Northport Leaders Tout Progress On Reserves, City's Financial Stability

NORTHPORT, AL — The Northport City Council during its regular meeting Monday will vote on several measures that officials believe underscore the city's financial stability and progress made toward boosting its reserves in recent years.

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Perhaps the most impactful move will see city leaders vote for a $1 million allocation of Northport First Funds to the city's General Fund reserves — an amount that will see its reserves rise to 15%.

Northport First Funds are collected as the revenue from the city's 1-cent sales tax. This is notable given past financial turbulence for City Hall and the suggestion by the city's bond rating agency to make it a priority to boost reserves to 15% for both its General Fund and the Water and Sewer fund.

The 1-cent sales tax, while initially received with skepticism by some, has proven quite successful, with the city collecting more than $19 million over the last three years. The revenue has been used for everything from educational grants to paving projects, standing out as a major source of pride for elected officials looking to make a tangible impact in their districts.

Northport's reserve funds can, at least on paper, also be compared to the City of Tuscaloosa, which reported being at 20% of the prior year's General Fund operating budget and 30% for Water and Sewer. Still, the improvement for Northport stands in stark contrast to the economic tumult and uncertainty experienced by the city prior to the current city council.

It also represents an example of the positive population growth experienced in recent years, with Patch previously reporting when Northport became Alabama's 17th largest city in the data published following the 2020 census.

City Finance Director Darren McGee told Patch that the city's current financial state and improving reserves were made possible through conservative management, along with a local economy that is growing and a commitment to a robust reserve fund.

"It shows that city leadership is committed to conservative fiscal management practices and that approach is paying dividends for the city," he said. "Strong finances along with the conservative fiscal approach has allowed the city to not only provide top quality, expanding services for residents but accumulate strong reserve balances for future needs."

City Council President Jeff Hogg agreed, saying the past few years of adhering to the city's budgets and projecting future expenditures has allowed the city to set itself up to be able to capitalize on these measures for numerous large projects — among these are three new major recreational projects that aim to add a water park, adventure sports park and large-scale upgrades to Kentuck Park.

ALSO READ: Northport Takes Big Steps On Three Major Recreational Projects

"This confirms that the residents of Northport are in good hands with their leadership and have set the standard of what a City should be like," Hogg said.

The City Council will also consider a capital projects budget of $2,715,000 for Water & Sewer, along with a $5,753,732 capital projects budget for its General Fund.

Another measure that will be considered that underscores the city's focus on whittling down debt will be a $825,000 allocation to pay off an interfund loan to the city's Water & Sewer Fund after the city in 2016 borrowed money from the Water & Sewer Fund to cover the city's General Fund.

Hogg said this would pay back the loan in full after a previous timing issue prompted the interfund loan as the city changed to a fiscal year schedule as opposed to a calendar year.

McGee went on to say that growing the city's reserve balances, along with a strong and growing local economy, are positive characteristics for a city that are viewed favorably by rating agencies, which is a positive sign as the city has numerous large-scale projects in the works.

"These are some of the items included in consideration for retaining or improving our bond rating," he said. "The higher or better a bond rating, the lower the borrowing costs."

When looking at the city's rapid population and expanding tax base, McGee said that Northport has proven an attractive place to live.

"Low crime rates, good roads, inviting residential developments and neighborhoods, employment opportunities, improving recreational facilities and other strong quality of life areas are all positives and reasons for people to choose Northport as their place to live and work," he said. "Efficient and conservative management of city resources, strong leadership, excellent staff, ongoing public involvement in decision making are all some of the reasons Northport is thriving."

But while McGee was quick to tout the city's strong finances and its ability to provide the needed services to residents, he explained that there are still needs that must be met.

"Most [needs] are related to growth and are therefore positive challenges," he said. "We have decisions to make related to how and where we can and should grow and how we accomplish that task. We have infrastructure needs that will need to be addressed as well as additional quality of life additions. City leadership is aware of our needs and is currently working on plans to address those items and more."

As the Northport City Council looks ahead to the future and the possibilities that abound from strong finances, Hogg was also quick to thank those who made it possible.

"I want to thank [former councilmen] Rodney Sullivan and Jay Logan for starting this vision from our previous finance committee and for current committee members, Christy Bobo and John Hinton, for continuing these practices in our current term," Hogg said. "By being financially disciplined and taking this approach, we have set ourselves up to doing so much more that Northport ever thought was possible. The best is yet to come."

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