This story has been updated.

Decatur, GA — The Decatur City Commission is considering lowering the millage rate by 0.75 mills. During a work session on June 8, City Manager Andrea Arnold recommended lowering the millage rate from 13.92 mills to 13.17 mills.

For a fair market value home that is $500,000 and had no change in property value from 2021 to 2022, the property owner would pay $3,193.50 in taxes if the city’s millage rate stays at 13.92 mills. The property owner would pay $3,018.25 in taxes if the millage rate is lowered to 13.17.

“The city has already advertised a 5.86% tax increase based on the tentative millage rate of 13.92 mills that was adopted May 16,” City Manager Andrea Arnold told Decaturish.

The lower millage rate would only impact taxes property owners pay to the city of Decatur. The City Schools of Decatur School Board has tentatively approved the school millage rate at 21 mills. The school board will approve the school millage rate on June 16 after a public hearing at 6:15 p.m. on Thursday.

The Decatur City Commission will hold a public hearing on Tuesday, June 21, at 7:30 p.m. during the city commission meeting. The board anticipates adopting the FY 22-23 budget and the revised FY 21-22 budget on June 21.

To view the budget documents, click here.

The revised FY 21-22 budget, which is the current fiscal year, expects the city will receive about $29.6 million in general fund revenue and spend the same amount. The revised FY 21-22 budget is about $369,000 less than the adopted FY 21-22 budget.

The FY 22-23 budget anticipates the city will receive about $32.6 million in general fund revenue and will spend the same amount. The proposed FY 22-23 budget is about $3 million higher than the revised FY 21-22 budget. To balance the budget based on predicted revenues and expenditures, city staff recommend using about $3.8 million in fund balance from the general fund.

The city commission adopted the tentative millage rate of 13.92 mills in May, and the proposed FY 22-23 was built based on an anticipated 5% increase in the tax digest.

The 2022 real property tax digest from DeKalb came in at a 10.92% increase, which is a total increase of about $266 million. About 33% of the digest is new value and 67% is from revaluations. The tax digest is 23% commercial, an increase from 21% last year, and 77% residential.

Arnold proposed a lower millage rate of 13.17 mills, which would generate about the same amount of revenue estimated in the budget. The lower rate, however, is slightly higher than the city’s rollback rate, which is 13.149 mills.

“That roughly brings in the same amount of revenue that was estimated assuming 13.92 mills and a 5% increase in the digest,” Arnold said. “To be really specific, I got to the three-quarters of a mill decrease, the revenues about $70,000 less than what was being generated with my earlier calculations.”

Mayor Pro Tem Tony Powers said he’s in favor of lowering the millage rate.

“I know I’ve quietly whispered that, at some point, I would like to say we were able to lower the millage rate,” Powers said. “This is a result of increasing the commercial base. There are all sorts of great benefits to why we need a diverse holdings here in the city. I think this is why.”

The city has not made any changes to the homestead tax exemptions in 2022. Arnold said she would like the city to look at expanding the city’s homestead tax exemption in 2023 and possibly look at the city’s tax payment deferral program.

To view the homestead exemptions, click here.

Part of the increased expenses in the FY 22-23 budget is due to increases in personnel services. Personnel related costs about 62% of the budget.

“The Personnel Services category increases $2,152,160 in the 2022-2023 Proposed General Fund Budget Estimate over the 2021-2022 Revised General Fund Budget Estimate,” the budget summary states. “Within that category, full-time salaries increase $1,276,560 due to the full funding for all authorized positions, an increase in group insurance and the addition of nine full-time positions contribute to the increase.”

There are a number of new positions in the budget in a variety of areas including equity, housing, community health, public safety, facilities and greenspace, and recreation and active living. Funding is anticipated to be allocated for multiple plans, like the downtown master plan, the parks and recreation master plan and the racial equity action plan. The city estimates full funding for all positions proposed in the budget.

The FY 22-23 budget also includes 2.5% merit-based pay increases for full-time employees and a 2.5% cost of living adjustment for all full-time employees. Hourly wages for Active Living program leaders and crossing guards will also increase by 50 cents.

After salaries, group insurance is the largest personnel services expenditure in the general fund, at about $3.5 million. This expense increases by about $458,000, which is an increase of 13%.

Capital improvements in the budget include sidewalks, street improvements, bike lanes, improvements to fields and park space, housing and other athletic facilities, Arnold said.

Professional services, another large expenditure for the city, is estimated to be about $2.9 million, which is a decrease of about $97,500. Professional services include legal services, building permitting services, annual financial audit services, IT support services, an urban heat island assessment and continued racial equity activities.

The expenditure for contractual services is about $2.7 million, which is a $625,000 increase. Contractual services include pool management, GIS contract, and master planning services for the clean energy plan, the parks and recreation master plan, the downtown master plan and the racial equity action plan.

The city anticipates receiving $3.8 million in Special Purpose Local Option Sales Tax (SPLOST) funding in fiscal year 2022-2023. The current special purpose local option sales tax went into effect in April 2018 and will end in March 2024. The city expects to receive a total of $20.52 million in SPLOST funding.

“We do have expenditures [and] we have commitments already, about $12 million for debt service for the Urban Redevelopment Agency. We’ve committed $5.6 million for Atlanta Avenue,” Arnold said. “Again, based off the limitations in the capital improvements fund, I’ve added the budget for [the] South Columbia Drive multiuse path to SPLOST.”

Arnold anticipates additional SPLOST funds will be available for the Reimagine West Howard project.

The capital fund tax revenue is expected to increase from $5.26 million to $5.8 million. Capital improvements in the budget include improving Ebster field and installing lighting, conducting a traffic signal study, replacing playground equipment, dugout improvements at McKoy and Oakhurst fields, purchasing a battery powered zero-turn lawn mower and implementing a take home car program at the police department.

City staff also created an American Rescue Plan Act section in the budget to reflect projects using that federal funding. The city received a total of $9.5 million in ARPA funding. Decatur must use the funds by Dec. 31, 2026. The funds will be used to build the public infrastructure for the South Housing Village at Legacy Park, stormwater infrastructure improvements, technology upgrades and COVID-19 testing supplies. The city will also contribute $3 million in ARPA funding to build a track and field at Legacy Park in partnership with City Schools of Decatur.

To see the full budget presentation, click here.