A balanced $291M budget built on sales tax and an electric-utility engine — with a new City Hall, rising debt service, and $1B in long-range capital ideas ahead.
The City budgets across seven funds. After removing the $28.4M of internal transfers that move money between them, total
FY 2026 appropriations are $291.0M. Two funds dominate: the tax-supported General Fund ($141.6M) and the
enterprise Utility Fund ($154.1M). Several smaller funds — School, Solid Waste, Public Building Authority and Debt
Service — are balanced largely by transfers in rather than by their own revenue.
Total budget by fund
Total uses incl. transfers & (for enterprise funds) accumulated depreciation
Where every dollar goes
Citywide, net of interfund transfers — $291.0M
Roughly $70M of the operating total is wholesale electricity the City buys to resell — a pass-through that inflates "operating" but carries thin margin.
Conservatively built. Management budgets revenue conservatively and expenditures realistically; sales tax is held flat at $95M even though FY25 is tracking ~$2M above budget.
Drawing on savings. The budget plans to spend $11.46M of accumulated fund balance ($3.0M General Fund + $8.46M Utility) to balance — a deliberate, capital-driven draw, not an operating shortfall.
One-year cycle. Dothan broke from its biennial cycle to adopt a single FY 2026 budget so each incoming Commission owns the budgets it presides over.
Halfway through the year, the City's mid-biennium review revisited every fund. The headline: revenues are running well ahead of the conservatively adopted budget — about +$26.7M across all funds — while spending held essentially flat. That revenue strength is what lets the April review promote capital projects from "conditional" to "funded" (see the Capital Plan section). Figures compare the adopted FY2026 budget with the mid-year forecast; cash actuals are as of Feb 28, 2026 and debt as of Apr 15, 2026.
All-funds revenue
+$26.7M
$266.5M → $293.2M vs adopted
All-funds spending
+$1.3M
$262.7M → $263.9M — essentially flat
Net fund balance · 2-28-26
$44.7M
after self-insurance, debt & school set-asides
Outstanding debt · 4-15-26
$156.8M
up $10.7M from $146.1M (new Training Center debt)
Revenue: adopted vs mid-year forecast
FY2026 current revenue by fund
General Fund revenue is forecast +$13.7M (stronger sales tax and intergovernmental grants) and the Utility Fund +$13.0M. The adopted bars match the budget exactly ($123.8M GF / $131.0M Utility); the mid-year bars are the review's revised forecast.
Where the budget stands at mid-year
Adopted budget → mid-year position
All-funds revenue$266.5M → $293.2M
All-funds spending$262.7M → $263.9M
Gross fund balance (Gen/Util/SW)$68.0M
Less reserves & set-asides−$23.3M
Net fund balance$44.7M
Permanent reserve (11.7%)$30.9M
Unreserved fund balance$13.8M
Outstanding debt$146.1M → $156.8M
Note on basis: the review revises the revenue/expenditure forecast and reports cash actuals — it does not re-appropriate FY2026, so the $291.0M adopted appropriations shown elsewhere on this dashboard are unchanged.
Six-year outlook
All-funds revenue vs spending, FY2026–FY2031 (mid-year forecast)
The forecast shows revenue outpacing spending every year, but the cushion narrows from ~$29M in FY2026 to ~$14M by FY2031 as expenditures grow a little faster than revenues — manageable, but worth watching. (Operating basis: excludes capital/one-time resources and fund-balance carryover; interfund transfers net out.)
On the ground at mid-year — major project status
Construction milestones reported in the mid-biennium review
✓ Completed / opened
Wiregrass Innovation Center ($35.2M)opened Mar 2026
Dothan Opera House additions & renovationsopened Jun 2025
Porter Park & Events Plazaopened Sep 2025
Honeysuckle Water Tank rehabJun 2025
Business License softwarelive for 2026
⛏ Under construction / underway
City Hall & Annex campus ($68.2M)spring 2027
Wiregrass Public Safety Center ($13M)underway
Pickleball Complex ($6.4M)summer 2026
Omussee Trunk Line rehabJun 2026
ERP & Public Safety softwareFY27
The capital the FY2026 plan funds is actually moving: several of the biggest "funded" (green) projects — the $35.2M Innovation Center, the $68.2M City Hall campus, the $6.4M Pickleball Complex — have either opened or are in active construction, alongside the conditional-but-now-underway $13M Public Safety Center.
03
Revenue Profile & Concentration
General Fund
Dothan's revenue base is narrow and cyclical. Inside the city, retail sales carry a 9% sales tax (State 4%, County 1%,
City 4%), and that single stream funds three-quarters of General Fund operations. Property tax is small by design — the
City levies only 5 of the 36 mills on local property, leaving ad-valorem at under 5% of revenue.
General Fund revenue trend
Total revenue by year — note the FY2024 one-time spike
FY2024's $167.6M reflects ~$33M of one-time intergovernmental money (grants + a $11.8M Wiregrass Foundation contribution). Recurring revenue is closer to the ~$124–129M range — which is why FY2026 is budgeted at $123.8M.
Revenue concentration
Share of General Fund revenue
Sales & use tax~75% · $95.0M
Property (ad valorem) tax~4.97% · $5.3M
Business licenses3rd largest · 8,989 issued
04
Revenue Flow
Sources → Funds → Where it lands
This diagram traces current-year revenue from each source, into the fund that collects it, and out to where it is ultimately used — including the inter-fund transfers that redistribute it. Of the City's seven funds, five collect their own revenue (the middle column); the Public Building Authority (City Hall debt) and Debt Service funds raise none of their own, so they appear on the right — funded entirely by General Fund transfers. Switch years to watch the structure shift: the Solid Waste subsidy moved from the General Fund (FY22–25) to the Utility Fund in FY26, one-time grants ballooned General Fund revenue in FY24, and the Public Building Authority only appears once the City Hall campus debt begins. ↗ Open the full zoomable money-flow map to follow every dollar all the way down to departments and cost types.
Citywide revenue flow
Left = revenue sources · middle = collecting fund · right = where the money lands after transfers. Flows show current-year cash revenue; reserve/fund-balance draws and non-cash accumulated depreciation are excluded, so totals reflect revenue movement rather than total appropriations. Hover any band for the dollar amount.
05
General Fund
$141.6M · day-to-day city services
The General Fund pays for police, fire, streets, parks, courts and administration. It is overwhelmingly
tax-financed — and sales & use tax alone is ~75% of its revenue. A $14.8M transfer from the electric utility and a
$3.0M planned draw on fund balance round out the resources needed to fund a $135.5M operating program plus debt transfers.
Resources by source
Total resources $141.6M (incl. transfer in & fund-balance use)
Tax revenue composition
Taxes total $106.75M — sales/use tax is the engine
Public safety is the budget. Police ($35.9M) and Fire ($21.4M) together are 42% of General Fund operating spending. Personnel is $88.4M — about 65 cents of every operating dollar, and it has grown ~38% since FY2020.
Where the General Fund's money goes
Every dollar of General Fund uses for the selected year — operating departments grouped by function (middle), then by department (right), plus transfers out to pay debt and (through FY2025) subsidize Solid Waste. Hover any band for the amount. Totals include transfers out, so they exceed the $135.5M departmental operating budget. FY22–24 are actuals; FY25–26 are budget.
Inside each department — salaries, operations & capital
Dept:
Drills the prior chart one level deeper: each department's spending split into salaries & benefits, operating, and capital. Scope is department operations only ($124.9M in FY26) — it excludes the $10.6M of outside-agency grants and $6.1M of transfers shown above, which are pass-throughs with no cost split. Public Works combines Street & Engineering, and General Services includes Facilities, Fleet & Insurance, because that's how the budget reports cost categories. FY2025 is omitted (its department cost detail is published only on a projected basis, distorted by one-time City Hall construction).
06
Utility Fund & the Transfer Engine
$154.1M enterprise fund
Dothan owns its electric, water and sewer systems. Net income from electric sales is deliberately used to
subsidize the rest of the City — reducing residents' tax burden while keeping Dothan one of Alabama's lowest-cost power
providers. In FY2026 the Utility Fund sends $22.3M to other funds, the financial backbone the General Fund, Schools and
Solid Waste all lean on.
Utility revenue by source
Total resources $154.1M
Utility spending over time
FY2020–24 actual · FY25 projected · FY26 budget
What is "accumulated depreciation"? The gray slice in the revenue chart ($14.6M) isn't cash actually coming in. Enterprise funds like Dothan Utilities are required by accounting rules to budget the estimated wearing-out of physical assets — pipes, substations, plant equipment that lose value over time and will eventually need to be replaced. The City "credits" that amount on the revenue side as if it were a contribution from past savings, which lets the budget reserve the same amount for future replacements. It's a placeholder, not real money moving in. That's why this fund balances at $154.1M on paper but only about $139.5M is actual cash flowing through this year.
The "utility flywheel" — $22.3M flows out to balance other funds
Transfers from the Utility Fund in FY2026
Utility Fund — net electric margin
$22,298,549 transferred out
Electric sales budgeted $91.8M · 32,496 power customers · purchased wholesale from Energy Southeast
$14.82M
→ General Fund
Offsets property/sales tax; ~10% of GF resources
$3.93M
→ Solid Waste Fund
Required to balance the fund
$3.54M
→ School Fund
Without it, Schools run a large deficit
Single point of dependence. Electric sales are flat and weather-sensitive, and ~$70M (over half of utility expense) is wholesale power the City must buy. A bad-weather year or a wholesale price spike doesn't just hit the Utility Fund — it ripples into the General Fund, Schools and garbage collection simultaneously.
Where the Utility Fund's money goes
Every dollar of Utility Fund uses for the selected year — operating costs by service (with wholesale power split out), debt service, and transfers out to other funds. Hover any band for the amount. FY22–24 are actuals; FY25–26 are budget; wholesale power is shown at the budgeted ~$70M.
Inside each utility department — salaries, operations & capital
Dept:
Drills the chart above one level deeper: each utility department's direct operating cost split into salaries & benefits, operating, and capital. Scope is department operations only (~$37.9M in FY26). Per the budget's footnotes this excludes wholesale power purchased (~$70M), depreciation, debt service, citywide/combined utility costs, and transfers out — none are broken out by department into these cost types (they appear in the chart above). "Customer billing & collections" is the Finance utility billing/services/collections function. FY2025 is omitted (department cost detail is projected-only that year).
07
Debt & Long-Term Obligations
$146.1M outstanding
Outstanding principal is $146.1M as of Sept 30, 2025. Nearly half is the new City Hall Campus issued
through the Public Building Authority; most of the rest is sewer debt tied to past EPA mandates. FY2026 debt service jumps
+$5.5M to $15.2M as City Hall payments begin. Encouragingly, the bulk of the debt (City Hall + sewer) is exempt from the
State constitutional debt limit, which had $236.3M of headroom.
Debt payoff & annual service, 2026–2045
Outstanding principal (line) vs. yearly principal + interest (bars)
This curve assumes no new borrowing. The City has signaled SRF loans for the $31M+ Cypress Creek wastewater plant upgrade (plus a future $75M Little Choctawhatchee plant); each $10M borrowed adds ~$620K/yr of service that would lift this line.
What the debt is for
Outstanding principal by purpose
Paid off byFY2045 (current debt)
Wiregrass PSC portion~$11.2M (mostly reimbursed)
What's the "constitutional debt limit"? Alabama's state constitution caps how much debt a city can carry — basically a built-in "don't max out the credit card" rule, set as a percentage of the city's assessed property value. As of Sept 30, 2024, Dothan had about $236.3M of unused borrowing room under that cap. Better still, most of Dothan's existing debt is exempt from the cap — the City Hall Campus (Public Building Authority) and sewer infrastructure debts are secured by specific revenue streams (rents and utility rates) rather than the City's general taxing power, so they don't count against the limit. Practical headroom is even larger than the $236M figure suggests.
08
Capital Improvement Plan
$21.3M funded · $1.0B catalog
Only $21.3M of capital is funded inside the FY2026 operating budget (vehicles, resurfacing, facilities). The
six-year plan catalogs over $1.0 billion of requests, but "requests" isn't the same as "owed" or "committed." Of the
$268.8M of FY2026 requests, about $120M is actually funded this year and another $22M is staff-recommended; the
remaining ~$111M is conditional — meaning it depends on grants, future borrowing, or a strong revenue year.
The other five years (FY2027–FY2031, ~$753M combined) are planning placeholders — each project gets re-evaluated and labeled
funded/recommended/conditional only when that year's budget actually comes around. The plan's $318M FY2029 spike is dominated
by a single aspirational $200M Multi-Purpose Arena / Arts Center plus a $31M parking deck — neither is committed.
Six-year capital plan by fund
All requests, FY2026–2031 (budgeted + recommended + conditional)
The FY2029 spike ($318M) is dominated by the conditional Arena/Arts Center ($200M) and a $31M parking deck. Treat the out-years as a planning catalog, not a spending forecast.
FY2026 plan — funding status
$268.8M of FY26 requests by how they'd be paid for
Funded$119.8M
Recommended$22.1M
Conditional$111.7M
What do these three labels mean? Every project in the 6-year capital plan gets one of three statuses based on how solid the money is. FUNDED means the money is already in this year's budget — these projects are happening. RECOMMENDED means staff thinks the project is worth doing and a funding source has been identified, but the City Commission hasn't formally approved the money yet. CONDITIONAL is the wish list — projects on hold until funding becomes available (a grant, future borrowing, or unexpected budget room from a good revenue year). Each April, the Commission's mid-year review is when "conditional" items can get promoted to "funded" if the books look strong enough.
What changed at mid-year — conditional → fundedMid-year
FY2026 capital by funding status: adopted budget vs the mid-biennium review
Funded
+$42.6M
$119.8M → $162.4M · General Fund funded nearly doubled (+$33.6M)
Conditional
−$56.1M
$111.7M → $55.6M · almost all General Fund (−$55.6M)
FY2026 total
−$41.6M
$268.8M → $227.2M · ~$41.6M deferred to FY2027
The April review did exactly what the labels above describe. With revenue running ahead of budget, the City promoted projects from "conditional" (and "recommended") to "funded" — General Fund funded capital jumped from $43.2M to $76.8M while its conditional pile fell from $73.2M to $17.6M, and the staff-"recommended" tier was folded in entirely (the revised plan tracks only funded vs conditional). Not everything was funded — some conditional projects were deferred a year (FY2027's plan grew from $115.8M to $128.1M), and the big aspirational items (the $200M arena in FY2029) stay conditional.
Which projects were promoted at mid-yearMid-year
60 projects · $37.2M moved into "Funded" at the April review — most were staff-recommended, a handful jumped straight from conditional, and a few were newly added. (The other ~$125M of funded capital was already budgeted.) Every line is reconciled to the deck's $162.4M funded total.
Every FY2026 capital project — by department
All 180 line items from the FY2026 Capital Improvement Plan, organized by department · click a department to expand · totals to $268.8M · matches the budget page-by-page (pp. 161–172)
09
Reserves & Fund Balance
$29.5M permanent reserves
The City's informal policy targets an unassigned fund balance of 8%–17% of next year's spending for the General
and Utility funds — a band of roughly $24.5M–$52.2M. Permanent reserves of $29.5M sit inside that band, but in its
lower third, and FY2026 deliberately spends down available balances to fund capital.
Reserves vs. policy band
Permanent reserves against the 8–17% target
$29.5M held
$0$24.5M (8%)$52.2M (17%)$60M
General Fund reserve$12.56M
Utility Fund reserve$16.41M
Solid Waste reserve$0.50M
Citywide fund balance (end FY2024)$103.0M
How to read this gauge. The City has its own savings-account policy: it tries to keep permanent reserves equal to 8%–17% of next year's spending (the green striped band). For FY2026, that band works out to about $24.5M on the low end and $52.2M on the high end. The orange marker is where Dothan actually sits — $29.5M, inside the band but in its lower third. Think of it like a household with $5,000 in monthly expenses being told to keep $5K–$10K in savings; they're sitting at about $5,900 — comfortable, but not flush. Why a range instead of a single target? Too little savings and the City can't weather a hurricane or a sales-tax dip; too much and it's hoarding tax money that could be funding services or projects. The band gives flexibility.
Planned fund-balance drawdown
Estimated available balance, begin → end of FY2026
The General Fund's available balance is projected to fall $28M → $25M, leaving unassigned reserves (~$12.4M) near the floor of policy. One or two more years of similar draws would test the 8% minimum.
What is a "fund-balance drawdown"? It's when the City intentionally spends part of its accumulated savings to fund this year's plan — usually for one-time capital projects, not to plug an operating hole. The bars in the chart above show savings at the start of FY2026 (light blue) vs. the projected end (dark navy). The City plans to spend down $3.0M from the General Fund (mostly to help fund the $15.2M of GF capital — vehicles, road resurfacing, building maintenance) and $8.5M from the Utility Fund (toward $5M of utility capital plus rising debt service for the Cypress Creek wastewater plant). Combined: about $11.5M of planned drawdown. Think of it like a household with $20K in savings deciding to spend $3K on a new HVAC system instead of financing it — the savings shrink, but you got a real asset for the money and didn't have to raise taxes or cut services. Doing this once is normal; doing it year after year is what would deplete reserves — see the warning note next to the chart.
So where's the difference between $29.5M and $103M? Great question — one of the most common points of confusion in any city budget. The $29.5M permanent reserve is money the City has explicitly locked away for emergencies only. The $103M citywide fund balance is everything that has accumulated over time across the City's governmental funds — including the rainy-day portion plus a lot of money that's already spoken for. The difference lives in three buckets:
Restricted: money the City legally can't touch for general purposes — federal/state grant balances awaiting their specific project, unspent bond proceeds (locked to the project they were borrowed for), debt-service reserves required by lenders, impact fees collected for specific infrastructure.
Committed / Assigned: money the Commission has formally earmarked — multi-year capital projects in progress (City Hall construction, sewer rehabs), and money already approved for next year's budget (the $11.5M planned drawdown comes from here).
Working capital: day-to-day operating cash needed to bridge timing — sales tax arrives monthly but payroll goes out every two weeks; property tax mostly lands in December–January, but firefighters need paychecks in March.
Household analogy: your total bank account ($103M) includes the mortgage escrow, the kids' college fund, the contractor's deposit, and this month's grocery budget. Your locked emergency savings ($29.5M) is the rainy-day portion you've promised not to touch. Both are real money — they're just measuring different things.
Two technical notes. (1) The exact restricted/committed/assigned/unassigned breakdown lives in the City's audited Annual Comprehensive Financial Report (ACFR), not the budget document. (2) The $103M is governmental funds only. The Utility Fund is separate: it has a "Net Position" of $188M, but most of that is the value of physical infrastructure (pipes, substations, the Cypress Creek treatment plant, fleet vehicles), not cash. The Utility's actual cash on hand for emergencies is the $16.4M already counted above.
10
Outside Agency Funding
$10.6M to 34 agencies
The City funds outside agencies for economic development, tourism, culture and social services. FY2026 totals
$10.6M (up $0.8M). The single largest commitment is HudsonAlpha — part of a $20.6M pledge (2023–2027) for the
biotechnology institute of the Wiregrass.
What's the "public purpose doctrine"? It's the legal rule — written into state constitutions — that says government can only spend public money on things that serve a legitimate public benefit, not on things that purely benefit a private person or business. It's the answer to the question "Why CAN the City send money to a museum or a biotech institute, but CAN'T just write a check to my neighbor?" Each of the 34 grants below has to satisfy it. That's why every one is approved by City Commission resolution (the public-purpose paper trail), is tied to an identifiable public benefit (tourism promotion, library services for residents, animal control, biotech jobs, cultural enrichment, etc.), and can be modified or terminated by the Commission at any time — so it can never be a pure ongoing gift. The doctrine dates to the 1800s, when many cities went bankrupt subsidizing private railroads. Alabama's constitution still includes a restrictive provision (Section 94) from 1901, with modern amendments (558, 772) carving out exceptions for non-profit support and economic-development incentives. Practical takeaway: this is the invisible guardrail on every dollar in the budget. ↗ Read the Alabama League of Municipalities' deep-dive (PDF)
FY2026 funding to outside agencies — all 34 recipients
What does "in-kind" mean? Most agencies on this chart receive cash — the City literally cuts them a check. The five items marked with ★ (gray bars) are different: instead of cash, the City provides them with something of equal value, most often by paying their utility bill, performing building maintenance, or covering an insurance policy on their behalf. The dollar amount is the value of those services. Why do it this way? Sometimes the agency uses a City-owned building, so it's simpler for the City to just keep paying the lights and water than to send the agency cash to send back. The 5 in-kind items here total about $93,365 — a small slice of the overall $10.6M agency support.
Total $10,599,265 across 34 funded agencies. (The budget summary elsewhere cites $10,589,265 — a $10K rounding inconsistency in the published document itself; the line-item table is the authoritative source.)
Agency funding history
Total cash support, FY2020–FY2026
The FY2025 peak ($13.9M) reflects a one-time $4.1M Wiregrass Pet Rescue allocation. The underlying trend is still sharply up — agency support has more than doubled since FY2020.
11
Issues, Risks & Outlook
Management lens
The FY2026 budget is balanced, conservatively built and backed by healthy reserves. The risks below are not signs of
distress — they are structural exposures to monitor, framed for the management team. Each pairs the relevant figure with a
metric worth watching monthly.