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<br />EXECUTIVE OFFICE OF THE PRESIDENT, <br />BUREAU OF THE BUDGET, <br />Wa8htngton, D.C., March ;., 19!JO. <br /> <br />The Honorable the SECRETARY OF THE INTERIOR. <br />My DEAR MR. SECRETARY: This will acknowledge your letter of <br />February 25, 1960, transmitting your report on a plan of develop- <br />ment for Ruedi Dam and Reservoir. <br />Your report proposes Ruedi Dam as It subst.itute for Aspen, which <br />was originally proposed as a feat.ure of the Fryingran-Arkansas <br />project. The Ruedi Dam is estimated to cost $12,831,000, of which <br />$7,600,000 would be allocated to t.he Fryingpan.Arka.nsas project and <br />$5,231,000 is considered cJmrgeable to western-slope uses. <br />It is noted that, although 'there are no specific costs required for <br />realization of the fish and wildlife benefits anticipated from the <br />project, $1,757,800 is allocated to fisll and wildlife. The Bureau of <br />the Budget considers that only additional project costs required for <br />realizat.ion of fish and wildlife benefits should be allocated to this <br />purpose. This is the method employed in the report for allocation <br />of costs to recreation, and it is beheved to be equally applicable to fish <br />and wildlife costs. <br />Your report proposes to allocate costs among project purposes based <br />on a 100-year period of aualysis. The Bureau of the Budp;et has long <br />considered that. proposed water resources development projects should <br />be evaluated wit.hin t.heir expected economic life, but not beyond 50 <br />years from the time project benefits become available. While the <br />physical life of many projects will ,mdoubtedly exceed 50 years, IlJ1 <br />assumption of economic life beyond no ye..'l.rs is highly speculative, <br />.,-. --p"rt.icularly if the rate of recent technological adv",nce is projected. <br />mto t.he future. In this case the use of "' 100-year period of aualysis <br />results in 11 significant reduction in reimbursable costs. <br />n would appear that. an appropriate adjustment in the cost alloca- <br />t.ion, using a 50-year period of aualysis and no allocation to fish and <br />wildlife, would produce an allocation to deferred storage for munici. <br />pal and industrial water of somewhat in excess of 30 percent of the <br />cost of t.he project. This would be incon"sistent with t.he terms of t.he <br />Water Supply Act of 1958, which limits to 30 percent. t.he allocat.ion <br />to deferred wat"r supply storage. It is believed t.hat t.his fact. should <br />be c..Hed to the attention of t.he Congr.Bs. <br />It. is llilClerstood that your report i9 t.he result of a reconna.issance <br />survey rather than a project investigation and that. t.he cost estimat.es <br />are. t.herefore. of a more J?reliminary character t.han is usual for re- <br />ports to t}le COl!~eSS whleh serYe as a. basis for project. au~horiza- <br />tion. It]S cons]<lered, there.fore, t.hat, m t.he event t.he Frymgpw- <br /> <br />v <br /> <br />4" <br />~ <br /> <br />. <br />" <br /> <br />",. <br />'Ji, <br /> <br />1037 <br /> <br />LETTER FROM THE BUREAU OF THE BUDGET <br />