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<br />FISH AND WILDLIFE COST ALLOCATION
<br />PROCEDURE PROPOSED
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<br />The following examples show, how the proposed' cost allocation
<br />procedure could be applied t'o three' hypothetical s1tua tions. The Sub-
<br />work Group proposed that commercial fish and fUr production be evaluated
<br />in the manner recommended by the Subcommittee on Benefits and costs,
<br />FIARBC. Such values have been omitted from the examples.
<br />
<br />Example I
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<br />Example I is illustrative of a case' in which the recreation,
<br />fish and wildlife opportunities afforded by a multiple-purpose project
<br />answers a need and benefits based on the justified alternative cost
<br />exceed the separable costs of the basic facilitiss required to realize
<br />the benefits. In this case, recreation, fish and wildlife will bear a
<br />proportionate part of the cost of the joint facility. This is illustra~
<br />tive of the upper limits of cost ,allocation to recreation or fish and wild-
<br />life.
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<br />a. Assume, that the prOject wili provide irrigation, hydroelectr,ic
<br />power, flood control, recreation, and fish and wildlife benefits.
<br />
<br />b. Assume that the project will satisfy definite recreation, fish
<br />and wildlife needs in the area and that specific fish and wildlife
<br />features would cost $10,000, and specific recreation ,features would
<br />cost $100 ,000. ,The lowest alternative cost of providiIig comparable
<br />fish and wildlife benefits would be $100,000 and the lowest alterna-
<br />tive cost bf providing recreation benefits would be $500,OOO"and
<br />that; on the basis of judgment, the benefits are believed at' least,
<br />equal to their costs, and the costs are considered justified.
<br />
<br />c. Assume that 'the total project benefits are $17,600,000, the
<br />total project costs $16,000,000, the total separable costs
<br />$6,610,000, and,the total joint costs $9,390,000, with the Various
<br />benefits and costs broken down as shown in Ex~ple I.
<br />
<br />d. Using the Separable Costs - Remaining Benefits method of cost
<br />allocation described iIi Chapter V of the May 1950 report of the
<br />Subcommittee on Benefits and'Costs, FIARBC, "Proposed Practices
<br />for ~conbmic Analysis of River Basin Projects", the allocation would
<br />be as shcwn in Example I.
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