City of Hoover expects to end fiscal 2020 at least $4 million in the black

The city of Hoover is on track to end fiscal 2020 in the black by at least $4 million, despite revenue cuts attributed to the COVID-19 outbreak, acting Chief Financial and Information Officer Tina Bolt told the Hoover City Council Tuesday night.

And the $4 million figure is “very, very conservative,” Bolt said.

City officials at one point expected the city’s general fund to take in $133 million in revenues this fiscal year, but once COVID-19 hit the economy hard, the city’s Revenue Department in April anticipated the city could see revenues fall anywhere from $8 million to $15 million from early projections for the year as a whole.

The City Council, mayor’s office and department heads began looking for ways to cut costs and indeed did so, but revenues have rebounded stronger than anticipated the last few months, Bolt said.

The city had at one point expected to receive about $115 million in revenues through the end of July. By July 31, actual revenues were indeed down but only about $3 million off the anticipated mark, records show.

The city more than made up for the shortfall by cutting expenses. The city had expected to spend $101.6 million by the end of July, but after significant cuts were made, actual expenditures turned out to be $93.7 million — a drop of about $8 million.

With another $1 million coming from “other sources,” the city was in the black by about $6 million at the end of July. Some of that cushion will be lost between now and the end of the year due to accounting accruals, but the end result should be at least $4 million in the black, Bolt said.

Through the 10-month period ending July 31, the city’s regular sales and use taxes were $1.9 million below where they were in 2019, but the sales tax money that Hoover gets from the state through online sales taxes was up by $1.37 million for 2020 because so many more people were forced to shop online when retail stores closed due to COVID-19.

Bolt said she expects online sales tax revenues to continue to be higher than in the past because so many people have become accustomed to shopping online.

Brocato praised the work the City Council and department heads did in finding ways to cut costs in a crisis situation. “We had a good plan,” he said.

This has been an opportunity for city officials to understand some of the things they can do without, he said. There are dozens of jobs that have gone unfilled once vacancies occurred, and some of those may never be filled, he said.

A lot of the savings came from having to cancel events such as the SEC Baseball Tournament, Regions Tradition golf tournament and Celebrate Hoover Day, Brocato said. The baseball and golf tournaments in particular require overtime pay for certain city employees.

City officials had prepared a list of potential capital projects that could be put on hold if necessary, but none of those ended up having to be cut, Bolt said. Nevertheless, city officials are not rushing to spend that money because COVID-19 is still here, Brocato said.

Council President Gene Smith said the council has been ready to cut the capital projects, but he hopes they won’t have to do so. A lot of people will be pleased to see projects get completed, such as improvements at Star Lake, he said.

Smith also praised city department heads for finding expenses to cut and sharing in the pain.

Brocato said he’s thankful the revenue decline was not as severe as anticipated. As you drive around town, you can see businesses are making it work, he said. Some of them, especially restaurants, may not be at the capacity level they would like, but he thinks most of them are pleased with the progress toward recovery, he said. The ability to reopen drive-thru service and provide curbside pickup during shutdown periods was helpful, he said.

Hoover also is fortunate to have a lot of retail outlets that were productive even during the partial retail shutdown, Brocato said, naming stores such as Home Depot, Costco, Sam’s and various grocery stores that were able to stay open due to being deemed “essential businesses.”

“Our citizens really came out and supported the businesses,” Brocato said. “That kept so many of them afloat. It says a lot for our community.”

Smith said he looks forward to seeing revenue projections for fiscal 2021. Brocato said he plans to have a budget ready for the new City Council shortly after it is sworn into office Nov. 2.