Finance committee approves fire gear insurance use, $7M water-and-sewer reserve, audits and insurance renewals

The Tuscaloosa City Finance Committee on Wednesday approved a bundle of budget revisions and contract actions, including using $63,000 in insurance proceeds from damaged fire turnout gear to buy a vehicle, moving $7 million into a water-and-sewer improvement reserve, renewing a contract for federal-grant audit work and selecting stop-loss insurance for the city’s employee health plan.

Committee members adopted the minutes and unanimously approved the items after brief presentations and questions. Chief Delk explained the fire-department insurance claim and equipment loss, saying, “This is actually turnout gear,” and that crews had lost 12 ruined sets that could not be cleaned. Committee members then approved a request to recognize up to $63,000 in insurance proceeds, move those funds into the department’s equipment line and use them to buy a replacement vehicle in the coming months.

The action to add $7,000,000 to a water-and-sewer escrow implements a 10-year plan the committee reviewed last week. City staff outlined the projects the reserve is intended to cover: Mercedes force main lift station, $1,200,000; Fletcher phase 3 improvements, $2,300,000; Hillcrest tank rehabilitation, $1,200,000; outfall line replacement, $1,700,000; sewer betterment at the airport runway, $400,000; and a raw-water main repair, $150,000. The staff presentation said the $7 million total is intended to sit on top of amounts already set aside from recent rate increases and to help fund upcoming debt service needs.

The committee also authorized a one-year contract with Warren Averett for required audit services tied to the city’s 02/2013 CDBG disaster-recovery grant (PO113-2). Miss Sanders said the original grant award was $43,000,000 and that the city must maintain this internal-audit contract until the federal closeout; the contract amount for the coming year is $25,000 and is paid from the grant.

On benefits, staff recommended renewing stop-loss coverage with Highmark for fiscal 2026. The presenter summarized current plan features: “We have a $300,000 deductible ... per individual” and an aggregate deductible of $125,000, and noted renewal options, per-contract counts and monthly-rate comparisons. The committee approved the recommendation to continue with Highmark under the option presented.

Members also approved a short-term extension of helicopter insurance after staff said the city is phasing out its helicopter unit, which is expected to be completed by Dec. 31. Mr. Holmes said the city secured a temporary policy extension through Jan. 1 at a cost of about $7,600 to bridge coverage while the unit sunsets; the last full-year policy ran about $52,400. The committee was told a resolution implementing the extension would be prepared for the next meeting.

Votes at a glance - General fund budget revision No. 15 (fire department insurance proceeds / equipment purchase): Motion to approve, adopted (unanimous). Request recognizes up to $63,000 in insurance proceeds to purchase a replacement vehicle; 12 sets of turnout gear were ruined and deemed unrepairable. - Water and sewer reserve for future improvements (budget revision No. 7): Motion to approve, adopted (unanimous). Adds $7,000,000 to a 10-year escrow to cover a set of identified projects totaling $7,000,000 (see body for line-item amounts). - Authorization to contract with Warren Averett (PO113-2) for audit services: Motion to approve, adopted (unanimous). One-year contract for $25,000 to satisfy audit requirements tied to the 02/2013 CDBG disaster-recovery grant (original award cited as $43,000,000). - Resolution to obtain stop-loss insurance coverage from Highmark for FY26: Motion to approve, adopted (unanimous). Committee approved staff-recommended option under Highmark; the plan’s current specific deductible is $300,000 per individual and $125,000 aggregate. - Helicopter insurance extension: Motion to approve, adopted (unanimous). Short-term extension through Jan. 1 to align with planned sunset of the helicopter unit on Dec. 31; extension cost ~ $7,600.

What committee members pressed on Committee members asked for clarity about the turnout-gear loss and the timing of the vehicle purchase (staff said purchase would happen in the next couple of months). On water and sewer, members were shown the line-item breakdown of the $7 million plan and staff explained how prior rate increases and projected debt service feed the escrow. On the audit contract, staff confirmed the grant pays for the work and that the audit requirement sunsets at federal closeout. On benefits, members asked about contract-basis changes, contract counts and monthly-rate differences across renewal options.

Next steps and implementation Staff said purchase orders and resolutions will be prepared as needed: the fire-department vehicle purchase is expected in coming months; the Warren Averett contract will proceed under grant funding; the Highmark renewal will be implemented for FY26; and a resolution to finalize the helicopter-insurance extension will be presented at the next committee meeting.