A proposed $35 million budget for the city of Villa Rica got its first public presentation on Tuesday.
The proposed 2021 budget, which would go into effect in October, reflects the impact on city revenues caused by the COVID-19 pandemic, but it also — and for the first time in three years — has no increase in the city’s water and sewer rates. Water and sewer rates had been the most controversial parts of the city budget during past three budget cycles.
The budget was presented at the regular meeting of the Villa Rica City Council. The Council conducted a public meeting on the spending plan at which no one spoke.
The presentation is only one of several steps in the budget process that began in June with city department heads bringing forward their “wish lists” of projects and needs. The council is scheduled to have an in-depth discussion today, Sept. 10, at 1 p.m.
The budget is less ambitious than the $36.9 million budget proposed a few weeks ago by the city staff, which would have been a 13% increase over the FY 2020 budget. Instead, the revised 2021 proposed budget is a 3% decrease.
The city’s police department, however, is one of several city departments that will see a slight boost in money, 2% more than last year, or $4.7 million. The bulk of that money is in salaries, all of which have been adjusted to be more competitive with those in other cities, a move taken in recent budget cycles to stop those cities from poaching city-trained officers.
For the past three budget cycles, city officials have increased the fees city residents pay for water, sewer and sanitation services. Those increases were necessary to get those three “enterprise funds” to operate in the black after years of deficit operations that forced the city to cover those expenditures with other funds, city officials said.
That process has worked, they said, eliminating any need for rate increases this year. The water-sewer fund is also generating the cash needed to cover the bond payments for the west wastewater plant and to begin to tackle long-neglected infrastructure upgrades for a system designed when the city was only a quarter its current size.
But this does not mean the city’s financial problems are over. The economic impact of the COVID-19 pandemic has seriously impacted anticipated revenues for the city.
The city’s recreational department, library and the Pine Mountain Gold Museum have been particularly hard hit by the pandemic, with all three failing to meet their 2020 revenue goals. Additionally, revenue from the city’s hotel and motel tax has been depressed due to the general drop in recreational travel and the forced cancellation of many city events.
As a result, the new proposed budget is designed to fit a new economic reality in which total budgeted revenues for the city is forecast to decline 3%. The budget forecasts income from the recreation department and Pine Mountain to be about half what it was previously. Hotel and motel revenues are reduced by 9%.
On the other hand, the city expects an increase in building permit revenues to the tune of $412,000 as the city continues to grow despite the pandemic.
On Aug. 25, the council voted to levy a millage rate of 6.25, representing the first tax increase imposed by the body in 11 years. One of the main reasons for that increase was to make up for the revenue losses the city has experienced during this year.
Property taxes account for a little more than one-third of the revenues to the city, or $11.5 million, yet they tend to get more attention because the money comes directly from the pockets of residents who also vote in City Council elections.
The reduced revenues are reflected in a reduction in expenses for the FY 2021 budget, which match revenues in being 3% less compared to the current year.
But the budget makes room for $120,000 in design work for a Living Centers Initiative (LCI) grant that could eventually fundamentally alter the design for downtown; $100,000 in engineering work for Punkintown Road; and increased maintenance and repairs for city facilities, including the water and sewer plants.
One big-ticket item in the budget is $2.5 million for an extension of the waterline along North Avenue, which city planners hope to be paid back through a low-interest Georgia Environmental Finance Authority (GEFA) loan.
The budget also has money for such capital projects as a recreational splash pad and other facilities, renovation of the former Butterballs building to city use, purchase of city police vehicles, and more improvements at Pine Mountain.
The council must adopt the budget before the beginning of the new fiscal year in October.