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E. Feasibility Construction Feasibilitv: As noted under the discussion regarding alternative evaluation, the two selected construction methods proposed for bidding are the most feasible and economic approaches. On-site material will be utilized as milch as possibl,~ to mitigate the difficult access to the site, which requires helicopter transport of construction materials. Site visits were conducted as discussed above to ensure the feasibility of the proposed project. The no-action alternative is not considered feasible due to the safety risk and financial loss in the event of failure of the existing diversion wall. Benefit/Cost Analvsis: I. Damage Estimates: Mussetter Engineering prepared a dmnage estimate as part of the COE design project (see appendix: Skyrocket Creek Debris Flow Analysis). Costs for repair to public facilities were considered under several failure scenarios. Estimated damages for the 100-year debris flow ranged from $435,795 to $716,095. The average of $575,945 was used for the annual cost estimate. Damages did not include damages to the highway and adjacent utilites. 2. Indirect Losses: Additional indirect losses will result from closure of the pools. The monthly revenue generated from the Ouray City Hot Pools during July, August and September averaged approximately $98,600 in 1999 and has increased every year since 1996. It is also anticipated that closure of the pools will have a direct impact on tourist visits and sales tax income will be impacted. Monthly sales tax revenue for th<~se same months averaged $69,363 for 1999 and also shows an annual inc~rease. For the 100-year event we will assume pool closure of I month and 50-percent loss in sales tax revenue for the same month, although the true impact of a sev(:re event and resultant pool c:losure could extend well beyond one month. Indirect costs due to pool closure and loss in sales tax is estimated at $133,300. 3. Annualized benefits: Total losses due to damage repair ~md indirect losses of revenue and sales tax is estimated at $709,245 for the I OO-year event. Assuming no damage due to a 2-year event and using a standard forecast evaluation of cost of damages for events between the 2 and 1 DO-year debris flow, average annual damages for the failure were calculated by plotting estimated damages against probability (see figure 3). The area beneath the curve on this plot is the average annual benefits (avoided costs) and is estimated at $32,000 based on this methodology. This assumes damage costs for events over the 100-year occurrence are the same as for the I OO..year event. This does not account for interest that will be paid by the City if money is borrowed to make repairs. 4 Annualized Cost of Project: Annualized costs are based on a construction loan of $90,000 to be paid back over 3D-years with mmual interest rate of 5%. Total costs for the loan with interest and principal are estimated at $175,000. It is anticipated that this 9