Isle of Palms city leaders are already looking at alternate ways for meeting all budget projections, without having to increase future taxes.
After much discussion, mulling over several options and trying to balance present costs with future debts, IOP City Council is set to approve a new budget for the 2024-25 fiscal year. The budget will include $29.1 million for projected revenues and $26.5 million for projected expenses.
A required public hearing was held on May 28 prior to the regular council meeting and a second reading approval is slated for some time near the end of June. If there are no changes, the new budget as proposed will take effect July 1 with no tax increases – either operating or debt service millage.
Expenditures will include a number of projects, such as:
- Stormwater collection system and drainage improvements
- A portion of the beach nourishment through the Beach Preservation Fee
- Undergrounding utility lines
- Beach access paths improvements
- New playground equipment for the recreation center
- Large building/equipment purchases – including the design of future renovations for City Hall
Over the past year, the city continued to grow its cash deposits, which totaled approximately $43.6 million at the end of March and includes $5 million in property tax revenue from Charleston County in 2024.
“The city’s finances are in good shape,” said councilman Jimmy Ward, CPA, licensed by the South Carolina Board of Accountancy. “And I believe we’re on the right track with this budget.”
But despite the large reserves and expected revenues, there are concerns it won’t be enough to cover all the city’s projects and its pending debt services without raising taxes at some point.
“The general fund expenses are growing, but the general fund revenues on their own are not growing at the same pace,” said councilman Scott Pierce at the May 14 council workshop.
City Administrator Desiree Fragoso pointed out that the city could consider taking on debt the following year for City Hall renovations and the purchases of garbage and fire trucks.
“There’s a placeholder in future years of a 1 mill increase on the city’s debt service millage – but it’s not enough to cover the entire debt load,” Fragoso said at the April 9 workshop. “Based on the current estimates and the current value of a mill, we could be looking at an increase of 1.5 mills to cover one debt issue.”
Since this possibility is related to a future year, it is predicated upon the amount that the city will receive in the general fund, including property taxes and tourism revenues in fiscal year 2025, plus any adjustments for reassessment.
Fragoso added that the city will soon be going through a reassessment year, so the value of a mill could change. “We don’t know what the value of the mill will be. The current value of 1 mill is approximately $287,000.”
The city has been awarded approximately $9 million in grants for projects in the last three years. “And we continue to actively work with our grant writer in identifying opportunities based on our 10-year capital plan and maximize it as much as we can,” Fragoso added.
By L. C. Leach III
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