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Charleston County May 12

Sales Tax budget approved for 2006
Spending on roads to accelerate, CARTA's request for larger allocation rejected
Warwick Jones, standing in for Shawn Keller who is on military duty in Iraq

The Finance Committee yesterday considered the proposed Fiscal 2006 budget for the half-cent sales tax. Collection of the tax did not begin until the beginning of this month but it will not be until the fiscal year beginning July 1 that the county actually receives the tax. The County expects to generate $35.16 million in revenue from the tax in the fiscal year and has allocated $22.5 million or 65% of the total for Transportation. A breakdown of the allocation can be seen by pressing here

Transportation - roads and bridges- to get major share
A breakdown of the Transportation component of the budget can be seen by pressing here. The allocations are rather straightforward though Projects needs some elaboration. Provision has been made for hiring a full time employee to assist the Advisory Board and then $300,000 has been allocated to hire another 2 full time employees for managing the program, and for purchasing supplies. Payments for the Cooper River Bridge (CRB) and Debt Servicing of $3 million and $3.1 million respectively total $6.1 million. In its wisdom, the Finance Committee left $3.4 million on the table for Contingencies.

Projects accounts for near 60% of total spending on Transportation and road works will represent the major part of this. The issue of spending on roads was partially addressed in earlier meetings of the Finance Committee this month. There was issue as to how much of the County's traditional Public Works spending should be replaced by the sales tax proceeds.

Sales tax will be used to finance $1 million of road works in Public Works
The Finance Committee seemed to acquiesce to the County Administrator's suggestion that sales tax financing of Public Works roads be limited to $1 million and be used to pave 12 roads. Altogether, the County has 59 road projects under consideration with an estimated cost of $7.58 million. Of the total, 12 are approved and ready-to-go and the estimated cost of completion is $0.45 million. These roads are Abbapoola, Coakley, Dagillies Lane, Jack, Julius Robertson, Mackey Lane, Moffet, Village, Wine, Blidgen, Hamilton and Middle. The County also has another 15 projects that are approved but are awaiting right-of-way approval. The estimated cost of these latter projects is $2.67million and presumably Mr. Windham expects some of these will be included in Fiscal 2006 spending of $1 million.

The budget provides for another $2 million for spending on new roads but approved by the Charleston Transportation Committee (CTC). Many will be in the Cities of the County. There are also a number of existing roads in the County and Cities which need resurfacing. The County has budgeted $4 million and again priorities will be determined by the CTC.

Projects to be financed by $113 million bond issue to cost much more
A major part of spending under transportation will go to "Large Regional Impact Projects". These are essentially the large projects that were itemized in the Sales Tax referendum documents and were specifically to be financed from the proceeds of the $113 million bond issue.

In speaking of these projects, Mr. Windham observed that many were some years away from commencement. A lot of planning and preparation had to be undertaken. He specifically mentioned such items as design, the need to establish roles and agreements with other entities, to develop budgets, cash flow and financial and document procedures. As well, the County had to complete a Comprehensive Transportation Plan.

It was also of interest that he warned of the escalation of the cost of these projects. The cost estimates contained in the 2004 referendum papers had been made some years prior. Costs now would be much higher. How the higher costs would be financed was not addressed. It could be through further bond issues or from accumulated sales tax funds.

A warning to the Cities?
A comment by Council Chairman Stavrinakis intrigued us. He strongly emphasized the fact that it was up to the County Council, and only the County Council to authorize the spending of the sales tax proceeds. The County would seek opinions of the Cities and from the appropriate advisory bodies but at the end, it was the discretion of Council to determine where the funds were spent. Was this a warning to the Mayors to back off? Council Chairman Stavrinakis and Mr. Windham reported that they had spoken to some of the mayors earlier this week. The mayors had expressed concern that the County was using sales tax proceeds for financing road and other works in Public Works that typically were financed by other sources.

CARTA seeks $14 million but gets $6.5 million
CARTA was allocated $6.5 million for Fiscal 2006, about 18% of total sales tax receipts. It was seeking much more. It hoped to not only cover its capital and working costs but also to receive sufficient to repay loans and repurchase the Leeds Avenue facility. The latter was sold a few years ago to raise funds to allow it to operate when funding dried up.

Council warranted that there was some merit in the request by CARTA but noted that although no percentage limit has been set in the last referendum a limit of 18% of sales tax proceeds was set in the 2002 referendum and Council was going to stick to this upper limit. It noted that there had been hostility to including CARTA in the sales tax referendum and to boost funding even if for only one year to a level of near double that originally proposed would produce too large a howl.

Mr. Howard Chapman, the CEO of CARTA admitted that the existence of the debt on CARTA's operations was not life threatening but it would be nice not to have it. Besides he correctly opined, funds would be accumulating in Transportation while projects were being planned and designed. Why not use these funds to pay off CARTA's debt and who knows, CARTA may not require financing to the tune of 18% of the sales tax in future? There may be surplus funds for other uses in the Transportation budget. Council was not moved. Press here to see Transit Breakdown.

Greenbelts - Awaiting potential acquisitions
The Greenbelt allocation, in line with the sales tax referendum documentation, was 17% of the sales tax proceeds - estimated for Fiscal 2005 at $5.9 million. The major allocation was for Contingencies, which presumably is another way saying "funds waiting disbursement to projects". Debt service was estimated at $1.4 million, an estimate that could be way out. What it will be depends on acquisitions that are made and what needs to be financed. Like the other categories of spending, the budget provided for the hiring of one full time person to support the Advisory Board and for initial supplies. It also allows for $240,000 for a Comprehensive Greenbelt Plan. Press here to see Greenbelt breakdown.

County to apply for grant for Jail Diversionary Program
There has been some of talk over recent weeks during the budget sessions of implementing better treatment facilities at the County Jail. It was discussed not only as a means of reducing the inmate population (and thereby allowing the construction of a smaller and less costly new jail) but also as a way of reducing burdens on law enforcement personnel. And by no mean the least reason, to rehabilitate the lives of desperate people.

There were differences as to how effective some programs could be but last night, the Finance Committee decided to seek a grant from the Substance Abuse and Mental Health Services Administration (SAMHSA) of $400,000. To obtain this grant, a matching grant from the Council of $125,000 would be necessary but it could be in kind.

The program that would be financed would "divert from incarceration individuals who have been arrested for a non violent offence. After assessment, the individual will either have the sentence transferred to a probate court for participation in Mental Health Court or the Magistrates Court will put a condition on the bond that requires treatment participation". The County is proposing a collaborative partnership with a number of entities including MUSC and the County's Department of Alcohol and Other Drug Abuse Services (DAODAS). The project will require 5 full time persons.

A spokesman from DAODAS spoke of the 74% success rate on rehabilitating participants. Presently, the Jail program treats 100 persons a year and has a waiting list of 400. With the new funds, it could treat nearly every body on the wait list.

Mr. Windham, apologizing that as an Administrator he had to make such a cold statement but he warned that this was a grant that was up for consideration. It would be begin on July 1 2005 and end on June 30, 2008. If the County wanted to extend the service, it may need to meet all of the costs.

The Finance Committee said they'd take that chance.

Broad Street landmark to stay
If a restaurant can keep its doors open for over 29 years, it must be good. And this view can only be reinforced when 20 or 30 of its patrons turn out to support its efforts to stay open.

At issue was the sale by the County of the building at 98 Broad Street and which housed the Gaulart and Maliclet Cafe Restaurant. The County bought the property many years ago as it accumulated property preparatory to building the New Judicial Center. Well, the property was not needed and the County is selling. G&M has a lease on the ground floor and this expires shortly. It has the "upset right" to buy the property. ln other words, it can match or exceed any bid that is made by another party and secure the property.

Another party offered $650,000 for the property and although this was below the $858,000 valuation made by a County assessor. It was well above the valuation of $525,000 made by the assessor of G&M.

It was clear that G&M has the goodwill of the Councilors. County Chairman Stavrinakis noted how the restaurant had been an excellent tenant and had contributed to the community. Council member Darby proposed that the property be sold to G&M for $650,010. And this was approved by the members of the Planning Committee and to the loud applause of the audience.

We wish G&M luck but considering the turnout of patrons, it won't need any. We note that G&M has been paying rent of $23,908 a year. This burden it will no longer bear. But it will have that of property taxes we guess about $5000 a year, insurance of say $2000 and the implied or opportunity cost of ownership of the property - say 6% of the purchase price or $39,000 a year. This represents a doubling of overhead. And we are ignoring repairs and maintenance! Of course, the new owners will be able to rent the top floor but rents on the second floor are typically low on Broad Street. Patrons may be wise to expect an increase in prices in future.

Just an observation!

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