[Senate Report 106-172]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 302
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-172

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           DICKINSON DAM BASCULE GATES SETTLEMENT ACT OF 1999

                                _______
                                

                October 6, 1999.--Ordered to be printed

                                _______


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 769]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 769) to provide a final settlement on 
certain debt owed by the city of Dickinson, North Dakota, for 
construction of the bascule gates on the Dickinson Dam, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill, as amended, do pass.
    The amendment is as follows:
    On page 4, lines 11 through 20, strike subsection 4(c) in 
its entirety and insert the following:

    ``(c) Costs.--(1) The Secretary shall enter into an agreement with 
the City to allocate responsibilities for operation and maintenance 
costs of the bascule gates as provided in this subsection.
    ``(2) The City shall be responsible for operation and maintenance 
costs of the bascule gates, up to a maximum annual cost of $15,000. The 
Secretary shall be responsible for all other costs.''.

                         purpose of the measure

    The purpose of S. 769 is to provide a final settlement on 
certain debt owed by the city of Dickinson, North Dakota, for 
the construction of the bascule gates on the Dickinson Dam.

                          background and need

    Title II of Public Law 94-228 authorized the Secretary of 
the Interior to modify the spillway of Dickinson Dam to 
increase storage capacity. The city of Dickinson was to repay 
the portion of costs allocable to municipal and industrial 
water supplies. Installation of a bascule gate was selected as 
the least cost alternative. The Bureau of Reclamation estimated 
that installing a fixed crest would cost twice as much as the 
gates. The city believes that a fixed crest would have cost 
less than the bascule gates. In addition, the city believes the 
gates were an experiment and not appropriate to a cold climate, 
thus costs increased due to overruns, poor design and 
lengthened construction time for modifications to prevent 
future excessive ice loading.
    Construction on the gates was completed in 1982. In 1987, 
the city's repayment obligation was reduced from $3.2 million 
to $1.625 million to offset cost increases from the original 
estimates. The $1.625 million debt is to be repaid over a 40-
year term at 7.21 percent. The annual payment is $124,872.51.
    In 1991, the city began receiving its municipal and 
industrial water from the Southwest Water Authority, which 
receives higher quality water from the Southwest Pipeline 
Project, and no longer requires the additional water provided 
by the bascule gates for its municipal water supply.

                          legislative history

    S. 769 was introduced by Senators Conrad and Dorgan on 
April 13, 1999. A hearing was held in the Water and Power 
Subcommittee on May 27, 1999. At the business meeting on 
September 22, 1999, the Committee on Energy and Natural 
Resources ordered S. 769, as amended, favorably reported.

           committee recommendations and tabulation of votes

    The Committee on Energy and Natural Resources, in open 
business session on September 22, 1999, by a unanimous vote of 
a quorum present, recommends that the Senate pass S. 769, if 
amended as described herein.

                          committee amendments

    During the consideration of S. 769, the Committee adopted 
an amendment that would require the city to pay annual 
operations and maintenance costs for the bascule gates, up to a 
maximum of $15,000. Annual O&M costs beyond $15,000 would be 
the responsibility of the Federal government. O&M costs have 
averaged about $9,000 over the past 10 years.

                         summary of the measure

    As ordered reported, S. 769 requires the Secretary of the 
Interior to accept $300,000 in lieu of existing repayment 
obligations for construction of the bascule gates on the 
Dickinson Dam. The measure also defines responsibility for 
operations and maintenance costs.

                   cost and budgetary considerations

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 1, 1999.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 769, the Dickinson 
Dam Bascule Settlement Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are John R. 
Righter (for federal costs) and Marjorie Miller (for the state 
and local impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 769--Dickinson Dam Bascule Gates Settlement Act of 1999

    CBO estimates that enacting S. 769 would increase direct 
spending by a total of about $600,000 over the 2000-2004 
period, but that the change in direct spending would be less 
than $500,000 in each year. Because the bill would affect 
direct spending, pay-as-you-go procedures would apply. In 
addition, subject to the availability of appropriated funds, 
CBO estimates that implementing S. 769 would increase costs for 
the Bureau of Reclamation by a negligible amount over the 2000-
2004 period. S. 769 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
and would impose no costs on state, local, or tribal 
governments. Because this bill would significantly reduce the 
amount owed to the federal government by the city of Dickinson, 
North Dakota, the city would benefit from its enactment.
    S. 769 would direct the Secretary of the Interior to accept 
a one-time payment of $300,000, less certain payments, from the 
city of Dickinson as settlement of the city's remaining 
obligations to the Bureau of Reclamation for constructing 
bascule gates on the Dickinson Dam. (Bascule gates are used to 
modify the amount of water that a lake retains.) In addition, 
the bill would divide the annual costs to operate and maintain 
the gates between the city and the Bureau of Reclamation; the 
city would pay the first $15,000 and the bureau would pay the 
rest. The federal government would retain title to the gates 
and dam.
    According to the Bureau of Reclamation, the city of 
Dickinson owes the federal government approximately $1.5 
million for the bascule gates, which the bureau constructed 
during 1980 and 1981. With interest, that amount will grow to 
about $3.75 million by 2027, the final year of a contract that 
requires the city to pay the federal government about $125,000 
each year.
    We estimate that enacting S. 769 would result in the 
federal government forgoing the collection of debt service 
payments from the city. For fiscal years 2000 through 2004, CBO 
estimates the amount of forgone receipts would total about 
$760,000. In addition to the regular payments scheduled for 
each of the next five years, this total includes about $135,000 
for the 1998 payment (including interest and penalties), which 
the city still owes. In exchange for forgiving the city's 
entire debt, the bill would require that Dickinson pay the 
federal government an amount equal to $300,000 less any 
payments made by it after June 1, 1998. According to the 
bureau, the city made a payment of about $140,000 in January 
1999; thus, the bill would require that Dickinson make an 
additional payment of only about $160,000. In total, CBO 
estimates that enacting S. 769 would increase direct spending 
by about $600,000 over the 2000-2004 period because we estimate 
the city would make a one-time payment of $160,000 to the 
Bureau in 2000 in exchange for relief from debt service 
payments of $760,000 over the next five years.
    In addition, S. 769 would require the city to pay for up to 
$15,000 of the annual costs to operate and maintain the bascule 
gates. The city currently pays the Bureau of Reclamation for 
all such costs. According to the bureau, a payment of up to 
$15,000 would cover its costs in most years. In years where 
such costs exceed the $15,000 ceiling, the bureau would have to 
use its appropriated funds. Thus, subject to the availability 
of appropriated funds, CBO estimates that capping the city's 
payment would increase costs for the bureau by a negligible 
amount over the 2000-2004 period.
    The CBO staff contacts are John R. Righter (for federal 
costs) and Marjorie Miller (for the state and local impact). 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 769. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 769, as ordered reported.

                        Executive communications

    On, April 21, 1999, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
the Interior and the Office of Management and Budget setting 
forth Executive agency recommendations on S. 769. These reports 
had not been received at the time the report on S. 769 was 
filed. When the reports become available, the Chairman will 
request that they be printed in the Congressional Record for 
the advice of the Senate. The testimony provided by the 
Department of the Interior at the Subcommittee hearing follows:

  Statement of Patricia J. Beneke, Assistant Secretary for Water and 
                  Science, Department of the Interior

    My name is Patricia J. Beneke, I am Assistant Secretary for 
Water and Science within the U.S. Department of the Interior. 
The Bureau of Reclamation is one of the bureaus that I oversee. 
I am pleased to be here today to provide the Administration's 
views on S. 769 to provide a final settlement on certain debt 
owed by the city of Dickinson, North Dakota, for construction 
of the Bascule gate on the Dickinson Dam.
    S. 769, the Dickinson Dam Bascule Gate Settlement Act of 
1999, directs the Secretary of the Interior to accept a one-
time payment of $300,000 in lieu of the existing repayment 
obligations of the city and reallocates all operation and 
maintenance cost of the Dam and Bascule gate for flood control, 
recreation, and fish and wildlife purposes. The Administration 
opposes S. 769 as drafted.
    A part of the Pick Sloan Missouri River Basin Project, the 
Dickinson Unit is a multipurpose unit which provides storage 
for irrigation and municipal water, flood control, fish and 
wildlife conservation and recreational opportunities. Dickinson 
Dam is located on the Heart River about two miles west of 
Dickinson which is the county seat of Stark County and the 
primary city in the region.
    In 1983, modifications were completed to the spillway of 
Dickinson Dam to increase storage capacity for the use by the 
city of Dickinson. Installation of the Bascule gate was 
selected as the least cost alternative for the spillway 
modification and the City was to repay all costs allocated to 
municipal and industrial water (M&I) supplies. In December 
1987, P.L. 100-202 reduced the City's Bascule gate repayment 
obligation from approximately $3.2 million to $1.625 million. 
This reduction was intended to offset the cost increases from 
the original estimate due primarily to inflation and interest 
during construction.
    The Administration has several concerns with S. 769.
    1. Capital Cost--The legislation, as currently drafted, 
would forgive the City of Dickinson of their remaining 
obligation of approximately $1.5 million plus interest they 
contractually committed to pay in contract number 9-07-60-
wo384. The one-time payment of $300,000 does not represent a 
fair or equitable payment to satisfy their obligation and would 
result in a loss to the U.S. Treasury.
    2. Reallocation--The proposed reallocation of the operation 
and maintenance (O&M) costs of Dickinson Dam to flood control, 
recreation, and fish and wildlife would effectively result in 
the United States assuming the Project's entire O&M 
responsibility. This is not an equitable solution since the 
benefits of the facility are almost exclusively local. Also, it 
imposes an additional financial obligation, presumably 
perpetual in nature and which currently varies from $1,500 to 
$24,000 per year, on Reclamation at a time when its budget is 
declining.
    3. Local Benefits--S. 769 proposes to forgive the City's 
debt and reallocates costs to the Federal government for a 
project whose beneficiaries are entirely local. The City 
continues to use project water to irrigate a golf course and 
dilute sewage lagoon releases. They also receive benefits from 
recreational use and fish and wildlife resources on the 
reservoir.
    4. Reduction in Payment--In addition to the one-time 
payment of $300,000, the legislation proposes to further reduce 
this amount by subtracting any payments made by the City's 
since June 2, 1998. This could result in a one-time payment of 
less than $15,000, furthering the loss to the Treasury.
    5. Clarification of Findings--Several statements in Sec. 2 
of S. 769 need clarification. First, item (1) states that the 
gate was constructed to provide additional water supply and for 
flood control and other benefits. However, the sole purpose of 
the Bascule gate is for municipal and industrial water supply 
as reflected in the 100% O&M allocation for the gates to M&I.
    Second, Item (5) states that the City has repaid more than 
$1,200,000 to the United States for the gate construction. This 
statement is inaccurate. First, there was the debt reduction 
from $3.2 million to $1.625 million included in P.L. 100-202. 
Second, the $1,200,000 repaid by the City accounts primarily 
for interest payments required under P.L. 100-202 leaving 
approximately $1.5 million of the original $1.625 million 
remaining to be repaid.
    Mr. Chairman, this legislation does not provide the United 
States an equitable return for construction costs of the 
Bascule gate or for the continued benefits the City receives 
from the Reservoir. However, we would be willing to work with 
the City, the North Dakota congressional delegation and this 
Committee to identify alternatives.
    That concludes my testimony, I am pleased to answer any 
questions.

                        changes in existing law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 769, as ordered 
reported.

                                  
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