Photo by Loyd McIntosh
The Vestavia Hills City Council meets at Vestavia Hills City Hall on Monday, Aug. 26, 2024.
The Vestavia Hills City Council on Monday night unanimously approved a $73.2 million general fund budget for fiscal 2025, which begins Oct. 1 of this year.
The new budget marks a 10.3% increase over the city’s 2024 budget and includes a 3% cost-of-living increase for Vestavia Hills employees as well as new terms for the financing of city vehicles and other equipment, all of which were approved as separate resolutions by the City Council.
During a period of public comment prior to the vote, Vestavia Hills resident Don Harwell noted that the city’s general budget has grown significantly since fiscal 2023 ($58.1 million) and that the Vestavia Hills City Schools’ proposed fiscal 2025 budget of $121.6 million is 11% higher than its 2024 budget.
He then asked for clarification regarding the source of the increased funding as well as the city’s plans in case an economic recession interrupts Vestavia Hills’ revenue streams.
“Let’s say in 2026 we go into a recession and property taxes actually reverse. Instead of going up, they lose 10% in value,” Harwell said. “Do we have some sort of plan in case something does recess?”
City Manager Jeff Downes said Vestavia Hills’ revenue increase is largely due to increases in sales tax and property tax revenues due to economic growth and expanded construction activity in Liberty Park.
“Forty percent of the city’s revenues come from sales tax, 32% from ad valorem, 9.6 percent from licenses and permits,” Downes said.
Additionally, Downes said the city has made plans for interruptions in revenue if there were an unexpected economic downturn.
Downes continued by pointing out that the city has experienced an 11% growth in property tax revenue and historic growth in bundling and permit fees over last year due to home construction in The Bray at Liberty Park and the Medical Properties Trust building currently under construction.
“We had the largest revenue increase in building permit fees in the history of Vestavia Hills,” Downes said. “We are currently planning to have roughly $3.4 million in building permit fees compared to just over $1 million the year before. That is being driven by The Bray.”
Downes added that the city has enough reserve funds for more than 200 days as a “cushion against economic surprises.”
The entire Vestavia Hills fiscal 2025 budget is available on the city website’s Transparency Portal accessible at vhal.org.
The City Council also on Monday approved the final 10% of the fiscal 2024 budget, a practice required under Alabama law.
In other news, the Vestavia Hills City Council approved the reassignment of the tax incentive agreement associated with Baumhower’s Victory Grille and Dunkin on Montgomery Highway from Jordy Henson, owner of GENREV Properties, to his estate due to what Downes described as a “serious health condition.”
The City Council also heard from Vestavia Hills City Engineer Ethan Fisher and Katherine McRee of the Cahaba Heights Merchants Association regarding improvements, known as the Cahaba Heights Gateway, along Pumphouse Road near Martin’s Bar-B-Que Joint and the Cahaba Heights Chevron. Construction on the new gateway is scheduled to begin in early September.
Also, Vestavia Hills City Councilwoman Kimberly Cook announced she plans to seek re-election in 2025.
Lastly, Vestavia Hills Mayor Ashley Curry read the first reading of two resolutions addressing intergovernmental arrangements with Jefferson County regarding a bridge over a Cahaba River tributary, and public improvements around the Cahaba River tributary on Caldwell Mill Road and Old Looney Mill Road.
The next Vestavia Hills City Council meeting is scheduled for Monday, Sept. 9, at 6 p.m.
Editor's note: This article was updated at 9:48 a.m. on Aug. 27 to correct the title for City Manager Jeff Downes and the number of days for which the city has reserves to serve as a "cushion against economic suprises." That number is 200.
