To avoid a countywide property tax increase, the Fayette County Commission is planning to balance the 2012-2013 general fund budget with $1.4 million in unrestricted cash reserves.
But property owners in unincorporated Fayette County, Tyrone, Brooks and Woolsey will likely see a property tax increase for their fire millage rate, as revenues otherwise would plummet by $750,000 thanks to a 12.8 percent decrease in property values.
A county fire millage rate increase of .523 mills has been recommended by county staff to recoup that amount and cover other items that previously have been paid for by the general fund: administrative costs, vehicle replacements and capital needs.
“We looked at every opportunity to try to cut our budget, but there is simply not any room left to cut from our perspective to reduce that budget,” said County Administrator Jack Krakeel. “In order to do that, you’d have to cut staffing.”
For a homeowner with a home valued at $250,000, they would pay another $50 a year for fire services under the proposed millage increase, according to county Finance Director Mary Holland.
On the flip side, if that $250,000 home had its value decrease to $218,000, the homeowner would realize a $10 increase on his yearly tax bill, Holland added.
The fire tax is not assessed to residents living in Peachtree City and Fayetteville because they have their own fire departments.
The catch is that since most of the large industrial and commercial businesses are located inside the city limits of Peachtree City and Fayetteville, the county fire tax depends heavily on residential property owners. And as their property values have taken a significant drop in recent years, so too have the revenues from the fire tax.
Among the larger capital needs of the fire department is an estimated $800,000 to replace firefighters’ breathing apparatus, according to county financial staff. With the fire tax increase, there would not be enough money to make that purchase when necessary, Holland said.
Using the $1.4 million in cash reserves for the county’s $45.2 million general fund budget would leave the county with $10.8 million of a “rainy day” reserve fund on hand for future years.
The county’s total use of funds is $80.8 million, which includes the $45.2 million general fund, $15.1 million in special revenue funds such as the fire, EMS and 911 taxes, $15.8 million for enterprise funds such as the county’s water utility which is covered exclusively by fees and another $4.6 million for the capital improvement and vehicle replacement programs combined.
In addition to using the cash reserves, the county also expects to save $1.1 million via its early retirement benefit program and gain another $200,000 in revenue by increasing building inspection fees. Another $543,000 in savings was found by closing projects no longer deemed critical and those which came in under budget, Holland said.
There is also a potential to realize a savings of $948,000 which is currently slated for a second phase of Kenwood Park in north Fayette. The county could decide to spend that money elsewhere in the budget, but doing so would not endanger a parking lot expansion that is seen as necessary due to the popularity of the park, officials have said previously.
The commission held a public hearing on the budget at its regular meeting Thursday, and a second one will be held at its June 28 meeting, officials said.
Holland’s budget presentation also contained data about the health of the county’s defined benefits retirement plan for employees. Currently the plan is funded at 118.5 percent of the required amount, which puts it in the top three county-offered plans in the state of Georgia, county officials said.
It was also noted that switching to the defined benefits plan two years ago saved the county money because it is now spending 4 percent of payroll for the retirement plan, whereas before the defined benefits plan was adopted the county was paying 6.3 to 6.8 percent of payroll.
As for the early retirement program offered to 44 employees who have 20 years or more service to the county, some 32 employees elected to participate, leaving a calculated salary savings of $1.1 million. The program will have a one-time cost of $2.8 million which can either be paid up front or amortized over 20 years for example, Holland said.
Holland recommended paying for the cost up front so the remaining years can realize the budget savings without additional costs.