Mobile City Council Work Session on Proposed FY 2026 Budget - September 2, 2025
Mobile City Council Work Session on Proposed FY 2026 Budget - September 2, 2025
On September 2, 2025, the Mobile City Council held a work session to review the proposed Fiscal Year 2026 budget, presented by Finance Director Scott Collins. The budget totals $416 million in both revenues and expenditures, with a planned $29.99 million transfer from the general fund operating balance (projected at $102 million on October 1, 2025) to achieve balance. The presentation covered revenue projections, departmental reorganizations, new initiatives, and capital improvements. Council members asked extensive questions about funding for vehicles, stormwater, capital project management, and long-term financial sustainability.
Discussion Items
Budget Overview
- The FY 2026 budget is built on a level‐funded revenue assumption, consolidated convention center operations (now managed by OVG) into the general fund, and transitions from cost centers to department/division budgets.
- Total revenues and expenses are each $416 million. The budget relies on a $29.99 million transfer from the general fund operating balance; Collins noted actual spending typically runs about $23 million below budget, leaving an estimated $72 million operating balance at September 30, 2026.
- The city’s reserve fund ($64.46 million) and employee health insurance reserve ($9 million) remain unchanged.
Personnel and Public Safety
- 24 new police officer positions and 9 new certified firefighter positions are budgeted.
- $1.4 million in new funding for cameras and a video management system is included in public safety administration ($1 million non‑recurring, $400,000 recurring).
- Additional $825,000 in unclassified expenditures is available for public safety if a COPS grant is not received.
Stormwater Department
- A new stormwater division is created under public services, with $5 million operating budget (including $1.08 million transferred from ditch maintenance and $1 million for a comprehensive drainage system study; remaining ~$4 million for operational ditch clearing and maintenance).
- A stormwater manager position is being hired (deputy level), and the department will focus on maintenance, not major engineering projects.
Last Year of Police/Fire Pension Payment
- FY 2026 is the final year for the $16 million unfunded liability payment to the police and fire pension fund. This will free up about $15 million in recurring savings in FY 2027.
Vehicle Purchasing Process
- The former motor pool enterprise fund is dissolved; vehicle purchases are now budgeted in departmental budgets and funded from business license revenue cash flow rather than monthly accrual.
- Most passenger vehicle purchases for FY 2026 were already made in FY 2025 to take advantage of ordering windows. Council members expressed concern about maintaining dedicated long‑term funding for vehicle replacement; Collins and Mayor assured that a capital holding account will carry unspent vehicle funds forward and that large purchases (e.g., fire trucks) will continue to use sinking funds.
Capital Improvements Fund
- Capital fund revenues: 20% of sales tax (one cent), lodging tax, five‑cent gasoline tax, seven‑cent fuel tax (total $1.175 million for pothole repair), and a $20.995 million transfer from the general fund (consolidating previous pass‑throughs).
- Expenditures: $53.6 million for capital projects (including $4 million district capital, $8 million citywide, and debt service reduction from $21.2 million to $15.7 million due to arena debt retirement).
- A new capital projects review committee will meet monthly starting January 2026, using e‑Builder software to improve project tracking and reporting. A 36‑month activity clock under the Zombie Act requires timely action on capital projects.
Additional Items
- $2.4 million budgeted for OVG arena startup costs (contractual obligation of $3 million through January 2027).
- $150,000 for ADA transition plan to maintain federal grant eligibility.
- EMS budget includes $900,000 for basic life support (BLS) service contracts; a bid is in progress.
- Athletic field fees ($66,000) reclassified from other fees; day camp fees increased due to higher participation.
- IT costs for MIT increased $700,000, driven by moving software from capital to operating budgets.
- $200,000 for USA Health cancer treatment center (replaces prior Battleship funding).
- Economic development incentive line increased by $1.5 million for pending negotiations (no earmarked projects yet).
Key Outcomes
- The council will hold a public hearing on the budget at the regular council meeting on the following week (September 9, 2025) and vote on September 16, 2025.
- Council members requested that the capital projects review committee include their assistants for better coordination.
- No amendments were proposed during the work session; council members were encouraged to submit any changes to the finance director before the public hearing.
Meeting Transcript
Proposed fiscal year 2026 budget. And we're going to handle this is uh the flex director, Mr. Collins. He'll make some uh overall comments and then we'll open it up to questions from the city council. We'll begin with the members of the finance committee and then we'll go around the table. Uh I'd like to ask everybody, all the members of the city council, uh, as we go through this, if you find if if there are if if at the end of the day, you conclude that you might think some changes to the budget are necessary or desirable. Please go ahead and get with Mr. Carbo. Uh, or well, first of all, discuss them with Mr. Collins. And then if you still think that's the case, get with Mr. Carbo to draw up uh a the proposed amendments to the budget, remembering that we cannot add any income. So you're if you're going to if you're gonna add something to the budget, you gotta if you come up with a resolution to change the budget, you gotta just gotta even out. If you're gonna add or subtract revenues, then you gotta add or subtract expenses to match. Hopefully, we will have none of these, and everybody will be absolutely delighted with the budget that's been presented to us. But we'll see. So we'll start out with Mr. Collins. Thank you, Mr. Collins. Yes, sir. So thank you, and thank you guys for taking time to do this. This um the 2026 budget is a little different than what we've done over the last couple of years. Uh, rather than just kind of look at this from a math problem, how do we balance it? We started out with going back and looking at the last couple of years, specifically 24 and 25 to look at actual revenues and actual expenditures to kind of go back and see what the future looks like. Obviously, we've had some questions about being level funded for revenue for the year, so we knew that that was gonna be a bit of a challenge. So we started there. There were also some just simple requested additions to the budget, additional staffing. We knew that um there were some other costs that were coming through, so we wanted to be mindful of what those were. We've made an effort to to address those to the extent that we can. We also worked at combining um some areas, some of our revenue. We'll get into convention center and how that looks different, capital and how that looks different. Um, but this the budget that you have is um just simply a synopsis of all of that work. Um, you will you will in just a moment have handouts for for the slides that we're about to go over. And at any time, if you have any question about any of this, please let me know. We'll work through. So uh with that, we'll we'll start right on in. Um, so for 20 20 FY 2026, the budget is comprised of the general fund, capital improvements and the enterprise funds supported by the general fund. In years past, there's been a convention center fund in addition to this with OVG coming on board. The convention center operations are done by contract. So in years past, the convention center budget that you saw was primarily pass-through money. Um, you would look at a convention center budget and it would show sales tax, it would show lodging taxes and other things, but the convention center itself did not generate those revenues. Those were monies that were applied to the convention center and then moved back to the general fund operating account or the capital account. Um, with the change and how OVG has come in and they're gonna be running the convention center in a different format. We simply condensed those funds, everything that would have been operational in the convention center has now been incorporated into the general fund. Um, as an example, you would have seen a line item last year that said convention center sales tax. That was simply an allocation of sales taxes that went to the convention center is passed through for a standalone budget. That standalone budget has simply been removed and everything has been incorporated back into the general fund. Uh the general fund budget summary itself, uh as you see here. Um there are some increases to some departments.
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