By Randy Bell for Island Eye News
While I personally dislike social media, I have recently leapt into the fray by opening an IOP only Facebook account. If you are not a resident, you are not my friend (humor intended). As a prior Vice President of Information Management for Hewlett-Packard, I am all too familiar with personal data usage, hence the disdain. With that marginally relevant opening statement, I have posted to several local social media outlets expressing concern for the current Isle of Palms City Council’s lack of transparency regarding the pending Marina referendum. Following recent publication of what I believe to be misleading and an explicit endorsement of the proposal by Mayor Cronin, I posted the following:
Shame on Mayor Cronin for continuing the public deception regarding the pending Marina Referendum, and shame on the Isle of Palms Magazine for (presumably unintentionally) not fact checking this proposed “taxpayer funded plan” prior to publishing the complicit endorsement of the plan. It is nonsense to think that the IOP Marina lease income will pay off the bonds. Mayor Cronin’s quote: “A small part of the Tourism Fund will be used to pay off the new bonds. In fact, it’s reasonable to think that the lease income will pay off the bonds.”
Excerpted from Isle of Palms Magazine Summer/Fall 2017 edition. The City’s 2018 budget calls for the transfer of $803,890 from Tourism Taxes while receiving Marina lease revenues of $406,738.
Per IOP public records and available on the IOP.net website, myself and other residents have stood before City Council multiple times requesting the full disclosure of “exactly how” the proposed new debt will be paid. The City of Isle of Palms has a current debt limit of $9 million, and should this referendum pass the additional $5.5 million will fall outside the current limit effectively raising it to $14.5 million.
The intent of the prior postings and public comment has been and will continue to be raising public awareness allowing our voting residents an opportunity to understand facts and make an informed decision. Posted: Mayor Cronin, please explain “how” with the terms of lease income dictated until 2045 by a ridiculous IOP Council approved thirty-year, no bid lease, can the lease revenue cover future expense? At the current debt level, revenue does not come close to covering expense. Mayor Cronin, please illustrate this publicly in the next Council meeting so that we can all understand your definition of “small”. I stand by this prior posting comment and ask again if the citizens deserve a fact-based answer?
Under the S.C. Sunshine Laws (Freedom of Information Act) I requested the following:
1. Details of the current Marina lease payments
2. The ratios of resident versus non-resident marina usage and boat launch
3. Marina slip rentals, resident versus non-resident
The response to the above in an email dated Aug. 8 from Linda Lovvern Tucker, City Administrator reads: “The City does not collect data related to the number of boat launches reflecting resident vs. nonresident.
However, this type of information may have been discussed in Real Property Meetings and would be reflected in the minutes, which are available on the City’s website at IOP.net/agendas-minutes. In addition, this type of information may be included in the ATM report which is also available on the City’s website at IOP.net/marina.”
Regarding Marina slip rentals, same answer. Please note that the wait list for Marina slip rentals is approximately at sixty, and with no breakdown of resident versus non-resident information offered.
The Isle of Palms Marina was purchased based on a Special Municipal Election held Dec. 5, 1998 stating (Item 6. From the public documentation) “Benefit to Island residents. First and foremost, public access to the Intracoastal Waterway will be preserved.” Shouldn’t one be able to reasonably expect that the City will provide “usage data” to our residents in advance of a $5.5 million request exceeding the original purchase price of the Marina? Let’s review the current Marina lease information and financials: (from prior post).
This IOP current sitting Council committed our city to a thirty-year lease with Marina Outpost (retail store operations) and Marina Joint Ventures (marina launch and related facilities).
The annual sum totals of all tenant leases contribute $406,738 per the current 2018 budget
Marina Store lease………..$75, 276
Morgan Creek Grill……….$138,940 (not part of 30 yr. lease term)
Marina Waverunner………$22,240 (not part of 30 yr. lease term)
In consideration of anticipated future revenues from the Marina Store and Marina Operations, the only future increase that we as taxpayers can be expected to fund the current Marina and potential additional debt, is IF the operation exceeds Gross Profit goals (immeasurable and not auditable by the city) and to-date, have contributed ZERO dollars to the city above the above stated amounts. Now more troubling facts:
In 2017 the City of IOP transferred to the Marina:
From S.C. Accommodations Tax……… $233,845
From Hospitality Tax…………………….. $34,155
2016 Totals…………………………………. $268,000
Let’s look at the 2018 budget:
From S.C. Accommodations Tax..$232,830
(75% of total Marina debt service)
From Hospitality Tax……………….$155,143
(2/3 of expense for the ATM plan)
From S.C. Accommodations Tax $237,667
(2/3 expense for Marina bulkhead)
From Hospitality Tax……………….$178,250
(1/3 of the cost to replace underground fuel storage)
So, what does this mean? It means for 2018 IOP has a Marina that requires over $1,200,000 to operate while only taking in $406,000 in lease revenue. With or without a referendum, IOP is obligated to maintain the Marina, with redirected funds contrary to what this article would lead one to believe, and we taxpayers are funding it with continued and essential redirection of funds from tourism taxes.
The City’s response to my Freedom Of Information Act request also states: “Certified Financial Statements provided by Marina Joint Ventures and Marina Outpost to the City under the terms of the leases is confidential information pursuant to contractual agreements contained in the leases and will be withheld from disclosure to the extent allowed by South Carolina Freedom of Information Act…” Frankly, I did not expect disclosure, but merely to state that without an IOP lease mandated audit (which is not part of our terms), the financial details of our city owned IOP Marina will never be disclosed. Most troubling with this lack transparency, is the simple fact that if the City were not transferring monies from our Hospitality and Accommodations Tax Fund, these funds would be available to sustain/maintain our beaches. Without our beach, the “house of cards” falls down. In the event of a catastrophic event, which by all accounts would cause the cessation of tourism related revenue, IOP cannot sustain the marina without additional taxes. There exists no currently funded IOP money in the 2018 budget to cover any major or emergency event. There does exist $15,000,000 in speculative monies (currently unfunded and dependent on outside assistance). Previously not stated on social media post, current South Carolina code states:
(ii) Notwithstanding the provisions of subsubitem (i), upon two-thirds affirmative vote of the membership the appropriate local governing body, a county or municipality may carry forward unexpended allocations to the special fund beyond two years provided that the county or municipality commits use of the funds exclusively to the control and repair of waterfront erosion, including beach renourishment. The county or municipality annually shall notify the oversight committee, establish pursuant to Section 6-4-35, of the basic activity of the committed funds, including beginning balance, deposits, expenditures, and ending balance.
The above S.C. code, if I am interpreting correctly, would allow for S.C. Accommodations Taxes and Hospitality Taxes to be placed in an emergency fund to protect our beaches. Instead, IOP City Council has continued to offset Marina expense with these funds while placing the future of our precious beaches at risk.
These facts should trouble any voting citizen. Any effort by Council to not fully discuss and disclose in a transparent manner the financial details of the referendum should be unacceptable to any citizen. Any decisions without understanding the facts should be unacceptable to all.
For the record, I am personally not against a fiscally responsible Marina plan that supports the original intent of the Marina’s purchase, “a marina to allow IOP residents access to the water.” We as citizens should not blame the current tenants for the condition of our leases, as they are simply doing as our IOP Council permits and continuing to operate their businesses. It is incumbent of our Council to ensure that lease tenants comply with all applicable ordinances inclusive of zoning. Unfortunately, this plan perpetuates the de facto benefits established primarily for tenant commercial interest, while offering little but additional future debt to IOP residents.
Please note this is my interpretation of the facts. As always, should I be incorrect in any way I will stand corrected.
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