Sydney Cromwell
Highland Road ROW Work
The special issues committee considers a request to work in the right-of-way at 908 Highland Road to do drainage work, which will also affect the neighboring Sims Garden property.
The City Council's finance committee will be reviewing its fiscal policy in upcoming meetings to decide how to keep the city's budget in compliance after adding both new sales tax revenue and additional debt.
The fiscal policy was established by the Council to govern how it spends money, minimum reserve amounts in various city funds and public disclosure policies. Ward 3 Representative and finance committee chair Walter Jones said the fiscal policy requires certain percentages of the budget or cash amounts be kept in reserve in certain funds at all times, but the addition of debt payments on the city's $110 million bond and the one-cent sales tax increase in 2016 mean those minimums have changed.
This particularly presents a problem in the capital projects fund, Jones said, which is required to have a minimum of $750,000 at all times. Due to activity of money being spent on projects such as sidewalks and roads, Jones said the balance is typically around $500,000.
At the Monday, June 4, finance committee meeting, members briefly discussed potential changes to the policy but decided to carry over the topic until the next meeting to review the current policy and recommendations from former city clerk Melody Salter.
After tonight's meeting, Jones said the committee could decide to alter the wording of the fiscal policy to lower the reserve amount required in the capital projects fund, or could decide to allocate an additional quarter of a penny in sales tax revenue to the fund in the budget in order to meet the existing minimum reserve.
Jones said the city typically transfers money to the capital projects fund throughout the year to pay for projects and keep up the reserve, so this would not change much about how the money is spent, just when it is put in that particular fund.
Finance Director Robert Burgett said at the mid-year review for the current fiscal year, the city also fell short of its minimum for the debt service fund. The fiscal policy dictates the city must keep at least one year's worth of payments on outstanding bonds in reserve. With the addition of $6.2 million in annual debt payment on the city's 2016 bond, Burgett said that total reserve amount must now be $10 million. At the mid-year point, the city only had $9.38 million in reserve for debt service.
Burgett said the city could choose to revise its fiscal policy to exclude payments on the 2016 bond from its debt service minimum, as it did with payments to the Board of Education when the policy was written. Allocating more money to the debt services fund from elsewhere in the budget is also an option.
Jones said the question for the finance committee to answer is, “What can we do to tweak it? We want to be in compliance with every one of them.”
Other reserve minimums in the city's fiscal policy include:
- The city general fund must include at least 16 percent undesignated cash reserves
- The risk management fund must include at least $1 million.
- The city must assign fund balances equal to its liability for compensated absences (holiday, vacation and overtime) at the year-end
- If there is a general fund surplus, a quarter of it must be reallocated to the rainy day fund, until that fund is at least 30 percent of the general fund's expense budget.
Jones said the committee is also looking at amending the wording of the mid-year review portion of the fiscal policy, which currently requires the review to happen at the first finance committee meeting in May. Jones said the policy does not allow enough time for some budget numbers to be collected, so they are considering changing that to the last committee meeting in May.
He added that nothing about the fiscal policy's public reporting rules, including posting financial data on the city website, will be amended.
“We want to continue to be transparent with all of that. So that was the point of the fiscal policy," Jones said.
“We’re keeping track on ourselves and making sure we’re reporting all this out to the public.”
The finance committee will continue discussing this issue at its next meeting. The date and time will be set at the June 11 Council meeting.
The finance committee also discussed $32,000 in additional engineering studies for the Oxmoor Road "turkey foot" intersection project, from Green Springs Highway to Barber Court. BEZ official Greg Cobb said the Alabama Department of Transportation requires the work to be done again because of the number of years elapsed since engineering was initially done.
“The project is so old now, they’re making them go back and redo some environmental documents,” Cobb said.
Changes to the intersection have been delayed for a number of years, in part due to an expanded project scope – therefore increasing costs – and the Lakeshore Parkway "diverging diamond" interchange was moved up the ALDOT priority list. Director of Public Services Berkley Squire said current ALDOT plans will put the diverging diamond project out to bid in July, with construction possibly beginning as soon as August.
Construction on the Oxmoor Road project could be part of next fiscal year's budget, which will be finalized by Oct. 1, Burgett said. The City Council will vote on whether to approve funding for the engineering study on June 11.
Additional topics that the Council will discuss on June 11 include making Seminole Drive one-way from Manhattan Street to Oxmoor Road, as well as prohibiting on-street parking there, and considering right-of-way work at 908 Highland Road to fix drainage issues, and how it will affect the Sims Garden property next door.
