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KCC passes 2017-18 millage ordinance

Posted: November 2, 2017 4:55 p.m.
Updated: November 3, 2017 1:00 a.m.

Kershaw County Council presents the family of Jim Smith with a proclamation honoring Smith’s life and his contributions to Kershaw County. Shown (from left) are David Smith, KCC Chairman Julian Burns, Ashley Smith, Councilman Sammy Tucker Jr., Anna Smith, Councilman Dennis Arledge, Myra Smith, Councilman Jimmy Jones, Billy Smith, Councilman Tom Gardner, Lori Smith Pate, Duane Pate, Councilman Ben Connell, and Councilman Al Bozard.

Kershaw County Council passed third and final reading of an ordinance setting the tax rate for the 2017-18 Fiscal Year budget during its Oct. 24 meeting.

While no existing millage rates increased from 2017, this ordinance does reflect an additional 5 mill budget line for the purpose of funding Emergency Medical Services.

Kershaw County agreed to take on the funding and operation of EMS two years ago as part of an agreement to sell Kershaw Medical Center, now KershawHealth, to Capella, a for-profit corporation. As part of that transaction, Capella had provided the county with money to initially fund and operate EMS for the first two years; this is the first year the county has had to take over the funding of EMS.  

This year’s millage rates are as follows: 

• County Operating and Personnel 

   Budget -- 65.8

• County Debt Service -- 10.6

• County Fire District -- 9.7

• County Sewer District -- 2.6

• County Capital -- 3.5

• Emergency Medical Services -- 5.0

Prior to the discussion, during public comment, several people, including Kershaw County Republican Party Chairman Vic Dabney, stated no one is opposed to EMS but they do question the funding mechanism -- a 5 mill tax increase -- for it.

Council then spent some time discussing a proposal from Councilman Jimmy Jones, who proposed an amendment that would have reflected a 2.1 mill decrease. Specifically, his motion called for an amendment to the millage ordinance to reflect a 3 mill, rather than a 5 mill increase, with the resulting projected deficit to be made up using county unrestricted reserve funds, as well as authorizing the county administrator to make line item transfers of appropriated funds in sufficient amounts to fund EMS until such time as the budget is appropriately amended.

“No one is opposed to EMS -- they do an outstanding job and we all know we can and will find the means to fund them -- this county will not go without EMS service,” Jones said. “But I am proposing an alternative, one that I have vetted and one that won’t hit the taxpayers with such a large burden at once.”

Jones’ said his proposal, which would be a one-time action, would make up the shortfall of cutting two mills with some $420,000 from county unrestricted reserve funds. He also noted he had vetted his numbers with county staff, including County Administrator Vic Carpenter, and that taking such an action would not jeopardize the county’s cash position or bond rating.

“This eases the tax burden to the taxpayers and gives us a year to find better alternatives than a tax increase,” he said. “It could be that we don’t even need to do an increase next year -- but at the very least we would have broken what we are proposing down over two years, rather than hitting the tax payers with a 5 mill increase in the same year.”

He also pointed out that, while the budget and the millage ordinance reflects the funding of EMS, there was more to the increases to the county operating budget than merely taking on EMS. Some of these areas that saw increases included: 

State mandated retirement contribution increase of about $130,000

Property and Casualty insurance increase of about $100,000

Recreation Department got about $500,000 for ballfields when school district eliminated Wildwood Road athletic complex

Airport terminal work projects/bathroom renovations $63,000

Various court departments increased by about $100,000

KCSO budget increased by about $300,000

2 percent employee pay raises added about $230,000

On the other hand, the county has been able to significantly increase its reserve funds over the past several years, Jones noted. The General Fund ended June 30, 2016, with a fund balance of approximately $14.5 million, with about $10.9 million of that unrestricted. The county spends around $2.5 million on general operations and about $400,000 per month on enterprise funds operations such as sewer and solid waste, resulting in about $3 million a month spent.

“Kershaw County Administration operates on a financial management policy of maintaining three months of cash in reserves in order to account for negative cash flow during most months of the year. This amounts to approximately $9 million of operating reserves, leaving approximately $1.9 million in unallocated funds,” Jones said.

Allocating the equivalent of 2 mills, around $420,000, from the reserve fund would lower unrestricted reserves to about $1.5 million after accounting for cash flow needs, he said.

“Why are we raising taxes when we have a $14 million reserve with a $21 million budget?” he said.

Councilmen Al Bozard and Ben Connell said they would support Jones’ proposition. Connell noted that philosophically, he believes in a conservative fiscal approach to government operations and believes using available cash to lower taxes whenever it is feasible to do so would be sound conservative fiscal policy. He also noted the county has, at least in the past five years, realized strong gains in its reserve funds. 

Connell also noted that during the budget process, he had made a proposal to fund SROs in part with reserve funds during the budget process, but that proposal was ultimately voted down.

However, council members who supported the original millage ordinance noted a number of reservations they had with Jones’ proposal.

Councilman Sammy Tucker Jr. said the budget discussions were lengthy, intense and carefully conducted and the budget ultimately reflected what council deemed to be the most important items to be funded.

“We absolutely pared it down,” he said. He also noted the increase in the KCSO budget was a one-time increase, for a patrol car and equipment.

Councilman Tom Gardner agreed, noting that there was more than $8 million in budget requests council ultimately could not fund. He also said he believes using reserves for EMS, even one time, would be irresponsible. 

 “Funding recurring expenses with reserve funds is simply not acceptable accounting practices,” Gardner said. “If we fund a recurring expense with reserves, we set ourselves up for a $420,000 deficit.”

Council Chair Julian Burns agreed, also pointing out that the county is more than 120 days into the budget cycle; revising the millage would also mean revising the budget. Even if one could hold special meetings and pass three readings of a new millage ordinance and budget by December, that would still mean significantly changing course almost six months into the fiscal year.

With a 3-4 vote, Jones’ amendment did not pass. Jones, Bozard and Connell voted in favor and Burns and Councilmen Dennis Arledge, Gardner, and Tucker and Burns voting against. 

Council then voted on the original millage ordinance. It passed 4-3, with Arledge, Burns, Gardner and Tucker voting in favor and Bozard, Connell and Jones voting against it.

In other business, council unanimously approved a proclamation honoring and commemorating the life and contributions of the late Jim Smith, a former educator, coach, businessman and youth mentor who passed away in July. Council presented a framed copy of the proclamation to Smith’s family during the meeting.


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