City Council President Lonnie Mixon reported last week that Fairhope is operating within its budget at the end of the first quarter of the 2011 fiscal year.

“Today in the general fund we have $3.2 million set aside for emergency funds,” Mixon read from a prepared statement at the Jan. 28 council meeting. “We have reduced the transfer of funds from the utility departments, enabling them to begin upgrading their infrastructure.”

That financial condition was mainly the result of a 2-cent sales tax approved by the council in 2009, Mixon said.

The initiation of the tax was a controversial move by the council, which approved the measure over Mayor Tim Kant’s veto.

“City debt is down to $31.7 million,” Mixon stated. “This debt is being paid off by approximately $1.5 million per year. Over the past two years, total cash is up from $8 million to $16 million.”

Mixon credited the city’s financial condition to several city staff persons, including City Treasurer Nancy Wilson, City Administrator Gregg Mims, and General Superintendent James Gillespie, department heads, and also to a number of volunteers who have staffed financial, budget and strategic planning advisory committees.