Meeting Type: BCC Regular Meeting
Meeting Date: 8/5/2025
Item Status: New
From: Tara Hazelbaker, Director of Finance
Submitted by: Tara Hazelbaker, Director of Finance
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ITEM TITLE
Title
Repayment from General Fund to Oil & Gas Trust Fund
End
STAFF RECOMMENDATION
Recommendation
Approve repayment of $3,662,327.71 from the General Fund to the Oil & Gas Trust Fund.
End
BACKGROUND INFORMATION
Background: In 1989, legislation created a mechanism allowing Baldwin County to accumulate oil and gas severance funds in Oil & Gas Trust Fund. Interest earned was structured so that 90% benefits the General Fund, while 10% remains in the trust for long-term capital strength. In 2013, a one-time draw of $15 million was approved to help purchase the South Alabama Mega Site-a 3,000-acre certified industrial property in North Baldwin County. This investment positioned the County for major industrial and economic development, ultimately leading to the Novelis project, a landmark facility by a global aluminum manufacturer.
Current Situation:
• A remaining balance of $3,662,327.71 is owed from General Fund to the Oil & Gas Trust Fund from the original drawdown.
• This amount has been accruing interest, and journal entries have tracked payments and liabilities between the funds over time.
• Given Baldwin County’s strong and sustained cash position, the recent launch of its investment program, and the growth of the trust corpus (now exceeding $16 million), repayment is both financially feasible and strategically beneficial.
Rationale for Payback:
• Eliminates ongoing budget obligations: no future interest transfers required.
• Reinforces financial integrity and trust sustainability.
• Ensures full investment flexibility in Oil & Gas Trust Fund without impacting liquidity or operations.
• Aligns with best practices for interfund obligations and demonstrates proactive fiscal stewardship.
Previous Commission action/date: N/A
FINANCIAL IMPACT
Total cost of recommendation: N/A
Budget line item(s) to be used: N/A
If this is not a budgeted expenditure, does the recommendation create a need for funding? N/A
LEGAL IMPACT
Is legal review necessary for this staff recommendation and related documents?
N/A
Reviewed/approved by: N/A
Additional comments: N/A
ADVERTISING REQUIREMENTS
Is advertising required for this recommendation? N/A
If the proof of publication affidavit is not attached, list the reason: N/A
FOLLOW UP IMPLEMENTATION
For time-sensitive follow up, select deadline date for follow up: N/A
Individual(s) responsible for follow up: Department of Finance & Accounting
Action required (list contact persons/addresses if documents are to be mailed or emailed): The Finance team will execute a journal entry dated July 16, 2025, eliminating a recorded liability and restoring the Trust’s full investment capacity.
Additional instructions/notes: N/A