The estimated cost from Laguna Dam to Araz is $5,149,626, of which $1,600,000 will be the amount paid to the Government for a connection with Laguna Dam under the contract of October 23, 1918, between the Secretary of the Interior and the directors of the Imperial irrigation district. This leaves the cost of enlargement and construction $3,549.626, of which the Government will pay for one-third (for the Yuma project) under the above-mentioned contract, or $1,183.209, leaving the total net cost to the irrigation district $23,120,839. 10. POWER DEVELOPMENT. (a) Plans are made for a temporary power plant at Pilot Knob, where a drop of about 30 feet can be obtained by discharging the water into the Imperial Canal below Hanlon Headgate. This power will be available for construction purposes from Pilot Knob westward. (b) West of the sand hills there are two drops where it is planned to develop power. These are designated on the map and profile as power plant No. 1 and power plant No. 2. (c) At power plant No. 1 there is a fall of about 24 feet. The maximum discharge of the canal at this point is 6,000 second-feet, which will generate 12,270 turbine horsepower. Three miles east of this power plant there is a drop of 6 feet, which may in the future be carried downstream to power plant No. 1 by raising the canal banks and the structures at the power plant. This will increase the power output of this plant 25 per cent. (d) Power plant No. 2 has a fall of about 47 feet and the canal a maximum discharge of 5,500 second-feet. This will generate 22,000 turbine horse power. (e) The minimum discharge at Mesa power plants Nos. 1 and 2 will very likely fall to not more than 20 per cent of the maximum. This latter amount will be the limit of the output for commercial purposes less the amount required by the Yuma project and Imperial irrigation district for operating purposes and the pumping at the period of minimum discharge. (f) It is planned that the power equipment installed in the temporary power plant at Pilot Knob will later be transferred and installed in power plant No. 1. The temporary power plant at Pilot Knob will be built for construction purposes and the machinery later transferred to power plant No. 1. The tailrace channel with gates having been covered in the estimate cost of the canal. The unit prices used cover cost of power for operating the necessary machinery. The additional cost of erecting the plant at Pilot Knob should be depreciated into the cost of power used during the period of construction. (g) The estimated cost of developing the power plants without commercial transmission lines is as follows: Power plant No. 1: 15,340 turbine H. P. at $90 per H. P. (includes the development Total____ Power plant No. 2: 22,000 turbine H. P. at $90 per H. P. Penstock, tailraces, excavation for buildings. Total. $1, 380, 600 230,000 241, 590 1, 852, 190 1,980,000 330,000 346, 500 2,656, 500 Estimate of alternative plan.-An estimate is given below for the construction of a canal from Laguna Dam to Pilot Knob with a power plant at Pilot Knob. If the construction of the all-American canal should long be delayed it may become necessary to construct this section of the canal as an alternative and to develop power for the Yuma project. The estimate of a power plant here given is in lieu of the power plant proposed by the Yuma project near Araz, and will be in a position to deliver the desilted water into the Imperial Canal instead of back into the river as proposed in the original plans for the Araz plant. Power plant at Pilot Knob. 15,340 turbine H. P. at $90 per H. P.. Penstock, tailrace, excavating for buildings. 15 miles transmission line Araz to Laguna Dam for operating purposes Engineering and contingencies, 15 per cent_ Total About 40 per cent chargeable to Yuma project_ $1, 380, 600 230,000 30,000 246, 090 1,886, 690 754, 676 1, 132, 014 Estimates-All-American canal of capacity to furnish 6,000 second-feet for power at Pilot Knob. From which should be deducted the following: Cost of connecting with Laguna Dam (contract Oct. One-third cost of construction Laguna Dam to Araz $1,600,000 1, 183, 209 $2,783, 209 4, 255, 832 1, 132, 014 Net cost canal construction Imperial Valley. About 60 per cent of cost power development, Imperial Valley. (See sheet No. 28) Grand total_ 5,387, 846 UNCOMPLETED WORK. Plans for the complete change of the railroad tracks near Araz are still being studied and are yet to be adjusted with the railroad interests. The digging of test pits is still in progress and there is still considerable work to be done along this line. Observations are being made to determine the amount of and the direction of the movement of the sand dunes in the blow-sand area. These subjects will be covered in the final report. PORTER J. PRESTON, Engineer. YUMA, ARIZONA, Dec. 7, 1918. CONTRACT BETWEEN THE UNITED STATES AND THE IMPERIAL IRRIGATION DISTRICT. This agreement, made the 23d day of October, A. D. 1918, by and between the United States of America, acting in this behalf by Franklin K. Lane, Secretary of the Interior, hereinafter styled the United States, party of the first part, and the Imperial Irrigation, a corporation, duly organized and existing under and by virtue of the laws of the State of California, hereinafter styled the district, party of the second part, witnesseth: 2. Whereas in connection with the Yuma project, Arizona-California, under the provisions of the reclamation act of June 17, 1902 (22 Stat., 388), and acts amendatory thereof and supplementary thereto, and particularly section 25 of the act of April 21, 1904 (33 Stat., 224), the United States Reclamation Service has constructed on the Colorado River a dam known as the Laguna Dam and certain auxiliary works, situate about ten miles northeast of Yuma, Arizona, together with a main-supply canal extending from said dam southwesterly to a point known as Siphon Drop, situate in section 10, township 16 south, range 22 east, S. B. M.; and 3. Whereas under the aforesaid act of Congress the United States contemplates the reclamation of 120,000 acres of irrigable land, more or less, under the Yuma project with water from Colorado River diverted at Laguna Dam, and the district desires to change its point of diversion and secure the right to divert water at said dam for the irrigation of all irrigable land within the boundaries of the district; and 4. Whereas the district is authorized under chapter 160 of the Statutes of California, 1917, page 243, to contract with the United States for a supply of water for irrigation; 5. Now, therefore, in consideration of the mutual covenants and agreements to be kept and performed and considerations to be paid, as hereinafter provided, it is hereby agreed as follows, to wit: 6. That immediately on the execution of this contract the district shall proceed with diligence to secure data which, together with other available data and data to be gathered under the existing cooperative contract dated February 16, 1918, will constitute a complete detailed survey with specifications and estimates of cost for the following: (a) All necessary works and structures for the diversion of water from the Colorado River at Laguna Dam, thence through said existing main canal of the Yuma project, and sufficient enlargement and modification, including such works or devices as the Secretary of the Interior may require for the purpose of maintaining as near as may be the efficiency of the desilting and sluicing works at Laguna Dam, as such efficiency would be were the Yuma project fully developed, to divert and carry all water needed by the district for the irrigation of its lands above referred to without impairing the utilization of said Laguna Dam, main canal, and auxiliary works to the full extent necessary to irrigate the Yuma project when fully developed. (b) A main canal entirely within the United States, with all necessary appurtenant structures for the practical operation thereof, of sufficient capacity and proper construction to irrigate all lands in Imperial County, State of California, susceptible of economic irrigation from said canal. Such canal to connect with said main canal of the United States at a point described as Siphon Drop, and thence to connect with the canal system of said district in the United States upon the line located and approved as provided by the terms of the cooperative contract of February 16, 1918, above referred to. 7. Upon the approval by the Secretary of the Interior of the said survey, specifications, and estimates, said district will provide for beginning and carrying to completion with due diligence, at the cost of the district, the work of construction and installation at the Laguna Dam and on the main canal, described in and contemplated by this agreement, and the district shall provide proper pecuniary support for the same in advance in a manner satisfactory to the Secretary of the Interior. All such work shall be carried on in such manner as not to interfere with the proper operation of the Yuma project by the United States, and the district will promptly carry out any measures required by the United States or its authorized agents to avoid or relieve any interference with the delivery of water to the Yuma project during and due to such construction, and will save the United States harmless as to any claims for damages that may be presented by reason thereof. 8. All work of construction and installation, and the materials used therein, shall at all times be subject to the approval of the Secretary of the Interior and be under the supervision and inspection of his authorized agents and engineers, to the end that the works shall conform strictly with said surveys and specifications and such modifications thereof as the Secretary of the Interior may approve in writing. In case any of said works are constructed under contract made by the district and are not in accordance with said surveys and specifications, the Secretary may, at his option, replace such unsatisfactory construction work at the expense of the district, or stop said work of construction or cancel this contract, or resort to any other lawful remedy, and the decision of the Secretary of the Interior whether said surveys and specifications or modifications thereof have been complied with shall be final and conclusive. The district shall make complete detailed progress reports of the said construction work upon demand of the Secretary of the Interior. The cost of the inspection on the part of the United States provided by this section shall be paid by the district to the United States upon demand. 9. For the right to use the Laguna Dam, the main canal, and appurtenant structures, and divert water, as herein provided, the district agrees to pay to the United States the sum of $1,600,000, in twenty installments, the first of which shall become due and payable December 31, 1919, and subsequent installments annually thereafter. The first four installments shall each be two per centum, the next two installments each four per centum, and the next fourteen each six per centum of the total amount. Upon failure of the district to make any such payment at the time and in the amount specified, then all rights under this contract shall be at an end and all payments theretofore made shall become forfeited to the United States as liquidated damages; and as a further consideration for entering into this contract, on the part of the United States, the district hereby releases and relinquishes any and all claims whatsoever for said moneys or any portion thereof so forfeited and paid as liquidated damages: Provided, That the Secretary of the Interior may, in his discretion, extend the time for any such payment upon the payment of seven per cent interest in advance. 10. Subject to the provisions of the reclamation act of June 17, 1902 (32 Stat., 388), and acts amendatory thereof and supplementary thereto, the United States shall have and retain perpetually the title to and the complete control, operation, and management of said Laguna Dam, auxiliary works, and enlarged main canal from the dam to and including the Siphon Drop with appurtenant structures as enlarged, including the diversion works at Siphon Drop for the diversion and delivery of water to the Yuma project and the district. The district shall pay to the United States quarterly, on demand, April 1, July 1, October 1, and December 31, its proportionate share of the cost of operation and maintenance of said dam, auxiliary works, and enlarged main canal for the preceding quarter, such payment by the district to bear the same ratio to the total cost of such operation and maintenance as the amount of water received by the district at the point of delivery to the district's canal at Siphon Drop bears to the total amount of water carried in said main canal at that point plus the amount of water diverted from the canal above the Siphon Drop for use on the Yuma project lands; provided that such extraordinary expense as may be caused by the operation of such desilting works as may be necessary to as nearly as may be maintain the efficiency of the desilting works at Laguna Dam as such efficiency would be were the Yuma project fully developed, shall be borne by Imperial irrigation district. Such extraordinary expense, if any, shall be determined by the Secretary of the Interior. If the district fails to pay to the United States within thirty (30) days after rendition of bill, all operation and maintenance charges as determined by the Secretary of the Interior as they become due, the Secretary of the Interior, in addition to any other remedy which may be available to him for recovery of such charges, is authorized to shut off water from the intake of the district unti such time as all sums due have been paid, with interest thereon at the rate of 7 per cent per annum from rendition of bill. 11. The United States reserves the right to arrange for the connection with and use of Laguna Dam on such terms as the Secretary of the Interior may deem expedient, by any other irrigation enterprise, district, corporation, or individual; also of the headworks and main canal and other governmentally constructed works, and works constructed jointly by these parties, after proper enlargement and modification, on terms herein stipulated, without, however, impairing the utilization of said dam, canal, and other works to the extent necessary to irrigate the lands within the boundaries of Imperial irrigation district. 12. The United States reserves the right to develop power with the water in the enlarged main canal down to and including Siphon Drop. All other power possibilities in the main canal down to and including some convenient power site near Pilot Knob shall be developed by the United States to the extent deemed expedient by the Secretary of the Interior, at the joint expense and for the joint benefit of the Yuma project and the Imperial irrigation district, as herein provided. The apportionment of the cost of canal and headworks alterations and enlargement, and of canal extension from the Laguna Dam to the site selected for power development near Pilot Knob, shall be made to the United States (for the Yuma project) and to the Imperial irrigation district, in the proportion that 2,000 second-feet bears to the total canal enlargement, less 2,000 second-feet. The cost of constructing power plants, transmission lines, and other power plant accessories shall be also apportioned to Yuma project and the district, respectively, in the ratio that 8,500 water horsepower bears to the aggregate water horsepower capacity of the plant installed. The operation and maintenance of any such power plant or plants constructed for joint benefit and the sales of power therefrom shall be under the control of the Secretary of the Interior and charges for commercial power shall be upon rules adopted by the Secretary of the Interior applying equally to both valleys. Such power as in the judgment of the Secretary of the Interior is necessary for pumping and other operation and maintenance purposes shall be delivered to the Yuma project and to the Imperial irrigation district, at the cost of development thereof, plus 10 per cent, said cost to include interest at 5 per cent per annum on the capital invested in power plants, transmission lines, and power-plant accessories, and also a proportional part of the headworks and canal enlargement from Laguna Dam to Pilot Knob, determined by the relation 2,000 secondfeet bears to the total enlarged canal capacity and reasonable depreciation as may be determined by the Secretary of the Interior. The preference right to purchase power developed at the price herein specified shall be given over other uses of power, to the requirements of the Yuma project (limited to an area not exceeding 120,000 acres) for power to be used in pumping irrigation water. The profits from power sales or power leases shall be divided between the Yuma project and the Imperial irrigation district in the proportion of their respective investments in power plants ,transmission lines, and power-plant accessories, and in the canal and headworks alterations, canal enlargement, and canal extension "s" from the Laguna Dam to and including the power-house site near Pilot Knob, to be determined by the Secretary. In case capacity be also provided by enlargement for the irrigation of lands in the United States outside of the Imperial irrigation district, then the cost of enlargement computed as above as chargeable to the Imperial irrigation district shall be borne "by such district |