A fast-growing Birmingham-area suburb might not be growing fast enough to support its spending, according to an independent analysis of city finances.

Some local leaders say the analysis is another warning that Helena, a city of 22,000 that recently went $11 million over budget, needs to watch its finances.

“Over the next few months, I think it would be wise for us to sit down together to identify and enact any changes that need to be made before the end of this term to help set the city up for success,” city councilor Laura Joseph told AL.com.

Sungho Park, a University of Alabama assistant professor of public policy and administration, examined city finances and created an analysis for AL.com.

He found that the city of Helena’s spending for the “Helena Forward” initiative to build a $45 million city hall and sports complex appears to stray from some accepted practices.

While the city is not in immediate crisis, it should consider restraint, Park found.

“Based on my evaluation using objective data and measures, the city’s long-term fiscal outlook falls below generally accepted benchmarks for financial sustainability,” Park said. “In other words, whether the city’s fiscal plan for the Helena Forward project can be sufficiently supported by its long-term financial ability deserves questions and warrants caution.”

A recent city audit found that Helena had overspent its budget in multiple categories, including the new city hall construction, by a total of $11 million. It ended its last fiscal year in a deficit.

Additionally, Park noted that the city’s debt ratio of 0.896 far exceeds acceptable standards of 0.03 and contradicts the city’s own fiscal policy. He also found that the city’s long-term liability is high-risk.

“Both indicators point to substantial long-term fiscal risk for the city,” he told AL.com.

Park compared Helena with 36 other recent city hall construction projects around the country. He noted that Helena’s spending for the city hall is out of proportion with comparable projects around the county. He concluded that Helena’s cost per resident was significantly higher than others, $813.90 as opposed to the average of $262.10.

His analysis was conducted using the city’s audit report along with publicly available documents.

Park questioned whether the city conducted a robust cost-benefit analysis for the major spending or engaged residents throughout the planning and implementation process.

“If these steps were not undertaken in the first place, this would represent a significant procedural concern, suggesting that the city’s budget practices deviate from established standards,” Park said. “If that is the case, it is understandable why some residents have questioned the actual value of the project. In any case, transparency is essential to sound capital project governance.”

What people are saying about Helena’s finances

The small city has a population of 22,000. It has added more than 5,000 new residents since 2010, according to estimates from the U.S. Census Bureau.

Councilor Andy Healy, who was appointed to fill an unexpired term in January, said Park’s observations underscore the warnings of the recent audit.

“I especially was glad to see that the fiscal condition does not appear problematic right now that is, but we need to not only work on short term, we must focus hard on long term,” Healy said.

Healy said the city must take several steps including a thorough review of the current audit, increasing transparency, prioritizing essential services and trimming non-essential spending.

“We have got to build the reserve to protect the city for major repairs or upgrades,” he said. “We have to put more checks and balances in place. Call it a review before the purchase. Do we truly need to spend the dollars right now or is it something we can wait on?”

Mayor Brian Puckett has previously said there is no cause for alarm. He called the audit a snapshot of finances that has since passed.

He has defended the projects as essential to meeting the needs of the growing city.

Puckett said reserves were restored when the bonds were sold. The figures are not represented in the audit because that transaction occurred after the report was completed, he explained earlier.

Joseph said the scope of major projects have long been a source of concern.

“Looking back to 2022 when we first started discussing the numbers, we expressed concerns about what the final cost would be, and I expressed my concerns again in an email to the Mayor in January of 2024,” she said. “Though efforts were made toward value engineering this project, I wish those efforts had been more aggressive and that the council had an opportunity to take a more active role in the decision-making process.”

Current city leaders have just a few months to curtail spending. A new slate of leaders will arrive after city elections in August.

Only two council members, Healy and Council President Alice Lobell, are seeking election. Puckett will not seek a second term.