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County Council, October 5

Yesterday's meeting shortest we can recall
Recap of Tuesday’s I-526 meeting

Warwick Jones

Yesterday’s regular Finance Committee meeting was notable for one thing - its brevity. It was 6 minutes long and attended by only 6 of the 9 Council members.

As a resident of the City of Charleston, we were interested see a parking arrangement modified to allow a hotel to be built in the City. The hotel will be on Cumberland Street and a 10- year lease for 50 car spaces was necessary to get City approval for its construction. The car spaces are in the adjacent garage owned by the County. The developer already had a lease with the County but the term was less than 10 years. Seems the City is about to get yet another hotel.
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We missed the special Council meeting on Tuesday when the resuscitation of the I-526 project was discussed. As indicated by the media, the State Infrastructure Bank (SIB), after pressure from the State Governor, is to re consider financing the completion of I-526, at least partly. A “term sheet” has been given to the County for consideration.

Council agreed that County Attorney Dawson and Council members Moody and Summey should meet with the SIB to negotiate terms. Not all members were happy. Two (Schweers and Qualey) of the 8 members present were opposed. Council member Darby was absent. Both opposing members were most unhappy about the liability that would be assumed by the County. Based on the more recent estimates of the $725 million cost of completion, the financial burden that falls on the County would be $305 million. As the Council members said, the County would bear all of the brunt of cost overruns so its financial burden could well exceed $305 million. Where do these funds come from? Council member Qualey noted that the County had to pick up the full cost of any litigation. Looking at the liabilty of the County, he noted the unhappy history of the old Naval Hospital and the likely cost overrun of over $10 million for the Materials Recovery Facility.

All of the Council members who voted to move ahead with I-526 spoke to the issue. They noted the need, particularly by the citizens on Johns Island and West Ashley. Council member Moody said that 70% or more of the citizens in his district indicated a desire for the completion.

As a model Chair, Chairman Rawl saved his comments to the end of discussion. His comments were the most powerful. He has long been in favor of the highway completion. He noted that in the last 50 years, he had witnessed the completion of all the major road projects in the County. All had been completed (and were important to the areas infrastructure). But all were opposed by the same people, with the same mindset, the same newspaper, and on the losing side of decisions. They diminished the intelligence and capabiliy of citizens. And they presume to tell us what to do! The Chair applauded Council for the vote and the relief which had been requested by citizens.

And the ciizens in attendnce loudly applauded.

The fat lady has yet to sing! We concede that the majority of the County’s citizens probably want I- 526 completed. But from where do the funds come? And considering the strength of the local economy and construction in particular, completion is likely to cost more than the present estimate of $725 million, possibly much more. Council members Schweers and and Qualey are right to be concerned. To give perspective, this year the County is budgeting property tax receipts at $166 million. This is roughly half of the $325 million commitment of the County to I-526 proposed in the term sheet. Maybe the SIB will offer more funding but unless it does, there will be a large burden on the community to finance completion, and a very large burden if the cost escalates as we expect.

Most likely, the County would dip into the second half-cent sales tax revenue. The tax will raise $2.1 billion over 25 years with more than half of the funds directed to roads. In nominal terms, the $325 million set against sales tax receipts does not look so formidable. But the $325 million is the estimate in todays dollars. The sales tax receipts flow over a 25 year time frame.

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