The Jefferson County Commission passed a General Fund Budget for fiscal 2020 on Aug. 8 with Commissioners Joe Knight (R), Lashunda Scales (D) and Sheila Tyson (D) voting “yes” and Commissioners Jimmie Stephens (R) and Steve Ammons (R) voting “no.” Commissioners Scales, Tyson and Ammons are newcomers who didn’t experience the downsizing and bankruptcy.
To be blunt, the county’s proposed general fund budget appears to display an unconscionable lack of fiscal discipline, scarily similar to the historical root causes that led the last commission to file, what was at the time, the largest municipal bankruptcy in U.S. history. It clearly reflects a “spend today without considering tomorrow” attitude.
First and foremost, the $1.25 million Sewer Fee Assistance Fund violates Section 94 of the Alabama Constitution, which states “Municipalities [are] not to grant public money or lend credit to private persons or corporations. The legislature shall not have power to authorize any county, city, town, or other subdivision of this state to lend its credit, or to grant public money or [any] thing of value in aid of, or to any individual, association, or corporation whatsoever …”
To be legal, these monies need to be raised from the general public and distributed through a 501(c)3 corporation with eligibility set by the corporation’s independent board, not the county commissioners.
Second, the bottom of the waterfall (about $31 million) on the special one-cent sales tax is being misused. It was recognized and acknowledged that some $15 million to $17 million at the bottom of the waterfall each year would be used to fund ongoing operations, but the remainder was to be primarily used to fund cash reserves for 1) unanticipated capital equipment break-downs, and 2) to soften the blow of future economic downturns.
In addition to the unconstitutional Sewer Fee Assistance Fund, an additional $1,1 million in district “pork,” or should I say, in most cases, publicly provided re-election funds ($225,000 per commissioner) and $1,2 million for a new “Public Service Fund” are also coming out of the bottom of the waterfall. This new fund includes 1) items that should be funded out of each commissioner’s $225,000 district funds; 2) items that shouldn’t be funded at all (like the $250,000 to the transit authority on top of the additional $2 million they are already receiving from the special one-cent sales tax proceeds); and 3) items that should be included in General Fund operations.
Third, I discovered that $5 million — that was supposed to be used to recruit jobs — was “borrowed” from the Economic Development Fund and is not being repaid in the new budget. This decision clearly indicates inadequate cash reserves and opens the county to possible misuse of funds litigation by the public, the legislators and/or the creditors.
As a citizen of Jefferson County with a lot of blood on the trail, to nurse the county back to financial health, I urged the commissioners to vote “no” on the proposed budget and to go back to the drawing board to develop a fiscally disciplined one that allocates a minimum of $10 million — about 5% of this year’s General Fund budget — to fund cash reserves. All organizations experience unanticipated equipment break-downs and the economy is cyclical. The sales tax decline the county experienced late in the last decade will occur again. We just don’t know when. That’s why cash reserves are so important to an organization’s financial health and stability.
Unfortunately, my pleas, as well as the pleas of Commissioners Stephens and Ammons to delay the vote — due to a lack of transparency, the rush to approve a budget with still unanswered questions, an admission by Finance Chairman Knight that he didn’t understand where some of the expenditures in the budget came from, and an opinion by the county attorney that the budget would need to be amended due to a lack of committee action — fell on deaf ears.
Unless checked, this rushed action by the fiscally undisciplined majority of the Jefferson County Commission has initiated a slippery slope that could very well lead to a future bankruptcy.
It doesn’t have to be this way. There is still time to get it right with a revised budget. A final budget doesn’t have to be approved by the commission until Sept. 30.
Carrington was president of the county commission and chairman of the Finance Committee when Jefferson County filed for Chapter 9 bankruptcy on Nov. 9, 2011. An appeal of the county’s bankruptcy plan of adjustment was dismissed by the 11th Circuit Court of Appeals on Aug. 16, 2018. Carrington stepped down as a commissioner in November 2018 after eight years in office.
