WSP03422

• File Number: 8220.111.O
• Description: Central Utah Participating Project
• State: UT
• Basin: Colorado Mainstem
• Date: 9/9/1985
• Author: US Gen. Accounting
• Title: Report to the Honorable Howard M. Metzenbaum US Senate Bureau of Reclamation's Central Utah and Central Valley Projects Repayment Arrangements
• Water Supply Pro - Doc Type: Report/Study

APPENDIX I

APPENDIX I

The regional Repayment Branch Chief informed us that local
negotiations on the three contracts will probably be completed by
August. Then, because the supplemental contract with the
district anticipates 'the need for additional ad valorem taxes, it
must be submitted to the local voters for approval before it is
signed. The two Jordan Aqueduct contracts are exempt from the
voting requirement'by' state legislation since the subdistricts
intend to repay thefrcosts with user charges rather than tax
revenues. According'\:o the Bureau's Repayment Branch Chief in
washington, the proposed contracts should be executed by fall
1985.

Even if these coritractsare approved, the district may seek
judicial relief to :.:t-educe .the total costs it would repay. Its
supplemental contract provides

--reI ief from 'ce:rtain cost overruns and research costs
associated with the Strawberry Aqueduct and
Collection System,

--a reduction :iri the federal financing rate from
3.22 percent"to 2.67 percent--the rate the district
contends was 'in effect at the time the Central Utah
project was. authorized, and

--use of Colorado River Storage project power revenues
to help repay M&I costs.

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REPAYMENT OF M&I COSTS
THROUGH POWER REVENUES

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The Bureau and' the Western Area Power Administration have
been seeking nonfederal participants to construct Bonneville Unit
power plants that wo~ld provide revenue to supplement M&I
repaymen t. In July', ~the prospect i ve part ic ipan ts expressed an
interest in funding;'a scaled-down version of the power plants,
but they did not want to contribute to M&I repayment.

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UTE DEFERRAL AND INSTREAM
FLOW AGREEMENTS

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Two Bureau agreements to provide water supplies could affect
repayment and impair the Bonneville Unit's economic feasibility.
In 1965, the Ute Indian Deferral Agreement was signed, permitting
the unit to use water to which the Utes held rights. In return,
the Bureau would build a project for the Utes by 2005 to replace
the water that would be diverted from their lands. Another
agreement--the Instream Flow Agreement signed in 1980--obligates

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