MSBU is nothing but a government-sanctioned beachfront land grab

I am a beachfront property owner and part-time resident in the proposed Destin “SubArea” of the Municipal Services Benefit Unit (MSBU), which the Okaloosa County Commissioners plan to adopt.

As I understand it, the MSBU will fund part of the cost of beach restoration by way of an 8-year assessment against certain property owners. I am writing to submit comments in advance of the public hearing scheduled for August 7.

As your notice of the Aug. 7 hearing suggested, I’ve read the Funding Feasibility Study to find a “specific description” of the MSBU “methodology.”

Frankly, the “methodology” in the study is far more disturbing than reassuring. Every property owner who will be assessed in the Destin and Okaloosa Island MSBU should read it.

The Funding Feasibility Study starts with the premise that beachfront property owners in Destin should bear 36 percent of the cost of beach restoration there, because that is the amount needed to make up the shortfall in funding from the TDC and the state.

The study likewise proposes that property owners on Okaloosa Island, which is declared a separate “SubArea”, should pay 24 percent of the cost of beach restoration there, again simply because that is how much is needed to cover the shortfall in funding from other sources.

In other words, the study starts with plugged numbers chosen only to reach the desired total of funding needed in each SubArea. There is no analysis of how much of the total project cost the beachfront property owners should bear in relation to their share of total project benefits.

Instead, the study simply assigns the entire funding shortfall in each SubArea to the property owners in the MSBU.

The fact that one is 36 percent and the other is 24 percent is happenstance, a function of funding deficits, and not a product of benefit analysis.
After adopting the shortfall in other funding as the starting point, the study uses two formulas to allocate benefits, and therefore to apportion costs, to the property owners to be assessed in each SubArea. One, the Storm Damage Reduction (SDR) benefit, claims to look at the benefit beachfront owners will derive from restored beaches in reducing damage from future storms.

The other, called the Recreation (REC) benefit, presupposes that all owners in the MSBU will get “increased recreational opportunities” from beach restoration. Though noted in citizen e-mails attached to the report, the Study itself makes no distinction for the fact that the beaches in Destin are privately owned (mostly by beachfront condominium associations and some single family residences), while the beaches on Okaloosa Island are public.

In declaring that its reliance on the SDR and Recreational benefits is “fair”, the study fails to review or compare any other possible measures of benefit. It contains no analysis or comparison of any “methodology” other than the one the author advocates.

It likewise omits any discussion of offsets for detriments flowing from beach restoration, such as the owners’ loss of beachfront property rights, including (in Destin), the loss of the right to own accretion, the decrease in rental and property values from public use of beach no longer privately owned, the loss of use and enjoyment, the increase in public access points, and the additional burden of parking and busing.

To make the numbers work, the study arbitrarily divides the two assumed benefits, SDR and Recreation, into a 60/40 split, based on nothing more than a subjective guesstimate by the author of the report.

Nowhere in the study is there any empirical data, scientific survey, or poll. In fact, there is no “study” at all — to show how these two assumed types of benefit should be quantified (other than to plug in the two different funding shortfalls in each SubArea), or how they should be apportioned among owners, either in Destin or on Okaloosa Island.

In particular, the report wholly fails to offer any historical or scientific support to quantify storm damage, storm damage protection by beach restoration, recreational uses and benefits, or the geographic boundaries of any of those things.

Once the study adopts the arbitrary 60/40 split between the assumed Storm Damage Reduction benefit and the assumed Recreation benefit, it applies to the SDR an elaborate point formula, again with no empirical support, to apportion benefit and cost among properties according to lot size, number of units, and beachfront footage.

There is no rhyme or reason in the selection of these factors, or in the assignment of the points in the scoring system, except that the author says it makes sense. The reader is left to wonder why the author weights the point scoring so that one-tenth of an acre, ten feet of beach, and one condominium unit each count the same.

In the absence of a reasonable explanation supported empirically, it certainly looks arbitrary. Anybody else could just as easily assign different point values or different linear or square footages that would alter the results.

To make matters worse, the study then modifies the SDR results by assigning three arbitrarily selected point levels (25, 50, and 100) to commercial properties based on “a site visit to assess business size and capacity”, classifying them as large, medium, or small.
As far as a reader of the report can tell, this could mean that somebody drove by the businesses and put them into rough categories based on nothing more scientific than how big the buildings looked from the street.

Moreover, no part of the SDR formula takes into account the fact that the engineers have said the beach restoration will need to be redone in 5 to 8 years. The allocation is structured as though the benefit were permanent, while in fact the benefit may not even last as long as the assessment.

The Recreation benefit formula, on the other hand, allocates pro rata among owners, because the author says every owner of property assessed in the MSBU will have the same “opportunity” to use the beach.
But so will everybody else.

This is the most glaring defect in the Recreation benefit formula, as applied in Destin: It would assess beachfront property owners for the so-called “benefit” of having their private property taken away from them by the state of Florida. As if to drive home the point, the study specifically recommends that the county, the TDC, and the city of Destin construct “beach access improvements” in Destin to provide more public access to restored beaches.

The threatened loss of private property rights in Destin is a flashpoint for further controversy. When the FDEP issues the permit for the beach restoration project, it will enshrine the new “erosion control line,” located at or near the June 2007 mean high water line (essentially the edge of what is now the wet sand).

All of the new sand will be state-owned. Destin beachfront properties will no longer be beachfront. They will sit behind 200 or more feet of public beach. A Realtor has already told me that my property value will decline significantly, but I’ll bet the assessor won’t rush to lower the ad valorem assessments of former beachfront owners.

Florida law allows a county to create an MSBU to assess properties for the cost of “municipal services” allocated on the basis of the “benefit” delivered to them, just as the name says: municipal services benefit unit. In this case, Okaloosa County is assessing beachfront owners in Destin for the cost of a facility the state will own under Florida law: a “nourished” beach. The statute on which the county relies, section 125.01(1)(q), Fla. Stat., allows no such thing.

The way benefits and costs are supposed to be allocated under an MSBU is simple. The folks who get the benefit of the project are supposed to pay for it proportionally to the benefit they receive. For example, the county could use an MSBU to assess the people living on a quiet residential street for the cost of repaving their street, because they get most of the benefit. But the county cannot impose on those same people the cost of converting their street into a heavily trafficked state highway. In that case, the residents on the street lose more than they gain, while the benefit is more widespread across a larger public.

Surely Okaloosa County would not require that the cost of building or operating a public park be borne by the people who happen to live next to it. The county would not assess the residents on the nearest street for the shortfall in funding for construction or operation of a public library. The county would not make the homeowners of the nearest neighborhood bear the cost to build and run a public hospital.

The law allowing the creation of an MSBU does not permit a county to use it that way. Mere geographic proximity to a publicly owned facility open to use by the public at large is not a sensible measure of benefit.

The same principles apply to the proposed beach restoration MSBU. The county cannot use an MSBU to take money from the closest property owners, just because they are near the project, in order to fund construction of a state-owned beach, which by law must be open to public use.

This misapplication of the MSBU funding mechanism is all the more egregious because the county itself cannot even deliver the claimed benefits: future storm protection and recreational use will derive from the state as owner of the new beach.

At the same time, the former beachfront property owners will lose their riparian right to the regrowth of their sand by natural accretion. The county has not budgeted to take those property rights by eminent domain and pay for them.

In summary, the “MSBU methodology” in the Funding Feasibility Study is nothing more than the unsupported opinion of the consultant who was paid to write it, based in part on anecdotal input he heard from some property owners in the MSBU areas in Destin and on Okaloosa Island.

The study makes no pretense of following any recognized method of quantifying and allocating benefits, except the author’s subjective judgment. Although the study says there are “objective, measurable factors that are rationally related to the benefits”, they appear nowhere in the report itself. The factors the study does apply are selected and weighted on an entirely subjective basis, what the report calls the consultant’s “experience and judgment.”

That’s another way of saying it’s all guesstimated.

Unsupported opinions do not qualify as a “study.” In the absence of any empirical data, all contrary opinions are just as valid as the author’s. The e-mails attached to the study confirm this; they show that the author tinkered with the formula to minimize public resistance, and that he did not rely on any empirical data.

Under these circumstances, it is hard to imagine that the MSBU “methodology” has any real hope of withstanding legal challenge.

If any more proof were needed to demonstrate its lack of substance, the study concludes with a recommendation that the commissioners change the results by altering the MSBU boundary to include the businesses south of Highway 98 along the northern shoreline of Destin Harbor, and that it assess non-beachfront businesses for the SDR benefit that the report allocated only to beachfront property owners.

If the boundaries of the “benefit” unit can be redrawn so readily, and if the entire beachfront thesis for the SDR benefit can be abandoned so easily, just to find more pockets to assess, then they were not well founded to begin with.

I ask the commissioners to please reconsider its reliance on the seriously flawed “methodology” in the Funding Feasibility Study. And to please reconsider that an MSBU should not be used for the purpose of forcing people to pay for the “benefit” of giving their property rights away to the state. It is no wonder that many beachfront owners do not want beach restoration at the cost of losing private beachfront ownership and natural accretions.

If beach restoration can be done in a way that does not convert all of Destin into public beach, many opponents, including me, would be happy to become advocates for the project.

But the county should not tie that essential project to the controversial restoration of other stretches of beach where the owners do not need or want new sand, or do not want to lose their property rights.

Walter C. Thompson, Jr. is a resident of Destin’s Regency Towers