 4 percent of its budget, General Director Scott Wright said.
“That’s what we had last year and the year before,” he said. “Previously it had been more.”
Wright said the opera pays between $50,000 and $60,000 to the city and SMG for use of the Mobile Civic Center for productions and all concession sales go back to the city. The opera will receive $10,000 in the proposed 2015 budget.
“It’s not so much the amount of money because all of us in the arts understand that the focus has to shift depending upon what the city’s needs are,” Wright said. “The real issue is this new process is for one year.”
Wright said the translation is that the city won’t be funding these organizations in the future.
Funding for the Gulf Coast Exploreum was perhaps cut most drastically in the proposed budget. The science center had originally asked for about $600,000, or almost a quarter of its budget, but the proposed budget gives them just $150,000 next year.
Recently-appointed Executive Director Jan McKay said she is in the process of meeting with City Council members about the budget. As far as raising money for the center, McKay said she’s currently looking into the possibility of bringing the re-release of Forrest Gump to the center’s IMAX Theater, but she admitted she doesn’t know if it would be available in the correct format for a domed theater. She said using the theater for non-educational purposes would go against its mission.
“IMAX shows are really about engaging content, not a Hollywood experience,” McKay said. “They’re just as good, but just not Hollywood.”
In addition to city funding, the Exploreum has thousands of donors and sponsors, McKay said. The center is also planning its first-ever gala-type event, which was in the works before the proposed budget came out, McKay said.
The event, called “Mystere De Lore” will take place Oct. 30.
The proposed budget also gives the Mobile Arts Council $35,000, which is a little more than half of what it asked for, Executive Director Bob Burnett said.
In the proposed budget, funding for BayFest was moved to the convention center budget. The music festival will get $100,000 this year, according to Stimpson’s proposal. It requested $350,000.
BayFest President Bobby Bostwick said this year’s appropriation is roughly 1.5 percent of the revenue the event relies on.
“I’m not going to get upset about it,” Bostwick said. “It’s not the end of the world, but it does send a message to our partners. I’m glad to see they’re putting us in the budget.”
The $100,000 in funding is $143,000 less than the city gave last year.
The festival also netted $3.2 million from a lawsuit “a couple of years ago” with BP over the oil spill, Bostwick said. About $1 million of that settlement was used to makeup money lost to a tropical storm last year. The remaining money went into a reserve fund, which is used to secure acts for each year’s festival and other front-end costs, Bostwick said.
He said the board has no plans to move the festival out of Mobile in the future.
Pay raises, increased healthcare cost-share
Stimpson included two separate 2.5 percent pay raises for employees. One will be a cost of living adjustment and will take effect in October. The other is a merit raise and will take effect in April.
But the raises also correspond with an increase in the percentage city employees, both current and retired, will pay for health insurance. Stimpson said all current and retired employees would see their share increase from about 16 percent to 20 percent, as of January 2015. New employees will pay 40 percent of the healthcare costs.
Retirees like Wilma Spanyer question the fairness of the city cutting benefits for those on Medicare.
“We worked for it and now we’re not getting it,” Spanyer said Monday. “I would rather pay more than be kicked to the curb.”
The administration will pay retirees $175 a month for four years, so they can purchase a supplemental program, but Spanyer argues that the coverage still won’t be as good as Blue Cross Blue Shield.
“I think it’s wrong to promise somebody something their whole career and then take it away,” she said.
Councilman John Williams said he’s concerned with the increase in costs to retirees and said that while the raises were meant to attract workers to the city, the healthcare issue could be a deterrent.
“If someone has retired, they’ve worked their required time and were promised they would receive benefits then we can’t pull the rug out from under them,” Williams said.
City Council discretionary funds
The budget proposal includes an increase in the discretionary funds given to each councilor from $25,000 to $40,000.
The increase was requested after the price for postage was taken from the City Hall Overhead Fund and made the responsibility of individual councilors, said Councilman Levon Manzie. He said he sends out mailers to constituents.
“We have the ability to send out newsletters electronically, but many of our residents don’t have the ability to get emails,” he said. “That expense has been directed to discretionary funds.”
Manzie added that he would be in favor of councilors having even more discretionary funds, as long as their uses are “closely scrutinized” because that money has a “direct impact” on communities.
Williams said he wasn’t in favor of the increase and he never personally saw a request to increase it.
“I think it’s overkill, especially when you’re cutting everyone else,” he said.
Williams added that if the additional funds could only be used for capital expenditures he wouldn’t be against it, but he questioned how the funds were going to be used and by what process they would be approved.
A vote to approve the budget was held over Tuesday pending a public hearing at 5:30 p.m. Sept. 2.