Hoover council votes 4-3 to pass $139 million budget for 2019
The Hoover City Council voted 4-3 tonight to pass a $139 million budget for fiscal 2019.
Three council members — John Greene, John Lyda and Mike Shaw — said they had concerns about the increase in spending in the budget, but other council members said they felt the spending was justified for a growing city with growing needs.
The $139 million budget includes a record $117 million being spent out of the general fund, compared to the $110 million in general fund expenditures originally budgeted for 2018.
The city also plans to spend $12.1 million out of a special revenue fund and $9.9 million out of its capital projects fund in 2019.
The increased spending from the general fund was made possible due to increases in sales and personal property taxes and a $2 nightly room fee for lodging facilities that were approved by the City Council in July.
Mayor Frank Brocato said that money helped prevent budget deficits and helped provide much-needed raises for city employees, improvements in public safety and quality-of-life enhancements.
New salary schedule
The City Council tonight unanimously passed a new salary schedule that Brocato said will help Hoover once again become the “employer of choice” among Birmingham area municipalities. It included salary increases for all city employees and increased the maximum pay that can be earned in the future as raises are given over time.
The new salary schedule cost about $1.3 million to implement, plus about $200,000 more in step raises than otherwise would have happened in 2019, City Administrator Allan Rice said. Read more about that salary schedule here.
The 2019 budget also included about $838,000 for new positions and upgrades, including a net of 13 new full-time employees, four new part-time or temporary positions and five job upgrades.
Most of the new full-time jobs will be in public safety. Those include eight more firefighters, four new police patrol officers, two school resource officers, two public works crew workers and an accountant.
Also, four part-time school resource officers will be converted into two full-time SRO jobs, and the city will add two part-time park patrol officers, two part-time couriers and two seasonal public works crew members.
Some of the new jobs were made possible by the elimination of five other full-time positions, including an assistant library director, senior public safety telecommunicator, court analyst, risk management claims adjuster and senior administrative assistant.
Brocato originally requested only four new firefighter positions, with plans to add more in the future, but several council members felt strongly that the Fire Department needed to go ahead and add the extra firefighters in 2019.
The fire engine at Station 6 has been missing 20 percent of the calls in its territory because it’s too busy with other calls, Council President Gene Smith said. Adding four firefighters would provide enough personnel to staff another rescue unit, but adding eight will provide enough for another fire engine, and the city is going to need the other fire engine within two years anyway when it opens an 11th station, Smith said.
The four extra firefighters are expected to cost the city about $300,000, according to the budget. The council requested some other changes in the general fund that, combined with the new positions, required about $243,000 less being transferred to capital projects.
The council also asked the mayor to add $500,000 into the 2019 capital projects budget for a study to help find another access road for the Trace Crossings community.
Smith said city leaders promised the residents of Trace Crossings they would do something to help with traffic congestion in their community, and this should get the ball rolling.
“I think the budget would have failed had that not been in there,” he said.
Most of that money was made available by moving the purchase of a Fire Department pumper from the 2019 budget into the 2018 budget.
The 2019 budget also includes $818,500 for new vehicles and equipment, including a hazardous materials unit and nine Chevrolet Tahoes for the Police Department — all of which are replacing older models.
Council concerns
Greene, in response to the budget proposal, noted that the Porter White & Co. financial consulting firm advised the council this past spring that the city would face budget deficits if something were not done to address rising costs. Brocato and city staff said the city would need at least $11 million in additional annual revenue just to stay afloat and have money for basic capital projects.
The mayor proposed several tax increases that would have generated an estimated $20 million a year, but the council passed only a portion of them that were projected to bring in $11.2 million more per year. Greene, Lyda and Shaw voted against the tax increases.
Tonight, Greene said that, due to the serious financial situation of the city, he expected the 2019 budget to have more belt-tightening than it did.
Shaw said he supported the increased spending for public safety but said he was concerned about the spending increases not related to public safety. The city is approaching historical highs for spending per capita, after adjusting for inflation, he said.
Brocato has done a good job at making some strategic cuts, but Shaw said he’s concerned about the overall trend line. The council needs to take a deeper look at the budget and find more places to cut, he said.
Lyda said the city’s general fund spending from 2008 to 2016 grew 2.99 percent per year on average, but from 2016 until now, it has grown 7.88 percent, he said. He considers that “runaway spending,” he said.
He reiterated a statement he made two years ago that Hoover residents better keep one eye on city hall and the other on their wallets. At the current rate of spending, “we’re going to be in the same situation we were six months ago,” Lyda said. “They’re going to be looking for another tax increase.”
He had hoped to find four conservative council members to push for more spending cuts, but he could not, he said.
'Kicked the can down the road'
Posey said it’s ridiculous to say that other council members are not being conservative. The money approved in the budget is being spent on the people and important projects, he said.
For years, the city has been putting off a lot of deferred maintenance and important road projects, Posey said. “At some point in time, we’ve got to take care of these. They’ve been neglected.”
In some cases, serious health and safety issues are at risk, Posey said. Leaks in the roof at the Hoover Municipal Center have contributed to a moisture problem, creating a musty smell and mildew on seats in the council chambers. Fire Station No. 1 needs a new air conditioner, and fire trucks need replacing, he said.
The expansion of the Hoover Metropolitan Complex, approved by the previous City Council, is responsible for 4 percent of the recent spending increase, Posey said.
Chief Financial Officer Melinda Lopez said the 2017 budget, the first one adopted by the current group of elected officials, showed an 11.8 percent increase in spending. However, it wasn't adopted until almost halfway through fiscal 2017 because of the change in leaders. The city was essentially operating on the 2016 budget set in motion by the previous administration for half of the year.
Also, the budgeted expenditures for 2017 were only up 4.69 percent after removing increased debt and operating expenses due to the Hoover Met expansion and a $2.5 million increased contribution to Hoover City Schools, Lopez said.
The city is actually on track to end fiscal 2018 with fewer general fund expenditures than in 2017, she said. Proposed expenditures for 2019 are up 6.59 percent from the original 2018 budget. Minus the change in pay scales, the increase is less than 5 percent, Lopez said.
Murphy said the current group of elected officials has been working for two years to carve out waste in city government, but you can’t cut to the point where you’re hurting yourself. A lot of needs are going unaddressed, and “we’ve kicked the can down the road long enough as a city,” he said.
The Fire Department is short on manpower, and fire and police response times are both suffering, Murphy said.
Hoover is the sixth largest city in the state in population and has even more visitors coming to the city each day to work, shop and play, he said. City leaders need to acknowledge how big the city has become and the challenges that come with it, he said. “We’ve got to think long-term for the betterment of the city.”
Smith said he voted in favor of the budget because he had negotiated several things into it and felt he had some ownership in it. He really wanted to see the additional firefighters hired and had successfully lobbied for extra salary increases for public safety dispatchers and city magistrates, he said.
He felt he owed it to residents and employees to vote in favor of the budget, he said.
Brocato said the spending he recommended is needed to address public safety needs, especially on the western side of town. And there are needs in other departments as well, he said. “It costs a lot of money to run a city with high expectations.”
He and his staff have been working to cut operational costs and will continue to do so as department heads develop five-year capital plans, five-year fleet plans and as the city implements an energy management plan, he said.
Brocato asked all the council members to support the budget but said afterward it was fine that not all of them did.
He and his staff tried to answer council members’ questions about the budget, and they worked together making adjustments for four to six weeks, he said. While they didn’t agree on everything, now that the budget has been passed, “I know we’re all back on the same page to work together to make this a great city.”
This story was updated at 11:05 p.m. with a lot more information about the budget and comments from council members, the mayor and chief financial officer.