ORANGE BEACH, Ala. — First, the Orange Beach City Council gave the citizens advisory finance committee a job to do. Their task was to find a way to somehow make up for shortages in revenue that are expected in 2011. After months of meetings and discussions, the committee came up with, what they felt, was the only reasonable solution – raise property taxes by 1-mill, which would increase revenue approximately $750,000.

The council rejected the plan at a meeting on April 20th. Only councilman Jeff Silvers voted for the proposal from the finance committee.

“We felt very strongly about this,” said committee member Al Bradley. “Obviously you disagree with us. What we would ask is that you would come to us and tell us why you disagree with it, and what you plan to do about it. Do you disagree that we are going to have a budget deficit in 2011, because we are convinced that we are.”

The obviously frustrated Bradley wanted to know what the council planned as an alternative.

“Are we going to borrow money, spend our reserves or are we going to cut essential services? I would like to see something in writing from each of you about what your plan is to cover the deficit now, rather than waiting until November at budget time.”

Following the April 20th meeting, Mayor Tony Kennon said he voted against the plan for two reasons.

“I voted no because it was a tax increase, and I won’t vote for a tax increase unless there’s a referendum and the people vote to put it on themselves,” Kennon said. “Secondly, I want a more comprehensive plan that includes debt refinancing, and looking at payroll benefits and finding ways to make it more cost effective. I also want us to reevaluate our workforce.”

Mayor’s plan

So at Tuesday’s committee of the whole meeting, Mayor Kennon presented his plan that called for a referendum to increase property taxes by 2-mills, as well as extending a 1-cent sales tax scheduled to expire in 2015 and refinance several million in bonds.

Presently, Orange Beach enjoys the lowest municipal property tax rate in Baldwin County at 4-mills.

Kennon’s plan would not charge city property taxes on any structure that received a county homeowner’s exemption.

Raising the ad valorem tax 2-mills would increase revenue approximately $1.5 million, and refinancing of the bonds could save the city as much as $2 million per year on payments.

Even after voting down the original plan presented by the finance committee, some council members had problems with the mayor’s proposal as well.

“If sales tax goes up, people aren’t going to spend as much money here because it is going to be cheaper somewhere else,” said councilwoman Pattiesue Carranza. “It seems like we are hitting the businesses over and over and over again.”

Kennon said however, that businesses in Orange Beach have enjoyed some of the lowest taxes for a long time, including subsidized sewer fees, and the city has bent over backwards to assist them.

Councilman Silvers expressed concerns about refinancing the bonds.

“We are at a point now where we have no alternatives. We have to move quickly and make some decisions on a long-term plan,” Kennon said.

After voting down the finance committee’s plan, and having issues with the mayor’s plan, Kennon expressed his frustration to the council.

“ I am about to the point where I am tired of coming up here and throwing out options and being shot down, and no one having an alternative plan. What I am fixing to let y’all do is take the budget and fix the budget and manage the employees. If you are going to shoot down an issue, then it is only fair that you present an alternative plan. The finance committee wanted us to present an alternative to theirs, so I came up with one. Y’all may not like it, but I came up with a plan.”