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45–191 PDF 2008

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 
(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

JEFF BINGAMAN, New Mexico, Chairman 

DANIEL K. AKAKA, Hawaii 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

MARIA CANTWELL, Washington 

KEN SALAZAR, Colorado 

ROBERT MENENDEZ, New Jersey 

BLANCHE L. LINCOLN, Arkansas 

BERNARD SANDERS, Vermont 

JON TESTER, Montana 

PETE V. DOMENICI, New Mexico 

LARRY E. CRAIG, Idaho 

LISA MURKOWSKI, Alaska 

RICHARD BURR, North Carolina 

JIM DEMINT, South Carolina 

BOB CORKER, Tennessee 

JOHN BARRASSO, Wyoming 

JEFF SESSIONS, Alabama 

GORDON H. SMITH, Oregon 

JIM BUNNING, Kentucky 

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 

RON WYDEN, Oregon 

MARIA CANTWELL, Washington 

KEN SALAZAR, Colorado 

BLANCHE L. LINCOLN, Arkansas 

JON TESTER, Montana 

BOB CORKER, Tennessee 

LARRY E. CRAIG, Idaho 

JIM DEMINT, South Carolina 

JOHN BARRASSO, Wyoming 

GORDON H. SMITH, Oregon 

JIM BUNNING, Kentucky 

JEFF BINGAMAN and PETE V. DOMENICI are Ex Officio Members of the Subcommittee 
(III) 

C O N T E N T S 

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 

(1) 

MISCELLANEOUS WATER BILLS 

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. 
2 

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. 
3 

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 costsavings 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 bur-
4 

dens 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 
5 

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 
6 

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. 
7 

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 pop-
8 

ulations 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 longterm 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 
9 

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 
10 

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 FryArk authorization by providing that the Federal government bear 65 percent of the 
11 

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 federallyowned 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 
12 

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 
13 

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 
14 

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. 
15 

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. 
16 

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? 
17 

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 
18 

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 cohosting 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 
19 

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 Reclama-
20 

tion 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. 
21 

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 cre-
22 

ate 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. 
23 

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 nearterm 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 ‘‘Na-
24 

tional 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 in-
25 

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. 

dicate 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

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. 
26 

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 Reclamationoperated 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 federallyowned facilities. 

Given this scenario, it is incredible that Reclamation loan guarantees, a longawaited 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. 
27 

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 costeffective. 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 
28 

* See Appendix II. 

apply current and future miscellaneous revenues generated by FryArk 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. 

[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. 
29 

As background for my testimony, Southeastern is a statutory water conservancy 

district (see C.R.S. § 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 FryArk 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. 
30 

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. 
31 

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 
32 

* Exhibits A–C have been retained in subcommittee files. 

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).* 

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 con-
33 

struction 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. 
34 

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 
35 

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 
36 

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? 
37 

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 
38 

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.] 
(39) 

APPENDIXES 

APPENDIX I 

Responses to Additional Questions 

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 nonfederal 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: 
40 

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 contin-
41 

ued 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 man-
42 

* Report has been retained in subcommittee files. 

ganese. 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. 

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 
43 

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. § 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. 
44 

* Document has been retained in subcommittee files. 

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. 

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. 
45 

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 
46 

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 
47 

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 publicpurpose 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 nonfederal 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 improve-
48 

ments. 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: 
49 

• 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? 
50 

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 FryArk Project have temporary excess capacity contracts yielded this amount of revenue. There are several uncertainties in trying to project revenues from future ‘ifand-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? 
51 

Answer. The proposal in S. 2974 is inconsistent with both the existing FryingpanArkansas 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 
52 

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. 
(53) 

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 provi-
54 

sions 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. 
55 

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 
56 

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 
57 

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 suc-
58 

cessful 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. 
59 

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. 
60 

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-ofway 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 
61 

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. 
62 

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 
63 

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 pro- vide 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 
64 

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 
65 

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. 

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. 

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 
66 

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 need- ed, 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 
67 

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 pro- vide 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 
68 

(‘‘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 pro- vide 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 
69 

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. 

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