WRM 2000 Issue identification

Economic issues

The final decision to repair or remove a dam is usually driven by the relative costs and benefits of the two choices. However, there are many costs associated with dam repair or dam removal other than just the construction costs. In some cases, the decision to remove is made to eliminate the financial burden associated with owning or maintaining deteriorated dams that are no longer useful, economical, or aesthetically appealing (Stephanie Lindloff, River Alliance of Wisconsin, verbal communication, 2000). Concern for the loss of the community center (the dam or millpond) or a reduction in property values drives the desire to fund repair.

Costs

Checklist questions

Construction costs

If a consultant is needed, what is the cost of hiring a firm to estimate dam repair or removal? Note that having a firm create multiple design options to provide different dam functions, such as electricity generation or fish passage, will be a factor in consulting costs.
What is the cost of physically repairing or rebuilding the dam structure, including different options for dam function, such as electricity production or flow regulation? What is the cost of physically removing the dam?
If a fish passage is required, what is the cost? What is the cost of installing a fish barrier after dam removal, if needed, to prevent invasion by undesirable exotic species?
What other construction costs are associated with dam repair and removal (for example, removal of debris, trees, and brush around dam)?
If sediment is an issue, what is the cost of addressing sediment accumulated behind the dam? If the sediment is contaminated, what is the cost of properly disposing of the sediment?
What is the cost of river restoration, if any? Is doing “nothing” a viable option?
What is the cost of streambank stabilization (that is, planting vegetation, riprap, regrading), if any?
How can stormwater outfall and erosion control be paid for and managed?
What is the cost of relocating utilities, if any?

Safety and liability costs

What are the costs of dam failure flood insurance for the dam owner?
What are the costs for other liability insurance policies (for example, swimmers and anglers)?
How many homes, buildings, and other properties must carry flood insurance because they are in the flood zone if the dam were to fail?
Are there buildings below the dam that cannot be occupied because of the dam break analysis?
What insurance costs will the dam owner avoid by removing the dam?
How many homes, buildings, and other properties will be removed from the catastrophic flood zone and no longer be required to carry flood insurance?

Operation and maintenance costs

What will periodic inspections of the dam cost to prevent future problems?
Will the dam have gates or other features that require someone to operate them? How much will this operation cost?
How much will dredging the pond cost, and how often will it need to be done?
Does the pond require vegetation control, such as weed harvesting, in the summer? What does that cost?
Will sediment controls (streamside vegetation, rock riprap) need to be maintained?
If the former pond is converted into a park or other natural area, how much would maintenance cost?

Toolbox

Module 4 of this guide: Economic Considerations
Sediment Management checklist
Appendix C of this module: Sample survey
Wisconsin Department of Natural Resources Dam Safety personnel
Private engineering firms
City parks department personnel for maintenance of new park land
City engineers
Contractors
Assessing Potential Economic and Ecological Impacts of Removing the Indianford Dam. Authors: David Marcouiller, Steve Deller, Joseh Moskal, Steve Grabow, Daniel LaForte, and Mike Stiehl. December 1999. University of Wisconsin-Extension's Center for Community Economic Development Staff Paper 99.3. Copies of the paper can be obtained by contacting: 610 Langdon Street, 3rd Floor Madison, Wisconsin 53703; 608/265-8136; fax: 608/263-4999. TTY: 800/947-3529; email: cced@aae.wisc.edu.

Property values

Checklist questions

Are property values expected to increase in the surrounding area if the dam and pond are around for another several decades?
Are property values expected to decrease in the flood zone if the properties will be required to carry flood insurance?
Will the city/county/lake-district property taxes need to be increased to provide funds to repair the dam and provide future operation and maintenance?
Who will own the land currently under the pond?
Are properties currently in the flood zone expected to increase in value because they will no longer be required to carry flood insurance or follow restrictive floodplain zoning?
Are property values expected to increase or decrease with the change from lake aesthetics to river aesthetics?
Will properties lose views of water?

Toolbox

Realtors/appraisers
County Assessor’s Office
City Hall
Trout Unlimited Report (in development) – “Small Dam Removal: A Review of Potential Economic Benefits.” For more information, contact Trout Unlimited’s Watershed Restoration Coordinator Brian Graber at (608/255-0361; email: bgraber@tu.org).

Benefits

Checklist questions

Recreational benefits

How many people enjoy the following activities on the pond, and how much do they value each?

Fishing (note what types of fish)
Ice skating
Motor boating
Water skiing
Sailing
Windsurfing
Flat-water canoeing/kayaking
Snowmobiling
Swimming/wading
Waterfowl hunting
Enjoying the scenery

Do any businesses rely directly or indirectly on recreation at the pond? What is the economic value of this recreational business?
What are the recreational opportunities associated with dam removal?
How many people enjoy the following activities on the river, and how much do they value each?

Fishing (note what types of fish)
Ice skating
Motor boating
Canoeing/kayaking
Snowmobiling
Swimming/wading
Waterfowl hunting
Enjoying the scenery

Do any businesses rely directly or indirectly on recreation at the river? What is the economic value of this recreational business?
What is the economic value of recreating at a new park or natural area (for example, hiking, biking, children’s play area, picnicking, bird watching, or wildflowers/plants)?
Are recreation businesses currently dependent on the pond flexible enough to focus on river recreation?
Are new businesses catering to river recreation likely to beestablished?

Environmental benefits

What are the benefits to the environment and wildlife associated with dam repair? (Note that habitats should stay the same in terms of type and extent if dam is repaired.)
What are the benefits to the environment and wildlife associated with dam repair or removal?

Toolbox

Owners of recreation businesses
Wisconsin Department of Natural Resources staff for fisheries, hunting, park and general wildlife information
Ducks Unlimited web site: http://www.ducks.org/index.asp
Trout Unlimited web site: http://www.tu.org/
River Alliance of Wisconsin web site: http://www.wisconsinrivers.org/
Park departments (federal, state, county, local)
Checklist/toolboxes inf this module for aesthetic issues and fish, wildlife, and environmental issues
Members of the community
Keep America Beautiful web site: http://www.kab.org/
Wisconsin Department of Natural Resources GMU Basin Partnership leaders
Wisconsin Waterfowl Association: http://www.wisducks.org/
Wisconsin Department of Natural Resources wildlife and fish managers

Funding

Checklist questions

Who is responsible (expected to or should be) paying for the dam repair?
What sources are available to fund dam repair or removal?
What funding sources are available to cover construction costs?
What funding sources are available to cover costs of operation and maintenance?
Is it possible to tie in repair with other community infrastructure (for example, roads or community projects)?
What funding sources are available to cover costs of river restoration? Streambank stabilization? Habitat restoration?
What information is available about fundraising and grant writing?
How have other communities funded dam repair and removal?

Toolbox

Appendix A of this module: Funding dam repair, removal, and associated activities
Appendix B of this module: Funding sources

Next section: Legal and land-use issues

URL: http://www.ies.wisc.edu/research/wrm00/issueecon.htm