## VALUING THE OTTAWA RIVER: THE ECONOMIC VALUES

AND IMPACTS OF RECREATIONAL BOATING

Prepared for the

Ottawa River Action Group of

the Maumee RAP (Remedial Action Plan)

by

Leroy Hushak, Professor Emeritus

Ohio State University

Columbus, Ohio

and

M ary Bielen, Agent

Ohio Sea Grant Extension

Toledo, Ohio



## December 1999FOREWORD

At the outset of this project, steps were in progress that when carried to completion would

improve and restore Ottawa River water quality and would identify riverbed area s containing

contaminated sediments. The Ottawa River Action Group of the Maumee RAP agree with these

actions. A next phase would be dredging river sediments for the purpose of improved navigation

for boaters and also for environmental remediation and ec osystem improvement.

The Ottawa River Action Group of the Maumee RAP was interested in a study of the

l o cal economic impact of the river’s boating activity and the river’s recreational value. They

wished to determine the impacts of river boating on the ar ea’s economy and what monetary

contribution local users are willing to make for dredging the river. Ohio State University (OSU)

Sea Grant Extension offered to conduct this economic study. The Point Place Business

Association and the river boating communi ty also support the study. The Action Group

proceeded to obtain a grant and voted for monetary support for the study.

OSU Sea Grant Extension prepared the study format, developed questionnaires, and

inte r viewed boaters and Ottawa River area businesses. Q uestions presented to boaters included

boa t ing trip frequency, purchases, taxes, environmental concerns, opinions, and perceived

boating trip frequency if enviro n mental and navigational dredging were to occur.

Local user responses provided positive answers that included support of a monetary

co n tribution for dredging. A summary of these values follows in a digest form in the Executive

Summary and in their e n tirety in the main body of the report.

It is our conviction the study results show sound economic b enefits and economic growth

potential for the City of Toledo and Ohio by restoring the river's navigability, ecology and

recre a tional use through long

- needed dredging.

James Haren, Representative

Ottawa River Action Group (ORAG) Member

Jolly Roger Sailing Club ORAG Representative

Ottawa River Affiliated Yacht Clubs ORAG Repr e sentativeACKNOWLEDGEMENTS

This research project has been conducted primarily by Ohio Sea Grant under the supervision

of the principal investigator and project director, Leroy Hush ak, Professor Emeritus, Ohio State

University with assistance from Mary Bielen, Ohio Sea Grant Extension agent, Toledo, OH.

Financial support for conducting this research was provided by the Lake Erie Protection Fund

(project # SG8798); the Ohio Sea Grant College Program (project R/ME

- 21

- PD, NOAA grant

NA86RG0053); and the Maumee River RAP and their Ottawa River Action Group. Special

thanks to West Marine for providing discount incentives to boaters who returned surveys. The

Associated Yacht Clubs organi zation represented by Jim Haren , and the Point Place Business

Association represented by Howard Pinkley encouraged and enlisted the participation of area

boaters and businesses in this project. These three main partners comprise hundreds of

businesses and members of the community who have been and continue to be supporters of and

collaborators for this project.1 TABLE OF CONTENTS

Page

EXECUTIVE SUMMARY 1

Existing Conditions 1

Research Findings 1

Recommendations 2

INTRODUCTION 3

Purpose of Study 3

Background of the Ottawa River Navigational and Environmental Conditions 3

Background of the Ottawa River Action Group 3

Brief Description of the Ottawa River Boating and Marine Trades Industry 4

Past Army

Corps of Engineers Studies & Findings 4

CURRENT SURVEY RESEARCH PROJECT

Background 5

Objectives 6

Research Methods 6

Overview of Surveys 7

Survey Highlights 7

Boater Surveys 7

Boat Characteristics 7

Trip Frequency 8

Boater Expenditures 9

Demographics 10

Business Survey 11

Key Results 11

Objective 1: Economic Value of Dredging 12

Objective 2: Potential Economic Valu e of Dredging 15

Objective 3: Direct Economic Impacts in 1998 17

Objective 4: Direct Economic Impacts if Dredged 18

Conclusions 19

ACTION GROUP RECOMMENDATIONS 21

APPENDICES

Appendix A: Recreational Boater Contact Survey Tabulatio ns Appendix B: Recreational Boater Participant Survey Tabulations

Appendix C: Ottawa River Area Business Survey Tabulations

Appendix D: Potential Funding Sources for Dredging

Appendix E: Businesses Participating in the Survey

Appendix F: Number of Boat Slips and Launches

Appendix G: Ottawa River Action Group Contacts2 LIST OF TABLES AND FIGURES

TABLES Page

Table 1: Boat Characteristics 8

Table 2: Trip Characteristics 9

Table 3: Values Used to Estimate Ottawa River Area Dock/Ram p

Use and Capacity 12

Table 4: Estimated Economic Value of Dredging Measured by

Willingness To Pay 14

Table 5: Economic Value of Dredging the Ottawa River and a

Connecting Channel to Lake Erie 19

Table 6: Current and Expected New Annual Sales and Income

Impacts of Dredging the Ottawa River and a Connecting

Channel to Lake Erie 20

FIGURES

Figure 1: Comparison of Contact and Participant Survey Boater

Expenditures 10

Figure 2: New Actions of Current Boaters in Response to Dr edging 13

Figure 3: Estimated Economic Value of Dredging Measured by

Willingness To Pay: Present Value of Annual Payment for

10

- Year Period Discounted at 5 Percent 16

Figure 4: Estimated Annual Sales and Value Added Impacts of Current and Potential

B oating Activity (In Millions of Dollars) 183



### VALUING THE OTTAWA RIVER: THE ECONOMIC VALUES AND

IMPACTS OF RECREATIONAL BOATING

EXECUTIVE SUMMARY

The purpose of this research is to provide the basis to build the necessary local financial

support to make dredging of the Ottawa River possible. The study provides input for

justification and financial support for both navigational dredging and contaminated sediment

dredging. Previous Army Corps of Engineers studies in 1976 and 199 1 found sufficient benefit

to

- cost ratios existed to justify navigational dredging of the Ottawa River and channel to Lake

Erie, but each project lacked a local sponsor to cost share it causing the Corp’s deferment to

dredge.

The Ottawa River area includes the Ottawa River downstream from the Suder Avenue

bridge to the connecting channel in the north Maumee Bay plus Halfway Creek and Hooper Run

in Michigan. Of the 16 yacht clubs and marinas, 11 are in Lucas County. The survey questions

were addressed to O ttawa River stakeholders who are area residents, club members, marina

o c cupants, and launch site users and businesses.

Existing Conditions

ß The use of the lower Ottawa River for activities such as swimming, fishing, and related water

activity was banned in the 1990’s by the Toledo Department of Health and the Ohio

Department of Health

.

ß Sedimentation and lake hydrologic effects are causing shallow Ottawa River channel depths

resulting in diminished boater activity and decreasing dock occupancy.

Research Findi ngs

ß The estimated economic impact from current Ottawa River boater activity to the local

eco n omy is $14 million in total annual sales of which $8 million is value added from

current boaters. (Reference Figure 4.)

ß The direct economic impact to local area businesses of dredging the Ottawa River and a

co n necting channel to Lake Erie, for navigational and environmental purposes , is nearly $5

million of additional annual sales. Nearly $3 million of this is additional income from new

or higher paying jobs at these businesses at full current capacity use. With increased

capacity, the increase in economic activity would be greater. In addition, if the dredging

does not occur, the $14 million in current annual sales

, of which $8 million i s current annual

income

, will erode as navigation of the river becomes more difficult. (Reference Figure 4.)

ß The estimated mean economic value to area boaters and businesses at full use of current

c a pacity of dredging the Ottawa River and a connecting channel to Lake Erie for

navig a t ional and environmental purposes is nearly $750,000 . (Reference Figure 3.)4

ß The estimated median economic value to area boaters and businesses of dredging the

Ottawa River and a connecting channel to Lake Erie for navigational and environmental

purposes i s over $400, 000 for a 10

- year time horizon. Current boaters and businesses are

willing to pay a minimum of $25 and $100, respectively, per year for 10 years for

navigational dredging. (Reference Figure 3.)

ß The Ottawa River boater values both navigationa l and environmental dredging

. Based

on willingness to pay, boaters placed higher value on navigational dredging, but four of the

six top ranked new activities respondents indicated they would participate in a f ter the river

w as dredged involve water conta ct sports and fishing. (Reference Fi g ure 2.)

Three surveys were conducted to obtain the information to make these estimates of

economic impact and economic value. Economic impacts and economic values are not additive,

but are two different ways of lookin g at the effects of dredging. Economic impacts are measures

of how the recreational boa t ing expenditures made by boaters’ affect sales of local businesses

and incomes of employees and property owners. Economic value measures the satisfaction

recreational boaters obtain from their sport. It is the "willingness to pay" for boating over and

above, or in excess of, what they spend to participate.

Recommendations

The Ottawa River Action Group of the Maumee RAP pr o poses to build local support for

dredging th e Ottawa River by presenting the result s of this research to boaters, businesses and

other stakeholders, as well as local, state, and federal government representatives and by

pu r suing the following actions in its dredging strategy over the next 18

- 24 month s:

• Identify and obtain a local government sponsor to provide partial financial support for a

dredging project. This will involve communicating with local and state officials initially and

on a regular basis as progress is made.

• Develop a local revenue p rogram for dredging with area marinas and yacht clubs based on

current boaters willingness to pay for dredging. Initial steps include communicating with

stakeholders to strengthen their willingness to join in a local sponsor partnership for

environmental and navigational dredging. This will involve communicating with the

stakeholder partnership as a whole, rather than target special interests.

• Request and develop the support of the Toledo Lucas County Port Authority Seaport

Division for providing local di sposal facilities for Ottawa River dredged material.

• Request and develop the financial support of the Army Corp s of Engineers after local

sponsorship has been determined and a commitment made

.

• Expand the support base for this project by seeking the involve ment of new people

representing the Ohio Division of Watercraft, banking community, colleges and universities,

economic development agencies, and other private and public sector participation.



### • Advertise progress and positive stakeholder attributes to the m edia.5



### VALUING THE OTTAWA RIVER: THE ECONOMIC VALUES AND

IMPACTS OF RECREATIONAL BOATING

INTRODUCTION

Purpose of Study

The purpose of this research is to provide the basis to build the necessary local financial

support to make dredging of the Ottawa Rive r possible. The study provides input for

justification and financial support for navigational dredging and environmental remediation of

the Ottawa River. Previous Army Corps of Engineers studies (1976, 1991) found sufficient

benefits

- to

- costs ratios exis ted to justify navigational dredging, but each study lacked a required

local sponsor to cost share the project resulting in the Corps deferment to dredge.

This study provides quantified estimates of the positive economic impact of current

Ottawa River boa ting activity and the additional economic impact that would occur if the river

were dredged. It also provides quantified estimates of the positive economic value of the Ottawa

River resource to current boaters and area businesses and the additional econom ic value to

potential new boaters and area businesses if the river were dredged.

Background of the Ottawa River Navigational and Environmental Conditions

The Ottawa River is 41 miles long and has a drainage basin of 178 square miles in Ohio

and Michigan. The lower section of the river (river miles 1

- 9) is located primarily within the city

of Toledo, Lucas County, Ohio except for an extensive broad estuary leading to the mouth in the

north Maumee Bay which is in Erie County, Michigan. Marinas and yacht cl ubs as well as

residential docks are located downstream from Suder Avenue, primarily below river mile 2. This

area plus Halfway Creek and Hooper Run in Michigan is referred to as the “Ottawa River area”

throughout this report.

Ottawa River community res idents, businesses and other stakeholders face two critical

problems related to Lake Erie. During periods of low lake levels and resulting shallow depths in

the Ottawa River, passage by all but small boats with the shallowest draft is prohibited. Even

du ring periods of higher lake levels, river depths often restrict the classes of pleasure craft able to

safely navigate the river. In addition, the water quality of the Ottawa River is classified as highly

polluted in the lower reach, which washes into the mouth of the river, and into Lake Erie.

Pollution derives from leaching industrial and municipal landfills, abandoned industrial sites, and

combined storm and sanitary sewer overflows located in the lower reach. The use of the lower

Ottawa River for acti vities such as swimming, fishing, and related water activity was banned in

the 1990’s by the Toledo Department of Health and the Ohio Department of Health. In order to

build local and other support for addressing these issues, economic information is need ed by

stakeholders.

Background of the Ottawa River Action Group

The Ottawa River Action Group developed as a cooperative effort between citizens,

industry, and government to address these environmental problems and the resulting negative

impact on the loc al economy. One of several focuses of the Action Group is investigating the

possibility of dredging the river downstream of Suder Avenue for improved navigation.6

Dredging of contaminated sediments primarily concentrated upstream of Suder Avenue is also

u nder consideration as a possible course of action, although other methods of remediation are

being considered by various local, state, and federal agencies involved with Ottawa River

remediation activities. The upstream pollution will need to be addressed as part of any

downstream navigational dredging plan.

The group meets regularly and operates as part of a larger coalition called the Maumee

River Remedial Action Plan, or Maumee RAP. This larger organization is also a coalition of

citizens, businesses, stakeholders and local governments attempting to restore the health of the

Maumee River and Bay ecosystem. In 1985, the lower Maumee River basin was classified as an

“Area of Concern” along with 42 other Great Lakes areas. This designation from the

Inter national Joint Commission (IJC) was assigned to geographic areas with degraded water

quality. The Maumee RAP formed to identify sources of water quality problems and to

implement activities that restore beneficial uses of these bodies of water. The Maume e RAP also

oversees and supports a number of other Action Groups concerned with environmental

restoration, preservation and remediation.

Brief Description of the Ottawa River Boating and Marine Trades Industry

The Ottawa River area, consisting of faciliti es on the Ottawa River plus those on Halfway

Creek and Hooper Run in Michigan, is comprised of 16 marinas or yacht clubs, two boat launch

ramps, one public and one private, and 60 additional businesses serving recreational boaters. Of

the 16 marinas and y acht clubs, 11 are on the Ottawa River, one of which, Lost Peninsula, is in

Michigan, and five serve Halfway Creek and Hooper Run in Michigan. The marinas and yacht

clubs on the Ottawa River have a total of 1,642 slips or docks, 908 at Ohio facilities and 734 at

Lost Peninsula in Michigan. The Halfway Creek and Hooper Run marinas in Michigan have 530

slips, providing a total of 2,172 slips for area boaters.

The two launch ramps are located in Michigan. The private launch ramp is at State Line

Marina whe re boaters must pay a fee to launch their boats; 1,000 launches were estimated during

1998. The public ramp is at Halfway Creek where attendants were present on weekends from

Memorial Day through August 23. When an attendant is present, a launch or ramp fee is

charged. The attendants recorded 984 boat launches on weekends during 1998. Since boaters

use the public ramp during the week and on weekends before and after the attendants are present,

we assume that the number of launches during unattended peri ods is equal to those during

attended weekends, yielding an estimated 2,000 launches during 1998. The total boat launches

during 1998 is estimated at 3,000 for the two ramps.

A total of 77 businesses serving the Ottawa River area were identified by the c o

investigator with the assistance of members of the Ottawa River Action Group. When surveyed,

one of the businesses no longer existed because of the death of the owner.

Past Army Corps of Engineers Studies & Findings

Ottawa River area residents have lon g desired dredging of the Ottawa River and a

channel into Lake Erie. The Army Corps of Engineers, as the primary federal agency

responsible for dredging of navigable waters, undertook feasibility studies to determine if a

sufficient benefits

- to

- costs rati o existed to warrant further federal interest in a dredging project.7

Both the Detroit District (1976) and the Buffalo District (1991) of the Army Corps of Engineers

have undertaken studies in the past. With both studies, the Corps found a sufficient bene fits

- to

costs ratio existed, but because of a lack of a local sponsor to cost share the project, the Corps

terminated their efforts. The identification of a local sponsor, usually a local or state government

agency, is key to the progress of the local dre dging project. Without this local sponsor, Corps

policy dictates deferment.

A local sponsor will be necessary in order for the Action Group to proceed with dredging

the river and a channel to Lake Erie. It is therefore critical that the Action Group int erest a local

government agency in the importance of dredging the Ottawa River. Future strategies for the

Action Group in regard to building local public and private sector support for dredging of the

river and a connecting channel to Lake Erie are addres sed in the Action Group Recommendations

section at the end of this report

.

CURRENT SURVEY RESEARCH PROJECT

Background

In this research project information is developed to support local strategies to address the

siltation and pollution problems of the Ott awa River. First, the effects of dredging on the

recreational value of boating on the Ottawa River are estimated. Second, the effects of changes

in water quality on the recreational value of boating are estimated. And finally the direct

economic (sales, income and employment) and fiscal (tax revenue) impacts on the local economy

of dredging the Ottawa River for recreational navigation purposes and of water quality changes

are estimated.

The purpose of these quantitative estimates is to provide input to the Maumee River

(Area Of Concern) RAP (Remedial Action Plan) and, specifically, their Ottawa River Action

Group, to build local interest, justification and financial support for environmental remediation

and navigational dredging of the river. Stakeholde rs believe the current river conditions

adversely impact the economic, social and environmental climate of the area. It is expected that

environmental remediation and navigational dredging of the river will have positive economic

and environmental impacts . This in turn will improve the environmental quality of the nearby

Maumee Bay portion of Lake Erie.

The results from this project provide information for local residents to better understand

the effects of dredging and water quality changes on the recre ational value of boating in the area

and also on the economic and fiscal impacts of dredging (or not dredging) the Ottawa River.

These estimates also help local government and other decision makers to better allocate scarce

resources to address the siltat ion and pollution problems present in the Ottawa River. In

addition, this research furthers the Maumee River RAP goals of improving area water quality.

Although the Army Corps of Engineers previously conducted an evaluation of six

possible dredging scena rios of the Ottawa River and identified one with a sufficient benefits

- to

costs ratio to warrant further Federal interest, research to establish the basis for local support was

not conducted. The purpose of this research is to provide the basis to build t he necessary local

financial support to make dredging of the Ottawa River possible.8

Objectives

The general objective of this research is to provide economic information about the

effects of dredging the Ottawa River on recreational boating on the Ottawa Ri ver and related

waters and the resulting impacts on area businesses. In this study, the Ottawa River area

includes the Ottawa River plus Halfway Creek and Hooper Run in Southeastern Michigan which

would benefit from a dredged channel to Lake Erie for acce ss to the Lake. There are four

objectives:

1. Estimate the economic value of dredging the Ottawa River and a connecting channel to

Lake Erie to recreational boaters who used the Ottawa River area during 1998.

2. Estimate the economic value of dredging the Ott awa River and a connecting channel to

area recreational boaters who would use the Ottawa River area if dredged.

3. Estimate the direct economic and fiscal impacts of dredging the Ottawa River and a

connecting channel by recreational boaters who used the Otta wa River area during 1998.

4. Estimate the economic and fiscal impacts of dredging the Ottawa River and a connecting

channel by area recreational boaters who would use the Ottawa River area if dredged.

Research Methods

To accomplish these general objectives , three surveys were conducted:

1. A survey of 301 recreational boaters who used the Ottawa River area during the 1998

boating season, called the contact survey or CS

.

2. A survey of 300 recreational boaters who resided within the Ottawa River area during the

1998 boating season , called the participa nt survey or PS.

3. A survey of 77 area recreational businesses who serve the Ottawa River area.

Economic values and economic and fiscal impacts are not additive, but are two different

ways of looking at the effects of dredging. Economic value measures the satisfaction

recreational boaters obtain from their sport. It is the "willingness to pay" for boating over and

above, or in excess of, what they spend to participate in recreational boating. The contingent

value approach is used to estimate economic values from responses to the Improving the Ottawa

River Resource section (questions 22

- 26 ) of the two questionnaires. Economic impacts, on the

other hand, are measures of how the recreational boating expenditures made by boaters affect a

local or regional economy and the resulting effects on employment , and income to labor,

management and property. Economic impact estimates are limited to direct impacts; multiplier

impacts are not estimated in this study.

Often, econ omic values are State or National in scope because participants in an activity

or users of a resource are statewide or national in scope. In the present case, most users of the

Ottawa River area are people from the local area, so the economic value of dre dging the Ottawa

River and connecting channel to Lake Erie is generated locally. Economic impacts are nearly9

always local even when economic values are state or national in scope. It is local businesses and

their employees who are most affected by change s in use of a resource, even a national resource.

Overview of Surveys

Three surveys were conducted. For each survey, sample members received up to three

mailings. First, they were mailed a copy of the questionnaire with cover letters from the Ottawa

Riv er Action Group and from the principal investigator along with a return envelope. If they did

not respond within two weeks, they were mailed a post card reminding them to return their

surveys. If they did not respond after four weeks, they were mailed a second questionnaire with

a letter from the principal investigator and a return envelope. Action group members also

followed up with area businesses to increase the response rate for the business survey.

A total of 301 recreational boaters who used the O ttawa River during 1998 were

contacted at sites in Ohio and Michigan during late May through July of the 1998 boating season

and asked for their address. These boaters then received the respective mailings on October 22,

November 5 and November 19. Of th e 301 boaters, 110 returned questionnaires for a response

rate of 37 percent; 12 questionnaires could not be delivered. This survey is referred to as the

contact survey (CS) throughout the report.

The second boater survey, called the participa n t survey ( PS), was sent to 300 area boaters

randomly selected from boat registration lists in Ohio and Michigan. Of the 300 boaters, 200

were randomly selected from Lucas (150), Fulton (25) and Wood (25) Counties, and 100 from

Monroe County, Michigan. There were o ver 21,000 registered boats in these three Ohio counties

and 11,000 in Monroe County, Michigan. Mailings were made on October 22, November 2 and

November 19. A total of 58 responses were received for a response rate of 19 percent; 13

questionnaires could not be delivered.

A total of 77 area businesses were identified as recreation oriented, of which one was out

of business at the time of the survey. The business owners/managers received mailings on

October 13, October 27 and November 10, after which the co

- investigator and members of the

Action Group followed up with personal calls to increase the response rate. A total of 28

questionnaires were returned for a response rate of 37 percent.

Survey Highlights

Boater Surveys

The two boater surveys are hig hlighted in this section, and differences in respondent

characteristics are pointed out. A complete tabulation of the two questionnaires is in Appendices

A and B. We look at boat characteristics, trip frequency, boater expenditures, and demographics

of b oat

- owning households.

Boat Characteristics

The typical respondent househ old in the contact survey (CS) owned 1.6 boats compared

to 1.7 in the participant survey (PS). Respondents who owned more than one boat were asked to

report on two boats . In the CS , 108 respondents reported primary boats and 46 reported second

boats while in the PS, 55 respondents reported primary boats and 24 reported second boats.10

Table 1 highlights boat characteristics reported by the two groups. For example in the CS, the

larg est group of the primary boats were cabin motor boats (65 percent), and the largest group of

the second boats were inflatable (30 percent). In the PS, 27 percent of primary boats were cabin

motor boats and 25 percent of second boats were open motor boats. Only 9 personal watercraft

were reported in the two surveys combined which reflects the contaminated state of Ottawa

River water. Fourteen sailboats were reported in the CS compared to 8 in the PS.

In the contact (or user) survey , propulsion systems w ere equally divided between inboard

and inboard/outboard (I/O) drives for the primary craft (35 percent each) but second boats were

dominated by outboards with 58 percent. The median length of primary boat was in the 26

- 32

foot class; the second boat was in the 14

- 16 foot class. In the participant (or area boater)

survey , primary boats were comprised of 33 percent I/O and 26 percent outboard while 40

percent of second boats were outboard. The median length of the primary boats was 16

- 21 feet

and of secon d boats 14

- 16 feet. The book values of the primary and second boats from the CS

are substantially higher than the PS. A majority of CS primary boats are kept at the boating site

both in season and off

- season while a majority of CS second boats and both p rimary and second

boats in the PS are kept at home.

Trip Frequency

The typical contact survey (CS) boater reported over 50 household trips during 1998 of

which 33, or 66 percent, were to Ottawa River area sites. The typical participant survey (PS)

boate r reported about 26 trips during 1998 of which 5 were to Ottawa River area sites (Table 2).

Only 24 of 53 respondents reported trips to the Ottawa River area, making about 11 such trips.

However, 20 of 26 PS trips were to Lake Erie. In both surveys, abo ut one in four trips was an

overnight trip. The mean and median distances traveled were shorter for the contact survey

(CS), but in both cases boaters did not travel far to their boating site. Ottawa River area boaters

spent the largest amount of time cr uising while the participant survey respondents spent the most

time fishing. Characteristics Primary Boat Second Boat Primary Boat Second Boat

Most frequent boat (%) Cabin Motor (65) Inflatable (30) Cabin Motor (27) Open Motor (25)

Propulsion-- 1 (%) I/O (36) Outboard (58) I/O (33) Outboard (40)

Propulsion-- 2 (%) Inboard (35) I/O (18) Outboard (26) Hand Power (26)

Median length, ft 26-32 14-16 16-21 14-16

Mean book value, $ 26,604 7,408 16,044 3,342

Most frequent location

In Season (%) Ottawa River Area (74) At home (49) At home (56) At home (67)

Off-Season (%) Ottawa River Area (57) At home (74) At home (53) At home (67)

I/O= Inboard/Outboard Table 1: Boat Characteristics

Contact Survey Participation Survey11

In both surveys, the number of trips varied depending on where the boat was kept during

the boating season. The joint response of boaters who answered both questions 13 (locati on of

boat during boating season) and 19 (number of trips to the Ottawa River area) was tabulated.

From the CS, 16 respondents kept their primary boat at home and made an average of 38 trips to

Ottawa River area sites. This compares with 32 trips for 73o f the CS respondents who kept their

primary boat docked at an Ottawa River area marina or club and 30 trips for 9 of the CS

respondents who kept their primary boat at a marina or club somewhere else. In the PS, 28

respondents kept their primary boat at ho me and made an average of 18 trips to all sites. This

compares with 8 PS respondents who kept their boat at an Ottawa River area site and made an

average of 28 trips, and 16 PS respondents who kept their boat elsewhere and made an average

of 41 trips. Th irteen PS respondents who kept their primary boat at home reported making 9

trips on average to Ottawa River area sites. The greatest difference in the two samples is in

respondents who kept their primary boat at home; those in the CS made many more trips to

Ottawa River area sites than PS respondents made to all sites.

Boater Expenditures

Average trip expenditures per household for Ottawa River area trips from the Ottawa

River area contact survey (CS) were $197.39 per trip, and at 32.8 trips per househ old, nearly

$6,500 per year (Figure 1). In addition, CS boaters spent about $2,000 on maintenance, fees and

repairs, and equipment purchases exclusive of boats, yielding household expenditures of nearly

$8,500 in 1998. By contrast, participant survey (PS ) households spent $135.41 per trip, and took

26.4 total trips for total trip expenditures of $3,569. They spent an additional $2,080 on

maintenance, fees and repairs, and equipment purchases for total expenditures exclusive of boat

purchases of nearly $5 ,650. Contact Survey Participation Survey

Mean trips

to Ottawa River Area 32.8 4.9

to other sites 17.7 21.3

Trip duration

Day trips 29.3* 20.5

Overnight trips 9.6* 7.4

Distance traveled to site, mi.

Median less than 10* 10 to 20

Mean 13.6* 22.8

Primary activities (%) Cruising (38)* Fishing (41)

Fishing (21)* Canoeing etc. (14)

*Ottawa River Area only Table 2: Trip Characteristics12

Boat purchases added substantially to total boater expenditures in 1998. On average, user or CS respondents spent $6,912 purchasing new or used boats compared to $4,841 for area or PS

respondents. Boat loan payments averaged $1,667 from the C S survey compared to $375 for PS

survey respondents. Boat purchase revenues are only partially captured by boat dealers because

about 85 percent of the price of a boat goes to the manufacturer/distributor for new boats or to

the previous owner in the case of used boats. The remaining 15 percent of boat purchases from

area boat dealers represent services provided by the dealers and are direct economic impacts to

the local economy; boat loans contribute to economic activity in the financial sector. Boater

expenditures are graphically presented in Figure 1.

Contact survey respondents reported making 74 percent of their boating expenditures

within the Ottawa River area. Thirty

- four percent of participant survey respondents made 46

percent of expenditures wi thin the area, or about 16 percent (0. 74x0.46) of all respondent

expenditures

.

Demographics

Demographic details of the two sets of respondents are in Appendices A and B . The

demographic characteristics of the two groups are very similar with respect to age, education

level, household size, employment status and income, i.e., the background characteristics of

these households are similar.

Figure 1: Comparison of Contact and Participant Survey Boater Expenditures

6,484

1,495

516 8,495

6,912

1,667 3,569

1,072 1,001 5,642

4,841

375

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000

Trip Expenses Maintenance,

Repairs Equipment

Purchases Expenses Less Boat Boat Purchases Boat Loan Payments Contact Survey

Participation Survey13

Business Survey

The business survey tabulation is found in Appendix C . The median business responding

to the surve y had sales of $100,000 to 300,000 in 1997, or $200,000 at the mid

- point of this sales

class. The median sized business is the central or middle business, i.e., of the 26 businesses

reporting sales, the median business is the 13 th or 14 th business when ra nked by sales. Using the

mid

- point of the sales classes, mean sales were about $492,000. The mean is larger than the

median because of 4 large businesses with sales between $1 and 3 million. The typical business

employs 7.3 permanent full

- time, seasonal full

- time and seasonal part

- time people. Over one

half of the respondents reported that over 50 percent of gross revenues in 1997 were derived

from Ottawa River area activity.

Property, income, workers comp, and unemployment taxes reported by the 28 re sponding

businesses totaled $253,441. In addition, 13 of these businesses reported collecting $228,890 in

sales taxes. The mean total book value reported by 17 of the businesses (real property, buildings,

docks, equipment, inventory) was nearly $450,000, with a replacement cost of about $1 million.

Because only 4 to 13 businesses reported itemized tax information, the fiscal contribution of

these businesses is not estimated. Water depth and marina dredging needs were two top

- ranked

limitations to busine ss expansion.

Seventeen responding businesses reported a total of 2,095 slips or docks compared to

2,172 at 16 marinas and yacht clubs reported earlier from a phone survey of marinas and yacht

clubs by the co

- investigator. Some of the docks reported in the survey are temporary docks

which belong to restaurants or other facilities needing temporary dockage for boating customers.

Fourteen of the respondents reported an average occupancy rate of 64 percent; three reported a

waiting list. However, there is a wide variation in occupancy rates and the larger marinas tend to

have higher occupancy rates; Lost Peninsula in particular has over one

- third of the total docks

and a high occupancy rate. As an alternative an occupancy rate weighted by number of docks

was calculated. Thirteen of the 14 respondents reporting occupancy also reported numbers of

docks; the weighted average occupancy rate for these 13 respondents is over 78 percent. Several

facilities reported low occupancy rates because of low water, a co ndition which will get worse

unless the river is dredged. Total boating households with docked boats in 1998 was estimated

at 1,700 (2,172x0.78=1694).

Key Results

The critical results of the study are those which are used to estimate the economic value

a nd economic impacts of dredging the Ottawa River to current boaters using the river and to the

potential of attracting additional boaters. These results are developed by focusing on each of the

study objectives. Two results are needed for estimation of e conomic values and economic

impacts of Ottawa River area activity. First, an estimate of Ottawa River area capacity is

needed, which is the 2,172 docks reported by marinas, and the 1998 use of that capacity, which

is the estimated 78 percent occupancy rat e or 1,700 boating households (Table 3).

Second, an estimate of the use and capacity of the two ramps is needed. The estimated

use during 1998 is the 3,000 launches estimated above. The average respondent in the contact

survey ( CS ) made 33 trips to Otta wa River area sites; those who kept their primary boats at home

made an average of 38 trips. Using 38 trips for these respondents, about 80 different CS boating14

households account for these launches during 1998 (Table 3 ). However, participant survey ( PS )

respondents who kept their primary boats at home reported 9 trips to area sites, suggesting over

300 boating households could be making these 3,000 launches. Increased use must come from

PS type respondents.

The private ramp does 50 launches per week wh ile the public ramp does 75

- 80 launches

over a 3

- day weekend, which makes them appear to be greatly underutilized. The estimated

capacity of these two ramps is easily 6,000 launches per year, double the estimated 3,000 in

actual use (Table 3). An additio nal 300 boating households of the PS respondent type could

easily be accommodated at these ramps, assuming they don't come at the same time.

Objective 1

Economic value of dredging the Ottawa River and a connecting channel to Lake

Erie to recreational bo aters who used the Ottawa River area during 1998. To accomplish

objective 1, we use information from the section Improving the Ottawa River Resource,

questions 22

- 26, of the contact survey (CS ), Appendix A . Respondents indicated they would

increase Ottaw a River area trips by an average of 16.5 percent in response to dredging for safe

recreational navigation (question 22) and by an average of 16 percent in response to dredging of

contaminated sediments (question 24). From (22), 78 percent would increase t rips by an average

21.2 percent while 22 percent would make no change for navigational dredging; from (24), 72

percent would increase trips by an average 22.2 percent while 28 percent would make no change.

While these changes cannot be added, area boaters can be expected to increase trips to Ottawa

River area sites by15 to 20 percent (5 to 7 trips per year) in response to either navigational,

environmental, or joint dredging.

Factors Value

Dock Capacity 2,172

1998 Dock Occupancy Rate (%) 78

1998 Dock Usage = # of Boater Households Using Docks 1,700

Current Unused Dock Capacity 470

# of Launches at Ramps per Boating Season 3,000

Launch Capacit y at Ramps per Boating Season 6,000

Current Unused Launch Capacity 3,000

# of "Contact Survey" Households Using Ramps 80

# of "Participant Survey" Households Using Ramps 300

Total # of Michigan Registered Boats (Monroe County) 11,000

Total # of Ohio Registered Boats (Lucas, Wood and Fulton Counties) 21,000

Average # of Boats per Ottawa River Area Household 1.7

Total # of Boater Households (Monroe County) 6,500

Total # of Boater Households (Lucas, Wood and Fulton Counties) 12,000 Table 3: Values Used to Estimate Ottawa River Area

Dock/Ramp Use and Capacity15

Activity changes boaters would make in response to navigational and contaminat ed

sediment dredging (question 26) suggest environmental dredging is of greater importance to

more respondents than navigational dredging. Of 101 respondents, 65 would swim in the Ottawa

River, 63 would sport fish, 41 would purchase a larger boat, 34 woul d water ski, 30 would use a

personal watercraft, and 27 would purchase a boat with a deeper draft (Figure 2). Four of these

six involve contact with water, activities currently prohibited because of contaminated water.

The responses to the willingness t o pay questions suggest that navigational dredging has

the greater value, however. In question 23, the median (or middle) respondent household would

pay $25 per year for 10 years for navigational dredging; the mean of responses is $42.55. One

fourth of 1 04 respondents said they would not pay anything for navigational dredging. Both

median and mean estimates are presented because it is the median that is used to design a

referendum which would be expected to pass; it is also the more conservative estimate . For

example, if a referendum on navigational dredging were designed for Ottawa River area boaters,

one would expect a referendum which asked boaters to pay $25 per year for 10 years to pass

because the median voter is the last vote needed for a majority

.

In question 25, the median respondent household would pay $10 per year for 10 years for

dredging to remove contaminated sediments from the Ottawa River; the mean willingness to pay

is $37.59. Thirty

- one percent of respondents would not pay anything for contaminated sediment

dredging. F igure 2: New Ac tions of Current Boaters in Response to Dredg ing

65 63

41

34

30

27

0 20 40 60 80

Swim in Ottawa

R iver Sport fishing Purchase larger

boat W ater ski U se personal

watercraft Purchase deeper

draft boat New Activity# of Respondents16

Since respondents were asked for the maximum payment level for a 10

- year period, t he

median and mean payments per year are then converted to the present value of an annuity for 10

years. At a discount (interest) rate of 5 percent, the present value of a one dollar annuity for 10

years is $7.72. For navigational dredging, the present value of the median payment of $25 is

($25x7.72) $193; the present value of the mean payment of $42.55 is ($42.55x7.72) $328 (Table

4). For c ontaminated sediment dredging, the present value of the median payment of $10 is

($10x7.72) $77, and the present value of the mean payments of $37.59 is ($37.59x7.72) $290.

Since the navigational and contaminated sediment dredging estimates cannot be add ed,

the larger of the two for navigational dredging is used to estimate total value. Multiplying the

net present value of the median ($193) or mean ($328) willingness to pay by the 1,780 boating

households who used the Ottawa River area during 1998 yields the total willingness to pay for

navigational dredging of the Ottawa River and a channel to Lake Erie. The total of boating

households is comprised of 1,700 who docked boats and 80 who used the two boat ramps. The

total willingness to pay estimate for t he median is ($193 x 1,780) $343,540, and for the mean is

($328 x 1,780) $583,840 (Table 4).

In addition to boating households, Ottawa River area businesses were asked how much

they would be willing to pay each year for 10 years to have the river and c onnecting channel

dredged for navigation and contaminated sediment removal ( See Business Su r vey , Apprendix C

, question 25). The median willingness to pay was $100 while the mean was $196; 23 of 28

businesses responded. In question 26, 13 business respond ents said navigation and contaminated Willingness-to-Pay

Ottawa River Area Ottawa River Area

Current Users

median $193 $343,540 $77 N/A

mean $328 $583,840 $290 N/A

Potential Users

median $0 $0 $0 $0

mean $39 N/A $62 $47,740

Businesses

median $772 $58,672

mean $1,513 $114,988

Table 4: Estimated Economic Value of Dredging

Per Household

*Willingness To Pay = Present Value of the Annual Pa yment for the 10 Year Period Discounted at 5% or Business Per Household

or Business Navigational Dredging Environmental Dredging Measured by Willingness To Pay*17

sediment removal were of equal importance, 7 said navigation was more important and 3 said

contaminated sediment removal was more important.

Using the same 5 percent discount rate for 10 years which yields an annuity factor of

7.72, the present value of the median willingness to pay is ($100 x 7.72) $772 and the present

value of the mean willingness to pay is ($196 x 7.72) $1,513. If these estimates apply to all 76

businesses, the willingness to pay for dredging is ( $772 x 76) $58,672 at the median and ($1,513

x 76) $114,988 at the mean (Table 4).

Objective 2

Potential economic value of dredging the Ottawa River and a connecting channel to

area recreational boaters who would use the Ottawa River area if dredged. To accomplish

objective 2, information from the section Improving the Ottawa River Resource, questions 22

- 26,

of the p articipation s urvey (PS ), Appendix B is u s ed

. Although there is some inconsistency in

responses across questions 19a, 22, 23 and 25, it is concluded that about 40 percent of sample

respondents used the Ottawa River area for boating during 1998; the responses of these users to

the dredging alternatives are similar to those from the contact survey . Another 42 to 44 percent

responded that they would not use the Ottawa River area even if it is dredged. The remaining 16

to 18 percent are potential users under the dredging alternatives. In (23) 18 percent (10 of 56)

said they would use the area for 25 percent of trips (6 to 7 trips) if dredged for navi gation. In

(25), 16 percent (9 of 57) said they would use the area for 15 percent of trips (4 trips) if

contaminated sediments were removed.

There is an obvious response bias in the participant survey with a much higher proportion

of boaters who use th e Ottawa River area responding than boaters who have no interest in the

area. Lucas, Fulton and Wood Counties in Ohio have over 21,000 registered boats, which at 1.7

boats per household means there are over 12,000 boating households in these three countie s. Monroe County, Michigan adds about 11,000 registered boats or nearly 6,500 boating

households at 1.7 boats per household, yielding over 18,000 boating households within the area.

At capacity of about 2,172 docks, Ottawa River area marinas could accomm odate about

12 percent of boater households. In addition, the two public ramps in the area could

accommodate an additional 300 boaters, or 2 percent of area boating households. This leaves 86

percent who cannot be accommodated at current Ottawa River are a facilities, in contrast to 60

percent of survey respondents. If it is further assumed that respondents to the PS who are

interested in using the Ottawa River area responded at twice the rate as those who would not use

it under any conditions, then the p roportion of those who would use the area if dredged is

reduced from 16

- 18 percent to 8

- 9 percent. Eight percent of 18,000 households is 1,400

potential households as users of Ottawa River area facilities, which far exceeds the current

unused capacity of the area.

Unfortunately, these potential boaters are not willing to pay very much for dredging the

Ottawa River and connecting channel to Lake Erie. Six of 10 would pay nothing for

navigational dredging and 5 of 9 would pay nothing for environmental dred ging. The resulting

median willingness to pay from both types of dredging is zero. The median willingness to pay

for both types of dredging is also zero for all sample respondents, i.e., more than 50 percent of18

respondents said they would pay zero in eac h dredging question, because those who would never

use the Ottawa River area would pay zero for its dredging. The mean willingness to pay for

navigational dredging by the 10 potential users is $5.00, and for environmental dredging by the 9

potential users is $7.55. The mean willingness to pay by all respondents is much higher, (see

Appendix B , questions 24 and 26) , but is driven by the respondents who use the area and whose

valuation is accounted for in the contact survey results above.

The net present value of the median willingness to pay per year is zero. The net present

value of the mean willingness to pay for navigational dredging is ($5x7.72) $39 and for

environmental dredging is ($8x7.72) $ 62 (Table 4).

The larger economic value of environment al dredging is used to estimate the total value

as the product of the present value of the willingness to pay and the number of new boating

households the Ottawa River area is able to absorb to reach capacity. This increase is estimated

at 770 households, comprised of 470 households who would use the open docks and 300

additional households who keep their primary boats at home and trailer them to the public ramps.

The estimated economic value of potential new users is zero at the median willingness to pay and

($62 x 770) $47,740 at the mean willingness to pay

.

The estimated economic value of dredging the Ottawa River to current and potential

boaters and to area businesses from objectives 1 and 2 is graphically presented in Figure 3. The

total economic va lue is $402,212 at the median and $746,568 at the mean willingness to pay of

respondents. Figure 3: Estimated Economic Value of Dredging Measured by Willingness To Pay:

Present Value of Annual Payment for 10-Year Period Discounted at 5 Percent

$343,540

$0 $58,672 $402,212

$583,840

$47,740 $114,988 $746,568

$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000

Current boating households Potential boating households Area businesses Total Median

Mean19

Objective 3

Direct economic and fiscal impacts of dredging the Ottawa River and connecting

channel by recreational boaters who used the Ottawa River area during 1998. The direct

economic and fiscal impacts of recreational boating in the Ottawa River area are comprised of

boater expenditures in the area and the tax revenues generated by those expenditures. The direct

economic and fiscal impacts of dredging are the exp ected new expenditures by current boaters as

a result of navigational or environmental dredging. The impacts of new boaters are estimated

under objective 4. The contact or user survey data on boater expenditures provides the basic

information for direct economic impacts, supplemented by the business survey. Fiscal impact

information comes primarily from the business survey, which unfortunately is poorly reported

and not estimated.

From the contact survey ( CS ) , the average boater household spent $8,495 o n boat trips to

the Ottawa River area and on maintenance, fees and repair and equipment purchases (Figure 1)

. In addition each household spent an average of $6,912 purchasing boats and $1,667 on boat loan

payments. Using information from questions 9 and 10, about o ne

- third of the boats were

purchased as new boats and about one

- half were purchased from dealers (the remaining boats

were purchased from other individuals). In addition, about 85 percent of the retail cost of new

boats goes to the boat manufacturer and w holesaler, leaving 15 percent to be captured by the

boat dealer or marina. For used boats sold by dealers, it is assumed that 85 percent of the price

goes to the previous owner and 15 percent to the dealer. Since 50 percent of boats were

purchased throug h dealers, 15 percent of the 50 percent of boats sold by dealers is included, or

7.5 percent of the boat purchases reported by survey respondents. This amount is

($6,912x0.075) $518 per household. The total estimated expenditure per boating household

dur ing 1998 is $8,495 + 518 = $9,013.

From this expenditure of $9,013 per boating household who used the Ottawa River area

during 1998, total expenditures can be estimated as the product of per household expenditure and

the estimated number of households who used Ottawa River area facilities during 1998. This is

$9,013 x 1,780 = $16,043,140. In other words, area boaters are estimated to have spent $16.0

million on Ottawa River area recreational boating trips during 1998. In addition, ($1,667 x

1,780) nearly

$3.0 million was paid to financial institutions as boat loan payments.

However, not all of these expenditures were made at Ottawa River area businesses. The

CS respondents indicated they made an average of 74 percent of their expenditures in the area.

Expenditures made by these boaters in the local Ottawa River area economy are estimated at

($16,043,140 x .74) $11.9 million. The local share of boat loan payments is estimated at $3.0

million x .74 = $2.2 million.

If Ottawa River area trips increase by 15 to 20 percent, then trip, maintenance, fees,

repair and equipment expenditures are likely to increase by 15 to 20 percent, or by $1.8 million

to $2.4 million, or about $2.1 million. Initial impacts from boat purchases could be larger if

boaters follow through by purchasing larger, deeper

- draft boats. After the initial impacts, it is

not clear that an increase of 15 to 20 percent would be maintained for boat purchases and boat

loan payments. Boat loan payments would increase an expected $330,000 to $4 40,000, or about

$0.4 million.20

The businesses which serve the Ottawa River area are for the most part labor intensive,

i.e., depending on the business 50 to 85 percent of sales or revenues accrue as income to labor,

management and property. At the midpoi nt, 67 percent, about $8 million of the $11.9 million of

local boater expenditures accrues locally as wages to employees, as returns to management and

as payments for real property and property taxes, i.e., this is called value added in economic

impact mod els. An increase of $2.1 million in expenditures from dredging would generate

estimated value added (new wages and returns to management and real property) of $1.4 million.

Objective 4

Direct economic and fiscal impacts of dredging the Ottawa River and connecting

channel by area recreational boaters who would use the Ottawa River area if dredged.

The direct economic and fiscal impacts of potential recreational boating households to the

Ottawa River area are comprised of expenditures made by boaters att racted to the area as a result

of dredging the river and the tax revenues generated by those expenditures

. The participant or area boater survey data on boater expenditures provides the basic information for estimation of

direct economic impacts. Fiscal impacts are not estimated . The estimated sales and value added

(economic) impacts to the local economy of current and potential (if dredging occurs) boating

activity from objectives 3 and 4 is shown in Figure 4.

From the PS, average boater expenditures fo r all trips; maintenance, fees and repair; and

equipment are $5, 642. (Figure 1). In addition, these boaters spent on average $4,841 on new

boat purchases and $375 on boat loan payments. Using information from questions 9 and 10,

about 40 percent of boats were purchased new and 52 percent of boats were purchases from

F igure 4: Estimated Annual Sales and Value Added Impacts of

Current and Potential Boating Activity

(In M illions of Dollars)

$11.9

$2.2 $14.1

$8.0 $8.0

$2.1

$0.4 $2.3 $4.8

$1.4 $1.5 $2.9

0 2 4 6 8 10 12 14 16

Repairs and

MFE Boat Loans Sales - New

Boaters Total Sales V/A- Current

Boaters V/A- New

Boaters Total Value

Added Current Economic Activity

Potential Economic Activity21

dealers. Using the same approach used in objective 3, excluding 85 percent of the cost of boats

as manufacturing cost or to previous owners, 15 percent of the 52 percent of boats sold by

deal ers is included, or 7.8 percent of the boat purchases reported by respondents. This amount is

($4,841 x 0.078) $378 per household. The total expected expenditure for boating during 1998

was $5,642 + 378 = $6,020. In addition, there are boat loan payment s of $375 per household.

New boaters will not make all of their trips to Ottawa River area sites. Current boaters

made two

- thirds of their 1998 trips to area sites. Nor will they make all their expenditures at

area businesses for those trips they do ma ke to the area. Current boaters made 74 percent of their

expenditures at area businesses. Current boaters make close to 50 percent of their boating

expenditures at Ottawa River area businesses (.66 of trips x .74 of expenditures) assuming that

expenditur es are proportional to trips. For discussion purposes, it is assumed that new boating

households to the Ottawa River area would make 50 percent of their 1998 boating expenditures

at area businesses, or $3,010 per household

.

To estimate the number of new boaters, two estimates are made. First, under the

assumption that all unused docks would be utilized, it is estimated that new boating households

would use all of the 470 unused docks, bringing 470 new boating households to the area.

Second, it is assum ed the two boat ramps double their use, adding 3,000 launches per year. At

18 trips per household for those who keep their boats at home, this means the ramps could serve

an additional 300 households making one

- half or 9 of their trips to area sites. The additional 770

households spending $3,010 per household at area businesses would generate an estimated $2.3

million in revenues or sales to area businesses. This estimated impact is similar in size to the

increased activity of current users of Ottawa Riv er area facilities. The local value added (wages,

management, property income, taxes) would be similar to that generated by current boaters, i.e.,

about 67 percent or $1.5 million.

Conclusions

Dredging the Ottawa River area and a connecting channel to La ke Erie would generate

significant increases in the economic value of the Ottawa River area resource and increase

Median Mean

Current boating households $343,540 $583,840

Potential boating households 0 47,740

Area businesses 58,672 114,988

Total $402,212 $746,568 Table 5: Economic Value of Dredging the Ottawa River and

a Connecting Channel to Lake Erie*

* Present Value for a 10 Year Period at Median and Mean Values of

Dredging to Boaters and Businesses22

significantly the economic activity of area businesses. Economic value estimates are over

$400,000 at the median value reported by area boate rs and businesses, and nearly $750,000 at the

mean values (Table 5).

These represent estimates of the present value of willingness to pay for dredging over and

above recreational expenditures for Ottawa River area boating to improve the boating

environmen t of the river for a 10 year period.

The estimated impacts on the local economy are the annual changes in sales or revenues

resulting from dredging the river and connecting channel and the annual income from new jobs

and profits as a result of these sale s. Current sales are over $14 million annually which generate

$8 million in value added income to labor, management and property. The estimated increase in

economic activity is nearly $5 million in annual sales and $3 million in annual income (Table 6).

The estimates in Tables 5 and 6 are made under the assumption that the Ottawa River

area would be used at current capacity after the dredging is completed. If the dredging does not

occur, the $ 11.9 million in current activity will erode as the river c ontinues to silt over time,

reducing the already limited navigation on the river. If the capacity of area facilities were

increased through improvements of existing facilities or the construction of new ones, then the

estimated economic value and economic impacts would be larger. Current Activity New Activity

Sales

Current boating households

Trip, maint, repair, fees, equip. $11.9m $2.1m

Boat loans 2.2m 0.4m

Potential boating households 2.3m

Total Sales $14.1m $4.8m

Value added

Current boating households

Trip, maint, repair, fees, equip. $8.0m $1.4m

Boat loans ??? ???

Potential boating households 1.5m

Total Sales $8.0m $2.9m Dredging the Ottawa River and a Connecting Channel to Lake Erie Table 6: Current and Expected New Annual Sales and Income Impacts of23 ACTION GROUP RECOMMENDATIONS

The Ottawa River Action Group of the Maumee RAP pr o poses to build local support for

dredging the Ottawa River by presenting the result of this research to boaters, businesses and

other stakeholders, as well as local, state, and federal government representatives and by

pu r suing the following actions in its dredging strategy over the next 18

- 24 months:

• Identify and obtain a local government sponsor to provide partial financial support for a

dredging project. This will involve communicating with local and state officials initially and

on a regular basis as progress is made.

• Develop a local revenue program for dredging with area marinas and yacht clubs based on

current boaters willingness to pay for d redging. Initial steps include communicating with

stakeholders to strengthen their willingness to join in a local sponsor partnership for

environmental and navigational dredging. This will involve communicating with the

stakeholder partnership as a whole , rather than target special interests.

• Request and develop the support of the Toledo Lucas County Port Authority Seaport

Division for providing local disposal facilities for Ottawa River dredged material.

• Request and develop the financial support of the Army Corp of Engineers after local

sponsorship has been determined and a commitment made

• Expand the support base for this project by seeking the involvement of new people

representing the Ohio Division of Watercraft, banking community, colleges and univer sities,

economic development agencies, and other private and public sector participation.

• Advertise progress and positive stakeholder attributes to the media.