Tracking cities’ financial health, part 2

PELHAM

Like many cities across the nation, Pelham took a major hit in its revenue streams when America’s economy took a nosedive in 2007.

The decline in commercial and residential building and the “almost immediate” economic crash in 2007 have caused the city’s revenue stream to shrink by about $3.5 million over the past several years, Pelham Revenue Director Mike Morgan said.

“It always takes it longer to come back than it did to crash,” Morgan said of the economy. “But we have seen an upturn over the last year. A lot of the businesses that were hit hard (in 2007) were the smaller mom-and-pop businesses, and we are seeing some of them start to come back now.”

Each year, about 50 percent of Pelham’s revenue is made up of sales taxes. Gasoline taxes, business licenses, state and federal grants, property taxes and alcoholic beverage taxes combine to make up the majority of the other 50 percent, said Pelham Finance Director Tom Seale.

In 2006, Pelham’s total revenues were about $45.8 million. In 2012, the city projected it would bring in about $43.8 in total revenues.

The revenue decline came during a time when utility, fuel, employee salary and benefits and repair and maintenance costs rose, which contributed to the city’s expenses rising from about $37.3 million in 2006 to a projected $42.6 million in 2012.

Seale said the city has been able to keep up with the decrease in revenues over the past few years by working with department heads to budget only necessary expenses.

“We’ve always watched the money we’ve spent. We just have to watch it a little more closely now,” Seale said.