City Manager James Stephens presented three proposals for the 2021 fiscal year budget at Tuesday evening’s Euharlee City Council meeting.
Heading into the next fiscal year, he told council members the projected general fund budget is $2,950,579. The anticipated SPLOST funds for 2021 are projected at $615,000, while the City’s projected infotech budget is tabbed at $92,025. The Euharlee Police Department’s special budget, he said, was projected at $42,192.
“It takes into consideration the impacts that we’ve experienced from the pandemic,” Stephens said. “Earlier in the year, I was very concerned that our local option sales tax (LOST) may run very low … it looks like it will probably come in right on what the 2020 budget was.”
Still, he said the City’s facility rental revenues are down significantly, as is the municipality’s excise tax collections. Title ad valorem tax (TAVT) revenue, he said, is also down.
“I think the explanation for that is probably a lot of residents were reluctant to purchase new vehicles with the economic uncertainty because of the COVID,” he said.
Stephens said he anticipates the City beginning FY '21 with a total fund balance of $859,000.
“Although our LOST really came in as budget, we have had about $85,000 of impact on our revenues,” he said. “With that being stated, we’re actually going to increase our fund balance for 2020 by $60,000 … that’s because we applied for and received a significant amount of CARES Act funding that came from the federal government and flowed through the state.”
He also noted that the City’s projected FY '21 budgets do not include any new revenue streams.
“Our average, annual monthly expenditures are approximately $166,000,” he said. “So we’re starting the 2021 [fiscal year] at 5.87 months of fund balance.”
The first option presented to council would see the City do away with its property tax collections altogether. Stephens also said the proposal reflected no changes in compensation for City staff.
“It actually calculates as a deficit of $177,000,” he said. “But even with that deficit number, based on our our beginning fund balance, we would end the year at 4.10 months of fund balance.”
Stephens said the City’s current policy requires the City to maintain — at a minimum — the equivalent of four months of annual operating expenditures within its general fund balance.
“That would be cutting no services, but we would be utilizing a significant amount of fund balance,” he said. “In 2022, we would have to significantly cut services, or have another revenue stream in place, or be prepared to put a property tax back in place … to me, it’s not the most advantageous option that I’m presenting.”
Option two also entailed no property tax collections, but did include a 3% cost of living raise for City staff. That pay increase, Stephens said, was equivalent to roughly $50,000.
“That would leave us with a deficit on that proposed budget of $247,000,” he said. “And that would actually put us below the four months of required fund balance, it would put us at 3.86 months.”
Option three, however, would include that 3% cost of living raise and property tax collections “consistent with what we’ve billed on our tax levy for the last two years,” Stephens said.
Under the proposal, he said the City would end the fiscal year with about 4.59 months of fund balance.
“It would be utilizing $97,000 of our accumulated fund balance,” he said. “Based on the impact on our excise taxes, TAVT and facility rentals, I anticipate 2021 also being a very slim year from those revenue standpoints.”
The proposal, he added, is based on a rollback rate that would generate the same tax levy as the previous fiscal year. Stephens said the City’s millage rate for FY '20 stood at 1.64 mills.
“I anticipate the rollback will be bigger than last year, but we will generate the same revenue for the City,” Stephens said. “With that $97,000 deficit, with us utilizing fund balance and with us being compliant with our own policy, that is considered a zero-balance budget for State purposes.”
Stephens told the council that he felt comfortable with the third option even with the deficit in mind, since he does not believe the downturn in excise and TAVT taxes is likely to be permanent.
“I hate to look at headcount reduction because of a circumstance I believe is temporary,” he said.
Council members took no voting actions on any of the budget proposals at Tuesday’s public meeting.
“It bothers me to tell them they’re not going to get a raise,” Councilman Jo Turner said. “I would be willing to keep our property tax for one more year if it ensures we can do stuff with our employees.”
Councilman Tim Abbott, however, said the bigger issue is finding ways for the municipality to generate additional income streams. He mentioned a proposal to construct a new campground site near Frankie Harris Park as one such example.
“We have to create revenue,” he said. “And I do not think the campgrounds is the silver bullet answer, but creating an outdoor destination is the silver bullet answer.”
Stephens noted that the proposals could be amended before the city council takes up the matter again. A second reading of the proposed FY '21 budgets is scheduled for a public meeting on Dec. 1 at 7 p.m. at 30 Burge’s Mill Road.
The Euharlee City Council also voted unanimously to approve the certification of the City’s Nov. 3 election results, which saw Greg Free defeat Ron Scifers 1,221 votes to 814 votes to fill an at-large vacancy on the city council.
Free was sworn in by Euharlee Mayor Steve Worthington immediately after the agenda item was approved.
The council also voted to readopt a Georgia Municipal Association City of Ethics resolution. Among other principles, the GMA program encourages local governments to “create an environment of honesty, openness and integrity” and to use its resources with efficiency and economy.
“The City adopted this resolution years ago,” Worthington said. “We’ve been very fortunate with our employees and our workers and our people to have been able to accomplish this goal.”