October - December 2017
Water System Director
I’d like to take this opportunity to explain the reasoning behind the recently adopted FY18 County budget and how this action fits within a long-term strategy to ensure that we maintain the excellent level of service to which we are all dedicated. Instead, I’ll try to share what I know about the approved budget and how adjustments during the fiscal year may come about.
The FY18 General Fund operating budget, approved by the Board of Commissioners on September 22, includes about $403.3 million dollars in expenses (this does not include Water System costs since we cover those out of our revenues) as compared with $383.6 M for FY17. This is an increase of $19.7 M. It should be noted that the FY18 budget does not include funding for two line items that were in the FY17 budget – raises for staff and funding for charitable organizations in Cobb. In addition, also unfunded, are operating costs for the new Sewell Mill Library.
Regrettably, revenues from fees and taxes, which would normally be expected to cover expenses, are projected to be about the same in FY18 as they were in FY17. Considering the property reassessments and growth in the County over the past year, this seems surprising. Unfortunately, the expected increase in property tax revenues will be offset by a significant drop in ad valorem taxes, primarily because car taxes are now paid upon purchase rather than annually with tag fees. It’s important to note, because of the County’s Homestead Exemption, a reassessment of owner-occupied housing does not result in an increase in General Fund tax payments (but the Board of Education part of your tax bill, which accounts for about two thirds of the total bill, will go up). What all of this means is that our projected FY18 recurring revenues (from fees and taxes) are about $19.7 M short of our projected expenses.
In order to make up this shortfall, the BOC has decided to use “one-time monies”. These are funds that come from sources that don’t recur annually (taxes and fees) and are generally used to address short-term budget shortfalls. In order to augment FY18 revenues sufficiently to offset the $19.7 M shortfall, the BOC proposes to use $10.4 M from funds set aside previously for implementation of the pay/class study (this actually matches the cost in FY18 of the raises given through the study); $5.8 M from funds set aside from the unusually high car taxes received in the few years after the related law changed – the BOC recognized that we would get a short term windfall and set aside some of that for future use; and $3.5 M from an economic recovery fund that was established as we came out of the recession to assist if the economy took another significant downturn.
The strategy at the moment is to allow additional requests to the budget to be considered case by case by the BOC during the year. Currently, requests expected are the restoration of funding for charitable organizations, operating costs for the Sewell Mill Library, and funding for additional employee compensation (most likely to take the form of a one percent cost of living raise for those who got no increase from the pay/class implementation). These items may be considered when and if additional funds become available (through increased revenue from fees or similar) or may be covered by the limited amount of onetime monies available. Alternatively, since the FY18 budget is based on the assumption that the millage rate adopted a couple of months ago for FY17 will remain in place for FY18, any approved increases in expenses during FY18 could be offset by a change in the millage rate for FY18 when it is finally adopted next July. (This may seem backwards, but the BOC creates a budget for any fiscal year prior to its beginning on October 1, spends money all year, formally sets the millage rate for the year in July after most of the money has been spent, and then collects the taxes in October that are used to pay for the costs incurred in the year preceding.)
It appears that the County will be able to get through FY18 using the approach outlined above; however, because most available one-time monies are being used to balance the FY18 budget, it appears to me that a sizable millage increase for FY19 will be required if we as a County are to continue to provide an exceptional level of service. I’ll keep you posted.