TOWN OF MOUNT PLEASANT, SOUTH CAROLINA
FINANCE COMMITTEE
Municipal Complex, Conference Room 103

Members Present: Paul Gawrych, Chair, Joe Bustos, Kruger Smith
Absent: Larry Carr
Also: Thomasena Stokes-Marshall
Staff: Mac Burdette, Colleen Jernigan, Eric DeMoura, Eddie Bernard,
Christiane Farrell , Su McManus-Frost
Also: Paul Trouche

Mr. Gawrych called the meeting to order at 12:45 a.m.

1. Approval of Minutes

Mr. Smith made a motion to approve the minutes from the previous Committee meeting; seconded by Mr. Bustos. All present were in favor.

2. Review of TIF Bond Ordinance

Mrs. Jernigan indicated that during the December meeting Council authorized staff to move forward in putting together an ordinance to issue the last available amount of the TIF Bonds that the Town has; which is $4.485 million. She indicated that the Committee had before them, a draft ordinance that would go to Council. She suggested that it had a term of ten years and the Town had to issue all bonds within five years of the first sale of bonds that the Town issued. The ordinance stipulates that the proceeds would go for the Waterfront Park and Coleman Boulevard revitalization plan, but it is not solely limited to those two projects.

Mr. Paul Trouche, bond counsel for the Town, stated that the issue should be placed with Bank of America as they hold the Town’s other TIF issues. They should offer a competitive rate but the Town would know before final reading. The Ordinance provides for placement with Bank of America.

Mr. Smith stated that Council is permitted to do a sole source if it is justified and based upon the statements made he feels it would be justified.

Mr. Smith made a motion to recommend to Council that Council empower the staff to go forward to Bank of America to negotiate for the $4.485 million TIF Bond note and approve the Ordinance with these provisions; seconded by Mr. Bustos. All present were in favor.

3. Review of Bonded Debt Ratio

Mrs. Jernigan stated that during the December Committee meeting staff was asked to see if they could do some comparison as to where the Town is with the debt obligations compared to other entities. She added that staff did contact some of the larger cities in South Carolina and with the information received back, staff constructed a chart. When looking at the chart, the percentages compare what is obligated within the eight percent debt limit. The Town is currently at 16 percent of its assessed value as compared to the other cities that are over 20 percent in most cases. Mrs. Jernigan indicated that she felt the provided information should make Council comfortable, as to where the Town is relative to the debt limit and why the Town does get such good ratings on their bond issues.

Mr. Burdette stated that there were only a couple of instances on the chart where the Town is not better then everyone else.

The Committee received this as information.

4. Recommendation for fee increases for Blessing of the Fleet

Mrs. Jernigan indicated that the Blessing of the Fleet Committee met and reviewed their fees and the budget relative to this event. The fees have not been increased in the last 13 years and due to expenditures increasing annually, as such, the Blessing of the Fleet Committee would like Council to agree to increase the fees, wherein the restaurants currently pay $200 the Committee would like that increased to $300 and the vendors currently pay $100 and the Committee would like to increase that to $150. Mrs. Jernigan suggested that when the Committee made these recommendations they did look at what other events were charging and these fees are still below that or with in line with what other festivals are asking participants to pay.

Mr. Gawrych asked if they were aware of how many people were coming to the event and looked at the trend over the past five years.

Mrs. Sue McManus-Frost, Co-Chair of the Blessing of the Fleet Committee, indicated that the participation increases annually. She added that approximately 13 years ago there may have been 3,000 participants and currently it is over 10,000.

Mr. Burdette stated that staff envisions that this is one event that they would like to look at moving to the Waterfront Park with Council’s permission.

Mr. Gawrych asked if Mrs. Jernigan had reviewed the information and felt comfortable with the recommendations.

Mrs. Jernigan responded in the affirmative.

Mr. Smith asked if this was still done at Alhambra Hall which the Administrator affirmed.

Mr. Smith made a motion to recommend to Council approval of increasing the fees as recommended by the Blessing of the Fleet Committee; seconded by Mr. Bustos. All present were in favor.



5. Review of recommendation to amend Farmer’s Market Rules and Regulations

Mr. DeMoura stated that the Farmer’s Market Advisory Board met last month and recommends to the Committee three adjustments to the Farmer’s Market Rules and Regulations. Mr. DeMoura reviewed the items which were recommended:

1. Signage – currently when attending the Farmer’s Market an individual does not find out the price of produce until the point of sale. This adjustment to the Rules and Regulations would require prices to be posted for each item of produce.

2. Organic Goods- currently the Rules and Regulations are vague in regard to what is organic and what is not. The term organic is now controlled by the USDA and in order to prevent a farmer from marketing something that is organic or saying it is organic and having it not be organic, they must provide certification for that item as being organic. The Committee is asking that if a Farmer is going to sell something that is organic they must show proof of that and post that as well.

Mr. Smith asked who the farmer would have to show proof to.
Mr. Burdette indicated that they would have to show proof to the Farmer’s Market Director, which is Sasha Harris.

3. Local Season Rule- this rule is currently is place; however, the Committee is asking to have it updated/“tweaked”. Currently if an item of produce is harvested locally it can not be broken; meaning, it can not be bought by a farmer and sold at the market. The current language is making it difficult for the market manager to monitor this. The Committee is asking to make this a little more firm by identifying the boundaries of the Low Country. What is happening is there may be a farmer who is selling a good and they are from two hours further south and if their good has come into season, then they would notify the market manager and she would spread that information to all the other farmers at the market and the other would be unable to broker the same good. For a period of time there would be a competitive advantage or a monopoly from one farmer over the other. This type of situation has created some type of discontent among the farmers. The Committee is asking to make the playing field more competitive by having specific dates of local harvest for each good or item of produce sold in the Low Country, with the Low Country being defined by five Counties.

Mr. Burdette stated that all of this speaks to the reputation that the Farmer’s Market has amongst legitimate Low Country farmers. They take this very seriously and without them the Town does not have a Farmer’s Market and that is why it is very important to listen to them on these matters.

Mr. Bustos asked what responsibility the Town has if something is held out as organic at the market and subsequently it is found not to be organic.

Mr. Burdette indicated that each farmer is like a contractor and they are responsible for representation of their produce. They could be removed from the market if they do not act appropriately.

Mr. Gawrych asked what the process is in determining who is or is not a farmer.

Mr. Burdette indicated that Mrs. Harris goes out and inspects each farm.

Mrs. Jernigan indicated that the Committee reviews each one of the entries prior to the market starting.

Mr. DeMoura stated that each farmer has to submit a crop plan at the beginning of each market and Mrs. Harris has to go out to each farm and monitor it to make sure they are complying with the crop plan. It is also reviewed by the Clemson extension staff.

Mr. Bustos made a motion to recommend to Council approval of amendments of the Farmers Market Rules and Regulations as stated by staff; seconded by Mr. Smith. All present were in favor.

6. Review of Special Census results

Mr. Burdette stated that the discrepancy that staff had was over the number of vacant units in Mount Pleasant. Staff felt the Town had fewer vacancies then what they counted. There is not much staff can do to challenge that because it was effective as of May. If it had been according to staff’s estimates the Town would have picked up a couple thousand more people. The total population estimated by the special census is 59,104. That is an increase of about four percent which corresponds to the permit allocation program. That is an increase of 11,495 over the previous five years. For the period of 1995-2000, in which a special census was also done, the increase was 10,605. He added that 26.7 percent of the population is under the age of 19, between the ages of 35-44 it is 17.3 percent, and for the ages of 55-84 it is 19.3 percent. Mr. Burdette stated that there are 15,850 family households. He added that there are 7,837 families in Mount Pleasant who have children under the age of 18 who are their own children, not including families raising others. He added that 17 percent of the households have individuals who are 65 or older. Mr. Burdette indicated that there has been a significant increase in five years for that number. He added that the average household size is 2.46 which is down from 2.47 in 2000. The number of occupied housing units in Mount Pleasant is 23,724 which is 89 percent. The number of vacant housing units is 2,800 which is 10.6 percent. The owner vacancy rate is 3.2 percent and the rental vacancy rate was 11.0. Mr. Burdette stated that he has a feeling that some of that might be due to some of the flipping of apartments to condos which has been occurring for about the last year. Mr. Burdette indicated that 75.9 percent were owner occupied units. The average household size on an owner occupied unit is 2.6 percent. The average household size of a renter occupied unit is 2.04 percent. The average of all combined is 2.46. Mr. Burdette indicated that one of the main reasons for doing the special census was to generate more revenue for the Town of Mount Pleasant. For state shared revenues based on 59,104 residents the Town would get an additional $1,533,749.00; which is an increase of $237,133 annually. As the Town receives this increase over the next five years, the Town gains approximately $1.1 million from the special census over that time. When looking at what the Town paid for the special census versus what the Town will gross, the Town would net gain $397,000 over a five year period of time which is a profit for the Town’s investment. Due to the new census the Town will receive approximately $1.9 million in additional local option sales tax. Most of that is going to go to rolling back property taxes. Mr. Burdette indicated that this benefits the tax payer by having done the census. Staff would ask that the Committee consider recommending this census for adoption by the Town of Mount Pleasant.

Mr. Smith asked why the 19-35 age groups were left out of the graph which the Committee was provided.

Mr. Burdette stated that he was not sure of that answer. He added that there was nothing intentional by that and staff would provide a graph showing that information. He thanked Mr. Smith for bringing that to his attention.

Mr. Bustos stated that he felt it would be helpful to know where the age groups of 19-35 years is because they are the ones that go off to college and he would like to know if they come back to work.

Mr. Bustos made a motion to recommend to Council the approval of the new census; seconded by Mr. Smith. All present were in favor.

7. Discussion of conversion of rental apartments to individually owned condominiums

Mr. Gawrych indicated that he asked to place this item on the agenda simply for sake of discussion by the Committee and staff. He stated that he was aware that Mr. Burdette had Mr. DeMoura doing some work on this. He stated that he wanted to make it clear that he was not trying to get into the business or economics of this; he was simply looking at this from the Town’s perspective. With everything that has happened with the conversion of all of the rental units over to condos, what does that mean to the Town. Mr. Gawrych stated that he was not aware of what apartment complexes were even left in the Town.

Mr. Smith stated that he felt it has always been broken out as single-family versus multi-family.

Mr. Burdette stated that the Town does not count Townhouses. They do put apartments and condos together but townhouses are counted as single-family.

Mr. Gawrych stated that if all of the apartments are being converted then they start to talk about the projected services. He reiterated that he simply wanted to put this forward for sake of discussion.

Mr. Bustos stated that there was an article in the newspaper regarding this matter and one of the quotes in the article was “that it was not a problem because it offered an alternative for people at a lower cost”. He stated that some individuals can not afford a down payment when they are right out of school. At some point many people have to rent and work until they can build up enough money for a down payment and then buy something.

Mr. Smith stated that from a public services stand point and talking about garbage services, when the Town was faced with the prospect of having to provide garbage services to certain condos, the Town stipulated that they had to meet the same criteria as single-family homes with respect to the ability to pull their cans to the street. Mr. Smith stated that approximately 40 percent could comply and about 60 percent could not. If they meet the criteria then the services would have to be provided and if they did not they would have to continue on the way they are.

Mr. Gawrych asked if staff felt this would change the Town’s demographics on the next five or ten years or does it basically remain the same when converting from apartments to condos. He asked if it was the same type of people with young children.

Mrs. Farrell stated that the ratio currently is 75 percent single family to 25 percent multi-family. She added that from the planning standpoint they are not seeing any new apartments come this way. Even the new apartments under construction are converting prior to being built.

Mr. Burdette stated that it would appear that a lot of these new condos are being bought by investors who are then renting them out, so in effect the Town is having apartments and if that is the case the demographics really do not change. He stated that he felt there needed to be some research done on this matter.

Mr. Gawrych stated that when converting over to condos they are going in and knocking out walls to make them a little bigger and then they turn around and rent them back and that price has to be much higher then the price being paid before.

Mr. Burdette indicated that from what staff is telling him there is not a lot of changes in the conversion.

Mr. Smith stated that he felt one thing that needs to be remembered is that Mr. Young has been telling Council all along that they can not specify ownership on anything.

Mr. Gawrych concurred.

Mr. Smith stated that he felt this was a good conversation in regard to the demographics. He added that he felt the other thing that was much more important then this and is occurring much more frequently and has a larger impact on the community and government is the business of converting golf courses.

Mr. Bustos stated that the other part of flipping from condos to apartments is the 6 percent assessment.

Mr. Burdette stated that unless the owner lives in it, it is a 6 percent assessment rate on the property. The best thing about this is when they convert from apartments to condos there has to be an assessment done of that unit and that goes on the tax rolls as an individual unit. He added that he believes that the Town should benefit from that in the long run. He suggested that he would think that 100 individually owned condos are worth more then 100 apartments.

Mr. Smith stated if Mr. Burdette is correct and the condos are being bought by investors then the 6 percent does not change.

Mr. Burdette concurred and reiterated that a new assessment is conducted or other wise the Town would be waiting seven years to get that assessment done. Mr. Burdette stated that he felt it would be interesting to speak with some investors and ask them what they think the vacancy rate really is for rental units and for condos. The condo market is going out the roof.

Mr. Gawrych stated that he is not concerned but he is completely baffled by it and would like to talk about it.

Mr. Bustos stated that if this is where people are buying and then turning around and renting and people want to live here but the rent is so high that all they can afford is the rent for an owner who might live in Charleston or North Charleston so that money leaves the Town and the resident who is here does not have a lot of disposable income to spend in the community. He stated that he felt the Town needs to keep more of that here.

Mr. Gawrych stated that he was not trying to create any additional work he just felt this was something they could keep an eye on.

8. E-commerce fees and associated costs

Mr. DeMoura stated that in December the Committee discussed this topic during the mid-year budget deliberations. The Committee had asked staff to come back with an assessment of the project. He stated that the project its self works well, the transaction flow works, the security works, and most importantly the funds end up in the bank account more timely. What does not work so well is that the participation rate is not where staff would like it to be. Staff feels that in order for this program to work at a level that staff would like it to, they would need the participation to go up. Around all of this is the question of who should bare the cost of E-commerce in the Town. If the Committee believes the best course of action is for the Town to bare the cost, then the Town is looking at about $25,000 a year. If the Committee feels the cost should be born by the consumer then the Town would stick with the convenience fee currently in place. If the choice was for the Town not to bare the cost then staff would be limited to the E-commerce project being on-line only because the Town is not allowed to pass on the cost at the window during the point of sale. If the Committee feels it is in the best interest of the Town for the Town to bare the cost, then staff is prepared to move forward in expanding this project into other areas.

Mr. Burdette asked if staff had checked with an area such as Aiken, who has been conducting this type of program for a while and seeing if they charge.

Mr. DeMoura indicated that he did not check with Aiken. He added that he did check with Charleston County and some of the other more local areas and they do not charge and they do have much better participation rates.

Mr. Smith suggested that he looked at Colleton County and they charge three percent of the total tax bill in order to pay online. He stated that he felt that was a lot to pay. Mr. Smith asked if staff had gotten down the balance of the cost passed on to the consumer and the cost of the Town having this available.

Mr. Burdette stated that this is a convenience for the consumer. He does not feel there will be one more person participating in Recreation because of E-commerce.

Mr. Smith asked if this costs the Town.

Mr. Burdette responded in the affirmative.

Mr. Smith asked if the Town had advertised the convenience.

Mr. DeMoura responded in the affirmative.

Mr. Burdette stated that it would appear that the participation in E-commerce in the recreation area is not what it could be because of that charge.

Mr. Bustos asked what the charge is.

Mr. DeMoura indicated that it is $3.00. He added that it should be noted that when the Town first came out with the service, there was a period of time where the Town was unable to charge the $3.00 fee due to some technology issues and in that period of time the participation rate was what was expected at approximately 15 percent, it was only after the three dollar convenience fee was added that the participation rate dropped.

Mr. Gawrych stated that Mount Pleasant Waterworks really pushes for their customers to use on-line services. He asked if anyone was aware of what their cost was and what the participation rate was.

Mr. Burdette stated that he did not think the Waterworks charged.

Mr. Bustos stated that they do not charge a fee. He stated that he uses the system and he feels it is great. He stated that he feels the extra two or three dollars is a great turn off. He feels if the Town truly wants this to be something that residents use then they need to get rid of the fee. He added that he feels eventually the Town will make up for the cost.

Mr. Burdette concurred.

Mr. Summerford stated that they are currently taking a poll of what agencies use on-line registration, what they charge, and what is their record of percentage of individuals signing up. He added that the participation rate from last July to now is 3.79 percent on-line out of 21,305 people. The Recreation Department is trying to narrow it down through advertisement and he feels that he has it isolated to the fact that many do not participate because of the fact of the fee.

Mr. Bustos stated that he would think if individuals could stay home and not have to resort to their automobiles, from a traffic standpoint there is some synergy there.

Mr. Smith stated that if all the businesses are doing this with no charge then obviously they know something the Town does not. He stated that he would have to go along with no fee for the service.

Mr. Gawrych asked if the cost to the Town would be roughly $25,000 a year.

Mr. DeMoura responded in the affirmative.

Mr. Gawrych asked if stormwater had been incorporated into this.

Mr. DeMoura responded in the negative.

Mr. Gawrych asked if that would change the fee.

Mr. DeMoura responded in the negative.

Mr. Gawrych asked if that fee covered what it would cost to operate the system.

Mr. DeMoura responded in the affirmative.

Mr. Bustos asked if this would allow court to participate.

Mr. Burdette indicated that eventually they would be able to.

Mrs. Jernigan stated that part of the issue is does the Town also want to take credit cards at the window beyond just limiting it to being on-line.

Mr. Smith stated that they stand a better chance of collecting on a credit card then on a check.

Mr. Bustos asked if a person could work on a payment plan with Court.

Mrs. Phipps responded in the affirmative.

Mr. Bustos asked if Court could take a credit card and be done with it and let the payment plan be between the individual and the credit card company.

Mrs. Phipps stated that she felt it would be better and they may get a better collection rate.

Mr. Burdette stated that with the cost of tickets this would be better for someone instead of coming in with cash.

Mr. DeMoura added that what would be seen in the budget for next year is the cost associated with not only doing away with the fee but the cost associated with expanding it throughout other services in the Town.

Mr. Smith asked what a convenient dropping point for the fee would be.

Mr. DeMoura stated that he would have to get with the recreation department.

Mr. Summerford stated that the Recreation Department just finished the big registration period and they are now into late registration, so summer would be the next one.

Mr. Smith asked if staff would like for the Committee to recommend a date to stop the fees.

Mr. DeMoura suggested that if acceptable with the Committee, whenever it is best with Recreation would be the time to do away with the fee.

Mr. Gawrych suggested letting staff make the decision on the timing.

Mr. Smith made a motion to recommend to Council to discontinue the on-line fee for payment of bills or registration and that the fee would stop at the appropriate time as determined by staff; seconded by Mr. Bustos. All present were in favor.

Mr. Bustos made a motion to ask staff to put together all the other parts of the Town administration that would benefit from an automated program and have that information ready for the budget process; seconded by Mr. Smith. All present were in favor.

Mr. Bustos added that he has been going through web sites and there are some towns that allow citizens to apply for permits online and pay for it.

Mr. Burdette indicated that the Town would reach that point. He stated that the bottom line is that anything a person has to pay the Town for should be able to be done online in the future.

9. Rifle Range Road/Myrick Road power line undergrounding project

Mr. Burdette stated that when staff began discussing placing power lines underground with Council, SCE&G gave the Town an estimate of approximately $110,000. This was for an area from Myrick Road out to 703. The Town had them do a work up on it and now they have come back and indicated it is $220,000 which is double what it was. The Town’s share of that is probably close to $110,000. Staff, in respect of trying to protect the live oak trees, from a practical stand point believes that it would make more sense to take that $100,000 and buy 200 oak trees of four inch caliber and start a program of planting them where possible in the Town. Then the Town would have 200 more oak trees to serve the next generation of Mount Pleasant residents.

Mr. Gawrych stated that a former committee member brought this before the Committee and he understands the reason and the Town looked at some places and in some areas it does work. He stated that he feels this is way past the scale and he agrees with Mr. Burdette.

Mr. Smith stated that he believes the objection to the power lines was the Y cuts on the oak trees. If that could be put aside then he does not know that the Town has a problem. He added that he feels the expense of this is far too high to worry about undergrounding, especially if they can improve the look of the Town by planting more trees.

Mr. Burdette stated that staff would like to do a survey on Mathis Ferry Road. Staff believes that there is right of way as well as willing private property owners on the opposite side of Mathis Ferry Road from where the power lines are, where the Town could plant 25-30 live oak trees, which in 25 years would be of significant size and would not interfere with tree trimming. Staff does not see that there is anyway that the Town has the funds to address many of the areas of the Town which complaints are received about.

Mr. Bustos asked if there was not a way, over time, instead of taking the notch out of the side that the trees would be pruned from the bottom up rather then cutting a slice out of the side.

Mr. Bernard stated that what Mr. Bustos was describing was directional pruning. It depends on where the tree is relative to the lines. There are a lot of different variables. He stated that if he was asking with the intent of having SCE&G do this he does not see that happening because the frequency at which they prune is to sporadic.

Mr. Burdette indicated that that was part of the problem, SCE&G is trying to do this economically, and it would nice if they could come and trim every year.

Mr. Bernard suggested that the schedule is that they are scheduled to come every five years but it turns out to be about six.

Mr. Bustos stated that he felt they take the slice out of the wrong part of the tree.

Mr. Bernard indicated that they are cutting a void and that is where the sun is going to come in and that is where they are going to grow towards.

Mr. Bustos stated that if they would under cut a little and leave the canopy on top alone then what is under will not fill in as regularly.

Mr. Burdette stated that there are some trees that could be done with but they would have to go tree by tree.

Mr. Gawrych stated that they are trying to eliminate anything that could take down a line.

Mr. Burdette stated that staff did not want to be in the position of arguing on the behalf of SCE&G or Berkeley Electric.

Mr. Bustos stated that it seemed like there is a better way to do this.

Mr. Smith asked if there are enough funds to be able to plant the oaks.

Mr. Burdette responded in the affirmative. He added that staff’s plan is to come back with a plan to show where they feel they could really start a new generation of trees.

Mr. Bustos asked if staff was suggesting taking down the trees on the side.

Mr. Burdette responded in the negative. He stated that this would be in addition to that.

Mr. Gawrych asked what the price of a four or six inch live oak is.

Mr. Bernard indicated that if they are bought in quantity then they could get them at about $325.00.

Mr. Gawrych asked if the conditions were ideal, how big an 18 foot tree would be after 20 years.

Mr. Burdette pointed to a tree on the facility and indicated that it was planted in 1991.

Mr. Smith made a motion to recommend to Council approval of the tree planting plan that is being advanced by staff and that the funding would be provided out of the Tree Bank Fund in place of the Myrick Road project; seconded by Mr. Bustos.

Mr. Burdette indicated that staff will bring any valid project forward to the Committee where staff feels they can spend some money to put power lines underground. Staff is not suggesting that they completely abandon putting power lines underground to save trees.
Mr. Gawrych called for the motion.

All present were in favor.

Mr. Gawrych stated that he was aware that Banks Construction was moving ahead with the medians on Highway 17 and he wondered if the Town was in control of what would be planted there.

Mr. Burdette responded in the affirmative.

10. Adjourn

With no further business to be discussed the meeting adjourned at 1:55 p.m.

Respectfully Submitted,
Dionna L. Ebeling.
020705