Town Council - Regular Meeting

Workshop meeting Tuesday, May 19th, 2026. We will be talking about capital improvement projects today and stormwater utility in the fiscal year consolidated budget. So, do I have a motion to adopt the agenda? Second. We got a first and a second. All those in favor, signify by raising your right hand. So moved. 7-0. Mr. Orlando, I'll turn it over to you to take over.

Yes, sir, and as I start chatting, I see Kim and Jacob back there pulling up the presentation in presentation mode, wonderful. Well, Mayor, Council, members of the public here and listening, we're back. We had a workshop last week, Thursday, actually, on all funds with the exception of Capital Improvement Program and the Stormwater Utility Funds. And so today that's precisely what we want to cover with you, that plus the consolidated budget, a full overview of the budget, all funds, all revenues, all expenditures, showing how we roll that up, getting ready for your consideration for second and final reading in early June. I know that there was some follow-up from last workshop, so we are prepared to answer any of those questions, but as we start diving in the presentation, I'll remind us we have this workshop tonight June 9th is the second reading, but also a public hearing. We've had a public hearing and a first reading on May 12th as well. Mary, let me just dive straight in to capital and just keep moving in that regard.

Yeah, I think so. Dive right in. Good. All right.

Well, so we know from prior years, we're used to seeing the capital improvement program. The fund accounts for all restricted, committed, or assigned funds for acquisition or land acquisition, construction, or renovation of major capital facilities. And then ongoing major improvement projects, major equipment or other capital asset acquisitions, right? So the fleet, a land, a piece of land to acquire, a new park, a roadway improvement, those projects are funded through the Capital Improvement Program Fund. Primary sources of revenue, and you'll see this as we dive into it. mostly non-property tax revenues. So you see up here all of those special revenues we talk about, bond proceeds, hospitality taxes, beach preservation fees, SCA tax. tax increment, finance proceeds, road usage fees, that ordinance, while it's in place, that collection is paused, but we have had a fund balance on it, so we've used that over time. Electric franchise fees, road park impact fees, and then capital projects, primarily they're non-recurring in nature. So there is a process, we've been through this together, but I think it's always important to slow down and talk about it. We have a great team. They're at the table with me today, in addition to Mr. Byrd at the table as our finance director, John Carpenter as our assistant finance director. We have Sean Gill, an assistant town manager, and Sean oversees a few different departments. Donda Adam oversees, or Donda Adam is in charge of the Department of Capital Projects. Derek Cokesome, I don't think you need an introduction, but you oversee the Facilities Department, and Jeff Netzinger-Ditto oversees our Department of Engineering, and engineering as we define it is stormwater as well as transportation. So the four gentlemen that you see at the table here are tasked with staying close to me, not getting out in front of you, and building the very best capital project that we can build. So I'm very proud of their efforts. But we work on it throughout the year. And then as we start setting the budget, we start thinking through new funds versus roll forward funds. So what are we under contract with that we're going to finish in a fiscal year, i.e. Mitchellville Road this year? What are we not going to finish this year? IE Taylor Family Park or Patterson Park or some of those projects that are longer than one fiscal year in nature. But so we work on that and then we take the projects and we prioritize them by state law through planning commission. And then we talk to you all about it. you will see a proposed source of funds. So our CIP program, our total funding sources amount to $55.2 million. You can see the laundry list of revenues, the sources of funds that I just mentioned. Sunday liquor permit fees, that's true revenue. Last year, we used some fund balance with that. So it shows that it's a decrease. Traffic and park impact fees, investment income grants, fund balance, that's from the bond. And we talked a little bit about that at first reading. And then I won't itemize each one, but you'll see that beach preservation, hospitality tax, fire truck lease proceeds, some TIF dollars, state ATACs, and really the electric franchise fees, as well as a transfer into CIP from Stormwater, really make up that robust portfolio of funds. is diversified, hospitality tax is and always remains the, I would say the strongest source of revenue. But you see up there on the pie chart, beach preservation fees are prevalent. State aid tax, electric franchise and stormwater, those always and traditionally have made up the majority of our funds. And I say that upfront because those source of funds drive the project, right? Use of funds this year, and we're gonna dive into this, but you can see that in years past, we have programmed the CIP in different portfolios. roadway, park, facilities and equipment, stormwater, fleet, and land acquisitions. And you can see a $53.9 million, a fund balance surplus for future use to balance the budget of 55. But arguably our CIP this year is a $53.9 million capital program. The columns and the programs are self-explanatory. You see an investment in beach at 7.4, pathway 1.4, roadway 9.7. That's up from the projected use, but not much from the amended and original park. facility stormwater at 4.2 it was 7.1 amended and we started off at 6.3 fleet fire rescue vehicles and some soft costs for land acquisitions all right mayor can i ask a question about that previous slide yes ma'am um so uh under other uses the fund balance surplus uh projection for 2026 is uh

over 26 million, 26.6 million about. So, and I see the footnote there. But I'm trying to figure out, is that fund balance from the consolidated fund or is that just from capital? Footnote, here's relate only to certain sources.

The footnotes for 2027, but in 26, we also have the GEO bond. That's adding to that fund balance for the capital fund.

So that balance now, I understand, is about 25. At the end of 27 it'll be about 24 and a half million roughly at the end of 27 okay so so that's what we project will be available at the end of 2026 and we're going to use about 1.2 million plus for capital projects for 27 of that 20 something million.

We're gonna use 2.4 million for capital projects. The 1.2 million and 27 is the liquor permit fees, impact fees and investment income that we're not using. So that's gonna go into fund balance. When we get into the fund balance walk at the end of this, you'll kind of see a capital projects fund balance, maybe $5 million after the geo bond. That's money that's been building up slowly from those fees we haven't used yet.

And when we get into the actual capital projects themselves, we'll see that 2.4 million to be used for FY27.

Yes, yes.

Thank you.

So big picture, we want to show you the $53.9 million Project list, 12.1 is an estimated carry forward from beach, pathway, roadway, park, facility, and stormwater. And then you can see the new funding requests, a $41.785 million new funding request, right, for the FY27. So what we've done is we've added the carry forward to the new funding for that total. Funding sources show what it just simply tried to show across the screen. And then uses of funds, you see the diversification, primarily parks, roads, beaches, facilities, fleets getting smaller and smaller, stormwater is at a point where it's sustainable from there. I would say that the FY26 accomplished, hang on one second, Mark, Ms. Sonner. Nope, sorry.

I just wanted to acknowledge that the number that we're seeing tonight is lower than what we saw at the capital workshop. So the capital workshop, it was $62.6 million. So the capital budget is lower by 7.4 million, and that's coming out of new funding. So I wanted to say thank you for that. I know some of the feedback that I gave was let's put pencil to paper. Let's focus on those items to completion. And if we don't have funding for future projects, let's table those for now so that we can focus on getting what we've committed to completed. So I just wanted to acknowledge that that change was there. Thank you.

Thank you as well. And that's a great point to make. The workshop we had, I heard your feedback. I understood where your directive was and what you're seeing as a capital project stack that that in our opinion as a staff and as a team is an outcome of your collective individual and collective feedback at that workshop. So thank you for that. So our projects, we are excited. I put on here what we're accomplishing because I think the community and Mayor and Council, I think we should all be proud of the fact that we are completing what we said we'd start. I'll admit some of the projects took a little longer, took a little more time to find an appropriate survey, land disturbance permit, a wetland permit, let alone just finding the right pricing and negotiating the right contract with some of our projects. But I feel like we're at the point now where we are delivering what our intent is within schedule and within budget. I would say that I have not been a part of any more capital project team surprises from a cost or a schedule standpoint. I think that our bigger lift was a few folks trying to build too many projects. And again, to the feedback from the workshop, it wasn't just not so much about spending, it's also about capacity and quality compared to that capacity. We completed the beach re-nourishment project and Jeff Netzinger, I will say that you took great leadership in making sure this project was on time, on schedule. We've encountered some hurdles along the way. Thank goodness for our consultant and our teammate, Chris Creed, but also definitely Jeff's leadership and the work you've done. I forget how many does anybody know offhand how many beach renourishment updates it's like update number 40. so we kept the public I wouldn't even plan that we kept the public informed and so We've also completed the Barker Field soccer side, the extension as we call it, but it's the water side of Barker Field with a soccer facility there. In addition to soccer, we improved the bathroom, the landscaping, the parking lot. There were some issues in the parking lot with the pavers caved in. There was a lot of irrigation issues and stormwater runoff issues. So not just soccer, but that's the name of the project. We've completed the old schoolhouse park pickleball facility. I think it's great. It's well used, well received. Mitchellville Road paving and drainage improvements. Is that done done? It's done. We've closed up. Contracts are gone.

Contractor- There's just some minor seating and cleanup still going on out there.

So- Sooner than later, you'll see a press release from Kelly and team announcing that that project is complete and that's been about 15 plus, I don't know how far back it goes, but I've seen some old memos, 15 plus 20 years in the making. We acquired, as you know, the new fire rescue headquarters. We've used some bond proceeds for that. We've made some improvements and are making improvements this fiscal and moving our entire emergency operations center and dispatch center there, which is a major lift out of rented year to year space in fiscal year 27, but the acquisition and initial upgrades were made this fiscal. We've completed not just the acquisition of 4 Officeway, but the construction of it, the upfit. IT is on the second floor, and capital projects and engineering is on the ground floor. So if you're out and about, please stop by and say hello. The building's open. The furniture is in. Folks are there. If you ever want me to bring you, I'll go over there with you as well to say hi to the team. Such a great question. We acquired the remainder of the fire apparatus fleet and the town council has given us direction and wherever Ben Brown is, has taken the lead to acquire more than 15 acres of land just this fiscal year. So a lot of accomplishment. And I think it's sometimes it's just great to slow down and talk about that before we talk about what's next. So some highlights for this year, Islanders Beach Park, Crossings Park, what we're calling phase one, the pickleball courts, the 18 or 19 pickleball courts and building the facility, the facility building. The pump track, which is not just the pump track, but it's the skate park and a general enhancement to what we know as the Bristol Sports Arena, less the rink, that's for a future. Patterson Park, North Point, the access improvements between the North Point on Jarvis Creek multifamily workforce housing site to Gumtree Road. Spanish Wells Road, Squire Pope Road, Folly Field Road, Gumtree Road, vehicle and pedestrian safety improvements. That's new. We haven't always been in the road business the way we are currently improving our intersections, our crosswalks. our signage and whatnot. Mitchellville Freedom Park improvements, Jonesville Barn, fire rescue headquarters I mentioned, and Jarvis Creek Pump Station, pump replacement, and then also two new fire rescue ladder trucks. So those are some highlights for this year. Not to say that if they're not up there, it's not a highlight, but these are what I would call heavy lifts that the community would benefit from knowing about without having to look at all line items. Our projects are diverse across the entire geography of Hilton Head Island. What we've done here is try to show you and the community through a CIP dashboard or capital project dashboard. This is live and lives on our website. What is in the planning? We look at the project in three phases. There's more to it than three phases, but the way we program it once it's live planning, design, which is also permitting, and construction. So with that being said, I tried to put this up here. I can see this. I hope y'all can see it. It's printed out as well. The community can pull it up on their computer and zoom in as needed. But what I'd like to start going through is simply each portfolio of fund. We can see proposed FY27 budget, we can see 27 new funding requests and we can see the roll forward. These three columns are a breakdown of what I explained high level a few slides ago showing FY26 carry forward and FY27 new money. And so Mayor, council, I'll go as fast as you want me to, or as slow as you want me to through here. You've seen this at workshop, you've seen it in your packet. The total beach program for fiscal year 27 is $7.4 million. I don't think that a comparison of current budget year and next budget year, especially for CIP helps understand budget growth or compression. It's a matter of are the priorities that the town council has directed me to provide in the workshop and beyond identified, funded, and if they're not, what are we doing with the funds? Real quick, they're broken down into some maintenance and discretionary, right? So what I think that has helped us in the past is explain to you that there's some deferred maintenance that has gone on. Let me give you one example, the boardwalk at Caligny Beach Park. Over time, we haven't made that improvement. That's maintenance. We're not trying to pretend that that's a new capital project. So Don to Adam, who came from the private sector, high level, AECOM, he asked us, what's the difference, what's the definition between maintenance and discretionary? Great question right out of the gate. Discretionary are those new capital projects where we're revamping a park, such as Islanders, or we're doing something new for the first time. I think it's really important that we start understanding what's new versus what we have to get to, and I have to bring to you a funding solution. So... Beach park maintenance and improvements, beach management and monitoring. I'll just go through the high level ones. This budget of $7.4 million proposed includes finally the Islanders Beach Park improvements. It includes, I will call it a scaled down playground from when we last talked. out of three planned and town council approved pathways, right, the center and the two sides of the pathway, only two pathways. I believe 80 additional parking spaces. It removes the metered from behind the parking attendant roundabout and gate to outside of it. It allows us to maintain the status in compliance with a long time ago grant for beach renourishment that had a requirement of paid for public parking. And it builds the park that you adopted some time ago, and it's going to be live as soon as season ends. And to us, season means September, October timeframe, because we've gotta get onto it before next season starts. So, Ms. Bryson.

Yeah, this one I've always been particularly interested in because I have a lot of constituents who are particularly interested in this. And I'm looking at a conceptual site plan from May of 2023. I think it would be helpful to have an updated drawing or something to show to folks so that I can point out to them this is what is going to happen. And I hear it's going to start, I guess, after Labor Day. There is a group of avid beachwalkers. Their last walk is tomorrow morning. because they knock off for the summer season. So it'd be helpful to be able to communicate with them about the tentative fall schedule because they'll hopefully be back out there walking Monday and Wednesday mornings at 9 a.m. So anyhow, the current data on what we're planning to do would be helpful to know because I can't tell them from May of 2023.

Right, and you can tell them that the project's gonna start in September and it's going to include the two pathways and a scaled down, well, we will send that out to town council in a separate email. I didn't bring that today because I wanna talk budget.

No, that's okay. It just reminds me, every time I see that, I'm going like, people are gonna say, what are they doing, Patsy? And I'm like, some more. So anyhow, thank you.

Would an email suffice?

For me, I think it'd be helpful on our website to be able to have some sort of link to what the plan looks like now. I'm assuming there is another concept plan somewhere. Yes, thank you. That'd be great.

Thank you. Beach Operations Center improvements, that became a big part of the conversation. I have proposed to you a $300,000 grant Design only, you can see no permitting, no construction fund or funds for some planning and design to realize what the long-term intended use of Wild Wing Beach Facility Operations Center becomes. I would ask that we don't get started on that until after the strategic plan this year. I think that because of some opportunity to make it bigger than just what we need from public safety or fire rescue or shore beach, that we talk about the structure of what that is and isn't at the strategic plan workshop. And that I won't spend any of those dollars to get started until after we talk. We also have in here $200,000 for beach wayfinding and signage. We will design, permit, and construct what I would call a new phase, the next generation of welcome and public safety and beach rules signage, including the beach markers, including the shore beach service, red, yellow, green flags, and the whole, the whole 360 degrees of our science. And so we're gonna start with a couple beach parks, Sean G, is that correct? Up to three and implement it and learn from it and over a little bit of time, implement them all along the beach. Parking lot at Pope, which is the old enchiladas. I think we could still net, Derek, remind me, an extra 20 spaces and some stormwater, some parking lot work through there. and then we have some contingency in the budget. And you can see that these items were prioritized by Planning Commission. The Harbortown dredge is a placeholder. It doesn't show a priority and it doesn't show any activity. It's simply a placeholder at this point. And everything else should be really clear. What is design, what is permitting, and what is construction? So, oops. All right, any questions? Keep moving. All right, pathway. Pathway maintenance project, 643,000. Jonesville pathway, again, is some more design. Lagoon pathway, $300,000 for design. And South Forest Beach Drive pathway at Seascape construction, a subtotal of new pathway segments, and then some pathway contingency for a total of $1.4 million. Roadways, and I'm not going to go through every line item. You can see it in here. I'm going to stop at some high level ones. Signal system maintenance is significant. Mast arm replacements are significant. You'll see some construction dollars on those. some enhancements, and you've seen some examples of the enhancement that Derek and his team work on through some landscape, but more importantly, traffic signs, crosswalks, landscaping, some bollard lighting, and some work like that. You've seen it on Beach City, you've seen it on Matthews, you've seen it on some other areas. That's that maintenance line item. Right turn lane at Jonesville and Spanish Wells, we are getting closer to that left-hand turn design and we can start permitting it. And again, we're gonna have a community day out at the Jonesville barn and we'll talk to them about the barn, the intersection, some pathway issues we're having. We wanna put a pathway out there. It's a DOT street. They're requiring certain things, but even without DOT requirement on the AASHTO standard, any width of pathway there is in someone, most of the time, mostly in someone's front yard. And I think we can overcome that in most areas or some, but we can't overcome the sheet flow of stormwater into the rest of their front yard. So it's something we should talk about out loud. So ditto with where we are with the Jonesville intersection. United States Post Office access, we talked about that with budget amendment. You can see that's a roll forward, not new money. And the rest, just tabby walk relocation and the real construction, Folly Field Road safety improvements, $250,000 to implement the raised crosswalks, the the signage that gives you feedback on your speed, some speed humps and some work like that in Folly Field. South Forest Beach Corridor, a couple hundred thousand dollars there to work with the Department of Transportation to start planning for and start really assessing and planning for RRFBs, crosswalks, maybe even, I won't say, some sort of traffic calming from a two lane and a middle turn lane. Some folks call it a road diet, but I don't wanna pretend it's on street parking and stuff. It's a traffic calming exercise with some real intentional crosswalks on North and South Forest Beach Drive. We've already talked to DOT about that proposal in the budget. And then we start seeing the projects we talked about either from TIF funds, or geo bond, right? And so Gumtree corridor improvements, design, permitting, construction, phase one. Phase two includes intersections. Squire Pope Road corridor improvements. And again, this is double-sided mailboxes, RRFB crosswalks, some low-level bollard lightings at the areas where the pedestrians are at, the roundabout landscaping and lighting up at Gumtree, Squire Pope connection. the intersection improvements at Spanish Wells and Squire Pope Road on William Hilton Parkway, and then some enhancements to the Indigo Run Circle. We talked about this at first reading. And then dirt road design and permitting, right? As a reminder, the dirt roads we're looking at right here publicly owned right of ways, their private right of ways on private property. And we are getting further along in the design and permitting so that we have some, I will call it some real feedback for the resident whose property is impacted, the street that's improved and town council for you at some point very soon about an appropriate acquisition strategy.

Quick question, I know that a couple years ago we were seeing some delays in service providers with available time. Are we still seeing that with some of the road work that's being done, you know, the striping and everything else, are we still seeing those same delays that are out there, or are they getting caught up, or are there more vendors?

If you're speaking to our contractor availability. Yes. So the contractor availability is still an issue. It is getting a little better. For instance, with striping, we have now three different contractors we can call on as opposed to one, one and a half. So some things are getting a little better, but in general, it's still a huge challenge for us. Thank you.

Sorry, Mayor. There's somebody else that's out in front of me. while we're looking at the roads, the Gumtree and Squire Pope, Spanish Wells, I totaled those, and I'm only mentioning this because we're gonna come to the sources of funds later. Wonderful, thank you for the great chart showing where the money's coming from. But as I understand it, those, what number, make sure I'm on the same numbers, 28 through 32, I totaled those. 2,355,000, and then if I track that with where's the money coming from, that's about 2.4 million from the GO bond issue. Did I track that correctly? Just wanted to make sure. And those are somewhat related to our draft corridor plan, but they're not, we're not funding the draft corridor plan. They're related to those areas, but it's not part of that funding. I see a nod, thank you. Just wanted to make sure I was following.

Mr. Alford. Yeah, I was just trying to track the question. Yes and no. Those funds are from GEO, but we're not funding the entire corridor. We're only funding a portion of it based upon the several hundred thousand dollars that add up in there. And some up there is TIF and some up there is GEO. We have a spreadsheet showing you that.

Yeah, which is great. Great, thank you very much. I just wondered about the relationship between our draft corridor plan and these expenditures and they're related, but they're not a part of that draft court. We looked at how much it was gonna cost for different projects in the draft quarter plan. And so this is not starting to fund those, or is it? I guess it's my question.

I'll say it is. These costs up here, as you can see, and I think that's a great question, what you see up here is Gumtree Road corridor improvements one. And forgive me, we didn't have the room for the project scope on here. What's important for us today is, and that project scope is in the packet, it's in first reading, it's online, but I wanna be clear where we're showing design permitting construction, and you can see item 28 and item 30, right? That is Gumtree Road Corridor Improvement One and Squire Pope Road Corridor Improvements. That's for the whole street. That is trying to double side mailbox for safety. That's the Ballers. So some of that work is TIF money, Dave, remind me, John. And then Ms. Bryson and the rest of council for clarity, you can see Gumtree Road corridor improvement two. We can see up here Squire Pope, William Hilton Parkway intersection, Spanish Wells, William Holm Parkway intersection. $700,000 right there starts the design on the intersection as town council will consider it at an upcoming workshop or decision time for the corridor. And so I think it's an important message to say to everyone involved, residents, commercial businesses, and DOT that we have pledged in the budget at a minimum million plus using geo revenue from debt millage and some of those proceeds to fund the design of the intersections. By the time we spend this, by the time we contract this, I think we're going to know a lot more as well about the sales tax referendum. And if that passes, there's some funds in there. So I think that's gonna be my job connected with Dave, connected with the team, connected with you all to not spend our dollars if we don't need to, but it's in here and we're ready, willing, and able to start designing at a minimum, let's call it the continuous T at Squire Pope, if that's what you approve, the double left turn at Spanish Wells, if that's what you approve, or even bigger or different, I should say, if that's what you approve at that workshop. But I don't want this to sound like this isn't completely 100% connected to the corridor master plan that we've been working on.

But it's directly connected to addressing the issues that the residents and commuters are facing through these areas. Yes, sir.

That's great. That's what I was hoping for. And then I was thinking, well, maybe it's not. So now I appreciate the clarity. I'm glad that we are putting some funding towards doing those things. Thank you.

Mayor, if I may.

I think it's important.

Thank you for the explanation, Mark. I know that we are not doing anything with regard to any dollars spent that could not be built upon in continuation of of the final destination of getting these projects done. So there's no monies being wasted, there's nothing. Thank you for the answer.

Mr. Alford, do you have anything to add? Microphone. Microphone. Your microphone. Oh, I couldn't.

Okay, thank you.

Ms. Brown?

Doing rough math in my head. So the total roadway program, 9.7 million. The total CIP is around 55 million. a little shy of 20% of our efforts are around roads, okay? And when we were in Columbia at the Municipal Association, I think the message was pretty clear that there's a new attitude from SCDOT to sort of balance their burden, which is to start to push responsibilities down to counties and municipalities. I heard it loud and clear. I don't think that it could have been any clear of a message. So while I'm satisfied with where we are today, because I understand that we have to build to get to a point of permitting and construction. But I think we need to be very transparent with the community that that the days of pushing down funds is not as much of a thing as it once was, okay? I think there's signs of that as well with the passing of the municipalities, particularly Beaufort County, ability to raise their own sales tax monies, okay? So I think we need to, over the next course of short time, sort of get comfortable with that number growing along with our capital improvement piece growing and understand the capabilities that we have to take care of it because when I look at these, none of them are here accidentally. Accidents are the main cause of some of them being up there and we have to be, and to me that's a good thing because it allows us to be creative. our direction in the final product okay it's not just a simple sed dot coming in and bulldozing and closing down a curb cut or intersection but instead you know we're sort of customizing this so that it's safe and it also provides opportunity for our community so i'm encouraged by this and just you know one person speaking i'm comfortable with the direction and that's getting a little bit more heavy-handed in this starter

Yes, I'll just add on to that. I'm encouraged as well. What I like about this is that we're taking control. We're not waiting for a Beaufort County referendum. We're not waiting to put the TIF together. We're getting started now. And I appreciate that we're using some TIF money. I appreciate that we're using some geo bonds. I will admit I was not comfortable having geo bonds go to capital projects, but I think roads, they are so critically important. I think this is a good way to spend that money along with land purchases as well. So I love the fact that we're moving forward ourselves so quickly to say here, we've designed our corridor plan. We've submitted items for the TAC, but you know what? We're gonna go ahead and move forward ourselves. So thank you for that.

Mayor. Ms. Baker.

Thank you.

I think that it's an opportunity to bring up a beginning of a discussion and hopefully one that will come back to us all pretty quickly to discuss the 866 bill that was just passed, which allows us as a municipality to have our own referendum, to be able to raise the money with a penny tax that would specifically go to the needs of Hilton Head Island. Because I'm not comfortable with the idea that we're using CIP money. I wasn't from the beginning and that hasn't changed. And I'm also not comfortable with the idea to set forth so that it's in people's minds that we're gonna continue to take on projects and expenses where we can find other revenues. And I think 866 is one of the opportunities that we have And we need to begin that discussion sooner rather than later, given the November, the November 3rd election and where that referendum would be placed. So Mayor, I'm gonna ask you if you can put together something so we can begin that discussion and how we're going to approach it.

I will let you know that the conversations have already started with the town manager and staff to understand the ins and the outs of that. of that bill, that ordinance, that law. So that'll be coming forward.

Perfect, thank you. I think it's a great opportunity for Hilton Head to take hold of our projects. And as Councilman Tonner mentioned, these are our projects and we should manage them, but the dollars need to be looked for in other places, not assumed to be coming from our geo bonds or from some other sources internally. There's external monies that we should be going after.

Mr. Orlando. I'm prepared. I'm prepared to go over that bill right now if you'd like me to. I give a lot of credit. I asked Angie yesterday to work with whomever and put a exact summary of it together because I understand what y'all are saying and I'm glad that I'm presenting a budget to you that we're out in front a little bit. I think it is important to just simply talk through a couple of these high level and I'll take two minutes on the bill. What we have proposed is, you're correct, using the rest of our TIF dollars, our current tax increment finance district dollars on some residual road projects that we haven't always spent like that in the past. And so, a significant lift on Gumtree, right? Safe routes to school, Squire Pope, not just the intersection, but including the intersection. So I would call this major infrastructure investment, as well as streetscape, traffic calm, pedestrian safe enhancements. The work that we're doing, where did I see it? The Folly Field Road. It took us about a year to work with DOT on a road that is theirs, not ours. Backing up from that, it took us about the same amount of time to work on Dillon to Beach City Road. So one thing that we are bringing forward and adding value to are our new road sections. Most of the roads we're enhancing aren't ours, right? So Dillon to Beach City is a good example, but that I think was 10 years in the making. We reduced traffic, we put crosswalks, we put landscaping, landscaping as a calming, but also as a deterrent. new crosswalks, all in. And it's already in disrepair, some pieces of it, and we're getting in there and we're fixing it. So that was last year. We're happy to show as well as some work, and Ms. Becker and I worked on this a lot, but also Teresa with DOT, the details that the residents need on the folly field safety improvements. It's the DOT improvement. So as we get into all this, I'm trying to wrap my mind around the future, right? Building a little bit here and a little bit there doesn't solve it. I was surprised but elated to see that Act 866 come forward. I'll just give a high level summary, take a minute at most, because I think it relates to everything that's on this screen, particularly roads, because we don't have a great road source of funds. We have a great beach source of funds. We have great A tax source, great H tax source, but all of that doesn't add up to road money. So the act allows municipalities, and I don't believe the governor signed it yet. If it did, I'm surprised, I don't know, but this is what everybody is talking about because this could change the trajectory of some of our capital projects, not all of them. It would allow the qualified municipalities to impose a 1% local sales tax and use to provide property tax relief for owner occupied homes. So that's important, 4%, owner occupied. a minimum of 20% revenue. So that's the law, right? That would require that whatever we raise, 20% of that would have to reduce property tax for owner-occupied homes. A minimum, not a maximum, a minimum of 20% of the revenue collected, not 20% of your tax bill. That's very important. Then the rest of it would fund core government services and capital projects such as roads, drainage, police fire facilities, emergency response buildings, and other infrastructure. It's up to 1%. It must be enacted by municipal ordinance and approved by voters. On paper it's reading, in the next general election via a referendum. So it would have to be on the ballot, but it can't be this November, it would have to be after in a general election, so that means 2028. May be imposed in two-year increments for up to eight years. There's some caveat or up to seven years for reimposed taxes. The required use, like I said, a reduction of municipal property tax credit, right? So not millage, but credit for owner occupied infrastructure, including debt service on bonds that we could borrow anticipated. And we must specify project priorities at time of the referendum. So it can't just be, well, we'll raise this and we'll figure out. We have to say these several roads. Ballot question must list each project, I just said that, and the amount and the duration. If bonds are included, the balance must state the principal amount being authorized. So if you're gonna borrow, if we're gonna borrow, wanna borrow up to, we have to state that on the ballot. Just some basics. Department of Revenue collects. State treasurer deposits the revenue into dedicated funds and distributes it to the municipalities quarterly. Pretty simple, that's how it works. It says up to 1% of revenues may be withheld, but then it also says Department of Revenue anticipates no significant expenditure impact and the state treasurer expects modest and they'll absorb them. So kind of good, I don't know how the 1% factors. The tax may not be imposed or reimposed if doing so would cause total state and local sales tax rates in any part of the municipality to exceed 9%. We've got to play with, understand that ceiling. And then the act takes effect by the governor. So it's the same process of a referendum. If Beaufort County, however, passes the... referendum in November, the way I'm reading this right now, we wouldn't qualify because there's already that sales tax on there. So let me digest that a little bit. I'm just getting this, getting ready for today. We will come to finance committee at a certain point, appropriate time to talk through this, probably once the governor signs it and I compare some notes with Beaufort County and the rest of my colleagues. But it's not a heavy lift, it's just a long one, right? So I would say, We would have to determine the rate, it's up to 1%. We would have to determine the duration up to eight years. We would determine how the proceeds will be utilized, a minimum to property tax credit for 4% and the remaining funds for infrastructure. It could be a different number instead of that 20, but that's minimum. we would bring you in an ordinance, an ordinance, I should say, and then develop the ballot question and then place it on the ballot. And we have some time and I'm glad we're getting this now, but a lot of good work to talk about. So, and a special thank you to Angie for making this seem so simple right now.

Thank you, Mark, for that. Yeah, as I read it, it is the... It's the election after this general election that it would take effect. And the reason it's important for us to begin the conversation now is because we do have the pending county referendum and we need to be thinking what's in our best interests for the town as far as the county is concerned. So I still think that the emphasis on sooner rather than later so that we are in place and know what our position will be is important.

Yeah, I wanna touch on one thing real quick. Mr. Brown stated that the available funding coming down from the state will probably start to diminish. But I also say from the federal side as well, and potentially the county side. So looking at all of our opportunities for revenue sources is gonna become more important. as we go through and start to look at these different projects that we're trying to implement. And of course, the roadways are so important to the safety and well-being of our community. It is great that we're addressing that.

And it's not limited just to roadways. It's everything that we can use. And we've been talking an awful lot about.

I was talking about. No, no, no.

I'm just adding to that. I'm just adding to that the importance of this for the town of Hilton Hood. with everything that we've been discussing, public safety, et cetera, many things.

Mr. Alford.

Is the ability to impose the sales tax tied to transfer of ownership of county roads to the town?

From what I read, it's not. I sure would, just my opinion, I sure would like to own the asset that we're investing in and make the decision on functionality and formality of it, but I don't read that in the state law that that's a requirement of investment. I'd have to figure that out. Great question.

Thank you, Mr. Orlando, and as you bring this to F&A so that we all can get smart on it, I just ask that we're not shy about the the component of borrowing to take advantage of referendum. I mean, it's a timing issue. I mean, as they say, we'll pay us every quarter, but who knows when that's going to happen and how quickly the funds are going to be raised. So if you're, if you're, if you're implementation minded, then bonding is definitely the tool that you need to get your projects accomplished during the timeframe. So I know that we had a very good discussion around that with beach I just want to get out in front of that. Okay. So there's not a surprise. I mean, that's, that's the way that you do this business. And I think we just need to make sure everybody understands that.

Thank you.

All right. All right. Let's keep going.

And just for, I wouldn't say time's sake, but you can see parks, we have been talking about parks for some time. So most of the check marks on this page are on the construction column. And so park maintenance, public art, we've increased it, not by much, it's not a major lift, but Natalie said that this year they have some plans that would cost $52,000. the Island Rec Center, the Capital Improvement Ask, right, the $770,000 rec center building, pool, court, equipment, athletic equipment and event equipment as part of that. Then what we talked about, final permitting and construction for Pickleball, The Bristol Sports Arena, for this, we mean skate park and pump track and then a general cleanup of the parking lot and some of that work. Patterson Park, we had on a committee agenda, will soon be on a town council agenda. The final lift that we have from an administrative and permitting standpoint with the wetland, I believe, do we have our encroachment permit yet? Yeah, four heads or three and a half heads are shaking. So we have our encroachment permit. So that's a great step in a great direction. Taylor, you can see that the majority of the funds are being spent in 26 with only a little bit rolling forward. That means the project is by the end of the fiscal will be mostly built, I don't know what percentage that looks like. And then some contingency dollars, those contingency dollars help us when we have some contract costs, but then some unknowns as we move through that. Facility improvements, this is less,

Mr. Brown, that was a quick question. Yeah, well, just more of a statement. I'm getting old, so I'm gonna say this out loud now while a lot of people are taking notes, so, because I know I'm not gonna remember. You know, typically with the parks and renovation, that sort of thing, we do ribbon cuttings and whatnot, and that's all great. But my mind, when I look at the line number 47, and it just goes back, that skate park piece, those kids came and motivated us. I don't wanna miss an opportunity to highlight that when we finish construction, okay? So I think it's more than just us cutting the ribbon. It needs to be something where we draw the youth out and celebrate this investment in them. So I just wanted to put that out there.

and competition. Thank you. And that reminds me of a good point. In addition, does the community day that we'll have out at Jonesville to go over the RFQ and the RFP and the operating agreement on the barn and the, in that business model. We'll talk about some improvements to the barn, the fence, and the parking lots so the community's not surprised by it. In the same light, we are going to, through Sean Gillen and our team, Kelly and team as well, we will have a Crossings Park, Bristol Sports Arena, skate park, pump track day to have input. And so I think that's, we don't have a date yet. Sean, to put you on the spot-ish, We're looking into July, but we don't have a way to nail the date yet. Yeah. So it would have to be early morning or afternoon, but we'll have that community day to invite all the folks out there that gave us input today. But when it opens it, it will be so special. We will have no choice to make it a special day. Facilities, we can see some building maintenance. Mr. Orlando missed on her hand. I'm sorry. That's okay. I didn't see your hand. I apologize.

No worries. You're rolling right along.

I told you I'm going to go fast. If you slow me down, I'll stop.

I just want to say that I'm happy to see a lot of... items here on construction. And so it shows that we're getting those items done that we committed to our residents. And I'm also glad to see that we're taking a pause. We're focusing on this and that our focus may be changing in the future to more pathways, roadways, stormwater as we move forward. So I just wanted to acknowledge that.

Thank you. Okay, all right. we won't go through this the the larger item here is fire rescue medical equipment that's been a long time plan security camera and connectivity that includes the um my words the the infrared the nighttime camera ability at caligny beach parking lot at caligny beach park and some of that some of that uh camera and technology installation and you can just see it equipment software i'll say it all over this sorry sir um this includes facility maintenance and improvements 200 000 it equipment 633 the the larger line item here is fire and medical systems equipment as well as security camera and connectivity. The security camera, the larger amount of that includes technology and cameras at Coligny, at the beach park and the parking lot, the walkway and the beach itself for public safety through technology and investment. Ms. Becker.

Thank you. I just wanted to highlight that this is This has come about through a public safety assessment that was done a number of months ago, and I wanted to thank our Sheriff's Department for participating at such a high level in that assessment and providing us with their recommendations for this program. It couldn't be done without them, and I think they provided an awful lot of really good information for us, and I think that the area will be far safer. We may have some ways yet to go, that this is a huge improvement

Just a quick question. There's no check marks on design, permitting or construction.

Is that just because it's not needed? We didn't have an install column. I don't know. I questioned the same thing when we were doing this, but it's simply install. And Ms. Becker, thank you for reminding me to say that. It is important that I give a lot of credibility to Sheriff Tanner, but also to the team that assessed it, including Bob, because they did a full assessment of, of the area. This is not a guesstimate. This is a sheriff's office provided security assessment. They've given us some real recommendation on landscaping cutback, some view corridors, technology, cameras included, and presence, and I remind them As much as the cameras are down there, I remind everybody that presence matters. And I think that late night and after that peak hour, the technology will help. And Bob is very aware of what at least my priority is on the beach, and that is presence. So I think this is a good first step.

I agree. And I wanted to specifically go back and mention Bob. Yes, he was a big part of that. And I appreciated all of the participation. It was important.

The next is the Coastal Discovery Museum, a reminder that is a town property, the Coastal Discovery Museum through an affiliated or long-term agreement manages the property and the asset. And these investments are not just through Rex, not just Rex bringing this to the table. This has been a capital project team, Derek especially included, walking the site and assessing the site from a just a full assessment of our asset from a storm water, building systems, right, mechanical, electrical, plumbing, air, HVAC, everything, but to make some investments in the discovery house, the hack house, the pavilion, a little bit in the pavilion, the restroom building, horse barn, some miscellaneous improvements, event space, and the facilities assessment. What we don't have anything updated on is a true, I would call it an ALTA survey almost, but an as-built survey of everything that's out there. Property lines, assets, we have not inventoried out there for a long time and I think it's overdue. And so we put those dollars in here for a total of 742,000. You see some more dollars invested in the barn, the Mitchellville Freedom Park as a facility. We went back and forth, is that a park enhancement or a facility? But because it's an agency agreement, we put it in here. I was asked, what does that invest in? That invests in the parking lot from an ADA accessibility standpoint. as well as just an investment in town property. I'd call it the horizontal investment. It doesn't include pathways. I believe they've raised their own dollars for some pathways. It doesn't include signage other than some parking lot signage. And so I think that Mitchellville Freedom Park investment in that parking lot only adds value to everything that we're seeing out there right now. including some ADA parking spaces and some better town programmed property. Refuse recycling. Fire Rescue Headquarters, that was that planned expenditure that we talked about at time of acquisition for the dispatch and EOC. Gullah Geechee Cultural Heritage Center renovations, those are dollars for the Memory Matters building upfit, some design, and then some contingency. I don't wanna move forward too fast, but can I move? May I? All right, stormwater. For some time, we've continued to keep stormwater funds on the table. I would say that our 4.2, is that what that says? 4.2, thank you, million dollar proposed budget includes new and roll forward, but a sustainable design permit construction. You can see how many projects there are. Some of our bigger lifts are the, stormwater maintenance improvements, the non-PUD agreements, the PUD agreements, and then as we start looking for it, pump replacement at Jarvis and some larger number of projects, some in design, some in permitting, some in construction, some in construction mode.

Questions or comments from anybody? Support? Spryson?

Yeah, see it's number 86, Shell Mid and Cordillo Parkway drainage improvements. Definitely we've seen the photos, folks have been out there, definitely serious problems. And I understand a lot of those were caused by the contractor, the developer. And so my question is, in addition to the town putting up money, is the developer, the contractor putting up money for that project?

There has not been any angle that we've had to put anything on the developer there. It was... it was all permitted and installed according to the permit. It's more related to maybe some strengthening of the LMO that could help us out in the future.

Okay. Well, I would just add, having watched that project come together from the very beginning, What you see now with regard to those road improvements, et cetera, there, I believe those were done by the developer as pushback and required by the town. It may not have been the perfect solution altogether, but they did do some improvements. It was horrible before the water ran across the road and sank into the neighboring homes, backyards, and having gone out there during storms and needed to wear and still had the water coming up to the edge of them, which is my knee. So what they did put into place was helpful, but this should solve the problems out there, correct?

Thank you. So this is just the survey is done, we're working with the consultant to get a contract underway to do the design. There will be some easements that are required. And this project also addresses the severe pathway flooding and roadway flooding we had on Cordilla during that rainfall last summer. So it's a big project, and when it goes under construction, we're gonna have a much improved southern end of Cordilla Parkway, and the pathway system will be resilient and drainable as well.

So I'm having a hard time seeing between the three different slides, so my eyes keep adjusting to different things. How much is in this category?

4.2.

Is that enough money? Or is that a...

It's as much as we're able to spend this year with the team we have based upon design and permitting time. When we're ready for project, we will come back and either talk about more use of fund balance or potential even an assessment of the strength of revenue compared to some new debt to build the projects faster.

Okay, those folks have been through an awful lot out there for a number of years, so I'm glad to see it moving forward. Thanks.

Yeah, I think this is good because it goes back to the conversations that we've had about not just fixing but addressing the issues before they become issues so that the maintenance aspects, the continual side, they keep things flowing. Pun intended. Keep on, Mark. I missed the pun. Keep things flowing.

I was sidebarring with Dave. Keep things flowing. All right. Oh. All right. All right. Rose up. Jacob or Kim, advance the slide from where you're at, please.

Okay. Okay.

Oh.

Sorry.

Thank you. Fleet ladder truck replacement. We've talked about that in the past. Battalion one replacement, some vehicle replacement and some contingency for a total of 4.9 and then soft costs in the land acquisition for a $53.9 million CIP program proposal. There was no better way to show this. This has been provided to you in your materials as you prepped for the budget. I want to put this in the presentation. It is, I'll admit, hard to see on the screen because we've tried to fit so much, but this... if I look back to a couple of questions Ms. Bryson asked earlier, some good questions about source of funds, use of funds, TIF versus GO, this should show, this not should, will show everything. So what we do is we go right back through, well, not everything is itemized at that level, you can start seeing that the budget proposed, the $53.9 million budget proposed is made up of beach preservation, H, TIF, road, state, A-tax, some stormwater funding, and it's very clear and very, I would say, transparent on the use of those dollars. People have always asked, how come you didn't put more money in X project, stormwater as an example? Only certain funds can be used for it, a tax. And you can see up there our choice and our selection to fund the CIP program from current revenue, right? I'd call it this current fiscal year revenue, including some geo debt funds, as well as about $19 million of fund balance. And so this is more for reference for right now. Forgive me for it being that small up there. But that gets us through capital improvement projects, and now we're going to dive into stormwater utility. Now, the stormwater utility fund, as a reminder, it transfers out of the strength of revenues that we have, it transfers $4.2 million into the CIP. But that's not all the... That's not all the revenue with stormwater. So this fund is to account for and report the costs for the management, construction, maintenance, protections, control, and regulations of of our stormwater system. And the primary source of revenue, as you will see, is the stormwater utility fee. So year over year, we can look at actuals of 24, 25, original 26. It's the same as amended 26 when we amended the budget in 26 for different reasons that did not change. And so what we're, because we planned for the debt, right? And we used fund balance. But what you'll see right now is a proposed budget of $5.6 million of projected revenues, plan review fees, which have remained over time. but we're only planning for a lower number. Investment income as well as use of fund balance for a $7.583 million amount. When we use fund balance for stormwater, I'd say the proposal is structurally balanced. We're not proposing to use fund balance to offset recurring costs. They're for one-time costs. and in this case, for some resilience plan and a stormwater master plan and some transfer for project. We've been through this in years past, our rate, right, administrative fee, $24, and then a total of $150 of the rate. It's the highest, right, I like to say that, only because I think it's important that we say it's high, but pound for pound, we, through these agreements and through our investment, do so much, and I don't wanna compare ourselves, but I think we should be proud of how much work gets done for stormwater, especially through and with these agreements for those PUD and non-PUD partners. It surpasses, I think, anybody in the region utilizing the stormwater utility fees. You can see the breakdown. We have adjusted and in my mind with Dave, we are getting ready to talk to you about using stormwater utility fees for more project specific than operating. So we've compressed some operating this year. You see that the reduction of salary and benefits, we didn't reduce people, we moved someone. We moved someone to the facility department so that they can implement the facility work. but we didn't take with it the stormwater revenue. It freed up capacity of 124,000. But you can see operating monitoring, inventory and modeling, those two numbers right here, that is for the resilience plan to finish it up and the stormwater master plan to finish. Routine maintenance, contingency, pump station maintenance, interest, and then transfers out to general fund for people and street sweeping, as well as transfer out what we just talked about, storm, I should say CIP stormwater, 4.2 million, 407.5, planned expenditure balanced with revenues. You see the majority of the dollars are CIP related. And I won't go through all these. We've seen this at first reading. But I can slow down and talk through them if you want. I'm going to move through it. We've been through how many ponds we maintain, pump stations, people transfers, CIP transfers, and really the robust program we have, which includes water quality, inventory and modeling, routine maintenance, pump station maintenance, real water quality monitoring, tides, weather, the quality of the water, and then the corrective maintenance agreements on the public, I will call up the public system that we are tasked with, as well as those private systems through the agreements, through POAs, and that just doesn't mean behind the gates, that means POAs. It's really important that we know that the primary responsibility of our stormwater program, the way we look at it, in addition to all that, has to be through that state mandated MS4 permit.

Thank you. I'm gonna say the same thing I always say. I realize that stormwater island-wide, we all benefit from and it's an important aspect of what the town does. Great team working on that and I know that there's lots of progress being made. Where it falls short and it's no fault of the town, though it is something that I keep saying over and over again, when you go to corrective maintenance or any of these others, you have the public system that's listed as a bullet point. And unfortunately for us, a lot of the public system isn't owned by Hilton Head or under its corrective care and maintenance. It is within the county. And so again, we really do need to look at owning the roads, owning the easements where the stormwater is, so that when there's an issue, the town can be, can come out and take care of those things, so that we're all getting the same sort of service, that the high quality service, I should say, that the town offers. Because those who don't have that, their communities fall short. And so, I know there's progress being made. I know that there's a conversation and some correspondence, and I think we would need to really push forward that conversation with regard to the roads and the easements so we can all benefit across the board.

Thanks. Ms. Donner.

I just had a question. One of the slides mentioned the completion of the stormwater master plan.

And I was wondering,

Do we have a target date on that? I'm very interested to, it'll be very interesting to see what that tells us. And then that'll set us up for conversations in the future about how we fund what we discover we need.

so so there's two things that are kind of tangled up here a little bit together because they're related is the resilience plan which we're going to be finishing up in fiscal 27 phase one of the stormwater master plan we started in february working with a consultant and the results of that will wind up in november of this year and then we'll amend that to finalize the contract informed by what we learned during phase one of the master plan

so it's a little bit out there but we're really excited to get it done to help us inform the future what we need financially with a prioritized list of projects and infrastructure improvements and so for clarity i would say we're going to receive a good v1 of the resilience plan by year end prior to as well as phase one of the stormwater master plan by by the same amount of time. We will bring those findings through committee and update town council along the way. Those are intended to drive our budget and they're intended to drive policy, right? So we'll bring those to you, not get too far out.

Well, we've come a long way in this regard. So it's good. Yeah, thank you.

Just a follow up question for another second. So with regard to the stormwater master plan, Does that include all the roadways and all the systems across the entire island, or just those pieces that are owned by the town?

The stormwater measure plan is looking at the whole island, all these public roads and the private systems with which we have the drainage agreements are all part of the MS4. So it's the whole stormwater system. It's all interrelated. You know, it's the old thing about shared watersheds. Can you turn on your speaker? I can't hear you.

Pull it forward to you. Pull that closer to you.

The watersheds don't have boundaries based on ownership of the roads. So we're looking holistically at the entire islands with this plan.

I appreciate that. And I guess the next question, just for clarification, this master plan is something that the town of Hilton Head has been working on, correct? Yes. Thank you.

Yes. Okay.

Will that stormwater master plan be looking at the Mid-Island track? I see a head nod, excellent. I was at a community meeting with Port Royal. They have a committee that I meet with from time to time to talk about town business. And they are very concerned about the stormwater needs of Mid-Island Track and what that might mean to their community. It's been something that has been talked about since the original master plan of the Mid-Island Park. They're feeling that it's been seven, eight years, that there's been a lot of conversation and not momentum. So I did say I would bring that up at tonight's meeting because it is a concern.

Thank you. And Jeff, specifically, right? The way I look at the stormwater master plan, we're looking at the system and where those lines of stormwater flow connect in that system, right? the most common sense approach, and we've had a lot of talk about this, a lot of conversation, take a look at all the outfalls and back up from there. Where are there outfalls on the island and back up and start understanding where the natural systems are, where the private properties are, including the road right of way. I will say to Ms. Becker's point, at some point, Mayor Perry, I need to know from town council very clear on what you want me to do. I've had conversations and shared correspondence with county administrator on acquiring the roads, but with the roads come the ditches, and with the roads and the ditches come a cost of not just maintenance, but an upfront cost to bring them to a standard. Right now, our stormwater fund runs out of revenue quick without even with the assets we have. So it is something great to talk about. We just talked about TIF, we talked about bonding stormwater, we talked about a new state law that may be in place for us to use. I think that the funding gets resolved once we know what the goal and the strategy becomes.

So let me ask you this, do we need to have the stormwater master plan assessment in place before that happens, before we can do that?

It's going to help at least from my perspective a lot to explain and justify what we should do first, third and 30th. From that perspective, it has to prioritize outfalls, it has to connect the system, and it's not going to be parking lot specific, it's going to be public system specific.

But that's the point is, you know, public systems, public service, whether it be roads, whether it be water flow, but having the proper information in hand so that we can adjust and have that conversation as a council to see how we move that forward.

May I just add, it would be certainly my assumption and my push that any roads that we would take over, any accumulated dollars that have yet to be spent that have been collected by the county would come with those, and even more importantly, that they would give us the roads in good shape. So that's a negotiation, I understand, but it's a high expectation, and actually, I hate to use the word, but something close to a demand.

Keep on rolling. Thank you. No pun intended.

We just talked about this. There's a town system, town right-of-way, town easements, town property, right? That's the system we maintain. Then there's the PUD, the POA agreements. There's 27 active, two applicants and 26, 30 more talking with Jeff. Is that true? Potential candidates, Jeff? What's that mean?

The 30 more is all the ones we've looked on the island that could qualify, were they to ask?

Okay, if they were asked, that's a great response, thank you. And then what's not included, so we put this slide in here on purpose at this time, what's not included, state roads, state property, county roads, county easements, private property. And so what I hear Ms. Becker asking me about is the state and the county system as we're improving private property, right? If we look at Mitchellville Road, Mitchellville was a private street or it wasn't a public street, but we didn't just build the road and pave it. We put some stormwater in, but that's gotta connect to the larger system. And so the stormwater master plan will help us start getting into the priority of this. The fund reserve policy we talked about, it was established at 5 million. The FY27 recommendation is to simply calibrate it to cover approximately one year of operating and add a restriction for net fixed assets based on prior capital purchases, less the debt. So that's reflected in the fund balance policy we talked about in the first reading and at the last workshop. and then we'll adjust that every year as we talk with you. And then upon all the expenditures, the stormwater utility fund balance after the reserve is projected to be, and I will say in here only, capital O-N-L-Y, $1.1 million after our planned expenditure this year. Hence, when we start talking about this, we've got to pull the dollars from somewhere else, or we have to talk about rate, or we have to talk about TIF, or we have to talk about obviously some other revenue streams. With that, I'm gonna turn the consolidated over to finance director CFO, Dave Byrd.

Thank you, Mark. As we discussed last week, This year, we're including all funds in our consolidated view for the town. And the primary purpose of that is for us to understand the net impact of both capital and operating expenses to our fund balance. And we'll get into that in a minute. But we've updated this page from last week to include the 2026 original budget. That was a request that was made last week. And when you look at how we budgeted in the past, you have your historicals that we discussed before for 24 and 25 for operating and other financing sources of revenue. The way we budgeted in the past, whoa, sorry. The way we budgeted in the past was primarily the operating revenue for the six major funds. and any financing that would have been a part of that as well, but not the special revenue funds. And so it kind of gave us a number here of 66 million. On the expense side, we budgeted the entire CIP last year, or the budget for this year was just under 78 million. And we had 90 million of operating expense. Now this 90 million does not include the 8 million give or take that we have in special revenue for DMO and the ATEX grants, okay? So that kind of showed a change in fund balance that we discussed last week of, I did it again, of $101 million, which did not happen. And when you go down to the transfers that we talked about last week, You know, the transfers in, what we did before is basically budgeted the transfers in to support the projects that we needed to fund for CIP and other capital or other operating items. but we didn't really model the entire town transfer out. And so that kind of gave a false picture and we were out of balance by $80 million. So as we talked about last week, adjusting how we do this in the future to do a balance of the transfers. But if you kind of restated the original budget of 26, which is at the very bottom here, it's 258 million. That's really, if we would have budgeted 26, like we're budgeting now, excuse me, it would have been 258 million versus our budget this year of 233 million. So that was done to try to show apples to apples, if you will, what that would have looked like to help kind of explain the change from year over year. And basically in this regard, we are coming down, which is what we did say before, but we are coming down in expense on a year over year perspective. So that ad was made from last week.

And I wanna add one thing as well, Dave, before you go to the next slide, I wanna add something. some value or flavor to this. As we really start looking at the 26 original and the 27, What I look at, that what we look at is the operating expense and the capital expense. Part of the operating expense includes debt, right? Includes some of that. But if you look at 26, 167.8, and you look at proposed 27, 145, that's our full expense, correct? Right, and so as you... as we budgeted prior to dave we would simply transfer in and out only the needed revenues to match and balance the expenditures now we're budgeting all inclusive and so i would say on the on the on the back end our fund balance would grow this time we are projecting our fund balance and transferring all in and transferring all out, hence the different. But I wanna point out to the community and the town council, an operating and capital expenditure of 145.4. Oh, Ms. Baker.

I wanted to thank Mark, Dave, the team for that clarification. It was certainly important for me and I appreciated the meeting to go over that. And I think it's important for the community, Mark, as you just said, to understand comparing apples to apples. If we were to look at last year's budget and this year's budget, there's actually a decrease So we have reduced our budget. It's the new application of how you're doing the transfers ins and outs that's making it look different. But thank you for taking the time with me. Thank you for going backwards and doing that comparison because I think it's significant for everyone to know that Overall, the town is spending less money. Our budgets are going down, and we're providing more services and at a higher, more excellent rate than we ever have before. So thank you to everyone for that, and thank you, Mark and Dave, for the explanation.

Ms. Tunner?

Yes, and I just wanna make the point that if you take a look at the difference, it's $25 million. That's substantial, it's almost 10%. So I just think that's an important highlight for people to understand.

Thank you. And I just wanna thank you for adding this document in here because it does give that comparison 26 to 27. And of course, next year when we come back, 26, 27, 28, it just makes it a little bit clearer as well. Thank you. and Kelly's in the room, did you capture that?

Because we will issue a second and final reading, not after tonight, but after a second and final reading, some added value and some clarity to the press release. I'm proud of this, I hope you are. We are as a team. The growth in the 24 fund balance increased $18.3 million. That was projected but not captured in a budget. Last, well, FY25, the fund balance grew $23.8 million in the fund balance reserve, anticipated plan, right, projected, but not so much budget in that regard. And while we're reducing this year, the dollars here are for those capital projects we spoke about. And frankly, it came from a year and a half ago's actual fund balance increase. So we're using the dollars. I've always said, and I think it's my responsibility to remind us, we are in the business to use the revenues properly, right? To grow our fund balance according to policy, to take care of the maintenance and some of the back, the backward deferred maintenance to build new projects and improving the roads. And so I'm elated that we've grown the fund balance, we've paid off debt, we've used the millage and have it in the debt millage. And at the same time, we have a budget that has for the most part remained flat from an operating. with the exception of the six folks that we added mid-year last year, and with the exception of simply growing our general fund by performance-based and class and comp-based increases, but very little else. If we as a team know what we need to do, we have to say no to something to do something different as these one-timers. So there's a disciplined approach to how this team prepares the budget.

Awesome. That's a big deal. And I just wanted to say thank you again for the time and for the hard work that I know comes through to Mark, but you all are part of, and we appreciate you doing that.

Okay, these slides. busy slides when we went through these last week in various forms or fashion, but we've got the operating revenues, we've added the column here versus the projection of 27 versus 26 projections. So you can kind of get a level set of what is the revenue change year over year from what's actually happening before we add that to the amended budget, which was showing a higher percentage growth. I'm gonna keep going as an effort of time through this and kind of get to, here we go. The fund balance, excuse me, the fund balance reserve policies document that we reviewed last week, we tried to clarify. So if you look at the columns here, we have the projected fund balance at the end of this year. That's the first column, the current reserve policy, which is the 91 370. And then we added a column. for the projected fund balance at the end of this year, which is the third column here. And then the proposed minimum, which is what we discussed last week, mainly the changes for the general fund, stormwater, beach preservation and natural disaster funds. And then last we have, what do we think our projected fund balance reserve will be at the end of 2027? And we do have increases that we're projecting mainly in stormwater because we have the net fixed asset reserve, which is higher than the minimum. We do have the capital improvement program fund for economic development opportunities, which is higher than the minimum. We do also have, I think that's probably, I think that's it. So from a perspective there, we're capturing those changes. So we do have now 135 million as our projected reserve to the $234 million fund balance. So that's about 58%. And as a reference point, the percent to our current fund balance projection at the end of 26, which is our current reserve policy, it's at 36%. It's not showing here because it's a big page, but we are going from 36 to 58% of our reserve fund balance. Okay, so why are we doing all of this? Well, this is why I say we do this. We need to understand what's going on with our checking accounts that we talked about, which is our fund balances. And this will become more and more important as we go down the road and look at how we're going to fund CIP projects and what we can afford to fund. So we've got our general fund here. So we talked about here 60.7 million. We have 32, excuse me, 32 million reserves. So we have 28 million left over there. So well over, you know, well over 50% of that is reserved. Our debt service, when we did our project back in December, when we came up with our GO bond and how we were gonna use our fund balance, our target was to get around two and a half million as a minimum fund balance with everything that's come through. we're looking at just at 2.7 million. So that is working as planned. Stormwater we talked about as well. We're at 11.2 million prior to any reserves, but after the 3 million and the net fixed assets, You know, we're down to 1 million. So that's really kind of something that we've got to keep our eye on based upon future needs. And that fixed asset number, we book about, what, 900 grand a year in depreciation expense. So that will come down a little bit every year that we book depreciation. But as we buy more capital, we're going to restrict that depending on what we do. Our capital, we talked about that a little bit ago, but it's almost 36 million. After the economic development reserve, we've got about 31.7. And the GO bond is around 24 and a half million dollars. So there is about five and a half million dollars of, unrestricted capital fund dollars that could be used in the future for CIP projects. We talked about that's about $3 million that we do have remaining after the 27 budget. And then workforce housing, it's $893,000. Special revenue funds, which is why we look at this. Yeah, we have, you know, 120 million fund balance up here for special revenues, a lot of restrict reserves here for various items, which I'll go to on the next slide. So we peel back the onion a little bit. These are all the funds that make up our special revenues, but we need to do our transfers out. and budget our transfers out so we can see what are we doing to our fund balance in these special revenue funds. These are the operating revenues that we've talked about before. And these are also our expenses that we have within these revenues. But then also more importantly for right now, it's our transfers out. We look at H tax. you know, we're taking in 12 million, almost 12 million in revenue, but we're using 28 million. So we're dipping into that fund balance, $17 million in 2027. After our restriction there, we're taking that down at $932,000. So as we look forward in funding for future CIP, a lot of it's just going to be that revenue that we take in. So it's just going to be, you keep going down this a little bit, our state A-taxes,

I want to make a point that when we're dipping into that a tax, it's for one, it's for one time use and it's capital project. We've used no fund balance in this regard to balance our budget other than capital.

So we talked about our real estate transfer fees. We're not using a lot of it right now. So it's $25 million that we're gonna have by the end of next year. As noted, we don't budget land purchases. So that grows, we can see about 5 million a year. So it's a pretty healthy growth that we do have every year available that we can utilize. Palmetto electric fees, we're taking it down. So we're about a million dollars. We're using 2.6 million of fund balance. There I go again. Oh, wrong way. And then our short term rental we talked about before that's being transferred to the general fund. And then our disaster fund to utilize any income streams to continue to raise that fund balance, which most of that revenue is being driven by our investment income on that fund balance that we get. So this is why we are really needing to peel back this onion to look and see how are we gonna have funds available As we talked about last week, we have about 25 to 30 million of, I'll call it cashflow from operations or operating revenue, less are operating expenses that could be used for capital dollars. But some of those dollars are gonna be restricted for like beach or for real estate transfer, which is land. So we really kind of shows us what would be available for other CIP items unrestricted that we would have funds available. So that's why we are doing it in this format so we can kind of make sure we're watching it going down the road. So that's why we're doing this.

Ms. Donner.

Thank you, thank you, thank you. I have talked about transparent decision-making and this is what I mean by it. Having this information available so that we have a holistic view of our finances before we make large investment decisions. Because even though we may be able to afford something this year, we need to understand what does that do to our ability to spend on discretionary projects moving forward. Because we wanna maintain our minimum balances by fund. Our special funds have restrictions as you've talked about on how they can be used. And we also wanna maintain our AAA credit rating. And in addition, if I added up all the projects of maintenance versus discretionary, because that's just who I am. And it's about $17 million in capital maintenance. And so we have to be thinking about that, that it's gonna be a number commensurate with that each and every year. So we need to be aware of that as we make these decisions. So having this is very important and I thank you for bringing this to the town. I also wanna thank you for laying out the sources of funds. area that I've been pushing on since I came on town council is understanding how we're funding our various projects, how the money moves. And I think that is so important. So I appreciate the transparency of all this information and we're really stepping up our financial game and it's a reflection of Mr. Byrd. So thank you.

Okay, thank you.

I will say thank you for that. It means a lot and it's great feedback. It's something that we have tracked and listened to. I appreciate Dave's ability to just take the policy and implement it on a spreadsheet and show us the pre and post use of funds like nobody I've ever worked with. So special thank you.

Thank you.

Okay, last is a couple of KPI slides. These are the Moody's KPIs. And there's a lot of numbers in here. And I wanna thank John Carpenter for putting this together. But regardless of that, the main thing to look at is of how Moody's came up with our AAA rating. And one of these is available fund balance for general fund and stormwater. And so it's important to note when we really look at the general fund down the road, they look at the unrestricted fund balance of the general fund. And so we're just gonna have to make sure we keep an eye on that down the road. as we move forward and make sure we keep that general fund funded from that perspective. But as a percent of revenue, we wanna be about 35% and we're green, green, green, 25, 26, 27, with plenty of room there to go from, which is great. Yes, it did. Yeah, we're actually growing up from 52, 51 to 54. our liquidity ratio is really our cash, right? And, and so less our debt. And so, This is kind of what I would say if someone wanted to ask, well, what's the right fund balance to have if you look at fund balance as cash? We have plenty of room in this one because we are well over the KPI AAA of 40%. We're at 182%. Now, I'm not suggesting we take fund balance down $100 million, but I'm just saying that in this KPI, we're very, very strong from that perspective, which is great.

And this goes along with what we talked about at strategic plan when we start talking about those data-informed, right, that data-based informed decisions. A AAA criteria over 35% for fund balance and liquidity over 40%. And so one thing that I appreciate so much from John is as we were preparing this budget, he was calibrating both ratios, both from a fund balance and liquidity ratio as we were making budget decisions for a proposal to you.

Okay, here we go. This is a busy chart. We have some footnotes here on the right, but our long-term liability ratio, that's looking at our long-term debt, which is our bonds, basically, and any leases, and our pension liability for fire rescue and for the town's OPEB liability as well. And we look at that compared again to the recurring revenue. And we went up a little bit in 2026 based upon the debt we took on. But after payment of that debt, we're back in the green, we're under 100%. Well, something we'll keep our eye on going forward. I would say in talking to John McGowan, You know, if this one changed a little bit down the road, if we do another round of borrowing, I don't think it would really impact us from a AAA perspective, but yet we're still looking at that one. That's the only one that we're really close on. And then fixed asset costs, which is our debt service that we've got along with our, which is basically contributions we need to keep the pensions whole divided by revenue. And we wanna be below 10% and we're tracking very well at 6% for 2027 down from 2026 of seven. So keeping that perspective there, but this kind of gives you a idea of what Moody's looked at when they did our AAA. So it's a little scorecard we'll look at annually just to see how we're tracking.

And can I ask a quick question about the one in the red 2026 projected and then improved in 2027? Is that due to our big pay down that we did? Yes. Thank you.

I just wanted to say thank you for providing this. I think it's really important as much as we're looking at everything else in the budget. This is so critical to everything. So having this information in front of us and knowing that you're watching it and adding it into the calculations as you're preparing a budget, makes me feel confident and I appreciate that.

And that's the roll up, thank you. And Mark, I'll hand it to you.

Mark, what's got? We went over CIP, stormwater, and consolidated budget. A reminder, we went over general fund debt, Gullah Geechee, historic neighborhoods, CDC, housing, and special revenues several days ago. And the next time we see you is June 9th, budget ordinance and public hearing and second and final reading for next steps. All right.

Mayor, just a quick thing about when we do the second reading. I think I asked this question in our last workshop, and that is to make sure that whatever change we made in the reserve policies is reflected in the ordinance revision that we get and that our motion is appropriate.

It's when we've done that. Thank you.

Other comments from council? Other comments, come on. It's great. I mean, it really, as Ms. Tonner said, it has brought clarity to the transparency, right? It really gives us a lot of better information so that we can make better calls down the road. And what you've done and how you've laid it out is really just exceptional. Thank you. So Kim, do we have anybody signed up to speak on the agenda items?

Yes, we have.

Mr. Hoagland. Excuse my hat. 600,000 tax money to dredge Harbortown Yacht Basin. This is a man-made private yacht basin, clearly an HOA expense. Just another illegal tax grab pushed by the lawyers Coltrane and Alford. For 40 years, they have robbed taxpayers blind, overcharged legal fees, drafted illegal contracts, committed contract fraud, and town councils have allowed it. Council has also violated South Carolina procurement laws by not giving other qualified local lawyers and firms a fair opportunity to compete for this work. The town's next lawyer should be an island resident, a taxpayer, and somebody who truly has the best interests of Hilton Head in mind. How about a native islander? Legal fees have been buried inside administrative expenses for years, and our councils have not questioned this malpractice or abuse. Coltrane and Alpert use their town positions to proper their own private law practices, and it's ongoing. To stop this abuse, we simply need one honest young staff lawyer making $125,000 salary supported by modern AI technology to answer legal questions when needed. Like I've said, AI is now so advanced, we can put an honest AI robot in Curtis Coltrane's chair. one smarter, faster, and able to answer legal questions for free instead of wasting over $2 million of legal fees. Our lawyers should be investigated for criminal fraud, their law firm profiting from their town positions, steering work to outside lawyer friends, and giving legal advice that calls council members to vote for illegal tax use. This council hides behind group votes instead of individual accountability. Every council member should be singled out, asked why they continue voting for illegal tax money, Tamara. The real travesty is lawyers, town manager, and some staff are controlling this part-time council like puppets. Council is now allowing Coltrane to appeal to the Supreme Court to spend another 10,000 or more taxpayer money trying to justify the illegal use of 600,000 in public funds to dredge Harbortown. I personally watched being dug decades ago. Our lawyers are turning our council into accomplices. South Carolina constitutional law prohibits public tax money for being used for public purposes that doesn't serve the public good benefit and reason. The South Carolina Supreme Court has already ruled that taxpayer money cannot be used to repair even a small bridge inside a private gated community. This is no difference. The lawyers to be sued for malpractice. There are more lawsuits coming and I have one thing to say, no thanks.

Anybody else signed up to speak?

Not for agenda items.

Okay, how about non-agenda items?

Yes. Skip Hoagland.

In a second. After, Mr. Campbell, afterwards.

I'm sorry? Go ahead, Mr. Hoagland.

Allen, you understand all this?

Yes, I do.

OK, please don't interrupt. I'm here today because the taxpayers are not getting answers, and that needs to change. So let's get straight to it. Who gave the legal opinion that ATax funds can be used the way they are? Name the lawyers, produce a written opinion, or admit it doesn't exist. Who told this council it was legal to spend taxpayer money on $600,000, dredging $500,000 for a heritage golf sponsorship, millions to fund the Chamber of Commerce, taxpayer-funded lawsuits, and lawyer-finger criminal DMO contract? Because with no valid legal opinion, these are not mistakes. They are knowing violations. Why were the multi-million dollar DMO contracts approved that violate IRS tax evasion, South Carolina aid tax code, constitutional law that prohibits public money being used for private benefit and profits? Why is the Chamber and other nonprofit organizations offering for-profit, selling ads, no business license, generating revenue, and refusing to disclose their tax use? Where are the full financial records, profit reports, and transparency required by law? Why do town officials use taxpayer money to join the chamber, attend the chamber ball party? That's a direct conflict of interest. Public funds should never be used for private memberships. Why are FOIA requests being violated and denied? Transparency is not optional. It's the law. Why are the town lawyers drafting and approving illegal contracts that benefit private entities while taxpayers pay for it? Who is overseeing them? Why are the legal fees out of control? This is lawyer malpractice and fraud, and Coltrane should be sued. This is simple to stop. Follow the money, show the documents, and name the people responsible. If you cannot do that, you are not governing. You are protecting a system that is broken. I'm calling for immediate action. Full disclosure of all financial records, all legal opinions released to the public, independent city doge oversight of budgets and year-end audits. This is ridiculous what I'm hearing here. A complete review of all ATACs and DMO contracts. Taxpayers are watching and this is not going away. Last, Mr. Perry. Oh, Mr. Perry. Said he saw millions of tax use receipts and invoices with Chamber Bill Miles, including Canada. Where are they? This is criminal fraud. And Alex Brown, you must be removed by the Finance Committee and replaced by a CPA. You're not a CPA. I'm not a CPA. I don't qualify either. Don't take it the hard way. More lawsuits are coming. No one escapes FBI, IRS forensic audits, and handcuffs are usually the result. You people need to prepare yourselves. If you're not being honest, you need to prepare yourself. This is not sustainable and it's gonna end. It's gonna be ugly when it does. Remember I told you that. Thank you. Well, again, no thanks.

Mr. Campbell.

Thank you, Mr. Mayor, members of council. My name is Morris Campbell. Good to see you. Just wanted to say that I commend you on your budget process. year, the two sessions that I attended, certainly the priorities that you are setting for infrastructure and capital improvement are critical and very much in tone as to what needs to be done on our island. I think that catching up in those two categories will make a big difference as far as the quality of life for all of our people and not just the few that oftentimes is the attention given to. Thank you energy and your commitment to upgrading our stormwater system into a comprehensive system and to bringing up our CIP projects to levels that's going to help make our communities a better place for all of us to live. Certainly thank you. And no, it's not easy, but keep pushing. And we hope that you'll continue to look from that perspective and continue to make sure that Everyone is concluded in our one island. Thank you.

Thank you very much. All right. Seeing that we're at 6.57 and there's nobody else to speak, I would say that we're adjourned. Thank you all.