It's budget season in Birmingham, and city commissioners are considering a $64 million budget for 2012-13, which includes rising property values and a city staff that's growing smaller by the year.
"The worst may be over, but we're not out of the woods yet," City Manager Bob Bruner said at the city's budget presentation Saturday at .
At the five-hour Saturday meeting, Bruner and various department heads laid out tentative budgets for the upcoming year before the Birmingham City Commission. With big projects on the horizon, Bruner made sure to note that expenditures continue to exceed revenues for another year.
"These last several years of economic and revenue decline have forced communities to ask the question: 'Is there a better way we can do things?'" Bruner writes in his introductory letter to the commission. "Going forward, our projections show that expenditures will continue to increase faster than the growth in revenues.
"With this challenge, we continue to review our operations for efficiencies and improvements, and to find better ways to provide our services within the constraints we face."
City plans to spend less than last year, but expenditures still exceed revenues
The proposed city budget for 2012-13 is $64,474,340, a 6.9 percent decrease from the 2011-12 budget. This year, Birmingham is expected to rack up more than $68 million in expenditures.
However, while Birmingham plans to spend less than this year, the city is expected to bring in more revenue next year. Expected revenues for 2012-13 come in at $61,273,388 — up from $60 million this year. Still, that means expenditures will exceed revenues for the second year in a row, this year by more than $3 million.
The additional revenue can be attributed primarily to climbing property values in Birmingham, which are expected to increase 0.37 percent in 2012-13 and 1 percent in 2013-14. In total, property taxes make up 45 percent of all city revenues.
"This is certainly welcome news after four years of decline," Bruner said.
Where will the money be spent next year? Capital improvements make up the biggest chunk of the 2012-13 budget, totalling $7.8 million. Of that, projects include improving Birmingham's sewers, water mains, street and bridges and the Automobile Parking System.
An additional $2 million will be spent on vehicle and equipment replacements in 2012-13, while money is also budgeted to update the city's master plan, pay for projects in the 2016 Plan and the Triangle District Plan, as well as develop plans for and multi-modal transportation projects.
More budget highlights
- Birmingham's operating levy is projected to remain the same — 11.6883 mills — in 2012-13. However, with a decrease in library costs, the total city levy for 2012-13 comes in at 15.4508 mills (down from 15.6005).
- Birmingham's 2012-13 general fund is projected to be $27,388,180 next fiscal year. The general fund is the city's major operating fund.
- Out of the general fund, Birmingham is projected the spend the most ($11.3 million) on public safety.
- Revenue from building permits is expected to make a big jump next fiscal year, with a projected 57 percent increase. To make up for the increased demand in permits, the city plans on adding five part- and full-time positions to the department.
- In 2012-13, the city plans to eliminate a total of four full-time positions, including many that are vacant, while adding several part-time and temporary positions.
- Personnel costs make up 59 percent of the city's proposed operating budget, largely due to rising legacy costs for retirement and retiree health-care expenses.
- Water and sewer rates are expected to increase by 5.1 percent and 7.2 percent in 2012-13, respectively.
- Plans to reduce costs include evaluating fees, investing in cost-saving technology and collaborating with neighboring municipalities.