Beach nourishment is a go in Kill Devil Hills

By on May 17, 2013

Beach nourishment in Nags Head. (Rob Morris)

Beach nourishment in Nags Head. (Rob Morris)

Kill Devil Hills plans to move ahead with a $20 million beach widening project and ask Dare County commissioners to approve a 1-percent increase in the occupancy tax to help pay for it.

Monday night, the town’s Board of Commissioners rejected the idea of an unpredictable federal reimbursement program and opted to pursue the project on their own.

Commissioner Brandi Rheubottom voted against spending money on beach nourishment now because she said too many town residents are struggling with higher taxes, insurances rates and prices in a weak economy.

But her three colleagues argued that the alternative was to do nothing, which they said would cause more damage to property values and eventually mean even higher taxes for everyone.

“I think in the long run if we did nothing it would hurt more people overall,” said Commissioner Mike Hogan.

Commissioners pointed to Kitty Hawk’s loss of oceanfront houses — and property value — to erosion. By comparison, they saw Nags Head’s 10-mile nourishment project, which was finished in 2011, as a template for their own.

In a presentation late last month, Commissioner Bill Pitt outlined a plan to widen about 12,000 feet of beach on the northern end of town with tapering into southern Kitty Hawk by using 910,000 to 1.7 million cubic yards of sand pumped from offshore borrow areas.

The project would use $10 million from Dare County’s Beach Nourishment Fund, which is made up of a portion of occupancy tax collections, and borrow $10 million in the form of a five-year general obligation bond, according to the presentation.

To avoid a referendum, the town would have to pledge its share of occupancy tax revenue as collateral.

Adding another 1 percent to the county occupancy tax would generate half of the $2.1 million annual debt payment.

The other half would come from a town-wide tax of 3 cents per $100 of value and an additional municipal service district tax of 32.09 cents. The municipal service district would be the northern beachfront area where sand would be placed.

Commissioners voted unanimously to ask the Dare County Board of Commissioners to begin collecting the 1 percent additional occupancy tax that was authorized by the General Assembly in 2010 for beach nourishment. It was meant to help finance Nags Head’s project, but county commissioners found it was not necessary.

Now, several projects are in the pipeline, and there may not be enough money to go around. Duck wants to pump sand onto about 2 miles of beach, and the county has hired an engineering firm to design a project for Rodanthe and Buxton.

Kitty Hawk is also looking at ways to mitigate flooding and erosion.

Kill Devil Hills commissioners decided not to pursue a plan that would qualify the town for federal reimbursement. Federal involvement would be too time consuming, commissioners concluded, with no guarantee of reimbursement.

They voted instead to direct the town’s nourishment engineering firm, Coastal Planning and Engineering, to put together a detailed plan and timetable.

A $12.7 million operating budget request presented by Kill Devil Hills Town Manager Debora Diaz Monday did not include additional taxes for nourishment.

The revenue-neutral rate was put at 32.09 cents per 100 of value based on the 2013 countywide revaluation. Because property values declined by an average of almost 30 percent countywide, a higher revenue neutral rate would be necessary to raise roughly the same amount of money as the town did in the 2012-13 fiscal year, which ends June 30.

Some property owners will pay more, others less. Some will pay about the same amount in annual taxes if the value of their property declined near the average.

The current rate in Kill Devil Hills is 23.5 cents. That is paid in addition to a county property tax.

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Comments

obx1997

July 22, 2013 9:45 pm

My husband & I bought a condo in Kill Devil Hills over 16 years ago, in 1997. We are by no means rich, but are very thankful to have a place to visit with our children and grandchildren as often as we can. I think I understand where those of you who are against the cost of beach nourishment are coming from, and I don’t pretend to understand all the details, but I would respectfully ask you to consider the following: every property owner pays school taxes, but we don’t have children in schools there. If the beach properties are lost, there would be a huge loss of revenue that would have to be made up by residents. And, as was mentioned earlier, sales taxes, and tourism contribute to the local economy.

polysurfer

May 29, 2013 4:57 am

Dare voters unanimously voted against beach re-nourishment. Now, KDH’s “board of clowns” have crafted their own version of Nags Head’s “board of clowns” beach front experiment at taxpayers expense. We all cry about the crooks and “special interest” in Washington but, we allow it to prevail in our townships.

Why on earth would the 95% of KDH landowners be happy? Our entire democratic process has taken a sharp left. I smell “conflict of interest” in each and every person supporting this project. Stop the train.

Jon

May 21, 2013 9:58 pm

ffrdm, they are talking about the northern section MP5.5 to MP8, MP9 would get nothing but the sand that eventually washes down the beach (which is probably better result than directly nourishing the beach, but anyway . . .)

I’m sorry if you are losing $10,000 per year, but a lot of town residents don’t even have the $100 this tax might cost them. They will have to choose between paying the tax or buying school supplies or clothes for their kids. Check out the statistics on kids receiving reduced-price or free lunches in Dare County schools, and you’ll get a better idea of why imposing this tax on residents is onerous. It’s something like 35% of kids receiving reduced price or free lunch, with 20% of kids living below the poverty line.

Also keep in mind that KDH residents are facing tax increases for several other reasons: first, the revaluation, and second, county tax rate increases. The “revenue neutral rate” published by the county and town is not revenue neutral to residents, because the soundside properties (where most residents live) declined less in value than the oceanside.

Using my property as an example, my valuation declined 16%, but the revenue neutral rate for the county is 42% higher. On top of that, the county rate is increasing another 3.25 cents, mostly to make up for lost state and federal funding and unfunded federal and state mandates.

Then the revenue neutral KDH town rate is 32.09 cents, up from the current rate of 23.5 cents, for an increase of 37%.

Thus, even before the 3 cent nourishment tax, my property taxes will increase 25%, which for the average owner-occupied house in KDH is probably $350 or so. I don’t like to pay that, but I understand it. Not this new sand tax though, nourishment is a luxury that I shouldn’t be assessed to pay for.

I am not able to sell my house either, not because my wife won’t let me, but because it would be a short sale that would destroy my credit and then I’d still have to find a place for my family to live.

I need to remember to drop by the Baum Center and thank Ms. Rheubottom for caring about KDH residents.

ffrdm

May 21, 2013 2:21 pm

I am an out of town owner of a semi-oceanfront townhouse. I am not wealthy, and as a matter of fact, we lose over $10,000 annually by owning that property. The rentals do not come close to covering our costs. Our 9 owners split the fee of over $25,000 per year, just for insurance. Add in all the other costs, and it is a losing situation.

If I read correctly in the article, it said that only the northern area of KDH will be nourished. Does anyone know how far south they plan on going?

I am below MP 9 and if they are only doing this north then this will not benefit me or my renters one bit, yet I will be losing even more in increased taxes.

(Please don’t ask why I keep the place if it is losing so much-that is a wife issue)

Jon

May 19, 2013 3:57 pm

OBX Fan, I agree that nourishment can have some benefit to all taxpayers (although as a resident who uses public beach access, I don’t like the profile of the nourished beach in Nags Head), the main question here is cost and scale. Would the project be worthwhile if it cost $2M? Sure. $200M? Of course not. Since it’s in between, we need to make a careful analysis of the costs and benefits. This article reads to me like a knee-jerk reaction by the town to nourish at more than twice the cost per mile that Nags Head did.

At a minimum KDH should ask Kitty Hawk and maybe even Duck if they want to partner, as that could drive the cost per mile much lower. I don’t know if KH is interested, but they might be.

vballer

May 18, 2013 9:23 am

Very good post Jon

OBX Fan

May 18, 2013 6:52 am

Hi Jon. I think your points are thougth provoking and, if your numbers are correct, informative. Especially when considering the cost per mile.

The likely response to your opinion is that a quality nourished beach benefits all businesses and homeowner-renters in KDH. Why? Because the beaches are open to all visitors and good beaches are the big draw for bringing business to all of KDH, not just those on the actual oceanfront. Investing in the beaches benefits everybody in KDH. Therefore, everybody should pitch in.

Don’t forget the beaches are not private and exclusive for the folks who own the few oceanfront lots. If access to the beaches were only for the folks with oceanfront property, then your complaint would be more accurate.

In fact, oceanfront owners will likely pay more than others for this project, since their property values are usually the highest. This seems somewhat fair, since their properties directly abut the refreshed beaches. But by no means are they the sole beneficiaries of the project.

Jon

May 17, 2013 9:13 am

How about absolutely not? $20M for 2.3 miles is not economical at all. The KDH project is too small given the cost of mobilizing the dredge. Nags Head did 10 miles for $36M, so the KDH project is 2.4 times as expensive per mile.

The KDH project amounts to something like an $83,000 subsidy per oceanfront lot (50′ frontage, it would be higher for larger lots). With a special tax district rate of $0.32, that lot with a house valued at $1M will generate $3,200 in additional taxes per year, or $16,000 over five years, for a net subsidy of $67,000. How is it fair for working class families in KDH to give wealthy nonresident oceanfront homeowners a $67,000 subsidy?

If the commissioners want a public works project that will actually benefit their constituents, I’d suggest having a look at the multi-use path Nags Head built. That could actually save lives of working-class residents rather than enriching already wealthy nonresident property owners. If the commmissioners want to play in the sand, put the full cost on the special service district!

I further suggest that if this project is forced upon the residents of KDH, the three commissioners should look for another job after the next election. They are rightly afraid to put this issue to a referendum, but we’ll have a vote one way or another.

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