Annexation Legislation

Senator Paul Thurmond and Representative Peter McCoy filed legislation to amend South Carolina's annexation laws so that the Town will be able to regain the citizens it lost in the 4th incorporation.    The legislation was filed very late in the session, which is now over.  The bill, or some improved version, can be prefiled in December for next year's session.

I prepared the earliest drafts of the bill.   Trent Kernodle, who had been retained by the Town for annexation work, recused himself, stating that he had a conflict of interest because he worked for the James Island Public Service District.   Soon after, Kernodle resigned from representing the Town, again citing a conflict because he worked for the JIPSD.   Danny Crowe, an attorney who had worked for the SC Municipal Association, was retained by the Town to review the bill.   Senator Thurmond directed the Senate Judiciary Committee staff to review the bill as well.   

Drafts passed between Town Hall, Crowe, and the Senate staff.   In the closing days of the session, I asked Senator Thurmond to file the bill, which he did--Senate Bill 723.   I then asked Representative McCoy to file a companion bill in the House, which he did--House Bill 4265.    Representative McCoy asked House Speaker Bobby Harrell and Representatives Merrill and Brown to co-sponsor, and they did.   Our elected representatives were very helpful, and all Town citizens should thank Senator Paul Thurmond and Representative Peter McCoy for their efforts to reunite our Town.

The key addition to existing law proposed by the amendment is:

(B)    In addition to the provisions of subsection (A), if a municipality annexes an area which includes the majority of the population or registered voters of a special purpose, special taxing district, then the district, at its sole discretion and after a public hearing, may petition the municipality by resolution to annex the remaining unincorporated portion of the district.  This method of annexation is in addition to any other provided by law.
(1)    Contiguity of the municipality with any part of the district, including any part already incorporated in the municipality, is sufficient to allow annexation of the entire remainder of the district regardless of any break in contiguity in the area where the district currently provides services.
(2)    After receiving a petition by resolution from the district, the municipality, at its sole discretion and after public hearing, may annex the remainder of the district by ordinance.

This amendment would apply to the Town and the James Island Public Service District.   There are 13,768 registered voters in the JIPSD, and 8,954 of them are residents of the Town of James Island.   Registered voters of the Town make up 65% of the registered voters of the JIPSD.
Of course, the bill needs to pass both the Senate and the House.   And then it would need to be signed by Governor Haley.

Once the state annexation law is amended, then the JIPSD Commissioners would be authorized to petition to annex the remainder of the district to the Town.  When I prepared the early drafts, I had assumed that the JIPSD Commissioners would be unanimously in favor.  Of course, James Island Town Council would gladly accept the return of our former citizens.

The result would be exactly the situation in the first two incorporations.   The Town and the JIPSD would continue to exist as they do now, but they would have the same residents and voters.    It would be very similar to the third incorporation, since there were only a handful of residents in the JIPSD that were not included in the Town from 2006 to 2011.    However, none of the residents that have annexed to the City of Charleston or the City of Folly Beach would be included in the Town.

The amendment would not require that the JIPSD or any of the special service districts in South Carolina do anything.   It would only give the Commissioners the option of petitioning to bring the roughly 6,000 citizens who were left out of the current incorporation back into the Town.

Similarly, the amendment would not require the Town of James Island or any other municipality in South Carolina to do anything.    It would only authorize municipalities to annex the remainder of special service districts if petitioned by the district.   The municipality could always refuse.   Of course, the Town of James Island wants its citizens back.

Town Administrator Hal Mason and I met with JIPSD Chairman David Engelman and District Administrator Robert Wise in late February.   At that meeting, I outlined this proposed amendment.   Also at that meeting, I explained that the Town was seeking its own tax district and discussed plans to provide a property tax credit in cooperation with the County Auditor's Office and JIPSD.  I met separately with Commissioners Hollingsworth, Brown-Crouch, Waring, and McMillian to describe the proposed amendment.   I asked Commissioner Platt to meet with me, but he insisted on having Commissioner Welch join him.  I said fine.   I mentioned the proposed meeting to Commissioner Welch at a JIPSD meeting this spring.   He was willing to meet, but I never followed through.

Immediately after the bill was filed, I sent a letter to the Chairman of the JIPSD that included a copy of the bill.   This letter was copied to all of the Commissioners.   Commissioner Waring was worried that the bill could be used to destroy the JIPSD.    The portion of the bill that concerned her was:

(C)    If the remainder of the district is annexed by the municipality according to the provisions of subsection (B), any plan for the transfer of services from the district to the municipality described in Sections 5-3-311 through 5-3-315, shall be formulated after all areas of the district have had an opportunity to vote for the election of municipal officers.  Until such municipal elections have been held, the district must be allowed to continue to provide services in the entire area of the district incorporated in the district.

This section of the bill provides extra protection to a special service district that petitions to have the remainder of the district annexed to a municipality.    Sections 5-3-311 through 5-3-15 are already included in South Carolina's annexation law.   The first provision is:

 (1)    At the time of annexation or at any time thereafter the municipality may elect at its sole option to provide the service formerly provided by the district within the annexed area.  The transfer of service rights must be made pursuant to a plan formulated under the provisions of Sections 5-3-300 through 5-3-315.

The proposed amendment restricts a municipality by postponing any exercise of this already existing legal right to directly provide services in its jurisdiction.   For example, if the JIPSD petitioned the Town of James Island to include the remainder of the district into the Town, and the Town annexed the territory, then the Town would be required to postpone any effort to directly provide solid waste collection, fire services, or sewer services until after all of the newly annexed citizens had a chance to vote in Town elections.  I am not concerned with the restriction upon the Town due to this provision because I have no plan to have the Town directly provide solid waste collection, fire protection, or sewer services.

Councilwoman Waring expressed her worries that the amendment would allow the Town to take over the JIPSD at the District meeting on June 10th.    Commissioner Hollingsworth reported that Commissioner Waring had pointed this out to him and that he shared her views.   Commissioner Brown-Crouch said that some people have been saying that the Town is trying to destroy the JIPSD.  She also stated that she had asked Mayor Woolsey if that was true, and reported that he had said that the Town is not seeking to destroy the JIPSD.  Representative Peter McCoy, also at the June 10th meeting,  responded that no part of the amendment would allow the Town to take over the JIPSD and that he was in no way working against the JIPSD.

While state law gives municipalities the legal right to provide services, it also provides protections to those remaining in the unincorporated portion of a special service district.  It states:

(4)    In any case in which the municipality annexes less than the total service area of the district, the district may, at its sole discretion, retain ownership and control of any asset, within or without the annexed area, used by or intended to be used by residents within the district's unannexed area or used or intended to be used to provide service to residents in the unannexed area of the district.

However, special service districts in South Carolina, including the JIPSD, depend more upon a Federal court decision that allows special service districts that have borrowed money from the Federal government to continue to collect taxes from municipalities that have annexed part of their territory.   The JIPSD collects 14% of its general fund revenue from the City of Charleston and 2% from the City of Folly Beach.   Incredibly, the City of Charleston pays nearly $800,000 per year to the JIPSD, but insists on collecting its own solid waste and providing its own fire protection in the annexed areas.

The Town is not about to pay for the same services twice.  If the Town is compelled to pay for services, then the Town will insist that the JIPSD provide the services to the residents of the Town.

State law also states:

(5)    Upon annexation of less than the total area of the district, the district's boundaries must be modified, if at all, by the plan formulated pursuant to the provisions of Sections 5-3-300 through 5-3-315.  The plan must specify the new boundaries of the district.

The Town will never accept drawing new boundaries of the JIPSD to exclude Town residents.   We will not permit any restriction of the right of our citizens to vote for JIPSD Commissioners as long as the JIPSD claims the legal right to force us to pay for their services.

Since the majority of the voters in the District are in the Town, in the long run, the voters in the JIPSD will choose Commissioners that cooperate with the Town.  I see the Town and PSD as two sister governments who work together as a team to represent and provide services to the people of James Island.

Nearly everyone currently in the JIPSD who is not in the Town was in the Town just two years ago.   The Town of James Island is seeking the return of all of its former citizens.  It is absurd to think that the Town of James Island would do anything to hurt the interests of our past and future citizens. 

It is my view that any conflict between the Town and the JIPSD should be resolved by appeal to the voters of James Island.   The Town seeks the return of all of our citizens, which will mean that every JIPSD voter can also vote for Mayor and Town Council.    While I have no plans for the Town to directly provide any of the services currently provided by the JIPSD, any change in how the two sister governments provide these services should occur by mutual agreement by Town and JIPSD representatives elected by the same voters.   And that is why Senator Thurmond's and Representative McCoy's bill would greatly benefit the people of James Island as well as the citizens of any other special service district and municipality that find themselves in a similar situation.