The City Of Brooklet voted Thursday night to increase the millage rate, a move that hasn’t been done in 16 years.
After the third and final public hearing on a proposed two millage point increase for the upcoming year, the council voted unanimously to meet concerned residents halfway and raise the millage rate one point.
About 40% of the city’s budget comes from tax dollar revenue. The remaining 60% comes from fines, forfeitures, fees and things of the sort. The city has been relying on the water fund to make up the difference, despite the growth, which is perfectly legal. It is risky, though. Should any major expense need to come from the water account, like repairs to the water tower, the city would need to take out a loan. State law says cities can only borrow from the water fund if there is no debt levied against the account. If a loan was taken out for water tower repair or a mega well issue, the water account funds would be held in their own account and the city would have an immediate money shortage.
With a full 2 millage point increase, the current rate of 6.696 mills would have increased to 8.696 and would have added an additional $80.00 on an annual tax bill for a $100,000 home. The one mill increase brings the rate to 7.696 and homeowners can expect to see a $40.00 increase on their annual tax bill for every $100,000 of the fair market value. That’s roughly $3.33 per month.
The balancing act came after Councilman Greg Schlierf spoke with the city auditor after residents expressed concern over the large jump in the millage rate all at once, saying fixed income homeowners would be hit the hardest and renters wouldn’t bear the burden.
Schlierf said the city could essentially ‘reorganize’ some of the city expenditures and pay public works employees – a total of three – from the water fund. In doing this, should an issue arise where a lien has to be placed on the water department/fund, expenditures regularly paid from the water fund would still be allowed to be paid – it’s just the transfers to the general fund that would cease. Essentially, paying these employees regularly from this account and making them expenditures would reduce the amount of money transferred monthly to the general fund and, in the event of an emergency or a lien, the city would not be in such a gross need for funds as a supplement.
Put simply, there would be more expenses due to the water fund, but in the event of a lien, those expenses could continue to be paid from those same funds, lifting the financial burden on the general fund.
Another option would have been to increase the millage rate one point and also add $6.00 per month on the water bill, but residents in the seats at the meeting seemed more receptive to the other option. The $6.00 increase would have generated about $40,000 annually for the water fund, plus the one mill increase to the general fund, and would have brought the citizens to the same revenue point as a two mill increase.
Schlierf said the two mill increase is the only way to ‘truly increase’ revenue and put the city in a different financial situation, but the two presented alternatives were pathways to reducing the amount of money that needed to be collected for the upcoming tax year.
Ultimately, the council voted 4-0 to approve the former option to move salaries to the water fund and to increase the millage rate on point. Councilman Russell Davis was not present at the meeting.
The one mill increase will generate an additional $43,000 annually for the city in property taxes.
The council voted during the September meeting to advertise a proposed increase of 2 millage points. Legally, the city could have passed an increase up to 2 mills, and including the full 2 mills, but nothing more without readvertising. The city, while in a balanced financial status now, is seeking to boost reserve accounts and a capital water fund for emergencies, which has been placed on the back burner as the city has grown substantially over the last decade all while operating costs have increased across the board.
The growth is good, but there is very little room for anymore growth and the city is relying on the water fund to prop up operating expenses. Brooklet now has to plan to move from a growing city to a sustainable city which means, for the first time in 16 years, a tax increase is necessary, according to council members.
What hurts the city tremendously is the fact that all sales tax collected goes to the Bulloch Board of Education, not any municipality in the county. Additionally, the city is working on recouping about $12,000 in unpaid city taxes from the last several years.