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Port Royal owes about $1.5 million.
And the city of Beaufort owes more than $500,000.
Those are the results of an extensive county audit of "TIF" districts, which allow municipal governments to collect tax dollars that are then used to spur revitalization in blighted areas. The audit results were released Monday.
HOW TIFS WORK:
When the amount of property taxes collected in a TIF district increase because of rises in property values, the extra money is used to pay for local development projects.
That money would normally besplit between the county, a municipality and the school district.
On Hilton Head Island, for example, the town established a base property tax rate for properties in a special tax district created in 1999. The rising property tax revenue from those properties was funneled into public projects, such as the Mathews Drive renovation and the Pope Avenue pathways.
A city, town or the county creates the TIF district and decides what projects are built with the money.
But Beaufort County collects and distributes the dollars.
The audit shows that three TIFs created by Hilton Head, Port Royal and Beaufort were overpaid because of bookkeeping errors. The three collectively owe $3.2 million to the county, school district and to their own general funds, the audit found.
Hilton Head's TIF was overpaid by $1,131,450; Port Royal by $1,501,032; and Beaufort by $573,809, according to a presentation by county financial analyst David Starkey at the Beaufort County Council Finance
Committee meeting Monday.
County administrator Gary Kubic said the county was working with the municipalities to set up payment plans so the sudden debts don't lead to financial difficulties.
But Hilton Head and Port Royal officials said this week they still are at odds with the county over what's owed.
Hilton Head and the county disagree over the technical manner in which a TIF is calculated. The county and the town are awaiting a state attorney general's opinion on the proper calculation method. Kubic said it could take up to two weeks to get
that opinion.
Both sides say it's possible the disagreement could end up in court.
Hilton Head town manager Steve Riley said sticking with the current method of calculating TIFs would mean less for money for island TIF projects.
Port Royal officials still are disputing the county findings.
"We have our accountants and our bond attorneys looking into the issue," said town manager Van Willis. "At this point, we're quibbling with the county over about $300,000."
Beaufort officials said they were largely in agreement with the county's findings.
SCHOOL, FIRE DISTRICTS $8.2M
The Beaufort County School District and Bluffton Fire District owe a total of $8.2 million dollars to the county for development projects related to the New River area in Bluffton, according to a Beaufort County audit of TIF districts.
The New River TIF was formed in 2002 to help finance the University of South Carolina Beaufort and Technical College of the Lowcountry campuses on U.S. 278.
County financial analyst David Starkey said this week that the TIF was shorted the money because tax dollars from 1,500 properties in that district were not diverted to campus projects.
For the school district that means $6.9 million and for the fire district $1.3 million owed, the audit says.
Fire chief Barry Turner said he was upset when he first learned about the bookkeeping errors leading to the sudden debt, but has since accepted that the mistakes happened. He said he plans to work with the county on a payment plan.
School district officials said that under an agreement signed by the county and the Board of Education when the TIF was created, the district agreed to be part of the TIF as long as it didn't cost it money.
School district chief financial officer Phyllis White said the dispute will probably have to be worked out by the school board and the County Council.
