Villa Rica is on track for explosive growth over the next decade, and city leaders face the prospect of investing more taxpayer funds to accommodate that expansion.

The pains of growth are already being felt as the city begins planning its 2017 budget. Over the next few weeks, City Council members and administrative staff will begin looking for ways to pay for the needs of a growing community, while shielding taxpayers from much of that burden.

That’s not always an easy task, since predicting the future is an uncertain science. There are always expenses that no city can anticipate, and this past year in Villa Rica there were more than $703,000 in unexpected costs that impacted the 2016 budget.

The budget process is an annual ritual in city government, beginning in mid July and extending until December, when the final budget is approved. In recent weeks, city departments have presented their budget “wish lists” to the city manager, whose job it will be to balance those wishes against financial reality, then present a finished budget to the council.

City officials know the city is growing. City Manager David Milliron said last week that there has been an increase this year in business and building permits. That growth will add to the city’s tax digest, a calculation of the taxable value of all the property in the city. The tax digest was already set to grow, since Carroll County this summer did a reassessment of property values based on current fair market values.

The tax digest is used to base the rate at which property owners will be assessed taxes to pay for some of the items in the next budget. Other revenues, such as those from local option sales taxes, help offset the tax burden on homeowners.

A city budget works much the same way as a household budget. The main difference, however, is that a city has many more revenue streams. Because those incomes roll in at different times of the year, a city must do much of its budget planning based on estimates; predictions that the revenues will ultimately meet expenses.

And just like a household budget, there are always unexpected expenses that a city budget must absorb during any fiscal year. In 2016, the city of Villa Rica had a lot of unexpected expenses – totaling $703,000 in costs that were either not in the budget, or were not budgeted properly.

According to data supplied by the city, these expenses included $190,000 in costs to insure the health of city employees; an expense of $100,000 to study the impact on Indiana bats by the North Loop highway project; and $99,452 to purchase a vintage gasoline station that is expected to become the city’s new visitor welcome center.

And those were just the big-ticket items. Other unexpected expenses for the year included roof repairs for several city-owned buildings; additional legal fees; and $5,268 to implement reverse-angle parking along one street in downtown, a project that has had mixed support from the public.

While some of these expenses may appear questionable, city officials maintain they were all necessary, despite not being in the 2016 budget.

The increase in health insurance costs, for example, was the result of an increased number of claims this year, either by city workers, or their family members. The $100,000 for the bat study was required by the federal government (even though no trace of the Indiana bat has been found) to build the much-needed, state-funded $11 million North Loop roadway.

Other expenses were also unavoidable, officials say – such as the $30,000 increase over what was budgeted in 2016 for city legal expenses. The legal staff hired by the city had to handle a number of unexpected legal issues, among them those resulting from the resignation of former Mayor J. Collins – a vacancy that revealed a flaw in the city charter that temporarily left the city with no executive officer to conduct city business.

And some expenses, though unplanned, could be said to represent an investment for the future. The city’s purchase of the former Butterball’s Auto & Repair building for $99,442, for example, is expected to yield future benefits once the building is converted into a visitor’s center, the hub of a new tourism initiative.

Another example of a good future investment, city leaders say, is the $41,000 the city spent last year for completion of a “master plan,” completed by a group of experts in city planning, that is meant to guide the city in making the downtown area more attractive to visitors and residents alike.

One of the side benefits of that study was the prediction of explosive growth of Villa Rica in a very short period of time.

According to the “Renaissance Strategic Vision & Plan” (RSVP) study produced by various state agencies, including the Carl Vinson Institute of Government, the town’s current population of 14,700 is expected to skyrocket to nearly 35,000 by 2025, taking the city above the current population of Carrollton.

This growth will require the city to invest more in many areas, from police to protect the new citizens, to new city personnel to do everything from conducting license and permit inspections, to installing and maintaining utility infrastructure.

Bearing at least some of the cost for these upgrades will be city property owners, whose tax revenues are one of several sources of income for the city.

Even so, city leaders seem determined to keep that burden low, offset in large part by special sales tax revenues that fund a good many of the city’s needs. The LOST is one such tax that generates 1 cent from every dollar spent in the city, even by visitors.

“If a resident is paying a dollar in taxes,” said City Manager Milliron, “I would be surprised if they’re getting no less than $1.18 in services back – and it could be greater. The reason behind that is that the LOST.

“Anyone who goes through (and) buys gas, stays in a hotel, everything, is chipping into the local tax base. That then allows us to roll back what the impact property taxes would be to the taxpayers. So they’re only paying a fraction of what it actually costs to operate the city, because that use tax offsets property taxes.”

Earlier this month, the city council set a millage, or tax rate, of 6.5; a level that is expected to generate $3.1 million, to pay for items set in the 2016 budget. That same budget anticipated $22 million in city revenues, meaning that the taxpayer’s share of the expense was about 14 percent.

City planners are now considering the 2017 budget, which will begin in January. To do so will require looking at the trends in city spending for the past year, balanced against similar trends in incomes, including all tax revenues.

According to a schedule adopted earlier this year, next year’s proposed budget will be presented to city council by Oct. 14; the first of two public hearings will be held four days later.

The schedule was set to ensure that a new mayor and Ward 4 council member would be available to have input on budget decisions. Both those positions are currently vacant, and will be filled during the Nov. 8 general election.

If all goes as planned, the final budget will be voted upon on Dec. 15 – and by summer of 2017, the budgeting process will begin all over again.

 

 

 

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