To learn more about how beach nourishment projects work, click here for an informative document from the American Shore and Beach Preservation Association
Dredging typically occurs over the summer months because the ocean is much calmer this time of year in comparison to the winter season. Calm waters also create a safer environment for crews working on the offshore dredge. During the winter months rough sea conditions can frequently shut down dredging operations, driving up project costs and decreasing productivity. In addition to posting on the Town of Duck website, Dare County maintains the More Beach to Love website, which will provide project information for all project areas in the county.
However, because this project involves the design and construction of an engineered beach profile, certain restrictions with regard to hardened structures will continue and beach pushes are no longer permitted within the project area.
Dredging typically occurs over the summer months because the ocean is much calmer this time of year in comparison to the winter season. Calm waters also create a safer environment for crews working on the offshore dredge. During the winter months rough sea conditions can frequently shut down dredging operations, driving up project costs and decreasing productivity.
The proposed 2022 project will still depend upon revenue from MSD taxes to pay debt service for a five-year bond we will issue to cover approximately $2.4 million of the $7 million project. Of the total project, $2.4 million, or 34% is being reimbursed by FEMA as this is the estimate of the damage caused by Dorian. We were awarded a $1.45 million grant from NC Division of Water Resources for our project and the County will cover $796 thousand, or 11% of our total project cost.
The original rates associated with these MSDs were, in FY 2020-21, determined to no longer be necessary to fund the debt for the 2017 project so the rates were adjusted to a level that continues to cover debt service. Specifically, estimated debt service principal costs for the renourishment project were proposed to be divided equally between MSD-A (all properties in the project area) and MSD-B (only oceanfront properties in the project area) while accounting for a percentage of needed revenue from other general fund sources.
In Fiscal Year 2020-21 the tax rate for MSD-A dropped to $0.1296 and MSD-B to $0.285 due to both the revaluation and the adjustment in the amount of funding required to meet debt obligations. In order to fund the final debt service payment for the 2017 project, the rates for both MSDs are proposed to remain unchanged in the FY 2021-22 budget. Maintenance of the project through renourishment is expected to occur in calendar year 2022 and the actual debt service payments, beginning in FY 2022-23 will require continued collection of MSD taxes at rates set during the preparation of that budget approximately a year from now.
Debt service costs and other associated project costs for the renourishment project are paid from the Beach Nourishment Capital Reserve Fund which receives revenue from MSD taxes and, per State Statute, a percentage of our total sales tax revenue. This percentage is the same ratio as the MSD tax levy is to the total tax levy. Of the total $1.5 million in budgeted revenue for this fund in FY 2021-22, 42% comes from MSD-A (all properties in the project area), 23% from MSD-B (only oceanfront properties in the project area), 21% in sales tax (Town general fund) revenue, and 14% from Dare County.
The upcoming 2022 project will continue to use this cooperative model. The Dare County communities of Duck, Southern Shores, Kitty Hawk, and Kill Devil Hills are currently in the process of working with an engineering firm to design and permit the proposed 2022 project collaboratively in order to achieve considerable time and cost savings. Through a collaborative partnership between the Towns and Dare County, both County and local funds will be leveraged to construct the beach nourishment projects saving millions of dollars in construction costs. In addition, all four Towns and the County regularly meet to communicate and work together on developing a plan that continues to communicate information regarding the project to the public. The website morebeachtolove.com hosts information on all of the nourishment projects occurring in Dare County.
The dredging contractor will be announced once the bidding process for the project is completed.