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Water Supply Partnership Kit Table 3 1986 Water Resource Development Act Water Supply Interest Rates 5 Fiscal Interest Fiscal Interest Fiscal Interest Year Rate(%) Year Rate (%) Year Rate(%) 1991 9.125 1996 6.750 1987 7.625 1992 8.125 1997 7.125 1988 10.000 1993 7.500 1998 6.750 1989 9.250 1994 6.125 1999 1990 8.250 1995 7.750 2000 3) Reallocations: Since the Corps is currently not constructing many reservoir projects, the most viable means to obtain storage in Corps reservoirs is through reallocation. Reallocation is considered to be a reassignment of the usage of existing storage space in a reservoir project to a higher and better use. In this process, economic, political and public welfare issues are taken into consideration. The reallocation process is normally conducted through a "Reconnaissance" study phase that is fully funded at the Federal level. If this study proves feasible, then a more detailed "F easibility" study is undertaken. TItis study is funded equally between us, and you may provide up to one-half of your share (that is, up to one- quarter of the total study cost) by in kind services instead of cash. The details of this study process can be provided by your local Corps office. Since 1979, nine of the Corps districts have performed a total of 35 reallocations. These reallocations transferred storage ITom flood control, hydroelectric power, water quality, and sediment reserve, to M&I water supply. These procedures reallocated a total of about 272,000 acre-feet of storage space. In addition, the Presidents Fiscal Year 1999 budget has a total of $2.97 million for an nine water supply studies. These studies are being performed by the Pittsburgh, Omaha, Portland, Seattle, Walla Walla, Savannah (2) and Los Angeles (2) Districts. The cost of reallocated storage assigned to you will be the highest of the benefits or revenues foregone as a result of the allocation, the replacement cost of an equivalent amount of storage in another or a new project, or the updated cost of storage in the Federal project. The cost which usually governs is the updated cost of storage. TItis procedure is an attempt to duplicate the cost of the project, as originally constructed, at today's prices. This process updates original construction cost through use of the Engineering News Record Construction Cost Index and the Corps' "Civil Works Construction Cost Index System. " Your portion of the cost is then prorated based on the storage reallocated to your use. Repayment of costs assigned to the reallocation will be over a period of 30 years ITom the date of availability of the storage space. TItis date of availability is normally considered to be the date the repayment agreement is signed by the Assistance Secretary of the Army (Civil Works) (ASA(CW)) or his duly authorized representative. The interest rate to use for repayment will be the rate as established in WRDA '86 (see Table 3). The rates are adjusted at 5-year intervals over the repayment period. The lO-year interest ITee period is not available for reallocated storage. In addition, any cost associated with the reallocation; e.g., the relocation of camping and picnic facilities as a result of a raise in the lake level, must be paid prior to or during the relocation period.