|Huntsville Mid-Year Budget Review Shows Revenue Increase
FOR IMMEDIATE RELEASE
May 9, 2012
(Huntsville, AL) - Practicing fiscal responsibility is paying off for the City of Huntsville, according to a mid-year budget review of the 2012 fiscal budget that shows revenues running $1 million ahead of projections.
"Things are growing faster than expected and that shows that people continue to have faith in this community and are willing to invest," said Huntsville Mayor Tommy Battle. "The increased revenues have finally given us room to breathe and the opportunity to go back and address those things that we have deferred in this tough economic climate."
Even though the City is on track to meet 2012 budget expectations and goals, Mayor Battle says his administration will continue to exercise restraint. That's because the City's spending side is on target, too, and Finance Director Randy Taylor reports that unforeseen costs, such as fuel increases, could easily absorb any savings by the end of the year.
"It is not the time to add additional spending," said Taylor. "Given what we have been through the past three years, we have handled a lot of challenges and a lot of cuts. We've shown we can provide quality services and do more with less."
Mayor Tommy Battle says the mid-year report agrees and says the City has made the right financial decisions by being responsible and practical.
"I credit our department heads and City Council partners for helping support the tough choices we have had to make," said Mayor Battle. "Today, I am encouraged by these numbers. It shows we are starting to build back, and if everything continues, we will hopefully be able to sustain a sound, stable financial condition."
A priority for Mayor Battle is to preserve the City's contingency reserve fund balance. At $25 million, the fund is the highest it has ever been. Another priority is to maintain Huntsville's AAA credit rating - a first for the City under Battle's administration.
"The good news is that we now have the opportunity to consider projects that will benefit the quality of life for all of our citizens," said Mayor Battle. "We want to move forward with our network of greenways and enhanced parks; projects that people can use and that will make Huntsville a better place."
Highlights of the mid-year budget review include:
General Fund Revenue
- Sales & use taxes growing at 4.3% annual rate, compared to 3.0% budget expectation
- Major revenues up 3.9% over this time last year
- Current trend for all major revenues indicates actual results will be about one-half percent over budget, or $1 million surplus.
- Building Permit revenue is up 4.9% over last year
- Data suggests rising business income and more local spending-mainly attributed to improving employment and consumer confidence
General Fund Expenditures
- General Fund personnel costs are running slightly ahead of budget goals, possibly 1.0%, or about $1 million. Difficult to project through the remainder of the year
- Temporary workers are being added to address a backlog of public service needs, particularly in drainage and landscape maintenance
- Full-time positions are being filled selectively. There are still fewer workers (24) than two years ago.
- Health care costs are within budget goals
- Fuel costs, based on fuel price rises are expected to be above budget by $500,000 to $780,000. A new vehicle tracking system will help management monitor utilization and deploy vehicles more efficiently
Fund Balance Reserves
- The General Fund contingency reserve remains fully funded at $25.8 million
Capital & Debt Management
- Purchases of $8 million of critical fleet are under way, including $4 million for sanitation equipment, $1 million police, and $500,000 fire
- The City completed a refinancing of some of its debt, resulting a savings of $3 million that went toward the new fleet purchases
- The City began acquisition of a $3.2 public safety radio system upgrade, for which grant funds and vendor discounts saved the City $1.3 million.
- The City received its 4th dual triple-A credit rating, which was maintained throughout the recession. This reflects the strength of the local economy and City management practices
For more information, contact:
Kelly Cooper Schrimsher, Director of Communications, Office of the Mayor, City of Huntsville, 256-427-5006 (w), firstname.lastname@example.org
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