Oak Island can proceed both this winter and next with two sand renourishment projects funded mostly with disaster relief money without emptying the bank, but a larger, long-term effort is likely to require imposing municipal service districts, special assessment areas and borrowing money, financial advisors told town council during Tuesday’s meeting.

The town is largely set for sand this winter from Jay Bird Shoals that will go roughly where the 2018 sand effort stopped and move west. It’s being called the “Hurricane Matthew project,” but Finance Director David Hatten said it also includes millions to restore sea turtle nesting habitat, first enhanced in 2001. Johnny Martin of Moffatt & Nichol said that sand and 300 feet of berm have been lost. The town’s share of the $15.6-million project is $5.2-million, which includes some work not covered by the state and Federal Emergency Management Agency (FEMA).

Along with natural erosion, dunes and the berm along Oak Island have taken a heavy hit from three recent hurricanes.

“Most of the oceanfront is vulnerable to damage,” said Martin.

The second project would pick up in late 2021 where the other ended and bring sand farther west, past Middleton Avenue. Called the “Hurricane Florence project,” it will cost $17.8-million and Oak Island is expected to pay $8.9-million.

Oak Island can afford to pay these costs upfront and wait for federal and state reimbursement if it borrows about $3-million from the general fund, said Doug Carter of Carter and Associates.

Channel dredging and clearing of the Atlantic Intracoastal Waterway crossing at Lockwood Folly this winter will also provide some sand for the worst-hit spots on the west end. The U.S. Army Corps of Engineers will pay for the majority of that job, which is an ongoing project since the inlet is dynamic.

Bigger project

The bigger question facing town leaders is whether and how to engage in a long-term effort to protect all beachfront properties from storms expected every 10 or 25 years. This, Martin said, could cost $40-million to $49-million and would require $32-million worth of maintenance every six years.

Oak Island’s annual general fund government budget is less than $12-million.

These projects envision putting 1.7-million to 2.1-million cubic yards of sand along the beach. For comparison, a typical dump truck holds about 10 cubic yards.

Martin said the timing will affect the price.

The costs are obviously substantial, Carter said, adding the good news is that Oak Island is in good shape to borrow roughly $12-million at favorable interest rates. Carter reminded council his firm suggested imposing a 10-cent property rate tax for sand projects in 2017; council went with 2-cents. Council later dedicated the “revenue neutral” money it would otherwise have raked in from the property tax evaluation change to sand (also about 2-cents).

Having more equity in the bank would have made a difference, he said while answering questions from council.

Carter presented six possible funding methods and suggested a blended approach that would involve special assessments (based on the benefit accrued by the specific property), municipal service districts (a similar concept) and borrowing money.

Carter said that one issue with assessments is that the project has to begin within four years of the first bill or else the town has to pay back the money with interest – not a place Oak Island wants to go.

“You have ways to get this done,” he said.

Town Manager David Kelly said he expected Carter to return to speak in mid-January, following council’s annual budget retreat.

Development rules change

In other business, council unanimously approved changes to the parking rules that accommodate the concept that part of the floor space of a brewpub is used for production and restricted to the public. The change was unanimously recommended by the Planning Board, and it allows a different calculation when requiring off-street parking. Michael Bartlett is working on a brewpub that will make beer and serve food off of East Oak Island Drive.