[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
H.R. 1985 AND H.R. 2404
=======================================================================
LEGISLATIVE HEARING
before the
SUBCOMMITTEE ON WATER AND POWER
of the
COMMITTEE ON RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
July 26, 2001
__________
Serial No. 107-53
__________
Printed for the use of the Committee on Resources
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
or
Committee address: http://resourcescommittee.house.gov
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2002
____________________________________________________________________________
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COMMITTEE ON RESOURCES
JAMES V. HANSEN, Utah, Chairman
NICK J. RAHALL II, West Virginia, Ranking Democrat Member
Don Young, Alaska, George Miller, California
Vice Chairman Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana Dale E. Kildee, Michigan
Jim Saxton, New Jersey Peter A. DeFazio, Oregon
Elton Gallegly, California Eni F.H. Faleomavaega, American
John J. Duncan, Jr., Tennessee Samoa
Joel Hefley, Colorado Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland Solomon P. Ortiz, Texas
Ken Calvert, California Frank Pallone, Jr., New Jersey
Scott McInnis, Colorado Calvin M. Dooley, California
Richard W. Pombo, California Robert A. Underwood, Guam
Barbara Cubin, Wyoming Adam Smith, Washington
George Radanovich, California Donna M. Christensen, Virgin
Walter B. Jones, Jr., North Islands
Carolina Ron Kind, Wisconsin
Mac Thornberry, Texas Jay Inslee, Washington
Chris Cannon, Utah Grace F. Napolitano, California
John E. Peterson, Pennsylvania Tom Udall, New Mexico
Bob Schaffer, Colorado Mark Udall, Colorado
Jim Gibbons, Nevada Rush D. Holt, New Jersey
Mark E. Souder, Indiana James P. McGovern, Massachusetts
Greg Walden, Oregon Anibal Acevedo-Vila, Puerto Rico
Michael K. Simpson, Idaho Hilda L. Solis, California
Thomas G. Tancredo, Colorado Brad Carson, Oklahoma
J.D. Hayworth, Arizona Betty McCollum, Minnesota
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana
Allen D. Freemyer, Chief of Staff
Lisa Pittman, Chief Counsel
Michael S. Twinchek, Chief Clerk
James H. Zoia, Democrat Staff Director
Jeff Petrich, Democrat Chief Counsel
------
SUBCOMMITTEE ON WATER AND POWER
KEN CALVERT, California, Chairman
ADAM SMITH, Washington, Ranking Democrat Member
Richard W. Pombo, California George Miller, California
George Radanovich, California Peter A. DeFazio, Oregon
Greg Walden, Oregon, Calvin M. Dooley, California
Vice Chairman Grace F. Napolitano, California
Michael K. Simpson, Idaho James P. McGovern, Massachusetts
J.D. Hayworth, Arizona Hilda L. Solis, California
C.L. ``Butch'' Otter, Idaho Brad Carson, Oklahoma
Tom Osborne, Nebraska
Jeff Flake, Arizona
------
C O N T E N T S
----------
Page
Hearing held on July 26, 2001.................................... 1
Statement of Members:
Calvert, Hon. Ken, a Representative in Congress from the
State of California........................................ 1
Prepared statement of.................................... 3
Statement of Witnesses:
Carlson, Peter, President, Will & Carlson, Inc............... 59
Prepared statement of.................................... 70
Gastelum, Ronald R., CEO, Metropolitan Water District of
Southern California........................................ 35
Prepared statement of.................................... 37
Guy, David J., Executive Director, Northern California Water
Association................................................ 44
Prepared statement of.................................... 46
Hannigan, Thomas M., Director, California Department of Water
Resources.................................................. 16
Prepared statement of.................................... 18
Koehler, Cynthia L., Legal Director, Save San Francisco Bay
Association................................................ 40
Prepared statement of.................................... 42
Luddy, William G., Director, Labor Management Education and
Development Fund, United Brotherhood of Carpenters and
Joiners of America......................................... 51
Prepared statement of.................................... 52
Norton, Hon. Gale, Secretary, U.S. Department of the Interior 5
Prepared statement of.................................... 8
Schulz, Clifford W., Special Water Counsel, Kern County Water
Agency..................................................... 72
Prepared statement of.................................... 74
Sunding Dr. David L., Director, Center for Sustainable
Resource Development, University of California at Berkeley. 54
Prepared statement of.................................... 55
HEARING ON H.R. 1985, FUNDING FOR IMPLEMENTATION OF A COMPREHENSIVE
PROGRAM IN CALIFORNIA TO ACHIEVE INCREASED WATER YIELD AND
ENVIRONMENTAL BENEFITS, AS WELL AS IMPROVED WATER SYSTEM RELIABILITY,
WATER QUALITY, WATER USE EFFICIENCY, WATERSHED MANAGEMENT, WATER
TRANSFERS, AND LEVEE PROTECTIONH.R. 2404, TO AUTHORIZE FEDERAL AGENCY
PARTICIPATION FOR THE PURPOSES OF INCREASING DELIVERABLE WATER
SUPPLIES, CONSERVING WATER AND ENERGY, RESTORING ECOSYSTEMS, AND
ENHANCING ENVIRONMENTAL QUALITY IN THE STATE OF CALIFORNIA
----------
Thursday, July 26, 2001
House of Representatives,
Subcommittee on Water and Power,
Committee on Resources,
Washington, D.C.
----------
The Subcommittee met, pursuant to call, at 2 p.m., in Room
1324, Longworth House Office Building, Hon. Ken Calvert
[Chairman of the Subcommittee] presiding.
STATEMENT OF THE HONORABLE KEN CALVERT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Calvert. Good afternoon, Madam Secretary. This hearing
will come to order. An adequate supply of high quality water is
vital to the people of this Nation, especially in the west. We
must provide for the environment, enhance ecosystems, while
also supplying high-quality drinking water to businesses and
millions of residents.
Furthermore, we need to abide by the commitment laid down
in the CALFED record of decision to deliver to existing
agricultural users south of the Delta. We can achieve all these
goals and carefully balance the use of existing water through
conservation, water recycling, and the development of new water
yield and supply. That is at the heart of what I believe, and
it is embodied in HR 1985, the solution to improve our water
security.
H.R. 1985, which I introduced along with more than half of
my California colleagues from throughout the State of
California, is a broad-based solution which addresses all
aspects of putting water security on a more solid foundation in
California and the west.
H.R. 1985 authorizes and supports the CALFED record of
decision and associated programs, and further addresses our
water security needs throughout the west. As you are aware, I
chose not to authorize any specific projects in this
legislation. I did this to ensure that a fair process can be
developed to meet all the competing demands of water users. I
also recognize it is time we stop pitting one interest group
against another.
I certainly would have liked to specifically authorize the
development of new water yield in the State because there are a
number of worthy projects that would create new water and
efficiently reuse existing water supplies; however, we need to
assure that all competing water users rise and fall together,
and not to leave anyone behind has been done so frequently in
the past with Federal water policy in California.
H.R. 1985 calls on State and Federal agencies working in
close consultation with the public and local stakeholders to
develop a governance structure that will assure proper balance
among competing water interests. Parallels between the power
crises and water have been drawn, and for good cause. Over the
last decade, the demand for electricity in California grew by
25 percent, while new power protection grew by only 6 percent.
The results: Wholesale energy prices that averaged $30 a
megawatt hour last year averaged $330 in January of 2001, and
ultimately adequate electricity was not available, and people
went without as blackouts rolled across California.
What will be the reaction if we allow the water situation
to escalate to the same proportions? Remember when managing
water, we're dealing with a finite supply, electricity can be
created but not stored while water can be stored but not
created. We do not have the power to make the skies open upon
request and produce rain. Today we are looking for ways to make
more water available for the ecosystem. We are facing
agriculture water supplies that continue to diminish. Business
in California are concerned about water security, and at the
same time, we must reduce our dependance on the Colorado River
by 15 percent in the next 15 years. In those same 15 years,
California's population is projected to grow by 30 percent.
The message is clear. Inaction will inevitably lead to a
serious water crisis, much worse than the electricity crisis
today. This debate cannot afford to have any spectators. Water
is essential to every person, every day, in every facet of
life. From the dot com companies in Northern California to the
farming operations in the Central Valley, to the tens of
millions of consumers in Southern California, all Californians
need to be proactive supporters of measures that will
responsibly manage and improve our water supplies.
I, along with 100 cities, have a big book here of counties,
associations, elected officials, including the Association of
California Water agencies, Orange County Water District, Ducks
Unlimited, Long Beach Water Department, California Women for
Agriculture--the list goes on, of concerned folks looking for
people to come up with solutions and who all support H.R. 1985.
I certainly appreciate the level of detailed engagement
from the Department of Interior, which is the fruit of many
meetings I have had with the Secretary and staff.
Madam Secretary, I appreciate your personal engagement on
this issue and will carefully evaluate all of your constructive
comments. This exchange now gives us the opportunity to move
forward with a balanced approach in order to improve the water
situation in California, and certainly in the entire west. I
believe the only viable solution to water issues in the west
will be found in the compromise between H.R. 1985, Senator
Feinstein's legislation, certainly the Bush administration's
proposals, along with consulting with many others. These three
positions define the parameters, what is responsible and more
importantly what is possible.
With that, I will now recognize the ranking member, Adam
Smith.
[The prepared statement of Mr. Calvert follows:]
Statement of Ken Calvert, Chairman, Subcommittee on Water and Power
An adequate supply of high quality water is vital to the people of
this Nation. We must provide for the environment and enhance
ecosystems, while also providing high quality drinking water to
businesses and more than 33 million residence. Furthermore, we need to
abide by the commitment, laid down in the CALFED Record of Decision,
that water deliveries to existing agricultural users south of the delta
be 70% of their contracted amounts in a normal water year. We can
achieve all these goals, and carefully balance the use of existing
water, through conservation, water recycling, and the development of
new water yield and supply. That is at the heart of what I believe, and
it is embodied in H.R. 1985, the solution to improve our water
security. This bill, introduced by more than half of my California
colleagues from throughout the State, is a broad-based solution of
working on all aspects of putting water security on more solid
foundations in California and the West. The ``Western Water Security
Enhancement Act'', authorizes and supports the CALFED Record of
Decision and associated programs, and further addresses our water
security needs throughout the west.
As you are all aware I chose not to authorize any specific
projects. I did this to ensure that a fair process can be developed to
meet all the competing demands of water users. Even though I chose this
direction, I wish I could have specifically authorized the development
of new water yield in the State. But I also recognize it is time we
stop pitting one interest group against another. We need to assure that
all competing water users grow together, and not leave anybody behind,
as has been done so frequently in the past with Federal water policy in
California. The bill calls on State and Federal agencies, working in
close consultation with the public and local stakeholders, to develop a
governance structure that will assure proper balance among competing
water interests.
Parallels between the power crisis and water have been drawn, and
for good cause. Over the last decade, the demand for electricity in
California grew by 25%, while new power production grew by only 6%. The
results--
Lwholesale energy prices that averaged $30 per megawatt
hour last year averaged $330 in January of 2001.
LAnd, ultimately, adequate electricity was not available
and people went without it as blackouts rolled across California.
What will the reaction be if we allow the water situation to
escalate to the same proportions?
Today we are looking for ways to make more water available for the
ecosystem...
Today we face agricultural water supplies that continue to
diminish, and other businesses in California are stating concern about
water security--while we have not built any noteworthy water supply
projects in 25 years.
Over the next 15 years, while we must reduce our dependance on the
Colorado River by 15%, the population in California is projected to
grow by 30%!
The message is clear--Inaction means letting the crisis come to
full affect. Groups that sit idle on the sidelines because they don't
see this process impacting them should measure carefully the long-term
risk of failure.
It is imperative that we move forward a balanced approach to
improve the water situation in California by authorizing CALFED and
increasing supply throughout the state.
______
Mr. Smith. Thank you, Mr. Chairman. I will actually yield
my time to Mr. Miller. I'm not from California. I'm here to
learn.
Mr. Miller. You can send us your water, though, you know.
Thank you very much. And Madam Secretary, welcome and
Director Hannigan, welcome and thank you for taking your time
to share your testimony and thoughts on this matter. And Mr.
Chairman, thank you for this hearing and for the previous
hearings that you have held, and I think it's important, as you
have stated, that we give prompt consideration to this
legislation and to continuing our efforts under the CALFED
process.
I have believed for a long time, and continue to believe,
that the CALFED really is our best opportunity, that we were
able to bring people together and to provide stakeholders an
opportunity, which historically may not have always been
provided in California, but out of doing that and during that
process, I think we have reached a consensus, a near consensus
on what needs to be done. We are arguing a little bit about who
goes first and where we go and the rest of that, but I think
there is a commitment within the delegation that we hold that
process together.
Last week we had our hearing over in the Senate on Senator
Feinstein's legislation and Madam Secretary, you testified, and
others did and as a result of that hearing, discussions are
continuing about how we bring together and reconcile our
differences. The Senator stated that was an open process, and
Chairman Calvert has made it very clear to members of this
Committee that he seeks to work with all of us to try and
resolve our differences, because it is very clear no matter how
much support we have in California, we have to sell that to our
colleagues in the United States Senate and to the U.S. House of
Representatives, and this is not an inexpensive piece of
legislation, and the competition is rather dramatic, and unless
we have a great deal of unity, I think our chances of success
are greatly diminished.
And I think that is what hopefully this hearing is about,
and the ongoing consultations with Chairman Calvert and the
others will be about minimizing those differences.
My outlook on water I think is fairly known to the players
in California. So I won't go back through that, but I want to,
again, say to Chairman Calvert, I appreciate your talking on
this effort. I sat where you sat, and I know that this is a
very difficult and controversial job, but it needs to be done
for the benefit of our State.
Let me just state a couple of points that I made in the
testimony in the Senate, and that is, I continue to be troubled
by the so-called South of Delta Water Assurances that I think
dramatically alters the position of water rights holders in the
State of California, and I do not think that that was the
purpose or the outcome of the ROD, and I do not believe that we
necessarily can do that, or we cannot do that in this
legislation and alter the status of those historical parties.
And I also mentioned over there and I continue to express
that concern here with this legislation on this Committee, also
the question of how we go about getting the approval of these
projects. I disagreed with the approach that Senator Feinstein
sought to take in the sense that I think we have got to make
sure that everybody in the State understands that this
process--while we may want to expedite it and I don't have a
problem with doing that, we have got to make sure that people
have a fair and open opportunity to be involved in that process
in terms of amendments.
The suggestion that somehow we would take feasibility
studies sight unseen and then the question would only be up or
down on that, I think doesn't enhance our opportunities for
success, it diminishes our opportunities for success.
And I think, again, when you look at all the other projects
in this country and the question of whether or not California
gets to go in this expedited fashion, it better be a process
that treats all of the stake holders in a fair fashion. Those
are matters for continued discussion and negotiations, and I
hope that we can resolve them, and I again give the caveat that
in one case, maybe one of the premier projects in this loss of
Carol's Reservoir, we will have to go, as a matter of law, to a
local referendum on that matter, and we have got to make sure
that all parties to that decision feel like this was a fair or
an open process, so they had an opportunity to be heard so that
we can get the vote required to proceed with that project.
So thank you very much, Mr. Chairman, and I look forward to
the testimony.
Mr. Calvert. I thank the gentleman. Our first--we are
pleased and honored to have the Secretary of the Department of
Interior, the Honorable Gale Norton, and Mr. Thomas Hannigan,
the director of California Department of Water Resources, who
is accompanied by Mr. Patrick Wright, director of the CALFED
Bay-Delta program. And with that we are pleased to recognize
Secretary Norton for any time you may consume.
STATEMENT OF HON. GALE NORTON, SECRETARY, U.S. DEPARTMENT OF
THE INTERIOR
Secretary Norton. Thank you, Mr. Chairman, members of the
Committee. I am pleased to join you today to provide the
Department's testimony on H.R. 1985, the Western Water
Enhancement Security Act, and H.R. 2404, the California Water
Quality & Reliability Act of 2001. Mr. Chairman, I ask
permission to submit my full remarks for the record and
summarize the Department's position here.
Title I of H.R. 1985 and H.R. 2404 both address
implementation of the CALFED Bay-Delta program, a comprehensive
balanced and timely water management environmental restoration
program in California. The stakes could not be higher because
the Bay-Delta is an area of critical environmental importance
as well as the hub of the State's water supply system,
providing drinking water for more than 22 million Californians,
important habitat for over 750 plant and animal species,
irrigation water for the most of the $27 billion agricultural
sector, and water essential to the manufacturing and commercial
sectors of the State.
Early in my term as Secretary, I visited California and had
the opportunity to fly around and see all of the projects that
are a part of the existing Central Valley Project and other
aspects of CALFED. It's very important, and I take seriously,
our responsibility to understand and to play our role within
this process. The administration supports CALFED's goals of
increasing water yield, protecting the environment, improving
water system supply reliability and water quality, and
providing watershed management, levee protection, water
transfers, storage, and conveyance.
As this Committee can well appreciate, our new
administration faced a substantial number of major resource
issues of high priority. In the area of water, virtually every
western State has issues of concern and controversy demanding
our attention. With the recent confirmation of assistant
Secretary for Water and Science, Bennett Raley, and John Keys,
the new commissioner for the Bureau of Reclamation, we are able
to begin dealing substantially with many of these issues.
In addition, we anticipate having Craig Manson join us as
Assistant Secretary for Fish, Wildlife, and Parks. He is from
California and used to be general counsel for the California
Department of Fish and Game, as well as Steve Williams as
director of the Fish and Wildlife Service. All of them will
play an important role on the Department of Interior's work on
CALFED.
In the Columbia River, the Colorado River and in the
Central Valley of California, among others, we are beginning
our examination of multi-year, multimillion dollar planning and
negotiation efforts. On all of the matters before us, one
conclusion is uniformly applicable. We will continue to work
toward solutions, and we will make decisions that reflect the
President's commitment to the balanced and sensible resolution
of resource issues across our Nation.
In the case of CALFED, we support the comprehensive and
integrated nature of the proposed actions and the commitment to
a credible science program to support the decision-making
process. The manner in which Federal and State administrators
have worked together is a model that we hope to employ
throughout the west. Clearly significant progress has been made
in the dedication of State and Federal moneys for ecosystem
improvements in the Sacramento San Joaquin Delta and the San
Francisco Bay.
On the Federal side, Congress has appropriated nearly $500
million in total for CALFED-related efforts for Central Valley
Project Improvement Act and CALFED initiatives. Outstanding
issues still need resolution and we are committed to finding
those solutions with this Committee, with Congress, with
Governor Davis, and with the stakeholders who have been
actively involved.
Let me now turn to some of the specific issues. With regard
to Title I of H.R. 1985, which would authorize funding through
the Secretary of Interior as well as governance and management
authorities for the implementation of CALFED, we support the
purposes and many provisions of the bill. We also have a number
of concerns with the bill as written, and we believe some
modifications are needed.
Mr. Chairman, we recognize your efforts to embody the
balanced approach that is at the heart of the CALFED process,
and we appreciate the opportunity to work with you on that. As
detailed in my written testimony, in the case of water delivery
assurances, the proposed legislation sets a floor on the water
delivery commitment made in the record of decision for south of
Delta's Central Valley project agricultural service
contractors. No analysis has currently been completed to
demonstrate what level would be possible when CALFED is
implemented. We look forward to working with you to find ways
of providing predictability for water users.
In addition, we would like to work with the Committee on
broader allocation of appropriations among affected agencies,
on language regarding the successful operation of the
environmental water account to reduce conflicts between
fisheries and water project operators and other provisions of
Title I.
For my testimony of Title II on H.R. 1985, which would
authorize small reclamation projects funded through grants and
loans, my written testimony provides more details. This Title
raises some budget implementation and administrative questions
for the Bureau of Reclamation. We generally support efforts to
provide assistance to small nonFederal water users in
constructing and rehabilitating their irrigation projects and
in carrying out restoration activities. This is often
preferable to having the Federal Government take on the
responsibility for constructing and for fully operating
projects. The administration, at this time, withholds our full
support for Title II. But we want to work with the Subcommittee
and others on this proposal.
With regard to H.R. 2404, like Title I of the other bill,
this would authorize the CALFED program for implementation. The
bill provides important benefits by striving to increase the
reliability of water supplies and providing governance and
coordination authority; however, our concerns with this bill
include that it focuses only on the Department of the Interior
and should better recognize the roles of nonInterior agencies
and the importance of the Federal/State partnership. We believe
it needs a more comprehensive approach to increasing water
supply reliability.
Although regional solutions are important, they alone will
not be able to accomplish the larger scale objectives of the
record of decision. The language on pumping reductions from the
Harvey Bank's Pumping Plant seems to impose overriding Federal
policy on a State plant. Reductions at that plant and at Tracy
Pumping Plant conflict with CALFED water supply reliability
objectives.
Returning to the big picture, the history of the settlement
of California and the ensuing development of water resources is
full of political and legal battles. Although agreement on
water management may not be immediate, the CALFED program is a
step in reaching a common vision. CALFED represents a new
approach to an old problem. By combining the interests of State
and Federal agencies with regulatory power over the Bay-Delta
and with those of urban, environmental, and agricultural users,
the CALFED program is moving California toward more equitable
and efficient water and ecosystem management.
Continued implementation of CALFED offers the opportunity
for a long-term solution to the critical problems confronting
the Bay-Delta. Specifically, the Department will continue to
operate the Central Valley project in accordance with the
provisions of the State's water quality control plan, the
Central Valley Project Improvement Act, the Endangered Species
Act, and other applicable statutes. The Department is aware of
the importance of meeting its environmental commitments and the
importance to water users of adequate water supply reliability.
For these reasons, the Department will continue to work through
the CALFED process to improve the environment and to increase
the system's water management flexibility. We believe the
Subcommittee is seeking to offer a balanced approach toward
implementing the record of decisions commitments and to
facilitate the Federal Government's continued participation in
the CALFED program. We look forward to working with the
Committee and others in Congress to address the
administration's concerns. Thank you very much.
[The prepared statement of Secretary Norton follows:]
Statement of Hon. Gale A. Norton, Secretary, U.S. Department of the
Interior
I am pleased to appear before this Subcommittee to provide the
Department's testimony on H.R. 1985, the Western Water Enhancement
Security Act, and H.R. 2404 the California Water Quality and
Reliability Act of 2001.
Title I of H.R. 1985 would authorize funding through the Secretary
of the Interior, as well as governance and management authorities, for
the implementation of a comprehensive, balanced, and timely water
management and environmental restoration program in California commonly
referred to as the CALFED Bay-Delta Program, as reflected in the
Federal Record of Decision (ROD) issued August 28, 2000. The purpose of
the program is to increase water yield and environmental benefits, as
well as improved water system reliability, water quality, water use
efficiency, watershed management, and levee protection, water
transfers, storage, and conveyance.
H.R. 2404 also addresses the implementation of CALFED. My comments
on this bill follow my comments on Title I of H.R. 1985.
Title II of H.R. 1985 would authorize small reclamation projects
funded through grants and loans, including loans guaranteed by the
United States government. My comments on title II of H.R. 1985 follow
my comments on H.R. 2404. We note that both titles of H.R. 1985 would
be quite expensive, as would other CALFED legislation before the
Congress.
TITLE I OF H.R. 1985 - CALFED
Mr. Chairman, I would like to express my deep appreciation to the
Committee for your obvious commitment to making significant progress
with the CALFED program. I also appreciate the consistent concerns
demonstrated by this Committee that progress be made and for your
efforts in developing the bill being considered today. Your continued
willingness to work with the Department and the Administration on this
matter is of real and continuing importance to us.
As the Committee can imagine, our new Administration faced a
substantial number of major resource issues of high priority upon
assuming office. In the area of water, virtually every western state
has issues of concern and controversy demanding our attention. With the
confirmation of Assistant Secretary for Water and Science Bennett Raley
and Commissioner of Reclamation John Keys we are able to begin dealing
substantively with many of the issues before us. We await the
nomination and confirmation of Craig Manson as Assistant Secretary for
Fish and Wildlife and Parks and Steve Williams as Director for the Fish
and Wildlife Service to further assist interagency efforts.
On the Columbia River, the Colorado River and in the Central Valley
of California, among others, we are beginning our examination of the
results of multi-year, multi-million dollar planning and negotiation
efforts. We are looking not only at the results of these enormous work
efforts but also at the process used, both internal and external, and
the information that was relied upon to make decisions. In addition we
are examining the data which provided insight on the biological and
socio-economic consequences of these major resource initiatives.
On all of the matters before us, one conclusion is uniformly
applicable: we will continue to work toward solutions and we will make
decisions that reflect the President's commitment to the balanced and
sensible resolution of resource issues across our Nation.
In the case of CALFED, we find that the comprehensive and
integrated nature of actions proposed and the commitment to the
development of a credible science program in support of the decision
making process are all laudable. The manner in which federal and state
administrations have worked may be considered a model for solutions to
resource management problems.
Likewise, we feel that we can secure similar success in achieving
the goals of CALFED in the context of our responsibilities in all
western states.
Clearly, significant progress has been made in the dedication of
state and federal monies for ecosystem improvements in the watersheds
that constitute the Sacramento-San Joaquin Delta and the San Francisco
Bay. On the Federal side, Congress has appropriated nearly $500 million
for CALFED related efforts, for Central Valley Project Improvement Act
and CALFED initiatives focused on improving the aquatic and terrestrial
habitats of the CALFED solution area.
A Record of Decision is in place that captures years of planning on
all program elements of ecosystem restoration, levee system integrity
and improvement, water supply and reliability improvements, water
quality improvement, improved water use and efficiency, improvements to
the upper watersheds, water transfers, storage, and conveyance.
Congress needs to authorize the CALFED program so we can proceed
with balanced progress on all resource fronts. The Department also
recognizes that outstanding issues are still in need of resolution and
we are committed to finding those solutions expeditiously and in
concert with this Committee, with the Congress, the administration of
Governor Davis and the stakeholders who have been so actively and
constructively involved.
H.R. 1985 is an important step forward. Clearly, additional
authorizing legislation would be required to proceed with the complete
program. We support the purposes and many of the provisions of the
bill. However, we also have a number of concerns with the bill as
written, and we believe some modifications are necessary. We would like
to continue working with the Committee to achieve a bill we can fully
support and which will implement the CALFED.
The results of the CALFED planning process reflect an attempt to
balance competing needs and interests. The CALFED planning process
brought together agricultural, urban, environmental and business
stakeholders with the state and federal agencies in an effort to build
agreements on the approaches to managing California's complex water and
natural resource issues. We recognize that solutions to any set of
problems as large and interconnected as those facing California will be
complex. However, all interests must respect the needs and concerns of
others. The CALFED ROD attempts to recognize the core interests of all
the parties and build a solution that reduces the conflicts in the
existing and long-established system and to balance competing interests
for comprehensive progress. In addition, consideration should be given
to analysis of impacts of the ROD on tribal trust assets, as discussed
in the ROD. With the support of Congress and the State of California,
CALFED can lead the way in a collaborative process that includes
extensive participation of all stakeholders to provide many long-term
solutions to California's water management and infrastructure
improvement needs.
The ``Fed'' side of the CALFED Program demonstrates a cooperative
planning and coordination effort among ten Federal agencies, including
U.S. Fish and Wildlife Service, the U.S. Bureau of Reclamation, the
U.S. Geological Survey, and the Bureau of Land Management, within the
Department of the Interior, as well as the U.S. Environmental
Protection Agency, National Marine Fisheries Service, U.S. Forest
Service, Natural Resources Conservation Service, within the Department
of Agriculture, U.S. Army Corps of Engineers, and Western Area Power
Administration.
CALFED history and background
The CALFED Bay-Delta Program is a response to the water management
and ecosystem problems that came so clearly into focus in the drought
of 1987 to 1992 experienced within the Bay-Delta system. Furthermore,
the historic and ongoing conflicts between water management for supply
and fishery protection give rise to the urgency of the CALFED program.
The waters of Sacramento and San Joaquin Rivers converge in the
Sacramento-San Joaquin Delta, which is the largest estuary in the West
Coast, and discharges into the San Francisco Bay and to the Pacific
Ocean. The Bay-Delta is a maze of waterways and channels that carry
over 40 percent of the State's total runoff to the Bay and provides
drinking water for more than 22 million Californians, important habitat
for over 750 plant and animal species, irrigation water for most of the
$27 billion agricultural sector, and water essential to the
manufacturing and commercial sectors of the State. Over the past
decades, California has witnessed declines in water quality, fish,
wildlife and associated habitat, and the reliability of water supplies.
The goals of CALFED, which the Administration fully support, are to
reverse all these trends.
In December 1994, the State and Federal governments signed the Bay-
Delta Accord, which signaled a new approach to managing the Delta and
finding solutions to longstanding problems in California. In 1995,
CALFED was initiated as a cooperative, interagency effort to reduce
conflicts in the Bay-Delta, modernize water management and
infrastructure, and to make investments aimed at reducing stressors for
species and improving the habitat. The CALFED Program has been
envisioned as a three-phase process:
LPhase I objectives were to identify and define the
problems confronting the Bay-Delta System and develop a mission
statement, program objectives, and alternative actions for further
study. During Phase I CALFED concluded that each program alternative
would include a significant set of program actions which were grouped
into elements to address problems associated with the ecosystem and
water management infrastructure.
LPhase II objectives were to develop a preferred program
alternative, conduct a comprehensive programmatic environmental review
process, and develop an implementation plan focusing on the first 7
years (Stage 1 of implementation). Phase II objectives were achieved
through issuance of the Final Programmatic Environmental Impact
Statement/Environmental Impact Report (IS/EIR) in July 2000 and a
Record of Decision signed on August 28, 2000.
LCALFED is currently in Phase III, a long-term process
implementing specific actions to achieve the goals of the CALFED
program. Phase III objectives are to implement the plan selected in the
IS/EIR over the next 25 to 30 years. Stage 1 of implementation, for the
first 7 years, is underway. Site-specific, detailed environmental
review and feasibility level analysis will occur during Stage 1 prior
to implementation of each proposed action.
CALFED Program Accomplishments
In the past several years substantial progress has been made on a
number of complex water and natural resource issues through the
combined efforts of the public and state and federal agencies working
together as CALFED. The greatest accomplishment of the CALFED effort so
far is bringing all the State and Federal agencies together to produce
the CALFED Record of Decision, signed on August 28, 2000, which
documents the comprehensive plan for improving California's water
supply and water quality, as well as restoring ecological health in the
Bay Delta. This Committee has received copies of the most recent annual
report of accomplishments which details progress in many CALFED program
areas. We particularly would like to bring your attention to the many
creative approaches to addressing historic areas of conflict such as
the Environmental Water Account.
Also of interest is the CALFED Science Program. We expect this
program to provide peer review of the science and information
underlying all elements of the CALFED program from adaptive management,
to ecosystem improvement projects, to project operations and beyond, we
expect CALFED to be supported by a strong and credible science program.
Public workshops have been and are being undertaken by the program
on scientific components of public controversies and are clarifying the
state of scientific knowledge, thereby reducing the level of
controversy. In the near term, these workshops include issues
associated with Delta Cross channel operations, effectiveness of the
Environmental Water Account for salmon and Delta smelt, salinity
effects of levee breaches, and the use of scientific adaptive
management. Additional workshops will be undertaken as topics are
identified.
CALFED Funding
From fiscal year 1998 to fiscal year 2000, Congress appropriated
$190 million for the CALFED Ecosystem Restoration Program and an
additional $30 million for other program elements, including projects
to improve water supply reliability. These funds were provided through
an account in the Bureau of Reclamation budget, but funding for
specific projects or programs has been transferred to participating
Federal agencies based on plans developed by CALFED. As noted above,
CALFED agencies have used these and other funds to screen water
diversions for the benefit of fish and farmers, restore degraded
habitat, establish an environmental water program, develop conjunctive
use projects and develop a state and federal water operations plan. No
funds were provided for this account in fiscal year 2001, largely
because the appropriations committees deferred to the authorizing
committees to review the Program and develop any needed legislation.
The ROD outlines a partnership of State, Federal, and private
funding, and estimated that a total of $8.7 billion from state,
federal, and private sources would be needed for the Program's
implementation. According to Governor Davis, the State is moving
forward to finance and implement actions called for in the ROD. In
order to support the Federal side of this unique partnership, it is
important that appropriate legislation be enacted to authorize Federal
Government participation as contemplated by the ROD.
Benefits of H.R. 1985
The Bay Delta is the hub of the State's water supply system and an
area of unsurpassed ecological importance. Single-purpose efforts to
solve problems in the past have failed to adequately address the
comprehensive nature of the Bay-Delta resources and problems and the
conflicts between supply and demand. H.R. 1985 would provide
authorization for continued Federal participation in the CALFED Bay-
Delta Program and to meet Record of Decision commitments. As such, the
Administration supports many elements of this bill, recognizing that
some modifying language may be needed.
In particular we are supportive of several primary principles
outlined in the bill.
Authorization of Federal Funding for CALFED - As discussed above,
we support the authorization of federal funds and continued federal
participation for CALFED to meet Record of Decision commitments as an
important part of the continuing partnership.
Increased Storage and Water Supply Reliability - The authorizing
language provides a commitment to the programmatic finding of the need
for additional storage. Increased storage may reduce conflicts and
increase system flexibility and can be used to benefit all CALFED
program areas. Storage will allow water to be captured during periods
of excess flow and used to reduce diversions during fish sensitive
periods or when water quality in the Delta is poor. In particular, the
legislation would provide or affirm Reclamation's authorization to
conduct feasibility level studies at Shasta Dam, Los Vaqueros
Reservoir, Upper San Joaquin River, Sites Reservoir, San Luis Bypass
and In-Delta Storage.
Environmental Water Account - The legislation provides for the
continued implementation of the Environmental Water Account (EWA). The
EWA will improve the responsible management of water supplies for all
purposes. Water generated with an EWA will benefit all areas by
increasing the flexibility of the water system. However, we have
concerns over some EWA language in the bill, noted below, and we would
like to work with the Committee to address this.
Governance and Coordination Authority - The CALFED process today is
simply an advisory group to the Federal government as it implements
federal statutes. This legislation will make state, local and federal
agencies participating in CALFED full and vested partners with the
Governance Board having decision making authority. Measures also need
to be taken to bring federally recognized tribes with interests in the
water into the partnership. The Governance Board as outlined in the
legislation will provide for a stronger coordination and oversight
role, integrated and coordinated application of federal and state
regulations, and greater program accountability. We believe, however,
that the provision as drafted may raise Constitutional issues in terms
of non-federal authority over federal management functions and
budgeting. We believe this potential defect may have a relatively
simple solution, and we will work with you and the Justice Department
to resolve it. In addition, target dates for establishing governance
authority may be unrealistic; we are particularly concerned that
funding may be interrupted if governance provisions are not established
in the time provided by the bill.
Concerns with H.R. 1985
Although there are a number of provisions we support in the bill,
the Administration has some basic concerns, relative to Title I of the
legislation before the Subcommittee today, in addition to the matters
noted above, which I would like to describe further. In addition to the
major concerns noted below, we would like to work with the Committee to
address technical and other changes as it considers this legislation.
The CALFED development process involved many interests and the ROD
struck a delicate balance among them, and we urge a careful
consideration of elements in the bill that may upset that delicate
balance.
Water Deliveries - Legislative language in section 103(a)(3) states
that ``In accordance with the record of decision, the Secretary shall
operate the Central Valley Project in a manner that will in a normal
year make available to south-of-Delta Central Valley Project
agricultural water service contractors at least 70 percent of their
existing contract.'' However, the ROD states that ``It is anticipated
that implementation of ...actions (some of which may require further
specific environmental review) will result in normal years in an
increase to CVP south-of-Delta agricultural water service contractors
of 15 percent (or greater) of existing contract totals to 65 to 70
percent.'' The Department must raise several issues regarding the
commitment of specific water supplies in this legislation:
(1) The CALFED ROD uses the phrase ``It is anticipated...'' because
there has not been an analysis completed which demonstrates the
delivery capability of the CVP and other projects with implementation
of the actions provided pursuant to the ROD. Such analysis, in
combination with actual operating experience with implementation of the
actions, is necessary to identify achievable water supply benefits.
(2) The commitment of specific water supplies may place the
Secretary in a position in which other Acts of Congress such as the
CVPIA, Clean Water Act, and ESA may be violated to achieve this
commitment. The analysis of delivery capability will assist in exposing
potential conflicts and reaching solutions that best meet the competing
demands on California water resources.
(3) The legislation increases the water delivery commitment from
the ROD's ``65 to 70 percent'' value to ``at least 70 percent.'' To
justify such an increase full analysis and operating experience are
necessary. At this time the Department supports operating the CVP in a
manner intended to achieve at least 65 percent to 70 percent of their
existing contract; however, this may not be possible unless land is
retired and future water supplies are developed.
(4) Also, this bill establishes a bad precedent of Congress
interfering in a state water system by legislating water deliveries to
one set of water users who may hold junior rights in the state water
system.
Environmental Water Account (EWA): The establishment and successful
operation of EWA will be one of the most significant accomplishments of
CALFED in reducing the conflicts between fisheries and water project
operators. However, we point out that the definition for the EWA, and
other restrictions in the bill to the EWA, to avoid water supply and
quality impacts as well as effects on water rights holders, is
different and more restrictive than intended as the account was
originally set up. We look forward to working with the Committee to
assure that the emphasis of the EWA in the bill is consistent with the
goals of the ROD, the Multi-Species Conservation Strategy Conservation
Agreement, and the Endangered Species Act.
We note that the Ecosystem Restoration Program (ERP) is mentioned
in connection with the Environmental Water Account and the water supply
provisions, in terms of maximizing water supply benefits and meeting
water supply assurances. While we recognize the comprehensive and
integrated nature of the CALFED program, this characterization of ERP
in the bill is different than the ROD. The Ecosystem Restoration
Program is established to focus on improving aquatic and terrestrial
habitats and natural processes to support stable populations of
valuable plant and animal species. We would like to work with the
Committee to clarify these issues.
CALFED Projects - The Bill may not provide sufficient authority to
meet the ROD commitments and maintain environmental assurances in a
timely fashion. For instance, H.R.1985 limits appropriations for fiscal
year 2002 to authorized studies, environmental review, design, and
other preconstruction and pre-acquisition activities. Finally, while
there are some existing authorities for restoration work, the potential
funding limitation placed on the Environmental Restoration Program and
the EWA in the bill, for instance, may limit the ability of fisheries
agencies to provide assurances to the projects.
Cost Sharing - One of the central components of the ROD is the
notion of 'beneficiary pays', whereby users who benefit from
investments in the infrastructure should pay for those benefits. H.R.
1985 does not explicitly mention this important principle. The ROD
contemplated the Federal Government, the State, and project
beneficiaries each sharing roughly one- third of the costs of
implementation. H.R. 1985 generally establishes a maximum Federal cost-
share of the lesser of $50 million or 35% for each project or activity,
but does not otherwise indicate how the cost-share should be
determined. We do not object to the 35%/$50 million ceiling, however,
we believe that the cost-sharing should otherwise be consistent with
current law or policies. Depending on the project purpose, under
current law local sponsors are required to provide up to 100 percent of
a project's cost (e.g., for costs allocated to municipal and industrial
water supply projects). We wish to stress the importance of clarifying
and integrating cost-sharing measures into the program. We would also
like to clarify that assignment of operation and maintenance costs will
be consistent with general policies, which in most instances means that
project beneficiaries will be responsible for operation and maintenance
expenses.
Project Authorizations and Congressional Oversight - We are also
concerned about provisions of the bill that authorize construction of
projects before they have completed the normal Administration review of
economic and environmental feasibility. Some language also circumvents
Congressional oversight of individual projects. Consistent with
longstanding policies, we believe that authorization for construction
should be provided only after the Administration and Congress have
completed a full and favorable review of a project's economic and
environmental feasibility. In addition, the Department of Justice has
informed me that the provision for committee approval of project
proposals may raise constitutionaldifficulties insofar as it could be
construed to empower congressional committees to alter the meaningof
lawfully enacted appropriations legislation. We would like to discuss
possible thresholds and processes for Congressional approval.
Implementation of the Record of Decision - Section 104(a)(1) of the
bill is unclear as to its purpose and meaning, and needs to be
clarified. It appears that it could provide an exemption from Clean
Water Act (CWA) Section 404. There is an existing statutory mechanism;
CWA Section 404(r) which is an established and well-understood
mechanism for providing Section 404 exemptions, where appropriate.
The Record of Decision states that the CALFED agencies will fulfill
their respective legal responsibilities for environmental analysis,
documentation and permitting pursuant to NEPA, and other environmental
laws, and will complete the necessary programmatic and project-specific
analysis. Section 104(a)(1) would potentially compromise this procedure
by restricting the range of alternatives that the agencies could
consider in implementation on the ROD.
Funds authorized only to the Secretary - We note that all funds are
authorized to be appropriated to the Secretary of the Interior. Since
there are a number of federal agencies involved in the effort, such as
the EPA, the Army Corps of Engineers, and others mentioned earlier,
this may limit the efficiency of their participation; we would like to
work with the Committee on language for broader allocation of
appropriations among the affected agencies.
Hydro power - Under Reclamation Law, whenever irrigation users are
unable to repay the costs associated with the construction of project
features, the responsibility for these costs are reassigned to the
power users for repayment. A precept of the ROD was to avoid
``redirected impacts'' stemming from implementation. It is possible
that implementation of certain measures under the auspices of CALFED
may decrease the total Hydro power generation available, raising costs
to power users. This would be a burden added to any reassigned costs
and arguably a redirected impact. This potential impact is not
addressed by the bill. We would like to see greater clarification of
this issue of redirected impacts, keeping in mind that the principle of
'beneficiary pays' still applies. An effort to avoid redirected impacts
should generally not result in the Federal government paying for the
shortfall.
Competitive Grant Program - We are concerned about the overall
funding authorized for this program, which greatly exceeds commitments
currently envisioned.
H.R. 2404 (California Water Quality and Reliability Act of 2001)
H.R. 2404, introduced by Mr. Miller, also seeks to authorize CALFED
programs for implementation. We have a few observations about that
bill.
benefits of h.r. 2404
Increased Water Supply Reliability - The bill attempts to support
the CALFED commitment for increased water supply reliability.
Governance and Coordination Authority - The authorizing language
provides for continued Federal participation in the CALFED Bay-Delta
Program while requiring the Secretary, in conjunction with the State of
California and other federal agencies, to develop jointly and submit to
Congress a proposal for long-term governance empowering a Governance
Board with decision-making authority and management oversight as
outlined in the CALFED Record of Decision (ROD).
Energy Consumption - H.R. 2404 specifically states that an
objective of the Water Supply Program will be to identify seasonal and
annual estimations of project energy costs. In light of the energy
crisis within the State, specific recognition of the required analysis
is important.
Concerns with H.R. 2404 - Below are some of our concerns with the
bill.
Focus only on Interior - H.R. 2404 should more inclusively
recognize the roles of non-Interior agencies participating in CALFED.
The partnership of federal and state agencies is a major strength of
CALFED.
CALFED Projects - The bill tries to address some, but not all, site
specific water supply infrastructure feasibility studies relative to
Stage I of the ROD. The bill's language seems to imply that regional
solutions will be the primary method of increasing water supply
reliability, and while they will be important elements, they alone will
not be able to accomplish the larger scale objectives of the ROD. We
would like to work with you on a comprehensive approach.
Cost Sharing - H.R. 2404 is vague on cost-sharing requirements.
There is no mention of the principal of 'beneficiary pays', although
Sec. 201 (h) does mention a cap of 50% of the Federal share of
feasability and environmental studies. It does not, however, mention
how the final cost-sharing arrangement will be determined, up to the
50% ceiling. Specific project authorizations mention Federal ceilings
of 25% for particular projects, but it is not clear whether this policy
of 25% should be broadly applied to other CALFED projects. We wish to
stress the importance of clarifying and integrating cost-sharing
measures into the program.
We are pleased to see that the bill states, in accordance with
general policy and with respect to specific project authorizations,
that the Federal government will not be responsible for funding
operation and maintenance costs of completed projects.
Pumping Reductions - The authorizing language establishes as a
matter of Federal Policy, the objective of reducing, by the year 2020,
the maximum annual quantity of water pumped each year for consumptive
uses from the Harvey O. Banks and Tracy Pumping Plants. It must be
noted that the Harvey O. Banks Pumping Plant is a State facility, the
language essentially provides overriding Federal policy to a State
facility. The objective of reducing by 2020 the maximum annual quantity
from Banks and Tracy pumping Plants seems to conflict with water supply
reliability objectives in the CALFED ROD. Conjunctive use projects
which provide supplies for the EWA as well as water users rely on
exports at some point in time. The goal is to export water when the
environmental impacts are minimized rather than simply reduce annual
exports.
Environmental Water Account - H.R. 2404 seems to authorize the
Environmental Water Account (EWA) as a long-term program; however, in
the CALFED ROD it was outlined as a 4-year pilot study to be used in
effect until such time as increased water supply flexibility was
secured and such increased supply could be used specifically for the
purposes of the EWA .
Water Recycling and Reuse - The bill would provide authority for an
extensive list of new projects for which the Department requires
further detailed justification. For this reason, we must withhold our
support at this time.
Environmental Restoration Program - The authorizing language
specifically states, AThe Secretary shall carry out the environmental
restoration program in a manner that will meet performance objectives
for attaining self-sustaining fish and wildlife populations within
watersheds of the Sacramento and San Joaquin Rivers within 10 years
after the date of the enactment of this Act. This objective may not be
attainable within the mandated timeframe.
Conclusion - CALFED (Title I of H.R. 1985, and H.R. 2404)
The history of the settlement of California and the ensuing
development of its water resources is replete with political and legal
battles. Although agreement on water management may not be immediately
achievable, the CALFED Program is a step in reaching a common vision of
actions needed for progress. CALFED represents a new approach to an old
problem by combining the interests of state and federal agencies with
regulatory power over the Bay-Delta together with urban, environmental,
and agricultural users, who each have a vested interest in the
maintenance and improvement of the Bay-Delta. The CALFED Program has
shown water managers, policy makers and the public how to move
California toward more equitable and efficient water and ecosystem
management. Continued implementation of the CALFED plan offers the
opportunity for a long-term solution to the critical problems
confronting the Bay-Delta. Specifically, the Department will continue
to operate the Central Valley Project in accordance with the provisions
of the State's Water Quality Control Plan, Central Valley Project
Improvement Act, the Endangered Species Act, and other applicable
statutes. The Department is aware of the importance of meeting its
environmental commitments, and the importance to the water users of
adequate water supply reliability. For these reasons, the Department
will continue to work through the CALFED process to improve the
environment, and increase the system's water management flexibility.
We believe that the bill attempts to offer a balanced approach
toward implementing the ROD commitments and would allow the Federal
government sufficient authority to continue to participate in the
CALFED program. We look forward to working with the Committee and
others in Congress to address the Administration's concerns. Mr.
Chairman, I would like to reiterate my appreciation to the Committee
and others for continuing to work with the Department to address the
significant water and environmental issues facing the West.
TITLE II OF H.R. 1985 - THE SMALL RECLAMATION WATER RESOURCES ACT OF
2001.
Title II of H.R. 1985, comprises the Small Reclamation Water
Resources Act of 2001 (SRWRA). While the Administration supports
efforts to provide assistance to small non-Federal water users in
constructing and rehabilitating their irrigation water projects and in
carrying out restoration efforts, H.R. 1985 as introduced raises many
budget, implementation, and administration questions for both the
Bureau of Reclamation (Reclamation) and the Department of the Interior.
The Administration cannot support the bill at this time, but wants to
work with this subcommittee and others in Congress on these issues.
Background
Public Law 84-984 established the Small Reclamation Projects Act
loan and grant program. Authorized in 1956 when the Bureau of
Reclamation was actively engaged in the construction of large
irrigation projects, the program was designed to supplement Federal
Reclamation law by providing grants and interest-free loans to non-
Federal organizations to develop small irrigation projects costing less
than $10 million. The Act has been amended several times. In 1986,
Public Law 99-546 broadened the purposes beyond irrigation to encourage
the development of multi-purpose projects including, water and energy
conservation, environmental enhancement and water quality projects.
Public Law 99-546 also increased the authorized cost ceiling from $600
million to $1.2 billion.
The program has provided about $807 million in loans and grants to
non-Federal organizations for about 134 projects. Non-Federal entities
have contributed an additional $200 million in up-front financing.
Concerns with Title II of H.R. 1985
Title II of H.R. 1985, (SRWRA), would amend the Small Reclamation
Projects Act to authorize $1.3 billion for three new programs--a
revised and expanded grant and loan program within the Bureau of
Reclamation, a Small Reclamation Water Resources Management Partnership
Program, and a loan guarantee demonstration program.
As indicated by its support of ongoing environmental restoration
programs, as well as water reclamation and reuse under Title XVI, this
Administration is interested in workable and effective ways to protect
water quality and supply and water habitats. However, a number of
specific matters in Title II of H.R. 1985 would need to be addressed
before this Administration could provide its support of a specific
proposal. The following points are raised for discussion purposes, but
they do not constitute an exhaustive list of concerns.
SRWRA is very costly and will compete with other Department of the
Interior programs for funds, thereby raising questions of fiscal
priorities. In addition, existing Federal programs may address project
purposes of concern in this bill.
SRWRA would expand Reclamation's work outside of the 17 Western
states it traditionally covers. (We note that Hawaii was added to the
jurisdiction of the program in 1960, but this bill extends jurisdiction
further.) This raises budgetary concerns in undertaking new
responsibilities while staffing new offices.
SRWRA would need to be modified to be consistent with the Federal
Credit Reform Act and Federal credit policy. Also, there is concern
about the Secretary of the Interior setting interest rates on loans,
where customary practice has been to have interest rates for direct
loan programs set by reference to a benchmark interest rate on
marketable Treasury securities with a similar maturity to the direct
loans being made.
More generally, the bill's time frames do not mesh with budget
procedures. The time frames are too tight and should provide more
flexibility.
Under the proposed grant and loan program, an applicant would be
required to include in a proposal a plan and estimate of costs
comparable to those included in preauthorization reports for
Reclamation projects. At a minimum, this section should require an
economic assessment of the project to aid in evaluating the proposal
within the one year time period.
There is a problem with the bill in that the new grant and loan
program does not specify terms and conditions. The program should
specify terms and conditions to accurately reflect Federal credit
program standards and principles as promulgated in OMB Circular No. A-
129, ``Policies for Federal Credit Programs and Non-Tax Receivables.''
Title III of the SRWRA would establish a six-year-long loan
guarantee demonstration program within the Bureau of Reclamation for
projects receiving or eligible to receive loans or grants under either
of the two new programs in Title I or Title II of the Act. Title III
would put Reclamation in the role of a commercial loan officer for
developers of a project, a role Interior's Inspector General criticized
in its 1991 audit report. This could also require Reclamation to
develop substantial capability to assess the credit-worthiness of water
districts, oversee the activities of outside lenders, and take
appropriate actions in case of a default.
At the very least, such a new bureaucratic infrastructure within
Reclamation would require new and significant funding and resources.
This expenditure must be assessed in the context of the Department's
priorities and existing statutory and contractual mandates.
The Administration also has a number of technical concerns with
Title II of H.R.1985.
Conclusion - the Small Reclamation Water Resources Act of 2001.
The Administration looks forward to working with the subcommittee
on these and other matters raised by the Small Reclamation Water
Resources Act of 2001.
Thank you for the opportunity to present the Administration's views
on H.R. 1985. I would be pleased to answer any questions you may have.
______
Mr. Calvert. I thank the Secretary.
Mr. Calvert. Mr. Hannigan, director of California
Department of Water Resources, you are recognized.
STATEMENT OF THOMAS M. HANNIGAN, DIRECTOR, CALIFORNIA
DEPARTMENT OF WATER RESOURCES, ACCOMPANIED BY PATRICK WRIGHT,
DIRECTOR, CALFED BAY-DELTA PROGRAM
Mr. Hannigan. Mr. Chairman and members, I want to thank you
for the opportunity to testify on legislation that would
reauthorize the CALFED Bay-Delta program. I want to especially
commend the Chair for his leadership and his authorship of one
of the bills that we are discussing today. I ask to submit
detailed written comments to the Subcommittee, if I may. In
addition to that, I have a letter to the Secretary from the
Governor that I would like to have submitted to the record as
well.
Mr. Calvert. Without objection.
Mr. Hannigan. Thank you. I will quickly summarize the high
points of my testimony. Now is the time to secure a stronger
commitment for Federal participation in CALFED. Governor Davis
and the California legislature have secured over $1 billion in
funding support for CALFED through the State's current budget
and our new budget that was just approved this month. CALFED
has been and must continue to be a close working partnership
between Federal and State agencies. Federal agencies play a
critical role in implementing the CALFED plan. I'd like to
offer some comments on both your bill, Mr. Chairman, and on Mr.
Miller's bill. While different, they both represent an effort
to move CALFED forward. With respect to H.R. 1985, we support
the overall objective of the bill, its solid framework for
reauthorization.
At the same time we have numerous concerns with various
aspects of the bill as originally introduced. As you know, we
have suggested technical and substantive amendments, many of
which you have already agreed to consider. As such, we believe
the bill, while still a work in progress, should move forward
while we work to ensure that it is fully consistent with the
ROD. Some of the areas in which we have concerns, language
concerning operation of the environmental water account,
development of a government structure and State land
acquisition, are a few examples where the bill Federalizes the
State's participation in various CALFED programs.
The scope of H.R. 1985 should be limited to Federal
agencies and its spending. Of course, we are mindful that
CALFED will not succeed without continued aggressive support
from the State of California, and we are committed to
continuing this effort. H.R. 1985 requires the Secretary of the
Interior to deliver 70 percent of the contract amount to CVP
contractors in a normal year. This approach is inconsistent
with the ROD and could precipitate a direct conflict with the
Endangered Species Act and existing water rights.
All parties need to recognize that the commitment embodied
in the ROD is clear. We have recommended language that is
consistent with the ROD and unambiguously directs Interior and
CALFED agencies to implement the tools necessary to carry out
these provisions. As I previously mentioned, your legislation
provides a solid framework for reauthorization of the program.
I am heartened by your willingness to consider many of our
suggested changes. In the weeks ahead, we look forward to
continuing the dialogue with you and your colleagues in order
to reach agreement on legislation that is consistent with the
ROD and broadly supported by the stakeholders.
H.R. 2402 extends current spending authority for CALFED
through the year 2006 and provides the Secretary of the
Interior with broad authority to implement stage one of the
Bay-Delta program. The bill emphasizes feasibility studies for
surface water storage projects, promotes groundwater storage
and management, and expands the Bureau of Reclamations Title
XVI Water Recycling Program. While the bill has some
advantages, we have several areas of concern. Section 201
creates the California Water Supply Program. One of the stated
purposes of this program is to reduce by the year 2020 the
maximum annual quantity of water pumped each year for
consumptive uses from State and Federal pumps. Such language
goes beyond the ROD and appears to be inconsistent with the
water supply goals of the ROD. Section 201(e) prohibits Federal
funds from being spent on project construction until the
Secretary finds that adequate measures are, in effect, to
conserve surface and groundwater supplies and to manage and
control the pumping of groundwater within the surface area of
the project.
What works best in California is cooperative planning and
implementation with local entities, and our recent history of
development of voluntary groundwater management plans is a more
implementable approach which would be foreclosed by the bill's
provisions. New regulatory mandates are likely to kill these
kinds of programs. Section 203 authorizes several specific
water recycling, water reuse, and water desalination
demonstration projects. While we strongly support the goals of
these projects, I am concerned that none of them have been
thoroughly reviewed by the State and Federal agencies. I urge
the Committee to provide in H.R. 1985, your bill, Mr. Chairman,
funding for these and other projects through a competitive
grants process and to ensure that Federal funds are spent only
on the highest quality, peer reviewed and cost-effective
projects. I thank you for your patience and I appreciate the
opportunity to speak.
Mr. Calvert. I thank the gentleman.
[The prepared statement of Mr. Hannigan follows:]
Statement of Thomas M. Hannigan, Director, Department of Water
Resources, State of California
Mr. Chairman and Members, thank you for the opportunity to testify
on legislation to reauthorize the CALFED Bay-Delta Program.
I want to begin by commending you, Mr. Chairman, for your
leadership on this important issue. Since you assumed the chairmanship
of this Subcommittee, you have spent many hours immersing yourself in
the wide range of complex issues surrounding CALFED. You began this
process with an open mind and a desire to fully understand and
appreciate the needs of all stakeholders. I believe that your personal
involvement, and the approach you have taken, is a healthy and
productive one.
It has been just over a year since Governor Davis and the Secretary
of Interior announced the CALFED Plan--the largest and most
comprehensive water management plan in the nation. The Plan is a
balanced approach to reduce conflicts over our limited supplies, and to
address the state's long-term water supply reliability and quality
needs. It calls for one of the nation's largest ecosystem restoration
programs, and provides specific deadlines for developing over 6 million
acre-feet of new water storage projects--the biggest investment in the
state's water infrastructure in 40 years.
The Central Valley of California includes over 80 percent of all
irrigable land in our State and provides up to 50 percent of the
Nation's fruits, nuts, and vegetables. Providing a consistent water
supply to California farmers is clearly a matter of national economic
importance. In addition, our commercial fisheries required a healthy
river and Delta ecosystem. Central Valley salmon provide more than 50
percent of the harvest from the California, Oregon, and Washington
coasts. Finally, Silicon Valley--a major engine of the national
economy--requires a firm and high quality water supply.
With the release of the ``Framework for Action'' and Record of
Decision (ROD) last summer, CALFED has shifted gears in a big way.
Planning has now taken a back seat to of implementing an ambitious,
far-reaching set of projects and programs aimed at improving water
management and restoring ecological health in the Bay-Delta system.
Given this major transition, I want to emphasize that California
alone cannot carry out the CALFED plan. Governor Gray Davis and the
California Legislature have secured over $1 billion in funding support
for CALFED through the State's budget last year and our new budget
approved this month. CALFED has been--and must continue to be--a close
working partnership between Federal and State agencies. Federal
agencies play critical roles in implementing the CALFED plan. And
federal funding is imperative for continued coordination and to
maintain the forward movement towards solving California's water
issues.
Towards this end, there are two pieces of legislation now before
you--H.R. 1985, the ``Western Water Enhancement Security Act'',
sponsored by the chairman and other members of this Subcommittee, and
H.R. 2404, the ``California Water Quality and Reliability Act of
2001'', offered by Representative Miller. Both bills, while clearly
different in scope, nevertheless represent an effort to move CALFED
forward as we move into this second year of the seven-year Stage I of
CALFED's ROD.
With respect to the Calvert bill, I want to applaud you and your
staff, Mr. Chairman, for your hard work in developing this measure. We
support the overall objective of H.R. 1985 and believe this legislation
provides a solid framework for reauthorization of the Program. At the
same time, we have numerous concerns with various aspects of the bill
as originally introduced. As you know, we have suggested technical and
substantive amendments, many of which you have already agreed to
consider. As such, we believe the bill, while still a work in progress,
should move forward while we work to ensure that it is fully consistent
with the ROD.
I would like to briefly highlight several areas of concern:
Federalization of State agency actions, programs and projects--
There are numerous provisions in H.R. 1985 that appear to constrain
State agencies, limit State control over the State Water Project, and
abrogate the State sovereign immunity to suit in federal court.
Language concerning operation of the Environmental Water Account,
development of a governance structure and state land acquisition are a
few examples where the bill federalizes the State's participation in
various CALFED programs.
Because the ROD describes CALFED as a federal-state collaboration
based on voluntary cooperation and consensus, there are major policy
and legal implications to federalizing State authority over land and
water policy, which traditionally are core elements of State
sovereignty. Therefore, the scope of H.R. 1985 should be limited to
federal agencies and spending. By saying this, we are mindful that
CALFED will not succeed without continued aggressive support from the
State of California and we are committed to continuing this support.
Guaranteed delivery to south of Delta CVP contractors--H.R. 1985
requires the Secretary of the Interior to deliver 70% of the contract
amount to CVP contractors in a normal year. In contrast, the ROD
commits CALFED agencies to take several actions to improve water supply
reliability for CVP contractors south of the Delta with the explicit
objective of increasing deliveries by 15% (up to 65-70% of contract
amounts) in a normal year. The Calvert bill would convert this estimate
to a mandate that could precipitate a direct conflict with the
Endangered Species Act and existing water rights.
While it may be tempting to mandate this target, we believe that
legislating a specific outcome with respect to water delivery will
immediately invite more litigation and gridlock. In short, the language
contained in H.R. 1985 is inconsistent with the ROD.
Having said that, let me emphasize that the delivery target in the
ROD is more than simply a provision addressing a particular group of
water users. This issue has come to represent CALFED's commitment to a
balanced program that considers the needs of all stakeholders.
All parties need to recognize that the commitment embodied in the
ROD is clear. The challenge for CALFED is carrying out that commitment.
We have recommended language that is consistent with the ROD and
unambiguously directs the Department of the Interior and the CALFED
agencies to implement the tools necessary to carry out those
provisions. It is our strong hope that the Subcommittee will take steps
to resolve this critical issue by revising the assurance section of the
Calvert bill in a manner that reflects the language of the ROD.
Mr. Chairman, consistency with the ROD represents the underlying
principle for the State of California in terms of federal authorizing
legislation. A balanced approach to implementation, where all aspects
of the program are interrelated and interdependent, is a cornerstone of
the ROD. Ecosystem restoration is dependent upon supply and
conservation. Supply is dependent upon water use and efficiency and
consistency in regulation. Water quality is dependent upon improved
conveyance, levee stability and healthy watersheds. The success of all
the elements depends on expanded and more strategically managed
storage.
At the same time, we fully realize that other elements that
transcend the ROD have been incorporated in pending legislation. Such
provisions will be examined on the basis of whether they help achieve
implementation of CALFED and whether they are consistent with the
spirit and letter of the ROD.
As I previously mentioned, your legislation provides a solid
framework for reauthorization of the Program. I am heartened by your
willingness to consider many of our suggested changes. In the weeks
ahead, we look forward to continuing the dialogue with you and your
colleagues in order to reach agreement on legislation that is
consistent with the ROD and broadly supported by stakeholders.
Let me now turn briefly to the Miller bill (H.R. 2404). This
measure extends the current spending authority for CALFED through 2006
and provides the Secretary of the Interior with broad authority to
implement Stage I of the Bay-Delta Program. H.R. 2404 emphasizes
feasibility studies for surface water storage projects, promotes
groundwater storage and management and expands the Bureau of
Reclamation's Title XVI water recycling program.
In general, the Miller bill avoids federalizing State actions and
provides maximum flexibility to federal agencies and the State of
California in designing an appropriate long-term governance structure.
On the other hand, H.R. 2404 raises several issues of concern to the
State, including the following:
California Water Supply Program--Section 201 creates the
``California Water Supply Program''. The scope of the program includes
studies for surface storage projects, research and development of water
recycling, water reuse and desalination demonstration projects, and
groundwater storage and banking demonstration projects.
One of the stated purposes of this program is to reduce, by the
year 2020, the maximum annual quantity of water pumped each year for
consumptive uses from State and federal Delta pumps. Such language goes
beyond the ROD and appears to be inconsistent with the water supply
goals of the ROD.
Restriction on expenditures for construction--Section 201(e)
prohibits federal funds from being spent on project construction until
the Secretary finds that adequate measures are in effect to conserve
surface and groundwater supplies and to manage and control the pumping
of groundwater within the service area of the project.
Although the ROD supports groundwater management at the sub-basin
level and provides incentives for curtailments on pumping, it does not
require State or Federal regulation of groundwater management. The ROD
stresses locally and regionally developed groundwater management plans
to build broad-based support for the program without imposing new
regulatory constraints. The bottom line is that this provision could
eliminate federal funding of groundwater projects or water use
efficiency projects, thereby preventing helpful projects from being
implemented in the short term.
Miscellaneous New Authorizations--Section 203 authorizes several
specific water recycling, water reuse, and water desalination
demonstration projects. While we strongly support the goals of these
projects, I am concerned that none of them have been thoroughly
reviewed by the State and Federal agencies. I urge the Committee, as
provided in H.R. 1985 (Calvert bill), to provide funding for these and
other projects through a competitive grants process to ensure that
Federal funds are spent only on the highest quality, peer-reviewed, and
cost-effective projects.
Over the next few weeks and months, this Subcommittee will be in a
pivotal position to determine the future of the CALFED Program. I look
forward to working with you, your colleagues and the stakeholder
community in a cooperative and constructive fashion to produce a
legislative proposal that does three things: 1) provides consistency
with the ROD, 2) propels the CALFED Program forward in a balanced,
comprehensive manner, and 3) provides the necessary financial and
administrative tools for Federal agencies to play a strong partnership
role with the State of California in carrying out the Program.
Thank you, Mr. Chairman. I would be pleased to answer any questions
you may have.
______
Mr. Calvert. Secretary Norton, again thank you for coming
out today. And obviously, we have a little bit of a water
crisis, not a little bit, a substantial water crisis already in
California and Southern Oregon in Klamath, and some of us are
looking at that as the canary in the mine as far as the west is
concerned and water. Do you think there is a correlation
between what is happening there and what can occur without
implementation of H.R. 1985?
Secretary Norton. Mr. Chairman, I think there are a number
of unfortunate correlations that are possible. First of all, I
think with the Klamath area, we had some problems in terms of
facing a situation without enough time to really do the advance
work that needs to be done. I think with these kinds of long-
term things, with these kinds of problems, with water problems
generally, we need to do a lot of long-term planning. We have
to stretch the water and find ways of meeting the environmental
needs as well as the agricultural needs. I appreciate the
opportunity to work with Congressman Walden a lot on trying to
find ways to resolve this problem, but we don't want to end up
in these kinds of crises in the future, and I think what this
shows is that throughout the west we have the potential of
these kinds of problems occurring as we have more and more
demand for finite water supplies.
Mr. Calvert. I recently came back--one of the hearings we
had was in Salt Lake City and Grace was there, and a number of
Members were there to talk to our friends in the upper basin
States and States that are served by the Colorado River, and
every one of them, every one of them, said that the biggest
need is to get California to work within its 4.4 million acre
allocation that we, in their mind, overdraft the Colorado
River, and we need to do that based upon our agreement within
15 years. And as you already know, the city of Los Angeles has
met court challenges in the Owens Valley and others in Mono
Lake.
We have lot some additional water in the Trinity River
decision, and so we see water supplies not what we would like
them to be, and part of this legislation moves toward trying to
get Federal participation in building additional water supplies
in California, in all of California through a governance
mechanism, which I am going to go into with Mr. Hannigan. But
are you supportive of that and do you believe you can work with
us to get these projects moving to add to California's water
security which, by the way, is the entire western United States
water security?
Secretary Norton. As a former elected official in Colorado,
I am certainly familiar with the Colorado River issues and the
difficulties we have in trying to meet the needs of all of the
western States, and I think whatever we can do within each of
those States to try to look at wise use of water, to try to
make sure that water resources are allocated in a way that we
can serve the needs of the States makes a lot of sense.
Mr. Calvert. Well, we are certainly going to need your help
in doing that, and certainly the administration, in moving this
legislation and those types of water projects forward. I don't
see anybody who objects to that even on this dais as far as
that section of the bill. But certainly, these are necessary in
order for us to meet future water security.
Mr. Hannigan, you mentioned how these projects are going to
be funded and which projects are going to be funded. We have a
process, a governance process, as you read in the bill, that
would be approved within a year. We don't exactly state what
that process is going to be. We want to work with the State of
California, the elected officials, the stakeholders, certainly
this Committee, to work out a fair methodology to put together
a governance Committee which would, in fact, be able to pick
these projects in a fair and equitable way. Are you supportive
of that type of process?
Mr. Hannigan. We are supportive, Mr. Chairman. I might
comment that we came close to having a governance resolved a
year ago at the end of the legislative session, and for a
variety of small issues, we didn't succeed. Recently in the
State Senate, Senator Jim Costa, who has been very active in
these issues, has held at least one hearing and intends to hold
additional hearings, and the goal is to provide a government
solution in California this time next year.
Mr. Calvert. I met with the Senator and hope to met meet
with him again soon to talk about that subject.
Mr. Hannigan. Good.
Mr. Calvert. Mr. Miller?
Mr. Miller. Thank you very much and thank you both for your
testimony. I stand corrected on the Harvey Bank's Pumping
Station. We won't federalize that, Tom and Madam Secretary.
On the issue of cost sharing, I want to comment, Madam
Secretary, that you are upholding the idea of the beneficiary
page as does the ROD and this was obviously a matter of great
contention through this entire process. Again, it's something
that I think is very important and has to be applied because
once again, not only at the end of the feasibility study,
certainly on the surface storage, at some point we are going to
have to figure out how we allocate that, and there are
obviously many options.
Whether it is to the benefit of the full project or whether
it is to Fish and Wildlife or to specific beneficiaries, at
some point, I think those costs have to be allocated, and I
think it's an important component if we are going to again go
to the--to our colleagues in the Congress and tell them that we
need a couple of billion dollars to do this. We are going to
show them that, in fact, people are going to be prepared to pay
for those benefits.
So I appreciate your position on that. And to both of you,
I appreciate your position on the water assurances. Because I
think it is--certainly I have crossed this and I think it is an
important part of the ROD, the question of whether or not we
are going to try to fill the commitments to the agricultural
water users as specified in the ROD, and that is the goal in
this process, but to lock that in in a statutory fashion, as
you point out, can quickly throw us into noncompliance on
another part of this puzzle we are trying to work out, which
obviously deals with clean water and endangered species, and
whether or not we can build a flexibility in the system to meet
that on an annual basis not knowing the rainfall and snow pack
and demands are going to be from year to year.
I think there are analogous situations with Klamath. I
mean, this is a system where the big guys got there first based
upon political considerations that were perfectly legitimate at
the time. We are now spending billions of dollars trying to
reconfigure this project so it can meet the needs of a modern
California, and those obviously today are different
stakeholders and were present in the days of the creation of
these projects, but that is true of the Central Arizona
Project, of the Central Utah project, of the Garrison--all of
these had to be reconfigured because the first takings were
taken based upon political power. We didn't have the Endangered
Species Act, we didn't have NEPA, we didn't have an
environmental movement in the country in those times, and so
you went with political power and you took the river and
controlled it.
Now we are in the process of going back and redoing that.
And so these components, this flexibility--and we should not
repeat the mistakes of the past which is then now to lock in
water that we may or may not be able to meet and then end up
with some kind of financial burden or litigation or all of
these things combined together, when, in fact, what we do know
we need is we need to try to meet the multifaceted components
of the California economy and its environment, and I think that
is the commitment of the ROD.
I think that is the commitment of the parties to the CALFED
process, and I think that is hopefully what we can work out,
but I think your comments have been very helpful in the sense
that those are big hurdles to the integrity of the ROD and we
should not be dipping in here on a statutory basis to pick out
winners or losers of people who disagree with the ROD. We have
a near consensus on the ROD. We always will have some dissent,
but it is what has enabled us to come to the Congress in the
name of the State and try to secure the funding for these
programs.
So I think that your remarks have been very helpful. And,
Tom, if I might just ask you one question on groundwater
management, you disagree sort of with what we do, and I
appreciate the controversy in the State about this, but at some
point, we have got to have a credible groundwater management
program.
Mr. Hannigan. As you know, we have currently a voluntary
groundwater management program and more and more areas of the
State are utilizing that effort because they recognize that
modern water management strategies depend a lot on groundwater,
storage, you know, where basins have been overdrafted need to
be corrected, and I don't think we are at a mandatory
groundwater management statewide program, but we are moving in
that direction.
Good water management, resource management, suggests some
fashion of that. The strategy, political will of California has
been for ground--if you will, ground up rather than top down,
and I don't know when, but the time will come when it is time
to make that last step and do it statewide, but it is not in
the short run.
Mr. Miller. Okay.
Mr. Hannigan. Well, we all can count and--.
Mr. Miller. No. And I appreciate that, but again, we are
talking about a system that you could argue that the system is
completely oversubscribed, or you can argue that system can put
into place management systems that may allow us to get some
additional yield, and knowing what you have done in
groundwater, what you are capable of doing and who is putting
it in and who is taking it out is going to become an increasing
dynamics of whether or not there really is that flexibility,
because obviously the water has got to come from some other
place, and you are right. We can all count, but I don't think
we ought to give up on the notion that this is going to have to
become part of this system if we are going to really squeeze
the yield out that we all think is going to be necessary, and
you have been working this hard on the regional at the--at the
regional basis--.
Mr. Hannigan. We have some great examples. I mean Kern
Water Bank is one of the best examples. It has some critics,
but, in fact, it functions and it functions well, and when the
State tried to put that water bank together, they couldn't
succeed. When it was turned over to the locals, they put it
together and have made it work for a lot of reasons, some of
them political, and some of them, maybe the sources of the
water had something to do with it.
Mr. Miller. If I could make one request of the Secretary.
Madam Secretary, the Department has Southern California
Recycling Study underway, or I think it is complete. But do you
know if it is complete, and if it is complete, is there an
opportunity to get it to us, because obviously it is part of a
discussion around this legislation.
Secretary Norton. It is currently being reviewed within the
Department. I understand we are fairly far along in that
process; so we will look at that and track it down and try to
expedite that.
Mr. Miller. Because obviously that is part of this
legislative package is a discussion of some of those efforts in
the southern part of the State to deal with it. So that would
be helpful to us. Thank you very much.
Mr. Calvert. Thank you.
Mr. Radonovich.
Mr. Radonovich. Thank you, Mr. Chairman. I want to speak to
the assurance language that is in the bill and have some
questions regarding that. My original intention for the
assurance language was to prioritize human uses of the
California water, those for agriculture and urban over the
newly added environmental priorities, at least until we have
new water storage available in California so that we can indeed
have a balanced approach for our water. But somehow it has
turned into a little bit more of that, but I am very supportive
of and very concerned about the assurance language, and feel
that it is not morally correct to prioritize environment over
human needs, ag and urban needs, in a situation like this. So I
have some real problems with the priorities that are in the
California water policy so far. And I hope to see the assurance
language in effect.
Now it was mentioned--Mr. Hannigan, you had mentioned that
it is so difficult to do without jeopardizing existing water
rights or the Endangered Species Act. So I guess my question
will go to the flexibility that you may have, or that the
Department of Interior may have, in the implementation of the
Endangered Species Act in order to correct what I see is a flaw
in this, and at least give ag and urban water use a priority
until we can increase water storage.
And before you answer that, I want to cite an incidence
that happened here in Washington, which kind of speaks to the
uneven application of this law and the subjective nature of the
Endangered Species Act. It has come to my attention that on
this project on the Wilson Bridge which is the connecting of
the Beltway that crosses the Potomac, the bridge is in
desperate need of repair, in their biological surveys and
assessments of this thing, there is an endangered sturgeon
there that they have come to the conclusion that if they would
just blow up the clambeds, which are the feeding areas of the
sturgeon, that that will make sure that the sturgeon is not
there when they are constructing the bridge.
Now, my friend from Oregon would love that kind of
assessment of the Endangered Species Act in project
development. There is also another project on the Washington
Aqueduct. This is where the group that clarifies the drinking
water for the city of Washington, the water we drink here. They
dumped alum in there, which is a fining agent and then, because
over the protests of some members who didn't want the byproduct
of that, which is a sludge trucked out of their neighborhoods
in dump trucks, they've chosen to dump it into the Potomac
River, which is right in the breeding grounds of this
endangered sturgeon.
Now, if you can have variation from the Endangered Species
Act in a case like this. It seems to me that at least in
California, until we have increased water supply, you can
certainly make some variation of the Endangered Species Act to
make sure there is an assurance of deliveries for human needs
until we get more supply, and I would like to get a response
from that.
Secretary Norton. I am not familiar with those situations.
It is our intention to have a uniformed application of the
Endangered Species Act across the country, and it is an Act
that does not allow very much flexibility as we well know.
Mr. Radonovich. And I would love for you to become familiar
with both of those projects, because it is in lawsuit and in
court right now, and they are very solid cases. The evidence
they have for both of these things is very apparent which seems
to me that you can choose to apply the Endangered Species Act
pretty much where you want to, and if it is good enough for the
people on the Potomac and here in Georgetown, I want that
flexibility for the people in California and I think if we have
examples like that in this country, then I would demand that
you take care of the human needs before the environmental
needs, and I just think it is morally the right thing to do in
California.
Secretary Norton. What we are trying to do is find ways of
achieving flexibility of having long-term planning so that we
can meet the needs of both the environment and the human side.
Mr. Radonovich. On a long term--.
Secretary Norton. That is definite what we want to try to
do, both through CALFED and other--.
Mr. Radonovich. Let me ask the question this way, because
if there is the assurance language in there that basically
states no water will be taken from any other water agency in
California, that puts the burden on the environmental water
supply, do think there is then flexibility in the Endangered
Species Act and the laws that implement those in California to
make sure that the assurance language is upheld and no water
comes from water agencies? And I would like to ask that of both
of you, if I may.
Secretary Norton. I would have to look at this more
closely. The Endangered Species Act is one that is always
subject to litigation, and it is something where we would need
to look very closely at this. It is important that we preserve
the endangered species and that we take the action necessary
for that. What we would like to do is to see that this process
would allow us to have the flexibility to meet all of the
needs.
Mr. Radonovich. Okay. Mr. Hannigan.
Mr. Hannigan. Yes, Mr. Radonovich. I think the ROD
represents a more positive solution to this conflict between
the ESA and water uses. The environmental water account is
structured for that reason. It's a 4-year experiment. It
acquires water paid for by both State and Federal funds to
replace what would otherwise be regulatory takes.
Mr. Radonovich. I am not sure you are answering the
question. I want to say the question again, and that is, if the
assurance language is included in the bill, do you believe that
there is enough flexibility within the administration and
Endangered Species Act to make sure that does not come from
water agencies, rather it comes from the--.
Mr. Hannigan. The EWA is how you mitigate the water not
coming from the water agencies.
Mr. Radonovich. So you are saying yes--.
Mr. Hannigan. What would otherwise be a take under a
biological opinion, the Environmental Water Account resources
or assets pay for that take. It worked this year. It has got 1
year under its belt. We didn't experience any takes on the
State project, neither did the Central Valley project. As long
as we provided the water and, you know, it is an--.
Mr. Radonovich. The answer would be yes, that you could
assure if the assurance language is in--.
Mr. Hannigan. As long as we provide the assets, as long as
the State and Federal Government provides the EWA assets, that
is what the ROD is all about.
Mr. Radonovich. So the answer to my question then is yes?
Mr. Hannigan. Yes.
Mr. Calvert. We have a vote, one vote on the rule, but we
can probably have some time--Mrs. Napolitano, you were the next
person in the room. We can ask a round of questions and recess
for a few minutes and come right back. You were here first, but
I can ask Mr. DeFazio--.
Mr. DeFazio. Thank you, because I think the Californians
will hang in longer than I will.
Madam Secretary, I am certain Mr. Walden will follow up on
his questions. But you are obviously familiar with the
situation in the Klamath and recently we found some additional
water that you released or is being released at this moment. So
far we have had Representative Walden introduce legislation
last year to study additional storage in the area, which I
supported. He has introduced legislation in this Congress to
study a removal of a dam in the Lower Sprague River which could
provide for enhanced habitat for spawning for the sucker fish
and water quality in upper Klamath Lake.
Greg just shared with me something that Mike Thompson is
proposing as part of the agriculture bill, which would go to
some enhanced use of the Conservation Reserve Program for the
farmers in that area to provide some relief. We have some
emergency relief which has been in the supplemental for the
farmers in that area.
We also have the Bureau of Indian Affairs involved because
we have substantial claims by the tribes to water rights. We
have got the State water rights adjudication issue that is
problematic in Oregon. The Bureau of Reclamation is obviously a
principal; is your Department or someone else in the
administration going to take the lead, try to draw all these
strings together and come forward with a proactive approach?
Because I don't think there is any one big solution out there,
one simple thing we can look at other than making it rain and
snow that is going to resolve this issue. Is there discussion
of that? Is there discussion of that, some prospect of that
forthcoming?
Secretary Norton. We have been discussing it on a daily
basis, and even an hourly basis at times. Within my Department,
we have within my immediate office, we are directly involved as
well as within the Bureaus. The Department of Agriculture, I
have talked with Secretary Veneman. She has top level people
who are involved in that, and so we are working through a
mediation process right now to put on the table a variety of
different options to work with the locals, to work among the
Federal agencies trying to find creative solutions to it. We
are also talking with private sector organizations. So we are
really trying to look across the board at what can be done
creatively in the short term and the long term to deal with the
problems in that area.
Secretary Norton. So we are really trying to look across
the board at what can be done creatively in the short term and
the long term to deal with the problems in that area.
Mr. DeFazio. Private sector in terms of a possibility for
some buying of land or buyouts.
Secretary Norton. Yes.
Mr. DeFazio. Well, I guess my observation would be--I think
Representatives doing yeoman's work, we want to agree on
possibly all the solutions. I just think this is so big and it
involves different parts of Federal Government jurisdiction and
tribal issues and State issues, that there needs to be almost
like a task force formally set up within the administration to
come forward perhaps with a comprehensive proposal. And it is
probably going to cost money and hopefully we can find that. So
anything you can do to enhance that, I appreciate it.
Secretary Norton. Sue Ellen Wooldridge is my deputy chief
of staff. She is from California and she has been working on
this project for several months and spending a lot of time
there and in negotiation sessions. She is going to be working
with each of the individuals, assistant secretaries and bureau
heads, that are involved in the Department of Agriculture. I
believe it is the deputy secretary who is now becoming
personally involved in this. And so at very high levels of our
Department, we are working to really try to find some
comprehensive approaches for solutions there.
Mr. DeFazio. Thank you.
Mr. Calvert. We will be in for a few minutes. And be
patient with us, we will be right back.
[Recess.]
Mr. Calvert. Meeting will come to order. We expect several
members here shortly, but in the meantime I have one or two
questions. During Senator Feinstein's hearing last week, she
had asked that some of the water users, I think specifically
Frye and Westland, sit down with the State and try to work out
some accommodation on language. And I think she asked for an
abbreviated time frame of 48 hours. I was wondering what was
the outcome, if any, of that.
Mr. Hannigan. Mr. Chairman, I am going to let Director
Wright respond to that, because he was directly involved in
that effort.
Mr. Wright. Thank you, I think. Yes, the Senator did ask us
to see if we could reach agreement on the so-called West Side
Assurances issue. We did have several meetings and discussions
with the folks on the West Side, the environmental community,
and we were not able to reach a consensus. It is one of these
issues where to try and craft language apart from the entirety
of the ROD, that suggests the kind of intent, strong
commitment, et cetera, that the plan tried to emphasize without
making it a legal commitment was very, very difficult. So we
were not entirely successful in that.
In the meanwhile, the State side has redoubled its efforts.
And I am hearing similar expressions of interest on the Federal
side to begin working even more seriously on this issue
administratively. In fact, the Governor sent a letter, I
understand, to Secretary Norton, urging her leadership and the
Department of Interior's leadership in working with the State
to increase the confidence level of the stakeholders and the
agencies that the CALFED program and agencies fully intend to
meet that ROD commitment, to do everything we can to hopefully
reduce the level of anxiety that exists out there over the
program's commitment to move forward.
Mr. Calvert. And that is the point, Madam Secretary, that
obviously from testimony today you have heard that one of the
sticking points in all of this with many members, and certainly
that region, is that very issue. Any assistance that you can
give us in resolving that would be very much appreciated. Any
comments?
Secretary Norton. I would be happy to work on that. I
understand we are starting with a situation where we had
contracted for 100 percent, and for a long time we are
supplying very high levels of water, and that things have
changed and that we are now trying to meet the needs of some of
those agricultural areas.
And so we want to work to see what we can do to provide
assurances, but we do not want to make empty promises. We want
to make sure whatever we commit to is what we really can
deliver.
Mr. Calvert. One last question to you, Madam Secretary. The
whole issue of the drain there in the Westlands, I know that
your assistant Sue Ellen has been working on that. I was
wondering if that is coming any closer to some successful
resolution.
Secretary Norton. We are still in the process of working
through settlement negotiations. Those do seem to be going well
and it seems to be hopeful, but we do not have anything
resolved at this point.
Mr. Calvert. As you know, we intend to do a Subcommittee
mark on H.R. 1985 when we return from the August recess and
full Committee mark in the same week or shortly thereafter. So
any resolution to any of these issues would be very helpful.
Mr. Hannigan. Mr. Chairman, before you recessed, I was
asked by Mr. Radanovich about assurances if there were ESA
guarantees--I forget exactly how it was phrased. Would I be
supportive of assurances? And I think I have provided some
confusion. The assurances I referred to were the assurances
that there wouldn't be takes from the projects for biological
opinions. I think what you were referring to were assurances of
the 65 to 70 percent water deliveries, which could not be
linked to that effort.
Mr. Radanovich. My question was if the assurance language
was in the bill and it became law, could you assure me, then,
that any water demand generated from that would not come from
any other agencies--any other water agencies?
Mr. Hannigan. The assurance language in what respect?
Mr. Radanovich. In the assurance language that is in this
bill, 1985.
Mr. Hannigan. Assurances of the 65 to 70 percent?
Mr. Radanovich. Right. If that was in the bill and became
law and you were responsible for administering that law, if a
shortage came up, could you assure me that it would not come
from any other water agency? Because that is the basis of the
assurance language, is the guarantee of 65 percent to Westlands
without taking any water from any other water agency.
Mr. Hannigan. If that were the law? I wouldn't have any
choice, but it would be very difficult.
Mr. Calvert. One thing in this issue is the environmental
water account. And that has been brought up on occasion. And
there seems to be different perceptions on what that means. By
many people's perceptions, it means that the environmental
water account would be prioritized for endangered species. And
other people believe it is for any number of remedies. Could
you, maybe both you and the Secretary, define what you believe
that the priority for the environmental water account should
be?
Secretary Norton. Well, I generally was very pleased to
learn about the idea of the environmental water accounts. And I
am speaking more at the conceptual level. Maybe some other
people could provide you information on it and the details of
it and we can provide that later if you like.
I think the approach is basically to have a thought process
go into environmental water releases in the same way that we
have a thought process that goes into agricultural and
municipal uses of water, which is that you need to think about
the timing of your use of water. You need to think what are the
priorities. The person who is in charge of administering the
environmental water account needs to think about what within
the environmental area are the most important needs. And so it
provides predictability for everyone else within the system and
helps us avoid some of the conflicts that really cause problems
within endangered species and so forth.
In terms of whether it is just avoiding jeopardy or whether
it is for broader uses, we would like to get ahead of the curve
and not have species always endangered so that we have to kick
into the gear that we saw in Klamath. We would like to recover
species and to actually have the species recover so that we no
longer have to be operating within the framework of the
Endangered Species Act.
Mr. Calvert. The only reason I bring that up is because
many people that I have talked to that were in the negotiation
in the environmental water account believe, and still believe,
that the intent of that was--its first and only priority was
endangered species; to protect those species and not be used
for a variety of remedies which allegedly that account is being
used for. And so that would divert water from other purposes
that we are discussing here that puts farmers, obviously, in a
worse position than they are already in. So it is something
that we need to continue to work on as we move this
legislation.
Mr. Radanovich. If I may add, the way that the assurance
language is written in the bill, again would require that to
provide that assurance for any water agency in the State that
it can't be taken from any other water agency in the State,
which puts the burden on how you administer the Endangered
Species Act and the CVPIA in order to fulfill that role. The
water is going to have to come from the environment to fit that
need. And what I want to make sure is to be able to hear from
you that you feel that you have enough flexibility
administratively to make that happen.
Secretary Norton. And let me get back to you with some more
clarification on that.
Mr. Radanovich. If you could, that would be excellent. I
would appreciate that from Mr. Hannigan as well.
Mr. Hannigan. The assurance language in the bill currently
I believe is not consistent with the ROD. And you know, if that
were to become law, we would have a real dilemma because the
way you frame the question, it is the endangered species that
would take the hit, if you will. No other water agency can take
the hit--.
Mr. Radanovich. But there is a lot of administrative
flexibility that you have. So my question is, can you make up
that difference with the administrative flexibility that you
have under that law? I mean, those are the choices you have to
make if this assurance--the language becomes law.
Mr. Hannigan. I don't know. I don't think so as it is
drafted currently.
Mr. Calvert. Continuing conversation. Mrs. Napolitano?
Mrs. Napolitano. Thank you, Mr. Chair. And it is nice to
see my colleague Tom Hannigan working with us on a real
important issue. And Mr. Chair, thank you allowing me to attend
your three hearings which are very informative and very
helpful.
Being from southern California, we found during my
legislative years that we ended up being on the lower end of
the totem pole when it came to water allocations. And it always
frustrated me because it was something that--and it was kind of
good because it forced the Californians to go into new
methodology such as water recycling and some other areas.
I am thankful for your testimony because it tells me that
your administration is very key in helping resolve some of
those issues and engaging Californians in water issues.
Agencies have spent million of dollars in the past decade in
promoting effective recycling, groundwater recovery, and other
conservative methods. And I certainly would want to extend an
invitation for you to come and visit some of our facilities to
see what we have done, and hopefully be able to get some
additional input from you and us working together on those
areas. I am hoping that the administration is prepared to work
with us to continue some of these very important programs,
because some of my colleagues in hearings have alluded to the
fact that we have invented the wheel, and do not want to have
to reinvent it so they can replicate some of those conservation
programs in their own States.
So it is really very effective for us, very important,
since we have kind of taken the lead in many of those areas.
But I certainly would like to extend the invitation on behalf
of the California delegation.
And I have long been of the opinion that while my
colleagues focus a lot on the technical aspect, the policy
aspects, I am more concerned with the municipal areas; how they
can get assistance in being able to deal with the issues. That
means giving them the assistance, whether technical, financial
or otherwise, so they can either expand their water
infrastructure for recycled water, to be able to not use as
much water, but be able to fill in some of the commercial/
industrial increased need, because it just keeps growing.
Somehow we don't focus on assisting the local
municipalities to be able to deal with our own issues and help
them come up with solutions so that we were then able to cut
the use of water and be able to use more of the recycled. And I
think part of that goes to EPA's recent request of sanitation
districts. And I don't know, Tom, if you are aware that
sanitation districts must now give a fourth treatment to
tertiary water before it is released into the ocean or utilized
for commercial/industrial and watering purposes. Well, that is
billions of dollars' worth of a new plant for that fourth
treatment.
And I don't know what quite brought that decision for EPA
to demand this unfunded mandate of sanitation districts. And I
think it is worth looking into because if that is the case,
then we need help for municipalities to be able to do this.
This is not just California. This will be nationwide that this
unfunded mandate will be applied to.
So if we are looking at the overall picture, we want to be
sure that we also deal with the local impact. Part of what I
have seen in some of my municipalities, which are old
municipalities, is that they have got wells that have been
contaminated and there is no way to flush them and put them
back into operation. And somehow--Ken was gracious enough to
allow us to input into the bill language that will assist in
developing assistance for the local municipalities, whatever
their local need happens to be. That is of major importance to
me.
And I am just wondering if you might have any comment of
how you would foresee the assistance coming to the local
municipalities, the users--the end users.
Secretary Norton. First of all, I appreciate the invitation
to come and learn some more about it and to see some more of
what it is that you are already doing.
One of the aspects of CALFED that makes sense is trying to
look at a comprehensive approach and try to look at both the
conservation side of things as well as the supply side. And so
I applaud the State of California for trying to get all the
California interests together to decide what makes sense for
all of your interests. So I don't know the specifics on the
programs you are talking about, but I generally think we need
to look at both conservation and supply in solving these
problems for the long term.
Mrs. Napolitano. Because most of the conservation you talk
about is major. I am talking about municipalities establishing
their own storage areas.
Mr. Hannigan. Well, Ms. Napolitano, you are absolutely
right when you focus on the local water agencies, cities and
their local needs. And the State is trying to respond to that.
There were moneys in Prop. 13, the $2 billion water bonds that
are put out on competitive bids to local municipalities and
water agencies to do exactly what you are interested in. And
probably the best example, the most sterling effort regionally
is by your Metropolitan Water District of southern California.
They are in the forefront, as you well know, on virtually every
effort to conserve and to find other means to provide more
reliability to their water needs to serve southern California,
and they assist as well as the State. They assist local
agencies in those efforts.
Mrs. Napolitano. I was looking at the Federal picture,
besides the State picture.
Thank you, Mr. Chair. I would like another round.
Mr. Calvert. Mr. Walden.
Mr. Walden. Thank you, Mr. Chair. I wanted to share with
the Secretary the headline in the Herald and News. I think one
word says it all: ``water. Norton Grants Relief for Farmers.''
I commend you for the decision that you made and your staff
made in releasing the 75,000 acre feet of water. As I said, it
is the first drop of good news we have had. And it has meant a
great deal to the people in the Klamath Basin. And I know how
much time you have put in, and your staff, in trying to find
solutions to this problem.
Secretary Norton. Well, we really appreciate being able to
work with you and with Senator Smith on this.
Mr. Walden. How closely parallel to what is going on with
this CALFED proposal to what we need to do in the Klamath
Basin? I admit at the outset, I spent more time on Klamath than
CALFED.
Secretary Norton. One of the things that I think is
attractive about CALFED is having brought together all of the
various interests, the local, State, Federal, agricultural,
environmental, to talk about solutions and to put together a
package of a balanced approach with various solutions in it.
And I think that type of negotiated approach is something that
makes a lot of sense.
Mr. Walden. And in doing this, do they have some sort of
long-range management plan that allows them some flexibility
under ESA or under some of these other laws? I know they got
like until 2015 to continue their offer to appropriate out of
the Colorado River, or at least California does.
Secretary Norton. The Colorado River is really an agreement
among the States and working through the Department of Interior
under the Colorado River Compact. So that is entirely separate.
That is not an endangered species issue.
The Endangered Species Act, as you know, is one that really
is not intended to have a lot of flexibility. It is intended to
change--it was intended to change the way in which the
government and private interests made decisions that affected
endangered species.
And so when something gets to the point of jeopardy for an
endangered species, there is not a lot of flexibility. The
biological opinions that are written are supposed to evaluate
each species and each situation independently to see how much
flexibility the biology allows. But once the biology says that
there has to be a specific line drawn, then the law itself
doesn't provide much flexibility. It is a question of what the
biology and the biological opinions lay out.
Mr. Walden. I think it will be interesting to see how these
lawsuits come out that my colleague Mr. Radanovich mentioned,
following the Wilson Bridge and the discharge of toxic waste
into America's first, I believe, heritage river, the Potomac.
And it has always troubled me that there is somewhat in the
order of 3 billion gallons of runoff, sewerage that flows into
the Anacostia and Potomac Rivers each year when it rains.
Same thing happens in Portland, 2 billion gallons of
sewerage and overflow. And yet they seem to have a decade or
more to deal with those issues. And yet my folks here in the
Klamath Basin, it is overnight, no water in order to comply
with ESA. I realize new biological opinions and so forth, but
there seems to be a disparity in the amount of time some areas
are given to work on some of these problems because it might
cost them a lot, which is the case in the Portland metropolitan
area. It would be expensive to fix it, and yet we allow the
discharge of that sewerage when it rains and overflows their
system. We allow it in the Potomac and the Anacostia. And yet
there are endangered species in both rivers.
And I am not putting this at your doorstep, but it is a
frustration that people in the Klamath Basin feel very
strongly, as you know, and something that I think we need to
pursue very aggressively in this Congress and in our agencies
to make sure there is one standard. And I don't believe you are
going to see a change in ESA until the urban areas are affected
like the rural areas have been sacrificed. Thank you.
Mr. Calvert. Mr. Otter.
Mr. Otter. Thank you very much, Mr. Chairman. I would like
to continue. Along with that, I do have a question that I think
I will eventually arrive at here. Coming from the West--I am
from Idaho--so coming from the West, especially the Basin West,
it does seem as though the Environmental Protection Agency and
the Army Corps of Engineers and all other manner of Federal
agency has declared martial law on the environment, and as a
result can suspend all manner of private property protection
and constitutional limitations to the government, because there
are lots of horror stories--and I am not going to bother you
with them, other than to note one very important thing.
And I, under the Government Reform Committee, which I also
serve on, and a couple of Subcommittees there--I too ran into
the same information that my colleagues mentioned earlier about
government polluting themselves, the Army Corps of Engineers
pumping those sumps out so that they could build the bridge
abutments, and when they were caught and eventually told not
to, they had to go to court and EPA took them to court.
The thing that really should amaze us all, and nobody
seemed to be as alarmed as much as I, was nobody went to jail.
Nobody was fined. And, in fact, to the best of the knowledge
that I have received yet, nobody lost their job.
However, I have got a big, big envelope full of stories
where some corporation, some farmer, some developer, violated
one of the laws with probably much less impact than the Army
Corps of Engineers is doing to the Potomac. Nobody went to
jail, except the farmer went to jail and the CEO went to jail
or was fined substantially. In fact, the reason why I am so
sensitive to this is I myself have been fined by the
Environmental Protection Agency and I never got to go to court.
So when I say martial law, the EPA decided who broke the law,
what the penalty was, and whether or not I was guilty. King
George, III never had it so good.
So now, having said all of that--now that I vented, Mr.
Hannigan, I noticed a year ago, you got the Record of Decision
on CALFED. You have gone forward with it. And between not only
your comments and the Record of Decision, but also some
comments that Mr. Miller made, it seems to me that everything
is referred to as 30 years. We have got a long-term plan, and
this is the first 7 years--this Record of Decision only was the
first. And in Mr. Miller's comments, there was some mention
made about user pay, which I am a big advocate of.
Is the funding for the bonding for CALFED for the entire
project a supply security? Is that under a 30-year payment
schedule? If you have to bond it--if the users or
beneficiaries--will that be 30-year bonding; because I notice
the project is for 30 years.
Mr. Hannigan. If there is a project under CALFED where
beneficiaries exist and you work out an agreement where
beneficiaries pay, the bonding structure can be a 30-year,
could be longer than 30 years. It is what the market at that
point will--.
Mr. Otter. Is that what you would suggest? Would it be 15
years maybe, 20 years?
Mr. Hannigan. I think it depends on the financial structure
and on the wherewithal of the users who are willing to pay for
the benefits. There may be beneficiaries who find another way
to finance it. There is nothing that locks in bonds.
Mr. Otter. But it is fair to say, then, in your
deliberations on the potential package that you may have to put
together, a great deal of concern is put on the beneficiaries
and those that are going to have to pay.
Mr. Hannigan. Only where there are projects where there are
benefits, water-supplied benefits. Projects that are ecosystem
restoration are not envisioned to be user-pay projects, for
example.
Mr. Otter. But in user pay projects, that would be the
philosophy?
Mr. Hannigan. That is the goal.
Mr. Otter. That brings me to a question to you, Madam
Secretary. And I appreciate very much the job you have done--
your 6 months on the job. And I have seen more of you in Idaho
than I wanted to see of your predecessor, but I very much
appreciate that.
The reason I bring this up is that we have a project in
Idaho, and it is called the Arrow Rock Dam. And the Bureau of
Reclamation has said it is going to take about 15 million bucks
to replace these valves in the bottom of the dam. And they
started the process about 3 years ago. They started collecting
the money from the beneficiaries, from the irrigators, from the
farmers, about 3 years ago. And they are a little less than
halfway there.
So far, out of the 15 million they think is going to be
required, they are at $6.9 million, because they were put on a
short leash, if you will. Fortunately, my colleague and Senator
from Idaho, Larry Craig, the senior Senator from Idaho, got a
stipulation on a bill to allow--and I can't even think what
bill it is now--but anyway, to allow for a 15-year-pay because
the farmers are, like farmers everywhere out West, in pretty
dire straits. If they have water to have crops, the crops
aren't bringing very much money. So anyway, he has put that on
the bill.
And I guess what I am asking is I hope I can get the
commitment from your Agency to work with us to--well, the
energy and water appropriations is where it is. And we still
pay--the farmers still pay, but they have got 15 years to pay
instead of that considerably shortened period of time. We are
still willing to pay our way, but we just need more time to do
it.
And I am hoping and I guess that is what my question is to
you, can I count on your folks to help us support this effort
and give us a little more time--because those valves are going
to last for a long time. And if you ever need to repossess
them, you are sure welcome to them.
Secretary Norton. I don't think we are quite ready to do
any repossessing. We are aware of that situation. We know that
there is language in the Senate appropriations bill, and not in
the House, so we need to look at it in the conference
Committee. We would be very happy to work with you. There are
some technical problems and some issues that we need to work
through. We would be happy to do that with you. And I know that
John Keys, our new head of the Bureau of Reclamation, is very
familiar with that issue.
Mr. Otter. Thank you, Mr. Chairman.
Mr. Calvert. Thank you. I want to thank this panel for your
patience and diligence through all this. And I appreciate the
panel coming back, and please come back again. We would love to
have you.
I would like to start introducing the second panel. So
start moving toward the table when you are able.
Second panel, we are joined by Mr. Ronald Gastelum, the CEO
of Metropolitan Water District; Ms. Cynthia L. Koehler, the
Legal Director for Save The Bay; Mr. David Guy, the Executive
Director of the Northern California Water Association; Mr.
William G. Luddy, Director of Labor Management, Education and
Development Fund of the United Brotherhood of Carpenters; Dr.
David L. Sunding, Director of Sustainable Resource Development
at the University of California, Berkeley; Mr. Peter Carlson,
Partner, Will & Carlson, Incorporated; Mr. Clifford W. Schulz,
Special Water Counsel for the Kern County Water Agency. All
take your seats.
Before we begin testimony, let me explain our little light
system here. We would like to limit the testimony to 5
minutes--this is a large panel--before we can get into
questions. The yellow light will come up when you have 1 minute
remaining in your testimony, and then please wrap up your
testimony. And with that, Mr. Gastelum, you are recognized for
5 minutes.
STATEMENT OF RONALD R. GASTELUM, CEO, METROPOLITAN WATER
DISTRICT OF SOUTHERN CALIFORNIA
Mr. Gastelum. Good afternoon. Thank you, Mr. Chairman, and
members of the Committee. I am pleased to be here on behalf of
the Metropolitan Water District of Southern California. I am
the Chief Executive Officer. I have submitted written testimony
for the record and, with the Chairman's permission, I would
like to submit that here.
Mr. Calvert. Without objection, so ordered.
Mr. Gastelum. I will make some brief comments. I would like
to make it clear that we are here in support of H.R. 1985 and
particularly the water quality improvements it will bring for
22 million Californians. Metropolitan Water District is a
public agency, formed in 1928. We are a regional wholesaler of
drinking water to 26 member public agencies. We are primarily
funded by local property taxes and water sales. We serve urban
southern California from the Mexican border on up to Ventura.
About a third of the water consumed in our service area is
local groundwater and recycling, about a third from the
Colorado River through a contract with the Bureau of
Reclamation, and about a third from the State water project
through a contract with the Department of Water Resources.
But we are more than an importer. We store water. We treat
water. We finance major conservation and recycling projects
with our member public agencies. We have spent or are
spending--and it is over the next 10 years--about $8 billion in
storage projects, conveyance projects, conservation projects,
recycling projects. We have what we call our integrated
resources plan, a diverse portfolio of investments in
conservation recycling, imported water, desalination,
groundwater conjunctive use. As a consequence, we are using a
comparable amount of imported water today as we did in the
1970's; yet we have added 5 million people over that time. We
are doing this through conservation, recycling and conjunctive
use.
Our basic strategy is to import water up to our full
entitlement when it is available in surplus years and be
prepared to back off in dry years. That means backing off on
the Colorado River supply and/or backing off on the State water
supply. In order to do that, we have to have the conservation
programs in place, the conveyance systems in place, the storage
in place. These are the investments that I alluded to with the
$8 million. But that is our basic strategy. We think that is a
sound public policy for urban southern California.
We also believe that that policy is very complimentary of
CALFED and of the Record of Decision. We think that the CALFED
and Record of Decision consensus process is the model for the
future. We can look at models throughout the early 1900's. In
particular, we can see successes throughout the West.
But today, as we enter this new century, we need a
different model. We are up against limitations, such as the
Endangered Species Act we talked about today. We have the
specter of global warming and the impact on our weather
patterns, that we need to be prepared for these challenges. And
so with these consensus processes and the kind of investments
you are talking about with us in CALFED, we believe that we
will be well prepared for that future.
H.R. 1985 best supports the intent of the Record of
Decision and the consensus process that made it possible.
I would also argue, for the benefit of members from outside
of California, that there are distinct benefits to other States
by CALFED. Certainly, as a user of Colorado River water from
the Colorado River, and dependent upon Colorado River water, we
are able to reduce that dependence and moderate our dependence
in proportion to our ability to rely upon the State water
project. And as we cut back on our dependence over the next 15
years, it is absolutely essential that we have CALFED projects
in place to help us make that transition.
I would close by pointing to an article that I read in USA
Today a couple of weeks ago. The headline was ``water Works.''
I fully expected to read about the Klamath situation, but
instead I read about Georgia. Georgia is going through
tremendous population increases. You have got upstream and
downstream water users who are arguing. And the tag on this is
that they recognize that the way they are going to get through
that problem is to do exactly what we are doing here in
California: building consensus, going through the scientific
analysis, and arriving at a plan that will provide regional
benefits.
So, Mr. Chairman, again, we are very much in support of
H.R. 1985 and appreciate the opportunity to be here today.
Mr. Calvert. Thank you.
[The prepared statement of Mr. Gastelum follows:]
Statement of Ronald Gastelum, Chief Executive Officer, Metropolitan
Water District Of Southern California
Chairman Calvert and Members of the Subcommittee, thank you for
this opportunity to testify regarding the authorization legislation for
the California CALFED Bay-Delta Program. My name is Ronald Gastelum. I
serve as the Chief Executive Officer of the Metropolitan Water District
of Southern California. Metropolitan provides supplemental water to the
17 million Southern Californians who rely on reliable, high quality
water supplies for their quality of life and the health of the $750
billion regional economy.
From Metropolitan's perspective, the legislation before you today
is the most important federal legislation affecting the management of
the western states environment and economy in a generation. It
implements a program that assures comprehensive achievement of regional
health, economic and environmental program objectives. It helps
preserve the largest estuary on the west coasts of North and South
America, the central stopover location for migrating waterfowl on the
Pacific Flyway and the home to 80 percent of the nation's salmon
fisheries. This legislation also ensures necessary infrastructure to
maintain high quality and reliable water supplies for our residents,
farms, and high-tech industries. These industries are the key to the
future of the west coast as America's gateway to the Pacific Rim.
Today, we are at a crossroad in the legislative process. This
subcommittee must decide which path CALFED authorizing legislation will
follow. After careful consideration of the two bills before you--
H.R.1985, the Western Water Enhancement Security Act introduced by
Chairman Calvert, and H.R.2404, the California Water Quality and
Reliability Act of 2001 introduced by Congressman George Miller--
Metropolitan urges the Subcommittee to approve H.R.1985 and advance it
through the legislative process. We do not support the advancement of
H.R.2404.
This conclusion is based on a comparative assessment of how these
proposed bills address three key types of provisions: first, governance
and the process required for further authorization and appropriation;
second, water quality provisions; and third, water supply reliability
provisions.
governance and the authorization process
The CALFED Bay-Delta Program represents a fundamental and desirable
change in the direction of water resource management in California. We
believe it provides an example for the resolution of conflicts in
similar, complex management challenges of natural resources throughout
the nation. For the first time, the CALFED Program establishes a
comprehensive, statewide approach to improve, on an equal priority
basis, ecosystem restoration and water quality and water supply. The
program creates a historically unprecedented ecosystem restoration
effort. It relies heavily on coordinated actions by local jurisdictions
throughout California to invest in local resource development,
including aggressive water conservation and reclamation efforts and
locally driven storage projects. And, the CALFED Program necessarily
includes major investments in surface and groundwater storage and
conveyance systems to improve the flexibility of the water management
system to meet environmental and economic needs.
Central to the success of this complex undertaking is the
maintenance of linkages among program elements that assure all affected
interests ``get better together.'' When state and federal political
leaders introduced the CALFED Program, they stressed that all
stakeholder interest groups must be prepared to accept the package as a
whole. To be successful, the Program could not advance the interest of
one group at the expense of others. All stakeholders found elements in
the package they would not have included unilaterally, but if the
package could be moved forward as a whole the interests of all would be
advanced. In this sense, the CALFED Program represents a consensus
package in its outcomes, but it was decidedly not the outcome of
consensus negotiations among the stakeholders. Instead, the program
required political leaders of both parties who were willing to make
tough choices, develop a fair package, and challenge the stakeholders
to come along. Mr. Chairman, we believe you are providing and must
continue to provide that kind of leadership in the Congress.
The fundamental test of governance and the authorization process
for CALFED-related actions must be the preservation of these linkages
and the ability to assure the success of the entire CALFED package.
``Cherry-Picking''--the propensity of some stakeholders and their
political champions to promote the elements of the package they like
and erect barriers to the elements they don't like--must be avoided at
all costs. Only H.R.1985 meets this fundamental test.
All three CALFED bills (including S.976 introduced by Senator
Feinstein) contain provisions requiring the establishment of a
permanent CALFED governance body. However, governance plays a key,
positive role in the authorization and appropriations process created
by H.R.1985. In H.R.1985, the state government in California must
create a broad-based Governance Board, which in turn must be approved
by the Congress before funds can be appropriated for fiscal year 2004.
The Governance Board has the responsibility to shape linked packages in
California to meet the goals of the CALFED Program and these packages
(or ``reports'') provide the basic funding vehicle in H.R.1985.
Projects seeking funding must be included by the Governance Board in
these comprehensive packages. Most of the funding in H.R.1985 goes
through a competitive grant process administered by the Governance
Board to help assure that all projects are cost-effective and
coordinated with the Program as a whole. To preserve the integrity of
the package, when the Governance Board reports return for final
authorization, the Authorizing Committees may strike, but cannot add
projects to the reports.
This type of approach is essential for the success of the CALFED
Program and is lacking in H.R.2404. Some environmental interests have
attacked S.976 because it ``preauthorizes'' selected surface storage
projects. We believe these concerns are valid--it makes little sense in
this legislation to fund projects independent of their relation to the
package as a whole and irrespective of whether feasibility and
environmental studies and financial arrangements are in place. However,
H.R.2404 is fundamentally a preauthorization bill. It selects for
special preauthorization all environmental restoration projects ``as
generally outlined in the Record of Decision'' and a long list of
selected local projects at a total federal cost of nearly $700 million.
Many of these projects have merit and would receive funding under the
more careful, competitive process of H.R.1985.
However, the selective nature of the preauthorization process in
H.R.2404 will inevitably promote the success of certain projects at the
expense of others. The vast majority of projects not favored in the
preauthorization list must go through the full Congressional
authorizing and appropriations process on a ``stand alone basis
1.'' Thus, under the preauthorization approach of H.R.2404,
some projects are certain to be approved for funding, while others face
a daunting future.
---------------------------------------------------------------------------
\1\ Section 104 of H.R.2404 provides authorization of $100 million
``for activities required to be conducted by federal agencies under the
Record of Decision that are not expressly authorized by this Act''.
These funds could presumably be used for non-preauthorized activities,
but would provide only a tiny fraction of the funds needed to fully
implement the CALFED package.
---------------------------------------------------------------------------
Preauthorization--whether to promote storage or environmental
restoration and water reclamation--is contrary to the spirit of the
CALFED Program and will undermine its success. Only H.R.1985 avoids
preauthorization. H.R.1985 provides the Governance Board with the
ability to maintain essential linkages in the CALFED Program and it
requires all projects to complete feasibility and environmental
studies, and cost sharing and financial arrangements before authorizing
funds for construction. On the basis of governance alone, H.R.1985 is
the ``key linkage'' to ensuring a collaborative effort among urban,
agricultural and environmental interest groups and should be the
legislative vehicle that moves forward to authorize the CALFED Program.
water quality
Assuring actions to substantially improve water quality is the
highest priority of Metropolitan related to CALFED authorization
legislation. As a recent Natural Heritage Institute report stated, the
intake of the State Water Project (SWP) is located at the sump of the
Central Valley and the gateway to the Pacific Ocean. The result:
agricultural drainage and seawater intrusion has resulted in source
water with the highest potential for creating carcinogenic
disinfection-by-products in the country. Yet, 22 million Californians--
17 million of them in our service area--rely on the SWP and its Delta
intake for drinking water supplies. To protect public health and assure
that California's urban water agencies can meet future drinking water
standards at a reasonable cost, source water quality in the Bay-Delta
system must be improved.
Metropolitan also relies on the Colorado River--the saltiest
surface supply used by any urban agency in the state. Despite the
inherent high salinity of the Colorado River, Metropolitan is fully
committed to maintaining a full Colorado River Aqueduct, while we
assure that California lives within its 4.4 million acre-feet allotment
of Colorado River water. To do this, Southern California water managers
must continue to aggressively implement, among other actions, water
reclamation and groundwater conjunctive use projects. Both of these
initiatives require low-salinity water. Neither can be successful
without lowering the salinity of water received through the SWP. From
the perspective of Southern California, reducing the salinity of
supplies from the Bay-Delta watershed must be a high CALFED priority.
Fortunately, CALFED represents another breakthrough because of its
commitment to water quality improvements as an equal priority to
improvements in the ecosystem and water supply reliability. The CALFED
Program includes a statewide, integrated approach to improve water
quality. Existing and new surface storage reservoirs and through-Delta
conveyance improvements are to be operated, in part, to maintain and
improve water quality. Substantial investments in source protection are
intended to keep contaminants out of water supplies before they are
introduced. The program contains commitments to help pay for new,
advanced water treatment technologies in urban areas. It promotes
innovative water exchange partnerships between urban and agricultural
areas intended to improve agricultural water supply reliability, help
restore fisheries, and significantly improve source water quality for
the urban partners. Metropolitan is actively pursuing several of these
partnerships and they hold the promise, in combination with other
actions, of meeting our water quality requirements in the CALFED
Program.
Recent proposed amendments to H.R.1985 would significantly
strengthen the bill's ability to assure improved water quality for all
Californians. Both H.R.1985 and S.976 expressly authorize so-called
``complementary actions''--that is, actions that are included in the
CALFED Program and the Record of Decision, but were not covered by the
programmatic environmental documentation. This is important for urban
water quality, because many of the complementary programs are primarily
intended to improve water quality, including the Bay-Area Blending
Program, the San Luis Bypass Project, and exchanges to improve water
quality for Southern California.
Ironically, while H.R.2404 includes the term water quality in its
title, the bill itself contains very few provisions that would
accomplish water quality improvements. H.R.2404 does not authorize
complementary actions intended to improve water quality, threatening
their success. Moreover, since no water quality improvement projects
are on the list of favored preauthorized projects, many of the
innovative approaches to improve water quality included in the Record
of Decision will face an uphill battle in obtaining adequate funds for
their implementation.
Once again, on the basis of water quality provisions, Metropolitan
urges the subcommittee to approve H.R.1985.
water supply reliability
While Metropolitan's primary interest is water quality, we are
obviously keenly interested in provisions to assure the reliability of
adequate supplies for the future health of the state's economy.
Southern California is unsurpassed in its vigorous and far-reaching
programs to better manage local supplies. We have invested more than $8
billion in aggressive water conservation and reclamation programs and
surface and groundwater storage projects. These local and regional
storage projects are central to the CALFED strategy of making water
available for storage south-of-the-Delta when natural runoff is
plentiful to enable water managers to use less and provide higher flows
for the environment during critically dry years. Together, these local
and regional actions have allowed us to significantly reduce
requirements for imported water from both the SWP and the Colorado
River during dry years. But, these investments must be accompanied by a
commitment to assure the reliability of those supply amounts upon which
we will continue to rely.
Metropolitan strongly supports those provisions of H.R.1985 that
respect the supply assurances central to the CALFED linkages. H.R.1985
protects supply reliability for the SWP, reinforces key regulatory
assurances related to the Endangered Species Act, and assures increased
access to the system during wet years to replenish south-of-the-Delta
surface and groundwater storage. Such provisions take a big step toward
assuring that California and the national economy will not face a water
crisis that would likely dwarf the current energy crisis.
In contrast, H.R.2404 contains provisions that assault the water
supply reliability of the majority of the California economy. H.R.2404
raises additional barriers to the implementation of storage projects
and improvements in conveyance. It would establish federal policy to
reduce rather than increase available supplies for the Southern
California urban economy and the San Joaquin Valley agricultural
economy. Further, H.R.2404 would require the Secretary to manage (i.e.
reduce) exports from the Delta ``to minimize the entrainment of and
harm to'' fish as determined solely by the Fish and Wildlife Service,
National Marine Fisheries Service, and the California Department of
Fish and Game. Taken to its logical conclusion, such a provision would
require severe reductions in supply and abandons the CALFED commitment
to sound science. The water supply provisions of H.R.2404 almost seem
mean-spirited. It fosters north-south conflict and would destroy the
interregional partnerships being fostered by CALFED to promote a
statewide comprehensive water management program.
conclusion
Mr. Chairman, Members of the Subcommittee, I can hardly overstate
the importance of the task before you for California's environment and
its economy, as well as the nation. To achieve the ambitious objectives
of this much-needed program, we urge you to be bold and bipartisan. Mr.
Chairman, you are to be heartily commended for the bipartisan and far-
sighted manner in which you have progressed this legislation thus far.
Metropolitan strongly supports moving H.R.1985 forward to set the stage
for the passage of legislation of historic importance to California and
the nation.
______
Mr. Calvert. Next, Ms. Cynthia Koehler, the Legal Director
for Save The Bay. You are recognized for 5 minutes.
STATEMENT OF CYNTHIA L. KOEHLER, LEGAL DIRECTOR, SAVE THE BAY
Ms. Koehler. Thank you, Mr. Chairman. Mr. Chairman and
members of the Committee, thank you for convening today's
hearing and for inviting me to testify on H.R. 2402 and 1985.
Thanks in particular to you, Chairman Calvert, and to
Congressman Miller for your leadership in introducing these
bills to support the Bay-Delta Program. We look forward to
working with the Congress, the State, and our colleagues in the
stakeholder communities as these bills move forward.
Save The Bay is a nonprofit membership organization
dedicated to the restoration and protection of the San
Francisco Bay, Delta Estuary and its watershed from the Sierra
tributaries out to the Farallones. Save The Bay has worked for
over four decades to protect this extraordinary national
resource and its native species and habitats.
Save The Bay is committed to the CALFED premise of solving
California's water supply and ecosystem problems in an
integrated fashion. We strongly support the objective of
providing more reliable supplies for our farms and cities. And
we believe it is critical as well to ensure that the ecosystem
restoration program developed in CALFED is effective and able
to achieve its objective of self-sustaining fisheries and
wildlife populations.
A review of the Bay-Delta bills pending before this
Committee raises several issues:
First, we recommend greater emphasis in the legislation on
the ecosystem restoration element of the Record of Decision. We
have recently completed a study entitled, ``putting It Back
Together: Making Ecosystem Restoration Work.'' we have in that
study looked at various large-scale ecosystem restoration
projects around the Nation, projects that this Committee is
very familiar with--the Chesapeake, the Everglades, the Great
Lakes, and the Columbia River. And we have found that these
efforts have significant lessons for the Bay-Delta Program. In
particular, it is clear that authorizing legislation needs to
be focused not only on funding and process, but on achieving
results on the ground.
The National Academy of Sciences has recently concluded a
study of wetlands mitigation, and similarly found that efforts
to achieve mitigation of wetlands restoration has failed to
meet their goals, for a variety of reasons. Specifically, what
we can learn from these experiences is that legislation can
make an enormous difference as we move forward in CALFED. We
can take from these experiences the positive things that have
come out of these programs and apply them to Bay-Delta Program
in several ways.
Specifically, we recommend that the legislation should be
expanded to include at least the following elements. These are
summarized in my written testimony and I will only go over them
very briefly:
A requirement that the restoration objectives be met within
a time certain.
Dedicated-base funding.
Assurances for the environmental water identified in the
Record of Decision.
Water supply benefits linked to achievement of restoration
objectives.
And, an independent science program to ground all aspects
of the program.
H.R. 2404 and H.R. 1985 each contain several of these
elements. And they are beginning. To ensure that we are
achieving the biological bang for our investment, additional
focus on these programs is necessary.
Second, we recommend expanding legislation to specifically
authorize the Water Use Efficiency Program discussed in the
CALFED Record of Decision. The ROD calls for a 500-million
commitment to this program over the first 4 years through a
competitive loan program not unlike that included in 1985.
Expansion of this legislation to include this program would
provide the most immediate and valuable water supply
reliability benefits to many communities, particularly
economically disadvantaged communities.
Finally, I will touch briefly on several of the issues that
have been raised in this Committee previously. We do support
provisions in H.R. 2404 giving effect to the ROD's principle
that beneficiaries should pay for major facilities from which
they receive direct benefits.
Second, with regard to the guaranteed south of the Delta
that have been discussed today, we are concerned about
elevating what is described as an anticipation in the Record of
Decision to a legally enforceable entitlement. It is not clear,
as has been pointed out, exactly where this water will come
from. And there has been pressure to reopen the Department of
Interior's decision on implementing CVPIA Section 3406(b)(2),
the 800,000-acre-foot dedication of the environment. This water
is a key part of the baseline for the Bay-Delta Program and
should remain available to the environment.
And finally, with regard to the streamline process for
1985, the Record of Decision provides that the decisions to
construct major storage projects are predicated on compliance
with environmental review and other permit requirements. We
feel that this is an appropriate condition and should be
honored in the legislation.
That concludes my summary of my written testimony. I have
provided copies to the Committee, Mr. Chairman. And if
appropriate, I would like that to be submitted for the record.
Mr. Calvert. Without objection, so ordered.
Ms. Koehler. Mr. Chairman, this concludes my remarks, and
thank you for the opportunity to provide these comments before
you today. And I would be happy to answer any of your
questions.
Mr. Calvert. Thank you.
[The prepared statement of Ms. Koehler follows:]
Statement of Cynthia Koehler, Legal Director, Save San Francisco Bay
Association
Mr. Chairman and Members, thank you for convening today's hearing
and for inviting me to testify on H.R. 1985, the Western Water
Enhancement Security Act, and H.R. 2402, the California Water Quality
and Reliability Act. Thanks in particular to Congressman Calvert and
Congressman Miller for their leadership in introducing bills to support
the Bay-Delta Program. We look forward to working with the Congress,
the State and our colleagues in the stakeholder community as these
bills move forward.
Save The Bay is a non-profit membership organization dedicated to
the restoration and protection of the San Francisco Bay, Delta Estuary
and its watershed from Sierra tributaries to the Farallones. Save The
Bay has worked for over four decades to protect this extraordinary
national resource and its native species and habitats.
The Bay-Delta Program in Context
For the last six years, Save The Bay and our colleagues in the
environmental community and fishing industries have been very active in
the CALFED Bay-Delta Program. We made this investment of time and
resources primarily because we are convinced that California must
address its ecological, water supply and water quality problems in an
integrated manner.
The CALFED Program has had a crucial advantage over prior problem
solving efforts in that it began by asking the correct questions: How
do we make water supply more reliable for farmers and cities while at
the same time restoring our key fish, wildlife and habitats? What
integrated solutions will break the cycle of crisis management by
putting our fisheries on a self-sustaining basis? What options will
provide long-term supply reliability to agriculture and cities without
debilitating conflicts with ecological health? Save The Bay remains
convinced that fully integrated solutions that put our water management
system on a compatible basis with long-term maintenance of the
ecological health of the Bay and Estuary is not only feasible, but
essential.
As you know, the Bay-Delta Program grew in part out of the December
1994 ``Bay-Delta Accord'' which represented a short-term agreement on
water quality standards and some restoration funding in order to allow
a larger and more long-term program to be developed that would provide
long-term stability for all sectors.
The Record of Decision issued last August that capped the CALFED
process was a compromise. While Save The Bay, like many others in the
environmental community, had significant reservations about the Record
of Decision, we supported it because we believe strongly that it is
time to move forward and that the ROD represented the best opportunity
to do so. However, the Record of Decision is not a wholly self-
executing document. While much of the Bay-Delta Program can, and is
being implemented by the federal and state agencies without legislative
action, many of the ROD provisions require Congressional direction and
authorization. For this reason, we support the efforts of this
Committee, and Senator Feinstein, in moving forward with Bay-Delta
legislation. However, it is essential that such legislation be
consistent with the overall promise of the Bay-Delta Program to ensure
that water supply reliability is compatible with the co-equal goal of
restoring the ecological health of the San Francisco Bay and Delta
Estuary.
Ecosystem Restoration Around The Nation
Appropriately, much of the discussion around the pending bills,
H.R. 1985 and H.R. 2404, has focused on the water supply reliability
aspect of the Bay-Delta Program. However, Save The Bay and others in
the environmental community are concerned that far less attention has
been devoted to the objective of restoring the ecological health of the
San Francisco Bay and Delta Estuary. There appears to be a widely held
view that the ecological side of the equation can be fully addressed by
generally authorizing the Ecosystem Restoration Program (ERP). However,
experience indicates that this is unlikely to be the case.
While the Bay-Delta Program is among the most ambitious, there have
been a number of other efforts to address very large scale watershed
level ecological problems. Save The Bay has recently concluded a review
entitled, Putting It Back Together: Making Ecosystem Restoration Work,
which examines several well known restoration efforts including the
Chesapeake Bay, the Columbia River, the Great Lakes, the Everglades and
others. Our goal was to determine whether these older efforts had
relevant lessons for the CALFED process.
Strikingly, the objectives for these other efforts are very similar
to CALFED's--not to return to a pre-development state of nature, but to
the contrary, to attain a modest level of sustainability for valuable
fish and wildlife and habitats in order to avoid debilitating
conflicts.
What we found, in brief, is that many people are working diligently
to solve these problems and while there have been notable successes,
many of these programs are having difficulty attaining their basic
restoration objectives. This is due to various factors discussed in our
review, but the primary issue appears to be that most of the
legislation establishing these programs was not specifically oriented
toward achieving on-the-ground results--they tend to emphasize instead
spending and process. Without question, authorization of the
restoration program is crucial; but the key seems to be long-term and
reliable funding in combination with other legislative direction. In
general, merely authorizing the restoration component of a program
without greater legislative direction is unlikely to produce the
desired restoration results on the ground, particularly with regard to
long-term sustainability of species at risk.
Based on these case studies, Save The Bay has developed a list of
the critical elements that should be included in Bay-Delta legislation
in order to ensure that the ERP objectives are in fact achieved. This
proposal has been endorsed by a number of environmental groups
including Environmental Defense and the Sierra Club. Key elements
include:
LRequirement that the restoration objectives be met within
a certain time;
LDedicated base funding for the ecosystem restoration
program;
LAssurances regarding water needed to achieve the
restoration objectives;
LWater supply benefits linked to achievement of
restoration objectives;
LIndependent science and economics to ground all aspects
of the program.
We have provided copies of Putting It Back Together to the
Subcommittee staff and have had an opportunity to talk with them about
some of these issues. We are hopeful that as the bills move forward,
they will more fully incorporate the elements necessary to ensure that
the restoration element of the Bay-Delta Program has the full
legislative support necessary to ensure that the restoration objectives
so widely shared are actually realized on the ground.
Water Use Efficiency
Another central aspect of the Bay-Delta Program that requires
additional legislative support is the water use efficiency program. The
ROD proposes a $500 million competitive grants program for water use
efficiency measures. If implemented, such a program could have almost
immediate benefits for farmers and cities and provide much needed
relief on supplies. While there is some controversy over many other
water supply reliability tools, there appears to be a strong consensus
that such a program would provide the fastest, and the most cost-
effective, water supply benefits for a large number of people.
Such a program is particularly important in its ability to also
provide significant benefits to lower income communities by providing
the resources needed to retrofit homes and small businesses with water
efficient technologies, not only lowering demand, but lowering costs as
well.
Save The Bay strongly supports the inclusion of a water use
efficiency grants program in the Bay-Delta Program authorizing
legislation.
Other Concerns
Save The Bay and thirty other environmental and fishing
organizations have previously forwarded a list of our concerns with
regard to the current version of H.R. 1985 to Members of this
Committee. These issues include:
LPre-approval process for major new water development
facilities.
LAbsence of a requirement that beneficiaries pay for
facilities.
LNew water delivery guarantees to certain water districts.
This last issue is of particular concern in light of recent
developments indicating that these water deliveries are likely to come
at the expense of water that is supposed to be set aside under the
Central Valley Improvement Act (CVPIA) for the restoration of fish,
wildlife and habitat that is to serve as the basis for the Bay-Delta
restoration effort.
This underscores that it is critical for Bay-Delta legislation to
ensure that the restoration program is able to meet its objectives and,
in particular, that there are appropriate guarantees of water for the
environment. Water diversions in the past have had unintended but
devastating impacts on California's ecosystem and fisheries. The 1955
Act authorizing the Trinity Dam, for example, expressly directed the
Department of the Interior to ``[A]dopt appropriate measures to insure
the preservation and propagation of fish and wildlife...'' P.L. 86-386.
Indeed, proponents maintained at the time that the ``Trinity Project
does not contemplate the diversion of one bucketful of water which is
necessary in this watershed.'' Trinity Journal (Feb. 23, 1952). Despite
these assurances, substantial water needed to maintain the ecosystem
was in fact diverted out of the watershed and the Trinity River's
historic fisheries were decimated as a result; salmon and steelhead
populations have been reduced by 70-90% over the last thirty-five
years.
The best way to avoid such situations, and the inevitable conflict,
is to ensure the success of the restoration program and to put water
management on a sustainable path for agriculture and cities compatible
with ecological health. This is the great promise of the CALFED Bay-
Delta Program and we believe it is one that can still be met.
Mr. Chairman, this concludes my remarks. Thank you again for the
opportunity to provide these comments. I would be happy to answer any
questions that the Committee may have.
______
Mr. Calvert. Mr. David Guy, Executive Director of the
Northern California Water Association.
STATEMENT OF DAVID GUY, EXECUTIVE DIRECTOR, NORTHERN CALIFORNIA
WATER ASSOCIATION
Mr. Guy. Thank you, Chairman Calvert, members of the
Subcommittee. My name is David Guy. I am the Executive Director
for the Northern California Water Association. Like others, I
have submitted written testimony and I would like to make that
part of the record before this Subcommittee.
Mr. Calvert. Without objection, so ordered.
Mr. Guy. The Northern California Water Association
represents nearly 70 water suppliers in the Sacramento Valley,
which, of course, is the upper or northern part of the Great
Central Valley in California. The Sacramento River and the
Feather River run through the heart of the Sacramento Valley
and, of course, are the cornerstones for both the State and
Federal projects.
The water suppliers in the Sacramento Valley rely largely
upon senior water rights and also value very much the watershed
and other area-of-origin protections that have been put in law
over the years to assure that they will have reliable water
supplies.
With that said, even this year after nearly 6 consecutive
wet years in California, there have been some folks in the
Sacramento Valley that have faced water curtailments and they
are only receiving 60 percent of their supplies.
We strongly support H.R. 1985, Chairman Calvert, and want
to work with you to advance that as quickly as possible. The
primary reason for that is we believe that H.R. 1985 really
gives rise to a lot of the things that we are trying to do in
the Sacramento Valley. Most notably, what we have been doing is
developing an integrated water resources program, much like
what Mr. Gastelum suggested for the southern California area.
In this integrated water management program, the goal is quite
simply to meet the needs within the area, watershed and county-
of-origin needs in the Sacramento Valley. And we believe that
if we can do that, we can then help meet the needs of the
environment and help meet the needs of the water users in the
rest of the State.
We can assist in that process, and I believe that H.R. 1985
does a good job of trying to do that. It wasn't many years ago,
of course, that we were having North versus South battles. And
we were saying we weren't going to work together. I think you
see a very different tenor, and we appreciate your leadership
in trying to bring us together in that manner. I think the bill
really advances that type of an effort.
More specifically, as far as the things that we believe
H.R. 1985 does to further the integrated program that we have
talked about, the Statewide water supply issues and
environmental needs that we talked about, we really need to
support and empower the regional solutions. And again, we have
offered one regional solution.
I think you will see there are a lot of regional solutions
that you have been offered up and have been well developed
throughout the State. I think we have typically seen in the
past that when you try to put a one-size-fits-all prescription
over the State of California, it has usually led to failure;
and we believe your efforts are starting to empower our
regional solutions, and we believe that is how we are going to
see water supply security in the State of California.
The second important part that we believe is the need to
provide for infrastructure needs, of course, throughout
California. And that is something that we have been negligent,
in my view, in the State in advancing, particularly with
respect to water. Every area, of course, has their
infrastructure needs that they need, and these regional
solutions will help to determine the infrastructure needs in
each part of the State.
In the Sacramento Valley, we have some infrastructure
needs, whether it be groundwater management or more visible
things such as Sites Reservoir. In our view, Sites Reservoir is
a very critical part of this integrated water management
program. And Sites will be a new type of a water project where
the Federal and State agencies will work with local partners up
in the Sacramento Valley to manage the water in this integrated
fashion and to make the system much more flexible for all of
the needs that we have talked about. We believe that Sites
Reservoir is a critical piece and needs to be part of the mix.
It was called out in the Record of Decision, and we would like
to see it fully advanced and studied and evaluated over the
next several years.
And then finally, there is the need to streamline the
regulatory process. And, of course, that is really what CALFED
is all about, was to try to bring disparate agencies of all
different kinds, Federal and State, and to bring them together
in a way where you can get some things done and that you can
focus on a venue where you can actually make some progress. And
we believe that the CALFED process makes some strides in that
direction and we believe the bill also moves in that direction.
With that said, again, I think there are some real benefits
to H.R. 1985. And it is very important in my view for the
Sacramento Valley and the water supply and environmental needs
in the Sacramento Valley. But more importantly, it really looks
at the Statewide benefits and brings people in the State
together, I believe, in a way that has not happened in the
past.
We very much look forward to working with you, Chairman
Calvert, and with Senator Feinstein and her efforts to make
this bill and her companion bill a success. Thank you.
[The prepared statement of Mr. Guy follows:]
Statement of David J. Guy, Executive Director, Northern California
Water Association
Mr. Chairman and members of the Subcommittee, my name is David Guy.
I am the Executive Director of the Northern California Water
Association (NCWA). NCWA supports H.R 1985 and strongly believes that
this legislation will help provide water and environmental security for
Northern California and the rest of the state.
NCWA is a geographically diverse organization, extending from
California's Coast Range to the Sierra Nevada foothills, and nearly 180
miles from Redding to Sacramento. Our members rely on the waters of the
Sacramento, Feather, Yuba and American Rivers, smaller tributaries and
groundwater to irrigate nearly 850,000 acres that produce every type of
food and fiber grown in the region. Many of our members also provide
water supplies to state and federal wildlife refuges, and much of this
land serves as important seasonal wetlands for migrating waterfowl,
shorebirds and other wildlife.
We welcome the opportunity to provide the Northern California
perspective on water security and to present both the opportunities and
challenges we now face. The Subcommittee's interest in California water
security is appropriate and very timely given the importance of a
successful resolution to the environmental and water supply problems in
the Sacramento San Joaquin River Delta and San Francisco Bay (Bay-
Delta). The Bay-Delta is a tremendous economic and environmental
resource to California and the nation, and there is much at stake in
how we implement the numerous ecosystem restoration and water
management actions.
For many years, the Sacramento Valley (the northern part of the
Great Central Valley) has been targeted as the primary source of water
to meet California's burgeoning demands. Water users and landowners in
the Sacramento Valley have also faced restrictions under the Endangered
Species Act (ESA), the Central Valley Project Improvement Act (CVPIA)
and other environmental restrictions. These actions have posed many
challenges for Northern California water users and their ability to
provide secure water supplies for the farms, cities and wildlife
refuges in Northern California. Rather than focus on these challenges
(which we have done and could do in painstaking detail), we believe it
is more constructive to focus on the exciting solutions that are
currently being advanced by and from within the Sacramento Valley.
These projects or programs, which will be greatly assisted by H.R.
1985, will go a long way to provide water security not only for
Northern California, but for other regions in California as well.
I would like to emphasize our keen interest in developing and then
implementing water management solutions to meet both environmental and
human needs in the Sacramento Valley and throughout California. Before
the Klamath farmers were denied water this year because of species
concerns, one of our members, the Glenn-Colusa Irrigation District
(GCID), faced a similar situation in the early 1990's when it was
ordered to cease diversions through a faulty fish screen. We now have
an opportunity to avoid and prevent future water crisisses'' through
this legislation. We therefore strongly support Chairman Calvert's and
Senator Feinstein's efforts to craft legislation to implement a
feasible and sustainable CALFED Program. In contrast, H.R. 2404 does
not have the necessary balance and comprehensive scope necessary to
achieve the objectives set forth in the CALFED process and the Record
of Decision (ROD).
AN INTEGRATED WATER MANAGEMENT PROGRAM FOR THE SACRAMENTO VALLEY WILL
IMPROVE WATER SUPPLY, QUALITY AND RELIABILITY
Northern California water users have committed to help improve
water supply reliability, water quality and environmental benefits. The
Sacramento Valley's initiative and effort to help protect salmon and
other aquatic species is unprecedented and is now recognized as one of
the most exciting and progressive voluntary salmon restoration efforts
in the United States. Today, more than a dozen NCWA members,
representing over 500,000 acres of irrigable land, have either
completed or are in various stages of developing screens to prevent
fish entrainment at their diversions. Many NCWA members have also
initiated far-reaching efforts to refurbish fish ladders, construct
siphons, remove dams, create habitat conservation plans and implement
other habitat improvement projects to enhance the environment, while at
the same time improving water supply reliability.
Additionally, NCWA and the Northern California water users have
embarked on an integrated water management program that has broad
support from water suppliers and local governments throughout the
Sacramento Valley. This integrated program includes these fish passage
improvements (fish screens and siphons), groundwater management,
evaluation of the Sites off-stream reservoir, flood protection, water
use efficiency programs, potential expanded storage in Lake Shasta,
intra-regional water transfers and exchanges, and watershed management.
(See attached map.)
During the past year this integrated program led to an
unprecedented water rights settlement among water users throughout
California. This settlement, now known as the Sacramento Valley Water
Management Agreement, and the ensuing integrated water management
program, avoided the extremely contentious Phase 8 Bay-Delta water
rights proceedings before the State Water Resources Control Board. The
parties to the agreement include NCWA, the Bureau of Reclamation (BOR),
the Department of Water Resources (DWR), the federal contractors in the
San Luis and Delta-Mendota Water Authority, the State Water
Contractors, and the Contra Costa Water District. This proceeding would
have pitted these parties from throughout the state against each other.
This integrated program will now serve as the heart of a regional
strategy for the Sacramento Valley.
The Sacramento Valley Water Management Agreement and integrated
water management program focus on meeting 100% of the water supply
demands within the Sacramento Valley during all year types, both now
and into the future. Northern California water users believe that, once
the full demands within the Sacramento Valley are met, this integrated
program will help make water supplies available for use in and beyond
the Bay-Delta to meet water quality standards, and provide for export
water users in the San Joaquin Valley, Southern California, the Central
Coast, and as assets for the Environmental Water Account (EWA) and
other environmental programs.
The parties to the agreement will, during the next five months,
prepare a joint work plan for short-term Sacramento Valley water
management projects to implement the agreement that will describe this
integrated program in more detail. Work plans on longer-term projects
will follow.
SIGNIFICANT EFFORTS ARE NOW NECESSARY TO IMPROVE WATER SECURITY FOR THE
SACRAMENTO VALLEY AND CALIFORNIA.
To improve water security for the Sacramento Valley, leadership is
now critical to empower regional solutions, provide for infrastructure
throughout California and streamline and reform the regulatory process
to accomplish these goals. These efforts are essential and are
addressed in H.R. 1985. Simply put, this forms the basis for our
support of H.R. 1985.
LEmpower a Regional Solution For the Sacramento Valley
California history has shown that solutions to water problems in
the state have typically been successful at the local and regional
level. Very few solutions fit every part of our extremely diverse
state. Put differently, there have been few instances when a top-down,
one-size-fits all, bureaucratic policy or law has helped the state or
has been implemented. Instead, California water users are now poised to
advance a series of regional solutions and local partnerships that will
serve California's needs for many years to come. The integrated program
described above is an exciting example of a regional solution for the
Sacramento Valley, but it can only be implemented with state and
federal leadership empowering local interests to take the actions
necessary for these programs to succeed. Any bureaucratic efforts to
impose top-down solutions, like past efforts, are doomed to failure and
have the potential to destroy the tremendous progress that has been
made on these regional solutions.
Like the Sacramento Valley integrated program described above,
every regional strategy will include the appropriate mix of
infrastructure needs, storage, conveyance, water transfers and
exchanges, fish passage improvements, water conservation and
efficiency, groundwater management, flood protection, watershed
management and environmental improvements. To fully empower these
regional solutions requires state and federal funding and the
regulatory streamlining necessary to implement these programs.
LProvide for Infrastructure Needs in California
The California Business Roundtable has estimated that California
must invest $90 billion on infrastructure over the next ten years in
order to meet the demands of a state growing by nearly 600,000 people a
year. Perhaps the most critical infrastructure elements include the
ability to store, convey and better manage our water resources on
behalf of cities, farms, and fish and wildlife.
To provide for these water infrastructure needs will require an
aggressive funding program to facilitate and fully empower regional
solutions. There is an important role for both Congress and the state
legislature to ensure that appropriate funding is allocated in a manner
that achieves noticeable results. It is also important that the
regional and local entities are accountable for using these funds to
implement the regional solutions in an effective and cost-efficient
manner.
H.R. 1985 recognizes the need for study and assessment of the off
stream Sites reservoir in Northern California by August 2004 as
described in the CALFED ROD. This, of course, is a positive and
essential element of H.R. 1985. It is generally recognized that the
fundamental water supply and environmental problems that currently face
California cannot be properly addressed without the addition of surface
water storage. In this context, Sites Reservoir was identified in the
CALFED ROD as a critical element which should be pursued, along with
local partners within Northern California, and that final decisions
with respect to its feasibility and authorization should be made not
later than 2004.
Sites Reservoir, when constructed, will not only add generally to
the overall state water supply but, operated in an integrated fashion,
will allow Northern California, the CVP and State Water Project to
better maximize the ability to fully utilize the full water resource
made available to them. In this context, Northern California water
users, the BOR, the DWR and other state and federal agencies executed,
as provided for in the ROD, a Memorandum of Understanding to proceed
with analysis and environmental review of the Sites Reservoir in order
to allow for decisions on final authorization by 2004.
LStreamline and Reform the Regulatory Process
With nearly 18 federal and state agencies under the respective
executive branches that dictate California water policy, it is critical
to coordinate and ultimately streamline the plethora of agencies with
jurisdiction over water resources in California.
The framework to create CALFED in June 1994 called for cooperation
and collaboration between the federal and state agencies that oversee
water in California. It is essential that these agencies continue to
work together in this manner. Over the past 7 years, CALFED has evolved
from a concept to streamline agency efforts to a massive bureaucratic
program. For CALFED to be successful as it transitions from a planning
program to an implementation agency, it must move from a top-down
bureaucratic organization to an organization that facilitates and
fosters a series of regional strategies with local control and
governance. Most notably, it must streamline the regulatory process to
assure that these programs will be implemented. Specific examples
include the facilitation of intra-regional water transfers and
exchanges and expedited permitting by the U.S. Army Corps of Engineers
and Environmental Protection Agency.
Significantly, this means that CALFED and its member agencies will
serve in a more limited, albeit more effective, role to advance water
and environmental policy in the state. It is also means that CALFED
will serve a critical role to coordinate regional strategies to ensure
that they fit together in a manner that provides statewide benefits,
and also provide a broad-based governance strategy and oversight
capability to ensure appropriate and efficient implementation of all
CALFED program elements.
Much work was done by CALFED during the last seven years in terms
of intensive environmental and engineering evaluation and in
preparation of the ROD. That progress should not be lost. As a
consequence, H.R. 1985 should clarify that the project alternative
screening process provided for in the ROD will be adhered to and that
one CALFED program element will not be treated as an alternative to
another CALFED program element. Again, among other things, this will
allow the full integration of all water supply alternatives, maximizing
the full utilization of the water resources available within the
Sacramento Valley.
______
[An attachment to Mr. Guy's statement follows:]
[GRAPHIC] [TIFF OMITTED] T4153.001
Mr. Calvert. Mr. Luddy.
STATEMENT OF WILLIAM G. LUDDY, DIRECTOR, LABOR MANAGEMENT,
EDUCATION AND DEVELOPMENT FUND, UNITED BROTHERHOOD OF
CARPENTERS
Mr. Luddy. Thank you, Mr. Chairman and members. My name is
Bill Luddy, and I am the Director of the Labor Management
Education and Development Fund for the United Brotherhood of
Carpenters and Joiners of America. I am also the Executive
Director of Carpenters/Contractors Cooperation Committee, which
is a joint labor management Committee in southern California. I
serve on the board of the California Council for Economic and
Environmental Balance, a civic business and labor coalition
working on strategies for water and other resource issues. And
I serve as vice chair of the Metropolitan Water District of
southern California where I represent the city of Los Angeles
on the metropolitan board.
First I would like to express appreciation for the
leadership and good work that Chairman Calvert has done on this
Committee. We are grateful for the Congressman's long-term
commitment to the details of water issues. I also want to
express my appreciation for the work of Representative Miller.
From my vantage point, I have concluded that most working
people in California have begun to regain confidence in the
State's economy when the electricity crisis shook their faith
in the system. We do not want to see that experience repeated
with water. I would hate to see a situation where conflicts
similar to what we have seen in the Klamath River Basin spread
across the western United States. And we do not want to see
working people in southern California lose jobs because those
of us in positions of leadership were unable to foster
consensus on water issues.
To avoid that, we need to foster self-sufficiency backed up
by an environmentally sensitive plan that thinks in terms of
decades, not years. Without that, millions of southern
California workers will be thrust into a situation of long-term
uncertainty about their economic future.
As you can imagine, my background has given me ample
experience with negotiating balanced solutions to contentious
issues. And in any negotiation, you are trying to get that
handshake across the table. You can't have a situation where
one party gets a written guarantee for what it wants while the
other party is told to hope and wait for the best. Both parties
are at the table, negotiating in good faith for their
legitimate interests, and both parties need their assurances
clearly spelled out.
In reviewing the bills before us today, it has been our
conclusion that the legislation Representative Calvert has
proposed appears to be the most comprehensive and encourages
more projects to be built both in California and the rest of
the western region, projects which we believe will lead to more
jobs and greater long-term economic stability for our State and
our region.
That is why we support the guarantees of a reliable and
safe water supply for future generations. Some would say this
is a choice between the environment and the economy. There is
much more consensus here than people realize. Metropolitan
Water District and the working men and women are interested in
water quality, which is also one of the key issues of the
environmental community. When working parents are struggling to
put food on the table, they should be able to walk to the
faucet and get a clean drink of water without worrying how to
pay for it.
When we protect the source waters of the Delta, it also
reduces treatment costs, improves health, and allows working
people to get far more usable water out of the same supply.
When we clean up southern California's underground water
supplies, it reduces dependence on northern California. When we
invest in desalinization research, it allows us to tackle
direct salinity problems that drive up costs for southern
California employers, money that could otherwise go toward
improved wages and working conditions.
Over the long run, this research points the way to
affordable ocean water desalinization. CALFED needs to
recognize the importance of water transfers that can provide
high-quality Sierra water that will reduce Metropolitan's
dependence on the Bay-Delta.
Southern California believes in water conservation and
reuse. In partnership with Metropolitan, the city of Los
Angeles has invested nearly a quarter billion dollars in
conservation programs over the past decade. One key program,
replacing water waste in toilets, has already locked in enough
lifetime savings to supply more than 3-1/2 million families for
a year.
In 1980, the population in our 6-county service area--since
1980 the population has grown from less than 12 million to 16-
1/2 million people, an increase of more than 35 percent, yet
our water deliveries have remained unchanged. We have made huge
investments in water storage. During the 1990's, we doubled our
own water storage capacity, including constructing a major
Austrian reservoir that has also produced a major nature
preserve. Those local investments did more than bring good-
paying jobs to southern California, They are a major reason why
we have been spared some of the cutbacks affecting other parts
of the West.
CALFED needs the same balanced approach. We can argue about
the virtues of specific projects, but there is water to meet
California's needs provided we can store sufficient water south
of the Delta during wet years so that we are able to better
make it through the dry years. Southern California needs a
commitment that water storage projects will be expanded and not
abandoned sometime down the road. I remind you that the failure
to solve the Bay-Delta problem will affect everyday Americans
throughout the Southwest, because we have the same situation
and the same source of supplies. We do not want to face this
crisis, and we now have an opportunity to deal with this
through this legislation.
Mr. Chairman, thank you.
Mr. Calvert. Thank you for your testimony.
[The prepared statement of Mr. Luddy follows:]
Statement of William G. Luddy, Director of the Labor Management
Education and Development Fund of the United Brotherhood of Carpenters
and Joiners of America and Executive Director of the Carpenters/
contractors Cooperation Committee
Mr. Chairman and committee members:
Thank you for having me here today. My name is Bill Luddy. I am
director of the Labor Management Education and Development Fund of the
United Brotherhood of Carpenters and Joiners of America, and also the
executive director of the Carpenters/Contractors Cooperation Committee,
a joint labor-management committee in Southern California. I also serve
on the board for the California Council for Environmental and Economic
Balance, a civic/business/labor coalition that develops strategies for
water and other issues.
I am also vice chair for the Metropolitan Water District of
Southern California, a water wholesaler that serves nearly 17 million
people. I represent the city of Los Angeles on the Metropolitan Board
of Directors
First, I would like to express appreciation for the leadership and
good work that Representative Calvert has done as chair of this
committee. We are grateful for the congressman's long-term commitment
to the details of water issues, and I also appreciate the leadership
that Representative Miller provides.
From my vantage point, I've concluded that most working people in
California had begun to regain confidence in the state's economy when
the electricity crisis badly shook their faith in the system.
I do not want to see that experience repeated with water.
I would hate to see a situation where conflicts similar to what we
see in Klamath River basin spread across the western United States. I
don't want to see working people in Southern California lose their jobs
because those of us in positions of leadership were unable to foster
consensus on water issues.
To avoid that, we need to foster self-sufficiency, backed up by an
environmentally sensitive plan that thinks in terms of decades, not
years.
Without that, millions of Southern California workers will be
thrust into a situation of long-term uncertainty about their economic
future.
As you can imagine, my background has given me ample experience
with negotiating balanced solutions to contentious issues.
And in any negotiation, if you are trying to get that handshake
across the table, you can't have a situation where one party gets
written guarantees for what it wants, while the other party is
basically told to wait and hope for the best.
Both parties are at the table negotiating in good faith for their
legitimate interests, and both parties need their assurances clearly
spelled out.
In reviewing both of the bills before us today, it has been our
conclusion that the legislation that Mr. Calvert has proposed appears
to be more comprehensive and encourages more projects to be built, both
in California and the rest of the western region.
Projects, which we believe, will lead to more jobs and greater
long-term economic stability for our state and our region. That's why
we support guarantees of a reliable and safe water supply for future
generations.
Some would frame this as a choice between the environment and the
economy.
There is much more consensus here than people realize.
Metropolitan Water District and working men and women are
interested in water quality, which is also one of the key issues of the
environmental community.
When working parents are struggling to put food on the table, they
should be able to walk to the faucet and get a clean drink of water
without worrying about how to pay for it.
When we protect the source waters of the delta, it also reduces
treatment costs, improves health and allows them to get far more
useable water out of the same supply.
When we clean up Southern California underground water supplies, it
reduces dependence on Northern California. When we invest in
desalination research, it allows us to tackle vexing salinity problems
that drive up costs for Southern California employers--money that could
otherwise go toward improved wages and working conditions. Over the
long run, this research points the way toward affordable ocean water
desalination.
CALFED needs to recognize the importance of water transfers that
can provide high-quality Sierra water that reduce Metropolitan's
dependence on the Bay Delta.
Southern California believes in water conservation and reuse. In
partnership with Metropolitan, the city of Los Angeles has invested
nearly a quarter-billion dollars in conservation programs over the past
decade. One key program--replacing water-wasting toilets--has already
locked in enough lifetime savings to supply more than 3.5 million
families for a year.
Since 1980, the population in our six-county service area has grown
from less than 12 million to 16.6 million people--an increase of more
than 35 percent. Yet our water deliveries have remained unchanged.
We've also made huge investments in water storage. During the
1990s, we doubled our own storage capacity--including a major off-
stream reservoir that also produced a major nature preserve. Those
local investments did more than bring good-paying jobs to Southern
California. They're also a major reason why we've been spared some of
the cutbacks that prevail in other parts of the west.
CALFED needs the same, balanced approach.
We can argue about the virtues of specific projects. But there is
plenty of water to meet California's needs, provided we can store
sufficient water south of the delta during wet years so that we are
better able to make it through the dry years.
Southern California needs a commitment that some water storage
projects will be expanded, and not simply ambushed down the road.
To those who might take a secret pleasure in California's travails,
I would remind them that the failure to solve the Bay-Delta problems
will affect everyday Americans throughout the southwest, because it
will reduce California's ability to reduce its dependence on the
Colorado River over the next 15 years.
Californians don't want another crisis. It is a state of varied
regions and interests, but they're interdependent, in the same way that
California and the rest of the nation are interdependent. We all need
to move forward together.
______
Mr. Calvert. Mr. Sunding.
STATEMENT OF DAVID L. SUNDING, DIRECTOR, SUSTAINABLE RESOURCE
DEVELOPMENT, UNIVERSITY OF CALIFORNIA AT BERKELEY
Mr. Sunding. Mr. Chairman, and members of the Subcommittee,
I would like to thank you for the opportunity to speak with you
today about the economics of California water supply
reliability and related water management issues. My name is
David Sunding, and I am an economist at the University of
California at Berkeley where I am the Director of the
University Center for Sustainable Resource Development.
For the past 10 years, I have studied the economics of
water management in California and have worked extensively with
farmers in water districts, particularly those in the western
San Joaquin Valley.
As a threshold comment, I would like to make it clear that
I am not here today as an advocate for any particular group. In
fact, I have enjoyed solid working relationships with many of
the major interests involved in the CALFED process--
agricultural, urban, and environmental water interests--and my
strong hope is that these relationships continue. My aim today
is, rather, to provide some information on the economics of
water supply reliability in California. And in particular, I
would like to offer my perspective on two aspects of H.R. 1985,
the cost effectiveness of investments in additional surface
water storage in the State and the issue of the economics of
agricultural water supply assurances.
There is very broad agreement within the CALFED process,
and this agreement is expressed quite well in the Record of
Decision, that new projects should be feasible. One element of
feasibility which is also expressed in the ROD is economic
feasibility, which I would define as simply the principle that
the benefits of the project, the environmental and economic
benefits, should exceed the costs to taxpayers and to users.
Surface storage has been suggested as a way to meet current and
future water needs, and H.R. 1985 would preauthorize a number
of these projects.
As an economist, I feel like I need to tell you at this
point in time, it is uncertain in my opinion, which additional
surface storage facilities in California would pass the cost-
benefit test.
To begin, I would like to refer you to the CALFED program's
economic evaluation of water management alternatives published
in October 1989. I would like to commend the CALFED staff. From
my vantage point, this is a landmark document in water resource
economics. The CALFED team conducted a reconnaissance-level
study looking at a number of different supply alternatives, and
to see the detailed list, you can look at the report.
The authors concluded that the least expensive means of
increasing water supply in California are efficiency
improvements, recycling, canal lining, groundwater
desalinization, and local conjunctive use projects.
Next, the report concluded that land fallowing--which is
essentially equivalent to transfers or related to transfers--
and surface storage projects laid in the next range in terms of
cost feasibility. The authors of the CALFED report concluded
that the supply curve for water is flat in this range, meaning
that given current information, it is difficult to argue for
the economic cost-effectiveness of one alternative versus
another.
I think there is substantial uncertainty about whether or
not future economic analysis of these projects is going to
conclude that they are cost effective, even beginning with this
position of essential indifference.
There are several elements that bear on the cost, the unit
cost of water from resurface storage projects. These elements
include cost allocation, yield, construction costs, O&M costs.
I think there is substantial uncertainty at this point in time
exactly how we are going to come to more definitive answers
about each of these elements. And, in particular, the CALFED
process has not tackled the cost allocation question in a
serious way, although I know this intends to.
Mr. Sunding. With regard to the costs and benefits of
agricultural water supply assurances, I would like to make just
a couple of brief points; and I have more detailed testimony
that I have submitted to the Committee in writing.
The first point is that the size of the subsidiary
incorporated in the assurances language is quite large. If we
look on a per farmer basis in Westland's water district,
providing 70 percent of water supply to this area results in a
subsidy of roughly a million dollars per farmer; and if water
costs are $400 in the Delta, which is entirely reasonable given
the current ranges of costs, then the subsidiary increases to
$2 million per farmer. So this is a very large subsidiary.
Second, given the information provided in the CALFED
economics report, there is little evidence that farmers are
willing to pay for what it would cost to provide the water to
them.
I will end my oral remarks there. I have these written
comments that I would like to have submitted into the record.
Mr. Calvert. I thank the gentleman.
[The prepared statement of Mr. Sunding follows:]
Statement of Dr. David L. Sunding, Director, Center for Sustainable
Resource Development, University of California at Berkeley
Mr. Chairman and members of the subcommittee, thank you for the
opportunity to speak with you today regarding California water supply
reliability and related water management issues. My name is David
Sunding and I am a natural resource economist and Director of the UC
Berkeley Center for Sustainable Resource Development. For the past 10
years, I have studied the economics of water management in California,
and have worked extensively with farmers and water districts in the
western San Joaquin Valley. I have received funding from the CALFED
Bay-Delta Program to study the economic impact of changes in
agricultural water supply reliability, and have worked with the CALFED
economics team regarding their analysis of water management
alternatives. I am also the President-elect of the International Water
Resource Economics Consortium, a group of over 100 economists and water
policy analysts from research universities in arid countries,
especially the United States, Australia, Israel and Spain.
I would like to make it clear that I am not here today as an
advocate for any particular group. In fact, I have enjoyed solid
working relationships with agricultural, urban and environmental water
interests in California, and my hope is that these relationships will
continue. My aim today is to provide some insights on the economics of
California water supply reliability. In particular, I would like to
offer my perspective on the cost-effectiveness of investments in
additional surface water storage in California. Then, I would like to
speak to the issue of the costs and benefits of water supply assurances
for San Joaquin Valley agriculture.
Background
The San Francisco Bay/Delta estuary is the largest estuary on the
Pacific Coast. It is the home to over 750 species, and drains over 40%
of the state's land area. In a pre-development condition, roughly 30
million acre-feet (MAF) passes through the Bay/Delta and out to the
ocean. Presently, two large public projects, the Central Valley Project
(CVP) and the State Water Project (SWP) divert water from the Central
Valley to serve farms and cities. In addition, a large number of
private and local projects draw on the Bay/Delta.
In an average year, roughly 60% of the water draining from the
Central Valley is diverted, 7 MAF by the CVP, 2.5 MAF by the SWP and 8
MAF by private and local projects. Not surprisingly, the diversion of
over half of all available water from the Bay/Delta system has lead to
serious environmental consequences, including the decline of the
state's salmon fishery among other effects.
Agriculture is by a wide measure the largest user of water in
California, accounting for 80% of all applied water use. The figure
below gives an idea of the scale of agricultural water use relative to
urban use. The quantity of water used to irrigate three of the most
widely planted crops in California dwarfs the amount of water used by
large cities such as San Francisco and Los Angeles. California farmers
irrigate a variety of crops, and the state is a world leader in a
number of agricultural markets.
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While urban demand is a small share of total water consumption at
present, it is expected to grow significantly. The state is expected to
grow from 35 to 50 million people by the year 2015. Ensuring that these
future residents, and businesses, have adequate water is one of the
main reasons we are here today.
The Cost-Effectiveness of Surface Storage is Unknown
Surface storage has been suggested as a way to meet current and
future water needs, and H.R. 1985 would pre-authorize a number of these
projects. At this point in time, it is uncertain which additional
surface storage facilities in California would pass a cost-benefit
test, if any. The CALFED Program's Economic Analysis of Water
Management Alternatives published in October 1999 was unable to show
that surface storage is cost-effective. This reconnaissance-level
report assesses a wide array of supply alternatives, including
LUrban water use efficiency improvements
LAgricultural water use efficiency improvements
LUrban recycling
LLand fallowing
LConjunctive use
LSurface storage
LOther (primarily South Delta improvements and local
projects)
The authors conclude that the least expensive means of increasing
water supply in California are efficiency improvements, recycling,
canal lining, groundwater desalination and local conjunctive use
projects. A total of 866 TAF of new supply is available in this range
at a cost of less than $800 per acre-foot to urban end users.
Next, the report concludes that almost 2 MAF of new water supply is
available in the cost range of $800 to $1,200 per acre-foot.
Alternatives in this range include land fallowing and surface storage.
The authors of the CALFED report conclude that the supply curve is
``flat'' in this range, meaning that, given current information, it is
difficult to argue for the cost-effectiveness of one alternative versus
another. In particular, the CALFED analysis concludes that the cost of
surface storage is similar to the cost of land fallowing, and that
neither alternative should be ruled out at this stage. Based on this
conclusion alone, it seems unwise to put surface storage projects in a
superior position with regard to Congressional authorization.
Uncertainties surrounding the cost-effectiveness of surface storage
are compounded by a lack of basic information. The per-unit cost of
water from dams and other facilities is determined by a combination of
construction costs, operating costs, yields, and cost allocation. Each
of these elements is highly uncertain at present, making it difficult
to pin down the exact cost of water from new surface storage
facilities. Construction costs are notoriously difficult to estimate ex
ante, and are frequently higher than original assessments. Yields
depend on the whole suite of projects finally constructed in the state
and are also difficult to estimate at present. Surface storage
facilities often serve multiple purposes, and the allocation of
construction and operating costs has a strong influence on unit costs.
To date, CALFED has not tackled the cost allocation question in a
serious way.
The CALFED Economic Analysis of Water Management Alternatives is a
significant document in water resource economics as it represents one
of the first large-scale and official attempts to incorporate basic
supply-demand analysis into water resource planning. It is based on a
clear-headed notion of cost-effectiveness. Essentially, a particular
supply alternative is said to be cost-effective if it passes a two-
pronged test:
Lit must produce water at the least cost
Lusers must be willing to pay for it
These concepts are straightforward, but it is striking how
infrequently they are invoked in water resource planning.
While the CALFED economic analysis is important and based on sound
basic principles, it is not perfect. There are reasons to suspect that
further economic analysis will demonstrate that surface storage is less
cost-effective than the authors concluded. In particular, the case for
some of the surface storage facilities identified in H.R. 1985 as
candidates for pre-authorization may be much weaker than CALFED's
preliminary economic analysis points out.
The CALFED economic analysis concludes that water use efficiency
improvements are among the least expensive sources of new supply
available in California. However, the analysis is predicated on a
strong (if common) assumption, namely that conservation only produces
new supply in areas with unusable groundwater and near the coast. The
reason is that if deep percolation is unusable, then increasing
efficiency reduces waste. If applied water percolates to the
groundwater table, however, the assumption is that efficiency
improvements have no value because they simply reduce the stock of
usable groundwater by the same amount as the conserved surface water.
The assumption that conservation only has benefit in areas with
usable groundwater is increasingly controversial in the water sciences,
particularly with regard to agriculture. Many agronomists and
economists now believe that conservation measures such as the adoption
of drip irrigation can increase crop output per acre in many settings.
If true, then agricultural water conservation allows farmers to earn
the same level of profit while consuming less water in the long-run.
Further research on this issue (which is underway at UC Davis, the USDA
and elsewhere) may result in much more water supply being produced by
conservation than CALFED's analysis has indicated.
Another issue that warrants further investigation is the cost of
land fallowing. CALFED's economists have measured the cost of this
alternative by first measuring the price that would compensate farmers
for their lost profits resulting from fallowing. Then, a ``market
incentive payment,'' or load factor of 100 percent is added to obtain
the final cost. This load factor effectively doubles the cost of land
fallowing and is not supported by economic theory. A more complete
analysis of fallowing would determine the market price of water in
various planning scenarios and use this measure to compare the cost of
fallowing to the cost of surface storage. This market-based analysis
would almost certainly result in fallowing and subsequent water
transfers being a larger part of the cost-effective mix of policies
than is indicated in the CALFED analysis.
Costs and Benefits of Agricultural Water Supply Assurances
The assurances proposal contained in H.R. 1985 would bestow a
large, direct subsidy on a group of farmers in the western San Joaquin
Valley, south of the Bay/Delta estuary--the so-called ``agricultural
water service contractors --especially if these users obtain the water
at current CVP rates. To calculate the rough magnitude of the subsidy,
suppose that under current rules in a normal year, agricultural service
contractors would receive 55% of their 2 MAF maximum allocation from
the CVP, or 1.1 MAF (2 MAF maximum * 0.55 = 1.1 MAF). A 70% allocation
amounts to 1.4 MAF, or an additional 300 TAF of water.
Suppose that the cost of this water to the government is $200 per
acre-foot and that it is resold to farmers at current rates of roughly
$60 per acre-foot. Then this policy amounts to a subsidy of $42 million
per year ($140 * 300 TAF = $42 million). In reality, the subsidy may be
larger since the cost of the water may well exceed $200. If the
additional water costs the government $400 per acre-foot (which is well
within the range of unit water costs from Sites Reservoir), then the
subsidy reaches $84 million annually.
To gain another perspective on the magnitude of this subsidy,
consider the case of Westlands Water District, which is part of the San
Luis Unit. Providing a 70% allocation in a normal year amounts to an
annual subsidy of over $24 million for this district alone if the cost
of water is only $200 per acre-foot (Westlands'' maximum allocation is
1.15 MAF annually). Westlands is comprised of close to 350 separate
corporate entities (the number of water user accounts is much higher).
Thus, the present value of the subsidy to Westlands alone is nearly $1
million per farmer. If the additional water to Westlands costs the
federal government $400 per acre-foot, then the subsidy increases to $2
million per farmer.
It is also likely that the cost of new supply to San Joaquin Valley
agriculture is well above the willingness of these farmers to pay for
it. The authors of the CALFED economic study came to the same
conclusion:
There is little willingness-to- pay (less than $200 per acre-
foot) for new agricultural water supply. In the Unconstrained
scenario there are few water supply measures available at that
cost. No (or minimal) new supplies were identified for the
Sacramento River and San Joaquin River regions.
Source: CALFED Bay-Delta Program, Economic Evaluation of Water
Management Alternatives: Screening Analysis and Scenario
Development, October 1999, at 1-4.
One of the goals of the CALFED program is to bring California's
water system into economic balance. This balance is achieved when users
are willing to pay the cost of the water they consume. This principle
is simply the ``beneficiary pays'' concept restated. Economists have
argued that it helps ensure that users are given the correct incentives
about how much to consume, and that the burden of reconciling competing
demands for water is not shifted to other groups. Providing
agricultural water supply assurances without requiring farmers to pay
the true marginal cost of water (i.e., without reforming retail water
rates) would violate this principle.
Let me make it clear that I am not advocating that farmers in
Westlands and other districts in the region should not seek additional
water supplies. To the contrary, I have worked in the region for a
number of years to help establish water markets that would facilitate
the process of transferring water into agricultural areas where there
is unmet demand. But it is important that farmers be given the correct
price incentives about the value of water in other, competing uses.
Subsidies fail this test, while water trading passes it, as does retail
pricing by water districts that sets marginal rates at the cost of
additional supply.
The assurances proposal outlined in H.R. 1985 has indirect economic
implications for other water users in California. Assuring water
supplies to farmers may well increase the cost of water to other users.
Providing additional water to a subset of farmers decreases the amount
available to other consumers and to the environment, and forces these
users to resort to more expensive supply measures. This indirect impact
is in addition to the cost to the government (and ultimately taxpayers)
of providing a direct subsidy to agriculture.
With regard to the benefits of water supply assurances to
agriculture, it is helpful to consider how farmers cope with
fluctuations in water supply. Briefly, farmers, including those in the
western San Joaquin Valley, can deal with reductions in water supply
reliability by
LPurchasing water from willing sellers
LInvesting in conservation technology
LCollecting and using weather and soil quality information
LChanging their crop mix
LFallowing
LSubstituting groundwater
LPurchasing land in areas with more reliable water
supplies
Farmers in the western San Joaquin Valley have proven to be
remarkably adept at responding to changes in water supply availability
and have demonstrated that entrepreneurship and capital can substitute
for disruptions in water supply.
Significantly, farmers in Westlands and other districts have access
to local and statewide water markets that have proven so useful in the
past. Indeed, Westlands has purchased over 1.6 MAF of water since 1990
for use by its members, and has streamlined water transfers within its
boundaries to promote efficient use. Its internal water market has been
written about extensively, and serves as a model that is emulated in
other dry areas of the world. Strengthening all of these California
water markets will enhance the ability of the CVP agricultural service
contractors to deal with future fluctuations in water deliveries.
I appreciate the opportunity to speak with you today, and I hope
that I can be of further assistance as you craft legislation to address
water supply reliability issues in California.
______
Mr. Carlson. Mr. Carlson.
STATEMENT OF PETER CARLSON, PARTNER, WILL & CARLSON, INC.
Mr. Carlson. Mr. Chairman, members of the Subcommittee, my
name is Peter Carlson; and I am appearing today on behalf of
the National Urban Agriculture Council, the Western Coalition
of Arid States, Oregon Water Resources Congress, and the
Eastern Municipal Water District of Southern California.
At the outset, let me state our strong support for Title II
of H.R. 1985, the Small Reclamation Water Resources Project Act
of 2001. The proposed amendments represent a 7-year effort to
restructure the program and provide western water users with
new options for addressing their needs.
The Act was last amended in 1986. The changes proposed by
your amendments build on what we the water users have learned
since that time and will make this an even better program from
an environmental, business, and socioeconomic standpoint.
According to the Western Water Policy Review Commission
Report from 1998, ``Once the outpost of a young nation, today's
West is home to nearly one-third of the American population.
The region has experienced rapid population growth in recent
years. Western states grew by about 32 percent in the past 25
years. By the year 2025, the West will add another 28 million
residents.'' .
This westward growth is why your legislation is so vitally
important. From our perspective, Title II would bring a number
of important changes to the existing program. There is
presently not in place a program such as you are proposing to
help western water users address the various needs, whether
they be water supply, system rehabilitation, water
conservation, water quality, environmental, or social purposes.
There is currently a program gap between the larger reclamation
project that is typically before your Subcommittee and the
smaller programs that Reclamation offers such as technical
assistance. H.R. 1985 will close that gap.
The amendments contained in H.R. 1985 address these issues
in the following manner:
No longer requiring irrigation as a project purpose in the
program will allow for the development of projects in the
urban-rural crossover setting that are more economically and
environmentally sound.
Providing additional definition of the activities which can
be undertaken through the program will help address aging
infrastructure problems as well as developing new opportunities
to make better use of existing supplies.
The streamlining of the proposal process and the
establishment of a definite time frame will give water users
greater program confidence and certainty where project sponsors
will no longer have to wait for an answer on whether there is a
Federal interest.
The establishment of a partnership program under Title II
of the SRPA amendments and the activities that can be carried
out under the program will facilitate problem solving in a
manner that gets the work done sooner before more problems
develop.
Reduction of the repayment period for Title I projects from
40 years to 25 years will also bring the program in line with
current business practices in the private sector.
Some have questioned whether the Bureau's budget will be
able to accommodate this program. Given the construction
schedules associated with the program and the decision-making
process that is built into the legislation, we see this as a 40
to 60 million dollar a year program. We believe the Bureau of
Reclamation can accommodate such a level in their budget.
We appreciate your decision to increase the cost ceiling in
the program to $1.3 billion. At the end of the last
congressional session we conducted an electronic survey to
assess the interest in the programs that would be developed
under your legislation. Historically, 14 of the 17 Western
States had used this program. We received responses to our
survey from water users in 12 of the 17 States, indicating a
strong interest in using both Title I and Title II of your
proposed amendments. Since that time I have also received
responses to an idea of setting aside up to 20 percent of the
proposed ceiling in the program for Indian tribes and
economically disadvantaged communities, an amendment that we
would support.
The loan guarantee section of your amendments opens the
door for a new, innovative approach to assist in funding
projects, given the past decline in the Bureau's budget. I
would like to provide for the record a table of the Bureau's
budget for the past 10 years that illustrates this point.
In addition, I would like to submit a report that I did
earlier this year that makes the case for increasing the
Bureau's overall budget for these and other programs.
Mr. Calvert. Without objection.
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Mr. Carlson. The continuation of the Bureau's Small
Reclamation Loan Program with the changes made by your bill is
the most important and appropriate course to take at this time.
There is strong interest out there and a belief that the small
loan program is the best vehicle to accomplish the work.
Investing in the West through your proposed amendments to the
program will be the best step forward in the 21st century for
helping the rural, urban, Indian population, and the water and
environmental resources of the West.
Thank you for the opportunity to appear here today. I will
be pleased to answer any questions.
Mr. Calvert. Thank the gentleman.
[The prepared statement of Mr. Carlson follows:]
Statement of Peter Carlson, President, Will & Carlson, Inc. on behalf
of The National Urban Agriculture Council, The Western Coalition of
Arid States, The Oregon Water Resources Congress, The Eastern Municipal
Water District (California)
Mr. Chairman, Members of the Subcommittee, my name is Peter
Carlson, I am President of the firm Will & Carlson, Inc., a Washington,
D.C. governmental relations firm specializing in natural resource
issues. I am appearing today as Vice President of the Board of the
National Urban Agriculture Council (NUAC), and also as the Washington,
D.C. representative for the Western Coalition of Arid States (WESTCAS),
the Oregon Water Resources Congress (OWRC) and the Eastern Municipal
Water District in Southern California (EMWD).
My comments today are directed at Title II of H.R. 1985, the
Western Water Enhancement Security Act of 2001, and the amendments
proposed to the Bureau of Reclamation's Small Reclamation Loan Program.
At the outset, let me state our strong support for Title II of
H.R.1985, the Small Reclamation Water Resources Project Act of 2001.
The proposed amendments represent a seven year effort to restructure
the program and provide western water users with new options for
addressing their needs.
The Small Reclamation Program Act was last amended in 1986, and the
amendments were appropriate for that time. The changes proposed by your
amendments build on what we, the water users, have learned since that
time and will make this an even better program from an environmental,
business and socio-economic standpoint..
According to the Western Water Policy Review Commission report from
1998 ``Once the outpost of a young nation, today's West is home to
nearly one-third of the American population. The region has experienced
rapid population growth in recent years: western states grew by about
32 percent in the past 25 years, compared with a 19-percent rate in the
rest of the nation. By the year 2025, the West will add another 28
million residents.''
A more recent report from the University of Colorado's Center of
the America West, of 11 Western states (California, New Mexico,
Wyoming, Washington, Idaho, Utah, Arizona, Oregon, Colorado, Montana,
Nevada), indicated that the 2000 census counted 61.4 million people in
the Western states - a 21 percent increase from 1990. By 2050, 109
million people will live in the Western States, the study estimates.
This Westward growth is why your legislation, is so vitally
important. From our perspective, Title II of H.R. 1985 would bring a
number of important changes to the existing program that would help
address these needs. This decision, amending the Small Reclamation Loan
Program, is an important step in investing in the West and putting in
place a program that can serve as the foundation for a giant leap
forward. There is presently not in place a program such as your
proposing, to help western water users address the various needs
associated with growth, whether they be water supply, water
conservation, water quality, environmental or social purposes. There is
currently a program gap between the larger Reclamation project that is
typically before your Subcommittee and the smaller programs that
Reclamation offers such as technical assistance. The Small Reclamation
Water Resources Project Act of 2001 will close that gap.
The amendments contained in H.R. 1985 address these issues in the
following manner:
1. LNo longer requiring irrigation as a project purpose in the
program will allow for the development of projects in the urban-rural
crossover setting that are more economically and environmentally sound.
This is precisely the area of greatest need for support in development
of small projects.
2. LProviding additional definition of the activities which can be
undertaken through the program, especially in the area of
rehabilitation and betterment and in the area of water quality
improvements. This will help address aging infrastructure problems as
well as developing new opportunities to make better use of existing
supplies, without the need to create new water supply structures.
3. LThe streamlining of the proposal process, and the establishment
of a definite schedule for proposal processing will give water users
greater program confidence and certainty. Proposals will no longer
languish in the bowels of the bureaucracy only to then have to wait
years for an answer on whether there is a Federal interest in the
proposed work.
4. LThe establishing of a partnership program under Title II of the
SRPA amendments, and the activities that can be carried out under the
program. This will facilitate problem solving in a manner that gets the
work done sooner before more problems develop and through the work
being carried out by the project sponsor within 18 months and a
shortened repayment period.
5. LThe reduction of the repayment period for Title I projects from
40 years to 25 years will also bring the program in line with current
business practices in the private sector.
6. LConnecting the proposed work to organizations that have legal
authority and responsibility for such work on their projects, and
making sure that work is consistent with applicable State water law
will keep the program from being abused by interests that might have
other agenda's.
As part of the discussions with the organizations I represent,
which helped in the development of the ideas embodied in your
legislation, some have questioned whether the Bureau's Budget would be
able to accommodate this program. Western water user organizations have
been working successfully on the Energy and Water Appropriations bill
through our ``Invest In the West'' campaign to increase the allocation
for the Bureau of Reclamation's Water and Related Resources program.
Given the construction schedules associated with the program and the
decision-making process that is built into the legislation, we see this
as a $40 to $60 million a year program. We believe the Bureau of
Reclamation should be able to accommodate such a level, given the
changes to the program proposed by your amendments.
We appreciate your decision to increase the cost-ceiling in the
program from $359 million to $1.3 billion in order to accommodate the
interest out in the West for the program. At the end of the last
Congressional session we conducted an electronic survey, based on your
legislation in the last Congress (H.R. 5120), to assess the interest in
the programs that would be developed under your legislation.
Historically 14 of the 17 Western states had used this program. We
received responses to our survey from water users in 12 of the 17
states indicating a strong interest in using both Title I and Title II
of your proposed amendments. Since that time I have also received
responses to an idea of setting aside 20% of the proposed ceiling for
Indian Tribes and economically disadvantaged communities, an amendment
that we would support to your proposed amendments.
Another 1998 recommendation of the Western Water Policy Review
Commission in was ``Given the declining federal budgets, innovative
sources of funding and investment, including public and private
partnerships, must be found for the management and restoration of
western rivers.'' Part of the reason for including a section in this
bill on guaranteed loans is to explore the initiation of a new loan
guarantee section under the Act. The Federal Government has
approximately forty guaranteed loan programs listed in the Federal
Budget.
The Loan Guarantee section of these amendments is to open the door
for a new, innovative approach to assist in funding projects given the
continuing decline in the Bureau's Budget. I have attached a table of
the Bureau's Budget for the past ten years as recently provided by the
former Commissioner during testimony in the House of Representatives
that illustrates this concern. In addition, I would like to submit a
report that I did earlier this year comparing the Bureau's Budget with
other agencies at the Department of the Interior from fiscal year 96-
FY2000 that makes a better case for the need to increase the Bureau's
Budget.
I understand that for Budget scoring purposes for a Loan Guarantee,
the ratio would be on a 10-1 basis. What this means is for the $100
million provided in title three of your bill, the Federal government
will produced $1 billion worth of constructed project benefits. It is
nice for everyone to talk about what to do with Budget Surpluses, but I
don't believe the Reclamation program will benefit from them any time
soon unless we continue to be successful with the ``Invest In the
West'' campaign. There is a need for the Bureau of Reclamation's long
term budget to be addressed, and increased, given the work that needs
funded in their program. The Bureau could, however, explore and make
use of this new effort that could benefit the water users in the West
in a more timely manner than waiting on such surpluses to appear in
their program.
I would like to address the issue of whether the Bureau of
Reclamation should or shouldn't be in the loan business. Why is it that
almost every Federal agency has a loan program, to assist in carrying
out their activities, yet the Bureau of Reclamation claims ``the
current loan process (at Reclamation) suffers from a lack of trained
credit officers to monitor loans as well as assist in determining
economic feasibility, repayment terms, maturity dates, and interest
rates.....Reclamation would continue to be in the business of
developing repayment contracts and engaging in loan collection
activities, two tasks for which the private sector is better suited
than the Federal Government.'' The former Administration made great
claims about Reinventing Government. Why can't Reclamation learn from
the best of what other Federal agencies do with their loan programs and
in turn benefit the public from a reinvention in their loan program?
Some would like Reclamation would just like to be in the grant
business. We don't believe that would be a good idea. From fiscal year
91 to fiscal year 99 Reclamation provided approximately 4,600 grants
worth about $750 million. Unless you tie the grants down like H.R. 1985
would do through the amendments to the program and also make the other
changes embodied by your amendments I believe that a grant only program
would be a recipe for waste and abuse. If they have such experience
with grants, which I have been told are more burdensome to administer,
and have so few loans, it would seem like they can figure out how to
make a loan program work better from an administrative standpoint.
CONCLUSION
The continuation of the Bureau of Reclamation's Small Reclamation
Loan Program, with the changes made by your bill is the most important
and appropriate course to take at this time. Based on the details in
the Western Water Policy Review Commission report, our survey and
meetings and conversations with water users in the West, there is a
strong interest out there for a program that can help address the needs
of the West, and a belief that the Small Reclamation Loan Program is
the best vehicle to accomplish the work. Investing in the West through
your proposed amendments to the program will be the best step forward
into the 21st Century for helping the rural, urban, Indian population
and the water and environmental resources of the West.
______
Mr. Calvert. Mr. Schulz, Special Water Counsel, Kern County
Water Agency.
STATEMENT OF CLIFFORD W. SCHULZ, SPECIAL WATER COUNSEL, KERN
COUNTY WATER AGENCY
Mr. Schulz. Thank you, Mr. Chairman.
I am Cliff Schulz. For more than 30 years I have acted as
counsel to the Kern County Water Agency on matters involving
the State Water Project and the Sacramento-San Joaquin Delta.
In that capacity for the past 7 years I have worked with a
large coalition of urban and agricultural water agencies
throughout California, commonly known as the AgUrban Group, to
develop and support common goals for the CALFED Bay-Delta
program.
I have provided written testimony which I would like to
submit for the record, and then I will summarize my testimony.
Mr. Calvert. Without objection.
Mr. Schulz. From the point of view of the agricultural and
urban water users, the most important aspect of the legislation
that is pending before the Committee is that it implement the
fundamental policy that underlies the entire CALFED program.
That philosophy is balanced implementation in all CALFED
program elements.
California water policy has been stalemated for decades.
While the population increased, the deadlock resulted in
virtually no new infrastructure, a condition to that which
preceded our electricity crises. CALFED overcame this stalemate
by essentially telling all stakeholders that if they wanted to
accomplish what was important to them, they had to allow others
to accomplish their goals and meet their needs.
This is a very important concept to the legislation that is
pending, and I just want to read a short quote from the
framework agreement. That was a document signed by then
Secretary Babbitt and Governor Davis that really broke the
logjam on what CALFED was going to look like. They stated:
``all aspects of the CALFED program are interrelated and
interdependent. Ecosystem restoration is dependent upon supply
and conservation. Supply is dependent upon water use and
efficiency and consistency in regulation. Water quality is
dependent upon improved conveyance, levee stability and healthy
watersheds. The success of all of the elements is dependent
upon expanded and more strategically managed storage.'' .
It went on to say, expenditure of those funds for CALFED
must be based on accountability and measurable progress being
made on all elements of the program.
The AgUrban Group urges that the Federal legislation adhere
to this fundamental policy which is often referred to as
``balanced progress in all CALFED program areas.'' thus, for
example, we strongly support implementation of the CALFED
Ecosystem Restoration Program not only because we know it is
needed but also because there can be no CALFED progress in
water supply and water quality without progress on ecosystem
improvements. Conversely, we only support legislation
authorizing the ecosystem actions if there is legislative
language authorizing water supply and water quality programs on
an equal footing. This is the fundamental precept of CALFED.
There is broad support within the AgUrban Group for H.R.
1985 because the bill adheres to the CALFED principle of
balanced progress in all program areas. The bill, consistent
with the ROD, also authorizes appropriations for the full,
long-term CALFED program, thereby opening the way for funding
needed to move forward with water supply, water quality and
ecosystem projects simultaneously.
For the reasons that there is support for H.R. 1985, there
is not broad support within the AgUrban Group for H.R. 2404.
The legislation does not contain the kind of language that
provides assurances to us that there will be balanced progress
in all CALFED program areas.
We also support the competitive grants program as it
provides funds for regional water supply and water quality
improvements; and we believe that a competitive grants program,
rather than earmarking or immediately identifying projects,
provides the flexibility needed to select and fund the most
cost and operationally effective water infrastructure projects.
I would now like to turn to what many consider to be the
most important pending issue with respect to the CALFED
legislation, namely authorization and funding procedures.
Unfortunately, the term ``preauthorized'' has been coined to
characterize the issue, even though the term does not capture
the real substance of the debate.
CALFED is a program to address serious water problems.
Within the program is a series of projects. We are asking for
an authorization of the program which then makes--the question
is, what type of congressional oversight do you need in order
to implement the individual projects that are parts of the
program? We all seem to agree that studies should be carried
out just in a fairly normal process, but we seem to part
company when it comes to how funds should be authorized for
construction.
We understand that there are possibly technical or
parliamentary issues with the way the bill is now written, and
we are willing to work to overcome any of those kinds of
issues. But for us there are two keys to success. First, we
need an expedited process. None of us want, for the next 20
years or more, to find ourselves participating in annual
authorization exercises. Second, whatever expedited process is
approved for environmental projects should be applied to water
supply and water quality projects. Uneven treatment of the
various CALFED elements would be unacceptable to us as it would
make balanced progress almost impossible.
In summary, it is our highest priority to help develop a
Federal legislative package to authorize balanced
implementation. This approach is the only way to avoid a water
supply disaster equal to that now being felt in the energy
field. We pledge to work with this Committee and its staff to
bring about final passage and a presidential signature on fair
and workable CALFED legislation.
Thank you.
Mr. Calvert. I thank the gentleman.
[The prepared statement of Mr. Schulz follows:]
Statement of Clifford W. Schulz, Special Water Counsel, Kern County
Water Agency
Mr. Chairman, members of the subcommittee, my name is Clifford
Schulz. For more than 30 years I have acted as special counsel to the
Kern County Water Agency on matters related to the State Water Project.
Much of my work has focused on issues surrounding the health of water
project operations in the Sacramento-San Joaquin River Delta. In that
capacity, for the past seven years, I have worked with a large
coalition of urban and agricultural water agencies throughout
California (the AgUrban Group) to develop and support common goals for
the joint Federal-State CALFED Bay-Delta Program.
CALFED was launched in 1995 to address competing needs for water.
An exhaustive nearly six-year planning process culminated in the
release last year of a comprehensive, 30-year plan to restore the
health of the San Francisco Bay-Delta ecosystem and improve the
reliability and quality of California's water supplies.
The plan was initially announced on June 9, 2000, in a joint
``Framework for Action'' issued by then Secretary of Interior Bruce
Babbitt and California Governor Gray Davis. It was finalized in the
September 2000 Record of Decision (ROD). Both documents identify
numerous projects--from ecosystem restoration, to surface and
groundwater storage, to water quality improvements. The ROD is the
product of extensive input from stakeholders and the public; it is
scientifically sound, and reflects a commitment to move ahead
simultaneously on environmental, water supply and water quality
objectives.
California voters have approved two bond issues and the California
legislature has appropriated general fund monies that provide over two
billion dollars for the CALFED effort and to meet California's long-
term water challenge. It is now vital that federal legislation and
appropriations follow these investments or the unprecedented
collaborative effort that led to the CALFED Program ROD may come to
naught. I, therefore, appreciate this opportunity to provide input on
the pending legislation related to the CALFED Program, HR 1985 and HR
2404.
More important to the legislation pending before this committee
than the list of projects spelled out in the Framework and the ROD is
the fundamental philosophy that underlies the CALFED Program and
stakeholder support. California water policy has been stalemated for
decades. While the population has risen, a deadlock among water project
proponents and the environmental community has resulted in virtually no
new infrastructure being built in decades--a condition similar to that
which preceded the electric energy crisis. CALFED first encountered and
then overcame this stalemate by essentially telling all stakeholders
that if they wanted to accomplish what was important to them they had
to allow others to accomplish their goals and meet their needs.
The Framework agreement best stated this concept as follows:
All aspects of the CALFED Program are interrelated and
interdependent. Ecosystem restoration is dependent upon supply
and conservation. Supply is dependent upon water use and
efficiency and consistency in regulation. Water quality is
dependent upon improved conveyance, levee stability and healthy
watersheds. The success of all of the elements is dependent
upon expanded and more strategically managed storage.
California taxpayers, stakeholders and the federal government
will be called on to invest billions of dollars over the next
decade on CALFED programs. Expenditure of those funds must be
based upon accountability and measurable progress being made on
all elements of the program.
(Framework for Action, p. 2-3; italics added.)
The ROD echoes this concept in several places, one being:
The CALFED Program takes a broad approach to addressing the
four problem areas of water quality, ecosystem quality, water
supply reliability and levee system integrity, recognizing that
many of the problems and solutions in the Bay-Delta system are
interrelated. Problems in any one program-area cannot be solved
effectively without addressing problems in all four areas at
once. This greatly increases the scope of efforts but will
ultimately result in progress toward a lasting solution.
Thus, the single most important difference between the CALFED
Bay-Delta Program and past efforts to solve the problems of the
Bay-Delta is the comprehensive nature of CALFED's interrelated
resource management strategies. A comprehensive CALFED solution
will also be supported by governance mechanisms that overcome
problem-specific or resource-specific limitations of previous,
more narrowly focused, approaches.
(ROD, p. 10)
The AgUrban Group urges that federal legislation adhere to this
fundamental principle, which is often referred to as ``balanced
progress in all CALFED Program areas.'' Thus, we strongly support
implementation of the CALFED ecosystem restoration program, not only
because we know it is badly needed, but also because there can be no
CALFED progress on water supply and quality without progress on
ecosystem improvements. Conversely, we only support legislation
authorizing the ecosystem actions if there is legislative language
authorizing water supply and water quality programs on an equal
footing. That is the fundamental precept of CALFED, and it is with an
eye to that precept that we have reviewed the pending bills and offer
our comments today.
There is broad support within the AgUrban Group for HR 1985. A
major reason for our support is the bill's adherence to the CALFED
principle of balanced progress in all program areas. Both sections
101(b)(2) and 103(a)(1) mandate that a balanced and timely program to
implement all aspects of the CALFED program be developed. HR 1985,
consistent with the ROD, also authorizes appropriations for the full,
long-term CALFED Program, thereby opening the way for the funding
needed to move forward with water supply, water quality and ecosystem
projects simultaneously. The bill would allow projects to proceed,
following feasibility and environmental studies, with Congressional
oversight.
For the same reasons there is support for HR 1985, there is not
broad support within the AgUrban Group for HR 2404. This legislation
would fundamentally change the CALFED program by authorizing only
select elements of the ROD. The bill seems to be premised on the
assumption that the state's water needs can be met exclusively with
conservation and water recycling programs, even though, after over five
years of study, the unanimous consensus of all the CALFED agencies was
to the contrary. HR 2404 relegates any new water storage projects to
permanent ``study'' status, and would effectively set aside five years
of public planning and input.
We also support HR 1985's competitive grants program to provide
funds for regional water supply and quality improvement projects. A
competitive grants program provides the flexibility needed to select
and fund the most cost and operationally effective water infrastructure
projects. For a state as diverse and changing as California,
attempting, in advance, to legislatively predict what infrastructure
projects should be funded over the next 10 or so years is sure to miss
some of the best.
HR 1985 includes water supply assurances for all water users,
particularly those most impacted by recent regulatory actions. The
AgUrban Group is working with the author and others to craft
legislative language that best accomplishes this goal consistent with
CALFED's principles, including the principle of not redirecting
impacts.
In contrast, HR 2404 establishes federal policy that will have the
effect of further reducing water supplies to this area and to the
service area of the State Water Project. Section 201(b)(5) establishes,
as a matter of federal policy:
the objective of reducing, by the year 2020, the maximum annual
quantity of water pumped each year for consumptive uses from
the Harvey O. Banks and Tracy Pumping Plants.
This provision, in addition to undoing the CALFED goal of improving
water supply reliability for federal contractors, takes the highly
unusual step of instructing a federal official to proceed in a manner
that would adversely impact a California owned and operated intra-state
water facility that is regulated under State law. It also instructs the
official to take actions that could very well impact the flow of funds
that are the ways and means of repaying State issued general obligation
bonds. This is the antithesis of Federal/State cooperation envisioned
by CALFED.
HR 2404 also departs from the ROD in the way it proposes to
regulate water facilities operations in the Delta. Section 304
instructs the Secretary to manage the timing and quantities of water
exports from the Delta to minimize harm to fish in accordance with
determinations by representatives of the United States Fish and
Wildlife Service, the National Marine Fisheries Service, and the
California Department of Fish and Game. California law and existing
federal law, as interpreted by the United States Supreme Court, require
that water projects be operated as prescribed by California's State
Water Resources Control Board--not as prescribed by three fisheries
agencies that have no duty to balance competing needs for water within
the State. We strongly object to this federal substitute for
established State laws which regulate water rights in the public
interest.
I would now like to turn to what many consider the most important
pending issue with respect to CALFED authorization and funding.
Unfortunately, the term ``preauthorized'' has been coined to
characterize this issue, even though the term does not capture the real
substance of the debate. In reality, the term preauthorization never
seems to be applied to a project one favors. But if one opposes a
CALFED project and wants to have a second bite at opposing its
implementation, then one loudly cries that the pending legislation
should not ``preauthorize'' that project.
CALFED and the CALFED ROD call for implementation of an integrated
``program'' to address California's serious water problems. This
overall program is then subdivided into sub-Programs, such as watershed
improvements, ecosystem restoration, and water quality improvements.
Within each sub-Program area, there are a myriad of ``projects'' that
are designed to meet the sub-Program and overall CALFED Program
objectives. What the federal legislation should authorize is funding of
the overall CALFED Program. Authorizing funding for all aspects of the
Program, in a balanced manner, should be a focal point of this
legislation. While HR 1985 contains language to this end, AgUrban has
recommended additional language for section 104(a) that would ensure
that all CALFED programs are authorized for appropriations.
The issues surrounding the authorization/appropriations process is,
therefore, best articulated by asking: Once the CALFED Program is
authorized, what is the best means for assuring appropriate oversight
before program elements or projects are commenced? For the AgUrban
Group, the correct answer to this question must ensure that all CALFED
sub-Programs have to surmount equal hurdles. Otherwise, balanced
implementation, as that concept is articulated in the ROD and Framework
Agreement, will not be possible.
All stakeholder groups seem to agree that funds for studies,
environmental impact analyses, other preconstruction activities, and
CALFED administrative costs should be handled through the standard
appropriation process. Each year the CALFED governance board would
provide a report to Congress outlining the projects within each sub-
Program area for which funding is being requested. That report would
describe how implementation and use of the requested funds would
maintain required balance among all program areas. This initial report
is a critical aspect of the process, as the CALFED governance body must
maintain initial responsibility for assembling a balanced program.
HR 1985, in section 105(c)(2), allows the appropriations committees
to strike projects from the report as part of its appropriation
process. AgUrban understands why this right to strike has been
included, however AgUrban has recommended amendments to the bill that
would ensure that the balance struck though the CALFED governance
process is not impacted.
The ``preauthorization'' debate seems to focus on what process
should be followed before funds can be appropriated for construction of
CALFED projects. We support the approach contained in HR 1985, which we
call a check-back. Before construction money can be appropriated, a
detailed report on the particular construction project, whether it be
an environmental project or a water supply or water quality project,
must sit before the original authorizing committees for consideration.
In the absence of objection from the authorizing committees, the
appropriations committees may place those construction projects into
the normal appropriation process.
We understand that there may be parliamentary issues with respect
to this process, and we look forward to working with committee staff to
resolve them. Our key to success in resolving these parliamentary
issues is twofold. First, an expedited process for approving
construction projects must be developed. None of us want, for the next
20 or more years, to find ourselves participating in an annual project
authorization exercise. Second, whatever expedited process is approved
for environmental projects should also be applied to water supply and
water quality projects. Some stakeholders have suggested that all
CALFED water supply projects should have to come back for full
congressional authorization, while other CALFED projects do not have to
obtain authorization. Such uneven treatment of the various CALFED
elements would be unacceptable, as meeting the balanced progress
requirement would be rendered impossible and the entire CALFED Program
would be jeopardized.
In summary, AgUrban's highest priority is to help develop a federal
legislative package that will fully authorize balanced implementation
of the overall CALFED program, and will ensure that the promises made
to all stakeholder groups in the Framework and the ROD are met. This
approach is the only way to avoid a water supply disaster equal to that
now being felt in the energy field. We pledge to work with this
committee and its staff to bring about final passage and a presidential
signature on fair and workable CALFED legislation.
______
Mr. Calvert. I appreciate the word ``balanced.'' I have
been working through this for some time with many of the
members on this Committee and talked to many of you on the
panel, and we have had a number of hearings throughout the
state of California, outside of California, and certainly
today, and I have heard about preauthorization on numerous
occasions, but obviously any project needs to go through the
State and Federal process as well as vetted by all the
interested stakeholders. So I think that word is probably being
overused as far as a process.
If anything, I wish I could preauthorize things, but in
today's environment that is not possible.
Mr. Sunding, you kind of got my attention on something when
you got into cost benefit and the rest of it, because I have
been working on that and other issues in the past when I used
to Chair other Committees. But one thing that I have always
found is that there is the other side of that, too, when you
get into cost benefit. Farmers today are obviously impacted by
Federal actions, whether it is the Clean Water Act, whether it
is the Endangered Species Act or other Federal law which they
must comply with; and there is a cost to that, regulatory cost.
And also there is another cost. There is a human cost.
When we mention fallowing land as a secondary course of
action, there is--it is not just making that statement. As I
found out in going through rural communities actually
throughout the United States, water transfer is an easy thing
to say, but when you go to the communities and you look at
those people in the eye, the people that own the dry cleaners
or the guy who has got the corner gas station or the community
themselves, it is not that simple. So I think the Federal
Government does have an obligation to participate in these
water projects.
And the beneficiary does pay, but to some degree the
Federal Government has an obligation since we have also put
costs upon farmers and everyday Californians through Federal
actions here.
So my question really is to Mr. Gastelum because,
obviously, a big part of this legislation is also to build
water projects, water reclamation--and I have heard no
objections to that--groundwater management, conjunctive use,
all of these things. There may be some argument about,
ironically, whether or not the Federal Government should
participate by some people on this panel. What is your answer
to that?
Mr. Gastelum. Mr. Chairman, the Federal Government clearly
is participating now, has for many, many years, is a part of,
if I may say, the problem as well as part of the solution. So
we look forward to the partnership that has been forged here
with the ROD and would be carried forward with your
legislation.
Obviously, the Federal Government is not going to shoulder
the full burden. A fair portion of it would be all that anybody
is asking. And beyond maybe some of the traditional things that
you have done, there is tremendous opportunity in conservation
recycling programs, as we have talked about today.
Mr. Calvert. And, by the way, we are talking about a third
of the project being paid for by the Federal Government and
two-thirds being paid for by State and local interests, which
leverages the authorization within that bill significantly for
water projects. The more I got involved in this, the more I
realized that the issue at hand for some of these projects,
which may not today make financial sense--I am an old business
guy and I understand that real well, but if we don't pursue
some of these projects and we go through a process of
governance to find out what is the most cost-effective way of
reclaiming water or getting additional water supplies on line
that we won't have the luxury of making a better decision later
on because we will be in a crisis mode, which we may be in
already.
But I make that point because, when I hear the issue of
cost benefit, I think of other things other than just the cost
of--and the benefit that may be in that community as far as
what can happen to those people there in the Central Valley and
what can happen in Imperial County and the rest.
With that, Ms. Napolitano.
Mrs. Napolitano. Thank you, Mr. Chair.
It is interesting to hear the commonality from all the
panelists in regard to the issue of water which has become
really a topic of conversation in my own communities.
Mr. Gastelum, I was reading--caught me reading part of your
remarks, but I was also interested in a reference you made, I
believe, to water quality experts out of the Delta, and can you
kind of explain the importance of Southern California water
providers to improve the quality of water coming out of the
Delta pumping plant--actually, the Harvey Banks. I heard Mr.
Miller make reference to that, and that kind of peaked my
curiosity.
Mr. Gastelum. Yes. I would be pleased to respond.
The issue is really most directly focused on salinity. We
have a high degree of salinity, as you know from your work on
the Colorado River, Congresswoman, from our Colorado River
supply. We are able to reduce the impact on Southern California
water users by blending water from the Delta which has lower
natural salinity in most years. There are years, dry years, and
other conditions where the salinity actually rises in the Delta
as well because of infiltration from the ocean water as a
result of conditions in the Delta.
The other situation that we face is, because the Delta is a
confluence of rivers, of various water practices, wastewater
treatment, effluent, you have any number of contaminants that
we can find in our source water, and ultimately they end up in
Southern California or in communities in Santa Clara and other
urban communities.
So how do we best deal with that water quality issue? We
think it is by some projects. In fact, there are projects that
are in the works now that produce better water quality at the
source. So our focus, then, is making sure that our water
quality projects are well coordinated with the water supply
projects, the ecosystem projects and, as I think Ms. Koehler
said, we get the best value for the dollar. Certainly one of
the major tenants of CALFED is to integrate those water quality
benefits into those decisions.
Mrs. Napolitano. Thank you.
Which brings me to the other question, salinity that you
touched upon, which is a great big issue out of the Colorado
River, but maybe you might be able to touch upon the
relationship between CALFED and California's ability to limit
its use of the Colorado River water, in other words, staying
within the 4.4 between now and the year 2015.
I can tell you I still have bruises from that meeting,
Chairman Calvert, in Salt Lake City. California--the other six
States ganged up on us and--saying we are going to be watching
you to reduce your water, which goes into finding ways of being
more productive in how we recycled water and how we are able
then to deal with the EPA mandate, how we are able to help
municipalities continue to advocate conservation methodology.
All of those things have a part of in it.
Again, I want to know if you have any comments on the
relationship between the CALFED and the Colorado River.
Mr. Gastelum. The basic fact is that California has an
entitlement of 4.4 million acre feet. Metropolitan and the
urban water users on the urban plain, the 17 million consumers,
really only have an entitlement to 550,000 acre feet of that
4.4. We have traditionally only taken about 1.2 million acre
feet because our aqueduct allows us to take that, and because
there have been surpluses on the river we have been able in
most years to be able to take 1.2 million acre feet.
The upper basin and lower basin, the other States, have
served notice, as did the Secretary of the Interior, that it is
time that we talk about Southern California going on a diet. So
now over the next 15 years our job is to be able to live within
that 550,000 acre foot entitlement when surpluses are not
available. That means we have to forge the water transfer
agreements, face the very difficult third-party impacts that
the Chairman was alluding to.
We announced an agreement that we are going forward with an
agreement with the Palos Verdes Irrigation District. They have
the best rights on the river, and our plan there is a fallowing
program. We have had previous experience with that irrigation
district, a successful one. We think that by including some of
the previous models that we have used and adding payments for
potential third-party impacts in that agreement we will be able
to create a model that should work elsewhere. So it will take
upwards of 15 years to be able to compensate for that loss.
We are clearly not focusing on the State Water Project to
make up that loss. We have got to be able to do it in a
coordinated fashion on the Colorado River and the State Water
Project, but if we are not able to get CALFED to at least take
care of our existing demands and some projected future, we
would have a double whammy, reduction in the Colorado River,
reduction in the State Water Project and in no way can we make
that up with conservation and recycling alone. We are going to
need both programs.
Mrs. Napolitano. Mr. Chairman, with your indulgence, I know
I have overextended my time, but given the fact that we may be
facing another drought year, I think it is incumbent upon us to
make sure that we do seriously work on passing the CALFED this
year. Otherwise, we are going to be in deep trouble. Not only
will we be facing water shortages in the western arid States
but also have to look forward to cutting our rations, so to
speak.
Thank you.
Mr. Calvert. I thank the gentlelady.
By the way, I want to emphasize I support water transfer.
It is just that we need to add additional supply and the other
projects we outline in H.R. 1985 which we agree upon that it is
all so necessary in order to meet future demand.
And with that, Ms. Solis, you are recognized.
Ms. Solis. I apologize for stepping out, also.
I guess my concern also is that, while we are trying to
meet the demands in Southern California with a growing
population, we understand the need for storage and building up
that storage and looking at different sources for regenerating,
things of that nature. But while we realize that there is a
need to construct these facilities, I am also very mindful of
how we use these tax-paying dollars and how efficiently they
can be used, and I would like to hear from anyone what kinds of
ideas you might have about giving incentives for those projects
that do well in terms of meeting our goal, efficient clean
water and the production and concentration and storage of that
water. That is one.
And the other is this whole issue of trying to keep an
equilibrium here in terms of our ecosystems, environmentally
sound programs and realizing that we do have natural habitat
that we also want to protect, in my case, in Southern
California, I know as well as up north. But I would like to
hear you talk a little bit about that.
Communities that I represent and I know Grace--we are very
concerned about access for smaller minority, low-income
communities and having the ability to have programs that will
provide incentives for recycling and things of that nature. So
I would like to hear a little bit about that. Anyone?
Ms. Koehler. I can maybe start the discussion,
Congresswoman.
As I mentioned in my testimony, I think the best
opportunity to respond to the concern you have raised is for
the legislation that is now pending to be expanded specifically
to authorize the water use efficiency program. It is generally
authorized in the bill now, and I understand from talking to
staff that there wasn't the intent to leave it out either in
H.R. 2402 or 1985. But that program I think if given greater
prominence, if it is specifically called out the way some of
the other CALFED elements are in the bill, has the greatest
potential to provide the largest benefits to lower income
communities in the shortest time frame because that goes to
efficiency technologies and conservation technologies, and
there is a range of views about the extent to which such
technologies will address the problem.
Acknowledging that range of view, there is, I would say, a
fairly strong consensus that those technologies do have
considerable merit and should move forward.
The ROD has very strong language supporting moving forward
with those kinds of programs immediately; and, as I mentioned,
it calls for $500 million on the Federal side with matching
funds on the State and local side in the first 4 years. So I
think that is sort of the shortest, quickest answer to your
response. That is the most immediate thing that I can see can
be done to--in response to the concern that you have raised for
the kinds of communities that you and Congresswoman Napolitano
represent.
Mr. Gastelum. If I may add, Congresswoman, I am familiar
with your district; and I know that water quality is one of the
major concerns in your district. And by assuring that water
quality is one of the purposes that people can apply for
projects and assuring that it is a competitive process, that
anybody with a good project has an equal shot, I think goes a
long way toward addressing the concerns that you may have in
your district.
Ms. Solis. There is concern about testing models that
actually work. On the one hand, you certainly want to encourage
new development and innovation. On the other, you want to make
sure you are funding projects that are actually going to meet
or have some kind of experience. That is the part I think that
I am a little troubled about. Because, on the one hand, we want
to see new projects and, on the other hand, are they foolproof
or will they be foolproof and how do we go about making sure
there is accountability? And if they do work, how do we give
them incentives to go on and hopefully expand those projects
that really do the job? I don't know how we get around that, I
guess.
Mr. Calvert. Well, if you are asking me that question, vote
for H.R. 1985.
Mr. Schulz. May I respond briefly to that question?
Mr. Calvert. The gentleman is recognized.
Mr. Schulz. One of the features of CALFED that I think will
help answer your question is the governance structure that is
proposed to be set up and also the science program. Because I
have never viewed the science program as only being limited to
the science of ecosystem. I consider it to be also dealing with
the science of water supply, conservation and all elements of
the CALFED program.
So we think that the structure that is set up having a
joint State-Federal governance process backed by a strong
science program will give us the ability to answer those ``what
if'' questions and ``will they work'' types of questions. And
we would not expect the CALFED governance structure to bring a
project forward for appropriations for construction until there
was some real strong backing in that regard.
Mr. Calvert. I was going to add to that that the governance
process--in putting together a governance process with the
participation of the governor, the State legislature, certainly
the members of this panel, the stakeholders I don't think would
allow really for projects that don't qualify and are well peer-
reviewed and that are worth pursuing. So I believe that this
legislation will move us in the right direction.
Ms. Koehler, many of the environmental programs that we
pursue today are extremely expensive, and some members are
concerned about costs, especially indirect costs, and sometimes
they believe that they disproportionately fall on agriculture.
How can funding for some of the conservation programs be
distributed more fairly among the beneficiaries, including the
environmental community?
Ms. Koehler. Mr. Chairman, let me make sure I understand
your question. Are you asking how funding for the restoration
program can be distributed or are you asking me about--.
Mr. Calvert. That is correct.
Ms. Koehler. My understanding is that at this point
CALFED's proposal for financing the restoration program is that
it will come largely out of public funds. Other than the $35
million user fee that is proposed on the State side, it is not
my understanding that there is a financing mechanism that is
being discussed to place that burden on the water users.
Mr. Calvert. Farmers believe that they lose water. Water is
being dedicated for environmental purposes so that is a cost,
so that is a cost that is being put upon them. So I guess the
question would be, do you believe that that is a fair cost or
do you believe that--what other methodology can be used to more
fairly distribute those costs?
Ms. Koehler. Let me try to answer that in two ways.
First, the water that is being contemplated for the
environment in CALFED is--CALFED has been very sensitive to
that issue, and I think appropriately so. There has been,
obviously, a lot of anxiety and concern about perceived or
actual reallocations of water. Therefore, the water that is
being proposed to go to the environment--and it is a relatively
small amount, 100,000 acre feet by the end of the 7 years--my
understanding of that proposal is that that would come only--
that is a program that would come only from willing sellers and
transfers that fully respected existing water rights. So there
is expected to be no impact to agricultural water users as a
result of that program.
Looking--the second way I will respond to your question is
that, looking at prior, preCALFED efforts, I think there has
been concern with regard particularly to the 800,000 foot
dedication under CDPIA and that there has been controversy
around that. As far as how to allocate the burdens of that, I
think CALFED has taken a major step with the environmental
water account.
I know there is some confusion about that. My understanding
is the way the Environmental Water Accountis supposed to work
is that it is basically a publicly funded account of water to
cap the water impacts to water users and farmers in particular
of complying with preexisting regulatory requirements,
particularly, as you mentioned earlier, under the Endangered
Species Act. So I think that is an innovative approach in
CALFED to take some of the financial burden of complying with
the Endangered Species Act in particular and shifting that to
the public; and we have at Save the Bay and throughout the
environmental community supported that innovation.
Mr. Calvert. I would say that if the farming community
believed that they could cap the cost at 100,000 acre feet of
water, I suspect they would take that deal right now, but I
suspect that that may not be the deal.
Mr. Luddy, obviously in your capacity you work with a
significant group in our State that are very concerned about
the economy, obviously. I can't think of an industry that
probably suffers the most when we go into a recession as far as
a construction issue, something I used to be in in my previous
life. We read in the paper, for instance, about Federal judges
now implementing or causing larger developments to cease and
desist unless they can prove water supplies.
If this crisis continues or gets worse, how would that
affect your industry?
Mr. Luddy. Frankly, I think it would be difficult to
overestimate the impact on the industry. If we continue to go
through--if you were to take what is happening in the Klamath
Bay and to take what has been happening in energy deregulation
and the electrical crisis in Southern California and play that
out into a water issue, which I think in many ways is far more
serious, the impact would be devastating. Projects would stop
in their tracks. Investment in the region would stop. People
will not come and invest in Southern California if they
perceive it as someplace where they will not have reliable
water.
Mr. Calvert. What are the costs of something like that?
Obviously, we were talking about human costs earlier. When you
have a significant event like that happening to people and
families within in that industry that you represent, does that
cost the government a significant amount of money?
Mr. Luddy. It costs in payroll taxes. It costs in that
people would be on public relief at some point if it extended
long enough. Our members, they have their health and welfare
benefits paid based on hours contributed to health trust funds;
and after a certain period of time, their benefits run out.
They have to look elsewhere for those things. So all of those
impacts would hit on the State, local, and it would have
Federal impact.
Mr. Calvert. Ms. Napolitano.
Mrs. Napolitano. Thank you.
Mr. Luddy, wouldn't it also affect businesses because their
purchasing power would be diminished?
Mr. Luddy. Absolutely. The Congressman mentioned the dry
cleaner in the small town. Our workers earn a good wage. They
have a good benefit, health care. They take that money and
spend it in town. The multiplier effect on construction dollars
is substantial. I believe it is 1.8--is the factor. If they are
not working, they are not going to the dry cleaner, not going
to the restaurant. They are not going to the ball game, taking
their family out on the weekend. The ripple impact on
construction slowdowns is very significant, small community or
large.
Mrs. Napolitano. One of the events that I had great
pleasure in attending was the opening of the Diamond Valley
Lake with Congressman Calvert and other Members who invited me;
and it was great to hear that not only did that project get
built under the time frame it was scheduled for, at least that
was my understanding, but also that there were very few change
orders and that it was labor that brought it across that way,
that the partnership was just outstanding. And I have to say I
was very pleased to hear that because we have long said that if
you want to save money in the end, you have to go to the
experts, and that would be our labor brothers and sisters that
have been trained to do the job well.
That is just a commentary, but I tell you that I find the
ability for us to understand how we are impacted when we have a
major crisis and everybody suffers, it isn't just business. It
is the working class, the families, the seniors. It is just a
reverberating effect. So I am very concerned that we do plan
together, and I am glad to see that labor is involved in this
issue, because to me that signifies that we are working
together for one end and that is to get this issue resolved.
I look forward to working with our Northern California
folks as well as the Central Valley folks and the folks below
us down in the San Diego area, because I think all of us are in
the same boat. If our coalition remains unified, we will be
able to get this through; and I am hoping we get the support
from you and the assistance of the other Members of Congress,
the calls to signify how important this project really is for
all of California, not just for Central or Northern or Southern
but to all of California.
Thank you, Mr. Chair.
Mr. Calvert. Ms. Solis.
Ms. Solis. Actually just a comment, not really a question,
regarding the growth in Southern California population and the
need for more water.
We definitely have to keep that balance with making sure
that as we do build, especially in our area where we are
heavily populated and looking for opportunities to provide
homes for some of these laborers and folks that work in the
construction industry, also is that we keep in mind how are we
going to keep those communities going if we don't have water
that is available? And I understand that we still have a lot of
discussion to go on this bill and others in terms of how water
is transported and how we do a better job of making sure that
when we provide for developments wherever they are, but most
importantly in areas like Riverside, San Bernardino, and parts
of my district, that we really plan ahead and work in
partnership so developers as well as the construction industry
and the communities that are going to be there--and I am
thinking about the problems we are facing right now with some
of our local schools, the fact that we create development
projects but we are not providing enough infrastructure dollars
as well to meet that demand, and we are seeing it happen over
and over again.
I just want to raise that as just a word of caution, that
we have to also keep that balance in mind. We have so many
priorities, you know, on our plate; and I just wish we could
work together to better understand what problems the folks in
the north, farmers face, and the folks down south where the
population is who also demand clean water and are consumers and
are paying, hopefully, for some good water to be in place for
their families and future generations.
That is my comment.
Mr. Calvert. Thank you.
Ms. Napolitano.
Mrs. Napolitano. Just something that I almost skipped over,
and that was salinity. That has been a major issue for my water
agencies. How do we become more aware of how government lands,
that normal runoff, does contribute to salinity, especially the
Colorado River and, of course, the Delta, but how do we address
it? Ken has made a great effort and has allowed us to bring
that heavily into the picture, but I think it bears a lot more
discussion, if you will, to see how much of that cost should be
borne by the Federal agencies whose lands are actually
providing that salinity in the area and get them to contribute
or participate in having that salinity cleaned up. Because I
know my water agencies pay millions of dollars to clean the
salt out of the water before it is delivered to the clients,
and that is a big concern because that money could be used to
expand other projects that will be helpful to the communities.
So we must not lose sight of that, specifically on how it
impacts the water agencies' abilities ability to perform. And
then, of course, there is Mexico.
Thank you.
Mr. Calvert. Thank you.
Mr. Schulz, I wanted to get a follow-up question to Ms.
Koehler's comments. How much water has been reallocated from
water use to the environment, from your perspective?
Mr. Schulz. Our estimate is in excess of 2 million acre
feet. You sort of have to go through an historical addition and
subtraction, and some things overlap. So it is hard to come up
with an exact number, but certainly there was 800,000 acre feet
under the CDPIA. There has been several hundred thousand acre
feet from the Trinity. Over the years, the water quality
control plant standards have become more stringent and required
more outflow which has reduced yield; and the process we went
through to get into CALFED whereby there was negotiations and
the December 15, 1994, accord resulted in the CDP and SWP
providing approximately a million acre feet to maintain the
fishery in some state of health while the CALFED process was
being developed. As I said, some of those overlapped like CDPIA
and quality control plant standards.
You have got to be careful that you don't double count, but
we are convinced that we have lost in excess of 2 million acre
feet during the time when the State was growing by about 10
million people.
Mr. Calvert. I just wanted to get that on the record.
Does that include some of the other court decisions, for
instance, that the Department of Water and Power has been
involved in?
Mr. Schulz. No. That does not--the impacts of, say, the
Mono Lake decision, the determinations on pumping in Inyo or
the Colorado River. This is just what has happened in the Bay-
Delta that we are dealing with in the CALFED program.
Mr. Calvert. Thank you. I am going to wrap this up because
we are getting toward the end of the day here and we have to go
back to the floor. I want to thank this panel.
Obviously, we have a significant problem in California and
throughout the West. As I said in my opening testimony, that
electricity certainly is something that we read about and live
with every day, but water is something we certainly can't live
without, and we have a problem. We face diminishing supplies in
the Colorado River if we meet our obligations under the 4.4
plan that has been negotiated, and I don't think we have a lot
of choices there to meet that obligations.
My friends in the upper basin States will make sure we meet
that obligation. As Ms. Napolitano was in Salt Lake City and
heard loud and clear, that is their demand.
We have diminishing water for various reasons. So it is
important that we work together, all of us, to pass legislation
that will move CALFED forward and to build water projects in
the State of California that will allow the State of California
to continue to prosper and to continue to be the golden State
that we all live in and love and want to continue to have as a
place that people want to be at and be associated with.
So, again, I want to thank you for your testimony in
answering our questions; and this hearing is adjourned.
[Whereupon, at 5:05 p.m., the Subcommittee was adjourned.]
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