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Sand has become a valuable commodity. Treasure seekers may be looking for a sunken galleon without realizing they are walking on a fortune.
The new gold is the sand along the Delaware coastline. Millions of dollars have been spent, and millions more will be spent to pump sand on the beaches.
What it protects along the shoreline is even more valuable – multimillion dollar businesses and homes nestled within 200 feet of breaking waves.
The sand also secures a thriving tourism industry that pumps $558 million into the economy and provides more than 7,400 beach-related jobs, about 19 percent of all jobs in Sussex County.
In 2003, one of the most ambitious beach replenishment projects in the region was set into motion when federal and state officials announced a 50-year shore-protection plan to improve the 2.6 miles of beach from the northern end of Rehoboth Beach to the southern end of Dewey Beach. The estimated price tag: $170 million.
During the lifespan of the project, an estimated 7 million cubic yards of sand will be required, said Tony Pratt, Delaware Department of Natural Resources and Environmental Control (DNREC) shoreline management program administrator.
Over 50 years, the project will cost $65 million a mile and 2.7 million cubic yards of sand per mile will be pumped. It will cost $3.4 million annually for the lifetime of the project.
The initial Rehoboth-Dewey-Fenwick replenishment project, completed in 2005, cost $18 million. It will cost an estimated $3 million to $4 million every three years to pump more sand on the beach, Pratt said.
The proposed Bethany Beach-South Bethany Beach replenishment project will cost an estimated $14.4 million.
However, the “Beaches 2000 Report to the Governor” committee concluded beach nourishment has merits “as long as the benefits resulting from the nourishment exceeded the cost of conducting the work.”
That statement is the foundation of the state’s policy toward replenishment. An economic analysis was conducted in 1998 and again in 2004 to ascertain that nourishment costs were returning a value higher than the cost.
DNREC Secretary John Hughes pointed out a Beach Replenishment Task Force report showed that without beach replenishment, tourism-related revenues would decrease more than $30 million in five years. The result would be the loss of more than 600 beach jobs, reduction of wages and salaries by $1.6 million and reduction of state and local revenues by $2.3 million.
It’s hard to put a price tag on the potential loss of beachfront property, which has increased in value because of beach replenishment.
Replenishment funding
Funds for most beach replenishment projects follow a formula of 65 percent federal, from the U.S. Army Corps of Engineers, and 35 percent from the state. Once the initial project is completed, the percentage switches to 50-50 for the nourishment stages over the coming years. DNREC has done small-scale, state-funded projects as well.
The state portion comes from an 8 percent state lodging tax paid by everyone who spends a night in a Delaware hotel or motel. One percent of the total tax collected is dedicated to replenishment.
In 2004 and 2005, the state collected $16 million annually, according to the state chamber of commerce. Of that total, 12.5 percent is allocated to beach replenishment, or about $2 million during those two years. The same percentage of the tax is allotted to the state and county tourism offices, including local chambers in Sussex County.
The largest percentage of the lodging tax - 62.5 percent - is deposited in the state’s general fund.
Pratt said that based on upcoming projects and federal funds available, the General Assembly also places funds for beach replenishment in the state’s annual bond bill that is then matched by the tax lodging tax funds.
Pratt said the revenue has been increasing each year, and there has never been a problem matching the bond bill money. But because of several factors, the funding mechanism may be in jeopardy in the future.
The high cost of beach replenishment, constant sand nourishment of completed projects, proposed projects and the potential loss of federal funding are affecting the state portion of the beach management bill.
Other states handle funding for the nonfederal portion of beach replenishment in various ways. While Delaware covers 100 percent of the nonfederal cost, in Florida the state pays up to 50 percent, and in states without dedicated beach replenishment funding, local sponsors may have to pay 100 percent of the nonfederal share.
Not everyone agrees with the Delaware funding system. Bill Winkler, a retired marine biologist who owns Treasure Quest Shoppe in Ocean View, has followed the beach management issue since the formation of the beach replenishment task force in the late 1990s. He said more funds for beach replenishment should come from those who benefit the most.
“Because of replenishment, property owners along the beachfront have had their properties double or triple in value, and they have even received a reduction in their flood insurance,” he said. “Yet, they are paying the same as a guy in New Castle County. It’s not equitable. Shouldn’t they be paying more? Everybody who lives within the first two blocks of the ocean should be paying more, because they get the most benefit from replenishment.”
Winkler said he has tried, with no success, to get this message across to legislators and the public.
“I have been fighting this for 13 years. A lot of people don’t care and don’t have any understanding,” he said.
Washington connection
So far, Delaware’s Washington delegation has secured more than $20 million in federal funding for beach replenishment. “All evidence points to the overwhelming economic benefits of beach replenishment,” said Rep. Mike Castle.
He cited a report from the American Shore and Beach Preservation Association that beach nourishment works as a means of repairing erosion and providing recreation while producing at least $4 in national economic benefits for every $1 of federal money spent.
“I realize my responsibility to provide the necessary funding to protect these national treasures. The beaches provide us with recreation opportunities, natural habitat protection, and provide a barrier against storms and flooding of our coasts,” Castle said.
Funding for beach replenishment projects relies heavily on federal participation. However, in recent years, there has been movement in Washington to change the funding ratio to put more emphasis on the state/local share or to completely remove the federal share.
Castle, along with coastal state legislators, has been leading the fight to assure there are no changes in the current funding system. “I will continue to work to ensure the additional funding is secured to complete the Bethany/South Bethany project, as well as federal funding for future replenishment needs along Delaware’s coastline,” said Castle.
Public vs. private
One of the most divisive issues surrounding replenishment funding is who pays when private beaches are involved.
At least two Cape Region private beaches - Sea Colony and Cape Shores - are currently in need of nourishment.
Sea Colony is currently in the limelight as a private beach wanting to take part in the upcoming Bethany-South Bethany replenishment project.
“Sea Colony would not pay one cent for any part of the federal project,” Pratt said. “Anything they want done on their beach is 100 percent on them. They would pay all costs.”
Pratt said the proposed federal/state project would provide a taper up to the border of the Sea Colony and stop. “Sea Colony has requested a permit to pump more sand than the taper,” Pratt said. “The additional sand would be a benefit to the Bethany and South Bethany projects and just possibly delay the time needed to come back and nourish the beach.”
Although Sea Colony is proposing to cover the costs of the project, the sand is not included as a cost, Pratt said.
“There are those who say that they should pay the state for the sand,” he said.
Environmentalist groups claim there is a cost associated with the sand, and Sea Colony should pay for it. Environmental groups requested a hearing questioning DNREC about the use of public money on private lands, but no ruling has been issued.
Common Cause of Delaware spokesman John Flaherty said DNREC should force Sea Colony to allow public access to the beach because public funds are being used for beach replenishment of the development’s private beach.
“This one-half mile private beach replenishment project is financed by the public with public tax dollars,” said Flaherty. “At present, there is no public access to Sea Colony’s private beach. Nor is there a provision for public access, despite the fact that the public is paying for the sand to replenish the beach.
“Common Cause believes the public should have access to beaches that are restored or replenished with public funds.”
Steve Callenen of the Sierra Club agrees with Common Cause. “The Sierra Club does not challenge Sea Colony’s right to replenish its beach or the need for this action,” he wrote in a letter. “However, public money should not be used to subsidize private beaches where public access is denied.”
Callenen pointed to a 1988 beach preservation report, “Beaches 2000,” which stated: “It should be the state’s policy that private beach communities that do not promote access to the general public should pay the full cost of any beach management project for that community.”
Army Corps connection
The U.S. Army Corps of Engineers is the federal agency charged with managing beach replenishment projects. “Although we manage projects, like the Rehoboth-Dewey project, we work very, very closely with DNREC. It is very much their project too,” said Ed Voight, an Army Corps public affairs spokesman in the Philadelphia office.
The corps is the recipient of the federal money secured by Delaware’s Washington delegation.
The corps has an annual budget of around $4.3 billion. The Heritage Foundation estimates that approximately $510 million is allocated to beach replenishment, although there is no specific line item in the agency’s budget.
Voight said federal money is hard to come by for beach replenishment. Several projects in New Jersey are not getting any federal funds this year.
“It looks like only one project [Long Beach Island, N.J.] is getting any money, and we haven’t see that before in any cycle of nourishment funding. Funding is really, really tight,” he said.
He said there is still a chance, however, the Bethany-South Bethany replenishment project will get additional funding in the next congressional session.
Effect on Bethany
Next on the replenishment schedule is the Bethany-South Bethany project, which is $4 million to $5 million short of funds needed for completion.
“We could split up the project, but it looks like we will still come up a little short. We are looking at a way the state might be able to contribute more. We are trying to sort this project out,” said Voight.
He said this project is the largest of the three on the Delaware coastline in the amount of sand needed for replenishment.
The tightening of federal funds could affect any additional funds for the Bethany-South Bethany project and the ongoing nourishment for Rehoboth, Dewey and Fenwick.
Carol Olmstead, the new mayor of Bethany Beach, said she is aware of $3 million in federal money for the pending replenishment project, with another $3 million scheduled to be approved in the next congressional session.
“Until we hear about the federal funding, there will be no announcement how much state funding we have. Right now, we don’t know,” she said.
She said the town is playing a waiting game as the funding package is put together. “There is no question that replenishment is needed. It is absolutely essential for protection of property because the ocean is encroaching upon properties in Bethany,” said Olmstead. “Between Ernesto and the last week’s storm battering the shore, there is no beach.”
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