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County Council, June 10

Agrees to forego TIF revenues to help finance the new Gaillard
A referendum to form a Commission to study consolidation in County?

Warwick Jones

At issue was the request from the City of Charleston for an extension of the King Street Gateway TIF (Tax Increment Financing) district for 10 years to 2023. The City needed the money from the TIF to help fund the proposed new Gaillard Auditorium. Agreeing to the request effectively means the County gives up revenues of about $1.5 million a year for 8 years beginning 2015. The recommendation of staff was no! The Finance Committee, and later Council, eventually voted yes, with conditions that were hardly onerous.

The agreement on Council did not come easily. This partly reflected unhappiness about the request, the little time that Council had to consider it, but foremost, the legal complications about a decision. Council member Rawl voted against the request with the comment that he did not know what he was voting for! Council members Schweers and Thurmond were also opposed while Couincil members Darby and Inabinett were absent.

Council member Rawl was not alone in finding much that was incomprehensible or confusing. As well as this writer, there were Council members and attendees. According to legal counsel, the Finance Committee had to vote on the issue “up or down”. If it did not act, the City could assume agreement. A request for a deferral of the issue would be considered acquiescence by the County.

We won’t attempt to describe in any detail the course of the discussion on the Finance Committee. Council member Condon proposed some amendments and there were counter proposals. Some members questioned how in these difficult times the County could give up so much revenue. County Administrator O’Neal noted that the Boeing’s Fees in lieu of Taxes (Filot) would kick in $1 million a year beginning 2014 and offset the loss to a large extent. And the request from Mayor Riley had come at the end of April. Why hadn’t the request come to the Finance Committee before yesterday? Council member McKeown, who wasn’t sure he could support the request, asked whether the new Auditorium would stimulate more activities and add to the local economy.

Mr. Charlton De Saussure, attorney for the City of Charleston, answered with some exaggeration we suspect, that the new Gaillard would have “the greatest performance venue in the whole world”. Why the urgency, he was asked by Council member Thurmond who was looking for 30 days to better consider the request. A delay of 30 days would add $400,000 to the cost, Mr. De Saussure said.

Amid confusion, Council member Summey called for an executive session. After the session, the Finance Committee voted on the request with the following conditions: That if the project did not proceed the TIF funds would be returned to the County, that the Council’s agreement would be sought should the City plan construction beyond that mentioned in the request, and that a target is set of 20% for DBE participation.

For the record, the City plans to spend about $140 million to upgrade the Gaillard Auditorium. There will be a new Concert and other halls. The City also plans to move most of its staff to the site and is planning new offices. A donation of $20 million has already been made and the City expects others. It also plans a bond issue and is also looking to assistance from the County and other involved entities by extending the King Street Gateway TIF district.

The King Street Gateway TIF district was created in 1993 with a life of 20 years. As with all TIF districts, the tax revenues over the base level (in this case 1993) are used to finance infrastructure within the District. The theory is that the large infrastructure development will lead to private sector construction and more taxable property. Typically, a bond is issued to raise most of the money for infrastructure development. The incremental tax revenue from the TIF is then used to pay interest and to provide amortization.

A referendum to form a Commission to study consolidation in the County?
Council member Rawl’s request for consideration of a referendum relating to the merging of the governments within the County certainly got our attention when the meeting agenda was posted on the County web site.

A liberal plot to take over the County? It really wasn’t that though some Council members spoke very strongly in opposition to anything like it. The Council member was asking the County to consider asking voters whether a Commission be formed to study merging respective governments. If voters agreed to a Commission, the Commission would study the issue and put its recommendations forward in another referendum.

Council members generally agreed that there may be areas where efficiencies could be gained by merging of activities. Some members noted the successful consolidation of dispatch services as a good example. The full absorption of the cities and municipalities was generally dismissed as a bad idea and unlikely to ever occur. And as some Council members noted, some Mayors would adamantly oppose giving up some or any of their powers.

Council member Rawl noted his proposal was the “methodology to get them (the municipalities) to talk to each other”. Somebody remembered the MAP Commission that studied the services of the County and municipalities. It made a number of recommendations to improve efficiencies.(See entry August 18, 2005) How many of the recommendation were adopted we don’t know. We thought many were worthwhile but implementation of some foundered on the reluctance of the Cities to endorse them.

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