SPEAKERS CONTENTS INSERTS
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ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 1999
Wednesday, March 25, 1998.
BUREAU OF RECLAMATION
WITNESSES
HON. BRUCE BABBITT, SECRETARY, DEPARTMENT OF THE INTERIOR
PATRICIA J. BENEKE, ASSISTANT SECRETARY FOR WATER AND SCIENCE, DEPARTMENT OF THE INTERIOR
ELUID L. MARTINEZ, COMMISSIONER, BUREAU OF RECLAMATION
ROGER K. PATTERSON, DIRECTOR, MID PACIFIC REGION, BUREAU OF RECLAMATION
Mr. McDade's Opening Remarks
Mr. MCDADE. The Committee will come to order.
We have with us this morning three witnesses representing the subject matter before the Committee. All of you have been here before, I believe. You know that in this Committee, as in so many, we encourage you to file your official statement with the staff and for the record and to proceed extemporaneously to the extent you wish.
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In that connection, we recognize the Secretary of the Interior. Mr. Secretary, proceed in your own way.
Secretary Babbitt's Opening Remarks
Secretary BABBITT. Mr. Chairman, Committee members, it is a pleasure to be back. This is the sixth consecutive year I have come here as Secretary. I acknowledge with nostalgia and regret that this will be the last hearing, Mr. Chairman, that you and I will share together. I just want to say that it has been an extraordinary pleasure working with you in a bipartisan atmosphere, dealing with some very complex issues in a very productive way. So I just want to thank you for your attention.
Mr. MCDADE. Thank you very much. I will miss the functions and the people in the building and a lot of other people around the town.
Secretary BABBITT. I notice Mr. Fazio is now here and that I guess I could say much of the same of him. It is rumored that this is his last year with this Committee.
Mr. FAZIO. The filing deadline passed. It is no longer a rumor.
Secretary BABBITT. Okay. Well, it has been a great pleasure, and your watchdog approach to California issues has been noted throughout the Department, and it has been very productive.
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I have with me most of my team this morning, including two regional directors. To the extent that you actually want to get into details, I have with me Roger Patterson from Sacramento; and John Keys, the Director of the Northwest Region in Boise.
This will be John's last appearance as well. This is really kind of auld lang syne or something, because John will be leaving this summer.
Patty Beneke, the Assistant Secretary for Water and Science; and Eluid Martinez, the Commissioner of Reclamation, are here as well.
Mr. Chairman, I will be very brief; and then you can get into the substantive witnesses.
The President's budget request this year for the Bureau of Reclamation in direct funding is $776 million, nearly identical to last year's appropriation. There are, in addition to that, requests of $143 million for the restoration of the Bay-Delta system in California and approximately $40 million appropriated to my office for disbursement toward completion of the Central Utah Project.
There are, of course, many specific items that need discussing. I will leave that to Mr. Martinez.
In dam safety, I think we are making real progress. The water reclamation issues, I believe, are progressing very well. So I will confine myself to a brief discussion of the Bay-Delta issues, and then I would like to call your attention to two issues that are on the horizon. They are not reflected in any substantial requests this year. One is a Montana water settlement, and the second is a discussion about the restoration of the Salton Sea out in California.
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CALIFORNIA BAY-DELTA ECOSYSTEM RESTORATION
Let's start with CALFED and the Bay-Delta.
Mr. Chairman, we are on the verge of an historic success in California. This process has been unfolding over the last 5 years, with the assistance of this committee. In essence what has happened is that, for the first time in this century, it looks like we have brought the warring interests in California, north, south, urban, agriculture and environmental, together to see if we can meet the objectives of all the different parties for water supply, flood control, water quality management and environmental restoration.
The process began with the so-called Bay-Delta Accord in 1994, which set environmental standards for San Francisco Bay and the Delta. It proceeded on this year to the allocation of the so-called B–2 water under the Central Valley Project Improvement Act. It also involves, remarkably enough, a bond issue from the State of California of nearly a billion dollars, which was passed in 1996 by the voters for the purpose of cost sharing 50/50 the restoration requests before this committee.
Last week, the draft programmatic environmental impact statement for the overall water management plans was issued. Building pyramid fashion on all of these steps, the Accord, the B–2 allocations, the State bond issue, the joint consortium of State and Federal agencies, we now proceed toward what in the minds of some would have been impossible to even conceive of 2 or 3 years ago and that is a final water management plan bringing all of these strands together.
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Now it is in that context that we are back again this year with the President's request for $143 million which would be disbursed by the Bureau of Reclamation on a cost-sharing basis pursuant to a public process carried out by the CALFED consortium. It is a remarkable, historic convergence of problem solving, of collaboration between State and Federal agencies and 50/50 cost sharing.
Mr. MCDADE. Mr. Secretary, let me interrupt you because you know we had concerns last time—and Mr. Fazio couldn't have worked harder on this project if the day had been 48 hours instead of 24—but we all had concerns about kind of an open-ended approach to the Bay-Delta in terms of cost. There was some fuzziness about who was going to do what and where the responsibilities were. And we know that this year the budget is increased by almost 70 percent, which is a very large increase.
Let me ask you in that connection just a couple of questions. What do you anticipate the completion costs to be of this project?
Secretary BABBITT. Mr. Chairman, the requests that we are making are keyed to the contribution level established by the State bond issue, which is about half of the bond issue; I think about $450 million. That is all driven by an overall program which is now reflected in the draft environmental impact statements. There will be, in future years, additional costs, particularly for water augmentation and water storage.
This could be a 20 or 30 year program. We are talking here only about a significant start on ecosystem restoration on a cost-share basis.
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Mr. MCDADE. I am trying to get, as best we can, a ballpark number on the project.
Secretary BABBITT. Mr. Chairman, for the entire project?
Mr. MCDADE. Yes.
Secretary BABBITT. A ballpark number for the entire project, including the water management and storage components in the Bay-Delta, will depend upon which alternative is selected under the environmental impact statement.
CALIFORNIA BAY-DELTA ALTERNATIVES
There are three alternatives. One is to essentially stay with the existing configuration, in which case there would be a relatively modest cost. Bear in mind we have a 3-year authorization right now, only 3 years.
Mr. MCDADE. And you are in the second year of that, right?
Secretary BABBITT. And we are in the second year, yes.
But if the third option were chosen, which involves a reconfiguration of the Bay-Delta system, that would undoubtedly give rise to another authorization debate.
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Mr. MCDADE. As we look at this project, are you able to give me a scenario of potential costs, ballpark figures, depending upon the options that are chosen?
Secretary BABBITT. For the long term?
Mr. MCDADE. Well, the short term and the long term.
Secretary BABBITT. Short term——
Mr. MCDADE. If we look at the end of your authorization period just as a hypothetical.
Secretary BABBITT. Yes.
Mr. MCDADE. And I assume you are not going to complete within that time?
Secretary BABBITT. Well, again, it depends on which alternative is selected.
Mr. MCDADE. Well, would you kindly spell it out a little bit for us so that the Committee has a better understanding of what the options are, what kind of financial commitment, depending upon what happens, this committee can look forward to in the future?
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Secretary BABBITT. Okay. If option one is selected and the 3-year authorization expires, that is the minimal scenario. And those ecosystem improvements stand, you know, in their own context. You could walk away from this at the end of the 3-year authorization and say that the existing water supply system will remain the same.
Bear in mind that there are expenditures being made under the Central Valley Project Improvement Act as well, which are a separate item in our request. I believe that is an open-ended user contribution process that we can discuss.
At the other end is the so-called option 3, which would call for the construction of water conveyance facilities from the Sacramento River around the Bay-Delta into the Federal and State conveyance systems. That would surely be a 30-year project with a price tag of several billion dollars.
COST SHARING FOR BAY-DELTA RESTORATION
Mr. MCDADE. Several billion. Would you anticipate—I know this is a hypothetical—a 50/50 cost-share? How would you see that paid for?
Secretary BABBITT. I would anticipate that any Federal contribution would be a maximum of 50 percent, but that would require an authorization debate.
Mr. MCDADE. Yes, I understand.
Secretary BABBITT. I believe that the cost-sharing concept is really coming home in all of these projects, these restoration projects that we are working on, and that the presumptive figure is 50/50. Just as it has been in many Corps projects, I think it is now becoming the standard.
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Mr. MCDADE. Are you comfortable that within the chain of decision-making in this process, there is accountability for those who make decisions. I used to have an old saying that you never ask a planner to do something unless he identifies the funding streams. Otherwise, you get 16 volumes of plans; no way to pay for it.
What about the administration of it? I know last year there was a lot of concern about a kind of an open-ended decision-making process. Is there, in your judgment, a clear-cut line of authority and responsibility?
Secretary BABBITT. Mr. Chairman, I believe there is a 3-year plan for what it is we expect to do with this restoration process.
Now what is a little different about this process is that the Interior Department is passing these cost-shared funds through to 10 Federal agencies, four State agencies and some nonprofit groups which are involved in all of this. And it seems to me, if I may, the real issue is, is that process working? I believe it is. It is a highly public process.
There are two kinds of projects being funded here. One is projects proposed by the lead Federal agencies. Others are projects that come up from all sectors. They are vetted through two public processes. One is the Bay-Delta Advisory Council. The other one is the CALFED Steering Committee. The projects then come for my signature and distribution.
Mr. MCDADE. I know we talked to the Governor about it at some length with respect to the nonprofits on the State side, and he provided the Committee some information. Do you have a general organizational chart and one that would show a decision-making process—whether it was nonprofit or State agency or a Federal agency—that we might look at for further education? Could you supply that to the Committee?
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Secretary BABBITT. I would be happy to provide that.
Mr. MCDADE. That would be very helpful.
[The information follows:]
"The Official Committee record contains additional material here."
Mr. MCDADE. I didn't mean to interrupt you. It is an important subject.
Secretary BABBITT. These are important issues. Because I view my responsibility, as the disbursing agent, number one, to make sure that the process is appropriate and focused and, secondly, to follow up by auditing and accounting for the funds. I mean, the buck does stop here. We are not expending the money, but we are passing it through. We are making the grants.
Mr. MCDADE. Yes, you are the pass-through; and a lot of decisions are made downstream from you. I don't know that there is a level of interchange that is comfortable. I mean, there are a lot of decisions to be made, a lot of agencies involved; and I am sure coordination of all of those decisions is very difficult.
Secretary BABBITT. Well, this is a new way of doing business. There is no question about it. This is a brand new model, and so they are fair questions.
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Mr. MCDADE. Sure. We want a good model, all of us.
Secretary BABBITT. Yes. I also have Roger Patterson here. To the extent that you want to follow this up, he is the guy on the subject.
Mr. MCDADE. We may do that later on, Mr. Secretary. You proceed with your statement, please.
SALTON SEA
Secretary BABBITT. Okay. Just very briefly, the Salton Sea issue, I think, merits your attention. We have a very modest request for the Bureau in this year's budget for about a half a million dollars. I think we may seek to modify that slightly if it appears that the authorizing legislation is really moving.
Now, the Salton Sea issue, in a word, is basically this is a dead sea. It has no outlet. There are two problems on it.
Mr. MCDADE. By the way, the authorization appears to be kind of fast tracking, doesn't it?
Secretary BABBITT. Well, that is the intention of the House sponsors, to fast track it, yes.
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Mr. MCDADE. Okay. Go ahead, Mr. Secretary.
Secretary BABBITT. The issues are twofold. One is the increasing salinity from evaporation and concentration and, secondly, the fluctuating level of the lake.
The House proposal that is being fast tracked I think merits some attention. I think we all agree that the important thing is to put together an adequate environmental analysis process, rather than jumping to any conclusion about what needs to be done. There are proposals that range from a fairly modest diking program to connecting this body of water to the Sea of Cortez down in Mexico and actually making it a functional extension of the Gulf of California, the Sea of Cortez.
Obviously, there are cost implications in all of this; and our proposal is that the Bureau of Reclamation and the local authority, known as the Salton Sea Authority, undertake a rigorous look at all of the alternatives and that they be given the time and the latitude and a modest amount of funding to do that and to make certain that the scientific research about the causes of these wildlife die-offs in the sea are adequately taken care of.
Now, the House legislation is also written to fast track this process of analysis; and it is our judgment that it is probably unworkable in its current form. It also contains a $300 million advance authorization.
Mr. MCDADE. What do you mean?
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Secretary BABBITT. Pardon me?
Mr. MCDADE. Why did you say it is unworkable?
Secretary BABBITT. Because it has a fast track mandate to do the analysis. It waives some of the NEPA environmental procedures. It mandates us to be ready with construction design specs on an alternative chosen by us within 12 months, backed up by a $300 million advance authorization.
Mr. MCDADE. You think that is too much, too soon?
Secretary BABBITT. Yes.
Mr. MCDADE. Okay. Go ahead.
MONTANA WATER SETTLEMENT
Secretary BABBITT. Okay. Finally, I would like to give you some advance notice on a Montana water settlement that is now in the authorizing process. The budget has a request for the Bureau to continue working on the outline of that settlement.
It would involve a water supply and water rights settlement for an Indian reservation, water development for rural communities in Montana, and participation in cost sharing by the State of Montana. It would look analogous at least to the so-called Mni Wiconi project, which has been funded year by year by this committee.
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That would be a new start. It is in the authorizing process. We are working very actively on it, and I just want——
Mr. MCDADE. What is the level of cost sharing in that project?
Secretary BABBITT. I am not certain that it has been entirely worked out at this point, because we have said to Montana, we are responsible for the Indian water settlement side of it, and your cost-sharing should be linked to the development of water for rural communities beyond the reservation boundary.
The authorized amount for the whole Federal participation in the draft legislation is, I think, about $50 million.
Mr. MCDADE. Okay.
Secretary BABBITT. Is that about right?
Ms. BENEKE. I think so.
Secretary BABBITT. Mr. Chairman, that is all. There are a whole variety of other issues; but in light of time and the other witnesses, I think I would rest my case right there.
Mr. MCDADE. Thank you. We may be back to you.
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[The prepared statement of Secretary Babbitt follows:]
"The Official Committee record contains additional material here."
Mr. MCDADE. Madam Secretary, we are pleased to have you here; and please proceed in your own fashion.
ASSISTANT SECRETARY BENEKE'S OPENING REMARKS
Ms. BENEKE. Thank you very much, Mr. Chairman. I am delighted to be here again this year; and I, too, will be very brief.
My written statement underscores the importance of the California Bay-Delta budget request and also highlights several key aspects of the Bureau's budget.
In addition, consistent with the Central Utah Project Completion Act, the Secretary has delegated responsibility for that project to my office; and I would be very pleased to answer any questions you might have with respect to the CUP here this morning.
With that, again, it is a pleasure to be here; and I will pass the baton on to Eluid.
Mr. MCDADE. We will give you the award for observing the brevity that the House usually doesn't engage in. Thank you, Madam Secretary.
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[The prepared statement of Ms. Beneke and the Central Utah Project budget justification materials follow:]
"The Official Committee record contains additional material here."
Mr. MCDADE. We are delighted to have you back again, and please proceed in your own fashion.
COMMISSIONER MARTINEZ'S OPENING REMARKS
Mr. MARTINEZ. Before I address the Bureau's budget, I would like to personally extend my appreciation to you and Representative Fazio for your leadership and interest in the Bureau of Reclamation projects and programs over the years.
Having worked in this arena for almost 30 years and being a State official in charge of water for 4 or 5 of those years, I know that water is paramount to the economy, the environment and the social well-being of the West. Your leadership will be missed, both of you; and I extend my appreciation to you and thank you.
Mr. MCDADE. Mr. Martinez, we thank you for a 30-year career in public service.
Mr. MARTINEZ. Thank you.
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The Bureau of Reclamation is requesting $919 million in its fiscal year 1999 budget, of which $893 million is new budget authority and approximately $26 million is a transfer of unobligated balances from our working capital fund.
The request includes approximately $776 million for Reclamation's traditional programs. That reflects a decrease of about $8 million from our fiscal year 1998 level. The request includes $143.3 million for the California Bay-Delta Ecosystem Restoration Account, which has been discussed. Before I go on to the specific programs, I would like to touch on some issues that I think might be of interest.
RECLAMATION'S STRATEGIC PLAN
The Bureau of Reclamation has completed its 5-year Strategic Plan. It has been an interesting exercise by virtue of the fact that the Bureau of Reclamation's mission is evolving, and I know that you have asked some questions about that and that there are some concerns.
The Bureau of Reclamation, from my perspective, faced an interesting problem when it went into its 5-year Strategic Plan, because most agencies were not in the process of changing a mission or at least seeking to change a mission. The Bureau of Reclamation has undertaken that change and not without controversy. We solicited substantial input from our stakeholders and from water users out West. We took seriously the comments presented to us by Congress. We have put in place a 5-year plan, although it might not address all the specific concerns of every stakeholder. In this business of water you will never be able to do that. But I think it is a plan that has general acceptance. I travel extensively across the West, and I have heard generally good reactions to that plan.
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Our annual plan has been presented to Congress, and it outlines how we will implement the 5-year plan and, hopefully, what we are going to be all about in the next few years.
YEAR 2000 COMPUTER PROBLEMS
Another issue that I know is not in my written testimony, but an issue that concerns Congress, is whether Reclamation has identified and will correct all its year 2000 computer problems. We have identified those issues, and I feel confident we will address all of those concerns by mid-1999.
Mr. MCDADE. Good for you.
Mr. MARTINEZ. That should not be a problem for the Bureau of Reclamation.
Mr. MCDADE. How about the Department, Mr. Secretary? How does it look in the Department?
Secretary BABBITT. Mr. Chairman, OMB ranks the agencies. They have got a little ranking system.
Mr. MCDADE. OMB does a lot of ranking.
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Secretary BABBITT. Yes. I guess that is not the final answer, but we are in the top ranking from the OMB watchdogs. There are going to be surprises in this year 2000 problem.
Our major issue is this: I believe that, internally, we are on top of our systems, but we have got a very substantial interface problem with some of our user groups. The Indian tribes are a good example of that. I am not confident that we have uniform progress on this, and to have the originating system up but not the user systems up is going to have a result that is not good.
Mr. MCDADE. Flesh that out on the record a little bit, will you? Because we have to really educate a lot of people about the issue. They hear it talked about, but they don't understand some of the Draconian effects that could occur. Would you flesh that out a little bit, using the example, that you just mentioned, if you wish?
Secretary BABBITT. Well, the user agencies have been all over the map on this. Some, I think, are up-to-date; others aren't. And it applies to all of the Interior agencies.
But the specific issue that I would emphasize is the Indian nations. Now the importance of that is that is the one area where the Interior Department administers human resource programs, including a general welfare system, and a whole variety of individual entitlement programs. We do not administer them directly. We administer them—
Mr. MCDADE. Well, it seems to me, from what I have heard over the years, it is even higher than that. You are the trustee for those people; and, you have a more direct responsibility to that group than any in the country, it seems to me. So, I want to hear you tell me what the consequences could be if it isn't fixed and what you are going to do to try to make sure it is fixed.
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Secretary BABBITT. Okay. The consequences, of course, are the systems might crash and we would not have the capacity to get the information, the checks, the assistance, out to the beneficiaries.
Mr. MCDADE. The tribal funds, all sorts of——
Secretary BABBITT. That is correct.
Mr. MCDADE. And I suppose you would just describe it as cutting the link between the trustee and the people that are supposed to be the beneficiaries?
Secretary BABBITT. That is correct. And we have been taking extra steps to make this problem known to the tribal governments.
Now, you know, there may be some things we can do beyond that. I am not entirely clear what they are. But I understand your concern and will go back and have another look at this.
Mr. MCDADE. Yes, we encourage your attention to it, Mr. Secretary.
Mr. Martinez, I didn't mean to interrupt you. Go ahead, sir.
DAM SAFETY
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Mr. MARTINEZ. That is fine.
Mr. Chairman, approximately 50 percent of Reclamation's 600 dams were constructed between 1900 and 1950; and continued safety performance becomes a great concern with this aging infrastructure. We continue to place high priority on this initiative, and our budget reflects that concern.
Looking at the specific figures, it will reflect that there is a decrease in our request for dam safety this year, which might, on the face of it, appear to be contradictory; but the reason for that is that we have completed construction on some dams. That is the reason that the budget request is lower.
The other issue I want to bring to your attention is that the Bureau of Reclamation continues to operate its systems and dams West-wide to minimize the impact of El Nino effects.
We were instrumental in working with the Corps of Engineers in minimizing damage in California last year, and this year we put in place processes that to date we have not had to use to protect life and property in case of devastating floods out West.
WATER RECLAMATION AND REUSE PROGRAM
The specific request for the particular projects are mentioned in our budget, and I won't get into those. But I do want to draw your attention to one program that has generated considerable interest in the Bureau of Reclamation, and that is the Water Reclamation and Reuse Program.
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Our fiscal year 1999 request of $37 million includes funding for four ongoing projects that were authorized by Congress in 1992 in California, plus funding of minor amounts for Arsenic Wellhead Project in New Mexico, a wastewater reuse study in South Dakota and a comprehensive water reclamation and reuse study in California.
The 30 some million dollar budget request also includes $1 million for Orange County for a regional water reclamation project in California and includes $6.8 million for research and feasibility studies and to continue or initiate new construction starts.
The $6.8 million, which is new in the budget, is proposed to be used as follows: $1.1 million for assisting other project sponsors with feasibility studies and to review and prioritize projects for possible funding; $1 million for research and development activities; $4.7 million is for continuation of an existing project and three new projects which I know are of some interest to the folks in this room today.
We propose to spend $800,000 for continuation of the Tooele project in Utah; $1.3 million for new construction of the North San Diego County Project in California; $1.3 million for new construction of the Long Beach Project in California, and $1.3 million for new construction of the Calleguas Project in California.
Mr. Chairman, we in Reclamation went through an extensive process of ranking, using a criteria process, for determing those projects that should be recommended for initiation of construction funding, and I can provide that for the record.
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Mr. MCDADE. Please do so, without objection.
Mr. MARTINEZ. Yes.
[The information follows:]
"The Official Committee record contains additional material here."
Mr. MARTINEZ. This particular program, as you know, has significant implications in the outyears, in terms of funding. I want to recall that for the four projects in California, plus the 18 new projects that were authorized in 1996 under Title XVI, the outyear Federal commitment approximates $346 million; and I know there is extensive interest out West of other municipalities that are looking at this particular program. So we plan to work with you in addressing the needs of the municipalities and interests out West; but, at the same time, it has potential impacts on the Bureau of Reclamation's budget.
Mr. Chairman, that generally concludes my comments, other than specific issues dealing with the budget.
Mr. MCDADE. We thank you, Mr. Martinez, for your usual fine statement.
[The prepared statement of Mr. Martinez and the Bureau of Reclamation budget justification materials follow:]
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Office Folios 44 to 609 Insert here
MISSION OF THE BUREAU OF RECLAMATION
Mr. MCDADE. Let me just ask a question that seems to be being asked with some frequency now. My memory is that the Bureau of Reclamation goes back to the administration of President Roosevelt, Theodore Roosevelt, in 1900; and its purpose was to assist in the colonization, if you will, the development of the West. Some people think the West is now overdeveloped; and some people say, why do we need the Bureau of Reclamation? What is your answer to that?
Mr. MARTINEZ. Mr. Chairman, that same question was asked of me by Senator Domenici initially when I came to this office 2 years ago.
I believe, personally, that there is and will continue to be a need for the Bureau of Reclamation. The Bureau of Reclamation's original mission was to develop irrigation projects and water projects for development of the West, but it also managed those projects and continues to manage them. It wasn't just an agency that built the physical project and walked away. It managed the projects for the purposes that those projects were authorized.
Over time, Congress has passed laws dealing with environmental issues, that require the Bureau of Reclamation to manage those projects consistent with those laws.
The Bureau of Reclamation today delivers water to 10 million acres of land in the West and provides municipal and industrial water, to over 30 million people. It is the Country's largest water wholesaler. We generate a lot of electricity.
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Mr. MCDADE. Excuse me, Mr. Martinez. I recognize that, and the committee is aware of the tremendous impacts that the Bureau has had in the West. But a lot of those impacts date from the huge construction projects—Hoover, Shasta, et cetera—that really did open up the West and created incredible wealth in the country. Those days are over, aren't they?
Mr. MARTINEZ. The days of building dams——
Mr. MCDADE. Yes.
Mr. MARTINEZ [continuing]. For practical purposes, might be over.
Mr. MCDADE. The water resource system, outside of the maintenance and management of it, is in place. Some people say, for example, if you consolidated, there would be no impact on the mission but a lot of saving to the taxpayers at a time of stress on the budget. Do you agree with that?
Mr. MARTINEZ. No. Who would you consolidate with?
Mr. MCDADE. You don't think there would be any savings to be had if that occurred?
Mr. MARTINEZ. In my personal opinion, the costs would remain the same, if not go up.
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Mr. MCDADE. Go up. Okay. Would you explain that to me, please?
Mr. MARTINEZ. Unless the functions and the duties and the responsibilities were to be done away with, you would still have the same charge, the same tasks that have to be performed.
Mr. MCDADE. When you get up in the morning and look over your domain, what is the first question you ask yourself?
Mr. MARTINEZ. What am I doing here in Washington?
Mr. MCDADE. You have got a lot of company in that one.
We are glad you are here.
Mr. MARTINEZ. No, seriously——
PRIORITIES FOR THE BUREAU OF RECLAMATION
Mr. MCDADE. What is the top priority that the Bureau has now?
Mr. MARTINEZ. The top priority, aside from dealing with these issues of wastewater reuse and helping rural water systems trying to put systems in place to deliver water, is the management of water out West, working with States, with cities, with the counties in trying to manage water, and bringing to the table the Federal perspective on issues.
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For instance, in my State of New Mexico, we have a Rio Grand compact involving three States. The Bureau of Reclamation continues to be a vital player in how that water is managed and provides resources to help resolve issues.
On the Platte River, the Bureau of Reclamation can usually work with those States.
I visited the State engineer of Kansas. They are about ready to enter a lawsuit with Nebraska. His question to me is, what can you bring to the table to try to help Kansas and Nebraska to resolve some of these issues?
So there is a place out there.
Mr. MCDADE. There is no argument that there are responsibilities to be carried out. The question is, what is the best way to do it in terms of efficiency for the taxpayers, et cetera?
POSSIBLE CONSOLIDATION WITH CORPS OF ENGINEERS
For example, the Corps of Engineers comes in here and testifies; and they do very much the same things that you are talking about. Should there be a consolidation between the Bureau and the Corps?
Mr. MARTINEZ. Mr. Chairman, if you wish to consolidate the Corps of Engineers with the Bureau of Reclamation, I would entertain that.
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Mr. MCDADE. Were you in the Army? Do you want to reup?
Mr. MARTINEZ. I believe the two agencies have different roles. Having been in the business of water administration, the first thing I noticed when I came to the Bureau of Reclamation was—I think I expressed this to you—that we had put out a ''Blueprint for Reform'' that says, basically, the Bureau of Reclamation is going to not emphasize construction and go into water management. And I said, good luck. Because it is more difficult than it appears to move from construction to water management.
I want to leave this thought with you. The Bureau of Reclamation has been in the area of management of water since its inception. This is not a new activity.
Mr. MCDADE. Indeed.
Mr. MARTINEZ. What is different today than in the past is that the water resources that the Bureau of Reclamation developed primarily for agricultural purposes are now being viewed as a source of water for other uses, whether those be environmental or municipal and industrial purposes. The role that the Bureau of Reclamation will play in the Federal Government on movement of that water from agricultural purposes to M&I purposes is a role that is evolving, and I think there is a place for the Bureau of Reclamation to serve in that capacity.
Mr. MCDADE. That connects, doesn't it, to your concept about a new mission?
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Mr. MARTINEZ. It plays into that.
Mr. MCDADE. I beg your pardon?
Mr. MARTINEZ. It plays into that new mission of being a manager of water resources.
Mr. MCDADE. Yes. I mean, I think even in the reinventing government treatise it is suggested that, without a new mission, the Bureau should be excessed.
Mr. MARTINEZ. Well, we have a large staff that operates and maintains facilities. In the absence of the Bureau of Reclamation, that staff would have to be put someplace else.
Mr. MCDADE. We are not arguing about those responsibilities. We are talking about the most efficient way to do something. And a lot of people say that the reason for the so-called new mission is that the old mission is completed. There are ways to consolidate and save a lot of money. Nobody is arguing that.
Mr. Martinez, let me make it clear to you that you do not do a good job. We think you do an excellent job. We are talking about whether it is time to look at a reorganization, whether it is time to look in new areas.
AUTHORIZATION FOR RECLAMATION'S NEW MISSION
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For example, the Committee last year in its report said that the Committee is not indicating its agreement that you can simply create a new mission for yourself, which appears to us up here to be a little bit of what is going on. We further stated in our Committee report that the roles and missions of Federal agencies are established through the legislative process and cannot and should not be changed by the agencies. In other words, you have to get authority from the Congress to begin a new mission.
It doesn't seem to us that you have had a vetting of that authority. You have a generic statute, but you are really making a transition from what had been a long-time, successful program—which still needs management—into a new area that hasn't really been explained in detail to the committee that has general responsibility, i.e., the authorization committee.
You don't have specific authorization for the new mission, do you, sir?
Mr. MARTINEZ. It is my understanding that everything the Bureau of Reclamation does today and continues to do is under authorization that we have from Congress.
Mr. MCDADE. Your generic authorization?
Mr. MARTINEZ. Yes, and specific authorizations, like Title XVI programs.
Mr. MCDADE. Yes. Well, I'll tell you what to do. I don't want to spend an inordinate amount of time on this, but I would appreciate it if you would at this point in the record explain your legal justification and send a note up to the Committee that shows the legislative underpinnings of your mission. Will you?
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Mr. MARTINEZ. I will do that.
[The information follows:]
"The Official Committee record contains additional material here."
NEED FOR BUREAU OF RECLAMATION
Mr. MCDADE. Go ahead, Mr. Secretary.
Secretary BABBITT. Mr. Chairman, I can't resist. Could I just add a word or two to this? These are important questions, I think.
When I became Governor of Arizona, I was a hard-charging young Turk; and I looked around and I said, we ought to kick the Bureau of Reclamation out of Arizona. I looked around, and Jerry Brown was Governor of California, and Dick Lamm was Governor of Colorado. We were all hot-blooded, you know, young reinventors; and we said, by golly, we can run the Colorado River system and just discharge the Bureau of Reclamation and take over Hoover Dam, Glen Canyon Dam, Flaming Gorge and do it.
That conversation lasted for about 6 months. Because my constituents who are sitting here and their predecessors said, are you kidding? Let California have a voice in the operation? We have been fighting, drawing blood in a battle for 50 years. No way.
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The upper basin came screaming down and said, ''The political power's in the lower basin, but Glen Canyon Dam is ours. It may be located in Arizona, but it belongs to the upper basin.'' These interstate issues are very real.
Secondly, the Corps of Engineers, Bureau of Reclamation interface is something that ought to be examined. I can tell you that war has been going on for all of this century.
Mr. MCDADE. We don't want a war. I remember when I was assigned to the Interior Subcommittee 36 years ago, as an Easterner to keep Westerners like you honest.
Secretary BABBITT. Exactly.
Mr. MCDADE. The first thing I learned was that if you want to get the attention of a Westerner, you simply say, ''water.''
Secretary BABBITT. You got it.
Mr. MCDADE. We know about all of those fights and the Supreme Court arguments, and the record is replete with them. We are really trying to get down to a question not of avoiding responsibility but whether or not there might be a potential, as you just mentioned, to examine this issue—not in a war-like fashion—of whether we can consolidate.
Every budget that comes up here is under enormous pressure, and I don't know whether there is any potential for huge savings. You would have much of the same responsibility. But maybe there is. Maybe there is some duplication that could be avoided. That is what we are trying to get to.
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Secretary BABBITT. It is——
Mr. MCDADE. It is an important question.
Secretary BABBITT. It is indeed. It is indeed.
Mr. MCDADE. I appreciate your Western history, and I know a little bit about it, and we appreciate it.
Mr. Martinez, did you want to finish up?
Mr. MARTINEZ. No, that is fine. I will provide that information.
Mr. MCDADE. I am delighted to yield to my friend from California.
MR. FAZIO'S OPENING REMARKS
Mr. FAZIO. Thank you, Mr. Chairman.
I would like to welcome everybody, and I would begin my history lesson for the day by reminding everybody about what was termed Jimmy Carter's ''War on the West,'' which was the last time anybody seriously proposed merging the Corps and the Bureau, as I remember. He vetoed a bill or two. He would have really enjoyed the line item veto, but that interlude had not occurred.
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So Ronald Reagan came riding into office, in part because of the War on the West, and promptly—in effect with one letter—undid the traditional subsidies that really created the Bureau as we knew it up until those days in the early 1980s. The transformation of the Bureau occurred during that era, and I think today it is functioning very differently.
While the Bureau may not be—and we will get to Animas-LaPlata later—carrying on the same kind of dam-building tradition, it is, I think, important to the way the West works out its issues. Regional problems continue—and we will talk about the Salton Sea, too—to be a very, very high-priority concern for all of us out there, and I think the role that Eluid and his people play has been increasingly important as we sort out who gets the water in the West. And every one of these issues we are going to talk about today essentially involves that debate.
So, Mr. Chairman, I guess I am a little bit jaded. The ongoing discussion of merger has been around longer than even we have, and I am sure will continue to be. But, ultimately, we have to look to Federal agencies. Certainly I think the Bureau has been doing an excellent job in helping us sort out our dilemmas; but those dilemmas are deeply troublesome, even within a watershed, even within a basin, let alone between them.
I would simply like to say, having worked with the Bureau directly on this Committee for the last 19 years, how much I appreciate the excellent work that we have had from the Department and from various commissioners and also, frankly, our regional directors.
CALFED PROCESS
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Roger Patterson is here today, and he is doing an outstanding job for the Bureau and the CALFED process, and I think he is typical of the many people who have been part of this institution and who continue to make a real contribution to the public interest.
So I want to begin by thanking all of you for what you continue to do to help us sort out our problems.
The one that, of course, is at the top of the Chairman's list is CALFED. I would be interested to hear perhaps from anyone at the table, but Roger as well, as to his evaluation as to how that is going.
Mr. Chairman, we do have a $440 million authorization which we are whittling down more slowly than we had initially anticipated, having appropriated $85 million instead of $143 million last year. I am assuming we are going to have to stretch that out a year or two in order to get it done; and I think Mr. Ogsbury would appreciate that, given the dilemma this Committee was presented with by the Corps' budget which was reduced so deeply as to be unbelievable.
I do think we all anticipate further authorization should some of the CALFED issues be resolved and funded at the State level as well. That billion dollar bond act we passed was pretty impressive for cost-sharing purposes. We have another, related one that may be on the ballot this fall. But it all comes down to whether the stakeholders—the various players in the State/Federal picture as well as the interests, the environmentalists, the urban water users and the traditional ag users—are going to agree.
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I hope Roger can, for the benefit of the Committee, give us perhaps an update, if the members at the table would be forebearing, as to where we are in this process.
I want to thank the Committee staff, by the way, for its investment in time to try to come to grips with this issue, because it is different than the traditional line item approach we have taken here. I think we are, at the same time, making progress, with the Federal agencies playing a very key role in sorting out how we spend our money.
Welcome, Roger.
REGIONAL DIRECTOR PATTERSON'S REMARKS ON CALFED
Mr. PATTERSON. Thank you very much. I appreciate this opportunity.
CALFED is still a work in progress. I think we all acknowledge that. It has come a long way in the last year. I think the issue of accountability and decision-making, at least to me, is very clear how that is working. It is the most public process that I have been involved in and is moving ahead. Decisions are made, and I think good decisions, on how we are going to spend the money. It is a very deliberate process of sorting out priorities.
We have filed and started public debate with the draft environmental document. Several months now will be consumed in trying to bring people together around that; and the money continues to flow on the California side, which is important.
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So I am optimistic. I am encouraged at the way it is going. To take 15 agencies and have them move together as we have is quite an accomplishment, and I feel good about the way that CALFED is going and will go in the future.
Mr. FAZIO. You might discuss, for the Committee's benefit, some of the dilemmas we are facing right now in terms of: whether we are going to be doing water marketing; whether we are going to have something the Secretary knows well, groundwater management controls; or whether we are going to have new surface water impoundments. We used to call those dams and reservoirs. But, are we going to be doing more storage, whether it is underground or not?
These are some of the dilemmas. You might give the Committee a brief thumbnail as to where we are in the deliberative process. You might even use the politically incorrect term ''peripheral canal.''
Mr. PATTERSON. I will be careful on that one.
We are in the middle of the process. At this point, all of those things are on the table. The document that was put out has everything from more aggressive management on the demand side, conservation, recycling, et cetera, to legitimately looking at additional storage, both surface storage, new reservoirs but particularly additional groundwater storage. I mean, these are all on the table, and they are being hotly debated, and I think that is the way it should be.
They have been debated for 30 years but never in the fashion that it is now. There is so much riding on the outcome of this discussion, and I think all sides realize that and are going to push hard for their interests. But, ultimately, the success will be in arriving at some place in the middle so that we can resolve some of these problems.
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Mr. FAZIO. Just for the Chairman's benefit, how do we go about making the decisions as to how the money will be spent? He is concerned, I think, as others would be, that we provide the funds and don't have enough accountability at the level of Federal expenditure.
THE ECOSYSTEM ROUNDTABLE—CALIFORNIA
Mr. PATTERSON. We will try to get additional information because it is a fairly complicated process. However, by and large, priorities for what are called stressors and the various species are set by a combined government and private sector group. This group is called the Ecosystem Roundtable, a subset of the overall stakeholder group called the Bay-Delta Advisory Council. Through that group, we do the debate on what are the priorities for available funding. A preliminary decision is made on how much might we spend in each of these categories.
There is a public solicitation process to allow anyone that has a good idea, from the university to a government agency to a nonprofit, to come in, in some fairly high level of detail, describing projects that would meet these goals.
[The information follows:]
"The Official Committee record contains additional material here."
Those are evaluated by the Ecosystem Roundtable. They then come to a group that includes folks——
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Mr. MCDADE. How many people is that?
Mr. PATTERSON. I think it is about 20 to 24, something like that.
Mr. MCDADE. How many represent either the State of California, the Federal Government and how many the nonprofits?
Mr. PATTERSON. These essentially are all non-State, Federal agency folks. These are all basically from the interest groups. From there, there is a group that we call the integration panel that is made up—and that is where a lot of the technical expertise and program expertise of the agencies comes in.
CALFED MANAGEMENT AND POLICY TEAM
The Ecosystem Roundtable recommendations are filtered through another review process—the CALFED Management Team who massages and gets questions answered, then makes a recommendation to the CALFED Policy Team, which is co-chaired by——
Mr. MCDADE. Who is on that?
Mr. PATTERSON. Doug Wheeler, who is the Secretary of Resources.
Mr. MCDADE. I don't need names, but I mean what is the team's composition?
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Mr. PATTERSON. California Resources——
Mr. MCDADE. Yes.
Mr. PATTERSON. California Resources Agency, which is essentially the Department of Interior for the State of California. It is co-chaired on the Federal side by Bob Perciasepe at EPA, and it includes policy level people from all ten of the Federal agencies and all five of the State agencies.
Those decisions then are made there for ratification by Secretary Babbitt and Secretary Wheeler.
Mr. MCDADE. Are decisions made by a majority vote? Is that how these things are done?
Mr. PATTERSON. We have had consensus so far.
Mr. MCDADE. So you haven't had to have a vote; but, if you did, that is the way it would occur?
Mr. PATTERSON. We have never laid down that rule.
Mr. MCDADE. I beg your pardon?
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Mr. PATTERSON. We have never had to define the rule of whether we are going to vote.
Mr. MCDADE. So far you are encouraging consensus then?
Mr. FAZIO. They talk each other into submission.
Mr. MCDADE. I wouldn't be surprised.
Mr. PATTERSON. If one of the agencies has a strong objection, we take it seriously and try to work our way through it. So far, we have been able to resolve those. Maybe in the future we will have to refine the rules.
Mr. MCDADE. Go ahead and just discuss that policy group that you were talking about. Tell us how that is composed, please.
Mr. PATTERSON. It is made up of membership of the 15 State and Federal agencies, co-chaired by the Secretary of Resources on the State side and Bob Perciasepe from EPA on the Federal side. Those decisions then go to Secretary Wheeler and to Secretary Babbitt for the final sign-off.
So it takes—you know, it takes 60 days, basically, to go through the public discussion, review and final buy-off. But by the time we have done that, we think we have got a pretty solid program.
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Mr. FAZIO. There probably are a number of other things we could get into on that subject, but I think at the moment we will move on to some others.
CENTRAL VALLEY PROJECT IMPROVEMENT ACT
The Central Valley Project Improvement Act, the so-called Miller-Bradley Act, passed a few years ago; and we have a restoration fund made up of user fees that we basically appropriate here. We had some discordant notes last year when we provided funds in a way that caused some people to think we had lost sight of our purpose. Could you tell us about the budget this year for the CVP restoration fund and reassure anybody who might have any doubt about what our real purpose is?
Mr. PATTERSON. We have a very strong program this year for the Central Valley Project Improvement Act. We have about $27 million, $28 million in appropriations, another $30 million-plus from the restoration fund, which is water and power surcharges. Then the State of California is putting about $30 million of cost share money. So it is about a $100 million program in fiscal year 1998.
And we have at least that much in needs. We have been struggling with getting priorities to make sure that we are spending that $100 million on the highest priorities, but there was a lot of debate last year about a so-called water acquisition reserve set-aside.
We have not moved further with that idea. We continue to think there is some merit there, and we are working with some of the stakeholders to refine that. But we are going to have—we are estimating only about $5 million carryover into 1999, and that is primarily just working money to get us through until the collections will start again in 1999.
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Mr. FAZIO. The point is, the carryovers will always be spent. It may not be spent quite as rapidly as some would want.
This, for my colleagues' benefit, is all money that is generated within the State by the beneficiaries, so to speak, even though we do appropriate it. It really has, in effect, relieved this Committee of some of its burden; and I want to make clear that this is not just more Federal taxpayers' dollars flowing into one place.
SALTON SEA
On the Salton Sea, Mr. Secretary, you mentioned a concern you have, and I share it: are we talking about getting water from northern California for the Salton Sea or from the adjacent Colorado River Basin States?
You mentioned the Sea of Cortez. Is that the Gulf of Mexico in some other lexicon? I just wondered.
You know, it would be divisive in any direction we went for this water; and to do it all in a year seems to me rather optimistic, if not politically opportune.
Secretary BABBITT. Mr. Fazio, I would say there are two categories of proposals for dealing with the salinity problem and stabilization. The Bureau has actually done some studies, which you may have seen. They are on the modest side. They relate to the concept of diking off portions of the lake. You can actually keep diked areas, where there is some inflow, fresher by pumping the water over the dike into the larger evaporation area of the lake. It is a common, understood technique.
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There are larger proposals which would have both new freshwater inflow and an outlet, because if you are going to put a lot more water in, you have got to have it flowing out the other end of the lake. And the various proposals have included building a canal southward across the Mexican border into the Sea of Cortez.
Now, there are two variants. One is the canal would be the outlet and also the intake, and you would pump water because sea water is much less saline than what we have got in the Salton Sea. We circulate the whole thing through.
The other variant is to bring in water from the Colorado River and then have an outlet into the Sea of Cortez.
Mr. Chairman, those are large proposals, even by historic standards of reclamation projects.
Mr. MCDADE. I remember years ago the Department was proposing a saline water project at the end of the Colorado River because they weren't delivering the agreed upon amount to Mexico. That has got to be, what, 15 years ago?
Secretary BABBITT. Well, that is correct.
Mr. MCDADE. And I assume we are still in the same situation, without the saline water plant.
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Secretary BABBITT. Well, we have the plant. We just don't use it.
Mr. MCDADE. The good news is we have it. The bad news is it isn't working. Is it one of the osmosis plants?
Secretary BABBITT. It is a reverse osmosis plant, yes.
Mr. MCDADE. Thank you.
Mr. FAZIO. This is a long-standing bipartisan concern that our delegation has, but the resolution of it is not going to be just an engineering problem. The politics of allocating Colorado River water at this point have already gotten to be pretty complex.
I do want to simply state for the record that I share your concern for coming up with an answer under the circumstances. I know it is being driven by events that you know we all understand, but I don't believe it is going to be that simple to do, although I think we do need to press on.
Commissioner, did you have a point you wanted to make on that?
YUMA DESALTING PLANT
Mr. MARTINEZ. On the question of the desalting plant, the plant down in Yuma is in standby operation. It is capable of being put back in operation within one year. It has not been used because of high flows in the Colorado River which have made it unnecessary to use that plant. However, in case it ever is needed, it is capable of being used.
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Mr. MCDADE. Yes. I know the one that was in San Diego is now in Guantanamo Bay supplying water at the naval base in Gitmo for, I guess, about 30 years now.
Mr. MARTINEZ. We have put in place a research institute at the Yuma plant that we are using to develop new technologies.
Mr. MCDADE. In saline water?
Mr. MARTINEZ. In saline water, yes.
Mr. MCDADE. I should tell you that years ago I went to San Diego to visit the saline water projects the Department was operating on the West Coast, and I had a very interesting tour with a Ph.D. who was in charge of the research. And on the first day before we got to the first plant, he said to me, ''Congressman, go back to Washington; close these stands.'' I said, ''Close them?'' And he said, ''Yeah. We have learned everything we can in this process. Don't spend any more tax dollars.''
He was the first person I think I met, maybe then or since, who said don't spend any more money here. He wanted to shift over to a reverse osmosis process. And ultimately the office was closed, as you know.
Mr. MARTINEZ. Yes.
ENDANGERED SPECIES ACT CONCERNS
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Mr. FAZIO. Let me ask about the Endangered Species Act as we have top level department management here. We had an apparently successful effort to tighten up the time frame that the Fish and Wildlife Service has required for flood protection projects. As you know, we attempted to fix our flood system in California rapidly. The Corps did an excellent job, and Fish and Wildlife apparently contributed to shortening the time frame very dramatically.
But I would be interested in your overall thoughts about how we continue to do water development and flood protection in California, with the cooperation of this very important agency of your department. We have several fish runs that are threatened, some that are already listed as endangered, such as steelhead salmon runs. Are we coordinating as well as we can with all the other agencies, including, I might add, the National Marine Fisheries Service that has authority to list most of these species? It is obviously a major economic issue for much of the area I represent.
Secretary BABBITT. Congressman, our experience, I think almost without exception, has been that we can reconcile the demands for municipal, industrial and agricultural water with flows and water quality protections required by the Endangered Species Act if we are inventive enough and smart enough to look at conjunctive use, water efficiency, water conservation, water storage, and market transfers of water. I think we are now crossing that divide. It has been a slow and painful kind of process, because the concepts are new.
The most striking example of this is the current discussion going on between the Metropolitan Water District in Los Angeles, the City of San Diego and the Imperial Valley Irrigation District about the transfer of agricultural water rights in a market purchase and sale transaction across into the San Diego water market. Those are going to become more and more common. It is just one example of how it is I believe we can reconcile these competing demands.
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Mr. FAZIO. The Salton Sea is not very far from the Imperial Valley, is it?
Secretary BABBITT. The Salton Sea borders the Imperial Valley, and we will have an interesting set of consultation issues under the Endangered Species Act there as these transfers go forward, I mean unavoidably. But I am confident it can be worked out.
Mr. FAZIO. So we are talking about bringing water in on the one hand, and on the other hand, we are talking about exporting water to M&I users either through the MET in Los Angeles or over to San Diego?
Secretary BABBITT. That is it.
Mr. FAZIO. That is kind of the typical irony of California, isn't it?
Secretary BABBITT. It absolutely is.
Mr. FAZIO. Yes.
Mr. BABBITT. It absolutely is, although in fact the transfer is really easy to do because the water would never reach the Imperial Valley. It would simply be diverted through the Parker Aqueduct.
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animas-laplata
Mr. FAZIO. Yes. I would like to ask a Colorado question now.
By the way, Mr. Chairman, we are pleased to have with us Jay Rhodes and Ray Kogovsek, two of our former colleagues today. This has nothing to do with my question, I want to make clear.
Animas-LaPlata has been before this Committee for years, predating my time here, and I know it will postdate it as well. I am wondering if the Department might give us some sense as to what it might recommend and what it is doing to evaluate the process that the Governor and Lieutenant Governor of Colorado have been engaged in, which is to try to scale back the Animas-LaPlata—the traditional project that we have talked about forever—to something that would either be, as some have termed it, Animas Lite, or something that would reflect the dug-in position of some environmentalists: a simple water rights buy-out plan without any construction. The Committee inevitably has to deal with this, even if you don't ask us to.
Secretary BABBITT. Sure.
Mr. FAZIO. This is always fodder for a food fight and we would like to know if the Department would like to participate in it.
Secretary BABBITT. Well, we are not eager to get into the middle of this, but let me tell you what we have done.
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Mr. FAZIO. That has been evident over a number of years.
Secretary BABBITT. About a year and a half ago, I went to Governor Romer because we had had considerable success working with the Governor getting consensus solutions on a whole variety of things. We actually put together a plan for the Platte River, and Governor Romer was in the front of that.
The final grazing regs were thrashed out with his help in a roundtable in Colorado. With high expectations we said, okay, now having done the impossible in the Platte, let's try Animas-LaPlata.
Those discussions, as you know, went on for approximately a year searching for a consensus. It didn't happen. I mean, there are limits on what you can do in a consensus process.
As you described, two alternatives came out of that process. One, settle the Indian water rights by purchase of existing water rights; secondly, the so-called Animas Lite.
Now, there was language in this Subcommittee's deliberations last year asking the Bureau of Reclamation to study the work product of this Commission. The Commissioner, back in, I believe, November, started that study and said we can do it within 6 months, and I believe he is on track. He can tell you about that, but he is on track to an analysis of Animas Lite and the water purchase alternative, which should be completed within the next couple of months, I think, within the next 60 days.
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Now, in the meantime, Senator Campbell has introduced a bill which would give us direction from this Congress to proceed with the Animas Lite version. That is where we are.
Mr. FAZIO. And the Department is doing a study which will be terminated at what point?
Secretary BABBITT. The Bureau's study of these——
Mr. FAZIO. The Bureau's study.
Secretary BABBITT [continuing]. Options should be available—it has to be cleared by OMB, and obviously we don't have control over that. But I believe our study will be sent up to OMB, Eluid, within the next 60 days?
Mr. MARTINEZ. That is correct. I have reviewed the preliminary draft. The study is looking at some basic questions with respect to both of these proposals—the amount of environmental studies required to advance either proposal, whether either proposal meets the intent of the settlement act, and whether they are feasible.
I came under some criticism for doing the study of both alternatives, but I realized that there were going to be questions with respect to both alternatives. There are Members of Congress that are supportive of one or the other alternative. And I needed to be prepared to be able to respond to those questions. I believe that report will be completed from the Bureau of Reclamation's perspective in a couple of weeks and will be forwarded for review. I have no control as to how long it will take to go through the review process. But I hope to be prepared to respond to questions at the time that Senator Campbell's bill is debated.
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Mr. FAZIO. But you wouldn't anticipate making any budget amendment this year? This budget, as you have introduced it, would be, from your standpoint, adequate?
Mr. MARTINEZ. It is adequate for us to continue the activities that we have got in place. There would be no intent to amend the budget request unless the recently introduced legislation is passed or we receive new direction from Congress.
Mr. FAZIO. So if Senator Campbell is not successful this year, we should leave the item as is in the bill. Is that your position, simply to guide the ongoing efforts of the Bureau until we do get a resolution?
Mr. MARTINEZ. I think I would defer to Congress as to what the final language would be but we don't foresee any additional funding unless Congress, were to direct us to initiate construction.
Mr. FAZIO. Okay. Thank you.
Mr. MCDADE. The Chair recognizes the gentleman from Alabama.
MR. CALLAHAN'S OPENING REMARKS
Mr. CALLAHAN. I thank you, Mr. Chairman. And I recognize that most of the activity of your agency is directed west of the Mississippi, and that is fine with me. I have long supported that and, thus, when I have problems I always get the support of my friend from California, because my problems are so small compared to his. And I am going to solicit that support, and I am optimistic that I am going to have that support, because the Chairman of the Committee is coming to my district to visit me, and I am going to the gentleman from Michigan's home district to visit him, and I am a next-door neighbor to Visclosky. Chet and I are related by the fact that we were common allies during the Civil War.
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I have a lot of friends on this committee, and I want to make it simple.
DOG RIVER—MOBILE, ALABAMA
We have a project. I live on a river in Mobile that has, because of excessive siltation and rainwater runoff, actually been devastated. The city and the state and the county are willing to put up 90 percent of the funds to reclaim that, to make it, once again, a pristine system. However, the Corps has to do it. And, as you know, there are rules and regulations about new starts, especially restrictive when a project is not feasible from an economic point of view. So we need $2 million from the United States of America to match the State, local and county monies to return this body of water to a pristine situation.
Now, I want to make it simple for you. I think with my allies, and considering the fact that I am supporting all these projects for their districts, the Committee would be responsive to my request. If you will tell me where to put the $2 million request, I will do it, rather than go through this lengthy process of me contacting one of your aides or your aide contacting one of my aides. I want to make it as simple for you as I possibly can.
Now, where do you want me to put the $2 million request?
Secretary BABBITT. Mr. Callahan, this may be an historic opportunity for the Bureau of Reclamation to establish a beachhead East of the Mississippi River. So I ask you all to take note.
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Seriously, I would like to respond, with the leave of the chairman, to you in writing, because if this is, in fact, a restoration-type project, that is the sort of thing that we have been doing in Florida, I think, with great success, and in a variety of other places. Whether or not that money should be appropriated, that is the Committee's decision, and could be profitably expended by the Fish and Wildlife Service or some other agency, I think, depends in large measure on what it is that the restoration is to consist of.
It may be that if you are looking for a Federal cost share to flow straight through to the agencies, you could appropriate it to me and give it——
Mr. CALLAHAN. That is what I think would be the simplest thing if we can't get it through the Corps of Engineers because we can't economically justify the project from a commercial point of view.
Secretary BABBITT. Yes.
Mr. CALLAHAN. Thus they would have to almost establish it as a new start. But I think that the uniqueness of the State of Alabama putting up 90 percent of the matching monies represents a pilot program that certainly should be investigated as a way to reclaim destroyed estuaries or destroyed rivers such as the Dog River in Mobile.
Secretary BABBITT. Mr. Callahan, I don't want to get out on a limb with the rest of the Committee here, but you should probably have a look at the precedent created for the Central Utah Project, where the money was——
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Mr. CALLAHAN. Well, I know that, but I want to tell my staff person or you to tell me where to put it in this bill.
Secretary BABBITT. Secretary of the Interior.
Mr. CALLAHAN. Secretary of the Interior? Should I mention specifically what it is for?
You are not planning on going to South America, are you?
If you would get with me, prior to the markup of this bill, we could discuss something to give you the discretion to make absolutely certain it is a reclamation project. I realize that there are a lot of more important things like the Jazz Festival in New Orleans, which, incidentally, is on the west side of the Mississippi River. That is all right, too.
Mr. Secretary, before markup, if you would, please provide me with a suggested route as to where we could put this $2 million.
Secretary BABBITT. All right.
MNI WICONI PIPELINE CONTRACT
Mr. CALLAHAN. Secondly, since we are spending all this money west of the Mississippi, and I totally support that, we do have contractors in Alabama who sometimes supply the needs of some of these water projects. Such as one contractor to the Mni Wiconi pipeline venture, the subject of a letter you received from the entire Alabama delegation. There is an apparent lack of transparency in that contractual arrangement, with the Mni Wiconi people arranging the details of the contract so it could only apply to one piping company. And we think that that should be looked at in great depth by your agency.
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As you know, we are going through a rescission process now, and I think that you should convey the seriousness of our concerns to the people that are running this project. I am going to be on that Conference Committee and we are going to be looking for all kinds of money to rescind, and we very likely might look at rescinding the third stage of this project if they do not have transparency, which gives an opportunity to all people in America to bid on a pipeline project.
The United States is going to be responsible for the maintenance of that project, and I think that your agency has the authority to instruct them, number one, to be a little bit more transparent and, number two, to make certain that they are building a system that is not going to require extensive maintenance some time in the future.
Secretary BABBITT. Mr. Chairman, I have been briefed on this issue and I concur with your suggestions. This project has been delegated out to the Ogalala Sioux under a 638 contract, but I think we retain the responsibility to see that it is done correctly. And it is my understanding that the bid specs include the kind of pipe that you are concerned about, and that we should therefore make certain that those bids are being broadcast and selected on the merits, because your people do qualify.
Mr. CALLAHAN. Well, just make certain that the Mni Wiconi people understand that, that the project is in jeopardy——
Secretary BABBITT. Good.
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Mr. CALLAHAN [continuing]. As a result of that.
Secretary BABBITT. I hear you clearly.
Mr. CALLAHAN. Thank you, Mr. Secretary.
Thank you, Mr. Chairman.
Mr. MCDADE. The Chair recognizes the gentleman from Indiana.
MR. VISCLOSKY'S OPENING REMARKS
Mr. VISCLOSKY. Thank you, Mr. Chairman. I don't think philosophy gets you very far in the United States Congress, but I just enjoy these conversations as someone east of the Mississippi, north of the Mason-Dixon line and with too much water along my lake shore right now. I am just fascinated by these conversations.
I would, for the record, note that Mr. Pastor and I have had a number of conversations where he has tried to educate me about the value of sunlight and photovoltaic cells, accusing me of not necessarily having a great quantity of sunlight in my district and indicating that he has a lot in his. I have water in mine and apparently many people don't.
I appreciate the responsibilities that the Bureau does have. And I started my career, Mr. Chairman, on the Interior Committee, and that was an educational experience. Water is something that, as a child and as an adult, I have always just taken for granted. It is something that many times we have had too much of. Obviously, it is of great concern and importance to the people out West.
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Having said that, I also associate myself with the Chairman's remarks earlier, recognizing that there are responsibilities here. But Mr. Secretary, in your opening statement, the point is made that the history of the Department of Interior has been one of change. So I do think that the Chairman has made a valid point as far as always looking for efficiencies in how government is going to meet these responsibilities.
TITLE TRANSFERS
The couple of questions that I have regard asset transfers. Over the last few years, there have been efforts in Congress and among water users to initiate title transfers of selected reclamation facilities to local water districts. Assuming that those users are willing to assume title and future responsibility, are there any compelling reasons to retain Federal ownership for those facilities?
Secretary BABBITT. Congressman, the Bureau has been actively engaged in looking at this issue of title transfer. I believe there are projects that can be transferred, but there are a number of screens, I think, we need to get through. Where there are interstate interests, obviously that is a very different matter and that includes virtually all of the large projects.
For the smaller projects, I think there are probably three issues that we need to look carefully at. One is whether the people who would operate the project can be relied upon to represent the interests of all the stakeholders, because on any river stream, even intrastate, the operation of a project typically affects downstream and often upstream users, fish and wildlife, municipal users, and seasonal withdrawals.
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What we found in some of these intrastate cases is that the local irrigation district, the ones seeking title, is one thing. But there will be a lot of other folks showing up saying we oppose that because we are not certain that a single interest can represent the multiplicity of indirect interests. I would include the environmental interests in that.
Now, lastly, there is the issue of accumulated debt which is still hanging over some of these districts.
All of that said, we are looking at this on a case-by-case basis. I believe that there are several intrastate transfers that meet those criteria in the pipeline now, and we will continue to look at others. We are not here to justify the status quo.
Mr. VISCLOSKY. Mr. Secretary, in 1995, the Vice President talked about these types of transfers. You indicate there may be a couple in the pipeline. Does the Department have any specific proposals before Congress at this time?
Secretary BABBITT. I am not certain that we need congressional approval for all of those transfers. Anybody want to pick that up, Eluid?
Mr. MARTINEZ. When we have an asset transfer, we need congressional authorization. There are some discussions taking place with some districts out West where the Administration will be in a position to make recommendations on the transfer of some facilities in the near future.
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The transfers pending before Congress are the highest priority, and we have been trying to work through the issues. Notwithstanding the Bureau's desire to move these initiatives forward, there are a lot of other vested interests that come into play, fish and wildlife, Treasury issues, OMB issues, Forest Service issues and so forth. We continue as the Bureau of Reclamation to try to move these initiatives forward, and I think we are going to be successful.
Mr. VISCLOSKY. If you could, for the record, provide a list of projects that potentially are in the pipeline, and using the Vice President's Demarcation 95, if that could be the baseline, I would appreciate it very much.
Secretary BABBITT. Good, good. We will respond.
Mr. VISCLOSKY. Great. Thank you very much.
[The information follows:]
"The Official Committee record contains additional material here."
Thank you, Mr. Chairman.
Mr. MCDADE. The gentleman from Michigan, Mr. Knollenberg.
MR. KNOLLENBERG'S OPENING REMARKS
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Mr. KNOLLENBERG. Mr. Chairman, thank you. Thank you very kindly.
I am sorry I missed, Mr. Secretary, some of the initial testimony regarding reclamation, but I think you pretty well covered that base.
SLEEPING BEAR DUNES NATIONAL LAKESHORE
I have a topic that relates to a specific problem for those of us from Michigan. I am talking about the entire State. It is the Sleeping Bear Dunes National Lake Shore. It is within the jurisdiction of the Department of Interior and specifically within the National Park Service, as you know. You may not know about the specific national park—perhaps you do—but I would like to give you just a very, very brief history of what happened to over 300 homeowners. Many built their homes up there with their own hands. Some are year round; some are not.
But in 1970, these 300 or so homeowners were given their eviction notice when the Sleeping Bear Dunes National Lake Shore was created. And in that 28-year time frame, it has been kind of a struggle, maybe a war, between the National Park Service and those homeowners over the terms offered by the National Park Service to the various leaseholders and when they must leave their homes. It varies substantially.
Now, there are still over 100 homes held by their original owners, who would like to enjoy the possession of their homes for the remainder of their lives. And these leaseholders have been very frustrated because many of the abandoned homes, as those leases come up, are in such a state of disrepair, that they have become havens for folks to just use for their own purposes, for drug use, et cetera. They are an eyesore, in addition. And they have become a hazard to park visitors.
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As a matter of fact, many of the homes that were removed by the National Park Service were removed in such a manner that suggests almost a callousness, a disregard, by the Park Service.
I have got a photo that I am going to leave with you—I have others, so it is not the only one—that gives you some indication of the quality of things. Is it upside down? I can't even tell. But these are for you.
This is a primarily a septic system that you are going to be looking at here. It has fallen into Lake Michigan, and this is where the Park Service failed to return one of the properties to an acceptable state, let alone a natural state.
What has been very frustrating is that we tried to work with the National Park Service to allow these remaining leaseholders to keep possession of their homes for a fee. They have been willing to pay a fee. These fees would be used to return those abandoned structures to some kind of natural state, and the National Park Service has rejected this proposal out of hand.
As I say, remember, these leaseholders are the eyes and ears of the lake shore and many of them have been coming there for forty, fifty years, long before the 1970 determination was made.
There will be a proper time for them to leave, but it doesn't make sense to throw them out when the other abandoned homes continue to remain in their current condition, which is a state of disrepair.
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Section 327 of the 1998 Interior appropriations bill prohibits the Park Service from evicting leaseholders unless it has sufficient funds to remove the structures from that property within 90 days of the eviction.
The purpose of this was to ensure that there was not going to be an increase in the number of abandoned structures that currently litter the lake shore. The claim is made, by the way, by the Park Service that they have the money, but they aren't spending it, and I refer back to an item from sometime back about the $580,000 per unit cost of some construction on employee housing I have to say this, Vic, in California's Yosemite National Park.
I don't know if that is where the money went, but it isn't going for the purpose of bringing those buildings back into a state where at least it looks natural or it is protected in some way.
LETTER TO DIRECTOR STANTON
I joined with other Members of Congress, particularly Michigan Members, in writing a letter to Director Stanton. I have a copy of that letter as well. I believe that the letter gives Mr. Stanton until the 31st of March, which comes up very quickly, to respond to our concern. So he still has some time. But it is rapidly diminishing. And I would appreciate it if you would impress upon Mr. Stanton the significance of this, and really all we want to do is to assure that the people, the residents who live there, that if there are going to be abandoned homes, they aren't abandoned very long; that there is a 90-day closure on that problem.
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The crime rate has picked up. And I think the pictures tell a story that I couldn't begin to tell about the condition of things.
So what we are really trying to do is to get the Park Service to acknowledge that either they have the money or they don't, and then if they don't, I am not suggesting we take it from Yosemite, but I am suggesting that we look into the matter and, with your help, perhaps we can come to a solution. But we would like to work out a compromise that is good for the people up there, for the Department, and for the lake shore, so that we have a scenic beach area. And it is a beautiful area.
So I am just imploring you, if you will, to look into it, and urge his response by the 31st of March, so that we can help remedy the problem and give our homeowners up there some indication of where they are in the scheme of this thing.
And I have no questions, but if you have some significant comments you would like to make, I would be happy to hear from you.
Secretary BABBITT. Congressman, I don't know whether they are significant or not, but I would like to respond. This is obviously a very valid concern that you have. I am not familiar with the details, but I will avow to you that you will receive a response from Mr. Stanton by the end of the month, and it will be a response which will have been reviewed by me personally. If you have any problems with it, I would invite you to call me on April 1st.
Mr. KNOLLENBERG. I will. Thank you, Mr. Secretary.
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Secretary BABBITT. Sure.
Mr. KNOLLENBERG. I appreciate that.
Mr. MCDADE. It is April 2.
Mr. KNOLLENBERG. It is April 2. I think we have to do it, but thank you, Mr. Secretary. I would appreciate you looking into that.
Thank you, Mr. Chairman.
Mr. MCDADE. I am pleased to recognize at this time the gentleman from Arizona, Mr. Pastor.
MR. PASTOR'S OPENING REMARKS
Mr. PASTOR. Thank you, Mr. Chairman.
Mr. Secretary, Madam Secretary, Commissioner, good morning and welcome.
First of all, Mr. Chairman, I would like to thank the Commissioner and the personnel of the Bureau of Reclamation for the promptness and attention they have given to many concerns we have had in Arizona. I know that in Yuma County we are dealing with sediment in the Colorado River and with land exchanges, and I know that we continue to work with you in trying to resolve the issue of the Central Arizona Project water settlement distribution. I would like to thank you for the attention that you have given in assisting us to solve those problems.
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Mr. Secretary, the expectation on the Salton Sea is that the water will be coming from northern California, and the salinity will be removed, I suppose, with the plant in Yuma so we can return it back to the Salton Sea. So maybe we can work it out in a win/win situation.
Mr. Chairman, most of my questions will be submitted for the record dealing with CAP and the other issues that we have in Arizona, but I would like to ask one question.
[Mr. Pastor's questions and answers for the record follows:]
"The Official Committee record contains additional material here."
Mr. MCDADE. Without objection, they will be received.
HABITAT RESTORATION ON GILA SALT RIVER
Mr. PASTOR. Thank you, Mr. Chairman. We have a project that is unique in terms of its objective and also unique in terms of a partnership between various parties in a metropolitan area in western Maricopa County. You have the City of Phoenix, you have Glendale, all the cities that are co-partners with the Corps of Engineers, Bureau of Reclamation and EPA. So we are trying to bring together a partnership, and it is very interesting because we are trying to restore a habitat out in the Gila Salt River and we are using reclaimed waste water.
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Again, how do you deal with the resources that you have—in this case wastewater—so that we can restore the habitat and bring it to a positive use?
Under the authority provided in 1992, Mr. Commissioner, the Bureau is participating with the City of Phoenix and EPA in the construction of a cost-shared research demonstration project, which thus far is showing that constructed wetland technology is feasible in the arid Southwest. The Bureau has budgeted $400,000 to continue engineering and environmental analysis of the project, an amount that is far below the $1.5 million needed to keep this important project on schedule.
My question is, Mr. Commissioner: What level of funding is necessary to match the commitment of the project's local sponsor and keep the project on schedule during fiscal year 1999?
Mr. MARTINEZ. Mr. Chairman, Representative Pastor, our $400,000 budget request was formulated to continue the normal operations of the project. Since we put our budget proposal together, I am advised that three issues have arisen that warrant the expenditure of an additional $1.1 million by the Federal Government. We have some problems dealing with the details of mosquito habitat, muskrat infestation and reconfiguration of the site. Since our budget formulation, these issues have come up, and if we are going to move that project forward, we would probably need some additional resources.
Mr. PASTOR. Thank you, Mr. Commissioner.
Thank you, Mr. Secretary, Madam Secretary.
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Mr. Chairman, those are my questions. Thank you.
Mr. MCDADE. We thank the gentleman from Arizona. We appreciate his questioning.
That concludes the formal part of the hearing. We have a series of questions we will present you for detailed answers for the record. We thank you all for your attendance. We enjoyed the opportunity to hear your testimony.
Secretary BABBITT. Mr. Chairman, thank you.
Mr. MCDADE. We thank you again, Mr. Secretary. The committee stands in recess until 10:00 tomorrow morning.
[The questions and answers follows:]
"The Official Committee record contains additional material here."
Thursday, March 26, 1998.
APPALACHIAN REGIONAL COMMISSION
WITNESSES
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HON. CECIL H. UNDERWOOD, GOVERNOR, STATE OF WEST VIRGINIA
HON. JESSE L. WHITE, JR., FEDERAL CO-CHAIRMAN, APPALACHIAN REGIONAL COMMISSION
TOM HUNTER, EXECUTIVE DIRECTOR, APPALACHIAN REGIONAL COMMISSION
Mr. McDade's Opening Remarks
Mr. MCDADE. The committee will come to order.
We are pleased this morning to have in front of us the Appalachian Regional Commission, and we are doubly pleased to have our colleague, Alan Mollohan from West Virginia, who does such a superb job here in Washington. I understand you brought somebody that you would like to present to the Committee, and the gentleman from West Virginia is recognized for such time as he deems necessary.
Mr. Mollohan's Opening Remarks
Mr. MOLLOHAN. Thank you, Mr. Chairman. I appreciate the compliment, but it is doubly high praise coming from you, who are so distinguished.
Mr. Chairman, Mr. Fazio, Mr. Edwards, good morning. Thank you for the opportunity to appear here today with West Virginia's distinguished Governor, Cecil Underwood. It is good to be here.
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As I hope all of you know, we have a very high regard for this subcommittee. As I know the Chairman and the Ranking Member know, I have a very high regard for this subcommittee. And we respect the work each of you does in finding and funding creative strategies to meet our Nation's energy and water development needs. Without exception, you have been responsive to the needs of our State, especially in regards to helping us enhance the quality and usefulness of our water resources. Your concern for, and confidence in, our future is greatly appreciated by me and I know by our special guest, Governor Underwood.
Again, my thanks for your past support, and I look forward to working with this subcommittee and each of you throughout the year's appropriations cycle.
Mr. Chairman, Mr. Fazio, my purpose in being here today is not connected with any individual project, but it is connected to an organization that has played an absolutely vital role in the development of the Appalachian region and is crucial to its future progress.
I would like to pause to acknowledge the arrival of my chairman, Mr. Rogers, who is very supportive of the Appalachian Regional Commission, as is the chairman of this subcommittee.
That organization, of course, is the Appalachian Regional Commission, and this morning I have the honor and pleasure of introducing to you one of the ARC's leading supporters, the Governor of West Virginia, the Honorable Cecil Underwood. As you are about to learn, Governor Underwood's support for the ARC is based upon his long involvement in economic development in West Virginia from public and private sector perspectives.
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I know you will be favorably impressed by his analysis of how the Commission has improved the economy and quality of life of West Virginia and its companion ARC States. And I think you will be further impressed by how he has used the ARC program to promote partnerships among different levels of government, as well as in the private and nonprofit sectors.
Appalachian States have made historic advances, thanks to the Commission's role in infusing new technologies, establishing basic services, building transportation corridors and offering skills training. Clearly, this is a Federal-State partnership that works, and I appreciate very much how Governor Underwood has worked it as a partnership at the State level.
When it comes to getting ARC funding priorities, he has cast a wide net, seeking a broad range of input and soliciting the views of constituencies across the State, and in the end making sound judgments based on the needs and the opportunities at hand. That inclusive approach to ARC funding by the governor serves West Virginia well, it serves the region well, and ultimately it serves the country well.
I believe this subcommittee will appreciate the observations of Governor Underwood, a man who has devoted many years of his life and service to the people of West Virginia as a State legislator and then as a minority leader in the forties and fifties; as the youngest governor in the State's history when he was first elected in 1956; as a high school and college teacher; as president of Bethany College; as president of the Software Valley Foundation, a very important movement in our State; and in a host of private sector and educational capacities, Mr. Chairman.
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Mr. Chairman, Mr. Fazio, members of the committee, I am pleased to introduce to you a strong and knowledgeable advocate of the Appalachian Regional Commission, West Virginia Governor Cecil Underwood.
Mr. MCDADE. Alan, we thank you very much for taking the time. It means a great deal to us that you would come over to introduce the governor. We appreciate very much your putting your seal of approval on the program and what the governor is doing.
We know you are a bipartisan group here and we are delighted, Governor, to have you here this morning. We are honored by your presence. The degree of public service you have rendered is awesome and we all appreciate it. Governor, you may proceed as you wish.
Mr. MOLLOHAN. I am going to leave this in very capable hands, Mr. Chairman.
Mr. MCDADE. Thank you for being here.
GOVERNOR UNDERWOOD'S OPENING REMARKS
Governor UNDERWOOD. Thank you, Mr. Chairman, members of the Committee. I am very honored to be here today, and I am certainly honored to be presented so eloquently by Congressman Mollohan. He and I and his father before him have been long-time friends and have worked together on many, many projects. I am particularly impressed with his knowledge of economic development and in the field of technology.
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He mentioned Software Valley. Senator Byrd and I and a dozen other people created Software Valley in 1985, in an effort to develop high technology in West Virginia, and Congressman Mollohan has taken some of the activities we started and has developed a very significant high tech consortium in his district, and it is one of our fastest growing activities in the State.
I have an interesting history with the Commission. In a very hot, steamy August afternoon in 1959, three Governors met in a hotel in Annapolis, Maryland. Governor Tawes had been elected Governor of Maryland in 1958, Bert Combs was in his last year as Governor of Kentucky, and I was midway through my first term. The advantage I have of being around so long from a political standpoint, the political opponents I couldn't defeat, I have outlived.
Governor Tawes said, ''I committed myself to helping the high unemployment in the three mining counties of western Maryland during the campaign, and I want the two of you, who have the same problems, to see what we can come up with in the way of a creative approach to the high unemployment in the coal fields of Appalachia.'' This giant stride of full mechanization took place in the middle of my term, and in a little over a year, 25 percent of the work force of our entire State was displaced. That is not an easy thing to deal with when one is governor because the governor is the focal point.
And so we came up with the idea of a regional compact, and it didn't come into fruition until a few years later, when President Johnson proposed the creation of the Appalachian Regional Commission. But during the last two years of my term we had a number of meetings, working with the Appalachian governors, trying to come up with some sort of a cooperative arrangement. That is where it was born, and so I have followed it with great interest through all of the years since that time.
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I am here today on behalf of Governor Pataki of New York, who is the co-chair of the Commission this year. He was unable to come, and I am delighted to participate in this hearing. And I certainly appreciate the capable work of our Federal co-chairman, Dr. Jesse White, who is here with me today and will be testifying more in detail as soon as I complete my presentation.
All of the governors support President Clinton's fiscal year '99 budget in which he proposes $67 million for the Appalachian Regional Commission, and the support is unanimous from the nine Republican and four Democratic governors because we recognize the importance of this program for our people.
Since ARC's inception, the employment across the region has increased by 48 percent, and this is a significant development. My own State last year was number one in the Nation in the creation of new jobs in relation to our size. We had announced last year the creation of 9,613 new jobs, and that is an all-time record for our State. And we have set a goal of a thousand jobs a month for '98. I am happy to tell you that, with a few days left to go in March, we are at 2,800 jobs since the beginning of the new year.
These are very diversified geographically, they are diversified economically, they are not clustered, as we used to be in the coal industry. Half of the jobs last year were expansion of existing businesses and industries already in the State. I give the ARC a major credit for this kind of development because, with the investments in the infrastructure and particularly in the highways, we have made our State, as the rest of the region, very accessible. Since 1988 in the region, we have had over 1 million new jobs. The goal of the governors is to get the unemployment rate across Appalachia below the national level, if that is possible.
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I mentioned retention and expansion as being as important to us as finding new jobs and new industries, to bring to the State. For that reason, the ARC leadership has placed major emphasis on training and education programs. We are linked heavily to technology because technology provides us the roadbed for the information superhighway, just as the Appalachian corridors provide us with the roadbeds for the earthly highways. The technology gives us an electronic proximity that pulls us together as we never have been before.
The mountainous terrain of Appalachia historically has kept us very isolated with a lot of provincialism. I see that fading in the 40 years between my terms. It is just a 180 degree difference. We can now think as a State, whereas before we thought of very small regions. Even with as much progress as we have made, we still have too many pockets of illiteracy, too many pockets of high school dropouts, too many pockets of poverty, and for that reason the governors have allocated consistently, 30 percent of the total allocation to the States, to address the most distressed areas.
When I go back home tonight, I am going to McDowell County in our State for the annual Chamber of Commerce dinner, and that is probably the most depressed county in the State. It has lost 30 percent of its population in 40 years. There is high unemployment, and I am going to spend a couple of days there in the next few weeks trying to see how we can find things to initiate new activity.
Just two days ago I was very happy to participate in a very important announcement of a new water system for an entire county like McDowell County, which was one of the coal counties. This will be the 155th infrastructure project for which we have used ARC for seed money. ARC has spent $36.4 million in infrastructure during the last—well, during its existence. The Boone County project requested $1 million of ARC funds, to be used as seed money. Although the commitment for it hasn't been approved yet, we were able to develop a $28 million project serving an entire county, much of which did not have a water system. The systems that were in place in public service districts were inadequate and in need of replacement and they had no hope of replacing them.
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But by using $1 million of ARC money, some abandoned mines funds that were available, some small city block grants, and we used a mitigation fund in the State, and although this is not a flood-prone area, we used some flood money the governor has available, and the West Virginia American Water Company stepped up and committed itself to $16 million for this project. So we have under construction now a $28 million project that will serve 82 percent of the entire county and will serve over 21,000 residents, and many of them did not have water before. When completed, it will be 71 miles of water pipe.
It has another important promise for the future. Going through that county is Appalachian Corridor D, going south from Charleston to the Kentucky border and crossing at Williamson in the direction of Pikeville. As the highway was completed mile by mile, growth and development flourished along its way, but that kind of growth and development can't flourish unless the infrastructure is there.
So with the addition of this county, we are moving south with infrastructure, with water service that will make it possible for a very underdeveloped area to grow over the next several years. We hope eventually to take the water system all the way to Williamson, using the right-of-way of the Appalachian corridor as the route for the development.
We know and we appreciate the fact that the President and the Congress are moving now with making the corridors a priority for completion in the new ISTEA reauthorization, and all the governors are very pleased with this development. In the Appalachian regional budget this year we have not asked for highway funds because they have become a priority on their own.
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Traditionally our policy has made it possible for us to take a small percentage of the highway funds to develop i