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

Present: Paul Gawrych, Chair, Joe Bustos, Kruger Smith
Absent: Larry Carr
Staff: Mac Burdette, Colleen Jernigan, Eric DeMoura, Melinda Turner

Mr. Gawrych called the meeting to order at 12:00 noon.

1. Budget Presentation FY 2006/2007
a. Review of Revenue Projections

Mr. Gawrych asked if the Committee members had reviewed the revenue booklet and had questions of staff.

Mr. Smith moved to recommend to Council that the revenue projection portion of the budget be approval. Mr. Bustos seconded the motion. All present were in favor.

b. General Government

Ms. Jernigan said that there were two issues to note. There are two outstanding items, one is the HVAC contract that is being evaluated and should be finished and an amount known by the May 8th Council meeting, and in a day or so the Fleet contract will be finalized. She said that the only change in this year’s General Government budget was the increase to the election expenses in the event that there will be a need for a second election.

Mr. Burdette said that it appears that the Town will have to have the second election assuming that Mr. McKeown gets elected to the County Council.

Mr. Smith said that he was under the impression that there would not need to be two elections because of the time period.

Mr. Burdette responded that Mr. Young looked at it and the time period is the issue. Mr. McKeown would take office as soon as May 3rd and to go from that point until September 17th there is too much time and under state law the Town would have to have an election in August. Whether Mr. McKeown could delay taking office with the County, Mr. Burdette does not know.
Mr. Smith asked how many days Mr. Burdette was talking about.

Mr. Burdette responded approximately 45 days. He said that if Mr. McKeown was elected to County Council the person that would be elected to replace him would serve out Mr. McKeown final two years. He said that Mr. Carr has mentioned stepping down in July, and the Town would not have to have a special election to fill his position.

Mr. Burdette said that he would have Mr. Young address this issue and send a memo to the Committee.

Ms. Jernigan said that there are only two additional positions under personnel and said that Council has already approved the salary for the Deputy Town Administrator and the Administrative Services Coordinator so the Town can begin to hire another Department Head to fill her seat and she can begin working with that person as well as with the Deputy Director of Administrative Services.

Mr. Smith moved to recommend approval to Council of the General Government portion of the budget. Mr. Bustos seconded the motion. All present were in favor.

c. Non-Departmental

Ms. Jernigan said that for the Non-Departmental Budget there are only two outstanding issues. She is trying to work with the County to try to establish what the Town’s annexation fees will be if we annex property since the Town has to pay them for the lost taxes. She said that approximately $10,000 additional funds would have to go into the account given all of the properties that we have annexed along Hungryneck Boulevard, and last year Whitehall Terrace was not in the fee calculation, but it will be in there this year. The fee also depends on whatever large developments we might annex in the course of the year.

Ms. Jernigan said that she believes that Mr. Burdette had sent all of Council a memo relative to the first Budget Committee of Council meeting for donations to agencies. That is not in the budget and there is another one to be added to the list for Council’s consideration.

Mr. Burdette said the Mr. Utsey and the Mayor asked staff to add Winwood Farms to the list for a $5,000 donation for Council’s consideration.

Ms. Jernigan said that there is approximately $71,000 worth of requests for the Budget Committee to deal with.

Mr. Burdette said that certainly if there are any other Council members that want to add another donation to the list he would gladly notify Council.

Mr. Bustos asked if the ITM was still on the list.

Mr. Burdette responded in the affirmative.

Mr. Smith moved for the Non-Departmental Budget to be recommended to Council for approval. Mr. Bustos seconded the motion. All present were in favor.

d. Impact fee fund

Ms. Jernigan referred to page 2-2 of the budget book for General Government Impact fees under the Special Fund tab. She said that fees would be going toward debt service requirements and has gone toward the computer expansion program and debt service for the fleet maintenance facility; that is in the amount of $97,858. She said that she could do all of the special revenue funds quickly.

e. Open Space Fund

Ms. Jernigan said that the Open Space Fund is on page 2-28, and the Committee received a request from the Foundation. Last year they had requested half of what was left in that fund. There is $27,100 still left, and the Foundation is requesting that the money be disbursed to them within the budget year.

f. Hospitality Tax Fund (ATAC Allotment)

Ms. Jernigan referred to the Hospitality Tax Fund on page 2-12. She said that this is the part that is allocated to the Accommodation Tax Advisory Committee. She noted that in that particular fund this is the second year that the Town has put $104,000 toward the construction of the Visitor Center. At last year’s budget meeting the Committee discussed a two-year plan and this would be the second year for supporting the construction of that facility and next year it goes back toward advertising or could go back to operating expenditures for that facility once that it is built. She said that the total amount for that Committee is $186,411.

g. Special Permit Fund

Ms. Jernigan referred to the Special Permit Fund on page 2-22. This is where the Town helps support some of the festivals that the Town has and uses it in conjunction with the funding from the ATAC Committee. She said we have included the Blessing of the Fleet and referred to the top of the sheet that showed revenues that we take in for that event through this fund and goes toward supporting that event. Also there are the Christmas and Children’s Day Festivals which are also funded in part from this fund. She said that there is a reserve of $100,000 should some other projects arise this year. She said that the total expenditures are $515,210 as recommended from the Special Permit Fund.

h. Accommodation Tax Funds

Ms. Jernigan referred to the Accommodation Tax Funds on page 2-23, 24, and 25. She said that is the Special Project Funds and that will be reviewed by the Accommodations Advisory Committee at their May meeting, and staff will bring that back to the Budget Committee at the May 8th meeting. She said that those funds go toward supporting a few of the positions tied to tourism and all the special funding requests that the Committee receives for special events.

Mr. Burdette said that generally they take issue with Accommodations Tax support for the Christmas Holiday Festival and the Children’s Day Festival. He said that it is up to Council if they do not want ATAC to support those two or they do not want to support it to that extend, it would have to come out of the General Fund.

Mr. Smith said that the ATAC Committee understands that there are things that will be done by Council anyway and they mildly mention it.

Mr. Gawrych noted that he just returned from a trip, when he entered the City of Florence there was advertisements on their billboards and asked if the $47,500 on that page was for one billboard or for two.

Ms. Jernigan responded that the ATAC Committee decided not to continue the billboard program this year. She said that the program expires in May, and said that the Committee wants to look at alternative ways to utilize that money. She said that perhaps when the Visitor Center is completed, the Committee may consider I-95, which they believe would be a better benefit. She said that the philosophy today is that with the growing use of the internet people are making reservations even before they arrive in the area.

Mr. Gawrych said that the City of Florence was bragging that they had 5,046 hotel rooms, and asked if the Town had sufficient rooms available.

Ms. Jernigan responded that the Town of Mount Pleasant has 1,800 hotel rooms.

Mr. Burdette noted that the Town might have an additional 300 in the next two year.

Mr. Smith stated that the Town keeps their hotel rooms more occupied and their rates higher.

Ms. Jernigan referred to page 2-24 which shows that ATAC is supporting the $79,000 toward the debt for the $600,000 in bonds that the Committee approved last year, and an additional $45,000 is the last portion of their cash funding that goes toward the funding of the construction of the Visitor Center. She said that ATAC has $77,000 left to spend on requests for the entire year.

Mr. Smith stated that the ATAC Committee has improved dramatically, the Chair especially, since the start and they analysis the amount of dollars per room night and they are doing a wonderful job. Mr. DeMoura concurred.

Ms. Jernigan referred to page 2-26 which was reviewed by the Recreation Committee this morning and is the fund that has to go directly to the Patriots Point Sports Complex and noted that there is a portion for the bond payment for the widening of Patriots Point Road that is taken out to support the debt service in the General Fund.

Ms. Jernigan referred to page 2-27 which is the Utility and Infrastructure Fund and noted that most of that money goes toward supporting match grants for several projects that have been approved, which is the TEA-21 program and largely for the improvements for Coleman Boulevard and also debt service for the 2002 bond, as well as the debt service for the school auditorium for Wando High School for $75,000 that gets transferred back to the General Fund. She said that there is $276,000 set aside as a contingency that goes toward other projects, should they arise.

Mr. Burdette noted that some of the major discussion that the Budget Committee will have would be regarding some capital projects for Transportation and that would be for the Senior Center, the Track, and Carolina Park first phase. He said that it is the Recreation Committee recommendation but is also entwined with the Finance side of things as the best way to utilize the money. It will take a good deal of discussion because it involves options to be looked at.

i. Donor Fund (Tree Bank)

Ms. Jernigan said that the Donor Fund, which is relative to the tree bank is found on page 2-30, and pursuant to Council’s direction there is $105,500 set aside to develop a tree planting program and then there is an additional $50,000 to use for specific projects that usually have gone through the Public Services Committee and are usually approved at mid-year. She said that the fund also helps support HOA grant requests for landscaping.

Mr. Burdette said that what staff is planning to bring to Council for approve is that they apply for a grant for Mathis Ferry Road to develop a “tree planting plan” for the scenic portion of Mathis Ferry Road. Staff wants to locate spots of land to plant specimen trees that will not interfere with power lines, and will never have to be trimmed so that as existing trees are being trimmed some of these trees will die, but there will be a tree for the next generation that will continue to make Mathis Ferry Road scenic. He said that there may be places for 100 trees on Mathis Ferry Road. He said that the Town will have to use some private property and some right-of-way. That is one of the things that staff wants to achieve this year. He believes that the Town can approach most of the property owners for permission and the Town will contract and maintain the trees.

Mr. Gawrych suggested that for the next generation he hopes that the power lines will not present a problem any longer. Mr. Burdette concurred.

j. TIF Funds

Ms. Jernigan referred to page 2-31, which shows all of the TIF Funds and there are two separate accounts established. She said that there is the original 2001 fund that has the first three series of bonds, and that is the account that is used to service all of the debt requirements. She said that for this year the requirements will be $3.163 Million and the revenue is projected to be $3.4 Million; therefore, staff is holding $5.9 Million in reserve because of the way some of the bonds are structured, the debt service payments are going to be higher in the end years. She said it was done that way for the original bond to allow the fund to continue to grow to help support that debt, instead of being concerned that there were high payments at the beginning and staff was not sure what the growth would be in the first three to four years. She said that the $5.9 Million needs to be held for the debt service in the future. She referred to the bottom of the page, which shows the 2005, 2006 fund that is the one that supports all of the large projects that are being carried forward, the Coleman Boulevard plan, the Waterfront Park, the Municipal Complex renovations, and some of the other dollars for the utility undergrounding and US 17 lighting. She said that currently there is $14,183,000 allocated for capital projects and debt service for this year.

Mr. Gawrych asked if it had been decided whether the Visitor Center would be located at the Waterfront Park.

Mr. Burdette responded that the Council has decided that it will be located in the Waterfront Park but it has not been decided where in the Park.

Mr. Smith said that the Committee formed a sub committee to study approximately four locations for the Visitor Center and came to the conclusion that the Waterfront Park was the best location.

Ms. Jernigan said that today the Planning Committee did vote to recommend that the $1.4 Million be put toward the Coleman Boulevard plan; therefore, that number will be moved out of the reserved or last column into the proposed column.

Mr. Gawrych asked where the Town was currently on the TIF for Carolina Park.

Mr. Burdette responded that many times Mr. Marino has expressed that he would like to establish a TIF in that area to help pay for infrastructure for the economic development portion of the development, and Mr. Burdette’s response was that Mr. Marino could request in writing that Council approve that recommendation, and he would receive a response. He said that if Mr. Marino asked him specifically, his recommendation to Council would be not to approve the request, because the Town cannot afford it because if a TIF was done there, all of the revenue derived from that development will go to the TIF bonds and the Town will not see any of those revenue funds in the operating budget for 25 years, and he does not believe that the Town can afford another TIF and have that revenue taken away from the General Fund accounts. He said that perhaps at a later date, depending on what does develops up there, Council might be able to do it, but he does not believe it is advisable. He added that he was not certain that Charleston County would be willing to do it, and now under state law, they have to sign off on it as well as the School District.

Mr. Smith asked if the Town ends up with more money through a TIF Fund, than they do from general growth.

Mr. Burdette responded in the affirmative, however, the catch is that property taxes that come from the incremental growth that would come to the General Fund for Fire and Police services, etc, now would have to go to TIF projects for up to 25 years; therefore, how is the Town going to provide services to all of those residents. He said that hopefully what would happen is that there will be commercial and industrial developments and that would be like a balance of payments on the federal level where there are more imports to do exports. He suggested being very cautious in considering a TIF.


Ms. Jernigan said that even with the improvements on Coleman Boulevard, those new revenues go to the TIF; while it is helping the Town, it will be 15 years before those increased taxes will go to the General Fund.

Mr. Burdette said that the Town is reinvesting Mount Pleasant’s future with this TIF. He said that it will help a Town Council 15 years from now because it will be a windfall when it is paid off.

Mr. Smith asked if there were any other areas that are predominately commercial where there would not be any private residences.

Mr. Burdette responded that the area has to be undeveloped, or redeveloped. He said that one could do a TIF on the portion of Johnnie Dodds Boulevard that may redevelop in the future, and that would be a logical thing to discuss. There are only two small sections like that on Johnnie Dodds Boulevard.

Ms. Jernigan said that it has to meet some criteria, which includes justifying it as “blighted”. Mr. Burdette said that other than those two small sections, Carolina Park would be the only other area that would apply.

Mr. Smith said that it seems logical that something that will be primarily commercial in any growth would be to the Town’s advantage to seek a TIF agreement.

Mr. Burdette reiterated that the Town would loose that General Fund revenue for up to 25 years, and what could the Town do in the meantime to provide services, - raise taxes? That is what concerns staff, losing that revenue.

Mr. Smith clarified that the Town looses the ability to put the money where it is needed.

Mr. Burdette said that you loose the revenue to the General Fund for 25 years.

Ms. Jernigan said that in three or four years the $623,000 in TIF revenues from the Town is going to be $800,000 coming out of the General Fund.

Mr. Burdette said that if the Town thinks that it is going to be developed anyway, why would the Town want to do a TIF? He said that it would not make any sense, because it is already going to happen. He suggested looking more toward Municipal Improvement Districts for these commercial areas because it does not matter whether it is undeveloped, or developing, or developed. He said for example Johnnie Dodds Boulevard; the Town could do a Municipal Improvement District and would not need to get permission from any of the property owners along that road, excluding residential. As long as it is fair and the Town has a purpose for doing it. For example if the Town wanted to do underground wiring and decorative lighting, put sidewalks and bike paths on all of Johnnie Dodds Boulevard, the Town could do a Municipal Improvement District and tax everyone along that road to pay for that because they will be the primary beneficiaries of it.


Mr. Burdette suggested that if the Town has an area where they wanted to make public improvements that would primarily benefit that area, it would be better to consider a Municipal Improvement District than it would be a TIF, in his opinion. He said just as the Town did with Patriots Point Boulevard and Beaucastle.

Mr. Gawrych asked what percentage of Beaucastle was paid by the Municipal Improvement District.

Mr. Burdette responded 75 percent. He said that the Town started with fifty percent and than went up to 75 percent, just as Patriots Point started at fifty percent as well.

Mr. Bustos said to Ms. Turner that at the airport does the fixed base operator have a business license from Mount Pleasant.

Ms. Turner responded that the actual transportation activity is exempt under federal law, but the other business operating out there get licenses.

Mr. Bustos said that he was at the airport and overheard some discussion regarding the gasoline prices at $4.00 per gallon and said that was a sizable business license.

Mr. Gawrych said that two years ago he was applying for business licenses all over the state as well as the County. He said that when he goes to the office for a license, he was told he has to go to the Planning Department to get zoned, which is a $50 fee, and then went to get the business license, which was less than the zoning. He said that this year there was no $50 fee to be zoned and just obtained his business license. He said he sent in his fee for the City of Charleston and several weeks later was called and advised that he owed them an additional $25 because the County stopped collecting the $50, and they were getting $25 of that fee. He said that he could not even make that up.

Mr. Burdette asked if that $25 was a fee to verify that he is zoned properly.

Mr. Gawrych responded in the affirmative. He said that the County has done away with that and the City of Charleston said that they would collect half of that fee.

Mr. Smith moved to recommend to Council the approval of the special revenue funds. Mr. Bustos seconded the motion. All present were in favor.

Mr. Burdette said that he hopes all the Council members find that there is a good deal in the budget that is of specific interest to them. He said that all members have special things that are close to them and what they want to accomplish for the Town and he hopes that there is something for them to “wrap their arms around”. He said that overall he believes that it is a good budget with many good projects.

Mr. Gawrych said that he hopes that the minutes for the Recreation Committee Budget meeting are very clear, as they usually are, since there were only three members present and there were many issues that were discussed.

Mr. Burdette responded that he believes that area will generate one of the more lengthy discussions.

Mr. Smith said the he and Mr. Bustos weighed in on the portion of the budget on Council pay changes, and asked Mr. Gawrych to read those minutes.

Mr. Burdette said that it was in the budget. He said that this Committee could weigh in on that issue if they wished; however, Council voted to put it into the budget so it does not need to get approval by a Committee and would be discussed by the Budget Committee.

Mr. Gawrych said that the reason he asked was because he thought that it would be opposed.

Mr. Burdette said that if this issue stays in the budget, and Council approves it, it can not take effect until after the election.

Mr. Smith suggested that this issue be made part of the five year Wage and Compensation Study Plan, and if Council has to vote for it separately that would be fine.

Mr. Burdette said that there are some Counties that provide expenses for elected officials, but the Town of Mount Pleasant has never done that. He said that the Council members are probably even more behind the average in the state than the survey actually shows that they are. For example, in Greenville County every Council member has a $20,000 expense account in addition to what they are paid. He said that they can use that money to make donations to organizations without asking Council. In addition the County reimburses the members for travel. He said that this and other Councils have been very conservative.

Mr. Gawrych thanked Mr. Smith for addressing the issue and for the record it has always been know that if you are an elected official and you do not want to receive payment you always have the option of returning that payment to the General Fund.

There being no further business the meeting adjourned at 12:55 p.m.



Respectfully submitted by:
Jeanette La Coppola
Fin Com 04182006