Hilton Head council adopts FY2026 budget amendments, authorizes bond proceeds and ramps up short‑term rental enforcement

The Hilton Head Island Town Council voted unanimously on March 10 to adopt an ordinance amending the fiscal‑year 2026 budget to roll forward prior‑year capital appropriations, add new capital projects and land purchases, record special‑revenue beach bond proceeds and to fund an expanded short‑term rental (STR) enforcement program.

Town Manager Mr. Orlando and Finance Director Mr. Bird presented the package, telling the council that the town recently received top credit ratings from Moody's, Standard & Poor's and Fitch tied to the town’s financial standing and to anticipated debt issuance. "We plan to issue $35 million in GO bonds Series 2026 to fund... the new fire‑rescue headquarters, emergency ops center, as well as potential CIP projects and land acquisition costs," Mr. Bird said during the presentation.

Why it matters: the ordinance records proceeds from multiple bond issuances and moves specific capital and land‑acquisition items into the FY2026 work plan, enabling immediate procurement and closeout of projects already underway and funding near‑term facilities work. It also creates a revenue stream dedicated to administering a broadened STR compliance program the council approved late last year.

Key details from the council packet and staff presentation include: 1) CIP carryforward adjustments of roughly $5.96 million for projects that began in FY2025; 2) new capital project requests including $3.2 million for North Point (the former Postal Service site) for demolition, design, drainage, paving and related work; 3) land acquisition authorizations totaling about $10.08 million for several parcels the town previously authorized to purchase; 4) special‑revenue bonds of $19 million to fund ongoing beach renourishment work with $277,838 in issuance costs paid from the beach preservation fee; and 5) planned general‑obligation bond proceeds of up to $35 million, which Mr. Bird said the town expects to close "within the next month."

Short‑term rental enforcement changes: the ordinance includes a fee schedule change to support STR enforcement. Staff proposed moving away from a flat $250 annual license to a $150 per‑bedroom annual permit fee and a one‑time $250 late fee for 2026 renewals submitted after May 15, 2026 (the deadline reverts to May 1 in 2027). Mr. Bird said the town currently licenses 7,368 STR units representing 20,207 bedrooms and that the per‑bedroom structure is intended to scale fees equitably by property size. The proposal also funds additional staff and equipment: Mr. Bird described a "net increase of four positions" that he said would result in "six new dedicated FTEs" when conversions are included, additional vehicles, radios and other equipment, and estimated annual personnel costs and one‑time equipment investments. He described the five‑figure and six‑figure line items to the council in detail.

Vote and next steps: After deliberation and questions from council members, a motion to adopt the budget amendment ordinance was made and seconded; the ordinance passed unanimously (transcript records the final vote as unanimous, presented as "So moved 7‑0"). Council directed staff to implement the amendments and to proceed with the capital purchases and contract actions authorized by the ordinance.

What remained unclear in the meeting: staff presented detailed dollar figures and position counts, but some transcript phrasing was ambiguous (for example, the presentation described both a "net increase of four positions" and "six new dedicated FTEs"). The transcript also uses shorthand voting notations such as "So moved 7‑0," which the council clerk confirmed as the final tally in the public vote. The ordinance text and attachments posted with the council packet provide the full line‑item breakdown and the formal effective date of the ordinance.

The council also recorded a range of sources for these projects — hospitality taxes, road‑usage fees, TIFF balances, grant funding and bond proceeds — and staff said all STR permit fees and late fees collected under the new schedule will be restricted to STR program operations. The budget amendment took effect upon adoption and staff will return with administrative steps for implementation where necessary.