PORTERDALE - City Manager Tom Fox said Porterdale will have to do some serious belt-tightening in order to avoid significant financial problems in 2009, although he plans to avoid cuts to the city's police department.
Fox said he will be scouring the budget for areas where spending can be cut by about 20 percent - without affecting public safety.
"The city has made public safety a top priority, and that's where most of the resources are going to go," Fox said Monday. "And that's without a tax increase, so it's a matter of making the necessary cutbacks in other areas in order to meet the desires, wishes and goals of the City Council."
Fox had made a series of budget cuts in September to make up a budget shortfall this fiscal year, but three council members subsequently voted this month to reinstate a furloughed police officer due to public safety concerns. The decision will add back about $9,000 to the city's current fiscal year expenditures and $36,000 for fiscal 2009, according to Fox.
Fox said Monday that with property tax receipts due in December, the city will be able to meet its obligations through the end of this year. However, he said budgeting for 2009 will be a different story.
"Where we're going to have to make adjustments is to get through next year," Fox said. "Around March, if these adjustments aren't made, then that's when the city will be facing some serious shortfalls as far as cash flow goes."
Mayor Bobby Hamby said the council decision to bring back the furloughed officer indicates to him that some City Council members aren't looking at the big picture when it comes to cutting costs to keep the city in the black.
Council members have discussed a number of new revenue sources to cover the additional expenditures, including a tax anticipation note, a short-term loan that could be taken out in anticipation of future tax collections. But even the town's ability to take on more debt is not certain. In addition, the TAN would have to be repaid by Dec. 31 from property tax collections that are due Dec. 20. Hamby said repaying the note with December's tax receipts would put the city in a further financial bind in the coming budget year.
"That's the point I was trying to get across to the council," Hamby said of the discussion surrounding the decision to reinstate the officer, "is that we really don't have the funds to pay for this guy back. And if we do the loan, we have to back the loan out of the property tax that comes in, which means we'll be short going into the next year.
"I don't understand how this is going to happen, but it seemed not to make any difference to them," Hamby added.
The three council members who supported the officer's reinstatement - Robert Foxworth, Linda Finger and Arline Chapman - voted following a presentation from Porterdale Police Chief Wayne Digby, who outlined some public safety problems in the town. Councilman Mike Harper was absent from the meeting and Councilwoman Kay Piper was opposed.
Foxworth said due to his concerns about reported gang activity in Porterdale, he is opposed to cutting any funding for the police department.
"We need our officers to be fully staffed," Foxworth said. "We've given them a lot this year trying to do what we can for public safety and protecting our officers and giving them everything they need. What we've got right now in Porterdale with these gang members, we've got to do something to protect our citizens. We do not need to cut public safety; we do not need to cut our police department."
But Hamby said the police department should be required to tighten its belt as other departments have.
"Things have picked up from what they used to be," Hamby said, "but I really believe if the police department tried they could cut some costs and still operate at the same level. Other (police) departments have."
Piper, who voted against reinstating the officer, said she was disappointed with the council's decision to bring the officer back off furlough.
"I felt that was an irresponsible position," Piper said. "My position was not that I didn't think we needed the officer; my position was I didn't think we could afford it."
According to the city's 2008 budget, salaries for the police department were budgeted to increase by $66,000 this year, which included hiring a police chief at $49,000, including benefits, and making a part-time position full time. All told, salaries increased 33 percent. According to financial statements, Porterdale had spent $185,700 in salaries for the police department through August, which is $8,000 over budget for the period. Fox said the overage is primarily due to overtime.
In addition, the city has spent more than budgeted for equipment for the police department this year. The city budgeted $10,500 in capital outlay for the department for 2008, which would cover monthly payments for two new police cars, according to Fox. However, the city also purchased laptop computers for its police cars and refitted one vehicle for use by the police dog acquired by the department earlier this year.
August financial statements showed that the town had spent nearly $80,000 for police equipment for the first eight months of the year. That figure includes the total cost of the two new police cars, which will be financed through loans over a number of years.
Excluding capital outlay, the police department is about $12,000 over budget so far this year, according to the financial statements, in addition to about $4,000 in unbudgeted expenses for the department.
Asked if the town can afford to continue to operate its police department, Hamby replied, "As it stands right now, I don't think so. I've always been one to talk about Porterdale needs its own police department. I feel if we did away with the police department and worked out a deal with the Sheriff's Office, we would not get the coverage we need in Porterdale."
But in order to keep the department going at the current level, additional funds will have to be found, Hamby said.
"The only way we are going to be able to do it is find the money somewhere," Hamby said, "and I don't know where. It's obvious if we take out this (tax anticipation note), the only way to pay it back is to raise taxes."
Hamby said he's opposed to a tax increase for the residents of Porterdale, but the decision is ultimately out of his hands.
"It's the council's decision," he said. "I don't have a vote in it. I'm on record as saying I was opposed to (bringing the officer back) because by doing the cuts we had done, it looked like we would probably squeak by this year. Of course, that depends on how much we collect on property taxes."
Porterdale operates under a city manager form of government in which its mayor does not vote, not even in the case of a tie vote by the council.
Councilwoman Piper, who works in accounting and has been helping the city's administrative staff to tighten its accounting practices, said she has been trying to convey to the council "the seriousness of our financial position at this time." Part of the problem, she said, is that council members have not received regular financial and income statements.
"Had we known earlier on in this fiscal year ... there are decisions that were made that should not have been made regarding spending money."
Piper said she was especially troubled to learn that the town had transferred some $100,000 from the city's Culture and Recreation Department fund to the general fund. Those funds were from an insurance settlement paid to the town after its historic gym burned in 2007. Those "designated funds" should not have been transferred to the general fund, Piper said.
"Because those were designated funds, I thought that should have been brought before the council so we would be made aware of it," she said.
Fox said the funds were transferred as part of the budgeting process last spring in order to balance the budget. Georgia law requires municipalities to have a balanced budget.
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SideBar: If You Go
What: Porterdale City Council
When: 6:30 p.m. Thursday; both a work session and called meeting will be held
Where: City Hall