After making some tough decisions that resulted in the reduction of over $6 million of department requests, the City of Valdosta Fiscal Year 2016 Budget, balanced and with no property tax increase, was approved by the Mayor and City Council at their June 25 City Council meeting.

City Council approved the $85 million budget—following over six hours of presentations at the June 9 and 10 public hearings--that includes no tax increase, and one they feel meets the expectations of Valdosta citizens. While the document specifically outlines the financial uses throughout FY 2016, city leaders still weigh every purchase with actual revenue flow and an assessment of real needs.

“Despite the challenging economic times, city staff presented the council with a balanced budget, as required by the City Charter,” said City Manager Larry Hanson. “The budget does not include any tax increases, and it is based on sound revenue and expenditure policies to ensure the long-term financial stability of the city.”

The economic downturn has resulted in $1 million less in sales tax collections since the year 2009, and the Local Option Sales Tax (LOST) this year alone is expected to generate approximately $800,000 less than projected. Special Purpose Local Option Sales Tax (SPLOST) VII collections are also not meeting projections countywide. According to the current trends, the city will receive a projected $12 million less than originally projected—or $68 million over the six-year SPLOST cycle. So while the cost of doing business and the demands for services have not decreased, some of the city’s largest sources of revenue have considerably fallen short of expectations.

Even so, Valdosta—Georgia’s 14th largest city— continues to have one of the lowest millage rates among peer cities in the state. With a property tax of 6.106 mills, Valdosta’s millage rate remains lower than it was in 1992, when it was 6.25 mills. Furthermore, property taxes make up only 25 percent of the general fund and only 10 percent of the city’s total budget. In recognition of the primary responsibility of a local government, which is to provide public safety, the proposed expenditures for police and fire services are in excess of $21.5 million, while property tax revenue is estimated at $8.4 million and LOST revenue at $8.2 million.

City leaders have made budget adjustments for several years while maintaining the services that citizens expect. Often, this means adjusting some projects, delaying some projects and looking at alternative ways to fund projects. One example of this is how the city now uses a lease program to purchase its more costly vehicles, such as fire and sanitation trucks. Matching the payment with the life expectancy of the equipment allows the city to maximize cash flow, thus freeing up funds for other major capital projects, such as water, wastewater, roads, drainage improvements, etc.

Over one-third of the city’s budget—approximately $32 million—is for capital improvement projects, of which a significant amount is earmarked for completing the new Wastewater Treatment Plant and Force Main Project. These projects were budgeted over two years and together make up about $55 million. Both are on track to be completed ahead of schedule in early 2016. The budget also includes two fire trucks that will replace vehicles that are over 15 years old, 17 police car replacements, necessary renovations to fire stations, road improvements, resurfacing, sidewalks and other capital projects.

City employees will receive a 1.25 percent Cost of Living increase in the FY 2016 Budget, which is consistent with what other local governments in the area are providing.

The budget does include the continuation of the Water and Wastewater Sufficiency Review adopted three years ago and its proposed annual 5 percent increase. It also includes a $2 per month residential sanitation fee increase, while eliminating the $10-$20 special pick-up fees for normal residential special pick-ups.

For the last decade, the city has relied on new development to grow the tax digest, as well as retail sales, as the backbone of the local economy. While the economy is rebounding in a slower rate than expected, recent increases in development, commercial and retail activity and industrial prospects are showing signs of promise.

“The City of Valdosta has managed its finances through the slowly recovering economy in a measured and responsible way, without major consequences to our service delivery,” said Mayor John Gayle. “We will remain vigilant and we are optimistic about future growth and the economic health and vibrancy of the city.”

The FY 2016 Budget provides the necessary resources to ensure the city is operated in a fiscally responsible manner. It ensures the city can provide the necessary services to meet the needs of the city and its citizens. This is something Hanson and Mayor Gayle credit to the guidance and direction provided by the elected officials of the city and the outstanding work of the city department heads, finance and budget staff and the entire city workforce.

The City of Valdosta FY 2016 budget is effective July 1, 2015. Citizens may view the budget document at www.valdostacity.com.