Why would algae form on the boulders of the waterfall if your salt water pool is in chemical balance?

The most important factor to inhibiting algae growth is the amount of free chlorine, not so much the other water balance factors (except temperature and pH). You could have alage on the boulders for the following reasons: 1) The amount of free chlorine in your pool is enough to inhibit growth of alage in your pool, but not in the different conditions on the boulder (see below). 2) The boulder and water flowing over it may be at a higher temperature, especially towards the bottom boulders, if they are exposed to the sun. Higher temperatures promote more algae growth that could outstrip the available free chlorine. 3) If the boulders are exposed to the sun, then this may be reducing the amount of available chlorine, especially if you do not use any conditioner (Cyanuric Acid). 4) The bubbling and aerating of water may convert much of the chlorine to gas via HOCl + Cl- --> Cl2(g) + OH- which is more likely in a salt pool due to the extra chloride ions from the salt to begin with. Do you notice a chlorine smell near the top boulders? 5) Areas near the edge of the water flow do not get enough continuous exposure to the pool water for the chlorine to kill the algae, but get enough water for algae to form. Also, if the water pools so that chlorine is released to the air faster than the pool is refilled with new water, this could promote algae growth. This is similar to poor circulation in a pool. As for what to do, the easiest thing is to treat your boulders with an extra "shock" of 5-10 ppm chlorine (which could be done when you shock your pool with liquid chlorine). Do NOT shock your pool with just the chlorine generator as this will not build up enough chlorine fast enough to kill some more aggressive algaes. Use liquid chlorine to shock your pool, or at least your boulders.