BUREAU OF RECLAMATION, The SECRETARY OF THE INTERIOR. SIR: On May 16, 1946, I transmitted to you a report on the Paonia project, Colorado, which was adopted by Acting Secretary Chapman on May 23, 1946, as the proposed report of the Secretary of the Interior. Copies of the proposed report were then sent to the Secretary of War and to the State of Colorado, pursuant to the provisions of section 1 of the Flood Control Act of 1944 (58 Stat. 887). Copies were also sent to the Federal Power Commission and the Department of Agriculture. The written views of each agency have been received and a copy of each letter is enclosed herewith. The State of Colorado desires and recommends construction of the project with certain changes in the repayment plan. The interested Federal agencies advise that constructing the project will not duplicate or interfere with any of their plans. Section 9 (b) of the Reclamation Project Act of 1939 provides that In connection with any new project, new division of a project, or supplemental works on a project there may be allocated to flood control or navigation the part of said total estimated cost which the Secretary may find to be proper. It provides, also, that— In connection with the making of such an allocation, the Secretary shall consult with the Chief of Engineers and the Secretary of War * Such consultation has taken place. The Secretary of War and the Chief of Engineers have advised, in effect, that, unless the proposed Spring Creek Reservoir is to be operated in accordance with regulations prescribed by the Secretary of War, as provided for in section 7 of the Flood Control Act of 1944, it would not be appropriate to allocate part of the cost of its construction to flood control. On the other hand, counsel for this Bureau advise that authority to allocate costs to flood control under section 9 (b) of the Reclamation Project Act of 1939 is not dependent upon the allocation of flood control space in reservoirs and that the requirements of section 7 of the Flood Control Act of 1944 do not become effective, with respect to Federal Reclamation reservoirs, unless there is an allocation of space therein exclusively for flood control purposes. It is perfectly clear to us that the mere fact that a portion of the cost of a project has been allocated to flood control does not necessarily mean that any portion of the storage provided has been or should be so allocated. If the Spring Creek Reservoir is operated as proposed in appendix E to the regional director's Not printed. 2 report, the entire active storage capacity of 13,000 acre-feet would, in effect, be used jointly for flood control and irrigation, and, seasonably, in the winter and spring, the period during which all flood flows of any consequence (without exception such flows have resulted from spring melting of snow accumulated on the watershed, accelerated by warm rains or warm winds) have always occurred, heretofore, the storage would be used entirely for flood control until the danger of flood is past. The position apparently taken by the Secretary of War is contrary to the experience gained by the Bureau in the operation of many reservoirs for irrigation used primarily, over many years. Definite, measurable reductions of flood peaks are obtained simply by the regulation and retardation effects of a reservoir on a stream, and the beneficial effects of such reservoirs can be greatly increased through evacuation of storage space in anticipation of high spring run-off, the extent of which is estimated by surveys of the snow cover in the watersheds above the reservoir. The flood-control benefits indicated in the report would result from the seasonal method of operation proposed in the report. The average annual benefit computed takes account of the seasonal type of operation. Hence, the flood-control benefits claimed are assured and the proposed allocation of $32,000 to flood control is justified. The Secretary of Agriculture, in commenting on the report, agrees that the project is a worth-while one, and believes that the extent of present irrigation development in the area justifies improving the water supply. He states that the Department of Agriculture, through its control of the national forest lands which comprise the bulk of the watershed of East Muddy Creek, will assist in developing more intensive watershed management by reducing the use of this watershed for grazing, thus assuring the maximum serviceable life of the existing and proposed irrigation facilities. The Secretary also has suggested that a more detailed treatment of the land and water use phases of the project will be essential to a sound irrigation development. These necessary detailed studies on the land and water problems of the Paonia project are scheduled for initiation immediately following authorization. They will constitute an integral part of the preconstruction activities required for successful construction, development, and operation of the project. As I have already pointed out, the State of Colorado has approved the report, except that it recommended that the report be appropriately modified and changed to provide for increased unit costs of water to the water users and for an extension of the repayment period (to approximately 60 years). In addition, in commenting on the Colorado River Basin report, the State of Colorado has assured us that the Paonia project will cause a depletion of water well within any ultimate allocation of Colorado River water which may be made to the State by the Upper Colorado River Basin Compact Commission. Subsequent to my previous letter of May 16, 1946, transmitting the Paonia report to you, Public Law 732, Seventy-ninth Congress, was adopted on August 14, 1946. This act provides that the Secretary of the Interior shall make findings on the part of the estimated cost of a project which can properly be allocated to the preservation and propagation of fish and wildlife, and costs allocated pursuant to such findings shall not be reimbursable. I find that the amount of $78,000 may be allocated to fish and wildlife. This finding has the concurrence of the Fish and Wildlife Service. Recent price indexes for the kind of work included in the project indicate that the cost of construction may be approximately $3,030,000, an increase of about 100 percent over the costs estimated under 1940 conditions. Of this total cost $600,000 would be allocated or the cost of 4,000 acre-feet of storage to be provided in the Spring Creek Reservoir in excess of present needs on project lands, and will be returned to the United States through later use on other developments in the North Fork River Valley; $32,000 would be allocated for flood control; and $78,000 would be allocated to fish and wildlife. Thus, the remainder of $2,320,000 would be allocated for repayment by the water users on the Paonia project lands. The water users have indicated their willingness to repay $2.84 per acre per year for water for the Fire Mountain lands and $1.64 per acre per year for the Leroux Creek lands, over and above the costs of operation and maintenance. This is slightly higher than the repayment ability indicated in the report, but after a careful study, I am convinced that these amounts can be paid. At these rates, the water users would be able to repay a total of $1,382,800 of the estimated construction costs in a 40-year repayment period, or would be able to repay the allocation of $2,320,000 in a 68-year period. The annual benefits-to-costs ratio for this project is estimated at 1.3 to 1, under present day high construction costs, amortized in 50 years, and benefits at prewar price levels over the entire repayment period for the project. I find that the proposed construction has engineering feasibility; that of the estimated total construction costs of $3,030,000 at current price levels, $2,320,000 can properly be allocated to irrigation of the project lands, $32,000 can properly be allocated to flood control, $78,000 can properly be allocated to fish and wildlife, and $600,000 can be allocated to the provision of reserve storage, which can be sold or rented by the United States for use on lands not included in the proposed project; and that no part of the estimated cost can properly be allocated to power, municipal water supply, or other miscellaneous purposes. I recommend that the Paonia project be authorized for construction in accordance with the plans set forth in the attached report of the regional director dated January 2, 1946, with such modifications as the Commissioner of Reclamation, with your approval, may find proper. I recommend that this authorization be on the basis that the water users be required to repay, during the useful life of the project and at the maximum rates which, in the judgment of the Secretary of the Interior, they may reasonably be expected to meet, that portion of the construction costs of the project which may properly be allocated to them, in addition to the costs of operation and maintenance, including replacements of project works. Should a comprehensive plan of water resources development in the Colorado River Basin be arrived at, the Paonia project should, of course, be considered as an element of that plan. I recommend that you adopt this letter as your report on the Paonia project. An act to authorize the construction, operation, and maintenance of the Paonia Federal Reclamation project, Colorado. (Act of June 25, 1947, 61 Stat. 181, Public Law 117, 80th Cong., 1st sess.) *** That the Secretary of the Interior through the Bureau of Reclamation is hereby authorized to construct, maintain, and operate, pursuant to the Federal Reclamation laws, the Paonia project, Colorado, substantially in accordance with the report of the regional director of the Bureau of Reclamation, region IV, dated January 2, 1946, as concurred in by the Commissioner of Reclamation and the Secretary of the Interior: Provided, That, notwithstanding any recommendations to the contrary contained in said report, all costs allocated to irrigation shall be reimbursable under the Federal Reclamation laws within repayment periods fixed by the Secretary of the Interior at not to exceed sixty-eight years. SEC. 2. Unexpended balances of sums heretofore appropriated for the Paonia project, Colorado, authorized by finding of feasibility of the Secretary of the Interior approved by the President on March 18, 1939, are hereby made immediately available for expenditure on the Paonia project hereby authorized. SEC. 3. There are hereby authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, such additional sums as may be required for the purposes of this act. PARKER-DAVIS PROJECT ARIZONA-CALIFORNIA-NEVADA The Parker Dam power project was authorized by section 2 of the Rivers and Harbors Act of August 30, 1935 (49 Stat. 1039), and in accordance with the provisions of that act, the President, on January 29, 1936, designated the Secretary of the Interior his agent to construct, operate, and maintain the project. The Davis Dam project, originally called Bullshead Dam project, was found feasible and authorized by the Secretary on April 26, 1941, under the provisions of the Reclamation Project Act of 1939. Parker-Davis Project was consolidated from these two projects by Act of Congress on May 28, 1954 (68 Stat. 143, Public Law 373, 83d Cong., 2d sess.). PARKER DAM AUTHORIZED [Extract from] An act authorizing the construction, repair, and preservation of certain public works on rivers and harbors, and for other purposes. (Act of August 30, 1935, 49 Stat. 1028, 1039-1040, Public Law 409, 74th Cong., 1st sess.) * SEC. 2. That for the purpose of controlling floods, improving navigation, regulating the flow of the streams of the United States, providing for storage and for the delivery of the stored waters thereof, for the reclamation of public lands and Indian reservations, and other beneficial uses, and for the generation of electric energy as a means of financially aiding and assisting such undertakings, the projects known as "Parker Dam" on the Colorado River and "Grand Coulee Dam" on the Columbia River, are hereby authorized and adopted, and all contracts and agreements which have been executed in connection therewith are hereby validated and ratified, and the President, acting through such agents as he may designate, is hereby authorized to construct, operate, and maintain dams, structures, canals, and incidental works necessary to such projects, and in connection therewith to make and enter into any and all necessary contracts including contracts amendatory of or supplemental to those hereby validated and ratified. The construction by the Secretary of the Interior of a dam in and across the Colorado River at or near Head Gate Rock, Arizona, and structures, canals, and incidental works neces |