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(i) Replacements at Federal espense of non-federal improvements.---Under certain conditions the United States as a part of a project constructs structures replacing non-Federally owned improvements such as railroad and highway bridges. The new structures normally will have a much longer useful life than the works they replace and as a result the owners of the existing improvements äre directly benefited. These benefits can best be expressed on an annual basis reflecting the reduction in annual charges to be borne by local interests. The first step in determining these benefits is to estimate the annual fixed charges for the old structures based upon their original first cost, with local financing at a 4.5 per cent interest rate, and on an assumed original useful life equal to that of the new structures. From these charges should be deducted annual fixed charges on the unámortized portion of the first cost of the old structures, refinanced on the basis of the assumed useful life of the new structures. The difference between the annual fixed charges on the old structures and the refinanced unamortized portion of their first cost represents an annual benefit that will accrue to local interests when the United States bears the expense of replacing existing structures owned by local interests. When the United States also bears the annual expense of maintenance and operation, local interests benefit to an added extent in being relieved of these charges on the existing structures. Under certain conditions these benefits may properly form a basis for requiring local contributions toward the first cost of a project.

283.18. Estimates of average annual benefits.-(a) Benefits that will result from the construction of flood control projects consist of direct flood damages prevented, indirect losses prevented, increases in values of lands resulting from flood protection, intangible benefits and collateral benefits in the case of multiple purpose projects. Where proposed improvements consist of additions or extensions of existing projects, only the benefits that will accrue additional to those now obtaining will be credited to the proposed new works.

(6) Average annual direct flood damages prevented.Estimates of average annual direct flood damages that will be prevented by a proposed improvement will take into account future developments and activities in the food plain that are reasonably to be anticipated if flood protection is not provided. Under no circumstances should benefits from developments or activities that can take place only after flood protection is provided be included as direct flood damages prevented.

(c) Average annual indirect losses prevented.--Indirect losses caused by floods may include losses resulting from the interruption of traffic and communications, the interruption to industry and commerce, the relief and care of flood victims and their rehabilitation, and the general disruption of activities in the region. These losses are difficult to eraluate and may vary widely in different localities. Each case must be analyzed separately on its own merits. Direct flood damages must not be used as a measure of indirect losses except in cases where such relations have been established for certain selected areas and are applied to other areas where comparable conditions exist. Normally indirect losses are small in rural areas as interruptions to activities generally are not of serious consequence. In urban and industrial sections, however, they may total a substantial amount. In this general connection it should be noted that losses resulting from interruptions to activities, including losses of wages and profits on industrial and commercial operations, may be largely offset by expenditures for reconstruction and replacement of properties damaged, which expenditures may be measured by the estimated direct flood damages.

(d) Increased land values resulting from flood protection.-Protection of areas against flooding in addition to preventing direct flood damages may in certain instances result in an increase in land values that properly may be credited

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to the proposed project. Lands: which have remained undeveloped due to the hazard of frequent flooás, when protected may be put to productive use and as a result their value will increase. Such an inerease in value properly. may be credited to & proposed project.. Likewise, lands now in prodụctive use, which as a result of being protected can be put to a higher use, will increase in value and it is proper to credit the increase in value to the project. - Çare must be exercised to insure that only the normal anticipated increase in the value of properties is credited to flood control. Improvements and developments made to the properties after they are protected, while they do constitute an increase in wealth of the particular locality and would not take place if the area were not protected, are not flood control benefits and will not be credited to flood control projects. There are cases also where the values of properties have been depressed following an unprecedented flood of great magnitude. Normally these values will be largely restored in the course of time. Individual losses of this type may occur where property is sold shortly after such a flood and it is possible that rentals on property subject to damage by floods of rare occurrence may be reduced temporarily. However, the assumption that property values will be depressed permanently and can be restored only by protection against floods must be ques: tioned, and where a proposed project is credited with benefits for restored property values such benefits should be fully substantiated. : In all cases where a project is credited with benefits for increase in property values care must be exercised to insure that such benefits do not constitute a duplication of direct flood losses prevented. The owner of a prcperty subject to flood damage will be relieved of the damage if the property is protected, thus the average annual net income from the property will be increased. The increase in the earning power of the property will have the rifect of increasing its sale value, but the owner cannot acquire the latter benefit until the property is sold, after which he will have the increased value of the property, but will no longer enjoy the increased earnings. In other words, the in reased property values resulting from flood protection usually are merely the reduction in average annual flood losses, capitalized.

(e) Intangible benefits.-Protection against floods normally provides benefits of an intangible nature which are not susceptible of direct evaluation but which are real and sometimes of commanding importance. Such; benefits may include the prevention of loss of human life, the general welfare and social security of the population, the improvement of sanitary conditions and protection against epidemics, and the values that reservoirs may have for recreational use and for wild life conservation. While no money value should be placed on these benefits, they may under certain conditions be of sufficient importance to justify a project which otherwise would not be warranted.

(f) Collateral benefits in multiple purpose projects.-Collateral benefits in projects constructed for flood control and other purposes may consist of benefits accruing from the development of hydroelectric power, the storage of water for domestic, industrial or irrigation use or for pollution abatement by dilution of sewage and industrial wastes and the regulation of stream flow in the interests of navigation. Such benefits are direct and should be carefully evaluated as they often are used as a basis for allocating the first cost of projects.

283.19. Justification of projects and allocation of costs.-(a) Each floodcontrol project must be analyzed on its own merits in the light of existing and reasonably prospective conditions. In general, estimates of average annual benefits should exceed annual charges by å reasonable amount to 'warrant making a favorable recommendation. However, there are eases where an improvement is desirable even though it cannot be fully justified from an economic standpoint,

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as for example where a hazard to life exists or where the welfare of a com. munity is involved.

(0) In allocating first costs of multiple purpose reservcirs as between flood control and o her beneficial uses of storage, consideration must be given both to storage capacities reserved exclusively for specified uses and to storage capacities used jointly for two or more purposes. In ilood control reservoirs where some additional storage can be provided advantageously to supply water for domestic, ináustrial, or irrigation use, or to abate pollution by dilution of sewage and industrial wastes, the beneficiaries of which can definitely be determined, it will be proper to require the local beneficiaries to contribute to the first cost of the reservoir the ad-led cost over the first cost of the reservoir constructed with the capacity required for flood control only. In similar cases where the benefits are widespread and it is impracticable to allocate benefits and added costs as between the beneficiaries, it may under proper conditions be considered in the public interest for the added storage for water supply use to be provided at State or Federal expense. În a reservoir constructed primarily for flood control but having a substantial part of the gross storage assigned for an exclusive use other than flood control, it will usually be proper to allocate first costs in proportion to the storage allocations. Likewise in a reservoir constructed in a primary interest other than flood control it will usually be considered proper where top storage is provided solely for flood control use for the United States to participate in the first cost of the project in proportion to the storage allocation, but the cost of providing the flood storage should not exceed the cost of providing equivalent effective storage at some other site, or at the same site developed for flood control only. Storage capacity provided for purposes other than flood control'máy be of some effect in reducing floods, but such effect is unreliable in that storage space may be full when a flood occurs. Since the effect of such storage is not positive and reliable, the same flood protective measures are required whether such storage is available or not. ' It will therefore normally be improper for flood control to be charged with any of the costs of providing storage solely for purposes other than flood control.' 'In the case of a reservoir where storage is to be used jointly for flood control and for other purposes, it is essential that the storage capacity required for flood control be available when needed. Such a conțition can exist

, only where floods always occur during a definite season of the year and where holding the required flood storage capacity empty during the flood season will not affect its availability for other purposes during the seasons when floods do not occur. Where it is practicable to use storage, jointly for flood control and for other purposes due to definitely established, hydrological conditions, the costs of providing such jointly used storage capacity normally should be allocated as between flood control and other uses in proportion to the respective benefits resulting from such use. For all multiple purpose reservoir projects, careful consideration must be given to special conditions obtaining in each instance and each project must be analyzed on its own particular merits,

(c) Each flood control project must be examined with the view to determining the extent of local cooperation, if any, that should be required. Reporting officers will accordingly make careful studies of proposed improvements and submit their recommendations thereon. In making such recommendations, the policy indicated by Section 2 of the Flood Control Act approved June 28, 1938, should be considered as a guide, but consideration should also be given to the general type of project and the nature of the benefits resulting therefrom. Where the benefits of proposed projects will accrue to other communities as well as to the immediate community, protection for which is the primary purpose of the improvements, assumption by the Federal Government of a large portion of the costs may be justifiable even though the project is not within the classes specified in Section 2 of the 1938 Act. On the other hand, a project may clearly come within the terms of that section, but still be of such a local nature that a substantial measure of local cooperation should be required. In all cases the estimates of costs and benefits will be in such complete detail as to permit the Board of Engineers for Rivers and Harbors, and the Chief of Engineers to determine the advisability of the apportionment of costs recommended by the reporting officers, or to make a reapportionment if deemed advisable.

283.20. Flood channel delineations. One of the basic elements in flood control improvements is the flood carrying capacity to be provided at critical points along streams. Either the peak discharge of floods against which protection is to be provided must be reduced to the capacity of the channels by reservoirs or other means, or the capacity of flood channels must be increased by excavation or by confinement between dikes or flood walls. In any event, it is essential that the flood channel capacity needed and pro ded in connection with an improvement be not encroached upon in the future as otherwise the effectiveness of the project may be nullified and the investments in flood control works jeopardized. Careful consideration will therefore be given to the question of encroachments on flood channels and reports recommending improvements should contain a full discussion of this subject. Where practicable, reports recommending improvements should be accompanied by suitable maps showing the flood channel lines at all critical points where encroachments within such lines would tend to nullify the effectiveness of the project. In cases where it appears possible that encroachments will take place, reporting officers should consider the advisability of requiring, as a condition of local cooperation an agreement on the part of a State or other appropriate local agency to protect the flood carrying capacity of the stream from future encroachments or obstructions,

283.21. Discussion. Under this heading flood conditions, plans of improvement and their effectiveness and costs and benefits shall be discussed. Where alternate plans have been considered their relative merits should be outlined and the one found most suitable should be described and the reasons for the selection given. The economic justification or lack of justification should be fully covered. The extent to which the proposed improvements meet the desires of local interests will be developed and discussed. In case a favorable recommendation is made it is essential, where local cooperation is required, that both the ability and the willingness of local interests to meet such requirements be ascertained as it is undesirable for projects to be adopted by Congress unless there is a reasonable probability that local cooperation will be forthcoming. This may be ascertained either through the issuance of a partially unfavorable notice where the extent of local participation constitutes a substantial part of the project, or by direct contact with officials and individuals who are sufficiently informed of public opinion to give reasonable assurances that the necessary cooperation will be forthcoming.

283.22. Conclusions.-State briefly the plan found most suitable and give reasons for or against the proposed project.

283.23. Recommendation. The recommendation, if favorable or partially so, should present à clear and accurate statement of the proposed improrement or modification of existing project with the estimated cost of new work, and the estimated cost or additional cost of annual maintenance. Conditions imposed, including those of local cooperation shall be carefully stated. State the amount which should be provided as an initial allotment and the manner in which addi. tional funds necessary to complete the project should be provided to secure the economical and adrantageous prosecution of the work. If the recommendation is unfavorable, it should be brought out definitely that the cost of providing flood protection would be in excess of any benefits that might reasonably be expected to accrue from the required construction.

283.24. Report of the Division Engineer.—The report of the Division Engineer will be in the form of an ipdorsement and when he concurs with the District Engineer a statement to this effect will ordinarily be sufficient. When large expenditures are recommended, however, it is desirable to have in addition a short concise statement by the Division Engineer of the character of the benefits and his opinion as to how they will compare with the annual costs for the improvement. A recommendation substantially different from that of the District Engineer should be accompanied by a statement which clearly shows the basis for the recommendation, and it should be prepared only after discussion of the differences with the District Engineer. Any misstatement of fact or miscalculation found in the District Engineer's report by the Division Engineer will be brought to the attention of the District Engineer for consideration and correction. The division report will then be confined to an expression of the views of the Division Engineer and his recommendation.


284. Provision of law.-(a) A report made in response to a committee resolution may not extend the scope of the project contemplated in the report being reviewed or in the provision of law authorizing the original examination or survey.

(6) Scope.-The scope of a review report will be governed by the context of the resolution and by the provision of law authorizing the original examination. It will be restricted to consideration of such specific improvements or other matters as are stated in the resolution. Subject to the foregoing restriction, the report may cover any improvement of a portion or all of the specified waterway or harbor, if the law authorizing the original examination specified no limits nor any particular improvement. On the other hand, if the original authorization specified the limits of improvement, or the extent and character of improvement, the report in review may not cover any portion of the waterway, harbor or watershed beyond the specified limits, or any other character of improvement, as for instance, channel improrement where breakwaters only were specified, or channel rectification where reservoirs only were specified. Similarly, if the original authorization specified certain channel dimensions, greater dimensions may not be recommended in a review report, and should not be covered therein.

(c) Preliminary and final reports.--A preliminary report will first be made when the report being reviewed is based on a preliminary examination only. When the report being reviewed is based upon a survey, a single and complete report will be submitted, including the data usually required for a report of survey if the necessary information is available or can be readily secured at nominal cost. Otherwise a preliminary report will be submitted,

(d) The provisions of paragraphs 279 to 283, inclusive, will apply to review reports, as applicable, with the following modifications relating to subject matter:

(1) Under the heading “Authority," quote the resolution verbatim and give the date of adoption.

(2) Immediately following the above heading state under an appropriate heading the nature of the report being reviewed, the recommendation or action of the Chief of Engineers and the action of Congress thereon. In appropriate cases this statement may be included under the heading "Existing project."

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