March 7, 2006

Southern Shores Resolution

The Town Council of Southern Shores passed a resolution this evening calling on the Dare County Board of Commissioners to develop a comprehensive shoreline protection plan and to disseminate the plan, its cost and financing plan to the public. The council deleted from the final version of the resolution language that called on Dare County to hold an advisory referendum on the plan.
The discussion of the resolution showed the council had differing views on beach nourishment, but a general skepticism that a workable plan for shoreline protection could be developed. The board decided to amend the draft resolution language, suggesting that after a plan was developed might be a more appropriate time call for a referendum on the plan. Mayor Pro Tem Dan Shields suggested that it might not be clear what effect a referendum would have, whose actions would be limited, if the results of the referendum restricted the Dare County's ability to protect the shoreline. He suggested that if the county was limited then the municipalities in the county might try to fund their own shoreline management plans through property tax increases. Such increases could reduce Southern Shores share of sales and occupancy tax passed back from the state to the county and distributed to the towns based on the ratios of property tax levies (more taxes for beach nourishment more shared revenue for the nourishing town, less for Southern Shores)
The council also voted to ask Dare County to share funds from the short-lived sales tax for beach nourishment with the municipalities. The resolution called for the funds to be distributed based on the ratio of respective populations but it was recognized during the discussion that while this formula was advantageous for Southern Shores any final distribution plan would have to be negotiated with the County and the other towns. The vote on both resolutions was unanimous.
The first resolution is a very smart move on the part of the town and very hard to dispute. The County needs to get on with its planning in the event the Federal project is not funded. It also needs to do a better job of getting the public to understand and hopefully support whatever methods of shoreline management the county decides to use. Much of the discussion focussed on the failure of the sales tax referendum (or its success if you will), Council member David Sanders expressed his skepticism about beach nourishment being successful on Dare County beaches, while Council member Brian McDonald reminded the body that the ocean beach was central to Dare County's economy and hence Southern Shores economy and much of its success as a community. Mayor Don Smith pushed to have the call for a referendum left in the resolution but relented as it became clear the rest of his board did not agree.
Actually the draft language didn't call for Dare County to hold a referendum, wisely it called for the county to seek the authority to hold a vote. The resolution was structured this way in becuase neither advisory referendums and binding voter initiatives are provided for in the North Carolina Constitution. Depending which lawyer you ask, such a vote would, at a minimum, require an act of the legislature and possibly an amendment to the Constitution.
The question of what happens to the sales tax money is a good one. No less of an expert than Ray Midgett, head of BeachHuggers, the group that led the movement to repeal the tax, has stated publicly that he does not expect the tax to bring in anywhere near 50% of the expected annual revenue of $13 million. Southern Shores spoke in terms of $6 million as the county's windfall from the tax. In theory the money could be combined with revenues from the one percent occupancy tax dedicated to shoreline management. Dare County segregates this money in a separate fund. These are the county dollars Nags Head is considering requesting if if proceeds with a locally funded beach nourishment project.
Interestingly, Southern Shores planned to use the funds to supplement (or replace) town funds currently used for the protection of ocean dunes. One wonders why Southern Shores has not asked the county for funding for this program before. It certainly sounds like "shoreline management" to me.
Kudos to some very smart elected officials in Southern Shores.


At 5:28 PM, Anonymous Anonymous said...

Some Outer Banks residents may not know that BeachHugger founder, Ray Midgett (retired) is a former tax auditor (including sales tax) for the North Carolina Department of Revenue. According to Midgett, he made his assumption that the county would garner less than 50% of the anticipated $12 million yearly revenue, based upon these facts, (1) all rental reservations made prior to Dec. 31, 2005 for the 2006 summer season are not subject to the new sales tax, (2) all building contracts signed and/or quoted prior to Dec. 31, 2005 do not have to pay the new sales tax on building materials, etc. even though construction takes place after Jan.1, 2006, and, (3)the first six months of the year, historically, do not produce 50 of the annual sales tax revenue.
And, this is only the beginning...add in, (a) a declining economy, (b)taxpayer's buying out of the county...yes, many of them are doing just THAT!


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