By Amy Wenk

The city of Sandy Springs expects a more severe decline in operating revenues for the 2010 budget than originally thought. Recessionary consequences such as a 7.5 percent decrease in property values will force the city to spend $8 million less in the next fiscal year than the current $91 million budget.

But the City Council didn’t argue about how to cut costs at a May 12 workshop on the new budget, which will be adopted June 23 for the fiscal year that starts July 1.

The heat rose instead as officials debated how to allocate more than $14 million in surplus funds revealed after auditing the 2008 budget, a result of “revenue outperforming expenditures,” City Manager John McDonough said. “We are fortunate to be in this position.”

The city staff proposed allocating the money in three ways. Half would go into the fund balance reserve, the city’s “rainy day” account. That would put just over $21 million in the reserve, enough for three months of expenses.

The mayor and council supported that idea because of the “very uncertain and unusual economic times,” said Dist. 5 Councilman Tibby DeJulio.

“It is very, very judicious that we continue to increase reserves,” he said. “We need to make sure the city has solid finances going forward.”

The council, however, was divided over the remaining $7 million surplus.

The staff recommended saving $3.5 million for long-term facility needs — future city buildings. For instance, the money might go toward purchasing the Goodwill site at the corner of Johnson Ferry Road and Sandy Springs Circle, which is adjacent to the Target property the city purchased in December.

The recommendation was to spend the remaining $3.5 million on the council’s prioritized capital projects, such as repaving roads, improving intersections and adding parks.

“I am somewhere between shocked and amazed,” said Dist. 1 Councilman Doug MacGinnitie. “We’ve overtaxed our citizens by $23 million. I think we should only take from citizens what it takes to run the city. It’s not our job to spend millions on capital projects as soon as we can.”

Dist. 6 Councilwoman Karen Meinzen McEnergy proposed a tax rollback of roughly $7.2 million. The break would save the owner of a $475,000 house around $175 a year.

“If there is ever a time the public needs a rollback, this is the time,” she said. “It’s the right thing to do.”

To which Mayor Eva Galambos said, “It sounds like an election year.”

She opposed a rollback. She said residents are taxed the same as they were before Sandy Springs was incorporated but now receive more public services.

“The community is very, very pleased with the results we are getting,” she said.

DeJulio, Dist. 3 Councilman Rusty Paul, Dist. 4 Councilwoman Ashley Jenkins and Dist. 2 Councilwoman Dianne Fries shared that sentiment and opposed reducing the millage rate.

Capital projects are “what people are hungry for,” said Fries, calling a rollback “silly.”

The proposed allocations of the surplus funds — half to the fund balance, a quarter to future facilities and a quarter to capital projects — will carry because the majority of the council is in support.

The council also discussed the CH2M Hill contract, which will be reduced in fiscal 2010 by $1.1 million to $26.1 million.

The proposed budget will be presented to the council May 26. Public hearings/workshops will take place June 2 at 6 p.m., June 9 at 5 p.m., June 16 at 7:30 a.m. and June 16 at 6 p.m.