Sunday, May 29, 2016

The Republican Primary for Senate Seat 41 on June 14

Many of us on James Island are in South Carolina Senate District 41.  The boundary is Fort Johnson Road.  South of that boundary is Senator Chip Campsen's District 43.  North of that boundary is Senator Paul Thurmond's district 41.

Senator Thurmond is not running for reelection.   There are four candidates seeking to replace him--all Republicans.   No Democrat has filed, so whoever wins the Republican Primary on June 14 will be unopposed in November.

I am sorry to see Senator Thurmond go.   Like Representative Peter McCoy, he has always been very supportive of the Town's legislative goals in Columbia.   In particular, he supported our effort to amend the annexation laws so that the former residents of the Town would have an opportunity to join the Town.   He supported our effort to reunite the Town.

County Councilman Joe Qualey was running in the Republican primary.   I endorsed him.   He served on James Island Town Council from 2002 to 2004 and from 2006 to 2010.    In 2010, he was elected to County Council.  He strongly supported our effort at incorporation in 2012 and has supported the Town on County Council since.   I can't say that I always agree with him on every issue, but I was confident that he would support the Town's interests in the South Carolina Senate.  

Last week, County Councilman Qualey withdrew from the race, leaving four candidates--Charleston County Assistant Prosecutor Culver Kidd, Former Charleston City Councilman Tim Mallard, Roy Maybank, and Sandy Senn.

I have spoken with three of the four remaining candidates:    Kidd, Maybank, and Senn.   I also went to the candidate forum sponsored by the Charleston County Republican Party in West Ashley and saw all of them answer questions about the issues.

When I spoke to the candidates, I focused on legislative issues that I think are important to the Town.  Obviously, there are many issues that are important to South Carolina and the Lowcountry.   Like all voters, I will have to weigh those issues as well as issues important to the Town.

Still, I would like to share what I consider the key issues facing the Town of James Island in Columbia.

1.   Will our next Senator help pass the legislation needed to reunite the Town?

The Town is working with Representative McCoy to pass House Bill 4203 .   Once it passes in the House, it needs to pass the Senate and be signed by the Governor.

This bill will clarify the definition of contiguity so that if a municipality is within the same special purpose district as a parcel of property and would be contiguous with that property but for a break in the contiguity of the special purpose district, then it will be contiguous to the municipality for purposes of annexation.

The Town of James Island is entirely within the James Island Public Service District.   Those who were in the Town in 2011, assuming they didn't annex into the City of Charleston, remain within the James Island Public Service District.  Those who are not in the Town now, however, are separated from the rest of the Town by areas annexed by the City of Charleston.  These areas annexed to the City of Charleston have been removed from the James Island Public Service District, creating a break in the contiguity of the James Island Public Service District.  If it were not for this break in contiguity in the James Island Public Service District, some of the properties in those areas would be contiguous with the Town.

Once the legislation passes, we can organize a petition drive.   If 25% of the registered voters in those areas that were in the Town sign a petition to join the Town again, then there will be an election.  If the majority of voters in those areas favor returning to the Town, then the Town will be reunited.

This definition of contiguity would only apply if residents of the municipality are eligible to vote for the governing board of the special purpose district.   This is because a key rationale of allowing this rule for contiguity is to allow those within a special purpose district to vote for the municipal governing body (Mayor and Town Council) since the residents of the municipality can already vote for the governing board of the special purpose district.   There are few if any other places in South Carolina where a municipality is entirely within a special purpose district that has an elected governing board.   This makes passing the Legislation easier.

I believe that our new Senator should help.  This is my key priority.   I promised to give everyone who was in the Town of James Island a chance to vote to return to the Town.

2.   Will our next Senator help fix the crazy implication of the millage cap for new municipalities?

Local governments in South Carolina can only increase their operating property tax millage by a percentage amount equal to the population growth rate plus the inflation rate.   So, if the municipality had a millage of 20, and the population growth rate were 3% and the inflation rate were 2%, then it could increase its millage by 5%.  That would be from 20 to 21 mills.

This rule creates a puzzle for new municipalities.  If the operating millage rate is zero, then if the population growth were 3% and the inflation rate were 2%, then the millage could increase by 5%.  But 5% of zero is still zero.    The millage cap appears to imply that new municipalities can never have an operating property tax millage.

There are a number of exceptions in the law, but three of them are for a bond millage, a millage for lease-purchase payments for real property, and a millage for a reserve.    The Town of James Island has a millage for lease-purchase payments for real property and for a reserve.   We can use those funds for capital improvements, but not for operations.    For example, we can pay for our new Town Hall, but we could not pay to expand the Island Sheriff's Patrol or, more importantly, pay for solid waste collection services by contract.

It is possible that if the Town changed its millage to an operating millage, we could use the funds to pay for a contract for solid waste collection and no one would complain. (I wouldn't bet on that.) Or, it is possible that the Town would be sued (likely,) and that the Court would rule that the Legislature did not intend to never allow new municipalities to collect an operating millage (Quite possible.)  Or, the Court could rule that the letter of the law prohibits an operating millage and the Town must give all the money back.   Since the Town would have already spent the money on services, that would be a very serious problem.

I have proposed to the JIPSD that they reduce the millage they collect in our Town and provide us services by contract.    Just this year, I proposed that they reduce the millage they charge in the Town so that their taxes no longer cover the cost of solid waste collection in the Town.   If the JIPSD agreed, I would ask Council to adopt an operating millage for garbage service equal to the reduction in the JIPSD millage, so that the total millage for Town taxpayers would be the same.   The Town would then pay the JIPSD for solid waste collection services by contract.

Because the Town would provide a LOST credit against the Town property tax, there would be a substantial tax cut for property owners in the Town.   The residents of the Town would continue to get the same solid waste collection service and the JIPSD would continue to get the money needed to cover the costs of providing the service, but property taxpayers in the Town would pay less.

Here is the problem.   A town property tax to pay for solid waste collection would be an operating millage.   Our current operating millage is zero.   We would need to increase it to approximately 20 mills (replacing our current millage for lease purchase payments and reserve with an operating millage.)    Is an increase from an operating millage of zero to 20 a violation of the millage cap?

If the JIPSD were to agree with this proposal, I would seek a declaratory judgement by a Court that the Town could substitute its operating millage for part of the JIPSD operating millage.  Unfortunately, this would take time and an appeal would take longer.  And, of course, it would involve paying ample fees to attorneys.

That the change would leave the total millage the same would be a key argument.  The fact that a LOST tax credit would reduce the total amount actually paid by the taxpayer would also be relevant.   Did the Legislature really intend that the millage cap be a barrier to a property tax cut?

Rather than force the Town to go through some expensive legal process, I think that it is the responsibility of the Legislature to clarify this crazy formula that implies that new municipalities can never have an operating millage.

I believe that our new Senator should be willing to help.

3.   Will our new Senator help clarify whether the Local Option Sales Tax law requires a refundable property tax credit?

When I became Mayor in 2010, I asked the Municipal Association of South Carolina about the Local Option Sales Tax.   They explained that municipalities with no property tax are not obligated to provide credits against a property tax liability that does not exist.  They pointed out that there are many municipalities with no property tax and they just use the money to pay for services.

However, I supported reducing property taxes--not as a legal obligation, but as a Town policy.   The people in the Town pay property taxes for fire and solid waste services to the JIPSD and our property taxes aren't low.   The millage we pay is lower than what is imposed by the City of Charleston, but higher than what is charged by the City of Folly Beach.

After witnessing first hand the mess created by trying to mail out "refund" checks, I decided to come up with a better plan and began to work on some way to provide tax credits on the property tax bill.  To me, the obvious place to provide the credit is with the JIPSD millage because they are collecting property taxes and providing services that other municipalities, like the City of Charleston and the City of Folly Beach, fund with their property tax revenue.

Now, most municipalities provide a property tax credit on the tax bill.  That means that taxpayers pay less property tax, the municipalities receive less property tax revenue and the money from the Local Option Sales Tax is used to pay for services that would have be paid for by revenue from the property tax.   (The municipalities with no property tax don't provide any tax credits and just spend the money on services.)

So, in 2013, I asked the JIPSD if they would provide a credit against their tax millage.  They said no.   For 2014, I suggested that the JIPSD stop collecting a millage in the Town and let us buy fire and solid waste services from them by contract.   The Town would collect a millage and we would provide a property tax credit against our own millage.   The JIPSD said no.   For 2015, I proposed that the JIPSD collect a lower millage in the Town and let the Town purchase solid waste collection from them by contract.  The Town would collect a millage, leaving the total millage unchanged.

The response was a class action suit against the Town seeking to force us to write refund checks.   It was just a coincidence that the JIPSD lawyer filed the suit and the two representatives of the class were former JIPSD Commissioners.... right.

We are defending against that suit.  The Town's position is that the plaintiffs are claiming that the property tax credit required by the LOST statute is refundable, which means that if the credit is greater than the amount of the property tax liability, the excess credit must be paid out to the taxpayer.   In South Carolina income tax law there are many tax credits, but only a handful of them are refundable.   Those few all specifically state that they are refundable and there is a provision of the law that states that a credit is not refundable unless required by law.   However, that rule specifically applies to any tax administered by the South Carolina Department of Revenue (SCDOR.)   Property taxes are administered by County Auditors and Treasurers.   There are a variety of property tax credits authorized in South Carolina law.   None of them are described as refundable.   Are they not refundable like nearly all the income tax credits?  Or are they refundable?  That is the question.  Too bad the Legislature never bothered to say.

While there are only a few income tax credits that are refundable, SCDOR routinely provides refunds for most taxpayers because of income tax withholding.  This makes it relatively easy to provide for a refundable income tax credit.  Local governments do not usually provide refunds to property taxpayers, but rather just send out bills and receive payments.  Property tax refunds occur when there was some error and a taxpayer was billed and paid too much.   Most property taxpayers do not routinely receive property tax refunds.  If the Legislature makes a property tax credit refundable, it would be imposing an obligation on local governments to develop a special administrative apparatus to provide refunds.

I believe that the South Carolina Legislature should clarify that unless specifically stated, no tax credits authorized under South Carolina law are refundable, not solely those that are administrated by SCDOR.   Further, the Legislature shouldn't make any property tax credit refundable because it imposes an unreasonable burden on local governments.

Of course, we are currently battling this out in court.

In response to the suit, the Town has adopted a property tax millage and we are meeting the requirements of the law by providing a credit against that millage.    In my view, the only remaining issue in the suit is about the LOST funds the Town received in 2012, 2013, and 2014 before we adopted a millage and began providing credits.   Does the Town have to mail out refunds to everyone who would have had to pay property taxes to the Town if we had a property tax during those years?  Clarifying the law now would not directly fix what happened in the past.

But I think the Legislature should clarify this matter going forward, and not just for the Town of James Island, but also for the 40 municipalities in South Carolina with low or no millage.

I believe that our new Senator should be willing to help.  

4. Will our new Senator help clarify the status of municipalities that incorporate within a special purpose district?

The South Carolina Code has detailed procedures governing the relationship between a municipality and a special purpose district when the municipality annexes part of the special purpose district.    These procedures protect the interests of both the residents within the municipality and those residents of the special purpose that remain outside the municipality.   However, South Carolina law is silent on what happens when a municipality is incorporated either partly or wholly within a special purpose district.

This is a deficiency within the law, and I think the Legislature should fill the hole.  The most obvious fix would be for the same rules to apply whether some or all of a municipality was incorporated within a special purpose district or else it has annexed a portion of the special purpose district.

All of the Town of James Island is within the James Island Public Service District.  Most of it was incorporated within the district but some parts have been annexed.   If we are able to reunite the Town, it will still be true that most of the Town will have been incorporated within the JIPSD, but about 1/3 of the residents will have been annexed.

The rules for the areas that the Town annexed are clear.  The Town has the right to provide any or all the services provided by the JIPSD either directly or by contract with the JIPSD.   Whether or not the annexed areas remain within the JIPSD is a matter for negotiation.  The amount that the Town must pay for services by contract is subject to negotiation.   The statute requires that the County Auditor and Treasurer make the needed changes in the property tax bills and states that the JIPSD and the Town cannot both collect taxes for the same services.  The reduction in taxes collected by the JIPSD for some service it currently provides in the Town would also be something that would be negotiated.

Given the JIPSD's attitude about working with the Town, how could we ever hope to negotiate an agreement?  

Fortunately, the statute mandates binding arbitration.    I think it is entirely reasonable that the JIPSD stop collecting taxes within the Town for the provision of solid waste services and allow the Town to pay for that service by contract.   I think it is fair for the Town to pay the amount that the JIPSD would have collected from those taxes.  The Town would be paying on behalf of those in the Town a fair share of the total cost of providing the service in the district.  The Town, of course, would have to collect its own millage to cover the cost, but that would leave the total millage unchanged.   And with the LOST tax credit, the people in the Town would pay less.   The Town would insist that our residents remain within the JIPSD, so that we could continue to vote for JIPSD Commissioners.  That would be fair and  reasonable because the JIPSD would still directly collect taxes for fire services from the residents of the Town and also would impose sewer fees.   The residents of the Town should have representation on the Commission when those decisions are made.

The current statute does not allow the JIPSD to continue its practice of stonewalling.   Well, at least not regarding the areas that the Town has annexed.  But the law is unclear regarding areas that were originally incorporated--most of the Town.

The Town could seek a declaratory judgement or simply follow the procedure that applies with annexation for both the annexed and the originally incorporated portions of the Town.   But I think the SC Legislature should clarify the matter.  Why isn't there some procedure for resolving conflicts between a special purpose district and a municipality that was incorporated either wholly or partly within the special purpose district?

I believe that our new Senator should be willing to help.

Where do the candidates stand on these issues?

Friday, May 13, 2016

Proposed Amendment to the Town's Tree Ordinance

The Town's staff proposed to the Planning Commission that the provisions of the Town's Zoning Ordinance regarding protected trees be applied to major residential subdivisions.  Trees with DBA (diameter at breast height) of eight inches or greater are already protected with new commercial, multifamily, or institutional development.   This change will apply these rules to new major residential subdivisions.   While few major subdivisions are likely in the future, there have been two over the last four years.   The Preserve at Dills Bluff is already in construction and  the"Bootleggers" is moving forward.    The rule change would not apply to those major subdivisions, but it will apply to any future major subdivisions.

The basic rule is that 20 trees greater than 8 inches per acre must be left on a site.  However, the larger the tree, the more credit provided, so it is more accurate to state that 160 inches DBA per acre must be left on the site.   If there are  too few large trees on the site, then new trees must be planted.  That requirement is 40 inches DBA per acre.   These rules already apply to most new development.  The change is that it will now apply to newly developed major residential subdivisions.  

The Town's Planning Commission has recommended this change to Town Council.

In my opinion, the provisions of the Town's tree ordinance should apply to major residential subdivisions in a way consistent with commercial, multi-family, or institutional development.

Town staff has also proposed that the Planning Director be authorized to allow the removal of protected trees greater than 8 inches DBA if necessary for the reasonable use of the property.   Removal of any "Grand Tree," with DBA greater than 24 inches, would still require approval by the Town's Board of Zoning Appeals.  The Town's Planning Commission has recommended this change to Town Council.

In my opinion, the Town's Board of Zoning Appeals should focus on "Grand Trees" which are special, and leave the merely average "protected trees" to the Town's Planning Director.

Town staff proposed that the Planning Director be authorized to determine the necessary mitigation for protected and grand trees that are removed.   The Town's Board of Zoning Appeals retains the sole authority to permit the removal of any grand tree, but details regarding the mitigation plan are left to the Planning Director.  The Town's Planning Commission recommended this change to Town Council.

In my opinion, experience has shown that flexibility is needed in calibrating mitigation plans because such plans involve specific locations and particular trees that we hope will not only survive but flourish.  The Planning Director can work with a property owner to determine an effective and fair mitigation plan.

Town staff proposed that the Town's Tree fund be used for beautification generally.  The Planning Commission recommended against that proposal and instead limited those funds to be used solely for the planting or maintenance of trees.    In other words, the Planning Commission recommends  that the Town Council spend no monies on shrubs or flowers, but only on trees.  The Planning Commission's proposal did slightly add to the discretion allowed to Town Council.  The funds may be used to  maintain existing trees rather than solely plant new ones.

In my opinion, the Town of James Island has many trees, and while we may well have reason to use Town funds to plant new ones from time to time, planting shrubs and even annuals may sometimes be a better use of the Town's limited funds.  However, allowing the Town to use those funds to maintain existing trees rather than just plant new ones is an important and desirable change.

Town Hall Location

The Town is putting together a site for the new Town Hall.   The total site will be just over two acres and will be made up of two parcels in the Town and part of a third parcel that is under City of Charleston jurisdiction.

All three parcels are near the corner of Dills Bluff and Camp Road, very close to the current location of Town Hall.

Two long vacant parcels are located on Dills Bluff Road.   The first, 1122 Dills Bluff, is next door to First Baptist Church's Landmark Center.   The second, 1126 Dills Bluff, is next door to the first parcel and ends at Hillman Drive.   Together, these two parcels are 1.47 acres, making up 72% of the total site.   Most of the Town Hall site will be under Town jurisdiction.

It is our intention for Town Hall to front on Dills Bluff Road and for the driveway to be there as well.

The other parcel is on Camp Road, and it also next door the the Landmark Center of First Baptist Church.   The address is 1109 Camp Road.   There is a house on the property, but working with the owner, the Town subdivided off the house leaving 1.37 acres.   The Town is seeking slightly more than 1/2 acre of the rear portion of that parcel to add to our other two parcels.   That parcel is under City of Charleston jurisdiction.   This will make up 28% of the total site.   It will make up the rear of the site.  



The Town has been working with City of Charleston planning about subdivision and rezoning of the back portion of  site.   I have spoken with Mayor Tecklenburg and City Councilwoman Kathleen Wilson.  Both are committed to working with the Town on this matter.

I don't see adding this parcel to the other two as a problem.

Thursday, May 12, 2016

Developer Meetings Regarding the Lively

The Lively is a proposed apartment complex on Folly Road.   The current zoning on the site allows for 120 apartments, but the developers are seeking a rezoning to allow 340 apartments.   The developer has scheduled four meetings.  One was already held.  The second is tonight.

Here is the link.

COMMUNITY MEETINGS TOPICS
April 26 at 7pm    James Island Elementary     Project
May 12 at 7pm     James Island Elementary    Stormwater
May 24 at 7pm     James Island Elementary    Traffic
June 2 at 7pm      James Island Elementary    Architecture

Somewhat more important will be the meeting of the Charleston County Planning Commission which will make a recommendation to County Council on the rezoning.   That meeting has not been scheduled yet.
Even more important will be the meeting where County Council considers the proposed rezoning.   There will be a public hearing.  This is where concerns about this rezoning and the added congestion it will cause on Folly Road will be heard.

If County Council votes against the rezoning, then only a much scaled down version of the development would be possible--approximately 120 apartments.   More likely there would be nothing right away but sooner or later something entirely different--one of the many commercial uses permitted on the parcel given its current  zoning.   Permanently leaving it as woods or having it developed as single family residences would be highly unlikely.

Friday, April 29, 2016

Grimball and Folly Stoplight

At the meeting regarding the Lively--the 300 plus apartments on Folly and Grimball--some members of the Grimball community brought up the stoplight at Grimball and Folly.   They asked  the elected officials there (which included me and all of Town Council) as well as County Councilman Joe Qualey, when will the stoplight be installed.    The question was quite pointed, suggesting that Councilman Qualey was personally responsible for the stoplight.   We listened to several members of the Grimball community recount accidents from the past.   There was also some whooping and hollering involved which I didn't quite grasp.
 
Somebody at the meeting (and I have no idea who it was,) said that the stoplight was coming in June.  That was news to me.  (Good news.)   Someone else said that it was approved but there was no money.   That was also news, but I am pretty certain it was wrong.    Liz Singleton gave an explanation why SCDOT (wrongly in her view) had said that the intersection did not need a stoplight.   This might have been true at one time, but it is no longer correct.

What I know is that over two years ago, many of the elected officials from James Island had a meeting with SCDOT at James Island Elementary School.   The SCDOT official said that conditions on Grimball and Folly did not merit a stoplight.   All the elected officials insisted that one was needed.  Councilman Qualey was there, along with Mayor Riley and I.   State Representatives Peter McCoy and Leon Stravrinakis were there too.  And many more.   SCDOT gave in.   The various local governments agreed to pitch in with money to help acquire right-of-way.   The Town committed to $6000 for its share.

So, where is the stoplight?   It is in "right of way" acquisition.     Folly Road and Grimball Roads are state roads.   That means that the South Carolina Department of Transportation manages them.   SCDOT is in charge of this project.   They are purchasing land around the intersection for the stoplight.  (Charleston County is not in charge and so members of County Council, including Councilman Qualey, have no particular influence.)

In my view, SCDOT has become somewhat more responsive to the members of the legislature since the flooding last fall.   Peter McCoy and Leon Stravrinakis were just informed by the SCDOT legislative liaison that the project is still in right of way acquisition (as it has been for more than two years now.)   The date was given as sometime "next summer."   I don't read that as being "this June."    The "government relations officer' at SCDOT did promise our State Representatives to see if it can be hurried up.

Saturday, April 23, 2016

Hospitality Tax

Town Council voted 4 to 1 in favor of adopting the Hospitality Tax in the Town of James Island at last Thursday's meeting.   The second and final reading will be at our May meeting.   As always, there will be a public comment period at the May meeting where residents of the Town may share their views to Council on this or any other issue.

The Hospitality Tax is a 2% tax on sales of prepared foods and beverages. This means food and drink sold in restaurants located in the jurisdiction of the Town.  It also includes fountain drinks, coffee and prepared foods sold by the convenience stores/gas stations located in the jurisdiction of the Town.

We have about 30 restaurants (and convenience stores/gas stations) that would be subject to this tax and about 90% are on Folly Road.   Some examples are Zaxbys, Chick-Fil-A, Mondo Delite, and SIPS.

These businesses have located on Folly Road because it is so busy, especially during the spring, summer and early fall.   We call it "beach traffic."    Some of the traffic on Folly Road is people who are from "out of town," in the sense that they don't live in the Lowcountry and are heading to Folly Beach for a vacation.  I don't think that makes up much of the traffic, but the vast majority of the traffic on Folly Road is people who are from "out of town" in the sense that they don't live in our Town, the Town of James Island.   I think most "beach traffic" is people from other parts of the Lowcountry spending some time down at Folly Beach.  And, of course, residents of Folly Beach and James Islanders from unincorporated Charleston County and the City of Charleston use Folly Road too.

The City of Charleston has long imposed a 2% Hospitality Tax, and it is charged at all the restaurants and convenience stores in areas on James Island annexed to the City of Charleston.  (And everywhere else in the City of Charleston.)  It also applies to all the prepared foods sold in grocery stores on James Island.  All of them are under City jurisdiction.  Examples of restaurants under City jurisdiction on Folly Road would be the Screen Door, Kickin Chickin, Taco Bell, IHOP, and McDonalds.      

The City of Folly Beach, the Town of Mount Pleasant, the City of North Charleston, etc., etc., etc., all have a 2% Hospitality Tax.   The State of South Carolina does not allow local governments to just come up with their own unique taxes.   The Hospitality Tax is one of the few taxes that can be imposed by a municipal government.   That is why so many local governments collect it.

The funds raised by the Hospitality Tax must be used somehow in relation to tourism.    And while the promotion of tourism is a possible use, dealing with the costs and burdens created by tourism is also an allowed use.  

I do not believe that the Town of James Island needs an expensive government program to expand tourism on James Island.    However, we see the cost of tourism--congestion on Folly Road--every day.   One of the allowed uses of the Hospitality Tax is to improve and maintain transportation infrastructure used by tourists.  Folly Road obviously counts.

Last year, the James Island community was part of a "Rethink Folly Road" planning process.   It was initially spearheaded by the City of Charleston, but managed by the Berekley-Charleston-Dorchester Council of Governments.   The purpose is to improve Folly Road, including traffic flow.   The result will be very expensive and usually, there is a requirement for a local match.   Further, even if we can get outside funds for construction, there will be maintenance expenses.

I believe that the Hospitality Tax may well be the least bad way for the Town to fund our share of necessary expenses to improve Folly Road.   That is why I am open to this new tax.   The alternatives are worse.

We have had very little citizen response so far.   I was contacted by one of our restaurant owners and staff has had conversations with a few others.   We haven't heard from any of the large chains, as might be expected.   As we have heard repeated several times, they are no doubt surprised that we aren't collecting it already like all the other area municipalities.

We have had a handful of citizens contact the Town.   Some of the remarks suggest major misunderstanding of the tax.

One resident expressed regret that she did not annex to the City of Charleston.   It was a puzzling remark.   Residents of the Town will not be assessed a special  "hospitality tax."   It is rather patrons of restaurants in the Town would see a 2% tax added on to the bill.  If you live in the City of Charleston, you will still pay the tax if you go to a restaurant located in the Town.   And, of course, the City of Charleston has long applied this tax.  This resident insisted that the City of Charleston had no such tax.   They do.  And we have all been paying it every time we go to Ladles or any of the other restaurants under City jurisdiction whether on James Island, on the Peninsula or in West Ashley.

In my view, much of the traffic on Folly Road is due to apartment complexes and other development in the City of Charleston .   I think they very much should help fund Folly Road improvements.   To the degree that those James Islanders who live in areas annexed to the City of Charleston patronize restaurants or grab a coffee from a gas station in the Town end up paying part of this tax, they will be helping to fund the improvements on Folly Road.   Good.

Another resident opposed the tax on the grounds that the City of Charleston doesn't spend its Hospitality Tax money on improvements on Folly Road.   This complaint didn't make much sense, really.   That money goes to the City of Charleston and they use it to promote tourism and help with tourism related costs throughout the City.   Surely, that is mostly on the peninsula.

Councilman Milliken made a similar point when he contacted a TV station.  He implied that this tax is inappropriate for the Town because the Town isn't focused on tourism.  Right.

We at the Town are not going to spend the money to promote tourism in downtown Charleston.  Of course, all of it will be spent to benefit James Island.   And there is no plan to use this money to promote James Island as a special tourist destination.  Improving Folly Road is both a permitted expense and a major priority for the Town.  At least for me, that is why I am even considering it.

Interestingly, we have had discussions at the staff level with the City of Charleston proposing that they earmark their Hospitality Tax money from Folly Road businesses in the City of Charleston to help fund the improvements on Folly Road.   Whether that will occur, I am not sure.   But part of the "deal" would be that the Town would do the same.   That possibility is only on the table if the Town adopts the Hospitality Tax.

Another resident didn't think it was right that when he went to Kickin Chickin he would have to pay this extra 2% in order to improve Folly Road.   He explained that James Islanders only go to "Charleston" for special occasions.

Of course, he already does pay that 2% tax at Kickin Chickin because it is located in the City of Charleston.   If you are thinking that when you go to LaTabella you will pay 2% more---no, you already pay it, because it is in the City of Charleston.

And if you didn't know that you were paying that tax when you go to the IHOP but you do not if you go to Sweetwater Cafe, doesn't that say something about significance of this tax?   Maybe I am cheap, but when I go out to one of our nicer restaurants, I usually spend $40 to $50.  So, it is about 80 cents or a dollar more for the hospitality tax.   Of course, I  don't go out too much.  Maybe other people go out most nights and spend a lot more.  I suppose every little bit counts.

It was also suggested that the Town cut back government waste and use that to improve Folly Road.  The resident then went into a long series of complaints that appeared to be focused on Federal government spending and taxes.   The cost of improving Folly Road outstrips our entire Town budget.   Of course, we can never pay for all of it.   This proposal is to obtain funding to pay a share.   And the kind of money the Town has available from other other sources is very small.   The $450,000 this tax will raise each year is small compared to the cost of doing much of anything on Folly Road, but it is large compared to our current budget.  (The Camp and Folly project is $14 million.  The Town budget is more like $3 million in total.)

However, I can't stop here.   I am an economist.

The basic economics of a sales tax is that the burden is shared by both buyer and seller.   The practice of tacking on the tax at the end only creates the illusion that the tax is entirely paid by the buyer.   The result of a "sales tax" is to slightly reduce the sellers' prices (menu prices charged and received by the restaurant) while also increasing the total amount paid by the patrons including the tax.   Because of our unusual situation where restaurants in the Town do not pay the tax and nearby competitors do pay the tax, most of the burden of the tax would be on the restaurant rather than on the patron.   Basically, Mondos has to compete with the Screen Door, and since the Screen Door has to charge 2% extra, Mondo can charge 2% more on the menu price and the patrons will go home having paid similar amounts at either restaurant.  If Mondo pays the tax too, it will no longer be true.  They will need to come closer to matching menu prices at restaurants in the City.

Now, restaurants are very competitive, but because they are all slightly different, they are "imperfectly" competitive.   And I am sure that few businessmen and women are able to get their pricing and production perfect.   But the baseline presumption should be that this tax will make operating restaurants in the Town slightly less profitable rather than significantly increase the amount paid by those patronizing the restaurants.

Further, given that there are limited parcels in the Town for businesses of any sort, including restaurants, a long run effect of the tax will be to slightly reduce the rents earned by commercial property owners in the Town.   In other words, because a restaurant can currently operate without the tax if they are located on a Town parcel, this slightly raises the rents that the commercial landowners can get for their property.   Since this benefit only applies to restaurants (and convenience stores/gas stations to a slight degree,) this should result in there being more restaurants than other businesses.   There will be a tendency for restaurants to locate on Town parcels and other businesses to locate on City parcels.  This effect would no longer exist if the Town also has the Hospitality tax.

Now, if we spend this money to improve Folly Road, this will be desirable for all of the businesses on Folly Road.   All of the businesses, including the restaurants, will be made more profitable if the Folly Road corridor becomes a better place to stop rather than just pass through. But, in the long run, making Folly Road a better place to have a business will increase the rents that can be charged by the owners of commercial property on Folly Road.

So, the fundamental effect of the expenditure is to benefit the commercial property owners on the Folly Road and the burden of the tax will mostly be on them too.    Think about it.  They benefit greatly by having all of this "beach traffic."  If there were no beach traffic, most of the property on Folly Road wouldn't be commercial at all!   Most of us who live in the Town just see this as so much headache.

I know, it is complicated.  It is a lot easier to say that the "tourists" will pay part of the cost of fixing up Folly Road.   And I think it is likely that some residents of the Town will sometimes end up paying at least a little more when they go out to eat at restaurants on James Island.  As will the tourists and the residents of the City of  Charleston on James Island.   But I am sure that it will end up being much less than the small amount that will be tacked on at the end of the bill.

But even if we do pay some more, we will also benefit from an improved Folly Road.   We have to live with beach traffic.  The only route to Folly Beach cuts through our Town.   In my view, improving Folly Road is an important priority.   As I said above, the Hospitality tax looks like it might be the least bad way to fund it.

Still, I want to know what you think.  Be sure to let me or other members of Council know before our May meeting.  That is when we have our second and final reading.

Tree Ordinance Revised

The Town's tree ordinance revision was finalized Thursday.

The definition of "Grand Tree" in the Town is now 24 inches DBA (Diameter at Breast Height.)    This is a return to the size enforced in the Town before 2013.  The 24 inch definition applied in the area of the Town's jurisdiction for many years.   It is consistent with the definition that applies to our neighbors in unincorporated Charleston County and in the City of Charleston here on James Island.

If you are a homeowner and a tree is in your own yard, and it is less than two feet wide at four feet up, then it is your decision whether to keep it or remove it.   If the tree is a sweet gum (gumball tree,) pine tree, Bradford Pear, or Mimosa, you can still make the decision even if it is larger than 24 inches.    Bradford Pears and Mimosas are the only alien and invasive trees that frequently grow to more than 24 inches on James Island, but the same rule applies to all the others, such as Chinese Tallow (popcorn trees) which, unfortunately, are common here.

If there is a tree in your yard that is greater than 24 inches DBA, then you can only cut it down (or have it cut down) with a permit.   You need to call Town Hall.   If it is sick or dying or else a danger to person or property (usually this is root damage to a foundation,) the Planning Director will investigate and can provide a permit for $25.  If the problem is not obvious, the Planning Director might require an arborist report too, which will cost about $100.

If you want to remove any other tree from your yard that is more than 24 inches DBA, then you still need a permit, but it must be approved by the Town's Board of Zoning Appeals.   You need to call Town Hall.    Modifying the landscape in your yard to reduce crowding of trees, to replace existing trees with different trees (say a water oak with a live oak,) to improve the view, or to reduce shade to allow grass, flowers, or shrubbery to flourish are all examples of reasons that will only be allowed with BZA approval.      The fee to appear before the BZA is $250 for a single tree with an additional $50 for each additional tree.   This helps pay for the advertising we must do.   This fee is paid even if the BZA rejects the request.   Your neighbors might well show up to the BZA meeting insisting that you leave your tree be.

If the request is approved by the BZA, mitigation is required.  This means you must replace the trees that are removed.   The Planning Director will help develop a plan, which could be planting new trees in your own yard, planting trees somewhere else, perhaps in a Town Park, or else paying money to the Town's tree fund which the Town can use for planting trees as it determines in the future.   The plan must be approved by the BZA.   The mitigation is "inch for inch" and so for a relatively small grand tree it will run about $1,000.

The penalties for failing to follow these procedures are very serious.   If you cut down a tree in your own yard that would require approval by the BZA without a permit, then you pay $1000 per tree plus mitigation which is 3 times inch for inch.   For a small grand tree, this would be $4,000.    Larger live oaks can run closer to $10,000 or even more.   Don't do it!

We have had unscrupulous tree companies tell homeowners that the permit has been taken care of.   Don't believe it.   When a professional firm illegally takes down a tree, the Town goes after them and makes them pay a fine and mitigation.  But that doesn't relieve the homeowner of responsibility for illegal removal of trees.   You will be held responsible too.   Worse, the unscrupulous tree company will be no where to be found, taking off with what you paid them and with you owing major fines and mitigation.

If you want to take down a tree and you are unsure about these rules--call Town Hall.   We will be glad to help.

If you are removing trees for new construction, the rules can be more restrictive depending on the proposed use.   Call Town Hall.  You will almost certainly need a zoning permit and building permit anyway.      For most uses, trees with DBA over 8 inches are protected.   For a heavily-wooded parcel, some may be removed, but many must remain.   For all uses other than single family residential, any protected tree that must remain on the property can only be removed with a permit.    The rules for removing grand trees for new construction are the same as those in a homeowner's yard.

Staff is currently reviewing a proposal to apply the Town's protected tree rules to the development of new major residential subdivisions.   These would be subdivisions with more than four single family detached residences.    While I don't anticipate many more of these in the area under Town jurisdiction, I think the rules that apply to multifamily, commercial, and institutional should also apply to any new major subdivisions.    The rules would require that many of the trees greater than 8 inches DBA remain as the homes are built in the new major residential subdivision.  This would not change the rules applying to grand trees.

I have also asked staff to develop a permitting process for work in the right of way in Town jurisdiction.   Part of the reason is a response to problems with the work ATT did on right of ways in the Town over the last year.   Like most James Islanders, I was very unhappy with the ATT contractors.   However, a second reason is to protect street trees .   While we are fortunate to have inherited many large and beautiful street trees, we also plant new ones.   They start out being quite small and need protection when first planted and as they grow.