Council chairman warns of serious consequences- including up to 200 layoffs
- if deal can't be worked out with bank.
Charleston County could be forced to lay off up to 200 staff members and cut
services to make up for a $10 million shortfall in its new budget because it
decided not to build the Interstate 526 expansion, Council Chairman Teddie
Pryor said Wednesday.
Police, emergency medical and other vital services will not be axed, but
libraries, drainage-ditch cleaning and mosquito control could suffer, Pryor
said.
The new budget begins July 1, so time is running out for the county to
resolve the situation, he said.
The county received $11.6 million from the State Infrastructure Bank for the
highway project, which it used for design, environmental studies and
right-of-way acquisition.
But council rejected the I-526 project over Johns and James islands last
month, and now the bank wants its money back. The county is considered in
breach of contract, Pryor said.
Unless it can reach a compromise with the bank, the county will lose $10
million in the upcoming budget year in state aid and $1.6 million in the
subsequent fiscal year, he said.
"This is a big hit," Pryor said.
Pryor and six other council members will travel to Columbia today to meet
with bank board members to try to reach a solution that will not require
drastic budget cuts.
"We will go plead our case," he said.
State Rep. Chip Limehouse, R-Charleston, is a member of the bank board and
wrote the legislation that established the bank as a creative way to finance
transportation projects.
Limehouse said he is empathetic to the situation that the county faces, but
the bank contract language governing the situation is crystal clear.
"The county is definitely between a rock and a hard place," he said.
Short of amending the contract between the bank and the county, Limehouse
said he doesn't see what could be done in the meeting to help the county.
"Business is business. If I could help them I would help them," he said.
The bank provides hundreds of millions of dollars for transportation
projects around the state. If the county does not reimburse the money as
required, it could jeopardize the bank's credit rating, he said.
Some members of council have suggested using the $420 million the bank
pledged for I-526 to improve existing roads on the islands. Limehouse said
that wasn't going to happen. He likened it to borrowing $300,000 for a
house, then building a gas station instead, which a bank would not allow.
Limehouse said he is one of six bank board members, and other members from
different parts of the state have said they want a slice of the $420 million
that was going to I-526.
Pryor said the state could decide to complete the I-526 project on its own.
Traffic on James and Johns islands is a public safety issue, particularly
during a hurricane, he said.
More development is coming to the islands whether or not the road is built,
he said, and zoning, not roads, is what controls growth, he said.
As envisioned for decades, the I-526 project would extend the road from its
current ending point in West Ashley at Savannah Highway across Johns and
James islands to the James Island connector.
On April 19, council decided to nix the controversial plan. At public
hearings, those who spoke against the road far outnumbered its supporters,
who in turn countered that there is a "silent majority" in favor of I-526.
Although the Infrastructure Bank pledged $420 million for I-526, the project
has an estimated cost of $489 million. The lack of full funding is among the
county's objections to the plan.
A county attorney had warned council members that the contract with the
state does not allow the county to just quit the project.
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