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Will island airport have to repay $2 million to Beaufort County?

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County officials are about to open debate over whether to forgive a debt of more than $2 million the Hilton Head Island Airport piled up over the past 15 years.

The existence of the debt became an issue only about two months ago and took nearly all county and airport officials by surprise.

While Beaufort County has pumped money into the airports on Hilton Head and Lady's islands over the years, airport officials said that money has always been seen as an investment for improvement projects or to help the facilities stay in the black as they endured tough financial years.

No one presumed that money was meant to be paid back, airport officials said.

It's still unclear exactly what the money, paid from the county's general fund to the county-owned airport, was used for. County finance director Tom Henrikson, who this summer first raised the issue, said it accounts for different expenditures on operations and physical improvements "over and above the amounts that have been reimbursed by the airport."

He did not have a breakdown of the expenditures or whether the bulk of them went to operations or physical improvements. But Henrikson said he would provide a breakdown if County Council members asked for it.

That breakdown is key to the discussion, airport and county officials agreed. It may make sense to forgive the debt if it comes from investments in capital projects -- things like the tower construction or runway improvements that help the long-term vitality of the airport, some say. But if the money went to help keep the airport's finances afloat or to cover deficits, that could be a different story.

"What is in that $2 million number is of utmost interest to us," Dave Ames, chairman of the Aviation Advisory Board, said at a board meeting Thursday. "It's a shadowy figure at this point."

The debt does not include the $1.8 million the county used to construct new hangars at the Hilton Head airport. The airport has already started using revenue from the hangars to pay off that amount.

Some council members say they're willing to forgive the debt -- and even provide further subsidies to the airport -- because it is an important economic driver and disaster recovery tool. Another concern is the loss of Delta Air Lines, which announced this month it will stop offering flights on Hilton Head starting in November.

But council members still have questions that must be answered: If the debt came from money the county fronted for improvement projects that were reimbursed by the Federal Aviation Administration, why didn't that money find its way back to the general fund? If the airports just held on to that reimbursement instead of returning it to the county, that could amount to an unapproved expenditure that county officials should have paid more attention to in the past, Councilman Rick Caporale said.

"I have no problem with subsidizing the airport as needed to make sure it's viable and travelers come into a safe and comfortable airport," he said. "I just want it to be understood what we're forgiving."

New financial data released last month show the Hilton Head airport made an average annual profit of $150,000 over the past five years. Councilman Steve Baer said he wants to see more detailed financial statements for the next year to make sure the airports will stay healthy.

"I just don't want to give a blanket forgiveness, and make sure we don't have to do it again and again and again," he said.

Though Henrikson said the debt has been accumulating over the time period the airport has been under county control, the issue only arose this year while the county has been closely examining the two airports' finances, Baer said. Now the county is doing due diligence on all aspects of the financial data, he said.

"If there's good reasons for it, if it's safety related, and it's a one-time thing, I think we would look one way," he said. "If it's continued bad financial judgment, I think we would look another way."

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