Isle of Palms finance director forecasts $33M in revenue, council asks staff to investigate an $87M lodging-revenue reconciliation gap

Finance staff presented a preliminary year‑end look for the fiscal year ending June 30, 2026, reporting year‑to‑date collections of roughly $28 million and a forecast that total revenue will land near $33 million.

"As of June 30, we have 28,000,000 collected ... We are forecasting that that will come in at about $33,000,000," Finance staff Deborah said while reviewing fund‑level results and departmental variances.

Deborah cited department‑level details — business licenses below budget, building permits buoyed by a large renovation project, parking and court‑fee timing, and expense variances tied to overtime, staffing, and some contractor lines — and noted that several grant and capital items will shift across fiscal years.

During Q&A, a council member queried the reconciliation between reported short‑term rental gross revenue and the city’s municipal accommodations and business‑license receipts. The member summarized the issue as an "$87,000,000 reconciling item between the implied revenue being generated that we're collecting a tax on versus what's being reported," and urged staff to pursue a retroactive reconciliation and process improvements to detect reporting anomalies earlier.

Deborah acknowledged there are timing and reporting complexities — including instances where a company misreported revenue across municipalities and a recent reclassification of 119 licenses — and said staff will continue the work to reconcile schedules and ledger entries. She asked for more time to refine the reconciliations and said updated June numbers would be provided at the next meeting.

Council directed staff to continue investigating the differences and to report back with reconciled figures and proposed improvements to detection and auditing processes.