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COACHELLA VALLEY REHABILITATION

AND BETTERMENT CONTRACT

141 8/13 

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HEARING

BEFORE THE

SUBCOMMITTEE ON

IRRIGATION AND RECLAMATION

OF THE

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1.14c JUN 12 19 62

COMMITTEE ON

INTERIOR AND INSULAR AFFAIRS

-UNITED STATES SENATE

EIGHTY-SEVENTH CONGRESS

FIRST SESSION

ON THB

CONSIDERATION OF THE PROPOSED REHABILITATION AND

BETTERMENT CONTRACT FOR THE COACHELLA VALLEY

COUNTY WATER DISTRICT AS RECOMMENDED BY THE

DEPARTMENT OF THE INTERIOR

JUNE 29, 1961

Printed for the use of the

Committee on Interior and Insular Affairs

T.T.S. GOVERNMENT PRINTING OFFICE

83728 WASHINGTON: 1962
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS

CLINTON P. ANDERSON, New Mexico, Chairman

HENRY M. JACKSON, Washington

ALAN BIBLE, Nevada

JOHN A. CARROLL, Colorado

FRANK CHURCH, Idaho

ERNEST GIVCENING, Alaska

FRANK E. MOSS, Utah

OREN E. LONG, Hawaii

QUENTIN N. BURDICK, North Dakota

LEE METCALF, Montana

J. J. HICKEY, Wyoming

F:1 18

E

IIENRY DWORSHAK. Idaho

THOMAS H. ICUCHEL, California

GORDON ALLOTT, Colorado

JACK R. MILLER, Iowa

MAURICE J. MURPHY, .Tn., New Hampshire

JAMES B. PEARSON, Kansas

JERRY T. VERRLER, Chief Clerk

STEWART FRENCH, Chief Counsel

ROY WHITACRE, Committee Assistant for Reclamation

SUBCOMMITTEE ON IRRIGATION AND RECLAMATION

CLINTON P. ANDERSON, New Mexico, Chairman

HENIDie M. JACKSON, VaShington

JOHN A. CARROLL, Colbrado

QUENTIN N. BURDICK, North Dakota

J. J. HICKEY, Wyoming

-THOMAS H. ICUCIIEL, California

GORDON ALL-OTT, Colorado

JAMES B. PEARSON, Kansas
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JUN 12 19 62

CONTENTS

STATEMENTS

Page

Stamm, Gilbert G., Chief, Division of Irrigation and Land Use, Bureau of

Reclamation, Department of the Interior, accompanied by James K.

Carr, Under Secretary 

ComuuNicATIoNs

Anderson, Senator Clinton P.: Letter, dated February 5, 1962, to Hon.

Stewart L. Udall, Secretary of the Interior 21

Barry, Frank J., Solicitor, Department of the Interior: Memorandum to

the Secretary, dated September 13, 1961 18

Carr, James K., Under Secretary, Department of the Interior: Letters to

Senator Clinton P. Anderson dated—

July 12, 1961 17

January 11, 1962 17

Holum, Kenneth, Assistant Secretary, Department of the Interior: Letters

to Senator Clinton P. Anderson dated—

May 24, 1961 14

May 9, 1962 22

111

COACHELLA VALLEY REHABILITATION AND

BETTERMENT CONTRACT

THURSDAY, JUNE 29, 1961

U.S. SENATE,

SUBCOMMITTEE ON IRRIGATION AND RECLAMATION OF THE

COMMITTEE ON INTERIOR AND INSULAR AFFAIRS,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to notice, in room

3110, New Senate Office Building, Senator Clinton P. Anderson

(chairman) presiding.

Present: Senators Clinton P. Anderson (New Mexico), Henry M.

Jackson (Washington), J. J. Hickey (Wyoming), Thomas H. Kuchel

(California), and Gordon Allott (Colorado).

Also present: Senator Henry C. Dworshak (Idaho).

Also present: Jerry Verkler, chief clerk; Stewart French, chief

counsel, and Roy Whitacre, professional staff member.

The CHAIRMAN. The meeting of the Subcommittee on Irrigation

and Reclamation will please come to order.

We have before us at this time the consideration of the proposed

rehabilitation and betterment contract for the Coachella Valley

County Water District, California, as recommended by the Department of the Interior.

This contract is submitted in accordance with the requirements

of the Rehabilitation and Betterment Act of 1949, which provides

in part that the determinations of the Secretary shall not be effective

until 60 days after they have been submitted to the Senate and

House Committees on Interior and Insular Affairs, except that any

such determination may become effective prior to the expiration of

60 days if the committees approve at an earlier date.

Mr. Stamm, Chief of the Division of Irrigation and Land Use of

the Bureau of Reclamation, is here to answer any questions in reference to the proposal. It has received approval of Senators Kuchel

and Engle.

This is a contract and not a bill, I take it?

STATEMENT OF GILBERT G. STAMM, CHIEF, DIVISION OF IRRIGATION AND LAND USE, BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, ACCOMPANIED BY JAMES K. CARR,

UNDER SECRETARY

Mr. STAMM. That is right. This is a proposed rehabilitation and

betterment program for the Coachella division of the All-American

Canal in California. We have a contract with the district for repayment of the construction costs of the All-American Canal. That

contract was entered into in 1934. We have also a contract with

them for repayment of the costs of the distribution system entered

into in 1948. The rehabilitation and betterment program involved

here is primarily betterment.

1
2 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

Senator ALLorr. Just for the sake of the record, this is a canal

through which all of the water that belongs in Colorado empties

eventually; is it?

Mr. STAMM. Colorado River water for the Coachella division of

the All-American Canal system is diverted at Imperial Dam on the

Colorado River about 18 miles northeast of Yuma, Ariz. Following

diversion of the dam, water ftows through the main All-American

Canal is a westerly direction for approximately 36 miles to drop 1 of

the All-American Canal, where it is diverted into the Coachella main

canal.

The Coachella main canal travels in a northwesterly direction and

loops around the northern end of the Coachella service area for a total

distance of about 123 miles. The total length of the open canal

through which the water must travel from Imperial Dam to Avenue 57

on the west side of the Coachella Valley is 159 miles, of which only

the last 37 miles are concrete lined. The remaining 122 miles are for

the most part unlined except for short reaches where a clay-blanket

lining was installed during construction. The underground concrete

pipe distribution system within the Coachella Valley proper has a

total length of about 470 miles, with pipe sizes varying from about 1

foot to 7 feet in diameter.

The experience in operating the irrigation facilities has revealed a,

number of deficiencies in the canal and distribution system as constructed. The operational problems arising from these inadequacies

become more serious as additional lands are developed. The inadequacies are essentially these: lack of regulatory storage reservoir

along the main canal; lack of ability to maintain a fine and precise

control of water in its movement through this long main canal; inability to get designed deliveries through a number of farm turnout

structures; operating problems caused by accumulation of moss and

debris in the main canal; and lack of protection of facilities from storm

water in certain areas.

The CHAIRMAN. Would you not agree that this is an extremely

profitable irrigation area?

Mr. STAMM. Yes, sir; this is a good area. As I started to say a

minute ago, this is primarily betterment, rather than rehabilitation.

It is a comparatively new area. They have an excellent engineering

staff. They have maintained the system very well.

The CHAIRMAN. They have had a fantastic rise in land values.

Mr. STAMM. Yes, sir; in certain portions of the district this is very

true. These inadequacies that I have just outlined existed in substantial part at the time they actually completed construction.

Senator ALLOTT. Would you give me those inadequacies again?

One of them was turnout structures.

The CHAIRMAN. Lack of storage facilities.

Mr. STAMM. Regulatory storage; lack of fine control on water

movement through the main canal.

Senator ALLOTT. What do you mean by "fine"?

Mr. STAMM. Maintain the canal surface elevation within precise

and narrow limits; operating problems caused by accumulation of

moss and debris in the main canal; and lack of storm water protection

on the west side.

Senator ALLOTT. I have some questions I would like to ask you

with respect to these five things. Let us talk about the turnout

structures.
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

I have been actively engaged as an attorney in the management of

one of the largest canals in the State of Colorado for 25 years. Do

you mean to say that the Department has authorized—or whoever

has control of this—turnout structures for the diversion to individual

irrigators which actually interfere with the flow of the canal?

Mr. STAMM. No; inability to get designed delivery through the farm

turnout structures. We have farm deliveries that perhaps were

designed to carry, say, 20 second-feet, to divert 20 second-feet,and

we are unable to get that much water through the turnout.

Senator ALLOTT. This is ordinarily accomplished in one of two

ways, either by the changing of the point of diversion or headgate

structure, or, second, by the construction of drops. These are the

two most common methods used.

The CHAIRMAN. What about building a better turnout?

Senator ALLOTT. What do you propose to do here?

Mr. STAMM. We propose to put some checks in the main canal.

This is partly required because of a change in plan during construction. There was a plan initially to carry all of this water around the

valley to the north through the canal.

It was subsequently decided to cross the southern part via a pipeline, and that change in plan changed the hydraulics to the point that,

they have this problem. This is one of the lesser of the several problems that I enumerated, incidentally.

Senator ALLOTT. But it does exist?

Mr. STAMM. Yes.

Senator ALLOTT. It exists on every canal to some extent.

Mr. STAMM. The main changes involved in the main canal to

improve this situation would be accomplished in the course of this

program.

Senator ALLOTT. What do you mean by "storage regulatory"?

Mr. STAMM. The main storage facility for this project is the reservoir behind Hoover Dam. It is long time, a long delay, between the

time water is released there and the time it reaches this canal. It is

impossible to predict precisely what the farmers' requirements will

be day to day, and, consequently, to meet the demands—and the

demands are critical there, and they have to have water when they

need it. It is highly desirable on any irrigation project to have some

kind of a re-regulating facility within or near the irrigated area.

That means they could carry this canal at full capacity and when the

demand requires the full capacity, they make those deliveries. When

it does not require the full capacity, they can dump into this regulating

reservoir.

Senator ALLOTT. That is exactly the point. You hit it right on the

nub. These people have a right to certain flows out of the river. If

you permit them to store this water, you have increased the burden

on the river over the present rights.

Mr. STAMM. I do not think so, Senator Allott. If we do not have

the regulating device this is wasted at the end of the canal.

Senator ALLOTT. That does not matter. You have increased the

burden on the river. You cannot get away from this fact, sir.

Mr. STAMM. But this water does not get back into the river.

Senator ALLOTT. It does not matter whether it does or not. If they

cannot use it, it is not turned out and therefore, by utilizing water that

would be used in direct irrigation, direct use, if you have established
4 CONTRACT FOR COACHELLA. VALLEY WATER DISTRICT

storage facilities you have increased the burden on the river. You

cannot get away from this fact.

Mr. STAMM. I believe this will result in the conservation of water.

We have such facilities in every major irrigation project, if it is possible

at all to provide them, particularly when the main storage supply is

so far away.

The CHAIRMAN. Just help us along now. Tell me where the storage

facility is 

Mr. STAMM. Hoover.

The CHAIRMAN. I know that. We are talking now about construction of the Navajo and San Juan project in New Mexico. Where

will the storage be on that other than on the Navajo Dam itself?

Mr. STAMM. I cannot answer that, Mr. Chairman. I am not acquainted with the details.

The CHAIRMAN. Give me an example of one where you do it.

Mr. STAMM. The Boise project has Deer Flat Reservoir within the

irrigated area. The north unit of the Deschutes in Oregon has the

Hay Springs Reservoir right down at the irrigated area.

The CHAIRMAN. Did the Government do that as a betterment

project?

Mr. STAMM. They were either built initially or built immediately

following, yes; the one at Hay Springs, Oreg., was in connection with

a section 7 amendatory contract. The Pothole Reservoir in the

Columbia Basin was not included in the initial listing of facilities

when the project was started in the mid-1930's, but it was soon recognized as essential to the conservation of water.

The CHAIRMAN. One of the problems probably is that we hear so

much about how much water is wasted, dumped in the Salton Sea

and so forth.

Mr. STAMM. This will avoid that.

The CHAIRMAN. This would give you a chance to put it into beneficial use in California and so you come first in use, first in right, and

we get involved in another suit with the upper States again.

Mr. STAMM. This project is a short-water project. This would

permit them to make better use of the diversion rights which they

now have.

Senator ALLOTT. Mr. Chairman, let me comment at this point.

Mr. Stamm, this is not for the point of harassing you, understand,

but there is no question that by the use of this if they could find a

proper site and get proper structures, they could get better use of

the water.

To put it in simple terms—and these figures are not applicable

to this situation—let us assume that these people are entitled to

divert 1,000 second-feet of water, which is 2,000 acre-feet of water,

in round terms, a day. If they are unable to use this during a part

of the year, because it is short, what they are doing then is picking

up the excess in their reservoir during the times when they have

much more, so that they are actually increasing their beneficial use

of the water. Thereby, they are increasing the burden on the river',

that is to say, the Colorado River.

Now, Mr. Chairman, I do not think this is too far afield. The

Colorado Supreme Court within the last week decided this particular

case—I am not sure I have the exact figures, but I read it yesterday

afternoon—in which a storage priority of 3,000 acre-feet a year in a

small reservoir had existed for many years.
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 5

Under Colorado law, this means the right to divert and store 3,000

acre-feet annually from the 1st of January until the 1st of the following

January. In this particular case, the dam got old and the diversion

facilities got old and they reconstructed it, but in reconstructing it

they actually increased the storage capacity to 4,500 acre-feet, and the

Colorado Supreme Court said that regardless of anything else, they

were restricted in their diversion to 3,000 acre-feet a year, even if they

built a dam which was three times as tall. If you build this regulatory

dam, granted, if it is properly constructed, they will get better use of

the water that they now have, the property right to the use of water

is based upon the beneficial use and if they have not used it over a

period of years, there is a serious question as to whether or not they

have abandoned their rights to that water and you can abandon

rights, as far as I know, under the laws of every Western State, so

that if you use a dam, let us say, of 1,000 second-foot priority, they

are only using an average of 800 second-feet, which is 200 second-feet

or roughly 400 acre-feet a day. What you are doing is giving them a

right to use and store 400 acre-feet of water a day, a right which they

have not utilized and to which they have no right. There is just no

way of avoiding this.

Mr. STAMM. I would like to comment on that. I would like to run

through your analysis with some different figures.

These folks have a right to divert in their canal 1,500 second-feet,

which would be 3,000 acre-feet, and the capacity of this regulating

reservoir is only 3,500 acre-feet. That is virtually only 1 day, slightly

over 1 day's flow, so they do not have capacity to store. This is

merely fluctuation to take care of reregulation in order to make the

best use of the last drop of water in their canal. That is about what

it amounts to.

When the area was building up and they did not have all of the area

under water, they could use the canal itself to store because they could

raise and lower the fluctuation, but when they come to full use and

peak capacity there is no room to store there. They run that canal

to the full capacity, and then if something develops that there are

some turnoffs, the water is wasted out at the lower end of the canal

and goes into the Salton Sea.

I agree with your philosophy, but in this case I do not think this

results in their taking 1 acre-foot more. Certainly, it would be

infinitesimal—the amount of additional water that they would take—

because they take everything they are entitled to now, which is

1,500 second-feet.

Senator ALLOTT. What provisions have you written into the contract, if you will point them out to me, because I never saw this until

just now, for providing that this only is a regulatory storage, and not

actually a storage project?

Mr. STAMM. If there were a storage project, we would have to come

before the Congress, I am sure, with new authorizing legislation.

It is only because this is regulatory and within the operation and

maintenance facilities that we can handle it through this route.

The CHAIRMAN. I have some question whether you can handle it

through this route. What is there in the Rehabilitation and Betterment Act that allows you to construct a new storage facility which

you say by your own language is not due to deterioration, but to

83728-62-2
6 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

inadequacies in the original system? How do you get that under

the Rehabilitation and Betterment Act?

Mr. STAMM. This is a reregulating reservoir, and equalizing

reservoir, and not a storage reservoir. That is one thing. This is

an added facility within the distribution system.

The CHAIRMAN. But, this is to repair any inefficiencies of the

original system, inadequacies of the original system.

Now, if the original system was inadequate and you are constructing

something new to make it adequate, how do you do it under this act?

Why do you not have to come for approval? Who is the Congressman

from this district? Is this Mr. Saund?

Mr. STAMM. I think SO.

The CHAIRMAN. You better read what he has been saying about

the Rio Grande recently and the Colorado River in my State and in

Colorado.

Mr. STAMM. Let me refresh you memories just a little on this.

The CHAIRMAN. You do not need to do that. I have just been

reading. He has been stamping on us in season and out. Why?

Because he wants this water for the Coachella Valley.

Mr. STAMM. Our attorneys tell us that the type of work that is

proposed here can be performed under the Rehabilitation and Betterment Act. One of the reasons why some of these things were not

built initially is that the attitude of the water users toward repayment

was quite different when we were completing this project. This is

one that was shut down during the war for a long time. When it

was reopened for construction, the costs went very high. The attitude of the water users was not good toward bearing any additional

cost, and consequently some of these deficiencies which we thought

would develop were not put in here. Since that time, the attitude of

the water users has changed. They are willing to underwrite this

cost in total, to repay it concurrently with their other obligations,

actually to repay it in a little shorter time than their present repayment obligations.

Senator ALLOTT. But without interest.

Mr. STAMM. Without interest; yes, sir.

The CHAIRMAN. It is a very rich district. It is strange they need

this additional help. In Idaho I believe they have a project called

Burns Creek. It is just a dam that ought to have been built in the

initial stages, but you should see what is going on in the House committee on this. They do not look with any favor on it. You do not

repair these inadequacies that easily. I am going to take a look at

this act just to give the language.

No such determination by the Secretary shall become effective until after the

expiration of 60 days after it has been submitted to the Interior Committees.

The term "rehabilitation and betterment" as used in this Act shall mean maintenance—

This is not maintenance, is it?

including replacements—

This is not replacement, is it?

Mr. STAMM. No.

The CHAIRMAN (continuing):

which cannot be financed currently as otherwise contemplated by the Federal

reclamation laws, in the case of operation and maintenance costs, but shall not

include construction, the costs of which are returnable in whole or in part, through

construction charges as that term is defined in section (d).
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 7

What lawyer told you that this was all right? Did he write it?

Mr. STAMM. Well, all of these things are routed through our Solicitor's Office.

The CHAIRMAN. Did he give a written opinion?

Mr. STAMM. They surnamed the document, which means the same

thing.

The CHAIRMAN. What is the surname of a document? Did he

approve this as coming under this act in any written opinion?

Mr. STAMM. I do not believe we have a formal opinion on this

particular thing.

The CHAIRMAN. This is what is before us.

Mr. STAMM. But any such proposal is referred to the Solicitor's

Office, Mr. Chairman, and unless he is convinced that it does fit

under the law, then it would never pass his Office. That is what I

am attempting to say, so what he has done is tantamount to giving

his opinion that this is legally proper under the Rehabilitation and

Betterment Act, and this is primarily betterment.

The CHAIRMAN. We read what betterment is. It is maintenance,

including replacement, but it is not construction, and you want to

construct a reservoir. You say this is betterment. Would it not

be a betterment to the Colorado River project to construct the

central Arizona project? Do you think you can do it without

legislative approval?

Mr. STAMM. This is not providing for any new land, for any more

water, for any change in the basic design in the project.

The CHAIRMAN. I do not find a word in here about new land or

new water.

Mr. STAMM. If it did, it would be a new project.

The CHAIRMAN. I do not find anything about new projects in here.

Did you hear what I read a while ago?

Mr. STAMM. Yes, sir.

The CHAIRMAN. Did it say anything about new projects or new

lands?

Mr. STAMM. NO, sin

The CHAIRMAN. Then, why did you get off on that?

Mr. STAMM. It does not cover that.

Senator ALLOTT. Mr. Chairman, this is title 43, section 504, of the

United States Code Annotated.

The CHAIRMAN. Whatever you say, I am willing to take it.

Senator ALLOTT. I think, for the record, we ought to have it.

The CHAIRMAN. I do, too, but when you start talking about constructing a reregulating reservoir as part of a betterment and rehabilitation project, I think you are just way off, and we will certainly try

to find out. Will you ask the attorney to analyze this carefully and

give us a written opinion that the construction of reregulatory dams

is an improvement within the meaning of this act?

Mr. STAMM. Yes, sir; I will be glad to do that.

The CHAIRMAN. And will the 60 days run while he is looking that

up? I hope not.

Mr. STAMM. I don't recall when this started.

The CHAIRMAN. I do not know how the days run. This is dated

May 24, Mr. Secretary. I wish you would discuss this with Mr.

Udall. He can get into a red hot argument with the Congress mighty

easily this way.
8 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

Mr. CARR (Under Secretary of the Interior). Mr. Chairman, we

will certainly do that and get a written opinion from the. Solicitor.

(See memorandum dated September 13, 1961, printed later.)

The CHAIRMAN. I merely wanted to say that people come to the

Congress and say there are things like this that need to be done. We

do not need authority for that. We will just bring up contracts and

cover rehabilitation and betterment.

If that can be a device by which you can build a small storage dam,

it can be a device by which you can build a large storage dam and

can completely negate the power of the Congress to have anything

to say about its own appropriations, because this way he gives them

$7.5 million without interest to improve a district that has been

fantastic in its agricultural output and the increase in the value of

its land. I think we ought to know more about it than just this.

Mr. CARR. Mr. Chairman, we will go beyond that and issue orders

on these rehabilitation and betterment contracts that in each instance

we have some definite statement by the Solicitor on the legality of

this so this question does not arise again.

The CHAIRMAN. I would appreciate that. I think that is a proper

step to take because these things can lead to a lot of difficulty.

Senator ALLOTT. MayI follow up on this a little bit further?

The CHAIRMAN. Certainly.

Senator ALLOTT. I go back, Mr. Stamm, to the question which I

first raised about increasing the burden on the canal. You have

pointed out that this is a 1,500 second-foot diversion. I presume that

they have a right perfected under the law to divert that much from

the All-American now.

Mr. STAMM. The rights to the water in the Colorado are under the

authority of the Secretary of the Interior. They have contract

rights.

Senator ALLOTT. I presume, then, that their contract rights give

them the right to divert 1,500 second-feet?

Mr. STAMM. Yes, sir.

Senator ALLOTT. You pointed out that this is only a 3,000-foot--

Mr. STAMM. 3,500.

Senator ALLOTT. You said 3,000.

Mr. STAMM. 3,500.

Senator ALLOTT. 3,500 acre-foot capacity reservoir. Let me point

out to you this fact, because I have had in my experience specific

situations involving this question. I will refer to them in a moment.

If they utilize this 3,500 acre-feet above the 1,500 second-feet, let

us say that at a given time they can only use 100 second-feet of the

1,500 and they want to divert into the regulatory reservoir 500 secondfeet at a given time. This 500 second-feet is 1,000 acre-feet of water,

which in that particular area ought to be worth a very minimum of

$10 an acre-foot, which is $10,000. If it is at a time when it means

making or breaking of crops, the value of it cannot even be estimated.

Now, if you utilize this storage capacity several times during the

year, what you end up with is not just 3,500 acre-feet. You can

store water which they cannot use and, therefore, to which they have

no right under the present law. You can store and restore this five

or six times so that the 1,000 acre-feet which you might do under

one regulation could easily build up to 6,000, 8,000, or 10,000 acre-feet,

which is a whale of a lot of water when you need it.
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 9

I have actually seen this happen on the Arkansas with respect to

certain operations of the John Martin Dam which is about 20 miles

west of Lamar, and these cumulative regulatory diversions in the

course of 1 year cost the company in which I was interested 15,000

acre-feet of water during that year, which happened to be a very

critical year as far as water was concerned, and there simply was

no way of measuring the ultimate value that would have accrued

to the farmers under the amity system that year in terms of what

this 1,500 acre-feet of water would have meant to them, because

roughly it would have meant almost a half an acre-foot of water to

each and every one of them under that system, so the recurrent use

of this can be a very, very important thing and what is classed as a

regulatory reservoir can actually turn out to be a periodic storage

reservoir which will increase their use of water over their actual rights

and actually place an additional burden on the river.

Mr. STAMM. May I comment on that remark?

Senator ALLOTT. Certainly.

Mr. STAMM. When they are not diverting to full capacity, because

of the size and length of this canal, they can store water in the canal

itself, which they have been doing.

Senator ALLOTT. And which they have a right to do.

Mr. STAMM. Right. The only time they need this and would use

this would be when they are diverting at maximum capacity and then

any wastes are lost to the Salton Sea. They irrigate down there 12

months out of the year and I believe they will from here on be diverting

at maximum capacity a large part of the year. This is beneficial.

Certainly, it is beneficial or we would not be anxious to have it and

they would not, but it is beneficial in the peak diversion periods because in less than peak diversions they can get that storage in the canal

itself, so that minimizes the use that would be made of this in your

theorizing on the use and reuse. - -

Senator ALLOTT. Let us go to the next item, which is the lack of fine

control. I have never known of a ditch system which could maintain

an absolutely perfect control of the ditch and I know that no ditch

can do it.

If a man is entitled to 2 second-feet at his weir, there is no way in

the world you could control any ditch in order to guarantee delivery of

2 second-feet at his weir. You know this. This is true.

Mr. STAMM. Yes, sir. I have spent many years in the field. We do

have devices now in operation in many cases where we control the level

of large canals to a very small fluctuation, and by small I mean much

less than a tenth of a foot, down in some cases to close to a hundredth.

Senator ALLOTT. You do not do that on a river where the flow of

the river fluctuates. You can only do it where you have a fairly

steady supply of water to your canal as from a large reservoir such as

you have.

Mr. STAMM. And that is what we are talking .about here, in this

long canal maintaining a precise level on the canal itself.

Senator ALLOTT. You talk about problems of moss and debris.

Moss and debris are things that—both of which should be taken care

of under the daily maintenance of a canal.

Mr. STAMM. The distribution system, remember

'

is a closed pipe

system here and all the water is metered through flow meters and

m,oss is very detrimental to the precise measurement of water.
10 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

Senator ALLOTT. You say the distribution system from the Coachella Canal?

Mr. STAMM. From the main canal throughout the system is all

through closed pipe. The district has built a very large demossing

device. It is a tremendous thing. It will handle about half the

capacity of the main canal. The district in addition has provided

all of its own drainage facilities down there which amount to about

$23 million. They have paid that cost currently out of income. That

is a cost that normally is a cost of construction and is capitalized.

The district has an excellent record of using its own funds and

ingenuity to do these things.

Senator ALLOTT. Wait a minute.

Mr. STAMM. What I am saying is that we need to about double

the capacity of demossing devices which they have already built.

Senator ALLOTT. Drainage problems usually arise after construction.

Mr. STAMM. But all the recent authorizations—and when I say

"recent," I go back a good many years—have made some provision,

nevertheless, for the main project backbone drainage system as a part

of construction cost. We recognized quite a long time ago that removal of water is about as important as putting it in in a distribution

system.

Senator ALLOTT. Let us go to the next one, the lack of storm protection, and I want to know what you mean by that. I assume that

you mean protection from cloudbursts or something of that sort that

would cause an inordinate burden upon the canal in sudden doses. Is

that what you mean?

Mr. STAMM. This is primarily that kind of storm in the hills to the

west that lie between this valley and the coast. It could be a high

runoff in there which would do considerable damage to the canal as

well as the distribution system.

Senator ALLOTT. One further question. This I understand, is a

very prosperous area. The fact that they are able to irrigate 12

months out of the year and utilize the water is some indication of this.

We, by this contract, would be putting up in excess of $7 million,

assuming that it does come under the statute, which I do not believe

it does, but why cannot these people, for betterment, go to a bank for

cooperatives, or other sources, to get the money and pay the interest

on it? Why should the Government subsidize this betterment program at this time at an interest-free rate?

Mr. STAMM. Well, the district's payments to United States under

the two existing contracts currently amount to nearly $400,000 a year.

Those costs by 1978 will increase to over $800,000 a year. During

this period of graduation they have had some additional ability to

pay and they have used that in putting in $23 million worth of .elrainage facilities and building this large demossing equipment.

Senator ALLOTT. The Government advanced the money for that?

Mr. STAMM. No, sir. They paid that with their current operation

and maintenance money. We did not advance any money for the

drainage, or demossing, or other improvements. To do these things,

if they were to get this from other sources and pay interest, would

require payments that would exceed their payment ability. These

payments can be made in the manner scheduled within their calculated

payment capacity. They will continue with the drainage program.
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 11

The CHAIRMAN. I think they should, though, because that is a

very rich district and if they cannot pay what they need how could

you expect areas that raise only alfalfa to do that? I do not know.

Mr. STAMM. Of course, they are paying much higher per acre.

The CHAIRMAN. They get a whole lot more per acre.

Senator ALLOT. I think this answers all but one question. That is,

how many acres are farmed under this whole project?

' Mr. STAMM. About 50,000 so far.

The CHAIRMAN. 70,000 off the water?

Mr. STAMM. Yes.

Senator ALLOTT. What would be the average price of land per acre

under this system?

Mr. STAMM. I do not have that figure. Land values there vary

widely. They raise some dates, as you know.

Senator ALLOTT. No, I do not know. I do not know this district.

Mr. STAMM. They do raise dates in this area and the date lands

have a very high value. That is because of the establishment of the

palm trees. It takes a long time to establish them.

Senator ALLOTT. What do they grow here primarily?

Mr. STAMM. They grow lots of vegetable crops, but they also have

quite a large acreage in alfalfa.

Senator ALLOTT. Do you have any way of telling me what alfalfa

land would sell for and what, generally, vegetable crops would sell for?

I ask this question because I have never seen this land.

The CHAIRMAN. $1,000 an acre is a reasonable price on alfalfa, is it

not, up to $2,000 and $3,000?

Mr. STAMM. Well, I am sure that the date land would go for that

or more.

The CHAIRMAN. But they do involve a long period of waiting until

the crop is up.

Mr. STAMM. I thought maybe I had some figures here on some of

these things. They show the estimated alfalfa yield is 7.7 tons, which

is a mighty good yield.

Senator ALLOTT. I should say it is.

Mr. STAMM. They have virtually a 12-month growing season, a

long season.

The CHAIRMAN. They never take off less than five crops.

Mr. STAMM. That is right.

Senator ALLOTT. I have just been handed a note. It says that,

in one instance, they know of 11 cuttings of alfalfa a year and in my

State we consider ourselves lucky to get 3, and the third is pretty short.

Senator. HICKEY. We are lucky to get two.

Senator ALLOTT. And I expect that is true.

Mr. STAMM. I have a figure here of average land investment value

of $550.

The CHAIRMAN. In order that the record may be somewhat complete on this, I would like to have it show here that the chairman, at

least, requests the representatives of the Interior Department to call

to the attention of the Secretary the possibility that this is not the

type of work contemplated in the passage of the original act. The

bill was passed in 1949. Senator O'Mahoney discussed the purpose

of H.R. 1694, which the Senate was acting upon. I was a member of

the committee at that time. We had testimony from the then
12 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

Secretary of the Interior, J. A. Krug. I think that what he said is of

some interest now because he said:

Primarily because of labor and material shortages immediately prior to and

during World War II, many items of irrigation project maintenance were of

necessity deferred. Immediately after the war, a portion of the funds appropriated to the Bureau of Reclamation for general investigations was used for a

survey of all existing Bureau projects in order to determine, with estimates of

costs, the work necessary to place each project in first-class operating condition.

This was a situation that arose because of a war period in which

people could not get the things with which to repair their own projects.

The letter from the Department of the Interior, dated May 24, says:

The need for rehabilitation and betterment work at this time does not arise

from deteriorated irrigation works and structures—

the very thing that was the purpose of the bill, so that you want to do

something that the bill did not contemplate and was not expected

to do. Then I go back to it:

does not arise from deteriorated irrigation works and structures, but rather is due

to certain inadequacies in the original system. Some potential inadequacies

were recognized at the time of original construction but corrective works were

not included due to cost considerations.

That has been brought out by the fact that at that time, they did

not know there was going to be a very profitable agricultural economy

in the Coachella Valley. The language of the act itself allows the

Secretary to make this determination, but says:

No such determination of the Secretary of the Interior shall become effective

until after the expiration of 60 days after it has been submitted to the Committee

on Interior and Insular Affairs of the Senate and to the Committee on Public

Lands of the House of Representatives.

I presume that is in order to permit the two committees by resolution to disapprove this type of contract if it is so desired.

Then the definition:

The term "rehabilitation and betterment" as used in this Act shall mean

maintenance, including replacements which cannot be financed currently as

otherwise contemplated by the Federal reclamation laws in the case of operation

and maintenance costs, but shall not include construction, the costs of which are

returnable in whole or in part through construction charges as that term is defined

in section 2(d) of the Reclamation Act of 1939.

I think when the letter from the Department of the Interior points

out that this is not the thing contemplated by the law, but is construction that should have been made originally but was deferred because

the farmers were not willing to accept the high per acre charge that

would have been involved had the construction been done originally,

the Secretary has himself just ruled the thing out from any possibility

of construction under this act.

I hope that the Secretary may give us some assurance that he will

not proceed under this contract until the committee has had a reasonable time to take a look at it and examine the law carefully. I guess,

Senator Kuchel, you were not here when the matter came up of the

Coachella Valley Water District in your State, a $7.5 million rehabilitation contract, which involves the construction of storage facilities

not contemplated, I do not believe, by the original act. I know, I

hope, a little something of the history of that act. We have had

many discussions of it. It is not to be used as a device to bring in

construction not in at the time of the original construction, but only
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 13

where there was, at that time, an inability to get materials. We could

not get timber for turnouts. We could not get tin to put down there.

We could not get anything to take care of these turnouts. You did

the best you could; patched them up with crates from groceries, and

things of that nature. When the war was over, it was anticipated

that those districts would go back and rehabilitate these structures

that they had not been able to handle during the war, but I do not

believe anybody ever contemplated a re-regulating dam would be

constructed under this. There is no language in the report of Secretary Krug that would give much support to that.

Mr. STAMM. I would like to make it clear that we certainly have

no desire or intention to recommend things that are not provided

by law, and that is the very reason we carefully spelled out in this

letter exactly what this is. This is the type of thing that we left to

be performed by the district as maintenance items and they have

gone a long way, as I say, in the demossing phase and in the drainage

phase. These other things are coming on rapidly and to do them

with interest-bearing money puts it beyond their ability, and it was

in that light and in that background that we reasoned these in, but,

as the Under Secretary said, we certainly shall provide you with a

statement from the Solicitor's Office.

Senator KUCHEL. Mr. Chairman, I do want to say that I was

unaware of any problem with respect to the matter before us and

when my office was told that some question had been raised, I left the

other committee which I was attending to come here.

Let me ask, if I may—I am not sure this is repetitious—is the

position of the Department of the Interior that its approval of the

Bureau's repayment contract with the Coachella County Water District is valid under this legislation? Is that so?

Mr. STAMM. Yes, I said I thought it was because these things had

been cleared by our Solicitor's Office. In your absence, we told the

committee we would furnish an opinion and Under Secretary Carr

said he would furnish the committee with an opinion from the Solicitor

specifically on that question.

• Mr. CARR. Senator, may I answer?

Senator KUCHEL. Yes, indeed.

Mr. CARR. Let me say two main points have been brought up.

One is whether this legally can be put under this particular act, and

the other one is, and the chairman raised it, why in this rich area is

this beyond the ability of the farmers?

These two points have not been thoroughly answered and if it

would meet with the approval of the subcommittee, I would suggest

that this matter be withdrawn until these matters are answered.

The CHAIRMAN. I think that would be the proper way, Senator

Kuchel.

Mr. CARR. Otherwise, we are discussing this matter without the

facts that we need to have here.

The CHAIRMAN. I am sure that they will find that the Coachella

Valley is not only in itself a rich valley; it has some very rich people

living in the valley, and while that does not necessarily measure their

ability to handle this, if there is any question as to a little heavy

stretching of the law, I think this is a good time to raise it.

Undoubtedly, the present Solicitor of the Department of the

Interior is relatively new to his position. He may not understand
14 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

the basis on which this act was originally passed. This was really

war legislation. They have not been able to keep up with these

things. You can recall very well during the war period, you could

not get plumbing fixtures for a house.

I started the construction of a home in Albuquerque and I had the

adobe walls up and we lived in those adobe walls. We could not get

a way to finish the house. Irrigation districts were no different.

They could not get the things. They could not repair bridges properly. They could not do any of the things because timber was needed

for these things.

Mr. CARR. Mr. Chairman, I might tell the Senator, too, that we

told you that in the future, including this one, rather than have a misunderstanding about the legality of it, I will see that we have some

instructions that a separate Solicitor's opinion will accompany any

report, so that it is very clear that he believes this is, or is not, within

the act. It has not been done in the past. It has been a general

approval through the offices, without notifying the committee that

there is a written opinion by the Solicitor.

Senator KUCHEL. Is there in this instance, Mr. Secretary, an

opinion by the Solicitor with respect to this problem of legality?

Mr. CARR. I understand this came up by being processed through

the Solicitor's office, that either the Solicitor or his staff approved it,

it was sent on, and there is probably no written opinion as to the

point that was raised by the chairman.

The CHAIRMAN. We will clear this up.

Before leaving this matter, without objection, I will place in the

record this letter of May 24, 1961, from the Department.

(The letter referred to follows:)

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY,

Washington D.C., May 24, 1961.

Hon. CLINTON P. ANDERSON,

Chairman, Committee on Interior and Insular Affairs,

U.S. Senate, Washington, D.C.

DEAR SENATOR ANDERSON: In compliance with the act of October 7, 1949,

as amended (63 Stat. 724; 64 Stat. 11), I submit herewith my determination relating to the return of rehabilitation and betterment funds proposed for expenditure on behalf of the Coachella Valley County Water District, All-American

Canal system, Boulder Canyon project, California.

An urgently needed rehabilitation and betterment program in the Coachella

Valley County Water District is proposed for initiation during fiscal year 1962.

Before expenditures for such work are authorized, however, compliance must be

had with Public Law 335, 81st Congress, 1st session, which reads, in part, as

follows:

,,* * * expenditures of funds hereafter specifically appropriated for rehabilitation and betterment of irrigation systems on projects governed by the Federal

reclamation laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory thereof

or supplementary thereto) shall be made only after the organizations concerned

shall have obligated themselves for the return thereof in installments fixed in

accordance with their ability to pay, as determined by the Secretary of the Interior in the light of their outstanding repayment obligations, and which shall,

to the fullest practicable extent, be scheduled for return with their construction

charge installments or otherwise scheduled as he shall determine."

The Coachella Valley County Water District, which encompasses the lands

which are served by the Coachella division, All-American Canal system, is

located in Riverside County, Calif., and lies northwesterly of the Salton Sea.

The Boulder Canyon Project Act (45 Stat. 1057), approved December 21, 1928,

authorized construction of an All-American Canal to the Imperial and Coachella

Valleys, Calif. Under authority of this act, a contract was executed between

the United States and the Coachella Valley County Water District on October
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 15

15, 1934, which provided for construction of 1,500 cubic feet per second capacity

in the All-American Canal system for the benefit of lands located in the Coachella

Valley. On December 22, 1947, a supplemental contract was entered into with

the district which provided for construction by the United States of an underground distribution system designed to ultimately serve approximately 78,500

acres of irrigable land. However, at the present time only slighlty over 70,000

acres can be served water from the irrigation system for agricultural purposes.

The remaining lands to be served are primarily Indian owned, and pursuant to

the act of August 28, 1958 (72 Stat. 968), extensions to the distribution system

to serve such land will be constructed only when so requested by the Indian

owners. At the present time, approximately 54,000 acres under the distribution

system are being irrigated.

Construction of the Coachella main canal was completed in 1948 and the distribution system was completed in 1954. All works of the Coachella division

have been transferred to the Coachella Valley County Water District for care,

operation, and maintenance. In addition to carrying out operation and maintenance activities in a creditable manner, the district has made extensive capital

improvements to the system. Included among such improvements is a system

of surface and undergound drainage tile collector lines capable of receiving

drainage water from about 45,000 acres of irrigable land, installation of moss

screens at various points on the main canal, and remedial work on the distribution system laterals necessary to control a serious surging condition. Expenditures by the district on the foregoing capital improvements approximate

$2,500,000, all financed from current revenues. The district has been able to do

this because repayment of construction charges under the existing contracts has

been relatively light to date. The district contemplates a continuing improvement program utilizing current revenues but it will be limited in the amount of

work that it can do because of the increasingly heavy annual obligations becoming

due under the repayment contracts of October 15, 1934, and December 22, 1947.

As of December 31, 1960, the amount outstanding on the October 1934 contract

was $12,516,463 and the amount outstanding on the December 22, 1947, contract

was $13,367,388. Completion of repayment is scheduled in the year 2002. The

total construction repayment installment under these two contracts currently

is at the rate of $378,707 per year, with gradually increasing amounts until the

maximum annual installment of $808,757 is reached in 1978. The district is

current in the payment of its obligations under the foregoing contracts.

The need for rehabilitation and betterment work at this time does not arise

from deteriorated irrigation works and structures, but rather is due to certain

inadequacies in the original system. Some potential inadequacies were recognized

at the time of original construction but corrective works were not included due to

cost considerations. Other deficiencies were not known until their presence was

brought to light under actual operating conditions. The underground distribution

system was the first of its size and magnitude constructed by the Bureau of Reclamation. Operational characteristics under field conditions have not conformed

to the expectations indicated by design and laboratory studies. The most serious

inadequacies are the lack of a regulatory storage reservoir, lack of fine control on

various structures of the main canal, inability to attain designed deliveries through

many farm turnouts, unexpected operating problems caused by moss and debris

in the main canal, and lack of adequate storm protective works in certain localities.

The program of rehabilitation and betterment proposed to be accomplished

under the authority of the act of October 7, 1949, as amended, includes the purchase and installation of supervisory remote control equipment for major water

control points, purchase and installation of additional automatic demossing

equipment, installation of an additional structure and gate in the Coachella main

canal, rehabilitation of an existing gate and structure, provision for a terminal

regulating reservoir with appropriate inlet and outlet structures, and the completion of some badly needed storm water protective works. The estimated cost

of the foregoing work is $7,150,000, and it is scheduled for accomplishment over

a 4-year period from fiscal year 1962 through fiscal year 1965, inclusive. The

fiscal year 1962 budget submittal to the Congress includes $650,000 to initiate

the work.

Under the proposed program, work would be performed by or at the direction

of the Coachella Valley County Water District with funds advanced by the

United States in accordance with general administrative and technical procedures

established in connection with other rehabilitation and betterment projects being

carried out pursuant to the aforesaid act. Where the interest of the United

States so requires, the engineering designs, plans, and specifications for any item
16 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

or items of work proposed to be accomplished under the program shall be prepared

by the United States. All rehabilitation and betterment work undertaken by the

district under this contract is subject to inspection and approval by the Bureau of

Reclamation.

The proposed contract with the Coachella Valley County Water District pro- vides that in the event the funds advanced by the United States prove to be

insufficient to complete the work contemplated or initiated, the completion of

said work shall be the responsibility of the district. This provision is considered

necessary since further detailed engineering studies of the work to be done may

indicate changes that would result in significant cost increases.

Annual installments to pay for the $7,150,000 program would be made concurrently with installments on the basic construction repayment contracts. The

enclosed draft of repayment contract provides for repayment at the rate of $238,-

333 annually, with the first installment to be due and payable on December 31

of the year in which the Secretary gives written notice to the district that the work

program is substantially completed, or on December 31, 1966, whichever is sooner.

Repayment of a loan in the amount of $7,150,000 would be accomplished in 30

years with the final payment coming due in 1995, which is 7 years prior to the

time when the final payment is due under the construction repayment contract of

December 22, 1947. Should less than $7,150,000 be made available to the district, the repayment period would be proportionately shorter.

An ability-to-pay analysis for the Coachella division, All-American Canal

system, supports the proposed payment schedule as outlined above and I have,

therefore, determined that—

(1) Repayment of the rehabilitation and betterment loan in annual installments at the rate of $238,333 will be in accordance with the ability of the

Coachella Valley County Water District to pay;

(2) The work for which the rehabilitation and betterment funds are to be

expended in the Coachella Valley County Water District is not construction within the meaning of the Reclamation Project Act of 1939 (since

no additional lands are to he served), but is maintenance, betterment, and

improvement work, including replacements which cannot be financed currently as otherwise contemplated by the Federal reclamation law in the case

of operation and maintenance costs; and

(3) The rehabilitation and betterment work program is essential and is in

the best interests of the United States.

Accordingly, the foregoing determinations are being submitted pursuant to the

requirements of the Rehabilitation and Betterment Act of October 7, 1949, as

amended, which provides in part that the determinations of the Secretary shall

not be effective until 60 days after they have been submitted to the Committee of

the House and the Committee of the Senate on Interior and Insular Affairs when

Congress is in session, except that any such determination may become effective

prior to the expiration of 60 days if such committee approves an earlier date and

notifies the Secretary in writing of such approval.

An identical letter on this matter is being sent to the Committee on Interior

and Insular Affairs of the House of Representatives.

Sincerely yours,

KENNETH HOLUM,

Assistant Secretary of the Interior.

Senator ALLOTT. Mr. Chairman, may I ask one question for my

own information? What is the corporate structure of the users of

this water? Is it an irrigation district organized under the laws of

California, is it a mutual ditch company type of thing, or what is it?

Mr. STAMM. It is called the Coachella Valley County Water

District.

Senator ALLOTT. Organized under the water district laws of

California?

Mr. STAMM. Yes, sir.

The CHAIRMAN. Thank you, Mr. Stamm.

(Whereupon the subcommittee proceeded to other business.)

(The following correspondence pertaining to Coachella was ordered

printed:)
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

Hon. CLINTON P. ANDERSON,

Chairman, Committee on Interior and Insular Affairs,

U.S. Senate, Washington, D.C.

DEAR SENATOR ANDERSON: At the hearing of the Senate Committee on Interior

and Insular Affairs on June 29, 1961, concerning the proposal for rehabilitation

and betterment of the Coachella Valley County Water District, All-American

Canal system, California, questions were raised as to the authority by which

funds would be made available pursuant to the act of October 7, 1949, as amended

(63 Stat. 724; 64 Stat. 11).

On May 24, 1961, we submitted our determinations relating to the return of rehabilitation and betterment funds by the Coachella Valley County Water District. In accordance with the understanding reached with the Senate Interior Committee, we are herewith withdrawing the submittal made on May 24, 1961, pending a review by the Solicitor of the work proposed to be carried out pursuant

to the provisions of the act of October 7, 1949, as amended. Following receipt

of the Solicitor's views, we will write the committee again.

Sincerely yours,

17

Ii011. CLINTON P. ANDERSON,

Chairman Committee on Interior and Insular Afiairs,

U.S. Senate, Washington, D.C.

DEAR SENATOR ANDERSON: During the hearing of the Senate Committee on

Interior and Insular Affairs on June 29, 1961, questions were raised by the committee concerning the proposal for rehabilitation and betterment of the distribution

system works for the Coachella Valley County Water District, All-American

Canal system, California. Principal questions related to the authority by which

funds would be made available pursuant to the act of October 7, 1949, as

amended (63 Stat. 724; 64 Stat. 11).

Our letter of July 12, 1961, withdrew the Department's submittal of May 24,

1961, pending a review by the Solicitor of the work proposed to be carried out.

We are pleased to advise you that the Solicitor has reviewed the Department's

proposals, and a copy of the opinion is attached. We have awaited resumption

of the 87th Congress before submitting this opinion to the committee.

We are also furnishing copies of the opinion to Senator Kuchel at his request.

Sincerely yours,

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY,

Washington, D.C., July 12, 1961.

JAMES K. CARE,

Under Secretary of the Interior.

M-36621

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY,

Washington, D.C., January 11, 1962.

JAMES K. CARR,

Under Secretary of the Interior.

SEPTEMBER 13, 1961.

PROPOSED CONTRACT WITH THE COACHELLA VALLEY COUNTY WATER DISTRICT

FOR REHABILITATION AND BETTERMENT WORK, COACHELLA DIVISION, ALLAMERICAN CANAL SYSTEM

Bureau of Reclamation: Rehabilitation and betterment.

Work undertaken pursuant to the Rehabilitation and Betterment Act of

October 7, 1949 (63 Stat. 724), is to provide a means whereby such work in

the nature of deferred maintenance can be financed over an extended

period and not as an annual operation and maintenance charge. The work

is usually of a type that does not provide substantial additional water or

provide for irrigation of substantial areas of new lands.

Bureau of Reclamation: Rehabilitation and betterment.

A regulating reservoir constructed for the purpose of improving operations of

the irrigation system is a facility associated with operation and maintenance, and would not be considered in the nature of supplemental

construction.
18 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

Bureau of Reclamation: Rehabilitation and betterment.

The fact that such regulating reservoir could have been included in the works

originally constructed does not rule it out as proper work undertaken as

deferred maintenance pursuant to the Rehabilitation and Betterment Act.

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SOLICITOR,

Washington, D.C., September 13, 1961.

M-36621.

Memorandum.

To: Secretary.

From: Solicitor.

Subject: Proposed contract with the Coachella Valley County Water District for

rehabilitation and betterment work, Coachella division, All-American Canal

system.

The Under Secretary's memorandum of July 12 referred to a question raised at

a hearing before the Senate Interior and Insular Affairs Committee on June 29,

1961, concerning the proposal for rehabilitation of works of the Coachella Valley

County Water District. The question that was raised was whether the work

proposed was authorized in accordance with the provisions of the Rehabilitation

and Betterment Act of October 7, 1949 (63 Stat. 724), with particular reference to

the construction of a 3,500 acre-foot regulating reservoir. This was considered

by our Office at the time we reviewed the proposed contract and we then concluded

that the works came within the scope of that act.

We have again reviewed all of the work proposed pursuant to the report of the

Bureau of Reclamation dated February 1961 which accompanied the transmittal

to the congressional committees. We reaffirm our earlier conclusion.'

The Rehabilitation and Betterment Act defines "rehabilitation and betterment"

as "maintenance including replacements, which cannot be financed currently,

as otherwise contemplated by the Federal reclamation laws in the case of operation and maintenance costs, but shall not include construction, the costs of which

are returnable * * * through construction charges, as that term is defined in

section 2(d) of the 'Reclamation Project Act of 1939."

The purpose of the act is to provide a practicable means of repayment of the

costs of major rehabilitation and maintenance programs which cannot be met

currently as is the usual requirement for operation and maintenance under the

Federal reclamation laws. The act was designed to ease repayment problems

in order to make it possible to maintain Federal reclamation projects in normal

operating condition and to incorporate into such projects modifications considered desirable on the basis of advances in engineering knowledge and techniques. The Rehabilitation and Betterment Act is, therefore, a remedial measure

and comes within that class of statutes which are to be construed liberally,

rather than narrowly, in order to accomplish their objectives.2

Criteria used administratively for considering work pursuant to the act usually

start with the premise that no new lands would be served and no additional water

supply would be furnished. Using this as a first premise ordinarily serves to

distinguish the work from what would be called supplemental construction for

the purpose of providing additional water or for serving additional lands.

The regulating reservoir proposed under the Coachella work program does not

contemplate the furnishing of additional water or serving additional lands, but is

primarily the facility that will prevent the district from wasting water unnecessarily in the operation of the canal and distribution system. Because of the

length of the system for delivery of water, both in the channel of the Colorado

River after its release from Hoover Dam and after it is diverted at Imperial Dam

into the All-American Canal, changes in the pattern of orders for water delivery

often result in having a larger supply of water available than can be utilized on

the lands. This requires the district to waste the water out of the system. Thus

the regulating reservoir is designed to avoid wastage of water by enabling a

higher degree of operational control. In the water-short West, the saving of

water is always desirable. In the context of a water supply dependent upon the

I Most of the work proposed provides for control of water movement under an operation and maintenance

program elimination of moss, and protection of works through construction of dikes. As to this work there

appears to be no question that it is of the type that is usually undertaken by the Bureau of Reclamation

pursuant to the Rehabilitation and Betterment Act of 1949.

2 United States v. Southern Pacific R. Co., 184 U.S. 49; United States v. Colorado Anthracite Co., 225 U.S.

219; Gertgens v. O'Connor, 191 U.S. 237,
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 19

Colorado River, practicable means of avoiding water waste in project operations

are more than merely desirable; they must be considered a necessity.

A review of past rehabilitation and betterment contracts entered into by the.

Department discloses one other case in which a somewhat similar reservoir was

included. The contract of June 15, 1958, with the South Ogden Conservancy

District in Utah covered the construction of 4 miles of coated steel and concrete

pipe and also for the construction of a concrete-lined equalizing reservoir with a

capacity of 11.5 acre-feet. This reservoir was constructed for the purpose of

permitting orderly deliveries of water to this small system and also for the purpose

of eliminating the wasting of water when delivery orders would be changed.

This case is similar and varies only as to size. There the project covers only some

3,259 acres of land with a very small supply system. Coachella, on the other

hand, is served through the All-American and Coachella branch canals, 159 miles

in length, with an allocated capacity of 1,500 cubic feet per second to serve an

area of 68,000 acres. Obviously, project works must be of a size proportionate

to the particular need.

Another case, and one which illustrates the broad scope that has at times been

given to the Rehabilitation and Betterment Act, is the work done under the act

for the Medford and Rogue River Valley Irrigation Districts. These two districts

were not Federal reclamation projects and, therefore, were brought under the

Rehabilitation and Betterment Act by a special act of Congress, the act of August

20, 1954 (68 Stat. 752). The work involved was to rehabilitate their systems

solely for the purpose of making them capable of accepting and using 9,000

acre-feet of additional water that was to be furnished from the Rogue River

project, with the result that some additional lands were to be irrigated. The

presentation to Congress by the Department shows that the work was considered

to be of the type falling under the Rehabilitation and Betterment Act, and that

congressional authorization was needed not because of the type of work, but

because the districts would not otherwise be eligible since they were not a Federal

reclamation project. There is no indication that the Congress considered that it

was doing anything more in passing the authorizing legislation than enabling the

two districts to be treated as a Federal reclamation project for work considered

to be within the scope of the Rehabilitation and Betterment Act. Thus, with

congressional concurrence, the act has been considered as covering not merely a

case like that of the Coachella equalizing reservoir which involves prevention of

waste of water, but one which involves the provision of an added water supply

and the adding of irrigated lands.

Nampa and Meridian Irrigation District v. Bond (268 U.S. 50 (1925)) removes

any doubt that work of the nature of that hereunder consideration may properly

be classed as maintenance rather than as construction.

That case involved the Boise Federal reclamation project. The plaintiff district,

was a part of that project representing the landowners within the district boundaries.

A drainage system had been constructed as a part of the original undertaking and

the costs included in the construction charges allocated to the lands within the

district. Later, a need for additional drainage developed and the Secretary of

the Interior authorized the construction of this additional drainage, the cost

being assessed to the landowners as an operation and maintenance charge. The

irrigation district contended that this was additional construction and that it

could not be charged for this work as an operation and maintenance charge and

brought suit to compel the Government to deliver water notwithstanding the

district's refusal to collect and pay the charge for the work. The district court,

the Circuit Court of Appeals, and the Supreme Court held that the work was

properly chargeable as operation and maintenance. The Supreme Court said

(268 U.S. 50, 54) :

"Expenditures necessary to construct an irrigation system and put it in condition

to furnish and properly to distribute a supply of water are chargeable to construction; but when the irrigation system is completed, expenditures made to maintain

it as an efficient going concern and to operate it effectively to the end for which

it was designed, are, at least generally, maintenance and operating expenses. The

expenditure in question was not for extensions to new lands or for changes- in or

additions to the system made necessary by faulty original construction in violation

of contractual or statutory obligations, Twin Falls Co. v. Caldwell, 272 Fed. 356,.

359; 266 U.S. 85, but was for the purpose of overcoming injurious consequences

arising from the normal and ordinary operation of the completed plant, which,

so far as appears, was itself well constructed. The fact that the need of drainagefor the district lands, already existing or foreseen, had been supplied and the cost

thereof charged to all the water users as a part of the original construction, by no.

means compels the conclusion that an expenditure of the same character, the
20 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

necessity for which subsequently developed as an incident of operation, is not a

proper operating charge. The same kind of work under one set of facts may be

chargeable to construction and under a different set of facts may be chargeable

to maintenance and operation." (The emphasis is by the Court.)

Even more instructive as to the sweep to be accorded the term "operation and

maintenance" are the remarks of Judge Dietrich in the district court's opinion

in this case:

"There is the further contention that this is not a proper charge for 'operation

and maintenance.' These terms are found both in the Reclamation Act, as

amended, and the contract between the plaintiff district and the United States.

They are of elastic and often indefinite import. In systems of accounting, especially of public service corporations, what should be entered as capital or construction, and what as operation and maintenance, is not infrequently a question

of great difficulty, and is sometimes susceptible of only an arbitrary answer. If

in strictness we undertake to apply the narrow view advanced by the plaintiff

that the maintenance of an irrigation system is accomplished by 'merely maintaining the status quo' of the physical plant, we are soon driven to absurdities. If a

wooden headgate rots out, we could not replace it with one of concrete, though

satisfied that in the long run it would be economy so to do. If there turns out

to be excessive seepage in a section of the canal, it cannot be prevented by puddling or otherwise treating the canal to prevent waste, for that would be to change

the status quo. If there is a break in the earth bank of the main canal on a hillside, however great the danger of a repetition of the break, and however prudent

it would be to reinforce the earth with a concrete lining, thus insuring against

future disaster, such a course would be to alter the status quo, and therefore

could not be followed without putting into motion the complicated machinery

required for raising money for new construction work. Illustrations without

number of the inadequacy and impracticability of such a view will readily occur

to anyone who has observed the operation of a large irrigation system, either at

close range or from a distance. The Government has fixed the construction

charge upon this system, under the law, and it cannot now add to it without the

consent of a majority of all of the water users. If, in the management of this

great system, with its hundreds of miles of canals, its dams and gates, and a multitude of devices for diverting, impounding, carrying, and distributing water, it

cannot in an intelligent way provide for new conditions, or in the light of experience make new and better provision for old conditions, by charging the reasonable

expense thereof to maintenance and operation, the value and efficiency of the

system would be greatly impaired. Surely such a result could not have been intended by Congress, or by the parties to the contract here involved. The terms

'maintenance' and 'operation' must have been used in a broader sense—a meaning

perhaps not susceptible to precise and comprehensive definition, but nonetheless

well understood" (283 Fed. 569, 571-572).

The same reasoning applies to the question herein presented as to the regulating

reservoir and leads to the conclusion that while it could have been constructed

as a part of the original construction and the costs charged as a construction

charge, it is entirely appropriate to build it as an operating facility with the costs

charged as operation and maintenance and thus eligible for repayment under the

provisions of the Rehabilitation and Betterment Act.

That to some degree "potential inadequacies" in the Coachella system were

recognized at the time of original construction,3 does not, in my opinion, diminish

the authority of the Secretary to determine that the work is properly maintenance,

construction having been completed under the repayment contracts. Whether

the regulating reservoir is in the category of an originally recognized deficiency

is not clear. In any event, however, the Secretary has discretion to determine

the extent to which project facilities of a nature which do not themselves significantly add to the size of the project will be included as original construction or be

left for later provision when the project is in an operating stage. Consideration

of cost limitation may be legitimately taken into account in arriving at such a

decision. Particularly is this true in a case such as the one here presented where

the need for the regulating reservoir was not critical until the project lands approached full development and when the seriousness of the problem could not

have been foreseen at the time of original construction in the absence of advance

knowledge of the exact cropping pattern and practices.4

FRANK J. BARRY, Solicitor.

See Commissioner's memorandum to Secretary dated May 22, transmitting the rehabilitation and

betterment proposal.

See the Coachella rehabilitation and betterment program report of the Bureau of Reclamation, dated

February 1961, pp. 4-5.
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 21

Hon. STEWART L. UDALL,

Secretary of the Interior,

Department of the Interior, Washington, D.C.

DEAR MR. SECRETARY: The committee appreciates receiving Secretary Carr's

letter of January 11 concerning the proposed contract with the Coachella Valley

County Water District under the Rehabilitation and Betterment Act. The

Under Secretary transmitted a copy of the Solicitor's opinion of September 13,

1961, holding that the works to be covered by the contracts were authorized in

accordance with the provisions of the act.

You will recall that the contracts were considered by the Subcommittee on

Irrigation and Reclamation at its meeting on June 29, 1961, at which Under

Secretary Carr and spokesmen for the Bureau of Reclamation were heard. Certain questions as to whether the proposed contract does, in fact, come within the

purview of the Rehabilitation and Betterment Act were raised at the hearing,

and Under Secretary Carr withdrew the contract from the committee pending

further study.

I have caused the Solicitor's opinion of September 13, 1961, to be reviewed

carefully, and on the basis of such study fear it may not be wholly responsive to

the subcommittee's questions as set forth in the transcript of the hearing. It is

noted that the proposed contract would involve an expenditure by the Federal

Government of some $8 million. The principal work, at least as to cost, would

be construction of a new reservoir for regulating purposes. In response to my

questions, the Bureau spokesman conceded this reregulating reservoir would be

neither "rehabilitation" nor "betterment" of an existing facility, and that it would

bring under irrigation additional acreage not now served within the project.

The Solicitor's opinion does deal with this point, but cites as a precedent the

Medford and Rogue River Valley projects in Oregon by which additional water

and additional acreage were added to the districts. Clearly, under the criteria

set forth in the opinion, such work was not within the purveiw of the Rehabilitation and Betterment Act, and in this particular instance were brought within the

act only by a special statute. I fear we may be letting the administration of the

Rehabilitation Act in for some difficulties if we adopt the Rogue River and Medford

cases as a precedent for approving the Coachella project as presently designed.

I point this out not to be faultfinding or capricious, but because I believe the

record should be clear that we are not, in the Coachella contract, broadening the

Rehabilitation and Betterment Act to include 'works such as those authorized

in the Medford and Rogue River projects.

Also, Senator Allott raised what to me is an important point. He expressed

the fear that the new reservoir would increase the burden on the river, and would

establish new appropriative rights. This point does not appear to be covered by

the opinion, but I feel certain it is a matter into which the committee will want

to go.

Another question raised at the hearing was whether financing for the project

could not be obtained from other than Federal Government sources, in whole or

in part. You will recall the act specifically requires, as a condition for the use

of Federal funds, that the work "cannot be financed currently" by the water users.

Therefore, it will be appreciated if the Department will explore and determine

whether, in the words of the statute, "the work cannot be financed currently,"

in whole or in part, so that the cost to the Federal Government can be reduced.

The testimony at our hearing showed that this land is extremely valuable, with

very high productivity indeed.

In the event the water users themselves cannot undertake or obtain such

outside financing, it is urged that the Bureau of Reclamation reexamine carefully

the project plans to see if any changes are possible that would result in less cost

to the Government.

The committee then will consider the contract again.

Sincerely yours,

FEBRUARY 5, 1962.

CLINTON P. ANDERSON, Chairman.
22 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

HOD. CLINTON P. ANDERSON,

Chairman, Committee on Interior and Insular Affairs,

U.S. Senate,, Washington, D.C.

DEAR MR. CHAIRMAN: We are pleased to furnish additional information on the

Coachella Valley County Water District's proposed rehabilitation and betterment

program, Coachella Division, All-American Canal System, California.

Two principal questions were raised by your committee during the June 29,

1961, hearing: first, whether the work proposed is within the scope of the Rehabilitation and Betterment Act of 1949, as amended (63 Stat. 724; 64 Stat. 11) ;

and second, whether the proposed work can be financed by the district without

the use of the Rehabilitation and Betterment Act. Your letter of February 5,

1962, raised a third question, touched on at the hearing, as to whether the proposed program would establish new appropriative water rights and increase the

burden on the Colorado River. These and corollary matters are answered below.

As to the first question, an opinion by the Department's Solicitor, which was

furnished you with our letter of January 11, 1962, concluded that the work proposed is within the scope of the Rehabilitation and Betterment Act. A principal

point discussed at the hearing and in your letter was whether the proposed regulating reservoir is a proper feature under the rehabilitation and betterment program. The opinion notes that the proposed reservoir is similar to one included in

the rehabilitation and betterment program of the South Ogden Conservancy District in Utah. The Secretary's determinations concerning that program were

submitted to the Congress January 23, 1958, and became effective following the

required 60-day legislative waiting period.

While the regulating reservoir is not in itself an existing facility, the test under

the Rehabilitation and Betterment Act is whether, on a system basis, the work

represents an operation and maintenance item rather than new constructioh.

The basic criterion is whether the scope of the project will thereby be enlarged.

This is not the case with the proposal for the Coachella District, for the scope of

the project would remain unchanged.

The Solicitor's opinion was based on the fact that the work would not bring

additional acreage under irrigation, and would conserve rather than increase

water use. May we in this connection call attention to Mr. Stamm's statement

on page 29 of the transcript:

"Mr. STAMM. This is not providing for any new land, for any more water, for

any change in the basic design in the project."

Opinion references to the Medford and Rouge River Valley Irrigation Districts

were not cited as a precedent, but merely to demonstrate the soundness of the

determinations of the Department in the Coachella case where no new lands will

be served and no additional water developed. Actually, the authorized rehabilitation and betterment work in the Medford and Rouge River Valley Irrigation

Districts was basically to restore and improve irrigation service to irrigated lands

and to accomodate much needed supplemental water supplies.

The second question is whether financing of the proposed program could be

obtained, in whole or in part, from sources other than the Federal Government.

The Rehabilitation and Betterment Act imposes a condition that the work cannot

be financed currently by the water users. This condition relates to the ability

of the water users to pay the total cost of the work in the year in which the work

is done. The act does not apply as a condition the fact that the water userscannot

secure financing from other sources.

The district can pay approximately $19.80 on irrigable acre annually toward

'construction, rehabilitation, and betterment costs. Since the system was built

to serve about 70,000 acres, the district's peak payment ability is estimated at

about $1,386,000 annually. To date, however, somewhat less than this acreage

has been irrigated in any 1 year; consequently, the district's current ability to

-pay is somewhat less than that expected ultimately.

In 1961, the district paid the United States $378,707 under existing contract

'commitments. Annual payments will gradually increase to $808,757 in 1977

and continue through 1994; thereafter, they will decrease and end in 2002. The

proposed rehabilitation and betterment obligation, which is scheduled for repayment in annual installments of $238,333 over a 30-year period beginning not later

than 1966, would increase the maximum annual payment of the district to

'$1,047,090 for the 18 years beginning in 1977. Assuming all 70,000 acres were

.developed for irrigation by that time, this would be about 76 percent of

the district's capacity to pay

U.S. DEPARTMENT OF THE INTERIOR,

Washington, D.C., May 9, 1962.
CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 23

• We are pleased to advise you, as the enclosed statement on need for Federal

financing will show, that the district plans, as it has done in the past, on undertaking a significant part of the total program with its own forces and funds.

For example, the district intends to finance further distribution system improvements and tile collector drains from current revenues. The work will be performed

concurrently with that to be performed under the proposed federally financed

rehabilitation and betterment program. In the 5-year period ending June 30,

1960, the district expended $2,434,170 from current revenues, or an average of

about $500,000 annually, for water supply and drainage facilities.

In addition to the capital improvements being undertaken by the district and

financed from current revenues, individual farmers have been making capital

improvements to land by the installation of on-farm tile drains. Approximately

25,000 acres in the district have a completed on-farm tile drainage system. This

represents a private investment of about $2,500,000, or about $100 an acre. A

considerable area remains to be tiled.

We wish to assure you that every effort has been made to devise a reasonable

program to be financed with Federal funds. Our further review does not indicate

reasonable justification for revising the programed work or its method of financing.

Nevertheless, we have further discussed the program with district officials and

they have agreed that the district will further investigate and, if possible, arrange

for the automatic demossing equipment as a part of the district-financed program.

This could reduce the Federal program by $175,000; however, because of the

uncertainty as to the district's ability to assume this financial obligation in addition to those it has already assumed for distribution system improvements and

collector drains, we are for the time being continuing to carry the cost of the

automatic demossing equipment in the Federal program.

In reference to the third question, the proposed rehabilitation and betterment

program would not increase the burden on the Colorado River as it does not alter

existing diversion rights of the district, or its capacity to divert. By contract of

October 15, 1934, between the Coachella Valley County Water District and the

United States, 1,500 cubic feet per second of water delivery capacity was constructed in the All-American Canal for use by the Coachella District. Water

delivery is, of course, subject to availability for use in California under the Colorado River Compact and the Boulder Canyon Project Act. This district holds

iointly with the Imperial Irrigation District and others a third and sixth priority

right for diversion of Colorado River water. The district's water supply is

definitely limited, its losses under the existing system and condition of works are

large; therefore, it is highly important to perform rehabilitation and betterment

work that will increase the efficiency and economy of proiect water use. This

matter was also briefly discussed during the Senate hearing. We call your

attention to Mr. Stamm's statement on page 34 of the transcript.

"These folks have a right to divert in their canal 1,500-second feet, which would

be 3,000 acre-feet daily, and the capacity of this regulating reservoir is only 3,500

acre-feet. That is virtually only 1 day, slightly over 1 day's flow, so they do not

have capacity to store. This is merely fluctuation to take care of reregulation in

order to make the best use of the last drop of water in their canal. That is about

what it amounts to."

We believe the above, with our letter of January 11, 1962, fully answers the

questions which were raised regarding the proposed rehabilitation and betterment

program during the June 29, 1961, hearing and in subsequent correspondence with

the committee. We believe the answers further justify the need for the Federal

program proposed; accordingly, we are by this letter resubmitting and reaffirming

the determinations made in our letter of May 24, 1961, concerning the proposed

rehabilitation and betterment work for the Coachella Valley County Water

District.

We are also resubmitting our determinations to the House Committee on

Interior and Insular Affairs.

Sincerely yours,

KENNETH HOLUM,

Assistant Secretary of the Interior.
24 CONTRACT FOR COACHELLA VALLEY WATER DISTRICT

Statement of need for Federal financing of rehabilitation and betterment program for

Coachella Valley County Water District—Existing repayment contracts with

United States

Total obligation

Amount

outstanding

July 10, 1961

Contract of Oct. 15, 1934 $13, 458, 562 $12,516,463

Contract of Dec. 22, 1947 13 500,0(0 13,367,338

Total 26,958,562 25, 883, 801

Repayment under the above contracts is scheduled over a 40-year period on a

graduated basis. The annual payment required for calendar year 1961 was

$378,707, with the annual installment increasing each year thereafter until the

maximum annual installment of $808,757 is reached in 1977. This rate remains

in effect until 1994, with reducing amounts each year thereafter until the final

installment is paid in the year 2002. This indicates a period slightly longer than

40 years, but this is due to establishment of irrigation blocks on differing dates.

Repayment of the proposed rehabilitation and betterment obligation would be

scheduled in equal annual installments of $238,333 each, with the first installment

due not later than 1966. A 30-year repayment period would be required. This

schedule, in combination with existing contract obligations, would result in maximum annual installments due the United States of $1,047,090. This is equivalent

to a maximum annual construction repayment obligation per acre of approximately

$15.

PROPOSED REHABILITATION AND BETTERMENT PROGRAM

Total estimated cost of the program proposed to be financed by the United

States is $7,150,000. Construction is scheduled over a 4-year period, provided

funds are available. It would not be economically possible for the district to,

finance a program of such magnitude from current revenues. Also, it would not

be engineeringly practical to schedule this type of work over a long period of

years. Additionally, the works are urgently needed, and delay or stretchout of

construction would deprive the local economy of benefits which are needed now.

The district currently is in the process of constructing a collector drainage

system from current revenues without assistance from the United States. This

is a notable example of a district attempting to stand on its own feet with respect

to needed work. Normally, drainage facilities of this nature on most projects

are constructed and financed by the United States with interest-free money.

Formal transfer of irrigation works to the district was completed in 1954. In

the 5-year fiscal period, 1955-56 through 1959-60, the district expended

$2,434,170 from current revenues on capital improvements, or an average of

nearly one-half million dollars annually. Capital expenditures made by the

district over the past few years include $170,875 for canal bypass and demossing

screens, $460,000 for distribution system extensions and improvements, and

$1,573,420 for drainage tile collector lines. The district intends to continue

making capital improvements from current revenues, including distribution

system improvements and tile collector drains, concurrently with work to be

performed under the rehabilitation and betterment program.

In addition to capital improvements being undertaken by the district and

financed from current revenues, individual farmers are making capital improvements to land through the installation of on-farm tile drains. Approximately

25,000 acres of land in the district have a completed on-farm tile drainage system.

This represents a private investment of about $2,500,000, or approximately $100

per acre. A considerable area remains to be tiled.

About one-half the irrigated acreage in the Coachella Valley is planted to

tree and vine crops. A capital investment of about $1,000 per acre, and from 3

to. 5 years' time, is required for new plantings before crop returns of any significance can be attained. During this period payment capacity is virtually nonexistant.

The average water user would be faced with an undue burden if the district

attempted to levy assessments at a high enough rate to finance on a current basis

the regular operation and maintenance expenses, the continuing capital improvement program, and the work proposed under the rehabilitation and betterment

program. The repayment analysis indicates an average amortization capacity
•

CONTRACT FOR COACHELLA VALLEY WATER DISTRICT 25

of approximately $19.80 per acre. Construction repayment installments, including costs of the proposed rehabilitation and betterment work, would require

approximately 815 per acre during the maximum payment period, assuming

70,000 irrigable acres in the repayment base.

An irrigation operation and maintenance assessment expected to average about

$15 per acre in future years, plus a construction repayment obligation of about $15

per acre, makes an estimated total irrigation charge of about $30 per acre. While

this amount might be paid without undue hardship by the outstanding farmers

and by those farming large acreages, $30 approximates the maximum that the

average small farmer could be expected to pay without undue burden. High

profits sometimes are offset by losses the next year.

In summary, the 30-year repayment plan proposed for return of rehabilitation

and betterment costs appears to be fair and equitable and in line with the computed average payment capacity of the irrigation farmers of the Coachella Valley

The additional obligation will be repaid within the repayment period provided

under the existing repayment contracts.

o

,