September 11, 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 2 formal actions to revise the project scope and financing plan for the planned beach nourishment project in eastern Emerald Isle in winter 2018-19. These actions would result in a larger overall project (with a greater sand volume and slightly longer distance), and would increase the total project budget from $9.2 million to $11.104 million. However, the Town’s additional cost for the expanded project scope is only $159,500, with a combination of State and County funds covering the remainder of the additional project cost. (Attachment 1, Attachment 2)
Revised Project Scope
As discussed with the Board in January and July, the planned Eastern Emerald Isle Beach Nourishment Project includes the placement of approximately 471,000 cubic yards of sand along an ~ 3 mile segment of beach between the Indian Beach town limits and the Eastern Ocean Regional Access (a total distance of approximately 15,711 linear ft). If the Board approves the revised project scope presented on September 11, the project would now include the placement of approximately 574,000 cubic yards of sand along an ~ 3 ¼ mile segment of beach between the Indian Beach town limits and the Ocean Drive “dog-leg” vehicle ramp. This additional volume would increase the placement rate along most of the project area from 30 cy / linear ft to 35 cy / linear ft, and would increase the berm width and storm protection along the original project area. The project would also be extended by an additional ¼ mile (to a total distance of approximately 17,140 linear ft) from the Eastern Ocean Regional Access to the Ocean Drive “dog-leg” vehicle ramp, and would make it easier for Town emergency and service vehicles to travel from the vehicle ramp to the eastern oceanfront area in the future.
The total project budget adopted by the Board in January and July is $9.2 million. As you know, the Town originally requested a total of $4.6 million from the State of North Carolina for the Emerald Isle project in January. However, as part of the FY 18-19 State budget, the NC General Assembly appropriated a total of $5 million for beach nourishment work in Emerald Isle, Pine Knoll Shores, Indian Beach, and Salter Path, and Emerald Isle’s proportional share of this State appropriation was estimated at $1.883 million in July. In July, the Board approved a revised financing plan that maintained the same project scope and total budget ($9.2 million), but increased the contribution from Carteret County and the Town to provide the necessary funds. The financing plan for the planned beach nourishment project this winter was revised in July as follows:
January 2018 July 2018
Original Financing Plan Revised Financing Plan
NC Coastal Storm
Damage Mitigation Fund $ 4,600,000 $ 1,883,000
Carteret County Beach
Commission $ 3,450,000 $ 5,488,000
Town of Emerald Isle
(Future Beach Nourishment $ 1,150,000 $ 1,829,000
TOTAL $ 9,200,000 $9,200,000
In July, it was expected that Pine Knoll Shores would participate in the planned beach nourishment project (with Emerald Isle, Indian Beach, and Salter Path) this coming winter, however, Pine Knoll Shores is now working with the Town of Atlantic Beach on a potential project involving the US Army Corps of Engineers’ planned dredging of Beaufort Inlet / Morehead City Harbor in winter 2019-20. This potential project is more cost-effective for Pine Knoll Shores, and will likely result in more sand placed in their community. Thus, Pine Knoll Shores will not participate in the originally planned project with Emerald Isle, Indian Beach, and Salter Path, thereby resulting in an additional allocation of State funds to Emerald Isle.
In light of the additional allocation of State funds, and in an effort to maximize the storm protection and recreational benefits associated with this project, I am recommending that the project scope be expanded as described above. The additional volume of sand (~ 103,000 cubic yards) and distance (~ ¼ mile) results in an additional cost of approximately $1.904 million, however, all but $159,500 of this amount would be funded by the State and County. If the Board approves, the financing plan would be revised as follows:
July 2018 September 2018
Revised Financing Plan Revised Financing Plan
NC Coastal Storm
Damage Mitigation Fund $ 1,883,000 $ 3,150,000
Carteret County Beach
Commission $ 5,488,000 $ 5,965,500
Town of Emerald Isle
(Future Beach Nourishment $ 1,829,000 $ 1,988,500
TOTAL $ 9,200,000 $11,104,000
The Carteret County Beach Commission has already approved the additional $477,500 necessary from the County for this revised project scope, and this additional amount is consistent with the previously discussed model whereby the County provides 75% of the required local funding from room occupancy taxes specifically reserved for beach nourishment efforts.
The NC Division of Coastal Management recently issued the State permit necessary for this project, and the associated Federal permit is expected in the coming weeks. The engineering consultant, Moffatt & Nichol, will be soliciting construction bids later in September, and we expect to have bids in hand by late October. Assuming reasonable bids, the Board will be asked to approve a construction contract at the November meeting.
The Board should note that the project is being bid in cooperation with Indian Beach and Salter Path, and the bids will be solicited with two schedule options: one option to construct the project during the winter of 2018-19, and a second option for the dredging companies to construct the project during the winter of 2019-20. If the construction costs for both options are comparable, I recommend that the Town proceed with construction this coming winter (2018-19), however, if there is a significant cost savings by waiting until winter 2019-20 then the Board may wish to delay the project until that time.
Budget Amendment – Future Beach Nourishment Fund
The attached budget amendment formally appropriates an additional $159,500 from fund balance in the Future Beach Nourishment Fund for the revised project scope. If the Board concurs, the Town’s total contribution for this project would increase from $1,829,000 to $1,988,500.
As of June 30, 2018, the Future Beach Nourishment Fund is projected to have a total fund balance of slightly more than $2.1 million. The July adjustment and this new adjustment would reduce this fund balance to approximately $1.3 million. The Town’s next planned use of fund balance in the Future Beach Nourishment Fund is currently scheduled for FY 21-22 for a potential realignment of the Bogue Inlet channel and beach nourishment in western Emerald Isle, with a projected Town cost of approximately $1.25 million. With anticipated additional annual appropriations to the Future Beach Nourishment Fund over the next 3 years, we project that the total fund balance in the Future Beach Nourishment Fund will be approximately $3.75 million by the beginning of FY 21-22.
Capital Project Ordinance Amendment
As noted above, the estimated cost for the eastern Emerald Isle beach nourishment project would increase to $11.104 million, and the attached capital project ordinance amendment reflects the funding sources outlined above.
The Board should note that, with the elimination of Pine Knoll Shores from the project scope, they will no longer share in the remaining design and construction administration costs on a pro-rata basis. Thus, the Town’s estimated cost for these services in the attached capital project ordinance would increase from $270,000 to $472,500. This estimate is likely very conservative, as we expect the total cost of these services to be further reduced. As discussed previously, the County is funding 75% of the design and construction administration costs.
I recommend approval of the attached capital project ordinance.
I look forward to discussing the revised project scope and financing plan for the eastern Emerald Isle beach nourishment project with the Board at the September 11 meeting.