The Beach Nourishment Committee has
prepared these questions and answers in order to focus the
community’s discussion on the viability and feasibility of the beach
nourishment project(s). The information is the best available that
the committee has at this time.
1.
What is the
cost of beach nourishment, including financing and insurance?
The Feasibility Study for Shoreline Protection (August, 2004)
identified several components and their cost of the recommended
plan: 1) nourish 16,600 feet, Central Section, $5.8 million; 2)
nourish 20,320 feet, South Section, $8.73 million; 3) nourish 20,000
feet, North Section, $9,221,880; 4) Dredge New River Inlet & Cedar
Bush Cut, $2,064,820; 5) Mitigation fill Onslow Beach, $389,520 and
6) Engineering and design during construction 3%, administrative
cost 2% and contingency 10%. In September, 2004 the Town and
Coastal Planning and Engineering, Inc. signed a professional service
contract for Final Design and Environmental Studies with a
project area shoreline defined as the North Section (20,000 feet)
and the Central Section (16,500 feet). Recent meetings of the
Project Development Team (PDT) have noted environmental difficulties
with dredging Cedar Bush Cut and Mitigation fill for Onslow Beach.
Thus, the beach nourishment project would consist of: 1) North
Section: $9,221,880; 2) Central Section: $5.8 million; 3) Dredge New
River Inlet: $4,000,000 and 4) Engineering, Design, Administrative
and Contingency 15%, $2,850,000; Total Cost: $21,871,880 rounded to
$22 million. This is initial construction cost and does not
include periodic nourishment cost. Financing is the cost of
borrowing the necessary funds (bonds) for a specific term and at the
market rate for the securities. Actual financing cost will not be
known until the bonds are sold in the market. However, for our
purposes we can use an example for illustration.
$3,096,612 ($258,051 per month) is the annual debt
service required to retire $22 million for a term of 8 years with an
interest rate of 3%. In regard to insurance, there will be some
insurance cost. The Town of North Topsail Beach has not ever sold
bonds before so the Town’s bonds are not rated. Therefore, the
rating of the bonds will reflect this and the rating will determine
the interest rate. Insurance cost will be included in the bond
rating and interest rate.
2.
Would the
project include the North, Central and South sections?
Currently, the beach
nourishment project consists of: 1) North Section, 2) Central
Section and 3) Dredging New River Inlet, but not the South Section.
3.
How could
the Town exclude the South Section
and obtain voter approval?
The South Section is in a non-Coastal Barrier Resources Act (CBRA)
area and is eligible for Federal funding assistance. If the Town
moves forward on beach nourishment and the South Section is not
included, then at a minimum the Town would need to assure the
property owners in the South Section that the Town would follow
through once the federal government appropriates the money for the
South Section. Of course, one governing body can not obligate a
future governing body.
4.
Is Coastal
Planning and Engineering including all sections of NTB in the
shoreline protection project?
No, currently the
project consists of a North Section, Central Section and dredging
New River Inlet, but not the South Section.
5.
What
Federal and State funds are available for which sections?
Federal funds are
available for the South Section and for dredging New River Inlet.
Federal funds are not available for the North Section and Central
Section since they are in a CBRA area. State Funds may be available
for dredging New River Inlet. The availability of state funds for
beach nourishment of any sections is uncertain. The State of North
Carolina (Water Resources Division) has been reimbursing the Town
one-half the cost of the local share of the feasibility and design
studies for both projects. How likely are the federal funds?
Recent federal action has not been kind to beach nourishment.
Will there be a positive change in that regard due to the events of
Hurricane Katrina?
6.
Does the
Town proceed with construction as planned in 2007 for the North and
Central Section or postpone and coordinate with the Federal NTB/Surf
City Project (South Section)?
It would seem prudent to
proceed with whatever the Town of North Topsail Beach can support
and afford. The longer the Town waits the higher the project cost,
greater the loss of tax base and infrastructure and a likely
diminishing community support. However, if the Town can not afford
to undertake the project or a portion of the project then a
postponement is advisable.
7.
Can NTB
qualify for bonds in accordance with the Local Government Commission
(LGC)? While the
Town of North Topsail Beach can look at a few indicators, review the
general obligation bond application package and make comparisons to
other Town’s (i.e. Emerald Isle) projects the final determination
rests solely with LGC. Once the Town knows the project cost and is
ready to proceed the Town is advised by the staff of the LGC to
schedule a pre-application conference in Raleigh.
8.
Can funds
including grants be obtained from other sources, such as Onslow
County, the State of North Carolina, Federal government including
the Department of Defense?
The
Town of North Topsail Beach would be extremely shortsighted not to
thoroughly investigate these potential and all other sources of
funds.
9.
What is the
maximum term for general obligation bonds?
The term of the bonds
depends on what the bonds are being used for. Beach nourishment is
viewed differently than water and sewer. One factor is the life of
the asset. Obviously, water and sewer has a longer life expectancy
than say beach nourishment. The Town of Emerald Isle’s beach
nourishment project was approved by the LGC for a term of 8 years.
10.
What is the
expected date for the federally assisted NTB/Surf City Project
(South Section)? At
a recent meeting a Corps of Engineers staff member mentioned FY
2010-12 as possible funding years. Nevertheless, it is anybody’s
guess as to when the Town of North Topsail Beach (NTB) would
actually receive the funding assistance.
11.
Does the
Town have other beach nourishment project options rather than the
$30.7 million project?
Yes, but the question becomes, will the entire Town support the
reduced geographically covered project area? Or stated another way,
are voters willing to pay for a smaller project area when they
realized their immediate area may not be nourished initially.
12.
Should the
Town of North Topsail Beach establish more than one tax district?
It is certainly true
that all property owners’ benefit from beach nourishment since it
protects the Town’s greatest asset. However, the major point in
support for more than one district is the perception on the part of
many property owners that ocean front property owners benefit to a
greater degree than other property owners with beach nourishment and
thus, the oceanfront property owners should pay accordingly. On the
other hand, one tax district would be simpler to administer and
explain. Consequently, there are pros and cons on the issue of the
number of tax districts. In the end, the bond referendum becomes a
referendum on beach nourishment. The Town will need to structure
the vehicle to pay for the project for a successful bond
referendum.
13.
What
options are there to ad valorem taxes to pay for the general
obligations bonds?
If the Town of North
Topsail Beach had the money on hand it would not need to borrow the
money. Since beach nourishment projects do not involve an operation
that produces revenue that can pay for the bonds, then the only
option is general obligation (GO) bonds. GO bonds pledge the full
faith and credit or taxing ability of the Town in order to pay for
the bonds (debt). Consequently, there are no other options to
raising taxes in order to pay for GO bonds. Certainly, other funds
such as the Town’s accommodation taxes, sales taxes, county, state
and federal funds can contribute to reduce the debt service needed.
14.
What is the
total amount paid to Coastal Planning and Engineering (CPE)?
Since July 1, 2002 the Town of North Topsail Beach has paid CPE
$902,775. Since July 1, 2002 the Town of North Topsail Beach has
received $319,795 from the NC Division of Water Resources,
Department of Environment and Natural Resources. The Town has
submitted request for reimbursement for $144,887.50.
15.
Does CPE
anticipate any real estate issues?
Tom Jarrett stated in an email to the Town: “As
far as real estate issues, we would need construction easements to
allow the contractor and survey crews to have access to the beach.
We would need to designate staging areas and access points in order
to get the pipeline and heavy equipment on and off the beach. The
construction easement would include the area seaward of the ocean
toe of the existing dune. Since the fills are larger than 50cy/lf,
we will have to survey the seaward line of vegetation to comply with
CAMA requirements. This pre-project vegetation line will
be more-or-less a permanent line that will control future set
backs. I plan to develop an option with a dune for the town's
consideration. That option would require an easement for
additional land landward of the toe of the dune.”
16. Is the Town close
to meeting public beach access requirements?
Tom Jarrett has advised us, “in
regard to public beach access, since the town is relying on funding
assistance from the State, the State will probably have some access
requirements. I will check with John Morris to see what these
requirements will be. Note that the State does not have the same
access requirements as the Corps of Engineers.”