Selma balances $22.3 million budget by pulling $2 million from reserves

As required by law, the city of Selma has a balanced budget, but the city council had to pull $2 million from reserves to do it.

The city council approved the $22.3 million budget in a special called meeting on Sept. 26, just four days before the end of the current fiscal year. Cities don’t have to have a budget, but if they do, they must approve it before the fiscal year starts on Oct. 1, and the budget must be balanced.

“We met our legal obligation to approve a budget before the close of the fiscal year, and I am grateful for that,” City Council President Billy Young said. “And the citizens of Selma are grateful.”

The budget approved by the council is about $1.5 million less than the budget Mayor James Perkins Jr. proposed and about $300,000 less than the city’s current budget.  

The city’s projected revenue is $20.4 million, including a projected $1 million increase in sales and use tax, from $11.5 million in 2024 to $12.5 million in 2025.

Even with that increase, the budget is left with a deficit of $1.9 million. The council made up the difference by applying $2 million from the city’s reserves to balance the budget. With that $2 million infusion, the budget is projected to have a surplus of $93,000. That’s a razor-thin margin of .004% of the city’s $22.3 million budget.

The council had to work around two major hurdles to create the 2025 budget. First, the council had to find a way to make up losing $2 million from the federal American Rescue Fund Act, which expired on Sept. 30. And the council had to cover $2.4 million to pay off a 2016 loan.

The payments for the warrant, a type of loan, ballooned to about 10% of the city’s budget in 2024, and it will stay that high until it’s paid off in 2031. Refinancing the loan is not an option, the council learned from its investment banker earlier this summer.

To put it in perspective, the city will spend almost as much on loan payments in 2025 as it will spend on public works for the year.   

The budget includes $450,000 for the citywide camera surveillance system, which was approved in June but has not been installed. The budget places the funds in the police department’s budget, while Perkins’ budget called for it to be placed in the information technology department budget.

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Litter and garbage take up an additional $470,000 of the budget. The budget calls for $320,000 to join with Dallas County in a litter control program and $150,000 to pay for garbage pick-up for residents who are on Social Security disability. State law requires the city to cover the cost of garbage pickup for citizens on disability.

The city will spend about $10.6 million for salaries. Finance Committee Chairman Troy Harvill said that while the council “would like to give everybody a larger raise,” they had to adjust salaries “to try to stay in line.”

As it is, the 2025 budget calls for spending $826,000 more on salaries than the 2024 budget.

The police department is budgeted for $5.6 million, plus another $504,000 to support the 911 service. The fire department will receive $3.9 million.

The public works department will spend $2.4 million, and the cemetery department is budgeted for $480,000. The recreation department’s budget is $526,000.

The city council held a series of meetings with department heads as they worked on the budget. Approving the budget Sept. 26 were Harvill, Young, President Pro Tem Clay Carmichael, and Councilmembers Christie Thomas and Jannie Thomas.

Councilmembers Lesia James, Samuel Randolph, Atkin Jemison and Michael Johnson were absent.

The city of Selma did not have a budget for the 2023 fiscal year, which started on Oct. 1, 2022. The mayor’s office and the council could not agree on a budget for the entire year. In fact, when the council approved a budget in March 2023 that defunded unfilled positions just as it did in the new budget, Perkins was so upset that he sued the council and got an injunction preventing the budget from taking effect.

The council and the mayor worked things out, and the city operated with a budget in the 2024 fiscal year.