The city of Johns Creek began its new fiscal year Thursday with a $55 million budget.
The spending plan, which the city council approved Tuesday, is balanced despite a 3.24 percent drop in general fund revenues from last year.
Perhaps more remarkably, the municipality in northern Fulton County not only maintained its staffing levels, it also included cost of living and merit increases for various employees, including police and fire personnel.
Monte Vavra, finance director, said the city has been “very fortunate and we’ve been conservative.”
“We have a fairly strong tax base, so that helps,” he said.
The city’s news comes during an economic crunch that has many governments, including neighboring Forsyth County, scrambling to cut back.
Forsyth is trying to make up a $6.2 million deficit in its 2009 budget and a projected deficit of nearly $14 million in the 2010 budget, which takes effect in January.
The county commission has directed the county manager to cut $500,000 in staffed positions to help chip away at the shortfall.
Though about half the size of Johns Creek, the city of Cumming’s 2009 budget has stayed on track. While no employees were laid off, there were also no salary increases.
“We didn’t know whether we had the money and we certainly weren’t going to promise something we couldn’t do,” said Mayor H. Ford Gravitt. “We’ve lived within our budget so far.”
Gravitt said Cumming is working on the 2010 budget to see if it can work in a cost of living adjustment. But unlike Johns Creek, which garners about $17 million in revenue from real and personal property taxes, Cumming doesn’t tax its residents.
“We haven’t implemented that because we’ve been able to run the city without property tax,” Gravitt said. “Now at some point in time, the city may have to add the property tax. But as of now, we’re able to get by without it.”
Forsyth County collects property tax, but voted to keep the rate the same as last year, despite the projected shortfall.
Like Johns Creek, county officials voted not to increase the millage rate, which is used to determine property tax.
A mill is equal to $1 for each $1,000 in assessed property value. Assessed value is 40 percent of actual market value.
Charles Laughinghouse, chairman of the county commission, was the only dissenting vote in the 4-1 decision not to raise the rate from 3.834 mills.
“We have to do the best we can with what we’ve got and right now, like many governments ... we’re struggling with rising expenses and declining revenues and trying to achieve the best balance we can,” he said.
“You plan for $2-$3 million of income on your investments and you’re getting $100,000. So our problem is one of revenues.”
Commissioners have already voted to raise employee health care costs in 2010. But with such a large deficit, Laughinghouse said more solutions are needed.
“I don’t see how we can go forward without some long-term cuts,” he said. “... It would be foolish to depend on reserve funds to balance the multimillion dollar shortfall that we have in the budget ... but we’ll just have to wait and see what happens.”
There’s still time for Cumming and Forsyth to work on their budgets for 2010. In the meantime, Johns Creek is set, at least for now.
“I think down the road, it will be difficult to maintain,” said Vavra, noting cost of living increases aren’t an automatic. “Even though the sales tax went down, we were able to maintain our budget.”
Johns Creek’s millage rate is 4.614 mills. The city was also able to put about $200,000 into a vehicle replacement fund and more than $800,000 into a contingency fund.
The spending plan, which the city council approved Tuesday, is balanced despite a 3.24 percent drop in general fund revenues from last year.
Perhaps more remarkably, the municipality in northern Fulton County not only maintained its staffing levels, it also included cost of living and merit increases for various employees, including police and fire personnel.
Monte Vavra, finance director, said the city has been “very fortunate and we’ve been conservative.”
“We have a fairly strong tax base, so that helps,” he said.
The city’s news comes during an economic crunch that has many governments, including neighboring Forsyth County, scrambling to cut back.
Forsyth is trying to make up a $6.2 million deficit in its 2009 budget and a projected deficit of nearly $14 million in the 2010 budget, which takes effect in January.
The county commission has directed the county manager to cut $500,000 in staffed positions to help chip away at the shortfall.
Though about half the size of Johns Creek, the city of Cumming’s 2009 budget has stayed on track. While no employees were laid off, there were also no salary increases.
“We didn’t know whether we had the money and we certainly weren’t going to promise something we couldn’t do,” said Mayor H. Ford Gravitt. “We’ve lived within our budget so far.”
Gravitt said Cumming is working on the 2010 budget to see if it can work in a cost of living adjustment. But unlike Johns Creek, which garners about $17 million in revenue from real and personal property taxes, Cumming doesn’t tax its residents.
“We haven’t implemented that because we’ve been able to run the city without property tax,” Gravitt said. “Now at some point in time, the city may have to add the property tax. But as of now, we’re able to get by without it.”
Forsyth County collects property tax, but voted to keep the rate the same as last year, despite the projected shortfall.
Like Johns Creek, county officials voted not to increase the millage rate, which is used to determine property tax.
A mill is equal to $1 for each $1,000 in assessed property value. Assessed value is 40 percent of actual market value.
Charles Laughinghouse, chairman of the county commission, was the only dissenting vote in the 4-1 decision not to raise the rate from 3.834 mills.
“We have to do the best we can with what we’ve got and right now, like many governments ... we’re struggling with rising expenses and declining revenues and trying to achieve the best balance we can,” he said.
“You plan for $2-$3 million of income on your investments and you’re getting $100,000. So our problem is one of revenues.”
Commissioners have already voted to raise employee health care costs in 2010. But with such a large deficit, Laughinghouse said more solutions are needed.
“I don’t see how we can go forward without some long-term cuts,” he said. “... It would be foolish to depend on reserve funds to balance the multimillion dollar shortfall that we have in the budget ... but we’ll just have to wait and see what happens.”
There’s still time for Cumming and Forsyth to work on their budgets for 2010. In the meantime, Johns Creek is set, at least for now.
“I think down the road, it will be difficult to maintain,” said Vavra, noting cost of living increases aren’t an automatic. “Even though the sales tax went down, we were able to maintain our budget.”
Johns Creek’s millage rate is 4.614 mills. The city was also able to put about $200,000 into a vehicle replacement fund and more than $800,000 into a contingency fund.