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<br />f <br /> <br />VII. PROJECT EVALUATION <br /> <br />A. <br /> <br />General <br /> <br />-', <br />, I <br />I <br /> <br />The design of this project involves several choices <br />among physically feasible alternatives. In general, <br />the choice of type of dam and size of project should be <br />made on economic grounds. Each alternative should be <br />expressed in money units before the choice is made. <br /> <br />, :! <br /> <br />At present the Meyring and Arapahoe Livestock Companies <br />are the only parties involved in considering benefits and <br />costs of this project. The companies must ask; why build <br />this project at all;' why build it now; why build it this <br />way; will it payoff? In answering these questions, sever- <br />al things should be considered. Primary among these is <br />probably the cost of money. Currently the cost of money <br />to private enterprise is 19-20%, If a ditch company or <br />conservancy district were to be formed, tax free money <br />could be obtained for 11-12%. If Colorado State funds <br />were to be made available through the Colorado Water <br />Conservation Board, the service rate would be 5%. <br /> <br />,..'.. <br />, ; <br />~:;;.1 <br /> <br />The question of interest rates should, however, be <br />balanced with construction timing. If the livestock com- <br />panies were to design and build the project, it could <br />probably be constructed in the summer of 1983. If a <br />district were formed in order to secure tax free interest <br />rates it is doubtful if the project could be built in 1984. <br /> <br />Other factors to be considered are the storage decrees <br />and the North Platte River adjudication. The companies <br />do have a conditional storage decree upon which quadren- <br />nial findings of due diligence have been approved, and <br />they have also filed additional conditional storage de- <br />crees at this site. It is the general opinion of the <br />District Engineer that, despite the storage limitations <br />imposed by the North Platte River decree on the North <br />Park drainage, nine years out of ten the Hyannis Peak <br />Reservoir would not be restricted by this decree. <br /> <br />The economic analysis which follows is based on the <br />concept of present value. The present value of a dollar <br />in the future is determined by the appropriate discount <br />rate and the time span in years. In this case it is <br />simply the present value of an expected stream of annual <br />benefits compared to the total anticipated cost of the <br />proj ect. <br /> <br />:] <br />~':S <br /> <br />;'.j <br /> <br />-38- <br />