With a projected $55 million in Hurricane Matthew bills, the town of Hilton Head Island could deplete its reserves and look to taxpayers for help in the future, warns Town Manager Steve Riley.
But both Riley and Mayor David Bennett say they aren’t worried about a cash-flow problem.
Riley told The Island Packet and The Beaufort Gazette this week that recovery costs will likely rise, as some expenses are unknown for now.
Another unknown is when the Federal Emergency Management Agency will reimburse the town for 75 percent, or about $37.2 million, of the recovery costs, Riley said.
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“You will spend several years in some cases trying to get your money back from FEMA,” he said. “We are still negotiating with FEMA for funds over damage from the October (2015) storms.”
A property tax increase is one option the town could explore to cover Hurricane Matthew costs, Riley said.
“Everyone is going to have to have this conversation in the spring,” he said. “A week before the storm we were for lower taxes and less government. That has changed.”
Riley said the town will have to look for ways to repay its reserves or borrowed debt if the state does not cover the town’s costs or FEMA reimbursement is delayed.
Bennett had a more positive outlook when contacted this week by the newspapers.
“We are going to be OK,” he said. “We are in good shape.”
Bennett said the town has the ability to borrow up to $37 million if needed.
“I don’t perceive there will be a cash flow problem,” he said. “We have the ability to manage these costs associated with the disaster.”
Bennett said he is in the process of asking the state to cover the remaining 25 percent of the bills — an estimated $17.8 million.
The town has about $26 million in reserves it can use to cover costs and cash flow needs as it waits for FEMA and possible state funding, according to a document released this week by the town to The Island Packet and The Beaufort Gazette.
The town’s largest estimated recovery cost is $35 million for debris removal and monitoring, the document shows. If FEMA pays $26.25 million, or 75 percent, the town would be left with a tab of $8.75 million.
The next-largest projected cost is $6 million for repair and renourishment of the town’s beaches.
Other estimated costs include $2.75 million for employee time and benefits; $3 million for stormwater management; $3.25 million for “other” costs, including “disaster recovery advertising”; and $5 million for unspecified “contingency” costs, according to the document.