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12 RUEDI. DAM AND RESERVOIR, COLO. . ('.~.J - The total l.~~Jrsable investment allocated to municipal and industrial water supply reasonably can be expected to be repaid, with interest ,mder provIsions of the Water Supply Act of 1058 (Public lAw 85-500). A substant.i"J denla-nd for such water will_develop when t.he oil shale reserve-s begin to be utIlIzed on a cOJ11J:nercml sca]e.~ probably within 10 years of the completion of constructIOn of RuedI Dam. In the absence at. this time of agencies or organiza..tions quali- fied to contract for re.pa.yment of the cost as:3igned to defeL'L'oo Illunic.- ipal :lJld industrial water supply, it will be necessary that the State of Colora.do, prior to transmitta.l of this report to the COIl~ress, furnish reasonable assurance. a.s to future repayment as required by tJ}e 'Vater Supply Act of 1058. . Costs of Ruedi D:lIn and ReservOIr allocated to flood control would be nonreimbursable, in accordance wit.h existing hlWS. Those allo- cated to fish a.nd wildlife and minimum basic recreatiolHtl fl",ilities we recommend be nonreimburs..'tble. The operating principles, which are quoted in full in the Regional Director's report, lIre generally acceptable a.S a. bn.si.s of project opera-- tion and we intend that the.y shal! control the physical operation of t.he Fryingpan.Arka.nsa.s project.. Some of the provisions, howe\Ter, a.re not compatible with reclamation law and policy. For example, the reimbursable portion of the construct.ion cost of Ruedi Dam and Reservoir not charged to the Fryingpan-Arkansas project is expected to be allocated to municipal and industdal water supply. Pulilic Law 485 permits apportioned revenues to be used to repay only irrigation costs, whereas section 3 of the operating prin- ciples would provide for apportioned revenues to be usecl in repay- ment of costs allooated to municipal und industrial water supply. In any event, we do not contemplate, and our planning report is not pre- mised on, the basin fund being used to provide assistance in the repay- ment of municip",land industrial costs of Ruedi Dam and Reservoir. In order to avoid ambiguities ".nd to avoid possible future conflicts such inconsistencies, along with cert..'1in other points largely te.chniea.l in n"tnre, wil! be ,liscussed with the State during the period thllt, this proposed report is being coordinated with the allected States with tJle objective that they be resolved before the final report on Ruedi Dam and Reservoir is transmitted to the Congress. Subject, of course, to consideration of comments received, I recom- mend t.hat. you approve and adopt this as your proposed report on Ruedi Dam and Reservoir and that you authorize me, on your behalf, to transmit it to the alfected States and to the Secretary of the Armv for official review and comment in accordanc.e with the provisions of the Flood Control Act of 1044, to the State of Colorado as required bv the Fish and Wildlife Coordination Act of 1958, and to otJIer' inte-restecl Federal agencies for their views and COllllllents. Respectfully, .. Approved and ".doptecl October 27, 10,)0. WILLIAM I. PALMER, Acting (/O'ln1ni~'8ioner. }:L7\IER F. BEN'NF:IT, Acting Secretary of the Interior.