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The Port Royal Sound renourishment project, which involves pumping sand onto the beach and building a groin to stabilize it, is necessary because the beach is eroding at a rate of 60 to 130 feet per year, beach engineers say. Left unchecked, the erosion could eventually threaten privately owned oceanfront property, town public projects director Scott Liggett said.
Estimates for replacing sand at the heel have escalated well beyond planners' original expectations -- from a few million dollars to $12.5 million today.
Until now, taxes on overnight lodging have generated enough money to pay for renourishing the beach every 8 to 10 years, but for the first time in 20 years the town is coming up short.
"I'm concerned," council member George Williams said at a recent Town Council meeting. "We really don't know where the money is going to come from."
Beyond the immediate problem of paying for the Port Royal Sound renourishment, beach erosion raises long-term issues for the town:
• Renourishment is getting more and more expensive, and the town is having trouble raising money quickly to keep up with the costs.
• Engineers can't always predict exactly when and where serious erosion will occur.
• A time could come when the town can't afford renourishment projects as extensive as those in the past. First-row property owners might have to settle for less beach in front of their houses.
• The town can ask the state and federal governments to help pay for renourishment, but such money usually comes with strings. Accepting state money for the Port Royal Sound project, for example, probably would require the town to provide parking at Islanders Beach Park -- now restricted to town residents -- to beachgoers from elsewhere.
WHAT HAPPENED?
The town paid for its early renourishment projects in cash, mostly using a portion of the income from its bed tax, a levy on overnight lodging that generated about $3.9 million last year.
But in 2006, the Town Council decided to fund a$16 million renourishment by borrowing money through a bond issue instead of paying with cash on hand. It had cash -- $12 million in bed tax receipts collected over several years and earmarked for renourishment -- but chose to put it in a fund for emergency renourishment after a hurricane.
At the time the town didn't realize the extent of the Port Royal Sound problem, town manager Steve Riley said. Borrowing money also seemed sensible because interest rates were low, and a strong economy brought more vacationers to the island, which generated about a half-million dollars more annually for beach renourishment than this year or last year, Riley said.
"If we'd known then the scope of this (Port Royal Sound) project, we probably would have had to think about where we put the whole $12 million and wouldn't have borrowed as much," Riley said. Town officials originally thought the Port Royal Sound project would only cost "several million dollars," he said.
Now, as the town prepares for the Port Royal Sound project, it faces a dilemma. More than two thirds of money the bed tax brings in for renourishment is obligated for the next five years to pay off the bond issue. That means the town will have to use a significant portion of the $12 million set aside for post-hurricane renourishment for the Port Royal Sound project. Even that won't cover the costs completely, so the town is considering another bond issue -- as much as $5 million -- to help pay for the Port Royal Sound project.
Paying down the old and new bond debt would consume most of the income generated by the bed tax, leaving little for replenishing funds that would be needed after a hurricane and for the next planned renourishment, scheduled for 2016-2020 .
The cost of that renourishment is expected to be about $17 million.
THE PORT ROYAL PROBLEM
Until 1999, the beach along Port Royal Sound was growing quickly. But it began eroding that year and by 2006 was washing away at an alarming rate. The erosion shows no sign of abating, Liggett said.
"We are losing more sand from that part of the island per year than we are from the balance of the entire shoreline," he said. Engineers believe the rapid erosion is the result of the shifting shape of Joiner Bank, a sandbar in Port Royal Sound that has drifted south in past decades.
The mile-long stretch of beach has consistently lost between 60 and 130 feet of shoreline since 1999, according to a report completed in 2008 by Olsen Associates, the engineering firm that advises the town on renourishment.
The severe erosion has created escarpments -- steep drop-offs where the waves are chewing away at the sand.
"When you come down out of people's properties onto the beach there's a five-to-eight foot drop," said Port Royal Plantation Property Owners Association president John McCann.
"Trees have been uprooted and left there," he said.
As the erosion has accelerated, so have the cost estimates for restoring the beach, Liggett said. The "several million dollars" the town thought the renourishment would cost has ballooned to $12.5 million.
The estimated cost has jumped for several reasons, Liggett said.
Only a few U.S. companies do the work, and some have taken on projects overseas because the recession has made domestic projects scarce. A contractor who brings equipment from abroad would charge the town the cost of the trip, Riley said.
The cost of fuel also would be included in the bill, and gasoline costs more now, he said.
The town must match the sand it dumps on the beach with the sand that's already there, which requires pumping sand from specific locations offshore, Liggett said. The farther the sand is from the beach, the higher the cost.
The town hopes to pay for the Port Royal Sound project by combining money from several sources: the renourishment fund, bed tax revenues, $1 million from the state and money from the new bond issue. It also hopes to cut costs of the project by using less sand.
THE OUTLOOK
The town hasn't rushed to put together a plan to pay for the Port Royal Sound projectbecause the decision could affect the wayfuture renourishment projects are financed, Riley said. But he acknowledged that a plan must be firmed up by fall if the project is to start in January 2011, as scheduled.
Town Council members say they want to understand the intricacies of the project before proceeding.
"If I'm going to raise my hand to spend $12 million, I want to understand what we're spending. I want to make sure the money we spend is money we need to spend, and we're spending it as efficiently as we can," said Town Council member Drew Laughlin.
In the meantime, Port Royal residents are waiting patiently.
"Our residents understand that the town is doing whatever is necessary to renourish the beach, and we have a lot of confidence in them," John McCann said.
"Without the beach, there is no Hilton Head," he said.
