Video index

*This meeting was joined in progress*

5.a. Consideration of an Ordinance of the Town of Hilton Head Island to Amend Municipal Code Title 10, Section 10-1-250, the Business License Ordinance, to Update the Business License Class Schedule as Required by Act 176 of 2020 for the Town of Hilton Head Island, South Carolina and Providing for Severability and Effective Date - April Akins, Interim Revenue Manager

5.b. Consideration of an Ordinance Providing the Issuance and Sale of the Town of Hilton Head Island Special Obligation Bonds (Beach Preservation Fee Pledge), in One or More Series in the Principal Amount Not Exceeding $19,000,000; Delegating the Authority to the Town Manager to Determine Certain Matters with Respect to the Bonds; Prescribing the Form and Details of Such Bonds; Other Matters Relating Thereto; and Providing for Severability and an Effective Date - John Troyer, Interim Finance Director

6. Public Comment - Non Agenda Items

Sep 30, 2025 Hilton Head Finance & Administrative Committee

*This meeting was joined in progress*

5.a. Consideration of an Ordinance of the Town of Hilton Head Island to Amend Municipal Code Title 10, Section 10-1-250, the Business License Ordinance, to Update the Business License Class Schedule as Required by Act 176 of 2020 for the Town of Hilton Head Island, South Carolina and Providing for Severability and Effective Date - April Akins, Interim Revenue Manager

5.b. Consideration of an Ordinance Providing the Issuance and Sale of the Town of Hilton Head Island Special Obligation Bonds (Beach Preservation Fee Pledge), in One or More Series in the Principal Amount Not Exceeding $19,000,000; Delegating the Authority to the Town Manager to Determine Certain Matters with Respect to the Bonds; Prescribing the Form and Details of Such Bonds; Other Matters Relating Thereto; and Providing for Severability and an Effective Date - John Troyer, Interim Finance Director

6. Public Comment - Non Agenda Items

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[00:00:08]

ON THE FINANCE COMMITTEE RIGHT . AND FROM OUR PERSPECTIVE WE LIKE TO MAKE SURE THAT PEOPLE SIGNED UP AND DO HAVE THE PERMIT SO THAT WE COLLECT THE BUSINESS LICENSE FEES AND WE CAN COLLECT ACCOMMODATIONS ACTS SO THERE'S A VALUE TO THE TOWN IN THE PERMIT FEE COLLECTIONS. YES, GREAT. AND THERE'S THE VALUE THAT ONGOING ACCOMMODATIONS TAX COLLECTIONS CONNECTED TO THAT. OKAY THAT'S JUST CRAZINESS FOLLOWED COMMENTS GOOD GOOD POINT MR. BROWN ABOUT THAT. I THINK IT MIGHT BE HELPFUL FOR TO KNOW JUST ON A MATH BASIS THAT IF THE NUMBER PERMITS DECREASED AND THAT RESULTED IN THE NUMBER BECAUSE I THINK THERE MIGHT HAVE BEEN A DECREASE IN THE NUMBER OF PERMITS. SO IF WE COULD HAVE DATA I THINK THAT WOULD BE HELPFUL.

YEAH, IT'S IT'S STRAIGHT MATH THE AMOUNT THAT BREAKS DOWN IS GOOD AND NUMBER OF STATES YEAH YEAH. AND THE OTHER THING I NOTED IS ALTHOUGH THERE'S SOME DECREASE IN HOSPITALITY TAX AND SHORT TERM RENTAL THE STATE TAX WAS UP AS WELL AS THE LOCAL TAX AND ALSO THE BEACH PRESERVATION FEE. SO THERE STILL SOME RENTAL ACTIVITY GOING ON. IT'S JUST PERHAPS IN THE NUMBER OF PERMITS BUT WE NEED TO BE MINDFUL OF THAT AS WELL SO WE CAN GET A LITTLE MORE ABOUT THAT.

WE'RE CHANGING THE MIX OF OF OF WHAT'S BEING RENTED OUT THERE AND SO I THINK YES, IT IS IT CERTAINLY WOULD POINT TOWARDS IS THAT WE NEED FURTHER STUDY ON THIS AS LIKE OKAY THINGS CHANGING AND AND YOU'RE SEEING THAT ONE OF THE THINGS WE WE WANT TO THINK ABOUT AS WELL AS WE ANALYZE THAT IS THAT WE DON'T RENT 100% OF OUR SHORT TERM RENTALS AND SO THERE IS NATURALLY AN EXCESS CAPACITY OUT THERE. SO ONE OF THE THINGS THAT YOU KNOW, BE THOUGHT OF IS THAT PERHAPS WE'RE REDUCING SOME EXCESS THAT'S JUST SITTING THERE OR NOT BEING UTILIZED RIGHT. AND THOSE NUMBERS ARE PUBLISHED. I THINK THE CHAMBER PUBLISHES YOU KNOW, PERCENT OF CAPACITY RENTED AND YOU KNOW AND THAT IT'S IT'S SEASONAL AND SO YOU'RE EXACTLY RIGHT OKAY THANK YOU THANK YOU MR. TROY YOU WANT TO WELCOME MR. ALFORD TO THE CONVERSATION AS WELL.

[5.a. Consideration of an Ordinance of the Town of Hilton Head Island to Amend Municipal Code Title 10, Section 10-1-250, the Business License Ordinance, to Update the Business License Class Schedule as Required by Act 176 of 2020 for the Town of Hilton Head Island, South Carolina and Providing for Severability and Effective Date - April Akins, Interim Revenue Manager]

GOOD MORNING SIR. YOU FEEL FREE AS WE MOVE ALONG TO COMMENT ALONG US.

ALL RIGHT. WE WILL MOVE INTO OUR NEW BUSINESS CONSIDERATION OF THE ORDINANCE OF THE TOWN HERE ON THAT ISLAND TO AMEND CODE TITLE TEN, SECTION TEN.

THIS ONE HAS TO BE THE BUSINESS LICENSE ORDINANCE TO UPDATE THE BUSINESS LICENSE SCHEDULE AS REQUIRED BY ACT 176 OF 2020 FOR THE TOWN OF HILTON HEAD ISLAND, SOUTH AND PROVIDING FULL SEVERABILITY IN EFFECT THE DATE THIS OCCURS. GOOD MORNING.

HOW ARE YOU? GOOD MORNING HOW ARE YOU? I'M GLAD TO BE BACK APPLICANTS I AM CURRENTLY SERVING AS THE TOWN'S INTERIM REVENUE MANAGER ON OUR FINANCE TEAM SO I'M HERE TODAY TO TALK TO YOU ABOUT OUR BUSINESS AUDIT UPDATE REALLY EXCITING STUFF.

I AM GOING TO GET MY GLASSES ON EXCUSE ME. OKAY SO I THOUGHT I WOULD PROVIDE A BRIEF HISTORY THE WHY WE'RE HERE TODAY TO UPDATE OUR BUSINESS LICENSE ORDINANCE BACK IN SEPTEMBER OF 2020 THE SOUTH CAROLINA GENERAL ASSEMBLY DID PASS ACT 176 WHICH WAS ALSO KNOWN AS THE BUSINESS LICENSE STANDARDIZATION ACT AND THAT LAW DID REQUIRE EVERY LOCAL GOVERNMENT THAT LEVIED A BUSINESS LICENSE TAX TO ADMINISTER THE TAX IN THE SAME WAY AND THAT WAS EFFECTIVE JANUARY ONE OF 2022 AND AS A RESULT MUNICIPAL ASSOCIATION OF SOUTH CAROLINA CREATED A BUSINESS LICENSE MODEL ORDINANCE TO HELP ENSURE COMPLIANCE WITH ALL OF THE REQUIREMENTS AND REGULATIONS AS IN THE NEW LAW AND AFTERWARDS OUR TOWN COUNCIL AT THE TIME IN SEPTEMBER OF 2021 ADOPTED THAT LICENSE MODEL ORDINANCE AND WE ARE NOW CURRENTLY OPERATING ADMINISTERING OUR BUSINESS LICENSE TAXES ACCORDING TO THE LAW. SO LET'S TALK A LITTLE BIT ABOUT THE BUSINESS LICENSE CLASS SCHEDULES ACT 176 IT DID REQUIRE ALL JURISDICTIONS WITH BUSINESS LICENSES TO USE A STANDARD CLASS SCHEDULE TO HELP THE BUSINESSES ACCURATELY AND THAT STANDARDIZED CLASS SCHEDULE HELPS PROMOTE CLARITY SO OUR BUSINESSES UNDERSTAND LICENSING REQUIREMENTS BASED ON THEIR BUSINESS ACTIVITY. IN ADDITION ACT 176 ALSO ESTABLISHED AN ONGOING PROCESS

[00:05:03]

FOR THE TOWN SO WE HAVE TO MUST WE MUST MAINTAIN OUR ORDINANCE TO KEEP THE BUSINESS LICENSE PRACTICES COMPLIANT WITH THE STATE LAW AND THEN I THOUGHT IT WAS IMPORTANT TO NOTE THAT WHILE THE BUSINESS LICENSE CLASS SCHEDULES ARE DETERMINED AT THE STATE LEVEL, OUR TOWN BUSINESS LICENSE RATES GOUGE ALL WHICH IS OUR TAX RATES IS DETERMINED AT THE LOCAL LEVEL BY TOWN COUNCIL ACT 176 DOES REQUIRE THE TOWN TO ADOPT THROUGH AN ORDINANCE STANDARDIZED BUSINESS LICENSE CLASS SCHEDULE THAT IS RECOGNIZED RECOMMENDED THROUGH MSE AND IT GOES THROUGH AN APPROVAL PROCESS BY THE SOUTH CAROLINA REVENUE AND FISCAL AFFAIRS OFFICE THAT DOES HAPPEN EVERY YEAR SO YOU'LL GET TO SUE ME IN 2027 AND MSI DETERMINES THAT SCHEDULE AND REVISES THE STANDARDIZED BUSINESS CLASS SCHEDULE EVERY YEAR THEY USE A THREE YEAR AVERAGE OF THE LATEST NATIONWIDE IRS PROFITABILITY STATISTICS AND YOU SHOULD NOTE 2025 CLASS SCHEDULE IS BASED ON THE FEDERAL TAX YEAR FROM 2019 TO 2021. THE INTENT AND GOAL OF THIS PROCESS WAS TO HELP STABILIZE AND LIMIT OUR LARGE FLUCTUATIONS IN OUR BUSINESS CLASSES AND OUR TAX.

WE'VE GONE THROUGH THIS PROCESS TWICE NOW ORIGINALLY 2021 WHEN ACT 126 CAME ON BOARD SO THE TOWN COMPLETED BUSINESS LICENSE REVENUE ANALYSIS THEN BASED ON THE REQUIRED AND RECLASSIFICATIONS AND THAT DID CAUSE A SHORTFALL TO TOWN OF $339,892 AND AT THAT TIME TOWN COUNCIL DID VOTE AND APPROVED TO INCREASE OUR BUSINESS LICENSE TAX RATES BY 7.2% TO OFFSET THE SHORTFALL AND ACHIEVE A NEUTRAL RESULT WHICH WAS REQUIRED BY LAW AGAIN . AND THEN AGAIN IN 2023 WE COMPLETED A LICENSE OUR REVENUE ANALYSIS BASED ON THE REQUIRED CHANGES AND RECLASSIFICATION AND FOUND THAT WE HAD A VERY SHORT VERY SMALL SHORTFALL OF ABOUT $33,000 WHICH WAS ABOUT 1% LESS THAN 1% OF OUR TOWN BUSINESS LICENSE TAX REVENUE. SO AT THE TOWN AT THE TIME THE TOWN COUNCIL DECIDED TO MAINTAIN ITS CURRENT TAX RATE. THERE WERE NO ADJUSTMENTS MADE AT THE TIME SO NOW IN OUR CURRENT YEAR WE DID AS REQUIRED GO THROUGH A VERY DETAILED REVENUE ANALYSIS. WE WENT THROUGH APPROXIMATELY 4000 BUSINESS LICENSE ACCOUNTS AND THIS DID HAPPEN BACK IN JULY TO DETERMINE THE IMPACT OF THE CLASS CHANGES AND RECLASSIFICATION TO THE TOWN AND OF COURSE OUR BUSINESS COMMUNITY THERE YOU SHOULD NOTE THERE ARE ABOUT THIRD THERE ARE 30 INDUSTRY SECTORS IN THE CLASS SCHEDULES OF THE 35 INDUSTRIES WILL BE IMPACTED BY THE SCHEDULE CHANGES FOR THE 2026 BUSINESS LICENSE TAX YEAR FOR THOSE INDUSTRIES OR 71% OF OUR TOWN'S BUSINESSES WILL HAVE A TAKE TAX RATE REDUCTION DUE TO THE RECLASSIFICATIONS AND THEN WE'VE GOT ONE INDUSTRY OR ABOUT 1% OF OUR BUSINESSES WE'LL A TAX RATE INCREASE AND BY APPLYING THOSE NEW CLASS SCHEDULES AND RECLASSIFYING THE BUSINESSES THE TOTAL BUSINESS LICENSE TAX REVENUE SHORTFALL TO THE TOWN IS $348,745.

THIS IS AN OVERVIEW OF OUR DETAILED BUSINESS LICENSE REVENUE ANALYSIS.

IT IS BASED ON THE FISCAL 25 TAX INCOME THAT WAS COLLECTED AND THE INCOME THAT WAS REPORTED AND I KIND OF WANTED TO GO THROUGH THIS A LITTLE BIT IN DETAIL.

YOU CAN UNDERSTAND WHO WAS IMPACTED AND WHY THERE ARE AS YOU CAN SEE ON THE LEFT HAND SIDE THERE ARE NINE CLASSES WITHIN THIS SCHEDULE. THE IMPACTS ARE HAPPENING IN CLASSES ONE THROUGH SEVEN SO I DID HIGHLIGHT THAT IN THE GREEN AND IF WE WANT TO I'M JUST GOING TO GO THROUGH THOSE FOR YOU SO IN THE FIRST ONE IS OUR MINING INDUSTRY AS YOU CAN IMAGINE WE DON'T HAVE BUSINESSES HERE MINING SO PARTICULAR RECLASSIFICATION DID NOT IMPACT US. THEY DID GO FROM A CLASS TWO TO A CLASS THREE AND THEN OUR NEXT INDUSTRY THAT'S IMPACTED IS OUR TRANSPORTATION AND WAREHOUSING. AND TO GIVE YOU IDEA OF WHO'S IN THERE, WE'VE GOT OUR VEHICLE FOR HIRE. SO TAXI LIMOUSINE SHUTTLE SERVICES ARE FISHING AND SAILING ARE DOLPHIN TOURS. WE'VE GOT TOWING SERVICES OUR TOW TRUCKS ARE COURIERS MOVING ,TRUCKS, PEOPLE LIKE THAT AND THOSE BUSINESSES FALL INTO THIS

[00:10:01]

CATEGORY AND CURRENTLY THEY ARE IN CLASS ONE AND THEY WILL BE MOVED TO A CLASS TWO AND WITH THAT CHANGE WE WILL SEE THE TOWN WILL SEE A LITTLE BIT OF INCREASE OF ABOUT $13,000.

OUR NEXT INDUSTRY IS HONESTLY OUR LARGEST IMPACT A MAJORITY OUR BUSINESSES FALL INTO THIS INDUSTRY AND THAT IS THE REAL ESTATE RENTAL AND LEASING INDUSTRY.

THERE'S ACTUALLY A LOT OF OTHER BUSINESSES IN HERE THAN JUST OUR SHORT TERM RENTALS.

SO I WANTED TO POINT THAT OUT. WE'VE ALL OF OUR RENTALS LONG TERM RENTALS, COMMERCIAL REAL ESTATE, PROPERTY RENTALS. WE'VE GOT MANAGEMENT COMPANIES THAT MANAGE OF THOSE RENTALS PLUS WAS REGIMES THAT SORT OF THING WE'VE GOT REAL ESTATE OFFICES.

WE EQUIPMENT RENTALS SO THINK OF EVENT RENTAL INFAMY OR EVENT RENTALS LIKE RENTALS WE'VE GOT BEACH EQUIPMENT RENTALS, APPRAISAL COMPANIES, CAR RENTALS, TIMESHARES ALL IN HERE AS WELL. SO A BIG PART OF OUR BUSINESS BOOK OF BUSINESS IS DONE IN THIS PARTICULAR INDUSTRY ARE CURRENTLY IN A CLASS SEVEN AND THEY WILL BE RECLASSIFIED TO A CLASS SIX AND WHEN THAT OCCURS WE ARE SEEING REVENUE SHORTFALL FOR THE TOWN THAT'S OVER $253,000. THE INDUSTRY IS OUR PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES WHICH GIVE YOU AN IDEA OF WHO'S IN THERE. WE HAVE A PHOTOGRAPHER ACCOUNTING SERVICES CPAS LET'S SEE WE'VE GOT SURVEYING ENGINEERING GROUPS, ATTORNEYS ARCHITECTS, CONSULTANTS, MARKETING AND DESIGN THOSE TYPES OF BUSINESSES ARE IN THIS PARTICULAR INDUSTRY AND IN THIS CASE THEY ARE BEING CHANGED OR OR RECLASSIFIED FROM A CLASS FIVE OVER TO A CLASS 600 CAN I READ THAT WRONG? HERE I GO.

SORRY FOR OH MY GOODNESS I AM SO SORRY OLD LADIES OKAY SORRY. THEY'RE GOING FROM A CLASS FIVE TO A CLASS FOUR AND IN THAT INSTANCE WE WILL SEE A REVENUE LOSS ABOUT $30,000 TO THE TOWN OUR 2026 BUSINESS LICENSE HERE AND THEN WE ALSO HAVE ANOTHER INDUSTRY IS BEING IMPACTED THAT IS OUR HEALTH AND SOCIAL ASSISTANCE AND THAT IS GOING TO HAVE THE BUSINESSES THAT YOU WOULD EXPECT OUR PHYSICIANS AND DOCTOR'S OFFICES WE ALSO HAVE DENTISTS, CHIROPRACTORS, WE'VE GOT ASSISTED LIVING FACILITIES OUR NURSING HOME FACILITIES ARE HEALTH CARE WORKERS THAT ASSIST OUR CAREGIVERS AND DENTISTS THINGS OF THAT NATURE FALL INTO THIS CATEGORY SO THEY ARE GOING FROM A CLASS FOUR INTO A CLASS THREE AND AGAIN WE WILL SEE A REVENUE OF CLOSE TO $46,000.

AND THEN LAST BUT NOT LEAST WE HAVE AN INDUSTRY THAT'S CALLED OTHER SERVICES AND THAT DOES THAT HAS A LOT OF REPAIR SERVICES. SO THINK OF CAR REPAIRS, APPLIANCE REPAIRS WE'VE GOT A HAIR AND BARBERSHOPS ARE THOSE ACTUALLY FALL INTO CATEGORY WE'VE GOT A WEDDING AND EVENT PLANNERS LET'S SEE WE'VE GOT NAIL SALONS, PET SERVICES GROOMERS, MASSAGE AND SPA SERVICES. SO THAT'S ANOTHER BIG INDUSTRY WIDE SELECTION OF BUSINESSES WE ARE IN THAT PARTICULAR INDUSTRY MOVING FROM CLASS FOUR DOWN TO CLASS THREE AND AGAIN WE'LL SEE REVENUE LOSS OF OVER $32,000. WHEN YOU LOOK AT THE BOTTOM LINE THERE THAT WHEN YOU GO THROUGH THE FISCAL YEAR AN ACTUAL BUSINESS LICENSE IS COLLECTED THAT REVENUE IS A LITTLE OVER $7.4 MILLION AND THAT IS JUST BASED ON THE CLOSE TO 14,000 ACCOUNTS THAT WE WERE LOOKING AT. THAT'S BASED ON THE INCOME THAT THEY REPORTED AND THEN WHEN WE RECLASSIFY AND LOOK AT WHAT WE WOULD COLLECT IF THE RATES CHANGE AND THE CLASSIFICATIONS OCCUR, WE ARE LOOKING OF COURSE AT THE SHORTFALL $348,745 AFTER GOING THROUGH THE REVENUE ANALYSIS OF FINANCE STAFF HAS RECOMMENDATIONS FOR THE COMMITTEE TODAY. SO OF COURSE WE WERE ASKING TO ADOPT A STANDARDIZED BUSINESS CLASS SCHEDULED AS REQUIRED BY 176. WE ARE RECOMMENDING TO REBALANCE THE TOWN'S BUSINESS LICENSE TAX RATES TO ENSURE A REVENUE NEUTRAL RESULT THAT WOULD REQUIRE US TO INCREASE OUR TAX RATES ACROSS ALL CLASS RATES FOR A 4.9%.

AND THEN WE'RE ALSO REQUESTING THAT THE COMMITTEE TO TOWN COUNCIL TO AMEND A CURRENT

[00:15:01]

BUSINESS LICENSE ADOPT THE BUSINESS LICENSE CLASS SCHEDULED AS REQUIRED BY LAW.

AND LASTLY I JUST WANTED TO PROVIDE IN A TIMELINE OF EVENTS.

WE ARE IN A TIGHT TIMELINE IMPLEMENT THIS. SO TODAY OF COURSE I'M IN FRONT OF YOU DISCUSSING THE UPCOMING CHANGES WE HAVE THIS ON THE CALENDAR ON THE AGENDA OCTOBER 21ST FOR FIRST READING AND IT'S ALSO SCHEDULED THE SECOND AND FINAL READING ON NOVEMBER 4TH AND THEN BEHIND SCENES WE WILL START WORKING TO MAKE SURE WE ARE UPDATING OUR BUSINESS LICENSE SOFTWARE WITH OUR VENDORS AND PREPARING OUR 2026 BUSINESS LICENSE TAX YEAR AND DECEMBER. IT TAKES THE ENTIRE MONTH TO WORK THROUGH THIS PROCESS THE SYSTEM PRINT THE RENEWALS, GET THEM READY TO MAIL ETC. AND THEN IN JANUARY TYPICALLY WE DO MAIL THE RENEWALS AND OF COURSE THAT WOULD BE IMPLEMENTING THE NEW A NEW BUSINESS LICENSE CLASS SCHEDULES AND NOTIFYING THE BUSINESSES OF ANY CHANGES AND THAT THE END OF MY PRESENTATION I'M HAPPY TO TAKE QUESTIONS. OKAY THANK YOU.

IT'S DONNA. ALL RIGHT. IF WE CAN GO BACK TO THE SLIDE THAT SHOWS THE IMPACTS BY THE VARIOUS SEGMENTS. YES, MA'AM.

OKAY. HERE WE GO. YEAH.

SO YOU FOR THE ANALYSIS THIS WAS VERY HELPFUL AND AS YOU MENTIONED, IF WE APPLY EXACTLY WHAT THE STATE PROVIDES WE WOULD HAVE A DEFICIT $349,000 IN OUR BUSINESS LICENSES.

AND AS WE LOOK AT THAT, YOU KNOW TOWN'S RECOMMENDATION IS TO INCREASE EVERYONE'S RATES 4.9% TO OFFSET THAT DEFICIT. WHEN I LOOK AT IT, IT'S VERY CLEAR FROM YOUR ANALYSIS THAT THERE IS ONE CATEGORY THAT'S DRIVING THE MAJORITY OF THAT DECREASE WHICH IS THE CHANGE FOR REAL ESTATE RENTAL AND LEASING FROM CLASS SEVEN TO CLASS SIX.

AND SO THAT'S HUNDRED AND $53,000. SO THE MAJORITY THE CHANGE SO AS I WAS THINKING ABOUT THIS I WAS THINKING THAT PERHAPS MIGHT WANT TO CONSIDER CHANGING THE RATES FOR THAT GROUP ONLY AND THEN KEEPING ALL RECOMMENDED RATES FOR ALL OF THE OTHER CLASSES THE STATE AND BY DOING THAT WE COULD REDUCE THAT DEFICIT FROM 349,000 TO ABOUT 95,000 OR A LITTLE OVER 1% OF OUR LICENSES. AND IN THIS WAY NOT QUOTE UNQUOTE ADVERSELY IMPACTING THE OTHER BUSINESSES MAKE UP FOR THAT DEFICIT.

SO I THINK YOU COULD ACCOMPLISH THAT BY SIMPLY TAKING THE RATES FOR THE NEW CLASS SIX AND APPLYING THEM AT THE LEVEL OF THE OLD CLASS SEVEN NOT THE NEW RECOMMENDED BUT THE OLD CLASS SEVEN AND DOING THAT WOULD PROVIDE YOU TO MAKE UP A LARGE PERCENTAGE OF THE DEFICIT AND ONLY AFFECT THAT CLASS AND NOT AFFECT ALL THE OTHER CLASSES.

I KNOW THAT WE DO HAVE THE ABILITY TO SET OUR OWN RATES HERE IN THE TOWN SO THIS IS SOMETHING THAT WE CAN CONSIDER. SO I'D LOVE TO HEAR FROM MY FELLOW TOWN COUNCIL MEMBERS ANY THOUGHTS ABOUT THAT PROCESS. MAY I ADDRESS THAT I DID YES I DID LOOK INTO THAT.

THAT WAS A THOUGHT AS YOU LOOK AT OUR REVENUE ANALYSIS I CHECKED WITH MSI TO SEE WHAT THEY WOULD RECOMMEND AND ADVISE . THEY DID SAY IF WE HAVE A SHORTFALL THAT WE SHOULD MAKE ADJUSTMENTS TO OUR RATES BUT IT NEEDS TO BE ACROSS ALL OF CLASSES THAT WE CANNOT PICK AND CHOOSE A CLASS. SO THAT WAS THEIR RECOMMENDATION AND WE COULD CERTAINLY FOLLOW UP WITH CURTIS TO GET A LEGAL OPINION ON THAT IF YOU LIKE. BUT I DID LOOK IN TO THAT. THANK YOU FOR LOOKING INTO THAT IT DID NOT MAKE THAT CLEAR AND THE AS YOU READ THEM THAT'S AN OPINION OUTSIDE SO THAT'S AN OPINION LAW BUT THANK YOU FOR THAT. SURE.

YEAH THAT'S CRAZY TO ADD THE SAME KIND OF GOING LIKE WHY DON'T WE INSTEAD DOING AN ACROSS BOARD AND AFFECTING EVERYONE SO IT SOUNDS AS THOUGH THAT'S WHAT MASC IS RECOMMENDING IT'S NOT WHAT IS REQUIRED ALTHOUGH WE WOULD HAVE TO LEAN ON OUR TOWN ATTORNEY AS YOU SUGGEST BUT CORRECT THAT PREVIOUSLY WHEN THERE WAS 7.2% INCREASE IN 2021, WAS THAT

[00:20:01]

ACROSS THE BOARD? YES, MA'AM. YES I KNOW ANY AROUND AND KNEW ABOUT THAT BUT I WOULD LIKE I AGREE WITH MS.. TURNER THINK WE OUGHT TO TAKE A CLOSE LOOK AT THAT AND SEE IF THAT'S POSSIBLE ON WHERE TO GO AND I DON'T WANT TO HOLD UP THE PROCESS IN GETTING IT ON BEFORE THE FULL TOWN COUNCIL BUT MAYBE WE COULD THINK ABOUT DOING SOMETHING SUBJECT TO THE TOWN ATTORNEY'S OPINION THAT WE CAN DO IT THAT WAY BECAUSE I THINK THAT IS A FAIR WAY TO DO IT AND . THANK YOU.

I KIND OF QUESTION ABOUT WHO'S IN THOSE CATEGORIES SO THANKS. IT'S NOT ALWAYS OBVIOUS.

IT'S REALLY HELPFUL AND IT WAS MY OTHER QUESTION ABOUT THIS CLASS OF BOARD THE OTHER THING IS THAT BECAUSE IT'S GOING TO CHANGE WHATEVER THE NUMBER IS THE REVENUE IS GOING TO CHANGE AND SO DO WE NEED TO ALSO IN ADDITION TO ADOPTING THIS WHICH I'M FULLY IN FAVOR OF DOING THIS WE HAVE TO DO IT ANYWAY. IT'S INTERESTING TO ME I'VE SEEN THIS HAPPEN IN NORTH CAROLINA WHERE EVERY NOW AGAIN THE GENERAL ASSEMBLY SAYS LET'S CHANGE THESE CLASSIFICATIONS BECAUSE EVIDENTLY SOMEBODY WAS COMPLAINING TO THEM ABOUT HOW MUCH THEY WERE PAYING AT ANY RATE, I'M WONDERING IF WE ALSO NEED A BUDGET ORDINANCE AMENDMENT OR TO INCLUDE IT IN A LARGER BUDGET ORDINANCE AMENDMENT BECAUSE IT IS GOING TO CHANGING OUR REVENUE STREAM FOR CERTAIN CATEGORIES AND I SEE MR. TROYER STANDING THIS MOMENT TO HELP ADDRESS THAT.

BUT THAT WAS MY OTHER QUESTION WE CAN INCORPORATE THAT AND SO WE DO PLAN A BUDGET AMENDMENT NOVEMBER AND SO WHATEVER TOWN COUNCIL WOULD DECIDE THIS MONTH WE CAN INCORPORATE THAT.

RIGHT, RIGHT. AND ONE FINAL QUESTION I'M LOOKING AT THE SCHEDULE AND SO THE BILLS. ARE BUSINESS LICENSES RENEWED ON A CALENDAR YEAR BASIS? SO THE BUSINESS LICENSE YEAR RUNS FROM MAY ONE TO APRIL 30TH AND TYPICALLY WE OPEN UP RENEWAL PERIOD IN JANUARY TO START THE COLLECTION THE NEXT UPCOMING YEAR TAXES BUT IN THIS CASE WOULD BE DOING THAT AS OF JANUARY ONE. THE RENEWALS YES, THAT'S CORRECT. AND SO IS THAT A CHANGE WE MAKE LOCALLY? IS THAT GOING TO BE IN EVERY YEAR CHANGE OR IS THERE A STATE STATUTORY REQUIREMENT AS TO WHEN THESE RENEWALS HAPPEN? THAT'S THE SAME PROCESS WE DO EVERY YEAR.

SO AGAIN ARE OUR CURRENT BUSINESS LICENSES EXPIRE ON APRIL 30TH BUT PEOPLE ELECT TO RENEW PRIOR TO APRIL 30TH SO THAT WELL THAT'S A NORMAL PROCESS FOR US AND THE REASON I'M ASKING ABOUT THIS IS BECAUSE I UNDERSTAND THERE CONSIDERATION OF LINING UP SHORT TERM RENTAL PERMITS, THE BUSINESS LICENSES AND THAT'S WHY I'M ASKING THE QUESTION IS HOW ARE WE GOING TO DO THAT? THIS SEEMS TO BE RENEWING JANUARY ONE WHICH IS THE SAME DAY STR PERMITS WOULD RENEW BUT IT SOUNDS AS THOUGH SOMEONE DIDN'T HAVE TO TURN AROUND RENEW THEIR BUSINESS LICENSE AGAIN MAY 1ST. I KNOW THAT'S CONFUSING SO THE STR PERMIT WE OPEN THE PORTAL TYPICALLY WE OPEN THE PORTAL UP NOVEMBER 1ST AND START RENEWING FURTHER YEAR AT THAT TIME THEY HAVE A CURRENT BUSINESS LICENSE SO WE ISSUE THEIR PERMIT BASED ON THAT AFTER APRIL 30TH IF THEY HAVEN'T RENEWED THEIR BUSINESS LICENSE OR THEIR PERMIT THEN WE HAVE TO FOLLOW UP WITH THOSE ACCOUNTS FOR DELINQUENCY.

SO THERE IS A WEIRD LAG BECAUSE OF THE DIFFERENT DUE DATES. WE GET A LOT OF COMPLAINTS ABOUT THAT FROM OUR TAXPAYERS SO LINING UP THE DUE DATES WOULD BE A BUSINESS FRIENDLY APPROACH. YEAH AND. NOW I'M LOOKING AT THE TIMELINE FOR THE BUSINESS LICENSES SINCE WE'RE GOING TO NEED TO CHANGE THIS BY THE END OF THIS CALENDAR YEAR RIGHT AND THAT MEANS THAT THERE'S GOING TO BE ANOTHER RENEWAL PROCESS.

SO WILL BUSINESSES HAVE TO RETURN TO RENEW TWICE BASICALLY ? NO, NO. SO THEIR THEIR LICENSE STAYS CURRENT NOTHING CHANGES ON THEIR CURRENT YEAR LICENSE ONCE THEY DO RENEW THEY'RE PAYING FOR THE NEXT YEAR'S LICENSE WHETHER. IT'S JANUARY 1ST OR APRIL 30TH. SO THE NEW CLASS SCHEDULE NEEDS TO BE IN PLACE WHEN WE OPEN UP THE PORTAL FOR RENEWALS. SO MAKING SENSE AT THE THE ONLY THING THAT'S STILL CONFUSING TO ME IS I'M LOOKING AT YOUR TIMELINE OF EVENTS WHICH IS ON A DIFFERENT SCREEN MAYBE ANOTHER COUPLE I GUESS AFTER THAT TIMELINE OF EVENTS.

YEAH. THERE WE GO. SO IT SAYS TRUST DECEMBER 2025 PROCESS 2026 BUSINESS LICENSE RENEWALS AND ARE MAIL RENEWALS AND THEN THEY'LL GET A NEW CLASS SCHEDULE AS EFFECTIVE AS OF JANUARY 2026. SO THAT WAS MY CONFUSING THING IS THAT THE RENEWALS ARE GOING OUT IN DECEMBER WE DON'T MAIL THEM IN DECEMBER WE PREPARE THEM SO THERE'S OVER 14,000 ACCOUNTS AND IT TAKES A LOT OF TIME TO PROCESS IT AND THIS

[00:25:02]

ITSELF AND THEN ONCE WE GET IT PROCESSED WE START PRINTING AND STUFFING THEM IN ENVELOPES AND GETTING THEM READY TO SEND THEM OUT AND THAT DOES TAKE MOST OF DECEMBER AND THAT DECEMBER IS PROCESS AGAIN AND PREPARING TO MAIL FOR RENEWAL. YES MOSTLY HOUSEKEEPING STUFF RIGHT NOW? YOU SEE WHY I WAS ASKING IT IS VERY CONFUSING.

I DO UNDERSTAND AND IT WAS OKAY I THINK IT'S CAN YOU GO BACK TO THE REVENUE ANALYSIS PLEASE? I WANT TO MAKE SURE THAT I'M READING AND UNDERSTANDING THIS CORRECTLY SO THE COLUMN THIS IS CURRENT CLASS AND WE'RE SAYING THAT THESE ARE CLASSES THROUGH SEVEN ON THE TOP TWO ARE BEING AFFECTED, CORRECT? YES. SO AM I SAFELY ASSUMING AND READING THAT WE CURRENTLY DO NOT HAVE ANYTHING IN CLASS SIX BESIDES.

OH I DON'T THINK THERE'S ANYTHING IN CLASS THAT CORRECT RIGHT.

THAT'S CORRECT. OKAY AND STEVE IS SAYING THAT WE NEED TO MOVE CLASS WELL SOME OF CLASS SEVEN TO CLASS SIX TO INCLUDE THE REAL ESTATE, CORRECT? YES. AND SO THERE'S NO OTHER MOVEMENTS BUT THE AWESOME I GUESS BUSINESSES THAT ARE CURRENTLY IN CLASS SEVEN THAT ARE NOT MOVING.

YES, THAT'S CORRECT. YES. ALL RIGHT.

SO IN ESSENCE TO MISS TANYA'S POINT, THE ONLY BUSINESSES THAT ARE GOING TO BE AFFECTED ARE THE ONES THAT ARE MOVING FROM CLASS THE CLASS SIX AROUND REAL ESTATE AND RENTAL BECAUSE NOW WE MAKE A BLUE CLASS SO TO SPEAK. SO I DID THAT STREET MATH.

I DID SOME ROUGH MATH AND IT SEEMS TO ME THAT SINCE THE CLASS SEVEN IS CURRENTLY PAM I'M ON $92.50 TO START. OKAY AND YOU COMPARE THAT AGAINST THE 8480 I GUESS IT IS THAT THEY WILL THEY WILL BE PAID IF WE MAKE THIS MOVE I'M SORRY $89, RIGHT.

THE DIFFERENTIAL THERE IS LIKE FIVE POINTS 5%. OKAY.

AND AND IF YOU GO BACK AND JUST SAY THAT WE WERE NOT GOING TO GIVE THEM A BREAK AND THEY PAID THE ORIGINAL 80 OR 80 THIS IN CLASSICS THEY REALLY GET IN THE BREAK.

SO I'M JUST WONDERING AND I APPRECIATE THE MUNICIPAL ASSOCIATION GIVING US A RECOMMENDATION BUT THIS IS THIS IS OUR BUSINESS. OKAY.

JUST THESE ARE FOLKS THAT ARE BEING OKAY AND I TOO DO NOT WANT TO HOLD UP THE PROCESS BUT IT IS AS EASY AS ADJUSTING THAT RATE TO COVER THE DIFFERENCE WE NOT HAVE AN EFFECT ON THE REST OF THE BUSINESSES. ME IT JUST MAKES BUSINESS SENSE TO TAKE A LOOK AT THAT AND TRY TO DO IT. SO I WANT TO MAKE THAT COMMENT ALONG THE WAY WE WILL PAUSE ON THIS DISCUSSION SO WE CAN HEAR FROM A FORMER COLLEAGUE AND ALSO ANYBODY ELSE FROM THE PUBLIC AND THEN WE'LL CIRCLE BACK WITH YOU SO YOU CAN TALK ITSELF AND I'LL START WITH YOU.

YOU GOOD COMMENTS. OKAY. ALL RIGHT.

ANYONE ELSE FROM THE PUBLIC SIGNED UP BUT MR. WILLIAMS, I'M NOT OKAY.

ANYONE ELSE? OKAY, SO MY QUESTION KNOW I WAS TRYING CAN HELP US WITH THIS AS WELL BUT I GUESS WHAT I'M ASKING IS IF WE TOUCH BASE WITH MR. COLTRANE AND HE GIVES US A LEGAL OPINION THAT WE CAN ADJUST INDIVIDUAL RATES AND BASED ON THE THE MATERIAL THAT'S BEFORE US THERE'S NOTHING TELLING US THAT CAN'T YOU KNOW WHAT I READ WAS THE STATE IS LEAVING IT UP TO THE MUNICIPALITY TO CHANGE THEIR RATES OKAY THERE'S NOTHING SAY THAT IT HAS TO BE I'M JUST PUTTING SCENARIOS OUT HERE WE DECIDED TOMORROW THAT WE WANT TO TAKE A LOOK AT ANY OF OUR RATES. COULD WE DO THAT? I THINK THE ANSWER IS YES. OKAY. SO I'M BACK A LITTLE BIT ON THE RECOMMENDATION FROM THE MUNICIPAL ASSOCIATION. OKAY.

SO IF WE CAN GET THAT OPINION TO WHAT THIS COMMITTEE IS WHAT I'M ASSUMING I'M GOING TO RECOMMEND HERE TODAY AND THEN I WOULD LIKE THAT TO GO TO A FULL TOWN COUNCIL IF MR. COLTRANE COMES BACK AND SAYS I READ IT DIFFERENTLY HAVE TO DO WHAT THEY SUGGESTED THEN WE GO ALONG WITH STAFF'S I THINK IS PROBABLY THE CONSENSUS OF THIS COMMITTEE I SUBMIT THE QUESTION

[00:30:04]

TO THE TOWN ATTORNEY AND HOW HE RESPONDS OKAY. I■'DLIKETOJUSTFOLLOWUPSO THE CLASS SIX TAX RATE. WE WERE JUST CHANGED TO WHAT THEY CURRENTLY HAVE NOW AND THAT'S WHY WE ARE WANTING ASK RIGHT I THINK THAT'S THAT WN. I THINK THAT WHEN THAT CLASS DOESN'T SEE ANY IN THEIR TAX RATE SO IT'S REVENUE NEUTRAL FOR THEM.

YES BUT IT BENEFITS FROM THAT PASSED ME ONE MORE TIME TO BE SO I'M CLEAR SO I SIX WOULD DO B WHAT SO CLASS SIX WOULD GO BACK TO WHAT THE ORIGINAL CLASS SEVEN IS SO IT WOULD BE 90 TO 50 FOR THE BASE RATE AND A DOLLAR 74 PER $1,000 CORRECT. YES.

OKAY THAT WOULD GET US CLOSER TO YES. YES.

OKAY MR. CHAIR, DO WE NEED A MOTION? YES, I WOULD THINK YEAH IT WOULD BE A RECOMMENDATION TO TOWN COUNCIL SUBJECT TO TOWN ATTORNEYS OPINION TO JUST AS WHAT WAS PROPOSED AND LET'S BE CLEAR WHAT WE DON'T WANT TO HAPPEN IN THIS MOTION IS THAT IF THE TOWN ATTORNEY GIVES US A DIFFERENT OPINION BASED ON WHERE WE WANT TO GO THAT WE'RE NOT COMING BACK TO THIS COMMITTEE, WE'RE JUST GOING TO TAKE THE STAFF REPORT.

I MEAN IS THERE A RECOMMENDATION TO FULL COUNCIL ? OKAY, ENOUGH. YOU'RE READY. OKAY, I'M READY.

DEPUTY CLERK I'LL TRY TO BE SIMPLE I MEAN THAT WE RECOMMEND TO THE FULL COUNCIL ADOPTION OF THE NEW CLASS SCHEDULE FOR BUSINESS LICENSES AND THAT THE RATE BE GO BACK TO THE RATE CURRENTLY CHARGED FOR CLASS SIX SUBJECT TO APPROVAL OF THE TOWN ATTORNEY AND IF THE TOWN ATTORNEY DETERMINES WE CANNOT CHANGE THAT RATE AND THE RECOMMENDATION BE TO ADOPT THE STAFF'S RECOMMENDATION OF A 4.9% INCREASE IN THE RATE ACROSS THE I SEE ME AS AIKENS NODDING I THINK I DID OKAY I FOLLOWED IT WAS QUESTION FOR ONE LAST QUESTION.

YES ONE CLARIFICATION REGARDING THE RATES PIECE IT SHOULD BE THE RATE SIX SHOULD GO BACK TO THE CURRENT CURRENT RATE SEVEN $92.50 BE AS A 9250 PLUS A DOLLAR 70.

THANK YOU. YES DOES THAT MEAN YOU SAYING AND I AGREE WITH THAT CHANGE I SECOND OC ANY FURTHER DISCUSSION WE'RE GOOD WE'RE CLEAR STAMP SIZE WE'RE CLEAR MR. PERFECT ALL IN FAVOR ALL RIGHT THANK YOU THANK YOU IT'S AND MR. TROY YOU JOB WELL DONE.

[5.b. Consideration of an Ordinance Providing the Issuance and Sale of the Town of Hilton Head Island Special Obligation Bonds (Beach Preservation Fee Pledge), in One or More Series in the Principal Amount Not Exceeding $19,000,000; Delegating the Authority to the Town Manager to Determine Certain Matters with Respect to the Bonds; Prescribing the Form and Details of Such Bonds; Other Matters Relating Thereto; and Providing for Severability and an Effective Date - John Troyer, Interim Finance Director]

THANK YOU. WE WILL MOVE ON. NEXT ITEM CONSIDERATION OF AN ORDINANCE THE ISSUANCE AND SALE OF THE TOWN OF HILTON HEAD ISLAND SPECIAL OBLIGATION BONDS DEALING WITH BEACH PRESERVATION A FEE PLEDGE AND ONE OR MORE SERIES AND THE PRINCIPAL AMOUNT NOT EXCEEDING $19 MILLION DELEGATING AUTHORITY TO THE TOWN MANAGER TO DETERMINE CERTAIN MATTERS WITH RESPECT TO THE BONDS PRESCRIBING THE FORM AND DETAILS SUCH BONDS OTHER MATTERS RELATING TO AND PROVIDING THE SEVERABILITY AND EFFECTIVE DATE.

MR. TROYER THANK YOU MR. CHAIR. YES. WHAT THE PROPOSAL IN FRONT OF YOU IS IS TO PROVIDE AN OPPORTUNITY TO DO WHAT WE TALKED ABOUT AT THE WORKSHOP AS YOU KNOW, OUR BEACH RENOVATION PROJECT IS ABOUT $50 MILLION. THE PROPOSAL IS TO FUND THAT WITH BORROWED PROCEEDS OF TO $19 MILLION TO BE SOLD COMPETITIVELY IT WOULD BE FIXED RATE OVER SEVEN YEARS. SO TO EXCEED SEVEN YEARS WHICH WOULD BE LESS THAN THE EXPECTATION FOR THE BEACH RENOVATION PROJECT TO LAST. AND SO OUR EXPECTATION IS THERE WOULD BE ANOTHER ONE HOPEFULLY IT'S NOT SEVEN YEARS. HOPEFULLY IT'S LIKE NINE OR TEN BUT WE WOULD AMORTIZE THE DEBT OVER SEVEN JUST TO MAKE SURE THAT WE'RE ON THE GOOD SIDE OF THE NEXT BEACH RENOURISHMENT AND WE'RE PREPARED FOR THE BEACH RENOURISHMENT.

ONE OF THE BENEFITS OF THIS PROPOSAL IS THAT IT PUTS TOWN COUNCIL IN A POSITION BETTER POSITIONED TO RESPOND IN CASE THERE'S OTHER NEEDS WITHIN THE NEXT SEVEN YEARS TO BE ABLE TO DO MORE BEACH RENOVATE AND RENOURISHMENT IF NEEDED. AND IF NOT THEN THAT'S JUST

[00:35:02]

JUST SAVE MONEY. A BEACH PRESERVATION FEE IS IS APPLIED AND SET ASIDE A SEPARATE FUND TO DO THE BEACH RENOURISHMENT PROJECTS AND SO THIS DEBT WOULD BE SUPPORTED BY A PLEDGE OF THOSE FUTURE BEACH WIND BEACH PRESERVATION FEES AND SO OUR PROPOSALS SCHEDULE IS SLIGHTLY DIFFERENT. WE HAD AN EARLIER SCHEDULE AND SO OUR PROPOSAL WOULD BE TO HAVE FIRST READING A TOWN COUNCIL 21ST AND THEN INTO NOVEMBER FOR THE SECOND READING AND THEN THIS WE WOULD YOU ISSUE REQUEST FOR PROPOSALS FROM A NUMBER OF DIFFERENT FINANCIAL INSTITUTIONS SO THEY WOULD HAVE COMPETITIVE RATES EXPECTATION IS WE SHOULD GET THIS FOR 4% FIXED RATE AND SO WE WOULD CERTAINLY SUGGEST THAT I THINK THIS PUTS TOWN COUNCIL IN A IN A BETTER POSITION TO PREPARE FOR THE FUTURE OKAY ONE OF THE THINGS THAT WE DO HAVE ON COUNCIL AND FINANCIAL ADVISORS HERE IN CASE YOU HAVE ANY QUESTIONS BUT OUR FINANCIAL ADVISORS ARE OUT FULLY THEIR ROLE IS TO HELP PRESENT THIS TO AS MANY BUYERS POTENTIAL BUYERS AS POSSIBLE TO GENERATE THAT COMPETITIVENESS TO GET THE BEST PRICE ON COUNCIL IS HERE TO MAKE SURE THAT WE ARE LEGALLY SUPPORTED IN ALL OUR ACTIONS AND SO THEY'RE HERE AS RESOURCES IN CASE YOU HAVE ANY QUESTIONS. OKAY.

THANK YOU, MR. GRAYSON. WE'LL START YOU SIR. THE STAFF POINT IN THE CASE THE TOTAL PROJECT IS EXPECTED COSTS APPROXIMATELY 50 MILLION. I KNOW THERE WAS A 47.5 MILLION. SO MY QUESTION IS DOES DOES THIS I KNOW WE NOW HAVE THE TWO BIDS IN FOR PHASE THREE. DOES THIS INCLUDE THE WORK FOR PHASE THREE OF THE BEACH NOURISHMENT PROJECT IT DOES AND THERE'S THERE'S A THERE'S A PIECE OF THE CONTRACTS THAT ARE VARIABLE AND DEPENDING ON HOW MUCH SAND IS NEEDED AND SO THERE WAS AN ENGINEERING PLAN FOR A CERTAIN AMOUNT OF SAND AND WHEN THEY FIND OUT THAT IT BE SLIGHTLY DIFFERENT THEN THAT'S MEASURED AND IT CAN RAISE THE PRICE SOMEWHAT AND. SO THE BORROWING WOULD BE 19 MILLION OF THE 50 MILLION WHICH IN MY MATH CAME OUT ABOUT 38% 38% BORROW AND 62% CASH.

YEAH, HE'S NODDING HEAD I GUESS I DIDN'T CARRY ON WITH MY MATH. OKAY.

AND SO WHAT IF WHAT IF THE ACTUAL WORK EXCEEDS THAT ESTIMATED 50 MILLION? DO WE HAVE OTHER CASH TO THROW IN THERE FUND BALANCE THERE IN BEACH PRESERVATION FEE FUND BALANCE AND OUR EXPECTATION AND HOPE IT'S NOT GOING TO BE TOO BIG AND SO THEY'RE THEY'RE DOING THAT WORK WE SPEAK AND SO THEY WERE MONITOR ING THAT EVERY DAY OKAY AND THAT WOULD STILL KEEP IN PLACE OUR MINIMUM RESERVE OF 20 MILLION IN THAT FUND.

AND SO ESSENTIALLY YOU'RE NOT SPENDING DOWN THE BEACH PRESERVATION FUND BALANCE TO ZERO IS THAT WE BORROW AND THEN THAT HELPS TO MAINTAIN THAT FUND BALANCE AND TOWN COUNCIL THEN IS IN TO RESPOND IF NEED BE AND THE OTHER QUESTION I HAVE AND I DON'T WANT TO HOLD US UP I WANT TO PROCEED WITH THIS IS IT DURING SOME THE BUDGET WORKSHOPS WE HAD A CHART HAVE NOT BEEN ABLE TO FIND THE CHART. I KNOW IT'S IN THERE SOMEWHERE AND THAT SHOWED THAT AND THIS IS A SEVEN YEAR TERM SO THIS CHART SHOWED THAT HERE'S THE FUND BALANCE NOW AND HERE'S THE AMOUNT OF WE'RE GOING TO PAY ON DEBT SERVICE.

I KNOW THE FIRST YEAR IS INTEREST ONLY BUT WHAT WE'D BE PAYING ON DEBT SERVICE FOR THE SEVEN YEAR TERM. SO YOU WOULD HAVE THE FUND BALANCE LAST BEACH YOU WOULD ADD THE BEACH PRESERVATION FEE SO EACH YEAR YOU'D HAVE A FUND AND YOU WOULD ADD THE FEES COLLECTED FOR THAT YEAR AND THEN YOU ADD SUBTRACT THE DEBT SERVICE AND THEN YOU WOULD SUBTRACT MINIMUM FUND BALANCE RESERVE OF 20 MILLION AND THAT WOULD GIVE YOU A NEW FUND BALANCE THE NEXT YEAR. AND THE REASON I'M ASKING ABOUT THIS IS BECAUSE THE IDEA IS THAT WE WOULD KEEP ALL THOSE GOING ALONG DURING THE SEVEN YEAR TIME PERIOD AND WHEN WE GET TO THE END OF THAT TIME PERIOD WE HAVE IN PLACE OUR $20 MILLION RESERVE POLICY THAT'S REQUIRED PLUS SOME MORE MONEY TO GO TOWARDS THE NEXT BEACH RENOURISHMENT.

AND AND SO WE'RE TRYING TO POSITION OURSELVES SO THAT WHETHER IT'S CASH WOULD BE BEST

[00:40:04]