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The city of Decatur is in pretty good fiscal condition and as a result has decided to spread the wealth to residents – to the tune of $360,000.

With an unexpectedly high collection rate on property taxes, fines and fees, the Decatur City Commission voted earlier this month to give a one-time $70 tax-credit to all residential property owners.

The credit will appear on the second installment of the city tax bill sent to property owners in late October.

Particularly, the credit comes after the city exceeded its expected property tax collections rate of 93 percent, and received 95 percent of property taxes by June 30 of this year.

The total cost of providing this tax credit to residential property owners is approximately $360,000.  The $70 credit is equal to increasing the general fund homestead exemption by $7,000.

City officials say the 2 percent collections rate difference along with a rise in fee and fine collections, and city employees having good expenditure controls, created a perfect storm for the tax credit to get approval from the city commissioners.

“The property tax collections were just far better than we expected,” said Linda Harris, assistant director of community and economic development for Decatur.

“Although we didn’t have a lot of new construction, there were more of things like new renovation fees and business licenses. As for expenditures, employees didn’t do a lot of overtime and although we budgeted for a full staff, some positions weren’t filled,” said Harris.

She also noted that city employees looked for grants to subsidize expenses and limited spending to necessities.

“For example, if there is an older fax machine that’s working perfectly fine, say, ‘Hey, if it ain’t broke, don’t try to fix it,’” she added.

With this buckle-down approach, the final 2009-10 budget produced a contribution of approximately $1 million to the city’s fund balance.

At the Oct. 4, city commission meeting, City Manager Peggy Merriss recommended the tax credit, noting that “as a result of better than estimated revenues and strong expenditure controls by city employees, we have completed the fiscal year 2009-10 in a significantly improved financial position.”

Decatur’s financial policies call for maintaining a fund balance equal to three to four months of expenditures, meaning that the fund balance, or what can be considered a portion of the city’s savings, should be between 25 percent and 34 percent of operating costs.

With the addition from fiscal year 2009-10, the fund balance would significantly exceed the planned policy target.

But in Mayor Bill Floyd’s mind the surplus is no coincidence.

“Decatur has a history of conservative budgeting,” said Floyd.

“Our employees do an excellent job of managing resources, and as a result, we are able to maintain our commitment to providing high-quality services for residents, businesses and visitors, without laying off or furloughing employees, cutting programs or implementing a tax millage rate increase.”

While $70 isn’t an all-out windfall, Floyd said the tax credit is a show of the city’s dedication to use taxpayers’ resources wisely–though, he added that one good turn deserves another.

“In turn, we encourage taxpayers to show support for our local businesses by spending this money in a locally owned business so that we all benefit,” Floyd said.