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

Present: Paul Gawrych, Chair, Joe Bustos, Kruger Smith
Absent: Larry Carr
Also: Thomasena Stokes-Marshall
Staff: Mac Burdette, Colleen Jernigan, Eric DeMoura, Ed Barbee, Melinda Turner


Mr. Gawrych called the meeting to order at 10:30 a.m.

1. Approval of Minutes

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

2. Discussion on In-Lieu of Taxes calculation regarding Mt. Pleasant Waterworks

Ms. Jernigan said that last year the Waterworks had asked this Committee to recommend to Council to amend the formula that is used for calculating their fee in lieu of taxes. They felt they had certain properties that were non-tangible, such as water rights, that was included in the formula for the fee and they felt the calculation should not include that. The Committee agreed and recommended this to Town Council and they approved the change in the formula. When looking at it this year, several other things occurred such as reassessment and the Town dropped their millage rate. Reassessment does not affect the Waterworks property value because, it is the independent auditors that determine the value of their properties because Waterworks does not pay taxes; they are like the Town. With all of this in mind, it appeared to Ms. Jernigan that the fee had dropped substantially more than what everyone would have believed was reasonable. The fee was $67,000 two years ago, and when the formula was adjusted, it went to $48,000 and staff had thought it would be $45,000 this year; however, after using the new formula and the values that were in the audit listed for properties and after rolling back the millage rate, the fee was closer to $35,000. In looking at it she realized that when she gave them the credit for the local option sales tax, basically, we were giving them a 100 percent credit, by that she means that whatever the total value of their property was we used 100 percent. The fee itself is calculated on a percentage of the budget for public services, administration, legal services and so on. When calculating the percentage, the Town collects 65 percent of what is equivalent to the property tax but was giving them 100 percent for the local option sales tax credit. She believed that it should be 65 percent and when using that number the fee is closer to $41,000.
Ms. Jernigan submitted that to Mr. Pierce and Mr. Duffie of the Waterworks and showed the comparison of how it is calculated. Their staff agreed with the position that Ms. Jernigan took and is agreeable that she present it to the Committee and ask that their formula be modified again to bring it more in line with what their expectations were, relative to the appropriate fee that they should be paying. She provided the Committee with a copy of the formula for the fee calculation. She asked the Committee to recommend to Council that we amend the formula as suggested by staff.

Mr. Bustos moved to recommend to Council that they approve the new tax calculation formula for the Mount Pleasant Waterworks. Mr. Smith seconded the motion.

Mr. Smith said that he believes that it is appropriate that it should be done this way. Waterworks treats the Town as if it were a business, we have to pay water and sewer just like any other resident and the Town does not receive a discount; therefore, we should treat them in the same manner.

Mr. Burdette said that the City of Charleston receives $1 Million per year from the CPW.

Mr. Bustos asked if they had the same relationship as the Town of Mount Pleasant has with Waterworks.

Mr. Burdette responded in the affirmative.

Mr. Gawrych called for a vote. All present were in favor.

3. Approval of PRT Grant application for printing Sweetgrass Basket Brochures

Mr. DeMoura said that every year at this time staff approaches the Committee with a grant application to reprint the sweetgrass basket brochures. The grant amount that staff is requesting is $5,000 and there is $2,500 budgeted this current year for match requirements in the hospitality tax fund. He asked for the Committee¡¦s approval to apply for the grant. The brochure speaks to the historical and cultural significance of the sweetgrass basketry and there is a place on the back of the brochure where the basket maker can sign it and give it to the person that is purchasing the basket.

Mr. Bustos asked if it were included on the brochure that it is now the state handicraft.

Ms. Stokes-Marshall responded the state¡¦s bill was just passed.

Mr. Smith asked if it was designated as a sweetgrass corridor, and the Town does have a sweetgrass basket ordinance that does not have any ¡§teeth¡¨ in it to try to protect the sweetgrass basket makers. He said that it states that ¡§you will provide the space on US 17 in front of your property for sweetgrass basket makers to set up their stands.¡¨ He said that he believes that the Committee needs to readdress that issue.

Mr. Gawrych said that he was not aware of that ordinance.
Mr. Smith pointed out that ATAC has approved a grant for the Sweetgrass Festival and it is also looking for a space to display sweetgrass baskets at the Visitor Center. He said that this has become very important for the Town of Mount Pleasant to be the sweetgrass capital of the world. He said that at the ATAC meeting it was noted how the Town can help to protect the sweetgrass basket makers from others selling ¡§knock off¡¨ products. He said that he believes that the sweetgrass makers are looking into that issue. He said another issue that was discussed was the availability of sweetgrass to make the baskets. He said that the Town owns the island that is just off of Etiwan and suggested that the Town could look for a grant to plant sweetgrass there as a sweetgrass harvesting area.

Mr. Burdette said that one of the problems with that island is how to reach it.

Ms. Stokes-Marshall said that she would like to respond to some of the issues Mr. Smith mentioned. She said that the availability of sweetgrass has been a concern and asked if there are any places that can be looked at locally. She said that she attended a meeting where there was some discussion on this subject and was told that at one time Clemson University was working with some people to cultivate the sweetgrass in certain areas, and that is going well. However, what has occurred with that is that the people who are in the business of selling the sweetgrass plants sell them to people who want to grow it and therefore, the locations where it is grown is not available for the actual basket makers so they can purchase it. The other thing Mr. Smith mentioned was the authenticity of the original sweetgrass basket makers. She said that she was told by one of the basket makers that she had been on Kiawah Island and there was a person there with a sign stating that they were selling sweetgrass baskets, and that was far from the truth. That person was going to go back and take pictures of that location; therefore, it does exist.

Ms. Stokes-Marshall said the basket makers are looking at the right-of-way and one way to approach it is to possibly work with the Town and the County and with the developers so that there is a dialogue that can be developed between those entities, whereas the basket makers can be involved in that decision making process where there could possibly be a negative impact on their stands or where the sweetgrass grows. In reference to the brochure she understands that the Governor did or is in the process of signing a bill to designate the sweetgrass basket as the state art craft. She believes it is a very positive move to boost the sweetgrass heritage culture in the Town of Mount Pleasant since this area has been designated with the largest percentage of descendents from the original sweetgrass basket makers living in the Mount Pleasant and East Cooper area.

Ms. Stokes-Marshall said that she would like to ask staff that when they reproduce the sweetgrass brochure in the future if ¡§art craft state¡¨ can be included on the brochure and to consider including on the brochure that the first Friday and Saturday of June is the time for the Annual Sweetgrass Cultural Arts Festival.

Mr. Smith said that that bill was submitted by Representative Chip Limehouse the local representative.

Mr. Gawrych said that was originated by the children in Mount Pleasant.
Mr. Smith moved to grant the right to apply for the PRT grant relative to the printing of the sweetgrass basket brochures. Mr. Bustos seconded the motion.

Mr. Gawrych asked staff for a copy of the ordinance Mr. Smith referred to be place in his box.

Mr. Gawrych told Mr. Smith and Ms. Stokes-Marshall he would be pleased to help by putting the item on the agenda of a Committee for finding a designation for the sweetgrass basket in the Town.

Mr. Smith said he was not sure what Committee it would be, since it was different in the past.

Mr. Burdette suggested that it would be the Planning Committee.

Mr. Smith asked the Chairman if the Committee could ask if staff could put it as an item on the Planning Committee today.

Mr. Gawrych suggested he could ask staff at any time.

Mr. Burdette responded he would do as the Council member wishes.

Mr. Gawrych called for a vote. All present were in favor.

4. Approval of Tourism Marketing Partnership Program Grant application for Sweetgrass Festival

Mr. DeMoura said that the Town is in partnership to put on the Sweetgrass Festival and together are applying for a grant from the Tourism Marketing Partnership Program (TMPP). In total the grant they would apply for is $23,500, which would require a 50 percent match of $11,750, which would be paid by the Sweetgrass Cultural Festival Committee. There would be no Town funds expended for this grant.

Mr. Smith suggested that the ATAC Committee has recommended $8,000 for this event.

Ms. Stokes-Marshall said that there is a difference and explained that the $8,000 requested from ATAC is for the festival in 2006 which will occur on June 2 and 3, 2006. This grant is for the 2007 festival.

Mr. Bustos moved for approval of the grant application. Mr. Smith seconded the motion. All present were in favor.

5. Property acquisition request by citizen

Mr. Burdette referred to a letter distributed to the Committee earlier from a gentleman that went to see the Mayor regarding property that he owns, which is adjacent to where Remley¡¦s Point Pier is going to be constructed as approved as a result of the development in that area. He said that it has not been confirmed whether that property belongs to this gentleman, but Mr. Ford is looking into it. This gentleman said that since it would have such a major impact on his lot he would like to sell this lot to the Town. Mayor Hallman asked Mr. Burdette what to do regarding this issue. He indicated that it was not his position to agree or disagree and that only Town Council can make that decision. The owner of the lot is asking $1 Million for the lot.

Mr. Bustos said for clarification, the gentleman owns the lot next to the public access where the dock will be and he wants the Town to purchase it for $1 Million.

Mr. Burdette responded in the affirmative.

Mr. Bustos moved to recommend to Town Council that the Town not acquire this particular property from this gentleman, at any cost. Mr. Smith seconded the motion. All present were in favor.

6. Review Business License ordinance for republishing

Ms. Jernigan noted that every year at this time staff has to request the Committee to direct staff to republish the requirements for the business licensing ordinance so that it will be ready to be sent out in the renewal packets in June. This year there are no recommended amendments for the Committee to consider; however, at yesterday¡¦s Annexation Committee meeting, they moved to recommend to Council to add an incentive for existing businesses that would annex into the Town for a full year or a partial or a prorated year. If Council should authorize that proposal, staff will integrate that text into the manual so that when it is sent out it will include that incentive.

Mr. Bustos moved to direct staff to move ahead with the publishing of the Business License Manual for 2006 ¡V 2007 business licenses. Mr. Smith seconded the motion.

Mr. Smith said that in the past the Town has tried to balance our fees with others and asked Ms. Turner if there is anything such as this incentive that is on the horizon.

Ms. Turner responded that staff will be considering updating the classification system again because the adoption of the North American Industry Classification System does its update every five years on a national level and therefore, staff will be studying that coming forward. She said that it appears that what they have done is to give more descriptions of activities in the technological areas.

Mr. Smith asked if the issue with respect to the way that the Town deals with realtors, whether they are independent employees or have an agreement with a company, and who is responsible for the business license been settled.

Ms. Turner responded in the affirmative. She said that several years ago Council made the adjustment of some language that means that the real estate company pays for the licensing for all of their agents. She said that it is easier to administer for both the real estate companies and the Town.

Mr. Gawrych said that since he started his business two years ago he finds himself doing business throughout the state and it is a pleasure to come into Mount Pleasant to get a business license. He shared a story in which he called the City of Charleston regarding a check he sent in late January for a business license when it was due. The person responded that there were three in-boxes full of mail for business licenses; therefore, Mr. Gawrych had the option to go to the City of Charleston, stand in line and pay for it and when the City receives his check they will tear it up, or he could wait for the license.

Mr. Smith agreed with Mr. Gawrych and said that the Town has had the least repercussions with this department than any other. He said that over the years he believes that there have been only four contested appeals.

Ms. Turner thanked the Committee members and said that she would pass this onto her staff that they would be pleased to hear it.

All present were in favor.

7. Review of Mount Pleasant/County Services

Mr. Gawrych said as Chairman of this Committee, he asked that this item be placed on the agenda. He said that five or six months ago he had it on the agenda to start looking at some of the services the County performs and those that the Town performs and wanted to discuss duplication of services. He said that Mr. Smith often talks about the people in Colombia, and more and more he has been talking about the people on County Council. He said that he does not want it to seem that he is the ¡§little boy that cried wolf¡¨ but he has been taking in the situation with Charleston County Council as an elected official. He said that as the Committee is aware, the dynamics has changed dramatically with County Council when a judge stepped in and said that there would be single member districts. He said that the Town picked up some additional representation. Out of the nine representatives on County Council there is one designated for all of East Cooper and there is another who has a part of the population with the City of Charleston. He said that for a Town of 60,000 people it is treated like a ¡§little red headed step child¡¨. He said that now there are single member districts, these people now have this wonderful protected turf and they represent their people. He said that he and Mr. McKeown met with Mr. Wallace when he was still in office as well as Mr. Fava. He said they discussed US 17 north and the corridor and both gentlemen said (palms up) that they represent a district and that they are just one person and that is all they can do.

Mr. Gawrych said that was the beginning of things and he is quoting everything that took place. He said everyone knows the history of how hard everyone in the Town worked to get the half cent sales tax passed. Now everyone is aware of the situation that is going on and the complete misunderstanding of County Council¡¦s interpretation of the half cent sales tax revenue, and the County Council before this one, and what the Town agreed to. He said that it is a mess and referred to the last letter that Mayor Harry M. Hallman, Jr. wrote to Mr. Stavrinakis, the Chairman. He said that coupled with all of these things, he asked Mr. Burdette and Ms. Jernigan to get some information and examine it. The information was distributed earlier and was in regard to police protection, fire protection, and how the Town arrived at those, and what the Town¡¦s value, property tax wise is, and could one put that into prospective County wide. He asked the input of the Committee, as well as Ms. Stokes-Marshall who was also present.

Mr. Gawrych said that four years ago he wrote a letter to the editor regarding forming a 47th County and becoming Wando County, which Mr. Arthur Ravenel liked and wanted to pursue. He said that he would like to come across as an individual that is deeply concerned with the situation and that he sees it becoming worse and worse. He said that over 100 years ago the Town of Mount Pleasant was members of Berkeley County, and that in itself would be much easier, if it got down to that.

Mr. Burdette said that he had some statistics for the Committee. He said that the Town of Mount Pleasant has 20 percent of the population based on the most recent census. If one combined the three municipalities together, the Town has close to 80 percent of the population in three municipalities, which should send a message but seems to be lost on County Council. Currently the County provides six major services to the Town that does not have a fee directly collected from the residents of Mount Pleasant. For example a fee being collected is for disposal of solid waste. The County does that for all the municipalities in Charleston County, but all pay a residential fee for that service and business also pay a fee. He said that he is not listing that as one of these services. He said that the Town does not pay a fee for the following:
„X Limited drainage work
„X The Library
„X The Court
„X The detention center - He said that it is his understanding that the County is considering charging all of the users of the detention facility a fee in the next year.
„X Mosquito Abatement
„X Paving management for CTC

Mr. Burdette said that the County would argue that the Sheriff is always available for the Town if he was needed and there is no direct fee paid for that service. The County provides EMS, but when EMS is called and someone is transported, one pays a fee for that service. He said that the County collects the Towns taxes and there is no fee associated with that. They collect the hospitality taxes, and he will address that item later.

Mr. Burdette pointed out a book on the table that the County compiled explaining what the County does, and how they do it, etc. He said that it contains statistics regarding the services to all of the municipalities in Charleston County. He said that they broke it down into limited services, moderate services and extreme services. He said that the Town is in the limited services with Charleston and North Charleston. He said that the municipalities at the extreme end would be Awendaw, which has no service capabilities and the County has a long list of services that it provides. In the moderate category would be the Isle of Palms, Sullivan's Island, Folly Beach, etc. He said that if one looked at the services provided in the extreme services it is quite lengthy and they do not pay anything more other than their taxes that everyone else pays. He said that there clearly is an inequity and this book recognizes that. He said that the County could say that if Mount Pleasant wants the County to provide police protection, fine, but the Town would have to pay for that service. He would suggest that they do the same with Awendaw in that regard. If Awendaw wants police protection and they want to be a town and they want to contract with the County for police protection Awendaw ought to tax their residents and pay for the police officer. The County says they would only provide Awendaw police services based on what the rest of the rural County is getting, no more or no less. He said that if someone lives in a rural area north of Awendaw you would get the same police protection that Awendaw gets and if Mount Pleasant wants that, the County would be pleased to give us that one officer that rides around every eight hours, but they do not charge for those services.

Mr. Burdette stated what the Town of Mount Pleasant does for the County.

„X Twenty percent of their general fund budget is paid for by real property taxes, and personal property taxes collected from residents and businesses in Mount Pleasant.

Mr. Burdette said that he could not tell the Committee what the percent is for all of the County¡¦s different budgets, because they break their budget down in different categories. Of the general fund, 20 percent comes from the residents of Mount Pleasant, which corresponds with the population. He said that Mount Pleasant contributes more to the general fund budget in property taxes than the City of North Charleston according to the book. He said he finds that interesting since they are larger and have light industry and heavy commercial areas. He said that when you try to tell the County Council to be kinder to Mount Pleasant they need to look at what the Town means to their budget. He said that he has not had the opportunity to do an analysis yet, but when one looks at the growth and the assessed values over a period of time you would see that Mount Pleasant¡¦s growth and assessed values has been very high as compared to most of the areas of the County, which means that the Town is a growth engine for the County¡¦s economy and ultimately their budget. They ought to be working with the Town in order to cultivate that economic engine which helps fuel their service. He said that the City of Charleston¡¦s growth has been in Berkeley County.

Mr. Burdette said that the Town has a police service contract and they pay the Town approximately $95,000 for that service. He said that the Town sought that contract because there were pockets in the County that were drug havens, and the County could not provide the surveillance necessary to eradicate the drug problem and crimes of certain areas within the Town¡¦s borders. He said that the Town went to the County and said that we would take over that area and at that time we needed three officers to be able to do that and at the time the Town came up with a figure and wanted to give a figure they would think was fair. He said that it has worked well for the Town.

Ms. Stokes-Marshall asked Mr. Burdette how many officers for that area are needed.

Mr. Burdette responded that it is not done that way, when the Town does its precinct they just draw the line to include those unincorporated area.
Mr. Gawrych asked if the Town could produce dwelling units if necessary.

Mr. Burdette responded in the affirmative and could provide calls for service as well.

Mr. Burdette said that the County pays the Town $145,000 per year for fire services. He said that there is an East Cooper Fire District where they collect the tax and is done with the Awendaw fire district. The maximum is 40 mils that could be charged under state law for special purpose tax district and they are well below that. He said interestingly they are paying the Town $145,000 and the taxes accrued from the 23 mils levied are only approximately $118,000; therefore, they are actually paying the Town money out of the general fund of the County for fire services. He said that the Town used to have individual fire contracts twenty years ago and it was a mess, and caused public relations problems for the Town, and CNN actually filmed a house that the Town let burn down because it did not have a contract.

Mr. Smith said that decision was made by the Mayor at that time.

Mr. Burdette said that it had to be done because it was the only way to get their attention and it worked. He said that the County could not provide the fire protection and could not generate enough taxes from that area to create a fire department and asked the Town of Mount Pleasant what would it take for the Town to do it. He said that the Town calculated a figure. He said what it does on the reverse side is that it eliminates one of the Town¡¦s tools for encouraging someone to annex into the Town who is in that East Cooper fire district because they have the fire service. He said that the Town calculated the taxes it would have received from those properties if they annexed into the Town and it did not equal $145,000 at the time.

Mr. Burdette said that one other issue that he wanted to discuss was that the Town signed a contract with the County when the Town passed the hospitality tax for the County to collect the Town¡¦s hospitality tax fee from all of the businesses that are required to pay the fee. He said that the Town does not pay for that service, except for postage and printing costs. He said that it is a good service and that the Town would have to hire at least one person full time, and at certain times of the year would have to dedicate more individuals to that task, similar to stormwater. He said that the County does it for North Charleston, Kiawah, and Seabrook at no cost. He said that Ms. Jernigan received a letter from the department manager who runs that area and said that his intention was to cancel the contract beginning with the new calendar year and caught staff by surprise. Mr. Burdette contacted Mr. Windham via email and his response was that it would ¡§not happen on his watch¡¨. Unfortunately his watch ends in December. He asked why the County was not going to cancel North Charleston and Mr. Windham responded that they actually also collect for North Charleston all their business license fees and that allows them a means to computerize the collection of the hospitality tax as well. With the Town of Mount Pleasant it is a less automated system. He said that they also have an enforcement capability for hospitality, whereas for the Town, Ms. Turner is the person that has to do the enforcement.

Mr. Burdette said that if the Town decided to cancel the police contract the $94,000 would pay for two officers in today¡¦s cost. He said that the Sheriff would go to County Council and ask for more than two officers, whether the Council would approve it or not, he does not know. He said that if they were going to patrol that area at the same level as the Town does they might not, and would patrol it like they do Awendaw, McClellanville and Points South. He said that would go back to the question if crime would increase because there would not be the level of protection that the Town provides. He said that as far as fire protection, he believes that they would increase the millage if the Town dropped the fire district and could provide the same level of fire protection for the East Cooper fire district that they are providing to lower Awendaw, which is one truck on the Isle of Palms Connector on duty at all times. He said whether some of the customers in the East Cooper fire district rise up and say that they lost some of the best fire protection in the United States and are going to pay the same amount of taxes, Mr. Burdette could not answer. He said that the only reason it would make sense to do that would be if the Town said ¡§do not call us if there is a fire, we are not coming.¡¨ He said if the Town is going to back them up the Town would be providing the services anyway, at least the Town would get paid to do that.

Mr. Smith said that currently we provide fire protection, if we go into the position where it falls back to the Awendaw fire district, we do have an agreement with them, but the agreement is that they have to go to the site and determine that they need help and then call the Town¡¦s Fire Department.

Mr. Burdette responded that is what they would do on every major fire; therefore, the Town would be providing the fire service.

Mr. Smith said that the problem is that before they could get down to the fire the house could burn down and the Town¡¦s engine is at the house.

Mr. Burdette disagreed and said that the East Cooper fire district is compact, and they are going to have a fire truck right there on the Isle of Palms connector and they could get to that location as fast as the Town could. He said that he believes that if the Town was going to provide mutual aid to them for the East Cooper fire district area, in effect the Town is providing full service to them.

Mr. Smith asked if the Town did away with the fire protection would they also discontinue the service for EMS.

Mr. Burdette responded that for medical purposes the Town would not respond. He said that he is not recommending anything and frankly does not believe it is the right policy. He said that we are all in this situation together. He said he believes that, staff believes that and for the most part County staff believes that as well. He said we should be mutually supporting each other, looking for automatic aid agreements when possible, contract service, etc. At the same time he believes it should be quid pro quo all the way across the board and he does not believe that it is currently, and does not believe Town Council does either.

Mr. Bustos said that he recalls that it all started with Raven¡¦s Run. The Town was covering them and when we wanted to change the aid agreement, they put one man in a truck down there and said ¡§well, all we have to do is show up¡¨ because they know that one man in a pumper truck could not put out a fire in Raven¡¦s Run.

Mr. Burdette explained that the Town was talking to Raven¡¦s Run regarding annexation and it was all based on fire protection. He agreed with Mr. Bustos that when the County learned what the Town was doing, they put that truck at the Isle of Palms connector. He said that is not an irresponsible thing to do, but from an efficiency stand point, it does not make any sense.

Mr. Bustos said that the only reason that was done was to dissuade the residents of Raven¡¦s Run to annex into the Town, because they said that they did not have adequate fire service from the County so the County put one man on a truck at the Isle of Palms connector in order to force the Town of Mount Pleasant to respond. All the man in the truck had to do was to drive to the scene and say that he could not handle the fire and they knew that the Town would respond.

Mr. Burdette said that thankfully Raven¡¦s Run did not a