alternatives is not essential with a private development, but serves a very useful purpose in a 

 public project. Concerned citizens will often point out what they think are errors in 

 planning if only a single concept is presented. Alternatives wiU not only prevent criticism, 

 but will give the general public a sense of confidence in what its officials are doing. If by 

 chance a better plan was overlooked in the preliminary studies, the presentation of 

 alternatives may stimulate general thinking to the point that someone will submit this better 

 plan before project planning has reached the stage where a change would be costly. 



i. Cost Estimate. The initial construction cost estimate must be prepared in sufficient 

 detail to ensure that no major item is overlooked and that the total is adequate to cover the 

 actual cost. The time required for construction of each major component should be 

 estimated for any large project, and a rough construction-phasing scheme prepared showing 

 how much funding will be needed at any given time. Because of a time lapse before actual 

 construction begins and a possible change in plans, this preliminary estimate is usually based 

 on major-item quantity estimates— square feet of piers, docks, buildings, and parking lots; 

 lineal feet of perimeter walls, streets, and walks; cubic yards of excavations, fUls, and 

 dredging; lengths of pipelines or conduit runs for utilities, water supply and sewers; and 

 various other shortcuts for estimating additional items of lighting, landscaping, and 

 sign-posting. Since this method may fail to include certain minor items that will be 

 necessary later, and conditions at the site may result in higher costs than elsewhere, a 

 contingency item of 10 to 20 percent should be added to ensure that the total is adequate 

 for budgeting purposes. Preparation data for the estimate must be given so that any 

 escalation in the construction-cost index for the region can be taken into account if the 

 project is delayed for any length of time. 



j. Method of Financing. A major indirect cost is the interest that must be paid on the 

 capital required to fund any project. The best method of financing must be made in the 

 feasibUity study to determine the approximate amount of the carrying charges on the 

 investment. If the project is to be funded with capital already on hand, a determination 

 must be made of the returns which that capital would bring if invested elsewhere, and these 

 potential returns must be charged against the project. If funds are not readily available, 

 several possible sources should be investigated. Private developers can often obtain financing 

 through a major marina construction firm by agreeing to use that firm's system to the 

 exclusion of all others. Public agencies, however, are required to obtain competitive bids for 

 any project construction and must have an estabhshed source of funding before such bids 

 can be soUcited. The usual sources of construction funds are loans from government 

 agencies and bond sales. 



Although the Federal Government does not loan funds for local agency construction 

 projects, some of tlie grant programs discussed previously for the Federal and State 

 Governments may reduce the financing load of the local public agency. If the project can 

 qualify for a State loan, this source will usually carry a lower interest rate than bonds or 

 institutional loans. General obligation bonds, guaranteed by the taxing power of the local 



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