Future funding of Coastal Storm Damage Reduction projects was the topic of conversation during a joint meeting called by Carolina Beach Mayor Dan Wilcox Tuesday, April 15.
Present at the meeting were representatives from New Hanover County, its three beach towns, City of Wilmington and the Wilmington and Beaches Convention and Visitors Bureau.
Wilcox said he wanted to set up the meeting after the March 26 New Hanover County Tourism Development Authority Board of Directors meeting, during which the beach towns’ request for an additional share of the county-wide Room Occupancy Tax funds was not supported.
With the beach towns facing no federal and state funding for future beach renourishment projects, Wilcox said all involved should propose other long-term funding options. The most recent renourishment projects for Carolina, Kure and Wrightsville beaches totaled approximately $7 million, $4 million and $8 million, respectively.
Three options presented were a 1 percent ROT increase, a 1 percent prepared food and beverage tax increase and sales tax increase.
Wilcox said the option he keeps coming back to is the prepared food and beverage tax.
“The reason why the food and beverage tax keeps coming up is because the people staying in hotels are already paying their share with ROT,” Wilcox said. “It would also be a tax that local residents pay, but I would hope the lion’s share would be paid by our visitors.”
Of the five North Carolina municipalities that have a food and beverage tax, Wilmington and Beaches CVB President and CEO Kim Hufham said New Hanover County’s collection on that tax would likely fall between Cumberland and Dare Counties. The annual prepared food and beverage collection for Cumberland County is $5.8 million, and the annual collection for Dare County is $2 million.
“We would probably bring in $3 million to $4 million but that is just a guess,” Hufham said.
County finance director Lisa Wurtzbacher said the concern she would have with the food and beverage tax increase is that it would impact county residents. The concern has also been expressed in the county manager’s office.
“That is why we are leaning more towards an additional percent on ROT tax,” Wurtzbacher said. “But I am not speaking for the county commissioners.”
From an additional percent on ROT, the projected countywide ROT collection would be an additional $1.47 million, Wurtzbacher said.
Wurtzbacher asked if any other possible funding sources had been identified, like an increase in sales tax.
Although Wilcox said he did not think an increase in sales tax would be fair to local residents, the group decided to look into how much additional revenue it could generate.
Before the next meeting, tentatively set for April 30, Hufham said she would also contact Cumberland County, Dare County, the town of Hillsborough, Mecklenburg County and Wake County to see how their prepared food and beverage tax system was implemented.
To help handle the financial projections for the three potential funding sources, Wrightsville Beach town manager Tim Owens asked if ROT funds could be used to hire an outside accountant.
Wurtzbacher said she would have to ask the county attorney’s office about the legality of using the ROT funds for that purpose. The proposal would have to be presented to the New Hanover County Board of Commissioners as a budget amendment.
In the meantime, Wurtzbacher said her office would gather rough data and projections for the three possible funding sources before the group’s next meeting.
Although no final decisions came out of the meeting, Wilcox said he felt it was a good start to the conversation.
“It was just meant to get the discussion going,” he said. “No one likes the idea of taxes, but if we want our visitors to keep coming and enjoying our beaches this is where we are at. We need to get ahead of the curve and we are behind it now.”
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