When Republicans took control of the Dare County Board of Commissioners in last November’s election, they promised change. After they were sworn in on Dec. 1, the new chairman, Bob Woodard, talked more about the changes he hoped to see.
Along the way, Woodard has made repeated references to getting much of the work of change done in the first 90 days.
“This board has tackled issues in these first 90 days,” he said at last week’s board meeting. “We’ve been willing to look at things and willing to make decisions and move and go forward.”
That meeting was on Monday, March 2, exactly 90 days after the new board took over the reins.
That marathon meeting, which lasted from 9 a.m. until 5 p.m. with a lunch hour and one shorter break, was remarkable — although perhaps not in the way that some or all of the five Republicans on the seven-member board had in mind.
Just about the entire meeting from its start until the 2 p.m. lunch break was dominated by a discussion of a bill that has been introduced in the North Carolina General Assembly that would allow the commissioners to use funds from the county’s 6 percent occupancy tax to dredge Oregon Inlet. (You can click here to read the story on the meeting.)
The bill, Senate Bill 160, was filed this week in Raleigh by Republican Sen. Bill Cook. The short title is “Enhance safety and commerce for ports/inlets.” It would, among other things, help create a path for state and local governments to fund the dredging of shallow-draft inlets — without the requirement for cost-sharing with the feds.
The handwriting has been on the wall about the U.S. Army Corps of Engineers funding for dredging these waterways, including Dare County’s very important Hatteras and Oregon inlets. Federal funds for dredging have dwindled to almost nothing over the past several years, while the navigation problems in the inlets have gotten only worse.
It has been clear that the state and local governments were going to have to step up to the plate.
So that’s how SB 160 started out, but somewhere along the way — exactly when is unclear– a section was added to help Dare County pay for dredging the badly shoaled Oregon Inlet, which is almost closed to boat traffic. No other county was mentioned in the bill.
The Dare County section says:
“Sec. 3.3. Additional Use of Occupancy Taxes. ? Notwithstanding any other use requirement contained in this Session Law, as amended, the Dare County Board of Commissioners may by resolution designate the use of some or all of the proceeds from the occupancy taxes authorized by this Session Law, as amended, for contributions to the Shallow Draft Navigation Channel Dredging and Lake Maintenance Fund, to be used for the non-State share of costs associated with the dredging of shallow draft navigation channels, as defined in 3 G.S. 143-215.73F(g), that are located fully or partially in Dare County.”
Now most political observers would agree that senators don’t add things like this to legislation without a request from or consultation with the local government.
So one question becomes who asked Sen. Cook to add the Dare County section?
Then the next questions would be when was the section added to the bill and who knew about it?
These things matter because the uses of Dare’s current six percent occupancy tax — which is paid on the rental of such things as beach houses and motel rooms — are clearly spelled out by law.
Three percent of the tax is shared by the county and the municipalities for increased services and infrastructure required to serve tourists. Thirty-two percent goes to the county, and the incorporated towns share the remainder.
One percent of the tax is used to promote tourism, and two percent is dedicated to beach nourishment.
It’s not difficult to see why a lot of folks in the county might be nervous about talk that the commissioners — at their pleasure — could conceivably take this already earmarked money and use it to dredge inlets — even those folks who understand the dire conditions at both Hatteras and Oregon inlets.
Although the bill was being drafted for much of February, it got little attention and moved along largely unnoticed by the public or the media.
However, when a final draft surfaced just days before the commissioners’ March 2 meeting, it quickly got the attention of citizens and tourism and town officials because it included the section on Dare’s occupancy tax.
It also raised the possibility that the commissioners — at least some of them — had planned it this way — to discuss the occupancy tax issue and reach an agreement on support before the bill began racking up local opposition.
Woodward says that he did not see the final draft of the bill with the Dare County section included until Thursday, Feb. 26.
He says he immediately notified the board members and e-mailed Jordan Hennessey, an aide in Cook’s office.
The e-mail, obtained by the Island Free Press, was sent at 10:20 on Thursday night. It reads:
“I realize this draft bill opens up the occupancy tax for dredging and the Senator is trying to find ways to fund dredging for Oregon Inlet.
There is concern that the occupancy tax is already committed. Towns and the DC BOC are concerned. I would hope the Senator would allow the DC BOC to weigh in on this before moving forward or introducing it. I would think he would want our input and welcome our discussion first.”
The commissioners received a copy of the final draft late Friday morning, Feb. 27, in an e-mail from board clerk Gary Gross.
“(County manager) Bobby (Outten) asked me to forward to you a copy of a draft bill in Raleigh that Chairman Woodard will be asking the Board to add to the agenda for discussion. He wanted you to have time to review its contents before Monday’s meeting.”
It didn’t take long for the draft of the legislation to start flying all over the county — from the towns to the Chamber of Commerce and the Tourist Bureau to various industry groups to reporters and interested citizens. Phone calls and e-mails increased over the weekend as worried folks began reacting.
Early Sunday morning, Tim Cafferty, chairman of the county Tourism Board, and Lee Nettles, executive director of the tourist bureau, issued a mass e-mail, the subject line of which was “Extremely Important Outer Banks Tourism Info | Please read before Monday Morning.”
The e-mail said in part:
“If this legislation were to pass, the DCBC would have control of the roughly 2% of occupancy tax currently going to the six municipalities for tourism-related expenses, the 2% currently designated for Beach Nourishment and the 1% designated for the Tourism Board and Visitors Bureau to promote our destination. Our tourism-based economy has grown consistently and steadily throughout the years, producing annual economic impact of nearly one billion dollars and 11,750 jobs in 2013. This is not by accident. It is due to the hard work of the tourism industry and the robust promotion of our destination. The wisdom of the original occupancy legislation has allowed for sensible tourism growth and shared benefit throughout the community.
“No one disputes the importance of Oregon Inlet (and Hatteras Inlet) remaining open. This draft legislation, however, would undo a proven tourism development model that has served the community well for more than 20 years.”
The Tourism Board urged interested persons to attend the meeting the next day — Monday, March 2 — to speak during the public comment period.
So it wasn’t surprising that at 9 a.m. on Monday morning, there was standing room only in the commissioners’ meeting room and that many more than the usual number of folks stepped up to comment.
In the audience were not only opponents of SB 160, but also supporters. Thirty-two of them spoke. 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.
The tenor of the meeting was contentious at times, as friends and foes of the bill supported their views. After almost two hours of comments, a presentation on the inlet, and a short break, the commissioners began commenting.
“I don’t support this bill as it stands,” Democratic commissioner Allen Burrus said outright.
The other Democrat, former commission chairman Warren Judge, spoke to the history of the struggle to fund dredging and urged finding a long-term solution other than the occupancy tax.
“I would hate to see this bill go forward,” he said.
None of the five Republican commissioners said outright that they couldn’t support the bill, and all spoke — in varying degrees — to the wording of the bill and the pressure on the commissioners to either support it or not. The pressure came from the added complication that there was a deadline of just one more day for public bills to be filed in the General Assembly.
“I’m not comfortable with the language of this bill,” Jack Shea said.
“I don’t have a problem with the wording,” said Wally Overman, who emphasized that there was no intent “to take money from any other municipality or other government” and that the board must find a “repeatable” funding source.
Commissioner Marguerette Umphlett said she thought there was a “misunderstanding” about the bill, also saying that there was not a member of the board who would take money away from others.
Newly elected commissioner Beverly Boswell was the firmest in her support of the legislation and she even took the time to chastise the speakers who were divided in their support.
“We are Dare County,” she said, “and you better start acting like it.” She added that supporting the bill was not a “popularity contest” and that the citizens who elected the board now needed to “put your faith in us to make the decision.”
Woodard agreed that there had not been “ample time” to consider the bill but said there was little time to get it redrafted.
In the end, he said, “We’ve been talking about this for 40 years and we need to take action….We need to step up to the plate, bite the bullet, and make hard decisions to dredge Oregon Inlet and we’ve got to fund it.”
At various points in the discussion, a 5-2 vote to support the Senate bill seemed possible.
But that’s not how it happened.
After continued discussion, the board decided to take two actions — to ask Cook to remove the Dare County section and to pay for inlet dredging with monies from the county’s general fund.
The vote on removing the Dare County section was 6-1 with Boswell remaining firm in her support.
The motion to fund the dredging of Oregon Inlet — with Hatteras Inlet added almost as an afterthought — was unanimous.
The commissioners agreed 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 amount is about $3.8 million.
This could turn out to be an “all’s well that ends well” situation. However, citizens of Dare County need to know that it’s not over yet.
There are still two issues looming large over even this short-term fix to the dredging woes.
The first is that the language — perhaps because of the looming deadline — was not removed from SB 160. It remains there, and Cook has apparently said he will work to have it removed in committee. But then again, as things happen in Raleigh, maybe not. It is certainly possible at this point that the bill could pass as is.
The second and even larger problem is that the commissioners have to find the $3.8 million in the county budget to pay for the dredging. And $3.8 million is a good chunk of an already stressed $100 million county budget. Depending on growth projections and other details, the final amount needed to pay the dredging bill could be as much as 4 percent of the budget.
At the meeting last week, commissioners did not discuss any specifics about where exactly they might find the money, but decided instead to tackle the issue in the budget process. The first budget workshop is tentatively scheduled for Thursday, March 26.
HEADS UP, HATTERAS ISLAND
Also at the March 26 budget workshop, the commissioners will likely take up the issue of paying for the planned beach nourishment in north Buxton. And the discussion will likely center on how much — if anything — Hatteras islanders should be taxed to pay for it.
The project, now scheduled to begin in the summer of 2016, is expected to cost about $25 million, which the county has said it is committed to paying for out of the occupancy tax nourishment funds.
However, to this point, the county has been vague on how much it will pay and whether Hatteras Island or Buxton property owners will be expected to contribute. At a meeting on the project last August in Buxton, then chairman Warren Judge said the issue would be addressed when the project consultants had a better handle on the cost.
However, at no point, did a member of the former board publicly state that property owners should participate in paying.
That has now changed.
At a commissioners’ retreat on Feb. 20, the issue of fairness was raised. And, according to published reports, three commissioners said they favored some financial participation by Hatteras islanders.
The background is that Nags Head property owners were taxed to pay for that town’s nourishment project several years ago. Three other towns — Kill Devil Hills, Kitty Hawk, and Duck — are planning projects for the summer of 2016. Those towns also intend to tax property owners.
“The same rules apply to everyone,” commissioner Jack Shea said at the retreat.
“I’m in favor of some participation,” said commissioner Margarette Umphlett.
And commissioner Beverly Boswell also indicated some support for Hatteras financial participation.
Hatteras Island commissioner Allen Burrus did not attend the retreat, but said in a telephone interview afterward that he opposes taxing Hatteras Island to pay for nourishment.
There are many issues on the table and here are just a few of them:
Is it fair to compare the Buxton and the town nourishment projects? The towns are nourishing to save their economic engine — the beach. Dare County has said that it is nourishing the beach in Buxton to save Highway 12 from the encroaching ocean — and the National Park Service is deciding whether to issue a special use permit to allow it on the basis that the highway is in danger.
There is at least one other area on the island that is desperate for nourishment — also to protect Highway 12, and that’s the narrow stretch between Frisco and Hatteras village, which was the site of an inlet caused by Hurricane Isabel in 2003. Will Hatteras Island be asked to pay for that also?
Who will pay? All of Hatteras Island? Buxton property owners?
How much will Hatteras islanders be expected to ante up? A 1-cent tax on real property on Hatteras Island totals about $219,000. How much would be fair for Hatteras to contribute? Five cents? Ten cents?
These decisions will have to be made as the county budgets for the next fiscal year, which begins July 1.
Also according to published reports, county manager Bobby Outten told the commissioners at the retreat that he “will investigate what mechanism the county can use to pay for the Buxton project, have a look at where to draw lines, if any, for raising funds, and pick a rate.”
Also, we can update Chairman Woodard’s efforts to get the governor to declare a state of emergency to speed up the nourishment project. Some property owners are convinced that such a declaration would bring nourishment sooner than the summer of 2016. Some property owners are convinced that such a declaration would bring nourishment sooner than the summer of 2016.
Woodard has now sent two letters to Gov. Pat McCrory — one on Jan. 29 and another on Feb. 24. He said yesterday that he has not received a response to either letter.
One might assume the governor is not interested in declaring a state of emergency for north Buxton.