October 10, 2017

MEMO TO:           Mayor Barber and Board of Commissioners

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

SUBJECT:           Budget Amendment – General Fund

The Board of Commissioners is asked to approve the attached budget amendment formally appropriating an additional $20,000 for legal expenses associated with the Nies v. Emerald Isle case.

The attached budget amendment relies on a total of $1,207 of remaining balances in completed capital project accounts and the appropriation of $18,793 of General Fund balance.  Although I would prefer not to utilize General Fund balance, and believe it will ultimately not be necessary if other General Fund revenues exceed projections, it is prudent for this expense.  As you know, the Nies case was critical for Emerald Isle, other oceanfront communities, and the entire State of North Carolina.  The funds included in the attached budget amendment were used to retain the services of Deutsch Hunt PLLC, a Washington DC “boutique” law firm that assisted with the Town’s effective response to the US Supreme Court earlier this summer.  The NC League of Municipalities, the Town’s general liability insurance carrier, provided the bulk of funding necessary for Deutsch Hunt PLLC’s services.

For many reasons, I am pleased that the Nies case is finally resolved.  The Nies essentially claimed that public trust rights on North Carolina ocean beaches existed only below the mean high water mark (the wet sand beach), and that, as oceanfront property owners, they had the right to determine who, how, when, etc. the general public could use the flat, dry sand beach between the base of the dunes and the water.  Had the Town not prevailed, the historical public use of North Carolina’s ocean beaches and the foundation of the NC coastal economy would have been in question – with potentially devastating consequences.  Importantly, the Nies case resulted in the November 2015 NC Court of Appeals ruling in the Town’s favor, and that ruling represents the very first time the NC courts have directly addressed the public trust question on North Carolina ocean beaches.  That ruling includes a crystal-clear affirmation of the public’s right to use the entire width of the flat, dry sand beach from the base of the dunes to the water, as has been the practice in North Carolina since “time immemorial”.

The Nies case was initiated in late 2011, and lasted for nearly 6 years through 4 different court venues.  Thankfully, the NC League of Municipalities was a dedicated partner on this effort, and covered nearly all of the Town’s legal defense expenses.  The Town’s total expense for the Nies case for the nearly 6-year period was nearly $48,000, including the expenses included in the attached budget amendment.  The Town is fortunate that our legal defense expenses were not more significant.  I am still awaiting a final summary of the NC League’s total expense for the Nies case, however it is in the range of several hundred thousand dollars.

I recommend approval of the attached General Fund budget amendment.