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Alpharetta Council reviews FY2026 budget forecast, discusses occupational tax and capital shortfall
Summary
City staff presented a draft FY2026 budget showing a roughly $162 million total with constrained revenue growth; council discussed millage structure, a possible occupational-tax change to raise capital funding, and scheduled June budget hearings.
City staff presented an abbreviated preview of the proposed fiscal year 2026 budget and the city council held a workshop discussion on revenue constraints, millage structure and possible changes to the city's occupational tax.
At a May work session, Finance Director Tom Harris briefed the council on high-level figures for FY2026 and on options to preserve capital funding while holding the overall millage rate steady. "We were able to produce a budget on May 5 and put it on our financial transparency site and the City's website," Harris said as he ran through slides not visible to the public viewers that evening.
The presentation placed the total city budget at about $162,000,000 and described the general fund at roughly $100,900,000 compared with about $103,600,000 the prior year; staff said the total is lower than last year largely because of differences in how prior-year fund balance and one-time receipts were recognized. Harris told the council the budget projects only about 1.8% growth in operating revenues, and he highlighted pressure from personnel costs, E-911 charges being moved into the general fund and flat-to-down commercial valuations as the main constraints.
Council members and staff discussed the city's millage structure, which the presentation kept at an overall rate of 5.75 mills while shifting about 0.02 mills from the debt service mill to the operating mill to produce approximately $135,000 for the general fund. Harris explained that because the city issues level debt and expects some property-digest growth, the debt-service mill could be reduced slightly and that reduction can be used to balance the operating budget without raising the overall millage.
Council members pressed for additional clarity about the property-tax digest, the floating homestead exemption's effect on residential growth, and how bond schedules affect long-term debt service. Councilman Hanks asked for confirmation of the split between commercial and residential taxable digest shares; Harris responded that after exemptions the commercial share is about 55% and residential about 45%, a shift he traced to introduction of the floating homestead.
Mayor (unnamed) described trade-offs for homeowners and the city: "Floating homesteads of 3% limit the upside for property taxes, which is the overwhelming majority of the revenues for the city of Alpharetta," the mayor said, adding that the cap reduces revenue growth during inflationary periods and tightens the budget. Several council members urged planning for multi-year capital needs rather than one-year fixes.
Harris described recommended operating initiatives totaling roughly $215,000 in the base budget (including a firefighter position) and a conceptual option to raise occupational-tax rates that staff projected could generate about $850,000 and would be earmarked for capital if adopted. Council members said they wanted more time to consider that option and asked staff to provide comparables and impacts on local businesses.
Council scheduling and next steps were set during the workshop: staff will run a follow-up budget workshop on June 2 and three public hearings in June (one evening public hearing and two hearings on June 23 at 11:30 a.m. and 6:30 p.m., per staff's calendar adjustments) so the council can receive additional public input before final decisions.
Background and context: Harris traced the city's millage history, recent bond issues and the capital program, and he noted capital priorities in the draft budget including road maintenance, stormwater, IT, facilities and fleet replacement. He said the base-budget annual capital contribution in the draft is about $2.26 million (down from a prior planning target of $4 million) and that T-SPLOST and other one-time sources can affect year-to-year capital spending.
The council treated the session as a workshop (no action was required on the budget itself). Staff was directed to continue developing the FY2026 proposal, provide more detailed comparisons on occupational-tax options, and present materials at the June workshop and hearings for public review.
