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x LETTERS OF SUBMITTAL $1,551,000 based on 1940 prices, and the average annual benefits and costs are estimated as follows: __ Irrigation benefits from increase in gross crop returns based on average prewar prices__ - - - - - - __ _ _ _ _ _ _h _ _ _ _ _ __ _ _ _ h _ _ _ _ _ _ __c~ _ _ h _ _ _ _ $179, 820 Flood control at Spring Creek Reservoirn____________h___________ 1,240 Total benefits____________________________________________ 181,060 Average annual cost. - - -- - - __ - - _ - _ _ _ _ _ _ __ __ _ ___ __ _ h _ __ _ h _ __ _ _ _ - 68, 208 Ratio of benefits to costs________________"_______________________ 2.6:1.0 It is the opinion of this Department that Hood damage in the North Fork Valley will not be eliminated by the construction of the Spring Creek ;Reservoir as only about 20 percent of the run-off in that stream originates above the dam. Channel improvements may be needed in addition to the reservoir but no detailed investigation with respect to such improvements have been made by this Department. Although part of the cost of the project is allocated to Hood control, no part of the storage capacity of the Spring Creek Reservoir is specifically allocated for flood control. The report points out that the damage is largely the result of bank cutting and eroding away of valuable farm land and the washing out of roads, railroads, bridges, and irrigation works. The high flows result from the rapid melting of accumulated snows on the watershed and usually occur between May 1 and June 15. The report states that studies of flood flows and damages show that an average yearly saving in flood damages of $1,240 will be accomplished by the operation of the Spring Creek Reservoir to obtain the maximum reduction iu peak flows. The expenditure allocated to flood control is derived by capitalizing this . amount, using an interest rate of 3 percent and by eliminating main- tenance and operation charges from the cJ.culations on the following assumptions: (1) That the proportionate maintenance attributable to . flood control can be neglected because of the relatively small flood control allocation, and (2) that the operation for flood control would not require appreciable additional expenditure over operation for water conservation. . In order to comply with the provisions of section 7 of the 1944 Flood Control Act and to assure the flood-control benefits claimed in support of the cost allocated to flood control as given in the recom- mendations for project authorization, the reservoir operation in the interest of flood control should be on a more substantial basis. It is . the opinion of this Department that such benefits cannot be assured without a definite allocation of storage capacity to flood controL-- With a definite reservation of flood-control storage, either on a per- manent or seasonal basis, and operation of such storage in accordance with regulations prescribed by the Secretary of War as provided for in section 7 of the Flood Control Act of 1944, it would be appropriate to allocate. to flood control part of the cost. of construction .of the project. In the absence of a definite reservation of storage for :t;lood control in this case, the War Department cannot concur in the pro- posed allocation of a capital expenditure of $32,000 to flood control. Inasmuch as the amount of allocation to flood control involved in this case is small and relatively unimportant with respect to the repay- ment aspects of the project, it is not considered essential that any Hood-control allocation be proposed by the War Department for thiS project. It is proposed, however, that the principles involved in J I it " I , I , j i