The $7.7 million budget for capital improvements passed by a 4-1 margin.
“I think we could have and should have done things differently,” Councilman Kent Igleheart said prior to casting “no” votes on both.
While the millage rate for property owners will not budge from the current rate of 5.455, the way the money it raises will be allocated differently than last year. Less will be needed to pay for bond debt service, so more will be spent for general operating and maintenance expenses.
That ratio has been a thorn in the side for Igleheart and Councilwoman Betty Price, who have advocated lowering the overall millage rate if debt service expenses are less. Not doing so, Igleheart has said, is actually a “stealth tax increase.”
“In the budget just passed we moved the maintenance and operations millage rate from 4.059 to 4.464. That is a 10 percent increase, which I would consider to be a pretty large increase,” Igleheart said last Friday.
Councilman Rich Dippolito disagrees.
Property values in Roswell have been resilient, he said, outperforming most of the metro area. To continue this trend, he said, the city has to invest more in its infrastructure.
“Shifting the tax rate in part provides annual funding to address the maintenance needs of the city, such as maintaining over 300 miles of roads and over 900 acres of park land.,” he said.
“Maintaining these assets is important to our residents and is essential to protecting and preserving the investments we have made and will continue to make in roads, parks and community facilities.”
In the past few years, the council has authorized drawing down undesignated reserve funds to pay for capital improvement projects. In the 2014 budget, reserve funds as well as money left over from some of last year’s projects will be used for capital projects.
Price, who ultimately voted against the operating budget but in favor of the capital budget, had several questions, including what the council strategy is on how much the city should keep in its reserves fund.
“Three months’ operating expenses, and that’s all?” she said, referring to the longstanding policy of setting aside emergency money to keep the city in business.
“When I started on this council in 2009, there was $22 million more in reserve than there is now,” Price said.
Mayor Jere Wood said the recent recession sent construction and vendor prices lower than normal, making items like new equipment and facility improvements better buys.
In this scenario, using reserves for capital projects is “converting from money in the bank where we get 1 percent a year or less to what I believe is a strong investment that will be paying off in the prosperity of the city and the employment rate,” Wood said.
In the approved 2014 budget, the estimated fund balance in the general fund above the three-month reserves is now $131,722.
Dippolito said the city “typically” adds several million dollars to the reserve every year from operating surpluses and cost savings, so the small amount remaining in that fund now should not be a problem.
“It is not a concern that we are using the funds for projects because the reserve was set up specifically to set aside capital for investing in projects. The only reason to build the reserve is if we are saving it for a specific project,” he said in an email.
"Otherwise, it is a better use of taxpayer money to reinvest those funds in projects the city needs today.”