The Federal appropriation process provides an impetus for local communities and the State to engage in beach nourishment/shore protection projects and waterway maintenance efforts; and consequently remain a key element keeping current projects on schedule, beaches healthy, and waterways safe. These appropriations are often matched in some set proportion by a non-Federal sponsor, which as mentioned above, can be a County, municipality, and/or State. On the surface one may think that Federal appropriations are just simply distributed at the beginning of each fiscal year and require minimal effort because after all, the U.S. Army Corps of Engineers (Corps) is a Federal agency so funding should be as easy as just filling out a form and receiving a check. To the contrary, assuring Corps funding for beach restoration and waterway projects is a full-time endeavor and follows a very arduous path that must be re-initiated at the beginning of each fiscal year. Let’s briefly review what type of metamorphosis a normal budget takes throughout a given Fiscal Year before discussing the funding requirements for this year (2007-08), or the Federal Fiscal Year of 2008 (FY 2008).

Appropriation Overview

Unlike most municipal calendars that encompass the July 1, 2007 to June 30, 2008 timeframe, the Federal FY 2008 runs from October 1, 2007 to September 30, 2008 and in theory, Congress and the President should come to terms with approximately 12 different appropriation bills by October 1st to keep the U.S. government in operation. The appropriation bill that contains the Federal cost share dollars enabling the Corps to participate in beach nourishment and waterway projects is entitled the Energy & Water (E&W) Development Appropriations Bill .

On the first Monday in February, the President will release a budget that has been crafted with the assistance of key members within his administration and the Office of Management & Budget (OMB). After the President releases his version of the budget, the E&W Development Appropriations Bill is modified by; (1) The House E&W Development Appropriation Subcommittee, (2) The House Appropriations Committee, (3) The Senate E&W Development Appropriation Subcommittee, (4) The Senate Appropriations Committee, and (5) A House/Senate E&W Conference Committee that rectifies the differences in the bill before it is returned to the President for his approval or veto.

View Graphic: E & W Development Appropriation Flowchart

While this may look good on paper, for the past decade Congress has been experiencing a great amount of difficulty in actually passing a complete set of appropriation bills before the October 1st start of the fiscal year. This creates another set of problems that invoke terms such as continuing resolutions and omnibus packages . Quite simply, a continuing resolution is a temporary spending bill that keeps government agencies in operation after October 1st while a final appropriation bill (or bills) is developed. An omnibus bill is often referred to as a “mega-bill” because Congress may elect to roll several unfinished appropriation bills that need to be passed every year into a singular bill after October 1st. Timely passage of the E&W Development Appropriation Bill is critical because dredging and beach nourishment can only occur during a narrow time slice of the year referred to as the environmental window. Delays in the appropriation process ultimately can lead to delays or postponement of these activities.

Usually, if an appropriation is recommended by the President, then it has a good chance of surviving the House and Senate deliberations. The slang term for when Congress is able to add an appropriation(s) that was not included in the President’s budget is simply entitled a “Congressional Add” . It is important our N.C. Congressional delegation are aware of any funding shortfalls and are equally cognizant of how important Carteret County projects are to their constituents. Thus, the budget is really developed by Congress - not the President. And almost 10 times out of 10, the President (regardless of political affiliation) purposely shortchanges programs knowing full well that Congress will be required to inflate the programs to necessary and sometimes baseline operation levels. Another rule of thumb is that the House normally moves before the Senate, but both bodies can move simultaneously.

Before we discuss beach nourishment appropriations in the President’s FY 2008 budget both abroad and those germane to Bogue Banks, it is important to review the Corps’ accounting structure. Basically the Corps has three accounts where appropriations are generated. These accounts are; (1) General Investigations, (2) Operations & Maintenance, and (3) Construction General. The General Investigation account generally funds studies, the Operation & Maintenance account as the name implies, is earmarked for the maintenance of the Nation’s waterways, and the Construction General account funds beach nourishment projects and channel deepening events. The Operation & Maintenance account is commonly referred to as the “O&M” fund and is by far the Corps’ most constricted account. For instance, the entire N.C. Intracoastal Waterway received only $2.0 million dollars of O&M funds for maintenance dredging in FY 2005 – well below half of the minimum need. For FY 2008, the President’s proposed budget has $4,900,000 for the Atlantic Intracoastal Waterway in N.C. – well below the $14 million required to keep this vital piece of infrastructure navigatable.

General Review of the President’s FY 2008 Budget

The President’s total budget for beach nourishment/shore protection projects in FY 2008 is approximately $54 million, which supports 20% of the total monetary need across the Country (~$272 million). This also represents an 18% reduction in shore protection funding compared to the $122.88 million eventually approved by Congress for FY 2006 (note: FY 2007 beach appropriations were reconciled by means of an omnibus/continuing resolution). Moreover, $9,000,000 million of the President’s recommendations for FY 2008 are for the Chicago shoreline armoring project (17% of the total recommendation), while over $19 million or 36% of the total beach nourishment budget, was recommended for three projects in New Jersey and New York. This leaves precious little funds for other States like North Carolina as evidenced by the fact that not a single dollar was recommend for any projects in the State out of the $23,350,000 estimated need. These projects also cover the entire breadth of project development from feasibility, engineering design, and revaluation studies along Bogue Banks, Hatteras/Ocracoke Island, Surf City/North Topsail Beach, and West Onslow Beach/New River Inlet, to construction in Dare County ($20 million alone).

Shallow draft waterways up and down the coast also appear to be resigned to a similar sparse funding fate. The entire Atlantic Intracoastal Waterway (AIWW) for N.C. received $4,900,000 and with three exceptions, not a single dollar was recommended for maintenance dredging in any waterways maintained by the government dredge fleet. This includes the Bogue Inlet connecting channel extending from Bogue Inlet proper to the AIWW. The three exceptions mentioned are New River Inlet, Rollinson Channel, and Silver Lake Harbor which seem to be related more to military and ferry traffic needs. The AIWW figure is substantially higher than the President’s recommendation back in FY 2006 ($860,000), but well below the average capability for the waterway, which is approximately $8 million, and this year’s capability (estimated cost) of $14 million. Conversely, the President’s Administration seems to understand the economic importance of the State’s Ports in terms of maintaining authorized depths, and the Morehead City and Wilmington Deep Draft Navigation Projects received $5.5 million and $11.2 million, respectively. The Morehead City scope of work in FY 2008 includes both outer harbor maintenance (hopper dredge w/ offshore disposal) and possibly deferred navigation maintenance work within the inner harbor (pipeline dredge w/ upland disposal to Brandt Island) – see map of harbor.

A disturbing trend lies in the fact that there was no funding for the Wilmington Harbor deepening project. Although the capability for this project is roughly $30 million or more annually, the Corps has been consistently receiving ~$20 million or less per year. Again, this year there was $0 for deepening (constructing) the Wilmington Harbor compared to a FY 2008 capability of $65 million, which could be a bad omen for future deepening work envisioned for the new SouthPort Harbor, with a total estimated Federal funding request of $400 million.

The President’s budget recommendations for N.C. serve as microcosm for the National approach with respect to the Corps’ water resource mission. In general, (1) beach nourishment/shoreline protection received almost no funding across the Nation, (2) Shallow-Draft waterways for the most part are not funded. The Corps uses government plants (dredges) to maintain safe navigation at Carolina Beach, New River, New Topsail, Lockwoods Folly, and Bogue Inlets. Only New River Inlet was funded and almost all other small harbors in N.C. that the Corps would utilize the private industry to complete were not funded, and (3) Deep draft navigation projects received baseline maintenance funding and sparse deepening funding. Across the board, construction and study funding continues to be cut in an apparent move by the Administration to make the Corps a predominant operation & maintenance organization with almost no emphasis on new work.

View Appropriation Table: FY 2008 Water Resources for N.C.

To gain a perspective of the scale of appropriations we are discussing, it is interesting to note that the President’s budget totals $2.9 trillion. Only $1.1 trillion, or 38%, of the budget is discretionary. The remaining 62% is reserved for interest and programmatic, entitlement programs such as social security and Medicare. The non-military discretionary portion of the budget is $456 billion, or 16% of the total budget. And finally the budget for all transportation, flood damage reduction, hydropower, water supply, recreation, environmental restoration, beach, and waterway projects the Corps undertakes is $4.871 billion, or 0.17% of the entire budget. Interestingly, the total beach nourishment/shore protection budget if every project was funded at a 100% level would be approximately $272 million. That would constitute 0.02% of the discretionary budget, or 0.0009% of the entire Federal budget.

Appropriation Chicken?

While Congress usually provides sufficient “adds” to provide the funding necessary for baseline beach nourishment needs and maintenance dredging; a looming budget deficit, war on terror, and a continuing National debate regarding post- Katrina reconstruction in New Orleans and Mississippi may mean that the level of Congressional adds that have been enjoyed in the past may not be part of the water resource equation in FY 2008. The Office of Management and Budget (OMB) has been successful in establishing a spending cap for the Corps and letting beach and waterway supporters fight among themselves for a fixed pot of money.

With this in mind, are local governments and the State ready and willing to cover (volunteer) the costs associated with these “de facto” shifts in policy and funding priorities? Actually the more strategic and fundamental question lies to whether local governments and the State should absorb these costs, realizing that local governments and the State may never see another dollar from Washington, D.C. for beach nourishment and waterway dredging if they do so.

Closer to Home

The two shore protection efforts relevant to Bogue Banks in FY 2008 are the 50-year Shore Protection Project and the preparation of a Dredged Material Management Plan (DMMP) for the Morehead City Harbor. Again, the President’s budget did not provide any dollars for either of these efforts. Let’s take a look at the funding requirements for these two projects in a little more detail.

Bogue Banks Shore Protection Project Feasibility Study - $250,000 required in FY 2008, Corps General Investigation account. This appropriation will help the Corps begin the Preconstruction, Engineering, & Design Phase, or PED. The feasibility phase was initiated in 2001 and should be completed in FY 2007 or early 2008, totaling $3.7 million (Federal and non-Federal). The feasibility report should detail a 50-year nourishment plan for Bogue Banks and determine whether or not there are enough Federal benefits to proceed with the project.

Explanation – The County’s long-term beach preservation plan is known as the 50-year Shore Protection Project that encompasses the entire island of Bogue Banks. This project is often referred to as the “50-year Project” and as the name implies, entails a 50-year effort that provides a nourishment program for Bogue Banks similar to those in effect for Wrightsville and Carolina Beach. The County, State, and Corps are in the waning stages of the Feasibility Phase (Study phase) where the Corps delineates sand sources for the project, the National Economic Development Plan, benefit/cost ratios, etc. However even under the best of circumstances, we will not begin constructing this project until 2010.

There are also two issues in regards to the project schedule and planning that are noteworthy; (a) All of the other beach nourishment projects constructed to date along Bogue Banks in the past several years (locally- and federally-funded) have been viewed as interim, stop-gap projects to protect infrastructure, tax base, recreation, and the environment until the 50-year Project can be constructed. The Shore Protection Project in effect is the long-term plan for the island. (b) Sand Management. The County has requested the Corps during the Feasibility Phase to maximize the use of shoal material dredged every year out of the Outer Harbor at Morehead City. This sand is a vital element of the sand sharing system between Shackleford and Bogue Banks, and at the present is intercepted and removed from the system on a yearly basis. Moreover, there is very little sand entering the system from the estuaries and sound as well – the slope of the coastal plain is too gentle for rivers to deliver sand to the coast. The Shore Protection Project presents a unique opportunity to cooperatively correct this sand-management issue.

In FY 2007, Congress appropriated $100,000 to conclude the feasibility study. As mentioned above, the President has recommended $0 for FY 2008 although the Corps capability is $250,000 to start the PED. The PED formalizes the plans and specifications for the project and other engineering logistics.

Morehead City Harbor Dredged Material Management Plan (DMMP) - $500,000 required in FY 2008, Corps Operation & Maintenance account. The last time the Corps comprehensively reviewed dredging operations and dredged material handling at the Morehead City Harbor was in the early 1990s when the harbor was deepened from roughly -40 foot to -45 foot. A Dredged Material Management Plan, or DMMP, is a documentation vehicle enabling the Corps to re-assess dredging protocols to maximize maintenance efficiency based upon the needs of commercial navigation while managing dredged sediments in the most environmentally-friendly manner.

Explanation - The need for a DMMP has also been augmented in light of new information concerning the Harbor’s impacts to adjacent coastal environments that were articulated in a Corps Section 111 report (2001) and a separate report prepared by Olsen Associates, Inc. on behalf of the County (2006). Depending upon location and maintenance cycle, dredged material emanating from the harbor is currently dumped offshore, placed in an upland disposal site, or utilized for beach nourishment. The impacts of these disposal options are currently being realized and the DMMP, along with compulsory environmental documentation, is envisioned to address the areas of concern while maintaining the harbor as a viable point of commerce.

The Wilmington District of the Corps is applying $100,000 to the DMMP in FY 2007 and has a capability (need) of $1.0 million for the document in FY 2008. The President’s budget for FY 2008 includes $5.5 million of operation & maintenance funding for routine dredging of the Morehead City Harbor. Considering the scope of the appropriation provided for the harbor in FY 2008, the monetary capability required for the DMMP, and the budget climate in Washington, D.C.; $500,000 is being requested for DMMP formulation in the FY 2008 Energy & Water Development Appropriation Bill.

Waterway Projects

Below are waterway project capabilities for the U.S. Army Corps of Engineers in FY 2008 that are relevant to Carteret County’s interest that don’t require non-Federal funding matches.

Want to be part of the process???

No matter where you may live - it’s your beach, it’s your waterway. Your voice can have important consequences to the health of the beach and safety of our inlets and waterways. Calling or writing to our congressional delegation, key members of the President’s Administration, and the appropriation subcommittee leadership can make a big difference. Provided below is the contact information for these various individuals/groups.

Senator Elizabeth Dole
555 Dirksen Office Bldg.
Washington, DC 20510
202-224-6342
Fax: (202) 224-1100

Senator Richard Burr
217 Russell Senate Office Bldg.
Washington, DC, NC 20510
Phone: (202) 224-3154
Fax: (202) 228-2981

Walter B. Jones, Jr.
U.S. House of Representatives
2333 Rayburn House Office Building
Washington, DC 20515
202-225-3415
Fax: (202) 225-3286

President George W. Bush
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Fax: 202-456-2461

Rob Portman, Director
The Office of Management and Budget
725 17th Street, NW
Washington, DC 20503
Fax: 202-395-3888

Rep. Pete Visclosky, Chairman
Attn: Dixon Butler, Subcommittee Clerk
House Energy & Water Development Appropriations
Room 2362-B Rayburn House Office Building
Washington, DC 20515
Phone: (202) 225-3421

Rep. David L. Hobson, Ranking Member
Attn: Kevin Cook, Minority Staff
House Energy & Water Development Appropriations
Room 2256 Rayburn House Office Building
Washington, DC 20515-6020

Senator Byron Dorgan, Chair
Senator Pete Domenici, Ranking Member
Attn: Roger Cockrell, Senior Subcommittee Staff
Energy and Water Development Appropriations Subcommittee
United States Senate
127 Dirksen Senate Office Building
Washington, DC 20510
Fax: (202) 224-6835

Lobbying Efforts

In order to monitor all relevant congressional and Corps developments that will help secure appropriations for our projects, the County’s Beach Commission has retained professional beach lobbyist Howard Marlowe of Marlowe & Company, Washington D.C. Why do we need a beach lobbyist? Because identifying and establishing dialogue with key congressional members and keeping our shore protection efforts on the forefront of their agenda is a time consuming process that can really only be accomplished by someone who works in Capitol Hill. Having a lobbyist in Washington helps us streamline our efforts, and keeps us informed of the latest legislative items that can be used in our favor. As one might expect, these legislative items are not the type of news that we see discussed on the nightly cable news networks. As indicated above, the appropriations process is a long and tedious process, and therefore our lobbying efforts are essential in restoring and maintaining the health of our beaches. We will remain committed to this strategy and it is a very prudent strategy when considering most of the Federal expenditures will continued to be focused on the war on terrorism and homeland security rather than domestic programs.