Tuesday, December 30, 2008

What WOULD the Coast Guard charge?

Yesterday, we wondered aloud about the question of whether the USCG would ever actually charge for a non-emergency response to rescue foolish, or reckless boaters. I ended that post with "I wonder what the hourly costs for running a 47' MLB are?" The question somewhat rhetorical in nature, as I figured that the answer was buried someplace deep in a CG spreadsheet.

I forgot about the new, digital age where so much information is readily available. Even better is the participating in the new age of blogging, where sometimes information comes to you.

Charlie Meyer over at TowBOAT/US Lake Ozark sent me the link to this very interesting document. It seems that the USCG has published the hourly rates they would charge for all their assets like boats, ships, aircraft and personnel. Enclosure 1 (pasted here, click on it to see a bigger version) is titled "Hourly Standard Rates for Cutters, Boats & Aircraft" - how handy is that?

So, not only did my rehtorical question get anwered, but an even better number is presented here: how much would the USCG actually charge a non-government customer (like an insurance agency) for providing service. These are hourly rates, and they include the costs of paying the "normal" crew.

According to the chart, a 47' MLB is charged out at the non government rate of $4189/hour. The sailboat that was towed in from south of Block Island on Dec 19th was towed for 7 hours. Lets say 2 hours to get on scene, plus 2 hours to get back to base from Montauk (where they towed the boat); a total of 11 hours of service. That's $46,079! We are not even close to the total yet. The official report states that the CG also launched a helicopter from Sta Cape Cod. Figure another 4 hours for a HH65A at $9855/hr = $39,420 for the aircraft. So far, I'm up to $85,499 to find and tow a sailboat about 20 miles. That doesn't include any costs for the SAR center costs.

The sailboat from the story, the MOONSHINE, was a 45' Starratt sloop. Here is one for sale in FLA asking $39,000. Why is the USCG spending $85,000 to tow a $40,000 boat? Because they don't put a price on saving lives, and the act of towing this boat was their way to get these seasick sailors home. Okay, I get that.

Suppose, however, that the CG policy was to send a bill if it turns out that the rescue operation was necessary because the boater was reckless or negligent in his duty to conduct a safe voyage? Unforeseen circumstances are one thing, but leaving a safe harbor to begin an ocean crossing when a winter Nor'easter is bearing down on New England is acting with reckless disregard for the lives of everyone involved.

If the USCG started charging for services that were deemed 'non-emergency', what would that achieve? First, it would lower the burden on taxpayers (I admit, not much, but it's the principal of the thing) and shift the costs of non-emergency rescues to the boat owners and their insurance companies, where it belongs; 2) it would punish reckless behavior with a financial dis-incentive, and; 3) it would drive more boaters to use private sector solutions like our industry. The owner of the MOONSHINE could have hired an ocean tug out of Providence RI for $10,000/day

This marks the 100th blog post for 2008. 100 is a nice round number, so I'll make this my last post of this year. See you next year!

Monday, December 29, 2008

Will the Coast Guard ever charge for service?

Two news items caught my attention this week. First was this USCG story about the search and towing of a disabled sailboat just south of Block Island last week. [the story is also covered here with a picture, and here with comments; searching Google News returns more of the same] From the USCG news page:

BOSTON - The Coast Guard rescued four people aboard a storm-ravaged sailboat Friday, about 7 miles south of Block Island, R.I. The crew of the 45-foot Moonshine left East Greenwich, R.I., Friday morning, bound for Puerto Rico, when they were caught in an offshore storm, which ripped their sails and disabled their propulsion. They activated their emergency position indicating radio beacon (EPIRB)....
Gosh, where do I begin? One common thread through all the eight separate news reports I've seen is that this boat was "caught in a storm," or even "caught in an offshore storm". That is total bull, as the Nor'easter that slammed New England on December 19th was well predicted; no competent sailor would have been caught by surprise by that storm, nor was it somehow offshore. It dumped snow all over Massachusetts and New Hampshire.

Every account of this rescue says the boat left their marina on Friday morning. At 0607 that morning, the NWS issued this weather forecast for the area:

607 AM EST FRI DEC 19 2008

607 AM EST FRI DEC 19 2008



607 AM EST FRI DEC 19 2008


These weather forecasts alone are enough to establish that these sailors were not caught in a storm - they began their voyage in only one of two ways. Either they departed despite the forecast, or they never listened to the weather at all. It's hard for me to argue which of those two options is the more despicable. In any case, due to a raging blizzard and gale winds, the USCG performed admirably and towed these fools from the deep-doo back to safe harbor (atta-boys to the crew at PJ and he helo pilot, you know who you are!). Meanwhile, the family of the of the sailboat's captain claim that the MAYDAY was merely a result of a seasick crew [see end of this story] and there was nothing wrong with the boat. Photos of the boat after the tow shows what looks like a nicely flaked mainsail wrapped over the boom, indicate to me that the vessel was probably capable of making way on her own power despite the shredded jibs.

Bonus question: did the Coast Guard really tow that boat for 7 hours with the foresails hoisted like that, just flapping in the breeze?

Now, on to the second story, which is this article in the NYT : Those Lost in Wilderness May Find Bill for a Rescue.
In response to the multitude of hikers, cross-country skiers and others who venture unprepared into the wilderness, become lost and have to call for help, the State of New Hampshire is billing people for rescues stemming from their own negligence, like not taking a map on a hike, wandering away from a group or going out in dangerous conditions....
Since 1999, 20 groups or people have been rescued and charged, and the state — which collects only what it costs in equipment and personnel for a rescue — has recouped $47,000. Officials said only two people who were rescued have not paid. Those billed who do not pay could face civil charges.
I find it interesting that many of the private comments left by readers of the sailor saga mention that they should be charged for the Coast Guard's response. Count me in for that idea! Can someone please explain the difference between a mapless hiker and a clueless sailor? Who can argue that the master of the MOONSHINE hasn't acted recklessly, even negligently? Why should this guy get a free pass, yet a hiker with no map gets charged?

The irony here is that most hikers don't have any ready access to an insurance policy that would cover the costs of rescue and probably end up paying the bill out of their own pockets -- unlike most boaters, who actually have at least one, if not TWO (counting hull insurance and membership towing) sources of funds to help offset the costs of getting help. So if the Coasties started to charge for situations like the one above, the boater could probably send the bill to his insurance company.

I wonder what the hourly costs of running a 47' MLB are?

Wednesday, December 24, 2008

Area Maritime Security Committees

Found this item in today's Federal Register:

This notice requests individuals interested in serving on an Area Maritime Security Committee in any Captain of the Port Zone, nationwide, to submit their applications for membership to their local Captain of the Port. These committees advise the Secretary of DHS, through the Coast Guard, on matters relating to maritime security in their geographic area. The AMSCs shall assist the Captain of the Port in the development, review, update, and exercising of the Area Maritime Security (AMS) Plan for their area of responsibility. Such matters may include, but are not limited to: Identifying critical port infrastructure and operations; identifying risks (threats, vulnerabilities, and consequences); determining mitigation strategies and implementation methods; developing strategies to facilitate the recovery of the marine transportation system after a transportation security incident; developing and describing the process to continually evaluate overall port security by considering consequences and vulnerabilities, how they may change over time, and what additional mitigation strategies can be applied; and providing advice to, and assisting the COTP in developing and maintaining the AMS Plan.

Joining the local AMSC could lead to local security opportunities for your company. Even if your not interested in that aspect, being on the committee would provide a great way to meet and network with your Sector's senior staff on a regular basis. Instructions for applying are found on the second page of this PDF.

Sunday, December 21, 2008

Sunk Costs - by David Axe

Here a rather lengthy but well reasoned summary of the overall state of the USCG, and particularly the Deepwater Program: click here for Sunk Costs - David Axe (one quick quote)

The ultimate result of Deepwater’s travails is that a well-respected agency—the only one, in fact, to perform admirably during Hurricane Katrina—is now finding it increasingly difficult to carry out its core mission. Even before Deepwater sprung leaks, the Coast Guard was struggling to be both an overseas counterterror force and a domestic safety and law enforcement agency.
This is a pretty long article, but definitely worth the time.

Thursday, December 18, 2008

Harbor Patrol funding in new economy

A recent item in The Log Newspaper (So. Calif's major marine news source) caught my attention. It's a story about officials of Orange County thinking that it may be time for some local cities to ante up tax money to cover the costs of operating harbor patrols. The news of budget cuts by the county supervisors scared the hell out of the Sheriff's department:

Shocked representatives from the Orange County Sheriff’s Department voiced their opposition to the county’s plan to abandon harbor patrol funding, emphasizing that move could interfere with the department’s ability to secure federal grants to ensure homeland security in the county’s harbors.

Read that part again: the sheriff department is worried that a lack of county funding will mean the loss of federal funding from DHS. OH NO! we can't have that. How telling that nothing is mentioned about actually helping boaters, or saving lives, or enforcing boating laws. Nah, it's just about justifying the funding.

Lest you think I have just cherry picked one quote to overstate my point, I urge you to read the entire story.

In fact this issue isn't new. Here is an LA Times story from back in 2006 about the very same issue. The difference now is that the all the local funding agencies (state, counties, cites) are out of money, having bet their future budgets on increasing tax revenues which have now disappeared. The one agency that may still have some funds is the DHS, which explains the OC Sheriff's quote.

Note to East Coast readers: In California, Sheriff Departments are funded and operated by counties. Many of the largest harbors in SoCal are patrolled by Sheriff Departments, even though the actual harbor is owned by a city...

You see, if the OC Sheriff isn't actually patrolling those harbors, then they don't qualify for harbor security funds. The DHS doesn't care a rat's patoohty about drowning surfers and boaters with dead batteries. Oh no, they give grants for side arms and .50 CAL tripod mounts and night vision equipment.

The county tax collectors (supervisors) are out of money, and can't continue their traditional subsidizing the city harbors that are within their boundaries, so they're attempting to force the cities to pay their fair share by either sub-contracting with the county for harbor patrol service, or face the costs of creating a city owned/funded harbor department.

BUT, if either of those things happen, then the county will loose the opportunity to apply for DHS funds. Obviously, if a city starts their own harbor department, then they are the agency that would apply for DHS security funds. But even if the city like Newport Beach sub-contracts to Orange County for harbor service, wouldn't it be the city who would is the overriding authority, meaning the DHS grants go through the city coffers first?

The OC Sheriff seems to imply that if they don't get DHS money, no one will, thus leaving the harbor unprotected. What nonsense. I don't for a second think that the DHS will stop the flow of harbor security money out to whatever agencies are responsible for patrolling each harbor. The money will just go to a city, or the state, or whoever is the authority in that locale. But, gee, the OC Sheriff may not get that new armored personnel carrier now...

I've been harping on this funding issue for years, asserting that the way to reduce the competition from the MUNIs and LEOs is to attack their funding sources, rather than trying to convince them to change their operational policies. Now, it seems, may be the perfect time to remind the politicians (not the sheriffs) that a private industry remains ready to help distressed boaters, and that a few less county boats and patrol personnel does not necessarily lead to more boater tragedies.

Thursday, December 4, 2008

Good New Bad News, I guess

Crude near four-year low on demand concerns

Oil prices will stand at $43 on average in the first quarter of 2009 and $45 in the second quarter, the Merrill analysts wrote in a recent report. They also expected an average price of $56 a barrel in the second half of 2009.

The good news is that next summer's fuel dock prices are expected to be a lot lower than they were in 2008.

The bad news is that oil's dramatic drop in the past six months is a sign of the falling world economy. The sky is falling!

Caveat Emptor: the analysts quoted are from Merrill. Aren't these the geniuses who bought and sold a trillion dollars of credit default swaps?