I love it when I receive comments like the one following. It was sent in response to this post, but like many of the comments that arrive here, I think it deserves its own feature!
Obviously the people of Dare County and Nags Head DO NOT WANT Nourishment. If they did, they would have voted for it. Your experience in the lending industry, surely you know math and what makes economic sense... better yet, find someone to finance it... see how fast $30 mil floats into the ocean.
OK Anon. First, some numbers…..
$1.156 BILLION DOLLARS—Total personal income in Dare County---2006 US Census
$853 MILLION—Total earnings generated in Dare County--- 2006 Census
$86 MILLION---Dollar value of annual manufacturing shipments—2002 Census
$51.6 MILLION—Annual Retail Sales 2005-06 Fiscal Year—Dr. James Kleckley—ECU
$288 MILLION—Occupancy Tax Revenues Collected—2005-06 Fiscal Year—Ibid.
28.6%--Percentage of work force engaged in tourism/entertainment/hospitality—Ibid (vs. 9.4% state average)
18.6%-Percentage of work force engaged in retail sales –Ibid. (vs. 11.7% state average)
11.4%-Percentage of work force employed in real estate, primarily for rental/vacation homes—Ibid. (vs. 1.6% state average)
8.6%--Work force employed in construction and related-Ibid. (vs 6% state average)
$13 BILLION—Estimate of tax value of Dare County residential property
$1.8 BILLION—Estimate of tax value of Dare County commercial property
Next, a little risk management theory. Typically, risk mitigation (insurance, a hedge, loss control techniques) is called for if the marginal cost of reducing the risk is equal to, or less than, the marginal cost of taking the risk. Secondly, risk managers typically try to insure or mitigate large, unpredictable catastrophic losses (such as acts of nature) while retaining funds (self-insuring) for predictable, financially manageable losses.
Virginia Beach looks at the property tax and commerce value of their ocean front economy (and remember, they are a far more diverse economy than the Outer Banks) and still arrives at the conclusion beach nourishment is a cost of doing business. They treat sand replacement as an insurance policy.
Critics of nourishment are fond of reciting one mathematical fact---$30 million in, $30 million washed away. A zero-sum equation. Look again at the numbers above. I can show you with numbers what beach nourishment will cost, and I can show you facts relative to the dollar value of the local economy, which I assume to be almost totally reliant on not only our beaches, but the tax base "at risk", as well as the infrastructure. Would you bet $30 million a year to mitigate extreme damage that serves as the basis for a $1.1 billion dollar personal income base? Would you bet $30 million to preserve $853 million of annual, local earnings? How about $30 million to protect $13 BILLION of tax base, much of it east of Hwy 158 and on Hatteras, Highway 12? And what if we got "lucky" and the sand lasted two years, bringing our annual costs down to $15 million, while doubling the amount of personal income, earnings, and tax revenues protected? Go three years and the costs drop to $10 million per annum with a tripling of the wages, revenues and taxes saved. If we go five years, as the plan called for, the expense is a mathematical drop in the bucket.
Now, I've shown you my opinion of the math. Show me yours. Give me more thought than telling me $30 million is going to be flushed out to sea. As an opponent of beach nourishment, tell all of us what amount of tax base we will lose as we incorporate the concept of retreat. Estimate or project not only that number, but the effect on personal income, other non-property taxes, and lost infrastructure. Tell us how much "clean up" of destroyed ocean front structures will cost, and what will the debris do to our beaches? Explain to us, as Eye on Dare mentioned today, how we obtain a "revitalized" natural beach in South Nags Head when the present beach-- filled with the ghost's of homes and roads lost in the past-- is full of old septic tanks, foundations, and pilings in the surf zone.
Take your equation further. Let's say we do nothing and let ALL of the ocean front go, at any place and at any time. How far will you and your fellow travelers go? Do we abandon Highway 12 in certain places? If we let that go, do we abandon those homes and businesses on the west side of Highway 12? Once the beach front begins to fall into the ocean in earnest, how many tourists will cease to visit? Can you confidently tell all of us that not only will the lost revenues and taxes not harm those remaining (by raising our taxes to replace those lost), but that a battered beach in various stages of disrepair will continue to attract visitors? Show us your numbers.
So yes, I can do math. I can even do rudimentary risk management calculations. Now show me your stuff!!!