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PTC blowout: Raise taxes, hike budget 17%

Staff seeks $3.4 million in new taxes; $34.5 million budget includes 3% pay raises for city employees

The skinny budget chickens are coming home to roost with a vengeance — and a big appetite — in Peachtree City.

After 10 years of depending on now-defunct sales tax receipts to pay for routine city maintenance, the City Council is facing a budget blowout for the upcoming Fiscal Year 2015.

City staff at a budget workshop meeting of the City Council Monday night gave the council a choice ranging from a no-tax-increase budget that is still nearly 6 percent higher than this year’s budget to a nearly unprecedented 17 percent blow-up with a stiff tax hike of nearly 2 mills, or about $200 extra a year for the average home in Peachtree City. Part of that would pay for a 3 percent salary raise for city employees.

For comparison, the current FY 2014 budget increased less than 2 percent over the FY ’13 budget, according to the official budget document on the city’s website.

Peachtree City staff advocated for an additional $2.35 million in funding for street resurfacing alone.

That move alone would cost about $135 a year for the owner of an average-priced $246,000 home in the city.

Council was also presented with cheaper options that would lower the street repair funding, but still be a property tax increase between either $20 a year or $106 a year for that same “average” value home.

For comparison, the city in this year’s budget set aside just $768,000 for street maintenance.

The stark difference in amounts is largely attributed to a budgeting decision made by council in 2004 when it decided to shift the cost of road and cart path maintenance from the general fund budget to revenue from the countywide transportation sales tax, which kicked in $2 million a year.

For 10 years, subsequent councils left the property tax rates the same but didn’t use the additional SPLOST funds to “get ahead” of more than traditional annual road and cart path maintenance.

Finance Director Paul Salvatore noted that much of that budget windfall was used to respond to citizen requests to increase police and fire personnel.

The sales tax money has dried up, and the city has to find an answer for funding or deal with what Councilman Eric Imker summed up as “a crappy level of service.”

Staff also proposed a modest $75,000 increase in cart path resurfacing to bring the funding up from $365,000 this year to $440,000 in the 2014-15 budget. That would cost just over $4.25 a year for the average-priced home.

That figure would not accomplish path extensions that have been identified as beneficial to the city — but Councilman Mike King noted that since the cart paths are the city’s signature element, they need special attention.

Imker said like city residents, he also drives around on bumpy paths in his golf cart.

As an implicit admission that the city’s much-vaunted outsourcing of landscaping has failed to produce acceptable results, staff also proposed a .222 mill increase, equal to $22 a year on the average home, to ditch the city’s not-quite-successful landscaping outsourcing service and hire nearly the same number of people it laid off several years ago.

The additional funding of $382,000 would bring the city’s landscaping spending to $961,000 — which would be used to hire 16 full-time personnel who would be responsible for right of way, subdivision maintenance and other landscaping in the growing months, and general maintenance in the offseason, according to Community Services Director Jon Rorie.

Another increase suggested by staff is a 3 percent salary increase for employees, some $405,000 as a placeholder for the pending results of a salary study the city funded this year. Salvatore noted that the budget otherwise does not include any cost of living or merit increases for city staff.

Also proposed is a $200,000 tax hike for bridge and infrastructure maintenance.

All proposed tax increases combined would produce a total of $3.4 million in new revenue.

Imker got in some shots at citizens near the end of the meeting, chiding voters for shooting down a countywide sales tax last year that would have given the city new sales tax money which could have been used for road and cart path maintenance.

Councilman Mike King provided Imker with a reality check, noting that council can’t go back in time and change the results of that vote.

“We have something we have got to deal with,” King said. “It may not make some people happy, it may make some of our staff very sad.”

King said while he hoped not, council may have to consider a property tax increase, and they may have to make cuts to the budget as well.

“If we have to cut some areas, hopefully they won’t be deep, but we’re going to do the right thing. That’s what needs to go out to the people of Peachtree City,” King said.

Councilman Terry Ernst noted that if the city increases taxes, citizens will need to see the results.

Council decided to meet again Tuesday night, following The Citizen’s print deadline, to ask questions of staff and perhaps make some strategic decisions moving forward.

Without the recommendations from staff, the city’s budget stands at $31.27 million, but Salvatore said the tax digest this year will likely be flat with no windfall from increased property values as some might have anticipated.

The city is expected to spend down its reserves by $1.2 million in the current fiscal year’s budget, in large part by design to give property taxpayers a break by paying cash. Even with that decrease, the city still has $10.26 million in its reserve fund, equal to 33 percent of the city’s annual budget. By policy the city has set a goal of having 20 percent of cash reserves on hand — so the city would still be well above that figure going into the 2014-15 fiscal year.

In his presentation to council, Salvatore also itemized how city staff were able to “cover” an additional $1.3 million in costs and reduced revenue during the budget year, which if put into a budget increase of its own would have cost $75 a year for the average home.

Imker at the end of the meeting said he looked forward to getting the full copy of the budget to look for cuts, but Pennington and Salvatore warned him that he wouldn’t find much.

Imker said he would recommend cutting “nice to have” items in the budget.

The current FY 2014 budget — which ends Sept. 30 — is $29.58 million. One mill brings in about $1.725 million in city property tax revenue. The proposed no-tax increase FY 2015 budget is $31.27 million, which includes dipping into the city’s reserve fund.

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Comments

PTC Observer's picture

A council that has some backbone, let's pay for the serves that we moved here to enjoy.

TinCan's picture

17% more for city budget, 21% more from an assessment increase that hit my subdivision for some unknown reason. Ok, I know I should run out and rent in a trailer park if I don't like it. Or move somewhere. I'll wait for the suggestions. Don't mind paying for most stuff, even if I don't use it, but something seems to have gotten a bit out of hand here.

PTC Observer's picture

that's the beauty of local control of services and cost of those services. If you disagree with the increases or level of service, go to the council meetings and let your representatives know about your displeasure. Talk with them after or before the meeting begins and bring your friends and neighbors too. This is not the Federal Government a beast that no one has control over, not even the people running it.

NUK_1's picture

So, everyone else should have voted for a tax hike so PTC wouldn't have to propose one of their own and be held accountable for their/our own budget? Seriously, your days of people calling you a budget "guru" are over.

I see a lot of GOOD in what is being proposed, not that I'm at 100% yet and who the hell likes seeing their property taxes go up rather significantly, but if the services delivered are equal the increase, I'm all for it, especially dumping the terrible out-sourcing decision on Public Works during the Haddix era. That has been a fiasco from the start. It was also sold rather dishonestly by the Mayor/Council at that time as being a real cost-savings on landscaping and trying to ignore the fact that all the PW people involved in landscaping also did other jobs for PW and then whooosh....all gone.

I'll be interested to see the next meeting and what gets put on the chopping block and what doesn't. If you can't give the lean staff a paltry raise, you're looking at the wrong areas to cut as they have done without for long enough.

It's time to pay, people, but demand results and hold people's feet to the fire if it doesn't work accordingly.

during Harry Logsdon's.....ah...leadership...cough, cough.

Chopping block? Why, the PD, of course.

NUK_1's picture

The 25 and the 800K/yr "savings" was on Haddix and that Council's watch, not Logsdon. Oh yeah, and dumping Randy Gaddo and some of REC. Not a defense of Logsdon, but he wasn't the out-sourcing architect here.

It was Logsdon. MacMullen talked about it in Jan, 2009..with Logsdon.

NUK_1's picture

Haddix was still "just" a councilmember when they passed this in Feb of 2009, though he sure did take credit for it later.

PTC Observer's picture

couldn't agree with you more.

We all knew last year this was coming. And it's really about time we get back to basics.

No problem with the methodology they are using and I trust council will make informed decisions and then monitor.

Only problem is the theatrics by one. No one wants the increase, but a whiny child doesn't help.

Josh Bloom's picture

We finally agree on something. Sweet Moses, if Morgan chimes in and agrees than the magnetic poles may have reversed. In regards to the landscaping what happened to all of the equipment that the city owned when they did the landscaping on their own? I have heard rumors, but does anyone know for sure?

I wish we all could support a salary increase for public servants and pay more than 3%, but the sad truth is the income and job situation is JUST not expanding enough to pay for this; Look around; people have lost their pensions, homes, jobs, college students unable to find stable work with benefits and currently the Federal Gov. is trying to force people to pay for health insurance?

Most voters today are anti-tax, they want civic governments to look for New ways to live within their means. Yes, less services, less golf cart paths, less library books, less staff etc... until incomes expand and jobs expand by at least 10% per year then maybe we can consider old options like tax hikes.

The "average tax payer" today spends about 20-30% of income on taxes!!! Don't believe me just ask a Tax Expert for the proof. So that means I live and save on about .70 cents on the dollar.

Welcome to the new norm, the good ole days of tax, tax & tax are Gone with the Wind.

Regards,

RS

Didn't the council just give themselves a pay raise???

Why are they handing out the pay raises in the middle of a financial crisis?? Give us a break!!!

It clearly says employees....not Council Members..

I agree with johenry. I believe the council voted for a pay raise before this budget period........

naturegrl

Gort's picture

In January they gave themselves a 100 percent pay raise.

http://thecitizen.com/articles/01-14-2014/new-mayor-new-council-pay-raise

Remember: If you think Social Security and Medicare are worth saving, vote Democratic.

PTC Observer's picture

Well we have a new budget, but what about the staff's proposal of just a few weeks ago?

"The current FY 2014 budget ?__ which ends Sept. 30 ?__ is $29.58 million. One mill brings in about $1.725 million in city property tax revenue. The proposed no-tax increase FY 2015 budget is $31.27 million, which includes dipping into the city?__s reserve fund"

Re-read the article above and compare it to what actually happened. Who do we have to thank for this conservative approach? What happened to the 3% increase in city employees salaries? Very interesting turn of events and it will be interesting to see what happens in the next year and how much we can delay spending in favor of no tax increases.

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