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City Council, December 4

Millage increase for 2019 for City properties
Big cost over runs for Spring-Fishburne Drainage project

Marc Knapp

Yesterday’s session began with a discussion on the 2019 budgets. And it was a lengthy session.

The Mayor presented his proposals for the General and Enterprise Funds and these can be seen by pressing Download file and pressing Download file respectively. His proposal for the General Fund included a 1.5 millage increase which contributed to a 9% increase in property tax revenue. Total revenue of the Fund before “transfers in” and “reserves” was up 6% to $172.5 million.

The Mayor noted that the higher millage was necessary to finance the construction of two fire stations - in Cainhoy and Johns Island- and to cover proposed increases in wages and salaries. The latter arose from a proposed increase in the City’s minimum wage from about $11.5 a hour to $12 an hour, and a COLA increase for non-sworn in employees. The COLA increase would begin on July 1, 2019.

It seemed no Council member was happy about the Mayor’s budget. Probably none were happy about the proposed millage increase but all members saw a necessity to raise pay rates. And the easiest way to finance it was as increase in the millage rate. All Council members wanted the pay increase to begin on January 1 2019, not half way through the year. The change in timing would increase the 2019 millage by 3 points, 1.5 points above that in the Mayor’s budget. The higher rate would add about $40 to the tax on property with an assessed vale of $400,000, members said.

Council members Jackson and Gregorie were not happy They wanted more funds to pay for training and education of employees and looked to increase the millage rate by another point to a total of 4. Council was unpersuaded and voted for a budget with a 3 mil increase. The second and third readings on the amended budget will be in two weeks and it is possible there will be more changes.

We voiced unhappiness about the increase n the millage rate. Reflecting the good economy, property taxes in 2019 would probably rise 7% without the millage increase . We would have thought that such as increase sufficient to cover a meaningful wage and salary increase. We also wonder about measuring and enhancing employee productivity.

We note three comments made in the discussion. The first was by Council member White, a fiscal hawk, who said that he had never voted for a millage increase but would do so now. He said a increase was very necessary. The second was from Council member Seekings who noted that staff turnover in the last 5 years had aggregated 100%, a concerning high level. This in part was due to the low remuneration. As he and others noted, employees had shifted to the County and other jurisdictions because of higher pay. The City had to pay more to retain employees. And finally the Mayor, who noted the influx of folk to the City. The population increase certainly and ultimately led to higher property taxes but in the initial years, the need for more infrastructure and services offset any tax benefit.

No changes were proposed for the Enterprise Fund Budget.

The Accommodation Tax budget for 2019 can be seen by pressing Download file and pressing Download file and for the Hospitality Fee fund. Very broadly, the budgets are similar to the previous year. Some minor changes were proposed last night, in particular to bring the funding higher for the Aquarium, the Gibbes Museum and the Arnold Jewish Studies program to same levels as in 2018 accommodation tax budget.

Council members were very much alive when the Spring - Fishburne Drainage project amendments came up for discussion. Council was asked to approve fees for Davis and Floyd that represented an increase of $7.3 million over contract. It was also asked to approve a construction contract with Conti Construction for $51.9 million. It was clear the drainage project was running way over budget and Council was very surprised by how much.

Council member Moody pressed staff for answers and they were not reassuring . There were 5 Phases to the project . The first three Phases were complete and Phase 4 was underway. The original estimate for the project was $154 million. However, the completion of Phase 4 would cost another $24 million and Phase 5, an other $30 million.Overall the project was an estimated $54 million over budget. The project was initiated some 10 years ago and is running well behind schedule.Completion is now expected in 2024. The funding sources of the project are the State Infrastructure Bank, the Drainage Fund, and the King Street Gateway TIF.

Council wondered why it was not told earlier about the poor performance and the surging cost increase. A vote on the items was deferred and the issues will be discussed at the next Public Works Committee meeting. No doubt, the Committee will need some deep thinking about funding the substantial cost overrun.

Staff gave a progress report on the Short Term Rental (STR) ordinance. In summary, it is doing well. Since implementation, some 770 on-line advertisements have been removed. Over 1600 advertisements remain and about 500 are being investigated. Fines have been imposed on 23 operators and there are summonses outstanding on 36.

259 permits have been issued of which 186 were Bed and Breakfasts (grandfathered) or STRs previously in the STR overlay.