COVID-19 caused Horry County to tighten its belt, but projects are still on track
Horry County will more than double the money it keeps in bank for a rainy day, in case a financial wallop like the novel coronavirus pandemic strikes again.
That precautionary measure could come just in the nick of time as county officials see the economic fallout due to COVID-19 stretch into 2021. Even though Horry County hasn’t yet had to dip into existing reserves — thanks to cost-cutting measures, a hiring freeze on nonessential positions and a pause on cash-funded capital projects — some officials are anxious for the future.
“I’m more concerned about 2021 than I am about 2020 just because of the potential economic downturn that could occur,” said Barry Spivey, the county’s assistant administrator for administration on Tuesday. Comparing the economic fallout from the coronavirus to 2008’s Great Recession, Spivey said it could take the county some time before its finances are back to normal.
“The first year was down, the second year was down, it took the third year to get back to where we started,” he said. “So it is a long term event.”
Horry County will make it to 2021 with its financial health largely unscathed, county officials said. Several large capital projects — some funded before the pandemic or with dedicated revenue streams — are still on track. While the county experienced several significant reductions in revenues, including reductions in some fee collections, cuts to interest rates by the Federal Reserve, and decreases in some state funding, county officials were able to belt tighten by pausing hiring for nonessential positions, temporarily stopping smaller cash-funded capital projects, like some non-critical IT upgrades, and limiting employee travel.
One of the biggest hits to county revenues came from the mere fact that the county building in Conway was forced to close to visitors for a month. That meant that engineers and builders couldn’t access county land records, and property sales couldn’t be processed, both of which bring in millions in revenue each year. Similarly, courts were closed, meaning the county wasn’t able to collect the fines and fees.
Fearing a continued loss of revenue, County Councilors on the Administration Committee voted to approve a measure to increase funds in the general, fire, recreation, waste management and recycling and stormwater funds from from 2% to 5% in reserve accounts.
“Certainly in light of where we are with COVID-19, we have recognized that from a financial perspective we are at more risk today than I think we realize we have ever been in,” Spivey said. “We recognize that there’s some opportunities for us to consider perhaps some changes to our policies.”
Horry County structures its reserve funds like highly-regulated bank accounts that county administrators can use in case of emergencies. In order to use the money in a reserve fund, three-quarters of council must vote in favor and then administrators must refill the money they’ve used. If administrators use 25% of a fund or less, they have one year to refill the account. If they use 50% or less, they have two years to refill the account, three years to refill up to 75% and four years to refill 75% or more.
Commending Spivey and others in the administration for not cutting services, positions or dipping into existing reserves, County Councilman Johnny Vaught, who represents parts of Conway and Carolina Forest, sounded an optimistic tone on county finances.
“Horry County is one of a few counties in this state that did not curtail services to its citizens. We found new ways, we found new roads, if you will, to deliver our services to our citizens,” he said. “We didn’t have to lay off people, we worked with what we had, we didn’t have to dip into our reserves. We took care of business.”
Major capital projects, like the RIDE III program, the new Emergency Management Center and a new fire station in Longs, were spared the brunt of virus’ economic impact. Jason Thompson, the program manager for the Ride Improvement & Development Effort, said the pandemic caused tax collection for the road and transportation projects to slow for two months, but that the program will still met its overall projections. RIDE III, through a one cent sales tax, aims to raise $592 million between 2017 and 2015 for a slate of major transportation projects in the county.
“Barring further departures, I don’t know and you don’t know what’s happening tomorrow, but if we continue on the same trend now, we will meet our budget protection of $592 million,” Thompson said. He added that the closure of government buildings caused minor delays in the planning of some projects, too. “I can tell you we have been impacted it’s just, was it years? Probably not. Was it days? Absolutely. So it’s somewhere happy in the medium.”
The new Emergency Management Center and Longs fire station are still on track, despite the pandemic, in part because they were funded by a bond that was sold before any shutdowns occurred. The county aims to have a contractor begin construction on the Longs fire station in December.
Spivey, for his part, is watching the real estate market closely— an indicator of future revenue for the area. For now, he says the county is in a good spot.
“Cautiously optimistic is the term I would use,” he said. “The real estate market has performed well. It’s a lot of variables but we’re very fortunate, blessed at the moment that it has performed well for us and is stable.”
This story was originally published September 23, 2020 at 4:39 PM with the headline "COVID-19 caused Horry County to tighten its belt, but projects are still on track."
