Rock Hill mayor: City finances outcry ‘misrepresents facts.’ Roddey fights back

The city of Rock Hill’s financial standing is secure, calculated and well-trusted, according to Mayor Doug Echols, who pushed back Friday against allegations by a mayoral candidate that the city was “dead broke.”

In a 1,500-word op-editorial that appears on page 9A of today’s Herald, Echols provided five “factual clarifications” on the city’s financial well-being in a pointed rebuke of York County Council member and Rock Hill mayoral candidate William “Bump” Roddey.

Roddey has repeatedly told supporters and media that the city was “dead broke,” pointing to factors like the city’s debt ($287 million as of July 2017) and its cash on hand, which he said earlier this month is around $264,000. City officials later told The Herald the number was actually $13.6 million.

“There has been some discussion recently about city finances that, simply put, misrepresents the facts,” Echols wrote. “Our citizens have always been interested and engaged in how their city government works and financial stewardship is always a primary focus.”

Roddey is running for mayor this fall against Rock Hill Sports Commission chairman John Gettys and landscape architect Duane Christopher. Echols is retiring from the city’s top spot after 28 years of service, including 20 years as mayor and eight years as a city councilman. The election will be held Oct. 17.

Roddey has tried to make city finances a key factor in the mayoral race, arguing that utility rates are too high for residents and that the city needs to drastically cut spending.

“Rock Hill is dead broke,” Roddey said at a recent Rock Hill Kiwanis Club forum.

Echols, without mentioning the candidate’s name, argued in the op-ed that Roddey’s claims are cherry-picking the data and not including the full financial picture. To read Echols’ op-ed online, go here. Readers can also access the city’s financial report here.

Echols provided “factual clarifications” for five different types of finance-related questions, including utility profits, utility rates, the city’s debt, the city’s cash on hand and the transfer policy.

Utility rates and profits

Roddey has argued that the city is profiting more than $17 million from utilities payments. Echols admits that the “income before contributions and transfers” for electric, water, wastewater and stormwater funds totals about $17.4 million.

But he said that number doesn’t take into account cash-funded projects, principal paid on debt or transfers. He said the city’s utility and stormwater funds total $4.5 million after accounting for those realities, about three percent of the total $147 million revenue.

Echols wrote that all revenues are then fully invested in the system.

Roddey said Friday he doesn’t believe Rock Hill is operating on a 3 percent profit margin. He believes the number is actually 7.7 percent.

Roddey told The Herald he believes Rock Hill is raising utility rates on the city’s poorest while keeping property taxes low, creating a “regressive tax.”

Echols writes that Rock Hill’s utility rates are “very average” compared to 28 other comparable cities, and ranks lowest in York County for water and sewer rates.

City debt

Echols said the city’s debt across all of the different funds as of July 2017 totals $287 million.

About $90 million of that debt will help to expand Rock Hill’s water plant to treat another 12 million gallons per day. Echols argues that the city has debt associated with major projects and assets, but the debt is secured and there is very little risk of the debt not being repaid.

He likened the situation to mortgage debt (with a home serving to secure the loan) compared to credit card debt, which stands at a greater risk of not being repaid.

Roddey did not specifically address the city’s debt when reached for comment Friday.

City’s cash on hand

Echols said Rock Hill is in a “favorable financial position” in regard to cash on hand, which according to Assistant City Manager Steven Gibson stands at more than $13.6 million.

While the Governmental Finance Officers Association recommends a municipality to have two to three months worth of reserve funds, Echols argues that only a lucky few are able to do that.

The city strives to increase savings, he said, but the day-to-day budget offers flexibility to take care of emergencies.

Roddey contends that the city’s cash on hand includes borrowed money, which would be restricted to certain expenditures. He said Rock Hill only has about a day and a half worth of cash on hand.

‘Business as usual’

Echols said the City Council and staff work to strike the right balance of investing in the city’s infrastructure and managing affordability for residents and businesses.

He argued that Rock Hill has grown significantly since the recession a decade ago, with more jobs, businesses and residents. He said tourism has become a “booming industry,” bringing in millions of dollars annually to the local economy.

Roddey has campaigned on a slogan of “No More Business As Usual.”

“To imply business as usual hasn’t served our community well is a disservice to all those who have invested in it, and a misrepresentation of the facts,” Echols wrote. “Rock Hill will continue to be financially strong, grow and flourish.”

“Mayor Echols is trying to protect his legacy and help John Gettys win this election,” said Roddey in a text Friday afternoon to The Herald.

This story was originally published September 15, 2017 at 6:23 PM with the headline "Rock Hill mayor: City finances outcry ‘misrepresents facts.’ Roddey fights back."