Railtrail Cost and Benefit Analysis

LA/UP341 Fall 1997

Cost and Benefit Breakdown The Bottom Line
Initial Costs           $245,880
Initial Benefits        $56,000
Annual Costs         $12,635
Annual Benefits      $190,181

Assumptions

We assumed that we own the land either through donation, purchase, or railbanking. Railbanking deals with a railroad company leasing land for a trail as long as they retain the option to convert the land back to railroad when and if needed. Acquisition is not considered in the analysis.
Removal of the rails and ties will be done and will provide a salvage benefit that will help to offset some of the startup costs.
Flat bed trucks are needed to take away the large sections of rail after they have been lifted onto them using the crane.
The project will take a total of 12 working days.
In the first part of our project our man power estimate assumes 30 people per day, 10 of them volunteers. They will earn $10/hr. In the second phase, they will earn $7/hr., with 15 volunteers. They work eight hour days, with the project taking 12 days to complete.
Miscellaneous equipment includes shovel, picks, pry bars, cutting equipment, etc.
The project uses 10,256 tons of gravel to pave the trail at $143 per truckload.
Trail maintenance includes regrading, repacking, repairs to erosion damage, and repairs to trail shoulders.
General maintenance includes trash cleanup, weed and grass trimming, and signage repairs.
Annual benefits are adjusted by taking the 6.25% sales tax, giving us the amount of money that is put into the local economy, and using 2 as an income multiplier, accounting for money that gets put back into the economy by local workers.

Initial Costs
	Removing rails	Cost per unit		# of units		Total
	3 flat bed trucks	$1,000	per day	8	days	$8,000
	crane	$1,500	per day	8	days	$12,000
	people (30)	$1,600	per day	8	days	$12,800
	misc. equipment	$300	per day	8	days	$2,400
	Trail construction
	dump trucks and gravel	$20	per ton	10256	tons	$205,120
	people (30)	$840	per day	4	days	$3,360
	misc. equipment	$300	per day	4	days	$1,200
	signage	$1,000				$1,000
						$245,880
Initial Benefits		Benefit per unit		# of units
	Rail and Tie Salvage	$8,000	per mile	7	miles	$56,000

Annual Costs		Cost per unit		# of units		Total
	Trail Maintenance	$375	per mile	7	miles	$2625
	General Maintenance	$1,430	per mile	7	miles	$10,010
						$12,635
Annual Benefits		Benefit per unit		# of units
	Regional Commercial Benefits
	Restaurant	$5.21	per person per trip	135000	trips	$703,350
	Gas	$2.14	per person per trip	135000	trips	$288,900
	Lodging	$2.56	per person per trip	135000	trips	$345,600
	Retail	$1.36	per person per trip	135000	trips	$183,600
						$1,521,450
				Adjusted for 6.25% Sales Tax and Income Multiplier (2)		$190,181
Project Summary
	Initial Costs	$245,880
	Initial Benefits	$56,000
	Annual Costs	$12,635
	Annual Benefits	$190,181

Last Update: 11/19/97
-Trail impact data obtained from National Park Service Study & Railtrails.org
-Trail Maintenance data obtained from Wisconsin Department of Natural Resources Bureau of Parks and Recreation

Cost and Benefit Breakdown Project Discounting Project Comparison

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