Supplies... Maintenance-project pumps--. shown in the April 1958 Mid-State project report. The estimate includes funds for management of the reclamation district. The revised estimates of annual operation, maintenance, and replacement costs are summarized as follows: Item Operation and maintenance: Personnel___ Social security and workmen's compensation, 5.1 percent.. Equipment_ Administrative and general expense.. Annual amount $239, 300 12, 200 98,700 55, 000 Operation and maintenance-Prairie Creek hydroelectric plant--Operation and maintenance-Electric transmission and distribution system--- 43, 600 31,000 67, 800 42, 400 863, 100 Fish and wildlife Recreation___ Grand total, operation, maintenance, and replacement------ Irrigation benefits ECONOMIC JUSTIFICATION As a part of the technical assistance provided to the Mid-State Reclamation District, the Bureau of Reclamation made a determination of irrigation benefits for use in the April 1958 Mid-State report. Time limitations prevented the development of farm budgets specifically for the Mid-State area; consequently, the benefit determination was made by projecting preliminary data from the North Loop division investigations to the Mid-State project lands. Since that determination was made, benefit procedures have been revised. Further study also has been given to the potential private pumping lifts under future conditions with and without the Mid-State project. The results of this study modify the private pumping costs which would be avoided by conversion to project service for the 96,000 acres of privately irrigated land expected to shift to Mid-State project irrigation service. The April 1958 Mid-State report cites an intangible benefit from the saving of increased pumping costs for remaining private well irrigation resulting through ground-water recharge from the project's surface supply as contrasted with a progressively lowering ground-water level without the project. This benefit is tangible and measurable through economic analysis of private pumping costs with a progressively lowering ground-water level without the project versus a stabilized level with the project. Such an analysis has been made and the estimated savings in pumping costs have been added as a tangible benefit of the project. According to the Mid-State report, over 250,000 acres of land are presently irrigated from private wells. A study of the basic data from which this estimate was derived shows the total to be 259,000 acres. It has been estimated that 96,000 acres of these presently irrigated lands would shift to water service from the Mid-State project as part of the 140,000-acre service area. This leaves 163,000 acres within the reclamation district that would remain under private irrigation and would benefit from the stabilized ground-water level under future conditions with the project. Net annual irrigation benefits as revised to reflect these changes and adjusted for a 5-year development period total $3,109,000 for a 100-year analysis and $3,040,000 for a 50-year analysis as summarized on the next page. They are based on agricultural price indexes of 250 for prices received and 265 for prices paid (1910-14=100). The irrigation benefits are segregated for three cate gories: First, for the 44,000 acres of new lands; second, for the 96,000 acres of presently irrigated lands which are expected to shift to project service; and third, for the 163,000 acres of presently irrigated district lands which are expected to remain under private pumping. The average of $12.17 per acre irrigation benefit for the 96,000 acres represents the estimated private farm pumping cost that would be eliminated when these lands shift to project service under future conditions with the project. The $5.05 per acre irrigation benefit for the 163,000 acres represents the estimated average saving in pumping costs. The estimated average annual pumping cost for these lands under a progressively lowering ground-water level without the project is $12.20 per acre and it is $7.15 per acre under a stabilized ground-water level with the project, or a saving of $5.05 per acre. Annual benefits for the 44,000 acres of new lands total $37.48 an acre, of which $21.30 is direct and $16.18 is indirect and public. Annual benefits from other project purposes, as determined by the respective cooperating Federal agencies, remain unchanged from the April 1958 Mid-State report: Interest during construction is computed at 2.5 percent from the beginning of the expenditures for construction to the time when individual features or groups of related features are completed and entered into plant in service. Future investigations costs are included in this computation; however, past Bureau of Reclamation investigation costs of $139,700 and past costs of the reclamation district are excluded. Total interest during construction for the period of preconstruction investigations and scheduled construction of project features amounts to $3,996,000. The interest computation follows: Analysis of economic justification of the Mid-State project results in benefitcost ratios ranging from 1.40 considering total benefits and a 100-year period to 1.06 considering direct benefits only for a 50-year period. In this analysis the sum of $1,149,000 for future commercial power is retained as a part of total project costs. No salvage value is claimed on project works that theoretically might remain at the end of either the 50- or 100-year periods of analysis. The minimum economic life of major project works is 100 years as ample sediment capacity and other design aspects are incorporated in plans to meet this objective. A summary of the benefit-cost analysis follows: Cost allocation FEASIBILITY ANALYSIS Project costs, interest during construction, and operation, maintenance, and replacement for the Mid-State project have been allocated concurrently by the separable costs-remaining benefits method. The estimated project cost is $81,467,000. Interest during construction amounts to $3,996,000 and total annual operation, maintenance, and replacement costs $863,100. Separable and remaining joint costs are as follows: The table on the next page shows the allocation of costs for a 100-year period of analysis. Costs of alternative single-purpose projects to obtain the same benefits have not been estimated for flood control and fish and wildlife; rather, the capitalized benefits are considered a measure of the justifiable expenditures. The Corps of Engineers and the Fish and Wildlife Service both advise that the cost of a single-purpose project to produce the same benefits would exceed the capitalized benefits. Irrigation, flood control, and fish and wildlife share in carrying remaining joint costs of the project. The allocation to recreation is limited to the specific or separable capital and operation, maintenance, and replacement costs of hasic recreation facilities. The allocation to deferred commercial power is limited to separable costs of making such provision. The specific costs of the Prairie Creek Powerplant are treated as separable irrigation costs and are allocated to that purpose. As indicated in the Mid-State project report of April 1958, the annual generation of the Prairie Creek plant would ultimately be used almost exclusively to supply electric energy for districtoperated irrigation pumps. The total allocation to each purpose consisting of project costs, interest during construction, and operation, maintenance and replacement costs is within limits supported by annual benefits as tabulated on the previous page. Adjustment of allocations for repayment The reclamation district proposes to operate and maintain all project works except specific features for fish and wildlife and recreation which would be administered and financed by an appropriate State agency. Since the total allocated flood control and the joint use portion of the fish and wildlife operation, maintenance, and replacement costs ordinarily are Federal responsibilities, it is necessary to offset these operations, maintenance, and replacement costs by a downward adjustment in the project cost allocated to irrigation and upward adjustments in costs allocated to flood control and fish and wildlife. This will avoid the necessity for annual Federal operation, maintenance, and replacement appropriations. As the basis for this adjustment, the annual total operation, maintenance, and replacement of flood control and joint operation, maintenance, and replacement of fish and wildlife, amounting to $81,300 and $7,100, respectively, are capitalized without interest for the irrigation repayment period of 40 years. The resulting sums are then deducted from project cost allocated to |