Laserfiche WebLink
<br /> <br />repayment contracts and that all new and amendatory contracts exclude contin- <br />gencyallowances. We were also advised that the limitation of periodic recalcula- <br />tions to exclude repayment contracts was intended, and that until directed <br /> <br />otherwise, the region would not require such provisions in repayment contracts. <br /> <br />Recommendation <br /> <br />Before any changes can be made to the BU repayment contract, as well as other <br /> <br />new or amendatory contracts, the applicability of the above discussed provisions to <br /> <br />repayment contracts needs to be clarified and restated. Accordingly, we recom- <br /> <br />mend that the Commissioner address this matter and require in both repayment <br /> <br />contracts and water service contracts provisions for periodic rate adjustments <br /> <br />based upon irrigators' ability to pay without an allowance for contingencies. <br /> <br />Comments of the Assistant Secretarv - Land and Water Resources <br />. <br /> <br />In response to this recommendation, the Assistant Secretary, L WR, advised us as <br /> <br />follows: <br /> <br />"This issue was reviewed during formulation of the December 29, 1978, <br />Irrigation Contracting Policy memorandum. The decision was made to <br />limit periodic rate adjustments to water service contracts only be- <br />cause of possible legal constraints contained in Reclamation law, <br />varying State requirements limiting potential debt ceilings for a given <br />contracting entity, and the practical uncertainties created by voter <br />approval and State endorsements. <br /> <br /> <br />However, the Service recognized that in some instances a dramatic <br />increase in irrigators' ability to pay demonstrates possible inequi ties to <br />other project beneficiaries such as power users. Several contracting <br />policy changes have been instituted or are under review which will <br />reduce possible inequities. They include: (j) using a water service and <br />fixed repayment combination contracting form which would allow <br />periodic review and adjustment of the water service charges; (2) <br />utilizing 100 percent of irrigators' ability to pay in new or amendatory <br />contracting actions by excluding contingency allowances in payment <br />capacity determinations for all irrigation contracting programs; and <br />(3) requiring repayment terms to be renegotiated at every feasible <br />opportunity." <br /> <br />28 <br />