Hoover mayor proposes $174 million budget for fiscal 2024

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Hoover Mayor Frank Brocato on Tuesday night proposed a $174 million budget for fiscal 2024 with a heavy emphasis on road and parks and recreation projects in the capital budget.

The proposed $174 million in expenditures from the city’s primary funds — the general fund, special revenue fund and capital projects fund — would be a 13% increase from the $154 million in expenditures approved in the original 2023 budget.

It does not include the city’s proprietary funds, such as the sewer fund, risk management, worker’s compensation and property and casualty insurance funds, for which the mayor is proposing to spend $22.3 million in fiscal 2024.

For the general fund, which covers the city’s primary operations, the mayor is proposing to spend $143 million in fiscal 2024, which is about 10% more than the original 2023 budget of $130 million.

Fiscal 2024 begins Oct. 1 of 2023.

CAPITAL PROJECTS

The mayor wants to spend $14.9 million on new capital projects, including $2.7 million for road paving and $1.9 million for sidewalk projects that include sidewalks on Chapel Lane, Alabama 150, Sulphur Springs Road, Al Seier Road, Top O’Tree Lane and Guyton Road.

The mayor’s proposed budget also includes $1.6 million for drainage improvements on Savoy Street, Al Seier Road, Cornwall Drive, Charlotte Drive, Quail Run Drive and various other places in the Green Valley community.

His budget has $1.75 million for vehicles, another $500,000 for the widening of South Shades Crest Road (boosting the city’s total contribution to $4.5 million), $193,000 to extend the right turn lane from Interstate 459 South to John Hawkins Parkway, $150,000 for bridge maintenance, $139,117 for traffic signal upgrades and $139,117 for traffic calming devices.

Brocato said it’s important to stay on top of infrastructure projects to try to stay ahead of problems.

He also is proposing to spend at least $3.1 million on parks and recreation projects, saying the Hoover Parks and Recreation Board did a great job of prioritizing the needs of the city’s various parks. “We funded as much of it as we possibly could,” he said.

His spending plan for 2023 allocates $500,000 for future athletic turf replacement, an additional $450,000 for improvements at the Hoover Lake House on Municipal Lane, $440,000 for projects at Hoover Sports Park Central, $331,500 at Shades Mountain Park, $300,000 at Riverchase Sports Park, $172,000 for Hoover Rec Center improvements and $100,000 to update and renovate the bride’s room and pavilion kitchen at Aldridge Gardens.

Other bigger-ticket capital items in the budget include $841,000 for various improvements in the technology department, $294,000 for a new police bomb robot and explosive device X-ray system, $238,000 to modernize half of the heating, ventilation and air conditioning equipment at the library, $228,000 for a new police bomb robot, $150,000 for new public safety software, $130,000 for modifications to the Hoover Jail, $110,000 for Hoover Library Theatre renovations, $103,000 for various fire station repairs.

FINANCIAL DETAILS

Tina Bolt, the city’s chief financial officer and treasurer, said 42% of the mayor’s proposed expenditures would go to public safety, while 25% would go to operations, 11% to debt, 8% to parks and recreation, 8% to administration and 6% to the library. The proposed budget includes $30 million for the Police Department, $22.7 million for the Fire Department and $3.6 million for emergency communications.

Fifty-one percent of the proposed operating expenses would go toward salaries and benefits, Bolt said. The mayor also is proposing a 1.5% cost-of-living increase for 2024, which should cost the city about $1 million, Bolt said.

The mayor is proposing to add five public works crew workers, an engineering project manager and a building tradesworker. He also wants to add one police officer position but would eliminate two part-time reserve officer positions to pay for it, and he is proposing to add an education and volunteer outreach coordinator for the Parks and Recreation Department but would eliminate a contract position to cover most of the cost. The total cost of the new positions would be $283,210 for salaries and $96,155 for benefits.

The mayor’s proposed budget also includes pay upgrades for 33 positions at a cost of $166,818 for salaries and $54,264 for benefits. He also is proposing to reduce the pay grade for the chief financial officer position once it becomes vacant (Bolt is retiring Oct. 1) and the chief operations officer position whenever it becomes vacant in the future.

Brocato said it has been hard to predict finances since the COVID-19 pandemic, but he and his staff have tried to take a conservative approach to predicting revenues and planning expenses.

He also credited the Hoover City Council with having the foresight to establish a budget stabilization fund to address any future lean years. The council a year ago put $1.6 million into the stabilization fund, and it has gained $132,166 in interest, Bolt said. The plan is to put another $1.7 million into that fund in fiscal 2023, she said.

The city has boosted its overall fund balance from about $80 million in 2020 to about $140 million in 2022, Bolt said. The general fund balance has grown from about $30 million in 2019 to about $80 million in 2022, she said.

RECORD REVENUES

All of this has been made possible by record city revenues, made possible mostly by growth in sales and use taxes, which have increased from $73 million in fiscal 2018 to $106 million in fiscal 2022, records show.

The city is on track for another record year of revenues for fiscal 2023, but Bolt said she is trying to be conservative by budgeting just $101 million in revenues for fiscal 2024.

“The economy is going to turn at some point,” she said. “These high revenues coming in like this — it’s just not going to last forever. You look at historical trends, and they never do.”

Property tax revenues going to the city of Hoover have risen from $11.6 million in 2018 to $13.7 million in 2022. The 2023 budget conservatively anticipates $14.1 million in property tax revenues, and the 2024 budget projects $14.2 million in property tax revenues.

Overall revenues for the general fund for 2024 are expected to be $159 million, while revenues for all government funds are projected to be $167 million. If revenues and expenditures go according to budget, the city of Hoover would have net increase in its general fund balance of $3.2 million by the end of fiscal 2024 and a decrease in the total government fund balance of $11.8 million, leaving $91 million as the general fund balance and $125 million as the total government fund balance on Sept. 30, 2024.

Council President John Lyda said the council will review the mayor’s proposal, get back with him or his staff with any questions, and hopes to vote on the 2024 budget on Sept. 18.

AUDIT FINDINGS

In other city financial news, the city’s auditors from BMSS on Aug. 31 delivered their audit findings for fiscal 2022 and noted some material weaknesses and significant deficiencies in the city’s internal controls.

The material weaknesses included not enough segregation of duties over financial reporting by an outsourced contractor at the Hoover Metropolitan Complex and errors and problems related to the implementation of a new business software system.

The significant deficiencies dealt with the recording of accounts receivable transactions and the holding of checks for vendors.

Bolt reported the auditors’ findings to the City Council Tuesday night and said none of the findings were deemed fraudulent or unethical. She disputed some of the findings and said that some of the problems had been self-reported and that the city had sought assistance from the auditors in trying to correct the software payroll errors and the deficiencies in the recording of accounts receivable transactions.

She expected comments in the audit regarding this but not a “finding” and was surprised to see that because such “findings” had not been discussed with the city’s finance staff prior to being included in the audit report, she said.

Furthermore, some of the issues with practices cited, such as the recording of accounts receivable transactions, have been practices of the city for many years and have not been cited as findings by auditors previously, she said.

Nevertheless, the city has taken corrective action to deal with all of the issues, Bolt said.

Hoover Mayor Frank Brocato said he was not alarmed by the findings and noted the city had taken steps to address the areas of concern. He commended Bolt for being transparent about issues that are not always talked about publicly and explaining the issues to the council.

Curt Posey, chairman of the council’s Finance Committee, noted that Bolt recently was named among the top 25 chief financial officers and treasurers in Alabama and said the auditors commented it was amazing the amount of work she was getting done in addition to being head of her department.

“You’re going to be sorely missed when Oct. 1 comes, and it will probably take an army of people to replace you and the quality and level of work that you do,” Posey said.