By Michelle Wagner | Outer Banks Voice on March 17, 2021
During a March 16 public hearing, the Southern Shores Town Council listened to more than an hour of public comment regarding the creation of Municipal Services Districts (MSDs) that will be levied an additional property tax to help fund the town’s beach nourishment project in 2022. The project is slated to cost an estimated $14.7 million and pump 848,300 cubic yards of sand on the town’s 3.7-mile stretch of beach.
Comments from property owners during the hearing largely came from those in two of the proposed districts that are faced with a significant tax increase. The council is set to take its first vote in formally defining the MSD boundaries at its April 13 meeting. If that action passes, it will take a second vote as required by law at its May 4 meeting. The tax rate, however, will be officially set with the adoption of the budget, which typically occurs in June.
“The council has, in all the discussions, been pretty uniform and unanimous that every town property will be taxed, all property should be taxed, and everyone should pay their fair share,” said Town Manager Cliff Ogburn told council members prior to the hearing. “The question for you to determine is what is that fair share.”
The issue of fairness indeed came up at the public hearing, where a number of people raising concerns about how the beach nourishment tax burden was being distributed.
Rod McCaughey, who lives on Eleventh Avenue, said that even though his home is not on the ocean, he thought the proposed tax on beachfront property owners was too high. “The proposed beach nourishment is not being done to protect individual properties,” McCaughey said. “The enrichment of our beachfront will enrich all homeowners. The considerable tax increases needed to fund the project should be spread more evenly among all property owners.”
The Dare County Beach Nourishment Fund will cover $7.8 million of the project cost, with Southern Shores taxpayers footing about $6.1 million of the bill through a town-wide tax and the two MSDs. A state grant of $1.4 million will also go toward the cost.
The proposed boundaries for MSD 1 would include all properties east of Ocean Boulevard/NC 12 beginning at the southern town limit and extending to Ocean Boulevard; all properties east of Ocean Boulevard from the split at Ocean Boulevard/NC 12 extending to Hickory Trail; and all properties north of Hickory Trail that abut the Atlantic Ocean, extending to the northern town limit.
MSD 2 would consist of all properties in MSD 1; all properties located east of Ocean Boulevard/NC 12 and Duck Road/NC 12 from the southern town limit to the northern town limit; and all properties located west of an abutting Ocean Boulevard/NC 12 beginning at the southern town line extending north to 137 Ocean Boulevard, and abutting Duck Road/NC 12 beginning at 139 Duck Road extending north to 149 Duck Road.
According to the numbers that were presented as an example of tax levies, in addition to paying the town-wide increase of .0275, property owners in MSD 2 would be faced with a beach nourishment tax of $0.0625 per $100 of assessed value. MSD 1 property owners would be saddled with an additional $0.145 increase along with having to also pay the town-wide tax and the MSD 2 levy.
That means town-wide, property owners with a home assessed at $500,000 would see an annual tax bill increase of $137.50 while those in MSD 2 would see an increase of $450 and those in MSD 1 would face a $1,312.50 increase.
Michael Iwashchecko, who owns two properties within the proposed MSD 1 and said his taxes are set to increase by about $2,600, told council members that he is adamantly opposed to beach nourishment.
“I just think that the taxation plan that you guys are advising is wholly unfair,” he asserted. “I’m against all beach nourishment, that’s why we bought houses three and four back… I’m not a fan of pumping money into the ocean.”
For her part, Lisa Emig asserted that, “I think that so many of the other town residents use the oceanfront property, and it seems not appropriate to me that we’re being assessed twice in the MSD district.”
At the conclusion of the public hearing, Southern Shores Mayor Tom Bennett acknowledged the sentiment and concerns of the speakers.
“I did pick up on an overarching theme of more equitableness, which is something I think we need to consider very carefully,” he concluded.