Mayor Haddix says PTC is already ‘understaffed’

Peachtree City Mayor Don Haddix. Photo/Staff.

Budget projection ‘model’ by staff starts off with 38% tax rate hike, no cuts in staff or service

With a projected shortfall of $757,128 in the upcoming 2010-2011 fiscal year — and a projected $621,674 shortfall...

in the current year’s budget — the Peachtree City Council is facing

tough decisions at its retreat at City Hall Friday and Saturday.

Mayor Don Haddix foresees a small tax increase and a draw-down of some of the city’s reserve cash but downplays significant staff layoffs or extensive use of furloughs.

City staff is projecting a 0.269 mill property tax hike for the fiscal year starting in October, equivalent to a $26.90 property tax increase for a home with a fair market value of $250,000.

Finance Director Paul Salvatore said those models calculate the city’s service levels remaining the same as they are today, though staff has been preparing figures on how furloughs might help save the city money despite how tricky they would be to implement from a service delivery standpoint.

The outlook for property owners gets worse farther in the future, as Peachtree City’s financial staff projects property tax increases to help balance the city’s budget for the next four years with no cuts in personnel or services — overall, a 38 percent jump in the city’s tax millage rate.

It’s in the following years that staff is projecting significant millage rate increases: 0.6 mill for FY 2012, 1 mill for FY 2013 and 0.250 mill for FY 2014.

The total projected tax increase over four years would be 2.119 mills. The current city millage rate is 5.533. It would top out in FY 2014 at 7.652, according to staff documents posted online at the city’s website in preparation for the retreat.

The combined effect of those rates would result in a property tax increase of $211 for a home valued at $250,000 over that four-year period, according to the city’s financial modeling.

It also could be that council decides to adopt service cuts that could shrink or eliminate a .269 mill property tax hike in October, Salvatore said.

Yearly increases in the millage rate would be 5.2 percent next year (beginning Oct. 1, 2010), 11.1 percent in FY 2012, 16.7 percent in FY 2013, and 3.6 percent in FY 2014, the city projections state.

These figures are model projections only from city staff, not recommendations, and are intended to provide a starting point in discussions among council members, Salvatore said.

They will have their first public discussions on the matter this Friday and Saturday although the first draft of a recommended budget from city staff won’t be coming forward until June.

City staff wants council input on the 2011 budget in terms of the millage rate, use of the city’s reserve fund to balance the budget if any, any changes to employee benefits and any potential salary increase. The projected budget includes no salary increases for the coming 2011 fiscal year.

Staff projects an increase in the city budget from the projected revised figure for this year of $26.541 million to a new top of $29.881 million in FY 2014.

Mayor Haddix said he couldn’t speak for the rest of council but said he would prefer to have a quarter mill tax increase and use some of the city’s reserve fund to meet a projected $757,000 shortfall in the upcoming 2010-2011 fiscal year.

Haddix said he doesn’t anticipate any “significant” staff cuts because that would equate to service cuts which would diminish the city’s appeal to companies which might be willing to move here.

“That will kill us trying to get employers here,” Haddix said, adding: “We’re understaffed now.”

“I don’t know where we possibly could reduce any significant number of people. I have no idea where they would come from without shutting down some associated services completely,” Haddix said.

Likewise, Haddix said while the use of furlough days can’t be completely dismissed the thought is “not appetizing” because it would boil down to a cut in services.

But should a two-mill increase be necessary at some point, Haddix said he would rather cut services first than enact such a tax hike. Haddix hopes to lower the city’s millage rate in the future.

Council must also address newly-anticipated shortfalls in the current year’s budget. First on the agenda is plugging the gaps in this year’s city budget and figuring out how to balance next fiscal year’s budget.

“Considering all over/under amounts for revenue projections, staff currently projects a net revenue shortfall of $621,674” for this fiscal year, according to city staff documents prepared for the retreat. That’s for a new projected FY 2010 budget of $26.5 million.

Even with the expected shortfall, city staff projects the city will end FY 2010 Sept. 30 with a 32 percent cash reserve, a percentage many local governments would envy.
The city’s reserve fund should ideally be at 20 percent of the annual uses of funds for the city, Finance Director Salvatore has said previously.

To address the shortage in this year’s budget, the “city manager has instructed all directors and chiefs to identify 2.5 percent of their divisions’ budget for possible cuts,” the city staff documents say.

Those cuts will be discussed at the end of the retreat Saturday; the discussion is tentatively set to end with a discussion from 2:15 to 2:30 p.m. on budget guidance for the current fiscal year and also the 2011 fiscal year.

The worst shortfall this year for city revenues comes from recreation program fees, which are down by $200,000 from expectations, the city documents show. The city has also taken hits in electric franchise tax ($139,000); interest earnings ($148,513); city court fines ($128,500) and building permits ($113,052).

Haddix said the city can use remaining revenues from the 2004 transportation SPLOST to help with budget shortfalls, but a new SPLOST will be needed in the future to avoid property tax increases, he said. The city used between $1.8 and $2 million a year to pay for road and cart path repair and improvements and without that SPLOST such work will come from the general fund, Haddix said.

The city’s review of the remaining SPLOST dollars shows that with the $19 million east Fayetteville bypass cancelled, there will be enough to do all of the city’s SPLOST projects as well as those in all other jurisdictions in the county, Haddix said.

Haddix said the city needs to increase its funding for the city’s development authority, currently budgeted at $35,000 a year. The authority, which has been working largely on redevelopment and business-related issues involving the village centers, needs a full-time staffer to advance the authority’s goals, Haddix said.

While the county has a separate development authority to pursue corporations and businesses, the city is responsible for filling its commercial and office spaces, Haddix said.

Other areas to be discussed at the retreat:

• The most recent monthly average home sales price in Peachtree City was $327,625 for single-family homes and $210,000 for townhomes and condominiums, according to a city study.

The average monthly price has yo-yo’ed over the past 18 months, the study shows, with the low point of $250,000 having been reached in December 2008 and January 2009.

• On the retail side of the equation, Peachtree City’s vacancy rate so far in 2010 is 11 percent of available retail space, down from 13 percent for 2009 and up from a rate of 7 percent in 2008, the city study shows.

Out of 1.91 million square feet of available retail space inside Peachtree City, 218,054 square feet are vacant, the study shows.

The two oldest village shopping centers are suffering the most from the economic downturn, the study shows. Hardest hit is Glenloch Village with a 48 percent vacancy rate. Next is Aberdeen Village with a vacancy rate of 22 percent.

• In the city’s industrial park, nearly 47 percent of the available space is empty, according to the city study. The city has more than 1.4 million square feet of industrial buildings, with 678,281 square feet empty.

The bulk of that empty space is represented by the two tracts formerly occupied by the now defunct PhotoCircuits company, once one of the county’s largest private employers. The empty PhotoCircuits buildings are 318,000 square feet of the total, the city study shows.

The city still has 473.23 acres of empty industrially zoned land available, same as last year, the study shows.

• The city staff is urging the City Council to “revisit what defines village center and neighborhood center and incorporate ‘new vision’ into [Peachtree City’s] comprehensive plan.”

In a document called “Re-imaging the Village,” Interim Community development Director David Rast suggests doing away with the distinctive village signs and re-branding each village with more contemporary logos.

[Source documents for this story are on the city's website.]

— Additional reporting by John Munford

inkslinger
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Chief Skip and PTCPD

Can someone explain why, we are down $128,500. in court revenue so far this fiscal year?

PD has new cruisers, newly redone police station, all the staff you have asked for and an accreditation that included the mayor and assorted PD employees who were along for the trip to the ski resort (something, I might add, has never needed to be done before). You have ATV's a new (two?) dogs, every imaginable piece of equipment for a city this size. So, where are the arrests, the tickets, the badly needed revenue?

We appreciate what you do, but you need to do more of it.

Mike King
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PTCGOIL

Sure old Otis has a new cell, Barney is believed to have been authorized two bullets, and Aunt Bee's cell curtains have been replaced, and with Andy (Skip) and Barney taking to the cart paths on those newfangled four-wheelers the revenue is sure to increase.

Teenagers being themselves, children fishing and catching frogs, and the old folks catching a sunset by the lake is sure to increase their prospects now that they are certified along with their two new dogs. Hell, they stand a good chance of catching an old hippie democrat taking a toke on a roach!

One serious question, however: Are our new canine officers required to carry poop bags?

To quote a good friend: "Ain't it a great life!"

inkslinger
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Poop Bags

I believe Steve Brown supplies those from the Dog Park funds. They even have our logo and a lovely photo on them. Although, instead of "Plan To Stay", they say "Plan Your Poop". Custom made. Nothing but the best. PTC PD doggies can't wait to use them when the officer pulls one out.

mudcat
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Plan To Poop, Goil. Plan to poop in PTC

That's what it actually says on the custom made poop bags. That's on the front on the outside of the bag. What most doggies and their owners don't know is that Steve Brown's picture and his campaign website is on the inside - which becomes the outside after the owner of the smelly dog scoops the poop.

Why people have dogs instead of cats is a mystery to me. We cats clean up after ourselves and we are much smarter than dogs.

jevank
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Now that's funny, Mudcat

That would make a great picture, wouldn't it? Someone holding a bag with Steve Brown's picture on it while turning their head away and plugging their nose. Kind of makes you want to turn it back the other way...poop and all.

inkslinger
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Otis, Barney, Andy and Aunt Bee

have all the tools and staff they need now.

We need more of the cruiser sitting over the hill waitin' for the speeders coming down the road. More of the turning on of the blue lights when someone rolls thru our intersections instead of stopping first. How many have been driving with no headlights for the last 4 months of Noah's Ark weather and been pulled over for that?

Does anyone know if the PD can patrol store parking lots for handicap sign violators? Criminee, those fines are $500. a pop, if I remember right. Ask to see if the name of the driver/passenger matches the permit. Or is that too invasive of our privacy? If you have anyone in your family who really needs those spots, you wouldn't feel that way.

Nah, there are plenty who use our main roads and shopping centers "just passin' thru" that can supply us some revenue. Or, who live here and just wanna hope the odds are with them when they test the system.

Bonkers
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Handicap permits

are only for those who want a good parking place 90% of the time.
I personally know some of them. Selfish and better people, I suppose.
I also know some who are handicapped but prefer the exercise!

normal
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Buck up and work harder

Seeing as you know you are broke. Stop crying in your beer at the Y not bar where losers hang out. Work harder, enjoy what you do, 5 year pay and benefit FREEZE until we get back on our feet. If you have a problem from a crabby employee tell them to quit or fire them. There are 289,000 unemployed Georgians in the metro area. They will be more than happy to take the job. And have a nice day

mudcat
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Hate to agree with Bonkers, but it does sound a bit odd

If it is illegal, it shouldn't be.

And like he says, cut off the funding or divert it to somewhere else. What is so hard about that?

Filling up some vacant shop space and vacant land and buildings should be a priority for you, Mr. Haddix. How about gettin' with the program?

escaped
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This works

If this really is Don Haddix on this forum I appreciate you paying close attention to different perspectives in the PTC community.

Call me naive, but I just moved to PTC from an another Atlanta suburb and I love PTC. I love the paths, the neighbors, I even love the fact that police pull people over for having tail lights out. And believe it or not, I know you do not hear this much, I even love the higher taxes.

Let me tell you why, I just moved from an area riddled with economic development and low property taxes, and trust me the results are not good. When we moved to that other area over 15 years ago, it was simple but nice and when development started, that was nice to. New clean stores, not too much traffic. But in the last 5-7 years it has really taken a turn for the worse. This city is in rapid decline, crime is skyrocketing, and traffic is insane!

The really funny thing is that in this city that is in decline the mileage rate is very low compared to PTC and yet people in that city still complain about property taxes being too high. They are complaining because as their taxes are going up, they do not see that they are getting good services. PTC has always had higher property taxes compared to other communities and PTC has always stood head and shoulders above those other communities when it comes to services. I say we maintain that arrangement.

At least in PTC I can see what I get for my property tax. And again I love it. If we need to raise the rates by 38%, so be it. You have my support. That is money out of my pocket, but I have seen the difference of low property taxes in other cities and I do not like it.

The bottom line is that the economic downturn is causing inflation to outpace property values. Which means that every city's expenses are going up while it's income is going down. It may be that PTC will need to make cuts in services, but in this situation more property tax is going to be necessary and perfectly understandable given the decrease in property values.

And by paying that extra tax, I have confidence it will be used to keep PTC what it is today which is distinguished in excellence when compared to dozens of other small cities in metro Atlanta. I don’t want tattoo parlors, movie theatres, title loan sharks, rundown apartment complexes, check cashing dens, and pawn shops to spring up in PTC in an effort to keep my property taxes low. I would much rather pay higher taxes.

If people move away from PTC because of a tax increase, I wish them luck. You get what you pay for and I seriously doubt they will find a nicer place for their tax dollar.

The difference is clear.

Robert W. Morgan
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A tax increase is fine with me

"escaped" has got it exactly right. You get what you pay for. The real issue should be the value of your house (average around $250,000) vs. $26 added to your annual tax bill.

It is really pretty simple, pay the extra taxes, maintain services and the appearance of PTC and housing values will hold and increase. OR we can not raise taxes, reduce services, have a higher crime rate, higher insurance costs, rundown roadways and cart paths and eventually lower house prices and that "Riverdale" look that everybody gets so upset about.

That's not to say we shouldn't be vigilant about eliminating questionable expenses like superfluous department heads (remember the Asst. City Manager) and wasteful ideas like new village signs.

Those that insist we must not raise taxes on some principle, need to consider whether their principle is more important than everyone's property values. maybe it is to some, but the job or our leaders is not to pander to small special interest groups - it is to do what is best for all the people in the city and IMHO that would be to maintain property values. If you want to think even more deeply about that, consider economic development, healthy retail centers and job creation. Isn't all of that much more likely to occur in a well-kept and attractive community with stable house values? Huh?

Spyglass
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Well said..

I know I didn't move to Peachtree City for what it didn't offer. I moved here because for my Family, it was a MUCH better place to live.

Imker
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True Budget Problem for PTC is $1.2M in FY2011

Right off the top, part of the problem is misleading numbers. The very second sentence in this article is wrong.
"With a projected shortfall of $757,128 in the upcoming 2010-2011 fiscal year ... " The true shortfall for FY2011 is currently estimated at $1,214,000. The model is including not only the $757K deficit but also an embedded 0.25 mill increase. A 0.25 mill increase is about $457K. So you have to add that to the "deficit" to get the real total problem for FY2011.
I have asked the city finance director to remove millage increases in his presentation at retreat so we can all see the true problem in all the outyears. Yes, the numbers are still scary and Yes it was preventable!

Poor, very poor financial management lead to this problem. How is it that we've had FOUR (4) tax increases since 2002 from a millage rate of 3.836 to now with a millage rate of 5.533 and IT'S STILL NOT ENOUGH! The model says we are facing over a $15 million dollar problem over the next 5 fiscal years. Even after all the tax hikes we've had up to now. Everybody out there knows govenment cannot control themselves when they see money. So sorry.

However, we will have an option to consider an FY2011 budget without using tax increases, without using city cash reserves and NOT cutting services.
I really wish folks would stop with the scare tactics saying its either a tax increase or cutting service. That is not a true statement as we will see at the retreat. I've seen enough scare tactics pulled on our citizens to know the difference.

Robert W. Morgan
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I'm with you, Mike. Good ideas

My favorite is to clean up the Tourism/Dev. Authority mess created by you know who and to save some money at the same time.

Taking that idea 1 step further, the Fayette County Development Authority position is vacant and being advertised. Since we know business relocation and expansion will be limited until we neuter Prezbo in November and get some serious tax cuts going, is it not logical to consider that Peachtree City and Fayette County share the funding of that job? Obviously no need to replace the Tourism Director (at $92k, for God's sake). So we pay half of a reasonable salary out of the hotel/motel tax and get an active effort at bringing in new businesses to PTC and Fayette County (and yes, growth in both areas helps everyone). Does that make sense?

And then of course you look real hard at city staff salaries and if we see things like $92k for Tourism or $120k for an Asst. City Manager, we get out the axe.

Bonkers
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Morgan: more serious than you indicate

You are a minnow nipping at a piece of fatback on a hook when you say cut this guy and that guy.
Where is the greatest money? The very highest percentage?
Add up the protection departments and subtract from the total labor costs and if you cut that number left in half, it wouldn't balance the budget for next year and several more!

Don Haddix
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Haddix: Quick Comments Morgan

What you are proposing on the H/M is illegal. the old DevAuth getting the H/M was illegal as well.

As for the Asst. City Manager that position has been gone for close to a year now.

Adjustments on Tourism are in work. That is all I will say at this time on that matter.

Just an FYI.

Now, I have to go to a meeting.

Bonkers
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Mayor: Illegal?

OK, do what Reagan did, cut the T/A funding. No funding, no costs!

Reagan destroyed OSHA and several other departments that way! The heads sat in Washington with no operating money and only responded somewhat upon a tragedy.

Robert W. Morgan
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Glad you are looking at the hotel/motel tax, Don

Sure don't want anything illegal popping up, but looking at Tourism with some creativity would be a very good thing.

Economic development is still very important.

Mike King
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A Couple Ideas Mr Mayor/Council

First, let me say that the efforts made by you and Council thus far are appreciated and have not gone unnoticed.

To begin, we fund the Tourism Board at $497K annually and the Development Authoruty at $35K annually. The priority is dead wrong, simply reverse the funding totals and transfer remaining 'employees' to the Development authority so they can find actual work. I cannot speak for all, but logic would tell me that far fewer folks would consider Peachtree City over Panama City for a weeks vacation or even spring break.

Next suspend all take home of city vehicles. With gasoline fast approaching $3 per gallon, this is an expenditure that can be avoided. More 'foot patrols' in lieu of drives through Kedron, Braelinn, or Aberdine. Revert back to police bicycles on the cart paths instead of those all terrain monsters that a previous police chief duped you into buying. While you're at it, just how many people employed in the Recreation Department get sedans? We seem to see them riding about town continuously.

Force 'staff' to take a ten percent cut across the board in funding. Eliminate merit bonuses until the end of the economic downturn, and limit only to hourly employees. Furlough Department heads for at least two pay periods, we all know their respective charges can get along quite well in their absence. If they can't you should consider replacement.

Yes, I can be a loose canon, but prove me wrong!

Don Haddix
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Haddix: Mike

I am answering your post because you covered a lot of issues in one place. Most assuredly I didn't come on to get involved in a big debate here with the week ahead I have.

We do have a lot going on to try to get PTC on the correct course for the future.

Indeed we have to increase DAPC funding. But Tourism is not funded out of the General Budget, but from Hotel/Motel Tax, which use of is strictly mandated by the State.

We are working on changing the H/M program and other issues to get a lot more effective use of the funds. But we cannot just transfer it to DAPC, as it was in the bad old days, because that simply is illegal now as it was then.

On take home of emergency vehicles we went over that with a fine tooth comb last year. It actually saves money to allow them to go within a certain radius of PTC. As well the enhanced response times for call ins is well worth allowing it. They cannot be used for personal use and there are three radial distances for taking home, the second and third of which has a charge per month on the employees.

Additionally we are using more bike patrols already. Chief Clark has been very sensitive on those issues.

As regards Rec please remember we do not buy new vehicles for everyone each time. When a police car maxes out at 125,000 miles it becomes an auxiliary police, Rec or some other department vehicle until it dies. Same with Public Works trucks getting bumped over to Rec and others that do not have as much wear and tear.

As for a 10% cut across the board on Staff, first of all not all Staff is high paid and second, trying to do selective cuts like that means law suits we would lose. Employee laws governing municipal employees is not the same as private sector.

Further, we brought in an auditor last year to review pay, jobs and so forth. PTC was found to be middle to low on pay structures overall and any out of line job descriptions were rewritten.

As far as Merit and COLA pay goes, that was ended beginning October 1, 2009.

Finally, on Department Head pay, what is the point of furloughing salaried employees?

You know me, Mike. I am digging into and looking for every reasonable cut we can make. But reality is, while there are a few more adjustments we can make for efficiency, the fat is gone. We are at the point where it is service cuts, use the Reserve, a small tax increase or a combination thereof.

Like anyone running a household budget knows you can only cut so much spending until you hit the point of having to do without or find more money.

Hope that helped clear up some issues, even if it wasn't the answers you wanted to hear.

PTC Observer
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Cut Services? Mr. Haddix?

Please be specific on the service cuts and what each cut would save.

Thanks

Bonkers
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To: Mike (cut and slash)

I recommended "zero" budgeting for 3-4 years, at least.

As to the half million of tax money spent on the airport and Tennis Center, etc., the airport and Tennis Center would be forclosed upon with your suggestion!
It may come to that anyway.
I can't agree with keeping all headcount and just cut their wages and benefits. We are headed for 3-4 years of budget shortfall, minimum.