Based on what is known now, Peachtree City residents could see a roughly 0.65 mil property tax increase next year, or around $65 for the average home. This is taking into account the current budget projections with the added cost of the recent employee salary increases included, according to Finance Director Paul Salvatore.
Salvatore stressed that this projection doesn’t consider possible changes made in next year’s budget and assumes that “all other things are equal,” meaning revenue and cost projections don’t change meaningfully between now and next year’s budget adoption.
Salvatore explained that the recently implemented pay increases will cost $670,000 above the $270,000 already included in this year’s budget for raises.
The FY 2015 budget, which passed in September based on a plan proposed by council member Eric Imker, included no tax increase for this fiscal year, which began Oct. 1 and runs until Sep. 30, 2015. The budget prepared by city staff, which they said aligned with the stated priorities of council members, included a 1-mill tax increase for FY 2015. Imker’s version was passed in favor of the staff’s version.
Imker’s version of the budget did not have a tax increase this fiscal year, but did include a 0.229 mil increase for next fiscal year. Now, another 0.383 mills will be needed to cover the salary increases, for a total of 0.612 mills.
That figure will probably need to be rounded up to around 0.65 mills, Salvatore said, because of another provision of Imker’s budget plan which led council to change the city’s reserve policy from 20-percent to 25-percent.
“The 0.6 mills amount would allow us to maintain the [25-percent reserve] policy through FY 2017, but reserves would then drop to 24% in FY’s 2018 and 2019,” Salvatore explained in an e-mail.
Salvatore repeated that these numbers were solely based on what he knows now, as these major changes are still very recent.
The FY 2015 budget was passed by a 3-2 vote in what was described as the “11th hour” in September and the dust is still settling on last week’s decision to accept consultant Condrey & Associates’ recommendation to increase the employee salary structure. That vote was also passed 3-2, with Council Member Mike King acting as the swing vote in each case.
King voted along with Kim Learnard and Eric Imker against the proposed millage rate increase that would have brought in $1.7 million for expanded city services, including landscaping/mowing and road paving among other items. Mayor Vanessa Fleisch and Council Member Terry Ernst voted for the tax increase.
King joined Fleisch and Ernst in voting for the salary increases. Imker and Learnard voted no.
King told Fayette County News in an e-mail Thursday that part of his rationale was his expectation that revenue numbers could show growth.
“I do not necessarily see a future tax increase due to projected increases in both property values as well as a markedly up trend in sales tax revenue forecast for the upcoming fiscal year,” King said in the e-mail. “As a last resort should these projections prove false then an uptick of three-tenths of a mill increase would be considered, but not necessarily adopted.”
Salvatore also provided an updated 5-year projection for the city’s reserve funds. Those projections are based on the numbers included within Imker’s version of the budget plus the reserves that will be spent on the salary increases.
The most notable difference comes in FY 2015, where the projected use of reserves jumped from $394,397 to $1,059,308.
Projected reserve spending for FY 2016 jumped from $294,304 to $339,698.
Projected reserve spending for FY 2017 jumped from $239,357 to $3282,175.
Projected reserve spending for FY 2018 jumped from $219,377 to $263,750.
Imker’s budget projected a budget surplus in FY 2019 of $166,244. The new projection anticipates a surplus $125,463.
Imker’s budget projected total reserves of $9,274,338 by FY 2019, which is at a nearly 28-percent reserve level.
The new projection shows reserves of $8,446,019 by FY 2019, which is right at the city’s new 25-percent reserve policy.