[Senate Hearing 110-571]
[From the U.S. Government Publishing Office]
S. Hrg. 110-571
MISCELLANEOUS WATER BILLS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WATER AND POWER
of the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
ON
S. 2842 S. 3189
S. 2974 H.R. 3323
__________
JULY 8, 2008
Printed for the use of the
Committee on Energy and Natural Resources
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45-191 PDF WASHINGTON DC: 2008
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
DANIEL K. AKAKA, Hawaii PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota LARRY E. CRAIG, Idaho
RON WYDEN, Oregon LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana JIM DeMINT, South Carolina
MARIA CANTWELL, Washington BOB CORKER, Tennessee
KEN SALAZAR, Colorado JOHN BARRASSO, Wyoming
ROBERT MENENDEZ, New Jersey JEFF SESSIONS, Alabama
BLANCHE L. LINCOLN, Arkansas GORDON H. SMITH, Oregon
BERNARD SANDERS, Vermont JIM BUNNING, Kentucky
JON TESTER, Montana MEL MARTINEZ, Florida
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
Frank Macchiarola, Republican Staff Director
Judith K. Pensabene, Republican Chief Counsel
------
Subcommittee on Water and Power
TIM JOHNSON, South Dakota, Chairman
BYRON L. DORGAN, North Dakota BOB CORKER, Tennessee
RON WYDEN, Oregon LARRY E. CRAIG, Idaho
MARIA CANTWELL, Washington JIM DeMINT, South Carolina
KEN SALAZAR, Colorado JOHN BARRASSO, Wyoming
BLANCHE L. LINCOLN, Arkansas GORDON H. SMITH, Oregon
JON TESTER, Montana JIM BUNNING, Kentucky
Jeff Bingaman and Pete V. Domenici are Ex Officio Members of the
Subcommittee
C O N T E N T S
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STATEMENTS
Page
Allard, Hon. Wayne, U.S. Senator From Colorado................... 4
Barrasso, Hon. John, U.S. Senator From Wyoming................... 2
Gimbel, Jennifer, Director, Colorado Water Conservation Board,
Denver, CO..................................................... 30
Johnson, Hon. Tim, U.S. Senator From South Dakota................ 1
Johnson, Robert W., Commissioner, Bureau of Reclamation,
Department of the Interior..................................... 7
Keppen, Dan, Executive Director, Family Farm Alliance, Klamath
Falls, OR...................................................... 20
Long, Bill, President, Southeastern Colorado Water Conservancy
District, Las Animas, CO....................................... 27
Salazar, Hon. Ken, U.S. Senator From Colorado.................... 2
Tester, Hon. Jon, U.S. Senator From Montana...................... 1
APPENDIXES
Appendix I
Responses to additional questions................................ 39
Appendix II
Additional material submitted for the record..................... 53
MISCELLANEOUS WATER BILLS
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TUESDAY, JULY 8, 2008
U.S. Senate,
Subcommittee on Water and Power,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:35 p.m. in
room SD-366, Dirksen Senate Office Building, Hon. Tim Johnson
presiding.
OPENING STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH
DAKOTA
Senator Johnson. I call to order this hearing before the
Water and Power Subcommittee. It is my pleasure to welcome
everyone here this afternoon. Today's hearing involves four
separate bills that are pending before the subcommittee.
These bills cover very different subjects in the area of
water resources management.
S. 2842, introduced by Senator Reid, addresses aging
infrastructure issues within the Bureau of Reclamation.
S. 2974, introduced by Senators Allard and Salazar, would
authorize a municipal water supply project in Colorado known as
the Arkansas Valley Conduit.
S. 3189, introduced by Senator Bingaman and Ranking Member
Domenici would amend existing legislation authorizing the Upper
Colorado and San Juan River ESA recovery programs.
H.R. 3323 would authorize a title transfer for facilities
associated with a Reclamation Project in Southern California.
These bills all represent matters which are of extreme
importance to different areas of the country. While time is
beginning to run short in this Congress, the subcommittee will
look closely at these bills and work with the sponsoring
members to try and make progress toward enactment.
Senator Corker, the subcommittee's ranking member, could
not be with us this afternoon. So let me turn to the other
Senators on the subcommittee and ask for their opening
comments.
Senator Tester.
STATEMENT OF HON. JON TESTER, U.S. SENATOR
FROM MONTANA
Senator Tester. Thank you, Mr. Chairman. I appreciate your
holding this hearing. I want to welcome Commissioner Johnson
back to the Senate.
Water is incredibly important. It's incredibly important
for everybody. So to say it's more important in the West than
anywhere else would probably be a bit biased, but what the
heck. It's very important in the West.
I can tell you that there are literally hundreds of water
projects, some that the Bureau of Rec has oversight over, some
they don't. But there's just a ton of projects out there that
have been built for going on almost 100 years that are wore
out. You know, our forefathers did a good job of developing our
infrastructure. Develop things like irrigation projects and
water for towns and dams for flood safety and the list goes on
and on and on.
But now it is long past time, in my opinion, that we take a
very proactive stand on infrastructure, particularly water
infrastructure in this country, and make an investment that I
think we are in dire need of. We have several projects in the
State of Montana that are going to have devastating impacts on
the people of the State and quite honestly on some of our food
supply if they are not dealt with sooner rather than later.
So with that, I look forward to the testimony of
Commissioner Johnson, in particular and I look forward to
asking a few questions.
Senator Johnson. Senator Barrasso.
STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR
FROM WYOMING
Senator Barrasso. Thank you very much, Mr. Chairman. I just
want to say that the bill introduced by Chairman Bingaman and
Ranking Member Domenici, S. 3189, is very important to the
people of the State of Wyoming. The Upper Colorado River
Recovery Implementation Program has been very successful in
providing workable solutions to provide water resources to
Wyoming residents while at the same time providing protection
for endangered fish.
Funding for this Fish Recovery Program has built fish
streams, fish passages, hatcheries, flooded bottom lands and
reservoirs to help these endangered fish in the Upper Colorado
River. Providing additional authority to repair and to maintain
these facilities is necessary to keep Wyoming in compliance
with the Endangered Species Act and to keep water flowing to
our constituents. So the passage of this bill is important to
the ability of Wyoming to continue to develop our compact of
portioned water resources.
I do want to make sure that all affected parties, including
the rate payers, have their concerns addressed. So I urge the
committee to address those concerns that may be outstanding
within the bill. Thank you, Mr. Chairman.
Senator Johnson. Senator Salazar.
STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR
FROM COLORADO
Senator Salazar. Thank you very much, Chairman Johnson.
It's always an honor to see you at the helm of this committee
and for your great work on behalf of the people of South Dakota
and this country. I want to thank you for holding this hearing.
I wanted to, in particular welcome my colleague from
Colorado, Senator Wayne Allard, to testify on behalf of a bill
that he's been championing for a very long time. It's a bill
whose time has come. I am very hopeful that notwithstanding
Commissioner Johnson's testimony which will probably be in
opposition to the bill, that this committee in a bipartisan
basis in this U.S. Senate and this U.S. Congress will roll the
Bureau of Reclamation and that ultimately we are going to get a
conduit bill out to the small communities downstream of Pueblo,
Colorado.
The Arkansas Valley Conduit was originally authorized in
1962 under the Frying Pan Arkansas Project. This proposed a 130
mile conduit from Pueblo Dam to the city of Lamar will deliver
water to numerous municipal water providers to serve an
estimated 50,000 individuals in 22 towns throughout rural
Southeastern Colorado. A part of what I have called in the past
here, Chairman Johnson, for the U.S. Senate, part of that
forgotten America that really needs to have an injection of new
opportunities on this clean water supply will help this part of
Colorado.
The reason that the conduit has never been built is simple.
The original authorization called for local communities to bear
100 percent of the construction costs, an arrangement that has
never proven feasible for this rural, economically depressed
area of my State. Today construction of the conduit is
estimated to cost $300 million and taking until 2021 to
complete.
While this is a substantial price tag, the project will
without question yield significant long term benefits to the
residents of Southeastern Colorado. As I have said many times
before water is the life blood of the communities in our arid
West. Water capacity is an essential prerequisite to our
community. I've put the rest of my statement in the record.
[The prepared statement of Senator Salazar follows:]
Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado
Chairman Johnson and Ranking Member Corker, thank you for holding
this legislative hearing today. I am looking forward to discussing the
bill that Sen. Allard and I have been working on with the Southeastern
Colorado Water Conservancy District to make the Arkansas Valley Conduit
a reality in southern Colorado.
The Arkansas Valley Conduit (AVC) was originally authorized in 1962
under the Fryingpan-Arkansas or ``Fry-Ark'' Project. This proposed 130
mile conduit from Pueblo Dam to the city of Lamar will deliver water to
numerous municipal water providers to serve an estimated 50,000
individuals in 42 towns throughout rural southeastern Colorado.
The reason that the conduit has never been built is simple: the
original authorization called for local communities to bear 100 percent
of the construction costs--an arrangement that has never proven
feasible for this rural, economically depressed area of my state.
Today, construction of the AVC is estimated to cost $300 million and
take until 2021 to complete. While this is a substantial price tag, the
project will without question yield significant long-term benefits to
the residents of southeastern Colorado. As I have said many times
before, water is the lifeblood of communities in the arid West. Water
capacity is an essential prerequisite to economic development. The
conduit will provide up to 25,000 acre-feet of high-quality water that
will require minimal treatment to reach drinking standards. This new
source of potable water will allow these communities to reduce existing
water treatment costs and better conserve and manage their existing
ground-water resources and infrastructure. This regional, large-scale
approach to water delivery is a proven cost-savings practice that will
benefit these communities for many decades to come.
Over the past several years community leaders from southeastern
Colorado have worked closely with the Colorado congressional delegation
and the Bureau of Reclamation to explore potential cost-share
arrangements to make the financial burdens incurred by the AVC bearable
to these local communities. The bill under consideration today, S.
2974, is the product of some creative thinking and a great deal of hard
work, and represents a novel approach to funding a large-scale water
project. The Fry-Ark is unique among Reclamation water projects in that
it is currently generating significant revenue from so-called ``excess
capacity'' contracts for storage of non-Fry-Ark water in Fry-Ark
facilities. The original Fry-Ark authorization permits the use of
revenues from the project for construction of authorized project
features. This bill would direct these excess-capacity revenues be used
to fund the lion's share of the local contribution from a 65-35
federal-local cost share for the project.
I am proud of this legislation and the hard work by many
stakeholders to bring it before our committee today. I am also proud of
the leadership and adept management of the Fry-Ark project by the
Southeastern Water Conservancy District, which has positioned the
project for this long-awaited expansion. I am hopeful that this bill
will become a model for future endeavors. The conduit will make a real
difference in the lives of those who call the Arkansas River Valley
their home and I look forward to discussing this bill with our
panelists.
Thank you, Mr. Chairman.
Senator Salazar. But I want to make just one other quick
comment and that is there have been a number of partners,
Chairman Johnson, who've been working on this legislation for a
very, very long time. It is sometimes unheard of that a local
community that is as poor as the communities downstream of
Pueblo would go and ask an agency of the State of Colorado, the
Colorado Water Conservation Board, for a loan of some $80
million in order to be able to move forward with this project
and to be able to provide a local share as a contribution to
making this conduit a reality.
Senator Allard and I held meetings and hearings on this
subject over the last several years. It's something which he
and I are 100 percent behind. I'm very hopeful that this
committee will be supportive of our efforts and ultimately that
we will get this through the U.S. Senate today.
Senator Johnson. Welcome Senator Allard. Please proceed.
STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR
FROM COLORADO
Senator Allard. Mr. Chairman, thank you for the welcome. I
trust you had a good Fourth of July. I relish the opportunity
of being able to work with you both as a member in the House on
the AG Committee and then over here on issues that are
important to the West. I consider South Dakota part of that.
So I also want to welcome the other members that are here
and your support and diligence in dealing with those issues
that are important to many of us as it involves water. I'm
sorry to see that the Ranking Member Corker didn't make it
here, but understand why. I appreciate your recognizing that in
the comment.
I just want to thank you, Mr. Chairman and Ranking Member
Corker for holding this important hearing and for allowing me
the opportunity to appear before you today. I'm here to testify
in support of S. 2974, that's the Arkansas Valley Conduit Act
of 2008.
As members of this subcommittee know water is one of our
most precious resources. This is especially true in the West
where some areas continue to struggle through a multi-year
drought. The backbone of Colorado, like South Dakota and
Tennessee, is found in our small and rural communities.
Unfortunately for our rural communities things that folks
in the metropolitan area take for granted can be difficult to
come by. This should not include safe, clean drinking water.
That's why I have long worked to enact legislation that would
help the Arkansas Valley Conduit become a reality.
I should note that the Arkansas Valley Conduit was
originally authorized in Congress in 1962. My esteemed
colleague from Colorado had mentioned that. So it's been in the
works for a long time.
Something that's been very important to that part of the
State become much, much more important recently because of the
tougher laws that have been passed for clean water and while we
recognize the quality of water that we have to meet public
health standards for those communities. So we've been working
on it for over forty years as a part of the Frying Pan Arkansas
Project. The original Fry-Ark Project authorizing legislated
granted the Secretary of the Interior the authority to
construct the Arkansas Valley Conduit.
This legislation simply reauthorizes that authority and
adds a workable cost share provision. Due to the authorizing
statues lack of cost share provision and Southeastern
Colorado's depressed economic status, the conduit was never
built. Until recently there was no urgent need for it. The
region was fortunate to enjoy an economical and safe
alternative to the pipeline transportation of Project Water and
that was the Arkansas River itself.
Unfortunately it is no longer the case. While the Federal
Government has continued to strengthen its unfunded water
quality standards these communities have fallen further and
further behind in obtaining those standards. As far back as
1950 the Bureau of Reclamation determined that the quality of
local drinking water supplies were unacceptable. Clear back to
1950.
In response to a number of water providers falling out of
compliance with existing EPA water quality standards, the local
communities formed a committee to evaluate alternative
approaches to solving this problem. The Arkansas Valley Conduit
was found to be the most viable solution. However, local
communities are unable to fund the conduit under existing
circumstances.
This legislation is essential if we are to bring local
water providers into compliance with Federal water quality
standards. It will finally provide a long term solution to the
region's water quality concerns. The Arkansas Valley Conduit
will deliver fresh, clean water to 16 cities and 25 water
agencies in Bent, Crowley, Kiowa, Prowers, Pueblo and Otero
counties when completed. That's an area slightly larger than
the entire State of New Hampshire. The largest city served by
the conduit is La Jara, Colorado with a population of
approximately 12,000 people.
The local sponsors of the project have completed an
independently funded feasibility study of the conduit and have
developed a coalition of support from water users in
Southeastern Colorado. I'm also pleased that the State of
Colorado has contributed a great deal of funding for the study
through the Colorado Water Conservation Board. This legislation
enjoys strong, bipartisan support both locally and here in
Washington.
I'm pleased that I've been able to work with Senator
Salazar on this measure. His work as a member of this
subcommittee is appreciated and these are one the things that
we have been able to work and both feel highly committed is
very important to the general welfare to the State of Colorado.
You know, we, I think, both agree that, you know, the weakest
link of your economy can affect your whole State. This area
needs to have clean water so it continues their economic growth
and even sustain what they have now.
I thank you Mr. Chairman. I appreciate the committee's time
and consideration of this important matter and hope that we
will be able to move this legislation forward. Thank you for
your time.
Senator Johnson. Thank you, Senator Allard.
We'll now turn to the first panel of witnesses for today's
hearing. Representing the Administration is Bob Johnson, the
Commissioner of Reclamation, who will speak to all the bills on
today's agenda. Welcome to you Commissioner Johnson and thank
you for making yourself available.
Before starting, I'd like to note that the subcommittee has
received additional written testimony on several of the bills
before us today. That testimony, as well as the written
submission of all of today's witnesses, will be made part of
the official hearing record.
[The prepared statement of Senator Allard follows:]
Prepared Statement of Hon. Wayne Allard, U.S. Senator From Colorado
Thank you M--Chairman and Ranking Member Corker, for holding this
important hearing and for allowing me the opportunity to appear before
you today.
I am here to testify in support of S.2974 the Arkansas Valley
Conduit Act of 2008. As members of this Subcommittee know water is one
of our most precious resources. This is especially true in the West
where some areas continue to struggle through a multiyear drought.
The backbone of Colorado, like South Dakota and Tennessee, is found
in our numerous small and rural communities. Unfortunately for rural
communities things that folks in metropolitan areas take for granted
can be difficult to come by. This should not include safe, clean
drinking water. That is why I have long worked to enact legislation
that would help the Arkansas Valley Conduit become a reality.
I should note that the Arkansas Valley Conduit was originally
authorized by Congress in 1962, over forty years ago, as a part of the
Fryingpan-Arkansas Project. The original ``Fry-Ark'' Project
authorizing legislation granted the Secretary of the Interior the
authority to construct the Arkansas Valley Conduit. This legislation
simply reauthorizes that authority and adds a workable cost-share
provision.
Due to the authorizing statute's lack of a cost share provision,
and Southeastern Colorado's depressed economic status, the Conduit was
never built. And, until recently, there was no urgent need for it--the
region was fortunate to enjoy an economical and safe alternative to
pipeline-transportation of project water: the Arkansas River.
Unfortunately, this is no longer the case. While the federal government
has continued to strengthen its unfunded water quality standards, these
communities have fallen further and further behind in attaining them.
As far back as 1950, the Bureau of Reclamation determined that the
quality of local drinking water supplies were ``unacceptable.''
In response to a number of water providers falling out of
compliance with existing EPA water quality standards, the local
communities formed a committee to evaluate alternative approaches to
solving this problem. The Arkansas Valley conduit was found to be the
most viable solution. However local communities are unable to fund the
Conduit under existing circumstances.
This legislation is essential if we are to bring local water
providers into compliance with federal water quality standards and it
will finally provide a long term solution to the region's water quality
concerns.
Senator Johnson. Mr. Johnson, please go ahead and summarize
your written testimony. Following that, we'll have a brief
question and answer period for you.
STATEMENT OF ROBERT W. JOHNSON, COMMISSIONER, BUREAU OF
RECLAMATION, DEPARTMENT OF THE INTERIOR
Mr. Johnson. Thank you, Chairman Johnson and members of the
committee. I'm pleased to be here and present the
Administration's views on these bills.
S. 2842 would direct the Secretary to devise and carry out
new annual inspection processes for canals, levees, tunnels,
dikes, pumping plants, dams and reservoirs. The bill seeks to
assure the integrity of our infrastructure and protect the
public safety, two of Reclamation's highest priorities.
Reclamation owns 8,000 miles of canals, 24,000 miles of
laterals, 13,000 miles of drains, 450 dams and many other
pieces of infrastructure.
Two-thirds of these facilities have been transferred to
local parties to operate and maintain. Reclamation uses
established inspection processes under contracts entered into
with our operating partners to ensure proper operation and
maintenance. We also have policies and procedures in place to
regularly review the condition and operation of facilities
reserved for operation maintenance by the Bureau of
Reclamation.
The recent failure of the Truckee Canal in Nevada has
caused us to take a fresh look at our approach to maintaining
our canals that run through urban areas. We are conducting
expedited inspection of such facilities and developing, in
conjunction with our operating partners, new standards for
management of our urban canals.
Certain provisions of S. 2842 would pose significant
implementation challenges for Reclamation, specifically
sections three and four. My written statement speaks to the
difficulties in detail. We would be glad to work with the
committee to further explore how we can address our shared goal
of infrastructure safety.
S. 2974 deals with a proposal that Reclamation has
testified on before, most recently in March 2008 before the
House committee and in September 2006 before this committee.
While the Arkansas Valley Conduit Proposal in Colorado has not
changed since those hearings, the financing mechanism in this
current bill is new. We are encouraged that the level of cost
sharing in this bill is better than the one offered in the
House Bill.
However, Reclamation cannot say with certainty that the
financing regime referenced in section two of this bill will
provide adequate funding for a pipeline that is estimated to
cost between $265 and $345 million. Today, Reclamation has
entered into three such long term excess capacity contracts
which generate annual revenue of only about $1 million per
year. They are ``if-and-when'' contracts, and depend on
hydrology and water supply considerations that are outside of
Reclamation's control.
Having said that, we recognize the importance of the
conduit proposal to Southeastern Colorado and remain committed
to work with the Southeastern Colorado Water Conservancy
District to further define and clarify provisions within this
bill. We stand ready to lend staff expertise to deepen
discussions on alternative financing for the canal with the
districts, with Senator Allard, Senator Salazar and with this
committee.
The Department supports S. 3189, the Upper Colorado River
and San Juan River Fish Recovery Programs which were initiated
in 1988 and 1992, respectively. The program goals are to
recover populations of endangered fish while providing for the
continued development of water resources in compliance with the
Endangered Species Act. Program actions provide Endangered
Species Act compliance for more than 1,600 Federal, Native
American and non-Federal water projects depleting more than
three million acre feet of water per year from the San Juan and
Colorado Rivers and their tributaries.
Failure to address these programs' funding needs would
require re-initiation of ESA consultation on all Federal
projects that rely on the programs for ESA compliance. There's
strong, broad based stakeholder support for this legislation
and with the changes identified in my written statement the
Department supports passage.
The Department also supports H.R. 3323. This bill would
authorize the conveyance of a federally owned distribution
system associated with the Cachuma Project to the Goleta Water
District. All of the facilities that would be transferred are
or were in the district's boundaries and includes 59 miles of
pipelines, laterals, pump stations and associated structures.
The district completed its repayment obligation in 2002 and
has operated and maintained this distribution system since
1952. This title transfer is beneficial to the district and
Reclamation. Again, the Administration supports this bill.
Mr. Chairman, this concludes my verbal remarks. I'd be
pleased to answer any questions.
[The prepared statements of Mr. Johnson follow:]
Prepared Statement of Robert W. Johnson, Commissioner, Bureau of
Reclamation, Department of the Interior
S. 2842
Mr. Chairman and members of the subcommittee, I am Robert W.
Johnson, Commissioner of the Bureau of Reclamation. I am pleased to
provide the Department of the Interior's views on S. 2842, the Aging
Water Infrastructure and Maintenance Act. While we share the sponsors'
goals of reliable and safe facility operations, the Department does not
support S. 2842.
Reclamation testified before this Subcommittee at an oversight
hearing on aging infrastructure on April 17, 2008 and, at that time, I
expressed Reclamation's commitment to working with our partners to
assure the integrity and reliability of our Federal water and power
assets. Aging infrastructure continues to be an important topic for any
number of Federal agencies, but Reclamation's April 17, 2008 testimony
emphasized the fact that a facility's age, by itself, is not the sole
determinant of its reliability--rather, facility condition is a central
factor in predicting the long-term functionality and maintenance need
of Reclamation assets. Inspections and preventive maintenance play a
critical role in assuring this functionality.
Since the April hearing, Reclamation has experienced a second canal
failure on the Newlands Project in Nevada, this one on the V-Line
Canal, near a wasteway leading back to the Carson River. While this
incident did not result in residential flooding, it highlighted the
limits of facility maintenance and inspections in preventing
infrastructure failures to Reclamation and its customers. While public
safety is Reclamation's highest priority, even the most thorough
inspections, on tens of thousands miles of canals and laterals, will
never be able to detect every possible defect.
The bill provides that DOI conduct annual inspections of canals,
levees, tunnels, and other infrastructure that are under DOI's
jurisdiction. While the Department supports the intent of the bill, it
potentially imposes new costs upon DOI. The Bureau of Reclamation
already conducts inspections of its assets. Furthermore, the Bureau of
Reclamation's five-year Capital Improvement plan helps prioritizes
assets based on their condition. The Bureau's Capital Improvement plan
includes a composite score of the asset that takes into account a
number of variables. In addition, the bill presents feasibility
concerns because the Department's assets do not fit into ``one size
fits all'' standards that are prescribed in the legislation.
Specifically, the bill's requirement in Section 3(c) to develop a
National Priority List concerns Reclamation. First, development of
objective criteria to rank facilities in terms of risk would be a
significant undertaking, as would the annual review of facilities to
reprioritize the list. Second, Reclamation already promotes preventive
maintenance through regular facility reviews to identify operations and
maintenance (O&M) deficiencies at an early stage. While these processes
are thorough, they will never detect every deficiency, and with about
8,116 miles of canals in the Reclamation inventory, it is not realistic
or cost-effective to provide sufficient information on each project
facility as described in the bill. Through facility reviews,
Reclamation makes recommendations for noted deficiencies on project
facilities; cost estimates and recommended timeframes for related
repairs or replacements are discussed and documented in these
recommendations, and mutually agreed upon with the operating entities
at the time of the review.
Section 4 calls for development and publication of Reclamation-wide
standards, guidelines and regulations on O&M. The Department believes
this provision would impose new costs and duplicate processes and
practices that already exist or are currently underway at Reclamation.
Reclamation maintains O&M-related directives and standards in its
Reclamation Manual, as well as Reclamation-wide inspection requirements
and procedures that are posted on Reclamation's Web site and available
to our customers. Additionally, American Society of Civil Engineers
(ASCE) Manuals and Reports on Engineering Practice No. 57, Management,
Operation, and Maintenance of Irrigation and Drainage Systems, jointly
developed by Reclamation and ASCE, provides additional information and
standards related to the O&M of related facilities and systems. We
develop and circulate regular Water Operations and Maintenance
Bulletins, conduct an annual Water Management Workshop with our
operating partners, and Reclamation produces and regularly updates the
Facilities, Instructions, Standards and Techniques (FIST) manuals,
which provide the most current guidance on the operation of
hydroelectric and some water facility equipment.
Section 4 also presents a challenge to implement because the
breadth of Reclamation's facilities, their geographic locations, and
specific environments, do not lend themselves to ``one-size-fits-all''
standards and guidelines as described in the legislation. This would
also present difficulties in differentiating between ``structural
deficiencies'' caused by non-compliance with regulations and those
resulting from normal deterioration due to the age of the facility that
is beyond one's control.
It is worthwhile noting that the Department has developed an Asset
Management Plan (AMP) and called on each Bureau to prepare bureau-
specific AMPs summarizing their current asset inventory and
articulating a strategy and plan of action for improving the management
and condition of relevant inventory. These AMPs provide DOI and the
bureaus with the necessary tools to make wise investments and manage
assets in a cost effective manner.
Reclamation's Dam Safety Program prioritizes and ranks facilities
using a risk management approach. The President's budget request for FY
2009 is over $90 million, up about $15 million from FY 2008 for
evaluations and corrective (construction) actions. This program focuses
on 375 distinct dam and dike structures, where safety conditions are
more critical and where staff resources can be deployed for extended
periods of time. In contrast, the language of Section 4(c)(1) would
oblige Reclamation to study every distinct facility, regardless of
risk, which would include canals, levees, laterals, pipelines, tunnels,
drains, and other asset types far beyond the current resources of
Reclamation's inspection and review teams.
Additionally, it is not clear whether the authorization in S. 2842
would extend beyond Reclamation to other Interior bureaus and agencies,
such as Bureau of Indian Affairs irrigation and power systems, Bureau
of Land Management earthen livestock impoundments, and Fish and
Wildlife Service fishery and refuge facilities.
In addition, S. 2842 also authorizes $11 million for FY 2009
through FY 2013 for these annual inspections and related activities.
The Bureau focuses its resources on the programs and projects that will
best help it accomplish its primary missions of delivering water and
power. Creating additional obligations may limit the Bureau's
effectiveness in other key areas.
In light of these concerns, the Department cannot support S. 2842.
At the same time, it is useful to note that the Reclamation already has
a number of comprehensive programs for assessing the status and
condition of our infrastructure.
Approximately two-thirds of Reclamation's facilities are
transferred works; they are owned by the United States but operated and
maintained by others pursuant to contracts. Under the terms of the
transfer of operation and maintenance contracts and agreements, the
operating entities are often required to perform O&M of the facilities
at their own expense. Reclamation emphasizes the importance to our
partners of maintaining adequate emergency and replacement reserve
funds, typically required under contracts or agreements, to be able to
address operation, maintenance and replacement of project facilities.
Other existing programs where Reclamation already is working to
address aging infrastructure include the Review of Operation and
Maintenance Program, the Safety Evaluation of Existing Dams Program,
and monitoring Replacements, Additions, and Extraordinary Maintenance
activities.
Additionally, in response to the canal breach in Fernley, Nevada,
Reclamation has increased its attention to assessing canals located in
areas experiencing urban growth. This incident emphasized the need for
Reclamation to address the challenges that growth of urbanized areas in
proximity to long-existing canals poses within our project lands.
Vegetation and property encroachments are very real issues for the
operation and maintenance of Reclamation canals and other facilities.
These growth patterns have exposed residential areas to flood risks,
and indirectly created a public safety burden on Reclamation and our
partners like Truckee-Carson Irrigation District. In light of these new
challenges, Reclamation held a Canal/Asset Management meeting in May
with our stakeholders in Denver to discuss canal inspection procedures,
impacts of urbanization on Reclamation canals and on ways we can help
our operating partners address related infrastructure issues. Next for
Reclamation is to utilize the input from the discussions at this
meeting, in coordination with operating entities West-wide, to
systematically inspect the remainder of the identified canals or
reaches through urbanized areas.
We believe that these new tools, combined with the cooperation of
Reclamation's local partners, will assure the continued safe operation
of Reclamation's facilities. While canal breaches or delivery
interruptions will never be completely eliminated, we are committed to
reducing the probability and consequences of these failures West-wide.
We appreciate the committee's interest in these issues and look
forward to working with the Congress to continue developing solutions
that provide for the biggest net benefits to the Federal taxpayer.
This concludes my written statement. I would be pleased to answer
any questions.
S. 2974
Mr. Chairman and Members of the Subcommittee, I am Robert W.
Johnson, Commissioner of the Bureau of Reclamation. I am pleased to be
here today to present the Department of the Interior's views on S.
2974, legislation authorizing appropriations and the Arkansas Valley
Conduit in the State of Colorado. For the reasons described below, the
Department has significant concerns with S. 2974 and cannot support
this legislation.
The Arkansas Valley Conduit is an authorized feature of the 1962
Fryingpan-Arkansas Project (Fry-Ark Project), but never constructed due
to financing considerations. Today, increased water treatment costs due
to local groundwater quality and changing requirements of the Safe
Drinking Water Act, have renewed local interest in alternative means of
obtaining safe and clean water supplies for the Lower Arkansas Valley.
The Conduit would transport water about 110 miles from Pueblo Dam
(part of the Fry-Ark Project) to communities along the Arkansas River
to a point near Lamar, Colorado. The Lower Arkansas River Basin is
comprised of rural communities, with the largest town, Lamar, having a
population of approximately 8,600. The population anticipated to be
served by the Conduit is approximately 50,000. Total project costs were
roughly estimated in 2005 to be between $265 million and $345 million,
depending on the project features chosen for construction.
This legislation intends to utilize existing infrastructure as one
component in addressing a water need, proposes a different mechanism
for repaying the outstanding debt for the construction of current
features of the Fry-Ark Project (including nearly $38 million in
outstanding and uncontracted debt for the construction of Ruedi
Reservoir), and proposes one way to provide water for Lower Arkansas
basin communities.
Reclamation has testified previously on several versions of
legislation to fund construction of the Arkansas Valley Conduit (AVC).
The Department testified on H.R. 317 on March 13, 2008 before the House
Water & Power Subcommittee, and in September 2006 before this
Subcommittee on S. 1106. In both of those testimonies, Reclamation
cited those prior bills' cost share arrangement as inconsistent with
the existing AVC authorization in PL 87-590, which requires 100%
repayment of project features within 50 years. While this bill improves
upon past versions for cost-sharing requirements, S. 2974 also
continues to be inconsistent with the original Fry-Ark authorization by
providing that the Federal government bear 65 percent of the cost of
the project. In addition, several outstanding issues remain regarding
the funding source for the local cost share.
The legislation before the Subcommittee today, S. 2974, is a new
proposal that proposes a different financing arrangement involving
contracts that would provide a still-undetermined revenue stream for
repaying the Conduit. We have been happy to work with the Southeastern
Colorado Water Conservancy District on identifying and further refining
the complex financing concepts outlined in S. 2974.
Although the Department is appreciative of the work that has been
done, the Administration still has some significant outstanding
concerns with this legislation.
In particular, Reclamation does not believe the excess capacity
contracts referenced in Section 2(b) of this bill will provide adequate
funding for a pipeline that, in 2005, was priced between $265 million
and $345 million. Section 2(b) provides that any revenue derived from
contracts for the use of Fryingpan-Arkansas project excess capacity or
exchange contracts using Fryingpan-Arkansas project facilities shall be
credited to the actual cost of Ruedi Dam and Reservoir, the Fountain
Valley Pipeline, and the South Outlet Works at Pueblo Dam and Reservoir
until the date on which the payments to the Arkansas Valley Conduit
begin. After that, the revenue would be used for the Conduit.
To date, Reclamation has entered into three such long-term excess
capacity contracts, which generate annual revenue of only about $1
million per year. They are ``if and when'' contracts, which depend
heavily on hydrology and water supply considerations outside of
Reclamation's control. In addition, any new contracts take years to
negotiate and finalize. We do not believe that these revenues will be
sufficient to pay for the Conduit. Relying on these new contracts could
leave the Federal government responsible for the primary funding of
this project. Also, the revenues from these excess capacity contracts
would normally be deposited into the general Treasury after being
credited to project repayment. Therefore, using them in this manner
creates a troubling precedent. We cannot say what the potential loss to
the Treasury would be and would need to study this issue further if
this type of financing were to proceed.
Reclamation also has concerns regarding the overall Federal and
Non-federal cost share described in S. 2974. This type of credit toward
future projects may not comport with the Administration's fiscal
management policies and could potentially leave the Federal government
responsible for being the primary source of funding for all of these
types of projects in the future. Also, this type of applied cost
sharing appears to deviate from standard cost-sharing practices,
potentially creating a precedent that needs more careful consideration.
Finally, while incentivizing local sponsors to manage their water
resources responsibly can be a positive, we are concerned that this
type financing may allow project beneficiaries to not have to repay
their pre-existing obligations, which, in turn, may necessitate even
more Federal funding being dedicated toward this project. The loss to
the Treasury under our current contracting policies would be about $1
million annually, but could increase as these contracts increased.
We recognize the importance of the Conduit proposal to southeastern
Colorado, and remain committed to working with Congress and the
Southeastern Colorado Water Conservancy District to further define and
clarify provisions within this bill. However, for the aforementioned
concerns noted above, we cannot support S. 2974.
This concludes my statement, and I would be pleased to answer any
questions.
H.R. 3323
Mr. Chairman and Members of the Subcommittee, I am Robert Johnson,
Commissioner of the Bureau of Reclamation. I am pleased to be here
today to provide the Department's views on H.R. 3323, the Goleta
Distribution System Conveyance Act of 2007, to authorize the Secretary
of the Interior to convey a certain federally-owned water distribution
system of the Cachuma Project in California to the Goleta Water
District. The Administration supports H.R. 3323.
H.R. 3323 would transfer title of the federally owned distribution
system associated with the Cachuma project that is within the
boundaries of the Goleta Water District in Goleta, California. The
features that would be transferred to the Goleta Water District include
59 miles of pipelines and laterals, two pump stations and regulating
features, associated structures, and lands and rights of way. The
proposed transfer would apply only to land and facilities and would not
affect the District's existing water service contract with Santa
Barbara County Water Agency or the Federal Government's receipts from
water deliveries under that contract.
The Goleta Water District has operated and maintained this
distribution system since 1952 and fully met its repayment obligation
in 2002. This title transfer will enable the District to gain greater
local control of the distribution facilities that were constructed for
their use. It will also eliminate the need for some administrative
obligations that exist for the District. For example, once title is
transferred, the District will no longer be required to seek approval
from Reclamation for easements, crossing permits, or work on the
facilities.
In addition, this title transfer protects the financial interest of
the United States. Transferring title to these facilities will reduce a
number of administrative burdens on Reclamation including periodic
facility reviews that are currently required because it is a
Reclamation owned facility and the processing of paperwork that
currently consumes significant staff time. It will also ensure that
long-term responsibility for the operation, maintenance, management,
and regulation, as well as liability, for the transferred lands and
facilities, will rest with the District.
The process and cooperative approach used to negotiate and develop
this transfer should be a model for future title transfers throughout
the West. Reclamation and the District have worked effectively and
cooperatively throughout this process to address the elements required
for title transfer. We thank the District's representatives for their
work on this transfer and look forward to continuing to work with them
as the process draws to a close.
Mr. Chairman, thank you for your consideration of this bill. That
concludes my testimony, and I would be pleased to answer any questions.
S. 3189
Mr. Chairman and members of the Subcommittee, I am Robert W.
Johnson, Commissioner of the Bureau of Reclamation. I am pleased to
provide the Department of the Interior's views on S. 3189, a bill to
extend funding and authorization for ongoing endangered fish recovery
programs in the Upper Colorado and San Juan River Basins. The
Department supports passage of this bill, but recommends that some
changes be included as described below.
Public Law106-392 authorizes the Bureau of Reclamation to provide
cost sharing for construction of capital projects and annual base
funding for the operations of the Upper Colorado and San Juan Recovery
Implementation Programs (Programs). The current authorities provided by
P.L. 106-392 expire at the end of FY 2010. The proposed legislation
would amend P.L. 106-392 to incorporate several goals.
To date, the two Programs have expended a total of $77.8 million in
federal funds since inception (1988), with a solid record of
performance. Activities completed to date have included fish passage
improvements at Price-Stubb Dam (2008), and fish ladders and screens on
the Grand Valley Diversion Dam on the Colorado River. Along with
protections for the four listed fish species, water reliability has
also been protected, and no lawsuits have been filed on Endangered
Species Act compliance for any of the covered water projects on the
Colorado and San Juan Rivers since the two recovery programs were
constituted. The programs' efforts have resulted in fewer threats to
the survival of Colorado pikeminnow and razorback suckers, and the
highest larval counts ever recorded on the Green River for suckers in
2007.
I would like to describe the Department's views on the legislation
in detail. First, S. 3189 authorizes an additional $12 million in
federal expenditures for capital projects under the San Juan Program
for the purposes of: protecting endangered fish critical habitat and
infrastructure from rock slides in a reach of the San Juan River near
Farmington, New Mexico, which the Fish and Wildlife Service has
determined to be necessary for recovery; and repairing and replacing
capital facilities including fish passages, fish screens, aquatic
habitat enhancements, hatcheries and fish rearing facilities as needed
through 2023. While previous authorizations for this program were for
shorter time periods, this longer time window is concurrent with the
recovery goals for these species, with the objective of downlisting or
de-listing in 2023. Although a longer-term authorization may be
warranted, we also believe that it is prudent to reassess the program
and its goals so that adaptive management practice can be applied to
ensure the best outcomes for this program.
Next, this bill authorizes an additional $15 million in federal
expenditures for capital projects for the Upper Colorado Program for
the purposes of: constructing a fish screen at the Tusher Wash
Diversion Dam on the Green River in light of significantly increased
construction material costs; and for repairing and replacing
constructed capital facilities fish screens, fish passages, habitat
enhancements, hatcheries and fish rearing facilities as needed through
2023. In addition, we recommend that the bill be revised to raise the
authorization in Section 3(c)(1) of Public Law 106-392 for non-federal
contributions to capital projects, to ensure that the federal cost-
share of program implementation is not escalated further.
Third, this bill attributes additional non-federal cost sharing of
$56 million which relates to power replacement costs borne by power
consumers due to reoperation of Flaming Gorge Dam to benefit the
endangered fish (years 2010 through 2023). This is consistent with the
original definition of cost sharing provided in Public Law 106-392.
Fourth, this bill allows for continuation of base funding derived
from power revenues through 2023 for all activities necessary to
achieve recovery as currently authorized. While these funds are termed
non-federal cost shares consistent with the original cost allocation
reflected in Public Law 106-392, they are drawn from revenues otherwise
subject to repayment obligations and the Administration does not as a
general matter endorse the treatment of such revenues as a non-federal
contribution to cost-sharing for restoration projects.
Fifth, section 2(b)(4) of this bill allows the Western Area Power
Administration to borrow from the Colorado Water Conservation Board
Construction Fund (Construction Fund) if sufficient base funds are not
available in the Upper Colorado River Basin Fund (Basin Fund) to meet
base funding needs for the Programs. The borrowing authority in S. 3189
is intended to compensate for declining revenues that occur during
periods of drought. The proposal to grant WAPA borrowing authority
would replace a provision in existing law which requires that WAPA and
the Bureau of Reclamation request appropriations in the event that base
funds are insufficient.
The Administration generally opposes providing new borrowing
authority for operations and maintenance purposes. . This bill provides
authority for WAPA to borrow from a non-Federal entity to cover
operating, maintenance and rehabilitation costs, as well as the absence
of restrictions specifying the amount of allowed outstanding
obligations and sufficient limits on the timing of repayment. Further,
it is Administration policy that, where we do support borrowing
authority, it should be from the Treasury. It is generally not prudent
financial policy to use borrowing to cover operating costs. Further, it
has been longstanding Treasury policy that, if borrowing authority is
justified, Federal agencies should be authorized to borrow exclusively
from the Treasury. Also, any borrowing authority should be subject to a
specific statutory limit, to be determined taking into consideration
the expected needs of the program.
The Upper Colorado and San Juan Programs were initiated in 1988 and
1992 respectively, under the terms of cooperative agreements with
departments and agencies of the United States. The Programs' goals are
to recover populations of endangered fish while providing for the
continued development of water resources in compliance with the
Endangered Species Act. Program partners include the States of
Colorado, New Mexico, Utah, and Wyoming; Reclamation; Western Area
Power Administration; U.S. Fish and Wildlife Service; Bureau of Land
Management; National Park Service; Bureau of Indian Affairs; Native
American Tribes including the Jicarilla Apache Nation, Navajo Nation,
Southern Ute Indian Tribe and Ute Mountain Ute Tribe; environmental
organizations; water users; and power customers. Program actions
provide Endangered Species Act compliance for more than 1,600 Federal,
Native American, and non-Federal water projects depleting more than 3
million acre-feet of water per year in the Colorado and San Juan rivers
and their tributaries.
The Programs are nationally recognized collaborative efforts which
have served as models to address other Endangered Species Act issues
throughout the country. The Programs have developed comprehensive plans
for recovery of the fish species. Aggressive efforts are being
implemented to construct fish passages, fish screens, and propagation
facilities; restore and enhance aquatic habitat; acquire water; enlarge
and coordinate the operations of existing water storage reservoirs;
improve water use efficiency; stock native fish and control competing
non-native fish species, all activities leading to restoration of
ecosystems and recovery of the four listed Colorado River fish species.
Both Programs have a demonstrated history of success.
Failure to address these Programs' funding needs would require re-
initiation of Section 7 consultation on all Federal projects that rely
on the Programs for Endangered Species Act (ESA) compliance. There is
strong broad based stakeholder support for this legislation and a
critical need exists for the additional authority provided by the
proposed amendment. The Department supports passage of S. 3189 with the
aforementioned changes.
This concludes my testimony. I am happy to answer any questions.
Senator Johnson. Commissioner Johnson, is it Reclamation's
expectation that the contractors in S. 2842, who operate the
transferred works will be able to pay for the estimated $800
million of repair and rehabilitation work?
Mr. Johnson. I think the $800 million that you're
mentioning there is the estimate that we provided for
transferred works and the needs for rehabilitation and
betterment associated with those transferred works. I believe
that some of that rehabilitation and betterment can be repaid
by the project operators. It can be funded and paid by the
project operators. But I don't believe all of it probably can,
some of it may very well be beyond their ability to pay.
I don't have a break down of the specifics of those
numbers. That's just a general characterization. Some can and
some can't.
Senator Johnson. Is there a plan to pay for the permanent
fix that is needed for the Truckee Canal?
Mr. Johnson. At this time there is not. That's being worked
on. We're still working on the cost estimate of what's
required.
It's likely to be a very expensive fix. There's 11 miles of
canal with urban areas that lie below it. It's probably in the
tens of millions of dollars.
I'm sure there will be issues regarding the district's
ability to pay those costs. We'll have to work hard to find
mechanisms to fund and pay those costs over time.
Senator Johnson. Your testimony on S. 3189 recommends
Public Law 106-392 which first authorized the Upper Colorado
and San Juan River Recovery Programs to increase the non-
Federal contribution for capital projects. Currently the
required contribution is set at $17 million. What is the
specific non-Federal contribution that the Administration
recommends?
Mr. Johnson. Senator, that's a fair question that I'm not
in a position to answer today. What I'd like to do is provide
an answer for the record on that. We still need to do some work
internally related to that. But we will answer that in a timely
way.
Senator Johnson. PL 106-392 requires Interior to prepare a
report by the end of Fiscal Year 2008 on the use of power
revenues beyond 2011 for base funding for the ESA programs. It
is my understanding that the completion of that report is just
about final. Is the release of that report imminent and is S.
3189 consistent with its recommendations?
Mr. Johnson. The report is still undergoing review within
the Administration. I think in general it's consistent with the
legislation. But because it's still under review there could be
revisions. I wouldn't, you know, I think it's possible that
there may be some areas that are not consistent.
But we've got to wait until that review is complete and
when that is over we will provide the report to the committee
and to Congress.
Senator Johnson. When do you estimate that report is due?
Mr. Johnson. Let me respond for the record. I wouldn't want
to give a date and then not be able to meet it. Let me respond
for the record on that, if I can.
Senator Johnson. Ok. Back to S. 2842. What are the risk
factors that should be analyzed so that an inspection and
corrective action program can be properly prioritized?
Mr. Johnson. I think there's three primary risk factors and
there may be more. But certainly the risk of loss of life from
the failure of a facility ought to be an important
consideration, if not the most important consideration. Also
the risk of property damage, you know, what kind of property we
have downstream that could be affected by a failure.
Then certainly also is the risk associated with the loss of
water service. If you have a facility fail and you're no longer
able to provide water service, the impacts that that has needs
to be taken into consideration. So those would be three factors
that I would identify. There may be more.
I think that's something that we're working on within
Reclamation in this new concept that I talked about as a result
of the failure of the Truckee Canal. We're taking a fresh look
at our canals and our procedures for doing inspections and what
kind of criteria we ought to be using for those inspections.
Senator Johnson. Senator Tester.
Senator Tester. Thank you, Chairman Johnson. Thank you,
Commissioner Johnson for being here. My questioning is going to
revolve around S. 2842, the Aging Water Infrastructure and
Maintenance Act. I appreciated your responses on the risk
factors.
You had stated that the BOR share the goals that are
contained in 2842, but you won't be supporting this specific
bill. I'd be interested to hear, No. 1, and I think you do
agree because I think you've testified to the fact that we're
in dire need of some improvements in infrastructure, how would
the Bureau want to see us proceed if we didn't use this bill?
Mr. Johnson. I think particularly on the bill that's under
consideration, it has, it applies to all Reclamation
facilities, dams, canals, laterals, drainage facilities and
requires some fairly short turn around timeframes for doing
inspections. Given the number of facilities that we have, we
think it would be probably impossible to meet the timeframes
that are included in there. So that's certainly one thing.
I think that something that focused more on urban canals
would be helpful. We have a Safety of Dams Program. We have
legislation that defines the Safety of Dams Program.
We have a very active Safety of Dams Program. Our 2009
budget request for that program was $90 million. I think that
we're doing a very good job, an adequate job of maintaining our
dams and maintaining their safety. So I'm not sure we need more
legislation that deals with dams.
I think one of the other big issues that we will have that
we'll have to talk about is the cost sharing and how the costs
are shared. What percentage is Federal and what percentage is
not Federal?
Senator Tester. Can I ask, this bill states 65 percent
Federal cost share. Is that in the ball park you guys are
thinking about?
Mr. Johnson. I'm not in a position to give a specific
number today. My guess is that that's probably too high of a
Federal share.
Senator Tester. Ok. I don't know. I'd be interested to know
what the Bureau thinks. I don't know, if you could give that
information or if it's a shot in the dark or if they want to do
it at all would be fine. If you could, can you give me an idea
of where you guys want to go with it because I think that's
important to know?
Timeframes, you talked about the urban canals in the
previous answer. Montana is a pretty rural State. Does that
mean we're left out of the equation if you guys go by your
parameters?
Mr. Johnson. No, it's not.
Senator Tester. Ok.
Mr. Johnson. In fact, we're developing these new criteria
in conjunction with all of our operating partners. In fact we
had an initial meeting with them. I think we have a really good
partnership on how we move forward to address safety issues on
urban canals. I think there's two parts to the process that
we're trying to address.
The point is we're trying to get new standards for urban
canals.
Senator Tester. Right.
Mr. Johnson. Maintenance standards for an urban canal needs
to be different than the maintenance for a canal that runs
through a rural area.
Senator Tester. Yes. I get that. You talked about the
enormity of all these assessments that would have to be done.
Do you have assessments done now on at least a part of it that
would help you preempt a part of what we're asking for here?
Mr. Johnson. Yes. There's 108 reaches of canals that run
through urban areas. I couldn't tell you how many miles that
is. There's quite a number of miles.
We've asked each of our offices in the field to give us,
one, we've already asked them to do a windshield survey. But
we've asked them to give us a schedule and a prioritization of
those urban canals and a schedule for doing detailed
inspections on each one to get a handle on it.
Senator Tester. Could you give me, I mean is it possible
that you can give me the top ten urban canals, dams, siphons
that are at risk and where you would plug the money if you had
the money? Do you have that ability right now?
Mr. Johnson. I don't know that we have a top ten. I can
certainly go back and see if there's some information that we
can provide on the ones that we think are most critical based
on the preliminary survey that we've done.
Senator Tester. When I signed on to this bill I'll tell you
exactly what I told my staff. This bill isn't needed they're
already doing it. They said no. It's not being done completely.
I'm not being critical. I'm just being honest. I don't know
how it's possible to have our infrastructure be brought up
unless there's assessments done all the time. I mean, just all
the time on these projects so that we know which are in the
most imminent need.
I know that depends upon the risk factors. I know that's
going to have some impact. But that would be a great help and
then we wouldn't have to do this. Then all we have to do is
fight about cost share.
Mr. Johnson. Yes.
Senator Tester. Thank you. Thank you, Mr. Chairman.
Senator Johnson. Senator Barrasso.
Senator Barrasso. Thank you very much, Mr. Chairman. I
share your concerns in the question about the non-Federal
contributions to S. 3189. So I'm looking forward to getting
that same answer that you are, Mr. Chairman.
I did have two questions, Commissioner Johnson on S. 3189,
if I may. Kind of explain to all of us why it's in the interest
of the American taxpayer to continue to fund the Upper Colorado
Fish Recovery Program?
Mr. Johnson. It provides water supply for a lot of--well
the bill doesn't provide it. It provides ESA coverage. It
protects endangered species. It ensures that we comply with the
Endangered Species Act. It ensures that we will be able to
deliver water supplies to water users in four states in the
Upper Colorado River Basin.
It's absolutely a critical program. We could not provide
the benefits of all those projects that deliver those water
supplies without the Upper Colorado River Recovery Program.
Senator Barrasso. Then could you please just describe the
current status of the Upper Colorado River Basin, the fund,
what it's used for, current revenue level, balance, if the
money is going to be there in terms of sufficient revenues in
the future to continue to assist in addressing these needs?
Mr. Johnson. I'd be glad to do that. I don't have all of
those numbers off the top of my head. But we'd be glad to
provide a written response on that.
Senator Barrasso. Thank you, Mr. Chairman.
Senator Johnson. Senator Salazar.
Senator Salazar. Thank you very much, Chairman Johnson.
Let me first of all acknowledge that in the audience today
there are a number of people that are here to testify not only
on the Lower Arkansas Conduit bill, but also on the Endangered
Fish Recovery Program of 2008. They include the Director of the
Colorado Water Conservation Board, Jennifer Gimbel, who I've
known for a very long time and Bill Long the President of
Southeast Water Conservancy District, Jim Broderick, who is the
Executive Director of the Southeast Colorado Water Conservancy
District, former Congressman Ray Kogovsek, out of that same
area, Pueblo native and hero and Christine Arbogast, who does a
lot of work on the water issues of the State of Colorado. So I
welcome them formally to the hearing.
Let me also at the outset say, Mr. Chairman, most of my
questions here are going to be directed at S. 2974. But I want
to just comment on two other pieces of legislation that are
before us. First S. 2842, the Aging Water Infrastructure and
Maintenance Act. I'm proud to be a co-sponsor of that
legislation with Senator Reid and Senator Bingaman, Senator
Tester and I do hope that we're able to get that legislation
through.
Second S. 3189, the Endangered Fish Recovery Programs Act
of 2008. Without that legislation moving forward it would be
very difficult to maintain our efforts on what has been a
national model for how we deal with the protection of water
rights, compact entitlements in our State on the one hand. At
the same time, on the other hand, deal with balancing the
requirements and demands of the Endangered Species Act. So I'm
proud to be a sponsor and supporter of that legislation as
well.
Now with respect to the Frying Pan-Arkansas River Conduit I
have a couple of questions for you, Commissioner Johnson. You
will remember you and I went through this drill a couple of
years ago where we talked about cost share. My own view is when
we have a set of rural communities that essentially have pulled
themselves up from their bootstraps.
They've come up with what essentially is a 65/35 cost
share. They've done a lot more than many other Bureau of
Reclamation projects which have in fact been authorized and
which have been implemented by the Bureau of Reclamation. Now
isn't it true that there are projects out there which in fact
have as much as a 90 percent, 10 percent cost share with 90
percent being on the Federal Government?
Mr. Johnson. There are certainly, I mean I wouldn't want to
necessarily say 90 percent. But certainly there are a number of
projects----
Senator Salazar. Are you aware of one, two, three, several
projects have been funded as Bureau of Reclamation projects
where the Federal cost share has been 100 percent?
Mr. Johnson. Where they're all non reimbursable activities?
Yes, that would be the case. I can't think of any off the top
of my head, but I imagine there's probably some that are
totally non reimbursable.
There's a lot of them that are 75 percent. Certainly most
of the rural water projects that are already authorized, I
think, provide for 75 percent Federal funding, 25 percent
local. So certainly, yes.
Senator Salazar. You know I have the utmost respect for
you, Commissioner Johnson. You and I have worked together on a
number of issues including Leadville Mine Drainage Tunnel
recently and other things as well as my respect for Secretary
Kempthorne. But I will tell you that I find the position of the
Bureau of Reclamation here offensive.
I find it offensive because of the fact that we have worked
so hard and long with the local communities affected for them
to come up with a different kind of cost sharing formula than
what we had in the past. I remember on a number of different
occasions co-hosting meetings with Senator Allard on the
Pueblo, downstream of Pueblo to talk with the community about
how they needed to be forthcoming and step up to the plate and
assume a share of the responsibility for the payback. It was at
my urging in fact that I believe the Southeast Water
Conservancy District and others went to the State legislature
and said let us borrow the $60 million so we can have our local
cost share.
Yet it seems that throughout this time period as the
Southeast was putting together its program, it ended up in this
legislation which is bipartisan legislation sponsored by
Senator Allard and by me that the Bureau of Reclamation at the
local level was nowhere to be seen. We come forward now with
what we think is a great compromise that essentially would
implement the vision which is now some, if I have my numbers
right, 46 years old. It's a conduit long time in coming and the
result of a lot of work over the last several years.
So I find it offensive, Commissioner Johnson, that the
Bureau of Reclamation would come here in front of this
committee today and say, well, it's still not good enough. We
need something else. Why is it that the Bureau of Reclamation
was not there working hand in hand with the Southeast Water
Conservancy District and all of its local partners to come up
with a package that in fact would be acceptable to everyone?
Mr. Johnson. We certainly didn't intend to be offensive.
I'm not aware of a lot of interaction that has occurred between
us and Southeastern. I think that that interaction needs to
occur. I think that Reclamation is certainly willing to sit
down and spend time with the district and with others taking a
hard look at the financing proposal.
Certainly this is an improvement over what we've seen in
other bills that were introduced previously. It's certainly a
movement in the right direction. I'm not in a position to
endorse, you know, what's in the bill today. But we're
certainly willing to take a hard look at it.
You know I was talking with Jim Broderick before the
meeting today. I'm not sure that we understand the details of
what's included in there because Jim was telling me that the
intent is to repay the 65 percent. So the 35 percent would be
funded locally and that repayment would occur on the 65
percent. I'm not sure that we understood that when we developed
our analysis.
Now I'm not saying that that's acceptable. But I'm just
saying I'm not sure that we understood, completely, the
proposal as envisioned in the legislation. I would just say
that we are more than willing to sit down with the district and
understand the details and see if there's anything that we can
all be comfortable with.
Senator Salazar. Mr. Chairman, I know my time has expired,
but I have several more questions of the witness, but I'll wait
my turn if it's ok with you or I can continue as you wish.
Senator Johnson. You may proceed.
Senator Salazar. Thank you, Mr. Chairman. Let me then just
respond, Commissioner Johnson. It would be my, let's say hope.
That's too soft. Wish, too soft. It would be my request, too
soft. It would be my direction to you and to Secretary
Kempthorne that you work with the Southeast Water Conservancy
District so we can get this legislation moved forward.
It would seem to me that for you as a Commissioner of
Reclamation for the remainder of this year through January of
next year that this should be one of the crown jewel
achievements of Reclamation that after 40 years of waiting we
finally are making the possibility of the conduit becoming a
reality. Let me ask you this question. If we do not move
forward with this legislation how does the Bureau of
Reclamation have any sense of how these rural communities
ultimately are going to be able to access a clean water supply?
What are their alternatives?
Mr. Johnson. I know they've been relying on ground water. I
know that ground water has got problems associated with it. I
know the quality is not what we'd like to see. I don't know to
what extent that is an alternative.
I'm really not in a position, Senator, to know enough about
the project to be able to offer a response on that. We could
respond in more detail in writing, if you'd like.
Senator Salazar. Let me tell you where I would like you to
put your efforts and that is working with the Southeast Water
Conservancy District, State of Colorado and the local partners
to fully understand this legislation. This is very important
legislation that I'm certain is going to have tremendous
bipartisan support in the U.S. Senate.
I want to not only have this legislation pass, but I also
want to make the conduit a reality. So I would appreciate it if
you would just have your office and the local staff for the
Bureau of Reclamation working with the Southeast to fully
understand the parameters of what we're trying to do here. It's
very difficult, Commissioner Johnson.
You must understand for us to go to the President of
Southeast, Bill Long and some of his predecessors and say you
need to come up with the local cost share for them to go to
Denver and testify first in front of the Colorado Water
Conservation Board and then to have a bill shepherded through a
State general assembly to get over $60 million committed to
this project, I think is a Herculean undertaking for a local
community. I think that effort has to be recognized.
Thank you very much, Mr. Chairman.
Senator Johnson. Commissioner Johnson, you may be excused.
Please have a seat and listen to the panelists.
Mr. Johnson. Yes, glad to.
Senator Johnson. Since there are no more questions let's
have our second set of witnesses take a seat.
On our second panel we have first, Dan Keppen, Executive
Director of the Family Farm Alliance to testify on S. 2842.
Second, Bill Long, Chairman of the Arkansas Valley Conduit
Committee in Colorado to testify on S. 2974.
Third, Jennifer Gimbel, Director of the Colorado Water
Conservation Board to testify on S. 3189.
Welcome to each of you and thank you for traveling back
here to provide your testimony to the subcommittee. Mr. Keppen,
please start by summarizing your testimony. We'll then proceed
with the other witnesses. After all of you have completed your
statements, we will proceed with questions.
STATEMENT OF DAN KEPPEN, FAMILY FARM ALLIANCE, KLAMATH FALLS,
OR
Mr. Keppen. Thank you, Chairman Johnson, members of the
subcommittee. I appreciate this opportunity to testify on
behalf of the Family Farm Alliance. My name is Dan Keppen.
I serve as the Executive Director for the Alliance. We
advocate for family farmers, ranchers, irrigation districts and
allied industries in 17 Western states. We're focused on one
mission and that's to ensure the availability of reliable,
affordable, irrigation water supplies to Western farmers and
ranchers throughout the West. Our members relative to this bill
include irrigation districts and water agencies that are
responsible for the operation and maintenance of some of the
Reclamation's largest and most complex facilities.
The Bureau of Reclamation built and manages the largest
part of a critical water supply infrastructure that is the
foundation of the economic vitality of our membership's fate.
Much of this federally owned infrastructure is now 50 to 100
years old, approaching the end of its design life. It needs to
be rebuilt and rehabilitated for the next century.
In the American West Federal water supply systems are
essential components of communities, farms, and the
environment. These facilities are part and parcel of the
Nation's food production system. Their operation helps ensure
our ability to provide reliable and secure food for our own
citizens and the rest of the world.
Aging public infrastructure across the Nation is a growing
critical problem as we have seen in media accounts in the last
few months. Throughout the Bureau of Reclamation's history
canals have been constructed in the West to deliver project
benefits. When these canals were constructed they were located
generally in very rural areas, Fernley, Nevada for example,
where the major impact of canal failure was the loss of project
benefits associated with agriculture.
However with increased urbanization occurring on lands
below many canals, loss of life or significant property and
economic damage can now result from failure. Such a failure
occurred in Fernley, Nevada this past January. Thankfully no
lives were lost, but hundreds of homes were damaged and
millions of dollars of damage were imparted to the local
community.
The Family Farm Alliance commends Senator Reid for
introducing the Aging Water Infrastructure and Maintenance Act,
S. 2842. This bill is timely and it helps shed light on a
critical problem that our members are becoming increasingly
concerned with in recent years. Senator Reid has said that the
purpose of the bill is to provide Reclamation with resources
and direction to inspect and maintain aging water facilities so
that disasters like the Fernley flood can be avoided.
We agree with Senator Reid that there clearly is a need for
Congress to address the deterioration of the aging Reclamation
facilities and preventing failures like the one in Fernley
should be an immediate priority. However we have reviewed S.
2842 in detail and we do have a number of concerns about how
this legislation would actually be implemented on the ground.
We have been working with Senator Reid's staff on some changes
that we think will alleviate our concerns.
In general we believe that the bill's approach as written
is a bit too broad. It mandates additional inspections and new
maintenance standards for all Reclamation facilities when the
focus instead should be on those facilities that pose an actual
risk to urbanized areas. Although S. 2842 would authorize
financial assistance to non-Federal entities responsible for
the maintenance of federally owned facilities, it is not clear
how that assistance would be realized.
With that said, we believe S. 2842 is intended to address
an important problem and can achieve its desired effect by
incorporating changes that reflect the input of water managers
imminently familiar with canal safety matters. We have vetted
this issue, you know, very extensively with water managers
throughout the West that comprise our membership.
First, we believe that a different level of scrutiny is
appropriate for canal regions that are cutting through
urbanizing areas. Focusing inspections and setting standards on
aging canals that pose significant threats to life and property
would be far more cost effective than the Reclamation wide
inspections and new regulatory structure mandated by the bill.
As specific standards are developed in such cases Reclamation
after consultation with water users should identify near term
inspections.
The bill should recognize Reclamation's and water user's
ongoing review of operations and maintenance programs. It
should not create a new Federal standard that would go beyond
what might be required by existing contract and/or State law
which would be the case in Idaho.
Second, this bill provides an opportunity to further push
an important financing program already passed by Congress
through this very committee that stymied in its implementation
by the Office of Management and Budget. S. 2842 should
specifically direct funding implementation of the loan
guarantee program authorized by the Rural Water Supply Act of
2006. The 109th Congress sought to address the financing
difficulties global agencies face by creating an innovative
loan guarantee program to help them meet the financial
obligations for the repair and rehabilitation of Federal water
supply facilities.
That Act authorized a loan guarantee program within
Reclamation that would leverage a small amount of appropriated
dollars into a large amount of private lender financing
available to qualified Reclamation contractor water districts
with good credit. These loan guarantees, a long awaited
critical financing tool for water users across the West are now
being held up because of incorrect interpretations of clear
Congressional direction by OMB. The Family Farm Alliance,
earlier this year, prepared a very detailed white paper that we
believe rebuts OMB's assertions and conclusions that explains
why this program should be implemented post haste.
That paper was transmitted to Chairman Bingaman and
committee staff about 2 months ago with the larger Energy
committee. I would be happy to provide interested members on
this subcommittee with that document if requested. It really is
unfortunate that further legislation is required on this matter
since we do not believe that's what Congress intended when they
passed the Act 2 years ago.
The Family Farm Alliance is interested in this particular
bill introduced by Senator Reid because it helps to underscore
what is becoming a growing concern in the Western United
States. It is imperative that we find creative ways to provide
for the operation and maintenance and modernization of existing
water supply infrastructure. With some clarifying changes and
direction to prioritize and implement a financing program
already signed into law, Senator Reid's bill could provide an
important first step toward solving our aging water
infrastructure problems.
We thank him for his leadership on this issue. Again we
believe a current bill should be revised so that Reclamation
guidelines for analyzing projects could be updated to include
consideration for urbanization and other effects that were not
in play when these facilities were originally designed many
decades ago. However one size does not fit all and blanket
inspections for all Reclamation facilities are not appropriate
or cost effective.
Further many local districts may not have the financial
capability to conduct required repairs to their facilities
immediately. A loan guarantee program could assist them.
We believe these recommendations will further improve S.
2842. Our revisions are intended to help create a revised bill
that our family farmers and ranchers and our membership can
embrace. We look forward to continuing to work with the bill's
sponsors on developing language toward that end.
Thank you for this opportunity to present our views today.
[The prepared statement of Mr. Keppen follows:]
Prepared Statement of Dan Keppen, Executive Director, Family Farm
Alliance, Klamath Falls, OR
Chairman Johnson and Members of the Subcommittee: Thank you for
this opportunity to submit testimony on behalf of the Family Farm
Alliance (Alliance). My name is Dan Keppen, and I serve as the
executive director for the Alliance, which advocates for family
farmers, ranchers, irrigation districts, and allied industries in
seventeen Western states. The Alliance is focused on one mission--To
ensure the availability of reliable, affordable irrigation water
supplies to Western farmers and ranchers. Our members include
irrigation districts and water agencies that are responsible for the
operation and maintenance of some of the Bureau of Reclamation's
largest and most complex facilities.
I have over nineteen years experience in Western water resources
engineering and policy work, including three years as manager of the
Tehama County Flood Control and Water Conservation District in
California. During that time, I was directly involved with management
and repair work associated with three federally-declared flood
disasters along the Sacramento River and its tributaries.
The following has been prepared to present our perspective on the
``Aging Water Infrastructure and Maintenance Act'' (S. 2842) and to
offer recommendations to improve it further.
THE WEST'S AGING WATER INFRASTRUCTURE
The Bureau of Reclamation (Reclamation) built and manages the
largest part of the critical water supply infrastructure that is the
foundation of the economic vitality of the 17 Western States. Much of
this federally-owned infrastructure is now 50-100 years old,
approaching the end of its design life, and needs to be rebuilt and
rehabilitated for the next century. The Congressional Research Service
has calculated the original development cost of this infrastructure to
be over $20 billion, and Reclamation estimates the current replacement
value of its water supply and delivery infrastructure at well over $100
billion.
In the American West, Federal water supply systems are essential
components of communities, farms, and the environment. These facilities
are part and parcel of the nation's food-production system and their
operation helps ensure our ability to provide reliable and secure food
for our own citizens and the rest of the world. Reclamation estimates
that $3 billion will be needed from project users in the near-term to
provide for essential repairs and rehabilitation of Reclamation
facilities.
Aging public infrastructure across the Nation is a growing critical
problem. Throughout Reclamation's history, canals have been constructed
in the West to deliver project benefits. When these canals were
constructed, they were located generally in rural areas, where the
major impact of canal failure was the loss of project benefits.
However, with increased urbanization occurring on lands below many
canals, loss of life or significant property/economic damage can now
result from failure.
On April 10, 2008 Senator Harry Reid introduced the Aging Water
Infrastructure and Maintenance Act (S. 2842), which provides an
initial, timely approach to address these changing conditions.
BACKGROUND
Senator Reid has described S. 2842 as a response to January 5, 2008
failure of the Truckee Canal, which resulted in the flooding of 585
homes and businesses in Fernley, Nevada, causing an estimated $50
million in property damage. At nearly 100 years old, the Truckee Canal
is one of Reclamation's oldest facilities, and it has experienced
several failures, with the most recent of which is believed to have
been caused by burrowing rodents, a common problem throughout the West.
Senator Reid has said that the purpose of the bill is to provide
Reclamation with resources and the direction to inspect and maintain
aging water facilities so that disasters like the Fernley flood can be
avoided.
S. 2842 would require Reclamation to inspect all of its facilities
within two years and to review those inspections every three years
thereafter. Reclamation would be required to use information gathered
during the inspections to develop detailed maintenance schedules for
facilities that Reclamation operates (``reserved facilities'') and
facilities, such as the Truckee Canal, that are operated by non-federal
authorities (``transferred facilities''). S. 2842 also requires
Reclamation to develop a ``National Priority List'' of reserved and
transferred facilities that need the ``most urgent maintenance,'' and
to review the projects on the list annually.
In addition, S. 2842 would direct Reclamation to develop, within
six months of enactment, regulations to establish standards for the
condition and maintenance of all project facilities. The standards are
to require that the project operates in a manner that ensures the
safety of populations and property located ``in close proximity'' to
the project. Within one year of enactment, Reclamation would have to
develop guidelines to ensure compliance with the new regulations.
The bill authorizes Reclamation to carry out (or have a non-federal
entity carry out) any repair or modification to a project facility
necessary to preserve its structural safety. If the structural
deficiency to be repaired is on a transferred facility, and the problem
does not result from a failure to comply with the new standards and
guidelines, Reclamation may reimburse the non-federal operating entity
for up to 65 percent of the cost of the repair/modification. If the
structural deficiency on a transferred facility is the result of
noncompliance with new standards and guidelines, Reclamation can make
repairs or modifications to minimize the risk of ``imminent harm'' to
lives and property and then seek reimbursement of costs from the non-
federal operating entity.
S. 2842 authorizes $5 million in FY 2009 and $1.5 million annually
in 2010 and 2013 to carry out the facility inspections, and it
authorizes ``such sums as are necessary'' for project modifications.
ISSUES OF CONCERN AND RECOMMENDATIONS
There clearly is a need for Congress to address the deterioration
of aging Reclamation facilities, and preventing failures like the one
in Fernley should be an immediate priority. However, we have reviewed
S. 2842 in detail and have a number of concerns about the legislation.
In general, we believe that the bill's approach is too broad. It
mandates additional inspections and new maintenance standards for all
Reclamation facilities when the focus instead should be on those
facilities that pose an actual risk to urbanized areas. The
Reclamation-wide inspection program and new project condition and
maintenance standards required by the bill would in many cases
duplicate or undermine existing operation and maintenance (O&M)
standards and inspection procedures built into contracts for
transferred facilities. This would increase costs--federal and non-
federal--without a corresponding increase in public safety. Finally,
although S. 2842 would authorize financial assistance to non-federal
entities responsible for the maintenance of federally-owned facilities,
it is not clear how that assistance would be realized.
We note three primary areas of uncertainty in the bill that we
think can be addressed via our associated recommendations.
1. Where detailed inspection programs already exist, it
appears that the legislation would create new or redundant
programs.
We are concerned about how the remedies proposed by S. 2842 would
mesh with ongoing inspection, operations and maintenance (O&M)
activities undertaken by local interests and Reclamation.
For transferred facilities, there is generally a contract between
Reclamation and the non-federal operating authority that mandates
standards for inspections and project conditions and performance.
Reclamation performs regular inspections on these facilities and
essentially dictates to the local authority which repairs or
modifications are necessary and the appropriate level of maintenance.
For example, the major pumping and conveyance facilities of the
Central Valley Project (CVP) in California are operated and maintained
by non-federal authorities under transfer agreements with Reclamation.
These authorities include the San Luis Delta-Mendota Water Authority
(SLDMWA), Tehama-Colusa Canal Authority (TCCA) and the Friant Water
Authority (FWA). The transfer agreements for the CVP facilities
specifically address inspections. In the case of the Friant-Kern and
Delta-Mendota Canals, Reclamation, in conjunction with the respective
FWA SLDMWA and TCCA water managers perform a detailed inspection of the
facilities every three years and identify for Reclamation items
requiring repair or rehabilitation. Reclamation may require additional
inspections annually.
Maintenance of the CVP facilities has improved since the local
authorities took them over from Reclamation. Since the transfer of O&M
responsibilities to these California authorities, significant progress
has been made on repair and rehabilitation projects that were
repeatedly deferred by Reclamation when it was responsible for
operating the facilities.
Reclamation also has an ongoing program to review the operations
and maintenance on all Reclamation project reserved works. Reports from
those inspections indicate any deficiencies, their relative priority
for correction and other aspects of project function. These reviews and
inspections have been conducted for many decades.
In Fernley, Reclamation had apparently conducted an inspection on
the failed canal at some point preceding the failure. Their inspection
showed nothing to be alarmed about, and it is not clear whether the
rodent burrows were missed in the inspection or whether the burrowing
occurred after the inspection took place.
Recommendation: Revise Inspection Requirements for Critical Areas
We believe that a different level of scrutiny is appropriate for
canal reaches that are cutting through urbanizing areas. Focusing
inspections and setting standards on aging canals that pose significant
threats to life and property would be far more cost-effective than the
Reclamation-wide inspections and new regulatory structure mandated by
the bill. As specific standards are developed in such cases,
Reclamation, after consultation with water users, should identify near-
term inspections, even though there may have been a recent inspection.
The legislation could require Reclamation to revise its inspection
procedures to give a higher priority to identifying structural problems
in facilities where failures could directly impact urbanized areas.
Improved inspections could bring the most critical aging problems to
the forefront and, if done correctly, will allow prioritization from
the most imminent possibility of failure to the least (natural
occurrences notwithstanding).
The bill should recognize Reclamation's and water users' ongoing
review of operations and maintenance programs. Maintenance schedules
already exist and have been complied with for years. Depending on how
S. 2842 bill would be interpreted by local Reclamation staff, there is
the potential that current appropriate maintenance practices of non-
Federal agencies could be turned upside down. It may be more effective
for local Reclamation staff to sit down with the canal managers on a
regular basis (e.g., monthly or quarterly) to review concerns that have
ALREADY been identified by the canal managers and which need attention;
thereby creating a regular, cooperative approach rather than more,
questionable, and sometimes confrontational, ``surprise'' inspections.
The proposed bill should not create a new federal standard that
would go beyond what might be required by existing contract and/or
State law. For example, Idaho statutes already require that canals be
maintained in good repair and prepared to deliver water each year.
2. It is unclear how the ``federal vs. non-federal''
obligation will be defined for facilities transferred to non-
federal entities, particularly when some facilities did not
meet modern federal standards at the time of transfer.
S. 2842 seems to assume that all transferred facilities were in
compliance with engineering design standards at the time Reclamation
transferred the facilities to local authorities. Unfortunately, that
was not always the case.
A very real problem that Western water managers are facing in some
areas relates directly to the Fernley experience. Many Reclamation
canal facilities were designed at a time when urban development wasn't
even a consideration. Often, these facilities were located in rural,
isolated settings. In the decades that followed initial construction of
these facilities, issues arose that were not serious problems in rural
areas.
For example, water seeping from earth-lined canals has created
wetlands adjacent to some canal reaches, attracting all manner of
wildlife. Reaches of the Madera Canal in California near these
``wetlands'' have become home to huge populations of ground squirrels,
who have burrowed into canal banks, further threatening the integrity
of these structures and leading to increased seepage.\1\
---------------------------------------------------------------------------
\1\ In Western Colorado, prairie dogs pose a similar threat.
Districts in that area fear that if the prairie dog is included on the
ESA list as currently proposed, there will be nothing they can to
control their canal banks from being riddled with burrows.
---------------------------------------------------------------------------
As new housing developments encroach further and further into the
once rural areas bisected by these original canals, the current level
of repair will not be tolerated by the new residents. In fact, in
Madera, concrete-lined canals -designed with no knowledge of the
burgeoning growth that would occur many decades later--have failed,
resulting in litigation leveled at local districts from new residents
that have moved into the area.
In addition, the bill's definition of ``project facility'' could be
read to include local distribution works built and/or operated and
maintained by non-federal agencies that are fully paid out but title
transfer has not yet occurred.
Recommendation: Clarify the Local Responsibility for Transferred Works
The bill should be modified to clearly define the federal
obligation vs. non-federal obligation for facilities transferred to a
non-federal entity that didn't meet ``federal standards'' at the time
of transfer.
Water users should have a partnership role with Reclamation in this
process because they have a direct interest in seeing that Reclamation
facilities are operated and maintained properly. Any kind of canal
failure could result in non-delivery of water and have adverse effects
on irrigators (and municipalities) and their corresponding communities.
The definition of ``project facility'' should be clarified.
3. Reimbursement timing and reliability are unclear.
S. 2942's treatment of how and when reimbursements for facility
repairs and modifications will be provided is not clear. It appears the
bill treats Reclamation-operated facilities and transferred facilities
differently. Congress should understand that water users currently
cover Reclamation costs for inspections under both situations, and in
most cases, are responsible for funding their own O&M budgets each
year. In some areas, such as Friant, all of the facilities are
federally owned. If the locals undertake the work proposed in S. 2842,
which in many cases would be in addition to their regular O&M budget,
they must first clearly understand when reimbursement money will become
available, how to handle full or partial funding in the absence of
collateral, the manner in which line item earmarks will be considered,
etc.
Under the current service agreements between Reclamation and local
authorities, funding for major repair projects can be challenging.
Local authorities are also concerned about Reclamation's discretion to
define which types of project costs are capital and which costs are
O&M. In the water users' view, more and more of these determinations
are shifting costs to O&M, and therefore, the water users are
challenged with significant repairs payable in a single year rather
than amortized over a longer capital repayment period.
Water users will face a challenge to make timely repairs if they
are to rely on funding from this proposed program. By the time funding
for a project would be reflected in Reclamation's budget, and that
project is actually implemented, a decade may have elapsed, based on
current practices.
Recommendation: Clarify Reimbursement Terms for Local Agencies
The bill should be revised so that adequate funding, realistic
timing and a reliable means of reimbursement are provided by the
federal government to non-federal operating entities. The non-federal
operating entities do not hold title to Reclamation facilities and thus
have limited collateral for financing purposes.
Recommendation: Specifically Direct Funding and Implementation of Loan
Guarantees Program
Direct loans provide one useful mechanism for local agencies to
make infrastructure repairs. In the past, Reclamation offered its water
users loans, which allowed users to finance over many years their
contractual share of repair and rehabilitation costs. Currently,
Reclamation does not have an active program that provides either loans
or a budget line for the water user share of these rapidly increasing
costs, even under hardship conditions.
S. 2842 should specifically direct funding and implementation of
the loan guarantee program authorized by The Rural Water Supply Act of
2006 (PL 109-451). The 109th Congress sought to address the financing
difficulties local agencies face by creating an innovative loan
guarantee program to help them meet their financial obligations for the
repair and rehabilitation of Federal water supply facilities. The Act
authorized a loan guarantee program within Reclamation that would
leverage a small amount of appropriated dollars into a large amount of
private lender financing available to qualified Reclamation-contractor
water districts with good credit. In other words, the Congress gave the
authority to Reclamation to co-sign a loan to help their water
contractors meet their contract-required, mandatory share of
extraordinary maintenance, facility rebuilding and replacement costs of
federally-owned facilities.
Given this scenario, it is incredible that Reclamation loan
guarantees, a long-awaited critical financing tool for water users
across the West, are now being held up because of incorrect
interpretations of clear Congressional direction by the Office of
Management and Budget (OMB). This is not what Congress intended.
SUMMARY AND CONCLUSION
Reclamation guidelines for analyzing projects should be updated to
include considerations for urbanization and other effects that were not
in play when these facilities were originally designed, many decades
ago. However, one-size still does not fit all, and blanket inspections
for all Reclamation facilities are not appropriate or cost-effective.
Further, many local districts may not have the financial capability to
conduct required repairs to their facilities immediately. A loan
guarantee program can assist them. We believe these recommendations
will further improve S. 2842.
We hope that you will see our comments in the constructive light in
which they are offered. Senator Reid's bill, if enacted, will impact
the family farmers and ranchers who make up our membership, and our
suggested revisions are intended to help create a revised bill that
they can embrace. We look forward to working with bill sponsors on
developing bill language towards that end.
Thank you for this opportunity to present our views today.
Senator Johnson. Thank you, Mr. Keppen.
Mr. Long.
STATEMENT OF BILL LONG, PRESIDENT, SOUTHEASTERN COLORADO WATER
CONSERVANCY DISTRICT, LAS ANIMAS, CO
Mr. Long. Good afternoon Chairman Johnson and committee
members. I am Bill Long, President of the Southeastern Colorado
Water Conservancy District. I would like to thank the committee
for the opportunity to present testimony in support of S. 2974.
Also, I would like to thank Senators Allard and Salazar for
their unending efforts to complete the Frying Pan Arkansas
Project with the construction of the proposed Arkansas Valley
Conduit.
Frying Pan Arkansas legislation originally enacted in 1962
created a multi purpose project that includes a water
collection system on the West slope of Colorado that collects
and delivers clean water to the municipal and agriculture users
in the Arkansas River Basin of Southeast Colorado. Among the
storage and delivery facilities authorized in the Arkansas
River Basin was the Arkansas Valley Conduit. Frying Pan
Arkansas Project Act requires that municipal water supply works
either be constructed by communities themselves or if
infeasible by the Secretary with repayment of actual costs and
interest within 50 years.
During development of the original project Reclamation
found the conduit to be economically feasible but the
beneficiaries lack the bonding capability to construct the
works themselves. The beneficiaries of the conduit found that
it is also was financially unfeasible to repay Reclamation
within 50 years if Reclamation were to construct the conduit.
Indeed they still cannot afford this project. federally
mandated water quality regulations are increasing and are most
difficult to comply with utilizing our current water supply
source. Protecting public health is of utmost importance to our
water providers. Without the Arkansas Valley Conduit individual
local water providers will be forced to provide expensive
temporary fixes. They will turn to Federal grant programs to
pay for them.
In the meantime they will face fines and penalties which
only exacerbate their financial constraints. The Conduit
Project and legislation are needed today to assist the
communities of the Lower Arkansas River Basin to resolve its
water quality and supply issues through a cost effective
regional approach. Recently we have been discussing with the
Bureau of Reclamation, our Congressional delegation and other
governmental partners an approach that would apply current and
future miscellaneous revenues generated by Fry-Ark to repay the
debt on the Fry-Ark components in a different manner than is
currently provided for in the repayment contract between
Southeastern and the United States.
Unique among Federal Reclamation projects, the Frying Pan
Arkansas Project is beginning to generate significant
miscellaneous revenues from the storage of non project water in
Fry-Ark facilities to excess capacity or if and when contracts.
We propose using this miscellaneous project revenue generated
by the project itself to count toward the 100 percent payment
of actual construction costs. The estimated cost of the
Arkansas Valley Conduit is 300 million and will take until 2021
to design, permit, acquire right of ways and construct.
The participants have secured a guaranteed loan for $60.6
million from the State of Colorado to help in the repayment of
their obligation. The proposed repayment schedule is based on a
65 percent Federal share and 35 percent local share. The local
share would be paid back with interest. The Federal share would
be repaid with Fry-Ark generated miscellaneous revenue.
The Arkansas Valley Conduit participants would make
payments from the proceeds of the State loan and revenues
generated by local water fees toward construction costs.
Miscellaneous contract revenues would be used to make payments
on remaining construction costs. Repayment would be complete in
2072, within the 50 year requirement of the Fry-Ark authorizing
legislation.
The goal of S. 2974 is to make this project a reality. We
ask you to help provide the means necessary to address the
water quality concerns of the Lower Arkansas Valley.
Southeastern and other project proponents are prepared for the
hard work ahead and ask for your help.
Mr. Chair, Southeast, the project sponsor and the Bureau of
Reclamation partner, our partner, is somewhat disappointed with
the Bureau of Reclamation testimony today. We have had
continuing dialog with the Bureau concerning this concept over
the past year. Their testimony today is the first time they
have expressed concerns about our proposal. It is not timely
and does not meet the standards set in their motto, ``Managing
for Excellence.''
In closing I once again thank the committee for the
opportunity to testify today and would be happy to answer the
committee's questions. Also I have two documents I would like
to submit for the record, a list of our participants and a
letter from the State of Colorado endorsing the project and
providing the $60 million loan.* Thank you.
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* See Appendix II.
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[The prepared statement of Mr. Long follows:]
Prepared Statement of Bill Long, President, Southeastern Colorado Water
Conservancy District, Las Animas, CO
[Mr. Chair] My name is Bill Long, president of the Southeastern
Colorado Water Conservancy District (``Southeastern''), and I am
testifying today in support of S. 2974: a bill to authorize the
construction of the Arkansas Valley Conduit in the State of Colorado,
and for other purposes (Arkansas Valley Conduit Act). I thank the
Subcommittee for the opportunity to testify today. I also thank
Senators Allard and Salazar for their leadership in introducing this
legislation and the Subcommittee for holding this hearing today.
As background for my testimony, Southeastern is a statutory water
conservancy district (see C.R.S. Sec. 37-45-101, et seq.), which was
formed on April 29, 1958, by the District Court for Pueblo County,
Colorado. Southeastern's district boundaries extend along the Arkansas
River from Buena Vista to Lamar, and along Fountain Creek from Colorado
Springs to Pueblo, Colorado. Southeastern administers, holds all water
rights for, and repays reimbursable costs for the Fry-Ark Project, a
$550 million multi-purpose reclamation project authorized by Congress
and built by the U.S. Bureau of Reclamation (``Reclamation''). The
Project diverts water underneath the Continental Divide, from the
Fryingpan and Roaring Fork River drainages, into the Arkansas River
drainage, where Project water is stored in Pueblo Reservoir and other
reservoirs. Southeastern provides Project water and return flows to
supplement the decreed water rights of water users within
Southeastern's boundaries. Southeastern repays a large part of the
Project's construction costs (estimated at $127 million over a minimum
40-year period), as well as annual operation and maintenance costs, in
accordance with its repayment contract with the United States. Payments
are made from property tax revenues available to Southeastern,
supplemented by revenue from Project water sales.
On August 16, 1962, John F. Kennedy flew to Pueblo, Colorado to
officially and proudly proclaim the authorization of the Project, and
the start of construction. Both the 1962 Act, and the1978 Amendment
contemplated the construction of the Arkansas Valley Conduit, which has
yet to be developed, primarily because the constituents do not have the
funding to develop it.
As early as 1953, the Secretary of the Interior acknowledged that
additional quantity and better quality of domestic and municipal water
was critically needed for the Arkansas Valley, and in particular for
those towns and cities east of Pueblo. House Document 187, 83d
Congress, 1st Session, and the Fryingpan-Arkansas Final Environmental
Statement dated April 16, 1975, both of which have been incorporated by
reference into the Authorizing Act, recognized that the Arkansas Valley
Conduit would be an effective way to address this need. The local water
available from the Arkansas River alluvium has historically been high
in Total Dissolved Solids (TDS), sulfates, and calcium, and has
objectionable concentrations of iron and manganese.
Representatives of local and county governments, water districts
and other interested citizens of the Lower Arkansas River Basin formed
a committee in 2000 to consider a feasibility study of the Arkansas
Valley Conduit. These interested parties formed the WaterWorks!
Committee and, along with Southeastern, began to review the feasibility
of developing the Arkansas Valley Conduit. Some of the relevant
conclusions reached are as follows:
The cost of the Arkansas Valley Conduit compares favorably
with any ``no action alternative,'' which would still require
the communities involved to make substantial financial
investments to address current water quality and safe drinking
standards.
The financial capabilities of the participating agencies are
estimated to be inadequate to fund the construction of the
proposed Arkansas Valley Conduit, under a 100 percent funding
requirement, but Arkansas Valley Conduit participants could
afford to pay 20 percent cost-share.
There is an adequate water supply to make the Arkansas
Valley Conduit feasible.
As mentioned above, the Arkansas Valley Conduit was included in the
original Fry-Ark reports integrated into the Fry-Ark Authorization Act.
The Arkansas Valley Conduit was not built because communities in the
Lower Arkansas River Basin could not fully fund the Arkansas Valley
Conduit project. A study of the Arkansas Valley Conduit was prepared
for Southeastern, the Four Corners Regional Commission and the Bureau
of Reclamation in 1972. The report's recommendations for construction
of a water treatment plant, pumping station and conduit to serve 16
communities and 25 water associations east of Pueblo were not
implemented at that time due to the lack of federal funding.
Evaluations on the quantity of water needed to satisfy long-range
objectives for water users in the Southeastern district area were
prepared in 1998. Additionally, an update of the estimated construction
costs presented in the 1972 report was prepared in 1998.
The question of how to fund the construction of the Arkansas Valley
Conduit has dominated Southeastern's and its partners' efforts over the
past five years. Recently, we have been discussing with the Bureau of
Reclamation, our Congressional delegation and other governmental
partners an approach that would apply current and future miscellaneous
revenues generated by Fry-Ark to repay the debt on certain Fry-Ark
components in a different manner than is currently provided for in the
repayment contract between Southeastern and the United States,
including construction of the Arkansas Valley Conduit.
Unique among Federal Reclamation projects, the Fryingpan-Arkansas
Project (Fry-Ark) is beginning to generate significant miscellaneous
revenues from storage of non-project water in Fry-Ark facilities
through ``excess capacity'' or ``if-and-when'' contracts. We propose
using this miscellaneous project revenue, generated by the Fry-Ark
itself, to count towards the 100 percent payment of actual costs
requirement.
The estimated cost of the Arkansas Valley Conduit is $300 million
and will take until 2021 to design, permit, acquire rights-of-way, and
construct. The participants have secured a guaranteed loan for $60.6
million from the State of Colorado to help in their repayment
obligation.
The proposed repayment schedule is based on 65% Federal share and
35% local share. The local reimbursable portion would be $105 million
and would be paid back with interest. The Federal non-reimbursable
portion of the Arkansas Valley Conduit would be $195 million, and would
be paid without interest.
It is estimated that construction of the Arkansas Valley Conduit
would be complete in 2020 and would begin delivering water in 2021, at
which time payment on the reimbursable portion of the Fry-Ark costs
would begin with 3.046% interest.
The Arkansas Valley Conduit participants would make a $40 million
payment toward the $105 million reimbursable construction costs.
Contract Revenue would be used to make payments on the remaining
reimbursable balance of the Arkansas Valley Conduit.
Once the reimbursable portion repayment is complete, Contract
Revenue would be used to pay for the non-reimbursable $195 million
(without interest.) This non-reimbursable portion repayment would be
complete in 2072, within the 50 year requirement of the Fry-Ark
authorizing legislation.
To implement this approach, the Fry-Ark authorizing act will need
to be amended to limit Arkansas Valley Conduit beneficiaries' repayment
obligation to not more than 35 percent. The combined Fry-Ark Contract
Revenue and Arkansas Valley Conduit beneficiary payments will pay 100
percent of the Arkansas Valley Conduit construction costs, with
interest being applied only on the 35 percent reimbursable Arkansas
Valley Conduit beneficiary obligation.
The citizens and communities of the Lower Arkansas River Basin have
waited 30 to 50 years for this project that will improve their water
quality and supply. The need for the Arkansas Valley Conduit has been
well established for more than 50 years. The Lower Arkansas River Basin
communities continue to seek federal assistance in moving this much-
needed project forward. We ask this subcommittee's prompt action in
support of S. 2974. We look forward to working with our Congressional
delegation and this Subcommittee to bring this much-needed project to
fulfillment.
Senator Johnson. Thank you, Mr. Long.
Ms. Gimbel.
STATEMENT OF JENNIFER GIMBEL, DIRECTOR, COLORADO WATER
CONSERVATION BOARD, DENVER, CO
Ms. Gimbel. Chairman Johnson, thank you very much for the
invite. Good afternoon, Senator Salazar. My name is Jennifer
Gimbel and I serve as the Director of the Colorado Water
Conservation Board within the Colorado Department of Natural
Resources.
I am here on behalf of the non-Federal parties to the
recovery program of San Juan and Upper Colorado River in
support of S. 3189. I have provided detailed written testimony
that you have received. S. 3189 provides needed amendments to
Public Law 106-392, the authorizing legislation for the Upper
Colorado and San Juan Endangered Fish Recovery Programs.
I don't think I can do any better at the job explaining the
need for those programs than Senator Barrasso did and Senator
Salazar have already done except to add maybe a couple of
figures to that. That is that the program has provided
compliance, ESA compliance, for more than 1,600 water projects.
We're talking about over three million acre feet of depletion.
This includes ESA compliance for the Bureau of Reclamation
Projects in the Upper Basin which by the way are very important
in the scheme of the Colorado River Compact. The programs have
enjoyed bipartisan support that have been hailed by
Administration from both parties. By 2010 these programs will
have constructed approximately $100 million in facilities: fish
passages, fish screens, flooded bottom lands, habitat,
hatcheries and a reservoir that augments flows for endangered
fish.
These large complex facilities on and/or near the Upper
Colorado River and San Juan River Basins will require
rehabilitation, repair or replacement. Authorization for the
Secretary to conduct capital construction expires September 30,
2010. Existing funding authority will have been expended.
S. 3189 will authorize an additional $12 million for
capital projects for the San Juan Program, including $7 million
for protecting critical habitat of endangered fish species from
rock slides in the area west of Farmington, New Mexico, and $5
million for repair, rehabilitation and replacement of
constructed capital facilities as needed until the year 2023.
It will also authorize an additional $15 million in Federal
expenditures for capital projects for the Upper Colorado River
Program to construct a fish screen in critical habitat on the
Green River in Wyoming and again, also for repairs,
rehabilitation and replacement of constructed capital
facilities through 2023.
S. 3189 also recognizes the additional non-Federal cost
share of $56 million through 2030. The authorization for
Federal appropriations would only increase $27 million over 13
years. The remaining $56 million is provided by additional non-
Federal contributions as allowed in Public Law 106-392.
The non-Federal cost share of capital cost increases from
52 percent to 58 percent. Chairman Johnson you had mentioned
the cost share of 17 million. Actually the non-Federal cost
share has been about $65 million and will go up to $121 million
with this bill.
The bill also authorizes annual base funds for power
revenues which have contributed significantly to the success
and implementation of the Recovery Programs. That is set to
expire in 2011. At that point annual base funding will be
reduced by 39 percent.
Annual base funding supports actions other than operation
and maintenance of capital projects and monitoring. It includes
non-native fish management, research, public information and
involvement and program management. If this funding is
eliminated from both programs this could delay and
significantly impede the Recovery Program achievements in
restoring the populations. As a result, I believe as either
Senator Salazar or Senator Barrasso mentioned, more than 1,600
water projects, as well as future projects, would be in
jeopardy.
Also, S. 3189 provides authority for the Western Area Power
Administration to obtain loans from the Colorado Water
Conservation Board should power revenues be insufficient in any
specific year. This authority is already provided for capital
projects. This bill would then allow that authority to happen
for the rehabilitation and the rehab and replacement and
repairs.
I appreciate the opportunity to provide this testimony to
the Water and Power Subcommittee. I would note that many, many
water user groups have supported this. We have letters from the
Wyoming Water Association, Colorado Water Congress, Nature
Conservancy, Western Resource Advocates, Navajo Nation, San
Juan Water Commission, the list goes on.
With that, I would be happy to answer any questions, Mr.
Chairman. Thank you for this opportunity.
[The prepared statement of Ms. Gimbel follows:]
Prepared Statement of Jennifer Gimbel, Director, Colorado Water
Conservation Board, Denver, CO
My name is Jennifer Gimbel. I serve as Director, Colorado Water
Conservation Board, within the Colorado Department of Natural
Resources. I am here to testify in support of S. 3189.
The Colorado Water Conservation Board (CWCB) has been involved in
the Upper Colorado River Endangered Fish Recovery Program and the San
Juan River Basin Recovery Implementation Program (programs) since the
inception of these programs in 1988 and 1992, respectively. The
Colorado Water Conservation Board and the Colorado Division of Wildlife
actively participate in the programs on behalf of the State of
Colorado. The State Engineer's Office participates in administration of
water for delivery to endangered fish habitat within the state of
Colorado. We not only participate in the governance and the technical
committees of the programs, but the CWCB has also provided loans to the
programs to cover capital projects in accordance with Public Law 106-
392.
I believe you will be receiving or have received letters of support
for S. 3189 from several participants in the programs, including the
States of Colorado, New Mexico, Utah, and Wyoming, American Indian
tribes, water users, power customers and environmental organizations.
UPPER COLORADO AND SAN JUAN RIVER BASIN RECOVERY PROGRAMS
The programs have the goals of recovering four federally listed
endangered fish species in the Upper Colorado River basin while water
development and management activities proceed in compliance with state
laws, interstate compacts, and the federal Endangered Species Act.
Activities of the programs provide Endangered Species Act compliance
for more than 1,600 water projects depleting approximately three
million acre-feet per year in the Upper Colorado River basin, including
every Bureau of Reclamation project in the Upper Basin upstream of Lake
Powell. No lawsuits have been filed as a result of ESA compliance. The
programs have substantial grassroots support among participants,
including the four Upper Basin states (Colorado, New Mexico, Utah,
Wyoming), American Indian tribes (Navajo Nation, Jicarilla Apache
Nation, Southern Ute Tribe, Ute Mountain Tribe), water users, power
customers and environmental organizations. Four federal agencies (U.S.
Fish and Wildlife Service, U.S. Bureau of Reclamation, National Park
Service, and Western Area Power Administration) participate in the
programs. Since the inception of these programs, they have enjoyed
strong support in Congress, as indicated the substantial bi-partisan
support in both the Senate and the House of Representatives for annual
appropriations.
The programs have been hailed by administrations of both parties
for their successes. In 2000, Secretary of the Interior, Bruce Babbit
referred to the Upper Basin recovery programs as ``an ongoing success
story'' (Colorado River Water Users Association, 2000). Secretary of
the Interior Gale Norton referred to the programs as a national model
of how the Endangered Species Act should be implemented (Colorado Water
Congress, 2006). In 2008, Secretary Dirk Kempthorne awarded the Upper
Basin and San Juan programs the Department of the Interior's
Cooperative Conservation Award for the successful history of
stakeholder collaboration resolving ``seemingly intractable water use
conflicts...'' (see attached Exhibits A and B).*
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* Exhibits A-C have been retained in subcommittee files.
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P.L. 106-392: P.L.106-392 was signed into law on October 30, 2000.
The law authorizes the Bureau of Reclamation to provide cost sharing of
capital construction and annual operations for the endangered fish
recovery programs for the Upper Colorado and San Juan River basins. The
law recognizes significant and specific cost sharing contributions to
the programs by the States of Colorado, Wyoming, Utah, and New Mexico,
power customers, and water users for these purposes.
P.L. 106-392 has been amended twice. P.L.107-375 extended the
period for capital construction to 2008 for both programs. P.L.109-183
extended the period for construction of capital projects for both
programs through FY 2010, authorized an additional $15 million in
capital expenditures for the Upper Colorado River Recovery Program, and
recognized an additional $11 million in non-federal cost share
contributions.
S. 3189 provides for additional needed authorization for capital
construction of projects, recognizes additional non-Federal cost
sharing, and continues annual funding of the programs at current
levels, as discussed in detail below.
S. 3189 AMENDMENTS REGARDING ADDITIONAL AUTHORIZATION OF CONSTRUCTION
OF CAPITAL PROJECTS AND ADDITIONAL NON-FEDERAL COST SHARING
NEED FOR 2008 AMENDMENTS RE: CAPITAL PROJECTS: By 2010, these two
programs will have constructed approximately $100 million in facilities
(fish passages, fish screens, flooded bottomlands habitat, hatcheries,
and a reservoir that augments flows for endangered fish) (Exhibit C).
These large, complex facilities are on, or adjacent to, major rivers in
the Upper Colorado and San Juan River basins and will require
rehabilitation, repair or replacement. Many of the facilities are
susceptible to damage by floods and debris associated with the major
rivers on which they are located, i.e. Green, Colorado, Gunnison and
San Juan.
Additional authority is needed to complete the Tusher Wash fish
screen on the Green River. Additional time is needed to complete
capital projects in the San Juan basin.
Authorization for the Secretary of the Interior to conduct capital
construction expires on September 30, 2010. Existing funding authority
for the Upper Colorado Program will have been expended.
The proposed amendments will authorize funding to protect critical
habitat. Unstable rock formations adjacent to designated critical
habitat for the endangered razorback sucker and Colorado pikeminnow in
the San Juan River caused a major landslide near Farmington, New
Mexico. A second slide occurred in August, 2007 in the same area. U.S.
Fish and Wildlife Service determined that the unstable cliffs are a
threat to critical habitat in the San Juan River. The estimated cost of
stabilizing the rock formation is $7 million. Presently, authority for
this type of activity does not exist in P.L. 106-392. It would be
prudent to have such authority to ensure recovery of the species and
continued ESA compliance for the water projects that rely on the
programs.
Specifically, S. 3189 would achieve the following:
Authorize an additional $12 million in federal expenditures
for capital projects for the San Juan Program for the purposes
of a) protecting critical habitat of endangered fish species
from rock slides in the area west of Farmington ($7 million),
and b) repair, rehabilitation and replacement of constructed
capital facilities (fish passages, fish screens, habitat,
hatcheries) as needed through 2023 ($5 million).
Authorize an additional $15 million in federal expenditures
for capital projects for the Upper Colorado Program for the
purposes of a) constructing a fish screen on Tusher Wash in
critical habitat on the Green River, Utah in light of
significantly increased construction material costs, and b) for
repairs, rehabilitation and replacement of constructed capital
facilities (fish screens, fish passages, habitat, hatcheries)
as needed through 2023.
Recognize additional non-federal cost sharing of $56 million
through 2023.
Appropriations will only be requested as needed and any requests
would be subject to Congressional scrutiny.
IMPACT ON COST SHARING: S. 3189 would increase the total capital
projects authorizations from $126 million to $209 million. However,
authorization for federal appropriations only would increase from $61
million to $88 million through 2023, an increase of $27 million over
the 13 fiscal year period. The remaining $56 million is provided by
additional non-federal contributions of the same kind as recognized by
and included in the authorizations for the programs set forth by
Congress in P.L. 106-392. This additional non-federal contribution is
from power replacement costs due to reoperation of Flaming Gorge Dam to
benefit the endangered fish. It is conservatively estimated at $56
million over the current estimate of $22.1 million (Flaming Gorge EIS,
U.S. Bureau of Reclamation, 2007). With the recognition and inclusion
of these additional, out-of-pocket power replacement costs, the non-
federal share of capital costs increases from 52% to 58%. Non-federal
cost sharing also includes $8.9 million from water users previously
recognized by Congress.
A comparison of cost sharing under the proposed 2008 amendments
with the present law is provided below.
s. 3189 amendments regarding authorization of continued annual base
funding from power revenues
ANNUAL BASE FUNDING: Annual base funds from power revenues
contribute significantly to the successful implementation of recovery
actions by both recovery programs, including instream flow
identification, evaluation, and protection; habitat restoration and
maintenance; management of nonnative fish impacts; endangered fish
propagation and stocking; research, monitoring, and data management;
public information and involvement; and program management. Subsequent
to passage of P.L. 106-392, $27,139,900 in power revenue base funds
have been expended or obligated by the Upper Colorado Recovery Program,
and $12,969,300 by the San Juan Recovery Program (2001--2007). The U.S.
Fish and Wildlife Service, the four participating states, American
Indian Tribes, and water users also provide additional annual funding
and in-kind contributions for these activities.
NEED FOR 2008 AMENDMENTS: P.L. 106-392 requires the Secretary of
the Interior to submit a report to the appropriate Committees of the
United States Senate and House of Representatives by the end of fiscal
year 2008 on the utilization of power revenues for annual base funding
of the recovery programs, and to make a recommendation regarding the
need for continued annual base funding from power revenues beyond
fiscal year 2011 that may be required to achieve the goals of these
recovery programs. The report has been under revision in the Department
of the Interior since January, 2008. It is expected to be delivered to
Congress soon. Regardless of when the delivery of this report occurs,
we urge Congress to enact the amendments to continue annual funding of
the recovery programs at current levels.
Unless reauthorized by Congress, the utilization of power revenues
for annual base funding of recovery program actions, other than for
operation and maintenance of capital projects and monitoring, will
cease after fiscal year 2011.
The approximate fiscal impact of reductions in annual base funding
(estimates in fiscal year 2008 dollars) after fiscal year 2011 without
reauthorization is summarized as follows:
Without reauthorization, annual base funding from power revenues
for nonnative fish management, research, public information and
involvement, and program management would be eliminated from both
recovery programs. This would delay and significantly impede the
recovery programs' achievements in restoring populations of the
endangered fishes. As a result, ESA compliance provided by recovery
program actions for more than 1,600 water projects, as well as future
projects, would not likely continue. ESA compliance depends not only on
implementing recovery actions, but is ultimately and directly linked to
long-term improvement in the status of fish populations and achievement
of recovery.
The non-federal participants in the programs recommend that
Congress also pass amendments to insure continued base funding at
current levels. S. 3189 accomplishes this. The report by the Secretary
is under review in the Department of the Interior. It is expected to be
delivered to Congress soon, and is expected to include recommendations
consistent with the recommendations of the non-federal participants
listed below, which are embodied in S. 3189.
RECOMMENDATIONS REGARDING BASE FUNDING: The non-federal
participants in the programs offered the following recommendations to
the Secretary regarding continued authorization of base funding to be
incorporated into P.L. 106-392:
1. P.L.106-392 should be amended to allow continued use of
power revenues through 2023 for annual base funding of all
activities as originally authorized and which are necessary to
achieve recovery. The expected date of recovery of the
razorback sucker and bonytail is 2023. In 2020, the Secretary
should be required to submit a report to Congress on the need
for continued funding beyond 2023 and the recommended sources
of funding.
2. To assure that annual base funds are available in the
event that the balance in the Upper Colorado River Basin Fund
cannot meet annual base funding needs for the recovery
programs, Congress should:
a) Add authority to enable Western Area Power
Administration to borrow from the Colorado Water
Conservation Board Construction Fund the annual base
funds that would otherwise be derived from the Upper
Colorado River Basin Fund (Basin Fund) and to repay
those borrowed funds from the Basin Fund, as is
currently authorized for capital construction projects
funded with the Basin Fund; and,
b) Add specific authority for congressional
appropriations for annual base funding if annual
funding of the recovery programs cannot be provided
from the Basin Fund or the Colorado Water Conservation
Board loans in a given year or years, and direct
Reclamation, in consultation with Western Area Power
Administration, to inform Congress if such a situation
is reasonably foreseeable as far in advance as
possible.
3. The language in the existing legislation that states that
base funding and depletion charges previously agreed upon
should be retained: ``Nothing in this Act shall otherwise
modify or amend existing agreements among participants
regarding base funding and depletion charges for the Recovery
Implementation Programs.'' This provides that annual and in-
kind cost sharing by the U.S. Fish and Wildlife Service, the
Bureau of Reclamation, the four participating States, American
Indian Tribes, and water users identified in the original
agreements will continue.
4. The authorizing legislation should be amended to state
that provision of base funding through 2023 should be
contingent upon the recovery programs modifying the respective
Cooperative Agreements extending the terms of the recovery
programs through 2023, and that any needed modifications take
place at least one year prior to expiration of the current
agreements.
S. 3189 implements these recommendations.
Letters supporting these recommendations have been submitted to the
Secretary of the Interior by the following non-federal recovery
programs' participants for the Secretary of the Interior:
State of Colorado; State of Utah; State of New Mexico; State
of Wyoming; Jicarilla Apache Nation; Navajo Nation; Southern
Ute Indian Tribe; Ute Mountain Ute Tribe; Colorado Water
Congress; Utah Water Users Association; Wyoming Water
Association; San Juan Basin Water Users;Colorado River Energy;
Distributors Association (CREDA).
I appreciate the opportunity to provide this testimony to the Water
and Power Subcommittee.
Senator Johnson. Thank you. Mr. Keppen, your testimony
recommends that S. 2842 take into account the ongoing
inspection and maintenance programs paired up by BOR and water
users. Could these programs provide the basis for a national
priorities list of infrastructure maintenance to water users?
Prioritize maintenance actions based on the risk posed to
populated areas?
Mr. Keppen. I would say, Mr. Chairman, the answer to your
first question is yes. I think we've advocated kind of a
cooperative approach to doing that between the water users and
the Bureau of Reclamation. Maybe one of those forums is
actually what Commissioner Johnson mentioned earlier, this
canal workshop series that has been set up, but something
similar to that where the water users, the local entities and
the Bureau are sitting down together to come up with that list.
The second question, I guess, was regarding whether water
users prioritize maintenance actions based on the risk posed to
population areas. It's going to depend, I think, where you're
at. I ran a flood control district in Sacramento Valley for 3
years about 10 or 15 years ago. I would say, definitely yes, in
that case. I think that it is the case probably for most
districts.
Maintenance actions are contingent on a lot of things.
Population is probably one of the most important, also the
location of important infrastructure, pumping plants, things
like that. But I would say, you know, without going out and
canvassing my membership based on my experience and based on
what I've seen out there, I would say, yes. Maintenance actions
are probably, very definitely, are based in large part on the
areas they protect.
Senator Johnson. Mr. Long, BOR questions whether the
revenue available from the excess capacity contracts will be
sufficient to repay the cost of the conduit. How does your
analysis differ from BOR's?
Mr. Long. Chairman Johnson, our analysis differs in that we
have used contracts that have not been executed but we fully
expect to be executed. In the West we are continuing our
drought this year. As a very good example we have had adequate
snowfall in the mountains but this spring has brought little or
no rain.
So storage is absolutely critical for us folks in the West.
The larger communities, Colorado Springs, those entities at
this time are pursuing these contracts that we fully expect to
be executed.
Senator Johnson. If BOR is correct and the excess capacity
contract for revenues are not sufficient to meet the repayment
obligation would the water users make up the difference?
Mr. Long. Mr. Chairman, the water users, our participants
would make every effort to make up the difference. Again, we
think the Bureau is incorrect. Storage space in the West is
more valuable than gold or oil.
It will be utilized. There will be contracts that generate
revenue. Whether they be short term, if and when annual
contracts were long term. We fully expect the revenue to be
there.
Senator Johnson. Ms. Gimbel, the Administration's testimony
suggests that S. 3189 be amended to increase the non-Federal
contribution for capital projects. It also opposes the
provisions authorizing WAPA from seeking loans from the
Colorado Conservation River Board. How would the
Administration's proposed changes to the bill affect the
support that the participants in the Recovery Programs?
Ms. Gimbel. Mr. Chairman, first of all I'm rather amazed
that a 58 percent cost share that this bill will rise up to for
non-Federal is not sufficient for the Administration to
consider continued support of this program. With respect to the
WAPA, Western Power Administration, we have already done loans
with them on capital projects. My Board has given them two
loans.
This is just allowing the same to happen, if necessary, to
keep the program continuous for rehabilitation and repair
projects, replacement projects.
Senator Johnson. Senator Salazar.
Senator Salazar. Thank you very much, Chairman Johnson.
Director Gimbel, let me ask you a question just concerning the
Recovery Programs of the Upper Colorado and San Juan. How many
states benefit from the implementation of those recovery
programs?
Ms. Gimbel. Four states and probably more because the water
goes downstream to the lower basin to other states. But not
only is it just the states, as I've said, it's three million
acre feet worth of depletions as well as the water users, the
Federal Government. Everybody benefits.
Senator Salazar. Would it be fair to say the states of
Wyoming, Colorado, Utah and New Mexico would have their water
right systems essentially torn asunder if it weren't for the
fact that we have the Endangered Fish Recovery Programs that
had been agreed upon by those states and the Federal
Government?
Ms. Gimbel. That is a very fair statement, sir.
Senator Salazar. Thank you very much. Since I recognized
other Colorado people in the audience, a friend that has been
working long and hard on the Recovery Programs for Colorado,
Tom Pitts, I also see out in the audience. Welcome to the
hearing today as well.
Mr. Long, take a minute and just through your eyes,
describe those communities downstream of Pueblo that would
benefit from the Lower Arkansas River Conduit. What are they
like?
Mr. Long. Each and every community is a small agriculture
community, well below the average household income of the State
of Colorado, probably half. It is an area though that has
struggled, but fought hard to survive and I think successfully.
We continue to be a very productive agriculture area, even
though we're now in probably our seventh year of drought.
But it's an area with a great deal of heart, a great deal
of patriotism and we believe it is important to continue the
agriculture heritage and production of food for American
citizens.
Senator Salazar. If this Arkansas River Conduit becomes a
reality will it help in the economic diversification of those
communities downstream of Pueblo as they look at regaining
their foothold economically?
Mr. Long. I believe so, absolutely. It is difficult to
attract new industry with our current water supply. Some
communities, we have 12, at least 12 communities right now who
are under enforcement orders for the State of Colorado to
improve water quality. The balance are also struggling with
being in compliance.
Two communities such as mine, we have built reverse osmosis
plants utilizing Federal funds. Those communities and that has
ended up being a band aid. Those communities are now going back
to State and Federal programs requesting assistance in meeting
the discharge demand. Reverse osmosis plants create a discharge
which is considered to be a hazardous material.
So, all of these factors make it very difficult to promote
economic development. We have lost our tomato canning factory,
our pickle factory. We have replaced those with other
industries. But yes, we need good, clean water to be
successful.
Senator Salazar. Mr. Long, can you also explain to the
committee the effort that it took for you and for others to go
before the State, Colorado Water Conservation Board and their
loan program and then the State General Assembly to secure the
loan you have obtained?
Mr. Long. Yes, and fortunately we had a great deal of help
from some of the Board members from the Colorado Water
Conservation Board. But it was a project that took nearly 2
years. We spent several hundred thousand dollars in refining
our project coming up with what we believe is the best
proposal, the most cost effective, the most long term solution.
We took this proposal to the Colorado Water Conservation
Board. They approved it unanimously upon first presentation and
then passed it to the State legislature for approval who also
approved it a little over a year ago.
Senator Salazar. I want to thank you, Mr. Long and Ms.
Gimbel and all the witnesses that are here from Colorado. Mr.
Chairman, Senator Johnson, thank you for your inspiration and
your leadership of this committee.
Senator Johnson. I have no additional questions. Thank you
all to the witnesses for your participation today.
For the information of Senators and their staff, questions
for the record are due by the close of business tomorrow. With
that, this hearing is adjourned.
[Whereupon, at 3:50 p.m. the hearing was adjourned.]
APPENDIXES
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Appendix I
Responses to Additional Questions
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Responses of Jennifer Gimbel to Questions From Senator Johnson
The Administration's testimony suggests that S. 3189 be amended to
increase the non-Federal contribution for capital projects. It also
opposes the provisions authorizing WAPA from seeking loans from the
Colorado River Water Conservation Board.
Question 1. How would the Administration's proposed changes to the
bill affect the support of the participants in the recovery programs?
Answer. I would like to address your question in the two parts as
posed.
A. The Administration's testimony suggests that S. 3189 be amended
to increase the non-Federal contribution for capital projects.
P.L. 106-392 recognizes contributions to capital projects by the
four Upper Basin states (Colorado, New Mexico, Utah, and Wyoming) of
$17 million dollars and a $17 million dollar contribution by power
customers.
Commissioner Johnson states in his testimony: ``Third, this bill
attributes additional non-federal cost sharing of $56 million dollars
which relates to power replacement costs borne by power consumers due
to the operation of Flaming George Dam to benefit the endangered fish
(years 2010 through 2023). This is consistent with the original
definition of cost sharing provided in Public Law 106-392.''
These power replacement costs, a result of reoperating Flaming
Gorge Dam to benefit the endangered fish, are real, ``out-of-pocket''
expenses borne by local, rural electrical utilities, communities and
Native American tribes who hold contracts for federal electrical power.
In addition to the increased non-federal cost sharing of $56
million, the proposed amendments (S. 3189) request Congress to
authorize an additional $27 million dollars in federal cost sharing,
which is approximately one-half the additional non-federal cost sharing
recognized in the bill. The additional $56 million dollars of non-
federal cost share raises the non-federal cost share for capital
projects from 52 percent under current law to 58 percent under the
proposed amendments, even with the additional $27 million dollars in
federal cost share.
Given that the non-federal cost share with the proposal amendments
in S. 3189 will be 58 percent of capital projects construction costs,
it is not considered reasonable to ask for additional cost sharing from
states and power customers.
Requests for additional cost sharing to raise the non-federal share
above 58 percent would likely meet strong opposition from states
legislatures and power customers, and erode support for these
nationally recognized models of implementation of the Endangered
Species Act.
B. The Administration also opposes provisions authorizing WAPA from
seeking loans from the Colorado River Water Conservation Board.
Annual funding from the Upper Colorado River Basin Fund
(hereinafter referred to as the Basin Fund) was authorized in P.L. 106-
392 at $4 million dollars/year for the Upper Colorado Recovery Program
and $2 million dollars/year for the San Juan Recovery Program, adjusted
annually for inflation. These funds are used to operate and maintain
constructed capital projects (fish screens, fish passages, bottom lands
habitat, hatcheries), monitor native and non-native fish populations,
conduct extensive non-native species management and control activities,
and meet program management, and administration services needs and
support other activities necessary to recover endangered fish species.
S. 3189 is designed to ensure the availability of those funds. As
Commissioner Johnson points out:
The proposal to grant WAPA borrowing authority would replace
a provision of existing law which requires that WAPA and the
Bureau of Reclamation request appropriations in the event that
base funds are insufficient.
During a critical stage of the recent prolonged drought in the
western United States, despite Western Area Power Administration's
attempts to raise electrical power rates, reduce contractual
obligations and take other actions in response to the drought, Western
forecasted that the Basin Fund balance would be insufficient to fund
the environmental programs, including the two recovery programs base
funding needs. Western and Reclamation undertook temporary actions in
order to continue to fund these programs, however, no request for
appropriations was made to Congress.
The amendment ensures continuation of annual funding for the
recovery programs. This funding is for essential activities to recover
the fish species--and is necessary to maintain ESA compliance for some
1,600 water projects, including every Reclamation project on the
mainstem and tributaries within the Upper Colorado River Basin upstream
of Glen Canyon Dam.
The loan provision provides that base funding, in the event of a
drought, be provided from the Basin Fund as originally intended by
Congress, if a loan agreement can be worked among Reclamation, WAPA,
and the Colorado Water Conservation Board.
I would point out that the balance of monies in the Basin Fund are
a function of varying hydrological conditions in the Colorado River
Basin and the price of supplemental electrical power on a very volatile
market. The current drought began in water-year 2000 and has been
severe and long-lasting. A Basin Fund with an adequate balance to
``tie-over'' O&M replacement and emergency expenses in one drought year
may become depleted in successive drought years or because of high
prices for supplemental electrical power. Without the loan provision,
Recovery Program participants would be requesting appropriated funds in
Reclamation's budget on very short notice. This would be disruptive to
the normal Reclamation budgeting and appropriations process and could
disrupt other Reclamation activities included in long term budget
planning. Such requests would place our Congressional delegations in a
difficult position.
The Administration also states ``further, it has been long standing
Treasury policy that, if borrowing authority is justified, federal
agencies should be authorized to borrow exclusively from the
treasury.'' While this may be general policy, Congress, in P.L. 106-
392, provided borrowing authority for recovery program capital funds
from the Colorado Water Conservation Board, if needed, in the event the
Basin Fund could not provide those funds. Western Area Power
Administration has used this loan provision and borrowed from Colorado
Water Conservation Board in two successive years during the current
drought. The additional provision for borrowing of annual funds from
the Colorado Water Conservation Board is consistent with established
Congressional policy for the recovery programs.
The non-federal participants in the programs support the additional
borrowing authority for annual base funds as a means of ensuring that
base funds are available for essential recovery program functions when
severe drought conditions in the Upper Colorado River Basin impact the
Basin Fund. This provision is consistent with Congressional intent of
having the Basin Fund provide annual funding to the recovery programs,
and provides the means for repayment from the Basin Fund of any such
loan. Borrowing is not intended to be routine or occur over a period of
years. It is likely that any shortfalls will be temporary. We
anticipate this borrowing provision would be used infrequently by
Western Area Power Administration and Reclamation.
Question 2. Your testimony indicates that the S. 3189 would
authorize additional federal appropriations for the repair,
rehabilitation, and replacement of constructed facilities that are key
to the ESA recovery programs.
Will this be an ongoing Federal responsibility after 2023, the
projected recovery timeframe for the endangered species at issue, or
will the States and other program participants take over some
responsibility for maintaining these facilities?
Answer. Currently, P.L. 106-392 states that ``utilization of power
revenues for annual base funding shall cease after fiscal year 2011,
unless reauthorized by Congress; except that power revenues may be
continued to be utilized to fund the operation and maintenance of
capital projects and monitoring.''
S. 3189 provides for annual base funding to cease after 2023,
unless reauthorized by Congress except that power revenues may continue
to be utilized only to fund the operation and maintenance of capital
projects and monitoring. S. 3189 also requires the Secretary submit a
report by the end of fiscal year 2020 regarding continued use of base
funding to Congress after 2023 that may be required to fulfill the
goals of the recovery implementation programs.
Congress will have the opportunity prior to 2023 to assess the
needs of the recovery programs at that time and determine the need for
continuing annual funding for operation and maintenance of these
facilities. We anticipate that the Congress will confer with the states
and other program participants regarding these needs and make an
appropriate decision regarding ongoing federal responsibilities.
Question 3. One of the tables attached to your testimony indicates
that overall base funding would be reduced by 39% ($2.8 million) after
2011, if the use of power revenues were not reauthorized as set forth
in S. 3189.
What are the other sources of base funding that make up the
remaining 61% ($4.25 million)?
Answer. All the base funding referred to in the testimony and table
($7.017 million dollars in FY08) is from power revenues. Without the
amendments proposed in S. 3189, this source of funding would be reduced
by 39 percent ($2.766 million) to $4.256 million. Therefore, the
remaining 61 percent referred to in the testimony is also from power
revenues.
I would like to point out that base funding is also provided by the
states. Furthermore, the states are mandated under P.L. 106-392 to
continue that funding under Section 3(d) (2) of P.L. 106-392 which
states as follows: ``Nothing in this act shall otherwise modify or
amend existing agreements among participants regarding base funding and
depletion charges for the recovery implementation programs.'' The
intent of this clause, which remains unmodified by S. 3189, is to
ensure that original agreements to provide base funding by the states
and water users are maintained. For example, in 2008, the states of
Colorado, Utah, and Wyoming contributed $425,000 dollars in annual
funding to the program through in-kind contributions, in addition to
the costs of participation in the programs through various committees
and subcommittees. Water users also have contributed approximately $2
million through depletion fees on new water projects since the
inception of the programs.
Question 4. S. 3189 would continue to use revenues in the Upper
Colorado Basin Fund to help pay for the ESA Recovery Programs.
What is your understanding on whether there will be sufficient
revenues available from the Fund to continue to assist in addressing
environmental needs in the Upper Colorado River Basin (i.e. the ESA
recovery programs and the Glen Canyon Adaptive Management Program)?
Answer. Western Area Power Administration cannot predict with
certainty that monies in the Basin Fund will be available to meet the
needs of these environmental programs under all hydrological and market
conditions. Moreover, monies collected in the Basin Fund are required
to repay to the Treasury principle, interest on CRSP facilities and
OM&R and emergency expenses. This is precisely the purpose of extending
the loan authority to include base funding for the two recovery
programs. Over the long term, there may be periodic shortages caused by
drought and adverse market conditions that would result in use of the
provisions of S. 3189 to obtain a loan from the Colorado Water
Conservation Board or, if such a loan could not be negotiated, program
participants requesting funds to be appropriated by Congress to cover
annual program costs. We anticipate that in the long term the Basin
Fund will be able to provide the funds, and in the event of a loan, the
Basin Fund will be able to repay the loan prior to the prescribed
repayment date of 2057 in S. 3189.
______
Responses of Bill Long to Questions From Senator Johnson
Your testimony indicates that if the Conduit were not built, the
participating communities would still need to make substantial
investments to meet water quality standards.
Question 1. What options do the communities have with respect to
long-term water supplies, and how would they pay for the investments
needed to make that water available? Is the Conduit the most cost-
efficient way to address long-term water needs?
Answer. The need for the Arkansas Valley Conduit is driven by
projected population growth, the economically-disadvantaged nature of
the lower Arkansas River valley, and increasingly costly water
treatment requirements being experienced by certain water providers in
the basin. The increasing cost of water treatment is a result of the
poor quality of locally available groundwater and increasingly
stringent requirements of the Safe Drinking Water Act. The local
groundwater available from the Arkansas River alluvium has historically
been high in total dissolved solids (TDS), sulfates, and calcium, and
has objectionable concentrations of iron and manganese. The Colorado
Department of Public Health and Environment (CDPHE), in their February
2002 report on the status of water quality in Colorado, states:
The Lower Arkansas River in Colorado is the most saline
stream of its size in the U.S. The average salinity levels
increase from 300 parts per million (ppm) TDS east of Pueblo to
over 4,000 ppm near the Kansas state line. The shallow alluvial
groundwater along the River has similar salinity.
The results of CDPHE-sponsored sampling of the Lower Arkansas River
alluvial aquifer showed that a significant number of domestic water
supply wells contained nitrate levels above 10 mg/l (EPA's drinking
water standard). Additionally, various water suppliers have recently
reported measurable concentrations of radionuclides in their water.
This extremely poor groundwater quality, combined with increasingly
stringent quality regulations of the Safe Drinking Water Act, has
caused several local water suppliers to invest in expensive water
treatment facilities to assure a reliable water supply for their
customers. Due to poor groundwater quality, some local water providers
are already out of compliance with the increasingly stringent water
quality regulations of the Safe Drinking Water Act. Others are
increasingly at risk of being designated out of compliance. Facing
federal sanctions, several water suppliers have investigated expensive
water treatment facilities to achieve compliance with the federal
regulations and to assure a reliable water supply for their customers.
The risk posed to the economically depressed region's ratepayers by
requirements for as many as 10 new treatment facilities with uncertain
costs are considered unacceptable.
Generally, all drinking water systems in the Lower Arkansas River
Basin, from St. Charles Mesa in eastern Pueblo County to Lamar in
Prowers County, are concerned with the poor water quality in this
region. Many of the more than 40 water providers in the Lower Arkansas
River Basin could benefit from the Arkansas Valley Conduit water
providers do not satisfy, or only marginally satisfy, current drinking
water standards. All communities must meet the state and federal
primary drinking water standards through treatment or source
replacement. Less documented, however, is the potential burden placed
upon communities by high raw water concentrations of various
unregulated water quality constituents such as iron, manganese and
hardness. These constituents can cause accelerated infrastructure decay
and loss of tax base and economic impacts associated with factories and
businesses locating elsewhere.
In 2003, consultants for WaterWorks! organization , a group of
Arkansas Valley water providers, evaluated what they called the ``No-
Action'' alternative. The No-Action alternative considered the actions
likely to be necessary for the larger municipalities and water
suppliers in the Conduit project area, should the Conduit not be built.
A copy of these pages from the 2003 report is attached.* Among the
major alternatives to the Conduit to address the significant water
quality issues is Reverse Osmosis and groundwater injection. The
Financial Feasibility Study published in October 2004 shows a no-action
alternative cost of $252.7 million. The study notes that this estimate
is on the low side because of ``Unknowns regarding future water quality
regulations'', ``Continued degradation of water quality requiring
additional treatment'', and ``Stringent regulation pending regarding
disposal of waste streams from the water treatment processes''. The
factors are expected to drive up the cost of the no-action alternative
that would require each water provider to upgrade their current
treatment facilities.
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* Report has been retained in subcommittee files.
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The Conduit is the most cost-efficient way to address long-term
water needs. Rather than continuously spending funds for upgraded water
treatment facilities and increased operation and maintenance costs, it
has been proposed that a pipeline from Pueblo Reservoir could be used
to provide higher quality water to users in the Lower Basin. The water
available from Pueblo Reservoir readily satisfies the requirements of
the Safe Drinking Water Act and is not expected to change significantly
in the future. The benefits of the proposed pipeline are that the well-
defined costs of constructing and operating a pipeline could replace
the continuously increasing and unconstrained costs of water treatment.
Additionally, the improved quality of potable water will result in a
better quality of life for water users in the basin.
The conduit will reduce the drinking water treatment costs in two
ways. First, a single Valley filtration plant will, through economics
of scale reduce overall treatment costs. For example, to run a single
filtration plant of 24 million gallons per day (mgd) is 60 percent less
expensive than operating 20 smaller plants. The annual savings could be
approximately $2 million. Secondly, for those communities operating
Reverse Osmosis (RO) plants, now or in the future, the costs of
treatment can be reduced through the blending of conduit and local
water. It may be possible to deliver Conduit water RO plants and
pressures which either eliminate or significantly reduce the need for
pumping, and the electricity required for it.
Many communities are limited in the amount of ground water they can
use for drinking water because of its quality. Mixing the newly
available conduit water with already developed ground water systems
will maximize use of existing ground water supplies. Depending on the
varying water quality of the ground water, the conduit water could
allow municipalities or other water providers to fully utilize their
existing sources and minimize testing or treatment costs. Additionally,
existing supplies could be utilized as drought protection in the event
a prolonged drought period is experienced.
Question 2a. BOR questions whether the revenue available from the
excess capacity contracts will be sufficient to repay the costs of the
Conduit.
How does your analysis differ from BOR's? What current repayment
obligations exist for the Fry-Ark Project?
Answer. Our revenue availability analysis makes a conservative
forecast of future contracts and income, using present contracts and
BOR policies to anticipate terms and rates of these contracts. We have
studied the availability of excess capacity in Project facilities as
part of a District led effort called the Preferred Storage Options
Plan. Because of our work with the Project beneficiaries, and current
contract requests already before BOR, we have a good idea of the scope
of contracts that will be executed in the future and have staged the
revenue based on a conservative anticipation of when those contracts
are likely to be in place. We have only accounted for a portion of the
likely future revenue in our calculation.
BOR on the other hand, only counts those contracts already executed
and does not anticipate execution of any future contracts in their
analysis.
With regard to current repayment obligations, Southeastern signed a
50 year repayment contract with Reclamation in 1982 for the portions of
the project that it is responsible for repaying. The original cost for
the Project was $585,103,000, with Southeastern's liability being
$132,237,478. Southeastern's initial repayment was split with
Irrigation uses owing $74,348,993, and M&I owing $57,888,485. The M&I
portion incurs an annual interest obligation at the rate of 3.046
percent. Southeastern is currently paying down the M&I portion of the
balance, then the remaining Irrigation portion will be repaid.
Southeastern's contract with Reclamation requires it pay the
Operations & Maintenance (O&M) costs for the upcoming year first, and
then any remaining collections will be applied against the current debt
balance. The O&M expected payment for 2008 is $2,565,500.
As of December 31, 2007, Southeastern owed $76,123,882 on the
original debt. Southeastern's ad-valorem tax collections to be applied
to payment for this year are expected to total $4,304,083. In addition,
all water sales and winter water storage collections will be applied
against the balance owed. After paying the O&M, it is expected that
Southeastern will be able to pay approximately $4 million towards to
balance owed.
Southeastern's current M&I balance owed is $6,182,811and expects to
have the M&I balance paid off in 2011. The Irrigation component's
remaining balance is $69,941,071 and is projected to be paid off well
before the deadline of 2032.
In addition, Southeastern has a current debt obligation of $842,000
to Reclamation for the Safety of Dams repairs performed in 1999-2001.
There is no interest obligation on this debt because the remaining
balance represents Irrigation's portion of the debt. The District is
currently making annual payments of $60,000 towards this obligation.
The funds for the repayment are generated by a surcharge on water sales
and storage contracts, which are sufficient to cover the annual
obligation.
Question 2b. If BOR is correct and the excess capacity contract
revenues are not sufficient to meet the repayment obligation, would the
water users make up the difference? Would you be agreeable to language
being inserted into the bill that would make clear that the project
participants are fully responsible for 35% of the construction costs in
the event that the excess capacity contract revenues are insufficient?
Answer. We would be agreeable to inclusion of language similar to
that in the Water Supply Act of 1958 (43 U.S.C. Sec. 390b) to the
effect that State or local interests be required to give reasonable
assurances that repayment of the project costs will be made within the
life of the project.
______
Responses of Dan Keppen to Questions From Senator Johnson
Your testimony recommends that S. 2842 take into account the
ongoing inspection and maintenance programs carried out by BOR and the
water users.
Question 1a. Could these programs provide the basis for a National
Priorities List of infrastructure needing urgent maintenance?
Answer. Yes, within the scope envisioned by S. 2842, which focuses
on those facilities maintained and operated by the Bureau of
Reclamation and its water customers. Outside of this scope, there are
also many other water delivery and flood control facilities owned,
operated and/or maintained by other federal agencies (e.g. U.S. Army
Corps of Engineers), state government (e.g. California Department of
Water Resources) and local entities (e.g. county flood control
districts).
Development of a National Priorities List for the facilities
considered by S. 2842 would best be accomplished in a collaborative
manner between the Bureau of Reclamation and its water customer
partners.
Question 1b. Do the water users prioritize maintenance actions
based on the risk posed to populated areas?
Answer. Depending on the characteristics of the area being served,
different water users will have different priorities. With that said,
it can safely be concluded that local maintenance actions are
prioritized according to the risk posed to populated areas, key
adjacent infrastructure, budget constraints, and contractual
requirements between local entities and the federal government.
Question 2. You mentioned that the Administration has held up
implementing the loan guarantee program authorized in the 2006 Rural
Water Supply Act, and that S.2842 should be amended to address this
situation.
Can you tell us what specific problem exists with the
Administration's implementation of the program, and how you think that
Congress can remedy the situation?
Answer. Implementation of the 2006 Rural Water Supply Act (P.L.
109-451) is now being held up because of incorrect interpretations of
clear Congressional direction by the Office of Management and Budget
(OMB). An April 3, 2008 memo prepared by OMB (attached)* concluded that
the Bureau can carry out the loan program only if it is willing to
siphon large amounts of funding away from other programs and needs
within its budget. We believe that OMB's conclusions are wrong and that
they are driven by a desire to prevent implementation of the program.
We have prepared a White Paper (also attached) that rebuts OMB's flawed
arguments and representations.
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* Document has been retained in subcommittee files.
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A key flaw is OMB's argument that the Government must carry 100% of
the total loan amount as contingent liability in the Federal budget.
The term ``subsidy'' (per the Federal Credit Reform Act of 1990) is
defined as the annual budget authority needed to cover the portion of
credit assistance estimated to be un-recovered because of defaults,
expressed as a percentage of the amount of each loan approved for
guarantee. OMB suggests in their memo that this ``subsidy'' should be
100% of the total loan amount that is guaranteed by the government.
This logic defies the entire financing system used daily by both
private and public sectors alike, as further detailed in the attached
White Paper. Using more appropriate logic, the government would only be
contingently liable for a fraction of the total guaranteed loan
amount--in most cases calculated to be 1%-3% of the total loan amount
guaranteed. In fact, the Congressional Budget Office assumed a loan
guarantee subsidy rate of 1%-2% when it provided Congress with a cost
estimate for the Rural Water Supply Act legislation (S. 895).
Congress can help remedy this situation through new legislative
language. Specifically, S. 2842 could be amended to include a new title
that would establish a loan guarantee finance demonstration program.
Such a program could identify specific demonstration projects, provide
timelines to develop memoranda of agreement between the Interior
Department and local project proponents, and provide authority for the
Secretary of the Interior to make available to lenders federal loan
guarantees for projects identified. This new title would also specify
that the ``subsidy'' shall be the greater of 2% or the subsidy
determined by the Secretary of Agriculture for covering the federal
cost of guaranteeing loans to lenders financing water projects under
existing and very successful U.S. Department of Agriculture Rural
Development authorities.
As stated in our testimony, we would be pleased to work with
Senator Reid to develop this language and revise S. 2842 to make it a
bill our members will embrace.
Attachment.--White Paper
RESPONSE TO OFFICE OF MANAGEMENT AND BUDGET MEMORANDUM ``LOAN
GUARANTEES TO IMPROVE FEDERALLY OWNED ASSETS''
FAMILY FARM ALLIANCE
May 2, 2008.
On April 3, 2008, Richard A. Mertens, Deputy Associate Director of
the Energy, Science, and Water Branch, Office of Management and Budget
(OMB), sent a memorandum to Timothy R. Petty, Deputy Assistant
Secretary, Water and Science, Department of the Interior. This memo
addresses the accounting treatment of certain loan guarantees that have
been contemplated by the Bureau of Reclamation (Bureau) to assist water
districts contracting for water from federally owned facilities in
meeting their fiscal responsibilities to pay their share of the
operation, maintenance, and rehabilitation of these facilities. This
paper highlights the errors and misinterpretations in the OMB memo in
mischaracterizing the loan guarantee program available to the Bureau
and clarifies the Congressional intent of the P.L. 109-451 in
authorizing such activities.
THE LOAN GUARANTEE FUNCTION ESTABLISHED UNDER TITLE II OF THE RURAL
WATER SUPPLY ACT OF 2006 (P.L. 109-451) WAS SPECIFICALLY INTENDED TO
FILL A CRITICAL GAP IN FEDERAL CAPABILITY
In general, the costs of operating, maintaining and repairing
Bureau of Reclamation water storage and conveyance projects are paid by
the beneficiaries of those facilities. Beneficiaries can be
individuals, but mostly they are irrigation and water districts
organized by landowners. The local districts receive water from Bureau
facilities under contracts that require them to pay that portion of the
facilities' operations and maintenance (O&M) costs attributable to its
water supply function.
In some cases, the Bureau has transferred to local water agencies
the responsibility for operating and maintaining federally owned
facilities, and the local agencies bill their landowners directly for
costs. In other cases, the Bureau performs the O&M of a project and
collects the costs from districts or individuals. When the Bureau
operates a project, it generally pays the federal share of O&M costs
with appropriated funds and receives the estimated non-federal share
from the local districts in advance for the year. At the end of the
year, the actual non-federal share of O&M costs is compared to the
estimated advances from the local districts and either a credit or an
invoice is provided for the difference.
Beyond the costs of day-to-day operations and normal maintenance,
beneficiaries also are responsible for the costs of ``extraordinary
maintenance''--major repairs and replacement of equipment. Frequently,
extraordinary maintenance and rehabilitation project costs range from
the millions to the tens of millions of dollars.
The Bureau of Reclamation estimates that the replacement value of
it dams, canals and power facilities west wide is $ 100 billion.
Protecting the value of this huge federal asset, assuring its safety
and operational integrity, is dependent on the ability of mostly small
local agencies to fund operation, maintenance and repair costs that
continue to increase sharply as the Reclamation system ages. According
to the Bureau, the system currently requires $3 billion in repairs and
extraordinary maintenance, the cost of which is the responsibility of
both the Federal government and the landowners and local water
districts dependent on these systems.
Because Federal Reclamation Law and policy requires that project
beneficiaries pay the costs of major rehabilitation and repair projects
in advance of expenditure, local agencies must turn to the private
market to secure financing, which can be difficult because they don't
own the asset they are borrowing money to repair.
In the past, the Bureau's Rehabilitation and Betterment (R&B)
Program helped local districts meet these financial obligations by
providing a means for spreading repayment of extraordinary maintenance
and repair costs over several years. However, the R&B Program and other
similar Bureau direct loan programs were abandoned by previous
administrations because they were regarded as inefficient.
In 2006, Congress recognized the need to help non-federal water
agencies raise non-federal dollars to pay for their share of the
rehabilitation and repair of aging federal water facilities. Title II
of the Rural Water Supply Act of 2006 authorized the Bureau of
Reclamation to provide federal loan guarantees to Reclamation project
beneficiaries to make it easier (and cheaper) for them to secure
financing in the private market.
Specifically, the Act provides the Secretary of the Interior the
authority to guarantee a private-sector or lender financed loan
(maximum 40-year term) for up to 90 percent of the cost of an eligible
project. The new Bureau program was modeled on a long-standing and
highly successful loan guarantee program in the U.S. Department of
Agriculture's Rural Utilities Service.
The intent of the Act was to avoid direct federal funding of the
Bureau's infrastructure repair and rehabilitation needs by making it
easier for project beneficiaries to fund them with private lender
financing. With a small commitment of appropriations, the program could
make large amounts of non-federal financing available to fund the non-
federal portion of extraordinary maintenance and repairs.
The Rural Water Supply Act and its loan guarantee program were
developed and enacted with the strong support of the Bureau of
Reclamation. The Act instructed the Bureau to develop eligibility
criteria to implement the program. However, sixteen months after
passage of the Act, the program is still not in place, mainly because
its implementation is being resisted by the Office of Management and
Budget.
OMB's April 3 memo does not explicitly instruct the Bureau not
carry out the loan guarantee program. Instead, the letter informs the
Bureau that OMB will apply a ``budgetary treatment'' to the program
that, for all practical purposes, makes its implementation impossible.
Specifically, OMB tells the Bureau that it can issue loan guarantees
for major improvements and repairs, but the guarantees must be backed
by an upfront appropriation equal to 100 percent, or more, of their
face value. In other words, the Bureau can carry out the program, but
only if it's willing to devote large portions of it's already strained
budget to do so.
OMB's assertion that the Federal cost of the Bureau loan guarantees
should be 100 percent of the guaranteed amount contrasts sharply with
the Congressional Budget Office estimate (attached) that program's
cost--subsidy rate--would be only 1 to 2 percent of the amount
guaranteed.
In its memo of April 3, OMB supports its argument for the 100
percent subsidy rate by misrepresenting the Bureau program as ``third-
party financing'' and by grossly exaggerating the financial risks to
the federal government while dismissing the ``economic stake'' that
farmers and their water agencies have in the Reclamation projects upon
which their livelihoods depend.
OMB MISINTERPRETS THE CBO ISSUE BRIEF ON THIRD PARTY FINANCING
In is April 3 memo to Reclamation, OMB asserts that the loan
guarantees established in the Rural Water Supply Act are ``third party
financing'' as defined by the Congressional Budget Office (CBO). The
OMB memo relies upon a CBO issue brief, Third-Party Financing of
Federal Projects (2005), which defines third-party financing as someone
other than the U.S. Treasury using private capital markets to raise
money on behalf of (emphasis added) a federal program to be repaid on
the basis of some kind of long-term federal commitment. The loan
guarantee program authorized by P.L. 109-451 provides for federal loan
guarantees to Reclamation's water contractors to help finance their
non-federal share of the costs of major repairs, replacements, and
project rehabilitation--not the government's share. The federal
government, while technically the holder of title to most of these
water projects has either operating or repayment contracts with the
local entities that have the responsibility under such contracts to pay
for their share of such maintenance and construction efforts. The OMB
position letter does not account for this contractual relationship,
leading to its erroneous accounting treatment and 100% budget scoring
conclusions.
The CBO issue brief further states that ``in the case of third-
party financing, the government typically couples a transfer of federal
property with directives on how the property may be developed.'' This
is not the case with P.L. 109-451 loan guarantees. There are no
transfers of federally owned property nor are there government
contributions or conveyances in exchange for future compensation in the
Bureau's case.
The CBO issue brief also states that the source of capital for
third-party financed projects is the income generated by their
operation, which is usually from federal spending. The CBO issue brief
goes on to state that ``for most of the third-party projects carried
out so far, credit assessments make it clear that the government is the
only or dominant user identified in the agreements--and hence, the only
or dominate source of capital.'' None of these conditions apply to the
Reclamation projects or activities contemplated under P.L. 109-451.
THE GOVERNMENT DOES NOT HAVE TO CARRY 100% OF TOTAL LOAN AMOUNT AS
CONTINGENT LIABILITY IN THE FEDERAL BUDGET
While the government contingent liability for these loans exists,
the question becomes what is the actual contingent liability the
government should carry in the budget. OMB suggests in their memo that
it should be 100% of the total loan amount that is guaranteed by the
government. This logic defies the entire financing system used daily by
both private and public sectors alike. The government's contingent
liability should be calculated as the percentage of possible guaranteed
loans that would be likely to default, taking into account the
following factors:
1. The amount of collateral pledged;
2. The repayment contracts for the cost of operation and
maintenance of federally-owned water supply infrastructure;
3. The leverage the Federal government holds in recovering
any possible default interest and principal, and;
4. The credit-worthiness of the non-federal entity obtaining
the loan.
Using this more appropriate logic, the government would only be
contingently liable for a fraction of the total guaranteed loan
amount--in most cases calculated to be 1%-3% of the total loan amount
guaranteed. In fact, the CBO scored S. 895 (now P.L. 109-451) loan
guarantees at 1% to 2% for future appropriation purposes.
omb grossly mischaracterizes the ``comparable economic stake'' of local
WATER DISTRICTS ATTEMPTING TO SECURE LOAN GUARANTEES
The OMB memo states that the government bears the full risk of a
loan guarantee because it owns the asset and benefits from the
improvements made to the asset. It goes on to state that the water
district (non-federal borrowing entity) relies solely on receipts
generated by that asset to repay the loan, and that the water district
lacks any ownership interest and does not have a ``comparable economic
stake'' in the overall success of the project, as do water districts
that own the assets. The water districts referred to in the OMB memo
are either an instrumentality of the states they are located in, or are
canal companies recognized as tax-exempt public-purpose organizations
that share the same status as the districts. These are ``public'' state
agencies with an enormous responsibility to operate, maintain, and
replace the infrastructure that delivers water to millions acres of
irrigated farms and ranches, thousands of cities, and generates
countless kilowatts of electrical power used by their communities.
While ownership of an asset is one means of measuring economic stake in
such projects, merely holding title does not represent the vast
economic and socially integrated public purposes these assets
represent.
The Federal government is not the primary beneficiary of these
projects. True, federal taxpayers have benefited for years from the
settling of the Western U.S., for the most part accomplished through
the initial construction of these projects. However, the true project
beneficiaries are the non-federal public entities (and the landowner
public who they serve) who have contracted with the government to repay
the cost of construction, and to pay for their portion of the
operation, maintenance, and replacement of these facilities. The
private investment (farm and ranch development, cities and suburbs,
electricity distribution facilities, etc.) that has been made over the
last century that is dependent on the successful annual operation of
these water projects is tremendous. One study several years ago
estimated the total domestic economic product developed annually from
federal irrigation projects is over $60 billion per year (1998
dollars). Without the water and power delivered from these facilities
every year to these countless beneficiaries, this vast economic engine
would crumble, land values would deteriorate and many communities would
cease to exist as the desert would again overtake these now-fertile
areas of the arid West.
What if these facilities cease to operate due to the inability of
these public non-federal agencies to obtain timely financing to cover
their share of such improvements? Then, the water rights issued by the
state that allow the facilities to operate would also cease, and the
federal ``asset'' would essentially be rendered worthless--probably
casting the facility into the ``liability'' column of the federal
balance sheet. The federal ``economic stake'' is dwarfed by the true
economic stake of the many project beneficiaries who repay or have
repaid the construction and operation costs of these facilities. This
fact, however, does not diminish in any way the many public benefits
derived from these facilities: the Federal government does have the
responsibility to pay the public's share of these major rehabilitation
costs. The flood control, fish and wildlife, and recreational benefits
derived from these federal water projects have been recognized by
Congress for years. On the other hand, the OMB memo diminishes the
economic stake of the non-federal project beneficiaries. This is a huge
error in logic when weighing the risk to the government from the
guaranteed loans proposed by the Rural Water Supply Act
federal loan guarantees are designed to function in precisely the
opposite direction that the office of management and budget suggests
The OMB memo suggests that federal loan guarantees in this instance
are equivalent to borrowing of private capital by a federal agency to
finance such improvements. It suggests that use of public funds derived
from the U.S. Treasury is less expensive for the taxpayer because the
rates on Treasury bonds are lower than rates from the private sector.
This position is likely supported by OMB's erroneous assumption that
assigns 100% risk to the federal agency guaranteeing a loan.
Federal Loan Guarantees are designed to function in precisely the
opposite direction. Federal Loan Guarantees bring private capital and
private sector risk to the equation---which actually decreases or
limits federal exposure. The risks to the federal government are
arguably and substantially less than 100%, due to the following
factors:
1. The non-federal borrower's dependence on the facility;
2. The ``creditworthiness'' analysis required by P.L. 109-
451;
3. The economic stake of the non-federal borrower and their
customers in a reliable facility (as previously outlined);
4. The contractual arrangement with the U.S. for water supply
at stake; and
5. Subsequent leverage to collect any possible defaults that
may arise.
The OMB analysis also ignored the fact that other authorities
allowing Reclamation to provide ``direct loans'' require that they be
``interest-free'' to the borrower.
THE FEDERAL TAXPAYER WOULD BENEFIT IMMENSELY UNDER A LOAN
GUARANTEE PROGRAM
Finally, federally authorized tax-free municipal bonds are
typically used to finance public infrastructure improvements. However,
given the current mortgage crisis, they are currently priced well above
Treasury rates. Credit instruments guaranteed by the full faith and
credit of the federal government, however, would price very close to
Treasury rates. In analyzing what the most cost-effective public
financing alternative to the ``taxpayer'', as OMB describes, the
federal taxpayer would benefit immensely under a loan guarantee
program, since federal tax dollars would be leveraged to obtain private
financing. Further, the interest would actually be paid for by the non-
federal borrower. With direct loans, given Reclamation's current
authorities, the taxpayer would pay the interest (the R&B Program loans
were ``interest-free'' to qualified borrowers).
Furthermore, the federal ``subsidy'' for guaranteed loans--if
accounted for properly--would be significantly lower than the subsidy
provided through tax-free municipal bond financing.
______
Responses of Robert W. Johnson to Questions From Senator Johnson
S. 2842
Question 1a. With respect to S. 2842, BOR appears to be taking the
position that its current inspection program and standards for
maintaining infrastructure are sufficient to protect the public.
However, in your testimony at the April 17th aging infrastructure
hearing, you stated that based on an in-depth inspection of the Truckee
Canal after it failed last December, BOR was limiting the use of the
Truckee Canal to only 45% of maximum flow until a permanent fix was
made to Canal. BOR appears to be implementing a new construction
standard for the Canal based on the post-failure inspection.
Doesn't Reclamation's response to the Truckee Canal failure reflect
the need for more in-depth inspections of major water delivery
facilities so that appropriate corrective actions can be implemented?
Answer. As a result of the Truckee Canal failure, Reclamation
believes increased attention to the review and inspection of canal
reaches located in urbanized areas is needed and has the following
activities underway:
Integration of special reviews and examinations under our
Review of Operation & Maintenance (RO&M) Program of these
urbanized canal reaches
Development and use of new review/maintenance criteria to
apply to the review of these canal reaches
Development and offering of canal operator training to
improve surveillance and inspection capability related to these
canal reaches as part of their duties
The extent and timing of the implementation of these activities
will be subject to budget priorities and the involvement of applicable
operating entities.
Question 1b. What are the risk factors that should be analyzed so
that an inspection and corrective action program can be properly
prioritized?
Answer. Some of the primary risk factors that Reclamation believes
should be analyzed and incorporated into any such prioritization
include:
Extent of estimated downstream population which
Extent of estimated property damage that could result
Consequences and cost of loss or interruption of service
Age and related state-of-the-art design and construction
practices
Operation and maintenance history and practices, including
prior facility incidents
Population density
Question 1c. Do you believe that your current inspection program,
coupled with input from the water user community (as suggested in the
Family Farm Alliance testimony), could be used to create the National
Priorities List called for in S. 2842?
Answer. Yes. Although the cited National Priorities List would be
an extremely challenging activity to undertake given the wide range of
facilities and risk factors involved, Reclamation believes that our
current Associated Facility Review of Operation and Maintenance
Program, in collaboration with operating entities, would be essential
to creating such a list. Since the reported version no longer features
this requirement, Reclamation no long has these concerns.
Question 2a. Assuming that BOR has an inspection program that
properly identifies the repairs that are needed on its canals, the key
for protecting the public is the successful implementation of the
necessary rehabilitation work. Your April 17th testimony estimated that
the necessary rehabilitation of transferred works could total at least
$800 million.
Is it Reclamation's expectation that the contractors who operate
transferred works will be able to pay for the estimated $800 million of
repair and rehabilitation work? If not, is it appropriate to create a
new program, or modify existing programs, to provide some financial
assistance to ensure the continued safe use of transferred works?
Answer. Existing law requires that repair and rehabilitation costs
be considered to be operation, maintenance, and replacement. In
accordance with Reclamation law and contracts with the operating
entities, the portion of these costs allocated to the reimbursable
project purposes are the responsibility of the project contractor(s).
To date, no attempt has been made by Reclamation to determine the
applicable project contractors' ability to pay for the estimated $800
million of repair and rehabilitation work.
Question 2b. Can you provide a rough cost estimate for the
permanent fix needed on the Truckee Canal? Is there a plan to pay for
such a permanent fix?
Answer. No formal cost estimates have yet been completed for
options associated with permanent repairs to the full length of the
Truckee Canal. Preliminary studies show that a permanent repair to the
portion of the canal alignment near the 2008 failure site could cost
$25 million or more. But before any definitive numbers can be used for
funding purposes, alternative evaluations need to be completed and cost
estimates refined. While the canal is operational again, there are no
evaluations completed at this time that determine payment options or
mechanisms for permanently repairing the Truckee Canal. In accordance
with Reclamation law, the operating entity would be required to pay its
allocated share of the cost in advance.
Question 3. During the hearing, you mentioned that there exists 108
reaches of Reclamation canals that go through urban areas.
Can you provide some more specific information concerning the
location and respective length of these reaches?
Answer. To clarify, over the past eight years, Reclamation has
begun inventorying its canals and canal reaches located in urbanized
areas. The preliminary estimate is that there are over 1,000 such canal
reaches. Following the Truckee Canal failure earlier this year,
Reclamation quickly reviewed this existing inventory in an attempt to
determine which of these canal reaches were of the most concern, based
on potential impacts in the event of their failure, as well as their
current condition. Our preliminary review indicates that 108 canal
reaches may need increased attention as part of Reclamation's ongoing
facility review process. That increased attention is already being
given through the conducting of special reviews on some of these canal
reaches. Due to recent changes in the extent of urbanization adjacent
to many of these canals, Reclamation is currently reviewing and
updating the inventory, with input from the responsible operating
entities.
S. 2974
Question 4a. With respect to S. 2974, it would be helpful to better
understand the current use of the revenues available from excess
capacity contracts.
Does existing law provide that these revenues be credited against
the repayment due for existing Fry-Ark Project features?
Answer. Yes, the Fryingpan-Arkansas Act of 1962 Section 2 (b) and
(c) provide for these revenues to be credited against repayment.
Question 4b. If so, isn't repayment for those features less than
100% by the original Project beneficiaries?
Answer. Section 1(c) of the Fry-Ark Act contemplates single purpose
works for Municipal and Industrial features to be 100% reimbursable and
to be paid within fifty years. This requirement is stipulated in
separate contracts. Other features of the project are multipurpose
features and the revenues from excess capacity contracts are applied as
a tail-end credit to the project.
Question 4c. What are the existing Fry-Ark Project features?
Answer. The existing Fry-Ark features include Ruedi Dam and
Reservoir, the north and south side collection systems that include 17
diversion structures and numerous related conduits, Boustead Tunnel,
Sugarloaf Dam and Turquoise Reservoir, the Mt. Elbert Conduit, the Mt.
Elbert Dam and Forebay, the Mt. Elbert pumped storage penstocks, the
Mt. Elbert Powerplant, Twin Lakes Dam and Reservoir, Pueblo Dam and
Reservoir, South Outlet Works and Manifold, and the Fountain Valley
Conduit.
Question 4d. What is their current outstanding repayment balance
and at what time are those existing features due to be fully repaid?
Answer. The reimbursable portion of the Fry-Ark Project to be paid
by Southeastern Colorado Water Conservancy District is approximately
$80 million, and is due to be repaid by 2032.
Ruedi Dam and Reservoir has approximately, $38 million in debt that
is due by 2019.
The Fountain Valley Conduit has a separate payout schedule, which
is the responsibility of the District. The current outstanding balance
to date is $66 million. The District receives revenues to repay this
obligation from the Fountain Valley Authority, and is scheduled to
payout by 2025.
Pueblo Reservoir's South Outlet Works construction costs are also
part of the District's original repayment obligation. The current
outstanding balance to date is $2.3 million and has a payout date of
2032. Currently certain municipal and industrial entities have
contracted for a portion of the costs of the South Outlet Works.
Question 4e. Is Reclamation currently negotiating additional excess
capacity contracts that may increase revenues above the current level
of $1 million per year identified in your testimony?
Answer. Different variables occur every year which changes the
number of contracts requested. The current level of $1 million a year
identified in our testimony is an average amount of annual revenue
based on the past several years. Because of the myriad variables in
water scheduling and planning, past year revenues are not necessarily
an accurate predictor of future year revenues.
We currently have two requests for long-term, `if-and-when' excess
capacity contracts, that have not been negotiated, which, if executed,
could increase revenues above the current $1 million level. One current
excess capacity contract we have entered is being challenged legally.
Question 4f. Do you disagree with the analysis by the Southeastern
Colorado Water Conservancy District indicating that excess capacity
contracts will yield in excess of $3.0 million/yr by 2020?
Answer. The District's projection of $3 million in annual revenues
from excess capacity contracts includes several assumptions that may
not be realized. Reclamation is discussing this with the District now.
Reclamation has only recently entered into two long-term excess
capacity contracts, and in no case in the history of the Fry-Ark
Project have temporary excess capacity contracts yielded this amount of
revenue. There are several uncertainties in trying to project revenues
from future `if-and-when' excess capacity contracts. As stated in our
testimony, while incentivizing local sponsors to manage their water
resources responsibly can be a positive, we are concerned that this
type financing may allow project beneficiaries to not have to repay
their pre-existing obligations, which, in turn, may necessitate even
more Federal funding being dedicated toward this project. The loss to
the Treasury under our current contracting policies would be about $1
million annually, but could increase as these contracts increased.
Question 5. Your testimony states that S. 2974 is inconsistent with
the original Fry-Ark authorization by proposing a 65% federal cost-
share for the Arkansas Valley Conduit.
Doesn't the Arkansas Valley Conduit fit the definition of a rural
water project under the 2006 Rural Water Supply Act, and if so, isn't
the 65% federal cost-share consistent with the cost-share proposed by
the Bush Administration for rural water projects?
Answer. The proposal in S. 2974 is inconsistent with both the
existing Fryingpan-Arkansas authorization, as well as the Rural Water
Program in Public Law 109-451. The existing Fryingpan-Arkansas
authorization calls for 100 percent repayment with interest of project
facilities by project beneficiaries. S. 2974 would also provide 100
percent repayment of the AVC, but only contemplates that interest will
be paid on 35% of the costs. The remaining 65% of the costs would be
repaid without interest. The cost of the Conduit would be funded by a
split of upfront costs and the remaining costs would require federal
government appropriations that would be repaid by miscellaneous
revenues from the Project. Also, the original Fry-Ark authorization
does not contemplate the construction of project features using
revenues from previously existing project contracts as described in S.
2974.
The Arkansas Valley Conduit project could be a candidate for
consideration under the Rural Water Program, once the Program is in
effect. However, there are some differences in the requirements of the
Act and what the District is proposing.
The Rural Water Act (Public Law 109-451) authorizes and
requires appraisal and feasibility studies which are then
prioritized and ranked against one another. The final
feasibility report includes a recommendation to the Secretary
on whether the rural water supply project should be authorized
for construction, and identifies the appropriate non-Federal
share of construction costs.
In contrast, the District's proposal is asking to modify the
existing authorization.
S. 3189
Question 6. Your testimony on S. 3189 recommends that Public Law
106-392, which first authorized the Upper Colorado and San Juan River
recovery programs, be amended to increase the non-Federal contribution
for capital projects. Currently, the required contribution is set at
$17 million.
What is the specific non-Federal contribution the Administration
recommends?
Answer. As a general policy the Administration recommends that the
non-Federal cost share for programs of this nature be at least 50
percent of the total costs associated with capital projects.
Question 7. P.L. 106-392 requires Interior to prepare a report by
the end of FY 2008 on the use of power revenues beyond 2011 for base
funding for the ESA programs. It's my understanding that completion of
that report is just about final.
Is release of that report imminent, and is S. 3189 consistent with
its recommendations?
Answer. The report is currently undergoing review within the
Administration.
Question 8. Your testimony states that the continuation of base
funding from power revenues is problematic because the funds ``are
drawn from revenues otherwise subject to repayment obligations''.
What do you mean by this statement? How are these revenues
otherwise subject to repayment obligations?
Answer. Under the provisions of Public Laws 106-392 and 109-183,
and as proposed in S. 3189, Colorado River Storage Project (CRSP)
hydropower revenues utilized for base funding are ``. . . treated as
non-reimbursable and as having been repaid and returned to the Treasury
as costs assigned to power for repayment under section 5 of the
Colorado River Storage Project Act.'' However, based upon the terms of
S. 3189, the repayment that would ordinarily be paid to the Treasury
would be credited from an accounting perspective, but would not
actually be repaid. The cost share established for power customers is
not a contribution of funds for projects and no non-Federal monies from
power customers are returned to the United States Treasury. The
Administration does not, as a general matter, endorse the
nonreimbursable treatment of such power revenues as a non-federal
contribution to cost-sharing for recovery programs.
Question 9. S. 3189 would continue the use of revenues from the
Upper Colorado River Basin Fund.
What is the current status of the Fund-e.g. what is it used for,
current revenue levels and balance, and will future revenues be
sufficient to continue addressing environmental needs (i.e. the ESA
recovery programs and the Glen Canyon Adaptive Management Program)?
Answer. The Colorado Basin Fund currently has a balance of
approximately $83 million (July, 2008). It is projected to have a
fiscal year end 2008 balance of around $80 million.
The Upper Colorado River Basin funds are used for the operation and
maintenance costs of all facilities of the Colorado River storage
project as provided in the CRSP Act. This includes operational costs,
along with maintenance and replacement of facility assets (OM&R). A
large portion of the OM&R costs relates to purchased power costs, which
is required to meet contractual obligations to deliver power. Purchased
power is especially crucial and expensive in times of drought. The
Basin Fund also provides funding for the costs of irrigation features
of CRSP. A portion of power revenues collected in the Basin Fund is
dedicated to repayment of the federal investment cost plus interest.
The Basin Fund is also used for: (1) cost sharing for the Colorado
River Basin Salinity Control Program (authorized by the Colorado River
Salinity Control Act P.L. 93-320 June 24, 1974 and P.L. 104-127, April
4, 1996); (2) the Glen Canyon Dam Adaptive Management Program
(authorized by the Grand Canyon Protection Act, Title XVIII of P.L.
102-575, October 30, 1992) which is approximately $9.5 million per
year; and (3) cost sharing for the endangered Fish Recovery
Implementation Program for the Upper Colorado and San Juan River Basin
(authorized by P.L. 106-392, October 30, 2000) which is approximately
$7 million annually. In addition, the Basin Fund is used for Colorado
River water quality studies authorized by P.L. 87-590, Fryingpan-
Arkansas Project Act, August 16, 1962 and consumptive use studies
authorized by P.L. 90-537, The Colorado River Basin Project Act,
September 30, 1968. Funding for the programs mentioned above are
authorized as non-reimbursable costs and will be treated as having been
repaid and returned to the general fund of the Treasury as costs
assigned to power for repayment under section 5 of the Act of April 11,
1956 (70 Stat. 170).
The annual projected revenues for FY2008 for the Basin Fund are
$208.6 million and expenses (Projected for 2008) for the Basin Fund are
$189.7 million.
If revenue, expenses and repayment amounts remain reasonably
consistent into the foreseeable future, future cash flows should be
sufficient to continue addressing non-reimbursable environmental costs
at or near current levels. However, if environmental costs were to
unexpectedly rise over planned cash flow amounts, there may not be
enough available cash to fund increased environmental costs and provide
adequate cash flow at the same time to meet basic Basin Fund
obligations.
Response of Robert W. Johnson to Question From Senator Salazar
In March 2008, Reclamation's witness testified before a House
subcommittee on a previous version of the Arkansas Valley Conduit bill,
H.R. 317, that the legislation was inconsistent with the 35 percent
local cost share set forth in the Administration's proposed rural water
legislation, implying that 35 percent local cost share is an
appropriate local cost share percentage.
Question 1. Why is this legislation, containing a 35 percent cost
share and authorizing the use of project-generated revenues to help pay
for the capital construction costs of that pipeline unacceptable, when
the Administration's proposed rural water legislation contains a 35
percent local cost share?
Answer. The Rural Water Act requires a capability to pay study, the
results of which are used to determine the appropriate non-Federal cost
share for projects. Under the Act, the amount of the local cost share
could be more than 35%. At this time we do not have enough information
to make a determination as to the appropriate local cost share for the
AVC if it were authorized under the Rural Water program, but it could
conceivably be greater than the 35% called for in S. 2974.
Appendix II
Additional Material Submitted for the Record
----------
Statement of the Central Arizona Water Conservation District, on S.
2842
The Central Arizona Project was authorized by Congress under the
1968 Colorado River Basin Projects Act. The Central Arizona Project or
``CAP'' was constructed by the U.S. Bureau of Reclamation and is
operated and maintained by the Central Arizona Water Conservation
District. Responsibility for the care, operation and maintenance of
CAP's water supply system was transferred to the Central Arizona Water
Conservation District or ``CAWCD'' in 1993. Therefore, under Section 2
of the proposed Act, CAP is a ``transferred project facility.''
In general, CAWCD agrees with the comments pertaining to S. 2842
submitted by Mr. Robert W. Johnson, Commissioner, U.S. Bureau of
Reclamation and Mr. Dan Keppen, Executive Director, Family Farm
Alliance. In addition to and in support of these comments, CAWCD also
submits the following regarding the provisions of S. 2842.
The concern that many Federal Reclamation projects, both
``reserved'' and ``transferred'' are aging and in need of
rehabilitation is very legitimate. With the dramatic increase
in urbanization in the west, many of these projects no longer
reside in isolated rural areas. Combine that fact with aging
equipment and infrastructure and a growing inability by many
smaller irrigation districts to keep pace with rising
maintenance costs, the situation has become increasingly
critical. Failures of canal systems and other associated
equipment now pose serious risks to many downstream
communities.
The concern that the U.S. Bureau of Reclamation lacks the
necessary resources to provide assistance to these irrigation
districts is also legitimate. While Reclamation has the
necessary authority to rehabilitate older projects and bring
equipment and other infrastructure to current standards, it
lacks the funds to do so. Reclamation's technical ability in
these areas may have also diminished.
In lieu of the proposed Act, it would be far more effective
and appropriate for the Congress to fund existing Reclamation
programs such as the Rehabilitation and Betterment Act and the
Small Reclamation Project Act. These existing programs were
authorized by the Congress and are no longer funded or used.
These programs, in combination with Reclamation's Review of
Operation and Maintenance Program, could provide the same
result as the proposed Act, if properly funded. CAWCD believes
that the Congress should provide both direction and funding to
Reclamation to make much needed investments in its operating
projects to bring them to current standards.
The proposed Act authorizes funding but funds would need
further appropriation. Reclamation has been unable to secure
any new funding for quite some time. Therefore, it would appear
the proposed Act creates another Reclamation program that it
will be unable to comply with or utilize to benefit its
operating partners. As stated above, CAWCD believes the
Congress should seriously consider funding existing Reclamation
programs and provide appropriate direction to Reclamation as to
their use.
As to the specific provisions of the proposed Act, CAWCD submits
the following additional comments.
As written, the proposed Act is both redundant and
unnecessary. Regarding Reclamation inspections of Federal
projects provided for in Section 3, Reclamation's contracts
with its operating partners and its existing Review of
Operation and Maintenance Program already provide for regular
periodic inspections of Reclamation project facilities, both
``reserved'' and ``transferred.''
Existing Reclamation contracts and other agreements also
contain provisions regarding reimbursement of Federal costs
related to such inspections. The provisions of Reclamation's
contracts vary widely. Some require reimbursement to
Reclamation and some don't. CAWCD's contracts with Reclamation
require CAWCD to pay Reclamation's costs for oversight and
inspection; the proposed Act would appear to waive some of
these costs.
The proposed Act would appear to apply the same criteria to
all projects. In the case of CAP, CAWCD is fully capable, both
financially and technically, of properly and effectively
operating and maintaining project infrastructure and does not
need or necessarily want additional Reclamation intervention.
However, there are many older Reclamation projects operated and
maintained by smaller organizations that lack the necessary
resources. Many of these projects could benefit greatly from
Reclamation assistance.
The proposed Act imposes requirements and mandates on
Reclamation that it probably cannot meet. For instance, it is
unlikely that Reclamation would be able to develop standards
and guidelines within 180 days.
The proposed Act may provide Federal funds for 65 percent of
modification costs; however, it will only do so for facilities
that are in compliance with regulations proposed in Section 4.
It is not known what these regulations will require and it may
mean that many facilities, including CAP, may be non-compliant.
CAWCD appreciates the committee's interest in these issues. We also
appreciate the opportunity to provide comments regarding S.2842. Our
comments are intended to be constructive and we hope the committee will
find them useful.
______
Denver Water,
Denver, CO, July 8, 2008.
Hon. Tim Johnson, Chairman,
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Subject: Support for S.3189
Dear Chairman Johnson and Senator Corker, I am writing to support
S.3189, a bill to amend Public Law 106-392. Passage of this bill will
ensure the adequacy of funds to complete the important missions of both
the Upper Colorado River Endangered Fish Recovery Program and the San
Juan River Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs
continue to benefit many water users. The status of endangered fish
continues to improve under these programs. In the two basins, more than
1,600 water projects are provided with ESA compliance in accordance
with these two programs. No lawsuits have been filed in ESA compliance
under these programs. The programs have long enjoyed bi-partisan
support in Congress.
We request that the Subcommittee support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
Sincerely,
HJ Barry,
Manager.
______
Grand Valley Water Users Association,
Grand Valley Project, Colorado,
Grand Junction, CO, July 7, 2008.
Hon. Tim Johnson,
Chairman,
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Subject: Support for S.3189
Dear Chairman Johnson and Senator Corker, I am writing to support
S.3189, a bill to amend Public Law 106-392. Passage of this bill will
ensure the adequacy of funds to complete the important missions of both
the Upper Colorado River Endangered Fish Recovery Program and the San
Juan River Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The programs have long enjoyed bi-
partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
Sincerely,
Richard L. Proctor,
Manager.
______
The Southwestern Water Conservation District
Durango, CO, July 1, 2008.
Hon. Tim Johnson,
Chairman,
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Subject: Support for S.3189
Dear Chairman Johnson and Senator Corker, The Southwestern Water
Conservation District (SWCD) was established by the Colorado
legislature to conserve and protect the waters of the San Juan and
Dolores Rivers and their tributaries. The San Juan River Basin Recovery
Implementation Program (SJRBRIP) is an invaluable and successful
program in our District.
With the SJRBRIP and the Upper Colorado River Endangered Fish
Recovery Program, the status of endangered fish is improving. The two
programs have the dual goals of achieving recovery of endangered fish
species and ensuring ESA compliance for water project depletions. In
the two basins, more than 1,600 water projects are provided with ESA
compliance in accordance with these two programs. The programs have
long enjoyed bi-partisan support in Congress.
S.3189 assures authority for capital funding to both programs to
provide for major rehabilitation and repair of more than $100 million
in facilities constructed by the two programs, assures protection of
critical habitat in the San Juan River, and extends current funding
levels for annual operation and maintenance provided by RSP power
revenues.
I am writing to ask that you and the Sub-Committee support the
amendments (S.3189) to Public Law 106-392. Passage of this bill will
ensure that adequate funds are available to complete the important
missions of both the Upper Colorado and San Juan Basin programs.
Respectfully submitted,
John Porter,
President.
Bruce T. Whitehead,
Executive Director.
______
Statement of Harris Sherman, Executive Director, Department of Natural
Resources, State of Colorado, Denver, CO, on S. 2974
In 2007 the Colorado General Assembly authorized the Colorado Water
Conservation Board to loan nearly $61 million to the Southeastern Water
Conservancy District to allow the District to share the cost of
constructing the Arkansas Valley Conduit. To comply with the terms of
its loan, the District must secure the passage of the federal
authorizing legislation because the project was originally a component
of the Frying-Pan Arkansas Project. If federal authorizing legislation
is not passed, the state loan authorization will expire.
The passage of S. 2974 provides the most immediate opportunity to
allow the District to comply with the terms of its loan and allow it to
build a project to provide reliable water to rural communities south of
Pueblo, Colorado to Lamar. These communities have faced significant
challenges to meet water quality standards and some are under
compliance orders from our Colorado Department of Public Health and
Environment. On their own, each provider does not have the economic
means to address these issues.
A regional approach like the Arkansas Valley Conduit offers the
most efficient and effective way to provide clean water to this corner
of Colorado and it is why the CWCB is proving a significant source of
the funds to build the project.
______
Southeastern Colorado Water Conservancy District
arkansas valley conduit
participants
June 1, 2008
State of Colorado,
Department of Natural Resources,
Denver, CO, July 2, 2008.
Hon. Tim Johnson,
Chairman,
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Subject: Support for 5.3189
Dear Chairman Johnson and Senator Corker, I am writing to support
S.3189, a bill to amend Public Law 106-392, entitled ``the Endangered
Fish Recovery Program Improvement Act of 2008.'' Passage of this
legislation is imperative to assure that the Upper Colorado River
Endangered Fish Recovery Program and the San Juan River Basin Recovery
Implementation Program (collectively ``programs'') continue to be able
to meet the goals for which these programs were established.
S.3189 assures that: 1) the programs will have the authority
necessary for capital funding, as needed, to provide for
rehabilitations and repairs of the facilities constructed by the
programs; 2) the protection of critical habitat in the San Juan River
basin extends current funding levels for annual operation and
maintenance provided by CRSP power revenues; 3) the Colorado Water
Conservation Board (``CWCB'') can provide loans to the programs, if
necessary, to overcome temporary shortfalls in funding; 4) and these
programs can continue to have authorization until 2023.
The CWCB is an agency within the Department of Natural Resources
and it was established in 1937 to preserve and develop Colorado's water
resources for existing and future generations. The provisions related
to loans from the CWCB will allow the programs to be more nimble while
achieving the goals of the programs.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin and providing
ESA compliance for water project depletions in the Upper Basin
consistent with interstate compacts and state water law. These
successful programs are model programs and their success has been
applied in other basins including the recently federally authorized
Platte River Recovery Implementation Program. In the two basins, more
than 1,600 water projects are provided with ESA compliance in
accordance with the programs.
No lawsuits have been filed in ESA compliance under these programs
and these programs have long enjoyed bi-partisan support in Congress.
On behalf of the State of Colorado, I request the Subcommittee to
support the amendments to the authorizing legislation for the Upper
Basin and San Juan Recovery programs in S.3189.
Sincerely,
Harris Sherman.
______
City of Aurora,
Water Department Administration,
Aurora, CO, June 27, 2008.
Hon. Tim Johnson,
Chairman.
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Subject: Support for S.3189
Dear Chairman Johnson and Senator Corker, I am writing to support
S.3189, a bill to amend Public Law 106-392. Passage of this bill will
ensure the adequacy of funds to complete the important missions of both
the Upper Colorado River Endangered Fish Recovery Program and the San
Juan River Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The programs have long enjoyed bi-
partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
Sincerely,
Dana Ehlen,
Interim Director.
______
City of Aurora,
Water Department,
Water Resources,
Aurora, CO, July 3, 2008.
U.S. Senate, Committee on Energy and Natural Resources, 304 Dirksen
Senate Building, Washington, DC.
Re: 5.2974 Arkansas Valley Conduit
To the Chairman and Members of the Committee on Energy and Natural
Resources: The City of Aurora supports S. 2974 and the development of
the Arkansas Valley conduit (AVC) to ensure that the citizens of the
lower Arkansas River Valley within Colorado have a secure, safe and
affordable drinking water supply. The AVC has long been contemplated,
with funding being the primary obstacle.
On March 13, 2008, the Southeastern Colorado Water Conservancy
District offered testimony at the House of Representative Subcommittee
on Power and Water hearing regarding H.R. 317. The testimony outlined
an alternative funding mechanism for the AVC construction which would
ensure that the entire estimated project costs of $300 million would be
paid over a 50 year period using revenues from Fryingpan-Arkansas
Project excess capacity contracts. We believe this same funding
mechanism is contemplated under S.2974. This mechanism is an innovative
and sensible repayment plan, but the funding depends for its success
upon revenues realized from the execution of long-term ``if and when''
excess capacity storage and exchange contracts, such as the one
recently executed between the Bureau of Reclamation and the City of
Aurora. Such contracts maximize the use of existing infrastructure
while minimizing environmental impacts.
The Bureau of Reclamation's authority to contract with Aurora has
been questioned several times and is currently being litigated by the
Lower Arkansas Valley Water Conservancy District. Aurora's payment for
use of excess capacity storage and exchange is estimated to be $40
million over the next 40 years and 580 million over the next 65 years.
Aurora's contracts thus account for over a quarter of the estimated
total revenues from excess capacity contracts. Hence, it is appropriate
to ensure that any existing controversies over the validity of such
contracts also be resolved. This will promote a mutually beneficial
arrangement which brings clean water to a deserving population.
Thank you for your consideration of these comments.
Sincerely,
Mark Pifher,
Deputy Director.
______
Central Utah Water Conservancy District,
Orem, UT, June 30, 2008.
Hon. Tim Johnson,
Chairman,
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Subject: Support for S.3189
Dear Chairman Johnson and Senator Corker, I am writing to support
S.3189, a bill to amend Public Law 106-392. Passage of this bill will
ensure the adequacy of funds to complete the important missions of both
the Upper Colorado River Endangered Fish Recovery Program and the San
Juan River Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The programs have long enjoyed bi-
partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
Sincerely,
Don A. Christiansen,
General Manager.
______
Statement of Douglas Kemper, Executive Director, Colorado Water
Congress, Denver, CO, on S. 3189
I am writing to support S.3189, a bill to amend Public Law 106-392.
Passage of this bill will ensure the adequacy of funds to complete the
important missions of both the Upper Colorado River Endangered Fish
Recovery Program and the San Juan River Basin Recovery Implementation
Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The programs have long enjoyed bi-
partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
______
Statement of Kevin Walsh, General Manager, Goleta Water District,
Goleta, CA, on H.R. 3323
On behalf of the Board of Directors and customers of the Goleta
Water District, I am pleased to submit this testimony in support of
H.R. 3323, legislation to authorize the Secretary of the Interior to
convey a water distribution system to the Goleta Water District. This
legislation passed the House of Representatives on May 21, 2008.
We strongly support this legislation and thank the committee for
considering it today.
GOLETA WATER DISTRICT
The Goleta Water District is located in Santa Barbara County,
California. The District serves irrigation water to about 8,000 acres
of farmland, and municipal water to about 80,000 people. Most of that
water, about two-thirds, comes from the federal Cachuma Project.
In 1956, the US Bureau of Reclamation completed the congressionally
authorized Cachuma Project, a dam and reservoir storage project in
Santa Barbara County. The project serves the City of Santa Barbara and
four water Districts, including the Goleta Water District, with
irrigation and municipal water. The costs for this project are being
repaid to the federal government.
While the dam and reservoir were under construction, the Bureau
also gave loans for construction of water distribution systems. Goleta
Water District revived one of those loans to construct a water pipeline
distribution system and obtain rights-of-way for the pipelines. This
forty year loan was completely repaid to the federal government, in
full, in 2002. Since the completion of construction of the
distributions system, and in accordance with the terms of the loan, the
Goleta Water District has assumed complete responsibility for the water
distribution system and the easements, including paying all operation
and maintenance costs, in addition to repaying the loan in full.
Since the loan is paid off, the District would now like to obtain
title of the facilities for which it paid. It is not unlike paying off
a mortgage, only in this case federal law provides that an act of
Congress is necessary to convey ownership and make the title transfer.
H.R. 3323, THE GOLETA WATER DISTRIBUTION SYSTEM CONVEYANCE ACT OF 2007
H.R. 3323 would authorize the Secretary of Interior to convey title
of the federally owned water distribution system, along with its 1,113
associated easements, to the Goleta Water District.
TITLE TRANSFER PROCESS
It has been a continuing desire of the District to obtain title to
the Distribution System plus its associated easements outlined in the
legislation, which have been owned by the United States for many years.
Since 2004 when the District sent a Letter of Intent to Transfer Title,
the Bureau and the District have worked cooperatively and successfully
to address all of the elements necessary to bring this legislation
forward, including repayment of the Bureau of Reclamation loan, public
meetings, and the completion of an Environmental Assessment Report
resulting in a Finding of No Significant Impact.
Most recently we have worked with Congresswoman Capps to introduce
the legislation to achieve title transfer.
BENEFITS OF THIS TITLE TRANSFER
The title transfer will give the District more local control of the
Distribution System which was constructed for our use. There will be
one less administrative layer caused by United States ownership when
changes or improvements to the facilities are needed. Private citizens
whose property is encumbered with the easements will no longer have to
deal with the federal government, but only their local water District
when making use changes to their properties. The Bureau of Reclamation
will no longer need to complete periodic reviews of these transferred
facilities. As a result, they will hopefully be able to direct
personnel and resources to more important activities. Also, the Bureau
of Reclamation will divest itself of liability for the distribution
system.
CONCLUSION
In conclusion, I would like to thank some of the people who have
made this transfer possible. I would like to thank Bureau of
Reclamation staff Sheryl Carter of the South Central California Area
Office in Fresno and James Hess here in Washington who have helped us
in preparing for the title transfer.
We'd like to acknowledge our debt of gratitude to Congresswoman
Lois Capps for her support and assistance with this legislation.
In summary, H.R. 3323 is a good bill, a good title transfer and
shows a cooperative process of benefit to both Reclamation and the
District. I urge the Committee to move this legislation forward.
______
The State of Wyoming,
Office of the Governor,
Cheyenne, WY, July 10, 2008.
Hon. Tim Johnson,
Chairman,
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Committee on Energy
and Natural Resources, U.S. Senate, 304 Dirksen Senate
Building, Washington, DC.
Subject: Submittal of Testimony Supporting the Enactment of S.3189
Dear Chairman Johnson and Senator Corker: I am writing to express
my strong support. on behalf of the State of Wyoming, for enactment
into law of S. 3189, the Endangered Fish Recovery Programs Improvement
Act of 2008. Passage of this bill will ensure authority for capital
funding for the Upper Colorado River Endangered Fish Recovery Program
and the San Juan River Basin Recovery Implementation Program, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities previously constructed by the two programs.
This bill proposes to add $15 Million to the authorization for
capital expenditures for the Upper Colorado River Basin Program, adds
$12 Million to the authorization for the San Juan River Basin Recovery
Implementation Program's capital expenditures, extends the period of
capital construction to 2028 and amends the current authorization to
allow continued annual funding at current levels from power revenues.
The proposed 2008 amendments address current and foreseeable capital
construction needs for the two programs not presently authorized.
Current authority for construction has been largely expended and ceases
after FY 2010.
The additional authority provided by enactment of this measure will
allow Reclamation to repair and rehabilitate, as needed, approximately
$100 million in capital facilities (fish passages, fish screens,
flooded bottomlands habitat and hatcheries, and a reservoir)
constructed by the recovery programs. In addition, these facilities,
located on or adjacent to major rivers in the Upper Colorado River
basin, are subject to damage from flooding and debris. Additional
authority is also needed to complete the Tusher Wash fish screen on the
Green River and additional time is needed to complete construction
projects in the San Juan basin. In addition to these needs, unstable
rock formations adjacent to designated critical habitat for the
endangered fish caused two major landslides near Farmington, New
Mexico. The U.S. Fish and Wildlife Service determined that the unstable
cliffs are a threat to critical habitat in the San Juan River.
Authority is needed to eliminate this threat.
The goal of these two successful programs is to recover the four
Colorado River endangered fish species in a manner that is consistent
with state and tribal laws, interstate compacts, the Endangered Species
Act, other federal laws, and Indian trust responsibilities.
We are most appreciative of the Senate Committee on Energy and
Natural Resource's past support of legislation and necessary amendments
authorizing the capital construction activities of the two recovery
programs. This legislative measure will further the abilities of the
two recovery programs to accomplish their important objectives.
I have included with this letter testimony that I am submitting in
support of this important legislation. Thank you for your consideration
of my testimony and for its inclusion in the hearing record.
Best regards,
Dave Freudenthal,
Governor.
______
Statement of the Honorable Dave Freudenthal, Governor, State of
Wyoming, on S. 3189
Mr. Chairman and Members of the Water and Power Subcommittee of the
United States Senate Committee on Energy and Natural Resources, I am
pleased to submit this statement urging your Committee to favorably
consider, and report without amendments, S. 3189. This bill is
essential to the successful continuation of the Upper Colorado River
and San Juan River Basin Recovery Implementation Programs, as
authorized by Public Law 106-392 (and subsequently amended by Public
Law 107-395 and 109-183). Enactment of this legislation is critical to
the recovery of the Colorado River Basin endangered fish species and
hence is important to the interests of the State of Wyoming. Since
their initiation in 1988 and 1992, respectively, the highly successful
Upper Colorado and San Juan recovery programs have provided a
cooperative, workable and effective mechanism for continued compliance
with the Federal Endangered Species Act for more than 1,600 federal and
non-federal water projects in the Upper Colorado River basin and the
San Juan River basin, including projects that provide water to meet
tribal needs and that fulfill the federal government's trust
responsibility to tribes in compliance with the Endangered Species Act.
Accordingly, continuation of the implementation of these recovery
programs, including the requested authority to rehabilitate, repair or
replace the programs' capital construction projects now in place and
which are directly benefiting the endangered fish species is imperative
to our States' ability to continue to develop our compact-apportioned
water resources.
The two programs have constructed approximately $100 million in
facilities (fish passages, fish screens, flooded bottomlands habitat,
hatcheries, and a reservoir that augments flows for endangered fish).
The operation of these facilities is a critical component of the
recovery programs are providing the reasonable and prudent alternative
These facilities are on, or adjacent to, major rivers in the Upper
Colorado and San Juan River basins. Many of the facilities are
susceptible to damage by floods and debris associated with the major
rivers on which they are located (Green, Colorado, Gunnison, and San
Juan).With the passage of time these complex facilities will require
some degree of rehabilitation or repair. Further, additional authority
is needed to complete the Tusher Wash fish screen on the Green River,
and additional time is needed to complete capital projects in the San
Juan basin.
Authorization for the Secretary of the Interior to conduct these
recovery programs' capital construction expires on September 30, 2010.
Accordingly, there is no authority for Reclamation to repair or
rehabilitate these facilities after that date or to complete the Tusher
Wash fish screen and San Juan basin projects. Existing funding
authority will have been expended. The proposed amendments would
provide an additional $20 million in authorization repairs and
rehabilitation of these facilities through 2023. Importantly,
appropriations for repair and rehabilitation will only be requested as
needed.
One such unanticipated need for capital expenditures occurred in
2007. Unstable rock formations adjacent to designated critical habitat
for the endangered razorback sucker and Colorado pikeminnow in the San
Juan River caused a major landslide near Farmington, New Mexico. A
second slide occurred in August, 2007 in the same area. The U.S. Fish
and Wildlife Service determined that the unstable cliffs are a threat
to critical habitat in the San Juan River. The estimated cost of
stabilizing the rock formation is $7 million. Presently. authority for
this type of activity was not provided within P.L. 106-391 as amended.
The proposed amendments would add authorized funding to protect
critical habitat.
Specifically, enactment into law of the proposed 2008 amendments
will accomplish the following:
Authorize an additional $12 million in federal expenditures
for capital projects under the San Juan Program for the
purposes of a) protecting critical habitat of endangered fish
species and related infrastructure trout rock slides in the
area west of Farmington ($7 million), and b) repair and
replacement of constructed capital facilities (fish passages,
fish screens, habitat, hatcheries) as needed through 2023 ($5
million).
Authorize an additional $15 million in federal expenditures
for capital projects for the Upper Colorado Program for the
purposes of a) constructing a fish screen on Tusher Wash in
critical habitat on the Green River, Utah in light of
significantly increased construction material costs, and b) for
repairs and replacement of constructed capital facilities (fish
screens, fish passages, habitat, hatcheries) as needed through
2023.
Recognize additional non-federal cost sharing of $56
million.
Amend the current authorization to allow continued funding
for annual operation and maintenance funding at current levels
provided by CRSP power revenues. This authority will expire at
the end of fiscal year 2011 under the existing law.
The recovery programs are serving as national models for how
willing partners can use effective, collaborative partnerships to meet
important needs. Application of the ESA in Wyoming's portion of the
Upper Colorado River Basin has not impeded our ability to develop our
water resources since the Upper Colorado Recovery Progam's initiation
in 1988. This is, in my view, a critical and key measure of the
Program's success in meeting its commitment to allowing needed water
development to proceed in compliance with the ESA. Further, these
programs are making substantial progress towards recovery of the four
endangered fish species.
These two recovery programs' dual objectives of recovery while
accommodating additional water resources development in the Basin
represent the best approach yet devised to resolving the conflict
between the federal Endangered Species Act (ESA) and water development
needs. No lawsuits have been filed concerning the ESA compliance
provided by these programs. State and federal agencies, Indian tribes
and private organizations are cooperating through these two recovery
programs to achieve recovery of endangered fish while meeting
continuing demands for water in the arid West.
Thank you for the opportunity to submit this testimony. I request,
in addition to your consideration of its contents, that this testimony
he included in the formal hearing record concerning this important
legislation needed for the Upper Colorado River Endangered Fish
Recovery Program and San Juan River Basin Endangered Fish Recovery
Implementation Program.
______
State of New Mexico,
Office of the Governor,
Santa Fe, NM, July 8, 2008.
Hon. Tim Johnson,
Chairman,
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Subject: Support for S.3189
Dear Chairman Johnson and Senator Corker: I am writing to support
S.3189, a bill to amend Public Law 106-392. Passage of this bill will
ensure the adequacy of funds to complete the important missions of both
the Upper Colorado River Endangered Fish Recovery Program and the San
Juan River Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving and this progress
critically needs to be sustained. In the two basins, more than 1,600
water projects are provided with ESA compliance in accordance with
these two programs. No lawsuits have been filed in ESA compliance under
these programs. The programs have long enjoyed bi-partisan support in
Congress.
I request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189. On behalf of the citizens of New Mexico, I
sincerely thank the Subcommittee for your assistance to ensure adequate
funding authorization and extension of the authorized period for
capital construction for these critically important recovery programs.
Sincerely,
Bill Richardson,
Governor.
______
Statement of Brad Luckey, Manager, General Services-Government
Relations, Imperial Irrigation District, Imperial, CA, on S. 2842
I am writing on behalf of the Imperial Irrigation District (IID) in
Southern California. The purpose of my letter is to address S. 2842,
the Aging Water Infrastructure and Maintenance Act.''
As you may be aware, IID is one of the largest irrigation districts
in the United States. In terms of volume of water delivered, IID is the
largest irrigation district in the United States, serving about 500,000
acres of land in the southeastern portion of California. IID's growers
grow a large variety of crops year-round, and in the winter months IID
is one of the main suppliers of vegetables for the entire nation.
I am writing to you about S. 2842 because IID operates and
maintains, under a contract with the Secretary of the Interior, a very
large canal system known as the All American Canal (AAC). The AAC
carries water from the Colorado River near Yuma, Arizona over to the
Imperial Valley--a distance of about 50-60 miles. A portion of the AAC
goes through urbanized areas in the vicinity of the City of Calexico,
California. IID therefore has an interest in S. 2842 and the wording of
this important legislation.
I first want to thank you for your work, along with Senator Reid
and others, to give attention to aging infrastructure related to the
function of the U.S. Bureau of Reclamation. The AAC was built in the
1930's and therefore IID is keenly aware of the need to appropriately
maintain this kind of system, both for its longterm usefulness and to
ensure the safety of people that may live in the vicinity of the canal.
In order to keep this letter brief, I want to say that IID supports
the content of the Testimony offered to your Subcommittee by the Family
Farm Alliance on July 8, 2008. IID believes that the helpful comments
and suggestions offered by the Family Farm Alliance are in line with
HD's views regarding this legislation. It is also our understanding
that this week the Family Farm Alliance will be submitting revised
legislation for review by the Subcommittee. IID has had an opportunity
to provide comments to the Family Farm Alliance on the proposed revised
legislation, and therefore I want to express support for the revised
version that will be submitted to your Subcommittee.
While IID appreciates the overall intent behind S. 2842, I do want
to emphasize two important points. First, that this legislation should
be narrowed to focus only on areas where Bureau of Reclamation
facilities are in urbanized areas. This should be the narrow area of
concern for this legislation, as opposed to the wide scope of
Reclamation facilities that are spread throughout the West. And second,
we think it is important to emphasize that respect should be given to
the fact that in many circumstances, like that faced by IID, the
operation and maintenance of facilities such as the AAC have been in
the hands of irrigation districts like IID for many years.
IID operates and maintains the AAC and the Imperial Diversion Dam
and Desilting Works located on the Colorado River between Arizona and
California. Accordingly, decisions on a day-to-day and annual basis as
to operation, maintenance and repair are made by IID and are paid for
by IID. We therefore suggest that while Reclamation certainly has a
role in this process, as the link between the district and the owner of
the facilities--the United States government--it is nevertheless very
important to recognize that IID is really ``in the drivers seat'' when
it comes to routine decisions regarding the maintenance of the AAC. As
we see it, the legislation should be crafted to reflect this important
role the district plays in this process.
In closing, let me offer our cooperation in working with your
Subcommittee to craft an infrastructure maintenance bill that is
workable for the government and for entities like IID.
______
Statement of Levi Pesata, President, Jicarilla Apache Nation, Dulce,
NM, on S. 3189
On behalf of the Jicarilla Apache Nation, I am writing to support
S.3189, a bill to amend Public Law 106-392. Passage of this bill will
ensure the adequacy of funds to complete the important missions of both
the Upper Colorado River Endangered Fish Recovery Program and the San
Juan River Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and federal, state and Tribal water laws. These
successful programs are working. The status of endangered fish is
improving. In the two basins, more than 1,600 water projects are
provided with ESA compliance in accordance with these two programs. No
lawsuits have been filed in ESA compliance under these programs. The
programs have long enjoyed bipartisan support in Congress.
The Nation requests the Subcommittee to support the amendments to
the authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189. Thank you for your support.
______
The Nature Conservancy,
Western Resource Advocates,
July 7, 2008.
Hon. Tim Johnson,
Chairman
Hon. Bob Corker,
Ranking Member, Subcommittee on Water and Power, Senate Energy and
Natural Resources Committee, 304 Dirksen Senate Office
Building, Washington, DC.
Subject: Support for S. 3189
Dear Chairman Johnson and Senator Corker, As conservation
representatives to the Upper Colorado River Endangered Fish Recovery
Program and San Juan River Basin Recovery Implementation Program, we
are writing to support S.3189, a bill to amend Public Law 106-392.
Passage of this bill will ensure funding to complete the important
missions of these two widely-hailed recovery programs. We support
passage of the bill as long as it is modified in a small but important
respect, noted below.
Most important to the conservation community, S. 3189 extends
current funding levels for non-reimbursable annual operation and
maintenance costs using power revenues from the Colorado River Storage
Project. Annual base funding for recovery activities, like population
monitoring, non-native fish control, and adaptive management of
recovery strategies, is absolutely essential to the success of these
Programs, especially as we transition from a capital construction phase
to an active management phase in the recovery process.
In addition, S.3189 assures authority for capital funding to both
programs, as needed, to provide for major rehabilitation and repair of
more than $100 million in facilities constructed by the two programs.
Our full support of the bill is contingent one minor technical
correction to Section 2(a)2 of the legislation, to remove the phrase
``through stabilization of adjacent stream banks and adjacent impacted
infrastructure'' from the definition of `facilities.' We believe the
narrower definition of facilities to protect critical habitat is
adequate to allow the stabilization of the rock slide on the San Juan
River,\1\ without opening the Program to a wide-range of questionable
or unrelated claims for repair of private infrastructure.
---------------------------------------------------------------------------
\1\ According to the USFWS, this repair will prevent future rock
slides and will eliminate the regular need for heavy equipment in
critical habitat, thus directly benefitting the species recovery effort
in the San Juan. In addition, the San Juan Recovery Implementation
Program agreed with the USFWS assessment and supports the effort to
stabilize the rock slide.
---------------------------------------------------------------------------
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin and providing
ESA compliance for water project depletions in the Upper Basin
consistent with interstate compacts and state water law. These
successful programs are working and have long enjoyed bi-partisan
support in Congress.
We urge the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs by favorably reporting S.3189. Thank you for your efforts on
behalf of these important and successful programs.
Sincerely,
Bart Miller and Dan Luecke,
Western Resource Advocates and Upper Colorado Recovery
Implementation Program.
Tom Iseman and Robert Wigington,
The Nature Conservancy and Upper Colorado Recovery Implementation
Program.
Adrian Oglesby,
The Nature Conservancy and San Juan Recovery Implementation
Program.
______
Statement of Joe Shirley, Jr., President, The Navajo Nation, Window
Rock, AZ, on S. 3189
I am writing to express the Navajo Nation's support for 5.3189, a
bill to amend Public Law 106392. Passage of this bill will ensure the
adequacy of funds to complete the important missions of both the Upper
Colorado River Endangered Fish Recovery Program and the San Juan River
Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The Navajo Nation has been an active
participant in the San Juan program, and these programs have long
enjoyed bi-partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
______
Statement of Eric W. Wilkinson, General Manager, Northern Colorado
Water Conservancy District, Berthoud, CO, on S. 3189
On behalf of the Board of Directors and staff of the Northern
Colorado Water Conservancy District, (Northern Water) I am writing to
support S. 3189, a bill to amend Public Law 106-392. Passage of this
bill will ensure that adequate funds are available to complete the
important missions of both the Upper Colorado River Endangered Fish
Recovery Program and the San Juan River Basin Recovery Implementation
Program.
S. 3189 assures authority for capital funding to both recovery
programs, as needed, to provide for major rehabilitation and repair of
more than $100 million in facilities constructed by the two programs;
assures protection of critical habitat in the San Juan River; and
extends current funding levels for annual operation and maintenance
provided by Colorado River Storage Project power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin--the highest
standard under the Endangered Species Act (ESA)--and providing ESA
compliance for water project depletions in the Upper Basin consistent
with interstate compacts and state water law. These programs are
successfully accomplishing these goals. The status of endangered fish
is improving, while these two programs are providing ESA compliance for
more than 1,600 water projects within the respective river basins. It
is important to note that these programs have long enjoyed bi-partisan
support in Congress.
Northern Water respectfully requests the Subcommittee support the
amendments to the authorizing legislation for the Upper Basin and San
Juan Recovery programs in S. 3189.
______
Statement of Jim Ferland, Senior Vice President, Utility Operations,
PNM Resources, Albuquerque, NM, on S. 3189
I am writing to support S.3189, a bill to amend Public Law 106-392.
Passage of this bill will ensure the adequacy of funds to complete the
important missions of both the Upper Colorado River Endangered Fish
Recovery Program and the San Juan River Basin Recovery Implementation
Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The programs have long enjoyed bi-
partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
______
Statement of the Honorable Lois Capps, U.S. Representative From
California, on H.R. 3323
Mr. Chairman and members of the Subcommittee, thank you for holding
this hearing today. And thank you for the opportunity to speak in favor
of H.R. 3323, the Goleta Water Distribution System Conveyance Act of
2007, legislation I introduced last year. On May 21, 2008, the House
passed my legislation by voice vote.
H.R. 3323 would authorize the title transfer of a federally owned
water distribution system in my congressional district from the Bureau
of Reclamation to the Goleta Water District. The purpose of the
legislation is to simplify the operation and maintenance of the
District's water distribution system and eliminate unnecessary
paperwork and consultation between the District and the Bureau.
The Goleta Water District has operated and maintained the
facilities proposed for transfer since the 1950's. They have worked
through all requirements of the Bureau's title transfer process,
including: public meetings, fulfillment of their repayment obligations,
completion of an environmental assessment, and compliance with all
other applicable laws.
The only step remaining to complete the process is an act of
Congress enabling the Secretary of the Interior to transfer title.
It is important to note that the proposed transfer would apply only
to lands and facilities associated with the District and would not
affect the District's existing water service contract with the Santa
Barbara County Water Agency nor the Federal government receipts from
water deliveries under the contract. In addition, the proposed transfer
does not envision any new physical modification or expansion of the
service infrastructure.
I'm pleased the Administration is supporting my legislation, which
will allow the Bureau to focus its limited resources where they are
needed most. In my view, this is an example of local problem-solving at
its best. I commend the staff of the water district and the Bureau for
their efforts to reach this agreement. They have been working on this
for several years now.
Today's hearing is another important step in this process. And I
hope the Subcommittee will approve this legislation very soon, which
means a lot to my constituents.
Again, I want to thank the Chairwoman of the Subcommittee, as well
as the members of the Subcommittee for your interest in the bill.
Thank you.
______
Statement of Mark Duncan, Chairman, San Juan Water Commission,
Farmington, NM, on S. 3189
I am writing to support S.3189, a bill to amend Public Law 106-392.
Passage of this bill will ensure the adequacy of funds to complete the
important missions of both the Upper Colorado River Endangered Fish
Recovery Program and the San Juan River Basin Recovery Implementation
Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The programs have long enjoyed bi-
partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
______
Statement of Clement J. Frost, Chairman, Southern Ute Indian Tribe,
Ignacio, CO, on S. 3189
On behalf of the Southern Ute Indian Tribe (``Tribe''), I am
writing to support S.3189, a bill to amend Public Law 106-392. Passage
of this bill will ensure the adequacy of funds to complete the
important missions of both the Upper Colorado River Endangered Fish
Recovery Program and the San Juan River Basin Recovery Implementation
Program (``Upper Basin and San Juan Recovery Programs'').
S.3189 assures authority for capital funding to both the Upper
Basin and San Juan Recovery Programs, as needed, to provide for major
rehabilitation and repair of more than $100 million in facilities
constructed by the two programs, assures protection of critical habitat
in the San Juan River, and extends current funding levels for annual
operation and maintenance provided by CRSP power revenues.
The Upper Basin and San Juan Recovery Programs have the dual goals
of achieving recovery of endangered fish species in the Upper Colorado
River Basin and the San Juan River Basin, the highest standard under
the Endangered Species Act (``ESA''), and providing ESA compliance for
water project depletions in the Upper Basin and the San Juan Basin
consistent with interstate compacts and state water law. These
successful programs are working. The status of endangered fish is
improving. In the two basins, more than 1,600 water projects are
provided with ESA compliance in accordance with the Upper Basin and San
Juan Recovery Programs. No lawsuits have been filed on ESA compliance
under these two programs. The Upper Basin and San Juan Recovery
Programs have long enjoyed bipartisan support in Congress.
The Tribe requests the Subcommittee to support the amendments to
the authorizing legislation for the Upper Basin and San Juan Recovery
Programs in S.3189.
______
Statement of Carly B. Burton, Executive Director, Utah Water Users
Association, on S. 3189
On behalf of the Utah Water Users Association, I am writing to
support S.3189, a bill to amend Public Law 106-392. Passage of this
bill will ensure the adequacy of funds to complete the important
missions of both the Upper Colorado River Endangered Fish Recovery
Program and the San Juan River Basin Recovery Implementation Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
The two programs have the dual goals of achieving recovery of
endangered fish species in the Upper Colorado River Basin, the highest
standard under the Endangered Species Act, and providing ESA compliance
for water project depletions in the Upper Basin consistent with
interstate compacts and state water law. These successful programs are
working. The status of endangered fish is improving. In the two basins,
more than 1,600 water projects are provided with ESA compliance in
accordance with these two programs. No lawsuits have been filed in ESA
compliance under these programs. The programs have long enjoyed bi-
partisan support in Congress.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
______
Statement of Ernest House, Sr., Chairman, The Ute Mountain Ute Tribe,
Towaoc, CO, on S. 3189
I am writing to support S.3189, a bill to amend Public Law 106-392.
Passage of this bill will ensure the adequacy of funds to complete the
important missions of both the Upper Colorado River Endangered Fish
Recovery Program and the San Juan River Basin Recovery Implementation
Program.
S.3189 assures authority for capital funding to both programs, as
needed, to provide for major rehabilitation and repair of more than
$100 million in facilities constructed by the two programs, assures
protection of critical habitat in the San Juan River, and extends
current funding levels for annual operation and maintenance provided by
CRSP power revenues.
These successful programs are working. The status of endangered
fish is improving. In the two basins, more than 1,600 water projects
are provided with ESA compliance in accordance with these two programs.
We request the Subcommittee to support the amendments to the
authorizing legislation for the Upper Basin and San Juan Recovery
programs in S.3189.
______
Statement of Ron Cunningham, President, Wyoming Water Association,
on S. 3189
The Wyoming Water Association supports the passage of S.3189, a
bill that will, when enacted, amend the current authorizations in
federal law for the Upper Colorado and San Juan River Endangered Fish
Recovery Implementation Programs. Founded in 1933, the objectives of
the state-wide Wyoming Water Association are to promote the
development, conservation, and utilization of the water resources of
Wyoming For the benefit of Wyoming people. The Wyoming Water
Association annually adopts resolutions supporting the ongoing conduct
of the Upper Colorado Recovery Program. The Wyoming Water Association
has been a participating entity within the Upper Colorado Recovery
Program since the Upper Colorado Recovery Program was initiated in
January 1988. We are directly represented on the Upper Colorado
Recovery Program's Biology, Management and Implementation Committees by
Mr. Tom Pius, of Water Consult, Inc. of Loveland, Colorado.
We join our Program partners, including the States of Colorado, New
Mexico, Utah, and Wyoming: and hydroelectric power and environmental
community interests in requesting that your Subcommittee favorably mark
and approve S. 3189 expeditiously after the upcoming July 8th hearing
on this legislation.
The Upper Colorado and San Juan recovery programs are recovering
endangered fish species in a manner that is compatible with state
wildlife and water law. The programs provide. ESA compliance for more
than 1,600 water projects, including federal Reclamation projects and
tribal projects in the Upper Colorado River and San Juan River basins.
The Programs' have constructed approximately 5100 million in facilities
(fish passages, fish screens, flooded bottomlands habitat, hatcheries.
and a reservoir that augments flows) that are directly benefitting the
endangered fish and their habitat. These large, complex facilities are
susceptible to damage by floods and debris associated with the major
rivers on which they are located and will require in the future, either
due to damage or wearing out, investment to be made in rehabilitation,
repair or replacement of the moving systems and facilities' components.
Additional authority is needed to complete the Tusher Wash fish screen
on the Green River. Additional time is needed to complete capital
projects in the San Juan Basin.
Currently, authorization for the Secretary of the Interior to
conduct capital construction expires on September 30, 2010 and the
existing appropriations authority for the Upper Colorado Program will
have been expended. In addition, S. 3189 authorizes funding to protect
critical habitat. Unstable rock formations adjacent to designated
critical habitat in the San Juan River have caused several landslide
near Farmington, New Mexico, which the U.S. Fish and Wildlife Service
characterize as constituting adverse modification to critical habitat
in the San Juan River. The estimated $7 million cost of stabilizing
these cliff-side rock formations is not authorized in the existing
Public Law 106-392. S. 3189 will provide additional authorities to
ensure recovery of the species and continued ESA compliance for the
water projects that rely on the two recovery programs. Appropriations
will only be requested as needed and any requests will be subject to
Congressional scrutiny. Specifically, S. 3189 would achieve the
following:
Authorize an additional $12 million in federal expenditures
for capital projects for the San Juan Program for the purposes
of a) protecting critical habitat of endangered fish species
from rock slides in the area west of Farmington ($7 million),
and b) repair, rehabilitation and replacement of constructed
capital facilities as needed through 2023 ($5 million).
Authorize an additional $15 million in federal expenditures
for capital projects for the Upper Colorado Program for the
purposes of a) constructing a fish screen on Tusher Wash in
critical habitat on the Green River in Utah, and b) for
repairs, rehabilitation and replacement of constructed capital
facilities as needed through 2023.
Recognize additional non-federal cost sharing of $56 million
through 2023.
Allow continued use of power revenues through 2023 for
annual operation and maintenance expenses associated with the
two recovery programs.
The members of the Wyoming Water Association again request and will
greatly appreciate your continued support of these two vital programs
through approval of S.3189.