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EDITORIAL

U.S., A Nation Out Of Cash, Slashes Budgets
A rich man, one with a fat wallet, can afford now and then to make a mistake and eat the cost. An unemployed man who can’t afford to make his mortgage payments cannot. The wallet of the United States is empty, and because of this, budget cuts are appearing big time. One of the latest victims is the Department of Homeland Security consolidation project, which, due to a recently passed bill, will be delayed at least five years and cost an additional $500 million (or more) because of the delay.

The project is the planned consolidation (by the end of 2016) of DHS headquarters operations at the site of the former St. Elizabeth’s Hospital in Washington. According to the Federal Times, “Congress approved $56 million to complete the new 1.1-million-square-foot Coast Guard headquarters, but it withheld funding to continue work on the other facilities that will populate the envisioned DHS headquarters campus.”

Other facilities that will be likewise delayed  by half a decade will be headquarters facilities for the Federal Emergency Management Agency (FEMA), Immigration and Customs Enforcement and the Transportation Security Administration (TSA), the Times said.

The consolidation project, which was estimated to cost $3.45 billion by the end of fiscal 2016, will now cost at least $3.96 billion if completed by the end of fiscal 2021, provided it can be finished at all. The Coast Guard headquarters is the only part of the project that appears on track to wrap up on time, the Times said.

In 2011 DHS and the General Services Administration (GSA) got only $77 million for the consolidation project rather than the $668 million requested. The same agencies requested $376 million for 2012 and got only $56 million for DHS (for the Coast Guard headquarters) and $50 million for all new GSA construction projects.

The various methods used for financing the consolidation project and/or getting more money for it are a tangled web we shall not try to unravel. The chairman of the House Appropriations subcommittee on Homeland Security, Rep. Robert Aderholt (R-Ala.) issued a statement emphasizing, “there are greater priorities that need funding.” He said he would choose to fund “front-line operations and disaster relief” over providing additional money for the consolidation. Rep. David Price (D-N.C.), the ranking member on the same subcommittee, said the consolidation of DHS into one location is critical for a department responsible for so many missions.

From past experience, we all know that projects delayed cost more in the end because of rising labor and material costs. But there are other problems. Federal Times reports that its review of leasing data reveals that “FEMA has several leases valued at more than $6 million annually that expire within the next few years—all leases it would have to renew.”

Knowing how government works, we suggest that many things can happen in the next few years to change things again. We would like to shed a tear for the DHS and projected delays, but the inland waterways industry has been underfunded for at least three decades. Maintenance and improvements, including critical dredging, are being ignored. So we will remain dry-eyed. The waterways infrastructure is a proven investment.

We happen to believe that messing up our foreign trade program by allowing vital waterways to become unnavigable is worse than a delay in construction of new facilities for DHS.

Weekly News Summary For January 2–9, 2012:

Corps Gets Disaster-Relief Funds After Flooding

Officially declared disaster areas along the Mississippi River will receive much-needed repair funds under the Disaster Relief Appropriations Act signed by President Obama on December 23. The Mississippi Valley Engineer Division will receive approximately $802 million of the $1.7 billion appropriated to the U.S. Army Corps of Engineers, the division announced last week. Flood control and coastal emergencies will receive $388 million, and operations and maintenance activities will total $534 million, which includes dredging and repairs of damages to Corps projects.

Overall, the bill allocates $8.6 billion nationwide for disaster relief.
The Mississippi River and Tributaries System prevented more than $120 billion in damages during the 2011 flood, the largest recorded flood in the river’s history.

“This funding represents a vital investment in the most valuable flood risk reduction system in our nation, perhaps in the world,” said Maj. Gen. John Peabody, Mississippi Valley Division commander and president designee of the Mississippi River Commission. “Since the Mississippi River and Tributaries program was conceived in 1928, this comprehensive flood risk management system has earned its value many times over, representing over a 30:1 return on investment for American taxpayers today.”

While damage assessments to levees and operating projects from the 2011 flood are still underway, engineers estimate that repair costs for currently documented damages in the Mississippi Valley region alone are approaching $1 billion. “We’ve made significant progress in assessing damages up and down the river system, but this is an evolving process that will continue for some time,” said Al Lee, director of business for the division……
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Kinder Morgan To Build New Houston Facility

Kinder Morgan Energy Partners announced December 14 that it will build, own and operate a petroleum condensate processing facility near its Galena Park terminal on the Houston Ship Channel.

With an initial throughput of 25,000 barrels per day (bpd.) and a design that provides for future expansions of up to 100,000 bpd., the approximately $130 million project will split condensate into its various components such as light and heavy naphthas, kerosene and gas oil, the company said in the announcement. A major oil industry customer is underwriting, through a fee structure, the initial throughput of the facility, Kinder Morgan said.

“The location of our new facility, when combined with our recently announced $220 million crude/condensate pipeline, will provide customers with unparalleled connectivity to crude oil and clean products markets including refineries, chemical companies, gasoline blenders, finished product storage, outbound pipelines and marine facilities on the Texas Gulf Coast,” said Tom Bannigan, KMP Products Pipelines president.

The project is expected to be completed in January 2014….
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Rare Corps Of Engineers River Photos Appraised at $4.5 Million

Sotheby’s, the international auction house, has appraised a rare collection of 137 photos of the Mississippi River in the 1880s taken by a Corps of Engineers surveyor and draftsman at $4.5 million, the Minneapolis/St. Paul StarTribune reported December 27.

The bound volume of oval cyanotype photos was taken by Henry Peter Bosse, who worked for the Corps photographing and charting the river during a time when it was being transformed by locks and dams from a wild river punctuated by rapids to a busy artery of commerce. It rested apparently unused in the desk drawer of a working dredge, the William A. Thompson, for 50 years, before the Corps secured it in the vault of the U.S. Bank in downtown St. Paul, Minn.

Born in 1844, Bosse was a classically educated immigrant from Prussia whose grandfather, Count August Neidhardt von Gneisenau, was a famous general who had helped defeat Napoleon at Waterloo. (The Nazi government was later to name a World War II battleship after his grandfather.) Bosse got an excellent German education in art, engineering and music before coming to North America in his 20s. He eventually found work with the Corps of Engineers in St. Paul, with whom he stayed about four years.

Using a large 11- by 14-inch camera and long exposures, Bosse documented the Upper Mississippi’s change from a region of wagon trains and Indians to one of railroad bridges and burgeoning cities.

Bosse’s surviving photo albums gained renewed attention when an antique dealer sold one for $66,000 in 1990. Other albums were tracked by John Afinson, a river historian with the U.S. National Park Service. One is owned by the National Mississippi River Museum & Aquarium at the Port of Dubuque, Iowa, according to the StarTribune; another by the Mayo Clinic. Another was owned by the Rock Island Engineer District—until it was apparently checked out before its value became known. The Rock Island District also had a complete set of Bosse’s glass negatives—but all but six were broken during an office move….
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NRF: Taxing Cargo Imported Through Mexican, Canadian Ports Won’t Work

The National Retail Federation told the Federal Maritime Commission December 22 that imposing a tax on U.S.-bound cargo brought into Mexican and Canadian ports could violate international trade laws and would not drive traffic back to U.S. ports.

“There are numerous factors that retailers use when deciding their supply chain operations and what ports they will use to get products to their store shelves. Critical to these are service, reliability and speed to market,” said Matthew Shay, NRF president and chief executive officer. “Applying a Harbor Maintenance Tax to cross-border traffic will not drive cargo back to the U.S. for distribution.”

Shay said federal, state and local policies that encourage investment in infrastructure projects to make ports more efficient and reduce transit times could help shippers choose U.S. ports over foreign ports. He urged U.S. officials to look at work done with Canadian ports “as an example of what is needed for a national freight policy that will help make the U.S. more competitive.”

Shay’s remarks came in comments filed with the FMC, which is examining whether the federal Harbor Maintenance Tax should be imposed on cargo that is brought into Mexican and Canadian ports and then delivered to U.S. destinations by train or truck. The commission began the examination at the request of Sens. Patty Murray and Maria Cantwell, (both D-Wash.), who voiced concern that ports in Tacoma and Seattle are losing traffic to the Port of Prince Rupert in British Columbia. House members from other port states have also asked the commission to look at the issue.

Importers bringing retail merchandise and other cargo into U.S. seaports pay a Harbor Maintenance Tax of 0.125 percent of declared value, averaging $137 per cargo container and amounting to more than $1 billion a year. The tax was created in the 1980s to help pay for port projects and maintenance, but NRF and others have expressed concern that most of the money collected has been diverted to other uses or left in reserves while critical infrastructure work goes unfunded….
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Corps Urges Caution Near Levees, Revetments

The New Orleans Engineer District reminded mariners that revetments and levees along the Mississippi River south of Baton Rouge, La., are more vulnerable to damage during current high river stages.

The revetments and levees “are subject to damage from wave wash resulting from vessels traveling at excessive speeds, and also from contact with barges and vessels moored along the riverbank,” the district said in a navigation bulletin December 23.

Mariners are advised to exercise extreme caution when navigating in the section of the river between Baton Rouge and Head of Passes, proceed at slowest safe speed, and steer a course as far away as possible from the levees and revetments to avoid damage by suction and wave wash.
Extreme caution was also advised when navigating near locks in the New Orleans district, to prevent vessels and tows from coming in contact with the controlling levee line in those areas.

Mariners and fleet operators were also advised to secure vessels and barges to ensure that there is no contact with the levees or revetments, and the barges are no closer than 180 feet to the centerline of the levee….
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