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<br />-f;t / ( <br /> <br />01228 ' <br /> <br />D - R . A . F . T <br /> <br />P:\User\Thomas\95Rate\FundRoav <br />November 19. 1993 <br /> <br />Fundi nq of Nonrei mbursab 1 e Expenses DRAFT, 11/19/93 <br /> <br />Issue <br /> <br />. How should funding of nonreimbursable O&M expenses be handled in the PRS? <br /> <br />Background <br /> <br />. For c 1 a rity throughout thi s issue paper. Rec 1 amat i on' s account wi 11 be <br />referred to as Reclamation's Basin Fund. Western's account will be <br />referred to as the Power Marketing Fund and the combination of the two <br />will be referred to as the Basin Fund (See issue paper on Basin Fund <br />Management for further details). <br /> <br />. Section 5(c) of the CRSP Act of 1956 provides that "All revenues collected <br />in connection with the operation of the Colorado River storage project and <br />participating projects shall be credited to the Basin Fund. and shall be <br />available. without further appropriation. for (1) defraying the costs of <br />operation. maintenance. and replacements of. and emergency expenditures <br />for. all facilities of the Colorado River storage project and <br />participating projects...". This section is interpreted to mean that CRSP <br />may be operated and maintained from revenues collected from operation of <br />the project. It further means that all O&M expenses. reimbursable or <br />nonreimbursable. except ~8 expenses, may be funded from revenues collected <br />from operation of the project. <br /> <br />. Approximately 90 percent of the revenues flowing into the Basin Fund are <br />from power sales which are deposited in the Power Marl:.eting Fund. <br />Payments recei ved from water contracts (for the construct i on of i rri gati on <br />and municipal and industrial [M&l] \vater facilities) and reveues from <br />water sales are deposited.in Reclamation's Ba?in Fund. Once Western and <br />Reclamation's annual budgets have been approved by Congress. Western uses <br />the money from the Power Marketing Fund for its needs and Reclamation <br />bills Western monthly for the additonal money it needs for operations. <br />maintenance. replacements and emergency expenditures which is then <br />transferred from the Power Marketing Fund to Reclamation's Basin Fund. <br /> <br />. Section 5(d) requires that revenues in excess of operating needs be <br />transferred to the General Fund annually. Western and Reclamation may <br />withhold from transfer to the General Fund revenue amounts that are needed <br />for operations. <br /> <br />. Since FY 1962. Reclamation's policy is to transfer all receipts for <br />repayment of construction cost for M&! and irrigation-related investment <br />(including interest for M&! investment) direct to the General Fund each <br /> <br />1 <br />