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Carolina Beach Council Discusses Raising Rates At Freeman Park

The Carolina Beach Town Council recently discussed raising rates for access to Freeman Park to help fund future beach nourishment projects.

Managing Editor

CAROLINA BEACH - Earlier this month the Carolina Beach Town Council discussed ways to fund future beach nourishment projects in the absence of long-standing federal and state funding. It's estimated the Town will need to put away $650,000 a year to ensure funding is available. Several options were discussed including property and sales tax increases.
Councilman Lonnie Lashley is eyeing an increase for Freeman Park passes. 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 to save money.
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.
Owens said he was recently informed the Town must maintain a rock wall installed on the northern end of the beach decades ago as part of an agreement with the Army Corp of Engineers. He said he wasn't aware of that requirement, but is researching the costs. Subsequent state regulations prohibit such structures. Owens said state officials have expressed concern including maintenance of the rock wall.
Currently the Town has hired a firm to research a 40-year cost projection to forecast the funding needed for future nourishment projects.
Owens said the Town would need to put aside around $500,000 to ensure 66% coverage of the beach. A portion of the beach is nourished under the Kure Beach portion of the project. That would increase Carolina Beach's potential future cost to around $650,000 a year to fund nourishment projects every few years. 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.
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.
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.
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."
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.
At the Council's September 18, meeting Lashley explained, "I think it's one way to have money for other things besides beach maintenance and inlet dredging but as a Council person we have to look for revenue one way or the other. Be creative one way or eliminate expenses."
Shuttleworth repeated his comment about placing the entire burden taxpayers through property tax increases. He said the Town must look at other solutions or a combination of funding sources including additional sales and room occupancy taxes and possibly increased fees for Freeman Park.
Shuttleworth said, "What you are showing is $278,000 is potentially the new revenue that would be picked up from the passes that are sold" if they raised the annual fee to $100 at any time during the year.
Currently the cost of the season permit for vehicle access to Freeman Park is $60.00 from January 1 to March 31.  After March 31, the cost of the annual permit is $100.
Owens said he will look at Lashley's proposal.
Shuttleworth said it could potentially put a "big bite" in that $650,000 a year the Town may have to reserve for future nourishment projects.
Owens said he was planning on attending a legislative committee meeting in October where legislators are examining the possibility of Town's charging an additional sales tax for such expenses.
Based on numbers presented to the Council, 777 annual passes were sold to Carolina Beach residents last year. That equates to 11% of all annual passes sold.
Lashley noted that even at $100 for an annual pass, it was a bargain for vehicle owners wishing to use such a unique recreational area.
Freeman Park, located beyond the end of Canal Drive on the Northern End of Pleasure Island, is largely outside of the Town's jurisdiction. They have authority to manage the area as a park. That was granted to them by the New Hanover County Board of Commissioners some years ago. There is a fee charged for vehicle access to drive on the beachfront within the park. The Town, by it's own admission, doesn't charge people to walk into the park. They can only charge for four-wheel drive vehicle access. Permit applications are not required for daily passes. Daily passes may be purchased for $20.00 at the entrance of Freeman Park.  Weekend passes are available at $40 for 2 days and $50 for 3 days. Credit cards are accepted.
 The Council took no action on the issue and will continue researching their options for funding future beach nourishment projects.