Orestimba Creek Feasibility Study - Stanislaus County

Economics Appendix – Draft Report - Orestimba Creek Feasibility Study, Stanislaus County, California – September 2012
7.0 Benefit-Cost Analysis
7.1 Annual Costs
With benefits calculations complete, annual costs need to be derived to complete the benefit cost
analysis. Economic feasibility and project efficiency are determined through benefit cost
analysis. For a project or increment to be feasible, benefits must exceed costs and the most
efficient alternative is the one that maximizes net benefits (annual benefits minus annual costs).
For the benefit-cost analysis, these project costs need to be described in terms of annual costs.
The project costs were amortized over the 50-year period of analysis using the current federal
discount rate of 4%. Interest during construction was based on a 2 year construction schedule
from 2015 to 2017 assuming uniform expenditure over the construction period. Detailed and
itemized costs for the alternatives can be found in the Cost Appendix. Operation, Maintenance,
Rehabilitation, Remediation and Repair (OMRR&R) were added for the total annual costs for
each alternative.
7.2 Net Benefits
7.2.1 The NED Plan
With the Channel Modifications increment dropping from the Federal Interest, the optimized
Chevron Levee becomes the NED Plan. This levee would be about 4-5 feet tall, depending on
ground elevation changes along the levee alignment.
7.2.2 The Tentatively Recommended Plan
The only difference between the Tentatively Recommended Plan and the NED Plan is the height
of the chevron levee. The height of the chevron levee for the local plan must meet State of
California requirements (per Senate Bill 5) of being at least 3 feet above the with-project mean
0.5% (1/200) WSEL. This levee would be about 6-7 feet tall or approximately 2 feet taller than
the federal interest levee.
7.2.3 Benefits and Costs
A more rigorous and detailed MCACES cost estimate was performed for the NED Chevron
Levee and the LPP (Alternatives 2 and 3 respectively). Benefits and costs for these alternatives
are provided in Table 7-1 below.
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