Hot meeting today for F’ville Council — Vote expected on fire dept. consolidation

This sign urging against consolidation of the fire departments was posted at the roundabout at the intersection of Grady Avenue and Beauregard Boulevard over the weekend. Photo/John Munford.

The Fayetteville City Council on April 23 at 5 p.m. will hold what will likely be a well-attended public meeting at City Hall on the question of consolidating the city’s fire department with Fayette County Fire and Emergency Services. The council is expected to vote on the proposal at the conclusion of the meeting.

Financial information compiled by the city’s financial department will be presented at the meeting. Some of the information was presented at the council’s March retreat while other portions of the data has not been seen by citizens to date.

Those attending the recent joint meeting with the City Council and Fayette County Commission were told that without consolidation, the city would have what will amount to a zero fund balance after five years. But there is more to the story.

While that projection is accurate, another facet of the story is that those diminished funds represent only the city’s unassigned fund balance and do not include, for example, the city’s three-month operating reserve that has been maintained for years.

City staff at the Wednesday meeting will present a side-by-side look at city finances with and without consolidation. As is the custom for Fayetteville’s finance staff, the numbers are always conservative.

Data showing the city with consolidation will have property owners paying the 3.07-mill fire district tax. The council would then roll back the current 3.11-mill property tax rate to .045 mills to offset the increase, thus having the two taxes total 3.11 mills. In that scenario, a home valued at $200,000 would pay $249 in property taxes. With consolidation the city would save $4.35 million over five years.

The county has previously stated that, if consolidation occurs, the new Veterans Parkway station will be constructed and will open in 2016.

Data showing the city without consolidation will have the council likely increasing the millage rate by just over half a mill to 3.715 mills. Property owners would see a bill on a $200,000 home totaling $297.25, a $48.05 increase.

Under this scenario, the city would continue to operate a fire department, would obtain a Ga. Municipal Association loan payable over 10 years to construct and open the Veterans Parkway fire station in 2016, would use approximately $1 million in current impact fee revenues to purchase equipment and would hire three new firefighters which would provide two firefighters on duty around the clock at the new station.

At the outset it would appear that the issue is cut and dried, with the city saving $4.3 million if it gives up the fire department and with property owners paying an additional $48.05 in taxes if the city retains the department.

But there is more to the story which deals not with firefighters, but rather with money and Fayetteville’s near-term and long-term future.

Data compiled by city finance staff did not include revenues from any development that will occur on the 1,200 acres annexed into the city’s west side last year. It has already been established that Phase 1 of the 288-acre Pinewood Atlanta Studio property will be responsible for only 5 percent of property taxes this year, due to an industrial revenue bond (IRB) from the Fayette County Development Authority (FCDA), and with an additional 5 percent added each year until the total reaches 100 percent in 20 years.

The rest of the story involves continued planned expansion on the 288 acres and still other development on the remainder of the 1,200 acres. Unless other IRBs are obtained through FCDA, future phases at Pinewood and the other sites developed likely will pay the full property tax rate.

Similarly, the recently announced intention to construct an upscale residential development adjacent to Pinewood would require that such development pay the full property tax rate since residential developments are not eligible for IRBs, according to FCDA President Matt Forshee.

In terms of the likely or imminent near-term development on properties without an IRB, those properties will pay a fire and property tax rate of 3.11 mills if the consolidation occurs or 3.715 mills if the city retains its fire department. With consolidation, property owners in the annexed areas and elsewhere will pay only .045 mills.

With consolidation, the move will come at a time when Fayetteville is beginning to recover from losing 26 percent of its tax digest during the Great Recession. And it comes at the time when the recently annexed 1,200 acres will bring what is arguably the largest economic development, including significant property tax revenues, seen in Fayette County in decades.

Property taxes account for approximately 25 percent of the city’s general fund revenue. Thus, the city with consolidation would forego significant property tax revenues in the near-term future and, unless the millage rate is increased, into the long-term future as well.

There is yet another factor not mentioned thus far by elected officials. It deals with pending frozen property tax rates in many of the city’s commercial areas. The City Council last year adopted the voter-approved Tax Allocation District (TAD) which covers a large portion of the city’s commercial corridor, especially along Ga. Highway 85. As TAD projects are approved, those parcels will continue to generate property taxes, but those taxes will be frozen for a period averaging 10-20 years until the development bonds are paid. After that point, the properties will generate full property tax revenues.

The council will hear public comments Wednesday before voting on the proposal.

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