Michigan's Oakland County, home to remarkable economic growth, prosperity, and private investment, may not resemble a desert, but regional planners decided to build an aquatic oasis for residents of the Detroit-area municipality anyway. The result? Waterford Oaks Waterpark, a 145-acre, county-owned and operated recreational complex that attracts residents and nonresidents alike, while devouring hundreds of thousands of dollars in tax subsidies. Privatization-the transfer of government assets to the private sector-could both preserve this water wonderland and rescue Oakland taxpayers from an annual sea of red ink.
Waterford Oaks, completed in 1977 (constructed for $1.7 million) boasts an outdoor wave pool, two water slides, an aquatic play land for children, ten tennis courts (including two platform courts), a full BMX dirt bike racetrack, a toboggan run, shuffleboard areas, and several pavilions. In 1997, 73,250 people visited the tax-funded park during the summer. Adult nonresidents were charged $12 for day passes, adult residents paid $9, children's passes were $6, and groups and seniors received special discounts. The winter toboggan run attracted 13,429 people at respective rates of $8, $6, and $4. In 1998, the park increased its summer rates by $1.
Despite these user fees, however, Waterford Oaks's revenue has not kept pace with its annual operating expenses for many years. From 1992 to 1997, the park overspent its budget by $221,468. Its proposed budget for fiscal year 1999 is $874,386, more than a 55% increase over its 1998 actual budget of $562,578. Based on the adopted 1999 budget, expenditures since 1992 have risen an astounding 226%.
Must Oakland County taxpayers foot such a large bill to entertain themselves and visitors from neighboring counties? Residents of Muskegon County might say no. They have access to everything Oakland County has and more-and all paid for without one dime of county tax revenue. Muskegon is home to Michigan's Adventure Amusement Park, a 220-acre, privately owned park that provides many of the same attractions offered by Waterford Oaks-and more. Consider a list of attractions that can be found at Muskegon's private amusement park:
Six roller coasters including the third largest wooden roller coaster in the country, 22 total water slides in six different groupings, a miniature golf course, a giant gondola wheel, carousel, Tilt-a-Whirl, Scrambler and Flying Trapeze rides, a game arcade, and three wave pools, each capable of different styles of wave action. In 1998, visitors paid as low as $15 for full, day-long access to over 40 attractions. "Michigan's Adventure is successful because we give our customers the most fun for their dollar," said Roger Jourden, owner of the park. "Last year was our best year ever; we set records in attendance with nearly 500,000 visitors from 40 out of the 50 states."
The park, which is open from May to September, was purchased by Jourden for $115,000 in 1968, when it had only a few small rides. "I've been in this business for 30 years and when I started there were no water slides or wave pools," he said. "The market forced me to add these water rides."
The new "Wild Water Adventure" area was necessary to continue attracting customers, said Jourden, because smaller water parks were popping up in the Muskegon area to fill consumer demand that he was neglecting. "I would have lost a lot of customers if I had not added water attractions," he said.
The location of Michigan's Adventure near Muskegon suggests that a privatized Waterford Oaks could attract much more business than it does currently. Oakland County has 9 times the population and more than double the average income of Muskegon County: In 1996, Oakland residents earned an average income of $38,127 as compared to Muskegon County's $19,000.
Waterford Oaks could benefit more from being near a greater number of people with more disposable income.
Both economic and demographic considerations suggest that privatization of Oakland County's Waterford Oaks Waterpark could earn additional tax revenue for the county rather than draining it from taxpayers. Privatization is a win-win situation for Oakland residents, who would continue to enjoy fun in the sun at the local water park-without being pulled under by unnecessary taxes.