It might seem like a small issue. The overages only amount to a few thousand dollars in a $31 million budget, but they're part of a larger practice that resulted in transferring thousands of dollars from the city’s reserves to balance the budget. The disagreement over the spending highlights the council members’ differing budget philosophies.
“If we go over the budget, then we have to adjust the budget and we can do that by taking money out of our fund balance at the end of the year and plugging it in where it needs to be,” said City Manager Don Hoyt. “It’s kind of like taking money from savings and putting it into your checking account so that you can cover an unexpected expense.”
Last year, the city dipped into its corrections fund, a revenue source set aside by a previous council to help fund a new police station and jail it knew the city would eventually need. The money, a portion of court fees collected in municipal court, also can be used for operational funds for the court. So, to make things balance at the end of the year, general fund money has been “moved” on paper from municipal court appropriations to wherever it is needed and then replaced with money from the corrections fund.
“The Council pulled what was necessary to balance the budget from corrections in 2010 and 2011,” Finance Director Danny McCullars wrote in an email. “This was fine because the cost of detention and court exceed what was budg-eted from (the) corrections fund.”
In 2009, the City Council allocated $100,000 from the corrections fund for part of its Coosa Valley Detention ap-propriation.
In 2010, the City Council budgeted about $406,000 from the corrections fund to balance the budget. The city had some unexpected expenses, McCullars said.
McCullars said the council had to appropriate $250,000 for the Community Development Block Grant program, and $360,000 to purchase the Water Board building. In the same year, self-funded health insurance went over budget by about $300,000, he said.
This year, it appears the city will end the year with a slight surplus and may not have to transfer the total $415,000 from corrections the council included in the budget, McCullars added.
That dipping into funds is something Robinson doesn’t like to see even in a down year.
“Look at Tuscaloosa with the terrific, horrendous storm that hit them,” Robinson said. “They’ve needed everything they’ve had in surplus. If something like that had happened, we would have to have a surplus.”
He would much rather see the city create more revenue than dip into reserves.
At a special meeting on Aug. 15, when Robinson brought up the issue of overspending on travel budgets, Council-man Ben Little said the council had approved the travel budget knowing that it wasn’t enough. The members had decided to lower their travel budgets from $6,000 to $5,000 to help balance the city’s tight budget they said. In addi-tion, Robinson removed his portion from the budget, bringing the total amount budgeted from $30,000 to $20,000. As of the end of July, the councilmen had spent $17,825.
Robinson, along with councilmen John Spain and David Dawson have lived within the lower budget. Little has not and if Councilman Herbert Palmore used his travel budget to pay for his August conference, he most likely will also be over budget. However, the total may be under the $20,000.
Little said that as long as the total is under $20,000, it’s fine if some of the councilmen overspend.
“It was not enough for individuals, because normally all the councilmen will not travel,” Little said. “They just usually shift the money around.”
Little also believes the budget should shift from the corrections fund during a down year in order to protect the services it provides.
“In theory, we’re not taking away from that fund, we’re just paying their amount of money with their money,” Little said. “You can’t just look at the budget in numbers.”
It’s important, Little added, to continue to fund things like the outside agencies, but it’s also important not to burden the residents with higher taxes. When it comes time to pay for the judicial complex, he said, some of that money will come from the general fund and it will even out.
Those deductions add up, though, and during the budget discussion last year, one way the council decided to help balance the budget while still providing enough funding to pay the bonds for the proposed judicial complex was to increase municipal court fees to the same level as county court fees.
Dawson, who has voted against imposing an additional one-cent sales tax, has since changed his mind. He has seen the neighboring cities increase their sales tax and not lose sales.
“It tells me that people are willing to pay that one cent for convenience or for variety or for whatever,” Dawson said. “That one cent to the consumer and voter is not that important and I think balancing ourselves with the surrounding cities is a reasonable thing to do now.”
It’s better to increase revenue to match spending rather than dipping into reserves, Dawson said. Now that he’s seen the local consumers will bear the burden he would rather do that than continue to dip into corrections.
“That way we don’t have to rob Peter to pay Paul, so to speak,” Dawson said. “We need to have a reserve fund and we need to maintain that reserve fund on a yearly basis in my opinion.”