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By DONALD MOTTERN | Staff Writer

PELHAM – The Pelham City Council convened alongside numerous department heads and members of the public to debut the first in-depth look at its 2025 fiscal year budget at a specially scheduled City Council meeting on Wednesday, Sept. 4.

At the meeting, Pelham City Manager Gretchen DiFante, Pelham Finance Director Jamie Wagner and Andre Bittas, the director of development services and public works, spoke in depth on the new budget and also provided breakdowns of each of the city department’s finances while also highlighting ongoing and upcoming projects.

The details of their presentation, and more, were also compiled into a 91-page document for the public.

Despite price increases seen across the economy, DiFante pointed out that the city made great efforts to maintain city operations at similar costs to last year’s budget.

“This budget is based on keeping sales tax revenues flat with 2024,” DiFante said. “We have a reduction of just under one percent in city operations.”

The city’s budget also displays an 8.8 percent increase in the salary and wages for city employees, with major influencers on that metric being the recent adjustment to the city’s employee compensation plan and new salaries for Pelham’s ambulance service. The city also reports a 15.6 percent increase in the cost of benefits brought on by insurance premium increases and employees shifting to family-based plans.

“I can tell you that this move toward more family plans is a big number here,” DiFante said. “We’re really hiring people that have that five to 10 years of experience and those are employees who typically have young families.”

In terms of revenue, the city’s sales tax, property tax, business licenses and permit fees make up approximately 94 percent of the city general fund’s total revenue. In the 2024 budget, that amount equaled to a projected total of $62,662,656. For the proposed 2025 budget, that number has decreased by roughly one and half percent to $61,731,670.

With projected revenues surpassing $61.5 million, Pelham’s expenditure projections for 2025 are estimated to only reach $48,746,342.

“The city has multiple revenue sources to support operations and capital projects,” Wagner said. “Due to Alabama’s tax structure, sales and use tax is our largest revenue source at about 70 percent.”

Pelham’s second largest revenue source is property tax at 16 percent and business licensing and permits in third at nine percent. The city’s remaining revenues come from fines, forfeitures, service charges and interest income.

The city also maintains several business units that produce proprietary funds such as water and sewer services, garbage service, Ballantrae Golf Course and the Pelham Civic Complex. These services are primarily operated in a manner where their income is meant to cover the cost of the services provided.

While these services, with the addition of Pelham’s parks and recreation facilities, do not necessarily generate funds for the general fund directly, they are in fact responsible for a significant economic impact that does.

“Users at the facilities travel from outside the city of Pelham and spend money on things like gas, food and entertainment within the city of Pelham, thus supporting our local economy and therefore our general fund revenue,” Wagner said.

For this reason, some money from the general fund is allocated to these services in addition to basic services to supplement shortfalls in those services’ budgets.

“It was the Council’s express desire to keep garbage rates low,” Wagner said. “That is one reason why the general fund does supplement a part of those (particular) operations.”

After considering all operational costs, salaries and city debts, Pelham was described as having approximately $8 million available to assign for its annual budget. Had the city not taken on its recent increase in its sales tax, that number would have only been an approximated $2 million.

With those funds, the city made it a goal to prioritize projects with this year’s budget.

“The way that we prioritize them is that we base them on the criteria of safety, liability, completion of a project that is already started with funds put toward it, an existing commitment for funding and continuing an existing council commitment,” DiFante said.

The projects deducted from this $8 million include city wide paving in accordance with the city’s established paving plan, funds needed for grant matches, moneys required for the completion of the U.S. 31 widening project and the completion of the west parking lot at the Pelham Civic Complex and Ice Arena.

Additional rain gauges to better measure and study rainfall in the city are also among the projects included for this year’s budget that further include drainage improvements, ADA compliant sidewalks and extensions, traffic signal upgrades and replenishments to the city’s vehicle reserve funds among other initiatives.

Rescheduled due to the Labor Day holiday, Wednesday’s meeting followed nearly a full week of special council planning sessions that both discussed and reviewed each department’s specific needs and desires and how they could best be worked into this year’s budget.

“All of the department heads come before the council and they go over their budgets,” DiFante said. “The Council has the opportunity during those budget workshops to ask questions. The department heads (also) have the opportunity to share highlights and talk about their operations, which is something they are very proud of. They also have the opportunity to talk about concerns, challenges and anything they want to talk about and the Council wants to ask.”

Those workshop meetings were themselves preceded by weeks of in-depth discussion and work that highlighted necessary changes and desired outcomes across the city’s many departments.

“Each of the department heads meet with Jamie and myself,” DiFante said. “We go over what their needs are. If there is a department head that wants a new position—for instance­—they will fill out some pretty detailed information that requires them to provide data and show why they need that new position. They show what has increased, what they are doing more of and why. They show what alternatives they have tried before adding the new position and so on. We sit with them and have these conversations. It is (virtually) the same process for capital expenses.”

Throughout these meetings, DiFante also stipulated that the city approached this year’s budget with a set of guidelines set in place by the Council. Those guidelines included that the city not use any unencumbered funds, that the city be financially prepared for grant matches and that the competitiveness of Pelham’s employee compensation plan be ensured.

DiFante also stipulated that investments toward the city’s parks and green spaces were among their top priorities in the development of this year’s budget.

“The Council believed that the city had fallen behind in this area,” DiFante said. “We focused a lot on infrastructure, roads, water, sewer, fixing a lot of our buildings but we had not focused on our parks as much. That was one of our goals (to change that).”

The following is rough breakdown of the city’s expenditures and revenues based on the proposed 2025 budget:

Revenues totaling $61,731,670 include:

• Sales and other taxes: $44,505,888
• Property taxes: $10,238,186
• Licenses and permits: $5,433,300
• Other revenues: $2,276,680
• Service charges: $716,615

Expenditures totaling $48,746,342 as broken down by department include:

• City Manager: $542,906
• Mayor: $82,144
• City Council: $163,732
• Court: $903,765
• IT: $2,425,598
• Human resources: $2,085,208
• Finance: $946,508
• Economic development: $747,328
• Communications and branding: $542,095
• City clerk: $4,832,750
• Fire: $12,792,491
• Police: $12,920,537
• DSPW: $5,453,035
• Parks and recreation: 2,760,570
• Library: $1,547,675

Some examples of capital projects planned for 2025 and their costs include:

• Traffic signal upgrades: $550,000
• Rain gauges: $30,000
• Pelham resurfacing: $1,250,000
• Drainage improvements at Pelham City Park: $60,000
• Additional funds for U.S. 31 lighting – $1,100,000
• Pavilion construction: $100,000
• Senior Center outdoor improvements: $150,000
• Highway 52 widening/flyover project – additional funds: $2,500,000
• Grant matching: $1,000,000

“This budget represents a continued commitment of our city government to deliver superior services while striving toward excellence, efficiency and taxpayer value,” Wagner said. “Management works diligently to budget and report each fund according to principles set by the governmental accounting standards board. The budget incorporates historical trends, current economic information and legislation that may impact the budget.”

The proposed budget presentation can be viewed online at Pelhamalabama.gov/CivicAlerts.aspx?AID=1442.

The full proposed budget for 2025 can be viewed online at Pelhamalabama.gov/178/Finance-Department.