City tapping reserves to fund budget

By Staff
Leada DeVaney, Hartselle Enquirer
Hartselle's city budget will need a boost from its reserve funds to cover next year's expenses.
The city is anticipating revenues of some $7.5 million, with expenses of $8.1 million. The difference will be made up of transfers from the general fund's reserve and the correctional fund. The city will take $649,354 from its reserve, which essentially serves as its rainy day account. $30,060 will be moved from the correctional fund. The transfers will leave the city with a plus balance of some $94,088.
The idea of moving money from the reserves is not a new one but it's not a popular one for Councilman Tom Chappell.
"I'm not in favor of taking money out of the general fund to pay for capital improvement without a method to replace it," Chappell said. "Now, there is no other option and we need to look at that. We can't keep that up for very long."
At the council's most recent meeting, Chappell introduced a motion to increase Hartselle's sales tax by 1-cent. He couldn't get enough votes for the measure to pass, though some council members said they would consider a 5 mill property tax increase sometime in the future. The council can decide on a sales tax increase without a public vote, but a property tax increase would have to be approved by a vote of the people. Similar efforts in the past, including a push to legalize alcohol sales in the city, have recently failed.
Around the time the last 1-cent sales tax proposal failed, the city adopted a capital improvement plan, but with no way to fund the projects. The capital improvement plan included such items as fire equipment, repairs to city buildings and street and drainage projects.
Previously, city leaders said they didn't support raising ad valoreum rates because of Gov. Bob Riley's sweeping tax increase plan. That plans defeat,
Chappell said, should clean the way for the city to enact some sort of tax increase of its own.
"People said it (previous tax increases) weren't good timing because of Riley's plan," Chappell said. "It didn't pass and here we are again without an additional sources of revenue. People that live here and enjoy the services we do should expect to pay a little more property tax."
Hartselle's 2003-04 budget contains a step raise and 3 percent cost of living adjustments for employees and increases the amount the city will pay for dependent health care coverage from 25 percent to 50 percent. Outside entities such as the Hartselle Area Chamber of Commerce, library and
Hartselle Beautification Association will all receive the same funding as last year.
Chappell said while the city is in good shape and, "can pay all its bills," he is not sure how long it can continue with its current financial structure.
"Financially, on paper, we're pretty sound," he said. "But here we are in one budget whacking out 2- percent of our general fund with no plans to replace it. The price of status quo will keep going up year after year."