Galveston Bay Oystermen Prepare for Lease Increases; Persistent Fiscal Shortfalls Cited as Cause

by / Newsroom Ink on October 20, 2016

GALVESTON, TEXAS — Jure Slabic learned this business like most who’ve survived it, he was initiated on the water by experienced family-based oystermen a generation or two older. He’s been doing this since he was nine.

“My father’s great, great grandfather was the first in our family,” said Slabic, of Gulf Coast Oysters in Dickinson, TX. “We were among the first Croatian settlers in the Gulf, and we’ve been oystering for 150 years.”

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On the dock with Jure Slabic of Gulf Coast Oysters.

Now 34 years old, Slabic is an experienced waterman in the western Gulf of Mexico’s Galveston Bay. It’s the Gulf’s busiest area for oysters, and one of the most challenged since 2008.

That’s when Hurricane Ike wiped out half of Galveston Bay’s oyster habitat, some 6-7,000 of consolidated oyster reef and killed 60% of oysters in Galveston Bay (as much as 80 percent in East Galveston Bay). Every year since has been fraught with the scare of oyster-killing storms, droughts or floods. Earlier this year, in fact, Galveston County declared a disaster after the bay flooded with fatal freshwater from inland rains two years in a row, threatening the next couple years of harvest.

p1000359So it makes sense that the oyster industry says anytime is a challenge to absorb cost increases on their livelihood — particularly the 10-fold rate hike Texas Parks and Wildlife Commission (TPWC) has proposed for locating oyster operations in the Bay.

“You can’t impose this high rate on us. The industry can’t sustain this,” said Lisa Halili, of the family-run Prestige Oysters, Inc., in Dickinson, Texas, a founding corporate member of the Gulf Seafood Institute.

Presently, the state manages 43 “leases” covering 2,321.8 acres in Galveston Bay. The “lease contracts” are not for spot of land as the term “lease” when properly defined would indicate. Instead, these are “certificates of location”, which allow operations to locate their oysters, harvest from the water and make improvements to the habitat in a specific area which is owned and controlled by the State.

Though oysters can be found in most Texas bay systems, over 90% of the public reef areas utilized by commercial and recreational fishermen are found in Galveston, Matagorda and San Antonio Bay, according to the TPWD. These bay systems have good freshwater inflows. All of the oyster leases occur in Galveston Bay, TPWD says.

The first long-term certificates of location were offered in 2002 with 15-year terms, all set to expire at the end of February 2017. Prior to 2002, certificates were renewed annually. In advance of next year’s renewals, the State is recommending a number of changes in fees and practices governing how oystering happens in Galveston Bay.auburn

TPWC’s proposal is punctuated by a tenfold increase in the cost of certificates, soaring from $6 to $60 per acre. The increase is needed to recover the State’s losses in managing and enforcing Texas’ oyster harvest each year, said Lance Robinson, Deputy Division Director of the Texas Parks and Wildlife Department’s division of Coastal Fisheries.

Last year alone (FY15), total program revenue was just $13,930.80 while TPWC spent $59,049.86 in management and administrative costs plus $92,465.22 more on enforcement, according to Department documents. That’s a $137,584 shortfall.

Texas has lost money on the program dating as far back as 1999 when the State Auditor noted a $95,190 shortfall in a special report.

“The state’s doing a good job managing the resource,” said Prestige Oyster’s Halili. “I guess they never really looked at what it costs to run the programs. Still, we can’t sustain what’s been proposed.”

Halili, Slabic, and other certificate holders in Galveston Bay have been collaborating on two or three variations of the proposal, and came to agree on an alternate plan to present the State.

“We’re fiercely competitive, but with industry matters we come together for the interest of the resource,” Slabic said. “I think (TPWC officials) received more pushback and more pressure than they expected. And I think they’ve learned a lot about how much the private industry has invested back into the bay.

A long-arm track hoe deposits oyster culch material to create a reef. © Texas Parks and Wildlife Department

An industry-proposed alternative calls for doubling the cost of certificates from $6 per acre to $12 — that’s the highest of any state in the country. The proposal also calls for fees to help offset the State’s deficit, including a new $300 fee on transplant vessels per day during transplant season and an increased “cultch tax” from .20 cents to .50 cents per sack of oysters harvested to be earmarked for rebuilding habitat on public reefs. Cultch is material like rock and oyster shell that furnishes a place for larval oysters to attach and grow to maturity.

The increases are significant in the context of what’s happening next door in Louisiana, said Tracy Woody, President of Jeri’s Seafood, in Anahuac, Texas.

“Louisiana just went from $2 to 3 dollars for their leases, and they have more than 400,000 acres in private leases over there. So their leases are half our costs now, and they’ll be at least ¼ below our costs after this [proposed increases passes]. It’s going to be harder to compete with that now.”

Other changes involve allowable harvest quantities per acre during the first five years of a lease, and another provision requiring renters to install bed material equal to one-third of their average catch during years six to 15 of the lease for developing public oyster habitat.

The industry is generally supportive of the conservation intent, Woody said. “You can’t just keep taking and taking from the resource and expect it to be there; you have to put back.”

The public has two more weeks to pose comments, concerns and questions about any of the proposed changes, which are posted online here, through 9am on November 3. Look for the sections labeled “Oyster Harvest Rules” and “Oyster License Fees”.l1020791

All public comment input will be considered at the TPWC’s next public hearing, scheduled for 9am Thursday, November 3 at the Department’s Headquarters in Austin. Directions to the meeting can be accessed here. Live streaming audio will be available for those who cannot attend.

While pricier oyster leases are unlikely to impact consumers immediately, costs like these contribute to the overall market or menu prices at oyster bars, seafood shops and fish houses, said a longtime respected Gulf seafood buyer.

“If costs to produce oysters keep increasing and you have a declining harvest like we’ve seen the past few years in Galveston, it’s going to cost more to bring these oysters to market,” said Jim Gossen, chairman of Sysco Louisiana Seafoods in Houston, one of the premier seafood buyers in the country. “But those costs will be more determined by the availability of oysters, not the costs associated with leases.”

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