With Peachtree

City's financial belt tightening looming in the future, a series of financial

policies have been adopted by the City Council to help prevent cash shortfalls.

One of the

key policies relates to maintaining adequate funds in several reserve

accounts should the city's revenues slow beyond expectations. Finance

Director Paul Salvatore, who proposed the policies, said budgetary reserves

are also necessary to keep from borrowing funds at the beginning of the

fiscal year to last until the county issues tax payments to the city.

The city's

cash reserves had reached $2.8 million at the beginning of this fiscal

year, but several key expensive items have reduced it to an estimated

$1.5 million at the end of the year, Salvatore said. The $493,000 plan

for employee pay raises and the hiring of 12 new employees played a large

role in that, Salvatore said.

The cash reserve

was used to balance the budget for those items although that is not the

city's typical manner of handling expenditures, Salvatore said. But it

was necessary since the City Council rolled back the millage rate to prevent

an increase in property taxes, he said.

The reserves

will also allow for unforeseen capital projects to be funded as necessary,

Salvatore said. This is particularly important because the city's impact

fees for new homes will dwindle in the future as new home construction

slows down.

"In general,

as Peachtree City changes from a rapidly-growing community to one that

is at full build-out, it will become more challenging and especially important

that we keep tight control over annual operating and capital expenditures

and maintain adequate reserve balances," Salvatore said.

The new reserve

policies, which will go into affect for the 2002 fiscal year, also focus

on keeping 60 days of operating cash on hand to prevent using short-term

borrowing at the beginning of the fiscal year until property tax revenues

are put on the books, Salvatore said.

Back

to News Home Page | Back

to the top of the page