Restructuring of County finances laid foundation for Richland Renaissance

Richland County Administrator brings to his hometown the fiscal management expertise that helped transform Greenville County

On Tuesday, Richland County officially will unveil the visionary Richland Renaissance project, a “no millage increase” initiative to transform the delivery of government services and the overall livability of the community.

The idea for Richland Renaissance is rooted in the concerns of residents expressed by County Councilmembers at a planning session in 2016 and feedback from various constituent groups about the need to address space issues at the aging judicial center on Main Street. But moving Richland Renaissance from an idea to reality – without raising property taxes – required sound financial footing.

Thankfully, when Councilmembers directed County Administrator Gerald Seals to find a solution to the courthouse conundrum, he already was making efforts to put the County’s financial house in order.

“Richland Renaissance is an awesome opportunity for the Capital County to put its best face forward and that requires people with the financial wherewithal to understand budgeting, investments, bonding – the whole financial picture,” said County Council Chair Joyce Dickerson. “Richland County is fortunate to have that kind of leadership in Mr. Seals, who just happens to be born and raised in Richland County. Other local governments around the country have turned to him over the years to get their finances on the right track. To have that kind of experience here is wonderful and, quite frankly, is why Richland Renaissance is possible.”

When he joined the County last year, Seals’ first order of business was to evaluate the County’s finances and fiscal management practices. He was disturbed by what he found. For those who knew his background, his shock was understandable.

“Gerald Seals is here because in December 2016, County Council wanted him here after he made so many positive changes while serving on an interim basis for six months,” said former Councilmember Torrey Rush, who was Chair of Richland County Council when Seals was hired. “His background in fiscal matters is outstanding and he clearly showed us that we needed some controls and standards in place.”

Identifying and implementing financial solutions to local government issues has been a hallmark of Seals’ career encompassing more than 30 years in the public sector. He has never recommended a tax increase when presenting a budget or financial solution to fiscal issues for municipalities or counties he has managed or consulted – as he referenced in a television appearance more than 20 years ago.

Seals appeared on C-Span’s Washington Journal with Rep. Luis Gutierrez, D-Ill., as part of the Newspaper Roundtable on March 13, 1996, shortly after the release of Seals’ book, “Taming City Hall: Rightsizing for Results.” Then, as now, he emphasized the need for local government to be responsive to the public and more cost effective.

Without the financial restructuring Seals put in place, pursuing certain projects in Richland County normally would have called for an increase in property tax rates.

“Richland Renaissance is exciting,” said Councilwoman Dalhi Myers. ”Importantly, the Renaissance plan contemplates using unspent bond proceeds and other well-tested financing structures to support the projects. No millage, or tax, increase is anticipated. Finally, we have a forward-looking, comprehensive, Countywide improvement plan. I am eager to begin working with my colleagues on Council and in the business community to realize our ambitious Renaissance goals. Once Renaissance is complete, South Carolina’s Capital County will be the envy of the state, from end-to-end.”

In addition to using unspent bond proceeds, the County anticipates that a combination of land sales, bond anticipation notes and installment purchase revenue bonds will be used as financing sources for Richland Renaissance. Despite comments in recent news accounts, Richland Renaissance will not bankrupt the County – a suggestion that came as a surprise to some given that Seals has advised other local governments with fiscal emergencies, including, Orange County, Calif., when it faced bankruptcy.

“Government doesn’t always have to deal with issues by raising taxes,” Seals told Orange County officials at the time, laying out a plan to help them emerge from the crisis within 12 months.

To get an idea of what a local government with a sound financial structure can do to improve its delivery of services and the overall livability of a community, Richland County residents need look no further than Greenville County. While serving as the Upstate county’s administrator, Seals led the development of several major projects:

• Bon Secours Arena (former BI-LO Center)
• Road improvement program that put the county at an economic competitive advantage by having a superior transportation infrastructure
• Greenville County Courthouse, which was completed on time and under budget
• Main library of the Greenville County Library System
• Acquisition of a soon-to-be abandoned rail line that now serves as the backbone of the internationally recognized tourist attraction Swamp Rabbit Trail

Such undertakings were not being considered when Seals arrived in Richland County in July 2016. But he quickly realized County finances were in trouble because they were being managed by an untrained and inexperienced staff unaccustomed to proper budgeting techniques, bond issuance and arbitrage issues. His concerns were heightened during the effort to move the County from an annual budget to a biennial, or two-year, budget.

During the Biennium Budget I process, the Administration Office discovered that, for years, the County’s budget was prepared and maintained using spreadsheets instead of financial software specifically for budgeting purposes – a woefully inappropriate practice. Measures are now in place to prepare the coming Biennium Budget II with the proper budget software to eliminate errors and present real-time information during Council deliberations.

The County has issued a lot of debt in the past for capital projects and to purchase items that should have been funded from the operating budget. Bonds proceeds totaling $42 million sat in the County’s accounts unspent. Recently, County Council approved an ordinance reallocating those proceeds to several capital projects, including $11.5 million for Richland Renaissance. Those unspent bonds also were costing taxpayers.

Not spending certain bond proceeds in a timely manner and earning interest in excess of the interest rate results in what is known as arbitrage – payment to the Internal Revenue Service and payments to a firm specializing in arbitrage compliance. In FY16, payments totaled $83,886.04; in FY17, payments were $52,727.49. So far in in FY18, payments total $25,700.

It was extremely important for Seals that the County have a capable team that understood the financial situation and to put together a plan to position the County financially to meet the needs of residents and employees.

The County now has a well-qualified financial team led by Finance Director Stacy Hamm, the former Deputy Treasurer, and Budget Director James Hayes, the former Deputy Auditor. The team also includes budget analysts, grant coordinators, a financial advisor and bond counsels.

“The people on this team can analyze trends, develop strategies and implement financial plans to benefit the community and implement projects like Richland Renaissance,” Seals said. “Above all, they have in mind the best interest of Richland County and those we serve.”

A Richland County native who graduated from Eau Claire High School and the University of South Carolina, Seals has worked across the country and gained a reputation as someone who can fix local government. In addition to his current position as the Richland County Administrator, Seals also is a tenured professor at Newberry College and a pastor of a local church.

“It is extremely gratifying to have the opportunity to come home and work with others to offer solutions to improve the community,” Seals said. “Richland Renaissance is first and foremost, the result of Councilmembers being responsive to the needs of citizens, the business community and public employees. But this initiative is also tangible proof that sound financial planning is necessary and vital to improving citizens’ quality of life now and in the future.”