2020 audit reveals revenue up, expenses down in Union

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2020 audit clay pilgrim

BLAIRSVILLE, Ga – Union County received a clean/unmodified opinion concerning its 2020 audit from Rushton and Company, a CPA firm.

Clay Pilgrim, CPA, CPE, CCF, delivered the information during the July County Commission meeting.

“I do have great news, this is real riveting information this audit, so I’m glad you joined us,” Pilgrim told the large crowd. He also thanked all county officials for their help.

The 2020 fiscal budget was amended down from $17,999,955 to $17,468,052 during the meeting as well.

The net position/ county equity covers three areas, net investments and capital assets, restricted net position, and unrestricted net position.  The total net position for the county in 2020 was $57,418,192.

  • Capital assets and net investments – $47,643,505 – examples: buildings, equipment
  • Restricted net position – $5,456,656 – example: SPLOST
  • Unrestricted net positions – $4,318,031 – example: residual

“For the year, there was an increase in net position, revenues exceeded expenses by $5,505,303. The largest reason for that increase was some operating grants and contributions that were received and sales tax increases as well with a lower expense increase overall,” Pilgrim stated.

In Union County’s General Fund also known as the operating budget, revenues increased 21 percent ($3,708,099) in 2020. Here’s the following breakdown of revenue increases:

2020 audit revenues by source. Sales Tax was the largest at 35 percent and property tax came in second at 32 percent.

  • Property taxes – $181,943
  • Title ad valorem – $543,158
  • Intangible taxes – $174,580
  • Local Option Sales Tax (LOST) – $922,524
  • Intergovernmental revenues – $1,358,375

“[LOST increase] is a trend we’re seeing across the mountain areas of the state with sales tax. Folks moving this way or spending time up in the mountains with the pandemic that took place last year,” Pilgrim added.

The property tax line includes the last seven years of digest, any collections paid in 2020, and assessments.

Expenses for the county also increased by 4.7 percent ($777,040). The breakdown is as follows.

  • General administration – $944,789 – the cost included capital outlay projects and the county reappraisal.
  • Sheriff’s office – $297,845 – personal services

One area of expenditures decreased and that was highways and streets which were under by $583,708 also for personal services.

The unassigned fund balance or general fund equity will allow the county to operate for 2.7 months. The fund balance is $3,896,041. Last year, the fund balance was $1,805,929 and could only operate for 1.3 months.

2020 audit expenses Public Safety was the largest at 35 percent and general government came in second at 27 percent.

Pilgrim explained that counties want to keep between two- or three months’ worth of monies in the fund balance in case of emergencies. In 2019, when the county increased property taxes by 17 percent on its side, Sole Commissioner Lamar Paris explained that the dip in the fund balance was part of the reason why.

SPLOST 5 went into effect in 2021 and thus far $51,780 has been expended on capital projects. The 2015 SPLOST or SPLOST 4 expended $6,210,663 in collected sales tax. SPLOST money can’t go into the general fund.

“It does typically reduce the need for other taxation,” Pilgrim commented because it goes toward capital projects.

However, SPLOST doesn’t go toward the operational costs. TSPLOST has a little more room concerning the operation of roads and bridges.

Packed room voices opinion on Union’s property reevaluation

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crowd for property reevaluation

BLAIRSVILLE, Ga – A raucous crowd turned out in force to discuss taxes and property reevaluation after notices hit residents’ mailboxes at the start of the month.

The meeting was moved to the jury assembly room and some still had to stand for the 2-plus hour-long meeting focused on property values and taxes. Assistant Police Chief Shawn Dyer instructed the crowd to respect each other, or an officer would remove them from the meeting. The cantankerous didn’t always heed the advice after the meeting began, but no one was escorted out of the room.

“The growth is what causes expenses to go up. We all know that. No matter where you’ve been before. The more you grow the more those expenses are going to go up. And we will continue to prepare for them, but these are not simple solutions, and they all take time, careful consideration, and planning. We have and will continue to be working with the Georgia Mountain Regional Commission,” Sole Commissioner Lamar Paris opened.

Union County’s also working with the Carl Vinson Institute, University of Georgia, and TBT to assist with future planning and find other revenue options to help lower property taxes.

Sales tax captures all people in a county whether they are property owners, renters, employees, visitors, short-time residents, or short-term rental and we certainly want them to assist in paying with the operation of our government,” Paris said. “For anyone to say that we are trying to grow the county without any thought of planning our future is simply not accurate.”

Stan King from GMASS, the company hired to reevaluate property value in Union County, explained that the estimated tax on the bottom of the reassessment notice wasn’t the tax for 2021. The taxes for 2021 haven’t been set as of yet because the millage rate hasn’t been established.

Paris stated that the millage rate is likely to go down this year, but the county doesn’t know the exact number at this time. Departments are just now turning in budget requests for the next year. The millage rate is set according to what a county budget requires.

“We’re going to make every effort to cut that mill rate as much as possible. You’ve got my commitment that we’re going to try to do that and cut as much as we can. But we’ve also got these increased costs; they’re not huge, but they’re going to be enough because of the sheriff’s department – no offense to the sheriff’s department – but it’s hard. We’re finding firemen the same thing,” Paris explained about the millage rate and increased public safety departments. Many counties are competing for employees and they’re going to the areas offering the higher-paying jobs.

Chart of Union County home sales. The blue line indicates the average sale price and the red line is the assessed value.

The number on the reassessments uses last year’s millage rate and last year Union County experienced a 17 percent tax increase on the county side. The county and the school each propose a separate millage rate and then it’s combined for the overall rate.

Even with last year’s tax increase, Union County had the 12th lowest tax rate in Georgia. Previously, it was the third-lowest.

The property reassessments were contracted out in 2019 and just completed in 2021. The revaluation was necessary because Union County had fallen below the state’s Fair Market Value requirements.

King explained that a county wants to fall between .36 and .42 in assessed Fair Market Value, but Union County had fallen below that range. If a property reassessment hadn’t taken place, then the county would have been fined by the state. The new rate places Union County into the .38-.39 area.

In other words, the value of home sales in Union County has continued to exponentially increase, but the assessed value largely remained flat. The reassessment catches property values up to the home sales value.

“In 2016, when the market started to increase in the value of home sales… I really picked out home sales because that’s the predominant class of properties that make up the tax digest,” King explained. “Our assessments being so much flatter than what the market actually does. It’s our duty to mirror the market.”

The county’s requirement by law to appraise all property at fair market value every year. The physical assessment only has to take place every three years.

GMASS Stan King

GMASS Assessor Stan King explained the intricacies of the property evaluation process.

After the reassessment, the assessments were brought up to Fair Market Value compared to the sales price.

This is why some people are experiencing property value increases of 100 percent or more. As home sale prices increase, then the assessed value of homes needs to match.

The home sales value continues to increase in North Georgia, which means values will probably need to be adjusted again.

However, once the housing market takes a downward turn, property owners need to make a report of that as well. Appraisals are typically a year behind concerning market values. Still, the market typically corrects itself.

“Between January and April, I would encourage everyone to file their [property] returns just like you do on your income tax, you’re supposed to do it on your property tax. Most people do not,” King said. “You’re paying taxes based on your property on January 1.”

Property owners still have time to appeal the new assessments, around 25 days. The tax assessor’s office can approve or deny exemptions depending on the property, such exemptions include homestead and agriculture. Flood plains and easements are typically taken into account at the time of evaluation. However, there’s no item that you can appeal for the amount of value increase.

The appraised value measures from the outside-to-outside wall, but there’s a difference in square footage if it’s heated or not.

“There’s an inflationary number that will be given to them of what they need to roll that back to on the inflationary growth. So, if you have your property and you’ve done nothing to that property, but we’ve increased the value all that is inflationary – the whole value difference is inflationary,” King added about the tax digest and millage rate process.

The tax digest is made up of more than just real estate such as heavy equipment, auto tags, timber, planes, and real property.

One veteran and former police officer Kevin Bloodworth spoke as part of the meeting and stated the value of Union County is in its citizens. He also criticized the county’s communication methods about the property reevaluation, saying if it had been better explained, then people wouldn’t be as angry.

“You got people out here living on $900 a month or less in Social Security so even a $100 increase in taxes plus the congruent increase in their insurance that’s a meal for them. They can’t drive somewhere but a couple times a week. Inflation is up 2.5 percent. Gasoline is up a gallon. The head of the federal reserve is telling us this time next year we may be under crushing inflation,” Bloodworth remarked. “Your job sir and that of your staff is finding ways to make this palatable and acceptable for the value of our community.”

Bloodworth also advocated for new building impact fees in the county.

Paris addressed impact fees, using Dawson County as an example. Many north Georgia counties don’t charge impact fees for new construction.

“A few years ago, Dawson County instituted impact fees to slow their growth instead it only sped up their growth. And today while our property tax rate was 18.9 mills, 12th lowest in the state, Dawson County, a county with similar size, population, and property values, was 23.6 mills, which made them the 18th lowest in the state,” Paris explained. “If you live in Dawson County, they’re going to make $5 million to $6 million more on their property taxes than we are based on last year’s mill.”

Paris reiterated that the last thing he wants is uncontrolled growth in Union County, but some growth is necessary to maintain the quality of life in the area. He touted Union General Hospital and local small businesses. They must be considered when developing the county.

“There’s nothing I would have loved better than to have left our property values just like they were. I did not make that decision. The board of assessors made that decision, and they made that decision because the state of Georgia was going to come down because it was impossible to keep up with values,” Paris commented.

The Sole Commissioner explained that 48 percent of Union County is owned by National Forest Service, 3 percent is owned by the TVA, and 20 percent is covenant-protected farmland. Additionally, Choestoe, Track Rock, and Suches don’t have access to public water. As a result, massive developments aren’t likely to happen and drive property values up. Without public water, it’s harder for developers to recoup their investments when they must build on 1.5 acres and include a well and septic system.

Paris took questions after the meeting ended on the topic.

As for how Paris operates his monthly meeting, he explained that anyone who believes they have something important to say can be placed on the agenda. Additionally, he said the question-and-answer session isn’t recorded because it doesn’t have to be. However, they do discuss every issue brought up during the Q and A sessions.

Information concerning Union County property reassessment

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BLAIRSVILLE, Ga – Union County issued the following information concerning the recently mailed property assessments.

“First, please do not panic. The assessment notice you recently received is only the newly assessed value on your property. IT IS NOT YOUR PROPERTY TAX BILL. Until the 45-day appeals process is complete, we do not even know the total value of all the Union County property, so the county and school have no way to determine what our millage rates will be to fund our 2022 budgets. Union County is currently still working on our 2022 budget requirements with department heads and elected officials. Please also remember that your property taxes will only be calculated later this year on 40% of your assessed value, not the full fair market value. Just like every other year.
Union County has not raised your property taxes. The assessment notices sent out recently literally say “THIS IS NOT A TAX BILL. DO NOT SEND PAYMENT.” It is only an estimate that is solely based on last year’s county and school millage rates. That estimate is required by law to be calculated on your notice that way.
The State of Georgia does a sales ratio study every year of property sold in a county and how that value compares to the actual value that was placed on the home or property by the county. If your county property values are below a certain percentage, then the state gives the county two years to get the property values in order or YOUR COUNTY WILL BE FINED. This is why we began the process with the company called GMASS in January of 2019 to start the revaluation process in our county, which has been in process for two years now. This was well before anyone knew about Covid-19 or how our property values would be increasing like they are now.
If anyone remembers the last time we had a county-wide revaluation in 2006, the public was also upset back then.
That is why the county has tried our best to explain as much of this process as we can publicly, but for some, it is difficult to understand all the parts to the process. If anyone would like to actually understand the entire process, please make an appointment to sit down with someone in the Tax Assessor’s Office, and any of their staff will be more than willing to help you see the process and ask questions about the process.
Please keep in mind that you have 45 days from the date of the assessment notice to file an appeal with the Tax Assessor’s Office. They are also there every weekday to answer questions or concerns you have. Their phone number is 706-439-6011.
It takes all the great Union County employees to make this county what it is. We all strive to provide services to this county and protect this county as best as we possibly can. That effort is never going to change. Currently, our county portion of the property tax rate (mill rate) is ranked as the 12th lowest in the State of Georgia out of 159 counties. We anticipate that after the revaluation is complete and we can set our new mil rate, we will drop from the 12th lowest to somewhere in the bottom 6. However, when you put the school mil rate and the county mil rate together, which adds to the total of what you actually pay, Union County has the 3rd lowest total tax rate in the State of Georgia. This is because our school system also does an excellent job of utilizing its budget and keeping it low.”

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