UPDATE: Hilton Head uses $350K in taxes to tide over arts center, car show
Update: The Town Council voted for a final time to appropriate the money on Oct. 20. The vote was 5-2 in favor.
All it took to get $200,000 from the Town of Hilton Head Island was a letter from the right person.
The Town Council in early October approved two grants to the Arts Center of Coastal Carolina and Concours d’Elegance, two island organizations deeply scarred by the coronavirus pandemic. In all, town officials awarded $350,000 of taxpayer money to the two nonprofits.
While Concours d’Elegance has canceled its November event, the Arts Center is planning to resume performances later this month. Town Council members said both organizations, integral to the community and tourism, are crucial to keep on the island. Combined, they pump about $24 million into the island’s economy each year.
But the absence of a public process to apply for funding from the town — and the allocation of general fund money, not tourism taxes — gives a glimpse of how the town operates and which organizations it rescues. In the case of the Arts Center, CEO Jeffrey Reeves said he sent a letter to Town Manager Steve Riley asking for money, and the town obliged.
For Concours d’Elegance, Chairman Merry Harlacher said he met with Riley and Ward 2 representative Bill Harkins twice before the issue came before the finance committee last month.
“There was no formal process, but everything was transparent and above board,” he said. “Virtually all of our normal revenues for 2020 have been wiped out. We need money to bring back staff and hit the ground running.”
At least one council member, who eventually voted in favor of the grant, commented on the town’s ability to find money when a majority of council members wants it.
“I’m beginning to wonder if our tax rates aren’t too high that we always have extra cash for consultants and for all of these large requests for money that come across the desk,” Ward 4 representative Tamara Becker said.
While the town has shown no intention to lower taxes, the latest allocations raise questions about how public — and how tightly controlled — the process is for allocating money when island organizations need it, not to mention which organizations have the clout to pick up the phone and ask for it.
Where did this come from?
At its Sept. 15 meeting, the town’s finance committee first heard a budget amendment that would reallocate around $831,000 from the general fund that wasn’t spent last year.
No documentation was attached to the agenda describing the need for the proposed budget amendment, and in his presentation on the one-time grants, town finance director John Troyer didn’t offer details about how the nonprofits were prioritized. He said the two organizations are struggling and “the town wanted to do something for them on their operation.”
Ward 2 representative Bill Harkins increased the grant amount to Concours d’Elegance by $50,000, because he said he and Riley met with Concours chair Merry Harlacher and learned the event was at a breaking point — surviving or failing without extra help.
“Our friends in Savannah are circling over this event, and are well prepared to come in quickly and swoop it away from us,” Harkins said. “I would request that we move that figure to $150,000 if in fact we want to keep the Concours (d’Elegance) here.”
Attached to the Oct. 6 Town Council meeting agenda were pages of emails and budgets from town departments, such as community development and fire rescue, describing their need for budget rollovers. There were no attachments pertaining to requests from the Arts Center or Concours d’Elegance.
The lack of a public process bothered Ward 3 representative David Ames, who voted against the grants.
“We do ourselves a disservice when the public perceives that we have taken shortcuts, and I think that’s what the public is thinking,” he said.
How will the money be used?
The grants from the general fund must be approved again by the town council at its Oct. 20 meeting before they’re issued.
Money from the general fund, as opposed to accommodations tax money, has few limitations on what it can be used for. Harlacher said state limitations on its A-TAX grants render the money useless when it comes to paying staff or administrative costs.
Arts Center CEO Reeves told The Island Packet on Monday that the center plans to use its grant on general operations costs, including preparing its facility with hand sanitizer stations and air filters before it reopens at 50% capacity on Oct. 24. The center has scheduled several big-name shows and continues its virtual programming and special sessions during the pandemic.
“That is just for anything outside the realm of A-TAX,” he said. “We still have to turn on the lights, fix things, and pay janitorial staff.”
He’s talking about the accommodations tax grant that both the Arts Center and Concours d’Elegance receive each year. Those funds are to be used only for tourism-related marketing and promotion. Accommodations taxes are mostly paid by tourists. To get the grants, organizations must submit applications that include tax information, and all applications are judged in public by the accommodations tax advisory committee.
This year, Arts Center of Coastal Carolina received $406,000 in A-TAX dollars and Hilton Head Concours d’Elegance received $282,000 in grant money.
This isn’t the first time the town has attempted to save the Arts Center. Last winter, the town council spearheaded a campaign for a referendum that would have raised $65 million for parks and arts organizations. The Arts Center would have seen $25 million from that effort, but the referendum fizzled just before the pandemic.
As the council prepares to vote on the grants again next week, some members are trying to decide how many special allocations the town should make.
“If everyone was to line up at our door, how would we assess their needs?” Council member Becker said. “I’m bothered by general funds being used in this way.”
But the consequences of letting them fail would impact the island and its economy far beyond this year.
“If the organization folds, that revenue will not come to town, and those visitors will not come to town,” Harlacher said of the Concours d’Elegance’s nearly $12 million economic impact.
This story was originally published October 13, 2020 at 4:45 AM.
