But the 2012 fiscal year is looking up. Through the first three months of Alabaster’s current fiscal year, the city’s sales and use tax revenues were up by about 5 percent.

Although the city recently passed a 1-cent sales tax increase, the money generated by the extra cent goes into a separate city education fund and is not factored into the general fund revenue, Henry said.

“It looks like the momentum is coming back in the economy,” Alabaster Mayor David Frings said. “We are proposing some capital projects, like the new City Hall and the addition to the library. We wouldn’t be able to do that if we weren’t seeing the economy come back.”

CALERA

Five years ago, Calera’s housing market was booming, with about 50 new housing subdivisions under construction or planned.

Today, with the drop off in building permits and new construction, the city officials are trying to eliminate reliance on new construction for revenue, according to Finance Director Roy Hadaway.

In 2011, Calera had 107 houses begin construction.

“The housing market is still depressed as far as I’m concerned,” Hadaway said. “We’ve had as many or more houses started than other cities in the county.”

In 2007, “the year the downturn started,” Hadaway said, the city was running off reserves. In 2009, the city used some of its reserves, due to reduced revenues, to meet operating expenses as well as debt payments for infrastructure improvements during the housing boom.

“To cover the infrastructure of the housing boom, they took out bonds, and the debt loan was significant compared to other cities,” he said. “We were having to borrow money to operate, but now we have money in the bank.”

The city laid off a “significant” amount of city employees in 2008, about 22 people, Hadaway said.

“We haven’t laid off personnel since then,” Hadaway said. “We have filled slots back, with five to six employees pulled back.

“The department heads were aware of what they could spend, but not aware of what the city was taking in. They were not aware of both sides of the picture,” he added. “Now they’re aware of the revenue side, and more aware of what they can do to save money.”

In addition to housing, sales tax revenue equals about 53 percent of the general fund budget, averaging about $470,000 per month. The city’s budget is a little more than $17.7 million.

“We’ll adjust after the first quarter to have numbers more in line. We’re required to have a balanced budget,” Hadaway said. “It’s a living organism, and unexpected things happen.”