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DNREC: Beach replenishment funds will run out in five years

During a Jan. 18 meeting, Delaware Department of Natural Resources and Environmental Control officials said due to rising costs, beach replenishment funds will run out of money if adjustments are not made regarding revenue sources.

Posted on January 24, 2024

According to officials from Delaware Department of Natural Resources and Environmental Control, if nothing changes in the revenue-collection method for beach replenishment projects across the state, the fund supporting those projects will run out of money in five years.

The bottom line, said Jesse Hayden, DNREC Shoreline and Waterway Management Section administrator, is that the cost of doing beach replenishment projects is increasing to an unsustainable level. That’s why now is the time to conduct a study to develop new approaches to funding, before the fund runs out, he said, addressing roughly 200 people who participated in a virtual public meeting Jan. 18.

Looking to address across-the-board costs associated with replenishment projects, Hayden said DNREC began discussing a change to the funding years ago. More recently, DNREC has hired a consultant to study the economic benefits of beach nourishment and to begin developing new approaches to funding projects needed to maintain Delaware’s shorelines.

In addition to the consultant, Hayden said a working group has been established to participate in the study, which includes representatives from DNREC, Bay Beach Association, Association of Coastal Towns, Delaware Sea Grant and others. This working group has met once and will meet again to review the initial findings, he said, adding there will also be another public meeting before the final document is turned in.

Bay and ocean beach replenishment projects have taken place in Delaware since the 1950s. Between the two, said Hayden, there have been nearly 25 million cubic yards of sand put down.

Under the current operating system, the federal government pays for 65% of the projects, with the state picking up the rest. In the past 20 years, the replenishment projects have cost a total of approximately $210 million, with $68.1 million of that being funded through the state, said Hayden.

This graph shows the amount of sand placed at the state’s ocean beaches over the past few decades.

This graph shows the amount of sand placed at the state’s bay beaches over the past few decades.

DNREC has two revenue sources for beach replenishment – 1% of the state’s lodging tax and Bond Bill appropriations from the General Assembly. This graph shows Bond Bill monies aren’t consistent.

DNREC has hired a consultant to explore new revenue streams. These are the questions the consultant will be considering during their evaluation.

The state funds its portion of the project two ways, using 1% of the state’s 8% lodging tax and through Bond Bill appropriations by the General Assembly. Hayden said the lodging tax brings in roughly $2 million to $4.5 million, with $4.1 million coming in Fiscal Year 2024. As for the Bond Bill, this year $15 million was allocated, but it’s variable based on the state budget, he said.

Hayden said Delaware is relatively unique in how these projects are funded. For example, he said, the non-federal funding for projects in Ocean City is paid 50% by the state, 25% by the county and 25% by the city.

Hayden said beach replenishment is the preferred method of preserving shorelines. The industry as a whole has moved away from hard infrastructure like walls and jetties, he said.

The state’s contractor will be considering a wide range of questions – how well do beach nourishment projects perform; who benefits from the investments in beach nourishment; by how much do different groups benefit; how do relative benefits vary across the state; how do regional economies depend upon intact beaches; and what influences the relative social vulnerability of communities affected by these projects.

The study is scheduled to conclude by fall 2024, said Hayden. This is just the first step; there is no timeline for implementing any of the recommendations, and it doesn’t affect any of the funding for current projects, he said.



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