lrl economic impact rcc oct 09

US Army Corps of Engineers

BUILDING STRONG®

Economic Impact of the Louisville District

COL Keith Landry, PhD, PECommanderLouisville DistrictUS Army Corps of Engineers

5 October 2009

BUILDING STRONG®FY 08

Bottom Line Up Front

USACE projects are value added► Benefits to the nation exceed costs to taxpayers► Infuse investment in the projects’ regions► Corps sustained economic output and savings totaled to $7.2 B

• Over 5.6 times LRL’s operating budget of $1.28 B• Provides 35,000 jobs

Economic models that fully account for effects of Navigation and Flood Risk Management projects are forthcoming

► Navigation model expected in December of 2009► FRM model anticipated late 2010 / early 2011


Who We Serve


LRL Projects

Operates 16 Locks & 8 waterway dams on OR Implemented 65 flood risk management systems $927M in Construction 18 million (+) recreation visits $375.5M spent within 30 miles of sites Directly employed 1,100 workers

► $80M in employee compensation


LRL’s Impact on the Nation

$2,855.92**Navigation

$601.88**FRM

35,111*

870

9,807

2,173

22,261

Jobs Supported

$7,284.34*

$122.45

$643.94

$263.81

$2,796.34

Economic Impact (millions)Category

ConstructionEmployee

Compensation

Recreation

O&M

TOTAL*Reported Navigation and FRM figures are economic savings estimates. Economic models are being revised to account for the multiplier effects of navigation and FRM benefits. This current analysis should be considered a lower bound estimate of LRL’s impact.


“Economic Impact” Defined

Expenditure categories account for economic output generated or supported by Corps spending; project benefit categories are in terms of efficiency savings and prevented flood damages.

Jobs – employees of Corps, project beneficiaries, suppliers, sustained by recreation sites, etc.


Taylorsville Lake, KY

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Impact of Taylorsville Lake

Multipurpose lake project ►Flood Risk Reduction / Recreation / Water

Quality

796,893 visits to the Corps lake in FY 08►Average spending of $20.99 per visit

$11M (+) spent within 30 miles of the lake


Impact of Taylorsville Lake Recreation

$ 6,081 215 $ 17,491Total Effects

2,112.81 62 6,344.39 Secondary Effects

3,968.57 153 11,146.26 Total Direct Effects

385.18 7 2,020.84 Manf

322.91 5 842.51 Wholesale trade

249.27 9 517.82 Other retail

110.93 8 315.05 Sporting goods retail

495.56 18 1,293.76 Gas stations

405.55 17 953.87 Grocery stores

233.81 11 630.91 Entertainment and recreation fees

84.19 5 415.24 Boat repair and maint.

107.16 7 528.51 Auto repair

1,349.50 59 3,054.74 Restaurants & bars

7.26 1 74.43 Other Lodging

217.26 8 498.59 Motel, hotel cabin

Direct Effects

Labor Income ($ Thousands)JobsSales ($ Thousands)Sector/Spending category


Impact of Taylorsville Lake

215$17.49321$26.11Recreation

6$.7711$1.56O&M

Category

National Economic Impact $M

National Jobs

Supported

Regional Economic Impact $M

Regional Jobs

Supported

Construction $.09 1 $.05 1Employee

Compensation $1.03 11 $.42 9

FRM $10.55* * $10.55* *

Total 39.34* * $32.29* 231*

*Complete multiplier and job effects are not yet available for this category


FRM Benefits Nationwide


Impact of Ft. Knox


Impact of Ft. Knox

$186.5M of construction activity 19 Projects

►Includes the Human Resource Center of Excellence

Ft. Knox’s area offices employ 45►$3M (+) in compensation


Impact of Ft. Knox Activities

ScopeJobs

SupportedEconomic Impact

(millions)

National 4,537 $574.07

State 3,213 $332.35

Regional 2,630 $247.88


Impact of Wright-Patterson AFB



$44M of construction activity►16 Projects►Includes BRAC facility upgrades

Wright Patterson offices employ 30►$2M (+) in compensation



ScopeJobs


(millions)

National 1,116 $139.73

State 796 $80.09

Regional 719 $70.84


Impact of Scott AFB


Impact of Scott AFB

$34M of construction activity►10 Projects►Includes construction of Airman’s Dormitory

Scott project office employs 11►$1M in compensation


Impact of Scott AFB

ScopeJobs


(millions)

National 856 $106.87

State 608 $61.60

Regional 499 $45.88


Impact of Fort Campbell



$158M of construction activity►33 Projects►Includes Second Brigade Combat Team

Complex

Fort Campbell project office employs 53►$3M in compensation



ScopeJobs


(millions)

National 3,822 $488.56

State 2,753 $282.36

Regional 2,255 $210.49


LRL Navigation 8 Navigation dams 16 lock chambers

● Dual 1200’ locks at McAlpine and Smithland

● Dual 1200’ locks underway at Olmsted, planned for JT Myers

3 of the 5 busiest locks in nation● 5 of the top 10


LRL Navigation

1313McAlpine L/D

42L/D 5211L/D 53

76Newburgh L/D 67J.T. Myers L/D 53Smithland L/D

L/D Tonnage Rank Savings Rank

Cannelton L/D 12 12

Markland L/D 17 15

Ranked against 171 Lock and Dam project in the US

Inland Navigation Lock Projects: Estimations of Value and Main Chamber Closure Costs. Prepared by Navigation Economic PDT


Navigation Benefits

Increased transportation efficiency► Reduces operating costs for private businesses

• Average savings of $17 per ton using LRL waterways versus alternative means of transportation

Benefits passed onto consumers and back to producers► More coal, cheaper coal, lower energy bills

Fuel tax puts much of the cost of waterway navigation on those who benefit most

► Deposited into fund that pays for half of infrastructure improvements

► Encourages efficient use of waterway system


Navigation Benefits

Weighted Average

Other

Iron & Steel

Ores & Minerals

Chemicals

Grains

Aggregates

Petrol

Coal

Commodity

$17.05

$26.12

$33.77

$30.03

$50.32

$15.08

$11.25

$28.75

$8.16

Average Savings Per Ton

Savings from using LRL waterways versus next best transportation option


Navigation Benefits

More efficient transportation reduces traffic and pollution► 14.2 million metric tons less of CO2 emissions nationwide in

2005 than if trucks had been used► Equivalent to removing 2,730,769 cars from the road► Or, 2.1 million metric tons fewer than if trains were used;

403,846 cars Carefully selected and timed dredging minimizes impact

on marine species► Dredged materials can be used to create new animal habitat

Hydroelectricity plants on Corps dams provide green energy alternative

► Two are located at LRL dams with two more under construction


Navigation Benefits


Transportation Efficiency


Olmsted Locks and Dam

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Olmsted Locks and Dam

Total construction cost exceeds $2 Billion► Benefit-Cost ratio of 11.6

Will Replace L/D 53 and L/D 52► L/D 53 average annual non-additive savings are

$1,139,346,000► More annual savings than any other USACE lock; L/D

52 is fourth in the US► Temporary locks built in 1969 and 1979 have

significantly exceeded their 15 year design life► Replacement will reduce delays and ensure pool

longevity


Impact of Olmsted Locks & Dam

Category

National Economic

Impact

National Jobs

Supported

Regional Economic

Impact

Regional Jobs

Supported

Construction $280.44 2,215 $60.20 724

Employee Compensation $7.23 48 $.69 31

Total $287.67 2,263 $60.89 755


McAlpine Locks & Dam

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Impact of McAlpine L&D

Recently completed $429M expansion► Benefit-Cost ratio of 2.8

28 employees work at McAlpine► Over $2.3M in compensation

Pool provides recreation opportunities to over 100,000 annual visitors► Spending roughly $2M in the region

Average non-additive annual transportation savings of $657,667,000► 13th most savings of any US lock



36$2.9453$4.32Recreation

****Navigation

11$1.3520$2.76O&M

Category

National Economic

Impact

National Jobs

Supported

Regional Economic

Impact

Regional Jobs

Supported

Construction $105.4 833 $61.4 587Employee

Compensation $6.89 52 $2.84 44

Total $119.38* 957* $68.53* 678*

*Complete multiplier and job effects are not yet available for this category



100%

18%

39%

4%

18%

5%

2%

0%

9%

6%

PercentCommodity Tonnage Percent Value ($M)

Coal 18,200,850 36% $712

Petroleum 6,582,006 13% $1,000 Crude

Petroleum 126,377 0% $12

Aggregates 3,839,991 8% $203

Grains 3,581,666 7% $560

Chemicals 5,171,553 10% $2,160

Ores/Minerals 3,003,454 6% $458

Iron/Steel 8,073,248 16% $4,528

Other 1,471,532 3% $2,101

Total 50,050,677 100% $11,734


Top Congressional Districts Receiving Through McAlpine


Top Congressional Districts Shipping Through McAlpine


LRL’s Impact on the Louisville Metropolitan Statistical Area

The region receives benefits from seven flood risk management projects

► Including Taylorsville Lake and several local protection projects► Nearly $13M of damages were prevented

Ships or receives 7 million tons of goods through LRL navigation works

More than $68M spent staffing and maintaining local activities


LRL’s Impact on the Louisville Metropolitan Statistical Area

$20.43251Recreation

$12.95**FRM**Navigation

$5.1743O&M

Category Jobs SupportedEconomic Impact

(millions)

Construction 3,262 $318.61Employee

Compensation 1,247 $71.59

Total 4,803* $428.75**Complete multiplier and job effects are not yet available for this category


LRL’s Impact on Cincinnati Metropolitan Statistical Area

The region receives benefits from nine flood risk management projects►Newport, Covington, Cincinnati, Mill Creek►$56M in prevented damages


More than $4M spent staffing and maintaining local projects


LRL’s Impact on Cincinnati Metropolitan Statistical Area

$51.75605Recreation

$56**FRM**Navigation

$7.8266O&M

CategoryJobs

SupportedEconomic

Impact (millions)

Construction 67 $6.8Employee

Compensation 49 $1.32

Total 786* $123.69**Complete multiplier and job effects are not yet available for this category


LRL’s Impact on KY-02

$189M in construction spending► Fort Knox

$146M in spending by visitors to Corps Lakes The region receives benefits from six flood risk

management projects► Including Taylorsville Lake and Barren River Lake► $28.5M in prevented damages


More than $13M spent staffing and maintaining regional projects


LRL’s Impact on KY-02

$119.861,888Recreation

$28.54**FRM**Navigation

$9.3983O&M

Category Jobs SupportedEconomic Impact

(millions)


Compensation 139 $4.82

Total 4,704* $411.1**Complete multiplier and job effects are not yet available for this category


LRL’s Impact on the Commonwealth of KY

LRL builds and maintains dozens of projects across the Commonwealth►Over 125 construction projects in FY 08

totaled $410M in expenditures►Buoyed by its Louisville presence, the Corps

directly employed 930 workers• $67M in compensation outlays

►Serviced by 16 FRM systems, 12 recreation sites, 16 Lock chambers



$57.34**FRM

24.91207O&M

**Navigation

CategoryJobs


(millions)


Compensation 1,500 $88.26

Recreation 4,588 $282.24

Total 13,149* $1,163.87**Complete multiplier and job effects are not yet available for this category



LRL prevented $57.34M of Flood damages to Kentucky homes and businesses

23% of tonnage moved through LRL locks was bound to or from Kentucky

LRL expenditures and recreation created $515M of personal income in KY► $40M in sales and income taxes to the

Commonwealth



$9,377 99,362,09618,945,92028,786,79351,629,383TOTALS

$635 3,971,641278,7411,080,6902,612,210Other

$2,317 3,449,922175,1422,296,830977,950Iron & Steel

$136 1,661,92101,661,921**Ores/ Minerals

$1,118 2,795,64828,0602,218,639548,949Chemicals

$443 2,644,78238,876110,1892,495,717Grain

$1,380 26,730,6266,848,5562,580,67617,301,394Aggregates

$1,557 11,255,956704,1398,550,9992,000,818Petroleum

$1,791 46,851,60010,872,40610,286,84925,692,345Coal

Value (millions)TotalWithinReceivedShippedCommodity

Kentucky 2007 Waterborne Commerce


Value of Commodities


Conclusions

Even without FRM and Navigation multiplier effects, the results show LRL has a large impact on local and national economies

LRL navigation produces considerable economic savings

► Completion of current modernization will ensure benefits do not erode due to aging locks and dams

FRM reduces flood damages to families and businesses► Multipurpose lakes also provide recreation opportunities

Military construction supports national defense while adding a significant number of jobs to local communities

Federally induced output buttresses regional economies

lrl economic impact rcc oct 09

Documents

corps lake

economic output

impact of taylorsville

ttttttbuilding strongfy

lakebuilding strongfy

jobs economic models

economic savings estimates

total effects