WSP05087

• File Number: 8221.112
• Description: Central Arizona Project
• State: AZ
• Basin: Colorado Mainstem
• Date: 9/30/1969
• Title: Letter Report from the Secretary of the Interior re: Power Needs of the Central Arizona Project
• Water Supply Pro - Doc Type: Report/Study

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EXECUTIVE OFFICE OF THE PIlESI'" .T
BUREAU OF THE BUDGET
Washington, D. C. 20503

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Septcmber 23, 1969

Honor"ble Halter J. Hickel
Socretary of tile Interior
Hashinnton, D. C. 20240

Dear Mr. Secretary:

This responds to Assistant Secretary Smith's letters of September 5
and 8, cq:lcerning your participation in n generation station near
Page, Arizona. The first lctter relates to the execution of a con-
tr.lct obliGating the United States to moke payments in advance of,
and not continGent upon appropriations. The second letter asks for
our views on your proposed report to the Congress as required by
l'llblic Lm, 90-537, Section 303 (c).

As we noted in our letter of May 2 to you, we feel that contracts
should normally be subject to appropriations. However, because of
the speci"l circumstance in this instance, we would have no objection
.to your entering into a contract obligating the United States in
advance of appropriations if you determine such a contract is appro-.
priate and necessary. Further, you are adviscd that we would have
no objection to transmittal of your proposed report to the Congress.

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These views are suhject to the understanding that execution of the
contract nnd tran.sllli.tt.:J.l of the report do not represent [\ commitment
to initiate construction of the Central Arizona project, since this
would be governed by the l'resiuent's budgetary objection as determined
by the then prevailing fiscal situation. Additionally, we wish to
reiterate our position that construction of any of the project facili-
ties, other than the capacity you would acquire under Section 303(b)
of Public Law 90-537, should not be initiated until contracts have
been executed with the project beneficiaries under the requirements
of Reclamation law on a basis that assures repayment to the Treasury
of the costs of the project allocated to the water users.

We understand that your present intention is to execute the contract
in the near future. In view of the current fiscal situation and
because your estimates for fiscal year 1971 will soon be submitted