MYRTLE BEACH, SC (WBTW) – Election Day is Tuesday, with races across the Pee Dee and Grand Strand. Ahead of elections in Myrtle Beach, a couple of candidates questioned whether the city has too much debt.
Viewers called in to ask News13 to verify the number and where it comes from.
In their candidate profiles to the Sun News, mayoral candidate Ed Carey and city council candidate Ann Dunham claimed the city has a debt of around $220 million.
News13 checked with the city Monday, and that number is correct, but we asked them to explain why and how they handle it.
“It just seems to be a lack of understanding on somebody’s part,” said city spokesperson Mark Kruea, explaining that debt is inevitable and painting it negatively is unfair.
Right now the city owes $220 million for its large projects. “We’ve paid for the Boardwalk and beach renourishment and Grand Park,” Kruea said Monday. “And all those other things you get to enjoy over a number of years.”
The city pays about $12 million a year towards the debt with an additional $7 million in interest on top of that. If you do the math, $7 million in interest on $220 million in debt, Kruea explains: “We’re paying about 3.2% in interest.”
But Kruea clarifies that percentage changes. “Because you’re paying off debt over time, the amount of interest that you pay decreases over time as well.”
Kruea said property tax is only about ten percent of that $7 million; the city uses, for example, hospital fee money, storm water fees, TDF money and accommodation tax money. “We are very creative when it comes to finding the right money for the right project,” Kruea told News13.
In his candidate profile, Ed Carey attributed the “staggering” figure to incumbent John Rhodes, but Kruea said this number has been accumulating for decades. “This debt goes back at least 20 years,” Kruea said.
He compared it to paying off a mortgage. “Nobody saves up all the money at once to buy a house or a car all at once,” Kruea explained. “You make a down payment and pay for it over time.”
Through bond filings, News13 found for the year ending in June 2016 the city’s annual revenue was $178 million.