NEWBERRY COUNTY COUNCIL
MINUTES
FEBRUARY 24, 2006
The Newberry County Council met on Friday, February 24, 2006, at 2:30 P.M. in Council Chambers for a special called meeting.
Present: Mike Hawkins, Chairman
William D. Waldrop, Vice-Chairman
John E. Caldwell, Councilman
Henry B. Summer, Councilman
John David Dawkins, Councilman
Andy Morris, Councilman
Edgar Baker, Councilman
J.E.
Klugh,
Gary
T. Pope,
Susan C. Fellers, Clerk to Council
Media: Heather Hawkins, WKDK
Cindy Pitts, Newberry Observer
No representation from Whitmire News
Mr. Hawkins called the meeting to order and determined a quorum to be present.
Mr. Waldrop had the invocation followed by the Pledge of Allegiance.
Additions, Deletions and Adoption of Agenda:
Mr. Dawkins requested the addition of the following items:
1. Carter Goble Lee regarding Capital Sales Tax Projects. (Agenda Item #1.1)
2. Supplemental funding for fire stations. (Agenda Item #1.2)
There being no further additions or deletions, Mr. Morris moved to adopt the agenda as amended; second by Mr. Dawkins. Voting for the motion: Councilmen Hawkins, Waldrop, Summer, Dawkins, Morris and Baker. Mr. Caldwell did not vote. Motion passed by majority vote.
1. An
Ordinance authorizing the issuance and sale of a Newberry County, South
Carolina, Special Source Revenue Bond (Industrial Park Projects), Series 2006,
in the principal amount of $6,410,000; the application of the proceeds of said
bonds to defray, for economic development purposes, the costs of certain
infrastructure improvements and of acquiring certain property in Newberry
County; and other matters relating thereto.
Mr. Morris moved for third reading; second by Mr. Waldrop.
Mr. Pope reviewed the following amendments:
When Council
originally considered this Ordinance, it was for a $9,000,000 bond issue, which
could have been issued in a series, and also allowed the County to mortgage the
property. Since then, the scope of the
project has been more focused. We have
gotten commitment on the money. Negotiations
have reduced the amount from $9,000,000 to $6,410,000. We have deleted the provisions of series
bonds down to a single bond and deleted the provision allowing mortgaging of
the property. BB&T gave us a bank
qualified tax exempt rate of 3.99% fixed for the first 10 years and then
readjusted. The scope of the project has
been identified with more particularity.
It allows for an Industrial Park at the intersection of I-26 and Highway
773 and also to make necessary park improvements or acquisitions at the
existing Industrial Park at Highway 219 if there is money available. The money that is used comes from the Fee in
Lieu of Taxes stream. The entire stream
is pledged, but it has been specified that it automatically comes from
There are technical changes to comply with this. We don’t have bond anticipation notes provided for any more.
Mr. Hawkins clarified that as long as the County’s Fee in Lieu is adequate to make the payments on the bonds, we would not touch the school money, and if we have to touch the school’s money, we could take other action to Make them whole at that time. Mr. Pope advised that was correct. A subsequent County Council would have the legal right to take the fee payments off the top if they took a formal vote to do that but the way it is set up now is that it automatically comes out of the County’s share first before the school’s money would be touched.
Mr. Waldrop asked if real estate agents were involved in this transaction. Mr. Pope advised that real estate agents were involved in the sale of the property the County is considering buying. The private land owners engaged real estate agents; not the County. The County does not have a contract with anybody at this time. That is one of the things to be considered.
Mr. Pope advised the way the contracts were written up, they provide the buyer would pay a commission of $172,950 for all of the land. The County would not buy all of the property so it would be approximately $30,000 less than that. This is the way the contracts were drawn up, and the County had no input as to how they were done. They were done in such a way to provide for a buyer’s premium, where the buyer would pay the commission instead of the seller. The seller may be paying a commission, too, that we don’t know about.
Mr. Pope advised that if the County should sell property in the future, it could draw up the proposal in such a way that the buyer would have to pay the commission.
Mr. Waldrop asked if we had any hits, and asked that Teresa Powers, Planning Director, come forward. Mr. Waldrop asked Ms. Powers if she had anybody obligated to buy the land yet if the County purchased it.
Ms. Powers indicated she did not. Right now that would have to be negotiated with the private land owners. The County has no control to negotiate that property at this point. There is nobody locked down for this property at this time. We have shown it. Part of the property has been in our industrial inventory but we haven’t shown it in that capacity. There is no formal commitment yet.
Mr. Waldrop stated he was involved in a meeting with Ms. Powers, Leonard Sossamon and the Newberry Electric Cooperative. His understanding was that we were trying to get other people involved in the project. Mr. Waldrop asked if we had anybody involved in the project besides the County. Ms. Powers stated not to her knowledge.
Mr. Waldrop
stated we were speculating and had nobody to purchase it at this time. Ms. Powers stated that was the purpose for
the whole industrial site facility study.
More and more companies want property that is ready to go and unless you
have control of the property, projects are coming through with a two to three
month window as far as wanting to get on the ground and build and get up and
running.
Mr. Waldrop advised that with the Highway 219 property, people were looking for property at the time. When the County made that deal, we knew that companies were coming. Then we put the infrastructure in and we recouped that money in a hurry.
Mr. Waldrop felt we were gambling very strongly with the economy like it is. The real estate market is going south, and we don’t want to risk the taxpayers’ money and not have anybody out there to recoup the taxes. We generate revenue from property taxes. We are not in the real estate business.
Mr. Hawkins stated
that
Mr. Waldrop stated the Water and Sewer Authority just ran a pressurized sewer line. Ms. Powers advised we would need a pump station.
Mr. Waldrop stated if somebody wanted to buy that property, they could put a pump station in when the need arises. He felt we were speculating, but we need somebody else to go along with the County on the plan. Mr. Waldrop stated he would not support this project.
Mr. Morris agreed that industry now wants to move in immediately, and that sometimes you have to spend money to make money. If we don’t do something, we will only continue to increase the tax rates on the property owners of the County. We have to get industry in the county and you sometimes have to take a risk to make things better.
Mr. Caldwell asked in the proposal to invest this type of money, what form of taxation is this going to change for the public and what about reassessment next year. Mr. Hawkins didn’t know about reassessment but asked Mr. Pope to address what it would do to the taxpayers.
Mr. Pope stated it would shift some of the tax burden away from industry back onto the property taxpayers. In order to have tax exempt status, you have to make certification that you are not buying this for a private party and do not have a contract in existence. In order to maintain tax exempt status as we sell industrial tracts to private parties, we will pay down a pro rata part of the bonds. It is a pay as you go idea. In response to Mr. Caldwell’s question, it will have some affect on the public so long as there are bonds outstanding, but as we sell property, bonds will be paid back. The industries will then come on line and pick up some of the burden and ultimately reduce the tax burden of the taxpayers in the long run.
Mr. Caldwell asked
if there was any chance of this project becoming a second F.G. Wilson. Mr. Pope advised the F.G. Wilson plant was built
and they were paying taxes over the years so we didn’t lose money. The first park paid for itself in a couple of
years. The City of
Mr. Waldrop stated at one time there was a big sign on the Interstate for weeks and weeks of property for sale. Mr. Hawkins said it was for twice the price we are talking about paying now.
Mr. Caldwell asked
Mr. Pope to amplify on the growth from
Mr. Caldwell stated the more development the more restrictions you will have.
Mr. Hawkins’ understanding was if Council agreed to issue the bonds that would not mean we were agreeing to buy the property. That will take a separate vote if Council decides to buy the property. Mr. Pope stated that was correct; that this is just to do the financing. Mr. Pope advised that the ordinance has to specify where the funding will be used. There would have to be a draw schedule. Right now the use of the money is limited to the northwest quadrant of that highway. If you want to amend it, you could put in the general vicinity of that intersection.
Mr. Hawkins asked if Council would like to reverse the order of the agenda and go into Executive Session to talk about the contractual matter and then come out and vote on issuing the bonds.
Mr. Dawkins moved to go into Executive Session; second by Mr. Caldwell. Vote was unanimous.
Mr. Summer advised he had to leave at 4:00 p.m.
Mr. Hawkins stated in the spring of 2001 he advocated the hiring of an Economic Development Director, and it has taken us five years to get from there to where we are this afternoon. Nobody wants this to happen any more than him, but he will not be rushed into a decision today because we have known for months that February 28 was the projected closing date on this project. If we couldn’t put it together until today, we are going to take a deliberate approach and consider this and not be forced into a decision today.
Mr. Hawkins requested that everyone leave the room except County Council and the Acting Administrator.
[EXECUTIVE SESSION 3:04 P.M. –
4:57 P.M.
Councilmen
Summer and
Mr. Morris moved to return to regular session; second by Mr. Waldrop. Vote was unanimous.
Mr. Hawkins advised lengthy discussions were held with persons who have contracts on the property for an Industrial Park and an offer was made to buy their contract.
Mr. Morris requested that action be taken on the motion and second on the bond issue.
Mr. Dawkins
moved to postpone third reading until the March 1, 2006 meeting; second by Mr.
Morris. Voting for the motion: Councilmen Hawkins, Dawkins, Morris and
Baker. Councilman Waldrop
abstained. Councilmen Summer and
Mr. Pope advised Council discussed extending a formal offer to Southeast Resort Holdings, LLC to take assignment of all six contracts that are set to close on March 3, 2006 at an offered price of $125,000, and the response was in the negative.
Mr. Dawkins
moved to put that into the public record; second by Mr. Morris. Voting for the motion: Councilmen Hawkins, Dawkins, Morris and
Baker. Councilman Waldrop
abstained. Councilmen Summer and
1.1 Carter Goble Lee –
Capital Sales Tax Projects.
Mr. Dawkins stated the County hired Carter Goble Lee to be the construction manager of the Sales Tax Projects in the County. A question has arisen as to who pays Carter Goble Lee and if the funds come out of each project. The fire departments and all of the projects are already constrained as far as the funding they have. The Council did this after the fact, and after discussions with Mr. Klugh, Mr. Hawkins and Mr. Pope, this can be an expense of the Sales Tax. The County may have to front it until we can get the interest money from the Sales Tax to reimburse the County. Mr. Dawkins asked if the County could pay the fees to Carter Goble Lee rather than the fire departments or library, or whatever.
Mr. Hawkins so moved because we brought Carter Goble Lee on in the middle, and we need to find the money somewhere else besides the projects having to pay for them; second by Mr. Morris.
Mr. Waldrop agreed but at the time Carter Goble Lee was not involved and their 3 ½% was not in the picture. The projects will have an overrun anyway and with the 3 ½% it will be even more. We need to make these projects go at the price decided and asked if the projects could be downsized and the 3 ½% be part of the final cost. Mr. Dawkins advised the architects were working on trying to bring them into budget.
Mr. Klugh advised Mr. Waldrop was talking about the 3 ½% being outside of that.
Mr. Pope asked if it was the consensus of Council that there was not enough money in the budget to cover Carter Goble Lee’s fees and to consider it a cost overrun reimbursable from any extra proceeds from the Capital Project Sales Tax. Mr. Hawkins indicated that was correct.
Mr. Morris reminded Council that when Carter Goble Lee was hired they said they would review the projects, look at the drawings, and they could recoup their 3 ½% in savings from projects. That adds even more to being able to put bucks into this project.
Mr. Hawkins
called for the question. Vote was
unanimous. (Councilmen Summer and
1.2 Supplemental
Appropriation for fire departments.
Mr. Dawkins stated in fiscal year 01-02 Council started assisting with funding of fire stations. In fiscal year 04-05 the $100,000 committed to two fire stations was not rolled over. Mr. Klugh and Debbie Cromer, Finance Director, found in the current budget $50,000 from two sirens we budgeted for $20,000 each and $10,000 out of the Board of Rural Fire Control building maintenance fund to fund one of the stations. We would have to do a supplemental appropriation for the other $50,000.
Mr. Dawkins read the following into the record: In fiscal year 01-02 O’Neal Station received $50,000 and Maybinton received $30,000 because that’s all they requested; 02-03 $50,000 went to Little Mountain station and $50,000 went to Stoney Hill; 03-04 $50,000 went to St. Phillips and $50,000 went to Peak; 04-05 Silverstreet should have gotten $50,000 and Lake Murray Public Safety $50,000 (that was the money that was not rolled over); the current year, 05-06, $50,000 is supposed to go to Consolidated and $50,000 to Prosperity fire station. All of these past four stations are in the Sales Tax projects.
Mr. Dawkins
moved that a supplemental appropriation be done for $50,000 and confirming what
was read into the record as far as Consolidated, Prosperity, Silverstreet and
Mr. Dawkins
explained that when he and Dave Waldrop proposed the projects to the Capital
Sales Tax Committee, the project cost for
Mr. Hawkins believed it was Council’s intention every year that the $50,000 go to these departments, and somebody should have asked us if we wanted that money rolled over, and it did not happen.
There being no
further discussion, Mr. Hawkins called for the question. Vote was unanimous. (Councilmen Summer and
Leonard Sossamon asked permission to address Council, which was granted. Mr. Sossamon advised that Henry Hood just advised that they would accept the $125,000 for the assignment.
Mr. Dawkins moved to go into Executive Session again to discuss this.
Mr. Baker advised he had to leave.
There being no second to Mr. Dawkins’ motion, Mr. Dawkins withdrew his motion for Executive Session and made the following motion in open session.
Mr. Dawkins moved
to make an offer of $125,000 total to buy the assignment of the contracts and
the contracts will be signed over to
Mr. Morris moved
to give third reading to the bond issue as amended; second by Mr. Baker. Voting
for the motion: Councilmen Hawkins,
Dawkins, Morris and Baker. Councilman
Waldrop voted against the motion.
(Councilmen Summer and
Mr. Dawkins moved to adjourn; second by Mr. Morris. Vote was unanimous.
There being no further business, the meeting adjourned at 5:10 p.m.
NEWBERRY COUNTY COUNCIL
________________________________
Mike Hawkins, Chairman
__________________________________
Susan C. Fellers
Clerk to Council