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Dillon Consulting Limited
� DRAFT- September 12, 2000
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Table of Contents
Executive Summary . ,.. . . . . , iii
1.0 Introduction 1
2.0 Proposed Lands to Be Transferred and Influences of Adjacent Properties 3
2.1 Description of SCH Property 3
2.2 Description of Adjacent Land Users . . . . . . . . . 4
2.3 Known Property Issue-East Beach'Gap' . 4
3.0 Liabilities 6
3.1 Environmental Liabilities . . . . . . . . . . . . . . . . . 6
3.2 Dockwalls and Piers . . 8
3.3 Navigation Aids , .. , . , , , . . . . . .. . . . . .... . . . . . . . ... 4 .. . , . .. . . . . . . . . . . 9
3.4 Dredging . 4, , . .. .. .... _. . .. . ..4 ... 9
4.0 Economic Analysis 11
4.1 Revenue and Expenses . . . . . . . . 12
5.0 Assessment of Markets That May Influence the Future of Port Burwell 14
5.1 Recreational Boating 14
5.2 Commercial Fishing. . , , 16
5.3 Development Potential 17
6.0 Management Options .. 19
6.1 Municipal Ownership of Recreational/PubIic Harbour Supported by the Tax Base 20
6.2 Municipal Ownership of Harbour Lands- Supported by the Tax Base . . . . 22
6.3 Do Not Accept Ownership-Encourage SCH to transfer lands to MNR/Conservation Authority 24
6.4 Negotiate a Three-Way Partnership for New Marina Development Funded 26
7.0 Recommendations . . 30
8.0 Appendix A 31
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EXECUTIVE SUMMARY
The Federal Department of Fisheries and Oceans, Small Craft Harbours is engaged in national
program to divest Small Craft Harbours (SCH) to local interests. As part of this program SCH
has been working, initially with the Village of Port Burwell and, since amalgamation, with The
Municipality of Bayham towards a possible transfer.
In June 2000, Dillon Consulting Limited was retained by the Municipality of Bayham to
undertake an independent review of the Federal land and water lots to assess the issues
surrounding the harbour including the financial impacts of assuming ownership and make
recommendations on possible management options. The following are the key findings of our
work:
• To maintain the harbour operations at the current level of service and properly fund
capital reserves for future repairs to harbour structures an estimated annual operating
shortfall of$75,200 can be expected. (This includes minimal dredging but does not
include dredging for Talisman Resources).
• The measured economic impacts of Port Burwell for the region are estimated as follows:
• The annual payroll generated from harbour and harbour related jobs is estimated at
$1,050,000 annually;
• the municipality receives a benefit of$2,600/year in rent from sublease agreements not
including staff administration costs;
• estimated property tax(local levy) in 2000 for lands related to harbour activities was
$9,200;
• employees of harbour-dependant businesses spend an estimated total of$55,125 on
goods and services per year; and,
• harbour-dependant businesses spend an estimated total of$262,500 on goods and
services per year.
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• There are no obvious and significant opportunities for revenue growth associated with the
federal lands;
• All of the SCH property is within the floodplain as defined by the Conservation Authority
severely limiting development potential;
• The most significant liability associated with the transfer of these lands, that can cannot
be accounted for in financial terms, is the unknown potential for soil or sediment
contamination. However, this issue can be resolved with a more detailed study which we
understand SCH would be prepared to undertake.
• The opportunity to develop a major, full service marina, consistent with the proposal
developed for the Village in the late 80's, is still valid. The area recommended in that
study for the development of the marina is owned by the Municipality of Bayham
Recommendation
Port Burwell contributes significantly to the regional economy. Equally important, a working
port has been integral to the character and identity of the Village and its residents. For these
reasons decisions with respect to the harbour at Port Burwell are worthy of careful consideration.
However, the simple transfer of ownership from the Federal Government to the Municipality of
Bayham will do nothing to resolve the long term financial and economic issues associated with
its operation. The Federal Government has been trying to make the harbour work for over 30
years and has had no success. The Municipality of Bayham, with less financial resources than the
SCH, cannot be expected to have any greater success.
Any solution that leads towards sustainable economic growth in Port Burwell cannot be based on
the historical approach to Port Burwell. A new vision and approach is required.
We feel that the development of a full scale marina on the Municipality's waterlot presents an
excellent opportunity to shift harbour activities out of the Big Otter River mouth to a location
that is more sustainable economically and environmentally. The marina development has the
DRAFT-Port Burwell Assessment and Management Strategy
Dillon Consulting Limited Page iii
potential to relocate and improve on the number of jobs and business in Port Burwell. Under this
scenario, with the shift of water based activities to the outer harbour area,the Big Otter could be
allowed to naturalize back to its original condition allowing for eco tourism possibilities,
potentially co-ordinated with Port Burwell Provincial Park activities.
However,this cannot be achieved by the Municipality alone. We have explored potential funding
sources for marina projects and believe that the SuperBuild program for small rural centres will
have finances assigned for these types of projects. To this end, we recommend the following
actions:
• The municipality should advise SCH that it is willing to consider acceptance of the
Federal lands in Port Burwell subject to the following general conditions:
that SCH enter into a partnership agreement to work with the municipality
to seek public funding for the construction of new marina through the
Ontario SuperBuild program. This partnership will exist for the purposes
of completing any necessary design,marketing or financial work necessary
developing applications to the SuperBuild Program, exploring private
partner interests, making joint presentations and generally supporting one
another in achieving provincial funding for a new marina development;
the partnership will exist for 12 months renewable on the consent of each
party;
the partnership will explore the development of eco tourism possibilities
for the Big Otter River and joint ventures with the Ministry of Natural
Resources and or the Long Point Region Conservation Authority;
that SCH provide suitable compensation to the municipality in
acknowledgment for the liabilities of accepting the federal lands and as a
partnership contribution;
that the transfer is subject to the completion of a Phase II Environmental
Audit conducted by SCH to the satisfaction of the Municipality;
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- that the Municipality not be required to maintain the existing harbour as a
Public Harbour and be able to set its own rates for leasing, berthage and
wharfage; and,
- that failing the interest of SCH entering into this partnership that SCH be
advised that the Municipality of Bayham is not in a financial position to
assume the ownership of the Federal assets at Port Burwell.
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A partnership between the municipality and SCH in pursuit of
an application to the Province's SuperBuild program may
provide the funding source for development of the marina
concept suggested by JSW in 1988
DRAFT-Port Burwell Assessment and Management Strategy
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1.0 INTRODUCTION
The harbour at Port Burwell is located on the north shore of Lake Erie at the mouth of Big Otter
Creek. The harbour facilities, dockwall,piers and navigation devices and a small amount of land
were developed, starting in the mid 1800's and have been since managed over the years by
several private and public harbour agencies. The facilities are now managed by the Federal
Department of Fisheries and Oceans, Small Craft Harbours (SCH)who have been mandated to
work towards transferring facilities such as Port Burwell to local interests. As of May 2000, of
the 404 SCH locations in Ontario, ownership/and or operations of 226 waterfront facilities has
been transferred to local users or municipalities.
Prior to amalgamation,the Village had various lease agreements with SCH to manage and
operate a recreational harbour and commercial wharf on the federal government's behalf. There
have also been periods where a lease has not been in place due to financial constraints of the
municipality. Under municipal management, Bayham or Village staff have been largely
responsible for the day to day operations of the harbour with technical and some financial
support from the SCH.
SCH initiated negotiations for the transfer of the federal assets with the former Village of Port
Burwell in 1997. These discussions led to an agreement in principle which outlined the
conditions by which the municipality was willing to accept the harbour. However, the agreement
was not consummated and the events which lead to the Village's amalgamation overshadowed
the harbour discussions.
The Municipality of Bayham has now assumed the role of the Village in negotiations with SCH
regarding the transfer of the harbour lands. To this end, Dillon Consulting was retained to assist
the municipality in the following:
• clarification of the ownership and tenure pattern for the lands proposed for
transfer and abutting properties;
• summation and evaluation of contingent liabilities including:
DRAFT-Port Burwell Assessment and Management Strategy
Dillon Consulting Limited Page 1
- leases responsibilities;
- short and Iong term financial commitments with respect to dockwall
infrastructure, dredging and channel markers; and,
- environmental and other potential liabilities;
• summation of assets and potential revenue sources including development
potential of adjacent lands;
• evaluation of Port Burwell's economic role locally and regionally; and
• recommendations,based on the foregoing, for municipal action and potential
negotiating terms.
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Location Map Not to Scale
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2.0 PROPOSED LANDS TO BE TRANSFERRED AND INFLUENCES OF ADJACENT
PROPERTIES
Property ownership and active leases are described below and illustrated in Figure 1: Summary
of Land Interests. This assessment is meant to provide Bayham Officials with a better
understanding of the property assets of the SCH and the interests and influences of the
surrounding property ownerships. It is not meant to provide any representation or opinion of the
property title.
2.1 DESCRIPTION OF SCH PROPERTY
The federal lands being offered for sale consist of the waterlot immediately in front of the mouth
of Big Otter Creek, extending upstream to a point south of Bridge Street. For the purposes of
this report, federal land refers to both land and water lots. The federal property includes small
portions of lands on the west and east banks of Big Otter Creek, a rubble stone breakwater, the
northern portion of the east pier, dockwalls and piling, and the navigational/marker equipment.
The size of the SCH property subject to transfer is:
Land: 6.621 ha (16.36 ac) not including fill from sedimentation on west bank of
Big Otter Creek
Waterlot: 74.998 ha (185.32 ac)
Total: 81.619 ha (201.68 ac)
The land and waterlot are currently being used to provide marine access in support of harbour-
related activities including a recreational marina, commercial fishing and underwater natural gas
exploration.
The federal lands have been leased to the municipality through short-term leases, generally from
one to five years since 1973. When the last lease agreement expired in May 2000 it was not
renewed to provide the municipality with an opportunity to determine whether to acquire the
harbour lands from SCH.
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•. 0 . Flg.1.:Summary of Land
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I.. Port Burwell Harbour
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Perhaps most significant in assessing the acquisition of the harbour is not the federal land and
waterlots themselves but the private lands which surround the harbour. These properties and the
businesses that occupy them are dependent on unimpeded access to the federal lands and waterlot
harbour. Much of the value of these properties is derived by their access to a navigable channel.
Portions of these lands are managed by the municipality via a lease agreement with a numbered
Ontario company.
2.2 DESCRIPTION OF ADJACENT LAND USERS
On the east side of the federal lands, adjacent properties consist of lands owned by 345990
Ontario Limited and a municipal waterlot fronting the east beach.
On the west side of the federal lands, adjacent properties consist of two lots owned by the
municipality, lands owned by 345990 Ontario Limited, lands owned by Talisman Energy and
lands owned by the Province as part of Port Burwell Provincial Park.
345990 Ontario owns the majority of land abutting the federal property proposed to be
transferred to the municipality.
The Municipality maintains access over land to the inner harbour through two leases with
345990 Ontario Limited for lands on the east and west side of Big Otter Creek . The rental for
these leases is $1,100 annually, each. Portions of these lands are then leased back to the
following users:
Tenant(Purpose) Term Rental
1. Talisman Energy(gas pipe pulling) May to August, 2000 $3,000
2. Bradcranex(municipal docks & boat launch) June to October, 2000 $2,500
345990 Ontario Limited also lease lands to several business on lands adjacent to Bridge Street on
the west side of Big Otter Creek. No information was available on these agreements.
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2.3 KNOWN PROPERTY ISSUE-EAST BEACH'GAP'
Based on a Title Investigation prepared by Public Works and Government Services Canada for
SCH, there appears to be one issue associated with the transfer of the property. When SCH sold
two waterlots to the Village of Port Burwell in 1993,the shoreline had filled in approximately 20
to 30 metres from the original shoreline shown in the 1975 harbour plan. This had the result of
creating a parcel of land which separates the East Beach from the waterlots. Since SCH"may
retain some interest"in this parcel, the municipality may not have direct access to Lake Erie from
the East Beach.
Plan 11R-6733 prepared by Kim Rusted Surveying was registered in December 1997 to describe
the current extent of the SCH property. The parcel of land in which the federal government may
still have a claim is referenced as "Part 1" of that plan and is illustrated and noted on Figure 1:
Summary of Land Interests. If Plan 11R-6733 is used to delineate the extent of the lands being
purchased, then the fragmented parcel would be acquired and the issue of direct access to Lake
Erie would be resolved. If the municipality chose to continue leasing the property it is advised
that the agreement reference "all those Parts which make up Plan 11R-6733" as the subject
property to ensure municipal access the waterlots.
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3.0 LIABILITIES
3.1 ENVIRONMENTAL LIABILITIES
We examined the potential for environmental liabilities that may be assumed by the municipality
from potential soil and/or groundwater contamination associated with filling or previous land
uses or contaminated sediment within the harbour. These liabilities have been primarily assessed
from the perspective of assuming the SCH lands "as is" and maintaining the current operating
arrangements.
3.1.1 Soil and Groundwater
Sources of soil or groundwater contamination generally occur from land use or
contaminated fill put in place as part of land filling exercises. In assessing this liability we
reviewed two studies undertaken with respect to these issues and conducted a site
inspection to verify the conclusion of these works.
A harbour inspection conducted by Public Works and Government Service Canada
(PWGSC) in November 1996 described the fuel tank north of the east side launching
ramp as showing "no visible signs of cracks or deterioration. A threaded drain
hole...allows rain water to drain but would also allow a fuel spill to escape." No
comment was made in the report regarding the likelihood of contamination from a fuel
leak.
Additional sources of concern are identified in a Phase I Property Transfer Assessment
prepared by Gartner Lee Limited in 1997. The report identifies that large quantities of
coal and phosphate fertilizer were trafficked through Port Burwell during the early to mid
1900's and"in the 1950s there was a fire of an 8,000 ton pile of coal that lasted for
several days." The same report also notes that a large oil tank capable of storing 600,000
gallons of fuel was established adjacent to the harbour in 1948 but no further information
was provided about its location or whether it was removed. Although a site visit was not
conducted by Gartner Lee Limited,the 1997 report ultimately states that"no significant
environmental concerns were identified."
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water table that can serve to transport some contaminants hundreds of metres from its
source.
Irrespective of the results of the previous studies, the municipality should, as a condition
of any transfer, require that a detailed Phase II environmental audit of both the land and
harbour bed be conducted to characterize in detail the nature of any subsurface
contamination. To ensure that there are no concerns with the study methodology, the
municipality should be a party to the development of the terms of reference for such a
study and should seek the assistance of a qualified professional to conduct a peer review
of the study upon completion.
3.2 DOCKWALLS AND PIERS
In 1996, a harbour inspection was conducted by PWGSC for Small Craft Harbours which
describes the harbour as being in"fair condition". While there are many minor deficiencies with
the harbour facilities most of the identified areas of concern would not likely impact the use of
the harbour or safe navigation within its limits. The only major concerns revealed during the
inspection are associated with the East Pier, specifically the portion which was not transferred to
the municipality. These repairs to the East Pier were also identified as part of the initial draft
agreement in principle with the Village. At this time, SCH had agreed to repair a section of the
East Pier as part of the initial transfer agreement.
Dillon undertook a site visit and conducted a visual inspection to confirm the findings in the
PWGSC report. We were not able to assess the condition of any underwater structures as
described in the Diver's Report within the PWGSC report but our investigation of above-ground
structures did not reveal any additional concerns.
In our experience, with similar facilities such as Port Burwell,the maintenance of these facilities
can be costly. However, dockwalls and piers are designed to withstand tremendous hydraulic
forces and structures that, when properly constructed, generally have an engineered life span of
25 to 40 years. What should be anticipated and funded are the eventual, long term replacement of
the decking, sheet wall tie back structures and cribbing in sections of the piers and breakwall. To
fund these types of repairs a reserve fund is usually established. A smaller amount should be
DRAFT-Port Burwell Assessment and Management Strategy
Dillon Consulting Limited Page 8
budgeted for minor repair and maintenance. In general terms, it is recommended that a budget to
maintain the current level of service provided by SCH be allocated as follows:
$5,000 funding annual maintenance
$15,000 annually be allocated towards capital works
3.3 NAVIGATION AIDS
Port Burwell is no longer recognized as a navigable harbour by the Canadian Coast Guard. The
updated hydrographic survey of Lake Erie will not recognize Port Burwell because of the heavy
sedimentation. To this end, the navigational lights on the east and west piers are not operated as
obstruction markers. Based on our experience with other harbours, an annual allowance of
$7,500 (in addition to the $5000 for general annual maintenance) for Port Burwell would be
considered reasonable for repairs and maintenance of these markers.
3.4 DREDGING
The need for dredging is likely the single most immediate liability in assuming the harbour lands
and keeping it open as public harbour. This is primarily because Port Burwell is effectively on a
river mouth and not a natural harbour. On its own, Big Otter Creek discharges an average of 410
tonnes of sediment through the harbour daily. Adding to this is the littoral drift of Lake Erie that
also contributes heavily to sedimentation in the Outer Harbour area. To maintain a safe and
accessible channel for recreational power boats and the commercial fishing vessels, a minium
channel depth of 4 to 6 feet is required. Recreational sailboats require a minimum channel depth
of 8 to 10 feet. To accomplish this in the Big Otter Creek and the harbour entrance, dredging
must be considered as an ongoing maintenance requirement.
Since 1990, approx$30,000 to $60,000 has been spent annually on dredging,jointly funded by
the municipality and SCH. This does not include dredging that is conducted privately, or soil
sampling and municipal administrative costs directly associated with the dredging projects.
Dredging is a normal part of most harbour maintenance. However, sedimentation usually occurs
from the relatively slow deposition of sediments from long shore or littoral drift. The Big Otter
Creek is fed from a watershed that is primarily farmland in nature. Runoff to the river is therefore
DRAFT-Port Burwell Assessment and Management Strategy
Dillon Consulting Limited Page 9
loaded with erosional material from the exposed soils in freshly farmed fields. By way of
example,the Big Otter Creek carries approximately 4 times more sediment annually than an.
urban river of equivalent size, such as the Don River in Toronto. It is therefore possible, given
the dynamics of the creek, that any dredging effort in Port Burwell could be immediately wasted
by the rapid sedimentation that can occur after a major rainfall.
Experience in Port Burwell has shown that to maintain proper and safe access in the river mouth,
a commitment must be made to dredging a channel. To maintain even a minimum depth for
recreational power boats and commercial fishing vessels, dredging may be required more than
once a year. Based on the historic spending in this area, an annual budget of$60,000 should be
established to maintain the existing service level and thereby mitigate any potential claims
against the municipality.
Disposal of the dredged material is also an issue and the additional costs associated with removal
must be considered. To date, removal of the dredged material and relocation to lands on the west
harbour lands has been economically feasible. However, more expensive disposal such as
landfilling may be necessary, creating an even larger burden on the tax base.
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4.0 ECONOMIC ANALYSIS
To evaluate the acquisition of the federal assets in Port Burwell it is important to look at the both
the direct costs and revenues associated with managing the harbour but also the indirect impacts
that are associated with businesses that have located in Port Burwell because of the presence of
the harbour. The scope of economic impacts include revenues received by the municipality
through lease agreements, recreational marina activities, property taxes paid by landowners',the
value of local employment, and value of goods consumed/services used by local businesses.
Information to support the economic analysis was gathered through telephone discussions with
managers and owner/operators of local businesses. We established that the local energy industry,
commercial fishery, marina operators, restaurants, and bait shops had the strongest relationship
with the harbour and confirmed these relationships when we spoke to representatives from these
businesses. To develop an understanding of the harbour's economic importance to the local
community we surveyed these same businesses for number of employees and calculated property
tax based on their assessed value and appropriate mill rate. Using number of employees, we
extrapolated spending by employees and spending by businesses on local goods and services. A
conservative approach was used in the estimation of these values to prevent over-stating the
potential benefits to the municipality. A summary of the economic benefits follows:
• the municipality receives a net benefit of$2,600/year in rent from sublease
agreements (this does not consider staff time spent managing harbour issues
which could reduce this figure to a negative number);
• estimated property tax(local levy) in 2000 for lands related to harbour activities
was $9,200;
• employment directly and indirectly supported by the harbour is estimated to be 35
full-time jobs; assuming a salary of$30,000,the annual payroll is $1,050,000;
'Property tax calculations are rounded to the nearest hundred dollars
and are based on the local levy only, and do not include county, education
or policing rates. It is also assumed that the full amount of the municipal
levy for these lands can be redirected to offset the costs of operating the
harbour.
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• employees of harbour-dependant business spend an estimated total of$55,125 on
goods and services per year; and,
• harbour-dependant businesses spend an estimated total of$262,500 on goods and
services per year.
To be clear, these are the economic impacts that are spread throughout the region. Given the lack
of a major service centre in the municipality, we would expect that a high percentage of these
benefits leave the local area.
4.1 REVENUE AND EXPENSES
The following summarizes the per estimated per annum revenues and costs from the harbour and
related business for the year 1999. There are no consistent consolidated statements for spending
and revenues in Port Burwell. However, in reviewing the available information for the year 1999,
we believe it is a reasonable reflection of the profile for the past few years.
Revenues
Lease Agreements: Operation of Municipal Marina $2500
Talisman Energy-Pipe Pulling $3000
Property Tax: Big Otter Marina $1900
Bradcranex Inc. $800
Port Burwell Fish Company $500
Talisman Energy $400
345990 Ontario Ltd. $800
Craiger's Cove $1100
The Fish Place $1700
Mamma's Restaurant $500
Chappy's Bait and Tackle $900
Kingfishers $600
Total Revenues: $14,700
Annual Expenses
Lease of Federal lands and waterlot from SCH: $500
Lease of west bank lands from 345990 Ontario Limited: $1100
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Lease of east bank lands from 345990 Ontario Limited: $1100
Land use permit from MNR for Black Dock: $200
Total Expenses: $2,900
1999 Cash Flow: $11,800
(It should be noted that we have not included the unrecorded costs of staff administration in
managing the harbour.)
Although the harbour appears to generate nearly $12,000 in revenue this does not take into
consideration the full costs of ownership of the property. Based on the cost estimates in Section
3 of this report, the following scenario illustrates an estimated cash flow in 2001 assuming
municipal purchase of the federal lands and acceptance of all responsibilities as owner of the
property:
2001 Estimated Revenues (assume unchanged from 1999) $14,700
Lease agreements (345990 Ontario Ltd. and MNR) $2,400
Dockwall maintenance $5,000
Dockwall capital reserve $15,000
Navigational marker maintenance $7,500
Dredging $60,000
2001 Estimated Total Expenses $89,900
2001 Estimated Cash Flow: $(75,200)
Although the implementation of user fees or renegotiation of lease agreements at higher rent
might generate increased revenue, it would be insufficient to cover the estimated shortfall.
Continued operation of Port Burwell by the municipality as the owner of the facility would
require either a one-time cash contribution by SCI-1 established as a revenue generating annuity
as part of the transfer agreement or substantial municipal subsidization, or both.
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5.0 ASSESSMENT OF MARKETS THAT MAY INFLUENCE THE FUTURE OF PORT
BURWELL
5.1 RECREATIONAL BOATING
In 1988 a study completed by Johnson Sustronk Weinstein and Associates (JSW) suggested the
redevelopment of Port Burwell Harbour into an outer harbour adjacent to the east pier with an
upscale marina. By the early 1990's the development concept (Skinner)had grown to include
residential condominiums,hotels and a casino. The development was never realized due to the
following factors identified in a staff report to Council dated March 18, 1999:
1 The economy was at the peak of a recessionary period;
2 Financing of the project was dependant on provincial and federal grants; and,
3 The development was tied to a bid for Ontario's first casino which was ultimately
awarded to the City of Windsor.
In addition to these considerations, the timing of the development proposal was likely
inappropriate. Competing harbours on the north shore of Lake Erie such as Turkey Point, Port
Stanley and Port Dover were better known,had available space and offered amenities for the
recreational boater. This would have inhibited the early success of the marina at Port Burwell.
5.1.1 Market Weaknesses
Access to Market. A major concern is the smaller hinterland that Port Burwell has to
draw from as opposed to its competitors Port Stanley/Port Bruce (London)and Port
Dover/Turkey Point(Hamilton). Figure 2: Market Areas illustrates 100 km zones
centred around Port Stanley,Port Dover and Port Burwell. In Port Burwell's case,
London is on the fringe and Hamilton is well outside the harbour's catchment area. This
is a key issue in marina development as the largest portion of marina customers are
seasonal (as opposed to transient visitors)who use their boat on weekends. Port Burwell
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is between these major centres and may have difficulty competing with other facilities
which are closer and offer better amenities to the weekend boater.
Conflict with Beach Users. The East Beach at Port Burwell has long been used as a
public beach. A new full-scale outer harbour marina would encompass the East Beach
and create a conflict with East Beach uses and users.
5.1.2 Market Strengths
Demand for Berthage at Lake Erie Marinas. Operators at Port Stanley have marinas
which are at full capacity during the peak boating season and frequently turn away
transient boats. A waiting list at Port Stanley is another indicator that demand currently
exceeds supply. This situation is generally similar across the north shore of Lake Erie. In
July 2000 we conducted a telephone survey to update counts of marina slips from the
JSW study. The results illustrated in Figure 3: 1987/2000 Comparison of Recreational
Berths show that most of the popular facilities are near or at full capacity. The data
suggests that an 'undiscovered secret' such as Port Burwell could capture a sizeable share
of recreational boat traffic with the appropriate amenities.
The JSW Report estimated that Port Burwell could support approximately 290 wetberths
in 1990 and 425 wetberths by 2000 if it offered appropriate facilities. The operator of the
marina at Turkey Point indicated that it usually runs close to capacity and could expand
by 400 slips. This suggests that the JSW estimates for Port Burwell may still be valid and
that a reasonable development scheme could be realized.
Increase in Recreational Boating. The recreational boating market has generally showed
stable growth and has never historically declined in any significant way. Trends in
recreational boating are tied more closely to that of population growth and both Hamilton
and London continue to expand.
Port Burwell is Well-Positioned for Expansion. From a private or public development
perspective, Port Burwell could be attractive given the lack of competing land uses (as
compared to industrial uses in Port Stanley), affordable land, and municipal interest in
improving the harbour.
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r ----
1\
Port Dover
Port Stanley Port Burwell JSW-275 D -400
SIT-400/var
JSW-64 D - 360 JSW-60 D -80 Full
SIT-360/var SIT-45135
Full Available
RondeaulE=rieau
. . r 614
JSW- 140 D- 153 Port Bruce
Nearly Fu120 JSW-96 D - 100 '� `--"Ifto...._
SIT-95/5
Full Port Rowan/Long Point
.`'. :10
JSW-560 D-659
S/T-ver
Full
V-4 r 1 e
Turkey Point
JSW- 1035 D-750
Z SIT-750Ivar
Nearly Full
N77 /
A...4 a Name of Harbour Fig. 3'
-- Turkey Point 1987/2000 Comparison of
Na. of berths from Recreational Berths
JSW- 1035 D- 750 Dillon research(2000)
SIT-750/var— Seasonal/Transientberths Port Burwell Harbour
No.of berths in Nearly Full (var'denotes transient
JSW Report(1987) berths are available when
Berthage demand j seasonal berths are empty) The Municipality of Bayham
during peak season
Not to Scale
00780011k-erie.cdr _l
Note.Number of berths maybe approximate Au .8,2000 MLC;RAB PIISAN
pp 9
Limited Expansion Opportunities at Competing Locations. The lack of a"natural
harbour" at Port Burwell will generate higher development costs for a marina in Port
Burwell, however, similar situations exist at the competing ports nearby. Expansion at
Port Stanley will similarly require a new marina development, since there is no further
room for expansion within its existing facilities however, Port Stanley may be more
attractive to investors given the more developed tourism industry in the area. Port Dover
has room to expand the existing marina at significantly reduced cost compared to Port
Burwell (JSW study estimated $8.2 million for new marina construction in 1989)or Port
Stanley. Based on a 2%annual inflation rate, we estimate the cost for new marina
construction in 2000/2001 to be $10.2 million.
5.1.3 Summary
Port Burwell is one of a few opportunities that seems to have the potential for new
development based on the forces acting on the recreational boating market on Lake Erie
which show signs of slow but steady benefits for the harbour. These forces are:
- an expanding market for recreational boating on the north shore of Lake
Erie with little sign of decline;
growing urban centres;
limited opportunity for expansion in the immediate London area without
overcoming severe land ownership issues and high capital costs (Port
Stanley);
Port Dover and Turkey Point can grow to accommodate more less
expensively than Port Burwell;
opportunities for marina development, overall, are not expected to
increase; and,
an absence of marina services between Port Stanley and Turkey Point.
5.2 COMMERCIAL FISHING
Based on the Lake Erie Fisheries Report(1997),published by the Ministry of Natural Resources,
the total commercial landings from the Ontario waters of Lake Erie in 1997 were 32.9 million
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pounds,which is an increase of 19% from 1996. The report indicated that the growth is due to
an increase in rainbow smelt and yellow perch landings. According to the report,the value of
total commercial landings in 1997 increased by 7%over 1996. Discussions with Dan Minor and
Larry Martin indicate that the fish stocks have been adequate for their needs. It is usual for the
catch to vary from day to day, but they have little difficulty meeting their annual fishing quota
which they claim is the primary hindrance to growing their fishing business.
No growth in the fishing industry is anticipated in Port Burwell based on the very limited
facilities and the navigational issues of the harbour. The major focus of commercial fishing on
this portion of Lake Erie will be focussed on the communities of Port Dover and Port Stanley
where the industry and its supporting infrastructure has become well established. Without the
improvement of harbour facilities at Port Burwell, it is difficult to foresee any growth in the
commercial fishery. If new facilities were provided, on a basis competitive to Port Dover or Port
Stanley, it is reasonable to assume that additional fishing boats could be attracted. However,this
growth would not be significant enough to make a substantial difference in the total economic
outlook for the harbour.
5.3 DEVELOPMENT POTENTIAL
The policy framework currently exists to support the development of a marina at Port Burwell.
The proposed new Official Plan designates the banks of Big Otter Creek south of Bridge Street as
"Multi-Unit Residential (Harbour)" and"Commercial." The"Multi-Unit Residential (Harbour)"
is in keeping with the vision for a large-scale marina development including boat dockage,multi-
unit residential development and accessory uses to a marina. Permitted uses in the
"Commercial"designation include uses related to the "buying and selling of goods and services"
and residential uses, but does not specifically include marina uses. Development within the
"Multi-Unit Residential (Harbour)"must be supported by a planning study which illustrates the
social, recreational, and traffic impacts to the former Village of Port Burwell.
The Zoning By-law designates the lands on the east and west bank of Big Otter Creek as"RC -
Resort Commercial" indicating the municipality's desire for development supportive of the
waterfront. Permitted uses include marina and marina-related activities, as well as commercial
and residential uses. On both sides of Big Otter Creek, a development proposal must
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demonstrate that it can be properly serviced which is an issue with marina development in
smaller communities.
However,the most significant constraint to a full scale development proposal at Port Burwell is
the extent of the regulatory flood plain which restricts land uses to a very limited number of
activities. At Port Burwell, this will likely limit the development potential to a marina, uses
accessory to a marina and parks, but exclude a significant commercial or residential component
with direct access to the waterfront. This would have an impact on the overall feasibility of the
proposal since revenue-generating commercial development can help to offset the substantial
capital investment and operating costs of a full-scale marina.
In Port Burwell's favour, however, is a municipality willing to cooperate for a recreational or
tourism-related development proposal that reflects the vision of the community for harbour
improvement.
If the federal property was large enough to support the development of a full-scale marina then
some rationale might exist for the municipality to acquire the lands with the long-term hope of
securing them for future development. However, the federal property consists of only 6.6 ha
(16.7 ac) of land which exists in fragments and is poorly located for marina development due to
dredging issues.
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6.0 MANAGEMENT OPTIONS
To provide a framework for the evaluation of the management objectives, we have developed
criteria to assist Council's selection of one of the management options.
Evaluation Criteria
1. Financial sustainability
2. Health and safety liabilities
3. Environmental liabilities
4. Structural liabilities
5. Economic development potential
6. Staff time requirements
7. Public acceptance
A summary of the management options with the evaluation criteria are provided in a matrix table
at the end of this section.
For the management options where the municipality maintains an active harbour at Port Burwell,
it is suggested that a Harbour Corporation be established on the basis that the facility might be
operated more effectively if it was managed by those most knowledgeable and those with the
greatest interest in it. The Harbour Corporation would be a non-profit, locally controlled
organization consisting of a volunteer Board of Directors with strong links to both the fishing
industry and community. The Harbour Corporation would be assigned a small budget for
administrative costs and be responsible for day-to-day operation of the harbour facilities,
including management of all leases and maintenance contracts, and revenue collection. While
the Harbour Corporation would have little impact on the costs and revenues of the harbour,
managing Port Burwell uses up about three days of staff time per month which could be better
utilized on other municipal business.
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6.1 MUNICIPAL OWNERSHIP OF RECREATIONAL/PUBLIC HARBOUR SUPPORTED BY THE
TAX BASE
The draft Agreement in Principle considered by the Village indicated that the municipality would
have to operate Port Burwell as a"public harbour". However,there is no technical term to define
a"public harbour"in Canada. For the purpose of this management option we define it as a
harbour that is equipped and maintained to allow for the safe passage and berthing of a class or
classes of vessels. In other words, operating as a public harbour,the harbour would be
continuously dredged for keel boats, it would be well marked with navigation aids and the
municipality would feel comfortable marketing the marina to the broader Lake Erie community.
These conditions to do not exist at Port Burwell today.
This option assumes that Bayham would assume the role of SCH in providing public harbour
facilities in Port Burwell. To this end, the key issues for council's consideration:
• Ownership of the harbour would have a cost in excess of$75,200 required to
operate at is current level,to the municipality annually. Insuring the municipality
For a public harbour is an additional, unknown, cost;
• Ownership of the harbour would allow the municipality to have additional control
over the future of the harbour,however,the areas which have the most
development potential, are either owned by others or the municipality already
controls;
• Proper dredging of the channel may attract other businesses and allow existing
businesses to expand although we do not see any evidence that future growth can
come near to making the harbour financially self sustaining;
• The municipality could request a one-time cash contribution from SCH earmarked
to help offset the annual revenue shortfall at Port Burwell. An annuity of
approximately $745,000 generating 9%interest would be required to fund the
shortfall for 30 years. In addition, municipal priorities could shift and the
reallocation of this money to address another local issue may arise,negatively
impacting the harbour's ability to be financially sustainable;
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- Ownership of the harbour would help maintain the jobs and local spending which
benefit the local community;
- Ownership of the harbour would continue the existing level of tourist flow that is
generated from the existence of the harbour.
Given the need for dredging, its highly doubtful that the ability to maintain the harbour as public,
as requested by SCH in the draft agreement in principle is financial feasible.
Operating the harbour at its current service level is still costly ($75,200 annually, not including
municipal staff time). While the economic benefits of this investment are substantial,we believe
that they are spread widely in the region and not concentrated in the Municipality. Funding this
shortfall through a request for funding as part of the transfer is a potential solution. However, as
previously mentioned a fund such as this is established at the discretion of Council. As priorities
change,the funding could be redirected exposing future Councils to liabilities associated with the
Harbour.
In summary,the financial reasons for not accepting ownership under this management option
seem to outweigh the more nebulous advantages of control and future economic development.
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6.2 MUNICIPAL OWNERSHIP OF HARBOUR LANDS(BUT NOT MAINTAINED AS A PUBLIC
HARBOUR)SUPPORTED BY THE TAX BASE
This option envisions taking over the harbour lands with a view of allowing it to revert back to
its natural state. Central to this option is an understanding that the harbour is already at a balance
between the forces of sedimentation and flushing. While seasonal fluctuations are expected, in
general terms, sedimentation will not likely get much worse. This option also recognizes that
dredging of the harbour has been an issue since the inception of Port Burwell and will continue to
be an uphill challenge.
To this end the key issues for council's consideration:
This is effectively the approach to managing the harbour for the past 18 months.
No dredging has occurred except for private activities, little maintenance has been
undertaken and very little municipal intervention has occurred. Despite this,
businesses along the Big Otter seem to make do, servicing a small and localized
market;
A long period of drought and or low lake levels such as that experienced in 1999
could cause these businesses extreme hardship without dredging;
Annual costs of operation and maintenance of the marina would be offset by
existing revenue streams and subsidized by reallocation of some property tax
revenue. Since the marina is not being operated as a public harbour,the
maintenance costs and burden on the tax base would be minimal;
• While the O&M costs are reduced in taking this approach,the municipality will
have to accept the responsibility of liabilities associated with public safety;
Naturalization of the harbour could negatively impact the tourist traffic generated
from fishing but might be offset by an increase in eco tourism such as birding.
This option recognizes the harbour as a river mouth and the long terms problems that have been
associated with maintaining it as a public harbour. Managing the harbour in this manner risks the
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loss of several important businesses,however, under these conditions which currently prevail,
they seem to have managed. While asking very little of the municipality,this management option
still saddles the municipality with responsibility for issues such as public safety that very little
benefit can accrue from.
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6.3 Do NOT ACCEPT OWNERSHIP-ENCOURAGE SCH TO TRANSFER LANDS TO
MNRICONSERVATION AUTHORITY
From a cost-recovery perspective it is unlikely that Port Burwell will generate a sustainable
revenue stream in its current configuration and the municipality may be better off refusing
ownership of the SCH lands. However, SCH is mandated to divest itself of the property and the
municipality can suggest that the federal government pursue the Ministry of Natural
Resources/Conservation Authority to place the lands under the control of a more appropriate
government entity. Through the Conservation Authority, the lands remain under a form of local
control, and through the Ministry of Natural Resources, the lands could be linked up with Port
Burwell Provincial Park.
To this end the key issues for council's consideration:
• During the short-term,this approach maintains the status quo and the municipality
does not incur any additional liabilities. Bayham would not be responsible for the
upkeep of the piers, dockwalls or navigation devices and would have no
responsibilities for issues such as soil or sediment contamination,public safety or
property damage.
• Bayham gives up control of the harbour, and depending on MNR or Conservation
Authority management approach, the municipality may risk shut-down of the
facility and the negative impact to tax revenues, employment,tourism and local
businesses.
• If the municipality chooses not to acquire the lands, SCH has indicated that it
would attempt to market the property to private interests. It is likely that investors
may come forward to acquire the small portions of land available. However,the
development of these lands will be controlled by the Municipality through the
Planning Act.
• Although Bayham may not retain an interest in the federal lands and waterlot, it
could still work with investors to develop the harbour area with future owners and
partners.
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more creative solution is required to mitigate/improve the economic future of the
harbour;
• The market evidence suggests that a new public, full service marina could be
successful in Port Burwell with substantial positive impacts to local tourism;
• A new facility could potentially see the relocation of the businesses located along
the Big Otter Creek allowing for the strengthening of these operations through
improved facilities;
• The development of a new marina would allow for a new economic base for the
community providing the long-term benefits needed to make Port Burwell a
success;
• Dredging costs would still be incurred as part of general upkeep of the new
marina but at significantly reduced levels;
• Federal land is not required by the municipality to build a marina in the Outer
Harbour. However, in the interest of developing partnerships,the municipality
may consider accepting the SCH's lands and the liabilities associated with them,
in exchange for a contribution which could be applied towards a marina
development;
• The entire transaction would depend on the success of Bayham in achieving
funding from Ontario Super Build, Sports Culture and Tourism Initiative due to
be announced in October 2000;
• While the criteria for this $300m has not been announced, we have spoken to
Ministry representatives who have indicated that the marina project would have a
good probability of success, especially with partnership funding coming from
SCH; and,
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Chis approach will require extensive staff time and the time of Council,but has
the best chance of a long term sustainable answer to Port Burwell.
The suggested principles of the partnership agreement are as follows:
that SCH enter into a partnership agreement to work with the municipality to seek
public funding for the construction of new marina through the Ontario SuperBuild
program. This partnership will exist for the purposes of completing any necessary
design, marketing or financial work necessary developing applications to the
SuperBuild Program, exploring private partner interests, making joint
presentations and generally supporting one another in achieving provincial
funding for a new marina development;
the partnership will exist for 12 months renewable on the consent of each party;
the partnership will explore the development of eco tourism possibilities for the
Big Otter River and joint ventures with the Ministry of Natural Resources and or
the Long Point Conservation Authority;
that suitable compensation be provided to the municipality in
acknowledgment for the liabilities of accepting the federal lands and as a
partnership contribution;
that the transfer is subject to the completion of a Phase II Environmental
Audit conducted by SCH to the satisfaction of the Municipality;
that the Municipality not be required to maintain the existing harbour as a
Public Harbour and be able to set its own rates for leasing, berthage and
wharfage; and,
that failing the interest of SCH entering into this partnership that SCH be
advised that the Municipality of Bayham is not in a financial position to
assume the ownership of the Federal assets at Port Burwell.
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-0 RECOMMENDATIONS
Since the founding of the Port Burwell Harbour Company in 1833,the harbour has struggled to
establish itself in the face of the dynamic influences of the Big Otter Creek. The requirement for
dredging has always placed a costly surcharge to the economic development of the harbour. In
the early days of Port Burwell, the benefits of marine transportation to support the wood, coal
and rail sectors more than rationalized the costs of facility maintenance and dredging. However,
in the context of the year 2000, there is very little potential to generate the revenues needed to
keep the harbour operating as a"public harbour" in its present configuration.
However, in the face of serious dredging issues and declining local markets, a small but
significant industry has developed around the harbour in Port Burwell that is the source of over
35 full time equivalent jobs and provides important economic benefits to the regional economy
The transfer of ownership on its own will do nothing to resolve the long term financial and
economic issues at Port Burwell. The key question is whether municipal ownership of the
federal lands in Port Burwell can protect these jobs and economic wealth and help chart a course
for the future growth of the Village area. The Federal Government has been trying to make the
harbour work for over 30 years and has had no success. There is no reason why, based on the
current conditions, the municipality would have any greater success.
The true solution lies in the exploration of a new vision for Port Burwell and determining if a
long term solution can be developed that will protect the existing jobs and businesses, and
provide for a sustainable economic future.
We therefore recommend that the municipality discuss the potential of such a partnership with
SCH. If an arrangement cannot be made or if funding cannot be secured we do not believe that
the benefits of the ownership of the federal lands at Port Burwell support the costs associated
with its maintenance.
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7.0 APPENDIX A
7.1 TALISMAN ENERGY
Talisman Energy (formerly Pembina Resources) operates a pipeline welding and pulling
operation as part of its natural gas ventures on Lake Erie. It draws pipe across lands it subleases
from the municipality who lease it from 345990 Ontario Limited, through its own property,
through MNR property and into Lake Erie. In support of its pipeline activities, Talisman has two
tugs for ferrying workers to an offshore platform and as a dive vessel. Talisman's operation at
Port Burwell occurs predominantly between May to August and employs approximately 20 part-
time people in addition to providing work for some of the local tugs in of Port Burwell. To help
secure its access to Lake Erie, Talisman(Pembina)purchased its land parcel on Chatham Street
from the municipality in 1995. About$400 in assessment revenue accrues directly to the
municipality. There is a lease between Talisman and the municipality which permits the energy
company to extend pipe across the 345990 Ontario Limited property. A new lease agreement is
negotiated every year. The rent for this year's lease is $3,000. The economic benefit to the
Township is estimated as follows:
Jobs' 8
Employee Local Spending $12,820
Business Local Spending $122,093
Assessment $400
7.2 COMMERCIAL FISHERY
The commercial fishing industry at Port Burwell consists of berthing of commercial fishing
vessels and a small fish processing operation. The most well-known businesses in the industry
includes the Port Burwell Fish Company/Craiger's Cove (Gordon Craig) and the Martin family
operation which includes the "Southside II"tug and Martin Fish Market. During the peak fishing
season from April to October, Dan Minor indicated that approximately 10 to 12 fishing boats and
about 35 fisherman make use of the facility. The majority of the commercial fishing activities
2Jobs are estimated full-time equivalent employment
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occur on lands which are leased by the Township from 345990 Ontario Limited. As the lessee,
the municipality is billed back for property tax that 345990 Ontario Limited would otherwise
contribute to the tax base. $800 of assessment revenue comes from 345990 Ontario Limited
lands which are leased directly to business owners. The economic benefit to the Township is
estimated as follows:
Jobs 14
Employee Local Spending $22,435
Business Local Spending $213,663
Assessment $1300
7.3 RECREATIONAL BOATING
There are two private marinas in Port Burwell. Although transient users can be accommodated at
both marinas, the shallow draft limits access to only those boaters with familiarity of Port
Burwell and Big Otter Creek. Hence, the majority of the dockage at the marinas consist of
seasonal users. Big Otter Marina has 45 berths and includes campground facilities. Although
Big Otter is situated on land owned by the Conservation Authority, the marina is responsible for
the property tax of$1900. Bradcranex Inc. has 25 berths and offers services such as a boat
launch, small boat rentals, battery charging and 'convenience store' items. The assessment
revenue from Bradcranex's property is about $800.
Through a sublease to a local operator,the municipality runs a public dock consisting of berthage
for about ten vessels, a boat launch, and the sale of gasoline. The marina facilities include the
"Black Dock" situated on a Ministry of Natural Resources (M NR) waterlot which the
municipality is permitted to use until 2002 for an annual fee of$200. In 1997,the marina was
leased for$6,000 but due to the reduced traffic at Port Burwell,the rent was reduced to $2,500
beginning in 1998. The lease is a'flat-rate' and the municipality does not receive a portion of the
boat launch or docking fees collected during the season by the operator. No assessment revenue
is generated from the municipal marina.
Jobs 1
Employee Local Spending $1,925
Business Local Spending $18,315
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Assessment $2,700
7.4 FISH RESTAURANTS
The three restaurants on Robinson Street (Craiger's Cove, Mamma's Restaurant,the Fish Place)
are closely related to harbour activity. Craiger's Cove is directly affiliated with the Port Burwell
Fish Company since both are owned by the same individual. Discussions with the
owners/managers suggest that the success of these businesses depends very much on the
existence of the harbour. The commercial fishery supplies the restaurants with local seafood
which would otherwise be too expensive if brought in from Port Stanley. The attraction of the
waterfront also helps to bring in customers for the restaurants. The economic impact of the three
restaurants amounts to $3,300 in municipal assessment and about 25 jobs.
Jobs 10
Employee Local Spending $16,025
Business Local Spending $152,616
Assessment $3,300
7.5 BAIT SHOPS
The owner of Chappy's Bait Shop indicated that the traffic of recreational fisherman through Port
Burwell is important to their business. Their customer base is divided about equally between
users of the harbour and users of the provincial park. Kingfishers is the other major supplier of
fishing bait. These two business generate $1,500 in assessment revenue and employ about three
people.
Jobs 1
Employee Local Spending $1,925
Business Local Spending $18,315
Assessment $1500
7.6 ESTIMATION OF EMPLOYMENT IMPACTS
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In addition to the revenue generated from assessment,the impact of employment must be
considered. Based on our telephone discussions, approximately 86 full and part time positions
are created by businesses with direct and indirect dependence on the harbour. While we did not
complete a detailed survey we have estimated that this equates to the equivalent 35 full-time jobs
paying an annual salary of$30,000. The impact of local spending from employment income is
calculated as follows:
Total Gross Earnings: 35 employees x$30,000 $1,050,000
Assumptions: -reduce by 25%for taxes $787,500
-assume%of employees live in Bayham $393,750
-reduce by 30% for cost of housing
to determine employees' disposable income $275,625
Total Employment Impact(20% spent on local goods&services): $55,125
7.7 ESTIMATION OF IMPACT OF LOCAL BUSINESS EXPENDITURES
The impact of local business buying goods and services was extrapolated using our estimate of
employee wages, which can be considered proportional to other business expenses. Based on
1995 business expenditure averages from Statistics Canada we determined that general/other
expenses incurred by unincorporated business (ie., small business) are about twice that of the
cost of its employee salaries. The impact of local business spending in Port Burwell is therefore
calculated as follows:
Business Expense on Salaries $1,050,000
General/Other expenses (salaries x 2) $2,100,000
Total Impact of Business Spending $525,000
(assume 25% of general/other spent in local economy)
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