Beach Nourishment Financing

Nags Head's beach nourishment projects are likely the largest locally-funded project of their kind in the United States.

Project financing is typically through a combination of town-wide property taxes, including revenues from municipal service districts, and a contribution from Dare County.  However, FEMA and the State of North Carolina may provide funds to replace sand lost as a result of a federally-declared disaster, such as a large hurricane.

February/March 2021 Update on Beach Nourishment Project Financing
Nags Head’s Board of Commissioners is in the process of creating four additional municipal service taxing districts related to beach nourishment. A municipal service district (MSD) is a defined area within a town where additional property tax is levied to provide projects or extra services that benefit the properties in that district.

In addition, the overall town-wide tax rate was increased so that all property owners in Nags Head, all of whom benefit from a healthy beach, played their part in protecting our town’s future. However, the Board feels the town would benefit from a more sustainable and proportional funding plan. The supplementary revenue from the new tax formula will build up the Town’s beach nourishment fund balance to support future projects and provide more stability for future tax rates. 

This plan better recognizes the benefits of nourishment that extend well beyond the immediate oceanfront. Properties adjacent to, but not directly on the ocean, benefit from reduced overwash flooding and impacts to infrastructure, such as streets, as well as increased property values due to their proximity to a well-maintained recreational beach. And, we know our beach is a key piece of infrastructure from which the entire town benefits. 

Current Municipal Service Districts

  • All properties east of NC 12/South Virginia Dare Trail from Bonnett Street south to Gulfstream Street 
  • All properties east of NC 1243/South Old Oregon Inlet Road from Gulfstream Street south to Nags Head’s southern town limits.

Proposed Additional Municipal Service Districts

  • All properties east of US 158/S. Croatan Highway from Bonnett Street south to Gulfstream Street
  • All properties south of Gulfstream Street to Nags Head’s southern town limits
  • All properties east of US 158/S. Croatan Highway from Eighth Street south to Bonnett Street
  • All properties east of NC 12/South Virginia Dare Trail from Eighth Street south to Bonnett Street.

Important Points

To include a property within an MSD, the project or services delivered must be provided within the MSD boundaries. Therefore, in the future, all properties east of NC12/South Virginia Dare Trail and NC 1243/South Old Oregon Inlet Road will be included in two municipal service districts. The Town believes that the newly established MSDs could be taxed at a nominal rate to pay for current and future planning activities. 

Nags Head’s Board of Commissioners has not yet discussed tax rates; at this time, additional MSDs are being put into place to give the Town more flexibility for future beach nourishment activities. 

Existing and Proposed Municipal Service Districts

Current and Proposed Municipal Service Districts January 27, 2021