A recent op-ed on Decaturish by Former Atlanta COO and Decatur resident Hans Utz recently got some appreciation in FFAF regarding its explanation of the city’s debt cap.  As such, it seemed a good article to highlight and discuss here, since we so enjoy discussions that involve such thrilling topics as debt and enrollment figures.

In short, it helps spell out…

• Why city debt is necessary – to spread the cost of projects out over time so future residents also get to pay in
• The different forms of Decatur’s debt
  • The city’s revenue bonds – taken out against non-property tax forms of revenue
  • CSD’s certificates of participation – “like a homeowner taking out a second mortgage”
  • “GO bonds” – which are borrowed against property taxes
• Which forms of debt apply to the “Constitutional Debt Cap” of $137 million – only the Go Bonds
• Where Decatur would stand if it were to borrow the full $82 million in Go Bonds to build new/larger schools
  • Watch these mathrobatics – The city currently has borrowed $31 million and CSD has borrowed $5 million in Go Bonds, so add the requested $82+ the current $36 = $118 million.  And what was that limit again?  $137 million?  So $137 – $118 = $19 million!

Is that $19 million gap risky?  Mr. Utz’s states…

Incidentally, the constitutional debt limit is itself a conservative ceiling meant to prevent fiscally weak or irresponsible municipalities from overextending themselves.  Decatur is neither.

Ultimately, Mr. Utz’s argues that Decatur shouldn’t be all that worried about its debt cap with this bond proposal and that the major concern should be the very real increase to taxes as a result of the bond – he calculates it as a 7% increase on Decatur property taxes.

He concludes…

So are we in a bad place with debt?  No, not at all.  Not even a little bit.  Not even if the schools do get an additional $82 million in capital.  We should stay vigilant, of course, but we are operating well within our capacity.

The question is whether we think the schools need the capital sufficiently enough for us to willingly to increase our overall property tax by 7 percent.  That is a big conversation that we must have as a community.

Oh how nice it would be if we still had the old Ponce de Leon School on West Ponce.  (Hence the random-ish Ponce de Leon School photo courtesy of Ponce de Leon Elementary Facebook page  )

A post by Bill Banks over at the AJC yesterday says that DeKalb is currently planning to raise county taxes on cities in the coming fiscal year, while holding resident taxes in unincorporated DeKalb flat with the previous year.

A table below the post details the potential impact to all of DeKalb’s individual cities, with Decatur’s county taxes set to rise 32% vs. 2014, but up 5.2% vs. 2013, since the cities all saw a tax cut this past year.  Avondale residents would see a 25.2% increase vs. 2014 and a -9.2 decline vs. 2013.

According to Banks, the Commission is set to vote on the county’s budget and tax rate by the end of February 2015.

On Monday, the Decatur City Commission will vote to extend current homestead exemptions of all residential property owners with a focus on Decatur residents 62 and older.  They will also vote to create a new exemption for seniors older than 62 with income less than $50,000.  The specifics are as follows according to a note from City Manager Peggy Merriss to the commission…

The city commission asked city staff to investigate the possibility of expanding homestead exemptions in the last fiscal year.  (The idea was also discussed  on DM back in August in reaction to the diversity project.)

Ms. Merriss’ letter states that the annual tax deduction on a $400,000 home would be approximately $60 for a resident homeowner who doesn’t meet any other qualifications and $340 for a homeowner who meets all the aforementioned qualifications.

Decatur sent out this announcement this morning…

At their regular meeting on May 19, 2014, the Decatur City Commission adopted a tentative millage rate of 13.00 mills for general operations, capital improvements, bonded indebtedness and downtown development authority operations. This is the same as the 2013 millage rate; however due to property reassessments, this will represent an average increase of 6.62% in property taxes. This increase is consistent with new development and home sale data tracked by the City for the past three years. The State’s Taxpayer Bill of Rights requires that this increase be advertised. For property that was not reassessed there should be no increase in property taxes.

The Decatur City Commission will hold public hearings regarding this issue on Monday, June 2, 2014 at 7:30 p.m.; Monday, June 9, 2014 at 6:00 p.m.; and, Monday, June 16, 2014 at 7:30 p.m. The final millage will be set at the Decatur City Commission meeting scheduled for Monday, June 16, 2014. All meetings are held in the City Commission Meeting room, Decatur City Hall, 509 N. McDonough Street, Decatur. For more information, contact Meredith Roark, Budget & Performance Measurement Manager or Andrea Arnold, Assistant City Manager at (404) 370-4102 or visit the City’s website at www.decaturga.com/budget.

DeKalb County Commisser Jeff Rader’s afternoon announcement that the County will host three public hearings (Tuesday, July 5 at 10 a.m. & 6 p.m., and on Tuesday, July 12 at 10 a.m.) on the proposed 4.5 mill tax increase includes a nifty breakdown on what that will mean for the different DeKalb municipalities.  Here ’tis…

2011        Rollback Rate        % Increase

Atlanta                               10.39          8.938                      16.25%
Avondale Estates            15.41        13.464                      14.45%
Chamblee                         13.71        12.223                      12.17%
Clarkston                          15.06        13.242                      13.73%
Decatur                              10.82        10.087                        7.27%
Doraville                            13.60        12.607                        7.88%
Dunwoody                         13.35        11.357                       17.55%
Lithonia                             15.33        13.280                       15.44%
Pine Lake                          15.61        13.541                       15.28%
Stone Mountain                13.90        12.980                         7.09%
Unincorporated                19.62        18.017                          8.90%

Countywide Debt                  1.08          0.647                          66.92%
Unincorporated Debt            0.66         1.631                         -59.53%

City Schools of Decatur will hold public hearings on their proposed 1 mill increase to the tax rate on Monday, June 6th at 9a and 6:30p and prior to the School Board’s monthly meeting on June 14th at 5:30p.  (1 mill = roughly $147.50 tax increase on a $295,000 Decatur home, according to CSD)

Along with the public hearing, CSD posted a public notice on its website detailing the rather recent history of Decatur tax and millage rates (3-4% tax digest increases, mostly millage rate deductions – good!) and the very recent history (declines in the tax digest and a 2% increase in tax exemptions – bad!).

Though the city’s tax base is projected to increase 1% in the coming fiscal year and CSD has reduced Central Office and individual school staffs, CSD lists a variety of contributing factors that require the millage rate to be raised.  They include…

• Opening Glenwood Elementary as a K-3 school and Fifth Avenue as the new 4-5 Academy.
• Adding teacher and paraprofessional positions for Exceptional Student Services due to growing enrollment and the new Fifth Avenue 4-5 Academy
• Absorbing positions previously funded by federal stimulus dollars
• Assuming full cost of the nursing program due to discontinuation of partnership with DeKalb Medical
• Implementing a 1.25% cost of living adjustment for employees

Lots more info and docs on this subject on the CSD website.

Don’t forget that a majority of this increase will be wiped out by a decline in your DeKalb taxes due to the city successfully passing state legislation last year that eliminates “double-taxation” on city residents for county services (general police, recreation, etc) they don’t use.

Whether DeKalb raises taxes (by as much as 4 mills by some accounts) remains to be seen.

h/t: Patch

Oh how times have changed.

Sure, many us lament the loss of the Candler Hotel, the moving of the Death House on Sycamore Street and the replacement of WEST Courthouse Square with the “Birds from Hell” building.  But all of this pales in comparison to an idea floated around Decatur in 1977.

I certainly didn’t live in Decatur back then – perhaps some long-time residents can provide some first-hand historical perspective in the comments – but needless to say Decatur was in a slightly different place in 1977.  And apparently things were difficult enough that a majority of respondents to a survey by the Decatur Tax Payers League were in favor of abolishing the entire city if DeKalb couldn’t come up with a way lower taxes for residents. Apparently double-taxation with the County is nothing new.  (Though the city rectified much of this problem recently)

But back in 1977, an independent City of Decatur government wasn’t enough of a “value-add” for a majority of survey respondents to keep the city intact.  According to a July 13, 1977 article in a paper I can’t identify (DeKalb Era maybe??),

• 50% of respondents were in favor of transferring Police, Recreation and Planning Departments to the County.
• 51% of respondents were in favor of transferring the Fire Department to DeKalb County
• 58% of respondents were in favor of eliminating the city appraiser (something that has since happened)
• 70% of respondents were in favor of eliminating the “Around Decatur” newspaper published by the city
• 68% of respondents were in favor of eliminating the Decatur school system
• 51% of respondents were in favor of removing the charter of the city of Decatur if taxes could not be lowered.

Crazy, huh?