Sales Tax (copy)

A shopper waits outside of Target for his companion to finish shopping at Dothan Pavilion in this file photo. Dothan retailers and online stores remitted a whopping 18 percent more in sales tax revenue last month than the same time period a year ago.

As two-thirds of the 2019 fiscal year has passed, Dothan city leaders may soon begin to consider what to do with a growing budget surplus.

The city released sales tax collection figures for May, and the numbers are staggering. The city received $6,366,392 during the month – a whopping 18.25 percent increase from the same time period in 2018.

The gain reflects the 10th consecutive monthly increase in year-to-year comparisons – the fourth of at least 10 percent. The city’s finance director, Lisa Reeder, noted receipts from the simplified sellers use tax (internet purchases) tallied $126,919.80 in May alone.

All told, the city’s sales tax receipts have exceeded budget projections by $8.1 million in the fiscal year. As the fiscal year hits the home stretch, city leaders – especially commissioners – will have to decide how to disburse or save the money.

Mayor Mark Saliba notes the city soon faces several large projects, which the surplus could address.

“One of the things we should keep in mind is we have coming up before us probably three, four, or five really large tasks or needs,” he said. “Honeysuckle Road – whether to proceed, how much to do. Do we want to do anything with Rip Hewes Stadium to make it more accommodating to a 7A school and other 7A schools that are coming here? We have some really big-ticket items, so we’re trying to get our arms around that.”

Each year commissioners distill a list of project requests from city department heads and their own suggestions into a few priority lists. District 5 Commissioner Beth Kenward said commissioners could revisit the lists as the fiscal year closes and determine which projects may need addressing – with the help of city staff members.

“We generally rely on the city manager and the staff to come to us and say, ‘Out of the leftover funding, here is our idea’,” she said. “(The surplus) usually gets rolled into some type of capital (project) --repaving, usually facility repair, brick-and-mortar kind of stuff versus ethereal programming. There’s no definitive answer.”

Given the stack of major projects on the horizon, new city manager Kevin Cowper’s input on funding ideas will have great value, Kenward said.

“He’s got a lot of experience with capital projects. That’s one of the reasons we were excited to recruit him,” she said. “That’s going to be very helpful to us to help us make some decisions.”

The commission could allocate the money to different reserve items in the budget, a frugal idea given the city’s heavy reliance on volatile sales tax collections. About 70 percent of Dothan’s funding springs from sales tax collections.

Additionally the city incurs some unexpected expenses, which the money could cover, Kenward said. But if all goes well, some commissioners have an idea about what they would like to see happen.

“With the police department, we’ve talked about giving them a raise,” District 1 Commissioner Kevin Dorsey said. “To be competitive, I think that’s important. My heart’s with the school system (also).”

“I’m very privy to the (new) animal shelter getting off the ground. That’s a major capital investment,” Kenward added. “Yes, we’re partnering with some private entities to do that, but at the same time the city is going to have to put forth a significant amount of capital.”

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