The final reading and public hearing for the Porterdale FY2010 budget was held Monday night. The budget was eventually approved (4-1), but only after a heated discussion about a millage rate increase of 3.5 mills to offset decrease revenues caused by the ailing economy.
City Manager Tom Fox prepared the budget packet for the council and said a millage rate increase of that size is what was needed to avoid further layoffs, furloughs or cuts to services.
Fox’s recommendations for the budget included pursing a city homestead tax exemption, contracting with Newton County for tax billing and collection, obtaining a tax anticipation loan if needed, not hiring any new employees, not issuing cost of living increases for employees and approving a millage rate increase.
Councilwoman Linda Finger voiced concerns about not having ample time to look over the packet before voting on it as well as its inclusion of a millage rate increase.
"I just don’t feel the timing is appropriate," Finger said of the depressed economy.
"I respectfully disagree," Fox responded. "There was a lot of time and effort put into this budget."
The budget packet included scenarios with and without a millage rate increase as well as the impact of implementing a city homestead tax exemption for primary homeowners at $5,000 and $10,000.
Porterdale’s current millage rate is 9.156. On a house valued at $100,000, $366.24 would be paid in city taxes in a year. With the 3.5 mill increase, Porterdale’s millage rate would be 12.656, which would increase city taxes on a $100,000 home to $506.24, or an increase of $2.62 a week. The increase would likely result in an increase of $95,372 in property tax for FY2010.
Councilwoman Arline Chapman was quick to point out that many of the homes in Porterdale are valued less than $100,000.
"I’m satisfied with the budget because it offers a couple of contingencies," Chapman said of the millage rate and homestead exemption.
If revenue exceeds what is expected by the city through an increase in businesses or a growing housing market, Councilman Robert Foxworth said the city may not need to increase the millage rate as much as recommended by the city manager.
Millage rates must be selected and approved by June 1, 2010, after the county releases the new tax digest and after municipalities hold three readings and public hearings of the new rate.
In order to give homeowners somewhat of a tax break as well as encourage home ownership in the town where 80 percent of residents are renters, the council is pursing a city homestead tax exemption, which must be introduced and approved in the Georgia General Assembly.
"I had a conversation with Rep. Doug Holt, and he said he is more than happy to introduce that piece of legislation in the House," said Lowell Chambers, councilman.
A $5,000 exemption would save a homeowner approximately $63.28 a year and a $10,000 exemption would save a homeowner around $126.56 a year verses a non-owner of a $100,000 home. The $5,000 exemption would result in an estimated decrease of $7,593 in annual revenue for the city and the $10,000 would result in a $15,187 decrease based on current tax digest information.
Finger again said she needed more time to examine the packet before she felt comfortable voting on it and felt that the city should work within the confines of its expected revenues rather than increase taxes for residents. Fox said the if the council did not approve the budget at Monday night’s meeting, the city could only use 1/12 of their operating budget for each month after the FY2009 budget expires at the end of December.
"The budget that is before us right now is what it will take to keep our level of service what it is today," said Mayor Bobby Hamby. All city departments are operating short-staffed, cost of living increases have not been implemented in some time and employees have had to pay out more for their health insurance.
The budget was approved 4-1 with Finger voting with an emphatic "absolutely not."
In other news from Monday night’s Porterdale City Council meeting:
• The council voted unanimously to have the city building inspector act as a liaison between the architectural firm handling the rebuilding of the Porterdale Gym and the council as well as to have him review the construction’s progress and the project budget. A contract to begin Phase II also was unanimously approved and signed by the mayor. Phase II mainly consists of the construction of the roof, which will stabilize and seal the building that was gutted by arson in 2005.
• The council voted to have the city attorney explore ordinances pertaining to special permits allowing merchants to sell alcohol at city festivals as well as a golf cart ordinance.
• The council approved making Veteran’s Day a paid holiday for city employees.