Screenshot from City of Hoover YouTube video
Hoover Mayor Frank Brocato presents his proposed city budget for fiscal 2025 during a special council meeting on Thursday, Sept. 12, 2024.
The Hoover City Council today will meet to consider Mayor Frank Brocato’s proposed $181 million budget for fiscal 2025, which starts Oct. 1.
The mayor shared his budget proposal with the council last week, and council members have been reviewing it to see if they want to make any changes.
The mayor’s proposed $181 million in spending from government funds would be a $6.8 million increase (3.9% increase) from the city’s original budget for fiscal 2024. Revenues from government funds are expected to be $179 million, up 7% from the original 2024 budget.
The proposed general fund budget includes revenues of $170 million and expenditures of $162 million.
The mayor’s budget includes a 1.5% cost-of-living adjustment for city employees’ paychecks, which when combined with typical 5% step raises, will raise the city’s personnel costs by $5.6 million in fiscal 2025 to $91.5 million.
His budget proposal also includes money for six new employees, mostly in the Finance Department, including a senior financial analyst, financial analyst, accountant and revenue auditor. The council on Aug. 29 created a fifth new Finance Department position — payroll manager.
These upgrades come in response to a forensic audit report that said the city’s Finance Department is much understaffed, compared to cities of similar size. That same audit report indicated the staffing shortage contributed to problems such as unbalanced transactions, unreconciled accounts and delayed financial reports.
“It’s critical we strengthen our financial operations, ensuring the department is fully staffed to manage the city’s financial needs,” the mayor said.
Other new positions proposed by the mayor include a geographic information system manager in the city planner’s office and a custodian supervisor. The six new full-time positions would cost the city $660,000. The mayor also proposed upgrades for eight employees, which would cost about $63,000. He also wants to increase the car allowance for department heads from $400 a month to $500 a month, costing the city $14,400. All of these changes together would bump up personnel costs to $92.2 million.
The city’s personnel costs have risen 35% since 2020 (from $68 million to $92 million), records show. Meanwhile, operating costs have increased 57% since 2020 (from $30 million to $47 million).
Brocato said it’s important to keep employees’ salaries competitive without compromising the city’s financial stability.
“Hoover’s finances remain exceptionally strong,” he said. “We have a stable, healthy reserve, which positions us well for the future.”
The city anticipates beginning the fiscal year with $72.7 million in its general fund. If revenues and expenditures go as projected, that would provide an excess of $8.3 million in the general fund. Brocato proposes to use about $6 million of that to shore up some special revenue funds that often need additional revenue to balance and to plug the remaining $2.5 million into capital projects.
That $2.5 million and $1.5 million in bond interest is proposed to be used for six projects, including:
- $1.6 million to finish replacing the roof on the Hoover Public Library
- $1.1 million to pay the city’s portion of powerline relocation for the widening of Valleydale Road
- $800,000 for guardrails, traffic signals and road signs
- $250,000 for a sidewalk on Thornton Road
- $105,000 for new portable visitor bleachers for football games at Hoover Metropolitan Stadium
- $100,000 to renovate the Finance Department conference room to provide office space for the new finance employees
- The mayor also proposes to spend about $4.3 million from gas taxes and the Alabama Trust Fund for capital projects, including $3.6 million for paving and street resurfacing and $745,000 to replace the Recreation Center roof.
Because city general fund revenues are not projected to grow more than 4%, the mayor also is proposing to pull $3.6 million from the city’s budget stabilization fund to cover additional capital projects. Those projects include:
- $805,500 for improvements in the Parks and Recreation Department
- $724,000 for engineering improvements
- $515,000 for vehicles and equipment
- $472,000 for library improvements
- $300,000 for stormwater improvements
- $277,750 for emergency communication improvements
- $223,450 for Hoover Metropolitan Complex improvements
Total proposed capital projects for 2024 would be about $12 million.
Cornett said the focus with this year’s budget is to keep employee pay competitive and take care of basic needs, including deferred maintenance and repairs and projects that already are underway. “It’s top priority for us to take care of what we have,” she said.
While the city since 2020 has seen some years with significant revenue increases, revenues are beginning to flatten out, Cornett said. It will be important for the city to keep operating costs under control for things the city can control, she and the mayor said.
“Although we can’t predict the economy ahead of us, I know we are all concerned about the outcome of the presidential election and how that will influence our numbers,” Brocato said. Also, “we’re seeing changes in shopping patterns with more residents opting for online shopping purchases, which impacts our traditional brick and mortar. While online sales are growing, the way taxes are distributed from those sales does not benefit the city of Hoover as directly as in-person purchases.”
City officials also are mindful of the effects of inflation on household spending, he said.
Total spending from all government funds is expected to be $1.6 million greater than revenues. Combined with about $2.1 million in tax rebates given as economic incentives, the total government fund balance should decline by $3.7 million to $164 million by the end of fiscal 2025, Cornett projects.
The city also has some proprietary funds that include the sewer fund and some insurance funds. Spending from those proprietary funds is expected to be about $22 million — roughly $2.5 million more than revenues. The proprietary fund balance should drop to $3.5 million by the end of the fiscal year, officials project.
The Hoover City Council is scheduled to meet today (Friday, Sept. 20) at 5:30 p.m. in the William J. Billingsley Council Chambers at Hoover City Hall to discuss and potentially approve a 2025 budget.
