Feasibility Study

Executive Summary

The Center for State and Local Finance (CSLF), Andrew Young School of Policy Studies, Georgia State University was contacted by State Representative Sharon Cooper to develop a fiscal feasibility study for a newly incorporated city of East Cobb. This study provides a detailed analysis of the expected revenues and expenditures for the proposed city using generally accepted methodologies that the CSLF has used for similar studies. The main purpose of the analysis is to estimate the ability of the proposed city of East Cobb to meet its expenditures with available revenue sources. Based on this analysis, the proposed city of East Cobb could expect annual revenues of approximately $49.82 million and annual expenditures of approximately $45.62 million (see Table Ex-1) yielding a surplus of approximately $4.21 million. Based on these estimates and given the assumptions that are detailed in this report, we find that the proposed city of East Cobb is financially feasible.

The revenues from the various sources depends on the tax rate or fee structure. For some of the revenue sources, the proposed city of East Cobb will have no say as to what the rates are. For the other taxes and fees, it is assumed that the rates will be the same as those that Cobb County is currently imposing. To the extent that the proposed city of East Cobb might adopt different tax rates or fee structures, the revenues will differ from the estimated revenue. To produce the estimates of expenditures for the proposed city of East Cobb, we relied on the Committee for Cityhood in East Cobb, Inc. to list the services that the proposed city of East Cobb will provide. These are public safety, fire management, and community development. Note that community development is a broad category that for this study includes zoning and code enforcement.

We relied heavily on the budgets of several other cities in Georgia with similar populations, including Alpharetta, Dunwoody, Johns Creek, Roswell and Smyrna. In both the revenue and expenditure analysis, we have taken a conservative approach to the estimation, as detailed in the report. The analysis provides the best estimate given available data and information from Committee for Cityhood in East Cobb, Inc. and Cobb County regarding the proposed city ’s expenditures and assumes no “shocks,” such as unanticipated capital expenses or a major economic downturn. This report updates a previous report dated December 7, 2018 and revises our estimate for the Title Ad Valorem Tax. No other material changes were made.