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PTC manager suggests city tax hike of 0.3 mill

The Peachtree City Council is expected Thursday night to come at least closer to a decision on a recommended tax increase proposed to avoid a shortfall due to declining property values.

Council will discuss the matter during a workshop on the budget scheduled for 6 p.m. Thursday prior to the regularly-scheduled council meeting at 7 p.m. Both meetings will be held at City Hall.

City Manager Jim Pennington has recommended a 0.3 millage rate increase, which will translate to a $31 hike for a home valued at $260,000 whose value did not decrease since last year. Residents whose homes dropped in assessed value from last year to this year will pay less of an increase, unless their value dropped more than 4.6 percent in which case they won’t face a property tax increase at all, officials have said.

That’s because the preliminary figures showed the city’s aggregate property values declining by 4.6 percent from last year to this year, according to city staff.

Without the 0.3 mill tax increase, the city would face a shortfall this year of $529,000 compared to last year’s budget. Because the “roll-up” tax increase won’t raise additional funds overall compared to last year’s budget, the city does not have to advertise it as a tax increase or hold the three public hearings that are necessary when adopting a tax increase.

When the budget was first presented at a June 18 workshop, Councilman Eric Imker said he wanted to have some time to scrub through the budget details so he could recommend cuts at the next budget meeting.

Mayor Don Haddix has said he wants to look at cutting services to avoid a tax increase, and he has suggested cutting recreation by forbidding out-of-county participants.

The city in this current budget year has increased a number of recreation fees and also reorganized the recreation department, trimming staff to cut expenses.

The $28.91 million budget proposed by City Manager Pennington does not include salary increases for city employees, which would cost $280,000 for a 2 percent salary hike.

Complicating this year’s budget are the ongoing negotiations over the local option sales tax (LOST) with Fayette County and the other municipalities in the county. Because the remainder of Fayette County has been growing faster than Peachtree City, the city stands to lose some of its current share in the LOST funding formula.

That process is currently in the mediation stage but appears headed to arbitration, which may be resolved in August, city officials said. The city is looking currently at a $300,000 decline in LOST revenues, but that figure could increase depending on how the matter is ultimately resolved, officials said.

Because of the flux involving the LOST negotiations, council may delay adoption of the millage rate until its second meeting in September. The budget itself must be adopted by Oct. 1.

City officials are also looking ahead to the following budget year with a proposed general obligation bond referendum for road maintenance and repaving work, should the upcoming regional transportation sales tax fail.

The suggestion is that such a tax might have a better chance of getting voter approval because it wouldn’t include controversial new road projects but instead would take care of the city’s existing road network.

The city is projected to exhaust the remaining funds from the 2003 local transportation sales tax this year, which leaves a $2 million annual shortfall going forward to fund road repairs and improvements just for existing roads and cart paths.

A proposed bond of $7.5 to $8 million would necessitate a bond millage rate increase of .424 mills is the bond is approved. Such a bond would fund five years worth of transportation infrastructure improvements, Salvatore said.

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