Friday, March 22, 2002
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Friday, March 22, 2002 |
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Rapson wants to cut PTC's cash reserve goals to stave off projected millage hike in 2004, 2005 By JOHN
MUNFORD
If Peachtree City Councilman Steve Rapson has his way, the City Council will lower its reserve goals to help stave off a projected tax increase in 2004 and 2005. Rapson argued at the council's retreat Friday that a cash reserve based on three months of operating expenses "is too high for a city our size." He urged cutting the goal back to having two months of cash reserve on hand to use as emergency funds. Rapson said his proposal would allow the city to hold the millage instead of raising it in 2004 by .585 mills and in 2005 by .3 mills as projected by city staff. No millage increase is projected for the 2002-2003 budget, which doesn't include any new employees but will likely include an early retirement program for public safety employees. That budget is projected at just over $14.8 million, based on a 6 percent increase from this year's operating budget, according to Finance Director Paul Salvatore. Although Rapson's proposal would hold the millage rate in 2004 and 2005, the city would still effectively have a property tax increase those years due to increases of property reassessments, Rapson noted. To hold property taxes from year to year, council must roll back the millage rate to offset the property assessment increases. Rapson argued that credit companies look for cities to maintain a two-month cash reserve, not three months in reserves. City finance officials plan to use the city's borrowing power more in the future as impact fees from new developments begin to dwindle with the city nearing the built-out phase. By cutting the reserve goals, the city would be able to increase its self-insurance fund by $800,000 and its Public Improvement Program by $300,000. Salvatore said he had reservations about the proposal until he was able to discuss it with City Manager Jim Basinger, who was out of town on a personal matter. Salvatore noted that if council intends to purchase property for greenspace and other uses, it could add significantly to the city's budget. The city's cash reserves are used to protect against economic downturns in revenue collections, stabilize the millage rate and provide necessary funds in the event of a natural disaster.
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