Tracking cities’ financial healthPublished 3:27pm Thursday, March 15, 2012
The city of Chelsea weathered the 2007 economic downturn well, as new businesses moved into the city despite the sluggish economy.
“When the economy started going down, we commercially started going up,” Mayor Earl Niven said.
Walmart, Walgreens, Tractor Supply, Publix and other businesses built franchises in Chelsea during the past five years.
“Even with the downturn, every (city) employee got a raise, and no one got cut, laid off or hours reduced,” Niven said.
The 2011-2012 budget is more than $4.4 million, with sales tax bringing in about 76 percent of the city’s revenue. The remaining revenue comes from business licenses, franchise tax, building permits and other taxes. In 2005, the city issued 650 building permits, and only 65 in 2011, which is still up from the two previous years.
Niven said he sat down with his staff and asked them to cut back.
“If we don’t need to spend the money, let’s don’t do it,” he said. “Expense deals with wages. If you cut wages, you cut people. If you cut people, that affects a lot of lives.”
Niven said a few capital items have been delayed, including the building of a new senior adult community center.
From 2000 to 2010, Chelsea’s population grew from about 3,000 to more than 10,000 residents. Currently, Chelsea supports eight firemen and four Shelby County Sheriff’s deputies.
“If you don’t bring it in, don’t spend it. That’s my philosophy,” Niven said. “It’s why we’re in the black.”
The city of Columbiana is currently ahead of its projected revenue for the 2012 fiscal year. Columbiana makes 45 percent of its income off of sales taxes, ad valorem taxes and business licenses.
According to Mayor Allan Lowe, the city has had to reduce allotments to the Southeast Shelby Rescue, totaling $1,000 a month in cuts. The Beautification Board funds were cut in half and various funds for the Parks and Recreation Board were also cut this year. As a result of the economy, five years ago the city had to cut grant opportunities for the Parks and Recreation Board, and the city has also eliminated any pay increases and currently aren’t making new hires. Lowe said the city is working on “solely critical staff members and minimal crews to get the job done.”
According to Lowe, business license applications are up from last year, and sales tax is also higher than the previous year. Lowe said according to the year-to-date figures for the city, “We are very much in the black.” Columbiana currently has $550,000 in reserve operation funds.
“The city is significantly ahead of projected revenue amounts. If this trend continues I hope to present an amended budget to council in the March-April time frame that would increase current funding and the budget items that had to be cut for this year’s budget,” Lowe said.