The Price of Liberty is Eternal Vigilance
Transportation Advisory Board February 15
Considers draft of Comprehensive Transportation Plan
Funding could be stretchedWarwick Jones
A draft of the Comprehensive Transportation Plan was laid before the Board yesterday. This is the plan called for in the half-cent sales tax referendum and is to set the course for spending the sales tax proceeds dedicated to Transportation. Prepared by LPA Group, the consultant to the County, the draft is to be discussed by the Board in later meetings. Public meetings are also planned and the final plan will be submitted later this year to County Council. The 110-page plan may be viewed by pressing here.
In the presentation to the TAB, Mr. Robert Probst of LPA Group warned that the draft report may not be as expected. However, we saw little that was surprising. Almost certainly there will be changes recommended by the Board, but we don't expect them to be major.
There are two observations that we will make. First, a significant amount of the available funds will be absorbed by projects that have been under consideration by the County for some time, in particular those specifically mentioned in the bonding section of the half-cent sales tax ordinance. Secondly, the $1.3 billion that is to be collected from the sales tax over its maximum 25-year life may seem a large amount. But it will go only part of the way in covering the cost of projects that might be considered by the County. Some of the funds are already committed. The balance may be thinly stretched. The draft Plan has attempted to prioritize projects.
CARTA allocated 18% of available funds
In his presentation, Mr. Probst noted that after subtracting $221 million earmarked for Greenbelts, $1.08 billion was left for transportation projects. But another deduction had to be made for CARTA. The sales tax ordinance did not specifically state the amount or percentage of the funds raised to be dedicated to the Transit authority. Mr. Probst suggested that 18% of the funds raised be set aside. This was a percentage in line with other counties or states, and a percentage similar to that defined in the previous referenda in the County. Board member Paterson Smith, who is also on the CARTA Board, took exception to this percentage. He thought that at times, CARTA may be deserving of a larger allocation and did not think it should be so confined. The Board decided to move on with the presentation though undoubtedly Board member Patterson Smith will argue for an increase at a more appropriate time.
Net amount available for road projects is $874 million
So netting out Greenbelts and the CARTA allocation, only $874 million was available for transportation projects over the life of the sales tax. This was the total that would be collected over 25 years and the "present value" of this accumulated flow was much less. Mr. Probst did not make an estimate of "present value", and indeed, any estimate would be predicated on a number of assumptions. But a figure roughly half of $874 million would not be too far off, in our view.
Bond issues recommended to gain access to sizable fund amounts
The County has a choice. It could spend the money as it flowed in from the tax. This meant that yearly spending would be restrained, and particularly low in early years. It would also mean that the County was subject to the risk of escalating costs of construction. Alternatively, the County could borrow as much as possible immediately and pay the interest and amortization costs from the sales tax proceeds each year. This raises the question as to whether the County has the scope to do this under the 8% of assessable property values limitation imposed by State Law, or whether it would choose to hold a referendum to approve another bond issue. This question was not addressed yesterday. But it may have to be because the Consultant recommended that the county raise about $153 million from new bond issues, with about $67 million relatively soon, and the balance sometime in the more distant future. The County is now in the process of issuing $77 million in bonds for Transportation projects referred to in the sales tax referendum. The new bonds would take the total transportation allocation to $230 million.
Only about $314 million remains after deduction of commitments and obligations
The consultant estimated that after deducting committed funds and amounts the County would require on an on-going basis, about $314 million would be left from the sales tax for new road projects. A summary of the deductions to arrive at the $314 million figure is shown below. Some of these figures are estimated by the consultant, in particular those relating to drainage and road paving. In regards to the latter, the consultant points out that surfacing has been neglected for many years and the County needs to catch up on maintenance. The figure projected includes amounts for both maintenance and catch up.
Revenues over 25 years $1,303 million
Greenspace $221 million
CARTA 234 million
Cooper River Bridge $72 million
CTC Road Paving $150 million
CTC Drainage improvements $25 million
Council /Public works $25 million
Bike and pathways $12 million
Intersection improvements $48 million
Debt Service on $77m bonds $137 million
Program Admin. $65 million
Net available for road projects $314 million
The draft Plan gives more detail about spending mentioned above and viewers should download the plan if they require more detail.
Financing new debt will absorb the $314 million balance
If the TAB and Council go along with the Consultant's proposals, all of the $314 million will be needed most likely for servicing the proposed $153 million of new debt. How the funds raised by these new bond issues would be spent can be seem by pressing here..
First tranche to help finance Johnnie Dodds Hwy and projects on James Is.
The schedule shows the projects, their cost and how they would be financed. The first set of projects (with green background) is mentioned in the sales tax referendum of 2004. Funds are already allocated to them from the bond issue now under way. But some of these projects need further funding and these funds would be drawn from the first tranche of the new bond issue, to raise $67 million. The Johnnie Dodds Highway in Mt Pleasant would draw $45 million from the new funding and 3 projects on James Island $22 million.
Application to Infrastructure Bank assumed to be successful
The projects with the orange background - completion of the Mark Clark Expressway, the Port access road and the interchange of Hungry Neck and I 526 - are assumed to make no draw on the sales tax funds with most of the financing coming from the State Infrastructure Bank.
Second tranche will finance a wider range of projects
The projects against the yellow background will be financed with the second tranche of the proposed bond issue that is projected to raise $86 million. The funds from the second tranche are projected to finance only part of the construction and the consultant assumes that funding will be available from other sources as well. Projects included in the second tranche financing are the Glen McConnell- I 526 loop, Bees Ferry Road widening, Folly/Camp Road intersection, future drive loop to Ladson Road and Northside Drive extension, Maybank Highway widening, and roadwork infrastructure improvements at the Medical University.
Community meetings will be held at three locations:
Tuesday, Feb. 28 - Location: James Island Middle School cafeteria (1464 Camp Road) 6:30 p.m.
Wednesday, March 1 - Location: Wando High School Cafeteria (1000 Warrior Way) 6:30 p.m.
Thursday, March 2 - Location: City of North Charleston Council Chambers (4900 LaCross Road) 6:30 p.m.