Quantcast

County clears American LaFrance debt

  • Sunday, August 3, 2014

When is a debt not a debt? During the July 28 regular meeting, a divided Berkeley County Council decided the $180,000 on the tax rolls owed to it by American LaFrance would be wiped clean.

But it’s a debt that, depending on how you look at it, might not have been owed to the county in the first place.

American LaFrance closed its doors after 141 years manufacturing firetrucks. Hundreds lost their jobs locally, and the company essentially disappeared — leaving behind an unpaid $650,000 economic development incentive borrowed against the company’s business personal property. The deal, known as a fee-in-lieu-of-tax, is a common tool used to attract companies to counties.

Part of that $650,000 deal was a tax credit, called a special source credit, discounting the taxes owed. For example, if the company owed $100 and it had a tax credit for $25, it would only pay $75.

When the company disappeared and Berkeley County sought to retrieve the $650,000 owed, the county seized the business personal property in February and auctioned it in June. However, wanting to “maximize the potential dollars” owed, the county revoked the special source credit, according to county Finance Director Kace Smith. The amount was $180,969.18 from the credit over two years, 2010 and 2011.

Anything over the amount owed to the county would have been claimable by American LaFrance.

The auction recovered the $650,000 plus expenses like hiring the auctioneer and leasing the building — but not the money from the revoked credit.

“You can get people to argue if the (credit) was ever owed to us at all,” Smith said.

But when council took up a vote to remove the remaining debt from the tax rolls, council members concerned with the action didn’t argue whether or not the credit was owed to the county.

County tax collector Ginger Hamilton made the request to council.

The measure barely made it out of Finance Committee when Councilman Caldwell Pinckney abstained from the vote and the six other councilmembers were tied. Finance Committee Chair Tim Callanan had to break the tie in favor of eliminating the debt.

Councilman Steve Davis was one of the members who voted against the measure.

“Why would we remove it from the tax rolls for American LaFrance when we wouldn’t do it for a private citizen?” Steve Davis asked.

Hamilton responded that these are different than citizen taxes.

“(Citizens) would not be afforded this same opportunity,” she said.

In regular session, the measure again faced a tie vote. Supervisor Dan Davis was needed to break the 4-4 vote, and he voted to eliminate the debt.

Without removing the action, the debt would sit on the books for 10 years, according to Hamilton. And, the county could always add the debt back on the books should American LaFrance open up shop again in the county, she said.

Over the last few months, county employees spent countless manhours working on what all have concluded to be an unprecedented situation in South Carolina: a company that owed years of fees from economic development deals simply vanished. The revocation of the special source credit and later removal from the tax roll was just two of the many actions taken in the uncharted territory.

“Although we were able to capture all of our hard expenditures … what we will never be able to recapture was the pain and suffering for the staff,” Smith said.

The auction earned $1.12 million for the county. Much of the money over what was owed to the county went to the school district, according to county staff.

“We wish American LaFrance was still here, keeping current on their taxes … this is not a good ending. We got the money owed but we would have liked for them to keep paying taxes and to keep people employed,” Smith said.

Comments

Notice about comments:

The Gazette is pleased to offer readers the enhanced ability to comment on stories. We expect our readers to engage in lively, yet civil discourse. We do not edit user submitted statements and we cannot promise that readers will not occasionally find offensive or inaccurate comments posted in the comments area. Responsibility for the statements posted lies with the person submitting the comment, not The Gazette.

If you find a comment that is objectionable, please click "report abuse" and we will review it for possible removal. Please be reminded, however, that in accordance with our Terms of Use and federal law, we are under no obligation to remove any third party comments posted on our website. Read our full terms and conditions.

Upcoming Events
 Latest News
Print Ads
Latest Videos


The Gazette

© 2014 The Gazette an Evening Post Industries company. All Rights Reserved.

Registration on or use of this site constitutes acceptance of our Terms of Service, Privacy Policy and Parental Consent Form.