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City Council, August 16

Financing plan for Septima Clark project looks risky
Assault on new Code article by cruise ship critics repelled
Marc Knapp

Desperate times, desperate acts. OK, it may be exaggeration to call the City’s plan to complete the Septima Clark project as desperate. But the plan is not without risks. Arguably, the road and drainage project is the most important and urgent of City projects. Its completion is necessary to stop the flooding during heavy rains and high tides in a large section of the City. The cost is an estimated $154 million, an amount I wouild dispute as highly inflated. Most of the funding is not in place.

Last night, the City Council agreed to a plan that would allow completion of the project. Amongst other things, the City made a “bet” that it would have access to funds from the State Infrastructure Bank (SIB) amounting to $88 million. Considering the present budget problems in Washington and the SIB's high dependence on the USDOT for funding, I have grave concerns. The $88 million would be drawn down between 2016 and 2019. On the assumption that these funds are available, the City plans to raise a total of $38 million in Bond Anticipation Notes (BANS) in 2014 and 2015. These financial instruments are short term and by State law have a currency of one year or less. The City plans to use the funds it expects to get from the SIB to repay the notes in 2016 and 2017.

The first question is what happens if the SIB funding is not forthcoming? There has been an expression of intent but no commitment. The second question relates to interest rates. The City assumes that rates will remain low for the next 3 years or so and projects a 2% annual rate for 2014 and 2015. This estimate may well prove correct but historically the assumed rate is very low.

The answers to both the above questions are uncertain and will depend on the economy, state and federal finances, and other things. But one of the possible answers will be a heavier burden on the City’s funds and an increase in tax rates. Mayor Riley certainly is aware of the risks that the City is taking and last night expressed confidence that the funding from the SIB would be available.

Mayor Riley reminded Council last night that only $20 million of the total $154 million estimated funding cost of the project had been committed. Of the commitment, $10 million was a Federal TIGER grant and the balance from the City. A total of $134 million had to be raised for completion.

As part of the overall funding plan, Council last night also approved the extension of the SCE&G franchise fee increase that was introduced in 2009. The fee was originally 3% and raised to 5%. It was to drop back to 3% this year but Council last night agreed to extend it to 2020. The extra funds would go to the General Fund and part ($5.4 million) would be used to pay the interest on the BANS ($1.4 million) and the balance applied to the cost of the project

Council also agreed to apply to SC DOT for a $12.5 million grant under a 2012 Federal Match program which the State administers. The Mayor said that the City’s $12.5 million match would come from the King Street Gateway TIF funds. The term of the latter was extended last year with the approval of the County and the County School Board to enable the part financing of the Gaillard project.

Viewers can see the projection made by the City in relation to spending on the project and funding by pressing Download file

I spoke during the Citizen's Participation on the complete lack of management oversight of the City's stormwater crews. Last week I followed a storm water Vactor truck for over an hour and a half while its occupants had a good time touring the City, the Battery and the Market area. No worker ever got out and indeed the truck never stopped. I took a video and pictures of this obvious breach of trust by City workers. I also took pictures of conspicuously clogged drains that were ignored. This was not the first time I have witnessed such disgraceful behaviour but it was the first time that I was able to document it.. For viewers unfamiliar with Vactor trucks, they are those with a large tank on the back and a "snorkel" on the front. They are designed to vacuum up dirt and debris from catch basins and pipes. They cost about $250,000 each and get about 5 miles to the gallon. I also stated that in my opinion, a lot of cities have flood problems because of poor maintenance. Is any body in the City administration listening?

Mayor has his way with new Article relating to cruise ship process

The only bill up for first reading last night was a new Article in the City Code establishing a process whereby the Mayor and Council “will engage the community one year in advance of any plans to materially change the operations of the new cruise terminal to be constructed at the north end of Union Pier”. In the resolution adopted last year by Council, there was only a commitment by the SPA to seek City approval for any changes in ship visits and sizes.

If the Mayor thought the new article would placate those seeking regulation over cruise ships, he was wrong. Speakers from the preservation groups, two neighborhood associations, and others who rose to speak against it were mildly to strongly critical. All opined that stronger regulations were necessary. But there was a lot of support from others in attendance, not only for the new article, but for the city’s policy generally.

Ms “Kitty” Robinson director of the Historic Charleston Foundation (HCF) told Council that the Foundation had completed a study and believed that some regulation over cruise ships was possible. The HCF had made some recommendations and asked Council to consider them.

Mayor Riley gave a long and spirited defense of the City’s actions and was highly critical of comments and actions of those behind the law suit against Carnival. As for the law suit, it was “outrageous”. He wondered how a judge “could keep a straight face” when it is being considered. He spoke of the “tyranny” of the Coastal Conservation League and the lies, hyperbole and “death of commonsense”. If the city were to tax cruise ship passengers, why not students, why not tourists? Where was this “unabated growth’ that CCL and others referred to? Cruise ship visits by Carnival are projected at 89 this year and 84 next year. If the City were to attempt to introduce the ordinances requested by those calling for them, the City would have another law suit on its hands. He suggested that those seeking City regulations call on the Legislative Delegation to get Columbia to change state law (The State regulates maritime industries).The Mayor added that their requests for a change in the law will go nowhere. He also said he was looking forward to addressing the court over the issue.

As for the State Ports Authority, it was deserving of an award for what it planned, not criticism. The partnership between the City and the Spa was “amazing”, the Mayor said.

Council member Gregorie was the first to challenge the Mayor and asked that if Council members’ comments were limited to 15 minutes shouldn’t the Mayor’s? (In all the years I have been attending Council, I am unaware of any Council member being cautioned for speaking beyond 15 minutes) The Council member sought to have the matter deferred so that staff could consider the recommendations of the HCF.

Surprising perhaps, there was little discussion after Council member Gregorie’s comment. Council member Gallant said there needed to be community support for the SPA plan and asked whether a City Council member could be appointed to the SPA board. There was no response. Council member Hallman also spoke in favor of having staff review the HCF’s recommendations.

The motion to defer the vote on the new article was defeated with Council members Gregorie, Hallman, Mallard, Seekings and Gallant voting for deferral. The subsequent vote on the reading of the new article was carried with the same members opposed.

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