Laserfiche WebLink
<br />5,0 ECONOMIC AND FINANCIAL EVALUATION <br /> <br />5.1 INTRODUCTION <br />The economic and financial evaluation was conducted to determine the cost <br />of firm yield and to identify project benefits other than water supply. Results <br />of these economic and financial evaluations provide a gauge to measure the Clear <br />Creek project's potential as a viable source of water supply. <br /> <br />These analyses show that additional Clear Creek water can be developed at <br />costs competitive with alternative water supply projects. The Clear Creek Project <br />may also provide other benefits to the region such as: recreation, improved water <br />quality, flood protection, and economic enhancement for the local communities. <br /> <br />5.2 DESCRIPTION OF ANALYSIS <br />Capital costs, investment costs, annual costs, and the unit costs of firm <br />yield were determined for the project. These cost estimates were conducted for <br />a broad range of project variables. These variables include: reservoir sizes <br />ranging from 110,000 af to 230,000 af, six highway relocations, the four highest <br />yielding water supply scenarios, and a sensitivity analysis of interest rates. <br /> <br />5.3 EVALUATION CRITERIA <br />The criteria and assumptions used for this analysis are described below. <br />The investment cost, or total reqUired investment to construct the project, is <br />addressed first and is followed by the annual cost of paying for this investment. <br />Project revenues are addressed following the discussion of project costs. <br /> <br />,- <br /> <br />5.3.1 ,Investment Costs <br />The investment cost is the total cost of constructing the project and <br />includes the costs of engineering, interest during construction, reserve funds, <br />and financing costs in addition to direct construction costs. Investment costs <br />are determined by beginning with the design engineer's estimate of "total direct <br />cost" of the project. The total direct cost is the sum of line items from the <br />cost estimate plus a 25 percent allowance for contingencies. Total direct cost <br />plus a 15 percent allowance for engineering and administration equals the "total <br />construction cost." Capital cost is the sum of the total construction cost plus <br /> <br />5-1 <br />