ORANGE BEACH, Ala. — Orange Beach city employees will ring in the new year to their first raise since 2008 and it comes on the heels of receiving a $1,700 bonus right before Christmas.

It’s all part of burgeoning revenues and increasingly strong financial position the city finds itself in as the new year begins.

With revenues growing in city accounts, officials seem ready to loosen purse strings necessarily tightened because of a slow economy and the BP oil spill.

“We finally feel like after three years of stretching the dollar we are in a budget mode now where our revenues allow us to make those capital purchases and repairs on a yearly basis without having to go anywhere else for money,” Mayor Tony Kennon said. “We’ve been so frugal for three years and revenues have gone up. We’re in a good budget situation now.”

Both Gulf Shores and Orange Beach use calendar-year budgets – January through December – versus fiscal year budgets of September through September in order to better gauge revenues. Budgets are based on projected revenues which in turn are based on the previous year’s revenues.

With tourist-driven economies, officials from both cities say waiting for revenue figures before finalizing budgets gives them a better perspective on the upcoming budget.

In Orange Beach, that meant the across-the board raises, among other things.

“We went back and forth on whether it was best to give a raise or to give a bonus,” City Administrator Ken Grimes said. “So we have traditionally, for the last three times, we really thought that through as the best means, plus it’s a fixed cost.

“This year’s budget, when they approved it, had two things in it. It had a two percent cost of living raise, which will raise their hourly amount by two percent starting the first pay period in January. The one-time payment that we are getting right now is the bonus for future services.”

Also in the 2013 budget is another payment for “future services,” or as Grimes terms it, “a bonus in our government world.”

And while $1,000 is written into the budget, Grimes said, it could change by the time it’s delivered in December based on 2013 revenues.

“It can go up or down, based on operational budgets in 2013 and what are the revenues going to do based on our projections,” he said. “This year that just went in is $1,700 gross.”

Closer to year’s end, Grimes said, the city’s financial department knows what surplus funds may be available, thus the $1,700 bonus this year.

“People asked why we picked $1,700, that’s kind of an odd amount, but the $1,700 times the amount of employees got us to the fixed cost we were able to spend,” he said. “What we have explained to our employees, because they meet their budgets in each department we have and they meet their operational budgets on the expense side and then we’ve had success in our revenue being higher than projected budgets, we have a gap or surplus money. This money comes out of that surplus money.”

After several years of managing tight budgets, Grimes says the city is now looking to improve existing facilities and equipment.

“In the last four years we’ve proven through some very challenging times economically, the crisis of the oil spill and in some cases philosophical differences on the council,” he said. “If you look at what we did in the last four years, we met budgets every year, we ended up in the black every year with our revenues, and we paid down debt. We paid off the Bay Springs, we bought the events center and we have no debt service on either one of those.”

This year, Kennon says, upgrades are coming.

“We’ve been living off our assets for three years because we’ve made no real capital purchases or capital expenditures to update where we are at,” Kennon said. “So it’s time.”

One of the biggest needs was fire trucks. Two new ones are on order and should arrive this spring.

“That’s $700,000,” Grimes said. “We’ve been putting off buying those.”

The police department is also getting some upgraded vehicles, turning away from traditional Ford sedans, which are no longer made, to SUVs for patrol officers.

“We’ve got five Tahoes coming for the police department,” Grimes said. “They got four back in May so we’ll have nine new Tahoes in the fleet. The reason we buy Tahoes is you can’t buy Crown Vics anymore.

“In the big picture, the Tahoes seem to perform better and our clientele that comes on vacation are typically in an SUV or a van. And we want our officers at eye level with them when they are interacting with them on the streets. And there’s also an issue of their backs getting in and out of the cars.”