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lamation is able to retain 10% of the water exchanged that would have been lost to transit from moving the water to the lower reservoirs. The revenues from the contracting arrangement will also repay the Fry-Ark project at a faster rate.

Finally, Reclamation has entered into exchange contracts of this type at other federal projects in Colorado, including the Colorado-Big Thompson Project where we have executed two such exchange contracts of non-project water. One is with the Municipal Subdistrict of Northern Colorado Water Conservancy District for the Windy Gap Project which moves water from the west slope of the Continental Divide to the east slope through project facilities. The other is with the City of Berthoud (a member of Northern Colorado Water Conservancy District). Reclamation is currently in the process of evaluating the possibility of another contract for exchange of non-project water with the Municipal Subdistrict of Northern Colorado Water Conservancy District for the Windy Gap Firming Project.

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Mrs. NAPOLITANO. Thank you, gentlemen, and thank you for staying within the time frame. The first question I have is for you, Mr. Ryan, so you might as well keep that mike up there.

One of the issues in reading your testimony there, you talk about the insignificant impact, on page 2, on the environment and doesn't require to construct additional facilities. Can you just briefly tell me how significant you found that?

Mr. RYAN. Chair—is that with the question directed to the Aurora contract?

Mrs. NAPOLITANO. Correct.

Mr. RYAN. Yes, ma'am. In the—in the environmental assessment that was prepared, we take a look at what the no-action alternative is, and the no-action alternative is these water rights are held by the City of Aurora. State law in Colorado allows them to move the water out of the basin up to Aurora. We believe that would happen regardless of whether or not the Fryingpan-Arkansas facility were used to help. So that becomes the baseline. Then the analysis in the environmental document, what the law requires is you take a look at the effects of the proposed action against the no-action alternative. Since the water would move anyway, there is no significant impact.

Mrs. NAPOLITANO. Thank you. And I understand that, but in looking at the map that I've reviewed, it allows for the lower portion to be able to exchange the water rights for water from the upper portion, which is cleaner water and essentially more, how would I say, desirable.

Mr. RYAN. And that's the point that Congressman Salazar made earlier in his remarks. The environmental analysis, which reaches approximately 200 pages, took four years and a million and a half dollars to complete. One of the things they looked at was the impact to water quality. We believe those impacts would be negligible. But hearing from the communities, there is strong concern about the potential for that. We've built into the environmental commitments of the document and into the proposed contract with Aurora what we feel are safeguards, that should water quality become a concern, certain issues should those

Mrs. NAPOLITANO. Excuse me, sir, but I understand there is a concern now.

Mr. RYAN. There is a concern about impacts that may develop.

Mrs. NAPOLITANO. No, I'm talking about the water quality itself in that area, in the bottom area. My understanding, from reading various articles and reading some of the testimony, it already is questionable.

Mr. RYAN. Are you speaking, Madam, to the groundwater quality or the surface water?

Mrs. NAPOLITANO. The water quality of—the surface water.

Mr. RYAN. OK. Now my understanding is surface water quality problems do exist in the lower basin. I'm not-I don't understand the point that people make is how would the contract with Aurora exacerbate those. The result of our analysis shows that it would not.

Mrs. NAPOLITANO. Well, it doesn't take much common sense, sir, to understand that if you take more water from the top in exchange for water from the bottom, you're going to have less available to the bottom portion. I talk in general terms, because that's what I am. And if you did that in my area, I would be all over you, sir, because it is not something that we would consider, never mind kosher, ethical.

Let me give you the next question. Can you give us more information on exactly what authority the Bureau of Reclamation has to contract with Aurora and do you have a Solicitor's Opinion and do you have a copy of that opinion from your solicitor?

Mr. RYAN. Reclamation, in working through the documentation for the proposed contract, we worked with the solicitors. I do not have a formal Solicitor's Opinion, but the Solicitor's Office advises us that under the Reclamation Act of 1902, and more specifically Section 14 of the 1939 Act and the Fryingpan-Arkansas authorization of 1962, the Solicitor's Office is confident that we have authority to enter into this contract.

Mrs. NAPOLITANO. Would you mind being able to provide this committee the information that allowed you to be able to make that decision based on what you were informed by your solicitor?

Mr. RYAN. Yes, ma'am, we'll do that.
Mrs. NAPOLITANO. For the record. Thank you.

Mrs. NAPOLITANO. And I'm already over my time. I'd like now to ask Congressman Salazar-I'm sorry, Perlmutter-or Lamborn. I'm sorry.

Mr. LAMBORN. Yeah, thank you, Madam Chairwoman.

Mr. Ryan, one of the elements of the proposed piece of legislation that Congressman Salazar has called for is a state-sponsored water study that would examine social, economic and cultural impacts of water diversions or water use on lower river users. Has the Bureau ever funded such a study like that before?

Mr. RYAN. Not to my knowledge, sir.
Mr. LAMBORN. OK. Thank you.

Could you next explain what the role of the Fountain Creek is in regard to the Fryingpan-Arkansas Project? In other words, is Fountain Creek part of the Fryingpan-Arkansas system?

Mr. RYAN. The City of Colorado Springs is a contractor for Fryingpan-Arkansas Project water. One of the drainages that's involved with return flow is the Fountain Creek area. There has been controversy in the recent past about city operations and wastewater treatment plant operations as well as regional flooding in the area. It is something that Reclamation and the City and others are taking a look at as we prepare the environmental documentation for the Southern Delivery System, and it's also an issue that Reclamation is involved with and citizens working on the Fountain Creek

Mr. LAMBORN. OK. Could you explain the role and the extent to which agricultural runoff has contributed to the degradation of water quality in the Arkansas River.

Mr. RYAN. The water quality studies that were done in the environmental documentation for the Aurora contract indicate that there has been some impact. Agricultural practices typically have some effect upon water quality through the introduction of return flows. It becomes a factor of the soil characteristics and the agricultural practices that will relate to both the specificity of the impact and the magnitude of the impact. But one thing is that there are agricultural practices which have some impact on water quality.

Mr. LAMBORN. OK. Thank you. And next, if I could ask a estion of Mr. Long, a question or two. As you saw in the film clip a few minutes ago, President Kennedy said that a rising tide lifts all boats, and his whole speech was very inspiring, as I'm sure you would agree. In that context, if Pueblo Reservoir were to be expanded, would that allow for more water for all of the parties in the Arkansas Valley?

Mr. LONG. Under the proper operation, it would have the potential to do that, yes.

Mr. LAMBORN. Thank you very much.

Next I'm going to ask you about the process by which PSOP has come about. Could you just explain how your district has done its negotiation and followed different processes to come up with the proposals that we have in front of us today?

Mr. LONG. I could provide part of an answer. We'll need to provide a written response to the larger part of it. I've only been on the southeast district since 2002. The actual process in looking at the potential for PSOP started many years before I was a board member, but there was a report that was submitted to our board several years ago. It included many different participants' input. Yeah, we still have to reach agreement on how that would move forward, but to really provide the historical detail, I will need to respond to that in writing.

Mr. LAMBORN. But would you agree that there have been long negotiations and a large degree of consensus and deliberation in the whole process that you have followed?

Mr. LONG. I would agree with part of your comment. Yes, there have been many, many years and much time involved in the process—and a great deal of consensus—but obviously not enough to move the project forward, but there is a great deal of consensus. There are many participants up and down the valley who need storage, but there's a concern, I believe, among the dissenters that there's a potential that new storage could be monopolized, and I think that's where we're at right now. So, yes, we've done a lot of work, put a lot of time in on it, we're reaching consensus, but we're not there yet.

Mr. LAMBORN. Thank you.
Mrs. NAPOLITANO. Thank you, Mr. Lamborn.
Mr. Salazar

Mr. SALAZAR. Thank you, Madam Chair. I appreciate your recognizing me. Chairman Long, I want to, first of all, thank you for your leader

, ship on trying to move the Arkansas Valley conduit, and I appreciate the question that, Madam Chair, we hope that we can get a hearing and that we can move this project right along. You know, the conduit was one of the original pieces of the Fry-Ark Project. Doesn't it frustrate you that the Fry-Ark Project is now being utilized to move water to exchange storage out of the lower Ark and out of the basin before it even serves one of its primary goals, and that is to deliver clean water to the towns along the lower Arkansas River?

Mr. LONG. Yes, it is somewhat discouraging. I made the statement before that if we do not get the conduit, the project ultimately would be a detriment to the valley rather than a benefit. As agriculture lands are dried up, the project water then goes to municipal interests, so ultimately a large portion of the water could be moved out of the area that was intended to be served and been a beneficiary of the project, yes.

Mr. SALAZAR. Thank you, Chairman. One other quick question for you. In 2001, the Southeast District attorney, Lee Miller, he wrote a legal memo outlining why the district approved the Bureau storage leases to Aurora. Do you believe that the legal arguments outlined in the memo are still valid today?

Mr. LONG. There is no question we have board members who believe that the arguments are still valid. We believe those arguments are very valid, indicating that virtually everyone else outside of the basin. There was a little bit of a gray area concerning Aurora, because their previous contracts with the Bureau created a little bit of unease, and in my previous statements, I acknowledged that we had reached an agreement with Aurora, but it was because of that unease with previous relationships the Bureau had with Aurora. But we absolutely believe that the project is not authorized to be used to assist anyone outside of the Arkansas Valley Basin.

Mr. SALAZAR. Thank you, Mr. Chairman.

Mr. Ryan, you stated in your verbal testimony that the authority the Bureau of Reclamation had to actually contract with the 40year contract with Aurora was the 1902 Act. Did you mean 1902 or 1920?

Mr. RYAN. In my statement, Congressman, I referred to the 1902 Act, specifically the act of June 17th. Many people commonly refer to that as the Reclamation Act that initiated the reclamation. But more specifically, as we come down through the years, we believe that Section 14 of the 1939 Act, coupled with the FryingpanArkansas provision of 1962, gives the Secretary authority.

Mr. SALAZAR. OK. Mr. Ryan, are you aware of the Sammy decision discussing the use of the Washington project facilities?

Mr. RYAN. Is that for me, sir?

Mr. SALAZAR. In that opinion, the Solicitor General reaffirmed that the principles of the Federal law requires that the Secretary, through the Bureau of Reclamation, to operate its water projects in a manner consistent with the project's legislative authorities and in a manner consistent with any feasibility reports submitted to Congress at the time of the project authorization.

And the project—the authorization for this project was to provide water within the local—in this map, we show the project's boundary, which basically would have been Colorado Springs and Fountain Creek and along the lower Arkansas River all the way to the Kansas line.

So based on that information, it seems like there was no feasibility study at the time that the legislation was moved forward by Wayne Aspinall, correct?

Mr. RYAN. To get to the first part of your question, am I aware of the citation, the legal citation, my expectation is that the Solicitor's Office takes those into consideration as they advise us on the bounds of the Secretary's legal discretion. In regard to the planning documents developed in the early years of planning and formulation for the Fryingpan-Arkansas, I'm aware that some of the early documents referenced the use of the proposed Federal facilities in conjunction with non-Federal facilities to help people manage water, more specifically a person, when they read through the documents, the one that comes—at least for me, when I read through them, the one that came to most ready reference was the Homestake Project. But there are other non-Federal projects that are in the Arkansas Basin that some of the early planning documents that the Fryingpan-Arkansas discuss.

Mr. SALAZAR. Thank you very much. I yield now. I apologize for taking more time.

Mrs. NAPOLITANO. No problem. Mr. Perlmutter.
Mr. PERLMUTTER. Thanks, Madam Chair.

Mr. Long, I get confused between the Lower Arkansas District and the Southeast Colorado Conservancy District. Which part of the-on this map, what part do you represent?

Mr. LONG. I represent all the area in brown.

Mr. PERLMUTTER. OK. So you're all the way down to the Kansas border.

Mr. LONG. Actually the map is not entirely accurate. We go to the city of Lamar, near Kansas.

Mr. PERLMUTTER. And originally as part of this project, the conduit was contemplated to bring water way downstream, isn't that right? Mr. LONG. Correct, correct.

Mr. PERLMUTTER. And that is what you're trying to get built now as part of the request by Senator Salazar and you, Representative Salazar? Well, do you have one you and your brother—they get me confused too. So I'm confused by the districts and I'm confused by the Salazars, but that's a whole other story.

So you have the—the request is a conduit, and the purpose of that is water quality?

Mr. LONG. Correct.

Mr. PERLMUTTER. Now, isn't it true that a lot of the problems with water quality to the very end of the river as you go to Kansas is a result of metals and minerals into the river itself below the Pueblo Reservoir?

Mr. LONG. I would say that's partially true. There are many contributing factors, but yes.

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