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

Members Present: Paul Gawrych, Kruger Smith, Joe Bustos
Staff: Mac Burdette, Colleen Jernigan, Eric DeMoura, Allen Young, Christiane Farrell

Mr. Gawrych called the meeting to order at 10:55 a.m.

Mr. Gawrych indicated that there was an item appearing on the agenda where by one of
the members of the Committee cannot vote.

1. Approval of Minutes

Mr. Bustos moved for approval of the minutes from the previous meeting; seconded by Mr. Smith. All present were in favor.

2. Valuation for abandonment of right of way - Hallelujah Lane/Ocean Grove Cemetery

Mr. Smith indicated that he was a member of the church and he recused himself from the matter.

Mr. Gawrych stated that he noted for the record that even though the Committee was down to two members they could proceed.

Mr. Young concurred.

Mr. Burdette indicated that members of the Lutheran Church came to the Town and indicated that they needed some additional space for grave sites. Mr. Burdette showed on the map where Hallelujah Lane was located. He added that the problem is that even if the Town wanted to abandon the right of way to the church property the Town could not do it because the Town owns the strip of land between the church property and Hallelujah Lane so they are not abutting Hallelujah Lane. The Town would have to sell or give the piece of property between the two to the church in order to make them contiguous to Hallelujah Lane. One of the questions to this Committee and ultimately Council is are they willing to pass the piece of property between the two to the Lutheran Church. Mr. Burdette indicated that the lines on the map are graves, so with the land the Town would be giving the church the graves.
Mrs. Jernigan indicated that members of the AME Church were buried on the property.

Mr. Burdette stated that he feels that this becomes very complicated when they start talking about having to give up the piece of property between the two. If the Town abandons a right of way it goes to the adjacent property owners for first refusal. If the entire property was abandoned then the Town would have to talk to property owners who use the right of way to access their property. Mr. Burdette pointed to the area on the map that he recommended the Town abandon but leave some public right of way.

Mr. Bustos asked if the property could not be sold to the church.
Mr. Burdette stated that Mr. Young would probably get into the quitclaim discussions. Staff believes the Town owns the entire cemetery but a deed in not in hand. The Town does claim the property. Mr. Burdette asked Mr. Young what the Town could sell.
Mr. Young stated that the Town could certainly put a price on a quitclaim deed; that is not inappropriate. Mr. Young stated that there have been several memos concerning this issues. He added that he did outline in detail what was found on the public record. There is no particular deed to the Town, but when looking at the public record back to the1800’s as a result of the joint resolution of the state, the Town was given certain land in that area and he feels it is fair to conclude that this was part of that land. Since the Town does not have the deed the only conveyance should be done by quitclaim unless the Town does a suit to clear title. Mr. Young stated that he does not feel the Town is interested in doing that, there is a cost involved in that.

Mr. Bustos stated that rather then just abandoning the right of way to the church perhaps the Town could sell it for a designated amount.
Mr. Burdette stated that the Finance Committee’s charge for abandonment of right of way is to recommend a value. The Transportation Committee will discuss whether or not the Town needs the right of way. Mr. Burdette stated that this situation is different because this is the Finance Committee’s responsibility to weigh in on.

Mr. Gawrych asked if the Committee could decide on this or would it have to go to Council.

Mr. Burdette stated that the Committee could make a recommendation to Council or they could say that they do not want to weigh in on it, they want to send it to Council with no recommendation.
Mr. Bustos asked if the point is that without abandoning the part that the Town owns which abuts the right of way can the Town just sell the portion of Hallelujah Lane.

Mr. Burdette responded in the negative and indicated that they would have to do something with the other property. He asked that the Committee keep in mind that there are existing graves and if the land was sold to the church then they were basically selling the grave sites with it. Mr. Burdette stated that he was not aware if there would be any objections. He suggested that Council hold a public hearing to try and find that out.

Mr. Gawrych stated that it could be sold with the condition that it is maintained.

Mr. Burdette indicate that the Lutheran Church would have to maintain the sites just as they are currently done by the Town.

Mr. Young indicated that that could be accomplished.

Mr. Gawrych asked if there was anyone in the audience regarding this item.

Mr. Burdette stated that staff has not contacted anyone relative to this meeting because staff wanted to discuss this with the Committee first because they were aware that they would have to have a public hearing. The Town can certainly sell a piece of property without having a public hearing but staff would advise that the Town have a public hearing regarding this property.

Mr. Young added that the Town is not required but in this circumstance, since it seems that the Town is effecting very sacred grounds, a public hearing could be very important in this matter.
Mr. Bustos asked if the church would be using the property for burial space.

Mr. Burdette indicated that was his understanding. He added that one option would be if Mr. Young could work it out is if the Town were able to sell for some consideration the larger piece than the Town could then figure out a way to convert Hallelujah Lane to burial sites for everyone as the Town has typically done in the past, that might solve any issues that come up.

Mr. Bustos asked if families already own plots on the land.

Mr. Burdette responded in the negative. He added that the Town owns it and the family comes to Mrs. Jernigan and the Town tries to find them a place. Mr. Burdette stated that the Town does not know where all the graves are on the site because many of them are not marked.
Mr. Bustos asked if they could assume that the ones that are marked and occupied have been sold to families and are owned by sections.
Mr. Burdette stated that the Town maintains the land.
Mr. Bustos stated that when the Town sells that they are only selling vacant land.

Mr. Burdette pointed to an area on the map and indicated that it was probably some of the older sections. He added that he is not aware of how that was conveyed to the families for burial because the Town’s records do not go back that far. He indicated which area the Town has conveyed to families.

Mr. Bustos stated that he feels the Town should hold a public hearing so that everyone knows what is going on. He added that he feels the Town should be able to sell the property that is unoccupied, but whoever acquires that property does have to take on the responsibility for care and maintenance.

Mr. Burdette stated that the valuation of the property is very difficult because they are not sure how to value a cemetery. Planning staff who normally works on the value of right of ways has gone through some things but do not have a great conclusion.
Mrs. Farrell indicated that the way the Town typically values the right of way is by reviewing the value of the adjacent properties and come up with a per square foot price. In this particular instance the properties on either side have no tax values so there is nothing to compare it to. Staff did try to find the value of some private cemeteries and after making some calls found that they also do not have tax value.

Mr. Bustos asked if they could just get the price per plot and figure the price that way.

Mrs. Jernigan indicated that the Town sells the plots for $125.
Mr. Burdette stated that could be done. He added that the Town is not trying to make money out of this. He added that the Committee could establish the value that 50 square feet is $125. This would include taking into consideration the area that has already been used. Mr. Burdette stated that when the Committee gets ready to vote that would satisfy the pieces of land where individuals are buried, the next question would be if the Town is able to work that out staff would then come back and talk to the Committee about abandonment of Hallelujah Lane.

Mr. Young suggested that this could be done simultaneously.
Mr. Burdette pointed to the area where staff would suggest stopping the abandonment, which would allow area for parking and access to the two homes.

Mr. Bustos made a motion to direct staff to determine a value of the vacant land on the western side of Hallelujah Lane for the purpose of selling the land to the church and also applying that value to Hallelujah Lane for the purpose of abandonment if the sale is successful to the church up to the limit of the lot that is shown being owned by the Archambo family; seconded by Mr. Gawrych.

Mr. Young asked if the Committee was going to set a public hearing.
Mr. Gawrych suggested just taking care of the first part and coming back next month.

Mr. Burdette clarified that staff would bring information back to the Committee at the next meeting.

Mr. Gawrych called for the vote.

Mr. Gawrych and Mr. Bustos were in favor with Mr. Smith recusing himself from the matter.

3. Valuation for conveyance - portion of lot 130, Atlantic Street
Mrs. Farrell stated that staff started reviewing the tax records to assign a value to the land being discussed. Staff was using a recorded plat, but as they started reviewing the tax records the strip of land in not there. It appears that the strip of what may have been a right of way or alley, now looking on the current tax maps has been shown as incorporated into Mr. Magwood’s property. Mrs. Farrell stated that she can only assume that there was probably at some point in time an error that would have occurred at the assessor’s office that would have abandoned, not intentionally, that strip of land. Mrs. Farrell reviewed a map of land with the Committee. She added that when looking at current tax maps behind the properties that sit between Coral and Atlantic Streets the strip is still there. It appears to be an alley because it is not a 50 foot right of way. Staff would recommend that additional title research be done on this matter. Staff did move forward with assigning the value based on vacant lands in the area, but considering at some point in time something may have occurred staff may need to do additional research.

Mr. Gawrych stated that based on the information provided if staff can take 30 more days and get the information.

Mrs. Farrell indicated that the question becomes who does the title research because that is not staff’s area.

Mr. Young indicated that the title work has already been done. He indicated that the Town, Mr. Magwood, nor the adjacent property owner owns the property. The property is owned by Pioneer Real Estate Company of Charleston. He added that he is still doing research as to who use to own the real estate company. Mr. Young indicated that he has no indication that it has been incorporated, it just does not show on the tax records. Mr. Young stated that if would not be inappropriated for Mr. Magwood, knowing that Pioneer Real Estate owns the property, wants the Town to quitclaim any right the Town might have to the property.

Mr. Gawrych asked if there was enough information for the Committee to place a value on the property.

Mr. Young stated that he felt the Committee could do that.

Mr. Burdette indicated that staff does have a figure.

Mr. Young reiterated that the Town does not actually own the property but the Town could have had a claim and maybe that will help this. He added that Mr. Magwood might have an adverse possession claim against a private company; he would not have it against the Town.
Mr. Bustos asked if the property belongs to Pioneer why would they come to the Town for a quitclaim.

Mr. Young stated that no one knows what happened but the plan might have been to dedicate the land to the Town.

Mr. John M. Magwood, Sr. – Lot 130- indicated that he has had the property in question fenced in for 30 years and has been paying taxes on a building on the strip of land. He stated that he did have some research done and it was found that it was an abandoned old right of way that was a cart trail which use to be part of farm land. It was never owned by anyone.

Ms. Page Phillips – Legal Counsel representing Mr. Magwood – indicated that Mr. Magwood had advised her that she had spoke with Mr. Ford who assured her that the Town would be willing to quitclaim the property.

Mr. Burdette stated that Mr. Ford indicated to him that he does not have the authority to make those type of statements and he did not make that statement. This would be completely up to Town Council whether or not the Town has the authority to do anything.

Mr. Gawrych stated that based on the Committee meeting taking place and the item in question he does not know if the Committee can move forward because there is a dispute.

Mr. Young stated that he did not feel there was a dispute. If the citizen would like the Town to give him a quitclaim deed and the Committee decides that is appropriate then they can do that.

Mr. Smith stated that the Town does not own the property.

Mr. Young concurred.

Mr. Smith asked if squatter rights came into play in this situation.

Mr. Young indicated that Mr. Magwood could have an adverse possession claim against a private owner but he would not have it against the Town.

Mr. Smith asked if that would not be the most appropriate way to go as opposed to the Town giving away something the Town does not own.
Mr. Young stated that it would be up to the citizen and his attorney as to what they would like. If they are comfortable with getting a quitclaim deed from the Town, there is nothing inappropriate about the Town doing that.

Mr. Burdette stated that if the Town wants to give a quitclaim deed staff would recommend them doing that for a $1 consideration or whatever the law allows because staff does not feel comfortable with placing a price on a piece of property the Town does not have any control over.

Mr. Gawrych stated that he wants to work with Mr. Magwood on getting a resolution but he wants to make sure this is something the Town can do.

Mr. Magwood stated that this property was abandoned in the 40’s and no one took up the abandonment. When the property near there were sold in the 50’s to J.C. Long that property was not incorporated.
Mr. Young asked for the name of the attorney who obtained that information.

Mr. Bustos made a motion to recommend to Council to give a quitclaim deed to Mr. Magwood in the amount of $1 to remove the Town’s interest off the piece of property being discussed; seconded by Mr. Smith. All present were in favor.

Mr. Young indicated that this would be an ordinance which would require two readings.

Mr. Burdette asked if there would need to be any requirement for notification of any adjacent property owners.

Mr. Young stated that he understood that Ms. Lewis was the adjacent property owner.

Mr. Magwood stated that his previous lawyer had already contacted everyone and they were all going to sign off on this.

Mr. Young asked if the Town could get a statement from Ms. Lewis which says she does not object.

Mr. Magwood stated that he has a copy of the previous attorney’s agreement which she signed indicating that she did not have any objection.

4. Bid for airport operation
Mr. Bustos stated that the Town is always looking for alternate sources of income besides fees and taxes and he felt this would be something the Committee could talk about. He stated that if the Committee has no desire to move forward with this, he does not want to spend a large amount of time on the issue. He stated that the fixed base operation at the airport comes up for bid every five years. He added that he has reviewed the bid package. The Town does not own the property, it is annexed into the Town but the way this would be structured is that the Town would bid for it and if the Town received the operation of the airport then the Town would have to hire a consultant who would run the airport. Mr. Bustos reviewed figures for operation of the airport. He stated if everything worked out the Town could bring in approximately $150,000 per year. Mr. Bustos stated that the question is does the Town want to get into this type of business at all.

Mr. Smith stated that the Town has tried to stay out of the business of competing with private industry. He stated that he feels this is in the same category.

Mr. Young stated that he did review this issue and he does have two concerns, one being liability of the Town and the other would be whether or not the Town has the authority. He stated that the Town does not own the land and that may make a difference. He stated that he is not sure the Town has the authority to enter into the private sector.

Mr. Bustos stated that he does not want to spend a significant amount of time on this matter.

Mr. Smith stated that if the airport did not work well then he would probably agree with Mr. Bustos but the airport is running well.
Mr. Bustos stated that this comes strictly from a money making point.
Mr. Gawrych stated that he is not interested in doing this.
Mr. Bustos stated that he felt they did not need to spend any additional time on this matter.

5. Overview of Competitive Cable Services Act
Mr. DeMoura indicated that he was reviewing what is know as House Bill 4428 – The Competitive Cable Services Act or “The BellSouth Bill”. He stated that BellSouth wants to enter into the cable business which they now have the technology to provide this service through the telephone line. BellSouth does not want to have to negotiate a franchise agreement with each municipality which is currently the practice. When Comcast wants to provide cable service they have to work and go into the Town’s right of way and they have to negotiate a franchise agreement. BellSouth in not interested in doing that; they are requesting a state issued umbrella franchise agreement. Mr. DeMoura indicated that this is important because this really strikes a constitutional issue with the Town’s ability to control the Town’s right of ways. On January 12th the House introduced and later passed unanimously on February 15th a bill that bypasses municipalities and creates a state issued certificate of franchise agreement that one expert describes as “the worst legislation he has ever seen”. Mr. DeMoura stated that he first wants to discuss the House version which was initially introduced and then talk about the Senate version which was a little better and then signed by the governor.

Mr. Burdette stated that ultimately the Committee may want to speak with Mr. Young about whether the Town would like to see about bringing suit again these individuals because this is unconstitutional.

Mr. Young stated that he does have some concerns.

Mr. DeMoura stated that the House version strikes at the constitutional issue, where the Town’s municipal control over right of way was effectively eliminated but the Town can still collect a franchise fee. He added that the basis of a franchise fee was also redefined as well. Before gross revenue was defined as exactly what it sounds like. The House bill redefined gross revenues to remove franchise fees, late fees, wiring fees, installation fees, advertising and home shopping revenue. This equates to a 20% reduction to the Town or $127,000. This is a major impact to the Town. Mr. DeMoura added that equal service is also an issue, there is no build out requirement imposed on these cable providers, which is a citizen issue. What this means is that there may be unserviced areas or cherry-picking based on income and density.

Mr. Burdette stated that they may say that low to moderate income areas are not going to buy many services so they do not want to send in wire for basic services and they may skip them all together. Under the previous law they were not able to do that.

Mr. DeMoura stated that there is also no requirement for undergrouding of utilities. He added that this was interesting because the Town also has to negotiate a franchise agreement for electric service with SCE&G. A separate electric franchise agreement requires of SCE&G that power lines and electric lines be placed underground in new subdivisions. There is no such requirement included for cable services providers. In addition there will be no more then three Public Education Government Channels, and a larger issue is that there is no requirement for the cable provider to participate in the Emergency Alert System. If there was a situation where public safety is at risk, there is no requirement for them to post something. Mr. DeMoura stated that the house version of the bill was very bad; the citizens loose, the cities loose, counties loose, cable and phone companies win and they will pay the Town less and only compete for high return customers and by-pass the authority for the Town to control and regulate and control the activity in the Town’s right of ways. This bill was so bad that it was cosponsored by 70 representatives and it unanimously passed the house on February 21, 2006. It went onto the Senate where the chairman of the Senate Judiciary Sub-Committee understands that there are some potential problems with the bill and there is a constructional issue and that the Municipal Association and the South Carolina Association of Counties is well against this bill. The chairman requested negotiations between MASC, SCAC, the Telecommunications and cable industries. Mr. DeMoura stated that something a little better came out. On the constitutional level on the Senate version, municipal control is still limited but better where as the Town could require consent. What that means is if the Town could make a reasonable argument why a cable provider should not be providing service in the municipality they can use that as a means to deny a permit or franchise. They can take that to the court system and try to get it overturned but it stands to reason that the Town has a reasonable argument that the Town may stand to be able to prevent them from having access to the right of way. The definition of gross revenues was almost fully reestablished with the exception of bad debt and revenue from property sales, which equates to a 3% reduction in revenue to the Town or $19,050. There is still no build out requirement. The MASC is not terribly concerned about a build out requirement. They believe that any void areas where there is no cable service to be provided is where a company such as Bellsouth will step in and provide that service to those who do not have cable lines. There is still no requirement to underground utilities and still no more than three Public Education Government channels and no EAS requirement. Mr. DeMoura stated that the bottom line is that with the Senate version, the citizens, cities, and counties still loose and the cable and phone companies still win and will pay less and the possibility still exists that they will compete for only the high return customers. The Senate version was singed into law by the Governor on May 23, 2006. The Town’s representatives from the Municipal Association believes that they were put in a difficult position and they negotiated it and this is what came out.

Mr. Burdette stated that he feels the Committee should have the attorney look at this.

Mr. Smith asked if this would be a question of constitutionality.
Mr. Young stated that would be one option. He stated that it does seem to raise the issue as to whether or not they have the right to come in the Town’s right of way and dictate anything.

Mr. Smith asked if the state could be sued or if they were exempt from law suites.

Mr. Young stated that the Town would bring a suit to declare the law unconstitutional.

Mr. Smith stated that he felt the first order of business would be to ask the question to the Attorney General.

Mr. Burdette asked how much time the Town would have if Council wanted to file something at some point.

Mr. Yong stated that there is not a deadline on a piece of legislation.

Mr. Burdette stated that staff’s recommendation would be to ask Mr. Young to look into this issue.

Mr. Bustos made a motion to ask Mr. Young to contact the Attorney General for an opinion and come back next month with a view of continuing forward to see what can be done about this law; seconded by Mr. Smith.

Mr. Gawrych asked if Mr. Young saw any problem with 30 days for the Attorney General.

Mr. Young stated that he cannot guarantee that but he would report back to the Committee.

Mr. Gawrych called for the vote.

All present were in favor.

6. Auditor’s report and recommendations – fraud investigation
Mr. Burdette indicated that the auditor’s made some recommendations that really went beyond what the scope of the investigation was, but it was presented in the context at that time and staff said they would bring those recommendations, which are really Town wide, to the Finance Committee for discussion and to see if the Committee wanted the Town to implement those recommendations from the auditors.
Mrs. Jernigan stated that the first recommendation was that all pages of the department time sheet must be manually signed or initialed by the department head or director and any time sheet that has not been signed will be returned. Mrs. Jernigan stated that staff has implemented this recommendation for the few departments that were not doing it. She stated that has been in place for approximately six weeks and there have not been any problems.

Mr. Smith asked if the time sheets were being changed after it had been given to the department head for approval.

Mrs. Jernigan responded in the affirmative.

Mr. Smith asked how this would change anything.

Mrs. Jernigan stated that once the time sheet was turned into the department head for their signature it does not go back to the clerk who prepared it for delivery to the finance division. She added that they would also begin doing spot checks of a comparison between the actual leave slips. Those should be randomly checked by other people against the time sheet. Mrs. Jernigan added that also had been put into effect. Also the recommendation was to provide a periodic report of the amount of overtime that was being paid to an employee. Mrs. Jernigan stated that the next set of recommendations were relative to grant involvement. The Town needs to increase the amount of involvement by the Finance Division in the execution and administration of grants. Better communication must be required between project managers and overseeing the grants in finance in order to provide for accurate accounting in the Town’s financial records. The recommendations include: a check list should be developed outlining grant project manager and department responsibilities and all information must be provided by them to the finance department during the grants existence. Currently, the Town has personnel in transition. The finance grant clerk has gone to work in the Police department as their grant clerk and the finance division has just hired a new person in their department. They are both in the process of being trained in their new roles. Mrs. Jernigan indicated that at the beginning of next month, once both are comfortable with their new task, they are going to develop a check list that will be used. Staff did do a training session with all departments and they did bring up the fact that they would be developing a check list and the departments like that as well.
Mr. Smith stated that he was under the impression that the Finance Department handled all grants. He asked if it would not be more effective for the Finance Department to handle all grants.

Mrs. Jernigan stated that they would have to go out and get help from the other departments because when writing the applications they need help with the details.

Mr. Smith indicated that he was referring to keeping financial control over all the grants.

Mr. Burdette asked if he wanted the grant check to come into the finance department not the department where the grant originated from. He stated that he felt staff had that under control.
Mrs. Jernigan stated that currently every request for reimbursement is going to be sent out by the finance department, it is not going to be mailed out by the department’s project director who oversees the grant. A copy of the application has to be brought to the finance department, it will be checked for accuracy and to make sure all appropriate signatures are on the grant and someone at least of a deputy department head status has to sign the application for reimbursement.

Mr. Burdette stated that someone in the department will certify that the job is complete.

Mrs. Jernigan stated that the request will be made that the reimbursement be done by direct deposit but the issue is that some of the small entities do not offer that option. In those cases a check will be written but no one persons name will go on these checks, it will say Town of Mount Pleasant attention Finance Division. She added that they will be doing formal schedules for meetings for each grant that the Town has and once a month the principals that are working on the grant will come together with their supervisor and talk about the status of the grant and trade information. It is recommended that somewhere in the future as the Town gets larger and gets more grants that it may be that the Town will have to split the responsibilities because currently the finance division grant clerk also handles special revenue funds and she was doing capital projects but they have given that to another clerk. Mrs. Jernigan indicated that those were the recommendations relative to payroll and grants.
Mr. Bustos asked if staff was looking for the Committee to recommend that staff implement those recommendations.

Mr. Burdette stated that it is staff’s intention to implement them but they would like for the Committee to concur.

Mr. Bustos stated that it seems like there are a lot of moving parts and the only thing he would say is that it was an unfortunate incident but be sure