Irondale mayor reports smaller FY25 surplus, large reserves and debt-management plans at midyear review

At a midyear budget presentation, the mayor of Irondale provided an update on the city’s audited FY24 numbers and proposed FY25 adjustments, saying those changes reduced the FY25 projected surplus to roughly $1 million while reserves remain well above the city’s policy minimum.

The mayor said audited FY24 revenue was about $37.5 million, expenses were roughly $30–31 million and the city posted a surplus of about $6 million. The FY25 budget originally projected roughly $36.0 million in revenue and $33.0 million in expenses, producing a projected surplus of about $3 million. The mayor said midyear adjustments have reduced projected FY25 revenue and increased expenses, trimming the surplus to about $1 million as of the presentation.

Why this matters: the adjustments change the city’s near-term spending flexibility and affect funding available for capital projects and reserves. The mayor emphasized that Irondale retains a sizable reserve balance and is pursuing options to manage outstanding debt.

The mayor described several specific revenue and expense changes that contributed to the reduced FY25 surplus. Noted revenue changes included lower ad valorem receipts (the mayor said the original projection of $4.0 million is now expected to be closer to $3.3 million) and a reduction tied to an occupational license fee cut of 0.25 percentage points, which the mayor said lowered that line by about $300,000. A business-license fee rollback was listed as a $450,000 reduction. On the positive side, the mayor said state grants for recycling and a sidewalk project increased state grant revenue by about $500,000, and federal grant funding for paving Grants Mill Road increased a federal grant line by about $460,000 (the mayor described a $700,000 paving grant with an 80/20 split).

Among top expense changes cited were a 4% cost-of-living adjustment for retirees (stated cost about $111,000), higher engineering services expense (+about $157,000) and added fire-department overtime (+about $133,000) tied to operating two ambulance transports instead of hiring additional personnel.

The mayor said the city’s unrestricted cash balance was $18,670,313.16 and restricted funds totaled $6,270,530.81. He described the city’s reserve policy as targeting 25% of projected expenditures and said the administration now intends to maintain a reserve of roughly 40% of projected expenditures; the mayor said the current reserve balance is about $15 million and includes an emergency stabilization fund of $728,000 that the council must authorize to use.

On debt, the mayor described a significant outstanding bond and water debt load and outlined several management approaches: no plans to incur new debt, seeking refunding opportunities where interest savings exceed thresholds (he cited a 2% interest-rate reduction rule of thumb), and working on a five-year strategic plan to improve cashflow and reduce short-term leases. The mayor discussed specific bond series under review (2014C and 2015 A/B/C were mentioned) and said underwriters have reviewed refunding prospects but no refunding opportunities exist at present.

The mayor said the administration will provide to the council and post to ClearGov month-to-date financial statements and the FY24 unaudited statements and budget adjustment documents that show the adjustments discussed; he said the council will consider an amended FY25 budget for adoption.

The mayor invited questions and reiterated that the city intends to avoid new debt, maintain robust reserves and pursue refunding only if economically favorable.

Ending: the mayor closed the session by noting the administration will circulate the detailed financial statements and budget adjustments for the council’s review and asked residents to contact the city clerk with further questions.