By Blenda Copeland
Next fiscal year, watchful waiting is the answer to Phenix City’s General Fund budget.
Whether the city will have to keep its fists closed tightly around its funds as it currently intends – or whether it can relax its hands and spend a little more on needed projects depends on multiple factors.
Three major expenses force cuts
In a day-long session Monday, Phenix City’s Assistant City Manager Steve Smith, who also is still overseeing the city’s finances and utilities, reviewed highlights of next year’s proposed budget.
In an opening overview, City Manager Wallace Hunter said the city faces three super costly expenses. These expenditures’ total costs are unknown at this time. They could require thousands of dollars.
The first involves fixing infrastructure damaged in the past three years by unexpected collapses. “It’s going to take a lot of revenue,” Hunter said, referencing as an example a potential sinkhole in the St. Andrews subdivision that the city is currently monitoring.
“We also have litigation that’s hanging over our head,” he said of the second major expense. He was referring to Russell County’s current lawsuit against the city regarding Ladonia and Ft. Mitchell’s police jurisdictions/annexed areas. If the city loses the lawsuit, it has been projected that it could cost the city “multi millions,” if not a hit to the city’s attempt at growth and expanding its tax base. The case could have a statewide impact.
Third, there’s also an audit. Hunter said already, there have been people coming and going reviewing documents related to the city’s finances.
“We’re rolling in two directions,” Hunter said of the city’s financial shape: it’s moving forward, and yet needs to make costly repairs.
There are citizens asking the city to fix their roads. Gas tax funds will have to cover that. Then there are deteriorating corrugated metal pipes in older subdivisions that are contributing to impending sink-hole conditions.
As an example, the issue in the St. Andrews subdivision could cost around $30,000 to fix – then there’s an additional $10,000 or so cost to add the needed rock. That’s just for one repair.
And keep in mind that when it actually comes time to fix the problem, the costs could be even higher, as costs change based on current prices.
There are other problems needing fixes: like flooding on the land of a house the city just agreed to buy in the Saddlebrook subdivision related to a past lawsuit over flooding issues. Also, there’s an emergency repair on Brickyard Road and a major sewer line in danger of washing out in the Lakewood Drive area.
Meanwhile, the U.S. appears to be progressing in economic recovery; associated with that, all costs are going up, impacted by an interest rate hike recently approved by the Fed.
Smith supported Hunter’s views. “(There’s) a lot of uncertainty out there,” Smith said, which has forced the city to “really cut projected expenditures.”
All capital expenditures in various departments (i.e. departmental vehicles, etc.) have been slashed, except for what’s absolutely necessary.
“We feel like we need to prepare,” Smith said of the uncertainty of how much money the city may have to spend on the aforementioned three major expenses.
The proposed figures and cuts’ impacts
As of Monday, Smith reported the proposal for the upcoming Fiscal Year General Fund’s operating budget is $38.6 million with proposed operating expenditures of around $37.2 million. Net total expenditures were pegged at around $999,063 after paying debt service.
In comparison, the current fiscal year’s final budget was set at about $37.3 million with operating expenditures of around $36.9 million; the net total expenditures were $381,992.
Ultimately, the key to whether the city can relax and spend money on other needed projects depends on what the city’s finances look like in February or March, Smith explained.
That’s when he hopes the county-city lawsuit will be resolved and some other issues will have cleared up.
A key highlight from Monday’s discussion was that there has been a “very significant reduction in operating capital,” according to Smith. He said typically, the city tries to budget around $1-$1.1 million for such costs, but this upcoming fiscal year, the proposal is to budget around $713,000.
Another highlight shows the proposed upcoming fiscal year’s capital projects budget is around $1.8 million; this current fiscal year’s was around $2.5 million.
Appropriations discussed today
The city continues its review of the proposed budget today, June 28, at 8 a.m. ET until it is finished (or 5 p.m. ET, whichever comes first). The work session is open to the public and will be held on the third floor of the Municipal Building at 601 12th St., Phenix City.
The council will discuss allocations to various nonprofits. Monday afternoon, Smith noted that the council will need to make cuts to the allocations it has become accustomed to making.
Smith noted that this year’s funding requests from various organizations hasn’t decreased. Area nonprofits have hopefully – and collectively – requested around $1.4 million in appropriations from the city council. Smith stressed that’s what the nonprofits have asked for – it’s not what they’re going to get, however. Council must make tough decisions over which groups get funded – and how much.