WSP06085

• File Number: 8141
• Description: Fryingpan-Arkansas Project
• State: CO
• Basin: Arkansas
• Water Division: 2
• Date: 5/22/1984
• Author: National Wildlife Fe
• Title: Shortchanging the Treasury--The Failure of the Department of the Interior to Comply with the Inspector Generals Audit Recommendations to Recover the Costs of Federal Water Projects--select chapters pr
• Water Supply Pro - Doc Type: Report/Study

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(3) BuRec should require. in both repayment contracts and
water service contracts, provisions for periodic rate
adjustments based upon irrigators' ability to pay.

(4) The 1973 Commissioner's directive should be subjected
to the Solicitor's review to ensure conformity with Secretarial
Order 2929.

ADMINISTRATIVE RESPONSE

Bonneville Unit Repayment Contract

BuRec Commissioner Keith Higginson provided Interior
Secretary Cecil Andrus with an outline of options and
recommendations concerning ~he Bonneville Unit repayment
contract on March 31, 1980._1 Higginson stated, "The
securing of an increased contractual repayment obligation is
necessary to continue uninterrupted construction of the unit."
However, whatever recommendation was made by Higginson,
Secretary Andrus did not concur. Then on May 6, 1980,
Assistant Secretary for Land and Hater Resources Guy Martin
provided Secretary Andrus with an update on the contract issue
and suggested some possible solutions.~/

On August 12. 1980 Acting Assistant Secretary for Land and
Water Resources Daniel Beard submitted comments on the draft
audit report to Regional Audit Manager Gerald W. Hicks
(Sacramento, CA). Beard stated that "some form of repayment
contract will be executed prior to the further commitment of
construction funds when the contract ceiling has been
reached." A notice in the Federal Register on August 22, 1980
announced that BuRec would initiate negotiations with CUWCD for
a supplemental repayment contract.

?he availability of the draft supplemental repayment
contract, which raised CUWCD's obligation by over t350 million,
was announced in the Federal Register on November 25, 1980. On
December 2, 1980 Acting Assistant Secretary Beard notified
Inspector General Brown of the availability of this contract.
Beard said that the proposed contract would be sent to BuRec's
Hashington office in January 1981 for Departmental approval.

In a January 18, 1981 memorandum to Commissioner bigginson,
Assistant Secretary Martin rejected the proposed supplemental
contract. Martin found that several provisions of the contract
were illegal and others not fiscally prudent. He also stated
that "the contract masks costs of hundreds of millions of
dollars from the clear view of the people who must pay for the

~/Portions of this item were denied NWF by the Department
of the Interior.

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