PRICHARD, Ala. — Prichard Mayor Carletta Davis told city council members Tuesday that the city has failed for years to collect millions of dollars in taxes and fees it is owed, as leaders worked to finalize the Prichard budget for the 2026-27 fiscal year and weighed a law enforcement contract with Mobile County.
During a finance committee meeting Tuesday, Sept. 29, Davis pointed to franchise fees, a municipal lodging tax and a municipal gas tax as revenue sources the city has not been collecting.
“It’s time for Prichard to get what it is owed,” Davis said. “Franchise fees are not where they should be. We have not collected a municipal tax for local lodging. We have not collected a municipal tax for our gas even.”
Davis said the municipal gas tax alone would generate about $500,000 a year.
Council trims the Prichard budget to $19 million
Davis’ proposed 2026-27 budget projected $21.8 million in revenue. Council members, however, agreed to reduce the proposed budget to $19 million. They said they do not want the city’s spending plan to rely on money from a project that has not been built.
The mayor’s proposal included anticipated revenue from the planned $93 million Edged data center on Telegraph Road. Davis projected $90,000 a year in property tax revenue from the project and a 46% increase in sales tax revenue, mostly because of the data center.
Councilwoman Annie Williams said that projection was too uncertain to build a budget around.
“That’s revenue that they’re trying to inject into the budget that’s not here, and we don’t know if it’s coming, nor when it will come,” Williams said.
The same concern surfaced at a Sept. 10 public hearing on the budget. Most speakers supported the spending plan, but one resident questioned projecting a nearly 50% jump in sales tax revenue from a data center that does not yet exist. After that hearing, Davis described the remaining work as administrative. “We’re moving forward. It’s just administrative things that we have to tidy up, and we’ll be fine,” she said at the time.
‘Historically they have not paid’
Davis acknowledged that bringing in the uncollected revenue will not happen overnight.
“We know that we’re going to have to take some effort and time to try to go out and get those entities to begin to pay, because historically they have not paid,” Davis said.
She also said the city has been operating under an older $13.9 million budget while spending about $17 million a year. That gap between the adopted budget and actual spending is one reason the council has spent so much time on this year’s plan.
What these revenue sources are
The three revenue streams Davis named are common sources of income for Alabama cities:
- Franchise fees are paid by utilities and other companies, such as power, gas, cable and telecommunications providers, for the right to use city streets and rights of way for their lines and equipment. They are usually set by ordinance or franchise agreement and calculated as a percentage of the company’s revenue within the city.
- Lodging taxes are charged on hotel and motel room rentals. Many Alabama cities add a municipal lodging tax on top of the state lodging tax, and the money is typically collected from guests by the lodging business and passed on to the city.
- Municipal gasoline taxes are levied per gallon on fuel sold within a city’s limits, in addition to state and federal fuel taxes.
Each depends on the city having the proper ordinances in place and on businesses reporting and remitting what they owe. Davis did not say Tuesday which specific entities have not been paying or how the city plans to pursue collection.
The sheriff’s contract was not discussed
The council did not take up a proposed $1.2 million contract that Davis presented last week. That contract would have the Mobile County Sheriff’s Office continue patrolling Prichard while the city rebuilds its police department.
Williams said the city needs the patrols but wants legal advice before acting.
“We need someone in here to patrol this city,” Williams said. “But we’re going to have to get with our attorney and let her give us some legal guidance on it and how this is going to work.”
How Prichard got here on policing
The Mobile County Sheriff’s Office has handled most policing calls in Prichard since mid-June, when local and federal authorities announced the arrest of a Prichard police officer in an ongoing corruption investigation. Several more officers were arrested in the following weeks, including then-Chief Walter Knight.
In late July, a special Mobile County grand jury recommended that Prichard abolish its police department and build a new one. Earlier this month, Sheriff Paul Burch had set a deadline to end patrol and dispatch service in the city. He reversed course after the city sent a letter of intent to finalize a long-term agreement with the Mobile County Commission. Any final contract must be approved by both the Prichard City Council and the county commission.
The city has also hired executive search firm POLIHIRE to help find a new police chief and has approved a $100,000 salary for the position.
A long budget season
Tuesday’s finance committee meeting followed weeks of line-by-line review. Earlier this month, council attorney Moshae Donald-Walker said council members had spent more than 40 hours in a single week going through the mayor’s proposal item by item.
The budget debate is also playing out against a strained relationship between the mayor and council. Davis sued the council in June over what she called an improper investigation of city finances, and the two sides have disagreed repeatedly over spending, transparency and public safety.
Prichard’s fiscal year begins Oct. 1, and Alabama cities generally aim to adopt a budget before the new fiscal year starts. The next step is for the council to finalize its changes and send the revised spending plan back to the mayor.
The data center’s role in the numbers
The Edged data center at the center of the revenue debate took another step forward Tuesday. The Prichard Planning Commission approved the project’s site plan the same afternoon. Edged’s attorney, Doug Anderson, said construction could begin soon and is expected to take about 18 months.
That timeline helps explain the council’s caution. Even if construction starts this fall, the facility would not be finished until well into 2028. Property tax revenue from new construction typically depends on the project’s assessed value once it is built. Sales tax revenue tied to construction materials and equipment would depend on when and where purchases are made.
The project has divided residents. Supporters see a rare new source of tax revenue in a city that needs it, while opponents have raised concerns about noise, water use and the facility’s effect on nearby neighborhoods. In August, the council approved a six-month moratorium on new data centers, but city officials have said it does not apply to the Edged project because its building permit was issued first.
About Prichard’s finances
Prichard, a city of about 19,000 people just north of Mobile, has a long history of financial difficulty. The city filed for Chapter 9 bankruptcy protection in 1999. It sought bankruptcy protection again in 2009 after its police and firefighters’ pension fund ran out of money, a case that drew national attention when retirees stopped receiving pension checks.
Against that background, city leaders on both sides of the current debate have stressed the need for a balanced budget. Davis frames the problem as money left uncollected. Council members frame it as a need to budget only for revenue the city can count on.
Prichard budget at a glance
- Mayor’s proposed revenue: $21.8 million for 2026-27
- Council’s revised figure: $19 million
- Current spending: About $17 million a year, under an older $13.9 million budget, according to Davis
- Uncollected revenue cited: Franchise fees, municipal lodging tax and municipal gas tax; the gas tax alone is estimated at about $500,000 a year
- Data center projections removed: $90,000 a year in property tax and a projected 46% sales tax increase
- Pending: A proposed $1.2 million contract for Mobile County Sheriff’s Office patrols
What happens next
The council is expected to finalize the revised budget and seek legal guidance from its attorney on the proposed sheriff’s contract. Residents can follow the process through the Prichard City Council’s public meetings, which include time for public comment.