Porterdale elected leaders have agreed to go back to the drawing board to suggest ways to stabilize the city’s finances after hearing staffers say the city owed almost $1 million and residents say they would consider a property tax increase if it meant no major cuts to services.
City Council members also voted to tentatively adopt a property tax rate that is more than 35% above the full rollback rate after hearing residents say they would support it if it meant city workers’ hours and, ultimately, services would not be affected.
The Porterdale City Council scheduled a special called meeting for Monday, July 20, at 6:30 p.m. at Grace Baptist Church at 474 Crowell Road in Porterdale for city council members' approval of an action plan for stabilizing the city's finances.
They also scheduled public hearings for July 27 and Aug. 3 on a plan to raise the property tax rate from 14.072 to 18.072 mills to help alleviate the problem which stems from overspending in past years and other actions, officials said.
The increase would generate funding for the city based on rising property assessments and could stave off drastic cuts such as furloughing workers – including the city’s five police officers which may force reductions in patrols, the police chief said.
On Monday, July 13, council members and city officials heard most residents tell them they would support a four-mill increase from the current property tax rate if it meant departments like the short-staffed police department were not reduced.
Residents and business owners gave their opinions after city officials revealed last week they were working to find $1.17 million to pay off debt left over from past years and replenish its reserve fund.
Interim City Manager Bob Witcher gave council members a proposed action plan based on no property tax increase after he said some residents had criticized them for past spending decisions.
"There were some real bad words said,” he said. “Now that we know (support for an increase) we can move a little bit further.”
He said the city faced $997,000 in debts because it needed to repay money taken from the SPLOST and water and sewer funds to cover past debts.
It also owed money to vendors and other governments and needed funds to pay off debt now, according to information made available at the meeting.
The debt amount increased to $1.17 million because it also needed to have $171,000 in its fund balance after auditors said they needed to have two months’ worth of General Fund operating expenses in reserves at the end of the fiscal year to cover operations, maintenance and emergency expenses, Witcher said.
Witcher and City Clerk Linda Hanna said they could not pinpoint a specific action which led to the problems.
However, a number of factors likely combined to bring about the debt, such as overspending by past administrations; and poor budget assumptions which produced less revenue than believed -- such as assuming the city could keep all traffic fines when it must be shared with state and county governments, Witcher said.
Among the bills officials listed for council members were $293,000 from the water/sewer fund, including $79,000 in unpaid bills to the Cornish Creek Water Fund; and $89,000 to the Newton County Water and Sewerage Authority between September 2019 and June 29.
Another $220,000 is owed from the General Fund to agencies including the City of Covington for $72,000; and almost $15,000 to the Georgia Municipal Association.
Almost $137,000 is owed to Carter & Sloope Consulting from both funds dating to November 2018.
The action plan for 2020 for repayment included reducing all employees’ workweeks to 32 hours, including the city's five police officers; as well as a hiring freeze beginning June 30 and no pay increases. Such a reduction could affect police patrols, the police chief said.
Other proposed actions included signing an intergovernmental agreement with the county tax commissioner to bill and collect city property taxes; doing an inventory and evaluation of city assets for their possible sale; a freeze on all capital expenditures; and a two-mill increase in the property tax rate.
Future plans include increasing out-of-pocket costs of health insurance for city employees in 2021 and 2022 and looking for additional budget cuts.
Many residents at the Monday, July 13, public hearing, however, said they felt they could live with a four-mill increase in the city’s property tax rate — raising it from 14.072 to 18.072 mills.
Some residents suggested more public involvement in the city, such as volunteering to cut grass at city facilities.
Most speakers during a public hearing, though, said they wanted the council to find a way to avoid cuts to the police department. Many also praised Chief Jason Cripps for his department's quick response during past incidents.
Hair styling salon owner Michael Maurice said Cripps had changed the image of Porterdale as only being a place where police likely would pull over his customers.
Chuck Myers of the Covington Elks Lodge said the city formerly was known as being drug-infested but was now "90% better than it used to be."
"If you cut police department pay, they're not going to work for you anymore," Myers said. "You can cut people's hours but you can't cut public safety."
A four-mill increase would raise the property tax bill on a $150,000 home by $200 annually, from $703 to $903, officials said.
The estimated tax digest — the taxable assessed value of all real and personal properties and vehicles in the city — increased from $27.9 million in 2019 to $31.5 million in 2020.
Public hearings on the tax increase — which at 18.072 mills will be 35.62% above the full rollback rate of 13.325 mills — are scheduled for Grace Baptist Church at 474 Crowell Road in Porterdale.
Dates and times are July 27 at 11 a.m. and 6:30 p.m., and Aug. 3 at 6:30 p.m.