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County Commissioners Approve Funding For Fall 2014 Beach Nourishment Project

Left to right: Carolina Beach Council member Leann Pierce, Mayor Dan Wilcox, Congressman Mike McIntyre, Council members Steve Shuttleworth and Gary Doetsch and Town Manager Michael Cramer.  McIntyre visited the area last week to tour the beachfront and talk about the future of beach nourishment funding. The Town's 50-year federal program expires in December and efforts are underway in Washington to extend that program.

Managing Editor

CAROLINA BEACH - The New Hanover County Board of Commissioners voted at their May 5th, meeting to approve using $1.86 million dollars of Room Occupancy Tax (ROT)  revenues collected from hotels and motels to help fund pumping 500,000 cubic yards of sand onto the beach in Carolina Beach later this year.
The Board took no action on a request from neighboring Kure Beach to use the same funding source for a nourishment project later this year.
Layton Bedsole, New Hanover County Shore Protection Manager, said, "In fiscal year 2014 the Army Corp of Engineers was able to bring forward approximately $2.1 million dollars from last years" budget and, "And in this years fiscal year 2014 work plan they were able to secure $2.7 million dollars. With that that's $4.8 million total. We were fortunate to have $727,000 from the State and we are asking tonight $1.863 million to make a $7.4 million dollar project."
The $1.863 million would come from the County's Room Occupancy Tax Fund.
Visitors to hotels, motels and short-term vacation accommodations pay a Room Occupancy Tax (ROT). Portions of that tax are used to fund beach nourishment in Carolina Beach, Kure Beach and Wrightsville Beach. Other portions of the ROT are used for tourism promotion and to fund tourism related events that put more heads on beds in hotels.   
The Town's 50 year Authorization Agreement with the Federal government is set to expire at the end of this year. This could be the last time Federal money is received for such a project if congressional leaders do not reauthorize or extend the Town's Project Cooperation Agreement.
Bedsole said the Army Corp of Engineers, "Needs to award this project by October 1st and have the project well underway by the middle of December. Considering the issues associated with the Carolina Beach project federally, staff supports this recommendation."
Carolina Beach just received an infusion of sand pumped onto the beach last year.
Bedsole said, "New Hanover County is very fortunate in that we have three coastal storm damage reduction projects. All three were congressionally authorized in 1962. The Carolina Beach project and Wrightsville Beach project started in 1965 and the Kure Beach project didn't start until 1996 following Hurricane Fran. The Carolina Beach authorization does expire the middle of December. We are working hard in Washington DC to try and get some extension language in the Water Resources Development Act. It has not come out of conference yet and we anticipate it to come out of conference at the end of May hopefully."
County Manager Chris Coudriet explained, "For those folks who visit and stay in hotels, motels and other rental units, those individuals do pay 6% room occupancy tax. The room occupancy was originally 3% and it was added 3% to it a number of years ago. That first 3% is what we are talking about here tonight."
The second 3% is used for tourism related expenditures with half going towards marketing and the other half towards tourism related expenditures that "put more heads on beds" such as funding fireworks displays, festivals and helping fund lifeguards.
 Coudriet explained, "That first 3% was split into a 60-40 relationship. 60% out of that first 3% goes to what people often hear referred to as the "sand fund". Those are the dollars that we use to match federally authorized projects and customarily as the vice chairs point, we usually share in the non-federal point on a 50-50 relationship. But we draw those dollars out of the room occupancy tax exclusively funded through families and businesses that spend the night in facilities that are charged for collecting 6% on the room occupancy tax. So that is not a use of general fund dollars. Those dollars were authorized by the General Assembly for a specific purpose and we can only use them to match nourishment projects. We use those dollars not to do maintenance of the Carolina Beach Inlet, not to do the Mason's Inlet project from the 1990's, but specifically for placing sand on the beach at Wrightsville, Carolina and Kure Beaches."
He said, "This is not a regularly scheduled renourishment cycle. It is the federal governments attempt to give a final nourishment to the beach with the ability to use federal funds. The number of dollars that we thought would be expected... is what the State planned for. The federal government, for everybody’s good fortune was able to identify additional dollars which is why the match from the local side is different."
Coudriet explained, "This was an unplanned and off-cycle  nourishment project. It was done in 2013 and the next regularly scheduled cycle is 2016 and that's where there is the high probability there will be no federal funding available" for Carolina Beach.
The Board of Commissioners approved the funding request and moved on to a request from the Town of Kure Beach for consideration of Kure Beach and Army Corp of Engineers advancing a three-year coastal storm damage reduction project cycle.
The Kure Beach Town Council previously sent a request to the County. That request, signed by Mayor Dean Lambeth, explained, "The Town of Kure Beach is submitting the enclosed resolution for your consideration. The purpose of the resolution is to request funding in the amount of $1,747,000 from the New Hanover County (NHC) Room Occupancy Tax (ROT) fund for a storm damage reduction project in 2014."
The letter states, "The Town was contacted by the US Army Corps of Engineers (USACE) with a request to consider moving the scheduled 2016 storm damage reduction project to 2014. This is the same timeframe the Town of Carolina Beach is scheduled to receive their last authorized storm damage reduction project. The USACE stated it would be financially beneficial to reduce mobilization costs by providing this service to both towns, island wide, at the same time. Federal funding is available for this project whether it is done in 2014 or 2016 in the amount of $4,745,000. State funding is also available in the amount of $808,000."
The letter states, "As per the attached updated budget estimate from the USACE, the non-Federal ROT amount needed to do the project is $2,555,000. Subtracting the available State funding in the amount of $808,000, leaves a balance of $1,747,000 from the ROT fund to do the project in 2014. The non Federal ROT amount needed to do the project in 2016 is $1,277,500. This results in an additional $469,500 needed from the ROT fund in 2014 to proceed. The Town Council is seeking the Board's support and approval of the request from the USACE by authorizing the funding in the amount of $1,747,000 in 2014."
County Manager Chris Coudriet explained in a response to the Town of Kure Beach, "I have calendared your ask for the May 5 county commission meeting immediately following the Carolina Beach nourishment question. I am not recommending the Board of Commissioners proceed with using ROT dollars for a Kure Beach nourishment at this time. My rationale is two-fold."
Coudriet explained, "1. The federal funds currently on hand were appropriated to the Corps for design (FY 2015) and construction of the project (FY 2016) following the customary 3 year nourishment cycle. I am not convinced that spending dollars early is the right course of action. 2. If the Corps, state, and county advance the project now, it is likely we will not have federal funds available a second time for the next Kure Beach nourishment planned in FY 2016. In this eventuality, the ROT will carry a disproportionate share of the next regularly- scheduled nourishment, and that ROT share would otherwise be unnecessary because we advanced a project to spend federal dollars early."
He explained, "It is not lost on me that I am recommending that we advance the customary nourishment cycle for Carolina Beach, which is what you are asking for your beach, but in the Carolina Beach circumstance I'm of the opinion it is the right course of action. After December 15, 2014 Carolina Beach is no longer eligible for federal funding, and this off-cycle project is the last chance to maximize federal funds, reduce the overall impact on the ROT for Carolina Beach nourishment, and this specific project may help reduce the scope and size in FY 2016 when the Carolina Beach project is dependent upon ROT, [maybe] state, and town funds only. In the absence of federal funds in FY 2016, Kure Beach would be responsible for 17.5 percent of the project cost."
During the Monday May 5th meeting, Mayor Dean Lambeth asked the County Commission to have a letter written for publication in a newspaper explaining why the County didn't support funding their request. He said, "We four are going to be on the hot seat for this. We would appreciate it. There were federal funds available."
The Board decided to take no action on the request based on the opinion of the County Manager and no letter will be written by the County as requested by Lambeth.