City discusses financial issues at retreat

By Chad Rhoad
Editor/ The Messenger
Published: November 19, 2008

Hartsville city staff and council members are evaluating a potential increase in the cost of water and sewer services for city residents due to the financial situation facing the city. Staff members and council met Friday during council’s work retreat at Lawton Park.

The water and sewer systems in the city are in need of repairs and upgrades, Public Works Director Mike Welch told councilmembers, and the only way to implement the changes needed to continue service is to raise rates. Welch said he is aware an increase in rates would be difficult during these times; however, in order for the city to continue to offer water and sewer services, the rates must increase.

Staff members said that past council’s have drawn money from the city’s utility fund and transferred it to the general fund in an attempt to balance the budget without raising taxes.

Those transfers, staff members said, mirror the actions of many municipalities in the country. However, those transfers have left the utility fund depleted. “Everything (that needs repair) is underground,“ Welch said. “So people cannot see the repairs that must be made.“

Public Works Assistant Director James Clemons echoed Welch’s sentiment. “The (water and sewer) system is deteriorating,“ Clemons said.  “We’re just like other cities everywhere. It is deteriorating, and we have to maintain it.“

Council members are considering a few options regarding the increase, but an increase must occur in order to maintain service. “This is not a tax,“ City Manager Jim Pennington said.
“This is a cost for service. The electric company charges this person the same amount as this person. That is what we’re dealing with. We know the impact of this.“ Pennington said these changes must be made in order for the city to continue to provide these services.

Council also heard from City Finance Director Renee Douglas. Douglas explained the current situation with the city’s budgets.

She said the taxes that are coming into the city are not enough to cover the expenses of the city. “Tax money doesn’t pay for everything,“ she said.

For example, Douglas said the tax revenue collected by the city paid for the police, fire and court system costs last year with only $19,000 remaining to fund every other organization within the city. “We’ve been trying to watch every penny,“ Douglas said. “We don’t even order paper until we have to have it.“

Essentially, the fact that the city has to fund services for the nearly 40,000 in the Greater Hartsville area but only has a tax base of 7,000 is beginning to take a serious toll on the city’s ability to provide services. Taxes also cannot be raised on the 7,000 city residents because of a millage cap placed on municipalities by property tax reform legislation Act 388.

Pennington told staff and council members at the end of the meeting to go home and establish priorities for the city’s services. He said when the city plans the budget for the next fiscal year, cuts will probably have to be made. “When we build that budget next year,“ he said, “it will have to be built on those priorities.“
The council will meet again for its scheduled meeting on Tuesday, Dec. 9, at Hartsville City Hall, 133 W. Carolina Ave., Hartsville.