West Pelzer passes on water deal, plans to borrow money

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By Stan Welch

During a recent meeting, West Pelzer Town Council declined to approve a deal that would lower water rates and made plans to borrow money to get through until tax revenues come in. They also made an important decision on chickens.

In a remarkable action, taken at a meeting called largely to address the issue, Council members failed to approve a proposal to buy future capacity from the Greenville Water Company; a decision that leaves the Town paying more per thousand gallons than they would under the proposal, while leaving them vulnerable to much higher prices in the future.

The proposal died on a two to two vote. Councilman Robert Alexander, who recently announced his intention to resign due to a relocation, was absent.

The vote clearly shocked both West Pelzer Mayor Peggy Paxton and the Greenville Water representatives, who have been crisscrossing the north end of the county in recent months, selling the proposal to various municipalities.

The proposal would require the town to purchase a guaranteed capacity of 150,000 gallons a day. That one time buy in would be at $2.54 per thousand for a total investment of $381,000. The Town currently pays $2.82 per thousand. The length of the contract would be forty years, with two automatic thirty year extensions, unless one party or the other chose to end the agreement.

Greenville Water would finance that purchase at their lower borrowing rate. The Town would repay the money by paying $2.66 per thousand gallons for the ten year term of the loan. That amount factors in the repayment of the loan. At the end of ten years, the cost per thousand gallons would drop to $1.28, plus any incremental increases that might occur during that time.

Councilmen Jimmy Jeanes and Johnny Rogers cast the two opposing votes, but neither had been fully informed about the proposal. Greenville Water first approached the Town last November, when Jeanes and Rogers were running for the Council, but had not been installed.

Councilman Blake Sanders called the vote “unfathomable. I simply can’t understand casting a vote that will leave our water rates where they are now.”

Town Clerk Paula Payton said that she is working to schedule a meeting between Jeanes, Rogers, and Greenville Water representatives, hopefully before next Monday’s Council meeting, so that the two men can be up to speed and prepared to address the issue again.”

In other business, the Council, while making no formal motion, or taking any formal vote, nevertheless decided to proceed with a plan to issue a tax anticipation note (TAN); a device used to manage a governmental body’s cash flow during the course of a year. The town, in this instance, would issue the TAN, borrowing a percentage of its anticipated tax revenue to help it through the customary revenue drought that comes during the middle to latter part of the budget year.

The need for the TAN, a first in the Town’s history, may be due, in part, to the Town’s maintenance of the full time police department.

Another sign of the demands that department makes on the Town’s resources can be seen in a recent declaration by the town that they are willing to extend the department’s services to Pelzer, if a suitable financial arrangement can be worked out.

Mayor Peggy Paxton said, “We have done a lot with the money we have, but our cushion is gone. Sometimes it is a nightmare trying to make payroll. This would help a great deal with those issues. We have the lowest tax rate of any municipality in Anderson County, and sometimes that is a problem.”

Margaret McGee, an attorney for Pope Zeigler, LLC law firm, explained that those low tax rates might have to be addressed in the future. Paxton asked how the Town can avoid making a habit of issuing the TAN each year, and McGee said that the Town’s cash reserves will have to be restored, and that increases in fees and tax rates might have to be implemented in the future to achieve that goal.

Councilman Jimmy Jeanes said that he would like to see some costs cut in addition to the TAN, which McGee stressed does NOT raise taxes currently, but addresses a timing issue in the flow of revenues. “This just buys you some time, but other issues will likely have to be addressed sooner rather than later.”

McGee was instructed to proceed, with the understanding that the Council would revisit the matter during an upcoming budget workshop.

Council also gave first reading approval to an ordinance that would allow the keeping of chickens inside the city limits. Second reading is scheduled for the next regular meeting of the Town Council, which has been moved up to June 2, next Monday.