City finance director previews FY2026 general fund revenue lines; sales and property tax growth cited

City finance staff presented a first look at FY2026 general fund revenue projections, citing conservative growth assumptions for ad valorem (property) taxes, sales taxes and the simplified seller's use tax (SSUT), and identified line items still pending final numbers. The finance director said ad valorem tax estimates come from the Baldwin County Revenue Commissioner and that staff budget conservatively at 96% of the commissioner's numbers to allow for adjustments. The presentation showed an ad valorem projection of roughly $10 million and a modest increase in automobile and sales tax lines. On sales tax, staff used a methodology that grooms 2024 actuals forward by a conservative 3% per year (6% to 2026) with commentary that sales tax through the current year is running approximately 4.2% and that simplified sellers use tax (online sales collections) is trending higher; SSUT was budgeted at a higher growth rate given statewide adoption trends. The director noted building-permit revenue is being held flat for budget conservatism although permit volumes can swing. Council members asked several clarifying questions including whether specific small fees such as dog tags were worth tracking, the mechanics of marina fuel revenue (revenue tracks with fuel price and gallons sold), and the timing of certain lease increases (University of South Alabama rent). Staff said some items remain to be finalized, such as utility transfer/franchise fees and impact fee calculations based on eligible projects. The director characterized the presentation as the first in a series of budget meetings and asked councilors to follow up with questions or requests for detail outside the work session. No budget ordinance or appropriation was adopted at the meeting; the session served as a briefing on revenue assumptions and items that still need final numbers.