The Town of Hilton Head Island has laid out its preliminary budget for the next two fiscal years, and it’s the lowest operating budget since Hurricane Matthew hit the island in 2017.
Town staff will be planning to spend about $79.1 million in 2020 and $78.6 million in 2021 — down from the $106.4 million it spent in 2017 to recover from the storm.
The budget process began on Tuesday with the first report by town finance director John Troyer, and Town Council will hold two budget workshops on May 14 and May 21.
If you’re wondering, taxes to the town won’t go up a lot next year, Troyer said. The biggest increase taxpayers could see is an adjustment in millage rate that’s tied to home market prices.
In 2020, the increase would be equivalent to $5.32 annually for a home worth $350,000, according to the presentation.
If you’re not a certified public accountant (or even if you are), here are five important things about how the town plans to spend your tax dollars in the next two years and where things have changed from years past:
There are four main funds
The town’s budget is divided into four funds: the general fund, the debt service fund, the capital improvement project fund and the stormwater fund.
- General fund: The operating fund for all town departments. Property taxes, business licenses, franchise and permitting fees, local accommodations taxes, state-shared funds and funds from prior years make up this fund, according to last year’s budget.
- Debt service fund: The accumulation of resources and the payment of government debts.
- CIP fund: The money for acquiring land, constructing and improving public facilities such as roads and pathways, and re-nourishing and managing beaches.
- Stormwater fund: The money for performing routine stormwater system maintenance and drainage pipe cleaning.
There are some big increases
Some spending in the proposal includes large increases from the year before.
Town Manager Steve Riley’s department is getting a 36.6 percent increase in budget this year — from $619,833 last year to $846,440 in 2020.
There’s another increase after 2020 too, to $871,833.
Troyer said the entire $226,607 increase is because of the addition of Charles Cousins as an assistant to the town manager.
That money will be used to fund Cousins’ salary, benefits, travel, conferences, continuing education and project spending. Cousins previously served as the director of community development.
In the CIP fund, the budgeted amount for roadway improvements nearly doubles from last year to $6,824,000.
The biggest expenditure of the town is funding the Hilton Head Fire Rescue department, which has 145 full-time employees and is being allocated $15,499,365 more for the upcoming fiscal year, according to the proposed budget.
That’s about $3.6 million more than last year.
But also some big decreases
What goes up must come down elsewhere, right?
The $3.9 million public safety budget, which includes the town’s partnership with the Beaufort County Sheriff’s Office, will see a 2.1 percent decrease if the budget is approved.
That’s $82,637 less than in 2019, according to Troyer’s presentation.
Human resources, which handles hiring and job performance evaluations, will see a 5.7 percent decrease in 2021 after a temporary increase which funded a compensation study for the town in 2020, according to the proposal.
That’s $39,342 less for the 2021 fiscal year, because the consultant who produced the study will no longer be being paid by the town.
The finance department wants to increase budget reserves
In Tuesday’s report, Troyer introduced a budget proposal that would increase the reserve fund for the town. The reserves are a percentage of the general fund budget, according to his presentation.
Currently, the town puts 25 to 30 percent of the fund in reserves — which means between $10.3 million to $12.3 million.
The proposed increase would mean 35 to 40 percent would be in the reserve fund — between $14.4 million and $16.4 million.
The reason for the proposal is to “help prepare for possible natural disasters and accommodate for the seasonality of revenue,” such as business licenses and property taxes, Troyer said.
You can participate
The upcoming budget workshops on May 14 and May 21 held at Town Hall are open to the public.
Troyer said he doesn’t anticipate many changes to the proposed budget because the town manager tries to “closely align” it with town council priorities.
After that, the budget will be subject to a public hearing on June 4.