Bessemer City is raising property taxes to offset its financial woes

Bessemer City is in financial trouble.

The city was placed on a list of troubled municipalities that the state government is monitoring, and on Monday the City Council approved a significant property tax increase to offset the debt the city has taken on.

The city has used savings to balance its operating budget, taking on more debt than it can afford to pay without raising the tax rate, City Manager Josh Ross said.

The city increased the property tax rate by 10 cents, from 45 cents to 55 cents per $100 of assessed value. The increase could result in a $200 increase in property taxes for someone with a home with a taxable value of $200,000.

Ross, who was hired by Bessemer City as city manager in 2022, said previous management recommended the city take on debt, but management was not realistic about what it would cost to continually pay off that debt.

“There was a large amount of debt last year that affected us, to the point where cash flow and things like that are now becoming an issue as we move forward,” Ross said. ‘We have no other choice. These things are there. We have to keep paying for it.’

One of those projects was Stinger Park, an $8.8 million sports and recreation complex that broke ground in 2021 and is now operational, Ross said.

Together with the debt the city incurred to open the park, the park’s operating costs, park maintenance and insurance, the park costs the city nearly $1 million per year, “which is very substantial for a community our size,” says Ross. said.

“These costs were not things that were fully realized or disclosed to the council that approved the park,” Ross said. “Those costs have been absorbed so far, and that’s what the city actually needs to increase revenue through a tax increase.”

After a recent audit reflected the city’s financial troubles, the city was placed on the state Commission on Local Government’s “unit assistance list,” a state list for cities that are struggling financially.

“The last audit was not good at all. We had so-called financial performance indicators that were concerning,” Ross said.

In an email, the Local Government Commission said municipalities on the list should be allowed to purchase or lease vehicles costing $50,000 or more and to lease, acquire or construct real estate with a term of more than three years and $50,000 dollars.

In addition, city and county managers of municipalities on the list must complete a minimum of six hours of fiscal management education. Ross said city management will meet with the Local Government Commission in the coming weeks to determine next steps.

“The plan is for the local government committee to meet in the coming weeks to give us some more feedback on what we should be doing and what their expectations are,” Ross said. “Because we are on this watch list, there are a number of things that we need to start doing, or get permission to do, a lot of it has to do with education or procurement.

“The financial conditions and issues we face have developed over time based on past recommendations. That ultimately comes from recommendations from past management and of course the approval of the City Council. That is not to say that (these) projects were bad projects. It’s just… Being realistic about what these things cost was the missing piece of the puzzle. And that’s kind of what we’re feeling right now, with such a drastic increase.”