Army Corps' Decisions about and Status of Repayment for Harlan County Dam Repairs
GAO-19-593R: Published: Jul 9, 2019. Publicly Released: Jul 9, 2019.
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The Army Corps operates and maintains over 700 dams, including the Harlan County Dam in Nebraska. The Corps recently repaired this dam's "Tainter gates"—which control water flow over the dam—to correct a design deficiency. Irrigators that draw water from the dam are responsible for paying for part of the $30 million repair.
These repairs mark the Corps' first application of a formerly-unused provision in law that lowers the share of the cost that irrigators pay. We examined how use of this provision changed the total amount owed by irrigators and the steps the Corps is taking to use this provision more broadly.
Harlan County Dam in Nebraska
Picture of the Harlan County Dam in Nebraska when repairs were being made to the dam's Tainter gates.
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What GAO Found
In January 2019, the U.S. Army Corps of Engineers (Corps) decided to apply a formerly unused provision in law to lower the share of costs of repairing the Harlan County Dam to be paid by irrigation districts that benefit from the dam. The repair project involved addressing a design deficiency with the dam's "Tainter gates"—a commonly used type of gate to control the flow of water over the dam. In initial planning for the major repair project in 2012, the Corps determined that the irrigation districts were to pay their full share of costs for these repairs—that is, the same share of costs the districts pay for routine operations and maintenance costs. Although the repairs to the Tainter gates were needed to meet updated design standards and address safety concerns, the Corps had initially followed long-standing policy to not use a provision—called the state-of-the-art provision—that lowers a user's share of costs when repairs are needed to meet updated design or construction criteria deemed necessary for safe operation of the dam. However, GAO recommended in December 2015 and a provision in law subsequently required that the Corps clarify policy guidance on when the state-of-the-art provision might apply. Since then, the Corps and the Assistant Secretary of the Army for Civil Works had been contemplating changes to the policy and, in January 2019, decided to apply this provision for the first time to the portion of the major repairs needed to address changes in design criteria for Tainter gates at the Harlan County Dam. More broadly, in March 2019, the Corps began implementing a new policy that allows for use of the state-of-the-art provision across its dam portfolio.
The Bureau of Reclamation (Reclamation), the agency responsible for managing contracts with irrigation districts at the Corps' dams in western states, executed repayment contracts in 2016 with the two irrigation districts that use water from the Harlan County Dam, and the irrigation districts began making payments that year. The existing repayment contracts allow the irrigation districts to pay their full cost share for the roughly $30 million major repair project with interest over 50 years. Following the January 2019 decision, the Corps reexamined the project's costs and concluded that a majority of these costs was attributable to work covered by the state-of-the-art provision and thus subject to a lower cost share. Overall, with this decision, the irrigation districts' repayment obligation is expected to be reduced to approximately $2.1 million, which is about half of the original amount owed. Reclamation is taking steps to update contracts given these changes; these steps include amending existing contracts to reflect the lower amount owed for repairs not subject to the lower cost share and executing new contracts for costs to be repaid at the lower cost share. Completing these contract actions will take several months, according to Reclamation officials.
Why GAO Did This Study
The Corps operates over 700 dams that provide a wide range of benefits such as flood control and irrigation. In Nebraska, the Corps operates the Harlan County Dam, which is a source of water used by two irrigation districts. The irrigation districts are responsible for paying a share of costs incurred by the Corps to operate and maintain as well as make major repairs to the dam. In 2018, the Corps completed a roughly $30 million major repair project of this dam's Tainter gates out of concern that they might fail due to a deficient design. For this major repair project and others, some users of dams have raised questions about how the Corps determines what share of costs the users have to pay.
The America's Water Infrastructure Act of 2018 included a provision for GAO to review the Tainter gate repair project at the Harlan County Dam. This report examines, among other things, (1) the Corps' decisions regarding cost sharing with irrigation districts for the repair project at the Harlan County Dam and (2) the status of irrigation districts' repayment for their share of costs for the repair project.
To address these objectives, GAO examined the Corps' policy documents and reports, reviewed repayment contracts for the repair project managed by Reclamation, and interviewed Corps and Reclamation officials.
GAO is not making recommendations in this report.
For more information, contact Andrew Von Ah at (202) 512-2834 or firstname.lastname@example.org.