Long term temperature outlook

We’ve just finished the warmest year in the history of weather recordkeeping. Now the National Oceanic and Atmospheric Administration (NOAA) says there is a 75 percent chance that by fall we will have cooler temperatures globally.

All I know is that here we are May 21, mid-morning, and I’m wearing a sweater and a jacket at the marina. Most years by the second week of June I can’t stand to be outside too long. I come inside about once an hour to cool off and change out of my dripping wet sweaty work clothes.

Old misinformation on ‘marina sale’ resurfaces this weekend

video reinforcing ‘marina not for sale”

Yesterday a Money Island homeowner said that he saw that the marina is still listed for sale on the internet even after my work to debunk the story a while ago. He found my prior explanation that it was an unauthorized listing to be incredible. I agree; it was incredible and I still don’t understand how a reputable Realtor would accept a ‘for sale’ listing not signed by the property owner without any evidence that the ‘seller’ had legal authority to do so.

The MLS listing scheme was reportedly modified to say that it is only the mortgage holder’s interest that is being offered for sale, not the property or business equipment. But I have no proof of the modification and that is little comfort to the business operators here.

I re-traced the issue online and find that whatever is still posted online as real estate for sale is just leftover from the original mishap and not a new second offense by either the Realtor or the publisher who were both served with a cease and desist letter when I discovered the scheme. We all know that just because it is on the internet does not mean that it is true.

The underlying source seems to be the same attorney who is facing disciplinary charges for making a similar false claim to represent the owner back in 2012. We expect that he will eventually be held liable for damages for these false statements.

My point is simply to reassure the business community that the marina is not for sale, that current management expects to continue to operate it, that we are working through the legal process to address the old open mortgage issue and that this attorney may eventually face consequences for his actions.

Environmental economics of marina ice

ice-cube-makers-vertical-evaporator-system-57908-3332821Ice is an important commodity for a marina. Even at a small marina like ours, the recreational and commercial fishermen use hundreds of bags of ice each season to keep their catch cold during transport and keep food and beverages cold while on the water.

The traditional solution is to sell bagged ice that is made in an other location and trucked to the marina. This is expensive and inefficient and the emptied plastic bags too often wind up as trash polluting the water.*

Money Island Marina took on a project to improve ice efficiency with these specific goals:

  1. eliminate the plastic bags
  2. reduce our energy consumption
  3. reduce the cost of ice to our customers
  4. break even financially based on revised experience data.

Selling ice by the bucket was an easy way to eliminate the bags. Most of our customers informally polled preferred the ice in buckets anyway because it was less work getting the ice into their cooler. We sell reusable plastic buckets.

On a few occasions (less than 10 over the year) we did put ice in plastic bags on request from customers. The cost of our bag and zip tie is significant at about $.40. This is because it is the same high density plastic as used to freeze fish. Given out low volume of bagged ice, it does not make sense to keep other bags in stock.

A modern ice machine with the “Energy Star” label would reduce our energy costs. The challenge was providing the capital for this project. Our cost of capital is 18% per year, much higher than many other businesses. Marinas are an inherently risky business so this higher rate of interest is justified. The machine costs $4,500 installed, so the interest cost is $900 per year. This cost is greater than all the other costs combined and explained why environmentally efficient upgrades are not more common.

The project allows us to reduce the retail price of ice from $.31 per pound to $.29 per pound as described below. This presumes that we are able to increase total ice sold to more than 418 buckets. If not, the price will need to be higher in the future but it seems likely that we will still reduce the price over last year.

energy-star

Cost of the project

The total annual costs of the ice project are:

  • Interest on borrowed capital = $810 per year
  • Electricity = $270 per year
  • Filter = $110 per year
  • Amortization of equipment = $900 per year

The total cost of the project is $2,007 per year over an estimated five-year life of equipment for a total cost of $10,037 over a five year period. In the first year of this project we sold 295 buckets of ice (retail, not including commercial watermen) for a total of $1,595 of ice (including the commercial sales) for an overall loss of $412. In the second year of the project we raised the price of retail ice to $5 per bucket and $3 per bucket for commercial watermen. We reasonably expect to break even in the second year.

For purposes of this article, we simplified the cost calculation. This calculation assumes that the equipment will  run 10 months per year and that the filter is replaced each year.  Although the equipment will probably last longer than five years, there is increased likelihood of additional repair or maintenance costs so this aspect is ignored in the calculation.

We did not assign a cost of water from our own pump water in this analysis. Even though the cost of maintaining a pump and conducting periodic inspections of water quality is significant at the marina, there is no perceived marginal cost that can specifically be assigned to the ice. Also, the analysis in this article assumes simple interest rather than compound interest and presumes that there is no residual value of equipment. We also presume that there are no overhead costs of the business (things like taxes, licenses, building and labor) that are assigned to the cost of ice. The dollar amounts are rounded for easier discussion.

Reducing the price of ice for retail and commercial customers

Our net cost of producing ice at the break-even quantity is estimated at $.16 per pound. That works out to an internal cost of $2.88 for a 18 pound bucket of ice. That cost calculation is for direct cost only and ignores the overhead costs associated with running the business. We presumed a retail price of $5.00 per bucket of ice ($.28 per pound) and a $3.00 per bucket for commercial watermen who typically purchase higher volumes of ice.

Competitive pricing

The least expensive off-shore retail price we found in the region for an 8 pound bag of ice is $1.79 which works out to $.22 per pound. Marina prices are higher, typically $2.50 ($.31 per pound) retail with a cost from the wholesaler of $1.20 ($.15 per pound) which does not include to cost to hold or resell the ice. The price per pound goes down when ice is purchased in large quantities and can be found off-shore for $.16 to $.18 per pound in 50 pound bags. But for our purposes, it makes sense to compare the retail prices for ice at locations near to us that are typically $.31 per pound.

Pricing

Retail 18 pound bucket of ice    $5.00

Bag of ice (10 pound in high density plastic bag with handle and zip tie)   $5.00

We think that we notice a psychological advantage of retail pricing ice at $5. Customers seem to prefer not dealing in $1 bills. We also raised other fees at the marina to $5 increments for some of the same reasons.

Break even analysis

The overall cost effectiveness of the project will be determined by the total amount of ice sold over the course of the season. The break-even volume of ice sales is 418 buckets.

  • The first 54 buckets of ice sold will cover the electric cost
  • The next 162 buckets of ice sold will cover the interest expense
  • The next 22 buckets of ice sold will cover the cost of the water filter
  • The next 180 buckets of ice sold will cover the amortization expense of the equipment
  • After we sell a total of 418 buckets of ice, there will be a profit

The bottom line is that this environmental upgrade project requires that we increase the amount of ice sold in order to justify the cost of upgrading. But we welcome the challenge because of the overall benefits that are possible. Please buy lots of ice at Money Island Marina this year!


* For more information on the effects of plastic marine debris in the ocean ecosystem visit Sea.edu/plastics/

Boat ramp upgrade at Money Island Marina

ramp signMoney Island has put much effort into improving our boat ramp services over the past few years. We are pleased to have a low cost / high access facility that accommodates a wide range of users from kayakers to personal watercraft, recreational boaters and commercial vessels.

We were recently selected by the state as a finalist in a competitive grant program to help with the final stage of the project. We plan to extend the concrete ramp 10 feet to make it usable even at low tide.

A copy the initial draft proposal for MIM ramp repair  is available in PDF format.

ramp low tide 1 cropped

Photo from April 2016 blow out tide that shows the bottom of the boat ramp above water. This water level is rare; about 2 feet below mean low tide.

Pattern of storm damage

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Visitors to Money Island this spring may notice some debris in the meadow on both sides of the road coming into the neighborhood. This accumulated after January’s storm with extraordinarily high levels of floodwater. The wreckage comes from Gandy’s Beach that has historically always been hit harder than Money Island because of its unprotected location. These photos are from a much earlier storm that shows debris from Gandy’s Beach piled up alongside the roadway on Money Island Road at the bend about 3/4 mile from the marina. The houses that were destroyed in earlier storms were replaced with modern structures but the new buildings are now feeling the effects of the most recent storms. The 2016 damage is mild by comparison despite local sea level rise of about 10 inches since then. The land visible in the background of this photo is now below mean high tide level so that sets the stage for greater damage in the future for structures that were not engineered to survive these severe conditions. With proper engineering,  however, building can survive whatever nature has in store for us in years to come.

Nantuxent Creek 1904

Newport Landing 1909

This is a photo of Newport Landing in 1904 about a mile up the winding Nantuxent Creek past the cove at Money Island. At that time there was no settlement at Money Island as far as we know. The causeway that became Money Island Road probably wasn’t built until the 1930s. Back then Newport was primarily used to ship agricultural products including tomatoes. Today the landing is used for smaller recreational boats but not the type of large boat shown in this photo. The large commercial boats relocated to Money Island closer to the mouth of the bay. Oyster and crab boats line most of our shoreline especially on East Nantuxent (aka Shell Lane). Money Island is still the second most important commercial port in South Jersey bringing in about $28 million in seafood annually.