2021 Birmingham budget
Mayor Randall Woodfin proposed to the Birmingham City Council that it plan to continue operating under the 2020 Birmingham budget for a few months so that his office could better understand the fiscal impacts of the 2020 Coronavirus pandemic and make preparations for a significant reduction for the next year. He proposed submitting a proposal on August 20 with the aim of passing a budget before October 1. The delay would also potentially better allow for public hearings to be conducted in a safe manner.
In mid-June 2020, finance director Lester Smith suggested that the anticipated loss of revenues for FY 2021 would be around $73 million. Dipping into the city's $75 million "rainy day fund" would help offset those losses, but Woodfin expressed that he preferred to address most of the shortage with spending cuts distributed across all city departments. In letters dated June 19, Woodfin notified community groups, boards and non-profits to expect significant cutbacks in financial support and in-kind services, including free rentals and security for events. On June 30 he sent an email to all city employees notifying them that the budget did not have room for merit, longevity or cost-of-living raises. A month later the mayor's office reported that revenues were still on track for the predicted 20% decrease.
Mayor's budget proposal
Woodfin proposed an operating budget of $412,862,038, a $39 million (8.6%) decrease from the $451,407,950 2019-2020 budget. The proposal accounted for the revised estimate that $63 million less than projected had been collected from taxes and fees during the previous fiscal year.
Cuts to expenditures included eliminating 447 unfilled positions, and cutting pay for appointed staff (including a 10% cut for the Mayor's own salary),. The city furloughed many part-time staff, focusing on facilities not operating during the pandemic. The city also offered early retirement to long-time employees and eliminated 9 of 12 paid holidays. Those efforts were projected to save the city $26.2 million in personnel costs.
In addition to direct cuts, the mayor announced a shift in organizational structure with employees reporting to departments responsible for particular functions rather than specific facilities. The result appeared as a net gain to the Birmingham Police Department appropriation, even though the number of sworn officers was reduced by eliminating vacant positions.
Some of the city's outstanding debt was to be restructured, saving $3.8 million. The city would preserve or slightly increase its investments in pension obligations, facility and equipment maintenance, and public works. Funding for outside boards and agencies would be sharply cut, and the city's funding for economic incentives for recruiting business and development would shrink by $1.7 million. Woodfin also announced that the city planned to construct a health clinic for employees.
Woodfin's proposal included spending $23 million from the city's $95 million general reserve fund to make up the difference between revenues and expenditures. He did not propose increasing any city taxes or fees. As part of implementing his 2021 budget, Woodfin notified the Birmingham Parks and Recreation Board and the Birmingham Library Board to expect steep cuts in appropriations and to plan to furlough employees and close facilities.
After the budget proposal was made public, the operator of CrossPlex Village filed for bankruptcy, forcing the city to budget $900,000 for payments due under its bond guaranty agreement. The Council subsequently voted to terminate the operator's lease and make a one-time payment of $193,000 to reimburse them for improvements.
City Council approval
The mayor's budget proposal was not voted on by the Council's Budget and Finance Committee before being added to the September 29 Council agenda by president William Parker during the meeting as an addendum. At that meeting Crystal Smitherman proposed amendments to make further cuts to travel, marketing and lobbying costs for the benefit of the public library system. Clinton Woods made a motion to delay a vote on the budget for a week. Those motions were voted down, 5-4, with Parker, Darrell O'Quinn, Wardine Alexander, John Hilliard and Hunter Williams in the majority, and Woods, Smitherman, Steven Hoyt, and Valerie Abbott in the minority.
Ultimately Woodfin's budget was passed at that meeting, with no amendments. Parker, O'Quinn, Alexander, Hilliard, Abbott, and Williams voted for, and Smitherman, Woods and Hoyt voted against. After the vote, in the context of a promise to "bust our butts" to bring back furloughed workers, Woodfin mentioned the possibility of selling the Arlington Antebellum Home & Gardens to bring in revenue and cut costs.
In his budget proposal, Mayor Woodfin proposed cutting the city's direct appropriation to the Birmingham Public Library by $2.5 million. He also ordered most of the library's 230 employees furloughed from work for as long as the Coronavirus pandemic kept the buildings closed to the public. The library board disputed his authority to furlough workers. After negotiations, the Mayor's office agreed to restore some of the lost funding, but Woodfin later announced even more drastic cuts, to $6.2 million for the fiscal year, leaving it up to the board to determine closures and furloughs. The following week the board, which had already voted to close the Eastwood Branch, approved the director's recommendation to furlough 158 of the system's 211 employees.
Bill Smith's unsolicited offer in October to purchase six Birmingham Parking Authority decks for just over $40 million was touted by Woodfin as a reprieve that would allow some workers to be recalled. In November the Mayor's office proposed drawing another $7 million from the city's reserve fund to rehire workers and restore pay cuts based on revised guidance for expenses that qualified for reimbursement from the federal CARES Act through Jefferson County. On December 1 the Council approved a $4.58 million disbursement from the reserve fund to re-hire 132 furloughed workers who would have lost their health insurance benefits.
In March 2021 revised projections showed $416 million in revenues, suggesting that the city could reduce its drawdown from reserves from $26 million to $3.7 million. The council immediately restored two paid holidays for city employees, at a cost of $1.9 million. Workmans' Compensation claims had exceeded the budget already, though, and the number of businesses paying for licenses was down by about 600. Council members also discussed priorities for steering approximately $148 million in stimulus funds from the American Relief Plan toward neighborhoods.
- Sims, Bob (May 19, 2020) "Pandemic’s pinch puts off Birmingham budget." The Birmingham News
- Prickett, Sam (June 16, 2020) "City of Birmingham Facing ‘Economic Crisis’ Over Falling Revenue From Pandemic." BirminghamWatch
- Beahm, Anna (June 22, 2020) "Woodfin says city will trim in-kind services; alerts groups to ‘drastic’ cuts." The Birmingham News
- Beahm, Anna (June 30, 2020) "Pandemic kills planned pay hikes for Birmingham city workers." The Birmingham News
- Beahm, Anna (July 30, 2020) "Birmingham on track for 20% revenue drop for 2020." The Birmingham News
- Beahm, Anna (August 18, 2020) "Woodfin’s $412M budget includes furloughs, cuts for local agencies." The Birmingham News
- Wright, Erica (September 18, 2020) "Community Groups Take Issue With Mayor Woodfin’s Proposed $412M Budget." The Birmingham Times
- Johnson, Roy S. (September 29, 2020) "Divided Birmingham City Council yet to find consensus to address a stark budget." The Birmingham News
- Prickett, Sam (September 30, 2020) "Birmingham Passes “Phantom” Budget, Unchanged From Woodfin’s Proposal." BirminghamWatch
- Garrison, Greg (September 30, 2020) "Birmingham City Council approves mayor’s budget." The Birmingham News
- Johnson, Roy S. (September 30, 2020) "God, Trump and ‘childish tricks’, who needs prez debate when there’s Birmingham council?" The Birmingham News
- Johnson, Roy S. (November 16, 2020) "Birmingham mayor’s plan to bring back furloughed employees meets skeptical council." The Birmingham News
- Garrison, Greg (December 1, 2020) "Holiday spirit: Birmingham digs in to reserves to bring back up to 132 employees." The Birmingham News
- Johnson, Roy S. (March 30, 2021) "Birmingham COVID-19 budget update offers ‘good news’, rare City Council, mayor congeniality." The Birmingham News
- Mayor's Proposed Operating Budget Fiscal Year 2021 at birminghamal.gov