Valdosta City Council members and department heads worked through a four-hour Fiscal Year 2013 budget hearing Wednesday afternoon that will include an increase of $7.7 million from last year.
City Manager Larry Hanson, who presented the budget, explained some of the reasons behind the $86,254,976 proposed budget. Hanson said Special Purpose Local Option Sales Tax VI collections were $20 million less than expected, along with higher enterprise costs, and significant water capital improvements.
This is the third year that reserve funds have been used to offset revenue shortfalls and staff estimates, and Fiscal Year 2012 will end with a net loss.
While increased fees for water and sewer services are expected to be included in the final approved budget on June 21 by council, Hanson compared Valdosta to other cities to show that it could be worse.
He said energy costs, supply costs, fuel prices, and health care costs have all increased while tax digest growth has been marginal and new development is often negated by declines in property values.
On the other hand, he applauded the work of staff for balancing a budget that would not include a millage increase, no furloughs or unpaid holidays, no layoffs and would also include two percent pay increases for city employees every five years.
Hanson described the financial health of the city as “okay.” He expects thenew commercial developments of Gander Mountain, Publix, Drury Inn and Academy Sports & Outdoors to help pick up future revenue.
While there hasn’t been a millage increase for Valdosta residents since 1992, Hanson said there were plenty of internal discussions among staff about a possible millage increase but they were able to avoid it this year with a general fund transfer of $1.08 million and reductions in personnel since 2006.
The current millage rate is 4.1 mills, which Hanson said was among the lowest in the state. He compared city property taxes to a typical household’s monthly utility and private service bills. He said the average monthly electric bill was $210; cell phone bill was $70, cable service was $80 and telephone service was $40 compared to the property taxes on a $100,000 home of $12 each month.
Most funds remain flat from last year. The General Fund is recommended at $31.5 million, which is approximately the same as 2012. Revenues from taxes are expected at $24.75 million; fines and forfeitures at $1.36 million; operating transfers at $2.6 million; Local Option Sales Tax at $9.2 million, which is about $700,000 more than 2012 estimated revenues.
Travel for mayor and council held much less importance this year for the council.
About $32,000 is expected to be spent on travel for all council members and the mayor.
Agency contributions continue this year including $25,000 each for the Historical Society and the Public Art Commission. Another $20,000 is recommended for the Chamber of Commerce and another $10,000 for Southside Recreation.
The police department is still the largest expenditure, making up 43 percent of General Fund expenditures at $12,955,944 for 2013. About $9.8 million is used solely for personal services, which includes salaries for 185 employees.
The newly created Valdosta Crime Lab costs about $1 million each year, but still has some work before it is fully operational. District 6 council member Robert Yost suggested that once the crime lab is running, its services should be used by other agencies across the region to help offset some of those costs.
The fire department is expected to run at $6.613 million in 2013, with about $5.8 million comprised of personal services. The fire department is the second largest General Fund expenditure at 22 percent.
Sanitation is recommended at a similar level as 2012 at $4.7 million, which is running at a slight profit of $74.
Water and sewer services are another big-ticket item for Valdosta, with about $15 million expected to be spent in 2013. These costs are covered by user fees, but $9.744 million in capital improvements contribute to the tight 2013 budget.
Hanson said Valdosta has some of the most lenient water disconnect policies, since service is not cut off for delinquent accounts until the 75th day and late fines are only $10.
Planning & Zoning will likely become a General Fund item, since it is predicted to operate at a loss of about $300,000 in 2013.
The final adoption of the budget will be made at the June 21 council meeting at 5:30 p.m.
CAPTION FOR PHOTO:
A illustration provided at the budget hearing Wednesday night that demonstrates how each dollar of taxes is divided amongst different government agencies.