2026-11-09 - City Council Budget Workshop

Sorry for my internet issues. >> All right. And I think >> settled for minutes. >> All right. We I think we're ready to go. >> Okay. Um we'll call this meeting or I guess this is a workshop. So it's

not the ad hoc budget meeting. This is all of council. Uh so we'll call the budget workshop meeting to order. Um give a brief moment of silence. Join me. And Amy, I'm going to turn it over to you. >>

Okay. Thank you. Good afternoon, everyone. [clears throat] We'll just go over this today, our draft budgets for tourism funds and the general fund and enterprise fund. Sorry, my voice is a little odd

because of my allergies. So sorry if it goes cracks in and out. >> It's cheering That's because you're cheering for the Gamecocks. That's why. >> That might have been some of that council member

wearing. For 2026 estimate and 2027 projections for our tourism funds, you'll see our estimates for 2026 are a little bit higher than we budgeted in 2020 six. On the good side, hospitality, we had

talked about that previously that it had kind of flatlined for a couple of years. We are seeing that um increase again. So that is good news and you'll see our projections are just a little bit higher

than our 2026 estimates. Does anybody have any questions on that? We'll go through them each in more detail. We'll start with state accommodations tax. What are required and committed uses, we always

By state law, we're required to contribute to the CBB um and also transfer to the general fund as required state law. We support the DASH with state accommodations tax, debt service for the

International African African American museum. We support the aquarium maintenance fund since we do own that building, um visitor center operations, and we have the EB White joint venture interior

renovations included this year. My understanding is we'll be doing those renovations in 2027 and then also all of our city sponsored events, Piccolo Spoleto, MOJA, and the Farmers Market. 15% will is

projected to go towards workforce housing and then the remaining will go to nonprofits. And the accommodations tax advisory committee meets on November 12th, which is this Thursday. And this is what

it looks like with all of those details that I mentioned prior. >> [clears throat] >> You're going to be sending this out to all of us, right, Amy? >> The slideshow? >> Right. >> Yes, I can do that.

>> Thank you. >> You're welcome. Moving on to our amended 2026 budget, as you know, we always have to bring in amended um 26 budget with the with the 2027 or the next year's budget. We um if you see

in green, those are the things that are highlighted as different. We are using um fund balance, additional fund balance for the Ashley River Crossing bike pedestrian bridge, bringing up some

hospitality funding um to use because we're reaching the deadline to spend the state eight tax funds. We have two years to spend those and our fund balance was growing a little bit too much, so we do

need to spend those dollars. And this is a good uh project to utilize for that. These are additional funding to finalize the improvements at the park. Best friend tree museum needed repairs to the

HVAC unit and then Angel Oak for some of the um parking improvements that they're working on. Any questions on of those? Okay. We'll move on to municipal accommodations tax. Do you know it's a 2% for

overnight lodging. It has two separate ordinances. 1% goes to capital improvements and 1% to property tax relief. For the capital projects funded portion, we are funding Braeburn Park improvements,

Central fire station number two and three capital repairs, and the Maritime Center standpipe repairs. Show you that over here. [clears throat] Do you have any questions? Let me know. Uh I'll move on

to I'm sorry. Is everybody ready? 2026 amended budget. The capital projects we added were the Gilliard sound panels panels. Um Braeburn Park improvements, we're shifting funding from general fund

reserves to this to Braeburn Park so we can have um general fund re reserves for other projects. And then Central fire station number two and three capital repairs using current unassigned fund

balance to shift funds from hospitality reserves as well. Any questions on those projects? >> We expect to spend that [clears throat] amount of money on two and three uh next year or that's for mostly

design, I guess, this year and awarding initial contracts. >> I believe so, yes. I'm not exactly sure of the timeline of that project, Mayor. >> Okay. >> [clears throat] >> And this is what the

amended um budget will look like. It's just those projects that we just talked about in fund balance. >> Any questions? Okay, we'll move on to hospitality fee fund. It includes the transfer into the

general fund for the impact of tourism that we do every year. It includes the King Street bid contribution. We have our contractual management agreements that it includes that that's the the Gilliam,

the IAM, um the tennis center, those types of agreements. And then the USACE battery extension. Um that's for the address war portion of that project. This is a long There's several slides because the

hospitality budget is so long. So I I'll go slowly through. Just let me know if you want me to stop. You see the um International African American Museum, the Gilliam, the Children's Museum, the

Charleston Museum, the Gibbs Museum. Those are all [clears throat] some of those contractual agreements that we have. And then the Gilliam operating costs as well. Utilize um hospitality for Second

Sunday and the ESPN Classic as well. And debt service for the batter the first battery the low battery project. Mayor, did you have a question? >> the one that was already Yeah, already done. >>

that's already done. Yes, that's just the debt service on that. >> You remember how long is that bond out for? Do you remember? >> That's 15 years, I believe. >> And so we're what? Maybe five years

into it or is this Was it done later on the third phase? >> It [clears throat] out in the third phase, I think, man. >> Yeah. I'll go back and look and see. Time flies. >> Okay. >> Wish you can go

back and get that interest rate. Wish you can go back and get that interest rate. >> That's 100% sure. [clears throat] The 2026 amended budget includes a transfer out to the capital improvement fund

from prior year reserves for the head phase of the little battery extension for the ballpark raising of the of their field, the Lockwood knee wall, Carver Richardson Park signage, and then fire

station 11 for the underground electric utilities. >> How much was it for the knee wall? >> Hold on. I will get there so you can see it. Let me see. 23,000 Councilmember Ware. >> Okay. Thank you. >>

You're welcome. I'll just These are the highlighted so those are amounts for the amendment. >> That obviously not the total cost of the knee wall. >> No. I don't know. I don't know why I was thought

like 7 million or something but In total, yes, but for this portion of it, it's just that that amount. >> Okay. Thank you. >> questions on the amended hospitality budget? Okay. We'll move on to the

general fund and enterprise fund draft budget. [clears throat] This is what it looks like. After base budget, we had a 2.8 million dollar surplus with the new program requests that we approved 1.5

million for raising parking rates which an additional revenue of 4.5 million which gave us a million surplus, which we're using towards compensation. Any questions I'll move on. We can talk about it a

little bit more detail. And then this is the enterprise funds portion which makes it a balanced budget. >> What is Remind me, Amy, the um the that's the I'm sorry. Never mind. >> This is a 2026 to

2027 comparison between the two budgets to see where the increases are. Parking looks a little odd. It's not really an $8 million decrease in revenue. It is because in in the revenue from 2026 we had

a large portion of that for the capital structural repair transfer in. So it's not really a decrease in revenue. Without that in 2026 the revenue was 37.5 million. We're projecting 39.8 in 2027. So

that's just one one that I wanted to explain. And that project is finished. >> And we're going to get into the $25 million general fund variances. >> Yes. >> Okay. >> You'll see the biggest increases

when we move on which is right here. So the largest increases you'll see highlighted in green is property taxes, business licenses, local option sales tax, and then the transfers in both from the

tourism funds funds and the enterprise funds. >> Property taxes are just based on assessed value. Business licenses we've been very successful over the last few years, so we increased our projection

just based on historical trends. Local option sales tax is strong both Charleston County and Berkeley County, which is good compared to what we expected in 2026. Permits and fees, it's based on

historical trends, plus we did increase fee rates for building inspections and planning. And then transfers in we've talked about enterprise funds, mostly from the parking fund and tourism funds, the

municipal accommodations and hospitality fees that are transferred in. Parking, we're increasing $3 an hour to $4 an hour for garages and on-street parking, which is anticipated to generate an

additional $4.55 million. >> Amy, what's the bay into delta for interest and other earnings? I mean just is just because interest rates are that much lower or I mean seems pretty dramatic at 40%. >>

It's based on what we're receiving this year and the allocation of the interest to the other funds. >> Okay. >> And that's the detailed revenue, just a pie chart to kind of show you by category where

the biggest revenue sources are, which you can see is property taxes, licenses, and transfers in. And then by function, you'll see biggest increases as general government salaries and benefits. It's

rents and insurance as well, public safety, additional police and fire positions, fuel and pedestrian safety. Public safe service is salaries and benefits. It has an additional pothole crew and course

fuel. You'll see fuel is affecting pretty much everybody on here. Salaries and benefits for culture and recreation also includes an additional urban forestry crew and then just increased contract

costs and then the debt service for the West Ashley office building and parks and rec improvement bond. And just to note on the general government, it's a little over inflated right now because we

have to spread whatever we're doing with compensation through to the other the other functions. So it just looks really high right now, but it will spread through later. Any questions? >> Annika,

could you walk through just again the parking? I know you mentioned it on a couple of slides back, but well the 8 million the the next slide you were just on, the 8 million dollar >> I I'm sorry. Say

that again. For the parking? So in the 2026 budget, we had in addition to the revenue, we had transfers in for from or we had reserves allocated for the parking garage structural repairs project and

that is why it made the revenue look like it was more than it was. You have to take that transfer in away in order to get an apples to apples comparison. >> I got you. Okay. So it's just We're not

we're not anticipating 8.3 million less in parking revenue this year. This is more compensating for a one-time expense. >> That's right. So in 2026 without that without the using the reserves for that

project, the revenue was 37 budgeted revenue was 37.5 million. This year we're projecting Sorry. When I say this year, I mean 2027 we are projecting 39.8 million. So it is an increase in revenue. >>

Got it. Got it. Right. Okay. Thank you. >> You're welcome. And And that's just expenditures by function so you can see where the largest expenses lie, which is always public safety. As it should be.

>> Yeah. >> So what's included? We had $28 million total total requested in new programs. We funded $5.6 million of that. $3.4 million came from one-time funding sources. So the impact to the budget

is $2.2 million. 95 positions were um requested. We're funding 19 of those. Parking. If we increase the parking rates um right now is $3 an hour, $1 for every 20 minutes. It would be $1 for every 15

minutes to $4 an hour, projecting $4.5 million by $5 million. Um a resident discount is anticipated in that number and we are still competitive with the other private garages around us. One of the

reasons why we're contemplating this is we had talked about without this we had about a $1.5 million surplus that we would be able to distribute um to employees for compensation. Which if we have very

non- >> think that there's I think that's important to and we talked about this in the budget ad hoc, but you know when it all boils down we did need additional revenue if we were to provide um you

know additional employee compensation which has been uh uh I think a really important priority to do um just given the cost of living. [clears throat] And when looking at the parking I mean we've gone

back and forth on this and I know council members Seekings you uh have done a deep dive on this as chair of TNT. Um you know we try and be very thoughtful about parking and not push it too much, you

know, because we we don't want to hit the residence. At the same time, I mean, we even with a maybe a year or two ago when we we slightly increased rates, we're still as you can see pretty competitive

below market as compared to private garages and even on competitive sets like other cities and just what we charge for parking. And it's still if you were to look at how long it's, you know, we did a

we did an increase I think it was a year or two ago. We're still way behind or behind I would say in terms of the inflationary value of this. It's still a little bit of a just catching up. So and

again, from my standpoint, just want to be clear it was really important to to make sure we could contribute something significant to this employee compensation study. So that I'll turn it back over

to you, Amy, unless there are any other questions. Okay, let's keep going. >> So 6.1 million available for compensation that provide a 2% call for all employees at a a cost of about 3. almost 7

million dollars and the remaining will be applied to implement the compensation study with it being a multi-year implementation. What we have done already with the compensation study is phase one was

completed. New pay grades were established and all employees were brought to at least the minimum of their new pay grades. We have performance reviews implemented and 5 million dollars was allocated

to bonuses based on performance and that was paid out in October. And I just realized that realized I have not been on camera. I am sorry about that. [snorts] [clears throat] Any questions on that?

And we just have talked about this in ad hoc. I thought it might be a good a good opportunity to talk with all of you about it as well, is why has it been getting a little bit harder. And as you can

see in the last two years, our base budgets have increased significantly based on just because of an unavoidable cost increases. Um main drivers are healthcare, debt service, rent, insurance, and

salaries. And also market volatility as we've all seen. Um just things are more expensive. Fuel is very expensive right now. We're hoping that that will um rectify itself in 2027, but those are some

of the unanticipated costs that we've had to build into the budget. Any questions? Okay. So upcoming coming dates. We have to have the advertisement to the paper tomorrow in order for it to meet the

deadline. We will have this draft budget delivered to you all next week on the 17th. December 1st will be the first reading of the budget, and then December 15th will be second and third reading.

Unless anybody has any questions, comments, or concerns. >> I'll take a question. >> Go ahead, Ben. >> Oh. Well, thank you. Um that Brittle Bank slide, could you explain that one a little more? >> I

can. We We initially had or I'm sorry, we had general fund reserves allocated towards that project. And when we were looking at projects, we were trying to shift funding around. I think at the time

that we had that funding set aside was when we were coming out of um the pandemic pandemic when we didn't have a lot of tourism funds. And now that we're we're coming back um with that, we're just

looking at some of the projects to see how they can be funded differently so that we can free up general fund reserves for other projects that don't meet a tourism requirement. Does that make sense?

Does that make sense? >> What What were we looking to fund over there? The >> Playground. >> The playground? That we All right. >> I mean that's uh correct if I'm wrong >> Yeah, and some other yeah,

some other recreation um projects as well. >> Where where those >> Any other questions >> Where were those >> or what's that good? >> Where were those projects in the process? They were just being

drawn or in permitting? >> They're not in permitting. They're future projects >> Uh-huh. >> that we're trying to fund design for basically. >> And now we're looking >> for my program. >> One more one

more one more. Uh and now we're now we're looking for um an alternate source of funding for that, I suppose. >> We have it. >> Oh, you have it. All right. >> Mhm. We're using tourism dollars for a

building because it meets the the requirements of a tourism project. >> Great. Thank you. >> Councilmember McBride. >> Thank you, Mr. Mayor. Uh nice job as always. It's important. Uh question about

Listen, I might have missed it, but uh I know on a previous meeting, budget meeting, there was a proposal potentially of putting in uh I think $300,000 for a study for I think North of Maybank for

parallel um connections for mobility. Is that still going to make make it this far under the budget that you're aware of? >> Um let me get back to you. I don't remember that specifically,

Councilmember McBride as that being >> That's the joint study Councilmember McBride that we're talking about with the county. >> Is it with the county? >> like that's already we already have funding

set aside for that, but it wouldn't necessarily be in this operating budget If I'm remembering that correctly. >> Yeah, I think you're right, Anne. >> Yeah, I think that's reserves and not necessarily

an operating expense within this budget. >> Okay. >> And >> We'll just confirm We'll confirm that. Uh yes, we'll confirm. >> I'm sorry? >> You remember the issue I'm talking about specifically was the

$300,000 for Maybank connectivity. It was I think Mr. Summerfield proposed it a few weeks ago. We can talk offline about it, but >> Yeah, let's talk offline. I mean between that and what we're looking

at with the county and um a lot of the work I mean they're a lot farther along based on our previous meeting than that's not just the widening but this intersection. So >> Yeah. >> um but but but I'm

with you. Uh all right, Councilman LaWare. >> Thank you, Mr. Mayor. I'm just following up on Councilmember D'Alessandro's question about You may mention it uh you know we at the program recognizing

100 year World War I bridge uh program earlier today about the wall eventually coming through the Brittlebank Park. Um do we um do we have any money from raining in the TIF in the TIF over there? The

West Side TIF. Uh Mr. >> Um potentially, but the the battery extension by and large the local funding is [snorts] uh it's the name project in the TST for the West Side. >> So then that that's

potentially where that's going to come from. >> Eventually. >> Yeah. >> Well, I'd say more than potentially because it's it's a defined project. >> Right. >> Yeah. >> Good news uh Councilmember

D'Alessandro. Got another purse string. Thank you. But but still, I mean, do we have any money in that till? >> Not right now, Councilman Green. >> Yeah, not a lot. >> Mm-mm. >> [clears throat] >> Any

other questions for the good of the cause? Any questions about the schedule? Cuz this is you know, we're we got to advertise and then the the uh as pointed out in 17th, 1st, 15th, I mean, so don't

have a lot of room for error. I think Amy's done a really good job of bouncing everything and we've vetted through the ad hoc and um um you know, with staff. I mean, it's unfortunate we we're only

able to do a relatively small number of new programs, but just given where the macro economy is and things outside of our control and prioritizing employee compensation, I think it's um I think we've

ended up in a pretty good place, uh at least from my perspective. And hopefully next year we won't won't see as many uh unforeseen, uncontrollable added expenses that um will allow us some new program

more new program opportunities. So any other questions for the good of the cause? Looking >> Uh Mr. Mayor, I do have one. I I guess this time of year I always uh point out act two, is it Councilman

Pell, act 236 uh do we know if any other municipalities in South Carolina has been able to uh engage act 226 to uh provide additional revenues for um the operation of a particular I don't know whether

Greenville has been able to do it or Myrtle Beach been able to do it. Um I know you were up there when the legislation uh were passed and thank you for that. But it's been around now I guess three

four years and and when we get around this time of year somehow we don't engage it. The state has allowed us to some parameters. I'm not specific on that but I think Councilman obviously we can talk

offline on this but maybe in next year's I mean 28 budget we can have something identified that will potentially provide you know sources for some of these other needs that we have that we pushing

into 27 and beyond. >> Agreed and Councilman can you give us the definitive uh act number cuz I always forget it. >> Yeah, it's um Act 236 um it was passed in 2022 if you can believe it. It's um it's

got some years on it. Um it basically liberalized the service and user fee rules uh under state law. So whereas it used to be the case that in order to charge a user fee or service um fee um the

benefit had to be directly and proportionally individualized for the fee payor and the public could not generally benefit from it like a tax. But the legislature loosened up that benefit prong. So now

user fee revenue can be used in a manner that has benefits that go beyond directly benefiting the payor. So it does provide some openings and some opportunities for local governments to um get a

little bit more flexible and a little bit more creative when it comes to these revenue um situations like we've talked about the road um maintenance fees um that you could sort of designate

geographically and things of that nature. Um I've talked to you guys uh about the tourism management fee as opposed to an accommodations tax. Um, it would be a fee instead of a tax. It could function

a little bit of a different way and I think have the potential to raise some pretty significant revenue for us. Um, you know, I certainly don't want to upset the apple cart. I know we got to do things

for the newspaper tomorrow on this, but I do think there's some reason to maybe regroup on this and give this some additional thought as we head into next year cuz things are certainly not getting any

less expensive on the expenditure side and I think that, you know, local governments, there's only so much we can do on the revenue side. We certainly don't want to raise property taxes on our you

know, constituents and businesses and things of that nature, but I I do think there's some ways we can innovate here and [snorts] would be happy to have those conversations with anybody that wants to

have them. Um, my my wife won't let me talk to her about it. She's she said go talk to the people on council about it and the mayor about it. So y'all can give me an opportunity to get it out of my

system. >> No, it's Councilman Wering, from everything from you know, opportunities on Johns Island along Maybank Highway that that Councilman McBride has talked about who is, you know, you and I and

Councilman Appel have discussed some of the ideas that he just mentioned to we have a specific neighborhood on the peninsula the East Side that is expressed interest in wanting to figure out some sort

of overlay that could help with some of their infrastructure needs that may or may not fall within the purview of of Act 236. I think it's time to get creative on this look at opportunities that are

grounded in reality and Uh Appel, back to Wering's question, are you familiar with any other municipality that has [snorts] implemented something since the passing of this legislation in 2022? >> Yes,

so um the road maintenance fees are the center of the bullseye because this legislation was adopted um to protect counties that had imposed these road maintenance fees which had been called into

question by the Supreme Court. >> Got it. >> So following this legislative enactment, I think it's about as clear as you can get in this realm that the road maintenance fees that the legislature were

trying to save, you know, you can do that moving forward. So a lot of these counties have either continued to charge those road maintenance fees um or had gotten off the sidelines to do it. So so I

think that is like sort of the lowest hanging fruit here. Um but in terms of, you know, the creativity beyond that and what some other jurisdictions have done, um that that's probably a good um um

project for us to look into to kind of see what's going on out there because I do think um there's there's some there's some opportunity here um um and there's certainly the need for it. So um

[snorts] um but yeah, road maintenance fees that that that would be where where I think we ought to start. >> We'll check with our lobbyists, we'll check with the Municipal Association uh as well just

to see if they know of any um contemplated or implemented plans cuz to your point, Councilman Wering and Councilman Appel, I think we need to start digging into this and seeing what what opportunities

there are. Okay, so uh but again, back to your point, um we don't want to upset the apple cart for tomorrow. Uh this would be something to look at for uh you know you know studying in 27 so that we

can implement uh in a year from now. Any other questions on this budget? Um if not did we just want to give another shout out to Amy and Andrew and the whole team over at BFRC. This is um I love I

think she would she would say this is always a labor of love. It's her favorite time of year. This is uh what I live for. It's budget. Uh so but in all seriousness thank you all for for all your hard

work and I I I'll let you wrap up with just another example of um your due dili your diligence and the responsibility of balancing our budget every year and talking about our bond rating. So I'll turn

it back over to you Amy. >> So we passed the IPRB bond ordinance ordinance and um we had to go to the rating agencies to get a rating for our bond and they have come back with affirming our AAA and

our AA1 for installment um revenue purchase bonds both Moody's and SAP S&P which I normally always send you. I can send you the report if you'd like to but I just want to let you know that we did get

reaffirmed for both Moody's and S&P as AAA for our GO and our revenue bonds are always one notch lower but they always have been so we have remained stable so far. >> That's good news. >> And that's

all I have. >> Any further questions? >> Uh yeah Mr. Mayor I have issue I need to talk offline about uh the the item that's on uh with the affordable housing there off of King Street right next to the

um interstate. It's on I think it's on agenda. >> on housing? >> Yeah, I think but something offline. I think there may be a ally of ours that may be able to help with that. So I wanted to run that by

you. So Sure. Sure. >> So I'm maybe call after after this meeting's over. >> Okay. All right, guys. Well, if there's nothing else, again, appreciate everybody jumping on. We'll get this to the paper

tomorrow and look forward to first reading. >> All right. Good deal. >> If no other things come before this committee, I'll call