COMMENTS OF THE BUREAU OF THE BUDGET

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D. C., July 3, 1957. The honorable the SECRETARY OF THE INTERIOR.

MY DEAR MR. SECRETARY: This is in reply to your letter of June 6, 1957, transmitting your report on a plan of development for the proposed Greater Wenatchee Division, Chief Joseph Dam project, Washington. This report is made pursuant to Federal reclamation laws, and Public Law 577, approved July 17, 1952.

The improvements considered would provide for irrigating seven completely separated units in the Columbia River Valley downstream from Chief Joseph Dam. Each of the units would require independent works for pumping from the Columbia River and conveying water to lands that would be irrigated for production of apples. Only 4 units are recommended for authorization at this time: Howard Flat, Brays Landing, East, and Moses Coulee, having a total of 8,661 irrigable acres, including 7,221 acres not now irrigated.

In his report dated June 1956, the regional director, Bureau of Reclamation, estimated the irrigable areas, costs, benefits, and benefitcost ratios as follows:

Your letter of June 6, 1957, states that the cost of the 4 recommended units is now estimated at $9,734,800 based on October 1956 price levels. This cost is all proposed to be allocated to irrigation except $94,800 for provision of fish screens proposed as a nonreimbursable allocation to fish and wildlife. Under this increased cost estimate, it is stated that the water users, in a 50-year period, could repay 59 percent or $5,979,250 of the total reimbursable obligation of $10,185,000 including $545,000 for funded operation and maintenance charges during the first few years of project operation, prior to the time the orchards come into production. You estimate that the remaining 41 percent, or $4,205,750, would be retired in less than 1 year from surplus power revenues from operation of the Chief Joseph Dam powerplant. The recent financial adjustments are stated to have little

effect on economic feasibility as given in the regional director's 1956 report.

The report does not contain information as to the availability of sufficient power revenues, over and above amounts needed to reimburse the Federal Government for the cost of the power investment in Chief Joseph Dam within its 50-year repayment period, for repayment of the irrigation costs of the Greater Wenatchee division that exceed the repayment ability of the water users. In the absence of this information, the Bureau of the Budget would expect that the request for appropriations for initiating construction of the irrigation works, if authorized, would be accompanied by a current financial analysis and schedules of power generation and rates demonstrating such repayment ability.

The Bureau of the Budget believes that the cost of fish screens should be treated as a reimbursable cost to irrigation. We also believe that, in view of the sizable secondary benefits involved in this project, consideration should be given to a requirement for the establishment of conservancy districts to insure maximum justifiable contribution or repayment by those to whom secondary benefits of the project will accrue.

I am authorized by the Director of the Bureau of the Budget to advise you that, subject to consideration being given to the above comments, there would be no objection to the submission of your proposed report to the Congress or to authorization of the improvements recommended therein. No commitment, however, can be made at this time as to when any estimate of appropriation would be submitted for construction of the project, if authorized by the Congress, since this would be governed by the President's budgetary objectives as determined by the then prevailing fiscal situation. Sincerely yours,

CHARLES C. WARNER, Acting Chief Resources and Civil Works Division.

LETTER FROM THE SECRETARY OF THE INTERIOR

TO THE PRESIDENT

DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY,

Washington, D. C., June 6, 1957. Through: The Bureau of the Budget. THE PRESIDENT, THE WHITE HOUSE,

Washington, D. C. DEAR MR. PRESIDENT: My report on a plan of development for the proposed Greater Wenatchee division, Chief Joseph Dam project, Washington, is transmitted herewith under provisions of section 9 (a) of the Reclamation Project Act of 1939 (53 Stat. 1187).

The Greater Wenatchee division is in the Columbia River Valley between Moses Coulee on the south and Pateros, Wash., on the north. The division includes 7 units which are completely separate land bodies several miles apart requiring independent irrigation systems. Authorization is recommended at this time for 4 of the 7 units. These 4 units comprise a total of 8,661 acres of which 7,221 acres are not now irrigated. For each of the units, water would be pumped from the Columbia River and conveyed through a discharge line to the unit lands. Each unit would be serviced by a closed pipe distribution system.

The total cost of the 4 units recommended for authorization is estimated as $9,734,800 based on October 1956 price levels, all of which is allocated to irrigation except about $85,000 which is proposed as a nonreimbursable allocation for fish facilities. The water users in a 50-year repayment period would repay an estimated 59 percent of the total construction obligation. The remaining portion would be retired in less than a year from surplus revenues accruing from operation of the Chief Joseph Dam powerplant.

The proposed report was reviewed by the affected States of the Columbia River Basin, the Secretary of the Army, and other interested Federal agencies, as required by law and interagency agreement. Copies of the comments received as the result of this coordination which in general are either favorable or offer no objection, are attached.

I recommend that the plan of development for the Greater Wenatchee division of the Chief Joseph Dam project be authorized as set forth in my report. I shall appreciate having advice concerning the relationship of the Greater Wenatchee development to your program before submitting the report to the Congress for its consideration and appropriate action in accordance with the provisions of the Reclamation Act of 1939. Sincerely yours,

FRED A. SEATON, Secretary of the Interior.

VI

LETTER FROM THE COMMISSIONER OF RECLAMATION TO

THE SECRETARY OF THE INTERIOR

DEPARTMENT OF THE INTERIOR,

BUREAU OF RECLAMATION,

Washington, D. C., May 27, 1957. The SECRETARY OF THE INTERIOR.

Sir: This is my report on the Greater Wenatchee division of the Chief Joseph Dam project, Washington. It is based on and includes the proposed report which you approved and adopted on January 24, 1957.

The Greater Wenatchee division is in the Columbia River Valley between Moses Coulee on the south and Pateros, Wash., on the north. The division includes seven units which are completely separate land bodies several miles apart, thus requiring independent irrigation systems. All land would be irrigated by pumping from the Columbia River. Under each of the seven units making up the Greater Wenatchee division, water would be pumped from the Columbia River and conveyed through a discharge line to the unit lands. Each unit would be serviced by a closed pipe distribution system.

Authorization at this time is recommended for only 4 of the 7 units. These units—Howard Flat, Brays Landing, East, and Moses Coulee-comprise a total of 8,661 acres, of which 7,221 acres are not now irrigated.

Copies of your proposed report were transmitted to States of the Columbia River Basin and to the Secretary of the Army on October 4, 1956, in accordance with section 1 (c) of the Flood Control Act of 1944 (58 Stat. 887) and to the State of Washington for comments from the head of the agency exercising administration over the wildlife resources of that State in accordance with the provisions of the act of August 14, 1946 (60 Stat. 1080). Copies of the report were also furnished agencies represented on the Interagency Committee on Water Resources for their review and comment. Comments have been received from all States and agencies to which the report was sent, and copies of their comments are enclosed.

The comments in general were favorable or offered no objection. The recommendations for additional studies made by other agencies can be accommodated in the advance planning phase of project development.

Further studies made since you adopted your proposed report on January 24, 1957, indicate that on the basis of October 1956 costs and assuming operation and maintenance costs on current levels the water users would be able to repay 59 percent rather than 73 percent of the total construction obligation and that financial aid beyond the water users' ability to repay would amount to $4,205,000 rather than $2,740,250 as reported. These revisions are noted in the interests of

accuracy. They have little effect on economic justification or on payment. The proposed source of financial assistance from surplus power revenues of Chief Joseph Dam is significantly greater than that required for project repayment.

Accordingly, I recommend that you approve and adopt this report as your report on Greater Wenatchee division of the Chief Joseph Dam project, Washington, and that you transmit it together with the attached comments, to the President and subsequently to the Congress in accordance with the Reclamation Act of 1939. Respectfully,

W. A. DEXHEIMER, Commissioner. Approved and adopted June 6, 1957.

FRED A. SEATON, Secretary of the Interior.