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City Council, October 25

City continues in good fiscal shape
Vote still stands at 75% to reverse PC decisions
Marc Knapp

We didn’t expect any surprises arising from the Budget Workshop held prior to yesterday’s Ways and Means meeting. However the news was good. Although two months remain in the year, staff expects the City will come close or indeed exceed it budget targets. And it expects another good year in 2017 with no tax increase anticipated.

Staff told Council that revenues for this year are meeting or slightly exceeding projections. At the same time, costs are below or at projected levels. With health care costs $775,000 under budget and fuel $1 million under budget, we suspect staff would have forecast a substantial surplus for the year. That they didn’t probably reflects the impact of Hurricane Mathew. Not only did the hurricane impact tourism revenues but there were also recovery expenses. Insurance and FEMA will cover some of these expenses but staff did not know how much.

For next year, staff expected a modest growth in most revenues and sought no tax increase. It noted that on the expenditure side, COLA would be provided for employees, rates increased for retirement systems and the City’s minimum wage raised from $10.40 to $11.00 a hour. It also planned to meet a 20% fund balance goal “through judicious approval of new and increased expenditures”.

The 20% fund balance goal drew some questions from Council members. Yes, said staff, other cities in the state had lower percentage balances but Charleston was on the coast and at greater risk to flood and hurricane damage than those inland. A higher fund balance was thus needed. The 20% balance is roughly equal to 3 months of expenditure.

At the end of 2015, the fund balance was $31.4 million or 19.57% and considering the course of revenues and spending, the percentage is unlikely to be much different at the end of this year. We’ll go further and say that the 20% target set for the end of 2017 will not be hard to achieve considering the course of the local economy. We’d also add that the City has the highest of bond ratings and consequently, pays low interest rates on borrowings. Without a high fund balance, we doubt that City’s bond rating would be so high.
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The main item on last night’s Council agenda was the long standing issue of the vote required to overturn a Planning Commission (PC) vote. For the record, Council can approve a recommendation from the PC with a simple majority vote. However, if it wants to vote against a PC recommendation, it needs a 75% super majority vote i.e. it needs 10 members of the Council including the Mayor, to vote against it. A number of Council members, particularly members Moody and Waring object to the super majority and seek to have it lowered – ideally to a simple majority.

Council has twice approached the PC to obtain its approval to lower the voting threshold. Its first approach was rejected and its second was followed by an attempted compromise. The PC voted to lower the threshold from 75% to 65%. At the same time, the percentage pertained to Council members present at a meeting and not the full complement.

It is fair to say that there was some confusion on Council last night as to dealing with the new PC recommendation. In the first instance and after much legal discussion, Council member Moody moved that the threshold be lowered to 60%. The vote was in favor 8 to 5. But this was of course below the 75% or 10 vote required supermajority to overturn a PC vote.

To tidy up and perhaps resolve the issue, another vote was taken to accept the recommendation of the PC that the supermajority be cut to 65%. All except Council member Wagner opposed this. So the 75% super majority level remains unchanged.

There was a lot of hand wringing and despair on Council last night, at least amongst those who wanted a lower threshold. Members noted that most other jurisdictions such as the County required only a simple majority of Council members to reverse a PC recommendation. Council member Waring in a long and passioned speech, said that the high threshold was unfair to poor folk, in particular black folk as they could not afford the necessary retention of lawyers to overcome a PC recommendation. Council member Williams denied there was any racial overtones in any of the Council or PC decisions, at least in recent times. Council member Moody lamented that the achievement of a simple majority vote to overturn PC recommendations may require the replacement of Planning Commissioners with others sympathetic to Council.

Mayor Tecklenberg and Council member Seekings were again strong supporters of the high supermajority percentage. It had served the City well since its implementation some 90 years ago. They were supported by the Preservation Society. Surprisingly nobody spoke on behalf of the Historic Charleston Foundation last night.

It seems to us that Council has become close minded over this issue. Both sides of the issue on Council refuse to budge. What was wrong with accepting the compromise offered by the PC? It remained a supermajority and still at an effective level. At least it closed part of the gap between the 75% and the 51%. It also did not preclude Council members if they so desired to pursue a further reduction.

It seems to us the only thing gained last night was an to increase the acrimony between City Council and the PC.

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