2018 Budget Brings New Challenges
Solid, sound, safe, scrutinized and slender. In “budgetesque” terms, that’s how we’ll describe it. For fiscal year 2018, our Town determined to have as its focus to, “maintain the core level of service, completion of capital projects already appropriated, and to continue the Hurricane Matthew clean-up efforts” (John Troyer, Director of Finance). How grateful every Islander should be that for decades, continuing into today, Hilton Head Island has been wise enough to financially plan for the unseen. Just the right balance has been struck between covering necessary hurricane recovery costs while simultaneously restoring our reserves and continuing community services, engagement and investment into our future. This longstanding commitment to its citizenry culminates in the delivery of this budget; solid, sound, safe, scrutinized and slender.
Sizing it up, this year’s budget is $20 Million smaller than last year’s. In the four components which comprise our budget, the General Fund remained virtually unchanged from last year, up $700,000, while the Debt Service Fund increased $10.6 Million and the Capital Improvement Plan decreased $32.5 Million. Rounding out the components, Stormwater increased $1 Million.
Questions abound when taxes increase, and rightly so. Your Town Council scrutinized the budget, and so did many of you.
If the General Fund is effectively unchanged, why the 1.18 mils Consumer Price Index increase? Your Town has participated in a stunning effort of cash management since Hurricane Matthew swirled through our Island — and our significant reserves — last October. With an estimate of $70 Million in recovery costs, and reimbursement timing outside of our control, our reserves have also, “weathered the storm” and are not available for cash management purposes in FY 2018. Last year’s budget did not balance, but was within a reasonable level to rely upon reserves for cash management. Not so this year.
Why an increase in Business License Fees? Aren’t some businesses already moving off the Island? Business License Fees have not increased in 20 years, and, even with this increase, they remain well below our closest neighbors and competitors. The hurricane hit us all, and the Town works on behalf of all of us. With the lowest Business License Fees around, the effect on businesses who are not already considering a move should be equitable and minimal.
Likewise, our Fire Rescue services are exemplary, and an increase in Ambulance Services Fees keeps us in line or below comparable jurisdictions.
Wow! a 5 Mil Special Assessment for 5 years? Look around. The recovery has been as good as it could possibly be. The Town’s plans, contracts and reserves were in place when they counted most. Our approximate $70 Million in damages is nearly double that of the entire balance of Beaufort County. Timing for reimbursement from FEMA, the State and the County is uncertain, while ultimately, a gap of about $15 Million is likely. The property tax increase that we have prescribed allows our Town to issue $18 million in bonds to replace the reserves immediately – so that we are again prepared for a storm, should it comes soon — while paying for it over five years. The superb ratings we have from the nation’s three major bond rating agencies – Moody’s (Aaa), Standard & Poor’s (Aa+) and Fitch (AA=) minimize our borrowing costs. Safe.
The production of this year’s budget was no easy task, and congratulations are due to our Town Manager, Steve Riley, our Director of Finance, John Troyer and to each and every department head and member who crunched together what could best be accomplished in the upcoming year. Continued Town services, completion of capital projects already underway, replenishment of required reserves, and the conclusion of hurricane recovery efforts are remarkable achievements for an Island marked a mere nine months ago by extraordinary damages. The numbers are a static representation of dynamic work accomplished by your Town. The shared burden between increased Millage, Business License Fees and charges for Ambulance Services, although not easy or welcome, combine to deliver to us a very sound, solid, safe, scrutinized and slender budget.