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<br />Resolution <br />by <br />Upper Colorado River Commission <br /> <br />re: <br /> <br />Proposed Principles and Standards for Planning Water and <br />Related Land Resources published by Water Resources Council <br />36 F .R. 24144, December 21, 1971 <br /> <br />WHEREAS, Section 103 of the Water Resources Planning Act of 1965 <br />provides that "The (Water Resources) Council shall establish. after such <br />consultation with other interested entities, both Federal and non-Federal, <br />as the Council may find appropriate, and with the approval of the President, <br />principles, standards, and procedures for Federal participants in the prepa- <br />ration of comprehensive regional or river basin plans and for the formulation <br />and evaluation of Federal water and related land resources projects "; and <br /> <br />WHEREAS, the Water Resources Council has published "Proposed <br />Principles and Standards for Planning Water and Related Land Resources" <br />in the Federal Register (36 F.R. 24144; Dec. 21. 1971) referred to herein- <br />after as "the WRC proposal"; and <br /> <br />WHEREAS, under the WRC proposal the discount rate used in the <br />evaluation of projects would be predicated upon the "opportunity cost of <br />all Federal investment activities" and would be increased from 5 3/8% to <br />7% for the next five years, and presumably to 10% or more later, adversely <br />affecting federal water development programs because higher discount rates <br />would (a) be short sighted and force planners to trade off construction costs <br />of a project with long-term benefits for higher operation and maintenance <br />costs of a smaller, less-efficient project to the extent that the smaller <br />project would be less economical in the long run, (b) inhibit or preclude <br />federal participation in water resource development with a shifting of the <br />financial burden to State, local, and private interests, (c) emphasize the <br />impact of bene fit-cost ratios and diminish the relative importance of social, <br />regional, and environmental objectives, (d) conflict with the President's <br />declared objectives of strengthening the national economy and reducing <br />unemployment, and (f) force a moratorium on planning of future projects <br />leaving insufficient time for needed projects to be constructed to alleviate <br />resulting water shortages; and <br /> <br />WHEREAS, promulgation by the Executive Branch of an increased <br />discount rate based upon the "opportunity cost" concept is discriminatory <br />against water resource development and usurps the policy-making preroga- <br />tives of the U. S. Congress; and <br />