New road usage fee proposed for Hilton Head FY 2017 budget

A proposed budget for the Town of Hilton Head Island includes the most capital improvement project spending in years and a possible, new road usage fee to help maintain and pave dirt roads.

In total, the town estimates it will spend about $105.5 million in fiscal year 2017, which begins July 1, up 11.4 percent from actual spending in FY 2016 of about $94.7 million. Council members voted Tuesday evening to discuss the recommendation, prepared by town manager Steve Riley, at their first budget workshop 4 p.m. May 10.

The proposal estimates spending nearly $50 million on capital improvement projects alone in FY 2017, up from $40.7 million this year and $11.4 million in 2015.

The draft also estimates the town’s general fund will require about $38.9 million in FY 2017, down 0.8 percent from this year, despite the addition of a proposed $25 road usage fee that would generate about $730,000 each year to acquire, maintain and pave dirt roads.

There is not currently any money in the town’s budget for that work, identified as a top priority for council, other than grants from the Community Development Block Grant program, through which council hopes to pave five roads by 2020.

The town also hopes to receive $7 million for dirt road paving from a potential 1 percent sales tax hike. The request survived a series of cuts by the Beaufort County Capital Sales Tax Commission and, pending county council approval, will appear on the ballot in November.

Last April, The Island Packet and The Beaufort Gazette reported that the town and county had paved just a third of its 136 dirt roads in the past 20 years. At the time, most council members said they were not willing to levy another fee to pay for paving. Still, Mayor David Bennett said Tuesday evening he thinks there will be at least some support on council for approving the $25 hike.

“The roads need to be paved as soon as possible,” he said.

Debt service and stormwater spending should increase only slightly, and staff do not recommend increasing the millage rates from 22.18.

The large capital improvement budget is tied to four major projects — the beach renourishment beginning in June, the construction of the University of South Carolina-Beaufort campus, updates to the Island Recreation Center and improvements to the Coligny area — as well as several smaller projects.

Riley said the budget will grow as discussions continue.

The proposal does not yet include any new requests for funding, whether for affiliated agencies like the Beaufort County Sheriff’s Office or new initiatives like the proposed creation of a Hilton Head Island Culture and Arts Network.

This story was originally published May 4, 2016 at 9:22 AM with the headline "New road usage fee proposed for Hilton Head FY 2017 budget."