Proposed Tuscaloosa budget for fiscal 2022 shows slow emergence from COVID-19
For fiscal 2022, a proposed $229.31 million combined operating budget includes raises for Tuscaloosa employees and rate hikes for city water and sewer customers.
But Tuscaloosa Mayor Walt Maddox, for the first time since at least the 1980s, put forth an ambitiously large, far-reaching budget proposal that includes millions in capital investment spending plans – some stretching out at least 10 years – in this year’s annual presentation to the City Council.
“The budget that I am presenting to you, I can say – without a doubt, during my tenure with this great, great city – has the best of analysis and depth of thought and forecasting that I have seen in my career,” Maddox said.
In what served as a daylong, city budgeting 101 for the freshman council members, as well as District 4 Councilman Lee Busby, the new chair of the council’s finance committee, Maddox unfurled a sweeping plan for municipal spending that, for some, might take longer than a month to digest.
But that’s OK. The council is only legally required to adopt balanced operating budgets for the proposed $174.73 million General Fund and $54.58 million the Water and Sewer Fund.
The fiscal 2022 General Fund revenues are being set equal to what is expected to be collected by the Sept. 30 end of fiscal 2021.
COVID's dark cloud
Last year, with the dark cloud of COVID-19 threatening doom on the city’s finances, Maddox proposed what he described as a “conservative” budget of about $10 million less than the fiscal 2019 spending plan.
But revenues fared better than expected – almost 11% better, according to City Hall data – but the mayor isn’t expecting a repeat of that level of growth for fiscal 2022, the financial future of which remains uncertain as hospitals continue to fill amid the spread of the COVID-19 delta variant.
“We’re not projecting any significant growth in our General Fund revenue budget,” Maddox said.
On the Water and Sewer Fund side, revenues are expected to be bolstered by an 8% increase in water and sewer rates for all customers.
This comes from a 2% planned annual increase adopted by the City Council in fiscal 2019 as well as another 6% hike that Maddox and city staff are proposing to begin bolstering Water and Sewer operational funds to improve the system’s infrastructure and processing facilities over the next decade.
The mayor showed data indicating that the city’s water and sewer rate growth had diverged from the national consumer price index at the beginning of the 2010s, as Tuscaloosa residents were coping with the effects of the 2008 economic downturn and, three years later, the devastating effects of the April 27, 2011, tornado.
City leaders, at the time, chose to reduce expenses on their constituents where they could, but this well-intentioned approach has led to a shortfall of revenues needed to support the water and sewer operations, Maddox said.
“During these intervening years, we have gotten behind,” Maddox said. “So, you can see for us, it’s important for us to catch up.”
The mayor noted that this year’s operating budgets contain about $748,307 in reductions to personnel costs over the prior year through the elimination or reclassification of seven municipal jobs, but also includes a 2.5% cost-of-living-adjustment for the city’s remaining employees that amounts to a financial commitment of more than $2.2 million.
However, the proposed budget contains no proposed step raises for city workers, boosts that have been given nine times since 2006.
Raises may be coming for public safety workers, though, through a proposed realignment the city’s police officer and firefighter pay and pension plan.
The detailed proposal still must be approved by the City Council, but if approved would boost public safety pay based on a police officer or firefighter’s years of service and not rank.
This was of particular concern to first-term Councilman John Faile, a retired Tuscaloosa police officer who told of getting a promotion under a prior public safety pay plan and losing a nickel off his hourly wage.
“Right now, we have people who don’t want a promotion because they’re not getting any extra money out of it,” Faile said.
Doing so could mean more than $2.4 million in its first year, if implemented on April 1 as the mayor proposes, and another $3.75 million between fiscal years 2023-2025.
The mayor pitched a way to pay for these costs, using a combination of Elevate Tuscaloosa funds – which is expected to generate $26.66 million in sales tax revenue in fiscal 2022 – along with revenues from the city’s traffic light camera network and the proceeds from two new revenue sources.
These proposed new income streams include a $1-per-ticket fee on ticketed events of more than 1,000 people where alcohol is sold, such as a concert at the Tuscaloosa Amphitheater, and a 3% fee on student-oriented housing developments of more than 200 beds.
About 20 of these complexes already pay the 1% rental fee on proceeds generated by any rental property within Tuscaloosa, but this additional 2% fee on these properties alone could mean more than $6.8 million over the next four fiscal years, if adopted.
“We want the most well-trained and most disciplined police officer and firefighter protecting our community,” Maddox said. “You can look across the nation and see where communities have suffered from not having a well-trained, well-experienced police force.”
This, along with many other aspects of the mayor’s spending proposal, are set to be debated, discussed and likely amended over the next three weeks by the council.
Hours of budget hearings are scheduled for the next three Tuesdays – Aug. 31, Sept. 7 and Sept. 14 – before the council is set to vote on adopting the fiscal 2022 operating budgets on Sept. 21.
And Busby, a retired Marine colonel who will be overseeing the City Council’s review of the proposed municipal budget for the first time, offered a reminder to the first-term and experienced councilors alike that their decisions now will have lasting effects in the future.
“Be aware, when we make financial decisions, we are – in a way – laying groundwork for something to happen. … Just be conscious of that,” Busby said. “With each step that we do or do not do, we are laying groundwork for the next three, four or five years.
“Those are the trade-offs.”
Reach Jason Morton at firstname.lastname@example.org.