It was the revelation heard around Greenwood County.
On Aug. 28, in front of 200 leading business and civic leaders — many of whom advocated for its adoption years ago — County Council chairman Steve Brown acknowledged at a State of the City/County forum that officials expect their final collection rate from a 2016 capital project sales tax initiative to fall well short of its advertised number, imperiling a third of the planned ventures.
“The money seems to be increasing somewhat. There’s been some changes, not that significant, but whether some of those projects are going to be funded, we’ll just see what happens a number of years from now,” Brown said at the Harris Baptist Church function. “I think for years to come, you’ll be pleased with how that money has been spent, and the positive impact it will have had on this community.”
Soon after that public announcement, county officials revealed the final collection tally could be as much as $20 million less — a total of roughly $67.9 million — than what appeared on 2016 ballots as the maximum allowable: $87,938,185.
If that number sticks, it means up to 10 of the 27 projects will be sidelined, as the extra penny can only be assessed on eligible sales tax items for eight years, under state law, although voters could renew it for an additional seven.
While county officials have said in the past the final collection number might not match what was on the ballot, no indication was ever made publicly about what that would look like. As far back as the summer of 2016, County Manager Toby Chappell said projects near the bottom of the list of 27 might not come to fruition.
“The collection of the tax has to end at either the collection of the amount identified or eight years, whichever comes first,” Chappell said during a meeting of the Capital Project Sales Tax committee on June 22, 2016. “However, it is almost certain that some of the later, more involved projects will not be finalized at the end of eight years.”
Ahead of the vote, no county official gave a range of how many projects might end up zeroed out — instead only saying some might have faced that prospect.
The referendum question itself — which specifies that collection is only allowed for eight years — remains on the county’s website, easily accessible for review under the “Our County” drop-down menu.
A search of Index-Journal archives and interviews with all members of County Council and other parties revealed that since Chappell issued that 2016 disclaimer, public updates on collection rates have been sparse.
In February 2018, for instance, the County Council approved a memorandum of understanding with the Greenwood Genetic Center on a plan to reimburse it for $358,283 using capital project sales tax revenues. Sitting in the 21st slot on the list, the county was clear at that meeting the research facility might never recoup its investment.
“Greenwood County makes no guarantee as to when, or if, funds will be available to reimburse the GGC for this project,” the MOU says. “The GGC is undertaking this project now, at its own risk, understanding that Greenwood County will not indemnify the GGC for any liability, financial or otherwise, associated with this project.”
County Council member Mark Allison said he was never privately briefed on the state of collection rates.
“I know the way those projects were, the numbers don’t always come in the way you predict them to do but as far as where that is, honestly and truly, I have no idea,” he said. “I had no conversations with anybody about it.”
Brown said as much himself days after his remarks — made at the same platform used in 2015 to formally announce the county’s intention to seek its second capital project sales tax in a decade.
“Council has not taken a formal position, there’s not been any formal votes. Nobody told me what to say the other day, it was not a formal position of County Council. Those questions were given to me at the last minute and I was just attempting to be as open as I possibly could,” Brown said. “We hadn’t sat around a table and said, ‘We have to divulge this.’”
County Council member Edith Childs declined comment on the matter via text message, referring all questions to Brown and Chappell, but said she was aware of the projected shortfall prior to it being made public.
County Council member Robbie Templeton did not respond to a text message seeking comment, nor did he return messages left on his personal and work voicemails, and councilwoman Melissa Spencer could not be reached for comment — a recorded message said her voice mailbox was full.
With 65% of county voters agreeing to the levy — tacked onto all eligible sales tax items — the county had reason to be confident. After winning approval in 2006 for a first-of-its-kind revenue generation stream in Greenwood County, officials were able to realize $43 million over six years, constructing a new library, building up funds to eventually pay for a federally mandated spillway at the Buzzard Roost dam on Lake Greenwood and retiring millions in outstanding debt.
But for several people closest to the 2016 initiative, including the chairman of a committee assembled to make recommendations about which projects should have made the final cut, Brown’s comments were more eyebrow raising than nostalgic.
“I attended the state of the City/County event. The discussions about the shortfall was the first time I heard about this issue,” David Tompkins wrote.
Tompkins, who responded to a series of Index-Journal questions via email, was chairman of the lead committee that was part of a process that culled the original list of 43 projects and $160 million worth of investment to the 27 that appeared on 2016 ballots, carrying a total cost of $87.9 million — a figure derived from state Office of Revenue and Fiscal Affairs projections, knowledge of the local economy and data from yearly sales tax collections through the 2006 ballot measure.
Frank Rainwater, executive director of the office, said in 2014-15 the county had $617.4 million in total net taxable sales, leading to an estimate in the 2016-17 fiscal year of $5.81 million in revenue from the 1% tax.
“Please also note that our current expectation for the state is continual growth and if there is any significant change in the economy, this estimate would be affected,” Rainwater wrote to then County Treasurer Sharon Setzer on Sept. 10, 2015.
He added that “startup or compliance issues may impact this estimate. Hopefully, any such impact would be minimal, but we would recommend budgeting a lower amount with the hope that more revenue will be collected in the first year.”
With two years of collections now in hand, the county has already surpassed the state’s forecast.
To date, the county has banked $17.52 million through two full years of collections — outpacing the state’s projection by a healthy margin, with $8.44 million taken in during the first year and $9.07 million in 2018 — an annual average of $8.76 million, and a 7.5% year-over-year growth clip.
With eight quarters’ worth of revenue checks, the county only recently had a “firm base of data” to present forward-looking estimates to stakeholders, Chappell, who responded via email to a series of Index-Journal questions, wrote.
“Greenwood County felt it was important to have a firm base of data (8 quarters of actual revenue) so that we would not inform stakeholders to make alternative plans without sound justification. Once we felt that we had sufficient data we met with the effected (sic) stakeholders to apprise them of this information and Wednesday (at the State of the City/County luncheon) the chairman of County Council advised the public,” Chappell wrote.
Josh Skinner, the county’s capital projects coordinator, said waiting any longer to have gone public with anticipated collection rates would have been irresponsible.
“I don’t think it was premature. We are one quarter of the way through the eight-year collection period. We want to be upfront with what we are collecting and what we actually have in the bank. We would rather let these entities know where they stand now rather than right before they were ready to start their project,” he said in an email.
Since June 30, 2013, the county has posted quarterly reports on capital project and sales tax expenditures from its first round of collections, with the most recent from June 30, 2018.
That’s because nearly half of the money — $21.2 million — remains unspent as local officials continue to negotiate with federal regulators over design parameters for the Buzzard Roost spillway.
The statements are available publicly at greenwoodcounty-sc.gov., under the treasurer’s department.
But absent from that page is any data about expenditures or collections from the 2016 assessment, which took effect on May 1, 2017.
A number of investments are already underway because of the 1% levy, including construction on the William “Billy” O’Dell Center for Upstate Manufacturing Excellence at Piedmont Technical College, initial planning and construction estimates for an expansion of the GLEAMNS Dr. Benjamin H. Mays Historical Preservation Site and a sewer line replacement in Ware Shoals, which is ready for construction pending final review by the state Department of Health and Environmental Control.
“The commission was given proposed projects from the various committees that reviewed the initial project list. The commission was also given revenue projections from the proposed sales tax. We then worked to finalize the project list for approval by County Council,” Tompkins said. “Based on the project and revenue projections, it was my understanding that all the projects would be funded.”
A close reading of the referendum question shows the amount to be raised would be an all-encompassing figure to include construction and engineering costs and property acquisition.
“The proceeds of the tax may be used for construction, improvement or procurement of the capital projects listed above, and may also be used for design, engineering, project management and other professional services related to the same,” Section 5 of the question reads.
Minutes from a March 30, 2016 meeting of the capital project sales tax’s lead committee show that officials honed in on a number months earlier.
“Mr. Chappell passed out the worksheet to address the first question, where to set the number. The numbers already listed are the numbers relative to today’s dollars. What is a reasonable figure that will take into consideration an 8 year endeavor with revenue and costs increasing over time. Mr. Chappell described the worksheet. The number that has been calculated to work with is $88,400,000,” according to the minutes, which are posted on the county’s website.
“The capital project sales tax is based on projections, both of anticipated revenue and expenditures,” Chappell wrote in an emailed reply. “The quote that you have cited was our attempt to take dollars from the year 2016 (both revenue and expenditures) and show what these same dollars would have to be over the next 8 years to equal the value of the 2016 dollar.”
By April 7, 2016, the final list of recommended projects was complete, with the committee deciding to take 1.3% of funding from each — a total of roughly $1 million — to contract out management.
Ware Shoals Mayor Bruce Holland was told last month in a meeting with county officials that a $3.9 million allocation from the pool of money to aid in the restoration of Katherine Hall was likely not going to happen.
“That project was right at the cut line and they informed us at that point in time that likely it won’t get funded,” Holland said.
Built in 1913 by Benjamin Riegel as an entertainment and cultural hub for workers at his mill, the 15,637-square-foot building named for his only daughter was deeded to the town in 1967, upon its incorporation.
Slated as the 18th recipient of capital project sales tax revenues, Holland said without the expected funding, modernizing the landmark would be impossible.
“If it can be refurbished and be a center point of this community, I think it would be wonderful, but the bottom line is the town cannot refurbish this building. So without this one-cent tax, it’s not going to be done,” he said.
Also in question is whether the Greenwood County Detention Center will receive $429,939 for repairs and maintenance.
“County Council has always taken care of the sheriff’s office needs, and I am confident that they will identify funding if the capital sales tax funding is not available,” Sheriff Dennis Kelly said in a text message.
The money, Kelly said, would go toward security enhancements such as new cell doors, metal detectors and lighting.
“In the current county budget, it is already approved to replace both A and B unit roofs at the detention center totally unrelated to the capital project sales tax,” Kelly said. “When there was an issue with the cell locks in B unit, the County Council found the money to make their situation safe without using CPST funding.”
Jeff Meredith, general manager of the Greenwood Commissioners of Public Works, was also notified that more than $7 million included on the roster of projects to install new water lines and fire suppression infrastructure in the areas of Harris Landing and Highway 25 South would likely not be realized.
“We do not have any alternative funding plans to proceed with these projects at this time,” Meredith said.
Also on the bubble would be a $1.2 million earmark to The Museum for construction of an exhibition hall to replicate the former Southern Passenger depot that sat along Greenwood’s Main Street.
Museum Director Karen Jennings said she was notified in advance of the luncheon their project likely would fall off the table.
“We did know about the shortfall and that we would not be receiving funding with this tax. The manager of the capital tax project came to tell us in person,” Jennings said. “We are looking at other options, In fact, our board is scheduling a planning and strategy session to look 5 and 10 years down the road to assess our mission, and the best way we can use our train museum and its grounds, and well as how to finance its continued operations.”
Bonnie “Boo” Ramage, interim executive director of the Greenwood Genetic Center Foundation, said campus administrators couldn’t afford to wait to upgrade the facility’s fiber optics network.
“We understood the risk that we might not be reimbursed, but the project needed to proceed. We remain hopeful that the tax collections will improve, original revenue projections are met, and that we might still see reimbursement before the collection period expires,” Ramage said in an email.
Greenwood County Council member Theo Lane — a candidate at the time — was chairman of the capital project sales tax economic development committee and also advocacy chairman for the Greenwood SC Chamber of Commerce in 2016, said assuming the venture will end up $20 million short of projections is premature.
Lane went on to defeat Bob Fisher in that November election.
“I don’t know if we can make that assumption,” Lane said. “I think we’re kind of leaping to think we’ll be $20 million off.”
County Council member Chuck Moates agreed.
“It’s sort of a crapshoot if you ask me. How can you tell something that’s seven years out? You don’t know what kind of economic downturn or upturn will take place,” he said.
Why the hedging?
Aside from the impossibility of predicting the future, what if Greenwood finally lands another big box retailer such as Target? What if state lawmakers make changes to items that can be assessed a sales tax? And what if a project on the list of 27 finds an outside funding source?
“These are projections of events that are not going to happen until the future. No one can tell you today if the 2016 Capital Project Sales Tax will or will not meet expectations in May 2025. There are too many variables that are in play for anyone to accurately make that assessment,” Chappell wrote.
In March, members of a state House tax policy review committee said broadening the base of goods that can be assessed is critical to South Carolina’s long-term financial health.
House research director Don Hottel said at that meeting an immediate change to the system isn’t possible and would have to be rolled out over consecutive years for planning purposes.
“On anything you do, the implementation’s going to be critical. Any changes even of a small magnitude will require substantial phase-in periods,” he said. “If you don’t broaden the base, there is some pressure in the future to raise the rate just to maintain the revenue that you have. The primary issue for policymakers is that sales tax revenues are declining and the state’s dependence on tangible goods is changing.”
A December 2018 Tax Foundation report issued in partnership with the South Carolina Chamber of Commerce outlined some of the ways the state’s 6% sales tax rate is inhibiting economic growth.
“South Carolina, under its state sales tax, does not tax food, candy, and soda, or prescription and nonprescription drugs. The state also imposes low caps on the maximum amount of sales tax owed on the purchases of automobiles (currently set at $500). It thus exempts a sizable and stable portion of consumer spending. The state also exempts most services and select other goods. By law, tangible personal property is included in the sales tax base unless expressly exempted, whereas services are only subject to tax if specifically enumerated,” the report said.
The 6% assessment is on top of any local option taxes implemented by cities or counties. The rate has doubled since first being assessed in 1951.
Perhaps county leaders have reason to believe they’ll end the collection cycle as close to the original goal as they’ve hoped.
“Each quarter, year over year, has shown an increase in actual revenue and I am not aware of anything, as of today’s date, that would materially change this trajectory,” Chappell wrote.
Skinner offered a similar assessment.
“It would be unrealistic to assume no growth over the next six years, which is why we did not. Chairman Brown stated that the revenue actuals are not meeting the revenue projections. That is all that was said,” he said in an email. “We are being cautious, using our quarterly average over the first two years and giving a very conservative estimate as to how much we will collect by 2025.”
A December 2018 report by the University of South Carolina’s Darla Moore School of Business showed consumer spending was up across the board in the sales tax-heavy sectors of wholesale trade, retail trade and leisure and hospitality, while income growth from the third quarter of 2018 through the first four months of 2019 fluctuated between 4.1% and 4.5%.
Statewide personal income increased to $223.8 billion through the first quarter of 2019, according to an August economic outlook compiled by the state Department of Commerce.
In the run-up to 2016 Election Day, public sector critics of the 1-cent tax were hard to find. The Greenwood SC Chamber of Commerce was retained as its marketing arm. And in November 2015 the Greenwood Partnership Alliance’s governing board was told the agency’s Foundation for a Greater Greenwood County committed $15,000 for advertising and promotion.
Angelle LaBorde, the chamber’s president and CEO, said officials remain fully behind the sales tax measure, no matter how much ends up being raised.
“This initiative is critically important to businesses and residents so that Greenwood remains competitive and continues to offer a quality of life that we have all come to enjoy. Regardless of the amount of money ultimately collected, many of the proposed capital projects would not otherwise have been completed if not for this initiative,” she said.
“As a county, we chose to invest in ourselves and in projects that add value to our community. Our hope is that collections will improve over the next several years so that more of the remaining projects come to fruition,” LaBorde added.
But less than three weeks prior to the vote, then County Councilman Bob Fisher urged residents to scrutinize the PR pitch.
He wanted to know what documentation was provided to CPST commissioners justifying Piedmont Tech’s $6 million ask.
“It is also promoted that a percentage of the penny sales tax will come from people who do not reside in Greenwood County. I have heard as much as 30 to 40 percent, but have not seen this documented,” Fisher wrote in an Index-Journal guest column on Oct. 28, 2016. “I do not support the Chamber telling you to vote yes, nor do I support anyone who tells you to vote no.”
Fisher, who lost his council seat to Lane during that same election, said that county leaders should have briefed the public on the state of its collections prior to the controlled State of the City/County event.
“I’m not ready to throw any of my former colleagues under the bus, I am kind of curious as to why. To be off $20 million? I think somebody needs to have a clear explanation of what went wrong,” Fisher said. “Don’t go around trying to find some fancy way to disguise it. Admit it, get it out into the open and just go on.”
County Council had an opportunity to make the public aware of its collection rate during a scheduled meeting on Sept. 3, but the subject was never broached.
Holland, the Ware Shoals mayor, said a broader announcement by county officials over the state of its collections could have helped alleviate taxpayer concern.
“The best way I can answer is this. I hate surprises,” he said. “I guess my concern would be right now, if you wanted to do this thing again, would the citizens support this feeling like they were done wrong? It could have been communicated better, I guess.”
Originally Published by Index-Journal on:Sep 8, 2019
By ADAM BENSON abenson@indexjournal.com
Article Link: https://www.indexjournal.com/news/the-20-million-question-two-years-in-county-casts-doubt-on-10-cpst-projects/article_461b9a3e-e66b-5388-a091-f41a1e3bfac6.html
Chappell: CPST unlikely to come up $20M short
/in Index-JournalWe don’t know.
That was the assessment given Tuesday by Greenwood County Manager Toby Chappell to council members about how much money might be raised during the next six years when a 1-cent sales tax assessment to pay for millions of dollars worth of capital projects sunsets.
But, Chappell said, officials are confident the final tally will be closer to an $87.9 million figure included on 2016 ballots than a possible $67 million performance, which would sideline 10 of 27 planned projects.
“When someone tries to say the capital project sales tax will be a specific amount short, the best case is that they’re giving you an educated opinion, the worst case is that they’re merely speculating,” Chappell said in his first public comments on the issue since an Aug. 28 State of the City/County forum where County Council chairman Steve Brown disclosed that actual collection rates are falling behind projected amounts.
That same afternoon, Josh Skinner, the county’s CPST coordinator, said based on averages from eight quarters worth of revenues, the penny sales tax might generate a total of $67.9 million.
The Index-Journal published a nearly 6,000-word account on the CPST issue in its Sept. 8 edition and received no correspondence from county leaders or other officials close to the initiative disputing the newspaper’s reporting.
Chappell gave the County Council an “extraordinarily numbers heavy” presentation where he responded to the newspaper’s report, based on the potential $20 million gap.
“The number $20 million has been thrown around in the media recently. Is it possible that the 2016 capital project sales tax will be $20 million short in 2025? The short answer is yes. However, it’s also possible that you win the South Carolina Powerball at 1 in 292 million odds, and it’s possible that FERC may approve our fuse plug issue, but it’s not likely,” Chappell said.
For such a shortfall to take place, “you’d have to have catastrophic economic events to occur, none of which the county knows of or anticipates.”
To date, $17.52 million has been raised since the tax took effect on May 1, 2017.
So how did the county come up with the $87.9 million figure that went to referendum in November 2016?
Two dates in September 2015, plus the final year outcome of a 2007 capital project sales tax answer that question, Chappell said.
In August 2015, county leaders asked the state’s Office of Revenue and Fiscal Affairs for a projection of how much Greenwood could collect through a second penny sales tax.
On Sept. 10, the office responded with an estimate of $5.81 million in first-year collections.
But since Greenwood County brought in $8.4 million worth of sales tax dollars in 2010 through a 2007 penny tax initiative, officials asked for a second look at the numbers.
And on Sept. 30, 2015, Chappell said, the state came back with an updated projection of $9.5 million.
Extrapolating that across eight years, Chappell said, gave the county a baseline figure of $76 million.
As a hand-picked committee waded through applications, the costs of projects making the cut were recalibrated to take into account inflation and annual growth, adding about $11 million to the number, for a cap of $87.9 million.
For the county to perform at a clip that ends with only $67.9 million being realized, it would mean zero growth for the remaining life of the collection.
“If you wanted to believe that we would be $20 million short, this is the math that gets you there,” Chappell said.
But since Year 1 to Year 2 revenues jumped by $624,000 — that theory has already been proven faulty, Chappell said.
However, county leaders themselves were using the $67.9 million figure as recently as August. According to minutes from an Aug. 8 Greenwood Commissioners of Public Works meeting, General Manager Jeff Meredith said he received a “formal letter” that week from Skinner saying the last projects on the list — placement of lines for water service and fire suppression to be installed at Harris Landing and along U.S. Highway 25 — wouldn’t be funded.
Meredith provided a copy of the letter to the Index-Journal.
“Greenwood County receives the sales tax revenue from the S.C. State Treasurer on a quarterly basis and we are currently averaging $2,190,414 per quarterly check … Based on our quarterly average, we are projecting to collect $67,902,834 at the end of our eight year time limit,” the letter says.
Several members of the County Council said they took issue with the Index-Journal’s reporting on the matter following Chappell’s update.
“To anyone who can read and hear logic, this makes perfectly good sense, and it’s a shame that we’ve had to deal with this turmoil, but I appreciate you addressing it in such a professional and dignified manner and I hope it will be reported as such,” County Council member Chuck Moates said.
Theo Lane, who was chairman of the Capital Project Sales Tax economic development committee and advocacy chairman for the Greenwood SC Chamber of Commerce in 2016, also was upset by the Index-Journal’s CPST reporting.
Lane was elected to the County Council on the same ballot the CPST question appeared on.
He said he took “personal offense to the way this has been portrayed.”
“I know how transparent this council has worked to be, I know that we are working in the best interests of Greenwood County as we always have. I’m proud of that work. We aren’t perfect, we sometimes make mistakes, there are a couple of things we wish we had done differently, but I honestly think it’s easy to armchair quarterback in the aftermath,” Lane said. “We’re honest, we function with integrity and we work for the best interest of the people of Greenwood County.”
Brown said up-to-date accounting numbers for 2016 capital project sales tax collection rates will be posted on the county’s website. He also acknowledged that officials should have presented information on the revenue generation more quickly.
“It’s been pointed out very plainly to us that we should have periodic updates. We ask for your forgiveness on that faux pas and will correct it in the future,” Brown said.
Brown said on Tuesday that Chappell alerted the County Council via email on June 19 that anticipated CPST collections might be lagging behind expectations — information he felt obligated to share at the August luncheon, where many leading business and civic leaders who support the tax’s adoption were in attendance.
“If I had sat on that information for a two- or three-year period, and the collections had not responded in a positive manner, then I think I would have been wrong,” Brown said. “I think we are moving in a positive manner, I think we are going to see improvements in the collection rate and I think a majority of the projects will be funded. There are no funds missing, every project that is supposed to be funded to this day is funded at a 100% level and we’re just hoping the money will continue to rise. I wish we were perfect but we’re not, and we’re trying to do the best we can.”
Public update on CPST collection rates on tap at County Council meeting
/in Index-JournalThe Greenwood County Council will, for the first time since its inception in May 2017, get an update on collection rates tied to the 2016 capital projects sales tax initiative.
The Tuesday presentation follows the Index-Journal dedicating nearly 6,000 words on how 10 of 27 projects might be imperiled after county leaders warned that revenue estimates could come up as much as $20 million short from the $87.9 million figure included on November 2016 ballots.
Listed on the council’s agenda as a “quarterly capital projects sales tax update,” it comes after the newspaper in an editorial called for better communication between county leaders and voters on the issue.
“While the eight-year collection period is six years out and the outlook could change for the better, we and many others were scratching their heads after the Aug. 28 announcement and subsequent story that spelled out in more detail how far off the figures seem to be. OK, maybe $1 million or even $2 million, but as much as $20 million? Fuzzy math? Pie-in-the-sky get the votes math? It’s easy to see why many residents are cynical about the matter, especially given how the potential revenue shortfall was unceremoniously rolled out,” the Sept. 8 editorial said.
“County taxpayers and voters might feel a little less chapped about it all had there been a more public revelation and explanation of the situation. It would have been a good idea for the county manager, Toby Chappell, and the CPST projects manager, Josh Skinner, to make a formal presentation before County Council. In public session.”
Since June 30, 2013, the county has posted quarterly reports on capital project and sales tax expenditures from its first round of collections, with the most recent from June 30, 2018.
That’s because nearly half of the money — $21.2 million — remains unspent as local officials continue to negotiate with federal regulators over design parameters for the Buzzard Roost spillway.
The statements are available publicly at greenwoodcounty-sc.gov under the treasurer’s department.
But absent from that page is any data about expenditures or collections from the 2016 assessment, which took effect on May 1, 2017.
Also on Tuesday, County Engineer Rob Russian is set to brief the council on the status of that Buzzard Roost project.
In early December, Chappell and Russian spent two days huddling with a Board of Consultants and FERC representatives to go over specs for a project that was nearly ready to launch, until federal regulators put the brakes on at the last minute.
In January 2017, the County Council learned FERC would not approve plans to build the contraption — known as a fuse plug — until local leaders either took part in the agency’s Risk Informed Decision Making process or convened another consultants’ board to evaluate the proposal for a second time since March 2012.
Russian said in January a preferred design came out of those talks — but several more rounds of negotiations will be needed until work can finally begin.
public meetings
/in UncategorizedMONDAY
MCCORMICK COUNTY COUNCIL
SPECIAL CALLED MEETING
TIME: 10 a.m.
LOCATION: 610 S. Mine St., McCormick
AGENDA: Review applications received from individuals who are willing to serve on the Modoc Special Fire District Commission. This meeting is for information only.
GREENWOOD CITY COUNCIL
TIME: 5:30 p.m.
LOCATION: City Council chambers
AGENDA: PUBLIC HEARINGS: Consider Ordinance No. 19-013 amending the City of Greenwood’s Official Zoning Map (Ordinance No. 04-020) by rezoning approximately 0.94 acres of land located at 844 E. Cambridge Ave. from R4 (Medium Density Residential) to R10 (High Density Residential); Consider Ordinance No. 19-014 amending the City of Greenwood’s Official Zoning Map (Ordinance No. 04-020) by rezoning approximately 0.86 acres of land located at 1030 Edgefield St. from R7 (High Density Residential) to OP (Office Professional). NEW BUSINESS: Consider Ordinance No. 19-015 amending ordinance No. 14-021 to amend participation by the City of Greenwood in the costs of health insurance for eligible employees retiring after Dec. 31, 2008 and before Jan. 1, 2012; Consider Ordinance No. 19-016 amending ordinance No. 14-022 to amend participation by the City of Greenwood in the costs of health insurance for eligible employees retiring after Dec. 31, 2011; Consider Resolution No. 19-004 committing the City of Greenwood to providing a located match for Municipal Association of South Carolina Greenwood Legislative Hometown Economic Grant and following its procurement policy when securing services and products with grant funds; consider Resolution No. 19-005 approving the distribution of 2019 accommodations tax funds; consider Resolution No. 19-006 to express the intention of the City of Greenwood, South Carolina, to cause the city to be reimbursed with the proceeds of tax-exempt obligations; and other matters related thereto; consider to authorize the City Manager to advertise and take sealed bids with a minimum bid of $1,000 for TMS# 6855-102-851 located on Gray Street.
GREENWOOD COUNTY SCHOOL DISTRICT 50 BOARD OF TRUSTEES
TIME: 6 p.m.
LOCATION: 400 Glenwood St.
AGENDA: Superintendent information: Healthy Learner’s Spelling Bee — 6 p.m. Sept. 24 at Emerald High School, organizational chart, rebidding webpage provider, middle college; board chair information: board evaluation, update on School Law Conference; financial/facility updates; public forum; action item: budget amendment; executive session: personnel recommendations and vacancies; action item: personnel recommendations and vacancies.
SALUDA COUNTY COUNCIL
WORK SESSION
TIME: 6 p.m.
LOCATION: County Administration Building, 400 W. Highland St., Saluda
AGENDA: Discuss how to balance the county operating budget. Discuss financing of bonds for new Saluda County Detention Center.
DUE WEST TOWN COUNCIL
TIME: 6 p.m.
LOCATION: Town Hall, 103 Main St., Due West
AGENDA: Recognition of visitors — Fiona Marley, zoning for tiny house at 3 Magnolia Lane; Brandon Kai Oberle, zoning for modular houses. Legislation: Second reading of Ordinance No. 03-2019, an ordinance to accept a right of way easement for Quail Hollow Drive in the Town of Due West so that the Town can seek available grants and funding for the repair of the road; second reading of Ordinance No. 04-2019, an ordinance of the Town of Due West authorizing the Mayor to execute a contract for the collection of household garbage within the Town with Michael Gambrell, DBA M&R Enterprises for a period of 24 months. Mayors report — school district update, Erskine College update. Civic Events report from Mayor Pro Tem Knight. Town administrator report. Attorney Paul Agnew report. Fire report. Police report. Utilities report. Old business. New business — Abbeville County recycling update. Announcements — MEO Institute Session from 9:30 a.m. to 12:30 p.m. Tuesday at USCOG; Fall Festival on Sept. 28; Taste of Louisiana Gumbo Dinner, 5-7 p.m. Oct. 12.
TUESDAY
GREENWOOD COUNTY
ADMINISTRATION AND FINANCE COMMITTEE
TIME: 4 p.m.
LOCATION: Greenwood Library
AGENDA: NEW BUSINESS: Consideration of appointment to the Upper Savannah Workforce Development Board; Consideration of an application for the 2019 Byrne Justice Assistance Grant Program Award; Resolution 2019-19 adopting millages necessary to provide tax revenues for the Operating and Capital Budgets of the Government of Greenwood County and for Educational Purposes in Greenwood County for the Fiscal Year Beginning July 1, 2019; Resolution 2019-20 making a finding pursuant to Section 6-11-860 of the Code of Laws of South Carolina 1976, as amended, that Greenwood Metropolitan District should be authorized to issue not exceeding $10,000,000 general obligation bonds of Greenwood Metropolitan District, and authorizing the publication of notice of County Council’s action; Resolution 2019-21 to accept a federal grant and to make a transfer of funds from the 315 Airport Improvement Fund to the Airport Grant Fund for the rehabilitation of taxiways A and B (Grant# 3-45-0027-020-2019) at the Greenwood County Airport; consideration of appointment of members to the Joint Board of Zoning Appeals; consideration of appointment of members to the Joint Planning Commission.
GREENWOOD COUNTY COUNCIL
TIME: 5:30 p.m.
LOCATION: Greenwood Library
AGENDA: PRESENTATION: Quarterly Capital Project Sales Tax Update; PUBLIC HEARINGS: Third Reading: Ordinance 2019-15 authorizing Greenwood Metropolitan District to issue not exceeding ten million dollars ($10,000,000) of general obligation bonds, the proceeds of which shall be used to finance the costs of improvements to the sewer system of the district and to provide funds to refund certain outstanding obligations of the district; Second Readings: Ordinance 2019-16 to amend the Greenwood County Zoning Ordinance, being Ordinance 13-86, as and if amended, so that 112 properties totaling 600 acres located along Plantation Drive, Planters Court, Abbington Lane, Barrington Court, Harvest Lane and English Court (various G-Pin numbers) in Greenwood, South Carolina changes zoning classifications from RDD (Rural Development District) and AG-1 (Agricultural) to R-1 (Single Family Residential) and AG-2 (Agricultural). END OF PUBLIC HEARINGS: Third Reading: Ordinance 2019-14 to amend the Greenwood County Zoning Ordinance, being Ordinance 13-86, as and if amended, so that one (1) parcel of land owned by Cjjs Holdings LLC located at 208 Bypass 225 S (G-Pin # 6845-204-829) in Greenwood, South Carolina changes zoning classifications from C-2 (General Commercial) to R-1 (Single Family Residential); Second Reading: Ordinance 2019-18 authorizing the execution and delivery of one or more Fee-in-Lieu of ad valorem taxes and Special Source Revenue Credit Agreements by and between Greenwood County, South Carolina and Pine Gate Renewables LLC and other affiliated entities, to provide for payment of a fee-in-lieu of taxes with respect to certain projects; authorizing the inclusion of certain project sites in a multi-county business park; authorizing Special Source Revenue Credits; and other related matters; NEW BUSINESS: Consideration of appointment to the Upper Savannah Workforce Development Board; Consideration of an application for the 2019 Byrne Justice Assistance Grant (JAG) Program Award; Resolution 2019-19 adopting millages necessary to provide tax revenues for the operating and capital budgets of the Government of Greenwood County and for educational purposes in Greenwood County for the fiscal year beginning July 1, 2019; Resolution 2019-20 making a finding pursuant to Section 6-11-860 of the Code of Laws of South Carolina 1976, as amended, that Greenwood Metropolitan District should be authorized to issue not exceeding $10,000,000 general obligation bonds of Greenwood Metropolitan District, and authorizing the publication of notice of County Council’s action; Resolution 2019-21 to accept a federal grant and to make a transfer of funds from the 315 Airport Improvement Fund to the Airport Grant Fund for the rehabilitation of taxiways A and B (Grant# 3-45-0027-020-2019) at the Greenwood County Airport; Update on Buzzard Roost Fuse Plug; Consideration of Appointment of members to the Joint Board of Zoning Appeals; Consideration of Appointment of members to the Joint Planning Commission.
PIEDMONT TECHNICAL
COLLEGE AREA COMMISSION
TIME: 5:30 p.m.
LOCATION: John S. Coleman Administration Building
AGENDA: Financial review: audit report; for approval: highlights, budget status report (revenue, expense), facts sheet, other; report on Area Commission self-evaluation and conflict of interest; QEP/CAREplan update; strategic planning update; president’s report: academic affairs, economic development/continuing education, facilities, foundation, human resources, institutional effectiveness, off-campus, student affairs and communications; chairman’s comments; executive session.
MCCORMICK COUNTY COUNCIL
TIME: 6 p.m.
LOCATION: 610 S. Mine St., McCormick
AGENDA: Speakers — Maxine Gable, deputy auditor; Brian Dixon, mayor of Troy; Debbie Bourne. Decision items — Resolution 02-19: Council to consider accepting the millage for fiscal year 19-20. Council to consider passing Resolution 02-19; Council to consider authorizing the Administrator to award the contract to McMahan Brothers Pipeline Inc. for the Red Row and Kennedy Road water line project in the amount of $262,310; Council consider authorizing R. Thomas Britt, P.E. HB Engineering Inc. to proceed with surveying and engineering for the Troy Water Extension at a cost of approximately $6,000; Council to consider authorizing Administrator to approve Phase I of McCormick County Industrial/Technology Park Entrance and Signage Design with Thomas & Hutton Engineering Co. in the amount of $79,500; Council to consider authorizing Administrator to pay $79,500 to Thomas & Hutton Engineering Co. from the Economic Development Account for their services, Phase I which is reimbursable from SC Department of Commerce Site Enhancement Initiative Grant. Executive session. Information Items — Email concerning Tower at the Clarks Hill Site; invitation from McCormick Mayor Roy Smith. Committee reports.
Index-Journal seeking more CPST information
/in Index-JournalGreenwood’s daily newspaper is seeking more data from county officials about the genesis of a 2016 capital project sales tax figure that could wind up as much as $20 million short of initial estimates.
The Index-Journal on Monday filed a Freedom of Information Act request asking for all materials related to the initial formulation of the total amount that could be raised as it appeared on the November ballot referendum question: $87,938,185.
It’s also seeking documents and materials used to calculate the latest project sales tax forecast, any correspondences to or from CPST coordinator Josh Skinner, County Manager Toby Chappell and the treasurer’s office between July 1 and Monday pertaining to collection of the tax, documents pertaining to the eight quarterly checks received thus far from the state Department of Revenue and information about how the money has been spent or disbursed from funds already collected.
On Sunday, the Index-Journal devoted nearly 6,000 words in a special report to county taxpayers about why some closest to the initiative believe up to 10 of the 27 projects included on a final list might not come to fruition.
The Index-Journal’s report was prompted by an Aug. 28 State of the City/County forum where, in front of 200 leading business and civic leaders — many of whom advocated for its adoption years ago — County Council chairman Steve Brown acknowledged that officials expect their final collection rate from a 2016 capital project sales tax initiative to fall well short of its advertised number and potentially imperiling a third of the planned ventures.
“The money seems to be increasing somewhat. There’s been some changes, not that significant, but whether some of those projects are going to be funded, we’ll just see what happens a number of years from now,” Brown said at the function. “I think for years to come, you’ll be pleased with how that money has been spent, and the positive impact it will have had on this community.”
Soon after that public announcement, county officials revealed the final collection tally could be as much as $20 million less — a total of roughly $67.9 million — than what appeared on 2016 ballots as the maximum allowable: $87,938,185.
If that number sticks, it means up to 10 of the 27 projects will be sidelined, as the extra penny can only be assessed on eligible sales tax items for eight years, under state law, although voters could renew it for an additional seven.
While county officials have said in the past the final collection number might not match what was on the ballot, no indication was ever made publicly about what that would look like.
To date, the county has banked $17.52 million through two full years of collections — outpacing a state-issued projection by a healthy margin, with $8.44 million taken in during the first year and $9.07 million in 2018 — an annual average of $8.76 million, and a 7.5% year-over-year growth clip.
A number of investments are already underway because of the 1% levy, including construction on the William “Billy” O’Dell Center for Upstate Manufacturing Excellence at Piedmont Technical College, initial planning and construction estimates for an expansion of the GLEAMNS Dr. Benjamin H. Mays Historical Preservation Site and a sewer line replacement in Ware Shoals, which is ready for construction pending final review by the state Department of Health and Environmental Control.
State law allows the county 10 business days to respond to the Index-Journal’s FOI request, giving it a Sept. 23 deadline.
Matthew Hensley: County needs to work on its figure
/in UncategorizedAt this point, you know about the $20 million adjustment to the anticipated revenue from the Capital Project Sales Tax, along with the possibility that up to 10 projects will go unfunded.
Behind that number is another surprising reality. If the county expects to collect $20 million less than initially forecast from a 1% levy on sales, that means officials now think they might have overprojected sales eligible for the penny tax by $2 billion.
Yes, billion. With a “b.”
That’s a 10-figure miscalculation.
How did the county get there?
That’s a good question, one we’ve been trying to get officials to answer. We can, however, make our own projections with some of the data we have.
We know that for the first year of the tax, the county collected $8.44 million. For the second year, it raised $9.07 million — a 7.5% increase over the first year.
If the county saw that much gain each year, the tax would sunset days ahead of the end of Year 8 because the county would raise the $87.9 million.
That estimate might be lofty. Changes in sales tax revenue year to year change based off inflation, wage gains, population growth and changes in employment levels. Because inflation is a constant and we’ve consistently seen population growth in Greenwood County — if we had more housing, we’d likely see it grow faster — annual increases in sales tax revenue should be a near constant. Recessions do happen, however, and people can change their buying habits, so there are factors that can slow growth or even cause a slight decline during a year or two of the eight-year span.
Getting into all of those factors is something far more complex than I tackle in this column, in part because I have to understand the numbers too. The state Revenue and Fiscal Affairs Office, however, has a rate it used for estimating annual growth in sales tax revenue for a possible Greenwood local options sales tax that we can apply here: 4.2%.
That number is more modest than the 7.5% rate, perhaps because the office cautions governments to use more conservative figures, and seems roughly in line with the combined effects of inflation and population growth.
If we use that lower growth rate, the county ends up with an $80.54 million total haul. That’s more than $7 million short of the goal, but would still fund most of the projects and be well ahead of that $67.9 million figure.
Let’s go more modest. Average inflation for the 12 months ending in July was 1.8%. That is a barebones rate that would discount any population growth or new industry. Using that rate of annual revenue growth across the next six years gives a final tally of $75.49 million. This is a very conservative estimate but is still nearly $8 million higher than the county’s new estimate.
Dropping it to a no-growth calculation, meaning the county would collect the Year 2 revenues in all future years and not one penny more, would give a figure of not quite $72 million. To hit that tally, we’d need to see enough population decline, job losses and lost wages to counteract inflation across six years. That seems improbable, but it’s still about $4 million above the county’s new estimate.
To hit that new figure, the county would need to experience an annual decline of roughly 2.2% each year.
The new projection, then, either anticipates a prolonged, six-year recession or some massive blow to the local economy in that span. How massive of a blow? If sales tax revenue dropped 11.5% this year, then stayed consistent with inflation, we’d hit that new projection.
In other words, either the new county projection is bogus and informing “stakeholders” of a possible $20 million shortfall was premature or officials see a reason to panic and have not been inclined to share their concerns with the public.
Josh Skinner, capital projects coordinator for the county, said in an email to staff writer Adam Benson that neither is the case. In the same email, Skinner said it would be unrealistic for the county to assume tax revenues wouldn’t grow.
If that all adds up to you, let me know. I’ll give you a penny for your thoughts.
The $20 million question: Two years in, county casts doubt on 10 CPST projects
/in Index-JournalIt was the revelation heard around Greenwood County.
On Aug. 28, in front of 200 leading business and civic leaders — many of whom advocated for its adoption years ago — County Council chairman Steve Brown acknowledged at a State of the City/County forum that officials expect their final collection rate from a 2016 capital project sales tax initiative to fall well short of its advertised number, imperiling a third of the planned ventures.
“The money seems to be increasing somewhat. There’s been some changes, not that significant, but whether some of those projects are going to be funded, we’ll just see what happens a number of years from now,” Brown said at the Harris Baptist Church function. “I think for years to come, you’ll be pleased with how that money has been spent, and the positive impact it will have had on this community.”
Soon after that public announcement, county officials revealed the final collection tally could be as much as $20 million less — a total of roughly $67.9 million — than what appeared on 2016 ballots as the maximum allowable: $87,938,185.
If that number sticks, it means up to 10 of the 27 projects will be sidelined, as the extra penny can only be assessed on eligible sales tax items for eight years, under state law, although voters could renew it for an additional seven.
While county officials have said in the past the final collection number might not match what was on the ballot, no indication was ever made publicly about what that would look like. As far back as the summer of 2016, County Manager Toby Chappell said projects near the bottom of the list of 27 might not come to fruition.
“The collection of the tax has to end at either the collection of the amount identified or eight years, whichever comes first,” Chappell said during a meeting of the Capital Project Sales Tax committee on June 22, 2016. “However, it is almost certain that some of the later, more involved projects will not be finalized at the end of eight years.”
Ahead of the vote, no county official gave a range of how many projects might end up zeroed out — instead only saying some might have faced that prospect.
The referendum question itself — which specifies that collection is only allowed for eight years — remains on the county’s website, easily accessible for review under the “Our County” drop-down menu.
A search of Index-Journal archives and interviews with all members of County Council and other parties revealed that since Chappell issued that 2016 disclaimer, public updates on collection rates have been sparse.
In February 2018, for instance, the County Council approved a memorandum of understanding with the Greenwood Genetic Center on a plan to reimburse it for $358,283 using capital project sales tax revenues. Sitting in the 21st slot on the list, the county was clear at that meeting the research facility might never recoup its investment.
“Greenwood County makes no guarantee as to when, or if, funds will be available to reimburse the GGC for this project,” the MOU says. “The GGC is undertaking this project now, at its own risk, understanding that Greenwood County will not indemnify the GGC for any liability, financial or otherwise, associated with this project.”
County Council member Mark Allison said he was never privately briefed on the state of collection rates.
“I know the way those projects were, the numbers don’t always come in the way you predict them to do but as far as where that is, honestly and truly, I have no idea,” he said. “I had no conversations with anybody about it.”
Brown said as much himself days after his remarks — made at the same platform used in 2015 to formally announce the county’s intention to seek its second capital project sales tax in a decade.
“Council has not taken a formal position, there’s not been any formal votes. Nobody told me what to say the other day, it was not a formal position of County Council. Those questions were given to me at the last minute and I was just attempting to be as open as I possibly could,” Brown said. “We hadn’t sat around a table and said, ‘We have to divulge this.’”
County Council member Edith Childs declined comment on the matter via text message, referring all questions to Brown and Chappell, but said she was aware of the projected shortfall prior to it being made public.
County Council member Robbie Templeton did not respond to a text message seeking comment, nor did he return messages left on his personal and work voicemails, and councilwoman Melissa Spencer could not be reached for comment — a recorded message said her voice mailbox was full.
With 65% of county voters agreeing to the levy — tacked onto all eligible sales tax items — the county had reason to be confident. After winning approval in 2006 for a first-of-its-kind revenue generation stream in Greenwood County, officials were able to realize $43 million over six years, constructing a new library, building up funds to eventually pay for a federally mandated spillway at the Buzzard Roost dam on Lake Greenwood and retiring millions in outstanding debt.
But for several people closest to the 2016 initiative, including the chairman of a committee assembled to make recommendations about which projects should have made the final cut, Brown’s comments were more eyebrow raising than nostalgic.
“I attended the state of the City/County event. The discussions about the shortfall was the first time I heard about this issue,” David Tompkins wrote.
Tompkins, who responded to a series of Index-Journal questions via email, was chairman of the lead committee that was part of a process that culled the original list of 43 projects and $160 million worth of investment to the 27 that appeared on 2016 ballots, carrying a total cost of $87.9 million — a figure derived from state Office of Revenue and Fiscal Affairs projections, knowledge of the local economy and data from yearly sales tax collections through the 2006 ballot measure.
Frank Rainwater, executive director of the office, said in 2014-15 the county had $617.4 million in total net taxable sales, leading to an estimate in the 2016-17 fiscal year of $5.81 million in revenue from the 1% tax.
“Please also note that our current expectation for the state is continual growth and if there is any significant change in the economy, this estimate would be affected,” Rainwater wrote to then County Treasurer Sharon Setzer on Sept. 10, 2015.
He added that “startup or compliance issues may impact this estimate. Hopefully, any such impact would be minimal, but we would recommend budgeting a lower amount with the hope that more revenue will be collected in the first year.”
With two years of collections now in hand, the county has already surpassed the state’s forecast.
To date, the county has banked $17.52 million through two full years of collections — outpacing the state’s projection by a healthy margin, with $8.44 million taken in during the first year and $9.07 million in 2018 — an annual average of $8.76 million, and a 7.5% year-over-year growth clip.
With eight quarters’ worth of revenue checks, the county only recently had a “firm base of data” to present forward-looking estimates to stakeholders, Chappell, who responded via email to a series of Index-Journal questions, wrote.
“Greenwood County felt it was important to have a firm base of data (8 quarters of actual revenue) so that we would not inform stakeholders to make alternative plans without sound justification. Once we felt that we had sufficient data we met with the effected (sic) stakeholders to apprise them of this information and Wednesday (at the State of the City/County luncheon) the chairman of County Council advised the public,” Chappell wrote.
Josh Skinner, the county’s capital projects coordinator, said waiting any longer to have gone public with anticipated collection rates would have been irresponsible.
“I don’t think it was premature. We are one quarter of the way through the eight-year collection period. We want to be upfront with what we are collecting and what we actually have in the bank. We would rather let these entities know where they stand now rather than right before they were ready to start their project,” he said in an email.
Since June 30, 2013, the county has posted quarterly reports on capital project and sales tax expenditures from its first round of collections, with the most recent from June 30, 2018.
That’s because nearly half of the money — $21.2 million — remains unspent as local officials continue to negotiate with federal regulators over design parameters for the Buzzard Roost spillway.
The statements are available publicly at greenwoodcounty-sc.gov., under the treasurer’s department.
But absent from that page is any data about expenditures or collections from the 2016 assessment, which took effect on May 1, 2017.
A number of investments are already underway because of the 1% levy, including construction on the William “Billy” O’Dell Center for Upstate Manufacturing Excellence at Piedmont Technical College, initial planning and construction estimates for an expansion of the GLEAMNS Dr. Benjamin H. Mays Historical Preservation Site and a sewer line replacement in Ware Shoals, which is ready for construction pending final review by the state Department of Health and Environmental Control.
“The commission was given proposed projects from the various committees that reviewed the initial project list. The commission was also given revenue projections from the proposed sales tax. We then worked to finalize the project list for approval by County Council,” Tompkins said. “Based on the project and revenue projections, it was my understanding that all the projects would be funded.”
A close reading of the referendum question shows the amount to be raised would be an all-encompassing figure to include construction and engineering costs and property acquisition.
“The proceeds of the tax may be used for construction, improvement or procurement of the capital projects listed above, and may also be used for design, engineering, project management and other professional services related to the same,” Section 5 of the question reads.
Minutes from a March 30, 2016 meeting of the capital project sales tax’s lead committee show that officials honed in on a number months earlier.
“Mr. Chappell passed out the worksheet to address the first question, where to set the number. The numbers already listed are the numbers relative to today’s dollars. What is a reasonable figure that will take into consideration an 8 year endeavor with revenue and costs increasing over time. Mr. Chappell described the worksheet. The number that has been calculated to work with is $88,400,000,” according to the minutes, which are posted on the county’s website.
“The capital project sales tax is based on projections, both of anticipated revenue and expenditures,” Chappell wrote in an emailed reply. “The quote that you have cited was our attempt to take dollars from the year 2016 (both revenue and expenditures) and show what these same dollars would have to be over the next 8 years to equal the value of the 2016 dollar.”
By April 7, 2016, the final list of recommended projects was complete, with the committee deciding to take 1.3% of funding from each — a total of roughly $1 million — to contract out management.
Ware Shoals Mayor Bruce Holland was told last month in a meeting with county officials that a $3.9 million allocation from the pool of money to aid in the restoration of Katherine Hall was likely not going to happen.
“That project was right at the cut line and they informed us at that point in time that likely it won’t get funded,” Holland said.
Built in 1913 by Benjamin Riegel as an entertainment and cultural hub for workers at his mill, the 15,637-square-foot building named for his only daughter was deeded to the town in 1967, upon its incorporation.
Slated as the 18th recipient of capital project sales tax revenues, Holland said without the expected funding, modernizing the landmark would be impossible.
“If it can be refurbished and be a center point of this community, I think it would be wonderful, but the bottom line is the town cannot refurbish this building. So without this one-cent tax, it’s not going to be done,” he said.
Also in question is whether the Greenwood County Detention Center will receive $429,939 for repairs and maintenance.
“County Council has always taken care of the sheriff’s office needs, and I am confident that they will identify funding if the capital sales tax funding is not available,” Sheriff Dennis Kelly said in a text message.
The money, Kelly said, would go toward security enhancements such as new cell doors, metal detectors and lighting.
“In the current county budget, it is already approved to replace both A and B unit roofs at the detention center totally unrelated to the capital project sales tax,” Kelly said. “When there was an issue with the cell locks in B unit, the County Council found the money to make their situation safe without using CPST funding.”
Jeff Meredith, general manager of the Greenwood Commissioners of Public Works, was also notified that more than $7 million included on the roster of projects to install new water lines and fire suppression infrastructure in the areas of Harris Landing and Highway 25 South would likely not be realized.
“We do not have any alternative funding plans to proceed with these projects at this time,” Meredith said.
Also on the bubble would be a $1.2 million earmark to The Museum for construction of an exhibition hall to replicate the former Southern Passenger depot that sat along Greenwood’s Main Street.
Museum Director Karen Jennings said she was notified in advance of the luncheon their project likely would fall off the table.
“We did know about the shortfall and that we would not be receiving funding with this tax. The manager of the capital tax project came to tell us in person,” Jennings said. “We are looking at other options, In fact, our board is scheduling a planning and strategy session to look 5 and 10 years down the road to assess our mission, and the best way we can use our train museum and its grounds, and well as how to finance its continued operations.”
Bonnie “Boo” Ramage, interim executive director of the Greenwood Genetic Center Foundation, said campus administrators couldn’t afford to wait to upgrade the facility’s fiber optics network.
“We understood the risk that we might not be reimbursed, but the project needed to proceed. We remain hopeful that the tax collections will improve, original revenue projections are met, and that we might still see reimbursement before the collection period expires,” Ramage said in an email.
Greenwood County Council member Theo Lane — a candidate at the time — was chairman of the capital project sales tax economic development committee and also advocacy chairman for the Greenwood SC Chamber of Commerce in 2016, said assuming the venture will end up $20 million short of projections is premature.
Lane went on to defeat Bob Fisher in that November election.
“I don’t know if we can make that assumption,” Lane said. “I think we’re kind of leaping to think we’ll be $20 million off.”
County Council member Chuck Moates agreed.
“It’s sort of a crapshoot if you ask me. How can you tell something that’s seven years out? You don’t know what kind of economic downturn or upturn will take place,” he said.
Why the hedging?
Aside from the impossibility of predicting the future, what if Greenwood finally lands another big box retailer such as Target? What if state lawmakers make changes to items that can be assessed a sales tax? And what if a project on the list of 27 finds an outside funding source?
“These are projections of events that are not going to happen until the future. No one can tell you today if the 2016 Capital Project Sales Tax will or will not meet expectations in May 2025. There are too many variables that are in play for anyone to accurately make that assessment,” Chappell wrote.
In March, members of a state House tax policy review committee said broadening the base of goods that can be assessed is critical to South Carolina’s long-term financial health.
House research director Don Hottel said at that meeting an immediate change to the system isn’t possible and would have to be rolled out over consecutive years for planning purposes.
“On anything you do, the implementation’s going to be critical. Any changes even of a small magnitude will require substantial phase-in periods,” he said. “If you don’t broaden the base, there is some pressure in the future to raise the rate just to maintain the revenue that you have. The primary issue for policymakers is that sales tax revenues are declining and the state’s dependence on tangible goods is changing.”
A December 2018 Tax Foundation report issued in partnership with the South Carolina Chamber of Commerce outlined some of the ways the state’s 6% sales tax rate is inhibiting economic growth.
“South Carolina, under its state sales tax, does not tax food, candy, and soda, or prescription and nonprescription drugs. The state also imposes low caps on the maximum amount of sales tax owed on the purchases of automobiles (currently set at $500). It thus exempts a sizable and stable portion of consumer spending. The state also exempts most services and select other goods. By law, tangible personal property is included in the sales tax base unless expressly exempted, whereas services are only subject to tax if specifically enumerated,” the report said.
The 6% assessment is on top of any local option taxes implemented by cities or counties. The rate has doubled since first being assessed in 1951.
Perhaps county leaders have reason to believe they’ll end the collection cycle as close to the original goal as they’ve hoped.
“Each quarter, year over year, has shown an increase in actual revenue and I am not aware of anything, as of today’s date, that would materially change this trajectory,” Chappell wrote.
Skinner offered a similar assessment.
“It would be unrealistic to assume no growth over the next six years, which is why we did not. Chairman Brown stated that the revenue actuals are not meeting the revenue projections. That is all that was said,” he said in an email. “We are being cautious, using our quarterly average over the first two years and giving a very conservative estimate as to how much we will collect by 2025.”
A December 2018 report by the University of South Carolina’s Darla Moore School of Business showed consumer spending was up across the board in the sales tax-heavy sectors of wholesale trade, retail trade and leisure and hospitality, while income growth from the third quarter of 2018 through the first four months of 2019 fluctuated between 4.1% and 4.5%.
Statewide personal income increased to $223.8 billion through the first quarter of 2019, according to an August economic outlook compiled by the state Department of Commerce.
In the run-up to 2016 Election Day, public sector critics of the 1-cent tax were hard to find. The Greenwood SC Chamber of Commerce was retained as its marketing arm. And in November 2015 the Greenwood Partnership Alliance’s governing board was told the agency’s Foundation for a Greater Greenwood County committed $15,000 for advertising and promotion.
Angelle LaBorde, the chamber’s president and CEO, said officials remain fully behind the sales tax measure, no matter how much ends up being raised.
“This initiative is critically important to businesses and residents so that Greenwood remains competitive and continues to offer a quality of life that we have all come to enjoy. Regardless of the amount of money ultimately collected, many of the proposed capital projects would not otherwise have been completed if not for this initiative,” she said.
“As a county, we chose to invest in ourselves and in projects that add value to our community. Our hope is that collections will improve over the next several years so that more of the remaining projects come to fruition,” LaBorde added.
But less than three weeks prior to the vote, then County Councilman Bob Fisher urged residents to scrutinize the PR pitch.
He wanted to know what documentation was provided to CPST commissioners justifying Piedmont Tech’s $6 million ask.
“It is also promoted that a percentage of the penny sales tax will come from people who do not reside in Greenwood County. I have heard as much as 30 to 40 percent, but have not seen this documented,” Fisher wrote in an Index-Journal guest column on Oct. 28, 2016. “I do not support the Chamber telling you to vote yes, nor do I support anyone who tells you to vote no.”
Fisher, who lost his council seat to Lane during that same election, said that county leaders should have briefed the public on the state of its collections prior to the controlled State of the City/County event.
“I’m not ready to throw any of my former colleagues under the bus, I am kind of curious as to why. To be off $20 million? I think somebody needs to have a clear explanation of what went wrong,” Fisher said. “Don’t go around trying to find some fancy way to disguise it. Admit it, get it out into the open and just go on.”
County Council had an opportunity to make the public aware of its collection rate during a scheduled meeting on Sept. 3, but the subject was never broached.
Holland, the Ware Shoals mayor, said a broader announcement by county officials over the state of its collections could have helped alleviate taxpayer concern.
“The best way I can answer is this. I hate surprises,” he said. “I guess my concern would be right now, if you wanted to do this thing again, would the citizens support this feeling like they were done wrong? It could have been communicated better, I guess.”
Our View: County voters, taxpayers are stakeholders too
/in Index-Journal”A politician should be able to foretell what is going to happen tomorrow, next week, next month and next year, and after that, have the ability to explain why it didn’t happen.”
Those words, a slight twist on a classic Winston Churchill quote, were uttered by Steve Brown, Greenwood County Council chairman, at the start of the State of the City/County address hosted by the Greenwood SC Chamber of Commerce last month.
Perhaps Brown knew how relevant those words would be as a prelude to what he would next address: Greenwood County’s capital project sales tax, at two years in, is not keeping pace with original projections, and that would mean some of the 27 projects detailed on the 2016 referendum put before the county’s voters would quite possibly wither on the vine.
Apparently a number of the nearly 200 assembled for the meeting were not caught off guard. They knew or had heard that was the case. In fact, it had been a given out the gate that a penny sales tax with an eight-year cap might not raise the revenue hoped for. The figure, after all, was based on what are billed as best estimates and current financials.
The possibility always existed that the economy might not be as robust as anticipated. But the state was not anticipating any major economic changes. It did, in fact, anticipate steady growth. No fears of another 2008 crash and burn. By the same token, it was entirely possible that collections could exceed expectations, especially if Greenwood saw growth in the retail industry.
So just how off were things now that the county had two years of data to dive into ahead of the Aug. 28 announcement? By now, you know that a full third of the 27 projects are potentially in peril. And by now — although again, it’s only an estimate — the county might come up $20 million shy of the nearly $88 million projected to be collected and that would, ostensibly fully fund those projects that dot the county.
You probably recall that when County Council brought forth the referendum, it included an array of projects, from an educational manufacturing center at Piedmont Tech to a park in south Greenwood. From a refurbishment of Katherine Hall in Ware Shoals to water lines being run to Harris Landing. Again, all tallied up there were 27 projects deemed the best of the best and worthy of funding with an extra penny attached to the county’s sales tax rate. And while Greenwood County residents would be contributing to the projects through their own purchases, the best part of the idea is that non-county residents would help us reach that dollar goal. In short, it was and is reminiscent of the tax county residents voted in favor of to build the spillway at the Buzzard Roost dam while also funding the construction of the county’s library.
But while that capital sales tax project exceeded expectations and sunset ahead of schedule, what voters approved this time around in 2016 appears to be falling short. Woefully short, at least at this point. So short, in fact, that county leaders thought it a good idea to let some of the project stakeholders know they might be in for a big Christmas disappointment.
Yes, with such a dire prediction based on two years of data collection, we agree it was a good idea to let Mayor Bruce Holland of Ware Shoals know that Katherine Hall is likely to remain a shell of its former self as the town’s central gathering spot, to let Karen Park Jennings know that the Railroad Museum’s planned depot exhibit hall has been derailed, to let Anne Craig know that renovations to the Arts Center will likely sit on a blank canvas.
Those people are considered the stakeholders who represent the 10 projects that could be left undone when the sales tax collection period ends in 2025. What county leadership apparently forgot, however, is that the voters and taxpayers of Greenwood County are also stakeholders. After all, 65% of those voters were convinced supporting the capital sales tax project was the right thing to do.
We were also convinced and threw our support behind the initiative. We, like most others, had every reason to believe that pen was put to paper, that costs and revenue projections were analyzed and honed and that all, if not most of the projects would come to fruition.
Frankly, we still believe a “yes” vote was the correct vote. Many viable and worthwhile projects will get done and, as such, prove to be positive initiatives for the county now and well into the future.
While the eight-year collection period is six years out and the outlook could change for the better, we and many others were scratching their heads after the Aug. 28 announcement and subsequent story that spelled out in more detail how far off the figures seem to be. OK, maybe $1 million or even $2 million, but as much as $20 million? Fuzzy math? Pie-in-the-sky get the votes math? It’s easy to see why many residents are cynical about the matter, especially given how the potential revenue shortfall was unceremoniously rolled out.
County taxpayers and voters might feel a little less chapped about it all had there been a more public revelation and explanation of the situation. It would have been a good idea for the county manager, Toby Chappell, and the CPST projects manager, Josh Skinner, to make a formal presentation before County Council. In public session.
Sure, it doesn’t look good that upwards of a third of the projects might not get done because upwards of $20 million might not get collected, but it looks worse when transparency took a back seat.
Think about it. The 2006 capital project sales tax that will fund the dam project and built the library are spelled out in great detail on the county’s website. The 2016 CPST? Well, that has yet to find a home where residents — voters and taxpayers, that is — can track it.
“A politician should be able to foretell what is going to happen tomorrow, next week, next month and next year, and after that, have the ability to explain why it didn’t happen.”
Agreed. The ability was there. It just did not happen without a good amount of effort.
Business, economic development leaders back Highway 246 widening project
/in UncategorizedSome of Greenwood County’s most influential business and political leaders are backing its first request for state Infrastructure Bank aid — $38 million to widen a crucial transportation corridor that supports thousands of jobs in the region.
On Friday, officials publicly released the county’s 28-page application to the bank, which asks for help to widen four miles of South Carolina Highway 246 from two lanes of traffic to four, with a shared central median as a fifth lane.
The pitch includes letters of support from state Sen. Floyd Nicholson, D-Greenwood, Greenwood Partnership Alliance chief Heather Simmons Jones and CEOs from several of area’s largest employers.
If state leaders approve the county’s proposal, the money will be combined with almost $12 million being generated through a voter-approved 2016 capital project sales tax.
“The considerations for the widening of Hwy 246 are numerous. There are four major companies immediately located in this section with an additional three companies intersecting for a total of seven companies located in this area,” Jones wrote in an Aug. 21 letter of support to Infrastructure Bank board chairman John B. White, Jr.
Combined, those seven businesses (Ascend, Eaton, Enviva, Fujifilm, Lonza, Teijin and Velux) have invested $719 million and created 398 jobs since 2015. In all, those firms employ 3,660 people.
And by 2030, according to estimates included in the county’s application, the population is expected to see a 13.4% increase in the area where Highway 246 is located. Its daily traffic count — currently 7,200 — is anticipated to rise to 10,000 by 2045.
The stretch to be widened runs from its intersection with U.S. Route 221 to Emerald Road, and improvements to it have been identified as priorities from both the state Department of Transportation and the Upper Savannah Council of Governments.
While the project is seen as a major need for future commerce, part of the reason it’s so expensive is because of its past.
In 1958, a railroad bridge was built in the center of the proposed widening area — a structure considered obsolete by modern standards. Removing it and incorporating the dimensions into the overall plan will cost almost $20 million.
“The Hwy 246 corridor in Greenwood County has become an important economic development hub in the region with industries such as FUJIFILM, Ascend, Teijin and Enviva either breaking ground or increasing production in their factories on this particular stretch of road,” Nicholson wrote in a letter of support.
Last month, the County Council unanimously approved a resolution endorsing the Infrastructure Bank application — a requirement for eligibility.
County leaders plan to pursue federal funds as well through the U.S. Department of Transportation’s Infrastructure for Rebuilding America grant program.
With traffic flow projected to rise over the next 20 years, officials said in their application the median will be added as a safety feature.
“The shared center median would likely reduce head-on collisions by providing for a 15-foot separation between motorists traveling in opposite directions,” county officials said.
Established in 1997, the state Infrastructure Bank has a future funding capacity of $728 million. Applications are being accepted through Sept. 1. Eligible projects must cost at least $25 million.
The bank’s board has set a tentative deadline of Oct. 31 to decide which requests should be funded.
Teijin Carbon Fiber Inc. President Yukito Miyajima said a modernized Highway 246 is essential for his company’s massive Greenwood County footprint. The Japanese carbon fiber manufacturer is spending $600 million on a plant set to open next year.
“We will then add two additional lines of production. Construction of our entire facility will not be complete until 2030. During that period, there will be hundreds of construction workers as well as countless numbers of large trucks entering and exiting our facility,” Miyajima wrote to the Infrastructure Bank. “To ensure the safety of the community, our facility and neighboring facilities we see the need for the widen (sic) of Hwy 246 South.”
Bradley set for fire station after 20-year wait
/in Index-JournalA more than 20-year wait by southern Greenwood County residents for a Bradley fire department substation is finally over.
On Tuesday, county officials learned of plans to build a 2,700-square-foot facility at 4301 Highway 221 S., using $228,000 from the latest round of collected capital project sales tax dollars.
Josh Skinner, the county’s CPST coordinator, said Greenwood-based Gordon Group was chosen among five bidders for the contract. Construction could begin this summer.
“We feel pretty confident we’re going to get in under budget and under bid,” Skinner told the County Council.
Bringing the station online is a small part of an overall $14.24 million plan to overhaul the county’s fire services system. Voters approved the allocation in 2016.
Between this year and 2022, officials plan to construct five additional stations at a cost of roughly $3.9 million. That’s important, public safety experts say, because there are 1,720 structures in the county classified as having no fire protection by insurance providers because they fall outside of a 5-mile radius, carrying a total property value of nearly $59 million.
County Fire Coordinator Steve Holmes said crews from Promised Land and Troy will man the Bradley site, which is receiving a new vehicle and one currently being stored at a federal Forestry Service location nearby.
Tuesday marked the second time in as many weeks that county leaders discussed expansion plans using capital project sales tax dollars — with talks earlier this month centering on recreational assets.
In Ninety Six on Monday, the Town Council tabled a resolution about what to do with $450,000 set aside to construct a park there, either at the old mill site or another location.
Meanwhile, councilwoman Edith Childs — whose district includes Bradley — said she was appreciative of the planned venture. She even pushed to get a second bathroom added at a cost of $5,000 to ensure the comfort of those working out of the building.
“We waited 20 years, so I’m grateful,” she said.
Ninety Six sorting out confusion over CPST funding
/in Index-JournalPassions flared Monday night after a misunderstanding about how capital project sales tax funds would be used left some at the Ninety Six Town Council meeting upset.
When the town first applied to have its park considered for funding under the 2016 capital project sales tax referendum, the application specifically proposed funding be used on a new park at the old Ninety Six Mill site. Through the CPST committee application review process, a committee decided the money would be better used if applied to the town’s existing park, Mayor Mike Rowe said.
When the referendum hit the ballot in November 2016, its language reflected that the money raised would be allocated to the town park — a detail Ninety Six Parks Committee head JoAnn Eichelberger and others were not aware of.
“The initial application was for the Ninety Six mill park,” she said to council at Monday’s meeting. “This was never, ever to be the town park.”
Ward 3 Councilman Wayne Gibert explained the process by which the application was reviewed, and the current recommendation was made by the CPST committee in June 2016, and said since the tax referendum passed by popular vote, the funds must be allocated as they were written on the ballot.
“By law, that funding has to go to it as it was listed,” he said.
After going into a closed-door session, the council came back and voted unanimously to table discussions on a resolution to formally decide what to do about the CPST funds. Rowe said the tabling is just to give them time to work out the legal language of the resolution
The funds from the CPST would amount to about $450,000 for Ninety Six’s town park, Rowe said. While that would be about a quarter of the cost of building the proposed mill site park, that money would go a long way toward upgrading the town’s existing park.
Since the CPST funds must be used the way the referendum laid out, Rowe said if the choice is between receiving $450,000 or not getting the money, they’ll take the money no matter where it’s going.
“At the end of the day, it’s still money going toward bettering the town,” he said. “And we’re not abandoning the idea of the mill site park. We’ll just have to work to find different funding for that.”
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