Town of Holden Beach answers questions ahead of pier bond referendum

HOLDEN BEACH, NC (WWAY) — The Town of Holden Beach has released answers to frequently asked questions about a bond referendum voters will have a chance to weigh in on this fall.

The Town of Holden Beach plans to issue $7.3 million in general obligation public improvement bonds to tear down the existing pier and build a new one.

The Town says the bond money can only be used to remove the existing pier and construct a new one. Additional new debt may be needed to construct a new pier building.

Read the entire FAQ below:

1. What is the referendum for?

It is only for the demolition and removal of the existing pier and construction of a new pier. It does not cover the debt on the initial purchase, building a pier building, maintenance, or any operating costs.

2. Can the bond money be used to construct a new pier building?

No, the bond money can only be used to remove the existing pier and construct a new one. Additional new debt may be needed to construct a building. (Source: Bond Counsel)

3. Can the bond money be used to pay for the pier property?

No, the land was purchased in March 2022 at a cost of $3.2M financed at 3.18% over 15 years with an annual debt service cost of $260k. (Source: Audit Reports)

4. Why do we need to vote on a referendum?

Issuing General Obligation (GO) bonds (which use taxing authority as collateral) is the best way to fund the construction of a new pier, and General Obligation bonds require a voter referendum. (Source: State Statute § 159‑61 (a))

5. When will we vote on the referendum?

The referendum will be forwarded to the Brunswick County Board of Elections and appear on the November 4th ballot for voter consideration.

6. What will the referendum ballot say?

It will have a YES or NO vote on approving the bonds. (Click on Yes or No for exact wording.)

7. Will all property owners get to vote?

No, only voters who are registered to vote at Holden Beach, NC can vote on the referendum. (Source: State Statute § 159‑61 (a))

8. Will all registered voters in Brunswick County get to vote on the referendum? 

No, only voters who are registered to vote at Holden Beach, NC can vote on the referendum. (Source: Board of Elections)

9. How much will it cost to build a new pier?

The estimated cumulative cost over the life of the bond, using the highest interest rate charged for similar debt over the last 20 years, would be $11,586,345 (consisting of $7,300,000 principal amount of bonds plus $4,286,345 of interest.

10. Are grants available to pay for the pier?

There may be grant opportunities available in the future. Our lobbyist has been working with town staff to search for grant opportunities but none have been available this early on in the process. (Source: Budget Meeting Minutes)

11. How will this referendum affect my property taxes?

Your taxes may increase to a maximum as follows:

The estimated amount of property tax liability increase for each one hundred thousand dollars ($100,000) of property tax value to service the cumulative cost over the life of the bond provided above would be $31.60 per year.

For a property on the island with a value of $1,000,000 estimated cost will be:

($1,000,000 /$100,000) x $31.60 = $316.00 per year

$316.00 x 20 years = $6,320

12. If the referendum fails, can we still build the pier? 

Funding the pier will be more challenging, since it is unlikely, at least in the short-term, that the Local Government Commission would approve an alternate form of financing for a project that did not pass at a General Obligation Bond referendum. (Source: Bond Counsel) Other forms of paying for the pier have not been explored at this time and may be challenging based on costs outlined in our Capital Improvement Plan.

13. If the referendum passes, are we required to build the pier?

No. It is unlikely that the LGC would not approve debt passed at a referendum. The Board of Commissioners would then have to take action to actually issue the bonds in the future and they have discretion as to whether to issue some or all of the bonds or none at all. (Source: Bond Counsel) The Town has seven years to issue the bonds.

14. How long is the term of the bonds?

The expected term of the bonds is twenty (20) years.

15. Can we insure the pier against storms?

No, a new pier will be uninsurable for wind or water. (Source: Town of Holden Beach)

16. What is the design of the new pier?

It is a wooden, pedestrian-grade, 996-foot-long pier with a covered “T” at the end – very similar to the design of the original pier, but taller and stronger for better protection from waves. (Source: HDR report)

17. How deep will the water be at the end of the pier?

Between 10 to 20 feet, depending upon the tide, according to beach profile elevation survey conducted by the engineer. (Source: HDR report)

18. How much will it cost to maintain the pier?

The engineer’s estimated funding needs for maintenance, preservation, rehabilitation, and major capital replacement projects to extend its life to 50 years is $3.6M, which equates to $72,560 per year on an annualized basis. (Source: HDR report).

19. How much will it cost to operate the pier?

The engineer did not estimate operating costs.

20. How will the pier generate revenue for the town?

Operating revenues have not been established.

21. Will the pier generate a profit? 

We do not know.

22. Can parking revenue pay for the pier?

All parking revenues are currently being used to pay other expenses, including the debt service cost of the pier property purchase. (Source: Holden Beach Town Budget)

23. Can we save the existing pier?

According to our engineering studies, it would cost more to repair the pier than to replace it, and the old pier does not comply with current building codes and would not be as strong as a new one. (Source: HDR report)

24. How much will it cost to remove the existing pier?

The $7.3M Not-To-Exceed estimate includes removal of the existing pier. There is no cost estimate for removing the existing pier without replacing it. (Source: HDR report)

25. Will there be a new pier building?

Most likely, but there are no viable plans or cost estimates at this time.

26. Is a Public-Private Partnership a viable approach to pay for the pier or the building?

It would be a very complex arrangement that must meet the requirements of the PARTF grant.