Gadsden officials present FY2026 budget; finance director projects 10% revenue growth since FY2022

GADSDEN CITY — Finance Director Brandon Phillips told the Gadsden City Council during a public hearing Sept. 9 that audited revenues have averaged about 10% annual growth since fiscal 2022 as the city finalizes its proposed fiscal year 2026 budgets.

The FY2026 ordinance presented at the hearing lists the following budgets: general fund, $80,947,000; special revenue funds, $9,961,869; debt service funds, $11,566,517; enterprise and internal service funds, $16,558,556; Capital Projects Fund, $9,540,930; and Capital Projects Fund 2, $8,338,045. The ordinance also adopts the city employee pay scale. Copies of the budget were made available in the finance and city clerk offices.

Phillips said the 10% growth figure is based on audited numbers. "When we say revenues have tracked and grown at 10%, that is not an estimate ... These are audited numbers right here," he said. He identified several revenue drivers for FY2026, including the anticipated economic impact of a planned Gadsden Athletic Center — estimated at $190,000,000 — new events at the falls area, bond-issue earnings during drawdown and new revenue projects such as Top Tracer and night golf at the municipal golf course.

Why it matters: the revenue growth, if sustained, allows the city to expand capital and operating investments while maintaining the pay plan and addressing personnel costs. Phillips told the council that, as of the July 25 reporting date, most departments were under budget and that the city is operating its first full year in new financial software (Tyler).

Key budget details and trade-offs

- Personnel: the proposed pay plan provides a 2% raise to employees with satisfactory evaluations and raises part-time wages from $11 to $12 per hour. Personnel costs now account for roughly 54% of the general fund budget, Phillips said, down from the roughly 70% level reported several years earlier. "That's a huge deal," he said.

- Cost increases: FY2026 personnel costs are projected to increase by about $2.3 million. Phillips attributed much of that increase to the scheduled 3.2% rise in the state retirement (RSA) rate and an approximately $800,000 increase in insurance costs.

- Fund balance and capital: Phillips noted an effort to reduce use of an "unassigned fund balance" that has previously been tapped for capital projects, such as City Hall, and said the city hopes to eliminate that reliance in coming budgets.

- Debt service: the city expects to finish paying several earlier obligations in 2025 and 2026 and is preparing for a new debt issuance tied to multiple capital projects. Phillips summarized that, after paying down current warrants, the new debt service will return the city to debt-service levels similar to FY2020–FY2021 once fully in place.

Council discussion and public comment

Council members praised the fiscal presentation and management. "To go from 70% to 54% [personnel] is just amazing," Councilman Back said, noting the importance of retaining employees while keeping personnel costs manageable. Councilman Wilson and others highlighted the municipal golf course's turnaround and the expected revenue contribution from new golf offerings.

Multiple members and several speakers from the public — including residents who identified themselves as city constituents — voiced support for the budget and thanked staff. No formal amendments were adopted during the hearing; the ordinance was presented for first reading and the council scheduled a final vote for the following week.

What’s next

This ordinance was presented for first reading on Sept. 9; the council will hold a vote at the next meeting. Council members asked staff for follow-up materials and Phillips offered to provide further detail on specific line items to individual council members.