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Pacific County Critical Marine Infrastructure 2017 Report

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Pacific County Critical Marine Infrastructure 2017 Report Pacific County Critical Marine Infrastructure 2017 Report 1. Pacific County is the fourth-most fishing intensive lo- cal economy in the nation by share of total earnings.i 2. Pacific County has nearly a 100% natural resource based economy and the total marine industry produces nearly one-fifth of a billion dollars in annual value (labor+sales). 3. Reliable harbor and channel maintenance is essential for private and public investment, benefiting businesses and the communities around them. 4. Over half of survey respondents say their operation is 80- 100% dredging dependent. All respondents are dependent on dredging for a significant portion of their business activi- ties. More than half of survey respondents anticipate busi- ness closure should channels become impassable. All but one respondent expects at least a 50% decline in business if dredging ceases. 2 5. Pacific County’s workforce, infrastructure, services, financial basis and commercial sector are directly or indirectly linked to maintenance dredging. 6. Pacific County’s major transportation infrastructure is rep- resented only by rural state/local highways and navigation channels. Other surrounding counties have critical infra- structure of: Freeways, Heavy Rail, Natural Gas, Deep Draft Ports, and the benefit of proximity to growth along Interstate 5 from Seattle to Salem. 7. Pacific County communities are dependent on the marine industry, which is dependent on functioning Ports and Port Districts, which are dependent on dredging. The commer- cial fishing industry relies on access to and from ports to land their catch, and land-based businesses in turn rely on the channels to land, process and sell seafood products. 8. Recreational users also rely on Ports within the County to access the water for recreational fishing and enjoyment, supporting the County’s tourism industry and way of life. iDale Beasley, Columbia River Crab Fishers Association, referencing report “What’s the Catch, Challenges and Opportunities of the US Fishing Community”, Kearny et al, September 2014, The Hamilton Project 1775 Massachusetts Ave., NW Washington, DC 20036 3 Background This report was prepared by the Pacific County Economic Development Council (PCEDC) on behalf of the Ports of Ilwaco, Willapa, Peninsula, and Chinook. This report examines the jobs and income that would likely be impacted should dredging mainte- nance be irregularly scheduled, delayed, or cease. The ports combine to form a marine industry powerhouse that delivers value within and well beyond Pacific County borders. These key marine industries provide nearly 18% of Pacific County’s annual GDP with a current direct labor force of 1,410i. __________________________________________________________ Pacific County Marine Industries The marine industries sector is an integral part of Pacific County’s eco- nomic engine and community wellbe- ing. To better understand this industry PCEDC evaluated the complete scope of the occupations inclusive of sectors previously not includedii. According to the 2012 Regional In- dustry Cluster Studyiii, marine indus- tries account for nearly 20% of the County’s 9000 jobs (2012 data) and an estimated direct annual payroll in excess of $41.2 million (2012 dollars). As of 2015 it was estimated that Pacific County, marine industries continue to provide nearly 20% of jobs with an impact spread across many occupations that would struggle to exist if the marine industries decline. In addition to the direct jobs, the value added in seafood transported out of county/sold out of county is significant to the state of Washington. 2016 employment data (Table, next page) indicate dredging-dependent employers are responsible for 1,077 direct jobs and create economic activity that helps support an additional 256 regional jobs. Major marine industries generate approximately $157 million (2013 dollars) in annual sales and $143 million (2013 dollars) in exports. The tax revenue from these sales helps to fund Pacific County services as well as mu- nicipal services within four incorporated areas (Long Beach, Ilwaco, Raymond, and South Bend), the operation of the rural special districts inclusive of libraries, ports, wa- ter districts, schools, sewerage, and emergency medical services. The economic value of our seafood extends well beyond Pacific County with value added by retail and hos- pitality sales through out the Pacific Northwest and particularly in the Seattle and Port- land metro areas. An example is: Pacific County receives 25% of the Dungeness Crab harvested off Washington waters from the Columbia River to Puget Soundiv with the majority of those crab landings at the Port of Ilwaco and Port of Chinook. Willapa oys- ters represent 25% of the Washington production with a (local) value of over $90 mil- lionv. 4 NAICS/Industry Description Direct (Jobs Multiplier) Average Earnings Employ- Total Supported Per Job ment Employment 114111/Finfish Fishing 77 (1.18) 91 $61.960 114112/Shellfish Fishing 254 (1.13) 287 $38,182 311710/Seafood Prep. & Pckg. 436 (1.37) 597 $36,268 336612/Boat Building 77 (1.31) 101 $78,726 Animal Prod. & Aquaculture 165 (1.11) 183 $25,520 424460/Fish and Seafood 22 (1.13) 25 $22,046 Merchant Wholesalers 445220/Fish and Seafood 29 (1.07) 31 $15,780 Markets 487210/Scenic and Sightseeing 17 (1.08) 18 $18,894 Transportation, Water 1,077 1,333 NAICS/Description 2016 Earnings 2016 Total 2016 Exported Sales Sales 114111/Finfish Fishing $10,192,712 $24,038,387 $20,346,078 114112/Shellfish Fishing $16,139,924 $39,131,421 $35,784,850 311710/Seafood Product Preparation $15,598,590 $90,583,992 $87,430,223 and Packaging 336612/Boat Building $6,488,389 $28,111,075 $27,665,980 424460/Fish and Seafood Merchant $553,663 $1,644,959 $1,456,432 Wholesalers 445220/Fish and Seafood Markets $394,937 $973,576 $892,549 487210/Scenic and Sightseeing Trans- $326,873 $853,092 $758,582 portation, Water Combined Totals $49,695,088 $185,336,501 $174,334,694 For the most part, the viability of these industries is contingent on managing viable access to the Pacific Ocean, the Columbia River, and Willapa Bay and within and around ports and harbors. Without regular dredging maintenance, most impacted busi- ness would suffer great economic damage and some would cease to exist entirely. This impact would be devastating in a County that has been slow to rebound from the Great 5 Recession. An estimated 720 workers or 7.8% of Pacific County’s workforce are cur- rently unemployedvi. Given that most business did not begin to recover from the Great Recession until 2013. It may take several more years for the local economy to fully recover from these previous job losses given the recent growth ratesvii. In the last 15 years Pacific County has lost nearly 1,200 jobs and gained back slightly over 1,000viii. Jobs associated with the marine industry (including boatbuilding) all showed gains whereas job losses occurred in sawmills, construction, and retail. Suffice it to say that Pacific County continues to be a natural resource community and clearly dependent on marine industries driven by vibrant fishing fleets. A prior economic analysis (Ed Hoveeix) completed for Pacific and Wahkiakum counties in 2006 estimated that value of economic activities supported by dredging to be roughly $167.6 million (2006 dollars) or about 22% of all economic activity in the two counties. Just over 80% of those activities were found to be directly marine industry-related. However, the losses in the marine sector spillover into other sectors as well, reducing indirect employment and local tax revenue supporting government jobs and contracting. In 2013, the Pacific County Economic Development Council polled the four Pacific County Port Districts and their major facility users to quantify the direct impacts that channel users would anticipate should regular maintenance dredging ceases. Nearly two dozen respondents, representing 860 local lobs provided feedback. Their estimate of impacts is summarized below. A matrix of complete responses is available upon request. A 2014 report by Flores and Batkerx estimated that the total output of the shellfish in- dustry was $90,416,800 with a direct labor income of $45,014,700. Labor is 800 to 1500 and likely variable due to the high seasonality that is representative of the marine industry. It is highly likely that the NAICS data sets under represent the true value of the marine industry in Pacific County. Direct Impacts Direct impacts include grounding, increased probability of collisions in narrow restricted areas and the indirect impacts of captains avoiding difficult areas and selecting other ports of call or landings. Aside from the obvious impacts there are the subtler impacts of vessel bow waves and propellers stirring up shallow channel sediments and those coarse materials affecting pumping systems and fish in live-bait wells. These effects are magnified by a steady increase of vessel size. Our coastal dredges and fishing boats are growing larger with capacities far beyond what was common 40 years ago. These fishing vessels are longer, wider, and deeper draft. Survey and Overall Impacts Over half of survey respondents say their operation is 80-100% dredging depend- ent. All respondents are dependent on dredging for a significant portion of their business activities. 6 More than half of survey respondents anticipate business closure should channels become impassable. All but one respondent expects at least a 50% decline in business if dredging ceases Almost all survey respondents rate dredging a “10” on a 1-10 scale of importance, for business needs, with 10 being most important For most major employers in the area, navigable channels represent the lifeline to future viability of their business operations Although not directly analyzed here, recreational fishing and related activities also contribute to the Pacific County economy and are dredging-dependent. More than $3.6 million in accommodation and food sales were recorded in Pacific County in 2013, along with $6.4 million in retail sales.
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