More than 15 unincorporated DeKalb neighborhoods and civic organizations were present. Most neighborhoods are still considering their options related to joining the City of BriarLake (new moniker for combined Lakeside and Briarcliff efforts), the City of Atlanta or remaining (at least for the time being) as unincorporated DeKalb. The purpose of this meeting was to begin to understand the City of Atlanta option. We thank Druid Hills Civic Association for including nearby neighborhoods in their discussions related to this option!
Alex Wan, District 6 City Council Member was present. He indicated that the City of Atlanta would welcome annexing neighborhoods in our area; however, they are not driving the initiative or pursuing annexation. Rather, each the neighborhood should poll residents and pursue options accordingly. One unfortunate fact is that if certain neighborhoods chose not to join Atlanta, other neighborhoods would not be able to join because they would not be contiguous thereto. The City would be gaining property tax revenue and incurring additional expense by adding to its boundaries. The financial implications are not significant nor a driving factor to the City of Atlanta. Rather, Atlanta is interested in growing in general to continue to have influence in the Atlanta Metropolitan Area.
See the end of these notes for an important discussion of the timing required for our neighborhoods to have a voice in the cityhood process. City boundaries will be determined as early as November 2014 and it is critical that we make our voices heard over the coming months.
Specific Issues Discussed:
Schools
While many feel that schools are the most important factor in this decision, uncertainty remains on this issue. Historically, children annexed into the City of Atlanta schools have become Atlanta Public School (APS) students. The Atlanta schools that our children would attend are some of the best performing in the district. However, the schools in the area, Mary Lin Elementary, Morningside Elementary, Springdale Park Elementary, Inman Middle and Grady High, would not have enough capacity to absorb all of the neighborhoods considering Atlanta annexation. One potential and likely path is for our children to become APS students, but for Atlanta to contract with DeKalb County to educate them. This situation occurred with a portion of Hall County when it was annexed into Gainesville. Effectively, the status quo would remain. Over time, however, there is a possibility that some of the schools currently in DeKalb County could themselves move to the APS system. It is important to note however, that many more students attend the DeKalb schools in question than the children of the neighborhoods currently considering annexation into Atlanta. Further, school facilities are owned by the Board of Education and any proposed transfer of school property must be agree upon by the respective boards of education.
Questions regarding education will not be resolved prior to voting on new city boundaries.
Atlanta Financial Health
In 2009, the City of Atlanta was in a weak financial position. Cash reserves had dropped to $7 million. Since that time, the city has been increasing services and has actually had a slight reduction in property taxes. Yet cash reserves have increased to $130 million. The Atlanta government is now leaner and focused on fiscal prudence and performance management. Both Moody’s and Standard & Poor’s recently gave the City a 3 Level upgrade. A 3 level upgrade is extremely rare; typically, ratings are increased one level at a time.
The City is currently in the process of securing a $250 to $300 million bond to provide infrastructure enhancements. The focus will be on roads, bridges, sidewalks, and fire and police stations. Specific projects will be voted on in March of 2015. While neighborhoods currently considering annexation would not be included in the initial project list as annexation would not yet have occurred, up to another $50 million annually is being planned for infrastructure maintenance and new neighborhoods would be included in ongoing projects. The City is not raising taxes to cover the debt re-payments, but rather is finding savings in other areas, including pension changes, operational changes and competitive sourcing of contract bids.
Other top City of Atlanta priorities include transit and sewage improvements. See the following article discussing the City’s 13 year extension for making federally mandated sewage improvements. Many of the larger sewage projects have already been completed, but smaller ones remain. http://www.ajc.com/news/news/atlanta-gets-13-year-extension-for-mandatory-sewer/nSGRq/
While additional details were not discussed in this meeting, the following document provides more information on the City of Atlanta’s finances and focus. http://druidhills.files.wordpress.com/2013/12/atlanta-presentation-to-the-druid-hills-civic-association.pdf
Taxes
See the following website and select the link named “tax-comparison-spreadsheet” for an interactive tool to estimate how a specific home’s taxes would be impacted by a move from unincorporated DeKalb to the City of Atlanta.
http://druidhills.org/cityhood-annexation-options/city-of-atlanta-annexation initiative/
DeKalb County would continue to appraise homes even if the neighborhoods are annexed into Atlanta. While only an estimate, the calculation seems to reflect that an increase in taxes is not as extreme as many people have expected. Examples for property owners with a standard homestead exemption and the HOST credit follow:
|
House Appraisal |
40% Value |
DeKalb Savings |
CoA Savings |
|
$200,000 |
$80,000 |
$173 |
|
|
$300,000 |
$120,000 |
$81 |
|
|
$400,000 |
$160,000 |
$336 |
|
|
$500,000 |
$200,000 |
$590 |
|
|
$600,000 |
$240,000 |
$844 |
The tax analysis incorporates the DeKalb HOST credit in its current state. There is a risk that the current HOST credit will need to be re-calibrated over time and that County taxes will increase as a result. The HOST credit is a 1% sales tax, at least 80% of which is designated to reducing property tax. The property tax reductions relate to the county portion of the tax bill, but not the school and city portions of property tax. Details of the HOST credit were not discussed in length at the meeting; however, the below additional insight is provided from the Druid Hill website at this link:
http://druidhills.files.wordpress.com/2013/12/annexation-briefing-paper-on-taxes.pdf
The reasons for the differences in costs (taxes) may be surprising. The difference is not because city residents pay a tax on top of what unincorporated residents pay. Nor does the slight variation millage rates explain the difference in costs. As you will see in the spreadsheet, the differences in taxes are directly related to the HOST credit which is unique to DeKalb County. (HOST = Homestead Optional Sales Tax)
At this time the HOST credit keeps DeKalb’s effective tax rate competitive with other governments in metro Atlanta. However, HOST is fraught with problems. The distribution formula for capital projects among the County and cities is completely broken. Dunwoody receives $103 per capita for capital improvements, unincorporated DeKalb receives $21 per capita and Lithonia receives $1 per capita. HOST has not proven to be an adequate source of revenue for capital improvements and DeKalb is vastly underfunded for road resurfacing, sidewalk construction, intersection improvements and maintaining parks and libraries. Gwinnet and Cobb use 100% of their local sales tax penny for capital improvements but HOST only allows DeKalb to spend 20% on capital projects. The deferred maintenance of sidewalks, roads and public buildings continues to grow. There are over 400 miles of roads that need resurfacing in DeKalb, but only 40 miles will be resurfaced this year. In all likelihood, the General Assembly will need to rewrite the HOST legislation in the next few years to address the shortage of capital funding. There are no assurances that HOST will continue to provide the tax relief it currently offers.
Water and Sanitation
Atlanta has one of the highest water rates in the country. Households pay approximately $585 annually for sanitation while DeKalb county residents pay only $265. However, even if annexed into Atlanta, residents would continue to pay DeKalb County for sanitation rather than the City of Atlanta. The City and County could negotiate to change this, but the City of Atlanta would need to take on DeKalb sewage assets for this to happen. The City of Atlanta has no desire to own assets within the DeKalb’s water system, as it is currently under a federal consent decree to make needed improvements.
Police
Atlanta has approximately 2,000 police and a population of approximately 440,000. DeKalb County has approximately 1,200 police and a population of 700,000.
Zoning and Representation
The Atlanta NPU (neighborhood planning unit) system was discussed. See previous LLCC article posted earlier in August on the topic.
Paths to Annexation
- Referendum: Requires the state legislature to pass a referendum to annex a particular area. 50% of voters plus one would need to support the referendum in order for it to pass. This is the likely path the neighborhoods currently considering annexation would take.
- 100% Principal: For 1 single owner to be annexed into an adjacent city.
- Petition Method: This method requires a signed petition from 60% of landowners and residents and is therefore almost impossible in an area the size of Woodland Hills and LaVista Park.
Timing
Time is of the essence! Alex Wan noted that most of the DeKalb city boundary issues would be made as early as November of this year. It is critical that the impacted neighborhoods quickly educate and poll its residents so that our voice is considered before the new city lines are drawn. In fact, on August 27th, State Rep Mike Jacobs R-Brookhaven and District 79 State Rep Tom Taylor, R-Dunwoody with a directive from the State House Governmental Affairs Committee, met with Briarcliff, Lakeside and Tucker cityhood proponents. These representatives advised that the DeKalb cityhood proponents have until November 15th to come up with mutual agreement on city boundary lines or Committee Chairwoman Amy Carter will appoint a panel of five state House members to do so. To put it lightly, having two republican legislators who don’t represent any of the neighborhoods in question in the driver’s seat potentially making back door deals regarding our future is not ideal. See the press release related to this announcement here: http://neighbornewspapers.com/bookmark/25680419-House-committee-gives-instructions-to-DeKalb-cityhood-proponents
To get involved, please contact a board member of your neighborhood association.
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