City of Beaufort expects financial hit from COVID-19. Here’s how you might pay for it
The city of Beaufort expects as much as a $1.3 million hit from coronavirus, and residents could be paying more to help make it up in the coming year.
City administrators are proposing a $23.2 million budget for the next fiscal year, a 1.9% decrease from the current year amid lost fees and tax money during the economic downturn attributed to COVID-19.
The proposal includes a $25 fee for owners of each vehicle registered in the city. An annual stormwater fee would also go up $10, to $145.
And a millage increase —from 75.8 to 78.2, or 3% — could also add to tax bills. A proposed bump in the tax rate would mean property owners pay an extra $24 on a $250,000 home taxed at 4% as a primary residence, or $36 on a second home or rental property taxed at 6%.
Local governments must pass a balanced budget by the end of June. Port Royal, Bluffton, Hilton Head Island and Beaufort County governments are all weighing how to make up anticipated shortfalls.
Making up the difference
Revenue projections are a moving target amid uncertainty over reopening and how quickly businesses recover, city officials say.
“We could be right on budget three months from now, or we could be three months off,” city manager Bill Prokop told City Council in presenting the budget Tuesday. “What we presented is what we see now, but we are monitoring this weekly.”
City officials say their parks and tourism fund — which includes local hospitality and accommodations tax revenue — and state accommodations tax money could drop $900,000 to $1.3 million from the last quarter of the current fiscal year through the first quarter of the next.
Additional property tax revenue is expected to bring in an extra $203,280. The fee on vehicles would raise an estimated $240,525 to spend on streets and sidewalks and the staff and equipment that maintain them.
That additional money serves only to help offset other losses and added expenses in the city’s general fund, finance director Kathy Todd said. An ample reserve is necessary in the event of a major storm as hurricane season is beginning, she said.
The stormwater increase comes after the city raised the fee $30 for the 2019 fiscal year to pay for $5 million borrowed to begin major projects to improve drainage in flood-prone areas. The city needs to raise the fee again because bids on some of the work have come in higher than expected, Todd said.
“Many of them are high-priority projects that council would like to see completed,” Todd said. “We would like to see them completed, too.”
Prokop added that projects such as adding new pumps and flood gates on the Spanish Moss Trail will come with higher maintenance costs.
Cost-cutting
The city doesn’t plan to hire new staff during the next fiscal year. Employees could face unpaid leave or have hours cut to save money instead of cutting jobs that were hard to fill during a tight labor market, Prokop said.
The city is also putting off expenses such as replacing aging fuel tanks at Beaufort Downtown Marina and repairing sinkholes in Henry C. Chambers Waterfront Park.
The effect of COVID-19 on the local economy could take years to recoup, city officials said in unveiling their budget.
The city plans a workshop on May 26 to further discuss its budget. Questions ahead of the meeting can be sent to city clerk Ivette Burgess at iburgess@cityofbeaufort.org.
A public hearing and first vote on the budget are scheduled for June 9, with a final vote to approve the document planned June 23.
