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<br />0406 <br /> <br />. <br /> <br />. <br /> <br />It should be noted that in January 1979- when BuRec reported <br />irrigators' ability to pay had increased to $69 million, BuRec <br />explained that the basis for the increase was "new agricultural <br />economic studies." However, following publication of the <br />audit, BuRec dropped irrigators' ability to pay back to $16.4 <br />million without explanation. <br /> <br />Interest Rate for Replacements and Additions <br /> <br />In the above-mentioned August 12, 1980 comments, Acting <br />Assistant Secretary Beard agreed that a Solicitor's review was <br />needed. In his October 6, 1980 memorandum to Solicitor <br />Krulitz, Commissioner Higginson requested an opinion on this <br />issue. <br /> <br />On December 16, 1980 Associate Solicitor Little informed <br />Commissioner Higginson of his determination that Secretarial <br />Order 2929 did not apply to CRSP. Little concluded that <br />"...the interest rate applicable to CRSP replacements and <br />additions must be in accordance with section 5(f) of the CRSP <br />... Act...1I <br /> <br />CONCLUSION <br /> <br />BuRec has refused to accept any of the Inspector General's <br />recommendations -- it has yet to secure a supplemental <br />repayment contract for the Bonneville Unit with the Central <br />Utah Water Conservancy District and has continued its method of <br />apportioning storage project revenues. <br /> <br />Inspector General Brown had stated that the failure to <br />correct these actions could affect CRSP's future financial <br />condition -- to the tune of $432 million. Since the time of <br />the audit this has risen to at least $472 million. In <br />addition, the failure of BuRec to adjust irrigators' ability to <br />pay for Bonneville adds another $52.6 million to the CRSP <br />underpayment statistics. <br /> <br />With full knowledge that local interests are unwilling to <br />repay the full amount of reimbursable costs, the Bureau, with <br />the concurrence of the Secretary, is now seeking to increase <br />its rate of spending on the $2 billion Bonneville Unit. Under <br />such circumstances, the Congress may have to reduce or <br />eliminate furth~r funding for construction of the Bonneville <br />Unit, to impress upon both the Bureau and the district the <br />critical need to secure repayment commitments. <br /> <br />91 <br />