Beaufort Co. approves money for Hilton Head chamber despite concerns over spending

Beaufort County’s finance committee agreed Monday night to give more than $200,000 to two of the county’s designated marketing organizations despite council members’ ongoing concerns about accountability into how the money will be spent and without spelling out any requirements for either group to provide the county with receipts.

Though the county initially denied the requests for funding last month — citing a need for more accountability from the two groups — the committee’s chairman expressed regret Monday night that the Beaufort-Port Royal Convention and Visitors Bureau had been lumped into the decision with the Hilton Head Island-Bluffton Chamber of Commerce, which depends less on the county’s funding.

Councilman Jerry Stewart, who voted in favor of the funding, clarified this decision at the start of the meeting.

“I think I made a mistake as chairperson and asked for the vote ... in the same motion,” he said, noting that he was later told that funding likely would have been approved for the Beaufort-Port Royal group had it been voted on separately.

The committee spent most of the DMO allocation portion of the meeting on grilling the Hilton Head Island-Bluffton Chamber of Commerce

The two groups are tasked with promoting the county as a vacation destination and must apply to the county annually for money. Funding for designated marketing organizations, or DMOs, comes from the county’s accommodations tax revenue, which the county receives from tourist spending.

This year, each group applied for $105,000 and presented their requests at the finance committee’s Aug. 27 meeting. The committee rejected both applications, citing transparency concerns brought on by a recent decision from the South Carolina Supreme Court that exempted the Hilton Head Island-Bluffton Chamber of Commerce from public scrutiny into its DMO spending.

The ruling said that, as a private organization, the chamber is not subject to accountability requests through the state Freedom of Information Act, or FOIA. Under FOIA, anyone can file a request to the government for information.

However, while the public can still request information on DMO spending through the county or town that provides the funding, this information can only be provided when it exists, meaning if Beaufort County does not already have receipts from the chamber, the chamber is not legally obligated to provide those receipts to the public.

The Supreme Court ruling also does not spell out what spending information the chamber is obligated to provide to local governments.

This has been a point of contention for the county, which has an ordinance granting it the right to review how DMO money is being spent.

Since the ruling, the Hilton Head Island-Bluffton Chamber of Commerce has refused to release details of its spending, something that has also ignited fierce debate between the chamber and the Town of Hilton Head Island.

When it came time for the chamber to again present its request to the county Monday night, committee members reiterated their concerns with the chamber’s plan to address the accountability issue.

Ray Deal, the chamber’s controller of finance and administration, acknowledged there could be “a trust issue” and proposed giving the county its spending receipts every six months.

The chamber otherwise presented no plan to make its receipts readily available.

“The Supreme Court recently confirmed our status as a private organization,” Deal told committee members. “We don’t have any interest in overturning that decision.”

County Council Chairman Paul Sommerville, who is not a member of the finance committee but was present for the meeting, said that if the chamber does not meet the county’s requirements for providing information, it may consider different measures, such as nixing its relationship with the chamber altogether.

“I don’t know whether twice a year is going to work for us,” he said.

Councilman Rick Caporale, who voted against the funding, asked what the chamber would do to reach a compromise with the county in light of the Supreme Court decision.

“You have no suggestion for how to comply with what the court thinks?”

Deal again offered to allow the county to inspect its books, hinting at the possibility that the chamber would be open to it happening more than twice a year as he had earlier suggested.

“We’re reasonable people,” he said. “We’ll look at that.”

Although Stewart said he believes these things can be “worked out in the process,” Councilman Steve Fobes, who voted for the funding, was concerned when Deal did not promise to abide by FOIA requests forwarded to the chamber from the county.

“We’ve got to figure out some way to address the gap in requested information,” Fobes said.

Despite the debate over what the chamber is required to provide to the county by law, the committee voted 5-2 to provide DMO funding to the chamber.

Councilman Mike Covert, who is vice chairman of the committee and who voted against the funding, summed up the issue in his final remarks before the vote.

“You won that case, and kudos,” he said to Deal. “And with that comes the consequence that now, it’s our problem to find out where, when and why. When we get that FOIA request — and they’re coming, we all know they’re coming — they have to be answered.”

This story was originally published September 25, 2018 at 5:47 PM.