Conversion of Rural Land to Recreational Sportﬁshing Use: An Economic Analysis
Special Report No. 5

December 2006 Alabama Agricultural Experiment Station Auburn University
Printed in cooperation with the Alabama Cooperative Extension System (Alabama A&M University and Auburn University)

TABLE OF CONTENTS
page Introduction ......................................................................................................................................................... 3 Methods and Background ................................................................................................................................... 4 Scenario 1: Costs and Management Practices ............................................................................................ 4 Scenario 2: Costs and Management Practices ............................................................................................ 5 Project Development: Process and Regulation ................................................................................................... 5 US. Army Corps of Engineers .................................................................................................................... 9 Alabama Department of Environmental Management ............................................................................. 11 Economic Analysis and Feasibility ................................................................................................................... 12 Scenario 1: Costs and Budget ................................................................................................................... 12 Scenario 2: Costs and Budget ................................................................................................................... 14 Scenario 1: Economic Analysis ................................................................................................................ 14 Scenario 2: Economic Analysis ................................................................................................................ 15 Discussion ......................................................................................................................................................... 15 References ......................................................................................................................................................... 16 LIST OF TABLES Table 1. Capital and Operating Costs for a 40-Acre Sportﬁshing Lake That is an Amenity to an Existing Recreational Facility with a 15-Year Planning Horizon and Using Equity Capital, Alabama, 2006 ................. 6 Table 2. Capital and Operating Costs for a 40-Acre Sportﬁshing Lake Startup with a 15-Year Planning Horizon and Using Borrowed Capital for Construction and Initial Cost Purposes, Alabama, 2006 ................. 7 Table 3. Projection of the Net Cash Flows for a 40-Acre Sportﬁshing Lake That is an Amenity to an Existing Recreational Facility, 15-Year Planning Horizon, Alabama, 2006 ..................................................... 13 Table 4. Projection of the Net Cash Flows for a 40-Acre Sportﬁshing Lake Start-up with a 15-Year Planning Horizon, and Using Borrowed Capital for Construction and Initial Cost Purposes, Alabama, 2006 .............. 13 Table 5. Cash Inﬂows, Net Present Values (NPV), and Internal Rates of Return (IRR) for a 40-Acre Sportﬁshing Lake with and Without Borrowed Capital in Alabama, 15 Year Planning Horizon, 2006 ........... 15 LIST OF APPENDIXES Appendix 1. Steps in the USACE Approval Process and Guidelines and Inﬂuences Considered by USACE when Permitting Projects ..................................................................................... 18 Appendix. 2. Application for Department of the Army Permit......................................................................... 19 Appendix. 3. Example Consultant Proposal ..................................................................................................... 21 Appendix 4. Example Consultant Proposal ..................................................................................................... 22 Appendix. 5. Sample Drawings for a Permit Application ................................................................................ 24 Appendix. 6. Example Section Views............................................................................................................... 25 Appendix. 7. Example Emergency Spillway Location ..................................................................................... 26 Appendix. 8. ADEM: Example Notice of Registration .................................................................................... 27 Appendix. 9. ADEM; Example FOD Stormwater Registration Termination Request ..................................... 29
Auburn University is an equal opportunity educational institution/employee. Information contained herein is available to all persons without regard to race, color, sex, or national origin. Issued in furtherance of Cooperative Extension work in agriculture and home economics, Acts of May 8 and June 30, 1914, and other related acts, in cooperation with the U.S. Department of Agriculture. The Alabama Cooperative Extension System (Alabama A&M University and Auburn University) offers educational programs, materials, and equal opportunity employment to all people without regard to race, color, national origin, religion, sex, age, veteran status, or disability. http:www.auburn.edu http:www.ag.auburn.edu/aaes

CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS
W. Cumbie, J. Adrian, and D. Fields

INTRODUCTION
raditional agricultural enterprise markets (such as corn, soybeans, cotton, and peanuts) have been somewhat depressed in recent years (USDA). Today, more rural land is being purchased and operated by nonagriculturally oriented individuals and entities. Additionally, both long-term and new rural land owners have broadened their search for feasible alternative uses for the land resource so as to supplement or increase income (USDA). Many non-traditional enterprises (goats, turfgrass/sod, various horticultural crops, etc.) and production systems (organically grown, free-range animal production, value added systems, etc.) have received attention as viable production alternatives. Also, recreational options such as the issuance of hunting leases and eco-tourism activities have increased. Interest has also been expressed for aquacultural options, including sportﬁshing. Sportﬁshing is a major recreational activity in Alabama and the United States (American Sportﬁshing Association). In 2001, 212 million people 16 years of age or older lived in the United States, and one in six of these went ﬁshing--a 16 percent participation rate (USDI, a). According to the 2001 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation Survey for the United States (issued in October 2002), there were 34.1 million anglers (28.44 million freshwater), who spent 557 million days ﬁshing (467 million freshwater), with expenditures of $35.6 billion ($14.7 billion on trips and $17.0 billion on equipment) (USDI, b). In 2001, Alabama waters were used by 851,000 U.S. resident anglers (86 percent freshwater) for 11.3 million days of ﬁshing (88 percent freshwater) that involved $735.5 million in total expenditures with roughly an equal split between trip-related and equipment and other-related outlays (USDI, c). These amounts convert to an average of approximately $870 per angler per year or a per trip outlay of $32 per day. Alabama residents comprised three-fourths of the in-state anglers (634,000) and accounted for 83 percent ($598 million) of the total expenditures made in-state (USDI, c). Black bass were desired by 383,000 in-state anglers with 76 percent of those ﬁshing being Alabama residents. Panﬁsh (bream, bluegill, etc.) and white, striped, and hybrid bass were sought by 215,000 anglers (82 percent Alabama residents) and 145,000 anglers (82 percent Alabama residents), respectively. While most of this activity involved use of public waters, these statistics illuminate the growing opportunities and potential for planned and managed private recreational waters. Impending retirements of “baby boomers” with the time, income, health, and desire for diverse recreational experiences could enhance demand for day ﬁshing trips and related activities such as family recreation, nature observation, rural aesthetics, and hunting. Provision of a ﬁsh production system that guarantees an optimal

T

Cumbie is a former Graduate Research Assistant, Adrian is a Professor, and Fields is Extension Economist and Assistant Professor in the Department of Agricultural Economics and Rural Sociology, Auburn University.

4

CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

recreational experience that includes the opportunity to catch many large, desired ﬁsh in an appealing, safe, comfortable environment may be economically viable. What is required to create and provide an optimal recreational sportﬁshing experience? And, can such a system be economically viable?. This paper focuses on two primary objectives: (1) identifying and examining the process of adding recreational water to a rural land tract and of satisfying regulatory requirements and (2) analyzing the economic feasibility of developing a recreational sportﬁshing lake as an amenity for both an existing multipurpose recreational facility and a stand-alone, start-up 40-acre sportﬁshing operation. The ﬁrst objective will be addressed by describing the process of developing a sportﬁshing lake and then summarizing and describing requirements speciﬁed by the two primary governmental entities involved with the addition of recreational water to a rural land tract: the United States Army Corps of Engineers (USACE) and the Alabama Department of Environmental Management (ADEM ). The second objective will be achieved by developing budgets and cash ﬂow statements for two scenarios-both an additional-use sportﬁshing option for an on-going outdoor recreational facility (Scenario 1) and a start-up sportﬁshing operation (Scenario 2)--using a 15-year planning horizon and net present value (NPV) methods.

METHODS AND BACKGROUND
Data for the analysis were collected and synthesized from a case study of an on-going recreational facility located in Southeastern Alabama. Over a two-year period, one author was afforded the opportunity to experience all facets of a water development project at the recreational facility (Scenario 1), including site selection, state and federal permitting application requirements, site engineering, construction bidding and acceptance processes, ﬁnancial performance and budgeting, stocking and management of ﬁsh, and marketing and sales plans. Additional data were collected from USACE and ADEM regulatory permitting entities regarding site acceptance and cost of permitting. Selection of the site engineer and resulting consulting costs were derived from actual bids submitted by two separate consulting ﬁrms. All construction costs (dam, spillway, pier, drainage, etc.) were also obtained for a bid process that included four separate contracting ﬁrms. The recreational water projects reviewed in detail for this study were speciﬁcally designed for sportﬁshing. The lakes totaled 40 acres in size and ranged from 1 to 24 feet in depth. The lake in Scenario 1 contained ﬁve ﬁngers or channels, which are narrowed bodies of water that branch off from the lake’s main body of water. There were several sandbars or points that extended from the shorelines toward the main body of the lake. These structures provide ﬁsh with preferred spawning areas and habitat for feeding purposes. Most of the tree trunk and root systems that remained from the timber harvest that took place during the construction of the lake were placed in strategic areas throughout the lake. These areas offer ﬁsh structures, sanctuaries, and a good feeding habitat. There were also several areas of the lake that contained shallow depths and ﬂooded timber, which provide a beneﬁcial habitat for water fowl. The shorelines and dam were planted with grasses that produce seed and forage that the resident and transient wildlife and waterfowl could utilize for feed, and in turn, also provide great areas for wildlife observation. The start-up 40-acre lake project (Scenario 2) used borrowed capital and is simply an example to evaluate ﬁnancial feasibility and demonstrate the design and regulation approval aspects of a recreational water project. Scenario 1: Costs and Management Practices The 40-acre sportﬁshing lake analyzed was constructed and managed as a recreational option for an ongoing multiple purpose recreational facility and for the purpose of generating additional income

ALABAMA AGRICULTURAL EXPERIMENT STATION

5

for the land owner. The recreational facility provides year-round outdoor sporting activities that generate income primarily through paid hunting trips, shooting sports, timber and hay production. Use was expected to largely be by current members and customers of the facility. The site on which the lake was constructed is currently owned by the facility; therefore, ﬁnancial assistance for both land purchase and lake construction was not required. The property, previous to lake construction, was used solely for paid hunting trips and a moderately sized hay production operation. With addition of the sportﬁshing lake, the land owner will position the facility to generate income during the time of year when other aspects of the business are not generating signiﬁcant cash inﬂow (April through September). The planning horizon for the project was 15 years. Capital investments were made in each of the ﬁrst three years of the project with capital replacements needed in the ﬁfth and tenth years of the project (Table 1). Sales of day ﬁshing memberships were projected to start in April of the fourth year. The initial start-up period was three years in order to obtain larger weights of the sportﬁsh and greater numbers of forage ﬁsh before ﬁshing trips were permitted. Fathead minnows, coppernose bluegill, and shellcrackers were all stocked during October of the second year and were considered forage ﬁsh for this particular operation. Fathead minnows were stocked at a rate of 1,000 ﬁsh per acre, totaling 40,000 ﬁsh. Coppernose bluegill and shellcrackers were stocked at a 9:1 ratio, coppernose bluegill to shellcrackers, at a rate of 1,000 ﬁsh per acre totaling 36,000 coppernose bluegill and 4,000 shellcrackers. Threadﬁn Shad were stocked during March of the third year of the project at a rate of 500 per acre totaling 20,000 ﬁsh and were considered forage ﬁsh as well. The F-1 Tiger Bass, 2 inches in size, were stocked during June of the third year at a rate of 50 ﬁsh per acre totaling 2,000 ﬁsh and were considered the target sportﬁsh in this project. There were two primary motivations for stocking forage ﬁsh at earlier times for this project. First, early stocking and a lengthened initial production cycle allowed the forage ﬁsh to complete several spawning cycles and increase the population of each specie. Second, this option provided enough time for forage ﬁsh to grow, and thus establish a noncompetitive environment for forage with the F-1 Tiger Bass. The F-1 Tiger Bass is a hybrid cross between the northern largemouth bass and the Florida largemouth bass. The northern variety is recognized for highly aggressive feeding habits and behavior, but not for reaching weights signiﬁcantly over 8 pounds. The Florida largemouth, however, is identiﬁed as a less aggressive but larger species, reaching weights in excess of 17 pounds. Motivation for stocking the F-1 Tiger Bass was to grow ﬁsh that gain weight quickly and provide ﬁsh which exhibit highly aggressive feeding habits (Smith 2005). Fishing will be on a catch and release basis. Scenario 2: Costs and Management Practices Most rural land owners would not have an on-going recreational facility. Thus, data from the initial analysis were used to evaluate the feasibility of a 40-acre start-up sportﬁshing lake, using borrowed capital. The 40–acre sportﬁshing start-up operation includeed the same initial and operating costs schedules and management practices as the lake used as an additional use-option for the ongoing outdoor recreational facility, Table 2. Additional costs incurred with this alternative included interest on a $138,000 loan at 5.75 percent for 15 years plus origination/closing costs, which are amortized, and changes in property tax, labor, and advertising costs resulting from the loss of the synergistic relationship with the ongoing recreational facility. Land was still assumed to be owned and available.

PROJECT DEVELOPMENT: PROCESS AND REGULATION
Goals and objectives of land owners and characteristics of land vary a great deal, just as the speciﬁc uses do for new waters (Chappell 2005). Regardless of the personal characteristics of land owners and the planned uses for the waters, there are certain processes and regulations that need to be identiﬁed, understood, and followed by all land owners who desire to bring water-related projects to successful completion.

6

TABLE 1. CAPITAL AND OPERATING COSTS FOR A 40-ACRE SPORTFISHING LAKE THAT IS AN AMENITY TO AN EXISTING RECREATIONAL FACILITY WITH A 15-YEAR PLANNING HORIZON AND USING EQUITY CAPITAL, ALABAMA, 2006
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

60,000 5,000 260 7,500 225 575 6,500 2,500 2,500 1,600 1,000 9,000 4,000 2,000 700 15,000 1,500 7,075 18,300 16,500 2,500 2,500

Item Capital Costs Pond construction Pipe Trash rack Engineer fee Registration fee Fertilizer / Plantings Gravel / Rock Fathead minnows Shellcrackers Bluegill Shad Bass Feeder Boats Dock / Pier

Sub -Total

72,985

Operating Costs Fish Feed Fertilizer Testing/ Monitoring Maintenance 2,000 2,000 1,372 1,372 12,500 2,500 0 53,900 53,900 7,518 21,518 53,900 53,900 24,018 24,018 5,000 5,000 1,372 1,372 12,500 12,500 2,500 2,500 5,000 5,000 1,372 1,372 12,500 12,500 2,500 2,500 1,372 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 5,000 1,372 12,500 2,500 53,900 24,018

900 1,960 650 5,000

900 1,960 650 5,000

900 1,960 650 5,000 5,000 5,000 5,000 1,372 1,372 1,372 12,500 12,500 12,500 2,500 2,500 2,500 53,900 53,900 53,900 24,018 21,518 24,018

900 1,960 650 5,000 5,000 1,372 12,500 2,500 53,900 24,018

900 1,960 650 5,000

900 1,960 650 5,000 5,000 5,000 1,372 1,372 12,500 12,500 2,500 2,500 53,900 53,900 24,018 24,018

900 1,960 650 5,000 5,000 1,372 12,500 2500 53,900 24,018

Insurance Property taxes Labor Advertising 0 0

Gross revenue / year

CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

Net Return / year

-76,357 -10,447 -43,182

TABLE 2. CAPITAL AND OPERATING COSTS FOR A 40-ACRE SPORTFISHING LAKE STARTUP WITH A 15-YEAR PLANNING HORIZON AND USING EQUITY CAPITAL, ALABAMA, 2006
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

60,000 5,000 260 7,500 225 575 6,500 2,500 2,500 1,600 1,000 9,000 4,000 2,000 700 15,000 1,500 7,075 18,300 16,500 2,500 2,500

ALABAMA AGRICULTURAL EXPERIMENT STATION

Item Capital Costs Pond construction Pipe Trash rack Engineer fee Registration fee Fertilizer / Plantings Gravel / Rock Fathead minnows Shellcrackers Bluegill Shad Bass Feeder Boats Dock / Pier

Sub -Total

72,985

Operating Costs Fish Feed Fertilizer Testing/ Monitoring Maintenance 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 900 1,960 650 5,000 918 25,000 230 7,588 0 0 53,900 53,900 -14,090 321 918 25,000 5,000 230 7,220 53,900 53,900 3,256 3,715

900 1,960 650 5,000

900 1,960 650 5,000

900 1,960 650 5,000

900 1,960 650 5,000

900 1,960 650 5,000

900 1,960 650 5,000

900 1,960 650 5,000

Insurance Property taxes Labor Advertising Loan Amortization Interest on Loan 230 7,935 0 5,000 5,000 918 918 25,000 25,000 5,000 5,000 230 230 6,832 6,421 5,000 5,000 918 918 25,000 25,000 5,000 5,000 230 230 5,986 5,527

918 25,000

5,000 918 25,000 5,000 230 5,041 53,900 4,201

5,000 5,000 5,000 918 918 918 25,000 25,000 25,000 5,000 5,000 5,000 230 230 230 4,527 3,983 3,409 53,900 53,900 53,900 4,715 2,759 5,833

5,000 918 25,000 5,000 230 2,801 53,900 6,441

5,000 5,000 918 918 25,000 25,000 5,000 5,000 230 230 2,158 1,479 53,900 53,900 7,084 7,763

5,000 918 25,000 5,000 230 760 53,900 8,482

Gross revenue / year

Net Return / year

-107,068 -40,811 -65,178

7

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

Recreational water planning and development depends upon several factors, including (1) business use and preferences, (2) personal utilization or preferences, (3) site compatibility for such use, and (4) the site approval process. As noted, a land owner who is planning a site development for recreational water usually has a preconceived idea or vision of the demand for the waters’ end use. The initial goals set in transforming the rural land in the on-going recreational facility into a sportﬁshing lake (Scenario 1) were as follows: (1) Build a lake large enough to sustain a maximum of 90 ﬁshing trips during a 6-month time frame that would generate cash ﬂow during the facility’s slower use times of the year; (2) Stock and manage more aggressive and rapidly growing ﬁsh which would allow ﬁshing trips to be sold earlier in the life of the project compared to more traditional stocking regimes; (3) Relatively early in the project’s life, generate cash ﬂow that would permit relatively quick recoupment of the initial outlays; and (4) Create the opportunity for a memorable recreation experience for clientele. Once the business and personal goals are set, the next step involves actual site selection or compatibility of the property to complement these goals. Several property attributes affect the ultimate site selection such as topography of the property, streams and other ﬂowing bodies of water, soil characteristics and percolation, and other land characteristics depending on area or region of the state (Environmental Laboratory / USACE). Special attention should always be given to wetland observation when selecting a potential site. Wetlands are areas characterized by growth of wetland vegetation where the soil is saturated during a portion of the growing season or the surface is ﬂooded during some part of most years (Environmental Laboratory / USACE). Wetlands in the state of Alabama generally would include swamps, marshes, bogs, and other similar terrain. The main objective of the land owner is to identify and designate wetlands and consider the impacts they will have on the location and approval process of the projected body of water and vice versa. The last step, the site approval process through regulatory agencies, requires great amounts of time and detailed preparation. A consulting project engineer, environmental consulting ﬁrm, and/or a USACE district engineer can assist in the site planning and approval process. Alabama is served by USACE in the Mobile District, which regulates the majority of the State, and the Nashville District that regulates the extreme northern area of the State. Sources for ﬁnding a lake site planner include accredited environmental service companies or engineers, referrals from lake owners in your area, lists of consultants from regulatory agencies, and planners employed for waters/wetlands projects completed or occurring in your area. The site engineer, recognized as the planner for the remainder of this study, makes assessments of the topography and related impacts to aquatic features, such as wetlands, that the potential recreational water development site will have on the property. Upon the initial assessment of the projected site, determinations are made on the type of permitting needed by the applicable regulatory agencies. (See Appendices 2-9 for speciﬁc submission examples.) In Alabama, the site planning and approval processes typically involve two regulatory agencies: the United States Army Corps of Engineers (USACE) and the Alabama Department of Environmental Management (ADEM). Roles of these agencies are to ensure that construction of impoundments, quality of added water, and potential runoff are achieved in a speciﬁed manner which is consistent with established law, environmentally sound, and in the public’s interest. The process requires proper permitting of all construction activities and development of environmental impacts for projected sites. It is very important to take the proper steps in the site approval process before embarking on the actual construction of a site. Failure to successfully identify and complete compatible site locations and proper request for permits could result in project delays, plus severe damages and penalties. Subject to characteristics of a potential site and its dimensions, wetlands/waters delineation could be required. Wetlands delineation simply outlines all wetland areas that are possessed on the applying party’s

ALABAMA AGRICULTURAL EXPERIMENT STATION

9

land. These areas could possibly be utilized in the exchange through mitigation for the approval of the potential water site (ADEM, NPDES). The site planner is able to inform the land holder of these needs so that he/she can take the appropriate actions and steps. Basically, a detailed representation by drawing is developed and provided to the regulatory agencies regarding the wetland location and impacts of the project. United States Army Corps of Engineers (USACE) Since 1890, USACE has been regulating activities affecting U.S. waters. Historically, its activities were primarily concerned with navigation of U.S waterways. However, during the 1960s, the scope of USACE activities broadened through new laws and court decisions to include dumping of trash and sewage in or affecting waterways. In 1972, the Clean Water Act, particularly section 404, passed and broadened the scope of USACE authority, which now considers the full public interest for both the protection and utilization of water resources (USACE, Clean Water Act). The USACE’s focus on public interest is to assure that projects do not harm the general public; that is, the project can not beneﬁt one citizen while at the same time harming others. It is necessary, regardless of the project size or complexity, to follow the correct procedures set in the proposed project’s district. Not all projects will require speciﬁc permits by USACE. However, the land owner should notify and inquire regarding the proper process to be taken through USACE before starting the building process. The USACE has many general permits which allow minor activities to be completed without the need for individual processing. There are also several exemptions that are available for very speciﬁc activities, though consultation with either a site planner or USACE engineers is still highly recommended. Certain projects can avoid the permitting process partially or completely: the prudent action would be to ensure those omissions apply to your project before beginning construction. The site owner or planner should contact USACE regarding whether or not the potential site is applicable for such exemptions and permits. Larger, more complex projects typically require a complete process of submission, review, and approval by the USACE before building commences. Since these more complex projects usually require greater amounts of labor, money, and time, adhering to approval guidelines and requirements beforehand can prove beneﬁcial in avoiding hardships throughout the building process. More information on the steps needed to be taken through USACE in the approval process, the guidelines and inﬂuences considered by USACE when permitting projects, and examples of several general forms and applications used by USACE in the approval process can be found in the Appendix. Several of these standard procedures are examined more thoroughly in the following sections. The pre-application consultation, although optional, can be very beneﬁcial to the planner in expediting the permit process. After determining if a permit is needed, the applicant would need to schedule a meeting date with the local USACE district ofﬁce. Upon scheduling a meeting, a “Summary of Project” should be sent at least 10 days prior to all agencies that could be in attendance, such as Alabama Game and Fish Department or the Alabama Department of Environmental Management. If applicable, wetland/water delineation for the site should be brought to the meeting. The pre-application meeting is a good opportunity for the applicant to gather information regarding USACE rules and regulations that could affect ﬁnal project design. If public notice is needed, the applicant could be asked to notify Federal, state or local agencies, adjacent property owners, and the general public. This contact allows both public and private views to be heard by the USACE. Informing these groups allows for an assessment by USACE on the interest in and impact of the speciﬁed project. Upon receiving information concerning the proposed project, USACE will begin an assessment process. USACE will review the likely beneﬁts of the project compared to the detriments possible from

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

granting a permit for the said project. There are numerous factors to be considered when evaluating the public interest. Conservation, erosion, economics, aesthetics, ﬂood hazards, wetlands, water quality, recreation, and safety are important issues for consideration when decisions are made for the approval or denial of a construction site. Simply stated, USACE will weigh the need for the proposed project both publicly and privately, consider alternative locations and methods to obtain the project, and evaluate beneﬁts and detriments of the project. The presence of wetland areas typically requires a wetlands/waters delineation to be completed for USACE. In the state of Alabama, particularly the central and southern regions, wetlands/waters are often found on projected sites. A land owner should identify wetlands that are located on and in proximity of the project and take appropriate measures to ensure that the projected construction site is not detrimental to those speciﬁc areas. The site planner will obtain delineation in accordance with the Routine Onsite Methodology described in the 1987 U.S. Army Corps of Engineers Wetland Delineation Manual. Having a wetland/waters delineation completed before applying for a permit helps in expediting the approval process. Typically, a planner would take the following steps in a wetland/water delineation process and provision of a wetlands survey. These can vary depending on the proposed permitting site. • Mark wetland boundaries with labeled ﬂags designated alphabetically and numerically for each wetland site. For example, A-1 on the corner of a wetland boundary and continuing around the perimeter of entire wetland accordingly, A-2,A-3,A-4, until complete. Other wetlands may be designated in similar manner B-1– B-4, C-1–C-6, etc. • Denote each wetland boundary on the appropriate map. • Conduct upland and wetland data test for vegetation, soils, and hydrology as per regulatory agency guidelines. • Give drawings and results to the land owner of each of the areas tested . • Provide photographs of each area tested in mapped form to the land owner. A wetland survey prepared by the applying party is also required by USACE for projects in areas that contain wetlands/waters; however, a global positioning system (GPS) could be used in place of a wetland survey. The later method of distinguishing wetlands for USACE is a more economical approach with the general availability of GPS units; however, the user must still have the capability of operating the unit properly. Drawings of proposed sites and activities are required in addition to wetland delineation and application. There are three types of drawings needed in order for planned activities to be properly depicted for review by USACE. An original (or good copy) of Vicinity, Plan, and Elevation notations are to be submitted by the site planner on 8.5 X 11 inch white paper. These drawings are intended to provide USACE with a clear vision of the projected site and should be in good detail. The Vicinity Map is used to describe the area or vicinity as exact as possible through existing maps or site originals, and should include such items as latitude and longitude, township/range, roads, directions and other items used in locating the site. The Plan View illustrates the proposed activity from a view of above, and should include such items as water marks, location of structures, dimensions, and other items used in describing the site’s structural make up and plan of construction. The Elevation View should represent the water elevations, water depths, high water marks, and other items needed in describing the dimensions of the varying elevations of the project site (Environmental Laboratory / USACE). These illustrations can be very detailed and should have the assistance of a professional in development, who may already possess customized versions of each map or view (Appendices 5-7).

ALABAMA AGRICULTURAL EXPERIMENT STATION

11

Alabama Department of Environmental Management (ADEM) The second regulatory agency commonly involved in the water development process is the Alabama Department of Environmental Management (ADEM). ADEM enforces any and all regulations and laws affecting the state of Alabama’s environment in order to protect the State’s environment and citizens. Also, ADEM constantly monitors the State’s environmental status and makes recommendations on revisions needed to existing state laws and regulations as environmental status changes. For the needs of this study, the Permit Coordination and Development Division (PCDD) and the Water Division(WD) will be discussed and the steps required by both divisions during the site selection and construction approval processes for water in Alabama will be included. The PCDD communicates all pertinent application and project standings to the proper divisions involved for each program area. For example, a permit for drainage alteration for an existing water body would ﬁrst reach PCDD, then would be referred and coordinated to the appropriate division for approval, denial, or monitoring procedures, in this case the WD. The environmental permit is the main tool that ADEM will use to regulate emissions into the air and water, assure the quality of drinking water, and oversee the management of solid and hazardous wastes. The permits sent to ADEM by the site planner will again, ﬁrst be reviewed by the PCDD and then be directed to the appropriate program areas. When applying for a site approval permit, the destination of acceptance should be understood because failing to do so can cause major time loss in the project’s review. The Water Division (WD) is the other division that will be heavily involved in the permitting process for the proposed recreational water site. The WD constantly evaluates the current and projected status of waters in the state of Alabama. The WD adheres to the Clean Water Act as does the USACE; however, the two agencies work in conjunction under separate sections of the Act. The WD uses section 401 Water Quality Certiﬁcations in conjunction with the Section 404 permits used by the Mobile and Nashville Districts of USACE when considering potential site approval. The main disparity between Sections 404 used by USACE and Section 401 used by ADEM is that the 404 permits address more of the actual construction and design of the proposed water site, while the 401 certiﬁcations emphasize the actual water quality of the proposed site. To basically understand how USACE and ADEM work in conjunction with Clean Water Act, remember that USACE approves the actual construction process of the proposed site and ADEM certiﬁes that the quality of water and effects on Alabama waters resulting from that site are acceptable. Section 401 of the Clean Water Act requires that certain activities have a State water quality certiﬁcation. The WD of ADEM will issue certiﬁcation, when there is reasonable assurance that the discharges of the proposed water site will not violate the water quality standards under Section 303 of the Clean Water Act and Title 22 of the Code of Alabama 1975 (ADEM). When evaluating water projects, the ADEM Field Operations Division--Water Quality Program, Chapter 335-6-12 is a great tool to utilize to learn the requirements of water quality standards, deﬁnitions, and programs considered by ADEM. The Water Quality Program Chapter’s purpose is to establish a comprehensive statewide program for stormwater management pursuant to the requirements of the National Pollutant Discharge Elimination System (ADEM, NPDES). This material can be obtained through ADEM with ease and should be used by prospective site planners. Application forms required are site and activity/use speciﬁc. Consultation should be obtained by the site owner with either the project planner or the Field Operation Division of ADEM before the project commences. Several forms and registrations needed by ADEM for the recreational site are presented in Appendices 7-9. The Field Operation Division will be able to assist site planners with the proper forms for each activity/use. For example, a ﬂooded timber area utilized for hunting would require separate registration and monitoring forms than a 40-acre site used for sportﬁshing, which would have greater water depths and larger run off potential. If a project site’s activities and uses do not accommodate standard best management practices regulated through ADEM, alternative measures regarding

12

CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

best management practices could be required. Examples of this situation could be improper drainage, discharge, or improper materials used in ﬁltering discharge, such as pipes and rocks. Again, the primary concern of ADEM with recreational waters regards actual and potential discharge into Alabama waters. Sites are monitored periodically for adherences to regulations and water quality management practices. Like with USACE, ADEM is present to preserve and protect Alabama’s waters and citizens.

ECONOMIC ANALYSIS AND FEASIBILITY
Scenario I: Costs and Budget Costs and returns for the 40-acre sportﬁshing lake addition to an existing recreational facility are based on the site speciﬁc examples identiﬁed in this study. Management and budget analysis are based solely for the uses in this project and could vary considerably for other projects. Thus, readers should adjust entries to represent their property and situation. The investment and operating costs of the project are shown in Table 1. The initial capital costs were assumed to be satisﬁed through personal equity. The cost of lake construction was $1,500 per acre, and the engineering fee of $7,500 included all except one of the registration and permitting fees. All operating cost remained constant throughout the life of the project and exclude assumptions of future inﬂation. The sales assumptions were based on other outdoor activities sales and marketing records during the past 23 years at the project site facility. Feed cost were based on a 4-month cycle of two feedings per day and a 2-month cycle of one feeding per day of approximately 7 pounds of feed per feeding, or approximately 3,780 pounds total per year. Fertilizer application was based on recommended practices of liquid based fertilizer. There were seven applications of 200 pound units of fertilizer prescribed from March to October per year. Insurance was liability based, providing $1,000,000 of coverage per occurrence with two occurrences allowed annually. (Note: Recreational water that is not in a farm setting and is non-income producing can usually be covered by general home owners insurance.) Maintenance cost includes general upkeep and feed and fertilizer application. Labor cost includes overall daily management practices on the site when customers are present, sales and booking, and marketing with the person(s) shared with the existing operation. Property taxes are based on the land’s market value ($1,800 per acre) at a 10 percent assessment rate for a 2,300 acre tract of rural property and a local 51 millage rate. The sportﬁshing lake represents approximately 6 percent of the facility’s outdoor recreation income and is therefore allocated approximately 6 percent of the property taxes for the speciﬁed tract of rural land. Advertising costs were assumed to be 6 percent of the facility’s total outdoor recreation advertising budget. Federal income taxes will vary depending on the level of taxable income and the nature of the sportﬁshing entity’s legal business status as a limited liability company, corporation, partnership, or as a sole proprietorship. Sales taxes also ﬂuctuate depending on the county of the state in which the project is located. Thus, all federal and state income taxes were excluded from this analysis but can be simply added to Tables 3 (Scenario 1) or 4 (Scenario 2), for analysis purposes. Fishing memberships were provided for $700.00 per day per boat and were held constant throughout the life of the project (See Tables 1 [Scenario 1] and 2 [Scenario 2]). Memberships were assumed to start in the fourth year of the project. Fishing trip sales were expected from existing ad campaigns in outdoor publications, the facility’s web site trafﬁc, and individual mailings to the facility’s existing customers and members. An existing customer or member was recognized as someone who has personally visited the case study facility, joined as a member in the past, or has speciﬁcally requested information regarding outdoor recreation at the facility. The maximum number of ﬁshing trips per season was deﬁned to be 90, which includes two members per trip. A typical booking rate of 85 percent per year, 77 trips, is held constant throughout the life of the project for the base analysis.

TABLE 3. PROJECTION OF THE NET CASH FLOWS FOR A 40-ACRE SPORTFISHING LAKE THAT IS AN AMENITY TO AN EXISTING RECREATIONAL FACILITY, 15-YEAR PLANNING HORIZON, ALABAMA, 2006
1 2 3 5 4 53,900 53,900 53,900 53,900 10,447 43,182 46,382 29,882 29,882 29,882 29,882 29,882 29,882 29,882 29,882 29,882 53,900 53,900 53,900 53,900 53,900 53,900 53,900 53,900 53,900 29,882 7 6 53,900 53,900 8 53,900 11 10 9 53,900 53,900 53,900 12 53,900 13 53,900 14 53,900 15 53,900 53,900 29,882

-72,985 3,372

2,500

2,500

ALABAMA AGRICULTURAL EXPERIMENT STATION

Item Operating Receipts Terminal Value Total Cash Inﬂow Initial Outlay Operating Expense Financial Expense Depreciation Recurrent Cost Taxable Income Income Taxes Total Cash Outﬂow Net Cash Flow 46,382 32,382 7,518 21,518 29,882 29,882 24,018 24,018 29,882 24,018 29,882 32,382 29,882 24,018 24,018 24,018 29,882 24,018 29,882 24,018 29,882 24,018

-76,357 -10,447 -43,182 -76,357 -10,447 -43,182

29,882 24,018

TABLE 4. PROJECTION OF THE NET CASH FLOWS FOR A 40-ACRE SPORTFISHING LAKE STARTUP WITH A 15-YEAR PLANNING HORIZON, USING BORROWED CAPITAL FOR CONSTRUCTION AND INITIAL COST PURPOSES, ALABAMA, 2006
1 2 3 4 5 53,900 53,900 6 7 53,900 53,900 8 53,900 53,900 44,428 5,271 53,900 53,900 44,428 44,428 6,216 5,757 53,900 53,900 32,993 7,818 57,728 7,740 60,928 44,428 7,062 6,651 2,500 9 10 11 53,900 53,900 53,900 53,900 53,900 53,900 44,428 44,428 44,428 4,757 4,213 3,639 2,500 12 53,900 53,900 44,428 3,031 13 53,900 53,900 44,428 2,388 14 53,900 53,900 44,428 1,709 15 53,900 53,900 44,428 990

Item Operating Receipts Terminal Value Total Cash Inﬂow Initial Outlay Operating Expense Financial Expense Depreciation Recurrent Cost Taxable Income Income Taxes Total Cash Outﬂow Net Cash Flow -67,990 -53,579 -54,644 -50,185 -14,090 321 3,256 3,715

-72,985 25,918 8,165

-107,068 -44,811 -65,178 -107,068 -40,811 -65,178

-49,699 -49,185 -51,141 -47,067 -47,459 4,201 4,715 2,759 5,833 6,441

-46,816 7,084

-46,137 7,763

-45,418 8,482

13

14

CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

By allowing an extended production cycle and providing substantial feeding sources in the way of forage ﬁsh, the F – 1 Tiger Bass were expected to increase in size at a rate of 2.2 pounds per year or greater until leveling off in excess of 14.0 pounds. Also, by limiting the amount of ﬁshing pressure on the resource, harvest numbers should increase compared to waters open to the public that can be ﬁshed daily by high volumes of people. Expected catch per person per day ranged from 25 to 75 ﬁsh, based on similar sportﬁshing lake harvest records for already established operations with similar management practices in place (Smith, 2005). Scenario II: Costs and Budget The 40-acre start-up operation assumes that $138,000 was borrowed at a 5.75 percent interest, with closing costs being 2.5 percent of the loan, approximately $3,450. The borrower is responsible for 20 percent of up-front funds and all ﬁnancial and closing costs (See Tables 2 and 4). Also, labor and advertising costs are no longer shared with the on-going recreational facility. Thus, the labor outlay is increased to $25,000 and advertising goes to $5,000 per year. Property taxes are estimated for 100 acres (40 acre lake plus 60 acres for run-off area) at 51 mills and a value of $1,800 per acre with a 10 percent assessment rate. The 40-acre sportﬁshing lake start-up mimics the management practices and cost schedules of the 40-acre sportﬁshing scenarios added as an amenity to an on-going recreational operation. This scenario required the borrowing of capital to address the initial capital cost and operating cost during the ﬁrst four years of the project. Closing costs were amortized over the life of the loan. The advertising cost provides ad space in two outdoor publications to be run ﬁve times per year, approximately $3,800, and site brochures and literature, approximately $1,200 per year. (See Table 2). Scenario I: Economic Analysis The 40-acre sportﬁshing lake addition to an existing outdoor recreational facility was evaluated using Net Present Value (NPV) and Internal Rates of Return (IRR) methods. NPV and IRR methods are effective for evaluating the feasibility of multiyear projects having varied annual inﬂows and outﬂows which need to be adjusted or discounted to represent the time value of money; that is, a dollar received today is worth more than a dollar received in the future. If NPV=0, the return just equals the deﬁned cost of capital or discount factor. Alternatively, the IRR is the discount rate that will exactly equate the present value of inﬂows with the preset value of outﬂows. If NPV is positive, the project covers the deﬁned discount factor plus the present value of the indicated amount and the IRR is higher than the discount factor used. The net present value at a 12 percent discount rate was $ -14,056 and therefore lacked feasibility at this level (Table 5). However, with a rate of 8 percent, the net present value was $14,718 and was acceptable to the ﬁrm. By accepting the net present value at 8 percent, the manager would be willing to engage in the 40-acre sportﬁshing addition project. The net present value relays to the manager that the project will not only meet the ﬁrm’s desired rate of return at 8 percent but will also give the project an additional worth of $14,718 present value above that deﬁned rate of return. The internal rate of return (IRR) for the 40-acre scenario was 9.8 percent. This rate informs the manager that construction of the project should not take place if the manager believes that the opportunity costs for equity and management time and effort plus potential inﬂation and risks are greater than 9.8 percent. A sensitivity analysis of NPV and IRR to percentage of deﬁned use capacity was conducted. At 90 percent (81 visits) of the assumed number of visits (90 visits), the IRR was 12.9 percent and at 95 percent (86 visits) of the assumed number of visits, it was 16.4 percent. Thus, as would be expected, development and maintenance of the clientele base is extremely important to the feasibility of the operation. Note that in this scenario, these rates must be sufﬁcient to cover the opportunity cost of management and capital plus levels of inﬂation and risk which have not been included in costs estimates.

ALABAMA AGRICULTURAL EXPERIMENT STATION

15

Scenario II: Economic Analysis The 40–acre sportﬁshing lake start-up using borrowed capital illustrates a lack of feasibility at 85 percent use capacity and 8 percent and has a NPV of Scenario 2 Scenario 1 $-172,911 (See Table 5). Thus, the manager would Equity Capital Borrowed Capital Cash Flow1 Cash Flow1 Year reject addition of a 40–acre sportﬁshing lake given -107,068 -76,357 1 deﬁned parameters. Feasibility would not change if -40,811 -10,447 2 use was increased to 100 percent of deﬁned capacity -65,178 -43,182 3 -14,090 7,518 4 (90 visits); NPV is still $-95,032 at 8 percent. Even 321 21,518 5 if the owner contributed $10,000 per year personal 3,256 24,018 6 3,715 24,018 7 value for years 4 to 15 for use by family and friends, 4,201 24,018 8 the NPV would still be negative at $-18,988. How4,715 24,018 9 ever, at 6 percent, the NPV is $951, which represents 2,759 21,518 10 5,883 24,018 11 a 6.1 percent internal rate of return. 6,441 24,018 12 In practical terms for feasibility, this means 7,084 24,018 13 the 40-acre start-up lake generates sufﬁcient returns 7,763 24,018 14 8.482 24,018 15 at 100 percent of deﬁned capacity (including the -178,577 136,730 Total $10,000 imputed value for personal use for years 4-167,611 -14,056 NPV 12% -172,911 14,718 NPV 8% 15) to cover investment and operating costs (includ— 0.098 IRR ing interest on the loan plus amortized closing costs) 1 Before income tax and gives a 6.1 percent rate of return. For feasibility, the owner would decide whether this level was sufﬁcient to cover the opportunity costs of owner equity and management time and effort plus inﬂation and risks.
TABLE 5. CASH INFLOWS, NET PRESENT VALUES (NPV), AND INTERNAL RATES OF RETURN (IRR) FOR A 40ACRE SPORTFISHING LAKE WITH AND WITHOUT BORROWED CAPITAL IN ALABAMA, 15 YEAR PLANNING HORIZON, 2006

DISCUSSION
This paper reviews the process and regulation requirements for transforming rural land into recreational waters and analyzes the economic feasibility of establishing such recreational waters for sportﬁshing use. The economic analysis evaluated a 40-acre sportﬁshing lake added as an amenity to an ongoing recreational facility and as a start-up operation. Process and regulation requirements and results discussed are site speciﬁc; however, they could be used as guidelines to evaluate other similar construction projects for planning purposes. Two regulatory agencies—the United States Army Corps of Engineers and the Alabama Department of Environmental Management—are responsible for monitoring, regulating, informing, serving, and, in some cases, punishing those who improperly conduct construction projects of new and existing bodies of water in Alabama. Land owners are responsible for educating themselves on the proper guidelines and procedures set forth by the monitoring agencies. The agencies and land owners working together on proper management of water, best management practices, accurate site planning, excellent water quality controls, and sound construction procedures will ensure successful construction and use of recreational waters by private land owners. The economic evaluation in this study indicates that addition of recreational sportﬁshing water to an existing outdoor recreation facility can be beneﬁcial to the ﬁrm under certain conditions. By owning the land and using equity capital in the construction of the 40-acre sportﬁshing scenario, the ﬁrm manager would be willing to engage in the addition of sportﬁshing water to his/her existing operation. With other outdoor recreational activities already in place and generating income, the overhead costs can be shared and minimized for the sportﬁshing project. That is, the 40-acre scenario only absorbs its respective share of cost of advertising, labor, and property taxes compared to the other income- produc-

16

CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

ing activities the ﬁrm has in place. Also, by having an existing customer base, the ﬁrm reduces the risk and efforts associated with generating sufﬁcient customer trafﬁc to support the expected sales ﬁgures. Without the synergistic relationships with the ongoing recreational facility, the start-up 40–acre sportﬁshing operation lacks feasibility. The ﬁnancial returns could assist the land owner, who does not have other sources of income being generated on his/her land, with maintenance cost associated with the property, property taxes, or in providing supplemental income, but would not be sufﬁcient to cover a deﬁned 8 percent return. The need for borrowed capital has a signiﬁcant adverse effect on the cash ﬂows of the project. Establishment of an intensively managed population of sportﬁsh that is desired by the majority of the southeast population, and particularly Alabama residents, is necessary for success. Thus, customer or member participation is expected to meet sales expectations early in the life of the existing outdoor facility. Providing a private setting in which customers or members have the opportunity to harvest above-average catches and weights of ﬁsh also encourages customer or member participation more so than traditional forms of freshwater sportﬁshing. The speciﬁc type of sportﬁsh used in this project also affords ﬁsherman the opportunity to experience a more aggressive type of bass than is typically found throughout Alabama. The analysis in this study can provide both outdoor recreationists and rural land owners with a basic understanding of the process and beneﬁts of constructing recreational waters. Moreover, the analysis in this study demonstrates the economic returns that can be achieved by outdoor recreational facilities through the addition of sportﬁshing waters.

REFERENCES
Alabama Department of Environmental Management Field Operations Division – Water Quality Program. “National Pollutant Discharge Elimination System (NPDES),” Chapter 335-6-12, (1975). Alabama Department of Environmental Management. Internet site: http://www.adem.state.al.us/ (Accessed April 6, 2005). American Sportﬁshing Association. “Data and Statistics.” Internet Site: www.asaﬁshing.org/ASA/statistics/saleco_trends (accessed December 15, 2005). Auburn University and USDA-Natural Resources Conservation Service. “Reducing Storm Runoff into Ponds” Alabama Aquaculture Best Management Practices BMP No. 1. Internet site: http://efotg. nrcs.usda.gov/references/public /AL/INDEX.pdf (Accessed December 15, 2005). Auburn University and USDA-Natural Resources Conservation Service. “Feed Management” Alabama Aquaculture Best Management Practices BMP No. 7. Internet site: http://efotg.nrcs.usda.gov/references/public/AL/INDEX.pdf (Accessed December 15, 2005). Auburn University and USDA-Natural Resources Conservation Service. “Pond Fertilization,” Alabama Aquaculture Best Management Practices BMP No. 8. Internet site: http://efotg.nrcs.usda. gov/references/public/AL/INDEX.pdf (Accessed December 15, 2005). Boyd, C., J. Queiroz, and R. Wright. “Managing Sport Fish Ponds to Lessen Nutrient Discharge to Streams.” Wildlife Trends 2(July 2002): 13-15. Burt, O., and D. Brewer. “Estimation of Net Social Beneﬁts From Outdoor Recreation.” Econometrica 39(September 1971):813-27. Chappell, R. Personal Communication. First South Production Credit Association, May 2005. Ditton, R.B., S.M. Holland, and D.K. Anderson. “Recreational Fishing as Tourism.” Fisheries 27(2002): 17-24. Environmental Laboratory. United States Army Corps of Engineers. “Corps of Engineers Wetland Delineation Manual” Vicksburg, MS, 1987.

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17

Erickson, S. P., J.T. Akridge, F.L. Barnard, W.D. Downey. Agribusiness Management, Third Edition. Boston: McGraw-Hill Higher Education, 2002. Hairston, J.E.,, S. Kown, J. Meetze, E.L. Norton, P.L. Oakes, V. Payne, and K.M. Rogers. “Protecting Water Quality on Alabama Farms.” Alabama Soil and Water Conservation Committee, Montgomery, AL, (1995). Hamel, C., M. Herrmann, S.T. Lee, K.R. Criddle, and H.T. Geier. “Linking Sportﬁshing Trip Attributes, Participation Decisions, and Regional Economic Impacts in Lower and Central Cook Inlet, Alaska.” The Annals of Regional Science 36(2002): 247-64. Huguley, T. Personal Communication. Owner of Huguley Farms, April 2005. Jolly, C.M., and H.A. Clonts. Economics of Aquaculture. New York: Food Products Press, 1993. Pitman, R. Personal Communication. Owner of White Oak Plantation, February, 2005. Schramm, Jr., H.L., P.D. Gerard, and D.A. Gill. “The Importance of Environmental Quality and Catch Potential to Fishing Site Selection by Freshwater Anglers in Mississippi.” North American Journal of Fisheries Management 23 (2003): 512-522. Smith, B. Personal Communication. Owner of American Sportﬁsh, March, 2005. Stanley, S. Personal Communication. March, 2005. United States Army Corps of Engineers (a). “Clean Water Act 404” Legal Information Institute, 2003. United States Army Corp of Engineers (b). Internet site: http://www.usace.army.mil/ (Accessed April 2, 2005). USDA. 2005. Alabama Agricultural Statistics. NASS and Ala. Dept, of Agr. & Industries, Bul. 47, p. 43. USDI, Fish and Wildlife Service (a). “2001 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation.” Internet site: http://federalaid.fws.gov/Surveys/surveys.html (Accessed December 15, 2005). USDI, Fish and Wildlife Service (b). “2001 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation.” Issued October, 2002. Internet site: http://census.gov/prod/2003pubs/fhwolus.pdf (Accessed December 15, 2005). USDI, Fish and Wildlife Service (c). “Fishing, Hunting, and Wildlife-Associated Recreation: Alabama,” issued March, 2003. Internet site: http://census.gov/prod/2002pubs/fhwol-al.pdf (Accessed December 15, 2005).

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

APPENDIX 1. STEPS IN THE USACE APPROVAL PROCESS AND GUIDELINES AND INFLUENCES CONSIDERED BY USACE WHEN PERMITTING PROJECTS
The basic application form used by USACE throughout the country is the Engineer Form 4345, Application for a Department of the Army Permit (Appendix 2). The form is easily accessible and can be obtained through downloading from the internet at www.usace.mil or can be acquired through one of the USACE regulatory ofﬁces. As previously mentioned, certain activities/uses have already been authorized by nationwide or regional permits, and will need no further approvals. In this situation, USACE would likely inform the planner to commence activities under a Region (RWP) or National (NWP) permit, also referred to as a General Permit. Other activities/uses that are minor or routine in nature, such as inserting new pipes and pumps needed in the irrigation process on an existing farm, may qualify for a Letter of Permission (LOP). A LOP is usually issued for activities that are minimal in impacts and will likely have no public objections. The LOP can be issued quickly since public notiﬁcation is not required (USACE). The Individual Permit can be issued in one or two ways. The ﬁrst, mentioned above, is the Letter of Permission (LOP) and, the second is through a Standard Permit (SP). The SP is a more intensive process of approval and requires more measures to be taken by the owner. A recreational lake of approximately 40 acres in size, on private land in Alabama will be used for an example in the consultant proposal (Appendix 3) Below are the standard procedures for a SP listed in the order of the review. I. Pre-application consultation: • This step is optional, as mentioned previously, but highly is recommended. An applicant can simply contact the USACE engineer in his/her district to schedule a consultation. II. Applicant/Planner submits ENG Form 4345 to the local regulatory ofﬁce: • Local ofﬁces can have minute variations for submission. III. Application received by USACE : • USACE will assign the project an identiﬁcation number; the ID number is what the applicant/planner will need to use when checking the status of the application. IV. Public notice issued: • This notice is to be issued by USACE within 15 days of receiving all permit information from the applicant, including drawings, fees, and applications. V. Comment Period: • The comment period typically takes place within 15 to 30 days after notices of potential site construction have been served, yet it is dependent upon the proposed construction activities. VI. Proposal review: • The proposal for planned activities/uses will be reviewed by USACE. This review observes all permit request information and could be delayed if that information is not received in a timely manner. VII. USACE considers all comments: • This point of the process is when USACE considers reviews from all relevant “interested” groups such as, adjoining land owners, engineers, or ofﬁce of public health, for example. VIII. Other Federal agencies consulted: • This step is only used if USACE deems it necessary. Example: applicant has been denied previously for a certain construction activity due to Federal or State Law. IX. District engineer may ask for additional information: • Depending on the proposed activities, USACE could require wetlands/waters delineation, alternative analysis, mitigations, endangered species impacts, drawings or minimization plans (Appendix 4). X. Public hearing: • Public hearings are held to acquire information and give the public the opportunity to present opinions. These meetings are rarely needed, and can usually be resolved informally by the district engineer. XI. District engineer decision: • The district engineer will either issue the permit for construction or deny the site and advise the applicant on reasoning.

ALABAMA AGRICULTURAL EXPERIMENT STATION

19

APPENDIX. 2. APPLICATION FOR DEPARTMENT OF THE ARMY PERMIT

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

ALABAMA AGRICULTURAL EXPERIMENT STATION

21

APPENDIX. 3. EXAMPLE CONSULTANT PROPOSAL

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

APPENDIX 4. EXAMPLE CONSULTANT PROPOSAL

ALABAMA AGRICULTURAL EXPERIMENT STATION

23

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

APPENDIX. 5. SAMPLE DRAWINGS FOR A PERMIT APPLICATION

ALABAMA AGRICULTURAL EXPERIMENT STATION

25

APPENDIX. 6. EXAMPLE SECTION VIEWS

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

APPENDIX. 7. EXAMPLE EMERGENCY SPILLWAY LOCATION

ALABAMA AGRICULTURAL EXPERIMENT STATION

27

APPENDIX. 8. ADEM: EXAMPLE NOTICE OF REGISTRATION

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CONVERSION OF RURAL LAND TO RECREATIONAL SPORTFISHING USE: AN ECONOMIC ANALYSIS

ALABAMA AGRICULTURAL EXPERIMENT STATION

29

APPENDIX. 9. ADEM: EXAMPLE FOD STORMWATER REGISTRATION TERMINATION REQUEST