Stimulus checks, and even the inflation spurred by that infusion of money, ultimately has been good news for the city of Gadsden, which reported a rise in sales tax revenues last month.
Gadsden Financial Manager Lisa Rosser shared the city’s financial statements for May at Tuesday’s city council meeting, noting that the city is “not unique” in reporting higher revenues. “Undoubtedly, sales tax throughout the state of Alabama is up,” she said, “and we are seeing that in our city.”
The increase over the same period last year, when businesses were closed during the COVID-19 pandemic, was hardly surprising. But Rosser said last month’s revenues were also up over May 2019.
For May 2019, the city reported $1.6 million in sales tax revenue; Rosser said the city last month saw a $200,000 increase vs. two years prior, reporting $1.8 million in sales tax revenue.
“The difference is stimulus checks,” Rosser explained, “There’s no doubt that money is being spent in the city of Gadsden.”
However, Rosser said that occupational tax revenue for the city is still down, which she believes is caused by unemployment rates. “That’s going to change, and it’s going to change soon,” she said, “Because as of today, there is no additional unemployment for the state of Alabama.”
Rosser said business license revenue has had a “huge loss,” but she expects next year will be way up as sales revenue has risen. Recreational services benefited from an increase in the number of events being hosted, “closing the gap” with the money lost in occupational tax and business licenses.
Robert Avery made a citizen’s request at the meeting on the American Rescue Plan, asking that the communities he is a part of be represented when the city chooses what they do with the money they receive. He also offered his help in deciphering the American Rescue Plan with Rosser.
“I have no doubt that the city will handle the money correctly,” Avery said.
Rosser said the city has received about half of the $24 million it was expecting from the American Rescue Plan.
Councilmember Thomas Worthy asked Rosser if she was also working with the Gadsden Board of Education on their bond, which Worthy says could save the city $1 million. Rosser said there were no plans to work on it at this time, as her energy is focused on the grant for the American Rescue Plan and that the bond “was not important” to her.
“Saving a million dollars on the life of a loan isn’t important to you? We could use that as well as the Board of Education,” Worthy said.
“There’s a lot of effort that has gone into this, and this is something we are not taking lightly.” Rosser said, “We are working very diligently on that.”
Councilmember Ben Reed also asked Rosser about the bonds, saying he was under the impression that the schools were handling that issue. Rosser said that the intent was for them to handle the bond themselves, but the most recent correspondence was “totally opposite of that” because they believed that the city could get a better rate than the Board of Education.
“The reason that there is some hesitancy on that is because it is not clear if we can move ourselves off of the obligation,” said Councilmember Deverick Williams, “There’s been some hefty discussion with our bond attorneys and other people who are able to provide us some technical assistance on that.”
Rosser also explained that the city is finding it “very difficult” to find personnel, as the wage level has gone up. She said about 70% of the city’s budget goes to paying wages and salaries for the city employees.
“Yes, we know that we have personnel issues, but you can’t solve those issues overnight,” she said, “But you also need to know that we are gonna have a very difficult time competing for people because places like McDonald’s are paying $14 to $15 dollars an hour.”
Rosser said that this is because they can afford to pay those “high wages,” but they do not have the same level of benefits that the city offers, which Rosser said she was “thrilled” to have, but also knows that because half of the personnel package is in benefits, it leaves them tied down as far as how much they can pay in wages.
Councilmember Johnny Cannon brought up a story about a city employee not being able to retire because he could not afford health insurance, but his check would not cover it, either.
“I think, in my heart, we need to pay people enough to where they can live and get by on,” Cannon said, “We just don’t know how to come across getting it right now. There’s gotta be some way, somehow, that we can give a decent raise to these people.”
“I’ll be the first to say our wages are really low,” Rosser said, “Insurance is going up, and retirement is going up because we chose to give Tier 2 employees Tier 1 benefits.”
She did say that compared to May of last year and May of this year, city employees have gone up from 31 to 180 with the rehiring of seasonal and part-time employees. She said that a lot of departments “cannot survive” without these employees.
However, even with this increase, Rosser said many city departments, including hers, were still short-staffed. This is especially true in the terms of public works and first responders, as Fire Chief Mike Reed reported that he had to close three engines down on Monday because of the lack of employees.
“I can order people to stay over, but getting them to stay long enough is the issue,” he said, “They can make more money doing something else instead of working over at the fire department.”