City of Myrtle Beach pushing forward after allocated less funding due to federal misclassification

Published: Jun. 3, 2021 at 9:28 PM EDT
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MYRTLE BEACH, S.C. (WMBF) - It’s not exactly what the city had hoped for: $5 million less than first estimated.

The City of Myrtle Beach is pressing forward with a more certain $7.9 million and more information on what led to the strange “reduction” in the American Rescue Plan’s Coronavirus State and Local Fiscal Recovery Funds.

City leaders are confirming incorrect estimates were made at the federal level but they’re grateful for the funding they believe they can count on.

“It was incorrect. It was a mistake. Fortunately, we never spent the money, so no harm, no foul,” Myrtle Beach city manager Fox Simons said.

PREVIOUS COVERAGE | Allocation methods still hazy as some Horry County cities receive federal rescue funding

Simons updated councilmembers Thursday on what happened with the discrepancy between the original estimates and the U.S. Department of Treasury’s final word.

Last month, the city found out that it would receive $7.9 million after being under the impression it would get $12.9 million instead.

Though small, Simons said Myrtle Beach is considered a metropolitan city by the Community Development Block Grant Program (CDBG). This means the city wouldn’t fall underneath the designation of a non-entitlement unit of local government.

A NEU’s allocation is solely based on population - and thus, amounts to a much larger allocation.

In the past, a Department of Treasury official explained to WMBF News that some organizations made simplifying assumptions about the estimates coming from the American Rescue Plan funds.

Those assumptions “did not implement the full statutory requirements which are difficult to take into account when developing early estimates,” according to that official.

Simons said they found out that the Congressional Research Service didn’t pick up on that designation in the statute. That lead to miscalculations that equated to huge drops in estimated help.

“There’s a lot of cities in South Carolina that experienced that same situation,” he said.

Erica Wright, who advocates for cities and towns through the Municipal Association of South Carolina, said the U.S. Department of Treasury discussed this classification during a call Thursday. It included 11 other states who had cities that saw significant changes in their final allocations as well.

Wright said they look forward to continued future talks with the Department.

“We’re very thankful and grateful for what we received and we’re going to do great things in the community with it,” said Simons.

The City of Myrtle Beach wants part of their allocated $7.9 million to go towards a bonus for full-time staff.

Simons said they’re recommending full-time employees hired before the end of 2020 would receive 3%. Employees hired this year between January 1 and March 31 would receive 1.5%.

He also says a cut-off had to happen somewhere, so those hires newly employed by the city within the last two months are not included.

“Our employees did a fantastic job through COVID. All the curveballs, the hurdles - they deserve to be recognized,” he said.

The rest of the funding will go towards lost revenue due to the pandemic.

The one-time bonus is planned to be on the city council’s agenda next week. If approved, it could show up in employees’ paychecks by the end of June.

Simons said they hadn’t received the first tranche of funding yet but they’re getting it soon.

There’s another pot of money in the American Rescue Fund that the city wants to pursue, which could help with the area’s larger, longer-term infrastructure projects.

“The next thing is to focus on those other projects and try to position ourselves in the best way we can to try to compete for those other funding sources,” said Simons.

Projects include a $30.1 million deepwater ocean outfall, boardwalk replacement for $4.6 million and a downtown water/stormwater project for $8.9 million.

“We’re really going to try to focus on the 8.9 because it is allowed. Stormwater infrastructure is allowed in American Rescue Plan, and there’s a new bill pending in Congress that we’re also going to focus on,” Simons said.

He said they spoke with their lobbyists and will hold a meeting with folks from Columbia this summer.

“It’s money that’s not earmarked for the City of Myrtle Beach,” Simons explained. “There’s a lot of cities in the state and a lot of cities in the country that are going to be competing for those resources. So we need to be able to position ourselves in a way to - so we can compete for those funds so we can secure them.”

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