- Published on Sunday, 23 September 2012 00:12
- Written by Super User
The Carolina Beach Town Council voted September 11, to send a letter to state legislators asking for options to generate additional revenues to fund future beach nourishment projects. Some ideas mentioned during the meeting include property taxes, sales taxes, hotel room taxes and raising fees for Freeman Park.
By WILLARD KILLOUGH III
CAROLINA BEACH - The Town of Carolina Beach may have to start banking away as much as $650,000 a year in order to fund periodic beach nourishment projects. How to generate that revenue is the expensive question.
The Town Council discussed the issue at their September 11, meeting. Town Manager Tim Owens said, "At this point there is an interlocal agreement between all of the beach towns and the county that says in the event that there is no federal or state funding the Room Occupancy Tax (ROT) funds would pick up 82.5% of the project and the Town would pick up 17.5% of the project."
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 on mobilization and permitting costs.
Projects have historically been paid for by federal, state and local funds. Locally the County and the three beach Town’s of Carolina Beach, Kure Beach and Wrightsville Beach have a Room Occupancy Tax on all hotels, motels and vacation rentals. Over the years that fund has grown to $40,165,475 with another $711,189.00 generated from a room tax in the unincorporated area of the county.
The United States Congress has authorized a beach nourishment project for the Town of Carolina Beach. It is estimated that this project will cost approximately $7,700,000. Congress has authorized the Federal Government to spend $4,400,000 on this project. The balance of $3,300,000 will be shared between the State of North Carolina and New Hanover County. New Hanover County's portion will be approximately $2,120,000 and will be paid from the Room Occupancy Tax (ROT) funds and the State of North Carolina's share will be $1,180,000. The existing permit for this project expires in 2014.
The Federal government has authorized a beach nourishment project for the Town of Kure Beach; however, no funding is being provided from either the Federal or state governments. Therefore, the entire cost of this project would come from local funds. The Town of Carolina Breach has agreed to transfer the state's portion of the Carolina Beach nourishment of $1,180,000 to Kure Beach if the nourishment project at Kure Beach proceeds. The estimated cost of this project is $6,400,000. The existing permit for this project expires in 2043.
Part of the Carolina Beach portion of the project is done under the Kure Beach project.
In order to reduce the overall costs, the United States Army Corp of Engineers plans to bid both projects as one. If these projects are bid separately then there could be increased mobilization costs.
Earlier this month the County Board of Commissioners agreed to pay for unexpected costs above the original project amount. A new arrangement will require that the county sign a Memorandum of Agreement with the United States Army Corp of Engineers which will expose the county to additional liability. Because of changes in the contract language, the State of North Carolina is not willing to continue to be the signatory on a Memorandum of Agreement.
Owens also informed Council the rock-wall on the northern end of the beach along Carolina Beach Avenue North must be maintained by the Town. He said, "Basically I found out recently it's a Town responsibility to maintain that revetment. I think we have in the past done that. The Army Corp of Engineers installed it" in the 1970's and he's trying to figure out the details of that requirement, "trying to do it in concert with this project as well."
Since the time the rock-wall was installed, the State adopted coastal regulations prohibiting hardened structures along the coast.
Owens said he's approached the Division of Coastal Management who expressed concern because it's not a permitted structure under current regulations and, "They even had concern about maintenance of it."
Owens said currently the Town has hired a firm to research a 40-year cost projection to forecast the amount of money the Town will need to fund future nourishment projects.
He said, "Around about $500,000 is what the Town would have to put aside" to guarantee 66% coverage for the beach. He said the Kure Beach portion of the Carolina Beach project would increase that amount by roughly $150,000. He said, "You're looking anywhere from $635,000 to $650,000" a year.
Those numbers depend on how much federal and state funding both Town's receive for future projects.
Owens said an increase in the ROT tax of 1% would generate around $230,000. He said some legislators have cautioned against seeking to change the ROT rates because the Convention and Visitors Bureau may seek to get a larger share of those revenues for tourism promotion. Any such change must be done by the State Legislature.
Councilman Steve Shuttleworth said perhaps asking legislators to consider a similar separate tax for beach nourishment alone.
Owens said currently there's a bill in the legislature to study the idea of permitting a municipality to levy an additional
sales tax for such projects. He's not aware of the status of that study.
Owens said property taxes are decided by the Council and could serve as a source of revenue for the entire Town or owners in specific areas.
Shuttleworth, said it's a complicated issue to pursue an additional ROT tax or sales tax but, "Just taking the easy way out and throwing it on the backs of the property taxes as the only solution is not" an ideal solution.
An additional county 1% sales tax could generate $600,000. Raising the property tax rate by three cent per $100 of property valuation could generate $490,000. Owens said that's the easiest option to utilize.
Another option is raising taxes higher in municipal service districts tiered higher for oceanfront properties and less for landward districts in Town.
Councilman Lonnie Lashley said raising vehicle access passes for Freeman Park to $100 for everyone across the board would generate nearly $300,000 a year.
Mayor Ray Rothrock cautioned against that option because it may attract the attention of property owners in the area and the County who may want some of those revenues.
Shuttleworth said he doesn't support putting the entire burden on the property tax rate without seriously exploring other revenue options.
The Council voted unanimously to send a letter to state legislators to explore "other revenue streams available."