2010 Birmingham budget

The 2009-2010 Birmingham budget includes the operating budget for the City of Birmingham for the fiscal year July 1, 2009 - June 30, 2010 as well as a capital projects budget for the five years from 2008 to 2013. The operating budget was submitted by the Mayor's office on May 19, 2009. After several rounds of modifications a compromise bill was passed by the Birmingham City Council on August 4.

1st proposal

The 2010 budget as proposed projects $415,800,000.00 in revenues and expenditures over the course of the year. That figure represents a decrease of 3.05% over the 2009 Birmingham budget submitted the previous May.

At his presentation to the council, Langford acknowledged the "recent softness of the international economy" in explaining the overall reduction. He proposed to keep most departments funded at 2008 levels and to cut funding to some agencies, such as Operation New Birmingham and agencies receiving funding for assistance to citizens with HIV/AIDS. In those cases the mayor suggested that the agencies merge with others pursuing similar missions in order to increase overall efficiency.

Council response

The Birmingham City Council objected to the cuts in funding for non-profits and instead proposed 7% cuts for city departments and the elimination of city-funded scholarships to reach a budget of $389 million. Further, the council claimed that there was a $26 million discrepancy between projected revenues and planned spending in the mayor's budget. Langford said the difference was in funds left over from the current fiscal year. Council president Carole Smitherman countered that the amount in question was earmarked for revitalization of Fair Park and other projects still on the boards. Councilor Valerie Abbott agreed with Smitherman's calculation, saying that the money "is obviously not available for us to use unless you cancel the projects that it was allocated for."

Unexpected deficit

Langford pledged to veto the council's revisions two days before the budget was set to take effect. At the Council's July 6 budget workshop, newly-available financial data indicated that the city finished the past year with a $17 million deficit rather than the $13 million surplus Langford had earlier reported. Faced with the revised inputs, the Council rescinded its working budget and requested that the Mayor's staff submit a new budget accounting for the deficit and maintaining the city's policy of holding three months of operational funds in reserve. Langford has argued that the reserve policy is worthless. He later told the press that it was unlawful for him to use revenue projections developed after the May 20 date on which the first budget was submitted. He promised to return the same budget as he had the first time, only shifting more planned expenditures for the proposed domed stadium to future budgets, freeing that money for street paving and grants to non-profits.

Mayor's revised draft

On July 16 the Mayor's office submitted a revised budget with some funding for non-profits not included in the earlier version and reduced funding for paving and sidewalks. The projections from the earlier budget were not changed, prompting the council to call for a forensic audit of city finances before proceeding. Smitherman compared Langford's demand that they accept the finance department's projections to "believing in unicorns." The idea of commissioning a forensic audit was later rejected as an independent audit is due in late Fall anyway.

Council's new draft

The Council responded on July 20 with their own draft proposal, the fourth to be discussed. The council decided to accept the finance director's revenue projections, but to keep the disputed amount in savings until it can be verified. The proposal cut city department budgets by 17% and non-profit boards and agencies' budgets by 20%. Before the draft was complete, Langford rejected it and urged approval of his original budget, saying that 17% cuts to the police and fire departments would be devastating. The council met again on July 28, but the Mayor's office declined to participate due to the impasse over the claimed surplus.

Passed bill

On August 4, 2009 the Council passed a compromise budget that removed cuts from departmental budgets, cut overall funding to non-profits to $2.5 million, reduced the amount set aside for pre-construction work on the domed stadium to $11 million and eliminated a proposed $5.6 million scholarship program. In all the version which passed provided for $13 million less spending than the mayor's request, eliminating an amount that the Mayor planned to withdraw from the city's fund balance, but accepting the finance department's projections of a $13 million surplus from the 2009 Birmingham budget. Langford indicated he would sign the budget ordinance.

In September accurate figures from the 2009 budget year, which ended on June 30, were still not available to the Council. The city's New World public administration software reported a general fund balance of $88.9 million (a 24% decline from the $117.4 million in the fund after 2008), but Langford and other officials said that the figure was inaccurate. Later Langford confirmed the decline and explained that in addition to unforeseen reductions in revenues ($369 million rather than the expected $339 million), the fund was used for projects approved in 2008 such as the Fair Park redevelopment. The report confirmed the Council's contention that what the mayor called a "surplus" was actually generated by withdrawing money from the fund balance to offset a budget deficit.

Operational budget

The following figures were pulled from the Mayor's first proposal, accessed via birminhamal.gov:

Revenues

• $415.8 million in projected revenues from property and business taxes, permits, fines, fees, intergovernmental collections, service charges and "other operating revenue", approximately 2% less than projected revenues from fiscal year 2009.
• A surplus of $17.4 million was reported from the FY 2009 operating budget.
• Included under "other operating revenue" is a "debt service reimbursement" of $7.36 million.

Expenditures

• $85.4 million for the Birmingham Police Department
• $68.5 million for the Birmingham Fire & Rescue Service
• $19 million for the "dome stadium"
• $5.6 million for the "Vision Scholarship Program"
• $1.15 million for "laptop computers"
• No appropriation for Fair Park redevelopment
• No appropriation for street and sidewalk improvements.

References

• Bryant, Joseph D. (May 20, 2009) "Birmingham Mayor Larry Langford proposes leaner city budget, funding cuts to ONB, other agencies." Birmingham News
• Bryant, Joseph D. (June 30, 2009) "Birmingham City Council set to OK draft budget with 7% for departments, but increases council office spending." Birmingham News
• Whitmire, Kyle (July 6, 2009) "Birmingham $17 million deficit revealed." Birmingham Weekly
• Bryant, Joseph D. (July 7, 2009) "Birmingham, Alabama city council rescinds own budget, asks Mayor Langford for third version." Birmingham News
• Spencer, Thomas (July 17, 2009) "Audit of city finances sought by Birmingham, Alabama council before making budget." Birmingham News
• Bryant, Joseph D. (July 20, 2009) "Birmingham City Council proposes another budget for 2010." Birmingham News
• Bryant, Joseph D. (July 25, 2009) "Birmingham Mayor Larry Langford rips council's fourth budget draft." Birmingham News
• Bryant, Joseph D. (August 5, 2009) "Council passes budget for '10." Birmingham News
• Hansen, Jeff (September 20, 2009) "Birmingham, Alabama's financial picture is unclear." Birmingham News
• Bryant, Joseph D. (September 22, 2009) "Birmingham mayor Larry Langford details spending" Birmingham News

External links

• Proposed Operating Budget FY 2010 at birminghamal.gov