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City of Beaufort under ‘financial strain’ due to the loss of revenue

in Coronavirus/News by

By Mindy Lucas

The City of Beaufort will be under a considerable financial strain for the next six to nine months after the recent loss of tax revenue and other sources of funding and will have to tighten its belt for the remainder of the year, officials said recently.

At Beaufort’s most recent city council meeting held Tuesday, April 14, City Manager Bill Prokop estimated the lost revenue would be between $1.8 million to $2 million for the fiscal year ending June 30.

The lost revenue comes from business license taxes, accommodations taxes, hospitality taxes, personal property permits and various other sources, Prokop said at the meeting.

Some sources such as accommodations and hospitality taxes that “pass through” to the city when visitors stay or purchase goods in Beaufort are permanently lost now that many of those businesses are closed, while others such business license taxes or personal property permits will come in at a lower rate or slower as some are deferred.

The city is also entering what would normally be its “lean months” in terms of revenue collection, or July through December, said Prokop.

“Cash is going to be very tight for us,” he said, at the meeting.

As a result, the city has taken steps to curtail spending starting with a hiring freeze which will affect such open positions as police officers. The city will fill two positions it just hired for, Prokop said by phone recently, but will have to freeze five more it was trying to fill.

In addition, the city will cut back on operating costs, put capital projects on hold, with the exception of stormwater projects, and will halt overnight travel and training, except for police or fire academy training.

Asked if the city expects layoffs or furloughs of any kind this year Prokop said, “absolutely not”

“We are not going to have to do that with the measures we’re taking,” he said.

While the measures will save the city an estimated $400,000-$475,000 for the current budget year, city services will be stretched to the limit and the impacts are expected to be felt in 2021 as well as business taxes, as just one example, are based on how businesses did the previous year.

“So people who had a bad year this year, will be struggling into next year,” he said.

Another factor that could further exacerbate the city’s economic situation are increased costs on everything from stormwater and facilities maintenance costs, to landscaping and street sweeping contracts to increases in insurance premiums.

The city was recently hit with a 40 percent increase in the city’s tort insurance alone, Prokop said at the meeting.

Meanwhile, officials with both federal and state governments have said there will money to help municipalities that are hurting.

“But when and how much is unclear,” Prokop said.

“It took us three appeals and almost four years to get our money from Hurricane Matthew,” he reminded council members at the meeting.

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