What’s been gained, could be lost

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Phenix City’s City manager, assistant discuss the highlights

By Blenda Copeland

At City Manager Wallace Hunter’s request, he and Assistant City Manager Steve Smith sat down for a joint interview July 23 to discuss Phenix City’s momentum the past 10 years. They also discussed what’s at stake if the city loses a current county-city lawsuit about annexations and their associated police jurisdictions in the Ladonia and Ft. Mitchell communities of Russell County.



Annexation

Regarding the annexation issues, in short, Smith explained the county is essentially arguing the city didn’t properly execute certain annexations, therefore, others since then are also illegal. Countering that idea, Smith cited a state law he believes rectified the situation by stating that even if previous annexations were done with irregularities, they are now deemed legal and official, and the matter can’t be challenged again.

Hunter said the city has already overcome a similar lawsuit, referencing a 2007 case in which a statute of limitations is said to have been involved.

Further, Smith said if the city were to lose the current lawsuit, much is at stake: including, but not limited to, the potential for the city and the city school system to have to lay off employees, insurance rates being affected (homeowners’ insurance rates would go up) – and, the city would lose “a significant” revenue source.

Along with that, to make up the lack caused by fewer “wholesale” water/sewer customers, the city would have to charge its remaining utility customers more money, he said. Smith pegged the impact of lost customers (i.e., homes) from the police jurisdiction area to be around 2,600 – “almost a quarter” of the city’s utility system – if the city were to lose the current lawsuit. The punch would mean a rise in utility rates and a cut in services, he said. Meanwhile, the city’s long-term debt still exists, regardless of the lawsuit’s outcome, he said.

Smith continued, saying losing the lawsuit would also impact whether certain Students in the affected areas could attend Phenix City schools.

Phenix City Schools Superintendent Randy Wilkes confirmed to The Citizen last week if the city loses the lawsuit, resulting in a shrunken city tax base, it would impact the city school district. If businesses are lost from the city’s tax base, “We (the city school district) would lose those tax dollars,” Wilkes said.

Regarding the city and the city school system, he said: “We would hate to lose any of our revenue base.” Wilkes confirmed if city revenues are lost, it could plausibly cause the city school district to tighten some of its decision-making.

Currently, regarding enrollment, Wilkes said, “There is some allowance,” however, out-of-district students must show a true hardship in requesting enrollment into city schools. It can’t be just because an out-of-district family wants its children to attend a city school; there must be a good, substantial reason for the request.



Wilkes also confirmed the city school board did in recent years write into its policy a measure allowing the district to charge tuition for out-of-district students it chooses to accept for enrollment. However, the city district is not currently charging tuition in such cases, he said.

Going further, hypothetically, Wilkes confirmed: if a Ladonia-area family’s home is currently annexed into Phenix City — and the city loses the lawsuit and the annexation is ruled invalid — it’s likely the family’s children would then be cast out-of-district — and could no longer attend Phenix City schools. The “de-annexation” would revert the children back to county school district status because there’s no “grandfathering in” protection.

Continuing about potential impacts, the assistant city manager also said customers affected by the lawsuit would lose their city garbage service if the city loses the lawsuit. He also compared fire ratings, saying the city’s rating is a 2 — better than the county’s rating.

“We’d quit maintaining their streets,” Smith continued of those who would be impacted. “You’d lose about 13-and-a-half percent of your police force.” Smith clarified Aug. 1 that figure equates to about one-fifth the current city police force, based off police jurisdiction data numbers.

There’d be fewer residents paying for city Parks and Recreation services, so the remainder of citizens would pay more, he continued. There also was a comment pointing out that four of Russell County’s commissioners’ districts overlap parts of Phenix City: Commissioners Peggy Martin, Ronnie Reed, Cattie Epps and Gentry Lee.



The city’s growth and budget the past 10 years

As for the city’s budget and how far it’s come over the past 10 years, Hunter compared numbers. He referenced a comment that, “People say the city’s not moving…” With regard to that, he said the city has grown by about 5,000 people since the 2010 U.S. Census.

He cited what amounts to around close to $11 million in growth – from about $27.7 million in Fiscal Year 2007-’08 to about $38.4 million in FY 2018-’19, as shown by city documents.

FY 2018-’19’s projected reserve balance for the General Fund is about $1.07 million — it’s grown by about $20,000 since ’07-’08, he noted.

Regarding the utility budget, in 10 years, the city’s utility budget has grown by about $2 million – from around $10 million in ’07-’08 to about $12 million for FY ’18-’19.

On Aug. 1, Smith added that, combined, the General Fund and Public Building Authority have together covered about $49.1 million in infrastructure improvements over the past decade.

On Aug. 1, Smith also updated figures on the value of all taxable property in the city, saying it has grown from around $204 million in FY ‘08-‘09 to around $324 million in FY ’18-’19.

Further, Hunter said the city has received around $33 million in grants and other funding over the 10-year period, as shown by city documents.

Employee wages, he said, based off the city’s lowest paid employee’s wages, have increased from about 16 to 33 percent over the past decade.



Gas Taxes

Hunter also addressed another ongoing issue. He said since May of 2017, Russell County hasn’t given the city the 10 percent share of gasoline taxes it’s due per the law.

“We’ve been asking for it,” Hunter said. He noted the city was close to potentially filing a lawsuit against the county to try to regain the lost money.

He referenced state and local laws that he believes support the city’s stance.

Via email July 23, Smith also spoke about the gas tax issue.

“Act Number 859 approved September 12, 1969 by the State Legislature required Russell County to pay to the City 10% of the State Funds the County received in gas tax revenue,” the email stated. “This Act has never been repealed. The State later made this state wide and required all counties in Alabama to pay the Cities this 10%. In 2011 the State repealed and replaced this law (Legislative Act 2011-565). The replacement retained the requirement to pay the cities 10% of the state funds each county receives in gas taxes to the cities in the counties. In 2015 the State amended the law (Legislative Act 2015-54) to consolidate the $.03, the $.04 and the $.07 gas taxes into a $.16 gas tax.  This legislation RETAINED the provision that the counties pass (through) to the cities 10% of the state taxes they received. In May (of) 2017 Russell County began refusing to pay the City of Phenix City (the) required payments even though the state law clearly says they “shall” make these payments.  The county currently owes the City more than $245,000. The City has been trying for some time to get the County to obey the state law without result. We do not want to resort to legal action to force the county to obey the law(,) but have no choice. This is a gross waste of City and County tax dollars for the City to have to pay attorneys to file legal action to get the County to obey the law.”



County Attorney Kenneth Funderburk didn’t wish to speak on record the week of July 23 about the city’s gas tax claim, but said the courts will decide the annexation issue.

The Citizen also spoke with State Rep. Chris Blackshear Aug. 6 about an attempt to change gas taxes legislation since he was elected to state office. “We never passed the gas tax,” Blackshear said of the attempted change. He said there was an attempt to change legislation to revert control of the (10 percent) gas tax back to the county’s hands: “Which didn’t happen,” he said.

As of Monday, Attorney Jim McKoon, who’s representing the city, said a claim was filed July 5, but not an actual lawsuit, on the gas taxes matter. He said the county has until Oct. 5 to answer.