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A publication of the Upper Mississippi Waterway Association.
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August 2018 
Keen and Olmsted to be dedicated 

     In an appropriate metaphor for the entire process, the ribbon cutting and dedication ceremony at Olmsted Locks and Dam on the Ohio River has been delayed one day to resolve a scheduling conflict.
     On August 30, Assistant Secretary of the Army for Civil Works, R.D. James will deliver the keynote address and oversee dedication of the Wicket Lifter Keen and the first commercial tow lockage at the structure.

A fiscal black hole
     To UMWA members, the word “Olmsted” for years meant a fiscal black hole whose cost overruns delayed or denied other needed projects.
     First authorized and funded in 1988, Olmsted replaces 90-year-old Locks and Dams 52 and 53.  Located 17 miles upstream from the Ohio’s confluence with the Mississippi and just below the junction with the Tennessee River, Olmsted will pass more than 90 million tons of cargoes each year.

Navigable pass dam
     The new locks and dam were constructed using an “In-the-wet” process in which pre-cast structural elements were moved onto the river and placed without using a cofferdam.
     When river conditions allow, wickets will be lowered and traffic will move through the “navigable pass” area of the dam without locking. Wickets will be raised to maintain a navigable pool when necessary, but even then lockage times will be greatly reduced by two 1200 foot chambers.

Efficient funding saved $
     The Corps also says the modified funding formula passed by Congress in 2013 and the industry’s voluntary fuel tax increase has meant “efficient funding benefits” of $312 million saved since implementation.
     Vice Media on HBO recently toured the almost completed structure and filed a video report and another YouTube video provides a pilot's eye view a pass through the chambers.
 
(Above)  This COE aerial view shows the navigable pass area of the locks and dam, the two 1200-foot chambers and the construction village near the site.
 
From the Executive Director . . .
 

Older news is still good news
     At the March 1, 2018 meeting of the Inland Waterways Users Board, Board Chairman Martin T. Hettel of American Commercial Barge Lines, LLC commented on the President’s FY 2019 budget.   While standing on the banks of the Ohio River last year, said Hettel, we heard the President state how our country needs to bring our inland waterways system into the 21st century.  Then he referenced rebuilding our inland river infrastructure in his State of the Union Address. 
 
     Unfortunately, said Hettel, the President’s comments on both of these occasions are not reflected in the Administration’s infrastructure plan, or in the Present’s FY 2019 Budget request.  First, he said, if the Administration’s infrastructure plan were go into effect, it would expand the authority to non-federal construction and operation of the inland waterways projects.  This would authorize the Secretary of the Army to execute agreements with public-private entities to use the Inland Waterways Trust Fund (IWTF) and matching General Treasury funds for construction, rehabilitation, O&M, operating agreements and concessions. 
 
     “Concessions”, suggested Hettel offers a franchise to the private side of a public private partnership, basically removing inland waterways from the government’s responsibility and establishing it as a non-federal responsibility, which could very well add additional costs, lockage fees et cetera, in order for the non-federal entity to cover its project investment costs [and profits].
 
     If the infrastructure plan were enacted, Hettel continued, it would authorize user fee collection and retention under Section 5014 Pilot Program of WRRDA 2014 that would expand the U.S. Army Corps of Engineers’ authority to engage in long-term contracts for upwards of 50 years. This would enable the public private partnerships to obtain long-term concessions that would enable public private partnerships to operate, maintain, and construct projects on the inland waterways for up to a 50-year timeframe.
 
User fee would collect $1.78 billion
     Moving on, Hettel stated that within the President’s FY 2019 Budget request are parameters that would initiate an annual user fee on vessels transporting commercial cargo on the inland waterways that would collect $1.78 billion over ten years.  That is $178 million annually in additional cost to shippers and is on top of the fuel tax fund to which we currently contribute and which we voluntarily raised by 45 percent in the waning months of 2014. Our deposits now average $112 million into the IWTF
 
User Board:  We don’t accept President’s plan
     If enacted, Hettel explained that the President’s Budget request would maintain an annual balance in Inland Waterways Trust Fund of between $50 million and $150 million, whereas the current minimum balance maintained in the Trust Fund is $20 million.  In addition, he said, if the President’s Budget request were to be followed, it would dip into the Inland Waterways Trust Fund to pay for 10 percent of the O&M of inland waterways, while capital investments would be split 50/50 between the General Treasury and the IWTF. 

     Needless to say, both the Administration’s infrastructure plan and the FY 2019 Budget request are proposals that the Inland Waterways Users cannot accept.  The Board will formally present our objections in the Board’s report to Congress on the recommendations to the FY 2019 Budget request, which is due at least 60 days from release of the budget which is April 13th Hettel concluded.
 
Diesel fuel tax would be over $2 a gallon
     Mr. Daniel P. Mecklenborg of Ingram Barge Company added that he wanted to emphasize the point implicit in the President’s infrastructure proposal relative to the O&M charges that are currently 100 percent borne by the federal government. To shift these into the IWTF and render them essentially 100 percent paid for by the Trust Fund would require an increase in the diesel fuel tax by sevenfold, to over $2 a gallon to sustain that level of spending.
 
Changes based upon false premises
     Mr. William M. Woodruff of Kirby Corp. added that one of the rationales I have seen offered -- and this is nothing new: You can go back to the early 1980s and see some reports from various government economists. They always start with the comment that if benefits of an investment are diffused across the economy, that investment is appropriate for the U.S. Treasury to make.  But where there is but a single beneficiary of an investment, that investment should be properly paid for by a user fee assessed against that beneficiary.
 
     They take that general statement and the next statement goes something like this: Because the only beneficiaries of the inland waterways system are the barge operators, the barge operators should pay 100 percent of the cost. That is a false statement. The premise of the philosophy of “Let’s just transfer the cost to the barge industry” is based on a misplaced and bogus foundation.
 
A host of beneficiaries
     The reality is and there have been several research projects that have demonstrated that there are a host of beneficiaries to our system. There are water supply beneficiaries, both industrial and municipal. There are, in some projects, flood control benefits. And for a number of projects, there are hydropower benefits which, as I understand it, if you isolate the hydropower projects on inland navigation dams alone, provide $2 billion in annual revenue to the U.S. Treasury. There are a lot of benefits that the nation derives from having a system of inland waterways that go beyond commercial navigation. I have not even touched upon recreational users or property value benefits from the impounded waters.
 
     I think that probably the suggestions that have come out in the infrastructure plan and in the budget will not become the law of the land. The reason for that is my estimation that the premises upon that suggest significant changes to national policy are based are poor premises.  That is something that I encourage the Board to emphasize as we go forward.
 
What UMWA thinks
     Given the national economic damage and disruptions that would be caused by the President’s infrastructure plan and his FY 2019 Budget request as discussed by the Inland Waterways Users Board, we certainly agree with their negatively cautious approach to this most serious of issues facing our nation and our industry.
 
Disclaimer:  Thoughts and opinions expressed in this column are those of its author and not necessarily those of the Upper Mississippi Waterway Association or its members.
 
Other Items of Interest...

*  With the 30-year Olmsted locks and dam project’s end in sight, leaders in Olmsted, Ill., have started contemplating life after all the workers leave.  Mayor Curtis Marshall says the city will feel the impact in many small and large ways. Marshall told a WPSD TV reporter, “We (were) thinking it would last 10 years, but it went way over that. Once they leave, the restaurant will take a hit, the water system will take a hit, we're going to lose quite a bit of revenue.”

 *    Hard to believe the new St. Croix bridge is already a year old. MNDOT recently marked the anniversary with a retrospective blog post.

 *    The nonprofit group, William A. Thompson Dredge Museum, has purchased the Centennial Showboat and is moving it from St. Paul to Winona, Minn., where it will be part of an entertainment venue that will include an open deck and patio on top of an old railroad bridge and the refurbished showboat.

*     The Maritime Transportation Research and Education Center (MarTREC) continues to study ways of preserving and improving the U.S. transportation system.  Heather Nachtmann, MarTREC director says highways and trucks have limited capacity and that is creating more interest in waterborne transport. “When large amounts of freight [especially commodities] need to travel where waterway navigation exists, inland waterway transportation becomes increasingly competitive. The waterways are existing transportation infrastructure that have excess capacity and do not increase road congestion. This modal shift is something that our center seeks to motivate through additional knowledge about maritime transportation opportunities and decision support tools.”

*     What happens when somebody leaves the lock gates open on a canal?  Boaters on a portion of the Kennet and Avon Canal in Wiltshire, England, found out recently when a hurried boater forgot to replace lock paddles and left other boaters stuck in the mud. Once the paddles were put back in place, the small canal refilled.

 *    Illinois and Iowa teams faced off again this past weekend for the annual Tug Fest between LeClaire, Iowa and Port Byron, Illinois. For three hours on Saturday afternoon, navigation stopped and a 2,700 foot rope was stretched across the river.
 
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