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IV -I SECTION IV BENEFIT-COST ANALYSES Two basic approaches were required for a cost benefit analysis in the South Boulder Creek Basin. One approach was necessary for the developed areas where physical improvements were proposed and an- other approach was necessary for undeveloped areas. There are many items that can be taken into consideration in the calculation of benefits. These include direct and indirect benefits. Direct benefits are the reduction of flood damage los ses measured by cost of area restoration to preflood conditions. Also included as a benefit is the increased value of lands in the flood plain which are to be pro- tected from the 100-year return interval flood. Indirect benefits are the reduction of economic losses due to interruption of commerce traffic, communication and other activities and the cost of activity made necessary by the flood such as flood fighting measures and the relief of flood victims. Indirect losses for localized flooding are recognized as a cost, but because they are difficult to quantify in localized flooding such as would occur, they are not considered in this study. For the developed areas, the cost-benefit analysis used the tra- ditional method involving the direct costs of the drainage improvements and the required engineering and administrative costs associated with their implementation. The benefit accrued is the reduction in flood damages. In quantifying the direct losses, it was found by the Corps of En- gineers, Dr. Gilbert White and others that the flood losses are generally proportional to the depth of the flood waters, as shown on Figure 12. Therefore, once the value of a structure and contents is known and the depth of flooding determined, the amount of damage to the structure can be estimated. These damage costs can then be put on a value per acre basis in order to determine losses over different portions of the flood plain. This can be done by classifying the different subdivisions in terms of their value and density as proposed by L. Douglas James,(2) and evaluating the terms of the following equation: CD = ~KD MS h A (2) L. Douglas James, "Role of Economics in Flood Plain Land Use", Journal of the Hydraulics Division, ASCE Vol. 98, No. HY6, June, 1969, pp. 981 - 982.