The details are not as complicated as many once thought. Recently unveiled feasibility studies by Georgia State University’s Dr. Robert Eger showed that the proposed South Fulton cities of Campbell and Chattahoochee Hills can make it on their own.

Armed with the new data and the introduction of two bills by Sen. Kasim Reed, residents must await the legislative decision that will give them the opportunity to control their own destiny by voting the measures up or down.

With the intent of glimpsing into the future, groups representing the Campbell and Chattahoochee Hills communities hired Eger to conduct feasibility studies designed to test the idea of incorporating.

The independent feasibility studies addressed the estimation of revenues and expenditures of both cities. The budget estimates process used information gathered from Fulton County 2006 Proposed Budget, Fulton County Special Services District (SSD) budget data, Atlanta Regional Commission and Georgia Dept. of Community Affairs. As conceived, the City of Campbell would include all of unincorporated South Fulton situated east of Ga. Highway 154 while Chattahoochee Hills would encompass all the land west of Hwy. 154. Within all of unincorporated South Fulton today, the area is currently provided a set of municipal-like services through Fulton County Special Services District (SSD) funding which differ from the general county-wide services provided by the county.

Eger performed two separate studies of the Campbell proposal. The first study was completed with the entire Campbell area intact while the second study excluded the Fulton Industrial and Oakley Industrial areas.

In the first Campbell study, using the current 7.731 tax rate and “using the municipal-like services currently offered through the SSD, we find that if the City of Campbell desired the identical set of services, the budget for the new city would have a budget deficit of $208,886,” the report said. When viewed four years in the future the projection for Campbell changed dramatically. “Our finding shows that if the current mill levy on property was held at 7.731, in 2010 the city would realize a budgetary surplus of $4,393,337 premised on the current set of services offered through the Fulton County SSD. This would allow the new city to acquire assets from Fulton County, such as parks, through bond debt,” the report stated. Eger added that, using the statewide average service provision, Campbell would have a $1.19 million reserve in 2006, thus requiring no change in fire and police services. He noted that unincorporated South Fulton has fire service costs approximately five times the state average per capita and suggested that those costs be re-evaluated in Campbell by a fire insurance underwriter.

Eger concluded that Campbell would be financially viable under the statewide average service provisions. He found that by 2010 “the City of Campbell would have enough reserves to continue with its current set of services while allocating reserves into a fund to address the costs of assets currently owned by Fulton County.”

A second study of the incorporation of Campbell in 2008 excluded the Fulton Industrial and Oakley Industrial districts. The study also showed the city to be financially viable. Excluding those economic engines and maintaining the current 7.731 millage rate, Campbell would have a $775,191 deficit and $860,120 in reserves in 2008. By 2010, the report said, Campbell would see a budget surplus.

“We find that the financial viability of Campbell is premised on a series of important issues. The City of Campbell millage rate level, 7.731, is below that average mill levy for the municipalities in Fulton County. To look forward, we estimate out the changes in the budgetary structure for Campbell through 2010. Our finding shows that if the current mill levy on property was held at 7.731, both Oakley and Fulton Industrial districts excluded except for fire and police fees, a bond debt for the infrastructure of fire stations, parks and recreation and greenspace was incorporated into the expenses, by 2010 the City of Campbell would realize a budgetary surplus of $4,581,319 premised on the current set of services offered through the Fulton County SSD. This would allow the new city to acquire all current assets from Fulton County through bond debt of $40,593,575 at a rate of 3.5 percent over 20 years,” the report said.

Overall findings of the second study showed Campbell would be financially viable under statewide average service provisions and the potential municipalization of the city in 2008. Under the current set of services and allocated costs for those services Campbell “is in a budgetary deficit in 2006; however, that deficit is removed in 2008 without Oakley Industrial. A 9.8 percent surplus is realized by the city in 2010 without Fulton and Oakley Industrial.” It is feasible, the report concluded, that by 2010 Campbell would have enough reserves to continue with its current set of services while allocating reserves into a fund to address the costs of assets currently owned by Fulton County and have an appropriate reserve balance that conforms to Government Finance Officers Association guidelines.

Concerning the new city of Chattahoochee Hills, the Eger study found the city to be viable with a 2006 incorporation. Total revenue was projected at $2,004,966 with expenditures totaling $1,797,071. “Our estimates of revenues and expenditures using multiple data sources indicate a surplus of $207,895 or 10.37 percent of revenues,” he said. Data provided by Fulton County indicated that Chattahoochee Hills would generate $924,000 in property tax.

Eger proposed three considerations if Chattahoochee Hills residents vote to incorporate. He suggested maintaining the current 7.731 millage to build a 12 percent “rainy day” fund. Additionally, an increase of one-half mill would add approximately $60,000, or three percent, to the estimated one-year surplus. Eger recommended development of a complete incorporation plan that would address issues such as fire service standards and costs, police service levels and costs and the provision of fire services based on a fire risk analysis. The final recommendation held that consideration be given to increasing License and Permit revenues to help offset capital costs.

If incorporated, Chattahoochee Hills would be home to nearly 3,000 residents on 40,000 acres while Campbell would encompass roughly 80,000 acres with a population of more than 50,000. Currently the fastest growing area of Fulton County, unincorporated South Fulton is experiencing a rapid escalation in income levels and home prices, with median homes prices currently estimated at $200,000. It is an area where 90 percent of the land is currently undeveloped and where 20,000 permits for single family homes are making their way to development.

If the sentiment at the numerous town hall meetings is any indication, increasing numbers of unincorporated South Fulton residents want the opportunity to vote on forming cities. The option of continuing the status quo, many say, amounts to facing incremental annexation by Atlanta and the cities of South Fulton or staring down the barrel of an uncertain future of more tax hikes and diminishing services.

Eger is Assistant Professor at Georgia State’s Andrew Young School of Policy Studies at the Department of Public Administration and Urban Studies. Eger has authored numerous articles in national and international journals on topics such as municipal management, tax administration, managing intergovernmental revenues and transportation issues and makes frequent conference presentations on a variety of topics.

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