Funding shortfall means caution ahead for city spending

With new employee requests and a slew of projects to be funded in the midst of what looks to be a very austere year financially, the Peachtree City Council will have to make some tough decisions.

Is it feasible to hire another six firefighters and a fire lieutenant for accreditation? Or a white-collar crimes detective and a staff assistant for the police department?

Or will the anticipated budget shortfall cause those requests or capital projects to be put off for this coming budget year ... and maybe the next too?

At the end of its two-day retreat last weekend, council members made their general suggestions as staff heads into the budget preparation process later this year.

Councilman Doug Sturbaum said he felt the requests needed to be prioritized to determine which needs are “critical or immediate.”

Councilwoman Cyndi Plunkett said she’d like to see a version of the budget from the outset that includes no millage rate increase. Mayor Harold Logsdon went a step further, saying he wanted to see budgets that reflected, say, a quarter-mill decrease in the millage rate.

Councilman Steve Boone said the latter would be a good idea to offset the quarter-mill rate hike that was instituted two years ago by council.

Councilman Don Haddix said that given the area’s economic woes he doesn’t want to see a millage rate increase which might cause some people to think twice about relocating to Peachtree City. Added to millage rate increases enacted by other government agencies such as Fayette County and the board of education, “if everybody does it, that’s a big hit,” Haddix said.

Finance Director Paul Salvatore warned council that it should be careful not to use cash reserves too much to balance the budget. The city aims to have a cash reserve on hand equal to 20 percent of the budget, and right now the figure is running at 28 percent or so, officials said.

City Manager Bernie McMullen said his goal with the upcoming budget was to hold the millage rate to pay for existing services, and only increase the millage rate for providing additional services.

It could be, he said possible that the city may be providing services that it doesn’t need to anymore, McMullen added.

McMullen added that he didn’t see the economy slowdown reversing course soon, alluding to the possibility that the city’s budget could be affected not just in 2009 but perhaps in 2010.

Still, McMullen said, the idea of the city having the cash reserve is to have cash on hand to make up for blips in the economy when an economic downturn is experienced. It’s possible, he said, the “fund balance” will be used the next two years.

The city is experiencing a significant decline in sales tax revenues and also faces a property tax digest that will grow only by about 1 percent since the real estate slowdown has led to few new buildings in the city.

McMullen said the one thing that benefits the city tremendously is that the city’s supervisors handle multiple duties, giving the city a good bang for its buck.