Operation and Maintenance Rate Adjustment: Crow Irrigation Project, Montana

DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

Operation and Maintenance Rate Adjustment: Crow Irrigation

Project, Montana

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Notice of Operation and Maintenance (O&M) Rate Adjustment.

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SUMMARY: The Bureau of Indian Affairs (BIA) is adjusting the assessment

rates for operating and maintaining the Crow Irrigation Project

(Project), Montana for the years 1998, 1999, 2000, and 2001.

DATES: The adjusted irrigation rates are effective for each irrigation

season as indicated in the table.

FOR FURTHER INFORMATION CONTACT: Keith Beartusk, Area Director, Bureau

of Indian Affairs, Billings Area Office, 316 North 26th Street,

Billings, Montana 59101-1362, telephone (406) 247-7998.

SUPPLEMENTARY INFORMATION: The authority to issue this document 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

delegated this authority to the Assistant Secretary--Indian Affairs

pursuant to part 209 Departmental Manual, Chapter 8.1A and Memorandum

dated January 25, 1994, from Chief of Staff, Department of the

Interior, to Assistant Secretaries, and Heads of Bureaus and Offices.

This notice is given in accordance with Sec. 171.1(e) of part 171,

subchapter H, chapter I, of title 25 of the Code of Federal

Regulations, which provides for the fixing and announcing the rates for

annual operation and maintenance assessments and related information of

the Crow Irrigation Project for Calendar Year 1998 and subsequent

years.

The assessment rates are based on a prepared estimate of the cost

of normal operation and maintenance of the irrigation project. Normal

operation and maintenance means the expenses we incur to provide direct

support or benefit to the project's activities for administration,

operation, maintenance, and rehabilitation. We must include at least:

(a) Personnel salary and benefits for the project engineer/manager

and our employees under his management/control;

(b) Materials and supplies;

(c) Major and minor vehicle and equipment repairs;

(d) Equipment, including transportation, fuel, oil, grease, lease

and replacement;

(d) Capitalization expenses;

(e) Acquisition expenses; and

(f) Other expenses we determine necessary to properly perform the

activities and functions characteristic of an irrigation project.

Payments

The irrigation operation and maintenance assessments become due

based on locally established payment requirements. No water shall be

delivered to any of these lands until all irrigation charges have been

paid.

Interest and Penalty Fees

Interest, penalty, and administrative fees will be assessed, where

required by law, on all delinquent operation and maintenance assessment

charges as prescribed in the Code of Federal Regulations, title 4, part

102, Federal Claims Collection Standards, and 42 BIAM Supplement 3,

part 3.8 Debt Collection Procedures. Beginning 30 days after the due

date, interest will be assessed at the rate of the current value of

funds to the U.S. Treasury. An administrative fee of $12.50 will be

assessed each time an effort is made to collect a delinquent debt; a

penalty charge of 6 percent per year will be charged on delinquent

debts over 90 days old and will accrue from the date the debt became

delinquent. No water shall be delivered to any farm unit until all

irrigation charges have been paid. After 180 days, a delinquent debt

will be forwarded to the United States Treasury for further action in

accordance with the Debt Collection Improvement Act of 1996 (Pub. L.

104-134).

Comments

On August 25, 1997, the BIA provided a notice in the Federal

Register, 62 FR 44991, proposing to adjust the assessment rates for

operating and maintaining the Project for 1998, 1999, 2000, 2001, and

subsequent years. The notice of proposed rate adjustment provided a 30-

day public comment period. Comments were received, the record was

reviewed, and the following is in response to those comments.

Response to Comments: On August 25, 1997, the Assistant Secretary--

Indian Affairs published in the Federal Register (62 FR 44991) a Notice

of Proposed Irrigation Operation and

[[Page 27004]]

Maintenance (O&M) Rate Adjustment for the Project. The BIA sought

comments to the proposed adjustments to the 1997 assessment rate of

$11.60 per acre. For 1998, the rate was proposed to increase by $2.90,

or 25 percent, to $14.50 per assessable acre, and additional increases

of 50 cents per assessable acre were proposed for the succeeding three

years. In the notice, the BIA indicated that the proposed rates were

based upon a prepared estimate of the costs of normal operation and

maintenance of the Project. These costs included the expenses incurred

by the BIA to provide direct support or benefit to the Project's

activities, including salaries and benefits for Project personnel,

materials and supplies, major and minor vehicle repairs, equipment, and

other necessary expenses. The public was provided 30 days in which to

comment on the proposed rate adjustment.

The BIA posted notices of the proposed rate adjustment at federal

government facilities at the following towns in Montana: Hardin, Wyola,

Saint Xavier, Garryowen, Crow Agency, and at the Billings Area Office,

Billings, Montana. In addition, the notice was published in the ``Big

Horn County News, Hardin, Montana.'' The notice identified the proposed

rate adjustment along with the date and location of a public meeting to

be held to discuss the proposed rate adjustment. The public meeting

took place on September 12, 1997, and was held at the BIA's Forestry

Building, Crow Agency, Montana. At the public meeting, the Billings

Area Office Irrigation Engineer and the Project Manager presented the

budget for the 1998 rate. The proposed budget indicated that to meet

projected operation and maintenance expenses, the Project would need to

increase its annual rate for 1998, 1999, 2000, and 2001.

Comments were received from three individuals: Rodney Jabs of

Hardin, MT; Reiny Jabs, Chairman, Big Horn District Water Users; and

Lee Roy Schanaman, Big Horn District Director. Comments and objections

were also filed by Douglas Y. Freeman, Secretary of the Big Horn

Irrigation Users, attaching a Petition signed by 92 entities (including

one duplicate and three corporations also represented by individual

signers). The comments that were received opposed the proposed rate

adjustment. The BIA has reviewed the comments to the proposed rate

adjustment and the record compiled by the Project. Review of the

proposed budget indicates that, in comparison to 1997, the proposed

adjustments are in the areas of salaries, supplies and materials, and

equipment. Other expense categories propose only slight adjustments to

reflect the annual increased costs of operating the Project.

Based upon this review and following due consideration of the

comments received, the BIA concludes that the proposed rate adjustment

is reasonable and necessary to ensure the continued operation and

maintenance of the Project.

Comments regarding equipment, materials and personnel: Comments

that were received stated concerns that the proposed rate adjustment

will include an increase to support the acquisition of new equipment.

The comments stated the belief that the Project presently has the

appropriate equipment, materials and personnel to perform operation and

maintenance of the system.

Response: Upon review of the Project's record, the BIA finds that,

while existing equipment and personnel are adequate to perform minimal

operation and maintenance functions, the Project does propose to

accelerate its maintenance program to meet the demands of the water

users, and to prevent future canal and lateral blowouts, such as the

blowout that occurred in 1997 at the Soap Creek flume.

The unexpected cost of repairing the Soap Creek flume at the

beginning of the irrigation season, reduced the Project's available

funds. This required the Project to cut back its maintenance program

and service to the water users. The proposed acceleration and expansion

of the Project's preventive maintenance program to reduce the potential

of future blowouts would increase the annual expenses of salaries,

supplies, materials, and the maintenance and repair/replacement of

existing heavy equipment.

The Project does anticipate replacing existing older heavy

equipment that is reaching the end of its economical life. Moreover,

increased expenditures to fund such necessary supplies as culverts,

headgates, and concrete will benefit project operations. The Project

does not propose expanding its current personnel allotment, but does

anticipate filling currently vacant positions. The Project's allotted

personnel roster consists of 1 project manager, 2 accounting

technicians, 1 secretary, 1 supervisory civil engineer technician, 4

equipment operators, 2 lead irrigation system operators, and 6

irrigation system operators, for a total of 17 positions. Currently,

the Project is operating with 1 project manager, 2 accounting

technicians, 1 supervisory civil engineer technician, 3 equipment

operators, 2 lead irrigation system operators, and 4 irrigation system

operators, for a total of 13 positions, a 24 percent vacancy rate. The

Project personnel provide water to 36,965 irrigated acres, maintain and

operate 346 miles of irrigation delivery system that contains 3,040

structures. The BIA thus finds the increase based upon equipment and

personnel expenditures to be justified.

Comments regarding salary: The proposed salary budget constitutes

two-thirds of the budget.

Response: The Project is composed of nine individual irrigation

units within three water sheds. Those are the Big Horn, Little Big

Horn, and Prior Creek water sheds. Project personnel provide water to

36,965 irrigated acres, and maintain and operate 346 miles of

irrigation delivery system that contains 3,040 structures. The delivery

of water requires that personnel traverse an area 70 miles one way.

A large percentage of the Project budget is required to meet

salaries, due to the labor intensive nature of this Project. The

project personnel who deliver water within the Big Horn and Prior Creek

drainage, provide water to 24,582 acres, and maintain and operate 197

miles of irrigation delivery system and 1,514 structures. The personnel

who deliver water to the Little Big Horn drainage, provide water to

12,383 acres, and maintain and operate 149 miles of irrigation delivery

system and 1,526 structures. Delivering water and meeting the demands

of the water users requires travel and constant monitoring and

regulating over a large service area which requires a full work force

of 17 personnel. These personnel are all paid from the O&M budget. To

implement the proposed higher level of maintenance to reduce a

rehabilitation backlog will require additional workforce expenditures.

The BIA finds that the proposed budget for salaries to accomplish this

is reasonable.

Comments regarding the percentage of the rate increase in one year:

Comments complained of the 25 percent increase in one year with an

overall increase of 38 percent.

Response: A review of the budget indicates that the proposed

increases were based upon the previous six years of project expenses

coupled with a stable O&M rate, and the expected inflation over the

next four years. The future costs were determined by using the Bureau

of Reclamation's ``Construction Cost Trends'' report, specifically the

``Composite Trend,'' ``machinery and equipment'' and ``Federal Salary''

data. Six years without an O&M rate adjustment, and the lack of

adequate rate relief in earlier years have resulted in a serious

shortage of

[[Page 27005]]

adequate funding for preventive and repair maintenance in accordance

with industry standards. During the six years of stable rates, there

was a 17 percent increase in Project operation costs to include cost of

living increases for salaries. Two-thirds of the proposed O&M rate

adjustment would be to meet inflation; the remaining one-third is to

fund the preventive maintenance program of the irrigation system. The

$2.90 increase for 1998 will help offset the lack of adequate rate

relief for previous years, and thus enable the Project to meet

demonstrated maintenance needs. The increase over subsequent years will

only compensate for expected inflation each year. The percentage

increases are 3.4 percent, 3.3 percent, 3.2 percent for 1999, 2000, and

2001, respectively. Given these circumstances and the resulting project

needs, the BIA finds the magnitude of the increase to be reasonable.

Comments regarding access to budget: The water users request access

to the Project's budget and to have input into what needs to be done

and where the money is going.

Response: The Project annually mails over 1,100 O&M bills to all of

the Project's water users. The cost to mail a copy of the budget to

each water user is not cost effective due to reproduction and postal

costs. Therefore, the annual budget for O&M is available at the Project

Office, Crow Agency, Montana for review by the water users and the

general public. For this proposed rate adjustment, the Project held a

public meeting on September 12, 1997, to discuss the proposed rate

adjustment and to present the Project budget. The participants at the

meeting were provided copies of the proposed rate adjustment and the

Project budget.

Prior to the above-mentioned public meeting, the Project met with

the three irrigation districts associated with the Project on January

3, 1997. At this annual district meeting, the Project presented its

1998 budget. This meeting provided attendees to provide comment on the

Project's budget and the need for a rate adjustment for the 1998

irrigation season.

Comments regarding the efficiency of the Project operation: The

Project needs to develop plans for a systematic cleaning of canals and

laterals, removal of unwanted pond weed, increase its efficiency, as

present funds are underutilized.

Response: Maximizing the Project's efficiency is certainly a goal

of the Project, and the Project will continue its efforts toward

improving efficiency in its operations. However, to keep water moving

through an irrigation delivery system effectively and reliably requires

that the canals and laterals be continually re-sloped, excess

vegetation removed, structures repaired or replaced, and aquatic weed

controlled. To accomplish this the Project requires that heavy

equipment operators travel along the canal or lateral and re-slope and

remove excessive vegetation with an excavator. The heavy equipment used

to accomplish this also requires continual maintenance and repair. To

accomplish aquatic weed control, the Project is restricted by

environmental and public safety requirements. Chemicals used for these

purposes must be approved. In recent years, these costs have increased

both due to the increased cost of the chemicals and the manner in which

they are applied.

The Project has maintained an O&M rate of $11.60 per acre since

1992. The Project over the years has had to cut back on maintenance

programs to keep the O&M costs within the $11.60 per acre assessment.

To continue operating the project at a $11.60 per acre assessment would

require further cuts of maintenance, further jeopardizing the operation

of the Project. The proposed rate adjustments will provide the Project

with adequate revenue to increase the maintenance program from the

present level of 30 to 40 of the 3040 structures per year up to 50 to

60 structures per year, increase canal maintenance from its current

level of 30 to 35 miles per year to 50 to 55 per year, and replace

worn-out heavy equipment. The BIA finds that the proposed rate will

help improve project efficiency.

Comments regarding the supervision of Project personnel: Comments

stated concerns that field project personnel are unsupervised,

unproductive, lack the knowledge of structures, maintenance, etc.

Response: The supervision of field irrigation personnel rests with

the Project Manager. To assist the manager, there are one supervisory

civil engineer technician, three equipment operators, two lead

irrigation system operators, and four irrigation system operators. Any

complaints a water user may have with any of the irrigation personnel

should be reported in writing to the Project Manager, Crow Agency

Superintendent or the Area Director, Billings Area Office. Any written

complaints should contain information that identifies a situation in

sufficient detail so that an inquiry may be conducted. In addition, the

complaint must include the complainant's name, address, and telephone

number.

The responsibility for the repair and/or replacement of the water

delivery system structures lies with the Project Manager and

Supervisory Civil Engineer Technician. They have the required

experience and expertise to effect repairs or replacement of Project

structures. They also can rely on the BIA's Billings Area Office staff

or the Bureau of Reclamation Regional Office staff for additional

technical assistance that may be needed to accomplish the Project's

maintenance program. The BIA finds that any complaints with Project

personnel should be raised to the Project Manager or the Area Director;

and do not form the basis here for contesting the rate adjustment.

Comments regarding the publication of the proposed rate increase:

Comments expressed concerns that the publication of the proposed rate

adjustment should have been before or after a harvest season.

Response: The Project operates on a fiscal year cycle from October

1 through September 30 of each year and is required to submit a

proposed budget for any given year to the Billings Area Office during

the previous fiscal year. The Project submitted its request for a

proposed rate adjustment for 1998 to the Billings Area Office in May

1997. The Billings Area Office approved the proposed rate adjustment

and submitted it to the BIA Central Office, Washington, D.C., for final

approval and publication in the Federal Register. On August 25, 1997

(62 FR 44991), the Federal Register published the proposed O&M rate.

All interested parties were given 30 days to submit written comments.

To ensure the water users were aware, the Project was proposing an

O&M rate adjustment. The Project posted copies of the Federal Register

Notice at all federal facilities within its area. In addition to this

posting, the Project also announced a public meeting to solicit

comments from the public regarding the proposed O&M rate adjustment.

This meeting was held on September 12, 1997.

The BIA will review its process for notifying the public for

proposed rate adjustments, and will strive to avoid the harvest season

in future rate adjustments.

Conclusion

Following review of the Project record and the comments received,

the BIA determined that the overall and compelling need for the Project

to bring its budget to current financial levels; thus, properly

maintaining the Project facilities and rendering the proposed rate

adjustment both necessary and reasonable. While we have considered the

objections of the water users, we affirm the Project's proposed budgets

and issue this final rate notice. Specific concerns expressed by the

water users

[[Page 27006]]

as to the time of the proposed rate adjustments and requesting access

to and input in the budgetary process, will be accommodated more fully

in future rate adjustment situations.

Executive Order 12988

The Department has certified to the Office of Management and Budget

(OMB) that this rate adjustment meets the applicable standards provided

in sections 3(a) and 3(b)(2) of Executive Order 12988.

Executive Order 12866

This rate adjustment is not a significant regulatory action and has

been reviewed by the Office of Management and Budget under Executive

Order 12866.

Regulatory Flexibility Act

This rate making is not a rule for the purposes of the Regulatory

Flexibility Act because it is ``a rule of particular applicability

relating to rates.'' 5 U.S.C. 601(2).

Executive Order 12630

The Department has determined that this rate adjustment does not

have significant ``takings'' implications.

Executive Order 12612

The Department has determined that this rate adjustment does not

have significant Federalism effects because it pertains solely to

Federal-tribal relations and will not interfere with the roles, rights,

and responsibilities of states.

Unfunded Mandates Act of 1995

This rate adjustment imposes no unfunded mandates on any

governmental or private entity and is in compliance with the provisions

of the Unfunded Mandates Act of 1995.

Rate Adjustment

The following table illustrates the impact of the rate adjustment:

Crow Irrigation Project--Irrigation Rate Per Assessable Acre

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Year 1997 1998 1999 2000 2001

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Rate............................................................... $11.60 $14.50 $15.00 $15.50 $16.00

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Dated: May 11, 1999.

Kevin Gover,

Assistant Secretary--Indian Affairs.

[FR Doc. 99-12387 Filed 5-17-99; 8:45 am]

BILLING CODE 4310-02-P