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<br />that repayment of amounts in excess of the $156.8 million will be covered by <br /> <br />amendments to the existing contract, or with third party agreements scheduled for <br /> <br />implementation before commitments are made which would exceed existing <br /> <br />contract repayment obligations. <br /> <br />In view of the existing explicit contractual repayment terms, drawn-out legal <br /> <br />proceedings and other problems could be encountered in attempting to renegotiate <br />adequate repayment contracts. That is, CUWCD may be reluctant to contractually <br /> <br />assume the increased project costs especially when one considers existing contract <br /> <br />terms, the magnitude of the cost increases, and their effect on water rates. <br /> <br />Regional officials advised us that: <br /> <br />"The Central Utah Water Conservancy District passed a resolution on <br />November l~, 1979, to pursue with diligence, a course of action to <br />correct the problem of the Bonneville Unit construction costs out- <br />stripping the district's contractual obligation. This action is to be <br />concluded by September 1980. As part of the action, the district has <br />tentatively set August 19, 1980, as the date for an election on the <br />amended or new repayment contract if that course of action becomes <br />necessary. The district is now studying the various alternatives and <br />options available." <br /> <br />The Assistant Secretary, Land and Water Resources, advised us that "...some form <br /> <br />of repayment contract will be executed prior to the further commitment. of <br /> <br />construction funds when the contract ceiling has been reached." <br /> <br />Recommendation <br /> <br />In view of, (1) the magnitude of the increase required in the District's contractual <br /> <br />repayment obligation, (2) the potential for problems associated with the District <br />obtaining local approval of an amended or new contract, and (3) the relatively short <br /> <br />14- <br />