Feasibility Study FAQ

(A Discussion of the Fiscal Impact of Greenhaven)

1.     What is a feasibility study? 

A feasibility study seeks to determine whether the services to be provided by a proposed city along with the necessary administrative support can be adequately funded by the revenues that would be available. Put more simply, the feasibility study estimates whether Greenhaven will take in enough revenue to pay for its expenses (including operational and startup expenses). In the case of Greenhaven, revenues were estimated at $45,611,418 and expenses were estimated at $18,434,437 leaving an excess surplus of $27,176.981.

2.      What will you do with the estimated $27 million surplus? 

The feasibility study represents estimates.  It will take a year or better to figure out actual costs and revenues that will then determine next steps.  The new city can then consider taking on more services.  The underlying philosophy is as follows:

a.       Greenhaven should maintain a financial philosophy of fiscal conservatism.  That includes a balanced budget, capital reserves, and underwriting a campaign for economic development.

b.      Greenhaven should always work very hard to keep costs and taxes at a minimal level.

c.       From the beginning, Greenhaven should focus on economic development by establishing an Office of Economic Development (included in the charter). Greenhaven is able to establish a Development Authority.

d.      Greenhaven will have a community involvement component known as Community Area Planning Units (CAPUs) that are authorized by the Charter.

e.       Greenhaven would like to supplement education efforts within its boundaries. No programs can be finalized or enacted until a governing body is put in place.

3.      Are police included in the cost or revenues? 

No.  The revenue to pay for police comes primarily from our property taxes.  The proportion of property taxes that pay for police will stay with the county until the leadership of Greenhaven decides to take on police services. Best practices will be researched and several options will be explored. 

4.      Are the expenses in the feasibility study just for 3 services or do they include overall operating costs? The feasibility study estimates include startup and overall operating costs such as:

a.       Mayor and City Councilmember salaries

b.      City Clerk and City Attorney

c.       Purchase of parks

d.      IT

e.       Finance department

f.        Human resources

g.       Community and Economic development

h.      Municipal Courts

5.      The revenue from property taxes seems low.  Why?

With a population of 294,000 residents, Greenhaven will receive only $414,000 in property taxes. This is low because the bulk of our taxes will remain with the county to pay for police, fire and safety.

6.      How does the least commercially developed area in DeKalb County end up with more revenue surplus than wealthier cities

Cities have revenue sources that counties do not have such as franchise fees.  Franchise fees are fees paid by utility companies (cable, electric, natural gas, and phone) for public right of ways.  Because of the size of our population (and franchise fees are based on population - a reason why a large area was chosen), the result is a large revenue source.  This is mostly a new revenue source and takes little away from the county.

7.      Will Greenhaven acquire the parks and is that cost included in the feasibility study? 

Yes. The estimated cost in the feasibility study to purchase the existing parks within Greenhaven boundaries is $225,000.

8.      How will the franchise fees affect our utility bills?  Will they cause them to rise?  Past history shows the utilities and cable companies often pass the cost on; however, it has amounted to less than 2% of the electric bill of city customers (e.g., if your bill is $100/month, your increase will be less than $2/month) and 5% for cable companies (e.g., if your bill is $100/month, your increase will be $5.00/ month).  The franchise fees for natural gas customers are spread over all Atlanta Gas Light customers for the cost of doing business.  Thus, any increase will be minimal.

9.      Will our taxes rise as a result of forming a new city

Based on the study results, we do not anticipate tax increases from the city of Greenhaven.