The city of Dunwoody will consider raising its millage rate for the first time since incorporation, according to conversations at a town hall meeting to discuss the possibility of a future bond referendum.
The city held its second town hall meeting to discuss the possibility of a bond at Dunwoody City Hall on May 24. The first meeting was held on May 17, and a third will be held on May 25. A bond referendum is a voting process that would allow voters to decide if a city should be authorized to raise funds for specific projects through bonds to be paid back over time, but city leaders also discussed the possibility of raising the city’s millage rate – or the tax rate used to calculate local property taxes – outside of a bond.
“We need to raise the millage rate,” said Mayor Lynn Deutsch at the meeting. “We have to keep up with the expenses of the services we’re providing. There is a demand in our community for more.”
During each town hall meeting, Assistant City Manager Jay Vinicki has given a presentation about the state of the city’s finances. According to the May 24 presentation, the city started out with $25 million in its FY2022 budget. The city expects to make about $24.2 million in revenue and has expenses budgeted at $28.1 million, creating an ending balance of $21.1 million.
“That means in the budget as it currently stands, we’re looking at what’s called a structural deficit of $3.9 million,” Vinicki said.
The city is considering raising the millage rate in order to try and close that deficit. The city’s millage rate has been at 2.74 mills since the city began, but the city’s charter allows the Dunwoody City Council to raise the millage rate to 3.04 mills maximum. Vinicki added that many residents in Dunwoody are taxed at a rate lower than 2.74 mills through a homestead exemption.
If the city increased the millage rate to the cap, it would generate roughly $1 million worth of additional funding for the city, according to Vinicki. He also said with the city’s new digest – which grew at about 6% this year, according to a presentation at the May 23 Dunwoody City Council meeting – and the possibility of growth in the city’s hotel/motel tax as the industry starts to bounce back from the COVID-19 pandemic, the city thinks the deficit could shrink to roughly $1.2 million.
“This would be a structural deficit that is not immaterial,” Vinicki said. “It’s still material … but it’s manageable. It’s one of those that, short term, the city will be on good financial ground.”
According to the presentation, for homes valued from $400,000 to $600,000, raising the millage rate to its cap of 3.04 would increase a city tax bill by $45 to $69. This increase would apply to the city’s General Fund and would primarily be used for ongoing operations.
If the city were to also move forward with a bond referendum, an additional millage rate would come into play. The city is considering the possibility of moving forward with a $30 million, $40 million, or $50 million bond.
The presentation showed the possible impact on a tax bill if the city went through with a $40 million bond in addition to raising the millage rate to the cap. For homes valued between $400,000 and $600,000 in that scenario, a total city tax bill would increase by $161 to $246.
At each town hall so far, city staff has presented a list of possible projects for a bond. The list is not finalized, and the projects listed are meant to be “illustrative of the types of projects that may be financed,” according to a disclaimer at the top of the list.
The few residents who spoke at the May 24 town hall seemed supportive of the possibility of a bond referendum as well as increasing the millage rate. The council will make a decision about whether to move forward with a bond referendum vote in July. If that happens, residents would not vote on the referendum until November. The council will vote on whether to raise the millage rate on July 11, according to a city spokesperson.
Council members at the town hall encouraged residents to reach out with their thoughts about the millage rate and the possible bond. A third and final town hall meeting will be held on May 25 at 6 p.m. at the N. Shallowford Annex.
To watch the entirety of the May 24 meeting, go to the city’s Facebook page.