As mayor of Athens and president of the Alabama League of Municipalities, Ronnie Marks is finding that what's good for our city is also good for cities statewide.
The 463-city League recently formed a task force to make sure cities and towns throughout Alabama get their fair share of federal stimulus money triggered by the novel coronavirus pandemic.
The task force, of which Marks is a member, has two main goals — to identify local funding losses and to recommend to the governor how to distribute coronavirus stimulus money. The state expects to receive about $1.9 billion in federal aid through the Coronavirus Aid, Relief and Economic Security (CARES) Act. The act lets state governors determine the best way to allocate the money their state receives.
Marks said the task force will identify immediate funding losses and advise Gov. Kay Ivey on how to fairly distribute the federal aid in order to keep local governments solvent.
Among the revenue streams hit hardest are sales and use taxes, rental and lodging taxes and motor fuel revenue. Marks said that while counties typically rely on property taxes to fund their budgets, cities and towns typically rely on sales and use taxes, rental and lodging taxes and motor fuel revenue. He said Athens relies on sales and use taxes and also business license tax.
"We are making sure our cities are documenting anything related to COVID-19, and if the state gets another round of stimulus, we've got a team together going to the governor's office making sure we are apart of this," Marks said.
He said the $1.9 billion in aid was supposed to go to cities with more than 500,000 residents. However, Birmingham is the only city that qualifies.
"We want to make sure that if we are hard hit that it is funneled down to all cities and towns," Marks said. "So, we are raising the idea to make sure all of us are looked at."
The point of creating the task force is to be proactive in looking out for cities and towns, he said.
"We are getting people from around the state so we can put our heads together and approach this together to get a big impact for all of us," Marks said.
He said he learned from the tornadoes in 2011, 2012, 2013 and 2014 that documenting losses was imperative. Just as for the tornadoes, he and City Clerk Annette Barnes set up a special code pertaining to resources and employees used in the response to COVID-19.
He said all cities should do this so every expense is identified and possibly eligible for reimbursement.
"You don't want to get audited and have somebody get slapped in the face," Marks said.
As League president and task force member, Marks has been able to see just how dire the situation is for some cities following the outbreak.
Marks isn't so worried about March and April but rather May and June.
"I'm worried about that part if this doesn't level out, because 40 percent of our general fund revenue comes from sales and use tax and license fees," he said.
The city tends to budget conservatively and has money set aside, but it is also self-insured, meaning the city and city employees pay for medical costs rather than the employees and a company like Blue Cross/Blue Shield of Alabama. During last year's budget hearing, city officials discussed switching to private insurance due to the high cost of medicine.
Marks shared how one city in North Alabama was faring compared to Athens. In talking to the mayor of that city, which he did not name, he learned it has three or four months in reserve funds and receives 62 percent of revenue from sales and business license tax. The mayor told Marks he doesn't know how he is going to make payroll if the coronavirus nightmare continues. Athens, in contrast, is in better shape.
"We have been ultraconservative ion the front end," Marks said. "We finished last year with $2 million in revenue over expenses."
And, although cities are required to keep in reserve an amount representing 15% of their general fund, Athens keeps 23% in reserve, the mayor said.