ALBERTVILLE — Budgeting was the central topic of discussion during Tuesday’s mayoral candidate forum in Albertville.
Twelve-year incumbent, Mayor Tracy Honea, touted the City’s high credit rating and expanding tax base, while the challenger, Justin Ennis, a newcomer to politics, said he feared it was taking on too much debt.
“The one thing that really scares me is our debt,” Ennis said. “We have to have debt, I get it, to grow. It takes money to make money. It’s a little excessive now.”
Ennis stated that the City’s debt stands at $198 million, with a $321 million payback.
Alabama state law allows municipalities, such as Albertville, to borrow up to 20% of their assessed value for infrastructure projects and up to 50% for economic development. According to public data provided by the City, Albertville's current assessed value is approximately $360 million, which means the City could borrow up to $180 million for economic development projects, such as Sand Mountain Park and the new retail center under construction on U.S. Highway 431.
Of the City's $198 million debt, $160 million covers such projects, which is $20 million short of the limit. The $321 million payback refers to what would be owed at the end of the debt term if the entire amount, plus accrued interest, were paid back without any early payments or refinancing. The City currently spends $12.5 million annually paying down its total debt, of which $5.5 million comes from the 1-cent special sales tax increase started when the park was being built. The remaining $7 million goes directly toward economic development projects.
“Looks like in 2029, we’re fixing to start having to spit out a lot of money towards that, and we’re going to have to have our sales tax up high to do that. So this retail has to work. If it don’t, we’re in trouble,” Ennis said, referring to a new shopping center, which is expected to provide an additional $2 million toward projects on top of the $7 million.
The overall economic impact of Sand Mountain Park — including sales tax, lodging tax, retail, and job creation — was initially expected to be around $120 million annually. Albertville Economic Developer Mike Price said the actual number has been around $20 million per year, totaling $80 million from 2020 to 2024.
“Of course, that measures impact from consumer spending, jobs and new development and sales tax generated from these things, not necessarily actual revenue generated via the park itself,” he said.
According to an audit of the City's finances for fiscal year 2023, “The expenditures of the park still far outweighed the revenue generated, and the City does not anticipate to ever turn a significant profit on the park, however, the City does expect to have revenues of the park cover a significant portion of costs in subsequent years and require less funding from the general fund. It is noted that the park operational loss appears to be generating additional visitors to the City and remains a main driver for the City’s sales tax growth.”
Honea said he has tried to run the City like a “glorified household,” focusing on improving and maintaining Albertville’s credit rating and increasing revenue by expanding its tax base.
“As was described earlier, you can’t spend it if you don’t have it. So it’s vital, it’s important that we budget in a way that we can grow,” he said. “Sales tax has had to be a huge focus for this administration to enable us to get to a place in which we’re at now and hopefully to grow and take care of our people going forward, as we’ve tried to do the last several years."
He continued, “Yes, the City has debt. But throughout this administration, we’ve gone through four credit rating hikes… This administration has been very focused on trying to maintain our credit rating… We’re not going to get the credit rating hikes if we're mismanaging. The focus has been, and again, if you don’t have the tax base to do the things you need to do, I don’t know what the other options are.”
Before Honea took office, the City's credit rating was BBB+. It has since been upgraded four times by a third-party auditor to the current AA-rating.
Hosted by the Albertville Chamber of Commerce, the mayoral discussion followed a forum of city council candidates, of which all but one of the five incumbents are facing a challenger. The municipal election will be held on August 26.
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