Beach Projects at Risk From Lawsuit, Budget

The state's General Land Office has a lot on its plate these days — a major property rights lawsuit, the reopening of Texas’ favorite surf spot and an ongoing project to restore one of the state's most popular fishing destinations. It's also facing a potential change in the way it acquires funds for a key responsibility: restoring beach areas damaged by development, storms and natural erosion. 

For years, the agency has attempted to secure a dedicated source of revenue for coastal erosion projects, arguing that the economic benefit outweighs the costs. Ironically, the state's budget crisis may help the agency get what it has wanted for so long. But the strangely fortunate possibility of securing the funds comes as a Texas Supreme Court lawsuit threatens the GLO's ability to even conduct coastal erosion projects in the future.

“The beach is a recreation area no different than building a mega sports complex,” says Land Commissioner Jerry Patterson. “If we invest in it, then we get a return.” According to Taylor Engineering, a private firm contracted by the GLO, that return is an average of $2.65 for every $1 invested in Texas coastal erosion projects. The firm's report evaluated eight projects that accounted for about one-third of total coastal erosion funding over the last four years. 

The GLO depends on the Texas Parks & Wildlife Department for most of the funding for coastal erosion projects. The department is required to send the GLO nearly half the revenue it receives from the state sporting goods sales tax. The House budget proposal would change the way these projects are funded. The plan would cut state funding in half and set up a new, dedicated source of revenue — a landing fee on commercial shipping and passenger vessels that dock at Texas ports — to mostly replace the loss.

If all goes according to the House plan, the GLO would get slightly less money in the 2012-13 budget than the $22 million it received in the 2010-11 budget for coastal erosion projects. (The state Senate's proposed budget also projects slightly less money for the GLO for the next biennium but doesn't change the source of the money.) The GLO couldn't spend all of the $22 million it received last year, though. After losing a lawsuit in the Texas Supreme Court, the GLO was forced to cancel a $40 million project to repair damage caused by Hurricane Ike on West Galveston Island in 2008.

The lawsuit, filed by California resident Carol Severance, who owns beach rental properties in Galveston, called into question Texas’ rolling easement property law. Under the law, property lines of the “wet beach” controlled by the state and accessible to the public can change because of natural events. The lawsuit is still in the U.S. 5th Circuit Court of Appeals, but the state Supreme Court has issued an opinion on the rolling easement property law, saying it doesn’t apply to land eroded by big storms. In effect, the opinion prevents the state from legally acquiring Severance’s property to conduct the beach nourishment project it was planning.

The opinion was controversial: It could limit Texans’ access to public beaches and open the door for similar lawsuits against the GLO, making it harder to perform coastal erosion projects in the future.

But the ruling hasn’t settled into law yet. The Texas Supreme Court reopened the case Friday, granting the GLO's commissioner a rehearing for oral arguments in April. 

Still, after the state Supreme Court's opinion, the GLO canceled the West Galveston Island project. “Rather than try to hurry up and spend that money, we decided to give it back to the Legislature,” says GLO spokesman Jim Suydam. The Legislature is already using some money the GLO has returned to help close the budget gap for the current biennium. “We’re hoping that … will be taken into consideration when the [2012-13] budget time comes,” Suydam says.

One benefit of beach renourishment projects — hauling tons of sand to the beach to undo erosion — like the one canceled in Galveston is that if a hurricane later ravages the coast, “the federal government will pick up most of the cost to repair it,” Suydam says. After Hurricane Ike, federal funding for coastal erosion projects increased dramatically. FEMA matched nearly 90 percent of funding for hurricane damage-related projects — a total of $15.8 million from September 2009 to the present. Coastal erosion projects also received additional money from federal offshore oil and gas tax revenue, and other federal funds during that time — a total of more than $61 million.

Other GLO beach projects outside of Galveston, though, have had better success and have benefited from the influx of federal dollars. On Monday, the GLO reopened Surfside beach in Brazoria County. Before Hurricane Ike, the GLO had built a revetment — a structure to protect the beach from erosion caused by the nearby Freeport ship channel. Surfside was already experiencing 16 feet of erosion a year when Hurricane Ike wiped out the beach, the revetment GLO had built to protect it, and nearly all of the beachfront properties near Surfside.

The GLO invested $4.7 million — including $480,000 in state funding — to rebuild a stronger stone revetment and to haul 167,500 tons of sand back to the beach. The beach now protects $53 million in public infrastructure that had been threatened by waves encroaching on the city, according to the GLO. Surfside, though, was different from Galveston. Few beachfront properties remained after Ike, and the beach was entirely submerged in the Gulf. That made it easier for the GLO to legally access the land and rebuild the beach.

Another ongoing project is at Rollover Pass — a fish pass or cut through Bolivar peninsula. Just north of Galveston, the area is a tourist hotspot for fishing, supports many local businesses, and may soon be declared a historical landmark. "Anybody could stand up there for free and catch," Suydam says.

But Rollover Pass also causes extreme erosion of the peninsula. If the GLO doesn’t intervene, Suydam says, “Bolivar Peninsula would soon become Bolivar Island.” 

Current funding is enough for the planned project to fill the pass and build a fishing pier, but Patterson says it’s important to also build recreational amenities on the pier, which could support local businesses and generate tax revenue for the state.

Patterson says the GLO knows which locations have the most economic promise — like Surfside Beach and Rollover Pass — and that’s where they invest coastal erosion funding.

GLO officials say it's critical lawmakers find a way to secure future funding for beach erosion projects, but they also are weary of how the ongoing legal trouble will affect their ability to protect Texas beaches with those funds. If the Supreme Court's opinion on rolling easement becomes property law, "it could certainly affect what kind of projects we could do in the future," Suydam says.