Hoover council passes slimmed-down $134 million 2021 budget

The Hoover City Council this week passed a $134 million budget for fiscal 2021 — a trimmed-down budget from the previous year due to the continued uncertainties associated with the COVID-19 pandemic.

The original budget approved for 2020 a year ago included $144 million in expected expenditures, including about $124 million from the general fund, about $7 million from the capital projects fund and about $13.8 million from special revenue funds.

However, after the COVID-19 pandemic struck, city officials tightened the city’s pocketbook and actually spent only about $114 million from the general fund in fiscal 2020, which ended Sept. 30, according to preliminary numbers.

General fund revenues for 2020 came in at about $130 million, according to preliminary numbers. That would be about $2.7 million less than original projections. However, general fund revenues were about $2 million more than actual revenues the previous two years, Chief Financial and Information Officer Tina Bolt said.

In an effort to be conservative, city officials are projecting $129 million in revenues for the general fund in 2021, plus $8 million in revenues from special revenue funds, for total revenues of $137 million.

That would put revenues at about $3.3 million over expenditures, but after accounting for $2.4 million in “special” expenditures, city officials expect to end fiscal 2021 with $915,000 more in revenues than expenditures.

Sales and use taxes — the city’s biggest source of revenue — came in at about $83.7 million for 2020, according to preliminary numbers. That’s about $2 million less than projections for 2020 and about $1 million less than actual revenues in 2019, records show.

Salary and benefit costs are expected to climb by $1.9 million to $78.4 million, including a $1 million increase in health insurance costs.

Mayor Frank Brocato originally had proposed to cut planned step raises for employees from 5% to 3% to save about $500,000 but backed off that proposal and recommended the 5% step raises. Brocato said he changed his recommendation after city officials learned the city could reimburse itself for some employee expenses with federal COVID relief money.

Hoover police Chief Nick Derzis had lobbied the council to move forward with the 5% step raises, as originally planned in the city’s revised compensation plan adopted in October 2018, saying department heads would rather make other cuts in their budgets than have employee step raises reduced.

The city also has eliminated three department head positions: city treasurer, finance director and revenue director by consolidating duties related to finances and upgrading a senior accountant to a finance division director. The budget for salaries and benefits for what had been the finance and revenue departments was reduced by about $700,000.

Meanwhile, the cost of salaries and benefits is increasing by about $785,000 for the Parks and Recreation Department and about $740,000 in the Police Department.

Overall, public safety spending accounts for 44% of the 2021 budget.

The list of capital projects for 2021 is much smaller than usual, with $3.5 million budgeted for capital projects, including $2.3 million for paving and striping streets and $300,000 for equipment and supplies for the new Fire Station No. 11, which is expected to open in Trace Crossings around May.

The capital projects budget also includes $255,000 for replacement equipment for the sewer system, $230,000 for drainage projects, $150,000 in additional money for a restroom/storm shelter facility by Field 1 of the baseball/softball fields at the Hoover Metropolitan Complex, and $100,000 for sidewalk maintenance.

In addition to the “government funds” — the general fund, capital projects fund and special revenue funds — the council also approved spending $20 million from proprietary funds, such as the sewer system fund, in 2021. That’s $3 million less than the budget for proprietary funds in 2020.