[Federal Register Volume 74, Number 153 (Tuesday, August 11, 2009)]
[Notices]
[Pages 40227-40230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19115]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs


Rate Adjustment for Indian Irrigation Project

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Notice of rate adjustment for San Carlos Irrigation Project--
Joint Works, Arizona.

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SUMMARY: The Bureau of Indian Affairs (BIA) owns and operates the San 
Carlos Irrigation Project--Joint Works (SCIP-JW) located with the 
project office in Coolidge, Arizona. We are required to establish 
irrigation assessment rates to recover the costs to administer, 
operate, maintain, and rehabilitate this project. We are notifying you 
that we have adjusted the irrigation assessment rate at the SCIP-JW to 
reflect current costs of administration, operation, maintenance, and 
rehabilitation.

DATES: Effective September 10, 2009.

FOR FURTHER INFORMATION CONTACT: Bryan Bowker, Project Manager, P.O. 
Box 250, Coolidge, AZ 85228, telephone: (520) 723-6216.

SUPPLEMENTARY INFORMATION: A Notice of Proposed Rate Adjustment was 
published in the Federal Register (74 FR 19981) on April 30, 2009, to 
propose an adjustment to the irrigation assessment rate at the SCIP-JW 
for 2011. The public and interested parties were provided an 
opportunity to submit written comments during the 30-day period that 
ended June 1, 2009.

Does this notice affect me?

    This notice affects you if you own or lease land within the 
assessable acreage of the SCIP-JW or if you have a carriage agreement 
with this irrigation project.

What irrigation assessments or charges are adjusted by this notice?

    The rate table below contains the current rate for SCIP-JW, where 
we recover costs of administering, operating, maintaining, and 
rehabilitating the project. The table also contains the final rate for 
the 2011 season.

                                            Western Region Rate Table
----------------------------------------------------------------------------------------------------------------
                                                                                   Final      Final      Final
                 Project name                            Rate category           2009 rate  2010 rate  2011 rate
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San Carlos Irrigation Project (Joint Works)..  Basic per acre..................     $21.00     $21.00     $25.00
(See Note 1)........................
----------------------------------------------------------------------------------------------------------------
Note 1. The 2010 rate was established by final notice published in the Federal Register on April 22,
  2009 (74 FR 18402).

Did the BIA change the proposed rate increase?

    Yes. The BIA proposed a $30/acre operation and maintenance (O&M) 
assessment rate for the SCIP-JW in 2011. This would have been a $9/acre 
increase from the 2010 O&M assessment rate of $21/acre. After further 
consideration, the BIA is establishing the 2011 O&M assessment rate at 
$25/acre. This $5/acre change in the proposed rate increase would 
extend, from two to three years, the time period required for BIA to 
collect from the water users the funds needed to replace the Coolidge 
Dam cylinder gates.

Did the BIA receive any comments on the proposed irrigation assessment 
rate adjustments?

    Yes. Written comments relating to the proposed rate adjustment for 
the SCIP-JW were received by letter dated May 29, 2009, from one 
entity, the San Carlos Irrigation and Drainage District (District).

What issues were of concern to the commenter?

    The District raised the following comments in its letter. The BIA's 
response is provided immediately after each comment statement.
    (1) Comment: The BIA has not employed a reasonable methodology for 
determining an appropriate O&M charge for 2011.
    Response: The methodology used by the BIA to estimate an 2011 O&M 
budget and determine an appropriate rate for 2011 was reasonable. Based 
on a review of historical income receipts and expenditures, a budget of 
projected income receipts and expenditures is developed approximately 
two years before the O&M income is collected and expenses are incurred. 
The BIA relies on financial reports generated by the Federal Finance 
System for reviewing past expenditures and projecting a future budget 
and expenditures. Procurement files and records maintained by the SCIP-
JW are also reviewed and considered. For example, with regard to 
development of the 2011 O&M budget, the BIA reviewed: (1) The year-end 
reconciled income and expenditure information for 2008; (2) available 
income and expenditure information 2009; (3) previous budget 
projections for 2010; and (4) other information relevant to potential 
future activities, such as the cost information for replacement of the 
Coolidge Dam cylinder gates.
    The SCIP-JW staff and District representatives discussed the 
pertinent budget information during several meetings held between 
November 13, 2008 and March 30, 2009. The District was provided with 
pertinent budget information during this time period.
    (2) Comment: The BIA has provided the District with conflicting 
information about current and projected staffing levels for the 
Irrigation Division of the Project, and the allocation of $615,000 in 
2011 for personnel is excessive and unreasonable.
    Response: The BIA does not believe that it has provided the 
District with conflicting information about current and projected 
staffing levels for the Irrigation Division of the SCIP-JW. The 
projected 2011 personnel budget for the Irrigation O&M staff is based 
on actual expenditures incurred by the SCIP-JW in 2008 and 2009 for the 
staff positions the SCIP-JW anticipates to be in its employment in 2010 
and 2011, with modest cost of living increases. The base information 
for these staff positions and salary and wage grade scales was

[[Page 40228]]

provided to the District in December 2008.
    In anticipation of the reduction-in-force resulting from the 
transfer of the SCIP-JW maintenance duties to the Joint Control Board 
(JCB) required by the Arizona Water Settlements Act (Pub. L. 108-451, 
118 Stat. 3478, 3499 (Dec. 10, 2004)) and the Related Joint Control 
Board Agreement signed by the District and the Secretary of the 
Interior, the SCIP-JW will be updating its Irrigation Organization 
Chart. At that time, the District will be provided a copy of the 
revised Irrigation Organization Chart and associated salary table.
    The reduction-in-force is in progress and the BIA estimates this 
action will result in an annual personnel cost savings of approximately 
$400,000. This savings is accounted for in the 2010 and 2011 O&M 
budgets for the SCIP-JW and was identified to the District on or before 
March 30, 2009. Although the Supervisory Civil Engineer position was 
vacant from August 2008 through May 2009, the position has now been 
filled. The BIA disagrees with the District's assertion that only a 
half-time Civil Engineer position is needed. There are extensive 
construction activities planned for SCIP-JW facilities pursuant to the 
Arizona Water Settlements Act by the District, the Gila River Indian 
Community, and the U.S. Bureau of Reclamation. These activities require 
the attention of the Supervisory Civil Engineer, in addition to the 
duties retained by the SCIP-JW after the transfer of maintenance duties 
to the JCB.
    Similarly, the BIA disagrees with the District's estimate of how 
many irrigation system operators the SCIP-JW needs to perform the water 
delivery duties. The SCIP-JW has a vast geographical territory, and the 
irrigation system operators are regularly called on to perform water 
delivery duties after normal working hours and on weekends and 
holidays.
    BIA notes that the District reiterates its request for the SCIP-JW 
to assign the well maintenance function to the JCB. The agreement 
applicable to the JCB requires the BIA to continue maintenance of 
project wells until such time as the wells become a ``District 
Rehabilitation Responsibility'' as defined in sections 9.1 and 9.4 of 
the Joint Control Board Agreement. There may be other options available 
for consideration by BIA in response to this request, such as a Federal 
procurement action or an Indian Self-Determination contract action. 
However, consideration of these options would take time to discuss and 
evaluate and cannot be resolved in the context of the 2011 O&M rate 
process. Regardless, implementation of other options for maintenance of 
project wells does not eliminate the costs; it only changes the way the 
costs are covered.
    (3) Comment: The BIA's 2011 budget estimate for utilities, 
services, and supplies is excessive.
    Response: The BIA does not believe the 2011 budget estimate for 
these categories is excessive. This conclusion is based on the best 
historical information available to the BIA for these expenditures. The 
details concerning these budget items were provided to the District 
earlier this calendar year. These categories primarily include 
expenditures to pay for repair and maintenance of the 98 wells owned 
and operated by the SCIP-JW. This is a high priority in the O&M budget 
because the groundwater supplied from these wells contributes 
significantly to the annual water apportionment in the project. Another 
significant expenditure in this category is the Federal environmental 
compliance costs incurred by the SCIP-JW to: (1) Evaluate encroachment 
actions on SCIP-JW facilities due to non-irrigation development by 
District landowners; and (2) to comply with other applicable Federal 
environmental requirements in the course of O&M activities retained by 
the BIA under the Arizona Water Settlements Act and Joint Board 
Agreement.
    (4) Comment: The replacement of the Coolidge Dam cylinder gates 
constitutes ``betterment'' and requires the consent of the District 
because the purpose for replacing these gates is to extend the useful 
life of Coolidge Dam.
    Response: The BIA disagrees with the District's assertion that 
replacement of the Coolidge Dam cylinder gates is ``betterment.'' 
Coolidge Dam is the asset and the cylinder gates are components of the 
dam. Replacing the gates does not increase the life of the dam; the 
replacement only allows the BIA to operate the asset (Coolidge Dam) 
properly. The BIA considers the gate replacement to be deferred 
maintenance which needs to be completed as soon as the requisite funds 
to pay for the replacement costs can be collected through the O&M 
assessment rate process. The BIA provided extensive technical 
information about the condition of the cylinder gates to the District 
twice since 2006 and sought review and comment from the District about 
the problem and the replacement plan. See the report completed in July 
2004 by the Bureau of Reclamation for the BIA titled: ``Coolidge Dam, 
Comprehensive Dam Review, Bureau of Indian Affairs--Safety of Dams 
Program, Western Region, San Carlos Indian Reservation, 2004.'' This 
report includes an additional document titled: ``Examination Report, 
Special Examination, Coolidge Dam, San Carlos, Arizona,'' which 
documents the findings and recommendations relating to the Coolidge Dam 
cylinder gates. The District has not submitted substantive comments to 
the BIA on this matter in response to this technical information.
    These reports provide the following information: a buckling failure 
of a cylinder gate while closed, due to large hydrostatic loads on a 
reduced steel section (from corrosion), could prevent re-opening of the 
gate for reservoir releases and also present a dam safety concern. A 
single nine-foot-diameter circular bulkhead gate could be fabricated 
for installation by a crane onto either cylinder gate seat within each 
intake tower for maintenance and inspection purposes, replacing the 
function of the cylinder gates at a reasonable cost. Failure of either 
cylinder gate is considered likely within the next 30 years under 
normal operating heads and immediate measures should be taken to lock 
both gates in the fully open position until they are removed. Based on 
this technical review and information, BIA decided to lock the existing 
cylinder gates in a fully open position and the gates are no longer 
available to be closed under any circumstance. This prevents inspection 
and maintenance of the emergency guard gate and sections of the conduit 
through the dam upstream of the emergency guard gate.
    Based on this information, the BIA believes it is appropriate as 
the owner/operator of Coolidge Dam, as well as the steward of the water 
supply delivered from Coolidge Dam, to move forward with the actions 
required to replace the cylinder gates. In order to reduce the cost 
burden to the District landowners, the BIA will reduce the 2011 O&M 
rate from $30/acre to $25/acre and collect the funds for this purpose 
over a three-year period rather than a two-year period.
    (5) Comment: The BIA's emergency reserve fund should be maintained 
at $200,000, not $600,000.
    Response: The BIA disagrees with the District's analysis of the 
emergency reserve fund. During calendar year 2006, when the BIA engaged 
in water user meetings with the District and the Indian water users 
about the proposed O&M rate for 2008 and 2009, extensive discussion 
ensued concerning the amount of the emergency reserve fund and the 
separate reserve fund maintained by the SCIP-JW for well replacement. 
In response to the

[[Page 40229]]

concerns expressed by the District in these meetings, the BIA abolished 
the separate reserve fund for the well replacement contingencies and 
the BIA decided to use the emergency reserve fund to replace wells as 
needed and will replenish the reserve fund if it is used for well 
replacement. A single well replacement is estimated to cost between 
$250,000 and $300,000. The BIA believes a reserve fund sufficient to 
replace two wells should be maintained. As such, the BIA believes it is 
reasonable to maintain the SCIP-JW emergency reserve fund at $600,000. 
This amount complies with the BIA's policy for irrigation project 
reserve funds.
    (6) Comment: The District requests copies of all information that 
was used to prepare the proposed budget and O&M charge for 2011.
    Response: The development of the 2011 O&M budget estimate is 
logically an outgrowth of the extensive discussions between BIA and the 
District about the O&M income and expenditures in 2008 and 2009 and the 
projected O&M budget for 2010. These discussions also included fiscal 
and programmatic issues and information related to the transfer of 
SCIP-JW maintenance duties to the JCB, as required by the Arizona Water 
Settlements Act and the Joint Control Board Agreement signed by the 
District and the Secretary of the Interior.
    Examples of the information provided to the District include: staff 
position titles; staff position salary and wage grade scales; projected 
and actual expenditures for FY 2009; projected expenditures for 2010; 
final income and expenditure information for the reconciled year-end 
2008 O&M budget (including volumes of documentation from the Federal 
Finance System and General Ledger); SCIP-JW budget spreadsheets 
displaying historical expenditure data for nearly the last ten years; 
and detailed descriptions of the O&M activities and performance 
standards for the SCIP-JW.
    Additionally, the SCIP-JW provided the District with access to all 
of its contract files as part of the pending litigation in San Carlos 
Irrigation and Drainage District v. United States, No. 06-576C, U.S. 
Court of Federal Claims. These contract files contained information 
pertaining to current SCIP-JW obligations and payments for contract 
obligations relating to large outlays, such as well maintenance and 
repair and environmental compliance costs associated with O&M of the 
SCIP-JW.

Where can I get information on the regulatory and legal citations in 
this notice?

    You can contact the appropriate office(s) stated in the table for 
the SCIP-JW, or you can use the Internet site for the Government 
Printing Office at http:[sol][sol]www.gpo.gov.

What authorizes you to issue this notice?

    Our authority to issue this notice is vested in the Secretary of 
the Interior by 5 U.S.C. 301 and the Act of August 14, 1914 (38 Stat. 
583; 25 U.S.C. 385). The Secretary has, in turn, delegated this 
authority to the Assistant Secretary--Indian Affairs under Part 209, 
Chapter 8.1A, of the Department of the Interior's Departmental Manual.

Who can I contact for further information?

    The following table contains the regional and project/agency 
contacts for the SCIP-JW.

                         Western Region Contacts
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Allen Anspach, Regional Director, Bureau of Indian Affairs, Western
 Regional Office, Two Arizona Center, 400 N. 5th Street, 12th floor,
 Phoenix, AZ 85004, Telephone: (602) 379-6600
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               Project Name                    Project/Agency Contacts
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San Carlos Irrigation Project--Joint Works  Bryan Bowker, Project
                                             Manager, P.O. Box 250,
                                             Coolidge, AZ 85228,
                                             Telephone: (520) 723-6216
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Consultation and Coordination With Tribal Governments (Executive Order 
13175)

    To fulfill its consultation responsibility to tribes and tribal 
organizations, BIA communicates, coordinates, and consults on a 
continuing basis with these entities on issues of water delivery, water 
availability, costs of administration, operation, maintenance, and 
rehabilitation of projects that concern them. This is accomplished at 
the individual irrigation project by project, BIA, and regional 
representatives, as appropriate, in accordance with local protocol and 
procedures. This notice is one component of our overall coordination 
and consultation process to provide notice to, and request comments 
from, these entities when we adjust irrigation assessment rates.

Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use (Executive Order 13211)

    This rate adjustment will have no adverse effects on energy supply, 
distribution, or use (including a shortfall in supply, price increases, 
and increase use of foreign supplies) as this rate adjustment is 
implemented. This is a notice for rate adjustment at a BIA-owned and 
operated irrigation project.

Regulatory Planning and Review (Executive Order 12866)

    This rate adjustment is not a significant regulatory action and 
does not need to be reviewed by the Office of Management and Budget 
under Executive Order 12866.

Regulatory Flexibility Act

    This rate adjustment is not a rule for the purposes of the 
Regulatory Flexibility Act because it establishes ``a rule of 
particular applicability relating to rates.'' 5 U.S.C. 601(2).

Unfunded Mandates Reform Act of 1995

    This rate adjustment does not impose an unfunded mandate on State, 
local, or tribal governments in the aggregate, or on the private 
sector, of more than $130 million per year. The rule does not have a 
significant or unique effect on State, local, or tribal governments or 
the private sector. Therefore, the Department of the Interior 
(Department) is not required to prepare a statement containing the 
information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 
et seq.).

Takings (Executive Order 12630)

    The Department has determined that rate adjustments do not have 
significant ``takings'' implications.

[[Page 40230]]

Federalism (Executive Order 13132)

    The Department has determined that rate adjustments do not have 
significant Federalism effects because they will not affect the States, 
the relationship between the Federal Government and the States, or the 
distribution of power and responsibilities among various levels of 
government.

Civil Justice Reform (Executive Order 12988)

    In issuing this rule, the Department has taken the necessary steps 
to eliminate drafting errors and ambiguity, minimize potential 
litigation, and provide a clear legal standard for affected conduct, as 
required by section 3 of Executive Order 12988.

Paperwork Reduction Act of 1995

    This rate adjustment does not affect the collections of information 
that have been approved by the Office of Information and Regulatory 
Affairs, Office of Management and Budget, under the Paperwork Reduction 
Act of 1995. The OMB Control Number is 1076-0141 and expires August 31, 
2009.

National Environmental Policy Act

    The Department has determined that this rate adjustment does not 
constitute a major Federal action significantly affecting the quality 
of the human environment and that no detailed statement is required 
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321-
4370(d)).

Data Quality Act

    In developing this notice, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. No. 106-554).

    Dated: July 28, 2009.
George T. Skibine,
Acting Principal Deputy, Assistant Secretary--Indian Affairs.
[FR Doc. E9-19115 Filed 8-10-09; 8:45 am]
BILLING CODE 4310-W7-P