These projects have been proposed by the Town of Hilton Head Island to improve stormwater drainage:
• Replace pipe along Arrow Road from Target Road to Crossings Park to stem flooding
• Improve the pump in Sea Pines
• Replace pipe in Port Royal Plantation near Grasslawn Avenue
• Upgrade culverts in Port Royal and at Fish Haul Creek
• Dredge and upgrade culvert to pond in Hilton Head Plantation
• Upgrade weir and inlet in Palmetto Hall
• Upgrade drainage ditches in Jarvis Creek Park and near Gumtree Road and Bay Pines Point Comfort
• Improve the pump generator in Wexford Plantation
• Replace pipe in Shipyard Plantation
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Hilton Head Island officials plan to borrow against future stormwater fees to address rising costs for emergency pipe repairs and expanding drainage service in the town's gated communities.
Town Council voted 6-1 on Wednesday, with George Williams Jr. opposed, on the first reading of an ordinance to issue no more than $25 million in bonds to pay for stormwater projects across the island during the next several years. The council will hold a final vote Nov. 17.
The town plans to seek a lower interest rate and refinance about $14 million in outstanding debt from bonds issued in 2002. The interest rates for the old bonds average 4.75 percent. Current rates average 3.3 percent.
Susan Simmons, town finance director, said Hilton Head will save about $125,000 annually by refinancing the bonds. That will be combined with $500,000 budgeted annually to repay $7.5 million to $11 million in new bonds for other projects.
"With interest rates so low, we decided it was better to finance more now and have money to pay for stormwater projects for a longer period of time," Simmons said.
The 2002 bonds would be repaid in 2026, as originally planned. The new bonds would be repaid over 25 years, Simmons said.
The town plans to spend about $1.75 million a year paying off the old and new debt -- half the $3.5 million in annual revenue it plans to collect from stormwater fees.
Hilton Head increased its annual stormwater fee earlier this year from about $83 to $109 -- a rate hike Williams also opposed. The increase is necessary in part because the town will manage drainage systems in Indigo Run, in addition to those it already manages in Sea Pines, Shipyard Plantation, Port Royal Plantation and Hilton Head Plantation, town officials say.
An agreement to provide service to Palmetto Hall is pending. The town also has been approached by Palmetto Dunes, Wexford Plantation and Sea Pines to expand service.
Previously, residents in the gated communities paid stormwater fees to the town and also paid assessments to property owners associations that were responsible for any work within those neighborhoods.
By adding the communities to its system, the town has amassed five to 10 times as many pipes, pumps, culverts and other drainage works as it once had, said Scott Liggett, town director of public projects and facilities.
"There is a significant area we are now responsible for, and all of that costs money," Liggett said.
Most of those pipes and other stormwater infrastructure are nearing the end of their usefulness, Liggett said.
Williams said he's concerned the town is obligating itself to providing service to gated communities without a clear understanding of long-term cash-flow needs and future demands.
"What will break or fail when? To identify that with certainty is very difficult," Liggett said. "We do have a very good inventory of what the systems in the gated communities involved. ... We have some understanding of what we are embarking on. It's not like we're going into this blindly."