Water Resources

Compensation to Water Users Did Not Reflect the Value of Rights and Interests Gao ID: RCED-90-116 April 18, 1990

GAO reviewed the Bureau of Reclamation's compensation to the Strawberry Water Users Association (SWUA) for operation of the Strawberry Valley Project.

GAO found that: (1) SWUA was legally entitled to compensation when the United States removed its rights to obtain revenues from the project land, but the Bureau should have limited compensation to actual revenues lost from existing contracts; (2) the Bureau had no policy to guide compensation when the United States terminated SWUA rights and interests; (3) the $17.9 million the Bureau and Congress paid SWUA did not reflect the value of SWUA rights and interests; (4) $5.8 million of the $17.9 million payment was for projected future recreation and grazing revenue losses; (5) the compensation authorized in 1988 represented a congressional policy decision; and (6) SWUA was not liable for land rehabilitation costs.

Recommendations

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