The Personnel and Finance Committee of Spartanburg County Council met on Monday, April 16, 2001 in Conference Room Two of the County Administrative Office Building. In compliance with the Freedom of Information Act, notice of this meeting was provided in advance to the local news media and other interested parties. The following were in attendance: Honorables David Britt and Johnnye Code Stewart, Committee Members; along with Karen Floyd, Jeff Horton; Rock Adams and Frank Nutt; Council members. Also attending were James K. Hartmann, County Administrator; Bill Dennis, Deputy County Administrator; Glenn Breed, Assistant County Administrator; Chris Story, Assistant County Administrator; and Roy McBee Smith, County Attorney.

1. County Council Chairman Floyd called the meeting to order.

1. Mr. Chris Story presented follow-up information with regard to local option sales tax. Since last meeting, Mr. Story and Mr. Hartmann have gathered information and visited with several community groups, including the Board of Directors of the Chamber of Commerce, all seven School District Superintendents, and several Civic Organizations throughout the county to get initial public reaction to the local option sales tax and the reasons why we are proposing it. The way they have described this mechanism today is simply a better way to pay for local government. The main two reasons why we are considering this is that the county has major funding constraints and substantial needs which simply must be met, and the local option sales tax is a better, fairer, and freer way to pay for local government in the long-term. Presentation made by Mr. Story is included in Backup. County will lose about $22.3 Million of revenue over next ten years due to Car Tax Rollback. Compile that with the rather clear threat to State Aid from Columbia which could be up to $1.8 million. He reviewed a short list of county major needs and a few estimates using a ten year period as framework. County is facing serious revenue hits and major funding needs. The costs of providing status quo level of services are rising. Property taxes are not keeping pace with cost of current level of services. We cannot address major needs without additional revenue. Thirty two of the forty six SC counties have sales tax higher than 5%. School Districts would not be affected by local option sales tax. They would receive the exact amount their millage generates with or without a local option sales tax, same applies for Fire Districts and others. The Municipal and County Taxes would be reduced by the rollback that is associated with the local option sales tax. We are dealing on estimates from the State Department of Revenue and we will revise our estimates accordingly as we receive new data. We will ensure that the public has the most accurate data available at all times. A minimum of 71% will go toward property tax rollback. A maximum of 29% will go for county and municipal general funds. Rollback appears as a credit on property tax bill. Estimated amount to be used for property tax credits with L.O.S.T. is $18 million. Property tax currently collected by county and municipalities is $53 million. This would result in county and municipal property tax relief of 34% in the first year. Credit on $150,000 home would be $159.92. Additional credit on $150,000 home if in municipality would be $333.53. Credit on $25,000 car would be $26.65. Additional credit on $25,000 car if in municipality would be $55.59. Additional sales tax paid on a household income of $50,000 would be $115.73. Personal circumstances would determine individual impact. New revenues are estimated at $7.4 million. Spartanburg County would receive approximately $5,046,924. City of Spartanburg would receive approximately $1,758,483. All other municipalities would receive approximately $552,351. At least 15-20% of total penny revenue would come from non-resident shoppers. The additional revenue from residents that would be required from residents is only $2.1 – 3.4 million to receive return of $7.4 million. Retailers would see an additional burden of bookkeeping and tracking, but not from a loss of sales. There is Legislation in Columbia regarding the sales tax on groceries. If the sales tax on groceries were eliminated completely, it would cut the revenue figures by 10-13%. This may or may not be an issue. We will mirror the behavior of the state in that regard. If current trends hold in the future, the percent of County/Municipal property taxes offset by local option sales tax rollback credits doubles in fifteen years. Top priority considerations for Council are we must explain what will be done with the new revenue. What change can the voters expect to see? We must also explain what will happen if it does not pass. Would it be Millage increase, major service cuts, or no improvements? We will continue to refine data, collect new information and answer any questions. A special budget work session will be set up for mid May. No Action Taken.
2. Mr. Hartmann gave update on the settlement of the Frank Adams vs. Spartanburg County lawsuit. Pursuant to the Court’s Order, we held mediation concerning this matter. It has been resolved. Settlement is in backup. Mr. Hartmann requested Council’s ratification of settlement. Motion made by Mr. Britt to approve Administration’s recommendation to settle this case. Motion seconded by Ms. Stewart.
3. Mr. David Jones appeared to give an update on Cellular Phone Conversion Project. Last November, we began an initiative to improve the acquisition of voice wireless services for the county. Review team determined best pricing options, and selected Verizon Wireless as the provider of wireless services for the county. A contract was negotiated. The chief benefit is one master agreement to manage the usage and cost. No Action Taken.
4. Mr. Hartmann recommended scheduling a Budget Work Session to discuss the FY-02 Budget. Mr. Hartmann will ask for first reading of Budget Ordinance by title only.
5. Updated financial information was received as information only.

Meeting adjourned.