The tax-rate increases that the Town of Southern Shores has proposed by district* in order to pay for its 2022 beach nourishment project are as follows:

Townwide: 2.75 cents on $100 of assessed property value

MSD-2: 6.25 cents (plus the townwide rate of 2.75 cents, for a total of 9 cents)

MSD-1: 14.5 cents (plus the townwide rate of 2.75 cents and the MSD2 rate of 6.25 cents, for a total of 23.5 cents)

In order to meet its funding obligation for the $14.5 million project—which is $6,123,873—the Town must collect $1,224,775 per fiscal year for the next five years.

All Town tax rates will be set by the Town Council in an upcoming budget meeting. If the Town Council does not vote to establish the municipal service districts, it would have to determine a uniform townwide tax rate to underwrite beach-nourishment funding.

The annual MSD and townwide tax assessments for beach nourishment would be indefinite—in effect as long as the Town is engaged in beach-erosion control and maintenance—although the Town Council could decide to reduce the tax rates.

We are concerned that our 3/17/21 article about the public hearing on municipal service districts may have misled people into believing that the increases for MSD-2 and MSD-1, respectively, are only 6.25 cents and 14.5 cents, when, in fact, property owners in these districts also pay the rate of districts that their properties overlap. Oceanfront property owners, therefore, pay a total of the increases in all three districts.

We believe the slide presented by Town Manager Cliff Ogburn at Tuesday’s hearing showing the proposed tax-rate increases was confusing, and we do not wish to contribute to that confusion. The cumulative tax rate should have been clearly indicated for each district: 2.75 cents; 9 cents; 23.5 cents.

The Town Council has brought up in session the possibility of raising the townwide tax rate to at least 3 cents, which, obviously, would have a ripple effect on the tax rates in the municipal service districts, if they are approved.

The Town Council will take its first vote on the MSDs at its April 13 meeting. Two votes of approval are required for the districts to be established.

Also yesterday we posted an article about FY 2021-22 budget considerations for cut-thru traffic mitigation measures and a possible general tax-rate increase in the next fiscal year, based on our coverage of the Town Council’s budget workshop on Tuesday morning.

The current Town tax rate is 19.58 cents on $100 of property value. This is a “revenue-neutral” tax rate that went into effect in FY 2020-21 after Dare County performed its property reevaluation. The revenue-neutral rate is designed to keep property owners’ taxes at the same level, even though the assessed value of their properties has increased.

Before the reassessment, the Town tax rate was 22 cents and had been for some years.

The Council did not reach a consensus at its workshop on raising taxes in FY 2021-22 to fund the Town’s general operations, exclusive of beach nourishment, but a majority of Council members appeared to support a one- or two-cent increase.

See The Beacon, 3/17/21.

The Town is unquestionably facing increased expenditures, especially in capital improvements.

The Council gave Mr. Ogburn permission Tuesday to increase annual expenses on street improvements to $1 million per fiscal year, as the Town Manager had recommended, starting in 2021-22. Before the pandemic 2020-21 fiscal year, annual expenses for capital improvements were most recently about $660,000.

The Town is also obligated to pay $314,020 per fiscal year for debt service on a 25-year loan that was taken out to pay for the new Southern Shores Volunteer Fire Dept. fire station.


* The Town has proposed establishing a municipal service district (MSD-1) that would include all properties that “abut the ocean” and all “oceanside” properties east of Ocean Boulevard that do not abut the ocean.

A second proposed district (MSD-2) would encompass all properties in MSD-1, all properties east of N.C. Hwy. 12 (both the Ocean Boulevard and Duck Road segments), and all properties west of and abutting Ocean Boulevard, from the southern town limit to 137 Ocean Blvd., and all properties west of and abutting Duck Road beginning at 139 Duck Road and extending north to 149 Duck Road.

Ann G. Sjoerdsma, 3/18/21


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