PORTERDALE -- City officials are in the process of scrutinizing a 2010 budget draft that includes a proposed millage rate increase of 3.5 mills.
City Manager Tom Fox told council members at a work session Tuesday night that the proposed millage increase will be critical if the council wants to avoid layoffs, furloughs or cuts in services to residents.
"Basically (this budget) is just keeping what we've got in place and just hanging on in this economy," Fox said.
The proposed general fund budget assumes no new employee positions and no cost of living increases for employees.
Fox also recommended to the council that the city continue to pursue a homestead tax exemption for 2010 for Porterdale homeowners. The exemption would have to gain legislative approval in the upcoming session of the General Assembly and then be approved by Porterdale voters in a local referendum. Fox acknowledged that implementing the homestead exemption could affect the amount of millage increase required in order to balance the budget.
Another recommendation from Fox is that the city approve a contract with Newton County to have the county Tax Commissioner's Office bill and collect Porterdale property taxes.
Fox also proposes that the city establish a street light fee to help offset the operating cost of city lights.
Based on the proposed budget, the majority of Porterdale's operating revenues will come from property taxes at $344,000, with local option sales tax revenues budgeted at $195,999 and insurance premium taxes estimated at $71,000. Total revenues are budgeted at $944,050.
Employee costs make up the majority of the town's expenses, with $560,000 -- or about 59 percent -- going toward salaries, benefits and workers compensation insurance. Projected operating costs by department are: Administration, $283,008; Judicial, $37,227; Planning and Zoning and Code Enforcement, $23,431; Police Department, $451,225; Fire Department, $7,958; Public Works, $115,275; Culture and Recreation, $25,926.
Fox also budgeted $76,000 to go toward the city's contingency fund, which was budgeted at $22,000 in 2009.
"Hopefully, with our end-of-year balance and some contingency funds we can begin to build a reserve fund, which is badly needed," he said.
Finally, Fox recommended that the council approve a tax anticipation note if needed to ease cash flow problems that could develop before property taxes are collected next year. The loan would have to be repaid within the same year.