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<br /> <br />UNITED STATES GENERAL ACCOUNTING OFFICE <br />WASHINGTON. D.C. 20548 <br /> <br />RE.SOURCES. COMMUNITY, <br />AND ::CCNOMrc OEVELooMENT <br />DIVISION <br /> <br />B-217826 <br /> <br />The Honorable Howard M. Metzenbaum <br />United states Senate <br /> <br />Dear Senator Metzenbaum: <br /> <br />In your November 8, 1984, letter you asked us to evaluate a <br />number of specific policies and practices employed by the Bureau <br />of Reclamation, Department of the Interior, to seek recovery of <br />the federal investment in water projects. We provided your office <br />with copies of several of our reports and legal opinions, which <br />responded to a number of the specific items. In our letter of <br />July 8, 1985, we provided you with an estimate of the cost to the <br />U.S. Treasury from the Bureau using a 3.342-percent annual <br />interest rate, rather than higher rates that were current when <br />construction began on each major feature, in establishing <br />repayment for all units of the Central Arizona Project. <br /> <br />On June 27, 1985, we briefed your office on the last two <br />items, which concerned (1) the status of repayment of the <br />Bonneville Unit of the Central Utah project, the existing <br />repayment contract, and the steps being taken to amend the <br />contract and (2) the proposed irrigation and municipal and <br />industrial (M&I) water supply rate-setting policies for the <br />Central Valley Project (CVP), California. Subsequently, your <br />office requested that we confirm in writing the information <br />presented in the briefing. This report summarizes the information <br />presented, and details on the two projects are contained in the <br />appendixes. <br /> <br />BACKGROUND <br /> <br />The Bureau of Reclamation is the federal government's <br />principal water development and water management organization in <br />the western United States. Projects developed by the Bureau <br />