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V 11-2 In order to realize what future costs represent today or what annual costs may be realized in t~e future, a 7% interest rate has been used which is sufficiently representative of various municipal bond interest rates. The costs have b~en annualized on a 40-year basis which is a realistic compromise between structural and other improvement lives. The effects of inflation have uniformly not been considered in annual damage costs, operation and maintenarlce charges~ and intangible bene- fits. The inflation rate is and has been quite unpredictable, and with the comparative effect to increase benefit cost ratios, it would not serve a good purpose other than "mphasizing present need for the improvements. For example, the present 'North of the probable annual damages could increase from 10 mi II ion dollars by 3 to 6 mi 11 ion dol- lars depending on the inflation rate. UN IT COSTS Major drainage channels are often costly in an urban area because of right-of-way, bridges and culverts, special structures, and in some places, retaining walls where the channel must be designed narrow. Many of these costs can be attributable to other urban systems such as streets and traffic, recreation and open space, and land development. The cost estimate brings all costs together in the total figure; however, the financing strategy should differentiate between the incremental costs when developing funding sources. Because each alternative has different lengths, it is not possible to make a comparison on a cost per mile basis. Total cost of construction and land acquisition for each alternative was obtained and reduced to an annual cost. The life of most sti"uctures associated ~Jith drainage works is estimated to be forty years; therefore, initial costs were amortized Over a 40-year period usin'l a 7% interest rate. Construction costs were estimated usIng the unit pric'25 listed in Table VII-I. in- cluded in these construction costs are prices for the appropriate recrea- tional facilities such as bike paths. The costs of land were determined by entity input as to the reasonable market value of developed and undeveloped lands. The cost of land listed in Table VII-l is given for land that can be acqui red wi thout structures, such as portions of backyards. This figure considers the fact that, al- though portions of property wi 11 be lost by the owner, benefits in the form of protection from future damages will more than offset any individu- ally perceived losses. Acquisition of properties with structures would be In accordance with the figures in Table IV-] for typical structural values.