No tax increase necessary as new revenue boosts city’s bottom line
Peachtree City’s financial planners have figured out a way to plug the needed $1.5 million in road and cart path funding into the budget for future fiscal years without needing a commensurate property tax increase … or any other type of new funding mechanism.
Finance Director Paul Salvatore showed a new five-year fiscal model spreadsheet to the City Council Thursday night, showing revenues the city hadn’t been counting on in previous years: the take from the new auto title fee which replaced the “birthday” tag tax on automobiles.
The city’s cut from that switched revenue stream has run about $95,000 a month which has been a major shot in the arm, Salvatore said. The city also recorded a $200,000 increase in property taxes as well, he added.
The city does still plan to spend down its cash reserves over the next several years, but in part that’s due to the fact they’ve crept so high in recent years, nearing double the goal, which is to have the equivalent of 20 percent of the budget in reserves so it can be marshaled in case of an emergency.
The city’s cash reserves have long been touted as a good financial indicator which have also helped the city get an excellent financial rating and thus some of the lowest interest rates available.
Councilman Eric Imker, who was ebullient in pointing out the fact that the city now expects to cover the $1.5 million in annual cart path and road maintenance without a tax increase, stood up from his seat on the dais and applauded, saying he was “flabbergasted” staff was able to make this happen.
“This is huge,” Imker exclaimed. “Tears are running down my eyes right now. This is huge and I don’t think you people really understand how big this is.”
Imker said the development was in part a realization of the city’s conservative revenue projections and spending patterns. He added that he especially looked forward to the budget process including workshops and council meetings later in 2014.
Salvatore cautioned that the latest five-year financial model does not account for any expense swing that might be related to a planned salary study that is expected to be completed later in this fiscal year.
At the same time, it does not calculate any fiscal bump in revenue the city might get from hosting the Diva Half Marathon event nor from its share of the sales taxes that will be collected at Pinewood Atlanta Studios in Fayetteville, Salvatore said.