Laserfiche WebLink
<br />. <br /> <br />. <br /> <br />. <br /> <br />0393 <br /> <br />APPENDIX III <br /> <br />NHF Staff Computation of Repayment Deficit, Fryingpan-Arkansas <br />Pro;ect <br /> <br />Inspector General Brown determined that the failure to <br />reallocate $69 million to reimbursable features of the Fry-Ark <br />Project would result in a repayment shortfall of $250.7 million. <br /> <br />The repayment interest rate for Fry-Ark, as per the Water <br />Supply Act of 1958, is 3.046%. As required by Fry-Ark's <br />authorizing legislation, the first year of the repayment period <br />is the year delivery of project water began, which was 1975. <br /> <br />If BuRec had accepted the reallocation recommendations, the <br />reallocations would have been incorporated into the Fiscal Year <br />1981 cost allocations and repayment study. 1981 was the <br />seventh year of Fry-Ark's repayment period. Therefore, if the <br />reallocations were not accepted, Inspector General Brown seems <br />to have reasoned, the repayment deficit would occur over the <br />remaining 43 years of the 50 year repayment period. <br /> <br />Using the formula V = C(l+r)t where, <br /> <br />V = unpaid balance by year 2024 <br /> <br />C = amount in dispute <br /> <br />r = repayment interest rate <br /> <br />t = years in repayment period, <br /> <br />the Inspector General obtained the following result: <br /> <br />v = $69 million (1+ .03046)43 = $250.7 million. <br /> <br />Using the same formula, N~IF computed the repayment deficit for <br />the $60 million BuRec refused to reallocate and obtained the <br />following result: <br /> <br />v = $60 million (1+ .03046)43 = $218 million. <br /> <br />113 <br />