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County Council, March 22

Costs go higher and higher
Can the County avoid a millage increase?
Warwick Jones

As Chairman Scott said at the start of the workshop last week, the presentations were not part of the budget discussion. They were essentially a background. But even as such, Council members could hardly have been encouraged. It seems highly likely that in response to rising costs, County property taxes will need to be raised albeit by a modest amount. At yesterday's workshop, the Chairman again declared his opposition to any increase in millage rates. His voice may not be the only one raised in opposition. But the opponents of an increase will be hard pressed to come up with an alternative for financing necessary capital improvements.

Staff spent more than 2 hours yesterday discussing the Capital Improvement Program (CIP), Waste Disposal and the Roadwise program - road and drainage projects financed by the half cent sales tax. As we implied, there was no good news!

Projects on Capital Improvement Program cut
Staff told Council that the costs of the projects in the CIP had risen dramatically. At the last approved CIP estimate, presumably about 12 months ago, the cost was estimated at $209 million with the Detention Facility accounting for about $78 million. The new estimate takes the total figure to $295.73 million and the Detention Facility to $102.5 million. Although spending on these projects would be spread over the next 3 to 5 years largely, the cost is beyond the County’s ability to bear immediately. In consequence, staff cut the list to the most important projects. Their cost totaled $172 million of which $155 million can be financed by borrowings, staff estimated.

Staff suggested that there be two tranches of borrowing, each of $75 million, in August 2007 and August 2009. They also noted that the issuance will place the County close to its limit of debt issuance (State law limits debt issuance to no more than 8% of the assessable value of all ratable property in the County) and that the County millage rate would need to increase by 1.5. For the list of all projects on the CIP and the staff recommendations Download file

Judicial Center repairs to cost $8.3 million
Although not so important in the overall CIP, viewers will be interested to see that repairs to the Judicial Center are projected to cost $8.3 million. The figure is high. We expect the County plans to recover some, or all, of this amount from the contractor which it is suing.

Need to prepare for future waste disposal
Council has been aware of the problem of waste disposal for some time now. But it is running out of room to avoid a decision, at least if it sticks to its policy to have a 25 year plan for disposal. The immediate issue is the continued use of the existing incinerator. If this can be negotiated with the owner, then the life of the Bees Ferry Road land fill site can be extended to 27 years. But it will be much less if some waste cannot be incinerated.

The County owns land adjacent to Highway 17 S which it plans to convert to a land-fill site but so far, no permits has been sought The land totals 750 acres of which about 250 to 300 acres can be used for fill. The rest is wet land. Assuming permits are granted, a life of 37 years is projected for the site.

More than bringing on new site
Of course it is not so simple as we have described. Adjustments have to be made to composting and processing some fill, relocation of the construction-and-demolition waste site, the building of transfer stations built and so on. Council was also told that the permitting process with DHEC can be long, particularly as public input needs to be sought. There also will be inevitable law suits by folk who will protest the use of the site for land fill.

$63 million cost over 7 years
In summary, staff estimated that the County needs to spend $48 million over the next 5 years and another $15 million in the 7th year to secure waste disposal facilities for the long term. Staff suggested that the user fee be raised to $99 from $89 to help fund the spending and necessary borrowings, and noted that another increase in the fee would be necessary in a few years.

Necessity to draw on future years to fund all 2007 Annual Allocation Projects
Judging from anecdotal reports by staff and the Roadwise consultant, Council knew that road and drainage construction costs were rising. But Council was probably surprised to learn that they had risen so much. Staff spoke yesterday about the action they recommended in relation to the Annual Allocation Program (AAP) within the Comprehensive Transportation Plan. The AAP accounted for $260 million of the $847 million spending on transportation and drainage projects to be financed by the half cent sales tax. Spending under AAP was to be spread over 25 years on local paving and resurfacing projects, drainage, intersections, pedestrian and bikeways, and Council projects.

Drainage is the shocker
Local paving projects were to receive $2 million a year but those projects approved for 2007 are costing much more than estimated and will absorb much of the 2008 and probably some of 2009 allocations. The same was true for Intersection Improvements and Pedestrian/Bikeways which were allocated $2 million and $0.5 million a year respectively. But the big surprise was Drainage. It was originally allocated $1 million a year. But the Isaac German project which is part of the program will cost an estimated $5.2 million and absorb all funding to 2011. And residents in the area are calling for extra piping which could add another $6 million to the bill.

Although the financing of the projects is a problem, it largely is beyond the scope of Council to solve. The sales tax referendum limited the sales tax to 25 years and a total amount of $1.3 billion for transportation and greenbelts. And that’s that! Staff recommended amongst other things that AAP funds be used to finish projects already started and that future projects should be “accomplish-able” and small.

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