Memo-01-09-2018-Item-11

January 9, 2018

MEMO TO:        Mayor Barber and Board of Commissioners

FROM:             Frank A. Rush, Jr., Town Manager

SUBJECT:       Eastern Emerald Isle Beach Nourishment Project - (Summary & Suggested Motions)

The Board of Commissioners is scheduled to consider 5 formal actions associated with a planned beach nourishment project in eastern Emerald Isle in winter 2018-19.  If approved, these 5 actions would facilitate the placement of approximately 471,000 cubic yards of sand on approximately 3 miles of ocean beach, at a total estimated cost of approximately $9.2 million – funded by a combination of State, County, and Town funds.

Project Details

As discussed with the Board at the October 2017 meeting, Town staff have been working with Carteret County, the Town of Pine Knoll Shores, the Town of Indian Beach, and Moffatt & Nichol (the County’s and towns’ consulting engineer) on a planned beach nourishment project that would address the most immediate beach nourishment needs in each community.  The most recent beach profile surveys have been reviewed, and this data has been considered along with “on the ground” observations and practical considerations to develop a beneficial and fiscally-responsible project scope.  This planning effort has resulted in a proposed multi-jurisdictional project that includes the placement of more than 1.5 million cubic yards of sand in Emerald Isle, Indian Beach / Salter Path, and Pine Knoll Shores, at a total combined cost of approximately $28 million.

Approximately 471,000 cubic yards of sand, or approximately 31% of the combined volume, would be placed in eastern Emerald Isle, generally in the area between the Indian Beach town line and the Eastern Ocean Regional Access / “Dog-Leg” vehicle ramp.  The project would involve the placement of approximately 30 cubic yards of sand per linear foot along this ~ 3 mile segment of the beach, and would restore a healthy flat berm to this area (likely adding 50 – 75 feet of additional flat beach width in these areas).  The total estimated cost for the eastern Emerald Isle project is approximately $9.2 million, and would be funded 50% by the State ($4.6 million) and 50% by Carteret County and the Town ($4.6 million).  Carteret County is expected to provide approximately $3.45 million (derived from room occupancy tax revenues specifically reserved for beach nourishment), with the Town providing the remaining $1.15 million (derived from Town property taxes specifically levied and reserved for beach nourishment).

If everything proceeds according to plan, and State and County funding is provided, construction would begin in late 2018 and be complete by April 2019.  The exact sequence of work in Pine Knoll Shores, Indian Beach / Salter Path, and Emerald Isle would be determined by the County and the towns in consultation with the contractor.  The County and the towns would share the significant mobilization / demobilization expense (estimated at $3 - $4 million alone), and each would be responsible for the actual sand volume placed in its jurisdiction.  

As discussed in October 2017, the beach in most of Emerald Isle remains in reasonably good shape, however, the flat beach berm is narrower than desired in some locations, particularly in eastern Emerald Isle.  As you know, the County conducts annual beach profile surveys on behalf of the Town, and the “Master Plan” has established new nourishment “triggers” intended to provide reasonable protection for the 25-year storm event.  Based on the most recent (April 2017) survey event, nearly the entire length of beach in Emerald Isle exceeds the necessary volume of sand in the profile that is necessary to withstand the 25-year storm event.  However, due to the fact that it’s now been nearly 5 years since the last beach nourishment project, the concerns about the flat beach berm width in eastern Emerald Isle, the desire to be as proactive as possible and avoid a future “crisis” condition, the desire to provide as much storm protection as possible, and the potential for State funding, it is prudent to proceed with the proposed eastern Emerald Isle beach nourishment project at this time. (Beach Nourishment Project History)

Resolution Authorizing Design Services Contract with Moffatt & Nichol Engineers

The attached resolution formally authorizes a contract with Moffatt & Nichol Engineers for design services, permitting services, bid coordination, and construction administration services in the amount of $268,657.  This amount represents the Town’s proportional cost (31%) of the overall, multi-jurisdiction contract amount of $866,637.

Moffatt & Nichol (M&N) has served as the towns’ and the County’s beach nourishment consulting engineers for the past decade, and has developed a comprehensive understanding of our issues through its annual beach profile monitoring work, previous nourishment projects, the development of the “Master Plan” for future nourishment activities, and the preparation of environmental documentation for an anticipated 50-year permit authorization.  They have consistently performed at a high level for the Town (and the other towns and County), and are uniquely qualified to perform the services outlined in the attached proposal in a cost-effective manner.

The Board should note that the M&N proposal includes 6 specific tasks, with tasks 1-4 primarily associated with design and permitting, and tasks 5 and 6 associated with the formal bid process and construction administration.  The total cost of tasks 1-4 for Emerald Isle is $112,015, and the total cost of tasks 5 and 6 is $156,642.  Although the attached resolution authorizes the full contract amount of $268,657 for tasks 1-6, the Town will only administratively authorize $112,015 for tasks 1-4 initially.  As discussed earlier and at previous meetings, the project schedule is dependent on State funding, and tasks 5 and 6  will only be authorized after State funding has been secured.

The Board should also note that the bulk of the M&N contract is expected to be funded by the State and Carteret County.  Ultimately, the Town’s total contribution toward the $268,657 contract is expected to be $47,584.  Carteret County would provide the bulk of the initial funding for tasks 1-4.

I recommend approval of the attached resolution.

Capital Project Ordinance – Eastern EI Beach Nourishment Project

As noted, the total estimated cost for the eastern Emerald Isle project is $9.2 million.  The attached capital project ordinance formally appropriates State, County, and Town funds for the project. 

The design services contract is $268,657, and the attached capital project ordinance includes $270,000 for these services.  The total estimated construction cost is $8,724,337, and a total of $8,725,000 is included in the attached capital project ordinance.  I have also included a $205,000 contingency, which rounds the total project budget to $9.2 million.

The attached capital project ordinance relies on $4.6 million from the new NC Coastal Storm Damage Mitigation Fund, $3.45 million from Carteret County, and $1.15 million from the Town’s Future Beach Nourishment Fund.  As of June 30, 2018, the Future Beach Nourishment Fund is projected to have a total fund balance of approximately $3.25 million, and the use of $1.15 million for this project will reduce that fund balance to approximately $2.1 million for future projects.

I recommend approval of the attached capital project ordinance.

Budget Amendment – Future Beach Nourishment Fund

The attached budget amendment is procedural in nature, and simply transfers reserve funds in the Future Beach Nourishment Fund (an annual fund) to the multi-year capital project ordinance.  The attached budget amendment simply appropriates $1.15 million from fund balance to be transferred to the eastern Emerald Isle beach nourishment project.

I recommend approval of the attached budget amendment.

Resolution Requesting Funding from the NC Coastal Storm Damage Mitigation Fund

After many years and much hard work by many coastal communities, the NC General Assembly established the new NC Coastal Storm Damage Mitigation Fund in 2017 to provide State funding to assist local governments with beneficial beach nourishment projects in the future.  The new fund would provide up to 50% of the local cost of beach nourishment projects in the future.  The new fund was formally established, but no State funding has been appropriated to the new fund yet.  I am hopeful that the NC General Assembly will make appropriations to the NC Coastal Storm Damage Reduction Fund in FY 18-19, and I am seeking to position Emerald Isle (and Pine Knoll Shores and Indian Beach / Salter Path) to be among the first communities that benefit from the new fund. 

The attached resolution authorizes a formal request to the State for $4.6 million, or 50% of the total estimated project cost, for the eastern Emerald Isle beach nourishment project.  If approved by the Board, we will solicit the assistance of NC Representative Pat McElraft and NC Senator Norman Sanderson to secure the requested funds as part of the State’s FY 18-19 budget that will be adopted this summer. If sufficient State funds are included in the State budget, I envision that the Town will proceed with bid solicitation later this summer and that the Board will consider awarding a construction contract this fall.  If sufficient State funds are not included in the State’s FY 18-19 budget, I recommend that the Town delay the eastern Emerald Isle beach nourishment project until winter 2019-20, and seek State funding again in the State’s FY 19-20 budget. 

I remain hopeful that Emerald Isle will be among the first communities to benefit from the new NC Coastal Storm Damage Mitigation Fund, and recommend approval of the attached resolution.

Resolution Requesting Funding from the Carteret County Beach Commission

Since 2001, Carteret County, on behalf of the towns of Emerald Isle, Indian Beach, Pine Knoll Shores, and Atlantic Beach, has been specifically reserving 50% of all room occupancy tax collections in Carteret County for beach nourishment activities.  The beach nourishment portion of the room occupancy tax now generates approximately $3.5 million annually, and the current balance in the beach nourishment reserve fund overseen by the Beach Commission is now approximately $18 million.  As noted numerous times in the past, more than 60% of the room occupancy tax collections in Carteret County are derived from Emerald Isle accommodations.

The “Master Plan’ developed by the Beach Commission for future beach nourishment activities envisions these reserve funds covering 67% - 75% of local beach nourishment costs, and the Beach Commission has provided significant funding for the Town’s previous beach nourishment projects.  The attached resolution formally authorizes a request for $3.45 million from the Carteret County Beach Commission for the eastern Emerald Isle beach nourishment project, and this amount represents 75% of the non-State cost of $4.6 million. 

Current Town Commissioner Jim Normile and former Town Commissioner John Wootten currently represent Emerald Isle on the Carteret County Beach Commission.  The Beach Commission has discussed the planned project in recent months, and is supportive of this effort, so I anticipate that these funds will be approved for Emerald Isle (along with similar requests from Pine Knoll Shores and Indian Beach). 

I recommend approval of the attached resolution.

I look forward to discussing the proposed eastern Emerald Isle beach nourishment project with the Board at the January 9 meeting.