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<br />3686
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<br />LETTER FROM THE BUREAU OF THE BUDGET
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<br />EXECUTIVE OFFICE OF THE PRESIDJ:'NT,
<br />BUREAU OF THE Buoo'F"r,
<br />Was kington, D.C., ill al'ch 4, 19CO.
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<br />The Honornble. the SECRETARY OF THE INTERIOR.
<br />Jlfy DEAR MR. SECRETARY: This will acknawledge yaur letter of
<br />February 25, 1%0, trmsmitting yaur report on " plan af develap-
<br />ment for Ruedi Dam a.nd Resen'oir.
<br />Your report proposp",,> RlIedi Da.m as a substitute for Aspen, whic.h
<br />W'3S originally proposed as a feature of the Fryingpn.n~Arkfi.nsas
<br />project. The RlIedi Dam is estimated to, cost $12,831,000, of which
<br />$7,600,000 woulei be allocllteei to the Fryingpan-Arkansas praject and
<br />$f),23~,OOU is considered dm-rgE'flble to wesfe-nl-slope uses.
<br />It IS noted t.lmt, a.lthough there llre no spec.ific costs required for
<br />realization of t.he fish and wildlife benefits alltieipat.ed from the
<br />project, $1,757,800 is allocated to fish and wildlife. The BlIreml af
<br />the Budget considers that. only addit.ional projeet costs I~quired for
<br />realizatian af fish and wildlife benefits should be allocated to this
<br />purpase. This is the method employed in the repart far allocatian
<br />of costs to recreat.ion, lWei it. is believed to be equally applicable to fish
<br />and wildlife costs.
<br />y aur repart propases to a.llac"'te costs among project purposes based
<br />on a lOO-year period of n.nalysis. The Bureau "f the Budget has Ion/(
<br />causidered that propos<,d water resources development prajects should
<br />be eT'ulun.t.ed within their expected eeollomic life, hut not beJond 50
<br />years from the time project benefits became available. While the
<br />physical life of many projects will undoubtedly exceed ,.0 yearH, an
<br />a.ssumption of economic life beyond 50 years is highly spec.nJa.tive,
<br />part.icularly if the rate of recent technalogical advance is prajected
<br />JI1ta the fu't.ure. In this case the use. of a IOO-yen!" pel"iad of analysis
<br />results in a signific.a.nt reduction in reimhursnble costs.
<br />It wauld appear t,hat an "ppropriate adjust.ment in the cost, a.!loc,,-
<br />tlon. using a [,O-year periud of una.lysis mId no aJloc..'lt.ion t.o fish a.nd
<br />wildlife, would produce an a.11ocat.ion to deferred storage for munici-
<br />pal and indust.rial wnter of somewhat in excess of 30 percent of the
<br />eost of the project. This would be inconsistent, wit.h the terms af the
<br />'Vater Supply Act of ln58, which limits to 30 percent. the allocat,ion
<br />to deferre,1 ",,,ter supply storage. It is believe,1 that this fact should
<br />be ca.lled to the attent.ion of the Congress.
<br />It. is unde.rstood that your report. is the result of ft. reconnnisS,,'ulce
<br />survey rat.her than a project investigation and that. the cost estimate..,;;
<br />are. tl1endore. of n more preliminury character t.hn.n is usual for re-
<br />pOlis to t.he COllg"ress whieh se.r"e as a basis for pro]ect. :tlltllOriza-
<br />t.ion. It is considered, t.herefore, t.lmt, in the event. t.he Fryingpan-
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