Tuscaloosa Finance Committee Meeting - September 16, 2025

The Finance Committee met on September 16, 2025, to approve routine disbursements and resolutions, discuss a proposed budget addendum for a one-time health insurance stipend for city employees, and review budget proposals for Elevate capital projects, the airport, and municipal court.

Consent Calendar

• Minutes Approval: Minutes from the previous meeting were adopted by voice vote.
• District 6 Improvement Fund Disbursement: $1,000 approved for the Crossroads Angel Tree Program, which provides Christmas gifts for children of incarcerated parents.
• Police and Fire Supplemental Pension Insurance Renewal: Resolution authorizing binding coverage and premium payment for FY26 (corrected from FY25 in the materials) at a premium of $5,712, unchanged from last year. Approved by voice vote.
• Appalachian Regional Commission (ARC) Grant for Saban Center: Authorization to reapply for a $1 million grant (50/50 match) for educational classrooms and labs. The city's match is already budgeted. The previous application was denied due to insufficient focus on the specific space. Approved by voice vote.
• Agency Funding Agreement with PARA: $246,350 from the tourism capital fund for the Tuscaloosa Parks Lighting Project, with the contingency balance in that fund projected at about $420,000 by year-end. Approved by voice vote.

Discussion Items

• Health Insurance Stipend Addendum: The mayor presented a proposal for a one-time supplemental pay to offset the impact of the 8.3% health insurance increase. Approximately 146 senior-ranked police and fire employees (topped out in grade) faced a net pay reduction; the stipend addresses this across all employees. Non-public safety employees (e.g., crew workers, custodians) would receive $250; public safety employees $500. The total cost is $425,000 for the general fund and $50,000 for the water and sewer fund, reducing general fund contingency to $712,000. The stipend would be issued as a lump sum around Christmas, treated as regular wages (taxable). Staff noted that future occurrences are unlikely due to the upcoming RSA pension conversion (employee contribution drop from 13% to 8.5%) and expected retirements. The addendum is intended to be included in the final budget resolution at the next council meeting.
• Elevate Budget Overview: Total Elevate revenues for FY26 are projected at $37.6 million ($27 million from the one-cent sales tax, $4.3 million from Saban Center capital campaign, $6.2 million carryforward). After the $5 million environmental service fee transfer, net revenue is $32 million. Major expenditures include public safety set-aside ($7 million), operations and maintenance set-aside ($3.3 million), debt service on prior bonds (~$9 million), and agency funding (~$1.8 million for transit, dual enrollment, pre-K, summer learning, Athletic Excellence Fund). Contingency is $5.2 million. Upcoming projects include Freeman Park and Pool ($250,000), University Boulevard corridor, Greensboro Avenue (100% design, construction planned after UA graduation in May 2026), and MLK Phase III (near bid, funded via bond). Funding for NOAA's Arc 2.0 projects is anticipated via line of credit (1-1.5 months to execute) or bond issuance. The committee discussed the need to sequence financing for several large projects in FY26.
• Airport Budget: The airport's general fund operating budget is $1.029 million, with current revenues of $550,000 (hangar leases, fees) offsetting the subsidy. The subsidy has been reduced by approximately 17% annually over the last four years. A rent study recommends updates to fees and leases that could generate an additional $300,000, but negotiations (especially with FBOs controlling 70% of leased acreage) remain a challenge. Goal is to become fully self-sustaining; the council must decide on the aggressiveness of cost recovery.
• Municipal Court Budget: Operating budget is level-funded at $1.5 million, mostly salaries and benefits. A new court referral program (alternative sentencing) has been brought in-house, with two new staff hired. The court is self-sustaining from fines and court costs, though most collection fees are remitted to the state (including approximately $300,000 annually to the district attorney's office). No major challenges noted.

Key Outcomes

• All consent calendar items approved unanimously by voice vote.
• The health insurance stipend addendum will be presented to the full council as part of the FY26 budget resolution at the next council meeting (week of September 22).
• The finance committee plans to pass forward its version of the mayor's budget recommendation at next week's meeting.
• Staff will provide a breakdown of state allocations from municipal court revenues to the committee.
• Motion to adjourn was seconded and passed.