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HomeMy WebLinkAbout08-05-2010 special called meeting ~ City Council of Peachtree City Minutes of Special Called Meeting August 5, 2010 6:45 p.m. The City Council of Peachtree City met Thursday, August 5, 2010, in the City Hall Council Chambers. Mayor Don Haddix called the meeting to order at 6:45 p.m. Council Members present: Vanessa Fleisch, Erik Imker, Kim Leamard, and Doug Sturbaum. The purpose of the meeting was to hold a public hearing for the proposed millage rate. Financial Services Director Paul Salvatore gave a brief PowerPoint presentation (a copy is included in the meeting file). Salvatore said the current millage rate for maintenance and operation (M&O) was set at 5.134 mills. The proposed M&O rate was 6.384 mills, an increase of 1.25 mills, representing an increase of 19.1% over the rollback millage rate of 5.36 mills, which was higher than usual due to the decline in the tax digest. The current bond millage rate was set at 0.399 mills and would not change for 2010 Salvatore continued that the total proposed millage rate (bond and M&O) was 6.783 mills. The 1.25 mill increase would generate approximately $2,288,953 to support General Fund operations. This millage rate option would also result in the lowest total millage rate by 2015 than the other options considered. Any reserves generated in excess of the 20% minimum required would be used to offset anticipated shortfalls in FY 2013 and beyond [Special Purpose Local Option Sales Tax (SPLOST) funds would run out in 2013, and the Local Option Sales Tax (LOST) would be renegotiated based on population in 2013J. Salvatore went over the overall tax bill for City residents, which included the Board of Education, Fayette County, and state taxes. Overall, the bills would have just over a 0.5 mill decrease. Based on the information from the tax digest, the average value of a home in the City had decreased from $272,000 to just under $260,000. The net impact of the changes on the average tax bill was about $220. Salvatore also looked at the five-year models, noting that if the 1.25 mill increase was approved, there would be O. I 96 mill increases each subsequent year that could possible be avoided, for a total millage rate of 7.168 in 2015. The reserve balance would be drawn down to the 20% minimum during that period. The public hearing opened. Lynda Wojcik supported the proposed 1.25 mill increase, saying that Council and staff had been diligent in looking at the budget. Any further service cuts would make the City suffer and would affect home values. A previous Council had failed to increase the millage rate when the Library bond was approved. Not increasing the millage rate would cause the cash reserves to go down too quickly, and if something came up such as the issues with the Police Department building, the City's bond rate could be affected. John Merrick said the City only had three ways to raise money _ raise taxes, cut services, and getting money from the outside. He read from a June e-mail he had sent to the Mayor and the City Manager regarding grants and whether the City had applied for any federal or state grants. He said he had not received an answer. City Council Special Called Meeting Minutes August 5, 2010 Page 2 Caren Russell supported the proposed 1.25 mill increase, saying it made the most sense since the City was playing catch-up due to actions taken by previous Councils. It was realistically the only thing to do for the City, as well as the cheapest way down the road. She had moved here because the City was different; now she wanted to maintain what the City had. Any lower millage rate was a political stance. The industrial land needed to be developed, but retail development and filling empty retail spaces should not be ignored either. Dick Allis said he was against a tax increase. There was an easy solution, doing more with less. He recommended lowering taxes to make the City more desirable to get more industry in the City and increase the tax base. Grey Durham, a member of the Development Authority of Peachtree City (DAPC), requested an increase in DAPC funding. He said they were making progress with the retailers in the City and in bringing in new businesses. He said Council should look at it as an investment in the future. The board was overworked, adding that he spent about 25 hours a month on DAPC work, and he did the least of the volunteer members. Bringing in new businesses and retaining the businesses r the City had was important. It was a draconian mistake not to increase DAPC funding. The public hearing ended. Sturbaum gave a presentation entitled, "PTC Job Creation Project." A copy of his presentation is included in the meeting file. Sturbaum said they could either maintain the status quo or try something different, which would entail funding the DAPC, accountability for that funding, and providing numbers so everyone could understand where their money went. The state reported that the average person in this area generated $3,735 in taxes. At least 206 jobs had to be generated to keep the City's economic engine moving forward. The City Manager had proposed the use of $764,341 in cash reserves to balance the budget. Two hundred and six jobs would generate $767,350 and a savings of 0.42 mills. Sturbaum continued that job losses in the City averaged 6.39% over in a year. The state/local tax burden was equivalent to 9.9% of per capita income. Sturbaum used his employer, Panasonic, as an example. Panasonic cost the state an estimated $1.968 million in lost tax revenue with the loss of its 527 jobs. The average tax paid by those jobs was $3,735 per job. The per capita income in the City was $38,164. The property tax in the City was $13.34 per $1,000. Sales tax was at 75% ($1.79 million). Property tax collections were down $395,000, and impact fee collections were down $23,000 per year. - The lack of impact fees and permits, the loss of sales tax collection at the state level, the loss of the Homestead Tax Relief Grant (HTRG) from the state, job losses, and health care costs (average increase of 14%) were hurting the City financially, Sturbaum said. Sturbaum said taxes could be increased, adding the City was not static, capital acquisitions had to happen each year. A reduction in force was a reduction in services. Twelve jobs could be cut or there could be a 6.5% salary reduction across the board next year. Ifnothing was done, the City would be in the hole by 2014, and both staff and Imker had provided charts showing the projected shortfalls. City Council Special Called Meeting Minutes August 5, 2010 Page 3 Sturbaum discussed Porter's Five Forces Model, a framework of industry analysis and business strategy development, and the City. He noted that the City competitors for industry were North Atlanta, as well as other areas of the state. The City's strengths were its standard of living and strong labor base. The City's weaknesses included a 10% higher cost ofliving than other areas, distance to the Interstate, and empty buildings. Overseas jobs and a volatile economy were threats. The opportunities were to retain what the City had, attract new employers, and use the City's available spaces. Initiatives included the Job Tax Credit Program, which reduced taxes for job creation to attract employers; impact fee variances, through which some impact fees could be waived to generate the tax base for local hiring benefits; an employer retention program, engaging local employers to ensure general welfare and see what opportunities were available; and tapping into the new $26 billion grant for states that should be approved in the near future. - Resources for the Job Creation Project included the DAPC as the lead with support from the Fayette County Chamber of Commerce, the Convention and Visitors Bureau (CVB), City staff, Planning Commission, Council, and local businesses. Sturbaum continued that the DAPC would do quarterly presentations on job creation and retention, the DAPC should be funded with $150,000, and they should hire an executive director for the DAPC, similar to the Airport Authority, Water and Sewerage Authority, and the CVB. Sturbaum added that the break even analysis on funding the DAPC with $150,000 was 41 jobs. Sturbaum reported that Coweta County funded its development authority with $242,251, Newnan's Downtown Development Authority received $151,691, Valdosta (City authority) received $104,906, Valdosta's Main Street program received $62,188, and College Park's received $191,711. The DAPC's director's initiatives should include job creation and retention, reporting on the progress and threats, and providing risk mitigation plans; filling empty industrial, retail, and homes; working with the United States Department of Agriculture (USDA) on cleaning up and re-developing Photocircuits, similar to the Brownfield Redevelopment Fund in Vermont; and working with Sany on their 19 supply chain vendors to have them open facilities in the City. ~ Sturbaum's proposed timeline showed the DAPC working with the Sany vendors from September to mid-January, working on the USDA commitment during the next seven months, and having job creation taking place through the next 12 months. The 2011 goals for the DAPC included job creation, the USDA commitment on Photocircuits, visiting China to meet with Sany vendors and ultimately securing three of the 19 vendors come to the City, and finding another education outlet. Other economic counter measures included the creation of a Special Purpose Stabilization Fund (SPSF) that would enhance the City's Public Improvement Program (pIP), with a percentage of the millage would be allocated to the SPSF like Massachusetts with prioritized purchases. There should be a taxation balance initiative, reducing the millage rate accordingly if a SPLOST were passed. If the City added a service, then the appropriate millage rate would be applied (an Added Services Fee Program). The proposed Empty Building Registration ordinance should be brought back and approved, as it was similar to programs in Baltimore and DeKalb County. A Joint Financing Municipal Project Program should be enacted to share costs with other cities for capital projects. City Council Special Called Meeting Minutes August 5, 2010 Page 4 ,....... Sturbaum gave an example of Tax Allocation Modeling with all funds earmarked, proposing the 0.5 mill increase he supported, with 0.1 mill for the DAPC, 0.3 mills for debt relief, and O. I mill for a special purpose stabilization fund. Sturbaum asked if the City should remain static and go about business as usual, use the tax and cut method, or step up to the plate and move a program forward by funding the proper authority, creating economic policies, and driving an initiative that created jobs and stabilized the tax base. The City had just been informed that an existing industry was being targeted. The City needed to retain those jobs. ~, Juan Matute said that every special interest was put together in SPLOST packages; they were usually a Christmas package of goodies. He said voters should be able to vote on what they wanted item by item, rather than just having a choice of "yes" or "no." Russell asked why Sturbaum had not supported Leamard's compromise on hiring a City employee that would assist the DAPC. Sturbaum said he questioned the legality of such a position. They were asking for an executive director that was state economics certified and did economic development as a business 8 a.m. to 5 p.m. If more help was needed in Planning and Zoning, they should bring the position forward on its own merits. They were open to compromise. He was trying to charge the motor. Everyone on Council wanted to get to the same place, but they were taking different routes. Mary Ann Grove referred to the many empty, boarded-up spaces in the City, saying that she wanted the City to grow, but the City needed to keep what it had before more was built. Sturbaum said other areas were recruiting the City's businesses. One thing the DAPC needed to do was a cross-sectional analysis of what the City had and what companies were looking for, matching up the skill sets in the area with what other companies wanted. r- Haddix said that the City's millage rate could be lower than projected in 2015; people were talking as if there were no intention of having that 1.25 increase going away. The 1.25 mills would cost taxpayers $15.32 more than the 0.5 mill increase. The question was how much a property owner would pay and what the impact would be after 2015. He asked if the millage rate would ever roll back. If they were looking for the increase to be permanent, then the millage increase should be I.65 mills. They wanted to rebuild the City's economic base with the least impact on the residents. A City employee could not do development authority work; there were things that Were illegal for a City employee to do. Haddix continued the Alpharetta model had been discussed. Alpharetta did not have an active development authority, and the coordinator did not do anything a coordinator was not allowed to do, but he did not attempt to do any development authority work. City Council Special Called Meeting Minutes August 5, 2010 Page 5 ~ Haddix said he had contacted Valdosta, which had a downtown development authority, a coordinator, and a development authority. The coordinator told Haddix she did not know how the development authority was fun.ded and that her office handled office/profession/retail and restaurant recruitment only. The Valdosta/Lowndes Industrial Authority handled industrial, distribution, manufacturing, logistics, and warehousing. Haddix said he asked if the coordinator exercised any authority over the development authority in certain areas, and her answer was that the office of economic development had no control over the development authority and they worked in partnership. Her office had one person with $86,000 in funding per year. Haddix contacted the director for the development authority, which had a budget of approximately $800,000 for its programs. Haddix noted that Valdosta had one of the most admirable economic growth rates in the state. ~. F Haddix continued that, if the City was looking at a success model, then they should fund the DAPC. There should be cooperation between the City and the development authorities (DAPC and FCDA), but they could not cross the legal lines. There had to be a legal scenario to compromise from. He suggested taking the money needed for a coordinator, combining it with the DAPC's $35,000, and balancing it offthe $150,000 for a funded DAPC. Fleisch asked City Attorney Ted Meeker ifhe had read the job description sent by her, Learnard, and Imker and whether it was a legal position. Meeker said he believed it was, but there was some language about the person overseeing the DAPC that was not technically correct. The DAPC was a separate independent board that functioned as a separate independent unit. The person could, as in other juriSdictions, serve as the chief administrative officer, running day-to- day operations and taking direction from the DAPC on the duties. The board would set the policy, and that person's job would be to follow the policy. Haddix said the job description said the person would work for the Community Development Director, and the director would write the policy. Meeker said that was why they needed to tweak the job description to provide clarity as to who was in charge. Haddix said that employee would have to take off the "Community Development hat" when working for the DAPC. Meeker said it had worked in other models. Griffin and Marietta both had people on staff working with the development authorities, although Griffin's was a downtown development authority, which was a bit different. They were all marketing the same thing. ~ Haddix said that, when it came to setting and executing policy for grants, which was specifically a development authority power, a City employee could not do it. Meeker said he did not know if he agreed with that point. He agreed that development authorities could do things a city could not. In terms of a City employee also working for the DAPC, he did think that was legal. Haddix asked if a City employee could be given an order by the Community Development Director to order the DAPC to do something. Meeker agreed that the employee could not give ~ City Council Special Called Meeting Minutes August 5, 2010 Page 6 orders to the board. The board set the policy, goals, and objectives, and the employee worked toward those goals. Haddix asked if the DAPC could give an order to a City employee. Meeker said yes, if that City employee had also been appointed as the director for the DAPC. There would be a chain of command, but in terms of job function, the employee would have to adhere to the DAPC. Haddix asked who would pay the employee. Meeker said that was an in-house matter that would be similar to how Nancy Price was paid as the Amphitheater director and the executive director of the CVB. Griffin had a similar situation. Haddix said it was important to him to know who was calling the shots. Meeker said the DAPC did not have any taxing authority from a budget standpoint. The money would come from the City. Council would have to make any decision. Haddix said there could be a conflict of interest and control if the chain of command was not extremely clarified. Meeker said if an employee was performing a dual role, the employee would have to answer to both boards. Sturbaum asked Fleisch why the proposed job description had not been shared with him and Haddix and whether they had met to discuss the job description. Fleisch said they had not. Sturbaum asked why it was not shared so they could address their concerns up front about the language. Fleisch said it was out there. Haddix said his question was budgeting and who would give the employee orders. At this point in time, he was not clear what the members wanted. ,-. lmker moved to adjourn the public hearing on the millage at 7:42 p.m. Leamard seconded. The motion carried 3-2 (Haddix, Sturbaum). p., ~ g..f:0~