Furious over legal fees, Bald Head Island residents point to bigger issues than ferry sale

After a 21 percent increase in their property taxes, Bald Head Island residents and property owners say they want to see the village end its costly, years-long legal battle over the island’s ferry system and focus on improving the island’s critical infrastructure.

To date, the village of Bald Head Island has spent nearly $2 million in its cases challenging the sale of the ferry system. Last year, the North Carolina Utilities Commission ruled in favor of the village’s request to regulate the barge and tram system.

Robert Drumheller said the legal battle should have stopped with that victory.

“My view is that the village has achieved its objective of having oversight over the barge system and parking facilities,” he said.

Drumheller is a full-time Bald Head Island resident and member of the Bald Head Island Association’s board of directors, which represents more than 2,000 property owners on Bald Head Island. He called the ongoing legal battles over the ferry sale and the village’s first right of refusal “unnecessary” and an “unproductive use of funds.”

Scott Thomas, another full-time island resident, believes the village had an opportunity to purchase the ferry when it was part of the Bald Head Island Transportation Authority, but challenged negotiated sales price, and then submitted its own offer to purchase the system. A third offer was later negotiated with SharpVue, a private company, and the village challenged the sale on the grounds it had a right of first refusal.

“So, we’ve paid $2 million in legal fees to bid up the price of the ferry,” he said. “Now, I don’t even know what we’re suing for. I don’t think you can obligate somebody to sell you something if they don’t want to.”

State treasurer weighs in

Both Drumheller and Thomas would like to see the council focus on upgrading the island’s critical infrastructure. Thomas also would like to see more of a focus on “conservation and preservation of the island’s historical and cultural assets.”

But not everyone believes the village’s legal challenges are unnecessary.

State Treasurer Dale Folwell believes the village is doing what’s necessary to ensure the “certainty, safety, and sovereignty” of the ferry system and equated the ferry to a highway since it's the only method of transportation to and from the island.

When it comes to the significant tax increase, Folwell said he was not “specifically aware” of the rate of the increase, but he was aware of the ongoing legal expenses.

“I’m confident that the city leaders at the village of Bald Head Island are not increasing taxes because they can,” Folwell said. “They’re doing it because they should.”

Village responds

Carin Faulkner, spokesperson for the village of Bald Head Island, said she hasn’t heard from residents about the tax increase since the budget hearing in May. During that hearing, four residents, including Drumheller, spoke about the increases and asked the council to end the ongoing ferry litigation.

When it comes to infrastructure, Faulkner shared a recap from a February 2023 budget retreat where the village’s public services director said while it is “nowhere near having any demand issues,” it is “being proactive” and working toward being “shovel-ready” with a wastewater treatment plant project in 2024. Faulkner said the island has received an Asset Inventory and Assessment Grant from the state to help with the project.

Faulkner did note the village has 26 miles of paved roads, and recent pricing indicates repaving all the roadways would cost $13.5 million. While no money has been included in the fiscal year 2024 budget for paving, the island is working to update its “near-term” and “five-year paving plan.”

What's next?

At this point, no one is sure when the Utilities Commission will decide on the sale of the ferry system, or when the village’s Right of Refusal case will be decided. According to the most recent document — a brief filed by the public staff of the North Carolina Utilities Commission on May 22, 2023 — staff believes it's unnecessary to establish the rate of the regulated parking and barge operations at this time, and those rates should continue as they are now.

But the village is continuing to fight the sale of the ferry system and related assets, and the fiscal year 2024 budget includes $500,000 for legal fees relating to the ferry system cases.

Recent filings indicate changes within the village’s legal team. On July 28, 2023, the village filed a motion to withdraw counsel, requesting that Craig D. Schauer be removed from all dockets in which he is listed as the counsel of record for the village. The motion noted the village continue to be represented by counsel from Brooks, Pierce, McLendon, Humphrey & Leonard, LLP in such dockets.

Bald Head Island Limited and Bald Head Island Transportation are also not showing signs of letting up. On August 2, the parties filed an amended lawsuit in Brunswick County adding “slander of title” and “tortious interference with contract” to their claims against the village. In the lawsuit, Bald Head Island Limited and Bald Head Island Transportation allege that the village’s claim of Right of First Refusal is invalid because it contained a clause noting it would “become effective only upon approval by the North Carolina Public Utilities Commission,” and the village has never sought that approval.

People on both sides of the issue are eager for the litigation to end.

“I’m not a lawyer, but I look forward to the day when the sale of this ferry system is on a path not only where we don’t have to talk about it, but where we don’t have to worry about it,” Folwell said.

Thomas hopes Bald Head Island will move its focus away from the legal battle on to more pressing issues like improving infrastructure and the environment.

“I love Bald Head,” Thomas said. “I think Bald Head was and still can be a great place for families to live, work and play.”

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This article originally appeared on Wilmington StarNews: Bald Head Island continues costly legal battle over ferry