FAIRHOPE, Ala. — The City Council received a financial report for the first seven months of the current fiscal year at Tuesday’s meeting.

“We’re not in bad shape,” city treasurer Nancy Wilson said. “But the trend lines are of concern; we want to be in better shape. We want to increase our money into (cash) reserves to truly save some for a rainy day.”

For details from the report, see "Report Data" provided at the end of the story.

“The cash is down $750,000,” Wilson said. “This is a result of the general fund lagging behind and not having the revenue coming in. We are waiting for the ad valorem taxes to come in, which will build up the general fund.”

Wilson was referring to the appeal of property tax assessments in the county that has created uncertainty about the amount of revenue the city will receive from the disputed assessments.

The council ended the meeting when they went into executive session “to discuss a controversy not yet being litigated but imminently likely to be litigated if the governmental body pursues a proposed course of action,” as described by city attorney Marion “Tut” Wynne, pursuant to a statutory exception to the state open meetings law.

That exception allows public bodies to meet in executive session to discuss with the body’s attorney options for and ramifications of litigation, mediation and arbitration. It specifically enumerates the language cited by Wynne in his call for the session, which is required by the statute before the body may meet in private. The body must then vote to go into executive session in an open meeting, which it did unanimously Monday night.

Wynne stated to the council that he believed the session would last approximately 30 minutes. The attorney for the city’s Planning and Zoning Commission attended the council meeting Monday night and left with the council when it exited the council chambers to meet privately.

“If they get any recommendation at all during the executive session and need to take action on it, they must come back out in open session and discuss what they’re going to do,” said Dennis Bailey, the general counsel for the Alabama Press Association. “They can’t deliberate or take any action in executive session.”

The state open meetings law prohibits deliberation in executive sessions, he said. But if they are only getting updates on current litigation or the status of possible litigation, then it is unlikely the council would have anything it must report in open session, he said.

The council has met in executive session several times this year on other grounds set out under the exceptions to the statute, including pending litigation and negotiations involving trade competition.

Bailey said all official action resulting from legal advice received in an executive session must occur in open session.

For example, he said, in an executive session regarding pending litigation, the decision about any major action to take in a specific case must not be decided behind closed doors.

“If they’re in there to recommend settlement and the attorney is seeking the authorization to settle the case, then that action must be taken in open session,” Bailey said.

In other business, the council:

• Awarded a contract for Greeno Road pedestrian improvements to Summit Industries LLC, which submitted the low bid of $823,526. The award was recommended by Volkert & Associates Inc., the engineering firm that handled the bid process for the city, according to city documents.

The “engineer’s estimate” for the job stated on the bid tabulation form was $916,996. The other companies and their bids are as follows: Ammons & Blackmon, $982,155; Gulf Equipment Corp., $1,051,526. Summit Industries received a different contract earlier this year for the construction currently under way at Greeno Road, state road 104 and Section Street.

• Awarded a contract for underground electrical construction at Thomas Hospital to Southern Electric Corp., which submitted the low bid of $152,681. The other companies and their bids are as follows: Bill Smith Electric, $189,900; Metro Power, $176,181; and Instrument Technical, $256,250.

* Rescinded the contract previously awarded to a company to print City Sketches magazine, the official municipal publication for Fairhope, and awarded it to a different company, after putting it out to bid again.

A city memo laid out the reasons for doing that, which included “the (r)epeated failure of Interstate Inc. to meet the stipulated requirements of the bid. Specifically failure to perform stipulated printing and distribution work within the defined two week turnaround time.” The memo described several instances of noncompliance and stated that the company had been notified each time. Only one company bid for the new contract. That company, Nall Printing, was awarded the contract at a cost of $1.40 per copy up to 8,400 copies.

Report Data

The “summary financial reports” for the seven months ending April 30 provided the following information:

(1) General fund: revenues, $12,864,078 (compared with $11,346,131 in April 30, 2007); expenses, $12,001,351 (compared with $10,720,671 a year earlier); revenue over expenses, $862,727.

(2) Gas fund: revenues, $5,363,013 ($5,411,726); cost of energy, $2,839,054 ($2,730,346); expenses, $1,979,507 ($1,729,332); revenue over expenses, $544,452.

(3) Electric fund: revenues, $9,075,774 ($8,772,135); cost of energy, $4,937,293 ($4,231,372); expenses, $3,447.377 ($2,776,933); revenue over expenses, $691,104.

(4) Water/sewer fund: revenues, $4,647,114 ($4,748,138); cost of energy, $366,039 ($351,295); expenses, $4,327,451 ($3,949,901); revenue under expenses, $46,376).

(5) Golf fund: revenues, $821,916 ($831,334); expenses, $887,658 ($856,047); revenue under expenses, $65,742,

(6) All funds: revenues, $32,771,895 ($31,059,464); expenses, $30,785,730 ($27,345,897); revenue over expenses, $1.986,165.

Cash balance comparison:

(1) General fund, $2,670,317 (April 30); $2,732,987 (March 31); $2,118,375 (April 30, 2007);

(2) Gas fund, $319,529; $305,503; $637,514;

(3) Electric fund, $1,477,246; $1,662,617;

(4) Water fund, $3,326,812; $3,169,979; $4,186,285;

(5) Golf fund, $123,836; $118,107; $151,248;

(6) Gas tax fund, $358,797; $352,024; $304,040;

(7) Capital projects, $2,800,086; $3,479,576; $97,119;

(8) Capital projects: library, $12,671; $19,120; $88,618;

(9) Totals, $11,089,293; $11839,913; $9,704,197.

(A) Sinking funds, $1,910,258; $1,797,156; $1,909,64;

(B) Warrant funds, $2,493,963; $3,135,280; $677,310;

(10) Total excluding sinking/warrant funds, $6,685,072; $6,907,477; $7,117,240.