The City maintains credit ratings of AA, Aa2 for general obligation bonded debt. Under current state statutes, the City’s general obligation debt issuances are subject to a legal limitation base of 8.0% of total assessed value. General obligation debt issued pursuant to referendum is not subject to the limitation. As of June 30, 2010, the amount of new debt, which could be issued without referendum, was $17,856,483.
Other long-term obligations of the City include unreported insurance claims, net OPEB obligation and compensated absences. More detailed information about the City’s long-term liabilities is presented in Note 12 to the financial statements.
Economic Factors and Next Year’s Budgets and Rates
The City’s elected and appointed officials considered many factors when setting the fiscal year 2011 budget, tax rates and fees that will be charged for the business-type activities. Some of those factors are the economy, the population growth rate and inflation rates. The City has suffered the loss of significant amounts of operating revenues over the past few years. This was expected with regards to business license taxes, hospitality fee taxes and accommodations taxes. The City has also seen the erosion of property tax revenue as housing values have fallen. Business license taxes and building permits have been disrupted by the slowing of construction and reduction of insurance revenue.
These indicators were taken into account when adopting the General Fund budget for fiscal year 2011. The millage rate for ad valorem taxes is 66.1 mills. The new rate includes 55.0 mills for the General Fund, 3.5 mills for the Convention Center Fund and 7.6 mills for the Debt Service Fund. The debt service millage will only be billed for properties that are used as primary residences. The credit for operating millage for these properties will be offset by transfers from collections of the 1.0% tourism development fee occurring on August 1, 2010 and thereafter. Amounts available for appropriation in the General Fund budget for fiscal year 2011 are $57,875,515, a decrease of 2.3% from the fiscal year 2010 budget of $59,233,234. In order to accommodate this reduction, the 2011 budget includes a discontinued merit program for fiscal year 2011, reduction of library and base recreation center hours of operation, reduced frequency of landscaping and grounds maintenance services and reduction in overtime and temporary services. There were increases in nonresident library card fees. New strength in the hospitality industry for the remainder of 2010 may be a precursor of moderate new growth in business license taxes, hospitality fee taxes and accommodations taxes. These reductions, increases and the normal rates of savings in departmental budgets during the year should allow the budgetary General Fund balance to remain intact by the close of 2011.
As for the City’s business-type activities, there were increases in solid waste management fees and charges. Standard residential services increased a combined 5.8%, commercial services increased a combined 5.7% and transfer station fees increased 4.5%.
Contacting the City’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City’s Finance Department at Post Office Box 2468, Myrtle Beach, South Carolina 29578 or phone (843) 918-1100.