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6 coastal SC towns and cities will get millions less than expected in recovery funds

old village clean up.jpg (copy)

Lenton Sharpe with the town of Mount Pleasant blows debris from a storm drain in the Old Village during flooding in 2020. The town expected as much as $34.2 million in federal American Rescue Act money, and thought it could help fund drainage improvements, but instead will received $7.4 million. File/Grace Beahm Alford/Staff

A half-dozen towns and cities along the South Carolina coast have suddenly learned they'll collectively receive $67.9 million less than they first expected from the federal government's latest COVID relief package.  

In some cases, ambitious plans were already being developed for the windfall of federal dollars in the so-named American Rescue Plan to address flooding, improve roads and reward front-line workers with bonuses.

But some towns and cities are getting less than a quarter of the money they anticipated.

The funds are part of $130.2 billion in federal aid to counties and local governments. The problem is early estimates of the amounts proved wildly inaccurate for Bluffton, Conway, Mount Pleasant, Myrtle Beach, North Charleston and North Myrtle Beach.

In fact, all of the estimates for 17 metropolitan communities in South Carolina proved wrong, but in most cases the difference was less than 15 percent. Some cities received more than expected. The six that received far less than expected were all towns and cities that were switched from one pool of funding to another between release of the first estimates from the House Committee on Oversight and Reform and the final numbers issued from the Treasury Department.

The National League of Cities and the Municipal Association of South Carolina, which each shared the original estimates, said they are still trying to get details about the final calculations. Scott Slatton at MASC said they "have so far been frustrated in getting answers.”

Mount Pleasant and Bluffton saw nearly 80 percent reductions — a $26.8 million decrease in Mount Pleasant's case.

North Myrtle Beach saw more than two-thirds of its expected money vanish; Conway, more than half, and Myrtle Beach 39 percent.

North Charleston was first told to expect over $43 million and will instead get $24.3 million. Mayor Keith Summey said the good news is they weren't counting on it.

“Whenever the federal government says they are sending something, I don’t count it until it’s here," he said. “I understand that the people that announced we were getting $43 million were not the people who eventually made the decisions."

The six municipalities with dramatic changes were among 142 nationwide that were treated as "non-metropolitan cities" in the original estimates, but were not when the Treasury Department calculated the final amounts. That reclassification changed both the pool of money the municipalities would be drawing from and the funding formula to one that considers poverty, population, the age of housing and other factors.

Towns and cities are counted as "metropolitan" if they have at least 50,000 residents or are principal cities in their metropolitan areas, under the Treasury Department rules. So, the designated Myrtle Beach-Conway-North Myrtle Beach metropolitan statistical area makes all three of those cities count as metropolitan, despite their size. 

As non-metropolitan areas, they would have received a population-based share of the $435 million South Carolina is expected to receive for smaller towns and cities known as "non-entitlement" communities. North Charleston and Mount Pleasant, the state's third- and fourth-largest cities, would have particularly benefitted, if that had proved true.

Instead, Mount Pleasant will receive less money than Sumter, and less than half as much as Spartanburg.

"It's not over yet," said Eric DeMoura, Mount Pleasant's administrator. "We're hoping the state will make us whole, or at least help."

"I've been on the phone with other communities, trying to develop a coalition," he said. “The mayor has a letter in to the governor requesting a make-whole provision. Myrtle Beach is doing the same thing."

DeMoura noted that in North Carolina, the governor's budget for American Rescue Plan funding calls for giving $24 million of the state's share to the towns of Apex and Huntersville, to match the original estimates of what those towns would receive.

DeMoura said Mount Pleasant had hoped to use the federal money to address expensive flooding problems and road projects.

South Carolina's metropolitan governments have already received half of the federal money they will receive, with the rest to come in about a year. Smaller communities are awaiting final numbers from the Treasury Department.

Myrtle Beach — which expected to get $13 million and is instead getting $7.9 million — did not spend the projected money but did make plans. One plan the city expects to honor despite the lower funding is to give front-line workers and city employees who worked throughout the pandemic a bonus.

Spokesman Mark Kruea said a one-time 3 percent bonus would use up to $1.8 million of the American Rescue Plan funding. The rest, he said, will help the city get back on its feet financially.

"Our goal with this money is to try to recover the ground that we lost over the last 15 months to put the city in a position so that when the next disaster or emergency comes along, we're able to withstand it as we were the last time," he said.

City Manager Jonathan “Fox” Simons said Myrtle Beach is grateful for the money, as they never had it in the first place — but the question of why still lingers.

“When you get told and see what you're supposed to get … and then it completely flips on you without any explanation, you’ve got to ask why,” Simons said.

North Myrtle Beach Finance Director Randy Wright said he's also trying to make sense of what happened.

"I went back and looked at all the different municipalities that got money and I have no rhyme or reason of any of them," Wright said.

Though the money is less than expected, Wright said North Myrtle Beach did not spend any of the money and is grateful for the $1.9 million, although it's less than a third of the original estimate. 

Conway Administrator Adam Emrick said the city would have preferred the $9.7 million initially estimated to the less than $4.4 million, and like other municipalities Conway is looking for answers.

"We are hoping that additional monies are forthcoming and absent that, hopeful for a better explanation for the difference,” Emrick said. 

Reach David Slade at 843-937-5552. Follow him on Twitter @DSladeNews.

David Slade is a senior Post and Courier reporter. His work has been honored nationally by Society of Professional Journalists, American Society of Newspaper Editors, Scripps foundation and others. Reach him at 843-937-5552 or dslade@postandcourier.com

Alex Brizee covers Myrtle Beach and Horry County government. A Florida native, Alex has lived all over the United States and graduated from college at the University of Idaho. In her free time, Alex loves Pad Thai, cuddling with her dog and strong coffee.

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