NC - North Topsail Beach finds alternative path to finance beach nourishment after withdrawing from federal project
NORTH TOPSAIL BEACH — The Town of North Topsail Beach Board of Aldermen approved two resolutions Wednesday to help alleviate some of the town’s debt and allow it to move forward with its beach nourishment projects.
The board approved two Special Obligation Bonds (SOBs) for $9 million and $9.2 million. SOBs are authorized by the state as an alternative revenue for towns to finance projects. This will cover the upfront costs of reimbursable Federal Emergency Management Agency (FEMA) work, as well as pay off existing debt from nourishment work done nearly seven years ago.
According to the town’s financial advisor Doug Carter, SOBs are the preferred method of beach nourishment financing for many coastal North Carolina towns. Since SOBs are not treated legally as debt, and do not require town revenue as collateral, it makes them more appealing.
“I want folks to understand this is very important financially for the Town of North Topsail Beach,” Mayor Joann McDermon said at the meeting. “[W]thout SOBs, we couldn’t fund the beach nourishment project in phase 5 because we have no cash.”
The approval comes after the town chose to withdraw from the federal U.S. Army Corps of Engineers Coastal Storm Risk Management Project, a 50-year beach nourishment project, which would have covered its southernmost 4 miles of beach. North Topsail Beach chose not to sign the formal agreement with neighboring town Surf City in July 2021 once it learned it would owe nearly $16 million up front for its portion.
Last month, Mayor Joann McDermon told Port City Daily the Local Government Commission (LGC) would never approve additional spending or financing for that project until its current $17 million USDA loan is paid off. The town obtained the loan in 2015 to place 600,000 cubic yards of sand on the same southernmost 4 miles of beach (known as phase 5) that the federal project would have covered.