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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />SECTION VII <br />PHASE A BENEFIT/COST ANALYSIS <br /> <br />The benefit cost analysis for the recommended alternative for Phase A <br />addendum is presented in Table VI 1-3. <br /> <br />GENERAL <br /> <br />The alternatives selected to be investigated under the benefit/cost analysis <br />were designated by the Urban Drainage and Flood Control District and the <br />City of lakewood. <br /> <br />The benefit cost ratio for the Phase A Addendum Recommended Alternate is <br />1.35. Modifications to this Recommended Alternate were requested by The <br />City of lakewoodand are incorporated into the Phase B Preliminary Plan. <br /> <br />Costs associated with capital construction, right-of-way and property acquisi- <br /> <br /> <br />tion, and operation and maintenance have been developed for each alternative <br /> <br /> <br />selected for consideration. These costs were derived from the unit prices <br /> <br /> <br />presented in Tables VII-l and VII-2. The costs have been updated for Phase B <br /> <br /> <br />preliminary planning and are presented in TablesV-l and V-2. <br /> <br />The relative economic merit of each alternative has been determined by the <br /> <br /> <br />benefit/cost analysis. The important consideration in this analysis is that <br /> <br /> <br />all evaluations be mutually consistent. In each alternative, the same cri- <br /> <br /> <br />teria for estimating costs and economic factors were used. The continuity in <br /> <br /> <br />calculation methods results in a realistic comparison between each alternative. <br /> <br /> <br />The comparison is in the form of beneift to cost ratios, present worth of <br /> <br /> <br />net benefits, and total annual costs (Refs. 12, 13, 14). The figures <br /> <br /> <br />calculated may not be the actual dollars to be paid, but this analysis indicates <br /> <br /> <br />the best comparative alternative and its approximate cost range. Only a <br /> <br /> <br />final engineering design plan would provide the detailed costs and financing <br /> <br /> <br />strategy. <br /> <br />To realize what future costs represent today or what annual costs may be <br /> <br /> <br />realized in the future, a 6-3/8 percent interest rate for Phase A had <br /> <br />been used. The costs have been annualized over a 50-year period which is <br /> <br /> <br />based on structural and other improvement lives. The effects of inflation <br /> <br /> <br />have uniformly not been considered in the development of the benefit/cost <br /> <br /> <br />analysis. The inflation rate is and has been quite unpredictable, and with <br /> <br />the comparative effect of increasing benefit/cost ratios, it would not serve <br /> <br /> <br />a purpose other than emphasizing the present need for the improvements. <br /> <br />VII-l <br />