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Tuesday,
May 23, 2000 Richland
County Council Chambers Call To Order Approval of Minutes - April 25, 2000: Regular Session Meeting - (Pages 2-5) Adoption of Agenda Items for Action
Items Pending Analysis
Items for Discussion / Information
Adjournment Staffed by
Pam Davis
PRESENT: Joseph McEachern, Chair; Paul Livingston; Anthony G. Mizzell; Stephen F. Morris; James Tuten OTHERS PRESENT: Kit Smith, Susan Brill, J.D. "Buddy" Meetze, L. Gregory Pearce Jr., Bernice G. Scott, Thelma Tillis, T. Cary McSwain, Michielle Cannon-Finch, Tonya Dunham, Mullen Taylor, Milton Pope, Ash Miller, Pam Davis, Tony McDonald, Chief Harrell, Rodolfo Caldwell, Michael Byrd, Larry Smith, Sherry Wright, Andy Metts, Judy Carter CALL TO ORDER The meeting was called to order at approximately 6:10 p.m. Approval of Minutes - March 28, 2000 Mr. Tuten moved, seconded by Mr. Mizzell, to approve the minutes. The vote in favor was unanimous. ADOPTION OF AGENDA Mr. Morris requested to move Item-A after Item-H in order for Council to receive public input. Mr. Tuten moved, seconded by Mr. Mizzell, to adopt the agenda as amended. The vote in favor was unanimous. ITEMS FOR ACTION Detention Center's Produce and Eggs Contract: Senn Brothers Mr. Morris moved, seconded by Mr. Mizzell, to approve a purchase in the amount of $50,000.00 for produce and eggs for the Detention Center's Food Service Division. The vote in favor was unanimous. Detention Center's Milk and Milk Products Contract: Coburg Dairy Mr. Morris moved, seconded by Mr. Mizzell, to approve a purchase in the amount of $100,000.00 for milk and milk products for the Detention Center's Food Service Division. The vote in favor was unanimous. Detention Center's Bread Contract: Merita Mr. Morris moved, seconded by Mr. Mizzell, to approve a purchase in the amount of $50,000.00 for bread for the Detention Center's Food Service Division. The vote in favor was unanimous.
Maintenance of the Bluff Road Facility Housing and Energy Plant Mr. McSwain stated this includes a 5% increase. Mr. Morris moved, seconded by Mr. Livingston, to approve the expenditure in the amount of $78,984.00 for maintenance of the Bluff Road Facility Housing and Energy Plant. The vote in favor was unanimous. Amendment to Central Midlands' Creating Agreement Mr. Morris moved, seconded by Mr. Livingston, to approve an amendment to the Central Midlands' Council of Governments creating agreement. The vote in favor was unanimous. "Project Harvey" Procurement Mr. Morris moved, seconded by Mr. Mizzell, to approve entering into two separate construction contracts. Mr. McSwain requested Council to approve this item contingent upon the State considering an additional $88,754.00. He stated the contract bid came in over the amount of money that they had agreed to provide for the road access. Mr. McSwain stated the State has been contacted to provide the additional money for which they are considering. The vote in favor was unanimous. Haskell Heights Sewer Project Mr. McSwain stated this is Phase II of the project. He stated the actual funds would not be approved until next year's budget. Mr. Mizzell moved, seconded by Mr. McEachern, to approve to commit to $49,700.00 in matching funds in order to apply for a $497,000.00 grant from the Community Development Block Grant Program. The vote in favor was unanimous. ITEMS FOR DISCUSSION/INFORMATION Funding Strategies for the Township Auditorium Mr. Morris suggested forwarding this item to the Township Board for information requesting their response. Mr. McSwain stated the Board Chair has written a letter requesting consideration of including the Township with the Conference Commission and to pay for this out of the Tourism and Development Fee money.
Mr. Morris moved, seconded by Mr. Mizzell, to send this item to the Township Board for their full input and have by the next Administration and Finance Committee meeting. Ms. Scott stated the Board met in Executive Session to discuss this issue. Mr. Pearce stated a vote was not taken. Mr. Morris called for the question. The vote in favor of the motion was unanimous. Local Option Sales Tax: Schedule Mr. McSwain stated this is for information for Council. He requested a work session to discuss the outcome of this and a report from the Advisory Committee. Mr. Morris moved, seconded by Mr. Livingston, to accept this as information. Mr. Mizzell stated the Committee is looking at the regressive nature of the sales tax and tourist factors. The vote in favor was unanimous. At-Large Riverbanks Zoological Park & Botanical Garden Board Appointment Mr. McSwain stated this is a request from Lexington County suggesting alternating the position of appointment between Lexington and Richland Counties. He requested referring this item to the Rules and Appointment Committee. Mr. Morris moved, seconded by Mr. Livingston, to refer this item to the Rules and Appointment Committee. The vote in favor was unanimous. Olympia Redevelopment The following people spoke "in favor" of the redevelopment: Mr. Doug Hartley, Ms. Vi Vazani, Mr. Tim Bright, Mr. Bob Guild, Mr. Larry Gates, Mr. William D. Davis. The following people spoke "in opposition" of the redevelopment: Mr. Bill Hilliard, Ms. Betty Hilliard, Ms. Amy Koon, Ms. Carolyn Caraman, Ms. Doris Raynor, Ms. Corena Branham, Mr. Richie Spencer. A discussion took place. Mr. Morris moved, seconded by Mr. Tuten, to forward this item without a recommendation and have the Chair to decide where and when to have it on the agenda. Richland
County Council Mr. Livingston
made a substitute motion, seconded by Mr. Mizzell, to move this item forward
for First Reading and requested for the administrator to begin the process
of establishing an Olympia Tax Increment Financing District to pay for
the road. Ms. Smith informed Council that Third Reading would not be held until July 18th which would give Council a considerable amount of time to continue working on this item. She also informed the public that a public hearing will be held on this issue and citizens would not need to speak at every meeting regarding this issue restating the same information. Mr. Morris called for the question. The vote for the substitute motion was as follows:
The motion passed. Mr. Morris and Mr. Tuten stated they only voted for this item to move it forward for discussion and that they are not taking sides. ITEMS PENDING ANALYSIS There are currently no items pending analysis ADJOURNMENT The meeting adjourned at approximately 7:11 p.m. Submitted by, Joseph McEachern, Chair Marsheika G. Martin transcribed the minutes. Richland County Council Request of Action Subject: Renewal of Autopsy Contract for Richland County Coroner A. Purpose
B. Background / Discussion
C. Financial Impact
D. Alternatives
E. Recommendation
F. APPROVALS Finance: Procurement: Grants: Legal: Administration: Richland County Council Request of Action Subject: Consolidated Services - Records Storage Contract A. Purpose
C. Financial Impact
D. Alternatives
E. Recommendation
F. Approvals Finance Procurement Grants Legal Administration Richland County Council Request of Action Subject: Emergency Services Purchase Orders For Year 2000-2001 ESD062000 A. Purpose
B. Background / Discussion
C. Financial Impact
D. Alternatives
E. Recommendation
F. Approvals Finance Procurement Legal Administration Richland County Council Request of Action Subject: Ambulance Chassis Purchase ESD052000 A. Purpose
B. Background / Discussion
C. Financial Impact
D. Alternatives
E. Recommendation
F. Approvals Finance Procurement Legal Administration Richland County Council Request of Action Subject: Dive Gear Purchase A. Purpose
B. Background / Discussion
C. Financial Impact
D. Alternatives
E. Recommendation
F. Approvals Finance Procurement Grants Legal Administration Richland County Council Request of Action Subject: HDE: Robot System A. Purpose
B. Background / Discussion
C. Financial Impact
D. Alternatives
E. Recommendation
F. Approvals Finance Procurement Grants Legal Administration Richland County Council Request of Action Subject: Columbia Cellular Telephone Lease A. Purpose
B. Background / Discussion
C. Financial Impact
D. Alternatives
E. Recommendation
F. Approvals Finance Procurement Grants Legal Administration STATE
OF SOUTH CAROLINA An Ordinance authorizing the execution of a lease with Columbia Cellular Telephone Company for the construction and operation of a cellular communications tower at the Richland County Judicial Center, 1701 Main Street in Richland County. Pursuant to the authority granted by the Constitution and the General Assembly of the State of South Carolina, BE IT ENACTED BY THE COUNTY COUNCIL FOR RICHLAND COUNTY: SECTION I. The Chair of the Richland County Council, and in her absence, the Vice Chair, are hereby authorized to execute a lease with the Columbia Cellular Telephone Company for the construction and operation of a cellular communications tower at the Richland County Judicial Center, 1701 Main Street in Richland County. A copy of the lease shall be attached hereto and made a part hereof. SECTION II. Severability. If any section, subsection, or clause of this ordinance shall be deemed to be unconstitutional or otherwise invalid, the validity of the remaining sections, subsections, and clauses shall not be affected thereby. SECTION III. Conflicting Ordinances Repealed All ordinances or parts of ordinances in conflict with the provisions of this ordinance are hereby repealed. SECTION IV. Effective date This ordinance shall be enforced from and after , 2000. RICHLAND COUNTY COUNCIL
ATTEST this
the day of
Richland County Council Request of Action Subject: Local Option Sales Tax Referendum A. Purpose
B. Background / Discussion
C. Financial Impact
D. Alternatives
E. Recommendation
F. APPROVALS Finance Procurement Grants Legal Administration Summary and Overview to the In November 1999, the Richland County Council, through the initiative of Councilmember Tony Mizzell, began considering ways to relieve the pressure of property taxes on homeowners in the County. The catalyst for this review was the 1999 residential reassessment. Other pressures also contributed, however, including the constant pressure on the County to provide more services without raising taxes, the possibility of losing significant revenues through reduced vehicle taxes, and the persistent awareness that Richland County has considerable numbers of users of its services and infrastructure who do not pay for that use. To thoroughly investigate the local option sales tax as a viable option for Richland County, Councilmember Mizzell formed the Local Government Finance Advisory Committee. Community leaders representing all related interests were invited, including the business community, academic community, social and civic organizations, government leaders, and citizens. (See ITEM A for all those invited and attending.)* Their charge was to review the appropriateness and desirability of a local option sales tax for Richland County residents. (See ITEM B for the charter.) Another question posed by Councilmember Mizzell is whether or not the local option sales tax makes financial sense for Richland County. To investigate this, an Executive Subcommittee was formed. (See ITEM C for their mission statement.) This group of eight Chief Executive Officers from the business community, noted with a "v" beside their names on ITEM A, considered other revenue generating possibilities and looked in great detail at Richland County's finances. Their final meeting was May 5th, and their recommendation is included with the Committee's recommendation. The process of learning about the local option sales tax has been "taxing" at best, but progress towards better understanding is being made. (See ITEM D for the list of all information provided to Committee members.) The primary issues identified early on include the tax's regressivity, trust in local government officials, and the local option sales tax's effects on comparable counties which have passed the tax. Each meeting attempts to address these issues and provide answers to the questions raised by members at the previous meeting. (See ITEM E for a list of their questions and answers.) A few tax-relief programs currently in place in various counties were also explored, such as the tax work-off programs in Aiken, Dorchester, and York Counties and the tax payment assistance programs in Richland County. To further explore the issues with the local option sales tax, several speakers were invited to talk with the group. Dr. Holley Ulbrich of the Strom Thurmond Institute gave an economic perspective, while Howard Duvall of the Municipal Association gave a nuts-and-bolts overview to the local option sales tax and how it works. Harold Bisby and Keith Bustraan, Charleston County's Controller and Deputy County Administrator, respectively, discussed their experiences with the local option sales tax in Charleston County. Don Weaver, President of the SC Association of Taxpayers and a member of the committee, also spoke on his perspective of the local option sales tax. All "Item' attachments will be distributed upon request at the Committee meeting. Several important lessons were learned, relating to the complexity of the local option sales tax. First and foremost, the local option sales tax is not so much about replacing one tax with another as it is about having users of County services and infrastructure to pay their fair share: users such as commuters, shoppers, visitors/tourists, and others, estimated at over 75,000 people a day. (See ITEM F for an explanation of this number.) The local option sales tax is also not intended to be a tax cut. Property tax millage rates will continue to rise whether or not a local option sales tax is passed. These increases are necessary to keep pace with the rising costs of providing services and maintaining infrastructure. The local option sales tax is, however, a means of reducing the homeowners' burden of paying for these costs by sharing it with other, currently non-paying, users. Understanding this is critical to separating the local option sales tax issue from the issue of trust or distrust of local government officials. This distrust may be more of an issue, however, if the roll-back is less than 100% - since some of the revenues generated would then be used for "other purposes" besides property tax relief. Any distrust of local officials, though, is more appropriately resolved in the ballot box, not through other local government issues. A third major lesson of the local option sales tax is that County government does not gain by having a local option sales tax if 100% of the revenues generated are committed to property tax relief, as supported by Councilmember Mizzell. Then why bother? Because it diversifies the County's revenues, important to sound financial health, by reducing reliance on the property tax. It is also a financially responsible practice for those using County services to pay for that use. Additionally, the local option sales tax is a faster growing revenue source, averaging 8% annually, than the property tax, averaging 3% annually. Even in economic downturns, the revenues generated by the local option sales tax have never decreased below the previous year's revenues. The local option sales tax would also provide tax relief to the large group of residents who have been paying more than their fair share for the County's services. Another important aspect of understanding the local option sales tax is knowing when it is may be appropriate for a county. There are typically three conditions which are favorable for a local option sales tax. The first is having many tax-exempt parcels, such as the County's many university and federal properties, totaling 4,323 in Richland County. The second is having many visitors/tourists; Richland County is projected to have 2,458,611 visitors in the year 2000. The third is being a large shopping hub: in 1998 Richland County had 41% of the businesses in the area (including Richland, Lexington, Sumter, Kershaw, Fairfield, and Newberry counties) and 56% of the taxable sales. As with anything, however, there are also drawbacks to the local option sales tax. The tax is regressive, meaning low and moderate income residents spend a greater percent of their income on sales tax than do higher income residents. The State Legislature, however, has lessened the regressivity by exempting many items from the sales tax or capping the sales tax paid, including rent, gasoline, residential electric bills, water bills, food purchased with food stamps, prescription medicine, aircraft, motor vehicles, motorcycles, boats, trailers and semi-trailers pulled by truck tractors, self-propelled light construction equipment, mobile homes, musical instruments, and office equipment purchased by certain religious organizations. The tax also does not benefit renters as much, as direct property tax relief would be limited to their vehicles. While renters pay property taxes through their rent, it is not expected that rents would decrease if property taxes are reduced, although the rent may not increase as much as it might otherwise. To conclude this investigation, the Committee met on May 15th to develop a recommendation for presentation to the County Council. Members almost unanimously supported the Executive Subcommittee's recommendation, voting 14-2 to approve that recommendation to serve as their own recommendation as well. This recommendation addressed the issues raised by the Committee and the Executive Subcommittee. Such widespread support for the same recommendation was rewarding, an indication of the members' consensus on the matter. However, the concerns which stilled two members' support remain the regressive nature of the tax and the distrust of government. These concerns will remain an issue as the local option sales tax conversation progresses from committee to Council to community and will need to be acknowledged and addressed. The Committee's recommendation goes to the Administration & Finance Committee on May 23rd. The Local Government Finance Advisory Committee is an advisory committee, and Council may consider their recommendation during the course of their own deliberations. The deadline for notifying the Election Commission to have a November referendum on the local option sales tax is September 1, 2000. There is much work to be done to thoughtfully prepare for that decision. If Council decides to go ahead with a referendum, a long road of community-wide education and marketing lies ahead. If not, then there is still a diverse body of Richland County community leaders with a much better understanding of local government financing and the local option sales tax in particular. Such an education is always a valuable asset to any community, and Richland County is fortunate to have these interested leaders committed to the best interests of the community. Recommendation
of the Executive Subcommittee At Richland County's request, the Executive Subcommittee of the Local Government Finance Advisory Committee comprehensively reviewed the County's financial picture. Its purpose was to determine appropriate long-term revenue sources to provide property tax relief and whether a local option sales tax is a financially viable option to accomplish this. This shall serve as the Executive Subcommittee's summary and recommendation. This report was also supported by the Local Government Finance Advisory Committee at its final meeting on May 15th to serve as its final recommendation as well. The members identified several long-term revenue opportunities for the County. The Capital Projects Sales Tax, an optional one-cent sales tax, requires, upon passage by voter referendum, that all revenues generated be used for previously specified projects. The duration of this optional sales tax is seven years or until all projects are completed, whichever is sooner. While this sales tax would address certain priorities of the County, the identification of projects to be included is beyond the timeframe desired for this November ballot. Another drawback to this sales tax is that it addresses the County's capital needs at one point in time, although these needs continuously require attention in one area or another, something to consider for a local option sales tax at less than 100% roll-back. The Capital Projects Sales Tax should, however, remain an option worthy of future consideration. Another long-term revenue opportunity is increasing user fees simply to keep pace with inflation. The cost of providing services continuously increases as a result of inflation, and it does not appear to be unreasonable to ask the users of these services to share in this cost. This County may already practice such inflationary cost increases, but this information was not provided. (Some user fees are set by the State, but those fees under the County's jurisdiction are evaluated during each budget session to determine whether they cover the cost of providing the service.) Members recognized that this may be unpalatable, but it is a financially sound practice for those who use services to pay for them. A third long-term revenue opportunity, considered in more detail, is the local option sales tax. While it provides the greatest opportunity for property tax relief, it also is the most complex option considered, with significant strengths and weaknesses that were carefully discussed and weighed against each other. The local option sales tax, at its most basic level, redistributes the tax burden. Currently the burden of paying for all County services rests with property tax owners: owners of homes, cars, businesses, rental homes, and other taxable property. As this group's property taxes are reduced through a local option sales tax, other groups who do not currently pay property taxes would begin to pay for their use of County services. These groups include tourists in the traditional sense, commuters, and visitors. Visitors refer to shoppers, university students, Fort Jackson trainees, people meeting with many of the organizations headquartered in the state's capital, legislators, drivers passing through on the county's three interstates, and attendees at various entertainment events such as football games, Coliseum concerts, the State Fair, the Koger Center, and others. This redistribution provides a more equitable means of paying for the County's services. There are other advantages to the local option sales tax as well. Aside from equitable distribution of paying for County services, it also provides property tax relief to those who have traditionally paid more than their fair share for those services. The sales tax is also the preferred form of taxation, shown by poll after poll, for two reasons: you pay more only as you spend more; and it is paid a little bit at a time, with every purchase, so its cost nearly disappears. Another benefit of the local option sales tax is that it is a faster growing revenue source than the property tax. Property taxes in Richland County have increased an average of 3% annually, while the local option sales tax generally grows an average of 8% a year. It is known also that, even in years of economic downturn, the sales tax has never decreased, although it has at times remained constant. But all is not perfect with the local option sales tax, and its drawbacks were carefully considered. Although "the more you spend, the more you pay" is true, as a percentage of a person's income, it is not true. The sales tax is regressive, meaning that as a person's income decreases, the percentage of that person's income spent on sales tax increases. A person earning less than $10,000 is projected to spend 0.48% of their income on the local option sales tax, while a person earning more than $100,000 would is projected to spend 0.18% of their income on the local option sales tax. The State Legislature, however, has addressed this issue by exempting many items which most low and moderate income residents spend their money from the sales tax. These items include: rent, gasoline, residential electric bills, water bills, food purchased with food stamps, and prescription medicine. Other items have sales tax capped at $300, such as aircraft, motor vehicles, motorcycles, boats, trailers and semi-trailers pulled by truck tractors, self-propelled light construction equipment, mobile homes, musical instruments, and office equipment purchased by certain religious organizations. Another disadvantage of the local option sales tax is how it affects, or does not affect, renters. Members recognized that renters pay property taxes indirectly through their rent. Although they would have to pay the extra cent sales tax along with everyone else, it is likely that they will not benefit from the reduced property taxes by reduced rents. It is believed, however, that their rents will remain stable or not increase as much as they might without the property tax relief provided by the local option sales tax. In addition to the characteristics of the local option sales tax, both good and bad, members also reviewed the County's long-term financial outlook. One ominous threat to the County's balance between finances and services is the impact of the November referendum on reducing automobile taxes. If the referendum passes as expected, the County is projected to lose $5 million a year. This revenue must either be found from another source, or services must be reduced or eliminated. The local option sales tax, if passed at less than 100% roll-back, provides an alternative revenue source. Members also looked to the experiences of other, comparable counties with the local option sales tax to see what sort of financial impact the local option sales tax has had on them. Charleston and Florence Counties' local option sales tax were reviewed, and the effect has been significantly positive. The Counties' reliance on the property tax was reduced in both cases: Florence County from 38% to 19%, a 50% reduction in just six years while Charleston County reduced its reliance on the property tax from 55% to 34%, a 37% reduction in eight years. Richland County's reliance on the property tax is expected to experience a similar decrease if the local option sales tax is passed. Regarding growth of the local option sales tax revenues, Charleston County has seen a 33% increase in local option sales tax revenues over eight years, while Florence County experienced a 25% increase over the last five years. Richland County is expected to follow a similar upward trend. After much thoughtful discussion of these considerations, the Executive Subcommittee and its parent Local Government Finance Advisory Committee recommends that the local option sales tax be placed on the November ballot. It is further recommended that Richland County Council pledge, with a vote on an ordinance, to use 100% of the revenues generated for reducing property taxes, as it is the Committee's chosen intention of the local option sales tax and is the easiest form for voters to understand. Whatever the County Council ultimately decides with this difficult and complex issue, there are always opportunities to address the challenges which are an integral part of governing a large, diverse organization. |