FINANCE COMMITTEE OCTOBER 7, 2003

MUNICIPAL COMPLEX, ROOM 103

Present: Paul Gawrych, Chair, Kruger Smith, Thomasena Stokes- Marshall, Gary Santos Also: Larry Carr Staff: Mac Burdette, Colleen Jernigan, Eric DeMoura, Ed Barbee, Belinda Profitko

Mr. Gawrych called the meeting to order at 1:30 p.m.

Mr. Santos moved to add Discussion of funding for the Hungryneck Boulevard project to the agenda as #5. Ms. Stokes- Marshall seconded the motion. All in favor.

Mr. Stokes-Marshall moved to amend the agenda and move item #4 to item #2. Mr. Smith seconded the motion. All in favor.

Mr. Smith moved to add Discussion of purchase of Town property in Shemwood II to the agenda as item #6. Mr. Santos seconded the motion. All in favor.

1. Approval of Minutes

Mr. Santos moved to approve the minutes from the previous meeting. Mr. Smith seconded the motion. All in favor.

2. CARTA consortium – purchase of property

Mr. Smith asked if this was for information only. Mr. Burdette answered in the affirmative and stated that a full presentation would be provided at the Town Council meeting scheduled for October 14, 2003.

Mr. Burdette stated that Mayor Hallman asked him to attend a meeting of area mayors, County Council Chairman, Tim Scott, and various staff and administrators. He stated that Mayor Summey, Mayor Riley, Isle of Palms Mayor, Administrator from City of Hanahan and various staff were in attendance. He stated that there was lengthy discussion on how much longer CARTA could remain operational given the budgetary constraints CARTA is facing with the ruling from the Supreme Court over the half cent sales tax referendum. He stated that Mr. Chapman was present to answer any questions and would be present at the Town Council meeting to give a presentation to the entire Town Council on this issue.

Mr. Burdette stated that without a new revenue source, the time that CARTA could remain operational would be very limited. He stated that CARTA is proposing to sell their maintenance building, which is estimated at $7 million, but this would only be a short term solution. He stated that if the building were sold, CARTA could remain operational until the spring of 2004. He stated that it would appear that until the Supreme Court rules differently on the half cent sales tax or another referendum is proposed and passes in 2004, additional short- term solutions or “band-aids” would have to be used. He stated that there are various options that could be used to keep CARTA operational.

Mr. Burdette stated that there was some reluctance from Mayor Summey on his ability to convince his City Council to commit to an investment for CARTA, without there being an end in sight and a plan. He stated that he relayed to those present that Mount Pleasant Town Council would not likely desire to invest capital if the two major cities that would be the primary beneficiaries of CARTA were not willing to invest at an even greater level than the Town would participate. He stated that Mayor Riley was very strong in his intent to have his City Council invest in this venture.

Mr. Burdette stated that Mr. Charlton DeSaussure, attorney for CARTA and Tim Scott, Charleston County Chairman, were also in attendance. He stated that Mr. DeSaussure was available to speak about bond issues and the various ways they could be structured. He stated that Mr. DeSaussure suggested that the best way to keep CARTA operational until the spring or summer of next year is through the purchase of the building or for Charleston County to purchase the building. Mr. Scott indicated that he was not sure that Charleston County Council would desire to be involved as a primary investor because of the $3 million requirement for the new bridge. He stated that later on, Mr. Scott indicated that County Council might be willing to be involved as a participant.

Mr. Burdette stated that Mr. DeSaussure proposed using a bond anticipation note, which is usually for one year and can be “rolled over” for another year and possibly for a third year. He stated that the bond would allow for the repayment of two loans. He stated that the cost, if there were four participants, would be approximately $25,000 a year for each participant. He stated that a positive aspect of the bond would be that if the referendum were upheld, or a new referendum passed for the half cent sales tax, the building would be purchased back by CARTA and the bond repaid. He stated that a negative aspect would be that if there was not another means of funding CARTA, those that signed the anticipation note would be responsible for the building and would then have to sell the building.

Mr. Burdette stated that the building is a good building and is appraised at $7 million. He stated that during the meeting, Mayor Summey offered to purchase the building for $6 million. He stated that a consensus of selling the building for $6.5 million was reached during the meeting.

Mr. Burdette suggested that the Town was not interested in solely investing in a building in North Charleston for the sake of investment, but might be willing to be a participant in something at the level of $25,000 if there was an end in sight. He stated that currently there does not appear to be any future plans for funding beyond the sale of the building. He stated that there is an understanding that it would take more funds than anyone in the County is willing to invest unless there is a referendum to approve additional funding.

Mr. Howard Chapman, Executive Director for CARTA, stated that it is critical to move forward with the sale of the building in order to keep CARTA operational. He stated that the CARTA Board passed a resolution at its last meeting to contact and meet with area municipalities to establish a consortium. He stated that there would be some form of public transportation, whether it be CARTA or a private business.

Mr. Smith expressed frustration about irresponsible statements that have been made in the press that CARTA is mismanaged. He stated that as a member of the CARTA Board, along with Ms. Stokes-Marshall, he was very interested in the management of CARTA when first appointed to the Board. He stated that through research, he has concluded that CARTA could not be managed any better than is currently being done. He also expressed frustration with the suggestion of using smaller buses. He stated that the current CARTA buses were given as part of a federal grant and were the buses that were used during the Olympic games in Atlanta, Georgia.

Mr. Burdette suggested that the cost of operating a smaller bus was essentially the same as the larger buses and the operator has to be paid regardless of whether they are driving a small or large bus.

Mr. Smith stated that the buses for purchase in the future were to be smaller. He stated that there is a lot of misinformation and irresponsible statements that have been made and suggested that the public needs to recognize this. He stated that another misconception is the statement that CARTA has high salaries. He stated that there are four CARTA employees and suggested that high salaries is another area of misinformation. He stated that the maintenance is contracted through a competitive bid process. He expressed confidence that the best maintenance prices are being obtained. He stated that CARTA is not a mismanaged, overpaid, poorly run company; it is being operated in the best way possible given the situation.

Mr. Burdette stated that he indicated at the meeting that it has been his experience that if there was a County issue and there was a broad base of participants, meaning the cities and the County governments, that Mount Pleasant Town Council is always willing to consider paying a fair share. He stated that if the Town participated in a bond anticipation note, Mount Pleasant’s share would be approximately $16,000. He stated that this was based on having four participants and based on population. He stated, of course, that more participants would lower the amount of each one’s share.

Mr. Burdette suggested that the share amount should not be considered solely on the amount that would be required annually, but the responsibility that the Town would have if they participated in the bond note and a solution was not reached and CARTA could not remain operational. He stated that then the building would have to be sold and it would have to be determined if this could be realistically accomplished in short order so that this situation could be remedied in a timely fashion.

Mr. Smith stated that this would be a secured loan and the municipalities would not be asked to “go out on a lark”. Mr. Burdette agreed and stated that the building is a heavy fleet maintenance facility with offices.

Mr. Burdette stated that he would speak with Mayor Hallman to determine when Mr. Chapman would need to be present to speak with Town Council and would then contact Mr. Chapman. He suggested that the presentation could be scheduled as a special Town Council meeting prior to the regularly scheduled Town Council meeting. Mr. Gawrych suggested that the presentation should be scheduled during the Town Council meeting and be placed early on the agenda.

3. Consideration of amendment to communication tower lease agreement

Ms. Jernigan stated that Ms. Wendy Smith and Mr. Jonathan Dyer, from Crown Communications, were present for this issue. She stated that Crown Communications is requesting to amend the agreement with the Town to use T-arm mounts instead of flush mounts and also to increase the rental fee charged for each additional carrier. She stated that a copy of Ms. Smith’s e- mail to staff was provided to the Committee, which outlines the amendments requested.

Mr. Burdette stated that at the time the request for a tower was brought to Town Council, there was some hesitancy to allow the installation. He suggested that there was not a better location to place a tower than amongst light poles, as it is currently installed.

Mr. Gawrych agreed and stated that it is somewhat difficult to find the tower at Park West amongst the light poles.

Mr. Burdette suggested that the citizens would not have a complaint, particularly because there is revenue being generated from this and would increase the revenue stream in the future.

Mr. Smith stated that he does not object with SCE&G placing antennas on their poles in remote areas such as the Snowden Community, but expressed concern with the antennas being placed on the poles along Johnnie Dodds Boulevard. Mr. Burdette stated that this request did not involve SCE&G and suggested that this was a good venture for the Town.

Mr. Smith asked if the request was for T-arm mounts and to increase the rent. Mr. Burdette answered in the affirmative and stated that this would also allow for more revenue to be generated for a third generation than the contract currently allows because more carriers can be accommodated on the tower.

Mr. Dyer gave a PowerPoint presentation for the Committee.

Ms. Smith stated that the current lease allows the Town to receive $1200 a month for the initial installation and for the second carrier it would be $400 a month, with the Town not receiving any consideration for subsequent carriers. She stated that the lease restricts the type of antenna mounts used to flush mounts, which limits the number of carriers that can be installed on the tower. She stated that when Triton was placed on the tower, T-arms were installed instead of flush mounts and it was agreed with staff that once a second carrier was installed on the tower this mistake would be corrected. She stated that it is proposed to increase the monthly rental for a second carrier to $500 a month, and $500 a month for each subsequent carrier.

Mr. Smith asked how many antennas could be placed on the tower. Ms. Smith answered that the tower would allow for four antenna arrays. She stated that due to the spatial diversity, the flush mounts would only allow for two antennas to be installed, but with the T-arm mounts up to four antenna arrays could be installed.

Mr. Gawrych asked if the request was only for the tower in Park West. Ms. Smith answered in the affirmative.

Mr. Smith asked if the tower could be raised to allow for more antenna arrays. Ms. Smith answered in the negative and stated that due to the proximity of the runway at the airport, a higher tower could not be installed.

Mr. Smith asked about the incremental increase in rent. Mr. Dyer answered that every five years, the lease allows for a 15% increase in the monthly rental rate.

Mr. Santos asked if the antennas emit radiation. Mr. Dyer answered in the affirmative and stated that the antennas emit a radio frequency, which is a type of radiation. He stated that the radiation is not harmful, unless in direct line of the source of radiation, which would be the antennas. He stated that the technicians are aware of this, and safety measures are taken to ensure no harm. Mr. Santos asked if the radiation levels are monitored. Mr. Dyer answered in the affirmative and stated that all employees are required to wear frequency monitors, which sound off an alarm if they are exposed to radio frequencies above the acceptable threshold. Mr. Santos asked if the Town receives a copy of the reports and suggested that the Town should receive copies of the reports.

Mr. Smith suggested that the Town should have access to the reports. Mr. Santos suggested that the report should be provided to the Town. Mr. Burdette asked if it could be stipulated in the contract to have access to any radiation emission records. Mr. Dyer answered in the affirmative and stated that the FCC regulates radio frequency emissions and does not allow hazardous installations. He stated that reports of the radiation strength could be provided if desired. Mr. Burdette and Mr. Santos stated that this was the report that was desired.

Mr. Burdette suggested that the schools have satellite dishes that emit more RADS than the antennas.

Mr. Gawrych asked if the tower was fenced. Mr. Burdette answered in the affirmative and stated that there is a small building located at the base of the tower as well. Mr. Dyer answered that the fence is locked with a stymie lock, which is a long steel bar that slides into a sleeve. He stated that there is barbed wire at the top of the fence.

Mr. Smith asked Mr. Kassis if SCE&G is planning on installing more antennas at the top of their utility poles. Mr. Kassis answered that a request would be considered. Mr. Burdette stated that SCE&G is not involved with this request. Mr. Smith understood, but stated that SCE&G has a lot of poles in the Town and he wanted to know how frequently antennas would be installed.

Mr. Santos asked when the RAD information for the report is taken. Mr. Dyer answered that the RAD emission is tested every two years, but Crown Castle has their own testing equipment. Mr. Burdette requested that Crown Castle conduct a RAD emission test within the next few months. Mr. Santos stated that he would like to know what the emission levels were before and after installing the new carrier and expressed concern with the number of children that play sports in the vicinity of the tower. Mr. Burdette asked if a baseline reading could be taken now and then another reading done after the second carrier was installed. Mr. Dyer answered that this could be accomplished.

Mr. Gawrych asked about the requirement for future co- locations. Mr. Burdette answered that this refers to co- locations on the pole and not installing an additional pole.

Ms. Jernigan asked when the second carrier would be installed. Ms. Smith answered that the second carrier is ready to install the antennas and was waiting on Town Council approval for the antenna type that could be used. She suggested that the second carrier would be installed by November 2003.

Mr. Barbee stated that Crown Castle is required under the contract to notify the Town before another carrier is installed.

Mr. Santos moved to recommend to Town Council approval of the use of T-arms and contract amendments as presented by staff, with the addition that a RAD report be submitted to the Town on a periodic or annual basis. Mr. Smith seconded the motion.

Mr. Burdette stated that a baseline reading would be taken before the second carrier was installed and a subsequent reading would be taken after the second carrier was installed.

Mr. Smith suggested that the information could be available upon the Town’s request to eliminate additional generation of paperwork. Mr. Santos suggested that Crown Castle should be required to submit the report on a periodic or annual basis. Mr. Dyer stated that the information that would also provide potential health risks would be easy to provide. Mr. Santos stated that he would like that information included in the report.

Ms. Jernigan clarified that the motion would allow staff to move forward and amend the agreement, with the Town Attorney amending the terminology of the contract without further review by this Committee.

Mr. Gawrych called for a vote on the motion. All in favor.

4. Discuss estimates for placing power lines under ground for tree protection (Town-wide)

Mr. Gawrych suggested that a town-wide plan or project should be considered with regard to undergrounding power lines. He stated that preserving trees is important, but suggested that a town-wide plan would be beneficial.

Mr. Santos stated that he previously brought up having participatory-type projects to underground power lines in different areas of the Town, but this was not well accepted because of possibly being seen as discriminatory between various areas of the Town. Mr. Burdette stated that it was discussed that if the franchise fee was increased, but power lines in certain areas were underground, there could be criticism from other areas of the Town that have not had the power lines underground. Mr. Santos stated that previously Christ Our King wanted to have a participatory project to underground power lines, but it was brought up that other areas would not have the same option or benefit and so the issue was dropped. Mr. Burdette suggested that the issue was discussed at the Planning Committee and staff began working on the issue.

Mr. Santos suggested that a Town-wide plan would be beneficial. He suggested that the plan could begin with critical tree areas and then be expanded.

Mr. Smith suggested that the Planning staff could work on the Town-wide plan. Mr. Burdette suggested that SCE&G would be the appropriate agency. Mr. Smith stated that he envisioned the plan would be similar to the Comprehensive Plan and would encompass the issue of trees, Shem Creek, Johnnie Dodds Boulevard, Coleman Boulevard, etc. Mr. Burdette suggested that the current staff would not be able to complete this project at this time and suggested that the project would take at least a year to complete. Mr. Smith asked if an intern could work on the project. Mr. Burdette answered that an intern might not be able to finish the project because of the large scope. He stated that staff has been working for several years about undergrounding power lines on Coleman Boulevard and have worked the past two to three years to place power lines underground for a small section of Coleman Boulevard. He stated that there is a lot involved with placing the power lines underground because of the various utilities that are currently located underground in that area. He suggested that it was a very complicated issue.

Mr. Burdette suggested that staff would need the appropriate resources and suggested that a consultant or consulting agency might be more important.

Mr. Gawrych agreed that this was a big, complicated project, but suggested that this was a wonderful opportunity for the Town. He expressed confidence that this could be accomplished.

Mr. Smith stated that SCE&G has compiled a plan based on the criteria provided by the Town. Mr. Burdette stated that interns identified critical areas and this information was provided to SCE&G to provide a cost estimate for placing power lines underground in these areas. Mr. Smith suggested that there was not a sense of urgency to underground power lines in the critical tree areas.

Mr. Santos disagreed.

Mr. Smith suggested that there were other things that were equally important and suggested that there should be a systematic approach to undergrounding power lines, similar to the Stormwater program.

Mr. Gawrych stated that each Town Council member has an idea on how to proceed on this issue.

Mr. Santos stated that an intern has researched which areas should be a priority. He suggested that there is some urgency with regard to ensuring that the historic trees do not continue to be disfigured. He suggested that there is an opportunity at this time to preserve these historic trees. He stated that he has been contacted by SCE&G about when the trimming of the trees can continue. He suggested that this issue has been in the works for several months and the Town should move forward.

Mr. Smith suggested that there is more with this issue than merely the preservation of the trees.

Mr. Gawrych stated that this issue was also discussed at the Planning Committee, which was held on October 6, 2003.

Mr. Santos suggested that the franchise fee would have to be increased in order to have the funds for this project. He stated that other options were previously discussed, but not approved.

Mr. Carr asked what the cost estimate was for the project. Ms. Jernigan answered that the cost estimate was $1.2 million.

Mr. Gawrych asked how many areas were identified. Ms. Jernigan answered that there were seven areas identified. Mr. Burdette suggested that these were small areas in consideration of the size of the Town.

Mr. Carr stated that the Planning Committee discussed this project in the context of the seven identified areas. He asked if some of the areas identified are of concern to SCE&G with regard to trimming the trees and if there are some time constraints for some of those areas. Mr. Kassis stated that the tree trimming is established through a cycle, so there are several of the identified areas that are on the circuit to be trimmed. He stated that in some cases there may be a five or six year span since the last time work has been done in that area. He stated, for example, that the area of Camilia Drive has not been trimmed for approximately six years. He stated that if the trimming is not done, there could be approximately 150 residents that would experience power outages.

Mr. Smith asked if a large “L” or “Y” cut would have to be made when trimming the trees. Mr. Kassis answered that when trimmed, the limbs are sufficiently cut back to accommodate the established cycle. He stated that the trimming is necessary to avoid any disruption of service due to fallen limbs or interference from limbs.

Mr. Burdette asked if the Town approved $20,000, for example, for a long-term design plan for undergrounding power lines, would SCE&G be able to match those funds through the non- standard service agreement to complete a plan. Mr. Kassis answered that this could be accomplished. Mr. Burdette stated that the ultimate plan would be for the areas identified to be more aesthetically pleasing, to have sustained power during storm events, and preservation of trees. He stated that areas with transmission lines would not be able to be placed underground and therefore the distribution line that is underneath of it would not have to be placed underground. He stated that this would be a consideration in developing the design plan.

Ms. Stokes-Marshall stated that SCE&G is a huge utility conglomerate and asked if there are any long-term plans to underground power lines. Mr. Kassis answered in the negative. He stated that the rates as filed with the Public Service Commission are standard overhead rates. He stated that if every request from every municipality in the Charleston area were to be completed the cost would be approximately $40 million. Ms. Stokes-Marshall stated that given the amount of requests for undergrounding power lines from municipalities, has SCE&G even considered having a long-term plan for undergrounding power lines. Mr. Kassis answered in the negative. Mr. Burdette stated that generally the requests are primarily for aesthetic reasons. Ms. Stokes-Marshall stated that the Charleston area is prone to hurricanes, high winds, and major storm events, which could cause the overhead power lines to cause a major catastrophe. She suggested that a conglomerate such as SCE&G should have a long-term future plan for addressing the need for undergrounding of power lines.

Mr. Kassis stated that the current rate for electric power is eight cents per kilowatt hour, which is a great rate. He suggested that if the public was willing to pay a higher rate, such as sixteen or seventeen cents per kilowatt hour, as in the northeast, then SCE&G would have more funds to accomplish more. He stated that there has never been an interest on a state or commission level to have higher rates.

Mr. Gawrych stated that at the Planning Committee he asked what the long-term cost was for above-ground and underground power lines with regard to repair, upkeep, etc. and Mr. Kassis indicated at that time that the cost was approximately the same. He suggested that the obvious decision might be to underground the power lines, but there are business considerations in making that decision.

Mr. Burdette stated that SCE&G would match the Town funds up to $250,000 per year. Mr. Kassis stated that if the Town stated that they desired to underground all of the power lines in Mount Pleasant, he would be able to give the Town an estimated cost within $10 million and then would have to get permission from the Public Service Commission for approval.

Mr. Smith agreed with Mr. Burdette that there are areas in the Town where it would not be wise to underground the power lines, such as in areas where there is a transmission line. He suggested that a plan should be designed that would show which areas could be accomplished within reason, be economical, and would bring in more than simply preservation of trees.

Mr. Burdette suggested that in order to determine the cost of the project for a certain area, the various utilities would have to “overlay” the position of their utilities. He stated that it is not simply moving the power lines, the other utilities have to be given consideration.

Mr. Smith asked if the other utilities were considered in the cost estimate for the seven areas. Mr. Kassis answered in the affirmative and stated that the estimated cost was $1.2 million. Mr. Burdette stated that these projects represented about 1/20 of the Town.

Mr. Burdette suggested that in order to accomplish the project, the utilities that are already underground must be considered and identified. He stated that for the Shem Creek area, the biggest cost was conflicts with location of utilities.

Mr. Santos asked if the estimated cost for the seven areas was $1.2 million, then the Town’s share would be approximately $600,000. Mr. Burdette suggested that the project would have to be completed over several years as SCE&G would only match up to $250,000 per year. He stated that based on this, it would take approximately two and half years to complete. He suggested that the Town’s share could come from Hospitality Tax funds for tourist areas. He stated that Accommodations Tax Funds could also be used.

Mr. Santos asked if Tree Bank Funds could be used. Mr. Burdette answered in the affirmative, and stated that there is currently $200,000 and if this is used, then other projects to beautify the Town could not be accomplished. He stated that Open Space Funds could also be used. He suggested that of course, the General Fund money could be used as well. He suggested that the best option, if undergrounding power lines is desirable, is to have a comprehensive Town-wide plan, starting with the tree issues. He suggested that the franchise fee could be increased; some of the residents would be in favor and some would be opposed. Mr. Santos stated that he was not contacted about any opposition in raising the franchise fee when it was last considered.

Mr. Smith stated that there were a few that were opposed to raising the franchise fee.

Mr. Santos asked if any of the council members received a call on raising the franchise fee. Mr. Carr answered that he did not receive a call in favor or opposition of the franchise fee and suggested that this was not an indication of the public consensus.

Mr. Burdette suggested that a referendum could be done in September 2004 relative to increasing the franchise fee.

Ms. Stokes-Marshall suggested that a referendum could be a means of determining the public opinion relative to increasing franchise fees.

Mr. Carr suggested that a description of the seven areas would be beneficial. He suggested that the public would be more likely to support this kind of concept if there is a goal to complete Town-wide and there is a public benefit.

Mr. Smith suggested that the public would be more willing to support a plan that has specific goals and clearly delineated objectives. He suggested that this approach should be taken for this project, including the identification of funding sources.

Mr. Santos suggested that while the long-term plan is being completed, SCE&G would continue to trim and prune the historic trees and “disfigure” them.

Mr. Carr suggested that the critical, emergency areas could be identified and addressed first. He asked if there were any of the critical areas that were critical for SCE&G as well. Mr. Santos answered that SCE&G has contacted him and expressed concern with wanting to move forward with the tree trimming. He suggested that moving forward with preservation of the trees in these critical are