NEW HANOVER COUNTY — In North Carolina state law often dictates where revenue collected by a municipality can be spent, for example, citations from red-light cameras can only go towards local schools. So what about parking meter funds? Where does that money go? Can it be used to help pad a municipality’s general fund?
Well, in general, the answer is no. Parking meter revenues must be spent on parking and traffic-related expenses — that is, unless you are the Town of Wrightsville Beach or any of the other municipalities in New Hanover County.
According to General Statute 160A-301, “Proceeds from the use of parking meters on public streets must be used to defray the cost of enforcing and administering traffic and parking ordinances and regulations.”
The exception to the law
So how is that the Towns of Wrightsville Beach, Kure Beach, and Carolina Beach, as well as the City of Wilmington are able to use parking revenues as a source of income for general use?
It stems from a decades-old law first written in 1998.
The law was simple, less than a full page in length — its title: ‘An act to allow the town of Wrightsville Beach to use proceeds from on-street parking meters in the same manner in which proceeds from off-street parking facilities are used.’
And it did just that.
So what does the law say about off-street facility funds? It turns out cities are able to utilize these funds in a broader sense compared to meter fees.
“Revenues realized from off-street parking facilities may be pledged to amortize bonds issued to finance such facilities, or used for any other public purpose,” it reads.
This opened the door to a huge revenue source for the Town of Wrightsville Beach. No longer were they restricted to the narrow use that the law lays out for the rest of the state.
The law did clearly state that this was only relevant for the Town of Wrightsville Beach, that is, until 2001. A new law to replace the 1998 law titled, ‘An act to allow certain municipalities in New Hanover County to use proceeds from on-street parking meters in the same manner in which proceeds from off-street parking facilities are used’ lifted the restrictions for all four municipalities in the county.
But not everyone utilizes the law — Wilmington still has its own enterprise parking fund, city spokeswoman Malissa Talbert said. That fund is dedicated for parking projects like new parking garages, upkeep of current spaces, and more (the city did recently tap into its parking fund to help cover cost related to River Place, although officials pledge to pay it back).
Implications of the law
Since the first law was written back in 1998, tracking down the actual reason the law was written is difficult, but exploring the implications of it is not.
As previously stated, the law regulating parking meters in North Carolina reads, ‘proceeds must be used to defray the cost of enforcing and administering traffic and parking ordinances and regulations.’ This greatly limits what municipalities can do with their collected revenues.
It also could impact how much municipalities choose to charge visitors for parking since the uses for the revenues are severely limited (for example, other cities cannot use the cost of parking to defray property taxes for residents, build a new town hall, etc). Because’s there’s little benefit to the town, there is a natural limiting effect on parking meter rates.
But once that new revenue source is open, financially, it would make sense to increase parking rates since that money could be used for any public purpose. In theory, whenever these towns need to add revenue to their general fund, parking rate increases could be the solution without burdening property owners.
In fact, in Wrightsville Beach, visitors to the island pay almost the same amount in parking fees as residents do in ad valorem taxes.
Related: Visitors to Wrightsville Beach paying nearly as much in parking fees as homeowners do in taxes
In the Fiscal Year 2019-2020 budget, property tax projections came in at $3.30 million — the town’s parking fees are expected to bring in $3.22 million.
“The parking program for the town continues to prosper … If this revenue source had to be replaced using Ad Valorem tax, it is estimated that the tax rate would go from $.1275 to $.2444. Meter revenue has increased significantly over the past several years due to a higher number of visitors and the town adding on-street parking spaces throughout town to increase the total number of spaces available,” according to this year’s budget from Wrightsville Beach.
Thanks to the ‘prosperous parking program,’ Wrightsville Beach increased its parking rates and extended the hours that meters are required for visitors — rates went from $15 a day to $17 and parking enforcement hours were extended.
It’s a similar story in the Town of Carolina Beach. In 2018, parking revenues brought in $1.5 million to the town’s general fund and although many residents criticize the cost of parking in Wrightsville Beach, it is not much cheaper in Carolina Beach.
At $17 a day, the rate is the same but hourly, metered spaces are slightly less, $2.50 an hour — but parking hours go all the way until 10 p.m. and do not end until the end of October.
Questions remain as to the legality of creating a revenue source for just a handful of municipalities in the state while restricting it to others but for now, it seems that parking fees will continue to directly benefit residents of these beach towns by keeping taxes low.
Town Manager of Wrightsville Beach Tim Owens did not respond by the time of publication to questions regarding the birth of the 1998 law (Owens was not Town Manager at that time). Port City Daily will update this article if comments are provided by the town.
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