Many residents of a proposed city of East Cobb could see their utility bills go up as a result of incorporation, as proponents of the plan seek ways to fund a city without raising property taxes.
Supporters of the cityhood initiative have pointed to a Georgia State feasibility study that concluded East Cobb could provide basic services without raising taxes and even projected a $4.2 million surplus.
But $7.2 million of that projected revenue would come from fees imposed on utility and cable companies that are generally passed on to customers in the form of a surcharge on their bill. New cities formed across Georgia over the past two decades have relied heavily on such fees, known as franchise fees, which many residents of unincorporated Cobb County do not pay.
“Obviously anytime that there’s going to be increased expenses for businesses or residential homeowners, nobody likes that unless they are able to perceive enough added value,” said Jim Harris, president of the East Cobb Business Association.
David Birdwell, a representative of the cityhood effort, said a committee is reviewing potential budgets for the proposed city, adding that it’s important not to look at line items in the feasibility study out of context.
“This finance committee is taking up the franchise fee issue as part of its study, and feels confident an increase in franchise fees would not be necessary for the city to be financially viable,” he wrote. “We anticipate the committee to complete its review in the coming weeks, and we will make those findings public at that time.”
According to their website, proponents of cityhood believe believe a new city would improve police, fire and zoning services, and “create and preserve local identity” without raising taxes.
The city of East Cobb would be the county’s largest with about 97,000 residents, located east of Marietta and north of Cumberland.
An exploratory committee of about a dozen people has been spearheading a public outreach effort after early backers were criticized for refusing to disclose their membership and funding. They also came under fire for partisan comments by the group’s former spokesman suggesting East Cobb needed to insulate itself from a Democratic takeover.
So far, the cityhood effort appears to have gained little grassroots traction. Several town hall-style forums to discuss it revealed deep-seated skepticism from many residents, while some expressed curiosity.
Despite the apparent lack of popular support, State Rep. Matt Dollar, R-Marietta, introduced legislation earlier this year that would pave the way for a referendum during the 2020 primary.
East Cobb activist Bill Simon, who has been critical of the cityhood movement on his blog, Political Vine, expressed doubt that the franchise fees would bring in as much money as predicted. He said residents could end up paying higher taxes on top of franchise fees.
“It means less money available for family groceries, savings, home repairs, etc., if money has to be given to support a government operating in the red from day one,” Simon said.
Most franchise fees can only be imposed by municipalities, not counties. The biggest chunk of the projected franchise fee revenue for the city of East Cobb would come from electric companies.
Neither Marietta Power nor Cobb EMC, which serve many households within the proposed city, collect franchise fees from customers in unincorporated Cobb County. Customers of Georgia Power pay about 1 percent in franchise fees.
In cities that have elected to impose franchise fees, Cobb EMC adds a surcharge, typically a 4 percent fee, to the customer’s entire electric bill and remits it to the municipality.
Support real journalism. Support local journalism. Subscribe to The Atlanta Journal-Constitution today. See offers.
Your subscription to the Atlanta Journal-Constitution funds in-depth reporting and investigations that keep you informed. Thank you for supporting real journalism.