ABSTRACT 1. INTRODUCTION

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1 Maintenance costs in marinas V. Ibarra*, V. Esteban* "Divisio Ports i Costes, Conselleria d'obres Publiques, Urbanisme i Transports, Generalitat Valenciana, Blasco Ibdnez, , Valencia, Spain ^Lab. Puertos y Costas, Universidad Politecnica, Camino de Vera 46022, Valencia, Spain ABSTRACT The paper reports on the items to be considered to establish the maintenance costs. Legal and technical aspects are reviewed. Maintenance costs reported for six privately owned relevant marinas in the Valencia area are analyzed. This is compared with economical and financial considerations and maintenance costs in some recently developed publicly owned marina facilities. 1. INTRODUCTION Maintenance work includes all the operations to be undertaken periodically to keep the facilities in good condition Maintenance is a continuing operation, requiring trained ataff to handle repairs and perform preventive work. Maintenance has been shown to be necessary for ports and harbours to operate. The need for maintenance cannot be avoided or eliminated. But it should be dealt with in the most efficient and cost-effective way available. Marina facilities are always composed of many components. Maintenance keeps the facilities in appropriate condition, and must be considered and scheduled during feasibility studies. In the operation, maintenance has to be constantly reviewed, improved and planned economically. From a technical point of view, some marina engineering items (structures, equipment) have to be monitored and checked regularly. In many components, such as breakwaters, and in respect of coastal changes maintenance addresses long-term periods. Cost estimates of maintenance activities must be made and reserve funds provided. The first step to implement a maintenance plan is to get a complete list of

2 90 Marina the items in the facilities. This inventory must include all the infrastructure, buildings, services, etc., and all the tasks to be performed. Rendell & May [5] report a long list of tasks to be considered. Extensive facilities in marinas give rise to many functions which must be carried out efficiently and swiftly by the staff to provide better service. 2. MAINTENANCE ANALYSIS Adie [1] reports that maintenance cost normally runs at around 30 % of total annual small craft harbour operating expenses. According to Sheppard [4], maintenance falls into two categories : 1. short-term continual maintenance, and 2. long-term maintenance Tobiasson & Kollmeyer [2] present maintenance grouped into two different categories, scheduled and unscheduled. Short-term maintenance is related to those areas associated with the ongoing day-to-day requirements of marinas. Long-term maintenance schedules should also be drawn up, covering maintenance requirements that fall due, say, every 2-5 years. Unscheduled maintenance is of a nature that requires immediate attention, to protect life or property. In many cases, it is necessary to improve the facilities. Maintenance is not only to preserve facilities from deterioration. It could also be to incorporate new services, which are available in nearby marinas. Today nobody discusses the need for maintenance. A maintenance plan is frequently developed by the marina manager. He needs inputs from customers, the owner and the marina staff. Many items and tasks have to be included, starting with the maintenance management itself. It will also be necessary to analyze the accounting data, managing and monitoring the overall maintenance programme as the financial year progresses 3. DESIGNING MAINTENANCE PLAN From a legal point of view,there is no definition of maintenance plan requirements. Technically there are no rules for undertaking maintenance. Items to be considered in developing a facility maintenance plan are the following, e.g. Tobiasson & Kollmeyer [2] : 3.1 Inventory The first step to define an adequate maintenance plan is to make an inventory of the marina facilities. It is necessary to obtain an up-to-date set of plans of the facility and the surrounding area. In most cases planning and design

3 Marina 91 documents of the facilities are available. These documents have to be brought up to date. Plans views should also show land topography, and bathymetry in the water areas. The purpose is to be able to define and label areas and components in the plans. This could also allow managing and monitoring of areas, and component conditions at specific locations in the marina. Designation system must be created, but simply and definitively. It also may be useful to obtain component sketches. It is suggested that all the data and general information relating to the marina structures be filed systematically for subsequent reference. It could be filed in a computerised system which would permit efficient access to the information and provide successful results. 3.2 Designation of components to be inspected After the data have been collected, it is necessary to designate the components to be inspected in the monitoring program. This designation also requires establishing the frequency of the different component inspections. The time intervals between inspection vary, both for the different components and also for each component with time. Consequently it is possible to develop a checklist to be followed during inspections. The checklist should be as comprehensive as practical to provide complete information. Decisions will be taken, based upon this information, in order to define required maintenance actions, and to make budget provisions. 3.3 Maintenance inspections After this has been done actual maintenance inspection may be carried out. Detailed inspections should be performed during the periods of least activity in the marina, according to scheduled programmes. At the end of each maintenance inspection, a prioritized list of actions should be drawn up, and the schedule for doing them established. Estimates should be made of the cost of each maintenance task and of the time needed to perform it. 4. MAINTENANCE COMPONENT CHECKLIST A specific checklist must be established for each marina facility to assess the maintenance requirements. Tobiasson & Kollmeyer [2] present the following areas and components to be considered : Land structures (structural condition, drainage, utilities, security, etc.) Land areas (entrances, drainage, lighting, security, utilities, etc.) Fixed or access piers (structural integrity, hazards, fastenings, security, etc.) Gangways (ramps, decking, cables and pipes, etc.) Docks and floats (flotation, freeboard, connections, bollards, decking, etc.)

4 92 Marina Dock or float utilities (utilities, power posts, cables, water valves, pipes, etc.) Mooring piles (structural condition, protection, etc.) Fueling facility (pump and hose condition, alarms, lighting, security, etc.) Haul-out facilities (straddle hoists, marine railways, vessel grids, ramps, etc.) Wave attenuation structures (structural condition, erosion, stability, etc.) Dredging (bathymetry plan soundings, dredge material disposal, siltation, etc.) Parking areas (surface condition, lighting, security, utility protection, etc.) Slopes and embankments (slope stability, erosion, vegetation, drainage, etc.) Bulkheads (construction material condition, drainpipes, conduits, etc.) Facility safety and housekeeping (general component security, etc.) In recent years, the regional and central authorities have undertaken actions to convert former commercial docks into new marina facilities, in some Spanish Mediterranean harbours, Soler [3]. Financial analyses carried out on some private and publicly owned marinas demonstrate some differences between them. A 30-years life was considered to be the depreciation limit for structures. The minimum viable operating size if the marina is privately owned was determined to be 640 berths. If the marina is operated by the harbour authorities, 430 berths is the minimum viable unit. The financial capital outlay needed for the basic cost of berthing a boat was evaluated at $ 3250 in a privately-owned marina, and $ 600 in a publicly-owned one. Annual maintenance cost was established at 110 $ per berth in a privately-owned marina, and $ 35 per berth in a publicly-owned marina. However, we have analyzed maintenance and staffing costs reported in 1991 for six relevant privately-owned marinas in the Valencia area, and results are very different. Annual maintenance costs are around $ 750 per berth. In order to implement the maintenance plan, reserve funding is necessary. Funding must be available for repairs to be carried out at the time work is needed. It is usually necessary to develop an annual marina operating budget. Maintenance surveys will assist the development and updating of a maintenance account. 5. SPANISH LEGAL CONDITIONS Spanish law, like others derived from Roman law, reaffirm that the sea and its shore are public property. The Spanish Constitution provides that state public property shall include of all properties so declared by law and, in any event, the foreshores, beaches, territorial waters and all natural resources in this economic area and continental shelf. The Spanish Shores Act regulates the fees and excise taxes payable as equitable consideration for the right to occupy public property granted by the

5 Marina 93 central government and the compensation to be paid upon termination of the concession. The government is authorized to issue public tenders for the granting of the authorizations or concessions which it deems to be of special interest. The maximum term is set at 30 years which is deemed sufficient to recover investments. Harbours of general interest, although a part of the state coastal public property, are not within the scope of the Shores Act, and shall continue to be governed by their specific legislation in view of the specific features and peculiarities of such important public works. Harbours owned by regional governments are also outside the scope of the Shores Act. Nevertheless the construction or enlargement of harbours within the jurisdiction of regional government, such as marinas, requires the occupation of some areas of state coastal public property, and require a favorable report from the central government. Occupation of public property with fixed components is subject to prior Government concession. Applications for concessions must be submitted with the scheme or construction plan. Concessional grants and authorizations contain applicable conditions, including purpose and scope, work to be carried out, term, fees and excise taxes, form of operation, fares, technical specifications, etc. Where the facility is for business purposes it is necessary to provide the authorities with all the information they may request on the financial and economic results. As a matter of fact, marinas cannot be private property. According to this, every facility and its components is public property, and everybody can use it. Nevertheless, marina construction requires high investment. In many cases, in marinas inside commercial harbours owned by the regional government, financial projections to establish taxes have to be based on the following considerations : 1. General exploitation and maintenance costs. 2. Facilities and components depreciation 3. Revenues In the general exploitation and maintenance cost evaluation, it is necessary to separate general and specific utilities and components. In recently developed publicly-owned marina facilities, six general items have been considered in evaluating depreciation, in order to determine taxes : 1. Wave attenuation structures 2. Docks and berthing structures 3. Dredging 4. Navigation aid systems 5. Pavements, roads and parking areas 6. General utilities Specific items to establish taxes for particular users were the following :

6 94 Marina 1. Buildings 2. Ship repair equipment 3. Transportation systems 4. Cranes and other goods systems 6. DEPRECIATION RESERVES Depreciation is the amount by which assets are written off during their usable life. Consequently, depreciation costs are more relevant than the write-off for revenue reporting purposes. The usable life of components must be specifically established for each one. Each asset must be considered individually, together with its environment and usage, and be written off over its anticipated life span. Annual writedowns should be set aside in a separate fund to ensure that cash is available when replacement is required. The effect of inflation must also be considered. Economical and financial considerations and maintenance costs in the six relevant privately-owned marinas in the Valencia area have been analyzed. Criteria to provide depreciation reserves are different for each one. There have been deep discussions on how to properly take into account the depreciation reserve (and fund) in economic analysis of the exploitation. It is quite difficult to establish proper comparisons between different countries due to the different accounting systems. In some cases the creatin of a reversal fund for the concession is allowed. There is no unanimity about the amounts to set up this reversal fund. It is necessary to remember that in a 500-berth marina, requiring a total amount of $ 7,100,000 investment, when different ways of creating the reversal fund are considered, differences in taxes during the exploitation might be as much as $ 2,500,000. Marinas analyzed show that the different criteria concern the following questions : 1. Implementation of reversal fund 2. Asset and liability book-keeping entry 3. Implementation of depreciation reserves 4. Annual writedowns of tangible fixed assets 5. Implementation of depreciation reserve for tangible fixed assets 6. Periodization 7. Consideration of the mortgage loan security 7. CONCLUSIONS Real estate developers, either private or public, require an efficient and profitable marina operation. Maintenance costs are different for each marina.

7 Marina 95 There can be little doubt that with the increasing demands on marina facilities, among the most important elements for success are the economical and financial considerations, and maintenance costs and results. Safety conditions and long-term survival of the facilities depend on maintenance work and management. REFERENCES 1. Book 1. ADIE, D.W. (1984) : "Marinas". Architectural Press. London. 2. TOBIASSON, B.O. & KOLLMEYER, R.C. (1991) : "Marinas and small craft harbors". Van Nostrand Reinhold. New York. 2. Paper in a Journal 3. SOLER, R. (1987) : "Reconversion de puertos comerciales en puertos deportivos. Metamorfosis". GAUGE 2000, nr 25. July-August Madrid. ISSN X. 3. Edited book 4. SHEPPARD, H.N.E. (1993) : "Management and economics". MARINA DEVELOPMENTS. Ed. WR Blain. Computational Mechanics Publications. Wessex Institute of Technology. Southampton, pp Paper in conference proceedings 5. RENDELL, A.F. & MAY, P.A. (1992) : "Computerised integrated systems for management and control of Marinas". MARINA TECHNOLOGY. Ed. WR Blain. Proc. of the 2nd Int. Conference. Southampton. Computational Mechanics Publications & Thomas Telford. London, pp SCHEINER, R.Y. (1989) : "Economics of marinas on exposed coasts". MARINAS : PLANNING & FEASIBILITY. Ed. WR Blain & NB Webber. Proc. of the Int. Conference on Marinas. Southampton. Computational Mechanics Publications. Southampton, pp