FAIRHOPE, Ala. — At the end of Monday’s Finance Committee meeting, a majority of City Council members present agreed to put the issue of a sales tax on an upcoming agenda of the council.

The issue could be considered as early as the council meeting on Monday, March 23.

If so, the item will be indicated on the council agenda, usually posted by the City Clerk’s office on Thursday afternoon.

“I’m going to recommend that we impose a 2 percent sales tax,” said Councilman Lonnie Mixon, the committee’s chairman.

Fairhope does not currently assess a sales tax within its city limits.

“There’s going to be a lot of people against it,” Councilman Mike Ford said. “I want us to have a good open debate about it.”

The committee also heard a report regarding a water and sewer rate study conducted by the city. A city official recommended an increase in those rates.

Those recommendations followed a report from Hartmann, Blackmon and Kilgore PC, the Fairhope accounting firm that audited the city’s financial reports for the past fiscal year.

A copy of the Comprehensive Annual Financial Report was provided to council members at Monday’s meeting. A member of the accounting firm said the report will be formally presented at Monday’s council meeting.

Unlike last year, this year the firm also provided additional information in the form of graphs.

“It’s presented in graph form, so you can see some trends,” said Dennis Sherrin, an accountant with HBK, who helped conduct the audit.

Mixon asked him what the trends show.

“The trends are going up,” Sherrin said. “The city is growing. Revenue has grown and expenditures have also gone up.”

The new documents Sherrin handed out included 12 graphs showing various trends.

“In the last few years, the lines showing expenditures and revenues have continually been getting closer (together),” Sherrin said. “This year that cross (of lines) has occurred.”

One of the graphs is entitled, “Governmental Revenues & Transfers Compared to Expenditures (Does not include Capital Projects or Debt Service).”

On that graph, a blue line representing governmental fund expenditures crossed and exceeded a red line showing governmental revenue and transfers in 2005.

In 2008, that blue expenditure line is listed at a point on the graph showing $21 million, and the red revenue and transfer line is at $19 million.

Another graph is entitled, “Comparison of Available Funds to Governmental Expenditures (Does not include Capital Projects Fund).”

That graph shows a red line representing governmental fund expenditures crossing the blue income available from governmental and proprietary funds in 2007 and exceeding it in 2008.

“So, the lines have crossed,” said Mixon, explaining why he believed the city’s financial situation required adding a city sales tax at this time.

Editor’s note: The graphs referred to have red lines referring to expenditures in one graph and revenue in the other. Similarly, the graphs show blue lines representing revenue in one and expenditures in the other.