WSP10931

• File Number: 8112.600
• Description: Arkansas White Red Basins Interagency Committee - AWRBIAC -- Reports
• Basin: Arkansas
• Water Division: 2
• Date: 3/13/1952
• Title: Cost Allocation - Third Progress Report of the Work Group on Benefits and Costs - AWRBIAC Committee
• Water Supply Pro - Doc Type: Report/Study

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This procedure falls within .the precepts of the Green Book and
may be set forth briefly as follows:

1. Before any portion of the total costs of a multiple purpose
project may be allocated to recreation or to fish and wildlife,
the net benefits to recreation or to fish'and wildlife must be
positive quantity (not negative or zero).

2. Before any portion of the joint facility (dam and reservoir)
can be allocated to recreation or to fish and wildlife, the total
benefits for recreation or fish and wildlife must justify an
e^~enditure.greater than the cost of the separable features necessary
for'realization of the benefits by the public.' (The cost of pro-
vising these separable features is the separable costs figUre used
in the separable costs-remaining benefits formula).

3. Instead of us1ng a monetary expression of benefits 1n the
separable costs-remaining benefits formula, only' an "alternative
. justifiable cost":f1gure is used.

.4. The "alternative justifiable cost" is derived as follows:
Whenever the net recreation or 'fish and wildlife benefits
from a ~ltiple purpose project are positive, an estimate is
made of the cost of providing equivalent benefits by thelesst
costly alternative means: If, on the basis of a judgment appraisal,
this alternative cost is a justifiable expenditure for the benefits
to be derived from the project, this alternative cost is the
"alternative justiflabie cost". lf, on the basis of a judgment
. appraisal by competent technicians, the alternate cost .is not a
'justifiable cost for the benefits from the project, a judgment
estimate is made of the 'maximum Justifiable expenditure for these
benefits.

5. In the separable costs-remaining benefits formula, the
"alternative justifiable cost" is entered as the item entitled
"Benefits limited by alternate cost". From this point on, all
calculations are exactly the same as for any other project pur-
pose.

The following hypothetical examples are offered as illustra-
tions of how the above will work in the consideration of the
effects of multiple purpose projects.

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