FLOOD10385

• County: Jefferson
• Community: Golden, Lakewood
• Stream Name: Upper Lena Gulch
• Basin: South Platte
• Title: Major Drainageway Planning - Upper Lena Gulch - Phase B Report
• Date: 3/1/1994
• Prepared For: UDFCD
• Prepared By: Boyle Engineering Corporation
• Floodplain - Doc Type: Floodplain Report/Masterplan

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in selection of an alternative which has a benefit-

These intangible criteria may result

may influence the decision.
cost ratio of less than I

justified solely on an economic basis. In most cases, other subjective criteria must also be considered in the
selection of a preferred alternative plan. The economic evaluation, however, is a major component in the ultimate
selection of master plan facilities.

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After careful review of the results of the benefit-cost analysis performed during Phase A of the study, a single
alternative in each reach was selected for inclusion in a recommended best alternative plan. A complete description
of each of the alternatives evaluated during Phase A may be found in the Phase A Report.

Facilities are sized to meet the stated objective. For example, a IO-year culvert will be sized to convey IO-year
discharges without roadway overtopping. Other options such as property acquisition are not dependent on
discharge or recurrence interval and are not designed in the traditional sense. These measures are identified so that
alternative costs can be assigned and damage reductions estimated.

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The next step in the benefit-cost analysis is to develop cost estimates for the various alternative elements
Construction costs for facilities are based on general estimates of construction quantities and unit costs. Structure
acquisition costs are based on the estimated value of each individual structure, Operation and maintenance costs
are also estimated for both the existing floodplain and any new facilities proposed as part of the alternative.

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Residual damage estimates are a key component in the quantification of the benefit-cost. Once facilities are in
place, an estimate is made of the residual flood damages for each recurrence interval. This damage estimate is
converted into an average annual damage estimate in a manner similar to that used to establish baseline average
annual damages. The difference between the baseline average annual damage and the residual average annual
damage is the benefit derived from the implementation of the specific flood control alternative being evaluated.

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In order to develop the benefit-cost ratio, the average annual benefit must be converted into a present worth. That
is, the annualized benefits associated with the particular flood control alternative must be converted into a lump
sum benefit in today's dollars. This conversion is very sensitive to the interest rate used, For this study, an
inflation rate of 3% and a municipal bond interest rate of 7.5% were assumed based on discussions with local
financial experts. The cost of money, and therefore the interest rate used in converting annual cost to present
worth, is the difference between these two interest rates. Thus, this study used an interest rate of 4.5% to convert
annual benefits to present worth benefits. This interest rate was distributed over the life of the project. In this case,
the assumed life was 50-years

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The computation of the benefit-cost ratio is the division of total benefits by total costs. A benefit-cost ratio in
excess of one indicates that the flood control facilities expenditures are lower than the benefits derived from those
expenditures

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Because of the subjectivity involved with assigning value to such damages as loss of life, inconvenience, and stress
related to flooding, no attempt was made to quantify the benefits associated with reduction of these damages.
However, subjective consideration should be given to these and other intangible benefits which may be gained
through implementation of alternative improvement plans

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Table 8 shows a summary of the benefit-cost ratios for the alternatives evaluated in each reach during the Phase A
portion of the study. The complete benefit-cost analysis may be found in "Upper Lena Gulch Phase A Report'

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made

making process
a city's drainage criteria

The benefit-cost analysis gives a means by which quantitative comparisons of the various alternatives can be
However, the benefit-cost ratio is not the only criteria for alternative selection, Intangible benefits such as
elimination of loss of life or inconvenience, or public perception must be factorcd into the decision
In addition, other considerations such as providing a minimum storn1 scwer system to mcet

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