Walthourville residents may soon be paying municipal property taxes to keep the city running. Over the past three years, expenses have gone up, but revenues have remained the same, according to an expert who warned the council Tuesday to take immediate action.
Unlike most other municipalities, the city has not implemented property taxes, but now a series of public millage rate hearings in the coming days will be held to address the crisis with a tax.
On Friday, the city’s website published a notice that a budget and millage rate meeting would be held Monday, October 16 from 6 p.m. to 8 p.m. at the Walthourville Police Department. Although the meeting is open to the public, the notice read, “Occupancy limit is 16 due to the size of the location.” More than 16 people were present at Tuesday’s City Council meeting at that location.
By law, the city must hold three public hearings to discuss setting the proposed millage rate. These hearings, which have to happen in October due to time constraints, are residents’ chance to tell their elected officials what they think about a proposed rate and how it would affect them.
To keep the city of about 3,800 people afloat, residents may have to pay annual property taxes between three and six mils. A mil is 1/1000 of a dollar, or $1 on every $1,000 of assessed property value.
Commissioners also voted to discuss rewriting the proposed budget. Walthourville’s budget year starts January 1.
Walthourville offers four basic services: police and fire; library; water and sewer; and road maintenance. A property tax would help pay for those basic services.
The Current has asked the city for a copy of the existing 2023 budget with departmental detail, which the mayor and council said Tuesday would have to be revised to reflect the present reality. The overall budget is available on the city web site. A check of the University of Georgia’s Carl Vinson Institute of Government’s website does not show any copies of the city’s budget since 2017. Budgets for the years 2015 and 2016 also were unavailable on the website. Under state law, local governments are required to upload PDF copies of their budgets to the site within 30 days of adoption.
City ‘needs to make some decisions’
The Georgia Municipal Association trains city officials and helps them figure out solutions to problems like Walthourville’s budget deficit. At the October 10 city council meeting, GMA’s Pam Helton said City Clerk Shana Moss had asked her “to review the financials of Walthourville so that we could look and kind of brainstorm about some revenue sources that we can take advantage of. And in reviewing the financials, I only went back two years, just last year and this year, trying to determine maybe what, if anything we could do—Walthourville could do.”
Her findings were sobering.
Helton told officials, “Last year was a bad year for y’all. Y’all — well, actually, y’all were over budget almost, with all funds, almost $700,000. So when you’re over budget, that means you’re taking money from your fund balance to balance your budget. This year, you’re heading in that same direction, not that much money, but you’re heading in that same direction. The city of Walthourville does not have the reserves to carry them over with fund balance as they have in the past. Walthourville needs to make some decisions about how they’re going to move forward with making sure that they have the revenue to support their expenses.”
The city has only one main source of revenue, other than county funds: its water system. That, Helton made clear, is not enough to keep the city going. Baker said the city recently completed upgrades to its water system, and that the city had stopped getting calls about “smelly water.” But while the immediate problem may have been fixed, Helton said the city is unprepared for any future infrastructure problems, like a water main break.
“When you have a system like Walthourville, especially with water/sewer, you don’t have the reserves to help to fund a replacement if anything were to happen to any of your lines,” Helton told city officials. “In this day and time, yes, there’s grants available for water/sewer infrastructure, but you have to have some kind of match, you have to have something that you can use.”
She added, “And you’re down. I’m not even sure that your your revenues are supporting your expenditures in that.”
The overspending “could be due to several reasons,” Helton said, “but I would suggest to have a water sewer rate study performed by Georgia Rural Water Association, so that they can come here in and properly evaluate, to make sure that the charges will pay for the service that you are providing to your citizens.”
She continued, “The other thing I’m going to suggest is that every single charge that you charge be evaluated. I don’t care what it is, how low, or how big. You need to evaluate those charges, to make sure that whatever you’re charging, you are recovering the cost to provide that service or that whatever it is.”
Just as the cost of eggs and milk and just about everything else has gone up in recent years, Helton said, the cost for things the city needs also has gone up — but it hasn’t brought in more money to keep those services going.
“You know, 10 years or three years ago, the prices were nothing like they are today,” she told the council. “You know that by going to the grocery store. Your expenses just keep going up, but your revenue is staying the same. And you cannot live like that.”
“You will be doing a disservice to your community by allowing this to continue. You’ve got to make some changes. Either you’re going to have to evaluate those revenue sources to make get some revenue or you’re going to have to look at your expenses and see what services you can do without. And I know nobody wants to do that.”
Walthourville must act to remain a city
If the city cannot provide at least three basic services, City Attorney Luke Moses said, Walthourville could lose its incorporation status. Under Georgia law, a city must be able to supply at least three of the following, even if it contracts out the service:
- law enforcement
- fire protection and fire safety
- road and street construction or maintenance
- solid waste management
- water supply, distribution, or both
- wastewater treatment
- stormwater collection and disposal
- electric or gas utility service
- code enforcement (building, housing, plumbing, electrical, etc.)
- planning and zoning
- recreational facilities
According to GMA, cities that do not meet these and other minimum requirements face “termination of the legal existence of the municipal corporation, resulting in the loss of all assets, property, and legal rights as a municipal corporation and causing the dissolution of any local authority created by the former municipal corporation. If this occurs, the state empowers the county to use the assets of the municipal corporation or local authority to retire any outstanding debt.”
And there’s no time to lose, according to Helton: “You need to look at Walthourville, and you need to see what your finances are doing, and how you can make sure that you are protecting your citizens and you are protecting your infrastructure, so that when the time comes, if you need something, you will have it….You need to start putting away for that water, sewer infrastructure, you know, you need to be finding that depreciation. I mean, I hate to be the bearer of bad news, but it, you really can’t ignore this, because if you ignore it, you’re gonna regret it later.”
While the city is still figuring out how much property tax is needed to cover basic services, Helton, who holds a degree in accounting and finance, recommended a millage rate of between 3 and 6. If the city takes her advice, that would mean property owners could pay a tax of $3 to $6 for every $1,000 of a property’s 2023 assessed value next year. The assessed value is usually 40 percent of whatever the county has said the property is worth for tax purposes.
How much would homeowners pay?
For example, if you own a house valued for tax purposes at $100,000, you are only taxed on $40,000 — not the full $100,000. (The tax valuation is not the same thing as the market price and is based on square footage and the overall condition of the house.)
That 40 percent is the assessed value. Multiply that by the millage rate to figure out your property tax for the year.
In this example for a rate of 1 mil, the property owner would pay $1 on every $1,000 of the assessed value, which is $40,000. That would be $40 per year for a one-mil tax.
That would mean a property valued at $40,000 for tax purposes would pay $120 to $240 per year.
Here’s what that looks like, based on current Liberty County property tax values chosen at random. These are only estimates based on current recorded property values and are not rounded up to the next dollar:
- A home in the Oakridge subdivision valued at $153,159 (house and land) would be taxed on $61,255.60, which is 40 percent of that property’s value. One mil on $61,255.60 is $61.25. That means if the city imposes the suggested rates the property owner could be looking at between $183.75 for 3 mils and $367.50 for 6 mils per year .
- A mobile home and lot in Allenhurst’s Doby Estates in the Walthourville tax district valued at $3,699 would be taxed on $1,479.60. One mill on that value is $1.47. The annual city property tax, if enacted, would be between $4.41 and $8.82.
While these figures may seem small to some, they are a big deal to others. In the example of the Oakridge house, another $30-plus per month paid as a $367.50 lump sum at tax time could put a significant dent in an already-tight household budget. If the owner of the Allenhurst mobile home is retired, disabled, or unemployed, even $10 could pose a hardship.
A three-mil property tax would bring the city about $160,000 per year, Helton said, but added the city needed closer to 6 mils.
Ways to bring in money
Mayor Pro Tem Sarah Hays asked what taxes other cities Walthourville’s size had imposed, “like a fire tax.” Helton replied that a fire tax was a “great opportunity,” because police and fire bring in “very little revenue.”
Hayes expressed concern for the city’s most vulnerable residents: “I just want to make sure that the citizens are made aware of everything before all of this is put in place. Because like I said, we have senior citizens, we have disabled people, we have low income, you know, all of that, and nothing should be thrown on anybody without a public hearing.”
The city does have some options to protect the its more vulnerable homeowners. It could offer homestead exemptions, which are basically discounts, to people whose property is their primary residence. Other common exemptions are offered to senior citizens, disabled, and military veterans. Such discounts would also limit any potential revenues the city might bring in.
Councilwoman Luciria Luckey Lovette said, “A while back, we were trying to develop funds for the fire department and were advised that most fire departments have fundraisers.”
“Volunteer or full-time?” Helton asked.
“Full-time,” Baker said.
“I think that at the time, they were volunteer,” Lovette added.
“I don’t think any police departments or fire departments have fundraisers,” Helton said. “You could have a festival.”
But the bottom line, she explained, is that fundraisers are not enough: “$100,000 of this year’s budget is non-recurring revenue from FEMA.”
“Do we have time to get out of it now?” asked City Attorney Luke Moses.
“Yes, you do,” Helton said, “but you’ve got to act.”
The city gets its money from two sources: revenues, which are income, and interfund transfers, which are transfers from one fund to another to cover expenses.
Where the money goes
A look at Walthourville’s current budget summary lists $1,305,200 in “taxes” as the General Fund’s largest revenue source. Those taxes include LOST funds from Liberty County at a rate of 5.74 mils, according to the Georgia Department of Revenue. The city’s second-largest revenue source is “charges for services,” which includes water and sewer. Next is “intergovernmental” at $174,000, which means payments from other governments like the county or neighboring cities. “Fines and forfeitures” includes things like traffic tickets, which was projected to bring in $52,000. “Miscellaneous” was listed at $9,000. The city’s lowest source of income is licenses and permits, which were projected to come in at $1,000 through the end of this year.
The city had projected those funds on the following expenditures this year:
- General government $364,000
- Judicial system $10,000
- Public safety – police $449,000
- Public safety – fire $554,000
- Streets $258,000
- Sanitation $468,000
- Maintenance and shop $40,200
- Health and welfare $10,700
- Recreation $5,800
The Water and Sewer Fund is separate from the General Fund. This year, it was projected to bring in $1,554,000 in charges for service. Every cent of that was projected to be spent on operating and capital expenditures to keep the system going.
A deeper dive into figures from the budget workshop shows what the city originally had budgeted for each line item, what the actual numbers were to date, and projected figures through December 31, as compared to the 2023 budget.
Some of those numbers changed significantly. For example, the TAVT account, which is a sales tax on motor vehicles, originally was budgeted to being in $19,000. At the time of the budget workshop, it had brought in $24,640 and was expected to bring in a total of $28,160. The 2023 budget listed that fund at $30,308.
Some of the revenue figures seem overly optimistic. The telephone franchise fee, originally budgeted at $4,000, actually had brought in $194 at the time of the workshop and was expected to reach $221 by December 31. Similarly, General Business License fees, originally projected at $12,000, are only expected to bring in for $806 by year’s end. The 2023 budget estimated $1,000 as the more likely figure. And the city had counted on $245,000 in fines and fees, but is likely to collect only one $34,422 by year’s end.
The problem didn’t happen overnight. The University of Georgia’s Carl Vinson Institute of Government shows budget reports for Walthourville for 2012, 2013, 2014, and 2017, as well as an asset forfeiture report from 2021. The city apparently has not uploaded any financial reports to the site since then, and has not uploaded its budget since 2017, which state law has required since 2011.
In 2021, then-Police Chief Alfonza Hagan said the city had no seized assets to report. Law enforcement agencies have to report to the Prosecuting Attorneys Council of Georgia any such asset forfeitures or returns. Typically, agencies that recover vehicles and cash from drug busts will report those funds, which they often use to fund equipment purchases like new police cruisers or bullet-proof vests.
A look at how Walthourville’s finances compare with cities statewide shows that not only are the revenues a fraction of the average, but also that Walthourville doesn’t bring in any money in categories — like property tax — that generate millions for other cities.
In 2019, the most recent figures available from UGA, Walthourville took in $38,318 in general property taxes, compared to a statewide average of $2,918,778.
All is not lost
A property tax alone wouldn’t be enough to fix the problem. But there are other categories where Walthourville has yet to consider for bringing in tax revenue, such as public utility, timber, motor vehicle, mobile home, intangible, hotel/motel, and railroad equipment.
Helton pointed this out to the council at Tuesday night’s meeting as the train rumbled past the room, blowing its whistle: “Y’all need to get some money from this railroad track out there!”
Other possible untapped revenue sources include local, state, and federal grants. These include Local Municipal Improvement Grants (LMIG), as well as grants for forest land protection, water and wastewater, solid waste, crime and corrections, Community Development Block Grants (CDBG), county Board of Health revenues, public welfare, and city special option local sales tax (SPLOST) — a tax that citizens would vote on to cover a specific expense, like a recreation center.
The 2019 report also shows Walthourville does not collect numerous fees that could help the city stay in business. Those include court fees, as well as fees for planning and development; police and fire services; streets and public improvements; fines and forfeitures; recreation; speeding tickets; and reimbursements for damaged property, among others.
In 2019, the city brought in $691,476 in water charges and $640,969 in sewer charges, for a total of $1,332,445. It also collected $584,494 in service charges; the other $265,791 in local intergovernmental SPLOST charges; $33,603 in title ad valorem tax (TAVT); $4,715 in personal property taxes on “intangibles;” $427 in real estate transfers; and $538,526 from county Local Option Sales Tax (LOST).
“You have to start planning now or else you’re gonna be a sinking ship,” Helton warned.
‘We wanted to keep our city’
Losing that incorporation would mean a severe blow to local pride. During the meeting, city officials and members of the Georgia Municipal Clerks Association showered affection on Walthourville’s first clerk, Molene Burke, 91.
Walthourville garnered national attention in 1974 after a group of women secured the city’s charter from the State of Georgia. By default, they became Walthourville’s city officials until the first election, drawing national media attention because Walthourville was the first city in the United States that was run entirely by women.
“We did not do this because we wanted attention,” Burke said. “We did it because we felt like the city was fixing to be taken over with other people. And we wanted to keep our city.”