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<br />000672 <br /> <br />ATTACHMENT A <br />(Electronic Copy of OrigiDaI) <br /> <br />Nov. 13, 1997 <br /> <br />0-5200 <br />wrR.-l.OO <br /> <br />MEMORANDUM <br /> <br />. To: Director, Policy and External Affairs . <br />Attention: W-lSOO <br />Director, Operations <br />Attention: W-6000 <br />Director, Program Analysis ()ffice <br />Attention: D-SOOQ <br />RegioDal.Direct.or, "PN, MP, LC, UC, GP <br />Attention: PN-looo, PN-3300, MP-I 00, MP-440, LC-l ()()(),LC-44S0, <br />UC-lOO, UC-446, GP-lOOO, GP-2100 <br /> <br />From: Eluid L. Martinez IS/ <br />Commissioner <br /> <br />Subject: Policy for Pricing Water Converting fiom Inigation to M~cipal and Industrial Service <br /> <br />'The issue of recovering capital costs associated with water converting fiom irrigation to municipal <br />and industrial (M&I) use was the subject of an August 1992 Audit Report (Audit) by the Office of <br />Inspector General (010) entitled "Repayment of Municipal and Industrial Watx::r Supply <br />Investment Costs." This report criticized the Bureau ofRec1amation.(Reclamation) for DOt <br />recovering sufficient revenues oD water cOnverted fiom inigation to M&I use. Reclamation did <br />not concur with two oftbe recommendations included in that report whereupon ttle matter was <br />remanded to the Office of Policy, ManagemeDt, and Budget (pMB) for resolution. Reclamation <br />worked with PMB to develop a policy which would be acceptable to all parties co~ In the <br />context of resolving this Audit, Reclamation prepared the policy for pricing water CODVerting fiom <br />irrigation to M&I use set forth below. The OIG concurred with this policy. <br /> <br />Where M&I is aJ). authorized project purpose, general authority for the Secretary to sell water at a <br />rate other than that charged for irrigation is provided in section 9 of the Reclamation Project Act <br />of 1939 (The Act of August 4, 1939, cb. 418, S3 Stat. 1,187). Section 9(cX2) grants the <br />Secretary authority to enter into water service contracts for a period not to exceed 40 years at <br />"such rates as in the Secretary's judgment win produce revenues sufficient to cover an <br />