MOUNT PLEASANT - Two years ago, consultants told town officials they must spend about $14 million more per year to keep pace with needed road repairs, drainage ditches and aging stormwater pipes.
Who pays more?
A comparison of Mount Pleasant taxes and its neighbors on a $300,000 house:
City Total tax bill Municipal portion*
Charleston $1,465.80 $756.60
North Charleston $1,624.20 $915.00
Mount Pleasant $1,045.80 $336.60
* Calculated by subtracting the property tax rate from the sales tax credit
Source: Charleston County Auditor
Since then, the town has budgeted only a fraction of that sum, and some officials, including Mayor Linda Page, said a time is coming when Town Council must either raise taxes or fees or usher in an era of reduced services.
"We have had recently people coming to council meetings concerned about projects that we're not able to fund," Page said. "If we keep kicking the can down the road, we will deplete the general fund and our roads will deteriorate."
The mayor was on the losing side last week of a 6-3 Town Council vote to pursue a property tax increase that would add $179 annually to the bill on a $375,000 home.
Council members Elton Carrier and Thomasena Stokes-Marshall also voted for the increase.
While the tax-increase issue is dormant for now, the larger question of how to pay for upgrades to roads and drainage lines will continue to linger - and some council members who voted no said they still could reconsider and support some mix of higher property taxes, stormwater fees, business licenses - even a possible franchise fee on Mount Pleasant Waterworks.
Not getting fixed
A pothole-ridden Park West Boulevard. A dangerous intersection where Long Point Road ends into U.S. Highway 17. Miles of crumbling metal drainage pipes that could fail any time.
These are just a sample of capital projects the town would like to address but has been unable to so far.
Two years ago, it hired Stantec, an engineering consulting firm, to inspect the town's infrastructure and put together a plan to keep it in good shape.
It looked at the town's 36 million square feet of roads, 315,000 feet of ditches and sampled some of its 806,000 feet of pipe. It found that 36 percent of town-owned roads need repair work.
Then there was the sticker shock: Stantec said the town should spend $14 million more on maintenance per year.
Then-Mayor Billy Swails urged council "not (to) kick this can down the road any further," but Town Council has not come close to addressing the $14 million need.
Before last week's council retreat, the staff reviewed its capital project list and focused on $5.8 million in projects that are considered top priorities but are not funded, according to Town Administrator Eric DeMoura.
"What we have is a situation many people are dealing with. We have aging infrastructure that is starting to break down," he said. "That's the primary issue."
And until the town gets a grip on how to pay for those repairs, it will have a harder time justifying other worthy, but not as urgent projects, such as new ball fields.
"This is a bill that's got to be paid. It's not going to go away," DeMoura said. "It's just going to get more expensive for whoever has to deal with it. This is an issue that needs to be managed now before it manages us."
A growing income gap
By many measures, the town's finances are flush. It has grown its reserves from about $15 million to $23 million.
Its bond ratings have risen in recent years. The Moody's agency now rates the town as Aa1, up from Aa2, while Standard and Poor's gives the town a AA+ rating. "Both of those grades are one step below the perfect rating," DeMoura said.
The town's financial health has been buoyed in part because it has maintained cuts made during the onset of the recession in 2008.
While the town has 10 percent more residents than it did in 2008, it has 25 fewer employees. Its property tax rate is still so low that it loses money on homes valued at less than $800,000, DeMoura said. In other words, the town spends more to provide fire and police protection and sanitation than it receives in tax income.
But council's concern about the town's future finances is compounded because it also will receive $9 million less per year in 2017, when the town's tax increment finance district expires. That district diverts some property tax money away from schools and county government to the town for infrastructure work.
Carrier said without some tax or fee increase, the town would have to use its reserves to pay for emergency road and drainage work.
"That excess will go away in about four years," he said. "We'd like to have it for emergencies."
Page said the town's healthy general fund might be one reason why council members are hesitant to address these long-term needs.
"That being said, if we don't start funding them, there will be a gap," she said. "Ultimately, we will be depleting our general fund because that's where those dollars will come from."
While Town Council voted against pursuing a property tax increase, the question of raising taxes or fees is expected to go back before council's Finance Committee.
Councilman Chris Nickels said he would not favor a property tax increase until the town checks out other alternatives.
Councilman Mark Smith agreed, noting that the town spends $4 million more on recreation than it receives in recreation fees. "I am not at all comfortable with any discussion of a fee or tax increase until I'm satisfied that we can put a plug in the $4 million hole we're running in recreation," he said.
Other options include raising the town's business license rates and possibly doubling its stormwater fees from $30 to $60 per home, a move that would bring in about $1 million more. The town could try to raise more money by a new franchise fee levied by Mount Pleasant Waterworks.
Carrier said he campaigned on the need to address the town's infrastructure, even if it meant raising more revenue. "It's a hard thing to sell because it's not real glitzy," he said, but added, "I didn't get any pushback."
Three of Town Council's eight members are new, and the town hasn't raised its property tax rate in about two decades, so it's unclear what the political ramifications of an increase might be.
"It's foreign to us. We just haven't done it," Carrier said. "But we're talking about a whole new level of expense coming at us."
Page said it will be fine if the town doesn't increase property taxes, "but that means the white glove services we've been able to enjoy might be pulled back a little bit."
At some point, the town's sanitation trucks might not be able to pick up trash from elderly residents who are unable to roll their can to the street. Its police officers might not be able to check on businesses or homes whose owners are on vacation.
"We might have to go more core government," Page said. "There is absolutely nothing wrong with that."
Reach Robert Behre at 937-5771.