City Unveils FY Budget Proposal at Council Meeting

Lilburn leaders presented their proposed budget for the 2012 fiscal year to residents at Monday night’s City Council meeting, with an emphasis on finding new revenue streams in the face of a declining tax base.

To find more revenue, the proposed $5.9 million budget includes a new fee for trash removal and a change in business taxes that together could bring in more than $600,000 to the city.

A $10-per-month sanitation fee assessed to the approximately 3,500 residences would help the city defray the cost of a service that had been free in the past. The service would continue to include trash pickup and chipper service for yard debris.

City manager Bill Johnsa and finance director Sheila McGaughey pointed out that residents in most neighboring cities and in unincorporated Gwinnett County pay more for just trash pickup — county residents, for example, currently pay $17.86 per month. It costs the city $15 per month for the services, so residents would pick up two-thirds of the cost. McGaughey said that the property tax for around 1,000 residences is less than the $171.60 it costs the city for trash removal and chipper service for each residence.

The budget proposal also includes a change in occupational tax assessments (business licensing) for businesses in the city. Instead of the current plan, which assesses taxes based on the number of employees, the new plan would use a formula based on gross receipts, with a cap of $25,000 per business. The plan would be similar to plans in neighboring municipalities.

In their budget presentation, Johnsa and McGaughey gave examples of what the new tax would mean to different types of businesses.

In one scenario, a “Big Box” business with nearly 300 employees and $74 million in receipts that currently pays $3,494, would pay $25,075 (with a $75 flat fee) under the new system.  Smaller businesses, such as one with six employees and $157,000 in gross receipts would see little change in tax.

Johnsa said the budget, based on recommendations from the 10-resident budget oversight committee, kept an eye on fairness in creating new revenue and in avoiding any change to the city millage rate for residents.

“Basically, what [the budget committee] told us is they didn’t want us to raise the millage rate,” Johnsa said. “We tried to look at this as what was fair.”

With a 10-percent decline in tax revenues, brought on by the sluggish economy and decreasing property values, something had to be done to make up for the losses and avoid cutting services.

Overall, city revenues have fallen from $6.4 million in fiscal 2008 to a projected $5.5 million in 2011.

The budget proposal also includes unfreezing two positions within the police department and a two-percent merit raise in pay for city employees.

Monday’s public hearing was the first of two scheduled. The next is set for the June council meeting, after which the budget could be adopted.

Check out the city’s website for more info on the budget. Full line-by-line copies are available by calling city hall.