- Published on Friday, 29 June 2012 10:46
- Written by Super User
State Eliminates Funding For Kure Beach Nourishment
Great Lakes Dredge & Dock pumping sand onto sections of the beach in Kure Beach several years ago. Local leaders are now working to fill a funding shortfall for a similar project later this year.
By WILLARD KILLOUGH III
PLEASURE ISLAND - It's official, the North Carolina General Assembly has cut funding for a beach nourishment project in Kure Beach. The project is set to begin later this year.
Carolina Beach did receive state funding but leaders are now discussing how to fund future projects using methods such as tax districts.
Kure Beach Mayor Dean Lambeth explained last week their only option now is to ask New Hanover County to dip into a $37.5 million dollar fund designated for such projects in order to cover the $1.4 million dollar shortfall.
An emergency meeting will he held Wednesday June 27, at 10am at Town Hall to discuss Beach Re-nourishment issues before the Ports, Waterway and Beach Commission's meeting to be held on the same date at 3:30 pm.
The State House and Senate recently made changes to the two-year budget adopted last year. One of those changes eliminates state funding for the Kure Beach nourishment project set to begin later this year.
The Towns of Carolina Beach and Kure Beach traditionally receive beach nourishment projects at the same time.
The project is called, "Carolina Beach and vicinity." Both projects are combined into one to save money rather than two costly permits and having to bring in a contractor to perform the work at separate times.
The project is funded by federal, state and local funds. The requested amount from the state was $2.14 million. Currently the House and Senate budgets both allocate $1.184 million dollars; about half of the amount needed from the state to be combined with $4.4 million in federal funds for Carolina Beach and the rest of the $14 million dollar project coming from County Room Occupancy Taxes dedicated to beach nourishment projects.
Kure Beach Mayor Dean Lambeth said he spoke with state legislators and, "We thought this was all taken care of. Then we got a call late at night about the cut." He said one suggestion was to wait until next year for the Kure Beach portion of the project, but that would present obvious funding problems costing more in the long run.
He said one option is to call upon the County to make up the difference this time around and explore other options for the long term.
Carolina Beach would get 800,000 cubic yards of sand. Kure Beach would get 500,000. The project currently takes place every three years.
On Tuesday Mayor Lambeth said he would meet with Carolina Beach and County officials Wednesday morning to explore various options.
County Commissioner Rick Catlin said Tuesday the County and beach towns recently entered into an interlocal agreement where the county would pay 82.5% and the beach Towns would fund 17.5% of nourishment projects.
Catlin said that contingency plan was put in place in case issues with state and federal funding ever became reality. He said, "We just didn't expect it to happen this quickly. It's a bad situation. Unfortunately the General Assembly only recognized the federal money. We have been stepping up to the plate for years" with local funding and, "They should have recognized that."
Catlin said he's spoken with the Army Corp of Engineers to ask if they can find additional available funding. He said, "That's a long shot."
He said, "We've still got to write a check in July to get everything going" for the nourishment project set to take place later this year.
Lambeth said the option being discussed now is Kure Beach borrowing a the $1.4 million dollars from New Hanover County and paying that back at two percent interest over 15 years. He said that's estimated to cost $97,000 per year.
Lambeth said he didn't favor that option to pay for something that could be gone after one storm but ultimately it would be up to the entire Town Council to decide.
Owens told the Carolina Beach Town Council Tuesday June 26, "We have sufficient funds to do our project" and he has been discussing other options with Kure Beach.
The Town of Carolina Beach has received 15 nourishment projects since they began in 1964. Owens said, "The past two projects, one was $4.2 million, the other was $7.2 million."
He said, "Basically we also have an interlocal agreement between the beach towns and the county. If there is federal funding or state funding
in the amount of 17.5% then the room occupancy tax will pitch in the remaining 82.5%. If, let's say half of the 17.5% of a project, then the Town would pitch in the other half or if there is no federal or state funding, the Town would pitch in the 17.5%."
Owens said, "There is in this years budget, there is state funding for Carolina Beach... of $1.18 million and there's federal funding of $4.4 million. We have enough to do a Carolina Beach project this year without having to come out of pocket." The real cost will be known once the Army Corp of Engineers accepts bids from contractors later this year.
They are also hoping the federal government will not end their project-cooperation agreement for federal funding in 2014 and continue funding in the future.
During Tuesday's meeting Owens explained Council may want to consider saving money to fund their 17.5% in the future, in case state and federal funding was eliminated or fell short.
Owens said one option would be increasing the property tax rate by 2.5 cent per $100 of property value to cover the estimated $408,000 needed per year to cover projects every three years.
Another option calls for creating municipal tax districts; taxing certain parts of Town differently than others depending on their proximity to the beachfront.
Councilman Steve Shuttleworth asked if the Town could look at adjusting property taxes, sales taxes and room occupancy taxes charged to hotels, motels and vacation rentals to gain increased funding.
Owens said the Council could talk to state representatives about an additional local sales tax or adjusting the existing room occupancy tax to generate additional funding.
Shuttleworth said he favored looking at those three options rather than solely focusing on the Town's property tax revenues.
Councilman Bob Lewis said he favored looking at sales tax revenues.
Councilman Lonnie Lashley said, "I would really like to focus on our tourists. We should be able to get more revenue from our tourists who come to this beach for one reason and that is the beach. I think that is the number one attraction. Personally, I think we can get more revenue through our parking program or some other creative ways."
Lashley said looking at raising rates at Freeman Park and eliminating free parking in Town could generate additional funds. For Freeman Park he said, "Let's do away with our $60 ticket and have a $100 ticket for everyone" for annual passes to drive into the park on the beach.
He said, "Let's get the tourist to pay as much as we can for the beach maintenance. I'm not saying the other ways are not bad but that's one way we can put money into that fund."
Lashley said, "We could easily come up with $400,000 from reserves right now."
Mayor Ray Rothrock explained dredging of the Carolina Beach Inlet is another important issue that is equally important as beach nourishment for the local economy.
Rothrock said, "Right now the Army Corp has the remainder of $500,000 that came up in February from emergency funds. They've probably just about spent most of it because they spent $139,000 and went back in there just recently completing last Friday to dredge the inlet."
He said, "That $500,000 that was given to the Corp is just about gone. The other money the state and local municipalities have is the $450,000. We the Town of Carolina Beach put $30,000 in there for this year. And it's been suggested that we roll that over" to the following year.
Rothrock said at least one million dollars should be set aside each year to fund inlet maintenance using funds from the town, state and county.
Owens said the state is currently looking at options to generate funding through fishing licenses, boat registration fees and other avenues. He said, "It seems to be catching some traction with our state representatives because I talked to them and they threw that out there. They said beach nourishment to."
Rothrock said last week he attended a legislative breakfast in Raleigh where options were presented such as a one-cent tax on every gallon of gas sold for boats in the 20 coastal counties. He said, "Maybe add $10 to fishing license and/or boat licenses."
He said legislators would not commit to anything because their short-session this year ends at the end of the month and perhaps next year they can achieve new legislation. He said, "We have their attention, but no commitment."
Owens said one issue that requires attention is, "The state will not match any beach nourishment project that doesn't have federal funding and that was kind of witnessed with Kure Beach."
He said state legislators are aware that could be a problem in the future should federal funding not continue for local beach nourishment projects.
Council member Sarah Friede said it would be important to identify the number of people who use area beaches from around the state.
Lashley said local revenues are something the Council has a higher level of control over while depending on the state is not as certain.
Shuttleworth said the Council will have to look at estimates on various revenue generating options before they can make a decision.
The Council discussed requesting a full accounting of the local room occupancy tax fund. A large part of that tax goes to fund a county entity to promote New Hanover
County. If the beach nourishment fund has $37.5 million, the Council questioned how much funding the Cape Fear Coast Convention and Visitors Bureau might have in a reserve account.
Rothrock recommended asking the legislature to approve a sales tax that stays in Carolina Beach to fund such projects.
One downside of saving money at the local level is showing state and federal officials local tax funds can be levied to pay the bills.
On Tuesday June 26, two bills passed in the state legislature that may pave the way for more reliable funding for beach nourishment and inlet dredging.
Senate Bill 821 sponsored by Senator Harry Brown, R-Onslow, directs the Division of Marine Fisheries, Department of Environment and Natural Resources, Wildlife Resources Commission and the Department of Transportation to jointly study the fees associated with the issuance of coastal fishing licenses and the numbering and titling of vessels.
That bill would study potential revenue sources from fishing licenses, boat registration and the state gas tax to fund maintenance dredging of state inlets.
That study would be completed and returned to the Legislative Research Commission's Committee by September 1.
House Bill 1181, sponsored by House Representative Pat McElraft, R-Carteret, sets up a Revenue Laws Study Committee to study whether municipalities should have the authority to levy a local option sales tax for beach nourishment projects.