Introduction
In 2000, an analysis of the economic impacts of extreme high and low lake levels on recreational boating and charter fishing activities was undertaken for the 5 prototype counties being examined along Lake Michigan. These included Ottawa and Allegan Counties in Michigan and Sheboygan, Manitowoc and Ozaukee Counties in Wisconsin. The work was undertaken by the Planning and Zoning Center Inc. in association with Dr. Edward Mahoney and Dr. Daniel Stynes of the Michigan State University Department of Park, Recreation and Tourism Resources. Chuck Pistis of MSU Sea Grant Extension and MSU students also participated. Survey work was also designed and supervised by John Cavanagh and Bernie Porn of EPIC MRA, a Lansing-based survey research firm.
This task looks at the effects of both low and high water on recreational boating in five counties on Lake Michigan. However, most of the discussion deals with low water impacts. This is because boats require adequate water to function and low water seems to be more of a limitation than high. Another reason is because during the recent period of low water, boaters and boating industry persons appear unable to perceive high water as a potential problem.
This study looked at the indirect effects of low water by estimating the economic loss of reduced boating opportunity. It also looked at the direct effects of low water by estimating damage to boats and marina dredging. It did not look at the dredging of common harbor areas or damage to structures due to oxidation or other failure. This report focuses on loss to the boating industry. In economic studies, it is important to note the difference between an economic loss to a region and financial loss to an economic sector in that region. Persons who choose not to use their boats may spend the same monies intended for boating-related activities on another activity, such as golf. Roughly the same amount of money may be spent on recreation in the region, just not on boating. However, there would be considerable financial impact to those businesses that are wholly or largely related to boating. There could also be a loss to those businesses that enjoy boating trip-related spending where customers come to do their boating from another county.
Study Area
The LMPDS 2000 study area includes Allegan and Ottawa Counties in Michigan and Manitowoc, Ozaukee and Sheboygan Counties in Wisconsin.
Boat access to Lake Michigan is from drowned river mouth lakes in Michigan: Kalamazoo Lake (Kalamazoo River) in Allegan County and Spring Lake (Grand River), Lake Macatawa and Pigeon Lake in Ottawa County. Access to Lake Michigan in the Wisconsin study area counties is from the Sheboygan River in Sheboygan County, the Manitowoc River and West Twin and East Twin Rivers in Manitowoc County. Shoreline marinas and launch ramps provide access to Lake Michigan in Ozaukee County.
For the purposes of the Recreational Boating study, launch ramps and marinas were studied in counties adjacent to the LMPDS pilot counties. The purpose of this expansion was to estimate the extent of boating opportunity should facilities become unusable in the study area due to low water. Because a large number of boaters trailer their boats to Lake Michigan, they have the flexibility to drive farther than their closest, or favorite boat ramp. These additional counties include Berrien, Van Buren and Muskegon Counties in Michigan and Milwaukee, Kewaunee, Brown and southern Door Counties in Wisconsin.
Access to Lake Michigan in these additional counties is through the drowned river mouth lakes of Muskegon Lake (Muskegon River) and White Lake (White River) in Muskegon County in Michigan. Rivers providing access in the additional Michigan counties include the St. Joseph River in Berrien County and the Black River in Van Buren County. Rivers with access to Lake Michigan in the additional Wisconsin counties include the Milwaukee River in Milwaukee County, the Fox and Suamico Rivers in Brown County and the Kewaunee and Ahnapee Rivers in Kewaunee County.
Method Of Study
This study involved three lines of investigation:
- The direct losses of marina operators, boat dealers and charter fishing companies were investigated through a survey of those businesses in the pilot counties.
- Marina operators were asked what their losses would be if Lake Michigan were to continue to decline, or to rise to an extreme level.
- Owners of registered boats in the parts of the two states most likely to boat in the pilot counties were asked a series of questions about the use of their boat in the study counties, spending related to that use, and whether boating would be impacted if Lake Michigan were to decline or rise in level toward extreme elevations.
Losses to commercial shipping were not investigated because they were beyond the study scope. Also, the cost to dredge public harbors and channels was not investigated in this study. That information was collected as part of another study, the Task 7 Investigation of Potential Low Water Damages.
The damage estimate in this report was compiled from information derived from multiple component data sets. These components include:
Existing Boating Days Economic Model. Previous research conducted by the Michigan State University Department of Park, Recreation and Tourism Resources (MSU) established a level of spending associated with a day spent boating. This "Boating Days" model is specific to each county in Michigan. The findings of that study are reported to illustrate a base level of spending related to recreational boating in the study counties.
Survey of Marina Operators. A survey was conducted by MSU to examine the economic impact of low water on marinas. Owners were surveyed regarding change in slip use, dredging, facility repair or modifications and boat damage repair.
Survey of Charter Boats. Charter boat operators were surveyed by MSU regarding change in business in 2000 compared to previous years and to identify low water impacts.
Survey of Boat Dealers. Boat dealers were surveyed by MSU regarding changes in the sales of boats in 2000 compared to previous years. They were also asked about the affect of low water on sales.
Survey of Registered Boat Owners. The owners of boats registered in Michigan and Wisconsin were surveyed by the research firm of EPIC MRA by phone to determine their level of use, spending related to boating and their perceptions of water level change and the impact on boating. They were asked about their boating activity in 2000 and whether much lower or much higher levels would impact boating.
Inventory of Boat Launch Ramps. Launch ramps were identified in the study counties and adjacent counties. Each was visited during August 2000 and the depth of water at the end of the ramp established. The purpose of this inventory was to determine the part trailer launched boats would play in the event of extreme low water levels.
Conclusions
The following discussion highlights the findings of the study.
There is a substantial financial loss to recreational boating with a decline in Lake Michigan water level. This loss has three main components:
Loss specific to marinas: It is possible to demonstrate a financial loss to marinas in the five study counties of between $2 to $4 million. These are estimates but are based in part on fairly exact record-keeping of marina owners and on observable numbers of marina slips.
Loss of trip-related spending in the community due to a loss of available marina slips. There was no loss estimated in 2000 because the loss of slips due to low water equaled the excess capacity of marinas. If water levels were to drop an additional 12", this loss would be about $825,000 in Allegan and Ottawa Counties and the loss would be about $1.15 million for a drop of 18". There would be no such loss in Wisconsin.
General loss to a potential boating-related economy. We gathered information on the level of boating activity in 2000, including average boating days, use of trailer launched boats, boat launch ramp depth capacity, charter fishing and boat sales. However, it was difficult to develop a stage damage curve for future financial impact. This was because of the difficulty of gaining an accurate response from boaters on their likely change in boating activity due to a situation they have never encountered. Therefore, we've estimated the potential boating-related spending that low waters could affect. How much low water affects spending is open to further speculation. We believe that that the boating-related economy of the five counties could be in range of about $29 million to as high as nearly $43 million.
If all boat owners in the pilot counties use their boats the average number of days reported and spend the average amount for their county per boating day, then boater spending will be quite large. The potential economic impact of boating could be $29 to $43 million in the five -counties.
Note that we have used averages for spending figures. It would be possible to segment spending by boat range. We know how many boats of the different sizes are registered in the different counties and the owners of boats in the different ranges spend differently. However, this would suggest a greater level of accuracy in the resulting figure than the survey techniques justify.
This study looked at potential economic loss associated with high water as well. This proved impossible to quantify. The difficulties in doing so may be due to the focus of the boating industry and recreational boaters on low water. It was just impossible for them to seriously engage the idea of high water being anything other than a miracle. They may be asking, when is having too much water to float a boat a problem? It is when marinas have to raise fixed docks and when access to certain marinas and boat launches becomes impossible due to flooded roads and parking lots. Perhaps there would be an offsetting gain from increased boat sales, but this is conjecture.
This study found that there was:
- A large economic loss to marinas in Michigan. This was estimated at $2 million in the three Michigan pilot counties in 2000. At lower Lake Michigan levels this loss would rise to $3 million and $4 million with lake level drops of 12" and 18" respectively from 2000 levels.
- If the level of Lake Michigan continued to drop, the resulting loss of marina slips could result in a decline of trip-related spending in Ottawa and Allegan Counties of $0.825 million for a 12" drop below 2000 levels and $1.15 million for an 18" drop below 2000 levels.
- Little loss to Wisconsin marinas. Marinas in Wisconsin seem well prepared to deal with low water. They are generally located in boat basins constructed directly on the Lake Michigan shoreline. They also, generally, employ floating docks. A sufficient depth to accommodate low water appears to be maintained. This could be due either to dredging or a lack of silt build-up.
- A loss of spending due to a reduction in boating days in both states. While it appears that the number of days people go boating in these counties is up substantially from the early 90s when MSU completed its survey, the EPIC MRA survey in 2000 reported that 42% of respondents boat somewhat less to much less now than two or three years ago. Of that group, only 19% report the reason is low water levels. Forty-five percent reported less free time as the main reason they boated less than a few years ago. However, when the survey asked about the affect of water levels approaching the projected extreme low, the response jumps to 76% citing a minor to major impact of declining water levels and 89% a minor to major impact if the water level dropped a foot. If water levels dropped two feet below 2000 levels the response was 95% a minor to major (86%) impact.
- Small loss to charter fishing boats. To some degree, charter boats can move their home port from a marina with low water problems to one with better access. Most of the loss of business experienced by charter boats in 2000 was due more to poor weather than low water. Still, 17% of charter boat operators surveyed reported low water impacts. Oddly, 43% reported knowing of at least one other boat operator that experienced a low water impact.
- Some increase in boat repair costs. This was difficult to quantify because the record keeping of repair shops does not routinely account for damage causes. Repair facilities reported no increase in business but due to an overall drop in boating, we suspect repairs due to low water may have made up a larger portion of their business. EPIC MRA survey respondents cited repairs in 2000 averaged about $218.
- A reduction in the number of boat launch ramps that remain usable at extreme high and low water levels. However, generally, there will be a usable ramp within a reasonable driving distance from most anywhere on the Lake Michigan coast (pilot counties). This depends upon what a boater considers reasonable. There was no specific question about this in the 2000 survey. We assumed about an hour drive. The exception to ramp availability may be the Michigan coast with only one ramp remaining open between northern Muskegon County and the state line of Berrien County at extreme low water. This ramp is in northern Berrien County. While it is one of the higher capacity ramps, it could become crowded if several thousand boaters find it to be the only launch ramp available for access to Lake Michigan. Spending related to trailered boats was estimated at between $17 million and $24 million in 2000 in the five counties.
In Michigan, a separate research project estimated overall loss to Great Lakes marinas due to low water at $11.8 million in 1999. (Mahoney, Tzu-Ching, Pistis and Martin, 2000) This separate study was state-wide, and not conducted in Wisconsin.
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