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County Council, January 19

Preparing for spending half-cent sales tax funds
Policy for allocating Community Investment Funding approved
Warwick Jones

Discussions relating to spending the funds raised by the recently approved half-cent sales tax took up the major part of last night’s Finance Committee meeting. No motions were made and no votes counted. But there were some issues.

Presentations were made by staff and the executive director of CARTA. All presentations were for informational purposes and related to the three areas where sales tax funds would be directed – viz. Greenbelts, CARTA and Roads. The speakers referred to spending funded by the first half-cent sales tax and gave some indication as to spending of the new sales tax.

Before the presentations, there was an issue as to the composition of the Committee formed to provide oversight for the spending of the sales tax monies. Nobody spoke against the need for such a Committee. But who should serve? Some Council members thought that every member of Council should have a place on the Committee considering its importance. As Committee Chair Summey pointed out, members may not have a vote on the Committee but they could certainly speak to issues. Besides, any decision by the Committee still had to be approved by the full Council. No motion was made and the Committee remained at 5 members.

Greenbelts, to receive 10% of the projected $2.1 billion Tax revenues, were the subject for the first presentation. Staff commented on the success of the initial program. It had an objective of conserving roughly 30% of the county’s land mass. It hadn’t quite achieved this objective but before the Greenbelt Advisory Board made a recommendations to Council, it sought to have the Greenbelt inventory brought up to date. Additions, in particular those in the Edisto region relating Westvaco developments, needed to be made.

Council member Pryor expressed his unhappiness about conservation easements. He noted that in most cases the public had no access to these lands and the main beneficiaries were the land owners. He preferred acquisitions of fee simple property. Councilmember Schweers took issue with this, noting that conservation easements cost considerably less than full acquisition. If only fee simple land were acquired, then the Greenbelt program be hobbled. We know some other Council members share Council member Pryor’s views and we expect that this will be an issue in future meetings of the Committee.

We were particularly interested in the comment by staff that after reviewing costs and revenues relating to the first half-cent sales tax program, another $30 million may be available for Greenbelts. Yes, we thought so too. How could you overlook $30 million?

It came up first in the Greenbelt presentation but it related to both CARTA and Roads. In the first half- cent sales tax program, the County issued bonds to raise funds and began immediately funding projects. The revenues from the tax of course funded both interest and amortization of the bonds. As was noted in yesterday’s discussion, interest payments accounted for a significant amount of the tax proceeds. This time round, the program is designed to be more pay-as-you-go. A bond issue is likely but its scale will be less than that in the first program.

The plan to avoid a bond issue is likely to affect Greenbelts and CARTA more than Roads. Greenbelts and CARTA have projects that could use immediate funding. This is not necessarily the case with Roads. As staff pointed out, planning, permitting, right of way acquisitions, and construction may take eight years or so. So there is often a significant time lag from the receipt of funding to the actual spending. Collection of the sales tax will begin in mid- year but it will not be until the end of this year that the County will receive the funds. 2018 will be the first full year of disbursements.

It is hard to summarize the presentation on CARTA given by executive director Mitchum. He spoke at length some of recent initiatives and those underway. It was clear that much remains to be done in relation to upgrading its services, fare collection, data recording, route selection and fleet replacement. He spoke of the creation of a “hospitality” service to serve workers in restaurants and hotels in downtown Charleston. He also hinted that there could be some route closures too. He spent little time discussing the mega project of a rapid transit route from Charleston through North Charleston to Summerville. Council has already been treated to a presentation on this project and which will absorb a major part of the funds allocated from the sales tax to CARTA.

We felt some sympathy for Mr. Mitchum when he tried to field the question from Council member Johnson. She felt that CARTA was neglecting the rural areas of the community, in particular Johns Island and clearly she was looking to more services. Mr. Mitchum was restrained in his reply noting that such services were not at the top of his list presently. He could’ve added that serving even the urban and well populated areas of Charleston was a money draining exercise. To serve the less populated areas of the community, would even be a greater drain. We'd also add that to make ends meet, CARTA has to rely on outside funding. And CARTA has a large need for funds not only to improve services, but to maintain the present services.

CARTA and Roads were lumped together in the sales tax referendum, together receiving 89% of the proceeds. Staff stated that of the $2.1 billion, Roads would receive about $1.3 billion or 61% of the total. Projects left over from the first sales tax were still under way. The referendum ballot referred to a number of projects that could be funded by the new tax. Planning was already underway on a few of them – the intersection of Main Road and Route 17, improvements for Highway 41, widening of Main Road, and the roads around the airport. But staff noted that because of permitting and other requirements, it would be some years before construction began. Staff also noted that some big projects would be undertaken in the early years of the tax and receipts insufficient to finance all projects. The County would issue bonds at that time.
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The shaping of a policy for the allocation of Community Investment funding was achieved without the dissention we expected. Credit for achievement lies largely with Chairman Rawl, who as Chair of the Administration Policy/ Rules Committee last year, worked hard on drafting the new policy. There were some issues but those that arose last night seemed minor.

To see the proposed Policy that was set before the Finance Committee last night, press Download file. In the final policy, Item 6 will be changed to a maximum of $10,000. Legal is also to add language that allows a recipient to receive funding from other sources, but these amounts will be subtracted from the maximum allocation amount i.e. $10,000, before determining the County's allocation.

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