As the end of the fiscal year approaches, most of the counties and municipalities across the state are hustling to get their budgets passed before the Oct. 1 deadline.
But some small towns in Alabama forgo the annual ritual. Neither Ranburne nor Fruithurst does an annual budget, administrators said.
“When I first got elected, I thought, ‘We’ll do a budget,’” said Fruithurst Mayor James Owens. “You do a budget at home.”
But as mayor, he realized that there really was no need for a budget.
“The city of Fruithurst has an embarrassingly small amount of money,” Owens said. “We never have any money left over.”
The town doesn’t have a sales tax. It survives on $25,000 to $30,000 dollars per year collected in ad valorem taxes, car tags and business licenses, Owens said. It receives about $1,000 per month from a gasoline tax it uses to maintain the roads. Its money goes to paying streetlights, building maintenance, gas and utilities for the Fire Department, insurance and operating the senior citizen center. There are really no surprises, he said.
The Town Council meets twice each month, and members receive financial reports and sign any checks at those meetings, said Charlotte Funderburk, town clerk and senior center manager.
The state of Alabama doesn’t have a law requiring that all cities draw up a budget, said Lori Lein, general counsel for the Alabama League of Municipalities. State law requires municipalities using the city manager-council form of government to create and pass a budget by the beginning of each fiscal year on Oct. 1. Cities using other forms of government are not under the same requirement. The closest the law gets is to require the council to make appropriations in all cities using a mayor-council form of government, she said. However, an attorney general’s opinion published in 1940 ruled that section doesn’t apply to towns with fewer than 2,000 residents. Both Ranburne and Fruithurst have fewer than 500 residents.
Still, Lein said, “I don’t know how you run a municipality without a budget.”
Town Clerk Pam Richardson said Ranburne runs just fine without a budget.
Richardson said the town hasn’t done a budget since it was incorporated in 1956. She delivers financial reports to the council members at their monthly meetings and they approve any expenditures of more than $1,000. She makes sure the operating expenses are paid in a timely manner, she said.
The town’s annual income is larger than Fruithurst’s. In fiscal year 2012, Ranburne took in $227,000 and spent $260,000. It has a Police Department to operate and maintain. Fruithurst does not.
Even with the extra department, the financial statements are “pretty routine,” Richardson said — 20 lines of expenses and 20 lines of revenue.
This year, the town applied for a grant to fix some roads. The council voted to allocate 20 percent of the total grant toward a local match. The council members were able to do that because they know how much the town has in reserve, Richardson said. Ranburne started out fiscal year 2013 with $149,316 in reserve, she said.
Although, she hasn’t had anyone request it, residents are entitled to see the same monthly financial reports that the council members receive, Richardson said. All they have to do is come to Town Hall and ask, she added.
Staff writer Laura Camper: 256-235-3545. On Twitter @LCamper_Star.