By the end of the year, Fulton County had drained its reserves, but had collected more than twice the property tax money it needed to to ensure the local government would remain solvent.
The reserves will be replenished next month, said Sharon Whitmore, Fulton County’s chief financial officer. And $40 million that was borrowed from two accounts will also be repaid — at least some of it, with interest.
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The county needed to collect a minimum of 28 percent of the property tax money it was owed to pay back a $200 million loan that was due at the end of the year. By Dec. 31, 58.5 percent of the property tax money had come in, and the collections are above 60 percent in January. Property taxes are due Monday.
“Collections are still coming in. We continue to receive a substantial amount of mail,” Whitmore said. “Dr. (Arthur) Ferdinand (the tax commissioner), has not let up.”
This is the first time the county has collected money for one year's budget into the next calendar year. It happened because county commissioners' decision to freeze most residential property values at 2016 levels after complaints of higher-than-expected values from residents led to a delay in sending assessments. The state revenue department's rejection of the Fulton County tax digest further delayed the county from sending tax bills.
Fulton government took “extraordinary efforts” to manage cash flow, said Dick Anderson, the county manager. That included a request in August to limit discretionary spending, Whitmore said. While there was no hiring freeze in place, most departments kept their employee vacancies through the end of the year.
As such, the county spent $45 million less in 2017 than it had budgeted for, with much of the savings coming from unspent salaries and benefits.
Ratings agencies — which watched Fulton to make sure it could pay its obligations — have noticed the efforts Fulton made. Tuesday, Moody’s said the county had a stable outlook and was in a “healthy financial position.” The drop in reserves “is solely driven by the timing of property tax receipts,” Moody’s said in confirming the county’s rating.
Still, Fulton is considering doing things differently this year, looking for a line of credit at a local bank instead of getting a tax anticipation note, as it has in the past. Whitmore said borrowing costs could be lower if the county goes another route, and it could be easier to renegotiate the terms of the loan if Fulton ends up in a similar situation with property tax money in the future.
The state must still approve the 2017 tax digest, but Fulton is already moving forward with its property assessment process for 2018. Fixing it — making it more transparent and accurate, and better communicating with residents about their property assessments — is a priority of the commission this year.
"Everyone understands what's at risk if we're not successful," Whitmore said. "We could suffer through another year like what we suffered last year. Our market credibility, our credibility with property owners and citizens would be at risk. It's pretty critical."
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