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Iii. Dredged Material Management FINAL REPORT ON COSTS, BENEFITS, AND MANAGEMENT ISSUES RELATED TO MAI NTAI NI NG NORTH CAROLI NA S SHALLOW DRAFT NAVIGATION CHANNELS EXECUTIVE SUMMARY This report presents the findings of a study examining the costs, benefits, and management issues related to maintaining North Carolina s shallow draft channels. It examines the historical dredging of these waterways, the use and management of the dredged materials, and the economic impacts and safety related concerns of the State s shallow draft waterways. The necessary equipment, regulatory costs, contracting alternatives, and potential methods for financing the ongoing maintenance of the channels are examined. While the duty and cost of maintaining the shallow draft waterways has traditionally been undertaken by the United States Army Corps of Engineers (USACE) as part of the maintenance of federal channels, it is becoming apparent that the funding for such efforts is declining. The current administration has proposed to eliminate this responsibility from the federal budget. Upcoming budgets will provide some valuable information on whether Congress wants to reverse the administration s direction as well as whether the administration is sticking to this decision to eliminate funding for shallow draft navigation channels. With the decrease or elimination of federal funding, the State of North Carolina is faced with examining alternatives to keep the shallow draft waterways open. The first step in this process was to assess the current level of dredging being performed on these waterways. More than 100 million cubic yards and over 800 dredging projects have been conducted to maintain North Carolina s shallow draft inlets and channels over the last 30 years, an average of 3.4 million cubic yards annually. This equates to an average annual cost of almost $15 million. Peak years in FY1985 and FY1986 had dredging of more than 5 million cubic yards for the shallow draft waterways each year at a cost of more than $25 million annually (today s dollars). It is apparent that there is a potential backlog along the AIWW that will likely require attention in the near future. A variety of dredge types have been used to accomplish this work. Sidecaster dredges have provided most of the inlet clearing and pipeline dredges have performed the bulk of the inland channel dredging. The type of dredging performed and environmental concerns influence the placement of material dredged. Currently, most inlet dredged material is placed into open water along the channel, some in upland disposal locations and some used for beach nourishment. Material dredged from the AIWW and inland waterways is generally placed in upland sites or used for beach nourishment. Additional work needs to be performed on the remaining capacity of existing placement sites and the permitting of increased beneficial use opportunities. The intrinsic value of maintaining the shallow draft navigation channels of North Carolina is clear from talking to any coastal resident or visitor. The coastal shallow draft inlets and intracoastal waterways form a key part of the State s coastal heritage and economic potential, especially from fishing and tourism. Ascertaining the precise economic impact provided by a resource such as a waterway is difficult. Traditional approaches examining freight tonnages and valuations passing through a waterway do not capture many of the benefits provided by shallow draft channels. Despite the difficulties in gathering economic data directly i FINAL REPORT ON COSTS, BENEFITS, AND MANAGEMENT ISSUES RELATED TO MAI NTAI NI NG NORTH CAROLI NA S SHALLOW DRAFT NAVIGATION CHANNELS attributable to the shallow draft waterways, it is clear that if even a small percentage of the boating related sales, coastal tourism, fishing industry, and waterborne commerce are attributed to the existence of the shallow draft waterways and inlets, the annual benefit delivered to the citizens of North Carolina is substantial, in the hundreds of millions of dollars annually. The lack of maintenance of shallow draft channels and inlets represents a significant safety risk both for boaters due to increased groundings and associated hazards and to search and rescue operations using the waterways. Increased shoaling can also result in being forced to select longer rescue routes and more open ocean travel due to fewer safe access inlets. There are several options outlined that have been used to finance dredging of navigable waterways in other coastal states. Specific boat use related taxes and waterway user fees, property taxes in counties benefited by the waterways and fuel taxes could be used to provide funding for ongoing maintenance. Several states supplement the USACE s budget with these funds rather than providing full funding of the required dredging program. The unique and varied requirements of dredges capable of operating in exposed coastal inlets, in shallow drafts, and the desire to place the material in beneficial ways on the beach require diverse equipment. Much of this equipment is so specialized that private industry does not currently have all of the dredge types required. Many of the sheltered waterways can be dredged by commercial pipeline dredges and the deeper inlets, such as Oregon Inlet, by commercial hopper dredges. The shallow exposed inlets, however, require the specialized equipment of sidecaster and special purpose dredges that only the USACE currently maintains. The Corps specialized dragheads and disposal methods also allow this fleet to be exempted from turtle and bird environmental windows providing nearly year-round use. Environmental windows to protect birds, turtles and fisheries restrict the times of year that in- water operations such as dredging may occur as well as when upland or beach placement is allowed. The USACE currently has the required environmental permits to dredge the authorized federal shallow draft channels in North Carolina. If the State or contractors working for the State were to perform dredging in the same locations, a new set of environmental permits would be required. This could result in considerable costs in time and money. It would appear the most prudent option, given the uncertainty in the ongoing federal funding of the maintenance of the shallow draft channels within the State, would be to supplement the efforts of the USACE. This could be accomplished by entering into an agreement with the Wilmington District to supplement its budget. In addition, the State may chose to purchase a dredge to perform some of the work or contract some directly to private industry. The main obstacles to approaches other than contracting with the USACE are the regulatory issues, capital investment, and long-term commitments required to allow private industry to acquire the specialized equipment required. ii FINAL REPORT ON COSTS, BENEFITS, AND MANAGEMENT ISSUES RELATED TO MAI NTAI NI NG NORTH CAROLI NA S SHALLOW DRAFT NAVIGATION CHANNELS SUMMARY OF FINDINGS The key findings with regard to the costs, benefits, and management issues related to maintaining North Carolina s shallow draft navigation channels are: Over the last 30 years, over 800 dredging projects and 100 million cubic yards of material have been dredged to maintain the shallow draft waterways. Recent annual costs have been almost $15 million to dredge an average of 3.4 million cubic yards. Peak years have reached over 5 million cubic yards at a cost of $25 million (today s dollars). Most shallow draft dredging projects have a depth of 6 to 14 feet. Recent dredging has concentrated on key coastal inlets and the associated channels while the AIWW has developed a significant backlog. Dredged material from inlets is typically placed in open water in close proximity to the channel. The AIWW, its inlet crossings, and inland waterways are generally dredged by pipeline with upland or beach placement. The shallow draft navigation channels provide a significant impact on the State s economy. The shallow draft waterways primary economic impacts are on recreational boating, commercial fishing, tourism and marine trades. Despite the lack of currently available economic data specifically linked to shallow draft waterways, the economic impact can be shown to be in the hundreds of millions of dollars annually. The people of North Carolina consider these shallow draft channels a part of their way of life and heritage. Poor maintenance represents a safety hazard to vessels using the inlets and waterways and impacts travel along the AIWW. Numerous options exist, in the absence of federal funding, to finance the maintenance of shallow draft waterways. Other jurisdictions have successfully implemented approaches including property taxes, sales taxes, fuel taxes, licensing fees and user fees. iii FINAL REPORT ON COSTS, BENEFITS, AND MANAGEMENT ISSUES RELATED TO MAI NTAI NI NG NORTH CAROLI NA S SHALLOW DRAFT NAVIGATION CHANNELS The shallow draft inlets and channels of North Carolina present unique technical challenges to dredging that have resulting in the Wilmington District of the USACE maintaining a fleet of dredges not currently available from private contractors. These dredges, specially suited to operate in shallow exposed coastal inlets, include two sidecasters and one special purpose (small split hull hopper) dredge. The use of special dragheads and the open water disposal allow these dredges to be exempted from turtle and bird environmental windows and operate nearly year round. The USACE has existing environmental permits to dredge the federally
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