Eight ideas to get Beaufort County on firmer financial footing

info@islandpacket.comAugust 15, 2013 

In my more than six years on Beaufort County Council, I saw much progress, including:

  • Improved financial measurement systems.

  • Recovery of funds from financial cubbyholes.

  • Improving services while keeping tax rates low.

  • Video access to county meetings

  • Increased user fees at our two airports as a start on self-sufficiency.

  • But we have only gone part-way. Council could make tax dollars go further by considering these ideas:

  • Increase budget transparency. This year, there was great confusion because the council's Finance Committee, county administrator and the council as a whole were each working from different versions of the budget. At the final vote, neither the council nor the public knew what was being voted on.

  • Before any council votes, the budget should be publicized and thoroughly discussed (in enough detail to show program and location allocations), including projections of reserve and debt. The process should start much earlier to permit this. Monthly reports can track implementation.

  • Reaffirm County Council's responsibility for budgets and allocations. County Council has final responsibility for the budget, allocations and changes. The administrator and staff have major input, but once the budget is approved, they must implement the plan or request changes.

  • The county administrator should report any line item change over $25,000 to the council. Any major change (over $50,000) should require council approval. These rules need to be much more clearly defined by council and must include changes made by flowing funds not only between line item allocations, but also into the reserve fund.

  • Use independent economic benefit-cost studies for major projects. Over the years, we have committed millions of taxpayer dollars to projects with little visible cost-benefit analyses or with studies from sources that might economically benefit from a particular outcome, making their impartiality questionable. Taxpayers should insist on independent studies.

  • Fund airport construction and past accounts through bonds, not the general fund: Over the years, our two airports have taken an unbudgeted $1.9 million from the general fund. The county share of construction planned at Hilton Head Island Airport, plus that contemplated in the Lady's Island airport master plan, will increase these draws substantially. Airport financial plans are stale, and do not predict when these IOUs will be repaid, if ever. This reduces our unassigned and cash reserves, takes funds from other projects and helps trigger tax increases. Airport construction and IOUs should be financed by bonds paid off by airport users (or accommodations taxes), not money from the general fund.

  • Set a policy for unassigned and cash reserves. These are funds we stockpile for emergencies (such as hurricanes) and cash we need to pay bills at the low point of our year. At present, these levels seem to be set almost by chance. We use a dubious reserve figure that includes IOUs, which isn't money available for emergencies. We have also resorted to "borrowing" from other funds (e.g., fire district reserves) during low cash periods. The county should formalize a more realistic financial safety net.

  • Don't construct barriers to key data. Council and the public should have timely access to key data, including fund balance, spending plans, motivations and funding sources. It is essential to maintaining budget transparency. Any impediment to information being promptly provided should be viewed as a strong warning signal.

  • Rethink economic development methods. Over the years, a small group has pushed for disbursal of more than $3 million of taxpayer money under a banner of economic development. These projects are driven by the worthy goal of creating jobs, but that goal seems to act like catnip, turning off needed analysis of the benefits, costs, risks, track record and success probabilities. The "Project Robot" venture (with hidden studies, if any) is the newest example. It is time to rigorously rethink our economic development methods to see whether new thinking, better analysis or new people are appropriate.

  • Residents should establish an advisory group. Several have suggested forming an independent nonpartisan group to monitor, analyze and lobby council for more progress. Beaufort County has an extremely versatile group of residents used to rolling up their sleeves. This would be an ideal project for them to pursue.

  • These ideas are not new. Many have been voted down or put on a slow track. Others will face stiff opposition and may die in committee. But they are important steps toward better managing county activities and scarce taxpayer dollars.

    Steven M. Baer recently resigned his Beaufort County Council seat representing District 10 on Hilton Head Island.

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