Recovery

Hurricane Matthew Clean-up Costs Could Lead to a County Property Tax Increase

Preliminary figures estimate the recovery effort will cost South Carolina county roughly $17.5 million.

by Lucas High, The Island Packet (Hilton Head Island, S.C.) / November 22, 2016

(TNS) - Hurricane Matthew clean-up costs are expected to take a big bite out of Beaufort, S.C., County’s cash reserves and could ultimately lead to a property tax increase.

Preliminary figures estimate the recovery effort will cost the county roughly $17.5 million.

But that number is “very, very estimated” and expected to grow significantly, county chief financial officer Alicia Holland said earlier this week.

Debris removal makes up the majority of the clean-up costs at $10 million.

However, that figure only includes public roads. Once the cost of cleaning up roadways in private and gated communities — which the county has pledged to assist in — is tabulated, that $10 million estimate is likely to double, deputy county administrator Josh Gruber said.

County leaders estimate $3 million will be spent paying public employees for storm-related work and another $3 million will be needed to repair roughly 65 government structures and facilities damaged in the hurricane.

Miscellaneous costs such as additional mosquito control operations and contingency funds are estimated at $1.5 million.

The county has spent more than $100,000 on extra mosquito control chemicals alone, Holland said.

County leaders expect at least 75 percent of the clean-up cost to be eventually be reimbursed by the Federal Emergency Management Agency.

The state could also step in and help with the balance left after the FEMA reimbursement. This happened after last year’s historic flooding in the Midlands.

County administrator Gary Kubic has suggested the County Council make a formal request to Gov. Nikki Haley “that the (county’s) local match be supplemented” with state funds.

But even in the the best case scenario, local leaders expect the county to be left with a sizable tab.

The county has roughly $26.6 million in cash reserves that can be used for storm recovery costs.

“There will be a draw down on the reserve fund — I’m guessing about $10 million or so,” Councilman Jerry Stewart said.

“As we get closer to (developing a new fiscal year budget), we are going to have an issue about what to do in respect to the reserve fund,” he said.

“Are we going to try to bring (the reserves) back up?” he asked rhetorically.

Gruber said it may be possible to issue bonds to replenish the reserves, but that would likely lead to property tax increase to pay down that new debt.

To complicate matters further, if the County Council is especially proactive and moves quickly to replenish reserves, it could “give (the state) maybe an out from having to make hard decisions” about ponying up for the local match required by FEMA, he said.

Regardless, county leaders agree that replenishing the reserve is something that can’t be ignored for long. That cash cushion might be needed sooner rather than later.

“Starting around June next year, we are going to be entering hurricane season again,” Gruber said.

Lucas High: 843-706-8128, @IPBG_Lucas

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