Serving Barnwell County and it's neighbors since 1852
The new fire station for the Barnwell City Fire Department is nearing completion.
Taxpayers in the City of Barnwell will help fund the completion of the new fire station.
In a split 3-2 vote, Barnwell City Council voted on Feb. 27 to approve a general obligation bond of $1 million to complete the nearly-finished fire station. To repay the bond, the city will implement a property tax increase.
“To finish our fire department, we’ve got to a point now where we have to borrow money,” said Mayor Ron Still.
Funding Sources
Most of the $5.2 million dollar fire station is funded by state and federal money.
The city started with $350,000 from the S.C. Department of Public Safety that was secured by Rep. Lonnie Hosey. Additionally, the city has received $500,000 from the S.C. Department of Labor, Licensing and Regulations, $2 million from Department of Energy settlement funds involving the Savannah River Site, nearly $1.3 million from the federal American Rescue Plan Act, and $75,521.20 in interest. Local donations totaled $881.61.
“If it wasn’t for Lonnie Hosey, we wouldn’t have gotten it done,” said City Administrator Lynn McEwen of how the lawmaker helped secure a lot of the funding.
The balance owed is just over $1 million.
“We used all the money we possibly could exhaust,” said McEwen of trying to find more state or federal funds to complete the project.
With no additional funds available and the project nearing completion, the city council sought a $1 million general obligation bond so they could pay the balance owed. This 7-year bond from First Citizens Bank will be paid back at an interest of 4.37 percent.
Tax Increase
The estimated 13-mill tax increase is estimated to bring in approximately $168,895 a year over the seven-year life of the bond. However, the city won’t know specific numbers until they do their budget process in the summer.
For the average $150,000 owner-occupied house at the 4 percent tax rate, the city currently estimates this will equal an extra $78 annually in property taxes. That’s $546 over the 7-year period.
“This is not something that’s going to stay on the tax years and years later,” said Mayor Still. “It’s not to make money for the city; it’s to finish a project that’s necessary for the city.”
When the fire station was first discussed, it was estimated to cost $4.5 million. However, inflation has caused that price to rise. Even with the original price, McEwen said it was always known the city would have to seek some type of tax increase.
“This should not be a surprise to anybody,” said Kim Vargo, the city’s clerk and treasurer. She said a tax increase was discussed back when the 2016 capital projects sales tax was discussed. That tax helped fund the new police station.
In May 2020, then-Mayor Marcus Rivera and the city council voted to postpone the fire station project due to a lack of funding. They also did not have the borrowing capacity at that time.
“You can only borrow against what you have on the tax rolls. Up to $1.2 million is what we can borrow without a referendum,” said McEwen.
In 2020, the city only had the $350,000 from the state. The $2 million in DOE funds was allocated to another project at that time. Those funds were later reallocated for the fire station and the city eventually secured the other funding.
While the council could have increased taxes in 2020, they stated at the time that they did not want to place that burden on citizens, according to a newspaper article.
However, circumstances changed, and city officials said the tax increase is now necessary and the only option to finish the project.
Council Concerns
Some council members expressed concerns over the tax increase. Some even said they were surprised as they were not previously aware the bond would mean a tax increase.
“I’m all for the fire station, but I’m just a little concerned about increasing taxes,” said Councilwoman Alicia Davis.
Councilwoman Jana Myers, who joined the council in January, supports the fire department, but shares the concerns expressed by Davis. She said she wasn’t part of the meetings late last year where the previous council approved the ordinance to pursue a general obligation bond.
During the meetings last year, Davis said it was never discussed about raising the millage rate.
“That’s what a general obligation bond is,” said McEwen.
While the city didn’t know the specific terms of the bond until bids were received, McEwen said in a follow-up interview that council was aware of having to raise taxes.
“Was the public made aware?” asked Myers.
Mayor Still said he doesn’t recall whether it was said about taxes going up a certain dollar amount, but they aren’t trying to hide anything as things were done in public meetings.
“I don’t think if you take a poll up here that any of us are thrilled about doing it. Unfortunately, we get elected to make easy decisions and hard decisions. I don’t like making this either,” said Mayor Still.
Even so, the mayor believes this is a good investment for taxpayers because they are getting a building that will serve the city for 100 years.
“We are getting a $5 million building for $1 million. It’s going to be a state-of-the-art building; a diamond showpiece for this area. It’s been a long time coming and I think it’s well deserved,” said Mayor Still.
Councilwoman Peggy Kinlaw said she also hates raising taxes, but “I don’t feel like we have a choice. We’ve got to go forward with this; if we stop this and then wait a year, two years, four years, it’s going to cost a lot more.”
Councilman Louis T. Claytor III made a motion to accept the terms of the general obligation bond as submitted by First Citizens Bank, the only bid received. Kinlaw seconded the motion. Davis voted no, Myers abstained, and Councilwoman Wanda Highsmith was absent.
“I think it would be irresponsible of me to vote on something that is such a huge amount and I haven’t been involved with,” said Myers. “I don’t feel comfortable voting on such a big figure when I don’t fully understand the bond process.”
City attorney Tom Boulware said abstaining counts as a no vote.
If circumstances change, the city could end the tax increase before the seven years is up.
Even with the bond, the city will have at least $15,000 in other costs to finish paying. They expect to use savings to pay for that.
