Porter, White & Company presented a five-year financial plan to the Hoover City Council at its regular meeting Monday night, April 2. The report addressed recent challenges that have emerged in Hoover finances as formerly robust revenue growth and operating surpluses have declined, while expenses have continued to increase at or above the rate of inflation.
Porter White Chairman Jim White pointed out that the fiscal 2018 budget anticipated a draw down in City reserves and commented, “We anticipate a continued draw down of reserves unless you make some changes of some sort.”
Porter White President Goodloe White commented, “Retail sales in Hoover on a per capita basis are higher than those for the City of Birmingham, Jefferson County and the State of Alabama, making it more exposed to accelerating trends in online sales.” All state and local governments levying sales taxes are being impacted by growing internet sales.
The preparation of annual updates of five-year financial plans by cities and other governmental units is regarded as a best practice by the highly regarded Government Finance Officers Association (GFOA). Porter White employed “extrapolation forecasting techniques” to prepare the five-year plan. A GFOA publication describes extrapolation forecasting techniques as “the most common statistical techniques found in public sector revenue forecasting because they are reliable, objective, inexpensive, [and] relatively easy to use…”
A copy of our presentation is available on the City of Hoover website as well as a video recording of the proceedings. The Hoover Sun posted an article summarizing the meeting.
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