R2 SUPPLEMENT 1900-96-1
EFFECTIVE 4/20/96
1970
Page 1 of 2
FOREST SERVICE MANUAL
DENVER, CO
TITLE 1900 - PLANNING
Supplement No. 1900-96-1
Effective April 20, 1996
POSTING NOTICE. Supplements are numbered consecutively by Title and calendar year. Post
by document name. This supplement replaces all Region 2 text except Interim Directives (ID).
Retain this transmittal as the first page of this document. The last supplement to this Title was
Supplement 1900-92-3 to 1920.
This supplement supersedes Supplement No. 8 and 12 to FSM 1970.
Document Name
Superseded
(Number of Pages)
1970.3 thru 1970.6
Document Name
2
New
(Number of Pages)
1970
2
Digest:
1970.3 - Updates regional policy to be consistent with parent text.
1970.6 - Updates direction on economic and financial analyses to account for inflation, and
streamlines analysis requirement to achieve a better match with project level decision making.
ELIZABETH ESTILL
Regional Forester
R2 SUPPLEMENT 1900-96-1
EFFECTIVE 4/20/96
1970
Page 2 of 2
TITLE 1900 - PLANNING
R2 SUPPLEMENT 1900-96-1
EFFECTIVE 4/20/96
CHAPTER 1970 - ECONOMIC AND SOCIAL ANALYSIS
1970.3 - Policy. Use financial information and analyses together with economic, social,
environmental, and management factors, in determining the effects of proposed actions and all
alternatives considered. Achieve land management objectives established in Forest Plans in the
most efficient manner practicable.
3. Consider financial-efficiency along with cost-efficiency information in making decisions
and in implementing and reviewing programs, projects, and budgets. Narrow the gap between
costs and revenues in concert with other management objectives. For the purposes of this policy,
financial-efficiency is the relationship between agency revenues and costs; this is distinguished
from cost-efficiency which is the relationship between economic benefits and costs given stated
objectives. (See FSM 1905, item 17).
1970.6 - Scope of Analyses. Line officers shall ensure that both economic and financial analyses
are conducted for projects as outlined in 1970.61, or as necessary to provide meaningful
information to facilitate decision-making.
1970.61 - Types of measures Analyses Provide.
1. Conduct an economic benefit-cost (cost efficiency) analysis and a financial revenue-cost
(financial efficiency) analysis on all resource projects for which:
a. An EA or EIS is prepared, or
b. Total cost over the life of the project is expected to equal or exceed $50,000.
For projects where no market benefit values are expected, a least-cost analysis may be conducted
in lieu of a benefit-cost analysis to meet the economic efficiency requirement; a financial
revenue-cost analysis is still required.
2. Conduct a least-cost (cost effectiveness) analysis on:
a. Resource projects for which total cost over the life of the project is expected to be
less than $50,000.
b. All Fire, Administrative, and Other (FAO) projects.
If demonstrated and documented that a least-cost analysis will cost more than the difference
between the lowest and highest cost alternatives considered, the least-cost analysis requirement is
waived.
Express both economic benefit-cost and financial revenue-cost analysis results as present net
value (benefits minus costs; revenues minus costs) and ratios (benefit/cost; revenue/cost).