Council approves FY27 spending plan, reworks funding for major projects
By Delayna Earley
The Island News
Beaufort City Council approved a $70.17 million budget Tuesday night, June 9, adopting a spending plan that keeps the city’s tax rate unchanged while advancing major infrastructure projects after officials discovered a tax increment financing district should have been dissolved nearly a decade ago.
The fiscal year 2027 budget maintains the city’s overall millage rate at 73.9 mills and includes approximately $24.4 million in capital projects. City Manager Scott Marshall described the budget as a balance between maintaining city services, investing in employees and public safety, and continuing long-term infrastructure projects without increasing taxes.
“The FY27 consolidated budget totals $70.17 million, including $24.4 million in capital projects,” Marshall told council. “This budget reflects a deliberate balance between addressing today’s needs and preparing for tomorrow’s opportunities.”
TIF discovery reshapes budget plans
One of the most significant developments discussed during the meeting involved the city’s TIF II district.
Marshall told council that after consulting with bond counsel, city staff learned the district should have been dissolved years ago, meaning those funds could no longer be used as a revenue source in the proposed budget.
“Following that meeting and through discussions with legal counsel about whether we could use our TIF II funds on projects that were outside the TIF district, we were advised that the TIF should have been dissolved nearly 10 years ago,” Marshall said. “This means we cannot use these funds.”
The discovery forced city officials to revisit portions of the spending plan and identify alternative funding sources for projects that had anticipated TIF support.
Marshall said the city has notified both Beaufort County and the Beaufort County School District that they may be entitled to receive the remaining TIF II funds. According to Marshall, approximately $1.8 million could be returned to the school district and about $800,000 could go to the county. The city has also asked both entities to allow Beaufort to retain the funds for future Waterfront Park construction efforts.
Waterfront Park, Duke Street remain priorities
Despite the loss of TIF funding, city leaders said they were able to preserve funding for several of Beaufort’s highest-profile projects.
Among them is continued work on the Henry C. Chambers Waterfront Park relieving platform, which remains one of the city’s most visible and closely watched capital projects. Funding included in the budget will allow planning and design work to continue as city leaders determine the future of the aging structure.
The project has drawn significant public interest in recent months. In May, the city’s Waterfront Advisory Committee recommended pursuing a replacement concept that would provide expanded public gathering space, improved accessibility, enhanced fishing opportunities and educational features while preserving the waterfront’s role as a centerpiece of downtown Beaufort.
The budget also advances the next phase of the Duke Street streetscape project, a long-discussed effort aimed at improving the 1600 block corridor.
“For years residents have expressed a desire to see meaningful improvements in the 1600 block of Duke Street,” Marshall said. “This budget enables a path to completion.”
To keep the project moving forward, the city assembled funding through a combination of American Rescue Plan Act funds, redevelopment reserves, utility participation and other capital funding sources after the loss of the TIF funding option.
Public safety investments continue
Public safety remained one of the largest priorities in the budget.
The spending plan includes funding for two additional patrol officer positions within the Beaufort Police Department through a federal Community Oriented Policing Services grant. A third position originally planned under the grant program was deferred until fiscal year 2028 as city officials worked to balance the budget.
The budget also funds replacement police vehicles, updated department weapons, a drug spectrometer, firefighter self-contained breathing apparatus equipment and other public safety needs.
Marshall said the city continues to prioritize emergency response capabilities while leveraging outside funding whenever possible.
Employee retention, housing assistance funded
City officials also highlighted investments aimed at retaining employees in a competitive labor market.
The budget includes a 2% cost-of-living adjustment for city employees and up to an additional 2% merit increase based on performance evaluations. The city will also absorb a 3% increase in health insurance costs rather than passing those expenses on to employees.
Marshall said city employees remain the organization’s most valuable asset and that competitive compensation is essential to maintaining service levels.
The budget also increases funding for the Housing Repair Assistance Program from $100,000 to $150,000. Through the city’s partnership with the Beaufort-Jasper Housing Trust, those funds can be leveraged with matching dollars to help qualifying homeowners make needed repairs and remain in their homes.
Difficult choices made to close funding gaps
Marshall acknowledged that not every request submitted during the budget process could be accommodated.
“Assembling this budget required difficult decisions and careful prioritization,” he said.
To close funding gaps and account for the loss of TIF funding, the city delayed hiring a third grant-funded police officer, left a deputy police chief position vacant for the fiscal year, kept a building inspector position unfilled, reduced consulting expenses associated with the city’s comprehensive plan update and renegotiated portions of a GIS contract. Several smaller discretionary purchases and programs were also removed or deferred.
The budget also establishes a dedicated debt service fund, consolidating debt payments that were previously spread across multiple funds. City officials said the change will improve transparency and provide a clearer picture of the city’s long-term debt obligations.
Residents question spending priorities
Several residents used the public comment period to raise concerns about city spending and accountability.
Port Royal resident Mare Deckard questioned the city’s continued financial support of the Beaufort County Economic Development Corporation, citing records she said showed the organization paid approximately $14,000 in rent on behalf of another organization between 2022 and 2025. Deckard urged council members to closely examine outside agency funding as they considered the budget.
Resident Graham Trask called for greater transparency regarding City Manager Scott Marshall’s performance evaluation and compensation package. Trask asked council to publicly release performance metrics used to evaluate the city manager and provide additional opportunities for public input on budget-related decisions.
Following discussion, council approved the budget on second and final reading. The spending plan takes effect July 1.
Delayna Earley, who joined The Island News in 2022, formerly worked as a photojournalist for The Island Packet/The Beaufort Gazette, as well as newspapers in Indiana and Virginia. She can be reached at delayna.theislandnews@gmail.com.