Garrison Diversion Unit’s Interim Cost Allocation

The Bureau of Reclamation’s (USBR) Garrison Diversion Unit (GDU) is a multipurpose water project in North Dakota that was authorized for development in 1965. The GDU was primarily authorized for irrigation, municipal and industrial water supply, fish and wildlife enhancement, recreation, and flood control. We evaluated the GDU’s May 2012 interim cost allocation to determine whether it was up-to-date and consistent with current use and found that the allocation was recently updated and generally reflects current use. It does not, however, fully represent the U.S. Government’s share of construction costs because the project was not developed as originally planned. Instead, the cost allocation indicates that the Government will eventually recover more construction costs from project beneficiaries than is likely, thus understating the cost to the Government. Specifically, the water users’ obligation to repay the construction costs has been reduced due to a reduction in irrigation land for development, deauthorized project features that resulted in a water supply that is not fully operational, and 61,780 acres authorized for irrigation that will likely not be developed. 

 

At the outset of the GDU project, 250,000 acres were authorized for irrigation development, with the anticipation that water users would repay associated construction costs. By 2000, that acreage had been reduced to 75,480 acres. The interim May 2012 cost allocation is based on the 75,480 acres authorized for irrigation development, with $403.4 million in construction costs to be repaid by water users, leaving the Government responsible for 59 percent ($1.2 billion) of the total project construction cost. Because 61,780 acres will likely not be developed, $305.3 million of $403.4 million will not be repaid by the water users, making the Government’s actual share of total project construction costs about 75 percent ($1.5 billion) based on project completion to date. 

 

We recommended that USBR reevaluate the project and take the steps necessary to complete the project as-is—primarily, to request Congress to officially revoke the authority to develop the remaining irrigation acreage.  If implemented, this recommendation would allow for project completion as-is, a final cost allocation, and an accurate representation of the project’s costs borne by the Government, and therefore, taxpayers. USBR partially concurred and we determined that its actions satisfy the requisites of our recommendation.