SEADRIFT – Another round of certificates of obligation was approved by the Seadrift City Council Thursday, Nov. 18, to pay the match for an EDA grant for harbor improvements.
The council agreed to issue up to $1 million to cover the $862,500 match for the grant due in large part to fluctuating costs of materials.
“Is one million enough?” asked Councilwoman Peggy Gaines. “Given the costs going up, the match could change when it’s bid out, and it could be higher than what we approved.”
Matt Glazer with Urban Engineering said they were looking at putting alternates in the bids, but there could be some issue with the scope of work for the grant.
The grant covers dredging in the harbor to minus-4 or minus-5 depending on the bidding, repairing the bulkhead, and dredging the channel.
Also, the council discussed ways to pay for the certificates.
Mayor Elmer DeForest said one option was to take money from the fund for streets, created when the council set aside 3 cents from taxes to pay for streets.
“There are a lot of streets that need work, and I don’t like the idea of robbing Peter to pay Paul,” said Gaines.
“Neither do I. I just wanted to let you know what was possible,” said DeForest.
Another option was possible harbor rent increases to pay for the certificates.
DeForest said he compared the city’s rates with the Westside Navigation District’s and other cities.
“Ours are woefully low,” said Councilman Kenneth Reese.
“We don’t want them to go fifty miles away and get a better rate,” said Gaines. “We don’t want to drive away business.”
“It’s a big jump but in the grand scheme of things way overdue,” said Councilwoman Tracey Johnson.
The city’s lease rates are yearly. Current rates are $400 for small stalls of which there are 25, which brings in $10,000; $500 for large stalls of which there are 58, which brings in $29,000; and $14 per linear foot of which there is 3,659, which brings in $51,226; and possible added linear footage of 107 feet, which brings in $1,498 for total revenue of $91,724 plus $15,000 from the $1 per barrel oyster tariff.
The council was presented with three rate increase options for the 2022 budget:
Option 1: raise the rent for small stalls by $230 from $400 to $630 (57.5 percent); raise rent for large stalls by $285 from $500 to $785 (57 percent); and raise the linear foot rate by $9 from $14 to $23 (64.29 percent) for proposed revenues of $147,898. These proposed rates leave the city with an estimated $56,174 available to make the payment, which is $35,962 short of the amount needed to make the $92,136 payment.
Option 2: raise rent for small stalls by $330 from $400 to $730 (82.5 percent; raise rent for large stalls $385 from $500 to $885 (77 percent); and raise the linear foot rate by $13 from $14 to $27 (92.86) for proposed revenue of $171,262. This raise leaves the city with an estimated available income of $79,538, which is $12,598 short of the required $92,136.
Option 3: raise rents for small stalls by $360 from $400 to $760 (90 percent); raise rent for large stalls by $400 from $500 to $900 (80 percent); and raise the linear foot rate by $16 from $14 to $30 (114.29) for proposed revenue of $184,180. This raise leaves the city with an estimated available income of $92,456 and a positive difference of $320.
“I think it is in our best interest to do option three,” said Johnson.
“Given the uncertainty of the market, it would be foolhardy not to do a million just to cover our butts,” said Gaines. “Further improvements will make the harbor more valuable to our customers, in my opinion.”
The council reached a consensus on option 3 to fund the certificates.
Also, during the meeting, the council approved the creation of two special interest-bearing accounts to handle the funds from the sale of certificates of obligation for the wastewater treatment plant and the harbor and assigned signatories to the accounts.