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City treasurer reports midyear cash uptick, sales tax shifts and project borrowing
Summary
City Treasurer Kim Creech told the Fairhope City Council work session that cash balances are higher than last year largely because of borrowing for water and wastewater capital projects; sales tax is up modestly while simplified sellers use tax collections are growing faster.
City Treasurer Kim Creech gave a midyear financial review at the Fairhope City Council work session, reporting higher cash balances compared with the same period last year and explaining the primary drivers behind the change.
Creech said the main reason cash increased was borrowing for water and wastewater capital projects; those proceeds are reflected in current cash balances until projects spend the funds. She explained the city had taken loans and rollovers into utility funds to pay for planned capital work and that reimbursements for large invoices (often half‑million to million-dollar bills) can take about 90 days.
On taxes, Creech said overall sales tax collections were up roughly 3 percent for the six-month period while the city’s simplified sellers use tax was up 15.2 percent and expected to significantly exceed budget. She noted a statewide trend in which some purchases that historically generated local sales tax are moving into simplified sellers use-tax collections, which affects how revenue is allocated locally. "We're seeing the sales tax trend go down; simplified sellers use is going up," she said.
Creech and council members discussed how online delivery and app-based retail transactions can shift tax receipts away from local grocery and retail outlets, and she said lodging and permit revenues were also performing well. She pointed to a large "other" revenue line driven by utility admin and collections fees plus transfers and some state grants, and said about 46 percent of budgeted revenues remain to be collected for the fiscal year.
Creech also reviewed departmental expense rates (many near 50 percent of budget at midyear), utility fund capital rollovers and loan proceeds earmarked for projects, and salaries versus budget. She said projects such as cast-iron replacement and other utility improvements were underway and that some invoices and capital expenses are timing-sensitive.
Council members asked clarification questions about the timing of property-tax collections, sales-tax spikes in March and the composition of the "other" revenue category. No formal council action was taken during the review; Creech said detailed monthly financials will continue to be provided to the council.
