Jefferson County’s proposed 2020 support budget is under intense scrutiny amid allegations of “pork” funds and “an unconscionable lack of fiscal discipline.”
Birmingham Watch reported that the county commission recently took a non-binding, preliminary vote on the proposed budget, which would take effect on January 1 of the coming year.
Two Republicans, Commission President Jimmie Stephens and Commissioner Steve Ammons, voted against the measure. Meanwhile, Republican Commissioner Joe Knight voted with Democratic Commissioners Lashunda Scales and Sheila Tyson in favor of the proposed budget.
One of the controversial proposed budgetary items is a $1.225 million “public service fund.”
Stephens explained that he voted against the proposed budget because it funded many programs he thought should be paid for through commissioners’ discretionary spending.
“Each commissioner has $225,000 for such expenditures,” he told Birmingham Watch. “I remind you that we had to borrow money from general fund reserves and economic development fund balance to pave our roads. We funded the sewer relief fund and the construction of storm shelters. I fully support those efforts, and I am disappointed that the commission added so many pork projects.”
Ammons also has serious concerns.
“I was not comfortable, number one, with the amount of money that was being spent, and some of the things it was going to I didn’t agree with,” he advised, per Birmingham Watch. “There are way too many questions for us to just be throwing money at things. It’s just irresponsible, in my estimation.”
After Birmingham Watch’s article on the subject was published, former Commission President David Carrington sent an email to the current commissioners, expressing his “blunt” opposition to the proposal and the result of the test-vote.
This email was obtained by Yellowhammer News on Tuesday (mere hours after it was sent) and warns that the current proposed budget is “scarily similar to the historical root causes that led the last Commission to file, what was at the time, the largest municipal bankruptcy in U.S. history.”
After outlining in detail his issues with the proposed budget and asking for relevant data in the form of a Freedom of Information Act request, Carrington called on the commissioners to pump the brakes on holding a final vote on the measure.
While the Jefferson County Commission has until September 30 to hold this official budget vote, they are currently scheduled to do so at their meeting on Thursday.
Carrington’s full email as follows:
After reading Solomon Crenshaw’s Birmingham Watch article on the County’s proposed General Fund budget, I have to ask, “What are you thinking?”
To be blunt, the County’s proposed General Fund Budget appears to display an unconscionable lack of fiscal discipline, scarily similar to the historical root causes that led the last Commission to file, what was at the time, the largest municipal bankruptcy in U.S. history. It clearly reflects a “spend today without considering tomorrow” attitude.
Based on Crenshaw’s article, two glaring problems with the proposed General Fund budget are readily apparent.
First and foremost, the proposed budget is unconstitutional, because the Sewer Relief Fund violates Section 94 of the Alabama Constitution, which states “Municipalities [are] not to grant public money or lend credit to private persons or corporations. The legislature shall not have power to authorize any county, city, town, or other subdivision of this state to lend its credit, or to grant public money or [any] thing of value in aid of, or to any individual, association, or corporation whatsoever …” The last Commission spent countless hours trying to make a similar fund work, to no avail. These funds need to be raised from the public.
Second, the bottom of the waterfall on the special one cent sales tax is being misused. It was recognized and acknowledged that some $15-$17 million at the bottom of the waterfall each year would be used to fund ongoing operations, but the remainder was to be primarily used for funding contingencies and building reserves.
Among other things, it is my current understanding that an additional $1,125,000 million in district “pork” funds ($225,000 per commissioner) and $1,225,000 for a new “Public Service Fund” are also coming out of the bottom of the waterfall (after the $15-$17 million). This new fund includes (1) items that should be funded out of each Commissioner’s $225,000 District Funds (like the ACTA in Trussville); (2) items that shouldn’t be funded at all (like the $250,000 to the transit authority on top of the $2,000,000 they are already getting from the sales tax proceeds); and (3) items that should be included in the $15-$17 million for ongoing operations (like TASC).
Based on the Freedom of Information act, I am formally requesting …
• a complete line item proposed budget for next fiscal year;
• a year-to-date comparison of the original budget to the actual expenditures for the current fiscal year;
• a complete, detailed break-down of the entire waterfall expenditures year-to-date and in the proposed budget;
• a complete, detailed break-down of the Road and Bridge Fund year-to-date and in the proposed budget;
• a complete, detailed break-down of the entire Economic Development Fund year-to-date and in the proposed budget;
- included should be the rationale, resolution and agreement for the $5,000,000 the Commission “borrowed” from this fund for Roads – this is a precedent that concerns me greatly;
- in addition, I would remind the Commissioners that there is a significant difference in “economic impact” which already exists, like the Magic City Classic, and “economic development” which results in job creation and additional tax revenues, like Shipt;
- while I am not opposed to using “Economic Development Funds” to land a project like Amazon (where road improvements were critical), I am opposed to a single penny of this fund to be used for anything other than pure economic development – this is exactly what the last Commission represented to the citizens, the legislature, the rating agencies and the warrant holders in order to secure the one cent sales tax refunding;
• a detailed listing of the budget cuts [by department with descriptions and amounts] that were made by the commissioners during the budget hearings;
• a detailed listing of any transfers “out of” and “in to” Fund Balance year-to-date and in the proposed budget; and
• all cash amounts budgeted for contingencies and reserves in the proposed budget.
As a citizen of Jefferson County with “a lot of blood on the trail” to nurse the County back to financial health, I urge you to vote, “no” on the proposed budget and to “go back to the drawing board” to develop a fiscally disciplined budget that doesn’t tap the bottom of the waterfall for more than $15-$17 million for the General Fund. The remainder – or at least a minimum of $10 million, approximately 5% of this year’s General Fund budget – should be used to fund contingencies and build reserves. Otherwise, this Commission is beginning to move the County toward a “slippery slope” that could very well lead to a future bankruptcy.
It doesn’t have to be that way!
The economy is cyclical. The sales tax decline the County experienced late in the last decade will occur again. We just don’t know when. That’s why cash reserves are so important to an organization’s financial health and stability.
Which leads me to one final question, what’s the rush? The budget doesn’t have to be approved until September 30 – that’s almost 2 months away! There is plenty of time to get it right.
Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn