AZ vs. CA:16 California Exhibits, Vol. XVI; Nos. 2600-2644

page 53

BUDGET BUREAU CIRCULAR A-47 AND POWER PARTNERSHIP 53 12. Responsibility for allocation of costs on multiple-purpose programs or projects For purposes of this circular, the head of the agency responsible for construction of the program or project will be considered responsible for-¦ (a) Making the initial tentative allocation of costs among the purposes to be served by a program or project. (&) Making a revised cost allocation prior to the submission of a budget estimate to initiate the program or project if the costs can be ascertained with greater accuracy at that time than at the time of submission of the project report, or if the designated use of the program or project is changed, or if the estimated costs have changed substantially. Where designated use is changed or estimated costs have changed substantially, the head of such agency shall also indicate the reasons therefor. Other agencies having responsibilities with respect to various purposes of the project, such as power marketing, rate approval, reclamation, navigation, flood control regulation, etc., shall be afforded full opportunity to consult and make their views known at both these stages in the determination of the cost allocation. IS. Reimbursement and sharing of costs For the purposes of this circular, it is essential that definite determinations be made as to which part of the financial costs of a proposed program or project will be reimbursed to the Federal Government, which will be borne by others than the Federal Government, and which will not be reimbursed. With respect to financial costs to be reimbursed and cash contributions to oe made, the proposed source of funds therefor shall be clearly indicated. Where cash contributions are required, such requirement shall be expressed as a percentage of the construction costs of the program or project, rather than in dollars. Where repayment is to oe made over a period of time, a tenative schedule of payments to be made to the Federal Government shall be established. With respect to any further financial costs to De borne by others, such as contributions of property, the nature of the cost-sharing arrangements to be entered into by the Federal Government shall be indicated. With respect to nonreimbursable costs, the authority relied upon in declaring such costs to be nonreimbursable shall be clearly indicated; where no legislative authority exists, justification shall be presented for proposing that the costs be considered nonreimbursable. 14' Length of repayment period Proposals for repayment of the Federal investment in a program or project will be reviewed in accordance with the following standards: (a) Rates and other charges for the products or services of a program or project shall be set so that repayments of the initial Federal investment in the program or project can be accomplished within a period equal to the useful economic life of the proposed program or project, but not longer than 50 years, following the date on which the head of the sponsoring agency determines that benefits from the program or project will be available to the beneficiaries. This same period of time with the same limitation shall be used for computing benefits and costs of the proposed program or project. (6) In the case of a major replacement, modification, or addition to a project, the cost thereof shall be reimbursed within (1) the estimated useful economic life of such replacement, modification, or addition; (2) the estimated remaining useful economic life of the project to which it is an addition; or (3) 50 years, whichever is least, following the date on which the head of the sponsoring agency determines that benefits from the replacement, modification, or addition will be available to the beneficiaries. In the case of a major replacement, modification, or addition to a project serving power or domestic, municipal, or industrial water supply, the unliquidated balance of the initial Federal investment allocated to such purposes, together with any unpaid interest or other expenses may be proposed for rescheduling of repayment over the same period of time as is proposed for repayment of the cost of the major replacement, modification, or addition. (c) Where a major new power or domestic, municipal, or industrial water supply project or major portion thereof is to be operated in conjunction with, or as a part of, an existing system of projects serving the same purpose or purposes, the portion of the initial construction costs of the existing system allocated to that purpose which is unliquidated at the time such new project or portion of a project is to be added, together with any unpaid interest or other expenses, may be combined with those costs of the new project or portion thereof allocated to that purpose; and the rates and charges required for the repayment of the total combined costs may be computed so as to repay these costs over the useful eco-