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Fairhope staff present conservative 2027 general fund revenue projections; rollovers and fund balance discussed
Summary
Finance staff presented the first 2027 general fund revenue estimates on July 27, including a projected property tax of $11,670,004.36, higher lodging tax receipts, a $2.6 million rollover estimate and discussion of a $1.5 million impact fee for a fire truck.
City staff presented the first pass at 2027 general fund revenue projections during the July 27 work session and explained the methodology and major revenue lines.
Kim told council she bases property tax estimates on county revenue commissioner numbers discounted to 97% as a conservative approach and presented a property tax projection of $11,670,004.36. She described sales tax and marketplace facilitator (SSUT/Amazon‑type) dynamics, noting SSUT collections were running about 12% above 2025 year‑to‑date; she recommended a conservative 5% annual growth assumption for that line. Kim also highlighted a lodging tax increase (running 17.7% year‑to‑date) and various smaller tax lines budgeted more conservatively.
Kim flagged a projected $2.6 million in budget rollovers from unfinished projects and cited an impact fee earmarked for a fire truck on order valued at about $1,500,000 that has been delayed for three years. She explained fund balance mechanics, saying that year‑end surpluses flow to fund balance and that staff aim for a balanced budget while recognizing rollovers can create temporary negative appearances without using prior fund balance for capital. Council members requested additional detail on realized vs. budgeted staffing costs and follow‑up materials Kim offered to consolidate.
