Town finance director reports $3.8M FY2026 surplus; council weighs buying ladder fire trucks or leasing

Finance Director Mr. Byrd presented the Town of Hilton Head Island’s FY2026 year‑end numbers and reported a net favorable change in the general fund balance of about $3.8 million.

“Looking at the revenue upside and the expense upside, our net change in fund balance for the general fund is a surplus of $3,800,000,” Mr. Byrd said, adding that property tax and local accommodation taxes contributed to the favorability. Byrd described two primary options for the surplus: move it into the town’s reserves (which would place the reserve percentage “just under 55%,” the cap in the fund balance policy) or use the cash to purchase capital items identified in the CIP.

Council discussion focused on two ladder fire trucks included in the CIP that would cost about $4.5 million total. Mr. Byrd described the modeled lease terms: “We have a 10 year lease that’s modeled out — it’s about $1,100,000 in interest over that time… the annual debt payment is about $574,000.” Committee members raised concerns about paying interest on a lease and asked for a clearer analysis of how a cash purchase would affect the reserve policy and whether a budget amendment would be required in 2027.

Several councilmembers favored purchase over lease. One member summarized the near‑term expectation: staff should return with a lay‑out of “the pros and cons … so we can evaluate whether to use the surplus now or preserve it for reserves,” and to show the timing and fiscal impact of either approach.

Byrd said staff will bring updated figures and the detailed buy‑vs‑lease analysis to the October packet for committee review.