Fairhope tax revenue, expenses up in first half of fiscal year


FAIRHOPE – Despite economic setbacks from COVID-19 and hurricanes, Fairhope tax revenue for the first half of the fiscal year increased from the same period last year, Kim Creech, city treasurer, said.

Creech presented a financial update to the Fairhope City Council on Monday, May 10. The fiscal year began Oct. 1, 2020.

She said tax revenue for the first half of the year was about $11.49 million an increase of 9.2 percent from the $10.53 million collected the year before.

Part of the growth was a significant increase in sales tax revenue despite pandemic restrictions, Creech said.

“Our sales tax is very strong at 12 percent compared to last year and you have to realize that the time period that we’re looking at a snapshot is before everything started shutting down for COVID, so we’re really looking at some strong numbers in sales tax,” Creech said.

Property taxes were up 6.4 percent, from about $5.57 million to almost $5.93 million.

“Just looking around Fairhope, you will see more houses than you might have seen two years back. You probably would have seen a pecan field and now you see houses and subdivisions,” Creech told council members.

Internet taxes, the simplified sellers use tax, jumped 48 percent. “Last year, the law changed where Amazon, as marketplace facilitator, now has to collect tax on everything that runs through Amazon,” Creech said.

Lodging taxes brought in less money in the current year. Lodging tax revenue dropped 12.5 percent as travel decreased during the pandemic. She said the city calculated a drop in lodging tax revenue in the budget.

At the end of six months, the city’s general fund balance was at $13.5 million, down about $2 million from the same time a year ago. Creech said much of that loss is due to federal disaster reimbursements from Hurricane Sally, which have not yet come in.

“We are making headway with FEMA I’ve got right now almost $400,000 that’s in the pipes to be paid any day now,” Creech said. “I can see it out there on the state’s website, so that’s coming through.”

She said general fund revenue is down by $816,293 from the year before. Part of that change is that a $716,000 transfer from utilities was not recorded until April, after the reporting period for the first six months.

Creech said the city also transferred $884,000 from impact fees to the general fund last year to pay for a recreation center site at Baldwin County 13 and Baldwin County 32, which increased income last year.

Expenses were up from $16.67 million to $24.7 million. Creech said one reason for the increase was that the city spent $9.3 million in debris cleanup for debris cleanup from Hurricane Sally.

Revenue in some utility departments was up, but garbage collections continued to lose money, she said.

The Sanitation Department lost $326,599 in the first half of this fiscal year. In the same time the year before, the loss was $322,862. Revenue was $1,019,474 so far this year. Last year, the total was $1,015,873. Expenses were $1,346,074 in the current year. In the same time the previous year, expenses were $1,338,735.

Creech said an increase in garbage collection rates should increase revenue in the department.

“Y’all increased the rates April 1, so at least we’re very close to where we were last year of having a loss,” Creech told council members. “The new rates will be coming in in April, so we should start seeing improvements in the sanitation.”

Gas earnings increased $471,000 from $1.44 million to $2.2 million. Revenue went from $4.43 million to $5.2 million.

In the Electric Department, revenue dropped from $9.56 million last year to $8.17 million in the current year. Electric earnings after expenses were $1.37 million, down from $2.99 million last year.

In the Water Department, earnings increased to $2.02 million, up from $1.74 million, Creech said. Water revenue was $3.93 million, an increase from $3.89 million last year.

Sewer revenue was $3.93 million, an increase from $2.49 million in the first half of last year. Earnings rose from $193,048 to $310,671.