Residents benefit from city projects

Over the last several months our staff has worked with Paul Anderko to provide information regarding the city’s finances. We were happy to do this since the city has a history of transparency with regard to public dollars. I believe he and others would readily admit we have offered a detailed response to each and every request for information. Unfortunately, Mr. Anderko has presented this information in such a way as to lead the public to conclusions that are both misleading and wrong. I felt it was important to provide you with information to reassure you our city is in excellent financial condition.

Mr. Anderko does get one point correct: the city “is in good financial shape.” Our bond ratings with the national rating agencies are at an all-time high and our tax and utility rates are among the most competitive in the region. I encourage you to see this information for yourself at www.rankingrockhill.com.

It is true we have funded significant improvements in Rock Hill over the last several decades through the use of debt; however, all these improvements have been funded with the utmost financial prudence. I am confident you will agree our mayor and council have managed your money responsibly when we report we constructed two new fire stations, expanded our law center, added 18 new firefighters and hired 29 new police officers over the last nine years without a single property tax increase. The city’s property taxes have not been increased since 2006 (and that 3 mill increase was used solely to pay for five new police officers). In fact, our current tax rate (93.5 mills) is lower today than it was 10 years ago (102 mills).

We take pride in providing quality services, building quality places and fostering a quality community. We often hear comments from citizens, visitors and leadership in other cities concerning Rock Hill’s successes. In fact, recent media coverage has highlighted our competitive advantage over North Carolina in drawing large-scale economic investment and, most importantly, jobs.

Over the last 30 years our community’s business parks have resulted in almost three-quarters of a billion dollars in investments. Yes – that’s billion with a “B.” This investment has resulted in almost 7,000 jobs for our community.

And here is the good news: there is more investment to come. The full development of the Riverwalk Business Park and a new business park currently being planned for our community will result in even greater opportunities for the people of Rock Hill.

The creation of new jobs starts long before the ground-breakings and ribbon-cuttings with something much less exciting – government finance. The city has several self-balancing funds: the general fund (police, fire, trash collection, etc.); the utilities fund (water, sewer and electric); the hospitality tax fund (2 percent restaurant tax); the stormwater fund; and the tax increment fund (TIF). Think of them as separate bank accounts, where legally only certain things can be paid for from each of them. By law, we can’t build a fire station with money earned from the hospitality tax fund, and we can’t buy new police cars with property tax earned from an active TIF district.

Among the different funds, TIF funds are the most complicated to explain but result in significant private investment and jobs. When a TIF district is created, the city, school district and county generally agree to forgo the receipt of new future taxes from a defined district for a specified period of time.

As new roads and sidewalks are built and utilities are improved, the area starts to improve and developers begin to recognize the community investment. Soon, these developers start to invest in the area in the form of office buildings, stores and restaurants. As development comes, their new incremental taxes pay the debt previously issued to build the roads, sidewalks and utility infrastructure.

Without this public investment on the front end, there would likely be no private investment. In the case of successful TIFs (such as the Galleria TIF, the Riverwalk TIF or the Downtown TIF), the school district, city and county ultimately receive more revenue when the district expires than they would have without the public improvements. Additionally, with many of our recent TIF borrowings, the developer is held responsible for making the debt service payments if for some reason there isn’t enough extra tax money to pay for the public work that’s been done.

At Riverwalk specifically, the property owners in that district pay a special assessment, which is used to make the debt payments, and the improvements are available to the community at large. In short, there is little or no risk to local taxpayers.

I’m sure we can all agree it’s in our community’s best interest to increase the number and quality of jobs available in Rock Hill and York County. Corporate leaders regularly point to quality of life as a deciding factor in where to locate their businesses. While we applaud Mr. Anderko’s efforts to be engaged, his figures are largely used out of context. There are faults with almost every accusation Mr. Anderko makes in his letter – but allow me to point out just a few errors:

▪ Mr. Anderko fails to mention that almost all of the city’s current TIF debt is guaranteed by the private entities that benefit from this debt: think of buying a house and having someone else make the payments and legally promise to pay it off on your behalf.

▪ A casual reading of the letter would have you believe the city has wasted significant dollars on the city’s downtown, and there has been no return on any investment the city has made in our downtown. Nothing could be further from the truth. Since the city’s first TIF was created in 1988, the total value of private investment in the downtown area has more than doubled.

▪ The city did not spend $3.2 million on a parking deck for a private entity. This is a public deck, and the deck is available for the public’s use 24 hours a day, seven days a week. This deck is paid for with incremental taxes in the Downtown TIF – not your personal tax dollars.

▪ None of your tax dollars went toward the construction of Fountain Park. Again, new incremental taxes in the Downtown TIF and private donations funded the park for your use and enjoyment.

▪ The city did not provide $1 million for a walkway for any one individual. A walkway is currently planned for the public to use that will connect Main Street to the White and Caldwell Street areas. This walkway will run alongside a new privately funded apartment complex planned for the downtown area with an investment of over $4 million. Again, incremental taxes in the Downtown TIF will fund this walkway for everyone’s use and enjoyment – none of your tax dollars will be used to construct this walkway.

▪ The new water tank to be constructed near Laurelwood Cemetery will replace the current tank with a larger tank to benefit pressures and flows in our entire water system.

▪ The tax increment debt in the Textile Corridor and at Riverwalk are being repaid with new incremental taxes from within those districts. None of your tax dollars are used to pay this debt.

▪ Tax increment districts make good financial sense for all the government entities involved. How much sense? In 2014 the Rock Hill school district collected $2.9 million in new incremental school taxes from the Red River TIF and the county collected $865,182 in new incremental taxes.

▪ It is true that the city has increased a variety of general fund user fees over the last 10 years; however the city has also implemented a number of general fund fee reductions over this same time. The annual impact of our general fund fee increases and decreases are about equal to one another. The city has clearly not used fees to supplement and avoid general fund tax increases.

The city offers detailed financial records on our website, including monthly accounts payable reports, annual budgets and comprehensive annual reports. Our financial dashboard is a user-friendly way to see the actual revenues and expenses versus the budgeted amounts for each of the separate accounts. I encourage all of you to research this information on your own at www.cityofrockhill.com/transparency.

We are not required to provide this information by state or federal law, and we are not compelled to do this through any local ordinance. We make this financial information available simply because it is the right thing to do. We welcome citizen input and would be more than happy to provide clarification for any questions you may have.

We hope, as Mr. Anderko suggests, more citizens will take steps to become informed and engaged in moving Rock Hill forward. Should you have any questions at all, I hope you will contact me personally at dvehaun@cityofrockhill.com.

This story was originally published March 22, 2015 at 8:24 AM with the headline "Residents benefit from city projects."