A balanced $291M budget built on sales tax and an electric-utility engine — with a new City Hall, rising debt service, and a $1B capital wish-list 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.
02
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
03
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.
04
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).
05
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
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).
06
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)
07
Capital Improvement Plan
$21.3M funded · $1.0B planned
Only $21.3M of capital is funded inside the FY2026 operating budget (vehicles, resurfacing, facilities). But the
six-year Capital Improvement Plan catalogs over $1.0 billion of requests — most of it conditional
or dependent on grants and future debt. The plan's headline year, FY2029, is inflated by a $200M Multi-Purpose Arena / Arts
Center that is aspirational, not 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
Major projects in the pipeline
Selected large items from the six-year plan — sorted by FY2026 budgeted cost
Project
Fund
FY2026
Later years
Status / note
08
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
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.
09
Outside Agency Funding
$10.6M to ~40 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.
Largest FY2026 recipients
Cash appropriations
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.
10
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.