Conventional wisdom could assure you that if a banker says your pennies don’t add up, then they probably don’t add up.
Two citizens – including a longtime banker who most would consider an expert on financial matters – have publicly questioned how sales tax funds for Hampton County’s local options capital projects are being managed and request an independent audit.
Collections for the most recent CPST penny initiative in Hampton County officially ended on May 1. Widely promoted by supporters and county officials when it was designed and presented to voters in 2012, the penny sales tax plan fell well short of its potential targets in several areas.
This loophole has worried and angered many citizens, and prompted questions and allegations from others. On Monday evening, Hampton County Council provided an update on the CPST account.
The second Hampton County CPST, set for eight years and not to exceed $ 12,600,000, was proposed to repay a portion of the county’s existing debt and fund a priority list of capital projects. County officials said the actual amount raised, however, was only $ 11,202,276.79, a difference of $ 1,397,723.21, and several projects were not completed or even started.
“The collections were not sufficient to fund all of the proposed investment projects,” said Chanel Lewis, CFO of HC. “The provision for debt service charges has impacted the county’s ability to complete other capital projects.
“It looks like it cost us $ 8 million to borrow $ 6 million,” Council Chairman Charles “Buddy” Phillips said. “I think we took bad advice from some bond lawyers and got down to it too soon. There is no shortage of money, but we have made some bad decisions. This is how I see it.
Among the packed house to receive this information were coach Randy Vaughn, an avid supporter of recreation, and Charles A Laffitte, Jr., chairman of the board and CEO and CFO of retired Palmetto State Bank in Hampton. .
The two citizens had a different theory.
The banker questions the numbers
A longtime banker from a banking family, Laffitte was the captain of a half-billion-dollar institution that has seven branches in several counties in South Carolina’s Lowcountry. Laffitte was President of Independent Banks of South Carolina and was named Independent Banker of the Year by that organization in 2004.
Laffitte said he spoke to Lewis and analyzed the numbers and claimed there should still be a cent in tax revenue available for the projects.
“Three million dollars should be left in the one percent sales tax budget,” Laffitte said. “There should be better than $ 3.4 million. There is no question in income and expenses, the only question is in accounting.
Laffitte also argued that the county may have used the money in the CPST account for other purposes. In a document he shared with the Council, Laffitte said: “These taxes were collected for the specific use of approved projects and should have been set aside in a restricted account.”
The document included Laffitte’s accounting of the tax program, which reflected a surplus of $ 3,487,557, which he said should still be available for projects.
The banker also said he had analyzed the county’s general fund and recognized that county and state budgets were “the most complicated I’ve ever seen in my life,” it seemed to him that the county potentially used other trust funds. incorrectly. Trust funds represent resources held in trust for the benefit of parties outside of government, which cannot be used to support the county’s own programs.
“It seems to me that we have used this money and returned it. To me, it seems the county uses trust funds in its budget. I might be wrong, but I don’t think I am.
“For me, we have a problem here,” added Laffitte. “In my opinion, we need to get the listeners to sit down with them and get an explanation. “
Laffitte’s comments were concluded with enthusiastic applause from the audience in the council chamber, as well as from city councilor Noah Alexander. However, the Council did not immediately respond to his remarks.
The youth sports leader shares the same concerns
Longtime coach and youth athlete volunteer Randy Vaughn also spoke about the county’s finances and recreation. He said that while he never had a conversation with Laffitte about it, his research and calculations led him to the same conclusions and concerns.
“People deserve to know if your math was so far off at the start that the projects on your list never had a chance to get funded,” Vaughn said. “Or, have Council decisions along the way eroded the restricted fund account to fund other projects not listed in the original CPST document?” To say “We just don’t have the funds” is hollow and does not answer the question. “
Vaughn also presented Council with a list of 11 questions, several of which directly relate to the county’s possible financial management of CPST funds. Among the list of questions presented to the Council were the following:
– Is the Board aware of missing funds or unrecorded expenditure? “
– How much of the CPST money was spent on anything not on the CPST document?
– How much money was transferred from the CPST funds to the General Fund?
– Of the amount transferred from the CPST account to the General Fund, how much was transferred to the CPST account?
– How much money today could be spent on a recreational complex?
Summary of the CPST
The Hampton County One Cent CPST was taxed after the approval of the voters’ referendum on May 1, 2013, for eight years, with a collection ending May 1, 2021. The plan presented to voters included the purchase of a general bond which when combined with the one cent tax would be used to pay off existing debt and eventually fund a priority list of capital projects.
Excluding bond and interest payments, a total of $ 6,107,289.98 was spent on capital projects. Among the projects that were not fully funded were a county recreation complex, the Yemassee Multi-Use Building, improvements to the County Museum, County Animal Shelter, County Administrative Building, and Recreational Facilities at Yemassee. Estill existing, as well as renovations to the Estill Senior Citizen Center.