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BOC discusses creating SSD reserve fund to offset taxes

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BOC discusses creating SSD reserve fund to offset taxes

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Putnam County Commissioner Trevor Addison and board chairman, Dr. Steve Hersey, talk just before an Aug. 10 budget work session. SHANNON SNEED/Staff

Putnam County commissioners discussed creating a reserve fund for the newly created special service district (in the unincorporated area) and then using some of those funds to offset property taxes.

Negotiations over service delivery with the city of Eatonton recently led to separate tax districts for city and county residents, and Doug Eaves, a former county administrator in Candler County suggested the BOC create a reserve fund for the SSD. Eaves recently resigned from his post but had participated in talks between Candler County and the City of Metter on the same subject.

Eaves has been consulting with the county on the matter.

The new taxing method still has city residents paying school and city taxes plus their portion of county tax for shared services, but for unincorporated residents, their portion now comes out of the SSD tax, which means county taxes remain separate to cover non-shared services.

Chairman Dr. Steve Hersey broached the subject at an Aug. 10 budget work session.

“Eaves recommended we put $300,000 of the reserve into the SSD,” Hersey said, suggesting that since the SSD is 10 percent of the total budget, 10 percent of the general fund reserves should be put in the SSD reserve fund.

The proposed 2019 budget is $17,070,256, of that, about $1,838,680 will come from SSD taxes.

“The $300,000 would be about two months operating expense (for the SSD),” County Finance Director Linda Cook said, “which is what we try to keep in reserve in the general fund.”

In order to offset property taxes for the entire county, the proposed budget calls for $415,061 to be transferred from the general reserve fund to the general fund, so Hersey questioned whether the board should use some of that SSD reserve fund to offset the millage rate in that district.

Hersey advised that in the general fund about 2.5 percent of the budget is offset by appropriation from the fund balance.

“Should we not consider 2.5 percent of the tax levy in the SSD to be drawn on a reserve in the special tax district?” Hersey asked commissioners. “That’s what the reserve fund basically is for, to offset property tax. Should it not also then be used to offset the property taxes of the SSD?”

Cook advised that 2.5 percent of the $1.8 million SSD budget is $46,000.

“Then, we move $350,000 over and use $46,000 to reduce tax levy,” Hersey said. “If you don’t use it to offset property tax, property tax is just going to go up by $420,000 in the general fund. You take the same analogy in the SSD and you’ve got $300,000 in a reserve, that a majority of came from over collections and can only be used to offset property taxes.”

Commissioner Trevor Addison noted that $415,000 is going into the base millage rate for countywide use to reduce taxes countywide.

“You’re already reducing it countywide using that money,” Addison said. “I just think it’s cleaner to keep the millage rate reduction in the general fund countywide if that’s what we’re going to allot to it.”

“But that’s for countywide services,” Hersey argued. “If the people living in the SSD are paying for special services, why should everybody in the county get a millage rate reduction?”