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Myrtle Beach eyeing higher fees, more cuts

Myrtle Beach's proposed 2010-2011 budget includes increased fees for residents and decreased spending that includes reduced operating hours at recreation centers, among other tough decisions.

"It's a doable budget, but it's thin," said city manager Tom Leath at the end of Thursday afternoon's line-by-line budget discussions. "It's going to continue to strain our resources."

One strain will show at the new boardwalk, where the city does not have the money to pay for extra police and maintenance workers this year. City Council members still are discussing that issue. Adding the two officers and two maintenance workers recommended would mean finding an extra $335,000 in the budget, already the city's tightest in many years.

It's also going to strain residents who are likely to see increases in fees for garbage removal and stormwater management and who are likely to have to pay to park at the Myrtle Beach Convention Center, even as they have fewer open hours at city recreation centers and the Chapin Memorial Library.

But a tax increase is not likely this year.

City Council members agree they want to find a way to provide the extra security and cleanup at the boardwalk.

"We cannot blow it the first year," Mayor John Rhodes said.

"The last thing we need is to open the boardwalk and have people be afraid to go down there, or have them regret going there because it's nasty," Councilwoman Susan Grissom-Means said.

The topic will be much debated in the coming weeks as the budget proposal is massaged before the council has to cast two votes on it in May or June.

Leath and budget director Michael Shelton have proposed a balanced budget of $120.9 million for the 2010-2011 fiscal year, down about 5 percent from the current fiscal year's total budget of $127.5 million.

City Council members struggled with a list of cost-cutting measures recommended by staff in various city departments, including a one-year, 3 percent pay cut for employees.

But Leath's recommendations didn't include pay cuts or mandatory furloughs for the more than 800 people who work for the city. However, the following changes, with which the council so far has agreed, were recommended:

Turning Myrtle's Market into a private enterprise, saving the city $23,000 in advertising and staff costs;

Cutting out the city's Fourth of July fireworks show at BB&T Coastal Field, saving the city $31,000;

Cutting out the merit bonuses for staff, a program created last year to replace raises. This would save $712,000;

Deferring replacement of police vehicles, saving $782,000;

Reducing library and recreation center hours, saving about $100,000.

Implementing a hiring freeze on 13 open positions, saving $632,000;

Cutting back on recreation programs that have been operating at a loss, including summer basketball league, skate clinics, Lacrosse, Aqua Kids swim program and more, saving about $200,000;

Charging everyone $3 to park at the convention center all day, grossing between half a million and $700,000 in revenue a year;

Raising stormwater management rates by 75 cents, to $5 a month, to gain about $225,000 a year;

Increasing residential rates for solid waste pick-up by $1 a month, from $19.50 to $20.50 for the average household, grossing about $110,000.

All together, the recommended cost-saving measures would remove about $5.4 million from the budget.

The retreat is the city's chance to talk about all fiscal matters, and in addition to going through the city manager's budget proposal, the council receives updates on a variety of city projects.

Thursday morning, public works director Bill Oliver told the City Council that the new boardwalk is about $108,000 over budget.

City spokesman Mark Kruea said a concrete strip had to be added along some storefronts near Plyler Park because the thresholds of the businesses were not all level. Work crews also added a street end at Ninth Avenue North, which wasn't in the original plan but "probably should have been," Kruea said.

So far, $4.15 million of the projected $6.6 million cost of the boardwalk has been spent.

Other than the big projects already begun, like the boardwalk and the widening project on 38th Avenue North, there isn't likely to be much big city construction in the coming year. The budget plan calls for a bare minimum of capital improvement - mostly just maintenance.

Another issue that sparked a debate among some City Council members Thursday was how resident property owners would be credited for a portion of their millage the city promised to dismiss.

State law says cities that implement a 1 percent tourism development sales tax to raise money to promote themselves to potential visitors outside the area must, after the first year the tax is in place, save back a portion of the tax revenue to give resident property owners tax relief.

Last year, when the city voted to implement the sales tax, it promised resident property owners they would get a 90 percent credit on the millage they pay to the city.

But because the state's tax year and the city's fiscal year do not match, and the sales tax went into effect Aug. 1, 2009, there's a possibility the first year of the tax credit will be pro-rated.

So far, the city has received two quarterly payments from the state, amounting to the tax collections for five months of 2009, so some City Council members say the city cannot give credit for tax money it has not collected yet. Pro-rating the first year of the tax credit means people would get a 90 percent millage credit for five months, rather than 12 months.

But the proposed budget shows a scenario that assumes the city will give 12 months' worth of tax credit in the first year, leaving almost no money in the budget for tourism-related projects, which is what the rest of the city's saved-back share of the tax revenue must pay for.

At the time the city OK'd the tax and tax credit, there was no public discussion about pro-rating.

By the end of the day, council members had mostly agreed to give the whole year's worth of credit before the money has been collected, meaning the city's general fund will be about $400,000 short once the credit is issued. That money will come back to the city in the end, as it would have gone back to the residents in the end.