stem of the Arkansas River through 2002. This is one-fifth of historic average native Arkansas River flows. 2 For the communities east of Pueblo, the Fry-Ark Project has so far been a disaster. An economy once bolstered by thriving farms, and the demand for goods and services by rural families, has become a string of economically depressed communities struggling to survive. (Rocky Ford Year book) The poor water quality of the valley was recognized in the earliest congressional testimony on the Fryingpan-Arkansas Project. The remedy was to develop water resources as a primary supply for cities like Rocky Ford, La Junta, Las Animas and Lamar. Today, the Arkansas Valley Conduit remains only a dream for those cities, while the federal government is taking steps toward projects that will only worsen water quality in incremental, but deadly, steps. Those communities have been through a series of last stands: the decline of the family farm, the collapse of the regional sugar beet industry and the endless water raids. In contrast, the City of Colorado Springs has thrived beyond all expectations of the hopeful people who formed the Southeastern Colorado Water Conservancy District 50 years ago. At that time, Pueblo was larger than Colorado Springs, a quaint mountain city seemingly in league with its partners in the Arkansas Valley Through its partnership with Colorado Springs, Aurora has bullied its way into the Arkansas Valley. Without the Homestake Project, Aurora never would have gained a toehold in the Arkansas Valley and developed the absurd premise of moving one-third of its annual water supply 100 miles from what were once productive farms. The Bureau of Reclamation has compounded that technical and moral error through its annual contracts with Aurora. In just three days, the Bureau of Reclamation is planning to finalize a contract that will tie up part of the FryingpanArkansas Project for the next 40 years. One issue of particular significance is exchanges. Aurora and others trade pristine mountain water for poor quality water from the Lower Arkansas Valley through exchanges-exchanges made possible by the reservoirs of the Fry-Ark Project. The poor quality of water for downstream users was well documented more than 50 years ago. Instead of the making that water better the real golden promise of the Fryingpan Arkansas Project-the federal government has established the means to adopt policies that will actually make the water worse. Aurora would like to increase such exchanges. Aurora should never have been allowed into the Arkansas Basin through a federal project before all of the needs of the Basin were satisfied. Within the Southeastern District, there are communities whose water needs have never been met by the project. This past year, the district struggled mightily for more than nine months, to come up with a way to accommodate Pueblo West and Manitou Springs. The LAVWCD, among many others, firmly believes that nothing in the Fry-Ark authorizing act and amendments, 3 including documents incorporated by reference in the statute, provides authority for Reclamation to enter into long-term excess capacity contracts with Aurora. In particular, the proposed exchange contract is so far outside established law that Reclamation's authority to enter into such a contract is speculative, at best. Yet Reclamation would promote Aurora to the head of the class in its proposed contract when it comes to water exchanges. 4 Reclamation's authority to contract for non-project use of the Fry-Ark Project is not a new issue. It has been the subject of a lively and at times heated debate for over 20 years. But the issue is approaching a critical juncture since Reclamation appears poised to issue excess capacity storage and exchange contracts with Aurora. It seems to the LAVWCD that there are only two ways to resolve this issue: Congressional legislation or federal litigation. The LAVWCD continues to believe that it is preferable to solve this issue and others involving the Fry-Ark Project-through negotiations leading to an agreement that the parties could jointly recommend to Congress. To that end, the LAVWCD remains ready, willing and able to negotiate its concerns with Aurora, although, frankly, not everyone at Aurora has been similarly committed to engaging in good faith discussions. Perhaps—whether or not Reclamation heeds Senator Salazar's re 1 Charles H. Howe, "The Regional Economic Impacts of Transfers of Water from Irrigated Agriculture in the Arkansas Valley of Colorado to In-Basin and Out-of-Basin Non-Agricultural Uses," at 6 (2002). 2 Colo. Div. of Water Resources, "Annual Report," at 17 (1995). 3 Pub. L. No. 87-590 (76 Stat. 389, Aug. 16, 1962), amended by P.L. No. 95-386 (92 Stat. 2493, Nov. 3, 1978). 4 Letter dated July 13 (?), 1985 from Raymond H. Wilms, Fry-Ark Project Manager, to Tom Griswold, Aurora Manager of Planning and Resources. quest (which the LAVWCD supports) to defer action on the proposed contracts pending the completion of negotiations-Aurora will find a way to engage in constructive negotiations to address issues of concern to the Lower Valley. The alternative to legislation is litigation. The LAVWCD hopes that the issue of Aurora's contracts will not lead to court. However, the District is investigating and, if necessary, will pursue all available legal avenues to protect the future of the Lower Arkansas Valley. In Lake County, where two of the project's major lakes are located, officials complain about rough treatment at the hands of Reclamation. At the other end of the valley, residents in Kiowa County have not received one drop of water through the project. Yet Aurora is promoted to the head of the class when it comes to water exchanges in its pending contract with the Bureau of Reclamation. It's no wonder that in 2002, the voters in the five counties in the Lower Arkansas Valley-Bent, Crowley, Otero, Prowers and Pueblo-voted overwhelmingly to form the Lower Arkansas Valley Water Conservancy District. Embroiled in yet another drought, the residents of the five counties formed the district as a defensive measure to protect themselves from even more losses. In a way, it was yet another "last stand." The Lower Valley simply cannot afford any additional permanent transfers of agricultural water that would further undermine its economic future. That is why the LAVWCD has been investing time and money to develop a viable alternative to permanent agricultural transfers that will both strengthen irrigated agriculture and address the water needs of municipal and other users. Success will require some fundamental changes in the relationships between the interests involved, primarily in the form of new partnerships and cooperation. The LAVWCD has, accordingly, been working for over two years on a nine-party intergovernmental agreement. The draft IGA envisions a water future that addresses everyone's future social and economic well being. The Lower Arkansas Valley has a high proportion of Hispanic and low-income residents. In fact, Hispanic residents constitute over a third of the population of the LAVWCD. In addition, residents living below the poverty level ranged from 14.9 to 19.5 percent in the five counties that comprise the LAVWCD in 2000.6 7 President Clinton recognized that minority and low-income populations often bear disproportionately high and adverse human health or environmental effects of governmental programs. The possibility exists that minority and low-income populations could bear adversely high negative effects of future changes in the administration of the Fry-Ark Project. For example, Reclamation has proposed entering into long-term excess capacity contracts for the use of Fry-Ark facilities with Aurora, where the Hispanic population is roughly half that of Pueblo County. Similarly, the poverty rate in Aurora is between a third and a half of that found in the LAVWCD. 9 In short, the proposed excess capacity contracts with Aurora run counter to fundamental concepts of justice and the new partnerships and cooperation that the LAVWCD and others are trying to foster. As pressures on Colorado water by outside municipal users grow in coming years, what does the future hold for the Arkansas River? Do we continue to let the Fryingpan-Arkansas Project be used as a siphon that will continue to degrade water quality in the basin? Or do we complete the golden promise of the project for the communities, particularly those east of Pueblo? The ultimate question for water users in the Lower Arkansas Valley is: "How many more last stands can we survive?" Thank you for your attention. I will be happy to try to answer any questions Mrs. NAPOLITANO. Thank you, and next is Sandy White, the water attorney from La Veta. 5 U.S. Bureau of the Census, "State and County Quickfacts," available at http:// quickfacts.census.gov/qfd/states/08/08011.html. 6 Id. 7 Executive Order 12898 (Feb. 11, 1994). 8 U.S. Bureau of Census, "Factfinder, Aurora City, Colorado," available at http:// factfinder.census.gov/servlet/SAFFFacts? 9 Id. STATEMENT OF SANDY WHITE, WATER LAWYER, Mr. WHITE. Thank you, Madam Chairman-or Chairwoman. Mrs. NAPOLITANO. May I interrupt just to start time over again, please. I am going to have to step aside and I will turn it over to Ranking Member, Mr. Lamborn. I'll be right back. Mr. LAMBORN. Thank you, Madam Chairwoman. And Mr. White, can you please continue and give us your testimony. Mr. WHITE. Thank you very much, Madam Chair and members of the Subcommittee. I'm Sandy White. I have represented clients. I'm a water lawyer. I've represented clients in the Arkansas Valley since 1971. I currently appear before you on behalf of Pueblo Chieftain and the Arkansas Native L.L.C., which is a water right owner and is determined to protect the Arkansas Valley and the Fry-Ark Project. Now there's a lot of material in my written testimony, but I'd like to try to respond in the few minutes I have to some questions that have come up and are within my testimony. One of the questions the Chairwoman had was what were the purposes of this project, and we've heard that it's a large multipurpose project. Just about everything including the kitchen sink can be found in the preamble to the authorizing act of 1962. The real question is what is this project meant to do? And that same language appears in maybe a couple of dozen other project authorizing acts. What is the Fry-Ark Project meant to do? And there are two purposes that have developed and were initially intended. One, as President Kennedy said in the film clip we watched, is to import water into the Arkansas Valley. The second is to enhance the base flows that are already in the Arkansas Valley, and that's been done by creation of some Eastern Slope storage that captures flood flows, for example. So you have two purposes: To bring in transmountain water, or imported water, and to enhance the base flow. Into this situation came Aurora. It bought water rights to the base flow, far downstream from Pueblo, down where the water looks like what was on your right when Jay held things up. It is now proposing, or the Bureau is proposing, to enter into a contract with them that would swap that water for the clear water that's found in Twin Lakes and Turquoise Lake reservoirs. Only by using the project facilities through a process of storage and exchange is Aurora able to move the water upstream and out of the basin. So the thrust of my testimony is that based on the purposes of the project, the Bureau is not authorized to enter into that contract with Aurora. Now we've heard two things discussed in the way of authorization. One was Section 14 of the Reclamation Act. That's codified at 43 USC 369. And you read that, and yes, indeed, it is possible for the Secretary of Interior to enter into these kinds of contracts. But he must make a finding that the contract is necessary and that it is in the interests of the project. Neither of those findings has been made. And so when you get the material from the Solicitor's Office that was volunteered by the Bureau, look for where did the Secretary make those findings? He hasn't made those findings. The Bureau is essentially on an adventure of its own. We also heard about the Homestake Project and the connection between the Homestake Project and the Fry-Ark Project. The 1965 contract that was mentioned was entitled "Contract for the Transportation of Water From the Homestake Project." Now there is a Section 10B in that contract that talks about the storage of water in east slope facilities. But what it says is that the Bureau grants Aurora an option to negotiate for such a contract. So the argument must be that by granting Aurora an option to negotiate, the Bureau also created its own authority to enter into that contract. It is an absurd argument. The Bureau adopted it early on, over 15 years ago, and has now dropped it. And I know of no one who seriously carries it forth. So there is no authority. There has been no finding by the Secretary, and more importantly perhaps, under Section 390, according to USC 390, there has been no Congressional approval as required by that section. Mr. LAMBORN. Mr. White, thank you for your testimony. [The prepared statement of Mr. White follows:] Statement of Sandy White, Pueblo Chieftain and Chairwoman Napolitano and Members of the Subcommittee: I am Sandy White, a local water lawyer from La Veta, Colorado, and a partner in the Denver firm of White & Jankowski, LLP. I have represented clients on the Arkansas River since 1971. Today, I appear on behalf of the Pueblo Chieftain and Arkansas Native, LLC, a water right owner determined to protect the Arkansas River Basin and the Fryingpan-Arkansas Project. Thank you for inviting me to testify concerning the Project. As noted in the subject of this hearing, the larger issue is "sustainable water." In this basin whose native water has long been over-appropriated, the Fry-Ark Project's purposes of regulating base flows and importation of water to supplement the base flow are essential to a sustainable water supply, a sustainable economy. Background and Introduction Almost forty-five years ago, on August 16, 1962, President John F. Kennedy signed PL 87-590, authorizing the Fry-Ark Project. Two days later, he flew to Pueblo where he spoke at the then Pueblo Public Schools Stadium, about 6 blocks from here. After acknowledging the worthies on the podium, the President began: "I don't think there is any more valuable lesson for a President or for a member of the House and Senate to fly as we have flown today over some of the bleakest land in the United States and then to come to a river and see what grows next to it-to know how vitally important water is." Noting that_federally funded Reclamation projects were started some sixty years before under President Theodore Roosevelt's administration, President Kennedy went on. "We are finally on our way to bringing water through the Continental Divide into the Arkansas River Basin." Other witnesses have and will describe to you the vast benefits brought by the Project to the valley. I testify, however, in opposition to a planned future development: the Bureau's proposed 40-year "excess storage contract" with the City of Aurora. Under that contract, Aurora will use Project facilities to facilitate its export of water out of the Arkansas Basin for municipal use in Aurora. Located some 115 miles from here, Aurora is a large and powerful city. It has many good qualities, but it is not in the Arkansas Basin. The proposed contract will increase Aurora's average annual exports by over 20,000 a.f.. We must ask: If President Kennedy thought he signed project authorization to bring water into the Arkansas Basin, how is it that the project facilities will now be used to help Aurora or anyone else take water out of the basin? Summary The Bureau of Reclamation is without authority to enter into the proposed Aurora contract: 1. Original Project purposes are diametrically opposed to current contract purposes. • The original purposes of the Project were two-fold: (1) to make more efficient use of Arkansas base or native flows by providing storage facilities on the Arkansas, and (2) to add new water to the Arkansas by importing supplemental supplies from the Colorado River Basin into the Arkansas. • Under the Aurora contract, however, instead of using Project facilities to enhance the Arkansas base flows or to import supplemental water, the Bureau proposes to lend Project facilities to facilitate Aurora's taking water from the Arkansas Basin. 2. For the Bureau to be authorized to enter the Aurora contract, two things must happen. The Secretary of the Interior must find, inter alia, that the contract is “necessary" and "in the interests of the project," 43 USC § 389, and • Since the Aurora contract "seriously affects" project purposes and involves "major operation changes," Congress must give its approval. 43 USC § 390(d) 3. For the Bureau to comply with Colorado law in the Project's "control, appropriation, use, and distribution of water," P.L. 87-590, §5(e), under the Aurora contract: • The Project's west-slope water must be used solely in the Arkansas basin, based on Project water right decrees. • There may be no "re-coloring" of imported water as native water. Thornton v. Bijou. • Each contract exchange must either be approved by water court decree or be administered by the State Engineer, Empire Lodge v. Moyer, not by the Bureau's Regional Director, who is given “exclusive authority" over the exchanges by the Aurora contract. • Contract exchanges should operate only when Aurora's decreed exchanges could operate, thereby complying with the terms and conditions imposed by state law. • Since the Aurora contract's Environmental Assessment expressly avoided consideration of water right injury, only court adjudication or State Engineer administration of those exchanges will protect other water rights. Aurora's Problem Water How did this situation arise? First, Aurora purchased some Arkansas water which is diverted some 25-90 miles downstream from here. At that point, Aurora faced a geographic problem. The city had no feasible way to move the water directly from its original head-gate to Aurora's terminal storage and water treatment facilities. A 115 mile pipeline is mighty expensive. In addition, the water quality diverted in that reach of the Arkansas is not attractive for municipal use, particularly in comparison with water much farther upstream near the headwaters. As a result, Aurora started to work its water upstream-towards the point where the distance is shorter, where the headwaters of the Arkansas and South Platte River basins back up to one another. First, Aurora got temporary annual contracts with the Bureau to store its water in Pueblo Reservoir. That was followed by state water court decrees allowing that storage. Then Aurora got decrees allowing it to exchange the water from Pueblo Reservoir to its Otero Pump Station, some 115 miles upstream. At Otero, Aurora has existing facilities which can pump water into the South Platte River basin. However, Aurora's decrees imposed strict terms and conditions on the storage and exchanges, limiting Aurora's ability to exchange water to the Otero Pump Station. The Aurora Contract Even though Aurora is in a different river basin and will not use its water in the Arkansas basin, the Bureau of Reclamation agreed to assist Aurora. A deal was struck in the form of Contract No. 07XX6C0010. Comments on the final draft contract are due on or before June 4th, next Monday. Under the contract, Aurora could continue to store its water in Pueblo Reservoir; not for just one year, but for 40 years. Once the water was stored in Pueblo Reservoir, the Bureau would help Aurora again. Finding it difficult to comply with the terms and conditions of its decrees, Aurora needed a way to circumvent them. Again the Bureau was there to help. When Aurora could not operate under its decrees, the Bureau itself would move the water upstream. It would do so by "accounting." In what came to be called "contract exchanges" the Bureau would trade Aurora the same amount of Project water upstream as native water Aurora stored downstream in Pueblo Reservoir. Consequently, Fry-Ark Project water stored in project facilities, Twin Lakes or Turquoise Lake reservoirs which are 125 and 150 miles upstream, will become Aurora's water by computer keystroke. From those reservoirs, Project |