Chapter4 EnvironmentalEffectsof BeachNourishmentProjects

A beachnourishment project is a type of storm damage reductionprojectthat involvesplacing sandon a beach, along a shorelineto widen the areaand increase or the volumeof sandavailableto absorbanddissipatewave energy.Sandis usuallydredged from a borrow site anddeposited the erodingshoreline. The re-nourished on beachis considered "soft" or nonpennanent a ~esignprofile that will require periodic renourishment continueto provide stonn damage to reduction. Beachnourishment has the virtue of being". . .the only engineered shoreprotectionalternativethat directly addresses problemof a sandbudgetdeficit..."by addingsandto an erodingsystem the andmaintainingthe naturallittoral sandbalance.(NRC, 1995)

Periodicrenourishment often hasbeneficialenvironmentaleffects. A renourished beachcan providenew nestingareafor seaturtles, spawninggroundsfor horseshoe crabs andhabitatfor piping plover and leastterns. In somecases, beachnourishment projects arefonnulatedfor the primarypurposeof environmental restoration. For example.a project designed Reeds for Beachand PiercesPoint. N.J.. alongthe DelawareBay . coastline.wasfonnulatedto providc a beachbenDthat will result in 17 acresof habitat for horseshoe crabs,shorebirds migratory birds. Without nourishrne~ and is projected that this areawill lose 21 acres fish and wildlife habitatto erosionover the upcoming of 50 years. Erosionat a rateof one foot per yearwould reducespawninghabitatfor horseshoe crabs. In turn, migratorybirds, which feed on horseshoe crab eggs,would lose
an important food source.

The plant andanimalspecies existing in littoral areas adaptedto survivein the are dynamicenvironment created the naturalcycle of sanderosionand accretion. Beach by nourishment, however,accelerates certaindynamicprocesses, taxesthe capacityof and benthicspecies adapt. More importantly, however,negativeimpactson the plant and to
.

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animal species inhabit the subaerial" subtidalzonescan largely be avoidedby that and adheringto appropriate management practices,asspecifiedin Corpsregulationsand project planningguidance,in compliancewith stateand federalenvironmentalstatutes and regulations. From its many yearsof involvementin thesetypesof projects,the Corps hasdeveloped extensiveexpertiseand generaiprocedures avoiding adverse for environmentalconsequences beachnourishment. Many Corpsregulationsand of planning guidances provide guidelinesfor utilizing suitablepractices. Someof the most directly pertinentinclude engineering regulationsER 200-2-2Procedures for ImplementingNEPA and ER 1105-2-100, Guidancefor ConductingCivil Works PlanningStudies.Engineeringmanuals,EM 1110-2-1204, EnvironmentalEngineering for CoastalProtectionand EM 1110-2-1004, CoastalProjectMonitoring, alsoprovides guidelinesfor conductingenvironmentalstudies,monitoring the effects of coastal projectsand avoidingdamages the environment. Additionally, all Corpsprojectsare to requiredto comply with Federalenvironmentalstatutes regulations,including the and following described Table 4.1. in This sectionwill look at the threeregionsthat are affectedby beachnourishment activities, the subaerial zone,the subtidalzoneandthe borrow site. The subaerial zone includesthoseareas the beachthat are visible abovethe meanlow tide line. The of subaerialzoneconsists two, distinct zones,thesupralittoral zone,which is the dry part of of a beachthat lies beyondthe reachof the average high tide, andthe intertidal zone, which is the part of the beachthat lies between average the high tide and ~tide The physicalchanges occur in thesethreeareasduring the courseof that nourishmentactivitieswill be described. well as management as; practicesusedin Corps projectsto preventpossibleeffectson the biota that inhabit theseareas. Specific referencewill be madeto a seven-year biological monitoring programrecentlycompleted by the New York District of the Corpsand the Stateof New Jersey.(Corps,2001) The biological monitoringprogram(hereafterreferredto as"the New Jerseystudy").was initiated in 1993andexaminedsix reaches high energybeaches of extendingalongthe New Jerseyshoreto identify any adverse beneficialeffectsof beachnourishment or i~ both the borrow area(dredged area)andbeacharea. Nourishmentprojectswere marks.

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conductedduring the study period alongreaches extendingfrom Manasquan Inlet to SharkRiver, andfrom SharkRiver Inlet to Asbury Park.One beach,extendingfrom Asbury Parkto the northernedgeof Deal remaineduntouched during the courseof the study, acting asa control site. The studyfindings are the most recentand most extensive resultsavailabledocumenting environmental the benefitsandcostsof beachnourishment projects.
I

Table 4.1: Federal Statutes Relevantto Beach Nourishment Projects3'

Federal Statute

Description

National Environmental Policy Act of 1969(Public Law 91-190)

Requires coordinationbetWeen Corpsof Engineers the districts andFederal,statecounty and municipal agencies concerning environmentalimpactsof a beach any nourishment oroiect. that dredgingactivity comply with CoastalZone Management Requires any proposed Program. Act of 1972(Public Law 92- the FederalCoastalZone Management 593) Requires Federalagencies.to all seekto conserve The Endangered Species endangered threatened and species to utilize their and Act authoritiesin furtherance the purposes the Act. i.e. to of of providea meanswherebythe ecosystems upon which endangered threatened and species dependmay be conserved to provide a programfor the conservation and of suchendaneered threatened and species. Requires an evaluationin compliancewith Section that CleanWater Act of 1977 404 of this act be includedin all EnvironmentalImpact (Public Law 95-217)

Statements.

4.1

Subaerial Zone Biota found in subaerial zone: The subaerialzoneincludesboth the

supralittoralzone,the dry areaof the beachabovemeanhigh tide, and the intertidal zon~, the wet part of the beachthat falls between meanhigh andlow tide lines. Animal life the found on a sandybeachincludeburrowingspecies, suchastalitrid and haustoriid
39 Information takenfrom IWR Report96-PS-l, ShorelineProtectionatdBeach ErosionControl Study Final Report: An analysisof the U.S. Army Corpsof EngineersShoreProtectionProgram.

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"1

amphipodspecies and.in southernbeaches, ghostcrabs.Animal species the intenidal in zoneinclude haustoriidamphipods,polychaetes, isopods,mollusks,largecrustaceans, suchasmole crabsandburrowing shrimp.The biological monitoring programconducted alongthe New Jerseyshorefound that species inhabiting the intertidal areaincluded species rhynchocoels, of polychaetes, oligochaetes, mole crabsand haustoriidamphipods.

,
c ] ,

Physical changesthat occur with nourishment: With beachnourishmen~ the largestamountof sandis placedin the supralittoraland intertidal zones. To a certain extent,this dispersal sandmimics the naturally occurringprocess sanddeposition; of of exceptthat sandis generallyspreadover a largerareaand at greaterdepthsthanmight naturally occur. Generally.the greatest amountof sandis distributedacross up~r the reaches the beach,an areawherethe diversity and abundance animal andplant life of of arerelatively limited. However,the amountof sandflowing from the supralittoralzone into the intertidal zonecan be substantial, ranginganywherefrom centimeters more to than a meter. Corp projectsutilize a variety of management practicesdesigned ensure to that the physicalattributesof the sandusedin a beachnourishment project aresuitableand will not detrimentallyaffect the environment. Beachnourishment alter sand can' compaction.shearresistance. moisturecontent.grain size andshape, initially and increases slopeof the beach. A studyby Peterson the et.al. (2000)examiningthe physicalconsequences beachnourishment the beaches Bogue Banks,a barrier of on of island alongthe North Carolinacoast,observed that 5-10 weeksafter completionof the
nourishment activity, the intertidal areas were somewhat more compacted-fSurface ; was

)
~

harder)and the color of the beachwas gray ratherthan the brownishwhite of theexisting beach. Otherphysicalchanges the 'beach to may result depending uponthe type of sand usedasfill material. Corpsmanagement practicesincludemonitoring for sandcompactionand,where warranted,tilling the beachto offset compaction. Consideration sandcompaction of is alsomadein the selectionof fill material,with the useof coarse, round sandto reduce

70

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beachhardness.Ideally projectswill usesandthat is similar in its compositionand coarseness sandon the existing beach. Corpsregulationsemphasize the sources to that of beachfill must be similar in tennsof grain size to the existing sandon the beach. Generally,fine-grained.silty materialsareavoidedas fill material. Sandthat hasa high contentof fine-grainedclay or silty materialcan result in excessive turbidity and sedimentation, which will detrimentallyimpact underwaterplant and animals.

Effects on biota in subaerial zone: One pOtentialeffect of beachnouri~hment closelystudiedis the consequences san4burial on bun-owingspecies. Animal life on of sandybeaches generallywell adapted the dynamic environmentof a littoral area. is to However,if the volumeof sanddistributedacrossthe beachis too great,organisms burrowingin the beachcan be smothered, unlessthey can dig throughthe additional sand.or leavethe areaaltogether. (NRC, 1995) AdriaanseandCoosen(1991)statethat mostbenthicspecies will die if coveredby sedimentat a depthof 0.5m or more. Depths rangingfrom 0.01 to 0.5m will allow a limited numberof species burrow up through to the additionalsandandavoid suffocation.(Adriaanse,1991) Overall, the studiesreviewedfound that beachnourishment may result in the short-tenD lossof bun-owingspecies to smotheringor abandonment. due Howeverrstudy resultsalso showthat theseinfaunalpopulations(i.e. organisms living in sediments on the oceanfloor) recoverover a relatively shortperiod of time, rangingfrom a few weeks, .
to a few months (NRC. 1995)

Authorsof the 1995review warn that someof the samplingtechniques usedin thesestudieswereflawed. In somecases, numberof samples the collectedwas limit~ or the frequencyand lengthof time over which samplingtook placewas insufficient. (NRC,I995) Nevertheless, New Jerseystudy, the mostcomprehensive the long-temt studyavailable,supports generalfinding that thereareno long-termimpactso~ the infaunalpopulations.During the cou~ of the New Je~y monitoringprogram,several intertidal infaunalassemb~ages examined, were including rhynchocoels. polychaetes, including Scolelepis squamata. Protodriloides,and Microphthalmus. mole crabsand

'71

severalhaustoriidarnphipods. (NJ, 2001) The resultsof the monitoring indicatedthat theseinfaunal assemblages incurredonly short-termdeclinesin abundance, biomassand diversity. The period of recoverylastedfrom only 2 - 6.5months.Recovery periods at the upperend of this rangegenerallyocculTed when beachnourishmentactivities were completedat the low point in the seasonal cycle of infaunal abundance.The New Jersey study concludes that monitoring resultsshowno significant long-termimpactsof beach nourishmentactivities on intertidal infaunal species.
1
~ ;1

'1
j
~

It hasbeensuggested even a temporarylossof infaunal species have that can secondary short-termeffects on the bird and marinelife that rely on suchspecies a as food source. No studieswere found examiningthe effectsof beachnourishmenton the feedingpatternsof birds. fish and other marinelife that rely on infaunal food sources. However,discussions with biologists in the JacksonvilleDistrict Corps offices indicated that, because recoveryperiod for benthicspecies provento be short, thereis the has limited concernover lossof food sources.Additionally, the new materialdepQsited on the beachwith a nourishment activity often bringsnew organisms with it. providing a substitutefood source.

Beachnourishmentmay have beneficialenvironmental effectson the supralittoraJ zone,by providing enhanced nestinghabitatfor endangered turtle species, sea including the loggerhead. leatherback greenturtles. Theseseaturtle species and emergefrom the oceanat night to lay their eggsin the supralittoralzone. By enhancingthe supralittoral . ~ zone,beachnourishment help restorenestinghabitatfor the turtles. can

Selec~ion appropriate of sandfor beachrenourishment importantto maintaining is suitablenestinghabitat. Physicalchanges sandattributes,suchas texture,moisture in content,temperature, diffusion ratesandorganicmattercan all interferewith gas successful turtle nesting.(Hillyer, 1996) If the sandtextureis not fine enough sea to maintainthe structureof the nest,the nestwill collapseandthe emerginghatchlingsare unableto reachthe surface. If sandtextureis too fine, the rate of gasdiffusion is inhibited, arrestingembryonicdevelopment. A changein sandcolor can affect the

72

amountof heatabsorbed from the sunlight, alteringthe temperature the nestingsite. of Changingbeachtemperatures effect nestsite selection,incubationduration,sexratio and hatchlingsuccess rates. Sandmoisturelevelscan alsointerferewith successful hatching andemergence juvenile turtles. of

As waspreviouslydescribed. is standard it practiceon Corps projectsto select sandthat is a closematchto the existing beachmaterial,or is an improvementuponthe existing materialsin tenDsof creatingsuitablehabitat. Additionally, methodsof spreading sandimmediatelyfollowing nourishment approach equilibrium the to an profile havebeenusedto reducethe development scarps of that might act asbarriersto seatUItles. A 1995review of beachnourishment studiesdescribedseveralmonitoring programsexaminingthe effectsof beachnourishment turtle hatchling survival. In on general,thesestudieshavefound no significantdifferencebetweenhatchingand emergence success nourishedand unnourished on beaches.(NRC, 1995) In fact, the resultsof one study suggested hatchlingsuccess hatchlingweights improvedon that and a nourishedbeachin BocaRaton.Florida, compared an adjacent,unnourished to beach. (NRC; 1995) In additionto creatingnestingareas seaturtles,beachnourishmentprojects for
have benefitedotherspecies, example,by providing spawninggroundsfor horseshoe for

crabsand habitatfor piping plover. Anotherexampleis a nourishmentproject recently completedon FaulknerIsland,Connecticut. The fe-nourished beachcreatdfi,abitat for terns,and the US Fish and Wildlife Servicereportedan additional600+ morecommon tern neststhanwerefound last year,prior to construction.Other management practices areemployedin Corpsprojectsto minimize interference with beachanimals,including the planting of beachplantsto replacedamaged plantsandcreatepedestrian barriers, conductingconstructionactivities in fall andwinter-season whennestingandspawning
seasonis past and many animals have migrated out of the area, minimizing vehicle use, limiting lighting of the beach, reducing storage of piping on the beach and locating the pipeline parallel to the be~ch and as distant from the high tide line as possible to reduce

disturbance beachanimals. of

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4.2

Subtidal zone
~

Biota found in subtidal zone: Animal andplant life found in the subtidalzone adjacentto the beachinclude benthicinvertebrate (i.e. invertebrates living on or beneath the oceanfloor), epifaunalinvertebrate(i.e. invertebrates living in the sediments the on floor of the ocean),reef communitiesand the fish and crustaceans feed on or live in that thesehabitats. Infaunalmacroinvertebrates include polychaetes, amphipods,isopods, decapods, polychaets. mollusks,andechinodenns.Many of the epibenthicinvertebrates (i.e. invertebrates living abovethe seafloor) andfinfish speciesfound in the nearshore area(i.e. the areaseaward -thezone of breakingwaves,refen'edto as the surfzone)are of commerciallyvaluable.suchasseveralshrimp species found in the Gulf coastarea. Reef habitatsfound alongthe Florida coastlineinclude sessilespecies(i.e. organisms that are permanentlyaffixed in one placeand immobile) including sponges, octocorals,hard corals,hydrozoans, bryozoans. ascideans algaethat grows on theseotherorganisms. and Reef habitatsalsoinclude epibenthicinvertebrate and finfish speciesthat forageandseek shelterin the reefs.
'1

Animal life in the nearshore area examined in the New Jersey study included the wedge clam. polychaetes (Magelona papillicomis and Asabellides oculata). bivalves (Spisula solidissima and Tellina agilis) and amphipods (Acanthohaustorius millsi and Psammonys nobilis). Fish larva found in the nearshore and surfzone area included 33 families of fish.
::::::

Physical changes that occur with nourishment:

Generally, most of the sand

deposited during a beach nourishment project is distributed on the supralittoral and subtidal areasof the beach; however, some shallow, underwater habitats can also be buried. If appropriate management practices are not used. beach nourishment can physically alter both sand-bottom habitats and ree~sby sand burial as the beach expands with nourishment. Other physical alterations to the subtidal zone include increased
:t~ .

sedimentation beyondthe surf zoneas sandfilters back into the sea,changes the depth in and surfacefeatures the'oceanfloor that may also alter wave action andincreased of

~ .

~,

74

turbidity. The movementof sandoff of the nourishedbeachinto the surf zonecanhav~ the beneficialeffect of providing additionalsandsupplyfor surroundingbeaches, outside of the project area.However,the down-flow of sandcanalsoresultin increased sedimentation areas in beyondthe surf zonein the nearshore zone,particularly if the fill materialconsistsof a high percentage silt and clay material. of

Effects on biota in subtidal zone: Marine communities the subtidalzoneare in generallynot aswell adapted endurethe consequences sandaccretionanderosionas to of areorganisms found in the supralittoralandintertidal zone. Mobile invertebrates fish and in the nearshore zoneshouldbe ableto avoid the direct effectsof a nourishment project, simply by migratingoutsideof the immediatearea. Fish larva in the surf zone,however, may be damaged increased by turbidity. Also, sessilespecies plantsand animalsfound of i~ hard bottomreefsor in seagrassbedsarevulnerableto turbidity. Increased sedimentation impair the filter-feedingprocessusedby manyof theseorganisms, can inhibit photosynthesis, smotherthe organisms. (NRC, 1995) or

While somemarineorganisms found in the subtidalzoneare vulnerableto the effectsof turbidity. studiesreviewedindicatedthat the effectsof beachnourishment projectsin the subtidalzonehave beenlimited and short-term.The New Jerseystudy monitoredchanges turbidity and sedimentation in associated with beachnourishment activities. It was foundthat beachnourishment resultin short-tennincreases did in turbidity with suspended sediments prominentin the swashzonein the i~ediate areaof the project operations; however,sedimentconcentrations dispersed rapidly. Elsewhere, any short-tennturbidity effectsrarely exceeded milligramsper liter. The studypoints 25 out that this amountis comparable the concentrations to found in estuaries produced or
during stanDS.

Two surveysof fish populationsin Florida conducted beforeandafter beach nourishment indicatedthat beachnourishment no damaging had effectson the compositionandabundance the fish sampled. of (NRC, 1995) A 1995review of studies examiningthe environmental effectsof beachnourishment indicates that no studieshave

75

beenconducted examiningthe effects of nourishmenton crustacean populationsin the nearshore area,suchaspenaeidshrimps.(NRC. 1995) The 1995review alsodescribes findings of a seriesof studiesexaminingthe the effectsof beachnourishment activities on nearshore bottom community. Resultsof soft thesestudiessuggest nourishmentactivities haveonly limited, short-termeffects. that However,the book notesthat many of thesestudieshad inadequate samplingdesigns that could result in the underestimation beachnourishmentimpacts.(NRC, 1995) of In the surf zone,the New Jerseystudy found that beachnourishment the had short-:tenn effect in one beachnourishmentlocation of reducingthe abundance bluefin of and increasingthe numberof benthic feeders.The studyconcludesthat thesechanges occurredalongwith the suspension benthicmaterial associated of with beach nourishment disturbances.In the long-tenn, however,the study finds that neitherfinfish abundance distribution differed in the nourishedbeachsurfzoneareas. nor The New Jerseystudy also monitoredthe effects of beachnourishment the on compositionandavailability of food sources kingfish and silversidesover a two-year for period following completionof a beachnourishmentproject. The studyfound no negativeimpactson the availability of food sources foraging success kingfish or or for silversides. No differenceswere observedin the compositionof food sources kingfish for or silversidesin the nourishedand non-nourished beachareas,basedon an examination

']
~ 1:;

with filled stomachs.

A similar examination was made of the food sources for bottom feeding fish, including winter flounder, summer flounder and scup. No significant difference attributable to beach nourishment was detected in the quantity or composition of the food supply for these fish species. (New Jersey, 2001)

76

The New Jerseystudyalso attempted identify any differencesin larval fish to habitatin the surf zone.caused beachnourishment. A comparison fish larva by of populationsin the surf zoneof a renourished areato the surf zonein an areaof the designated study control zonesuggested no differencesexistedin fish larva that (ichthyoplankton)abundance, and species size composition. The study,however,was unableto establisha direct beachto beachcomparisonbetween designated its studyand control beaches because the timing of the beachnourishment of activities relativeto the J>eriod time in which s"ampling of takesplace. As a result,the significanceof the findings maybe limited. The New Jerseystudyfurther points out that adequate samplingof ichthyoplankton the surf zoneis difficult to achieve. The dynamicnatureof a highin energybeachandthe ever-changing broad distribution of fish larvaemakeit difficult and to identify anythingbut very largechanges ichthyoplanktondensity andcomposition. in

4.3

Borrow Site

Sources sandfor beachnourishmentcan includeuplandsanddeposits, of estuaries, lagoons,inlets. sandyshoalsdredgedto clear channels navigationand for deposits the nearshore in area. The most common sourceof sandusedin nourishment projectsis nearshore deposits.

Physical changes. that occur with nourishment: Borrow site conditionsduring andfollowing dredgingwill vary dependingupon the equipment tec~es and used. A

1995review of studiesexaminingthe environmentaleffectsof beachnourishment indicatesthat few studieshavebeenconductedof the long-tenDs changes the depth, in sediment compositionandshape the oceanfloor of nearshore of borrow areas. (NRC, 1995) Of the studiesincludedin the review. most found that average sandgrain sizein the borrow areadecreased after dredging.resulting in a highersilt/clay composition. This increase the concentration silty materialsoccursasthe finer. silt particlestend in of to go into suspension the borrow areais dredged. Theseparticlesare slow to fallout as
of suspension,resulting in increasedturbidity. Also, although little data exists measuring .

77

the rate at which borrow sitesrefill, generalobservations indicate that, in cases wherea deephole is created, borrow areastendto fi)1 in slowly. Effects on biota in borrow site: Oneconcernwith dredging a nearshore borrow site is that dredgingmay removebenthicspecies alongwith the sand,which may affect other species that rely on the benthosasa food source. Restorationof benthic species generallyoccursasorganisms from surroundingareas migrateback into the borrow area; however,the initial sizeanddistribution of the new benthiccommunity may be significantly different from the original community. For example,in the New Jersey study,a decrease the abundance, in biomassandsize of sanddollars was notedin the
borrow areaafter dredging. While the abundance sanddollars was restoredquickly of after dredging occurred. the biomass required 2 - 2.5years recover.Thediminished to

1
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sanddollar biomass could be attributedeither to the selectiveremoval of older, mature sanddollars with dredging,or to the recolonizationof the borrow site by smaller specimens (New Jersey,2001) With the exceptionof the periodof recoveryrequiredfor sanddollar populations, the findings of the New Jerseystudyindic~tethat all o.ther infaunal assemblages monitoredrecovered within one year after dredging. The New Jerseystudy alsolooked for changes the compositionandabundance finfish in the borrow areafollowing in of dredging. As measured catch-per-uniteffort, no significant difference in species by compositionor abundance finfish was found. The New Jerseystudy also monitored of the feedinghabitsof winter flounder and summerflounder. No changesw.ere detected in
-,-","

either winter or summerflounderforaging before,during or after borrow site dredging.

Dredgingalsochumsup the fine, silty sediments the Ocean on floor. If these sediments remainin suspension increase and waterturbidity, they can inhibit phyto~lanktonphotosynthesis blocking out the sunlight. Increasedturbidity canalso by interferewith filter feeders.When the ratio of suspended sediments edible planktonis to increased, filter feedersobtain lessedible materialper filtering effort. Additionally, extremelevelsof turbidity may simply clog or damage gills and filtering capabilities the
J~

78

of filter feeders.(Adriaanse,1991) Increased turbidity can alsointe?ere with the hunting success fish andbirds that rely on sight to capturetheir p~y. (Adriaanse,1991) of Corpsprojectsutilize a varietyof management practiceto avoid turbidity in the borrow site area. Turbidity is monitoredduring dredging. Practices minimize to turbidity vary dependinguponthe siteconditions. In somecases, of a suctiondredge use without acutterheadmay reducethe amountof sedimentation created.In somecases, only one hopperdredgeis operated a time, to avoid excessive at sedimentation the in water. Also. dredgingoperations may moveback.and forth alonga long. linear strip. insteadof creatinga large.round pit in one area. Moving alonga linear path while dredgingavoidscreatinga sustained sedimentplume. a singlearea. Borrow site in selectionis alsocritical in avoidingdetrimentalenvironmentaleffects. The borrow site is selected far awayfrom sensitivehabitataspossible. Additionally, a buffer zoneis as established aroundany nearbyreefsto protectfrom damage, eitherby physicalcontactor by increased turbidity.

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19

Chapter 5 Summary and Findings

The President's proposed 2003 fonnula called for reversingthe percentages FY to generallyrequire35 percentof the re-nourishment projectcoststo be fundedby the
. .

Federalgovernment 65 percentfrom the non-Federal and sponsor. The new fonnula would not only be appliedto recommendations authorizations future refor of nourishment projects.but it would alsobe appliedto thoseprojectsthat havebeen
authorized but not completed and existing P.rojectswith continuing re-:-nourishment

requirements.This wasproposed more appropriately to reflect the distribution of economicbenefitsthat shoreprotectionprojectsprovide to Stateand local sponsors.In addition,the Administrationwantsto ensurethat the Federalgovernment'slong-tenD nourishment obligationsdo not "crowd-out" otherimportantFederalexpenditUre needs.

The purpose this study is to evaluatethe distribution of both the nationaland of regionaleconomicdevelopment benefitsof a shoreprotectionproject. The NED benefits considered includedstormdamage reductionbenefits.recreationbenefits.andotherNED benefits(i.e., reductionsin maintenance emergency and costs). RED benefitsof shore protectionaredefinedasthe changein "value added"(i.e., the sum of employee compensation, proprietors'income,propertyincome,indirect business tax~resulting from subsequent recreational activities associated with alternativeproject plansadjusted for commuters'income.tax revenuetransfers,andlocal beachmanagement and maintenance costs. In orderto provide supportfor the Administration's proposalto increase local shareof the costsfor the beachre-nourishment the componentof shore protection,the following questions were addressed,

. . .

Who benefitsfrom shoreprotectionprojects? What is the distributionof project benefits? Do increases tax.revenues stemfrom Federalshoreprotectionprojects in that affect thecapacityof non-Federal sponsors pay for the projects? to

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5.1

The Distribution of NED Benefits of Shore Protection Projects

NED benefitsaredistributedasfollows in this study: stonn damage reduction benefitsare distributedaccordingto the residence patternsof the affectedproperty owners,recreationbenefitsaredistributedby the residence patternsof the beachusers, and other NED benefitsareassigned the areaoutsidethe beachregion (i.e., the rest of to the nation).

]
1

The distribution of shoreprotectionbenefitswas analyzedusing a hypothetical new beachnew nourishment project that hasa dry beachareaabovethe meanhigh water level component that is one mile long by 100feet wide. Quantitiesof sandwere estimatedthat would not only createthe "dry sand"componentbut also would extendout into the nearshoreareafor stonn damage protection.functional stability. andrecreation It was detennined that the amountof sandneeded provide the appropriatelevel of to shoreprotectionvariesaccordingto the intensity of waveaction on the beach. A quantity
of sand (600,<XX> cubic yards) was used for the hypotheticalbeach nourishment project to reflect a ""medium" energy beach. Average annual benefits per cubic yard of sand for each of the NED benefit categories (i.e., for storm damage reduction, recreation, and

]
"

other NED benefits)wereestimatedbasedon sandquantitiesandbenefitsfor a sampleof completedandauthorized Corps beachnourishment projects. Stonn damage reduction benefitsandother. NED benefitswere based the total amountof sandusedfor the on hypotheticalnew nourishmentproject. Recreation benefitswere basedon the quantity of sandusedfor the "dry sand" portion of the nourishment project. The NED benefitsfor eachbenefit categoryof the hypotheticalnourishment project were estinli-te'a by multiplying the estimated quantitiesof sandby the average annualbenefitsper cubic yard of sandfor completed authorizedCorpsshoreprotectionprojects. Total estimated and
average annual NED benefits for the hypothetical project are estimated to be $1.65 million ($920,{XX)for storm damage reduction benefits, $609,{XX)for recreation benefits, and $123,{XX)for other NED benefits). Not having accessto empirical data for a real

beachnourishment project,the parameters concerning proportion of propertyowner the and beachusers residingin the beachregion wereestimated basedon datafor a coastal

:.
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m ..

county reflecting a "typical" regional setting. The residential patterns were either estimated with data from the 2<XX> Census of Population or borrowed from selectedpast

studiesof beacheconomies.Basedon the NED benefit estimates aboveandthe derived beachparameters, is estimated it that approximatelyone-thirdof the NED benefitsaccrue to the beachregion andtwo-thirds to the rest of the nation.

Two othercoastalregionswerechosento provide the residentialpatternsfor propertyownersandbeachusersfor simulationpurposes.Theseregionswereselected to providea rangeof parameter valuesthat reflect a much more "rural" beachregionanda muchmore"urban" beachregion. Whenthe type of region in which the beachis located is considered (i.e., the residentialpatternsof propertyownersand beachusersare different for the "typical", rural, and urbanbeachregions),the distribution of NFD benefitsdiffers to someextent. The findings indicatethat .approximately of the NED half benefits~crue locally for the rural beachregion and abOut percentof the NED 40 benefitswould accruelocally to the urbanbeachregion. Given the variability found here, it is extremelyimportantto understand the distributionalpatternsof the NED that benefitsfor shoreprotectionprojectsdepend the residentialpatternsof the property on ownersandthe beachusers. Thesepatternsare specificto eachcommunity and,asa consequence, distributionof NED benefitsis also site-specificfor eachproject. It the shouldbe notedthat the NED benefit estimates the "low" energybeachweresmaller for thanfor the hypothetical nourishment project and largerfor the "high" energybeach, as would be expected, because NED benefitestimates the wererelatedto th~tity of

sand. However,the distribution of benefitsbetweenthe beachregion andthe restof the nationdid not change much. The effect of increased beachvisitation due to the nourishmentprojecton the distributionof NED benefitswasevaluated; increases visitation considered in were0, 5, 10, 15,20, and25 percent. Increases visitation arepartially basedon the capacityof in the hypotheticalbeachnourishment project. In addition,only real increases visitation in on peakvisitationdaysareattributedto NED benefits. CorpsDistrict staff reporteda variety of "unit-day" and"travel cost" methodvaluesthat havebeenusedwhenvisitation

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is expectedto increase a beachnourishment due project; "beachexperience"valueshave typically varied between$2 and$5 underthe "with project" conditions. However, anotherFederalagencyindicatedthat their unit-day valuesfor beachexperiences in are the $15 to $20 range. Increases visitation raisedthe level of NED benefitsbut had in little effect on the distribution of NED benefits,regardless the unit-day value. of
.:~

..

5.2

The Distribution of RED Benefits of Shore Protection Projects

.]
RED benefitsaredistributedto the beachregion and to the rest of the nation accordingto the net vafueaddedimpactsthat occur in eachof the respectiveregionsdue to spendingof tourists at the beach. However,the net value addedimpactsthat occur in eachregion aremeasured from eachregion's point of view. Consequently, RED the benefitsfor the beachregionarethe net value addedimpactswithin the beachregion due to spendingby all beachvisitors residingoutsidethe beachregion. The RED benefitsfor the rest of nation are thosenet valueaddedimpactsoccurring in the res~ the nation due of to beachspendingby foreign beachvisitors only. The RED analysisw.as carriedout underseveralassumptions.First. it is assumed (for RED only) that the unemployment is not zero. Thi~ hasthe effect of pennitting rate resources flow betweenregionswithout negativeimpactsto occur in locationswhere to the resources originated. Second, is assumed people'spropensityto consume it that out of their incomesdoesnot change to the existence a beachor because a due of of nourishmentproject. This means that the moneyspentat the beachwill be'(pent whether a beachexistsor not. If the beachis not available,then the userswill spendtheir money on somethingelse. The assumption alsoimplies that any impacts(jobs, income,etc.) that might occur due to beachspending will occurin any event. At the local level, an exceptionto this assumption occurswhen local beachuserssubstitutegoing to a local beachfor visits to beaches locatedoutsidethe beachregion. .on a national level, foreign visitors may changethe lengthof stay within the country or not comethe U.S. at all (i.e., spendlessmoneywithin the U.S.) if beaches not available. are

..

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The net value addedimpacts(or RED benefits)for both the beachregion andthe rest of the nation were computedusinga regional input-outputanalysisof recreational spending visitors to the beach.To simulatethe net value addedeffectsof the existing by beachon the economies the beachregion andthe "rest of the nation" region, the net of valueaddedeffectsof one million beachvisits per yearby outsidetourists during the year were evaluated.The decisionto use"one million" beachvisits by outsidetouristswas madeto simulatethe importance the existing beachon the economyof the respective of region and to demonstrate procedures were usedto computethe net value added the that impactsandtheir distribution between beachregion andthe rest of the nation. the

On average the ""typical"region,it is estimated for that one million outsidebeach visitors annuallyspend$88.1million within the beachregion. Of that total, $49.9million is a direct economicstimulusto the beachregion economy. The cumulativeeconomic "ripples" createdby the direct stimulusresult in an estimated total economicimpact on local businesses $11.5 million per year. In addition to othereconomicresources. of requiredfor theseeconomic.'ripples" to occur, a total of almost2,000full-time jobs are createdannuallywho arepaid an estimated $25.5 million in wagesand salaries. Total value added(or grossregionalproduct)createdper yearby theseeconomicchanges is $48.3million. It is estimated the local workerswho commutefrom placesoutside that the beachregion take$5.8 million of the valueaddedwith them. Also, it is estimated that $12.3million in StateandFederal taxesaccrueeachyearoutsidethe beachregion. The beachcommunityis estimated incur just under$2.0 million in beach&gement to maintenance costsannuallyto supportthe beachactivity. All together,the net value addedeffect on the beachregionis $28.2 million. Computedin a similar fashion,the net valueaddedeffect on the restof the nation dueto beachspending foreign touristsis by estimated be $31.9million annually. Takentogether,approximately peICent the to 47 of RED benefitsor net valueaddedeffectsare expected accrue the "typical" beach to to and

the rural region then approximately percentof the RED benefitswould accruelocally, 40 while half of the RED benefitswould accruelocally if the beachwere in the urban region.

85

The effectson the distribution of RED benefitsdue to increases visitation in stemmingfrom the hypotheticalnew beachnourishmentproject were analyzed; specifically resultingfrom incrementalincreases beachvisitation of O.5. 10. 15.20. in and 25 percent. It is assumed increases visitation are basedon the capacityof the that in hypotheticalbeachnourishmentproject. However,insteadof only consideringincreases in visitation during peakvisitation days(for NED benefits),increases visitationfor the in entire year areevaluated RED benefits. Because for input-outputis mathematically "linear", all impactsresultingfrom increases visitation areproportionalto the change in in visitation relativeto existing visitation levels (i.e., one million outsidebeachvisits). Consequently, magnitudeof the net value addedeffects increases proportionto the the in increase beachvisitation, however,the distribution of RED benefitsdoesnot change in

]
...

A numberof beachofficials haveindicatedthat beachvisitation maynot initially changeas beaches not nourishedand allowed to erode. However.it appears the are that mix of beachvisito~ and activities do change. It hasbeencasuallyobserved that the new visitors usethe beaches differently; they usethe ~ach more during low tide andless during high tide, they campmore and stay in "expensive"hotelsand motelsless;they dine in restaur'ants frequently,etc. Thesechanges less meanthat "fewer" dollarsflow into the beacheconomyand the RED effects aresmalleras a consequence. Theseeffects weresimulatedby determiningwhat would happenif the outsidebeachvisitorsto the "1ypical" beachregionbehaved like the outsidebeachvisitors to the rural beachregion. That is, ratherthanthe million outsidebeachtouristsnow spending$88.1~ion year,they will spend$66.7 million per year. It is alsoassumed the patternof that expenditures changeaccordingly. Relativeto the "typical" situation.the drop in will spendingby outsidetouristswill meana drop in RED benefitsby $8 million bothfor the beachregion andfor the rest of the nation. per

86

5.3

Local Fiscal Effects of Beach Nourishment Projects Local tax revenues generated recreation-related by activities at existingbeaches

may be largerthanrequiredto fund relatedbeachmanagement maintenance and costs. The implication is that beaches havemorethan enoughmoneyto fund the additionalnonFederalcost-share the beachre-nourishment for componentof the shoreprotection program. However,evenif local tax revenue collectedare greaterthanneeded cover to beachmanagement maintenance and costs,the "excess"revenues probablybeing are culTentlyusedto help fund otherimportantlocal public servicesand,therefore, they may not readily availableto fund an increase the non-Federal in cost-share. However,the local tax revenues arecollectedas a result of "new" beach that visitation dueto the hypotheticalbeachnourishmentproject could be usedto fund the increased non-Federal cost share. The non-Federal cost shareof 65 percentof the project costsasrecommended the President's in FY'02 budgetwascalculatedby applyingan assumed "cost-benefit"ratio of 2.0 to the estimated total NED benefitsthat resultfrom increases visitation dueto the hypotheticalbeachnourishmentproject; increases in in visitation considered 0.5. 10. 15.20. and25 percent. There are variousmethods are that non-Federal sponsors to fund their shareof the project costs. Onemethodof funding use the non-Federal costshareis to "float" a municipal bond to be paid for in annual increments over a periodof time (for example.20 years). The total cost of the bond includesnot only the principle (i.e.. the non-Federal cost share)but also~nterest that would accrue the periodof the bond. The bond is assumed havea 5 percentannual for to interestratecompounded annually(the September 2001rate of interestfor 20-yearState and local general obligation bondsis 5.09percent). If no "new" visitation is inducedby the hypothetical beachnourishment project or if the quality of the beachexperience not is improved,thentherewill be no additionallocal tax revenues availableto fund any of the non-Federal cost-share (evento cover the existing 35 pei'Cent sharerequirement). cost Under the increased visitation scenarios the "typical" beachregion, annualexcess for local tax revenues collectedwould be lessthan the annualcost of a bondto fund the increased non-Federal shareof the hypotheticalproject costsfor all increases visitation of

87

considered.Evenif the "typical" beachregion's project benefit/costratio was as largeas 3.0, the annualexcess local tax revenues still lessthan the annualcost of the bond for are the "typical" beachregion. If the Statein which the beachandthe "typical" region are locatedpaid 75 percentof non-Federal cost-share someStatesdo), the annualexcess (as local tax revenues would still be lessthan the annualbondcost for 25 percentof the nonFederalco'st-share. Even if a 50 percentnon-Federal cost-share were institutedandthe Statepaid 75 percent,the annualexcess local tax revenues would be lessthan the annual cost of the bondfor any increase visitation considered 5, 10, 15,20, and 25 in (0, percent). Note that annuallocal tax revenues the rural region are estimatedto be less in than annualbeach management costsfor all increases beachvisitation. Therefore, in thereareno expected excesslocal tax revenues collectedto help fund the non-Federal shareof projectcostsin theseareas.In addition,urbanregionswould also be unableto pay for the entirenon-Federal cost-share based the annualexcesslocal tax revenues on collecteddueto any of the increases visitation considered.However,if the State in participated the hypotheticalbeachnourishment in project andpays75 percentof the non-Federal cost-share. then visitation will needto increase the rangeof 15 to 20 in percentin orderfor the annualexcessloc3l tax revenues be greaterthan the annual to bond cost (if thenon-Federal cost-share 65 percentfor the urbanregion). If the nonis Federalcost-share 50 percentandthe Statepays75 percent,then beachvisitation is would needto increase the rangeof 10to 15 percentbeforeannualexcesslocal tax in revenues greater are than the annualbondcostfor the urbanregion.

I; '
J

Finally,'if the hypotheticalbeachnourishment project were not implementedand the beachwereallowedto erodeinitially, thereappears be concernthat the fiscal to conditionswithin the beachregion might degrade; so much because not visitation will declinebut because spendingby touristswill decline. If, for example,outsidebeach visitors to the "typIcal" beachregion wereto spend "and behavesimilar to thosein a rural region,thenthe amountof local tax revenues collectedwill drop. In this case,they are estimated drop to a level just abovethat needed coverthe beachmanagement to to and

88
'f

maintenance costs. It is not asserted thesechanges that reflect any actualevents. However,they might reflect the possibleconcernsof public officials responsible for managingandmaintainingbeaches.

5.4

Environmental Effects of Beach Nourishment Projects Periodicfe-nourishment beaches of often hasbeneficialenvironmental effects.

Many Corpsbeachnourishment projectshaveproducedenvironmentalbenefits,suchas providing new nestingareafor seaturtles,spawninggroundsfor horseshoe crabs,and habitatfor piping plover. leastternsand seabeach amaranth. The studiesincludedin this overview generallyindicatedlimited and short-lived impactsof beachnourishment activitiesin the subaerialzone,subtidalzoneand borrow site, when appropriate management practicesareexercised, established Corps as by regulationsandguidelines.The plant and animal species existing in littoral areas are adapted survivein the dynamicenvironmentcreatedby the naturalcycle of sand to
erosion and accretion

While in the short-term,beachnourishment resultin physical can

changes the beachenvironment;Corpsengineeringguidelinesspecify the useof to engineering monitoringpractices avoid detrimentalimpacts. Practices and to employed by Corpsengineers include planting beachplants to replacedamaged plantsandcreate pedestrian baIriers,conductingconstructionactivities in the fall and winter season to avoid interferingwith nestingand spawningseason nearshore heath animals, for and usingsandthat is closely matched sandon the existing beach, to establishing buffer zones aroundreefsandother sensitivehabitatsnearthe borrow site to preventdamage from turbidity or physicalcontactduring dredging,monitoring turbidity levels and implementingdredgingoperations designed minimize turbidity. to Noneof the studiesreviewedattempted distributethe incidenceof anybeach to nourishment environmental impactsbetween local communityand the rest of the the nation. Therearealso,however,financial costsassociated with environmental considerations madeduring beachnourishment activities. Suchconsiderations include

89

the monitoring of a nourishmentproject to identify possibleenvironmentalimpacts. There are alsocostsassociated with any specialmeasures taken to protect environmental resources suchasthe examplesgiven above. The costsassociated with thesetypesof environmentalconsiderations distributedbetWeen non-federalsponsorandthe are the federal government accordingto the cost-share arrangement established the project. for

I
1

s.s

Conclusions Due to the sensitivity of the estimated sharesof NED and RED benefits that accrue locally, it is important not to "generalize" the results provided here. The findingsheredependon the specificparameter valuesthat are usedin the analysis.Theseparameters havebeenchosenfrom selectedstudiesof beach economies.Also, the regionsusedin the analysis,althoughreal coastalcounties that containbeaches, chosenbasedtheir representative are characteristics of average, rural. and urbancoastalcounties. Specific resultsand conclusions the of presentstudymay changesubstantiallywith betterinfonnation. The shares of NED andRED benefitsthat accruelocally could be computedon a "case-bycase"basiswhen projectsareevaluated.A more comprehensive studyof the distributionof the benefitsof shoreprotectionprojectscould be undertaken with one of its purposes producemore generalresultsthan provided here. to National cost sharing decision should not be made based on the subjective findings and hypothetical situations portrayed in this study. The analysis includedmanyassumptions hypotheticalscenarios order tQdemonstrate and in a methodology that could be usedto analyzeindividual beachproject situations,if pertinentdatacould be developed collected. The methodologyappears and to wanant further development applicationin establishinga reasonable and distributionof shoreprotectionbenefitsin regardto wherebeneficiarieslive and the origin of visitors to the beaches. For th~ "typical. beach area" consideredand the geographic d~butions of the primary residenceof beach property owners and beach users, approximately 35 percent of the national economicdevelopment benefits (storm damagereduction benefits, recreation benefits, and other NED benefits) from a beach nourishment project accrue to people within the beach region and 65 percent accrue to people who reside elsewhere. The "typical" beachregion was usedbecause reflectedan averageregionalsetting it for which the greatmajority of Corpsshoreprotectionprojectsarelocated. However,consideringmorerural or more urbanbeachsettings(regions),higher percentages NED benefits(as high as50 percentfor a rural beachregion) were of found to accrueto peoplelocally. Examiningthe business opportunitiesrelatedto associated recreationalactivities, about47 percentof the regionaleconomic development benefitsaccrued peopleresidingin the "typical" beachregion and to

'.,
90

'-,._,..

53 percentelsewhere.The local percentage RED benefits'variedbetween40 of and 50 percentfor the rural and urbanregionsconsidered.

Periodic beach fe-nourishment often has beneficial environmental effects. Many Corpsbeachnourishmentprojectshaveproducedenvironmentalbenefits, suchasproviding new nestingareafor seatU11les, spawninggroundsfor horseshoe crabs,and habitatfor piping plover, leastternsand sea-beach amaranth. The most current and comprehensivemonitoring of the environmental effects of beach nourishment projects indicate that nourishment projects have no significant impacts in the long-run, when appropriate management practices are exercised,as establishedby Corps regulations and guidelines. The plant and animal species existingin littoral areasareadapted survivein the to dynamicenvironmentcreatedby the naturalcycle of sanderosionandaccretion. Properly engineeredand constructed beachnourishment projects avoid potential adverseenvironmental impacts. In doing the literaturesearch this for studyof the potentialenvironmental consequences nourishmentprojects,it of became apparent that the Corpshasdeveloped extensiveexpertiseandgeneral procedures avoiding potentialadverse for environmental consequences to the due manyyearsof experience designingandconstructingthesetypesof projects. in While beachnourishment doesacceleratecertain dynamic processes that can tax the capacity of speciesto adapt, Corps engineering guidelines specify the useof engineering and monitoring practices to avoid detrimental impacts. Practices employedby Corpsengineers includeplanting beachplantsto replace damaged plants andcreatepedestrian barriers,conductingconstructionactivities in the fall and winter season avoid interfering with nestingandspawning to season nearshoreand beachanimals,usingsandthat is closely matched for to sandon the existing beach,establishing buffer zonesaroundreefsandother sensitivehabitatsnearthe borrow site to preventdamage from turbidity or physicalcontactduring dredging,monitoringturbidity levels and~lementing dredgingoperations designed minimize turbidity to With no increasein recreation visitation induced by a project and when there is no improvement in the quality of the beachexperience,the increasein regional benefits is zero. Many Corpsfeasibility studiesanticipateno increase in tourismthat satisfiesunmetrecreational demandwith a Federalshore protectionproject. The regionaleconomicbenefitsaretied to the related expenditures beachvisitors bring to the beachcommunity. Without new that infusionsof money.therewill be no regionaleconomicimpactsinducedby a shoreprotectionproject. The impact of a hypothetical one million recreation visitors from outside the beachregion was'shownin order to provide a perspectiveof the existing value of tourism to beach communities with approximately 2-3 million in

91

total annual visitations. The analysisof the hypotheticalmillion outside recreationvisitors wasalso to demonstrate test the methodologyusedto and evaluate regionaleconomicdevelopment the benefitsof shoreprotectionprojects.

Increasesin recreation visitation induced by a beach nourishment project generatecorresponding increasesin potential regional economicbenefits. Increases visitation in the of 0 to 25% were found to result in potentialregional in economicgainsin the rangeof 0 to 10.7% All 5 statessurveyed participate in cost sharing the non-Federal share of Federal and even local projects. However,the extentto which States participate in cost sharingwith the non-Federal sponsors shoreprotection projectsvaries. of Therearealso a wide variety of funding mechanisms usedby Statesandlocal communities fund the non-Federal to shareof shoreprotectionprpjects. Given the variability of NED benefits for shore protection that accrue locally, it is extremely important to understand that the distributional patterns of the NED benefits for shore protection projects depend on the residential patterns of the property owners and the beach users.

I
1

The fiscal capacity of State and local sponsorsto fund the President's proposed65 percent non-Federal share of re-nourishment costswill not improve if beach nourishment projects do not increase beach visitation or if the quality of the beachexperienceis not improved. Beaches do not that experience increases visitation asa result of nourishmentprojectswill not in experience regionaleconomicimpact because any lack of new visitationwin not generate new spendingfor recreation. Local tax revenues, of the impact any one elements affectedbeachvisitor spending, will alsonot change. As a result,no additionalfunds would be availableto help fund any increases the non-Federal in cost-share. Although increasesin visitation at beacheslocated within "typical" beach regions due to beach nourishment will likely increaseannual local tax revenuesabove the needsfor beachmanagementand maintena~, the increasesin annual "excess" local tax revenuesare unlikely to -.>efarge enoughto fund an increasednon-Federal cost-sharefrom the current 35 to 50 percent to 50 or 65 percent of the project re-nourishment costs,evenif the State participates by paying as much as 75 percent of the non-Federalcostshare. Additional and creative funding mechanisms,other than existing local taxes and fees5y.stems, may be neededto help beach communities fund their portion of any proposed increasesin non-Federal cost-shares,evenif the State would pay a significant portion of the increasedshare of project costs. The largemajority of the Corps' beachnourishmentprojects arelocatedin regionsthat most ljke the "typical" beachregion in this report andvery few of the

r--=-' -:.~::-=-:;.:.:-.:.~-:_":;

DRAFT
~.'l' ,.oj;~

92

beachregion would be categorized either "rural" or "urban" whendefinedasin as this report.

Urban regions may be capable of funding the proposed increasednonFederal cost-sharewith beach visitation increasesin the range of 10 to 20 percent if the State participates in paying a significant portion of the DonFederal cost-share.However,few of the past,current,or authorizedCorps~h nourishment projectsare locatedin regionsthat might be classifiedas"urban": for example,urbanbeachregionswould include Miami Beach,FI, Virginia Beach, VA, northernNew Jerseyshoreand Long Island, NY in the vicinity of New Yark City, anda few others.

./

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Stronge,William B. (1994)."Beaches, Tourism andEconomicDevelopment."Shoreand Beach,62, 2:68,April. Strange,William B. (1998).TheEconomicsofGovemmentFundingfor Beach Nourishment Projects: TheFlorida Case. Strange,William B. (1998). TheEconomicBenefitsof Florida's Beaches: Local, State and National Impacts.B~a Raton,FL.:Florida Atlantic University.

99

Stronge.William B. (2000)."'The Economicsof GovernmentFunding for Beach NourishmentProjects:The Florida Case:' Stronge,William B. (200 I 'Federal Fundingof BeachNourishment." Slide show

Stronge,William B. (200 I). .'The EconomicValue of Our Beachesand Coastal Properties."Proceedings: ~OOINationalConference BeachPreservation on Technology, Orlando,FL (February7-(). Stronge,William B. and Schultz.RonaldR. (1997).Broward County Beaches: An EconomicStudy1995-96.Tech,ricalRepon 97-03.Broward County, FL: Depanment of Natural Resources Protcction.Biological Resources Division (January). The Resource Agenc.Y California (1997). California's OceanResources: Agenda ()f An for the Future. (March). TexasDepanrnent El:onomlc; of Development D.K. Shifflet & Associates. and Ltd
(2001). 2()(XJ Report {I'. T"c'I.t'/ In Tt'.{as. (August).

..,

Tourism Division ( 1999 I. I <J99O()lnestic CoastalRegion Travel Summary.Prepared by

the North Carolina Department of CommerCe.

Treyz. GeorgeI. (1993). H("~i(mal EconomicModeling: A Systematic Approachto EconomicForecaslin.~ Pnlic.\'Analysis.Boston.'MA: Kluwer AcademicPublishers (",d US Anny Corpsof Englnccrs( 1989).EngineerManual No. 1110-2-1204. Washington. DC: EnvironmentalEnglncenngfor CoastalProtection(July 10). US Army Corpsof Engineers (1993) EngineeringManual No. 1110-2-1004. Washington. DC: CoastalProject!'v1onltoring (November30). U.S. Bureauof Economic..\nalysis(BEA) (2001). "GDP and Other Major NIPA Series. 1929-20001: Sllrve."(J'" rrent Business, I." (it August. pp. 121-140. U.S. CensusBureau(:?()O(}). Denlograph;cProfiles: 2()(x)Census. Wash~n, Department Commerce. of DC: U.S

Watt, James (1983). t."conomic EnvironmentalPrinciples and Gr,idelinesfor G. and Wat~rand RelatedLand Reso"rces Implementation Studies.Washington, DC: U.S. Water Resource Council (March). Young, Allan H. andTice. HelenS. (1985).An Introduction to National Economic Accounting.Washington.DC: U.S. Bureauof EconomicAnalysis (March).

100

Appendix A Shoreline Protection and Beach Erosion Control Authorizing Legislation

1. An Act Authorizine: General Shoreline Investmentsat ~ed~ral_E~pe!!:se. PL 79-166.31 .Julv 1945. This Act established authorityfor the BeachErosion Boardto pursuea programof generalinvestigationandresearchandto publish technicalpapers. 2. Section 14. Ri"er and Harbor Act of 1946.PL 79.526.24 ulv 1946. Section 14 authorized emergency bankprotectionworks to preventflood damage to highways.bridge approaches. public works. and

3 An Act Authorizine. Federal Particioation in the Cost of Pr.2~~n! ~e

Shoresof Publici\' Owned Property. PL 79-727.13 Au2Ust 1~46. This Act authorized Federalparucipationup to.one-third('13) the cost, but not the of maintenance protectingshores publicly ownedproperty. of of
PL 84-71. 15 June 1955. Specifically authorized studies of the

areas the eastern southernU.S. with reference areaswhereaarnages of and to naG occurredfrom humcanes.
PL 84-99. 28 June 1955. This Act authorized an emergency fund for flood emergency prepOlriltiOn. flood fighting and rescue operations or for repair or restoration of flQOdcontrol work threatened or destroyed by flood.

coastal ..

and

tidal ..

6.

PL 84-826.28 .Julv 1956. Section le definesperiodic beachnourishmentas "construction"for the protectionof shores.whenit is the most suitableand economical remedialmeasure.Section l(d) providedfor Fede~sistance to privatelyownedshoresif thereis benefit"frompublic useor from protectionof nearbypublic property,

7 Section203. River and Harbor Act of 1958 PL 85-500.3 Dlv 1958. This

sectionaddedprovisionsof local cooperation threehurricaneflood protection on projectsthat established administrativeprecedent cost sharingof hurricane an for projects. Non-Federal interests were requiredto assume thirty (30) percentof total first costs,including the valueof land. easement rights of way. andthe and operations maintenance projects. and of

Shore Protection: Section103amended Section3 of the Act approved13 August 1946,asamended the Act approved28 July 1956andindicatedthe extentof by

101

Federalpanicipationin the costof beacherosion and shoreprotection(SOpercent of the constructioncost when the beachis publicly owned or used,and70 percent Federalpanicipation for seashore parksand conservationareaswhencenain conditionsof ownershipand useof the beaches met)-these provisionsare are modified by the provisions of PL 99-662. Sma" BeachErosion Proiects: Authority for the Secretaryof the Anny to undertake constructionof small beachand shoreprotection projectswasalso established underSection 103. 9. PL 99-1724 November 1963. Section1 abolishedthe BeachErosionBoardand 7 es.tablished CoastalEngineeringResearch the Center. 10.SectionsIII and 215. River and Harbor and Flood Control Act of 1968.PL 90-483.13 Au2Ust 1968. Section 111: This sectionauthorized investigationand constructionof projectsto preventor mitigate shoredamages resultingfrom Federaln~vigationworks, at full Federalcost limited to $1.000.000 project. Amended 17 November1986by per Section91~(t) arid 940, PL 99-662that, amongother things, increased limit the on Federal costsper project to $2,000,000. Section215: This sectionauthorized reimbursement (including credit against local cooperation requirements) work performedby non-Federal for public bodies after authorization water resource of developmentprojects. Executionof a prior agreement with the Corps was requiredand reimbursement was not to exceed $1.000,000 any single project. Amendedby Section913 PL 99-662andby for Section12,PL 100-676to increase limit on reimbursements project. the per 11.Sections12 and 208. River and Harbor and Flood Control Act of 1970.PL
~-~ ~~~~ ----~ -~ -~-~-

;j

.91-611.31 December

1970.

Section 12: This sectionincreased limit on Federalcostsfor small beach the erosionprojectsfrom $500.000to $1.000.000.The annual authoriz~tionlimit wasalsoraisedto $25.000.000.Limits havesubsequently beenraiierl further (mostrecentlyby PL 99-662). Section208: This sectionauthorized discretionarymodifications in Federal panicipationin cost sharingfor hurricaneprotectionprojects. 12. Section55. Water ResourcesDeveloomentAct of 1974. PL 93-251.7 March 1m.: Section55 authorizestechnicalandengineeringassistance non-Federal to public interests developingshoreand streambank erosion. in 13.Sections145 and 156. Water ResourcesDevelopment Act of 1976.PL 94-587. 22 October 1976.

~
,..1 -. ,~

102

Section 145:This.sectionauthorizedthe placement sandobtainedfrom of dredgingoperations adjacentbeaches requested the interested on if by state government in the public interest-with the increased and costspaid by local interests.Amendedby Section933. PL 99-662.to allow for Federalfundingof 50 percent the increased of costs. This sectionwas further amended Section by 207 of PL 102-580 permit agreements placementof fill on beaches be to for to with political subdivisions a s.t~. of Section 156:This sectionauthorizes Corpsto extendFederalaid in periodic the beach nourishment to 15 yearsfrom dateof initiation of construction. up Amended Section934 of PL 99-662to allow for extensionof up to 50 years. by 14.Sections103.933.934. and 940. Water ResourcesDevelopment Act of 1986. PL 99-662.17 ~ovember 1986. ~~ Section103: Section 103establishes new non-Federal cost sharingrequirements of 35 percentfor hurricaneandstorm damage preventionand 50 percentfor separable recreation. Section933: This sectionmodifies Section 145of PL 94-587to authorize50 percentFederal cost sharingof the extra costsfor using dredgedsandfrom Federal navigationimprovements maintenance and efforts for beachnourishment Section934: Section934 modifiesSection 156of PL 94-587to authorize the Corpsto extend:lId in periodic nourishmentup to 50 yearsfrom the dateof initiation of projectconstruction.
Section 940: This section amends Section 111 of PL 90-483 to allow implementation of non-structural measuresto mitigate shore damagesresulting from Federal navigation works~ to require local interests to operat~nd m~ntain Section 111measures~ to require cost sharing of implel11entatwncosts In the and sameproponion as for the works causing the shore damage.

15.Section206. 'Vater ResourcesDeveloomentAct of 1992.PL 102-580. 3! October 1992. l"nder this section,non-Federal interestsare authorized to undenake shorelineprotectionprojectson the coastlineof the United States, subjectto obtainingany pennits requiredpursuantto FederalandStatelaws in advance actualconstructionand subjectto prior approvalof the Secretary of of the Anny. 16.Section640. Water ResourcesDeveloomentAct of 1996.PL 104-303.31 December1996.Underthis sectio.n Secretary the may selecta disposalmethod that is not the leastcost option if the incrementalcostsare reaSonable relation in to theenvironmental benefits.including wetlandsdevelopment shoreline and erosioncontrol. The law clarifies shoreprotectionpolicy to maintaina Federal in

103

shorelineand beachprotectionand restoration.including the useof periodicbeach nourishment.The law also established National ShorelineErosion Control a Development Demonstration and Program(not funded). 17.Sections215'and 21.7. Water ResourcesDevelopment Act of 1999.PL 106-53. 17 Au2Ust 1999. Section215: This sectionmodifies Section103(d)of WRDA '86 by changingthe non-Federal shareof periodic nourishment coststo 45 percentafter 1 January 2002 andto 50 percentafter 1January2003. This is for projects in reports authorized L"onstruction for after thesedates. Section217: This ~ction modifies Section145 of WRDA '76 by changing50 percentto 35 percent.

.~

104

Appendix B Income Componentsof U.S. Gross Domestic Product, 1996

(Billions of dollars)
Compensation of employees Wage & salary accruals Disbursements Wage accruals less disbursements Supplements to wages & so1l:lncS ~Ioyer contributions for SOCIal Insurance Other labor inco~

4.426.9 3.633.6 3.632.5 1.1 i93.3 385.7 407.6

Proprietor'sincomewith in\emory & c3pllal consumptionadjustments Rentalinco~ of persons with capItalconsumption adjustment
Corporate profits with inventory valuation & capital consumptionoojustments COl1XJl'a1C profits with inventor)' valuatIon ooJustment Profits before tax Profits tax liability Profits after tax Dividends Undistributed profits Inventory valuation adjustment Capital consumption adjustment Net interest

735.9 674.1 676.6 229.0 447.6 304.8 /J42.8 -2.5 61.8

National Income
Business transfer payments To persons To the rest of the world Indirect business tax & non-ta.~Ir;lhillty uss: Subsidies less current surplus uf government enterprises

6.1.54.5

33.6 26.0 7.6 W4.8 25.4

830.1 682.7 147.4 125.1 12.3

Consumption fixed capital of Private Govem~nt Generalgovem~nt Government enterpriscs Gross National Income Less:ReceiptS factor incomeform the reStof the world of Plus: Payments factor inco~ to the restof the world of G~ DomesticIncome

,/

7.697.6

234.3 232.6 7,695.9

~59.9 7,636.0

Statistical discrepancy

G~

DomesticProduct

Source:U.S. Bureauof f.conomic Analysis (BEA) A Guidetot/Ie NIPA's: Methodology, National Incomeand ProductAccounts,1929-1997. Washington.DC: U.S. Department of Commerce (June2001).

105

Definition of Terms
Compensationof employees the income accruingto employees remunerationfor their work.. It is the is as sum of wage andsalaryaccrualsand of supplements wagesand salaries. to Wage& salary accnlals consistof the monetaryremunerationof employees. including the compensation of corporateofficers: commissluns. tips. and bonuses; voluntary employeecontributions to certaindeferred compensation plans.suchas~Ol(k) plans; andreceiptsin kind that represent income. Wageand salary accrualsconsistof disbursements wageaccnlals lessdisbursements. Disbursements wagesaOO and are salariesasjust definedexceptthat retroactivewagepaymentsare recordedwhenpaid ratherthan when earned. Accrualslessdisbursements the differencebetweenwagesearned.or accrued.and wages is paid. or disbursed. In the NIPA's. \\agesaccruedis the appropriatemeasure national income.and wages for disbursedis the appropriate measure persona;l for income. Supplementsto wages salilries consistof employercontributionsfor social insuranceand other labor & income. Employer contributionsfor social insurance consistof employerpaymentS underthe following Federaland Stateandlocal government programs:Old-age.survivors.and disability insurance (social security); hospitalinsurance: unemployment insurance; railroad retirement;governmentemployee retirement;pensionbenefit guaranty:veterans insurance;publicly administeredworkers' compensation; life military medicalinsurance: te~r:}ry disability insurance. Other labor income consistsof employer :lnd payments(including payments kind) to private pensionand profit-sharingplans. private group healthand In life insuranceplans.privately administered workers' compensation plans.supplementalunemployment benefit plans.corporate direct(lr~.fees.:lnd severalmioor categories employeecompensation. of including judicial feesto jurors and \A.llnesses. compensation prison inmates.and marriagefeesto justicesof the of peace. Proprietor's income with inrt'nlory & capital consumptionadjustmentsare the current-production il:Ome

J J
~

{includingincome kindI (II ~(lieproprietorships partnerships of tax-exemptcooperatives.The in and and

imputed l:Ietrentalincomeof 11\\ner-OCcupantsfarm dwellings is included;the imputed net rental il:O~ of of owner-occupants non-farmd\\'ellings is includedin rental incomeof persons(describedbelow). of Proprietors' incomeexcludes divIdendsand monetaryinterestreceivedby non-financial business rental and incomesreceivedby persons pnm3rily engaged the real estatebusiness; ni)t in theseincomeare includedin dividends, net interest.and rental Incomeof persons. Rental income of personswith capital consumptionadjustment is the net current-productionincomeof personsfrom the rentalof real property exceptfor the incomeof persons primarily engagedin thereal estatebusiness~ imputednetrental incomeof owner-occupants non-farmdweUings;and the royalties the of receivedby persons from patents. l:opyrights.and rights to naturalresources. Corporateprofrls with inventory valuation & capital consumptionadjustmentsare the net currentproduction income of organizations treated as corporations in the NIP A .s.

These orga~ons consist of

all entities requiredto file Federalcorporatetax returns.including mutual financial institutionsand cooperatives subjectto Federalincometax: private non-insuredpensionfunds; non-profit institutionsthat primarily servebusiness: FederalReserve banks:and federally sponsored credit agencies.With several differences.this incomeis measured receiptslessexpenses definedin Federaltax law. Amongthese as as differences:receipts excludecapital gainsanddividendsreceived.expenses exclude depletionandcapital lossesand losses resultingfrom bad debts.inventory withdrawalsare valuedat replacement cost.and depreciationis on a consistent accountingbasisand is valuedat replacement cost using depreciation profiles based empiricalevidenceon used-:asset on prices that generallysuggesta geometricpatternof price declines. Because nationalincomeis definedasthe incomeof U.S. residents. profits component its includesandexcludes incomeearnedin the United Statesby the rest of the world.
Profits before tax are the income of organizations treated as corporations in the NIP A' s except that it reflects the inventory- and deprf;ciation-accounting practices used for Federal income tax.returns. It consists of profits tax liabilitY.,dividends. and undistributed corporate profits.

106

Profits tax liability is the sumof Federal.State.andlocal incometaxeson all income subjectto taxes;this incomeincludescapital gainsandother incomeexcludedfrom profits beforetax. The taxesare measW"ed on an accrualbasis.net of applicabletax credits. Profits after tax areprofits betoretax lessprofits tax liability. It consistsof dividends and undistributed corporateprofits. Dividendsare payments cashor other assets, in excluding the corporations'own stock.. that are madeby corporations locatedin the United States abroadto stockholderswho are U.S. and residents. The payments measured of dividendsreceivedby U.S. corporations. Dividendspaidto are net Stateand local government SOCIal insurance fundsaoo ge~l government included. Undistribrlted are profits are corporate profits alter tax lessdivideoos.
Inl'tntory I'alIuItion adjuslmeonl tor corporations is the difference between the cost of inventory withdrawals as valued in the :oourcedata used to determine profits before tax and the cost of withdrawals valued at replacement cost. It IS needed becauseinventories as reported in the source data are often charged to cost of sales (that I~. \\Ithdrawn, at their acquisition (historical) cost rather than at their replacement cost (the concept underlying the NIPA's). As prices change, companies that value inventory withdrawals at acquisition I.:O~t may realize profits or losses. Inventory profits. a capital-gains-like element in profits. result from an Incre:1~e Inventory prices. and inventory losses. a capital-loss-like element of In profits. result from a decrea~eInventory prices. In the NIPA ;s. inventory profits of losses are shown as adjustments to business Income ccorpoiate profits and non-farm proprietors' income); they are shown as the inventory valuation adjustm~nI \Vlth the sign reversed. No adjustment is needed to fann proprietors' income because farm inventorlc:o ilfe measured on a current-market-cost basis. Net interest is the interesl paid by private business less the interest received by priva~ business. plus the interest received from the resl of lhe world less the interest paid to the rest of the world. Interest payments on mortgage and home improvemenlloans and on home equity loans are counted as interest paid by business becausehome ownership is treated as a business in the NIPA's. In addition to monetary interest. net interest includes impuled Inieresi. which is paid by corporate financial business and is measured as the difference between the properly Income received on depositors' or policyholders' funds and the aDX)Uot of property income paid oul explll.:lll~'. The imputed interest paid by life insurance carriers and non-insured pension plans altributes Ihelr Inve~lment income to persons in the period it is earned. The imputed interest payments by financial inlermedl:1r1es other than life insurance carriers and private non-insured pension plans to persons, govemmenls. ilnd to the rest of the world have imputed service charges as counter enbies in gross domestic product and In net receipts of factor income from the rest of the world; they are included in personal consumption expenditures. in government consumption expenditures and gross investment. and in exports of goods and ser\lCes. respectively.

Businesstransfer paymentsclm~istof payments persons to tbe rest of the world by privatebusiness to and for which no currentservlce~ performed. Business are transferpayments persons consistprimarily of to liability payments non-profit institutions. Busi"ness of transferpayments the rest of the world arenonto residenttaxes-taxes paId by domesticcorporations foreign governments. to Indirect business & non-tax liability consists (I) tax liabilities that are chargeable business tax of to expensein the calculationof profit-type incomes (2) certainother business and liabilities to general government agencies aretreatedlike taxes. Indirect business that taxesinclude taxeson sales.property. and production. Employercontributionsfor socialinsurance not included. Taxeson coflX)rate are ilK:O~ are not included:thesetaxescannotbe calculated until profits are known.and in that sense. they are not a business expense.Non-taxes includesregulatoryand inspectionfees.specialassessments. and fines forfeitures.rentsandroyalties.and donations. Non-taxes generallyexcludebusiness purchases from generalgovernment agencies goodsand services of that aresimilar to thoseprovided by the privatesector. Government receiptsfrom the salesof suchproductsare nettedagainstgovernment consumption expenditures. Subsidieslesscurrent surplus (if governmententerprises.Subsidiesare the monetarygrantspaid by government agencies privatebusiness to government to and enterprises anotherle\'el of government at

-r

107

The current surplus of governmententerprisesis their current operatingrevenueand subsidiesreceived from other levelsof governmen(lesstheir currentexpenses.In the calculationof their currentsurplus.no deductionis madefor net interestpaid. The currentsurplusof governmententerprises not countedasa is profit-type income.and therefore.i( is not coun(edasa factor charge. Subsidies and current surplusare shownas a combinedentry because defici(s incurredby somegovernmententerprises li1ayresult from selling goodsto business belo\v-marketpricesin lieu of giving them subsidies. at Consumptionof fLred capital is a ch:lrgetor the using up of private and-government fixed capital located in the United St:ltes. It is basedon studiesof pricesof usedequipmentand structuresin resalemarKets. For generalgovernmentand for non-profit institutionsthat primarily serveindividuals. it is recordedin governmentconsumptione:\penditures in personalconsumptionexpenditures. and respectively,as the value of the currentservicesof the ti:\ed c:lpital assets owned and usedby theseentities. Private capital consumptionallowancesConsI$1 l:l~.retum-based of depreciationchargesfor corporationsand non-farm proprietorshipsandof historical-costdepreciation(calculatedby BEA using a geomebicpatternof price declines)for farm proprietor!'hlps.rental incomeof persons. and non-profit institutions. Private capital consumption adjustmentISthe dIfferencebetween private capital consumptionallowancesand private consumptionof fixed c:lpit:ll. Receiptsof factor incomeform the rest of the world consistof receiptsby U.S. residents interestand of dividends.of reinvested earningsnr rnrelgnaffiliates of U.S. corporations.andof compensation paid to U.S. residentsby foreigners Paymentsof factor income II) Ihe rf'sl of the world consistof paymentsto foreign residentsof interestaid dividends.of reinvested earn!ngslIt U.$. affiliates of foreign corporations.:lnd of compensation paid to foreignersby U.S. residents. Statistical discnpaftcy is .1n.income.' component that reconcilesthe incomeproduct sidesof the NIPA's. It arisesbecause two sides;Ireestimated the using independent and imperfectdata.

1.

1
1.1

f
108