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6 Water Supply Partnership Kit 4) Low Income Community: Section 322 of the 1990 Water Resources Development Act authorized, at the discretion of the ASA(CW), a reduced price of water for low income communities. Low income communities are identified by the law as communities with a population ofless than 20,000 which are located in counties with a per capita income of less than the per capita income of two-thirds of the counties in the United States. For the purposes of this provision, a community may extend across county boundaries, however, all counties served must qualify as low income counties to obtain the reduced price allowed under this Section. The amount of storage which can be made available to anyone community under this provision is the amount required in any reservoir to yield two million gallons of water per day. This provision for a reduced price is only applicable to reallocations. The prke under this provision of law is the greater of (l) benefits foregone, or (2) the updated cost of storage but not to exceed (for fiscal year 1991) $100 per acre foot of storage space. Individual contract prices, once approved, are not subject to further indexing. The $100 charge was applicable only to contracts signed in Fiscal Year 1991. This price shall be adjusted on 1 October every year based on the Consumer Price Index for the September immediately preceding the fiscal year. This price index is published monthly in the Department of Commerce, Bureau of Economic Analysis, Survey of Current Business. Repayment is permitted over 30 years from the date the water supply storage agreement is signed by the ASA(CW). The applicable interest rate for repayment is that authorized by WRDA '86 (see Table 3). This rate will be adjusted at 5-year intervals over the repayment period. If you think you may be eligible for this pricing policy, please contact your local Corps district office. 5) Additional Costs. Regard1e~s of the method used to assign to you the cost of storage in the Corps project, you will also be responsible for your pro-rata share of additional costs required to operate and maintain the project. These costs consist of: Annual operation and Maintenance Expense. All non-Federal sponsors (including those detennined as being a low-income community) are responsible for all operation and maintenance expenses allocated to their portion of the water supply storage space. These costs are to be paid yearly and should be paid in advance based on an estimated expenditure. Repair, Replacement, Rehabilitation, and Reconstruction Costs. Costs allocated to water supply which are associated with these four items are to be paid by the non-Federal sponsor either during construction of such item or in lump sum, with interest at the rate prescribed in WRDA '86, upon completion of construction. You are encouraged to establish a sinking fund in order to cover these costs should they occur. Costs expended in existing projects for these programs prior to entering into a repayment agreement shall be added to the initial project investment cost for repayment purposes. An exception to this rule is for reallocated storage which, through the updating procedure, assumes a new project. Dam Safety Assurance Costs. Modifications to a dam project and related facilities deemed necessary for dam safety assuranCeS shall be considered to fall under the provisions of rehabilitation except for cost sharing. Costs of project modification for dam safety shall be in accordance with the provisions of Section 1203 ofWRDA '86. Under this provision, 15 percent of the cost of the dam safety assurance modification is allocated among purposes and shared with appropriate project sponsors. SURPLUS WATER AUTHORITY. A lesser used authority for the Corps to contract for water supply was authorized by