NTB Weighs How to Pay $3M Yearly For Sand

Costs for a proposed joint federal beach renourishment project with the Army Corps of Engineers and Surf City have soared since first proposed a decade ago. Image: Corps of Engineers

NORTH TOPSAIL BEACH – It might take a property tax increase, paired perhaps with other possible new sources of revenue, including pay-to-park at public beach access lots.

Whatever the case, North Topsail Beach Board of Aldermen Thursday night made clear they are not against a joint federal project with the U.S. Army Corps of Engineers and Surf City.

Town leaders just have to figure out how tap new revenue sources to fund the estimated $3 million a year the town would have to pay for the next 50 years for its portion of the estimated $901.1 million project.

For North Topsail Beach, the project entails nourishing the first 4 miles of the southern end of town starting at the town line with Surf City.

The proposed project, approved by the Corps last fall, would secure beach renourishment along 10 miles of Topsail Island’s shoreline, including all 6 miles of oceanfront shoreline in Surf City, every six years for the next half-century.

Under a proposed funding agreement, the Corps would pay 65% of the project’s initial construction. The towns and state would pay for the remaining 35%.

Shortly after convening the board’s monthly meeting Thursday, North Topsail Beach Mayor Joann McDermon addressed an audience tuned into the town’s live meeting broadcast, saying that information recently posted on the town’s website was not an indication the town would withdraw from the proposed project.

“We as a board are very much for the project,” she said.

Instead, the board wants to make sure property owners understand town officials are trying to make sure the town can afford to pay for the federal project and have enough to pay for other capital projects.

Town officials were surprised in a meeting with Corps officials late last month to learn that the estimated cost of the project has nearly tripled in the 10 years since the proposal was introduced.

The town is currently paying down a U.S. Department of Agriculture loan it received for a renourishment project at the southern end of town that was completed about five years ago. And, there are projects in the works that will drain even more money from the town’s coffers.

For nearly two years, the town’s administrative staff and police department have been operating in rented space after Hurricane Florence in 2018 heavily damaged town hall. The building has been gutted and is expected to be restored later this year.

A project to haul more than 200,000 cubic yards of sand by trucks to beef up a portion of the town’s shoreline is underway with work to begin later this year.

The town continues to pursue the possibility of constructing a terminal groin at New River Inlet, where erosion is eating away the north end of Topsail Island. An environmental impact statement for that proposed project is still in the works.

“We’ve just got a lot that we’ve got to get accomplished here,” McDermon said.

The town has received about 100 emails with comments from property owners expressing their opinions, concerns, and, according to aldermen, overall support for the federal project.

“I appreciate it,” Alderman Tom Leonard said of the emails. “The board has not said ‘no’ to the project. Not by any means, but, instead, wrestling how to pay for a very expensive project. It’s already stressful enough trying to come up with the right decision.”

He urged property owners to help town leaders to identify new revenue sources.

“Give us something to work with,” Leonard said. “Thank you in advance for your future cooperation.”

He pointed out that only one of the email authors mentioned the town’s Phase 5 renourishment project completed in 2015 at the south end of town – the same area that would entail the federal project.

That cost the town about $16 million and, Leonard said, has proved to be a success because the dune structure built as a result of the project has protected the homes and infrastructure behind it through three storms – hurricanes Matthew, Florence and Dorian.

“The fact is we need to get everything out on the table and what this means to the citizens,” Leonard said.

Video from the North Topsail Beach Board of Aldermen’s meeting Thursday includes discussion of the proposed renourishment plan, a joint federal project with the U.S. Army Corps of Engineers and Surf City.

That may well include a tax increase.

According to information on the town’s website, the current rate of 1 cent per $100 valuation generates $100,000 each year. It would take a tax rate of 30 cents per $100 valuation to generate $3 million.

Among the questions about possible funding sources is whether all of the town’s property owners should pay the same amount to cover the cost of the project.

Should those who own property outside of the project area contribute equally to it?

“I think that’s a fair thing for us to consider,” Alderman Richard Grant said.

The town owes about $14 million on the USDA loan it received for the south-end project.

Doug Carter, president and managing director of DEC Associates Inc., said the town is paying about $900,000 a year on that loan.

The Charlotte-based municipal consulting company is currently working with the town’s interim manager and finance director to project whether the town can pay off the remaining loan within five years.

Carter said that if the town continues to pay $900,000 a year for the next four to five years, about $8 million or so of the $14 million will be paid down. The reserve fund, which is between $4 million and $5 million, would cover the remainder of the loan.

“We really have sort of a four- or five-year period we’re working with,” Carter said. “The other issue is we really have to work out the construction time period and all of the other timing factors to determine when essentially the North Topsail Beach project would be done by the Corps and essentially when our debt service to them would start. Once we can really get our timing worked out through our negotiations and conversations with the Corps on when we really would have to start paying debt service to them then that will make it easier to determine through the financial model where do we need the new revenues, when do y’all need to start levying them, how can we save them toward these payments and that’s what we’re trying to work through.”

Carter said he and town officials are “heavily” in the process of looking into a project partnership agreement, or PPA, with the Corps and Surf City.

McDermon said town officials will continue to meet with Corps and Surf City officials to hash out an agreement – possibly two PPAs, one with the Corps and one with Surf City.

About the Author

Trista Talton

Trista Talton is a native North Carolinian who, shortly after graduating from Appalachian State University in 1996, took her first newspaper job as a reporter for the Hickory Daily Record. She has since migrated to the coast, covering everything from education and local governments to law enforcement, the environment and the military, including an embed with Marines in Kuwait for the start of the Iraq war in 2003. She has been a Coastal Review Online contributing writer since 2011 focusing on coastal-related issues from Onslow to Brunswick counties. She lives with her husband and two sons in Jacksonville.