Mobile Council Unanimously Approves $404 Million Budget, Restores Port City Classic

Mobile Mayor Spiro Cheriogotis has unveiled his first proposed city budget, a roughly $404 million spending plan for fiscal year 2027 that funds debt payments on the under-construction Regions Arena, sets aside money to finish the Second Line Transit rebrand, and holds the city’s reserves steady even as overall spending shrinks.

The proposal, delivered to the City Council on a Thursday afternoon, covers the fiscal year beginning Oct. 1 and represents a reduction from the city’s current $416 million budget — a drop driven largely by an anticipated $89.75 million reduction in interest income on bonds and investments rather than by cuts to city services. A statement accompanying the budget described it as designed to strengthen city services, invest in Mobile’s workforce and infrastructure, and position the city for continued growth.

Cheriogotis wrote in a letter accompanying the proposal that the proposed Fiscal Year 2027 budget was developed with three goals in mind: building a city people love to live in and want to visit, building a city that works for everyone, and building a city that stands the test of time. He wrote that it recognizes the measure of Mobile’s progress is not only what we build, but how well the city works for the people who live here.

A smaller budget on purpose

The headline number is smaller than the year before, but the reasons behind the decline say more than the figure itself. Mobile, like many cities, has collected substantial interest income on its bond proceeds and investments in recent years. Cheriogotis’ first budget anticipates that income falling by nearly $90 million, and the spending plan adjusts accordingly.

Even with the smaller bottom line, the budget maintains the city’s two-month operating reserve of $67 million — a cushion city leaders have described as essential to the city’s financial health — while continuing to pay down debt. That includes new obligations tied to Regions Mobile Arena, the $300 million downtown arena project financed in part by a $250 million bond issue the city sold in March 2025, its first new debt since 2013. The arena’s construction has increased the city’s annual debt service by roughly $11 million.

Cheriogotis wrote in his budget letter that even more financial capacity should become available in the years ahead, particularly as legacy debt obligations are fully repaid in 2030. The city has spent more than a decade aggressively paying down older debt — removing more than $201 million from its books since 2013 — and officials have said the remaining legacy obligations expire within the decade.

Transit, trolleys and raises

The budget sets aside $14.9 million for public transportation, covering the cost of finishing the city’s current contract with Via, the company rebranding WAVE Transit into the new Second Line Transit system, along with employee pensions and new trolley vehicles. The transit overhaul has been one of the new administration’s signature projects; the city plans to gradually sell off many of its large buses and replace them with smaller, trolley-style vehicles funded by grants, and the first of those trolleys has already arrived.

City employees can also expect a pay bump: the budget includes a 2.5 percent merit pay increase starting in April 2027.

Public transit funding is one piece of a budget that also continues the city’s investments in public safety and a new Stormwater Management Department, while setting capital project spending at $77 million, including $34 million in debt service. Each of the city’s seven council districts will receive $4 million in funding for projects of its own choosing — a pool of $28 million spread across the city for everything from street work to park improvements.

Betting on the arena and the airport

Cheriogotis’ budget leans on the expectation that two major projects opening next year will begin paying the city back. Regions Arena, which broke ground in spring 2025 and is expected to open in early 2027 in time for that year’s Mardi Gras season, and the new Mobile International Airport are both expected to increase economic activity and tax revenues once operational.

The mayor also cast a vision for reconfiguring Water Street into a mixed-use business corridor, with a design expected during fiscal year 2027. He wrote in his budget letter that past investments in the Mobile Alabama Cruise Terminal helped spark the local economy, and that the arena and airport are positioned to do the same.

Cheriogotis wrote that it is a budget designed to protect the strong foundation they have inherited while building thoughtfully and ambitiously for what comes next.

What comes next for the proposal

The City Council was scheduled to begin reviewing the proposal the following week, the first step in the council’s budget process ahead of the Oct. 1 start of the fiscal year. Council members will hold work sessions on the plan, and the council must adopt a final budget before the new fiscal year begins.

The review will give the seven-member council its first detailed look at the new mayor’s spending priorities. Early reaction from members has focused on the district-level capital money and the funding for Second Line Transit, both of which touch every district. The council’s deliberations will determine whether the $404 million blueprint reaches the mayor’s desk in anything close to its original form — and how the city balances its new arena debt against the neighborhood investments residents have requested for years.

For Cheriogotis, the budget is the clearest statement yet of how he intends to govern a city he inherited with what he described as real momentum. He wrote that it recognizes the measure of Mobile’s progress is not only what we build, but how well the city works for the people who live here.

Update: Council unanimously approves budget with amendments (Sept. 22, 2026)

The Mobile City Council on Tuesday, Sept. 22, unanimously approved the city’s budget for fiscal year 2027, which begins Oct. 1. It is the first budget crafted by Mayor Spiro Cheriogotis’ administration, and council members described the process as one of the smoothest in years.

The General Fund budget the council adopted totals about $404 million. One report characterized the mayor’s proposal as a $414 million budget, while other accounts put the approved General Fund spending plan at roughly $404 million.

Before the final vote, the council adopted several amendments. Most of the debate centered on roughly $1.5 million that had been set aside for Regions Arena operations but that the administration will not need in the coming fiscal year.

What the council added

In a series of 6-1 votes, with Councilman Ben Reynolds opposed, the council moved $900,000 of the unused arena money to other priorities:

• Port City Classic: $400,000. The money goes to Brothers Working Together LLC, which stages the annual HBCU football game at Ladd-Peebles Stadium over Labor Day weekend. The mayor’s proposal had eliminated the game’s funding. The amendment was offered by District 1 Councilman Cory Penn.
• Mobile Public Library: $400,000. District 6 Councilman Josh Woods proposed the increase to support library branches inside city limits. Cheriogotis said he requested the added money after consulting library officials and learning the system did not have as large a surplus as he first thought. The amendment brings the city’s library contribution to $7.9 million, still below the $8.2 million provided in fiscal 2026.
• City events: $100,000. Also proposed by Penn, the increase is meant to support entertainment programming, including more free concerts.

Reynolds won a partial victory with his own amendment, which sent the remaining $600,000 of the arena money to the city’s reserve, known as the unallocated fund balance. He had wanted the full $1.5 million moved there to reduce how much the city draws from reserves for long-term capital spending.

Reynolds said after the meeting that he thinks in this budget, that was avoidable. He said they just had to tighten their belt in some other areas, but it didn’t seem like they had the will on the council to get it done.

A final amendment from Woods updated a line item for nuisance abatement and building demolitions to include debris removal. Reynolds voted against every amendment except his own and that one. Even so, he called the overall plan a good, healthy, conservatively created budget.

Port City Classic debate

Reynolds argued the city should sit this one out on the Port City Classic, noting that $400,000 in state funds recently went to the Mobile Sports Authority, some of which may support the game. The Port City Classic has received roughly $1.55 million from the city since 2023, while attendance has fallen every year. This year’s game between Tuskegee University and Fort Valley State University on Sept. 5 drew 6,061 people, the lowest in its history.

Penn said the money gives the city time to evaluate the game’s performance contract along with those of the Gulf Coast Challenge, the 68 Ventures Bowl and the Senior Bowl. He said amendments he offered were opportunities for quality of life, and they want Mobile to grow.

Cheriogotis called the amendment perfectly palatable but said he still has concerns. He said if they’re putting city dollars into an event, there needs to be a commensurate economic impact or a service to the citizens or an increase in lifestyle and livability for the city. He’s not sure the Port City Classic has provided that yet, but it takes time to establish these games.

Performance contracts face scrutiny next year

Several council members warned that the roughly $8.7 million the city spends each year on performance contracts will get a harder look in the fiscal 2028 budget cycle, and suggested a system of metrics for deciding which organizations keep their funding.

Council Vice President Gina Gregory said they really need to make sure everybody understands that in the coming year, there will be a different process and they will be taking a harder look at their performance contractors and how and who they continue to support with city funds.

Reynolds said the 6-1 vote on the Port City Classic showed how hard such cuts will be. He said he doesn’t know if the willingness is there to make the cuts they should make.

Council President C.J. Small offered a different view of value. He said they don’t make money off the library or free concerts, but as long as citizens are enjoying it. He said he believes fun is money and it costs to have some fun.

Cheriogotis agreed a fair standard is needed but said many recipients, such as the Boys & Girls Clubs of South Alabama, Senior Citizens Services Inc., the Child Advocacy Center and Veterans Recovery Resources, provide services the city cannot. He said he is not sure $8.7 million is too much.

Reserves and revenue

City ordinance requires a two-month reserve, which stands at about $67 million. Cheriogotis said they need to keep a two-month rainy day fund, and he’s aiming for four. He said he hopes revenue beats expectations so the city spends less, and expects the new arena and airport to become major revenue generators in 2027 and beyond.

The mayor also said he wants revenue to grow without a tax increase and again pointed to the Simplified Sellers Use Tax, the 8% tax on many online sales whose distribution has been disputed between cities and counties. He said the Big 10 Mayors coalition will meet this weekend in Huntsville to discuss a legislative fix. He said there is a way to protect their interest and ours, and it’s a goal this legislative cycle.

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