2008 Week 31 in Review
July 27 to August 2, 2008
Sobre on display
I finished up most of the work on the Sobre las Olas just in time for the "Old-Fashioned Day in the Park" in Marina del rey. It's a free annual event at Chace Park , right near where the Sobre is moored. Lots of different "vintage" clubs - yachts, cars, motorcycles, etc - come to the park with their neat old stuff for enthusiasts to drool over:
Leading up to the show, I had to split my time between getting the engines running well and making the engine room shine, but it all went well and we had a good time. The engine room tours were only for those who really wanted to see it, as the dangerous ladder, small spaces and running equipment kept the engine room off limits for the masses. I gave about a dozen tours that went really well - but it's hard not to be dazzled by two beautiful Atlas-Imperial diesels running at the same time:
After the show, I finished up work on the Sobre, and ran the engines many times at the dock. Everything is working really well, the engines are holding water just fine, and I added some antifreeze and rust inhibitor.
an Update from the Maris Pearl
I heard from Jay on the Maris Pearl. The summer went great and the Brothers Islands were a favorite of course. Jay then single-handed the boat for some of the trip back down from Alaska to Seattle. I think that's awesome, because I dream of doing that with some of the boats I've run. It sounds like a lot of fun.
An Update from the Briana Marin
Ron Lopez is in town, so everyone thinking about owning the perfect little tug boat can visit the Briana Marin in Ballard.
Surprise news from the Catalyst
After I got back to Seattle, I thought I could sleep in and get caught up on my paperwork, but I got a call from Bill on the Catalyst. His engineer was sick and he needed a relief for six weeks starting Saturday. It was a hard choice: spend August in my shop, or keep the prettiest Washington diesel clean and running while leading glacier tours on the side... plus, Lia's already signed on as the naturalist and nature guide for the month.
I had to scramble to get everything in order before I flew out Saturday.
Off to Alaska!
We were ready by Saturday morning, but we missed our scheduled plane and had to catch the next one. We arrived in Juneau hungry. Since we knew that the captain would put us right to work once we got to the Catalyst, we stopped for lunch on the way and blamed our lateness on luggage problems. As predicted, we were rushed into meetings, training, cleaning, and preparing for the next trip without a pause for lunch.
By evening, we were very glad we ate the big lunch, but the sleep deprivation set in and we began making bad decisions like drinking and dancing in the Alaskan bar all night. We were very surprised by seeing some good friends we knew were up here but didn't expect to cross paths with. We closed the bar and oozed back to the boat like jellyfish on the beach at low tide.
Memories of the Mist Cove
The Mist Cove, another charter boat, is moored next door to the Catalyst in Juneau. I dropped by for a visit and to check out her Cleveland diesels. The boat has a very nice engine room with lots of space, and the stainless steel engines shine. Her Clevelands are 1,200 horsepower two-cycle engines from 1955. I've heard that they're only running one engine at a time to save fuel since they burn about 50 gallons an hour each at full. Whether or not that's true, she's still keeping her summer schedule of week-long cruises between Sitka and Juneau:
I spent three years working for The Boat Company as the Mist Cove's engineer, starting just after her first season out. The engine room was very cluttered and the boat, being brand new, lacked the attention to detail and comfort that I wrote about back in Week 28. One of my favorite projects was when I moved all sorts of equipment and gear away from the main engines. The Clevelands are historically significant and pretty interesting to look at, so I made them into showpieces and made the engine room look bigger and more inviting as a result. Now, you can roller skate around the engines, and every week, I polished every thing to give our twenty-four guests an amazing engine room tour.
I also reduced the electrical load so that an entire trip can be done without splitting the bus. This was a lot of work to gain no flickering lights with only one generator running at a time, but this continuing attention to detail is what makes a boat comfortable.
My three years aboard allowed me to fine-tune the engine room and all the boat's systems. I felt like it was dialed in really well, until the boat had to be prepared for Costa Rica. Outfitting a boat purpose-built for Alaska charter work for a company who has 25+ years in giving a great Alaska vacation to operate in completely different waters was very difficult. We had to install air-conditioning and a third generator, which cost a fortune and created a lot of problems to work out. In the end, the Costa Rica program was cut after only one season. I'm glad to see her back in Alaska, an area she's perfect for.
The tyranny of poorly-planned insurance requirements that are killing small businesses
Before I begin the Alaska trip, I need to get this off my chest.
My shop partner (an excellent shipwright who I've worked with for a long time) and I have discussed insurance many times this week under the rollup door. We determined that the insurance requirements are killing everyone-small business owners, yacht owners, and the workers in all maritime trades. We also decided that a small business is the best business model for maintaining yachts and workboats-turned-yachts. In addition to being self-sufficient, available when needed, and having a closer customer-to-contractor relationship than the big yards, the small businesses have cheaper rates. This is great for both the owners and the workers, but when it comes to insurance we get screwed. To make it worse, our customers have less money to pay us, because the insurance companies are screwing them, too. It's a double whammy.
I really believe that insurance is the foundation to good financial well-being. I also believe in only insuring that which you have, so if you do not have anything, spend your money first on getting stuff worth insuring. Start with health insurance if you're healthy and you are required to stay healthy to work. The self-employed already know that no one-corporation or yacht owner-cares about their health. Employees should understand the same is true for them no matter what "benefits" they get with a job. Everyone is responsible for themself and should get their own health insurance (and make sure to read the fine print! Adjust the options often to be sure cost of the benefits is fair).
As you acquire more stuff, you need more protection, which is when you should start insuring your stuff. Some small businesses choose to incorporate, so that their personal assets are protected from business decisions. This turns an "owner" into an officer and an employee (when Old Tacoma Marine Inc incorporated, I became the president as well as the lead mechanic, and I stopped being the owner). While this protects the people in the small business, it changes the insurance requirements. All employees must be insured by Labor and Industries, but state L & I will not insure anyone working on boats over 65 feet. Instead, a business must carry industrial insurance at the very high price of 25% of payroll. An employee making $48,000 per year in wages costs a small business an additional $12,000 per year in industrial insurance alone. It would cost even more, but the federal government subsidizes a small business pool that one underwriter carries, which lowers the premium down to the "reasonable level" of 25%, which is still very high for small businesses. (Incidentally, my rate as a mechanic is the same as those who work on nuclear submarines)
Now, I fully understand that boats can be dangerous, but I work mainly on yachts or charter boats-all with a much higher standard for safety than workboats. To me, the 65-foot insurance limit does a huge disservice to the contractors who work on them-especially small business. How does the length of the boat change the risk when you're working dockside in the engine room? Furthermore, the premiums are also based on payroll. I would think that this means the higher-paid workers are more experienced and more careful, making then expensive to insure, but the way the regs are written it means that a higher-paid employee needs more insurance.
These regulations keep me and other small businesses from hiring any other employees. With the rates that I work at, I can't afford to, even though the work is there and going unfinished!
A small business owner has still more woes, though. A normal wharf rat making $40,000 to $90,000 by working on old boats over 65 feet needs legal liability insurance in addition; to the industrial insurance discussed above. The minimum liability premium is $2,000 a year. Those on the $40,000 side feel that-ouch! This type of insurance is required for all types of businesses except sole proprietorship.
A final nail in the coffin for small businesses is that they're required to hold shop space leases in most marinas and shipyards. These costs add up to way beyond the actual costs (labor, materials, tools), and cause a chain reaction that undermines the small-business model ideal for yacht maintenance:
* Some businesses insure themselves and others do not
* Those who do insure themselves are in a small pool, so their rates are high
* The insured can't always compete with the uninsured rates, so they lose work
* The insured often can't hire help, so they try to do the work alone, which causes more claims
* More claims from one-person businesses raise the rates
* It severely punishes those who try to follow the rules and leaves the others afraid for their lives
And these are just the issues for the wharf rats and contractors doing the work. Owners of old boats are also taking a beating across the board. Old boats are too often sold at a low price. This allows people to buy a boat way outside their means. Many new boat owners don't realize the significant ongoing maintenance required to keep these boats going, and then seem surprised when the boat sinks (see Living the Tugboat Dream from Week 11). This information, which shows old boats to be a major risk, is used by the insurance company to determine rates, which leads to an even greater downside.
Due to this statistical risk, many insurance companies will not consider underwriting an old wooden boat, regardless of its actual condition. This could turn off a potential buyer with everything it takes to maintain an old boat.
How do we beat the system and keep boat maintenance and ownership costs down? Well, it takes teamwork, but here's what I think:
Owners: ask your workers to get insurance and show proof. This will increase the pool of insured workers, which will bring the price of labor down. Insist your workers keep good safety practices while on your boat (which will reduce claims), and pay the slightly higher price for your insured (and legal!) worker. Then, tell you congressional representatives to change the insurance requirements so pleasure boats and museum boats over 65 feet can be insured by the much more reasonable Labor and Industries program than the industrial insurance carriers. Last, be a safe boater, strive to meet Coast Guard requirements (even if not required), and constantly show your insurance company how safe you are by the classes you take and the systems you maintain.
Workers: get insurance. Learn the requirements, keep good records, and charge more for the peace of mind you offer the owner. If they do not want to pay for you to be insured, then don't work for them. Also be safe and minimize claims. It is very important to be insured, as it protects what you have earned.
Last but not least, Insurance Companies: you are the enemy. Your need to provide quarterly dividends and show growth is what is killing us. That is why I want to use the government's L & I program instead of the industrial insurance: it's not-for-profit. You profit by breaking our backs, so don't ever think that my pushing for compliance is to favor your "services."
I urge all of you to contact your congressional representatives to ask them to change the L&I 65-foot limit to a boat designation (yacht, supply boat, charter boat), and allow more small businesses to utilize the government's insurance programs that do not need to show growth and offer dividends.
OTM Inc Weekly eBay Auction
This week's prize from the OTM Inc shop is two El-o-matic Pneumatic Actuators for 3/4" valves: