Augusta commissioners broke a seven-year trend Wednesday and agreed 7-0 to raise property taxes by 1.75 mills to cover a deficit and provide employees a small bonus.
The compromise plan, brokered between commissioners and the mayor after a first vote on a 2-mill increase failed and the meeting was recessed, includes a $500, one-time bonus for all staff plus the opportunity for them to sell five vacation days back to the city.
Facing Georgia Department of Revenue deadlines for setting the millage rate, which must be done before tax bills are mailed to collect both Augusta and Richmond County Board of Education operating revenues, commissioners gathered in the chamber after the recess and worked out a deal.
The 1.75-mill increase, which amounts to a $61.25 annual increase in the county portion of the tax bill on a $100,000 house subject to a typical homestead exemption, will generate $7.9 million. The bulk of the funds will go toward covering a $5.9 million operating deficit for the current fiscal year, while $625,000 will pay full-time employees a one-time $500 bonus. Another $625,000 will be available for employees who want to sell up to five vacation days back to the city before the year ends.
Commissioner Bill Lockett, whose earlier motion for a 2-mill tax hike was opposed by commissioners Mary Davis, Joe Jackson, Grady Smith and Donnie Smith, said he agreed to the 1.75-mill tax hike because the compromise plan increased the number of vacation buy-back days from three to five and he’d learned from Interim Administrator Tameka Allen that employees were receptive to the $500 lump sum bonus.
“We were at the midnight hour; we had to get something done,” Lockett said. “I must say I admire and commend Donnie Smith, he took a very, very, very tough vote.”
Lockett said Smith’s phone was going off during the meeting with threats from constituents warning against raising taxes but Smith voted yes. “After he went ahead and voted anyway I said I have the utmost respect for you,” Lockett said.
After the vote, a tearful Donnie Smith credited Davis with bringing the group together in a compromise.
“I think that cooler heads prevailed and Commissioner Davis showed a lot of versatility and a lot of leadership,” he said. “She was able to rally some people together for a common cause and in the end, I hope that what we did was good for the community.”
The compromise leaves intact mandatory 2.4 percent annual budget cuts from which the commission exempted the Richmond County Sheriff’s Office. An earlier proposal replaced the 2.4 percent cuts with 1.5 percent cuts. The plan also partially restores the city’s $4.7 million contingency fund, which will be largely depleted by unreimbursed cleanup expenses from Winter Storm Pax.
“I credit all seven of us,” Davis said after the meeting. “There was not going to be a consensus the way it was going today and we were about to put this city in such jeopardy as far as getting these property taxes at an appropriate time,” she said.
“This vote today that I made was the only right thing I could do for the community,” she said. “As far as moving forward, now there’s going to be some more hard decisions getting out, because we can’t get back into this position ever again.”
Commissioners haven’t raised the millage rate since 2007, when they increased the rate by .25 mills. The increase raises the countywide portion of tax bills to 9.788 mills. The rate inside the old city limits will be slightly different to offset a new countywide garbage fee imposed to replace a millage-based charge previously used in the old city limits to fund garbage service there.
Copenhaver thanked the group for “for staying around and for working through this and for compromising” after the meeting.
Commissioners Joe Jackson and Wayne Guilfoyle were present for most of the initial discussion, but Guilfoyle left the meeting for an appointment. Jackson was present for the 4-4 vote but not the 7-0 vote. Mayor Pro Tem Corey Johnson, Lockett and commissioners Marion Williams and Bill Fennoy voted for the 2-mill hike.
Finance Director Donna Williams fielded numerous questions through the session, including what would happen if commissioners did not restore funds to the city’s fund balance, which is depleted each time expenditures exceed revenues. Cities are expected to maintain a certain number of days’ operating expenses in the fund or risk credit agencies lowering the city’s bond rating.
“The bond rating agencies look at that very closely,” she said.
The remainder of the $7.9 million generated by the tax increase will go toward repaying the year’s deficit and restoring contingency funds depleted by the winter storm, leaving a $358,000 balance.
Since they voted to increase taxes, the city must advertise the increase and hold three public hearings, likely scheduled over the next few weeks.