BUSINESS LICENSE TAX PROGRAM: I have had discussions with several business owners regarding the City’s business license ordinance. Most would like to see the program eliminated reasoning that more businesses would move into the City. Many now locate in the County as close to the City as they can get to obtain the best of both worlds. They can service city residents, but not pay the city business tax. Currently the City of Aiken receives approximately $2.1M from businesses located within the City so replacing that revenue would be a challenge. Additionally there may be an issue of whether the City could eliminate the tax only from businesses located within the city without imperiling similar taxes collected from insurance companies and telephone companies. Additionally, business leaders point out that they pay property taxes and a furniture, fixture and equipment tax on an annual basis. At tonight’s meeting, Ashley Landess, President of the South Carolina Policy Council will brief the Council on the impact of business license fees to the business community.
APPROVAL OF LOCAL OPTIONS SALES TAX MEMORANDUMS OF UNDERSTANDINGS (MOU): At the last City Council meeting, City Council, on a 4-3 vote, approved four LOST projects for agencies not a part of the City. These included the SPCA, the African-American Arts, History and Culture Center, the Galaxi Teen Center, and the YMCA. The approval was contingent on each of the agencies signing a formal agreement with the City of Aiken which lays out the terms under which funds would be given to them. Ben Moore, Staff Attorney, has developed these MOUs which are presented for review and comment tonight. Each of them has a clause which stipulates how the City would be involved in these projects through a lease agreement. Once Council approves these agreements, they will be given to each of the boards for their approval. We are inviting each of them to be at tonight's meeting should you have any questions concerning the agreements.
FIRST READING OF AN ORDINANCE TO AMEND THE ZONING ORDINANCE REGARDING PORTABLE SIGNS IN THE DOWNTOWN BUSINESS ZONE: For the last couple of years the City has been discussing with the Downtown Development Association the portable signs (sandwich boards) used by many of the businesses. The current Zoning Ordinance prohibits these types of signs on sidewalks since they are in the street right of way and therefore considered as off site signage. Last fall the Aiken Downtown Development Association (ADDA) proposed standards to regulate signs on the sidewalk in the downtown area. Since that time several meetings have been held between the ADDA and the Planning Commission concerning this proposal. At the April Planning Commission meeting they voted unanimously to recommend amendments to the Zoning Ordinance regarding portable signs in the Downtown Business area as proposed in the attached amended Zoning Ordinance. The only additional changes that they recommended were that the sign would be no taller than 4 feet, including the legs and no wider than 2 feet and not more than 6 square feet in total area. They also added an item 4 under the same section that stated all signs must be brought inside when the business is closed. Based on the recommendation from ADDA and the Planning Commission, we recommend that City Council consider approval of the attached amendments for temporary signs
APPROVAL OF BUS SHELTERS: The City of Aiken since the 1990's has been supporting the Best Friend Express for citizens within our community. The Lower Savannah Council of Governments (LSCOG) has recently obtained a grant to purchase bus shelters within the community. They have received this grant from the Federal Transit Authority which will pay for two shelters, one at the hospital complex and the other near Hahn Village on SC 19. The only requirement of the City is to install concrete slabs and to erect the shelters. We feel these costs would be under $1,000 total for the two shelters. We have attached a map showing the approximate location of these shelters and a picture of the shelter for each of these locations.
SECOND READING OF AN ORDINANCE TO ADJUST WATER AND SEWER RATES: Based on our preliminary projections this year's budgeted revenue will be the same or possibly worse than last years $1 million. In order to meet next year's budget we will need to increase our water and sewer rates by approximately 11.3% or hope for a major increase in water sales due to a dry summer. NOTE: I am not including all the exhibits mentioned in the comments below. They are available in the City Council Agenda on the web site for those who are interested in the details.
We have attached several exhibits showing why we are experiencing this short fall and the need for the increase. The first exhibit lists the charges from the Aiken County Public Service Authority (ACPSA) for the treatment of our waste. As you can see our rates have more than doubled in the last 10 years amounting to more than a 10% increase per year. Most of this is due to additional expenses which they are passing along and the loss of a major customer, Graniteville.
We recently received a letter from the ACPSA that stated, due to increased operating costs their rate will increase about 8% next year.
The second exhibit shows our water and sewer rates in comparison to other major cities in the state and some smaller cities in the surrounding area. As you can see our closest comparison is North Augusta and our water and sewer rates are approximately 20% below their rates. In comparison to other cities in the state we are over 50% below the state average.
The third exhibit charts the rate increases we have had over the last 10 years. As shown we have not kept up with the increasing rates in our state and have been relying on growth and dry periods for higher water revenues.
Exhibit 4 shows our projected capital expenses over the next 10 years versus depreciation, and the debt repayment plan for these expenditures. As shown we would be making smaller payments initially and increasing the payments once our bonds are paid off in approximately four years. Next year we will use all of our accumulated depreciation and will need to borrow funds sometime during 2011 to meet future utility expenses. Our goal is not to issue bonds, but to borrow the money internally to meet our future needs.
The water and sewer revenue over the last 10 years is shown in our fifth exhibit with the projection for this year based on the first 8 months of actual sales. Over the last two years our water and sewer revenue has decreased dramatically compared to the 2008 water revenue and 2009 sewer revenue.
Exhibit 6 gives examples of the different rates that other cities have for turn on, turn offs, and reconnections operations within their Utility Systems. As we discussed at Horizons, we need to increase these rates (Exhibit 7) to meet our operational expenses.
Exhibit 8 displays our proposed revenue needs for water and sewer in the 2011-2012 budget. The projected increase would be 11.3% over the current water and sewer revenue.
And, lastly, Exhibit 9 shows the cost for a customer using 800 C.F. of water/sewer monthly and what their average rate increase would entail. A 5% increase amounts to an additional $1.74 per month and an 11.3% increase would be $3.84 per month.
We recommend that City Council consider the 11.3% increase for water and sewer plus the increases displayed in Exhibit 7 for our services. At a minimum Council should increase the rates by 5% at this time with an automatic increase of 6.3% at the end of the summer if the revenue during the summer does not equal or exceed 48% of the budget by the October 1 billing. If our water sales are higher than projected, then we could forestall having another increase this fall.
Next year's budget includes funding to begin the engineering and construction of a new water treatment plant and storage tank located off Silver Bluff Road. In addition to the continual renewal of our equipment, we are also projecting the need to replace all of our water meters and to purchase additional sewer capacity within the next few years.
US CENSUS PARTICIPATION: The US Census form mail-in, (preliminary reports), show our city residents have listened to your message about the importance of participating in the decennial census by mailing in their Census forms. As of April 16, 2010, over 78% of our residents have responded. This rate compares to a 69% nationwide average response rate, and our final 2000 city resident response rate that was only 72%. The County response rate is 72%. Several city staffers and local volunteers have worked very hard to improve response rates by our city residents. These preliminary reports show good improvement in this area. In addition, the canvassers hired by the US Census to visit non-responders door-to-door will have an easier job in our city. Since fewer visits to residences will be necessary. If you have not yet mailed your Census forms, please do so now!
WORKERS’ COMPENSATION PREMIUM REDUCTION: Our City wellness program and the focused efforts by our City Safety Committee members, coupled with our Risk Management staff efforts have resulted in significant savings in the amount of our annual workers compensation insurance premium. Our recent meeting, with Phil Cromer of the South Carolina Municipal Insurance Trust, has shown that our potential premium for workers’ insurance compensation of $647,797 has been reduced to $90,434. These reductions are due to fewer compensable injuries, smaller claim amounts in compensable claims, healthier workers, worker safety performance above the state average, quicker reporting times, higher deductable, and a host of other factors working in our favor to keep these premiums lower. We continue to pursue initiatives to keep our employees working safely.
2010-2011 Budget Meeting: City Council has scheduled a budget planning meeting for Monday, May 3. The public is invited to attend. The meeting will be in Room 204 of the Municipal Building.
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