Hilton Head Town Council approves loans to cover hurricane bills

Hilton Head Town Council unanimously approved Tuesday up to $20 million in loans to cover Hurricane Matthew recovery bills that staff says will deplete the town’s funds by May.

A second approval by Town Council will need to occur before the loans can be made. If approved, staff will be able to issue bonds on an as-need basis to cover bills.

“We have potential cash flow concerns later this spring,” council member John McCann said Tuesday. “This puts us in a position to burrow so we can pay our bills.”

Town staff has estimated total recovery costs will be $82.1 million, town manager Steve Riley said. After reimbursement from the Federal Emergency Management Agency, the town will have about $26.7 million in expenses left.

This is over the $25.8 million reserve that Riley said Tuesday is nearly depleted.

Riley said the town also has not received any reimbursements from FEMA at this time.

The town likely will be able to pay back the $20 million without raising taxes, Riley said. He said FEMA reimbursements will eventually pay the loans back completely.

Yet, he said the town will need a solution for the $26.7 million it is left with. He said it is possible a millage will need to occur if the state and county are unable to help with the cost.

Residents could see a 3 to 5 mill increase on property taxes if none of the funds are covered by the county or state, Riley said. He said a 5 mill increase would equal about $20 per $100,000 of property value.

“We are not making any decisions at this point regarding millage increases,” Riley said.

Riley said it is also likely the town will receive some help for the costs, which would lower the millage if needed.

It could be about a year before the town has to look at that option, Riley said.

“I would think in a year we will have a better idea about FEMA reimbursement and county and state aid,” Riley said.

This story was originally published March 7, 2017 at 8:03 PM with the headline "Hilton Head Town Council approves loans to cover hurricane bills."