BOARD00270

• Board Meeting Date: 8/15/1960
• Description: Table of Contents, Agenda and Minutes
• Board Meetings - Doc Type: Meeting

LiU/O

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not ever be considered to be a subsidy because
it is a part of the overall development of
the basin and the power revenues have their
proper place in repayment of any project. The
problem that the Commissioner of Reclamation
has faced is that Public Law 485 requires that
the Secretary enter into contracts for the re-
payment of these projects with districts which
are authorized to levy a general property tax.
Congress has set that mandate. In interpret-
ing that, the Secretary and the Commissioner
of Reclamation have been faced with a dilemma
as to how to apply that provision.

In order to make it equitable for all
districts, they have arrived at the maximum
mill levy which ranges, for construction pur-
poses, from one to one and one-half mills
under newly organized conservancy districts -
organized since 1955 at least. The question
is, can you say 75% of the maximum mill levy
to one district and 50% to the other? Now
obviously you can't. You have to make it
uniform. So in their repayment studies, they
have computed an estimated amount to be paid
from ad valorem or general property taxes.

\"Ie are not ever going to be able to
escape some uniform application of this mill
levy. The problem is that perhaps the Bureau
has underestimated the repayment ability of
the water users. In that case - I have talked
it over with some of the staff of Region 4 -
as Mr. r.1oses has said, they are not concerned
with how the money is raised~ It can all be
raised from the use of water, or the sale of
water. It is no concern of the government
because the conservancy district merely agrees
to payout, we'll say, $50,000 a year and as
long as they make those payments the govern-
ment is not interested in how the money is
raised.

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To clarify that point in our comments on
the Fruitland Mesa Project, we have requested
an explicit phrase that the actual amount to
be raised from ad valorem taxes should be
left to the discretion of the board of direc-
tors. Now at this time that is about the most
we can do with it under the present directive