2007 Operating and Capital Budget

The city’s 2007 operating and capital budget was unanimously approved by City Council at its December 6 business session. The total 2007 appropriation for city operations is $30,671,531. Described below are some of the priorities and policies contained in the new budget.

The first budget priority, as in previous years, is to provide the financial resources for city staff to develop and provide efficient and high quality services for Montgomery’s residents, businesses and visitors. The second priority is to continue the prudent management of the city’s assets to maintain the city’s financial health. 

In addition, the key budget objectives are to support the city’s new five-year strategic plan’s initiatives and propose short and long-term policy discussions. For example, because of the city’s priority for showcase economic development projects, it committed to partner in the Vintage Club project via $15 million in tax increment financing (TIF). The budget impact of this one-time event is an increase in the appropriations of 84% over 2006. Revenues from the Vintage Club TIF district will be dedicated to pay the $15 million debt. The Vintage Club will be the site of the 2007 Home-A-Rama.

Another budget policy decision was to change the distribution formula for the earnings tax revenues. The previous formula sent 63.5% to the general fund; 21.5% to the capital improvement program (CIP); and 15% to the debt retirement fund. Since city debt is relatively low and since fund reserves are very healthy, its share is reduced to 8%. The remaining 7% is split between the general fund (67%) and the CIP (25%). The additional CIP funds will be used to maintain the city’s infrastructure assets.

The Council included funding to increase customer service levels in finance, parks and recreation. Before hiring, however, a proposal will be presented to the Council, for approval, describing how and where the positions will fit in the city. Another 2007 initiative is the hiring of a firm to assist with the “Promote Montgomery” campaign that comes from the strategic plan. Additional master planning work will be done on technology and right-of-way functions. 

In addition to the Vintage Club project, the Council approved the detailed five-year capital improvement program (CIP). This approach provides an excellent planning device for projecting future capital costs and identifying funding for future projects.

The 2007 – 2011 CIP includes funding for normal levels of capital equipment purchases and replacement, and capital projects. The capital projects include: