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BENEFIT-COST STUDY OF PINELLAS COUNTY
ARTIFICIAL REEFS
BY
Eila Hanni
University of South Florida
Heyward H. Matthews
St. Petersburg Junior College
Florida Sea Grant
Technical Paper
BENEFIT-COST STUDY OF PINELLAS COUNTY
ARTIFICIAL REEFS
BY
Eila Hanni
University of South Florida
Heyward H. Matthews
St. Petersburg Junior College
The information contained in this paper was
developed under the auspices of the Florida Sea Grant
College Program, with support from the NOAA Office of
Sea Grant, U.S. Department of Commerce, grant number
04-7-158-44046. This document is a Technical Paper
of the State University System of Florida Sea Grant
College Program, 2001 McCarty Hall, University of
Florida, Gainesville, FL 32611. Technical Papers
are duplicated in limited quantities for specialized
audiences requiring rapid access to information,
which may be unedited.
Technical Paper No. 1
May 2, 1977
TABLE OF CONTENTS
Page
INTRODUCTION....................................... 1
THE MODEL ......................................... 2
CONVENTIONAL DISPOSAL OF TIRES: The Short Run..... 7
LONG RUN BENEFITS OF TIRE DISPOSAL IN TOYTOWN...... 13
BUILDING AN ARTIFICIAL REEF WITH TIRES AND CULVERT:
The Short Run...................................... 14
Volume of Materials Handled........................ 16
The Physical Facilities and Equipment.............. 17
Estimating Fixed Costs ........................... 19
Estimating Variable Costs.......................... 20
Costs of Creating a M of Reef Bottom............... 21
LONG RUN COSTS AND PRODUCTIVITY OF THE CLEARWATER
ARTIFICIAL REEF..................................... 22
Project'?d Costs of Reef Building ................... 22
Productivity of the Reef ........................... 25
Fish Habitat Generation............................ 26
Fish Counts.............. ....................... 28
POTENTIAL BENEFITS TO ANGLERS AND DIVERS............ 3.
Sunday Anglers ................. ................... 31
Sports Anglers ..................................... 34
Divers..................... ........................... 36
Shark Anglers ...................................... 39
Optimum Reef Size.................................. 39
CONCLUSIONS AND RECOMMENDATIONS FOR FURTHER STUDY.. 41
PREFACE
This investigation was carried out in conjunction with a cooperative
investigation of biological, political and socioeconomic aspects of the
Clearwater Artificial Reef. The project is headed by F. T. Manheim
and H. Mathews and is jointly sponsored by Florida State University
System Sea Grant and Pinellas County.
The authors wish to thank the participating agencies for a great
deal of time and effort spent in providing data and explaining the mode
of operation relevant for this study. Special thanks go to Jim Shinholscr,
Director of Mosquito Control, and Connie Fernandez, of the office staff,
without whose help this report could not have been undertaken. David H.
M. Holihan, Chief of Sanitation Disposal for the City of St. Petersburg,
guided the authors through the intricacies of Toytown operations in
general and tire burial in particular. William Burchfield, Harbor Master
at the Clearwater Marina, was of great help in providing insights into
fishing operations in the Tampa Bay area. The barge captain and crew
were consulted numerous times on technicalities of transporting reef
materials. Rhonda Shaffer produced most of the final typescript.
Two graduate assistants, Don Schug from Marine Science, and Clifford
Mangano from Economics, helped a great deal in data collection and cal-
culations. The various versions of the paper were ably criticized by
F. T. Manheim, John C. Briggs and Don Schug. But naturally, the re-
sponsibility for any remaining errors and shortcomings rests with the
authors.
E. A. H.
H. M.
INTRODUCTION
Used tires are commonly thought to have few economic uses. In fact,
until recently, most communities merely hauled their tires to the dumps to
be buried along with other garbage and they were thought to represent just another
cost attached to the modern motorized way of life. But old tires do have
alternative uses. Experiments have been carried out in Pennsylvania to
separate rubber from the tire base and to recycle the rubber. Old tires are
seen as building blocks in fashionable patio gardens and on children's play-
grounds. Until new air pollution regulations came into effect, tires were
also burned in orange groves to prevent a freeze. Of particular interest in
this study, tires are now used to build artificial reefs to attract algae,
corals, and sponges along with fish and crustaceans that provide recreational
angling and diving.
A preliminary analysis of tire disposal in the Tampa Bay area revealed
that locally there are two principal ways of disposing of tires. They are
dumped in public disposal grounds, such as Toytown in St. Petersburg, and
provide filled land for future public parks. Or they are transported to previously
barren sand bottom locations in the Gulf of Mexico to provide favored habitat for
fishes and other kinds of marine life. The present study is designed to
assess the benefits and costs associated with these two ways of converting
old tires into public goods.
In general, a public project is deemed beneficial and worth undertaking if
the present value of its estimated benefits exceed the costs, and the necessary
resources to invest in the project are forthcoming. A choice between several alter-
native projects to be undertaken with limited or fixed resources falls upon the
project whose benefit-cost ratio is the highest.
The traditional way of disposing of tires in landfills creates benefits
that may or may not be deemed sufficient to cover the disposal costs. Few,
-2-
if any, figures have been produced on the benefit-cost ratios of dumps
taking into account their suitable long-term end uses, such as parks.
For example, it takes an old city resident or an expert in the history of
garbage disposal in St. Petersburg to know that the Woodlawn Recreational
Complex on 16th Street North, bounded by 13th and 17th Avenues, was an old
city dump. Nobody has estimated the ultimate benefits and costs.
The first task, then, is to study the dumps. To that effect, a short
term and long term analysis of the Toytown sanitary landfill will be under-
taken. In the short run the output of the landfill is tons of garbage buried.
In the long run, garbage becomes an input into the production of acres of
filled land. Appropriate demand and supply schedules will constitute the
framework in terms of which the actual production, benefit, and cost figures
will be evaluated.
The new way of tire disposal generates ocean bottom covered by tires
(also by culvert and concrete rubble) and surface areas for marine animals
to feed on and enjoy shelter. The ultimate benefits consist of personhours
of fishing and diving generated by the reef. In this study, the benefits and
costs of the Clearwater Reef will be assessed, since this project has the
best data history. In the short run the output of the reef operations is
tons of tires and culvert dropped on the ocean bottom. In the long run, these
serve as inputs into the production of personhours of fishing and diving.
Again appropriate demand and supply schedules will be developed to provide the
framework for the quantitative assessment of production, benefits, and costs.
The general model in whose terms benefits and costs will be assessed
will be briefly outlined next.
THE MODEL
A general model is adopted here which will allow tle estimation of actual
and potential benefits and costs; even though the outputs of the alternative
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projects are subject to different pricing policies in the short and long run
and vary by the type of project.
As regards Toytown, in the short run an unlimited volume of disposal
services will be offered to county residents at a fixed price calculated
to cover costs. From an analytical point of view, the market can be charac-
terized by a frequently shifting vertical demand schedule for disposal and
by a normally shaped average cost schedule with equilibrium occurring where
the demand schedule intersects theaverage cost schedule. This pattern is
illustrated in Figure 1.
P !
\ D2
Figure 1 TC'
"--_ATC'
TC
q
The long term output of filled land appears to sell appreciably below
the marginal cost of filling land with garbage, as indicated by sales data
on similar filled land adjacent to the dump. This configuration is illustrated
in Figure 2.
Price LMC
Figure 2 price L
per
acre LATC
PO -
acres of land generated
As regards the Clearwater Artificial Reef, the demand for it as a disposal
site in the short run is passive, derived demand that does not depend on price,
and the quantity supplied is a function of costs, given a limited, although
not completely fixed budget. Demand schedule is vertical at the quantity
supplied. .Price is indeterminate. See Figure 3.
-4-
D
Price \ /MC
Figure 3 Prie
per ,
M2 \
S. ATC
M2 of ocean bottom generated
The long term output of personhours of fishing and diving is provided
to a segmented market free of user charges but subject to various trans-
portation and equipment costs to be borne by the beneficiaries. Costs are
determined by the short run costs of dropping the materials plus the long
run productivity of the reef. Figure 4 illustrates this case.
Price
per
Figure 4 day
day MC
3 DT
personhours of fishing
Both long run cases represent underpricing cases. It has been recently
argued1 that evaluative criteria that rely on marginal cost pricing in the
case of underpriced public products do not lead to efficient resource
allocation. A consistency between evaluation criteria and pricing criteria
is needed. To this effect a model of efficient resource allocation in the
case of underpriced public products is adopted here. It is based on models
1G. E. Mumy and S. H. Hanke, "Public Investment Criteria for Underpriced
Public Products", American Economic Review, Sept. 1975, pp. 712-719.
-5-
developed by Mumy and Hanke, and elaborated by Miller. A summary is
presented below.
Price maximum willingness to pay
Figure 5 per
unit marginal willingness to pay schedule
marginal cost of capacity schedule
P1 average willingness to pay
Pm I maximum quantity demanded at
P2 f / I- price Pm
0 Q* quantity per year
Since price is not used as an allocator of demand, it is assumed that
each consumption unit has an equal probability of being satisfied, and, thus,
satisfaction probability is not a function of the willingness to pay, by and
large. In the case of reefs and parks, delivery would presumably be on the
first come, first serve basis. Expected gross benefits are not necessarily
equal to the area under the demand curve but the product of the average demand
price over the quantities from zero to the number of demanded consumption
units satisfied and the quantity purchased. Costs are the area under the
marginal cost of capacity curve up to the quantity provided (and purchased).
Optimum capacity is reached, when average demand price equals marginal cost
of capacity.2
3
Following Miller's recommendations judgmental demand curves will be
developed to calculate the average willingness to pay. The demand curves
are assumed to be linear. Virtually no user demand is assumed to exist when
J. R. Miller, "On the Use of Unit Day Values in the Evaulation of Site-
Specific, Water-Based Recreation Benefits". A paper presented at the Southern
Economic Association Meetings in Atlanta, Nov. 1976. 18 pp.
Mumy and Hanke, op. cit., pp. 714-716.
Miller, op. cit., pp. 8-9. Operating costs are assumed to be zero. That
is a good ;!i';roximation in the cases on hand; see pp. 39.
-6-
the price of a service reaches the range of a more expensive substitute.
Thus, in the case of Sunday anglers, for example, who normally either fish
in their own small boats or utilize party boats, hiring a charter boat is
assumed to represent such a high priced alternative. In the case of Toytown
land, it is adjacent, distinctly superior but still non-residential land.
Demand is at its maximum when fishing and diving sites are physically so
crowded every day when weather is good enough that those who come last have
no room either to fish or to dive. For Toytown, a second point on the demand
schedule will be established on the basis of quantities of similar land
currently sold. The marginal cost of capacity is the increase in total costs
due to the expansion of public product capacity by one unit, in the present
case one acre of land or one M2 of ocean bottom. These long run marginal cost
curves will be developed from budget data and from data on imputed cost compo-
nents secured from other sources. Zero operating costs are assumed.
Figure 5 depicts a situation where Q* is the equilibrium quantity of the
product. Benefits to consumers equal the area OplAQ* and the associated costs
are P2AQ*O. Benefit-cost ratio exceeds one. A greater quantity is produced
than would be suggested by the (inefficient) marginal cost pricing principle.
Less would be produced if the marginal cost of capacity schedule intersected
the average willingness to pay line to the left of the demand schedule,
even though the benefit-cost ratio would still be above one. If the marginal
cost of capacity schedule in its entirety lies above the average willingness
to pay line, costs would exceed benefits and the project would not be under-
taken at all.
The above analytical framework will be applied to calculation of actual
benefit-cost ratios of the two ways of disposing of tires, landfill and
artificial reef. Included in the costs are the usual private cost components
-7-
that any business firm would incur. But since some of the resources were
secured at below opportunity cost eitherr below market prices or free),
imputation was utilized to arrive at the full costs. The conventional
breakdown of costs into fixed costs and variable costs was utilized.
CONVENTIONAL DISPOSAL OF TIRES: The Short Run
The primary disposal site of old tires in Pinellas County is the
Toytown landfill, although tires are still accepted, albeit reluctantly,
also in the County dump, Largo and Clearwater dumps. Companies that dispose
of tires in significant numbers know that they should be brought to Toytown;
they bear the cost of hauling tires to disposal sites. The county charges
its dump users a flat rate of $4.00 a ton no matter what the composition of
the garbage. Since the county can designate the disposal sites, the users
must bear whatever the costs of hauling tires to public disposal sites are,
unless they_find private uses at lower costs.
The present cost of operating the Toytown dump (exclusive of research and de-
velopment expenditures) is $3.00 a ton (on the average).2 Large quantities of tires
brought to the dump during the last two years have been piled up outside and they
await shipment to the Artificial Reef. Only tires that cannot be readily separated
from other garbage are still buried. It is estimated that the current stock amounts
to 40,000 tires, whereas the total number transported to the reef from the entire
county since spring 1974 is 122,000. The total accumulation converts to roughly
730 tons a year, which represents only 0.2 percent of the annual 330,000 ton utiliza-
tion of the Toytown dump; which in turn represents 60 percent of the tonnage of all
the county dumps. A more systematic separation and accounting for tires shipped to
The minimum charge is $2.00 per one half ton.
"See Table 2, p. 12.
the reefs will probably double this figure. A study by the Tampa Bay Regional Plan-
ning Councill estimated that in 1974, 480,000 passenger car tires were discarded in
2
Pinellas County. At 18 pounds per tire, and with a 10% allowance for reuse2, about
3,800 tons of garbage is generated. If 90 percent of these were brought to Toytown,
they would represent 1.1 percent of its annual disposal volume. A conservative
figure of 0.5 percent is used here.
These figures, together with a detailed breakdown of the various costs
associated with the Toytown landfill operation, allow the estimation of the
total and marginal costs of dumping tires in the landfill. Annual data will
be used. To obtain the aggregate costs, annual figures since 1969/70 fiscal
year will be analyzed. Phase I of Toytown will end November 1977 at which
time the conversion to a park will begin. This phase consists of 165 acres.
Phase II 70 acres is estimated to end in December 1981. If resource
recovery, such as extensive use of grinding machines, comes earlier, the dump
may also close earlier. Here costs and benefits up to fiscal year 1980/81
will be considered.
Costs will be analyzed in three categories: land, other fixed costs,
and variable costs. The fixed costs of the land fill consist of the imputed
rental value of the 235 acres, in their initial condition at the time
Toytown landfill was opened. Toytown opened in 1959, originally as a disposal
site for brush and building materials. It was converted into a full-scale
sanitary landfill in 1969. This study estimates land values since 1969.
Tampa Bay Regional Planning Council, Tampna Bay Area-Wide Solid Waste
Mana cement and Resource Recovery St Idy Phase 11. Technical and Management
Report, St, Petersburg, Florida, February 1976, pp. 63, 74.
2Not all tires end up at the dump. Some 10% are roused. R. B. Stone,
C. C. Buchanan, and F. W. Steinle, Jr., Scrajp Tires as Artificial Reefs,
U. S. Environmental Protection Agency, SW-.119, 1974, p. 2.
-9-
Since Toytown is on county land, the imputed value of land was arrived
at by obtaining the cost of similar, adjacent private land. According to
records of real estate sales of similar land, kept in the Tax Assessor's
Office, the 1969 value was estimated at $1,650 an acre. This land, without
any further improvements, increased at an annual rate of 35 per cent between
1969 and 1974.1
Thus the initial imputed cost of land in 1969 was $387,750 for 235
acres. If the land had simply been held, instead of being converted into a
land fill, and had been sold in 1974, its value would have been $1,738,684.
The value of the land in intervening years was obtained by loglinear inter-
polation. A nine per cent return on land was imputed as the rental cost.
However, additional expenditures were incurred when the land was "improved"
by adding garbage'to it. These expenditures were divided into fixed costs and
variable costs. Fixed costs in the short run consist of the depreciation
of the machinery, contractual maintenance costs, insurance costs, administra-
tive costs, environmental control costs, such as water measurements, overhead
personnel costs, i.e., expenditures on equipment and personnel that would be
incurred in a budget year even if there was a drastic decline in the dumping
volume. Variable costs equal total costs minus fixed costs, and consist
mostly of labor costs and fuel costs. Since the city had repair contracts
on most of the landfill equipment, variable costs consist largely of labor
Based on a sale of a 40 acre piece 200 yards from Toytown in 1969.
The same piece was resold in 1974.
2
The City of St. Petersburg depreciated its equipment on a straight
line and original cost basis except in 1974/75 and 1975/76 when estimated
current costs were used.
- 10 -
costs. Marginal costs represent the cost of disposing each additional ton
of garbage or the change in variable costs per unit of output. Since prac-
tically no overtime labor or part-time employees were used, marginal costs
are equal to average costs.
The history of the three principal categories of costs for the Toytown
landfill operation was traced and estimates prepared of their likely future
values. Apart from the rental costs of land already discussed, budget figures
were available for all components except that the costs of incinerator
operations excluded in 1969/70 had to be estimated (they were available for
1970/71). Current costs were converted into constant 1974 costs by utilizing
the aggregate price index of service costs and the unit costs of full-time
labor paid out of the Sanitation Fund of the City of St. Petersburg in the
relevant years.
The costs were projected to 1980/81 on the following conservative
growth assumptions. Value of fixed costs will increase 15 per cent a year,
while the service price index will increase by 8 per cent. Labor costs will
increase by 10 per cent a year, of which 7 per cent represents wage increases.
Land prices will increase only 9 per cent a year. When Phase I closes at
the end of 1976/77 fiscal year, imputed land rental goes down by 70 per cent,
but other costs are not affected.
The results of these calculations are given in Table 1. The per ton
costs are given in Table 2.
These calculations yield costs per ton that average $2.51 over the life
of the dump. The conservative cost estimates projected for 1976/77 1980/81
produce declining costs per ton, whereas up to 1975/76 per ton costs increased
in every year except 1970/71 and 1972/73. These costs underestimate the
ultimate costs of garbage disposal also, for another reason. The dump requires
TABLE 1. ANNUAL COSTS OF TOYTOWN SANITARY LANDFILL OPERATIONS
3 4
FIXED COSTS, excl. LAND LABOR COSTS LAND "RENTAL" TOTAL COSTS
Fiscal Current Price In Constant Current Price In Constant Imputed Price In Constant Current Price In Constant
Year Value Index Prices Value Index Prices Rent' Index Prices Price Index Prices
1969/701 $284,898 79.9 $285,970 $ 80,415 58.9 $136,528 $ 34,897 30.1 $156,481 $255,312 54.5 $578,979
1970/711 143.110 84.4 169.560 116.934 61.3 190.757 47.112 40.6 156.481 307.156 59.4 516,798
1971/72 256,134 87.6 292,390 114,866 70.0 206,951 63,600 54.9 156,481 464,600 70.8 655,822
1972/732 229,865 91.5 251,220 213,734 77.9 274.370 85,861 74.1 156,481 529,460 77.6 682.071
2
1973/74 348.144 100.0 348,144 232,896 100.0 232,896 115.912 100.0 156.481 696,952 94.5 737,521
1974/752 400,132 109.5 365,417 277.950 102.2 271,967 156,481 109.0 156,481 834.563 105.1 793.865
1975/762 569.685 118.2 481,967 378,342 114,1 331,588 170.565 118.8 156.481 1,118,592 115.4 970,036
1976/77 655,138 127.7 513,029 412.176 120.3 342,623 185.916 129.5 156,481 1,253.230 123.9 1.012.133
1977/78 753,408 137.9 546.344 449,394 124.2 361,831 60.644 141.2 43.000 1,263,446 132.8 951,175
1978/79 866,420 148.9 581,880 490,333 128,2 382.475 66,266 153.9 43,000 1,423,619 141.3 1,007,355
1979/80 996,383 160.8 619,641 545,366 132.3 412,219 72.230 167.7 43,000 1,603,980 149.2 1,074,860
1980/81 1,145.840 173.7 659,666 584,903 136.7 427.873 78,730 182.8 43.000 1,809,473 160.0 1.130.539
1
Excludes incinerator costs, includes costs of operating the compost and the open dump.
2
Excludes costs of recycling operations.
3127 of the entire budget added as administrative and insurance costs.
4Includes the wages of Emergency Jobs personnel assigned to the landfill in 1975/76 and
Source: Annual Budgets of the City of St. Petersburg.
assumed to continue.
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TABLE 2. TOTAL DISPOSAL COSTS PER TON
IN 1974 PRICES
Costs per E
Total Costs Tonnage Ton B
1969/70
1970/71
1971/72
1972/73
1973/74
1974/75
1975/76
1976/77
1977/78
1978/79
1979/80
1980/81
"Scrap value" of
land in 1977
Aggregate Costs
$ 578,979
516,798
655,822
682,071
737,521
793,865
970,036
1,012,133
951,175
1,007,355
1,074,860
1,130,539
$10,111,154
297,635
$10,408,789
156,300
250,369
286,040
322,695
314,305
313,486
325,661
360,000
400,000
434,000
471,000
511,000
4,144,856
$3.70
2.06
2.29
2.11
2.35
2.53
2.98
2.81
2.38
2.32
2.28
2.21
2.51
estimated Tire
urial Costs
$ 3,184
2,842
3,607
3,750
4,057
4,370
5,335
5,567
5,232
5,541
5,911
6,218
$56,614
1,488
$57,102
continuous maintenance even after it is closed because of odor problems, rodent
problems, methane gas problems and mosquito breeding problems. The costs of
burying tires are above average for two reasons. When there are hoavy rainfalls
that wash away sand, all materials but especially tires have to be covered
up a second time. In 1974, these additional costs were estimated to represent
about 13 per cent of the variable costs. The costs of tire burial are also
higher than those of other garbage because tires work their way up to the top
of the fills far easier than any other components and need to be covered more
than once even in the absence of heavy rainfalls. Tires also produce a "spotugv"
land surface in later years. A 10 per cent adjustment was made to the unit
costs on account of these factors.
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LONG-RUN BENEFITS AND COSTS OF TIRE DISPOSAL IN TOYTOWN
Tires were assumed to represent 0.5% of the annual tonnage at Toytown.
If tires had continued to be buried there, these costs would thus have
increased from about $2,600 in 1969/70 to $6,200 in 1980/81 yielding an
aggregate cost figure of $57,102.
Assuming an interest rate of seven per cent the 1969/70-72/73 tire
burial expenditures were compounded at that annual rate and the 1974/75-80/81
expenditures were discounted at the same rate to arrive at the 1974 present
value of all expenditures on tires. They came to a total of $50,177. Since
the tire tonnage handled was estimated at 19,800, this yields a present value
cost of $2.53 per ton on tires. Assuming tires weigh 18 lbs. each, this
represents 2.2 million tires, a cost of two cents per tire.
Tire volume and weight remain the same for an indefinite time, whereas
other types of refuse would probably be reduced by 50% in weight and volume
in 10 years.2 Therefore, tire volume at the closing of the dump was assumed
to represent twice as high a percentage of total volume as at dumping time,
or 1.0 per cent of the total of 235 acres, or 1.70 acres in 1976/77 and .70
acres in 1980/81. The alternative cost principle was utilized to estimate
the benefits of this land. This kind of filled land now exists near the land
fill and currently sells anywhere from $800 to $1500 an acre and has, for all
3
intents and purposes, not changed in value since 1952. Most of this filled
land dates back to the land boom of the 1920s and the subsequent depression in
which the county acquired the land in tax foreclosures. /
This rate is approximately what has recently been recommended for the
evaluation of Federal public projects.
2
Estimated; by D. M. M. Holihan, Chief of Sanitation Disposal in St.
Pet ersburg.
3Mr. Bumiller, County Engineering Office, estimated that lots of 2 to 5
acres have been selling for $200 to $400 since 1952. These lots have no access;
neither would the closed dump.
- 14 -
All sales of such land in the area for the last three years were surveyed
to estimate that 6.5 acres is the quantity demanded annually at the market
price of $1,400 per acre. This information was utilized to establish one point
on the judgmental demand schedule. The highest price considered acceptable to
the buyers was set equal to $6,000, the price of distinctly superior land in
Evergreen Acres that was still not good enough to erect any type of permanent
structure (none.can be erected on the filled dump land). 2.4 acres were thus
estimated to confer total benefits of $3,964.
The benefit-cost ratio is thus $3,964/50,177 or 0.079. Clearly, tires
should not be buried if there are any more economical methods of disposing of
them.
BUILDING AN ARTIFICIAL REEF WITH TIRES AND CULVERT: The Short Run
Pinellas County entered a new phase of service activity in March 1974
when it assumed responsibility for reef building in the adjacent coastal
waters. The City of Clearwater had been engaged in the same activity on ;i
smaller scale for about two years previously. But in Spring 1974 a large
barge was purchased jointly by the county and eight coastal cities. The City
of Clearwater had been building the Clearwater Reef about 3 miles off Clear-
water Beach. This site was the first target of the county project also, but
in subsequent years other sites have been developed from Tarpon Springs to
St. Pete Beach and into Tampa Bay. These reef sites are located off the
main municipalities of Pinellas County on sand bottoms that were formerly
barren of productive marine life. The enclosed map shows all the act un and
planned locations to date.
The project was assigned to the Mosquito Control Division as a separate
activity, although the funds came initially from the General Fund of the county.
In subsequent years the project has had a budget of its own, but ; substantial
x KEY
S AR I IF ICIAI. It[ E LOCA 1011
A CHANNEL MARKER LOCATION
SANCLOTE ANCHORAGE
Soutlh Entlrace Marker I
IIURRICANE PASS
Entrance Mrker 2
O DUNEDIN PA'S Entrance
SCLEARWATER PASS
Ertrance Bell Marker 1
JOHNS PASS
Entrance Marker (JP)
O PASS-A-GIIILLE CHANNEL I
Entrance Marker buoy 2
Ssr. PETERn RURG MUNICIPAL PIER
All settings are in magnetic degrees.
All distances are in nautical miles.
RUBE ALLEN
(PINELLAS
NUMBER 11
REEF
INDIAN
SHORES
REEF
MADEIRA
BEACH
REEF
N
I 0 I 2 3
NAAUTICAL MitllS
ARTIFICIAL
LOCATION
REEF
MAP
1ARPON
SPRINGS
DUNEDIN
REEF
BEACH REEF
nm
- 16 -
amount of resources has been drawn from other county government agencies.
The present study will attempt to analyze all the costs incurred to obtain
costs per square meter of ocean bottom covered.
Volume of Materials Handled
When the Reef project was initiated by the City of Clearwater, only tires
were used as the building material. At first, individual tires were laid,
but soon a bundle of four tires became -he standard unit. More recently,
tires have been split and bundled to stacks of 30 split tires in each one of
the two forks of a forklift, and, further, three of these loads tied together
to a 6 times 30 split halves per drop. Concrete culvert was not dropped until
when the county took over the project. At that time concrete culvert had become
available from local construction projects. Concrete rubble came from tlir'e so
old Gandy Bridge, the old Corey Causeway Bridge and the old Courtncy Campbell
Bridge. The Clearwater Reef was the destination of rubble from the Courtney Camp
bell Causeway Bridge. In addition, some construction companies made occasional
donations to the county of old pipe and culvert for the reef. Such donations
qualify as bona fide charitable contributions and are tax deductible.
Overall the following quantities of materials have been hauled to the
different reefs.]
TABLE 3. QUANTITIES OF TIRES AND PIPE HAULED TO THE REEFS
Fiscal Tires, Concrete Pipe, Steel Pipe,
Year Number Tons Tons
1973/74 5,7982 31 30
1974/75 42,796 1665 32
1975/76 74,173 1756 28
Source: Budget Preparation Data, Mosquito Control
1Unfortunately, the rubble was so widely scattered at the sea bottom as to
be of little value as shelter for aquatic life.
2About 72,000-tire,- deposited before the county program started.
- '17 -
The Physical Facilities and EcuipRment
As soon as the decision was made to acquire a barge for transporting tires
and other materials off shore to the reef, no more tires were buried in the
Toytown or other sanitary landfills of the county. Three areas have been set
aside for accumulating the tires and culvert: an acre site at the entrance
to Toytown landfill, established in 1974; a 75' x 300' staging area in Clearwater
behind the Seminole Street boat launch site, originally established by the City
of Clearwater in 1972 and leased to Pinellas county in 1974; and a 75' x 265'
staging area in the Southwest corner of the Corey Causeway to St. Petersburg
Beach right behind the St. Petersburg municipal water treatment plant, established
in Fall 1975.
The two staging sites receive tires, culvert and concrete rubble not only
from the various dumps but also directly from interested individuals, companies,
and public agencies. A barge was acquired for transporting the materials.
Initially, materials were loaded onto the barge exclusively from the Clearwater
staging area. In Fall 1975, a new dock of 10 ton capacity was built at the
St. Pete site and it now offers considerably better facilities. A major
advantage is deep enough water so that loading does not have to await a high
tide as in Clearwater. The barge is berthed at the Clearwater Marina and
usually makes one-day trips to the Clearwater site. When taking materials
from the St. Pete site, the barge is berthed at the dock, making one trip a
day. It takes longer to load tires at the St. Pete site because of the
-limitations of dock space; at the Clearwater site, the entire seawall serves
as a loading area. There is no appreciable difference on loading times for culvert.
1Under ideal tide and weather conditions, only one trip in a 10 hour day is
possible trom tie ulearwater site to the nearest reef, the Clearwater reef. A round-
trip to Clearwater Reef takes 2.5 hours, plus fuel and salaries. An average roundtrip
to all reefs takes 4.5 hours. Trips from tne South staging area require longer travel
and loading times, exclusive of loading and unloading, which takes another 3 hours
and tne total costs come to $180.
- 18 -
At each one of these sites, tires are either punched or split, and
bundled ready for lifting into the barge. Up until Fall 1974, punching was
used exclusively. Punching holes in the tires takes longer, and the bundles
require ballast; split tires require no ballast. Splitting enables more
concise packing of the tires and thus easier transportation. Punching is
now used as a back-up system only. The normal rate of splitting is about
500-600 tires per day per machine, although 800 a day could be reached with
better utilization of equipment and more efficient labor. (In fact, the
manufacturer claims a capacity of 125 tires per hour.) The punching rate is
700 a day.
The tires and culvert are loaded with a large crane aboard the barge from
the two staging sites. Mosquito Control provided the crane in spring 1974 from its
surplus stock. It was fully depreciated and no longer served a useful purpose as a
piece of mobile equipment at Mosquito Control because of the poor condition of its
undercarriage. But in stationary use on the barge maintenance costs are acceptable.
Other equipment besides tire splitters and a tire punch, includes two fork lifts
for moving the tire bundles in the staging areas, a Lo-Boy heavy duty vehicle for
transporting culvert, one truck for moving the tires from Toytown to the other
sites, and one pick-up truck.1 Most tires are still delivered to Toytown, although
some dealers and salvage companies are delivering them directly to the staging sites.
They are offered an incentive to do this: unlike delivering to Toytown, there is-
no service charge per ton.
The barge itself is equipped with two 150 horsepower engines and
complete navigational equipment. Its capacity is 68 short tons, net. Average
load in seas of less than four feet is 34-40 tons of tires; culvert can be
Some small tools and equipment are also included in variable costs.
- 19 -
carried only iu seas of less than three feet. In addition, there is a consid-
erable amount of diving equipment aboard for use in delivery, reef sight
surveys and maintenance.
Estimating Fixed Costs
Fixed costs consist of two categories: the wear and tear of equipment
over time as measured by depreciation, and other costs not related to the
volume of operations, mainly overhead labor costs, insurance, land rental
and office expenses. In cases where the Artificial Reef Project purchased
equipment, expert estimates of the life of each piece of equipment were
obtained and depreciation schedules were established on a straight line and
original cost basis. In the case of rented equipment or equipment carried in other
than the basic budgets, similar information was gathered. If rental charges were
judged not to reflect the full costs, imputation was resorted to. Purchase
price and life of similar equipment or sites were used to represent the
opportunity cost concerned. The following figures were obtained.2
TABLE 4. FIXED COSTS OF ARTIFICIAL REEF CONSTRUCTION
1973/74 1974/75 1975/76
Barge $ 2,143 $ 2,143 $ 2,143
Docks 1,452 1,452 2,290
Equipment on barge 460 559 599
Sites 7,413 7,642 14,694
Heavy equipment 208 743 3,252
Tire cutting equipment -- 348 660
Diving equipment 138 328 393
Overhead labor costs 13,590 13,905 11,390
Insurance 1,790 1,990 2,115
Telephone fixed charge 138 331 662
Total 27,332 29,441 38,198
Of which: in other budgets 9.646 10,904 11,999
imputed 11,998 12,098 16,466
Artificial Reef Budget 5,688 6.439 9,733
None of the equipment is on service contract, unlike Toytown equipment.
The annual capital expenditures from which these fixed costs are allocated
areI listed in Table 8, p. 24.
- 20 -
It appears that a relatively small portion of the fixed costs of the
Artificial Reef Project are found in the Reef Budget itself. Many of the
equipment costs and overhead labor costs are in other budgets, whereas no
rental was paid for most of the sites and a rental cost of nine per cent of
the estimated 1974 value of the sites was imputed. Sites, labor, insurance
and telephone fixed costs are calculated in 1974 prices; capital equipment
costs are not so adjusted, but most of them were actually purchased in 1974.
Estimated Variable Costs
Variable costs consist mainly of equipment maintenance and operation, and
labor costs. The major maintenance of the equipment was provided by the motor
pool and the dry dock at what appear to be close to market prices. They
charged for materials and labor. Mileage charges on rented equipment fell
considerably short of the average running costs per mile by equipment category
as estimated by the county. Therefore, the latter were used as imputed values.
Detailed operating costs were available for all purchased equipment; estimates
from other budgets were obtained for rented equipment.
Labor costs cover personnel budgeted by a number of different departments:
the Department of Mosquito Control, the Artificial Reef Project, and Emergency Jobs
Program. Mosquito Control personnel initially operated the tire cutter at Toytown,
the tire trucks and the dragline for the barge. Since Fall 1975, Emergency
Jobs personnel, funded by the Federal Government, have taken over the duties
of preparing the tires and operating a truck. A total of seven is currently
employed. Only the rest of the personnel, especially the barge operator and
three divers are paid out of the budget of the Artif.icial Reef pr-oper.
This figure could be improved by estimating appreciation of land since
1974.
- 21 -
TABLE 5. VARIABLE COSTS OF ARTIFICIAL REEF CONSTRUCTION
1973/74 1974/75 1975/76
Wages (incl. fringe benefits), contract
services, commissions and fees 1 $13,359 $57,768 $107,884
Supplies, small tools and communications 1,371 4,086 6,645
Travel 2,997 -- 245
Equipment maintenance & operation 7,619 20,615 26,224
Total 25,346 82,465 140,992
Of which: in other budgets 3,772 33,557 77,401
imputed -
Artificial Reef Budget 21,574 48,912 63,597
In 1974 prices 25,346 80,690 123,569
Costs of Creating a M2 of Reef Bottom
The simplest short run output measure of reef construction is taken to
be M2 of Reef bottom covered by tires, culvert and other reef material.2
Accordingly, unit cost figures given in Table 6 were obtained.
TABLE 6. AVERAGE AND MARGINAL COSTS OF REEF BOTTOM GENERATION PER M2
CLEARWATER REEF, CONSTANT PRICES
M2 of
Reef Bottom Total Average Total Marginal Costs
Generated Costs Costs per M2 Per M2
1973/74 923 52,678 57.07 26.56
1974/75 2,963 106,859 36.06 18.78
1975/76 5,928 162,535 27.42 26.93
1976/77 7,257 198,319 27.33
If punched tires had been the sole source of reef materials, or if split tires
only had been used, and the costs of dropping each type of treated tire are assumed
identical, then the entire annual reef generation would have required the following
quantities of "raw" tires and would have resulted in unit costs shown in Table 7.
1No adjustment was made for free telephone calls to Tampa.
2For a fuller discussion, see the section on Fish Habitat Generation, pp. 25-26.
- 22 -
TABLE 7. THEORETICAL VALUE ADDED PER TIRE TAKEN TO REEF
2
M of Bottom Punched Split Costs per
Fiscal Year Generated Tires Tires Punched Tire Split Tire
1973/74 923 6,052 19,229 8.70 2.74
1974/75 2,963 19,430 61,729 5.50 1.73
1975/76 5,928 38,872 123,500 4.18 1.32
The alternative cost of the disposal--burying tires in the Toytown dump--is
about two cents per tire.3 It is thus obvious that whether punched or split tires are
used, tire "burial" in the artificial reef brings costs of an entirely different
order of magnitude. If reefs are to be preferred, they will have to demonstrate
benefits as fishing and diving sites rather than as alternatives to dumps.
LONG RUN COSTS AND PRODUCTIVITY OF THE CLEARWATER ARTIFICIAL REEF
Projected Costs of Reef Building
In its initial stages, the Reef Project enjoyed the benefits of surplus
equipment transferred from other county units, such as the crane and a fork
lift, and the utilization of other equipment that had already been depreciated
down to scrap value by other departments, such as a truck. In the projections
it was assumed that a full market price of new equipment would be paid for
replacements. Two sets of fixed cost projections were prepared based on:
(1) sustaining the present plant and equipment, (2) adding sufficient equip-
ment to enable the most expensive piece of equipment the barge to be
efficiently utilized. According to the first alternative, equipment deprecia-
tion and overhead labor costs of $40,756 a year, in 1974 prices, should be
expected until 1982/83, when replacement of the fork lifts would raise the total
to $42,417.
1 2
.1525 M per punched tire.
20.048 M2 per split tire.
3
p. 13.
- 22 -
TABLE 7. THEORETICAL VALUE ADDED PER TIRE TAKEN TO REEF
2
M of Bottom Punched Split Costs per
Fiscal Year Generated Tires Tires Punched Tire Split Tire
1973/74 923 6,052 19,229 8.70 2.74
1974/75 2,963 19,430 61,729 5.50 1.73
1975/76 5,928 38,872 123,500 4.18 1.32
The alternative cost of the disposal--burying tires in the Toytown dump--is
about two cents per tire.3 It is thus obvious that whether punched or split tires are
used, tire "burial" in the artificial reef brings costs of an entirely different
order of magnitude. If reefs are to be preferred, they will have to demonstrate
benefits as fishing and diving sites rather than as alternatives to dumps.
LONG RUN COSTS AND PRODUCTIVITY OF THE CLEARWATER ARTIFICIAL REEF
Projected Costs of Reef Building
In its initial stages, the Reef Project enjoyed the benefits of surplus
equipment transferred from other county units, such as the crane and a fork
lift, and the utilization of other equipment that had already been depreciated
down to scrap value by other departments, such as a truck. In the projections
it was assumed that a full market price of new equipment would be paid for
replacements. Two sets of fixed cost projections were prepared based on:
(1) sustaining the present plant and equipment, (2) adding sufficient equip-
ment to enable the most expensive piece of equipment the barge to be
efficiently utilized. According to the first alternative, equipment deprecia-
tion and overhead labor costs of $40,756 a year, in 1974 prices, should be
expected until 1982/83, when replacement of the fork lifts would raise the total
to $42,417.
1 2
.1525 M per punched tire.
20.048 M2 per split tire.
3
p. 13.
- 23 -
But it should be noted that at present the different "plants" of the
Project do not operate at full capacity. The barge captain estimates that with
proper dock facilities the barge should be able to make three trips per week to
the reefs. Allowing for 10 weeks of repairs and bad weather, this would still
result in 126 trips a year in lieu of the current total of 70, or an increase
of 80%.
The biggest bottleneck, however, lies in the tire splitting operations.
This is mainly a production problem, not an equipment problem or plant problem.
If the two tire splitters were operated eight hours a day at the rate of 100
tires per hour (80% of the capacity estimated by the manufacturer) 48 weeks a
year (and the tire punch would not be used at all), a total output of 384,000
tires would result, instead of the current output of 74,000. Since the barge
can carry an average load of 35 to 40 tons, at 18 lb. per tire, a load represents
about 4,000 tires. The potential annual output of 384,000 tires would thus
require about 96 trips to the reefs. On two thirds of the total trips in 1974/75,
the barge load consisted exclusively of culvert. Assuming that the volume of
culvert operations remains unchanged, the barge could actually take 79 trips with
tires. Thus 82% of the potential output of 384,000 tires could be handled.
Thus full utilization of the present barge capacity would require both a new
dock and the utilization of more efficient labor in the tire splitting operations
or an increase in the number of tire splitting machines. In the alternative
calculations a new dock in the Clearwater site and one new tire cutter were
assumed. The new dock in Clearwater that would be needed is estimated to re-
quire capital expenditures of $66,660 ($50,000 in 1974 prices). The tire cutter
would cost $4,000.
The composition and life of the new dock setup was assumed to be the same as
that of the old, including imputations, the fixed costs would rise to $43,890 in
1976/77, continue at that level for five years and rise to $45,550 in 1982/83.
- 24 -
In all these calculations it should be noted that doubling of the present
tire splitting capacity and efficient utilization of this capacity would be
required to effectively dispose of all tires generated in the county. Thus
the supply of tires is unlikely to become an effective constraint to the
operations.
Implied in the above two sets of fixed cost estimates are annual capital
expenditures given in Table 8. Because of the long lives of the structures,
benefits from the investments will be derived over many years to come.
TABLE 8. HISTORICAL AND PROJECTED CAPITAL EXPENDITURES
IN 1974 PRICES
Current Level of Expanded
Operations Maintained Operations
1973/74 149,662
1974/75 12,306
1975/76 121,011
1976/77 3,824 60,979
1977/78 2,669 2,669
1978/79 90 90
1979/80 1,633 1,663
1980/81 3,795 3,795
1981/82 543 543
1982/83 3,422 3,422
Estimates of future variable costs are prepared on the basis of the second,
higher, fixed cost alternative. With the efficiency of the men operating the
equipment assumed to remain unchanged, about a 50 per cent increase in EmCrgency
Jobs personnel would be required to operate the new tire cutter with its atten-
dant chore of transporting additional tires. Electricity, gasoline and oil
costs would also rise by 50 per cent. On this basis, and utilizing 1974 prices,
an annual variable cost figure of $155,080 was projected for 1977/78-1982/83.
25 -
To obtain the present value of all these costs up to 1980/81 in 1974, a
seven percent interest rate was used. The costs of the county project came to
$1,007,682. To this figure were added the estimated cost of $40,000 incurred by
the City of Clearwater in dropping 72,0001 tires in 1972-74, and $49,200 grant
from the State of Florida Division of Recreation to yield a total present value
of $1,096,882.
Productivity of the Reef
To establish the supply of fish available for recreational activity,
several technological relationships were studied. First, estimates were
prepared on the amount of fish habitat area generated by reef construction.
Subsequently, the value of this habitat to fishes was established by fish counts.
No literature on productivity of similar reefs was available to determine inter-
mediate and sustained yields from the habitat. Questionnaires and interviews
with anglers on-the site and charter and party boat captains and diving clubs
were utilized to determine how many anglers and divers of different types the
estimated yield can theoretically support.
1See p. 16.
-26-
Fish Habitat Generation
Two alternative hypotheses regarding the contribution of tires and culvert to
habitat formation were considered. First, how many fish are attracted to the area
and find feeding material depends on how large an area of the sea bottom is covered.
The coverage by tires is about two feet high and that by culvert six to eight feet,
but according to this hypothesis, the difference in the height and the nature of the
coverage is inconsequential. The second hypothesis maintains that the new surface
area generated by culvert and tires is the most relevant. input variable in the pro-
duction function for fish,l because it determines the amount of food for fish, and
the available shelter. Thus two different sets of habitat calculations would be
required.
The amount of ocean bottom covered was relatively easy to establish. The dim-
ensions of the culvert dropped were accurately recorded. The area covered was estab-
lished as the length times the diameter of the culvert, on the assumption that the
culvert lie on its side partially covered on both sides with maximum width set by
the diameter of the pipe. One half of a barge load is carefully placed in a pile
some 6 to 10 feet high and approximately 40 feet in diameter. Then the remaining
culvert is placed off the opposite side of the barge, giving 30 to 40 feet of sep-
aration between clumps. On subsequent trips, this 30 to 40 feet separation is main-
tained. This continuation more closely imitates a natural reef. All punched tire
units were dropped to lie horizontal; 30" diameter of the tires became the width and
the 8" thickness of each of the four tires the length of the unit. Thus it was
2
estimated that a unit of four punched tires covered an area of .61 m A split
tire bundle usually consisted of 30 tires packed on a forklift with 42.5" forks,
2
covering a total area of 1.45 m
John G. Carlisle, Jr., Charles II. Turner and Earl E. Ebert, "Artificial
Habitat in the Marine Environment," Cal ifornia Dlpartment of Fish and Came,
Fish Bulletin 124, p. 38.
- 27 -
The amount of surface area generated was more complicated to estimate.
Culverts were treated as cylinders with inner and outer surfaces. The inner and
outer diameters of the culvert cylinders and the length of the pipes were measured
and the surfaces calculated accordingly. Tests were run on how deeply the culvert
sank into the gulf bottom, and adjustments were made to the submerged surface
area available to the fishes.
Tire surfaces were calculated separately for the punched tires and the split
tires. For punched tires the surface could be calculated essentially the same
way as for culvert, since both the inner and outer surfaces were available for
fish habitation. The split tires, however, were bunched so tightly outer surface
upon inner surface that we estimated that only the outer surface and 40% of the
inner surfaces of the entire stack of tires remained available. Therefore,
measurements were made of the inner and outer diameters, and the number and width
of tires in the stack and the adjusted surfaces were calculated. Because of
a total lack of comparable fish counts, development of this hypothesis had to
be postponed.
Overall, it was estimated that the following amount of ocean bottom has been
built into a reef each year.
TABLE 9. SQUARE METERS OF REEF BOTTOM GENERATED
Punched Split
Fiscal Culvert Tire Units Tire Units Total
Year All Clearwat er All Cearwater All Clearwater A Al Clearwa-ter
1973/74 55 55 11,848 11,8482 -- -- 11,903 11,903
1974/75 1,652 1,221 221 74 1,525 1,409 2,963 2,704
1975/76 2,082 51 396 238 3,450 260 5,928 549
The calculations already performed will be presented in the final report by
Don Schug.
includes an estimated 18000 bundles deposited by the City of Clearwater
program before June 17, 1974.
-28-
Fish Counts
Fish counts have been taken at the artificial reef locations on several
occasions between Fall 1975 and Fall 1976, although not yet in sufficient
numbers to allow adjustment for seasonal fluctuations. Separate coverages are
available for split tire bundles, punched tire units, and culvert. Three types
of censuses were conducted: total counts of fishes on isolated habitat "patches,"
transect counts, and poison sample counts. Numbers only were obtained from the
first two censuses; weight and length measurement were collected from the poison
samples. In transect counts one diver counted all fishes observed within an
approximate one meter wide band while a second diver followed behind holding a
current meter mounted on a board. The number of current meter revolutions was
recorded for each transect swam and later converted to distance travelled based
upon calibrated runs along a 22 meter transect. Visual estimates were also prc--
pared about the percentage of bottom covered by artificial reef materials in the
transect. The transect fish counts given below refer to densities per meter of
covered area (center holes of tires are assumed to be covered areas), i.e., if a
17 meter transect is 75% covered, it is equivalent to 13 meters of 100% covered
transect. The behavioral assumption underlying this conversion is that the fish
population is generated and maintained entirely by the covered substrate rather
than by the adjacent natural habitat.
Taking together the habitat patch, transect and poison counts, yielded the
following average numbers of species and the number of individual fishes per
square meter of 100% covered bottom area in the three types of artificial
2
environments.
1Gregory Smith, "Comparative Efficacy of Artificial and Natural Gulf of
Mexico Reefs as Fish Attractants," Unpublished paper, St. Petersburg, Fl., 1976.
At one station both a habitat patch count and a poison count,was conducted.
The latter represented 84% of the former, a rather satisfactory accuracy.
-29
TABLE 10. RESIDENT FISH COUNTS/m2
-- -- ~-
Number of Species Number of Individuals
Punched Tire Units .42 2.63
Split Tire Bundles 2.57 18.71
Culvert 3.00 9.00
Combinations 1.38 7.38
Because of the limited number of the fish counts, only resident fish populations have
been estimated. Estimates of migrant fish-Spanish mackerel, kingfish, and snook-
could not be obtained.
The above productivity figures per unit were used to calculate -the entire
resident fish population on the Clearwater reef. The results are given in
Table 11. After the first year, the age of the reef is of little consequence in
1
these calculations, because it was found that it takes only about a year, depending
on the season, for the game fish population of artificial reef to reach its clinax
population without migration from adjacent reef areas. Subsequent variations
occur in response to normal seasonal and weather patterns.
A knowledge of fish counts taken from time to time without knowledge of
either the rates at which fish population under similar circumstances normally
grows or about fish catches over a period of time from a known population, does
not enable determination of the removals that would still permit maximum
sustained yield. The one pertinent species on which a growth study has been
carried out is the red grouper2, but this species does not spend its entire
life cycle at such reefs. Taus no sustained yield figures can be presented.
Hleyward II. Mathews, History of Publicly Fundcd Artificial Reefs of Pinellas
County. Manuscript, p. 6.
2Martin A Moe, Jr., Biolowy of tlhe Red cGrouper Epinenholus morio (Valenciennes)
irom tile Eastern Gulf of Mexico, Florida Department of Natural Resources, Professional
Paper Series Number 10, Dec. 1969, Marine Research Laboratory, St. Petersburg, Fl.
TABLE 11. PRODUCTIVITY OF CLEARWATER REEF
i. .
1 Person-day
Culvert Punched Tire Units Split Tire Bundles Fish Of Fishing
Square
Fish Meters Fish Square Fish Square
Per Sq. of Per Sq. Meters Per Sq. Meters of
Meter of Culvert Total Meter of of Units Total Meter of Bundles Total Grand
Transect In Place Fish' Transect In Place Fish Transect In Place Fish Total
1973/74 9.00 55 495 2.63 11,848 31,160 18.71 --- --- 31,655 5,275
1974/75 9.00 1,276 11,484 2.63 11,922 31,354 18.71 1,410 26,381 69,219 11,536
o
1975/76 9.00 1,327 11,943 2.63 12,160 31,980 18.71 1,670 31,246 75,169 12,528 1
Reported for year of initial size;
catchable size a year later.
user days in Table 13 calculated on the basis of fish of
- 31 -
Projections of resident fish population were made on the basis of the new
reef bottom generated with the projected expenditures. Since the only new
equipment introduced was a tire splitter, it was assumed that the output of split
tires increases accordingly, i.e., by about 50 per cent. It was assumed further,
for purposes of simplification, that all new materials will be deposited on the
Clearwater Reef. Thus all benefits of the program can be evaluated in terms of
that reef alone. The following figures were obtained.
TABLE 12. PROJECTED PRODUCTIVITY OF CLEARWATER REEF
M of Artificial
Reef Bottom Total
In Place Fish
1976/77 20,810 176,306
1977/78 26,175 276,685
1978/79 31,540 377,064
1979/80 36,905 477,443
1980/81 42,270 577,822
POTENTIAL BENEFITS TO ANGLERS AND DIVERS
There is no unique relationship between the productivity of a reef and the
benefits derived from fishing or diving on a reef, because different people derive
different satisfaction from the same activity. Surveys of anglers' attitudes toward
the benefits of the reefs led us to form four categories of beneficiaries: (1)
"Sunday" anglers, (2) sports anglers, (3) divers, and (4) shark anglers.1
Sunday_Anglers
Sunday anglers are usually retirees or families fishing on weekends. A
relatively large number of women and children is involved. Small boats of 16
to 18 feet or half-day party boats are most commonly used by this group.
Sunday anglers consider a day well spent at sea even if catches are relatively
It was also revealed that the charter boats almost invariably have a limit to
the amount of fish the customers are allowed to take home. The rest is sold at local
fish markets. The benefits of these sales are excluded from our benefit calculations.
And so are all secondary benefits, such as increased tourist trade.
- 31 -
Projections of resident fish population were made on the basis of the new
reef bottom generated with the projected expenditures. Since the only new
equipment introduced was a tire splitter, it was assumed that the output of split
tires increases accordingly, i.e., by about 50 per cent. It was assumed further,
for purposes of simplification, that all new materials will be deposited on the
Clearwater Reef. Thus all benefits of the program can be evaluated in terms of
that reef alone. The following figures were obtained.
TABLE 12. PROJECTED PRODUCTIVITY OF CLEARWATER REEF
M of Artificial
Reef Bottom Total
In Place Fish
1976/77 20,810 176,306
1977/78 26,175 276,685
1978/79 31,540 377,064
1979/80 36,905 477,443
1980/81 42,270 577,822
POTENTIAL BENEFITS TO ANGLERS AND DIVERS
There is no unique relationship between the productivity of a reef and the
benefits derived from fishing or diving on a reef, because different people derive
different satisfaction from the same activity. Surveys of anglers' attitudes toward
the benefits of the reefs led us to form four categories of beneficiaries: (1)
"Sunday" anglers, (2) sports anglers, (3) divers, and (4) shark anglers.1
Sunday_Anglers
Sunday anglers are usually retirees or families fishing on weekends. A
relatively large number of women and children is involved. Small boats of 16
to 18 feet or half-day party boats are most commonly used by this group.
Sunday anglers consider a day well spent at sea even if catches are relatively
It was also revealed that the charter boats almost invariably have a limit to
the amount of fish the customers are allowed to take home. The rest is sold at local
fish markets. The benefits of these sales are excluded from our benefit calculations.
And so are all secondary benefits, such as increased tourist trade.
modest. Questionnaires administered to anglers in small private boats at the
reef site and interviews with captains of half-day party boats indicated that
half a dozen fish per person per trip made the anglers so satisfied that they
said they would come back later. According to the charter boat captains,
considerable variation existed between local customers and out-of-county customers,
on one hand, and men vs. women and children, on the other. Out-of-county
customers were satisfied with relatively fewer fish, whereas local anglers who
were familiar with typical catches in the area were more demanding. Women and
children were generally satisfied with smaller catches than men. The size of the
fish did not seem to make much difference in this group. It was assumed that
the maximum rate Sunday anglers were willing to pay is equal to the average charter
boat rate per person of $40, since charter boats are clearly a more expensive
substitute and are normally not used for bottom fishing at the reefs. Since no
current data were available on the costs of anglers going out in their own boats,
the market price paid per person in half-day party boats was taken as the marginal
benefit of these trips. Inquiries at several operators established the prevail-
ing half-day rate at $8.00 per person, including bait and tackle. The full-day
rate is $15.00.
The maximum number of user days demanded at zero cost was determined by the
minimal satisfaction derived from going out to the reef. This limit is reached
when weather is acceptable, (80 per cent of the time on the average2), but the site
is so crowded that there is no room for boats to maneuver (about 80 boats3). With
four persons per boat, these assumptions yield a total annual demand of 92,160 user
days. On these assumptions, the following demand schedule was obtained.
Local residents are estimated to constitut-e about 80 per cent of anglers
at the Clearwater Reef, according to on-site survey:: conducted by our group in
Summer Fall, 1976.
2Expert estimate in December February and early March weather is good only
half the time, whereas in mid-summer it is almost always good.
3The buoys indicate the maximum dimensions of the reef; anglers have no way
of knowing how much of the bottom area is actually covered by reef material.
Therefore, the invariant area marked by the buoys is used throughout.
Figure 6. Potential Reef
Fislhing Demand by $40 C
Sunday Anglers
average willingness to pay
$20
B A
o 92,160 user days
The area under the demand curve OQAB equals $1,843,200. These would be the
annual benefits if there were enough fish to satisfy all Sunday anglers that the
site can accommodate at the rate of about six fish per person and no transporta-
tion and equipment costs. The annual benefits per year started much lower in
1973/74 when the numbers of resident fish were small but increased as construction
progressed. Assuming that it takes one year for the reef to internally produce
fish of catchable size and further assuming that any fish caught is equally satis-
factory--an extremely optimistic assumption--, we obtained the following annual
figures on the maximum number of user days and benefits in the Sunday angler
category supported by the Clearwater Reef, through its expected construction
period.1
TABLE 13. MAXIMUM AVAILABLE USER DAYS AND BENEFITS
FOR SUNDAY ANGLERS. CONSTANT PRICES
Undiscounted Discounted
User Days Benefits Benefits
1973/74 4,150 162,265 162,265
1974/75 5,275 204,960 191,551
1975/76 11,662 436,975 381,671
1976/77 12,655 471,462 384,854
1977/78 29,384 988,037 753,766
1978/79 46,114 1,382,959 986,032
1979/80 62,844 1,656,882 1,104,051
1980/81 79,573 1,809,092 1,126,613
Total 5,090,803
Costs for individual years as well as for the entire assumed construction
period were calculated in two parts: reef construction costs and boat rental
and equipment costs to the anglers. These figures as well as the resultant
benefit cost ratios are given in Table 14.
1No allowance is made for substitution between fishing/diving at the artificial reef
and similar activities elsewhere, because even the largest total represents only
a small part of recreational fishing in the county.
- j -
-34-
TABLE 14.BENEFITS AND COSTS OF CLEARWATER REEF TO SUNDAY ANGLERS
AT FULL UTILIZATION OF AVAILABLE FISH
Discounted
User Days Benefits
Discounted
Construction Boat Rental and
Costs 1) Equipment Costs
1973/74 4,150 83,000 52,678 62,250 114,928
1974/75 5,275 98,600 90,880 73,949 164,829
1975/76 11,536 201,680 13,158. 151,260 164,418
1976/77 12,528 204,540 161,890 153,400 315,290
1977/78 31,785 485,670 151,383 363,950 515,333
1978/79 51,052 729,314 141,656 546,986 688,642
1979/80 70,312 937,493 132,213 703,120 835,333
1980/81 89;572 1,116,160 18,570 837,150 855,720
1981/82 92,160 1,072,880 --- 804 660 804,660
Total for
Construction
Period 4,929,337 762,428 3,696,725 4,459,153
1) Excludes about $140,000 depreciated value of the plant at the end of the construction period for most
of which alternative uses can be found..
Even during the construction period a favorable benefit-cost ratio results.
When construction ceases in 1981, the benefits remain but only the user costs of
boat and equipment rental are incurred and the marginal, discounted benefit cost
ratio rises to 1.33. Given the extremely long life of the reef, the average of
the marginal ratios will asymptotically approach the same value.
Sports Anglers
Sports anglers either go out in their own bigger boats (21-25 feet) or
charter a boat that accommodates up to six anglers. Sports anglers usually
time their trips with reported good seasons, such as the Spanish macrkerol and kingl'fisfl
runs. Charter boats take anglers to the reefs only during trolling seasons, nol
for bottom fishing. The satisfaction of a sport fishing party depe'iids on Ithe
kind and size of fish. Typically 30-40 Spanishi mackerel per licharLter boat invites
Total
Discounted
Costs
Benef
-- '
-35-
return trips, whereas only 15-20 kingfish are required for the same result.
100-200 lbs. of grouper also makes a good fishing day. But one of the captains
stated that variability of satisfaction is great: a true sports fisherman is
happy even if he doesn't c;tch any; after all, the fish don't bite all the time.
There may be so many forage fish at the artificial reef that the fish
just don't care for your bait. (Our divers have confirmed this on several occasions.)
Even though trolling boats do not limit themselves to the covered area or
even to the marked reef area, as a rule, the charter boat captains show a pre-
ference for the general reef area rather than ordinary sand bottom. In prin-
ciple, migratory pelagic fish like kingfish and Spanish mackerel can be found
anywhere there are menhaden, sardines, and other similar forage fish. Even
though the large pelagic fish are not primarily dependent upon reefs, the juv-
eniles do consistently congregate over reef areas rather than over sand bottoms.1
Thus at tnis stage, it was simply assumed that during the trolling seasons
the demand by sports anglers saturates the reef area at the market price of
chartering a boat with fishing gear.
Some 25 charter boats operate from the Clearwater Marina and another dozen
or so from other marinas within easy reach of the reefs already established. Our
survey of a sample of captains at the Clearwater Marina on a cold and windy
November morning when small craft warnings deterred activity at sea revealed that
the average daily charter rate is $175 including bait and tackle, and the average
load is 4.5 persons. Thus the market price was set at $39 per person. Since
for all intents and purposes there are no superior alternatives to a fully equipped
charter boat, the maximum rate that would drive use to zero was established as
the highest charter boat rate, estimated at $220 a day or $49 per person. On the
assumption that a 21 foot boat is used for 10 days of sports fishing a year (no
other use)with standard trolling equipment and 4.5 persons aboard, anralternative
cost figure of $37.44 per person per trip, in 1977 prices, was obtained.
10ur divers have repeatedly observed this phenomenon within a few days after
reef material has been deposited.
-36-
The trolling season usually lasts about 2 weeks in spring and in fall.1
Another two weeks was included in summer for snook fishing. With an adjustment
for good weather 80% of the time in spring and fall, 100% of the time in summer,
a total of 42 user days per boat was obtained. The reef becomes crowded with
only 20 larger moving boats on it. With 4.5 persons per boat, a total number
of user days generated at $39 per day comes to 3,780. The potential market demand
is described in Figure 7. C
$49
Figure 7. Potential Reef
Trolling Demand by Sports $24.50 average willingness to pay
Anglers ~B .
0 3,780 user days
The area under the demand curve equals $900,375.
Sports Divers
There are a number of diving clubs and charter boats in the area which
take groups of divers out in the Gulf. Information gathered from these clubs
and from individual operators indicated that $29 per person was usually charged
for a full-day excursion, including scuba gear. This figure thus represents the
travel costs (marginal user costs). The most expensive guide charged $40. A good
diving day does not have to result in any fish catch at all. This is especially true
of beginner divers who represent the typical diver group at the reef. Not all these
divers carry spear guns with them and even those who do are often satisfied with
watching the fish rather than catching them.
But in Fall 1976, for example, there were no kingfish runs on the reefs
perhaps because of the sudden onset of cold weather that cooled the shallow waters
rapidly and made the kings migrate south in deeper waters.
-37-
Only about six diving boats can be accommodated on the reef at any one time,
because of the requirement that all boats stay at a safe distance from underwater
divers. With six persons per boat in good weather and acceptable temperatures
(25% diving in four winter months, 50% diving in fall and spring and 90% of
the remaining time), a total of 7,560 user days is generated by capacity use. Thus
the area under the demand curve comes to $302,400. Figure 8 depicts the potential
market demand and marginal user costs.
Figure 8. Potential Diving $40 C
Demand
average willingness to pay
$20
B A
0 7,560 user days
Since watching marine life rather than catching fish represents diving bene-
fits, the supply of diving recreation is related directly to the amount of reef
bottom covered. The intended size of the reef is 63,000 m2. Clusters of
material are placed on it, with open spaces in between. For simplicity's
sake it is assumed that the intended open space equals intended coverage. On
that basis, the reef would yield the potential annual diver benefits shown in
Table 15.
If the reef was used to its maximum exclusively by divers, irrespective
of average boat and equipment charges, the annual marginal benefit cost ratios
of the order of 0.37 would result. With 7,560 user days, the marginal ratio
would change to 0.7 a year after construction ceases. With the practically
indestructible nature of the reef, benefits offset by boat and equipment
rental would continue to accrue until the entire benefit cost ratio would
asymptotically approach 0.69. Clearly, unsatisfactorily small benefits would
result if the reef was devoted exclusively to divers rather than to Sunday anglers.
TABLE 15. DIVING BENEFITS AND COSTS WITH FULL CAPACITY UTILIZATION
Intended
% of
Reef
Available
34.8
37.8
46.3
48.1
71.1
94.2
100.0
100.0
User
Days
2,631
2,858
3,500
3,636
5,375
7,122
7,560
7,560
Undiscounted
Benefits
52,620
57,160
70,000
72,720
107,500
142,440
151,220
151,220
Discounted
Benefits
52,620
53,421
61,190
59,360
82,061
101,021
100,764
94,147
Discounted
Construction
Costs
52,678
90,880
13,158
161,890
151,383
141,656
33,633
-0-
Discounted
Boat Rental
and Equipment
Costs
76,299
77,460
88,880
102,350
118,989
146,481
146,089
136,513
Total
Discounted
Costs
128,977
168,340
102,038
264,240
270,372
288,137
198,292
136,513
1973/74
1974/75
1975/76
1976/77
1977/78
1978/79
1979/80
1980/81
Marginal
Benefit-
Cost
Ratio
0.41
0.32
0.60
0.22
0.30
0.35
0.51
0.69
--
--
- -------
-39-
Shark Anglers
The fourth group of beneficiaries, the shark anglers, does not compete at
all with the other groups, because they go out at night. Their demand schedule
has a maximum willingness to pay point at $49, the same as the sports anglers.
The market price, however, is only $25 per person. (Apparently, the charter
boats' practice resembles marginal cost pricing). If they go out as often as
weather permits in charter boats, their demand is otherwise similar to that of
sports anglers except that the boat density at night should be assumed lower,
10 at a maximum, for safety reasons. The potential market demand and user
costs are depicted in Figure 5.
Calculation of benefit cost ratios faces the same obstacles as in the
case of sports anglers. Sharks are not resident reef animals, and the extent
to which they are attracted to the reef by forage fish is difficult to ascetain.
Therefore, only the user days demanded at average demand price and at marginal
cost price were calculated. (See Table 16 below).
Optimum Reef Size_
Our model led us to conclude that optimum capacity is reached when average
demand price equals marginal cost of capacity and operations. For Sunday anglers
the entire reef should be built. If other users had to bear all the costs of
reef construction, the benefits derived would not justify these costs.
A summary of the benefits yielded annually to the two principal users is
presented in Figure 9. The best use of the reefs is for bottom fishing by
Sunday anglers. This use yields a potential marginal benefit cost ratio of
about 1.33 at optimum reef size. Potential benefits to divers converge toward
0.69 marginal ratio. The reef is already too large for exclusive use by divers
and shark anglers.
-39-
Shark Anglers
The fourth group of beneficiaries, the shark anglers, does not compete at
all with the other groups, because they go out at night. Their demand schedule
has a maximum willingness to pay point at $49, the same as the sports anglers.
The market price, however, is only $25 per person. (Apparently, the charter
boats' practice resembles marginal cost pricing). If they go out as often as
weather permits in charter boats, their demand is otherwise similar to that of
sports anglers except that the boat density at night should be assumed lower,
10 at a maximum, for safety reasons. The potential market demand and user
costs are depicted in Figure 5.
Calculation of benefit cost ratios faces the same obstacles as in the
case of sports anglers. Sharks are not resident reef animals, and the extent
to which they are attracted to the reef by forage fish is difficult to ascetain.
Therefore, only the user days demanded at average demand price and at marginal
cost price were calculated. (See Table 16 below).
Optimum Reef Size_
Our model led us to conclude that optimum capacity is reached when average
demand price equals marginal cost of capacity and operations. For Sunday anglers
the entire reef should be built. If other users had to bear all the costs of
reef construction, the benefits derived would not justify these costs.
A summary of the benefits yielded annually to the two principal users is
presented in Figure 9. The best use of the reefs is for bottom fishing by
Sunday anglers. This use yields a potential marginal benefit cost ratio of
about 1.33 at optimum reef size. Potential benefits to divers converge toward
0.69 marginal ratio. The reef is already too large for exclusive use by divers
and shark anglers.
-40-
0
S 1.6
u
J 1.2
*Hr
1.0
0.8
0.44
o.k
0.2
0.0
00 3/ 74/75 75/76 76/77 77/78 78/79 7.9/60 80/81
Year
Fig. 9. A summary of marginal annual benefit cost
ratios for Sunday anglers (light) and divers (dark).
I
-41-
If marginal cost pricing were assumed, demand would have become satisfied
at the level of 57,603 user days for Sunday anglers by 1979/80 and before 1974
for all other users. Thus construction of the Clearwater Artificial Reef
beyond its assumed size in 1975/76 would be justified only if Sunday anglers
were its only daytime users; additional benefits from night-time use would
accrue to shark anglers.
CONCLUSIONS AND RECOMMENDATIONS FOR FURTHER STUDY
The present report has assessed the costs and potential benefits of
artificial reefs and compared those with other modes of disposing of the pri-
mary raw material, tires. Although tires can be buried quite cheaply in land-
fills, in the long run they can be more beneficially used in reef construction
that yields recreational benefits for centuries to come. It is expected that
the reef population will reach its sustained level in about two years but will
endure an estimated 1,000 years if the reef is build with tires and practically
forever if built with culvert, provided that annual maintenance of the buoys
of the order of $500 is undertaken.
/
An interdisciplinary study like this one which has to rely heavily on
nature's biological technologies in the conversion of tires to catchable fish
1
There are very few marine bacteria capable of decomposing synthetic rubber.
-42-
suffers from the uneven state of art between the disciplines of economics and
biology. Even though an economist does not have the expertise to fill many
of the gaps in the biological knowledge, the benefit cost framework developed
above enables the indication of areas where data are lacking or deficiencies
exist and thus further research is called for.
As has been pointed out repeatedly, all the benefits assessed have been
potential, i.e., realizable benefits rather than actual benefits. The first
order of business is to study the actual benefits today and to project bene-
fits into the future. Substantial work on interviews of anglers, charter boat
captains, diving clubs and boat owners in general is under way currently and
more is needed in the next few years to chart the user pattern. Reconncnda-
tions as to how the potential benefits can be realized should then be possible.
A number of technological transformations of tires to fish rest on an ex-
ceedingly narrow data base. A systematic study of the layouts of various reef
materials, the bottom area covered and the reef surface area generated should
be undertaken. Fish counts, especially poison counts, need to be multiplied.
It has been suggested2 that the height of the reef is very important in deter-
mining the size of the fish that inhabit it. The present study had no suitable
data available to test that hypothesis, but such data should be collected. The
more general hypothesis that it is the amount of surface area rather than the
reef bottom area that determines reef productivity could not be tested either
because the few fish counts were not conducted with such differentiation in
1Don Schug, Graduate Assistant in MNarine Science, will prei;ent his fnJudtin;'
in the final report.
2
Richard Stone, "General Introduction to Artificial Reefs," Proceedings of
Sport Fishing Seminar, November 18-39, 1971, Jekyll I: 1 land, Geor-gia, Seminar
Series No. 1, p. 2.
-43-
mind. A study of the algae on the reefs and their relationship to productivity
of catchable fish would greatly enhance our understanding of why productivities
of different kinds of reefs differ.
No life cycle studies have been conducted on any of the fish that typically
inhabit the reefs. Such a study of the white grunt, the most common species
of sports fish on the reefs, would be most valuable. Even more demanding would
be studies of the role of the reef in the life cycles of the migratory fish like
kingfish and Spanish mackerel.
Reef building activity is going on all along the Suncoast. The costs of
reef building are of an entirely different order of magnitude than the costs of
burying tires in landfills. Reef construction expenditures are voluntary and
postponable. Their merits should be evaluated in comparison with the merits of
other discretionary private and local government expenditures before decisions
are made. Cost effective techniques of reef construction are not well known by
the many volunteer groups that now advocate and support reef construction. A
series of conferences in the various counties should be offered by a group of
experts to interested local officials and private groups in order to reduce the
chance of costly mistakes and to speed up the construction of other potentially
equally beneficial artificial reefs. Since substantial amounts of public funds
also support reef construction, the public has a similar right to know and
should be kept informed of the opportunities available to them as well as of
the associated costs.
-44-
Bibliography
Carlisle, John G., Jr.; Turner, Charles H.; and Ebert, Earl E. Artificial
Habitat in the Marine Environment. California Department of Fish and
Game, Fish Bulletin 124, 1964. 93 pp.
Mathews, Heyward.H. History of Publicly Funded Artificial Reefs of Pinellas
County. Manuscript, 1976. 9 pp.
Miller, Jon R. "On the Use of Unit Day Values in the Evaluation of Site-
Specific, Water Based Recreation Benefits." Paper presented at the
Southern Economic Association Meetings, Atlanta, Georgia, November
1976. 15 pp.
Moe, Martin A., Jr. Biology of the Red Grouper Epinephulus morio (Valenciennes)
from the Eastern Gulf of Mexico. St. Petersburg: Florida Department of
Natural Resources, Marine Research Laboratory, Professional Paper Series
Number 10, 91 pp.
Mumy, Gene E. and Hanke, Steve H. "Public Investment Criteria for Underpriced
Public Products." American Economic Review, September 1975. pp. 712-719.
Smith, Gregory B. "Comparative Efficacy of Artificial and Natural Gulf of
Mexico Reefs as Fish Attractants." St. Petersburg, Florida, 1976.
(Mimeographed) 14 pp.
Stone, Richard B. "General Introduction to Artificial Reefs," Proceedings
of Sport Fishing Seminar, November 18-19, 1971, Jekyll Island, Georgia.
Wilmington, N.C.: Coastal Plains Center for Marine Development Services,
1972. pp. 1-3.
Stone, Richard B.; Buchanan, Chester C.; and Steinle, Frank W., Jr. Scrap
Tires as Artificial Reefs. Environmental Protection Agency, 1974. 33 pp.
Tampa Bay Regional Planning Council, Tampa Bay Area-wide Solid Waste Management
and Resource Recovery Study Phase II. Technical and Management Report.
St. Petersburg, Florida. February 1976. 461 pp.
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