Marinas – Private Asset or Public Liability?

A paper prepared by Michael Taplin on behalf of Sandspit SOS inc. and presented to Auckland Council Environment and Sustainability Forum 19 July 2011.

It depends on where they are. Put them in the wrong place and they are definitely a liability, and it seems the reasons are far from obvious because it keeps happening. Why should this be so? Why do we fail to learn from experience?

The wrong place

When a marina is located in a silting estuary, in shallow water or in an excavation of sand and mud banks exposed at low tide, and fed by rivers or streams with heavy silt loads, the estimates of silting rates are frequently wrong, by orders of magnitude.

When the estuary environment is highly mobile due to fast tidal streams and large areas, the movement of sandbanks over time is visible.

Physical modeling is the only reliable way to predict silting rates but because this is prohibitively expensive it is replaced by computer modeling. For small projects even this is neglected in favour of cheap expert opinion that extrapolates modeling from other projects.

This leads to marinas being sited in sheltered estuaries to satisfy consumer demand, and in many cases these flawed decisions lead to heavy liabilities for berth holders and communities when the financial backers are unable to pay for maintenance dredging and disposal of sludge.

The liability

The liability arises from this sequence of arguments put forward by developers and their paid experts to gain a resource consent.

  • Low siltation rates are predicted, based on experience from other places, rather than local collected data.
  • Low maintenance dredging frequency predictions are made.
  • Disposal costs are based on assumptions about access to disposal sites.
  • Costs are seriously underestimated.
  • Resource consent hearings are prejudiced by a lack of hard data from any of the parties, and reliance on opinions.
  • Marinas are constructed in the wrong place.

The extent of the liability can be very large, and the financial viability of the backers is threatened by insolvency.

The risk of terminal insolvency being transferred to the public, with ratepayers as the funders of last resort rises over time.

Four Case Studies

This paper examines four examples of marinas that are in varying degrees of financial difficulty in 2011 in the Auckland Region.

Milford Marina

Westpark Marina

Pine Harbour Marina

Whangamata Marina

In each case we have examined the public record, the history, the financial status (limited by lack of reported data), the accumulated evidence of need for increasing dredged volumes, increasing costs of operation and the attempts to transfer the liability to the public.

Milford Marina

Financial situation

In 2009 Milford Mariners Inc. reported a net loss of $65,871 after it transferred $306,053 from its Dredging Reserves exhausting this source of funds. At 28 Feb 2009 the society was technically insolvent with net assets of (-$8,905).

It reported a contingent liability for uncompleted dredging of 1,000 m3 estimated to cost $92,000.

Location

Milford Marina is located at the mouth of the Wairau Creek that drains a large catchment of built up residential and industrial land on the North Shore.

It is shallow and clearly subject to heavy silt loads despite the urban catchment.

This photo from Milford Mariners website show the hydraulic spillway at low tide.

The entrance at low tide

5 Year Dredging cost estimates

Cost of dredging $93 m3

Channels 5,500 m3 $511,500

220 berths 10,000 m3 $930,000

Channel mud-banks (2.5 Years)        $186,000

Total dredging cost every 5 years      $1,627,500

Or annual provision required              $325,500 pa.

Source: Milford Mariners Inc Annual Accounts and AGM records, 2009

Westpark Marina

Westpark Marina provides berths for 592 vessels licenses and freeholds are held by Auckland Council (formerly Waitakere Council). The current owner of Westpark Marina Ltd is an investment group, Honk Ltd.

This marina has operated since 1985 and has a long history of heavy siltation, probably due to its location at the mouth of Henderson Creek and near the head of the Waitemata estuary. Honk group have invested in barge mounted dredging equipment and offer dredging facilities to other marinas.

It also appears to have a troubled financial history with various operators unable to control costs to the satisfaction of berth holders over the years.

The financial liability associated with silt removal is subject to dispute between the council and Westpark Marina Association Trust according to this calculation taken from the Oct 2008 WMAT Newsletter.

It seems difficult to reach agreement on silting rates, even when the marina is completed and silt build up rates can be measured. On thing is certain, it becomes more and more expensive.

Current Berth Prices

12m     $9,000 (1)

16m     $24,000 avge.

The financial burden of silt removal for berth owners is significant and may contribute to the low berth prices.

Dredging problems

Dredging is Restoring Water Depth

Mud has been gradually building up within the marina area as a result of siltation from tidal action, effectively lowering the depth of water available, and, restricting movement of boats within the marina, especially at low tide.

The main issue which delayed dredging was the difficulty and cost of obtaining resource consents to dispose of dredging well out in the Hauraki Gulf, for environmental reasons. This has now been obtained and dredging to restore the original water depths over the marina area is now underway.

A second issue has been the lack of suitable barges and dredging equipment to dredge this material from the marina. The marina company elected to purchase two dredges, fixed to floating barges, from overseas ports. These 47m long barges are an important piece of infrastructure for marinas in the Auckland harbour. They can dump 360m3 of material and are self powered so they don’t need to be towed. In fact the marina company have found that there is significant interest from marina’s across Auckland from parties interested in leasing this equipment.

Dredging at Westgate Marina

By the end of 2007 about 50,000m3 cubic metres of sediment will have been dredged since the programme began last year.

Maintenance dredging will continue at a lower volume every year to continue to maintain serviceable levels, and to restore original depth over time.

Source:  http://www.waitakere.govt.nz/abtcit/cp/wstprk-marina.asp

Note that spoil is dumped in the Hauraki Gulf; this practice is now strongly challenged. Refer to Pine Harbour Case study.

Westpark Marina is now a ferry terminal

This increases the chance that it will become a charge on the public purse.

Pine Harbour

 

Located at Beachlands, this marina has a chequered financial history and is now the subject of a proposal for high-rise development.

Despite the confident predictions of experts, that dredging would only be needed at 20 year intervals, when they sought planning permission over 25 years ago, maintenance dredging started shortly after opening.

In fact controversy erupted over the dumping of 147,000 m3 of spoil, mainly from Pine Harbour, at Browns Island in 1987. Illegal dumping was the norm for some years.

Source: Google Maps

Dredging and spoil disposal history

The dredging and dumping continued in various inshore locations in the shallow Howick/Whitford bay for over 20 years.

In 1990 dredging and dumping started without consent. In 1993 they applied for a consent to dump 4,500m3 pa. Further applications occurred in 1997 and 1999 as successive changes in dumping technique failed.

Resource Consent Woes

In 2010 a Resource Consent application to continue dumping spoil in a local bay was rejected by ARC and is now the subject of an Environment Court Appeal.

It is clear from the list of reports held by ARC that the expenses incurred by all parties to this sorry saga have been a cost burden to ratepayers for many years, and the community and environmental interests have not been protected.

Mike Lee’s evidence provides the historical fact base..

Source: Evidence of Mike Lee at Pine Harbour Resource Consent application hearing 15 Apr 2010.

Current Berth Prices

12m     $35,950 avge

16m     $122,000 (1)

Toxin build-up in sediments

Pine Harbour was not a toxic environment 25 years ago.  The sludge dredged from the marina basin and channel now contains levels of toxins sufficient to require investigation of disposal to a sealed and managed landfill site, which is even more expensive.

How has this come about? A glance at the management systems and protocols now under consideration provides a few clues. Few of these requirements exist in the older consent conditions.

  • Comprehensive management of all storm-water and wash-down water, hard stand and car park drainage (directed to a storage tank and filtered before release to the receiving waters.
  • Testing of drainage water before and after filtration for toxins, as well as testing of filtered sludge.
  • Records of all boats in marina, haulout and launching records to include size of vessel, type of antifouling etc.

It is predicted that the Pine Harbour conditions of operation will become the gold standard that all marinas will have to comply with in due course. This will require expensive retrofitting and upgrading of existing marinas wastewater management systems if Auckland and other councils wish to gain control over this source of environmental degradation.

Whangamata Marina

Following the controversial granting of the Resource Consent by the Acting Minister for Conservation in 2008,  Whangamata Marina has become the latest problem.

Within months of opening, maintenance dredging of the channel commenced, and continues at regular intervals.

Transfer of the cost burden to the council and ratepayers

The council collects parking fees from permits issued to trailer boat launchers.  The marina operators are applying pressure on the council to increase the charges and apply the funds to subsidise the cost of channel dredging. They argue that they provide a service to boaties by keeping the channel open for them.

Prior to construction there appeared to be little or no need for channel dredging.

Current Berth Prices

12m     $90,000

15m     $125,500 avge.

Statistics

Construction Dredged volume 162,000 m3, 775 m3/berth, disposal –on site 106,000 m3, offsite 53,000 m3

Construction cost/berth $86,124

Source: http://www.whangamarina.co.nz/home.html on 4 Jul 2011

Dredging methodology/frequency

The methodology employed on 5th February 2010 was as follows. A barge with a long arm excavator digs out the channel placing the sediment on the barge. The barge then moves to the boat ramp (using the digger arm) and dumps the dredged material into the water on the inter-tidal flats. When the tide goes out another digger comes and scoops together the dispersed sediment and re-piles it further up the boat-ramp. This all happens below mean high springs in the coastal marine area.

Source:           http://whangamatacampingassociation.blogspot.com/ on 4 Jul 2011

Conclusion

This paper has canvassed some of the accumulating evidence that marinas located in silting estuaries become a liability for coastal communities, the local government bodies responsible for administration of the coastal environment, and ultimately for the rate and taxpayers.

This liability arises from the accumulating and unpredicted cost of maintenance dredging. The economic effects are to raise costs of operation and increase user charges, leading to reduction in the market prices for berths and calls from users for local government to assume responsibility for the costs.

Additional burdens to be taken into account that fall on the ratepayer (as the funder of last resort) are the administrative and management costs generated by continuing Resource Consents and Environment Court processes over lengthy periods.  The failure of the “system” to give appropriate weight to plans, policies and governing legislation has other unintended consequences. In particular The Hauraki Gulf Marine Parks Act and The New Zealand Coastal Policy Statement are relevant.

This paper has not addressed the other costs of environmental degradation that are also met by future generations.

In summary this comes about because experts on coastal processes have consistently underestimated accumulation rates and mobility of siltation in estuarine environments.  Marina developers take their profits and move on to the next estuary. The users carry the burden and when it becomes unsupportable, put pressure on  local councils to assume the liability.

It seems to take a generation for the adverse consequences to become unsupportable. The community is entitled to better decision making from those in power to balance short term economic profits for the few against the long term liability to our society.

Postscript Note:        Westhaven Marina

Westhaven Marina Is owned by Auckland Council, and is regarded by many as the “jewel in the crown” of Auckland. The management contract is expected to be open for tender. Users are concerned about the prospect of increased charges.

2005 Dredging budget $227,500. (source: Westhaven Marina Users Association Inc. Annual Report 2005. http://www.westhavenmarinausers.org.nz/ )

Current Berth prices

12m     $38,700 avge.

14m     $67,000

**************

 

 

 

 

No Comments

No comments yet.

RSS feed for comments on this post.

Leave a comment