Finance staff tells Fairhope Council midyear revenues generally on track, water/waste projects drawing cash

City finance staff presented the FY26 midyear financial review, reporting cash at the end of March was lower year-over-year due largely to spending on water and sewer projects and noting an airport-related $5.6 million pass-through grant inflated revenue/expense totals.

"The total for this year or at March was 79,996 and then compared to last year at the same time was 85,101," Finance staff (Kim) said, summarizing cash on hand and explaining the roughly $5.3 million decrease was concentrated in the water and sewer funds. Kim pointed out sales tax year-to-date was up 1.8% and lodging tax was up 18.2%, the latter in part because short-term rental remittances are increasingly reported to cities.

Council members asked about a reported $700,000 decline in property-tax collections; Kim said the difference was a timing/collection issue from the revenue commission and that April reports brought collections closer to budget. Council also raised that dock revenues were down about 20% from 2025; Kim said fuel gallons sold were lower, affecting margins and receipts.

Kim told council the budget assumes borrowing to complete planned water and wastewater projects — roughly $25 million forecast for water and $22 million for wastewater — and that a large portion of the capital program remained unspent at midyear because projects are underway but invoices or construction completion were pending.

No formal policy actions were taken; council members asked staff for additional breakdowns by department and for more detail on the accounts classified as "other funds." Staff agreed to follow up with detailed lists and to return with any further analysis requested by council.