March 2, 2015

After marathon, divisive meeting, board
commits funds to inlet dredging


What started as weighing in on the pros and cons of using occupancy taxes to fund dredging of severely shoaled Oregon Inlet at Monday’s marathon Dare County Board of Commissioners meeting quickly devolved to a fishing community versus business community contest that pitted the value of Oregon Inlet against  beach nourishment.  

Residents, public officials, and representatives of both camps came out in force to give their opinion on draft legislation that would allow the board to divert occupancy tax revenue, including funds earmarked for beach nourishment, to pay for dredging the inlet, creating an uneasy divide in the packed audience.

About half of the 32 speakers favored use of the occupancy funds for dredging, saying that the county’s boating and fishing interests were taking a huge economic hit. But the other half objected to spending dedicated revenue or diverting any funds without a plan to replace the lost revenue.

 “If you look around this room, it’s pretty easy to distinguish the two sides,” said Jim Tobin from Manns Harbor. “All you have to do is look for neckties.”

Tobin, who supported the bill, said that the users of Oregon Inlet also bring tourism revenue to the county from fishing tournaments and charter boat trips.

The 6 percent occupancy tax is currently divided in four pots that are designated for beach nourishment (2 percent), tourism board (1 percent), municipal tourism  (2 percent) and county tourism (1 percent).

The bill is sponsored by state Sens. Bill Cook, R-Beaufort; Harry Brown, R-Onslow, and Michael Lee, R-New Hanover. Section 3.3 of draft bill 2015-42 would allow the Dare commissioners to use “some or all of the proceeds from the occupancy taxes” toward the non-state share of dredging.

Paul Spencer, owner of Spencer Yachts, said that the nearly closed inlet is having a dire effect on the $100 million boat building industry in Dare County, forcing boats to go 120 miles south to do sea trials. “We’ve seen this coming for 40 years,” he said. “It’s here now. The hourglass has run out. It’s time to take things in our own hands.”

Opponents of the legislation agreed that Oregon Inlet is vital to the county and must be dredged, but they were concerned about tapping into a critically important revenue stream.

 “Many people worked cooperatively to get the original occupancy tax passed,” said Susie Walters, Nags Head Mayor Pro Tem.  “Tourism is the lifeblood of our community, and the current distribution of the occupancy tax helps to fuel our county.”

Walters, along with other opponents of the draft bill, asked the board to request that  Cook withdraw the legislation.

Jordan Hennessy, with Cook’s office, said during a break that the draft bill was e-mailed last week to the board for review, but it has not yet been submitted to the legislature.

Kitty Hawk Mayor Gary Perry warned the board that there is a risk in toying with the occupancy tax spending pots, with all the parties depending on the millions of dollars for a significant part of their budgets.

“Once you do that, and that stream changes, “ he said, “then, basically, we’re out of business.”

Lorrie Love, with the Outer Banks Visitors Bureau, said that proposal to tap into the occupancy tax lacked transparency, and the bill was written incorrectly. Love suggested that levying a -cent sales tax could pay for the dredging project.

“This is truly a community problem,” she said. “We need to work together.”

Board Chairman Bob Woodard said he agreed that the board has not had enough time to consider the draft legislation, but he also was concerned that too much time has gone by with nothing being done to remedy the problem at the inlet.

“We have been talking about this for 40 years,” he said. “We need action and we need unanimity within this board to tackle this and make this happen. We need to step up to the plate.

“We’re funding everything else,” he continued. “We’re giving the schools $20 million... I don’t think anyone from Pennsylvania is going to worry about your occupancy tax. I have no problem using 32 percent of our 3 percent.” 

But when each of the board members weighed in on the issue, it was clear the panel was as divided as the audience.

Board members Allen Burrus and Jack Shea were opposed to the legislation. Wally Overman did not object to the bill’s language, but he believed the county had to come up with a recurring funding stream.

Members Margarette Umphlett and Beverly Boswell strongly supported using the occupancy tax for the inlet.

“Oregon Inlet must be operational and maintained yearly,” Boswell said. “We are elected so you put your faith in us. I think we should get this ball rolling. We’ve waited 40 years too late.”  

Warren Judge said that if the county intends to spend only its share of the occupancy tax kitty on dredging – about $3.5 million -- then there was no need for the legislation to give them authority to spend the tax. But he said there was also the matter of the county paying its bills in the upcoming budget.

 “The money is going to have to come out of the fund balance, or we reduce expenses,” he said.

Confusion ensued among members as to what the consequences would be if the bill was pulled and what the ramifications would be to the tax rate. After much back and forth, the board agreed to write a letter to Cook asking him to pull the occupancy tax provision in the bill. The motion carried 6-1, with Boswell voting against it.

A motion was also approved to place a line item in the budget to use the dollar amount equivalent to 32 percent of 3 percent of the occupancy tax – the county’s share – to fund dredging and maintenance of Oregon Inlet and Hatteras Inlet.  The vote on the second motion was unanimous.

There were no details provided on the potential impact on the county budget of including the $3.5 million line item for dredging.

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