Sunday, January 27, 2002
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Sunday, January 27, 2002 |
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Authority officials agree to help with hotel-motel tax shortfall By JOHN MUNFORD
Officials from Peachtree City's development and airport authorities have assured the City Council they are taking steps to trim their budgets in light of the downturn in the city's hospitality industry. Both authorities rely on payments from the city's hotel-motel tax for funds in their operating budgets. But now the hotel-motel tax collections are down due to a slowdown in the industry, and city officials are predicting a potential shortfall of at least $90,000 from the $939,000 it was projected to raise this year. Last year, council raised the tax from 3 to 5 percent, mainly to fund the expansion of the city tennis center along with improvements to the city amphitheater and Falcon Field. The tennis center expansion is already underway, as are the improvements to Falcon Field. The debt service for the tennis center expansion will amount to $186,000 for the year, while the hangar expansion at Falcon Field will cost $21,000 a year. When the hotel-motel tax increase was approved, both authorities entered an agreement with the city that requires the city to give each authority monthly payments while the city collects the hotel-motel tax revenues. But officials are worried that the hospitality industry won't rebound enough to avoid a shortfall in hotel-motel tax revenues by the end of the fiscal year. Already council has increased the tax again from 5 to 6 percent to avoid a dramatic shortfall. And at a special workshop Wednesday night, officials from the Development Authority and Airport Authority said they were willing to work with council so the city doesn't get stuck with the shortfall at the end of the fiscal year. But both authorities indicated they needed more time to prepare a detailed cutback plan for council to review. The Development Authority has pledged to provide more information to council by it's first meeting in February. But Cathy Nelmes, chair of the Airport Authority, said it needed more time until March because it is just beginning to plan its next six month budget. Mayor Steve Brown said he wanted to make sure the city wasn't using the general fund to make up any shortfall in the hotel-motel tax. Nelmes said it would be better for the airport authority if it could keep collecting its regular $10,000 supplement from the city and "settle up" at the end of the fiscal year if the shortfall remains. Council member Murray Weed said he would like to see more detailed financial reports from both agencies, such as salary breakdowns of various employees. The meeting began on a slightly contentious note as Councilman Steve Rapson and Development Authority member Robert Brooks debated whether there was an actual loss on the books yet in the hotel-motel revenues. Brooks argued that compared to revenues from 2000, the city was still ahead of what it would have received in hotel-motel revenues.
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