OFFICE OF THE CITY COUNCIL

 

CHERYL L. BROWN                                                                                                                     117 WEST DUVAL STREET, SUITE 425

            DIRECTOR                                                                                                                                                                                                 4TH FLOOR, CITY HALL

   OFFICE (904) 630-1452                                                                                                                                                                                  JACKSONVILLE, FLORIDA  32202

     FAX (904) 630-2906                                                                                                                                                                                                              

  E-MAIL: CLBROWN@coj.net

 

CITY COUNCIL PORT DEEPENING WORKSHOP MINUTES


June 10, 2014

10:00 a.m.

 

Location:  City Council Chamber, City Hall – St. James Building; 117 West Duval Street,

    

In attendance: Council Members Gulliford (President), Greg Anderson, Bill Bishop, Lori Boyer, Ray Holt, Stephen Joost, Jim Love, Don Redman, Matt Schellenberg, Clay Yarborough

 

Also: Dr. David Jaffe – UNF; Dr. Kevin Bodge; Dr. Quinton White – Jacksonville University; Brian Taylor and Eric Green – Jaxport; Margo Klosterman – Mayor’s Office; James Richardson – Regulatory Compliance Department; Carol Owens and Philip Zamarron – Legislative Services Division; Stan Johnson – ECA; Ron Littlepage – Florida Times Union; Jim Gilmore, Kerri Stewart

 

Meeting Convened:  10:08 a.m.

 

President Gulliford convened the meeting and the attendees introduced themselves for the record. Mr. Gulliford explained that the workshop is intended as an educational opportunity for council members and an opportunity to ask questions and become informed on the issues surrounding the port deepening proposal.

 

Dr. David Jaffe, professor of sociology at UNF, said that he has been doing research on Jaxport’s impact on the local economy since 2008 and is involved with an organization that has coalesced to examine Jaxport’s economic impact claims for the harbor deepening project. He explained his methodology for analyzing the assumptions underlying the economic impact analysis and cost/benefit claims that have been made in favor of the dredging project. He believes that there will not be a surge of increased cargo flowing from Asia to the U.S. East Coast after the opening of the widened Panama Canal, but relatively the same amount of cargo moving on fewer but larger ships. Also research shows that the land bridge route (by water from Asia to the U.S. West Coast, then by train and truck to the rest of the country) will continue to be quicker and probably less expensive than the all-water route through the Panama Canal. He posited that the benefits of competition among ports accrue primarily to the shipping companies and the companies that use them, not to the cities that fund the cost of the improvements.

 

Dr. Jaffe explained the difference between direct and indirect jobs in the context of economic impact studies and noted that they tend to overstate impacts and job creation. He stated that Martin and Associates, which produced the impact study for Jaxport, specializes in this field of analysis and may tend to overstate the case in favor of port improvements. The public has not yet been given access to the assumptions underlying the Martin and Associates model and the various data inputs used, so the accuracy of the model cannot be independently verified and therefore it should not be relied on as the primary justification for the project. Dr. Jaffe stated that a majority of the direct jobs related to the port are in the fields of ship loaders/unloaders, truck drivers and warehouse/shipping, most of which are fairly low paid and many of which are piece-work jobs rather than full-time salaried jobs with benefits. He questioned why no multi-port analysis was done to compare Jacksonville’s future cargo potential with other competitor ports on the east coast.

 

Dr. Jaffe noted that cargo ships are getting continually larger and that both water depth and overhead clearance need to be increased. Jacksonville may well be constrained by the height of the Dames Point Bridge as much as by the depth of the channel. He cited a study questioning whether all ports need to be deepened to 50 feet and suggested that it may make more economic sense for the U.S. government and the states to invest resources in just a few 50 foot ports on the East Coast (New York/New Jersey, Hampton Roads VA, and Miami) and let the other ports remain at shallower depths and handling smaller ships, which is still a very viable market segment. He said that Jacksonville’s port has many advantages and could remain a vibrant economic engine handling the kinds of cargo that make sense at the current depth. He stated that the United States has chosen a path of exporting its manufacturing sector and subsidizing the transportation and logistics sectors with public funds for the benefit of private companies, to the general detriment of the American worker. He also lamented the lack of a national strategy for prioritizing limited resources to support a few mega-ports for the largest ships and the competition among numerous ports for those limited resources in pursuit of a limited amount of shipping business. Dr. Jaffe answered numerous questions from council members.

 

Dr. Kevin Bodge, a coastal engineer, discussed the potential impacts of the dredging on the river flow in the main stem and its tributaries, including the degree of saltwater intrusion and the potential for shoaling outside of the main channel. He said that the Army Corps of Engineers used the best models available, but even the best models available can’t predict what’s really going to happen in the St. Johns River which is an extremely complex hydraulic system. He objected to the fact that the primary environmental remediation being proposed is simply monitoring the impacts, which will be irreversible once the dredging takes place. He stated that disposal of the dredge spoil will be problematic since the county is nearly out of spoil disposal space and the proposed off-shore location could impact on the sand bar currently being used for re-nourishment of our beaches. He urged the City to commission an independent study of the potential economic costs and benefits of the dredging before committing $300 million in local money to a $1 billion project based on a consultant study commissioned by Jaxport. In response to a question, Dr. Bodge said that the hydraulic models being used are relatively new and untested, so there is not a great deal of evidence to verify their accuracy yet. Council Member Boyer cited an ordinance approved at the last Council meeting authorizing a settlement agreement with several riverfront property owners for damages caused by riverbank erosion linked to dredging.

 

Brian Taylor, CEO of Jaxport, reported that the federal water resources act will be signed by President Obama today, so the Mile Point project will be fully authorized and getting underway shortly. Mr. Taylor noted that international manufacturing is shifting from northern Asia (Japan, China, Korea) to southern Asia (Malaysia, Bangladesh, India), which will change the transit patterns from the Panama Canal to the Suez Canal, which can handle the world’s largest ships. He said that the land bridge route from Los Angeles/Long Beach handles more discretionary cargo than non-discretionary cargo, and that the Long Beach port strike in 2002 led many companies to establish East Coast distribution centers so that they would not face that choke point in the future. Mr. Taylor reported that Jacksonville’s Asian business has been increasing rapidly in the last year, while the Puerto Rican and Caribbean trade has been declining recently, illustrating the importance of catering to the Asian market.

 

He noted that the port of Savannah was not a leading East Coast port 20 years ago, but has made itself a major player because of its investment in facilities and water depth. Jacksonville could do the same if it is willing to invest to serve the market. Mr. Taylor said that part of the reason that Jacksonville is not a port of call for some of the biggest carriers is that it doesn’t have the depth to handle the ships. We can’t be a leading port if we don’t have the depth. He said that in the shipping industry, jobs follow cargo; if the cargo moves from Jacksonville to Savannah, Charleston or elsewhere, the jobs that serve that cargo will inevitably follow. In response to a question, Mr. Taylor said that nearly half of all ships being manufactured today are post-Panamax size, and that trend will continue. That is the wave of the future for cargo ships. Jacksonville will never be in the market for the really huge ships, but will be in play for 80% of the shipping market on the East Coast – 8,500 to 12,000 TEUs. In response to a question, he cited Governor Scott’s commitment of over $1 billion to Florida ports during his first term in office and the possibility that with further state investment in Jacksonville, Florida can begin to recapture business now being lost to Savannah and Charleston.

 

Meeting  adjourned: 11:45 a.m.

 

 

Minutes:  Jeff Clements, Council Research

                6.10.14   Posted 12:00 p.m.

Tapes:      Port Deepening Committee meeting – LSD

                6.10.14