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City Council November 28

No millage increase for 2007
Drainage, affordable housing, and lack of sporting facilities
Marc Knapp

Council members got their first glimpse of the 20007 budget last night. Glimpse is the right word. Members had before them only a Power Point print-out. The full document was given out only after the Mayor had completed his speech. And despite the fact that the Mayor asked that questions be delayed until the next Council meeting, questions were asked. So much for the half hour allocated for the budget's introduction

As expected, the full budget document is a mass of figures and will take time to scrutinize. Unfortunately the summary page with projected figures for Fiscal 2007 does not have comparable figures for previous years. These have to be worked out from the data. There were few surprises, at least from what we can see. We do wonder though how property tax collection in the City can be lower in 2007 considering all the new construction undertaken.

Some highlights

* Revenues of the General Fund are projected at $113.6 million. We understand that this is about a 4.1% increase from the previous year

* Property taxes are projected at $44.1 million, up slightly from the $43.32 million for the previous year. The millage rate for 2007 will stay steady at 53.3. Although the total tax is projected to rise, the increase is due to the contribution from Daniel Island. The contribution from the CIty itself is projected at $37.3 million compared with $37.9 for 2006

* Property taxes will contribute 33.5% of City revenues in 2007, down from 34.3% in 2006 and 55.7 % in 1990. (Not said was “we’re socking, business, user and franchise fees�)

* Nine police officers will be added to the force and will take the complement to 382. The ratio of about 3 officers per 1000 head of population compares with 2 per 1000 in other cities in the State.

* Federally mandated changes in accounting of Employment Benefits, relating essentially to health care in retirement, will add $1.8 million to the City's budget expense in 2007 and 2008. The funds will go into an account managed by Wells Fargo. A charge will be necessary in subsequent years but the amount will depend on the investment performance of funds under management and the number of retirees. Our guess is that the charge will be higher than $1.8 million. All retired city employees will be required to enroll in Medicare at 65 years and thereafter will not be covered by City health-care

* A COLA pay increase of 4.2% is anticipated in the first full pay period of 2007. The annual cost of the increase is $2.15 million.

* Salary adjustments for some groups considered to be underpaid - garbage collectors, custodians, fire captains etc - will add $350,000 to costs.

* The Town of James Island will cost the City about $750,000 in lost Local Option Sales tax revenues.

Favorable spin on property taxes
I suppose all politicians will put a favorable spin on budgets and Mayor Riley is no exception. To be fair, we have nothing critical to say about the budget. But we do cringe every year when there is the self congratulation about the slow rise in the millage rate, particularly when compared with some other cities. Never is there mention that property tax revenues are a function of millage rates and the market value of properties. Property values have risen strongly in Charleston, and so have taxes notwithstanding the downward trend in millage rates!

Drainage improvements planned
Citizens of the Westside and surrounds will be pleased that a solution to the area's drainage problems is under way. But it will be some years before residents see the benefits. Council approved a $5.5 million contract with Davis & Floyd to continue with engineering and design of the Spring/Fishburne drainage project. This project will drain an area representing about 20% of the Peninsula. The total cost was likely to be over $40 million according to City Staff. The design process could take another 2 years and obviously construction can not begin until thus phase is completed.

Council also approved $229,000 for payment to Davis & Floyd for additional work that will carry the Market Street drainage project through the remaining design process and into permitting and the award of a contract. We understand construction is unlikely to begin for at least another year.

The Post & Courier carried a detailed account of the projects in today's edition

Buys back some "affordable housing"
The decision of the City to buy two houses from Charleston Affordable Housing (CAH) seemed strange. CAH is a non-profit whose name implies its purpose. It has worked close with the City in the past but we suspect there has been some falling out in recent years. We know that CAH thought the obligations imposed on potential buyers of "affordable housing" in the City's Home Initiative (HI) was too onerous.

The City agreed to buy 2 houses from CAH - at 109 Harris Street and 26 Kennedy Street. The consideration was $1 each. But for 109 Harris Street, the City assumed a mortgage of $101,700 and paid CAH a development fee of $13,749 and for 26 Kennedy Street, assumed a mortgage of $131.946 and paid a developer's fee of $13,849.

There is no doubt that the market value of both houses was considerably above the combination of the mortgage and developer's fee. But of course as they were developed under the HI, the non-profit had a commitment to the City. We don't know what this was specifically but it stopped CAH from selling the houses on the open market. At the same time, CAH is in financial difficulty. There is a threat of court action which could tie up its assets indefinitely. The City moved to preempt such action in regard to the houses.

The Mayor reported last night that a contract had been secured already on one of the houses and a contract was expected shortly on the other house.

Citizens Participation
Citizen Participation saw Mr. Ed Jones back before Council as he promised. At the previous Council meeting, he threatened his continued presence until he got an answer as to what Council would do in relation to providing for the youth of the Eastside. Mr. Jones decried the lack of green space and sports facilities, particularly for the pre teen age group. Council asked Mr. Jones to submit his concerns and requests in writing. We hope Mr. Jones will continue with his threat until he gets a satisfactory answer.

Mr. Arthur Lawrence, head of the Westside Neighborhood Council also took up Mr. Jones's cudgel and also asked for some meaningful investment in sporting facilities for the Westside. He also added that children from the Westside were spending a lot of time traveling out of their home area and this was cutting into the time that ought to be allocated to study.

Yours truly noted some discrepancies in the budget figures and the seemingly low projection for property taxes in 2007. My colleague Warwick Jones also asked why there was no discussion on the decision to hire a consultant to advise the City on its Preservation Ordinance. After all, tourism was the City s biggest industry and the Historic District was the most important draw of tourists. The need for a consultant was certainly worthy of discussion. And why was Historic Charleston Foundation, a non-profit paying half the cost. A non-profit paying half the cost for a consultant to advise on a City Ordinance? We didn't get any answers.

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