County discusses courthouse financing options
By Samantha Lyles, Staff Writer, slyles@newsandpress.net
Darlington County Council convened a work session on Monday, February 19 to discuss financing options for either building a new county courthouse or repairing the current facility.
Charles Stewart, county administrator, presented council with a summary of financing options prepared by David Cheatwood, managing director, and Tyler Traudt, vice president of First Tryon Advisors of Charlotte.
These two main options under consideration are General Obligation (G.O.) Bonds, or a Capital Project Sales Tax (CPST) – more commonly referred to as a penny sales tax.
According to First Tryon, there are several advantages when financing with G.O. Bonds: they offer a low interest cost, and they are the simplest and most commonly used debt structure. Disadvantages of G.O. Bonds are largely related to debt limit, since the county can only borrow up to 8 percent of its taxable assessed value unless additional bond issuance / debt capacity is approved by voter referendum. Darlington County’s current G.O. Bond debt limit is about $16.4 million, total. Financing via this method would require a countywide property tax increase.
With the Capital Project Sales Tax (which uses projected tax proceeds to finance G.O. Bonds rather than using assessed value), advantages would include low interest costs, and the security of a dedicated sales tax revenue stream to repay debt service. It would require no property tax increase, and would maintain the county’s current amount of G.O. Debt capacity.
The penny tax/CPST would spread the burden of paying for the courthouse evenly across the county rather than raising millage rates and leaving the tax burden solely on property owners. The CPST would also yield revenues from visitors to the Darlington Raceway and other tourism events.
A CPST would automatically ‘sundown’ or expire after eight years, or once the project is paid for, whichever happens first. Voters would have to approve another eight-year term by public referendum.
Council member Le Flowers (District 5, Swift Creek Area) asked bond attorney Ben Zeigler if the CPST could be used to pay off the county’s existing bond debt sooner, thereby freeing up more G.O. Bond borrowing capacity. Zeigler said that depends on the type of projects those older bonds financed. He said there is an approved list of infrastructure improvement projects for CPST revenues, but he’s never seen that sort of re-direction done before.
Stewart urged council to begin taking the necessary steps to put forth a referendum in time for the November general elections. These steps include forming a CPST commission with citizen representatives (no elected officials) for the county and its municipalities. This commission would formulate the actual question voters will see on their ballots, submit it to County Council for approval, and then the question would be placed on the ballot for the fall election.
Should the county fail to complete these steps in time for the November vote, a CPST or G.O. Bond debt increase referendum could not be presented again until the 2020 general election.
Council member Louis Brown (District 7, Hartsville/Kelleytown) asked whether a location for a new courthouse must be listed on the referendum. Zeigler said that location is not required to be listed but the ballot question should name the type of project, its scope, and perhaps name the number of miles it would be away from specific locations.
Stewart noted that demolishing the 1965-built courthouse would cost around $3.36 million, not including permits and landfill costs.
He presented several options for building a new facility, along with cost estimates to construct and fully furnish each building. A new 33,000 square-foot judicial center would cost $10.75 million, while a new 21,000 square-foot administration and government building would cost about $4.8 million, bringing the total cost for both to $15.58 million. Throw in the demolition, and the total project tab could run $18.9 million.
Further along in the meeting, Brown voiced his opinion that one part of county will be paying disproportionately for the courthouse project, saying that 80 percent of the county’s revenue comes from Hartsville area districts.
Council chair Bobby Hudson (District 4, Lamar) responded that only about 8,000 people live in Hartsville and about 6,000 in Darlington, leaving over 50,000 citizens who live in Lamar, Society Hill, and unincorporated areas of the county. Hudson said that people from all over Darlington County who shop here would be paying the CPST, not just shoppers from one town.
Before the meeting adjourned, Council member David Coker (District 8, Hartsville) asked Stewart to get an estimate on costs to do an engineering study and needs assessment on the current courthouse building, just to be sure renovation is not a viable option.
Stewart said the old building needs not only numerous space and security upgrades, but a sprinkler system and structural improvements to bring it up to current seismic stability requirements. Stewart guessed the two studies Coker referred to would cost at least $40,000, and he agreed to obtain estimates.