Peachtree City residents are facing a potential property tax increase for the coming fiscal year to counteract the projected 4.6 percent decline in citywide property values, also known as the tax digest.
That decline, presuming the figures hold by the time they are finalized at the end of July, would create a $529,000 shortfall.
At a budget meeting Monday night, the majority of council seemed amenable to increasing the millage rate only to compensate for the revenue loss in a procedure called a “roll-up.”
That would require a .3 mill increase in the millage rate, which would equal about $31 additional on the annual tax bill for a home valued at $260,000. Residents whose homes dropped in assessed value from last year to this year will pay less of an increase, unless their value dropped more than 4.6 percent in which case they won’t face a property tax increase at all, officials explained.
City Finance Director Paul Salvatore noted that the city did not roll-up the millage rate last year, which accounted for a loss of about $200,000.
Mayor Don Haddix said he still wanted to look at cutting services so the budget can be cut to avoid a tax increase. When asked which services he’d like to look at trimming, Haddix said he would like to see recreation cut so it only serves city residents and not those who live elsewhere in Fayette County or outside of the county.
The city in this current budget year increased a number of recreation fees and also reorganized the recreation department, trimming staff to cut expenses.
The $28.91 million budget proposed by City Manager Jim Pennington does not include salary increases for city employees, which would cost $280,000 for a 2 percent salary hike.
Councilman Eric Imker said that he would be recommending further cuts to the budget, and that perhaps enough money could be carved out to allow a one-time bonus for city employees instead of a raise.
Salvatore added that Assistant Finance Director Janet Camburn has found a way to save the city about $27,000 in utility costs that were not included in the budget initially presented to council.
There is much more in play for this year’s budget and particularly for future years because of the ongoing local option sales tax (LOST) negotiations with Fayette County and the other municipalities in the county. Because the remainder of Fayette County has been growing faster than Peachtree City, the city stands to lose some of its current share in the LOST funding formula.
That process is currently in the mediation stage but appears headed to arbitration, which may be resolved in August, city officials said. The city is looking currently at a $300,000 decline in LOST revenues, but that figure could increase depending on how the matter is ultimately resolved, officials said.
Because of the flux involving the LOST negotiations, council may delay adoption of the millage rate until its second meeting in September. The budget itself must be adopted by Oct. 1.
City staff also unveiled a recommendation Monday night that would fund road maintenance and repaving work if the regional transportation sales tax referendum fails. In that case, the city could propose a general obligation bond referendum that would propose Peachtree City projects only.
The suggestion is that such a tax might have a better chance of getting voter approval because it wouldn’t include controversial new road projects but instead would take care of the city’s existing road network.
The city is projected to exhaust the remaining funds from the 2003 local transportation sales tax this year, which leaves a $2 million annual shortfall going forward to fund road repairs and improvements just for existing roads and cart paths.
A proposed bond of $7.5 to $8 million would necessitate a bond millage rate increase of .424 mills is the bond is approved. Such a bond would fund five years worth of transportation infrastructure improvements, Salvatore said.
Imker noted that in future years, the city is slated to have paid off the airport authority bonds and the refinanced library construction bonds which will yield some savings to the bond millage rate.