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City of CHARLESTON, SOUTH CAROLINA City Council Minutes

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City of CHARLESTON, SOUTH CAROLINA City Council Minutes December 17, 1996 COUNCIL CHAMBER Regular Meeting. December 17, 1996. The twenty-fourth meeting of the City Council of Charleston was held this date convening at 6:05 p.m. in City Hall. A notice of this meeting and an agenda were mailed to the news media December 13, 1996 and appeared in The Post and Courier December 17, 1996. PRESENT The Honorable Joseph P. Riley, Jr., Mayor, and Councilmembers Hagerty, Lewis, Washington, Evans, Ader, Shirley, Hart, and Thomas--9. Mayor Riley noted Councilmembers Kinloch, Jefferson, Scott and Waring would not be able to attend the meeting due to illness. Councilmember Ader arrived late (6:25 p.m. during the Report from the Committee on Human Resources) because she attended the Board of Adjustment - Zoning meeting prior to the Council meeting. The meeting was opened with prayer by Councilmember Shirley. Councilmember Shirley led City Council in the Pledge of Allegiance. The first item on the agenda was a public hearing called for by the following advertisement which appeared in The Post Courier on December 8, 1996, in The Chronicle on December 11, 1996, and in The Coastal Times on December 11, 1996. NOTICE OF PUBLIC HEARING CITY OF CHARLESTON, SC 1997 BUDGET The public hereby is advised that on Tuesday, December 17, 1996 beginning at 6:00 p.m. in City Hall, 80 Broad Street, the City Council of Charleston, SC, will hold a public hearing on the City's 1997 budget and give second and final readings and ratify an ordinance to adopt the budget. The total projected revenues and operating expenditures for the present and next fiscal years are as follows: GENERAL FUND AND ENTERPRISE FUNDS |1996 |1997 |BUDGET |BUDGET | | ____________________________________________________________________________ __ REVENUES AND OTHER |$69,810,381 |$72,260,586 FINANCING SOURCES | | ____________________________________________________________________________ __ EXPENDITURES |$69,810,381 |$72,260,586 The estimated change in the 1997 budget is $2,450,205 or a 3.5% increase. The current fiscal year effective millage rate for home owners for general operations is 86.6 mills. The projected 1997 effective millage rate for home owners will be 84.6 mills. The total projected property tax revenue for 1997 is estimated to be $26,433,771. VANESSA TURNER-MAYBANK Clerk of Council The Mayor invited comments from the public regarding the 1997 City Budget. No member of the public wished to speak for or against this matter. The Mayor declared this public hearing concluded. Council was in receipt of the following memorandum from the Mayor regarding the refinancing of some of the 1991 bond issue: MEMORANDUM TO: Charleston City Council FROM: Joseph P. Riley, Jr., Mayor DATE: December 17, 1996 By Ordinance adopted at the December 3 meeting, City Council authorized the refinancing of some of the 1991 bond issue to achieve a savings in principal and interest payments. Those refunding bonds were offered at public sale at noon today. A total of eight bids were received, the winning bid producing a savings to the City of approximately $783,000 by reducing future debt service payments. The winning bid was submitted by William R. Hough & Company, an investment banking firm which recently opened an office on East Bay Street. Other bidders include J. C. Bradford, First Union, NationsBank, Wachovia, Morgan Keegan, Robinson-Humphrey and Interstate/Johnson Lane. The slight rise in rates over the last few weeks limited the savings to $783,000. However, rates are much below their 1991 levels and a significant savings has been achieved through the refinancing. In connection with this borrowing, it was necessary to ask Moody's and Standard & Poor's to rate the financial condition of the City. Both rating agencies affirmed the AA rating enjoyed by the City. As you know, the only two municipalities in South Carolina which enjoy this high a general obligation rating from both Moody's and Standard & Poor's are Charleston and Columbia. The morning's sale of refunding bonds illustrates the ong oing effort the City goes to in order to make certain we continue to make the City's borrowing needs more efficient when the interest rate markets permit. By this memo, I simply wanted to report to you on the economic benefits produced by the refinancing. Council was also in receipt of the following memorandum from Mayor Riley regarding the $4.3 million general obligation bond issue for recreational facilities in 1997: MEMORANDUM TO: Charleston City Council FROM: Joseph P. Riley, Jr., Mayor DATE: December 17, 1996 The purpose of this memo is to expand upon my suggestion to you that the City consider a $4.3 million general obligation bond issue for recreational facilities in 1997. As you consider this suggestion, I offer the following information concerning the City's borrowing practices. The City has been deliberate in its use of bonded indebtedness as indicated by the enclosures, the first of which is my August 1993 letter to representatives of Moody's on the occasion of their visit to Charleston to make an assessment of the economic consequences of base closure. The second enclosure is from the City's recent official statements. These two enclosures provide the context which recommends going forward with the $4.3 million bond issue proposed for 1997. The excerpt from the official statement notes that: the City recognizes that many municipal projects are not by their nature revenue producing. Examples include certain public safety needs such as police and f ire fighting buildings and equipment as well as providing parks and recreation . The 1995 Bonds, the 1982 Bonds, the 1986 Bonds, the 1987 Bonds and the 1991 bonds issued for such projects as parks acquisition and development maintenance and improvement of the City's public buildings and public safety improvements such as police and fire protection are all issued under the City's 8% debt limit. The City's outstanding debt will be paid by the year 2015. The outstanding debt has been structured in such a way as to permit relatively rapid repayment so that those generations which follow us can not only enjoy the facilities we leave to them but also undertake whatever necessary capital improvements arise during their stewardship. To illustrate, projected gross millage necessary to pay outstanding general obligation debt for which taxes should be levied are as follows: Year |Mills | ____________________________________________________________________________ __ 1997 |16.83 | ____________________________________________________________________________ __ 1998 |15.74 | ____________________________________________________________________________ __ 1999 |15.71 | ____________________________________________________________________________ __ 2000 |15.34 | ____________________________________________________________________________ __ 2001 |14.06 | ____________________________________________________________________________ __ 2002 |14.29 | ____________________________________________________________________________ __ 2003 |14.29 | ____________________________________________________________________________ __ 2004 |14.05 | ____________________________________________________________________________ __ 2005 |13.70 | | ____________________________________________________________________________ __ 2006 |13.19 | ____________________________________________________________________________ __ 2007 |10.52 | ____________________________________________________________________________ __ 2008 |7.83 | ____________________________________________________________________________ __ 2009 |7.61 | ____________________________________________________________________________ __ 2010 |7.25 | ____________________________________________________________________________ __ 2011 |7.04 | ____________________________________________________________________________ __ 2012 |6.71 | ____________________________________________________________________________ __ 2013 |4.44 | ____________________________________________________________________________ __ 2014 |4.31 | ____________________________________________________________________________ __ 2015 |4.18 I propose structuring the 1997 borrowing in such a way as to dovetail its payment obligations with existing debt service requirements so as to minimize millage impact. Doing so is consistent with the City's philosophy of the last two decades regarding debt as well as the prudent approach taken with debt by responsible political subdivisions. As our City grows, it is appropriate to make capital improvements for the benefit of our citizens. We and previous generations have enjoyed the parks and playgrounds which were made available to us. The suggestion I offer to you will provide similar facilities to growing parts of our City. The cost of these capital improvements may be paid in the manner contemplated by our State Constitution and laws and in a manner which is consistent with the City's history of prudent use of its borrowing power. August 9, 1993 BY HAND Diana Roswick, Vice President & Manager Barbara Boulle', Senior Analyst Moody's Investors Service, Inc. 99 Church Street New York, NY 10007 Dear Ms. Roswick & Ms. Boulle' I look forward to meeting you at 11:00 A.M. tomorrow. In anticipation of that meeting, I thought it might be helpful to offer a discussion of the approach the City has taken to financing capital improvements during my terms as Mayor. Thus, the purpose of this letter is two-fold (I) to illustrate certain characteristics of the City's capital improvement plan by using several
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