Homewood council passes $67.6 million budget for fiscal 2024

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The Homewood City Council this week passed a $67.6 million general fund budget for fiscal 2024, adding more than $400,000 to the budget submitted by Mayor Patrick McClusky last month.

McClusky offered a 3% cost of living adjustment for city employees, but the council decided to give employees a 4% bump in their pay at a cost of $923,000. 

To help balance the budget, the council cut 34 positions – 26 full-time and eight part-time – that were vacant and/or new positions that department heads had requested in fiscal 2024. Departments will have to come back to potentially add positions on a case-by-case basis. 

"Those open positions have been carried over year after a year,” Councilwoman Jennifer Andress said. “They're not getting filled, and we're just having them on the books, and every year they're unfilled. This has been a long time coming. This has been something we've talked about year after year, and we were at the position where we really had to do it this time to balance the budget.” 

The council balanced its budget with an assist from Jefferson County, which alerted the panel of a late property tax adjustment. 

“I believe it was about $700,000,” Andress said. “Cutting those positions and that adjustment that came in from the county allowed us to balance the budget.”

The council also increased revenue projections for business license fees and lodging taxes by about $500,000.

The mayor’s general fund budget proposal had $67.1 million in expenditures, which required using $700,571 from the city’s fund balance. Conversely, the council’s budget of almost $67.6 million now has $149,604 in reserve for contingencies and pulls no money from the fund balance. 

The total fund balance as of Sept. 30, 2022, according to the audit, was almost $30 million, including unrestricted funds of $15.1 million, and city officials expect that amount to increase slightly by the end of fiscal 2023.

City officials initially anticipated employee insurance costs to rise 6.5% for fiscal 2024, but the increase ended up being only 3.5%.

“We had substantial savings with that,” Finance Committee Chairman Walter Jones said. “We are going to pay all of the insurance increase ($107,000). We're not passing that on to employees.”

Other features of the budget include: 

  • A tiered employee bonus based on length of service. The bonus could be as much as a one-time $2,000 payment for persons with 20 years of service. The bonus was made possible because the fiscal 2023 budget is expected to end with a surplus. Bonuses total $365,000. 
  • Employee merit pay increases at a cost of $538,000. Additionally, the city shouldered salary increases for public safety employees, as dictated by the Jefferson County Personnel Board. Those employees are to get a 10% pay increase. In Homewood, employees will get a 5% raise as the fiscal year begins and an additional 5% on their anniversary date.

Meanwhile, the city’s capital budget for 2024 included:

  • $2.8 million for the Interstate 65 diamond interchange at Lakeshore Drive
  • About $1 million for new playground equipment at Central Park
  • $1 million for paving streets
  • $850,000 for the completion of the Green Springs Revitalization Project
  • $585,000 for sidewalk construction, repairs to creek walls and stormwater improvements
  • $515,000 for eight new police vehicles
  • $330,000 for a pocket park behind Samford University  

“This was a unique year in terms of curveballs,” Jones said. “Sometimes that happens. You have everything together, and then all of a sudden you get new information. Some was good, and some was bad. 

“But the important thing is we all stuck together, and we worked through whatever the item was,” Jones said.

During Monday’s meeting, the City Council also approved a Finance Committee recommendation to change the city’s form of government. That recommendation calls for the hiring of a city manager, the election of four ward-specific council members with an at-large elected mayor serving as president of the council. 

“This does not have a resolution because we are not done with this item,” Council President Alex Wyatt said. “There is still a lot left to be done. All this is taking a vote so we acknowledge what path we’re headed down.” 

New ward lines must be drawn, the referendum must be drafted and citizens must vote on the potential change in government. If it passes, a city manager would have to be hired. 

“If that passes, we will take a good bit of time to search for a city manager,” Wyatt said. “That will not be an easy or short task. It’s an important hire, and we will take the time that we need to get the right hire.” 

In other action, the council: 

  • Made Cobbs Allen the agent of record for employee voluntary benefits beginning Oct. 1 
  • Declared surplus a portion of right of way along Forest Brook Circle and agreed to sell it for $6,324 
  • Approved a sign variance for Once Upon a Time, agreeing that the letters O, U and T on the canvas awning will be 21½ inches tall. 
  • Set a public hearing for 6 p.m. Oct. 9 for a sign variance at Drury Inn at 160 State Farm Parkway