FAQs on the City of Brookhaven

April 9, 2012

House Bill 636, the proposed city charter for the City of Brookhaven, passed the State Senate on Monday, March 26, by a vote of 36-14. It received final passage 104-57 in the House of Representatives on Thursday, March 29. The bill now awaits the Governor’s signature.

Click here to read the final version of HB 636 that passed the General Assembly.

I am committed to providing you with full and forthright information about the proposed city in advance of the July 31 referendum. Here are some answers to frequently asked questions regarding the proposed city:

Q: How will cityhood affect my property taxes?

A: It will reduce your overall property tax burden as compared to what is paid in unincorporated DeKalb County.

Becoming a city does not add new taxes to your property tax bill. Instead, it shifts two line items – one known as the Unincorporated Tax District (labeled “UNIC TAXDIST”) and one for Police Services (labeled “POLICE SERVC”) – from the county to the city.

DeKalb County increased these two line items 82% in 2011, from 3.5 to 6.39 mills in total.

A positive vote in the July referendum would decrease these line items from 6.39 mills to a maximum of 3.35 mills, where they will be subject to a millage cap (more on that in a moment). It also would increase the applicable homestead exemption from $10,000 to $20,000. The HOST credit that you see on your tax bill does not apply to city taxes. It only applies to county taxes, so it needs to be added back into your property taxes in order to arrive at the final amount you would pay.

The result is that all property owners will receive a property tax cut. For homestead property (your primary home), this tax cut could be slight or it could be significant, depending upon how efficiently the city council operates the city.

Dunwoody now enjoys the lowest property tax burden anywhere in DeKalb County, lower than the unincorporated area. It is anticipated that Brookhaven would enjoy the second lowest property tax burden in DeKalb, also lower than the unincorporated area.

Click here for an analysis that I previously prepared to show how this tax cut would operate in real dollars.

Q: I am a senior citizen. How does cityhood affect my senior homestead exemptions?

A: It has no impact on your senior homestead exemptions, which will remain the same. All senior homestead exemptions that currently apply to your county property taxes will apply to the transferred city line item.

Q: Are there any new taxes in a city?

A: Yes. The only new taxes are franchise fees. These are amounts that the city charges utility providers for running their utility lines in the right-of-way along city streets. Not all franchise fees are passed directly to utility customers who live in the city that charges the fees, but some are.

Specifically, franchise fees will add 2% to your electric bill and 3% to your land-line telephone bill. Nothing is added to your natural gas or cable bill. If you do not use a land-line telephone, but instead use voice-over internet (VOIP) or a cell phone, nothing is added to those bills, either.

Click here to read a more thorough explanation of franchise fees that was prepared by the Carl Vinson Institute of Government (CVI) at the University of Georgia.

Q: Is the City of Brookhaven financially viable?

A: Yes. The CVI study that was performed for the proposed city estimated that city expenditures would be $25.1 million, and that city revenues would exceed this amount by approximately $135,348. This estimate is believed to be conservative, for two reasons.

First, DeKalb County has stated in two recent news articles (click here and here to read) that the county believes that $25 to $27 million in tax revenue will be shifted from the county to the city. The CVI revenue estimate is on the low side of this range.

Second, the City of Dunwoody is only spending $20.9 million in 2012, $4.2 million less than the CVI expenditure estimate for Brookhaven. In this regard, Dunwoody is a good analogue for Brookhaven. The two cities would be located in the same county, operate in a similar manner with privatized services to the extent it is cost-effective, and have a similar population size, with Dunwoody at 46,267 and Brookhaven at 49,173.

The $135,348 is not an actual budget surplus. It is an estimate based upon a study. Before Dunwoody was formed, CVI estimated its surplus to be $278,789. However, in its first year of operations, Dunwoody’s actual expenditures were 11% less than estimated.

Click here to read the complete CVI study with the two addenda that were prepared during the 2012 legislative session. The addenda are found at the end of the document.

Q: Opponents say that the “millage cap” will hurt the city. Is this true?

A: No. The millage cap simply means that your millage rate for city property taxes will not go higher than 3.35 mills without asking for your vote in a public referendum.

Opponents of cityhood point to the City of Johns Creek, which has a millage cap that has prevented it from pursuing infrastructure improvements at a desirable pace, and then argue that “Brookhaven also will have a millage cap” that will yield the same result with respect to Brookhaven’s infrastructure.

What the opponents are not telling the public is that, in order to be increased, the Johns Creek millage cap requires a “yes” vote from a majority of all registered voters who live in the city. This is virtually impossible to accomplish in any given election.

By contrast, in order to increase the Brookhaven millage cap, the city charter takes the traditional approach of requiring a “yes” vote from a majority of those voters who show up to the polls on election day.

The millage cap ensures a substantially higher degree of transparency than exists in unincorporated DeKalb. It requires your city council to first explain to you why they are requesting a property tax increase above a certain rate, and then ask your permission for the proposed tax increase.

Q: How does the millage cap affect bonds?

A: General obligation bonds (GO bonds) already require a public referendum. Therefore, the city charter provides that GO bonds will not count toward the millage cap.

Also, the City of Brookhaven will be able to opt out of future county bond issues.

Q: What are the main services that the city would provide?

A: Police. Parks and recreation. Code enforcement. Roads, sidewalks, and drainage. Planning, zoning, and land use.

Cityhood does not add a layer of government with respect to these services. Instead, the services and the tax revenues that go along with them are transferred from the county to the city. The county ceases to be responsible for providing these services to the citizens who live in the city.

Fire, EMS, sanitation, water, sewer, the jail, and most courts (except for the municipal court) will remain administered by the county government.

Public schools will continue to be administered by the DeKalb County School System.

Q: Who will be making the decisions about my city services and taxes?

A: An elected city council comprised of residents of our community. The city would have a five-member city council with four members elected from single-member districts and a mayor elected at large. These councilmembers will be highly accountable to our neighborhoods due the relatively small population size of each city council district.

Each Brookhaven city council member would represent about 12,297 residents compared to the five DeKalb County commissioners who represent about 138,379 residents each, and the two super district commissioners who represent about 345,947 residents each. That’s 11 times and 28 times, respectively, as many residents as a Brookhaven city council member would represent.

Click here to view a map of the proposed city council districts.

District 1 includes the Murphey Candler and Silver Lake neighborhoods. District 2 includes Ashford Park and Drew Valley. District 3 includes Historic Brookhaven, Brookhaven Heights, Brookhaven Fields, and Lenox Park. District 4 includes HillsDale, Pine Hills, and a portion of Buford Highway.

Compare these neighborhood-focused city council districts to the DeKalb County Commission, where our three commissioners reside in Downtown Decatur, Druid Hills, and Stone Mountain.

Q: Will I have to change my address from “Atlanta” to “Brookhaven”?

No. You can use whichever address you prefer. As long as the zip code is correct, the postal service will not mind.

BrookhavenYES BBQ on Sunday, April 15

April 9, 2012

BrookhavenYES, the citizens’ group advocating for the City of Brookhaven, is hosting a community-wide BBQ at Blackburn Park on Sunday, April 15, from 11:00 a.m. to 3:00 p.m.

This is an opportunity to meet your neighbors and ask questions about the proposed city. Feel free to bring your kids. There will be activities for them, as well.

Fact Check on Ashford Neighbors Flier

April 9, 2012

The Dunwoody Crier performed some fact-checking on a recent flier that the Ashford Neighbors opposition group tossed in the driveways and front yards of residents across the footprint of the proposed city. Here is what the The Crier found, which is being republished here with their express permission:

Fact Check: Details on Brookhaven
By Rebecca Chase Williams
The Dunwoody Crier
March 27, 2012

As the debate over whether to form a new city of Brookhaven begins in earnest, The Crier examined recent claims by opponents in a flyer distributed by Laurenthia Mesh of Ashford Neighbors.org, an opposition group.

Claim: “Experts reported to the Senate Study Committee this week that the franchise fees outweigh the negligible property tax reduction so that means increased taxes.”

Facts: The city of Brookhaven charter would roll back the millage rate for city services from the current millage rate of 6.9 to 3.35 mills. A mill is $1 for every $1,000 of assessed value. That’s a tax savings of approximately $300 per $100,000 assessed value. The Franchise fee is added to utility bills, most significantly Georgia Power bills, which according to the utility would amount to 1.8 percent of the yearly power bill. The Carl Vinson Institute estimated the average fee would be less than $50.

On the face of it, the above claim is false. But there are other factors, especially the loss of the HOST (Homestead Option Sales Tax) credit on the city portion of the tax bill that would go to the city instead of individual residents. This calculation can be estimated by looking at your most recent DeKalb tax bill. The county estimates it would be an average loss of $300 per homeowner. In most cases, the tax rollback would be somewhat larger than the HOST credit.

Most calculations show that new citizens of Brookhaven will enjoy a slightly lower tax burden with a guarantee that city taxes will not be raised without voter approval. Other factors such as the assessed value, and the final budget of the new city will also determine one’s final tax liability.

Claim: “Johns Creek city says it is unable to pay for necessary infrastructure repair because its charter has a “cap” (just like the city of Brookhaven) and cannot raise taxes.”

Facts: According to Johns Creek Mayor Mike Bodker, “Both statements are inaccurate. We have enough money to pay our bills. We now spend $1-2 million a year for roads, but ideally if we could pass a bond issue of $10-20 million and repave all the roads at one time, which would be more cost effective. The “cap” on our millage rate may need to be amended as it was mistakenly put in the charter as requiring a majority of all registered voters rather than a majority of those who go to the polls. We haven’t hit our cap and that’s not the problem.”

Claim: “Dunwoody now has a substantial crime increase of 11 percent last year and their police chief needs an additional $2,777,250.00 because they are understaffed 50 percent and exhausted.”

Facts: According to Dunwoody Police Chief Billy Grogan, “Our crime rate in 2011 compared to 2010 was slightly down. We’ve had an uptick in property crimes. In January it was up 11 percent, and February it was up 11 percent. We’ve had a group targeting an area, breaking into cars, and this causes a spike in crime.”

Grogan said that his memo to city council at its annual retreat asked for a total budget increase of $1.85 million over five years, to add 14 positions. His goal was to increase staffing to 1.56 officers per 1,000 residents. Today, the ratio is .99/1000.

Grogan added, “The staff of the Dunwoody Police Department does an exceptional job providing police services to the citizens of Dunwoody. We have formed many important relationships with citizens and community organizations to fight crime and improve the quality of life of those who live in and visit Dunwoody.”

Claim: “City of Sandy Springs water bills almost tripled after becoming a city.”

Facts: Sandy Springs Mayor Eva Galambos replied, “The city of Sandy Springs unfortunately has no control over the water bills. Our residents are forced to be customers of the city of Atlanta, which has been the water provider of this area from the time water lines were first installed in mid-century of the 1900s. The city of Atlanta has raised water bills three times in the last two years, and since our residents are customers of Atlanta, they are suffering from these high bills.

The city has been in court for over two years trying to get out from under this arrangement, but unfortunately the Federal Circuit court, in which we were heard last June, has still not issued a decision. We would like the opportunity to arrange for a different provider of water for Sandy Springs than the city of Atlanta. Our high water bills are merged with the sewer money Atlanta collects, and our water revenue helps pay for the Atlanta water sewer system. Yet Sandy Springs does not even use the Atlanta sewer system. We pay for sewer to Fulton County. Thus, in effect we are paying for two sewer systems, which is double taxation. This is a very sore issue between Sandy Springs and Atlanta, and has been so even before we became a city.”

Claim: “Peachtree Corners City is already in court one month after incorporating! The estimated $50,000 for the city of Ashford (Brookhaven) would quickly disappear.”

Facts: Peachtree Corners City is not a city yet. The referendum passed and city council elections have held with runoffs scheduled. A nonexistent city cannot be sued. The community of Berkley Lakes has raised a boundary issue but a lawsuit has not been filed. Even with the change in the boundary lines, the Carl Vinson Institute has estimated the new city’s surplus to be $135,000, thus making both claims wrong.

Clearing the Air on House Bill 875

April 9, 2012

In the final hour of the 2012 legislative session, a conference committee report was presented on House Bill 875, a seemingly innocuous bill that dealt with protecting the personal information of hunting and fishing license holders.

Thinking that I knew what was in the legislation, I quickly voted “yes” and then stepped away from my desk in the House chamber to deal with a MARTA bill that was in the process of falling apart. I will have more to say about the MARTA bill in future e-mail newsletters.

I later found out that a last-minute amendment had been slipped into HB 875 to shield certain ethics investigations against elected officials from public disclosure, and to allow the State Ethics Commission to waive fees and fines against elected officials who file their campaign finance disclosures late. Click here to read more about it.

A “yes” vote was recorded, but I oppose the amendment that was added to HB 875. Click here to read a letter to the Clerk of the House of Representatives that will result in my opposition being recorded in the House Journal.

What are Franchise Fees?

April 9, 2012

By Ted Baggett
Carl Vinson Institute of Government (CVI)
University of Georgia

This is in response to a request for clarification about franchise fees and how each utility’s billing would be impacted by franchise fees contemplated in the CVI report, Revenue and Expenditure Estimates for a Proposed City of Brookhaven, as potential revenue sources for a newly incorporated city.

The study calculated cable franchise fees based on the ratio of population of the study area to unincorporated DeKalb. Cable franchise fees are collected either by the county or a city. Because cable subscribers within the study area are currently paying cable franchise fees to DeKalb County, this revenue would merely be diverted to a new city. It was assumed that the same fee imposed by DeKalb would be used in a new city and thus no increase in costs on cable bills was anticipated.

With respect to natural gas, Atlanta Gas Light (AGL) maintains infrastructure throughout much of metro Atlanta, and the cost of franchise fees paid to municipalities are spread across all rate payers whose gas marketers utilize AGL infrastructure. Thus, all natural gas customers, inside or outside of city limits, using AGL infrastructure would absorb this comparatively small cost of doing business through their existing rates.

Land line telephone franchise fees are usually calculated at 3% of costs for service and are an add-on only paid by municipal customers in the city with the franchise fee, so an increase of slightly less than 3% is a reasonable approximation.

Georgia Power’s standard electric franchise agreements call for a 4% fee on gross sales (less fuel costs and sales taxes) of electricity within a city. The Georgia Public Service Commission determined in 2006 that half of that fee should be added on to the municipal customer’s bill and the rest should be paid out of the rate base of all Georgia Power customers statewide. So generally speaking, most municipal customer’s electric bills would increase by approximately 2%.


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