1. Town of Oak Island Funding Workshop Series #3 May 19 & 21, 2016 PETER A. RAVELLA, PRINCIPAL PAR CONSULTING, LLC

2. First of All Thank You! From Peter, Lilli and The PARC Team

3.  About 125 Phone Calls & Emails  Public Forum Comments ◦ 93 comments ◦ 52 commenters ◦ Topics include: revenue suggestions, sea turtle concerns, day-trippers, affordability, third party revenue, development line, parking, tax zones  Workshop Participation 166 So Far ◦ Workshop 1: 75 attendees + 13 online (88) ◦ Workshop 2: 61 attendees + 17 Online (78) THANK YOU TO ALL WHO HELPED SHAPE THE FUNDING PLAN Public Comments & Participation

4.  We can’t fight Mother Nature  Take it slow, think phases, trust matters  Affordability is a big concern  New Funding Ideas – Beach Badge, ¼ mile zone  The beach does/does not matter to the community  Folks up front should pay more or pay all  Everyone in town should pay something  We need help from 3 rd Party Funders  Paid parking & Beach Badges are great & horrible What We Have Been Hearing Phone Calls, Emails and the Discussion Board

5. I. How Much Money Do We Need? II. How Much Money Do We Have? III. How Do We Get the Rest of the Money? ◦ Ad Valorem Options ◦ New Beach Zones ◦ Supplemental or 3 rd Party Funds IV. Taking it Slow – Down Payment Option Open Discussion

6.  Mar. 17, Thursday, 6-8 pm Project Overview  Mar. 19, Saturday, 1-3 pm Project Overview  Apr. 21, Thursday, 6-8 pm Funding Options  Apr. 23: Saturday, 1-3 pm Funding Options  May 19, Thursday, 6-8 pm Funding Plan  May 21, Saturday, 1-3pm Funding Plan Beach Funding Plan due to City June 3 Beach Funding Workshop Schedule

7.  Attend the Workshops in Person or On-Line  Use the On-Line Public Forum  Review and Comment on the Draft Plans  Call Peter: 512-784-3565  Call Lilli: 512-968-6816  Email Peter: peterravella@mac.competerravella@mac.com  Email Lilli: lillijay14@gmail.comlillijay14@gmail.com How You Can Participate www.oakislandbeachplan.com

8.  Create a Strict Dedicated Fund ◦ Project Design & Permitting ◦ Beach Nourishment & Dune Creation ◦ Project Monitoring  Use Accommodation Taxes First & Increase to 3%  Seek 3 rd Party Funds- State, County, Parking, Beach Badge  Everyone Contributes Something  Beachfront & Near Beachfront Pay More  Seek to Limit cost to $75/month on $500,000 property and $35/month on a $250,000 property Let’s Take a Step in the Right Direction Funding Principles What Wish to Recommend

9. The Need for the Project Steve Foster: Oak Island Beaches are Distressed & Need for the Project is Critical

10. Oak Island 1999 North Topsail Beach, Oct 2016

11. II. How Much Money Do We Need? Like Shopping for a New Car Kia Rio Chevy Malibu Cadillac CTS

12. Project Costs Depend on Borrow Source & Renourishment Interval Coastal Engineering/Planning Evaluation

13.  Preliminary Costs: When to Build and Estimated Shortfall to Be Made Up with Other Funding Sources (Loan, County, State)  Based on 3% Interest Rate for Costs and Revenue Five Year Initial Project (The Kia Rio)

14.  Preliminary Costs: When to Build and Estimated Shortfall to Be Made Up with Other Funding Sources (Loan, County, State)  Based on 3% Interest Rate for Costs and Revenue 10-Year Initial Project (The Chevy Malibu)

15.  Preliminary Costs: When to Build and Estimated Shortfall to Be Made Up with Other Funding Sources (Loan, County, State)  Based on 3% Interest Rate for Costs and Revenue 25-Year Initial Project (The Cadillac CTS)

16.  Five Year Project – The Kia Rio ◦ $29 - $38 Million ◦ Ideal Savings Rate: $5 Million per year ◦ Build the Project: 2022  Ten Year Project – The Chevy Malibu ◦ $35 - $46 Million ◦ Ideal Savings Rate: $5 million per year ◦ Build the Project: 2024  Twenty-Five Year Project – The Cadillac CTS ◦ $44 - $57 Million ◦ Ideal Savings Rate: $5 million per year ◦ Build the Project: 2026 How Much Money Do We Need? How Much Money Do We Need?

17. III. How Much Money Do We Have? Accommodation Tax Revenues

18. ACCOMODATION TAX ACCOMODATION TAXREVENUES THIS IS WHAT WE HAVE!

19. IV. How Do We Get the Money We Need? “Taking A Shot” to Fill The Gap

20. Revenue Target To Buy “A Kia Rio” Beach Project, City will Need Third Party Help

21.  First two rows of homes along ocean  All property west of 42 nd Place  Zone Value: $509,939,370  Number Parcels: 1,488  Average value: $342,701 New Beach Zones Zone 1 – Beachfront

22.  Based on Quarter Mile Walk to Beach Access  Seaward of Davis Canal  Seaward of Oak Island Drive  Zone Value: $474,652,877  Number Parcels: 1,874  Average value: $253,283 New Beach Zones Zone 2 – Near Beach

23.  All properties outside Zones 1 & 2  Landward of Davis Canal  Landward of Oak Island Drive  Zone Value: $1,491,907,264  Number Parcels: 8,686 (estimated)  Average Value: $280,223 New Beach Zones The Rest of the Town

24. Property Values by Zone Median Home Value (2010-2014): $254,800

25. Beachfront & Near Beach Zones West End Area

26. Beachfront & Near Beach Zones Middle Island Area

27. Beachfront & Near Beach Zones East End Area

28. Graduated Ad Valorem Rates (Cents Per $100 Value) Exploring Ad Valorem Options Options Zone 1 Beachfront Zone 2 Near Beach Rest of Town Option 1 16108 Option 2 14108 Option 3 12108

29. Option 1: 16-10-8 Plan

30. Option 2: 14-10-8 Plan

31. Option 3: 12-10-8 Plan

32. Ad Valorem OptionRevenues Option 1: 16-10-8 Plan $2,409,559.23 Option 2: 14-10-8 Plan $2,310,630.99 Option 3: 12-10-8 Plan $2,211,702.75 Comparison of Ad Valorem Options Zone 1 (Beachfront): Two cent change in rate results in change of $98,928.24 in revenue

33. Estimated Revenue, 2016-2022 16-10-8 Plan

34. Zone Current Rate Rate Increase New Rate Off-Beach Area27.5835.5 Zone 2: Near-Beach27.51037.5 Zone 1: Beachfront27.51643.5 PARC’s Rate Concept All rates are in cents per $100 value Town-wide rate of 8¢ would begin in 2016 Additional Beachfront Rate (+8¢) in 2017 Additional Near Beach Rate (+2¢) in 2017

35. Annual Cost, If Implemented

36. Monthly Cost, If Implemented

37. Supplemental Revenue Sources The Third Party Funding Options

38. Fund SourcePotential RevenueAction Required State of North Carolina UnknownNew Legislation Brunswick County $166,000 to $500,000 Commissioner Vote Sales Tax Increase (0.25%) $3 million totalVoter Referendum Accommodation Tax (+1%)$450,000New Legislation Paid Parking SystemTBDCity Council Action Beach BadgeTBDCity Council Action Rental Property SurchargeNoneProhibited in Jan 2015 Supplemental Revenue Options Third Party Funders

39. Brunswick County FY 16-17 Budget Proposal

40. Sales Tax Rates 2014: A referendum to increase the local sales tax rate by 0.25% failed by a 60-40 margin. The increase would have generated about $3 million.

41. Accommodations Taxes

42. ● GOAL: Capture usage costs associated with Oak Island visitors ● Exempt OI residents & property owners ● Only active during peak-season months ● Apply to street parking seaward of Oak Island Dr. ● Mobile Phone & Text based payment system ● Low start-up costs & enforcement costs ● Provider: Passport, Charlotte, NC ● www.passportinc.com/parking/ Paid Parking Program Can we create a program that works for Oak Island?

43. ● Residents & Property owners display city decal ● Example visitor beach parking fee schedule: ◦ $6 half day (Sunrise to Noon) ◦ $12 whole day (Sunrise – Midnight)  Easy to use payment system ◦ No meters -- Mobile payment provider ◦ Passport Parking (based in Charlotte, NC) ◦ Cash boxes in case you forget your phone REVENUE: Unknown At This Time Possible Parking Plan

44. NJ Beach Badges: Could Brunswick County Lead the Way?

45.  Goal: Beach Access Entry Fee from Visitors  Peak-season only  Daily & seasonal passes  Sold and verified at beach access points  Residents and property owners exempt  Cost: $5-$15/day or $20-$80/season  Possible “Free Days” ie Sundays  An alternative to paid parking NJ-Style Beach Badge Program

46. New Jersey Beach Badge Programs

47. Example NJ Beach Badge Rates

48. Beach Badge Revenue Two NJ Counties

50. A Few Reminders Where we’ve Been

51.  The beach is an economic and community asset  Erosion is a natural process that can adversely affect public and private property and the economy  Beach towns should work together to address erosion as best they can  Funding streams must be as persistent as the waves

52.  Within the Community -- The funding plan must be “fair and equitable” in the eyes of most in the community  Funding Process -- must be transparent, have wide participation, and be flexible in exploring options  To Adopt a Funding Plan -- Community support must precede local government action

53. We’re all in this together: Everyone has a stake in the health of the beach Community History Matters: Oak Island dedicates about $895,000 in Accommodations Tax Revenues a year to its beach fund but no Ad Valorem Tax Revenues Our Work: Prepare the town financially to build a beach project

54. Time is money Build Beach Fund over time Start saving early – OI Project is 5 years away Minimize Debt Financing to save money Where possible, use ad valorem tax revenues, not fees (as property taxes are deductible w IRS) Beach Management is an on-going task and on-going cost. Savings plan must be too. 54

55. Funding Strategies can become complex And the discussions and debate can continue for months and years, losing precious time trap, find a reasonable funding solution that works for you and move forward to implement your beach program Best Rule: Avoid the perfection trap, find a reasonable funding solution that works for you and move forward to implement your beach program 55

56. 56  Town of Oak Island Public  Brunswick CountyPublic  State of North Carolina Public  Beachfront & Near-beach Owners Private  Off-beach Owners Private  VacationersPrivate ◦ Accommodations Tax Revenues (Rentals) ◦ Parking Fees ◦ Beach Badges

57.  Purpose: Make Local Project Eligible for Federal Reimbursement if the Beach is lost or damaged in a “Declared Disaster”  FEMA Beach Requirements:  Monitor - Annual Beach Profiles  Maintain - Annual Maintenance & Regular Renourishment  Fund - Establish Stable & adequate funding source* Secret #6: Secure “FEMA Beach” Eligibility

58. 1. Create a Dedicated and Restricted Beach Fund Account 2. Dedicate and Protect the Current 2% Accommodation Tax Revenues to the Beach Fund, seek to increase Beach Fund share to 3% (of the local 5%) 3. Work to Increase County contribution to $500,000/year via Sales Tax or Other Means over next 5 years 4. Work to Secure State Funds over next 5 years 5. Adopt 8 cent increase in Ad Valorem Rate in 2016-17 Budget 6. Adopt Full 16-10-8 Plan in 2017-18 Budget 7. Plan & Implement in 2017 a Paid Parking or Beach Badge Program What We Would Like to Recommend

59. Taking it Slow Affordability Option to Advance Permitting & Design and Save the Down Payment

60.  2016: Adopt 4 cent Rate town-wide  2017: Implement Zone 1 Rate at 12 cents  2017: Implement Zone 2 Rate at 8 cents  This will: 1.Introduce ad valorem revenue to your fund 2.Move forward with Monitoring, Permitting & Design 3.Allow Engineers to Refine Project Cost 4.Begin Saving Down Payment for Construction 5.Delay your project by two-years If You Can’t Do it All, Take A Step

61. Go Slow Approach Annual Revenues Beginning 2017

62. Go Slow Approach Fund Balance by 2022

63. $990,599.80 Per Year With Current Accommodations Taxes, this Increase Would Fund Beach Monitoring, Sand Source Investigation, and the Final Design & Permitting Of your Future Beach Project. Little Savings Toward Construction of Beach Nourishment Project Revenue from 4 Cent Increase

64. THIS IS A COMMUNITY DECISION. TALK TO YOUR CITY LEADERS. LET THEM KNOW IF YOU ARE WILLING TO SUPPORT THIS MINIMAL STEP FORWARD.

65. PARC