BOR Answers Letter, Issues Financials

By Sun Advocate

In a letter to the United States Bureau of Reclamation (BOR) in late October, Carbon County Commissioner Bill Krompel asked the agency some pointed questions about issues swirling around the proposed Gooseberry Narrows Project. At that same time and for weeks before, local county commissioners and the Carbon Water Conservancy District (CWCD) had been also requesting a financial statement on the dam and what the ultimate costs would be.
Last week a letter came back from the BOR answering Krompels questions and also supplying the requested financial statement. However, no one on this side of the mountain was convinced by the documents.
“The financial statement just doesn’t look right for what they intend to do,” said County Commissioner Mike Milovich. “It just looks like the numbers aren’t high enough.”
The seven page response to all the questioning that has been going on by Carbon officials gave some answers to those queries. First it was pointed out that the dams operation, when complete would be “owned and operated by the Sanpete Water Conservancy District (SWCD).”
Krompel’s letter also asked about the existing Fairview Tunnel that is presently used to transport water from Fairview Lake to northern Sanpete County. In his letter he wondered why Sanpete County couldn’t use that existing portal to handle the extra “5,400 acre-feet (of) water right (that) SWCD” but has never put to “beneficial use.”
The BOR answered that question by referring to the fact that the tunnel as it exists “under current conditions’ cannot be sued to divert water from the Gooseberry Drainage by the SWCD because it “is owned by a private canal company and not SWCD.”
The third question in the inquiring letter asked about the original tripartite agreement from the early 1940s when Sanpete County agreed to pay for part of the new (at the time) Scofield Dam as a trade for building the Gooseberry Dam. That original amount was in the amount of $116,000, and at the time was a good portion of the cost of the dam. However, Sanpete pulled out of the agreement when World War 11 started, and never did pay any portion of the construction of the dam.
Carbon officials have reasoned, and also placed in the letter, numbers relating to how the value of that cost would have changed in the last 60 years. The dam actually ended up costing nearly $1 million by the time it was completed in 1946, and if the dam were to be built today the cost would be high enough that Sanpete’s cost would be over $4 million.
However the BOR disputed those assertions, stating that research does not support the suppositions and that Carbon only had to pay back $216,000 total itself with payments of $5400 annually.
First they pointed out that the contract said “that repayment (was) non-interest bearing” or that in other words “the United States subsidized the cost of constructing the project works.” The point of that answer was to show that Carbon paid no interest on the money, so why should Sanpete.
They also pointed out the agreement said that “if and when the United State’s exercises its rights under the said Gooseberry Plan, the (CWCD) reimbursable construction cost obligation referred to… shall be reduced by the amount of …” $116,000.
The BOR also pointed out that since the execution of the repayment contract “the United States assigned it’s water rights for the Gooseberry Plan to the (SWCD). As a beneficiary of the Scofield Dam and reservoir the (SWCD) would be responsible to repay the $116,000 as its share of the reimbursable construction cost.”
Accordingly the BOR says that the SWCD has included that $116,000 in the cost of the present project and an article of the original contract “specifically refers to the overpayment of construction costs” (which in case Gooseberry is built will be the case) “does not indicate that reimbursement (to CWCD) would be made with interest since repayment” was “non-interest bearing.”
The BOR also made an explanation of not only the numbers they see as being involved in building the project, but also the process behind the application for securing the financial means for doing so. Sanpete is applying for money through the Small Reclamation Projects Act of 1956 (SRPA). For them to apply for the money at least part of the reason for the project must be for irrigation, which had, until recently, seemed to be the emphasis of the project. As of last week, in a notice published in the Federal Register, it now appears more of the water would be used for municipal use.
All projects that fall under the SRPA guidelines have to cost less than $62 million and the maximum combined loans and grants cannot be over $42 million. Applicants must contribute more than 25 percent of the cost of the project up front or repay the loan with other resources in less than 40 years or both.
One of the questions many opponents have had is where Sanpete’s part of the money will come from. They have not had to have that money during the application process, but all commitments for outside money, be it from loans or other grants, must be solidified by the time the repayment contract is executed. Applicants must show ability to repay the SRPA loans along with any other loans taken out for the project.
In the data provided by the BOR the total cost of the project is now planned at $24,378,000. For direct facilities cost the BOR chart shows that the Narrows dam and reservoir will cost $9,132,000 and the Narrows Tunnel Rehabilitation is slated for $3,143,000. Other parts of the project and their costs include the upper Cottonwood Creek pipeline at $274,000, the so-called East Bench pipeline for $4,195,000, the Oak Creek pipeline $210,000, the relocation of Highway SR-264 which the reservoir will displace at $1,557,000, a recreation area constructed on the reservoir for $1,055,000 and wetlands, wildlife and fishery mitigation which they have appropriated $2,812,000 for.
There are also various costs listed for administrative and environmental statement activities in the chart.
The next move for the BOR is to release the supplemental draft environmental impact statement. Generally those statements come out 30 days after the notice to issue one is published in the Federal Register. The notice was printed on November 25 so the document should be released around Christmas Day. Then a comment period of 60 days will be in place for the public and officials to remark on it.