Hilton Head to borrow money to pay for Port Royal Plantation beach renourishing

Hilton Head Island officials likely will borrow against expected tax revenue from overnight lodging to pay for a $12.5 million project to preserve a one-mile stretch of beach at Port Royal Plantation.

But funding for future renourishment -- typically performed every eight to 10 years -- seems to be washing away as quickly as the island's rapidly eroding heel.

The Public Facilities Committee voted unanimously Tuesday to recommend the Town Council issue $11 million in revenue bonds to be repaid over eight years with money collected from the 2 percent accommodations tax, also known as a bed tax. The remaining cost would be covered by existing tax revenue and a $1 million grant.

That formula might not work forever, though -- bed-tax revenues have been enough to pay for past renourishment, but for the first time in 20 years, the town is coming up short as it borrows against the fund to pay off debt.

Town officials say it might be time to curtail its beach management program and tap a fund intended for emergency renourishment after a hurricane.

This round of renourishment would involve pumping about 1 million cubic yards of sand from a near-shore shoal onto the beach at the island's heel. A new groin would stabilize the sand. Work is scheduled to begin this winter.

Town officials say the project is needed to combat a decade of erosion that has claimed about 100 feet of beachfront a year. Left unchecked, the erosion could threaten oceanfront property, said Erik Olsen of Olsen Associates, the town's coastal engineering firm.

Committee members agreed.

"We are approaching an emergency situation with Port Royal," said Councilman John Safay.

Town staff and engineers, faced with a dwindling beach fund, looked at alternatives, such as reducing the scope of the project or delaying it until the next major beach renourishment scheduled for 2015. However, they determined none was cost effective in the long run.

"There will be significant land loss if we wait until 2015, and it will be more difficult to address the problem," Olsen said. "Just the placement of sand, without a groin, will not be as long-lasting. And the groin will not be as effective without fill."In 2006, the Town Council borrowed instead of using cash on hand for renourishment, so it could set aside money for an emergency renourishment fund to be used in case of a hurricane.

About two-thirds of bed-tax money earmarked for renourishment is needed to pay off the 2006 debt, which comes due in 2014. The town expects to collect $4 million to $5 million a year in bed-tax money for renourishment over the next 13 years.

Finance director Susan Simmons said the town should be able to pay for the Port Royal project and mid-island renourishment in 2015, but that will mean drawing the $13 million post-hurricane renourishment fund down to about $4.5 million by 2023.

Simmons said that should be sufficient to protect against unforeseen loss of beachfront.

Committee members were skeptical.

"I get no warm, fuzzy feeling of this fund being able to sustain things over the long haul," said Councilman Drew Laughlin.

Since 1990, the town has staved off sand loss because of renourishment, but it might be time to scale back future projects, said Scott Liggett, town public projects director. Beach management objectives should consider a shift from widening beaches to maintaining conditions, he said.

"We need to put sand fill where we can quantify and justify its needs, as opposed to the more liberal applications of the past," Liggett said.