Flagler County is at risk of losing a $6 million state grant for the planned 2.6-mile beach-reconstruction project by the U.S. Army Corps of Engineers in Flagler Beach.
The federal government is $11.3 million of the $17.5 million project. The project is predicated on Flagler County assuming the remaining $6.1 million. Flagler government’s chief engineer, Faith al-Khatib, convinced the Florida Department of Transportation to grant that $6 million, which local coffers could not have afforded.
But state finances are getting upended by the coronavirus emergency. The state grant may not be forthcoming, County Administrator Jerry Cameron warned on Monday.
The public health crisis is diverting large sums of state dollars from previous allocations, and later this spring, the Legislature is expected to meet in special session to rewrite its budget accordingly. “It is absolutely certain that this budget will have to be completely reworked that they just passed, in light of these developments,” Cameron told county commissioners on Monday. “They are going to have to sweep some funds. We don’t know which funds. We’re told that the transportation trust fund would be the last place that they would go to sweep funds, but nevertheless it is a possibility. Should that happen, what would occur is that Flagler County would be exposed to a liability of $6 million, which would severely damage us at this point, because we’re financially weakened, because of the storms, the virus and the economic downturn that we’ve never recovered from completely.”
Also, because the county has maxed out its local taxing authority for the beaches, through the tourism sales surtax, to pay for the dunes-reconstruction project it carried out on 12 miles of beach to repair damage from Hurricanes Matthew and Irma. That revenue is spoken for, and what additional revenue the county expects from its other sales surtax, for capital improvements, is to be spent on the new sheriff’s operations center and a new branch library. It is almost inconceivable that commissioners would approve raising the property tax to pay for a 2.6-mile beach project in Flagler Beach. In sum, they have no other avenue but to ensure that the state makes good on its $6 million pledge.
But Cameron raised the strong possibility that new realities are realigning state priorities, potentially making such projects as beach reconstruction a luxury.
“So we are working with FDOT to try to arrive at some methodology of ensuring that Flagler County would not be subjected to that unfunded liability,” Cameron said. “We’ve made some progress. I was hoping that we’d have that in place by today, but we do not have it in place at this time, and I thought that before we proceed any further with this, the board of county commissioners would need to review their previous decisions in light of these developments.”
Without the local match, the U.S. Army Corps of Engineer project cannot go forward. It is the first leg of a 50-year, $100 million project, with the local match growing substantially in subsequent years.
The project is not without its controversies. The Corps is planning a “renourishment” of the beach every 10 to 11 years or so, splitting what is today projected to be a $20 million cost each time. The $20 million is the estimate from two to three years ago, though that estimate had more than doubled, compared to estimates at the beginning of the decade, so by the time the renourishment is due in 10 or 11 years, the cost is almost certain to be closer to $40 million, with Flagler responsible for half.
The county had been hoping for a federal allocation for the first leg of the project for years. That allocation was secured only in 2018, following that year’s federal stimulus package, with no promises that there would be additional allocations for subsequent renourishments. The project has been in the planning stages for a decade and a half, with former County Administrator Craig Coffey driving for it for many years, and at one point planning to use state and local sources of money, without federal money, to get it done. Congress’ 2018 allocation was a surprise that again shifted the project’s course.
The board should continue to authorize Cameron to work with the state transportation department, County Attorney Al Hadeed said, “until we obtain satisfactory assurances that these moneys are immune from that kind of budget shifting, so that we are not placed in an untenable position where we’re going to owe the $6 million to the Army Corps, but have the legislature remove it from the FDOT budget, leaving us on the hook.” Hadeed added: “We have explored a number of alternatives with FDOT. We haven’t gotten back a final answer.”
Cameron on Monday at times sounded like Coffey had at various points in the history of the project’s financial edvolution. “I just think it would be remiss of me if I didn’t bring to the attention of the governing body that the risk factor has shifted,” Cameron told commissioners, “and if you make a decision to proceed, and assume the risk, that’s an informed decision. I just didn’t want something to happen down the road and the board say why wasn’t this brought to our attention.”
Commissioners elected to assume the risk. That means they’ve given direction to Cameron to do what he can to secure the $6 million. But if that fails, the county and its taxpayers are on the hook for the $6 million.
Commission Chairman Dave Sullivan said he was not as worried about the county losing the money. Referring to his reading of a discussion of the budget by Sen. And I did read a fairly detailed discussion on the budget by state Sen. Bill Galvano, president of the Senate, Sullivan said “his feeling was that this year’s budget, the one that’s on the governor’s desk right now, will not be as affected as next year’s budget. So I think we may–who knows: as our county administrator pointed out, things happen. He didn’t indicate that there would be a full rewrite of this year’s budget. That would be very, very difficult if you went back to every line item.”
The questionable $6 million isn’t the only obstacle in the project’s way. County government has been seeking easements from close to 150 beach-front property owners so the Army Corps can do its work seamlessly across the 2.6 miles. It had initial success collecting this easements. The success has stalled, with only 90 easements “received,” 23 “in progress,” and 28 refusals as of now, according to a website the county set up. In some stretches, swaths of beachfront are part of the refuseniks.
Without those easements, the segments of beach in front of property owners who refuse to sign an easement cannot be part of the renourishment project, and would create both an unseemly sight–craters in place of dunes–and engineering black holes that the ocean could fill: non-participating property owners would in effect undermine the whole project’s soundness.
The only public comment on that particular item at Monday’s meeting–which was conducted virtually, through Zoom and the county’s YouTube channel, with each commissioner and staffers at home or at their desks–was from Elizabeth Hathaway, who urged property owners to sign. “Once this project is completed, your property and that of your neighbors will be safer and more valuable. All of us will be able to enjoy a wider, more resilient beach,” she said, in comments that Sullivan read to the commission. “The ocean does not discriminate. If you let it, the ocean will take everything from all of us. Any gap in the dunes will create a weak point that will undermine your neighbors’ dune protection on each side of you. We will be stronger if we are united, facing the storms to come.”
Cameron wanted direction from commissioners on both counts–having authority to continue negotiating with the state agency for the state grant, and proceeding on easements. Commissioners, speaking in turn through Zoom, granted both (though Commissioner Joe Mullins appeared not to have been paying attention: when Sullivan called his name was called, he was not immediately present, and when he returned on screen, he said: “I’m 100 percent, go after this federal money, we need to bring it back to the county, so let’s do it.”)