A SOCIO-ECONOMIC STUDY

OF THE RODMAN RESERVOIR

PROJECT DIRECTOR Clyde Diao, Ph.D., Chief Economist

AUTHORS: Nick Stratis, Ph.D. & Bradley Bendle

FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION

ECONOMIC ANALYSIS SECTION - OFFICE OF GENERAL COUNSEL

JANUARY 1995

EXECUTIVE SUMMARY INTRODUCTION

In 1933, the Florida Canal Authority was created with the purpose of overseeing the construction of a canal across the state. Construction of the canal was begun, and then interrupted, in the 1930s. The Florida Legislature then authorized the construction of a canal for barges, rather than ships, in 1942, and by 1964, the construction of the Cross Florida Barge Canal began. However, when a number of groups opposing the canal filed suit in US District Court, seeking a permanent injunction against the completion of the canal, construction was halted.

The Reservoir's history has been one of controversy. Arguments in favor of the restoration of the Oklawaha River to its natural state, or to as natural a state as possible, cite the Oklawaha system as a unique habitat for species endemic to Florida, and to the system's importance to Florida's ecosystem. Arguments supporting the retention of the existing reservoir cite the excellent bass fishing provided by the Reservoir, the impact of tourists to the reservoir on the economies of Putnam and Marion Counties, and the reemergence of formerly endangered species in the new ecosystem that has developed around the Reservoir.

Inevitably, the arguments in favor of one side or another of a controversial issue tend to promote those elements of the argument that support the favored point of view. Accordingly, the purpose of the Rodman Reservoir Economics study is to provide an objective base of factual evidence concerning the economic issues of the Reservoir and its possible restoration. No recommendations regarding the disposition of the Reservoir or selection of alternatives appear in the report.

The economics report is one of 17 studies mandated by the Florida Legislature in H.B. 1751, Sec. 54 (2), to investigate the four alternatives proposed by the legislature. These four alternatives are:

1. Full Retention, which prescribes the retention of the current configuration of the Rodman Reservoir, perhaps with enhanced maintenance of the fishery;
2. Partial Retention, in which a smaller, shallower Rodman pool remains;
3. Partial Restoration, which involves removal of the Rodman Dam to allow freer flow of the Oklawaha River; and
4. Full Restoration, in which the original Oklawaha Riverine system is restored, as nearly as possible, to its pre-impoundment condition.

There are 12 levels and variations of restoration, deconstruction, and maintenance within these four alternatives.

The economics study has three major goals:

1. Estimate the net economic impact of visitors to the Reservoir on the regional economy of Putnam and Marion counties, and to estimate changes in these impacts for each of the alternatives.
2. Establish estimates of recreational benefits to users of the Reservoir, and the potential benefits to users of the four alternatives.
3. Compare the benefits and costs for each of the four alternatives.

This economics study departs from previous Rodman economic studies in a number of ways. First, it collects data for estimation of recreational benefits to users of the Reservoir, and thus provides a detailed primary source of data collected expressly for this project by the authors of the report. Included in this data set are demographic data, information on activities, expenditures, traveling habits, and use of substitutes, by users of the Reservoir and by the general population within 75 radial miles of the Reservoir. In estimating both the benefits of the Reservoir and its impacts on the surrounding economy, conventional economic estimation techniques are used. Finally, a thorough breakdown of the costs associated with each of the alternatives is presented.

The conclusions of the study are as follows:

The Reservoir currently accounts for about $5.0 million in direct expenditures, and about $7.5 million in gross annual direct and indirect expenditures in each county, and approximately $3.32 million in net annual expenditures in each county.

Comparisons of benefits and costs indicate that the full retention alternative produces the highest net recreational benefits, as the restoration alternatives produce net negative benefits.

The results suggest that visitors would continue to come to the Rodman area for recreational activities under any of the alternatives. The Full Retention alternative would produce more visitor days than at the existing reservoir, and the restored Oklawaha River would generate fewer visitor days, according to the survey results. All alternatives would continue to generate visitor days. Accordingly all alternatives would produce some recreational benefits and regional economic impacts.

The results suggests that visitors to the reservoir would be willing to purchase a moderately priced annual permit which would allow access to the Reservoir, the revenues from which could be used to maintain the reservoir. Their willingness to pay for an annual pass ranges from $21.47 to $25.28.

Approximately, 41,916 households from within the 75 mile radius were estimated to visit the Rodman Reservoir in 1993, spending an average of 6.23 days per year there, for a total of 261,135 visitor days annually. From beyond the 75 mile radius, 3,997 visitors spent 46,082 visitor days in 1993 at the reservoir. Thus, the total visitor days for the Rodman Reservoir is about 307,217 under status quo. The Oklawaha River attracted 43,008 households from within the 75 mile radius in 1993, spending a total of 405,995 visitor days at the existing River South of Eureka. (Comment: One should remember that the Ocklawaha River is about 135 miles long and the portion north of Eureka which contains the 16 miles of Rodman Reservoir is only about 25 miles of the total length. The portion south of Eureka would include the Ocala Boat Basin, Moss Bluff, Lake Griffin, and points south. The fact that Rodman had 300,000 visitor days compared to the 400,000 visitor days for most of the rest of the Ocklawaha River is remarkable.)

To arrive at these conclusions, five separate surveys were conducted for this study. The bulk of the information is provided by telephone survey of 1,269 randomly selected households located within 75 radius miles of the Rodman Reservoir, and by an on-site survey of visitors to the Reservoir from beyond the 75 mile range. In addition, surveys of fishing guides in Putnam and Marion counties and bass club members, as well as a creel survey conducted by the Florida Fresh Water Fish and Game Commission, also provided data used in the report.

The report finds that the following approximate total visitor days are generated by the various alternatives:

The study's recreational benefit estimates are produced by conventional travel cost models which use information elicited by the surveys. Additionally, the surveys asked questions concerning respondents' willingness to pay for access to the Reservoir under the various alternatives, and the number of days spent there. The survey results indicate that respondents are willing to purchase annual permits for access to the Reservoir, if the revenues from the permits are used to maintain the Reservoir.

Cost estimates for the completion of the four alternatives are categorized into deconstruction costs that would be incurred by the removal of the dam, lock, and other structures, and operating and maintenance costs. The operating and maintenance costs would, of course, continue beyond the period required for deconstruction. The most costly alternative would be full restoration of the river with complete removal of any vestiges of the entire Reservoir edifice, including existing lock, dams, berms, channels, and remains of the canal. Notwithstanding the assertions of previous studies, continued operation and maintenance costs would be incurred by all alternatives, including the fully restored river. Assuming a 10 year time period for completion of deconstruction for the selected alternative, the cumulative cost of the various alternatives are:

As stated above, operating and maintenance (O&M) costs would continue throughout the operation of the new reservoir or alternative.

A distinction is drawn in the study between economic impacts, which result from direct and indirect expenditures in the regional economy by visitors to the Reservoir, and recreational benefits, which accrue to users of the Reservoir or River. The impact analysis finds that the existing Reservoir draws visitors from within Florida and from out of state, but that these impacts are extremely small. Visitors would also be attracted by the restored Oklawaha River, and expenditures would continue to be generated by visitors, although these expenditures would not be of the magnitude of current Rodman users. The gross recreational benefits - the total annual user value for each alternative, as derived by use of the travel cost models - are calculated to be $3,738,831 annually for the existing Reservoir; $4,326,983 for full retention; $1,775,142 for partial retention; and $2,081,930 for the fully restored Oklawaha River. Take note that the recreational benefits for partial restoration are the same as a fully restored river.

Upon the conclusion of the 1994 studies, the DEP presented a benefit/cost analysis to Florida's Cabinet. The 10 year figures were:

Comments:

• Status Quo was not an option because the locks had been in operation for a long time and no major maintenance had been performed for some time. The $2,071,893 difference between the cost of "Status Quo" and "Full Retention" was the amount estimated necessary to repair and overhaul the locks to make them reliably operational.

• Partial Retention was rejected as unworkable because of the inability to control aquatic plant growth.
• Partial Restoration without replanting was selected as the restoration alternative.
• Full Restoration was deemed too expensive to get the legislature to fund.

• Annual total operating costs for Rodman were estimated to be about $701,832. (Status Quo $7,018,321 divided by 10 years) After the eastern Greenways audit was published the annual operating expenses were known to be about $250,000. Much less than previously estimated.

• It is easy to see that the retention alternatives have the best benefit/cost ratios and make the most money for the state of Florida.

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BUCKMAN LOCK INSPECTED

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