To: DeKalb County Operations Task Force

July 20, 2014

These comments relate to the presentations at the Task Force subcommittee meeting on July 16, and
the subsequent Q and A discussion; and to the Task Force Committee meeting on July 2. I am neither a
lawyer, nor am I in any way involved in the specifics of County or City government. However, I heard
some comments and discussion in those meetings which appeared to be inaccurate or misleading, and I
wanted to mention them. My point is that it might be worth verifying the accuracy and completeness of
some of the comments before disseminating them further.

I should also point out that no transcript has been made available, and its possible that I may have
misheard or misinterpreted the intent or context of individual comments.

1. Incorporation of cities occurs through local legislation by the County delegation.
That of course may be a theoretical possibility; but none of the incorporations in Fulton County or
those in DeKalb County in the last 10 years has been through a local bill. The County delegations of
Fulton and DeKalb have generally opposed city proposals. Im not sure of the purpose of the
comments, but they seem to be incomplete.

2. The large unincorporated area in DeKalb acts like a defacto city, or appears to be a city to the
residents.
Of course it does not in any way act like a city, and I dont think there is any general confusion
among residents. There are a lot of people who think that they are in Decatur or Atlanta, or think
that Tucker is a city, but I dont know anyone who thinks that DeKalb is a city. Nor does the County
government act like any city.

3. Parks and Recreation are examples of services benefiting from economies of scale.
That is at best a theoretical opinion. And all cities that have been created in the last 10 years have
specified poor park management as one reason for local control. There may be services which could
benefit from economies of scale, but only if they are managed well. Poorly managed services are
never improved by larger scale. They are actually frequently improved by reducing scale.

4. Annexations are the result of people asking to be in the city.
There have been some annexations which have increased the population of cities. But many of the
proposed annexations by DeKalb County cities are somewhat obviously for the purpose of increasing
the tax base of the city. While there are notable exceptions, it appears as though many of the
existing annexation proposals have been initiated by the cities; not by the residents. And in fact
certain cities have specifically declined to annex people, but want to annex additional commercial
property.

5. Cities in DeKalb County are proposing annexations to neaten their borders.
Looking at the maps of proposed annexations by Decatur, Stone Mountain, Avondale Estates and
Clarkston it would be a stretch to say that the purpose or intention is to neaten or rationalize
border lines.

6. New cities being created are homogeneous demographically (as opposed to the county).
The discussion assumed the accuracy of that hypothesis. But there actually is little demographic
homogeneity in recent cities; and there is certainly nothing demographically homogeneous about
any of the city proposals that went before the last legislature.

7. When a new city is formed, it takes over the responsibility for providing certain services mostly
three.
Although that statement is made repeatedly, Im not sure that there is such a requirement or that it
is relevant in DeKalb County. The Georgia Constitution has a provision that if an existing city does
not provide at least three municipal services, they may petition for dissolution of the city. But most
of the recently proposed cities have taken on many services, precisely because thats the primary
reason for creating a city.

8. Would anything change if the entire unincorporated area was incorporated as a single city?
The discussion indicated that it would be no big deal. There are actually significant operational
factors which would result from a rather weirdly shaped city, wrapping around existing cities. And
no one pointed out that that process would circumvent the obvious wishes of the population, some
of whom want to be in localized city governments. Any discussion about that option should not
have ignored the people.

9. What will happen as incorporations continue, when the unincorporated area has no property tax
base?
The discussion started around the fact that 80% of the population of the County is in unincorporated
areas, but only 60% of the tax base is in those areas. That statistic was stated as a problem for the
unincorporated area, and was carried to an incredible conclusion. This completely ignored the fact
that 100% of the population and business is in the County and pays taxes to the county. And the
overwhelming majority of all non-school property taxes go to the county government, whether the
property is inside or outside a city. The same would be true if the entire county was municipalized in
a series of cities. Property taxes go to cities only in proportion to the services they perform.

10. Franchise fees are added to utility bills in cities, but county residents dont pay them.
The example used in the discussion was GA Power, but there are franchise fees with different rules
for power, gas, land line telephones and cable services. The discussion on GA Power franchise fees
did not match what GA Power itself says it does with the franchise fees, and was not accurate about
who pays those fees and who does not. And the facts of the distribution and collection of power
franchise fees are not the same as for other utilities.

11. The creation of the City of Dunwoody had a financial impact of $16 million on the County; and the
City of Brookhaven an impact of $19 million.
Im not aware of the composition of those numbers, but they apparently are intended to relate to
revenue reductions in the County. But the total revenue of Brookhaven for 2014 is less than $19
million; and that of Dunwoody is only about $25 million. (And those revenues include many items
which were not transferred from the County.) Property taxes are shifted from the County to a city
only in proportion to the cost of the services performed by the city, as identified by the County. And
tax shifts from the County to a city are offset by expense reductions to the County. So the financial
impact to the County must mathematically be a relatively small number.

12. Valuation increases are much higher in the cities than in the unincorporated areas.
While that may be true, the implication of unfairness is not. The fact that businesses and incoming
residents much prefer the environment in cities does not indicate something wrong; nor is it
negative to the County as a whole. It indicates that the cities are doing something right, that the
County is apparently not doing well. And the implication that this is bad for the unincorporated
area ignores the fact that approximately 95% of the increase in taxes goes to the County and County
schools, and less than 5% goes to the City. The unincorporated area of the County gains greatly by
what Dunwoody does, and has essentially no cost to get the additional money. The unincorporated
area of DeKalb should be cheering for the found money.

This is an important issue which should be addressed with serious, balanced and unbiased factual
information. Im not suggesting bad intent; Im just pointing out statements which appeared to me to be
questionable. I am perfectly willing to accept that there may be other information of which I am not
aware, and that I may be incorrect.

I also should again point out that I am neither an attorney nor have experience in government
employment. I suspect that someone with more specific experience might find different issues with the
comments in that presentation.


Herman Lorenz
City of Briarcliff Initiative