Birmingham Mayor Larry Langford has refused a city council request to reduce spending in his 2010 budget, despite city financial reports that show the city running a $16.8 million deficit. In a memo sent to city councilors, the mayor’s office admonished them for questioning the finance department’s projections and warned them of pushing the issue.

Birmingham Mayor Larry Langford on the courthouse steps.

“It is not the purview of the City Council to estimate revenue for the city nor is it to alter the estimates of receipts as submitted by the Director of Finance,” the mayor said in the memo. “The law is explicit and clear on these matters. Simply stated, the estimates have been presented in Council Chamber during my presentation in May, and may not be changed to custom-fit the interpretation of data shown in New World ‘in flux’ and changes from day-to-day, due to the city’s ongoing collection of revenue – no different than any fiscal year.”

New World is an accounting software program the mayor’s office has said provides real-time figures.

The mayor’s budget submitted in May projected a year-end surplus of $13 million, but June 30 financial reports show the city running a $16.8 million deficit. The city’s fiscal year runs from July 1 to June 30.

In a budget hearing last week, the city council’s financial analyst, Doug Turner, challenged Finance Director Steve Sayler’s projections. Sayler said that the reports reflect a deficit, but that not all collections were complete.

Sayler also admitted to the council that a line item for $26 million in revenue from the mayor’s budget was in fact coming out of the city’s reserves.

After the meeting, Turner said he looked at city’s financial records to see how big of a difference there was between last year’s June 30 numbers and the audited numbers released in December. That difference was about $2 million, he said. If that’s the typical variation, then it is far from the $30 million of missing revenue the mayor’s office would need to keep its budget balanced.

At the meeting last Monday, the council requested that the mayor’s office revise its budget to reflect the more current 2009 numbers. The mayor has refused, and implied that the council’s demands could hurt the city’s bond rating.

“I respectfully request the Council to fulfill its obligations as directed by state law and not supersede its authority in reviewing and authorizing the FY10 budget,” the mayor wrote in the memo. “As a reminder, the city recently garnered AA bond ratings from three major bond rating agencies; therefor, I do not think it professional or courteous to publicly challenge the professionalism and ethical responsibility of the finance director’s lawful duty to estimate revenue.”

Before being hired at the City of Birmingham by Mayor Langford, Sayler served as finance director at Jefferson County. There he guided the commission through numerous bond deals, including disastrous interest rate swaps.

Those deals are under investigation by the U.S. Justice Department and the Securities and Exchange Commission. Last year Langford was indicted by the Justice Department and sued by the SEC on accusations that he took bribes in exchange for directing that bond business to his friends. He and co-defendants Bill Blount and Al LaPierre have pleaded not guilty and are scheduled to stand trial Aug. 31

Previously: Mayor’s budget has council seeing red