11/8/19: TOWN COUNCIL MEETING: OUTTEN SPEAKS ABOUT COUNTY’S BEACH NOURISHMENT FUND; AUDITOR REPORTS TOWN’S FINANCES ‘STRONG’; ZTA 19-02 PASSES, AS RECOMMENDED (and more)

beachnourishmentkdh
This photo was taken during Kill Devil Hills’ 2017 beach nourishment project.

[PLEASE NOTE: This article has been updated since 5 p.m. Friday.]

Dare County Manager and Attorney Robert (“Bobby”) Outten gave the Town Council a course in what he called “Beach Nourishment 101 for Dare County” at its Wednesday meeting, tracing the history of the county’s involvement in local beach-town nourishment projects and clarifying how the county manages its financial contribution.

Mr. Outten’s talk was an expanded version of one that he gave the Town Council Jan. 3, 2017, when it was considering the Pelican Watch nourishment project. This time Robert Woodard, chairman of the Dare County Board of Commissioners, accompanied Mr. Outten, and spoke briefly about the county’s commitment to “nourishing our beaches.”

The decline of local beaches, the Chairman said, is something “we cannot, under any circumstances, afford.”

“Our economic engine is beach nourishment,” he said.

(To listen to Mr. Outten’s 2017 talk, fast-forward about an hour into the meeting video at https://www.youtube.com/watch?v=4UCV5oynwrU&feature=youtu.be.)

COUNTY FUNDING AND TOWN TAXATION

Dare County maintains a beach nourishment fund that annually receives one-third of the occupancy taxes it collects. The occupancy tax, which is 6 percent, is applied to gross receipts derived from the rental of rooms, hotels, motels, campsites, private residences, cottages, and other similar types of accommodations.

In fiscal year 2018-19, gross occupancy taxes totaled $30,678,036, of which the beach nourishment fund (“BNF”) received $10,214,436. Mr. Outten indicated that the fund currently has $7.5 million in it that has not been allocated and that this amount will “grow.”

According to Dare County tax records, distributions to the BNF have nearly doubled in the past five years. See https://www.darenc.com/tax-info/gross-collections/occupancy-distributions.

Funding one of the two beach-nourishment plan options recommended in September by the Town’s engineering consultant, APTIM Coastal Planning & Engineering of North Carolina, is very much on the minds of Town Council members. If Southern Shores proceeds with a plan, it would benefit financially from coordinating the timing of its sand dredging with the maintenance cycle of Duck, Kitty Hawk, and Kill Devil Hills, which expect to add fill to their 2017 projects in 2022.

Beach nourishment, a salvage technique used to combat erosion and to widen the beach, involves dredging large amounts of sand from offshore sand sources and placing this sand on eroded, narrowed beaches.

Equipment mobilization costs, which Mr. Woodard described as “humongous,” would be saved if the towns worked together. When Mr. Outten spoke to the Council in 2017, he estimated that such costs accounted for more for 10 percent of a project’s total.

The projected costs in September for APTIM’s two recommended options, each of which would place sand on the southernmost 15,500 feet of the Town’s 3.7-mile shoreline—from Fourth Avenue south to the Kitty Hawk line—are $14,026,800 and $16,749,900. The cost difference is attributable to sand fill density and volume.

Chairman Woodard told the Town Council that Dare County has spent $100 million on beach nourishment in the past nine years. As Mr. Outten explained, the county manages the BNF so as to assure that sufficient monies exist to cover both debt service and the maintenance costs of all projects “going forward.”

Nags Head, KDH, Kitty Hawk, Duck, the Pelican Watch beachfront in Southern Shores, and Buxton have all received monies from the county’s beach nourishment fund. In his January 2017 talk, Mr. Outten said that Kitty Hawk intended to nourish all 4 miles of its coastline; Duck, Kill Devil Hills, and Buxton all planned partial nourishment of 2-2 ½ miles of oceanfront; and Nags Head had already nourished 10 of its 11-mile shoreline.

See https://www.darenc.com/government/beach-nourishment/completed-projects for an overview of completed Dare County beach nourishment projects.

The goal of the Kitty Hawk project, Mr. Outten said Wednesday, was to prevent flooding on the side streets between the beach road and U.S. Hwy. 158, not to build up the dune.

Nags Head was the first Dare beach town to undertake beach nourishment.

According to Mr. Outten, Nags Head considered a nourishment project as early as the late 1980s and expected federal funds to pay for 75 percent of the costs, but those monies never came through. In 2011, when the town finally implemented its project, the total cost was $37 million, $18 million of which came from the Dare BNF. The town also borrowed $18 million and used $1 million from its general fund.

According to its online records, Nags Head covered much of its debt by adopting a town-wide tax increase of 2 cents (on $100 of property value) and a tax increase of an additional 16 cents on property owners in two municipal service districts on the oceanside.

For its 2019 nourishment maintenance project, Nags Head assessed a town-wide tax increase of 2.7 cents and an increase of 17.5 cents on all property owners in its two service districts, which are east of South Virginia Dare Trail and South Old Oregon Inlet Road. It also was able to take advantage of state and federal disaster-relief funds distributed after Hurricane Matthew.

Federal Emergency Management Agency (FEMA) monies are available, Mr. Outten explained, after a “declared storm,” but only then. “FEMA looks at a beach like infrastructure,” he said.

As Mr. Outten explained Wednesday, and The Beacon clarified in a telephone conversation late this afternoon, Dare County had a formula for determining how much it gave each town in BNF monies, so as to make contributions fair. The formula is based on the town’s tax base. [More on this tomorrow.]

The Town of Southern Shores has hired DEC Associates, Inc., a Charlotte-based financial planning firm that also works with Dare County, to advise it on funding options for its anticipated beach nourishment project. Southern Shores’ current tax rate is 22 cents per $100 of property value.

AVON’S REQUEST AND BNF PRIORITIZATION

According to Mr. Outten, citizens who live in Avon, the unincorporated community on Hatteras Island that was hit hard by Hurricane Dorian, have already submitted a request for Dare County BNF monies. If Southern Shores were to submit a request, it would essentially be competing with Avon, whose interest Mr. Outten also mentioned in his 2017 talk.

As Mr. Outten explained by telephone today, Dare County would do the study for the village of Avon, and then work with citizens to determine what a project would cost them and whether they can afford it.

“We haven’t ever had to prioritize projects,” the County Manager said Wednesday, suggesting that if prioritization of two requests were necessary to determine fund allocation, he would look at the cost-benefit equation of each and “who’s imminently threatened.”

A beach-nourishment study, like the one APTIM has done, is a prerequisite to any request by a town for BNF funds.

“We have to know how much the project is going to cost and how much the town can raise,” Mr. Outten said.

Chairman Woodard told the Town Council that the County Board of Commissioners unanimously voted Monday, at its monthly meeting, to give Southern Shores $250,000 to pay for such a study. The county has done the same for other towns.

Southern Shores has spent considerably less than $250,000 for the survey work that APTIM has performed in the past two years.

When The Beacon asked Mr. Outten in our telephone call today if Southern Shores could use those monies for other purposes, he said no. When asked whether the county might reimburse the Town for monies it has spent on coastal engineering surveys, he said he was not sure: “I hadn’t thought about that,” he replied.

The Board of Commissioners’ action Monday came as a surprise to Town Council members and Interim Town Manager Wes Haskett. Mr. Outten did mention the availability of such funding, however, in his Jan. 3, 2017 talk.

Noting that the Town is “short on survey data,” Mayor Tom Bennett asked Mr. Outten if Southern Shores has until Christmas to submit a request. The County Manager told him that Southern Shores can take the time it needs.

But, he noted, “We don’t sit on the money waiting” for requests. The point of the beach nourishment fund is to “put sand on the beaches.”

ANNUAL TOWN AUDIT: STRONG FINANCIAL CONDITION

Also Wednesday, Teresa Osborne, a CPA with Dowdy & Osborne, LLP of Nags Head, presented a brief overview of her firm’s independent audit of the Town’s financial statements for fiscal year 2018-19, reporting that the Town ended the fiscal year in “strong financial condition.”

According to Ms. Osborne, revenues in FY 2018-19 exceeded expenses by $344,361. At the close of the fiscal year, she reported, the unassigned fund balance for the General Fund contained $4,173,321, or 70 percent of annual General Fund expenses. Inasmuch as the Town requires $1.75 million of this balance to be maintained for emergency relief (“working capital”), $2,423,371 may be viewed as unrestricted.

Ad valorem taxes increased by 1 percent, bringing in $34,000 of revenue.

For more details about the audit and the Town’s financial status, please see Dowdy & Osborne’s report at: https://www.southernshores-nc.gov/wp-content/uploads/2019/11/Town-of-Southern-Shores-2019-financial-statements-View.pdf. Ms. Osborne’s “Financial Highlights” appear on p. 3.

OTHER GOINGS-ON: ZTA 19-02, S. Dogwood Trail Sidewalk Contract

The Town Council unanimously voted to approve those sections of Zoning Text Amendment 19-02, which deals with building height and lot fill, that the Planning Board recommended and to let the Board continue to “work to refine” section 6(b) of the ZTA, as Planning Board Chairperson Elizabeth Morey requested.

Please see The Beacon, 11/4/19, for more background on ZTA 19-02.

Section 6(b) of the ZTA grants an exception to banks that front on U.S. Hwy. 158 for “decorative cupolas or ornamental watch towers” that extend up to 15 feet above the 35-foot height restriction.

“We really don’t want any more banks with cupolas,” said Ms. Morey, who was elected to the Town Council on Nov. 5, in presenting the Planning Board’s position Wednesday.

Local general contractor Matt Neal, who also won election to the Town Council Tuesday, spoke in support of passing ZTA 19-02, with the exception of the bank cupola exception.

THE PLANNING BOARD WILL MEET NOV. 18, 5:30 p.m., in the Pitts Center, to continue its discussion on Town Code requirements for retaining walls—a topic that came up during its ZTA 19-02 discussions—and on bank cupolas. This will be the last meeting that Ms. Morey chairs.

It is standard procedure, when a Planning Board vacancy occurs, for the Town Council to ask the Board’s first alternate, who is now Tony DiBernardo, if he or she would like to be appointed to a regular Board membership. If the first alternate declines, it is customary for the second alternate, who is now Michael Basilone, to be offered the appointment. If this procedure is followed, there is likely to be an alternate’s seat available.

To be considered for an appointment to the Planning Board, as a regular volunteer member or as an alternate, you must submit an application, which you will find here: https://www.southernshores-nc.gov/wp-content/uploads/2012/05/10-14-16-Board-Volunteer-Application.pdf.

SOUTH DOGWOOD TRAIL SIDEWALK CONTRACT: The Town Council unanimously approved awarding the construction contract for the South Dogwood Trail sidewalk project to Hatchell Concrete, Inc., of Manteo, which submitted the lowest bid among three bids that the Town received.

Council members did not engage in any discussions about the relative merits and reputation of Hatchell Concrete or its proposal. RPC Contracting, Inc., with whom the Town has often worked, came in with the second lowest bid.

According to Mayor Bennett, the total cost of the contract with Hatchell is $645,280.10: $623,839.35 for the base amount and $21,440.75 for pedestrian crossovers on the street.

LIBRARY SURVEY RESULTS: Michael Fletcher, chairperson of the Town’s Exploratory Committee for Potential Branch Library, presented the results of the voluntary survey that the committee asked Southern Shores resident to take. You will find the results here: https://www.southernshores-nc.gov/exploratory-committee-potential-branch-library/library-survey-summary-results/.

Mr. Fletcher said he would present a library site proposal to the Town Council at its Dec. 3 meeting.

UPCOMING:

VETERANS DAY, NOV. 11: The Town Hall offices will be closed Monday, Nov. 11, in observance of Veterans Day. Trash collection will occur as usual.

THE AUTUMN BULK-TRASH PICKUP IS FRI., NOV. 15. As of today, you legitimately may put your large-item garbage in the roadside right-of-way.

THE EXPLORATORY COMMITTEE TO ADDRESS CUT-THROUGH TRAFFIC will hold a public forum on Nov. 19, 5:30 p.m., in the Pitts Center. The Beacon will furnish the committee’s membership and agenda, when we have received a release from committee chair Tommy Karole.

Town Councilman Fred Newberry, who had been serving as the committee’s Town Council sponsor and lost his seat in Tuesday’s election, made a motion at the Council meeting to place on the Council’s Dec. 3 meeting agenda the matter of appointing a new sponsor. This motion carried 4-1, with the Mayor dissenting. The Mayor’s dissent may indicate his desire to eliminate this committee. The Beacon urges you to turn out for the Nov. 19 meeting if you would like to see the committee continue.

(Please forgive my technical snafus today. I was trying to link this blog to The Beacon’s Facebook page, but was unable to do so after repeated attempts.)

Ann G. Sjoerdsma, 11/8/19

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