Welch: city is in ‘great shape’ despite a crazy year

The city of Mountain Brook “is in great shape, despite the craziest year in its history,” Mayor Stewart Welch III said recently, referring in part to the economic effects of the COVID-19 pandemic.

Welch credited the City Council with helping to pull the city through a really tough year.

The council members have shown “unwavering leadership,” he said

“There have been so many crazy decisions we had to make,” the mayor said. “I think we didn’t always agree 100%, but everybody backed everybody up, came to a consensus and made the very best decisions we could, and I think in the end those decisions were the right decisions.”

Welch made these comments Feb. 19 during the virtual State of the City event hosted by the Mountain Brook Chamber of Commerce. The purpose of the event was to update citizens on the city’s overall financial health and the status of various projects.

Welch also praised City Manager Sam Gaston and Finance Director and Assistant City Manager Steve Boone for their efforts in helping to handle the city’s finances.

“They’ve steered this ship in what have been incredibly turbulent waters,” he said.

The mayor also praised the city’s department heads, who he said “have rallied their team members” and “managed to keep this city running during COVID-19 in near flawless fashion.”

He mentioned Police Chief Ted Cook; Fire Chief Chris Mullins; Dana Hazen, Director of Planning, Building & Sustainability; Public Works Director Ronnie Vaughan; Shanda Williams, Superintendent of Parks and Recreation; and Lindsy Gardner, Director of the O’Neal Library.

Welch also thanked City Councilor Lloyd Shelton, a CPA who heads the city’s finance committee.

Shelton works very closely with Boone, who is “for sure the best finance director in the state and probably one of the best in the county,” Welch said.

All of these officials helped the city evade what could have been dire financial consequences caused by the pandemic, especially in the spring and summer of 2020.

“In 2020, when COVID hit, our first estimates were that we might end up with a deficit of $1 million or more,” Welch said.

However, the city ended up with revenue of $41.5 million and managed to end up with a surplus of about $700,000, he said.

Welch again credited the cost-saving efforts of the city’s department heads.

The business owners of Mountain Brook also deserve credit for the way the city has come through the pandemic, he said.

“The retailers and restaurant owners have done an incredible job of working through difficult circumstances,” he said. “They managed to maintain their businesses, and we’ve also had a recovery in the economy.”

The city also does not have any debt. “A lot of people don’t know that,” Welch said.

The only exception to that is the city’s unfunded pension liability of about $30 million, which has been a “big concern” for city officials, Welch said.

However, the city hired a consultant in 2020 to do a “deep dive” and look for a solution, Welch said, and he expresses optimism.

“We are convinced that the problem will resolve itself over the next 20 or 30 years,” Welch said.

Mountain Brook also expects a surplus in 2021, Welch said, which can also be attributed to Gaston, Boone and the department heads. “They are very tight with the money,” he said.

However, Mountain Brook does anticipate borrowing some money “for the first time in a long time,” Welch said.

It will be in the range of about $3 million to $5 million and will go to capital improvements.

“The focus will be on athletic fields and structures, something that has long been needed,” he said.

“The bottom line is that Mountain Brook remains the number one city in the state in terms of its finances,” Welch said. “We are in good shape now. We’re in good shape going forward.”

In his own presentation about the city’s finances, Shelton discussed how the budget looked in May — during the uncertain days of the COVID-19 lockdown — when he and Boone first looked at the city’s revenue.

Shelton said he and Boone looked at the projections, and “it was not pretty.”

However, Shelton said that — in addition to the cost-cutting efforts of the department heads — the “savior” for the city was the passage of the federal CARES act stimulus.

“It allowed the city to bill for our public safety labor costs, and we were able to get reimbursed for that, and that really enabled us to kind of stay the course,” he said.

The other “benefactor” was the revenue the city received from the state for online sales taxes.

“People were staying home and shopping online, so that has helped,” he said.

“We don’t anticipate any delays in other capital projects due to COVID,” Shelton said.

In its current budget, the city has about $11.5 million in capital improvements, including $2.5 million for sidewalks, about $2 million for bridge improvement and another $4 or $5 million for improvements to ball fields and other athletic facilities.

The finance committee is also looking at another $20 million to $25 million in possible capital improvements over the next five years, including new fire stations and other park improvements, Shelton said.

The committee is evaluating the possibility of issuing debt to do these projects.

“Money right now is cheap,” Shelton said. “Does that put us in a position to accelerate several capital projects that right now are in the birthing phase?”

Smith provided an update on the planned construction of the traffic roundabouts planned for Mountain Brook Village near the exit from U.S. 280. Work should begin in late 2022 or early 2023, following the completion of some sewer work by the county, she said.

Gerald Garner provided an update on the planned construction of new sidewalks in the city and discussed the importance of supporting local businesses.

The merchants in Mountain Brook “are still recovering from COVID,” Welch said. “It is important to shop local, eat local.”

The mayor noted that the Mountain Brook Merchant Relief Fund, which was established last spring, has been very successful.

He said that people can make donations to the fund at onemb.swell.gives or at the chamber website, mtnbrookchamber.org.

By the numbers

► The city ended 2020 with a revenue of $41.5 million and a surplus of about $700,000.

► The city has no debt, with the exception of the unfunded pension liability of about $30 million.

► The city anticipates borrowing money in the range of about $3 million to $5 million and will go to capital improvements, focusing on athletic fields and structures.

► The city’s 2021 budget has allocated $11.5 million in capital improvements, including:

○ $2.5 million for sidewalks

○ About $2 million for bridge improvement

○ $4 or $5 million for improvements to ball fields and other athletic facilities

► The finance committee is also looking at another $20 million to $25 million in possible capital improvements over the next five years, including new fire stations and other park improvements and is evaluating the possibility of issuing debt to do these projects.