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Growth Impact Action Committee

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Horry County and South Carolina

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5/20/08 County Council Presentation: New Developments Should Pay for the School Facilities They Require

5/23/08 Update: Corrections in red text under the "E-mail to County Attorney . . ." section below: Planning Director and attorney, Janet Carter's position has consistently been: "I just don't know about schools.  The PWID appears to include any public facility."

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PowerPoint Presentation: "New Developments Should Pay for the School Facilities They Require"

County Attorney Comments
E-mail to County Attorney John Weaver on Allowed Usage of “Public Works Improvement Act” statute

PowerPoint: "New Developments Should Pay for the School Facilities They Require."

A PowerPoint presentation was made at the May 20 Horry County council meeting entitled: "New Developments Should Pay for the School Facilities They Require."  To view the PowerPoint presentation, click here. I believe the presentation is more effective in PowerPoint form, but if you prefer to read the bulleted list from which the PowerPoint presentation was prepared, that follows, immediately below:

  • Every new home built in Carolina Station requires more than $9,000 in public facilities.
  • The absolute minimum school portion is more than $7,600 per home. The rest of us must pay the bulk of this in increased taxes This estimate is in today’s dollars so the actual cost over the 30 years of the development will really be much more.
  • Taxpayers have to pay  $7,600  for new schools for every home built in Carolina Station
  • The estimated number of homes in Carolina Station is 13,800. The projected Carolina Station population is 15% of the current total population of Horry County.
  • The majority of Carolina Station home prices are estimated to be assessed at $375,000
  • The bulk of Horry County residences will be sold at lower prices so the tax revenues they bring in will be even less than those for Carolina Station.
  • So it is not a stretch to anticipate that
  • Taxpayers will have to pay, at least, in the order of  $7,600 for new schools for every new home built in Horry County.
  • The new developments should pay for this.
  • This can be done if developers agree to put their developments in special tax districts so the owners in those districts will have to pay the extra taxes to pay their own way.
  • The only current statute that allows this for Carolina Station is a Public Works Improvement District
  • For other developments the in-process Residential Improvement District would likely be more appropriate, because it allows special tax districts to pay for off-site schools other than those on properties within or right next to the special tax district.
  • In any event, every new development above 24 acres should be required to enter into a development agreement where the property owners in the district have to pay extra taxes for the additional public facilities it requires
  • The county can agree to phase those taxes to go along with the development’s progress, so most of the taxes will be passed on to sub-developers and final buyers rather than on an original developer like International Paper. 
  • International Paper, so far, has refused to agree to put Carolina Station into a Public Works Improvement District.
  • County staff has done a great job of negotiating a development agreement where it believes that International Paper contributions pay for the county public facilities that Carolina Station will require – except for schools.
  • County Council should however defer approval of the development agreement and the Carolina Station development until it agrees to putting Carolina Station under a Public Works Improvement District so that buyers pay for the added school facilities that Carolina Station will require.
  • Only County Council can do this. All the school system can do is estimate its needs as it does for reqular school taxes. It can not pass the necessary ordinances to avoid adding  taxes to cover the costs of the newly required school facilities on the rest of us.
  • As we elect county council to work in our overall best interests, not just to balance the county budget other than schools, voters should insist that it act as requested for Carolina Station and act accordingly for all requests for developments above 24 acres.
  • Otherwise the rest of us have to pay, the bulk of a minimum,  $7,600  for new schools for every home built in Carolina Station and elsewhere.
  • County Council can defer Carolina Station approval until International Paper agrees to an adequate Public Works Improvement District. I plea that you do.
  • Are there any questions or disagreements? 

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County Attorney Comments    

After the presentation, County Attorney, John Weaver, said that the county can not pass an ordinance to collect taxes in a Public Works Improvement district on behalf of the schools as the presentation requested, although it collects the regular school taxes for the schools, and although, the Public Works Improvement Act says it covers public facilities, period. Janet Carter, also an attorney who is the Director of Planning says she simply does not know.*

Weaver also said after the presentation, as I understood it, that the International Paper contributions for Carolina Station amounted to only $341 per home. If this is true, the bulleted presentation item: "County staff has done a great job of negotiating a development agreement where it believes that International Paper contributions pay for the county public facilities that Carolina Station will require – except for schools" is obviously not true as far as International Paper contributions of $341 per home are concerned. Those are not even close to the cost of public facilities per home in Carolina Station -- even excluding schools.  

* Attorneys can argue any side of any issue. Neither John Weaver nor Janet Carter are judges. I am neither an attorney nor a judge, but I have carefully studied the “Public Works Improvement Act” statute and related legislation and believe collecting special taxes on behalf of the schools using that act is allowed. At worst is not clear that it is not allowed. Attorney Janet Carter says she doesn't know.

I will seek other opinions, of course. But, it seems to me that if the state should choose to challenge the county's right to pass an ordinance to collect taxes in a Public Works Improvement district on behalf of the school system, the stakes are so high for the rest of us that possible court costs are incidental. That is what courts are for -- interpreting possibly ambiguous laws.

I e-mailed the following to John Weaver yesterday (May 21, 2008).

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E-mail to county attorney John Weaver on allowed usage of the S.C. “Public Works Improvement Act” statute Note the corrections in red text below: Planning Director and attorney, Janet Carter's position has consistently been -- to quote her March 20 e-mail to me: "I just don't know about schools.  The PWID appears to include any public facility."

The background of this e-mail is the May 20 county council meeting. I have also attached the PowerPoint presentation that I gave then.

  • In a nutshell, I said that county council could refuse to agree to developments by developers who would not agree to put the property owners within those developments into a Public Works Improvement (special tax) District, PWID, so the developments would have to pay for the costs of the additional school facilities the developments required.
  • Gilland responded by opening a question to you: “I have a question for Mr. Weaver. We are not responsible, within our purview for funding schools at the county council level because we have our own school board.”
  • This reminds me of the then chairman of the planning commission saying the costs of development (then concerning Carolina Station) were not its responsibility. He said that was the responsibility of county council.
  • As my elected representatives, I look to county council to do what it only can -- pass ordinances that divert the taxes for the costs of school facilities required by new developments from the rest of us to the developments that require them.
  • Gilland then continued by asking if it was even possible for county council to take up dollars and give it to the schools (even though the county does just that in collecting regular taxes for the schools).
  • You dismissed this possibility, out of hand, saying: “No Ma'am, you can't do that.”
  • After what I understood you to be saying that International Paper’s contributions to all the public facilities for Carolina Station worked out to  $341 per house, you reiterated: “We can not do the schools.”
  • I had understood Carter to tell me the opposite weeks if not months before.
  • After the meeting you said you did not want to argue the subject with me that night.
  • But you asked if I meant that the county should construct the schools and lease them to the school system.
  • I said no, I was referring to using a PWID and Carter had told me that the PWID could include schools Correction: That was my misinterpretation of what she had e-mailed me sometime before when she actually wrote: "I just don't know about schools.  The PWID appears to include any public facility."
  • I noted that the PWID said “public facilities” without qualification unlike Impact Fees, IF, that specifically listed the public facilities it covered
  • You noted an apparent contradiction in that IF fees not naming schools meant they were not covered, but their not being named in the PWID meant they were.
  • I don't recall whether I mentioned Residential Improvement Districts, RIDs.
  • RID is just a bill at this writing, but it specifically names schools.
  • In any event, I understood you to say that you would look into the PWID possibility further
  • As RID is not yet law, you may not have studied it, but as it specifically names schools, one would think that having a PWID including schools is within the law. (If school facilities can be included within a RID, why not in a PWID whether schools are specifically called out as a public facilities or not?)
  • After I talked to you, I went back to Janet Carter saying that her previously telling me that the PWID includes schools said to me that two lawyers just had different opinions, neither being a judge
  • She said that she had not said that the PWID did not include schools, she did not know. Correction: I miswrote. My intent was to say as indicated in the strike-through.
  • She said that she was certainly not going to go against her superior.
  • I asked what she would say if specifically asked before CC, she said she would say what she was saying then: “she did not know.” This is totally consistent with what she had written me in an e-mail: "I just don't know about schools. The PWID appears to include any public facility."
  • When I replay my memory of what she specifically said several weeks ago when I asked if the PWID could include schools, my memory is that she said, “Well, schools are certainly a public facility.” As above: the e-mail quote was."The PWID appears to include any public facility."
  • I interpreted this to mean that the PWID could include schools.
  • Apparently she was just saying that a PWID could possibly include schools, not that it did.
  • If it “could,” I suggest that county council move forward as if it does.
  • The statute for the PWID is named the “Public Works Improvement Act” statute on the state Web site.
  • The RID bill number is H4745 in the state House and the companion bill number in the state Senate is S1213. The last I checked these are still works in progress.
  • If after further looking into the matter, you believe that it could be rationally argued either way whether the PWID covers schools or not, I would greatly appreciate your putting that on the public record by saying that in a public council meeting.
  • If it can be argued either way and we don't know for sure how it would play out in court, whether it is in its “purview” of county council’s legal responsibilities or not, I believe county council has a moral responsibility to its constituents to require use of the PWID as I have recommended. I would plea that it do so.
  • If such is challenged in court, I believe that the school board would surely agree to pay any possible attendant legal costs.
  • Remember impact fees were deemed effectively unusable in S. C. until Summerville took the issue all the way to the S. C. supreme court.  The return we are looking at here is much more than is possible from impact fees – infinitely more from the point of view of schools.
  • We are looking at an absolute rock-bottom cost for school facilities in Carolina Station alone of $105 M in today’s dollars, the bulk of which will otherwise be paid by taxpayers other than those in Carolina Station.  
  • Thank you for discussing this with me and further looking into the situation.

George Edwards

 

P. S.

 

1. Barnard’s objection that developments less than 24 acres would not be be covered is accurate. As I’m confident that you are aware, a PWID, as any special tax district, requires the district’s owners agreement (at the time of the agreement, although it can “pass with the land” thereafter). And state law only allows development agreements on developments above 24 acres.

 

The greater than24 acre requirement could also be looked at as a loophole for developers to just not seek development for any properties greater than 24 acres at a time. But until we get some true semblance of home rule, through the courts if necessary, we have to “play with the cards we are dealt,” that is, within the constraints of S. C. statutes.

 

On the other hand, the greater than 24 acre requirement could also be looked at as relief for the little guy. And, at least, those taxes to pay for the  needed school facilities for the big developments in excess of 24 acres would be diverted to the developments that require them.

 

As it is, the rest of us just pay unjustly for the bulk of the costs of school facilities not required but for the new developments, for all new developments. Is this preferable? I don't believe so.

 

2. Does your question to me, as to whether I was suggesting the county should construct the schools and lease them to the school system suggests that something along that line is unquestionably within the law? Particulars? Wouldn't such just mean that the school system and so taxpayers outside new developments would be paying for leases instead of school system bonds? If so, what would be the benefit?

 

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