Johns Creek: Foolin’ Ourselves

The residents of Johns Creek, Georgia have lots of things going for it.  Excellent housing, many of the best schools in the state for kids, and income levels that surpass nearly every other community.

Those positive attributes, however, have led to a flow of tax dollars into the City’s Coffers that is now doing more harm than good.

Since 2006, the year the city formed, the City has amassed $54,348,545 at the end of the fiscal year 2014, according to the City’s Certified Audited Financial Report.  That represents an increase of almost $7,000,000 per year of revenue over expenses.  With a population of around 80,000, that works out to more than $670 per every man, woman and child.

That’s an astonishing amount of money to be held per capita, and it’s growing.  Last evening, the City Council, under the lead of Mayor Mike Bodker voted to maintain the City’s millage rate at it’s current level, despite the property valuations rising sharply over the last year.  More money will be flowing into the City’s coffers again in 2016 coming directly out of the pockets of the residents.  And while it may not seem like a big deal to many outside of Johns Creek(after all, they can afford it), it is creating problems that will soon become more and more apparent as time passes.

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8 thoughts on “Johns Creek: Foolin’ Ourselves

  1. I couldn’t agree with you more, EJ. In addition to the magnitude of the reserves that you describe, I’d like to point how the reserves have cost us financial opportunities. The actual money in the fund loses purchasing power due to low risk investment/inflation every year and the loss of this extra capital in the hands of the citizens means it won’t be spent at local businesses, used to start local businesses, and so on. It is constricting local economic growth!
    I also agree with you about the potential ROI of the “District” because, with the addition of Forsyth’s proposal – http://www.forsythnews.com/section/5/article/27852/, I don’t know if Johns Creek could sustain the District even if it was built. Where is the data to support the creation? Now that Avalon can barely sell its homes and townhomes and its apartments have a huge vacancy rate, do we still want to build the residential portion of the CBD?

  2. Chris, I agree with you completely. I have not seen any data that supports the creation nor sustainability of “The District”. With business/shopping districts like The Forum in Norcross, and The Collection of Forsyth at the other end of 141, What sustainable retailers/businesses could “The District” attrac? I fear additional nail salons, massage parlors, and dry cleaners, or a semi-ghost town like Johns Creek Walk, where the majority of the businesses come in and out as in a revolving door because there is not enough foot traffic to make them viable. The vacant shop locations in the Downtown Duluth square also show a similar concept/dream that didn’t make it. Closed stores and vacant retail space.

    Since Johns Creek has accumulated these reserves, they need to spend them on what the citizens who contributed these reserves want — one of which is additional greenspace and parkland. This was one of the categories highly prioritized when we incorporated into the City of Johns Creek, and has yet to be addressed.

  3. Ernest,

    Generally, I agree with your arguments. In fact, I made the motion to rollback the millage rate to 4.295 from 4.614 for the reasons you outline and more. As you know, it was a split vote, with Lenny and I voting in favor or my motion and against keeping the millage rate the current level.

    But further, as part of my logic for rolling back the millage rate, based on my assessment of the newly released 10 year financial plan, I concluded that not only do we not need the money, we need to release the reserves and put that capital to work.

    As you can see on the video archive of the city council meeting, I made the following recommendations:

    – Fund working capital through a TAN line of credit, thereby freeing up $14M of capital
    – Assess the true need for the 90 day emergency fund. It’s easy to say we need an emergency fund but the more appropriate decision making process would be to clearly define the risks that need to be mitigated, understand what approaches and solutions there are to do so, and then determine whether in fact we need another $12M in capital tied up. Based on my conversation with the city manager, its not clear at all that we need a 90 day fund.
    – Allocate as much as $22M – $34M to capital projects to 1) neighborhood road resurfacing, 2) road construction and intersection improvements, and 3) land acquisition.
    – Issue bonds or some other debt financing instrument IF opportunities arise to acquire land and we don’t want to miss a unique opportunity
    – Roll back the millage rate to 4.295

    This healthy debate is not over. There will be another bite at the apple in a month when we evaluate the city budget and subsequently approve it. I do appreciate this council’s willingness to at least have the discussion, which apparently was not the case in prior councils.

    I look forward to your continued support as we strive to achieving a better balance in how we manage the city’s finances and operations.

    All the best,

    Bob Gray
    Post 4
    Johns Creek City Council

    • Councilman Gray,

      I certainly thank you for taking the time to read my comments. I also appreciated the support both you and Lenny gave to roll back the millage rate. It would be wrong of me to not mention that if you had two additional council members, your motion would have likely passed. So I would also encourage you to correct the charter so that no one can suggest that the Charter allows an election for a Council Seat only as the Council sees fit.

      I feel that the city has lost sight of just how much income had to be earned and how much businesses had to sell in revenue to generate the profits to help us amass $54 million. These are after tax dollars that came out of their pockets. It is not a trivial amount.

      Meanwhile we have some of the highest business taxes around. And that is why we have more empty store fronts and less business development than our neighboring cities. Most everyone will agree that the more you tax something the less you get of it.

      I also know that this is known by government officials because they will work to help reduce those very same taxes to induce businesses to move into our community.

      Some question my motives. My motive is simple. Create the best business and residential environment for everyone. Not just new businesses. Not just new residents.

      Create an environment that rewards everyone that meets the needs of the local economy. We should not be picking the winners and the losers. The market can do that on it’s own.

      Frankly, sometimes we make the solutions just too complicated. They do not have to be.

      Thank you again.

  4. Great info Ernest. Some I understand some of it and some I don’t. I am not well-versed in a topic so complex- budgets and so forth; however I do get that the city is not spending money on what would benefit the residents. My pet-peeve is the traffic congestion, and approving additional building, only to produce more empty spaces. We cannot fill up what have already, yet more are built. With school out for the summer we have had a reprieve, but all I have seen as far as attempts to make things more tolerable and taking place in my immediate area is several areas where road work is in process, all along Bell/Boyles, and taking place at the same time. It seems to me a planner with any intelligence and foresight would NOT have elected to tear up the same street, a major artery, in so many places sumultaneously. It is amazing how SLOW this process is moving. One cannot get close to saying any improvements have been made this summer. I understand these things take time, although my question would be why tear up the the street in three places at the same time, all along the corridor, and why so slow to complete them? I see weeks pass were nothing is being done… They just seem to tear things up and then take weeks off. A specific example would be the bridge on Bell Road, and even more glaring is at Bell Rd where it intersects Abbotts. They have been working on this right turn lane all summer. It’s not finished. It’s worse than it was. I personally watched a right lane turn lane being added on Rucker Road that began the same time as this one, which finished two weeks ago. The design and objective was exactly what we have going on in this example. I don’t know what city official is responsible to oversee and push these projects along… I doubt it would do any good to call that person. No one at City Hall seems to listen, let alone react, and as you say they ‘dismiss’ and refuse to explain themselves. The traffic situation is still not being addressed in JC. The council members have temporarily had a break in residents complaining about traffic, but with school starting up in 2 weeks the intense frustration will soon pick back up for our residents. It will be even worse due the unfinished road construction.

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