[Congressional Record Volume 140, Number 80 (Wednesday, June 22, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 22, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  WATER AND THE CITY OF CORPUS CHRISTI

                                 ______


                         HON. SOLOMON P. ORTIZ

                                of texas

                    in the house of representatives

                        Wednesday, June 22, 1994

  Mr. ORTIZ. Mr. Speaker, I introduce a bill today to correct a long-
standing problem involving the U.S. Bureau of Reclamation and the city 
of Corpus Christi.
  In 1976, the city of Corpus Christi and the Nueces River Authority 
contracted with the Bureau of Reclamation for the construction of the 
Choke Canyon Reservior--Nueces River Project--on the Frio River near 
Three Rivers, TX. The primary purpose of the project was to provide 
additional water supply for the city of Corpus Christi through the year 
2040. Since project completion in 1982, however, subsequent studies 
have determined that the current supply to the city from the project is 
less than contracted for and additional water supplies may be required 
by the year 2003. The local sponsors are proposing that the repayment 
agreements be recalculated to reflect the diminished water supply 
derived from the project and the unanticipated expenses that the local 
sponsors are incurring to acquire additional water supplies to 
compensate for the projected shortfall in the Choke Canyon/Lake Corpus 
Christi system. After reallocating project costs and/or negotiating a 
fair settlement of project repayment obligations, the local sponsors 
are prepared to initiate a project buy-out and transfer of title 
utilizing a discounted prepayment of their fair share of project costs.
  Mr. Speaker, I am concerned about this situation and ask support for 
this legislation because, not only is the city not receiving the water 
it contracted for, they are facing very real water needs for the 
citizens of the Corpus Christi area. It is now expected that regional 
water demand for our area will exceed the supply within the next 10 
years and will amount to a 100,000 acre-feet per year shortfall by the 
year 2050. While already preparing to implement additional water 
conservation and system operating measures aimed at extending the life 
of its existing water supplies, the city is aggressively seeking to 
identify and develop additional water supplies to make up for this 
projected shortfall. As part of these efforts, the city is currently 
participating in a regional water supply planning study, the ``Trans-
Texas Water Program,'' which will identify economically and 
environmentally sound options for meeting the region's long-term water 
needs. Whatever option is decided on, the Bureau of Reclamation needs 
to help by adjusting the Choke Canyon project so that the city is 
paying only for what it receives. Key to the city's ability to afford 
these new water supplies will be a fair resolution of project repayment 
liabilities for the Choke Canyon Reservoir.
  Of the original $81.3 million in estimated project costs, the local 
sponsors provided $24.5 million in advance payments over the period of 
project construction. However, the city still owes the bureau 
approximately $72 million, based on estimated current total project 
costs of $133 million, which are 64 percent greater than the original 
contract amount. The city has requested the Bureau to complete its 
final accounting on the Nueces River Project, making every attempt to 
reallocate project benefits from M&I to recreation and fish and 
wildlife on the basis of the diminished yield for M&I use.
  The issue becomes one of making it affordable for the city to acquire 
new water supplies to offset the anticipated shortfall in system yield. 
The city has already made attempts to minimize the effects of the 
original repayment schedule on water rates. By setting up a special 
Choke Canyon Debt Reserve Fund, the city began setting aside moneys 
each year while some of the interest on the project debt had been 
deferred, intending to eventually have the sinking fund help stabilize 
the amount of annual payments funded by utility revenues. This fund 
currently has approximately $22 million in reserves. If the local 
sponsors' share of project costs could be revised to reflect the 
diminished system yield,, this reserve fund could be used to facilitate 
a local sponsor buy out of the project through a discounted prepayment 
of the debt obligation. One method of approaching the calculation of a 
fair repayment obligation on the project for buyout purposes is to 
reduce the original local sponsor costs to reflect the actual amount of 
incremental yield realized by the construction of Choke Canyon 
Reservoir, and then applying a discount factor to that amount. Again, 
Mr. Speaker, the city of Corpus Christi is taking a very responsible 
position on this problem. The numbers and figures in this bill were 
calculated by the city engineers and represent what I understand from 
the city to be as accurate an assessment of the water supply shortfall 
as can be obtained at this time.
  In addition, the city's position can have real economic and 
environmental benefits for the citizens of our area. First, if the city 
uses the $22 million in its reserve fund to pay off the Choke Canyon 
debt in advance, it can provide economic benefits at the local, 
regional, and Federal level. A cash payment to the Bureau to retire the 
debt would allow the Federal Government to transfer title to the local 
sponsors, therefore removing any long term liability, both in terms of 
the debt and tort claims. By reducing the amount the city owes on Choke 
Canyon Reservoir, the city can afford to finance the critical projects 
to import new water and to undertake other water resource management 
projects that both assure the long-term water supply for the region and 
protect the health of the Nueces Estuary. While no new reservoirs are 
expected to be built to provide additional water supplies, the 
construction of conveyance facilities to transport water from existing 
sources will require major capital investments and create hundreds of 
new jobs. Perhaps most importantly, the assurance of a long-term water 
supply for municipal and industrial demands will also encourage 
economic development in the region.
  Second, the release of freshwater from the reservoir system is 
designed to protect the ecological health of the Nueces Estuary by 
controlling salinities and providing nutrients and sediments. 
Currently, some 60,000 acre-feet per year of wastewater return flows 
are credited toward the 151,000 acre-feet per year release 
requirements. These return flows are primarily discharged into areas 
that are outside Nueces Bay, and it is felt that they have less benefit 
than freshwater inflows that enter Nueces Bay and the prime nursery 
areas provided by the marshes of the Nueces River Delta.
  One of the alternatives that the city has been studying is the 
diversion of treated wastewater effluent discharges to the Nueces Delta 
to provide maximum benefit of the freshwater and nutrients in enhancing 
estuarine productivity. The city is preparing to construct a project to 
demonstrate the feasibility of diverting wastewater return flows into 
the Nueces Delta. This $1 million dollar demonstration, if it proves 
successful, could lead to the city's routing a significant portion of 
the existing effluent discharges into the Nueces Delta so as to achieve 
the maximum environmental benefit of freshwater withdrawn from the 
reservoir system. This project complements the Bureau's own Rincon 
Bayou--Nueces Marsh Wetlands Restoration and Enhancement Project which 
is designed to provide more frequent freshwater inundations of areas 
within the Nueces Delta.

  As a part of these two demonstration projects, the city and the 
Bureau have been looking at the possibility of acquiring ownership of 
most of the properties in the Nueces Delta, some 8,000-10,000 acres of 
land. The concept has received the support of State and Federal 
resource agencies and locan environmental interests who are concerned 
about the overall protection of fish and wildlife habitat within the 
Delta and the rest of the estuary. It is anticipated that a partnership 
of local, State, and Federal entities, along with environmental groups, 
could coordinate efforts to acquire and manage the properties in the 
delta for these various projects and purposes. This property 
acquisition could also help to resolve the long-standing dispute over 
the Bureau's failure to acquire the approximately 8,000 acres of upland 
brush habitat that were stipulated as mitigation for the inundation of 
comparable habitat in the Choke Canyon Reservoir area.
  Mr. Speaker, the basis of this legislation is a proposal based on the 
compelling need to develop additional water supplies and to make the 
acquisition of those supplies affordable to the ratepayers in the Choke 
Canyon/Lake Corpus Christi service area. The city of Corpus Christi and 
the Nueces River Authority propose that the Bureau of Reclamation act 
promptly to restructure the local sponsors' debt obligations on Choke 
Canyon to reflect the actual yield of the project, and to transfer 
title of the project to the local sponsors in return for a discounted 
prepayment of the remaining debt.
  Without additional supplies, this region is facing potential water 
shortages within the next 10 years. In water supply planning 
timeframes, that is essentially tomorrow. The additional supplies 
available from Lake Texan need to be on line within that period. 
Without the economic savings that can be realized from restructuring 
the city's debt obligations on Choke Canyon Reservoir, it is going to 
be extremely difficult for the city to proceed with options for water 
supply.
  Mr. Speaker, I urge you and my fellow colleagues in the House of 
Representatives to support this measure and to allow the city of Corpus 
Christi to move forward on their water supply plans for the region.

                          ____________________