New Albany looking at $7.3 million no-frills budget for 20-21

New Albany officials are finishing up work on what looks like a $7.3 million budget for next year, based on revenue. There are almost no changes from last year.

The budget was to be presented at a public hearing during the September meeting of the board of aldermen Tuesday at 5:30 in the Magnolia Room.

The officials cautioned that this is still preliminary, although it is balanced and they are generally satisfied with it. Some changes could occur after Tuesday’s meeting of the board of aldermen, however.

The budget total represents just under a three-percent increase over last year’s budgeted revenue and is typical of what officials have tended to shoot for over the years.

Mayor Tim Kent said the budget is a bare bones version in part due to revenue lost to the pandemic and also that tax distribution did not grow as much as was projected when the budget was done.

This total is the general city budget only, which does not include the budget for the city’s two-percent tourism tax or for the city-owned light, gas and water department, which have their own separate budgets.

Despite three bad months for tourism revenue and reduced retail sales, the city’s financial status is not as bad as city officials feared.

To a large degree, the 2020-21 budget is a copy of the current year’s.

One noticeable exception to that may be that no new vehicles are included in the budget for next year. The city has already been under a spending freeze since late March.

Based on a quick initial reading of the budget, aldermen are still planning to give employees a three-percent salary increase as they have done most years for cost of living.

Officials are hopeful in that they are budgeting for 4.9 percent more in retail sales tax revenue than they did for last year, and 13.6 percent more than was actually forecast for the end of the 2019-2020 year. Sales tax is by far the single largest source of revenue for the city general fund.

The second-largest source of income to the general fund is the fee the light, gas and water department pays to the city in lieu of regular taxes, and that amount remains unchanged at slightly more than $1 million.

Expenses by department are generally in line with the past year, allowing for the three-percent salary increase and an increase in the cost of health insurance, which appears to be about 26 percent for many departments but higher for a couple. In legislative, more have picked up coverage and the street department is adding a couple of employees that will raise both the total for hourly salaries and insurance for that department.

Police, fire and park are among the larger budgets due to the number of personnel involved and they remained in line with the overall budget. The park budget was actually down slightly due to some soccer and outside labor costs that do not appear.

The only unique expense is likely the $25,550 added to pay for the municipal election coming next year.

There were some changes in the miscellaneous category, which showed $48,000 less in planned expenses for the coming year.

The allocation to Northeast Mississippi Community College was decreased from $14,000 to $4,000 reflecting the contract with the school. The allocation to the Union County Development Association dropped from $43,500 to $23,500 (the $20,000 removed had been paid to the Retail Strategies group for business recruitment but apparently produced no results lately). The UCDA has been largely dormant and is without a director. Also, the payment to Three Rivers Planning and Development District for services of an industrial recruiter increased from $40,000 to $45,000.

The elected legislative officials are included in raises although the aldermen only appeared to be getting about $34 a month more. At least one alderman was said to be not accepting the increase but that had not been verified with him. The mayor’s three-percent raise would bring his salary to $86,862.

The general budget deals with the necessary nuts and bolts of running a city government while the tourism tax provides for desirable but not necessary items that contribute to the quality of life in the community.

City officials are budgeting for $916,699 to come in from that two-percent tourism tax. That’s 8.6 percent more than was budgeted for the year ending now and 35.2 percent more than the $677,824 forecast to be actually received. That’s assuming continued recovery from revenue losses due to the pandemic.

The highest single expense paid by the tourism tax is $104,050 each year to pay for the loan to build the tennis complex. The facility also has $15,000 budgeted for maintenance and beautification in addition to about $30,000 for a director.

Budgets for other major tourism recipients including the Union County Heritage Museum, the Magnolia Civic Center, New Albany Main Street Association, and beautification efforts will be little changed or exactly the same as the past year.

The pandemic may still have further effects on the budget. For instance, $5,000 has been cut that was formerly allocated for the Union County Master Gardeners to hold the farmers market and $800 was cut for the home and garden show. The Master Gardeners ended their sponsorship and the garden show was not held.

Income from sports events, the spray park, community and civic center rental and other public events could still be affected as well over the next year. Some tourism tax recipients are not expected to be profitable in the first place, due to their nature, but concession, participation and other fees from the baseball and soccer fields as well as the spray park are budgeted to bring in about $200,000.

The budget may be approved or amended as a result of Tuesday’s meeting but  they will want to have it approved by Sept. 15.