Although its 2002-03 budget

is essentially balanced, the Peachtree City Council still plans to increase

property taxes this year with a 9 percent hike in the millage rate, blaming

the financial fallout from the Sept. 11 terrorist attacks.

City staff initially recommended

a 15 percent millage increase, but council decided Monday night to reduce

the increase to 9 percent. The millage increase council agreed to from

the current rate of 4.315 mills to a proposed 4.70 mills will cost an

additional $31 a year on a home with a fair market value of $200,000,

according to city Finance Director Paul Salvatore.

The increase is necessary to

offset unforeseen increases in the city's property insurance and medical

insurance programs, officials said. The city's property insurance and

pension plan expenses increased dramatically this year thanks to fallout

from the Sept. 11 terrorist attacks that have dampened the stock market

and caused insurance premiums to skyrocket, Salvatore told council.

"Sept. 11 is the biggest

factor affecting this budget," said City Manager Jim Basinger.

Although council was able to

"balance" the budget through over $1.3 million in cuts to the

public improvement program (PIP), the same thing can't be done next year,

forcing some sort of millage increase or dramatic operating cuts, Salvatore

indicated.

"I think we ought to be

accountable for the increases this year," said Mayor Steve Brown.

The mayor also said the city's tax digest took a hit in the industrial

sector as well, and he didn't see that trend improving soon, thanks to

the economy.

Councilman Dan Tennant at first

opposed increasing the millage, saying council had already publicly committed

to balancing this year's budget through state-required advertisements.

But after much discussion, Tennant relented after he talked his fellow

council members down to 9 percent from the 10 percent increase they had

previously agreed upon.

"Nine percent is still

a single-digit (increase)," said Tennant, who tried to get council

to agree on a 7.5 percent millage rate increase but failed.

Facing a projected significant

millage increase next year, some council members argued that an increase

this year would "soften the blow" instead of using a dramatic

increase next year. Without a millage increase this year, staff projected

a 35 percent increase would be necessary next year to balance the budget.

Also, city staff is working

to bid out its medical insurance program and change its pension program

to realize some savings both this year and next, Salvatore said.

Salvatore added that any change

in the city's local option sales tax percentage could cost Peachtree City

hundreds of thousands of dollars. The city is negotiating that percentage

breakdown again this year with Fayette County and its other cities.

"That's our number one

revenue stream," Salvatore said.

The .385 mill increase will

raise approximately $520,000 for the city, but that figure could change

depending on the final numbers from the county's tax digest, which were

not available by press time Tuesday.

The first public hearing on

the budget will be held at Thursday night's City Council meeting, which

begins at 7 p.m. at City Hall.

The decision for a millage

increase comes on the heels of council slashing the city's PIP budget

by $1.375 million several weeks ago. Council also agreed Monday to delay

the debt service on 24 of 36 new police vehicles it plans to lease-purchase,

which would yield a savings of $192,896.

Back

to News Home Page |