Fulton County sitting pretty with $44 million more in reserves

By Johnny Edwards

The Atlanta Journal-Constitution

Fulton County's fiscal outlook for 2011 got sunnier Wednesday when commission Chairman John Eaves announced the county finished December with more than $156 million in reserve.

The figure is almost $44 million more than the expected balance Eaves, County Manager Zachary Williams and Finance Director Patrick O'Connor were working with when they drafted next year's tentative budget. That proposal cut 64 percent into the fund and kept on hand just 6.93 percent of the expenses budget, well less than the industry standard of one month's operating expenses, or 8.33 percent.

With final budget approval expected on Jan. 19, the discussion among commissioners has gone from making painful service cuts to giving raises to the lowest-paid county employees, and whether the reserve fund could be increased as high as 12 percent to brace for 2012.

"We had a record-breaking year in terms of our tax collection rate," O'Connor told the AJC. "We're okay for 2011, but as I've indicated in previous meetings, 2012 is going to be a tough year because of declining revenues."

He explained to the commission that the county had a 97.3 percent tax collection rate last year, the best since 2003, mostly because the Tax Commissioner's office was faster and more aggressive with bills and tax liens.

Fulton Chief Appraiser Burt Manning told the AJC the county received a windfall in revenues in 2010 that shouldn't be expected this year, when the tax digest is expected to decrease by a minimum of 5 percent equating to a $29.3 million revenue loss. In 2010, the county came out from under court-imposed temporary collection orders which, because of a high number of unresolved tax appeals, mandated 85 percent tax collections on several categories of property owner. Last year, Fulton was able to go back and bill for those uncollected 15 percents, Manning said.

The commission voted during the last budget process to decrease its required reserve fund from 8.33 to 6.93 percent to avoid layoffs. Now Williams is recommending it raise it to 11.2 percent, or $65.5 million.

"Simply protection for 2012," he explained to the board. "I believe, as I sit here today, it would be necessary to draw that down."

Some commissioners wonder if it will be enough. Robb Pitts hinted at litigation expenses, declining to reveal specifics of a closed executive meeting, and he reminded the board of the onslaught of appeals expected when a new law requires assessment notices to be mailed to every property owner. He said another percentage point should be added to the reserve fund.

"In one week, that $65 million could be eaten up," he said.

New north Fulton Commissioner Liz Hausmann asked O'Connor if anything was being set aside for pension plan payouts, which some experts predict could break local governments in years to come. O'Connor responded that once the economy improves, money should be set aside for that over a number of years.

During a public hearing that lasted hours Wednesday, the board heard from dozens of residents who heaped praise on libraries and senior services, asking the board to not only leave funding intact, but to consider raising it. Several people said the Harriett G. Darnell Senior Multipurpose Facility in northwest Atlanta needs renovations, repairs, a fitness room, more bathrooms, a parking lot expansion and a track. Other seniors asked for help with child care.

"Please look out for us," said Betty Butler, who is raising grandchildren," and we'll be praying and looking out for you."

Later, after the revised budget figures were presented, Eaves asked the board to consider a request by Tax Commissioner Arthur Ferdinand to give raises to several of his employees so their salaries are comparable with other county employees with similar workloads. The raises wouldn't affect his office's budget, Eaves said.

Pitts balked, saying there are salary inequities throughout the county government, and "we're in this position, based upon lobbying." On a motion from Emma Darnell, the board voted 5-1 (Pitts dissenting, Tom Lowe out of the room) to have Williams and Personnel Director Paris Brown look into the matter and make recommendations to the personnel board.

Though the board didn't vote on it, Darnell also said she wants to look at 2 percent raises for the lowest-paid employees, in categories that generally earn $50,000 per year or less.